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HomeMy WebLinkAbout2005 Minutes BWL 125 Preliminary—Subject to Board Approval on January 24, 2006 MINUTES OF THE BOARD OF COMMISSIONERS' RESCHEDULED MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, November 8, 2005 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Gary Calkins, Ron Callen, Joseph Graves, Jr., Ifield Joseph, Santiago Rios, Robin Smith, and Nancy Wonch. Absent: Commissioner Tim Haggart. The Secretary declared a quorum present. Chairperson Smith called the meeting to order at 5:40 p.m. APPROVAL OF MINUTES Motion by Commissioner Haggart, seconded by Commissioner Calkins, to approve the minutes of the regular meeting held September 27, 2005 and special meeting held October 11, 2005 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 persons spoke COMMUNICATIONS A thank you note was received from the family of former BWL Commissioner Diane Royal in appreciation for the Board of Water and Light's kind of expression of sympathy. Chair Smith invited the family of the late Diane Royal to the podium for a presentation. Commissioner Callen read the Memorial Tribute to Diane Royal, adopted by the Board on October 11, 2005. Elaine and Renee VanTichelt, sister and niece, respectively, accepted the resolution on behalf of the Royal family. Chair Smith invited BWL employees Rosemary Sullivan and Shelley Wells to the podium to present the Board with a certificate of appreciation from the American Cancer Society. It was Board Meeting Page 126 November 8,2005 noted that Karen Seefeldt also served with Ms. Sullivan and Ms. Wells as one of three BWL team co-chairs for the Strides Against Breast Cancer Walk in Lansing held October 15, 2005. Approximately fifty walkers participated in the BWL team raising $3,964.00, which more than doubled last year's total. Chair Smith thanked and congratulated the "Strides"walkers on behalf of the Board. COMMITTEE REPORTS Resolution 2005-11-1 COMMITTEE OF THE WHOLE The Committee of the Whole of the Board of Water and Light met at the Executive Offices, Lansing, beginning at 5:45 p.m., Tuesday, October 11, 2005. Chair Pro Tern Joseph Graves, Jr. called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Ron Callen, Gary Calkins, Joseph Graves, Jr., Santiago Rios, Robin Smith, and Nancy Wonch. Commissioners Tim Haggart and Ifield Joseph were absent. PUBLIC COMMENT There were no public comments. CUSTOMER ATTITUDE SURVEY Dr. Andrew Morrison of Market Strategies, Inc. (MSI) presented an overview of the 2005 findings of the annual BWL residential customer satisfaction and performance survey. A summary report is on file with these minutes. Dr. Morrison reported that the 2005 survey was similar to the 2004 survey, but is a shorter version of prior annual surveys with the following objectives: • Provide trending information for a core subset of outcome and performance measures • Benchmark performance against other utilities, including a water utility benchmarking component • Determine the effect of the issue of lead in area drinking water and July rate increases on customer opinion of the BWL • Provide the BWL with planning information for future activities based on current results, benchmarking comparisons, and verbatim customer comments He discussed the methodology used, which involved a total of 555 interviews conducted by telephone among residential electric and water customers of the BWL. Interviewing took place from June 16 to July 3, 2005. The sample selected represented the actual distribution of customer households across the BWL service area. 127 Board Meeting November 8,2005 He compared the BWL's performance on electric measures to the MSI energy utility benchmarking database, and compared the BWL's performance on water measures to five additional water utilities. The data was weighted to reflect actual customer-type distribution by electric only, electric and water, and water only. In the residential benchmarking, comparisons were made to over 80 electric and natural gas operating utilities. In addition, 100 interviews were conducted for each of five other water utilities: • East Lansing/Meridian Water and Sewer Authority • City of Jackson Water Department • City of Columbus, Department of Public Utilities, Water Division • Illinois-American Water Company/Champaign • Ann Arbor Utilities Department, Water Utility Dr. Morrison presented trend information on selected outcomes and performance measures. He reported that the BWL continues to perform well in the MSI utility benchmarking database, although its traditionally size leads, over the benchmark average, have diminished. Positive and very positive response from BWL customers is higher than the benchmarking average on six of the seven comparable benchmarked attributes included in the 2005 study. He noted that the only measure maintaining a double-digit positive lead, compared to the benchmarked total positive response average is "reasonableness of electric rates." Two other measures, which previously held this benchmark position for positive ratings in June 2004, "overall satisfaction" and "restoring electric service," have dropped to single-digit lead positions. However, for very positive ratings, electric service restoration rebounded in its benchmark performance, with a notable 14-point lead ahead of the average, while overall satisfaction remains at a six-point advantage. Dr. Morrison further reported that compared to a year ago, the BWL is in a notably weaker position in terms of positive response to its water utility measures, when compared to the five other surveyed utilities listed above. He noted that the BWL is faced with the dual impact of a persistent and problematic news story regarding lead in the drinking water and the July 2005 electric and water rate increases. When examining demographics and differences by customer type, the findings indicated that significantly more males than females are favorable toward the BWL. Among those who have had two or more outages, significantly fewer are very favorable compared to those who have had only one outage or none. Also significantly fewer 18 to 34 year olds feel favorably toward the BWL compared to the other age groups of 35-49, 50-64 and 65 and older. Dr. Morrison reported that some erosion has occurred in the BWL's typically strong performance among electric utilities. As the analysis continues to more specific measures of perceptions of the BWL's performance, the results shed some light on the explanations for these levels of attrition in over positive response to these outcome measures. Communications Director John Strickler presented the BWL's strategies for countering the June 2005 customer satisfaction survey results. He noted that the BWL is entering a competitive environment and needs to ensure that our customers understand how the BWL is different from Board Meeting Page 128 November 8,2005 investor-owned utilities and what the BWL has to offer. He reviewed the public ownership campaign that has been under development since 2004. Campaign components include mass media, messages at multiple points of contact, enhanced web site contact, more visibility for lead replacements, customized informational events, speakers bureau, and a BWL "Community Report." Mr. Strickler noted that customers, who see or hear BWL advertisements have a higher favorability, are more likely to be aware of municipal ownership and have more positive perceptions about the utility across a wide range of attributes. There was lengthy discussion regarding the Board's role in communicating with the citizens of Lansing about the benefits the BWL offers as a municipally-owned utility. The Commissioners concurred with the continued goal of providing BWL customers with information that builds awareness and loyalty to the BWL as a provider of utility services. CONTROLS AND RISK MANAGEMENT Chair Pro Tern Joseph Graves announced that if there were no objections, the agenda item regarding the Internal Auditor's report on controls and risk management would be pulled from the agenda due to time constraints. This item will be scheduled for the next Committee of the Whole meeting. The Commissioners concurred. EXECUTIVE SESSION Moved by Commissioner Smith, seconded by Commissioner Calkins, to go into executive session to consult with legal counsel regarding trial or settlement strategy in connection with specific pending litigation(7:15 p.m.). The roll was called. Yeas: Commissioners Calkins, Callen, Graves, Rios, Smith, and Wonch. Nays: None Absent: Commissioners Haggart and Joseph. Carried unanimously. Moved by Commissioner Wonch, seconded by Commissioner Calkins, that the Committee return to open session. Carried unanimously. The Committee of the Whole returned from executive session at 8:05 p.m. There being no further business, the Committee of the Whole adjourned at 8:05 p.m. Respectfully submitted, Joseph E. Graves, Jr., Chair Pro Tern Committee of the Whole 129 Board Meeting November 8,2005 Motion by Commissioner Graves, seconded by Commissioner Joseph, to receive the Committee of the Whole report as presented. Action: Carried unanimously. Resolution 2005-11-2 HUMAN RESOURCES COMMITTEE REPORT A meeting of the Human Resources Committee of the Board of Water and Light was held at the Executive Offices, Lansing, at 4:30 p.m., Tuesday,November 8, 2005. Committee Chair Santiago Rios, called the meeting to order and asked the secretary to call the roll. The following members of the Human Resources Committee were present: Commissioners Gary Calkins, Joseph Graves, Jr., Santiago Rios, Ron Callen(alternate) and Robin Smith(ex officio.) Also present were Commissioners Ifield Joseph and Nancy Wonch(arrived at 4:35 p.m.). PUBLIC COMMENT BWL retiree Ron Byrnes of Mecosta, Michigan, noted that it was his understanding the Human Resources Committee had under consideration the issue of immediate pension vesting for the three Board appointed positions. He stated that he finds it hypocritical to tell retirees there is no money to pay COLA, when there are excess funds in the Defined Benefit Pension Fund. Commissioner Rios responded that the committee had discussed the immediate vesting option at a previous meeting; however, it was decided not to recommend action at this time, but to discuss this option in the future as it related to all employees at the BWL. GENERAL MANAGER'S PERFORMANCE EVAL UATION Committee Chair Rios announced that General Manager Sanford Novick has requested a closed hearing for his performance evaluations as permitted under Section 8 of the Open Meetings Act (MCL 15.268 regarding closed sessions and permissible purposes.) Moved by Commissioner Graves, seconded by Commissioner Callen, to go into executive session. Carried unanimously. The Committee entered into executive session at 4:35 p.m. The Committee returned from executive session at 5:30 p.m. Chair Rios reported that at the October Ilth special meeting, the Board resolved to extend General Manager Novick's contract. He noted that the reflection of the performance evaluation of each Commissioner indicated that Mr. Novick's contributions and accomplishments have been very positive, and the Board looks forward to continued progress in all the areas he has brought to fruition at the BWL. Board Meeting Page 130 November 8,2005 The Human Resources Committee, therefore, recommends that a contribution in the amount of $7,000 be made in lieu of a performance increase, generally reflected in base pay, to the Executive 401 Plan (Plan). An amendment to the Plan to permit the Board to make such a contribution on behalf of the General Manager will be required. Formal resolutions to effectuate these recommendations will be presented to the Board under the "Resolutions" order of business. The Human Resources Committee meeting adjourned at 5:30 p.m. Respectfully submitted, Santiago Rios, Chair Human Resources Committee Motion by Commissioner Joseph, seconded by Commissioner Graves, to accept the report of the Human Resources as presented. Action: Carried unanimously. MANAGER'S RECOMMENDATIONS General Manager Novick reported there are no recommendations to present to the Board at this time. UNFINISHED BUSINESS Commissioner Graves stated that it is his understanding an ad hoc committee has been formed to review the Board's Rules of Administrative Procedure. He expressed an interest in this area and requested to be appointed to the ad hoc committee. He also asked when the committee would be meeting. Chair Smith responded that a four-member ad hoc committee is already in place. She urged the Commissioners to submit any concerns with respect to the current Rules to the ad hoc committee as early as possible for review sometime in December. Also, any Commissioner interesting in attending the meeting is free to do so. The committee plans to submit a preliminary draft to the Committee of the Whole for review and discussion before it is sent to the Board for action. NEW BUSINESS No new business. RESOLUTIONS Resolution#2005-11-4 RESOLUTION TO AMEND ICMA EXECUTIVE 401 MONEY PURCHASE PLAN#108824 131 Board Meeting November 8,2005 WHEREAS, the Commissioners of the Lansing Board of Water and Light ("Employer") acknowledge that the Director and General Manager ("Participant") renders a valuable service to the Board of Water and Light; and WHEREAS, the Employer desires to amend the defined contribution ICMA 401A PLAN #108824 ("Plan")to allow contributions for the Participant in the following manner: • The General Manager shall be the only eligible active participant in the Plan • The Plan will allow for immediate vesting • The Normal Retirement Age shall be fifty-five • Employer contributions on behalf of the Participant shall not exceed 10% of earnings • Employer contributions shall be contributed on a bi-weekly basis • The Plan year shall be made effective as of August 18`h, 2005. NOW THEREFORE, IT IS RESOLVED, That the Employer amend the ICMA 401A PLAN money purchase retirement plan(the "Plan")to reflect the changes listed above. RESOLVED FURTHER, That the Senior Vice President of Finance shall be granted authority to amend the Plan to reflect the changes listed above. Motion by Commissioner Wonch, seconded by Commissioner Graves, to approve the resolution. Action: Carried unanimously. Resolution 2005-11-3 GENERAL MANAGER'S COMPENSATION WHEREAS, the Board of Commissioners of the Board of Water and Light discussed the compensation package for the Director and General Manager("General Manager") at a Board meeting on October 1lth, 2005; and WHEREAS, the Board agreed that the terms of the General Manager's compensation package were still being negotiated; and WHEREAS, the Board agreed that the General Manager's compensation package terms would be finalized within thirty business days for subsequent Board action. RESOLVED, That pursuant to an agreement with the General Manager, an amendment will be made to the ICMA defined contribution 401A Plan ("Plan") for the purpose of providing contributions on behalf of the General Manager. Board Meeting Page 132 November 8,2005 RESOLVED FURTHER, That the contributions are made in lieu of a performance increase that is generally reflected in base pay. RESOLVED FURTHER, That the General Manager waives his right to any post-retirement health benefits. RESOLVED FURTHER, That the contribution to the Executive 401 Plan shall be seven thousand dollars ($7,000.00) and such contribution shall be evenly divided and contributed bi- weekly, effective as of August 18th, 2005 and continuing up to the contract expiration period. RESOLVED FURTHER, That the General Manager's current employment contract be amended to reflect this action. Motion by Commissioner Calkins, seconded by Commissioner Wonch, to approve the resolution. Commissioner Calkins commented that General Manager Novick has done an excellent job for the BWL. He expressed his appreciation for the various initiatives Mr. Novick has set forth and noted that he is looking forward to seeing that they are followed through. Commissioner Rios stated that this Board appreciates the work and accomplishments of General Manager Novick. The Commissioners are pleased that Mr. Novick has agreed to extend his contract with the BWL for another year to help overcome current and potential difficulties facing the utility in the horizon. Commissioner Rios also noted that among the achievements over the past year, there was also controversy and criticism, some of which were unfounded. He commented that the dollar amount that has been approved for Mr. Novick is not reflective of what, in a perfect world, might more appropriately reflect the Board's appreciation and gratitude for a job well done. Commissioner Wonch echoed the comments expressed by Commissioner Rios and Calkins. She noted that from reading the "Breakfast with Sandy" notes, the one message that clearly comes across is that transition is very difficult. She stated that strides made at the BWL are in large part due to General Manager Novick and all the employees who have worked together to collaborate, even when they do not always agree, to build consensus in order to achieve the BWL's objectives. Commissioner Callen suggested implementing a procedure to start the General Manager's performance evaluation earlier in order to expedite and streamline the reappointment and contract renewal process. He also expressed appreciation to General Manager Novick on his accomplishments. Commissioner Joseph also echoed earlier comments made by the Commissioners. He emphasized that the General Manager's contract renewal should not be such a long process. He stated that he plans to promote a more efficient performance review and contract renewal process. In closing, he congratulated General Manager Novick on a job well done. 133 Board Meeting November 8,2005 Commissioner Graves commented that he recently had the opportunity to attend the American Public Power Association (APPA) Policymakers Workshop, "Governing in a Changing Marketplace." In addition to an excellent training and learning opportunity, he networked with many commissioners, city council members and chief executive officers from around the country. Commissioner Graves stated that after listening to the various issues facing municipally-owned utilities, he left appreciating what the BWL is doing. He noted that there is still opportunity for growth, but in general much of what was discussed is currently in place at the BWL, which is a reflection of the excellent job General Manager Novick is doing. He concurred with earlier comments made by the Commissioners. Chair Smith also echoed the sentiments of the Commissioners. She stated that General Manager Novick has been creative and innovative, and in some cases even revolutionary in terms of what he has accomplished at the BWL. She noted that organizational transitions often cause controversy, however, Mr. Novick is getting the job done. In defense of the time the Board invested in discussing Mr. Novick's job performance and compensation, she commended the Commissioners for their thoroughness and careful deliberation in considering a fair compensation for the General Manager that was fully supported by the Board. Commissioner Smith thanked General Manager Novick and his staff for the many accomplishments over the past fiscal year. Action: Carried unanimously. Resolution 2005-11-5 BOARD MEETING SCHEDULE 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 2006 as follows,unless otherwise notified or as a result of date conflicts with rescheduled City Council meetings: 2006 Tuesday January 24 Tuesday March 28 Tuesday May 23 Tuesday July 25 Tuesday September 26 Tuesday November 28 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 8, 2006. Board Meeting Page 134 November 8,2005 Motion by Commissioner Callen, seconded by Commissioner Wonch, to approve the resolution. Action: Carried unanimously. GENERAL MANAGER'S REMARKS General Manager Novick stated that since there will not be another regularly scheduled meeting before the holidays, he wanted to wish all the Commissioners and employees a happy Thanksgiving and a happy holiday season. General Manager Novick reported that the employees have made some dramatic gains in safety performance through the first three months of the fiscal year. He thanked the employees for their commitment to improve the BWL's safety performance. General Manager Novick expressed his appreciation to the Commissioners for their support. He agreed with earlier comments made by the Commissioners that transitions are difficult because we are faced with a rapidly changing environment. The BWL is trying to not only keep up, but catch up at the same time. He expressed his appreciation to the management team for their support and efforts to keep up. He added that by doing the right things for the right reasons, the BWL should hopefully look forward to a successful calendar year in 2006 and fiscal year 2005- 06. COMMISSIONERS' REMARKS Commissioner Calkins requested an update on coal delivery issues and Eastern coal purchases. General Manager Novick reported that staff is assembling a fact sheet on coal delivery issues for the Commissioners' reference. Senior Vice President of Operations Bill Cook reported that the BWL's goal is to maintain a 30 to 40-day supply of coal on hand locally. In order to effectively maintain an adequate on-site supply of fuel, the BWL purchased 80,000 tons of Eastern coal and began burning it at Eckert Station in late October. It is expected to burn throughout November and into December. During this time, the Erickson Station pile of PRB coal will be stockpiled to reach the desired 150,000 to 200,000 ton level. The BWL maintains a diversity of fuel supply options with Erickson able to burn PRB coal and Eckert able to burn both PRB and Eastern coal. Transportation remains a concern with limited options to Canadian National Railroad as the major railroad servicing Lansing. Belle River is able to burn PRB and Colorado coal and its transportation and storage ability are separate from BWL internal generation facilities. General Manager Novick reported that the BWL is continuing to work with both the Union Pacific Railroad and Canadian National Railroad as well as other utilities and our congressional delegation to effect improvement in the performance of coal deliveries to the BWL. EXCUSED ABSENCES On motion by Commissioner Wonch and seconded by Commissioner Joseph, that the absence of Commissioners Haggart be excused. Carried unanimously. 135 Board Meeting November 8,2005 PUBLIC COMMENTS No comments. COMMISSIONERS COMMENTS Commissioner Callen stated that he knows all the Commissioners join him in asking the General Manager to compliment the employees for their generous contributions and voluntary efforts to the Capital Area United Way campaign. A total of$91,790 was pledged. Chair Smith noted that she recently attended the employees' "End of a Great United Way Campaign" soup and sandwich luncheon held at the BWL on November P. She was impressed with the employees' enthusiasm and friendliness. Chair Smith also thanked the family of former Commissioner Diane Royal; namely Elaine VanTichelt and Renee VanTichelt, for attending the meeting to accept the Board's memorial tribute resolution. ADJOURNMENT On motion by Commissioner Joseph, seconded by Commissioner Calkins, the meeting adjourned at 6:30 p.m. /s/Mary Sova, Corporate Secretary Filed with Lansing City Clerk November 18, 2005 117 FINAL Approved 111081105 MINUTES OF THE BOARD OF COMMISSIONERS' SPECIAL MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, October 11, 2005 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Ron Callen, Gary L. Calkins, Joseph Graves, Jr., Santiago Rios, Robin M. Smith, and Nancy Wonch Absent: Commissioners Tim Haggart and Ifield Joseph. The Secretary declared a quorum present. Chairperson Smith called the meeting to order at 4:00 p.m. PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT. No persons spoke. Resolution 2005-10-1 HUMAN RESOURCES COMMITTEE REPORT A meeting of the Human Resources Committee of the Board of Water and Light was held at the Executive Offices, Lansing, at 12:00 noon, Tuesday, September 20, 2005. Committee Chair Santiago Rios, called the meeting to order and asked the secretary to call the roll. The following members of the Human Resources Committee were present: Commissioners Gary Calkins, Joseph Graves, Jr., Tim Haggart, Santiago Rios and Robin Smith, ex officio. PUBLIC COMMENT There was no public comment. Special Board Meeting Page 118 October 11,2005 PENSION FUND MATTERS Pension Fund Manager Recommendation Senior Vice President of Finance and Administration Dennis McFarland reported that utilizing the expertise of the BWL's pension consultant LCG Associates, staff has conducted an extensive search for investment managers to manage approximately 30% of the Defined Benefit (DB) Pension Fund to be invested in large cap equities. The search was conducted in accordance with the investment policy effective November 23, 2004. Mr. McFarland noted that the Human Resources Committee is a subcommittee of both the Board and the DB Pension Fund Trustees charged with oversight responsibility of the Plan and Trust Investment. The Investment Policy gives the Human Resources Committee authority to make investment manager selections and terminations for the DB Pension Fund. Mr. McFarland reported that LCG used both qualitative and quantitative criteria to reduce the qualified candidates to four finalists in each of the large cap growth and large cap value categories. An internal committee, comprised of individuals from the Finance, Accounting and Human Resources functions, evaluated and ranked the finalists. Those rankings were reviewed with LCG and recommendations were made. Following discussion, the following committee action was proposed: WHEREAS, the Trustees of the Lansing Board of Water and Light Defined Benefit Plan for Employees' Pensions has adopted an investment policy effective November 23, 2004, and WHEREAS, that policy delegated authority to the Human Resources Committee to select and terminate investment managers, and WHEREAS, a search has been conducted to identify qualified professional, independent investment managers, and WHEREAS, the Human Resources Committee has determined Wells Capital Management and LSV Asset Management to be such qualified investment managers. RESOLVED, That Wells Capital Management and LSV Asset Management be retained to manage the large cap growth and large cap value portion, respectively, of the Defined Benefit Pension Fund in accordance with the Fund's investment policy. On motion by Commissioner Calkins, seconded by Commissioner Graves, to approve the resolution. Carried unanimously. Chair Rios noted that this information would be communicated to the Pension Fund Trustees at their annual meeting scheduled for November. Page 119 Special Board Meeting October 11,2005 Agenda Items for the Pension Fund Trustees Meeting Mr. McFarland reported that if the Committee has no objection, staff would be bringing the following proposals to the Pension Fund Trustees in November for consideration: 1. To revise the VEBA Trust Investment Policy. The current investment policy was approved April 24, 2001. Since then, the VEBA has accumulated up to $30 million. Staff would like to recommend amending the policy to clarify the statement of intent and move toward a more appropriate asset allocation. 2. To reduce the investment options in the Defined Contribution (DC) Plan to 15 to 20. The DC Plan currently has 38 options. Due to performance considerations, management plans to eliminate 9 of the investment options currently in the DC Plan right away, which will leave 29 options. Recommendation will be presented to reduce that number even further. Discussion has already begun with employees on the need for a best in class plan. 3. To revise the Defined Benefit (DB) Pension Investment Policy to incorporate a diversity consideration in money manager selection. Recommendation would be presented to amend the policy by adding a paragraph to indicate that once all the criteria has been met to fulfill the Trustees' fiduciary role, the diversity of a money manager can be taken into account in making a selection. After lengthy discussion, the Committee consented on bringing the proposals to the Pension Fund Trustees for discussion at the November meeting. BOARD STAFF APPOINTEE PERFORMANCE EVALUATIONS Committee Chair Rios announced that the three Board Staff Appointees have requested a closed hearing for their performance evaluations as permitted under Section 8 of the Open Meetings Act (MCL 15.268 regarding closed sessions and permissible purposes.) Moved by Commissioner Calkins, seconded by Commissioner Graves, to go into executive session. Carried unanimously. The Committee entered into executive session at 12:30 p.m. Moved by Commissioner Calkins, seconded by Commissioner Smith that the Committee return to open session. Carried unanimously. The Committee returned from executive session at 1:50 p.m. Chair Rios reported that the Committee had extensive discussion with regard to the following three components related to the annual performance for the three Board Appointees: Special Board Meeting Page 120 October 11,2005 1. Individual performance evaluation summaries completed by each of the Commissioners for the General Manager, Internal Auditor and Corporate Secretary. 2. Reappointment of each of the Board Appointees to their respective positions. 3. An immediate pension vesting option for the three Board-appointed positions. Chair Rios reported that consensus was reached on the following: • The Committee had the opportunity to review the written performance evaluation summaries for the Board Appointees, and it was concluded that each has been performing at an excellent level over the past fiscal year. The Committee agreed that each of the Appointees be given the opportunity to extend their employment contract with the Board of Commissioners for another year. The Committee recommends that the employment contract and the issue of compensation be discussed further with the full Board for consideration. The Staff Appointees have the option to request a closed session during continued discussion on their performance evaluations. • The Committee deferred the immediate vesting option pending further review and discussion. This item will be placed on the Human Resources Committee agenda for the immediate future. • Draft performance objectives for FY 2006 from the General Manager, Internal Auditor and Corporate Secretary are to be submitted to the Human Resources Committee for review and subsequent referral to the Committee of the Whole. OTHER MATTERS At the request of Commissioner Calkins, the Board's Travel Policy was referred to the Committee of the Whole for a status report and recommended changes. On motion by Commissioner Calkins, seconded by Commissioner Smith, the Human Resources Committee adjourned at 2:16 p.m. Respectfully submitted, Santiago Rios, Chair Human Resources Committee Motion by Commissioner Wonch, seconded by Commissioner Callen, to approve the report of the Human Resources Committee as presented. Page 121 Special Board Meeting October 11,2005 Discussion: Commissioner Graves asked that the immediate vesting option be taken up for discussion at this time. Chair Smith responded that the Human Resources Committee has recommended deferring this item until such time that additional research is completed and information on the costs for such a benefit is received. Commissioner Rios stated that the Human Resources Committee plans to discuss pension vesting in the near future. Human Resources Director Mary Dwyer noted that a letter addressing trends with pension vesting in the utility industry was sent to the Commissioners in mid-September for review. Action: Carried unanimously. PERFORMANCE EVALUATIONS Chair Robin Smith announced that the three Board Staff Appointees have requested a closed hearing for their performance evaluations with the full Board as permitted under Section 8 of the Open Meetings Act (MCL 15.268 regarding closed sessions and permissible purposes.) The Chair stated that a motion is now in order to hold an executive session to consider performance evaluations for the three Staff Appointees. Motion by Commissioner Calkins, seconded by Commissioner Wonch, to go into executive session. Carried unanimously. The Board entered into executive session at 4:15 p.m. Motion by Commissioner Wonch, seconded by Commissioner Rios that the Board return to open session. Carried unanimously. The Board returned from executive session at 5:40 p.m. Resolution #2005-10-2 REAPPOINTMENT OF THE CHARTER POSITIONS OF DIRECTOR AND GENERAL MANAGER, CORPORATE SECRETARY, AND INTERNAL AUDITOR The Board's Rules of Administrative Procedures specify that the Board is to appoint a Director and General Manager, Corporate Secretary, and Internal Auditor, respectively, at the its first regular meeting following July 1 of each year or as soon thereafter as may be appropriate. RESOLVED, That the Board of Commissioners hereby reappoints the following individuals to the Charter positions of Director and General Manager, Corporate Secretary and Internal Auditor for fiscal year 2005-2006, or, until a successor is appointed, whichever last occurs: Special Board Meeting Page 122 October 11,2005 Sanford Novick, Director and General Manager -and- Mary Sova, Corporate Secretary -and- Glenn Holloway, Internal Auditor RESOLVED, That Mary Sova and Glenn Holloway's current employment contracts be amended to reflect the new reappointment and contract commencement period of July 1st, 2005. RESOLVED FURTHER, That Sanford Novick's current employment contract be amended to reflect the new reappointment and continue beyond the fiscal year 2006 up to and including August 18, 2006. Further that his current contract be amended to reflect the new contract commencement period. Resolution #2005-10-3 PERFORMANCE EVALUATION AND COMPENSATION INCREASES FOR CHARTER POSITIONS OF DIRECTOR AND GENERAL MANAGER, CORPORATE SECRETARY, AND INTERNAL AUDITOR WHEREAS, the Board of Commissioners separately discussed the performance evaluations and compensation increases for the three appointed charter positions: Director and General Manager, Corporate Secretary, and Internal Auditor. WHEREAS, the Board considered information provided to them, including current objectives during fiscal year 2004-05 and self-evaluations, current contract, current skill family, current salary and range placement, compensation market analysis, and the non- bargaining unit performance increase matrix. WHEREAS, the Board discussed the compensation package for the Director and General Manager, Sanford Novick. The terms of the compensation package are currently under negotiation and will be finalized within thirty days for subsequent Board action. RESOLVED, That the Corporate Secretary, Mary Sova, is hereby eligible to receive a compensation increase of 2.5% effective as of July 1, 2005. RESOLVED FURTHER, That pursuant to the current contract with the Internal Auditor, Glenn Holloway, that no additional compensation increase occur for the past fiscal year 2004-05. Motion by Commissioner Calkins, seconded by Commissioner Wonch, to approve the resolutions on the reappointment of the three Board-Staff Appointees and Compensation Increases. Discussion: Commissioner Rios reported that as part of the performance evaluation process all the Commissioners completed Performance Evaluation Forms for each of the Page 123 Special Board Meeting October 11,2005 three Staff Appointees. The Human Resources Committee then reviewed the summary forms that were compiled for each of the Staff Appointees. He briefly recapped the discussion held by the Commissioners during the executive session and noted that without exception the Commissioners agreed that the Staff Appointees' job performance was excellent. He also reported that the Board engaged in extensive deliberation regarding compensation and the immediate pension vesting option. Input was received from General Manager Novick in terms of his compensation package. Commissioner Rios commented that after discussion, the Commissioners requested more information regarding potential costs of immediate pension vesting and the ramifications of providing this benefit. The Commissioners decided not to address the immediate vesting issue at this meeting. Action: Carried unanimously. Chair Smith invited Commissioner Callen to read the following resolution: Resolution #2005-10-4 MEMORIAL TRIBUTE TO DIANE R. ROYAL WHEREAS, The members of the Board of Commissioners wish to express their sadness over the passing of former Commissioner Diane R. Royal on August 9, 2005. She was a pillar of strength on this Board. WHEREAS, Diane R. Royal was a woman of vision and conviction with genuine concern for utility-related issues and their relationship to the citizens. Her intelligence, integrity and strong convictions exerted a significant impact on the Board of Water and Light by ensuring the financial strength of this Utility remained strong and that electric, water and steam were reliable and delivered at the lowest price possible; and WHEREAS, Diane R. Royal was appointed Commissioner to the Lansing Board of Water and Light on October 9, 1995 and served until February 18, 2004. She was elected Vice Chair of the Board in 1996 and held that post four times. She became Chair of the Board in 1998 and also served in that capacity four times. As a Board Commissioner, Diane R. Royal played an integral role in a variety of matters affecting this utility. Her expertise in utility law and depth of experience in the utility industry brought an exceptional understanding of policy-setting responsibilities. Her deep commitment to the Board of Water and Light and the City of Lansing was well demonstrated by the countless hours she contributed to this Board. Her involvement in public issue advocacy on behalf of disadvantaged people clearly demonstrated the highest qualities of citizenship and unselfishness. She may never know how many lives she has touched,but there are many who know her value; and Special Board Meeting Page 124 October 11,2005 RESOLVED, That the Board of Water and Light Commissioners, hereby officially honors and salutes the life, leadership and achievements of Diane R. Royal. In special session this llth day of October, 2005, it is with respect for her contributions to this utility and community that we extend this expression of condolences to the family of Diane R. Royal. Commissioner Callen commented that he had worked closely with former Commissioner Diane Royal and that he had enormous respect for her. He moved the adoption of the resolution, and the motion was seconded by Commissioner Wonch. Carried unanimously. Chair Smith requested that the family of Diane Royal be invited to the next Board meeting to accept a formal presentation of the memorial tribute. COMMISSIONERS COMMENTS Chair Robin Smith invited the Commissioners and staff to Lansing Community College Foundation's upcoming "Motown" Lip Sync event. She noted that Commissioner Rios and many others from the community would be participating in this program. EXCUSED ABSENCES On motion by Commissioner Wonch and seconded by Commissioner Graves, that the absences of Commissioners Haggart and Joseph be excused. Carried unanimously. ADJOURNMENT On motion by Commissioner Callen, seconded by Commissioner Wonch, the meeting adjourned at 5:47 p.m. /s/Mary E. Sova, Corporate Secretary Filed with Lansing City Clerk October 18, 2005 107 FINAL Approved 111081105 MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, September 27, 2005 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Gary Calkins, Ron Callen, Joseph Graves, Jr., Tim Haggart, Ifield Joseph, and Robin Smith. Absent: Commissioners Nancy Wonch and Santiago Rios The Secretary declared a quorum present. Chairperson Smith called the meeting to order at 5:30 p.m. APPROVAL OF MINUTES Motion by Commissioner Haggart, seconded by Commissioner Calkins, to approve the minutes of the regular meeting held July 26, 2005. 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 persons spoke COMMUNICATIONS A letter from John M. Gear regarding lead replacement. Referred to staff for response with a copy directed to the Board. COMMITTEE REPORTS Chair Smith announced that the report of the Human Resources Committee regarding its meeting of September 20, 2005 has been pulled. A Special Board Meeting has been scheduled for October 11, 2005 to receive the report and to conduct performance evaluations for the three Board-Staff Appointees. Board Meeting Page 108 September 27, 2005 Resolution 2005-9-1 FINANCE COMMITTEE REPORT A meeting of the Finance Committee of the Board of Water and Light was held at the Executive Offices, Lansing, at 12:00 noon, Monday, September 26, 2005. Finance Committee Chair Ron Callen, called the meeting to order and asked the secretary to call the roll. The following committee members were present: Commissioners Robin Smith, Nancy Wonch, Ron Callen and alternate member Joseph Graves, Jr. PUBLIC COMMENT There was no public comment. AUDITED FINANCIAL STATEMENTS FOR FISCAL 2005 Senior Vice President of Finance and Administration Dennis McFarland introduced Bob Pekrul, Manager in charge of Plante & Moran's BWL audit engagement. Mr. Pekrul informed the Committee that Douglas Rober, Partner of Plante & Moran was unable to attend the meeting due to the untimely passing of his mother. Mr. Pekrul introduced members of his team, auditors Jaclyn Simon and Henderson Harris. Mr. McFarland reported that the audit of the financial statements of the BWL Enterprise Fund for the year ended June 30, 2005 was a clean audit with respect to issues raised in the management letter and year-end entries that had to be made. He referred to the experience from last year involving various environmental entries that were made in addition to adjustments to the carrying value on the Ottawa Plant and other issues. He noted that staff got through the audit process much more quickly this year than in prior years with completion of three weeks earlier than last year. Mr. McFarland thanked his staff and representatives of Plante & Moran for working diligently in the joint venture of delivering the financial statements to the Board before the end of the first quarter of the subsequent year. Mr. McFarland reported that the audit of the financial statements for the Defined Benefit Plan, Defined Contribution Benefit Plan and the Retiree Benefit Plan and Trust (VEBA)would be submitted to the Pension Fund Trustees at their annual meeting in November. In reviewing the scope and results of the audit, handouts were distributed as a companion to Plante & Moran's presentation. Ms. Jaclyn Simon reported that the communication to the Finance Committee dated September 2, 2005, explains the auditor's objective in an audit and management's responsibilities in financial reporting. She noted that the end goal of a sound internal control structure is to assure the reliability of financial reporting, compliance with applicable laws and regulations, and effectiveness and efficiency of operations. Ms. Simon explained the methods used to account for significant unusual transactions and the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. She informed the Committee that there were no unusual transactions or controversial or significant emerging areas for which new accounting policies were needed except as disclosed in the financial statements as follows: 109 Board Meeting September 27,2005 Note I regarding the adoption of SFAS No. 71 in accounting for water capital contributions. Note 6 regarding the adoption of SFAS No. 71 in accounting for the energy cost adjustment. Note 11 to the financial statements regarding the adoption of GASB No. 40, Deposit and Investment risk Disclosures. Ms. Simon further reported on management judgments and accounting estimates. She stated that auditing standards call for a report on accounting estimates that are particularly sensitive because of their significance to the financial statements or because of the possibility that future events affecting them might differ markedly from management's current judgments. She reported that management, with the guidance and analysis provided by the BWL environmental department and contracted consultants, feel they have come to a reasonable estimate of the liability to be incurred in relation to the environmental remediation liability of the North Lansing Landfill. She also reported that as a result of their audit, no significant adjustments were made to the financial statements. She presented a summary of unrecorded possible adjustments through the course of the audit, which were determined by management to be immaterial, both individually and in the aggregate, to the financial statements taken as a whole and the auditors concur with management's opinion. She noted that there were no disagreements with management over the application of accounting principles or the basis for management's judgments about accounting estimates. Also, there were no disagreements regarding the scope of the audit, disclosures to be included in the financial statements or the wording of the auditor's report. Mr. Bob Pekrul reviewed the following financial information: Comparison of Operating Revenue by expense category from 2002 - 2005. The Committee requested a staff report on changes to operating expenses in the Administrative and General categories in FY 2004 and 2005 to determine what portion of the cost is for base labor, health care, environmental and other expense. Comparison of Operating Income (Loss) by utility category from 2001 —2005. Bond Debt Service Requirements comparison from 2003 to 2010. It was noted that a large piece of the Bond Debt Service Requirement is due to the Central Utilities Complex of which General Motors reimburses the BWL. Comparison of Kilowatt Hours Generated vs. Purchased from 2000-2005. Comparison of Significant Fuel Costs from 2000—2005. Mr. Pekrul reviewed Management Letter comments concerning the following issues and management's responses, which is on file with the official Board materials: • Accounts Receivable • Coal Inventory Controls • Stores and Production Parts Inventory Board Meeting Page 110 September 27,2005 • Stores Inventory Access and Control over Requisitions • Construction Work-in Progress (CIP) • Capitalized Interest on CIP Following lengthy discussion, Mr. McFarland stated that relative to where the organization was last year and the prior year, comments made in the Management Letter are manageable. With regard to the Committee's sensitivity to issue #2 regarding coal inventory control, he gave assurance that management will continue to address this problem. Committee members pointed out that this issue has appeared in past Management Letters the last several years. Mr. McFarland noted that the Internal Auditor is evaluating coal inventory controls and will be submitting the findings and recommendations on this issue. Moved by Commissioner Wonch, seconded by Commissioner Smith to authorize the General Manager to bring forth a resolution to the full Board on the acceptance of the 2005 audited financial statements for the BWL Enterprise Fund and to direct appropriate filings with the State Treasurer. Carried unanimously. JULYFINANCIAL REPORT Senior Vice President of Finance and Administration Dennis McFarland reviewed the financials for the one-month ended July 31, 2005. He reported that net income was $2 million higher than budget. The increase is the result of the sale of excess S02 Allowances of$3.6 million, which was offset by timing differences in fuel cost purchases of$1.2 million. The revised net income projection for Fiscal 2006 stands at $2.3 million due to the $2 million July over-budget, interest earnings accrual of$346,000, and the City of Lansing Rider at $688,000, which was not initially budgeted as current income. Mr. McFarland reported that the cash balance as of July 31, 2005 is down about $9 million from June due mostly to debt service, which took place July 1, 2005. Otherwise the cash balance is stable. There was lengthy discussion concerning the cash reserves. Mr. McFarland explained that the rationale for the reserves is to maintain the BWL's AA bond rating and to stabilize rates. The Committee raised questions regarding the Belle River cash reserves. Mr. McFarland explained that cash reserves being held by the Michigan Public Power Agency (MPPA), are allocated for the Belle River project. Funds on reserve with MPPA cannot be accessed by the BWL without Project approval. He stated that a certain amount of reserve is necessary to maintain at MPPA as similar to the BWL. It was noted that earnings on the cash balances would likely flow back to Belle River project participants. Following discussion, staff was requested to prepare talking points for the Commissioners to use when asked questions about the BWL cash reserves. FINANCIAL SYSTEMS Senior Vice President of Finance and Administration Dennis McFarland presented an overview of the BWL Financial Needs Assessment Study results conducted by Forrester Research, Inc. 111 Board Meeting September 27,2005 Mr. McFarland reported that staff had become convinced that weaknesses in the financial reporting systems existed. On a looking forward basis, staff has concerns as to whether the functionality of the financial systems can be maintained. Areas not included in the study were the Customer Information System and operations system related to work management and GIS. The study objectives were to: • Understand the BWL's functional and technical requirements regarding finance systems • Assess capabilities of the current systems • Identify key gaps and deficiencies • Identify alternative scenarios • Recommend a plan of action There was lengthy discussion concerning the significance of identified deficiencies, which include: • GAAP accrual-basis accounting is not supported • Management reporting is not useful to run the business • Asset records are fragmented and out-of date • The budgeting capability does not support proactive planning and forecasting • The system has incomplete internal control capabilities • Payroll is labor-intensive and prone to errors • The technical environment is obsolete and inflexible. The IT environment assessment concluded the following: • The current systems date to the 1970's and were designed in an 80-column, punched card image. • The environment will increasingly become more difficult to maintain and sustain The current staff is experienced and responsive, but skills (i.e., COBOL) and knowledge replacement will become an issue. The Unisys mainframe-operating environment is not mainstream for applications. Modifications are difficult, due to limitations in field sizes and program interdependencies. • Homegrown financial and payroll systems are increasingly rare as packages and outsourced services are very mature. • Project management and package support skills are deficient in IT. The benefits and challenges of packaged applications were reviewed. Board Meeting Page 112 September 27,2005 Mr. McFarland reported that three primary alternatives for addressing the current systems deficiencies were analyzed by the consultant: 1. Enhance existing systems. This alternative is not recommended because design flexibility is limited by obsolete technology and legacy renewal projects have a mixed track record. 2. Develop new customer applications. This alternative is not recommended because (a) writing customized financial systems is rarely attempted anymore, (b) cost and time to completion and risk are high, and (3)packaged functionality is readily available. 3. Replace with a package. This is the recommended option because (a) financial application packages are mature and can support the vast majority of BWL requirements without modification and (b) the package solution will support substantial qualitative improvements in financial processes. It was noted that headcount reductions or decreased operating costs should not be key drivers for a financial replacement project. The estimated costs of recommended alternatives were itemized: Software license fees: $250K to $400K Hardware and platform costs: $200K to $250K Implementation costs: 3 to 6 times software costs, or $600K to $1.5M Total project costs: $1 million to $2.2 million Ongoing costs are estimated at 25% to 30% of the initial investment, including maintenance fees, staff training, upgrades, etc. The consultant has made the following recommendations prior to staff starting the RFP process: Expedite the software procurement process by avoiding a lengthy RFP. Utilize mainstream technologies, preferably aligned with the BWL's IT strategy. Consider separate packages for budgeting, time and attendance, financial reporting and HR/payroll. This could take up to two years to implement. Select packaged software that is configurable and extensible. Discussion followed regarding the need to modify the IT skill sets to accommodate the migration from the old environment to the new. Mr. McFarland stated that existing skills such as COBOL and technical knowledge must be supplemented with project management and systems integration skills. Once responses to the RFP are received and evaluated, staff will come back to the Board with a recommended vendor for action to let the contract anticipated sometime in February, 2006. Mr. McFarland noted that although the new system will not address all of problems, it is a step in the right direction. 113 Board Meeting September 27,2005 LANSING L UGNUTS SPONSORSHIP AGREEMENT General Manager Novick presented an overview of the BWL's sponsorship agreement with the Lansing Lugnuts that expires at the end of the 2005 season. The last agreement was five years in duration at an annual amount of$53,000. He asked Communications Director John Strickler to give the Committee a brief background on the BWL's history with the Lugnuts. He reported that the BWL had initially a three-year sponsorship contract with them. The original sponsorship was for just over $13,000. It was renewed in 2000 for a five-year period. The Lugnuts ownership has proposed a five-year renewal of the sponsorship agreement at a price of$56,000 per year. Mr. Strickler reported that the BWL is below average in terms of sponsorship packages with the average sponsorship package being approximately $67,000. Also, it complements the BWL's overall marketing goal that positions the BWL as Lansing's hometown utility, while contributing to the continuing economic health of the City of Lansing's downtown area. Discussion followed regarding including an option that allows the BWL, at its sole discretion, to cancel the sponsorship agreement in the event current ownership sells the franchise during the time frame of the agreement. Moved by Commissioner Wonch, seconded by Commissioner Smith to authorize the General Manager to bring forth a resolution to the full Board to approve the renewal of the BWL's sponsorship agreement with the Lansing Lugnuts for a five-year period at an annual cost of $56,000. Carried unanimously. On motion by Commissioner Wonch, seconded by Commissioner Smith, the Finance Committee adjourned at 2:00 p.m. Respectfully submitted, Ronald C. Callen, Chair Finance Committee Motion by Commissioner Graves, seconded by Commissioner Haggart, to receive the report of the Finance Committee as presented. Action: Carried unanimously. MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Office of the Corporate Secretary. Resolution 2005-9-2 A. LANSING L UGNUT SPONSORSHIP RESOLVED, that the General Manager is authorized to renew the BWL's sponsorship agreement with the Lansing Lugnuts for a five-year period at an annual cost of$56,000 subject Board Meeting Page 114 September 27,2005 to an option that allows the BWL, at its sole discretion, to cancel the agreement in the event current ownership sells the franchise during the timeframe of the agreement. Staff Comments: General Manager Novick reported that the sponsorship agreement names the BWL as the exclusive utility sponsor of the Lugnuts and includes nightly promotions and special events that promote the utility and its community involvement. The sponsorship package complements the BWL's overall marketing goal that positions the BWL as Lansing's hometown utility, while contributing to the continuing economic health of the city's downtown area. The sponsorship cost is below the average Lansing Lugnut sponsorship package of$67,000 per year. Motion by Commissioner Haggart, seconded by Commissioner Calkins, to approve the resolution. Discussion: Action: Carried unanimously. Resolution 2005-9-3 B. FISCAL YEAR 2005 AUDITED FINANCIAL STATEMENTS RESOLVED, That the fiscal year 2005 Audited Financial Statements for the Board of Water and Light Enterprise Fund have been reviewed and are hereby accepted as presented. FURTHER RESOLVED, That the Corporate Secretary is hereby directed to file a copy of the fiscal year 2005 Audited Financial Statements 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). Motion by Commissioner Calkins, seconded by Commissioner Graves, to approve the resolution. Action: Carried unanimously. UNFINISHED BUSINESS No unfinished business. NEW BUSINESS Commissioner Smith suggested that the following items be included on the agenda for an upcoming Board Retreat: Board of Commissioner self-assessment, travel policy, and litigation update. RESOLUTIONS No new resolutions. 