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HomeMy WebLinkAbout2003 Minutes BOWL WATER&LIGHT HOMETOWN PEOPLE. HOMETOWN POWER. 1232 Haco Drive P.O. Box 13007 Lansing, MI 48901-3007 517'702.6000 www.l bwl.coni January 6, 2004 Ms. Debbie Miner, City Clerk City of Lansing 124 W. Michigan Avenue Lansing, MI 48933 RE: Draft Minutes for November 25,2003 Board Meeting Dear Debbie: Enclosed is a revised set of the November 25th Board meeting for filing. Per your suggestion, the word "Preliminary" has been replaced with"Draft." Please replace the copy previously mailed to you, which contained a few typos, with this revised copy. If you have any questions, please contact me at 702-6033. Thanks for your attention to this request. Sincerely, Mary E. va Corporate Secretary Enclosure Page 97 DRAFT—Subject to Board Approval on 1129104 MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Tuesday,November 25, 2003 The Board of Connnissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Ronald C. Callen, Nancy W. Duncan, Tim Haggart, Ifield P. Joseph, Connie Marin, Diane R. Royal, Robin M. Smith and Nancy Wonch Absent: None The Secretary declared a quorum present. Chairperson Royal called the meeting to order at 5:30 p.m. APPROVAL OF MINUTES Motion by Commissioner Callen, seconded by Commissioner Haggart, to approve the minutes of the regular Board meeting held September 23, 2003. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF THE MEETING. Curt Gates, Business Manager of IBEW Local 352, presented an update on negotiations between Local 352 and the Board of Water and Light from the union point of view. He reported that a mediation date for the management and union negotiating teams has been set for December 8, 2003. Mr. Gates expressed concern with the health care premium sharing proposal for employees and retirees and noted that BWL has always taken care of retires' health care premiums and pension adjustments. He noted that IBEW Local 352 was chartered in 1903 and is now 100 years old. Mr. Gates stated that the BWL family spirit seems to be a thing of the past, and he emphasized the importance of focusing on people. Board Meeting Page 98 November 25,2003 Tracy Tolbert of Customer Service stated that she has been employed by BWL since 1980. She said that BWL employees are proud of their work and urged that the union contract reflect the rate of pay they deserve. She stated that in the past, management and the union worked together to maintain a family atmosphere and assured employees received a fair and equitable income. She stated that BWL employees work hard to keep the lights on and to promptly restore power and water services during outages. She noted that Customer Service employees are usually the first point of contact when customers call; consequently, they must be knowledgeable about many aspects of BWL business and operations. She asked that people be the focus during contract negotiations to assure a fair and equitable outcome. She noted that the May 2003 issue of the BOARD DIGEST reported that skill family range adjustments for non-bargaining employees would vary between 2% and 5%, and also that individual performance increases would range from 0%to 7.5 percent. Ms. Tolbert asked that this be kept in mind during negotiations. Michael Stocum of Customer Account Services stated that he has been a BWL employee for almost twenty years. He said that management indicated the proposal it offered to the union was a reflection of proposals put forth by Detroit Edison (DTE) and Consumers Power (CP) to their employees as these two utilities ventured forth and met the challenges and opportunities presented by deregulation. He noted that both DTE and CP gained by the experience, and now they are prepared to deal with the consequences. Mr. Stocum stated that BWL must create a future that looks outward not inward. He stated his belief that BWL missed a money-making opportunity because it was looking inward and focused at making a profit off a lower payroll by reducing the number of employees. Mr. Stocum stated that a positive future cannot be built with the proposal presented because it is a creature of the past and indicative of an attitude that may fatally cripple the BWL. He asked for wisdom, intellect and urged thoughtful consideration of the implications the proposal will have on the BWL. Gerald Houghtaling, Journeyman Lineworker, and a ten-year BWL employee indicated he has lived in the City of Lansing his entire life except for six years spent in the U. S. Navy. He stated that he considers himself the definition of"Hometown People-Hometown Power." He expressed disappointment with the progress of contract negotiations. He said BWL employees are the workers customers see in their neighborhoods and streets in all kinds of adverse weather. He noted that lineworkers are on the job repairing downed wires minutes after a storm. He stated that he agrees with General Manager Novick in that the BWL needs to concentrate on rates, reliability and service. He noted that according to a recent customer satisfaction survey, nine out of ten ratepayers consider the BWL the utility of choice. Mr. Houghtaling stated that he believes employee morale is low because management's proposal is inequitable in the pay and over-time category. He expressed concern over his welfare at the BWL and the welfare of his family. James Farrington, BWL Lineworker, stated that he is a life-long resident of the City of Lansing and a proud BWL employee. He noted that over the past three years, the BWL hired a consultant to conduct two employee satisfaction surveys of which the findings indicated low employee morale. Mr. Farrington said that he believes employees distrust upper management because management's actions do not promote the best interests of employees and customers. He stated that it was wrong for management's negotiating team to tell union employees that they are paid too much and that their benefit package should be slashed. He said that General Manager DRAFT—Subject to Board Approve!on 1129104 Page 99 Board Meeting g November 25,2003 Novick recently told employees that they are all one team serving the best interest of BWL customers. He noted that the percentage of the July 2003 pay increase to non-bargaining employees was higher than what is being offered to the bargaining employees. He expressed opposition to proposed premium sharing for health care. Tom Miller, BWL Retiree, expressed concern with the impact the proposed premium sharing for health care will have on his pension. He stated that premium sharing for health care will be a burden for BWL retirees who are on a fixed income. On behalf of the Board, Chairperson Royal thanked those who came to the meeting to express their views regarding contract negotiations. She noted that the Board has heard from both management and the union, and each team raised valid points. She said that collective bargaining is often a difficult process. She stated that in an ideal situation, each party comes to the table with their best wish list; both sides must give and take, and eventually reach a mutually acceptable contract agreement. Commissioner Royal noted that the management and union th negotiating teams have agreed to non-binding mediation scheduled to begin December 8 During mediation, both teams will have an opportunity to step back and reassess where they stand and hopefully move forward. She announced that this is an inappropriate time for the Commissioners to intervene and that the Board has faith in both the union and management and the overall negotiating process. She urged both teams to continue with contract talks through the bargaining process and said she is hopeful that these difficult issues will be resolved with a fair and equitable agreement. Linemen Rodeo Participants Honored. Vice President of Operations Bill Cook introduced the BWL employees who competed in the 20t" Linemen's Rodeo in Kansas City. The journeymen participants were James Chandler, James Farrington and Ron Davis. The apprentice participants were Torn Bayle and Russ Marion. Mr. Cook noted that there were approximately 240 teams and 240 apprentices participated in the rodeo. BWL teams and apprentices represented the BWL very well. COMMUNICATIONS There were no communications. COMMITTEE REPORTS COMMITTEE OF THE WHOLE REPORT (Resolution 2003-I1-1) Present: Commissioners Callen, Duncan, Joseph, Marin, and Wonch. Excused Absences: Commissioners Haggart, Royal, and Wonch. DRAFT—Subject to Board Approval on 1129104 Board Meeting Page 100 November 25,2003 The Committee of the Whole met on October 14, 2003 at 5:30 p.m. to discuss the following issues: 1. Board of Water and Light's (BWL) Communications Program 2. General Manager's Fiscal Year 2003-04 Objectives I. Communications Program Communications Director John Strickler presented an overview of the BWL's communications strategy, expenditures and benchmark results against other utilities. He reported that the program supports the BWL's vision of being the only utility customers will accept. The program's primary objective is to build and support the BWL's brand identity as Lansing's hometown utility. Secondary objectives are to help management achieve corporate goals, keep customers and employees informed about issues and developments that affect the utility and to promote new products and services. Four major program components and their spending levels were summarized. Community Sponsorships Adopt A River: An environmental stewardship program. Chili Cook-Off. To promote downtown Lansing and its riverfront area. Silver Bells in the City: Kicks off the holiday season and attracts between 60,000 and 80,000 visitors to downtown Lansing. Lansing Lugnuts: A corporate sponsorship with the Lansing Class A Minor League baseball team. External Communications The Connections newsletter is the BWL's primary source for communicating with customers. Internal Communications The Pipeline is a monthly tabloid newspaper and the main source for keeping BWL employees and retirees informed of BWL developments. Its primary goal is to help management explain and reach its strategic business objectives. Paid Advertising Advertising is a valuable tool for communicating with customers and an important factor in building and maintaining the BWL's brand identity as Lansing's hometown utility. Staff reported that a recommendation for a new three-year outside service contract to provide communications, marketing, advertising and public relations services would be brought to the Board at the November 25th meeting. The process used in selecting the top firm from the four agencies that submitted proposals was thoroughly reviewed. DRAFT—Subject to Board Approval on 1129104 Page 101 Board Meeting November 25,2003 Following discussion, the Commissioners concurred with the communication strategy and agreed to consider a resolution for awarding a contract for communications marketing, advertising and public relations services at the November Board meeting. II. General Manager's Fiscal Year 2003-04 Objectives The Commissioners reviewed a draft of the General Manager's objectives for the fiscal year and engaged in lengthy discussion. The Committee of the Whole recommends that the following objectives be set for the General Manager for fiscal year 2003-04: 1. Successfully negotiate a new Union Agreement that reflects a measurable move towards employee/customer balance. 2. Fill the position of Senior Vice President of Finance and Administration, implement a modified organization to benefit from the new position, and show improved financial reporting and controls. 3. Show a measurable and meaningful improvement in the BWL safety record. 4. Complete Diversity Training for all Directors and Managers. 5. Iinplement new Steam and Chilled Water Rates and begin separate reporting of the Chilled Water Utility financial and operating perfonnance. 6. Create at least a Draft Five-Year Strategic Plan. 7. Restructure one wholesale water contract. 8. Have each Senior Vice President and Director develop or update a written succession plan for their organizational area. 9. Complete development of the BWL Purchasing Procedures and ensure all purchases comply. 10. Continue the enforcement of the City's Ethics Ordinance through ongoing training to promote public confidence in the integrity of public servants. 11. Propose a formal Residential Energy Conservation Plan for Board consideration. 12. Evaluate the August 14, 2003 Blackout Critique and implement the recommendations for improvement where appropriate. There being no further business, the meeting was adjourned at 7:34 p.m. Respectfully submitted, Nancy Duncan, Chair Pro Tem. Committee of the Whole DRAFT—Subject to Board Approval on 1129104 Board Meeting Page 102 November 25,2003 Motion by Coinrnissioner Duncan, seconded by Commissioner Haggart, to approve the report as presented. Action: Carried unanimously. FINANCE COMMITTEE REPORT (Resolution 2003-11-2) Present: Colnlnittee Members Callen, Duncan, Joseph, and Smith. The Finance Committee met on October 28, 2003 at 5:30 p.m. to review and discuss the following issues: 1. External Auditor's Report of the Board of Water and Light (BWL) Enterprise Fund 2. Wyandotte's Request for Membership to the Michigan Public Power Agency (MPPA) 3. MPPA Power Pool Agreement Amendment 4. Coal and Rail Strategy 5. Nixon Farms Development 6. BWL Property Disposal Policy I. Annual Audit Review BWL Enterprise Fund External Auditors Larry Cooley, Frank Audia, Tricia Walhorn from Plante & Moran presented the results of the audit for fiscal year ended June 30, 2003 for the Board of Water and Light (BWL) Enterprise Fund. The auditors discussed their responsibility under generally accepted auditing standards. As a result of the change in the application of SFAS No. 71, the auditors reviewed extraordinary items not recorded in revenue and those recorded as expenditures. They gave a presentation that included a three-year comparison of operating revenue, operating expenses, and operating income or loss. A comparative analysis was also presented on the bond debt service requirements, kilowatt hours generated versus purchased, and significant fuel costs. The auditors reviewed their Management Letter comments and responded to questions. General Manager Novick noted that responses to the Management Letter are being prepared for review with the Commissioners at a later time. [Commissioner Joseph arrived at 6:04 p.m.] The Committee met'privately with the external auditors without staff present as has been customarily done over the past years. To meet filing requirements with the City, a copy of the DRAFT—Subject to Board Approval on 1129104 Page 103 Board Meeting November 25,2003 fiscal year 2003 audit report of the BWL Enterprise Fund has been filed with the Lansing City Clerk. Copies have also been provided to the Lansing City Council and the Mayor. The Finance Committee recommends the following resolution: Resolution Authorizing the Filing of the BWL Enterprise Fund Audit Report with the State Treasurer (Resolution 2003-11-3) RESOLVED, That the Corporate Secretary is hereby directed to file a copy of the fiscal year 2003 audit report of the Board of Water and Light Enterprise Fund and the report on auditing procedures with the State Treasurer as required by the Uniform Budgeting and Accounting Act (Public Act 2 of 1968, as amended). II. Wyandotte Request for MPPA Membership Vice President of Operations Bill Cook reported that the City of Wyandotte has requested membership in the Michigan Public Power Agency (MPPA). The process for becoming a new member requires amendments to the MPPA Articles of Incorporation to be adopted by the governing body of each member and published and filed in the same manner as the original Articles of Incorporation. The amendments were reviewed and the Finance Committee concurred with the membership process. A resolution approving amendments to the Fourth Amended Articles of Incorporation of Michigan Public Power Agency will be submitted to the Board for approval at the November 25th meeting. III. Amendment to MPPA Power Pool Agreement Vice President of Operations Bill Cook gave a brief presentation that included a historical overview of the original Michigan Public Power Agency(MPPA) Power Pool Agreement written back in 1989 and early 1990, which was prior to the actual startup of the Power Pool in mid- 1992. An amendment under development is being proposed primarily to update the Agreement to bring it into conformance with present Power Pool operations and billing procedures. The present operations reflect changes that were made since the inception of the Pool as a result of unforeseen circumstances to correct procedures that did not work as expected and to reflect changes in the electric industry. Changes in power costs, charges or revenues from present procedures should only improve the situation for the BWL. Once the MPPA Project Committee approves the amendment, it will be forwarded to each member city for individual technical and legal review and, ultimately Board approvals. Each member Board must approve the amendment. Staff anticipates bringing this forward for Board consideration when appropriate. IV. Coal and Rail Strategy Fuel Procurement Manager Ron Ishimoto reported on the BWL's coal and rail strategy. He noted that existing BWL contracts for rail cars, coal, and destination rail transportation are due to expire on December 31, 2003. He gave a historical overview of the Board's decision to convert the Eckert and Erickson Stations to burn Western coal to lower generation costs, meet environmental requirements for sulfur dioxide (S02), and meet future competition. Burning DRAFT—Subject to Board Approval on 1129104 Board Meeting Page 104 November 25,2003 Western coal safely and efficiently required extensive modifications to the BWL generating plants. He presented a comparative analysis that showed that leasing rail cars versus direct purchase offers significant economic and operational advantages. Leasing also ensures availability of cars for timely delivery of coal. The bid process for the rail cars, coal supply, and origin rail carriers was reviewed in detail. The benefits and disadvantages for having one coal source were discussed and a comparison of fuel cost was presented. Following the presentation and discussion, the Committee concurred with staff s proposal. Staff will submit resolutions for coal and rail contracts for Board consideration at the November 25t" meeting. IV. Nixon Farms Development Doug Wood, Manager of System L-itegrity and Customer Projects, reported on a potential electric service project in Delta Township called Nixon Farms, also known as Grand Ledge Investment Group, LLC (GLIC). The development is a mix of retail, apartments, manufactured housing, and single-family housing surrounding 150 acres at the corner of Saginaw Highway and Nixon Road. Mr. Wood reviewed the history of the project since 2002 involving previous negotiations with BWL, however the developer declined the initial offer. The developer has since contacted the BWL to discuss several alternatives, which has led to a conceptual agreement. The essence of the proposal is that the BWL will provide the electric infrastructure with a capped dollar amount to serve the development for which in return the developer will guarantee payback of the BWL investment within 15 years through an irrevocable bank letter of credit. Mr. Wood outlined the provisions of the current proposal and project economics. General Manager Novick noted that the irrevocable bank letter of credit from the developer is a critical component in making this agreement work. In addition to the provisions presented, the conceptual agreement is contingent upon the following parameters: ■ BWL must be able to build the infrastructure (secure governmental pen-nits and telephone poles) ■ Necessary easements must be obtained ■ BWL funding availability ■ BWL Board approval The Finance Committee is satisfied with the conceptual agreement. At such time that management is ready to move to the next level with the project, the Committee requests that additional analysis detailing the growth potential and projected revenue assumptions be provided for review. V. BWL Real Property Disposal Policy General Manager Novick reported that the BWL currently has no policy for the disposition of real property that is no longer needed for the continued operation of the BWL. The present procedure involves a negotiated sales agreement and approval by the Board of Commissioners and Lansing City Council. He discussed a recent request to purchase or lease a portion or all of the BWL's East Lansing substation property. A developer has expressed an interest in purchasing the entire property and contributing financially toward an early retirement of the substation. Mr. Novick noted that although historically the BWL has not actively solicited DRAFT—Subject to Board Approval on 1129104 Page 105 Board Meeting November 25,2003 buyers for its properties, this case raises a policy question that warrants further consideration. He questioned whether the Board may want to solicit proposals for the purchase of the substation property or if the Board may have other considerations. Following discussion, the Committee requested to have staff draft a policy on the disposition of real property addressing various issues and alternatives in addition to financial and political implications for Board consideration. There being no further business, the meeting was adjourned at 8:05 p.m. Respectfully submitted, Nancy Duncan, Chair Finance Committee Motion by Commissioner Duncan, seconded by Commissioner Marin, to approve the report as presented. Action: Carried unanimously. Motion by Commissioner Duncan, seconded by Commissioner Wonch, to approve Resolution 2003-11-3 regarding filing the BWL Enterprise Fund Audit Report with the State Treasurer. Action: Carried unanimously. HUMAN RESOURCES COMMITTEE REPORT (Resolution 2003-11-4) Present: Commissioners Haggart, Marin, Royal(by speakerphone), and Wonch. The Human Resources Committee met on November 18, 2003 at 12 noon to receive reports on the following items: 1. Update on Union Negotiations 2. Overview of Pension Plans and Policies 3. Pension Plan Financials Union Negotiations Acting Human Resources Director Mary Dwyer reported that the management and union negotiating teams have not reached agreement on a new contract. The Agreement between BWL and IBEW, Local 3.52, expired October 31, 2003. Ms. Dwyer reviewed the bargaining process and indicated that both sides have agreed to initiate non-binding mediation to encourage voluntary settlement by the parties. The tentative date for the mediation is set for either December 81h or 9`'. All information and records obtained in conducting mediation will be kept confidential. If a mediated resolution is not reached, either side can suggest an impartial fact finder to investigate and gather factual information and secure relevant argument with a view to a fair and expeditious process to determine a statement of disputed issues and make a private or DRAFT—Subject to Board Approval on 1129104 Board Meeting Page 106 November 25,2003 public recommendation to both sides. If resolution is still not reached within sixty days after fact finding, the Board has the right to implement a contract. The Committee and staff engaged in general discussion concerning bargaining goals. Pension Plans and Policies Chief Financial Officer Dana Tousley presented a brief overview of the current status and future direction of the Defined Benefit Pension Plan, the Defined Contribution Pension Plan and the Retirement Benefit Plan. Mr. Tousley called attention to the three primary documents for each plan that are related to the administration of the plan; namely, (1) the Plan document defines the benefits provided by the plan and eligibility, (2) the Trust Agreement establishes a separate trust fund to hold monies related to the plan, naives the trustees and others involved in the trust and defines the duties and responsibilities of each party, and (3) the Investment Policy establishes the funding policy for each trust and defines specific investment goals and criteria for investing the monies in the trust fund. The following key points from each of the FY 2003 pension reports were highlighted and discussed: ■ Financial Report ■ Funded Ratio • Contributions and Income ■ Benefits and Expenses ■ Plan Assets A ten-year statistical summary and selected graphical data for each of the plans was also reviewed. Moved by Commissioner Wonch, seconded by Commissioner Marin, the Committee unanimously approved to have the following resolution submitted to the Pension Fund Trustees: Resolution Authorizing the Filing of the BYYL Pension Reports with the State Treasurer (Resolution 2003-11-5) RESOLVED, That the Corporate Secretary receive and place on file the Defined Benefit, Defined Contribution, and Retiree Benefit Pension reports presented. The following reports were reviewed and discussed at the meeting: 1. Defined Benefit Plan—FY 2003 Management Discussion and Analysis 2. Defined Benefit Quarterly Financial Report, June 30, 2003 3. Defined Benefit Audit, June 30, 2003 4. Defined Benefit Performance Review, June 30, 2003 5. Defined Benefit Fund Actuarial Valuation, February 28, 2003 6. Defined Contribution Plan—FY 2003 Management Discussion and Analysis 7. Prudential Retirement Plan Summary as of June 30, 2003 DRAFT-subject to Board Approval on 1129104 Page 107 Board Meeting November 25,2003 8. Defined Contribution Audit, June 30, 2003 9. Retiree Benefit Plan—Fiscal Year 2003 Management Discussion and Analysis 10. Retiree Benefit Plan Quarterly Financial Report, June 30, 2003 11. Retiree Benefit Plan Audit, June 30, 2003 12. Retiree Benefit Plan Actuarial Valuation, February 28, 2003 RESOLVED FURTHER, That the Corporate Secretary is hereby directed to file copies of the FY 2003 audit reports of the Board of Water and Light Defined Benefit Pension Plan, Defined Contribution Pension Plan and Retiree Benefit Plan (VEBA), and the reports on auditing procedures with the State Treasurer as required by the Uniform Budgeting and Accounting Act (Public Act 2 of 1968, as amended). Defined Contribution Pension Plan Amendment to Delineate Minimum Distribution Requirements Mr. Tousley noted that the Board will need to approve an amendment to the Defined Contribution Pension Plan to comply with IRS Code Section 401(a)(9) setting forth new rules regarding required age 70-1/2 minimum distributions from qualified plans. He noted that such plans and annuities must be amended by the end of the plan year beginning in 2003 to comply with these rules. A letter prepared by Foster, Swift, Collins & Smith with background information and a proposed resolution was handed out for review. Motion by Commissioner Wonch, seconded by Commissioner Marin, the Committee unanimously approved to forward the letter from Foster, Swift, Collins & Smith concerning the Defined Contribution Pension Plan amendment to the General Manager for placement on the agenda for Board consideration at the regular meeting of November 25, 2003. Increases to Pensioners Under Review Chief Financial Officer Tousley submitted a memo with a chronology of periodic pension adjustments approved for Defined Benefit pensioners since 1964. He noted that the next review date to consider pension increases is January 2004 based on past discussions with the union. Following discussion, the Committee concurred that this item should be held in suspense until such time that management and the union reach a settlement on a new agreement at which time the total budget impact of the union contract will be known. This will assist in determining whether a pension adjustment might be appropriate. Employment Contracts for Board Staff Positions Discussed General Manager Novick asked the Committee if it would be appropriate to have employment contracts for Director of Metrics and Audits Kellie Willson and Corporate Secretary Mary Sova that would specify the terms between the Board and these Board-appointed positions. Mr. Novick indicated that Ms Willson and Ms. Sova have an implied contract that is not clearly defined to both the Board the Board staff positions. Following discussion, the Committee agreed that this issue is something for the Committee of the Whole to discuss. DRAFT—Subject to Board Approval on 1129104 Board Meeting Page 108 November 25,2003 There being no further business, the meeting was adjourned at 1:30 p.m. Respectfully submitted, Tim Haggart, Chair Human Resources Committee Motion by Commissioner Haggart, seconded by Commissioner Smith, to approve the report as presented. Action: Carried unanimously. Motion by Commissioner Haggart, seconded by Commissioner Smith, to approve Resolution 2003-11-5 regarding filing the BWL pension reports with the State Treasurer. Action: Carried unanimously. MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Office of the Corporate Secretary. Resolution 2003-11-6 COMMUNICATIONS MARKETING,ADVERTISING, AND PUBLIC RELATIONS SERVICES RESOLVED, That staff be authorized to negotiate a three-year contract with Pace & Partners for providing communications marketing, advertising, and public relations services. FURTHER RESOLVED, That staff is authorized to contract with Foresight Group for producing the BWL's 2003 amival report, with an option to renew the agreement for two additional years. Staff Remarks: A panel of five evaluators judged Pace &Partners as the most qualified of four local agencies that submitted proposals. Services provided under the agreement will include the following: ■ Recommend strategies to meet the BWL's goals related to brand image, customer and employee relations, and media relations; ■ Develop and execute advertising messages utilizing the most appropriate media for reaching specific target audiences; ■ Conduct media research and placement that puts BWL messages before appropriate audiences at the most efficient cost; ■ Provide print and web site layout and design services for customer newsletters, marketing material, consumer confidence reports and other publications; DRAFT—Subject to Board Approval on 1129104 Page 109 Board Meeting November 25,2003 ■ Recommend and develop collateral material for special events that support the BWL's position as Lansing's hometown utility; ■ Provide additional professional services as may be required to carry out the BWL's communications marketing programs. Pace & Partners has provided these services to the BWL for several years. Although it was evaluated as the most qualified among agencies that submitted proposals, staff agrees there are advantages to inviting additional agencies to provide services to the BWL. Staff, therefore, recommends that Foresight Group be engaged to produce this year's annual report with an option to provide this service for two additional years. Foresight Group was the second most qualified firm as judged by the evaluation panel. Motion by Commissioner Duncan, seconded by Conunissioner Wonch, to approve the resolution. Discussion: Conunissioner Smith expressed concern with moving the annual report to a firm other than Pace and Partners. She questioned the validity of having the annual report moved to another firm, as it was the one piece of the advertising budget that has shown to have great value based on the awards it received. Commissioners Callen and Smith asked for follow-up material requested from Communications Director John Strickler at the October 10, Committee of the Whole meeting. Commissioners Callen and Smith agreed to follow-up with Mr. Strickler regarding the information requested. Action: The motion passed by the following vote: Yeas: Commissioners Callen, Duncan, Haggart, Joseph, Marin, Royal, Wonch - 7 Nays: Commissioner Smith- 1 Resolution 2003-11-7 COAL SUPPLY AGREEMENT WITH ARCH COAL SALES RESOLVED, That the Board of Water and Light enter into a Coal Supply Agreement (Agreement) with Arch Coal Sales for the supply of Western Powder River Basin (PRB) coal subject to approval as to form by BWL's Legal Counsel. The Agreement particulars are as follows: 1. The term shall be for three years commencing January 1, 2004 and terminating December 31, 2006. 2. The annual quantity to be supplied is up to 2,100,000 tons. 3. The PRB coal will be supplied from Arch's Black Thunder mine with typical coal quality specifications as follows: DRAFT—Subject to Board Approval on 1129104 Board Meeting Page 110 November 25,2003 Size 2"x 0" Moisture 27.30% Ash 5.10% S02 0.751b/MMbtu Btu/lb 8,800 4. The price to be paid under this Agreement is outlined on the attached supplemental price sheet. 5. The price for each year of the Agreement shall be held firm. Motion by Commissioner Joseph, seconded by Commissioner Duncan, to approve the resolution. Action: Carried unanimously. Resohttiolz 2003-11-8 LEASE AGREEMENT WITH GENERAL ELECTRIC RAIL CAR SERVICES CORP. RESOLVED, That the Board of Water and Light (BWL) enter into a Lease Agreement (Agreement) with General Electric Railcar Services Corporation (GERSC) of Chicago, IL, a unit of General Electric Capital Corporation, for the supply of rail cars. The Agreement particulars are as follows: 1. The term shall be for three years commencing January 1, 2004 and terminating December 31, 2006. 2. GERSC shall provide five (5) train sets, totaling 585 aluminum fully automatic rapid discharge coal hopper rail cars with the assurance that they will maintain the integrity of the train sets at all times during the terns of the lease. 3. The lease rate shall be as outlined on the attached supplemental price sheet. (Full service —inclusive of all normal maintenance expenses). Motion by Commissioner Duncan, seconded by Commissioner Wonch, to approve the resolution. Discussion: Commissioner Callen clarified for those in the audience that the items listed in the Manager's Recommendations have all been discussed in great detail at committee meetings. General Manager Novick expressed his appreciation to the Commissioners for their preparation and thoroughness at the committee level. Action: Carried unanimously. DRAFT—Subject to Board Approval on 1129104 Page 111 Board Meeting November 25, 2003 Resolution 2003-11-9 WYANDOTTE'S REQUEST FOR MPPA MEMBERSHIP RESOLUTION APPROVING AMENDMENTS TO FOURTH AMENDED ARTICLES OF INCORPORATION OF MICHIGAN PUBLIC POWER AGENCY WHEREAS, this body has heretofore adopted resolutions approving the Third Amended Articles of Incorporation of the Michigan Public Power Agency(the "Agency"), and the Fourth Amended Articles of Incorporation of the Agency, which resolutions provide for the membership of this City in the Agency; and WHEREAS, the City of Wyandotte has adopted a resolution electing to become a member of the Agency; and WHEREAS, it is necessary to amend the Fourth Amended Articles of Incorporation of the Agency (the "Articles") in order to provide for the membership of the City of Wyandotte in the Agency. NOW, THEREFORE, BE IT RESOLVED as follows: 1. The City of Lansing Board of Water and Light hereby consents to the participation of the City of Wyandotte as a member in the Michigan Public Power Agency. 2. The City of Lansing Board of Water and Light hereby approves the following amendments to the Fourth Amended Articles of Incorporation of the Michigan Public Power Agency. (a) The title of the Articles is hereby amended to read as follows: "Fifth Amended Articles of Incorporation of Michigan Public Power Agency." (b) Section 2 under Article H of the Articles is amended to add the City of Wyandotte and delete certain members who have since withdrawn, and will now provide as follows: Section 2. The members of this Agency are the Cities of Bay City, Charlevoix, Grand Haven, Harbor Springs, Hart, Holland, Lansing, Lowell, Petoskey, Portland, Traverse City, Wyandotte and Zeeland, and the Village of Chelsea, all municipal corporations of the State of Michigan operating municipal electric utility systems as of the effective date of Act 448. (c) Section 1 under Article VI is amended to insert the following to the end of the Section: The News Herald, in and for the City of Wyandotte. DRAFT—Subject to Board Approval on 1129104 Board Meeting Page 112 November 25,2003 (d) The clarifying amendments contained in the Fifth Amended Articles of Incorporation of Michigan Public Power Agency submitted to the City of Lansing Board of Water and Light and attached to this resolution are hereby adopted. 3. This resolution shall be printed once in the Lansing State Journal, a newspaper generally circulating in the area of the City of Lansing. The amendments approved by this resolution shall become effective and in full force and effect immediately upon the publication of this resolution and the filing of this resolution in accordance with the applicable provisions of Act 448 of the Michigan Public Acts of 1976. Staff Remarks: The City of Wyandotte has requested membership in the Michigan Public Power Agency (MPPA). The process for becoming a new member requires amendments of the MPPA Articles of Incorporation to be adopted by the governing body of each member and published and filed in the same manner as the original Articles of Incorporation. The BWL's process to implement Wyandotte's membership was reviewed with the Finance Committee on October 28, 2003. For the BWL this process requires: ■ Adoption of the foregoing resolution by the BWL Board of Commissioners. ■ Certification of the Resolution and Articles. ■ Publication of the Resolution in the LANSING STATE JOURNAL. The BWL will be reimbursed for any publication costs by MPPA. ■ Filing of the resolution with the Ingham and Eaton county clerks. Motion made by Commissioner Duncan, seconded by Commissioner Marin, to approve the resolution. Action: Carried unanimously. Resolution 2003-11-10 AMENDMENT TO BWL EMPLOYEES' DEFINED CONTRIBUTION PENSION PLAN RESOLVED, That the Code Section 401(a)(9) Minimum Distribution Amendment to the BWL Employees' Defined Contribution Pension Plan, appended to these minutes(Exhibit A),is hereby adopted effective January 1, 2003; and FURTHER RESOLVED, That the Chair of the Board of Commissioners and the Corporate Secretary are hereby authorized to execute the Amendment and any other documents necessary to implement the foregoing resolution. Motion made by Commissioner Wonch, seconded by Commissioner Smith, to approve the resolution. DRAFT—Subject to Board Approva[on 1129104 Page 113 Board Meeting November 25, 2003 Staff Remarks: This is the third "technical" amendment to the DC Plan that does not change any participant's benefit, but keeps the plan documents compliant with IRS pension regulations. The amendment must be adopted before December 31, 2003. A letter from Steve Jun-nu of Foster, Swift, Collins & Smith was submitted explaining the changes to the plan. Chief Financial Officer Dana Tousley noted that the IRS has changed the regulations about minimum distribution from DC pension plans. The amendment simply complies with the law and IRS regulations stating the minimum distribution required. Plan participants and spouses can take whatever their benefit plan allows; the beneficiary, however, has to take the money out within a certain time period and in a certain way, and the regulations define the manner in which this can be done. Action: Carried unanimously. Resolution 2003-11-11 BOARD MEETING SCHEDULE FOR 2004 In accordance with the Board's Rules of Administrative Procedure, a schedule of dates, places and times for each regular meeting of the Board for the calendar year shall be adopted by the Board in November. RESOLVED, That regular meetings of the Board of Commissioners are hereby set for calendar year 2004 as follows, unless otherwise notified or as a result of date conflicts with rescheduled City Council meetings: 2004 Tuesday January 27 Tuesday March 23 Tuesday May 25 Tuesday July 27 Tuesday September 28 Tuesday November 23 Meetings will be held in the Board Room located in the Board of Water and Light Customer Service Center, 1232 Haco Drive, Lansing, at 5:30 p.m. RESOLVED FURTHER, That a notice of the meeting schedule be published in the Lansing State Journal the week of January 4, 2004. Discussion: Commissioner Joseph asked about moving the Board meetings to an evening other than Tuesdays during the summer months. Commissioner Smith questioned whether every other month is sufficient for holding Board meetings. Commissioner Wonch noted that due to her teaching schedule she has a conflict on Tuesdays for Board meetings held in January and March. Following discussion, it was agreed that regular meetings can be rescheduled and special meetings can be added if necessary. Motion by Commissioner Duncan, seconded by Commissioner Marin, to amend the 2004 meeting schedule by moving the January and March meetings to the fourth Thursday as follows: DRAFT—Subject to Board Approval on 1129104 Board Meeting Page 114 November 25,2003 2004 as Amended Ptesday-Thursday January 27 29 Piesd,5?5 Thursday March 2-3 25 Tuesday May 25 Tuesday July 27 Tuesday September 28 Tuesday November 23 Meetings will be held in the Board Room located in the Board of Water and Light Customer Service Center, 1232 Haco Drive, Lansing, at 5:30 p.m. Motion made by Commissioner Duncan, seconded by Commissioner Marin, to approve the regular meeting schedule as amended. Action: Carried unanimously. UNFINISHED BUSINESS The Board heard a presentation from IBEW local 352 BWL employees Curt Gates, Jim Dravenstatt-Moceri, Joe Davis, Luis Flores and Pat Martin advocating the use of BWL inspectors on combined sewer overflow (CSO) projects. They reported that currently the BWL shares the cost of inspectors with the City's Public Service Department when a CSO project also involves disruption of water mains. They presented a detailed case with exhibits to support their argument that the use of BWL inspectors would ensure better quality work and more focused customer service. Following lengthy discussion regarding the types of problems encountered and their impact to customers, the BWL and the City, General Manger Novick told the Commissioners that the CSO is a large project that poses challenges that go beyond the inspection process. He said that he plans to hire a degreed engineer dedicated totally to devising overall responses to reliability and service issues posed by the CSO project, including the issue of inspections. The union suggested forming a task force comprised of several Commissioners with union and management representation. Due to the priority of the CSO project and the inspection issue, the Board directed the General Manager to develop a strategy to address the issues raised for Board action no later than May 2004. The Commissioners requested a periodic progress report on efforts underway to resolve concerns discussed. Chairperson Royal thanked the IBEW Local 352 team for their presentation and noted that they raised some valid concerns that will be addressed in an expedient manner. DRAFT—Subject to Board Approval on 1129104 Page 115 Board Meeting November 25,2003 GENERAL MANAGER'S REMARKS Dana Tousley Retiring Effective January 2, 2004. General Manager Novick announced the retirement of Chief Financial Officer Dana Tousley effective January 2, 2004. He expressed his appreciation on his long service to the BWL. Dennis McFarland is New Senior Vice President of Finance and Administration. Dennis McFarland, the BWL's new Senior Vice President of Finance and Administration was introduced. Mr. McFarland will replace Chief Financial Officer Dana Tousley when he retires. He will assume responsibility for Financial Services, Information Technology, and Materials and Services Management. Mr. McFarland stated that it has been very enjoyable meeting employees at the BWL. He expressed appreciation for the welcome he has received and assistance provided by Dana Tousley, Bill Cook and General Manager Novick over the past few weeks. The Commissioners extended a welcome to Mr. McFarland. United Way Exceeds Goal. General Manager Novick thanked BWL employees for their participation in this year's United Way campaign. He acknowledged the outstanding work of BWL United Way co-chairs Calvin Jones and Jim Dravenstatt-Moceri and staff support provided by Mark Dykema and Jan Simpson. Mr. Novick invited Calvin Jones and Jim Dravenstatt- Moceri to report on campaign results. Calvin Jones announced that the BWL exceeded the campaign goal of $95,000.00, which was 5% more than last year. He commended BWL employees for their generosity. Employees and retirees contributed a total $96,624. The Capital Area United Way netted $6.3 million for this year's campaign. Jim Dravenstatt-Moceri stated that it was an honor to participate in the United Way team and noted that he and Calvin Jones would like to volunteer to chair the 2004 campaign. They hope to raise $100,000 next year. They thanked committee members Mark Dykema and Jan Simpson and the 20 volunteer department representatives who provided staff support. BWL 2002 Annual Report Takes Top Honors. Communications Director John Strickler reported that he attended the American Public Power Association (APPA) Customer Connections Workshop in Savannah, Georgia and accepted an award of excellence for the BWL's 2002 annual report. The annual report was the top award given in its size group. The BWL was one of ten public power utilities in five size categories honored. New Lobbyist Firm Selected. General Manager Novick reported that the Lansing firm of Muchmore, Harrington, Smalley and Associates has been selected to perform professional lobbying services for the BWL. The agreement is for one year and is subject to renewal on a year-by-year basis. The company was chosen from among six firms who submitted sealed proposals for the work. The firm will work with BWL Commissioners and staff to develop and implement the BWL's government relations objectives and will track state legislation that affects the utility. DRAFT—Subject to Board Approval on 1129104 Board Meeting Page 116 November 25,2003 Update on Triangular Property Project. General Manager Novick updated the Board on the status of the Triangle property proposal. The Triangle property project is located at the corner of Kalamazoo Street and Grand Avenue where a proposed state office complex was targeted. State officials put that project on hold in September 2002 after concerns about whether the State could afford the project at a time it faces severe budget problems. The property was originally proposed to be developed as residential. As a condition to selling the Triangle property, the City required the developer to build a residential development elsewhere in the downtown area. The BWL owns property north of Ottawa Station. The parcel is located at the southeast corner of Shiawassee Street and Grand Avenue and linked to the Triangle property, which was to be sold to the developer to construct residential units on that land. Mr. Novick stated that there are interlocking agreements between the BWL, the developer and the City as approved by the Board and City Council. Any changes ultimately made to the original agreement would be subject to Board and City Council approval. Mr. Novick noted that at this point, the BWL has received nothing in writing from the City requesting that the arrangement be renegotiated. He stated that if and when the BWL is presented with a new proposal from the City or developer, it will be brought to the Board for review and consideration. Year-to-Date Operating Results Reviewed. Senior Vice President of Finance and Administration Dennis McFarland gave a brief update on year-to-date operating results and budget comparison for August 2003. COMMISSIONERS' COMMENTS Commissioner Duncan stated that Silver Bells this year was a wonderful event. She thanked BWL employees for the role they played in this festive event. She also congratulated Chief Financial Officer Dana Tousley on his retirement and thanked him for his years of service at the BWL and wished him all the best in the future. Commissioner Smith thanked BWL employees for their presence at the meeting this evening and for taking time to convey their concerns with respect to collective bargaining. She expressed her appreciation to those present for their dedication and hard work in serving BWL customers. Commissioner Wonch also congratulated Chief Financial Officer Dana Tousley on his retirement. She thanked the union employees who came to the Board meeting to state their concerns over contract negotiations. Commissioner Marin also thanked the employees for coming to the Board meeting to share their concerns on union/management negotiations. She expressed appreciation to the union employees for their excellent presentation on CSO project issues. EXCUSED ABSENCE There were no absences. DRAFT—Subject to Board Approval on 1129104 Page 117 Board Meeting November 25,2003 PUBLIC COMMENTS Lansing City Council President Carol Wood, briefed the Board on the City's plan with regard to the Capitol Loop Reconstruction project that includes sewer separation, roadway enhancement and water main work on parts of Ottawa, Allegan, Pine and Walnut Streets and Capitol Avenue between Ottawa and Allegan. She reported that City Council has been talking with downtown merchants about the project in response to their concern with the impact this project will have on their businesses. Councilmember Wood announced that a revised plan for the Capitol Loop project is being considered by City Council. The revised plans include work starting at Capitol at Ottawa to Martin Luther King in 2004 and from Capitol at Allegan to Martin Luther King. When work is being done on Walnut Street, Pine Street will be open and vice-versa. She noted that there would be no work done on Michigan Avenue in the downtown area. She handed out a map depicting the site of the original Capitol Loop Reconstruction project and the revised construction plan. A second map was handed out depicting a conceptual plan for the various phases of the CSO Sewer Separation project between 2004 and 2020 in the downtown area. Councilmember Wood stated that she is hopeful there will be a BWL representative serving on a task force being formed by the Mayor to oversee these projects. She noted that to date the City has spent approximately$15 million with Tetra Tech; and indicated that if BWL inspectors were used for some of the CSO projects, there would have been significant savings for both the City and BWL. BWL retiree Tom Miller stated that after listening to discussion regarding the CSO project, it appears there are ways some projects could be accomplished more efficiently. He said that if work is done more efficiently, money could be better spent for the benefit of everybody. CLOSED SESSION Moved by Commissioner Duncan, seconded by Commissioner Joseph, that the Board convene in closed session to meet with outside counsel to discuss pending litigation(7:53 p.m.). Action: Adopted by roll call vote: Yeas: Commissioners Callen, Duncan, Haggart, Joseph, Smith, Marin, Royal and Wonch Nays: None Abstentions: None Absent: None OPEN SESSION The Board returned to open session at 8:30 p.m. No action was taken as the result of the closed session. DRAFT—Subject to Board Approval on 1129104 Board Meeting Page 118 November 25,2003 ADJOURNMENT On motion by Commissioner Wonch, seconded by Commissioner Marin, the meeting adjourned at 8:31 p.m. Is/Mary E. Sova, Secretary Filed with Lansing City Clerk DeceMber 29, 2003 DRAFT—Subject to Board Approval ou 1129104 EXHIBIT A CODE SECTION 401(a)(9)MINIMUM DISTRIBUTION AMENDMENT TO THE LANSING BOARD OF WATER AND LIGHT EMPLOYEES' DEFINED CONTRIBUTION PENSION PLAN The Lansing Board of Water and Light Employees' Defined Contribution Pension Plan is hereby amended by the addition of the provisions set forth below. The provisions shall control where applicable. The numbering of the following sections is for convenience only and should not be construed as replacing any particular section of the Plan. MINIMUM DISTRIBUTION REQUIREMENTS Section 1. General Rules. 1.1 Effective Date. The provisions of this Amendment will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year, 1.2. Coordination with Minimum Distribution Requirements Previously in Effect. If Section 1.1 above specifies an effective date of this Amendment that is earlier than calendar years beginning with the 2003 calendar year, required minimum distributions for 2002 under this Amendment will be determined as follows. If the total amount of 2002 required minimum distributions under the Plan made to the distributee prior to the effective date of this Amendment equals or exceeds the required minimum distributions determined under this Amendment, then no additional distributions will be required to be made for 2002 on or after such date to the distributee. If the total amount of 2002 required minimum distributions under the Plan made to the distributee prior to the effective date of this Amendment is less than the amount determined under this Amendment, then required minimum distributions for 2002 on and after such date will be determined so that the total amount of required minimum distributions for 2002 made to the distributee will be the amount determined under this Amendment. 1.3. Precedence. The requirements of this Amendment will take precedence over any inconsistent provisions of the Plan, 1.4. Requirements of Treasury Regulations Incorporated. All distributions required under this Amendment will be determined and made in accordance with the Treasury regulations under Code Section 401(a)(9). 1.5. TEFRA Section 242(b)(2)Elections. Notwithstanding the other provisions of this Amendment,distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act(TEFRA) and the provisions of the Plan that relate to Section 242(b)(2) of TEFRA. Section 2. Time and Manner of Distribution. 2.1. Required Beginning Date. The Participant's entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant's required beginning date. 2.2. Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participant's entire interest will be distributed, or begin to be distributed, no later than as follows: (a) If the Participant's surviving spouse is the Participant's sole designated beneficiary, then, except as provided Section 6 below,distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70 '/2, if later. (b) If the Participant's surviving spouse is not the Participant's sole designated beneficiary, then, except as provided in Section 6 below,distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died. (c) If there is no designated beneficiary as of September 30 of the year following the year of the Participant's death, the Participant's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (d) If the Participant's surviving spouse is the Participant's sole designated beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 2.2, other than Section 2.2(a), will apply as if the surviving spouse were the Participant. For purposes of this Section 2.2 and Section 4, unless Section 2.2(d) applies, distributions are considered to begin on the Participant's required beginning date. If Section 2.2(d)applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under Section 2.2(a). If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant's required beginning date(or to the Participant's surviving spouse before the date distributions are required to begin to the surviving spouse under Section 2.2(a)), the date distributions are considered to begin is the date distributions actually commence. 2.3. Forms of Distribution. Unless the Participant's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the 2 Exhibit A — Page 2 of 6 required beginning date, as of the first distribution calendar year distributions will be made in accordance with Sections 3 and 4 of this Amendment. If the Participant's interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Code Section 401(a)(9) and the Treasury regulations. Section 3. Required Minimum Distributions During Participant's Lifetime. 3.1. Amount of Required Minimum Distribution For Each Distribution Calendar Year. During the Participant's lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser of: (a) the quotient obtained by dividing the Participant's account balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations,using the Participant's age as of the Participant's birthday in the distribution calendar year; or (b) if the Participant's sole designated beneficiary for the distribution calendar year is the Participant's spouse, the quotient obtained by dividing the Participant's account balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the Participant's and spouse's attained ages as of the Participant's and spouse's birthdays in the distribution calendar year. 3.2. Lifetime Required Minimum Distributions Continue Through Year of Participant's Death. Required minimum distributions will be determined under this Section 3 beginning with the first distribution calendar year and up to and including the distribution calendar year that includes the Participant's date of death. Section 4. Required Minimum Distributions After Participant's Death. 4.1. Death On or After Date Distributions Begin. (a) Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's account balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participant's designated beneficiary, determined as follows: (1) The Participant's remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. 3 Exhibit A — Page 3 of 6 (2) If the Participant's surviving spouse is the Participant's sole designated beneficiary, the remaining life expectancy of the surviving spouse is calculated for each distribution calendar year after the year of the Participant's death using the surviving spouse's age as of the spouse's birthday in that year. For distribution calendar years after the year of the surviving spouse's death, the remaining life expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse's birthday in the calendar year of the spouse's death, reduced by one for each subsequent calendar year. (3) If the Participant's surviving spouse is not the Participant's sole designated beneficiary, the designated beneficiary's remaining life expectancy is calculated using the age of the beneficiary in the year following the year of the Participant's death, reduced by one for each subsequent year. (b) No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no designated beneficiary as of September 30 of the year after the year of the Participant's death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's account balance by the Participant's remaining life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. 4.2. Death Before Date Distributions Begin. (a) Participant Survived by Designated Beneficiary. Except as provided in Article 6 below, if the Participant dies before the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's account balance by the remaining life expectancy of the Participant's designated beneficiary, determined as provided in Section 4.1. (b) No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no designated beneficiary as of September 30 of the year following the year of the Participant's death, distribution of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (c) Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the Participant dies before the date distributions begin, the Participant's surviving spouse is the Participant's sole designated beneficiary, and the surviving spouse dies before distributions are required to begin to the 4 Exhibit A — Page 4 of 6 surviving spouse under Section 2.2(a), this Section 4.2 will apply as if the surviving spouse were the Participant. Section 5. Definitions. 5.1. Designated beneficiary. The individual who is designated as the beneficiary under Article VI of the Plan and is the designated beneficiary under Code Section 401(a)(9) and Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations. 5.2. Distribution calendar year. A calendar year for which a minimum distribution is required. For distributions beginning before the Participant's death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participant's required beginning date. For distributions beginning after the Participant's death, the first distribution calendar year is the calendar year in which distributions are required to begin under Section 2.2. The required minimum distribution for the Participant's first distribution calendar year will be made on or before the Participant's required beginning date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for the distribution calendar year in which the Participant's required beginning date occurs, will be made on or before December 31 of that distribution calendar year. 5.3. Life expectancy. Life expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations. 5.4. Participant's account balance. The account balance as of the last valuation date in the calendar year immediately preceding the distribution calendar year(valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year. 5.5 Required beginning date. The date specified in Section 6.4 of the Plan. Section 6. Special Elections. 6.1 Election to Apply 5-Year Rule to Distributions to Designated Beneficiaries. If the Participant dies before distributions begin and there is a designated beneficiary, distribution to the designated beneficiary is not required to begin by the date specified in Section 2.2 of this Amendment,but the Participant's entire interest will be distributed to the designated beneficiary by December 31 of the calendar year containing the fifth anniversary of the Participant's death. If the Participant's surviving spouse is the Participant's sole designated beneficiary and the surviving spouse dies 5 Exhibit A — Page 5 of 6 after the Participant but before distributions to either the Participant or the surviving spouse begin, this election will apply as if the surviving spouse were the Participant. This election with apply to all distributions. 6.2 Election to Allow Participants or Beneficiaries to Elect 5-Year Rule. Participants or beneficiaries may elect on an individual basis whether the 5-year rule or the life expectancy rule in Sections 2.2 and 4.2 of this Amendment applies to distributions after the death of a Participant who has a designated beneficiary. The election must be made no later than the earlier of September 30 of the calendar year in which distribution would be required to begin under Section 2.2 of this Amendment, or by September 30 of the calendar year which contains the fifth anniversary of the Participant's(or, if applicable, surviving spouse's)death. If neither the Participant nor beneficiary makes an election under this paragraph, distributions will be made in accordance with Sections 2.2 and 4.2 of this Amendment and, if applicable, the elections in Section 6.1 above. 6.3. Election to Allow Designated Beneficiary Receiving Distributions Under 5-Year Rule to Elect Life Expectancy Distributions. A designated beneficiary who is receiving payments under the 5-year rule may make a new election to receive payments under the life expectancy rule until December 31, 2003,provided that all amounts that would have been required to be distributed under the life expectancy rule for all distribution calendar years before 2004 are distributed by the earlier of December 31, 2003 or the end of the 5-year period. LANSING BOARD OF WATER AND LIGHT Dated: By: Its: Chairman, Board of Commissioners By: Its: Corporate Secretary S:k234\AM ENDS\]bwldcfp.40I a9amd.wpd Exhibit A — Page 6 of 6 6 Page 82 MINUTES OF THE BOARD OF COMMISSIONERS' SPECIAL MEETING LANSING BOARD OF WATER AND LIGHT r— �a i. :3 Tuesday, August 12, 2003 �, 071 r`3 �_.. IN J rn The Board of Commissioners met in a Special Meeting in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Ronald C. Callen, Nancy W. Duncan, Tim Haggart, Ifield P. Joseph, Connie Marin, Diane R. Royal, and Robin M. Smith. Absent: Commissioner Nancy Wonch. The Acting Secretary declared a quorum present. Chair Royal called the meeting to order at 5:30 p.m. APPROVAL OF MINUTES Motion made by Commissioner Haggart, seconded by Commissioner Duncan, to approve the minutes of the regular meeting held July 22, 2003. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON THE SUBJECT OF THE SPECIAL MEETING. No persons spoke. COMMUNICATIONS There were no communications. Special Meeting Page 83 August 12,2003 EXECUTIVE COMMITTEE Commissioners Present: Diane Royal, Ron Callen, and Nancy Duncan Staff Present: Interim General Manager John Elashkar;Director of Metrics and Audits Kellie Willson, and Corporate Secretary Mary Sova. The Executive Committee met on July 31, 2003 at 5:30 p.m. to review the final Employment Agreement for Sanford Novick - the Director and General Manager designee of the Board of Water and Light. The committee reviewed the details of the agreement and is satisfied with the negotiated terms, and thereby, submits the following resolution for Board approval: 2003 8 EMPLOYMENT AGREEMENT BETWEEN THE BOARD OF WATER AND LIGHT AND SANFORD B. NOVICK WHEREAS, the Board of Commissioners (Board) has the power and duty under Article 5, Chapter 2 of the City Charter of the City of Lansing to "appoint a Director who shall be responsible to the Board for carrying out the duties assigned by the Board and shall serve at its pleasure," and WHEREAS, the Board in its Resolution 2003-6-8 as amended by Resolution 2003-7-1 appointed the Board's Executive Committee to negotiate an employment agreement with Sanford B. Novick, and WHEREAS, the Executive Committee has successfully negotiated an Employment Agreement with Sanford B. Novick for a period of one year commencing August 18, 2003; and WHEREAS, Sanford B. Novick is willing to serve as Director and General Manager of the BWL for that period of time. RESOLVED, That the Employment Agreement between the Board of Commissioners of the Board of Water and Light and Sanford B. Novick, dated July 25, 2003, be approved. RESOLVED FURTHER, That the Chair of the Board be authorized to execute the agreement on behalf of the Board and file it with the Corporate Secretary. The Executive Committee meeting adjourned at 5:50 p.m. Respectfully submitted, Diane R. Royal, Chair Motion made by Commissioner Callen, seconded by Commissioner Mann, to receive the report as presented. Action: Carried unanimously. Page 84 Special Meeting August 12, 2003 Moved by Commissioner Callen, seconded by Commissioner Smith, to approve the Employment Agreement Between the BWL and Sanford B. Novick (Resolution 92003-8-1). Action: Carried unanimously. MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Office of the Corporate Secretary. .................................................... ................................................... .................................................... .......................1.......................... .................................................... AMEND RESOLUTION 96-11-8 PENSION PLAN FOR DATE CORRECTION WHEREAS, the Board of Commissioners is responsible, by Charter, for all conditions of employment, which includes the Board of Water and Light Pension Plans; and WHEREAS, the Board of Commissioners previously adopted Resolution 96-11-8, in which one portion of the resolution stated "That, subject to legal review, the revised Pension Plan is hereby approved retroactive to July 1, 1996 and is to expire at Midnight, June 30, 2002;" and WHEREAS, The Pension Plan did not expire June 30, 2002, and the language in the resolution concerning the expiration is inaccurate. RESOLVED, That the resolution be amended to delete the language concerning the expiration of the Pension Plan and re-state as follows: "That, subject to legal review, the revised Pension Plan is hereby approved, retroactive to July 1, 1996." Moved by Commissioner Duncan, seconded by Commissioner Marin, to Amend Resolution 96- 11-8 Pension Plan -Date Correction. Discussion: General Manager Elashkar reported that this resolution corrects a previous inaccuracy as to the expiration date of the current pension plan. Action: Carried unanimously. ...........................I....................... .................................................... CHANGE IN ACCOUNTING DEFERRALS RE: SFAS #71 RESOLVED, That Resolution 2002-4-8 be rescinded, and FURTHER RESOLVED, That the Board of Commissioners require management to have Board approval before any future deferrals, per SFAS 971, are recorded. FURTHER RESOLVED, That the Board approve SFAS 971 accounting treatment for the Central Utilities Center (CUC) project. FURTHER RESOLVED, That the Board approve SFAS #71 accounting treatment for Contribution in Aid of Construction for the Electric and Steam Utilities. Special Meeting Page 85 August 12,2003 Staff Remarks RE: Central Utilities Center: This accounting treatment would allow revenue received from General Motors (GM) for debt service payments to be "offset" by the amortization of a capital lease. The effect on BWL net income of the entire transaction would be the 5% asset owner margin fee the BWL receives in addition to the debt service. This fee would be recorded as miscellaneous non-operating income. This accounting treatment accurately reflects the economic reality of the Utility Services Agreement dated November 11, 1999 between GM, Trigen/Cinergy-USFOS of Lansing, LLC and the BWL. Staff Remarks RE: Contribution in Aid of Construction for the Electric and Steam Utilities: This would allow the current accounting practice of crediting customer contributions in aid of construction against the cost of the asset. The BWL is required to file Form EIA-412 reports annually with the U.S. Department of Energy. The use of the Uniform System of Accounts Prescribed for Public Utilities and Licensees for the reporting of data by municipalities is preferred, but not required. The Uniform System of Accounts specifically states that the electric plant is to be recorded at cost. "The electric plant accounts shall not include the cost or other value of electric plant contributed to the company. The accumulated gross costs of plant accumulated in the work order shall be recorded as a debit in the plant ledger of accounts along with the related amount of contributions concurrently be recorded as a credit. " The Water Utility will continue to record Contributions in Aid of Construction separately in accordance with the standard in the water industry, the National Association of Regulatory Utility Commissioners (NARUC) Uniform System of Accounts. Moved by Commissioner Duncan, seconded by Commissioner Smith, on the approval of the Resolution on Change in Accounting Deferrals-SFAS 971 (Resolution#2003-8-3). Action: Carried unanimously. ................................................... .................................................... RESTRUCTURING CHILLED WATER DEBT (REVENUE BOND RESOLUTION) RESOLVED, That Resolution 2003-7-11 be rescinded; and FURTHER RESOLVED, That the Eighth Supplemental Revenue Bond Resolution authorizing Water Supply, Steam and Electric Utility System Revenue Bonds of the City of Lansing, Michigan, attached, be approved. Staff Remarks: This incorporates final language required by the bond insurer. The bonds will refund a portion of the 1999A Series ($17.255M) and all of the 2001A Series ($12.430M) outstanding. This will restructure the $29.685M total associated with the chilled water system from the original 15-year term to a 27-year term. The bonds will be insured and carry an AAA rating from both Moody's (expect an underlying rating of Aa3) and Standard and Poor's (expect Special Meeting Page 86 August 12, 2003 an underlying rating of AA). The bonds would be dated September 1, 2003 and sold at competitive auction on August 25. These refunding bonds will reduce chilled water debt service approximately $0.9M per year. oximately $15.9M (present value $2.3M) due to The total debt service will increase appr extending the term of the bonds. Moved by Commissioner Duncan, seconded by Commissioner Marin, on the approval of the Resolution on Restructuring Chilled Water Debt (Resolution#2003-8-4). Action: Carried unanimously. MANAGER'S REMARKS Co orate Incentive Pro ram. General Manager John Elashkar paymentreported portd that the results based on FY 2003 Corporate Incentive Program yielded a 2.15/o yin and their wages as of June 30, 2003. The results were based on nsatisfaction al nci ssurveyresult sand on- financial measures which are: availability, reliability, customer employee safety. Granger-Daggett Construction Lawsuit. The BWL was brought Coulnsel Larry Wilhawsuit as a ite and defendant. The BWL is being asked to cleanup the landfill General Associate Attorney Amy Cavanaugh are the lead attorneys for this Cote case. as a resourcelt MroYeager to hire Attorney John Yeager from the law firm of Willingham has been involved with the Motor Wheel site for about ten years and has the knowledge and experience on this lawsuit. M-Tech—Lansin Communit Colle e LCC . Commissioner Haggart inquired if General C's. technology Manager Elashkar was aware of the M-Tech project, be dell n is p 270 art wells 300 feet deep into the department. Mr. Elashkar reported that M-Tech willg Saginaw Aquifer. The State Health Department, Department of Environmental Quality and the BWL Environmental Services are monitoring the impact this'projecct will Aquifer,have on the Sasgt caw Aquifer. M-Tech will not be drawing anything from the Saginaw qthe tubing encased in Bentonite Clay will be put into the well co o ected to a header o Clay es ulsed ce going from the header to a heat exchanger for either heating to seal the tube with no possibility of leakage. It has the ground tested in ewater because the tube is r places in the country and even if the tubes were to leak, it would not contaminate encased in Bentonite Clay. COMMISSIONERS' COMMENTS Commissioner Smith commended Larry Wilhite, Calvin Jones and other BWL employees who participated in the recent Capitol City African-American Cultural Parade and Picnic. Special Meeting August 12, 2003 Page 87 Commissioner Callen reported on his participation with the APPA Policy Committee and their activities. He also reported on a letter he received giving a glowing accolade on the BWL tree- trimming service. Commissioner Marin questioned the amount of money paid to bargaining unit employees for grievance against the BWL. General Manager Elashkar responded that the payout was not directly related to grievances, but due to a court ordered arbitration that occurred when the BWL attempted to change the manner in which"Share the Success" bonuses were paid to employees. EXCUSED ABSENCE On motion by Commissioner Joseph and seconded by Commissioner Duncan, that the absence of Commissioner Wonch be excused. Carried unanimously. CLOSED SESSION Moved by Commissioner Duncan, seconded by Commissioner Smith, that the Board convene in Closed Session to discuss the following item - strategy of negotiations of the collective bargaining agreement at 6:18 p.m. Action: Adopted by roll call vote: Yeas: Commissioners Callen, Duncan, Haggart, Joseph, Marin, Royal, and Smith. Nays: None Abstentions: None Absent: Commissioner Wonch. OPEN SESSION The Board returned to open session at 6:59 p.m. CLOSED SESSION Moved by Commissioner Callen, seconded by Commissioner Smith, that the Board convene in Closed Session to consult with legal counsel regarding strategy in connection with pending litigation at 7:05 p.m. Action: Adopted by roll call vote: Yeas: Commissioners Callen, Duncan, Haggart, Joseph, Marin, Royal, and Smith. Nays: None Abstentions: None Absent: Commissioner Wonch. Special Meeting August 12, 2003 Page 88 OPEN SESSION The Board returned to open session at 7:25 p.m. PUBLIC COMMENTS reciation to Interim expressed his app from his Business Manager of Loca13 52 of of , p Curt Gates, Mr. Elashkar for his efforts in leading the Gene ral Manager John Elashkar for coming out of retirement, sacrificing time away wife and home in Traverse City. H, commende BWL during the transition period and the search for a new General Manager. CLOSED SESSION Moved by Commissioner Mai-in, seconded bym Comissioner Smith, that he Board convene in t Closed Session to review a confidential written legal opinion at 7:30 p.m. Action: Adopted by roll call vote: al, and Smith. Yeas: Commissioners Calle n, Duncan, Haggart, Joseph, Marin,Roy Nays: None Abstentions: None Absent: Commissioner Wonch. OPEN SESSION The Board returned to open session at 9:19 p.m- APPROVAL OF CLOSED MEETING MINUTES minutes of missioner Smith, seconded by Commissioner Duncan to approve the Moved by Com 2003. the closed meeting held July 22, Action: Carried unanimously ADJOURNMENT len seconded by Commissioner Haggart, the meeting adjourned On motion by Commissioner Cal , at 9:22 p.m. /s/Mary E. Sova, Secretary Filed with Lansing City Clerk August 26, 2003 Page 71 FINAL—approved 8113103 MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, July 22, 2003 The Board of Commissioners met in regular session at 5:30 p.m. on July 22, 2003, in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Nancy W. Duncan, Tim Haggart, Connie Marin, Diane R. Royal, Robin M. Smith, and Nancy A. Wonch. Absent: Commissioners Ronald C. Callen, and Ifield P. Joseph. The Secretary declared a quorum present. Vice Chair Royal called the meeting to order at 5:30 p.m. APPROVAL OF MINUTES Motion made by Commissioner Haggart, seconded by Commissioner Smith, to approve the minutes of the special board meeting held July 8, 2003. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF THE MEETING. The following statement was made by BWL employee Calvin Jones. "Good evening honorable Commissioners, BWL Interim General Manager John Elashkar, BWL Secretary Mary Sova, BWL Internal Auditor Kellie Willson and BWL Employees. My name is Calvin Jones, I live at 5717 Pembrook Place, Lansing, Michigan. Page 72 Special Meeting July 22,2003 On November 12, 2002 my family received a call that our daughter Kimberly Jones had taken a turn for the worst and we should fly to Harborview Hospital immediately. We flew to Seattle, Washington and the details of what transpired are now in the hands of the legal, medical and spiritual experts. My objective today is to say thank you for your support, cards, letters and positive words shared during this tragic ordeal. Throughout this tragic ordeal we have remained faithful to the Lord and continued this journey, but not without the help of ordinary people doing some extraordinary things. For example, a fund-raising committee raised over$12,000.00 to bring our daughter Kimberly Jones home to mid-Michigan. Without the Lansing Board of Water & Light and the Employees' Club of the Lansing Board of Water &Light, we would not have been able to bring our daughter home and I would not be standing here today. Again, thank you and may God bless the continued great work you do for this community." COMMUNICATIONS A Freedom of Information Act (FOIA) request was hand-delivered by BWL employee Richard Taylor. Referred to management for response. REPORT OF THE NOMINATING COMMITTEE Commissioners Present: Tim Haggart, Connie Marin, and Diane Royal. Staff Present: Interim General Manager John Elashkar and Corporate Secretary Mary Sova. The Nominating Committee met on June 3, 2003 at 8:00 a.m. to review Commissioner survey responses for consideration of nominations for Board officers. Resolution 2003-7-8 APPROVE SLATE OF BOARD OFFICERS FOR FY 2003-04 The Nominating Committee recommends the following slate of officer candidates for Fiscal Year 2003-04: Chair: Diane R. Royal Vice Chair: Ronald C. Callen Chair Pro Tem: Nancy W. Duncan Special Meeting Page 73 July 22,2003 There being no further business, the meeting adjourned at 8:18 a.m. Respectfully submitted, NOMINATING COMMITTEE Tim Haggart, Chair Moved by Commissioner Smith, seconded by Commissioner Marin, that the report of the Nominating Committee be approved. Carved unanimously. Moved by Commissioner Wonch, seconded by Commissioner Marin, to approve the Slate of Board Officers for FY 2003-04 (Resolution #2003-7-8). Action: Carried unanimously. FINANCE COMMITTEE REPORT Committee Members Duncan, Royal, Smith and Wonch were present. Also present were: Commissioners Haggart, and Mann. The Finance Committee met on July 22, 2003 at 4:30 p.m. to discuss the following items: 1. Restructuring Chilled Water Debt 2. Indirect Cost Allocations 3. Utility Services Rules and Regulations 4. Economic Parameters for FY 2004 The committee thoroughly discussed the issues related to these topics and concurs with staff s recommendations. The General Manager is directed to present resolutions for the four items discussed under the General Manager's Recommendations. There being no further business, the meeting adjourned at 5:20 p.m. Respectfully submitted, Nancy Duncan, Chair Moved by Commissioner Duncan, seconded by Commissioner Haggart, that the report of the Finance Committee be approved. Carried unanimously. Page 74 Special Meeting July 22,2003 MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Office of the Corporate Secretary. Resolution 2003-7-9 EMPLOYEE BENEFITS OPTION PLAN WHEREAS, the Corporate Incentive Program (IP) Employee Benefit Options Committee has reviewed and researched numerous options for the Incentive Program bonus, and WHEREAS, the option package has administrative costs only, while providing employees the opportunity to purchase additional fringe benefits. RESOLVED, That the final recommendations submitted by the IP Employee Benefit Options Committee be approved: I. Options available through the "Whatif'Program 1. Purchase of Vacation * No change 2. Purchase of Free Choice * No change 3. ICMA"Deferred Compensation Plan" No change 4. FSA (Flexible Spending Account) *** No change 5. Charitable Contributions ** American Heart Association St. Vincent Home II. Options available through Human Resources 6. ICMA"Roth IRA" **** No change 7. MESP 529 College Savings Program No change 8. Long Term Disability Program (MetLife) Annual enrollment for "buy-up" option changes 9. UNUM Tenn Life Insurance Annual enrollment for changes 9. Cancer, Intensive Care, Voluntary (Previously called Direct Cash Supplement) Indemnity Annual enrollment for changes Accident Expense AFLAC Plans * Purchase of Vacation and Free Choice will be limited to ten (10) total days to include no more than two (2) Free Choice Days. ** To lower administrative costs, all checks less than$5.00 will be defaulted to the charities options. Opt out procedures will be available for employees declining the default. *** Maximum annual contribution for health care expenses is $7,500 and dependent care maximum is $5,000 (see IRS rules). **** Lump sum and/or continued payroll deduction. Moved by Commissioner Wonch, seconded by Commissioner Marin, to approve the Employee Benefits Option Plan (Resolution #2003-7-9). Discussion: Commissioner Duncan asked for clarification on the "Whatif 'Program, and how the incentive plan works. Interim General Manager Elashkar explained that the above named options are items employees may select with their Incentive Program bonus. Action: Carried unanimously. Special Meeting Page 75 July 22,2003 Resolution 2003-7-10 JOINT RESOLUTION OF THE LANSING CITY COUNCIL AND THE BOARD OF WATER AND LIGHT COMMISSIONERS APPROVING A MEMORANDUM OF UNDERSTANDING WHEREAS, the Lansing City Charter delegates to the Board of Commissioners (Board) of the Board of Water and Light (BWL) the responsibility for the administrative, executive, and policy- making authority over the operation of those City utility services assigned to it, and WHEREAS, the Lansing City Charter recognizes that the Board is responsible to the Mayor and to the City Council for the provisions of those City Utility services in a mamler consistent with best practices, and WHEREAS, the City Council and the Board desire to develop a more formal cooperative relationship between each other, and WHEREAS, the cooperation between the City Council and the Board would lead to better communication and more beneficial coordination between the City Council and the Board. NOW THEREFORE BE IT RESOLVED, That on or about January 3 1"of each year the President of the City Council and the Chair of the Board shall agree upon and publish a one-to- one pairing list between the Council members and the Board members. FURTHER RESOLVED, That the Board shall provide City Council, in advance of each of its Board meetings, with a Board packet and a monthly summary of other potential future Board actions (e.g. rate increases, tree trimming schedules) that are being contemplated which will allow each Council Member to interact with a Board counterpart concerning these actions. FURTHER RESOLVED, That the City Council and the Board shall hold three joint Committee of the Whole meetings per year. The meetings shall be scheduled by the President of the Council and the Chair of the Board to coincide with certain key events specified in the City Charter. The first meeting will be held in January after the election of Council Leadership and assignment of members to committees, the second meeting will be held in April after the Mayor's presentation of the City Budget to the City Council, and the third meeting will be held in September before the City Council's adoption of the annual budget policies and priorities. FURTHER RESOLVED, That the agenda of each of the aforementioned meetings shall, at a minimum, include items that require coordination between the Board of Water and Light and other City Departments, including the Combined Sewer Overflow (CSO) projects and the effects of these projects on both entities. FURTHER RESOLVED, That the Chair of the Board and the President of the Council shall, on a regular basis, communicate to each other issues that are beneficial for the Council members and the Board members to discuss with their respective counterparts in their one-to-one interaction. Page 76 Special Meeting July 22,2003 FURTHER RESOLVED, That the City Council and the Board shall reaffirm this Memorandum of Understanding annually during the month of December,by resolutions adopted by the City Council and by the Board. Moved by Commissioner Wonch, seconded by Commissioner Marin, to approve the Joint Resolution of the Lansing City Council and the Board of Water and Light Commissioners Approving a Memorandum of Understanding (Resolution #2003-7-10), subject to review and approval by City Council. Discussion: The City Council plans to discuss this resolution at their July 24, 2003 Committee of the Whole Meeting for Council action on July 28, 2003. (Note: The Council's Committee of the Whole Meeting scheduled for July 24, 2003 was cancelled on July 23, 2003.) Action: Carried unanimously. Resolution 2003-7-11 RESTRUCTURING CHILLED WATER DEBT (DRAFT#2—Subject to Final Review) RESOLVED, That the preliminary Eighth Supplemental Revenue Bond Resolution authorizing Water Supply, Steam and Electric Utility System Revenue Bonds of the City of Lansing, Michigan,per Attachment A, be approved. Staff Comments: The bond resolution and the Official Statement are subject to final review by our bond counsel. A special board meeting will be necessary in August, after insurance bids are received and insurance language is inserted in the bond resolution, to re-approve the bond resolution. The bonds will refund a portion of the 1999A Series and all of the 2001A Series outstanding. This will restructure the approximately$25M total associated with the chilled water system from the original 15-year term to a 27-year term. The bonds will be insured and carry an AAA rating from both Moody's (expect an underlying rating of Aa3) and Standard and Poor's (expect an underlying rating of AA). The bonds would be dated September 1, 2003 and sold at competitive auction on August 25 or September 3, 2003. These refunding bonds will reduce chilled water debt service approximately$1.OM per year. The total debt service will increase approximately$133M (present value $2.4M) due to extending the term of the bonds. Moved by Commissioner Duncan, seconded by Commissioner Wonch, to approve the preliminary resolution on Restructuring Chilled Water Debt (Resolution #2003-7-I1). A final bond resolution will come before the Board in August for approval. Action: Carried unanimously. Special Meeting Page 77 July 22,2003 Resolution 2003-7-12 UTILITY SERVICES RULES AND REGULATIONS FOR ELECTRIC,WATER, STEAM AND CHILLED WATER WHEREAS, in accordance with Board Policies 19-05 (Electric), 19-13 (Water) and 19-15 (Steam) of the Utility Services section, the utility Rules and Regulations shall be subject to review and modifications by the Commissioners. RESOLVED, That the Board of Commissioners hereby moves to amend the Rules and Regulations for the Electric (Attachment B), Water (Attachment C), and Steam, Services (Attachment D), as submitted and reviewed by the Finance Committee on July 22, 2003, with an effective date of August 1, 2003. RESOLVED FURTHER, That the new Board of Water and Light Policy 19-16 of the Utility Services section, Chilled Water Rules and Regulations, shall state that: "The chilled water rules and regulations shall govern the chilled water services and shall be subject to review and modification by the Commissioners". RESOLVED FURTHER, That the adoption of the Board of Water and Light Rules and Regulations for Chilled Water Services (Attachment E)become effective August 1, 2003. Moved by Commissioner Duncan, seconded by Commissioner Marin, to approve the resolution on Utility Services Rules and Regulations (Electric, Water, Steam and Chilled Water (Resolution #2003-7-12). Action: Carried unanimously. Resolution 2003-7-13 ECONOMIC PARAMETERS,FOR FY 2004 RESOLVED, That the Economic Parameters for Fiscal Year 2004 Studies (Attachment F) presented by staff at the Finance Committee meeting of July 22, 2003 be approved. Staff Comments: In FY 2000 staff identified the need for a standardized consistent set of economic parameters for use in project evaluations. R.W. Beck subsequently reviewed the BWL proposed methodology and parameters and agreed with staff that the BWL had established a "good approach and parameters need to be reviewed and updated annually." The attached is the FY2004 update. Moved by Commissioner Duncan, seconded by Commissioner Wonch, to approve the resolution on Economic Parameters for FY 2004 (Resolution #2003-7-13). Action: Carried unanimously Page 78 Special Meeting July 22,2003 Resolution 2003-7-14 INDIRECT COST ALLOCATIONS RESOLVED, That the Indirect Cost Methodology(Attachment G)presented by staff at the Finance Committee meeting of July 22, 2003 be approved. RESOLVED FURTHER, That the General Manager be directed to make required changes to the Fiscal Year 204 Budget. Moved by Commissioner Wonch, seconded by Commissioner Smith, to approve the resolution on Indirect Cost Allocations (Resolution #2003-7-14). Action: Carried unanimously. NEW BUSINESS None. MANAGER'S REMARKS Interim General Manager John Elashkar reported on the following topics: R. W. Beck to Analyze BWL Transmission System. A contract was awarded to R.W. Beck in the amount of$27,000 for the performance of an analysis of the BWL transmission system. The analysis will delineate between transmission and distribution assets using the FERC seven-factor test published in FERC's Order No. 88. The analysis will also establish BWL transmission system revenue requirements for the assets identified above. This analysis will be used in evaluating the BWL's position with respect to joining the Midwest Independent System Operator (MISO) as a transmission owner. Fly Ash Sale and Disposal Contract with Boral Material Technologies. There is a high demand for Western coal flyash that is being burned in power plants. Environmental Services Manager Nick Burwell recently negotiated a five-year contract with Boral Material Technologies, Inc. (BMTI) to market the flyash. BMTI will pay BWL the greater of$10/ton or 50% of the sale price minus the cost of transportation. By selling the flyash, the BWL will be reducing its disposal costs by about $300,000 per year. Ottawa Station Development. Lange Limited, LLC, an entity being formed by Dorian N. Lange of Michigan Equities, submitted a proposal for the development of the Ottawa Station. Mr. Lange has indicated they have an anchor tenant with space requirements of 70,000 square feet. Upon negotiating a lease with the tenant, they will negotiate the terms of the development agreement with the BWL. The proposal calls for a Standstill Provision until August 31, 2003 with a target closing date of December 31, 2003. Page 79 Special Meeting July 22,2003 Steam Cost of Service Progressing on Schedule. An interim report on the Steam Cost of Service (COS) study is progressing well. The consulting firm of FVB is scheduled to deliver the COS results for FY04 and FY07 by late September. Employment Agreement for New General Manager. Agreement in principle has been reached on all major aspects of an employment agreement with Sanford B. Novick to become the BWL's new General Manager. Once final agreement is reached,Mr. Novick is expected to begin his new duties in mid-August. COMMISSIONERS' COMMENTS Commissioner Wonch thanked BWL crews for their timely and efficient repair of an underground phase interruption at Cooley Law School during a recent storm. Commissioner Mann welcomed Sanford Novick to the BWL. She also acknowledged the earlier comments of BWL Employee Calvin Jones and offered her prayers for his family. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE AND LIGHT SUBJECT COME TO SPEAK TO THE BOARD ON ANY BOARD O No one spoke. EXCUSED ABSENCE On motion by Commissioner Duncan and seconded by Commissioner Haggart,that the absences of Commissioners Callen and Joseph be excused. Carried unanimously. DISCUSSION RE: CLOSED SESSION Commissioner Royal acknowledged receiving an employee complaint nt letter to each Interim General Manager John Elashkar. The employee's attoe y sent the complainta Commissioner. Mr. Elashkar requested to meet with the Board in closed session pursuant to the Open Meetings Act, Section 15.268(a), Closed Sessions, to respond to the complaint brought against him. Moved by Commissioner Wonch, seconded by Commissioner Marin, that the Board convene in closed session to discuss an employee complaint brought against Interim General Manager John Elashkar. (6:10 p.m.) Action: Adopted by roll call vote: Page 80 Special Meeting July 22, 2003 Yeas: Commissioners Duncan, Haggart, Marin, Royal, Smith and Wonch (6). Nays: None Abstentions: None Absent: Commissioners Callen and Joseph(2). Interim General Manager John Elashkar directed that all persons in the audience present for the regular Board meeting be excused clarifying they were not needed for the closed session. General Counsel Larry Wilhite stated that a closed session with Mr. Elashkar was not pennitted under the Open Meetings Act(OMA), pursuant to MCL 15.268 (e). Mr. Wilhite stated that the OMA indicates the Board may close a meeting to consult with its attorney regarding trial or settlement strategy in connection with specific pending litigation. Mr. Elashkar pointed out that the purpose for the closed session was for the Board to hear his response to complaints brought against him through an employee's attorney. Mr. Elashkar referred to MCL 15.268(a), which states that a public body may meet in closed session"to consider the dismissal, suspension, or disciplining of, or to hear complaints or charges brought against, or to consider a periodic personnel evaluation of, a public officer, employee, staff member, or individual agent, if the named person requests a closed hearing. A person requesting a closed hearing may rescind the request at any time, in which case the matter at issue shall be considered after the rescission only in open session." Upon discussion and clarification of the purposes for which to close a public meeting, Mr. Wilhite acknowledged that the meeting could be closed for the reason cited by Mr. Elashkar. All persons not required for the closed session were excused. General Counsel Larry Wilhite asked to stay for the closed meeting in his role as attorney for the Board of Water and Light's legal functions. He noted that without his attendance at the closed session, he would not be able to advise the Board on the complaint and the Board would lose its attorney-client privilege. Discussion was held regarding Mr. Wilhite's anticipated role and involvement in the closed meeting. Interim General Manager Elashkar reasserted that the BWL attorney's attendance was not required for the meeting since Mr. Elashkar only intended to respond to the complaint. Mr. Wilhite asked the Board to take a vote on the question as to whether he should remain for the closed session. Cominissioner Wonch pointed out that it is her understanding this complaint consists of a two-part issue, and Mr. Elashkar's part would be to respond to the complaint directed at him. Following discussion, Chairperson Royal called the question, stating that the purpose of the closed session was to hear a response to a complaint brought against Interim General Manager Elashkar. Mr. Elashkar has requested a closed session pursuant to the Open Meetings Act, Section 15.268(a). Moved by Commissioner Wonch and seconded by Commissioner Marin to excuse Mr. Wilhite from the closed meeting. Page 81 Special Meeting July 22,2003 Adopted by the following vote: Yeas: Commissioners Haggart,Marin,Royal,Wonch(4) Nays: None Abstentions: Commission Smith(2) Call Joseph(2) Absent: Commissioners C ere un d Smith stated they abstained because they e sion in this particular familiar with e Commissioners Duncan an the BWL attorney present for the closed s legal requirement of having losed session at 6:14 p.m. case. The Board met in c OPEN SESSION The Board returned to open session at 6:48 p.m. No action was taken. ADJOURNMENT ssioner Wonch, the ineeting On motion by Commissioner Duncan, seconded by Commi adjourned at 6:49 p.m. Is/Mary E. Sova, Secretary Clerk August 1, 2003 Filed Preliminary Minutes with Lansifigs 14 2003 Final Minutes filed with City Clerk Aug A - HMENT A Draft No. 2 Draft Date: 7/21/03 EIGHTH SUPPLEMENTAL REVENUE BOND RESOLUTION AUTHORIZING WATER SUPPLY, STEAM AND UTILITY SYSTEM REVENUE LA REFM DING BONDS OF THE CITY Section 1. Supplemental Resolution. This Eighth Supplementale 23 a)(i) of, the ue Bond ce with Section Bond Resolution is supplemental to, and is adopted in accordan Resolution. Section 2. Defi_ nip Unless the context indicates that anothvenueer meaning is Bond Resohit nshall intended, the following words and terms a d anysed in this otherEighth rds and terms which are defined in Act 94 or in have the following meanings, the Bond Resolution shall have the meanings as therein defined: (i) "Award of Sale of Series 2003A Bonds" means the award of sale of the Series 2003A Bonds, as authorized in Section 9 herein. ed"Bond Resolution" means the Amended And Restat des fromBtime tot meond ntion adopted by the Board on October 24, 1989, as supplemented and "Junior Lien Bonds" means the Series 1999B Bonds and any additional junior lien bonds issued pursuant to the Bond Resolution. (iv) "Series 1989A Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1989A issued pursuant to the Bond Resolution. v) "Series 1989B Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1989B issued pursuant to the Bond Resolution. vi) "Series 1994A Bonds" means the Water Supply .Resolution. Electric Utility System Revenue Bonds, Series 1994A issued pursuant to the Bond vii) Series 1994B Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1994B issued pursuant to the Bond Resolution. (viii) "Series 1999A Bonds" means the Water Supply, Bond Resole ion.d Electnc Utility System Revenue Bonds, Series 1999A issued pursuant t o theix "Series 1999B Bonds" means the Water Supply, Steam And Electric Utility system Subordinate Lien Revenue Bonds, Series 1999B (Federally Taxable) issued pursuant to the Bond Resolution. 1 (x) "Series 2001A Bonds" means the Water Supply, Steam and Electric Utility System Revenue Bonds, Series 2001A issued pursuant to the Bond Resolution. U System (xi) "Series 2002A Bonds" means the Water Supply, Steam and Electric tility Revenue Bonds, Series 2002A issued pursuant to the Bond Resolution. (xii) "Series 2002B Bonds" means the Water Supply, Steam and Electric Utility System Revenue Refimding Bonds, Series 2002B issued pursuant to the Bond Resolution. Util (xiii) "Series 2003A Bonds" means the Water Supply, Steam and Electric ity System Revenue Refunding Bonds, Series 2003A authorized by this Eighth Supplemental Bond Resolution. Section 3. Authorization of Series 2003A Bonds. To pay the cost of refundin a Portion of the outstanding Series 1999A Bonds and Series 2001A Bonds, including making' a deposit to a reserve fund and payment of legal, financial and other expenses of the issuance of the Series 2003A Bonds, the City, by and through the Board, shall borrow a sum not in excess of Forty Million Dollars ($40,000,000), as finally determined in the Award of Sale of Series 2003A Bonds, pursuant to the provisions of Act 94, Public Acts of Michigan, 1933, as amended. The Board previously determined it was necessary for the public health, safety and welfare of the City to undertake the projects financed with the Series 1999A Bonds and the Series 2001A Bonds. The refunding satisfies a public purpose and will enable the Board to reduce the annual debt service payments in order to keep certain chilled water rates competitive. The estimated remaining useful live of the projects financed with the Bonds to be Refunded (defined below) is at least 30 years. Section 4. Bond Details Parameters and Securit . shall be designated 'Water Supply, Steam And Electric UtilityTSystemeries Reven Oe Refi Bo s Bonds, Series 2003A," shall be of equal standing in priority of lien on the Net Revenues of the System with the Series 1989A Bonds, the Series 1989B Bonds, the Series 1994A Bonds, the Series 1994B Bonds, the Series 1999A Bonds, the Series 2001A Bonds, the Series 2002A Bonds, the Series 2002B Bonds and any other Additional Bonds, shall be senior in priority of lien to any Junior Lien Bonds issued hereunder, including, but not limited to the Series 1999B Bonds, and shall be payable solely out of Net Revenues and any other moneys pledged under the Bond Resolution and shall not be a general obligation of the City or the Board. Series 2003A Bonds shall be issued in denominations of $5,000 or any integral multiples of $5,000 not exceeding the amount of the Series 2003A Bonds maturing on the same date and shall be numbered in consecutive order of authentication from 1 upwards. The Series 2003A Bonds shall be issued as fully registered bonds without coupons and shall have an original issuance date of their dated date, or such other date as the Board shall approve in the Award of Sale of Series 2003A Bonds. The Series 2003A Bonds shall bear interest at a rate or rates to be determined in the Award of Sale of Series 2003A Bonds, not exceeding seven percent (7%) per annum, and shall mature no later than July 1, 2027. Interest shall be payable commencing on January 1, 2004 and on each July 1 and January 1 thereafter, or such other dates specified in the Award of Sale of 2 stered b check drawn on the Transfer Agent and off the City, byd to lthRB and of Series 2003A Bonds, y Transfer Agent. Interest on the Series 2003A Bonds rihich he Owner at the registered address, as T own on the registration boo e date shall be Water and Light, maintained by uted on the basis of a a able to each Registered Owner as of the 15 2 day Bonds n 1 be prior payable interest payment is due. Interest on the Series 2003A The principal of the Series 2003A Bonds 360-day year consisting of twelve 30-day Agent upon presentation and surrender shall be payable at the principal office of the Transfseries 2003A Bond registered in the name provided, however, if part of an Outstanding thereof; p art of a book-entry system is selected for redeinptr nri he of a securities depository company as p ate s depository company may retain the Seriesa OOan o nano f he reduction in the securities p the d notation on the Series 2003A Bond indicating from the partial redemption, however, in principal amount of the Series 2003A Bond resulting i al amount of the Series 2003A Bond, the ent of the remaining p P Agent as a condition of the case of the final paym the amount of each Series 2003A Bond shall be presented and surrendered to the Transfer g The aggregate principal amount of the bondse f any,ries 3A B shall be as finally determined in payment. maturity and the ale es Series 2003A Bonds.on of serial and term ti the Award of S obligation to fund the Bond Reserve Account letter trequired e qof credit, surety bond ein may be The City s delivery to the Transfer Agent of a le satisfied, in whole or in part, by the "Bond Reserve Account count or similar arrangement in form acceptable to the Bond Insurer Bond the irrevocable obligation of the issuer oftheAgentReserve rveamount up to Guaranty ) representing Agent upon request made by the Transfer Guaranty to pay to the Transfer Ag P Rating thereof for application to the Series 2003A $Orievidence� °from sany r Lien the stated amount the ether with writtenagency has 0 g Bonds issued under the Bond Resolution, and that the issuance of the Bond 'n the Series 2003A Bonds, in each case to he effect that such rating g Agency rating reviewed the proposed Bond Reserve AccountccouGuaranty is then in effect (in whole or Reserve Account Guaranty or, if a Bond Reserve Account Guaranty ro osed Bond Account Guaranty then in effect, will not by art with respect to the Bond Reserve Account, the substitution of the p n mp ) Reserve Account Guaranty for the Bond Reserve Bonds (and not Junior Lien reduction or withdrawal of its ratings on the See es 2003A Bonds. Such o itself, result in a red a Senior Li Reserve Account Guaranty shall be available to Pay arit therewith) in accordance with its an Additional Bonds issued on a p y an moneys representing Bonds), including Y terms. Upon acceptance of a Bond Reserve Account Guaranty, Bonds and proceeds of the Series 2003 A Bonds held in the Bond Reserve Account shall ies 2003A Bonds to the previously held Bond Reserve Account Guarantythe Bond Redemption Fund and used to purchase or redeem outstan standing shall remain in the Transfer Agent shall return any p there provided that after such transfer or return, equal to the Bond issuer thereof for cancellation; �— — is delivered the Bond Reserve Account moneys or Bond Reserve Arvice° Account anGuaranty hall be Requirement. If a B guarantys Reserve Account ReqAgencies, contemporaneously with the delivery of the Series 200n oBfirmation from the Rating acceptable to the Bond Insurer and no additional written zed in accordance with the ' ial rating letters on the Series 2003A Bonds, shall be required. In the even other than then mrtbe amounts held in the Bond Reserv.e Account nn the Bond eRe Reserve Account shall be utilized first Bond Resolution, cash or secun before drawing on a Bond Reserve Account Guaranty. 3 Upon the issuance of the Series 2003A Bonds, the Board shall Series 1999A Bonds and the Series 2001A Bonds to be refunded the Award of Sale of Series 2003A Bonds and the Board shall � designate the Transfer Agent to redeem such Bonds to be ("Bonds le ns Refunded") in give irrevocable instructions to the designated by the Board's Chief Financial Officer andtog e noticerorfst practicable call date manner and at the time required by the Bond Resolution. such redemption in the The General Manager and Chief Financial Officer are severally authorize an escrow deposit agreement substantially in the form on file with the Board an United States Treasuries -- d to enter into State and Local Government Series or United States open d to purchase securities necessary to carry out the refunding of the Bonds to be Refunded modify the maturies, interest rates and amounts of such securities or request early may be necessary to com 1 � and to amend or Cit B p Y with the Bond Resolution or to carry out the refund refunding. as Y Bank of Michigan/Illinois is named attorney-in-fact to enter into an sir National. necessary to purchase the foregoing securities in order to carry out such refunding- The Y subscriptions Series 2003A Bonds shall be subject to redemption as r of Series 2003A Bonds. provided in the Award of Sale Section 5. Series 2003A Bond Proceeds. From the proceeds of the Series 2003A Bonds, there shall be immediately amount equal to the accrued interes d prer 'am,o i f n in (a) the Redemption 1Fund e of the Series 2003A Bonds and the City, by its Board of Water and Light, shvedall r on delivery of the to the amount so deposited against the amount required to be deposited in the receive a credit equal for payment of the next maturing Redemption Fund b interest and (b) the Bond Reserve Account, the amount, if any, required by the Bond Resolution. The remainin used, together with other available funds, to pay the costs of refunding a ortio g proceeds of the Series 2003A Bonds shall be be Refunded and to pay the costs of issuing the Series 2003A Bonds. portion of the Bonds to Section 6. Book-Entr S stem Series 2003A Bond for each maturity, in the cries 2003A Bonds. Initially, one full -rea in the name of Cede & Co., as nominee of The Depository Trust Y bistered ggregate amount of such maturity, will be issued the book-entry transfer system of The Depositor Trust Company.Company, for participation in to discontinue participation in the book-entry transfer system of The D In e os font the City decides (or a successor securities depository), the City shall notify the Depository Trust Company Depository Trust Company, in writing, and thereafter the City shall exec Transfer Agent and The Agent shall authenticate and deliver Series 2003A Bonds requested b the bondholders and the Transfer successor securities depository. In the event The Depository Tru t Com and' or to a providing services as a securities depository for the Series 2003A Bonds and t designatehe Company discontinues a successor securities depository, the City shall execute and the Transfer City does not authenticate and deliver Series 2003A Bonds to the bondholders. Agent shall Section 7. Bond F_ The Series 2003A Bonds shall be in subs following form: substantially the 4 [SERIES 2003A BONDS] UNITED STATES OF AMERICA STATE OF MICHIGAN CITY OF LANSING PLY, STEAM AND ELECTRIC UTILITY SYSTEM WATER SUP ING BONDS, SERIES REVENUE REFUND Maturity Date of C= Interest Rate Date Original Issuance Per Anne REGISTERED OWNER. PRINCIPAL AMOUNT: Michigan(the "City"), for value received, promises to The CITY OF LANSING, State of Michib Date with interest thereon istered Owner on the Maturity aid, Lentil paid at pay the Principal Amount to the Regdate 1 and January 1 Date of Original Issue, or such later uar to which 04,1and onheach eJuly of from the D um, payable on Janua y , the Interest Rate Per Ann to a the Principal Amount is satisfied. principalo such thereafter until the obligation of the City pay stered at the principal office of National City b a notice�ma led tollthelregl this Bond is payable p hereinafter designate y Interest other transfer agent as the City may interest payment date (the "Transfer Agent"). s Prior to any of the month next owner not less than 60 day p kept by the Transfer is to the registered owner oft atlon books of the C ty day Hues of on this Bond -Payable preceding the payment date as shown on the rd ow eneration and mailed to the registered owner at the registered d address. The e revenues Agent by check or draft 1 and distribution for the supply the "System") after provision has been madestem for the facilities of the City steam and heat distribution of electricity, uses of operation, maintenance and administration of the Sy reasonable and necessary expenses pledged and a statutory lien thereon has been theatre ge the "Net Revenues") are irrevocably p of Net Revenues and when due; however, p ( payment of the principal of and interest on this Bond, secure the paym lien are on a panty with the pledge stem Revenue of Net Revenues and the statutory Lansing's Water Supply and Electric Utility SY lien in favor of the City stem Revenue Bonds, statutory its Water Supply and Electric Utility Sy Series 1994A, its Bonds, Series 1989A, stem Revenue Bonds,its Water Supply, 1 and Electric Utility Sy Series 1994B, Series 1989B, its Water Supply stem Revenue Bonds, 1 Steam and Water Supply and Electric Utility Sy Steam and Electric Utility System Revenue Bonds, Series 1999A, its Water Supply, 5 Electric Utility Revenue Bonds System Revenue Bonds, Series 2 02AOries rt001A, its Water Su Revenue Refunding Bonds, Series 02A, and Water Supply, Steam Steam and Electric Utility PP Y, Steam and Electric Utility System maybe issued by the City, any Additional Bonds (as defined below) which Utilit Y, and senior in priority of lien to its Water Supply, Y Revenue Bonds, Series 1999B issued p Taxable Series) and any additio al junior Stearn and bonds ursuant to the Resolution (defined below). the basis of a 360-day Interest on this Bond shall be computed on y year consisting of twelve 3 0-day months. This Bond is one of a series of bonds of like tenor, except as interest, date of maturity$ Y and prior redemption, a P to denomination, rate of issued pursuant to a Bond Resolution adopted the BoIng hard of of the City (the "Board" Principal sum of ofthe ) on October 24, 1989, as amended and Supplemented from at me to Light including by an Eighth Supplemental Revenue Bond Resolution adopted 2003 (collectively, the "Bond Resolution") to time, Constitution and statutes of the State of Michigan, including P ed by the Board on and under and in full compliance with the Michigan, 1933, as amended, for the purpose of refunding and 2001, the proceeds of which were used for f Pr specifically Act 94, Public Acts of prior bonds of the City issued in 1999 System, making a deposit to a bond reserve account, necessary, and extending the life of the the bonds, and paying the costs of issuing For a complete statement of the revenues from which and the Bond is payable, a statement of the conditions under c hi conditions under which this Bonds") of equal standing which additional bonds the bonds g may hereafter be issued, the rights and limitations on the owners of and the general covenants and ("Additional reference is made to the Bond Resolution. provisions pursuant to which this Bond is issued, Bonds of this series maturing prior to July 1 their respective dates of , are not subject to redemption prior to subject to redemption maturity. Bonds of this series maturing on and after July 1, ar July 1, prior to maturity, at the option of the Board, at any time on a in whole or in e selected b and per, in the amount selected by the Board, in order of maturities interest to the dateB f redemnd after withi a maturity by lot, at the redemption rice P P of par, plus accrued Notice of the call of Bonds for redemption shall be mailed to less than 30 days prior to the date fixed for redemption at the the registered owner not books of the City. Failure to receive such notice shall not affect for redemption. Bonds called for redemption address shown on the registration the validity of the proceedings redemption, provided funds are on hand with the Agentnot bear after the date fixed for redemption. g to redeem the bonds called for This Bond is a self-liquidating bond and is not a general obligation Board and does not constitute an indebtedness of the C' or th statutory or charter limitation, but is payable, both as i of the City or the Y e Board within any constitutional, Net Revenues of the System. to Principal and interest, solely from the 6 to fix and maintain at agree and covenants and agrSeTn shall be outstanding, The Board has covenanted and es of the provide for payment of the while any bonds payable from the Net h shall be sufficient sop om the Net all times the System a fr such rates for service furnished by d anyother bonds Payable ent of to provide for the paymem as rincipal of and interest on the bonds all become due and payable, ntenance of the Sy p expenses for mai Revenues as and when the same order, and to provide for such expenses of administration and one in good and and working and Resolution. are necessary to preserve the uired by the B other expenditures and funds for the System as are req 1 upon the registration books of the City yyakerneyydtly he This Bond is transferable Registered Owner hereof in person, or by his Agent by the Reg to the Transfer Agent Transfer with a written instrument of transfer satisfactory au authorized in writing, and authorized in writing, stered Owner or his or her attorney duly executed by the Reg' rinci al amount and oft e a new registered bond or bonds in the same age therefor as provided in the Bond thereuponprescribed. The City shall not be same maturity shall be issued to of the charges, if any,therein p Resolution and upon the payment exchange an Bond selected for redemption in whole or in required to register tr fe lof bonds being redeemed in part part, except the unredeemedportion and thing conditions s re q uired by law precedent to It is certified and recited that all acts,, seriesof bonds of which this is one have been done and of d the and in the ance and s s Bond n duce time, form as required by law. performed in reg for any purpose until the Certificate o atory This Bond is Bond has been execot valid or luged by the Transfer Agent. Authentication on this an, by and through its IN WITNESS WHEREOF, the City of Lansing, State of Michig signatures of seal of the City to be printed on this has caused this Bond to be executed with the facsimi e sign Board of Water and Light,orate Secretary and the corporate its Chairman and its Corp Bond. THRO BOARD O UGH THE CITY OF F WATER AND LIGHT OF THE CITY OF LANSING,MICHIGAN By; FACSIMILE Chairman By FACSIMILE Corporate Secretary (Seal) 7 Certificate of Authentication This Bond is one of the bonds described in the within-mentione d Bond Resolution. NATIONAL CITY BANK OF MICHIGAN/IL LINOIS, Transfer Agent By: Authorized Representative Date of Authentication: 8 ASSIGNMENT FO R VALUE RECEIVED, the undersigned sells, assigns and transfers unto (Please print or typewrite name and address of transferee) rights thereunder, and irrevocably constitutes and appoints the within bond and all rig attorney to transfer the within bond on the ses. books kept for registration thereof,with full power of substitution uz the premi Dated: Signature Guaranteed: NOTICE: The signature(s) to this assignment b must correspond with the name as it appears upon the face of the within bond in every particular, with-out alteration or enlargement or any change whatsoever. in a rities lre s must be guaranteed by an eligible guarantor institution The T ansfer Agent will not effectSignature(s)( ) guaranty ro am. T Transfer Association recognized signature p transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF TRANSFEREE. (Include information for all j oint owners if the bond is held by joint account) (Insert number for first named transferee if held by joint account) 9 Section 8. Notice of Sale. The Series 2003A Bonds shall be sold at a public sale pursuant to a Notice of Sale published in a publication to be selected by the Chief Financial Officer for the Board in substantially the following form: OFFICIAL NOTICE OF SALE �$ 1 CITY OF LANSING, BY AND THROUGH THE BOARD OF WATER AND LIGHT OF THE CITY OF LANSING WATER SUPPLY, STEAM AND ELECTRIC UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 2003A SEALED BIDS for the purchase of the above bonds will be received by the undersigned at the Corporate Secretary's office, Board of Water and Light of the City of Lansing, 1232 Haco Drive Lansing, Michigan, on the day of 2003, until Eastern Time, at which time and place the bids will be publ . o'clock, a.m., icly opened and read. IN THE ALTERNATIVE: Sealed bids will also be received on the same date and until the same time by an agent of the undersigned at the office of the Municipal Advisory Council of Michigan, 1445 First National Building, Detroit, Michigan 48226, where they will be publicly opened and read. Bids opened at Detroit, Michigan, will be read first. Bidders may choose either location to present bids and good faith checks, but may not present bids at both locations. BOND DETAILS: The bonds will be fully registered bonds without coupons and, when issued will be registered in the name of and held by Cede & Co., as nominee for The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository for the bonds. Purchases of beneficial interests in the bonds will be made in book-entry form, in denominations of$5,000 each or any integral multiple thereof. The bonds will have an original issuance date of 1, 2003, and will bear interest from the date of original issuance payable on January 1, 2004 and semiannually thereafter. The principal of and interest on the bonds will be paid by National City Bank of Michigan/Illinois, as Transfer Agent. So long as DTC or its nominee, Cede & Co., is the registered owner of the bonds, such payments will be made directly to DTC or such nominee. Disbursement of such payments to thee C responsibility of DTC, and disbursements of such pa DTC Participants is the responsibility of the DT Participants and Indirect Participants.yments to the beneficial owners is the 10 The bonds will mature on the first day of July as follows: ci al Prm p Principal Year Amount Year 2016 $ 2004 $ 2017 2005 2018 2006 2019 2007 2020 2008 2021 2009 2022 2010 2023 2011 2024 2012 2025 2013 2026 2014 2015 on and after July 1, are subject to redemption prior to PRIOR RE DEMPTION' Bonds maturing in such order as the Board shall determines maturity in whole or in part, on or after July 15 without premium, p in Integral multiples of $5,0005 at par, and by lot within a maturity, accrued interest to the redemption date. iven by mail to the registered holder, Not less than 30 days' notice of redemption shall be g redemption shall not bear interest registered address. Bonds or portions of bonds called for redemp Agent to redeem the at the provided funds are on hand with the Transfer after the redemption date, p same. rates AND BIDDING DETAILS: The bonds shaeXbTess dar in multiples ofrest at a rate r1/8 or INTEREST RATE to be fixed by the bids therefor, p not exceeding 7/o per annum, one bond shall be at one rate only and all bonds 1/20 of 1%, or both. The interest on any g points. No r must carry the same interest rate. The diff�enc eb entaee p e highest maturing in any one yea bonds or at a price less than [99.3%] of their par and lowest interest rate on the bonds shall not exceed one and [two ( p a proposal for the purchase of less than all of in non-descending value will be considered. The rates bid must be ding order. in the United able as to principal in lawful money Agent. TRANSFER AGENT: The bonds shall be pay an/Illinois, the Transfer States upon surrender thereof at National City Bank of Michig the in which the he registered owner of each bond as shown ri thermonthtion books at Interest shall be paid tot b preceding on and the close of business on the 15th day of the calendar month p check or draft drawn up payment is due. Interest shall be paid when due by interest paym registered address. The City of the Transfer Agent to the registered owner c the r Tr gent. mailed by 9 ate a successor Transfer A� Lansing may from time to time as required design 11 PURPOSE AND SECURITY: The bonds are issued under the provisions of Michigan, 1933, as amended, and a bond resolution adopted by the Boar of the City of Lansing (the "Board") on October 24 19 of Act 94, Public Acts time to time (together, the "Bond Resolution d of Water and Light 89, as supplemented and amended from of the City issued in 1999 and 2001, the proceedsoof which woes se used o ding certain prior bonds and extending the chilled water facilities and distribution system of th uirina Michigan, funding a bond reserve account, if necessary, y constructing g g e City of Lansing, Y, and Paying issuance costs for the bonds. The bonds, except to the extent payable from bond proceeds, arepayable revenues to the water supply and distribution and electric, heat and steam generatin bution systems (the "System") of the City of Lansing and solely from the net first lien on the net revenues of the System has been established b g and distri- g any additions thereto, and a statutory Board has covenanted and agreed to fix and maintain at all times by ileeany of such Bond Resolution. The be outstanding such rates for service fur nished by the System as shall be sufficient to Provide dholr Payment of the necessary expenses of operation,maintenance and administration of t of the principal and interest on all of said bonds when due, and to provide for such other expenditures and funds for the System as are required by the Bo he System, p rid Resolution. Payment of the principal and interest on the bonds from the net revenues o statutory lien on the Net Revenues of the System to securepayment f the System and the standing and on a parity with a ridinof the bonds are of equal Bonds, Series 1989B Bonds, Series 1994A Bonds, Series 1994B B principal of and interest on its Series 1989A the Series 2001A Bonds, the Series 2002A Bonds, the Series 200 n sBSeries 1999A Bonds, additional bonds issued under the Bond Resolution and is senior in Bonds and any other Series 1999B Bonds and any other junior lien bonds issued under the Bond Priority of lien to its ADDITIONAL BONDS: For the terms and condition Resolution. standing as to revenues of the System may be issued, reference is made todthe additional bonds of equal GOOD FAITH: A certified or cashier's check drawn Bond Resolution. company or a financial surety bond in the upon an incorporated bank or trust Chief Financial Officer of the Board of Water and Light$s required for each good faith on the part of the bidder, to be forfeited ' payable d the order toe of the . If a check is and the bidder fails to take up and pay for the bondss liquidated damages ifstah b as ad saaccepted bid. If a financial surety bond is used, it must be from an insurance companyt must accompany the such a bond in the State of Michigan and such bond must be submitted to the Chief Officer of the Board of Water and Light or its Financial Ad licensed Financial issue The financial surety bond must identify each bidder visor prior to the Opening of the b ds financial surety bond. If the bonds are awarded to a bidder utilizinga financial whose deposit is guaranteed by such that bidder (the "Purchaser") is required to submit its deposit to the Boardncial surety bond, then its Financial Consultant in the form of a cashier's check (or wire transfer of Water and Light or instructed by the Chief Financial Officer of the Board of Water and Light o Consultant) not later than noon, Eastern Time, on the nsfer such amount as such deposit is not received by that time, the he surety g r its Financial next business day following the award. If Board of Water and Light to satisfy the good faith deposit requirement. T he sit will be applied to the purchase price oft y bond may be drawn upon by the he bonds. In the event the Purchaser gfails faith honor i is 12 accepted bid, the good faith deposit will be retained by the Board of Water and Light. No rod faith deposit and checks of the unsucce f ith check ofl bidders be he interest shall be allowed on the g person or by mail. The g checkpurchase pnCe returned to each bidder's representative h p for the balance of the successful bidder will be immediately cashed and payment of the bonds shall be made at the closing. bankruptcy laws or other e rights and remedies of the bondholders may be affected by The, or hereafter enacted. creditors' rights legislation now existing bonds will be awarded to the bidder whose i produces e the annual AWARD OF BONDS: The b uted by True interest cost shall be comp a ents on the true interest cost to the City. y necessary to discount the debt service p ym interest rate (compounded semiannually 1, 2003 and to the bid price. Bonds from the payment dates thereof to on the approving opinion of Dickinson Wright the original of which will be furnished withoutt PLLC for LEGAL OPINION: Bids shall be conditioned up of Dickinson Wrig PLLC, attorneys of Lansing, Michigan, thereof. The fees aid from bond to the purchaser of the bonds at the delivery roving opinion are expected to be p ction with such conneto issue its approving opinion as to the validaeents y of the services rendered ito the extent necessary o I an financial information, proceeds. Except bonds, Dickinson Wright PLLC has made no inquiry as to y n financial documents, statements or materials that have been or may the authorization, issuance or marketing of the bonds, and or material contained in any leteness of any be furnished in connection with 1 will not express any opinion with respect to the accuracy or comp according y such financial information, statements or materia s• sel will include an opinion to the effect TAX MATTERS: The approving opinion of bond connexcluded from gross income for federal that under existing law, the interest on the bonds (a) u oses of the federal alternative b is not an item of tax preference for p will note that income tax purposes, ( ) orations; however, such opinion ng d adjusted current minimum tax imposed on individuals and core . . set forth in corporations must take into account interest on ehmb m taxte he p J all certain corpor computing such alternative comply with earnings for the purpose of comp that must be the "Code"), a above will be subject to the condofi1986,on aast amended ( Lansing continue to clause ( ) requirements of the Internal Revenue Code es. Failure to comply with certain t to the issuance of the bonds in order tha at interestthereon be (or c satisfied subsequent gross income be) excluded from gross income for federal income tax purp t of Lansing, through its Board of Water • ements could cause the interest on the bonds to be include in gr of such requirements With all such requirements. Bond counsel will express n retroactive to the date of is to ompl he bonds. The City ct to the bonds. and Light, has covenanted q with respect opinion regardingother federal tax consequence arising has n obligations" for not designated the bonds as "qualified tax-exempt The City of Lansing 3 of the Code. purposes of Section 265(b)( ) 13 The successful bidder will be required, as a condition of deliver "issue price" of the bonds within the me y of the bonds, to certify the acceptable certificate will be provided by bondcounsel.Section 1273 of the Code. The form of an In addition, the approving opinion of bond counsel will include under existing law, the bonds and the interest thereon are exempt fro Michigan except estate and inheritance taxes and taxes an opinion to the effect that p m all taxation in the State of or other disposition thereof. son gains realized from the sale payment yment CUSlP: CUSIP numbers will be imprinted on all bonds of this issue Improperly printed number will not constitute a basis for the ue at the issuers expense. An delivery. Purchaser to refuse to accept DELIVERY OF BONDS: The City of Lansing will furnish expense. Bonds will be delivered without expense w the Purchaser at the bonds ready for execution at its York, New York. The usual closingrients offices of DTC in New Pending affecting the issuance of the bonds,uw 11 beincli including at Certificate that no litigation is bonds. If the bonds are not tendered for deliver b on the 45th day following the day tendered sale, el the he time of the delivery of the Y y twelve o'clock noon, Eastern Standard Time, a business day, the successful bidder may on that day, or any time the first business day thereafter if the 45th day is not bonds, withdraw its proposal by serving notice of cancellation in writing, or until delivery of the which event the City of Lansing shall promptly return the good fait writing, on the undersigned, in bonds shall be made in Federal Reserve Funds. Accrued interest t h deposit. pa bonds shall be paid by the Purchaser at the time of delivery. Payment for the o the date of delivery of the OFFICIAL STATEMENT: obtained b A copy of the Official Statement relating to the bonds may be y contacting the Chief Financial Officer of the Board of Water and Light at t referred to below. The Official Statement is in a form deemed final b Y Paragraph (b)(1) of SEC Rule 15c2-12 (the "Rule"), but is subject g he address completion in a final Official Statement. Y the Issuer for purposes of to revision, amendment and After the award of the bonds, the Issuer will provide on a timely copies of a final Official Statement, as that term is defined in expense of the City (and such additional co ie basis a sufficient number of Paragraph (e)(3) of the Rule, at the requested b d and o the expense of, the sus essfulf bidder orOddersl Statement as reasonably bidder or bidders to comply with paragraph b 4 of the Rule a Securities Rulemakin he ral Board. ( )( ) ) enable the successful g Requests for such additional copies of he final Official Staes of the M te cipal shall be made to the Chief Financial Officer, Board of Water a Lansing, Michigan 48901 - telephone: 517-702-6790. nd Light, 1232 Haco Drivet FLN` CIAL CONSULTANT: Further information with respect t from Speer Financial, Inc., One North LaSalle Street, Suite 410o said bonds may be obtained Telephone: (312) 346-3700. 0, Chicago, Illinois 60602 - THE RIGHT IS RESERVED TO REJECT ANY OR ALL BIDS. 14 ENVELOPES containing the bids should be plainly marked "Proposal for Bonds." City of Lansing,by and through the Board of Water and Light of the City of Lansing By: Dana W. Tousley, Chief Financial Officer, Board of Water and Light of the City of Lansing [Statement of Insurance to be included with respect to the Insured Bonds only] 15 Section 9. Public Sale. The Series 2003A Bonds shall be sold at a public sale in accordance with the Notice of Sale described above. The Chief Financial Officer for the Board or the General Manager for the Board is authorized to fix the date, time and place of sale of the Series 2003A Bonds. The Chairperson of the Board or any Commissioner of the Board and the Chief Financial Officer for the Board or the General Manager for the Board are authorized on behalf of the Board to execute an Award of Sale of Series 2003A Bonds to: (a) approve the specific interest rates, dated dates, maturity dates and amounts, redemption dates, amounts and prices and the purchase price for the Series 2003A Bonds, (b) designate which of the Series 2003A Bonds will be serial bonds and term bonds, (c) determine the amounts to be deposited into the specific funds and accounts established tinder the Bond Resolution, and (d) award the Series 2003A Bonds to the bidder whose bid produces the lowest interest cost to the Board as provided in, and subject to, the official Notice of Sale and the parameters contained herein. Section 10. Tax Status. The City, by and through its Board, covenants to comply with all requirements of the Internal Revenue Code of 1986, as amended, necessary to assure that the interest on the Series 2003A Bonds will be and will remain excludable from gross income for federal income tax purposes. Section 11. Preliminary Official Statement. The preparation and distribution of a preliminary official statement in substantially the form presented at this meeting is approved, with such changes as the Chairperson or any Commissioner and the General Manager and Chief Financial Officer of the Board may, in consultation with the Staff Attorney and Bond Counsel, determine to be necessary or appropriate. Section 12. Other Staff Action. The Board ratifies and confirms actions taken and filings made by Staff necessary to effectuate the sale of the Series 2003A Bonds, including any filings with the Department of Treasury. The Chairperson, any Commissioner, the General Manager and the Chief Financial Officer of the Board are severally authorized to execute such certificates and other documents and to take such other actions or make such other filings as may be necessary or convenient to effectuate the proper sale, execution and delivery of the Series 2003A Bonds. Section 13. Conflicting Resolutions. All resolutions or orders, or parts thereof, in conflict with the provisions of this Eighth Supplemental Revenue Bond Resolution are repealed. Section 14. Severability and Paragraph Headings. If any section, paragraph, clause or provision of this Eighth Supplemental Revenue Bond Resolution shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any other provisions of this Eighth Supplemental Revenue Bond Resolution. The paragraph headings in this Eighth Supplemental Revenue Bond Resolution are furnished for convenience of reference only and shall not be considered to be a part of this Eighth Supplemental Revenue Bond Resolution. Section 15. Publication and Recordation. This Eighth Supplemental Revenue Bond Resolution shall be published in full in The Lansing State Journal, a newspaper of general circulation in the City of Lansing qualified under State law to publish legal notices, promptly 16 after its adoption, and shall be recorded in the minutes of the Board and such recording authenticated by the signatures of the Chairperson and the Corporate Secretary of the Board. Section 16. Effective Date. This Eighth Supplemental Revenue Bond Resolution shall be effective immediately upon its adoption. 17 Adopted and signed on the day of , 2003. /s/ /s/ Chairperson Mary E. Sova Corporate Secretary ADOPTED: IN FAVOR AGAINST ABSTAIN ABSENT 18 STATE OF MICHIGAN ) ss: COUNTY OF INGHAM ) I, the undersigned, the Corporate Secretary of the Board of Water and Light of the City of Lansing, certify that the foregoing is a true and complete copy of a resolution adopted by the Board of Water and Light of the City of Lansing at a meeting held on , 2003, the original of which is on file in my office. I filrther certify that notice of the meeting was given in accordance with the provisions of the Open Meetings Act. Mary E. Sova, Corporate Secretary Board of Water and Light of the City of Lansing LANSING 32063-49 324002v02 19 ATTACHMENT B WATER Lansing Board of Water and Light Rules and Regulations For Electric Service ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 WATE® Lansing Board of Table of Contents Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions....................................................................................................................................................................4 Application for Service............................................................... 6 ................................................................... ServiceConditions.................................................................................... 7 ............. Character of Service.................................................................. Descriptionof Service ........................................................................................ 7 ............................................. AvailableVoltage.................................................................................................................................................7 Dual Voltage Transformers............................................................................ 8 Agreements........................................................................................................................................................... 8 MaterialAvailability........................................................................................ .......................................... 8 ........... Useof Service................................................................................................................. .. 9 . ............................. General...................................................................................................................................................................... 9 Accessand Damages .................................................................................................... . 9 . ........................ CustomerEquipment............................................................................................................... . PowerQuality...........................................................................................................................................................9 Power Factor.............................. Tampering............................................................................................................................................................... 10 Metering........................................................................ General.................................................................................................................................................................... 11 Installation/Ownership............................................................................................................................................ I 1 EquipmentLocation................................................................................................................................................ 11 MultipleOccupancy Buildings............................................................................................................................... 12 Applicationof Rates ................................................................................................................................................. 13 General.................................................................................................................................................................... 13 Resale...................................................................................................................................................................... 13 Choiceof Rates.......................................................... .......................... 13 ................................................................... ReactivePower....................................................................................................................................................... 13 Space Conditioning-Electric Water Heating Service............................................................................................ 14 Mobile Homes in Courts -Individually Served...................................................................................................... 14 Apartment Buildings and Multiple Dwelling Structures......................................................................................... 14 Cogeneration and Small Power Production Facility............................................................................................... 14 BillingDemand.......................................................................................................... 15 ............ MinimumCharges.................................................................................................................................................. 15 Property Owner-Rental Agent Agreement for'Leave On'Service....................................................................... 15 Responsibility for Payment of Bills............................... ............................... 16 ........................................................... General.................................................................................................................................................................... 16 Estimated Consumption.................................................................................. BillingErrors.......................................................................................................................................................... 16 AccountSecurity Deposits...................................................................................................................................... 16 Dispute and Hearing Procedure................................................................... .................... 18 ....................................... Disputes.................................................................................................................................................................. 18 Hearings........................................ .................... 18 Sale and Lease of Service Facilities................................................................................................ ..20 ....................... Distribution System Extensions.................................................................. General....................................................................................................................................................................21 Request for Distribution System Extension........................................................................................................21 Ownership...........................................................................................................................................................21 Nonrefundable Contribution for Underground Extensions.................................................................................21 Deposit................................................................................................................................................................21 EconomicDevelopment Offsets.........................................................................................................................23 Easements and Tree Trimming/Removal Permits...............................................................................................23 ADOPTED: 7/22/03 EFFECTIVE: 8/l/03 r a n WATER Lansing Board of Table of Contents go - Water and Light Non-Standard Equipment...................................................................................................................................23 Non-Standard Construction................ "'............................................................. .....I...23 OtherFacilities.............................................................................................................................. Customer Provided Facilities..............................................................................................................................24 MobileHome Courts .................................................................................................................................. ......24 .........24 StreetLighting ........................................................................................................... Outdoor Protective Lighting.............................................................................................•.. Subdivisions........................................................................................................................................................24 Available Voltage..................................................................................... ....................... . Construction Date of Distribution Extension.............................................. .........25 Trenchingand Duct........................ .. . . . ..............................................................................................................25 Conversion of Existing Overhead Distribution Systems and Associated Services.................................................2 Electric Facility Relocations and Removals......................................................... Distribution System Extensions for Second Source................................................................................................27 Distribution System Extensions to Loads of Questionable Performance.............................................. ..............................................................29 Services....................................................................................................... .........29 General........................................................................................................................................................... TemporaryServices................................................................................................................................................29 Residential,Commercial and Industrial Overhead Services................................................................................... 30 Residential,Underground Services from Underground Distribution Systems....................................................... 30 Residential Underground Services from Overhead Distribution Systems........................................... 31 Commercial and Industrial Underground Services.......................................... ...................................................... Conversion of Existing Overhead Electric Service.................................................................................. Electric Service Relocations and Removals............................................................................................................ 32 SecondService............................................................................................... ........................................................ . ........... 34 Motors................................................................................................... ....................................................... . Useof Board Equipment.................................................................................................................... General.................................................................................................................................... AuthorizedAttachments.........................................................................................................................................Unauthorized Use and Removal............................................................................................................................. 35 3 ParallelPower Sources............................................................................................................................................. General............................................................................................................................... Approvals........................................................................................... Controland Protection................................................................................................................................ Operation................................. ............ 37 Termination....................................................................................................................................................... Contract .................................... 3 7 .............................................................................................................................. Scheduleof Fees &Charges..................................................................................................................................... 38 ADOPTED: 7/22/03 Page 3 of 39 FFFRC TTVR- 8/1/03 smWATER Lansing Board of Definitions Water and Light Electric Rule and Regulation 1 DEFINITIONS OF TERMS AND THEIR ABBREVIATIONS AMPERE— Unit of electrical current. ANNUAL REVENUE—Income received from a Customer or a group of Customers for a twelve(12)month period, less sales tax. BOARD— When used in these Rules and Regulations, Board is an abbreviation meaning the Board of Water and Light. CUSTOMER— A purchaser of electrical service supplied by the Board. DEMAND— The load at the terminals of an installation or system, averaged over a specified interval of time. Demand is expressed in kilowatts,kilovoltamperes(kVA) or other suitable units. DISTRIBUTION LINE — That portion of the Board's system which delivers Electric Power from transformation points on the transmission or bulk power system to the Customer. DUAL WOUND TRANSFORMER—A transformer whose primary windings are so designed and interconnected so that the transformer has the full rating capability to operate on either of two different Primary Voltages. DWELLING UNIT — A Dwelling Unit shall be considered as a single room, suite or groups of rooms or suites which have individual cooking and kitchen sink facilities designed for or used exclusively for residential purposes. ELECTRIC POWER—A term used in the electric power industry to mean inclusively power and Energy, expressed in kilowatts and kilowatt-hours. ENERGY— That which does or is capable of doing work. It is measured in terns of the work it is capable of doing; electric energy is usually measured in kilowatthours, FACILITIES— A general term which includes devices, associated structures and the like, used as a part of or in connection with an electric installation. HERTZ—(Hz)— Cycle per second. HIGH-RISE HOUSING STRUCTURE — A building in excess of three stories in height comprised primarily of several individually metered residential Rate Customers. HORSEPOWER(hp)—Unit of mechanical power equivalent to 746 watts of electrical power. KILO(k)— Prefix meaning one thousand. KILOVOLTAMPERE (kVA)—Unit of apparent electrical power which at 100%Power Factor is equivalent to one kilowatt. KILOWATT (kW) — Unit of electrical power representing rate of usage of Energy, equivalent to about 1'/3 Horsepower. KILOWATT-HOUR(kWh)—Unit of electrical Energy equivalent to the use of one kilowatt for one hour. LOAD— The amount of power or kilovoltamperes delivered at a given point. MAIN LINE TRENCH—A Trench in which Primary Voltage Distribution Lines are installed. ADOPTED: 7/22/03 EFFECTIVE: 8/l/03 D o n fin WATER Lansing Board of Definitions Im Water and Light Electric Rule and Regulation 1 MOBILE HOME COURT — A mobile home court is defined as a parcel or tract of land upon which three (3) or more mobile homes are located and occupied on a continuous non-recreational basis. The mobile home court shall be of a permanent nature with improved streets and with individual water and sewer connection to each lot. POWER FACTOR(P.F.)—Ratio of kilowatt power to kilovoltampere apparent power, expressed in%. PREMISES— A building and its grounds. PRIMARY VOLTAGE—Nominal voltage of 601 Volts to 15,000 Volts. RATE— The unit prices as established by the Board's rate-making body and the quantities to which they apply as specified in the Rate Schedule. RATE SCHEDULE—A filed statement of the electric Rate and the terms and conditions governing its application as established by the Board's rate-making body. RESIDENCE (also residential) — Shall include one family, two family and multiple family structures containing three or more individual Dwelling Units,but not including High-Rise Housing Structures. RISER POLE— Pole where the transition takes place between underground and overhead Facilities. May be primary or secondary. SECOND SERVICE—Additional service of substantially the same characteristics usually supplied from the same source. SECOND SOURCE—Additional source of substantially the same characteristics supplied from a separate electric Distribution Line. SECONDARY VOLTAGE—Nominal voltage of 600 Volts or less. SERVICE ENTRANCE CONDUCTORS — The Customer-owned conductors between the Customer's main disconnecting device and the termination of the Board's service conductors. SERVICE LOCATION—The point at which the Board has agreed to provide electric service. TRANSMISSION SYSTEM — That portion of the Board's system which delivers Electric Power with a nominal voltage of 138,000 Volts. TRENCH— A cut in the ground in which cables,pipes,etc. are installed. VOLT— Unit of electrical force. ADOPTED: 7/22/03 Page 5 of 39 FFFF('.TTVF.• 9/1/03 WATE® Lansing Board of Application for Service Water and Light Electric Rule and Regulation 2 Application for Service 1. General Copies of the Board's Rate Schedules for electric service are open to public inspection at the Board's offices and are available on the Board's Internet Web site www.lbwl.com or upon request. Application for original, modified or added service shall be made at the office of the Board of Water and Light at 1232 Haco Drive, Lansing. Any Customer receiving or agreeing to receive electric service from Board Facilities shall be deemed a Customer of the Board subject to its Rates and these Rules and Regulations and responsible for the service used whether such service is provided under a signed agreement or not. Electric service will not be supplied to new or remodeled buildings until such installations have been inspected and approved by the appropriate inspection authority and are in accordance with these Rules and Regulations. Before purchasing equipment or installing wiring, the Customer should contact the System Integrity & Customer Projects Department of the Board to determine the characteristics of the electric service available at the Premises, since all voltages may not be available. The System Integrity& Customer Projects Department will inform the Customer of the Board's requirements, which must be fulfilled by the Customer, in order to receive electric service. The Board may discontinue electric service to any Customer for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. The Customer must pay a reconnection fee as stated in Rule 15 to cover the costs of restoring electric service that has been discontinued for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 D-K fin WATER Lansing Board of Service Conditions Water and Light Electric Rule and Regulation 3 Service Conditions 1. Character of Service The Board supplies 60 Hertz alternating current throughout its service area and will endeavor, but does not guarantee, to furnish a continuous supply of electric Energy and to maintain voltage and frequency within reasonable limits. The Board shall not be liable for interruptions in the service including without limitation, phase failure or reversal, or variations in the service characteristics, or for any loss or damage of any kind or character occasioned thereby, due to causes or conditions beyond the Board's reasonable control, and such causes or conditions shall be deemed to specifically include, but not be limited to, the following: acts or omissions of Customers or third parties; operation of safety devices except when such operation is caused by the negligence of the Board; absence of an alternate supply of service; failure, malfunction, breakage, necessary repairs or inspection of machinery, Facilities or equipment when the Board has carried on a program of maintenance consistent with the general standards prevailing in the industry; act of God; war; action of the elements; stonn or flood; fire; riot; sabotage; labor dispute or disturbance, or the exercise of authority or regulation by governmental or military authorities. Notwithstanding any other provision of these rules, the Board may interrupt, curtail or suspend electric service to all or some of its Customers in accordance with the provisions of the Board's Emergency Electrical Curtailment procedures or as necessary to protect the health, safety and welfare of its employees or Customers. The Board shall be under no liability with respect to any such interruption, curtailment or suspension. 2. Description of Service A. Available Voltage (1) Single phase 120/240 Volt, three wire service is available for lighting and miscellaneous requirements. At the Board's option single phase 120/208V, three wire service may be made available. (2) Combined lighting and power service at 120/208 Volt, three phase, four wire; 120/240 Volt, three phase, four wire; or 277/480 Volt, three phase, four wire may be made available at the Board's option. (3) Three phase power service at 240 Volts, three wire, or 480 Volts, three wire, may be made available for Customers desiring a separate power service. The Board is not required to provide more than one lighting and one power service or one combined lighting and power service to a Customer's Premises. In such cases, the Customer shall pay the cost of providing this additional requirement. (4) If a Customer requires a three phase voltage different from the established voltage in the area, it may be furnished at the Board's option. In such cases, the Customer shall pay all extra costs involved. In the case where there is more than one established voltage in the area, the Board shall determine which voltage will be furnished and any applicable costs as determined by Rule 10,Rule 11 and Rule 15. (5) Primary Voltage service is also available for Customers whose Demand is 100 kW or more. The Board shall determine the particular Primary Voltage available. All ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 7 of 39 WATE" a® a'-T Lansing Board of Service Conditions Water and Light Electric Rule and Regulation 3 equipment necessary for utilization of service by the Customer shall be Board approved and shall be located on the Customer's side of the point of delivery and shall be furnished, installed and maintained by the Customer. Point of delivery shall be at the Board's electrical service connection to Customer owned equipment. For Customer owned transformer installations larger than those listed below, the Board may require the Customer to furnish, install and maintain special primary protective equipment. Primary Voltage Combined (Phase to Phase) Transformer—3 phase kVA 4,160 V 500 kVA 8,320 V * 1,000 kVA 13,200 V 2,000 kVA * This voltage is only available for existing Customers currently receiving this voltage. (6) Service shall be provided at voltages specified in this Rule 3. Customer will be responsible for making any voltage modifications beyond the Service Location for equipment requiring a voltage different from this Rule 3. B. Dual Voltage Transformers All Customer owned transformers installed in an area scheduled for conversion to a higher distribution voltage will be required to be dual wound. In such cases, the Board may share in qualified additional costs of such Dual Wound Transformers. C. Agreements The Board may require the Customer to enter into a written agreement that details the terms and conditions and price to be paid by the Customer prior to electric service construction. In addition,the Board may negotiate written contractual arrangements as to the provision of necessary service Facilities, duration of service, amount of deposit and refunds thereon, minimum bills or other service conditions for Customers or prospective Customers whose Load requirements exceed the capacity of the available distribution system in the area or whose Load characteristics or special service needs require unusual investments by the Board in service Facilities or where there is not adequate assurance of the permanent use of the service. No promises, agreements or representations of any agent or employee of the Board shall be of binding force upon the Board unless the same is within the authority of that individual and incorporated in the written agreement. D. Material Availability Subject to the restrictions contained in Rule 3.2.A, the Board will construct electric distribution Facilities and extensions only in the event it is able to obtain or use the necessary materials, equipment and supplies. The Board may, in its discretion, allocate the use of such materials, equipment and supplies among the various classes of Customers and prospective Customers of the same class. ADOPTED: 7/22/03 EFFECTTVP.. R/1/01 paaP R Af IQ WATER R&UGHT Lansing Board of Use of Service IM Water and Light Electric Rule and Regulation 4 Use of Service 1. General Electricity is supplied to a Customer for exclusive use on the Premises to which it is delivered by the Board. Service may not be shared with another, sold to another, or transmitted off the Premises without the written pennission of the Board, except as noted in Rule 6. 2. Access and Damages The Customer shall provide and maintain appropriate access and working space around electric Facilities in accordance with all applicable electrical codes and Board standards so as to permit ready and safe operation and maintenance of such Facilities. The Board's authorized personnel or agents of the Board shall have access to the Customer's Premises at all reasonable hours for all purposes necessary to conduct business, including without limitation: 1) install, inspect, read, repair, maintain, test or remove its meters 2) to install, operate and maintain other Board equipment or Facilities, and 3) to inspect and determine the connected electrical Load. If a meter, metering equipment or other Board property is damaged or destroyed through the neglect of the Customer, the cost of necessary repairs or replacements shall be the responsibility of the Customer. If, for any reason beyond its control, the Board is unable to read a meter, operate, maintain or make inspection including, but not limited to, reasons such as Premises being locked, meter being inaccessible or unsafe conditions, then after due written notice to the Customer, the electric service may be disconnected until such time as arrangements have been made to permit access for Board inspection and approval, and the Customer has paid the appropriate reconnection fee as stated in Rule 15. 3. Customer Equipment The Board may deny or terminate service to any Customer whose wiring or equipment constitutes a hazard to the Board's employees, equipment or its service to others. However, the Board is not responsible to inspect the Customer's wiring or equipment and shall not be held liable for any injury or damage resulting from the condition thereof. The Customer shall install and maintain the necessary devices to protect Customer owned equipment against service interruptions, phase loss and other disturbances on the Board's system, as well as the necessary devices to protect the Board's Facilities against overload caused by the Customer's equipment. 4. Power Quality The Customer shall use the service as not to cause interference, affect voltage, affect frequency, add harmonics, or otherwise cause other disturbances to the Board's system or another Customer's service. If the Board notifies the Customer of such a condition, the Customer shall discontinue operation of equipment causing such condition until a correction has been made. The Customer will be charged for all costs associated with alterations to the Board's system required to continue proper operation of the Board's system in conjunction with the Customer's equipment. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 9 of 39 WATER Lansing Board of Use of Service IM Water and Light Electric Rule and Regulation 4 In determining the existence of disturbances, the Board will rely on the latest revision of Standard 519, IEEE Recommended Practices and Requirements for Harmonic Control in Electric Power Systems. The Board may also use other appropriate standards or criteria in determining disturbances to the Board's system. 5. Power Factor The Board is not obligated to furnish service to Power Factor Loads less than eighty-five percent (85%) whether newly installed, reconnected or moved to another location, unless the Customer provides, at no expense to the Board, suitable equipment for improving the Power Factor to at least eighty-five percent(85%). 6. Tampering The Board may discontinue service and seek criminal charges, if it is determined that the meter or wiring on the Customer's Premises has been tampered with or altered in any manner to steal electricity. If the Board discontinues service for this reason, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 15, made appropriate restitution for stolen service and made provisions for an outdoor meter installation or other metering changes as may be required by the Board. ADOPTED: 7/22/03 r.rrnnmTvr.. 0/1/A' PartP 10 Af;Q WATER Lansing Board of Metering Water and Light Electric Rule and Regulation 5 Metering 1. General All Energy sold to Customers shall be measured by commercially acceptable measuring devices owned and maintained by the Board except where it is impractical to meter, such as street lighting, temporary or special installation, in which cases the consumption may be calculated. 2. Installation/Ownership The Customer shall be responsible to install that metering equipment furnished by the Board and shall furnish, install, own and maintain all other service equipment, and all wiring and conduits, from the weatherhead of an overhead service cornection and from the point of service of an underground service connection. 3. Equipment Location A. The Customer shall provide, at no expense to the Board, a space/enclosure suitable to the Board for the installation of the necessary metering equipment. The Customer shall also furnish the space and the provisions for mounting current and potential transfonners to meet Board requirements. Where the Customer desires to utilize a Board standard current and potential transformer enclosure, the Customer shall make a payment as specified in Rule 15. Inquiries regarding installation requirements and equipment approval should be directed to the System Integrity&Customer Projects Department. B. The Board requires that the metering equipment for all residential and, where practicable, commercial and small industrial Customers be located outdoors on the Customer's building or structure. The meter shall be located within service pedestal line of sight and at the nearest point of attachment as practicable. The meter shall be located on the same half of the dwelling as the service pedestal and the service shall not pass under a driveway. Meters in existing indoor installations that are to be rearranged so as to affect the Service Entrance Conductors or service equipment shall be changed to outdoor installations where suitable locations are available. C. The Board must approve the mounting of metering equipment indoors in those cases where there is no suitable outdoor location. Indoor locations must be as near as practicable to the point where the Service Entrance Conductors enter the building. Interior walls, panels or meter boards on which meters are mounted shall be rigid and free from vibration and shall be located in a clean and dry part of the building. D. Meter sockets, meter connection boxes and 'instrument transformer enclosures shall not be used as junction boxes for supplying Customer's branch circuits or grounding conductor termination, and no wiring other than service entrance and grounding conductors shall be run through this equipment. Metered conductors from different meters shall not be placed in the same raceway between the meter and the main disconnect device. E. The height of single line meter settings shall not be less than four and one-half(4'/z) feet nor more than five and one-half(5'/z)feet above finished grade or floor level. F. When using stacked multiple meter socket panels, the lowest meter shall not be less than twenty-four (24) inches from the floor for indoor locations. For outdoor locations, the installed meter centerlines shall be a minimum of thirty (30) inches from finished grade, and a maximum of seventy-two (72) inches from finished grade, and shall be limited to a maximum four(4)meter stack. ADOPTED: 7/22/03 FFFFCTIVF.• R/1/M Page 11 of 39 WATER L- Lansing Board of Metering Water and Light Electric Rule and Regulation 5 4. Multiple Occupancy Buildings The metering and Customer's service equipment for multiple occupancy buildings where several floors, apartments, stores, etc. are rented separately should be grouped in a common meter room, public hallway or some other Board-approved location where they will be accessible at all times to Board authorized personnel or agents of the Board. Metering equipment in multiple occupancy buildings shall be plainly marked with metal tags or neat lettering and/or numerals identifying the portion of the building served. Such identification shall be the responsibility of the building owner. 5. Meter Calibration Request A Customer may request the Board to test the meter calibration. The Board will perform such test to determine if the meter accuracy is within plus or minus 2%. If the test demonstrates the meter accuracy is within the allowed limits, the Customer may be charged an amount as stated in Rule 15. If the test demonstrates that the meter accuracy is outside of the plus or minus 2%, the Board shall replace the meter. 6. Rate 5 and 8 Meter Installations After July 1, 2002 all Customers selecting Rate 5 or Rate 8 shall install a phone line with active service to the meter enclosure in accordance with Board standards. The Customer shall be responsible for installation, maintenance and ongoing costs of the phone line. The Customer shall notify the Board of any phone number changes. The Board may impose a Meter Non-compliance Charge as specified in Rule 15 for each month the Customer has not complied with the requirements of this Rule 5.6. ADOPTED: 7/22/03 T R'P("TTIM- Q/i UY! Pang 19 of ZQ WATER T Lansing Board of Application of Rates Water and Light Electric Rule and Regulation 6 Application of Rates 1. General: Residential Rates are predicated upon the Board not being required to provide more than one lighting service to a residential building or structure. All other Rates are predicated upon the Board not being required to deliver more than one lighting and one power service or one combined lighting and power service for the total requirements of each separate building or structure of the Customer, unless otherwise provided for in these Rules and Regulations. The Board shall separately meter and separately bill service at different points or at different buildings or structures unless specifically provided for in the applicable Rate Schedule. 2. Resale: The owner or operator of an office building, apartment building, shopping mall, or similar structure may purchase Energy from the Board for resale to occupants on the condition that service to each occupant shall be metered separately and that the occupants may not be charged more for such service than the appropriate Rate of the Board available for similar service under like conditions. In order to qualify for resale to tenants, the owner or operator must state their intent to resell in the application for service. The renting of Premises with the cost of electric service included in the rental as an incident of tenancy will not be considered a resale of such service. 3. Choice of Rates: In some cases, the Customer may be eligible to take service under any one of two or more Rates. Upon request, the Board will advise the Customer in the selection of the Rate that will provide the lowest cost of service, based on the best available information, but the responsibility for the selection of the Rate shall be the sole responsibility of the Customer. After the Customer has selected a Rate, the Customer may not change from that Rate to another Rate until at least twelve (12) months have elapsed. The Customer shall not evade this rule by temporarily tenninating service. The Board may, waive the provisions of this paragraph where it appears that a change of the Rate is necessary for permanent rather than temporary or seasonal advantage. The intent of this rule is to prevent frequent changes from Rate to Rate. The Board shall not be responsible to refund the difference in charges under different Rates applicable to the same class of service, unless the Board provided an incorrect initial service turn- on Rate setting or unless the Customer makes a written request and has a permanent change in Load profile. Any refund is subject to Board approval. 4. Reactive Power: General service Rates that include a capacity charge (Demand Rate) may be subject to an adjustment for a reactive power charge based on registered reactive kilovolt ampere hours(kVARh) during the billing period. All Primary Voltage installations will include kVARh metering to determine the reactive power charge. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 13 of 39 WATER a® Lansing Board of Application of Rates Im Water and Light Electric Rule and Regulation 6 The Board may require all or any Secondary Voltage Demand Rate Customers whose maximum Demand is 100 kW or more for six (6) months out of any one twelve (12) month period to install a kVARh meter for reactive power adjustment. Secondary Voltage Demand Rate Customers whose Demand is less than 100 kW may be tested with portable kVARh metering equipment to determine if permanently installed kVARh metering is justified. The Board may determine the average Power Factor by test and apply a reactive power charge. Customers who install Power Factor correction equipment may request that kVARh metering be installed. 5. Space Conditioning-Electric Water Heating Service: Space Conditioning-Electric Water Heating Service Rate No. 12 is available to commercial and industrial Customers for space conditioning and water heating service as specified in the availability clause in the Rate Schedule. Other uses of electricity at the Premises will be billed using an appropriate secondary General Service Rate. 6. Mobile Homes in Courts—Individually Served: Service to new Mobile Home Courts and expanded service to existing Mobile Home Courts shall be provided through individual tenant metering. Ordinarily, electric service to a mobile home shall be in the name of the occupant; however, service to lots designated for occasional or short-term occupancy shall be in the name of the owner of the Mobile Home Court or an authorized representative. For rules covering installation of electric distribution and services for mobile homes in courts, see Rule I O.I.K. An individually served mobile home used as a Residence will qualify for an appropriate residential electric service Rate. 7. Apartment Buildings and Multiple Dwelling Structures: 1. An apartment building or multiple dwelling structure containing four (4) or less Dwelling Units may elect to be billed on the appropriate Residential Service Rate. 2. Apartment buildings or multiple dwelling structures containing five (5) or more Dwelling Units shall have each Dwelling Unit separately metered. 3. Apartment buildings or multiple dwelling structures constructed after March 1, 1979 shall have each Dwelling Unit separately metered. 8. Cogeneration and Small Power Production Facility: Customers who utilize cogeneration or small power production equipment as an Energy source may receive partial or standby service under the following applicable Board Rate Schedules: Residential Electric Service—Rate 1 General Service—Rate 3 Large General Service—Rate 4 Primary Service—Rate 5 Large Capacity Electric Service Rate—8 ADOPTED: 7/22/03 PPPP(—PTvr• Aii mz PnoP I nf'39 o WATER R&L�T Lansing Board of Application of Rates Water and Light Electric Rule and Regulation 6 A Customer requesting electric service under this Rule shall enter into a special contract with the Board setting forth terms and conditions of service. Customers who elect to sell Energy to the Board will be paid for such Energy at the Rate specified in the applicable Rate Schedule as set forth above. When not so specified in the applicable Rate Schedule,the Board will pay for such Energy at a Rate which approximates its avoided costs. 9. Billing Demand: If a Customer's electric Load drops below the minimum Demand requirement of Rate No. 4, 5, or 8 the Board reserves the right to change the billing Rate of this service to another appropriate General Service Rate. 10. Minimum Charges: A minimum charge, as defined by the Rate in effect, shall be applied to all services and billed to the Customer. Where the Customer requests that a service be discontinued, the Board shall deactivate the service by any appropriate means, including without limitation, removing the meter and/or by disconnecting the service from the Board's distribution system. 11. Property Owner-Rental Agent Agreement for"Leave On" Service: The BWL may waive application charges to maintain continuity of service at rental property locations provided: (1) the landlord agrees in writing to assume the responsibility for electric service during the interim between tenants, and (2)the landlord is in compliance with all other rules and regulations of the Board. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 15 of 39 WATER R LIGHT Lansing Board of Responsibility for Payment of Bills Water and Light Electric Rule and Regulation 7 Responsibility for Payment of Bills 1. General Each Board Customer is responsible to pay all utility bills as rendered on or before the due date shown thereon. The Customer remains responsible for payment of the bills until the Customer orders service to be discontinued and the Board has had reasonable time to secure a final meter reading. Bills are rendered on approximately a monthly basis. Bills are mailed to Customers approximately fifteen (15) days before the due date shown on the bill. The Customer shall pay the net amount if paid on or before the due date on the bill. Failure on the part of the Customer, through no fault of the Board,to receive the bill shall not entitle the Customer to pay the net amount after the due date of the bill. If a bill remains unpaid after issuing a five (5) day written shut-off notice, the Board shall have the right to discontinue service. In extenuating circumstances, a Customer will be afforded the opportunity to make payment arrangements. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not in dispute. 2. Estimated Consumption Readings may be estimated when conditions warrant. Until reconciled by an actual reading, bills rendered on estimated consumption have the same force and effect as bills rendered on actual meter readings. 3. Billing Errors When an error is found to exist in the billing rendered to a Customer, the Board will correct such error to recover or refund the difference between the original billing and the corrected billing. Corrected billings will not be rendered for periods in excess of three (3)years. Refunds to Customers will normally be made promptly upon discovery of the error. Amounts due the Board from the Customer will be subject to normal collection policy and procedures. 4. Account Security Deposits The Board shall require an account security deposit from any new or existing Customer with an unacceptable credit history. The Board may apply different rules to new Customers signing up for service in accordance with Rule 7A.C. The deposit is normally 1.5 times the average monthly bill (actual or estimated) as determined by the Board. If a deposit is required for new residential Customers, the Board shall determine the amount in accordance with Rule 15. To determine the deposit for new commercial and industrial Customers, the Board will estimate the average monthly bill and apply the 1.5 factor. The Board may waive deposits in special circumstances. The Board may also demand deposits larger than 1.5 times the average monthly bill if the Board determines that a Customer presents a higher than normal credit risk. The Board will refund deposits to all Customers who have taken service for 12 months and have an acceptable payment history. The Board will also refund deposits to Customers who have terminated service and paid all charges due. ADOPTED: 7/22/03 rrrrf'mTl7n. 011/A' 13- 1 A of 2Q WATE� Lansing Board of Responsibility for Payment of Bills Water and Light Electric Rule and Regulation 7 A. A security deposit may be required in any of the following circumstances: (1) The Customer has deliberately misinformed or misrepresented facts to the Board. (2) The Customer has tampered with the meter during the last 12 months. (3) The Customer has had one or more payments canceled in the last 12 months due to: (1) non- sufficient funds returned check, (2) account closed returned check, (3) non-sufficient funds bank bill, (4) account closed bank bill, or(5) credit card reversal. (4) The Customer has received a fmal notice on any Account within the last 12 months. (5) The Customer has received more than 3 second notices on any account during the last 12 months. (6) The Customer has a past due balance on any account that is greater than$50.00 for more than 31 days past due in the past 12 months. (7) The Customer has a suspended or bad debt account within the last 12 months. B. If the Customer is applying for service through an artificial legal entity such as a corporation, or limited partnership,then the Board may request a deposit or other security of payment. C. New Customers will not be required to submit a deposit, in any of the following situations: (1) The Customer has no previous service history with the Board. (2) The Customer has previously established an acceptable payment history with the Board on a similar account. (3) The Customer's bill is paid by the State of Michigan. (4) The Customer secures a guarantor with a similar account and an acceptable payment history. (5) The Customer provides an acceptable surety bond. (6) The Customer provides an acceptable credit reference letter from a similar utility company for a similar account. Account must have been in the Customer's name and maintained for a minimum of 12 consecutive months. (7) The Customer has established an acceptable credit rating with a credit-reporting agency. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 17 of 39 WATE�T Lansing Board of Dispute and Hearing Procedure Im Water and Light Electric Rule and Regulation 8 Dispute and Hearing Procedure 1. Disputes In accordance with the Lansing City Charter, the Board is required to provide a fair and equitable dispute and hearing process for its Customers as follows: A. When any Customer disputes a bill or service and the Board is so advised, the date of the notice of dispute will be recorded. B. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not disputed. C. The disputed bill or service will be investigated promptly and completely. D. The Customer will be advised of the results of the investigation. E. An attempt will be made to resolve the dispute in a manner mutually satisfactory to both parties. F. The Board will provide the opportunity for each Customer to enter into a reasonable settlement agreement in order to mutually resolve the disputed claim or to satisfy any liability not in dispute. G. If a settlement cannot be reached between the Customer and the Board's Account Administrator, the Customer may choose to appear before the Board's Dispute Review Committee. The review will be scheduled within ten(10) days of the request or as mutually agreed to by both parties. H. If a settlement cannot be reached following examination by the Dispute Review Committee, the account will be referred to the Board's General Manager. 1. If a settlement is not reached after review by the Board's General Manager, the Customer shall be afforded an opportunity for a hearing. J. The Customer shall be responsible for payment of all other bills or portions of bills as rendered which are not in dispute. 2. Hearings A. Any Customer who disputes the services provided or a billing for services furnished in accordance with the Board's filed Rates, Rules and Regulations or established policies or procedures may request a hearing. If a hearing requested is based on a disputed past due bill, the request must be made within ten (10) calendar days following the final outcome of the dispute process. Any request for a hearing may be made in writing and received by the Board's corporate office at 1232 Haco Drive,Lansing,Michigan, 48912. B. On receipt of a request for a hearing, the Board will forward this request to an independent Hearing Officer. The Hearing Officer will arrange a time for the hearing and advise both the Customer and the Board of the date, time and location in writing. The hearing will be scheduled during normal business hours. Failure of the Customer or Board to attend the hearing without due cause or prior request for adjournment will constitute a waiver of right of that party to the hearing. C. The Board and the Customer shall: (1) Have the right to be represented by Counsel or other persons of their choice. (2) Have the right to present evidence,testimony and oral and written argument. (3) Have the right to cross-examine witnesses appearing on behalf of the other party. ADOPTED: 7/22/03 V�r17T707'rlln. 011 M1 Puna 1 A.F2Q WATER Lansing Board of Dispute and Hearing Procedure go Water and Light Electric Rule and Regulation 8 (4) Have the right to have the hearing recorded by a court reporter at the expense of the party requesting a court reporter. The Hearing Officer shall also have the right to have the hearing recorded by a court reporter. Recordings will be preserved at least six (6) months from the date of the hearing. All evidence relevant to the dispute will be received. D. For each hearing, the Hearing Officer shall compile a hearing record which will contain; (1) A concise statement in writing of the position of the Board in relation to the dispute. (2) A concise statement in writing of the position of the Customer in the dispute. (3) Copies of all evidence submitted by the parties. E. If a decision is reached during the hearing, the Hearing Officer shall state the decision to both parties. If the Hearing Officer does not reach a decision. during the hearing, additional time will be allowed to reach a decision. When a decision has been reached, either at the hearing or later, the Hearing Officer will prepare a report which shall contain the following: (1) A concise summary of the evidence and argument presented by the parties. (2) The decision and a statement that the decision of the Hearing Officer was based solely on the evidence presented and reasons therefore. (3) Advise that the representatives of the Board and the Customer have a right to file an appeal with the Board of Commissioners. (4) A statement as to any settlement agreement. (5) A statement that the dispute determination is binding on both parties unless appealed to the Board of Commissioners within ten(10) days of the date of mailing of decision, and that any request for appeal must be in writing to the Corporate Secretary. F. The Hearing Officer shall file the written report with the Board of Commissioners and the Mayor of the City of Lansing. A copy of the report shall be sent to the Customer via certified mail. G. If the dispute is unresolved and the decision appealed, the Hearing Officer shall make recommendations to the Board of Commissioners on the dispute. The Secretary of the Board will arrange a time for the appeal and advise both the Customer and the Board of the date, time and location in writing. Failure of the Customer to appear at the time set for the appeal without due cause, or to request an alternate date, will constitute a waiver of right to appeal. H. The Board of Commissioners shall report its final action on any unresolved disputes together with the Hearing Officer's report and recommendations to the Mayor and the City Council of Lansing, Michigan. I. The Mayor may make recommendations to the Board of Commissioners on each unresolved dispute. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 19 of 39 WATE R Lansing Board of Sale and Lease of Service Facilities REWater and Light Electric Rule and Regulation 9 Sale and Lease of Service Facilities 1. General To qualify for a primary electric service Rate,the Customer must own and maintain or lease from the Board all the necessary transforming, primary switching, primary metering and protective equipment required for such service and the entire electrical requirements must be supplied through a Board approved metering installation. This service is offered at the option of the Board and the Customer shall meet the requirements of this Rule 9, Rule 3.2.A.(5) and all electrical codes and Board standards. Prior to sale or lease of a Board owned installation for a primary electric service Rate, this installation shall be required to meet all applicable electrical codes, which may require the Customer to install additional equipment such as gang-operated disconnect devices and protective devices. Once the applicable code requirements are met, and subject to Board approval, the Customer will be allowed to purchase or lease the Board owned transformer(s) and associated equipment at estimated fair market value. Upon compliance with the provisions of this Rule 9, the Customer will be placed on the applicable primary electric service Rate. After date of sale, the Board disclaims any rights or ownership or responsibility for the equipment or Facilities and purchaser accepts the equipment or Facilities as is without warranty either express or implied and, further, the responsibility for any and all replacement, maintenance and/or repair as/or when needed wholly rests with the Customer. ADOPTED: 7/22/03 FFFFCTTVF• R/l/0', Page 20 of 39 WATER&LIGHT Lansing Board of Distribution System Extensions IM Water and Light Electric Rule and Regulation 10 Distribution System Extensions 1. General: A. Request for Distribution System Extension Rule 10 sets forth the conditions under which the Board will extend overhead, underground or combination overhead and underground electric distribution systems. B. Ownership The Board will provide, own, maintain and specify all of its distribution Facilities including location, except as otherwise expressly provided herein. No ownership rights to Board Facilities shall pass to any owner(s), developer(s), or Customer(s) by reason of any contribution required hereunder. C. Nonrefundable Contribution for Underground Extensions The owner(s), developer(s) or Customer shall be required to make a nonrefundable contribution in aid of construction to the Board, to cover the estimated difference in cost between overhead and direct burial underground Facilities. Residential: In Subdivisions: The amount of the contribution shall be computed on the basis of front lot footage as determined by the Board. Where underground distribution system extends through areas within a subdivision that are undeveloped or consists of lots for future use, the front footage measurement of both sides of the street or easement along which the cable extends will be the basis for such contribution. The "Residential Underground Distribution Extension" charge for this contribution shall be as stated in Rule 15. Outside Subdivisions: The amount of the contribution shall be computed on the basis of Trench footage required and to be installed. The"Residential Underground Distribution Extension" charge for this contribution shall be as stated in Rule 15. Commercial/Industrial: The amount of the contribution shall be computed on the basis of Trench footage required and transfonner capacity to be installed. The "Commercial Underground Distribution Extension" charge and "Transformer kVA Capacity" charge for this contribution shall be as stated in Rule 15. D. Deposit The Customer may be required to make a deposit based on the following: (1) For Customer(s) to be served within one Year: The Board shall require a deposit from the Customer in the amount that the estimated cost of the distribution extension exceeds one and one-half(1'/z) times the estimated new Annual Revenue to be received from the Customer(s). Any nonrefundable contribution in aid of construction made will be credited against the cost of such extension for purposes of this calculation. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 21 of 39 WATER Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 (2) For serving Loads of questionable stability or development: A deposit, if required, by the Customer will be based on an evaluation of the Board's recovery of capital cost along with other business related matters. Prior to the installation of a distribution system, the owner(s), developer(s) or Customer(s) who are to make any contribution required hereunder shall be required to enter into a written agreement. The agreement will generally describe the proposed distribution system and set forth the respective obligations of the parties. Such agreements shall be subject in all respects to the provisions of this Rule 10. Each proposed system shall be a separate and distinct unit and any extension thereof shall, if agreed to by the Board, be made the subject of a separate written agreement. Refunds Distribution Line extension deposits made with the Board shall be subject to refund without interest during the first five (5)twelve (12) month periods from the date of the written agreement for a distribution system extension as required by this Rule 10.1.D. Refunds will only be made to person(s) making the deposit and shall cease when they equal the amount deposited or at the close of the fifth twelve (12) month period following the month during which the line extension is completed, after which the Board shall have no further obligation to refund any remaining portion of the line extension deposit. The Board will refund to the party making the deposit: 1) $500 for each additional new residential pennanent Customer(s) directly connected to the extension and; 2) An amount equal to one and one-half (1'/z) times the first year estimated Annual Revenue less the distribution system construction cost for each additional new commercial/industrial permanent Customer(s) directly connected to the extension. Directly connected Customers are those that do not require the construction of more than 300 feet of primary and/or secondary Distribution Lines. Refilnds will not be made until the original Customer(s) or its equivalent are permanently connected to the extension. ADOPTED: 7/22/03 FFFFCTTVF• R/1/(1l Page 22 of 39 WATER Lansing Board of Distribution System Extensions IM Water and Light Electric Rule and Regulation 10 E. Economic Development Offsets Where the Board determines that the distribution system extension will promote development that provides substantial and sustainable economic benefits to its Customers or the Lansing region, the Board will consider an offset to its fees and charges and/or an economic incentive subject to its availability. F. Easements and Tree Trimming/Removal Permits Prior to the installation of any distribution system, the owner(s), developer(s) or Customer(s) shall be required to furnish, at no expense to the Board, recordable easements, granting right-of-ways suitable for the installation and maintenance of the distribution system including any street lighting cables and distribution equipment as designed by the Board for present and future service. The owner, developer, or Customer shall also, in a form satisfactory to the Board, grant the Board permission to trim and remove trees as necessary to protect the integrity of its distribution system and the safety and welfare of its employees and the public. In the event the required easements and tree trimming and removal permits are not provided by the owner(s), developer(s) or Customer(s) for such extension, the Board may elect to construct all or any part thereof along public highways or other private property. hi such event, the Board may require the owner(s), developer(s) or Customer(s)to pay the added construction expense occasioned by the use of such highways or other private property, plus any expense encountered in acquiring permits and easements on other private property when necessary to provide service to the owner(s), developer(s) or Customer(s). G. Non-Standard Equipment Where the Customer requests that the Board utilize equipment which differs from its normal specifications, purchased or installed, the Board may elect to provide such non- standard equipment with the Customer paying any additional cost. A. Non-Standard Construction Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. I. Other Facilities The Board may elect to prohibit the construction of sanitary sewers and water facilities in its easement so that sewer and water connections can be made without undermining electrical ducts or cables. It will be the responsibility of the owner(s), developer(s) or Customer(s) to provide locations of any existing privately owned underground facilities such as lawn sprinkler systems, field drainage systems, septic tanks, Customer owned electric lines, etc. If privately owned facilities are not properly located,the Board does not assume responsibility for any damage to these facilities. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 23 of 39 WATER R® Lansing Board of Distribution System Extensions Im Water and Light Electric Rule and Regulation 10 J. Customer Provided Facilities Customers who will be served by an underground distribution system and whose Load requires the installation of a padmounted transfonner(s) larger than 500 kVA shall be required to own, install and maintain a concrete platform(s) constructed according to the Board's specifications. Where it is necessary or requested to place the Board's pole(s), transformer(s) or other above-grade equipment in an area on the Customer's property which is susceptible to vehicular traffic, it will be the Customer's responsibility to install guard posts to the Board's specifications or the Board will install them on an estimated installed cost basis. K. Mobile Home Courts Underground distribution systems and services for Mobile Home Courts shall be installed under the provisions of this Rule 10 and Rule 1.1, except that the Board will provide, install and maintain suitable meter supports which will be located along the Main Line Trench at locations as specified by the Board. The Board will install, own and maintain the entire underground electric distribution system, including the pre-metered portion of the service laterals. The service conductors from the meter to the mobile home shall be the responsibility of the Mobile Home Court owner. L. Street Lighting The Board may provide street lighting in areas served directly by its distribution system subject to the governing entity's approval, Board approved standards and the Board's Rate Schedules. The Board may provide underground street lighting in areas served directly by underground distribution systems. M. Outdoor Protective Lighting The Board may provide Outdoor Protective Lighting (OPL) in areas served directly by its distribution system subject to the governing entity's approval, where applicable, Board approved standards and the Board's Rate Schedule. N. Subdivisions The Board will install underground electric distribution systems for all new subdivisions. Likewise,where a new subdivision is located adjacent to an existing overhead distribution system, the Board will generally provide underground service from these overhead Facilities unless the local governmental authority approves the use of individual overhead service connections. O. Available Voltage If a Customer requires a three-phase voltage different from the established voltage in the area, it may be furnished at the Board's option. In such cases, the Customer shall pay all extra costs involved. In the case where there is more than one established voltage in the area,the Board shall determine which voltage will be furnished. ADOPTED: 7/22/03 FFFFCTTVF• R/t/nl Page 24 of 39 WATER Lansing Board of Distribution System Extensions IM Water and Light Electric Rule and Regulation 10 P. Construction Date of Distribution Extension The Board will, based on availability of work crews and material, and subject to approvals of the appropriate regulatory agencies, utilize best efforts in constructing the distribution extension to meet a mutually agreed upon date. 2. Trenching and Duct: The owner(s), developer(s) or Customer(s) shall be required to provide, at no expense to the Board, rough grading (within six (6) inches of finished grade) prior to the installation of the Board's Facilities so that the underground electric distribution system and street lighting cables, if any, can be properly installed in relation to the finished grade. Owner(s), developer(s), or Customer(s) shall install and maintain permanent survey stakes indicating property lines, at no expense to the Board, after rough grading, and prior to installation of the Board's Facilities. The Board's construction standards for the installation of direct burial primary and secondary cables require a minimum cover of thirty-six (36) inches for primary cable and thirty (30) inches for secondary cables and a maximum cover of forty-eight (48) inches, unless otherwise approved by the System Integrity & Customer Projects Department and, in no cases, shall the Board allow any Board owned cable Facilities to remain energized when in known violation of the minimum depth requirements of the National Electrical Safety Code. Any subsequent relocation of Board Facilities required on account of a change in grade that violates this minimum depth requirement shall be done by the Board and billed at actual cost to the owner(s), developer(s) or Customer(s) causing for the violation. The Board may jointly utilize Trenches for primary, secondary cable and service conductors with other utilities. All Trenching and backfilling will normally be provided by the utilities; however, the developer shall be responsible for all extra expense involved if paving is installed before cable or conduit crossings are in place. The Board will backfrll Trenches for primary and secondary cables with the same material as has been excavated and with minimum compaction except in cases where material removed is found to be rubble, debris or unsuitable as determined by the Board. In such cases, sufficient sand shall be provided by the owner(s) or developer(s), at no expense to the Board, or the Board may, at the owner's expense, furnish the sand to backfrll six(6) inches below and above the Board's cables. Where it is necessary for Trenching and installation of underground electric Facilities to be scheduled during the "Winter Construction Period" as defined in Rule 15, the Customer may be required to pay a"Winter Construction Charge"as established therein. As an option, the Customer or developer may elect to provide all Trenching, backfill and restoration on the Customer's or developer's property to the Board's specifications. Prior to the installation of the Board's direct burial electric Facilities in a Trench provided by the Customer or developer, the Trench shall be inspected by the Board's authorized personnel for proper depth and cleaning of debris. The first inspection shall be at no charge, and all subsequent inspections may be subject to a"Site Inspection"fee as defined in Rule 15. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 25 of 39 WATE® Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 If the Board determines that an installation is not practical for direct burial cable, the Board will require ducts. The owner shall be responsible to own, install and maintain ducts, manholes and vaults located on the owner's Premises when: A. The owner requests these Facilities; B. Direct burial installation is impractical; C. The Board requires these Facilities as an extension from a similar existing system, or; D. Other reasons as may be determined by the Board. Otherwise, the Board shall own, install and maintain such ducts and associated Facilities. Ducts, manholes and vaults shall be installed in accordance with the Board's specifications. 3. Conversion of Existing Overhead Distribution Systems and Associated Services: At the request of a Customer, the Board will, if feasible, convert any existing overhead electric distribution system and associated overhead services, including any provisions for street lighting, to underground distribution Facilities. Prior to the commencement of the conversion of any existing overhead distribution systems and associated services,the Customer(s) shall be required to make a nonrefundable contribution in aid of construction. The contribution in aid shall reimburse the Board for the estimated fair market value of the existing overhead Facilities comprising such system plus the cost of removal less the salvage value thereof, plus the cost of the new underground Facilities including, without limitation, the cost of breaking and repairing streets, walks, parking lots, driveways, and the cost of repairing lawns and replacing shrubs, flowers, sod. Should the conversion of these Facilities cause the installation or re-arrangement of other overhead Facilities in the area, the Customer(s) shall reimburse the Board for the installed cost involved in re-arrangement or installation of other existing Facilities. Conversion of any existing overhead electric distribution system and associated overhead services are also subject to the easement provisions of Rule 10.I I.F. Any additional rewiring of Customer owned Facilities made necessary by the conversion of an overhead service to any underground service shall be the responsibility of the Customer. Pole attachments other than the Board's are the responsibility of the attaching party. 4. Electric Facility Relocations and Removals: At the request of a Customer or developer, or as required due to a conflict, or to meet Board Standards, the Board will relocate or remove its electric and associated Facilities provided: A. The relocation or removal is feasible and meets Board Standards. B. The Customer or developer obtains approval from all Customers impacted by the proposed relocation. C. The relocation or removal does not degrade electrical reliability D. All governmental approvals, permits and easements are obtained ADOPTED: 7/22/03 T;T�t—rTXIV. uii MI paoP?F nf'19 WATE� Lansing Board of Distribution System Extensions IM Water and Light Electric Rule and Regulation 10 Prior to any relocation or removal of electric Facilities, the Customer or developer shall be required to make a nonrefimdable contribution in aid of construction. The aid in contribution of construction shall reimburse the Board for all relocation and removal costs including material, labor, the cost of breaking and repairing streets, walks, parking lots, driveways, etc., repairing lawns, replacing shrubs, flowers, etc., and any right-of-way costs as per this Rule 10, plus the cost of any necessary modifications to the Board's electric distribution system affected by the relocation or removal, less the salvage value of any portion of the electric Facilities removed. Where relocation or removal of electric Facilities is necessary to serve new or additional Load, the Board may elect to credit all or a portion of the value of any associated revenue to the cost of relocation or removal. The only exception to these relocation provisions will be the relocation of the Board's electric Facilities within public right-of-way that blocks the access to the first driveway to a residential Premise. There will be a charge for relocation work to provide access to any additional driveways to these Premises. Proof of driveway permits will be required prior to any relocation work. 5. Distribution System Extensions for Second Source: A. The Board will not construct at its own expense a second electric source to any facility, new or existing, that can be adequately served with a single source as determined by the Board. Except that a Second Source shall be required for Customers served from the Board's underground lead cable system and the Board may require a nonrefundable contribution in aid of construction as determined by Rule 10.I I.D. B. The Customer may have the additional source installed by making a nonrefundable contribution in aid of construction to the Board, in advance, to cover the entire cost of extending the Board's electric Distribution Lines to the Customer's facilities, and any other cost incurred due to increasing the capacity of the Board's existing distribution Facilities. C. Where the reasonable probability exists for future Customers to be connected to the proposed Second Source line extension, the Board may elect to enter into a line extension agreement in accordance with the applicable provisions of this Rule 10. D. In the case of a request for a Second Source, the Board will endeavor, but does not guarantee, to maintain at all times two separate sources to the Customer's facilities. 6. Distribution System Extensions to Loads of Questionable Permanence: When service is requested for Loads of questionable permanence as determined by the Board, including but not limited to billboards, sawmills, mixer plants, gravel pits, etc., the Board will construct the necessary line extension subject to the provisions of Rule 11.2. or, if the Customer so elects, the line extension may be constructed under a line extension agreement subject to the following conditions: A. Prior to commencement of construction, the Customer shall make a deposit with the Board in the amount of the estimated construction and removal costs. Such estimate shall include all labor and material involved in extending Board distribution Facilities and increasing the capacity of existing Facilities to serve the Customer's Load, plus the estimated removal costs. B. At the end of each year for a five (5) year period, the Board may make a refund on the amount deposited. Refunds will be made only to the Customer who made the deposit. This refund will be computed as follows: ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 27 of 39 WATER Lansing Board of Distribution System Extensions IM Water and Light Electric Rule and Regulation 10 (1) Twenty percent (20%) of the actual current Annual Revenue for electrical service received from the Facilities covered by the deposit. (2) Refunds shall cease when they equal the amount deposited or at the close of the 5t' 12 month period from the date of the written agreement for a distribution system extension as required by Rule 10.1.D, after which the Board will have no ftt►rther obligation to refund. ADOPTED: 7/22/03 r T7TMrITTAM. Qii ins Paap.?9 of 19 WATER Lansing Board of Services soWater and Light Electric Rule and Regulation 11 Services 1. General: The Service Entrance Conductors shall be furnished, installed and maintained by the Customer in accordance with the National Electrical Code or other applicable local codes and shall conform to the Board's specifications. The Service Location shall be specified by the Board and shall be located so that the Board's service Facilities meet or exceed all clearance requirements of the National Electrical Code, National Electrical Safety Code and other applicable local codes. Should it become necessary from any cause beyond the Board's control to change the Service Location, the entire cost of any changes in the Customer's service shall be the responsibility of the Customer. Should it become necessary for the Board to reinforce or upgrade area distribution Facilities to accommodate the requested service, a nonrefundable contribution in aid of construction may be required as determined by Rule 10.1.D. Any poles, wires and other equipment required at or beyond the Customer's meter shall be furnished, installed and maintained by the Customer. The Board will maintain and repair only those service conductors owned by the Board except as provided in Rule 11.6. In the course of maintaining or repairing service conductors, the Board shall bear no responsibility for damage incurred or restoration to areas where the service conductors pass under any area not readily accessible. The Customer shall be responsible for additional repair costs due to these encumbered services or for damage as a result of negligence, willful damage or carelessness by the Customer, owner or tenants. 2. Temporary Services Customers desiring temporary general secondary service (normally less than six (6) months) for, including without limitation, construction jobs,traveling shows, outdoor or indoor entertainments or exhibitions, shall pay the charge per Customer per month provided in the Board's applicable Rate. The Customer shall furnish a suitable support for the metering. The Customer shall be required to make a nonrefundable contribution in aid of construction with the Board in an amount to cover the cost of installing and removing these temporary Facilities plus a security deposit if required. Meters shall be installed by the Board and may be read daily and the deposit will be modified, as the Energy used may justify such modification. Minor temporary Loads such as construction security cameras may be unmetered and billed at a flat Rate at the approval of the System Integrity and Customer Projects Department. Where overhead temporary service of 400 Amperes or less is desired and where such service is available and does not exceed 100 feet at the time temporary service is needed,the charge will be as specified in Rule 15. Where overhead temporary service is not available at the site or exceeds 100 feet or 400 Amperes, the Customer shall be required to make a nonrefundable contribution in aid of construction to the Board in advance to cover the estimated cost of installation (excluding ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 29 of 39 WATE® Lansing Board of Services sm Water and Light Electric Rule and Regulation 11 services and meters), plus the cost of removal or abandonment of the temporary Facilities less the salvage realized. For all underground temporary services, the Customer is responsible to Trench and install each underground temporary service conductor(s) in accordance with the requirements of all electric codes applicable, to a point within two (2) feet of the Board's Facilities. Any excavation with power equipment will require notification of the "Miss Dig" system for the identification of all underground Facilities in the area as required by the laws of the State of Michigan. The Customer shall make a nonrefiindable payment to the Board for connecting and disconnecting temporaa service conductor(s)to Board equipment as stated in Rule 15. 3. Residential, Commercial and Industrial Overhead Services: Where suitable service is available, the Board will install, own and maintain overhead service conductors from its Distribution Lines to the nearest suitable point of attachment on the Customer's buildings or other structures as designated by the Board. Where the Customer requests a point of attachment other than that specified by the Board, then the Customer shall be responsible to pay the cost of installing additional intermediate supports, wires or fixtures necessary to reach the point of attachment requested. The Customer shall furnish, own, install and maintain service masts, when necessary in order to obtain required clearance. The Board will specify the location, height and size of the mast to adequately support the service wires under heavy loading conditions. While the mast should be firmly attached to the principal building frame, the Board does not make recommendations regarding the method of fastening and assumes no responsibility for damage caused by the service wires. The Customer should consult an architect or builder regarding the method of fastening prior to installation. Where paralleled Service Entrance Conductors are used in overhead services, the Customer(s) or the contractor(s) shall be responsible to terminate the paralleled conductors in a single conductor suitable for connection to the Board's overhead service wires. 4. Residential,Underground Services from Underground Distribution Systems: Upon request and where suitable Facilities are available, the Board will install, own and maintain single phase underground direct burial residential electric service conductors to the nearest suitable point of attachment on the exterior of the Customer's building or other structure as designated by the Board, provided that the total capacity of all the Dwelling Units at each Service Location does not exceed the capacity of a single 167 kVA transformer. Where the total service capacity of all the Dwelling Units at one Service Location exceeds the capacity of a single 167 kVA transformer,the service conductors shall be installed in accordance with Rule 11.6. The developer or Customer shall be required to make a nonrefundable contribution in aid of construction to the Board to cover the additional cost resulting from the installation of an underground service. For standard installations, the amount of such contribution shall be computed on the basis of the "Residential Underground Service" charge as defined in Rule 15 and applied to the straight line distance from the termination of the Board's secondary Facilities normally at or near the front or ADOPTED: 7/22/03 VVVU1-rT'%1V. vii i0'1 Page 10 of 39 WATER Lansing Board of Services Water and Light Electric Rule and Regulation 11 rear property line, or at the Board's transformer,to a point directly below the Customer's meter as designated by the Board. Where special routing of the service conductors is requested by the Customer and the Board determines this request to be feasible, the cost of the additional service length required to accommodate such special routing shall be the responsibility of the Customer and will be based on the"Residential Underground Service" charge as defined in Rule 15. Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. 5. Residential Underground Services from Overhead Distribution Systems: The Board will, where feasible, install, own and maintain single phase underground direct burial residential electric service conductors from an overhead electric distribution system in accordance with the provisions of Rule 11.4. In addition, the Board will impose a "Secondary Riser Pole Charge" for each underground service supplied from an overhead secondary as stated in Rule 15. If a crossing of a public road is necessary and the Customer requests that the crossing be installed underground, the Customer may be required to make an additional contribution in aid of construction to the Board, in an amount equal to the estimated difference in cost between an overhead and underground crossing. 6. Commercial and Industrial Underground Services: The owner of each commercial or industrial building requiring an underground electric service system shall install, maintain and own the underground secondary service conductors between the building and the service pedestal, padmounted transformer or secondary attachment on the pole. Primary service conductors shall be installed, maintained and owned by the Board. Customers located in areas served by direct burial distribution systems may request the Board to install direct buried electric secondary service conductors to commercial services not exceeding 400 amps where the point of metering is located outside and is in compliance with the Board's requirements. The Board will comply with the request, if it is feasible, but shall only install service conductors to a meter enclosure or Secondary Service Termination Box supplied by the Board and installed by the Customer. The Customer shall pay the cost of the Secondary Service Termination Box as specified in Rule 15. The Customer shall still retain ownership of such service conductors with maintenance provided by the Board at the Customer's expense. The Customer or developer shall be required to make a nonrefundable contribution in aid of construction toward the cost of such Board-installed services that, for standard installations, will be computed on the basis of the "Commercial Underground Service" charge as defined in Rule 15. Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. The commercial or industrial Customer may request the Board to maintain and repair, and the Board may do so in its discretion, the Customer's underground secondary service conductors ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 31 of 39 WATEwATE—HT Lansing Board of Services IM Water and Light Electric Rule and Regulation 11 between the building and the service pedestal, padmounted transformer or secondary attachment on the pole. The Customer shall be responsible to pay all bills rendered by the Board for the cost to maintain or repair the Customer's service conductors. Secondary service conductors shall be installed in accordance with any applicable local codes and the following Board specifications: A. The total ampacity of all secondary service cables connected to a transformer shall not exceed 1600 Amperes. The secondary service shall be in accordance with the National Electrical Code or other applicable local codes. Due to physical limitations of Board-owned transformers and secondary connectors, the maximum number of paralleled secondary cables for any single service dependent on service size shall be limited to: Single Service Size Cables Maximum No, of Parallel 200 Amperes 1 400 Amperes 2 600 Amperes 3 800 Amperes 3 1000 Amperes 4 1200 Amperes 4 1600 Amperes 4 The total number of cables connected to a single transformer connector shall not exceed four (4)cables. No single cable shall exceed 600 MCM in size whether copper or aluminum. The Board will make connection of all service and primary cables to Board-owned transformers. B. A single secondary service in excess of 1600 Amperes shall be installed using one of the two following methods. (1) A bus duct that is provided and installed by the Customer or developer. The Customer or developer must provide flexible secondary connectors with bus duct. The Board will make connection of the bus duct to the secondary of the transformer. (2) The Customer or developer shall purchase from the Board a multiple secondary termination cabinet. This cabinet is designed for use on single secondary services up to 3,000 Amperes and is provided for a fee as specified in Rule 15. The Customer or developer shall construct a concrete pad, supply and install their own cable and provide terminal lug for their supplied cables. The Board will make connection of the Customer's or developer's cable to the cabinet. 7. Conversion of Existing Overhead Electric Service At the request of a Customer, the Board will, if feasible, convert an existing overhead electric service to an underground electric service in accordance with Rule 10.3. 8. Electric Service Relocations and Removals At the request of a Customer, or as required due to a conflict, or to meet Board Standards, the Board will relocate or remove its electric service Facilities in accordance with Rule 10.4. ADOPTED: 7/22/03 r.T-rnn'rTI7r. 011 inn Dn—17 .4710 WATE® Lansing Board of Services IM Water and Light Electric Rule and Regulation 11 9. Second Service A. The Board will not construct at its own expense a second electric service to any facility, new or existing, that can be adequately served with a single source as determined by the Board. Except that a Second Service shall be required for Customers served from the Board's underground lead cable system and may require a nonrefundable contribution in aid of construction as determined by Rule 10.1.D. B. The Customer may have the additional service installed by making a nonrefundable contribution in aid of construction to the Board, in advance, to cover the entire cost of providing a Second Service. C. In the case of a request for a Second Service, the Board will endeavor, but does not guarantee, to maintain at all times two separate services to the Customer's facilities ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 33 of 39 WATER Lansing Board of Motors Im Water and Light Electric Rule and Regulation 12 Motors Customers shall be responsible to protect a motor that cannot have its rotation safely reversed or that would be damaged by phase or voltage failure in all phases by phase reversal and phase failure relays and/or low voltage relays. These protective devices should be wired to automatically disconnect and prevent restarting of motors until the problem has been corrected and service restored to normal. Conventional single phase motors may be connected to operate at 120 or 240 Volts subject to the following limitations: Maximum Allowable Locked- Nominal Motor Size Permissible Operating,Voltage Rotor Current 1/2 hp or less 120 50 Amperes hp to 3 hp 240 105 Amperes Over 3 hp 240 To be connected only with written permission of the Board All single phase motors should be connected by the Customer to operate at 240 Volts whenever practical to minimize voltage drop in the Customer's wiring and supply system. The Board may restrict both the individual and combined horsepower and locked rotor current of three phase motors installed in a Customer's facility. The Board may require the Customer to install reduced voltage starters, starting interlock systems, variable frequency drives, or other devices to reduce the locked rotor demands on the Board's electric distribution system. If the Board, in its sole discretion, determines that a larger sized transformer than what would normally be installed is required to supply the locked rotor currents, the Customer shall bear the added cost. Customers planning the use of three phase motors should consult the System Integrity & Customer Projects Department of the Board for characteristics, adequacy and availability of the service. ADOPTED: 7/22/03 r==-rTIM. 0/1 inn PaQP;d of;9 WATER Lansing Board of Use of Board Equipment so Water and Light Electric Rule and Regulation 13 Use of Board Equipment 1. General The Board's wires, poles and apparatus, together with any intercormections thereof, are the exclusive property of the Board, and the connection of a Customer's Premises thereto does not entitle the Customer to any use thereof, except as permitted by the Board and as necessary for the delivery of the Board's service to the Customer. The use of any part of the Board's distribution or Transmission System without prior Board approval is expressly prohibited. 2. Authorized Attachments The Board may enter into a Pole Attachment Agreement providing joint use of certain of its wood poles for the purposes of providing telephone, CATV or other telecommunications services. The use of any pole by anyone, without first having entered into a written agreement with the Board is prohibited. The Board may also issue revocable permits to any person(s) or organization(s), seeking to attach any wire, cable, facility or apparatus for the transmission of telecommunications. Upon application for permit,the applicant shall pay a nonrefundable application fee as stated in Rule 15. Application shall be made to the System Integrity&Customer Projects Department of the Board. Any reconstruction work necessary to accommodate the facilities of the applicant shall be done by the Board at the expense of the applicant. The annual pole rental fee shall be as stated in Rule 15. Poles found attached in the field without permission shall, at the Board's discretion, be removed in accordance with Rule 13.3.B or be subject to a minimum of three years retroactive billing. The Board may exclude or limit certain facilities from its poles. Furthermore, any poles that, in the opinion of the Board, are necessary for its sole use will be excluded from any pole attachment permit, joint use or rental agreements. 3. Unauthorized Use and Removal A. The unauthorized attachment (including painting or marking) of any signs, banners, lines, cables, equipment or any other matter to the Board's poles is prohibited. Authorization may be granted by the Board's General Manager or his designated representative based on purposes permitted by Michigan State law and requirements of governmental authority for the health, safety and welfare of the general public. B. The Board may remove or cause to be removed without notice any unauthorized foreign matter from its poles at the expense of the Customer,the person(s) attaching the unauthorized matter or, in the event neither can be identified, the individual, firm or organization which appears to be the primary sponsor, user or beneficiary of the unauthorized matter. The Board will observe reasonable precaution to prevent any damage resulting from such removal, but will not be liable for any damage thereto. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 35 of 39 WATER Lansing Board of Parallel Power Sources Water and Light Electric Rule and Regulation 14 Parallel Power Sources 1. General In order to provide for the safety of the Board's personnel and others and to assure reliability of electric service to all Customers, these requirements are established for operation of Customer generation in parallel with utility distribution systems. These requirements include all Customer systems under 100 kW. Systems 100 kW and over will be handled by the Board on an individual basis. All units over 10 kW must be three phase units unless specifically exempted. These requirements apply to both existing and proposed installations. 2. Approvals The Customer shall submit for Board approval, detailed electrical diagrams and equipment nameplate data, including the interface device and control systems of the Customer's power source. The completed installation must meet all local, state and national codes and is subject to inspection and test by the Board and local code enforcement authorities before commencement of parallel operation and such installation may be periodically inspected by the Board as required. The Customer shall obtain approval from the Board prior to making any revisions to the Customer's generating unit, its control systems or the interface between the two power systems after the initial installation. 3. Control and Protection The Customer's control and protection system must be acceptable to the Board. The Customer's system shall provide for automatic separation from the Board's distribution system in the event of a short circuit or open circuit on the Board's distribution system. The Customer's control system shall also provide for automatic paralleling with the Board's system when conditions are proper for parallel operation. Manual paralleling is not permitted without prior approval of the Board. Overfrequency, underfrequency, over voltage and under voltage control may be required. The Customer shall be liable for damage or injury if any part of the Customer's protective scheme fails to function due to lack of proper maintenance or Customer negligence. The Customer is required to install a disconnecting device with a visible break suitable for use as a protective tag location so as to be accessible by Board personnel or its agents and in reasonable close proximity to the billing meter. This device shall accept a standard Board padlock and shall be locate on the outside of all buildings. In no case shall the Customer tamper with or attempt to bypass the disconnect switch when the Board has locked it in the open position. 4. Operation Should the parallel operation of the Customer's generating source cause interference or affect voltage, frequency or harmonic content of the Board's system or of another Customer's service, the Customer shall discontinue parallel operation until the condition has been corrected. The Customer will be charged for all costs associated with any alteration of the Board's equipment required for proper operation of the Customer's generating equipment in parallel with the Board's system. The Customer will also be liable for costs of future changes due to safety or adverse effects on the Board's and/or other Customer's systems. ADOPTED: 7/22/03 FFFF('TTVF• R/1/n; Page 36 of 39 WATE- Lansing Board of Parallel Power Sources Water and Light Electric Rule and Regulation 14 5. Termination If the Customer does not meet all of the above requirements, the Board may require termination of parallel operation. Failure to terminate parallel operation when required shall be cause for the Board to interrupt electric service to the Customer. 6. Contract The Customer must sign a contract with the Board before commencing parallel operation. In signing the contract, the Customer shall, among other things, accept liability for any damages or injuries caused by the Customer's parallel operation. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 37 of 39 WATE® Lansing Board of Schedule of Fees & Charges goWater and Light Electric Rule and Regulation 15 Schedule of Fees & Charges ELECTRIC FEES and CHARGES Charge Description When Applied Charge Residential Underground When requested by Customer $3.50/ft Distribution Extension $7.00/ft for undeveloped lots Residential Underground Service When requested by Customer $4.50/ft Green space only, restoration not included. Installation $250 minimum requiring conduit,sidewalk crossing or other hindrances will be billed at time and material Commercial Underground When requested by Customer $7.00/ft Distribution Extension Commercial Underground Service When requested by Customer $6.50/ft Up to 400A and green space only,restoration not $570 minimum included. Transformer kVA Capacity Commercial or Industrial underground services $10/1cVA Current and Potential Transformer When requested by Customer, 600— 1000A $550 ea. Enclosure When requested by Customer,>1000A— 1200A $800 ea. When requested by Customer,>1200A—3000A $8,400 ea. Multiple secondary termination When requested by Customer,up to 3000A $8,000 ea. cabinet Secondary Service Termination Box BWL installed commercial services requested by $600 ea. customer with trough system up to 400 amp. Temporary service overhead Install&remove service drop, 100 ft max, does $300 ea. not exceed 400A Temporary service overhead Install&remove service drop, exceeds 100 ft, At cost 400A or not available Temporary underground When requested by Customer, $310 ea. (Normal) Connection&disconnection only April 1 —December 14 Temporary underground When requested by Customer, $470 ea. (Winter) Connection&disconnection only December 15—March 31 Secondary Riser Pole Charge When requested by Customer Residential up to 200 A $360 ea. Commercial up to 400 A $530 ea. Site Inspection When applicable $75 ea. ADOPTED: 7/22/03 FFRF('TTVF• R/1/f l page IR of 39 WATE- Lansing Board of Schedule of Fees & Charges Water and Light Electric Rule and Regulation 15 ELECTRIC FEES and CHARGES Charge Description When Applied Charge Joint Use and Third Party,make ready At cost Pole Attachment fees Annual fee $11 per attachment $220 minimum Application deposit, credited to make ready costs $20 per pole $390 minimum Joint Trench charges To other utilities $2.10/ft if 3 joint users $2.70/ft if 2 joint users $4.10/ft if 1 joint user Winter charge may also apply. Reconnection fee Non-pay(Normal hours) 7:30am—7:OOpm weekdays $25 Non-pay(Other than normal Holidays and other than normal hours $100 hours) Meter Tampering $100 Cut at Pole $100 Security Deposits—Residential Unacceptable Credit History—Normal credit risk $68 Deposits may be larger for higher than normal credit risk Security Deposits—Commercial& Unacceptable Credit History—Normal credit risk 1.5 times average Industrial Deposits may be larger for higher than normal monthly bill credit risk Rate 5 & 8 Meter Non-compliance For each month of non-compliance with meter $75/month Charge requirements Meter Calibration Charge When Customer requested meter calibration check $55 each is within plus or minus 2%accuracy Winter Construction Charge December 15—March 31 $6.40/ft In addition to normal charge Charges other than published Relocations,damages,etc. At Cost ADOPTED: 7/22/03 EFFECTIVE: 8/l/03 Page 39 of 39 .® ATTACHMENT C WATER&LIGHT Lansing Board of Im Water and Light Rules and Regulations For Water Service ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 WATEwATE® Lansing Board of Table of Contents Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions......................................... ......................................................4 ..................................................................... Applicationfor Service...............................................................................................................................................6 ServiceConditions......................................................................................................................................................7 Characterof Service..................................................................................................................................................7 Descriptionof Service ..............................................................................................................................................7 Availabilityof Service..........................................................................................................................................7 Agreements........................................................................................................................................................... 8 MaterialAvailability............................................................................................................................................. 8 Useof Service.............................................................................................................................................................. 