115 Board Meeting September 27,2005 GENERAL MANAGER'S REMARKS Railroad Delivery Problems and Steam Outlook. General Manager Novick stated that as part of management's ongoing effort to improve communication with employees, several meetings were held with respect to two significant issues facing the BWL. Director of Production Dick Peffley gave a presentation on struggles the BWL has faced to receive adequate coal deliveries. Marketing Specialist Sue Warren reported on continuing efforts to market the BWL's steam business. Dick Peffley reported that the Union Pacific Rail Company, which delivers coal from the mines in Wyoming to Chicago, restricted coal deliveries nationwide following a series of derailments that necessitated the railroad to rebuild sections of its track. He noted that the BWL has also had difficulties with erratic delivery schedules from Canadian National, which deliveries coal on the last segment of its journey from Chicago to Lansing. Coal delivery restrictions has caused the BWL to curtail its export sales to ensure there is enough generating capacity to meet retail and contracted wholesale obligations. Mr. Peffley reported that Union Pacific has begun to increase coal deliveries over the last few weeks due to the addition of one train set to its schedule of deliveries bringing the BWL's stockpile to over 76,000 tons. It is anticipated that delivery restrictions will continue at least through November. Sue Warren reported that despite a substantial loss of load when General Motors closed its Lansing Car Assembly plants, the steam utility continues to market steam as a heating source to new development in the downtown area. Since year 2000, seven new office buildings have contracted to take BWL steam. Mr. Warren said that a new marketing strategy will be developed based on the pending completion of the Steam Integrated Resource Plan. She noted that it is very likely the steam utility will face major rate increases over the next five years. The goal is to continue to look for opportunities to reduce the BWL's steam costs and add new net revenue. General Manager Novick commented that skyrocketing natural gas prices continue to provide room for the BWL to substantially increase steam rates while remaining competitive with natural gas as a heating source. River Street Triangle Releases Parcel for Ottawa Station Development. General Manager Novick reported River Street Triangle, L.L.C., has agreed to release its interest in a parcel of land between the Ottawa Power Plant and the Stackable Building on North Grand Avenue. The parcel had been referred to as Parcel B, which is the southerly part of an overall parcel that extends from the Ottawa Plant north to Shiawassee Street. Mr. Novick commented that River Street Triangle held an option on both parcels for development of residential housing, however, recently the development company and its President, Joel Ferguson, expressed interest only in the northern portion of the site, known as Parcel A. Mr. Ferguson has now released his interest in Parcel B. This action makes it possible to package the land with the Request for Proposals to develop the Ottawa Plant into a combination of state offices and mixed development. Mr. Novick noted that there continues to be a lot of interest in the Ottawa Plant among developers from outside the community. Following discussion, the Commissioner requested a list of facilities that have been converted from a power plant to marketplace destinations. Commissioner Graves gave a brief recap of development attempts that have transpired dating back to 1997. Board Meeting Page 116 September 27,2005 EXCUSED ABSENCES On motion by Commissioner Joseph and seconded by Commissioner Callen, that the absences of Commissioners Rios and Wonch be excused. Carried unanimously. PUBLIC COMMENTS No comments. COMMISSIONERS COMMENTS Chair Smith reminded the Commissioners of the Special Board Meeting set for October 11 to consider the report of the Human Resources Committee and to conduct performance evaluations with the three Board-Staff Appointees. ADJOURNMENT On motion by Commissioner Joseph, seconded by Commissioner Graves, the meeting adjourned at 6:55 p.m. /s/Mary Sova, Corporate Secretary Filed with Lansing City Clerk October 7, 2005 WATER&LIGHT HOMETOWN PEOPLE.HOMETOWN POWER. 1232 Haco Drive P.O. Box 13007 Mo. Lansing,MI 48901-3007 517070206000 www.lbwl.com August 1, 2005 Ms. Debbie Miner, City Clerk City of Lansing 124 West Michigan Avenue Lansing, Michigan 48933 Dear Ms. Miner: Attached for posting with the City Clerk is a copy of the minutes from the Board of Water and Light meeting held on Tuesday, July 26, 2005. A copy of the minutes was faxed to your office this morning, August 1, 2005. Sincere , / ���,,,2[�u J Ros teary Sullivan 702-6034 Attachment 1 tv Printed on recycled paperer) r Preliminary Minutes, Subject to Board Approval on 91271105 MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, July 26, 2005 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Gary L. Calkins, Joseph Graves, Jr., Ifield Joseph, Santiago Rios, Robin M. Smith, and Nancy Wonch Absent: Commissioners Ron Callen and Tim Haggart rQ j The Secretary declared a quorum present. < Chairperson Smith called the meeting to order at 5:30 p.m. APPROVAL OF MINUTES Motion by Commissioner Wonch, seconded by Commissioner Rios, to approve the minutes of the regular meeting held May 24, 2005. 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. Deborah Garneau, 1311 Victor Ave, Lansing, regarding BWL Policy for bidding and award of contracts. By going out of state, money is taken from the local and state economies and also puts people out of work. Referred to staff for follow tip and response back to the Board. Joseph Davis, Business Manager IBEW Local 352, passed out letter concerning employee management issues that he believes are not being addressed. Three specific requests addressed in the letter are 1) independent third-party audit, 2) immediate suspension of any planned procedural changes, and 3) freeze on management contract negotiations. Filed and placed on record. Page S 1 Board Meeting July 26,2005 Bernice Stasa, PO Box 76, Shaftsburg, Michigan, regarding BWL jobs that are awarded to out of state companies. Referred to staff for follow up and response back to the Board. Victor L. Colon, Jr., BWL employee, regarding coal handling positions that were eliminated to save the BWL money. Mr. Colon believes this is not a savings to the BWL because of the overtime that is being paid. Staff responded and indicated that (1) the employees themselves selected the current staffing level, (2) overtime is being caused by problems with the railroad, and (3) the overtime would be the same with 13 employees or 10 employees and that there is a savings to the BWL with the current staffing. COMMUNICATIONS APPA Communication re: Robin Smith's presentation at seminar on June 21, 2005. Received and placed on file. COMMITTEE REPORTS Resolution 2005-7-1 NOMINATING COMMITTEE REPORT Commissioners Present: Gary Calkins, Tim Haggart, Santiago Rios, and Nancy Wonch. The Nominating Committee met on June 30, 2005 at 9:00 a.m. to review Commissioner survey responses for consideration of nominations for Board officers. The Nominating Committee recommends the following slate of officer candidates for Fiscal Year 2005-06: Chair: Robin Smith Vice Chair: Ifield Joseph Chair Pro Tem: Joseph Graves, Jr. There being no further business, the meeting adjourned at 9:23 a.m. Respectfully submitted, NOMINATING COMMITTEE Nancy Wonch, Chair Motion by Commissioner Graves, seconded by Commissioner Wonch, to approve the report as presented. Action: Carried unanimously. Board Meeting Page 82 July 26, 2005 Motion by Commissioner Wonch, seconded by Commissioner Rios, to approve the new slate of officers for Fiscal Year 2005-06. Discussion: The Nominating Connnittee members believe they have an excellent slate of officers for FY 05-06. They would like to begin a progression system of moving commissioners up through the offices. Action: Carried unanimously. Resolution 2005-7-2 COMMITTEE OF THE WHOLE REPORT The Committee of the Whole of the Board of Water and Light met at the Executive Offices, Lansing, begiruung at 4:30 p.m., Tuesday, July 12, 2005. Chair Pro Tem Ifield Joseph called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Ron Callen, Gary Calkins, Tim Haggart, Joseph Graves, Ifield Joseph, Robin Smith, and Nancy Wonch. Commissioner Santiago Rios was absent. PUBLIC COMMENT There were no public comments. BOND REFINANCING Dennis McFarland, Senior Vice President of Finance introduced the concept of providing for the award of sale of up to $44 million refunding bonds. He reported that this is an economic opportunity for the Board of Water and Light to save a substantial amount annually in debt service payments. Bonds would be issued to pay the cost of refunding a portion or all of the Water Supply, Stearn and Electric Utility System Revenue Bonds, Series 1999A, due July 1, 2010 through 2014, and the Water Supply, Steam and Electric Utility System Revenue Bonds Series 2002A, due July 1, 2013 through 2018, and to pay the costs of issuing the Bonds. Mr. McFarland introduced Kevin McCanna, President of Speer Financial, Inc. and Kester So, Bond Counsel of Dickinson Wright PLLC. Mr. MCCamla explained the significance of picking a savings target, such as 3%, to 3.5% savings, to generate sufficient interest savings. An Official Statement would need to be prepared as the offering document that would follow the same process used in the past. He noted that the 1999A is considered the best bond issue to refund at this time. The 2002A issue is close, but not quite ready. He provided a detailed explanation of the process and reviewed the Bond Ordinance. Mr. McCanna reviewed a summary of the bond issue and reported that under current market conditions, the total savings is projected to be between $1 million and $1.25 million for the 1999A and 2002A bond series. (COmmissioner Nancy Wonch entered the meeting at 4:45 p.m. and Conunissioner Gary Calkins entered the meeting at 4:53 p.m.) Page 83 Board Meeting July 26,2005 Mr. McCanna recommended using bond insurance for the proposed refunding. He noted that the market for bond insurance is very competitive, resulting in relatively low premiums. As a result, most bond issues of AA rating or less, if longer than five years, are insured. The benefit of insurance to an issuer is a lower interest rate. A comparison of the estimated cost-benefit was distributed for review. Mr. McCanla reported that the average coupon on an uninsured issue is estimated at 3.81% while insurance lowers this to 3.72%. The result is a gross savings of approximately $322,000. This is worth $268,000 on a present value basis, which compares favorably to an estimated premium of$160,000. The Committee reviewed an initial "draft" of the Ninth Supplemental Revenue Bond Resolution, written with a not-to-exceed principal amount of $44 million, with placeholders for insurance, and as a "negotiated sale" instead of a public sale with bids. A "draft" Escrow Deposit Agreement was also reviewed. Following discussion, General Manager Novick recommended that if the Committee is in agreement, staff will bring forth a formal resolution that would delegate to the General Manager, the Senior Vice President of Finance and a Commissioner the authorization to execute this transaction within a six-month window. Motion by Commissioner Wonch, seconded by Commissioner Calkins, to support the philosophy of staff pursuing the refunding of a portion or all of the 1999A and 2002A series bonds and to bring forth a formal resolution on the approval of the Ninth Supplemental Revenue Bond Resolution Authorizing Water Supply, Steam and Electric Utility System Revenue Refunding Bonds of the City of Lansing, with set parameters outlining how long the resolution remains open and the savings target for action at the next Board meeting, or, if necessary, at a Special Meeting. The motion carried by the following vote: Aye: Callen, Calkins, Graves, Haggart, Joseph, Smith, and Wonch Nay: None Absent: Rios POTENTIAL TRANSMISSION P UR CHASE THR O UGH THE MICHIGAN P UBLIC POWER AGENCY(MPPA) General Manager Novick reported that in the interest of full disclosure, he wanted to make it clear to all the Commissioners that the proposal on the potential transmission purchase through the Michigan Public Power Agency (MPPA) has some risk. Staff believes it is an investment for the future, but cannot guarantee its success. Staff s recommendation is predicated upon assumptions about the future, which may or not be realized. He noted that this potential purchase is included as a line item in the FY'06 Capital Budget. Doug Wood, Director of Finance, presented the business case on the proposal. He discussed the history of MPPA's transmission ownership and the opportunity for the BWL to obtain up to 12.554MW of transmission and associated rights through MPPA for BWL use. Mr. Wood noted that given the current BWL operation, the BWL would not benefit from additional transmission ownership rights for its own use. However, it is anticipated that future changes in the wholesale Board Meeting Page 84 July 26, 2005 market as well as operational changes due to the economies of current BWL generation units will make these added transmission rights much more valuable to the BWL in the future. Mr. Wood reported that risks include: (a) BWL need for transmission may not materialize such that maximum benefit is not achieved, (b) BWL may not be able to reallocate transmission to others for an acceptable price prior to BWL need, (c) MPPA and the BWL may be responsible for additional O&M or a capital contribution in the event repair is needed on the transmission asset tied to the purchase, and (d) large insurance claim and/or decommissioning cost associated with the Michigan Electric Transmission Company(METC) transmission asset is tied to the purchase. Mr. Wood concluded that based solely on current operations, the BWL cannot justify an additional transmission purchase. Future changes in BWL operations are expected to make the added transmission purchase beneficial and justified in the future. Also BWL costs associated with the transmission purchase can be mitigated until such time as the BWL can make effective use of the purchased transmission by reallocating the associated rights to another MPPA member for a fee. Finally, the opportunity to purchase transmission similar to the proposed purchase is extremely rare. Commissioner Robin Smith inquired about the BWL's working relationship with MPPA since the Board's decision in January 2005 to submit a five-year advance notice to MPPA of the BWL's intention to tenninate its participation in the MPPA Power Pool Project. General Manager Novick explained that MPPA is comprised of individual projects and the BWL plans to remain involved in other projects, such as the Belle River Project. This transmission utilization opportunity was precipitated by the results of a lawsuit settlement that MPPA initiated against Consumers Energy. (Commissioner Nancy Wonch left the meeting at 5:35 p.nz.) Following discussion, it was moved by Commissioner Calkins, seconded by Commissioner Graves to bring forward the following recommendations to the Board for consideration at the July 26, 2005 meeting: • To authorize the General Manager to sign a Transmission Utilization Agreement with MPPA, subject to final wording acceptable to the General Counsel, on committing to the purchase of additional transmission. • Further, to authorize staff to initiate efforts to reallocate the associated transmission rights to other MPPA cities for a fee until such time as BWL transmission usage increases. The motion carved by the following vote: Aye: Callen, Calkins, Graves, Haggart, and Joseph Nay: Smith Absent: Rios and Wonch (C07?177?issiO7ier Wonch left the meeting at 5:35 p.m) Page 85 Board Meeting July 26,2005 BALANCEDSCORECARD General Manager Novick reported that the BWL implemented the corporate balanced scorecard (scorecard) concept last year. The scorecard has been very helpful in focusing on important issues as the BWL continues to look for ways to improve performance. He introduced team leader David Kus of Customer Service who presented the scorecard objectives for Fiscal Year 2006. Mr. Kus acknowledged the team members who represent all of the BWL processes: Steve Brennan from Production, Kellee Christensen from Customer Projects & System Integrity, Shelley Wells from Human Resources, and Chanmaine Shellman of Finance & Planning. The balanced scorecard project sponsor is Dennis McFarland. It was pointed out that the results of the balanced scorecard is not tied to compensation. This is a quality improvement initiative to create a culture of performance to enable the BWL to clarify its vision and strategy and translate them into action. Mr. Kus reported that the program sets targets in areas where management believes perfomance is critical to the BWL's success. He further reported that for the most part, the corporate balanced scorecard will look a lot like the 2005 version. He reviewed the changes for FY 2006: Financial Performance: The operations and maintenance cost per customer has been changed to O&M budget variance. Operational Excellence: The forced outage rate for production plants used in 2005 will be changed to availability factor for 2006. Availability factor is the percentage of time a unit is available to be used. Also the measure for circuits with five or more breaker actions during the year changes from a percentage to a fixed number. Performance targets have been tightened for four performance measures, including the speed of answering phone calls, allowable breaker actions, fly ash sold, and the number of variances, compliance notices and fines. There will be a small reduction in the target for meter reading. Commissioner Smith asked about management's approach to involve all employees in setting the scorecard targets and measures and getting their buy-in. General Manager Novick responded that management is not trying to tell employees what to do, but rather tell them what the organization is trying to achieve. He emphasized that employee feedback is important in order to continuously improve strategic performance and results. He further noted that the balanced scorecard is not totally a buy-in program in the sense that employees get to decide what the goal is, but the employees have control over their actions to help create future value. Employees are encouraged to work toward meeting the goal. Following discussion, there was general consensus among the Commissioners that the balanced scorecard approach and the process used in setting the targets and measures are adequate to clarify the BWL's vision and strategy. LANSING COMMUNITY COLLEGE FOUNDATION General Manager Novick reported that the Board of Water and Light has been approached by the Lansing Community College (LCC) Foundation for a cornrnitment to the capital campaign. He stated that staff believes LCC is a critical asset to the economic vitality of the Lansing community, a major and growing customer of the BWL, and a valuable local resource for BWL Board Meeting Page S6 July 26,2005 employee development for the future. Accordingly, staff recommends the Board's consideration of a commitment to the capital Campaign of$5,000 per year for four years. Commissioner Robin Smith announced that in the interest of full disclosure, she has been installed as a Trustee of the Lansing Community College Board, thus she will not be able to participate in deliberations or the voting for the LCC Foundation. It was moved by Commissioner Haggart, seconded by Commissioner Callen to authorize the General Manager to bring forth a resolution to the Board on committing $5,000 per year for four years to the LCC Foundation for the Lansing Community College Capital Campaign. Aye: Callen, Calkins, Graves, Haggart, Joseph Nay: None Absent: Rios and Wonch. (CO7777ni3SlO7?e7- Wonch left the meeting at 5:35 p.m.) Abstain: Smith UPDATE ON TRIANGLE PROPERTY (GRAND AVENUE/SHIAWASSEE STREET) General Manager Novick reported that the developer (River Street Triangle, LLC) has been unable to reach accord on their development agreement with the City of Lansing due to recent proposed modifications to the project. Discussions continue between the City and the developer, however, the Board's May 24, 2005 action to amend the Purchase Agreement with River Street Triangle is stalled at the City Council pending agreement between the City and the developer. Mr. Novick noted that the reason for bringing this matter to the Committee's attention is twofold: (1) to apprise the Commissioners that the Amended Purchase Agreement has not been approved by City Council and (2) to notify the Commissioners that either the BWL or the developer has the right to terminate the agreement if City Council approval is not obtained by July 31, 2005. Commissioner Robin Smith recused herself from discussion and debate concerning the Triangle Property due to her position as Trustee of the Lansing Community College Board. After discussion, the Committee unanimously consented to doing nothing at this time. It was the sense of the Commissioners that the Board and the developer have already invested considerable time in discussions to reach agreement. By waiting until July 31, hopefully it will permit the City and the developer sufficient time to resolve pending issues with their agreement. General Manager Novick stated that he will apprise the Commissioners after July 31, to either disapprove the agreement or if the developer has given cancellation notice. He noted that the BWL is holding their earnest money check, however, it is refundable to the developer if the agreement is not approved by July 315` This was an information piece only and no action was required. Page 87 Board Meeting July 26,2005 On motion by Commissioner Callen, seconded by Commissioner Haggart, the Committee of the Whole adjourned at 6:25 p.nn. Respectfully submitted, Ifield P. Joseph, Chair Pro Tern Committee of the Whole Motion by Commissioner Joseph, seconded by Commissioner Wonch, to receive the Committee of the Whole reports as presented. Action: Carried unanimously. MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Office of the Corporate Secretary. Transmission Utilization Agreement. General Manager Novick reported MPPA obtained the right to purchase transmission through settlement of litigation over transmission access with Michigan Electric Transmission Company. Because the BWL generates most of its own power it doesn't have a current need for more transmission access. The BWL also has transmission access to allow power to be delivered to Lansing from the Belle River plant. However uncertainties over the future operation of the transmission grid and the rare opportunity to purchase transmission access prompted staff to recommend the purchase. The 12.5MW purchase will be made at a cost of just under $750,000, but could offset over $190,000 in annual transmission costs. There is the consideration of the future of the BWL's generating units. Future rules concerning emissions could make some of our units, especially those at the Eckert Plant, uneconomic to operate at some point in the future. If that happens, the BWL may have to purchase electricity from other utilities and transmission ownership could make delivery of that power less expensive. Resolution 2005-7-3 A. ENTERING INTO TRANSMISSION UTILIZA TION A GREEMENT WITH MPPA Whereas, The Michigan Public Power Agency has been involved in litigation with the Michigan Electric Transmission Company(METC) and Consumers Power Company (Consumers) in connection with the acquisition of additional ownership interests in certain high voltage transmission lines; and Whereas, as part of the settlement of the litigation, MPPA will acquire additional ownership interests in a certain high voltage transmission line owned by METC; and Whereas, the BWL believes it is in the best interest of the Board for MPPA to move forward with the acquisition and for the Board to participate in the transmission project by entering into the Transmission Utilization Agreement with MPPA; and Whereas, a form of the Transmission Utilization Agreement has been provided at this meeting. Board Meeting Page 88 July 26,2005 Now, Therefore, Be It Resolved That, the form of the Transmission Utilization Agreement to be entered into between MPPA and the Board is approved, and the General Manager is hereby authorized to execute such agreement on behalf of the Board, with such changes as may not be materially adverse to the Board and subject to final approval of BWL General Counsel. -------------------- Staff Remarks: The BWL has an opportunity to purchase the rights to 12.554 MW of transmission through the Michigan Public Power Agency in the Michigan Electric Transmission Company Transmission System for $749,645.66. In the future, these rights have the potential to offset over $190,000 per year (2006 rates) of transmission costs. The minimum period the rights would be in effect would be 15 years,but it is anticipated that the benefits will extend for a much longer period. Based on current operations, the BWL cannot make use of these rights, but expect to need them in the not so distant future. The agreement with MPPA permits the BWL to reallocate the rights to another MPPA member, The need for transmission exists by other MPPA members such that the BWL may reallocate the rights for a fee, until such time as they are needed by the BWL. It is not totally certain that the BWL will obtain the maximum benefits from these rights, but given this unique opportunity, the fact that there is a high probability of needing them in the future, coupled with the ability of the BWL to offset some of its costs by reallocating the rights to another MPPA member when not needed, we recommend approval of the above resolution. Motion by Commissioner Wonch, seconded by Commissioner Joseph, to approve the resolution. Discussion: Commissioner Smith stated that she plans to- support entering into this agreement even though she voted against it at the Committee of the Whole Meeting. After the COW, management responded to concerns raised by Ms. Smith as to why this business decision was made. The BWL will own 12.5MW of transmission line capacity and will be able to sell it if they are not used. Action: Carried unanimously. Revenue Bond Refinancing. This resolution authorized refinancing of Series 1999A and Series 2002A bonds if there is a present value savings of at least 3% of the bonds refunded. Under current market conditions, the savings would be about $1.2 million. The timing for refinancing the bonds is critical since interest rates continue to fluctuate. Timing is also important because the bonds can be refinanced only one time before their call date in another eight years. Because of this, care needs to be given to ensure that the greatest possible savings are realized. If the bonds are refinanced it will be done through a negotiated sale with bond underwriters selected through a request for proposals process. Page 89 Board Meeting July 26,2005 Resolution 2005-7-4 B. BOND REFINANCING OF SERIES 1999A AND SERIES 2002A BONDS NINTH 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 Ninth Supplemental Revenue Bond Resolution is supplemental to, and is adopted in accordance with Section 23(a)(1) of, the Bond Resolution. Section 2. Definitions. Unless the context indicates that another meaning is intended, the following words and terms used in this Ninth 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) 'Bond Purchase Agreement" means the bond purchase agreement entered into by the Board with the Underwriter in connection with the sale of the Series 2005A Bonds, as authorized in Section 8 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) "Escrow Deposit Agreement" means the Escrow Deposit Agreement between the Board and the Transfer Agent, as Escrow Trustee. (iv) "Junior Lien Bonds" means the Series 1999B Bonds and any additional junior lien bonds issued pursuant to the Bond Resolution. (v) "Insurance Policy" means the insurance policy issued by the Insurer guaranteeing the scheduled payment of principal of and interest on the Insured Bonds when due. (vi) "Insured Bonds" means the Series 2005A Bonds, if any, designated as Insured Bonds in the Bond Purchase Agreement for the Series 2005A Bonds. (vii) "Insurer" means MBIA Insurance Corporation, a New York domiciled stock insurance company, or any successor thereto or assignee thereof. (viii) "Series 1994B Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1994B issued pursuant to the Bond Resolution. (ix) "Series 1999A Bonds" means the Water Supply, Steam And Electric Utility System Revenue Bonds, Series 1999A issued pursuant to the Bond Resolution. (x) "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. Board Meeting Page 90 July 26,2005 (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, Steam and Electric Utility System Revenue Refunding Bonds, Series 2002B issued pursuant to the Bond Resolution. (xiii) "Series 2003A Bonds" means the Water Supply, Stearn and Electric Utility System Revenue Refunding Bonds, Series 2003A issued pursuant to the Bond Resolution. (xiv) "Series 2005A Bonds" means the Water Supply, Steam and Electric Utility System Revenue Refunding Bonds, Series 2005A authorized by this Ninth Supplemental Bond Resolution. (xv) "Underwriter" or "Underwriters" means the underwriter or underwriters designated in the Bond Purchase Agreement or the Series 2005A Bonds. Section 3. Authorization of Series 2005A Bonds. To pay the cost of refunding all or a portion of the outstanding Series 1999A Bonds and Series 2002A Bonds, including making a deposit to a reserve fund and payment of legal, financial and other expenses of the issuance of the Series 2005A Bonds, the City, by and through the Board, shall borrow a sum not in excess of Forty-four Million Dollars ($44,000,000), as finally determined in the Bond Purchase Agreement for the Series 2005A 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 2002A Bonds. The refunding satisfies a public purpose and will enable the Board to reduce the annual debt service payments in order to keep certain utility rates competitive. The estimated remaining useful lives of the projects financed with the Bonds to be Refunded (defined below) is at least 26 years. Section 4. Bond Details, Parameters and Security. The Series 2005A Bonds shall be designated "Water Supply, Steam And Electric Utility System Revenue Refunding Bonds, Series 2005A," shall be of equal standing in priority of lien on the Net Revenues of the System with the Series 1994B Bonds, the Series 1999A Bonds, the Series 2002A Bonds, the Series 2002B Bonds, the Series 2003A 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 2005A Bonds shall be issued in denominations of$5,000 or any integral multiples of $5,000 not exceeding the amount of the Series 2005A Bonds maturing on the same date and shall be numbered in consecutive order of authentication from 1 upwards. The Series 2005A 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 Bond Purchase Agreement for the Series 2005A Bonds. The Series 2005A Bonds shall bear interest at a rate or rates to be determined in the Bond Purchase Agreement for the Series 2005A Bonds, not exceeding seven percent (7%) per annum, and shall mature no later than July 1, 2018. The refunding must result in an aggregate net Page 91 Board Meeting July 26,2005 present value savings of at least 3% of the principal amount of the bonds to be refunded; however, Staff is directed to use its best efforts to maximize the amount of savings. Interest shall be payable commencing on January 1, 2006 and on each July 1 and January 1 thereafter, or such other dates specified in the Bond Purchase Agreement for the Series 2005A 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 2005A 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 2005A Bonds shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The principal of the Series 2005A 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 2005A Bond registered in the naive of a securities depository company as part of a book-entry system is selected for redemption, the securities depository company may retain the Series 2005A Bond and make an appropriate notation on the Series 2005A Bond indicating the date and amount of the reduction in the principal amount of the Series 2005A Bond resulting from the partial redemption, however, in the case of the final payment of the remaining principal amount of the Series 2005A Bond, the Series 2005A Bond shall be presented and surrendered to the Transfer Agent as a condition of payment. The aggregate principal amount of the Series 2005A Bonds, the amount of each maturity and the designation of serial and tenn bonds, if any, shall be as finally determined in the Bond Purchase Agreement for the Series 2005A Bonds. The City's obligation to fiend 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 (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 2005A Bonds, and other Senior Lien Bonds issued under the Bond Resolution, together with written evidence from any Rating Agency rating the Series 2005A 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 2005A 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 2005A Bonds held in the Bond Reserve Account shall be transferred to the Bond Redemption Fund and used to purchase or redeem outstanding Series 2005A 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 2005A Bonds, the form of guaranty shall be acceptable to the Insurer and no additional written confirmation from the Rating Agencies, other than their initial rating letters on the Series 2005A Bonds, shall Board Meeting Page 92 July 26,2005 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. Upon the issuance of the Series 2005A Bonds, the Board shall designate the Series 1999A Bonds and the Series 2002A Bonds to be refunded ("Bonds to be Refunded") in the Escrow Deposit Agreement 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 Senior Vice President and to give notice of such redemption in the manner and at the time required by the Bond Resolution. The General Manager and Senior Vice President are severally authorized to enter into the Escrow Deposit Agreement substantially in the form on file with the Board and to purchase United States Treasuries -- State and Local Govermnent 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 maturities, 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. U.S. Bank National Association 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 2005A Bonds shall be subject to redemption as provided in the bond form for the Series 2005A Bonds. Section 5. Series 2005A Bond Proceeds. From the proceeds of the sale of the Series 2005A Bonds, there shall be immediately deposited in (a) the Redemption Fund an amount equal to the accrued interest, if any, received on delivery of the Series 2005A 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 2005A Bonds shall be used, together with other available funds, to pay the costs of refunding the Bonds to be Refunded and to pay the costs of issuing the Series 2005A Bonds. Section 6. Book-Entry System - Series 2005A Bonds. Initially, one fully-registered Series 2005A 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 2005A Bonds requested by the Registered Owners or to a successor securities depository_. In the event The Depository Trust Company discontinues providing services as a securities depository for the Series 2005A Bonds and the City does not designate a successor securities depository, the City shall execute and the Transfer Agent shall authenticate and deliver Series 2005A Bonds to the Registered Owners. Page 93 Board Meeting July 26,2005 Section 7. Bond Form. The Series 2005A Bonds shall be in substantially the following form: [SERIES 2005A BONDS] UNITED STATES OF AMERICA STATE OF MICHIGAN CITY OF LANSING WATER SUPPLY, STEAM AND ELECTRIC UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 2005A Interest Rate Maturity Date of Per A inum 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 Airiount 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 1, 2006, 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 U.S. Bank National Association, 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, chilled water, 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 1994B, its Water Supply, Steam and Electric Utility System Revenue Bonds, Series 1999A, its Water Supply, Steam and Electric Utility System Revenue Bonds, Series 2002A, its Water Supply, Steam and Electric Utility System Revenue Refunding Bonds, Series 2002B its Water Supply, Steam and Electric Utility System Revenue Refunding Bonds, Series 2003A 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 Bond Resolution (defined below). Interest on this Bond shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Board Meeting Page 94 July 26,2005 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 Ninth Supplemental Revenue Bond Resolution adopted by the Board on July, 2005 (collectively, the "Bond Resolution"), and under and in full 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 2002, 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. 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. Page 95 Board Meeting July 26,2005 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 therefore as provided in the Bond Resolution and upon the payinent 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 Chairman 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) Certificate of Authentication This Bond is one of the bonds described in the within-mentioned Bond Resolution. U.S. BANK NATIONAL ASSOCIATION, Transfer Agent By: Authorized Representative Board Meeting Page 96 July 26, 2005 Date of Authentication: [Statement of Insurance to be included with respect to the Insured Bonds only] 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 full power of substitution in 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, without alteration or enlargement or any change whatsoever. Signature(s) nnust be guaranteed by an eligible guarantor institution participating in a Securities Transfer Association recogrnized 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) Page 97 Board Meeting July 26,2005 (Insert number for first named transferee if held by joint account) Section 8. Negotiated Sale. The Series 2005A Bonds shall be sold in a negotiated sale to the Underwriter, pursuant to a Bond Purchase Agreement. It is hereby determined that this method of sale is in the best interests of the Board and the City and is calculated to provide the Board and City with the lowest costs of borrowing money through the issuance of the Series 2005A Bonds. The Senior Vice President for the Board or the General Manager for the Board is authorized to fix the date, time and place of the closing for the issuance of the Series 2005A Bonds. The Chairperson of the Board or any Commmissioner of the Board and the Senior Vice President for the Board or the General Manager for the Board are authorized on behalf of the Board to execute a Bond Purchase Agreement in connection with the sale of the Series 2005A Bonds in order 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 2005A Bonds, (b) designate which of the Series 2005A Bonds will be serial bonds and terns bonds, and (c) determine the amounts to be deposited into the specific funds and accounts established under the Bond Resolution. Section 9. 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 2005A Bonds will be and will remain excludable from gross income for federal income tax purposes. Section 10. 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 Senior Vice President of the Board may, in consultation with the Staff Attorney and Bond Counsel, determine to be necessary or appropriate. Section 11. Other Staff Action. The Board ratifies and confines actions taken and filings made by Staff necessary to effectuate the sale of the Series 2005A Bonds, including any filings with the Department of Treasury. The Chairperson, any Commissioner, the General Manager and the Senior Vice President 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 2005A Bonds, including, but not limited to the execution of a continuing disclosure undertaking. Section 12. Bond Insurance. The Insured Bonds, if any, designated in the Bond Purchase Agreement of Series 2005A Bonds shall be insured by the Insurer. Section 13. The Insurance Policy. This Section 13 shall apply with respect to Insured Bonds in the event an Insurance Policy insures the principal of and interest on all or a portion of the Series 2005A Bonds, but only during such time as the Insurer is not in default under the terms and conditions of the Insurance Policy to be issued by the Insurer at the time of the issuance and delivery of the Insured Bonds, and the Insurance Policy is in full force and effect: Board Meeting Page 98 July 26, 2005 (a) (i) The Insurer shall be deemed to be and recognized as the Registered Owners of the Insured Bonds (A) at all times for the purposes of the adoption of a supplemental resolution amending, changing or modifying the Bond Resolution or this supplemental resolution or the initiation by Registered Owners of any action, or the removal of the Transfer Agent or the appointment of a successor Transfer Agent, which under the Bond Resolution, may require the written approval or consent of the Registered Owners of all or a portion of the Series 2005A Bonds (including the Insured Bonds) at the time Outstanding under the Bond Resolution or can be initiated upon the written request of the Registered Owners of not less than all or a portion of the Series 2005A Bonds (including the Insured Bonds) Outstanding under the Bond Resolution, (B) following an Event of Default for all other purposes, and (C) for the purposes of exercising all other rights and privileges available to a Registered Owner of an Insured Bond. (ii) In the event a payment can be accelerated, no action by any Registered Owner of an Insured Bond to accelerate the payment of principal of and interest on the Insured Bonds or to pursue any other remedy with respect to the hisured Bonds shall be of any effect unless the Registered Owner obtains the written consent of the Insurer to such acceleration or the Insurer shall direct such acceleration or remedy. (iii) In the event and to the extent that the principal and/or interest due on the Insured Bonds shall be paid by the Insurer pursuant to the hasurance Policy, the Insured Bonds shall remain Outstanding for all purposes under the Bond Resolution, not be defeased or otherwise satisfied and not be considered paid by the City and the pledge of the funds and accounts under the Bond Resolution and all covenants, agreements and other obligations of the City to the Registered Owners of the Insured Bonds shall continue to exist. (iv) The Board shall provide written notice to the Insurer in the event the Transfer Agent resigns or is removed or if a successor is appointed. The Insurer shall have the right to consent to the appointment of any successor Transfer Agent. (v) The Insurer shall receive from the Board on an annual basis, copies of the Board's audited financial statements and annual budgets. (vi) The Transfer Agent shall furnish to the Insurer a copy of any notice to be given to any Registered Owner of an Insured Bond or the Transfer Agent under the Bond Resolution. All notices required to be given to the Insurer under the Bond Resolution shall be in writing and shall be sent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk,New York 10504, Attention: Insured Portfolio Management. (vii) Notwithstanding any other provision of the Bond Resolution, the right of the Insurer to consent to and to approve certain actions as provided in this Ninth Supplemental Revenue Bond Resolution shall be null and void if the Insurer is in default under the terms and conditions of the Insurance Policy issued by the Insurer or if such Insurance Policy has been cancelled or is not otherwise in effect. Page 99 Board Meeting July 26,2005 (viii) The Board shall obtain the Insurer's consent prior to adoption of a supplemental resolution or the issuance of additional bonds under the Bond Resolution if the adoption of the supplemental resolution or the issuance of such Additional Bonds is for a purpose other than (1) a refunding to obtain savings; or (ii) the issuance of additional ID bonds which are in accordance with any additional bonds test or additional bonds requirement contained in the Bond Resolution. (ix) In connection with the issuance of Additional Bonds, the Board shall deliver to the Insurer a copy of the disclosure document, if any, circulated with respect to such Additional Bonds. (x) Copies of any amendments made to the resolutions or documents entered into in connection with the issuance of the Insured Bonds which are consented to by the Insurer shall be sent to Standard &Poor's Corporation. (xi) The Board agrees to reimburse the Insurer immediately and unconditionally upon demand, to the extent pennitted by law, for all reasonable expenses, including attorneys' fees and expenses, incurred by the Insurer in connection with (A) the enforcement by the Insurer of the Board's obligations, or the preservation or defense of any rights of the Insurer, under the Bond Resolution and any other document executed in connection with the issuance of the Insured Bonds, and (B) any consent, amendment, waiver or other action with respect to the Bond Resolution or any related document, whether or not granted or approved, together with interest on all such expenses from and including the date incurred to the date of payment at Citibanlc's Prime Rate plus 3% or the maximum interest rate permitted by law, whichever is less. In addition, the Insurer reserves the right to charge a fee in connection with its review of all such consent, amendment or waiver, whether or not granted or approved. (xii) The Board agrees not to use the Insurer's name in any public document including,without limitation, a press release or presentation announcement or forum without the Insurer's prior consent; provided however, such prohibition on the use of the Insurer's name shall not relate to the use of the Insurer's standard approved form of disclosure in public documents issued in connection with the current Insured Bonds to be issued in accordance with the tens of the Insurer's insurance commitment; and provided further such prohibition shall not apply to the use of the Insurer's name in order to comply with public notice, public meeting or public reporting or disclosure requirements. (xiii) The Board shall not enter into any agreement nor shall it consent to or participate in any arrangement pursuant to which Insured Bonds are tendered or purchased for any purpose other than the redemption and cancellation or legal defeasance of such Insured Bonds without the prior written consent of the Insurer. (b) (i) In the event that on the second business day, and again on the business day prior to the payment date of principal or interest on the Insured Bonds, the Transfer Agent has not received sufficient amounts in the funds established in the Bond Resolution to pay all principal and interest coming due on the Insured Bonds on the second following, or following, as the case may be,business day, the Transfer Agent shall immediately notify the Insurer or its Board Meeting Page]00 July 26,2005 designee by telephone or telegraph, confirmed in writing by registered or certified mail, of the ID amount of the deficiency. (ii) If the deficiency is made up in whole or in part prior to or on the interest payment date or principal payment date, the Transfer Agent shall so notify the Insurer or its designee. (iii) In addition, if the Transfer Agent has written notice from any Registered Owner that any of the Registered Owners have been required to disgorge payments of principal or interest on the Insured Bonds to the City or to the trustee in bankruptcy for creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes a voidable preference to such Registered Owners within the meaning of any applicable bankruptcy laws, then the Transfer Agent shall notify the Insurer or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. (iv) The Transfer Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Registered Owners of the Insured Bonds as follows: (A) if and to the extent there is a deficiency in amounts required to pay interest on the Insured Bonds, the Transfer Agent shall (I) execute and deliver to U.S. Bank Trust National Association, or its successors under the Insurance Policy(the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the Insurer as agent for such Registered Owners in any legal proceeding related to the payment of such interest and an assignment to the Insurer of the claims for interest to which such deficiency relates and which are paid by the Insurer, (II) receive as designee of the respective Registered Owners (and not as Transfer Agent) in accordance with the tenor of the Insurance Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (III) disburse the same to such respective Registered Owners; and (B) if and to the extent of a deficiency in amounts required to pay principal of the Insured Bonds, the Transfer Agent shall (I) execute and deliver to the Insurance Paying Agent, in form satisfactory to the Insurance Paying Agent, an instrument appointing the Insurer as agent for such Registered Owner in any legal proceeding relating to the payment of such principal and an assignment to the Insurer of any of the Insured Bonds surrendered to the Insurance Paying Agent of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Transfer Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (II)receive as designee of the respective Registered Owners (and not as Transfer Agent) in accordance with the tenor of the Insurance Policy payment therefore from the Insurance Paying Agent and (III) disburse the same to such Registered Owners. (v) Payments with respect to claims for interest on and principal of Insured Bonds disbursed by the Transfer Agent from proceeds of the Insurance Policy shall not be Page 101 Board Meeting July 26,2005 considered to discharge the obligation of the City with respect to such Insured Bonds, and the Insurer shall become the owner of such unpaid Insured Bonds and claims for interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise. (vi) Irrespective of whether any such assignment is executed and delivered, the City through its Board and the Transfer Agent hereby agree for the benefit of the Insurer that: (A) they recognize that to the extent the Insurer makes payments, directly or indirectly(as by paying through the Transfer Agent), on account of principal of or interest on the Insured Bonds, the Insurer will be subrogated to the rights of such Registered Owners to receive the amount of such principal and interest from the City, with interest thereon as provided and solely from the sources stated in the Bond Resolution and the Insured Bonds; and (B) they will accordingly pay to the Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the Insurance Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in the Bond Resolution, but only from the sources and in the mainler provided herein and in the Bond Resolution for the payment of principal of and interest on the Insured Bonds to Registered Owners, and will otherwise treat the Insurer as the owner of such rights to the amount of such principal and interest. (c) (i) In the event the Board refunds all or a portion of the Insured Bonds, the Board shall, unless waived in writing by the Insurer, provide the Insurer: (i) a final debt service schedule within three business days from the sale date of the refunding bonds; (ii) at least 10 days in advance of the closing, drafts of a verification report by an independent certified public accounting firm of the sufficiency of the escrow to timely pay the refunded bonds, an escrow securities purchase agreement or state and local governinent subscription form or open market securities confirmation, and an escrow deposit agreement; (iii) at least 5 business days prior to the closing, a draft opinion of bond counsel, to the effect that the refunding bonds are being issued in compliance with state law and that interest on the refunding bonds is tax-exempt; (iv) at least 5 business days prior to the closing, a draft opinion of bond counsel to the effect that the refunded bonds have been defeased. The Insurer must give its oral approval of the form of the verification report, escrow securities order and escrow agreement. (ii) In the event Insured Bonds are defeased in accordance with Section 5 of the Bond Resolution, the Board shall utilize only the following investments or securities to effectuate the defeasance, but only to the extent such investments or securities constitute Sufficient Government Obligations or Sufficient Municipal Obligations as defined in the Bond Resolution: Board Meeting Page 102 July 26,2005 (A) Cash; (B) U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series -- "SLGs"); (C) Direct obligations of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities; (D) Resolution Funding Corp. (REFCORP) Only the interest component of REFCORP strips which have been stripped by request to the Federal Reserve Bank of New York in book-entry form are acceptable; (E) Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P. If, however, the issue is only rated by S&P (i.e., there is no Moody's rating) then the pre-refiinded bonds must have been pre-refunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA rated pre-refunded municipals to satisfy this condition; (F) Obligations issued by the following agencies which are backed by the full faith and credit of the U.S: (1) U.S. Export-Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership (2) Farmers Home Administration (FmHA) Certificates of beneficial ownership (3) Federal Financing Bank (4) General Services Administration Participation certificates (5) U.S. Maritime Administration Guaranteed Title XI financing (6) U.S. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures—U.S. government guaranteed debentures Page 103 Board Meeting July 26,2005 U.S. Public Housing Notes and Bonds —U.S. government guaranteed public housing notes and bonds (d) The Insurer shall be provided with an opinion of counsel acceptable to the Insurer that the Insured Bonds have been legally defeased and that the escrow agreement establishing such defeasance operates to legally defease the Insured Bonds within the meaning of the Bond Resolution and this Ninth Supplemental Revenue Bond Resolution relating to the Insured Bonds. In addition, the Insurer will be entitled to receive (1) 15 business days notice of any advance refunding of the Insured Bonds and (ii) an accountant's report with respect to the sufficiency of the amounts deposited in escrow to defease the Insured Bonds. Section 14. Conflicting Resolutions. All resolutions or orders, or parts thereof, in conflict with the provisions of this Ninth Supplemental Revenue Bond Resolution are repealed. Section 15. Severability and Paragraph Headings. If any section,paragraph, clause or provision of this Ninth 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 Ninth Supplemental Revenue Bond Resolution. The paragraph headings in this Ninth Supplemental Revenue Bond Resolution are furnished for convenience of reference only and shall not be considered to be a part of this Ninth Supplemental Revenue Bond Resolution. Section 16. Publication and Recordation. This Ninth 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 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 17. Effective Date. This Ninth Supplemental Revenue Bond Resolution shall be effective immediately upon its adoption. In the event refunding bonds are not sold and delivered within six (6) months from the date of adoption of this Ninth Supplemental Bond Resolution, the authorization to issue such refunding bonds shall lapse and this Ninth Supplemental Revenue Bond Resolution shall be deemed to be null and void. Adopted and signed on the day of , 2005. /s/ /s/ Chairperson Mary E. Sova Corporate Secretary ADOPTED: IN FAVOR AGAINST ABSTAIN ABSENT Board Meeting Page 104 July 26,2005 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 regular meeting held on July, , 2005, 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 Motion by Commissioner Joseph, seconded by Commissioner Wonch, to approve the resolution. Discussion: The BWL was able to acquire the bond insurance and it is reflected in the proposed resolution. Action: Carried unanimously. Lansing Community College Foundation. Lansing Community College is a critical asset to the economic vitality of the greater Lansing area. Lansing Community College is the BWL's 11"' largest customer. It provides career preparation to over 19,000 students per semester. Fifty percent of enrolled students are from the greater Lansing Region. Facilities that will be funded by the Campaign will utilize BWL utility services and further education opportunities for out BWL service territory labor pool. LCC has $90M Capital Campaign for new construction which will be in the BWL service area. The BWL uses LCC for training, tuition reimbursement, advanced education and apprenticeship training. Commissioner Smith recused herself from discussion and voting on the Lansing Community College Foundation issue because of being on the LCC Board of Trustees. Resolution 2005-5-6 C. LANSING COMMUNITY COLLEGE FOUNDATION Whereas, Lansing Community College (LCC) is a critical asset to the economic vitality of the greater Lansing area providing career preparation to over 19,000 students per semester with over 50% of all enrolled students remaining in the greater Lansing region, and Whereas, LCC is pursuing a$90 million Capital Campaign for facilities improvement through various sources, and Page 105 Board Meeting July 26,2005 Whereas, the Lansing Community College Foundation (Foundation), a 501 C(3) entity that operates for the purpose of supporting the educational efforts of LCC is attempting to raise $3.5 million for the LCC Capital Campaign, and Whereas, LCC is the Board of Water and Light's (BWL) 1 It" largest customer in terms of total revenue, and Whereas, the BWL and its employees utilize the educational and training opportunities provided by LCC to further the development of BWL employees. Now, Therefore, Be It Resolved, that the Board of Water and Light commit $5,000 per year for four years to the Foundation for the LCC Capital Campaign. -------------------- Staf Remarizs: The Staff recommends supporting the LCC Capital Campaign for facilities improvement by conunitting a$5,000 annual contribution to the Foundation for four years. LCC is the BWL's 11t" largest customer and a vital asset to the economic development of the greater Lansing area. The facilities funded by the Campaign will utilize BWL utility services and further educational opportunities for the labor pool in the BWL service territory. Motion by Commissioner Joseph, seconded by Commissioner Rios, to approve the resolution. Discussion: Discussion was held on whether this resolution will be setting a precedent for other 501.c(3) organizations to ask for funding from the BWL, and whether the resolution should be tabled until criteria is determined. General Manager Novick stated that the BWL receives many requests monthly for money. There is criteria used and this will be provided to the Commissioners. Monies are budgeted in John Strickler's budget for economic development, charitable support and community activities. The decision was made to move forward and not table this resolution. Action: Carried unanimously. UNFINISHED BUSINESS No unfinished business. NEW BUSINESS Cormmissioner Smith suggested the following items to be on the agenda for an upcoming Board Retreat — Board of Commissioner Self-Assessment, travel policy, update on litigation (Cluley), opinion on the case with Joseph Pandy. Board Meeting Page 106 July 26,2005 RESOLUTIONS No new resolutions. GENERAL MANAGER'S REMARKS Environmental Issues. General Manager Novick introduced Nick Burwell from Environmental, Industrial Health and Safety who will talk on mercury. Nick Burwell stated that mercury is an issue that will significantly impact the BWL, and within the next couple of years, major decisions will have to be made. EPA estimates that global emissions from all sources is about 5,500 tons. The U.S. contributes 118 tons or about 3% to this. The amount that the U.S. contributes is not a significant amount. Much of what comes froin the U.S. comes from utility boilers of which the BWL has seven; utility boilers this contribute about 41% of the 118 tons of mercury emissions in the U.S. The BWL is about 4% of the Michigan utility total for mercury emissions. March 15, 2005, EPA issued the Clean Air Mercury Rules (CAMR) for mercury emissions from coal-fired power plants, compliance monitoring begins in 2009. Monitoring begins one year before compliance. Phase 1 begins in 2010 and reduces emissions from approximately 48 tons to 38 tons; Phase 2 begins in 2018 and further reduces emissions from 38 tons to 15 tons. Currently, the only reliable control technology which works, and it varies depending on coal type and units, is activated carbon injection. Carbon is blown into the precipitators and absorbs the mercury out of the air and it falls into the ash. DOE is funding six different technologies at this time. No EPA certified continuous emission monitoring systems (CEMS) exists today for mercury, though semi- continuous emissions monitoring systems (SCEMS) are in development. Extensive stack testing at Erickson, Eckert and Moores Park, has just been completed for both electric and steam units. Initial results indicate that Erickson is about 70 lbs. (to be allocated 30-40 lbs., Eckert about 110 lbs. (to be allocated 50-60 lbs.), and Moores Park at a rate of 7 lbs. Per trillion btus but (limit is 9 lbs. Per tbtu or 0.0000000792 lbs per ton of coal). Virtually all mercury-containing equipment has been eliminated from Production facilities. For 2010, without Cap and Trade each unit will have to comply. Estimated costs for all units: Capital: $65,090,000 Annual Operating (0&M) Expenses: $6,580,000 Lost ash recycling revenue: $1,000,000 For 2010 with Cap and Trade or at least system bubbling, estimated costs for Eckert 4, 5 6 & Erickson: Capital: $38,078,000 Annual Operating (0&M) Expenses: $4,339,000 Lost ash recycling revenue: $1,000,000 For 2018 without Cap and Trade each unit will have to comply. Estimated cost for all units: Capital: $81,795,000 Annual Operating (O&M) Expenses: $9,041,000 Lost ash recycling revenue: $1,000,000 Page 107 Board Meeting July 26,2005 For 2018 with Cap and Trade or at least system bubbling, estimated costs for Eckert 4, 5, 6 & Erickson: Capital: $65,090,000 Annual Operating (O&M) Expenses: $4,339,000 Lost ash recycling revenue: $1,000,000 The BWL has 9 8,23 7 electric customers; the 2010 estimated capital costs range from an average of$387 to $662 per customer. The 2018 estimated capital costs range from an average of$662 to $832 per customer. This cost per customer does not include annual operating (O&M) costs that will be in the millions. Under CAMR implementation, the BWL will not know for a year or so how much we will be allocated to emit. The future or even current installation and operating costs of control and monitoring technologies and their effectiveness on different coals is still being determined. Depending on all of the variables, the cost of mercury control (not including any costs related to additional NOx and S02 requirements) puts the viability of all Eckert units at risk. ABSENCES On motion by Commissioner Wonch and seconded by Commissioner Graves, that the absence of Commissioners Callen and Haggart be excused. Carried unanimously. PUBLIC COMMENTS No comments. COMMISSIONERS COMMENTS Commissioners raised a concern about the tone of the letter handed out earlier in this meeting by Joseph Davis, Business Manager for IBEW Local 352. It seems to set up an adversarial relationship between management and the union. General Manager Novick was surprised at the tone of the letter also as he has been meeting regularly with the union. A new Labor Relations Manager has recently been brought on staff. Mr. Novick stated that the Board of Water and Light has to change. Change is causing stress for many employees, but the BWL cannot keep on running as it has in the past. Mr. Davis's point in writing the letter was to get the issues out in the open and address then prior to negotiations in about 16 months. Commissioner Smith acknowledged BWL's sponsorship of the chili-cook-off and Common Ground. Commissioner Smith thanked BWL staff for their help in deriving the presentation that she gave at the recent American Public Power Association Conference. Future Committee of the Whole Meeting will update Commissioners on two lawsuits. Board Meeting Page 108 July 26, 2005 ADJOURNMENT On motion by Commissioner Wonch, seconded by Commissioner Graves, the meeting adjourned at 7:00 p.m. /s/Rosemary Sullivan, Acting Secretary Filed with Lansing City Cleric August 1, 2005 107 Preliminary—Subject to Board Approval on November 22, 2005 MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, September 27, 2005 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Gary Calkins, Ron Callen, Joseph Graves, Jr., Tim Haggart, Ifield Joseph, and Robin Smith. Absent: Conirnissioners Nancy Wonch and Santiago Rios > The Secretary declared a quorum present. cw- .:' Fj Chairperson Smith called the meeting to order at 5:30 p.m. = -" rr i n i n� U APPROVAL OF MINUTES �v Motion by Commissioner Haggart, seconded by Commissioner Calkins, to approve the minutes of the regular meeting held July 26, 2005. 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 persons spoke COMMUNICATIONS A letter from John M. Gear regarding lead replacement. Referred to staff for response with a copy directed to the Board. COMMITTEE REPORTS Chair Smith announced that the report of the Human Resources Committee regarding its meeting of September 20, 2005 has been pulled. A Special Board Meeting has been scheduled for October 11, 2005 to receive the report and to conduct performance evaluations for the three Board-Staff Appointees. Board Meeting Page 108 September 27,2005 Resolution 2005-9-1 FINANCE COMMITTEE REPORT A meeting of the Finance Committee of the Board of Water and Light was held at the Executive Offices, Lansing, at 12:00 noon, Monday, September 26, 2005. Finance Committee Chair Ron Callen, called the meeting to order and asked the secretary to call the roll. The following committee members were present: Commissioners Robin Smith, Nancy Wonch, Ron Callen and alternate member Joseph Graves, Jr. PUBLIC COMMENT There was no public comment. AUDITED FINANCIAL STATEMENTS FOR FISCAL 2005 Senior Vice President of Finance and Administration Dennis McFarland introduced Bob Pekrul, Manager in charge of Plante & Moran's BWL audit engagement. Mr. Pekrul informed the Committee that Douglas Rober, Partner of Plante & Moran was unable to attend the meeting due to the untimely passing of his mother. Mr. Pekrul introduced members of his team, auditors Jaclyn Simon and Henderson Harris. Mr. McFarland reported that the audit of the financial statements of the BWL Enterprise Fund for the year ended June 30, 2005 was a clean audit with respect to issues raised in the management letter and year-end entries that had to be made. He referred to the experience from last year involving various environmental entries that were made in addition to adjustments to the carrying value on the Ottawa Plant and other issues. He noted that staff got through the audit process much more quickly this year than in prior years with completion of three weeks earlier than last year. Mr. McFarland thanked his staff and representatives of Plante & Moran for working diligently in the joint venture of delivering the financial statements to the Board before the end of the first quarter of the subsequent year. Mr. McFarland reported that the audit of the financial statements for the Defined Benefit Plan, Defined Contribution Benefit Plan and the Retiree Benefit Plan and Trust (VEBA) would be submitted to the Pension Fund Trustees at their annual meeting in November. In reviewing the scope and results of the audit, handouts were distributed as a companion to Plante & Moran's presentation. Ms. Jaclyn Simon reported that the communication to the Finance Committee dated September 2, 2005, explains the auditor's objective in an audit and management's responsibilities in financial reporting. She noted that the end goal of a sound Internal control structure is to assure the reliability of financial reporting, compliance with applicable laws and regulations, and effectiveness and efficiency of operations. Ms. Simon explained the methods used to account for significant unusual transactions and the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. She informed the Committee that there were no unusual transactions or controversial or significant emerging areas for which new accounting policies were needed except as disclosed in the financial statements as follows: 109 Board Meeting September 27,2005 Note I regarding the adoption of SFAS No. 71 in accounting for water capital contributions. Note 6 regarding the adoption of SFAS No. 71 in accounting for the energy cost adjustment. Note 11 to the financial statements regarding the adoption of GASB No. 40, Deposit and Investment risk Disclosures. Ms. Simon further reported on management judgments and accounting estimates. She stated that auditing standards call for a report on accounting estimates that are particularly sensitive because of their significance to the financial statements or because of the possibility that future events affecting them might differ markedly from management's current judgments. She reported that management, with the guidance and analysis provided by the BWL environmental department and contracted consultants, feel they have come to a reasonable estimate of the liability to be incurred in relation to the environmental remediation liability of the North Lansing Landfill. She also reported that as a result of their audit, no significant adjustments were made to the financial statements. She presented a summary of unrecorded possible adjustments through the course of the audit, which were determined by management to be immaterial, both individually and in the aggregate, to the financial statements taken as a whole and the auditors concur with management's opinion. She noted that there were no disagreements with management over the application of accounting principles or the basis for management's judgments about accounting estimates. Also, there were no disagreements regarding the scope of the audit, disclosures to be included in the financial statements or the wording of the auditor's report. Mr. Bob Pekrul reviewed the following financial information: Comparison of Operating Revenue by expense category from 2002 - 2005. The Committee requested a staff report on changes to operating expenses in the Administrative and General categories in FY 2004 and 2005 to determine what portion of the cost is for base labor, health care, environmental and other expense. Comparison of Operating Income (Loss) by utility category from 2001 —2005. Bond Debt Service Requirements comparison from 2003 to 2010. It was noted that a large piece of the Bond Debt Service Requirement is due to the Central Utilities Complex of which General Motors reimburses the BWL. Comparison of Kilowatt Hours Generated vs. Purchased firom 2000-2005. Comparison of Significant Fuel Costs from 2000—2005. Mr. Pekrul reviewed Management Letter comments concerning the following issues and management's responses, which is on file with the official Board materials: • Accounts Receivable • Coal Inventory Controls • Stores and Production Parts Inventory Board Meeting Page 110 September 27,2005 • Stores Inventory Access and Control over Requisitions • Construction Work-in Progress (CIP) • Capitalized Interest on CIP Following lengthy discussion, Mr. McFarland stated that relative to where the organization was last year and the prior year, comments made in the Management Letter are manageable. With regard to the Committee's sensitivity to issue #2 regarding coal inventory control, he gave assurance that management will continue to address this problem. Committee members pointed out that this issue has appeared in past Management Letters the last several years. Mr. McFarland noted that the Internal Auditor is evaluating coal inventory controls and will be submitting the findings and recommendations on this issue. Moved by Commissioner Wonch, seconded by Commissioner Smith to authorize the General Manager to bring forth a resolution to the full Board on the acceptance of the 2005 audited financial statements for the BWL Enterprise Fund and to direct appropriate filings with the State Treasurer. Carried unanimously. JULYFINANCIAL REPORT Senior Vice President of Finance and Administration Dennis McFarland reviewed the financials for the one-month ended July 31, 2005. He reported that net income was $2 million higher than budget. The increase is the result of the sale of excess S02 Allowances of$3.6 million, which was offset by timing differences in fuel cost purchases of$1.2 million. The revised net income projection for Fiscal 2006 stands at $2.3 million due to the $2 million July over-budget, interest earnings accrual of$346,000, and the City of Lansing Rider at $688,000, which was not initially budgeted as current income. Mr. McFarland reported that the cash balance as of July 31, 2005 is down about $9 million from June due mostly to debt service, which took place July 1, 2005. Otherwise the cash balance is stable. There was lengthy discussion concerning the cash reserves. Mr. McFarland explained that the rationale for the reserves is to maintain the BWL's AA bond rating and to stabilize rates. The Committee raised questions regarding the Belle River cash reserves. Mr. McFarland explained that cash reserves being held by the Michigan Public Power Agency (MPPA), are allocated for the Belle River project. Funds on reserve with MPPA cannot be accessed by the BWL without Project approval. He stated that a certain amount of reserve is necessary to maintain at MPPA as similar to the BWL. It was noted that earnings on the cash balances would likely flow back to Belle River project participants. Following discussion, staff was requested to prepare talking points for the Commissioners to use when asked questions about the BWL cash reserves. FINANCIAL SYSTEMS Senior Vice President of Finance and Administration Dennis McFarland presented an overview of the BWL Financial Needs Assessment Study results conducted by Forrester Research, Inc. 111 Board Meeting September 27,2005 Mr. McFarland reported that staff had become convinced that weaknesses in the financial reporting systems existed. On a looking forward basis, staff has concerns as to whether the functionality of the financial systems can be maintained. Areas not included in the study were the Customer Information System and operations system related to work management and GIS. The study objectives were to: -- - - - • Understand the BWL's functional and technical requirements regarding finance systems • Assess capabilities of the current systems • Identify key gaps and deficiencies • Identify alternative scenarios • Recommend a plan of action There was lengthy discussion concerning the significance of identified deficiencies, which include: • GAAP accrual-basis accounting is not supported • Management reporting is not useful to run the business • Asset records are fragmented and out-of date • The budgeting capability does not support proactive planning and forecasting • The system has incomplete internal control capabilities • Payroll is labor-intensive and prone to errors • The technical environment is obsolete and inflexible. The IT environment assessment concluded the following: • The current systems date to the 1970's and were designed in an 80-column, punched card image. • The environment will increasingly become more difficult to maintain and sustain The current staff is experienced and responsive, but skills (i.e., COBOL) and knowledge replacement will become an issue. The Unisys mainframe-operating enviromment is not mainstream for applications. Modifications are difficult, due to limitations in field sizes and program interdependencies. • Homegrown financial and payroll systems are increasingly rare as packages and outsourced services are very mature. • Project management and package support skills are deficient in IT. The benefits and challenges of packaged applications were reviewed. Board Meeting Page 112 September 27,2005 Mr. McFarland reported that three primary alternatives for addressing the current systems deficiencies were analyzed by the consultant: 1. Enhance existing systems. This alternative is not recommended because design flexibility is limited by obsolete technology and legacy renewal projects have a mixed track record. 2. Develop new customer applications. This alternative is not recommended because (a) writing customized financial systems is rarely attempted anymore, (b) cost and time to completion and risk are high, and (3)packaged functionality is readily available. 3. Replace with a package. This is the recommended option because (a) financial application packages are mature and can support the vast majority of BWL requirements without modification and (b) the package solution will support substantial qualitative improvements in financial processes. It was noted that headcount reductions or decreased operating costs should not be key drivers for a financial replacement project. The estimated costs of recommended alternatives were itemized: Software license fees: $250K to $400K Hardware and platform costs: $200K to $250K Implementation costs: 3 to 6 times software costs, or$600K to $1.5M Total project costs: $1 million to $2.2 million Ongoing costs are estimated at 25% to 30% of the initial investment, including maintenance fees, staff training, upgrades, etc. The consultant has made the following recommendations prior to staff starting the RFP process: Expedite the software procurement process by avoiding a lengthy RFP. Utilize mainstream technologies, preferably aligned with the BWL's IT strategy. Consider separate packages for budgeting, time and attendance, financial reporting and HR/payroll. This could take up to two years to implement. Select packaged software that is configurable and extensible. Discussion followed regarding the need to modify the IT skill sets to accommodate the migration from the old environment to the new. Mr. McFarland stated that existing skills such as COBOL and technical knowledge must be supplemented with project management and systems integration skills. Once responses to the RFP are received and evaluated, staff will come back to the Board with a recommended vendor for action to let the contract anticipated sometime in February, 2006. Mr. McFarland noted that although the new system will not address all of problems, it is a step in the right direction. 113 Board Meeting September 27,2005 LANSING L UGNUTS SPONSORSHIP AGREEMENT General Manager Novick presented an overview of the BWL's sponsorship agreement with the Lansing Lugnuts that expires at the end of the 2005 season. The last agreement was five years in duration at an annual amount of$53,000. He asked Communications Director John Strickler to give the Committee a brief background on the BWL's history with the Lugnuts. He reported that the BWL had initially a three-year sponsorship contract with them. The original sponsorship was for just over $13,000. It was renewed in 2000 for a five-year period. The Lugnuts ownership has proposed a five-year renewal of the sponsorship agreement at a price of$56,000 per year. Mr. Strickler reported that the BWL is below average in terms of sponsorship packages with the average sponsorship package being approximately $67,000. Also, it complements the BWL's overall marketing goal that positions the BWL as Lansing's hometown utility, while contributing to the continuing economic health of the City of Lansing's downtown area. Discussion followed regarding including an option that allows the BWL, at its sole discretion, to cancel the sponsorship agreement in the event current ownership sells the franchise during the time frame of the agreement. Moved by Commissioner Wonch, seconded by Commissioner Smith to authorize the General Manager to bring forth a resolution to the full Board to approve the renewal of the BWL's sponsorship agreement with the Lansing Lugnuts for a five-year period at an annual cost of $56,000. Carried unanimously. On motion by Commissioner Wonch, seconded by Commissioner Smith, the Finance Committee adjourned at 2:00 p.m. Respectfully submitted, Ronald C. Callen, Chair Finance Committee Motion by Commissioner Graves, seconded by Commissioner Haggart, to receive the report of the Finance Committee as presented. Action: Carried unanimously. MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Office of the Corporate Secretary. Resolution 2005-9-2 A. LANSING L UGNUT SPONSORSHIP RESOLVED, that the General Manager is authorized to renew the BWL's sponsorship agreement with the Lansing Lugnuts for a five-year period at an annual cost of$56,000 subject Board Meeting Page 114 September 27,2005 to an option that allows the BWL, at its sole discretion, to cancel the agreement in the event current ownership sells the franchise during the timeframe of the agreement. Staff Comments: General Manager Novick reported that the sponsorship agreement names the BWL as the exclusive utility sponsor of the Lugnuts and includes nightly promotions and special events that promote Ahe utility and its community involvement. The sponsorship package complements the BWL's overall marketing goal that positions the BWL as Lansing's hometown utility, while contributing to the continuing economic health of the city's downtown area. The sponsorship cost is below the average Lansing Lugnut sponsorship package of$67,000 per year. Motion by Commissioner Haggart, seconded by Commissioner Calkins, to approve the resolution. Discussion: Action: Carried unanimously. Resolution 2005-9-3 B. FISCAL YEAR 2005 AUDITED FINANCIAL STATEMENTS RESOLVED, That the fiscal year 2005 Audited Financial Statements for the Board of Water and Light Enterprise Fund have been reviewed and are hereby accepted as presented. FURTHER RESOLVED, That the Corporate Secretary is hereby directed to file a copy of the fiscal year 2005 Audited Financial Statements 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). Motion by Commissioner Calkins, seconded by Commissioner Graves, to approve the resolution. Action: Carried unanimously. UNFINISHED BUSINESS No unfinished business. NEW BUSINESS Commissioner Smith suggested that the following items be included on the agenda for an upcoming Board Retreat: Board of Commissioner self-assessment, travel policy, and litigation update. RESOLUTIONS No new resolutions. 115 Board Meeting September 27,2005 GENERAL MANAGER'S REMARKS Railroad Delivery Problems and Steam Outlook. General Manager Novick stated that as part of management's ongoing effort to improve communication with employees, several meetings were held with respect to two significant issues facing the BWL. Director of Production Dick Peffley gave a presentation on struggles the BWL has faced to receive adequate coal deliveries. Marketing Specialist Sue Warren reported on continuing efforts to market the BWL's steam business. Dick Peffley reported that the Union Pacific Rail Company, which delivers coal from the mines in Wyoming to Chicago, restricted coal deliveries nationwide following a series of derailments that necessitated the railroad to rebuild sections of its track. He noted that the BWL has also had difficulties with erratic delivery schedules from Canadian National, which deliveries coal on the last segment of its journey from Chicago to Lansing. Coal delivery restrictions has caused the BWL to curtail its export sales to ensure there is enough generating capacity to meet retail and contracted wholesale obligations. Mr. Peffley reported that Union Pacific has begun to increase coal deliveries over the last few weeks due to the addition of one train set to its schedule of deliveries bringing the BWL's stockpile to over 76,000 tons. It is anticipated that delivery restrictions will continue at least through November. Sue Warren reported that despite a substantial loss of load when General Motors closed its Lansing Car Assembly plants, the steam utility continues to market steam as a heating source to new development in the downtown area. Since year 2000, seven new office buildings have contracted to take BWL steam. Mr. Warren said that a new marketing strategy will be developed based on the pending completion of the Steam Integrated Resource Plan. She noted that it is very likely the steam utility will face major rate increases over the next five years. The goal is to continue to look for opportunities to reduce the BWL's steam costs and add new net revenue. General Manager Novick commented that skyrocketing natural gas prices continue to provide room for the BWL to substantially increase steam rates while remaining competitive with natural gas as a heating source. River Street Triangle Releases Parcel for Ottawa Station Development. General Manager Novick reported River Street Triangle, L.L.C., has agreed to release its interest in a parcel of land between the Ottawa Power Plant and the Stackable Building on North Grand Avenue. The parcel had been referred to as Parcel B, which is the southerly part of an overall parcel that extends from the Ottawa Plant north to Shiawassee Street. Mr. Novick commented that River Street Triangle held an option on both parcels for development of residential housing, however, recently the development company and its President, Joel Ferguson, expressed interest only in the northern portion of the site, known as Parcel A. Mr. Ferguson has now released his interest in Parcel B. This action makes it possible to package the land with the Request for Proposals to develop the Ottawa Plant into a combination of state offices and mixed development. Mr. Novick noted that there continues to be a lot of interest in the Ottawa Plant among developers from outside the community. Following discussion, the Commissioner requested a list of facilities that have been converted from a power plant to marketplace destinations. Commissioner Graves gave a brief recap of development attempts that have transpired dating back to 1997. Board Meeting Page 116 September 27,2005 EXCUSED ABSENCES On motion by Commissioner Joseph and seconded by Commissioner Callen, that the absences of Commissioners Rios and Wonch be excused. Carried unanimously. PUBLIC COMMENTS No comments. COMMISSIONERS COMMENTS Chair Smith reminded the Commissioners of the Special Board Meeting set for October 11 to consider the report of the Human Resources Committee and to conduct performance evaluations with the three Board-Staff Appointees. ADJOURNMENT On motion by Commissioner Joseph, seconded by Commissioner Graves, the meeting adjourned at 6:55 p.m. /s/Mary Sova, Corporate Secretary Filed with Lansing City Clerk October 7, 2005 117 Preliminary—Subject to Board Approval on November 22, 2005 MINUTES OF THE BOARD OF COMMISSIONERS' SPECIAL MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, October 11, 2005 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Ron Callen, Gary L. Calkins, Joseph Graves, Jr., Santiago Rios, Robin M. Smith, and Nancy Wonch ;J c � Absent: Commissioners Tim Haggart and Ifield Joseph. The Secretary declared a quorum present. J -''- r C, Chairperson Smith called the meeting to order at 4:00 p.m. _ ry PUBLIC COMMENTS THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT. No persons spoke. Resolution 2005-10-1 HUMAN RESOURCES COMMITTEE REPORT A meeting of the Human Resources Committee of the Board of Water and Light was held at the Executive Offices, Lansing, at 12:00 noon, Tuesday, September 20, 2005. Committee Chair Santiago Rios, called the meeting to order and asked the secretary to call the roll. The following members of the Human Resources Conunittee were present: Commissioners Gary Calkins, Joseph Graves, Jr., Tim Haggart, Santiago Rios and Robin Smith, ex officio. PUBLIC COMMENT There was no public comment. Special Board Meeting Page 118 October 11,2005 PENSION FUND MATTERS Pension Fund Manager Recommendation Senior Vice President of Finance and Administration Dennis McFarland reported that utilizing the expertise of the BWL's pension consultant LCG Associates, staff has conducted an extensive search for investment managers to manage approximately 30% of the Defined Benefit (DB) Pension Fund to be invested in large cap equities. The search was conducted in accordance with the investment policy effective November 23, 2004. Mr. McFarland noted that the Human Resources Committee is a subcommittee of both the Board and the DB Pension Fund Trustees charged with oversight responsibility of the Plan and Trust Investment. The Investment Policy gives the Human Resources Committee authority to make investment manager selections and terminations for the DB Pension Fund. Mr. McFarland reported that LCG used both qualitative and quantitative criteria to reduce the qualified candidates to four finalists in each of the large cap growth and large cap value categories. An internal committee, comprised of individuals from the Finance, Accounting and Human Resources functions, evaluated and ranked the finalists. Those rankings were reviewed with LCG and recommendations were made. Following discussion, the following committee action was proposed: WHEREAS, the Trustees of the Lansing Board of Water and Light Defined Benefit Plan for Employees' Pensions has adopted an investment policy effective November 23, 2004, and WHEREAS, that policy delegated authority to the Human Resources Committee to select and terminate investment managers, and WHEREAS, a search has been conducted to identify qualified professional, independent investment managers, and WHEREAS, the Human Resources Committee has determined Wells Capital Management and LSV Asset Management to be such qualified investment managers. RESOLVED, That Wells Capital Management and LSV Asset Management be retained to manage the large cap growth and large cap value portion, respectively, of the Defined Benefit Pension Fund in accordance with the Fund's investment policy. On motion by Commissioner Calkins, seconded by Commissioner Graves, to approve the resolution. Carried unanimously. Chair Rios noted that this information would be communicated to the Pension Fund Trustees at their annual meeting scheduled for November. Page 119 Special Board Meeting October 11,2005 Agenda Items for the Pension Fund Trustees Meeting Mr. McFarland reported that if the Committee has no objection, staff would be bringing the following proposals to the Pension Fund Trustees in November for consideration: 1. To revise the VEBA Trust Investment Policy. The current investment policy was approved April 24, 2001. Since then, the VEBA has accumulated up to $30 million. Staff would like to recommend amending the policy to clarify the statement of intent and move toward a more appropriate asset allocation. 2. To reduce the investment options in the Defined Contribution (DC) Plan to 15 to 20. The DC Plan currently has 38 options. Due to performance considerations, management plans to eliminate 9 of the investment options currently in the DC Plan right away, which will leave 29 options. Recommendation will be presented to reduce that number even further. Discussion has already begun with employees on the need for a best in class plan. 3. To revise the Defined Benefit (DB) Pension Investment Policy to incorporate a diversity consideration in money manager selection. Recommendation would be presented to amend the policy by adding a paragraph to indicate that once all the criteria has been met to fulfill the Trustees' fiduciary role, the diversity of a money manager can be taken into account in making a selection. After lengthy discussion, the Committee consented on bringing the proposals to the Pension Fund Trustees for discussion at the November meeting. BOARD STAFF APPOINTEE PERFORMANCE EVALUATIONS Committee Chair Rios announced that the three Board Staff Appointees have requested a closed hearing for their performance evaluations as permitted under Section 8 of the Open Meetings Act (MCL 15.268 regarding closed sessions and permissible purposes.) Moved by Commissioner Calkins, seconded by Conunissioner Graves, to go into executive session. Carried unanimously. The Committee entered into executive session at 12:30 p.m. Moved by Commissioner Calkins, seconded by Commissioner Smith that the Committee return to open session. Carried unanimously. The Committee returned from executive session at 1:50 p.m. Chair Rios reported that the Committee had extensive discussion with regard to the following three components related to the annual performance for the three Board Appointees: Special Board Meeting Page 120 October 11,2005 1. Individual performance evaluation summaries completed by each of the Commissioners for the General Manager, Internal Auditor and Corporate Secretary. 2. Reappointment of each of the Board Appointees to their respective positions. 3. An immediate pension vesting option for the three Board-appointed positions. Chair Rios reported that consensus was reached on the following: • The Committee had the opportunity to review the written performance evaluation summaries for the Board Appointees, and it was concluded that each has been performing at an excellent level over the past fiscal year. The Committee agreed that each of the Appointees be given the opportunity to extend their employment contract with the Board of Commissioners for another year. The Committee recommends that the employment contract and the issue of compensation be discussed further with the full Board for consideration. The Staff Appointees have the option to request a closed session during continued discussion on their performance evaluations. • The Committee deferred the immediate vesting option pending further review and discussion. This item will be placed on the Human Resources Committee agenda for the immediate future. • Draft perfonnance objectives for FY 2006 from the General Manager, Internal Auditor and Corporate Secretary are to be submitted to the Human Resources Committee for review and subsequent referral to the Committee of the Whole. OTHER MATTERS At the request of Commissioner Calkins, the Board's Travel Policy was referred to the Committee of the Whole for a status report and recommended changes. On motion by Commissioner Calkins, seconded by Commissioner Smith, the Human Resources Committee adjourned at 2:16 p.m. Respectfully submitted, Santiago Rios, Chair Human Resources Committee Motion by Commissioner Wonch, seconded by Commissioner Callen, to approve the report of the Human Resources Committee as presented. Page 121 Special Board Meeting October 11,2005 Discussion: Commissioner Graves asked that the inunediate vesting option be taken up for discussion at this time. Chair Smith responded that the Human Resources Committee has recommended deferring this item until such time that additional research is completed and information on the costs for such a benefit is received. Commissioner Rios stated that the Human Resources Committee plans to discuss pension vesting in the near future. Human Resources Director Mary Dwyer noted that a letter addressing trends with pension vesting in the utility industry was sent to the Commissioners in mid-September for review. Action: Carried unanimously. PERFORMANCE EVALUATIONS Chair Robin Smith announced that the three Board Staff Appointees have requested a closed hearing for their performance evaluations with the full Board as permitted under Section 8 of the Open Meetings Act (MCL 15.268 regarding closed sessions and permissible purposes.) The Chair stated that a motion is now in order to hold an executive session to consider performance evaluations for the three Staff Appointees. Motion by Commissioner Calkins, seconded by Commissioner Wonch, to go into executive session. Carried unanimously. The Board entered into executive session at 4:15 p.m. Motion by Commissioner Wonch, seconded by Commissioner Rios that the Board return to open session. Carried unanimously. The Board returned from executive session at 5:40 p.m. Resolution #2005-10-1 REAPPOINTMENT OF THE CHARTER POSITIONS OF DIRECTOR AND GENERAL MANAGER, CORPORATE SECRETARY, AND INTERNAL AUDITOR The Board's Rules of Administrative Procedures specify that the Board is to appoint a Director and General Manager, Corporate Secretary, and Internal Auditor, respectively, at the its first regular meeting following July 1 of each year or as soon thereafter as may be appropriate. RESOLVED, That the Board of Commissioners hereby reappoints the following individuals to the Charter positions of Director and General Manager, Corporate Secretary and Internal Auditor for fiscal year 2005-2006, or, until a successor is appointed, whichever last occurs: Special Board Meeting Page 122 October 11,2005 Sanford Novick, Director and General Manager -and- Mary Sova, Corporate Secretary -and- Glenn Holloway, Internal Auditor RESOLVED, That Mary Sova and Glenn Holloway's current employment contracts be amended to reflect the new reappointment and contract commencement period of July 1", 2005. RESOLVED FURTHER, That Sanford Novick's current employment contract be amended to reflect the new reappointment and continue beyond the fiscal year 2006 up to and including August 18, 2006. Further that his current contract be amended to reflect the new contract commencement period. Resolution #2005-10-2 PERFORMANCE EVALUATION AND COMPENSATION INCREASES FOR CHARTER POSITIONS OF DIRECTOR AND GENERAL MANAGER, CORPORATE SECRETARY, AND INTERNAL AUDITOR WHEREAS, the Board of Commissioners separately discussed the performance evaluations and compensation increases for the three appointed charter positions: Director and General Manager, Corporate Secretary, and Internal Auditor. WHEREAS, the Board considered information provided to them, including current objectives during fiscal year 2004-05 and self-evaluations, current contract, current skill family, current salary and range placement, compensation market analysis, and the non- bargaining unit performance increase matrix. WHEREAS, the Board discussed the compensation package for the Director and General Manager, Sanford Novick. The terms of the compensation package are currently under negotiation and will be finalized within thirty days for subsequent Board action. RESOLVED, That the Corporate Secretary, Mary Sova, is hereby eligible to receive a compensation increase of 2.5% effective as of July 1, 2005. RESOLVED FURTHER, That pursuant to the current contract with the Internal Auditor, Glenn Holloway, that no additional compensation increase occur for the past fiscal year 2004-05. Motion by Commissioner Calkins, seconded by Commissioner Wonch, to approve the resolutions on the reappointment of the three Board-Staff Appointees and Compensation Increases. Discussion: Commissioner Rios reported that as part of the performance evaluation process all the Commissioners completed Performance Evaluation Forms for each of the Page 123 Special Board Meeting October 11,2005 three Staff Appointees. The Human Resources Committee then reviewed the summary forms that were compiled for each of the Staff Appointees. He briefly recapped the discussion held by the Commissioners during the executive session and noted that without exception the Commissioners agreed that the Staff Appointees' job performance was excellent. He also reported that the Board engaged in extensive deliberation regarding compensation and the inunediate pension vesting option. Input was received from General Manager Novick in terms of his compensation package. Conunissioner Rios commented that after discussion, the Commissioners requested more information regarding potential costs of immediate pension vesting and the ramifications of providing this benefit. The Commissioners decided not to address the immediate vesting issue at this meeting. Action: Carried unanimously. Chair Smith invited Commissioner Callen to read the following resolution: Resolution #2005-10-3 MEMORIAL TRIBUTE TO DIANE R. ROYAL WHEREAS, The members of the Board of Commissioners wish to express their sadness over the passing of fonner Commissioner Diane R. Royal on August 9, 2005. She was a pillar of strength on this Board. WHEREAS, Diane R. Royal was a woman of vision and conviction with genuine concern for utility-related issues and their relationship to the citizens. Her intelligence, integrity and strong convictions exerted a significant impact on the Board of Water and Light by ensuring the financial strength of this Utility remained strong and that electric, water and steam were reliable and delivered at the lowest price possible; and WHEREAS, Diane R. Royal was appointed Commissioner to the Lansing Board of Water and Light on October 9, 1995 and served until February 18, 2004. She was elected Vice Chair of the Board in 1996 and held that post four times. She became Chair of the Board in 1998 and also served in that capacity four times. As a Board Commissioner, Diane R. Royal played an integral role in a variety of matters affecting this utility. Her expertise in utility law and depth of experience in the utility industry brought an exceptional understanding of policy-setting responsibilities. Her deep commitment to the Board of Water and Light and the City of Lansing was well demonstrated by the countless hours she contributed to this Board. Her involvement in public issue advocacy on behalf of disadvantaged people clearly demonstrated the highest qualities of citizenship and unselfishness. She may never know how many lives she has touched,but there are many who know her value; and Special Board Meeting Page 124 October 11,2005 RESOLVED, That the Board of Water and Light Commissioners, hereby officially honors and salutes the life, leadership and achievements of Diane R. Royal. In special session this 11 th day of October, 2005, it is with respect for her contributions to this utility and community that we extend this expression of condolences to the family of Diane R. Royal. Commissioner Callen commented that he had worked closely with former Commissioner Diane Royal and that he had enormous respect for her. He moved the adoption of the resolution, and the motion was seconded by Commissioner Wonch. Carried unanimously. Chair Smith requested that the family of Diane Royal be invited to the next Board meeting to accept a formal presentation of the memorial tribute. COMMISSIONERS COMMENTS Chair Robin Smith invited the Commissioners and staff to Lansing Community College Foundation's upcoming "Motown" Lip Sync event. She noted that Commissioner Rios and many others from the community would be participating in this program. EXCUSED ABSENCES On motion by Commissioner Wonch and seconded by Commissioner Graves, that the absences of Commissioners Haggart and Joseph be excused. Carried unanimously. ADJOURNMENT On motion by Commissioner Callen, seconded by Commissioner Wonch, the meeting adjourned at 5:47 p.m. /s/Mary E. Sova, Corporate Secretary Filed with Lansing City Clerk October 18, 2005 Prelinzinaq Minutes, Subject to Boar_d;Approval on 71261105 MINUTES OF THE BOARD O C88SIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, May 24, 2005 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Gary L. Calkins, Joseph Graves, Jr., Tim Haggart, Ifield Joseph, Santiago Rios,Robin M. Smith, and Nancy Wonch Absent: Commissioner Ron Callen The Secretary declared a quorum present. Chairperson Smith called the meeting to order at 5:30 p.m. APPROVAL OF MINUTES Motion by Commissioner Calkins, seconded by Commissioner Haggart, to approve the minutes of the regular meeting held March 22, 2005. Carried unanimously. PUBLIC COMMENTS THE CHAc ANivOL'NCED 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 persons spoke. COMMUNICATIONS Letter from Donald Hillman, 750 Berkshire Lane, East Lansing, regarding EMF (Electromagnetic Fields) in homes and current on ground wires entering homes. Referred to staff for follow up and response back to the Board. Page 55 Board Meeting May 24,2005 COMMITTEE REPORTS Resolution 2005-5-1 HUMAN RESOURCES COMMITTEE REPORT A meeting of the Human Resources Committee of the Board of Water and Light was held at the Executive Offices, Lansing, at 12:00 noon, Tuesday, April 12, 2005. Committee Chair Tim Haggart called the meeting to order and asked the secretary to call the roll. The following members of the Human Resources Committee were present: Commissioners Gary Calkins, Tim Haggart, Santiago Rios and Robin Smith. Absent was Commissioner Wonch. PUBLIC COMMENT There was no public comment. NON-BARGAINING SKILL FAMILY RANGE ADJUSTMENTS AND PERFORMANCE INCREASE MATRIX FOR FISCAL YEAR 2006 Wendy Bradley, Human Resource Consultant for Employee Relations presented the reconunended Skill Family Range Adjustments and Performance Increase Matrix for FY 2006. She reported that the BWL annually reviews its skill family ranges for non-bargaining employees in an effort to keep salaries in line with comparable positions in a competitive marketplace. Rates of pay for benchmark jobs in each skill family were examined in order to offer competitive salary ranges for FY 2006. She noted that the skill family range plan was designed to offer employees salaries competitive with the market, with base pay capped at market-mid-point rates (and capped at 10% above the market mid-point for employees hired before July 1, 2000). Ms. Bradley discussed how the information from 27 different surveys was analyzed. She also discussed how range adjustments are determined for the eight BWL skill families. The Commissioners asked for clarification on the performance increase matrix and discussed in detail the level of"needs improvement." (Commissioner Smith entered the room at 12:25 p.m.) Following discussion, the Human Resources Committee voted as follows authorizing the General Manager to present a resolution at the next regular meeting on recommended non-bargaining skill family range adjustments and the performance increase matrix for FY 2006. Voting Aye: Calkins, Haggart,Rios, Smith. Voting Nay: None Absent: Wonch. INTERNAL AUDITOR'S SIX-MONTH PERFORMANCE INCREASE Motion was made by Commissioner Smith and seconded by Commissioners Rios that the Human Resources Committee convene in closed session to discuss the Internal Auditor's six-month performance as permitted under Section 8 of the Open Meetings Act (MCL 15.268 regarding closed sessions and permissible purposes). (12:35 p.m.). Board Meeting Page 56 May 24,2005 Approved by roll call vote as follows: Voting Aye: Calkins, Haggart, Rios, Smith Voting Nay: None Absent: Wonch. The Committee reconvened in open session at 1:25 p.m. Internal Auditor Glenn Holloway advised the Committee that he would like to conduct a needs assessment on the use of an intern accountant to assist him with internal audits and special projects. The intern would be helpful for detailed audit testing and documentation of various business processes. He suggested seeking the help of local colleges and/or universities to assist him in placing an intern accountant. The Committee agreed that this would be a worthwhile endeavor and told Mr. Holloway to proceed to evaluate this option. . ......... .._........... . . . _..._.._....... . Resolution 2005-5-2' The Human Resources Committee reports that it has discussed the six-month performance appraisal for Internal Auditor Glenn Holloway. The Committee unanimously recommends the following: RESOLVED, That the Board approve a 5% performance increase effective April 1, 2005, in accordance with the employment agreement entered into between the Board and Mr. Holloway at the time of his employment. There being no further business, the Human Resources Committee adjourned at 1:35 p.m. Respectfully submitted, Tim Haggart, Chair Human Resources Committee Motion by Commissioner Joseph, seconded by Commissioner Calkins, to receive the report. Action: Carried unanimously. Motion by Commissioner Haggart, seconded by Commissioner Wonch, to approve the Committee's recommendation. (Resolution 2005-5-2) Action: Carried unanimously. . ....... .._.... . . _.. ...... ._....