9 General...................................................................................................................................................................... 9 Accessand Damages ................................................................................................................................................ 9 CustomerPiping and Equipment..............................................................................................................................9 WaterQuality and Disturbances............................................................................................................................. 10 ImproperUse and Tampering................................................................................................................................. 10 Metering.................................................................................................................................................................... 11 General.................................................................................................................................................................... 11 Sizing/Installation/Ownership....................................................................... .................... 11 ...................................... EquipmentLocation................................................................................................................................................ 11 MultipleOccupancy Buildings............................................................................................................................... 11 Damagedor Frozen Meter...................................................................................................................................... 12 Application of Rates ................... ........ 13 ...................................................................................................................... General.................................................................................................................................................................... 13 Resale...................... ..................... 13 ........................................................................................................................... Choice of Rates...................................................................... ............................ 13 ..................................................... Apartment Buildings and Multiple Dwelling Structures......................................................................................... 13 Billing..................................................................................................................................................................... 13 MinimumCharges.................................................................................................................................................. 14 Property Owner-Rental Agent Agreement for'Leave On'Service....................................................................... 14 Responsibilityfor Payment of Bills......................................................................................................................... 15 General.................................................................................................................................................................... 15 EstimatedConsumption.......................................................................................................................................... 15 BillingErrors.......................................................................................................................................................... 15 AccountSecurity Deposits...................................................................................................................................... 15 Dispute and Hearing Procedure.............................................................................................................................. 17 Disputes .................................................................................................................................................................. 17 Hearings.................................................................................................................................................................. 17 WaterCustomer Choice Program........................................................................................................................... 19 General.................................................................................................................................................................... 19 Contractor Qualification and Approval................................................................................................................... 19 ResidentialServices................................................................................................................................................ 19 Deposit for On-Site Water Mains and Large Services............................................................................................ 19 Permits.................................................................................................................................................................... 19 DistributionSystem Extensions...............................................................................................................................20 General....................................................................................................................................................................20 Request for Distribution System Extension........................................................................................................20 Ownership...........................................................................................................................................................20 Availability of Distribution System Extension...................................................................................................20 Contribution In Aid of Construction for System Extensions..............................................................................20 Installation of Distribution System Extension....................................................................................................21 Adequate Pressure and Flow Capacity................................................................................................................21 ADOPTED: 7/22/03 PPPP('rTVR- Q/1/!)'2 Pnae 2 of 32 WATE- Lansing Board of Table of Contents Water and Light Permits................................................................................................................................................................21 StakingRequirements.........................................................................................................................................22 FireHydrants......................................................................................................................................................22 Oversizing of Distribution System Extension.....................................................................................................22 Economic Development Considerations.............................................................................................................22 Easements...........................................................................................................................................................22 Non-Standard Equipment...................................................................................................................................23 Non-Standard Construction................................................................................................................................23 OtherFacilities....................................................................................................................................................23 Construction Date of Distribution System Extension.........................................................................................23 Water Facility Relocations and Removals..............................................................................................................23 Services......................................................................................................................................................................24 General....................................................................................................................................................................24 TemporaryWater Service.......................................................................................................................................24 DomesticWater Service.........................................................................................................................................24 General................................................................................................................................................................24 Customer Connections to Board Facilities..........................................................................................................25 Charges...............................................................................................................................................................25 FireService.............................................................................................................................................................25 General................................................................................................................................................................25 Charges...............................................................................................................................................................26 Lawn Sprinkler(Irrigation)Service........................................................................................................................26 Water Facility Relocations and Removals..............................................................................................................26 BoosterPumps..........................................................................................................................................................27 WaterStorage Facilities...........................................................................................................................................28 Cross—Connection.....................................................................................................................................................29 General....................................................................................................................................................................29 Installation of Backflow Prevention Devices..........................................................................................................29 Inspection and Maintenance of Backflow Prevention Devices............................................................................... 29 Compliance.............................................................................................................................................................29 SevereHazard Locations........................................................................................................................................29 SecondarySupplies.................................................................................................................................................30 Scheduleof Fees &Charges..................................................................................................................................... 31 ADOPTED: 7/22/03 RW'P1(rTTVR• S2/1/nq Paee 3 of 32 WATER Lansing Board of Definitions Water and Light Water Rule and Regulation 1 DEFINITIONS OF TERMS AND THEIl2 ABBREVIATIONS BOARD— When used in these Rules and Regulations, Board is an abbreviation meaning the Board of Water and Light. CUSTOMER— A purchaser of water service supplied by the Board or a governmental entity that authorizes the Board to provide water service. CUSTOMER PIPING —A piping system owned or controlled by the Customer that conveys water from the Service Location throughout the Customer's Premises. CUSTOMER WATER SERVICE—Those pipes, valves and appurtenances owned and maintauzed by the Board installed between a Water Main and Customer Piping. CROSS—CONNECTION — A physical interconnection, arrangement or condition of the Customer's plumbing through which the potable water fiirnished by the Board's Water Distribution System could become contaminated if backflow takes place. DEMAND— The rate of water delivered at a given point. DWELLING UNIT — A dwelling unit shall be considered as a single room, suite or groups of rooms or suites which have individual cooking and kitchen sink facilities designed for or used exclusively for residential purposes. FACILITIES— A general term which includes pipes, fittings, valves, fire hydrants, associated structures and the like, used as a part of or in connection with a water installation. FIRE SERVICE — Those pipes, valves, backflow devices and appurtenances installed from the Water Main to the Customer's Premises for the sole purpose of providing water for fire fighting on the served Premises. ON-SITE WATER MAINS—Water Mains installed on private property that will be located in easements or public right-of-way and owned and maintained by the Board. PRIVATE FIRE HYDRANT — The hydrant and appurtenances installed on Water Mains on private property to provide water primarily for fire fighting purposes. PUBLIC FIRE HYDRANT — The hydrant and appurtenances installed on Water Mains within public right-of-way to provide water primarily for fire fighting purposes. PREMISES— A building and its grounds. RATE— The unit prices as established by the Board's rate-making body and the quantities to which they apply as specified in the Rate Schedule. RATE SCHEDULE — A filed statement of the water Rate and the terns and conditions governing its application as established by the Board's rate-making body. SERVICE LOCATION—The point at which the Board has agreed to provide water service to Customer Piping. ADOPTED: 7/22/03 crrnmmTlm. 0]1 ins ll.,__A .,r27 WATER Lansing Board of Definitions Im Water and Light Water Rule and Regulation 1 SERVICE STUBS — That portion of a Customer Water Service that extends from the Water Main to a typical distance of 5 feet inside the property line. TRENCH— A cut in the ground in which pipes, etc. are installed. WATER DISTRIBUTION SYSTEM—The system of Water Mains, pipes, fittings, valves, fire hydrants and all equipment and appurtenances thereto, necessary to distribute water to Customer Water Services. WATER MAIN — A pipe owned and maintained by the Board installed in public right-of-way or easement that conveys water to a Customer Water Service or to a fire hydrant. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 5 of 32 WATEWATE-GHT Lansing Board of Application for Service IMWater and Light Water Rule and Regulation 2 Application for Service 1. General Copies of the Board's Rate Schedules for water service are open to public inspection at the Board's offices and are available on the Board's Internet Web site www.lbwl.com or upon request. Application for original, modified or added service shall be made at the office of the Board of Water and Light at 1232 Haco Drive,Lansing. Any Customer receiving or agreeing to receive water service from Board Facilities shall be deemed a Customer of the Board subject to its Rates and these Rules and Regulations and responsible for the service used whether such service is provided under a signed agreement or not. Water service will not be supplied to new or remodeled buildings until such installations comply CD with these Rules and Regulations. For water service requests that are greater than 2" in size, the Customer should contact the Board's System Integrity & Customer Projects Department to determine the characteristics of the water service available at the Premises, since adequate flow and/or pressure may not be available. The System Integrity & Customer Projects Department will inform the Customer of the Board's requirements, which must be fulfilled by the Customer, in order to receive water service. The Board may discontinue water service to any Customer for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. The Customer must pay a reconnection fee as stated in Rule 15 to cover the costs of restoring water service that has been discontinued for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. ADOPTED: 7/22/03 PP17]:f TT'U • R/l/M Paae 1i of T? WATER&LI� Lansing Board of Service Conditions Water and Light Water Rule and Regulation 3 Service Conditions 1. Character of Service The Board produces and distributes potable water, approved by the Michigan Department of Enviromnental Quality(MDEQ), for public use throughout its service area and will endeavor, but does not guarantee, to furnish a continuous supply and to maintain water pressure within reasonable limits. The Board shall not be liable for interruptions in the service including without limitation, variations in the service characteristics, or for any loss or damage of any kind or character occasioned thereby, due to causes or conditions beyond the Board's reasonable control, and such causes or conditions shall be deemed to specifically include, but not be limited to, the following: acts or omissions of Customers or third parties; operation of safety devices except when such operation is caused by the negligence of the Board; absence of an alternate supply of service; failure, malfunction, breakage, necessary repairs or inspection of machinery, Facilities or equipment when the Board has carried on a program of maintenance consistent with the general standards prevailing in the industry; act of God; war; action of the elements; storm or flood; fire; riot; sabotage; labor dispute or disturbance, or the exercise of authority or regulation by governmental or military authorities. Notwithstanding any other provision of these rules,the Board may interrupt or limit water service to Customers without prior notice and in a manner that appears most equitable under the circumstances then prevailing or as necessary to protect the health, safety and welfare of its employees or Customers. The Board shall be under no liability with respect to any such interruption or limited supply. 2. Description of Service A. Availability of Service (1) Water service is provided to Customers in the City of Lansing and several surrounding governmental entities. Service to the surrounding governmental entities is by contractual agreement. (2) The Board, at its discretion, may provide service to individual Customers outside its service area with the approval of the local governmental entity. (3) Water service may be made available to Premises that has frontage on a public right- of-way. The Board, at its discretion, may install Water Mains and Customer Water Services in easements. (4) Water service is not available where the Board must bring the Customer Water Service across another parcel or lot without an easement in order to provide service. (5) In the case where there is more than one Water Main capable of providing service, the Board shall determine which Water Main will be used for service and the location of the Customer Water Service connection. (6) Water service is available in sizes one inch (1") and larger. The Board will evaluate service sizes two inches (2") and larger before installation to determine the adequacy of water supply and pressure. Inquiries regarding adequacy of water supply and pressure should be directed to the Board's System Integrity & Customer Projects Department. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 7 of 32 WATE® Lansing Board of Service Conditions Water and Light Water Rule and Regulation 3 B. Agreements The Board shall require the Customer to enter into a written agreement that details the terns and conditions and price to be paid by the Customer prior to water service construction. In addition,the Board may negotiate written contractual arrangements as to the provision of necessary service Facilities, duration of service, amount of deposit and refunds thereon, minimum bills or other service conditions for Customers or prospective Customers whose load requirements exceed the capacity of the available distribution system in the area or whose load characteristics or special service needs require unusual investments by the Board in service Facilities or where there is not adequate assurance of the permanent use of the service. No promises, agreements or representations of any agent or employee of the Board shall be of binding force upon the Board unless the same is within the authority of that individual and incorporated in the written agreement. C. Material Availability Subject to the restrictions contained in Rule 3.2.A, the Board will construct water distribution Facilities and extensions only in the event it is able to obtain or use the necessary materials, equipment and supplies. The Board may, in its discretion, allocate the use of such materials, equipment and supplies among the various classes of Customers and prospective Customers of the same class. ADOPTED: 7/22/03 ����rrT���• Qn inz Pave 9 of;� WATER&L� Lansing Board of Use of Service Water and Light Water Rule and Regulation 4 Use of Service 1. General Potable water is supplied to a Customer for exclusive use on the Premises to which it is delivered by the Board. Service may not be shared with another, sold to another, or transmitted off the Premises without the written permission of the Board, except as noted in Rule 6. Use of water is only for the purposes authorized by the Board and is not to be extended to another building without authorization of the Board. No person except authorized Fire Department personnel, Director of Public Service, and such other people as determined by the Board shall operate and/or take water from fire hydrant, Fire Service, or any other unmetered connection. 2. Access and Damages The Customer shall provide and maintain appropriate access and working space around water Facilities in accordance with all applicable Board standards so as to permit ready and safe operation and maintenance of such Facilities. The Board's authorized persomnel or agents of the Board shall have access to the Customer's Premises at all reasonable hours for all purposes necessary to conduct business, including without limitation: 1) install, inspect, read, repair, maintain, test or remove its meters 2) install, operate and maintain other Board equipment or Facilities, and 3) inspect Fire Service installations, Customer Piping, backflow devices and to determine the connected water Demand. If the meters, metering equipment or other Board property are damaged or destroyed through the neglect of the Customer, the cost of necessary repairs or replacements shall be the responsibility of the Customer. If, for any reason beyond its control, the Board is unable to read a meter, operate, maintain or make inspection, including but not limited to, reasons such as Premises being locked, meter being inaccessible or unsafe conditions, then after due written notice to the Customer, the water service may be disconnected until such time as arrangements have been made to permit access for Board inspection and approval and the Customer has paid the appropriate reconnection fee as stated in Rule 15. 3. Customer Piping and Equipment The Board may deny or terminate service to any Customer whose water piping or equipment constitutes a hazard to the Board's employees, equipment or its service to others. However, the Board is not responsible to inspect the Customer's piping or equipment and shall not be held liable for any injury or damage resulting from the condition thereof. The Customer shall install and maintain the necessary facilities or devices to protect Customer owned equipment against service interruptions and other disturbances on the Board's system. The Customer shall install a valve on the outlet of the meter-set and shall maintain it in good repair. Alterations to the Customer Water Service or associated equipment are prohibited without approval of the Board. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 9 of 32 WATE'�&LIGHT Lansing Board of Use of Service Water and Light Water Rule and Regulation 4 4. Water Quality and Disturbances The Customer shall operate equipment in a manner that does not cause surges, water hammer or other problems in the Water Distribution System or to other Customers. If the Board notifies the Customer of such a condition, the Customer shall discontinue operation of equipment causing such condition until a correction has been made. The Customer shall be responsible for the cost of installation, testing and maintenance of backflow prevention equipment necessary to prevent contamination of the Water Distribution System as required by the Board. 5. Improper Use and Tampering Any person that uses water without making proper application for water service shall be responsible for all charges for water service. The amount of such charges shall be determined by the Board either by meter readings or on the basis of calculated consumption for the time water was used. If water is being used by a Customer without proper application for service or water service connection, the Board may discontinue service without notice. In case of such discontinuance of service, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 15 The Board may discontinue service and seek criminal charges, if it is determined that the meter or piping on the Customer's Premises has been tampered with or altered in any manner to steal water. If the Board discontinues service for this reason, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 15, made appropriate restitution for stolen service and made provisions for metering and/or piping changes as may be required by the Board. ADOPTED: 7/22/03 F.FFF(.TTVF- R/1/01 Paoe 10 of 32 WATE® Lansing Board of Metering Water and Light Water Rule and Regulation 5 Metering 1. General All water sold to Customers shall be measured by commercially acceptable measuring devices owned and maintained by the Board except where it is impractical to meter, such as for fire fighting, temporary or special installation, in which cases the consumption may be calculated. 2. Sizing/Installation/Ownership The Board shall furnish, install, own and maintain all metering equipment and reserves the right to size such metering equipment. 3. Equipment Location A. The Customer shall provide, at no expense to the Board, a space/enclosure suitable to the Board for the installation of the necessary metering equipment. The Customer shall furnish the space and the provisions for mounting metering and service equipment to meet Board requirements. Inquiries regarding installation requirements should be directed to the Board's System Integrity&Customer Projects Department. B. Wherever possible, metering equipment should be located inside the building served and as near as practicable to the point where the Customer Water Service enters the building. C. The space provided must have adequate ventilation and sufficient heat to prevent freezing of the meter and associated piping. A clear overhead space of at least six feet (6') shall be provided. A floor drain of adequate capacity must be provided adjacent to the meter except where the Board has deemed it to be impractical to provide such drain. D. Where an approved location is not available inside the building, the meter shall be located in a meter manhole at or near the property line, and the cost thereof shall be the responsibility of the Customer. 4. Multiple Occupancy Buildings Where the building owner desires to meter each tenant's water separately, a meter manifold may be permitted when the following conditions are met. A. An adequately sized room is made available by the owner for housing the water meters. The meter room shall be of sufficient size for access and provided with a door which can be fitted with an approved lock box; and B. Access to the meter area is by way of a common-use space; and C. The building owner attaches a tag to the valve on the outlet side of the meter identifying the number and/or address of the unit served; and D. The building owner installs a valve on the outlet of each meter-set and E. The building owner installs a valve at the point where each water supply line enters the apartment or unit served; and F. Each meter serves only one apartment or unit, with no interconnecting piping between each apartment or unit. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 11 of 32 WATER R - Lansing Board of Metering Water and Light Water Rule and Regulation 5 5. Damaged or Frozen Meter The Customer shall be held liable for damage to the meter from acts of carelessness, negligence, or willful damage by owner or his tenants. The Board will repair any meter so damaged, and the cost shall be billed to the Customer. The Board may, after an occurrence of a frozen meter, charge the customer for the replacement of a frozen meter as provided in Rule 15. ADOPTED: 7/22/03 P17r`T7r1•rT%M- ail M1 PaoP 1? of l7 WATE® Lansing Board of Application of Rates Water and Light Water Rule and Regulation 6 Application of Rates 1. General: Water Rates are predicated upon the Board not being required to provide more than one Customer Water Service to a building or structure. The Board shall separately meter and separately bill service at different points or at different buildings or structures unless specifically provided for in the applicable Rate Schedule. 2. Resale: The owner or operator of an office building, apartment building, shopping mall, or similar structure may purchase water from the Board for resale to occupants on the condition that service to each occupant shall be metered separately and that the occupants may not be charged more for such service than the appropriate Rate of the Board available for similar service under like conditions. In order to qualify for resale to occupants, the owner or operator must state their intent to resell in the application for service. The renting of Premises with the cost of water service included in the rental as an incident of tenancy will not be considered a resale of such service. 3. Choice of Rates: In some cases, the Customer may be eligible to take service under any one of two or more Rates. Upon request, the Board will advise the Customer in the selection of the Rate that will provide the lowest cost of service, based on the best available information, but the responsibility for the selection of the Rate shall be the sole responsibility of the Customer. After the Customer has selected a Rate, the Customer may not change from that Rate to another Rate until at least twelve (12) months have elapsed. The Customer shall not evade this rule by temporarily terminating service. The Board may waive the provisions of this paragraph where it appears that a change of the Rate is necessary for permanent rather than temporary or seasonal advantage. The intent of this rule is to prevent frequent changes from Rate to Rate. The Board shall not be responsible to refund the difference in charges under different Rates applicable to the same class of service, unless the Board provided an incorrect initial service turn- on Rate setting or unless the Customer makes a written request and has a permanent change in load _ profile. Any refund is subject to Board approval. 4. Apartment Buildings and Multiple Dwelling Structures: An apartment building or multiple dwelling structure served by one meter and containing four (4) or less Dwelling Units may elect to be billed on the appropriate Residential Service Rate. 5. Billing: Customers having more than one meter shall have consumption computed by individual meter in accordance with the current Rate Schedule, with the exception of separate meters connected to the Customer Water Service and installed solely for lawn sprinkling. Lawn sprinkling meters connected to the Customer Water Service are subject to the Lawn Sprinkling Water Service Rate. ADOPTED: 7/22/03 FFFFCTTVF.- 9/1/03 Page 13 of 32 WATER Lansing Board of Application of Rates go Water and Light Water Rule and Regulation 6 6. Minimum Charges: A minimum charge, as defined by the Rate in effect, shall be applied to all services and billed to the Customer. Where the Customer requests that a service be discontinued, the Board shall deactivate the service by any appropriate means, including without limitation, removing the meter and/or by disconnecting the service from the Board's Water Distribution System. 7. Property Owner-Rental Agent Agreement for"Leave On" Service: The BWL may waive application charges to maintain continuity of service at rental property locations provided: (1) the landlord agrees in writing to assume the responsibility for water service during the interim between tenants, and (2) the landlord is in compliance with all other rules and regulations of the Board. ADOPTED: 7/22/03 PPPP('TTVP• R/11n' Page 14 of 32 WATE- Lansing Board of Responsibility for Payment of Bills Water and Light Water Rule and Regulation 7 Responsibility for Payment of Bills 1. General Each Board Customer is responsible to pay all utility bills as rendered on or before the due date shown thereon. The Customer remains responsible for payment of the bills until the Customer orders service to be discontinued and the Board has had reasonable time to secure a final meter reading. Bills are rendered on approximately a monthly basis. Bills are mailed to Customers approximately fifteen (15) days before the due date shown on the bill. The Customer shall pay the net amount if paid on or before the due date on the bill. Failure on the part of the Customer, through no fault of the Board, to receive the bill shall not entitle the Customer to pay the net amount after the due date of the bill. If a bill remains unpaid after issuing a five (5) day written shut-off notice, the Board shall have the right to discontinue service. In extenuating circumstances, a Customer will be afforded the opportunity to make payment arrangements. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not in dispute. 2. Estimated Consumption Readings may be estimated when conditions warrant. Until reconciled by an actual reading, bills rendered on estimated consumption have the same force and effect as bills rendered on actual meter readings. 3. Billing Errors When an error is found to exist in the billing rendered to a Customer, the Board will correct such error to recover or refund the difference between the original billing and the corrected billing. Corrected billings will not be rendered for periods in excess of three (3)years. Refunds to Customers will normally be made promptly upon discovery of the error. Amounts due the Board from the Customer will be subject to normal collection policy and procedures. 4. Account Security Deposits The Board shall require an account security deposit from any new or existing Customer with an unacceptable credit history. The Board may apply different rules to new Customers signing up for service in accordance with Rule 7A.C. The deposit is normally 1.5 times the average monthly bill (actual or estimated) as determined by the Board. If a deposit is required for new residential Customers, the Board shall determine the amount in accordance with Rule 15. To determine the deposit for new commercial and industrial Customers, the Board will estimate the average monthly bill and apply the 1.5 factor. The Board may waive deposits in special circumstances. The Board may also demand deposits larger than 1.5 times the average monthly bill if the Board determines that a Customer presents a higher than normal credit risk. The Board will refund deposits to all Customers who have taken service for 12 months and have an acceptable payment history. The Board will also refund deposits to Customers who have terminated service and paid all charges due. ADOPTED: 7/22/03 F,FFFCTIVE: 8/1/03 Page 15 of'2 WATER&L Lansing Board of Responsibility for Payment of Bills Water and Light Water Rule and Regulation 7 A. A security deposit may be required in any of the following circumstances: (1) The Customer has deliberately misinfonned or misrepresented facts to the Board. (2) The Customer has tampered with the meter during the last 12 months. (3) The Customer has had one or more payments canceled in the last 12 months due to: (1) non- sufficient funds returned check, (2) account closed returned check, (3) non-sufficient funds bank bill, (4) account closed bank bill, or(5) credit card reversal. (4) The Customer has received a final notice on any account within the last 12 months. (5) The Customer has received more than 3 second notices on any account during the last 12 months. (6) The Customer has a past due balance on any account that is greater than $50.00 for more than 31 days past due in the past 12 months. (7) The Customer has a suspended or bad debt account within the last 12 months. B. If the Customer is applying for service through an artificial legal entity such as a corporation, or limited partnership,then the Board may request a deposit or other security of payment. C. New Customers will not be required to submit a deposit, in any of the following situations: (1) The Customer has no previous service history with the Board. (2) The Customer has previously established an acceptable payment history with the Board on a similar account. (3) The Customer's bill is paid by the State of Michigan. (4) The Customer secures a guarantor with a similar account and an acceptable payment history. (5) The Customer provides an acceptable surety bond. (6) The Customer provides an acceptable credit reference letter from a similar utility company for a similar account. Account must have been in the Customer's name and maintained for a minimum of 12 consecutive months. (7) The Customer has established an acceptable credit rating with a credit-reporting agency. ADOPTED: 7/22/03 'QTRL' f—rTAM. Q/1 R12 Pa 1(,of',') WATER Lansing Board of Dispute and Hearing Procedure Water and Light Water Rule and Regulation 8 Dispute and Hearing Procedure 1. Disputes In accordance with the Lansing City Charter, the Board is required to provide a fair and equitable dispute and hearing process for its Customers as follows: A. When any Customer disputes a bill or service and the Board is so advised, the date of the notice of dispute will be recorded. B. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not disputed. C. The disputed bill or service will be investigated promptly and completely. D. The Customer will be advised of the results of the investigation. E. An attempt will be made to resolve the dispute in a manner mutually satisfactory to both parties. F. The Board will provide the opportunity for each Customer to enter into a reasonable settlement agreement in order to mutually resolve the disputed claim or to satisfy any liability not in dispute. G. If a settlement cannot be reached between the Customer and the Board's Account Administrator, the Customer may choose to appear before the Board's Dispute Review Committee. The review will be scheduled within ten (10) days of the request or as mutually agreed to by both parties. H. If a settlement cannot be reached following examination by the Dispute Review Committee, the account will be referred to the Board's General Manager. I. If a settlement is not reached after review by the Board's General Manager,the Customer shall be afforded an opportunity for a hearing. J. The Customer shall be responsible for payment of all other bills or portions of bills as rendered which are not in dispute. 2. Hearings A. Any Customer who disputes the services provided or a billing for services firnished ul accordance with the Board's filed Rates, Rules and Regulations or established policies or procedures may request a hearing. If a hearing requested is based on a disputed past due bill, the request must be made within ten (10) calendar days following the final outcome of the dispute process. Any request for a hearing may be made in writing and received by the Board's corporate office at 1232 Haco Drive,Lansing, Michigan, 48912. B. On receipt of a request for a hearing, the Board will forward this request to an independent Hearing Officer. The Hearing Officer will arrange a time for the hearing and advise both the Customer and the Board of the date, time and location in writing. The hearing will be scheduled during normal business hours. Failure of the Customer or Board to attend the hearing without due cause or prior request for adjournment will constitute a waiver of right of that party to the hearing. C. The Board and the Customer shall: (1) Have the right to be represented by Counsel or other persons of their choice. (2) Have the right to present evidence,testimony and oral and written argument. (3) Have the right to cross-examine witnesses appearing on behalf of the other party. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 17 of 32 WATE® Lansing Board of Dispute and Hearing Procedure Water and Light Water Rule and Regulation 8 (4) Have the right to have the hearing recorded by a court reporter at the expense of the Customer. The Hearing Officer shall also have the right to have the hearing recorded by a court reporter. Recordings will be preserved at least six (6) months from the date of the hearing. All evidence relevant to the dispute will be received. D. For each hearing, the Hearing Officer shall compile a hearing record which will contain; (1) A concise statement in writing of the position of the Board in relation to the dispute. (2) A concise statement in writing of the position of the Customer in the dispute. (3) Copies of all evidence submitted by the parties. E. If a decision is reached during the hearing, the Hearing Officer shall state the decision to both parties. If the Hearing Officer does not reach a decision during the hearing, additional time will be allowed to reach a decision. When a decision has been reached, either at the hearing or later, the Hearing Officer will prepare a report which shall contain the following: (1) A concise summary of the evidence and argument presented by the parties. (2) The decision and a statement that the decision of the Hearing Officer was based solely on the evidence presented and reasons therefore. (3) Advise that the representatives of the Board and the Customer have a right to file an appeal with the Board of Commissioners. (4) A statement as to any settlement agreement. (5) A statement that the dispute determination is binding on both parties unless appealed to the Board of Commissioners within ten(10) days of the date of mailing of decision, and that any request for appeal must be in writing to the Corporate Secretary. F. The Hearing Officer shall file the written report with the Board of Commissioners and the Mayor of the City of Lansing. A copy of the report shall be sent to the Customer via certified mail. G. If the dispute is unresolved and the decision appealed, the Hearing Officer shall make recommendations to the Board of Commissioners on the dispute. The Secretary of the Board will arrange a time for the appeal and advise both the Customer and the Board of the date, time and location in writing. Failure of the Customer to appear at the time set for the appeal without due cause, or to request an alternate date, will constitute a waiver of right to appeal. H. The Board of Commissioners shall report its final action on any unresolved disputes together with the Hearing Officer's report and recommendations to the Mayor and the City Council of Lansing, Michigan. I. The Mayor may make recommendations to the Board of Commissioners on each unresolved dispute. ADOPTED: 7/22/03 L'L'rUOrTTl 7L. 0/1 ins panes 1 A of 2) WATE® Lansing Board of Water Customer Choice Program Water and Light Water Rule and Regulation 9 Water Customer Choice Program 1. General The Board will accept and permit Customer installation of Customer Water Service(s), except metering equipment, and On-Site Water Mains, provided the following conditions are met. (1) The Board has approved the Customer's contractor prior to construction. (2) The Customer has signed, and complied with, a Water Customer Choice agreement with the Board prior to construction. (3) The Customer has provided, and the Board has approved drawings, material lists and a flushing and disinfection plan. (4) The Customer has paid any and all past and current applicable fees and charges. (5) The installation of Customer Water Service(s) and/or On-Site Water Mains has been inspected and approved by the Board. (6) Customer has dedicated Customer Water Service(s) and/or On-Site Water Mains to the Board. Inquiries regarding the Water Customer Choice Program should be directed to the Board's System Integrity&Customer Projects Department. 2. Contractor Qualification and Approval Contractors desiring to become qualified and approved to install On-Site Water Mains and Customer Water Services should contact the Material Services Management Resource Center. A charge for the initial Permit Application and an Annual Contractor's Qualification Permit shall be assessed as stated in Rule 15. 3. Residential Services Customers installing residential water services shall be required to pay an "Inspection" charge for each inspection. 4. Deposit for On-Site Water Mains and Large Services A deposit shall be required for any Customer desiring to install On-Site Water Mains or Customer Water Services 2"and larger. The amount of such deposit shall be as stated in Rule 15. Upon project completion, the deposit shall be adjusted to reflect the actual Board cost with a final billing or refund made to the Customer. 5. Permits The Board will obtain the MDEQ Permit For Water System Construction. The Customer shall be required to obtain all other permits. ADOPTED: 7/22/03 FFFF(TTVF R/1/(1 i Page 19 of 32 WATER Lansing Board of Distribution System Extensions IM Water and Light Water Rule and Regulation 10 Distribution System Extensions 1. General: A. Request for Distribution System Extension Rule 10 sets forth the conditions under which the Board will extend its Water Distribution System. B. Ownership The Board shall provide, own, maintain and specify all of its distribution Facilities including location, except as otherwise expressly provided by agreement between the Board and the governmental entity or Rule 9, "Water Customer Choice Program". No ownership rights to Board Facilities shall pass to any owner(s), developer(s), or Customer(s)by reason of any contribution required hereunder. C. Availability of Distribution System Extension The Board shall in its sole discretion detennine whether or not any particular Water Distribution System extension shall be made, regardless of its intended use, and establish any special conditions or requirements that may apply, including but not limited to entering into an agreement with a developer, property owner(s) or governmental entity. Water Distribution System extensions are generally available throughout the water service area. Water Distribution System extensions may also be available outside the water service area to serve individual Customers. Water Distribution System extensions outside the service area shall be installed at the Board's discretion, and only with the approval of the local governing entity. D. Contribution In Aid of Construction for System Extensions The owner(s), developer(s), governmental entity(s) or Customer shall be required to make a contribution in aid of construction to the Board to cover the cost of the Water Distribution System extension except as provided otherwise by agreement between the Board and the governmental entity or in Rule 9 "Water Customer Choice Program". The contribution in aid of construction to the Board for Water Distribution System extensions shall, at the Board's option, be of the following: (1) At cost—The Customer will provide a deposit based on the Board's estimated cost to construct the Water Distribution System extension. A reconciliation between the deposit and actual cost will be made upon project conclusion. (2) Not-to-exceed — The Customer will provide a deposit based on the Board's estimated cost to construct the Water Distribution System extension. If the actual cost to construct the Water Distribution System extension is less than the deposit, the Board will refund the difference upon project conclusion. (3) Firm Price—The Customer will provide a one-time payment based on the Board's estimated cost to construct the system extension. No reconciliation or refund will. be made upon project conclusion. The owner(s), developer(s), governmental entity(s) or Customer may be responsible for additional costs as required by this Rule 10.1. ADOPTED: 7/22/03 EFFECTTVF• 9/1/01 WATE- Lansing Board of Distribution System Extensions Water and Light Water Rule and Regulation 10 E. Installation of Distribution System Extension All Water Distribution System extensions shall be installed by the Board or its agent except as provided in Rule 9 "Water Customer Choice Program". Water Distribution System extensions shall be installed in public right-of-way except in certain cases where, at the Board's discretion, they may be installed in dedicated recordable easements on private property provided at no cost to the Board. Water Distribution System extensions shall traverse the total frontage of all property served and all streets within a new subdivision. The Board, in its sole discretion, may exempt side-lot streets where a Water Main is not required either to provide service or to provide proper system flow and pressure. Service Stubs shall be installed in conjunction with the Water Distribution System extension except in certain cases as determined by the Board. The Customer shall provide the Board a final preliminary approved site plan for Board review and approval. Installation of a Water Distribution System extension will be initiated provided: (1) The owner, developer, governmental entity, or Customer has entered into a written agreement with the Board for the construction of the Water Distribution System extension. (2) The owner, developer, governmental entity, or Customer has paid the cost of the Water Distribution System extension and any required system reinforcement in a manner as determined by the Board or has fulfilled the commitments as otherwise provided by agreement between the Board and the governmental entity. (3) Where applicable, the owner, developer, or Customer has recorded the plat or final preliminary approval has been received, monuments or markers are in place, lot lines staked, sewers installed, streets at finished grade (before gravel and curb and gutter installation), sidewalk grading completed, and the ground in workable condition. (4) Construction during the winter season will only occur at the Board's discretion. F. Adequate Pressure and Flow Capacity The Board shall not make Water Distribution System extensions unless adequate pressure and flow capacity is available at the location of the Water Distribution System extensions as determined by the Board. Where a Water Distribution System reinforcement is required to provide adequate pressure and flow capacity at the location of the Water Distribution System extension, the Customer, governmental entity or other benefiting parties shall bear the cost of such Water Distribution System reinforcement. G. Permits All permits will be obtained by the Board or its agent, except as provided in Rule 9"Water Customer Choice Program", before construction is initiated. ADOPTED: 7/22/03 FFFF.C'.TTVF• VIM, Page 21 of 32 WATER L- Lansing Board of Distribution System Extensions Water and Light Water Rule and Regulation 10 H. Staking Requirements The Customer shall provide all staking as required by the Board for installation of the Water Distribution System extension. Inquires regarding staking requirements should be directed to the Board's System Integrity&Customer Projects Department. I. Fire Hydrants Water Distribution System extensions shall include fire hydrant coverage as determined by the Board or governmental entity. J. Oversizing of Distribution System Extension To meet the needs of existing and future Customers within the governmental area(s), the Board may choose to install a larger size Water Main than that needed for the Water Distribution System extension. In such cases, the cost of oversizing shall be borne by the benefiting governmental entity(s) or as provided for in the agreements between the Board and the governmental entity(s). ID Where the Board has determined that oversizing of a Water Main is needed for its own purposes,the Board shall be responsible for the cost of such oversizing. K. Economic Development Considerations Where the Board determines that the Water Distribution System extension will promote development that provides substantial and sustainable economic benefits to its Customers or the Lansing region, the Board will consider an offset to its fees and charges and/or an economic incentive subject to its availability. Where a Customer has obtained an approved Lansing Brownfield Plan and entered into a Brownfield Reimbursement Agreement with the Lansing Brownfield Redevelopment Authority (LBRA), The Board, subject to agreement with the LBRA, may seek reimbursement for its Water System Connection Fee (Rate 3 of the Board's Rate Schedule) directly from the LBRA. In the event the Board is not reimbursed for its Water System Connection Fee from the LBRA, the Customer shall be required to pay the remaining amount due. L. Easements Where the Board has agreed to construct the Water Distribution System extension in an easement and prior to such construction, the owner(s), developer(s) or Customer(s) shall be required to fiimish, at no expense to the Board, recordable easements in a form satisfactory to the Board. The easement shall grant right-of-ways suitable for the ingress, egress and the installation and maintenance of the Water Distribution System extension including any Water Distribution System equipment as designed by the Board for present and future service. In the event the required easements are not provided by the owner(s), developer(s) or Customer(s) for such extension, the Board may elect to construct all or any part thereof along public highways or other private property. In such event,the Board may require the owner(s), developer(s) or Customer(s) to pay the added construction expense occasioned by the use of such highways or other private property, plus any expense encountered in acquiring permits and easements on other private property when necessary to provide service to the owner(s), developer(s) or Customer(s). ADOPTED: 7/22/03 1~T.'T'1~'('TT�71r• 0/11n1l Dann'Y) -4721 WATER&L� Lansing Board of Distribution System Extensions Water and Light Water Rule and Regulation 10 M. Non-Standard Equipment Where the Customer requests that the Board utilize equipment which differs from its normal specifications, purchased or installed, the Board may elect to provide such non- standard equipment with the Customer paying any additional cost. N. Non-Standard Construction Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. O. Other Facilities It will be the responsibility of the owner(s), developer(s) or Customer(s) to identify and provide locations of any existing privately owned underground facilities such as lawn sprinkler systems, field drainage systems, septic tanks, Customer owned electric lines, etc. If privately owned facilities are not properly located, the Board does not assume responsibility for any damage to these facilities. P. Construction Date of Distribution System Extension The Board will, based on availability of work crews and material, and subject to approvals of the appropriate regulatory agencies, utilize best efforts in constructing the Water Distribution System extension to meet a mutually agreed upon date or as required by agreement between the Board and the governmental entity. 2. Water Facility Relocations and Removals: (1) At the request of a Customer or developer, or as required due to a conflict, or to meet Board Standards, the Board will relocate or remove its water facilities provided: A. The relocation or removal is feasible and meets Board Standards. B. The Customer or developer obtains approval from all Customers impacted by the proposed relocation. C. The relocation or removal does not degrade water reliability or quality. D. All governmental approvals,permits and easements are obtained Prior to any relocation or removal of water Facilities,the Customer or developer shall be required to make a nonrefundable contribution in aid of construction. The aid in contribution of construction shall reimburse the Board for all relocation and removal costs including material, labor, the cost of breaking and repairing streets, walks, parking lots, driveways, etc., repairing lawns, replacing shrubs, flowers, etc., and any right-of-way costs as per this Rule 10, plus the cost of any necessary modifications to the Board's Water Distribution System affected by the relocation or removal, less the salvage value of any portion of the water Facilities removed. (2) If, at any time subsequent to completion of the Water Distribution System extension, it is found that Water Mains or related Facilities are not at the correct location or at the proper elevation due to changes beyond the control of the Board, the Customer or developer shall reimburse the Board to relocate Water Mains or related Facilities to the correct location or at the proper elevation. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 23 of'2 WATE'&LIGHT Lansing Board of Services Water and Light Water Rule and Regulation 11 Services 1. General: The Customer Water Service shall be furnished, installed, owned and maintained by the Board except as otherwise provided in Rule 9 "Water Customer Choice Program". In the course of maintaining or repairing a Customer Water Service, the Board shall bear no responsibility for damage incurred or restoration to areas where the Customer Water Service passes under any area not readily accessible. The Customer shall be responsible for additional repair costs due to these encumbered services. The Service Location shall be specified by the Board and shall be located so that the Board's service Facilities meet or exceed all clearance requirements and applicable local codes. Should it become necessary for any cause beyond the Board's control to change the Service Location, the entire cost of any changes in the Customer's service shall be the responsibility of the Customer. Should it become necessary for the Board to reinforce or upgrade the Water Distribution System to accommodate the requested service, a nonrefundable contribution in aid of construction shall be required as determined by Rule 10.I I.D. 2. Temporary Water Service Temporary water service is available to contractors and others for construction activities, sewer flushing, bulk tanker fill, pool fills, etc. The charge for such temporary water services shall be as specified in Rule 15. 3. Domestic Water Service: A. General Water service other than that used for irrigation and fire-fighting purposes is considered domestic service. It shall be the Customer's responsibility to determine the correct pipe size for the Customer Water Service prior to making application. Plans shall be submitted to the Board's System Integrity & Customer Projects Department for services larger than two inches (2") or unusual connections. Customer Water Services shall be installed from the Water Main to the Customer's building in the most direct manner. The pipe comprising the connection shall cross only that legally described property upon which the building to be serviced is located. It is the intent of the Board that all underground water pipes be installed and maintained by the Board. However, where unusual or special circumstances exist or as allowed by Rule 9 "Water Customer Choice Program", the Customer may request approval to install underground water pipes. Applicants shall submit plans and specifications to the Board's System Integrity & Customer Projects Department for approval prior to installation. No person other than an authorized employee or agent of the Board shall open or close the outside valve (curb stop) on the Customer Water Service. No person except an authorized Board employee, agent of the Board or as allowed by Rule 9 "Water Customer Choice Program" shall tap, revamp or connect to a Water Main or any of the pipes comprising the Customer Water Service. ADOPTED: 7/22/03 nUVrr•rrvU• Qii rn'2 Page 24 of 32 WATER Lansing Board of Services Water and Light Water Rule and Regulation 11 B. Customer Connections to Board Facilities It shall be the Customer's responsibility to connect his plumbing to the Customer Water Service or meter-set installed by the Board. All work shall be in full compliance with all applicable plumbing codes. Where the water meter-set is installed inside, the Customer shall connect by first installing a valve at the outlet of the meter-set. Where it is required that the meter-set be installed outside in a meter pit, the Customer shall connect at the outlet of the shut-off valve installed by the Board. No connection to the Customer Water Service shall be allowed except at the outlet side of the meter-set. C. Charges For standard installations, the Customer shall pay a "Water Service" charge for the cost of the Customer Water Service installation in accordance with.Rule 15 in a manner as determined by the Board. Where a water service connection is made from a Water Main subject to a "Front Footage Recovery" charge, such charge shall be as stated in Rule 15. All new Customer Water Service connections made to Water Mains shall be subject to a System Connection Fee in accordance with Rate 3 of the Board's Water Rate Schedules and any applicable charges contained in agreements between the Board and the governmental entity. Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. Where it is necessary for installation of a Customer Water Service to be scheduled during the "Winter Construction Period" as defined in Rule 15, the Customer may be required to pay a "Winter Constriction Charge"as established therein. The Customer shall be responsible for additional repair costs due to encumbered Customer Water Services or damage as a result of negligence, willful damage or carelessness by the Customer, owner or tenants. 4. Fire Service: A. General The Board will provide water service for the sole purpose of providing direct fire protection. This service may include but is not limited to: (1) Public Fire Hydrants (2) Private Fire Hydrants (Board owned hydrants on private property) (3) Connection to fire sprinkler systems The Board owns and maintains all hydrants and all Fire Services up to the point of entry to the Customer's building. ADOPTED: 7/22/03 WATER Lansing Board of Services a __..- Water and Light Water Rule and Regulation 11 An approved backflow prevention device shall be installed on the Fire Service and detector check by-pass line. The backflow devices shall be installed, owned, tested and maintained by the Customer. Test results shall be sent to the Board's System Integrity & Customer Projects Department. A detector check by-pass meter shall be installed, owned and maintained by the Board to monitor water consumption through the Fire Service. Water used for fire fighting is paid through the monthly Fire Service charge and is not metered. The Customer shall contact the Board's System Integrity& Customer Projects Department for fire system testing. In addition to the monthly Fire Service charge, the Customer shall be billed for excessive use of water for fire system testing and any water used from the Fire Service for non-fire fighting purposes. The Board reserves the right to inspect Fire Service installations. Fire Services are also subject to Rule 11.3.A. B. Charges The Board shall assess a"Fire Hydrant" charge as stated in Rule 15 prior to the installation of any individual fire hydrant. The Customer shall pay the Fire Service installation cost prior to construction. The Customer shall be responsible for additional repair costs due to encumbered Fire Services or damage as a result of negligence, willful damage or carelessness by the Customer, owner or tenants. 5. Lawn Sprinkler(Irrigation) Service: Where a Customer requests that a separate meter be installed in parallel to an existing meter or that a separate meter be installed in conjunction with a new service installation for water use that does not enter the wastewater system and is permitted by the local governmental entity, the Customer shall pay the amount specified in Rule 15 prior to installation. Such separate meter shall be furnished and installed by the Board at an acceptable location. In no case shall this meter be larger than the service line size. The Customer shall install a valve immediately at the outlet of the meter-set. An approved backflow prevention device shall be installed on all lawn sprinkler/irrigation services. The backflow devices shall be installed, owned,tested and maintained by the Customer. 6. Water Facility Relocations and Removals: The Board will relocate or remove its water facilities in accordance with Rule 10.2. AT)(1PTFT)- 7/??/ni WATE-- Lansing Board of Booster Pumps Water and Light Water Rule and Regulation 12 Booster Pumps Where the Customer uses a booster pump to increase pressure to the Customer's internal plumbing, the pump shall be of such capacity to maintain the suction side of the pump at or above 35 psi. Where a jockey pump is used to maintain pressure on fire sprinkler systems or other umnetered Fire Service,the jockey pump must take suction from a metered Customer Water Service. The Customer shall suitably pipe, valve and protect all booster pumps such that the boosted pressure will not cause backflow into the Board's Water Distribution System. All booster pumps having a capacity that could develop velocities in excess of 10 feet per second in the Customer Water Service shall have modulating valves installed on the discharge so that start-up or shut-down pressure surges will not be generated back into the Board's Water Distribution System. ADOPTED: 7/22/03 Pape 77 of 32 WATE�LI�GHT� Lansing Board of Water Storage Facilities IM Water and Light Water Rule and Regulation 13 Water Storage Facilities Where the Customer desires to maintain a stored water facility of any type (elevated storage tank, ground storage tank, etc.) that is directly connected to the Board's Water Distribution System, the storage vessel must be approved by the Board and any other agency or regulatory body with jurisdiction over the facility. Applicants shall submit plans and specifications to the Board's System Integrity&Customer Projects Department for approval prior to installation. The Customer must use a metered Customer Water Service for water used to fill, flush, and/or overflow such storage tanks, including those tanks used for fire protection purposes. ADOPTED: 7/22/03 WATE" a- Lansing Board of Cross Connection Im Water and Light Water Rule and Regulation 14 Cross—Connection 1. General A Customer shall not create or allow any actual or potential physical connection between a potable water line and a non-potable fluid, such that it is possible for the non-potable fluid to enter the potable water system. Potable water is provided to the Customer subject to the Board's Cross Connection Control Program which is available by contacting the Board's offices at 1232 Haco Drive, Lansing or on the Board's Internet Web site at www.lbwl.com. 2. Installation of Backflow Prevention Devices The Customer will be required to install a backflow prevention device on a Customer Water Service to assure containment when the Board detennines that an unprotected Cross-Connection exits. The backflow prevention device shall be purchased, installed, tested and maintained by the Customer. The Customer must obtain the Board's approval of the type and manufacturer of the device. The Customer shall install the device at the termination of the Customer Water Service at the outlet side of the secondary valve and shall be installed in accordance with good design practice. Unprotected bypasses are not permitted. If, in the opinion of the Board the building use represents an extreme hazard, or that multiple hazards exist within the building, a backflow prevention device may be required at the Service Location, in addition to internal protection. 3. Inspection and Maintenance of Backflow Prevention Devices Backflow prevention devices must be installed in an area that will permit easy access for inspection, testing, and maintenance. The Board shall specify inspection and testing of all backflow prevention devices on a regular schedule. If a device is found to be defective, the Customer shall repair or replace the equipment as necessary within thirty days. The Customer shall then notify the Board of compliance. Test results shall be sent to the Board's System Integrity & Customer Projects Department. The Customer shall permit access for inspection by the Board of any backflow prevention devices and all internal plumbing with reasonable prior notice. 4. Compliance The Customer must immediately correct any potentially hazardous backflow condition found during an inspection of internal plumbing. Failure to take adequate corrective action may result in termination of water service. 5. Severe Hazard Locations Customer Water Services serving the following facilities must be protected against backflow. A safe air gap or reduced pressure backflow preventer is generally specified for the following uses: (1) Hospitals, clinics, sanitariums and biological research centers (2) Morgues,funeral homes and other places with autopsy facilities (3) Waste-treatment plants (both solid and liquid waste) ADOPTED: 7/22/03 WATER Lansing Board of Cross Connection Water and Light Water Rule and Regulation 14 (4) Chemical plating plants (5) Industrial plants having complex plumbing systems not visually traceable in their entirety (6) Premises with an auxiliary water supply (7) Premises where inspection is restricted (8) Laboratories (9) Marinas (10) Food and beverage processing plants (11) Petroleum processing or storage plants (12) Radioactive material processing plants (13) Premises with reclaimed water systems (14) Facilities using treated water for process purposes A pressure-type vacuum breaker is recommended for the following uses: (1) Underground lawn sprinkler systems (2) Irrigation systems 6. Secondary Supplies A Customer's potable water plumbing cannot be connected to any well-water or surface water source, or to any water storage tank not approved by the Board. ADOPTED: 7/22/03 WATER Lansing Board of Schedule of Fees $ Charges Water and Light Water Rule and Regulation 15 Schedule of Fees & Charges WATER FEES and CHARGES Charge Description When Applied Charge Water Main Installation Charges Based on design including fire protection coverage Firm price quote,not to exceed quote or at cost Water Main Front Footage Recovery '/2 of the charge for either side of street if not previously collected. On 6" $46/ft On 8" $54/ft On 12" $77/ft On 16" $107/ft Fire Hydrant Installation Charge When requested by Customer Firm Price Quote Up to and incl. 1"Water Service Main-to-Curb Box Stub on previously installed $1,150 per stub plus water mains restoration cost Curb Box-to-Building(Trenched) $10.00/ft plus restoration cost $500 minimum Curb Box-to-Building(Bored) $23.00/ft plus restoration cost $800 minimum Meter Set-Standard $400 Meter Set-With Backflow Prevention $400 Water Services(BWL Installed) Meter Set-With Spilt Irrigation $520 (Connection Fee applicable) Retrofit of existing service to allow for spilt $590 irrigation service Charge for setting meter on a split service after $55 initial installation Greater than 1"Water Service Main-to-Curb Box Stub Firm price quote Curb Box-to-Building Firm price quote Meter Set Firm price quote Spilt Irrigation Service Firm price quote Winter Construction Charge Water Services,2"and under $12.50/Trench ft December 15—March 31 In addition to normal charge Frozen Meter Charge Upon occurrence For services: Up to 1" =$200 1 % =$400 2" =$700 plus additional labor& material cost if necessary Hydrant Flow Testing When requested by Customer $200 ea. Pool Fills When requested by Customer $200 ea. ADOPTED: 7/22/03 WATE—R&� Lansing Board of Schedule of Fees & Charges go Water and Light Water Rule and Regulation 15 WATER FEES and CHARGES Charge Description When Applied Charge Residential Service Inspection Each residential service inspection visit $55 ea. (Customer Choice Program) Permit Application Initial request by contractor seeking qualification $250 (Customer Choice Program) Annual Contractor's Qualification Annually $150 permit fee (Customer Choice Program) Engineering,Inspection and On-site mains and 2"or greater service size Deposit of$1,500 or 8%of Administration the estimated project cost (Customer Choice Program) whichever is greater. For deposits greater than $1,500,actual costs that are less than or exceeding deposit will be reimbursed or billed. Temporary Hydrant Usage for Within BWL service area for construction use construction,festivals and Permit Fee per project $150 governmental special use by special (A) 1"RPZ backflow device plus $380 if required. permit. Commodity fee $30/month or portion thereof (B) 2"RPZ backflow device plus $720 if required Commodity fee $60/month or portion thereof (C) Other approved backflow prevention Cost based on estimated usage device $250 deposit Non-compliance fee $40 Hydrant wrench $500 V occurrence Water Theft Penalty Fee 1" 1-3 days=$100 Festivals,non-profit or otherwise—includes rental 4-7 days=$300 of RPZ 8+days=$500 2" 1-3 days=$250 4-7 days=$500 8+days=$750 Metered use for approved governmental special use Setup and removal cost plus —includes rental of RPZ Residential Water Service Rate 1 commodity charge. Security Deposits—Residential Unacceptable Credit History—Normal credit risk Water&City Sewer Deposits may be larger for higher than normal $71 Water Only credit risk $27 Security Deposits—Commercial& Unacceptable Credit History—Normal credit risk 1.5 times average monthly bill Industrial Deposits may be larger for higher than normal credit risk Reconnection fee Non-pay(Normal hours) 7:30am—7:00pm weekdays $25 Non-pay(Other than normal hours) Holidays and other than normal hours $100 Meter Tampering $100 Charges other than those published Relocations,damages,etc. At cost ADOPTED: 7/22/03 ATTACHMENT D WATER&LIGHT Lansing Board of go Water and Light Rules and Regulations For Steam Service ADOPTED: 7/22/03 WATE-BL- Lansing Board of Table of Contents Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions....................................................................................................................................................................4 Applicationfor Service............................................................................................................................................... 5 ServiceConditions...................................................................................................................................................... 6 Characterof Service..................................................................................................................................................6 Descriptionof Service..............................................................................................................................................6 Availabilityof Service..........................................................................................................................................6 Agreements...........................................................................................................................................................7 MaterialAvailability.............................................................................................................................................7 Useof Service.............................................................................................................................................................. 8 General...................................................................................................................................................................... 8 Accessand Damages ................................................................................................................................................ 8 CustomerPiping and Equipment.............................................................................................................................. 8 SteamQuality and Disturbances............................................................................................................................... 8 ImproperUse and Tampering................................................................................................................................... 9 Metering .................................................................................................................................................................... 10 General.................................................................................................................................................................... 10 Sizing/Installation/Ownership................................................................................................................................. 10 EquipmentLocation................................................................................................................................................ 10 DamagedMeter...................................................................................................................................................... 10 Application of Rates ................................................................ .................... 11 ............................................................. General.................................................................................................................................................................... 11 Resale...................................................................................................................................................................... I 1 Choiceof Rates....................................................................................................................................................... 11 Billing..................................................................................................................... . 11 ............................................... MinimumCharges.................................................................................................................................................. 11 Property Owner-Rental Agent Agreement for'Leave On' Service....................................................................... 12 Responsibility for Payment of Bills......................................................................................................................... 13 General.................................................................................................................................................................... 13 EstimatedConsumption.......................................................................................................................................... 13 BillingErrors.......................................................................................................................................................... 13 AccountSecurity Deposits...................................................................................................................................... 13 Disputeand Hearing Procedure.............................................................................................................................. 15 Disputes.................................................................................................................................................................. 15 Hearings.................................................................................................................................................................. 15 Distribution System Extensions............................................................................................................................... 17 General.................................................................................................................................................................... 17 Request for Distribution System Extension........................................................................................................ 17 Ownership........................................................................................................................................................... 17 Availability of Distribution System Extension................................................................................................... 17 Installation of Distribution System Extension.................................................................................................... 17 Adequate Temperature,Pressure and Flow Capacity......................................................................................... 17 Economic Development Offsets......................................................................................................................... 18 Easements........................................................................................................................................................... 18 Non-Standard Equipment ......................................................................................:............................................ 18 Non-Standard Construction................................................................................................................................ 18 OtherFacilities.................................................................................................................................................... 18 Construction Date of Distribution System Extension......................................................................................... 18 Steam Facility Relocations and Removals.............................................................................................................. 19 Services......................................................................................................................................................................20 General....................................................................................................................................................................20 ADOPTED: 7/22/03 . . Lansing Board of Table of Contents Im Water and Light SteamService.........................................................................................................................................................2O General................................................................................................................................................................20 Customer Connections to Board Facilities..........................................................................................................2l CustomerSteam Piping......................................................................................................................................2l Installation and Maintenance of Steam Services ............................................................................................... zz Steam FuuJby Relocations and Removals..............................................................................................................Zl Condensate and Master Trap.......... .......................................................................................................................23 General....................................................................................................................................................................23 Condensate..............................................................................................................................................................23 MasterTrap.............................................................................................................................................................23 Condensate(Su/ge)Tanks......................................................................................................................................24 By-pass Valve.........................................................................................................................................................24 System Extension J&Service Deposit............ .......................................................................................................... 25 General....................................................................................................................................................................25 Distribution System Extension and Customer Steam Service ................................................................................25 26 CuatonzorSteam 8o/v�uOnly------------------------------------------' Schedulenf Fees J&Charges.....................................................................................................................................2/ ADOPTED: 7/22/03 WATER Lansing Board of Definitions Water and Light Steam Rule and Regulation 'I DEFINITIONS OF TERMS AND THEIR ABBREVIATIONS BOARD— When used in these Rules and Regulations, Board is an abbreviation meaning the Board of Water and Light. CUSTOMER— A purchaser of steam service supplied by the Board. CUSTOMER PIPING— A piping system owned or controlled by the Customer that conveys steam from the Service Location throughout the Customer's Premises. CUSTOMER STEAM SERVICE — Those pipes, valves and appurtenances installed between a Stearn Main and Customer Piping. DEMAND— The rate of steam delivered at a given point. FACILITIES— A general term which includes pipes, fittings, valves, associated structures and the like, used as a part of or in connection with a steam installation. PREMISES— A building and its grounds. RATE— The unit prices as established by the Board's rate-making body and the quantities to which they apply as specified in the Rate Schedule. RATE SCHEDULE — A filed statement of the steam Rate and the terms and conditions governing its application as established by the Board's rate-making body. SERVICE LOCATION—The point at which the Board has agreed to provide steam service to Customer Piping. SERVICE VALVE—The valve installed by the Board at the Service Location in the building. STEAM DISTRIBUTION SYSTEM — The system of Steam Mains, pipes, fittings, valves and all equipment and appurtenances thereto, necessary to distribute steam to Customer Steam Service. STEAM MAIN — A pipe owned and maintained by the Board that conveys steam to a Customer Steam Service. ADOPTED: 7/22/03 WATER Lansing Board of Application for Service I= Water and Light Steam Rule and Regulation 2 Application for Service 1. General Copies of the Board's Rate Schedules for steam service are open to public inspection at the Board's offices and are available on the Board's Internet Web site www.lbwl.com or upon request. Application for original, modified or added service shall be made at the office of the Board of Water and Light at 1232 Haco Drive,Lansing. Any Customer receiving or agreeing to receive steam service from Board Facilities shall be deemed a Customer of the Board subject to its Rates and these Rules and Regulations and responsible for the service used whether such service is provided under a signed agreement or not. Steam service will not be supplied to new or remodeled buildings until such installations comply with these Rules and Regulations. The Customer should contact the Board's System Integrity & Customer Projects Department to determine the characteristics of the steam service available at the Premises. The System Integrity & Customer Projects Department will inform the Customer of the Board's requirements, which must be fulfilled by the Customer, in order to receive steam service. The Board may discontinue steam service to any Customer for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. The Customer must pay a reconnection fee as stated in Rule 13 to cover the costs of restoring steam service that has been discontinued for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. ADOPTED: 7/22/03 WATE-LI� Lansing Board of Service Conditions goWater and Light Steam Rule and Regulation 3 Service Conditions 1. Character of Service The Board produces and distributes saturated steam for public use throughout its service area and will endeavor, but does not guarantee, to furnish a continuous supply and to maintain steam temperature and pressure within reasonable limits. The Board shall not be liable for interruptions in the service including without limitation, variations in the service characteristics, or for any loss or damage of any kind or character occasioned thereby, due to causes or conditions beyond the Board's reasonable control, and such causes or conditions shall be deemed to specifically include, but not be limited to, the following: acts or omissions of Customers or third parties; operation of safety devices except when such operation is caused by the negligence of the Board; absence of an alternate supply of service; failure, malfunction, breakage, necessary repairs or inspection of machinery, Facilities or equipment when the Board has carried on a program of maintenance consistent with the general standards prevailing in the industry; act of God; war; action of the elements; storin or flood; fire; riot; sabotage; labor dispute or disturbance, or the exercise of authority or regulation by governmental or military authorities. Notwithstanding any other provision of these rules,the Board may interrupt or limit steam service to Customers without prior notice and in a manner that appears most equitable under the circumstances then prevailing or as necessary to protect the health, safety and welfare of its employees or Customers. The Board shall be under no liability with respect to any such interruption or limited supply. 2. Description of Service A. Availability of Service (1) Saturated steam service is available twelve(12)months a year to Customers in the City of Lansing except where the Board has determined it to be impractical to serve. (2) Low pressure steam service at pressures less than 15 pound per square inch (psi,) is available where distribution mains are installed in a large portion of the downtown area. The pressure varies according to location, load conditions and ambient temperature,but generally is between 5 and 12 psig at building Service Valves. (3) Medium pressure steam service at pressures exceeding 15 psig is available in some portions of the service area. The pressure usually is 75 psig at building Service Valves but may vary from 25 psig to 125 psig according to location and load conditions. (4) High pressure steam service at pressures up to 275psig is available in some portions of the service area. (5) Steam service is not available where the Board must bring the Customer Steam Service across another parcel or lot in order to provide service. (6) In the case where there is more than one Steam Main capable of providing service, the Board shall determine which Steam Main will be used for service and the location of the Customer Steam Service connection. ADOPTED: 7/22/03 WATER A- Lansing Board of Service Conditions on Water and Light Steam Rule and Regulation 3 B. Agreements The Board shall require the Customer to enter into a written agreement that details the teens and conditions and price to be paid by the Customer prior to steam service construction. In addition,the Board may negotiate written contractual arrangements as to the provision of necessary service Facilities, duration of service, amount of deposit and refunds thereon, minimum bills or other service conditions for Customers or prospective Customers whose load requirements exceed the capacity of the available distribution system in the area or whose load characteristics or special service needs require unusual investments by the Board in service Facilities or where there is not adequate assurance of the permanent use of the service. No promises, agreements or representations of any agent or employee of the Board shall be of binding force upon the Board unless the same is within the authority of that individual and incorporated in the written agreement. C. Material Availability Subject to the restrictions contained in Rule 3.2.A, the Board will construct steam distribution Facilities and extensions only in the event it is able to obtain or use the necessary materials, equipment and supplies. The Board may, in its discretion, allocate the use of such materials, equipment and supplies among the various classes of Customers and prospective Customers of the same class. ADOPTED: 7/22/03 WATER- Lansing Board of Use of Service RMWater and Light Steam Rule and Regulation 4 Use of Service 1. General Saturated steam is supplied to a Customer for exclusive use on the Premises to which it is delivered by the Board. Service may not be shared with another, sold to another, or transmitted off the Premises without the written permission of the Board, except as noted in Rule 6. Use of steam is only for the purposes authorized by the Board and is not to be extended to another building without authorization of the Board. 2. Access and Damages The Customer shall provide and maintain appropriate access and working space around steam Facilities in accordance with all applicable Board standards so as to permit ready and safe operation and maintenance of such Facilities. The Board's authorized personnel or agents of the Board shall have access to the Customer's Premises at all reasonable hours for all purposes necessary to conduct business, including without limitation: 1) install, inspect, read, repair, maintain, test or remove its meters 2) install, operate and maintain other Board equipment or Facilities, and 3) inspect service installations, Customer Piping, and to determine the connected steam Demand. If the meters, metering equipment or other Board property are damaged or destroyed through the neglect of the Customer, the cost of necessary repairs or replacements shall be the responsibility of the Customer. If, for any reason beyond its control,the Board is unable to read a meter, operate, maintain or make inspection, including but not limited to, reasons such as Premises being locked, meter being inaccessible or unsafe conditions, then after due written notice to the Customer, the steam service may be disconnected until such time as arrangements have been made to permit access for Board inspection and approval and the Customer has paid the appropriate reconnection fee as stated in Rule 13. 3. Customer Piping and Equipment The Board may deny or terminate service to any Customer whose Customer Piping or equipment constitutes a hazard to the Board's employees, equipment or its service to others. However, the Board is not responsible to inspect Customer Piping or equipment and shall not be held liable for any injury or damage resulting from the condition thereof. The Customer shall install and maintain the necessary facilities or devices to protect Customer owned equipment against service interruptions and other disturbances on the Board's system. Alterations to the Customer Steam Service or associated equipment are prohibited without approval of the Board. 4. Steam Quality and Disturbances The Customer shall operate equipment in a manner that does not cause surges, water hammer or other problems in the Steam Distribution System or to other Customers. If the Board notifies the Customer of such a condition, the Customer shall discontinue operation of equipment causing such condition until a correction has been made. ADOPTED: 7/22/03 WATE- Lansing Board of Use of Service on Water and Light Steam Rule and Regulation 4 5. Improper Use and Tampering Any person that uses steam without making proper application for steam service shall be responsible for all charges for steam service. The amount of such charges shall be determined by the Board either by meter readings or on the basis of calculated consumption for the time steam was used. If steam is being used by a Customer without proper application for service or steam service connection, the Board may discontinue service without notice. In case of such discontinuance of service, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 13 The Board may discontinue service and seek criminal charges, if it is determined that the meter or piping on the Customer's Premises has been tampered with or altered in any manner to steal steam. If the Board discontinues service for this reason, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 13, made appropriate restitution for stolen service and made provisions for metering and/or piping changes as may be required by the Board. ADOPTED: 7/22/03 —rr.'rr<— n11 inn Dann 0 nf"7'7= WATER Lansing Board of Metering Water and Light Steam Rule and Regulation 5 Metering 1. General All steam sold to Customers shall be measured by commercially acceptable measuring devices owned and maintained by the Board except where it is impractical to meter, such as for temporary or special installation, in which cases the consumption may be calculated. If for any reason all the steam used cannot be registered accurately as condensate, the unmetered portion shall be estimated by the Board on the basis of prior consumption or the operating characteristics of the building and equipment. 2. Sizing/Installation/Ownership A meter-set consisting of a gate valve, strainer, union, master trap and condensate meter shall be installed at the termination of the building's condensate piping system. The Customer shall furnish and install the gate valve, strainer, union and master trap according to the Board's specifications and standards. The Board shall furnish the condensate meter for installation by the Customer. The Board shall own and maintain the gate valve, strainer, union, master trap and condensate meter. The Board may furnish more than one meter for installation by the Customer, depending upon the total capacity needed,the system arrangement, or the number of Customers in the building. 3. Equipment Location A. The Customer shall provide, at no expense to the Board, a space/enclosure suitable to the Board for the installation of the necessary metering equipment. The Customer shall furnish the space and the provisions for mounting metering and service equipment to meet Board requirements. Inquiries regarding installation requirements should be directed to the Board's System Integrity &Customer Projects Department. B. The Customer shall locate metering equipment and master trap inside the building served in a well ventilated area with ample space for meter reading and maintenance. C. The Customer shall not place the meter in a pit below floor level, a rest room or on a platform higher than thirty (30) inches above the floor unless Board approved steps and platform are installed. D. The Customer shall furnish a substantial, level, concrete, metal or wood support for the meter setting with enough space for the outlet piping and at least two (2) feet of unobstructed space directly above the meter. The elevation of the meter support shall not be less than eighteen (18) inches and not more than thirty (30) inches above the floor. 4. Damaged Meter The Customer shall be held liable for damage to the meter from acts of carelessness, negligence or willful damage by owner or his tenants. The Board will repair any meter so damaged, and the cost shall be billed to the Customer. ADOPTED: 7/22/03 WATE® Lansing Board of Application of Rates Water and Light Steam Rule and Regulation 6 Application of Rates 1. General: Steam Rates are predicated upon the Board not being required to provide not more than one Customer Steam Service to a building or structure. The Board shall separately meter and separately bill service at different points or at different buildings or structures unless specifically provided for in the applicable Rate Schedule. 2. Resale: The owner or operator of an office building, apartment building, shopping mall, or similar structure may purchase steam from the Board for resale to occupants on the condition that service to each occupant shall be metered separately and that the occupants may not be charged more for such service than the appropriate Rate of the Board available for similar service under like conditions. In order to qualify for resale to tenants, the owner or operator must state their intent to resell in the application for service. The renting of Premises with the cost of steam service included in the rental as an incident of tenancy will not be considered a resale of such service. 3. Choice of Rates: In some cases, the Customer may be eligible to take service under any one of two or more Rates. Upon request, the Board will advise the Customer in the selection of the Rate that will provide the lowest cost of service, based on the best available information, but the responsibility for the selection of the Rate shall be the sole responsibility of the Customer. After the Customer has selected a Rate, the Customer may not change from that Rate to another Rate until at least twelve (12) months have elapsed. The Customer shall not evade this rule by temporarily terminating service. The Board may waive the provisions of this paragraph where it appears that a change of the Rate is necessary for permanent rather than temporary or seasonal advantage. The intent of this rule is to prevent frequent changes from Rate to Rate. The Board shall not be responsible to refund the difference in charges under different Rates applicable to the same class of service, unless the Board provided an incorrect initial service turn- on Rate setting or unless the Customer makes a written request and has a penmanent change in load profile. Any refund is subject to Board approval. 4. Billing: Customers having more than one meter shall have consumption computed by individual meter in accordance with the current Rate Schedule. 5. Minimum Charges: A minimum charge, as defined by the Rate in effect, shall be applied to all services and billed to the Customer. Where the Customer requests that a service be discontinued, the Board shall deactivate the service by any appropriate means, including without limitation, removing the meter and by disconnecting the service from the Board's Steam Distribution System. ADOPTED: 7/22/03 WATER&� Lansing Board of Application of Rates Water and Light Steam Rule and Regulation 6 6. Property Owner-Rental Agent Agreement for"Leave On" Service: The BWL may waive application charges to maintain continuity of service at rental property locations provided: (1)the landlord agrees in writing to assume the responsibility for steam service during the interim between tenants, and (2) the landlord is in compliance with all other rules and regulations of the Board. ADOPTED: 7/22/03 WATER R� Lansing Board of Responsibility for Payment of Bills Water and Light Steam Rule and Regulation 7 Responsibility for Payment of Bills 1. General Each Board Customer is responsible to pay all utility bills as rendered on or before the due date shown thereon. The Customer remains responsible for payment of the bills until the Customer orders service to be discontinued and the Board has had reasonable time to secure a final meter reading. Bills are rendered on approximately a monthly basis. Bills are mailed to Customers approximately fifteen (15) days before the due date shown on the bill. The Customer shall pay the net amount if paid on or before the due date on the bill. Failure on the part of the Customer, through no fault of the Board, to receive the bill shall not entitle the Customer to pay the net amount after the due date of the bill. If a bill remains unpaid after issuing a five (5) day written shut-off notice, the Board shall have the right to discontinue service. Iii extenuating circumstances, a Customer will be afforded the opportunity to make payment arrangements. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not in dispute. 2. Estimated Consumption Readings may be estimated when conditions warrant. Until reconciled by an actual reading, bills rendered on estimated consumption have the same force and effect as bills rendered on actual meter readings. 3. Billing Errors When an error is found to exist in the billing rendered to a Customer, the Board will correct such error to recover or refund the difference between the original billing and the corrected billing. Corrected billings will not be rendered for periods in excess of three (3)years. Refunds to Customers will normally be made promptly upon discovery of the error. Amounts due the Board from the Customer will be subject to normal collection policy and procedures. 4. Account Security Deposits The Board shall require an account security deposit from any new or existing Customer with an unacceptable credit history. The Board may apply different rules to new Customers signing up for service in accordance with Rule 7.4.C. The deposit is normally 1.5 times the average monthly bill (actual or estimated) as determined by the Board. If a deposit is required for new residential Customers, the Board shall determine the amount in accordance with Rule 13. To determine the deposit for new commercial and industrial Customers, the Board will estimate the average monthly bill and apply the 1.5 factor. The Board may waive deposits in special circumstances. The Board may also demand deposits larger than 1.5 times the average monthly bill if the Board determines that a Customer presents a higher than normal credit risk. The Board will refund deposits to all Customers who have taken service for 12 months and have an acceptable payment history. The Board will also refund deposits to Customers who have terminated service and paid all charges due. ADOPTED: 7/22/03 WATER RR&L� Lansing Board of Responsibility for Payment of Bills ImWater and Light Steam Rule and Regulation 7 A. A security deposit may be required in any of the following circumstances: (1) The Customer has deliberately misinformed or misrepresented facts to the Board. (2) The Customer has tampered with the meter during the last 12 months. (3) The Customer has had one or more payments canceled in the last 12 months due to: (1) non- sufficient funds returned check, (2) account closed returned check, (3) non-sufficient funds bank bill, (4) account closed bank bill, or(5) credit card reversal. (4) The Customer has received a final notice on any account within the last 12 months. (5) The Customer has received more than 3 second notices on any account during the last 12 months. (6) The Customer has a past due balance on any account that is greater than $50.00 for more than 31 days past due in the past 12 months. (7) The Customer has a suspended or bad debt account within the last 12 months. B. If the Customer is applying for service through an artificial legal entity such as a corporation, or limited partnership,then the Board may request a deposit or other security of payment. C. New Customers will not be required to submit a deposit, in any of the following situations: (1) The Customer has no previous service history with the Board. (2) The Customer has previously established an acceptable payment history with the Board on a similar account. (3) The Customer's bill is paid by the State of Michigan. (4) The Customer secures a guarantor with a similar account and an acceptable payment history. (5) The Customer provides an acceptable surety bond. (6) The Customer provides an acceptable credit reference letter from a similar utility company for a similar account. Account must have been in the Customer's name and maintained for a minimum of 12 consecutive months. (7) The Customer has established an acceptable credit rating with a credit-reporting agency. ADOPTED: 7/22/03 WATE-' a- Lansing Board of Dispute and Hearing Procedure Water and Light Steam Rule and Regulation 8 Dispute and Hearing Procedure 1. Disputes In accordance with the Lansing City Charter, the Board is required to provide a fair and equitable dispute and Bearing process for its Customers as follows: A. When any Customer disputes a bill or service and the Board is so advised, the date of the notice of dispute will be recorded. B. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not disputed. C. The disputed bill or service will be investigated promptly and completely. D. The Customer will be advised of the results of the investigation. E. An attempt will be made to resolve the dispute in a manner mutually satisfactory to both parties. F. The Board will provide the opportunity for each Customer to enter into a reasonable settlement agreement in order to mutually resolve the disputed claim or to satisfy any liability not in dispute. G. If a settlement cannot be reached between the Customer and the Board's Account Administrator, the Customer may choose to appear before the Board's Dispute Review Committee. The review will be scheduled within ten(10) days of the request or as mutually agreed to by both parties. H. If a settlement cannot be reached following examination by the Dispute Review Committee, the account will be referred to the Board's General Manager. I. If a settlement is not reached after review by the Board's General Manager,the Customer shall be afforded an opportunity for a hearing. J. The Customer shall be responsible for payment of all other bills or portions of bills as rendered which are not in dispute. 2. Hearings A. Any Customer who disputes the services provided or a billing for services furnished in accordance with the Board's filed Rates, Rules and Regulations or established policies or procedures may request a hearing. If a hearing requested is based on a disputed past due bill,the request must be made within ten (10) calendar days following the final outcome of the dispute process. Any request for a hearing may be made in writing and received by the Board's corporate office at 1232 Haco Drive, Lansing, Michigan, 48912. B. On receipt of a request for a hearing, the Board will forward this request to an independent Hearing Officer. The Hearing Officer will arrange a time for the hearing and advise both the Customer and the Board of the date, time and location in writing. The hearing will be scheduled during normal business hours. Failure of the Customer or Board to attend the hearing without due cause or prior request for adjournment will constitute a waiver of right of that party to the hearing. C. The Board and the Customer shall: (1) Have the right to be represented by Counsel or other persons of their choice. (2) Have the right to present evidence,testimony and oral and written argument. (3) Have the right to cross-examine witnesses appearing on behalf of the other party. ADOPTED: 7/22/03 FFFF.CTTVF: 8/1/03 Page 15 of 272-7 WATE® Lansing Board of Dispute and Hearing Procedure ImWater and Light Steam Rule and Regulation 8 (4) Have the right to have the hearing recorded by a court reporter at the expense of the Customer. The Hearing Officer shall also have the right to have the hearing recorded by a court reporter. Recordings will be preserved at least six (6) months from the date of the hearing. All evidence relevant to the dispute will be received. D. For each hearing, the Hearing Officer shall compile a hearing record which will contain; (1) A concise statement in writing of the position of the Board in relation to the dispute. (2) A concise statement in writing of the position of the Customer in the dispute. (3) Copies of all evidence submitted by the parties. E. If a decision is reached during the hearing, the Hearing Officer shall state the decision to both parties. If the Hearing Officer does not reach a decision during the hearing, additional time will be allowed to reach a decision. When a decision has been reached, either at the hearing or later, the Hearing Officer will prepare a report which shall contain the following: (1) A concise summary of the evidence and argument presented by the parties. (2) The decision and a statement that the decision of the Hearing Officer was based solely on the evidence presented and reasons therefore. (3) Advise that the representatives of the Board and the Customer have a right to file an appeal with the Board of Commissioners. (4) A statement as to any settlement agreement. (5) A statement that the dispute determination is binding on both parties unless appealed to the Board of Commissioners within ten(10) days of the date of mailing of decision, and that any request for appeal must be in writing to the Corporate Secretary. F. The Hearing Officer shall file the written report with the Board of Commissioners and the Mayor of the City of Lansing. A copy of the report shall be sent to the Customer via certified mail. G. If the dispute is unresolved and the decision appealed, the Hearing Officer shall make recommendations to the Board of Commissioners on the dispute. The Secretary of the Board will arrange a time for the appeal and advise both the Customer and the Board of the date, time and location in writing. Failure of the Customer to appear at the time set for the appeal without due cause, or to request an alternate date,will constitute a waiver of right to appeal. H. The Board of Commissioners shall report its final action on any unresolved disputes together with the Hearing Officer's report and recommendations to the Mayor and the City Council of Lansing, Michigan. I. The Mayor may make recommendations to the Board of Commissioners on each unresolved dispute. ADOPTED: 7/22/03 UEPUCt rnro. 0/1 in-1 D- 14 -IP-)'727 WATE'—r' Lansing Board of Distribution System Extensions IM Water and Light Steam Rule and Regulation 9 Distribution System Extensions 1. General: A. Request for Distribution System Extension Rule 9 sets forth the conditions under which the Board will extend its Steam Distribution System. B. Ownership The Board shall provide, own, maintain and specify all of its distribution Facilities including location. No ownership rights to Board Facilities shall pass to any owner(s), developer(s), or Customer(s)by reason of any contribution required hereunder. C. Availability of Distribution System Extension The Board shall in its sole discretion determine whether or not any particular Stearn Distribution System extension shall be made, regardless of its intended use, and establish any special conditions or requirements that may apply, including but not limited to entering into an agreement with a developer, property owner(s) or Customer. Steam Distribution System extensions are generally available throughout the steam service area if the requested service will not disturb or impair service to prior users and is within or contiguous to areas presently served. D. Installation of Distribution System Extension All Steam Distribution System extensions shall be installed by the Board or its agent. Steam Distribution System extensions shall be installed in public right-of-way except in certain cases where, at the Board's discretion, they may be installed in dedicated recordable easements on private property at no cost to the Board. The Customer shall provide the Board a final preliminary approved site plan for Board review and approval. Installation of a Steam Distribution System extension will be initiated provided: (1) The Customer has entered into a written agreement with the Board for the construction of the Steam Distribution System extension. (2) The Customer has paid any deposits as required by Rule 7.4 and Rule 12 for the Steam Distribution System extension and any required system reinforcement. (3) Where applicable, the Customer has recorded the plat or final preliminary approval has been received, monuments or markers are in place, lot lines staked, sewers installed, streets at finished grade (before gravel and curb and gutter installation), sidewalk grading completed, and the ground in workable condition. (4) Construction during the winter season will only occur at the Board's discretion. E. Adequate Temperature,Pressure and Flow Capacity The Board shall not make Steam Distribution System extensions unless adequate temperature, pressure and flow capacity is available at the location of the Steam Distribution System extensions as detennined by the Board. Where a Steam Distribution System reinforcement is required to provide adequate temperature, pressure and flow capacity at the location of the Steam Distribution System ADOPTED: 7/22/03 — ni, ins D--- 1^7 -4'-)7')-7 WATEAa�IGH'r Lansing Board of Distribution System Extensions Water and Light Steam Rule and Regulation 9 extension, the Customer shall bear the cost of such Steam Distribution System reinforcement in accordance with Rule 1.2. F. Economic Development Offsets Where the Board determines that the Steam Distribution System extension will promote development that provides substantial and sustainable economic benefits to its Customers or the Lansing region, the Board will consider an offset to its fees and charges and/or an economic incentive subject to its availability. G. Easements Where the Board has agreed to construct the Steam Distribution System extension in an easement and prior to such construction, the owner(s), developer(s) or Customer(s) shall be required to furnish, at no expense to the Board, recordable easements in a form satisfactory to the Board. The easement shall grant right-of-ways suitable for the ingress, egress and the installation and maintenance of the Steam Distribution System extension including any Steam Distribution System equipment as designed by the Board for present and future service. In the event the required easements are not provided by the owner(s), developer(s) or Customer(s) for such extension, the Board may elect to construct all or any part thereof along public highways or other private property. In such event,the Board may require the owner(s), developer(s) or Customer(s) to pay the added construction expense occasioned by the use of such highways or other private property, plus any expense encountered in acquiring permits and easements on other private property when necessary to provide service to the owner(s), developer(s) or Customer(s). H. Non-Standard Equipment Where the Customer requests that the Board utilize equipment which differs from its norinal specifications, purchased or installed, the Board may elect to provide such non- standard equipment with the Customer paying any additional cost. I. Non-Standard Construction Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. J. Other Facilities It will be the responsibility of the owner(s), developer(s) or Customer(s) to identify and provide locations of any existing privately owned underground facilities such as lawn sprinkler systems, field drainage systems, septic tanks, Customer owned electric lines, etc. If privately owned facilities are not properly located, the Board does not assume responsibility for any damage to these facilities. K. Construction Date of Distribution System Extension The Board, based on availability of work crews and material, and subject to approvals of the appropriate regulatory agencies, utilize best efforts in constructing the Steam Distribution System extension to meet a mutually agreed upon date. ADOPTED: 7/22/03 WATER LIGHT Lansing Board of Distribution System Extensions go Water and Light Steam Rule and Regulation 9 2. Steam Facility Relocations and Removals: (1) At the request of a Customer or developer, or as required due to a conflict, or to meet Board Standards,the Board will relocate or remove its steam Facilities provided: A. The relocation or removal is feasible and meets Board Standards. B. The Customer or developer obtains approval from all Customers impacted by the proposed relocation. C. The relocation or removal does not degrade steam reliability or quality. D. All governmental approvals, permits and easements are obtained. Prior to any relocation or removal of steam Facilities,the Customer or developer shall be required to make a nonrefundable contribution in aid of construction. The aid in contribution of construction shall reimburse the Board for all relocation and removal costs including material, labor, the cost of breaking and repairing streets, walks, parking lots, driveways, etc., repairing lawns, replacing shrubs, flowers, etc., and any right-of-way costs as per this Rule 9, plus the cost of any necessary modifications to the Board's Steam Distribution System affected by the relocation or removal, less the salvage value of any portion of the steam Facilities removed. (2) If, at any time subsequent to completion of the Steam Distribution System extension, it is found that Steam Mains or related Facilities are not at the correct location or at the proper elevation due to changes beyond the control of the Board, the Customer or developer shall reimburse the Board to relocate Steam Mains or related Facilities to the correct location or at the proper elevation. ADOPTED: 7/22/03 -1,ram_ n„ ,— D.— 10—FI M-7 WATER&L- Lansing Board of Services Water and Light Steam Rule and Regulation 10 Services 1. General: The Customer Steam Service shall be fumished, installed, owned and maintained by the Board. In the course of maintaining or repairing a Customer Steam Service, the Board shall bear no responsibility for damage incurred or restoration to areas where the Customer Steam Service passes under any area not readily accessible. The Customer shall be responsible for additional repair costs due to these encumbered services. The Service Location shall be specified by the Board and shall be located so that the Board's service Facilities meet or exceed all clearance requirements and applicable local codes. Should it become necessary for any cause beyond the Board's control to change the Service Location, the entire cost of any changes in the Customer's service shall be the responsibility of the Customer. Should it become necessary for the Board to reinforce or upgrade the Steam Distribution System to accommodate the requested service, a nonrefundable contribution in aid of construction may be required as determined by Rule 12. 2. Steam Service: A. General All steam supplied shall be condensed and piped to a condensate meter except where Board approval is given for reasonable or unavoidable exceptions such as humidifiers, steam tables, pressing equipment, cooking equipment, etc. A plot plan showing the proposed building size, location of service entrance and steam equipment to be supplied shall be submitted to the Board's System Integrity & Customer Projects Department for all service requests. Customer Steam Services shall be installed from the Steam Main to the Customer's building in the most direct manner. The pipe comprising the connection shall cross only that legally described property upon which the building to be serviced is located. It is the intent of the Board that all underground steam pipes be installed and maintained by the Board. However, where unusual or special circumstances exist, the Customer may request approval to install underground steam pipes. Applicants shall submit plans and specifications to the Board's System Integrity& Customer Projects Department for approval prior to installation. No person other than an authorized employee of the Board shall open or close the outside valve on the Customer Steam Service. No person except an authorized Board employee shall tap, revamp or connect to a Steam Main or any of the pipes comprising the Customer Steam Service. ADOPTED: 7/22/03 WATER-&LIGHT Lansing Board of Services Water and Light Steam Rule and Regulation 10 B. Customer Connections to Board Facilities It shall be the Customer's responsibility to connect Customer Piping to the Customer Steam Service or meter-set. All work shall be in full compliance with all Board standards and applicable codes. The Customer shall install a Service Valve to control the entire steam supply to the building. This valve shall be installed within one foot of the outlet side of the Board's Service Valve and shall have ready access. The Customer shall not connect to the Customer Steam Service except at the outlet side of the Board Service Valve. C. Customer Steam Piping (1) General The Customer shall provide at least one automatic float type air vent for all systems except vacuum systems. The best location sometimes is in the condensate main. No Customer Piping shall depend upon the master trap for steam trapping or vent for air removal, except a single zone, one pipe, direct steam system. Customer Piping served with medium or high pressure steam shall be equipped with a pressure regulator, including a three valve by-pass and with a pressure relief valve. The relief valve shall have a capacity rating equal to the rating of the regulator, it is to be an ASME approved type, and shall discharge to the outside of the building or to a space in the building where little or no damage will occur if the valve operates. The proper relief setting depends upon the characteristics of the system. The Customer shall make sufficient provisions for the support, grade expansion, and contraction of pipe near the service connections. (2) Service Riser or Header Piping The total length of Customer's service riser or header piping shall be kept to a minimum, but in no case shall the length exceed twenty (20) feet from the Board's Service Valve. A gooseneck is required from the top of all service risers unless the grade of the service from the top of the riser to the first branch connection exceeds one diameter of the pipe. All service risers and header piping graded to the street main shall be insulated with at least one inch(1")thick standard pipe insulation. When more than one Customer is supplied from a single service, each Customer's branch connection shall have a valve for controlling his service. Each Customer will be supplied and metered independently, and access shall be provided to each individual Service Valve. The risers or branch connections to the individual Customer's valve shall be as short as practicable. When the length of the common header pipe exceeds twenty (20) feet the condensate shall be piped to a master trap and meter and the steam consumption assigned to the building owner or an occupant by the owner. ADOPTED: 7/22/03 ,„___. _11 ..I, i..., Do )t of 7'72Z WATER R� Lansing Board of Services Water and Light Steam Rule and Regulation 10 (3) Automatically Operated Valves Systems having an automatically operated valve which regulates the steam supply for more than one-third of the total installed capacity of space heating, space cooling, or domestic water heating shall be equipped with an adequately sized three valve by-pass around the automatic valve; unless the valve has a dependable, rapid, manual opening feature. The steam trap which serves the equipment shall also be equipped with a three valve by-pass. (4) By-Pass Valves All by-pass valves will be sealed in the closed position and shall not be operated except in emergencies. The Board's System Integrity & Customer Projects Department shall be notified any time a sealed by-pass valve is opened. D. Installation and Maintenance of Steam Services Installation of a steam service will be initiated provided: (1) The Customer has provided the Board a final preliminary approved site plan for Board review and approval. (2) The Customer has entered into a written agreement with the Board for the construction of the steam service. (3) The Customer has paid any deposits as required by Rule 7.4 and Rule 12 for the steam service. (4) Where applicable,the Customer shall have the plat recorded or final preliminary approval received, monuments or markers in place, lot lines staked, sewers installed, streets at finished grade (before gravel and curb and gutter installation), sidewalk grading completed, and the ground in workable condition. (5) Construction during the winter season will only occur at the Board's discretion. Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. The Customer shall be responsible for additional repair costs due to encumbered Customer Steam Services or damage as a result of negligence, willful damage or carelessness by the Customer, owner or tenants. 3. Steam Facility Relocations and Removals: The Board will relocate or remove its steam Facilities in accordance with Rule 9.2. ADOPTED: 7/22/03 WATE� Lansing Board of Condensate and Traps go Water and Light Steam Rule and Regulation 11 Condensate and Master Trap 1. General: The only approved piping system consists of a single master trap and meter combination to serve an entire building. Systems designed for more than one master trap and meter combination in different parts of a building shall not be installed unless written approval has been obtained from the Board. Condensate disposal shall be the responsibility of the property owner once it passes through the Board's meter. All piping shall be supported so that none of its weight depends on the meter or master trap, except when the pipe length between the two is three (3)feet or less. 2. Condensate: The Customer shall provide a condensate piping system in accordance with the following. (1) Pipes carrying condensate from the entire system supplied by each Customer's Service Valve shall be connected to a single pipe ahead of the master trap assembly or the pump receiving tank. (2) Provide a readily accessible screwed cap or plug and a valve slightly above and at each end of every concealed portion of piping or wherever leakage or the effects of leakage will not be obvious. Use copper or other non-ferrous pipe,without joints if practicable, for such piping. (3) When sections of the condensate piping depend on a water column to move the condensate, air loops or automatic vents ahead of the flooded portion shall be provided. (4) Unrestricted gravity flow, without pockets or lifts, should be provided wherever practicable. Unavoidable flooded portions, such as loops around doorways, are to be copper or other non- ferrous pipe. Where lifts are unavoidable, the maximum amount of lift to the master trap shall be determined by the characteristics of the system and approved by the Board before installation. (5) Sufficient drainage capacity shall be provided at the meter outlet to allow for gravity discharge at the maximum rate of condensate flow. Extend a short drain pipe riser loosely around the smaller meter outlet nipple wherever extension of the drain pipe is necessary to reach a floor drain or sewer. (The Board may strap the outlet piping to the meter support). 3. Master Trap: For low, medium and high pressure systems except those equipped with a pump and surge tank, the Customer shall install a steam master trap ahead of the meter. The Customer shall in accordance with Board standards furnish and install the valve, strainer, and union just ahead of the trap inlet, and a union close to the trap outlet if the trap is not close to the meter inlet union. The trap may be at any convenient readily accessible location between the meter and the last branch connection into the condensate main. Capacity of the master trap, or traps, as rated by the Manufacturer shall be at least equal to the maximum condensate rate of the system at the maximum condensate (water column) pressure available, without flooding equipment, provided that this maximum pressure is not more than 48 inches. ADOPTED: 7/22/03 RFPPr'TTVR• A/1 In l Page 23 of 2702-7 WATER Lansing Board of Condensate and Traps Water and Light Steam Rule and Regulation 11 4. Condensate(Surge) Tanks: The Customer shall provide a condensate (surge) tank instead of a master trap for systems which are equipped with a condensate pump or a vacuum pump. The volume of the tank shall be at least equal to the quantity of condensate discharged by the pump during two operations of the float-operated switch. The Customer shall also: (1) Install a valve in the single gravity discharge pipe from the bottom of the tank to the meter if the bottom of the tank is more than 12 inches above the meter inlet. (2) Provide a short, open vent pipe at the top of the tank, independent of the condensate inlet pipe. If the pump is a vacuum type, connect both the condensate and air discharge pipes to the top of the tank, independently. (3) Provide an emergency by-pass to a floor drain around the pump receiver. 5. By-pass Valve: The Customer shall in accordance with Board standards install a 3 valve by-pass around the master trap for any system having a maximum load in excess of 2200 pounds per hour. ADOPTED: 7/22/03 WATER Lansing Board of System Extension & Service Deposit IN Water and Light Steam Rule and Regulation 12 System Extension & Service Deposit 1. General: When application is made for steam service which requires the extension of the Board's existing Steam Distribution System, the Board will make such extensions when the estimated annual revenue, probable stability of the load and prospective load growth reasonably warrant the capital expenditure required. 2. Distribution System Extension and Customer Steam Service: The Board shall bear the cost of an extension of its existing Steam Distribution System and installation of a Customer Steam Service up to one and one-half (1`/z) times the estimated annual revenue from Customers to be immediately served. Refunds Steam Distribution System extension deposits made with the Board shall be subject to refund without interest during the first five (5) twelve (12) month periods following the month in which each such extension is completed. Refunds will only be made to person(s) making the deposit and shall cease when they equal the amount deposited or at the close of the fifth twelve (12) month period following the month during which the line extension is completed, after which the Board shall have no further obligation to refund any remaining portion of the line extension deposit. The Board will refund to the parry making the deposit an amount equal to one and one-half(1'/2) times the estimated annual revenue for each additional new Customer who is furnished service from such extension. Reconciliation If at the end of three (3)years from the date which the Board deems the Customer Steam Service to be operational, the actual cost of the Steam Distribution System extension and Customer Steam Service exceeds the sum of three (3) years actual operating income, plus the Customer's contribution-in-aid to construction,the Customer shall pay the difference. ADOPTED: 7/22/03 WATE-a'- Lansing Board of System Extension & Service Deposit IM Water and Light Steam Rule and Regulation 12 3. Customer Steam Service Only: The Board shall bear the cost of the installation of a Customer Steam Service up to one (1) times the estimated annual revenue from Customers to be immediately served. Reconciliation If at the end of one (1) year from the date which the Board deems the Customer Steam Service to be operational, the actual cost of the Customer Steam Service exceeds the sum of one (1) year actual operating income, plus the Customer's contribution-in-aid to construction, the Customer shall pay the difference. ADOPTED: 7/22/03 WATER&LI-GHT Lansing Board of Schedule of Fees & Charges go Water and Light Steam Rule and Regulation 13 Schedule of Fees & Charges STEAM FEES and CHARGES Charge Description When Applied Charge Security Deposits—Residential Unacceptable Credit History—Normal credit risk Steam Deposits may be larger for higher than normal $139 credit risk Security Deposits—Commercial& Unacceptable Credit History—Normal credit risk 1.5 times average monthly bill Industrial Deposits may be larger for higher than normal credit risk Reconnection fee Non-pay(Normal hours) 7:30am—7:00pm weekdays $75 Non-pay(Other than normal hours) Holidays and other than normal hours $100 Meter Tampering $100 Charges other than those published Relocations,damages,etc. At cost ADOPTED: 7/22/03 -_11 -„ n---'1-7 -4r1) r)-i I ATTACHMENT E WATE' R� 7-11GHT Lansing Board of Water and Light Rules and Regulations For Chilled Water Service ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Lansing Board of on Water and Light Table of Contents TABLE OF CONTENTS PAGE Definitions_____________ NUM BER AppUcuboofor Service ---� ------------------------ Service Conditions ---------------------' 4 -------------� ------------� � Character of Service ------------ ------------------------------------� Description of Service ---------------------------------------------- ` of8on�c� ------------------ - Availability— --------------_______________ -------------� 6 Agreements Material -------------------________________----------------.� 6 ----~��--- ------- 7 UuoofSxrvicc—' -----------� --------� ---------' ? Gooeru ----. ----------- -'------- --------- Q Access and Damages ------ ------- Table of Contents Lansing Board of Water and Light 19 General................................................................ ..........**............. ..............................20 Customer connections to Board Facilities.......................... ....... ............20 ...I.....I.................................................... ......20 Customer Chilled Water Piping............................................ ...I................... Installation and Maintenance of Chilled Water Services....................................................... ........I........20 Chilled Water Facility Relocations and Removals...................................................... .....23 System Extension&Service Deposit..................... General..........................*...............'­' ...............................21 Distribution System Extension and customer Chilled Water Service............................... -...I...........................21 Customer Chilled Water Service Only............................ ....... ..................... ..........22 Schedule of Fees &Charges ADOPTED: 7/22/03 Page 3 of 22 EFFECTIVE: 9/1/03 WATE— a"-IGHT Lansing Board of Water and Light Definitions Chilled Water Rule and Regulation 1 DEFINITIONS OF TERMS AND THEM A_BBREVIATIONS BOARD— When used in these Rules and Regulations, Board is an abbreviation meaning the Board Of Water and Light. BTU- British Thermal Unit, the heat necessary to raise one pound of water one degree Fahrenheit. g� CHILLED WATER DISTRIBUTION SYSTEM — The system of Chilled Water Mains, pipes, fittings ute chilled water valves and all equipment and appurtenances thereto, necessary to distribter to Customer Chilled Water Service. b CHILLED WATER MAIN—The pipes owned and maintained by the Board that conveys chilled water to and from a Customer Chilled Water Service. CUSTOMER—A purchaser of chilled water service supplied by the Board. CUSTOMER PIPING—A piping system owned or controlled by the Customer that conveys chilled water from the Service Location throughout the Customer's Premises. CUSTOMER CHILLED WATER SERVICE — Those pipes, valves and appurtenances installed between a Chilled Water Main and Customer Piping. DEMAND— The rate of chilled water delivered at a given point in Tons of refrigeration. FACILITIES— A general term which includes pipes, fittings, valves, associated structures used as a part of or in connection with a chilled water installation. and the like PREMISES— A building and its grounds. RATE— The unit prices as established by the Board's rate-making body and the quantities to which they apply as specified in the Rate Schedule. RATE SCHEDULE—A filed statement of the chilled water Rate and the terms and conditions governin its application as established by the Board's rate-making body. g RTU- Remote Telemetry Unit housing Board owned Chilled Water metering and monitoring n g SERVICE LOCATION — The point at which the Board has agreed to provide chilled water service to Customer Piping. SERVICE VALVES — The valves installed by the Board at the Service Location at the customers property line. TON- A unit of refrigeration. One Ton equals to 12,000 BTU/hr. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Paoe 4 of 9? WATE- Lansing Board of Application for Service I= Water and Light Chilled Water Rule and Regulation 2 Application for Service 1. General Copies of the Board's Rate Schedules for chilled water service are open to public inspection at the Board's offices and are available on the Board's Internet Web site www.lbwl.com or upon request. Application for original, modified or added service shall be made at the office of the Board of Water and Light at 1232 Haco Drive, Lansing. Any Customer receiving or agreeing to receive chilled water service from Board Facilities shall be deemed a Customer of the Board subject to its Rates and these Rules and Regulations and responsible for the service used whether such service is provided under a signed agreement or not. Chilled water service will not be supplied to new or remodeled buildings until such installations comply with these Rules and Regulations. The Customer should contact the Board's System Integrity & Customer Projects Department to determine the characteristics of the chilled water service available at the Premises. The System Integrity & Customer Projects Department will inform the Customer of the Board's requirements, which must be fulfilled by the Customer, in order to receive chilled water service. The Board may discontinue chilled water service to any Customer for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. The Customer must pay a reconnection fee as stated in Rule 12 to cover the costs of restoring chilled water service that has been discontinued for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. ADOPTED: 7/22/03 EFFECTTVF- 8/1/03 Paize 5 of22 WATER&�HT Lansing Board of Service Conditions Im Water and Light Chilled Water Rule and Regulation 3 Service Conditions 1. Character of Service The Board produces and distributes chilled water for public use throughout its service area and will endeavor, but does not guarantee, to furnish a continuous supply and to maintain chilled water temperature and pressure within reasonable limits. The Board shall not be liable for interruptions in the service including without limitation, variations in the service characteristics, or for any loss or damage of any kind or character occasioned thereby, due to causes or conditions beyond the Board's reasonable control, and such causes or conditions shall be deemed to specifically include, but not be limited to, the following: acts or omissions of Customers or third parties; operation of safety devices except when such operation is caused by the negligence of the Board; loss of electrical power needed to operate the Board's control valve, metering, and monitoring equipment; absence of an alternate supply of service; failure, malfunction, breakage, necessary repairs or inspection of machinery, Facilities or equipment when the Board has carried on a program of maintenance consistent with the general standards prevailing in the industry; act of God; war; action of the elements; storm or flood; fire; riot; sabotage; labor dispute or disturbance, or the exercise of authority or regulation by governmental or military authorities. Notwithstanding any other provision of these rules,the Board may interrupt or limit chilled water service to Customers without prior notice and in a manner that appears most equitable under the circumstances then prevailing or as necessary to protect the health, safety and welfare of its employees or Customers. The Board shall be under no liability with respect to any such interruption or limited supply. 2. Description of Service A. Availability of Service (1) Chilled water service is available twelve (12) months a year to Customers in the City of Lansing except where the Board has determined it to be impractical to serve. (2) The Board will endeavor to deliver Chilled Water Service at a maximum supply temperature not to exceed 44 degrees Fahrenheit. (3) The Board will endeavor to deliver Chilled Water Service with maximum pressure not to exceed 120 psig and minimum pressure of not less than 100 psig. (4) Chilled water service is not available where the Board must bring the Customer Chilled Water Service across another parcel or lot in order to provide service. (5) In the case where there is more than one Chilled Water Main capable of providing service, the Board shall determine which Chilled Water Main will be used for service and the location of the Customer Chilled Water Service connection. ADOPTED: 7/22/03 WATE- Lansing Board of Service Conditions Water and Light Chilled Water Rule and Regulation 3 B. Agreements The Board shall require the Customer to enter into a written agreement that details the terms and conditions and price to be paid by the Customer prior to chilled water service construction. In addition,the Board may negotiate written contractual arrangements as to the provision of necessary service Facilities, duration of service, amount of deposit and refunds thereon, minimum bills or other service conditions for Customers or prospective Customers whose load requirements exceed the capacity of the available distribution system in the area or whose load characteristics or special service needs require unusual investments by the Board in service Facilities or where there is not adequate assurance of the permanent use of the service. No promises, agreements or representations of any agent or employee of the Board shall be of binding force upon the Board unless the same is within the authority of that individual and incorporated in the written agreement. C. Material Availability Subject to the restrictions contained in Rule 3.2.A, the Board will construct chilled water distribution Facilities and extensions only in the event it is able to obtain or use the necessary materials, equipment and supplies. The Board may, in its discretion, allocate the use of such materials, equipment and supplies among the various classes of Customers and prospective Customers of the same class. ADOPTED: 7/22/03 FFFFCTTVR• R/1/03 Page 7 of 22 WATER Lansing Board of Use of Service Water and Light Chilled Water Rule and Regulation 4 Use of Service 1. General Chilled water is supplied to a Customer for exclusive use on the Premises to which it is delivered by the Board. Service may not be shared with another, sold to another, or transmitted off the Premises without the written permission of the Board, except as noted in Rule 6. Use of chilled water is only for the purposes authorized by the Board and is not to be extended to another building without authorization of the Board. 2. Access and Damages The Customer shall provide and maintain appropriate access and working space around chilled water Facilities in accordance with all applicable Board standards so as to permit ready and safe operation and maintenance of such Facilities. The Board's authorized personnel or agents of the Board shall have access to the Customer's Premises at all reasonable hours for all purposes necessary to conduct business, including without limitation: 1) install, inspect, read, repair, maintain, test or remove its meters and fiber optics 2) install, operate and maintain other Board equipment or Facilities, and 3) inspect service installations, Customer Piping, and to determine the connected chilled water Demand. If the meters, metering equipment or other Board property are damaged or destroyed through the neglect of the Customer, the cost of necessary repairs or replacements shall be the responsibility of the Customer. If, for any reason beyond its control, the Board is unable to read a meter, operate, maintain or make inspection, including but not limited to, reasons such as Premises being locked, meter being inaccessible or unsafe conditions, then after due written notice to the Customer, the chilled water service may be disconnected until such time as arrangements have been made to permit access for Board inspection and approval and the Customer has paid the appropriate reconnection fee as stated in Rule 12. 3. Customer Piping and Equipment The Board may deny or terminate service to any Customer whose Customer Piping or equipment constitutes a hazard to the Board's employees, equipment or its service to others. However, the Board is not responsible to inspect Customer Piping or equipment and shall not be held liable for any injury or damage resulting from the condition thereof. The Customer shall install and maintain the necessary facilities or devices to protect Customer owned equipment against service interruptions and other disturbances on the Board's system. Alterations to the Customer Chilled Water Service or associated equipment are prohibited without approval of the Board. 4. Chilled Water Quality and Disturbances The Customer shall operate equipment in a manner that does not cause surges, water hammer or other problems in the Chilled Water Distribution System or to other Customers. If the Board notifies the Customer of such a condition, the Customer shall discontinue operation of equipment causing such condition until a correction has been made. ADOPTED: 7/22/03 WATE-- Lansing Board of Use of Service Water and Light Chilled Water Rule and Regulation 4 5. Improper Use and Tampering Any person that uses chilled water without snaking proper application for chilled water service shall be responsible for all charges for chilled water service. The amount of such charges shall be determined by the Board either by meter readings or on the basis of calculated consumption for the time chilled water was used. If chilled water is being used by a Customer without proper application for service or chilled water service connection, the Board may discontinue service without notice. In case of such discontinuance of service, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 12. The Board may discontinue service and seek criminal charges, if it is determined that the meter or piping on the Customer's Premises has been tampered with or altered in any manner to steal chilled water. If the Board discontinues service for this reason, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 12, made appropriate restitution for stolen service and made provisions for metering and/or piping changes as may be required by the Board. ADOPTED: 7/22/03 FFFFC'TTVF.• R/1/03 Page 9 of22 WATE' R-I-' Lansing Board of Metering Water and Light Chilled Water Rule and Regulation 5 Metering I. General All chilled water sold to Customers shall be measured by commercially acceptable measuring devices owned and maintained by the Board except where it is impractical to meter, such as for temporary or special installation, in which cases the consumption may be calculated. If for any reason all the chilled water used cannot be registered accurately the unmetered portion shall be estimated by the Board on the basis of prior consumption or the operating characteristics of the building and equipment. 2. Sizing/Installation/Ownership The Board shall furnish, own and maintain metering and monitoring equipment consisting of RTU cabinet, temperature elements and transmitters, flow transmitters, differential pressure transmitters, and temperature control valves for installation by the Customer. The Customer shall provide two 120 VAC 20 AMP power circuits to the RTU cabinet. The Board shall install, own and maintain all communication and control wiring for the metering and monitoring equipment. 3. Equipment Location A. The Customer shall provide, at no expense to the Board, a space/enclosure suitable to the Board for the installation of the necessary metering equipment. The Customer shall furnish the space and the provisions for mounting metering and service equipment to meet Board requirements. Inquiries regarding installation requirements should be directed to the Board's System Integrity& Customer Projects Department. B. The Customer shall locate metering equipment inside the building served in a well ventilated area with ample space for meter reading and maintenance. C. The Customer shall not place metering equipment in a pit below floor level, in a rest room or on a platform higher than thirty (30) inches above the floor unless Board approved steps and platform are installed. 4. Damaged Meter The Customer shall be held liable for damage to the metering and monitoring equipment, and communication and control wiring from acts of carelessness, negligence or willful damage by owner or his tenants. The Board will repair any meter so damaged, and the cost shall be billed to the Customer. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 WATE'�— Lansing Board of Application of Rates go Water and Light Chilled Water Rule and Regulation 6 Application of Rates 1. General: Chilled Water Rates are predicated upon the Board not being required to provide not more than one Customer Chilled Water Service to a building or structure. The Board shall separately meter and separately bill service at different points or at different buildings or structures unless specifically provided for in the applicable Rate Schedule. 2. Resale: The owner or operator of an office building, apartment building, shopping mall, or similar structure may purchase chilled water from the Board for resale to occupants on the condition that service to each occupant shall be metered separately and that the occupants may not be charged more for such service than the appropriate Rate of the Board available for similar service under like conditions. In order to qualify for resale to tenants, the owner or operator must state their intent to resell in the application for service. The renting of Premises with the cost of chilled water service included in the rental as an incident of tenancy will not be considered a resale of such service. 3. Billing: Customers having more than one meter shall have consumption computed by individual meter in accordance with the current Rate Schedule and contract. 4. Minimum Charges: A minimum charge, as defined by the Rate in effect, shall be applied to all services and billed to the Customer. Where the Customer requests that a service be discontinued, the Board shall deactivate the service by any appropriate means, including without limitation, removing the metering devices and by disconnecting the service from the Board's Chilled Water Distribution System. 5. Property Owner-Rental Agent Agreement for"Leave On" Service: The BWL may waive application charges to maintain continuity of service at rental property locations provided: (1) the landlord agrees in writing to assume the responsibility for chilled water service during the interim between tenants, and(2)the landlord is in compliance with all other rules and regulations of the Board. ADOPTED: 7/22/03 Page 11 of 22 FFFFf TTVR• R/1/n3 WATE� R'—T Lansing Board of Responsibility for Payment of Bills Water and Light Chilled Water Rule and Regulation 7 Responsibility for Payment of Bills 1. General Each Board Customer is responsible to pay all utility bills as rendered on or before the due date shown thereon. The Customer remains responsible for payment of the bills until the Customer orders service to be discontinued and the Board has had reasonable time to secure a final meter reading. Bills are rendered on approximately a monthly basis. Bills are mailed to Customers approximately fifteen (15) days before the due date shown on the bill. The Customer shall pay the net amount if paid on or before the due date on the bill. Failure on the part of the Customer, through no fault of the Board, to receive the bill shall not entitle the Customer to pay the net amount after the due date of the bill. If a bill remains unpaid after issuing a five (5) day written shut-off notice, the Board shall have the right to discontinue service. In extenuating circumstances, a Customer will be afforded the opportunity to make payment arrangements. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not in dispute. 2. Estimated Consumption Readings may be estimated when conditions warrant. Until reconciled by an actual reading, bills rendered on estimated consumption have the same force and effect as bills rendered on actual meter readings. 3. Billing Errors When an error is found to exist in the billing rendered to a Customer, the Board will correct such error to recover or refund the difference between the original billing and the corrected billing. Corrected billings will not be rendered for periods in excess of three (3)years. Refunds to Customers will normally be made promptly upon discovery of the error. Amounts due the Board from the Customer will be subject to normal collection policy and procedures. 4. Account Security Deposits The Board shall require an account security deposit from any new or existing Customer with an unacceptable credit history. The Board may apply different rules to new Customers signing up for service in accordance with Rule 7A.C. The deposit is normally 1.5 times the average monthly bill (actual or estimated) as determined by the Board. If a deposit is required for new residential Customers, the Board shall determine the amount in accordance with Rule 12. To determine the deposit for new commercial and industrial Customers, the Board will estimate the average monthly bill and apply the 1.5 factor. The Board may waive deposits in special circumstances. The Board may also demand deposits larger than 1.5 times the average monthly bill if the Board determines that a Customer presents a higher than normal credit risk. The Board will refund deposits to all Customers who have taken service for 12 months and have an acceptable payment history. The Board will also refund deposits to Customers who have terminated service and paid all charges due. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 .,_ wATE- R-- Lansing Board of Responsibility for Payment of Bills Water and Light Chilled Water Rule and Regulation 7 A. A security deposit may be required in any of the following circumstances: (1) The Customer has deliberately misinformed or misrepresented facts to the Board. (2) The Customer has tampered with the meter during the last 12 months. (3) The Customer has had one or more payments canceled in the last 12 months due to: (1) non- sufficient funds returned check, (2) account closed returned check, (3) non-sufficient funds bank bill, (4) account closed bank bill, or(5)credit card reversal. (4) The Customer has received a final notice on any account within the last 12 months. (5) The Customer has received more than 3 second notices on any account during the last 12 months. (6) The Customer has a past due balance on any account that is greater than$50.00 for more than 31 days past due in the past 12 months. (7) The Customer has a suspended or bad debt account within the last 12 months. B. If the Customer is applying for service through an artificial legal entity such as a corporation, or limited partnership,then the Board may request a deposit or other security of payment. C. New Customers will not be required to submit a deposit, in any of the following situations: (1) The Customer has no previous service history with the Board. (2) The Customer has previously established an acceptable payment history with the Board on a similar account. (3) The Customer's bill is paid by the State of Michigan. (4) The Customer secures a guarantor with a similar account and an acceptable payment history. (5) The Customer provides an acceptable surety bond. (6) The Customer provides an acceptable credit reference letter from a similar utility company for a similar account. Account must have been in the Customer's name and maintained for a minimum of 12 consecutive months. (7) The Customer has established an acceptable credit rating with a credit-reporting agency. ADOPTED: 7/22/03 Page 13 of 22 U-Ur rr•rT-,M- SZ/1/()'l WReWATE' R'- Lansing Board of Dispute and Hearing Procedure ater and Light Chilled Water Rule and Regulation 8 Dispute and Hearing Procedure 1. Disputes hi accordance with the Lansing City Charter, the Board is required to provide a fair and equitable dispute and hearing process for its Customers as follows: A. When any Customer disputes a bill or service and the Board is so advised, the date of the notice of dispute will be recorded. B. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not disputed. C. The disputed bill or service will be investigated promptly and completely. D. The Customer will be advised of the results of the investigation. E. An attempt will be made to resolve the dispute in a manner mutually satisfactory to both parties. F. The Board will provide the opportunity for each Customer to enter into a reasonable settlement agreement in order to mutually resolve the disputed claim or to satisfy any liability not in dispute. G. If a settlement cannot be reached between the Customer and the Board's Account Administrator, the Customer may choose to appear before the Board's Dispute Review Committee. The review will be scheduled within ten(10)days of the request or as mutually agreed to by both parties. H. If a settlement cannot be reached following examination by the Dispute Review Committee, the account will be referred to the Board's General Manager. I. If a settlement is not reached after review by the Board's General Manager,the Customer shall be afforded an opportunity for a hearing. J. The Customer shall be responsible for payment of all other bills or portions of bills as rendered which are not in dispute, 2. Hearings A. Any Customer who disputes the services provided or a billing for services furnished in accordance with the Board's filed Rates, Rules and Regulations or established policies or procedures may request a hearing. If a hearing requested is based on a disputed past due bill, the request must be made within ten (10) calendar days following the final outcome of the dispute process. Any request for a hearing may be made in writing and received by the Board's corporate office at 1232 Haco Drive,Lansing,Michigan, 48912. B. On receipt of a request for a hearing, the Board will forward this request to an independent Hearing Officer. The Hearing Officer will arrange a time for the hearing and advise both the Customer and the Board of the date, time and location in writing. The hearing will be scheduled during normal business hours. Failure of the Customer or Board to attend the hearing without due cause or prior request for adjournment will constitute a waiver of right of that party to the hearing. C. The Board and the Customer shall: (1) Have the right to be represented by Counsel or other persons of their choice. (2) Have the right to present evidence, testimony and oral and written argument. (3) Have the right to cross-examine witnesses appearing on behalf of the other parry. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 WATE-- Lansing Board of Dispute and Hearing Procedure Water and Light Chilled Water Rule and Regulation 8 (4) Have the right to have the hearing recorded by a court reporter at the expense of the Customer. The Hearing Officer shall also have the right to have the hearing recorded by a court reporter. Recordings will be preserved at least six (6) months from the date of the hearing. All evidence relevant to the dispute will be received. D. For each hearing, the Hearing Officer shall compile a hearing record which will contain; (1) A concise statement in writing of the position of the Board in relation to the dispute. (2) A concise statement in writing of the position of the Customer in the dispute. (3) Copies of all evidence submitted by the parties. E. If a decision is reached during the hearing, the Hearing Officer shall state the decision to both parties. If the Hearing Officer does not reach a decision during the hearing, additional time will be allowed to reach a decision. When a decision has been reached, either at the hearing or later, the Hearing Officer will prepare a report which shall contain the following: (1) A concise summary of the evidence and argument presented by the parties. (2) The decision and a statement that the decision of the Hearing Officer was based solely on the evidence presented and reasons therefore. (3) Advise that the representatives of the Board and the Customer have a right to file an appeal with the Board of Commissioners. (4) A statement as to any settlement agreement. (5) A statement that the dispute determination is binding on both parties unless appealed to the Board of Commissioners within ten(10) days of the date of mailing of decision, and that any request for appeal must be in writing to the Corporate Secretary. F. The Hearing Officer shall file the written report with the Board of Commissioners and the Mayor of the City of Lansing. A copy of the report shall be sent to the Customer via certified mail. G. If the dispute is unresolved and the decision appealed, the Hearing Officer shall make recommendations to the Board of Commissioners on the dispute. The Secretary of the Board will arrange a time for the appeal and advise both the Customer and the Board of the date, time and location in writing. Failure of the Customer to appear at the time set for the appeal without due cause, or to request an alternate date,will constitute a waiver of right to appeal. H. The Board of Commissioners shall report its final action on any unresolved disputes together with the Hearing Officer's report and recommendations to the Mayor and the City Council of Lansing, Michigan. I. The Mayor may make recommendations to the Board of Commissioners on each unresolved dispute. ADOPTED: 7/22/03 Page 15 of 22 r17R V F('TTR. Rm i i WATER T Lansing Board of Distribution System Extensions Water and Light Chilled Water Rule and Regulation 9 a � - Distribution System Extensions 1. General: A. Request for Distribution System Extension Rule 9 sets forth the conditions under which the Board will extend its Chilled Water Distribution System. B. Ownership The Board shall provide, own, maintain and specify all of its distribution Facilities including location. No ownership rights to Board Facilities shall pass to any owner(s), developer(s), or Customer(s)by reason of any contribution required hereunder. C. Availability of Distribution System Extension The Board shall in its sole discretion determine whether or not any particular Chilled Water Distribution System extension shall be made, regardless of its intended use, and establish any special conditions or requirements that may apply, including but not limited to entering into an agreement with a developer, properly owner(s)or Customer. Chilled Water Distribution System extensions are generally available throughout the chilled water service area if the requested service will not disturb or impair service to prior users and is within or contiguous to areas presently served. D. Installation of Distribution System Extension All Chilled Water Distribution System extensions shall be installed by the Board or its agent. Chilled Water Distribution System extensions shall be installed in public right-of-way except in certain cases where, at the Board's discretion, they may be installed in dedicated recordable easements on private property at no cost to the Board. The Customer shall provide the Board a final preliminary approved site plan for Board review and approval. Installation of a Chilled Water Distribution System extension will be initiated provided: (1) The Customer has entered into a written agreement with the Board for the construction of the Chilled Water Distribution System extension. (2) The Customer has paid any deposits as required by Rule 7.4 and Rule 11 for the Chilled Water Distribution System extension and any required system reinforcement. (3) Where applicable, the Customer has recorded the plat or final preliminary approval has been received, monuments or markers are in place, lot lines staked, sewers installed, streets at finished grade (before gravel and curb and gutter installation), sidewalk grading completed, and the ground in workable condition. (4) Construction during the winter season will only occur at the Board's discretion. E. Adequate Temperature,Pressure and Flow Capacity The Board shall not make Chilled Water Distribution System extensions unless adequate temperature, pressure and flow capacity is available at the location of the Chilled Water Distribution System extensions as determined by the Board. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 WATER a� Lansing Board of Distribution System Extensions go Water and Light Chilled Water Rule and Regulation 9 Where a Chilled Water Distribution System reinforcement is required to provide adequate temperature, pressure and flow capacity at the location of the Chilled Water Distribution System extension, the Customer shall bear the cost of such Chilled Water Distribution System reinforcement in accordance with Rule 11. F. Economic Development Offsets Where the Board determines that the Chilled Water Distribution System extension will promote development that provides substantial and sustainable economic benefits to its Customers or the Lansing region, the Board will consider an offset to its fees and charges and/or an economic incentive subject to its availability. G. Easements Where the Board has agreed to construct the Chilled Water Distribution System extension in an easement and prior to such construction, the owner(s), developer(s) or Customer(s) shall be required to furnish, at no expense to the Board, recordable easements in a form satisfactory to the Board. The easement shall grant right-of-ways suitable for the ingress, egress and the installation and maintenance of the Chilled Water Distribution System extension including any Chilled Water Distribution System equipment as designed by the Board for present and future service. In the event the required easements are not provided by the owner(s), developer(s) or Customer(s) for such extension, the Board may elect to construct all or any part thereof along public highways or other private property. In such event, the Board may require the owner(s), developer(s) or Customer(s) to pay the added construction expense occasioned by the use of such highways or other private property, plus any expense encountered in acquiring permits and easements on other private property when necessary to provide service to the owner(s), developer(s) or Customer(s). H. Non-Standard Equipment Where the Customer requests that the Board utilize equipment which differs from its normal specifications, purchased or installed, the Board may elect to provide such non- standard equipment with the Customer paying any additional cost. I. Non-Standard Construction Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. J. Other Facilities It will be the responsibility of the owner(s), developer(s) or Customer(s) to identify and provide locations of any existing privately owned underground facilities such as lawn sprinkler systems, field drainage systems, septic tanks, Customer owned electric lines, etc. If privately owned facilities are not properly located, the Board does not assume responsibility for any damage to these facilities. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 17 of 22 WATE�R&LIGHT Lansing Board of Distribution System Extensions Water and Light Chilled Water Rule and Regulation 9 K. Construction Date of Distribution System Extension The Board, based on availability of work crews and material, and subject to approvals of the appropriate regulatory agencies, utilize best efforts in constructing the Chilled Water Distribution System extension to meet a mutually agreed upon date. 2. Chilled Water Facility Relocations and Removals: (1) At the request of a Customer or developer, or as required due to a conflict, or to meet Board Standards,the Board will relocate or remove its chilled water Facilities provided: A. The relocation or removal is feasible and meets Board Standards. B. The Customer or developer obtains approval from all Customers impacted by the proposed relocation. C. The relocation or removal does not degrade chilled water reliability or quality. D. All governmental approvals, permits and easements are obtained. Prior to any relocation or removal of chilled water Facilities, the Customer or developer shall be required to make a nonrefundable contribution in aid of construction. The aid in contribution of construction shall reimburse the Board for all relocation and removal costs including material, labor, the cost of breaking and repairing streets, walks, parking lots, driveways, etc., repairing lawns, replacing shrubs, flowers, etc., and any right-of-way costs as per this Rule 9, phis the cost of any necessary modifications to the Board's Chilled Water Distribution System affected by the relocation or removal, less the salvage value of any portion of the chilled water Facilities removed. (2) If, at any time subsequent to completion of the Chilled Water Distribution System extension, it is found that Chilled Water Mains or related Facilities are not at the correct location or at the proper elevation due to changes beyond the control of the Board, the Customer or developer shall reimburse the Board to relocate Chilled Water Mains or related Facilities to the correct location or at the proper elevation. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 18 of22 WATER&— Lansing Board of Services Im Water and Light Chilled Water Rule and Regulation 10 Services 1. General: The Customer Chilled Water Service shall be furnished, installed, owned and maintained by the Board. In the course of maintaining or repairing a Customer Chilled Water Service, the Board shall bear no responsibility for damage incurred or restoration to areas where the Customer Chilled Water Service passes under any area not readily accessible. The Customer shall be responsible for additional repair costs due to these encumbered services The Service Location shall be specified by the Board and shall be located so that the Board's service Facilities meet or exceed all clearance requirements and applicable local codes. Should it become necessary for any cause beyond the Board's control to change the Service Location, the entire cost of any changes in the Customer's service shall be the responsibility of the Customer. Should it become necessary for the Board to reinforce or upgrade the Chilled Water Distribution System to accommodate the requested service, a nonrefundable contribution in aid of construction may be required as determined by Rule 11. 2. Chilled Water Service: A. General The Customer shall provide the chilled water demand and a plot plan showing the proposed building size and location of proposed service entrance to the Board's System Integrity & Customer Projects Department. Customer Chilled Water Services shall be installed from the Chilled Water Main to the Customer's property line in the most direct manner. The pipe comprising the connection shall cross only that legally described property upon which the building to be serviced is located. It is the intent of the Board that all underground chilled water pipes be installed and maintained by the Board. However, where unusual or special circumstances exist,the Customer may request approval to install underground chilled water pipes. Applicants shall submit plans and specifications to the Board's System Integrity&Customer Projects Department for approval prior to installation. No person other than an authorized employee of the Board shall open or close the outside valve on the Customer Chilled Water Service. No person except an authorized Board employee shall tap, revamp or connect to a Chilled Water Main or any of the pipes comprising the Customer Chilled Water Service. The Customer shall flush the Customer Piping prior to connection to the Customer Chilled Water Service. The flushing shall remove all debris and foreign matter from the Customer Piping. The Board shall be notified of the date of flushing and given the opportunity to witness same. The Customer shall not use the Customer Chilled Water Service for cleaning or flushing of the Customer Piping. ADOPTED: 7/22/03 WATE- Lansing Board of Services go Water and Light Chilled Water Rule and Regulation 10 B. Customer Connections to Board Facilities It shall be the Customer's responsibility to connect Customer Piping to the Customer Chilled Water Service. All work shall be in frill compliance with all Board standards and applicable codes. The Customer shall not connect to the Customer Chilled Water Service except at the outlet side of the Board Service Valves. C. Customer Chilled Water Piping The Customer shall make sufficient provisions to support the Customer Piping so that the Board's Customer Chilled Water Service is not adversely affected. The Customer shall inform the Board of the date of connection to the chilled water system. The Board shall be afforded the opportunity to witness the connection. D. Installation and Maintenance of Chilled Water Services Installation of a chilled water service will be initiated provided: (1) The Customer has provided the Board a final preliminary approved site plan for Board . review and approval. (2) The Customer has entered into a written agreement with the Board for the construction of the chilled water service. (3) The Customer has paid any deposits as required by Rule 7.4 and Rule 11 for the chilled water service. (4) Where applicable, the Customer shall have the plat recorded or final preliminary approval received, monuments or markers in place, lot lines staked, sewers installed, streets at finished grade (before gravel and curb and gutter installation), sidewalk grading completed, and the ground in workable condition. (5) Construction during the winter season will only occur at the Board's discretion. Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. The Customer shall be responsible for additional repair costs due to encumbered Customer Chilled Water Services or damage as a result of negligence, willful damage or carelessness by the Customer, owner or tenants. 3. Chilled Water Facility Relocations and Removals: The Board will relocate or remove its chilled water Facilities in accordance with Rule 9.2 ADOPTED: 7/22/03 WATER&� Lansing Board of System Extension $ Service Deposit Water and Light Chilled Water Rule and Regulation 11 System Extension& Service Deposit 1. General: When application is made for chilled water service which requires the extension of the Board's existing Chilled Water Distribution System, the Board will make such extensions when the estimated annual revenue, probable stability of the load and prospective load growth reasonably warrant the capital expenditure required. 2. Distribution System Extension and Customer Chilled Water Service: The Customer may be required to pay all or a portion of the cost of an extension of the Board's existing Chilled Water Distribution System and installation of a Customer Chilled Water Service, based on an evaluation of the Board's recovery of capital cost along with other business related matters. 3. Customer Chilled Water Service Only: The Customer may be required to pay all or a portion of the cost of the installation of a Customer Chilled Water Service,based on an evaluation of the Board's recovery of capital cost along with other business related matters. ADOPTED: 7/22/03 WATE— Lansing Board of Schedule of Fees & Charges Water and Light Chilled Water Rule and Regulation 12 Schedule of Fees & Charges CHILLED WATER FEES and CHARGES Charge Description When Applied Charge Security Deposits—Commercial& Unacceptable Credit History—Normal credit risk 1.5 times average monthly bill Industrial Deposits may be larger for higher than normal credit risk Reconnection fee Non-pay(Normal hours) 7:30am—7:00pm weekdays $75 Non-pay(Other than normal hours) Holidays and other than normal hours $100 Meter Tampering $100 Charges other than those published Relocations,damages,etc. At cost ADOPTED: 7/22/03 ATTACHMENT F Economic Parameters For Fiscal Year 2004 Studies Fiscal Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Inflation Factor(0&M)-3% 1.030 1.061 1.093 1.126 1.159 1.194 1.230 1.267 1.305 1.344 Inflation Factor(Fuel) -2.7% 1.027 1.055 1.083 1.112 1.142 1.173 1.205 1.238 1.271 1.305 Capital Escalation Factor-4% 1.040 1.082 1.125 1.170 1.217 1.265 1.316 1.369 1.423 1.480 Minimum Rate of Return-Mandatory Projects 5.0% Minimum Rate of Return-Necessary Projects 8.0% Minimum Rate of Return-Discretionary Projects 12.0% Present Worth Factor-MRR 5.0% 0.9524 0.9070 0.663B 0.8227 0.7835 0.7462 0.7107 0.6768 0.6446 0.6139 Present Worth Factor-MRR 8.0% 0.9259 0.8573 0.7938 0.7350 0.6806 0.6302 0.5835 0.5403 0.5002 0.4632 Present Worth Factor-MRR 12.0% 0.8929 0.7972 0.7118 0.6355 0.5674 0.50666 0,4523 0,4039 0.3606 0.3220 Fixed Charge Rate-Banded Projects Project Payback Period(years) 5 10 15 20 25 30 -Mandatory Project 23.56% 13.21% 9.83% 8.19% 7.24% 6.64% -Necessary Project 25.55% 15.20% 11.92% 10.39% 9.56% 9.06% -Discretionary Project 28.30% 18.05% 14.9B% 13.66% 13.01% 12.66% Fixed Charge Rate-Projects Not Bonded Project Payback Period(years) 5 10 15 20 25 30 -Mandatory Project 23.10% 12.95% 9.63% 8.02% 7.10% 6.51% -Necessary Project 25.05% 14.90% 11.68% 10.19% 9.37% 8.88% -Discretionary Project 27.74% 17.70% 14.68% 13.39% 12.75% 12.41% System Avoided Cost Electric($/MWns) 17.43 17.49 17.59 17.71 17.86 16.32 18.79 19.28 19.77 20.28 Steam(SIMIb)[see note 1) -Water[see note 11 System Marginal Cost Electric(S/MWhs) 16.76 16.83 16.92 17.04 17.18 17.63 18.08 18.54 19.02 19.51 Steam($/Mlb) [see note 2] Water(S/CCF)[see note 2] Operating Expense Ratio(Excludes PILT and Depreciation) -Electric($O&M Expense/$Revenue) 0.62 0.62 0.62 0.62 0.62 0.83 0.83 0,83 0.83 0.83 -Steam($O&M Expense/$Revenue) 0,69 0.69 0.69 0.69 0.69 0.87 0.87 0.87 0.87 0.87 -Water($O&M Expense/$Revenue) 0.34 0.34 0.34 0.34 0.34 0.73 0.73 0.73 0.73 0.73 Average System Loss Factors Electric(1-Retail Sales/Net Gen Req) 3.8% 3.8% 3.8% 3.8% 3.B% 3.8% 3.8% 3.B% 3.8% Steam(1-Retail Sales/Net Gen Req)[see note 31 Water(1-Sales/Net Pumpage to System) 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% MPPA Capacity Revenue offset($/MW/month) 3,000 3.090 3.183 3,278 3,377 Payment in Lieu of Taxes(PILOT) 4.0% Notes: 1 For Steam and Water Avoided Costs contact Bulk Power and Resource Planning at 702-6504. 2 For Steam and Water Marginal Costs contact Bulk Power and Resource Planning at 702-6504. 3 For Steam System Losses contact Bulk Power and Resource Planning at 702-6504. 4 For Net&Gross Replacement Power Costs,and unit annual capacity factors contact Bulk Power and Resource Planning at 702-6504. ATTACHMENT G I Boo Memo To: John Elashkar,Director and General Manager From: Dana W. Tousley, Chief Financial Officer William Cook,Jr.,Assistant General Manager Date: July 2, 2003 Re: Revision of Indirect Cost Methodology and Application This memo is a summary of the recommendations of the task force assigned to review the Board of Water and Light's indirect cost methodology. Indirect cost rates are used to add overhead costs to direct labor, direct material and other direct charges. The two primary applications are capitalizing capital projects and billing customers for construction work done by board forces. The task force recommended the following changes: Direct Labor—Decrease from 103%to 72% ® Material—Decrease from 13%to 3.5% a T &D Engineering and General—Decrease from 14%to 10% Equipment—Continue to use the existing hourly rate structure The changes are based on the task force review of the detail components included in corporate, T&D, and material overhead. The above percentages should be used in all cases except where other guidelines exist such as MDOT contract work and reimbursable work generally required by the State or Federal Government within city limits. The task force concluded that the level of work force capital expenditure activity does not directly affect the following overhead cost components: a Charges to overhead accounts by Managers,Directors, and General Manager s Expenses associated with general facilities Charges to overhead accounts by Human Resources,Environmental Services and the Information Technology Resource Center • Property and Casualty Insurance ® Injuries and Damages caused by others Accordingly the charges associated with these activities were excluded from the calculation of the indirect cost rates and resulted in the recommended decreases in rates. This change in indirect cost rates has consequences for budgeted net income. The FY 2004 budget used the old indirect cost rates to calculate the transfer from administrative and general expenses to capital of all overheads during the fiscal year. The estimated transfer was $9 million. The recommended change in indirect cost rates reduces this transfer to an estimated $6 million, See the revised budget for FY 2004 attached to this memo. The$3 million shirt affects net income and capital expenditures. Page 43 Preliminary—Subject to Board Approval MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, July 22, 2003 The Board of Commissioners met in regular session at 5:30 p.m. on July 22, 2003, in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Nancy W. Duncan, Tim Haggart, Connie Marin, Diane R. Royal, Robin M. Smith, and Nancy A. Wonch. Absent: Commissioners Ronald C. Callen, and Ifield P. Joseph. The Secretary declared a quorum present. Vice Chair Royal called the meeting to order at 5:30 p.m. APPROVAL OF MINUTES Motion made by Commissioner Haggart, seconded by Commissioner Smith, to approve the minutes of the special board meeting held July 8, 2003. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF THE MEETING. The following statement was made by BWL employee Calvin Jones. "Good evening honorable Commissioners, BWL Interim General Manager John Elashkar, BWL Secretary Mary Sova, BWL Internal Auditor Kellie Willson and BWL Employees. My name is Calvin Jones, I live at 5717 Pembrook Place, Lansing, Michigan. On November 12, 2003 my family received a call that our daughter Kimberly Jones had talcen a turn for the worst and we should fly to Harborview Hospital immediately. Page 44 Special Meeting July 22,2003 We flew to Seattle, Washington and the details of what transpired are now in the hands of the legal, medical and spiritual experts. My objective today is to say thank you for your support, cards, letters and positive words shared during this tragic ordeal. Throughout this tragic ordeal we have remained faithful to the Lord and continued this journey, but not without the help of ordinary people doing some extraordinary things. For example, a fund-raising committee raised over $12,000.00 to bring our daughter Kimberly Jones home to mid-Michigan. Without the Lansing Board of Water & Light and the Employees' Club of the Lansing Board of Water & Light, we would not have been able to bring our daughter home and I would not be standing here today. Again, thank you and may God bless the continued great work you do for this community." COMMUNICATIONS A Freedom of Information Act (FOIA) request was hand-delivered by BWL employee Richard Taylor. Referred to management for response. REPORT OF THE NOMINATING COMMITTEE Commissioners Present: Tim Haggart, Connie Marin, and Diane Royal. Staff Present: Interim General Manager John Elashkar and Corporate Secretary Mary Sova. The Nominating Committee met on June 3, 2003 at 8:00 a.m. to review Commissioner survey responses for consideration of nominations for Board officers. Resolution 2003 7=8 APPROVE SLATE OF BOARD OFFICERS FOR FY 2003-04 The Nominating Committee recommends the following slate of officer candidates for Fiscal Year 2003-04: Chair: Diane R. Royal Vice Chair: Ronald C. Callen Chair Pro Tem: Nancy W. Duncan Special Meeting Page 45 July 22,2003 There being no further business, the meeting adjourned at 8:18 a.m. Respectfully submitted, NOMINATING COMMITTEE Tim Haggart, Chair Moved by Commissioner Smith, seconded by Commissioner Marin, that the report of the Nominating Committee be approved. Carried unanimously. Moved by Commissioner Wonch, seconded by Commissioner Marin, to approve the Slate of Board Officers for FY 2003-04 (Resolution #2003-7-8). Action: Carried unanimously. FINANCE COMMITTEE REPORT Committee Members Duncan, Royal, Smith and Wonch were present. Also present were: Commissioners Haggart, and Marin. The Finance Committee met on July 22, 2003 at 4:30 p.m. to discuss the following items: l. Restructuring Chilled Water Debt 2. Indirect Cost Allocations 3. Utility Services Rules and Regulations 4. Economic Parameters for FY 2004 The committee thoroughly discussed the issues related to these topics and concurs with staffs recommendations. The General Manager is directed to present resolutions for the four items discussed tinder the General Manager's Recommendations. There being no further business, the meeting adjourned at 5:20 p.m. Respectfully submitted, Nancy Duncan, Chair Moved by Commissioner Duncan, seconded by Commissioner Haggart, that the report of the Finance Committee be approved. Carried unanimously. Page 46 Special Meeting July 22,2003 MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Office of the Corporate Secretary. Resolution 2003.-779 EMPLOYEE BENEFITS OPTION PLAN WHEREAS, the Corporate Incentive Program (IP) Employee Benefit Options Committee has reviewed and researched numerous options for the Incentive Program bonus, and WHEREAS, the option package has administrative costs only, while providing employees the opportunity to purchase additional fringe benefits. RESOLVED, That the final recornnendations submitted by the IP Employee Benefit Options Committee be approved: I. Options available through the "Whatif'Program 1. Purchase of Vacation * No change 2. Purchase of Free Choice * No change 3. ICMA "Deferred Compensation Plan" No change 4. FSA(Flexible Spending Account) *** No change 5. Charitable Contributions ** American Heart Association St. Vincent Home H. Options available through Human Resources 6. ICMA "Roth IRA" **** No change 7. MESP 529 College Savings Program No change 8. Long Term Disability Program (MetLife) Annual enrollment for"buy-up" option changes 9. UNUM Tenn Life Insurance Annual enrollment for changes 9. Cancer, Intensive Care, Voluntary (Previously called Direct Cash Supplement) Indemnity Annual enrollment for changes Accident Expense AFLAC Plans * Purchase of Vacation and Free Choice will be limited to ten (10) total days to include no more than two (2) Free Choice Days. ** To lower administrative costs, all checks less than$5.00 will be defaulted to the charities options. Opt out procedures will be available for employees declining the default. *.k.r Maximum annual contribution for health care expenses is $7,500 and dependent care maximum is $5,000 (see IRS rules). **** Lump sum and/or continued payroll deduction. Moved by Commissioner Wonch, seconded by Commissioner Marin, to approve the Employee Benefits Option Plan (Resolution #2003-7-9). Discussion: Commissioner Duncan asked for clarification on the "Whatif'Pro gram, and how the incentive plan works. Interim General Manager Elashkar explained that the above named options are items employees may select with their Incentive Program bonus. Action: Carved unanimously. Special Meeting Page 47 July 22,2003 Res6hdion.2003 7-10 JOINT RESOLUTION OF THE LANSING CITY COUNCIL AND THE BOARD OF WATER AND LIGHT COMMISSIONERS APPROVING A MEMORANDUM OF UNDERSTANDING WHEREAS, the Lansing City Charter delegates to the Board of Commissioners (Board) of the Board of Water and Light(BWL) the responsibility for the administrative, executive, and policy- making authority over the operation of those City utility services assigned to it, and WHEREAS, the Lansing City Charter recognizes that the Board is responsible to the Mayor and to the City Council for the provisions of those City Utility services in a manner consistent with best practices, and WHEREAS, the City Council and the Board desire to develop a more formal cooperative relationship between each other, and WHEREAS, the cooperation between the City Council and the Board would lead to better communication and more beneficial coordination between the City Council and the Board. NOW THEREFORE BE IT RESOLVED, That on or about January 31" of each year the President of the City Council and the Chair of the Board shall agree upon and publish a one-to- one pairing list between the Council members and the Board members. FURTHER RESOLVED, That the Board shall provide City Council, in advance of each of its Board meetings, with a Board packet and a monthly summary of other potential firture Board actions (e.g. rate increases, tree trimming schedules) that are being contemplated which will allow each Council Member to interact with a Board counterpart concerning these actions. FURTHER RESOLVED, That the City Council and the Board shall hold three joint Committee of the Whole meetings per year. The meetings shall be scheduled by the President of the Council and the Chair of the Board to coincide with certain key events specified in the City Charter. The first meeting will be held in January after the election of Council Leadership and assigmnent of members to committees, the second meeting will be held in April after the Mayor's presentation of the City Budget to the City Council, and the third meeting will be held in September before the City Council's adoption of the annual budget policies and priorities. FURTHER RESOLVED, That the agenda of each of the aforementioned meetings shall, at a minimum, include items that require coordination between the Board of Water and Light and other City Departments, including the Combined Sewer Overflow (CSO)projects and the effects of these projects on both entities. FURTHER RESOLVED, That the Chair of the Board and the President of the Council shall, on a regular basis, communicate to each other issues that are beneficial for the Council members and the Board members to discuss with their respective counterparts in their one-to-one interaction. Page 48 Special Meeting July 22,2003 FURTHER RESOLVED, That the City Council and the Board shall reaffirm this Memorandum of Understanding annually during the month of December, by resolutions adopted by the City Council and by the Board. Moved by Commissioner Wonch, seconded by Commissioner Malin, to approve the Joint Resolution of the Lansing City Council and the Board of Water and Light Commissioners Approving a Memorandum of Understanding (Resolution #2003-7-10), subject to review and approval by City Council. Discussion: The City Council plans to discuss this resolution at their July 24, 2003 Committee of the Whole Meeting for Council action on July 28, 2003. (Note: The Council's Committee of the 977ole Meeting scheduled for July 24, 2003 was cancelled on July 23, 2003.) Action: Carried unanimously. Resolution 2003 7-:11 RESTRUCTURING CHILLED WATER DEBT RESOLVED, That the Eighth Supplemental Revenue Bond Resolution authorizing Water Supply, Steam and Electric Utility System Revenue Bonds of the City of Lansing, Michigan,per Attachment A, be approved. Staff Comments: The bond resolution and the Official Statement are subject to final review by our bond counsel. A special board meeting will be necessary in August, after insurance bids are received and insurance language is inserted in the bond resolution, to re-approve the bond resolution. The bonds will refund a portion of the 1999A Series ($13.75M) and all of the 2001A Series ($11.435M) outstanding. This will restructure the $25.185M total associated with the chilled water system from the original 15-year term to a 27-year term. The bonds will be insured and carry an AAA rating from both Moody's (expect an underlying rating of Aa3) and Standard and Poor's (expect an underlying rating of AA). The bonds would be dated September 1, 2003 and sold at competitive auction on August 25 or September 3, 2003. These refunding bonds will reduce chilled water debt service approximately$LOM per year. The total debt service will increase approximately$13.7M (present value $2.4M) due to extending the term of the bonds. Moved by Commissioner Duncan, seconded by Commissioner Wonch, to approve the resolution on Restructuring Chilled Water Debt (Resolution #2003-7-11). Action: Carried unanimously. Special Meeting Page 49 July 22,2003 Resolution.2003-7-12 .. _. UTILITY SERVICES RULES AND REGULATIONS FOR ELECTRIC, WATER, STEAM AND CHILLED WATER WHEREAS, in accordance with Board Policies 19-05 (Electric), 19-13 (Water) and 19-15 (Steam) of the Utility Services section, the utility Rules and Regulations shall be subject to review and modifications by the Commissioners. RESOLVED, That the Board of Commissioners hereby moves to amend the Rules and Regulations for the Electric (Attachment B), Water(Attachment C), and Steam, Services (Attachment D), as submitted and reviewed by the Finance Committee on July 22, 2003, with an effective date of August 1, 2003. RESOLVED FURTHER, That the new Board of Water and Light Policy 19-16 of the Utility Services section, Chilled Water Rules and Regulations, shall state that: "The chilled water rules and regulations shall govern the chilled water services and shall be subject to review and modification by the Commissioners". RESOLVED FURTHER, That the adoption of the Board of Water and Light Rules and Regulations for Chilled Water Services (Attachment E)become effective August 1, 2003. Moved by Commissioner Duncan, seconded by Commissioner Marin, to approve the resolution on Utility Services Rules and Regulations (Electric, Water, Steam and Chilled Water (Resolution #2003-7-12). Action: Carried unanimously. Resolution,2003-7 13, ECONOMIC PARAMETERS FOR FY 2004 RESOLVED, That the Economic Parameters for Fiscal Year 2004 Studies (Attachment F) presented by staff at the Finance Committee meeting of July 22, 2003 be approved. Staff Comments: In FY 2000 staff identified the need for a standardized consistent set of economic parameters for use in project evaluations. R.W. Beck subsequently reviewed the BWL proposed methodology and parameters and agreed with staff that the BWL had established a "good approach and parameters need to be reviewed and updated annually." The attached is the FY2004 update. Moved by Commissioner Duncan, seconded by Commissioner Wonch, to approve the resolution on Economic Parameters for FY 2004 (Resolution #2003-7-13). Action: Carried unanimously Page 50 Special Meeting July 22, 2003 Resolution 2003-7-1 INDIRECT COST ALLOCATIONS RESOLVED, That the Indirect Cost Methodology (Attachment G)presented by staff at the Finance Committee meeting of July 22, 2003 be approved. RESOLVED FURTHER, That the General Manager be directed to make required changes to the Fiscal Year 204 Budget. Moved by Commissioner Wonch, seconded by Commissioner Smith, to approve the resolution on Indirect Cost Allocations (Resolution #2003-7-14). Action: Carried unanimously. NEW BUSINESS None. MANAGER'S REMARKS Interim General Manager John Elashkar reported on the following topics: R. W. Beck to Analyze BWL Transmission System. A contract was awarded to R.W. Beck in the amount of$27,000 for the performance of an analysis of the BWL transmission system. The analysis will delineate between transmission and distribution assets using the FERC seven-factor test published in FERC's Order No. 88. The analysis will also establish BWL transmission system revenue requirements for the assets identified above. This analysis will be used in evaluating the BWL's position with respect to joining the Midwest Independent System Operator (MISO) as a transmission owner. Fly Ash Sale and Disposal Contract with Boral Material Technologies. There is a high demand for Western coal flyash that is being burned in power plants. Environmental Services Manager Nick Burwell recently negotiated a five-year contract with Boral Material Technologies, Inc. (BMTI) to market the flyash. BMTI will pay BWL the greater of$10/ft-on or 50% of the sale price minus the cost of transportation. By selling the flyash, the BWL will be reducing its disposal costs by about $300,000 per year. Ottawa Station Development. Lange Limited, LLC, an entity being formed by Dorian N. Lange of Michigan Equities, submitted a proposal for the development of the Ottawa Station. Mr. Lange has indicated they have an anchor tenant with space requirements of 70,000 square feet. Upon negotiating a lease with the tenant, they will negotiate the terms of the development agreement with the BWL. The proposal calls for a Standstill Provision until August 31, 2003 with a target closing date of December 31, 2003. Special Meeting Page 51 July 22, 2003 Steam Cost of Service Progressing on Schedule. An interim report on the Steam Cost of Service(COS) study is progressing well. The consulting firm of FVB is scheduled to deliver the COS results for FY04 and FY07 by late September. Employment Agreement for New General Manager. Agreement in principle has been reached on all major aspects of an employment agreement with Sanford B. Novick to become the BWL's new General Manager. Once final agreement is reached, Mr. Novick is expected to begin his new duties in mid-August. COMMISSIONERS' COMMENTS Commissioner Wonch thanked BWL crews for their timely and efficient repair of an underground phase interruption at Cooley Law School during a recent storm. Commissioner Marin welcomed Sanford Novick to the BWL. She also acknowledged the earlier comments of BWL Employee Calvin Jones and offered her prayers for his family. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT. No one spoke. EXCUSED ABSENCE On motion by Commissioner Duncan and seconded by Commissioner Haggart, that the.absences of Commissioners Callen and Joseph be excused. Carried unanimously. CLOSED SESSION -- -Commissioner Royal acknowledged-receiving an employee complaint-against-Interim--General— --—— -- Manager John Elashkar. The complaint letter was sent to each Commissioner by the employee's attorney. Mr. Elashkar requested to meet with the Board in closed session pursuant to the Open Meetings Act, Section 15.268 (Closed Sessions)to respond to the complaint brought against him. Moved by Commissioner Wonch, seconded by Commissioner Marin, that the Board convene in closed session to discuss an employee complaint brought against Interim General Manager John Elashkar. (6:10 p.m.) Action: Adopted by roll call vote: Yeas: Commissioners Duncan, Haggart, Marin, Royal, Smith and Wonch (6). Page 52 Special Meeting July 22,2003 Nays: None Abstentions: None Absent: Commissioners Callen and Joseph(2). All persons not required for the closed session were excused. OPEN SESSION The Board returned to open session at 6:48 p.m. ADJOURNMENT On motion by Commissioner Duncan, seconded by Commissioner Wonch, the meeting adjourned at 6:49 p.m. Is/Mary E. Sova, Secretary Filed with Lansiiig City Clerk Azcgztst 1, 2003 ATT/ kC h M c: 1A-1-" A' Draft No. 2 Draft Date: 7/21/03 EIGHTH SUPPLEMENTAL REVENUE BOND RESOLUTION AUTHORIZING WATER SUPPLY, STEAM AND ELECTRIC UTILITY SYSTEM REVENUE REFUNDING BONDS OF THE CITY OF LANSING, MICHIGAN Section 1. Supplemental Resolution. This Eighth Supplemental Revenue Bond Resolution is supplemental to, and is adopted in accordance with Section 23(a)(i) of, the Bond Resolution. Section 2. Definitions. Unless the context indicates that another meaning is intended, the following words and terms used in this Eighth Supplemental Revenue Bond Resolution shall have the following meanings, and any other words and terms which are defined in Act 94 or in the Bond Resolution shall have the meanings as therein defined: (i) "Award of Sale of Series 2003A Bonds" means the award of sale of the Series 2003A Bonds, as authorized in Section 9 herein. (ii) 'Bond Resolution" means the Amended And Restated Bond Resolution adopted by the Board on October 24, 1989, as supplemented and amended from time to time. (iii) "Junior Lien Bonds" means the Series 1999B Bonds and any additional junior lien bonds issued pursuant to the Bond Resolution. (iv) "Series 1989A Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1989A issued pursuant to the Bond Resolution. (v) "Series 1989B Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1989B issued pursuant to the Bond Resolution. (vi) "Series 1994A Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1994A issued pursuant to the Bond Resolution. (vii) Series 1994B Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1994B issued pursuant to the Bond Resolution. (viii) "Series 1999A Bonds" means the Water Supply, Steam And Electric Utility System Revenue Bonds, Series 1999A issued pursuant to the Bond Resolution. (ix) "Series 1999B Bonds" means the Water Supply, Steam And Electric Utility System Subordinate Lien Revenue Bonds, Series 1999B (Federally Taxable) issued pursuant to the Bond Resolution. 1 (x) "Series 2001A Bonds" means the Water Supply, Steam and Electric Utility System Revenue Bonds, Series 2001A issued pursuant to the Bond Resolution. (xi) "Series 2002A Bonds" means the Water Supply, Steam and Electric Utility System Revenue Bonds, Series 2002A issued pursuant to the Bond Resolution. (xii) "Series 2002B Bonds" means the Water Supply, Stearn and Electric Utility System Revenue Refunding Bonds, Series 2002B issued pursuant to the Bond Resolution. (xiii) "Series 2003A Bonds" means the Water Supply, Steam and Electric Utility System Revenue Refunding Bonds, Series 2003A authorized by this Eighth Supplemental Bond Resolution. Section 3. Authorization of Series 2003A Bonds. To pay the cost of refiinding a portion of the outstanduig Series 1999A Bonds and Series 2001A Bonds, including making a deposit to a reserve fund and payment of legal, financial and other expenses of the issuance of the Series 2003A Bonds, the City, by and through the Board, shall borrow a sum not in excess of Forty Million Dollars ($40,000,000), as finally determined in the Award of Sale of Series 2003A Bonds, pursuant to the provisions of Act 94, Public Acts of Michigan, 1933, as amended. The Board previously determined it was necessary for the public health, safety and welfare of the City to undertake the projects financed with the Series 1999A Bonds and the Series 2001A Bonds. The refunding satisfies a public purpose and will enable the Board to reduce the amlual debt service payments in order to keep certain chilled water rates competitive. The estimated remaining useful live of the projects financed with the Bonds to be Refunded (defined below) is at least 30 years. Section 4. Bond Details, Parameters and Security. The Series 2003A Bonds shall be designated "Water Supply, Steam And Electric Utility System Revenue Refiinding Bonds, Series 2003A," shall be of equal standing in priority of lien on the Net Revenues of the System with the Series 1989A Bonds, the Series 1989B Bonds, the Series 1994A Bonds, the Series 1994B Bonds, the Series 1999A Bonds, the Series 2001A Bonds, the Series 2002A Bonds, the Series 2002B Bonds and any other Additional Bonds, shall be senior in priority of lien to any Junior Lien Bonds issued hereunder, including, but not limited to the Series 1999B Bonds, and shall be payable solely out of Net Revenues and any other moneys pledged under the Bond Resolution and shall not be a general obligation of the City or the Board. Series 2003A Bonds shall be issued in denominations of $5,000 or any integral multiples of $5,000 not exceeding the amount of the Series 2003A Bonds maturing on the same date and shall be numbered in consecutive order of authentication from 1 upwards. The Series 2003A Bonds shall be issued as fully registered bonds without coupons and shall have an original issuance date of their dated date, or such other date as the Board shall approve in the Award of Sale of Series 2003A Bonds. The Series 2003A Bonds shall bear interest at a rate or rates to be determined in the Award of Sale of Series 2003A Bonds, not exceeding seven percent (7%) per annum, and shall mature no later than July 1, 2027. Interest shall be payable commencing on January 1, 2004 and on each July 1 and January 1 thereafter, or such other dates specified in the Award of Sale of 2 Series 2003A Bonds, by check drawn on the Transfer Agent and mailed to each Registered Owner at the registered address, as shown on the registration books of the City, by the Board of Water and Light, maintained by the Transfer Agent. Interest on the Series 2003A Bonds shall be payable to each Registered Owner as of the 15th day of the month prior to the date on which the interest payment is due. Interest on the Series 2003A Bonds shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The principal of the Series 2003A Bonds shall be payable at the principal office of the Transfer Agent upon presentation and surrender thereof, provided, however, if part of an Outstanding Series 2003A Bond registered in the name of a securities depository company as part of a book-entry system is selected for redemption, the securities depository company may retain the Series 2003A Bond and make an appropriate notation on the Series 2003A Bond indicating the date and amount of the reduction in the principal amount of the Series 2003A Bond resulting from the partial redemption, however, in the case of the final payment of the remaining principal amount of the Series 2003A Bond, the .Series 2003A Bond shall be presented and surrendered to the Transfer Agent as a condition of payment. The aggregate principal amount of the Series 2003A Bonds, the amount of each maturity and the designation of serial and term bonds, if any, shall be as finally determined in the Award of Sale of Series 2003A Bonds. The City's obligation to fund the Bond Reserve Account as required herein may be satisfied, in whole or in part, by delivery to the Transfer Agent of a letter of credit, surety bond or similar arrangement in form acceptable to the Bond Insurer (the "Bond Reserve Account Guaranty") representing the irrevocable obligation of the issuer of the Bond Reserve Account Guaranty to pay to the Transfer Agent upon request made by the Transfer Agent an amount up to the stated amount thereof for application to the Series 2003A Bonds, and other Senior Lien Bonds issued under the Bond Resolution, together with written evidence from any Rating Agency rating the Series 2003A Bonds, in each case to the effect that such rating agency has reviewed the proposed Bond Reserve Account Guaranty and that the issuance of the Bond Reserve Account Guaranty or, if a Bond Reserve Account Guaranty is then in effect (in whole or in part) with respect to the Bond Reserve Account, the substitution of the proposed Bond Reserve Account Guaranty for the Bond Reserve Account Guaranty then in effect, will not by itself, result in a reduction or withdrawal of its ratings on the Series 2003A Bonds. Such Bond Reserve Account Guaranty shall be available to pay Senior Lien Bonds (and not Junior Lien Bonds), including any Additional Bonds issued on a parity therewith, in accordance with its terms. Upon acceptance of a Bond Reserve Account Guaranty, any moneys representing proceeds of the Series 2003A Bonds held in-the Bond Reserve Account shall be transferred to the Bond Redemption Fund and used to purchase or redeem outstanding Series 2003A Bonds and the Transfer Agent shall return any previously held Bond Reserve Account Guaranty to the issuer thereof for cancellation; provided that after such transfer or return, there shall remain in the Bond Reserve Account moneys or Bond Reserve Account Guaranties equal to the Bond Reserve Account Requirement. . If a Bond Reserve Account Guaranty is delivered contemporaneously with the delivery of the Series 2003A Bonds, the form of guaranty shall be acceptable to the Bond Insurer and no additional written confirmation from the Rating Agencies, other than their initial rating letters on the Series 2003A Bonds, shall be required. In the event amounts held in the Bond Reserve Account are required to be utilized in accordance with the Bond Resolution, cash or securities held in the Bond Reserve Account shall be utilized first before drawing on a Bond Reserve Account Guaranty. 3 Upon the issuance of the Series 2003A Bonds, the Board shall designate the Series 1999A Bonds and the Series 2001A Bonds to be refunded ("Bonds to be Refunded") in the Award of Sale of Series 2003A Bonds and the Board shall give irrevocable instructions to the Transfer Agent to redeem such Bonds to be Refunded on the earliest practicable call date designated by the Board's Chief Financial Officer and to give notice of such redemption in the' manner and at the time required by the Bond Resolution. The General Manager and Chief Financial Officer are severally authorized to enter into an escrow deposit agreement substantially in the form on file with the Board and to purchase United States Treasuries -- State and Local Government Series or United States open market securities necessary to carry out the refunding of the Bonds to be Refunded, and to amend or modify the maturies, interest rates and amounts of such securities or request early redemption as may be necessary to comply with the Bond Resolution or to carry out the refunding. National. City Bank of Michigan/Illinois is named attorney-in-fact to enter into any subscriptions necessary to purchase the foregoing securities in order to carry out such refunding. The Series 2003A Bonds shall be subject to redemption as provided in the Award of Sale of Series 2003A Bonds. Section 5. Series 2003A Bond Proceeds. From the proceeds of the sale of the Series 2003A Bonds, there shall be irmnediately deposited in (a) the Redemption Fund an amount equal to the accrued interest and premium, if any, received on delivery of the Series 2003A Bonds and the City, by its Board of Water and Light, shall receive a credit equal to the amount so deposited against the amount required to be deposited in the Redemption Fund for payment of the next maturing interest and(b) the Bond Reserve Account, the amount, if any, required by the Bond Resolution. The remaining proceeds of the Series 2003A Bonds shall be used, together with other available funds, to pay the costs of refunding a portion of the Bonds to be Refunded and to pay the costs of issuing the Series 2003A Bonds. Section 6. Book-Entry System - Series 2003A Bonds. Initially, one fally-registered Series 2003A Bond for each maturity, in the aggregate amount of such maturity, will be issued in the name of Cede & Co., as nominee of The Depository Trust Company, for participation in the book-entry transfer system of The Depository Trust Company. In the event the City decides to discontinue participation in the book-entry transfer system of The Depository Trust Company (or a successor securities depository), the City shall notify the Transfer Agent and The Depository Trust Company, in writing, and thereafter the City shall execute and the Transfer Agent shall authenticate and deliver Series 2003A Bonds requested by the bondholders or to a successor securities depository. In the event The Depository Trust Company discontinues providing services as a securities depository for the Series 2003A Bonds and the City does not designate a successor securities depository, the City shall execute and the Transfer Agent shall authenticate and deliver Series 2003A Bonds to the bondholders. Section 7. Bond Form. The Series 2003A Bonds shall be in substantially the following form: 4 [SERIES 2003A BONDS] UNITED STATES OF AMERICA STATE OF MICHIGAN CITY OF LANSING WATER SUPPLY, STEAM AND ELECTRIC UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 2003A Interest Rate Maturity Date of Per Annum Date Original Issuance CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: The CITY OF LANSING, State of Michigan (the "City"), for value received, promises to pay the Principal Amount to the Registered Owner on the Maturity Date with interest thereon from the Date of Original Issue, or such later date to which interest has been paid, until paid at the Interest Rate Per Annum, payable on January 1, 2004, and on each July 1 and January 1 thereafter until the obligation of the City to pay the Principal Amount is satisfied. Principal of this Bond is payable at the principal office of National City Bank of Michigan/Illinois, or such other transfer agent as the City may hereinafter designate by notice mailed to the registered owner not less than 60 days prior to any interest payment date (the "Transfer Agent"). Interest on this Bond is payable to the registered owner of this Bond as of the 15th day of the month next preceding the payment date as shown on the registration books of the City kept by the Transfer Agent by check or draft mailed to the registered owner at the registered address. The revenues of the facilities of the City for the supply and distribution of water and the generation and distribution of electricity, steam and heat (the "System") after provision has been made for reasonable and necessary expenses of operation, maintenance and administration of the System (the "Net Revenues"), are irrevocably pledged and a statutory lien thereon has been created to secure the payment of the principal of and interest on this Bond, when due; however, the pledge of Net Revenues and the statutory lien are on a parity with the pledge of Net Revenues and statutory lien in favor of the City of Lansing's Water Supply and Electric Utility System Revenue Bonds, Series 1989A, its Water Supply and Electric Utility System Revenue Bonds, Series 1989B, its Water Supply and Electric Utility System Revenue Bonds, Series 1994A, its Water Supply and Electric Utility System Revenue Bonds, Series 1994B, its Water Supply, Steam and Electric Utility System Revenue Bonds, Series 1999A, its Water Supply, Steam and 5 Electric Utility Revenue Bonds, Series 2001A, its Water Supply, Stearn and Electric Utility System Revenue Bonds, Series 2002A, its Water Supply, Steam and Electric Utility System Revenue Refunding Bonds, Series 2002B and any Additional Bonds (as defined below) which may be issued by the City, and senior in priority of lien to its Water Supply, Steam and Electric Utility Revenue Bonds, Series 1999B (Taxable Series) and any additional junior lien bonds issued pursuant to the Resolution (defined below). Interest on this Bond shall be computed on the basis of a 360-day year consisting of twelve 30-day months. This Bond is one of a series of bonds of like tenor, except as to denomination, rate of interest, date of maturity and prior redemption, aggregating the principal sum of $ , issued pursuant to a Bond Resolution adopted by the Board of Water and Light of the City (the 'Board") on October 24, 1989, as amended and supplemented from time to time, including by an Eighth Supplemental Revenue Bond Resolution adopted by the Board on , 2003 (collectively, the 'Bond Resolution"), and under and in Rill compliance with the Constitution and statutes of the State of Michigan, including specifically Act 94, Public Acts of Michigan, 1933, as amended, for the purpose of refunding prior bonds of the City issued in 1999 and 2001, the proceeds of which were used for remodeling, updating and extending the life of the System, making a deposit to a bond reserve account, if necessary, and paying the costs of issuing the bonds. For a complete statement of the revenues from which and the conditions under which this Bond is payable, a statement of the conditions under which additional bonds ("Additional Bonds") of equal standing may hereafter be issued, the rights and limitations on the owners of the bonds and the general covenants and provisions pursuant to which this Bond is issued, reference is made to the Bond Resolution. Bonds of this series maturing prior to July 1, , are not subject to redemption prior to their respective dates of maturity. Bonds of this series maturing on and after July 1, , are subject to redemption prior to maturity, at the option of the Board, at any time on and after July 1, , in whole or in part, in the amount selected by the Board, in order of maturities selected by the Board and within a maturity by lot, at the redemption price of par, plus accrued interest to the date of redemption. Notice of the call of Bonds for redemption shall be mailed to the registered owner not less than 30 days prior to the date fixed for redemption at the address shown on the registration books of the City. Failure to receive such notice shall not affect the validity of the proceedings for redemption. Bonds called for redemption shall not bear interest after the date fixed for redemption, provided funds are on hand with the Transfer Agent to redeem the bonds called for redemption. This Bond is a self-liquidating bond and is not a general obligation of the City or the Board and does not constitute an indebtedness of the City or the Board within any constitutional, statutory or charter limitation, but is payable, both as to principal and interest, solely from the Net Revenues of the System. 6 The Board has covenanted and agreed, and covenants and agrees, to fix and maintain at all times while any bonds payable from the Net Revenues of the System shall be outstanding, such rates for service furnished by the System as shall be sufficient to provide for payment of the principal of and interest on the bonds of this issue and any other bonds payable from the Net Revenues as and when the same shall become due and payable, to provide for the payment of expenses of administration and operation and such expenses for maintenance of the System as are necessary to preserve the same in good repair and working order, and to provide for such other expenditures and funds for the System as are required by the Bond Resolution. This Bond is transferable only upon the registration books of the City kept by the Transfer Agent by the Registered Owner hereof in person, or by his or her attorney duly authorized in writing, with a written instrument of transfer satisfactory to the Transfer Agent duly executed by the Registered Owner or his or her attorney duly authorized in writing, and thereupon a new registered bond or bonds in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor as provided in the Bond Resolution and upon the payment of the charges, if any, therein prescribed. The City shall not be required to register the transfer of or exchange any Bond selected for redemption in whole or in part, except the unredeemed portion of bonds being redeemed in part. It is certified and recited that all acts, conditions and things required by law precedent to and in the issuance of this Bond and the series of bonds of which this is one have been done and performed in regular and due time and form as required by law. This Bond is not valid or obligatory for any purpose until the Certificate of Authentication on this Bond has been executed by the Transfer Agent. IN WITNESS WHEREOF, the City of Lansing, State of Michigan, by and through its Board of Water and Light, has caused this Bond to be executed with the facsimile signatures of its Chairran and its Corporate Secretary and the corporate seal of the City to be printed on this Bond. CITY OF LANSING, BY AND THROUGH THE BOARD OF WATER AND LIGHT OF THE CITY OF LANSING, MICHIGAN By: (FACSIMILE) Chairman BY: (FACSIMILE) Corporate Secretary (Seal) 7 Certificate of Authentication This Bond is one of the bonds described in the within-mentioned Bond Resolution. NATIONAL CITY BANK OF MICHIGAN/ILLINOIS, Transfer Agent By: Authorized Representative Date of Authentication: 8 ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto (Please print or typewrite name and address of transferee) the within bond and all rights thereunder, and irrevocably constitutes and appoints attorney to transfer the within bond on the books kept for registration thereof,with Rill power of substitution uz the premises. Dated: Signature Guaranteed: NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of the within bond in every particular, with-out alteration or enlargement or any change whatsoever. Signature(s) must be guaranteed by an eligible guarantor institution participating in a Securities Transfer Association recognized signature guaranty program. The Transfer Agent will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF TRANSFEREE. (Include information for all joint owners if the bond is held by joint account) (Insert number for first named transferee if held by joint account) 9 Section 8. Notice of Sale. The Series 2003A Bonds shall be sold at a public sale pursuant to a Notice of Sale published in a publication to be selected by the Chief Financial Officer for the Board in substantially the following fonn: OFFICIAL NOTICE OF SALE [$ 1 CITY OF LANSING, BY AND THROUGH THE BOARD OF WATER AND LIGHT OF THE CITY OF LANSING WATER SUPPLY, STEAM AND ELECTRIC UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 2003A SEALED BIDS for the purchase of the above bonds will be received by the undersigned at the Corporate Secretary's office, Board of Water and Light of the City of Lansing, 1232 Haco Drive, Lansing, Michigan, on the day of , 2003, until o'clock, a.m., Eastern Time, at which time and place the bids will be publicly opened and read. IN THE ALTERNATIVE: Sealed bids will also be received on the same date and until the same time by an agent of the undersigned at the office of the Municipal Advisory Council of Michigan, 1445 First National Building, Detroit, Michigan 48226, where they will be publicly opened and read. Bids opened at Detroit, Michigan, will be read first. Bidders may choose either location to present bids and good faith checks,but may not present bids at both locations. BOND DETAILS: The bonds will be fully registered bonds without coupons and, when issued, will be registered in the name of and held by Cede & Co., as nominee for The Depository Tnist Company ("DTC"), New York, New York. DTC will act as securities depository for the bonds. Purchases of beneficial interests in the bonds will be made in book-entry fonn, in denominations of$5,000 each or any integral multiple thereof. The bonds will have an original issuance date of 1, 2003, and will bear interest from the date of original issuance payable on January 1, 2004 and semiamzually thereafter. The principal of and interest on the bonds will be paid by National City Bank of Michigan/Illinois, as Transfer Agent. So long as DTC or its nominee, Cede & Co., is the registered owner of the bonds, such payments will be made directly to DTC or such nominee. Disbursement of such payments to the DTC Participants is the responsibility of DTC, and disbursements of such payments to the beneficial owners is the responsibility of the DTC Participants and Indirect Participants. 10 The bonds will mature on the first day of July as follows: Principal Principal Year Amount Year Amount 2004 $ 2016 $ 2005 2017 2006 2018 2007 2019 2008 2020 2009 2021 2010 2022 2011 2023 2012 2024 2013 2025 2014 2026 2015 PRIOR REDEMPTION: Bonds maturing on and after July 1, are subject to redemption prior to maturity in whole or in part, on or after July 1, , in such order as the Board shall determine, and by lot within a maturity, in integral multiples of $5,000, at par, without premium, phis accrued interest to the redemption date. Not less than 30 days' notice of redemption shall be given by mail to the registered holder. at the registered address. Bonds or portions of bonds called for redemption shall not bear interest after the redemption date, provided funds are on hand with the Transfer Agent to redeem the same. INTEREST RATE AND BIDDING DETAILS: The bonds shall bear interest at a rate or rates not exceeding 7% per annum, to be fixed by the bids therefor, expressed in multiples of 1/8 or 1/20 of 1%, or both. The interest on any one bond shall be at one rate only and all bonds maturing in any one year must carry the same interest rate. The difference between the highest and lowest interest rate on the bonds shall not exceed one and [two (2)] percentage points. No proposal for the purchase of less than all of the bonds or at a price less than [99.3%] of their par value will be considered. The rates bid must be in non-descending order. TRANSFER AGENT: The bonds shall be payable as to principal in lawful money in the United States upon surrender thereof at National City Bank of Michigan/Illinois, the Transfer Agent. Interest shall be paid to the registered owner of each bond as shown on the registration books at the close of business on the 15th day of the calendar month preceding the month in which the interest payment is due. Interest shall be paid when due by check or draft drawn upon and mailed by the Transfer Agent to the registered owner at the registered address. The City of Lansing may from time to time as required designate a successor Transfer Agent. 11 PURPOSE AND SECURITY: The bonds are issued tinder the provisions of Act 94, Public Acts of Michigan, 1933, as amended, and a bond resolution adopted by the Board of Water and Light of the City of Lansing (the "Board") on October 24, 1989, as supplemented and amended from time to time (together, the "Bond Resolution"), for the purpose of refiunding certain prior bonds of the City issued in 1999 and 2001, the proceeds of which were used for acquiring, constructing and extending the chilled water facilities and distribution system of the City of Lansing, Michigan, funding a bond reserve account, if necessary, and paying issuance costs for the bonds. The bonds, except to the extent payable from bond proceeds, are payable solely from the net revenues of the water supply and distribution and electric, heat and steam generating and distri- bution systems (the "System") of the City of Lansing and any additions thereto, and a statutory first lien on the net revenues of the System has been established by the Bond Resolution. The Board has covenanted and agreed to fix and maintain at all times while any of such bonds shall be outstanding such rates for service furnished by the System as shall be sufficient to provide for payment of the necessary expenses of operation, maintenance and administration of the System, of the principal and interest on all of said bonds when due, and to provide for such other expenditures and funds for the System as are required by the Bond Resolution. Payment of the principal and interest on the bonds from the net revenues of the System and the statutory lien on the Net Revenues of the System to secure payment of the bonds are of equal standing and on a parity with payment of the principal of and interest on its Series 1989A Bonds, Series 1989B Bonds, Series 1994A Bonds, Series 1994B Bonds, Series 1999A Bonds, the Series 2001A Bonds, the Series 2002A Bonds, the Series 2002B Bonds and any other additional bonds issued under the Bond Resolution and is senior in priority of lien to its Series 1999B Bonds and any other junior lien bonds issued under the Bond Resolution. ADDITIONAL BONDS: For the terms and conditions upon which additional bonds of equal standing as to revenues of the System may be issued, reference is made to the Bond Resolution. GOOD FAITH: A certified or cashier's check drawn upon an incorporated bank or trust company or a financial surety bond in the amount of $ , payable to the order of the Chief Financial Officer of the Board of Water and Light is required for each bid as a guarantee of good faith on the part of the bidder, to be forfeited as liquidated damages if such bid is accepted and the bidder fails to take tip and pay for the bonds. If a check is used, it must accompany the bid. If a financial surety bond is used, it must be from an insurance company licensed to issue such a bond in the State of Michigan and such bond must be submitted to the Chief Financial Officer of the Board of Water and Light or its Financial Advisor prior to the opening of the bids. The financial surety bond must identify each bidder whose deposit is guaranteed by such financial surety bond. If the bonds are awarded to a bidder utilizing a financial surety bond, then that bidder (the "Purchaser") is required to submit its deposit to the Board of Water and Light or its Financial Consultant in the form of a cashier's check (or wire transfer such amount as instructed by the Chief Financial Officer of the Board of Water and Light or its Financial Consultant) not later than noon, Eastern Time, on the next business day following the award. If such deposit is not received by that time, the financial surety bond may be drawn upon by the Board of Water and Light to satisfy the good faith deposit requirement. The good faith deposit will be applied to the purchase price of the bonds. In the event the Purchaser fails to honor its 12 accepted bid, the good faith deposit will be retained by the Board of Water and Light. No interest shall be allowed on the good faith deposit and checks of the unsuccessful bidders will be returned to each bidder's representative in person or by mail. The good faith check of the successfiil bidder will be immediately cashed and payment for the balance of the purchase price of the bonds shall be made at the closing. The rights and remedies of the bondholders may be affected by bankruptcy laws or other creditors' rights legislation now existing or hereafter enacted. AWARD OF BONDS: The bonds will be awarded to the bidder whose bid produces the lowest true interest cost to the City. True interest cost shall be computed by determining the annual interest rate (compounded semiannually) necessary to discount the debt service payments on the Bonds from the payment dates thereof to 1, 2003 and to the bid price. LEGAL OPMON: Bids shall be conditioned upon the approving opinion of Dickinson Wright PLLC, attorneys of Lansing, Michigan, the original of which will be furnished without expense to the purchaser of the bonds at the delivery thereof. The fees of Dickinson Wright PLLC for services rendered in connection with such approving opinion are expected to be paid from bond proceeds. Except to the extent necessary to issue its approving opinion as to the validity of the bonds, Dickinson Wright PLLC has made no inquiry as to any financial information, statements or material contained in any financial documents, statements or materials that have been or may be furnished in connection with the authorization, issuance or marketing of the bonds, and accordingly will not express any opinion with respect to the accuracy or completeness of any such financial information, statements or materials. TAX MATTERS: The approving opinion of bond counsel will include an opinion to the effect that under existing law, the interest on the bonds (a) is excluded from gross income for federal income tax purposes, (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such opinion will note that certain corporations must take into account interest on the bonds in determining adjusted current earnings for the purpose of computing such alternative minimum tax. The opinion set forth in clause (a) above will be subject to the condition that the City of Lansing comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the bonds in order that interest thereon be (or continue to be) excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements could cause the interest on the bonds to be included in gross income retroactive to the date of issuance of the bonds. The City of Lansing, through its Board of Water and Light, has covenanted to comply with all such requirements. Bond counsel will express no opinion regarding other federal tax consequences arising with respect to the bonds. The City of Lansing has not designated the bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code. 13 The successful bidder will be required, as a condition of delivery of the bonds, to certify the "issue price" of the bonds within the meaning of Section 1273 of the Code. The form of an acceptable certificate will be provided by bond counsel. In addition, the approving opinion of bond counsel will include an opinion to the effect that under existing law, the bonds and the interest thereon are exempt from all taxation in the State of Michigan except estate and inheritance taxes and taxes on gains realized from the sale, payment or other disposition thereof CUSIP: CUSIP numbers will be imprinted on all bonds of this issue at the issuer's expense. An improperly printed number will not constitute a basis for the Purchaser to refuse to accept delivery. DELIVERY OF BONDS: The City of Lansing will Rirnish bonds ready for execution at its expense. Bonds will be delivered without expense to the Purchaser at the offices of DTC in New York, New York. The usual closing documents including a certificate that no litigation is pending affecting the issuance of the bonds, will be delivered at the time of the delivery of the bonds. If the bonds are not tendered for delivery by twelve o'clock noon, Eastern Standard Time, on the 45th day following the day of sale, or the first business day thereafter if the 45th day is not a business day, the successful bidder may on that day, or any time thereafter until delivery of the bonds, withdraw its proposal by serving notice of cancellation, in writing, on the undersigned, in which event the City of Lansing shall promptly return the good faith deposit. Payment for the bonds shall be made in Federal Reserve Funds. Accrued interest to the date of delivery of the bonds shall be paid by the Purchaser at the time of delivery. OFFICIAL STATEMENT: A copy of the Official Statement relating to the bonds may be obtained by contacting the Chief Financial Officer of the Board of Water and Light at the address referred to below. The Official Statement is in a form deemed final by the Issuer for purposes of paragraph (b)(1) of SEC Rule 15c2-12 (the "Rule"), but is subject to revision, amendment and completion in a final Official Statement. After the award of the bonds, the Issuer will provide on a timely basis a sufficient number of copies of a final Official Statement, as that term is defined in paragraph (e)(3) of the Rule, at the expense of the City (and such additional copies of the final Official Statement as reasonably requested�y_,_and_at the_expens_e_o£,th_e-succ_essfuLbidder-ox-bidders)to_enable_the_succ_es&fu bidder or bidders to comply with paragraph (b)(4) of the Rule and the rules of the Municipal- Securities Rulemaking Board. Requests for such additional copies of the final Official Statement shall be made to the Chief Financial Officer, Board of Water and Light, 1232 Haco Drive, Lansing, Michigan 48901 - telephone: 517-702-6790. FINANCIAL CONSULTANT: Further information with respect to said bonds may be obtained from Speer Financial, Inc., One North LaSalle Street, Suite 4100, Chicago, Illinois 60602 - Telephone: (312) 346-3700. THE RIGHT IS RESERVED TO REJECT ANY OR ALL BIDS. 14 ENVELOPES containing the bids should be plainly marked "Proposal for Bonds." City of Lansing,by and through the Board of Water and Light of the City of Lansing By: Dana W. Tousley, Chief Financial Officer, Board of Water and Light of the City of Lansing [Statement of Insurance to be included with respect to the Insured Bonds only] 15 Section 9. Public Sale. The Series 2003A Bonds shall be sold at a public sale in accordance with the Notice of Sale described above. The Chief Financial Officer for the Board or the General Manager for the Board is authorized to fix the date, time and place of sale of the Series 2003A Bonds. The Chairperson of the Board or any Commissioner of the Board and the Chief Financial Officer for the Board or the General Manager for the Board are authorized on behalf of the Board to execute an Award of Sale of Series 2003A Bonds to: (a) approve the specific interest rates, dated dates, maturity dates and amounts, redemption dates, amounts and prices and the purchase price for the Series 2003A Bonds, (b) designate which of the Series 2003A Bonds will be serial bonds and term bonds, (c) determine the amounts to be deposited into the specific funds and accounts established under the Bond Resolution, and (d) award the Series 2003A Bonds to the bidder whose bid produces the lowest interest cost to the Board as provided in, and subject to, the official Notice of Sale and the parameters contained herein. Section 10. Tax Status. The City, by and through its Board, covenants to comply with all requirements of the Internal Revenue Code of 1986, as amended, necessary to assure that the interest on the Series 2003A Bonds will be and will remain excludable from gross income for federal income tax purposes. Section 11. Preliminary Official Statement. The preparation and distribution of a preliminary official statement in substantially the form presented at this meeting is approved, with such changes as the Chairperson or any Commissioner and the General Manager and Chief Financial Officer of the Board may, in consultation with the Staff Attorney and Bond Counsel, determine to be necessary or appropriate. Section 12. Other Staff Action. The Board ratifies and confrnns actions taken and filings made by Staff necessary to effectuate the sale of the Series 2003A Bonds, including any filings with the Department of Treasury. The Chairperson, any Commissioner, the General Manager and the Chief Financial Officer of the Board are severally authorized to execute such certificates and other documents and to take such other actions or make such other filings as may be necessary or convenient to effectuate the proper sale, execution and delivery of the Series 2003A Bonds, Section 13. Conflicting Resolutions. All resolutions or orders, or parts thereof, in conflict with the provisions of this Eighth Supplemental Revenue Bond Resolution are repealed. Section 14. Severability and Para rg_aph Headings. If any section, paragraph, clause or provision of this Eighth Supplemental Revenue Bond Resolution shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any other provisions of this Eighth Supplemental Revenue Bond Resolution. The paragraph headings in this Eighth Supplemental Revenue Bond Resolution are furnished for convenience of reference only and shall not be considered to be a part of this Eighth Supplemental Revenue Bond Resolution. Section 15. Publication and Recordation. This Eighth Supplemental Revenue Bond Resolution shall be published in full in The Lansing State Journal, a newspaper of general circulation in the City of Lansing qualified under State law to publish legal notices, promptly 16 after its adoption, and shall be recorded in the minutes of the Board and such recording authenticated by the signatures of the Chairperson and the Corporate Secretary of the Board. Section 16. Effective Date. This Eighth Supplemental Revenue Bond Resolution shall be effective immediately upon its adoption. 