__... Resolution 2005-5-3 COMMITTEE OF THE WHOLE REPORT The Committee of the Whole met on Tuesday, May 24, 2005 at 4:30 p.m. to discuss the proposed agreement with River Street Triangle, LLC. Page 57 Board Meeting May 24,2005 Chair Pro Tern Ifield Joseph called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Ron Callen (by speaker phone), Gary Calkins, Tim Haggart, Joseph Graves, Ifield Joseph, Santiago Rios, Robin Smith, and Nancy Wonch. PUBLIC COMMENT Patrick Reid, Attorney for River Street Triangle, LLC, spoke on the proposal discussed with the Commissioners at the May 3, 2005 Conunittee of the Whole meeting. At that meeting, staff was asked by the Committee to investigate with the appraiser if the estimated cost of $250,000 to relocate overhead facilities at the 312 N. Grand Avenue site was already deducted from the appraised price. Mr. Reid stated that the appraiser reported that $250,000 had not been deducted from the estimate for moving the overhead utilities. He noted that General Manager Novick has indicated there should be no reduction in the purchase price negotiated on May 3rd because this expense is reimbursable from Brownfield funds. Mr. Reid said that if the Board maintains this position, then the negotiated deal would come "off the table." He explained that the developer plans to use Brownfield funds to cover expenses such as baseline environmental assessments, cleanups, and other matters related to the property. He reiterated that the developer does not intend to allocate Brownfield funds to relocate utilities. AGREEMENT WITH RIVER STREET TRIANGLE,LLC General Manager Novick called attention to a memo, dated May 23, 2005, that he and General Counsel Amy Cavanaugh sent to the Board regarding the proposed amended and restated agreement with River Street Triangle. The memo details events from 2001, when the Board entered into an agreement with River Street Triangle and follows activities to the present. He referred to a policy adopted by the Board in 2004 that addresses the sale or disposal of surplus property at the appraised value. He noted that the fundamental issue is determining the appraised value. Once that issue is clarified, the Board has the discretion to decide as to whether it wants to be consistent with the policy or make an exception. Commissioner Graves stated that he appreciated the time staff put into this issue and the comments and recommendations that were forwarded to the Commissioners. He said that from his perspective, the Board received what he considered to be a reasonable and fair offer from the developer at the last Committee of the Whole meeting on May 3, 2005. The only outstanding issue in his mind was the appraisal clarification since the appraiser acknowledged the question about the $250,000 to remove the utilities, which the developer agreed to split with the BWL. Commissioner Graves noted that in working with similar transactions, the question of how the buyer intends to use a grant or other financing option is the concern of the buyer and not the seller. The buyer has the option to apply those funds in a variety of ways. He recommended that the Board stand by the proposed amended agreement and proceed to close on this deal. With respect to the policy on the disposal of surplus property, Commissioner Graves said he does not believe the Board would be making an exception to the policy in this instance by approving the amended agreement since the policy gives the Board some discretion when dealing with governmental entities. He said that in this case, it is a tri- Board Meeting Page 58 May 24,2005 party transaction that brings revenues back to downtown Lansing through contributions to the tax base and will help stimulate the after 5 p.m. downtown business traffic. Commissioner Rios agreed with Commissioner Graves. He gave an overview of the process of this financial transaction based on a contract. He discussed the issues resolved at the May 3rd Committee of the Whole meeting and pointed out that the sole unresolved matter was who would bear the cost of relocating the utilities. The purchaser presented his position from a contractual and business standpoint signifying that the burden of relocating the utilities should be borne by the seller. Subsequently, a compromise was reached on May 3rd between the seller and the purchaser to share the $250,000 cost of relocating the utilities, and a draft resolution to that effect was approved with a contingency placed on the resolution as to whether or not the appraiser had a different viewpoint as to how that cost should be allocated. Commissioner Rios pointed out that the appraiser's recent letter clearly states the purchaser should only be expected to pay 1%- 2% of the total purchase price for relocating utilities. He urged the Board to approve the transaction because the financial aspects of this deal are positive for the BWL, the City of Lansing and ratepayers. Commissioner Callen stated that his view is slightly different. He said that his concern was registered at the May 3Td Committee of the Whole meeting because staff was not comfortable with the information the developer presented to them on the same evening as the meeting. He noted that he voted for the compromise on the basis of the information presented at that meeting. He added that after reading Mr. Novick and Ms. Cavanaugh's May 237d memo and learning that the appraiser has indicated that the cost of relocating the utilities can be recovered from elsewhere, the value of the property (Parcel A) should stand at the appraised value. He stated that it is not appropriate for the Board to advance those costs on a compromise; consequently, the appraised value should not be discounted. He agreed with earlier comments concerning the positive impact this development project would have for the City of Lansing because what is good for the City is good for the BWL. Chair Smith stated that the remaining issue at the last Committee of the Whole meeting was the appropriate price for the property in order to reach an agreement to move the deal forward. She stated that she is satisfied a fair market price has been reached and noted that it is not the Board's role to determine how Brownfield funds should be applied. The developer should have the discretion to use Brownfield funds in whatever way it will benefit the development project. She concurred with Commissioner Graves' comments regarding the Board's discretion to implement its policy on disposition of surplus property as it relates to the use by governmental entities. Chair Smith said that she plans to support the amended agreement because this project will benefit the City of Lansing as well as the BWL. Commissioner Wonch expressed concern with the proposed compromise of sharing the cost to move the overhead utilities. She stated that the Board will be voting to increase electric and water rates at the regular meeting this evening, and approval of the compromise would send the wrong message to the ratepayers of this community. She noted that the developer has the option to recover $250,000 from Brownfield funds for relocating the overhead utilities. She said it is her opinion that the BWL's policy on Disposition of Surplus Real Property is not being followed. Page 59 Board Meeting May 24,2005 Commissioner Calkins asked if the developer has applied for Brownfield Project funds to reimburse for utility relocation. Mr. Novick stated that his understanding is application has not been made by the developer for this item, although the relocation of utilities is an eligible item for Brownfield credits. Following discussion, Commissioner Calkins took the position that he believes the appraised price should be paid by the buyer and the buyer should request the amount needed to move the overhead utilities from the Lansing Brownfield Redevelopment Authority. He stated that the BWL should derive as much money as possible from the property sale. Commissioner Joseph stated that he plans to support the amended agreement with River Street Triangle. He said that he is convinced the Board received sufficient information regarding this property transaction in order to make an informed decision. Also, the letter received from the appraiser answered the question that the buyer would not typically be required to spend more than 1%-2% of the total purchase price for relocating the utilities. Commissioner Haggart asked about the appraised value of the 75-foot of additional property. Mr. Novick stated that this strip was appraised at an average price of$202,500. Following discussion, it was agreed to combine the cost of Parcel A and the 75-foot strip into one purchase price. Moved by Commissioner Rios, seconded by Commissioner Graves to forward to the Board the Committee's recommendation on the approval of amending the Purchase Agreement between the Board of Water and Light and River Street Triangle, which is to include the following negotiated items: • Total Purchase Price of property located at 312 North Grand= $1,032,500.00 • The developer is to assume all costs to raze the building on the property • The developer is to pay to move overhead and underground utilities • The developer is to pay a non-refundable $100,000.00 deposit within five days after the Board approves this transaction. The motion was adopted by the following vote: Aye: Haggart, Graves, Joseph, Rios, Smith Nay: Callen(by speaker phone), Calkins, Wonch Absent: None (See Board action on May 24, 2005, Resolution#2005-5-10) Board Meeting Page 62 May 24,2005 purchaser's assumption that the BWL was responsible for the above ground utilities. He stated that a provision to put the underground utilities back on the BWL's obligation was recently added the last time the BWL met with the developer and the City to discuss the proposed amended and restated agreement. Ms. Cavanaugh referred to Section 101.0 of the 2001 agreement, which states "...after demolition, the Purchaser shall be responsible, at no cost or expense to the Seller, for maintenance, restoration, relocation and installation of utilities, necessary to serve the building adjacent to the Phase I Site and commonly known as the Stackable building." Mr. Reid stated that their understanding was that if there was going to be a cost in razing the building, they would assume that cost. He noted that after reviewing a BWL memo delivered to him on April 29th outlining costs to remove and relocate the utility facilities necessary to serve the Stackable building, such as streetlights, traffic lights, and abandoning water and steam service lines, the costs went beyond what they anticipated. Mr. Reid further noted that it was assumed the relocation and reconnection of utilities would be less complex, hence, $250,000 of utility work is considered expensive. It was presumed that the appraisal assumed that the Board of Water and Light would relocate the utilities. Commissioner Calkins suggested reviewing this matter at a later date once staff has sufficient time to review the new proposal submitted by the developer. Commissioner Callen concurred and stated that he was not comfortable making a decision at this time because staff has raised concerns over their understanding of what the original arrangement was and what the current offer is. He indicated that he would like to hear from staff once they have an opportunity to clarify some of the issues raised. Commissioner Joseph expressed concern with the developer bringing information to the meeting and asking for a decision on the same day. Commissioner Smith stated-that she was comfortable with the way the amended and restated agreement was written, however, her main concern was how to divide the cost to relocate the utilities and also restore the utilities necessary to serve the Stackable building. General Manager Novick stated that from his point of view, Parcel A needed to be sold at the appraised price and the issue of who pays for underground utilities was still up for negotiation. Since the original agreement was negotiated prior to his employment with the BWL, he does not know what the original intent was. Although not discussed, it was his understanding that the overhead utilities had been there and addressed all along. The language in the agreement seemed clear and based on standard utility practice. Mr. Novick pointed out that it was recently discovered the Parcel A description differs from the appraisal description by approximately 20,000 square feet (75-foot easement area); as a result, the developer was notified and it was agreed to let the appraiser conduct a separate valuation on that strip of land. The developer is willing to accept the appraised value based on an agreed upon formula. Following lengthy discussion, Mr. Reid stated that in the spirit of resolving the misunderstanding with the proposal, he would accept the counter offer suggested by Commissioner Joseph to split the cost for the relocation of utilities with a cap on that number. General Manager Novick recommended including a contingency for the appraiser to clarify whether the $955,000 appraised price included the assumption that the BWL would relocate the utilities to the Stackable Building. The Commissioners concurred with seeking clarification to determine if the intent was to layer in the cost to relocate the overhead utilities. Commissioner Rios stated that he believes it is in the BWL's best interest to move forward with this transaction particularly since a Page 63 Board Meeting May 24,2005 concession has been made by the Purchaser in the amount of $125,000 to divide the cost of relocating the utilities, which is a reasonable approach. He noted that the question of how the appraised value was determined could be argued for months or years. It was moved by Commissioner Rios, seconded by Commissioner Smith to forward a formal resolution to the Board on the approval of the amended and restated agreement with River Street Triangle, LLC to purchase the BWL property, known as Parcel A, located at Shiawassee Avenue and North Grand Avenue for a purchase price as follows: Payment to the Board of Water and Light $ 705,000 Pay 50% of BWL's cost in relocating utilities on the property up to $125,000 $ 125,000 Total Payment $830,000 The total payment of$830,000 is subject to clarification from the appraiser as to whether or not the appraisal assumed that the Board of Water and Light would pay to relocate overhead utilities. Aye: Callen, Calkins, Graves, Haggart, Joseph, Rios, Smith, Wonch Nay: None Absent: None IMPRESSION 5 SCIENCE CENTER PROJECT Communications Director John Strickler introduced John LeFevre, President of the Impression 5 Science Center. Mr. LeFevre thanked the Board of Commissioners for their support of the Impression 5 Water Room, which has been a popular exhibit that serves over 75,000 people annually and continues to grow in popularity. He introduced Eric Larson, Executive Director of Impression 5. Mr. Larson reported that since the opening of the Water Room in 2001, the staff of Impression 5 has been consistently requesting feedback from teachers, parents and kids about the effectiveness of the exhibit. While the exhibit as a whole has been very successful, the staff has identified a number of factors that they believe will greatly improve the visitor's learning experience. In response to feedback received, Impression 5 proposes to create several new components to Phase #1, the existing space. A Phase #2 exhibit would contribute to children's understanding of hydrology, propulsion, buoyancy, construction of plumbing systems and other scientific principles associated with water. Cyrus Miller, Exhibits Officer of Impression 5 was introduced who then explained the planned changes to the Water Room using a hands-on exhibit for the Commissioners to view. Mr. Miller reported that Phase #2 would be an expansion of the existing space with the addition of more water-related components and an opportunity to explore more complex ideas such as underground utilities, groundwater and water transport. General Manager Novick stated that the Impression 5 Science Center is very impressive and that a BWL sponsorship of Phase #2 at a cost of $21,000 would be a very positive capital investment in education for this community. There was discussion on how the BWL would be recognized for the sponsorship. Mr. Larsen told the Commissioners that the BWL would be prominently recognized within the exhibit area and on their new sponsorship recognition board that is currently being designed. Recognition in Board Meeting Page 60 May 24,2005 There being no further business, Commissioner Rios moved, seconded by Commissioner Graves, on the adjournment of the meeting(5:28 p.m.). Respectfully submitted, Ifield P. Joseph, Chair Pro Tem Committee of the Whole COMMITTEE OF THE WHOLE REPORT The Committee of the Whole met at the Executive Offices, Lansing, beginning at 5:30 p.m., Tuesday, May 3, 2005. Chair Pro Tem Ifield Joseph called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Ron Callen, Gary Calkins, Tim Haggart, Joseph Graves, Ifield Joseph, Santiago Rios,Robin Smith, and Nancy Wonch. Chair Pro Tem Ifield Joseph welcomed returning Commissioner Joseph Graves to the Board. Commissioner Graves stated that he had the opportunity to serve on this Board from 1996 to 1998 when he left to become Chief of Staff for the City of Lansing, and he looks forward to working with the Commissioners. PUBLIC COMMENT There were no public comments. AGREEMENT WITH RIVER STREET TRIANGLE, LLC General Manager Sanford Novick presented an update on the number of discussions held over the past several weeks between the BWL, City officials, and the developer (River Street Triangle, LLC) concerning the agreement on the sale of the BWL property located at Shiawassee Street and Grand Avenue. Present to address specific project issues currently under negotiations were Glenn Kirk, Finance Director for the City of Lansing; Joel Ferguson, a principal of River Street Triangle, LLC; and Patrick Reid, attorney for River Street Triangle, LLC. Mr. Kirk stated that having affordable housing in a prime downtown location is key to the success of economic development in the City. The proposed residential housing project is important for the City to attract people downtown. Mr. Ferguson gave an overview of the riverfront project known as the Triangle and BWL/Coal Storage Property, which culminated into an agreement between the City of Lansing, the Board of Water and Light and River Street Triangle, LLC, which linked two parcels together. Mr. Ferguson noted that there has been the assumption that the Triangle Project at Kalamazoo Street and Grand Avenue would be built first. However, the developer has decided to move up the housing phase of the development located on the BWL property at Shiawassee Street and Grand Avenue with a June 2005 start date. Mr. Reid referred to a revised "Amended and Restated Agreement to Sell Between the Board of Water and Light and River Street Triangle, LLC, Regarding Sale of the Property Located at the Corner of Shiawassee Street and Grand Avenue. " to replace the first agreement dated May 2001. Mr. Reid noted that the developer has determined that the south half(known as Parcel B) of the property included in the original agreement is no longer needed; therefore, it is being deleted in Page 61 Board Meeting May 24,2005 the revised amended and restated agreement. This leaves the north half of the property, which was appraised at a market value of $955,000 for the housing development, subject to an adjustment to be presented later. Mr. Reid noted that the appraisal excluded a 75-foot strip of land on the north side of the property. Commissioner Rios entered the meeting at 5:45 p.m. Mr. Reid presented a handout that explained River Street Triangle's justification seeking to adjust the appraised value of Parcel A, located on the southeast corner of North Grand Avenue and East Shiawassee Street. The appraised market value of Parcel A minus the 75-foot strip was determined by the appraiser to be $1,095,000. However, to achieve this value, the existing building would have to be razed, estimated to cost $141,000. Mr. Reid pointed out that if a purchaser bought the property for $955,000 and paid $141,000 for razing the building, the purchaser would have a parcel of property worth $1,095,000. Mr. Reid further noted that the cost of razing the building should have included the cost for relocating the utilities at an additional cost of$250,000. He added that this amount would have to be subtracted from the value given by the appraiser of $955,000; consequently, the actual appraised value should be $705,000. Mr. Reid stated that this would mean that if a purchaser bought the property for $705,000 from the BWL and spent $141,000, and another $250,000 for utility relocation, then the purchaser would have a parcel of property valued at $1,095,000, as appraised. He determined the value of the property as follows: Payment to Board of Water and Light $ 705,000 Payment for razing the building $ 141,000 Payment for relocation of utilities $ 250,000 Value of property as a clean site $1,095,000 Mr. Reid stated that it was the purchaser's understanding the BWL would be responsible for removing and relocating any underground utilities on the site (Parcel A), except for the 75-foot utility easement granted to the City of Lansing on the north side of Parcel A. General Manager Novick and General Counsel Amy Cavanaugh stated that they had not seen Mr. Reid's handout concerning the "Adjustment to Appraised Value" until now at this meeting. Ms. Cavanaugh stated that her understanding from the original agreement was that the purchaser had assumed the cost of removing and relocating the above ground utilities. She asked Mr. Reid if he was proposing to change that condition in the agreement. Mr. Reid responded that it was his understanding the BWL, as the seller, would be responsible for the relocation of the utilities. Commissioner Wonch asked if it was correct to say that the purchaser would agree to pay the BWL $705,000 and $141,000 to raze the building. Mr. Reid agreed and commented the purchaser would accept having the BWL perform the utility removal and relocation work based on an agreed upon allowance. General Manager Novick stated that he understood the issue was about the payment to relocate underground utilities, and that the overhead utilities would be the purchaser's responsibility. Mr. Reid acknowledged that he had previously introduced that proposal, however, it was the Board Meeting Page 64 May 24,2005 all related marketing materials and advertisements would also be arranged. Following discussion, the Commissioners unanimously endorsed the sponsorship proposal. It was moved by Commissioner Smith, seconded by Commissioner Wonch to authorize the General Manager to bring forth a resolution to the Board on the corporate sponsorship of the Impression 5 Phase#2 water exhibit. Aye: Callen, Calkins, Graves, Haggart, Joseph, Rios, Smith, Wonch Nay: None Absent: None FISCAL YEAR 2006 FINANCIAL PLAN AND PRELIMINARY BUDGET Senior Vice President of Finance and Administration Dennis McFarland reported that FY 2006 will be a challenging year for the BWL. He noted that since his last financial report to the Board in March 2005, significant cost increases have transpired due to inflation in the areas of labor and health care costs for both existing and retired employees. Further, the recently announced early shutdown of two General Motors (GM) Lansing Car Assembly plants in the City of Lansing will adversely affect the BWL's sales forecast at least until the two new plants in Delta Township come on line at the end of 2006. Mr. McFarland reviewed the FY 2006 financial goals. He stressed that the BWL's credit quality is an indication of our financial strength. The BWL is currently rated AA by all the major rating agencies; however, this rating was assigned in 2003 at which time our financial strength was better than it is today. He noted that liquidity does remain strong in the current financial plan; however, cash reserves accumulated over the years will be used to mitigate the level of rate increases that need to be requested. It is estimated that for FY 2006, $16 million of the cash reserves will be used, which is consistent with the BWL's strategic plan. This takes advantage of the initially strong financial position that the BWL is in. Mr. McFarland stated that the BWL currently has a rate advantage in comparison to electric bills from Consumers Energy of approximately 14%. Consumers Energy has a rate increase pending before the Michigan Public Service Commissioner, significantly more than what the BWL is proposing. He also reported that BWL strives to use capital in the most efficient and appropriate manner to support the maintenance and expansion of facilities. The BWL has been burdened by costs associated with the CSO project and the accelerated lead replacement project. He also said that the BWL's goal is to maintain financially independent utilities; namely, electric, water, steam and chilled water. It is the intent that all four of those utilities should be independent on both an income basis and cash basis, and that, in part, is the reason for the differential rate increase being requested between electric and water. Mr. McFarland reported that the forecast for FY 2006 includes the proposed rate increases for water and electricity. He noted that net income figures would be dramatically lower without the increases. Also, the significant difference between the forecast reported at the March Committee of the Whole meeting was due to electric and rate increase proposals having been set in motion before the GM plant closings were announced. Page 65 Board Meeting May 24,2005 Mr. McFarland compared FY 2005 with the FY 2006 forecast: The effect of lower retail electric sales due to GM plant closings will be offset by higher wholesale sales. General Manager Novick emphasized that participating in the wholesale market can be a risky venture, thus the BWL intends to stay out of the wholesale market and not become dependent on it. Staff will continue to look for new revenue streams, but challenges are anticipated. Utility % FY'06 Forecast to FY'05 Forecast Electric—Retail -4.5% Electric Wholesale 46.8% Electric (mwh) 6.7% Water(ccf) -3.5% Steam (mlb) -46.9% Chilled Water(tnhrs) 0.0% (Commissioner Callen left the Committee of the ffhole meeting at 7:05 p.m.) Commissioner Graves raised a procedural concern with regard to the proposed rate increases that are part of the FY 2006 Budget presentation. He stated that to take informal action as a committee on the budget that includes the proposed rate increases prior to the public hearing would send the wrong message. He said that the public has a right to express their concerns and present their issues regarding the rate increases at the May I01h public hearing. Commissioner Rios agreed and remarked that the proposed budget should be part of answering the question as to why the rate increases are needed. He stated that the public hearing would provide staff an opportunity to present the rationale for proposing the increases in electric and water rates. The public would then be given a chance to comment on the proposal at the hearing. Commissioner Calkins asked if an alternative budget has been prepared in the event the rate increases are not approved. Mr. McFarland responded that presentations previously made to the Board from December 2004 through March 2005 clearly demonstrated the consequences without rate increases. Commissioner Wonch noted that the results would be worse now because of recent GM plant closings. Mr. McFarland reminded the Commissioners that the Charter requires the Board to adopt its annual budget by June 1 and filed with the City Clerk within ten days after adoption. (Commissioner Rios left the Committee of the Wliole meeting at 7:15 p.m.) Following lengthy discussion, the consensus was to defer the FY 2006 Budget discussions until after the Public Hearing. The proposed budget will be presented at the next Board meeting after the recommended rate increases are considered. (Commissioner Haggart left the Committee of the Whole meeting at 7:28 p.m.) Board Meeting Page 66 May 24,2005 RULES AND REGULATIONS FOR UTILITY SERVICES Senior Vice President of Operations Bill Cook introduced Director of Engineering Doug Wood who presented the annual update to the Rules and Regulations for electric, water, steam and chilled water, including fees and charges. A summary of the recommended FY 2006 changes was presented as follows: Electric, Water and Steam and Chilled Water • Revision of Rule 7.4 "Account Security Deposits" to strengthen the ability to collect a deposit for service when there is lack of credit history established with the Board of Water and Light. • A "Connect Fee" was established for customers requesting their service turned on after normal business hours and on weekends or holidays. • Updated fees and charges. • Several minor housekeeping issues to fonnat and consistency of text. Electric • A statement to require Board approved terminations when connecting customer cable to Board owned transformers was added to Rule 11.6 "Commercial and Industrial Services." Water • A definition was added to define "Meter Set." • Modification to "Customer Connection to Board Facilities" to clarify customer responsibility at the outlet of Meter tile or manhole utilizing the Meter Set definition. (I 1.3.B) Steam • No significant changes. Chilled Water • No significant changes. It was moved by Commissioner Calkins, seconded by Commissioner Smith to authorize the General Manager to present a resolution at the next Board meeting on amending the Rules and Regulations for Electric, Water, Steam and Chilled Water Services, including fees and charges for Electric and Water Services, with an effective date of July 1, 2005. Page 67 Board Meeting May 24,2005 Aye: Calkins, Graves, Joseph, Smith, Wonch Nay: None Absent: Callen(left at 7:05 p.m.), Haggart(left at 7:28 p.m.), Rios(left at 7:15 p.m.) MARCH FINANCIAL REPORT (Commissioners Smith and Wonch left the Committee of the Whole meeting at 7:38 p.m.) Chair Pro Tern Joseph announced that due to loss of quorum, the Committee of the Whole meeting would continue, but only for informational purposes, and that no further action would be considered. Senior Vice President of Finance and Administration Denies McFarland presented a financial report for March. He reported that the budget is three quarters of the way through FY 2005, with the results reasonably well known, but typically some surprises at year-end surfaced that were not planned. He noted that operationally, it was a poor year. A total of$2.5 million was lost due to weather, O&M expenses were up $1 million because of higher maintenance costs at the Erickson Power Station; net income is over budget by$2 million for labor costs as a result of the contract settlement. Mr. McFarland noted that the saving grace for the year was the one-time cash infusion dollars due to excess interest earnings on the Belle River Project Account returned by the Michigan Public Power Agency(MPPA). OPERATIONAL PERFORMANCE REPORT General Manager Novick told the Commissioners that it is staff s intent to address the Board's expressed interest in receiving operational reporting in addition to financial reporting. Operations Director Bill Cook was asked to present a status report of the BWL operations for the nine-month period ended March 31, 2005. He presented a high level overview of BWL's Hometown Scorecard that measures in the area of financial performance, customer service, operational excellence and people excellence. He reported that through the first nine months of the 2005 fiscal year, the BWL was meeting or exceeding performance targets in seven areas, but was below target on nine measures. In general, performance continues to lag in the financial area, but excel in the customer service area. Performance in Operational and People Excellence is mixed. Mr. Cook reviewed the results on each of the 16 performance measures through March 31. He also reported on the status of significant events related to the Erickson Station conversion proj ect. ADDITIGNAL INFORMATION CONCERNING RECOMMENDED SKILL FAMILY RANGE ADJUSTMENTS Human Resources Director Mary Dwyer reported that at the April 12, 2005 Human Resources Committee meeting, an item that should have been mentioned was inadvertently overlooked. She reported that four years ago when the Board adopted the Non-Bargaining unit compensation plan, 53 employees were above their skill family range maximum. The Board at that time adopted a resolution to allow those employees, if they qualified, to receive variable rate pay as part of their performance compensation. After four years, staff anticipated that all 53 employees would have either retired or the salary range would have caught up with their maximum. That is Board Meeting Page 68 May 24,2005 the case for all but four employees. Those four employees will not be eligible for any type of variable rate pay because their range maximum has not caught up. On motion by Commissioner Calkins, seconded by Commissioner Graves, the Committee of the Whole meeting adjourned at 8:09 p.m. Respectfully submitted, Ifield P. Joseph, Chair Pro Tem Committee of the Whole Motion by Commissioner Joseph, seconded by Commissioner Calkins, to receive the Committee of the Whole reports of May 3 and May 24, 2005 as presented. Action: Carried unanimously. MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Office of the Corporate Secretary. Comments Regarding Proposed Rate Increases. General Manager Novick reported that on March 10, 2005, staff recommended to the Committee of the Whole that the BWL's electric and water rates be increased and that a public hearing be set to consider public input on the recommendation. The Committee of the Whole sent this recommendation to the full Board for action at its March 22, 2005 meeting to file notice with the City Clerk and to set a public hearing on the rate increases. On March 16, 2005, staff sent a letter to every customer explaining the proposed rate increases, the reasons they are needed, and the impact on the customers. On March 24, 2005, the BWL filed the recommended rate changes with the City Clerk, set a public hearing for 5:30 p.m. on May 10, 2005, and posted a public notice. In the April bills, the BWL ConneCtions newsletter highlighted the public hearing and also discussed the proposal and its impact. On April 28, 2005, the BWL published a public notice of the hearing with the LANSING STATE JOURNAL and the public hearing was held on May 10, 2005. At the public hearing, seven individuals spoke to the issue of the rate increases. Mr. Novick noted that the Board meeting packet includes a transcript of the hearing, a copy of Mr. McFarland's presentation at the hearing explaining why staff is making its recommendations, and a written response on behalf of staff to issues and questions raised by the seven individuals who spoke. A copy of the written response was also mailed to each of the speakers. The written response has been made a part of the permanent record and is filed with the Corporate Secretary. Mr. Novick stated that the rate increase recommendation is necessary for the long-term financial health of the BWL. Chair Robin Smith stated that over the last several months the Commissioners have wrestled with the issue of expenses and revenues at the BWL. She said it has been made clear by staff that the BWL faces a future of flat to declining sales with rising costs. This is a situation that is not expected to correct itself, at least over the short term. She indicated that the Board has directed staff to continue to look for areas where expenses can be cut without impacting service or reliability to customers, and those efforts are expected to continue. She noted that given the magnitude of the situation, however, budget cuts alone will not be sufficient to match revenues Page 69 Board Meeting May 24,2005 with expenses. Staff has presented the Board with specific actions taken to notify customers of the proposal before the Board of Commissioners. Also, a public hearing was held in order to provide customers an opportunity to speak directly to the Commissioners on this matter and staff has provided responses to those customers who had questions at the public hearing. Resolution 2005-5-4 A. ELECTRIC AND WATER RATE INCREASES WHEREAS, the staff of the BWL, in the course of its financial planning process, has determined that the electric and water utilities will experience significant revenue shortfalls in Fiscal Year 2006 and beyond; and WHEREAS, such revenue shortfalls are caused primarily by the combination of very modest revenue growth over the last four years and rising costs due to higher labor and heath care costs as well as overall inflation; and WHEREAS, the last general rate increases in the electric and water utilities occurred in January 2003; and WHEREAS, the staff of the BWL has proposed a general rate increase of 3% for the electric utility effective July 1, 2005, an increase of 6.5% for the water utility effective July 1, 2005 and another increase of 6.5% for the water utility effective July 1, 2006; and WHEREAS, notice of the proposed increases were communicated to all customers by mail on March 16, 2005, public notice was made on April 28, 2005, and a public hearing was held on May 10, 2005 to receive comments on the proposed increases; and WHEREAS, the Board of Commissioners has considered the comments of the public as well as the recommendations made by BWL. RESOLVED, That the electric and water rate schedules listed below and detailed in the attached rate schedules be adopted and made effective for electric and water consumption on or after July 1, 2005. ELECTRIC: (Attachment A) Residential Service—Rate 1 General Service—Rate 3 Large General Service—Rate 4 Primary Service—Rate 5 Municipal Water Pumping Service—Rate 7 Large Capacity Service—Rate 8 Outdoor Lighting Service—Rate 9 Traffic Light Service—Rate 11 Space Conditioning and Electric Water Heating Service—Rate 12 Residential Senior Citizen-Rate 21 Street Lighting Service—Rate 31 Street Lighting Service—Rate 32 Board Meeting Page 70 May 24,2005 WATER: (Attachment B) Residential Water Service—Rate 1 General Water Service—Rate 2 Fire Service—Rate 4 Lawn Sprinkling Water Service—Rate 5 Fire Hydrant Charges—Rate 6 Motion by Commissioner Wonch, seconded by Commissioner Calkins, to approve the resolution. Discussion: Commissioner Wonch stated that she plans to vote for the increase, however, she is doing so reluctantly because of comments heard at the public hearing from senior citizens and others on fixed incomes regarding their difficulty in managing increasing costs. She noted that the BWL does offer a discounted electric rate for senior citizens and asked staff to investigate the implementation of a discounted water rate for seniors. She acknowledged the BWL's financial position and the necessity to raise electric and water rates. She also pointed out that BWL rates are still lower than private utilities Commissioner Graves stated that he was recently appointed to the Board after the Commissioners had spent months discussing and examining its financial outlook and the need to raise electric and water rates. He reported that upon joining the Board, he scheduled a number of meetings with staff and spoke with a couple of Commissioners to bring himself up to speed on the BWL's financial status and the rationale for the proposed increases. Commissioner Graves stated that he plans to support the proposal but would like to explore differential rates for the following customer classifications: (1) residential versus commercial and industrial customers; (2) senior citizens on fixed incomes and low-income customers living below the poverty level; and (3) customers outside of the City of Lansing. Commissioner Rios stated that he intends to support the resolution because of the level of confidence he has in the work that has been done by staff since he has been on the Board. He expressed appreciation for the overall professionalism in which the task of reviewing the necessity for a rate increase was conducted. He thanked the General Manager and his staff for using performance accountability standards and noted that measurement tools are important to improve efficiencies for the success of the BWL to continue to be a reliable resource in this community. Commissioner Rios also commended Internal Auditor Glenn Holloway's input in this process. He further stated that in times of financial crises, it is imperative to look at alternatives to continue to deal with change in such areas as union contract negotiations to evaluate the benefits provided by decisions made that directly impact rates. Commissioner Joseph stated that he is also prepared to support the rate increase. He echoed Commissioner Graves' opinion with respect to differential rates for owners and non-owners of this utility. He noted that staff is in the process of re-evaluating long-term utility contracts with surrounding townships. Commissioner Joseph emphasized the importance of reducing costs where possible in order to balance outside factors of which the BWL has no control, such as GM's decision to move up its schedule to close the Lansing Car Assembly. Plants. Action: Carried unanimously. Page 71 Board Meeting May 24,2005 Resolution 2005-5-5 B. AMEND R ULES AND REGULATIONS FOR ELECTRIC, WATER, STEAM, AND CHILLED WATER UTILITY SERVICES RESOLVED, That amendments to the Rules and Regulations for Electric, Water, Steam and Chilled Water Utility Services be approved as presented, effective July 1, 2005. The Rules and Regulations are filed with the Corporate Secretary and are posted on the BWL Internet. Attachment C—Electric Attachment D—Water Attachment E—Steam Attachment F—Chilled Water Motion by Commissioner Wonch, seconded by Commissioner Calkins, to approve the resolution. Discussion: General Manager Novick noted that in accordance with Board Policies 19-05 (Electric) 19-13 (Water), 19-15 (Steam), and 19-16 (Chilled Water), the Utility Rules and Regulations are subject to review and modification by the Commissioners. The proposed changes are recommended to better enforce standards and update fees and charges. Action: Carried unanimously. ........... ....... .... _ ... .. .._.... . Resolution 2005-5-6 C. CORPORATE SPONSORSHIP OF IMPRESSION 5 EXHIBIT RESOLVED, That the Board of Water and Light is authorized to sponsor the Impression 5 Science Center Water Room expansion project at a cost of$21,000. Motion by Commissioner Wonch, seconded by Commissioner Joseph, to approve the resolution. Discussion: General Manager Novick commented that staff presented this proposal to the Committee of the Whole on May 5, 2005 and it was unanimously supported. He stated that the expansion enhances an existing and popular Impression 5 exhibit that features scientific properties of water. The exhibit contributes to children's understanding of hydrology, propulsion, buoyancy, construction of plumbing systems and other scientific principles associated with water. More than 75,000 people per year visit the current exhibit. The Phase 1 expansion, which the proposed sponsorship will finance, is based on feedback from teachers, parents and children and will improve the visitors' learning experience. The sponsorship represents an investment in scientific education that will benefit children and the Greater Lansing community. A BWL sponsorship in 2001 helped finance the original construction of the Impression 5 Water Room exhibit. Action: Carried unanimously. Board Meeting Page 72 May 24,2005 Resolution 2005-5-7 D. SKILL FAMILY SALARY RANGE ADJUSTMENTS-NON-BAR GAINTNG UNIT EMPLOYEES The Board of Commissioners is responsible for setting salary ranges for the Board of Water and Light Non-Bargaining Unit employees. The Human Resources Director, with the concurrence of the General Manager, has recommended to the Human Resources Committee that the Board of Commissioners approve an adjustment to the skill family salary ranges. The Board of Commissioners has been advised as to the necessity of such an adjustment and has had an opportunity to discuss its merits. RESOLVED, That the Board of Commissioners shall adopt the attached adjustment to the Non- Bargaining Unit skill family salary ranges. (See Attachment G) RESOLVED FURTHER, That the General Manager is authorized to develop all procedures necessary for its implementation. Motion by Commissioner Calkins, seconded by Commissioner Wonch, to approve the resolution. Discussion: This item was discussed with the Human Resources Committee on April 12, 2005. Action: Carried unanimously. Resolution 2005=578 E. PERFORMANCE INCREASE MATRIX-NON-BARGAINING UNIT EMPLOYEES The Board of Commissioners is restnonsibMe for determining flip.tnp.rfrrmanrp.increase matrix fnr the Board of Water and Light's Non-Bargaining Unit employees. The Human Resources Director, with the concurrence of the General Manager, has recommended to the Human Resources Committee that the Board of Commissioners adopt a new performance increase matrix. The Board of Commissioners has been advised as to the necessity of such a revision, and has had an opportunity to discuss its merits. RESOLVED, That the Board of Commissioners shall adopt the attached revisions to the Non- Bargaining Unit performance increase matrix. (See Attachment G) RESOLVED FURTHER, That the General Manager is authorized to develop all procedures necessary for its implementation. Motion by Commissioner Joseph, seconded by Commissioner Wonch, to approve the resolution. Page 73 Board Meeting May 24,2005 Discussion: This item was discussed with the Human Resources Committee on April 12, 2005. Action: Carried unanimously. Fiscal Year 2006 Budget Presentation: General Manager Novick reported that the final item under the Manager's Recommendations is the budget for FY 2006, consisting of both operating and capital. He noted that staff has been discussing the BWL's financial situation with the Board for a number of months and more recently at the Committee of the Whole meeting on May 3, 2005. It was decided at that meeting to defer FY 2006 budget discussions until after the May 10, 2005 public hearing. Senior Vice President of Finance Dennis McFarland reviewed the FY 2006 Financial Plan. The Plan includes the rate increases approved by the Board earlier this evening. The rate relief was necessitated by what had been a flat revenue curve over the last few years, which has now become a declining revenue curve as a result of the shutdown of the two General Motors Car Assembly plants. Continued cost pressures are being experienced in labor, health care and other areas. Mr. McFarland updated the Commissioners on the five financial goals of the BWL: 1) Credit Quality, 2) Liquidity, 3) Rate Competitiveness, 4) Efficient and Appropriate Use of Capital, and 5) Financially Independent Utilities. He noted that the allocation of overhead costs to appropriately distribute costs to all the utilities has been revised. Staff will be reporting on each of the four utilities independently; namely, electric, water, steam, and chilled water. Mr. McFarland reported that the BWL currently has an AA rating, assigned in 2003. He noted that based on current projections, the BWL is in fact in a weaker position than it was in 2003. Despite the approved electric and water rate increases, the BWL's liquidity at the beginning of the year remained strong; however, the financial plan projects $16 million in cash reserves will be spent over the next 12 months. Mr. McFarland reported on the Sales Forecast: Utility Revised Original FY05 Forecast %'06 Forecast FY06 Forecast FY06 Forecast to '05 Forecast Electric-Retail 2,345,000 2,532,000 2,455,000 -4.5% Electric-Wholesale 1,000,000 604,000 681,000 46.8% Electric(mwh) 3,345,000 3,136,000 3,136,000 6.7% Water(ccfl 10,747,000 11,187,741 11,139,870 -3.5% Steam(m1b) 1,092,597 2,057,000 2,056,000 -46.9% Chilled Water(tnhrs) 11,931,000 11,931,000 11,931,000 0.0% Electric: • RCI (excl. GM) on historical growth rates normalized for weather • Trended growth rates: Residential=1.5%, Commercial=2.05%, Industrial=0.60% • Revised Forecast includes net GM reduction of 235,000 mwh due to plants 1 & 6 closing • Wholesale based on remaining generation & purchased power availability anticipated to increase in FY'06 Water: • RCI based on historical growth rates: Residential=0.98%, Commercial=0.19%, Industrial=0.0% Board Meeting Page 74 May 24,2005 • Revised Forecast includes net GM reduction of 325,000 ccf due to plant 1 & 6 closing • Wholesale based on historical commodities, revised to include lower anticipated sales to East Lansing-Meridian Water Authority Steam: • Significant reduction due to GM plants 1 & 6 closing,total GM reduction is 906,600 mlb Chilled Water: • Based on Minimum bill levels Mr. McFarland highlighted the Revenue Assumptions: • Rate increases effective July 1, 2005 (Electric 3% and Water 6.5%) • Steam includes current contract terms for General Motors • Chilled Water based on minimum bill levels • Stable electric wholesale prices • Year two of City of Lansing Rider includes revenue reduction of$750,000 Mr. McFarland summarized the Operating Expenses: • Decrease of 4 full time employees through the result of operating efficiencies • Salary Increases: - Bargaining Unit=3.1% increase effective 11/1/05 pursuant to the contract -Non-Bargaining= 3.1% increase effective 7/1/05 included in the overall labor budget • A 6% increase in health care costs is being recognized • Includes additional $3.7 million for Retiree Health Care due to recognition on the Balance Sheet (GASB 45) of$180 million unfunded liability. Mr. McFarland noted that over the past few years, the VEBA (Voluntary Employee Benefit Account) was established to hold unfunded health care dollars, and in the last few years $2 million per year has been set aside. That will continue plus the $3.7 million for retiree health care; consequently, a total of $5.7 million of operating revenues is being reserved to take care of the unfunded liability. Also, when possible, funds from the Defined Benefit Pension Plan are being transferred to fiarther retiree health care. Mr. McFarland presented an overview of Capital Expenditures: • Revenue producing capital additions justified by costibenefit analysis= $7.1 million. • Remaining capital less than annual depreciation expense= $26.5 million • Includes 10 year Lead Service Replacement Program: FY'06 = $3.5 million, $1 million higher than FY'05 • Includes work associated with the City's CSO and street reconstruction project: FY'06 = $5.8 million, $1 million higher than FY'05 Mr. McFarland reviewed the Income Statement comparing FY 2004, FY 2005 and FY 2006. He explained the business reasons for the change from the FY 2005 Budgeted Net Income of$2.4 million to a loss of$2 million in the FY 2006 Budgeted Net Income. Page 75 Board Meeting May 24,2005 Reconciliation of Budgeted Net Income: - ($Millions) 2005 Budgeted Net Income $2.4 Rate Increase (Elec &Wtr) $5.7 Higher Wholesale Revenue $3.1 Interest Income $1.6 Net GM Reduction $(6.5) Labor Costs $(1.3) Benefits $(1.8) Higher Materials and Other Costs $(1.4) GASB 45 Transfer $(3.7) Depreciation $(0.4) All Other $0.3 Total of these items $(4.4) 2006 Budgeted Net Income $(2.0) Senior Vice President of Operations Bill Cook presented the proposed Capital Budget for Fiscal Year 2006 and reported on the following assumptions: • Revenue producing capital additions are to be justified by a cost benefit analysis • Remaining capital targeted at less than annual depreciation expense • Lead service replacement program budgeted at $3,500,000 per year for the period. (FY 2006 incremental impact from FY 2005: $1,000,000) • CSO and street reconstruction related expenses budgeted to coincide with the most recent City of Lansing schedule. The City as part of this effort is moving into older parts of the BWL system and impacting more streets. This has resulted in an increase of$1,400,000 in FY 2006. • Steam production forecast expenses reflect initial response to GM plant closings. The Integrated Resource Plan will modify these values in next year's forecast. Mr. Cook also compared Capital Budget projections for FY 2005 vs. FY 2006 and reviewed the six-year forecast covering FY 2006—2011. Following discussion, the following resolution was presented: Resolution 2005-5-9 .. ........ . . . ...._... _..... F. FY 2006 OPERATING AND CAPITAL B UDGETS RESOLVED, That the annual Operating and Maintenance Budget covering Fiscal Year 2006 is hereby approved as presented. RESOLVED, That the Capital Budget for Fiscal Year 2006 is hereby approved as presented. Board Meeting Page 76 May 24,2005 RESOLVED, That the Forecast for Capital Expenditures for Fiscal Years 2006-2011 is hereby accepted as presented. RESOLVED FURTHER, That the Corporate Secretary is directed to make the appropriate filings with the City of Lansing City Clerk's Office and the Mayor's Office in accordance with the Lansing City Charter regarding the above actions. Motion by Commissioner Joseph, seconded by Commissioner Wonch, to approve the resolution. Discussion. See Attachment H for a summary of the Fiscal Year 2006 Operating and Maintenance Budget of$193.2 and Capital Program of$33.5 million for the same period. Such authorizations will enable the BWL to both maintain ongoing service to its customers and maintain and enhance its facilities for continued future use. Capital expenditures for the Fiscal Years 2006-2011 are estimated to be $201 million. Action: Carried unanimously. UNFINISHED BUSINESS No unfinished business. NEW BUSINESS No new business. RESOLUTIONS BY THE COMMITTEE OF THE WHOLE Resolution 2005-5-1.0 .. ....... .. RESOLUTION TO AMEND PURCHASE AGREEMENT REGARDING FORMER COAL STORAGE PROPERTY AT 312 NORTH GRAND ("TRIANGLE PROPERTY") WHEREAS, the Board of Water and Light ("BWL") and River Street Triangle, LLC ("Developer") are parties to an agreement dated May 17, 2001 ("Agreement") whereby Developer agreed to purchase certain BWL property located at the corner of Shiawassee and North Grand Avenue in Lansing ("Property") for $1,997,070.00; and WHEREAS, the parties would like to amend the Agreement to permit the Developer to purchase a smaller parcel of property, known in the Agreement as Parcel A, depicted in Exhibit 1, and defined as: A part of the parcel surveyed.and described in L. 5, PP. 608-610 of Ingham County Certified Survey Maps, said part of said surveyed parcel being particularly described as follows: Beginning at the southeast corner of the intersection of N. Grand Avenue and E. Shiawassee Street, said Point of Beginning now marked by a chiseled "x" in the concrete sidewalk; thence along the south line of E. Shiawassee Street (82.5 ft. wide) S 89°58'00" E 221.35 ft.; Page 77 Board Meeting May 24,2005 thence along a line that is 25 ft., more or less, westerly of and parallel to the concrete retaining wall on the west side of the Grand River the following four (4) courses: S 45°00'36" E 56.87 ft.; S 07°00'36" E 173.29 ft.; S 17°19'58" E 75.72 ft.; S 01°08'14" E 11.78 ft.; thence along the centerline of a common party wall and it's extension N 89°58'00" W 305.60 ft. to a point on the east line of N. Grand Avenue (82.5 ft. wide); thence along the east line of N. Grand Avenue N 00001'02" E 296.21 ft. to the Point of Beginning (a chiseled "x" in the concrete sidewalk), being on part of Block 66 of the Original Plat of Lansing, L. 2, PP. 36- 38 of Ingham County Deeds, and containing 81,363 sq. ft. or 1.8678 acres of land, more or less, and subject to easements and restrictions. WHEREAS, a portion of Parcel A, excluding a 75-foot strip immediately south of Shiawassee Street, was appraised in 2001. In 2005, the remaining 75-foot strip was also appraised, including the reservation of an easement on a minimum 45-foot strip for the City of Lansing's existing box culvert sewer. IT IS THEREFORE RESOLVED, That the Board authorizes the General Manager or his designee to negotiate and sign an Amended Purchase Agreement with the Developer for the sale of Parcel A at the price of $1,032,500.00. The Developer shall assume all costs to raze the building on the property and to move overhead and underground utilities. The Board also authorizes modifications to the remainder of the Agreement to make it consistent with this resolution. RESOLVED FURTHER, That a non-refundable $100,000.00 deposit shall be paid by the Developer to the BWL within five (5) days after passage of this resolution to effectuate this transaction. BE IT FINALLY RESOLVED, That the proceeds from the sale of the property shall remain with the funds and accounts of the Board of Water and Light. This sale is subject and contingent upon the approval of the Lansing City Council. Motion by Commissioner Joseph, seconded by Commissioner Graves, to approve the resolution. Action: Adopted by the following vote: Aye Commissioners Graves, Haggart, Joseph, Rios, and Smith Nay: Commissioners Calkins and Wonch Abstain: None Absent: Commissioner Callen GENERAL MANAGER'S REMARKS Operational Performance Report. General Manager Novick commented that at the Committee of the Whole meeting held May 3, 2005, several Commissioners left the meeting early and missed the operational performance presentation. He asked Senior Vice President of Operations Bill Cook to present the highlights of his report for the benefit of those who did not hear it. Mr. Board Meeting Page 78 May 24,2005 Cook gave a high level overview of the BWL's Hometown Scorecard that measures in the area of financial performance, customer service, operational excellence and people excellence. He also reviewed the results of each of the 16 performance measures and reported on the status of significant events related to the Erickson Station conversion project. COMMISSIONERS' COMMENTS Commissioner Wonch commended staff for the readable and understandable financial and operational reports. She also thanked the employees for their excellent job in addressing the lead situation and for working through the CSO problems. She noted that these efforts clearly demonstrate the commitment and loyalty the employees have to the BWL and this community. Commissioner Rios congratulated staff on a successful Twenty-Five Year Award Dinner. He said it was heartwarming to hear the antidotes and stores told about the inductees. He noted that it was particularly inspiring to see the 80 and 90 years olds attend the dinner and wanting to be part of the group. This is a positive reflection on the good work that is being done at the BWL. Commissioner Joseph echoed the positive remarks made earlier about the employees. He remarked that while attending the BWL's Twenty-Five Year Award Dinner, he observed the number of employees who are nearing retirement. He emphasized the importance of succession planning and preparing employees for the anticipated openings that will result from these retirements. Commissioner Haggart welcomed Commissioner Graves on his return to the Board. Chair Smith also remarked about the Twenty-Five Year Dinner and the pride she observed that BWL employees have in their jobs and the Board of Water and Light. She congratulated Corporate Secretary Mary Sova on her induction to the Twenty-Five Year Club. Commissioner Smith announced the following committee appointments to fill vacancies for the remainder of this fiscal year ending June 30th: Commissioners Gary Calkins and Santiago Rios to the Nominating Committee and Commissioner Joseph Graves, Jr. to the Finance Committee. ABSENCES On motion by Commissioner Haggart and seconded by Commissioner Wonch, that the absence of Commissioner Callen be excused. Carried unanimously. PUBLIC COMMENTS Joseph Davis, Business Manager for IBEW Local 352, reported that he recently returned from a utilities conference and had an opportunity to visit the old converted power plant at the Baltimore Harbor. He noted that the Baltimore redevelopment plan is perfect for the Ottawa Station. Mr. Davis also spoke on the BWL's transition over the years with various organizational programs to improve operational effectiveness, quality, customer focus, customer satisfaction and alignment of organizational goals to achieve the best in class. He noted that Page 79 Board Meeting May 24,2005 most BWL employees choose service over self-interest which is important for the future direction of the organization. He expressed concern with the aging workforce noting that the average age of utility workers in this country is 49 years and the average retirement age is 55. He said this reinforces the importance of training and succession planning. He also encouraged management's continued dialogue with all employees on issues affecting the BWL and its impact on employees. More discussion is needed on what actions should be taken and how each employee can make a difference to meet the challenges facing the BWL and the utility industry. ADJOURNMENT On motion by Commissioner Joseph, seconded by Commissioner Rios, the meeting adjourned at 7:47 p.m. /s/Mary E. Sova, Secretary Filed with Lansing City Clerk June 3, 2006 ATTACHMENT A Electric Rate Schedules CONTENTS Residential Electric Service,Rate No. I........................................................................................................................1 GeneralElectric Service,Rate No.3.............................................................................................................................2 Large General Electric Service,Rate No.4...................................................................................................................3 PrimaryElectric Service,Rate No.5.............................................................................................................................4 Municipal Water Pumping Electric Service,Rate No.7...............................................................................................6 Large Capacity Electric Service,Rate No. 8.................................................................................................................7 OutdoorLighting Service,Rate No.9...........................................................................................................................9 TrafficLight Service,Rate No. 11..............................................................................................................................I 1 Space Conditioning and Electric Water Heating Service,Rate No. 12.......................................................................12 Residential Electric Service,Senior Citizen,Rate No.21...........................................................................................13 Street Lighting Service,Board Owned Systems,Rate No.31 ....................................................................................14 Street Lighting Service,Customer Owned Systems,Rate No.32...............................................................................16 EconomicDevelopment Rider................................................................................................:.........I.................I.......18 EnergyCost Adjustment.............................................................................................................................................19 Scheduled Curtailment/Interruptible Service Rider.....................................................................................................20 RenewableEnergy Rider.............................................................................................................................................21 InfrastructureRecovery Rider.....................................................................................................................................22 StreetLight Rider........................................................................................................................................................23 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A RESIDENTIAL ELECTRIC SERVICE RATE NO.1 Availabilitv-This rate is available to any single-family or multifamily dwelling of 4 units or less when the entire electric requirements are supplied at one point of delivery through one meter. Service to appurtenant buildings may be taken through the same meter. Service under this rate is not available to any single-family or multifamily dwelling unit of 4 units or less when a portion of the dwelling unit is used for commercial, industrial,or resale purposes unless the wiring is so arranged that service for residential and non-residential purposes are metered separately. Nature of Service-The service is alternating current,60 hertz,single phase, 120/240 nominal volts. Monthlv Rate - Shall be computed in accordance with the following charges: 7/1/05 Basic Service Charge $4.38 Per customer per month Commodity Charge Summer Billing Months of June through October $.0649 Per kWh for the first 500 kWh $.0693 Per kWh for all over 500 kWh Winter Billing Months of November through May $.0649 Per kWh for the first 500 kWh $.0676 Per kWh for all over 500 kWh Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board of Water and Light(BWL)property,or its operation,or the production and/or sale of electric energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delayed Pavment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Auxiliary Power Provision-Domestic customers desiring electric service as an auxiliary source of power to wind or solar powered generating equipment may take service under this rate schedule under special agreement with the BWL. The customer shall pay the charges set forth above. A customer taking auxiliary power under this rate shall pay all reasonable costs associated with any alteration of BWL equipment required for proper operation of the customer's generating equipment in parallel with the BWL system. A customer may elect to sell energy to the BWL at the rate of $.022/kWh delivered. Customers selling energy to the BWL shall pay a charge of$6.40 per month or part thereof instead of the above Basic Service Charge. Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 1 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A GENERAL ELECTRIC SERVICE RATE NO.3 Availability-This rate is available to any customer desiring secondary voltage service for any purpose when supplied at one point of delivery through one meter. The limitation to secondary-voltage service may be waived in instances where the character of the electric load at the premises served has changed substantially. This rate is not available for emergency or standby service. Nature of Service-The service is alternating current,60 hertz,single phase or three phase. The secondary voltage is determined by the Board of Water and Light(BWL). Monthly Rate-Shall be computed in accordance with the following charges. 7/O1/05 Basic Service Charge $15.45 per customer per month Commodity Charge Summer Billing Months of June through October $.0762 per kWh Winter Billing Months of November through May $.0733 per kWh Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Metering-Where the BWL elects to measure the service on the primary side of the transformers,the metered kWh thus measured will be reduced by 3%for billing purposes to adjust for transformer losses. Where the customer receives service through more than one meter,the consumption as registered by the different meters will not be combined for billing purposes,but will be computed and billed separately. Delayed Pavment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Auxiliary Power Provision-Customers desiring electric service as an auxiliary source of power to wind or solar powered generating equipment may take service under this rate schedule under special agreement with the BWL. The customer shall pay the charges set forth above. A customer taking auxiliary power under this rate shall pay all reasonable costs associated with any alteration of BWL equipment required for proper operation of the customer's generating equipment in parallel with the BWL system. A customer may elect to sell energy to the BWL at the rate of$.022/kWh delivered. Customers selling energy to the BWL shall pay a charge of 525.00 per month or part thereof instead of the above Basic Service Charge. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 2 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A LARGE GENERAL ELECTRIC SERVICE RATE NO.4 Availabilih,-This rate is available to any customer desiring secondary voltage for any purpose when the electrical requirements are supplied at one point of delivery through one metering installation and the billing demand is 15 kW or more. The limitation to secondary-voltage service may be waived in instances where the character of the electric load at the premises served has changed substantially. This rate is not available for standby or emergency services. Nature of Service-The service is alternating current,60 hertz,single phase or three phase. The secondary voltage is determined by the Board of Water and Light(BWL). Monthlv Rate-Shall be computed in accordance with the following charges. 7/1/05 Basic Service Charge $32.96 per customer per month Capacity Charge $9.01 Per kW for all kW of Maximum Demand Commodity Charge Summer Billing Months of June through October $.0406 Per kWh Winter Billing Months of November through May $.0371 Per kWh Reactive Power Charge $0.0082 per kvarh in excess of 50%of total kWh. The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh)metering installed in accordance with BWL Rules and Regulations regarding power factor. Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Enerey Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes, license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Billing Demand-The billing demand shall be the kW supplied during the 15-minute period of maximum use during the month. Metering-Where the BWL elects to measure the service on the primary side of the transformer,the metered kW and kWh quantities thus measured will be reduced by 3%for billing purposes to adjust for transformer losses. Where the customer receives service through more than one metering installation,the consumption as registered by the different metering installations will not be combined for billing purposes,but will be computed and billed separately. Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 3 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A PRIMARY ELECTRIC SERVICE RATE NO.5 Availability-This rate is available to any customer desiring primary voltage service when the electrical requirements are supplied at one point of delivery through one metering installation(except as provided below for Multiple Delivery Point Aggregation)and the billing demand is 100 kW or more. This rate is not available for standby or emergency service. Nature of Service-The service is alternating current,60 hertz,three phase. The primary voltage is determined by the Board of Water and Light(BWL). Monthly Rate-Shall be computed in accordance with the following charges: 7/1/05 Basic Service Charge $82.40 per customer per month Capacity Charge $7.31 Per kW for all kW of On-Peak Billing Demand,plus $2.42 Per kW for all kW of Maximum Demand Commodity Charge Summer Billing Months of June through October $0.0357 Per kWh for all kWh during the On-Peak Period,plus $0.0322 Per kWh for all kWh during the Off-Peak Period,plus Winter Billing Months of November through May $0.0340 Per kWh for all kWh during the On-Peak Period,plus $0.0322 Per kWh for all kWh during the Off-Peak Period Reactive Power Charge $0.0082 per kvarh in excess of 50%of total kWh The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh)metering installed in accordance with BWL Rules and Regulations regarding power factor. Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Enerev Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Billing Demand On-Peak Billing Demand: The On-Peak Billing Demand shall be the kW supplied during the 15-minute period of maximum use during the On-Peak Period during the month. Maximum Demand: The Maximum Demand shall be the kW supplied during the 15-minute period of maximum use during the month whether on-peak or off-peak. Schedule of on-peak and off-peak periods-The On-Peak Period shall be from 10:00 a.m.until 6:00 p.m.,Monday through Friday. All other hours shall comprise the Off-Peak Period. Adopted:May 24,2005 Effective:July 1,2005 4 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A PRIMARY ELECTRIC SERVICE RATE NO.5 Multiple Delivery Point Aggregation-The 15-minute period demands of multiple delivery points of a customer may be summed for determination of the total On-Peak Billing Demand under the following conditions: (a)the Maximum Demand at each delivery point must equal or exceed 100 kW;(b)the total On-Peak Billing Demand shall not be less than 4,000 kW;and(c)the customer shall agree to a service contract with the BWL for the customer's full electrical service requirements at the aggregated delivery points for a period of not less than five(5)years. Aggregation shall be applicable for determination of the On-Peak Billing Demand only. All other charges,including the Basic Service Charge and Maximum Demand,shall apply to each delivery point independently. Metering-When the BWL elects to measure the service on the secondary side of the transformers,the metered kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer losses. Where the customer receives service through more than one meter installation,consumption as registered by the different meter installations will not be combined for billing purposes,but will be billed and computed separately except as provided for in Multiple Delivery Point Aggregation. Equipment Supplied by Customer-The customer shall be responsible for furnishing,installing and maintaining all necessary transforming,controlling and protective equipment required for service beyond the BWL primary-voltage delivery point. At the sole option of the BWL,a customer may lease such transformers or other equipment from the BWL under terms established by the BWL. Delaved Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Anplieation Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 5 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A MUNICIPAL WATER PUMPING ELECTRIC SERVICE RATE NO.7 Availabilitv-This rate is available to any political subdivision or agency of the State of Michigan desiring service for potable water pumping and associated potable water production equipment when the entire electrical requirements are supplied at one point of delivery through one meter. This rate is not available for emergency,standby,or auxiliary service. Nature of Service-The service is alternating current,60 hertz,three phase. The secondary or primary voltage is determined by the BWL. Monthly Rate-Shall be computed in accordance with the following charges. 7/1/05 Basic Service Charge $10.30 Per customer per month Commodity Charge $.0577 Per kWh Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Enerev Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Metering-Where the BWL elects to measure the service on the primary side of the transformers serving the customer,the metered kWh thus measured will be reduced 3%for billing purposes to adjust for transformer losses. Delayed Pavment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 6 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A LARGE CAPACITY ELECTRIC SERVICE RATE NO.8 Availabili!y-This rate is available to any customer desiring primary voltage service when: (a)the electrical requirements are supplied at one or more points of delivery as provided below for Multiple Delivery Point Aggregation;(b)where the total On-Peak Billing Demand is 25,000 kW or more;and(c)the customer agrees to a service contract with the BWL for the customer's full electrical service requirements at the applicable delivery points for a period of not less than ten(10) years. This rate is not available for standby or emergency service. Nature of Service-The service is alternating current,60 hertz,three phase. The primary voltage is determined by the Board of Water and Light(BWL). Monthly Rate-Shall be computed in accordance with the following charges: 7/1/05 Basic Service Charge $257.50 per delivery point per month Capacity Charge $8.24 per kW for all kW of On-Peak Billing Demand,plus $1.55 per kW for all kW of Maximum Demand Commodity Charge Summer Billing Months of June through October $0.0309 per kWh for all kWh during the On-Peak Period,plus $0.0268 per kWh for all kWh during the Off-Peak Period,plus Winter Billing Months of November through May $0.0297 per kWh for all kWh during the On-Peak Period,plus $0.0268 per kWh for all kWh during the Off-Peak Period Reactive Power Charge $0.0082 Per k varh in excess of 50%of total kWh Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Billine Demand On-Peak Billing Demand: The On-Peak Billing Demand shall be the total kW supplied to all applicable delivery points during the 15-minute period of maximum use during the On-Peak Period during the month. (See Multiple Delivery Point Aggregation) Maximum Demand: The Maximum Demand for each delivery point shall be the kW supplied during the 15- minute period of maximum use during the month whether on-peak or off-peak. Adopted:May 24,2005 Effective:July 1,2005 7 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A LARGE CAPACITY ELECTRIC SERVICE RATE NO.8 Schedule of on-peak and off-peak periods-The On-Peak Period shall be from 10:00 a.m.until 6:00 p.m.,Monday through Friday. All other hours shall comprise the Off-Peak Period. Multiple Delivery Point Aggregation-The 15-minute period demands of multiple delivery points of a customer shall be summed for determination of the total On-Peak Billing Demand under the following conditions: (a)the Maximum Demand determined at each delivery point must equal or exceed 1,000 kW;and(b)the total On-Peak Billing Demand shall not be less than 25,000 kW. Aggregation shall be applicable for determination of the On-Peak Billing Demand only. All other charges,including the Basic Service Charge and Maximum Demand,shall apply to each delivery point independently. Metering-When the BWL elects to measure the service on the secondary side of the transformers,the metered kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer losses. Where the customer receives service through more than one meter installation,consumption as registered by the different meter installations will not be combined for billing purposes,but will be billed and computed separately except as provided for Multiple Delivery Point Aggregation. Equipment Supplied by Customer-The customer shall be responsible for furnishing,installing and maintaining all necessary transforming,controlling and protective equipment required for service beyond the BWL primary-voltage delivery point. At the sole option of the BWL,a customer may lease such transformers or other equipment from the BWL under terms established by the BWL. Delayed Pavment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 8 Board of Water and Light,Lansing,Michigan—Electric Utility Rates OUTDOOR LIGHTING SERVICE ATTACHMENT A RATE NO.9 Availability-This rate is available to any customer located within the Board of Water and Light(BWL)service area for dusk to dawn lighting of customer's premises. The BWL furnishes and maintains all lights. The installation will overhang private property from existing or new poles set at points accessible to BWL construction and maintenance equipment. This rate is not available for purposes of street,highway,or public thoroughfare lighting. Monthly Rate-Shall be computed in accordance with the following charges. Luminaires on Overhead Mast Arm on existing BWL poles High Pressure Sodium 7/1/05 100 W $9.31 250 W $15.70 400 W $16.79 Mercury Vapor' 175 W $9.76 400 W $16.79 Floodlighting Luminaires on Bracket Arm on existing BWL poles High Pressure Sodium 100 W $13.30 250 W $16.67 400 W $19.52 Metal Halide 400 W $24.26 1000 W $41.95 1500 W $58.23 In the event additional facilities or rearrangement of existing facilities is required,the BWL shall install,operate and maintain such facilities for the following monthly charges. Type of Facilities 7/1/05 35-foot wood poles including span of overhead $11.97 Per pole secondary extension 37-foot concrete pole including span of overhead $17.52 Per pole secondary extension Other facilities,hand set poles,or rearrangement of existing facilities 1.67% of estimated cost Adopted:May 24,2005 Effective:July 1,2005 Rates apply to existing luminaires only and are not open to new business. 9 Board of Water and Light,Lansing,Michigan—Electric Utility Rates OUTDOOR LIGHTING SERVICE ATTACHMENT A RATE NO.9 Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill that is not paid on or before the due date. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Service Contract-A written service agreement shall be entered into to take BWL service for a term of years determined as follows: (a) One year,if additional facilities are not required,or (b) Three years,if additional facilities are required (c) Five years,for metal halide lamps or if monthly charges calculated at 1.67%of estimated cost, (d) Ten years,if special contractual arrangements are made. In the event the customer discontinues service before the end of the agreement term,the established rate for the remaining portion of the agreement shall immediately become due and payable. The BWL will replace lamps or make repairs when practicable after the customer has reported that the installation requires servicing. Such replacements and repairs will be made during regular working hours. The BWL may refuse or restrict the service provided in this rate to seasonal type customers and/or may require such customers to pay for the service annually in advance where the permanency of the customer is doubtful or has not been demonstrated by the customer. If relocation,including adjustment,of the outdoor protective light or relocation of other facilities used in connection with the light is desired by the customer during the term of the contract,the BWL will provide this service, if feasible,at the customer's expense. Adopted:May 24,2005 Effective:July 1,2005 10 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A TRAFFIC LIGHT SERVICE RATE NO.11 Availability-This rate is available to any political subdivision or agency of the State of Michigan desiring unmetered secondary service for operating traffic lights installed on streets or highways for traffic control and guidance. Nature of Service-The service is alternating current,60 hertz,single phase, 120/240 nominal volts Monthly Rate-Shall be computed in accordance with the following charges. 7/1/05 Basic Service Charge $2.06 Per customer per month Commodity Charge $.0319 Per watt of active load per month The actual labor,material,miscellaneous and indirect charges experienced maintaining and relamping traffic signals during the preceding month. Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Determination of Active Load-The active load of flasher lamps or cyclically operated traffic control lamps shall be 50% of total wattage of all lamps used during one complete cycle of operation. The active load of continuous,non-intermittent steady burning lamps shall be 100%of the total wattage of all lamps used. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 11 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A SPACE CONDITIONING AND ELECTRIC WATER HEATING SERVICE RATE NO.12 Availability-This rate is available to any customer desiring service for commercial/industrial space conditioning and/or electric water heating furnished through a separate meter to which no other electrical device except electric space heating, electric air conditioning,humidity control equipment or electric water heating equipment may be connected. Electric space heating will be considered to include heating by light system provided the primary means of space heating at the time of maximum heating requirements will be furnished by the lighting system with the balance of the heating requirements furnished by supplementary electric heating equipment. This rate is not available to new applications for heat for light systems received after March 1, 1979. This rate is not applicable to the use of electricity for electric air conditioning unless the customer has permanently installed electric space heating equipment and uses it as the principal source of space heating,or to the use of electricity for occasional or seasonal substitute for another method of water heating. Nature of Service-The service is alternating current,60 hertz,single phase at Board of Water and Light(BWL)available secondary voltage. Three phase service will be furnished at BWL option. Monthly Rate-Shall be computed in accordance with the following charges. 7/1/05 Basic Service Charge $20.60 Commodity Charge Summer Billing Months of June through October $.0873 per kWh Winter Billing Months of November through May $.0542 per kWh Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adjustment-Bill shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 12 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A RESIDENTIAL ELECTRIC SERVICE, SENIOR CITIZEN RATE NO.21 Availability-This rate is available to any single family or multifamily dwelling of 4 units or less when the entire electric requirements are supplied at one point of delivery through the same meter. The customer must be 65 years of age and head of the household being served. Service to appurtenant buildings may be taken through the same meter. Service under this rate is not available to any single family or multifamily dwelling of 4 units or less unit when a portion of the residence or dwelling unit is used for commercial,industrial,or resale purposes unless the wiring is so arranged that service for residential and non-residential purposes are metered separately. Customers taking service under this rate shall provide evidence of age and contract with the Board of Water and Light (BWL)to remain on this rate for at least twelve(12)months. Nature of Service-The service is alternating current,60 hertz,single phase, 120/240 nominal volts. Monthly Rate-Shall be computed in accordance with the following charges. 7/1/05 Basic Service Charge $4.38 Commodity Charge $.0469 per kWh for the first 300 kWh $.0791 per kWh for the next 200 kWh $.1061 per kWh for all over 500 kWh Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Energy Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delaved Payment Chargc-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 13 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A STREET LIGHTING SERVICE BOARD OWNED SYSTEMS RATE NO.31 Availability-Available to any political subdivision or agency of the State of Michigan for street lighting service for any system consisting of one or more luminaires where the BWL has an existing distribution system with secondary voltage available. Luminaires may be installed with no limitations as to spacing between luminaires. Where an overhead line extension is required to serve one or more luminaires,the BWL will furnish 350 linear feet of line extension per luminaire served from such extension. A special agreement will be required if more than 350 linear feet of line extension per luminaire is required. Nature of Service-The BWL will furnish,install,own,operate,and maintain all equipment comprising the street lighting system,and supply the unmetered energy. The BWL reserves the right to furnish service from either a series or multiple system or both. Annual Rate-The annual rate per luminaire with fixture and setting,payable in twelve(12)monthly installments, shall be as follows; High Pressure Sodium Luminaire 7/1/05 70 W $70 100 W $79 150 W $92 250 W $112 400 W $143 1000 W $293 Mercury Vapor Luminaire2 100 W $75 175 W $90 250 W $105 400 W $135 1000 W $256 Metal Halide Luminaire 175 W $157 250 W $178 400 W $180 1000 W $350 1500 W $537 Induction Luminaire 85 W $75 165 W $91 Adopted:May 24,2005 Effective:July 1,2005 2 Rates apply to existing luminaires only and are not open to new business except where the BWL elects,at the customer's request,to install additional luminaires within an area already served by a mercury vapor lighting system. 14 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A STREET LIGHTING SERVICE BOARD OWNED SYSTEMS RATE NO.31 Annual Rate(continued) plus an additional annual charge,depending on type of installation,of: 7/1/05 Wood Pole—Overhead Service None Wood Pole—Underground Service $81 Concrete Pole—Overhead Service $128 Concrete Pole—Underground Service $128 Post Top $81 Historic—Single Top $265 Large Historic—Dual Top $775 Small Historic—Dual Top $551 Wall/Tunnel—8760 hours $112 Wall/Tunnel—4200 hours $68 Bollard $263 Customer Contribution -The annual rates are based on fixtures normally stocked by the BWL, and installed utilizing normal construction techniques. The BWL may,at its option,upon customer request install a street lighting system not covered by the rates below. The customer,after installation,will be required to make a one time contribution equal to the difference between the actual installed cost and the BWL estimated installed cost of a standard installation. The annual unit charge for each luminaire will then be as stated below. Unit Replacement-The BWL may,at its option,upon customer request replace existing street light units. After installation,the customer shall make a one time contribution equal to the undepreciated value of the unit plus the cost of removal. Special Terms and Conditions-The BWL reserves the right to make special contractual arrangements as to termination charges,contributions in aid of construction,term or other special considerations when the customer requests service,equipment or facilities not normally provided under this rate. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill that is not paid on or before the due date. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective: July 1,2005 15 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A STREET LIGHTING SERVICE CUSTOMER OWNED SYSTEMS RATE NO.32 Availability-Available to any political subdivision or agency of the State of Michigan for street lighting service for any system consisting of one or more luminaires where the BWL has an existing distribution system available. Nature of Service-The BWL will connect the customer's equipment to BWL lines,furnish the control equipment, supply the unmetered energy,control the burning hours of the lamps,provide normal replacement of luminaire refractors,control devices and lamps. The customer will furnish,install and own all equipment comprising the street lighting system, including,but not limited to the overhead wires or underground cables between luminaires and the supply circuits extending to the point of attachment with the BWL. All maintenance and replacement of the customer's equipment except normal lamp and glass replacement shall be paid by the customer. The BWL reserves the right to furnish service from either a series or multiple system or both. Annual Rate-The annual rate per luminaire,payable in twelve(12)monthly installments,shall be as follows: High Pressure Sodium Luminaire 7/1/05 70 W $36 100 W $46 150 W $58 250 W $78 400 W $110 1000 W $261 Mercury Vapor Luminaire3 175 W $54 250 W $71 400 W $100 1000 W $222 Incandescent Luminaire4 2500 L $74 4000 L $117 6000 L $142 Maintenance Charge-The actual labor,material,miscellaneous and indirect charges experienced maintaining street light units during the preceding month. Combined Rates-The annual rate for units consisting of more than one luminaire shall be the appropriate combination of individual unit charges above. Adopted:May 24,2005 Effective:July 1,2005 'Rates apply to existing luminaires only and are not open to new business except where the BWL elects,at the customer's request,to install additional luminaires within an area already served by a mercury vapor lighting system. 4 Rates apply to existing luminaires only and are not open to new business. 16 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A STREET LIGHTING SERVICE CUSTOMER OWNED SYSTEMS RATE NO.32 Special Terms and Conditions-The BWL reserves the right to make special contractual arrangements as to termination charges,contributions in aid of construction,term or other special considerations when the customer requests service,equipment or facilities not normally provided under this rate. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill that is not paid on or before the due date. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 17 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A ECONOMIC DEVELOPMENT RIDER Purpose-The primary purpose of this rider is to enhance economic development in the Board of Water and Light(BWL) service area. It will be offered to customers when,in the utility's judgment,the availability of the rider is a major factor for the customer locating or expanding its operations and when the rider will result in a net benefit to the BWL and its customers. Availability-This rider is available to industrial customers on Large General Electric Service Rate No.4 or Primary Electric Service Rate No. 5 or Large Capacity Electric Service Rate No. 8. For purposes of this rider,an industrial customer is defined as any business that manufactures a product for sale or research and development. This would include usage for facilities directly associated with and on the same premises as the manufacturing business such as offices and warehouses. A customer desiring service under this rider must contract for such service on or before December 31,2003. This rate will be available for a period of five years from the date of the contract. All provisions of this rider are the same as the principal service rate with the following exceptions: New Customer-A new customer is a new industrial customer taking service on or after January 1, 1991,where the new load results in 100 kW or more of billing demand. Existing Customer-An existing customer is an existing industrial customer who contracts for a bona fide increase in connected load resulting in an increase of 100 kW,or 10%of their historical billing demand, whichever is greater,or more of billing demand on or after January 1, 1991. Monthly Rate Capacity Charge:A percentage of the capacity charge included in the principal service rate,less credits,as follows: Contract Year % 1 50% 2 60% 3 70% 4 80% 5 90% Contracted Historical Billing Demand-An existing customer's contracted historical billing demand will be the average of the three highest registered demands,including metering adjustments,during the twelve(12)month period prior to the contract or as established by mutual consent. The contracted historical billing demand shall be subject to the 60% provision during the contract period. The BWL reserves the right to establish a contracted historical billing demand for all customers with duplicate or replacement operations within the BWL service area. Billing_Demand-For a new customer,the entire billing demand shall be subject to the capacity charge in this rider and shall never be less than 100 kW or subject to the 60%provision. For an existing customer,or a new customer with an established contracted historical billing demand,the contracted historical billing demand shall be billed at the capacity charge in the customer's principal service rate. Only the billing demand in excess of the contracted historical billing demand shall be billed at the capacity charge in this rider and shall not be subject to the 60%provision. Minimum Charge-A new customer shall have a minimum billing demand of 100 kW. A customer,with an established contracted historical billing demand,shall have a minimum billing demand equal to 60%of the contracted historical billing demand. Adopted:July 25,2000 Effective:January 1,2001 18 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A ENERGY COST ADJUSTMENT The Energy Cost Adjustment permits the monthly adjustment of rates for the costs of energy incurred in supplying electricity to retail customers. All residential and general service rates are subject to the Energy Cost Adjustment. In applying the Energy Cost Adjustment the applicable rate per kWh shall be increased or decreased by the amount of the current Energy Cost Adjustment. The following definitions and procedures will be followed in calculating the monthly Energy Cost Adjustment. Definitions Energy Cost Adjustment-the amount per kWh by which the applicable rates shall be adjusted for billing in each month. Energy Costs-those costs incurred in supplying retail electricity. Such costs include fuel burned,energy costs associated with firm power purchases,net interchange power costs,and costs associated with other temporary power transactions. The cost of fuel burned shall include the delivered cost of fuel(base cost,escalations, premiums/penalties,transportation,demurrage),outside lab fees and other outside costs related to fuel procurement, and fuel additives such as freeze proofing. Over/Under Recovery-the difference between actual Energy Costs for prior months and the amount of energy cost recovered by means of the Base Cost of Energy and the Energy Cost Adjustment. The Over/Under Recovery shall be added to the Energy Costs for purposes of computing the Energy Cost Adjustment for each month. Base Cost of Energy-the average Energy Cost included in the energy rates of the various rate schedules. Such amount shall not be recovered by means of the Energy Cost Adjustment. The current Base Cost of Energy is $0.017921 per kWh sold. Procedures Estimated Energy Cost shall be projected for a twelve-month period. Any amount of Over/Under Recovery (positive or negative)shall be added to the Energy Cost to determine the total cost basis for the Energy Cost Adjustment. The total cost basis shall be divided by the projected total retail billed sales for the twelve-month period resulting in the average energy cost per kWh. The Base Cost of Energy shall be subtracted from the average energy cost to result in the Energy Cost Adjustment. The Energy Cost Adjustment shall be reviewed and,as necessary,revised periodically in accordance with the provisions of this schedule,but not less frequently than every twelve months. Effective February 2, 1999,through February 2,2003,the Energy Cost Adjustment is frozen at$0.001000 per kWh. Thus,the total cost of fuel and purchased power charged to customers is set at$0.018921 per kWh(Base 0.017921 +ECA 0.001000). Adopted:January 26, 1999 Effective:February 1, 1999 19 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A SCHEDULED CURTAILMENTANTERRUPTIBLE SERVICE RIDER Availabilitv-This rider is available to customers on Primary Electric Service Rate No.5 or Large Capacity Electric Service Rate No. 8 and any applicable future primary or transmission service rate approved by the commissioners. A customer desiring service under this rider must contract to curtail or interrupt its demand by 1,000 kW or more, upon notice by the Board of Water and Light(BWL). The amount of curtailable or interruptible demand subject to this rider may be limited by the Commissioners in total and by customer. Conditions of Curtailment/Interruption-The Commissioners may determine the total kW demand subject to this rider. The General Manager has authorization to negotiate with qualifying customers as to the following terms and conditions of this rider; [1]the customer kW demand subject to interruption or curtailment, [2]metering requirements, [3]the duration of any interruption or curtailment, [4]the notice period,and, [5]buy through provisions(if any). The contract with the customer will contain the conditions under which the BWL will require curtailment or interruption. Any reduced rate available will include some contribution to fixed costs and depend upon the customer's individual circumstances. The customer agrees to pay$50 per kW for the highest 15-minute kW demand created during the curtailed or interrupted period plus replacement energy out of pocket cost plus 10%should the customer choose not to curtail or interrupt electric load. Definitions Curtailed load-The customer agrees to reduce electric load upon notice from the BWL. Interrupted load-The customer agrees to receive no electricity upon notice from the BWL. Adopted:December 14, 1999 Effective:January 1,2000 20 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A RENEWABLE ENERGY RIDER Nature of Service:The BWL will provide green power to system per the participant enrollment,however,the BWL does not guarantee that the actual electricity delivered to each participant's facility at any specific time will be produced from a green supply resource. Availability-This rider is available to customers making use of any BWL Electric Rate Schedule. Monthlv Rate—Customers electing this premium service option will receive an additional charge for monthly energy of up to$7.50 per month for each kWh block of electricity they choose to purchase under this rider. Actual prices will be published each November and will be based on the expected additional cost of renewable resources and other renewable/conservation programs for the upcoming year. The amount of kWhs in each kWh block will be based on the availability of resources that the BWL is able to secure. Participation will be limited to the amount of resources that the BWL is able to secure. Minimum Bill:If the participant's actual monthly consumption is less than the kWh block in the contract,the participant will be charged for the full month's premium. Term and Form of Contract:All participants for this service under this rider will require a written contract stating the number of blocks,block size and the specified period of time in which they will be enrolled. Adopted:August 22,2000 Effective:January 1,2001 21 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A INFRASTRUCTURE RECOVERY RIDER Purpose:The primary purpose of this rider is to encourage economic development in the Board of Water and Light (BWL)service area and recover those expenses necessary to provide electric distribution infrastructure from the customers receiving retail electric service from the BWL on the qualifying property. It will be offered to customers when,in the BWL's judgement,the availability of the rider is a major factor in the customer locating or expanding its operations and when the rider will result in a net benefit to the BWL and its customers. Availabilitv-This rider is available to developers or customers that are developing commercial or industrial facilities requiring installation of BWL electric infrastructure. A customer desiring service under this rider must contract for full service electric requirements for the qualifying property,on or before December 31,2005. Qualifying property under contract must be 50 acres or more,unless specifically approved by the Board of Commissioners. The contract is subject to BWL funding ability and shall include BWL minimum revenue requirements. The contract term shall not be less than five years nor greater than twenty years. All provisions of the applicable principal service rate remain the same with the following exceptions: Monthly Rate Infrastructure Recovery Charge: During the term of the contract,up to 15%of the total monthly electric bill,less sales tax and franchise fees shall be added to the monthly charges for all electric services on the qualifying property. This charge shall be calculated using the contract term and economic criteria,as required by the BWL Rules and Regulations for Electric Service. Adopted:July 23,2002 Effective: September 1,2002 22 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A STREET LIGI3T RIDER Purpose—The primary purpose of this rider is to enhance economic recovery&development in the Board of Water and Light(BWL)service area. It is available when,in the utility's sole judgment,the availability of the rider is a major factor in improving our regional economy,and when application of the rider will result in a net benefit to the BWL and its customers. Availability—This rider is available solely to The City of Lansing and applicable only to its street lighting service with the Board of Water and Light. To qualify for this rider,the City of Lansing must enter into a written contract with the BWL specifying the operational aspects of the rider,including the percentage rate discounts permitted. The rider shall be in effect for a period not exceeding ten years from the date of the contract;however,the discount rate portion of the rider is only available for the first two years of that period. Monthly Rate—Through June 30,2005,the customer will be billed their normal monthly charges under Rate 31, less up to a 50%rate discount. From July 1,2005 through and including June 30,2006,the customer will be billed their normal monthly charges under Rate 31,less up to a 20%rate discount. During the remaining term of the contract,the customer will be billed their normal monthly charges under Rate 31,plus a rate surcharge of up to 9%. All references in this rider to Rate 31 mean the Rate 31 in effect at the time of billing. Delayed Payment Charge—A delayed payment charge of 5% of the unpaid balance, excluding delayed payment charges,shall be added to any bill which is not paid on or before the due date. Rules and Regulations—Service under this rate is subject to the BWL Rules and Regulations for Electric Service, which are incorporated herein by this reference. Adopted: September 28,2004 Effective: September 1,2004 Expires:July 1,2014 23 ATTACHMENT B Water Rate Schedules CONTENTS Residential Water Service,Rate No. 1..........................................................................................................................1 GeneralWater Service,Rate No.2................................................................................................................................2 Water System Connection Fees,Rate No.3..................................................................................................................3 FireService,Rate No.4................................................................................................................................................4 Lawn Sprinkling Water Service,Rate No. 5................................................................................................................5 FireHydrant Charges,Rate No.6.................................................................................................................................6 FireHydrant Rider.........................................................................................................................................................7 Board of Water and Light,Lansing,Michigan—Water Utility Rates ATTACHMENT B RESIDENTIAL WATER SERVICE RATE NO. 1 Availability-This rate is available to any single-family residence or multifamily dwelling of 4 units or less served by one meter. Monthly Rate-Shall be computed in accordance with the following charges. Basis Service Charge:per customer per month or part thereof: Meter 7/1/05 7/1/06 5/8" $6.60 $7.03 3/4" * $9.24 $9.84 1" $17.17 $18.29 1'/4"or 1%" $38.30 $40.79 2" $67.35 $71.73 Commodity Charge:per ccf of water used per month; $1.58 $1.68 *The BWL standard residential installation is a 1"service line with a%"meter. The BWL reserves the right, in its sole judgment,to install 5/8"meters on any new service installation when circumstances warrant. Power and Chemical Cost Adjustment-The power and chemical cost adjustment shall consist of an increase or decrease of 0.10 per ccf billed for each 0.10 increase or decrease in the average cost of power and chemicals required to deliver treated water to the customer's meter above or below 17.5¢per ccf. The cost per ccf for the billing period shall consist of the weighted average cost of chemicals,electricity,steam and oil used in pumping and treatment facilities during the one month period preceding the month billed by two months. Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of water,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Minimum Charge-The minimum charge shall be the above Basic Service Charge applied for 30 days. Deiaved Payment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed payment charges, shall be added to any bill which is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the Board. Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations for Water Service which are incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 1 ATTACHMENT B GENERAL WATER SERVICE RATE NO.2 Availability-This rate is available to any customer served on the BWL's water system. Service under this rate is not available for resale. Monthly Rate-Shall be computed in accordance with the following charges. Basic Service Charge: per customer per month or part thereof; Meter 7/1/05 7/1/06 5/8" $6.60 $7.03 3/4" * $9.24 $9.84 1" $17.17 $18.29 1'/<"or 1%:" $38.30 $40.79 2" $67.35 $71.73 3" $151.87 $161.74 4" $270.72 $288.32 6" $608.80 $648.37 8" $1,081.57 $1,151.87 10" $1,690.37 $1,800.24 Commodity Charge:per ccf of water used per month; $1.58 $1.68 *The BWL standard residential installation is a 1"service line with a 3/a"meter. The BWL reserves the right,in its sole judgment,to install 5/8"meters on any new service installation when circumstances warrant. Power and Chemical Cost Adjustment-The power and chemical cost adjustment shall consist of an increase or decrease of 0.1¢per ccf billed for each 0.10 increase or decrease in the average cost of power and chemicals required to deliver treated water to the customer's meter above or below 17.5¢per ccf. The cost per ccf for the billing period shall consist of the weighted average cost of chemicals,electricity,steam and oil used in pumping and treatment facilities during the one month period preceding the month billed by two months. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of water,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Minimum Charge-The minimum charge shall be the above Basic Service Charge applied for 30 days. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill which is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the Board. Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations for Water Service which are incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 2 ATTACHMENT B Board of Water and Light,Lansing,Michigan—Water Utility Rates WATER SYSTEM CONNECTION FEES RATE NO.3 System Connection Fees-The following schedule of fees shall apply to all new water service connections made to the mains. This fee shall not apply to active services that are being replaced. Service Connection to Main 1/19/O1 1/1/02 1/1/03 1"or smaller $1,000 $1,000 $1,000 1%:" $1,966 $2,081 $2,194 2" $3,495 $3,700 $3,900 3" $3,932 $4,163 $4,388 4" $6,990 $7,400 $7,800 6" $15,728 $16,650 $17,550 8" and over $27,961 $29,600 $31,200 Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of water,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delayed Payment Charlie-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill that is not paid on or before the due date. Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations for Water Service which are incorporated herein by this reference. Adopted: December 19,2000 Effective: January 19,2001 3 ATTACHMENT B Board of Water and Light,Lansing,Michigan—Water Utility Rates FIRE SERVICE RATE NO.4 Fire Service - A fire service line will be installed to a fire hydrant(s)or a customer's detector check valve in accordance with the schedule of charges for water system connection fees(Rate 3)and the current water service installation charges set forth in the Rules and Regulations for Water Service. The location of the detector check valve shall be determined by the Water Distribution Engineering Department. Fire service lines shall be used for fire protection purposes only. No additional charges will be made for water used for testing and fire purposes. The customer shall maintain the detector check valve and fire protection system connected thereto in good condition in compliance with Section 34-9,Repair and Protection of Equipment,of the Code of the City of Lansing,Michigan. Monthly Fire Service Charge-Water supply and maintenance of a fire service line to a detector check valve shall be provided in accordance with the following schedule of charges: Service Size 7/1/05 7/1/06 4"or smaller $48 $51 6" $107 $114 8" $190 $202 10"or larger $296 $315 Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of water,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Minimum Charge-Billings subject to this rate are not subject to a minimum charge. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill which is not paid on or before the due date. Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations for Water Service which are incorporated herein by this reference. Adopted: May 24,2005 Effective: July 1,2005 4 ATTACHMENT B Board of Water and Light,Lansing,Michigan—Water Utility Rates LAWN SPRINKLING WATER SERVICE RATE NO.5 Availability-This rate is available to any customer served on the BWL's water system where the meter or service is installed solely for lawn sprinkling. Municipalities having jurisdiction over sewer system rates may designate other uses of water which are subject to this rate. Monthly Rate-Shall be computed in accordance with the following charges. Basic Service Charge:Billings subject to this rate are not subject to a Basic Service Charge. Commodity Charge:per ccf of water used per month 7/1/05 7/1/06 all ccf $1.58 $1.68 Power and Chemical Cost Adiustment-The power and chemical cost adjustment shall consist of an increase or decrease of 0.10 per ccf billed for each 0.1¢ increase or decrease in the average cost of power and chemicals required to deliver treated water to the customer's meter above or below 17.50 per ccf. The cost per ccf for the billing period shall consist of the weighted average cost of chemicals,electricity,steam and oil used in pumping and treatment facilities during the one month period preceding the month billed by two months. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of water,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Minimum Charge-Billings subject to this rate are not subject to a minimum charge. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill which is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the Board. Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations for Water Service which are incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 5 ATTACHMENT B Board of Water and Light,Lansing,Michigan—Water Utility Rates FIRE HYDRANT CHARGES RATE NO.6 Annual Fire Hydrant Charge- Water Supply and maintenance of a fire service line to a public or private fire hydrant shall be provided in accordance with the following annual schedule of charges: 7/1/05 7/1/06 All Hydrants $314 $334 Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of water,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Minimum Charge-Billings subject to this rate are not subject to a minimum charge. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill which is not paid on or before the due date. Rules and Reeulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations for Water Service which are incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 6 ATTACHMENT B Board of Water and Light,Lansing,Michigan—Water Utility Rates FIRE HYDRANT RIDER Purpose—The primary purpose of this rider is to enhance economic recovery&development in the Board of Water and Light(BWL)service area. It is available when,in the utility's sole judgment,the availability of the rider is a major factor in improving our regional economy,and when application of the rider will result in a net benefit to the BWL and its customers. Availability—This rider is available solely to The City of Lansing and applicable only to its public hydrant service with the Board of Water and Light. To qualify for this rider,the City of Lansing must enter into a written contract with the BWL specifying the operational aspects of the rider,including the percentage rate discounts permitted. The rider shall be in effect for a period not exceeding ten years from the date of the contract;however,the discount rate portion of the rider is only available for the first two years of that period. Monthly Rate—Through June 30,2005,the customer will be billed their normal monthly charges under Rate 6, less up to a 50%rate discount. From July 1,2005 through and including June 30,2006,the customer will be billed their normal monthly charges under Rate 6,less up to a 20%rate discount. During the remaining term of the contract,the customer will be billed their normal monthly charges under Rate 6,plus a rate surcharge of up to 9%. All references in this rider to Rate 6 mean the Rate 6 in effect at the time of billing. Delayed Payment Charge—A delayed payment charge of 5%of the unpaid balance, excluding delayed payment charges,shall be added to any bill which is not paid on or before the due date. Rules and Regulations—Service under this rate is subject to the BWL Rules and Regulations for Water Service, which are incorporated herein by this reference. Effective:September 1,2004 Adopted:September 28,2004 Expires:July 1,2014 7 WATER&LIGHT Lansing Board of Water and Light Rules and Regulations For Electric Service DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 07/01/05 ATTACHMENT C WATE"� AR&UGHT Lansing Board of Table of Contents no Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions....................................................................................................................................................................4 GeneralProvisions.......................................................................................................................................................6 ServiceConditions.......................................................................................................................................................7 Characterof Service..................................................................................................................................................7 Descriptionof Service...............................................................................................................................................7 AvailableVoltage..................................................................................................................................................7 Dual Voltage Transformers...................................................................................................................................8 Agreements............................................................................................................................................................8 MaterialAvailability..............................................................................................................................................8 Useof Service...............................................................................................................................................................9 General......................................................................................................................................................................9 Accessand Damages.................................................................................................................................................9 CustomerEquipment.................................................................................................................................................9 PowerQuality............................................................................................................................................................9 PowerFactor............................................................................................................................................................10 Tampering................................................................................................................................................................10 Metering.....................................................................................................................................................................I I General....................................................................................................................................................................I I Installati on/Ownership.............................................................................................................................................I I EquipmentLocation................................................................................................................................................11 MultipleOccupancy Buildings................................................................................................................................12 Applicationof Rates..................................................................................................................................................13 General....................................................................................................................................................................13 Resale......................................................................................................................................................................13 Choiceof Rates........................................................................................................................................................14 ReactivePower........................................................................................................................................................14 Space Conditioning-Electric Water Heating Service.............................................................................................15 Mobile Homes in Courts-Individually Served.......................................................................................................15 Apartment Buildings and Multiple Dwelling Structures.........................................................................................15 Cogeneration and Small Power Production Facility................................................................................................15 BillingDemand........................................................................................................................................................16 MinimumCharges...................................................................................................................................................16 Property Owner-Rental Agent Agreement for'Leave On'Service........................................................................16 Responsibility for Payment of Bills..........................................................................................................................17 General....................................................................................................................................................................17 EstimatedConsumption...........................................................................................................................................17 BillingErrors...........................................................................................................................................................17 AccountSecurity Deposits......................................................................................................................................17 Dispute and Hearing Procedure...............................................................................................................................19 Disputes...................................................................................................................................................................19 Hearings...................................................................................................................................................................19 Sale and Lease of Service Facilities..........................................................................................................................21 Distribution System Extensions................................................................................................................................22 General....................................................................................................................................................................22 Request for Distribution System Extension.........................................................................................................22 Ownership............................................................................................................................................................22 Nonrefundable Contribution for Underground Extensions..................................................................................22 Deposit.................................................................................................................................................................22 Refunds................................................................................................................................................................23 Economic Development Offsets..........................................................................................................................24 DRAFT 6/23/2005 PROPOSED EFFECTIVE: 07/01/05 ATTACHMENT C Page 2 of41 WATER&UM Lansing Board of Table of Contents Im Water and Light Easements and Tree Trimming/Removal Permits...............................................................................................24 Non-Standard Equipment....................................................................................................................................24 Non-Standard Construction.................................................................................................................................24 OtherFacilities....................................................................................................................................................24 CustomerProvided Facilities...............................................................................................................................25 MobileHome Courts...........................................................................................................................................25 StreetLighting.....................................................................................................................................................25 OutdoorProtective Lighting................................................................................................................................25 Subdivisions.........................................................................................................................................................25 AvailableVoltage................................................................................................................................................25 Construction Date of Distribution Extension.......................................................................................................26 Trenchingand Duct.................................................................................................................................................26 Conversion of Existing Overhead Distribution Systems and Associated Services..................................................27 Electric Facility Relocations and Removals............................................................................................................27 Distribution System Extensions for Second Source................................................................................................28 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 Multi-Dwelling Structure Services..........................................................................................................................33 Conversion of Existing Overhead Electric Service..................................................................................................33 Electric Service Relocations and Removals............................................................................................................33 SecondService........................................................................................................................................................33 Motors.........................................................................................................................................................................35 Useof Board Equipment...........................................................................................................................................36 General....................................................................................................................................................................36 AuthorizedAttachments..........................................................................................................................................36 UnauthorizedUse and Removal..............................................................................................................................36 ParallelPower Sources..............................................................................................................................................37 General....................................................................................................................................................................3 7 Approvals................................................................................................................................................................37 Controland Protection.............................................................................................................................................37 Operation.................................................................................................................................................................37 Termination.............................................................................................................................................................38 Contract...................................................................................................................................................................38 Scheduleof Fees&Charges......................................................................................................................................39 DRAFT 6/23/2005 PROPOSED EFFECTIVE: 07/01/05 ATTACHMENT C Page 3 of41 wnrE` a�aLicHr 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. BORING— To pierce the ground with a turning or twisting movement of a tool to make a hole for pipes,cables etc. 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 1% Horsepower. KILOWATT-HOUR(kWh)—Unit of electrical Energy equivalent to the use of one kilowatt for one hour. ADOPTED: 05/25/04 EFFECTIVE: 07/01/04 ATTACHMENT C Page 4 of41 WATER R� Lansing Board of Definitions Water and Light Electric Rule and Regulation 1 MW 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. 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. MULTI-DWELLING STRUCTURE—A building containing 5 or more Dwelling Units, including but not limited to apartments,condominiums or senior housing projects. PERSON— Any individual, corporation, partnership, company, limited liability corporation, organization or governmental entity. 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 Multi-Dwelling 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: 05/25/04 EFFECTIVE: 07/01/04 ATTACHMENT C Page 5 of 41 wATE�RRIGHT Lansing Board of General Provisions Water and Light Electric Rule and Regulation 2 General Provisions 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 Person 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. This document is intended to cover most situations where standardized policies and practices have been established. No officer, agent or employee of the Board has authority to waive or modify the provisions of this document unless specifically authorized to do so by the Board of Commissioners. The Board of Commissioners may revise this document at any time and may modify or suspend any portion of it temporarily or permanently. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 6 of 41 WATER BLIGHT 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; 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 cases where the Board permits a separate power source, 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. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 7of41 wn-` Lansing Board of Service Conditions Water and Light Electric Rule and Regulation 3 (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 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 (Phase to Phase) Combined 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. The Board may charge a Connect Fee when the Customer request the service to be made active outside normal business hours as specified in Rule 15. 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 8 of41 wnr` Lansing Board of Use of Service 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 permission 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 I5. 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 9 of41 WATER&LIGHT Lansing Board of Use of Service am 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 uixuiiiiuuc z5civiwo ailu accn 1+11111111Li1 1.1161S1+J, 11 1= --- 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 10 of41 WATER Lansing Board of Metering swWater 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 connection 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 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 11 of41 WATE' Ra"ic"' Lansing Board of Metering go 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 Schedule 5 or Rate Schedule 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 12 of 41 WATEERB LIGHT 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 owner or operator shall be responsible for payment of purchased Energy for resale as required by Rule 7. The Board shall have no obligation to furnish or maintain meters or other Facilities for the resale of service by the reselling owner or operator to the occupant. Billing records of the owner or operator may be audited once every 12 to 18 months using generally accepted auditing practices. The audit shall be conducted by the Board or if the Board elects,by an independent auditing firm approved by the Board. The reselling owner or operator shall be assessed a reasonable fee for an audit conducted by the Board. The owner or operator providing the resale shall be responsible for testing each occupant's meter at least once every 3 years. The accuracy of such meters shall be maintained within 2% for non Demand meters and within 1% for Demand meters. Meters shall be tested only by outside testing services or laboratories approved by the Board. A record of each meter, including testing results, shall be kept by the reselling owner or operator during the use of the meter and for an additional period of one year thereafter. When requested,the reselling owner operator shall submit certified copies of the meter test results and meter records to the Board. The reselling owner or operator shall render a bill once during each billing month to each of the occupants' or tenants in accordance with the appropriate Board Rate Schedule. Every bill rendered by the reselling owner or operator shall specify the following information; The Rate Schedule title, the due date, the beginning and ending meter reading of the billing period and the dates thereof,the difference between the meter readings; the amount due for distribution services and/or Energy use, as applicable to the Rate; subtotal before taxes, the amount of sales tax, other taxes where applicable; the amount due for other authorized charges; and the total amount due. The due date shall be 21 days from the date of rendition. The reselling owner operator shall be responsible for all collections and payment disputes for resale occupants. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 13 of41 WATER Lansing Board of Application of Rates Do Water and Light Electric Rule and Regulation 6 The reselling owner or operator shall supply each occupant with an electric system adequate to meet the needs of the occupant with respect to the nature of service, voltage level and other conditions of service. If the reselling owner or operator fails to meet the obligations of this rule,the Board will notify the appropriate authorities and after reviewing with the reselling owner or operator, the problem(s) is not resolved,the Board may declare the reselling owner or operator in violation of Rule 2. 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 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 Am ere hours (kVARh)during the billing period. All Primary Voltage installations will include kVARh metering to determine the reactive power charge. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 14of41 wad' Lansing Board of Application of Rates on 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 10.1.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. S. 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 15 of41 WATER a""c� 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 16 of41 WATER Lansing Board of Responsibility for Payment of Bills ow 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. The Board will charge a"Non Sufficient Funds Fee" in accordance with Rule 15 for returned checks. 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 A. 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. B. When an error is found to exist in the billing of a contract or service agreement with or governing the Customer,the Board will correct such error to recover or refund the difference between 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 or without an established credit history. The Board shall 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 ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 17of41 WATER&LIGHT Lansing Board of Responsibility for Payment of Bills q5Water and Light Electric Rule and Regulation 7 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. 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 misrepresents their identity. (3) The Customer fails to provide positive identification at the time of applying for service. (4) The Customer has diverted or interfered, in an unauthorized manner, with utility service in the past 6 years. (5) 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, (5) credit card reversal, (6) or other payment method cancellation. (6) The Customer has a prior account that is delinquent within the last 6 years. 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 may not be required to submit a deposit, in any of the following situations: (1) The Customer has previously established an acceptable payment history with the Board on a similar account. (2) The Customer's bill is paid by a governmental agency. (3) The Customer secures a guarantor;the guarantor has an acceptable payment history. (4) The Customer provides an acceptable surety bond. (5) 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. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 18 of41 WATEaaucHT Lansing Board of Dispute and Hearing Procedure 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. 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 19 of 41 WATE�R&UgHT Lansing Board of Dispute and Hearing Procedure 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: 05/25/04 EFFECTIVE: 07/01/04 ATTACHMENT C Page 20 of 41 WATEr Lansing Board of Sale and Lease of Service Facilities Water 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: 05/25/04 EFFECTIVE: 07/01/04 ATTACHMENT C Page21 of41 WATE�R8I�IGHT 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 prior to construction, 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 and Multi-Dwelling Structures: 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,prior to construction, 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 22 of41 wAreG' Ali® 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. Rule 10.1.C. "Nonrefundable Contribution for Underground Extensions" may not apply to distribution system extensions evaluated under this section herein. 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. E. 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 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 23of41 WATER LIGHT Lansing Board of Distribution System Extensions Im Water and Light Electric Rule and Regulation 10 F. 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. G. 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. 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 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 24 of41 WATER&LIGHT Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 K. 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. L. Mobile Home Courts Underground distribution systems and services for Mobile Home Courts shall be installed under the provisions of this Rule 10 and Rule 11, 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. M. 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. N. 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. O. 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. P. 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 25 of 41 WATER&LIGHT Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 Q. 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. The other utility(s) electing to utilize joint trench will be responsible for payment of"Joint Trench Charges" in accordance with Rule 15, "Joint Trench Charges". 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 may elect at its sole discretion to install additional conduit or duct at the request of other utility providers. The utility(s)utilizing the conduit or duct will be responsible for payment of joint installation in accordance with Rule 15. 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. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 26 of 41 WATE�R&LIGHT Lansing Board of Distribution System Extensions no Water and Light Electric Rule and Regulation 10 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. 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 10.1.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. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page27of41 WATER Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 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 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. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C — Page 28 of41 WATE' Lansing Board of Services Water 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 law,regulations and local codes. Service shall not be provided to a Service Location through an existing structure. 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 prior to the start of construction. 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. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 29 of41 WATEERBL�IGHT Lansing Board of Services no Water and Light Electric Rule and Regulation 11 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 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. The ampacity of the Board's overhead service conductors will be rated for the estimated electric Demand but not less than 50% of the customer's main over current device(s). 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. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 30of41 TiTEFM Lansing Board of Services Water and Light Electric Rule and Regulation 11 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 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 t 1.4. In addition, the Board will impose a "Secondary Riser Pole Char e" 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 supplied by the Board and installed by the Customer. 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 between the ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 31of41 1VATE Lansing Board of Services Water and Light Electric Rule and Regulation 11 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. C. In locations were the Customer's service conductors are permitted to be connected directly to a Board-owned transformer, only Board approved and provided terminations shall be allowed. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 32 of 41 WATER&LIGHT Lansing Board of Services go Water and Light Electric Rule and Regulation 11 7. Multi-Dwelling Structure Services The owner or developer of each Multi-Dwelling Structure requiring an underground single phase electric service system shall install, maintain and own the underground secondary service conductors between the building and the service pedestal,padmount transformer, or secondary attachment on the pole. The total capacity of the Dwelling Units connected to each service shall not exceed the capacity of a single 167 kVA transformer. Customers located in areas served by direct burial distribution systems may request the Board to install direct buried single phase electric secondary service conductors to Multi-Dwelling Strictures not exceeding 800 A where the point of metering is located outside and is in compliance with the Board's requirements. The Board will comply with this request, if it is feasible, but shall only install service conductors to a 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. S. 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. 9. 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. 10. 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. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 33 of41 WATER&LIGHT Lansing Board of Services IN Water and Light Electric Rule and Regulation 11 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 34 of41 IYATER&LIG77 Lansing Board of Motors Water and Light Electric Rule and Regulation 12 no - 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 '/7.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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 35 of41 WATER&LIGHT Lansing Board of Use of Board Equipment go Water and Light Electric Rule and Regulation 13 Use of Board Equipment 1. General The Board's wires, poles and apparatus,together with any interconnections 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 13.3.13 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 36 of41 WATE� cGHT 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 located 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 37 of41 WATERBLIGHHTT 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 38 of41 wAr R'�HT Lansing Board of Schedule of Fees & Charges Water and Light Electric Rule and Regulation 15 Schedule of Fees &Charges ELECTRIC FEES and'CHARGES Charge Description When Applied Charge Residential Underground Distribution When requested by Customer $3.50/ft Extension $7/ft for undeveloped lots Residential Underground Service When requested by Customer $4.50/ft Green space only,restoration not included. Installation $300 minimum requiring conduit,sidewalk crossing or other hindrances will be billed at time and material Commercial Underground Distribution When requested by Customer $7/ft Extension Commercial Underground Service When requested by Customer $6.50/ft 400 A or less and green space only,restoration not $580 minimum included. Multi-Dwelling Structure Single Phase 800 A or less $6.50/ft $580 minimum Transformer kVA Capacity Commercial or Industrial underground services $10/kVA Current and Potential Transformer When requested by Customer,401—1000A $550 ea. Enclosure When requested by Customer,>1001A—1200A $800 ea. When requested by Customer,>1201A—3000A $8,400 ea. Multiple secondary termination cabinet When requested by Customer,up to 3000A $8,000 ea. Secondary Service Termination Box BWL installed commercial services requested by customer $500 ea. with trough system 800 A or less on Multi-Dwelling Structures Temporary Service Overhead Install&remove service drop, 100 ft max, 200 A or less $350 ea. 201A to 400 A $525 ea. Temporary Service Overhead Install&remove service drop,exceeds 100 ft, At cost 400 A or not available Temporary Underground When requested by Customer, $330 ea. (Normal) Connection&disconnection only April 1—December 14 Temporary Underground When requested by Customer, $500 ea. (Winter) Connection&disconnection only December 15—March 31 Secondary Riser Pole Charge When requested by Customer Single Phase 400 A or less $450 ea. Three Phase 400 A or less $650 ea. Site Inspection When applicable $75 ea. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 39 of41 WATEER&LIGGHT 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 and engineering At cost Pole Attachment Fees Annual fee $13 per attachment $260 minimum Application deposit,credited to make ready costs and $28 per pole engineering $560 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. Conduit Delivery for Joint Facilities To other utilities when conduit is delivered to site for $2.00/ft if 2 joint users Installation road or drive crossing for installation by developer's in same conduit contractor or BWL for utilization by Joint user(s). $3.50/ft if 1 joint users Joint Conduit Push with BWL To other utilities to utilize separately installed conduit $18 /ft if 2 joint users in same conduit $28/ft if 1 joint user Winter Construction Charge may apply. Joint Boring with BWL To other utilities to utilize separately installed flexible $18/ft if 2 joint users in duct. same duct $27/ft if 1 joint user Winter Construction Charge may apply. Winter Construction Charge December 15—March 31 $7/ft In addition to normal charge Connect fee 7:30 a.m.—5:30 p.m.weekdays No charge After 5:30 p.m.on weekdays or weekends and holidays $130 Reconnection fee Each occurrence Non-pay(Normal hours) 7:30am—5:30 p.m.weekdays $25 Non-pay(Other than normal hours) After 5:30 p.m.on weekdays or weekends and holidays $100 Meter Tampering Any time $100 Cut at Pole Anytime $150 Security Deposits—Residential For all new customers unless waived by conditions $68 stated in Rule 7. Security Deposits—Commercial& For all new customers unless waived by conditions 1.5 times average Industrial stated in Rule 7. monthly bill Missed Appointment,No Show,No After second occurrence $25 access Fee ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 40 of41 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 Non Sufficient Funds(NSF)Fee For Non Sufficient Funds on Checks $20 Rate 5&8 Meter Non-compliance For each month of non-compliance with meter $80/month Charge requirements Meter Calibration Charge When Customer requested meter calibration check is $70 within plus or minus 2%accuracy Charges other than published Relocations,damages,etc. At Cost ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 41 of41 WATER&LIGHT Lansing Board of Water and Light Rules and Regulations For Water Service DRAFT:6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT D WATERBLI�GHT Lansing Board of Table of Contents Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions....................................................................................................................................................................4 GeneralProvisions.......................................................................................................................................................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 Water Quality and Disturbances..............................................................................................................................10 ImproperUse and Tampering..................................................................................................................................10 Metering.....................................................................................................................................................................11 General....................................................................................................................................................................I I Sizing/Installation/Ownership.................................................................................................................................11 EquipmentLocation................................................................................................................................................11 MultipleOccupancy Buildings................................................................................................................................I I Damagedor Frozen Meter.......................................................................................................................................12 Applicationof Rates..................................................................................................................................................13 General....................................................................................................................................................................13 Resale......................................................................................................................................................................13 Choiceof Rates........................................................................................................................................................14 Apartment Buildings and Multiple Dwelling Structures.........................................................................................14 Billing......................................................................................................................................................................14 MinimumCharges...................................................................................................................................................14 Property Owner-Rental Agent Agreement for'Leave On'Service........................................................................14 Responsibility for Payment of Bills..........................................................................................................................16 General....................................................................................................................................................................16 EstimatedConsumption...........................................................................................................................................16 BillingErrors...........................................................................................................................................................16 AccountSecurity Deposits......................................................................................................................................16 Disputeand Hearing Procedure...............................................................................................................................18 Disputes...................................................................................................................................................................18 Hearings...................................................................................................................................................................18 Water Customer Choice Program............................................................................................................................20 General....................................................................................................................................................................20 Contractor Qualification and Approval...................................................................................................................20 ResidentialServices.................................................................................................................................................20 Deposit for On-Site Water Mains and Large Services.............................................................................................20 Permits.....................................................................................................................................................................20 DistributionSystem Extensions................................................................................................................................21 General...................................................................... ..................... ... ........................................................... ........... 21 Request for Distribution System Extension.........................................................................................................21 Ownership............................................................................................................................................................21 Availability of Distribution System Extension....................................................................................................21 Contribution In Aid of Construction for System Extensions...............................................................................21 Installation of Distribution System Extension.....................................................................................................22 AdequatePressure and Flow Capacity................................................................................................................22 DRAFT:6/23/2005 Proposed EFFECTIVE:7/l/05 ATTACHMENT D Page 2 of 36 . . Lansing Board of Table of Contents go Water and Light Permits.................................................................................................................................................................23 StakingRequirements...................................... ...................................................................................................23 FireHydrants.......................................................................................................................................................23 0vcoizinguf Distribution System Extension......................................................................................................z3 Economic Development Considerations..............................................................................................................z3 Easements........................................................................................................................................................... Non-Standard Equipment....................................................................................................................................z4 Non-Standard Construction.................................................................................................................................24 OtherFacilities....................................................................................................................................................2* Construction Date of Distribution System Extension..........................................................................................z* Water Facility Relocations and Removals...............................................................................................................z* Services............................................................... .......................................................................................................20 Oeucoal------------'------------'-----------------------'.26 TemporaryWater Service........................................................................................................................................ 6 DomesticWater Service..........................................................................................................................................26 General................................................................................................................................................................26 Customer Connections toBoard FudUtiex-----------------------------------27 CburQu --------------_--_----------------------------''// FireService..............................................................................................................................................................27 General................................................................................................................................................................ Charges28 ---------------------.---------------------------- 28 Lawn Sp,�bcr�o��ioo)Senico---------------------------------------- Water Facility Relocations and Removals...............................................................................................................2X BoosterPumps...........................................................................................................................................................^' WaterStorage Facilities............................................................................................................................................30 Croos—Couocutiou-------------------------------------------------'..31 General....................................................................................................................................................................31 Installation of8ucbflow Prevention Devices..........................................................................................................31 Inspection and Maintenance of8acbflow Prevention Devices................................................................................]l 3l CompUuouc----------------------------------------------------'. SevereHazard Locations.........................................................................................................................................3l ScuoodarySupyUou ------------------------------------------------.32 Schedule of Fees&Cburges--------------------------------------------..33 DRAFI:6{39/2OO5 Proposed EFFECTIVE: 7/005 ATTACHMENT D Page 3of36 WATER Lansing Board of Definitions Water and Light 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. BORING— To pierce the ground with a turning or twisting movement of a tool to make a hole for pipes,cables etc. CUSTOMER—A purchaser of water service supplied by the Board or a governmental entity that authorizes the Board to provide water service. CUSTOMER OWNED FIRE HYDRANT—The hydrant and appurtenances owned and maintained by the Customer, installed on CUSTOMER PIPING on private property after the Board metering point. 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. METER SET—Those pipes,valves and appurtenances that house the water meter. 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. PERSON— Any individual, corporation, partnership, company, limited Liability Corporation, organization or governmental entity. PRIVATE FIRE HYDRANT — The hydrant and appurtenances owned and maintained by the Board, installed on Water Mains on private property in Board approved easements to provide water primarily for fire fighting purposes for the property benefit. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 4 of 36 warE Lansing Board of Definitions Water and Light Water Rule and Regulation 1 PUBLIC FIRE HYDRANT — The hydrant and appurtenances owned and maintained by the Board, installed on Water Mains within public right-of-way or in Board approved easements to provide water primarily for fire fighting purposes for public benefit. 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 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 water service to Customer Piping. 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 5 of 36 WATER&LIGHT Lansing Board of General Provisions Water and Light Water Rule and Regulation 2 General Provisions 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.coin 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 Person 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 2" or larger 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. This document is intended to cover most situations where standardized policies and practices have been established. No officer, agent or employee of the Board has authority to waive or modify the provisions of this document unless specifically authorized to do so by the Board of Commissioners. The Board of Commissioners may revise this document at any time and may modify or suspend any portion of it temporarily or permanently. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 6 of 36 WATER ER&LIGF�IT Lansing Board of Service Conditions Water and Light Water Rule and Regulation 3 MWOM 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 7 of 36 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 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 permanent use of the service. The Board may charge a Connect Fee when the Customer request the service to be made active outside normal business hours as specified in Rule 15. 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. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 8 of 36 WATER&UGHT Lansing Board of Use of Service Im 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 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 Fire Service installations, Customer Pi in , 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. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 9 of 36 WATE` 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. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 10of36 WATEr Lansing Board of Metering go 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 or pit at or near the property line, and the cost, ownership and maintenance of the meter manhole or pit structure and the piping from the outlet of the Meter Set thereof shall be the responsibility of the Customer, except where the Board has retained ownership. The customer shall at all times, provide clear access to the meter manhole or pit structure for the purpose of meter and meter set access and maintenance. 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. DRAFT: 6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 11 of36 waTE Lansing Board of Metering go 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 12of36 WATE` A Lansing Board of Application of Rates go 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 owner or operator shall be responsible for payment of purchased water for resale as required by Rule 7. The Board shall have no obligation to furnish or maintain meters or other Facilities for the resale of service by the reselling owner or operator to the occupant. Billing records of the owner or operator may be audited once every 12 to 18 months using generally accepted auditing practices. The audit shall be conducted by the Board or if the Board elects,by an independent auditing firm approved by the Board. The reselling owner or operator shall be assessed a reasonable fee for an audit conducted by the Board. The owner or operator providing the resale shall be responsible for testing of each occupant's meter at least once every 3 years. The accuracy of such meters shall be maintained according to the most recent publication of Table 5-3, "Test Requirements for New, Rebuilt and Repaired Cold-Water Meters" within the AWWA M6 manual. Meters shall be tested only by outside testing services or laboratories approved by the Board. A record of each meter, including testing results, shall be kept by the reselling owner or operator during the use of the meter and for an additional period of one year thereafter. When requested,the reselling owner operator shall submit certified copies of the meter test results and meter records to the Board. The reselling owner or operator shall render a bill once during each billing month to each of the occupants' or tenants in accordance with the appropriate Board Rate Schedule. Every bill rendered by the reselling owner or operator shall specify the following information; The Rate Schedule title, the due date, the beginning and ending meter reading of the billing period and the dates thereof;the difference between the meter readings; the amount due for services and/or commodity use, as applicable to the Rate; subtotal before taxes, other taxes where applicable;the amount due for other authorized charges; and the total amount due. The due date shall be 21 days from the date of rendition. The reselling owner operator shall be responsible for all collections and payment disputes for resale occupants. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 13 of36 WATE�RBL Lansing Board of Application of Rates qNWater and Light Water Rule and Regulation 6 The reselling owner or operator shall supply each occupant with a water system adequate to meet the needs of the occupant with respect to the nature of service, water quality, pressure, Cross- Connection control and other conditions of service. If the reselling owner or operator fails to meet the obligations of this rule,the Board will notify the appropriate authorities and after reviewing with the reselling owner or operator, the problem(s) is not resolved, the Board my declare reselling owner or operator in violation of Rule 2. 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 snakes 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. 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 DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 14 of 36 WATER Lansing Board of Application of Rates Water and Light Water Rule and Regulation 6 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 15 of36 WATEr Lansing Board of Responsibility for Payment of Bills go 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. The Board will charge a"Non Sufficient Funds Fee"in accordance with Rule 15 for returned checks. 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 A. 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. B. When an error is found to exist in the billing of a contract or service agreement with or governing the Customer,the Board will correct such error to recover or refund the difference between 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 or without and established credit history. The Board shall 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 DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 16 of 36 WATER&LIGMT Lansing Board of Responsibility for Payment of Bills go Water and Light Water Rule and Regulation 7 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. 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 misrepresents their identity. (3) The Customer fails to provide positive identification at the time of applying for service. (4) The Customer has diverted or interfered, in an unauthorized manner, with utility service in the past 6 years. (5) 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, (5) credit card reversal, (6) or other payment method cancellation. (6) The Customer has a prior account that is delinquent within the last 6 years. A. 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. B. New Customers may not be required to submit a deposit, in any of the following situations: (1) The Customer has previously established an acceptable payment history with the Board on a similar account. (2) The Customer's bill is paid by a governmental agency. (3) The Customer secures a guarantor;the guarantor has an acceptable payment history. (4) The Customer provides an acceptable surety bond. (5) 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 17 of 36 WATER&LIGHT Lansing Board of Dispute and Hearing Procedure go 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 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/l/05 ATTACHMENT D Page 18of36 WATER Lansing Board of Dispute and Hearing Procedure ow 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. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 19 of36 wnre 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), and On-Site Water Mains, except Meter Set and metering equipment,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 Customer Choice Water Service 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 as stated in Rule 15 for each inspection. 4. Deposit and Non-Refundable Contributions for On-Site Water Mains and Large Services A deposit and non-refundable contribution shall be required for any Customer desiring to install On- Site Water Mains or commercial Customer Water Services. The amount of such deposit and non- refundable contribution 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, except no billing or refund will be made if the actual cost is within$100 dollars of the actual cost. 5. Permits The Board will obtain the MDEQ Permit For Water System Construction. The Customer shall be required to obtain all other permits. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 20 of 36 WATER Lansing Board of Distribution System Extensions 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 determine 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 prior to construction, 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. 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. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page21 of36 WA"TER&LIGHT Lansing Board of Distribution System Extensions Water and Light Water Rule and Regulation 10 NOUN- 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 approved site plan for Board review and approval. Installation of a Water Distribution Svstem 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. Variances from the Board's flow and pressure capacity requirements may be granted in writing by the Board and where applicable,the governing Fire Marshall . Where 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 22 of 36 WATERRIGHT Lansing Board of Distribution System Extensions Water and Light Water Rule and Regulation 10 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. 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. Fire Hydrants designated as Private Hydrants shall be billed according to Rate Schedule 6 and are the responsibility of the property owner. 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 and Tree Removal Permits 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 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 Water Distribution System extension including any Water Distribution System 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. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 23 of 36 WATEER&LI�GHT Lansing Board of Distribution System Extensions noWater and Light Water Rule and Regulation 10 In the event the required easements and tree 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). 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 DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 24of36 WATER&LIGHT Lansing Board of Distribution System Extensions Water and Light Water Rule and Regulation 10 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. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 25of36 LYATE`Aa ' 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 10.1.D. 2. Temporary Water Service Temporary water service is available to contractors and others for construction activities, sewer flushing, festival usage, and bulk tanker fill 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 two inches (2")and larger or unusual connections. Customer Water Services shall be installed from the Water Main to the Customer's building or metering manhole or pit 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 to the meter or meter manhole or pit 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/l/05 ATTACHMENT D Page26of36 WATER&LIGHT Lansing Board of Services Im 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 manhole or pit, the Customer shall connect at the outlet of Meter Set. The customer shall install a shut-off valve after the outlet of the Meter Set, normally installed at the inside wall of building to be served.. The customer shall be responsible to install, own and maintain Customer Piping from the outlet of the Meter Set and the customer shall be responsible to install, own and maintain the meter manhole or pit structures which house the Meter Set,except where the Board has retained ownership. 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 prior to construction, 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 Schedule 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 DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 27of36 WATER Lansing Board of Services Water and Light Water Rule and Regulation 11 (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, except were Customer Owned Hydrants or Fire Services are connected after the Board's metering point. 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 1.1.3.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 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. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 28of36 WATER A Lansing Board of Booster Pumps Water and Light Water Rule and Regulation 12 OWN 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 unmetered 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 29of36 WATER Lansing Board of Water Storage Facilities Water and Light Water Rule and Regulation 13 no 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 30 of36 WATER&LIGHT Lansing Board of Cross Connection IN 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, or Customer Piping (internal or external) is too complex to provide for reasonable inspection, or there exist a high potential for future cross connections, a backflow prevention device may be required at the Service Location, in addition to internal protection. 