17 Adopted and signed on the day of , 2003. /s/ /s/ Chairperson Mary E. Sova Corporate Secretary ADOPTED: IN FAVOR AGAINST ABSTAIN ABSENT 18 STATE OF MICHIGAN ) ss: COUNTY OF INGHAM ) I, the undersigned, the Corporate Secretary of the Board of Water and Light of the City of Lansing, certify that the foregoing is a true and complete copy of a resolution adopted by the Board of Water and Light of the City of Lansing at a meeting held on 2003, the original of which is on file in my office. I further certify that notice of the meeting was given in accordance with the provisions of the Open Meetings Act. Mary E. Sova, Corporate Secretary Board of Water and Light of the City of Lansing LANSING 32063-09 324002v02 19 ATTACHMENT b WATER fl®T Lansing Board of sm Water and Light Rules and Regulations For Electric Service ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 WATER R&LGHT Lansing Board of Table of Contents Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions.................................................................................................................................................................... 4 Applicationfor Service............................................................................................................................................... 6 ServiceConditions......................................................................................................................................................7 Characterof Service.................................................................................................................................................. 7 Descriptionof Service ..............................................................................................................................................7 AvailableVoltage.................................................................................................................................................7 DualVoltage Transformers................................................................................................................................... 8 Agreements........................................................................................................................................................... 8 MaterialAvailability............................................................................................................................................. 8 Useof Service.............................................................................................................................................................. 9 General...................................................................................................................................................................... 9 Accessand Damages ................................................................................................................................................ 9 CustomerEquipment................................................................................................................................................ 9 PowerQuality........................................................................................................................................................... 9 PowerFactor........................................................................................................................................................... 10 Tampering............................................................................................................................................................... 10 Metering......................................................................................... ................ 11 General.................................................................................................................................................................... I 1 Installation/Ownership............................................................................................................................................ I 1 EquipmentLocation................................................................................................................................................ I 1 MultipleOccupancy Buildings............................................................................................................................... 12 Applicationof Rates ................................................................................................................................................. 13 General.................................................................................................................................................................... 13 Resale...................................................................................................................................................................... 13 Choiceof Rates....................................................................................................................................................... 13 ReactivePower....................................................................................................................................................... 13 Space Conditioning-Electric Water Heating Service............................................................................................ 14 Mobile Homes in Courts -Individually Served...................................................................................................... 14 Apartment Buildings and Multiple Dwelling Structures......................................................................................... 14 Cogeneration and Small Power Production Facility............................................................................................... 14 BillingDemand....................................................................................................................................................... 15 MinimumCharges.................................................................................................................................................. 15 Property Owner-Rental Agent Agreement for'Leave On' Service....................................................................... 15 Responsibilityfor Payment of Bills......................................................................................................................... 16 General.................................................................................................................................................................... 16 EstimatedConsumption.......................................................................................................................................... 16 BillingErrors.......................................................................................................................................................... 16 AccountSecurity Deposits...................................................................................................................................... 16 Disputeand Hearing Procedure.............................................................................................................................. 18 Disputes .................................................................................................................................................................. 18 Hearings.................................................................................................................................................................. 18 Sale and Lease of Service Facilities.........................................................................................................................20 DistributionSystem Extensions...............................................................................................................................21 General....................................................................................................................................................................21 Request for Distribution System Extension........................................................................................................21 Ownership...........................................................................................................................................................21 Nonrefundable Contribution for Underground Extensions.................................................................................21 Deposit................................................................................................................................................................21 EconomicDevelopment Offsets.........................................................................................................................23 Easements and Tree Trimming/Removal Permits...............................................................................................23 ADOPTED: 7/22/03 EFFECTIVE: 8/l/03 Page 2 of 39 WATEERRBLTGHT Lansing Board of Table of Contents Water and Light Non-Standard Equipment...................................................................................................................................23 Non-Standard Construction.............. ...........23 ....................................................................................................... OtherFacilities....................................................................................................................................................23 CustomerProvided Facilities..............................................................................................................................24 MobileHome Courts ..........................................................................................................................................24 StreetLighting....................................................................................................................................................24 Outdoor Protective Lighting......................................I......................... ...................24 Subdivisions........................................................................................................................................................24 AvailableVoltage...............................................................................................................................................24 Construction Date of Distribution Extension......................................................................................................25 Trenchingand Duct ................................................................................................................................................ 25 Conversion of Existing Overhead Distribution Systerns and Associated Services................................................. 26 Electric Facility Relocations and Removals ........................................................................................................... 26 Distribution System Extensions for Second Source................................................................................................ 27 Distribution System Extensions to Loads of Questionable Performance................................................................27 Services...................................................................................................................................................................... 29 General....................................................................................................................................................................29 TemporaryServices................................................................................................................................................29 Residential,Commercial and Industrial Overhead Services...................................................................................30 Residential,Underground Services from Underground Distribution Systems ....................................................... 30 Residential Underground Services from Overhead Distribution Systems..............................................................31 Commercial and Industrial Underground Services................................................................................................. 31 Conversion of Existing Overhead Electric Service................................................................................................. 32 Electric Service Relocations and Removals............................................................................................................ 32 SecondService........................................................................................................................................................ 33 Motors........................................................................................................................................................................ 34 Useof Board Equipment.......................................................................................................................................... 35 General.......................... .................................................................... 35 AuthorizedAttachments.........................................................................................................................................35 UnauthorizedUse and Removal............................................................................................................................. 35 ParallelPower Sources............................................................................................................................................. 36 General.................................................................................................................................................................... 36 Approvals.................................................................... ..... 36 Controland Protection............................................................................................................................................ 36 Operation................................................................................................................................................................ 36 Termination............................................................................................................................................................. 37 Contract.................................................................................................................................................................. 37 Scheduleof Fees&Charges..................................................................................................................................... 38 ADOPTED: 7/22/03 EFFECTIVE: 8/l/03 Page 3 of 39 WATER&LIGHT Lansing Board of Definitions Im Water and Light Electric Rule and Regulation 1 DEFINITIONS OF TERMS AND THEIR ABBREVIATIONS AMPERE— Unit of electrical current. ANNUAL REVENUE—Income received from a Customer or a group of Customers for a twelve(12)month period, less sales tax. BOARD— When used in these Rules and Regulations,Board is an abbreviation meaning the Board of Water and Light. CUSTOMER— A purchaser of electrical service supplied by the Board. DEMAND— The load at the terminals of an installation or system, averaged over a specified interval of time. Demand is expressed in kilowatts,kilovoltamperes (kVA) or other suitable units. DISTRIBUTION LINE — That portion of the Board's system which delivers Electric Power from transformation points on the transmission or bulk power system to the Customer. DUAL WOUND TRANSFORMER—A transformer whose primary windings are so designed and interconnected so that the transformer has the full rating capability to operate on either of two different Primary Voltages. DWELLING UNIT —A Dwelling Unit shall be considered as a single room, suite or groups of rooms or suites which have individual cooking and kitchen sink facilities designed for or used exclusively for residential purposes. ELECTRIC POWER—A term used in the electric power industry to mean inclusively power and Energy, expressed in kilowatts and kilowatt-hours. ENERGY— That which does or is capable of doing work. It is measured in terms of the work it is capable of doing;electric energy is usually measured in kilowatthours. FACILITIES— A general term which includes devices, associated structures and the like, used as a part of or in connection with an electric installation. HERTZ—(Hz)— Cycle per second. HIGH-RISE HOUSING STRUCTURE — A building in excess of three stories in height comprised primarily of several individually metered residential Rate Customers. HORSEPOWER(hp)—Unit of mechanical power equivalent to 746 watts of electrical power. KILO(k)— Prefix meaning one thousand. KILOVOLTAMPERE (kVA)—Unit of apparent electrical power which at 100%Power Factor is equivalent to one kilowatt. KILOWATT (kW) — Unit of electrical power representing rate of usage of Energy, equivalent to about 11/3 Horsepower. KILOWATT-HOUR(kWh)—Unit of electrical Energy equivalent to the use of one kilowatt for one hour. LOAD— The amount of power or kilovoltamperes delivered at a given point. MAIN LINE TRENCH—A Trench in which Primary Voltage Distribution Lines are installed. ADOPTED: 7/22/03 F.FFF.C:TiVR- 8/1/03 Page 4 of 39 WATER Lansing Board of Definitions Water and Light Electric Rule and Regulation I MOBILE HOME COURT — A mobile home court is defined as a parcel or tract of land upon which three (3) or more mobile homes are located and occupied on a continuous non-recreational basis. The mobile home court shall be of a permanent nature with unproved streets and with individual water and sewer connection to each lot. POWER FACTOR(P.F.)—Ratio of kilowatt power to kilovoltampere apparent power, expressed in%. PREMISES— A building and its grounds. PRIMARY VOLTAGE—Nominal voltage of 601 Volts to 15,000 Volts. RATE— The unit prices as established by the Board's rate-making body and the quantities to which they apply as specified in the Rate Schedule. RATE SCHEDULE—A filed statement of the electric Rate and the terms and conditions governing its application as established by the Board's rate-making body. RESIDENCE (also residential) — Shall include one family, two family and multiple family structures containing three or more individual Dwelling Units, but not including High-Rise Housing Structures. RISER POLE— Pole where the transition takes place between underground and overhead Facilities. May be primary or secondary. SECOND SERVICE—Additional service of substantially the same characteristics usually supplied from the same source. SECOND SOURCE— Additional source of substantially the same characteristics supplied from a separate electric Distribution Line. SECONDARY VOLTAGE—Nominal voltage of 600 Volts or less. SERVICE ENTRANCE CONDUCTORS — The Customer-owned conductors between the Customer's main disconnecting device and the termination of the Board's service conductors. SERVICE LOCATION—The point at which the Board has agreed to provide electric service. TRANSMISSION SYSTEM — That portion of the Board's system which delivers Electric Power with a nominal voltage of 138,000 Volts. TRENCH— A cut in the ground in which cables,pipes, etc. are installed. VOLT— Unit of electrical force. ADOPTED: 7/22/03 EFFECTIVE: 8/l/03 Pace 5 of 39 WATE�HT Lansing Board of Application for Service IM Water and Light Electric Rule and Regulation 2 Application for Service L General Copies of the Board's Rate Schedules for electric service are open to public inspection at the Board's offices and are available on the Board's Internet Web site wwtiv.lbwl.com or upon request. Application for original, modified or added service shall be made at the office of the Board of Water and Light at 1232 Haco Drive,Lansing. Any Customer receiving or agreeing to receive electric service from Board Facilities shall be deemed a Customer of the Board subject to its Rates and these Rules and Regulations and responsible for the service used whether such service is provided under a signed agreement or not. Electric service will not be supplied to new or remodeled buildings until such installations have been inspected and approved by the appropriate inspection authority and are in accordance with these Rules and Regulations. Before purchasing equipment or installing wiring, the Customer should contact the System Integrity & Customer Projects Department of the Board to determine the characteristics of the electric service available at the Premises, since all voltages may not be available. The System Integrity & Customer Projects Department will inform the Customer of the Board's requirements, which must be fulfilled by the Customer, in order to receive electric service. The Board may discontinue electric service to any Customer for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. The Customer must pay a reconnection fee as stated in Rule 15 to cover the costs of restoring electric service that has been discontinued for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 6 of 39 WATER&L� Lansing Board of Service Conditions SM Water and Light Electric Rule and Regulation 3 Service Conditions 1. Character of Service The Board supplies 60 Hertz alternating current throughout its service area and will endeavor, but does not guarantee, to furnish a continuous supply of electric Energy and to maintain voltage and frequency within reasonable limits. The Board shall not be liable for interruptions in the service including without limitation, phase failure or reversal, or variations in the service characteristics, or for any loss or damage of any kind or character occasioned thereby, due to causes or conditions beyond the Board's reasonable control, and such causes or conditions shall be deemed to specifically include, but not be limited to, the following: acts or omissions of Customers or third parties; operation of safety devices except when such operation is caused by the negligence of the Board; absence of an alternate supply of service; failure, malfunction, breakage, necessary repairs or inspection of machinery, Facilities or equipment when the Board has carried on a program of maintenance consistent with the general standards prevailing in the industry; act of God; war; action of the elements; storm or flood; fire; riot; sabotage; labor dispute or disturbance, or the exercise of authority or regulation by governmental or military authorities. Notwithstanding any other provision of these rules, the Board may interrupt, curtail or suspend electric service to all or some of its Customers in accordance with the provisions of the Board's Emergency Electrical Curtailment procedures or as necessary to protect the health, safety and welfare of its employees or Customers. The Board shall be under no liability with respect to any such interruption, curtailment or suspension. 2. Description of Service A. Available Voltage (1) Single phase 120/240 Volt, three wire service is available for lighting and miscellaneous requirements. At the Board's option single phase 120/208V, three wire service may be made available. (2) Combined lighting and power service at 120/208 Volt, three phase, four wire; 120/240 Volt, three phase, four wire; or 277/480 Volt, three phase, four wire may be made available at the Board's option. (3) Three phase power service at 240 Volts, three wire, or 480 Volts, three wire, may be made available for Customers desiring a separate power service. The Board is not required to provide more than one lighting and one power service or one combined lighting and power service to a Customer's Premises. In such cases, the Customer shall pay the cost of providing this additional requirement. (4) If a Customer requires a three phase voltage different from the established voltage in the area, it may be furnished at the Board's option. In such cases, the Customer shall pay all extra costs involved. In the case where there is more than one established voltage in the area, the Board shall determine which voltage will be furnished and any applicable costs as determined by Rule 10, Rule 11 and Rule 15. (5) Primary Voltage service is also available for Customers whose Demand is 100 kW or more. The Board shall determine the particular Primary Voltage available. All ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 7 of 39 WATEs a°®Hr Lansing Board of Service Conditions Water and Light Electric Rule and Regulation 3 equipment necessary for utilization of service by the Customer shall be Board approved and shall be located on the Customer's side of the point of delivery and shall be furnished, installed and maintained by the Customer. Point of delivery shall be at the Board's electrical service connection to Customer owned equipment, For Customer owned transformer installations larger than those listed below, the Board may require the Customer to furnish, install and maintain special primary protective equipment. Primary Voltage Combined (Phase to Phase) Transformer—3 phase kVA 4,160 V 5001cVA 8,320 V * 1,000 kVA 13,200 V 2,000 kVA * This voltage is only available for existing Customers currently receiving this voltage. (6) Service shall be provided at voltages specified in this Rule 3. Customer will be responsible for making any voltage modifications beyond the Service Location for equipment requiring a voltage different from this Rule 3. B. Dual Voltage Transformers All Customer owned transformers installed in an area scheduled for conversion to a higher distribution voltage will be required to be dual wound. In such cases, the Board may share in qualified additional costs of such Dual Wound Transformers. C. Agreements The Board may require the Customer to enter into a written agreement that details the terms and conditions and price to be paid by the Customer prior to electric service construction. In addition,the Board may negotiate written contractual arrangements as to the provision of necessary service Facilities, duration of service, amount of deposit and refunds thereon, minimum bills or other service conditions for Customers or prospective Customers whose Load requirements exceed the capacity of the available distribution system in the area or whose Load characteristics or special service needs require unusual investments by the Board in service Facilities or where there is not adequate assurance of the permanent use of the service. No promises, agreements or representations of any agent or employee of the Board shall be of binding force upon the Board unless the same is within the authority of that individual and incorporated in the written agreement. D. Material Availability Subject to the restrictions contained in Rule 3.2.A, the Board will construct electric distribution Facilities and extensions only in the event it is able to obtain or use the necessary materials, equipment and supplies. The Board may, in its discretion, allocate the use of such materials, equipment and supplies among the various classes of Customers and prospective Customers of the same class. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 8 of 39 WATER Lansing Board of Use of Service IM Water and Light Electric Rule and Regulation 4 Use of Service 1. General Electricity is supplied to a Customer for exclusive use on the Premises to which it is delivered by the Board. Service may not be shared with another, sold to another, or transmitted off the Premises without the written pennission of the Board, except as noted in Rule 6. 2. Access and Damages The Customer shall provide and maintain appropriate access and working space around electric Facilities in accordance with all applicable electrical codes and Board standards so as to permit ready and safe operation and maintenance of such Facilities. The Board's authorized personnel or agents of the Board shall have access to the Customer's Premises at all reasonable hours for all purposes necessary to conduct business, including without limitation: 1) install, inspect, read, repair, maintain, test or remove its meters 2) to install, operate and maintain other Board equipment or Facilities, and 3) to inspect and determine the coruiected electrical Load. If a meter, metering equipment or other Board property is damaged or destroyed through the neglect of the Customer, the cost of necessary repairs or replacements shall be the responsibility of the Customer. If, for any reason beyond its control,the Board is unable to read a meter, operate, maintain or make inspection including, but not limited to, reasons such as Premises being locked, meter being inaccessible or unsafe conditions, then after due written notice to the Customer, the electric service may be disconnected until such time as arrangements have been made to permit access for Board inspection and approval, and the Customer has paid the appropriate reconnection fee as stated in Rule 15. 3. Customer Equipment The Board may deny or tenninate service to any Customer whose wiring or equipment constitutes a hazard to the Board's employees, equipment or its service to others. However, the Board is not responsible to inspect the Customer's wiring or equipment and shall not be held liable for any injury or damage resulting from the condition thereof. The Customer shall install and maintain the necessary devices to protect Customer owned equipment against service interruptions, phase loss and other disturbances on the Board's system, as well as the necessary devices to protect the Board's Facilities against overload caused by the Customer's equipment. 4. Power Quality The Customer shall use the service as not to cause interference, affect voltage, affect frequency, add harmonics, or otherwise cause other disturbances to the Board's system or another Customer's service. If the Board notifies the Customer of such a condition, the Customer shall discontinue operation of equipment causing such condition until a correction has been made. The Customer will be charged for all costs associated with alterations to the Board's system required to continue proper operation of the Board's system in conjunction with the Customer's equipment. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 9 of 39 WATER RBL` Lansing Board of Use of Service Water and Light Electric Rule and Regulation 4 In determining the existence of disturbances, the Board will rely on the latest revision of Standard 519, IEEE Recommended Practices and Requirements for Harmonic Control in Electric Power Systems. The Board may also use other appropriate standards or criteria in determining disturbances to the Board's system. 5. Power Factor The Board is not obligated to Rimish service to Power Factor Loads less than eighty-five percent (85%) whether newly installed, reconnected or moved to another location, unless the Customer provides, at no expense to the Board, suitable equipment for improving the Power Factor to at least eighty-five percent(85%). 6. Tampering The Board may discontinue service and seek criminal charges, if it is determined that the meter or wiring on the Customer's Premises has been tampered with or altered in any mariner to steal electricity. If the Board discontinues service for this reason, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 15, made appropriate restitution for stolen service and made provisions for an outdoor meter installation or other metering changes as may be required by the Board. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 10 of39 WATEwATER&L�T Lansing Board of Metering Water and Light Electric Rule and Regulation 5 Metering 1. General All Energy sold to Customers shall be measured by commercially acceptable measuring devices owned and maintained by the Board except where it is impractical to meter, such as street lighting, temporary or special installation, in which cases the consumption may be calculated. 2. Installation/Ownership The Customer shall be responsible to install that metering equipment furnished by the Board and shall fiirnish, install, own and maintain all other service equipment, and all wiring and conduits, from the weatherhead of an overhead service connection and from the point of service of an underground service confection. 3. Equipment Location A. The Customer shall provide, at no expense to the Board, a space/enclosure suitable to the Board for the installation of the necessary metering equipment. The Customer shall also furnish the space and the provisions for mounting current and potential transformers to meet Board requirements. Where the Customer desires to utilize a Board standard current and potential transformer enclosure, the Customer shall make a payment as specified in Rule 15. Inquiries regarding installation requirements and equipment approval should be directed to the System Integrity& Customer Projects Department. B. The Board requires that the metering equipment for all residential and, where practicable, commercial and small industrial Customers be located outdoors on the Customer's building or structure. The meter shall be located within service pedestal line of sight and at the nearest point of attachment as practicable. The meter shall be located on the same half of the dwelling as the service pedestal and the service shall not pass under a driveway. Meters in existing indoor installations that are to be rearranged so as to affect the Service Entrance Conductors or service equipment shall be changed to outdoor installations where suitable locations are available. C. The Board must approve the mounting of metering equipment indoors in those cases where there is no suitable outdoor location. Indoor locations must be as near as practicable to the point where the Service Entrance Conductors enter the building. Interior walls, panels or meter boards on which meters are mounted shall be rigid and free from vibration and shall be located in a clean and dry part of the building. D. Meter sockets, meter connection boxes and instrument transformer enclosures shall not be used as junction boxes for supplying Customer's branch circuits or grounding conductor termination, and no wiring other than service entrance and grounding conductors shall be run through this equipment. Metered conductors from different meters shall not be placed in the same raceway between the meter and the main disconnect device. E. The height of single line meter settings shall not be less than four and one-half(4'/2) feet nor more than five and one-half(5'/z)feet above finished grade or floor level. F. When using stacked multiple meter socket panels, the lowest meter shall not be less than twenty-four (24) inches from the floor for indoor locations. For outdoor locations, the installed meter centerlines shall be a minimum of thirty (30) inches from finished grade, and a maximum of seventy-two (72) inches from finished grade, and shall be limited to a maximum four(4)meter stack. ADOPTED: 7/22/03 FFFFCTTVF.• 9/1/01 Page 11 of 39 WATER&-LIGHT Lansing Board of Metering sm Water and Light Electric Rule and Regulation 5 4. Multiple Occupancy Buildings The metering and Customer's service equipment for multiple occupancy buildings where several floors, apartments, stores, etc. are rented separately should be grouped in a common meter room, public hallway or some other Board-approved location where they will be accessible at all tunes to Board authorized personnel or agents of the Board. Metering equipment in multiple occupancy buildings shall be plainly marked with metal tags or neat lettering and/or numerals identifying the portion of the building served. Such identification shall be the responsibility of the building owner. 5. Meter Calibration Request A Customer may request the Board to test the meter calibration. The Board will perform such test to determine if the meter accuracy is within plus or minus 2%. If the test demonstrates the meter accuracy is within the allowed limits, the Customer may be charged an amount as stated in Rule 15. If the test demonstrates that the meter accuracy is outside of the plus or minus 2%, the Board shall replace the meter. 6. Rate 5 and 8 Meter Installations After July 1, 2002 all Customers selecting Rate 5 or Rate 8 shall install a phone line with active service to the meter enclosure in accordance with Board standards. The Customer shall be responsible for installation, maintenance and ongoing costs of the phone line. The Customer shall notify the Board of any phone number changes. The Board may impose a Meter Non-compliance Charge as specified in Rule 15 for each month the Customer has not complied with the requirements of this Rule 5.6. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 12 of 39 wATE�LI� Lansing Board of Application of Rates Water and Light Electric Rule and Regulation 6 Application of Rates I. General: Residential Rates are predicated upon the Board not being required to provide more than one lighting service to a residential building or structure. All other Rates are predicated upon the Board not being required to deliver more than one lighting and one power service or one combined lighting and power service for the total requirements of each separate building or structure of the Customer, unless otherwise provided for un these Rules and Regulations. The Board shall separately meter and separately bill service at different points or at different buildings or structures unless specifically provided for in the applicable Rate Schedule. 2. Resale: The owner or operator of an office building, apartment building, shopping mall, or similar structure may purchase Energy from the Board for resale to occupants on the condition that service to each occupant shall be metered separately and that the occupants may not be charged more for such service than the appropriate Rate of the Board available for similar service under like conditions. In order to qualify for resale to tenants, the owner or operator must state their intent to resell in the application for service. The renting of Premises with the cost of electric service included in the rental as an incident of tenancy will not be considered a resale of such service. 3. Choice of Rates: In some cases, the Customer may be eligible to take service under any one of two or more Rates. Upon request, the Board will advise the Customer in the selection of the Rate that will provide the lowest cost of service, based on the best available information, but the responsibility for the selection of the Rate shall be the sole responsibility of the Customer. After the Customer has selected a Rate, the Customer may not change from that Rate to another Rate until at least twelve (12) months have elapsed. The Customer shall not evade this rule by temporarily terminating service. The Board may, waive the provisions of this paragraph where it appears that a change of the Rate is necessary for permanent rather than temporary or seasonal advantage. The intent of this rule is to prevent frequent changes from Rate to Rate. The Board shall not be responsible to refund the difference in charges tinder different Rates applicable to the same class of service, unless the Board provided an incorrect initial service turn- on Rate setting or unless the Customer makes a written request and has a permanent change in Load profile. Any refund is subject to Board approval. 4. Reactive Power: General service Rates that include a capacity charge (Demand Rate) may be subject to an adjustment for a reactive power charge based on registered reactive kilovolt ampere hours (kVARh) during the billing period. All Primary Voltage installations will include kVARh metering to determine the reactive power charge. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 13 of 39 WATER R® Lansing Board of Application of Rates Water and Light Electric Rule and Regulation 6 The Board may require all or any Secondary Voltage Demand Rate Customers whose maximum Demand is 100 kW or more for six(6) months out of any one twelve (12) month period to install a kVARh meter for reactive power adjustment. Secondary Voltage Demand Rate Customers whose Demand is less than 100 kW may be tested with portable kVARh metering equipment to determine if permanently installed kVARh metering is justified. The Board may determine the average Power Factor by test and apply a reactive power charge. Customers who install Power Factor correction equipment may request that kVARh metering be installed. S. Space Conditioning-Electric Water Heating Service: Space Conditioning-Electric Water Heating Service Rate No. 12 is available to commercial and industrial Customers for space conditioning and water heating service as specified in the availability clause in the Rate Schedule. Other uses of electricity at the Premises will be billed using an appropriate secondary General Service Rate. 6. Mobile Homes in Courts—Individually Served: Service to new Mobile Home Courts and expanded service to existing Mobile Home Courts shall be provided through individual tenant metering. Ordinarily, electric service to a mobile home shall be in the name of the occupant; however, service to lots designated for occasional or short-tern occupancy shall be in the name of the owner of the Mobile Home Court or an authorized representative. For rules covering installation of electric distribution and services for mobile homes in courts, see Rule 1.0.1.K. An individually served mobile home used as a Residence will qualify for an appropriate residential electric service Rate. 7. Apartment Buildings and Multiple Dwelling Structures: 1. An apartment building or multiple dwelling structure containing four (4) or less Dwelling Units may elect to be billed on the appropriate Residential Service Rate. 2. Apartment buildings or multiple dwelling structures containing five (5) or more Dwelling Units shall have each Dwelling Unit separately metered. 3. Apartment buildings or multiple dwelling structures constructed after March 1, 1979 shall have each Dwelling Unit separately metered. 8. Cogeneration and Small Power Production Facility: Customers who utilize cogeneration or small power production equipment as an Energy source may receive partial or standby service under the following applicable Board Rate Schedules: Residential Electric Service—Rate 1 General Service—Rate 3 Large General Service—Rate 4 Primary Service—Rate 5 Large Capacity Electric Service Rate—8 ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 14 of39 WATER Lansing Board of Application of Rates Water and Light Electric Rule and Regulation 6 A Customer requesting electric service under this Rule shall enter into a special contract with the Board setting forth terms and conditions of service. Customers who elect to sell Energy to the Board will be paid for such Energy at the Rate specified in the applicable Rate Schedule as set forth above. When not so specified in the applicable Rate Schedule,the Board will pay for such Energy at a Rate which approximates its avoided costs. 9. Billing Demand: If a Customer's electric Load drops below the minimum Demand requirement of Rate No. 4, 5, or 8 the Board reserves the right to change the billing Rate of this service to another appropriate General Service Rate. 10. Minimum Charges: A minimum charge, as defined by the Rate in effect, shall be applied to all services and billed to the Customer. Where the Customer requests that a service be discontinued, the Board shall deactivate the service by any appropriate means, including without limitation, removing the meter and/or by disconnecting the service from the Board's distribution system. 11. Property Owner-Rental Agent Agreement for"Leave On" Service: The BWL may waive application charges to maintain continuity of service at rental property locations provided: (1) the landlord agrees in writing to assume the responsibility for electric service during the interim between tenants, and(2)the landlord is in compliance with all other rules and regulations of the Board. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 15 of 39 WATE®8® Lansing Board of Responsibility for Payment of Bills Water and Light Electric Rule and Regulation 7 Responsibility for Payment of Bills L General Each Board Customer is responsible to pay all utility bills as rendered on or before the due date shown thereon. The Customer remains responsible for payment of the bills until the Customer orders service to be discontinued and the Board has had reasonable time to secure a final meter reading. Bills are rendered on approximately a monthly basis. Bills are mailed to Customers approximately fifteen (15) days before the due date shown on the bill. The Customer shall pay the net amount if paid on or before the due date on the bill. Failure on the part of the Customer, through no fault of the Board, to receive the bill shall not entitle the Customer to pay the net amount after the due date of the bill. If a bill remains unpaid after issuing a five (5) day written shut-off notice, the Board shall have the right to discontinue service. In extenuating circumstances, a Customer will be afforded the opportunity to make payment arrangements. Service to a Customer shalt not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not in dispute. 2. Estimated Consumption Readings may be estimated when conditions warrant. Until reconciled by an actual reading, bills rendered on estimated consumption have the same force and effect as bills rendered on actual meter readings. 3. Billing Errors When an error is found to exist in the billing rendered to a Customer, the Board will correct such error to recover or refund the difference between the original billing and the corrected billing. Corrected billings will not be rendered for periods in excess of three (3)years. Refunds to Customers will normally be made promptly upon discovery of the error. Amounts due the Board from the Customer will be subject to normal collection policy and procedures. 4. Account Security Deposits The Board shall require an account security deposit from any new or existing Customer with an unacceptable credit history. The Board may apply different rules to new Customers signing up for service in accordance with Rule 7A.C. The deposit is normally 1.5 times the average monthly bill (actual or estimated) as determined by the Board. If a deposit is required for new residential Customers, the Board shall determine the amount in accordance with Rule 15. To determine the deposit for new commercial and industrial Customers, the Board will estimate the average monthly bill and apply the 1.5 factor. The Board may waive deposits in special circumstances. The Board may also demand deposits larger than 1.5 times the average monthly bill if the Board determines that a Customer presents a higher than normal credit risk. The Board will refund deposits to all Customers who have taken service for 12 months and have an acceptable payment history. The Board will also refund deposits to Customers who have terminated service and paid all charges due. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 16 of 39 WATER LIGHT Lansing Board of Responsibility for Payment of Bills Water and Light Electric Rule and Regulation 7 A. A security deposit may be required in any of the following circumstances: (1) The Customer has deliberately misinformed or misrepresented facts to the Board. (2) The Customer has tampered with the meter during the last 12 months. (3) The Customer has had one or more payments canceled in the last 12 months due to: (1) non- sufficient funds returned check, (2) account closed returned check, (3) non-sufficient funds bank bill, (4) account closed bank bill, or(5) credit card reversal. (4) The Customer has received a final notice on any account within the last 12 months. (5) The Customer has received more than 3 second notices on any account during the last 12 months. (6) The Customer has a past due balance on any account that is greater than$50.00 for more than 31 days past due in the past 12 months. (7) The Customer has a suspended or bad debt account within the last 12 months. B. If the Customer is applying for service through an artificial legal entity such as a corporation, or limited partnership,then the Board may request a deposit or other security of payment. C. New Customers will not be required to submit a deposit, in any of the following situations: (1) The Customer has no previous service history with the Board. (2) The Customer has previously established an acceptable payment history with the Board on a similar account. (3) The Customer's bill is paid by the State of Michigan. (4) The Customer secures a guarantor with a similar account and an acceptable payment history. (5) The Customer provides an acceptable surety bond. (6) The Customer provides an acceptable credit reference letter from a similar utility company for a similar account. Account must have been in the Customer's name and maintained for a minimum of 12 consecutive months. (7) The Customer has established an acceptable credit rating with a credit-reporting agency. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 17 of 39 WATE®- Lansing Board of Dispute and Hearing Procedure so Water and Light Electric Rule and Regulation 8 Dispute and Hearing Procedure I. Disputes In accordance with the Lansing City Charter,the Board is required to provide a fair and equitable dispute and hearing process for its Customers as follows: A. When any Customer disputes a bill or service and the Board is so advised, the date of the notice of dispute will be recorded. B. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not disputed. C. The disputed bill or service will be investigated promptly and completely. D. The Customer will be advised of the results of the investigation. E. An attempt will be made to resolve the dispute in a manner mutually satisfactory to both parties. F. The Board will provide the opportunity for each Customer to enter into a reasonable settlement agreement in order to mutually resolve the disputed claim or to satisfy any liability not in dispute. G. If a settlement cannot be reached between the Customer and the Board's Account Administrator, the Customer may choose to appear before the Board's Dispute Review Committee. The review will be scheduled within ten(10) days of the request or as mutually agreed to by both parties. H. If a settlement carulot be reached following examination by the Dispute Review Committee, the account will be referred to the Board's General Manager. 1. If a settlement is not reached after review by the Board's General Manager, the Customer shall be afforded an opportunity for a hearing. J. The Customer shall be responsible for payment of all other bills or portions of bills as rendered which are not in dispute. 2. Hearings A. Any Customer who disputes the services provided or a billing for services furnished in accordance with the Board's filed Rates, Rules and Regulations or established policies or procedures may request a hearing. If a hearing requested is based on a disputed past due bill, the request must be made within ten (10) calendar days following the final outcome of the dispute process. Any request for a hearing may be made in writing and received by the Board's corporate office at 1232 Haco Drive,Lansing,Michigan, 48912. B. On receipt of a request for a hearing, the Board will forward this request to an independent Hearing Officer. The Hearing Officer will arrange a time for the hearing and advise both the Customer and the Board of the date,time and location in writing. The hearing will be scheduled during normal business hours. Failure of the Customer or Board to attend the hearing without due cause or prior request for adjournment will constitute a waiver of right of that party to the hearing. C. The Board and the Customer shall: (1) Have the right to be represented by Counsel or other persons of their choice. (2) Have the right to present evidence, testimony and oral and written argument. (3) Have the right to cross-examine witnesses appearing on behalf of the other party. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 18 of 39 WATER Lansing Board of Dispute and Hearing Procedure Im Water and Light Electric Rule and Regulation 8 (4) Have the right to have the hearing recorded by a court reporter at the expense of the party requesting a court reporter. The Hearing Officer shall also have the right to have the hearing recorded by a court reporter. Recordings will be preserved at least six (6) months from the date of the hearing. All evidence relevant to the dispute will be received. D. For each hearing, the Hearing Officer shall compile a hearing record which will contain; (1) A concise statement in writing of the position of the Board in relation to the dispute. (2) A concise statement in writing of the position of the Customer in the dispute. (3) Copies of all evidence submitted by the parties. E. If a decision is reached during the hearing, the Hearing Officer shall state the decision to both parties. If the Hearing Officer does not reach a decision during the hearing, additional time will be allowed to reach a decision. When a decision has been reached, either at the hearing or later, the Hearing Officer will prepare a report which shall contain the following: (1) A concise summary of the evidence and argument presented by the parties. (2) The decision and a statement that the decision of the Hearing Officer was based solely on the evidence presented and reasons therefore. (3) Advise that the representatives of the Board and the Customer have a right to file an appeal with the Board of Commissioners. (4) A statement as to any settlement agreement. (5) A statement that the dispute determination is binding on both parties unless appealed to the Board of Commissioners within ten(10) days of the date of mailing of decision, and that any request for appeal must be in writing to the Corporate Secretary. F. The Hearing Officer shall file the written report with the Board of Commissioners and the Mayor of the City of Lansing. A copy of the report shall be sent to the Customer via certified mail. G. If the dispute is unresolved and the decision appealed, the Hearing Officer shall make recommendations to the Board of Commissioners on the dispute. The Secretary of the Board will arrange a time for the appeal and advise both the Customer and the Board of the date, time and location in writing. Failure of the Customer to appear at the time set for the appeal without due cause, or to request an alternate date,will constitute a waiver of right to appeal. H. The Board of Commissioners shall report its final action on any unresolved disputes together with the Hearing Officer's report and recommendations to the Mayor and the City Council of Lansing, Michigan. I. The Mayor may make recommendations to the Board of Commissioners on each unresolved dispute. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 19 of 39 WATER&LIGHT Lansing Board of Sale and Lease of Service Facilities Water and Light Electric Rule and Regulation 9 Sale and Lease of Sei-vice Facilities I. General To qualify for a primary electric service Rate,the Customer must own and maintain or lease from the Board all the necessary transforming, primary switching, primary metering and protective equipment required for such service and the entire electrical requirements must be supplied through a Board approved metering installation. This service is offered at the option of the Board and the Customer shall meet the requirements of this Rule 9, Rule 3.2.A.(5) and all electrical codes and Board standards. Prior to sale or lease of a Board owned installation for a primary electric service Rate,this installation shall be required to meet all applicable electrical codes, which may require the Customer to install additional equipment such as gang-operated disconnect devices and protective devices. Once the applicable code requirements are met, and subject to Board approval, the Customer will be allowed to purchase or lease the Board owned transformer(s) and associated equipment at estimated fair market value. Upon compliance with the provisions of this Rule 9, the Customer will be placed on the applicable primary electric service Rate. After date of sale, the Board disclaims any rights or ownership or responsibility for the equipment or Facilities and purchaser accepts the equipment or Facilities as is without warranty either express or implied and, further, the responsibility for any and all replacement, maintenance and/or repair as/or when needed wholly rests with the Customer. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 20 of 39 WATEa—' Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 Distribution System Extensions 1. General: A. Request for Distribution System Extension Rule 10 sets forth the conditions under which the Board will extend overhead, underground or combination overhead and underground electric distribution systems. B. Ownership The Board will provide, own, maintain and specify all of its distribution Facilities including location, except as otherwise expressly provided herein. No ownership rights to Board Facilities shall pass to any owner(s), developer(s), or Customer(s) by reason of any contribution required hereunder. C. Nonrefundable Contribution for Underground Extensions The owner(s), developer(s) or Customer shall be required to make a nonrefundable contribution in aid of construction to the Board, to cover the estimated difference in cost between overhead and direct burial underground Facilities. Residential: In Subdivisions: The amount of the contribution shall be computed on the basis of front lot footage as determined by the Board. Where underground distribution system extends through areas within a subdivision that are undeveloped or consists of lots for future use, the front footage measurement of both sides of the street or easement along which the cable extends will be the basis for such contribution. The "Residential Underground Distribution Extension' charge for this contribution shall be as stated in Rule 15. Outside Subdivisions: The amount of the contribution shall be computed on the basis of Trench footage required and to be installed. The"Residential Underground Distribution Extension" charge for this contribution shall be as stated in Rule 15. Commercial/Industrial: The amount of the contribution shall be computed on the basis of Trench footage required and transformer capacity to be installed. The "Commercial Underground Distribution Extension" charge and "Transformer kVA Capacity" charge for this contribution shall be as stated in Rule 15. D. Deposit The Customer may be required to make a deposit based on the following: (1) For Customer(s) to be served within one year: The Board shall require a deposit from the Customer in the amount that the estimated cost of the distribution extension exceeds one and one-half(1'/2) times the estimated new Annual Revenue to be received from the Customer(s). Any nonrefundable contribution in aid of construction made will be credited against the cost of such extension for purposes of this calculation. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 21 of 39 WATEwATEER&-HT Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 (2) For serving Loads of questionable stability or development: A deposit, if required, by the Customer will be based on an evaluation of the Board's recovery of capital cost along with other business related matters. Prior to the installation of a distribution system, the owner(s), developer(s) or Customer(s) who are to make any contribution required hereunder shall be required to enter into a written agreement. The agreement will generally describe the proposed distribution system and set forth the respective obligations of the parties. Such agreements shall be subject in all respects to the provisions of this Rule 10. Each proposed system shall be a separate and distinct unit and any extension thereof shall, if agreed to by the Board, be made the subject of a separate written agreement. Refunds Distribution Line extension deposits made with the Board shall be subject to refund without interest during the first five (5)twelve (12) month periods from the date of the written agreement for a distribution system extension as required by this Rule 10.1.D. Refunds will only be made to person(s) malting the deposit and shall cease when they equal the amount deposited or at the close of the fifth twelve (12) month period following the month during which the line extension is completed, after which the Board shall have no further obligation to refund any remaining portion of the line extension deposit. The Board will refund to the party making the deposit: 1) $500 for each additional new residential permanent Customer(s) directly connected to the extension and; 2) An amount equal to one and one-half (1'/2) times the first year estimated Annual Revenue less the distribution system construction cost for each additional new commercial/industrial permanent Customer(s) directly connected to the extension. Directly connected Customers are those that do not require the construction of more than 300 feet of primary and/or secondary Distribution Lines. Refunds will not be made until the original Customer(s) or its equivalent are permanently connected to the extension. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 22 of 39 WATER Lansing Board of Distribution System Extensions IM Water and Light Electric Rule and Regulation 10 E. Economic Development Offsets Where the Board determines that the distribution system extension will promote development that provides substantial and sustainable economic benefits to its Customers or the Lansing region, the Board will consider an offset to its fees and charges and/or an economic incentive subject to its availability. F. Easements and Tree Trimming/Removal Permits Prior to the installation of any distribution system, the owner(s), developer(s) or Customer(s) shall be required to fiirnish, at no expense to the Board, recordable easements, granting right-of-ways suitable for the installation and maintenance of the distribution system including any street lighting cables and distribution equipment as designed by the Board for present and future service. The owner, developer, or Customer shall also, in a form satisfactory to the Board, grant the Board permission to trim and remove trees as necessary to protect the integrity of its distribution system and the safety and welfare of its employees and the public. In the event the required easements and tree trimming and removal permits are not provided by the owner(s), developer(s) or Customer(s) for such extension, the Board may elect to construct all or any part thereof along public highways or other private property. In such event, the Board may require the owner(s), developer(s) or Customer(s) to pay the added construction expense occasioned by the use of such highways or other private property, plus any expense encountered in acquiring permits and easements on other private property when necessary to provide service to the owner(s), developer(s) or Customer(s). G. Non-Standard Equipment Where the Customer requests that the Board utilize equipment which differs from its normal specifications, purchased or installed, the Board may elect to provide such non- standard equipment with the Customer paying any additional cost. H. Non-Standard Construction Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. 1. Other Facilities The Board may elect to prohibit the construction of sanitary sewers and water facilities in its easement so that sewer and water connections can be made without undermining electrical ducts or cables. It will be the responsibility of the owner(s), developer(s) or Customer(s) to provide locations of any existing privately owned underground facilities such as lawn sprinkler systems, field drainage systems, septic tanks, Customer owned electric lines, etc. If privately owned facilities are not properly located,the Board does not assume responsibility for any damage to these facilities. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 23 of 39 7ATER7c,HT Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 J. Customer Provided Facilities Customers who will be served by an underground distribution system and whose Load requires the installation of a padmounted transformer(s) larger than 500 kVA shall be required to own, install and maintain a concrete platform(s) constructed according to the Board's specifications. Where it is necessary or requested to place the Board's pole(s), transformer(s) or other above-grade equipment in an area on the Customer's property which is susceptible to vehicular traffic, it will be the Customer's responsibility to install guard posts to the Board's specifications or the Board will install them on an estimated installed cost basis. K. Mobile Home Courts Underground distribution systems and services for Mobile Home Courts shall be installed under the provisions of this Rule 10 and Rule 1.1, except that the Board will provide, install and maintain suitable meter supports which will be located along the Main Line Trench at locations as specified by the Board. The Board will install, own and maintain the entire underground electric distribution system, including the pre-metered portion of the service laterals. The service conductors from the meter to the mobile home shall be the responsibility of the Mobile Home Court owner. L. Street Lighting The Board may provide street lighting in areas served directly by its distribution system subject to the governing entity's approval,Board approved standards and the Board's Rate Schedules. The Board may provide underground street lighting in areas served directly by underground distribution systems. M. Outdoor Protective Lighting The Board may provide Outdoor Protective Lighting(OPL) in areas served directly by its distribution system subject to the governing entity's approval, where applicable, Board approved standards and the Board's Rate Schedule. N. Subdivisions The Board will install underground electric distribution systems for all new subdivisions. Likewise, where a new subdivision is located adjacent to an existing overhead distribution system, the Board will generally provide underground service from these overhead Facilities unless the local governmental authority approves the use of individual overhead service connections. O. Available Voltage If a Customer requires a three-phase voltage different from the established voltage in the area, it may be furnished at the Board's option. In such cases, the Customer shall pay all extra costs involved. In the case where there is more than one established voltage in the area,the Board shall detennine which voltage will be furnished. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 24 of 39 WATE- Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 P. Construction Date of Distribution Extension The Board will, based on availability of work crews and material, and subject to approvals of the appropriate regulatory agencies, utilize best efforts in constructing the distribution extension to meet a mutually agreed upon date. 2. Trenching and Duct: The owner(s), developer(s) or Customer(s) shall be required to provide, at no expense to the Board, rough grading (within six (6) inches of finished grade) prior to the installation of the Board's Facilities so that the underground electric distribution system and street lighting cables, if any, can be properly installed in relation to the finished grade. Owner(s), developer(s), or Customer(s) shall install and maintain permanent survey stakes indicating property lines, at no expense to the Board, after rough grading, and prior to installation of the Board's Facilities. The Board's construction standards for the installation of direct burial primary and secondary cables require a minimum cover of thirty-six (36) inches for primary cable and thirty (30) inches for secondary cables and a maximum cover of forty-eight(48) inches, unless otherwise approved by the System Integrity & Customer Projects Department and, in no cases, shall the Board allow any Board owned cable Facilities to remain energized when in known violation of the minimum depth requirements of the National Electrical Safety Code. Any subsequent relocation of Board Facilities required on account of a change in grade that violates this minimum depth requirement shall be done by the Board and billed at actual cost to the owner(s), developer(s) or Customer(s) causing for the violation. The Board may jointly utilize Trenches for primary, secondary cable and service conductors with other utilities. All Trenching and backfilling will normally be provided by the utilities; however, the developer shall be responsible for all extra expense involved if paving is installed before cable or conduit crossings are in place. The Board will backfill Trenches for primary and secondary cables with the same material as has been excavated and with minimum compaction except in cases where material removed is found to be rubble, debris or unsuitable as determined by the Board. In such cases, sufficient sand shall be provided by the owner(s) or developer(s), at no expense to the Board, or the Board may, at the owner's expense, furnish the sand to backfill six(6) inches below and above the Board's cables. Where it is necessary for Trenching and installation of underground electric Facilities to be scheduled during the "Winter Construction Period" as defined in Rule 15, the Customer may be required to pay a"Winter Construction Charge"as established therein. As an option, the Customer or developer may elect to provide all Trenching, backfill and restoration on the Customer's or developer's property to the Board's specifications. Prior to the installation of the Board's direct burial electric Facilities in a Trench provided by the Customer or developer, the Trench shall be inspected by the Board's authorized personnel for proper depth and cleaning of debris. The first inspection shall be at no charge, and all subsequent inspections may be subject to a"Site Inspection"fee as defined in Rule 15. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 25 of 39 WATER Lansing Board of Distribution System Extensions go Water and Light Electric Rule and Regulation 10 If the Board determines that an installation is not practical for direct burial cable, the Board will require ducts. The owner shall be responsible to own, install and maintain ducts, manholes and vaults located on the owner's Premises when: A. The owner requests these Facilities; B. Direct burial installation is impractical; C. The Board requires these Facilities as an extension from a similar existing system, or; D. Other reasons as may be determined by the Board. Otherwise,the Board shall own, install and maintain such ducts and associated Facilities. Ducts, manholes and vaults shall be installed in accordance with the Board's specifications. 3. Conversion of Existing Overhead Distribution Systems and Associated Services: At the request of a Customer, the Board will, if feasible, convert any existing overhead electric distribution system and associated overhead services, including any provisions for street lighting, to underground distribution Facilities. Prior to the commencement of the conversion of any existing overhead distribution systems and associated services, the Customer(s) shall be required to make a nonrefundable contribution in aid of construction. The contribution in aid shall reimburse the Board for the estimated fair market value of the existing overhead Facilities comprising such system plus the cost of removal less the salvage value thereof, plus the cost of the new underground Facilities including, without limitation, the cost of breaking and repairing streets, walks, parking lots, driveways, and the cost of repairing lawns and replacing shrubs, flowers, sod. Should the conversion of these Facilities cause the installation or re-arrangement of other overhead Facilities in the area, the Customer(s) shall reimburse the Board for the installed cost involved in re-arrangement or installation of other existing Facilities. Conversion of any existing overhead electric distribution system and associated overhead services are also subject to the easement provisions of Rule 10.I I.F. Any additional rewiring of Customer owned Facilities made necessary by the conversion of an overhead service to any underground service shall be the responsibility of the Customer. Pole attachments other than the Board's are the responsibility of the attaching party. 4. Electric Facility Relocations and Removals: At the request of a Customer or developer, or as required due to a conflict, or to meet Board Standards,the Board will relocate or remove its electric and associated Facilities provided: A. The relocation or removal is feasible and meets Board Standards. B. The Customer or developer obtains approval from all Customers impacted by the proposed relocation. C. The relocation or removal does not degrade electrical reliability D. All governmental approvals, permits and easements are obtained ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 26 of 39 WATE-T Lansing Board of Distribution System Extensions IM Water and Light Electric Rule and Regulation 10 Prior to any relocation or removal of electric Facilities, the Customer or developer shall be required to make a nonrefundable contribution in aid of construction. The aid in contribution of construction shall reimburse the Board for all relocation and removal costs including material, labor, the cost of breaking and repairing streets, walks, parking lots, driveways, etc., repairing lawns, replacing shrubs, flowers,etc., and any right-of-way costs as per this Rule 10, plus the cost of any necessary modifications to the Board's electric distribution system affected by the relocation or removal, less the salvage value of any portion of the electric Facilities removed. Where relocation or removal of electric Facilities is necessary to serve new or additional Load, the Board may elect to credit all or a portion of the value of any associated revenue to the cost of relocation or removal. The only exception to these relocation provisions will be the relocation of the Board's electric Facilities within public right-of-way that blocks the access to the first driveway to a residential Premise. There will be a charge for relocation work to provide access to any additional driveways to these Premises. Proof of driveway permits will be required prior to any relocation work. 5. Distribution System Extensions for Second Source: A. The Board will not construct at its own expense a second electric source to any facility, new or existing, that can be adequately served with a single source as determined by the Board. Except that a Second Source shall be required for Customers served from the Board's underground lead cable system and the Board may require a nonrefundable contribution in aid of construction as determined by Rule 10.1.D. B. The Customer may have the additional source installed by making a nonrefundable contribution in aid of construction to the Board, in advance, to cover the entire cost of extending the Board's electric Distribution Lines to the Customer's facilities, and any other cost incurred due to increasing the capacity of the Board's existing distribution Facilities. C. Where the reasonable probability exists for future Customers to be connected to the proposed Second Source line extension,the Board may elect to enter into a line extension agreement in accordance with the applicable provisions of this Rule 10. D. In the case of a request for a Second Source,the Board will endeavor, but does not guarantee, to maintain at all times two separate sources to the Customer's facilities. 6. Distribution System Extensions to Loads of Questionable Permanence: When service is requested for Loads of questionable permanence as determined by the Board, including but not limited to billboards, sawmills, mixer plants, gravel pits, etc., the Board will construct the necessary line extension subject to the provisions of Rule 11.2. or, if the Customer so elects, the line extension may be constructed under a line extension agreement subject to the following conditions: A. Prior to commencement of construction, the Customer shall make a deposit with the Board in the amount of the estimated construction and removal costs. Such estimate shall include all labor and material involved in extending Board distribution Facilities and increasing the capacity of existing Facilities to serve the Customer's Load, plus the estimated removal costs. B. At the end of each year for a five (5) year period, the Board may make a refund on the amount deposited. Refunds will be made only to the Customer who made the deposit. This refund will be computed as follows: ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 27 of 39 WATER R® Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 (1) Twenty percent (20%) of the actual current Annual Revenue for electrical service received from the Facilities covered by the deposit. (2) Refunds shall cease when they equal the amount deposited or at the close of the 5d' 12 month period from the date of the written agreement for a distribution system extension as required by Rule 10.1.D, after which the Board will have no further obligation to refund. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 28 of 39 WATER R®T Lansing Board of Services Water and Light Electric Rule and Regulation 11 sm - Services 1. General: The Service Entrance Conductors shall be furnished, installed and maintained by the Customer i l accordance with the National Electrical Code or other applicable local codes and shall conform to the Board's specifications. The Service Location shall be specified by the Board and shall be located so that the Board's service Facilities meet or exceed all clearance requirements of the National Electrical Code, National Electrical Safety Code and other applicable local codes. Should it become necessary from any cause beyond the Board's control to change the Service Location, the entire cost of any changes in the Customer's service shall be the responsibility of the Customer. Should it become necessary for the Board to reinforce or upgrade area distribution Facilities to accommodate the requested service, a nonrefundable contribution in aid of construction may be required as determined by Rule 10.1.D. Any poles, wires and other equipment required at or beyond the Customer's meter shall be furnished, installed and maintained by the Customer. The Board will maintain and repair only those service conductors owned by the Board except as provided in Rule 11.6. In the course of maintaining or repairing service conductors, the Board shall bear no responsibility for damage incurred or restoration to areas where the service conductors pass under any area not readily accessible. The Customer shall be responsible for additional repair costs due to these encumbered services or for damage as a result of negligence, willful damage or carelessness by the Customer, owner or tenants. 2. Temporary Services Customers desiring temporary general secondary service (normally less than six (6) months) for, including without limitation, construction jobs, traveling shows, outdoor or indoor entertainments or exhibitions, shall pay the charge per Customer per month provided in the Board's applicable Rate. The Customer shall furnish a suitable support for the metering. The Customer shall be required to make a nonrefundable contribution in aid of construction with the Board in an amount to cover the cost of installing and removing these temporary Facilities plus a security deposit if required. Meters shall be installed by the Board and may be read daily and the deposit will be modified, as the Energy used may justify such modification. Minor temporary Loads such as construction security cameras may be unmetered and billed at a flat Rate at the approval of the System Integrity and Customer Projects Department. Where overhead temporary service of 400 Amperes or less is desired and where such service is available and does not exceed 100 feet at the time temporary service is needed,the charge will be as specified in Rule 15. Where overhead temporary service is not available at the site or exceeds 100 feet or 400 Amperes, the Customer shall be required to make a nonrefundable contribution in aid of construction to the Board in advance to cover the estimated cost of installation (excluding ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 29 of 39 WATER Ra— Lansing Board of Services Water and Light Electric Rule and Regulation 11 services and meters), plus the cost of removal or abandonment of the temporary Facilities less the salvage realized. For all underground temporary services, the Customer is responsible to Trench and install each underground temporary service conductor(s) in accordance with the requirements of all electric codes applicable, to a point within two (2) feet of the Board's Facilities. Any excavation with power equipment will require notification of the "Miss Dig" system for the identification of all underground Facilities in the area as required by the laws of the State of Michigan. The Customer shall make a nonrefundable payment to the Board for connecting and disconnecting temporary service conductor(s) to Board equipment as stated in Rule 15. 3. Residential, Commercial and Industrial Overhead Services: Where suitable service is available, the Board will install, own and maintain overhead service conductors from its Distribution Lines to the nearest suitable point of attachment on the Customer's buildings or other structures as designated by the Board. Where the Customer requests a point of attachment other than that specified by the Board, then the Customer shall be responsible to pay the cost of installing additional intermediate supports, wires or fixtures necessary to reach the point of attachment requested. The Customer shall furnish, own, install and maintain service masts, when necessary in order to obtain required clearance. The Board will specify the location, height and size of the mast to adequately support the service wires under heavy loading conditions. While the mast should be firmly attached to the principal building frame, the Board does not make recommendations regarding the method of fastening and assumes no responsibility for damage caused by the service wires. The Customer should consult an architect or builder regarding the method of fastening prior to installation. Where paralleled Service Entrance Conductors are used in overhead services, the Customer(s) or the contractor(s) shall be responsible to terminate the paralleled conductors in a single conductor suitable for connection to the Board's overhead service wires. 4. Residential,Underground Services from Underground Distribution Systems: Upon request and where suitable Facilities are available,the Board will install, own and maintain single phase underground direct burial residential electric service conductors to the nearest suitable point of attachment on the exterior of the Customer's building or other structure as designated by the Board, provided that the total capacity of all the Dwelling Units at each Service Location does not exceed the capacity of a single 167 kVA transfonner. Where the total service capacity of all the Dwelling Units at one Service Location exceeds the capacity of a single 167 kVA transfonner,the service conductors shall be installed in accordance with Rule 11.6. The developer or Customer shall be required to make a nonrefundable contribution in aid of construction to the Board to cover the additional cost resulting from the installation of an underground service. For standard installations, the amount of such contribution shall be computed on the basis of the "Residential Underground Service" charge as defined in Rule 15 and applied to the straight line distance from the termination of the Board's secondary Facilities normally at or near the front or ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 30 of 39 WATE- Lansing Board of Services Water and Light Electric Rule and Regulation 11 rear property line, or at the Board's transformer, to a point directly below the Customer's meter as designated by the Board. Where special routing of the service conductors is requested by the Customer and the Board determines this request to be feasible, the cost of the additional service length required to accommodate such special routing shall be the responsibility of the Customer and will be based on the"Residential Underground Service" charge as defined in Rule 15. Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. 5. Residential Underground Services from Overhead Distribution Systems: The Board will, where feasible, install, own and maintain single phase underground direct burial residential electric service conductors from an overhead electric distribution system in accordance with the provisions of Rule 11.4. In addition, the Board will impose a "Secondary Riser Pole Charge" for each underground service supplied from an overhead secondary as stated in Rule 15. If a crossing of a public road is necessary and the Customer requests that the crossing be installed underground, the Customer may be required to make an additional contribution in aid of construction to the Board, in an amount equal to the estimated difference in cost between an overhead and underground crossing. 6. Commercial and Industrial Underground Services: The owner of each commercial or industrial building requiring an underground electric service system shall install, maintain and own the underground secondary service conductors between the building and the service pedestal, padmounted transformer or secondary attachment on the pole. Primary service conductors shall be installed, maintained and owned by the Board. Customers located in areas served by direct burial distribution systems may request the Board to install direct buried electric secondary service conductors to commercial services not exceeding 400 amps where the point of metering is located outside and is in compliance with the Board's requirements. The Board will comply with the request, if it is feasible, but shall only install service conductors to a meter enclosure or Secondary Service Tennination Box supplied by the Board and installed by the Customer. The Customer shall pay the cost of the Secondary Service Termination Box as specified in Rule 15. The Customer shall still retain ownership of such service conductors with maintenance provided by the Board at the Customer's expense. The Customer or developer shall be required to make a nonrefundable contribution in aid of construction toward the cost of such Board-installed services that, for standard installations, will be computed on the basis of the "Commercial Underground Service" charge as defined in Rule 15. Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. The commercial or industrial Customer may request the Board to maintain and repair, and the Board may do so in its discretion, the Customer's underground secondary service conductors ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 31 of 39 WATEaa"LIGHT Lansing Board of Services IM Water and Light Electric Rule and Regulation 11 between the building and the service pedestal, padmounted transformer or secondary attachment on the pole. The Customer shall be responsible to pay all bills rendered by the Board for the cost to maintain or repair the Customer's service conductors. Secondary service conductors shall be installed in accordance with any applicable local codes and the following Board specifications: A. The total ampacity of all secondary service cables connected to a transformer shall not exceed 1600 Amperes. The secondary service shall be in accordance with the National Electrical Code or other applicable local codes. Due to physical limitations of Board-owned transformers and secondary connectors, the maximum number of paralleled secondary cables for any single service dependent on service size shall be limited to: Single Service Size Cables Maximum No. of Parallel 200 Amperes 1 400 Amperes 2 600 Amperes 3 800 Amperes 3 1000 Amperes 4 1200 Amperes 4 1600 Amperes 4 The total number of cables connected to a single transformer connector shall not exceed four (4) cables. No single cable shall exceed 600 MCM in size whether copper or aluminum. The Board will make connection of all service and primary cables to Board-owned transformers. B. A single secondary service in excess of 1600 Amperes shall be installed using one of the two following methods. (1) A bus duct that is provided and installed by the Customer or developer. The Customer or developer must provide flexible secondary connectors with bus duct. The Board will make connection of the bus duct to the secondary of the transformer. (2) The Customer or developer shall purchase from the Board a multiple secondary termination cabinet. This cabinet is designed for use on single secondary services up to 3,000 Amperes and is provided for a fee as specified in Rule 15. The Customer or developer shall construct a concrete pad, supply and install their own --- -- -cable and provide terminal lug for their supplied-cables.-The Board will make - - - - - connection of the Customer's or developer's cable to the cabinet. 7. Conversion of Existing Overhead Electric Service At the request of a Customer, the Board will, if feasible, convert an existing overhead electric service to an underground electric service in accordance with Rule 10.3. 8. Electric Service Relocations and Removals At the request of a Customer, or as required due to a conflict, or to meet Board Standards, the Board will relocate or remove its electric service Facilities in accordance with Rule 10.4. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 32 of 39 WATE�HT Lansing Board of Services IM Water and Light Electric Rule and Regulation 11 9. Second Service A. The Board will not construct at its own expense a second electric service to any facility, new or existing, that can be adequately served with a single source as determined by the Board. Except that a Second Service shall be required for Customers served from the Board's underground lead cable system and may require a nonrefundable contribution in aid of construction as determined by Rule 10.I.D. B. The Customer may have the additional service installed by making a nonrefundable contribution in aid of construction to the Board, in advance, to cover the entire cost of providing a Second Service. C. In the case of a request for a Second Service, the Board will endeavor, but does not guarantee,to maintain at all times two separate services to the Customer's facilities ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 33 of'9 WATER Lansing Board of Motors sm Water and Light Electric Rule and Regulation 12 Motors Customers shall be responsible to protect a motor that cannot have its rotation safely reversed or that would be damaged by phase or voltage failure hl all phases by phase reversal and phase failure relays and/or low voltage relays. These protective devices should be wired to automatically discomZect and prevent restarting of motors until the problem has been corrected and service restored to normal. Conventional single phase motors may be connected to operate at 120 or 240 Volts subject to the following limitations: Maximum Allowable Locked- Nominal Motor Size Permissible Operating Voltage Rotor Current V:z hp or less 120 50 Amperes '/2 hp to 3 hp 240 105 Amperes Over 3 hp 240 To be connected only with written permission of the Board All single phase motors should be connected by the Customer to operate at 240 Volts whenever practical to minimize voltage drop in the Customer's wiring and supply system. The Board may restrict both the individual and combined horsepower and locked rotor current of three phase motors installed in a Customer's facility. The Board may require the Customer to install reduced voltage starters, starting interlock systems, variable frequency drives, or other devices to reduce the locked rotor demands on the Board's electric distribution system. If the Board, in its sole discretion, determines that a larger sized transformer than what would normally be installed is required to supply the locked rotor currents,the Customer shall bear the added cost. Customers planning the use of three phase motors should consult the System Integrity & Customer Projects Department of the Board for characteristics, adequacy and availability of the service. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 34 of 39 WATER R- Lansing Board of Use of Board Equipment Im Water and Light Electric Rule and Regulation 13 Use of Board Equipment 1. General The Board's wires, poles and apparatus, together with any intercormections thereof, are the exclusive property of the Board, and the connection of a Customer's Premises thereto does not entitle the Customer to any use thereof, except as permitted by the Board and as necessary for the delivery of the Board's service to the Customer. The use of any part of the Board's distribution or Transmission System without prior Board approval is expressly prohibited. 2. Authorized Attachments The Board may enter into a Pole Attaclunent Agreement providing joint use of certain of its wood poles for the purposes of providing telephone, CATV or other telecommunications services. The use of any pole by anyone, without first having entered into a written agreement with the Board is prohibited. The Board may also issue revocable permits to any person(s) or organization(s), seeking to attach any wire, cable, facility or apparatus for the transmission of telecommunications. Upon application for permit,the applicant shall pay a nonrefundable application fee as stated in Rule 15. Application shall be made to the System Integrity& Customer Projects Department of the Board. Any reconstruction work necessary to accommodate the facilities of the applicant shall be done by the Board at the expense of the applicant. The annual pole rental fee shall be as stated in Rule 15. Poles found attached in the field without permission shall, at the Board's discretion, be removed in accordance with Rule 13.33 or be subject to a minimum of three years retroactive billing. The Board may exclude or limit certain facilities from its poles. Furthennore, any poles that, in the opinion of the Board, are necessary for its sole use will be excluded from any pole attachment permit, joint use or rental agreements. 3. Unauthorized Use and Removal A. The unauthorized attachment (including painting or marking) of any signs, banners, lines, cables, equipment or any other matter to the Board's poles is prohibited. Authorization may be granted by the Board's General Manager or his designated representative based on purposes permitted by Michigan State law and requirements of governmental authority for the health, safety and welfare of the general public. B. The Board may remove or cause to be removed without notice any unauthorized foreign matter from its poles at the expense of the Customer,the person(s) attaching the unauthorized matter or, in the event neither can be identified, the individual, firm or organization which appears to be the primary sponsor, user or beneficiary of the unauthorized matter. The Board will observe reasonable precaution to prevent any damage resulting from such removal, but will not be liable for any damage thereto. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 35 of 39 WATER Lansing Board of Parallel Power Sources Water and Light Electric Rule and Regulation 14 Parallel Power Sources 1. General In order to provide for the safety of the Board's personnel and others and to assure reliability of electric service to all Customers, these requirements are established for operation of Customer generation in parallel with utility distribution systems. These requirements include all Customer systems under 100 kW. Systems 100 kW and over will be handled by the Board on an individual basis. All units over 10 kW must be three phase units unless specifically exempted. These requirements apply to both existing and proposed installations. 2. Approvals The Customer shall submit for Board approval, detailed electrical diagrams and equipment nameplate data, including the interface device and control systems of the Customer's power source. The completed installation must meet all local, state and national codes and is subject to inspection and test by the Board and local code enforcement authorities before commencement of parallel operation and such installation may be periodically inspected by the Board as required. The Customer shall obtain approval from the Board prior to making any revisions to the Customer's generating unit, its control systems or the interface between the two power systems after the initial installation. 3. Control and Protection The Customer's control and protection system must be acceptable to the Board. The Customer's system shall provide for automatic separation from the Board's distribution system in the event of a short circuit or open circuit on the Board's distribution system. The Customer's control system shall also provide for automatic paralleling with the Board's system when conditions are proper for parallel operation. Manual paralleling is not permitted without prior approval of the Board, Overfrequency, underfrequency, over voltage and under voltage control may be required. The Customer shall be liable for damage or injury if any part of the Customer's protective scheme fails to function due to lack of proper maintenance or Customer negligence. The Customer is required to install a disconnecting device with a visible break suitable for use as a protective tag location so as to be accessible by Board personnel or its agents and in reasonable close proximity to the billing meter. This device shall accept a standard Board padlock and shall be locate on the outside of all buildings. In no case shall the Customer tamper with or attempt to bypass the disconnect switch when the Board has locked it in the open position. 4. Operation Should the parallel operation of the Customer's generating source cause interference or affect voltage, frequency or harmonic content of the Board's system or of another Customer's service, the Customer shall discontinue parallel operation until the condition has been corrected. The Customer will be charged for all costs associated with any alteration of the Board's equipment required for proper operation of the Customer's generating equipment in parallel with the Board's system. The Customer will also be liable for costs of future changes due to safety or adverse effects on the Board's and/or other Customer's systems. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 36 of39 WATER&� Lansing Board of Parallel Power Sources 9M Water and Light Electric Rule and Regulation 14 5. Termination If the Customer does not meet all of the above requirements, the Board may require termination of parallel operation. Failure to tenninate parallel operation when required shall be cause for the Board to interrupt electric service to the Customer. 6. Contract The Customer must sign a contract with the Board before commencing parallel operation. In signing the contract, the Customer shall, among other things, accept liability for any damages or injuries caused by the Customer's parallel operation. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 37 of 39 WATEwATE®HT Lansing Board of Schedule of Fees & Charges Im Water and Light Electric Rule and Regulation 15 Schedule of Fees& Charges ELECTRIC FEES and CHARGES Charge Description When Applied Charge Residential Underground When requested by Customer $3.50/ft Distribution Extension $7.00/ft for undeveloped lots Residential Underground Service When requested by Customer $4.50/ft Green space only, restoration not included. Installation $250 minimum requiring conduit,sidewalk crossing or other hindrances will be billed at time and material Cotrunercial Underground When requested by Customer $7.00/ft Distribution Extension Commercial Underground Service When requested by Customer $6.50/ft Up to 400A and green space only, restoration not $570 minimum included. Transformer kVA Capacity Commercial or Industrial underground services $10/kVA Current and Potential Transformer When requested by Customer, 600— 1000A $550 ea. Enclosure When requested by Customer,>1000A— 1200A $800 ea. When requested by Customer,>1200A—3000A $8,400 ea. Multiple secondary termination When requested by Customer, up to 3000A $8,000 ea. cabinet Secondary Service Termination Box BWL installed commercial services requested by $600 ea. customer with trough system up to 400 amp. Temporary service overhead Install&remove service drop, 100 ft max, does $300 ea. not exceed 400A Temporary service overhead Install&remove service drop, exceeds 100 ft, At cost 400A or not available Temporary underground When requested by Customer, $310 ea. (Normal) Connection&disconnection only April 1—December 14 Temporary underground When requested by Customer, $470 ea. (Winter) Connection&disconnection only December 15—March 31 Secondary Riser Pole Charge When requested by Customer Residential up to 200 A $360 ea. Commercial up to 400 A $530 ea. Site Inspection When applicable $75 ea. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 38 of 39 WATE A� Lansing Board of Schedule of Fees & Charges Water and Light Electric Rule and Regulation 15 ELECTRIC FEES and CHARGES Charge Description When Applied Charge Joint Use and Third Party,make ready At cost Pole Attachment fees Annual fee $11 per attachment $220 minimum Application deposit,credited to make ready costs $20 per pole $390 minimum Joint Trench charges To other utilities $2.10/ft if 3 joint users $2.70/ft if 2 joint users $4.10/ft if 1 joint user Winter charge may also apply. Reconnection fee Non-pay(Normal hours) 7:30am—7:00pm weekdays $25 Non-pay (Other than normal Holidays and other than normal hours $100 hours) Meter Tampering $100 Cut at Pole $100 Security Deposits—Residential Unacceptable Credit History—Normal credit risk $68 Deposits may be larger for higher than normal credit risk Security Deposits—Commercial& Unacceptable Credit History—Normal credit risk 1.5 times average Industrial Deposits may be larger for higher than normal monthly bill credit risk Rate 5 & 8 Meter Non-compliance For each month of non-compliance with meter $75/month Charge requirements Meter Calibration Charge When Customer requested meter calibration check $55 each is within plus or minus 2%accuracy Winter Construction Charge December 15—March 31 $6.40/ft In addition to normal charge Charges other than published Relocations,damages,etc. At Cost ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 39 of 39 A "FTAC H M E N T C WATER&LIGHT Lansing Board of Im Water and Light Rules and Regulations For Water Service ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 WATE R®' Lansing (Board of Table of Contents Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions................................ 4 .......................... Applicationfor Service...............................................................................................................................................6 ServiceConditions...................................................................................................................................................... 7 Characterof Service..................................................................................................................................................7 Descriptionof Service..............................................................................................................................................7 Availabilityof Service..............................................................................................................I...........................7 Agreements........................................................................................................................................................... 8 MaterialAvailability........................................................................................................................................I.... 8 Useof Service..............................................................................................................................................................9 General............................................................................... 9 Accessand Damages ................................................................................................................................................9 CustomerPiping and Equipment..............................................................................................................................9 WaterQuality and Disturbances............................................................................................................................. 10 ImproperUse and Tampering................................................................................................................................. 10 Metering ............................................... .................. 11 General..................... ..................................................................................... 11 Sizing/Installation/Ownership................................................................. ................................................ 11 EquipmentLocation................................................................................................................................................ 11 MultipleOccupancy Buildings............................................................................................................................... 11 Damagedor Frozen Meter...................................................................................................................................... 12 Applicationof Rates................................................................................................................................................. 13 General.................................................................................................................................................................... 13 Resale.............. ................................................................................................................... 13 Choiceof Rates....................................................................................................................................................... 13 Apartment Buildings and Multiple Dwelling Structures......................................................................................... 13 Billing.............. MinimumCharges.................................................................................................................................................. 14 Property Owner-Rental Agent Agreement for'Leave On'Service....................................................................... 14 Responsibilityfor Payment of Bills......................................................................................................................... 15 General.................... ..................................................................................... 15 EstimatedConsumption.......................................................................................................................................... 15 BillingErrors................................... ...................................................................................................................... 15 . Account Security Deposits................... .................... 15 Disputeand Hearing Procedure.............................................................................................................................. 17 Disputes .................................................................................................................................................................. 17 Hearings.................................................................................................................................................................. 17 WaterCustomer Choice Program........................................................................................................................... 19 General.................................................................................................................................................................... 19 Contractor Qualification and Approval................................................................................................................... 19 ResidentialServices.........................................................:...................................................................................... 19 Deposit for On-Site Water Mains and Large Services............................................................................................ 19 Permits.................................................................................................................................................................... 19 DistributionSystem Extensions...............................................................................................................................20 General....................................................................................................................................................................20 Request for Distribution System Extension........................................................................................................20 Ownership...........................................................................................................................................................20 Availability of Distribution System Extension...................................................................................................20 Contribution hi Aid of Construction for System Extensions..............................................................................20 Installation of Distribution System Extension....................................................................................................21 Adequate Pressure and Flow Capacity..................... ........................21 ................................................................... ADOPTED: 7/22/03 EFFECTIVE: 8/l/03 Page 2 of 32 WATE— R—T Lansing Board of Table of Contents Water and Light Permits................................................................................................................................................................21 StakingRequirements.........................................................................................................................................22 FireHydrants......................................................................................................................................................22 Oversizing of Distribution System Extension.....................................................................................................22 Economic Development Considerations.............................................................................................................22 Easements...........................................................................................................................................................22 Non-Standard Equipment...................................................................................................................................23 Non-Standard Construction................................................................................................................................23 OtherFacilities....................................................................................................................................................23 Construction Date of Distribution System Extension.........................................................................................23 Water Facility Relocations and Removals..............................................................................................................23 Services......................... ....................................................24 ......................................................................................... General....................................................................................................................................................................24 TemporaryWater Service.......................................................................................................................................24 DomesticWater Service.........................................................................................................................................24 General................................................................................................................................................................24 Customer Connections to Board Facilities..........................................................................................................25 Charges...............................................................................................................................................................25 FireService.............................................................................................................................................................25 General................................................................................................................................................................25 Charges...............................................................................................................................................................26 Lawn Sprinkler(Irrigation) Service........................................................................................................................26 Water Facility Relocations and Removals..............................................................................................................26 BoosterPumps ..........................................................................................................................................................27 WaterStorage Facilities...........................................................................................................................................28 Cross—Connection.....................................................................................................................................................29 General....................................................................................................................................................................29 Installation of Backflow Prevention Devices..........................................................................................................29 Inspection and Maintenance of Backflow Prevention Devices...............................................................................29 Compliance.............................................................................................................................................................29 SevereHazard Locations........................................................................................................................................29 SecondarySupplies.................................................................................................................................................30 Scheduleof Fees &Charges.....................................................................................................................................31 ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 3 of 32 WATER&® . Lansing Board of Definitions INWater and Light Water Rule and Regulation 'I DEFINITIONS OF TERMS AND THEIR ABBREVIATIONS BOARD— When used in these Rules and Regulations, Board is an abbreviation meaning the Board of Water and Light. CUSTOMER— A purchaser of water service supplied by the Board or a governmental entity that authorizes the Board to provide water service. CUSTOMER PIPING —A piping system owned or controlled by the Customer that conveys water from the Service Location throughout the Customer's Premises. CUSTOMER WATER SERVICE—Those pipes, valves and appurtenances owned and maintained by the Board installed between a Water Main and Customer Piping. CROSS—CONNECTION — A physical interconnection, arrangement or condition of the Customer's plumbing through which the potable water furnished by the Board's Water Distribution System could become contaminated if backflow takes place. DEMAND— The rate of water delivered at a given point. DWELLING UNIT — A dwelling unit shall be considered as a single room, suite or groups of rooms or suites which have individual cooking and kitchen sink facilities designed for or used exclusively for residential purposes. FACILITIES— A general term which includes pipes, fittings, valves, fire hydrants, associated structures and the like, used as a part of or in connection with a water installation. FIRE SERVICE — Those pipes, valves, backflow devices and appurtenances installed from the Water Main to the Customer's Premises for the sole purpose of providing water for fire fighting on the served Premises. ON-SITE WATER MAINS—Water Mains installed on private property that will be located in easements or public right-of-way and owned and maintained by the Board. PRIVATE FIRE HYDRANT — The hydrant and appurtenances installed on Water Mains on private property to provide water primarily for fire fighting purposes. PUBLIC FIRE HYDRANT — The hydrant and appurtenances installed on Water Mains within public right-of-way to provide water primarily for fire fighting purposes. PREMISES— A building and its grounds. RATE— The unit prices as established by the Board's rate-making body and the quantities to which they apply as specified in the Rate Schedule. RATE SCHEDULE — A filed statement of the water Rate and the terns and conditions governing its application as established by the Board's rate-making body. SERVICE LOCATION—The point at which the Board has agreed to provide water service to Customer Piping. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 4 of 32 WATER�&LIGHT Lansing Board of Definitions Im Water and Light Water Rule and Regulation 1 SERVICE STUBS — That portion of a Customer Water Service that extends from the Water Main to a typical distance of 5 feet inside the property line. TRENCH— A cut in the ground in which pipes, etc. are installed. WATER DISTRIBUTION SYSTEM—The system of Water Mains, pipes, fittings, valves,.fire hydrants and all equipment and appurtenances thereto, necessary to distribute water to Customer Water Services. WATER MAIN — A pipe owned and maintained by the Board installed in public right-of-way or easement that conveys water to a Customer Water Service or to a fire hydrant. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 5 of 32 WATER&L,GHT Lansing Board of Application for Service Water and Light Water Rule and Regulation 2 Application for Service I. General Copies of the Board's Rate Schedules for water service are open to public inspection at the Board's offices and are available on the Board's Internet Web site www.lbwl.com or upon request. Application for original, modified or added service shall be made at the office of the Board of Water and Light at 1232 Haco Drive,Lansing. Any Customer receiving or agreeing to receive water service from Board Facilities shall be deemed a Customer of the Board subject to its Rates and these Rules and Regulations and responsible for the service used whether such service is provided under a signed agreement or not. Water service will not be supplied to new or remodeled buildings until such installations comply with these Rules and Regulations. For water service requests that are greater than 2" in size, the Customer should contact the Board's System Integrity & Customer Projects Department to determine the characteristics of the water service available at the Premises, since adequate flow and/or pressure may not be available. The System Integrity & Customer Projects Department will inform the Customer of the Board's requirements, which must be fulfilled by the Customer, in order to receive water service. The Board may discontinue water service to any Customer for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. The Customer must pay a reconnection fee as stated in Rule 15 to cover the costs of restoring water service that has been discontinued for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 6 of 32 WATER&� Lansing Board of Service Conditions Im Water and Light Water Rule and Regulation 3 Service Conditions 1. Character of Service The Board produces and distributes potable water, approved by the Michigan Department of Environmental Quality(MDEQ), for public use throughout its service area and will endeavor, but does not guarantee, to furnish a continuous supply and to maintain water pressure within reasonable limits. The Board shall not be liable for interruptions in the service including without limitation, variations in the service characteristics, or for any loss or damage of any kind or character occasioned thereby, due to causes or conditions beyond the Board's reasonable control, and such causes or conditions shall be deemed to specifically include, but not be limited to, the following: acts or omissions of Customers or third parties; operation of safety devices except when such operation is caused by the negligence of the Board; absence of an alternate supply of service; failure, malfunction, breakage, necessary repairs or inspection of machinery, Facilities or equipment when the Board has carried on a program of maintenance consistent with the general standards prevailing in the industry; act of God; war; action of the elements; storm or flood; fire; riot; sabotage; labor dispute or disturbance, or the exercise of authority or regulation by governmental or military authorities. Notwithstanding any other provision of these rules,the Board may interrupt or limit water service to Customers without prior notice and in a manner that appears most equitable under the circumstances then prevailing or as necessary to protect the health, safety and welfare of its employees or Customers. The Board shall be under no liability with respect to any such interruption or limited supply. 2. Description of Service A. Availability of Service (1) Water service is provided to Customers in the City of Lansing and several surrounding governmental entities. Service to the surrounding governmental entities is by contractual agreement. (2) The Board, at its discretion, may provide service to individual Customers outside its service area with the approval of the local governmental entity. (3) Water service may be made available to Premises that has frontage on a public right- of-way. The Board, at its discretion, may install Water Mains and Customer Water Services in easements. (4) Water service is not available where the Board must bring the Customer Water Service across another parcel or lot without an easement in order to provide service. (5) In the case where there is more than one Water Main capable of providing service, the Board shall determine which Water Main will be used for service and the location of the Customer Water Service connection. (6) Water service is available in sizes one inch (1") and larger. The Board will evaluate service sizes two inches (2") and larger before installation to determine the adequacy of water supply and pressure. Inquiries regarding adequacy of water supply and pressure should be directed to the Board's System Integrity & Customer Projects Department. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 7 of 32 WATER®&'fir' Lansing Board of Service Conditions Water and Light Water Rule and Regulation 3 B. Agreements The Board shall require the Customer to enter into a written agreement that details the terms and conditions and price to be paid by the Customer prior to water service construction. In addition, the Board may negotiate written contractual arrangements as to the provision of necessary service Facilities, duration of service, amount of deposit and refunds thereon, minimum bills or other service conditions for Customers or prospective Customers whose load requirements exceed the capacity of the available distribution system in the area or whose load characteristics or special service needs require unusual investments by the Board in service Facilities or where there is not adequate assurance of the pennanent use of the service. No promises, agreements or representations of any agent or employee of the Board shall be of binding force upon the Board unless the same is within the authority of that individual and incorporated in the written agreement. C. Material Availability Subject to the restrictions contained in Rule 3.2.A, the Board will construct water distribution Facilities and extensions only in the event it is able to obtain or use the necessary materials, equipment and supplies. The Board may, in its discretion, allocate the use of such materials, equipment and supplies among the various classes of Customers and prospective Customers of the same class. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 8 of 32 WATE" a� Lansing Board of Use of Service Water and Light Water Rule and Regulation 4 Use of Service 1. General Potable water is supplied to a Customer for exclusive use on the Premises to which it is delivered by the Board. Service may not be shared with another, sold to another, or transmitted off the Premises without the written permission of the Board, except as noted in Rule 6. Use of water is only for the purposes authorized by the Board and is not to be extended to another building without authorization of the Board. No person except authorized Fire Department personnel, Director of Public Service, and such other people as determined by the Board shall operate and/or take water from fire hydrant, Fire Service, or any other unmetered connection. 2. Access and Damages The Customer shall provide and maintain appropriate access and working space around water Facilities in accordance with all applicable Board standards so as to permit ready and safe operation and maintenance of such Facilities. The Board's authorized personriel or agents of the Board shall have access to the Customer's Premises at all reasonable hours for all purposes necessary to conduct business, including without limitation: 1) install, inspect, read, repair, maintain,test or remove its meters 2) install, operate and maintain other Board equipment or Facilities, and 3) inspect Fire Service installations, Customer Piping, backflow devices and to detennine the connected water Demand. If the meters, metering equipment or other Board property are damaged or destroyed through the neglect of the Customer, the cost of necessary repairs or replacements shall be the responsibility of the Customer. If, for any reason beyond its control, the Board is unable to read a meter, operate, maintain or make inspection, including but not limited to, reasons such as Premises being locked, meter being inaccessible or unsafe conditions, then after due written notice to the Customer, the water service may be disconnected until such time as arrangements have been made to permit access for Board inspection and approval and the Customer has paid the appropriate reconnection fee as stated in Rule 15. 3. Customer Piping and Equipment The Board may deny or terminate service to any Customer whose water piping or equipment constitutes a hazard to the Board's employees, equipment or its service to others. However, the Board is not responsible to inspect the Customer's piping or equipment and shall not be held liable for any injury or damage resulting from the condition thereof. The Customer shall install and maintain the necessary facilities or devices to protect Customer owned equipment against service interruptions and other disturbances on the Board's system. The Customer shall install a valve on the outlet of the meter-set and shall maintain it in good repair. Alterations to the Customer Water Service or associated equipment are prohibited without approval of the Board. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 9 of 32 WATEwATE®aa� Lansing Board of Use of Service Water and Light Water Rule and Regulation 4 4. Water Quality and Disturbances The Customer shall operate equipment in a manner that does not cause surges, water hammer or other problems in the Water Distribution System or to other Customers. If the Board notifies the Customer of such a condition, the Customer shall discontinue operation of equipment causing such condition until a correction has been made. The Customer shall be responsible for the cost of installation, testing and maintenance of backflow prevention equipment necessary to prevent contamination of the Water Distribution System as required by the Board, 5. Improper Use and Tampering Any person that uses water without making proper application for water service shall be responsible for all charges for water service. The amount of such charges shall be determined by the Board either by meter readings or on the basis of calculated consumption for the time water was used. If water is being used by a Customer without proper application for service or water service connection, the Board may discontinue service without notice. In case of such discontinuance of service, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 15 The Board may discontinue service and seek criminal charges, if it is determined that the meter or piping on the Customer's Premises has been tampered with or altered in any manner to steal water. If the Board discontinues service for this reason, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 15, made appropriate restitution for stolen service and made provisions for metering and/or piping changes as may be required by the Board. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 10 of 32 WATER aa�T Lansing Board of Metering Im Water and Light Water Rule and Regulation 5 Metering 1. General All water sold to Customers shall be measured by commercially acceptable measuring devices owned and maintained by the Board except where it is impractical to meter, such as for fire fighting, temporary or special installation, in which cases the consumption may be calculated. 2. Sizing/Installation/Ownership The Board shall furnish, install, own and maintain all metering equipment and reserves the right to size such metering equipment. 3. Equipment Location A. The Customer shall provide, at no expense to the Board, a space/enclosure suitable to the Board for the installation of the necessary metering equipment. The Customer shall furnish the space and the provisions for mounting metering and service equipment to meet Board requirements. Inquiries regarding installation requirements should be directed to the Board's System Integrity& Customer Projects Department. B. Wherever possible, metering equipment should be located inside the building served and as near as practicable to the point where the Customer Water Service enters the building. C. The space provided must have adequate ventilation and sufficient heat to prevent freezing of the meter and associated piping. A clear overhead space of at least six feet (6') shall be provided. A floor drain of adequate capacity must be provided adjacent to the meter except where the Board has deemed it to be impractical to provide such drain. D. Where an approved location is not available inside the building, the meter shall be located in a meter manhole at or near the property line, and the cost thereof shall be the responsibility of the Customer. 4. Multiple Occupancy Buildings Where the building owner desires to meter each tenant's water separately, a meter manifold may be permitted when the following conditions are met. A. An adequately sized room is made available by the owner for housing the water meters. The meter room shall be of sufficient size for access and provided with a door which can be fitted with an approved lock box; and B. Access to the meter area is by way of a common-use space; and C. The building owner attaches a tag to the valve on the outlet side of the meter identifying the number and/or address of the unit served; and D. The building owner installs a valve on the outlet of each meter-set and E. The building owner installs a valve at the point where each water supply line enters the apartment or unit served; and F. Each meter serves only one apartment or unit, with no interconnecting piping between each apartment or unit. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 11 of 32 WATER Lansing Board of Metering RDWater and Light Water Rule and Regulation 5 S. Damaged or Frozen Meter The Customer shall be held liable for damage to the meter from acts of carelessness, negligence, or willful damage by owner or his tenants. The Board will repair any meter so damaged, and the cost shall be billed to the Customer. The Board may, after an occurrence of a frozen meter, charge the customer for the replacement of a frozen meter as provided in Rule 15. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 12 of 32 WATER R&LIGHT Lansing Board of Application of Rates Water and Light Water Rule and Regulation 6 Application of Rates 1. General: Water Rates are predicated upon the Board not being required to provide more than one Customer Water Service to a building or structure. The Board shall separately meter and separately bill service at different points or at different buildings or structures unless specifically provided for in the applicable Rate Schedule. 2. Resale: The owner or operator of an office building, apartment building, shopping mall, or similar structure may purchase water from the Board for resale to occupants on the condition that service to each occupant shall be metered separately and that the occupants may not be charged more for such service than the appropriate Rate of the Board available for similar service under like conditions. In order to qualify for resale to occupants, the owner or operator must state their intent to resell in the application for service. The renting of Premises with the cost of water service included in the rental as an incident of tenancy will not be considered a resale of such service. 3. Choice of Rates: In some cases, the Customer may be eligible to take service under any one of two or more Rates. Upon request, the Board will advise the Customer in the selection of the Rate that will provide the lowest cost of service, based on the best available information, but the responsibility for the selection of the Rate shall be the sole responsibility of the Customer. After the Customer has selected a Rate, the Customer may not change from that Rate to another Rate until at least twelve (12) months have elapsed. The Customer shall not evade this rule by temporarily terminating service. The Board may waive the provisions of this paragraph where it appears that a change of the Rate is necessary for penmanent rather than temporary or seasonal advantage. The intent of this rule is to prevent frequent changes from Rate to Rate. The Board shall not be responsible to refund the difference in charges under different Rates applicable to the same class of service, unless the Board provided an incorrect initial service turn- on Rate setting or unless the Customer makes a written request and has a permanent change in load. . profile. Any refund is subject to Board approval. 4. Apartment Buildings and Multiple Dwelling Structures: An apartment building or multiple dwelling structure served by one meter and containing four (4) or less Dwelling Units may elect to be billed on the appropriate Residential Service Rate. 5. Billing: Customers having more than one meter shall have consumption computed by individual meter in accordance with the current Rate Schedule, with the exception of separate meters connected to the Customer Water Service and installed solely for lawn sprinkling. Lawn sprinkling meters connected to the Customer Water Service are subject to the Lawn Sprinkling Water Service Rate. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 13 of 32 WATER a&LIGHT Lansing Board of Application of Rates goWater and Light Water Rule and Regulation 6 6. Minimum Charges: A minimum charge, as defined by the Rate in effect, shall be applied to all services and billed to the Customer. Where the Customer requests that a service be discontinued, the Board shall deactivate the service by any appropriate means, including without limitation, removing the meter and/or by disconnecting the service from the Board's Water Distribution System. 7. Property Owner-Rental Agent Agreement for"Leave On" Service: The BWL may waive application charges to maintain continuity of service at rental property locations provided: (1) the landlord agrees in writing to assume the responsibility for water service during the interim between tenants, and (2) the landlord is in compliance with all other rules and regulations of the Board. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 14 of 32 WATERBL- Lansing Board of Responsibility for Payment of Bills Water and Light Water Rule and Regulation 7 Responsibility for Payment of Bills 1. General Each Board Customer is responsible to pay all utility bills as rendered on or before the due date shown thereon. The Customer remains responsible for payment of the bills until the Customer orders service to be discontinued and the Board has had reasonable time to secure a final meter reading Bills are rendered on approximately a monthly basis. Bills are mailed to Customers approximately fifteen (15) days before the due date shown on the bill. The Customer shall pay the net amount if paid on or before the due date on the bill. Failure on the part of the Customer, through no fault of the Board, to receive the bill shall not entitle the Customer to pay the net amount after the due date of the bill. If a bill remains unpaid after issuing a five (5) day written shut-off notice, the Board shall have the right to discontinue service. In extenuating circumstances, a Customer will be afforded the opportunity to make payment arrangements. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not in dispute. 2. Estimated Consumption Readings may be estimated when conditions warrant. Until reconciled by an actual reading, bills rendered on estimated consumption have the same force and effect as bills rendered on actual meter readings. 3. Billing Errors When an error is found to exist in the billing rendered to a Customer, the Board will correct such error to recover or refund the difference between the original billing and the corrected billing. Corrected billings will not be rendered for periods in excess of three (3)years. Reftnds to Customers will normally be made promptly upon discovery of the error. Amounts due the Board from the Customer will be subject to normal collection policy and procedures. 4. Account Security Deposits The Board shall require an account security deposit from any new or existing Customer with an unacceptable credit history. The Board may apply different rules to new Customers signing up -for service in accordance with Rule 7A.C. The deposit is normally 1.5 times the average monthly bill (actual or estimated) as determined by the Board. If a deposit is required for new residential Customers, the Board shall determine the amount in accordance with Rule 15. To determine the deposit for new commercial and industrial Customers, the Board will estimate the average monthly bill and apply the 1.5 factor. The Board may waive deposits in special circumstances. The Board may also demand deposits larger than 1.5 times the average monthly bill if the Board determines that a Customer presents a higher than normal credit risk. The Board will refund deposits to all Customers who have taken service for 12 months and have an acceptable payment history. The Board will also refired deposits to Customers who have terminated service and paid all charges due. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 15 of 32 WATE'�a� Lansing Board of Responsibility for Payment of Bills Water and Light Water Rule and Regulation 7 A. A security deposit may be required in any of the following circumstances: (1) The Customer has deliberately misinformed or misrepresented facts to the Board. (2) The Customer has tampered with the meter during the last 12 months. (3) The Customer has had one or more payments canceled in the last 12 months due to: (1) non- sufficient funds returned check, (2) account closed returned check, (3) non-sufficient funds bank bill, (4) account closed bank bill, or (5) credit card reversal. (4) The Customer has received a final notice on any account within the last 12 months. (5) The Customer has received more than 3 second notices on any account during the last 12 months. (6) The Customer has a past due balance on any account that is greater than$50.00 for more than 31 days past due in the past 12 months. (7) The Customer has a suspended or bad debt account within the last 12 months. B. If the Customer is applying for service through an artificial legal entity such as a corporation, or limited partnership,then the Board may request a deposit or other security of payment. C. New Customers will not be required to submit a deposit, in any of the following situations: (1) The Customer has no previous service history with the Board. (2) The Customer has previously established an acceptable payment history with the Board on a similar account. (3) The Customer's bill is paid by the State of Michigan. (4) The Customer secures a guarantor with a similar account and an acceptable payment history. (5) The Customer provides an acceptable surety bond. (6) The Customer provides an acceptable credit reference letter from a similar utility company for a similar account. Account must have been in the Customer's name and maintained for a minimum of 12 consecutive months. (7) The Customer has established an acceptable credit rating with a credit-reporting agency. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 16 of 32 WATER Lansing Board of Dispute and Hearing Procedure ImWater and Light Water Rule and Regulation 8 Dispute and Hearing Procedure 1. Disputes In accordance with the Lansing City Charter, the Board is required to provide a fair and equitable dispute and hearing process for its Customers as follows: A. When any Customer disputes a bill or service and the Board is so advised, the date of the notice of dispute will be recorded. B. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not disputed. C. The disputed bill or service will be investigated promptly and completely. D. The Customer will be advised of the results of the investigation. E. An attempt will be made to resolve the dispute in a manner mutually satisfactory to both parties. F. The Board will provide the opportunity for each Customer to enter into a reasonable settlement agreement in order to mutually resolve the disputed claim or to satisfy any liability not in dispute. G. If a settlement cannot be reached between the Customer and the Board's Account Administrator, the Customer may choose to appear before the Board's Dispute Review Committee. The review will be scheduled within ten (10) days of the request or as mutually agreed to by both parties. H. If a settlement cannot be reached following examination by the Dispute Review Committee, the account will be referred to the Board's General Manager. I. If a settlement is not reached after review by the Board's General Manager,the Customer shall be afforded an opportunity for a hearing. J. The Customer shall be responsible for payment of all other bills or portions of bills as rendered which are not in dispute. 2. Hearings A. Any Customer who disputes the services provided or a billing for services furnished in accordance with the Board's filed Rates, Rules and Regulations or established policies or procedures may request a hearing. If a hearing requested is based on a disputed past due bill, the request must be made within ten (10) calendar days following the final outcome of the dispute process. Any request for a hearing may be made in writing and received by the Board's corporate office at 1232 Haco Drive,Lansing,Michigan, 48912. - - — — -- --B--On-receipt of a request-for--a hearing-theBoard-will-forward this--request to-an-independent— ----- - Hearing Officer. The Hearing Officer will arrange a time for the hearing and advise both the Customer and the Board of the date, time and location in writing. The hearing will be scheduled during normal business hours. Failure of the Customer or Board to attend the hearing without due cause or prior request for adjournment will constitute a waiver of right of that party to the hearing. C. The Board and the Customer shall: (1) Have the right to be represented by Counsel or other persons of their choice. (2) Have the right to present evidence,testimony and oral and written argument. (3) Have the right to cross-examine witnesses appearing on behalf of the other party. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 17 of 32 WATER 8� Lansing Board of Dispute and Hearing Procedure Water and Light Water Rule and Regulation 8 (4) Have the right to have the hearing recorded by a court reporter at the expense of the Customer. The Hearing Officer shall also have the right to have the hearing recorded by a court reporter. Recordings will be preserved at least six (6) months from the date of the hearing. All evidence relevant to the dispute will be received. D. For each hearing, the Hearing Officer shall compile a hearing record which will contain; (1) A concise statement in writing of the position of the Board in relation to the dispute. (2) A concise statement in writing of the position of the Customer in the dispute. (3) Copies of all evidence submitted by the parties. E. If a decision is reached during the hearing, the Hearing Officer shall state the decision to both parties. If the Hearing Officer does not reach a decision during the hearing, additional time will be allowed to reach a decision. When a decision has been reached, either at the hearing or later, the Hearing Officer will prepare a report which shall contain the following: (1) A concise summary of the evidence and argument presented by the parties. (2) The decision and a statement that the decision of the Hearing Officer was based solely on the evidence presented and reasons therefore. (3) Advise that the representatives of the Board and the Customer have a right to file an appeal with the Board of Commissioners. (4) A statement as to any settlement agreement. (5) A statement that the dispute determination is binding on both parties unless appealed to the Board of Commissioners within ten(10) days of the date of mailing of decision, and that any request for appeal must be in writing to the Corporate Secretary. F. The Hearing Officer shall file the written report with the Board of Commissioners and the Mayor of the City of Lansing. A copy of the report shall be sent to the Customer via certified mail. G. If the dispute is unresolved and the decision appealed, the Hearing Officer shall make recommendations to the Board of Commissioners on the dispute. The Secretary of the Board will arrange a time for the appeal and advise both the Customer and the Board of the date, time and location in writing. Failure of the Customer to appear at the time set for the appeal without due cause, or to request an alternate date,will constitute a waiver of right to appeal. H. The Board of Commissioners shall report its final action on any unresolved disputes together with the Hearing Officer's report and recommendations to the Mayor and the City Council of Lansing, Michigan, I. The Mayor may make recommendations to the Board of Commissioners on each unresolved dispute. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 18 of 32 WATE® Lansing Board of Water Customer Choice Program Im Water and Light Water Rule and Regulation 9 Water Customer Choice Program 1. General The Board will accept and permit Customer installation of Customer Water Service(s), except metering equipment, and On-Site Water Mains, provided the following conditions are met. (1) The Board has approved the Customer's contractor prior to construction. (2) The Customer has signed, and complied with, a Water Customer Choice agreement with the Board prior to construction. (3) The Customer has provided, and the Board has approved drawings, material lists and a flushing and disinfection plan. (4) The Customer has paid any and all past and current applicable fees and charges. (5) The installation of Customer Water Service(s) and/or On-Site Water Mains has been inspected and approved by the Board. (6) Customer has dedicated Customer Water Service(s) and/or On-Site Water Mains to the Board. Inquiries regarding the Water Customer Choice Program should be directed to the Board's System Integrity&Customer Projects Department. 2. Contractor Qualification and Approval Contractors desiring to become qualified and approved to install On-Site Water Mains and Customer Water Services should contact the Material Services Management Resource Center. A charge for the initial Permit Application and an Annual Contractor's Qualification Permit shall be assessed as stated in Rule 15. 3. Residential Services Customers installing residential water services shall be required to pay an "Inspection" charge for each inspection. 4. Deposit for On-Site Water Mains and Large Services A deposit shall be required for any Customer desiring to install On-Site Water Mains or Customer Water Services 2" and larger. The amount of such deposit shall be as stated in Rule 15. Upon project completion, the deposit shall be adjusted to reflect the actual Board cost with a final billing or refund made to the Customer. 5. Permits The Board will obtain the MDEQ Permit For Water System Construction. The Customer shall be required to obtain all other permits. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 19 of 32 WATE® Lansing Board of Distribution System Extensions IM Water and Light Water Rule and Regulation 10 Distribution System Extensions 1. General: A. Request for Distribution System Extension Rule 10 sets forth the conditions under which the Board will extend its Water Distribution System. B. Ownership The Board shall provide, own, maintain and specify all of its distribution Facilities including location, except as otherwise expressly provided by agreement between the Board and the govermnental entity or Rule 9, "Water Customer Choice Program". No ownership rights to Board Facilities shall pass to any owner(s), developer(s), or Customer(s)by reason of any contribution required hereunder. C. Availability of Distribution System Extension The Board shall in its sole discretion detennine whether or not any particular Water Distribution System extension shall be made, regardless of its intended use, and establish any special conditions or requirements that may apply, including but not limited to entering into an agreement with a developer, property owner(s) or governmental entity. Water Distribution System extensions are generally available throughout the water service area. Water Distribution System extensions may also be available outside the water service area to serve individual Customers. Water Distribution System extensions outside the service area shall be installed at the Board's discretion, and only with the approval of the local governing entity. D. Contribution In Aid of Construction for System Extensions The owner(s), developer(s), governmental entity(s) or Customer shall be required to make a contribution in aid of construction to the Board to cover the cost of the Water Distribution System extension except as provided otherwise by agreement between the Board and the governmental entity or in Rule 9_"Water Customer Choice Program". The contribution in aid of construction to the Board for Water Distribution System extensions shall, at the Board's option, be of the following: (1) At cost—The Customer will provide a deposit based on the Board's estimated cost to construct the Water Distribution System extension. A reconciliation between the deposit and actual cost will be made upon project conclusion. (2) Not-to-exceed — The Customer will provide a deposit based on the Board's estimated cost to construct the Water Distribution System extension. If the actual cost to construct the Water Distribution System extension is less than the deposit, the Board will refund the difference upon project conclusion. (3) Firm Price—The Customer will provide a one-time payment based on the Board's estimated cost to construct the system extension. No reconciliation or refiind will be made upon project conclusion. The owner(s), developer(s), governmental entity(s) or Customer may be responsible for additional costs as required by this Rule 10.1. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 20 of 32 WATE'-� Lansing Board of Distribution System Extensions Water and Light Water Rule and Regulation 10 E. Installation of Distribution System Extension All Water Distribution System extensions shall be installed by the Board or its agent except as provided in Rule 9 "Water Customer Choice Program". Water Distribution System extensions shall be installed in public right-of-way except in certain cases where, at the Board's discretion, they may be installed in dedicated recordable easements on private property provided at no cost to the Board. Water Distribution System extensions shall traverse the total frontage of all property served and all streets within a new subdivision. The Board, in its sole discretion, may exempt side-lot streets where'a Water Main is not required either to provide service or to provide proper system flow and pressure. Service Stubs shall be installed in conjunction with the Water Distribution System extension except in certain cases as determined by the Board. The Customer shall provide the Board a final preliminary approved site plan for Board review and approval. Installation of a Water Distribution System extension will be initiated provided: (1) The owner, developer, governmental entity, or Customer has entered into a written agreement with the Board for the construction of the Water Distribution System extension. (2) The owner, developer, govenunental entity, or Customer has paid the cost of the Water Distribution System extension and any required system reinforcement in a manner as determined by the Board or has fulfilled the commitments as otherwise provided by agreement between the Board and the governmental entity. (3) Where applicable, the owner, developer, or Customer has recorded the plat or final preliminary approval has been received, monuments or markers are in place, lot lines staked, servers installed, streets at finished grade (before gravel and curb and gutter installation), sidewalk grading completed, and the ground in workable condition. (4) Construction during the winter season will only occur at the Board's discretion. F. Adequate Pressure and Flow Capacity The Board shall not make Water Distribution System extensions unless adequate pressure and flow capacity is available at the location of the Water Distribution System extensions as determined by the Board. Where a Water Distribution System reinforcement is required to provide adequate pressure and flow capacity at the location of the Water Distribution System extension, the Customer, governmental entity or other benefiting parties shall bear the cost of such Water Distribution System reinforcement. G. Permits All permits will be obtained by the Board or its agent, except as provided in Rule 9 "Water Customer Choice Program", before construction is initiated. ADOPTED: 7/22/03 Page 21 of'2 EFFECTIVE: 8/1/03 WATER'GHHT Lansing Board of Distribution System Extensions Water and Light Water Rule and Regulation 10 II. Staking Requirements The Customer shall provide all staking as required by the Board for installation of the Water Distribution System extension. Inquires regarding staking requirements should be directed to the Board's System Integrity&Customer Projects Department. L Fire Hydrants Water Distribution System extensions shall include fire hydrant coverage as determined by the Board or govermnental entity. J. Oversizing of Distribution System Extension To meet the needs of existing and future Customers within the governmental area(s), the Board may choose to install a larger size Water Main than that needed for the Water Distribution System extension. In such cases, the cost of oversizing shall be borne by the benefiting governmental entity(s) or as provided for in the agreements between the Board and the governmental entity(s). Where the Board has determined that oversizing of a Water Main is needed for its own purposes,the Board shall be responsible for the cost of such oversizing. K. Economic Development Considerations Where the Board determines that the Water Distribution System extension will promote development that provides substantial and sustainable economic benefits to its Customers or the Lansing region, the Board will consider an offset to its fees and charges and/or an economic incentive subject to its availability. Where a Customer has obtained an approved Lansing Brownfield Plan and entered into a Brownfield Reimbursement Agreement with the Lansing Brownfield Redevelopment Authority (LBRA), The Board, subject to agreement with the LBRA, may seek reimbursement for its Water System Connection Fee (Rate 3 of the Board's Rate Schedule) directly from the LBRA. In the event the Board is not reimbursed for its Water System Connection Fee from the LBRA, the Customer shall be required to pay the remaining amount due. L. Easements Where the Board has agreed to construct the Water Distribution System extension in an easement and prior to such construction, the owner(s), developer(s) or Customer(s) shall be required to famish at no expense to the Board, recordable easements in a form satisfactory to the Board. The easement shall grant right-of-ways suitable for the ingress, egress and the installation and maintenance of the Water Distribution System extension including any Water Distribution System equipment as designed by the Board for present and future service. In the event the required easements are not provided by the owner(s), developer(s) or Customer(s) for such extension, the Board may elect to construct all or any part thereof along public highways or other private property. In such event,the Board may require the owner(s), developers) or Customer(s) to pay the added construction expense occasioned by the use of such highways or other private property, plus any expense encountered in acquiring permits and easements on other private property when necessary to provide service to the owner(s), developer(s) or Customer(s). ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 22 of 32 WATE LIGHT Lansing Board of Distribution System Extensions go Water and Light Water Rule and Regulation 10 M. Non-Standard Equipment Where the Customer requests that the Board utilize equipment which differs from its normal specifications, purchased or installed, the Board may elect to provide such non- standard equipment with the Customer paying any additional cost. N. Non-Standard Construction Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or vet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. O. Other Facilities It will be the responsibility of the owner(s), developer(s) or Customer(s) to identify and provide locations of any existing privately owned underground facilities such as lawn sprinkler systems, field drainage systems, septic tanks, Customer owned electric lines, etc. If privately owned facilities are not properly located, the Board does not assume responsibility for any damage to these facilities. P. Construction Date of Distribution System Extension The Board will, based on availability of work crews and material, and subject to approvals of the appropriate regulatory agencies, utilize best efforts in constructing the Water Distribution System extension to meet a mutually agreed upon date or as required by agreement between the Board and the governmental entity. 2. Water Facility Relocations and Removals: (1) At the request of a Customer or developer, or as required due to a conflict, or to meet Board Standards,the Board will relocate or remove its water facilities provided: A. The relocation or removal is feasible and meets Board Standards. B. The Customer or developer obtains approval from all Customers impacted by the proposed relocation. C. The relocation or removal does not degrade water reliability or quality. D. All governmental approvals,permits and easements are obtained Prior to any relocation or removal of water Facilities,the Customer or developer shall be required to make a nonrefundable contribution in aid of construction. The aid in contribution of construction shall reimburse the Board for all relocation and removal costs including material, labor, the cost of breaking and repairing streets, walks, parking lots, driveways, etc., repairing lawns, replacing shrubs,flowers, etc., and any right-of-way costs as per this Rule 10,plus the cost of any necessary modifications to the Board's Water Distribution System affected by the relocation or removal, less the salvage value of any portion of the water Facilities removed. (2) If, at any time subsequent to completion of the Water Distribution System extension, it is found that Water Mains or related Facilities are not at the correct location or at the proper elevation due to changes beyond the control of the Board,the Customer or developer shall reimburse the Board to relocate Water Mains or related Facilities to the correct location or at the proper elevation. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 23 of 32 WATER&LIGH Lansing Board of Services Im Water and Light Water Rule and Regulation 11 Services 1. General: The Customer Water Service shall be furnished, installed, owned and maintained by the Board except as otherwise provided in Rule 9 "Water Customer Choice Program". In the course of maintaining or repairing a Customer Water Service, the Board shall bear no responsibility for damage incurred or restoration to areas where the Customer Water Service passes under any area not readily accessible. The Customer shall be responsible for additional repair costs due to these encumbered services. The Service Location shall be specified by the Board and shall be located so that the Board's service Facilities meet or exceed all clearance requirements and applicable local codes. Should it become necessary for any cause beyond the Board's control to change the Service Location, the entire cost of any changes in the Customer's service shall be the responsibility of the Customer. Should it become necessary for the Board to reinforce or upgrade the Water Distribution System to accommodate the requested service, a nonrefundable contribution in aid of construction shall be required as determined by Rule 10.1.D. 2. Temporary Water Service Temporary water service is available to contractors and others for construction activities, sewer flushing, bulk tanker fill, pool fills, etc. The charge for such temporary water services shall be as specified in Rule 15. 3. Domestic Water Service: A. General Water service other than that used for irrigation and fire-fighting purposes is considered domestic service. It shall be the Customer's responsibility to determine the correct pipe size for the Customer Water Service prior to making application. Plans shall be submitted to the Board's System Integrity & Customer Projects Department for services larger than two inches (2")or unusual connections. Customer Water Services shall be installed from the Water Main to the Customer's building in the most direct manner. The pipe comprising the connection shall cross only that legally described property upon which the building to be serviced is located. It is the intent of the Board that all underground water pipes be installed and maintained by the Board. However, where unusual or special circumstances exist or as allowed by Rule 9 "Water Customer Choice Program", the Customer may request approval to install underground water pipes. Applicants shall submit plans and specifications to the Board's System Integrity & Customer Projects Department for approval prior to installation. No person other than an authorized employee or agent of the Board shall open or close the outside valve (curb stop) on the Customer Water Service. No person except an authorized Board employee, agent of the Board or as allowed by Rule 9 "Water Customer Choice Program" shall tap, revamp or cormect to a Water Main or any of the pipes comprising the Customer Water Service. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 24 of 32 WATER&� Lansing Board of Services go Water and Light Water Rule and Regulation 11 B. Customer Connections to Board Facilities It shall be the Customer's responsibility to connect his plumbing to the Customer Water Service or meter-set installed by the Board. All work shall be in full compliance with all applicable plumbing codes. Where the water meter-set is installed inside, the Customer shall connect by first installing a valve at the outlet of the meter-set. Where it is required that the meter-set be installed outside in a meter pit, the Customer shall connect at the outlet of the shut-off valve installed by the Board. No connection to the Customer Water Service shall be allowed except at the outlet side of the meter-set. C. Charges For standard installations, the Customer shall pay a "Water Service" charge for the cost of the Customer Water Service installation in accordance with Rule 15 in a manner as determined by the Board. Where a water service connection is made from a Water Main subject to a "Front Footage Recovery" charge, such charge shall be as stated in Rule 15. All new Customer Water Service connections made to Water Mains shall be subject to a System Connection Fee in accordance with Rate 3 of the Board's Water Rate Schedules and any applicable charges contained in agreements between the Board and the governmental entity. Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. Where it is necessary for installation of a Customer Water Service to be scheduled during the "Winter Construction Period" as defined in Rule 15, the Customer may be required to pay a "Winter Construction Charge" as established therein. The Customer shall be responsible for additional repair costs due to encumbered Customer Water Services or damage as a result of negligence, willful damage or carelessness by the Customer, owner or tenants. 4. Fire Service: A. General The Board will provide water service for the sole purpose of providing direct fire protection. This service may include but is not limited to: (1) Public Fire Hydrants (2) Private Fire Hydrants (Board owned hydrants on private property) (3) Connection to fire sprinkler systems The Board owns and maintains all hydrants and all Fire Services up to the point of entry to the Customer's building. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 25 of 32 WATER'a!r Lansing Board of Services soWater and Light Water Rule and Regulation I I An approved backflow prevention device shall be installed on the Fire Service and detector check by-pass line. The backflow devices shall be installed, owned, tested and maintained by the Customer. Test results shall be sent to the Board's System Integrity & Customer Projects Department. A detector check by-pass meter shall be installed, owned and maintained by the Board to monitor water consumption through the Fire Service. Water used for fire fighting is paid through the monthly Fire Service charge and is not metered. The Customer shall contact the Board's System Integrity & Customer Projects Department for fire system testing. In addition to the monthly Fire Service charge, the Customer shall be billed for excessive use of water for fire system testing and any water used from the Fire Service for non-fire fighting purposes. The Board reserves the right to inspect Fire Service installations. Fire Services are also subject to Rule 11.3.A. B. Charges The Board shall assess a"Fire Hydrant" charge as stated in Rule 15 prior to the installation of any individual fire hydrant. The Customer shall pay the Fire Service installation cost prior to construction. The Customer shall be responsible for additional repair costs due to encumbered Fire Services or damage as a result of negligence, willful damage or carelessness by the Customer, owner or tenants. 5. Lawn Sprinlder(Irrigation) Service: Where a Customer requests that a separate meter be installed in parallel to an existing meter or that a separate meter be installed in conjunction with a new service installation for water use that does not enter the wastewater system and is permitted by the local governmental entity, the Customer shall pay the amount specified in Rule 1.5 prior to installation. Such separate meter shall be furnished and installed by the Board at an acceptable location. In no case shall this meter be larger than the service line size. The Customer shall install a valve immediately at the outlet of the meter-set. An approved backflow prevention device shall be installed on all lawn sprinkler/irrigation services. The backflow devices shall be installed, owned,tested and maintained by the Customer. 6. Water Facility Relocations and Removals: The Board will relocate or remove its water facilities in accordance with Rule 10.2. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 26 of 32 WATER Lansing Board of Booster Pumps Water and Light Water Rule and Regulation 12 Booster Pumps Where the Customer uses a booster pump to increase pressure to the Customer's internal plumbing, the pump shall be of such capacity to maintain the suction side of the pump at or above 35 psi. Where a jockey pump is used to maintain pressure on fire sprinkler systems or other umnetered Fire Service,the jockey pump must take suction from a metered Customer Water Service. The Customer shall suitably pipe, valve and protect all booster pumps such that the boosted pressure will not cause backflow into the Board's Water Distribution System. All booster pumps having a capacity that could develop velocities in excess of 10 feet per second in the Customer Water Service shall have modulating valves installed on the discharge so that start-up or shut-down pressure surges will not be generated back into the Board's Water Distribution System. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 27 of 32 WATER RB—T Lansing Board of Water Storage Facilities IMWater and Light Water Rule and Regulation 13 Water Storage Facilities Where the Customer desires to maintain a stored water facility of any type (elevated storage tank, ground storage tank, etc.) that is directly connected to the Board's Water Distribution System, the storage vessel must be approved -by the Board and any other agency or regulatory body with jurisdiction over the facility. Applicants shall submit plans and specifications to the Board's System Integrity& Customer Projects Department for approval prior to installation. The Customer must use a metered Customer Water Service for water used to fill, flush, and/or overflow such storage tanks, including those tanks used for fire protection purposes. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 28 of 32 WATE- Lansing Board of Cross Connection Water and Light Water Rule and Regulation 14 Cross—Connection 1. General A Customer shall not create or allow any actual or potential physical connection between a potable water line and a non-potable fluid, such that it is possible for the non-potable fluid to enter the potable water system. Potable water is provided to the Customer subject to the Board's Cross Connection Control Program which is available by contacting the Board's offices at 1232 Haco Drive, Lansing or on the Board's Internet Web site at www.lbwl.com. 2. Installation of Backflow Prevention Devices The Customer will be required to install a backflow prevention device on a Customer Water Service to assure containment when the Board determines that an unprotected Cross-Connection exits. The backflow prevention device shall be purchased, installed, tested and maintained by the Customer. The Customer must obtain the Board's approval of the type and manufacturer of the device. The Customer shall install the device at the termination of the Customer Water Service at the outlet side of the secondary valve and shall be installed in accordance with good design practice. Unprotected bypasses are not permitted. If, in the opinion of the Board the building use represents an extreme hazard, or that multiple hazards exist within the building, a backflow prevention device may be required at the Service Location, in addition to internal protection. 3. Inspection and Maintenance of Bacicflow Prevention Devices Backflow prevention devices must be installed in an area that will permit easy access for inspection, testing, and maintenance. The Board shall specify inspection and testing of all backflow prevention devices on a regular schedule. If a device is found to be defective, the Customer shall repair or replace the equipment as necessary within thirty days. The Customer shall then notify the Board of compliance. Test results shall be sent to the Board's System Integrity & Customer Projects Department. The Customer shall permit access for inspection by the Board of any backflow prevention devices and all internal plumbing with reasonable prior notice. 4. Compliance The Customer must immediately correct any potentially hazardous backflow condition found during an inspection of internal plumbing. Failure to take adequate corrective action may result in termination of water service. 5. Severe Hazard Locations Customer Water Services serving the following facilities must be protected against backflow. A safe air gap or reduced pressure backflow preventer is generally specified for the following uses: (1) Hospitals, clinics, sanitariums and biological research centers (2) Morgues,funeral homes and other places with autopsy facilities (3) Waste-treatment plants(both solid and liquid waste) ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 29 of 32 WATER Lansing Board of Cross Connection Water and Light Water Rule and Regulation 14 (4) Chemical plating plants (5) Industrial plants having complex plumbing systems not visually traceable in their entirety (6) Premises with an auxiliary water supply (7) Premises where inspection is restricted (8) Laboratories (9) Marinas (10) Food and beverage processing plants (11) Petroleum processing or storage plants (12) Radioactive material processing plants (13) Premises with reclaimed water systems (14) Facilities using treated water for process purposes A pressure-type vacuum breaker is recommended for the following uses: (1) Underground lawn sprinkler systems (2) Irrigation systems 6. Secondary Supplies A Customer's potable water plumbing cannot be connected to any well-water or surface water source, or to any water storage tank not approved by the Board. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 30 of 32 WATER Lansing Board of Schedule of Fees & Charges Water and Light Water Mule and Regulation 15 Schedule of Fees & Charges WATER FEES and CHARGES Charge Description When Applied Charge Water Main Installation Charges Based on design including fire protection coverage Firm price quote,not to exceed quote or at cost Water Main Front Footage Recovery '/z of the charge for either side of street if not previously collected. On 6" $46/ft On 8" $54/ft On 12" $77/ft On 16" $107/ft Fire Hydrant Installation Charge When requested by Customer Firm Price Quote Up to and incl. 1"Water Service Main-to-Curb Box Stub on previously installed $1,150 per stub plus water mains restoration cost Curb Box-to-Building(Trenched) $10.00/ft plus restoration cost $500 minimum Curb Box-to-Building(Bored) $23.00/ft plus restoration cost $800 minimum Meter Set-Standard $400 Meter Set-With Backflow Prevention $400 Water Services(BWL Installed) Meter Set-With Spilt Irrigation $520 (Connection Fee applicable) Retrofit of existing service to allow for spilt $590 irrigation service Charge for setting meter on a split service after $55 initial installation Greater than 1"Water Service Main-to-Curb Box Stub Firm price quote Curb Box-to-Building Firm price quote Meter Set Firm price quote Spilt Irrigation Service Firm price quote Winter Construction Charge Water Services,2"and under $12.50/Trench ft December 15—March 31 In addition to normal charge Frozen Meter Charge Upon occurrence For services: Up to 1" _$200 1 % _$400 2" _$700 plus additional labor& material cost if necessary Hydrant Flow Testing When requested by Customer $200 ca. Pool Fills When requested by Customer $200 ea. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 31 of 32 WATE"'aa��cHr' Lansing Board of Schedule of Fees & Charges Water and Light Water Rule and Regulation 15 WATER FEES and CHARGES Charge Description When Applied Charge Residential Service Inspection Each residential service inspection visit $55 ea. (Customer Choice Program) Permit Application Initial request by contractor seeking qualification $250 (Customer Choice Program) Annual Contractor's Qualification Annually $150 permit fee (Customer Choice Program) Engineering,Inspection and On-site mains and 2"or greater service size Deposit of$1,500 or 8%of Administration the estimated project cost (Customer Choice Program) whichever is greater. For deposits greater than $1,500, actual costs that are less than or exceeding deposit will be reimbursed or billed. Temporary Hydrant Usage for Within BWL service area for construction use construction,festivals and Permit Fee per project $150 governmental special use by special (A) 1"RPZ backflow device plus $380 if required. permit. Commodity fee $30/month or portion thereof (B) 2"RPZ backflow device plus $720 if required Commodity fee $60/month or portion thereof (C) Other approved backflow prevention Cost based on estimated usage device $250 deposit Non-compliance fee $40 Hydrant wrench $500 1"occurrence Water Theft Penalty Fee 1" 1-3 days=$100 Festivals,non-profit or otherwise—includes rental 4-7 days=$300 of RPZ 8+days=$500 2" 1-3 days=$250 4-7 days=$500 8+days=$750 Metered use for approved governmental special use Setup and removal cost plus —includes rental of RPZ Residential Water Service Rate 1 commodity charge. Security Deposits—Residential Unacceptable Credit History—Normal credit risk Water&City Sewer Deposits may be larger for higher than normal $71 Water Only credit risk $27 Security Deposits—Commercial& Unacceptable Credit History—Normal credit risk 1.5 times average monthly bill Industrial Deposits may be larger for higher than normal credit risk Reconnection fee Non-pay(Normal hours) 7:30am—7:00pm weekdays $25 Non-pay(Other than normal hours) Holidays and other than normal hours $100 Meter Tampering $100 Charges other than those published Relocations,damages,etc. At cost ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 32 of 32 �. A1-TACHMENT D WATER&LIGHT Lansing Board of Water and Light Rules and Regulations For Steam Service ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 WATE A'a® Lansing Board of Table of Contents sm Water And Light TABLE OF CONTENTS PAGE NUMBER Definitions....................................................................................................................................................................4 Applicationfor Service............................................................................................................................................... 5 ServiceConditions...................................................................................................................................................... 6 Characterof Service..................................................................................................................................................6 Descriptionof Service..............................................................................................................................................6 Availabilityof Service..........................................................................................................................................6 Agreements................................................................................................... .................7 ....................................... MaterialAvailability.............................................................................................................................................7 Useof Service.............................................................................................................................................................. 8 General...................................................................................................................................................................... 8 Accessand Damages ................................................................................................................................................ 8 CustomerPiping and Equipment.............................................................................................................................. 8 SteamQuality and Disturbances............................................................................................................................... 8 ImproperUse and Tampering................................................................................................................................... 9 Metering ..................................................................................................... General.................................................................................................................................................................... 10 Sizing/Installation/Ownership ...................................................................................... 10 EquipmentLocation................................................................................................................................................ 10 DamagedMeter...................................................................................................................................................... 10 Applicationof Rates ................................................................................................................................................. 11 General............................ .................. 11 .................................................................................................................... . Resale...................................................................................................................................................................... 11 Choiceof Rates....................................................................................................................................................... 11 BillinQ ..................................................................................................................... 11 MinimumCharges.................................................................................................................................................. 11 Property Owner-Rental Agent Agreement for'Leave On'Service....................................................................... 12 Responsibilityfor Payment of Bills......................................................................................................................... 13 General.................................................................................................................................................................... 13 EstimatedConsumption.......................................................................................................................................... 13 BillingErrors.......................................................................................................................................................... 13 AccountSecurity Deposits...................................................................................................................................... 13 Disputeand Hearing Procedure.............................................................................................................................. 15 Disputes .................................................................. .......................................... 15 ...................................................... Hearings.................................................................................................................................................................. 15 Distribution System Extensions.............................. ......... 17 ........................................................................................ General.................................................................................................................................................................... 17 Request for Distribution System Extension........................................................................................................ 17 Ownership .............................................................................. 17 Availability of Distribution System Extension................................................................................................... 17 Installation of Distribution System Extension.................................................................................................... 17 Adequate Temperature,Pressure and Flow Capacity......................................................................................... 17 EconomicDevelopment Offsets......................................................................................................................... 18 Easements........................................................................................................................................................... 18 Non-Standard Equipment......................................................................................:............................................ 18 Non-Standard Construction................................................................................................................................ 18 OtherFacilities.................................................................................................................................................... 18 Construction Date of Distribution System Extension......................................................................................... 18 Steam Facility Relocations and Removals.............................................................................................................. 19 Services......................................................................................................................................................................20 General....................................................................................................................................................................20 ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 2 of27?7 WATE'- Lansing Board of Table of Contents Im Water and Light Steam Service............................................................................ ...........................20 .................................................. General................................................................................................................................................................20 Customer Connections to Board Facilities..........................................................................................................21 CustomerSteam Piping......................................................................................................................................21 Installation and Maintenance of Steam Services ................................................................................................22 Steam Facility Relocations and Removals..............................................................................................................22 Condensateand Master Trap..................................................................................................................................23 General....................................................................................................................................................................23 Condensate..............................................................................................................................................................23 MasterTrap........................................................................................................................................................... 23 Condensate(Surge)Tanks......................................................................................................................................24 By-pass Valve.........................................................................................................................................................24 SystemExtension &Service Deposit.......................................................................................................................25 General....................................................................................................................................................................25 Distribution System Extension and Customer Steam Service ................................................................................25 CustomerSteam Service Only................................................................................................................................ 26 Scheduleof Fees &Charges.....................................................................................................................................27 ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 3 of 2722-7 WATE` R&LGHT Lansing Board of Definitions ImWater and Light Steam Rule and Regulation I DEFINITIONS OF TERMS AND THEIR ABBREVIATIONS BOARD— When used in these Rules and Regulations, Board is an abbreviation meaning the Board of Water and Light. CUSTOMER—A purchaser of steam service supplied by the Board. CUSTOMER PIPING—A piping system owned or controlled by the Customer that conveys steam from the Service Location throughout the Customer's Premises. CUSTOMER STEAM SERVICE — Those pipes, valves and appurtenances installed between a Steam Main and Customer Piping. DEMAND— The rate of steam delivered at a given point. FACILITIES— A general term which includes pipes, fittings, valves, associated structures and the like, used as a part of or in connection with a steam installation. PREMISES— A building and its grounds. RATE— The unit prices as established by the Board's rate-making body and the quantities to which they apply as specified in the Rate Schedule. RATE SCHEDULE — A filed statement of the steam Rate and the terms and conditions governing its application as established by the Board's rate-making body. SERVICE LOCATION— The point at which the Board has agreed to provide steam service to Customer Piping. SERVICE VALVE—The valve installed by the Board at the Service Location in the building. STEAM DISTRIBUTION SYSTEM — The system of Steam Mains, pipes, fittings, valves and all equipment and appurtenances thereto, necessary to distribute steam to Customer Steam Service. STEAM MAIN —A pipe owned and maintained by the Board that conveys steam to a Customer Steam Service. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 4 of 2727 MATE- Lansing Board of Application for Service Water and Light Steam Rule and Regulation 2 Application for Service 1. General Copies of the Board's Rate Schedules for steam service are open to public inspection at the Board's offices and are available on the Board's Internet Web site ww,,v.lbwl.com or upon request. Application for original, modified or added service shall be made at the office of the Board of Water and Light at 1232 Haco Drive, Lansing. Any Customer receiving or agreeing to receive steam service from Board Facilities shall be deemed a Customer of the Board subject to its Rates and these Rules and Regulations and responsible for the service used whether such service is provided under a signed agreement or not. Steam service will not be supplied to new or remodeled buildings until such installations comply with these Rules and Regulations. The Customer should contact the Board's System Integrity & Customer Projects Department to determine the characteristics of the steam service available at the Premises. The System Integrity & Customer Projects Department will inform the Customer of the Board's requirements, which must be fulfilled by the Customer, in order to receive steam service. The Board may discontinue steam service to any Customer for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. The Customer must pay a reconnection fee as stated in Rule 13 to cover the costs of restoring steam service that has been discontinued for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. ADOPTED: 7/22/03 EFFF,CTTVF.• 9/1/0; Page 5 of 27?7 WATE_RsGHT Lansing Board of Service Conditions Water and Light Steam Rule and Regulation 3 Service Conditions 1. Character of Service The Board produces and distributes saturated steam for public use throughout its service area and will endeavor, but does not guarantee, to Rimish a continuous supply and to maintain steam temperature and pressure within reasonable limits. The Board shall not be liable for interruptions in the service including without limitation, variations in the service characteristics, or for any loss or damage of any kind or character occasioned thereby, due to causes or conditions beyond the Board's reasonable control, and such causes or conditions shall be deemed to specifically include, but not be limited to, the following: acts or omissions of Customers or third parties; operation of safety devices except when such operation is caused by the negligence of the Board; absence of an alternate supply of service; failure, malfunction, breakage, necessary repairs or inspection of machinery, Facilities or equipment when the Board has carried on a program of maintenance consistent with the general standards prevailing in the industry; act of God; war; action of the elements; storm or flood; fire; riot; sabotage; labor dispute or disturbance, or the exercise of authority or regulation by governmental or military authorities. Notwithstanding any other provision of these rules,the Board may interrupt or limit steam service to Customers without prior notice and in a manner that appears most equitable under the circumstances then prevailing or as necessary to protect the health, safety and welfare of its employees or Customers. The Board shall be under no liability with respect to any such interruption or limited supply. 2. Description of Service A. Availability of Service (1) Saturated steam service is available twelve(12)months a year to Customers in the City of Lansing except where the Board has determined it to be impractical to serve. (2) Low pressure steam service at pressures less than 15 pound per square inch (psig) is available where distribution mains are installed in a large portion of the downtown area. The pressure varies according to location, load conditions and ambient temperature,but generally is between 5 and 12 psig at building Service Valves. (3) Medium pressure steam service at pressures exceeding 15 psig is available in some portions of the service area. The pressure usually is 75 psig at building Service Valves but may vary from 25 psig to 125 psig according to location and load conditions. (4) High pressure steam service at pressures up to 275psig is available in some portions of the service area. (5) Steam service is not available where the Board must bring the Customer Steam Service across another parcel or lot in order to provide service. (6) In the case where there is more than one Steam Main capable of providing service, the Board shall determine which Steam Main will be used for service and the location of the Customer Steam Service connection. ADOPTED: 7/22/03 WATE- Lansing Board of Service Conditions go Water and Light Steam Rule and Regulation 3 B. Agreements The Board shall require the Customer to enter into a written agreement that details the terms and conditions and price to be paid by the Customer prior to steam service construction. In addition,the Board may negotiate written contractual arrangements as to the provision of necessary service Facilities, duration of service, amount of deposit and refunds thereon, minimum bills or other service conditions for Customers or prospective Customers whose load requirements exceed the capacity of the available distribution system in the area or whose load characteristics or special service needs require unusual investments by the Board in service Facilities or where there is not adequate assurance of the permanent use of the service. No promises, agreements or representations of any agent or employee of the Board shall be of binding force upon the Board unless the same is within the authority of that individual and incorporated in the written agreement. C. Material Availability Subject to the restrictions contained in Rule 3.2.A, the Board will construct steam distribution Facilities and extensions only in the event it is able to obtain or use the necessary materials, equipment and supplies. The Board may, in its discretion, allocate the use of such materials, equipment and supplies among the various classes of Customers and prospective Customers of the same class. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 7 of 27-2q WATER a� Lansing Board of Use of Service go Water and Light Steam Rule and Regulation 4 Use of Service 1. General Saturated steam is supplied to a Customer for exclusive use on the Premises to which it is delivered by the Board. Service may not be shared with another, sold to another, or transmitted off the Premises without the written permission of the Board, except as noted in Rule 6. Use of steam is only for the purposes authorized by the Board and is not to be extended to another building without authorization of the Board. 2. Access and Damages The Customer shall provide and maintain appropriate access and working space around steam Facilities in accordance with all applicable Board standards so as to permit ready and safe operation and maintenance of such Facilities. The Board's authorized personnel or agents of the Board shall have access to the Customer's Premises at all reasonable hours for all purposes necessary to conduct business, including without limitation: 1) install, inspect, read, repair, maintain, test or remove its meters 2) install, operate and maintain other Board equipment or Facilities, and 3) inspect service installations, Customer Piping, and to determine the connected steam Demand. If the meters, metering equipment or other Board property are damaged or destroyed through the neglect of the Customer, the cost of necessary repairs or replacements shall be the responsibility of the Customer. If, for any reason beyond its control,the Board is unable to read a meter, operate, maintain or make inspection, including but not limited to, reasons such as Premises being locked, meter being inaccessible or unsafe conditions, then after due written notice to the Customer, the steam service may be disconnected until such time as arrangements have been made to permit access for Board inspection and approval and the Customer has paid the appropriate reconnection fee as stated in Rule 13. 3. Customer Piping and Equipment The Board may deny or terminate service to any Customer whose Customer Piping or equipment constitutes a hazard to the Board's employees, equipment or its service to others. However, the Board is not responsible to inspect Customer Piping or equipment and shall not be held liable for any injury or damage resulting from the condition thereof. The Customer shall install and maintain the necessary facilities or devices to protect Customer owned equipment against service interruptions and other disturbances on the Board's system. Alterations-to-the-Customer-Steam-Ser-vise-or-assoc-i-ated-equipme-nt-ar-e-prohibit-ed-witliout approval of the Board. 4. Steam Quality and Disturbances The Customer shall operate equipment in a manner that does not cause surges, water hammer or other problems in the Steam Distribution System or to other Customers. If the Board notifies the Customer of such a condition, the Customer shall discontinue operation of equipment causing such condition until a correction has been made. ADOPTED: 7/22/03 F.FFFC'.TTVP- 52/7/n*i PaQP R nf972a WATER Lansing Board of Use of Service Water and Light Steam Rule and Regulation 4 5. Improper Use and Tampering Any person that uses steam without making proper application for steam service shall be responsible for all charges for steam service. The amount of such charges shall be determined by the Board either by meter readings or on the basis of calculated consumption for the time steam was used. If steam is being used by a Customer without proper application for service or steam service connection, the Board may discontinue service without notice. In case of such discontinuance of service, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 13 The Board may discontinue service and seek criminal charges, if it is determined that the meter or piping on the Customer's Premises has been tampered with or altered in any mamier to steal steam. If the Board discontinues service for this reason, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 13, made appropriate restitution for stolen service and made provisions for metering and/or piping changes as may be required by the Board. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 9 of 27-27 WATE--' Lansing Board of Metering Water and Light Steam Rule and Regulation 5 Metering L General All steam sold to Customers shall be measured by commercially acceptable measuring devices owned and maintained by the Board except where it is impractical to meter, such as for temporary or special installation, in which cases the consumption may be calculated. If for any reason all the steam used cannot be registered accurately as condensate, the unmetered portion shall be estimated by the Board on the basis of prior consumption or the operating characteristics of the building and equipment. 2. Sizing/Installation/Ownership A meter-set consisting of a gate valve, strainer, union, master trap and condensate meter shall be installed at the termination of the building's condensate piping system. The Customer shall furnish and install the gate valve, strainer, union and master trap according to the Board's specifications and standards. The Board shall Rimish the condensate meter for installation by the Customer. The Board shall own and maintain the gate valve, strainer, union, master trap and condensate meter. The Board may furnish more than one meter for installation by the Customer, depending upon the total capacity needed,the system arrangement, or the number of Customers in the building. 3. Equipment Location A. The Customer shall provide, at no expense to the Board, a space/enclosure suitable to the Board for the installation of the necessary metering equipment. The Customer shall furnish the space and the provisions for mounting metering and service equipment to meet Board requirements. Inquiries regarding installation requirements should be directed to the Board's System Integrity&Customer Projects Department. B. The Customer shall locate metering equipment and master trap inside the building served in a well ventilated area with ample space for meter reading and maintenance. C. The Customer shall not place the meter in a pit below floor level, a rest room or on a platform higher than thirty (30) inches above the floor unless Board approved steps and platform are installed. D. The Customer shall furnish a substantial, level, concrete, metal or wood support for the meter setting with enough space for the outlet piping and at least two (2) feet of unobstructed space directly above the meter. The elevation of the meter support shall not be less than eighteen (18) inches and not more than thirty (30) inches above the floor. 4. Damaged Meter The Customer shall be held liable for damage to the meter from acts of carelessness, negligence or willful damage by owner or his tenants. The Board will repair any meter so damaged, and the cost shall be billed to the Customer. ADOPTED: 7/22/03 F.FFFrTTVP- R/1/rl, 'D 10 nf'77.- WATE' A� Lansing Board of Application of Rates Water and Light Steam Rule and Regulation 6 Application of Rates 1. General: Steam Rates are predicated upon the Board not being required to provide not more than one Customer Steam Service to a building or structure. The Board shall separately meter and separately bill service at different points or at different buildings or structures unless specifically provided for in the applicable Rate Schedule. 2. Resale: The owner or operator of an office building, apartment building, shopping mall, or similar structure may purchase steam from the Board for resale to occupants on the condition that service to each occupant shall be metered separately and that the occupants may not be charged more for such service than the appropriate Rate of the Board available for similar service under like conditions. In order to qualify for resale to tenants, the owner or operator must state their intent to resell in the application for service. The renting of Premises with the cost of steam service included in the rental as an incident of tenancy will not be considered a resale of such service. 3. Choice of Rates: In some cases, the Customer may be eligible to take service under any one of two or more Rates. Upon request, the Board will advise the Customer in the selection of the Rate that will provide the lowest cost of service, based on the best available information, but the responsibility for the selection of the Rate shall be the sole responsibility of the Customer. After the Customer has selected a Rate, the Customer may not change from that Rate to another Rate until at least twelve (12) months have elapsed. The Customer shall not evade this rule by temporarily terminating service. The Board may waive the provisions of this paragraph where it appears that a change of the Rate is necessary for permanent rather than temporary or seasonal advantage. The intent of this rule is to prevent frequent changes from Rate to Rate. The Board shall not be responsible to refund the difference in charges under different Rates applicable to the same class of service, unless the Board provided an incorrect initial service turn- on Rate setting or unless the Customer makes a written request and has a permanent change in load profile. Any refund is subject to Board approval. 4. Billing: Customers having more than one meter shall have consumption computed by individual meter in accordance with the current Rate Schedule. 5. Minimum Charges: A minimum charge, as defined by the Rate in effect, shall be applied to all services and billed to the Customer. Where the Customer requests that a service be discontinued, the Board shall deactivate the service by any appropriate means, including without limitation, removing the meter and by disconnecting the service from the Board's Steam Distribution System. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 11 of 2727 WATE' R'-T Lansing Board of Application of Rates Water and Light Steam Rule and Regulation 6 6. Property Owner-Rental Agent Agreement for"Leave On"Service: The BWL may waive application charges to maintain continuity of service at rental property locations provided: (1)the landlord agrees in writing to assume the responsibility for steam service during the interim between tenants, and (2) the landlord is in compliance with all other rules and regulations of the Board. ADOPTED: 7/22/03 RRAR( PTA TU. 0/1 7n'7 T)___ 1) „r-^7)-7 WATER&�IGHT Lansing Board of Responsibility for Payment of Bills IM Water and Light Steam Rule and Regulation 7 Responsibility for Payment of Bills 1. General Each Board Customer is responsible to pay all utility bills as rendered on or before the due date shown thereon. The Customer remains responsible for payment of the bills until the Customer orders service to be discontinued and the Board has had reasonable time to secure a final meter reading. Bills are rendered on approximately a monthly basis. Bills are mailed to Customers approxi nately fifteen (15) days before the due date shown on the bill. The Customer shall pay the net amount if paid on or before the due date on the bill. Failure on the part of the Customer, through no fault of the Board, to receive the bill shall not entitle the Customer to pay the net amount after the due date of the bill. If a bill remains unpaid after issuing a five (5) day written shut-off notice, the Board shall have the right to discontinue service. Ili extenuating circumstances, a Customer will be afforded the opportunity to make payment arrangements. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not in dispute. 2. Estimated Consumption Readings may be estimated when conditions warrant. Until reconciled by an actual reading, bills rendered on estimated consumption have the same force and effect as bills rendered on actual meter readings. 3. Billing Errors When an error is found to exist in the billing rendered to a Customer, the Board will correct such error to recover or refund the difference between the original billing and the corrected billing. Corrected billings will not be rendered for periods in excess of three (3)years. Refunds to Customers will normally be made promptly upon discovery of the error. Amounts due the Board from the Customer will be subject to normal collection policy and procedures. 4. Account Security Deposits The Board shall require an account security deposit from any new or existing Customer with an unacceptable credit history. The Board may apply different rules to new Customers signing up for service in accordance with Rule 7.4.C. The deposit is normally 1.5 times the average monthly bill (actual or estimated) as determined by the Board. If a deposit is required for new residential Customers, the Board shall determine the amount in accordance with Rule 13. To determine the deposit for new commercial and industrial Customers, the Board will estimate the average monthly bill and apply the 1.5 factor. The Board may waive deposits in special circumstances. The Board may also demand deposits larger than 1.5 times the average monthly bill if the Board determines that a Customer presents a higher than normal credit risk. The Board will refund deposits to all Customers who have taken service for 12 months and have an acceptable payment history. The Board will also refund deposits to Customers who have terminated service and paid all charges due. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 13 of 272-7 WATE Lansing Board of Responsibility for Payment of Bills imWater and Light Stearn Rule and Regulation 7 A. A security deposit may be required in any of the following circumstances: (1) The Customer has deliberately misinformed or misrepresented facts to the Board. (2) The Customer has tampered with the meter during the last 12 months. (3) The Customer has had one or more payments canceled in the last 12 months due to: (1)non- sufficient funds returned check, (2) account closed returned check, (3) non-sufficient funds bank bill, (4) account closed bank bill, or(5) credit card reversal. (4) The Customer has received a final notice on any account within the last 12 months. (5) The Customer has received more than 3 second notices on any account during the last 12 months. (6) The Customer has a past due balance on any account that is greater than $50.00 for more than 31 days past due in the past 12 months. (7) The Customer has a suspended or bad debt account within the last 12 months. B. If the Customer is applying for service through an artificial legal entity such as a corporation, or limited partnership,then the Board may request a deposit or other security of payment. C. New Customers will not be required to submit a deposit, in any of the following situations: (1) The Customer has no previous service history with the Board. (2) The Customer has previously established an acceptable payment history with the Board on a similar account. (3) The Customer's bill is paid by the State of Michigan. (4) The Customer secures a guarantor with a similar account and an acceptable payment history. (5) The Customer provides an acceptable surety bond. (6) The Customer provides an acceptable credit reference letter from a similar utility company for a similar account. Account must have been in the Customer's name and maintained for a minimum of 12 consecutive months. (7) The Customer has established an acceptable credit rating with a credit-reporting agency. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 14 of27-2-7 WATER Lansing Board of Dispute and Hearing Procedure Im - Water and Light Steam Rule and Regulation 8 Dispute and Hearing Procedure 1. Disputes In accordance with the Lansing City Charter, the Board is required to provide a fair and equitable dispute and hearing process for its Customers as follows: A. When any Customer disputes a bill or service and the Board is so advised, the date of the notice of dispute will be recorded. B. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not disputed. C. The disputed bill or service will be investigated promptly and completely. D. The Customer will be advised of the results of the investigation. E. An attempt will be made to resolve the dispute in a manner mutually satisfactory to both parties. F. The Board will provide the opportunity for each Customer to enter into a reasonable settlement agreement in order to mutually resolve the disputed claim or to satisfy any liability not in dispute. G. If a settlement cannot be reached between the Customer and the Board's Account Administrator, the Customer may choose to appear before the Board's Dispute Review Committee. The review will be scheduled within ten(10) days of the request or as mutually agreed to by both parties. H. If a settlement cannot be reached following examination by the Dispute Review Committee, the account will be referred to the Board's General Manager. I. If a settlement is not reached after review by the Board's General Manager,the Customer shall be afforded an opportunity for a hearing. J. The Customer shall be responsible for payment of all other bills or portions of bills as rendered which are not in dispute. 2. Hearings A. Any Customer who disputes the services provided or a billing for services furnished in accordance with the Board's filed Rates, Rules and Regulations or established policies or procedures may request a hearing. If a hearing requested is based on a disputed past due bill, the request must be made within ten (10) calendar days following the final outcome of the dispute process. Any request for a hearing may be made in writing and received by the Board's corporate office at 1232 Haco Drive,Lansing,Michigan,48912. B. On receipt of a request for a hearing, the Board will forward this request to an independent Hearing Officer. The Hearing Officer will arrange a time for the hearing and advise both the Customer and the Board of the date, time and location in writing. The hearing will be scheduled during normal business hours. Failure of the Customer or Board to attend the hearing without due cause or prior request for adjournment will constitute a waiver of right of that party to the hearing. C. The Board and the Customer shall: (1) Have the right to be represented by Counsel or other persons of their choice. (2) Have the right to present evidence,testimony and oral and written argument. (3) Have the right to cross-examine witnesses appearing on behalf of the other parry. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 15 of— WATEwArE®ice Lansing Board of Dispute and Hearing Procedure ImWater and Light Steam Rule and Regulation 8 (4) Have the right to have the hearing recorded by a court reporter at the expense of the Customer. The Hearing Officer shall also have the right to have the hearing recorded by a court reporter. Recordings will be preserved at least six (6) months from the date of the hearing. All evidence relevant to the dispute will be received. D. For each hearing, the Hearing Officer shall compile a hearing record which will contain; (1) A concise statement in writing of the position of the Board in relation to the dispute. (2) A concise statement in writing of the position of the Customer in the dispute. (3) Copies of all evidence submitted by the parties. F. If a decision is reached during the hearing, the Hearing Officer shall state the decision to both parties. If the Hearing Officer does not reach a decision during the hearing, additional time will be allowed to reach a decision. When a decision has been reached, either at the hearing or later, the Hearing Officer will prepare a report which shall contain the following: (1) A concise summary of the evidence and argument presented by the parties. (2) The decision and a statement that the decision of the Hearing Officer was based solely on the evidence presented and reasons therefore. (3) Advise that the representatives of the Board and the Customer have a right to file an appeal with the Board of Commissioners. (4) A statement as to any settlement agreement. (5) A statement that the dispute determination is binding on both parties unless appealed to the Board of Commissioners within ten (10)days of the date of mailing of decision, and that any request for appeal must be in writing to the Corporate Secretary. F. The Hearing Officer shall file the written report with the Board of Commissioners and the Mayor of the City of Lansing. A copy of the report shall be sent to the Customer via certified mail. G. If the dispute is unesolved and the decision appealed, the Hearing Officer shall make recommendations to the Board of Commissioners on the dispute. The Secretary of the Board will arrange a time for the appeal and advise both the Customer and the Board of the date, time and location in writing. Failure of the Customer to appear at the time set for the appeal without due cause, or to request an alternate date,will constitute a waiver of right to appeal. H. The Board of Commissioners shall report its final action on any unresolved disputes together with the Hearing Officer's report and recommendations to the Mayor and the City Council of Lansing, Michigan. I. The Mayor may make recommendations to the Board of Commissioners on each unresolved dispute. ADOPTED: 7/22/03 FFFF('Trt7F• Q/1/01 -.r-)- -7 WATER R�T Lansing Board of Distribution System Extensions Water and Light Steam Rule and Regulation 9 Distribution System Extensions 1. General: A. Request for Distribution System Extension Rule 9 sets forth the conditions under which the Board will extend its Steam Distribution System. B. Ownership The Board shall provide, own, maintain and specify all of its distribution Facilities including location. No ownership rights to Board Facilities shall pass to any owner(s), developer(s), or Customer(s) by reason of any contribution required hereunder. C. Availability of Distribution System Extension The Board shall in its sole discretion determine whether or not any particular Steam Distribution System extension shall be made, regardless of its intended use, and establish any special conditions or requirements that may apply, including but not limited to entering into an agreement with a developer,property owner(s) or Customer. Steam Distribution System extensions are generally available throughout the steam service area if the requested service will not disturb or impair service to prior users and is within or contiguous to areas presently served. D. Installation of Distribution System Extension All Steam Distribution System extensions shall be installed by the Board or its agent. Steam Distribution System extensions shall be installed in public right-of-way except in certain cases where, at the Board's discretion, they may be installed in dedicated recordable easements on private property at no cost to the Board. The Customer shall provide the Board a final preliminary approved site plan for Board review and approval. Installation of a Steam Distribution System extension will be initiated provided: (1) The Customer has entered into a written agreement with the Board for the construction of the Steam Distribution System extension. (2) The Customer has paid any deposits as required by Rule 7.4 and Rule 12 for the Steam Distribution System extension and any required system reinforcement. (3) Where applicable, the Customer has recorded the plat or final preliminary approval has been received, monuments or markers are in place, lot lines staked, sewers installed, streets at finished grade (before gravel and curb and gutter installation), sidewalk grading completed, and the ground in workable condition. (4) Construction during the winter season will only occur at the Board's discretion. E. Adequate Temperature,Pressure and Flow Capacity The Board shall not make Steam Distribution System extensions unless adequate temperature, pressure and flow capacity is available at the location of the Steam Distribution System extensions as determined by the Board. Where a Steam Distribution System reinforcement is required to provide adequate temperature, pressure and flow capacity at the location of the Steam Distribution System ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 17 of 27227 WATER Lansing Board of Distribution System Extensions go Water and Light Steam Rule and Regulation 9 extension, the Customer shall bear the cost of such Steam Distribution System reinforcement in accordance with Rule 12. F. Economic Development Offsets Where the Board determines that the Steam Distribution System extension will promote development that provides substantial and sustainable economic benefits to its Customers or the Lansing region, the Board will consider an offset to its fees and charges and/or an economic incentive subject to its availability. G. Easements Where the Board has agreed to construct the Steam Distribution System extension in an easement and prior to such construction, the owner(s), developer(s) or Customer(s) shall be required to furnish, at no expense to the Board, recordable easements i l a form satisfactory to the Board. The easement shall grant right-of-ways suitable for the ingress, egress and the installation and maintenance of the Steam Distribution System extension including any Steam Distribution System equipment as designed by the Board for present and future service. In the event the required easements are not provided by the owner(s), developer(s) or Customer(s) for such extension, the Board may elect to construct all or any part thereof along public highways or other private property. In such event,the Board may require the owner(s), developer(s) or Customer(s) to pay the added construction expense occasioned by the use of such highways or other private property, plus any expense encountered in acquiring permits and easements on other private property when necessary to provide service to the owner(s), developer(s) or Customer(s). H. Non-Standard Equipment Where the Customer requests that the Board utilize equipment which differs from its normal specifications, purchased or installed, the Board may elect to provide such non- standard equipment with the Customer paying any additional cost. I. Non-Standard Construction Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. J. Other Facilities It will be the responsibility of the owner(s), developer(s) or Customer(s) to identify and provide locations of any existing privately owned underground facilities such as lawn sprinkler systems, field drainage systems, septic tanks, Customer owned electric lines, etc. If privately owned facilities are not properly located, the Board does not assume responsibility for any damage to these facilities. K. Construction Date of Distribution System Extension The Board, based on availability of work crews and material, and subject to approvals of the appropriate regulatory agencies, utilize best efforts in constructing the Steam Distribution System extension to meet a mutually agreed upon date. ADOPTED: 7/22/03 UT7UUY rT1 M. 0n ins n _ 1 0 WATER Lansing Board of Distribution System Extensions so Water and Light Steam Rule and Regulation 9 2. Steam Facility Relocations and Removals: (1) At the request of a Customer or developer, or as required due to a conflict, or to meet Board Standards,the Board will relocate or remove its steam Facilities provided: A. The relocation or removal is feasible and meets Board Standards. B. The Customer or developer obtains approval from all Customers impacted by the proposed relocation. C. The relocation or removal does not degrade steam reliability or quality. D. All governmental approvals, permits and easements are obtained. Prior to any relocation or removal of steam Facilities,the Customer or developer shall be required to make a nonrefundable contribution in aid of construction. The aid in contribution of construction shall reimburse the Board for all relocation and removal costs including material, labor, the cost of breaking and repairing streets, walks, parking lots, driveways, etc., repairing lawns, replacing shrubs, flowers, etc., and any right-of-way costs as per this Rule 9, plus the cost of any necessary modifications to the Board's Steam Distribution System affected by the relocation or removal, less the salvage value of any portion of the steam Facilities removed. (2) If, at any time subsequent to completion of the Steam Distribution System extension, it is found that Steam Mains or related Facilities are not at the correct location or at the proper elevation due to changes beyond the control of the Board, the Customer or developer shall reimburse the Board to relocate Steam Mains or related Facilities to the correct location or at the proper elevation. ADOPTED: 7/22/03 FFFF.CTTVF- 9/1/03 Page 19 of 2737 WATE-GHT Lansing Board of Services Water and Light Steam Rule and Regulation 10 Services 1. General: The Customer Steam Service shall be furnished, installed, owned and maintained by the Board. In the course of maintaining or repairing a Customer Steam Service, the Board shall bear no responsibility for damage incurred or restoration to areas where the Customer Steam Service passes under any area not readily accessible. The Customer shall be responsible for additional repair costs due to these encumbered services. The Service Location shall be specified by the Board and shall be located so that the Board's service Facilities meet or exceed all clearance requirements and applicable local codes. Should it become necessary for any cause beyond the Board's control to change the Service Location, the entire cost of any changes in the Customer's service shall be the responsibility of the Customer. Should it become necessary for the Board to reinforce or upgrade the Steam Distribution System to accommodate the requested service, a nonrefundable contribution in aid of construction may be required as determined by Rule 12. 2. Steam Service: A. General All steam supplied shall be condensed and piped to a condensate meter except where Board approval is given for reasonable or unavoidable exceptions such as humidifiers, steam tables, pressing equipment, cooking equipment, etc. A plot plan showing the proposed building size, location of service entrance and steam equipment to be supplied shall be submitted to the Board's System Integrity & Customer Projects Department for all service requests. Customer Steam Services shall be installed from the Steam Main to the Customer's building in the most direct manner. The pipe comprising the connection shall cross only that legally described property upon which the building to be serviced is located. It is the intent of the Board that all underground steam pipes be installed and maintained by the Board. However, where unusual or special circumstances exist, the Customer may request approval to install underground steam pipes. Applicants shall submit plans and specifications to the Board's System Integrity&Customer Projects Department for approval prior to installation. No person other than an authorized employee of the Board shall open or close the outside valve on the Customer Steam Service. No person except an authorized Board employee shall tap, revamp or connect to a Steam Main or any of the pipes comprising the Customer Steam Service. ADOPTED: 7/22/03 FFFF.CTTVF.• R/1 ins Pace 20 nf 273- WATER&LIGHT Lansing Board of Services Water and Light Steam Rule and Regulation 10 B. Customer Connections to Board Facilities It shall be the Customer's responsibility to connect Customer Piping to the Customer Steam Service or meter-set. All work shall be in full compliance with all Board standards and applicable codes. The Customer shall install a Service Valve to control the entire steam supply to the building. This valve shall be installed within one foot of the outlet side of the Board's Service Valve and shall have ready access. The Customer shall not connect to the Customer Steam Service except at the outlet side of the Board Service Valve. C. Customer Steam Piping (1) General The Customer shall provide at least one automatic float type air vent for all systems except vacuum systems. The best location sometimes is in the condensate main. No Customer Piping shall depend upon the master trap for steam trapping or vent for air removal, except a single zone, one pipe, direct steam system. Customer Piping served with medium or high pressure steam shall be equipped with a pressure regulator, including a three valve by-pass and with a pressure relief valve. The relief valve shall have a capacity rating equal to the rating of the regulator, it is to be an ASME approved type, and shall discharge to the outside of the building or to a space in the building where little or no damage will occur if the valve operates. The proper relief setting depends upon the characteristics of the system. The Customer shall make sufficient provisions for the support, grade expansion, and contraction of pipe near the service connections. (2) Service Riser or Header Piping The total length of Customer's service riser or header piping shall be kept to a minimum, but in no case shall the length exceed twenty (20) feet from the Board's Service Valve. A gooseneck is required from the top of all service risers unless the grade of the service from the top of the riser to the first branch connection exceeds one diameter of the pipe. All service risers and header piping graded to the street main shall be insulated with at least one inch(1")thick standard pipe insulation. When more than one Customer is supplied from a single service, each Customer's branch connection shall have a valve for controlling his service. Each Customer will be supplied and metered independently, and access shall be provided to each individual Service Valve. The risers or branch connections to the individual Customer's valve shall be as short as practicable. When the length of the common header pipe exceeds twenty (20) feet the condensate shall be piped to a master trap and meter and the steam consumption assigned to the building owner or an occupant by the owner. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page21 of 2729 WATER RIGHT Lansing Board of Services Water and Light Steam Rule and Regulation 10 (3) Automatically Operated Valves Systems having an automatically operated valve which regulates the steam supply for more than one-third of the total installed capacity of space heating, space cooling, or domestic water heating shall be equipped with an adequately sized three valve by-pass around the automatic valve; unless the valve has a dependable, rapid, manual opening feature. The steam trap which serves the equipment shall also be equipped with a three valve by-pass. (4) By-Pass Valves All by-pass valves will be sealed in the closed position and shall not be operated except in emergencies. The Board's System Integrity & Customer Projects Department shall be notified any time a sealed by-pass valve is opened. D. Installation and Maintenance of Steam Sei-vices Installation of a steam service will be initiated provided: (1) The Customer has provided the Board a final preliminary approved site plan for Board review and approval. (2) The Customer has entered into a written agreement with the Board for the construction of the steam service. (3) The Customer has paid any deposits as required by Rule 7.4 and Rule 12 for the steam service. (4) Where applicable,the Customer shall have the plat recorded or final preliminary approval received, monuments or markers in place, lot lines staked, sewers installed, streets at finished grade (before gravel and curb and gutter installation), sidewalk grading completed, and the ground in workable condition. (5) Construction during the winter season will only occur at the Board's discretion. Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. The Customer shall be responsible for additional repair costs due to encumbered Customer Steam Services or damage as a result of negligence, willful damage or carelessness by the Customer, owner or tenants. 3. Steam Facility Relocations and Removals: The Board will relocate or remove its steam Facilities in accordance with Rule 9.2. ADOPTED: 7/22/03 uurr0rPT%71'. 0/1 10 J T3-11 -47 ) Z WATER�— Lansing Board of Condensate and Traps ImWater and Light Steam Rule and Regulation 11 Condensate and Master Trap 1. General: The only approved piping system consists of a single master trap and meter combination to serve an entire building. Systems designed for more than one master trap and meter combination in different parts of a building shall not be installed unless written approval has been obtained from the Board. Condensate disposal shall be the responsibility of the property owner once it passes through the Board's meter. All piping shall be supported so that none of its weight depends on the meter or master trap, except when the pipe length between the two is three (3)feet or less. 2. Condensate: The Customer shall provide a condensate piping system in accordance with the following. (1) Pipes carrying condensate from the entire system supplied by each Customer's Service Valve shall be connected to a single pipe ahead of the master trap assembly or the pump receiving tank. (2) Provide a readily accessible screwed cap or plug and a valve slightly above and at each end of every concealed portion of piping or wherever leakage or the effects of leakage will not be obvious. Use copper or other non-ferrous pipe,without joints if practicable,for such piping. (3) When sections of the condensate piping depend on a water column to move the condensate, air loops or automatic vents ahead of the flooded portion shall be provided. (4) Unrestricted gravity flow, without pockets or lifts, should be provided wherever practicable. Unavoidable flooded portions, such as loops around doorways, are to be copper or other non- ferrous pipe. Where lifts are unavoidable, the maximum amount of lift to the master trap shall be determined by the characteristics of the system and approved by the Board before installation. (5) Sufficient drainage capacity shall be provided at the meter outlet to allow for gravity discharge at the maximum rate of condensate flow. Extend a short drain pipe riser loosely around the smaller meter outlet nipple wherever extension of the drain pipe is necessary to reach a floor drain or sewer. (The Board may strap the outlet piping to the meter support). 3. Master Trap: For low, medium and high pressure systems except those equipped with a pump and surge tank, the Customer shall install a steam master trap ahead of the meter. The Customer shall in accordance with Board standards furnish and install the valve, strainer, and union just ahead of the trap inlet, and a union close to the trap outlet if the trap is not close to the meter inlet union. The trap may be at any convenient readily accessible location between the meter and the last branch connection into the condensate main. Capacity of the master trap, or traps, as rated by the Manufacturer shall be at least equal to the maximum condensate rate of the system at the maximum condensate (water column) pressure available, without flooding equipment, provided that this maximum pressure is not more than 48 inches. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 23 of 272-7 WATEwATE® Lansing Board of Condensate and Traps in Water and Light Steam Rule and Regulation 11 4. Condensate (Surge) Tanks: The Customer shall provide a condensate (surge) tank instead of a master trap for systems which are equipped with a condensate pump or a vacuum pump. The volume of the tank shall be at least equal to the quantity of condensate discharged by the pump during two operations of the float-operated switch. The Customer shall also: (1) Install a valve in the single gravity discharge pipe from the bottom of the tank to the meter if the bottom of the tank is more than 12 inches above the meter inlet. (2) Provide a short, open vent pipe at the top of the tank, independent of the condensate inlet pipe. If the pump is a vacuum type, connect both the condensate and air discharge pipes to the top of the tank, independently. (3) Provide an emergency by-pass to a floor drain around the pump receiver. 5. By-pass Valve: The Customer shall in accordance with Board standards install a 3 valve by-pass around the master trap for any system having a maximum load in excess of 2200 pounds per hour. ADOPTED: 7/22/03 L'L'=OrrTx/T. 0/1/n� WATER ER a— Lansing Board of System Extension & Service Deposit go Water and Light Steam Rule and Regulation 12 System Extension & Service Deposit 1. General: When application is made for steam service which requires the extension of the Board's existing Steam Distribution System, the Board will make such extensions when the estimated annual revenue, probable stability of the load and prospective load growth reasonably warrant the capital expenditure required. 2. Distribution System Extension and Customer Steam Service: The Board shall bear the cost of an extension of its existing Steam Distribution System and installation of a Customer Steam Service up to one and one-half (1'/2) times the estimated annual revenue from Customers to be immediately served. Refunds Steam Distribution System extension deposits made with the Board shall be subject to refund without interest during the first five (5) twelve (12) month periods following the month in which each such extension is completed. Refunds will only be made to person(s) making the deposit and shall cease when they equal the amount deposited or at the close of the fifth twelve (12) month period following the month during which the line extension is completed, after which the Board shall have no further obligation to refund any remaining portion of the line extension deposit. The Board will refund to the party making the deposit an amount equal to one and one-half(1'/2) times the estimated annual revenue for each additional new Customer who is furnished service from such extension. Reconciliation If at the end of three (3)years from the date which the Board deems the Customer Steam Service to be operational, the actual cost of the Steam Distribution System extension and Customer Steam Service exceeds the sum of three (3) years actual operating income, plus the Customer's contribution-in-aid to construction,the Customer shall pay the difference. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 25 of 2727 WATER Lansing Board of System Extension & Service Deposit Water and Light Steam Rule and Regulation 12 3. Customer Steam Service Only: The Board shall bear the cost of the installation of a Customer Steam Service up to one (1) times the estimated annual revenue from Customers to be immediately served. Reconciliation If at the end of one (1) year from the date which the Board deems the Customer Steam Service to be operational, the actual cost of the Customer Steam Service exceeds the sum of one (1) year actual operating income, plus the Customer's contribution-in-aid to construction, the Customer shall pay the difference. ADOPTED: 7/22/03 FFFFCTT'kIF• 2/1/01 parts 7F nf77= WATE-HT Lansing Board of Schedule of Fees & Charges Water and Light Steam Rule and Regulation 13 Schedule of Fees & Charges STEAM FEES and CHARGES Charge Description When Applied Charge Security Deposits—Residential Unacceptable Credit History—Normal credit risk Steam Deposits may be larger for higher than normal $139 credit risk Security Deposits—Commercial& Unacceptable Credit History—Normal credit risk 1.5 times average monthly bill Industrial Deposits may be larger for higher than normal credit risk Reconnection fee Non-pay(Normal hours) 7:30am—7:00pm weekdays $75 Non-pay(Other than normal hours) Holidays and other than normal hours $100 Meter Tampering $100 Charges other than those published Relocations,damages,etc. At cost ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 27 of 2727 A CTACHMEN-] E WATER&LIGHT Lansing Board of Water and Light Rules and Regulations For Chilled Water Service ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 WATER&� Lansing Board of Table of Contents Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions....................................................................................................................................................................4 Applicationfor Service............................................................................................................................................... 5 ServiceConditions..................................................... ................................................................................................6 . Characterof Service................... ..........................................................................................6 Description of Service ........................................................... .................. 6 ................................................................. Availabilityof Service..........................................................................................................................................6 Agreements...........................................................................................................................................................7 MaterialAvailability.............................................................................................................................................7 Useof Service.............................................................................................................................................................. 8 General.............. 8 ................................................................... Accessand Damages ................................................................................................................................................ 8 CustomerPiping and Equipment.............................................................................................................................. 8 Chilled Water Quality and Disturbances .................................................................................................................. 8 ImproperUse and Tampering...................................................................................................................................9 Metering.................................................................................................................................................................... 10 General.................................................................................................................................................................... 10 Sizing/Installatio n/Ownership................................................................................................................................. 10 EquipmentLocation................................................................................................................................................ 10 DamagedMeter ...................................................................................................................................................... 10 Applicationof Rates ................................................................................................................................................. 11 General.................................................................................................................................................................... 11 Resale................ ...................................... .............................................................................................................. 11 . . BillinQ .....................................................I....................... 11 MinimumCharges.................................................................................................................................................. 11 Property Owner-Rental Agent Agreement for'Leave On' Service....................................................................... 11 Responsibilityfor Payment of Bills......................................................................................................................... 12 General................................. ......... 12 EstimatedConsumption.......................................................................................................................................... 12 BillingErrors............................. ..................................... 12 ........................................................................................ AccountSecurity Deposits...................................................................................................................................... 12 Disputeand Hearing Procedure.............................................................................................................................. 14 Disputes ....................................................... ................. 14 .......................................................................................... Hearings.................................................................................................................................................................. 14 DistributionSystem Extensions............................................................................................................................... 16 General.................................................................................................................................................................... 16 Request for Distribution System Extension........................................................................................................ 16 - - - - - - - -Ownership..........................................-.............................................................................. .-16- - ............................... Availability of Distribution System Extension................................................................................................... 16 Installation of Distribution System Extension.................................................................................................... 16 Adequate Temperature,Pressure and Flow Capacity......................................................................................... 16 EconomicDevelopment Offsets......................................................................................................................... 17 Easements........................................................................................................................................................... 17 Non-Standard Equipment................................................................................................................................... 17 Non-Standard Construction................................................................................................................................ 17 OtherFacilities.................................................................................................................................................... 17 Construction Date of Distribution System Extension......................................................................................... 18 Chilled Water Facility Relocations and Removals................................................................................................. 18 Services...................................................................................................................................................................... 19 General.................................................................................................................................................................... 19 ChilledWater Service............................................................................................................................................. 19 ADOPTED: 7/22/03 EFFECTIVF.- 9/1/01 Paae 7 of 22 WATE� Lansing Board of Table of Contents Water and Light General.....................................................:.......................................................................................................... 19 Customer Connections to Board Facilities..........................................................................................................20 CustomerChilled Water Piping..........................................................................................................................20 Installation and Maintenance of Chilled Water Services....................................................................................20 Chilled Water Facility Relocations and Removals .................................................................................................20 System Extension&Service Deposit...........................................................................................23 General............ ...............................................................................................................23 Distribution System Extension and Customer Chilled Water Service....................................................................21 Customer Chilled Water Service Only....................................................................................................................21 Scheduleof Fees & Charges.....................................................................................................................................22 ADOPTED: 7/22/03 EFFECTIVE- 8/1/03 Page 3of22 WATER-cHT Lansing Board of Definitions Water and Light Chilled Water Rule and Regulation 1 DEFINITIONS OF TERMS AND THEIR ABBREVIATIONS BOARD— When used in these Rules and Regulations, Board is an abbreviation meaning the Board of Water and Light. BTU- British Thermal Unit, the heat necessary to raise one pound of water one degree Fahrenheit. CHILLED WATER DISTRIBUTION SYSTEM — The system of Chilled Water Mains, pipes, fittings, valves and all equipment and appurtenances thereto, necessary to distribute chilled water to Customer Chilled Water Service. CHILLED WATER MAIN—The pipes owned and maintained by the Board that conveys chilled water to and from a Customer Chilled Water Service. CUSTOMER— A purchaser of chilled water service supplied by the Board. CUSTOMER PIPING—A piping system owned or controlled by the Customer that conveys chilled water from the Service Location throughout the Customer's Premises. CUSTOMER CHILLED WATER SERVICE—Those pipes, valves and appurtenances installed between a Chilled Water Main and Customer Piping. DEMAND— The rate of chilled water delivered at a given point in Tons of refrigeration. FACILITIES— A general term which inchides pipes, fittings, valves, associated structures and the like, used as a part of or in connection with a chilled water installation. PREMISES— A building and its grounds. RATE— The unit prices as established by the Board's rate-making body and the quantities to which they apply as specified in the Rate Schedule. RATE SCHEDULE—A filed statement of the chilled water Rate and the terms and conditions governing its application as established by the Board's rate-making body. RTU- Remote Telemetry Unit housing Board owned Chilled Water metering and monitoring equipment. SERVICE LOCATION — The point at which the Board has agreed to provide chilled water service to Customer Piping. SERVICE VALVES — The valves installed by the Board at the Service Location at the customers property line. TON- A unit of refrigeration. One Ton equals to 12,000 BTU/hr. ADOPTED: 7/22/03 F.FFFC'.TTVF• VIM', Paaadnf77 WATE'-- Lansing Board of Application for Service Water and Light Chilled Water Rule and Regulation 2 Application for Service 1. General Copies of the Board's Rate Schedules for chilled water service are open to public inspection at the Board's offices and are available on the Board's Internet Web site www.lbwl.com or upon request. Application for original, modified or added service shall be made at the office of the Board of Water and Light at 1232 Haco Drive,Lansing. Any Customer receiving or agreeing to receive chilled water service from Board Facilities shall be deemed a Customer of the Board subject to its Rates and these Rules and Regulations and responsible for the service used whether such service is provided under a signed agreement or not. Chilled water service will not be supplied to new or remodeled buildings until such installations comply with these Rules and Regulations. The Customer should contact the Board's System Integrity & Customer Projects Department to determine the characteristics of the chilled water service available at the Premises. The System Integrity& Customer Projects Department will inform the Customer of the Board's requirements, which must be fulfilled by the Customer, in order to receive chilled water service. The Board may discontinue chilled water service to any Customer for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. The Customer must pay a reconnection fee as stated in Rule 12 to cover the costs of restoring chilled water service that has been discontinued for any breach of the Board's Policy, Rules and Regulations, Procedures or in accordance with law. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 5 of 22 WATER-HT Lansing Board of Service Conditions Water and Light Chilled Water Rule and Regulation 3 Service Conditions I. Character of Service The Board produces and distributes chilled water for public use throughout its service area and will endeavor, but does not guarantee, to furnish a continuous supply and to maintain chilled water temperature and pressure within reasonable limits. The Board shall not be liable for interruptions in the service including without limitation, variations in the service characteristics, or for any loss or damage of any kind or character occasioned thereby, due to causes or conditions beyond the Board's reasonable control, and such causes or conditions shall be deemed to specifically include, but not be limited to, the following: acts or omissions of Customers or third parties; operation of safety devices except when such operation is caused by the negligence of the Board; loss of electrical power needed to operate the Board's control valve, metering, and monitoring equipment; absence of an alternate supply of service; failure, malfunction, breakage, necessary repairs or inspection of machinery, Facilities or equipment when the Board has carried on a program of maintenance consistent with the general standards prevailing in the industry; act of God; war; action of the elements; storm or flood; fire; riot; sabotage; labor dispute or disturbance, or the exercise of authority or regulation by governmental or military authorities. Notwithstanding any other provision of these rules,the Board may interrupt or limit chilled water service to Customers without prior notice and in a manner that appears most equitable under the circumstances then prevailing or as necessary to protect the health, safety and welfare of its employees or Customers. The Board shall be under no liability with respect to any such interruption or limited supply. 2. Description of Service A. Availability of Service (1) Chilled water service is available twelve (12) months a year to Customers in the City of Lansing except where the Board has determined it to be impractical to serve. (2) The Board will endeavor to deliver Chilled Water Service at a maximum supply temperature not to exceed 44 degrees Fahrenheit. (3) The Board will endeavor to deliver Chilled Water Service with maximum pressure not to exceed 120 psig and minimum pressure of not less than 100 psig. (4) Chilled water service is not available where the Board must bring the Customer Chilled Water Service across another parcel or lot in order to provide service. (5) In the case where there is more than one Chilled Water Main capable of providing service, the Board shall determine which Chilled Water Main will be used for service and the location of the Customer Chilled Water Service connection. ADOPTED: 7/22/03 L'DU"f/ VT[rn. n/1/An WATER&&L� Lansing Board of Service Conditions im Water and Light Chilled Water Rule and Regulation 3 B. Agreements The Board shall require the Customer to enter into a written agreement that details the terms and conditions and price to be paid by the Customer prior to chilled water service construction. In addition,the Board may negotiate written contractual arrangements as to the provision of necessary service Facilities, duration of service, amount of deposit and refunds thereon, minimum bills or other service conditions for Customers or prospective Customers whose load requirements exceed the capacity of the available distribution system in the area or whose load characteristics or special service needs require unusual investments by the Board in service Facilities or where there is not adequate assurance of the permanent use of the service. No promises, agreements or representations of any agent or employee of the Board shall be of binding force upon the Board unless the same is within the authority of that individual and incorporated in the written agreement. C. Material Availability Subject to the restrictions contained in Rule 3.2.A, the Board will construct chilled water distribution Facilities and extensions only in the event it is able to obtain or use the necessary materials, equipment and supplies. The Board may, in its discretion, allocate the use of such materials, equipment and supplies among the various classes of Customers and prospective Customers of the same class. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 7 of 22 WATER Lansing Board of Use of Service go Water and Light Chilled Water Rule and Regulation 4 Use of Service 1. General Chilled water is supplied to a Customer for exclusive use on the Premises to which it is delivered by the Board. Service may not be shared with another, sold to another, or transmitted off the Premises without the written permission of the Board, except as noted in Rule 6. Use of chilled water is only for the purposes authorized by the Board and is not to be extended to another building without authorization of the Board. 2. Access and Damages The Customer shall provide and maintain appropriate access and working space around chilled water Facilities in accordance with all applicable Board standards so as to permit ready and safe operation and maintenance of such Facilities. The Board's authorized persomiel or agents of the Board shall have access to the Customer's Premises at all reasonable hours for all purposes necessary to conduct business, including without limitation: 1) install, inspect, read, repair, maintain, test or remove its meters and fiber optics 2) install, operate and maintain other Board equipment or Facilities, and 3) inspect service installations, Customer Piping, and to determine the connected chilled water Demand. If the meters, metering equipment or other Board property are damaged or destroyed through the neglect of the Customer, the cost of necessary repairs or replacements shall be the responsibility of the Customer. If, for any reason beyond its control,the Board is unable to read a meter, operate,maintain or make inspection, including but not limited to, reasons such as Premises being locked, meter being inaccessible or unsafe conditions, then after due written notice to the Customer, the chilled water service may be disconnected until such time as arrangements have been made to permit access for Board inspection and approval and the Customer has paid the appropriate recoruiection fee as stated in Rule 12. 3. Customer Piping and Equipment The Board may deny or terminate service to any Customer whose Customer Piping or equipment constitutes a hazard to the Board's employees, equipment or its service to others. However, the Board is not responsible to inspect Customer Piping or equipment and shall not be held liable for any injury or damage resulting from the condition thereof. The Customer shall install and maintain the necessary facilities or devices to protect Customer owned equipment against service interruptions and other disturbances on the Board's system. Alterations to the Customer Chilled Water Service or associated equipment are prohibited without approval of the Board. 4. Chilled Water Quality and Disturbances The Customer shall operate equipment in a manner that does not cause surges, water hammer or other problems in the Chilled Water Distribution System or to other Customers. If the Board notifies the Customer of such a condition, the Customer shall discontinue operation of equipment causing such condition until a correction has been made. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 8 of 22 WATER&LIGHT Lansing Board of Use of Service Water and Light Chilled Water Rule and Regulation 4 5. Improper Use and Tampering Any person that uses chilled water without making proper application for chilled water service shall be responsible for all charges for chilled water service. The amount of such charges shall be determined by the Board either by meter readings or on the basis of calculated consumption for the time chilled water was used. If chilled water is being used by a Customer without proper application for service or chilled water service connection, the Board may discontinue service without notice. In case of such discontinuance of service, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 12. The Board may discontinue service and seek criminal charges, if it is determined that the meter or piping on the Customer's Premises has been tampered with or altered in any manner to steal chilled water. If the Board discontinues service for this reason, the Board shall restore service only after the Customer has paid the reconnection fee as stated in Rule 12, made appropriate restitution for stolen service and made provisions for metering and/or piping changes as may be required by tine Board. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 Page 9 of 22 WATE'-LIGHT" Lansing Board of Metering Water and Light Chilled Water Rule and Regulation 5 Metering 1. General All chilled water sold to Customers shall be measured by commercially acceptable measuring devices owned and maintained by the Board except where it is impractical to meter, such as for temporary or special installation, in which cases the consumption may be calculated. If for any reason all the chilled water used cannot be registered accurately the unmetered portion shall be estimated by the Board on the basis of prior consumption or the operating characteristics of the building and equipment. 2. Sizing/Installation/Ownership The Board shall furnish, own and maintain metering and monitoring equipment consisting of RTU cabinet, temperature elements and transmitters, flow transmitters, differential pressure transmitters, and temperature control valves for installation by the Customer. The Customer shall provide two 120 VAC 20 AMP power circuits to the RTU cabinet. The Board shall install, own and maintain all communication and control wiring for the metering and monitoring equipment. 3. Equipment Location A. The Customer shall provide, at no expense to the Board, a space/enclosure suitable to the Board for the installation of the necessary metering equipment. The Customer shall furnish the space and the provisions for mounting metering and service equipment to meet Board requirements. Inquiries regarding installation requirements should be directed to the Board's System Integrity& Customer Projects Department. B. The Customer shall locate metering equipment inside the building served in a well ventilated area with ample space for meter reading and maintenance. C. The Customer shall not place metering equipment in a pit below floor level, in a rest room or on a platform higher than thirty (30) inches above the floor unless Board approved steps and platform are installed. 4. Damaged Meter The Customer shall be held liable for damage to the metering and monitoring equipment, and communication and control wiring from acts of carelessness, negligence or willful damage by owner or his tenants. The Board will repair any meter so damaged, and the cost shall be billed to the Customer. ADOPTED: 7/22/03 WATE-RBLI�GHT Lansing Board of Application of Rates Water and Light Chilled Water Rule and Regulation 6 Application of Rates I. General: Chilled Water Rates are predicated upon the Board not being required to provide not more than one Customer Chilled Water Service to a building or structure. The Board shall separately meter and separately bill service at different points or at different buildings or structures unless specifically provided for in the applicable Rate Schedule. 2. Resale: The owner or operator of an office building, apartment building, shopping mall, or similar structure may purchase chilled water from the Board for resale to occupants on the condition that service to each occupant shall be metered separately and that the occupants may not be charged more for such service than the appropriate Rate of the Board available for similar service under like conditions. In order to qualify for resale to tenants, the owner or operator must state their intent to resell in the application for service. The renting of Premises with the cost of chilled water service included in the rental as an incident of tenancy will not be considered a resale of such service. 3. Billing: Customers having more than one meter shall have consumption computed by individual meter in accordance with the current Rate Schedule and contract. 4. Minimum Charges: A minimum charge, as defined by the Rate in effect, shall be applied to all services and billed to the Customer. Where the Customer requests that a service be discontinued, the Board shall deactivate the service by any appropriate means, including without limitation, removing the metering devices and by disconnecting the service from the Board's Chilled Water Distribution System. 5. Property Owner-Rental Agent Agreement for"Leave On" Service: The BWL may waive application charges to maintain continuity of service at rental property locations provided: (1) the landlord agrees in writing to assume the responsibility for chilled water service during the interim between tenants, and(2) the landlord is in compliance with all other rules and regulations of the Board. ADOPTED: 7/22/03 EFFECTIVE: 9/1/03 Page 11 of 22 WATERBL� Lansing Board of Responsibility for Payment of Bills Water and Light Chilled Water Rule and Regulation 7 Responsibility for Payment of Bills L General Each Board Customer is responsible to pay all utility bills as rendered on or before the due date shown thereon. The Customer remains responsible for payment of the bills until the Customer orders service to be discontinued and the Board has had reasonable time to secure a final meter reading. Bills are rendered on approximately a monthly basis. Bills are mailed to Customers approximately fifteen (15) days before the due date shown on the bill. The Customer shall pay the net amount if paid on or before the due date on the bill. Failure on the part of the Customer, through no fault of the Board, to receive the bill shall not entitle the Customer to pay the net amount after the due date of the bill. If a bill remains unpaid after issuing a five (5) day written shut-off notice, the Board shall have the right to discontinue service. In extenuating circumstances, a Customer will be afforded the opportunity to make payment arrangements. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not in dispute. 2. Estimated Consumption Readings may be estimated when conditions warrant. Until reconciled by an actual reading, bills rendered on estimated consumption have the same force and effect as bills rendered on actual meter readings. 3. Billing Errors When an error is found to exist in the billing rendered to a Customer, the Board will correct such error to recover or refund the difference between the original billing and the corrected billing. Corrected billings will not be rendered for periods in excess of three(3)years. Refunds to Customers will normally be made promptly upon discovery of the error. Amounts due the Board from the Customer will be subject to normal collection policy and procedures. 4. Account Security Deposits The Board shall require an account security deposit from any new or existing Customer with an unacceptable credit history. The Board may apply different rules to new Customers signing up for service in accordance with Rule 7.4.C. The deposit is normally 1.5 times the average monthly bill (actual or estimated) as determined by the Board. If a deposit is required for new residential Customers, the Board shall determine the amount in accordance with Rule 12. To determine the deposit for new commercial and industrial Customers, the Board will estimate the average monthly bill and apply the 1.5 factor. The Board may waive deposits in special circumstances. The Board may also demand deposits larger than 1.5 times the average monthly bill if the Board determines that a Customer presents a higher than normal credit risk. The Board will refund deposits to all Customers who have taken service for 12 months and have an acceptable payment history. The Board will also refund deposits to Customers who have terminated service and paid all charges due. ADOPTED: 7/22/03 FRRR('TTXTR• Qil inz D'— 17 �f'Y? WATER&L— Lansing Board of Responsibility for Payment of Bills Im Water and Light Chilled Water Rule and Regulation 7 A. A security deposit may be required in any of the following circumstances: (1) The Customer has deliberately misinformed or misrepresented facts to the Board. (2) The Customer has tampered with the meter during the last 12 months. (3) The Customer has had one or more payments canceled in the last 12 months due to: (1) non- sufficient funds returned check, (2) account closed returned check, (3) non-sufficient funds bank bill, (4) account closed bank bill, or(5)credit card reversal. (4) The Customer has received a final notice on any account within the last 12 months. (5) The Customer has received more than 3 second notices on any account during the last 12 months. (6) The Customer has a past due balance on any account that is greater than$50.00 for more than 31 days past due in the past 12 months. (7) The Customer has a suspended or bad debt account within the last 12 months. B. If the Customer is applying for service through an artificial legal entity such as a corporation, or limited partnership,then the Board may request a deposit or other security of payment. C. New Customers will not be required to submit a deposit, in any of the following situations: (1) The Customer has no previous service history with the Board. (2) The Customer has previously established an acceptable payment history with the Board on a similar account. (3) The Customer's bill is paid by the State of Michigan. (4) The Customer secures a guarantor with a similar account and an acceptable payment history. (5) The Customer provides an acceptable surety bond. (6) The Customer provides an acceptable credit reference letter from a similar utility company for a similar account. Account must have been in the Customer's name and maintained for a minimum of 12 consecutive months. (7) The Customer has established an acceptable credit rating with a credit-reporting agency. ADOPTED: 7/22/03 EFFECTIVE- 8/1/03 Page 13 of 22 WATE�R®GHT Lansing Board of Dispute and Hearing Procedure Water and Light Chilled Water Rule and Regulation 8 Dispute and Hearing Procedure 1. Disputes In accordance with the Lansing City Charter, the Board is required to provide a fair and equitable dispute and hearing process for its Customers as follows: A. When any Customer disputes a bill or service and the Board is so advised, the date of the notice of dispute will be recorded. B. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of bills that are not disputed. C. The disputed bill or service will be investigated promptly and completely. D. The Customer will be advised of the results of the investigation. E. An attempt will be made to resolve the dispute in a manner mutually satisfactory to both parties. F. The Board will provide the opportunity for each Customer to enter into a reasonable settlement agreement in order to mutually resolve the disputed claim or to satisfy any liability not in dispute. G. If a settlement cannot be reached between the Customer and the Board's Account Administrator, the Customer may choose to appear before the Board's Dispute Review Committee. The review will be scheduled within ten(10) days of the request or as mutually agreed to by both parties. H. If a settlement cannot be reached following examination by the Dispute Review Committee, the account will be referred to the Board's General Manager. I. If a settlement is not reached after review by the Board's General Manager, the Customer shall be afforded an opportunity for a hearing. J. The Customer shall be responsible for payment of all other bills or portions of bills as rendered which are not in dispute. 2. Hearings A. Any Customer who disputes the services provided or a billing for services furnished in accordance with the Board's filed Rates, Rules and Regulations or established policies or procedures may request a hearing. If a hearing requested is based on a disputed past due bill, the request must be made within ten (10) calendar days following the final outcome of the dispute process. Any request for a hearing may be made in writing and received by the Board's corporate office at 1232 Haco Drive,Lansing, Michigan, 48912. B. On receipt of a request for a hearing, the Board will forward this request to an independent Hearing Officer. The Hearing Officer will arrange a time for the hearing and advise both the Customer and the Board of the date, time and location in writing. The hearing will be scheduled during normal business hours. Failure of the Customer or Board to attend the hearing without due cause or prior request for adjournment will constitute a waiver of right of that party to the hearing. C. The Board and the Customer shall: (1) Have the right to be represented by Counsel or other persons of their choice. (2) Have the right to present evidence, testimony and oral and written argument. (3) Have the right to cross-examine witnesses appearing on behalf of the other party. ADOPTED: 7/22/03 EFFFCTTVF• R/1/m Pnap 1d nf77 WATE" A- Lansing Board of Dispute and Hearing Procedure Km Water and Light Chilled Water Rule and Regulation 8 (4) Have the right to have the hearing recorded by a court reporter at the expense of the Customer. The Hearing Officer shall also have the right to have the hearing recorded by a court reporter. Recordings will be preserved at least six (6) months from the date of the hearing. All evidence relevant to the dispute will be received. D. For each hearing, the Hearing Officer shall compile a hearing record which will contain; (1) A concise statement in writing of the position of the Board in relation to the dispute. (2) A concise statement in writing of the position of the Customer in the dispute. (3) Copies of all evidence submitted by the parties. E. If a decision is reached during the hearing, the Hearing Officer shall state the decision to both parties. If the Hearing Officer does not reach a decision during the hearing, additional time will be allowed to reach a decision. When a decision has been reached, either at the hearing or later, the Hearing Officer will prepare a report which shall contain the following: (1) A concise summary of the evidence and argument presented by the parties. (2) The decision and a statement that the decision of the Hearing Officer was based solely on the evidence presented and reasons therefore. (3) Advise that the representatives of the Board and the Customer have a right to file an appeal with the Board of Commissioners. (4) A statement as to any settlement agreement. (5) A statement that the dispute determination is binding on both parties unless appealed to the Board of Commissioners within ten(10) days of the date of mailing of decision, and that any request for appeal must be in writing to the Corporate Secretary. F. The Hearing Officer shall file the written report with the Board of Commissioners and the Mayor of the City of Lansing. A copy of the report shall be sent to the Customer via certified mail. G. If the dispute is unresolved and the decision appealed, the Hearing Officer shall make recommendations to the Board of Commissioners on the dispute. The Secretary of the Board will arrange a time for the appeal and advise both the Customer and the Board of the date, time and location in writing. Failure of the Customer to appear at the time set for the appeal without due cause, or to request an alternate date,will constitute a waiver of right to appeal. H. The Board of Commissioners shall report its final action on any unresolved disputes together with the Hearing Officer's report and recommendations to the Mayor and the City Council of Lansing, Michigan. I. The Mayor may make recommendations to the Board of Commissioners on each unresolved dispute. ADOPTED: 7/22/03 nFFnr TYNrP- R/l/M Page 15 of22 WATE a&" LIGHT Lansing Board of Distribution System Extensions go Water and Light Chilled Water Rule and Regulation 9 Distribution System Extensions 1. General: A. Request for Distribution System Extension Rule 9 sets forth the conditions under which the Board will extend its Chilled Water Distribution System. B. Ownership The Board shall provide, own, maintain and specify all of its distribution Facilities including location. No ownership rights to Board Facilities shall pass to any owner(s), developer(s), or Customer(s)by reason of any contribution required hereunder. C. Availability of Distribution System Extension The Board shall in its sole discretion determine whether or not any particular Chilled Water Distribution System extension shall be made, regardless of its intended use, and establish any special conditions or requirements that may apply, including but not limited to entering into an agreement with a developer, property owner(s)or Customer. Chilled Water Distribution System extensions are generally available throughout the chilled water service area if the requested service will not disturb or impair service to prior users and is within or contiguous to areas presently served. D. Installation of Distribution System Extension All Chilled Water Distribution System extensions shall be installed by the Board or its agent. Chilled Water Distribution System extensions shall be installed in public right-of-way except in certain cases where, at the Board's discretion, they may be installed in dedicated recordable easements on private property at no cost to the Board. The Customer shall provide the Board a final preliminary approved site plan for Board review and approval. Installation of a Chilled Water Distribution System extension will be initiated provided: (1) The Customer has entered into a written agreement with the Board for the construction of the Chilled Water Distribution System extension. (2) The Customer has paid any deposits as required by Rule 7.4 and Rule 11 for the Chilled Water Distribution System extension and any required system reinforcement. (3) Where applicable,the Customer has recorded the plat or final preliminary approval has been received, monuments or markers are in place, lot lines staked, sewers installed, streets at finished grade (before gravel and curb and gutter installation), sidewalk grading completed, and the ground in workable condition. (4) Construction during the winter season will only occur at the Board's discretion. E. Adequate Temperature,Pressure and Flow Capacity The Board shall not make Chilled Water Distribution System extensions unless adequate temperature, pressure and flow capacity is available at the location of the Chilled Water Distribution System extensions as determined by the Board. ADOPTED: 7/22/03 WATE-�-' Lansing Board of Distribution System Extensions Water and Light Chilled Water Rule and Regulation 9 Where a Chilled Water Distribution System reinforcement is required to provide adequate temperature, pressure and flow capacity at the location of the Chilled Water Distribution System extension, the Customer shall bear the cost of such Chilled Water Distribution System reinforcement in accordance with Rule 11. F. Economic Development Offsets Where the Board determines that the Chilled Water Distribution System extension will promote development that provides substantial and sustainable economic benefits to its Customers or the Lansing region, the Board will consider an offset to its fees and charges and/or an economic incentive subject to its availability. G. Easements Where the Board has agreed to construct the Chilled Water Distribution System extension in an easement and prior to such construction, the owner(s), developer(s) or Customer(s) shall be required to furnish, at no expense to the Board, recordable easements in a form satisfactory to the Board. The easement shall grant right-of-ways suitable for the ingress, egress and the installation and maintenance of the Chilled Water Distribution System extension including any Chilled Water Distribution System equipment as designed by the Board for present and future service. In the event the required easements are not provided by the owner(s), developer(s) or Customer(s) for such extension, the Board may elect to construct all or any part thereof along public highways or other private property. In such event,the Board may require the owner(s), developer(s) or Customer(s) to pay the added construction expense occasioned by the use of such highways or other private property, plus any expense encountered in acquiring permits and easements on other private property when necessary to provide service to the owner(s), developer(s) or Customer(s). H. Non-Standard Equipment Where the Customer requests that the Board utilize equipment which differs from its normal specifications, purchased or installed, the Board may elect to provide such non- standard equipment with the Customer paying any additional cost. I. Non-Standard Construction Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. J. Other Facilities It will be the responsibility of the owner(s), developer(s) or Customer(s) to identify and provide locations of any existing privately owned underground facilities such as lawn sprinkler systems, field drainage systems, septic tanks, Customer owned electric lines, etc. If privately owned facilities are not properly located, the Board does not assume responsibility for any damage to these facilities. ADOPTED: 7/22/03 Page 17 of 22 goWATE�R&�T Lansing Board of Distribution System Extensions Water and Light Chilled Water Rule and Regulation 9 K. Construction Date of Distribution System Extension The Board, based on availability of work crews and material, and subject to approvals of the appropriate regulatory agencies, utilize best efforts in constructing the Chilled Water Distribution System extension to meet a mutually agreed upon date. 2. Chilled Water Facility Relocations and Removals: (1) At the request of a Customer or developer, or as required due to a conflict, or to meet Board Standards, the Board will relocate or remove its chilled water Facilities provided: A. The relocation or removal is feasible and meets Board Standards. B. The Customer or developer obtains approval from all Customers impacted by fihe proposed relocation. C. The relocation or removal does not degrade chilled water reliability or quality. D. All governmental approvals, permits and easements are obtained. Prior to any relocation or removal of chilled water Facilities, the Customer or developer shall be required to make a nonrefundable contribution in aid of construction. The aid in contribution of construction shall reimburse the Board for all relocation and removal costs including material, labor, the cost of breaking and repairing streets, walks, parking lots, driveways, etc., repairing lawns, replacing shrubs, flowers, etc., and any right-of-way costs as per this Rule 9, phis the cost of any necessary modifications to the Board's Chilled Water Distribution System affected by the relocation or removal, less the salvage value of any portion of the chilled water Facilities removed. (2) If, at any time subsequent to completion of the Chilled Water Distribution System extension, it is found that Chilled Water Mains or related Facilities are not at the correct location or at the proper elevation due to changes beyond the control of the Board, the Customer or developer shall reimburse the Board to relocate Chilled Water Mains or related Facilities to the correct location or at the proper elevation. ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 WATE"'aa— Lansing Board of Services Water and Light Chilled Water Rule and Regulation 10 Services 1. General: The Customer Chilled Water Service shall be furnished, installed, owned and maintained by the Board. In the course of maintaining or repairing a Customer Chilled Water Service, the Board shall bear no responsibility for damage incurred or restoration to areas where the Customer Chilled Water Service passes under any area not readily accessible. The Customer shall be responsible for additional repair costs due to these encumbered services The Service Location shall be specified by the Board and shall be located so that the Board's service Facilities meet or exceed all clearance requirements and applicable local codes. Should it become necessary for any cause beyond the Board's control to change the Service Location, the entire cost of any changes in the Customer's service shall be the responsibility of the Customer. Should it become necessary for the Board to reinforce or upgrade the Chilled Water Distribution System to accommodate the requested service, a nonrefundable contribution in aid of construction may be required as determined by Rule 11. 2. ChiIled Water Service: A. General The Customer shall provide the chilled water demand and a plot plan showing the proposed building size and location of proposed service entrance to the Board's System Integrity & Customer Projects Department. Customer Chilled Water Services shall be installed from the Chilled Water Main to the Customer's property line in the most direct manner. The pipe comprising the connection shall cross only that legally described property upon which the building to be serviced is located. It is the intent of the Board that all underground chilled water pipes be installed and maintained by the Board. However,where unusual or special circumstances exist,the Customer may request approval to install underground chilled water pipes. Applicants shall submit plans and specifications to the Board's System Integrity&Customer Projects Department for approval prior to installation. No person other than an authorized employee of the Board shall open or close the outside valve on the Customer Chilled Water Service. No person except an authorized Board employee shall tap, revamp or connect to a Chilled Water Main or any of the pipes comprising the Customer Chilled Water Service. The Customer shall flush the Customer Piping prior to connection to the Customer Chilled Water Service. The flushing shall remove all debris and foreign matter from the Customer Piping. The Board shall be notified of the date of flushing and given the opportunity to witness same. The Customer shall not use the Customer Chilled Water Service for cleaning or flushing of the Customer Piping. ADOPTED: 7/22/03 Page 19 of 22 �L'L'L'(TT�/R• Q/1/niz WATER R&LIGHT Lansing Board of Services Water and Light Chilled Water Rule and Regulation 10 B. Customer Connections to Board Facilities It shall be the Customer's responsibility to connect Customer Piping to the Customer Chilled Water Service. All work shall be in fill compliance with all Board standards and applicable codes. The Customer shall not connect to the Customer Chilled Water Service except at the outlet side of the Board Service Valves. C. Customer Chilled Water Piping The Customer shall make sufficient provisions to support the Customer Piping so that the Board's Customer Chilled Water Service is not adversely affected. The Customer shall inform the Board of the date of connection to the chilled water system. The Board shall be afforded the opportunity to witness the connection. D. Installation and Maintenance of Chilled Water Services Listallation of a chilled water service will be initiated provided: (1) The Customer has provided the Board a final preliminary approved site plan for Board review and approval. (2) The Customer has entered into a written agreement with the Board for the construction of the chilled water service. (3) The Customer has paid any deposits as required by Rule 7.4 and Rule 11 for the chilled water service. (4) Where applicable, the Customer shall have the plat recorded or final preliminary approval received, monuments or markers in place, lot lines staked, sewers installed, streets at finished grade (before gravel and curb and gutter installation), sidewalk grading completed, and the ground in workable condition. (5) Construction during the winter season will only occur at the Board's discretion. Where, in the Board's judgment, practical difficulties exist such as unexpected governmental requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where it is necessary to deviate from the Board's approved construction standards or established distribution system design, the Board may require the Customer to pay for the additional cost resulting therefrom. The Customer shall be responsible for additional repair costs due to encumbered Customer Chilled Water Services or damage as a result of negligence, willful damage or carelessness by the Customer, owner or tenants. 3. Chilled Water Facility Relocations and Removals: The Board will relocate or remove its chilled water Facilities in accordance with Rule 9.2 ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 WATER$"cHr Lansing Board of System Extension & Service Deposit Water and Light Chilled Water Rule and Regulation 1go — System Extension & Service Deposit 1. General: When application is made for chilled water service which requires the extension of the Board's existing Chilled Water Distribution System,the Board will make such extensions when the estimated annual revenue, probable stability of the load and prospective load growth reasonably warrant the capital expenditure required. 2. Distribution System Extension and Customer Chilled Water Service: The Customer may be required to pay all or a portion of the cost of an extension of the Board's existing Chilled Water Distribution System and installation of a Customer Chilled Water Service, based on an evaluation of the Board's recovery of capital cost along with other business related matters. 3. Customer Chilled Water Service Only: of the cost of the installation of a on The Customer may be reged on an evaluation of theuired to pay all or a1Board's recovery of capital cot along with to omer her Chilled Water Service,bas business related matters. ADOPTED: 7/22/03 Page 21 of 22 1— ,,,� goWATE R�HT Lansing Board of Schedule of Fees & Charges Water and Light Chilled Water Rule and Regulation 12 Schedule of Fees & Charges CHILLED WATER FEES and CHARGES Charge Description When Applied Charge Security Deposits—Commercial& Unacceptable Credit History—Normal credit risk 1.5 times average monthly bill Industrial Deposits may be larger for higher than normal credit risk Reconnection fee Non-pay(Normal hours) 7:30am—7:OOpm weekdays $75 Non-pay(Other than normal hours) Holidays and other than normal hours $100 Meter Tampering $100 Charges other than those published Relocations,damages,etc. At cost ADOPTED: 7/22/03 EFFECTIVE: 8/1/03 ATTACHMEN1 F Economic Parameters For Fiscal Year 2004 Studies Fiscal Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1.305 1.344 Inflation Factor(0&M)-3% 1.030 1.061 1.093 1.126 1.159 1.194 1.230 1.267 173 1. 1. 1.271 1.305 Inflation Factor(Fuel) -2.7% 1.027 1.055 1.00 1.316 1. 693 1.112 1.142 1. 369 1.423 1.480 Capital Escalation Factor-4% 1.040 1.082 1,125 1.170 1.217 1.265 16 Minimum Rate of Return-Mandatory Projects 5.0% Minimum Rate of Return-Necessary Projects 8.0% Minimum Rate of Return-Discretionary Projects 12.0% 0.644fi 0.6139 Present Worth Factor-MRR 8.0% 0.9524 0.9070 0.8638 0.8227 0.7035 0.74fi2 0.7107 0.6768 0.4632 Present Worth Factor-MRR 8.0% 0.9259 0.8573 0.7938 0.7350 0.6806 0.6302 0.5835 0.5403 0.5002 O,B929 0.7972 0.7118 0.6355 0.5674 0•5066 0,4523 0.4039 0.3606 0.3220 Present Worth Factor-MRR12.0% Fixed Charge Rate-Bonded Projects 30 5 10 15 20 25 Project Payback Period(years) 23.56% 13.21% 9.83% 8.19% 7.24% 6.64% -Mandatory Project 25.55°/ 15.20% 11.92% 10.39°/ 9.56% 9.06% -Necessary Project 28.30°/ 18.05% 14.98% 13.66% 13.01% 12.66°/ -Discretionary Project Fixed Charge Rate-Projects Not Bonded 5 10 15 20 25 30 Project Payback Period(years) -Mandatory Project 23.10% 12.95% 9.fi3°/, 8.02% 7.10% 6.51 -Necessary Project 25.05% 14.90°( 11.6B% 10.19% 9.37/° B.B /8 27.74% 17.70% 14.68% 13.39% 12.75% 12.41% -Discretionary Project system Avoided Cost 19.77 20.28 Electric($/MWhs) - 17.43 17.49 17.59 17.71 17.06 18.32 18.79 19.20 Steam(S/Mib)[see note 11 Water[see note I System Marginal Cost 19.02 19.51 -Electric(SIMWhs) 16.76 16.83 16.92 17.04 17.10 17.63 10.00 18.54 Steam($/Mlb) [see note 21 Water($/CCF)[see note 21 Operating Expense Ratio(Excludes PILT and Depreciation) 0.83 0.83 0 B3 0.83 0.83 Electric(5 O&M Expense/$Revenue) 0.62 0,62 0.62 0.62 0.62 0.87 0.87 Steam($0&M Expense I$Revenue) 0.69 0.69 0,69 0.69 0.69 0.87 0. 0.73 0.73 -Water($O&M Expense I$Revenue) 0.34 0.34 0.34 0.34 0.34 0.73 0,73 0.73 0.87 Average System Loss Factors ° 3.8% 3.8% Electric(1-Retail Sales/Net Gen Req) 3.8% 3.8% 3.8% 3.8% 3.B% 3.0% 3.B% 3.8/o Steam(1-Retail Sales/Net Gen Req)[see note 31 10 10.0% Water(I-Sales/Net Pumpage to System) 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% .0% MPPA Capacity Revenue Offset($/MW/month) 3,000 3,090 3,183 3,27E 3,377 Payment in Lieu of Taxes(PILOT) 4.0% Notes; 1 For Steam and Water Avoided Costs contact Bulk Power and Resource Planning at 702-6504. 2 For Steam and Water Marginal Costs contact Bulk Power and Resource Planning at 702-6504. 3 For Steam System Losses contact Bulk Power and Resource Planning at 702-6504. 4 For Net&Gross Replacement Power Costs,and unit annual capacity factors contact Bulk Power and Resource Planning at 702-6504. ATTACHMENT G Memo To: John EIashkar,Director and General Manager From: Dana W. Tousley, Chief Financial Officer William Cook,Jr.,Assistant General Manager Date: July 2, 2003 Re: Revision of Indirect Cost Methodology and Application This memo is a summary of the recommendations of the task force assigned to review the Board of Water and Light's indirect cost methodology. Indirect cost rates are used to add overhead costs to direct labor, direct material and other direct charges. The two primary applications are capitalizing capital projects and billing customers for construction work done by board forces. The task force recommended the following changes: Direct Labor—Decrease from 103%to 72% ® Material—Decrease from 13%to 3.5% a T&D Engineering and General—Decrease from 14%to 10% e Equipment—Continue to use the existing hourly rate structure The changes are based on the task force review of the detail components included in corporate, T&D, and material overhead. The above percentages should be used in all cases except where other guidelines exist such as MDOT contract work and reimbursable work generally required by the State or Federal Government within city limits. The task force concluded that the level of work force capital expenditure activity does not directly affect the following overhead cost components: Charges to overhead accounts by Managers,Directors, and General Manager Expenses associated with general facilities Charges to overhead accounts by Human Resources,Environmental Services and the information Technology Resource Center • Property and Casualty Insurance o Injuries and Damages caused by others Accordingly the charges associated with these activities were excluded from the calculation of the indirect cost rates and resulted in the recommended decreases in rates. This change in indirect cost rates has consequences for budgeted net income. The FY 2004 budget used the old indirect cost rates to calculate the transfer from administrative and general expenses to capital of all overheads during the fiscal year. The estimated transfer was $9 million. The recommended change in indirect cost rates reduces this transfer to an estimated$6 million. See the revised budget for FY 2004 attached to this memo. The$3 million shim affects net income and capital expenditures. ate a-, 141h,c Page 31 Preliminary—Subject to Board Approval MINUTES OF THE BOARD OF COMMISSIONERS' SPECIAL MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, July 8, 2003 The Board of Commissioners met in a Special Meeting in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Ronald C. Callen,Nancy W. Duncan, Tim Haggart, Ifield P. Joseph(arrived at 5:35 p.m.), Comue Marin, Diane R. Royal, Robin M. Smith, and Nancy A. Wonch. Absent: None. The Acting Secretary declared a quorum present. Chair Callen called the meeting to order at 5:30 p.m. APPROVAL OF MINUTES Motion made by Commissioner Royal, seconded by Commissioner Marin, to approve the minutes of the regular meeting held May 27, 2003. Carried unanimously. Motion made by Commissioner Royal, seconded by Commissioner Duncan, to approve the minutes of the special meeting held June 7, 2003. Carried unanimously. Motion made by Commissioner Royal, seconded by Commissioner Wonch, to approve the minutes of the special meeting held June 10, 2003. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON THE SUBJECT OF THE SPECIAL MEETING. Page 32 Special Meeting July 8,2003 Director of Communications John Strickler introduced and thanked Police Chief Mark Alley for his role as chair of the HOPE Scholarship Fund. This fund provides scholarships to attend Lansing Community College to Lansing middle school students if they promise to stay in school and make good grades. Board Chair Ron Callen presented a check in the amount of$14,247.69 to Chief Alley. The check represents half the proceeds from this year's Chili Cook-Off. Chief Alley stated that to date they have raised$1.7 million towards the goal of$2.5 million. Several of the Commissioners commended Chief Alley on the excellent program that is benefiting young people. COMMUNICATIONS Letter from City Council President Carol Wood congratulating BWL on the public reception for the five general manager finalists. Letter from Judy Hedlund expressing concern about tree trimming in Hunter's Orchard Park. Received and placed on file. Commissioner Wonch questioned whether the BWL has been in contact with Ms. Hedlund and whether the tree in question was trimmed more than it needed to be. Manager of System Integrity and Customer Projects Doug Wood noted no written response has been made to Ms. Hedlund's letter of June 23, 2003; conversation has been held with Ms. Hedlund's father, the owner of the property. Mr. Hunter donated a portion of the property to the township for park use. Mr. Wood stated that the trimming was done in accordance with standards used for trimming. The issue of clean-up was addressed with Wright Tree Service. On the park property, Wright did more trimming than was originally communicated. The Commissioners expressed concern that we could be facing similar problems that were prevalent with the former tree service, those being the attitude of tree trimmers toward the customers, disregard for property owners, and communication with the property owners. According to Mr. Wood, when the customer is concerned about the trimming of trees on their property, they are to contact the BWL forester. In communicating with customers, the forester needs to make sure that the concerns of the property owners are being heard and communicated to Wright Tree Service. Commissioner Callen asked that the Commissioners be updated on the outcome of this issue, and be informed of what will be done to avoid a similar situation in the fiiture. EXECUTIVE COMMITTEE Commissioners Present: Ron Callen, Nancy Duncan and Diane Royal. Staff Present: Interim General Manager John Elashkar, Director of Metrics and Audits Kellie Willson, and Corporate Secretary Mary Sova. The Executive Committee met on June 20, 2003 at 1:30 p.m. to discuss the framework of an Employment Agreement for the new Director and General Manager of the Board of Water and Light. Special Meeting Page 33 July 8,2003 The structure of the employment agreement will be based on the following: • Employment Term • Compensation • Housing Incentive • Moving Expenses • Benefits -Paid Time Off -DC Pension Plan - Group Life and Health Insurance -Dental -Flexible Spending Account -Deferred Compensation - Other disability insurance plans and employee welfare benefits made available generally to management employees of the BWL -Vacation -Automobile - Club Memberships • Reimbursement of Expenses • Termination • Disputes • Duties Once a final Employment Agreement is negotiated with Sanford B. Novick, it will be submitted to the Board for approval. There being no further business, the meeting adjourned at 2:30 p.m. Respectfully submitted, Ronald C. Callen, Chair Motion made by Commissioner Wonch, seconded by Commmissioner Marin, to approve the minutes of the Executive Committee Meeting held June 20, 2003. Carried unanimously. Resolution 2003-7-1 AMEND BOARD RESOLUTION 2003-6-8 AND EXTEND THE TIME TO NEGOTIATE AN EMPLOYMENT AGREEMENT WITH SANFORD NOVICK WHEREAS, the negotiation of the General Manager Employment Agreement with Mr. Sanford Novick has been delayed because of his travel, and WHEREAS, the Executive Committee and Mr. Sanford Novick have been negotiating in good faith. Page 34 Special Meeting July 8,2003 NOW THEREFORE BE IT RESOLVED, That the Board Resolution#2003-6-8 be amended to authorize the Executive Committee to continue the negotiation with Mr. Novick until a mutually satisfactory agreement is reached, but in any event no later than August 1, 2003. Moved by Commissioner Duncan, seconded by Commissioner Marin, on the approval of the Resolution to Amend Board Resolution #2003-6-8 and Extend the Time to Negotiate an Employment Agreement with Sanford Novick(Resolution #2003-7-1). Discussion: Commissioners expressed concern over the length of time it is taking for an agreement to be reached with Mr. Novick. General Manager Elashkar reported that he faxed the Employment Agreement to Mr. Novick on July 3; Mr. Novick sent it to a friend for review. He also reported that Mr. Novick will be in Lansing the week of July 21 and will bring the employment agreement with him. Commissioner Callen said he has talked with Mr. Novick and that agreement in principle has been reached with Mr. Novick, and he will begin employment in August, 2003. The Commissioners asked that the process be expedited. General Manager Elashkar agreed to contact Mr. Novick and convey the wishes of the Board. The Board would like to have final approval of the agreement at the Board Meeting on July 22. Action: Carried unanimously. Resolution 2003-7-2 AMEND BOARD RESOLUTION 2002-10-5 TO EXTEND THE EMPLOYMENT TERM OF THE INTERIM GENERAL MANAGER WHEREAS, Board Resolution#2002-10-5 authorized the Executive Committee to negotiate an Employment Agreement with the Interim General Manager, and WHEREAS, the Tenn of the Employment Agreement with the Interim General Manager expired on July 1, 2003, and WHEREAS, the Employment Agreement with the new General Manager has not been negotiated and the new General Manager hired. NOW THEREFORE BE IT RESOLVED, That the Board authorizes the Executive Committee to negotiate with the Interim General Manager a mutually agreed upon extension to the Term of the Employment Agreement. Moved by Commissioner Wonch, seconded by Commissioner Royal, on the approval of the Resolution to Amend Board Resolution #2002-10-5 to Extend the Employment Term of the Interim General Manager (Resolution #2003-7-2). Action: Carried unanimously. Residential Customer Survey. Communications Director John Strickler presented the results of the Residential Customer Survey. The customer survey is conducted by Market Strategies, Inc. (MSI), a marketing research group based in Livonia. MSI surveys a large number of electric and Special Meeting Page 35 July 8,2003 gas utility customers; they are able to give good benchmark data so that BWL can compare itself with other electric utilities. MSI surveys approximately 70 utilities, most are investor owned and some are public utilities. The survey showed modest improvements from 2002 in Favorability. The BWL compares favorably in electric rate perception and customer service. CATEGORY ELECTRIC WATER RATING Overall Satisfaction 86 79 T from 2002 Favorability 80 T from 2002 Value of product delivered 86 85 T from 2002 Reasonableness of rates 77 75 electric =- water T from 2002 Reliable service 93 93 electric = - water from 2002 Restoration 87 76 T from 2002 Service reputation 83 85 T from 2002 Twenty-two percent of customers surveyed indicated they would consider leaving the BWL if another utility was available that offered the same rates as the BWL. This is of concern, yet is consistent with past surveys. It underscores the importance to keep BWL rates 10% below our competition. Commissioners expressed a concern on the number of African/Americans surveyed. It was noted that the number of minorities surveyed is not an accurate representation of our demographics. The survey indicated that customers are pleased with the telephone and walk-in service provided by the BWL, knowledge of employees in responding to their billing concerns, and the readability of BWL bills. MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Office of the Corporate Secretary. Resolution 2003-7-3 CLEAN AIR ACID PROGRAM WHEREAS, the BWL as a regulated source, desires to comply with the Clean Air Act Acid Rain program which regulates emissions of pollutants such as sulfur dioxide (S02) and Nitrogen Oxides (NOx); and WHEREAS, the BWL is required to maintain a reliable supply of electricity sufficient to serve the needs of its customers; and WHEREAS, the BWL desires to utilize the most cost-effective strategy of complying with air emission limits for regulated sources while maintaining a reliable supply of electricity to its customers; and WHEREAS, the purchase, sale and trade of emission allowances is deemed to be a cost effective strategy of complying with the Clean Air Act; and Page 36 Special Meeting July 8, 2003 WHEREAS, the BWL Board of Commissioners have appointed a Designated Representative and Alternate Designated Representative who are authorized to legally bind the BWL in matters pertaining to the Acid Rain program; and WHEREAS, the General Manager, after consultation with the Designated Representative and Alternate Designated Representative, desires to establish guidelines for the purchase, sale and trade of emission allowances and to make such purchases, sales and trades of allowances as necessary to maintain a reliable supply of electricity for its customers. RESOLVED, That the Board of Commissioners authorizes the General Manager to establish guidelines for the purchase, sale and trades of emission allowances and to make such purchases, sales and trades of emission allowance as necessary to maintain a reliable supply of electricity to its customers and comply with the Clean Air Act in a cost effective manner. Moved by Commissioner Wonch, seconded by Commissioner Duncan, on the approval of the Resolution on the Clean Air Acid Program (Resolution #2003-7-3). Discussion: A quarterly report will be given to the Commissioners on what was sold and traded. Action: Carried unanimously. Resolution 2003-7-4 RELEASE OF EASEMENT NO LONGER NEEDED FOR OPERATIONS OF BOARD OF WATER AND LIGHT WHEREAS, Donald R. DuCharme and Marlene DuCharme, husband and wife granted an easement to the City of Lansing, a Michigan municipal corporation and the Board of Water and Light forever, such rights as recorded in Liber 514 of Miscellaneous Records, Page 983-5, in the Register of Deeds, Eaton County, Michigan, July 14, 1976; and, WHEREAS, Dennis M. and Diana L. McPhee, husband and wife, the new land owners of Parcel 7, Original Plat, Delta Township, Eaton County, Michigan have requested the release of the easement, more specifically described as follows: Proper Description: The West 68.73 acres, more or less, of the East fraction of the Southwest fractional quarter (1/4) of Section 4, Town 4 North, Range 3 West, Delta Township, Eaton County, Michigan, except that parcel of the said East fraction commencing at the Southwest corner of said East fraction of the Southwest fractional '/4; thence N00°29'05"W, 716 feet; thence N89°29'35"E, 487 feet; thence S00°29'05"E, 716 feet; thence S89°29'35"W, 487 feet to the place of beginning. Easement Description: Beginning at a point N89°29'35"E, 1320.18 feet and N00°29'05" W, 716.0 feet from the Southwest corner of Section 4, Town 4 North, Range 3 West, Delta Township, Eaton County,Michigan; thence N89°29'35"E 487.0 feet; thence S00°29'05"E, 666.0 feet; thence N89°29'35"E, 20.0 feet; thence N00° 29'05"W, 686.0 feet; thence S89°29'35"W, 487.0 feet; thence N00°29'05" W to the bank of the Grand River; thence Southwesterly along the Special Meeting Page 37 July 8,2003 bank of the Grand River to the West property line; thence S00°29'05" E to the point of beginning. WHEREAS, this easement is not needed for the operations of the Board of Water and Light. NOW THERFORE BE IT RESOLVED, That the Board of Commissioners of the Board of Water and Light release, discharge and vacate the easement on the above described property and that the Mayor of Lansing is authorized to execute the release of easement, subject to the approval of Lansing City Council. Further that the Corporate Secretary be directed to record the release of easement with the Eaton County Register of Deeds. -------------------- Stag Remarks: Dennis M. and Diana L. McPhee, requests that the Board of Water and Light vacate this general easement that is no longer needed. Moved by Commissioner Joseph, seconded by Cominissioner Marin, on the approval of the Resolution to Release an Easement no longer needed for Operations of the Board of Water and Light (Resolution #2003-7-4). Discussion: There will be no cost to the BWL. Action: Carried unanimously. Resolution 2003-7-5 BUDGET MODIFICATIONS —ERICKSON STATION WESTERN COAL CONVERSION AND ECKERT STATION NOx COMPLIANCE PHASE 2 PROJECT RESOLVED, That the budget for the Erickson Station Western Coal Conversion, Phase 1 &2 Project(Proj. No. 99-106) be increased from $20,705,000 to $25,725,000. This project includes modifications to safely and efficiently burn Powder River Basin(PRB) coal and install overfire air. These modifications will reduce Plant NOx emissions to comply with Clean Air Act (CAA) Regulations and reduce fuel costs. The increased budget costs are due to required modifications not included in the original project scope, and actual equipment and material costs and estimated installation costs, which exceed original estimates. The original project budget was developed by staff utilizing a Western Coal Conversion Study completed by Sargent & Lundy in 1997. BE IT FURTHER RESOLVED, That the budget for the Eckert Station NOx Compliance Phase 2 Project (Proj. No. 02-130)be decreased from $4,275,000 to $3,275,000. This project includes overfire air installations and burner modifications on each boiler for Eckert Units 1 — 6. These modifications will reduce Plant NOx emissions to comply with the CAA Regulations. To date the overfire air and burner modifications have been completed on four of the six Eckert boilers. Costs have been less than the original budget and the full load NOx emissions reduced more than the original project projections. -------------------- Page 38 Special Meeting July 8,2003 Staff Remarks: These recommended budget changes increase the total cost for both projects from $24,980,000 to $29,000,000 or approximately a 15% increase. The BWL NOx Reduction Strategy proforma completed in January 2002 estimated a 15 years present worth of$9,006,584 (included both Projects 99-106 and 02-130). The proforma included projections for capital costs, future generation levels, PRB fuel cost reductions, MDEQ NOx allowances, NOx reductions using PRB coal, NOx reductions for overfire air and burner modifications and the purchase cost for NOx allowances. Based on the total capital cost increase of$4,020,000 the proforma for 15 years present worth is reduced from $9,006,584 to $5,301,935. This is the only remaining viable alternative that had a positive present worth in the initial proforma. In accordance with the original NOx Reduction Strategy, staff will continue to evaluate remaining work to identify areas where these cost increases can be minimized. -------------------- Moved by Commissioner Duncan, seconded by Commissioner Wonch, on the approval of the Resolution for Budget Modifications—Erickson Station Western Coal Conversion and Eckert Station NOx Compliance Phase 2 Project (Resolution #2003-7-5). Discussion: The Commissioners questioned what will be done differently in the future to assure more accurate estimates. General Manager Elashkar reported that he has been working to improve the capital project process and associated controls. Action: Carried unanimously. Resolution 2003-7-6 SALE OF REAL PROPERTY— 1016 HEALD PLACE WHEREAS, the following parcel, located at 1016 Heald Place, in the City of Lansing, is no longer needed for the operation of the Board of Water and Light. Description: Lot 5, Block 13, of"Lansing Improvement Company's Addition to the City of Lansing, Michigan", L. 2, P. 14 of Ingham County, Michigan Plats. A drawing of the parcel is shown in the attached Exhibit"A" NOW THEREFORE BE IT RESOLVED, That the General Manager and Corporate Secretary are authorized to sign all documents necessary to convey this parcel to Frook Plumbing & Mechanical, Inc. for the sum of$12,000. FURTHER RESOLVED, That this sale is expressly conditioned upon the following: Approval of the Lansing City Council and compliance with any other limitations contained in the Lansing City Charter or Codified Ordinances of the City of Lansing. Staff Remarks: In the past, the BWL utilized this property for a well site which contained Well 30-07. This well was abandoned and plugged in June 2002 due to contamination of the groundwater in the area. This parcel was identified in a FY2002 study as property no longer needed for BWL purposes and listed for consideration of future disposal. As the adjacent Special Meeting Page 39 July 8,2003 property owner on both sides of this parcel, Frook Plumbing &Mechanical, Inc. has expressed an interest in purchasing this parcel. The $12,000 price was arrived at as follows: Appraised value of the property $ 5,000 BWL make ready costs (estimated) $ 4,500 Cost of appraisal $ 1,500 Misc. BWL overhead costs $ 1,000 Proposed sale value or cost $12,000 Moved by Commissioner Wonch, seconded by Commissioner Duncan, on the approval of the Resolution for Sale of Real Property (Resolution #2003-7-6). Action: Carried unanimously. Informational Item—BWL Property on Grand Avenue. Commissioner Callen asked why the BWL is leasing two parking lots on Grand Avenue to Lansing Community College rather than selling the property. General Manager Elashkar responded that Triangle LLC has an option to purchase this property, so the BWL cannot sell it. LCC understands that the property may be sold. NEW BUSINESS None. MANAGER'S REMARKS Restructuring Chilled Water Debt. General Manager John Elashkar reported on one item on the Finance Committee Agenda. The BWL is proceeding with restructuring the chilled water debt to pre-refund bonds to take advantage of low interest rates. As of July 8, 2003, the rate of interest was 3.7% as compared to the 4.1% shown on the agenda. This should reduce the debt service on the chilled water bonds by about $lmillion per year. COMMISSIONERS' COMMENTS Commissioner Joseph commented on the APPA Conference he recently attended. He enjoyed the wealth of experiences and thanked the BWL for the opportunity to attend this function. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT. No one spoke. Page 40 Special Meeting July 8, 2003 EXCUSED ABSENCE None. Commissioner Joseph left at 6:40 PM. CLOSED SESSION Moved by Commissioner Royal, seconded by Commissioner Marin, that the Board convene in Closed Session to discuss pending litigation(6:40 p.m.). Action: Adopted by roll call vote: Yeas: Commissioners Callen, Duncan, Haggart, Marin, Royal, Smith and Wonch. Nays: None Abstentions: None Absent: Commissioner Joseph. OPEN SESSION The Board returned to open session at 8:10 p.m. Resolution 2003-7-7 LAWSUIT OF JOSEPH PANDY, JR. At a special meeting of the Board of Commissioners of the Lansing Board of Water& Light held on Tuesday, July 8, 2003, the following resolution was offered by Commissioner Tian Haggart and seconded by Commissioner Connie Mann. WHEREAS, on September 10, 2002, the Board of Commissioners determined not to continue the employment of the then acting General Manager, Joseph Pandy, Jr., and WHEREAS, at the time, the Board of Commissioners chose not to publicly state in a formal resolution the reasons for the Board's determination to end Mr. Pandy's employment relationship so as to avoid a public discourse that could impair the former General Manager's future opportunities and since, as an "at-will" employee, no specific reasons were required to be stated, and WHEREAS, upon discovery of additional bases that supported the Board of Commissioners' September 10, 2002 action, the Board saw no reason for formal action on those bases for the reasons previously stated herein, and WHEREAS, Mr. Pandy has now filed a lawsuit against the Lansing Board of Water & Light ("LBWL") that challenges the Board of Commissioners' action on September 10, 2002, which lawsuit asserts, in part, that Mr. Pandy's employment was terminated without cause, and Special Meeting Page 41 July 8, 2003 WHEREAS, cause for termination of Mr. Pandy's employment existed at the time of his termination and was also evidenced by facts discovered after September 10, 2002. THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS AS FOLLOWS: 1. Although the Board of Commissioners firmly believes that the General Manager served "at will," on and before September 10, 2002, cause existed that warranted the termination of Mr. Joseph Pandy, Jr. and such cause constituted willful gross misconduct that was seriously injurious to the LBWL. Further, subsequent to September 10, 2002, the Board of Commissioners learned of additional conduct by Mr. Pandy that would also constitute cause for his termination. 2. The facts that the Board of Commissioners finds constituted cause for Mr. Pandy's termination generally include, but are not limited to, the following: A. Mr. Pandy directed that significant contracts for the provision of water service be executed that contained terms and rates that were injurious to the interests of the LBWL and its customers. B. Mr. Pandy directed that significant contracts for the provision of chilled water service be executed that contained terms and rates that were injurious to the interests of the LBWL and its customers. Mr. Pandy's acts in this regard were particularly egregious because his choice of technology to be used was more expensive to install and operate thereby subjecting the LBWL and its customers to unnecessary cost and continuing expense. C. Mr. Pandy committed breaches of trust by withholding information fiom the Board of Commissioners, failing to disclose critical information on matters before the LBWL, and failing to properly research critical issues, all of which jeopardized the Board of Commissioners' ability to fulfill its duty to the LBWL and its customers. D. Mr. Pandy jeopardized and attempted to thwart the internal audit functions of the LBWL by withholding information from the LBWL's internal auditor, by failing to notify the internal auditor of facts critical to her responsibilities, and then engaging in a practice of intimidation when the internal auditor disagreed with Mr. Pandy's actions. E. Mr. Pandy undermined the human resources function at the LBWL by directly interfering in that function and intimidating those who disagreed with his actions. F. Mr. Pandy violated the LBWL's Internet Use policies by sending and receiving highly inappropriate e-mails. These actions were not only in direct violation of LBWL's policies, they exposed the LBWL to potential liability and injury to the LBWL's reputation that would be contrary to the LBWL's responsibilities to its customers. Page 42 Special Meeting July 8,2003 G. Mr. Pandy allowed to exist within certain parts of the administration of the LBWL a serious lack of internal controls that led to misuse or unaccounted or unaccountable expenditures of LBWL funds. H. Mr. Pandy fostered an environment where favoritism was practiced in violation of the LBWL policies. I. Mr. Pandy failed to carry out Board of Commissioners' directives. J• Mr. Pandy created a climate within the LBWL that deteriorated employee morale, increased labor relations strife, marginalized employees who raised questions, caused key employees to leave or threaten to leave their employment with the LBWL, created potential liability for the LBWL, and demonstrated a lack of the leadership necessary for an organization with critical responsibilities to the citizens of Lansing and to its customers. Moved by Commissioner Haggart, seconded by Commissioner Duncan, on the approval of the Resolution on the Lawsuit of Joseph Pandy, Jr. (Resolution #2003-7-7). Discussion: After lengthy discussion, the above resolution was adopted. Action: Carried unanimously. ADJOURNMENT On motion by Commissioner Wonch, seconded by Commissioner Haggart, the meeting adjourned at 8:40 p.m. Is/Mary E. Sova, Secretary Filed with Lansing City Clerk July 16, 2003 Page 31 Preliminary—Subject to Board Approval MINUTES OF THE BOARD OF COMMISSIONERS' SPECIAL MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, July 8, 2003 The Board of Commissioners met in a Special Meeting in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing,Michigan. Present: Commissioners Ronald C. Callen, Nancy W. Duncan, Tim Haggart, Ifield P. Joseph(arrived at 5:35 p.m.), Connie Marin, Diane R. Royal, Robin M. Smith, and Nancy A. Wonch. Absent: None. The Acting Secretary declared a quorum present. Chair Callen called the meeting to order at 5:30 p.m. APPROVAL OF MINUTES Motion made by Commissioner Royal, seconded by Commissioner Marin; to approve the minutes of the regular meeting held May 27, 2003. Carried unanimously. Motion made by Commissioner Royal, seconded by Commissioner Duncan, to approve the minutes of the special meeting held June 7, 2003. Carried unanimously. Motion made by Commissioner Royal, seconded by Commissioner Wonch, to approve the minutes of the special meeting held June 10, 2003. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON THE SUBJECT OF THE SPECIAL MEETING. Page 32 Special Meeting July 8, 2003 Director of Communications John Strickler introduced and thanked Police Chief Mark Alley for his role as chair of the HOPE Scholarship Fund. This fund provides scholarships to attend Lansing Community College to Lansing middle school students if they promise to stay in school and snake good grades. Board Chair Ron Callen presented a check in the amount of$14,247.69 to Chief Alley. The check represents half the proceeds from this year's Chili Cook-Off. Chief Alley stated that to date they have raised$1.7 million towards the goal of$2.5 million. Several of the Commissioners commended Chief Alley on the excellent program that is benefiting young people. COMMUNICATIONS Letter fiom City Council President Carol Wood congratulating BWL on the public reception for the five general manager finalists. Letter fiom Judy Hedlund expressing concern about tree trimming in Hunter's Orchard Park. Received and placed on file. Commissioner Wonch questioned whether the BWL has been in contact with Ms. Hedlund and whether the tree in question was trimmed more than it needed to be. Manager of System Integrity and Customer Projects Doug Wood noted no written response has been made to Ms. Hedlund's letter of June 23, 2003; conversation has been held with Ms. Hedlund's father, the owner of the property. Mr. Hunter donated a portion of the property to the township for park use. Mr. Wood stated that the trimming was done in accordance with standards used for trimming. The issue of clean-up was addressed with Wright Tree Service. On the park property, Wright did more trimming than was originally communicated. The Commissioners expressed concern that we could be facing similar problems that were prevalent with the fonner tree service, those being the attitude of tree trimmers toward the customers, disregard for property owners, and communication with the property owners. According to Mr. Wood, when the customer is concerned about the trimming of trees on their property, they are to contact the BWL forester. In communicating with customers, the forester needs to make sure that the concerns of the property owners are being heard and communicated to Wright Tree Service. Commissioner Callen asked that the Commissioners be updated on the outcome of this issue, and be informed of what will be done to avoid a similar situation in the future. EXECUTIVE COMMITTEE Commissioners Present: Ron Callen, Nancy Duncan and Diane Royal. Staff Present: Interim General Manager John Elashkar, Director of Metrics and Audits Kellie Willson, and Corporate Secretary Mary Sova. The Executive Committee met on June 20, 2003 at 1:30 p.m. to discuss the framework of an Employment Agreement for the new Director and General Manager of the Board of Water and Light. Special Meeting Page 33 July 8,2003 The structure of the employment agreement will be based on the following: • Employment Term • Compensation • Housing Incentive • Moving Expenses • Benefits -Paid Time Off -DC Pension Plan - Group Life and Health Insurance -Dental -Flexible Spending Account - Deferred Compensation - Other disability insurance plans and employee welfare benefits made available generally to management employees of the BWL -Vacation - Automobile - Club Memberships • Reimbursement of Expenses • Termination • Disputes • Duties Once a final Employment Agreement is negotiated with Sanford B. Novick, it will be submitted to the Board for approval. There being no further business, the meeting adjourned at 2:30 p.m. Respectfully submitted, Ronald C. Callen, Chair Motion made by Commissioner Wonch, seconded by Commissioner Marin, to approve the minutes of the Executive Committee Meeting held June 20, 2003. Carried unanimously. Resolution 2003-7-1, AMEND BOARD RESOLUTION 2003-6-8 AND EXTEND THE TIME TO NEGOTIAT AN EMPLOYMENT AGREEMENT WITH SANFORD NOVICK WHEREAS, the negotiation of the General Manager Employment Agreement with Mr. Sanford Novick has been delayed because of his travel, and WHEREAS, the Executive Committee and Mr. Sanford Novick have been negotiating in good faith. Page 34 Special Meeting July 8,2003 NOW THEREFORE BE IT RESOLVED, That the Board Resolution#2003-6-8 be amended to authorize the Executive Committee to continue the negotiation with Mr. Novick until a mutually satisfactory agreement is reached, but in any event no later than August 1, 2003. Moved by Commissioner Duncan, seconded by Commissioner Marin, on the approval of the Resolution to Amend Board Resolution #2003-6-8 and Extend the Time to Negotiate an Employment Agreement with Sanford Novick(Resolution #2003-7-1). Discussion: Commissioners expressed concern over the length of time it is taking for an agreement to be reached with Mr. Novick. General Manager Elashkar reported that he faxed the Employment Agreement to Mr. Novick on July 3; Mr. Novick sent it to a fiend for review. He also reported that Mr. Novick will be in Lansing the week of July 21 and will bring the employment agreement with him. Commissioner Callen said he has talked with Mr. Novick and that agreement in principle has been reached with Mr. Novick, and he will begin employment in August, 2003. The Commissioners asked that the process be expedited. General Manager Elashkar agreed to contact Mr. Novick and convey the wishes of the Board. The Board would like to have final approval of the agreement at the Board Meeting on July 22. Action: Carried unanimously. Resolution 2003-7-2 AMEND BOARD RESOLUTION 2002-10-5 TO EXTEND THE EMPLOYMENT TERM OF THE INTERIM GENERAL MANAGER WHEREAS, Board Resolution#2002-10-5 authorized the Executive Committee to negotiate an Employment Agreement with the Interim General Manager, and WHEREAS, the Term of the Employment Agreement with the Interim General Manager expired on July 1, 2003, and WHEREAS, the Employment Agreement with the new General Manager has not been negotiated and the new General Manager hired. NOW THEREFORE BE IT RESOLVED, That the Board authorizes the Executive Committee to negotiate with the Interim General Manager a mutually agreed upon extension to the Term of the Employment Agreement. Moved by Commissioner Wonch, seconded by Commissioner Royal, on the approval of the Resolution to Amend Board Resolution #2002-10-5 to Extend the Employment Term of the Interim General Manager (Resolution #2003-7-2). Action: Carried unanimously. Residential Customer Survey. Communications Director John Strickler presented the results of the Residential Customer Survey. The customer survey is conducted by Market Strategies, Inc. (MSI), a marketing research group based in Livonia. MSI surveys a large number of electric and Special Meeting Page 35 July 8,2003 gas utility customers; they are able to give good benchmark data so that BWL can compare itself with other electric utilities. MSI surveys approximately 70 utilities,most are investor owned and some are public utilities. The survey showed modest improvements from 2002 in Favorability. The BWL compares favorably in electric rate perception and customer service. CATEGORY ELECTRIC WATER RATING Overall Satisfaction 86 79 T from 2002 Favorability 80 T from 2002 Value of product delivered 86 85 T from 2002 Reasonableness of rates 77 75 electric =-water T from 2002 Reliable service 93 93 electric = -water from 2002 Restoration 87 76 T from 2002 Service reputation 83 85 T from 2002 Twenty-two percent of customers surveyed indicated they would consider leaving the BWL if another utility was available that offered the same rates as the BWL. This is of concern, yet is consistent with past surveys. It underscores the importance to keep BWL rates 10%below our competition. Commissioners expressed a concern on the number of African/Americans surveyed. It was noted that the number of minorities surveyed is not an accurate representation of our demographics. The survey indicated that customers are pleased with the telephone and walk-in service provided by the BWL,knowledge of employees in responding to their billing concerns, and the readability of BWL bills. MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Off ce of the Corporate Secretary. Resolution 2003-7-3 CLEAN AIR ACID PROGRAM WHEREAS, the BWL as a regulated source, desires to comply with the Clean Air Act Acid Rain program which regulates emissions of pollutants such as sulfur dioxide (S02) and Nitrogen Oxides (NOx); and WHEREAS, the BWL is required to maintain a reliable supply of electricity sufficient to serve the needs of its customers; and WHEREAS, the BWL desires to utilize the most cost-effective strategy of complying with air emission limits for regulated sources while maintaining a reliable supply of electricity to its customers; and WHEREAS, the purchase, sale and trade of emission allowances is deemed to be a cost effective strategy of complying with the Clean Air Act; and Page 36 Special Meeting July 8, 2003 WHEREAS, the BWL Board of Commissioners have appointed a Designated Representative and Alternate Designated Representative who are authorized to legally bind the BWL in matters pertaining to the Acid Rain program; and WHEREAS, the General Manager, after consultation with the Designated Representative and Alternate Designated Representative, desires to establish guidelines for the purchase, sale and trade of emission allowances and to make such purchases, sales and trades of allowances as necessary to maintain a reliable supply of electricity for its customers. RESOLVED, That the Board of Commissioners authorizes the General Manager to establish guidelines for the purchase, sale and trades of emission allowances and to make such purchases, sales and trades of emission allowance as necessary to maintain a reliable supply of electricity to its customers and comply with the Clean Air Act in a cost effective manner. Moved by Commissioner Wonch, seconded by Commissioner Duncan, on the approval of the Resolution on the Clean Air Acid Program (Resolution #2003-7-3). Discussion: A quarterly report will be given to the Commissioners on what was sold and traded. Action: Carried unanimously. Resolution 2003-7-4 RELEASE OF EASEMENT NO LONGER NEEDED FOR OPERATIONS OF BOARD OF WATER AND LIGHT WHEREAS, Donald R. DuCharme and Marlene DuCharme, husband and wife granted an easement to the City of Lansing, a Michigan municipal corporation and the Board of Water and Light forever, such rights as recorded in Liber 514 of Miscellaneous Records, Page 983-5, in the Register of Deeds, Eaton County, Michigan, July 14, 1976; and, WHEREAS,Dennis M. and Diana L. McPhee, husband and wife, the new land owners of Parcel 7, Original Plat, Delta Township, Eaton County, Michigan have requested the release of the easement, more specifically described as follows: Property Description: The West 68.73 acres, more or less, of the East fraction of the Southwest fractional quarter(1/4) of Section 4, Town 4 North, Range 3 West, Delta Township, Eaton County, Michigan, except that parcel of the said East fraction commencing at the Southwest corner of said East fraction of the Southwest fractional %4; thence N00°29'05"W, 716 feet; thence N89029'35"E, 487 feet; thence S00°29'05"E, 716 feet; thence S89°29'35"W, 487 feet to the place of beginning. Easement Description: Beginning at a point N89°29'35"E, 1320.18 feet and N00°29'05" W, 716.0 feet from the Southwest corner of Section 4, Town 4 North, Range 3 West, Delta Township, Eaton County, Michigan; thence N89°29'35"E 487.0 feet; thence S00°29'05"E, 666.0 feet; thence N89°29'35"E, 20.0 feet; thence N00° 29'05"W, 686.0 feet; thence S89°29'35" W, 487.0 feet; thence N00°29'05"W to the bank of the Grand River; thence Southwesterly along the Page 37 Special Meeting July 8,2003 bank of the Grand River to the West property line; thence S00029'05" E to the point of beginning. WHEREAS,this easement is not needed for the operations of the Board of Water and Light. NOW THERFORE BE IT RESOLVED,That the Board of Commissioners of the Board of Water and Light release, discharge and vacate the easement o the ea above easement,describedsubject pro e rty and that the Mayor of Lansing is authorized to execute the approval of Lansing City Council. Further that the er of Deeds.toSecretary be directed to record the release of easement with the Eaton County Regis -------------------- Staff Remarks: Dennis M. and Diana L. McPhee, requests that the Board of Water and Light vacate this general easement that is no longer need Moved by Commissioner Joseph, seconded by Commissioner Marin, on the approval of the Resolution to Release an Easement no longer needed for Operations of the Board of Water and Light (Resolution #2003-7-4). Discussion: There will be no cost to the BWL. Action: Carried unanimously. Resolution 2003-7-5 BUDGET MODIFICATIONS T—EICKSON STATION WESTERN STA O AL CONVERSION AND T O PHASE NOx COMPLIANCE AS ECKER E 22 PROJECT udget for the Erickson Station Western Coal Conversion, Phase 1 &2 RESOLVED, That the bprojec Project (Proj. No. 99-106) be increased from $20,70R River to sin(P B) coal and install overfire modifications to safely and efficiently burn Powder River Basin ply w ith n Air Act (CAA) air. These modifications will reduce Plant NOx em issionscost to s are due to required modifications Regulations and reduce fuel costs. The increased budget not included in the original project scope, and actual equipment original nala project t budget was developed estimatedterial costs and installation costs, which exceed original estimates. p by staff utilizing a Western Coal Conversion Study completed by Sargent & Lundy in 1997. BE IT FURTHER RESOLVED, That the budget for the to Eckert Station NOx Ox project lia in ludesce e 2 Project(Prof.No. 02-130)be decreased from $4,275, 000 overfire air installations and burner modifications o ona W°th the CAA Regulations or Eckert Units I — 6.To date modifications will reduce Plant NOx emissionscomply the overfire air and burner modifications have been d the full pleted on P load NOxour em�ssions reduced moref the six Eckert ethan Costs have been less than the original budget an the original project projections -------------------- a Page 38 Special Meeting July 8,2003 StaffRemarks: These recommended budget changes increase the total cost for both projects from $24,980,000 to $29,000,000 or approximately a 15% increase. The BWL NOx Reduction Strategy proforma completed in January 2002 estimated a 15 years present worth of$9,006,584 (included both Projects 99-106 and 02-130). The profonna included projections for capital costs, future generation levels, PRB fuel cost reductions, MDEQ NOx allowances, NOx reductions using PRB coal, NOx reductions for overfire air and burner modifications and the purchase cost for NOx allowances. Based on the total capital cost increase of$4,020,000 the proforma for 15 years present worth is reduced from $9,006,584 to $5,301,935. This is the only remaining viable alternative that had a positive present worth in the initial proforma. In accordance with the original NOx Reduction Strategy, staff will continue to evaluate remaining work to identify areas where these cost increases can be minimized. -------------------- Moved by Commissioner Duncan, seconded by Commissioner Wonch, on the approval of the Resolution for Budget Modifications—Erickson Station Western Coal Conversion and Eckert Station NOx Compliance Phase 2 Project (Resolution #2003-7-5). Discussion: The Commissioners questioned what will be done differently in the fixture to assure more accurate estimates. General Manager Elashkar reported that he has been working to improve the capital project process and associated controls. Action: Carried unanimously. Resolution 2003-7-6 SALE OF REAL PROPERTY— 1016 HEALD PLACE WHEREAS, the following parcel, located at 1016 Heald Place, in the City of Lansing, is no longer needed for the operation of the Board of Water and Light. Demotion: Lot 5, Block 13, of"Lansing Improvement Company's Addition to the City of Lansing, Michigan", L. 2, P. 14 of Ingham County, Michigan Plats. A drawing of the parcel is shown in the attached Exhibit "A" NOW THEREFORE BE IT RESOLVED, That the General Manager and Corporate Secretary are authorized to sign all documents necessary to convey this parcel to Frook Plumbing& Mechanical, Inc. for the sum of$12,000. FURTHER RESOLVED, That this sale is expressly conditioned upon the following: Approval of the Lansing City Council and compliance with any other limitations contained in the Lansing City Charter or Codified Ordinances of the City of Lansing. StaffRemarks: In the past, the BWL utilized this property for a well site which contained Well 30-07. This well was abandoned and plugged in June 2002 due to contamination of the groundwater in the area. This parcel was identified in a FY2002 study as property no longer needed for BWL purposes and listed for consideration of future disposal. As the adjacent Page 39 Special Meeting July 8,2003 property owner on both sides of this parcel, Frook Plumbing m Mechanical,t follows has expressed an interest in purchasing this parcel. The $12,000 puce Appraised value of the property $ 5,000 BWL make ready costs (estimated) $ 4,500 Cost of appraisal $ 1,500 Misc. BWL overhead costs $ 1,000 Proposed sale value or cost $12,000 Moved by Commissioner Wonch, seconded by Commissioner 6 Duncan, on the approval of the Resolution for Sale of Real Property (Resolution #_00 Action: Carried unanimously. Informational Item—BWL Property on Grand AvenuCommissioner College Callen s rather by the BWL is leasing two parking lots on Grand Avenue to Lansing selling the property. General Manager Elashkar respCC understands that the property may beonded that Triangle LLC has an opon purchase this property, so the BWL cannot sell it. L sold. NEW BUSINESS None. MANAGER'S REMARKS n one Restructuring Chilled Water Debt. General Manager aceedinJohn Elashkar reported with restructuring heochilledlw eon the Finance Committee Agenda. The BWL is proceeding age of low interest e rate of debt to pre-refund bonds to take advant thet aaenda. This should reduc003,e cethe debt /o interest was 3.7% as compared to the 4.1 shown on g service on the chilled water bonds by about $lmillion per year. COMMISSIONERS' COMMENTS Commissioner Joseph commented on the APPA Conference he recently to atte tded funct oHe n.yed o the wealth of experiences and thanked the BWL for the opportunity PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE P SUBJECT. WELCOME TO SPEAK TO THE BOARD ON ANY BOARD OF WATER D LIGHT No one spoke. Page 40 Special Meeting July 8, 2003 EXCUSED ABSENCE None. Commissioner Joseph left at 6:40 PM. CLOSED SESSION Moved by Commissioner Royal, seconded by Commissioner Marin, that the Board convene i Closed Session to discuss pending litigation(6:40 p.m.). n Action: Adopted by roll call vote: Yeas: Commissioners Callen, Duncan, Haggart, Marin, Royal, Smith and Wonch. Nays: None Abstentions: None Absent: Commissioner Joseph. OPEN SESSION The Board returned to open session at 8:10 p.m. Resolution 2003-7-7 LAWSUIT OF JOSEPH PANDY, JR. At a special meeting of the Board of Commissioners of the Lansing Board of Water& Light held on Tuesday, July 8, 2003, the following resolution was offered by Commissioner Tian Haggart and seconded by Commissioner Connie Marin. WHEREAS, on September 10, 2002, the Board of Commissioners determined not to continue the employment of the then acting General Manager, Joseph Pandy, Jr., and WHEREAS, at the time, the Board of Commissioners chose not to publicly state in a formal resolution the reasons for the Board's determination to end Mr. Pandy's employment relationship so as to avoid a public discourse that could impair the former General Manager's fixture opportunities and since, as an "at-will" employee, no specific reasons were required to be stated, and WHEREAS, upon discovery of additional bases that supported the Board of Conunissioners' September 10, 2002 action, the Board saw no reason for formal action on those bases for the reasons previously stated herein, and WHEREAS, Mr. Pandy has now filed a lawsuit against the Lansing Board of Water & Light ("LBWL") that challenges the Board of Commissioners' action on September 10, 2002, which lawsuit asserts, in part, that Mr. Pandy's employment was terminated without cause, and Special Meeting Page 41 July 8, 2003 WHEREAS, cause for termination of Mr. Pandy's employment existed at the time of his termination and was also evidenced by facts discovered after September 10, 2002. THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS AS FOLLOWS: 1. Although the Board of Commissioners firmly believes that the General Manager served "at will," on and before September 10, 2002, cause existed that warranted the termination of Mr. Joseph Pandy, Jr. and such cause constituted willful gross misconduct that was seriously injurious to the LBWL. Further, subsequent to September 10, 2002, the Board of Commissioners learned of additional conduct by Mr. Pandy that would also constitute cause for his termination. 2. The facts that the Board of Commissioners finds constituted cause for Mr. Pandy's termination generally include, but are not limited to, the following: A. Mr. Pandy directed that significant contracts for the provision of water service be executed that contained terns and rates that were injurious to the interests of the LBWL and its customers. B. Mr. Pandy directed that significant contracts for the provision of chilled water service be executed that contained terms and rates that were injurious to the interests of the LBWL and its customers. Mr. Pandy's acts in this regard were particularly egregious because his choice of technology to be used was more expensive to install and operate thereby subjecting the LBWL and its customers to unnecessary cost and continuing expense. C. Mr. Pandy committed breaches of trust by withholding information from the Board of Commissioners, failing to disclose critical information on matters before the LBWL, and failing to properly research critical issues, all of which jeopardized the Board of Commissioners' ability to fulfill its duty to the LBWL and its customers. D. Mr. Pandy jeopardized and attempted to thwart the internal audit functions of the LBWL by withholding information from the LBWL's internal auditor, by failing to notify the internal auditor of facts critical to her responsibilities, and then engaging in a practice of intimidation when the internal auditor disagreed with Mr. Pandy's actions. E. Mr. Pandy undermined the human resources function at the LBWL by directly interfering in that function and intimidating those who disagreed with his actions. F. Mr. Pandy violated the LBWL's Internet Use policies by sending and receiving highly inappropriate e-mails. These actions were not only in direct violation of LBWL's policies, they exposed the LBWL to potential liability and injury to the LBWL's reputation that would be contrary to the LBWL's responsibilities to its customers. Page 42 Special Meeting July 8,2003 G. Mr. Pandy allowed to exist within certain parts of the administration of the LBWL a serious lack of internal controls that led to misuse or unaccounted or unaccountable expenditures of LBWL funds. H. Mr. Pandy fostered an environment where favoritism was practiced in violation of the LBWL policies. I. Mr. Pandy failed to carry out Board of Commissioners' directives. J. Mr. Pandy created a climate within the LBWL that deteriorated employee morale, increased labor relations strife, marginalized employees who raised questions, caused key employees to leave or threaten to leave their employment with the LBWL, created potential liability for the LBWL, and demonstrated a lack of the leadership necessary for an organization with critical responsibilities to the citizens of Lansing and to its customers. Moved by Commissioner Haggart, seconded by Commissioner Duncan, on the approval of the Resolution on the Lawsuit of Joseph Pandy, Jr. (Resolution #2003-7-7). Discussion: After lengthy discussion, the above resolution was adopted. Action: Carried unanimously. ADJOURNMENT On motion by Commissioner Wonch, seconded by Commissioner Haggart, the meeting adjourned at 8:40 p.m. Is/Mary E. Sova, Secretary Filed with Lansing City Clerk July 16, 2003 Page 31 Preliminary—Subject to Board Approval ►-' ` C-_ MINUTES OF THE BOARD OF COMMISSIONERS' MEETINQ -' LANSING BOARD OF WATER AND LIGHT 5'rn Tuesday, May 27, 2003 The Board of Commissioners met in regular session at 5:30 PM on May 27, 2003, in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Ronald C. Callen, Nancy W. Duncan, Tim Haggart, Ifield P. Joseph(arrived at 6:10 p.m.), Connie Marin, Diane R. Royal, Robin M. Smith, and Nancy A. Wonch(arrived at 5:40 p.m.). Absent: None. The Secretary declared a quorum present. Chair Callen called the meeting to order at 5:30 p.m. APPROVAL OF MINUTES Motion made by Commissioner Smith, seconded by Commissioner Marin, to approve the minutes of the regular meeting held April 8, 2003. Carried unanimously. Motion made by Commissioner Duncan, seconded by Commissioner Haggart, to approve the minutes of the special meeting held May 6, 2003. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON THE SUBJECT OF THE SPECIAL MEETING. Allan E. Booth, Business Representative, International Union of Operating Engineers, Local Union No. 324, spoke on the Hulett Road water main project. Mr. Booth stated that he has discussed this issue with General Manager Elashkar and has further questions Page 32 Board Meeting May 27,2003 on the project. Mr. Booth noted that Kamphuis Pipeline Co. of Grand Rapids was awarded this project. He raised the following questions: 1) Was the project bid or was it just given to this company? 2) Did the contractor meet the qualifications of BWL to be doing this work? 3) Did BWL know that the company had a history of violations through OSHA? He also questioned the safety aspect of the project and noted that safety has to be an important qualification. Mr. Booth also spoke on the issue of prevailing wage. He has not been able to find out if prevailing wage is being paid on this contract to the employees. He said the operators on the job from Kamphuis would not give him any of this information, other than they were given pick-ups to drive back-and-forth, which is not included in the prevailing wage. The laborers on the project told him that they were making between $12.00 and $14.00, which in the Lansing area is not prevailing wage. Mr. Booth stated that this is not a union/non-union issue. Labor unions spend millions of dollars on the issue of prevailing wage. He expressed concern that contractors continue to come in and do the work and pay substandard wages instead of prevailing wage. There is concern that contractors who pay prevailing wages are not granted the opportunity to bid on jobs. Mr. Booth stated that this practice erodes the industry, the BWL, the workers, and their reputation. Commissioner Haggart asked whether the Hulett Road job is a customer choice project, and also if the BWL bid against this contractor. General Manager Elashkar responded that the project is not a customer choice job and that it was bid completely by outside contractors in 2002. This specific contractor left it open. The proposal was open a couple months ago when the BWL acted on the award. Commissioner Callen assured Mr. Booth that his concerns would be addressed in writing in a timely manner. Eugene Buckley spoke on the natural gas crisis. He stated that this is the best time of the year to replace gas supplies, but it is not being done. He noted that currently there is a net draw on the natural gas supplies. The price of natural gas is $6.00 per MBTU at a time when historically it never got above $3.00. He anticipates that by this coming winter, there could be a natural gas crisis making it prohibitive for some people to heat their homes. Mr. Buckley offered to make a presentation to staff and commissioners on natural gas. He also reminded everyone that this is the one-year anniversary of the rail accident in Potterville. He said that two weeks prior to that accident he made a presentation to the City Council cautioning on the potential danger of a gasoline pipeline and far worse are the train cars carrying liquid propane gas and sulfuric acid. Mr. Buckley had a map showing Canadian National accidents in this area over the past several years. He said hazardous materials are not limited to liquid propane and sulfuric acid. Every fire engine has HAZMAT control, but there are no evacuation procedures in some areas in Lansing. He stated that it would be a critical situation if Lansing were to experience an accident similar to Potterville. Mr. Buckley named several hazardous materials, and handed out a sheet showing critical areas in Lansing. Eckert Station and the General Motors Plant were cited as areas where catastrophic events could happen. He also noted that if a train car broke apart near Trowbridge Road, it would only take eight Board Meeting Page 33 May 27,2003 minutes for a toxic cloud to reach Spartan Stadium, and liquid propane would also risk the Grand River. Commissioner Callen asked for written material on this subject if it is available. COMMUNICATIONS Memo from Councilmember Larry Meyer re: Irrigation for Cherry Hill Neighborhood. Staff is working on a response to Councilmember Meyer. Letter from Urban Options re: BWL goals and practices. Received and placed on file. FINANCE COMMITTEE Committee Members Duncan, Callen, Joseph, Smith and Wonch were present. Absent: None The Finance Committee met on April 8, 2003 at 6:20 p.m. to discuss the following items: 1. Load Forecast and Cash Flow Projections for FY 2004/2008 2. Wholesale Water Agreements LOAD FORECAST ASSUMPTIONS: Dave Bolan,Principal Engineer of Bulk Power/Resource Planning, reviewed assumptions used in the load forecast for the Electric, Water, Steam and Chilled Water utilities based on the following projections: Electric Utility • Neutral weather conditions • Growth trends between 1995-2001 • Current General Motors (GM)plant performance along with GM- provided modifications • Wholesale sales based on BWL selling all available generation Water Utility • Neutral weather conditions • Current GM plant performance along with GM-provided modifications Page 34 Board Meeting May 27,2003 • Wholesale sales based on historic usage and growth in Delta and Lansing Townships and fulfilling contract amounts for East Lansing- Meridian Water and Sewer Authority(ELMWSA) Steam and Chilled Water Utilities • Neutral weather conditions • Growth trends between 1995-2001 • Use current GM plant performance along with GM-provided modifications • Chilled Water load is considered a house service load for the steam utility • Chilled Water sales are based on history and engineering estimates for new facilities • Outside of GM and Chilled Water, no new growth in sales is anticipated CASH FLOW PROJECTIONS: The six year cash flow projections were based on FY 2003 budget data and results based on the following utility assumptions: Electric Utility • FY 2002 load forecast modified to reflect GM Plant changes • NOx compliance, with associated bonding and credit purchase • Belle River normal operation • Conversion to PRB Coal at Erickson beginning in FY 2004 • No inter-utility transfers (per Board Resolution #2003-4-1) • GM Delta Township Mid-Michigan Assembly Plant operation in FY 2007. • Belle River Bond refinancing and debt service credit • GM Plant#6 and#1 ceasing operation in FY 2005 • BWL Capital Program for Electric Utility capped at $24 million beginning in FY 2004 • Only existing or approved rate increases included Water Utility • FY 2003 load forecast • No inter-utility transfers (per Board Resolution#2003-4-1) • GM Delta Township Mid-Michigan Assembly Plant operation in FY 2007 • GM Plant#6 and#1 ceasing operation in FY 2005 • BWL Capital Program for Water Utility averages $ 6.27 million per year from FY 2003 through FY 2008 • Only existing or approved rate increases included Board Meeting Page 35 May 27,2003 Steam Utility and Chilled Water Utilities • FY 2003 load forecast • No inter-utility transfers (per Board Resolution #2003-4-1) • GM Plant#6 and#1 ceasing operation in FY 2005 • Per BWL-GM Steam Service Agreement, includes in FY 2005, $4,270,000 for remaining principal and $4,139,000 recovery of lost return due to GM Plant#6 steam line • BWL Capital Program for Steam Utility averages $2,929,000 per year from FY 2003 through FY 2008 • Only existing or approved rate increases are included Mr. Bolan reported that during the period of FY 2004 through FY 2008, it is projected the Electric Utility will have a surplus of$22.0 million, whereas the Water, Steam and Chilled Water utilities will have a deficit of$4.9, $10.0, and $3.6 million, respectively. General Manager Elashkar noted that the FY 2004 budgeting process is underway. Capital limitations for all the utilities are being set for FY 2004. Operations and maintenance costs are being scrutinized to identify potential decreases and produce a more realistic financial plan. The FY 2004 budget will be presented to the Finance Committee in May for review and consideration. WHOLESALE WATER AGREEMENTS Assistant General Manager Bill Cook presented an overview on the history of three wholesale water agreements currently in effect. In 1995 the BWL entered into forty-year agreements with Delta and Lansing Townships. In 1999 the BWL entered into a ten-year wholesale water agreement with the East Lansing-Meridian Water and Sewer Authority (ELMWSA). Mr. Cook reported that in November 2000, Director of Metrics and Audits Kellie Willson completed a review of BWL Wholesale Water Agreements. This analysis stressed the need for an in depth review of the equity, cost recovery, and other issues associated with the agreements. In February 2001, the Growth and Expansion Study was completed by staff and submitted to the Board. In December 2001, R. W. Beck and Associates completed a management audit of growth and expansion practices at the BWL. Beck recommended a cost of service study along with a comparison to the methodology used in the previous study to allow quantitative conclusions to be drawn regarding the equitability of the original wholesale rates. In February 2003,R. W. Beck and Associates completed a Water Cost of Service Study,which concluded that in FY 2001 the Water Utility did not generate sufficient revenue to cover cash expenditures including capital expenditures above depreciation, repayment of loans from the Electric Utility and debt service principal. Page 36 Board Meeting May 27,2003 In FY 2002, the production capacity contracted to Delta and Lansing Townships represented 34.4% of the BWL's total available capacity. Revenue received from Delta and Lansing Townships was 6.6% of total BWL revenue. Mr. Cook presented an overview of issues, alternatives, and recommendations concerning the Wholesale Water Agreements. Issues: 1. Financial Impact • Not full cost of service based (never intended to be a fully embedded cost of service study analysis) • Currently covers short-term variable and some fixed costs • Wholesale contract limits future rate increases to expense items and percentages included in original agreement • As loads shift, retail to wholesale relationship will shift 2. Valuation of Facility Charge • Lansing and Delta Township paid a facilities charge based on present value of the cost differential between cost of production facilities required to serve combined BWL township load and solely BWL load • Such a method leaves BWL at potential risk due to freezing assumptions at contract signing date for a ninety-year analysis 3. Loss of BWL Production Capacity • BWL takes forecast risk • Reserved indefinitely until townships agree to sell back • Townships' load growth not restricted in agreements • Township loads are growing six times faster than BWL load 4. Term of Agreements • Forty years with termination only upon mutual agreement • Upon termination, BWL must negotiate to obtain capacity reservation back 5. Operational Issues • Four hour interruptible provision of limited value cost wise to BWL Alternatives: 1. Maintain Status Quo—Continue to Index Wholesale Rate Increases with Retail Rate Increases • In 2001 interruptible wholesale rates in place by BWL under recovered by 1.90% from what the cost of service study indicated Board Meeting Page 37 May 27,2003 • BWL has raised rates twice since January 1, 2002 and January 1, 2003 2. Strict Adherence to Wholesale Agreements • Rate increases for January 1, 2002 and January 1, 2003 would require a cost of service study • The cost of service study for 2001 projected to 2004 indicates that wholesale rate increases based on the current arrangement will be less than the anticipated retail rate increases 3. Work with Townships to Negotiate Agreement Changes • First Priority: Clarify the intent of the capacity reservation in the contract, i.e. for load growth in the township. • Contract provisions to handle operating issues and contract dispute resolution • Long-term work to address cost issues. This may include discussion with the townships to removing the limitation on the expense items to be included in future wholesale cost of service studies, as well as other issues related to system ownership or system operation by BWL. Recommendations: 1. Work with Townships to renegotiate certain provisions of the agreement • Capacity usage • Dispute resolution • Type of service and/or cost allocations 2. Do not consider extending the East Lansing-Meridian Water and Sewerage Authority(ELMWSA) Wholesale Agreement under current arrangements. The Committee concurred with the recommendations presented. No formal action was taken. Following discussion, it was moved by Commissioner Wonch, seconded by Commissioner Smith to meet in closed session to discuss a confidential written legal opinion with General Counsel Larry Wilhite. (7:40 p.m.) Approved by roll call vote: Yes: Commissioners Callen,Duncan, Joseph, Smith, Wonch Nays: None Absent: None The Committee reconvened in open session at 8:07 p.m. Page 38 Board Meeting May 27,2003 There being no further business, the meeting adjourned at 8:07 p.m. Respectfully submitted, Nancy Duncan, Chair Finance Committee Moved by Commissioner Callen, seconded by Commissioner Wonch, to approve the Finance Committee Report. Action: Carved unanimously. HUMAN RESOURCE COMMITTEE Connnittee Meinbers Royal, Callen, Haggart, and Marin were present. Absent: None. The Human Resources Committee met on May 6, 2003 at 12:00 p.m. to discuss the following matters: 1. Employee Survey 2. Non-Bargaining Employees' Compensation 3. Quarterly Review of Pension and Retiree Benefit Plans Employee Survey Acting Human Resources Director, Mary Dwyer, reported that the results of the 2003 employee survey, conducted by Market Strategies in March, show improvements in all 23 components and in 63 of 68 specific questions over the 2002 survey results. The following details were summarized: Objectives of the Survey: • Provide basis information on employee performance,perceptions of the work environment, employee satisfaction, and employee retention; • Explore the link between employee satisfaction and customer satisfaction; and • Provide information on the key drivers of employee satisfaction and retention Survey Methodology: • 738 self-administered mail surveys were distributed to all BWL employees with a cover letter from General Manager John Elashkar • 375 surveys were returned for a completion rate of 51% (sampling error of+5%) Areas of Improvement: • Employees rated 63 out of 68 items higher in 2003 than in 2002 • 19 of the 68 items were significantly higher 0 49% of the item scores are at their highest level since BWL began surveying in 1999 Board Meeting Page 39 May 27,2003 Areas of Concern: • 11 items scored relatively strong(71+) • 18 items scored needs improvement(61-70) • 23 items scored poor (51-60) • 16 items need improvement (<50) Key Areas Impacting Employee Satisfaction: • Work Environment and Support -Feedback and Evaluation - Autonomy - Teamwork • Senior Management Performance - Employee Information - Senior Management Direction - Customer Satisfaction - Customer Service Performance Ms. Dwyer reported that management will continue to work on areas most likely to improve employee satisfaction. These will include: • Improving the work environment, particularly by providing more and better feedback and evaluation, and encouraging job autonomy; • Fostering a team-oriented environment; • Improving communications between upper management and employees; • Improving the information flow about and between Processes; • Communicating the BWL's strategic direction to employees; and • Communicating customer needs to employees. The survey included the following open-ended questions: 1. Wliat qualities would you like to see in the new Director and General Manager? Qualities %Responses Honesty/Integrity/Ethics 35 Leadership/Management Skills 20 Forward ThinkingNision 18 Employee Focused 16 Fairness 14 Good Communication 13 Accessible/Approachable 12 Professional Competence 11 Page 40 Board Meeting May 27, 2003 2. What should be the three most important goals of the next Director and General Manager? Goals %Responses Employee Satisfaction 35% Customer Satisfaction 26% Goals/Strategic Plan 20% Qualified Managers/Directors 16% Boost Employee & Company Morale 15% Better Relations with Union 13% Financial Health of BWL 12% Accountable/Honest 11% Non-Bargaining Employees Compensation Human Resources Employment/Compensation Administrator, Wendy Bradley, presented the results of the market analysis of non-bargaining employees' compensation conducted by Human Resources in conjunction with Dorey, Reagan &Associates. Ms. Bradley reported that the BWL pay philosophy is to attract, retain, develop and reward a quality workforce and to ensure the pay plans are competitive in the market while being cost effective to the BWL. The following activities that support the BWL pay philosophy were summarized: Competitive Market Reviews for eight skill families (Range Adjustments): 1. Engineering & Scientific 2. Technical 3. Information Technology 4. Customer Service & Office 5. Human Resources &Legal 6. Finance &Purchasing 7. Marketing & Communications 8. Directors - 27 Surveys used with 170 jobs matched and 1 to 6 matches for each job - Comparisons: Current Structure (Average Skill Family Midpoint) and Market Data aged to January 1, 2004 (Average Midpoint of Benchmark Job) - Competitive Pay: Range of values based on market averages + 10% - Analyze Data: Look at historical (FY 2003) and current data(FY 2004); market average/midpoint average. The goal is to keep the midpoint within+ 10%of market average. Board Meeting Page 41 May 27,2003 0 Performance Based Pay emphasizes paying employees per individual, group or BWL- wide performance (Performance Level Matrix): - Review external salary budget surveys - State of the economy -Financial outlook of the BWL - Commitment to BWL employees to award 0.0%to 7.5%performance increase based on performance The Human Resources Committee recommends approval of the following resolutions: Resolution 2003-05-01: FY 2004 SHILL FAMILY RANGE ADJUSTMENTS FOR NON-BARGAINING UNIT EMPLOYEES RESOLVED, That the following adjustments to the skill family ranges for non- bargaining unit employees be adopted for FY 2004: Skill Family FY 2004 Range Adjustment Customer Services and Office 3.0% Directors 3.0% Engineering & Scientific 4.0% Finance &Purchasing 2.0% Human Resources &Legal 3.0% Information Technology 3.0% Marketing & Communications 5.0% Technical 4.0% Resolution 2003-05-02 FY 2004 SALARY INCREASE PERCENTAGE RANGES FOR NON- BARGAINING UNIT EMPLOYEES RESOLVED, That the following performance increase matrix for non-bargaining unit employees be adopted for FY 2004: Appraised Level of Performance Salary Increase Percentage Rangel 451 points or higher "Outstanding" 6.0%, 6.5%, 7.0% or 7.5% 376-450 "Exceeds Expectation" 4.0%, 4.5%, 5.0% or 5.5% 276-375 "Meets Expectation"Z 2.0%, 2.5%, 3.0% or 3.5% 226-275 "Needs Improvement'3 0.0%, 1.0% or 1.5% 225 or less "Fails Expectations" 0.0% 'Salary increase percentage range within specified limits. Managers may recommend per fornrance increase percentages in `/z percent increments Page 42 Board Meeting May 27,2003 2The "meets expectation"performance level has been expanded to include 2.0%and 2.5%as options for performance awards,along with the former 3.0%and 3.5%. -'The."needs improvement"performance level has been expanded to include 0.0%, along with the former 1.00% and 1.50%. Two cor:secutive years of repeated performance of"needs improvement"will be an automatic 0.0% increase. RESOLVED FURTHER, That the General Manager is authorized to develop all procedures to implement the skill family adjustments and performance increase matrix. Quarterly Review of Pension and Retiree Benefit Plans Defined Benefit and Defined Contribution Pension Plans Chief Financial Officer, Dana Tousley, reviewed the quarterly financial reports for the Defined Benefit, Defined Contribution, and the Retiree Benefit Plans. At the January 9, 2003 Human Resources Committee meeting, the Commissioners requested a review of internal control procedures in the management of pension fund assets with a report to the committee at the next meeting. Mr. Tousley presented a picture/flowchart of the pension disbursement process. A "Report on Controls Placed in Operation and Tests of Operating Effectiveness" for the pension fund custodian, Comerica Bank, was reviewed by staff and is available for Commissioner review. Mr. Tousley stated that the only change in procedures recommended by staff is in the handling of statements relating to pension fund disbursements and assets held. Currently, all month end statements are addressed to the Chief Financial Officer,who would then forward them to the General Accounting Department. Since the CFO authorizes the sale or purchase of these assets, it is more appropriate that the third party proof of their existence be mailed directly to the General Accounting Department for recording, verification and filing purposes. All third party receipts, safekeeping receipts and asset statements from this day forward will be mailed directly to General Accounting. Due to recent developments in pension fund management in the nation, Mr. Tousley suggested that the Commissioners review each policy on Investment, Benefit, Accounting and Funding over the next several meetings of the Human Resources Committee. The goal is to enhance Commissioner understanding of existing policies and provide a forum for discussion of possible changes in these policies. Retiree Benefit Plans - VEBA Funding Proposal for FY 2003 Chief Financial Officer, Dana Tousley, reminded the Commissioners that over the past several years BWL has been able to transfer excess money from the Defined Benefit Pension Plan to the VEBA Trust to help fund retiree health care benefits. However, BWL's actuaries from Mercer Human Resources Consulting have advised staff that due to the stock market declines of the past several years,no transfer can be made for fiscal year 2003. The actuaries valued the Defined Benefit Pension Plan assets at Board Meeting Page 43 May 27,2003 approximately 125% of plan liabilities. Although the Defined Benefit Pension Plan is still significantly overfunded, the law does not allow transfer that would reduce the funding below 125%. Mr. Tousley reported that BWL had planned to contribute about $483,000 from operating funds to the VEBA trust in fiscal year 2003. In addition,BWL will pay an estimated$5.5 million during fiscal year 2003 for current retiree health care benefits. Staff recommended contributing an additional $1,000,000 from the operating funds of BWL to the VEBA trust to cover the estimated normal cost of$1,483,000 for fiscal year 2003 as determined by the actuaries. Staff further recommended that this additional expense not be counted against the new corporate Incentive Plan. Mr. Tousley noted that the funding recommendation is consistent with the Retiree Benefits Funding Policy adopted by the Commissioners in April of 2000. And, that due to the significance of this unanticipated expense, it should not be included in computing the fiscal year 2003 incentive plan financial results. The Commissioners concurred with both of these recommendations. No formal action was taken. . Resolution 2003.-05-03 REFERRAL OF PENSION FUND DOCUMENTS TO THE PENSION FUND TRUSTEES RESOLVED, That the Human Resources Committee forward to the Pension Fund Trustees the section of this committee report pertaining to pension fund matters and associated reports for review and consideration at their May 27, 2003 meeting. There being no further business, the committee adjourned at 1:26 p.m. Respectfully submitted, /s/Diane R. Royal, Chair Human Resources Committee Moved by Commissioner Royal, seconded by Commissioner Duncan, to approve the Human Resource Committee Report. Action: Carried unanimously. Moved by Commissioner Royal, seconded by Commissioner Haggart, on the approval of the resolution for Fiscal Year (FY) 2004 Skill Family Range Adjustments for Non- Bargaining Unit Employees (Resolution #2003-05-1) and FY 2004 Salary Increase Percentage Ranges for Non-Bargaining Unit Employees (Resolution #2003-05-02). Action: Carried unanimously. Page 44 Board Meeting May 27,2003 Moved by Commissioner Royal, seconded by Commissioner Marin, on the approval of the Resolution to Refer Pension Fund Documents to the Pension Fund Trustees (Resolution #2003-05-03). Action: Carried unanimously. FINANCE COMMITTEE Committee Members Duncan, Callen, Joseph, Smith and Wonch were present. Absent: None The Finance Committee met on May 13, 2003 at 5:30 p.m. to discuss the following matters: 1. Purchasing Policy 2. Fiscal Year 2004 Budget PURCHASING POLICY: General Counsel Larry Wilhite presented an overview on the proposed BWL Purchasing Policy and Procedure. He acknowledged the following team members who worked on this project: Steve Brennan Production David Cluley Business Support—Finance Robert Nicholson Process Support—Engineering Doug Wood Delivery Kathy Younglove Process Support-Purchasing Amy Cavanaugh Drafting Sub-Committee Beverly Bishop Administrative Support Larry Wilhite Team Leader Mr. Wilhite reported that the goals of the new Purchasing Policy and Procedure were to separate policy from procedure, genericize positions and BWL units, and add administrative controls and audit responsibilities. He noted that upon approval of this policy, all authority will reside in the General Manager until delegated. The current purchasing policy has been in effect since 1990. While redrafting the policy, both the executive staff and managers were provided an opportunity for review and input. Mr. Wilhite stated that the City Charter requires the BWL to have procedures to assure fairness in purchasing and disposition of personal property. The Charter also requires the BWL to parallel the City's policy unless it is found that a practice is contrary to good utility practices. He noted that when the Board adopts a policy it must include a statement to that effect. The overall goal is to provide purchases that produce the"best value"for our customers. "Best value" is a defined term in the Policy and is intended to Board Meeting Page 45 May 27,2003 encompass a number of factors, not merely the low price. It was determined that "best value" should include an attempt to reflect socioeconomic concerns such as the environment and historically disadvantaged businesses. Mr. Wilhite noted that it was also determined the new policy needs to better address the issue of legal and administrative controls. Over the years, purchasing authority had been delegated downward to the point where purchases were not being effectively controlled. The policy,when adopted, will revoke each employee's existing purchasing authority and plenary purchasing authority will remain in the General Manager until delegated. General Manager Elashkar will be submitting a Purchasing Policy delegated procedure for review at the next Board meeting. There was discussion regarding developing a procedure on diversity. Mr. Wilhite noted that the Purchasing Policy includes three new sections: corporate risk management, debarment, and award appeals. Mr. Wilhite explained each section of the Purchasing Policy and Procedures and responded to questions. Three new sections added to the Purchasing Policy include: Corporate Risk Management, Debarment, and Award Appeals. Following a lengthy question and answer period, Commissioner Wonch proposed a friendly amendment to the proposed Purchasing Policy: • Section 13-05 (Policy): Purchases from $5,000 to $100,000 must have a written agreement. Carried Commissioner Smith proposed friendly amendments to the Purchasing Procedures as follows: • Local Preference - Procedure No. 7-04: That the Local Preference procedure be changed from Lansing-based preference to BWL service area-based business. • Ethics: That the Board's ethics procedure currently in existence be inserted as a new procedure on Ethics. • Diversity: That procedures on diversity be included within the framework of a document to be developed on this subject. Carried. The Committee recommends that the General Manager present a resolution on the BWL Purchasing Policy and Procedure, as amended, for Board approval at the regular meeting on May 27, 2003. Page 46 Board Meeting May 27,2003 FISCAL YEAR(FY) 2004 BUDGET: O&M Budget: Chief Financial Officer Dana Tousley gave a presentation on the proposed O&M budget of$172.4 million for FY 2004,which is 0.5% higher than FY 2003. The increase is primarily due to the increase in employee cash compensation and benefits that more than offset reductions in other expenses. Budgeted expenses for materials/outside services and fuel are respectively$2.8 million and$0.9 million less than FY 2003. However, expenses for employee benefits and cash compensations are $4.5 million higher than FY 2003. Purchased power will decrease due to the Michigan Public Power Agency(MPPA)bond refunding savings. FY 2004 expense per unit sold is 1.5%higher for electric, 12.8%higher for steam, 24.3% lower for chilled water and 4.1% higher for water. Capital Budget: Proposed capital expenditures during FY 2004 are $47 million versus $41 million in FY 2003. This represents a 14.6% increase. The increase is due to capital expenditures for bond projects,primarily the NO,, compliance project. Non-bonded capital projects decreased from $30.6 million last year to $30.1 million in FY 2004. Assistant General Manager Bill Cook reported that the assumptions used in developing the FY 2004 Capital Budget included: • Maintaining status quo reliability levels • Current Rules for Utility Services are maintained • Annual capital projects are based on"typical" construction activity in the Lansing area • No new bonding (use of the State Revolving Fund for CSO eligible expenses is assumed) • Capital spending for the steam utility has been limited to issues of immediate need pending the retirement of two General Motors plants The capital budget includes the following capital initiatives: Northeastern/Central BWL Electric $533,000 Service Area Upgrade Watertown T&D Upgrades $305,000 Outage Management System $900,000 Fire Protection at Eckert $1,525,000 Capitol Loop Steam Main $400,000 Replacements Eckert Station Generator Breaker $617,000 Replacement Board Meeting Page 47 May 27,2003 Western Fuel Conversion Project at $14,205,000 Erickson, Bonded NO,,Compliance Project at Eckert, $2,200,000 Bonded CSO SRF Eligible (Water) $748,000 CSO SRF Ineligible (Water) $468,000 Water System Reinforcement in $2,254,000 CSO Development Areas Electric CSO/Street Reconstruction $1,035,000 [Commissioner Smith left the Finance Committee meeting at 7:10 p.m.] General Manager John Elashkar presented the six-year cash flow forecast and provided the Commissioners with a revised forecast memo dated May, 13, 2003. The previous forecast included in the committee meeting packet had an error in the Electric Utility expenditures, which was corrected. The correction changed the Electric Utility six-year cash flow from a positive $22.5 million to a negative $26.5 million. The forecast is intended to convey the financials of the electric, water, steam and chilled water utilities and their implications on the rates. The assumptions used in developing the FY 2004- 2009 cash flow forecast were summarized. Results indicate the following: • Electric Utility revenue requirements for the six-year period exceed revenue by $26,499,000. Return on assets averages 0.9%with capital spending averaging $23,600,000 per year excluding bonded projects. Bonded projects during the period total $16,405,000. The Electric Utility is anticipated to begin a cost of service analysis sometime in FY 2004 with possible rate increases sometime thereafter. • Water Utility obligations and expenditures exceed revenues by$2,816,000 over the six-year study period. Return on assets averages 1.52%, and capital spending excluding borrowing averages $4,870,000 per year. Based on this analysis, as well as a recent cost of service analysis, the Water Utility needs rate relief in 2004. • Steam Utility is significantly impacted by the General Motors Plant changes anticipated during this six-year period. Utility obligations and expenses are anticipated to exceed revenues by$8,125,000 with an average negative return on assets for the period. Rate relief appears to be needed as soon as possible. This is complicated by the current General Motors Agreement that does not permit GM's rates to be increased prior to December 2005. Currently, BWL has retained a cost of service consultant investigating steam utility costs with a recommendation due this summer. It is anticipated a rate increase will be needed in FY 2004. Page 48 Board Meeting May 27,2003 • Chilled Water Utility is also in a negative cash flow situation. Without rate relief, the utility is expected to continue to generate negative cash flow for a six- year total of$4,882,000. The same cost of service consultant reviewing the Steam Utility is also investigating Chilled Water Utility. The Finance Committee recommends the following resolution for Board approval: Resolution 2003-05-04 FISCAL YEAR 2004 BUDGET RESOLVED, That the annual Operating and Maintenance Budget covering Fiscal Year 2004 is hereby approved as presented. (Appended to the minutes—Exhibit A.) RESOLVED FURTHER, That the Capital Budget for Fiscal Year 2004 is hereby approved as presented. (Appended to the minutes—Exhibit B.). RESOLVED FURTHER, That the capital projects are authorized in the amount of the project estimate. Capital expenditures for Fiscal Year 2004 are limited to the net amount included in the budget. There being no further business, the meeting adjourned at 7:47 p.m. Respectfully submitted, Nancy Duncan, Chair Finance Committee Moved by Commissioner Haggart, seconded by Commissioner Marin, to approve the Finance Committee Report. Action: Carried unanimously. Moved by Commissioner Duncan, seconded by Commissioner Haggart, on the approval of the Fiscal Year 2004 Budget (Resolution #2003-05-04). Action: Carried unanimously. MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Office of the Corporate Secretary. Resolution2003-05-OS REMOVAL AND MARKETING OF RESIDUAL LIME Board Meeting Page 49 May 27,2003 RESOLVED,that the Board enter into an agreement for the Removal and Marketing of Residual Lime with Synagro Midwest, Inc., subject to approval by the BWL's General Counsel. The Agreement particulars are as follows: 1. The terns shall be for five years commencing July 1, 2003, and terminating June 30, 2008. 2. Synagro Midwest shall remove all Residual Lime from the Filter Press Facility at the Dye Water Conditioning Plant, seven days per week, as required by the BWL. 3. The intended use for the Residual Lime will be agricultural land application. 4. The fee paid to Synagro Midwest shall be $15.55 per dry ton of Residual Lime removed. This fee shall not be escalated for the term of the Agreement. Staff Remarks: Synagro Midwest submitted the best evaluated bid for the work described above. Sixteen firms were invited to bid, and two proposals were received. The bidders and their respective bids are as follows: Cost per Dry Ton Company 3 Year 5 Year 10 Year Contract Contract Contract Synagro Midwest $15.55 $15.55 $17.51 Pro-Lime Services $18.55 $16.48 $18.24 The current cost for removal and marketing of the Residual Lime is $16.72 per dry ton. This new Agreement represents a savings of$1.17 per dry ton, resulting in a projected savings to the BWL and its customers of approximately$196,900 over the five-year term of the Agreement. Moved by Commissioner Wonch, seconded by Commissioner Royal, on the approval of the resolution to Enter into a Five-Year Agreement with Synagro Midwest, Inc.for Removal and Marketing of Residual Lime (Resolution #2003-05-05). Action: Carried unanimously. Resolution 2003-05-06 PURCHASING POLICY AND PROCEDURES RESOLVED, That the Board adopt the attached Policy and Procedures dated May 27, 2003. Page 50 Board Meeting May 27,2003 RESOLVED FURTHER, That where the adopted policies do not parallel those of the City's,the Board has determined that the City's policies are inconsistent with the best practices for the operation of a public utility. RESOLVED FURTHER, That the Purchasing Policy and Procedures shall be made effective July 1, 2003. RESOLVED FURTHER, That the Purchasing Policy adopted July 24, 1990 is superseded as of July 1, 2003. RESOLVED FURTHER, That Resolution 90-7-5, which adopted the Purchasing Policy, is rescinded as of July 1, 2003. RESOLVED FURTHER, That the General Manager shall establish a timeline for education and training of employees on the Purchasing Policy and Procedures. -------------------- Sta Remarks: Section 5-203.4 of the Lansing City Charter requires the BWL to adopt policies and procedures to assure fairness in procuring personal property and services and disposing of personal property. Section 5-203.4 also requires the BWL's Policies and Procedures to parallel the City's unless the Board finds that a City policy or procedure is inconsistent with the best practices for the operation of a public utility. Staff was directed to draft new policies and procedures for presentation to the Board since the current policy and procedure has been in effect since 1990. The Finance Committee has reviewed these policies and procedures and found that they assure fairness in procuring and disposing of personal property. Moved by Commissioner Wonch, seconded by Commissioner Royal, on the approval of the Purchasing Policy and Procedures (Resolution #2003-05-06). Action: Carried unanimously. Resolution 2003-05-07 ETHICS ORDINANCE COMPLIANCE RESOLVED, That Resolution#2001-5-2, City Ethics Ordinance Compliance,be amended as follows: EXHIBIT B SUMMARY ANNUAL CAPITAL ADDITIONS,PLANNED CAPITAL PROJECTS&BONDED CAPITAL PROJECTS FISCAL YEAR 2003-2004 BUDGET BOARD OF WATER AND LIGHT Total Expenditures Expenditures Total Fiscal Year 2003-2004 Funding Project As Of Fiscal Year Project Cash Bond Dollars in(000's) Estimates 06/30/03 2003-04 Balances Flow Fund CIA^ Total ELECTRIC UTILITY Net Annual Capital Additions 14,610 0 14,610 0 12,885 0 1,725 14,610 Net Planned Capital Projects 27,334 8,701 8,988 9,645 8,988 0 0 8,988 Net Bonded Capital Projects 24,980 8,575 16,405 0 0 16,405 0 16,405 TOTAL ELECTRIC UTILITY 66,924 17,276 40,003 9,645 21,873 16,405 1,725 40,003 WATER UTILITY Net Annual Capital Additions 16,300 0 16,300 0 4,434 0 11,866 16,300 Net Planned Capital Projects 4,263 2,109 1,037 1,117 1,037 0 0 1,037 Net Bonded Capital Projects 748 0 748 0 0 748 0 748 TOTAL WATER UTILITY 21,311 2,109 18,085 1,117 5,471 748 11,866 18,085 STEAM UTILITY Net Annual Capital Additions 377 0 377 0 377 0 0 377 Net Planned Capital Projects 2,175 550 550 1,075 550 0 0 550 Net Bonded Capital Projects 65 0 65 0 0 65 0 65 TOTAL STEAM UTILITY 2,617 550 992 1,075 927 65 0 992 COMMON FACILITIES Net Annual Capital Additions 877 0 887 0 877 0 10 887 Net Planned Capital Projects 4,249 2,329 926 994 926 0 0 926 Net Bonded Capital Projects 0 0 0 0 0 0 0 0 TOTAL COMMON FACILITIES 5,126 2,329 1,813 994 1,803 0 10 1,813 BOARD OF WATER &LIGHT Total Annual Capital Additions 32,164 0 32,174 0 18,573 0 13,601 32,174 Total Planned Capital Projects 38,021 13,689 11,501 12,831 11,501 0 0 11,501 Total Bonded Capital Projects 25,793 8,575 17,218 0 0 17,218 0 17,218 TOTAL BOARD OF WATER&LIGHT 95,978 22,264 60,893 12,831 30,074 17,218 13,601 60,893 NOTE: Budgeted Capital Expenditures = $60,893 less $13,601 (CIA) _$47,292 less $17,218(Bond Funds) _$30,074 Page 1 of 19 A CIA=Contribution in Aid Final EXHI' A BOARD OF WATER AND LIuHT-LANSING MICHIGAN BUDGET FISCAL YEAR ENDING JUNE 30, 2004 $(000) WATER ELECTRIC STEAM TOTAL ...................................................................................................................... .............................................................................................................................. ,PROJECTED INCOME STATEMENT FY 2004 ;SALES(ccf,mwh,mlb,ton-hrs) 11,244,467 3,136,203 1,926,700 11,931,000 ::OPERATING REVENUE 23,867 176,870 18,603 219,340 Operation & Maintenance Expense (16,381) (142,756) (13,232) (172,369) Depreciation Expense (3,852) 3 606 (26,379) TOTAL OPERATING EXPENSE (20,233) (161,677) (16,838) (198,748) 'OPERATING INCOME 3,634 15,193 1,765 20,592 Payment to City (844) (6,944) (742) (8,531) Other Non-Operating Income 1,548 1,767 133 3,438 Other Non-Operating Expense 809 (2,077) (2,126) 5 012 INCOME BEFORE CIAC 3,530 7,928 (970) 10,488 Return on Net Assets (3/31/03 base) 2.6% 3.6% -1.3% 2.4%`. O erating Ratio 86.1% 95.6% 105.2% 95.3% ........................................................................................................................................................................................................................................................:: PROJECTED CASH FLOW FY 2004 Operating Cash 2,379 19,685 2,901 24,965 Cash Reserves 4,555 7,256 1,249 13,060 Special Project Cash 1,233 22,534 2.208 25,975 .BEGINNING CASH 7-1-2003 8,167 49,475 6,358 64,000 ':Sources of Cash Net Income 3,530 7,928 (970) 10,488 Bond Proceeds 0 0 0 0 Depreciation 3,852 18,921 3,606 26,379 :SOURCES OF CASH 7,382 26,849 2,636 36,867 TOTAL BEG CASH AND SOURCES 15,549 76,324 8,994 100,867 Uses of Cash Debt Principal (1,336) (2,131) (2,969) (6,436) '. Net Capital Expenditures (6,604) (39,482) (1,206) (47,292) USES OF CASH (7,940) (41,613) (4,175) (53,728) Operating Cash @ 12.5%of O & M 2,048 17,845 1,654 21,547 Surplus Cash (273) 3,409 (239) 2,896 Cash Reserves @ 1.0%interest 4,601 7,329 1,261 13,191 Special Project Cash 1,233 6,129 2,143 9,505 ENDING CASH 6-30-2004 7,609 34,711 4,819 47,139 .......................................................................................................................... . Note: Excludes Central Utility Complex revenue,depreciation and debt service. BW L income from CUC included in other income. .......................................................................................................................................................................................................................................................... FY 2004 Cash Inflow net income 3,530 7,928 (970) 10,488 depreciation 3,852 18,921 3,606 26,379 Net Cash Inflow 7,382 26,849 2,636 36,867 FY 2004 Cash Outflow debt principal (1,336) (2,131) (2,969) (6,436) capital (exbond proj cash on hand) 6.604 23,077 1 141 30.822 Net Cash Outflow (7,940) 25,208 (4,110) 37 258 Board Meeting Page 51 May 27,2003 RESOLVED, That the Commissioners endorse both the letter and the spirit of the City's Ethics Ordinance. RESOLVED FURTHER, That the Commissioners encourage management to provide ongoing annual training to all BWL employees about its provisions. With regard to purchasing issues, there was agreement by the Finance Committee that an employee should be able to bring input to the procurement process for business reasons. This means that all BWL employees: (a) may provide input to the procurement process for business reasons only and may not derive any income or personal benefit, directly or indirectly, from the selection, (b) should be discouraged from doing business with BWL, (c) should not accept gifts over $50 in value from vendors whether or not they influence a decision or official action, and (d) the General Manager may implement procedures concerning gifts under $50 in value, and any other procedures necessary for the enforcement of this policy. (Language in bold indicates new language.) -------------------- Sta Remarks: Resolution 2001-5-2 adopted by the Board in May 2001, did not address the issue of gifts of value under $50.00 and employees not accepting these gifts. General Manager Elashkar indicated he would implement a NO tolerance procedure forbidding BWL employees with purchasing authority from accepting anything of value from vendors or customers. Employees with no purchasing authority may accept gifts up to $50.00 per year. Ethics training will begin in June. Every employee is required to attend. Moved by Commissioner Haggart, seconded by Commissioner Marin, on the approval of the Resolution on Ethics Ordinance Compliance as amended(Resolution #2003-05-07). Action: Carried unanimously. NEW BUSINESS None. MANAGER'S REMARKS Twenty-Five Year Dinner. General Manager Elashkar reminded the Commissioners of the 25-Year Dinner on Thursday, May 29, 2003. Page 52 Board Meeting May 27,2003 Plan to Refinance the Chilled Water Bonds. Chief Financial Officer Dana Tousley is investigating the feasibility of refinancing the chilled water bond issue for 20 to 25 years. Preliminary analysis indicates that if the bonds are refinanced for twenty years, debt service will decrease on an annual basis approximately$500,000 and$1,000,000 if refinanced for 25 years. The State of Michigan has to approve the refinancing. The reason for refinancing now is to take advantage of today's market rates. Charges for Customer Choice Projects. A management committee is reviewing indirect costs to determine how best to allocate these costs in order to resolve competitive issues related to customer choice projects. A preliminary review using the historical method updated for last year's expenditures indicates that indirect costs on labor would increase from 103%to 106%. Every year, approximately$9 million of O&M costs are transferred to capital. When a decision is made on a revised method, utilities and fees and charges will be updated accordingly. Staff will present its analysis on utility fees and charges with a recommendation at a future Finance Committee meeting. Wolverine Pipeline. Two BWL employees will be giving deposition on the Wolverine Pipeline. The BWL is cooperating with the City on this issue. Update on General Manager Search Process. Commissioner Duncan asked to be updated on the schedule for the upcoming meetings for the interview and meeting of the five General Manager candidates. • June 5 - Finalists will be available to meet employees, retirees, officials and citizens at a public reception at the Lansing Center from 5:30 p.m. to 7:00 p.m. • June 6 -A BWL commmittee consisting of non-bargaining and bargaining employees and retirees will conduct separate interviews with each finalist. Commissioners will receive information regarding feedback and observations from the public and employees' committee meeting. • June 7 -Final interviews with the Board of Commissioners will be held in public session between 8:00 a.m. to 5:30 p.m. in the Board Room. • June 10 - A Special Board Meeting will be held at 5:30 p.m. to select the finalist and authorize the negotiation of an employment contract and the starting date of the future Director and General Manager. COMMISSIONERS COMMENTS Commissioner Marin presented a plaque from the Anishinaabegamig Cultural Learning Center in appreciation to the BWL for supporting their"Strengthening Spiritual Roots," a prevention network project. Board Meeting Page 53 May 27,2003 Commissioner Smith thanked the BWL employees for their efforts and hard work over the past several months. Commissioner Wonch seconded these comments. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT. Allan Brooks thanked Commissioners Duncan and Smith for their comments and input to the new Purchasing Policy. He acknowledged that safety and prevailing wage sections are included in the Purchasing Policy, but questioned whether these issues are being implemented now and for future projects. EXCUSED ABSENCE None. ADJOURNMENT On motion by Commissioner Smith, seconded by Commissioner Wonch, the meeting adjourned at 6:26 p.m. /s/Maiy E. Sova, Secretary Filed with Lansing City Clerk June 11, 2003 Page 27 Prelirnin'dry=Subject to Board Approval MINUTES OF THE BOARD OF COMMISSIONERS' SPECIAL MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, May 6, 2003 The Board of Commissioners met in a Special Meeting in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Ronald C. Callen, Nancy W. Duncan, Tim Haggart, Ifield P. Joseph (an•ived at 5:30 p.m.), Connie Marin, Diane R. Royal, Robin M. Smith, and Nancy A. Wonch. Absent: None. The Secretary declared a quorum present. Chair Callen called the meeting to order at 4:30 p.m. CLOSED SESSION Moved by Commissioner Wonch, seconded by Commissioner Marin, that the Board convene in Closed Session to discuss a confidential written legal opinion (4:30 p.m.) Action: Adopted by roll call vote: Yeas: Commissioners Callen, Duncan, Haggart, Marin, Royal, Smith and Wonch. Nays: None Abstentions: None Absent: Commissioner Joseph. OPEN SESSION The Board returned to open session at 5:30 p.m. Page 28 Special Meeting May 6,2003 PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON THE SUBJECT OF THE SPECIAL MEETING. No persons spoke. NEW BUSINESS SEARCH FOR A NEW DIRECTOR& GENERAL MANAGER Chair Callen announced that search consultant Charles Blockett would be facilitating discussions as the Commissioners narrow the candidate field for permanent Director and General Manager from 114 applicants to five finalists. Chair Callen thanked Mr. Blockett and the internal BWL team comprised of General Manager John Elashkar, Acting Human Resources Director Mary Dwyer, Director of Metrics &Audits Kellie Willson and Corporate Secretary Mary Sova for their assistance in coordinating key search activities over the past six months. Chair Callen summarized the resume evaluation process. He reported that Mr. Blockett and the internal BWL team independently read and evaluated all 114 resumes based on requisite qualifications stated in the job announcement and identified the top ten candidates. The candidates were placed in alphabetical order and the names and addresses of the candidates were blanked. An important part of the search process included several opportunities for input from employees, retirees and customers throughout the search. A week before this meeting, the Commissioners were provided with a notebook containing the following information: • Resumes of the top 24 candidates and summaries of the remaining 90 candidates; • An Evaluation Matrix to be used by each Commissioner in their final evaluation - -----of the-candidates-; ------- --- ---- --- - - ------ --- • Input Forms received from employees, retirees and the public; • Results of the recent employee satisfaction survey, which included comments by employees about the qualities and priorities they would like to see in the new Director & General Manager. Mr. Blockett announced that many of the candidates requested confidentiality until such time that finalists are selected. To honor this request, the names of the candidates were not revealed to the Commissioners. The five finalists would then be contacted to confirm their continued interest in the position and to secure permission to release their names Special Meeting Page 29 May 6,2003 over the next 24 hours. At that point their names would become public information for release to the media on May 8th and they would be interviewed in a public forum. Mr. Blockett explained the process for narrowing the General Manager field to five candidates. He asked each Commissioner to identify, by all assigned number, their top five candidates based on their independent review of resumes and summaries. Candidate numbers that appeared on all the Commissioners' list were automatically included on the final list. The candidates were then arranged in descending number from the maximum to the minimum as they occurred. The Commissioners began discussion starting with the candidate with the maximum number of occurrences. Discussion continued until consensus was reached. A vote was called by Chair Callen to either include or exclude a candidate from the finalists' list. The discussion process was repeated until the top five finalist were chosen plus one additional finalist as a contingency should one of the five candidates drop out of the process. Special Note: As a result of this process, the five finalists were identified on May 8`h after they confirmed their continued interest in the position. The Finalists are: Assn tQ led# Finalist's Name 16 Joel W.Buck 23 E.Leon Daggett 71 Sanford Novick 98 Robert J Sprowls 110 Janes P. Wiley Chair Callen summarized the activities that will transpire up to the date of the final selection: • June 5 - Finalists will be available to meet employees, retirees, officials and citizens at a public reception at the Lansing Center from 5:30 p.m. to 7:00 p.m. • June 6 - A BWL committee consisting of non-bargaining and bargaining employees and retirees will conduct separate interviews with each finalist. Commissioners will receive information regarding feedback and observations from the public and employees' committee meeting prior to the final interviews with the Board. • June 7 - Final interviews with the Board of Commissioners will be held in public session between 8:30 a.m. to 4:00 p.m. in the Board Room. • June 10 - A Special Board Meeting will be held at 5:30 p.m. to select the finalist and authorize the negotiation of an employment contract and the starting date of the future Director & General Manager. 99 Page 30 Special Meeting May 6, 2003 PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT. BWL employee Joe Davis, President of 1BEW, Local 352, announced that the union will have a booth this year at the Chili Cook-Off on June 6"'. He asked about the timeline for the Employee/Retiree Committee interviews to assure smooth coordination between that important responsibility and the Chili Cook-Off activities. Mr. Davis applauded the Board for the open nature of the selection process and particularly for placing emphasis on the candidates' personal characteristics that influence their relationships with others compared to focusing entirely on technical ability. EXCUSED ABSENCE None. ADJOURNMENT On motion by Commissioner Smith, seconded by Commissioner Wonch, the meeting adjourned at 7:16 p.m. /s/Mmy E. Sova, Secretary Filed with Lansing City Clerk May 16, 2003 Preliminary—Subject to Board Approval MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, April 8, 2003 The Board of Commissioners met in rescheduled session at 5:30 p.m. in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Chairman Ron Callen called the meeting to order. Present: Commissioners Ron C. Callen, Nancy W. Duncan, Ifield Joseph, Robin M. Smith, Nancy A. Wonch—5 Absent: Tim Haggart, Conine Marin, Diane R. Royal—3 The Secretary declared a quorum present. All said the Pledge of Allegiance. APPROVAL OF MINUTES Motion made by Commissioner Wonch, seconded by Commissioner Duncan, to approve the minutes of the Rescheduled Board Meeting of January 30, 2003. Carried unanimously. Motion made by Commissioner Smith, seconded by Commissioner Duncan, to approve the minutes of the Special Board Meeting of March 10, 2003. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF THE MEETING. Joseph Davis, President of IBEW, Local 352, spoke on behalf Curt Gates, Business Agent for IBEW Local 352. Mr. Davis recognized the efforts and hard work of Water Department employees during this past frigid winter season. BWL employee Johnny Moore was present to receive a plaque honoring the Water Department. Mr. Davis noted that last year the Water Department serviced 140 water main breaks compared to 181 water main breaks year to date, 18 Board Minutes April 8,2003 with 125 recorded in the last four months. There were 200 frozen services, which added up to approximately 30,000 hours, all worked without accident or injury. Mr. Davis also read a letter written by Curt Gates, which acknowledged the following: (1) the Commissioners' continued support; (2) Interim General Manager Elashkar's positive efforts to bring focus and direction to BWL; (3) efforts to resolve Customer Choice issues; and (4) a request for the Chief Financial Officer to report on BWL pension funds invested in terrorist-sponsoring nations. The complete text of Mr. Gates' letter is appended to these minutes. Eugene Buckley, an economics instructor at Lansing Community College, expressed concern over escalating energy costs and deregulation. He noted that in February, natural gas spiked at $16 per million BTU's. He predicts that within five years, the average household could see a S 1,000 per month bill for gas and electric. Mr. Buckley would like to present an energy proposal, that he feels would generate revenue to assure that we all have low-cost electricity in the future. Chairman Callen stated that the BWL could arrange an opportunity to meet with Mr. Buckley. Paul Pratt, Ingharn County Deputy Drain Commissioner, appeared on behalf of Patrick Lindemann, higham County Drain Commissioner, with policy suggestions to guide the new General Manager. One of the problems the State of Michigan has is the continued intensity of growth in rural areas at the expense of urban areas that already have infrastructure. Messrs. Pratt and Lindemann suggest that the focus of the BWL and its policyrnakers should be to encourage reurbanization and not the opposite. He noted that there are ways to think through how the BWL evaluates and performs projects. Mr. Pratt stated that not every proposal for expansion of service outside the area is in the long-tern interest of BWL customers. He added that as a resident of Lansing and a satisfied utility consumer, he wants to see the BWL continue with a price advantage, good service, and not use utility dollars to subsidize turning cornfields into subdivisions. FINANCE COMMITTEE REPORT Committee Members Duncan, Callen, Joseph, Smith and Wonch were present. The Finance Committee met on April 8, 2003 at 6:20 p.m. to discuss the following items: 1. Vulnerability Assessment 2. Inter-Utility Transfers 3. Electric Utility Energy Cost Adjustment (ECA) 4. Six-Month Budget Review 5. Fiscal Year 2004 Budget Parameters 6. External Auditor's Management Letter 7. Water Wholesale Contracts By motion of Commissioner Royal, seconded by Commissioner Duncan, agenda topics #1 and 2 (above) slated for discussion just prior to the Finance Committee were moved from the Committee of the Whole agenda, due to lack of a quorum, and included with the Finance Committee agenda. Carried unanimously. Board Minutes 19 April 8, 2003 1. Vulnerability Assessment Moved by Commissioner Royal, seconded by Commissioner Duncan, for the Finance Committee to meet in closed session to receive a confidential briefing by Special Projects Director Clyde Dugan on the vulnerability assessment of critical water utility facilities as permitted by the Open Meetings Act (5:37 p.m.). (Two members of a committee represent a quorum.) Adopted by roll call vote: Yeas: Commissioners Duncan, Marin, Royal, and Smith Nays: None Absent: Committee Member Wonch The Finance Committee reconvened in open session at 6:05 p.m. 2. Inter-Utility Transfers Director of Metrics and Audit Kellie Willson reported on past cross-utility subsidization and the impact of repayment on the water and steam utilities. A historical overview of inter-utility transfers was presented, which indicated that the water and steam utilities have not been generating enough revenue to cover all operating and capital expenditures. Estimated amounts due from the water and steam utilities prior to fiscal year 1987 and through December 31, 2002 were reviewed. As an alternative to requiring full repayment to the electric utility in fiscal year 2004, two options were discussed: (1)No repayment to the electric utility or (2) repay only the General Motors incentives for the Water and Steam utilities. Lengthy discussion followed on the course of action to ensure recovery of investment, control of costs and development and implementation of competitive rates. In addition to reducing costs while increasing revenue, staff is in the process of developing guidelines to identify rate adequacy and to determine if cross subsidization is occurring between utilities. An economic evaluation process to include six years of follow-up for each utility would evaluate the success of corrective actions taken. The Committee recommends the following resolution for Board consideration: Inter-Utility Transfers (Resolution #2003-4-1) RESOLVED, That effective Fiscal Year (FY) 2004, the budgeting process be changed to take into consideration the concept and practice of financially independent Water, Electric, Stearn and Chilled Water utilities; and RESOLVED FURTHER, That the budget for each utility be balanced at the beginiung of the fiscal year via an interest-bearing note issued from the surplus of one of the other utilities; and 20 Board Minutes April 8,2003 RESOLVED FURTHER, That all inter-utility transfers prior to FY 2004 be waived except for: (a) the existing formal inter-utility loans and interest-bearing notes; and (b) the General Motors' Lansing Grand River Plant incentive package valued at $343,000 for the water utility and at $4,435,000 for the steam utility, to be repaid with 5.0% interest to the electric utility over a six- year period. 3. Electric Utility Energy Cost Adjustment Chief Financial Officer Dana Tousley reported that the Energy Cost Adjustment (ECA) was frozen in February 1999 at one mill per kilowatt-hour($.001000 per kWh) for a period of four years in order to raise $12.7 million to fund the conversion of Eckert and Erickson Stations to less expensive Western coal. Since that time, the ECA generated $16.2 million that normally would have gone back to customers. The average cost of fuel was 7.5% lower than expected and the BWL had 6.8%higher retail sales than projected in 1999. The BWL has cominitted $6.7 million for converting Eckert Station and Erickson Station to burn Western coal and $11.2 million to replace the Erickson Station precipitator. The precipitator project included modifications to allow the burning of Western fuel and the use of low NOx (nitrogen oxide) burners. As an alternative to reinstating the original ECA method of calculation, two potential options were reviewed, but were dismissed. Staff recommends and the Committee concurs that the ECA freeze, which expired on February 3, 2003, not be extended. Consequently, the ECA in effect prior to February 1999 is restored to the original methodology. If the ECA remains constant for the next 12 months, retail customers will experience a slight rate decrease of 0.486 mills or $0.000486 per kWh. This is an informational item, thus no action is required. A general amlouncement to advise customers that the original ECA is re-established will be sent to the general public via the Connections newsletter. 4. Six-Month Budget Review. Chief Financial Officer Dana Tousley reviewed the various components of operating expenses, using the FY 2003 budget as the baseline. By fiscal year end, management anticipates that operating and maintenance expenses (including fuel and purchased power) will match the original projection of$171,588,000. 5. Fiscal Year 2004 Budget Parameters General Manager Jolm Elaslnkar reviewed the parameters and assumptions to be used in preparing the FY 2004 budget. Cost cutting efforts include the following: (a) Capital expenditures, excluding bonded projects, will be reduced to less than $30 million. The six-year average is anticipated to be less than$30 million. This reduction is to be accomplished by using cash available from each utility to determine each utility's capital expenditures. (b) Operating expenses will be 7% less than the FY 2003 budget. (c) No bond issues are planned. (d) Revenue forecast will be based on existing and known changes in sales volumes. Board Minutes 21 April 8, 2003 (e) Preliminary load and sales forecast includes unit sales increases and decreases as follows: FY 2004 Forecast Budget'04 to FY'04 Budget Budget'03 /12 MTD 12/30/03 Water @ 11,244,467 CCF -1.6% +1.8% Electric @ 3,182,000 MWH +2.2% +4.2% Stearn @ 1,926,700 MLB -19.4% -18.6% Chilled Water @ -42.6% +30.9% 11,931,000 Ton/Hrs The Committee will review these plamling assumptions in March with more detail. 6. Wholesale Water Contracts General Manager Elashkar reported that staff was not ready to discuss wholesale water contracts in detail at this time and asked that it be deferred to a later meeting. He indicated that staff is exploring options to bring to the Finance Committee in March prior to meeting with affected townships. 7. External Auditors'Management Letter. Chief Financial Officer Tousley presented an overview of management responses to continents raised by Plante Moran following their FY 2002 audit. The following issues were discussed: (a) Efficient access to financial information (b) Information system security (c) The need for succession planning and cross-training (d) Improving inventory software and technology Management has implemented enhancements and is continuing to address most issues in a timely manner. A complete copy of the external auditor continents and management responses is filed with the Corporate Secretary. The Committee requested that staff prepare a report on succession planning for critical positions to be submitted to the Board in the future. There being no further business, the meeting adjourned at 7:15 p.m. Respectfully submitted, Nancy Duncan, Chair Pro Tem 22 Board Minutes April S,2003 Moved by Commissioner Duncan, seconded by Commissioner Smith, to approve the Finance Committee Report. Discussion: Commissioner Duncan reported that discussion on inter-utility transfers has led to a resolution for consideration. The resolution indicates that the BWL would change the budgeting process effective FY 2004, to take into consideration the concept and practice of financial independence for the water, electric, steam and chilled water utilities. The budget for each utility would be balanced at the beginning of the fiscal year via interest-bearing notes from the surplus of any other utility. All inter-utility transfers prior to FY2004 would be waived except for two Spec ific existing inter-utility loans and interest-bearing notes; and the General Motors Lansing Grand River Plant incentives package. The Finance Committee believes this is the best next step for the Board to take relative to the long-standing issue of inter-utility transfers and subsidization. Commissioner Wonch asked for the dollar amount if all utility transfers are waived. Director of Metrics and Audits Kellie Willson responded that the total is approximately$51 million. In the future, there would not be that debt because each utility would have a balanced budget and they will not be subsidizing each other. At the request of Chainnan Callen, Commissioner Duncan gave an overview on the issue of Inter-Utility Transfers for the benefit of new Commissioner Ifield Joseph. She reported that the BWL operates the electric, water and steam utilities. She reported that a number of years ago, the Board adopted, as a principal, that each utility should be self-supporting so that the ratepayers would pay the costs associated with that utility. The BWL has not been able to attain that goal; and as a consequence, the electric utility and ratepayers have subsidized the water and steam utilities. The BWL has kept records of the degree of subsidization. The struggle has been what has happened in the past, and what should be done in the future. If the BWL were to require the water utility to repay everything that it owes to the electric utility, water rates would have to be raised significantly. Customers currently using the water would be paying, and perhaps they were not water users at the time the debt was incurred. For technical and substantive policy reasons, the Finance Committee recommends that the utilities will operate and be free standing. In the event one of the utilities needs subsidization, it will be recognized in the budget via interest-bearing notes at the front end,but in essence each utility will be treated independently. Commissioner Duncan asked Director of Metrics and Audits Kellie Willson to comment on the exemption of the General Motors incentives. Ms. Willson explained that these are formal loans on specific assets for General Motors. This Resolution will take effect on July 1, 2003, which is the beginning of Fiscal Year 2004. Commissioner Smith commended staff s efforts in bringing forth corrective measures to ensure recovery of investment. Action: The Finance Committee Report was unanimously adopted. Moved by Commissioner Duncan, seconded by Commissioner Wonch, on the approval of the resolution for Inter-Utility Transfers (Resolution #2003-04-1). Action: Carried unanimously. Board Minutes 23 i April 8, 2003 GENERAL MANAGER'S RECOMMENDATIONS No recommendations were submitted. UNFINISHED BUSINESS None. OLD BUSINESS None. NEW BUSINESS None. RESOLUTIONS None GENERAL MANAGER'S REMARKS General Manager Elashkar handed out three documents to the Commissioners. • Board Search Newsletter was recently issued to employees reporting on the progress of the search for a new General Manager. In this issue, the names of the bargaining and non-bargaining employees who will serve on the Employee Committee for the interview of the final candidates for General Manager are identified. Attached to the document is a statistical analysis of the gender and ethnic grouping of the committee as compared to the entire BWL population; it is representative of BWL. As of April 7, a total of 108 applicants have submitted their resumes for the position of Director and General Manager of the Board of Water and Light. • _Press Release by Consumer & Industry Services (CIS) announcing it has awarded a $25,000 grant to the Great Lakes Renewable Energy Association to launch the Rebuild Greater Lansing School energy savings project. The project will include public and private schools in Ingham, Eaton, and Clinton counties. BWL employee Linda Rasor, a certified energy manager, will work in conjunction with this award to see how the BWL can assist the Lansing School District with energy savings. 24 Board Minutes April 8,2003 • Sole-Source Report issued by the Materials and Services Management Resource Center (Purchasing) for the first quarter of the year. The report is much shorter than it has been in the past. Commissioner Callen complimented staff on the progress made on this issue. General Manager Elashkar congratulated Chairman Callen for his selection to serve as an at- large member to the American Public Power Association Policy Maker's Council. The Council is comprised of local elected and appointed officials that represent public power communities across the USA. A copy of a memo on the Customer Choice Pilot Projects, dated March 11, 2003,prepared by Assistant General Manager Bill Cook, was included in the Board packet. There were no questions or comments on this report. COMMISSIONERS' REMARKS Commissioner Smith complimented BWL employees for the great job they have done on the Water Customer Choice Project. She stated that all parties came together on these projects and noted that Water Customer Choice is going to be very good for Lansing. Conunissioner Smith thanked the BWL for bottled water contributed to the recent open house at the Pentecostal Church Larry Trice Outreach Center. Commissioner Wonch complimented the water service repair team. She reported that a customer recently made positive comments to her on the speed, efficiency and courtesy extended by employees during a recent water outage. Conunissioner Wonch expressed her appreciation to the BWL, on behalf of the Pattengill Middle School Band, for contributing bottled water to the MSBOA Festival. On behalf of the Lansing School District Bond Committee, Commissioner Wonch thanked General Manager John Elashkar and BWL energy consultants for their assistance in working with the Lansing School District to minimize the next bond issue to be presented to City of Lansing voters. Commissioner Ifield Joseph thanked General Manager Elasl-lsar and several staff members for arranging a tour of BWL facilities. He complimented BWL employees that he met for their congeniality. EXCUSED ABSENCE On motion by Commissioner Duncan and seconded by Commissioner Wonch, that the absences of Commissioners Haggart, Marin and Royal be excused. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT. Board Minutes 25 April 8,2003 Curt Gates extended his congratulations to Commissioner Ifield Joseph on his appointment to the Board. He reported that BWL employees are looking forward and appreciate the opportunity to participate in the executive search process for the new General Manager. Mr. Gates noted that he is already starting to get input from employees. ADJOURNMENT On motion by Commissioner Wonch, seconded by Commissioner Duncan, the meeting adjourned at 6:15 p.m. Is/Mary E. Sava, Secretary Filed with Lansing City Clerk April 14, 2003 ATTACHMENT FROM PUBLIC COMMENTS PAGE 18 Ch6Y�C`tl Lf er submitted to the Board by Cu, sates �+ AlltI ATAO WI W i ' BL -ness Manager of IBEW Local 352 ?`t,o Nov 7� u' CURTIS V. GATES, BUSINESS MANAGER I o� �a Z- ----------------------------------------------- 601 N. Larch •Lansing,MI 48912 •Phone(517)482-3131 •Fax (517)482-9562 ffs sir t4`oNSW EEV7 OF IMOY31 AI410A64'4 N March 18, 2003 Commissioners Lansing Board of Water & Light Dear Commissioners: I am writing this letter to give you an update of the last few months. I would first like to thank all the commissioners for their continued support. We are so pleased that you take time from your busy schedules to call or stop by to see how things are going. as ar has We are happy to report that Mr. El hk brought focus and direction to the LBWL, and is making his way 1n efforts to address the many problems that employees have had. Mr. Elashkar has met and talked with employees and is open to meet with anyone on a one on one basis. He has offered himself to talk about any issue. It is our hope and expectation that we continue to build the trust that is necessary for the LBWL and its employees to once again shine in this great city of ours. The LBWL and IBEW LU 352 continue to meet on the Customer Choice lssue and Tam happy to report that most of the work is complete, inspectors have been selected and trained. Only a few more items are left to finalize: The prevailing wage issue; inspecting on the CSO projects; and the cross over contamination inspections mandated by the State of Michigan. We have had good meaningful conversations about all of the issues and our goal is to have all items worked out before construction season. ATTACHMr`T FROM PUBLIC-COMMENTS PAGE 18 Letter emitted to the Board by Curt Gat Business Manager of IBEW Local 352 Commissioners Pg 2 Inspecting of LBWL utility infrastructure when being constructed is very critical. It was just brought to my attention that maintenance crews have been working since January to remove stones and rock from the tubes within the new chillers at the Ottawa Station. Once again the stones and rock enter during the construction phase of the project. The inspection process is very important to the LBWL, its employees, and its customers. It will help guarantee product reliability to our customers and workmanship to the LBWL. IBEW LU 352 would like to propose that the CFO for the LBWL, Mr. Dana Tousley have the fund managers for any pension monies to report on investments in companies operating in terrorist-sponsoring nations. The goal would be to see if any of these companies may unwittingly support terrorist activity. Some companies are providing advanced equipment, technology or financing for governments that assist terrorist groups. Some examples of terrorist sponsoring nations include 'Iraq, Iran, North Korea, and Syria. One of many methods used to help identify these funds is through a company called Conflict Securities Advisory Group. Congress and the administration may also put out information identifying these companies. I think that it is important that we do all that we can to make sure our own money is not spent to kill any innocent target that the terrorists may seek, most of all, our fellow Americans. Since Curtis V. Gates Business Manager Page 15 MINUTES OF THE BOARD OF COMMISSIONERS' SPECIAL MEETING LANSING BOARD OF WATER AND LIGHT Monday, March 10, 2003 The Board of Commissioners met in a Special Meeting in the Boardroom of the _.. Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Ronald C. Callen, Nancy W. Duncan, Tim Haggart, Diane R.. Royal, Robin M. Smith, and Nancy A. Wonch. Absent: Commissioners I. Philinton Joseph and Connie Marin. The Secretary declared a quorum present. Chairperson Callen called the meeting to order at 4:30 p.m. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON THE SUBJECT OF THE SPECIAL MEETING. No persons spoke. CLOSED SESSION Moved by Commissioner Smith, seconded by Commissioner Haggart, that the Board move into Closed Session to discuss a confidential written legal opinion (4:35 p.m.) Action: Adopted by roll call vote: Yeas: Commissioners Callen, Duncan, Haggart, Royal, Smith and Wonch. Nays: None Abstentions: None Absent: Commissioners Joseph and Marin. Page 16 Special Meeting March 10,2003 OPEN SESSION The Board returned to open session at 6:05 p.m. RESOLUTION Resolution Authorizing Negotiations with Kirby Albright, Attorney for Former General Manager RESOLVED, That Ron Callen, Chair of the Board of Commissioners of the Board of Water and Light, and Melissa Jackson, the Board's outside counsel of Foster, Swift, Collins & Smith, P.C., are hereby authorized to begin negotiations with H. Kirby Albright, legal counsel of Fraser, Trebilcock, Davis &Dunlap, P.C., and his client, Joseph Pandy, Jr., in accordance with the parameters reviewed by the Commissioners in the Confidential Written Legal Opinion, dated March 7, 2003. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT. No persons spoke. EXCUSED ABSENCE There being no objection, the absences of Commissioners Joseph and Marin were excused. ADJOURNMENT On motion by Commissioner Royal, seconded by Commissioner Wonch, the meeting adjourned at 6:07 p.m. lsl Mary E. Sova, Secretary Filed wit12 Lansing City Clerk March 19, 2003 1 Preliminary—Subject to Board Approval MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Thursday, January 30, 2003 The Board of Commissioners met in rescheduled session at 5:30 p.m. in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Chainnan Ron Callen called the meeting to order. Present: Commissioners Ron C. Callen,Nancy W. Duncan, Conrlie Marin,Diane R. Royal, Robin M. Smith,Nancy A. Wonch—6. Absent: Tim Haggart—1 The Secretary declared a quorum present. All said the Pledge of Allegiance. APPROVAL OF MINUTES Motion made by Conunissioner Duncan, seconded by Commissioner Wonch, to approve the minutes of the Special Board Meeting held November 19, 2002. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF THE MEETING. No one spoke. Page 2 Board Minutes January 30,2003 HUMAN RESOURCES COMMITTEE REPORT Present: CoTnmissioners Callen, Haggart, and Marin Excused Absence: Commissioner Royal. Resolution The Human Human Resources Committee met on January 9, 2003 at 12 Noon to review the status of the BWL Pension and Benefit Plans. Chief Financial Officer Dana Tousley presented an overview on the role of the Human Resources Committee and its relationship to the Pension Fund Trustees. The Human Resources Connhnittee reviews all pension plan reports on behalf of the Board and presents its recommendation to the Pension Fund Trustees. The Trustees are charged with implementing the provisions of the pension plans. The Trustees are fiduciaries and have certain duties in the administration of the Pension Fund. Oversight responsibilities include the following: • Investment policy compliance • Specific pension fund investment objectives • Diversification of the portfolio • Meeting prudent standards for selecting investment alternatives • Monitoring the fund performance • Selecting a money manager Currently, the Chief Financial Officer is responsible for the control and management of the assets of the Defined Benefit and the Retiree Benefit Plans, as monitored by the Pension Fund Trustees. Although a process is in place, the Committee requested that staff review cui7ent internal controls in the management of pension fiend assets and to explore other options, such as an outside money manager, to further enhance internal control. The Committee also requested a review of actuarial alternatives to address the sharp increases in the recent past in the actual cost of health care insurance. Management will need to address the supplemental VEBA contribution (for retiree health benefits) the BWL makes in fiscal year 2004. Mr. Tousley reviewed the pension plan documents. Detailed reports and disclosure information were provided in a packet to all the Commissioners prior to the meeting. The Human Resources Committee reconnmends that the Pension Fund reports be referred to the Pension Fund Trustees for action. There being no further business, the meeting adjourned at 1:00 p.m. Moved by Commissioner Royal, seconded by Conunissioner Marin, that the report of the Human Resource Committee be approved (Resolution ft 2003-1-8). Board Minutes Page 3 January 30,2003 Discussion: Commnissioner Callen stated that during the meeting there was significant discussion on internal controls. The BWL is not in question,but the focus was on events happening in the nation and with the local United Way situation. Staff is looking into whether the BWL needs to improve its internal controls. Action: Carried unanimously. COMMITTEE OF THE WHOLE REPORT Present: Commissioners Callen, Duncan, Haggart, Marin, Royal (by speakerphone), Smith, and Wonch. On January 14, 2003 (5:30 p.m.), the Committee of the Whole met to discuss and consider two multi-year contracts. 1. Special Counsel General Counsel Larry Wilhite presented an overview on the process used by a special team of staff members to select the proposed seven law firms for placement on the Board of Water and Light's (BWL) Special Counsel Approved List for a two-year period. Eight proposals were received in response to the BWL's request for proposals. The expertise of the seven firms selected was reviewed as well as a firm-by-fine comparison of rates, and other relevant factors. The Committee also reviewed the BWL's legal fee expenditures for the past three fiscal years. Mr. Wilhite reported that over the next two years he and Associate Attorney, Amy Cavanaugh, plan to develop in-house expertise in four basic areas; namely, Banlcruptcy, Environmental, Labor and Real Estate to reduce special counsel fees. The Committee engaged in lengthy discussion on ways to reduce outside counsel expenditures and how large jobs could be assigned to firms on the Special Counsel Approved List. Commissioner Callen recused himself from discussions due to a potential conflict of interest with one of the law fines on the proposed special counsel list. Moved by Commissioner Wonch, seconded by Commissioner Haggart, the Committee of the Whole recommends the approval of the following resolution: esolution #2003-1-1 Special Cozensel Approved List for Period Com»zelacing February 17, 2003 to February 17, 2005 RESOLVED, That the following law firms be placed on the Board of Water and Light Special Counsel Approved List for a two-year period commencing February 17, 2003 to February 17, 2005: Page 4 Board Minutes January 30,2003 1. Canady Law Offices 2. Dickinson, Wright, PLLC 3. Knaggs, Hai-ter, Brake & Sclnieider, P.C. 4. Howard and Howard 5. Foster, Swift, Collins & Smith, P.C. 6. Vamum, Riddering, Schmidt &Howlett, LLP 7. Willingham & Cote', P.C. RESOLVED FURTHER, That the list be submitted to the Lansing City Attorney, and upon his recommendation and opinion, then to the Lansing City Council for final approval in accordance with the Lansing City Charter. The Committee further requests the following: • That Workers' Compensation Laws and Regulations be added to the list of in-house expertise. • That the names and expertise of attorneys who will be generally responsible for providing services to the BWL be provided to the Commissioners prior to the regular Board meeting on January 28, 2003. (A listing of names and expertise of attorneys who will be generally responsible for providing services is attached to this report—see Attachment A.) • That parameters be recommended to determine which special counsel services should be brought to the Board for approval prior to the work assignment. The Committee requested more information on the operational aspects of this procedure to assure the approval process does not become a barrier. (Staff's recommended procedure is attached to this report—see Attachment B.) • That periodic updates on legal fee expenditures be presented to the Committee. 2. Vegetation Management Program At the July 23 2002, the Board directed staff to solicit proposals for vegetation management services. A project team was assembled and an outside consultant was engaged to assist with the bidding process. The request for proposal process was reviewed by Doug Wood, Manager of ID System Integrity and Customer Projects. An effective Vegetation Management program is required to provide: • Reliable electric service to the customer • Safe working conditions for employees Board Minutes Page 5 January 30, 2003 • Safe environment for the general public with sensitivity to customer expectations at the lowest possible cost. To meet these requirements, the BWL has adopted national standards and a policy that: Protects the healthiness of the tree while meeting clearance requirements • Is similar to other utilities In addition, the BWL has: Promoted the"right tree in the right place"program through National Arbor Day, Local Nurseries and the"Louie"program. Taller electric distribution poles than the average utility. • Made use of alternative electric line design in certain situations as necessary. Provided information on the BWL web site. Staff plans to develop a contract administration manual that will provide: Requirements for contract compliance • Contractor performance evaluation criteria BWL and contractor relationship Staff will be evaluating other recommendations made by the consultant for implementation as appropriate; i.e., database enhancements for contract compliance and added industry benclunarking of program performance. Moved by Commissioner Marin, seconded by Commissioner Haggart, the Committee of the Whole reconnnends the approval of the following resolution: esohltion #2003- --2 Award Three-Year Vegetation Management Services Contract to YVright Tree Services Terms and conditions as provided in the November 26, 2002 Vegetation Management for Electric Lines Owned and Maintained by the Board of Water and Light specifications. Arnlual vegetation management costs will be controlled by the BWL through work issued to Wright. This work will be based on obtaining a 4-5 year trimming cycle, emergencies, capital work and budget considerations. It is estimated that amlual costs will be on the order of $750,000,not including the cost of capital work and major storm response, which are highly variable. There being no further business, the meeting adjourned at 6:45. Respectfully submitted, Nancy Duncan, Chair Pro Tenn Committee of the Whole Page 6 Board Minutes January 30,2003 Moved by Commissioner Duncan, seconded by Commissioner Smith, to approve the Connnittee of the Whole Report as presented. Action: Carried unanimously. Moved by Commissioner Dtmcan, seconded by Commmissioner Royal, on the approval of the resolution for Special Counsel (Resolution #2003-01-1). Discussion: Information previously requested by the Conmmissioners on the law firms was provided in the Board packet. Commissioner Duncan asked if the written information satisfactorily addressed the concerns raised. Coirnnissioner Royal stated that she was satisfied with the information, but noted that four of the 29 attorneys named were women, and that she hopes this low percentage will improve in the future. Where time is not an issue, staff reconunendations will be brought to the Board; where timing is an issue, the General Manager has the authority to approve staff recommendations and report to the Board. Action: Carried unanimously. Moved by Conunissioner Duncan, seconded by Commissioner Marin, on the approval of the resolution for Vegetation Management (Resolution #2003-01-2). Discussion: Commissioner Marin thanked staff for bringing more bids from which to make an informed decision. Commissioner Smith also thanked the staff for optimizing the bid process. Action: Carried unanimously. COMMITTEE OF THE WHOLE REPORT Present: Commissioners Callen, Duncan, Haggart, Marin, Royal (by speakerphone), Smith, and Wonch. On January 22, 2003 (5:30 p.m.), the Committee of the Whole met to interview three finalists for executive search services to assist the Board of Conmmissioners in the identification of qualified candidates for Director and General Manager of the Board of Water and Light. The finalists were Charles Blockett, Jr. &Associates, Hiring Solutions, Inc., and Langley and Associates. Following a structured oral interview and deliberation, the Committee of the Whole selected the following firm and recommends Board approval: e s o I ti—on-9-2 0-0—3-]--3 Award Contract to Charles Blockett, Jr. and Associates for Executive Search Services to Select a Director and General Manager RESOLVED, That the Interim General Manager is hereby authorized to negotiate a contract with Charles Blockett, Jr. and Associates, Inc, for "Executive Search Services —Director and General Manager, " and be responsible for administration of the contract and progress reporting to the Board. Board Minutes Page 7 January 30,2003 There being no further business, the meeting adjourned at 8:00 p.m. Respectfully submitted, Nancy Duncan, Chair Pro Tem Committee of the Whole Moved by Commissioner Duncan, seconded by Commissioner Wonch, to approve the Committee of the Whole Report. Action: Carried unanimously. Moved by Commissioner Duncan, seconded by Commissioner Smith, on the approval of the resolution for Executive Search Firm (Resolution #2003-01-3). Action: Carried unanimously. Commissioner Callen acknowledged Mr. Blockett who was present in the audience. GENERAL MANAGER'S RECOMMENDATIONS Background materials on items presented are olt file in the Office of the Corporate Secretary. esolution 2003-01-4 Award Three Year Agreement to Accxx Communications for Long Distance Telephone Service RESOLVED, that a three year contract for long distance telephone service be awarded to Accxx Communications. The estimated annual price over the three-year period is $11,486. Staff Rom: The BWL is currently on a month-to-month agreement with Quest Communications for long distance telephone service. Current BWL bills total $1,900 per month. Bids were solicited from six vendors with only two responding. The other bidder was Quest Communications ($18,233/year). This contract is estimated to save $34,000 over the current monthly rate for the three-year period. Moved by Commissioner Duncan, seconded by Commissioner Marin, on the approval of the resolution for Long Distance Telephone Service (Resolution #2003-01-4). Discussion: Commissioner Royal noted that Quest Communications was the primary supplier of service to Accxx and asked if this could cause a problem. Mr. Elashkar responded that based on economics, Accxx was considered the best value. Accxx has been in operation about three years. Action: Carried unanimously. Page S Board Minutes January 30,2003 esolution #2003-01-5 Award Two Year Agreenent to.Sprintfor Internet Service RESOLVED, that a two year contract for Internet Service be awarded to Sprint. The annual price over the two-year period is $11,220. Sta fReinarks: General Manager Elashkar reported that approximately six-years ago, the BWL contracted with PSI Net for its Internet Service. Fifteen months ago, PSI Net went bankrupt. The BWL is currently on a month-to-month agreement with Sprint to provide connectivity to the Internet for the BWL. Bids were solicited from three vendors. Sprint's proposal results in the lowest annual cost. Other bidders were Ameritech ($10,500/year plus $1,708 changeover cost), and AT&T ($12,156/year plus $1,308 changeover cost). The contract will save the BWL $3,240 over the current monthly rate for the two year period. Moved by Commissioner Wonch, seconded by Commissioner Duncan, on the approval of the resolution for Agreement for Internet Service (Resolution #2003-01-5). Discussion: Connnnissioner Smith expressed concern that the award was made to the same company with whom BWL had a month-to-month contract. She questioned why Sprint didn't contact the BWL sooner stating that an extended contract was better than a month-to-month basis. General Manager Elashkar responded that the month-to-month agreement was a convenience to the BWL. Action: Carried unanimously. esolution #2003-01- Designated Representative and Alternate Designated Representative— Clean Air Act RESOLVED, That Richard Peffley and Nick Burwell are respectively named the BWL's designated representative and alternate designated representative for the purpose of reporting to the Environmental Protection Agency (EPA) under the Clean Air Act; and RESOLVED FURTHER, That the designated representative and alternate designated representative are authorized to bind the BWL by their respective actions, inactions and submissions with respect to the Clean Air Act. Sta f Remarks: The Clean Air Act requires the owners of an affected source to name a designated representative pursuant to 40 CFR 72.20 and recommiends that the owner name an alternate designated representative pursuant to 40 CFR 72.22. The designated representative or alternate designated representative is required to sign and certify all submissions under the Clean Air Act. In 1993, the BWL,pursuant to Resolution No. 93-8-7 had authorized the filing of a certificate of representation naming a designated representative and alternate designated representative, John Elaslnl<ar and Roy Peffley. Page 9 Board Minutes January 30, 2003 On October 1994, the BWL filed a revised certificate of representation naming Jack Hill as alternate designated representative to replace retiring Roy Peffley. On March 27, 2000, the BWL filed revised certificates of representation naming Richard Peffley and Nick Burwell as the designated and alternate designated representatives. This resolution validates the submission of March 27, 2000 to the EPA. Moved by Commissioner Duncan, seconded by Commissioner Marin, on the approval of the resolution for Representative and Alternate Designate representative for EPA (Resolution # 2003-01-6). Action: Carried unanimously. Motion to Convene in Closed Session: By Commissioner Wonch, seconded by Commissioner Smith, to go into closed session for the purpose of discussing the settlement of a litigation claim (5:55 p.m.) Approved by a roll call vote: Yeas: Commissioners Callen,Duncan, Marin, Royal, Smith and Wonch. Nays: None Absent: Commissioner Haggart. The Board Meeting reconvened in open session at 6:15 p.m. esolution 2003-01- Settlenient of Litigation Clainz with Deei f eld Insurance Company WHEREAS, the Board of Commissioners,by Resolution 2001-5-9, authorized the Assistant General Manager to negotiate the terns and conditions for settlement of the litigation it has filed against its insurer in the Federal District Court, Wester Division, Docket No. 5:00-CV-131 and titled as Lansing Board of Water and Light v. Deerfield Insurance Co.; and WHEREAS, the Board of Commissioners has been advised as to the merits of the case, the potential adverse judgment, and the cost associated with this matter through trial; and WHEREAS, the Assistant General Manager and General Counsel with concurrence of the BWL's Special Counsel have negotiated a settlement of the litigation and recommend that the Board of Commissioners approve such settlement. RESOLVED, That the Board of Commissioners authorize the General Manager to settle this lawsuit by paying 5850,000 to Deerfield, and execute all documents related to the settlement of this matter. Page 10 Board Minutes January 30,2003 Moved by Commissioner Royal, seconded by Commissioner Duncan, on the approval of the resolution for Settlement of Litigation Clain with Dee?field Insurance Co. (Resolution #2003- 01-7). Action: Carried unanimously. UNFINISHED BUSINESS None. OLD BUSINESS None. NEW BUSINESS None. RESOLUTIONS None GENERAL MANAGER'S REMARKS Report on Eckert Station Generator #2 Damage. In response to a question raised by Commissioner Callen, Production Director Dick Peffley reported that the malfunction of the generator breaker on unit #2 at Eckert Station was caused from wood poles breaking and tripping the generator, which caused excessive heat buildup in the generator. When tested, the generator rotor showed signs of damage. Mr. Peffley noted that fiscal year 2003 budget included funds for maintenance work on unit#1 at Eckert Station. Due to the outage on unit#2, the work on unit #1 will be delayed until fiscal year 2004, and the fiends will be used for the repair of unit#2 this year. Board Retreat to Finalize Executive Search Timeline. General Manager Elashkar handed out informational materials for the Board Retreat scheduled for February 4. Executive Search Consultant Charles Blockett, Jr. will facilitate discussions on the search timeline, qualifications and job description for the new General Manager. This retreat is to supplement issues identified at the October 12, 2002 retreat held to focus on the future of the BWL. A staff project team is meeting regularly with Mr. Blockett to support executive search activities; team members are: General Manager Elashkar, Human Resources Director Mary Dwyer, Director of Metrics & Audit Kellie Willson and Corporate Secretary Mary Sova. Mr. Elashkar noted that he plans to Page 11 Board Minutes January 30,2003 form an employee/retiree committee to help determine the level of employee and retiree involvement in the selection process. The Chairman and General Manager's Meeting with Mayor Benavides. General Manager John Elashkar and Board Chairman Ron Callen met with Mayor-To-Be Tony Benavides on January 22 to discuss BWL issues. They updated him on the executive search process and eport on efforts to develop Ottawa Station. Mr. Elaslikar will review provided a chronological r the Mayor's goals to determine how the BWL can participate with the City. Commissioner Callen reported that a joint meeting with the City Council is being planried for the near future to keep the Councilmembers updated on BWL transitional activities and discuss issues of mutual interest. Survey on Employee Satisfaction This Spring. General Manager Elaslikar reported that the BWL Employee Satisfaction Survey will be slightly modified to serve three purposes: 1) serve as a gauge from previous surveys to measure our progress, 2) create a base li feedback the new the General Manager to provide a benchmark from that point forward, and 3) lement qualities and characteristics of a new General of aw neager. The Employee w General Manage to UerdistrlUuted sey will parately the Employee Input Fonn on the selection to employees by executive search consultant, Charles Blockett, Jr. BWL Recognized by HOPE Scholarship Pi fiom HOPE (Helping other People Excel) in the BWL was recently presented with a plaque appreciation for the BW�'Jo uo S��Strickler wastion presentlto reOeiEe the plaque o-r be Scholarship half m.of BWL. Communications Director COMMISSIONERS' REMARKS On behalf of the Boys and Girls Club Board, Commissioner Marin thanked Assistant General Manager Bill Cook and the BWL for supporting the Boys and Club by repairing their sign. Commissioner Wonch commended General Manager John Elasl�lcar and the staff for the organization's smooth transition while the search for a new general manager is in process. She stated that the BWL's success in continuing to function appropriately is a testament to the dedication and loyalty of the employees. General Manager Jolm Elashkar commended General Counsel Larry Wilhite and Assistant General Manger Bill Cook on negotiating a fair settlement of the litigation claim with Deerfield Insurance Company. Commissioner Callen aclaiowledged the efforts of staff and commissioners in bringing forth each of the resolutions and issues discussed this evening. Conunissioner Callen ackriowledged the presence of Paul Pratt, Assistant In. County Drain Commissioner and Legal Counsel,who was in the audience. Page 12 Board Minutes January 30,2003 EXCUSED ABSENCE On motion by Conn-nissioner Wonch and seconded by Con"nissioner Duncan, that the absence Of Commissioner Haggart be excused. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT. No one spoke. ADJOURNMENT On motion by Commissioner Royal, seconded by Commissioner Duncan, the meeting adjourned at 6:35 p.m. Is/Mary E. Sova, Secretary Filed with Lansing City Clerk February 10, 2003 Board Minutes Page 13 January 30,2003 ATTACHMENT A (Per Committee of the Whole Report of 1114103) NAMES AND EXPERTISE OF ATTORNEYS WHO WILL BE GENERALLY RESPONSIBLE FOR PROVIDING SERVICES TO THE BWL 1. Canady Law Offices a. Clinton Canady III—general commercial litigation b. Roderick C.Poiter—general commercial litigation c. Barbara B.Herdus—bankruptcy 2. Dickinson,Wright a. Kester So—bonds,contracts,related matters b. Peter Ellsworth—competition,legislative issues,litigation c. Kenneth McIntyre—antitrust d. John Norris—utility law 3. Knaggs,Harter a. Clifford A.Knaggs—environmental,administrative,public utility b. Brian Coyer—utility law c. Lawrence P. Schneider—labor, employment d. David Brake—general commercial litigation,real estate 4. Foster,Swift a. Stephen O. Schultz—labor, employment b. Stephen I.Jurmu—tax, employee benefits c. Charles Barbieri—environmental d. Kenneth T.Brooks—insurance coverage e. Melissa J. Jackson—labor, employment 5. Howard and Howard a. Michael J.Brown—utility, general commercial litigation b. Melvin McWilliams—municipal,real estate c. Brad Rutledge—municipal,bonds d. Ann Fillingliam—bonds 6. Varnum,Riddering a. Kevin C. O'Malley—commercial,real estate,transaction b. John Pestle—utility,telecommunications c. Charles M.Denton II—environmental d. Anthony R. Comden—labor,employment e. Mark Hills—construction litigation 7. Willingham and Cote' a. John A.Yeager—environmental,insurance,appellate matters b. Anthony F.Kogut—commercial litigation, administrative law c. Patricia Claire—trademark,internet business d. Raynor Zillgitt—real estate,bankruptcy Page 14 Board Minutes January 30,2003 ATTACHMENT B (Per Committee of the Whole Report of 1114103) Procedure for Retaining Special Counsel 1. In matters where timing is not an issue such as issuance of bonds or rendering of an opinion, staff will recommend for Board approval a law firm, from the approved list,to be retained and the names of the Attorneys responsible for providing the services. 2. hi matters where timing is an issue,the General Manager shall have the authority to approve staff reconuiiendations to retain a law firm from the approved list. The General Manager shall submit to the Board a quarterly report detailing special counsel expenditures for the quarter and for fiscal year to date. 15:4e FEB 10, 2003 TEL N0: 702-7037 #0103 PAGE: 1114 . 1 Preliminary—Subject to Board Approval MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Thursday, January 30, 2003 The Board of Commissioners met in rescheduled session at 5:30 p.m. in the Boardroom of the Administrative Offices, 1232 Haco Drive,Lansing, Michigan. Chairman Ron Callen called the meeting to order. r ;a Present: Commissioners Ron C. Callen,Nancy W. Duncan, Connie Marin, Diane R. Royal, Robin M. Smith,Nancy A. Wonch—6. "~ Absent: Tim Baggart—1 �1 r- co " The Secretary declared a quorum present. t� All said the Pledge of Allegiance. APPROVAL OF MINUTES Motion made by Commissioner Duncan, seconded by Commissioner Wonch, to approve the minutes of the Special Board Meeting held November 19, 2002. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF THE MEETING. No one spoke. 15:48 FEB 10, 2003 TEL N0: 702-7037 #0103 PAGE: 2/14 Page 2 Board Minutes January 30,2003 HUMAN RESOURCES COMMITTEE REPORT Present: Commissioners Callen, Haggart, andMarin Excused Absence: Commissioner Royal. �esolwion-MO-I-sl ......... The human Resources Committee met on January 9, 2003 at 12 Noon to review the status of the BWL Pension and Benefit Plans. Chief Financial Officer Dana Tousley presented an overview on the role of the Human Resources Committee and its relationship to the Pension Fund Trustees. The Human Resources Committee reviews all pension plan reports on behalf of the Board and presents its recommendation to the Pension Fund Trustees. The Trustees are charged with implementing the provisions of the pension plans. The Trustees are fiduciaries and have certain duties in the administration of the Pension Fund. Oversight responsibilities include the following: • Investment policy compliance • Specific pension fund investment objectives • Diversification of the portfolio • Meeting prudent standards for selecting investment alternatives • Monitoring the fund performance • Selecting a money manager Currently, the Chief Financial Officer is responsible for the control and management of the assets of the Defined Benefit and the Retiree Benefit.Plans, as monitored by the Pension Fund Trustees. Although a process is in place, the Committee requested that stall review current internal controls in the management of pension fund assets and to explore other options, such as an outside money manager, to further enhance internal control. The Committee also requested a review of actuarial alternatives to address the sharp increases in the recent past in the actual cost of health care insurance. Management will need to address the supplemental VEBA contribution(for retiree health benefits)the BWL makes in fiscal year 2004. Mr. Tousley reviewed the pension plan documents. Detailed reports and disclosure information were provided in a packet to all the Commissioners prior to the meeting. The Human Resources Committee recommends that the Pension Fund reports be referred to the Pension Fund Trustees for action. There being no further business, the meeting adjourned at 1:00 p.m. Moved by Commissioner Royal, seconded by Commissioner Marin, that the report of the Human Resource Committee be approved (Resolution#2003-1-8). 15:49 FED 10, 2003 TEL N0= 702-7037 #0103 PAGE: 3/14 Board Minutes Page 3 January 30,2003 Discussion: Commissioner Callen stated that during the meeting there was significant discussion on internal controls. The BWL is not in question, but the focus was on events happening in the nation and with the local United Way situation. Staff is looking into whether the BWL needs to improve its internal controls. Action: Carried unanimously. COVMTTEE OF THE WHOLE REPORT Present: Commissioners Callen,Duncan, Haggart, Marin, Royal (by speakerphone), Smith, and Wonch. On January 14, 2003 (5:30 p.m.), the Committee of the Whole met to discuss and consider two multi-year contracts. 1. Special Counsel General Counsel Larry Wilhite presented an overview on the process used by a special team of staff members to select the proposed seven law firms for placement on the Board of Water and Light's(BWL) Special Counsel Approved List for a two-year period. Eight proposals were received in response to the BWL's request for proposals. The expertise of the seven firms selected was reviewed as well as a firm-by-firm comparison of rates, and other relevant factors. The Committee also reviewed the BWL's legal fee expenditures for the past three fiscal years. Mr.Wilhite reported that over the next two years he and Associate Attorney, Amy Cavanaugh, plan to develop in-house expertise in four basic areas; namely, Bankruptcy,Environmental, Labor and Real Estate to reduce special counsel fees_ The Committee engaged in lengthy discussion on ways to reduce outside counsel expenditures and how large jobs could be assigned to firms on the Special Counsel Approved List. Commissioner Callen recused himself from discussions due to a potential conflict of interest with one of the law firms on the proposed special counsel list. Moved by Commssioner Wonch, seconded by Commissioner Haggart,the Committee of the Whole recommends the approval of the following resolution: esolution#2003 1-1 Special Counsel Approved List for Period Commencing February 17, 2003 to February 17, 2005 RESOLVED, That the following law firms be placed on the Board of Water and Light Special Counsel Approved List for a two-year period commencing February 17, 2003 to February 17, 2005: 15:49 FEB 10, 2003 TEL N0: 702-7037 #0103 PAGE: 4/14 Page 4 Board Minutes January 30,2003 1. Canady Law Offices 2. Dickinson, Wright, PLLC 3. Knaggs, Harter,Brake& Schneider,P.C. 4. Howard and Howard 5. Foster, Swift, Collins& Smith, P.C_ 6. Varnum,Riddering, Schmidt&Howlett, LLP 7. Willingham& Cote', P.C. RESOLVED FURTHER, That the list be submitted to the Lansing City Attorney, and upon his recommendation and opinion,then to the Lansing City Council for final approval in accordance with the Lansing City Charter. The Committee further requests the following: • That Workers' Compensation Laws and Regulations be added to the list of in-house expertise. • That the names and expertise of attorneys who will be generally responsible for providing services to the BWL be provided to the Commissioners prior to the regular Board meeting on January 28, 2003. (A listing of names and expertise of attorneys who wtll be generally responsible for providing services is attached to this report—see Attachment A) • That parameters be recommended to determine which special counsel services should be brought to the Board for approval prior to the work assignment. The Committee requested more information on the operational aspects of this procedure to assure the approval process does not become a barrier. (Staff's recommended procedure is attached to this report—see Attachment B) • That periodic updates on legal fee expenditures be presented to the Committee. 2. Vegetation Management Program At the July 23 2002, the Board directed staff to solicit proposals for vegetation management services. A project team was assembled and an outside consultant was engaged to assist with the bidding process. The request for proposal process was reviewed by Doug Wood, Manager of System Integrity and Customer Projects. An effective Vegetation Management program is required to provide: • Reliable electric service to the customer • Safe working conditions for employees 15:50 FEE 10, 2003 TEL N0: 702-7037 #0103 PAGE: 5/14 Board Minutes Page 5 January 30,2003 • Safe environment for the general public with sensitivity to customer expectations at the lowest possible cost. To meet these requirements, the BWL has adopted national standards and a policy that: • Protects the healthiness of the tree while meeting clearance requirements • Is similar to other utilities In addition, the BWL has: • Promoted the"right tree in the right place" program through National Arbor Day, Local Nurseries and the"Louie" program. • Taller electric distribution poles than the average utility. • Made use of alternative electric line design in certain situations as necessary. • Provided information on the BWL web site. Staff plans to develop a contract administration manual that will provide: • Requirements for contract compliance • Contractor performance evaluation criteria • BWL and contractor relationship • Staff will be evaluating other recommendations made by the consultant for implementation as appropriate; i.e., database enhancements for contract compliance and added industry benchmarking of program performance. Moved by Commissioner Marin, seconded by Commissioner Haggart, the Committee of the Whole recommends the approval of the following resolution: esohrt©n 4 M63-4 Award Three-Year Vegetation Mana ement Services Contract to Wright Tree Services Terms and conditions as provided in the November 26, 2002 Vegetation Management for Electric Lines Owned and Maintained by the Board of Water and Light specifications. Annual vegetation management costs will be controlled by the BWL through work issued to Wright. This work will be based on obtaining a 4-5 year trimming cycle, emergencies, capital work and budget considerations. It is estimated that annual costs will be on the order of $750,000, not including the cost of capital work and major storm response, which are highly variable. There being no further business, the meeting adjourned at 6:45. Respectfully submitted, Nancy Duncan, Chair Pro Tem Committee of the Whole 15:50 FED 10, 2003 TEL N0: 702-7037 40103 PAGE: 6/14 Page 6 Board Minutes January 30,2003 Moved by Commissioner Duncan, seconded by Commissioner Smith to approve the Committee of the Whole Report as presented. Action: Carried unanimously. Moved by Commissioner Duncan, seconded by Commissioner Royal, on the approval of the resolution for Special Counsel(Resolution # 2003-01-1). Discussion: Information previously requested by the Commissioners on the law firms was provided in the Board packet. Commissioner Duncan asked if the written information satisfactorily addressed the concerns raised. Commissioner Royal stated that she was satisfied with the information, but noted that four of the 29 attorneys named were women, and that she hopes this low percentage will improve in the future. Where time is not an issue, staff recommendations will be brought to the Board; where tinting is an issue, the General Manager has the authority to approve staff recommendations and report to the Board. Action: Carried unanimously. Moved by Commissioner Duncan, seconded by Commissioner Marin, on the approval of the resolution for Vegetation Management (Resolution # 2003-01-2). Discussion: Commissioner Marin thanked staff for bringing more bids from which to make an informed decision. Commissioner Smith also thanked the staff for optimizing the bid process. Action: Carried unanimously. COMMITTEE OF THE WHOLE REPORT Present: Commissioners Callen,Duncan, Haggart, Marin, Royal (by speakerphone), Smith, and Wonch. On January 22, 2003 (5:30 p.m.), the Committee of the Whole met to interview three finalists for executive search services to assist the Board of Commissioners in the identification of qualified candidates for Director and General Manager of the Board of Water and Light. The finalists were Charles Blockett, Jr. & Associates, Hiring Solutions, Inc., and Langley and Associates. Following a structured oral interview and deliberation, the Committee of the Whole selected the following firm and recommends Board approval: esolution#2003-1 Award Contract to Charles Blockett, Jr. and Associates for Executive Search Services to Select a Director and General Manager RESOLVED, That the Interim General Manager is hereby authorized to negotiate a contract with Charles Blockett, Jr. and Associates, Inc. for"Executive Search Services—Director and General Manager, " and be responsible for administration of the contract and progress reporting to the Board. 15,51 FEB 10, 2003 TEL N0: 702-7037 #0103 PAGE 7/14 Board Minutes Page 7 January 30,2003 There being no further business, the meeting adjourned at 8:00 p.m. Respectfully submitted, Nancy Duncan, Chair Pro Tern Committee of the Whole Moved by Commissioner Duncan, seconded by Commissioner Wonch, to approve the Committee of the Whole Report. Action: Carried unanimously. Moved by Commissioner Duncan, seconded by Conunissioner Smith, on the approval of the resolution for Executive Search Firm (Resolution # 2003-01-3). Action: Carried unanimously. Commissioner Callen acknowledged Mr. Blockett who was present in the audience. GENERAL MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Office of the Corporate Secretary. esalution 2003-01 Award Three Year Agreement to Accxx Communications for Long Distance Telephone Service RESOLVED, that a three year contract for long distance telephone service be awarded to Accxx Communications. The estimated annual price over the three-year period is $11,486. Staff Remarks: The BWL is currently on a month-to-month agreement with Quest Communications for long distance telephone service. Current BWL bills total $1,900 per month. Bids were solicited from six vendors with only two responding. The other bidder was Quest Communications ($18,233/year). This contract is estimated to save $34,000 over the current monthly rate for the three-year period. Moved by Commissioner Duncan, seconded by Commissioner Marin, on the approval of the resolution for Long Distance Telephone Service (Resolution # 2003-01-4). Discussion: Commissioner Royal noted that Quest Communications was the primary supplier of service to Accxx and asked if this could cause a problem. Mr. Elashkar responded that based on economics, Accxx was considered the best value. Accxx has been in operation about three years. Action: Carried unanimously. 15:51 FEB 10, 2003 TEL N0: 702-7037 #0103 PAGE: 8/14 Board Minutes Page 8 January 30,2003 esohi—don 42003-01 Award Two Year Agreement to Sprint,for Internet Service RESOLVED, that a two year contract for Internet Service be awarded to Sprint. The annual price over the two-year period is $11,220. Staff Remarks: General Manager Elashkar reported that approximately six-years ago,the BWL contracted with PSI Net for its Internet Service. Fifteen months ago, PSI Net went bankrupt. The BWL is currently on a month-to-month agreement with Sprint to provide connectivity to the Internet for the BWL. Bids were solicited from three vendors. Sprint's proposal results in the lowest annual cost. Other bidders were Ameritech($10,500/year plus $1,708 changeover cost), and AT&T ($12,156/year plus $1,308 changeover cost). The contract will save the BWL$3,240 over the current monthly rate for the two year period. Moved by Commissioner Woncl-, seconded by Commissioner Duncan, on the approval of the resolution for Agreement for Internet Service (Resolution# 2003-01-5). Discussion: Commissioner Smith expressed concern that the award was made to the same company with whom BWL had a month-to-month contract. She questioned why Sprint didn't contact the BWL sooner stating that an extended contract was better than a month-to-month basis. General Manager Elashkar responded that the month-to-month agreement was a convenience to the BWL. Action: Carried unanimously. esolution 4 2003-01- Designated Representative and Alternate Designated Representative—Clean Air Act RESOLVED, That Richard Peftley and Nick Burwell are respectively named the BWL's designated representative and alternate designated representative for the purpose of reporting to the Environmental Protection Agency (EPA)under the Clean Air Act; and RESOLVED FURTHER, That the designated representative and alternate designated representative are authorized to bind the BWL by their respective actions, inactions and submissions with respect to the Clean Air Act. Staff Remarks: The Clean Air Act requires the owners of an affected source to name a designated representative pursuant to 40 CFR 72.20 and recommends that the owner name an alternate designated representative pursuant to 40 CFR 72.22. The designated representative or alternate designated representative is required to sign and certify all submissions under the Clean Air Act. In 1993,the BWL, pursuant to Resolution No. 93-8-7 had authorized the filing of a certificate of representation naming a designated representative and alternate designated representative, John Elashkar and Roy PefJley. 15:52 FEB 101 2003 TEL N0: 702-7037 #0103 PAGE: 9/14 Board Minutes Page 9 January 30,2003 On October 1994, the BWL filed a revised certificate of representation naming Jack Hill as alternate designated representative to replace retiring Roy PefJley. On March 27, 2000,the BWL filed revised certificates of representation nanung Richard Peflley and Nick Burwell as the designated and alternate designated representatives. This resolution validates the submission of March 27, 2000 to the EPA- Moved by Commissioner Duncan, seconded by Commissioner Marin, on the approval of the resolution for Representative and Alternate Designate representative for EPA (Resolution# 2003-01-6). Action: Carried unanimously. Motion to Convene in Closed Session: By Commissioner Wonch, seconded by Commissioner Smith, to go into closed session for the purpose of discussing the settlement of a litigation claim (5:55 p.m.) Approved by a roll call vote: Yeas: Commissioners Callen, Duncan, Marin, Royal, Smith and Wonch. Nays: None Absent: Commissioner Haggart. The Board Meeting reconvened in open session at 6:15 p.m. esolution 2003-01- Settlement of Litigation Claim with Deerfield Insurance Company WI-IEREAS, the Board of Commissioners, by Resolution 2001-5-9, authorized the Assistant General Manager to negotiate the terms and conditions for settlement of the litigation it has filed against its insurer in the Federal District Court, Western Division, Docket No. 5:00-CV-131 and titled as Lansing Board of Water and Light v. Deerfield Insurance Co.; and WHEREAS, the Board of Commissioners has been advised as to the merits of the case, the potential adverse judgment, and the cost associated with this matter through trial; and WHEREAS, the Assistant General Manager and General Counsel with concurrence of the BWL's Special Counsel have negotiated a settlement of the litigation and recommend that the Board of Commissioners approve such settlement. RESOLVED, That the Board of Commissioners authorize the General Manager to settle this lawsuit by paying $850,000 to Deerfield, and execute all documents related to the settlement of this matter. 15:52 FEB 10, 2003 TEL N0= 702-7037 #0103 PAGE: 10/14 Page 10 Board Minutes January 30,2003 Moved by Commissioner Royal, seconded by Commissioner Duncan, on the approval of the resolution for Settlement of Litigation Claim with Deerfield Insurance Co. (Resolution# 2003- 01-7). Action: Carried unanimously. UNFINISHED BUSINESS None. OLD BUSINESS None. NEW BUSINESS None. RESOLUTIONS None GENERAL MANAGER'S REMARKS Report on Eckert Station Generator#2 Damage. In response to a question raised by Commissioner Callen, Production Director Dick Peffley reported that the malfunction of the generator breaker on unit #2 at Eckert Station was caused from wood poles breaking and tripping the generator, which caused excessive heat buildup in the generator. When tested, the generator rotor showed signs of damage. Mr. PefJley noted that fiscal year 2003 budget included funds for maintenance work on unit#1 at Eckert Station. Due to the outage on unit#2, the work on unit #1 will be delayed until fiscal year 2004, and the funds will be used for the repair of unit #2 this year. Board Retreat to Finalize Executive Search Timeline. General Manager Elashkar handed out informational materials for the Board Retreat scheduled for February 4. Executive Search Consultant Charles Blockett, Jr. will facilitate discussions on the search timeline, qualifications and job description for the new General Manager. This retreat is to supplement issues identified at the October 12, 2002 retreat held to focus on the future of the BWL. A staff project team is meeting regularly with Mr. Blockett to support executive search activities; team members are: General Manager Elashkar,Human Resources Director Mary Dwyer, Director of Metrics& Audit Kellie Willson and Corporate Secretary Mary Sova_ Mr. Elashkar noted that he plans to 15:52 FEB 10, 2003 TEL N0: 702-7037 #0103 PAGE 11/14 Board Minutes Page 11 January 30,2003 form an employee/retiree committee to help determine the level of employee and retiree involvement in the selection process. The Chairman and General Manager's Meeting with Mayor Benavides. General Manager John Elashkar and Board Chairman Ron Callen met with Mayor-To-Be Tony Benavides on January 22 to discuss BWL issues. They updated him on the executive search process and provided a chronological report on efforts to develop Ottawa Station_ Mr. Elashkar will review the Mayor's goals to determine how the BWL can participate with the City. Commissioner Callen reported that a joint meeting with the City Council is being planned for the near future to keep the Councilmembers updated on BWL transitional activities and discuss issues of mutual interest. Survey on Employee Satisfaction This Spring. General Manager Elashkar reported that the BWL Employee Satisfaction Survey will be slightly modified to serve three purposes: 1) serve as a gauge from previous surveys to measure our progress, 2) create a base line for the new General Manager to provide a benchmark from that point forward, and 3) get feedback on the qualities and characteristics of a new General Manager. The Employee Survey will supplement the Employee Input Form to be distributed separately to employees by executive search consultant, Charles Blockett, Jr. BWL Recognized by HOPE Scholarship Program. General Manager Elashkar reported that the BWL was recently presented with a plaque from HOPE (Helping Other People Excel)in appreciation for the BWL's $10,000 contribution to the HOPE Scholarship program. Commutucations Director John Strickler was present to receive the plaque on behalf of BWL. COMMISSIONERS' REMARKS On behalf of the Boys and Girls Club Board, Commissioner Marin thanked Assistant General Manager Bill Cook and the BWL for supporting the Boys and Club by repairing their sign. Commissioner Wonch commended General Manager John Elashkar and the staff for the organization's smooth transition while the search for a new general manager is in process. She stated that the BWL's success in continuing to function appropriately is a testament to the dedication and loyalty of the employees. General Manager John Elashkar commended General Counsel Larry Wilhite and Assistant General Manger Bill Cook on negotiating a fair settlement of the litigation claim with Deerfield Insurance Company. Commissioner Callen acknowledged the efforts of staff and commissioners in bringing forth each of the resolutions and issues discussed this evening. Commissioner Callen acknowledged the presence of Paul Pratt, Assistant Ingham County Drain Commissioner and Legal Counsel, who was in the audience. 15:53 FED 10, 2003 TEL N0: 702-7037 #0103 PAGE: 12/14 Page 12 Board Minutes January 30,2003 EXCUSED ABSENCE On motion by Commissioner Wonch and seconded by Commissioner Duncan, that the absence of Commissioner Haggart be excused. Carried unanimously. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT. No one spoke. ADJOURNMENT On motion by Commissioner Royal, seconded by Commissioner Duncan, the meeting adjourned at 6.35 p.m. /s/Mary E. Sova, Secretary Filed with Lansing City Clerk February 10, 2003 15:53 FEB 10, 2003 TEL NO: 702-7037 #0103 PAGE: 13/14 Board Minutes Page 13 January 30,2003 ATTACHMENT A (Per Committee of the If1hole Report of 1114103) NAMES AND EXPERTISE OF ATTORNEYS WHO WILL BE GENERALLY RESPONSIBLE FOR PROVIDING SERVICES TO THE BWL 1. Canady Law Offices a. Clinton Canady III—general commercial litigation b. Roderick C.Porter—general commercial litigation c_ Barbara B.Herdus—bankruptcy 2. Dickinson,Wright a Kester So—bonds,contracts,related matters b. Peter Ellsworth—competition,legislative issues,Iitigation c. Kenneth McIntyre—antitrust d. John Norris—utility Iaw 3. Knaggs,Harter a_ Clifford A Knaggs—environmental,administrative,public utility b. Brian Coyer—utility law c. Lawrence P. Schneider—labor,employment d David Brake—general commercial litigation,real estate 4. Foster,SRzft a. Stephen O. Schultz—labor,employment b_ Stephen I.Jurmu—tax,employee benefits c. Charles Barbieri—environmental d. Kenneth T.Brooks—insurance coverage e. Melissa J.Jackson—labor,employment 5. Howard and Howard a. Michael J. Brown—utility,general commercial litigation b. Melvin McWilliams—municipal,real estate c. Brad Rutledge—municipal,bonds d. Ann Fillingham—bonds 6. Varnum,Riddering a. Kevin C. O'Malley—commercial, real estate,transaction b. John Pestle—utility,telecommunications c. Charles M.Denton II—environmental d_ Anthony R. Comden—labor,employment e. Mark Hills—construction litigation 7. Willingham and Cote' a. John A.Yeager—environmental,insurance,appellate matters b. Anthony F. Kogut—commercial litigation,administrative law c. Patricia Claire—trademark,internet business d. Raynor Zillgitt—real estate,bankruptcy 15:54 FEB 10, 2003 TEL N0: 702-7037 *0103 PAGE: 14/14 Page 14 Board Minutes January 30,2003 ATTACHMENT B (Per Committee of the Whole Report of 1114103) Procedure for Retaining Special Counsel 1. In matters where timing is not an issue such as issuance of bonds or rendering of an opinion, staff will recommend for Board approval a Iaw firm,from the approved list,to be retained and the names of the Attorneys responsible for providing the services. 2. In matters where timing is an issue,the General Manager shall have the authority to approve staff recommendations to retain a law firm from the approved list. The General Manager shall submit to the Board a quarterly report detailing special counsel expenditures for the quarter and for fiscal year to date.