3. Inspeetion 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 DRAFT:6/23/2005 ATTACHMENT D Proposed EFFECTIVE:7/1/05 Page 31 of 36 WATER Lansing Board of Cross Connection go Water and Light Water Rule and Regulation 14 (3) Waste-treatment plants (both solid and liquid waste) (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. DRAFT:6/23/2005 ATTACHMENT D Proposed EFFECTIVE:7/1/05 Page 32 of 36 WATER at� Lansing Board of Schedule of Fees & Charges JW Water and Light Water Rule and Regulation 15 Schedule of Fees& Charges WATER:FEES and CHARGES Charge Description When Applied Charge Water Main Installation 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" $45/ft On 8" $55/ft On 12' $90/ft On 16' $115/ft Fire Hydrant Installation When requested by Customer Firm Price Quote Up to and incl.1"Water Service Main-to-Curb Box Stub on previously installed $1,500 per stub plus water mains restoration cost Curb Box-to-Building(Trenched) $675 minimum,$12/ft in excess of 45 feet plus restoration cost Curb Box-to-Building(Bored) $1,300 minimum,$28/ft in excess of 45 feet plus restoration cost Indoor Meter Set—Standard $175 Indoor Meter Set-With Backflow Prevention $280 Water Services(BWL Installed) Indoor Meter Set-With Split Irrigation $295 Outdoor Meter Set with Meter pit $1,800 Outdoor Meter Set with Meter pit—Customer $150 Choice Program(labor only) (Connection Fee applicable) Retrofit of existing service to allow for split $500 irrigation service Charge for setting meter on a split service after $60 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 Outdoor Meter Set With Meter pit—Customer $150 Choice Program(labor only) Spilt Irrigation Service Firm price quote Winter Construction Charge Water Services,2"and under $13/Trench ft Greater than 2"pipe or service Firm price quote December 15—March 31 In addition to normal charge DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 33 of 36 WATELIGHT Lansing Board of Schedule of Fees & Charges Water and Light Water Rule and Regulation 15 WATER FEES and CHARGES Charge Description When Applied Charge Frozen Meter Charge Upon occurrence For services: Up to 1" _$265 1 `/z =$615 2" _$795 plus additional labor& material cost if necessary Bulk Water Permit Fee Initial application fee $50 ea Bulk Water Renewal Fee Yearly $25 yearly Consumption Fee For commodity used $commodity charge/ccf (Filled at Hazel Street Yard Hydrant) +chemical charge-calculated according to current General Water Service Rate 2. Hydrant Flow Testing When requested by Customer $245 ea. Residential Service Inspection Each residential service inspection visit $60 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 commercial services Deposit of 5%for inspection, Administration actual cost of inspection that (Customer Choice Program) are less than or exceeding deposit will be reimbursed or billed. Additionally a nonrefundable 3%for engineering and admin for projects based on BWL Estimated construction cost of $100,000 or less Deposit of 4%for inspection, actual cost of inspection that are less than or exceeding deposit will be reimbursed or billed. Additionally a nonrefundable 2%for engineering and admin for projects based on BWL estimated construction cost of >$100,000 $1,400 minimum non refundable fee for construction inspection and $600 minimum non refundable fee for engineering and administration. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 34 of 36 WATER. Lansing Board of Schedule of Fees $ Charges Water and Light Water Rule and Regulation 15 WATER FEES and CHARGES Charge Description When Applied Charge Temporary Hydrant Usage for Within BWL service area for construction use construction,festivals and governmental special use by special Permit Fee per project $150 permit. (A) 1"RPZ backflow device plus $380 if required. Commodity fee $30/month or portion thereof (B) 2"RPZ backflow device plus $720 if required Continued on next page Commodity fee $60/month or portion thereof (C) Other approved backflow prevention Cost based on estimated usage device Temporary Hydrant Usage for Non-compliance fee $250 deposit construction,festivals and governmental special use by special Hydrant wrench $40 permit. Continued from previous page Water Theft Penalty Fee $500 1'occurrence Up to$1500 2"d occurrence Up to$5000 3`d occurrence and permit revocation Festivals,non-profit or otherwise 1" 1-3 days=$100 -includes rental of RPZ 4-7 days=$300 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 For all new customers unless waived by conditions stated in Rule 7. Water&City Sewer $71 Water Only $27 Security Deposits—Commercial& For all new customers unless waived by conditions 1.5 times average monthly bill Industrial stated in Rule 7. Connect fee 7:30 a.m.—5:30 p.m.weekdays No charge After 5:30 p.m.on weekdays or weekends and $130 holidays Reconnection Fee Non-pay(Normal hours) 7:30am—5:30 pm weekdays $25 Non-pay(Other than normal hours) After 5:30 p.m.on weekdays or weekends and $130 holidays Meter Tampering Any time $130 Missed Appointment,No Show,No After second occurrence $25 access Fee Non Sufficient Funds(NSF)Fee For Non Sufficient Funds on Checks $20 Meter Calibration Charge Customer request meter calibration check is within $70 plus or minus 1.5%of accuracy Charges other than those published Relocations,damages,etc. At cost DRAFT: 6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 35of36 sfi WATER&IGHT Lansing Board of Schedule of Fees & Charges Water and Light Water Rule and Regulation 15 DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 36 of 36 WATER&LIGHT Lansing Board of Water and Light Rules and Regulations For Steam Service DRADT: 6/23/2005 PROSED EFFECTIVE:7/1/05 ATTACHMENT E wn Lansing Board of Table of Contents so Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions....................................................................................................................................................................4 GeneralProvisions.......................................................................................................................................................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 Applicationof Rates..................................................................................................................................................I I General....................................................................................................................................................................I I Resale......................................................................................................................................................................I I Choiceof Rates........................................................................................................................................................12 Billing......................................................................................................................................................................12 MinimumCharges...................................................................................................................................................12 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 DistributionSystem 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..........................................................................................19 Steam Facility Relocations and Removals...............................................................................................................20 Services.......................................................................................................................................................................21 General....................................................................................................................................................................21 DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 2 of28 WATER Lansing Board of Table of Contents Water and Light Steam Service ...............................................................21 ........................................................................................... General................................................................................................................................................................21 Customer Connections to Board Facilities........................ ......................••••.22 ....................................................... Customer Steam Piping .....................................22 .................................................................................................. Installation and Maintenance of Steam Services.................................................................................................23 Steam Facility Relocations and Removals...............................................................................................................23 Condensate and Master Trap ......................... ".............24 General....................................................................................................................................................................24 Condensate ...............................24 MasterTrap.............................................................................................................................................................24 Condensate(Surge)Tanks.......................... ................25 ............................................................................................. By-pass Valve........................... ...............25 ................................................................... System Extension&Service Deposit........................................................................................................................26 General....................................................................................................................................................................26 Distribution System Extension and Customer Steam Service............................................................•..••.............•••26 Customer Steam Service Only ...............................................•.27 Schedule of Fees&Charges.................................. .........................28 ........................................................................... DRAFT 6/23/2005 Page 3 of 28 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E wnr Lansing Board of . Definitions Water and Light Steam 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. 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. PERSON— Any individual, corporation, partnership, company, limited liability corporation, organization or governmental entity. 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 4 of28 WATER 8�LIGHT Lansing Board of General Provisions on Water and Light Steam Rule and Regulation 2 General Provisions 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 Person 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. This document is intended to cover most situations where standardized policies and practices have been established. No officer, agent or employee of the Board has authority to waive or modify the provisions of this document unless specifically authorized to do so by the Board of Commissioners. The Board of Commissioners may revise this document at any time and may modify or suspend any portion of it temporarily or permanently. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 5 of28 WATER Lansing Board of Service Conditions MW 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 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; 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 6 of 28 WATEERRIG7 Lansing Board of Service Conditions Water and Light Steam Rule and Regulation 3 loom 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. The Board may charge a Connect Fee when the Customer request the service to be made active outside normal business hours as specified in Rule 13. 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 7 of 28 WATE�R&LIIGGHHTT Lansing Board of Use of Service 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 Stearn 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 8 of28 WATER&UGHT 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 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 9 of28 WATE�RBLIGHT 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 10 of28 wad Lansing Board of Application of Rates go 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 owner or operator shall be responsible for payment of purchased steam for resale as required by Rule 7. The Board shall have no obligation to furnish or maintain meters or other facilities for the resale of service by the reselling owner or operator to the occupant. Billing records of the owner or operator may be audited once every 12 to 18 month using generally accepted auditing practices. The audit shall be conducted by the Board or if the Board elects,by an independent auditing firm approved by the Board. The reselling owner or operator shall be assessed a reasonable fee for en audit conducted by the Board. The owner or operator providing the resale shall be responsible for testing of each occupant's meter at least once every 3 years. The accuracy of such meters shall be maintained within 2%. Meters shall be tested only by outside testing services or laboratories approved by the Board. A record of each meter, including testing results, shall be kept by the reselling owner or operator during the use of the meter and for an additional period of one year thereafter. When requested,the reselling owner operator shall submit certified copies of the meter test results and meter records to the Board. The reselling owner or operator shall render a bill once during each billing month to each of the occupants' or tenants in accordance with the appropriate Board Rate Schedule. Every bill rendered by the reselling owner or operator shall specify the following information;The Rate Schedule title, the due date,the beginning and ending meter reading of the billing period and the dates thereof;the difference between the meter readings;the amount due for services and/or commodity use,as applicable to the Rate; subtotal before taxes,sales tax, other taxes where applicable;the amount due for other authorized charges; and the total amount due. The due date shall be 21 days from the date of rendition. The reselling owner operator shall be responsible for all collections and payment disputes for resale occupants. The reselling owner or operator shall supply each occupant with a steam system adequate to meet the needs of the occupant with respect to the nature of service, pressure, and other conditions of service. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/l/05 ATTACHMENT E Page 11 of28 WATER Lansing Board of Application of Rates Water and Light Steam Rule and Regulation 6 If the reselling owner or operator fails to meet the obligations of this rule,the Board will notify the appropriate authorities and after reviewing with the reselling owner or operator, the problem(s) is not resolved,the Board may declare the reselling owner or operator in violation of Rule 2. 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. 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT E Page 12 of28 WATER A 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. 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. The Board will charge a"Non Sufficient Funds Fee" in accordance with Rule 13 for returned checks. 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 A. 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. B. When an error is found to exist in the billing of a contract or service agreement with or governing the Customer,the Board will correct such error to recover or refund the difference between 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 or without an established credit history. The Board shall apply different rules to new Customers signing up for service in accordance with Rule 7A.C. The deposit is DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 13 of28 WATEER&LI�GHHTT Lansing Board of Responsibility for Payment of Bills Water and Light Steam Rule and Regulation 7 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. 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 misrepresents their identity. (3) The Customer fails to provide positive identification at the time of applying for service. (4) The Customer has diverted or interfered, in an unauthorized manner, with utility service in the past 6 years. (5) 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, (5) credit card reversal, (6) or other payment method cancellation. (6) The Customer has a prior account that is delinquent within the last 6 years. 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 may not be required to submit a deposit, in any of the following situations: (1) The Customer has previously established an acceptable payment history with the Board on a similar account. (2) The Customer's bill is paid by a governmental agency. (3) The Customer secures a guarantor;the guarantor has an acceptable payment history. (4) The Customer provides an acceptable surety bond. (5) 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 14 of28 WATEr 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 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 15 of28 WATERALIGHT Lansing Board of Dispute and Hearing Procedure Water 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 16of28 WATE�U� 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. ADOPTED: 5/25/04 EFFECTIVE:7/l/04 ATTACHMENT E Page 17of28 WATER Lansing Board of Distribution System Extensions Water and Light Steam Rule and Regulation 9 Where a Steam Distribution System reinforcement is required to provide adequate temperature, pressure and flow capacity at the location of the Steam Distribution System 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 and Tree Trimming/Removal Permits 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. 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). 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: 5/25/04 EFFECTIVE: 7/l/04 ATTACHMENT E Page 18 of28 WATER&LIGHT Lansing Board of Distribution System Extensions Im Water and Light Steam 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 Steam Distribution System extension to meet a mutually agreed upon date. ADOPTED: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 19of28 WATER LIGHT Lansing Board of Distribution System Extensions 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 20 of28 WATER Lansing Board of Services ow 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 21of28 WATER a� 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 Stearn 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 22of28 WATER R&L�IGHT 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 23 of 28 AWNWAGNINNNIM WATEER&LIGHT Lansing Board of Condensate and Traps 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 24of28 WATEER&L�IGHH�T Lansing Board of Condensate and Traps go 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 25of28 wnr Lansing Board of System Extension & Service Deposit 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 26of28 WATER ALIGHT 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 27of28 WATER&LIGHT Lansing Board of Schedule of Fees & Charges Im Water and Light Steam Rule and Regulation 13 Schedule of Fees & Charges STEAM FEES and CHARGES Charge Description When Applied Charge Security Deposits—Residential For all new customers unless waived by conditions $139 stated in Rule 7. Security Deposits—Commercial& For all new customers unless waived by conditions 1.5 times average monthly bill Industrial stated in Rule 7. Connect fee 7:30 a.m.—5:30 p.m.weekdays No charge After 5:30 p.m.on weekdays or weekends and $130 holidays Reconnection fee Non-pay(Normal hours) 7:30 a.m.—5:30 p.m.weekdays $75 Non-pay(Other than normal hours) After 5:30 p.m.on weekdays or weekends and $130 holidays Meter Tampering Any time $130 Missed Appointment,No Show,No After second occurrence S25 access Fee Non Sufficient Funds(NSF)Fee For Non Sufficient Funds on Checks $20 Charges other than those published Relocations,damages,etc. At cost ADOPTED: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 28of28 WA` T Lansing Board of Water and Light Rules and Regulations For Chilled Water Service DRAFT 6/23/2005 PROPOSED EFFECTIVE: 7/01/05 ATTACHMENT F WATER&LIGHT Lansing Board of Table of Contents Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions....................................................................................................................................................................4 GeneralProvisions.......................................................................................................................................................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 Equipment Location.............................................................................................................................................. . 10 DamagedMeter.......................................................................................................................................................10 Applicationof Rates..................................................................................................................................................I I General....................................................................................................................................................................I I Resale......................................................................................................................................................................11 Billing......................................................................................................................................................................12 MinimumCharges...................................................................................................................................................12 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 EconomicDevelopment Offsets..........................................................................................................................18 Easements............................................................................................................................................................18 Non-Standard Equipment....................................................................................................................................18 Non-Standard Construction.................................................................................................................................18 OtherFacilities....................................................................................................................................................18 Construction Date of Distribution System Extension..........................................................................................19 Steam Facility Relocations and Removals...............................................................................................................19 Services.......................................................................................................................................................................20 General....................................................................................................................................................................20 SteamService..........................................................................................................................................................20 DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 2 of 23 WATER&LIGHT Lansing Board of Table of Contents on Water and Light General................................................................................................................................................................20 Customer Connections to Board Facilities..........................................................................................................21 CustomerSteam Piping.......................................................................................................................................21 Installation and Maintenance of Steam Services.................................................................................................21 Steam Facility Relocations and Removals...............................................................................................................21 SystemExtension&Service Deposit........................................................................................................................22 General....................................................................................................................................................................22 Distribution System Extension and Customer Steam Service.................................................................................22 CustomerSteam Service Only.................................................................................................................................22 Scheduleof Fees&Charges......................................................................................................................................23 DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 3 of23 WATE 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 includes pipes, fittings, valves, associated structures and the like, used as a part of or in connection with a chilled water installation. PERSON— Any individual, corporation, partnership, company, limited liability corporation, organization or governmental entity. 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. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 4 of23 WATE�RBLIGHT Lansing Board of General Provisions go Water and Light Chilled Water Rule and Regulation 2 General Provisions 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 w-,yw.lbwl.coin 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 Person 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. This document is intended to cover most situations where standardized policies and practices have been established. No officer, agent or employee of the Board has authority to waive or modify the provisions of this document unless specifically authorized to do so by the Board of Commissioners. The Board of Commissioners may revise this document at any time and may modify or suspend any portion of it temporarily or permanently. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 5 of23 WATER s LIGHT Lansing Board of Service Conditions Water and Light Chilled Water Rule and Regulation 3 no 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. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 6 of23 WATER A a�iGHHT 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. The Board may charge a Connect Fee when the Customer request the service to be made active outside normal business hours as specified in Rule 12. 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. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/l/05 ATTACHMENT F Page 7 of23 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. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 8 of23 wnrE 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 1.2. 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. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 9 of 23 WATER Lansing Board of Metering Water and Light Chilled Water Rule and Regulation 5 MINIM 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. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 10 of23 WATE�R&LIGHT Lansing Board of Application of Rates Water and Light Chilled Water Rule and Regulation 6 somm 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 owner or operator shall be responsible for payment of purchased chilled water for resale as required by Rule 7. The Board shall have no obligation to furnish or maintain meters or other facilities for the resale of service by the reselling owner or operator to the occupant. Billing records of the owner or operator may be audited once every 12 to 18 month using generally accepted auditing practices. The audit shall be conducted by the Board or if the Board elects, by an independent auditing firm approved by the Board. The reselling owner or operator shall be assessed a reasonable fee for an audit conducted by the Board. The owner or operator providing the resale shall be responsible for testing of each occupant's meter at least once every 3 years. The accuracy of such meters shall be maintained within 2%. Meters shall be tested only by outside testing services or laboratories approved by the Board. A record of each meter, including testing results, shall be kept by the reselling owner or operator during the use of the meter and for an additional period of one year thereafter. When requested,the reselling owner operator shall submit certified copies of the meter test results and meter records to the Board. The reselling owner or operator shall render a bill once during each billing month to each of the occupants' or tenants in accordance with the appropriate Board Rate Schedule. Every bill rendered by the reselling owner or operator shall specify the following information; The Rate Schedule title, the due date, the beginning and ending meter reading of the billing period and the dates thereof;the difference between the meter readings; the amount due for services and/or commodity use, as applicable to the Rate; subtotal before taxes, sales tax,other taxes where applicable;the amount due for other authorized charges; and the total amount due. The due date shall be 21 days from the date of rendition. The reselling owner operator shall be responsible for all collections and payment disputes for resale occupants. The reselling owner or operator shall supply each occupant with a chilled water system adequate to meet the needs of the occupant with respect to the nature of service,and other conditions of service. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 11 of 23 WATE�RB�LIG�HT Lansing Board of Application of Rates Water and Light Chilled Water Rule and Regulation 6 If the reselling owner or operator fails to meet the obligations of this rule,the Board will notify the appropriate authorities and after reviewing with the reselling owner or operator, the problem(s) is not resolved,the Board may declare the reselling owner or operator in violation of Rule 2. 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. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 12 of23 WATE�a� Lansing Board of Responsibility for Payment of Bills BW 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. The Board will charge a"Non Sufficient Funds Fee"in accordance with Rule 12 for returned checks. 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 A. 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. B. When an error is found to exist in the billing of a contract or service agreement with or governing the Customer,the Board will correct such error to recover or refund the difference between 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 or without an established credit history. The Board shall 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. To determine the deposit for new commercial and industrial Customers, the Board will estimate the average monthly bill and apply the 1.5 factor. ADOPTED:5/25/04 EFFECTIVE:7/1/04 ATTACHMENT F Page 13 of23 WATEER�HT Lansing Board of Responsibility for Payment of Bills Water and Light Chilled Water Rule and Regulation 7 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. 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 misrepresents their identity. (3) The Customer fails to provide positive identification at the time of applying for service. (4) The Customer has diverted or interfered, in an unauthorized manner, with utility service in the past 6 years. (5) 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, (5) credit card reversal, (6) or other payment method cancellation. (6) The Customer has a prior account that is delinquent within the last 6 years. 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 may not be required to submit a deposit, in any of the following situations: (1) The Customer has previously established an acceptable payment history with the Board on a similar account. (2) The Customer's bill is paid by a governmental agency. (3) The Customer secures a guarantor with a similar account and an acceptable payment history. (4) The Customer provides an acceptable surety bond. (5) 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. ADOPTED:5/25/04 EFFECTIVE:7/1/04 ATTACHMENT F Page 14of23 WATER&LIGHT Lansing Board of Dispute and Hearing Procedure go - 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: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page 15of23 WATER 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: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page 16 of23 WATE`auk Lansing Board of Distribution System Extensions 9W 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 1.1 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: 5/25/04 EFFECTIVE: 7/l/04 ATTACHMENT F Page 17 of23 WATER&LIGHT 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 and Tree Trimming/Removal Permits 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. 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 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). 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: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page 18 of23 WATER a Lansing Board of Distribution System Extensions Im 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, plus 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: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page 19of23 WATE�RB�LIGWHT 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. 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: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page 20 of23 WATER' A&� 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 full 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: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page 21of23 WATEER&LU77 Lansing Board of System Extension & Service Deposit MW 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: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page 22 of 23 wATE Lansing Board of Schedule of Fees & Charges Water and Light Chilled Water Rule and Regulation 12 ow Schedule of Fees & Charges CHILLED WATER FEES and CHARGES Charge Description When Applied Charge Security Deposits--Commercial& For all new customers unless waived by conditions 1.5 times average monthly bill Industrial stated in Rule 7. Connect fee 7:30 a.m.—5:30 p.m.weekdays No charge After 5:30 p.m.on weekdays or weekends and $130 holidays Reconnection fee Non-pay(Normal hours) 7:30 a.m.—5:30 p.m.weekdays $75 Non-pay(Other than normal hours) After 5:30 p.m.on weekdays or weekends and $130 holidays Meter Tampering Any time $130 Missed Appointment,No Show,No After second occurrence $25 access Fee Non Sufficient Funds(NSF)Fee For Non Sufficient Funds on Checks $20 Charges other than those published Relocations,damages,etc. At cost ADOPTED: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page 23of23 Human Resources 1232 Haco Drive WATER&LIGHT P.O.Box 13007 Lansing,MI 48901 517.702.6262 www.lbwl.com ATTACHMENT G Skill Family Range Adjustments for FY 2006 for Non-Bargaining Unit Employees Skill Family FY 2006 Range Adjustment Customer Service&Office 0.0% Directors 0.0% Engineering &Scientific +3.0% Finance & Purchasing. 0.0% Human Resources & Legal 0.0% Information Technology 0.0% Marketing &Communication 0.0% Technical 0.0% Performance Increase Matrix for FY 2006 for Non-Bargaining Unit Employees Salary Increase Percentage Appraised Level of.Performance Range Power Performer Maximum of 7.5% 451 -500 Outstanding 4.5% or 5.0% 37.6 -450 Exceeds Expectations 3.5% or 4.0% 276-.375 Meets Expectations 2.0%, 2.5% or 3.0% 226 -275 Needs Improvement 0.5% or 1.0% 225 or less Fails to Meet Expectations. 0.0% 'Power Performer: In order to be eligible to receive a "Power Performer" award, an employee's performance level must be "Outstanding" and the employee must be nominated for the Power Performer Program by his or her process Director. The Process Council jointly reviews nominees and makes recommendation for the General Manager's approval. The performance award can be up to a maximum of 7.5%. Power Performers receive 100% of their award to their base salary not to exceed their range maximum—whether or not it places their base salary above the market rate or the base pay cap. Power Performer awards may be distributed to up to 10 percent of the employees in each process. Note: FY 2004 was the last year employees were eligible to earn variable pay above their pay range maximum. As of FY 2001, 53 employees were above their pay range maximum. Currently,with the adoption of this resolution, 4 employees will be above their pay range maximum and will not be eligible to receive variable pay. These employees will still receive a performance appraisal. ATTACHMENT H Projected Income Statement (by Utility) CHILLED $(000) ELECTRIC WATER STEAM WATER TOTAL PROJECTED INCOME STATEMENT FY 2006 SALES (mwh,ccf,mlb,ton-hrs) 3,345,000 10,747,000 1,093,000 11,931,000 I OPERATING REVENUE 185,015 24,958 13,376 4,973 228,322 8 Operation& Maintenance Expense (159,174) (21,720) (10,695) (1,734) (193,322) Depreciation Expense (21,2111 (4,000) 1( ,677) (1,722) (28,610) TOTAL OPERATING EXPENSE (180,385) (25,720) (12,372) (3,456) (221,932) OPERATING INCOME (Loss) 4,630 (762) 1,004 1,517 6,390 Payment to City (7,401) (998) (535) (199) (9,133) Other Non-Operating Income 2,946 2,175 272 0 5,393 Other Non-Operating Expense (1,811) 7� ) 163 (1,934) (4,615) NET INCOME (Loss) (1,636) (292) 579 (616) (1,966) Return on Net Assets(3/31/05 base) -0.6% -0.2% 1.7% -2.0% -0.4% Excludes Central Utility Complex revenue, depreciation and debt service. BWL income from CUC included in other income. WATER&LIGHT 10 i ATTACHMENT H Projected Cash Flow (by Utility) i 5 annmr=we vami..avacm:m+a-�rvcma+e+v.av:+en��n'_-eaawwn•avasevmmxasmvw..wmvesv seri smwvMaaaavra�+vm:'ww. a�euca:y.. aaressswasu.w>cw+rmsw f CHILLED $(000) ELECTRIC WATER STEAM WATER TOTAL PROJECTED CASH FLOW FY 2006 BEGINNING OPERATING CASH 29,565 3,522 2,004 0 35,091 Sources of Cash Net Income (1,636) (292) 579 (616) (1,966) Depreciation 21,211 4,000 1,677 1,722 28,610 SOURCES OF CASH 19,575 3,708 2,256 1,106 26,644 TOTAL BEG CASH AND SOURCES 49,140 7,230 4,259 1,106 61,735 Uses of Cash Debt Principal (2,429) (1,566) (1,103) (1,029) (6,127) Working Capital Change (2,842) (2,842) Net Capital Expenditures (20,858) 1( 1.322) 855 425 (33,460) USES OF CASH (26,129) (12,888) (1,959) (1,454) (42,429) ENDING OPERATING CASH 23,012 (5,658) 2,301 (348) 19,305 ware Operating Cash includes O&M Fund and Receiving Fund. li n SUMMARY ATTACHMENT H ANNUAL CAPITAL ADDITIONS,PLANNED CAPITAL PROJECTS&BONDED CAPITAL PROJECTS FISCAL YEAR 2005-2006 BUDGET Final BOARD OF WATER AND LIGHT Pagel of 18 Total Expenditures Expenditures Total Fiscal Year 2005-2006 Funding Project As Of Fiscal Year Project Cash Bond Dollars in (000's) Estimates 6/30/05 2005-06 Balances Flow Fund CIA Total ELECTRIC Sub-Total Revenue 7,536 0 7,536 0 6,240 0 1,296 7,536 Sub-Total Non-Revenue 32,142 8,315 14,959 8,868 13,372 0 1,587 14,959 TOTAL ELECTRIC 39,678 8,315 22,495 8,868 19,612 0 2,883 22,495 WATER Sub-Total Revenue 8,200 0 8,200 0 0 0 8,200 8,200 Sub-Total Non-Revenue 46,653 113 11,336 35,204 10,666 0 670 11,336 TOTAL WATER 54,853 113 19,536 35,204 10,666 0 8,870 19,536 STEAM Sub-Total Revenue 15 0 15 0 15 0 0 15 Sub-Total Non-Revenue 781 105 676 0 676 0 0 676 TOTAL STEAM 796 105 691 0 691 0 0 691 CHILLED WATER Sub-Total Revenue 274 0 274 0 274 0 0 274 Sub-Total Non-Revenue 0 0 0 0 0 0 0 0 TOTAL CHILLED WATER 274 0 274 0 274 0 0 274 COMMON Sub-Total Revenue 846 (14) 600 260 600 0 0 600 Sub-Total Non-Revenue 3,393 1,776 1,617 0 1,617 0 0 1,617 TOTAL COMMON 4,239 1,762 2,217 260 2,217 0 0 2,217 CAPITAL BUDGET SUMMARY Sub-Total Revenue 16,871 (14) 16,625 260 7,129 0 9,496 16,625 Sub-Total Non-Revenue 82,969 10,309 28,588 44,072 26,331 0 2,257 28,588 TOTAL BUDGET 99,840 10,295 45,213 44,332 33,460 0 11,753 45,213 NOTE: Budgeted Capital Expenditures = $45,213 less $11,753(CIA) _$33,460 less $0(Bond Funds) _$33,460 ^ CIA=Contribution in Aid Preliminary Minutes, Subject to Board Approval on 71261105 MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, May 24, 2005 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Gary L. Calkins, Tim Haggart, Ifield Joseph, Santiago Rios, Robin M. Smith, and Nancy Wonch Absent: Commissioner Ron Callen The Secretary declared a quorum present. Chairperson Smith called the meeting to order at 5:30 p.m. APPROVAL OF MINUTES Motion by Commissioner Calkins, seconded by Commissioner Haggart, to approve the minutes of the regular meeting held March 22, 2005. 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 persons spoke. COMMUNICATIONS Letter from Donald Hillman, 750 Berkshire Lane, East Lansing, regarding EMF (Electromagnetic Fields) in homes and current on ground wires entering homes. Referred to staff for follow up and response back to the Board. Page 55 Board Meeting May 24,2005 COMMITTEE REPORTS Resolution 2005-5-1 HUMAN RESOURCES COMMITTEE REPORT A meeting of the Human Resources Committee of the Board of Water and Light was held at the Executive Offices, Lansing, at 12:00 noon, Tuesday, April 12, 2005. Committee Chair Tim Haggart called the meeting to order and asked the secretary to call the roll. The following members of the Human Resources Committee were present: Commissioners Gary Calkins, Tim Haggart, Santiago Rios and Robin Smith. Absent was Commissioner Wonch. PUBLIC COMMENT There was no public comment. NON-BARGAINING SKILL FAMILY RANGE ADJUSTMENTS AND PERFORMANCE INCREASE MATRIX FOR FISCAL YEAR 2006 Wendy Bradley, Human Resource Consultant for Employee Relations presented the recommended Skill Family Range Adjustments and Performance Increase Matrix for FY 2006. She reported that the BWL annually reviews its skill family ranges for non-bargaining employees in an effort to keep salaries in line with comparable positions in a competitive marketplace. Rates of pay for benchmark jobs in each skill family were examined in order to offer competitive salary ranges for FY 2006. She noted that the skill family range plan was designed to offer employees salaries competitive with the market, with base pay capped at market-mid-point rates (and capped at 10% above the market mid-point for employees hired before July 1, 2000). Ms. Bradley discussed how the information from 27 different surveys was analyzed. She also discussed how range adjustments are determined for the eight BWL skill families. The Commissioners asked for clarification on the performance increase matrix and discussed in detail the level of"needs improvement." (Commissioner Smith entered the room at 12:25 p.m.) Following discussion, the Human Resources Committee voted as follows authorizing the General Manager to present a resolution at the next regular meeting on recommended non-bargaining skill family range adjustments and the performance increase matrix for FY 2006. Voting Aye: Calkins, Haggart, Rios, Smith. Voting Nay: None Absent: Wonch. INTERNAL AUDITOR'S SIX-MONTH PERFORMANCE INCREASE Motion was made by Commissioner Smith and seconded by Commissioners Rios that the Human Resources Committee convene in closed session to discuss the Internal Auditor's six-month performance as permitted under Section 8 of the Open Meetings Act (MCL 15.268 regarding closed sessions and permissible purposes). (12:35 p.m.). Board Meeting Page 56 May 24,2005 Approved by roll call vote as follows: Voting Aye: Calkins, Haggart, Rios, Smith Voting Nay: None Absent: Wonch. The Committee reconvened in open session at 1:25 p.m. Internal Auditor Glenn Holloway advised the Committee that he would like to conduct a needs assessment on the use of an intern accountant to assist him with internal audits and special projects. The intern would be helpful for detailed audit testing and documentation of various business processes. He suggested seeking the help of local colleges and/or universities to assist him in placing an intern accountant. The Committee agreed that this would be a worthwhile endeavor and told Mr. Holloway to proceed to evaluate this option. Resolution 2005-5-2 The Human Resources Committee reports that it has discussed the six-month performance appraisal for Internal Auditor Glenn Holloway. The Committee unanimously recommends the following: RESOLVED, That the Board approve a 5% performance increase effective April 1, 2005, in accordance with the employment agreement entered into between the Board and Mr. Holloway at the time of his employment. There being no further business, the Human Resources Committee adjourned at 1:35 p.m. Respectfully submitted, Tim Haggart, Chair Human Resources Committee Motion by Commissioner Joseph, seconded by Commissioner Calkins, to receive the report. Action: Carried unanimously. Motion by Commissioner Haggart, seconded by Commissioner Wonch, to approve the Committee's recommendation. (Resolution 2005-5-2) Action: Carried unanimously. Resolution:2005-5-3 COMMITTEE OF THE WHOLE REPORT The Committee of the Whole met on Tuesday, May 24, 2005 at 4:30 p.m. to discuss the proposed agreement with River Street Triangle, LLC. Page 57 Board Meeting May 24,2005 Chair Pro Tem Ifield Joseph called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Ron Callen (by speaker phone), Gary Calkins, Tim Haggart, Joseph Graves, Ifield Joseph, Santiago Rios, Robin Smith, and Nancy Wonch. PUBLIC COMMENT Patrick Reid, Attorney for River Street Triangle, LLC, spoke on the proposal discussed with the Commissioners at the May 3, 2005 Committee of the Whole meeting. At that meeting, staff was asked by the Committee to investigate with the appraiser if the estimated cost of $250,000 to relocate overhead facilities at the 312 N. Grand Avenue site was already deducted from the appraised price. Mr. Reid stated that the appraiser reported that $250,000 had not been deducted from the estimate for moving the overhead utilities. He noted that General Manager Novick has indicated there should be no reduction in the purchase price negotiated on May 3rd because this expense is reimbursable from Brownfield funds. Mr. Reid said that if the Board maintains this position, then the negotiated deal would come "off the table." He explained that the developer plans to use Brownfield funds to cover expenses such as baseline environmental assessments, cleanups, and other matters related to the property. He reiterated that the developer has not allocated Brownfield funds to relocate utilities. AGREEMENT WITH RIVER STREET TRIANGLE, LLC General Manager Novick called attention to a memo, dated May 23, 2005, that he and General Counsel Amy Cavanaugh sent to the Bo-ard regarding the proposed amended and restated agreement with River Street Triangle. The memo details events from 2001, when the Board entered into an agreement with River Street Triangle and follows activities to the present. He referred to a policy adopted by the Board in 2004 that addresses the sale or disposal of surplus property at the appraised value. He noted that the fundamental issue is determining the appraised value. Once that issue is clarified, the Board has the discretion to decide as to whether it wants to be consistent with the policy or make an exception. Commissioner Graves stated that he appreciated the time staff put into this issue and the comments and recommendations that were forwarded to the Commissioners. He said that from his perspective, the Board received what he considered to be a reasonable and fair offer from the developer at the last Committee of the Whole meeting on May 3, 2005. The only outstanding issue in his mind was the appraisal clarification since the appraiser acknowledged the question about the $250,000 to remove the utilities, which the developer agreed to split with the BWL. Commissioner Graves noted that in working with similar transactions, the question of how the buyer intends to use a grant or other financing option is the concern of the buy and not the seller. The buyer has the option to apply those funds in a variety of ways. He recommended that the Board stand by the proposed amended agreement and proceed to close on this deal. With respect to the policy on the disposal of surplus property, Commissioner Graves said he does not believe the Board would be making an exception to the policy in this instance by approving the amended agreement since the policy gives the Board some discretion when dealing with governmental entities. He said that in this case, it is a tri- Board Meeting Page 58 May 24,2005 party transaction that brings revenues back to downtown Lansing through contributions to the tax base and will help stimulate the after 5 p.m. downtown business traffic. Commissioner Rios agreed with Commissioner Graves. He reviewed the process of this financial transaction based on a contract. He discussed the issues resolved at the May 3rd Committee of the Whole meeting and pointed out that the sole unresolved matter was who would bear the cost of relocating the utilities. The purchaser presented his position from a contractual and business standpoint signifying that the burden of relocating the utilities should be borne by the seller. Subsequently, a compromise was reached on May 3rd between the seller and the purchaser to share the $250,000 cost of relocating the utilities, and a draft resolution to that effect was approved with a contingency placed on the resolution as to whether or not the appraiser had a different viewpoint as to how that cost should be allocated. Commissioner Rios pointed out that the appraiser's recent letter clearly states the purchaser should only be expected to pay 1%- 2% of the total purchase price for relocating utilities. He urged the Board to approve the transaction because the financial aspects of this deal are positive for the BWL, the City of Lansing and ratepayers. Commissioner Callen stated that his view is slightly different. He said that his concern was registered at the May 3rd Committee of the Whole meeting because staff was not comfortable with the information the developer presented to them on the same evening as the meeting. He noted that he voted for the compromise on the basis of the information presented at that meeting. He added that after reading Mr. Novick and Ms. Cavanaugh's May 23`d memo and learning that the appraiser has indicated that the cost of relocating the utilities can be recovered from elsewhere, the value of the property (Parcel A) should stand at the appraised value. He stated that it is not appropriate for the Board to advance those costs on a compromise; consequently, the appraised value should not be discounted. He agreed with earlier comments concerning the positive impact this development project would have for the City of Lansing because what is good for the City is good for the BWL. Chair Smith stated that the remaining issue at the last Committee of the Whole meeting was the appropriate price for the property in order to reach an agreement to move the deal forward. She stated that she is satisfied a fair market price has been reached and noted that it is not the Board's role to determine how Brownfield funds should be applied. The developer should have the discretion to use Brownfield funds in whatever way it will benefit the development project. She concurred with Commissioner Graves' comments regarding the Board's discretion to implement its policy on disposition of surplus property as it relates to the use by governmental entities. Chair Smith said that she plans to support the amended agreement because this project will benefit the City of Lansing as well as the BWL. Commissioner Wonch expressed concern with the proposed compromise of sharing the cost of move the overhead utilities. She stated that the Board will be voting to increase electric and water rates at the regular meeting this evening and approval of the compromise would send the wrong message to the ratepayers of this community. She noted that the developer has the option to recover $125,000 from Brownfield funds for relocating the overhead utilities. She said it is her opinion that the BWL's policy on Disposition of Surplus Real Property is not being followed. Page 59 Board Meeting May 24,2005 Commissioner Calkins asked if the developer has applied for Brownfield Project funds to reimburse for utility relocation. Mr. Novick stated that his understanding is application has not been made by the developer for this item, although the relocation of utilities is an eligible item for Brownfield credits. Following discussion, Commissioner Calkins took the position that he believes the appraised price should be paid by the buyer and the buyer should request the amount needed to move the overhead utilities from the Lansing Brownfield Redevelopment Authority. He stated that the BWL should derive as much money as possible from the property sale. Commissioner Joseph stated that he plans to support the amended agreement with River Street Triangle. He said that he is convinced the Board received sufficient information regarding this property transaction in order to make an informed decision. Also, the letter received from the appraiser answered the question that the buyer would not typically be required to spend more than 1%-2% of the total purchase price for relocating the utilities. Commissioner Haggart asked about the appraised value of the 75-foot of additional property. Mr. Novick stated that this strip was appraised at an average price of$202,500. Following discussion, it was agreed to combine the cost of Parcel A and the 75-foot strip into one purchase price. Moved by Commissioner Rios, seconded by Commissioner Graves to forward to the Board the Committee's recommendation on the approval of amending the Purchase Agreement between the Board of Water and Light and River Street Triangle, which is to include the following negotiated items: • Total Purchase Price of property located at 312 North Grand=$1,032,500.00 • The developer is to assume all costs to raze the building on the property • The developer is to move overhead and underground utilities • The developer is to pay a non-refundable $100,000.00 deposit within five days after the Board approves this transaction. The motion was adopted by the following vote: Aye: Haggart, Graves, Joseph, Rios, Smith Nay: Callen(by speakerphone), Calkins, Wonch Absent: None (See Board action on May 24, 2005,Resolution#2005-5-10) Page 60 Board Meeting May 24, 2005 There being no further business, Commissioner Rios moved, seconded by Commissioner Graves, on the adjournment of the meeting(5:28 p.m.). Respectfully submitted, Ifield P. Joseph, Chair Pro Tem. Committee of the Whole COMMITTEE OF THE WHOLE REPORT The Committee of the Whole met at the Executive Offices, Lansinal g, beginning at 5:30 p.m., Tuesday, May 3, 2005. Chair Pro Tern Ifield Joseph called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Ron Callen, Gary Calkins, Tim Haggart, Joseph Graves, Ifield Joseph, Santiago Rios, Robin Smith, and Nancy Wonch. Chair Pro Tem Ifield Joseph welcomed returning Commissioner Joseph Graves to the Board. Commissioner Graves stated that he had the opportunity to serve on this Board from 1996 to 1998 when he left to become Chief of Staff for the City of Lansing, and he looks forward to working with the Commissioners. PUBLIC COMMENT There were no public comments. AGREEMENT WITH RIVER STREET TRIANGLE, LLC General Manager Sanford Novick presented an update on the number of discussions held over the past several weeks between the BWL, City officials, and the developer (River Street Triangle, LLC) concerning the agreement on the sale of the BWL property located at Shiawassee Street and Grand Avenue. Present to address specific project issues currently under negotiations River were Glenn Kirk, Finance Director for the City of Lansing; Joel Ferguson, a principal Street Triangle, LLC; and Patrick Reid, attorney for River Street Triangle, LLC. Mr. Kirk stated that having affordable housing in a prime downtown location is key to the success of economic development in the City. The proposed residential housing project is important for the City to attract people downtown. Mr. Storage erguson Property,�which culminated intoe an overview of riverfront project known as the Triangle and BWL/Coal an agreement between the City of Lansing, the Board of Water and Light and River Street Triangle, LLC, which linked two parcels together,StreetFerguson noted that there has been the and Grand Avenue would be built first assumption that the Triangle Project at Kalamazoo However, the developer has decided to move up they Avenue with a June 2005 start date.ousing phase of the develpment cad on the BWL property at Shiawassee Street and Gran Reid referred to a revised "Amended and Restated Agreement t thell Between the e Property Locate adthe of Water and Light and River Street Triangle, LLC, Regarding Sale of Corner of Shiawassee Street and Grand Avenue. " to replace the first agreement dated May 2001. Mr. Reid noted that the developer has determined that the south half(known as Parcel B) of the property included in the original agreement is no longer needed; therefore, it is being deleted in Page 61 Board Meeting May 24,2005 the revised amended and restated agreement. This leaves the north half of the property, which was appraised at a market value of $955,000 for the housing development, subject to an adjustment to be presented later. Mr. Reid noted that the appraisal excluded a 75-foot strip of land on the north side of the property. Commissioner Rios entered the meeting at 5:45 p.m. Mr. Reid presented a handout that explained River Street Triangle's justification seeking to adjust the appraised value of Parcel A, located on the southeast corner of North Grand Avenue and East Shiawassee Street. The appraised market value of Parcel A minus the 75-foot strip was determined by the appraiser to be $1,095,000. However, to achieve this value, the existing building would have to be razed, estimated to cost $141,000. Mr. Reid pointed out that if a purchaser bought the property for $955,000 and paid $141,000 for razing the building, the purchaser would have a parcel of property worth $1,095,000. Mr. Reid her noted that the cost of razing the building should have included the cost for relocating the utilities at an additional cost of$250,000. He added that this amount would have to be subtracted from the value given by the appraiser of$955,000; consequently, the actual appraised value should be $705,000. Mr. Reid stated that this would mean that if a purchaser bought the property for $705,000 from the BWL and spent $141,000, and another $250,000 for utility relocation, then the purchaser would have a parcel of property valued at $1,095,000, as appraised. He determined the value of the property as follows: Payment to Board of Water and Light $ 705,000 Payment for razing the building $ 141,000 Payment for relocation of utilities 250 000 Value of property as a clean site $1,095,000 Mr. Reid stated that it was the purchaser's understanding the BWL would be responsible for removing and relocating any underground utilities on the site (Parcel A), except for the 75-foot utility easement granted to the City of Lansing on the north side of Parcel A. General Manager Novick and General Counsel Amy Cavanaugh stated that they had not seen Mr. Reid's handout concerning the "Adjustment to Appraised Value" until now at this meeting. Ms. Cavanaugh stated that her understanding from the original agreement was that the purchaser had assumed the cost of removing and relocating the above ground utilities. She asked Mr. Reid if he was proposing to change that condition in the agreement. Mr. Reid responded that it was his understanding the BWL, as the seller, would be responsible for the relocation of the utilities. Commissioner Wonch asked if it was correct to say that the purchaser would agree to pay the BWL $705,000 and $141,000 to raze the building. Mr. Reid agreed and commented the purchaser would accept having the BWL perform the utility removal and relocation work based on an agreed upon allowance. General Manager Novick stated that he understood the issue was about the payment to relocate underground utilities, and that the overhead utilities would be the purchaser's responsibility. Mr. Reid acknowledged that he had previously introduced that proposal, however, it was the Board Meeting Page 62 May 24, 2005 purchaser's assumption that the BWL was responsible for the above ground utilities. He stated that a provision to put the underground utilities back on the BWL's obligation was recently added the last time the BWL met with the developer and the City to discuss the proposed amended and restated agreement. Ms. Cavanaugh referred to Section 101.0 of the 2001 agreement, which states "...after demolition, the Purchaser shall be responsible, at no cost or expense to the Seller, for maintenance, restoration, relocation and installation of utilities, necessary to serve the building adjacent to the Phase I Site and commonly known as the Stackable building." Mr. Reid stated that their understanding was that if there was going to be a cost in razing the building, they would assume that cost. He noted that after reviewing a BWL memo delivered to him on April 29th outlining costs to remove and relocate the utility facilities necessary to serve the Stackable building, such as streetlights, traffic lights, and abandoning water and steam service lines, the costs went beyond what they anticipated. Mr. Reid further noted that it was assumed the relocation and reconnection of utilities would be less complex, hence, $250,000 of utility work is considered expensive. It was presumed that the appraisal assumed that the Board of Water and Light would relocate the utilities. Commissioner Calkins suggested reviewing this matter at a later date once staff has sufficient time to review the new proposal submitted by the developer. Commissioner Callen concurred and stated that he was not comfortable making a decision at this time because staff has raised concerns over their understanding of what the original arrangement was and what the current offer is. He indicated that he would like to hear from staff once they have an opportunity to clarify some of the issues raised. Commissioner Joseph expressed concern with the developer bringing information to the meeting and asking for a decision on the same day. Commissioner Smith stated that she was comfortable with the way the amended and restated agreement was written, however, her main concern was how to divide the cost to relocate the utilities and also restore the utilities necessary to serve the Stackable building. General Manager Novick stated that from his point of view, Parcel A needed to be sold at the appraised price and the issue of who pays for underground utilities was still up for negotiation. Since the original agreement was negotiated prior to his employment with the BWL, he does not know what the original intent was. Although not discussed, it was his understanding that the overhead utilities had been there and addressed all along. The language in the agreement seemed clear and based on standard utility practice. Mr. Novick pointed out that it was recently discovered the Parcel A description differs from the appraisal description by approximately 20,000 square feet (75-foot easement area); as a result, the developer was notified and it was agreed to let the appraiser conduct a separate valuation on that strip of land. The developer is willing to accept the appraised value based on an agreed upon formula. Following lengthy discussion, Mr. Reid stated that in the spirit of resolving the misunderstanding with the proposal, he would accept the counter offer suggested by Commissioner Joseph to split the cost for the relocation of utilities with a cap on that number. General Manager Novick recommended including a contingency for the appraiser to clarify whether the $955,000 appraised price included the assumption that the BWL would relocate the utilities to the Stackable Building. The Commissioners concurred with seeking clarification to determine if the intent was to layer in the cost to relocate the overhead utilities. Commissioner Rios stated that he believes it is in the BWL's best interest to move forward with this transaction particularly since a Page 63 Board Meeting May 24,2005 concession has been made by the Purchaser in the amount of $125,000 to divide the cost of relocating the utilities, which is a reasonable approach. He noted that the question of how the appraised value was determined could be argued for months or years. It was moved by Commissioner Rios, seconded by Commissioner Smith to forward a formal resolution to the Board on the approval of the amended and restated agreement with River Street Triangle, LLC to purchase the BWL property, known as Parcel A, located at Shiawassee Avenue and North Grand Avenue for a purchase price as follows: Payment to the Board of Water and Light $ 705,000 Pay 50% of BWL's cost in relocating utilities on the property up to $125,000 $ 125,000 Total Payment $830,000 The total payment of$830,000 is subject to clarification from the appraiser as to whether or not the appraisal assumed that the Board of Water and Light would pay to relocate overhead utilities. Aye: Callen, Calkins, Graves, Hag-art, Joseph, Rios, Smith, Wonch Nay: None Absent: None IMPRESSION 5 SCIENCE CENTER PROJECT Communications Director John Strickler introduced John LeFevre, President of the Impression 5 Science Center. Mr. LeFevre thanked the Board of Commissioners for their support of the Impression 5 Water Room, which has been a popular exhibit that serves over 75,000 people annually and continues to grow in popularity. He introduced Eric Larson, Executive Director of Impression 5. Mr. Larson reported that since the opening of the Water Room in 2001, the staff of Impression 5 has been consistently requesting feedback from teachers, parents and kids about the effectiveness of the exhibit. While the exhibit as a whole has been very successful, the staff has identified a number of factors that they believe will greatly improve the visitor's learning experience. In response to feedback received, Impression 5 proposes to create several new components to Phase #1, the existing space. A Phase #2 exhibit would contribute to children's understanding of hydrology, propulsion, buoyancy, construction of plumbing systems and other scientific principles associated with water. Cyrus Miller, Exhibits Officer of Impression 5 was introduced who then explained the planned changes to the Water Room using a hands-on exhibit for the Commissioners to view. Mr. Miller reported that Phase #2 would be an expansion of the existing space with the addition of more water-related components and an opportunity to explore more complex ideas such as underground utilities, groundwater and water transport. General Manager Novick stated that the Impression 5 Science Center is very impressive and that a BWL sponsorship of Phase #2 at a cost of $21,000 would be a very positive capital investment in education for this community. There was discussion on how the BWL would be recognized for the sponsorship. Mr. Larsen told the Commissioners that the BWL would be prominently recognized within the exhibit area and on their new sponsorship recognition board that is currently being designed. Recognition in Page 64 Board Meeting May 24,2005 all related marketing materials and advertisements would also be arranged. Following discussion,the Commissioners unanimously endorsed the sponsorship proposal. h to authorize the It was moved by Commissioner Smith, seconded to the Board on the corporatet csponsorship of the General Manager to bring forth a resolution t Impression 5 Phase 42 water exhibit. Aye: Callen, Calkins, Graves,Haggart, Joseph,Rios, Smith, Wonch Nay: None Absent: None FISCAL YEAR 2006 FINANCIAL PLAN AND PRELIMINARY BUDGET Senior Vice President of Finance and Administration Dennis McFarland reported that FY 2006 will be a challenging year for the BWL. He noted that since his last financial report to the Board in March 2005, significant cost increases have transpired due to inflation in the areas of labor and health care costs for both existing and retired employees. Further, the recently announced early shutdown of two General Motors (GM) Lansing Car Assembly plants in the City of Lansing will adversely affect the BWL's sales forecast at least until the two new plants in Delta Township come on line at the end of 2006. Mr. McFarland reviewed the FY 2006 financial goals. He stressed that the BWL's credit quality is an indication of our financial strength. The BWL is currently rated AA by all the major rating agencies; however, this rating was assigned in 2003 at which time our financial strength was better than it is today. He noted that liquidity does remain strong in the current financial plan; however, cash reserves accumulated over the years l be used to for FY 2006mitigate the level of rate $16 million of the cash increases that need to be requested. It is estimated that reserves will be used, which is consistent with the BWL's strategic plan. This takes advantage of the initially strong financial position that the BWL is in. Mr. McFarland stated that the BWL currently has a rate advantage in comparison to electric bills from Consumers Energy of nding before the Michigan Public approximately 14%. Consumers Energy has a rate increase pe Service Commissioner, significantly more than what the BWL is proposing. He also reported that BWL strives to use capital in the most efficient and appropriate manner to support the maintenance and expansion of facilities. The BWL has been burdened by costs associated with the CSO project and the accelerated lead replacement project. He also said that the BWL's goal is to maintain financially independent utilities; namely, electric, water, steam and chilled water. It is the intent that all four of those utilities should be independent on both an income basis and cash basis, and that, in part, is the reason for the differential rate increase being requested between electric and water. Mr. McFarland reported that the forecast for FY 2006 includes the proposed rate increases for water and electricity. He noted that net income figures would be dramatically lower without the increases. Also, the significant difference between the forecast reported at the March Committee of the Whole meeting was due to electric and rate increase proposals having been set in motion before the GM plant closings were announced. Page 65 Board Meeting May 24,2005 Mr. McFarland compared FY 2005 with the FY 2006 forecast: The effect of lower retail electric sales due to GM plant closings will be offset by higher wholesale sales. General Manager Novick emphasized that participating in the wholesale market can be a risky venture, thus the BWL intends to stay out of the wholesale market and not become dependent on it. Staff will continue to look for new revenue streams, but challenges are anticipated. Utility % FY'06 Forecast to FY'05 Forecast Electric—Retail -4.5% Electric Wholesale 46.8% Electric (mwh) 6 7% Water(ccf -3.5% Steam(mlb) -46.9% Chilled Water(tnhrs) 0.0% (Commissioner Callen left the Committee of the Whole meeting at 7:05 p.m.) Commissioner Graves raised a procedural concern with regard to the proposed rate increases that are part of the FY 2006 Budget presentation. He stated that to take informal action as a committee on the budget that includes the proposed rate increases prior to the public hearing would send the wrong message. He said that the public has a right to express their concerns and present their issues regarding the rate increases at the May 10`h public hearing. Commissioner Rios agreed and remarked that the proposed budget should be part of answering the question as to why the rate increases are needed. He stated that the public hearing would provide staff an opportunity to present the rationale for proposing the increases in electric and water rates. The public would then be given a chance to comment on the proposal at the hearing. Commissioner Calkins asked if an alternative budget has been prepared in the event the rate increases are not approved. Mr. McFarland responded that presentations previously made to the Board from December 2004 through March 2005 clearly demonstrated the consequences without rate increases. Commissioner Wonch noted that the results would be worse now because of recent GM plant closings. Mr. McFarland reminded the Commissioners that the Charter requires the Board to adopt its annual budget by June 1 and filed with the City Clerk within ten days after adoption. (Commissioner Rios left the Committee of the Whole meeting at 7:1 S p.m.) Following lengthy discussion, the consensus was to defer the FY 2006 Budget discussions until after the Public Hearing. The proposed budget will be presented at the next Board meeting after the recommended rate increases are considered. (Commissioner Haggart left the Committee of the Whole meeting at 7:28 p.m) Page 66 Board Meeting May 24,2005 RULES AND REGULATIONS FOR UTILITY SERVICES Senior Vice President of Operations Bill Cook introduced lDions for electric, water,Doug team and who presented the annual update to the Rules and Regu o f the recommended FY 2006 changes chilled water, including fees and charges. A summary was presented as follows: Electric, Water and Steam and Chilled Water Revision of Rule 7.4 "Account Security Deposits" to stree strengthen shed with the Boardtof deposit for service when there is lack of credithistory Water and Light. A "Connect Fee" was established for customers their service turned on after normal business hours and on weekends or holed y s. • Updated fees and charges. Several minor housekeeping issues to format and consistency of text. Electric A statement to require Board approved terminations he cComemerg customer and I cable o Board owned transformers was added to Rion al Services." Water • A definition was added to define "Meter Set." rify customer • Modification to "Customer Connection or manhole utilizing the Meterdefinition. to Board Facilities" to aSet responsibility at the outlet of Meter tile (11.3.B) Steam No significant changes. Chilled Water No significant changes. Smith to authorize the It was moved by Commissioner Calkins, seconded by Commissionern ending the Rules and General Manager to present a resolution at the next Board g Regulations for Electric, Water, Steam and Chilled Water Services, including fees and charges for Electric and Water Services,with an effective date of July 1, 2005. Page 67 Board Meeting May 24,2005 Aye: Calkins, Graves, Joseph, Smith, Wonch Nay: None Absent: Callen(left at 7:05 p.m.), Haggart (left at 7:28 p.m.), Rios (left at 7:15 p.m.) MARCH FINANCIAL REPORT (Commissioners Smith and Wonch left the Committee of the Whole meeting at 7.•38 p.m) Chair Pro Tern Joseph announced that due to loss of quorum, the Committee of the Whole meeting would continue, but only for informational purposes, and th consid at no further action would be ered. Senior Vice President of Finance and Administration Dennis McFarland presented a financial report for March. He reported that the budget is three quarters of the way through FY 2005, with the results reasonably well known, but typically some surprises at year-end surfaced that were not planned. He noted that operationally, it was a poor year. A total of$2.5 million was lost due to weather, O&M expenses were up $1 million because of higher maintenance costs at the Erickson Power Station; net income is over budget by$2 million for labor costs as a result of the contract settlement. Mr. McFarland noted that the saving grace for the year was the one-time cash infusion dollars due to excess interest earnings on the Belle River Project Account returned by the Michigan Public Power Agency(MPPA). OPERATIONAL PERFORMANCE REPORT General Manager Novick told the Commissioners that it is staff s intent to address the Board's expressed interest in receiving operational reporting in addition to financial reporting. Operations Director Bill Cook was asked to present a status report of the BWL operations for the nine-month period ended March 31, 2005. He presented a high level overview of BWL's Hometown Scorecard that measures in the area of financial performance, customer service, operational excellence and people excellence. He reported that through the first nine months of the 2005 fiscal year, the BWL was meeting or exceeding performance targets in seven areas, but was below target on nine measures. In general, performance continues to lag in the financial area, but excel in the customer service area. Performance in Operational and People Excellence is mixed. Mr. Cook reviewed the results on each of the 16 performance measures through March 31. He also reported on the status of significant events related to the Erickson Station conversion proj ect. ADDITIONAL INFORMATION CONCERNING RECOMMENDED SKILL FAMILY RANGE ADJUSTMENTS Human Resources Director Mary Dwyer reported that at the April 12, 2005 Human Resources Committee meeting, an item that should have been mentioned was inadvertently overlooked. She reported that four years ago when the Board adopted the Non-Bargaining unit compensation plan, 53 employees were above their skill family range maximum. The Board at that time adopted a resolution to allow those employees, if they qualified, to receive variable rate pay as part of their performance compensation. After four years, staff anticipated that all 53 employees would have either retired or the salary range would have caught up with their maximum. That is Page 68 Board Meeting May 24,2005 the case for all but four employees. Those four employees will not be eligible for any type of variable rate pay because their range maximum has not caught p On motion by Commissioner Calkins, seconded by Commissioner Graves, the Committee of the Whole meeting adjourned at 8:09 P.M. Respectfully submitted, Ifield P. Joseph, Chair Pro Tem Committee of the Whole Motion by Commissioner Joseph, seconded by Corrimiss presented.Calkins, to receive the Committee of the Whole reports of May 3 and May 24, 2005 as Action: Carried unanimously. MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Office of the Corporate Secretary. reprted on Comments Regarding Proposed Rate Increases• General Manager e of the Whole that the1BWL's electhctand March 10, 2005, staff recommended to the committee water rates be increased and that a public hearing be recommendation to consider oche full Board for on the recommendation. The Committee of the Whole sent this action at its March 22, 2005 meeting to file notice with the r t Clerk ncdustomer explaining the to set a public hearing on the rate increases. On March 16, 2005, staff sent a letter every proposed rate increases, the reasons they are needed, and the with the City Clerk, set a public March 24, 2005, the BWL filed the recommendedoposted rate public notice. In the April bills, the BYVL hearing for 5:30 p.m. on May 10, 2005, and p Connections newsletter highlighted the public hearing and also of the hearing with the L d a public not ANs G impact. On April 28, 2005, the BWL published 2005. At the public hearing, seven STATE JOURNAL and the public hearing was held on MMr 1Novviick noted that he Board meeting individuals spoke to the issue of the rate increaseof Mr. McFarland's presentation at the hearing packet includes a transcript of the hearing, a copy explaining why staff is making its recommendations, and sp oke.written A copy of the written response issues and questions raised by the seven individuals who was also mailed to each of the speakers. The written responseas Novi k stated thatbeen made a rt o rate the permanent record and is filed with the Corporate Secretary. increase recommendation is necessary for the long-term financial health of the BWL. Chair Robin Smith stated that over the last several months said it has een made clear by staff Commissioners have with the issue of expenses and revenues at the BWL. She s that the BWL faces a future of flat to declining sales witehrisin costs.. She indicated s sit the uation Boardthat has not expected to correct itself, at least over the short t directed staff to continue to look for areas where expenses oa ontinue.n be cut wShe notedithout thatgiven the or reliability to customers, and those efforts are expected magnitude of the situation, however, budget cuts alone will not be sufficient to match revenues Page 69 Board Meeting May 24,2005 with expenses. Staff has presented the Board with specific actions taken to notify customers of the proposal before the Board of Commissioners. Also, a public hearing was held in order to provide customers an opportunity to speak directly to the Commissioners on this matter and staff has provided responses to those customers who had questions at the public hearing. Resolution 2005-3-4 A. ELECTRIC AND WATER RATE INCREASES WHEREAS, the staff of the BWL, in the course of its financial planning process, has determined that the electric and water utilities will experience significant revenue shortfalls in Fiscal Year 2006 and beyond; and WHEREAS, such revenue shortfalls are caused primarily by the combination of very modest revenue growth over the last four years and rising costs due to higher labor and heath care costs as well as overall inflation; and WHEREAS, the last general rate increases in the electric and water utilities occurred in January 2003; and WHEREAS, the staff of the BWL has proposed a general rate increase of 3% for the electric utility effective July 1, 2005, an increase of 6.5% for the water utility effective July 1, 2005 and another increase of 6.5% for the water utility effective July 1, 2006; and WHEREAS, notice of the proposed increases were communicated to all customers by mail on March 16, 2005, public notice was made on April 28, 2005, and a public hearing was held on May 10, 2005 to receive comments on the proposed increases; and WHEREAS, the Board of Commissioners has considered the comments of the public as well as the recommendations made by BWL. RESOLVED, That the electric and water rate schedules listed below and detailed in the attached rate schedules be adopted and made effective for electric and water consumption on or after July 1, 2005. ELECTRIC: (Attachment A) Residential Service—Rate 1 General Service—Rate 3 Large General Service—Rate 4 Primary Service—Rate 5 Municipal Water Pumping Service—Rate 7 Large Capacity Service—Rate 8 Outdoor Lighting Service—Rate 9 Traffic Light Service—Rate 11 Space Conditioning and Electric Water Heating Service—Rate 12 Residential Senior Citizen -bate 21 Street Lighting Service—Rate 31 Street Lighting Service—Rate 32 Board Meeting Page 70 May 24, 2005 WATER: (Attachment B) Residential Water Service—Rate 1 General Water Service—Rate 2 Fire Service—Rate 4 Lawn Sprinkling Water Service—Rate 5 Fire Hydrant Charges—Rate 6 Motion by Commissioner Wonch, seconded by Commissioner Calkins, to approve the resolution. Discussion: Commissioner Wonch stated that she plans to vote for the increase, however, she is doing so reluctantly because of comments heard at the public hearing from senior citizens and others on fixed incomes regarding their difficulty in managing increasing costs. She noted that the BWL does offer a discounted electric rate for senior citizens and asked staff to investigate the implementation of a discounted water rate for seniors. She acknowledged the BWL's financial position and the necessity to raise electric and water rates. She also pointed out that BWL rates are still lower than private utilities Commissioner Graves stated that he was recently appointed to the Board after the Commissioners had spent months discussing and examining its financial outlook and the need to raise electric and water rates. He reported that upon joining the Board, he scheduled a number of meetings with staff and spoke with a couple of Commissioners to bring himself up to speed on the BWL's financial status and the rationale for the proposed increases. Commissioner Graves stated that he plans to support the proposal but would like to explore differential rates for the following customer classifications: (1) residential versus commercial and industrial customers; (2) senior citizens on fixed incomes and low-income customers living below the poverty level; and(3) customers outside of the City of Lansing. Commissioner Rios stated that he intends to support the resolution because of the level of confidence he has in the work that has been done by staff since he has been on the Board. He expressed appreciation for the overall professionalism in which the task of reviewing the necessity for a rate increase was conducted. He thanked the General Manager and his staff for using performance accountability standards and noted that measurement tools are important to improve efficiencies for the success of the BWL to continue to be a reliable resource in this community. Commissioner Rios also commended Internal Auditor Glenn Holloway's input in this process. He further stated that in times of financial crises, it is imperative to look at alternatives to continue to deal with change in such areas as union contract negotiations to evaluate the benefits provided by decisions made that directly impact rates. Commissioner Joseph stated that he is also prepared to support the rate increase. He echoed Commissioner Graves' opinion with respect to differential rates for owners and non-owners of this utility. He noted that staff is in the process of re-evaluating long-term utility contracts with surrounding townships. Commissioner Joseph emphasized the importance of reducing costs where possible in order to balance outside factors of which the BWL has no control, such as GM's decision to move up its schedule to close the Lansing Car Assembly. Plants. Action: Carried unanimously. Page 71 Board Meeting May 24,2005 Resolution 2005-3-5 B. AMEND RULES AND REGULATIONS FOR ELECTRIC, WATER, STEAM, AND CHILLED WATER UTILITY SERVICES RESOLVED, That amendments to the Rules and Regulations for Electric, Water, Steam and Chilled Water Utility Services be approved as presented, effective July 1, 2005. The Rules and Regulations are filed with the Corporate Secretary and are posted on the BWL Internet. Attachment C—Electric Attachment D—Water Attachment E —Steam Attachment F—Chilled Water Motion by Commissioner Wonch, seconded by Commissioner Calkins, to approve the resolution. Discussion: General Manager Novick noted that in accordance with Board Policies 19-05 (Electric) 19-13 (Water), 19-15 (Steam), and 19-16 (Chilled Water), the Utility Rules and Regulations are subject to review and modification by the Commissioners. The proposed changes are recommended to better enforce standards and update fees and charges. Action: Carried unanimously. Resolution 2005-5-6 C. CORPORATE SPONSORSHIP OF IMPRESSION S EXHIBIT RESOLVED, That the Board of Water and Light is authorized to sponsor the Impression 5 Science Center Water Room expansion project at a cost of$21,000. Motion by Commissioner Wonch, seconded by Commissioner Joseph, to approve the resolution. Discussion: General Manager Novick commented that staff presented this proposal to the Committee of the Whole on May 5, 2005 and it was unanimously supported. He stated that the expansion enhances an existing and popular Impression 5 exhibit that features scientific properties of water. The exhibit contributes to children's understanding of hydrology, propulsion, buoyancy, construction of plumbing systems and other scientific principles associated with water. More than 75,000 people per year visit the current exhibit. The Phase 1 expansion, which the proposed sponsorship will finance, is based on feedback from teachers, parents and children and will improve the visitors' learning experience. The sponsorship represents an investment in scientific education that will benefit children and the Greater Lansing community. A BWL sponsorship in 2001 helped finance the original construction of the Impression 5 Water Room exhibit. Action: Carried unanimously. Board Meeting Page 72 May 24,2005 Resolution 2005-5-7 D. SKILL FAMILY SALARY RANGE ADJUSTMENTS-NON-BARGAINING UNIT EMPLOYEES The Board of Commissioners is responsible for setting salary ranges for the Board of Water and Light Non-Bargaining Unit employees. The Human Resources Director, with the concurrence of the General Manager, has recommended to the Human Resources Committee that the Board of Commissioners approve an adjustment to the skill family salary ranges. The Board of Commissioners has been advised as to the necessity of such an adjustment and has had an opportunity to discuss its merits. RESOLVED, That the Board of Commissioners shall adopt the attached adjustment to the Non- Bargaining Unit skill family salary ranges. (See Attachment G) RESOLVED FURTHER, That the General Manager is authorized to develop all procedures necessary for its implementation. Motion by Commissioner Calkins, seconded by Commissioner Wonch, to approve the resolution. Discussion: This item was discussed with the Human Resources Committee on April 12, 2005. Action: Carried unanimously. Resolution 2005-5-8. E. PERFORMANCE INCREASE MATRIX-NON-BARGAINING UNIT EMPLOYEES The Board of Commissioners is responsible for determining the performance increase matrix for the Board of Water and Light's Non-Bargaining Unit employees. The Human Resources Director, with the concurrence of the General Manager, has recommended to the Human Resources Committee that the Board of Commissioners adopt a new performance increase matrix. The Board of Commissioners has been advised as to the necessity of such a revision, and has had an opportunity to discuss its merits. RESOLVED, That the Board of Commissioners shall adopt the attached revisions to the Non- Bargaining Unit performance increase matrix. (See Attachment G) RESOLVED FURTHER, That the General Manager is authorized to develop all procedures necessary for its implementation. Motion by Commissioner Joseph, seconded by Commissioner Wonch, to approve the resolution. Page 73 Board Meeting May 24,2005 Discussion: This item was discussed with the Human Resources Committee on April 12, 2005. Action: Carried unanimously. Fiscal Year 2006 Budget Presentation: General Manager Novick reported that the final item under the Manager's Recommendations is the budget for FY 2006, consisting of both operating and capital. He noted that staff has been discussing the BWL's financial situation with the Board for a number of months and more recently at the Committee of the Whole meeting on May 3, 2005. It was decided at that meeting to defer FY 2006 budget discussions until after the May 10, 2005 public hearing. Senior Vice President of Finance Dennis McFarland reviewed the FY 2006 Financial Plan. The Plan includes the rate increases approved by the Board earlier this evening. The rate relief was necessitated by what had been a flat revenue curve over the last few years, which has now become a declining revenue curve as a result of the shutdown of the two General Motors Car Assembly plants. Continued cost pressures are being experienced in labor, health care and other areas. Mr. McFarland updated the Commissioners on the five financial goals of the BWL: 1) Credit Quality, 2) Liquidity, 3) Rate Competitiveness, 4) Efficient and Appropriate Use of Capital, and 5) Financially Independent Utilities. He noted that the allocation of overhead costs to appropriately distribute costs to all the utilities has been revised. Staff will be reporting on each of the four utilities independently; namely, electric, water, steam, and chilled water. Mr. McFarland reported that the BWL currently has an AA rating, assigned in 2003. He noted that based on current projections, the BWL is in fact in a weaker position than it was in 2003. Despite the approved electric and water rate increases, the BWL's liquidity at the beginning of the year remained strong; however, the financial plan projects $16 million in cash reserves will be spent over the next 12 months. Mr. McFarland reported on the Sales Forecast: Utility Revised Original FY05 Forecast %'06 Forecast FY06 Forecast FY06 Forecast to 105 Forecast Electric-Retail 2,345,000 2,532,000 2,455,000 -4.5% Electric-Wholesale 1,000,000 604,000 681,000 46.8% Electric(mwh) 3,345,000 3,136,000 3,136,000 6.7% Water(cco 10,747,000 11,187,741 11,139,870 -3.5% Steam(mlb) 1,092,597 2,057,000 2,056,000 -46.9% Chilled Water(tnhrs) 11,931,000 11,931,000 11,931,000 0.0% Electric: • RCI(excl. GM) on historical growth rates normalized for weather • Trended growth rates: Residential=1.5%, Commercial=2.05%, Industrial=0.60% • Revised Forecast includes net GM reduction of 235,000 mwh due to plants 1 & 6 closing • Wholesale based on remaining generation & purchased power availability anticipated to increase in FY'06 Water: Board Meeting Page 74 May 24, 2005 • RCI based on historical growth rates: Residential=0.98%, Commercial=0.19%, Industrial=0.0% • Revised Forecast includes net GM reduction of 325,000 ccf due to plant 1 & 6 closing • Wholesale based on historical commodities, revised to include lower anticipated sales to East Lansing-Meridian Water Authority Steam: • Significant reduction due to GM plants 1 & 6 closing, total GM reduction is 906,600 mlb Chilled Water: • Based on Minimum bill levels Mr. McFarland highlighted the Revenue Assumptions: • Rate increases effective July 1, 2005 (Electric 3% and Water 6.5%) • Steam includes current contract terms for General Motors • Chilled Water based on minimum bill levels • Stable electric wholesale prices • Year two of City of Lansing Rider includes revenue reduction of$750,000 Mr. McFarland summarized the Operating Expenses: • Decrease of 4 full time employees through the result of operating efficiencies • Salary Increases: -Bargaining Unit=3.1% increase effective 1111105 pursuant to the contract -Non-Bargaining= 3.1% increase effective 7/1/05 included in the overall labor budget • A 6% increase in health care costs is being recognized • Includes additional $3.7 million for Retiree Health Care and $180 million of unfunded liability needs to be recognized as expense on the Income Statement and reflected as a net income loss (GASB 45) Mr. McFarland noted that over the past few years, the VEBA (Volunta?y Employee Benefit Account) was established to hold unfunded health care dollars, and in the last few years $2 million per year has been set aside. That will continue plus the $3.7 million for retiree health care; consequently, a total of $5.7 million of operating revenues is being reserved to take care of the unfunded liability. Also, when possible, funds from the Defined Benefit Pension Plan are being transferred to farther retiree health care. Mr. McFarland presented an overview of Capital Expenditures: • Revenue producing capital additions justified by cost/benefit analysis=$7.1 million. • Remaining capital less than annual depreciation expense =$26.5 million • Includes 10 year Lead Service Replacement Program: FY'06 = $3.5 million, $1 million higher than FY'05 • Includes work associated with the City's CSO and street reconstruction project: FY'06 = $5.8 million, $1 million higher than FY'05 Mr. McFarland reviewed the Income Statement comparing FY 2004, FY 2005 and FY 2006. He explained the business reasons for the change from the FY 2005 Budgeted Net Income of$2.4 million to a loss of$2 million in the FY 2006 Budgeted Net Income. Page 75 Board Meeting May 24,2005 Reconciliation of Budgeted Net Income: ($Millions) 2005 Budgeted Net Income $2.4 Rate Increase (Elec &Wtr) $5.7 Higher Wholesale Revenue $3.1 Interest Income $1.6 Net GM Reduction $(6.5) Labor Costs $(1.3) Benefits $(1.8) Higher Materials and Other Costs $(1.4) GASB 45 Transfer $(3.7) Depreciation $(0.4) All Other $0.3 Total of these items $(4.4) 2006 Budgeted Net Income $(2.0) Senior Vice President of Operations Bill Cook presented the proposed Capital Budget for Fiscal Year 2006 and reported on the following assumptions: • Revenue producing capital additions are to be justified by a cost benefit analysis • Remaining capital targeted at less than annual depreciation expense • Lead service replacement program budgeted at $3,500,000 per year for the period. (FY 2006 incremental impact from FY 2005: $1,000,000) • CSO and street reconstruction related expenses budgeted to coincide with the most recent City of Lansing schedule. The City as part of this effort is moving into older parts of the BWL system and impacting more streets. This has resulted in an increase of$1,400,000 in FY 2006. • Steam production forecast expenses reflect initial response to GM plant closings. The Integrated Resource Plan will modify these values in next year's forecast. Mr. Cook also compared Capital Budget projections for FY 2005 vs. FY 2006 and reviewed the six-year forecast covering FY 2006—2011. Following discussion, the following resolution was presented: Resolution 2005-5-9 F. FY 2006 OPERATING AND CAPITAL BUDGETS RESOLVED, That the annual Operating and Maintenance Budget covering Fiscal Year 2006 is hereby approved as presented. RESOLVED, That the Capital Budget for Fiscal Year 2006 is hereby approved as presented. Board Meeting Page 76 May 24,2005 RESOLVED, That the Forecast for Capital Expenditures for Fiscal Years 2006-2011 is hereby accepted as presented. RESOLVED FURTHER, That the Corporate Secretary is directed to make the appropriate filings with the City of Lansing City Clerk's Office and the Mayor's Office in accordance with the Lansing City Charter regarding the above actions. Motion by Commissioner Joseph, seconded by Commissioner Wonch, to approve the resolution. Discussion. See Attachment H for a summary of the Fiscal Year 2006 Operating and Maintenance Budget of$193.2 and Capital Program of$33.5 million for the same period. Such authorizations will enable the BWL to both maintain ongoing service to its customers and maintain and enhance its facilities for continued future use. Capital expenditures for the Fiscal Years 2006-2011 are estimated to be $201 million. Action: Carried unanimously. UNFINISHED BUSINESS No unfinished business. NEW BUSINESS No new business. RESOLUTIONS BY THE COMMITTEE OF THE WHOLE .. _. .. . .. ... .. . ... .. ... . ....... Resolution 2005-5-10 RESOLUTION TO AMEND PURCHASE AGREEMENT REGARDING FORMER COAL STORAGE PROPERTY AT 312 NORTH GRAND ("TRIANGLE PROPERTY") WHEREAS, the Board of Water and Light ("BWL") and River Street Triangle, LLC ("Developer") are parties to an agreement dated May 17, 2001 ("Agreement") whereby Developer agreed to purchase certain BWL property located at the corner of Shiawassee and North Grand Avenue in Lansing ("Property") for $1,997,070.00; and WHEREAS, the parties would like to amend the Agreement to permit the Developer to purchase a smaller parcel of property, known in the Agreement as Parcel A, depicted in Exhibit 1, and defined as: A part of the parcel surveyed and described in L. 5, PP. 608-610 of Ingham County Certified Survey Maps, said part of said surveyed parcel being particularly described as follows: Beginning at the southeast corner of the intersection of N. Grand Avenue and E. Shiawassee Street, said Point of Beginning now marked by a chiseled "x" in the concrete sidewalk; thence along the south line of E. Shiawassee Street (82.5 ft. wide) S 89°58'00" E 221.35 ft.; Page 77 Board Meeting May 24,2005 thence along a line that is 25 ft., more or less, westerly of and parallel to the concrete retaining wall on the west side of the Grand River the following four (4) courses: S 45°00'36" E 56.87 ft.; S 07°00'36" E 173.29 ft.; S 17°19'58" E 75.72 ft.; S 01°08'14" E 11.78 ft.; thence along the centerline of a common party wall and it's extension N 89°58'00" W 305.60 ft. to a point on the east line of N. Grand Avenue (82.5 ft. wide); thence along the east line of N. Grand Avenue N 00°01'02" E 296.21 ft. to the Point of Beginning (a chiseled "x" in the concrete sidewalk), being on part of Block 66 of the Original Plat of Lansing, L. 2, PP. 36- 38 of Ingham County Deeds, and containing 81,363 sq. ft. or 1.8678 acres of land, more or less, and subject to easements and restrictions. WHEREAS, a portion of Parcel A, excluding a 75-foot strip immediately south of Shiawassee Street, was appraised in 2001. In 2005, the remaining 75-foot strip was also appraised, including the reservation of an easement on a minimum 45-foot strip for the City of Lansing's existing box culvert sewer. IT IS THEREFORE RESOLVED, That the Board authorizes the General Manager or his designee to negotiate and sign an Amended Purchase Agreement with the Developer for the sale of Parcel A at the price of $1,032,500.00. The Developer shall assume all costs to raze the building on the property and to move overhead and underground utilities. The Board also authorizes modifications to the remainder of the Agreement to make it consistent with this resolution. RESOLVED FURTHER, That a non-refundable $100,000.00 deposit shall be paid by the Developer to the BWL within five (5) days after passage of this resolution to effectuate this transaction. BE IT FINALLY RESOLVED, That the proceeds from the sale of the property shall remain with the funds and accounts of the Board of Water and Light. This sale is subject and contingent upon the approval of the Lansing City Council. Motion by Commissioner Joseph, seconded by Commissioner Graves, to approve the resolution. Action: Adopted by the following vote: Aye Commissioners Graves, Haggart, Joseph, Rios, and Smith Nay: Commissioners Calkins and Wonch Abstain: None Absent: Commissioner Callen GENERAL MANAGER'S REMARKS Operational Performance Report. General Manager Novick commented that at the Committee of the Whole meeting held May 3, 2005, several Commissioners left the meeting early and missed the operational performance presentation. He asked Senior Vice President of Operations Bill Cook to present the highlights of his report for the benefit of those who did not hear it. Mr. Board Meeting Page 78 May 24, 2005 Cook gave a high level overview of the BWL's Hometown Scorecard that measures in the area of financial performance, customer service, operational excellence and people excellence. He also reviewed the results of each of the 16 performance measures and reported on the status of significant events related to the Erickson Station conversion project. COMMISSIONERS' COMMENTS Commissioner Wonch commended staff for the readable and understandable financial and operational reports. She also thanked the employees for their excellent job in addressing the lead situation and for working through the CSO problems. She noted that these efforts clearly demonstrate the commitment and loyalty the employees have to the BWL and this community. Commissioner Rios congratulated staff on a successful Twenty-Five Year Award Dinner. He said it was heartwarming to hear the antidotes and stores told about the inductees. He noted that it was particularly inspiring to see the 80 and 90 years olds attend the dinner and wanting to be part of the group. This is a positive reflection on the good work that is being done at the BWL. Commissioner Joseph echoed the positive remarks made earlier about the employees. He remarked that while attending the BWL's Twenty-Five Year Award Dinner, he observed the number of employees who are nearing retirement. He emphasized the importance of succession planning and preparing employees for the anticipated openings that will result from these retirements. Commissioner Haggart welcomed Commissioner Graves on his return to the Board. Chair Smith also remarked about the Twenty-Five Year Dinner and the pride she observed that BWL employees have in their jobs and the Board of Water and Light. She congratulated Corporate Secretary Mary Sova on her induction to the Twenty-Five Year Club. Commissioner Smith announced the following committee appointments to fill vacancies for the remainder of this fiscal year ending June 30th: Commissioners Gary Calkins and Santiago Rios to the Nominating Committee and Commissioner Joseph Graves, Jr. to the Finance Committee. ABSENCES On motion by Commissioner Haggart and seconded by Commissioner Wonch, that the absence of Commissioner Callen be excused. Carried unanimously. Page 79 Board Meeting May 24,2005 PUBLIC COMMENTS Joseph Davis, Business Manager for MEW Local 352, reported that he recently returned from a utilities conference and had an opportunity to visit the old converted power plant at the Baltimore Harbor. He noted that the Baltimore redevelopment plan is perfect for the Ottawa Station. Mr. Davis also spoke on the BWL's transition over the years with various organizational programs to improve operational effectiveness, quality, customer focus, customer satisfaction and alignment of organizational goals to achieve the best in class. He noted that most BWL employees choose service over self-interest which is important for the future direction of the organization. He expressed concern with the aging workforce noting that the average age of utility workers in this country is 49 years and the average retirement age is 55. He said this reinforces the importance of training and succession planning. He also encouraged management's continued dialogue with all employees on issues affecting the BWL and its impact on employees. More discussion is needed on what actions should be taken and how each employee can make a difference to meet the challenges facing the BWL and the utility industry. ADJOURNMENT On motion by Commissioner Joseph, seconded by Commissioner Rios, the meeting adjourned at 7:47 p.m. /s/Mary E. Sova, Secretary Filed with Lansing City Clerk June 3, 2006 ATTACHMENT A Electric Rate Schedules CONTENTS Residential Electric Service,Rate No. 1........................................................................................................................I General Electric Service,Rate No.3.............................................................................................................................2 Large General Electric Service,Rate No.4...................................................................................................................3 Primary Electric Service,Rate No.5.............................................................................................................................4 Municipal Water Pumping Electric Service,Rate No.7...............................................................................................6 Large Capacity Electric Service,Rate No. 8.................................................................................................................7 OutdoorLighting Service,Rate No. 9...........................................................................................................................9 TrafficLight Service,Rate No. 11..............................................................................................................................11 Space Conditioning and Electric Water Heating Service,Rate No. 12.......................................................................12 Residential Electric Service,Senior Citizen,Rate No.21...........................................................................................13 Street Lighting Service,Board Owned Systems,Rate No.31 ....................................................................................14 Street Lighting Service,Customer Owned Systems,Rate No.32...............................................................................16 EconomicDevelopment Rider....................................................................................................................................18 EnergyCost Adjustment.............................................................................................................................................19 Scheduled Curtailment/Interruptible Service Rider.....................................................................................................20 RenewableEnergy Rider.............................................................................................................................................21 InfrastructureRecovery Rider.....................................................................................................................................22 StreetLight Rider........................................................................................................................................................23 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A RESIDENTIAL ELECTRIC SERVICE RATE NO. 1 Availabilitv-This rate is available to any single-family or multifamily dwelling of 4 units or less when the entire electric requirements are supplied at one point of delivery through one meter. Service to appurtenant buildings may be taken through the same meter. Service under this rate is not available to any single-family or multifamily dwelling unit of 4 units or less when a portion of the dwelling unit is used for commercial,industrial,or resale purposes unless the wiring is so arranged that service for residential and non-residential purposes are metered separately. Nature of Service-The service is alternating current,60 hertz,single phase, 120/240 nominal volts. Monthly Rate - Shall be computed in accordance with the following charges: 7/1/05 Basic Service Charge $4.38 Per customer per month Commodity Charge Summer Billing Months of June through October $.0649 Per kWh for the first 500 kWh $.0693 Per kWh for all over 500 kWh Winter Billing Months of November through May $.0649 Per kWh for the first 500 kWh $.0676 Per kWh for all over 500 kWh Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board of Water and Light(BWL)property,or its operation,or the production and/or sale of electric energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Auxiliary Power Provision-Domestic customers desiring electric service as an auxiliary source of power to wind or solar powered generating equipment may take service under this rate schedule under special agreement with the BWL. The customer shall pay the charges set forth above. A customer taking auxiliary power under this rate shall pay all reasonable costs associated with any alteration of BWL equipment required for proper operation of the customer's generating equipment in parallel with the BWL system. A customer may elect to sell energy to the BWL at the rate of $.022/kWh delivered. Customers selling energy to the BWL shall pay a charge of$6.40 per month or part thereof instead of the above Basic Service Charge. Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 1 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A GENERAL ELECTRIC SERVICE RATE NO.3 Availability-This rate is available to any customer desiring secondary voltage service for any purpose when supplied at one point of delivery through one meter. The limitation to secondary-voltage service may be waived in instances where the character of the electric load at the premises served has changed substantially. This rate is not available for emergency or standby service. Nature of Service-The service is alternating current,60 hertz,single phase or three phase. The secondary voltage is determined by the Board of Water and Light(BWL). Monthly Rate-Shall be computed in accordance with the following charges. 7/01/05 Basic Service Charge $15.45 per customer per month Commodity Charge Summer Billing Months of June through October $.0762 per kWh Winter Billing Months of November through May $.0733 per kWh Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Energy Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Metering-Where the BWL elects to measure the service on the primary side of the transformers,the metered kWh thus measured will be reduced by 3%for billing purposes to adjust for transformer losses. Where the customer receives service through more than one meter,the consumption as registered by the different meters will not be combined for billing purposes,but will be computed and billed separately. Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Auxiliary Power Provision-Customers desiring electric service as an auxiliary source of power to wind or solar powered generating equipment may take service under this rate schedule under special agreement with the BWL. The customer shall pay the charges set forth above. A customer taking auxiliary power under this rate shall pay all reasonable costs associated with any alteration of BWL equipment required for proper operation of the customer's generating equipment in parallel with the BWL system. A customer may elect to sell energy to the BWL at the rate of$.022/kWh delivered. Customers selling energy to the BWL shall pay a charge of$25.00 per month or part thereof instead of the above Basic Service Charge. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 2 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A LARGE GENERAL ELECTRIC SERVICE RATE NO.4 Availability-This rate is available to any customer desiring secondary voltage for any purpose when the electrical requirements are supplied at one point of delivery through one metering installation and the billing demand is 15 kW or more. The limitation to secondary-voltage service may be waived in instances where the character of the electric load at the premises served has changed substantially. This rate is not available for standby or emergency services. Nature of Service-The service is alternating current,60 hertz,single phase or three phase. The secondary voltage is determined by the Board of Water and Light(BWL). Monthlv Rate-Shall be computed in accordance with the following charges. 7/1/05 Basic Service Charge $32.96 per customer per month Capacity Charge $9.01 Per kW for all kW of Maximum Demand Commodity Charge Summer Billing Months of June through October $.0406 Per kWh Winter Billing Months of November through May $.0371 Per kWh Reactive Power Charge $0.0082 per kvarh in excess of 50%of total kWh. The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh)metering installed in accordance with BWL Rules and Regulations regarding power factor. Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Energv Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Billing Demand-The billing demand shall be the kW supplied during the 15-minute period of maximum use during the month. Metering-Where the BWL elects to measure the service on the primary side of the transformer,the metered kW and kWh quantities thus measured will be reduced by 3%for billing purposes to adjust for transformer losses. Where the customer receives service through more than one metering installation,the consumption as registered by the different metering installations will not be combined for billing purposes,but will be computed and billed separately. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. _Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 3 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A PRIMARY ELECTRIC SERVICE RATE NO.5 Availability-This rate is available to any customer desiring primary voltage service when the electrical requirements are supplied at one point of delivery through one metering installation(except as provided below for Multiple Delivery Point Aggregation)and the billing demand is 100 kW or more. This rate is not available for standby or emergency service. Nature of Service-The service is alternating current,60 hertz,three phase. The primary voltage is determined by the Board of Water and Light(BWL). Monthly Rate-Shall be computed in accordance with the following charges: 7/1/05 Basic Service Charge $82.40 per customer per month Capacity Charge $7.31 Per kW for all kW of On-Peak Billing Demand,plus $2.42 Per kW for all kW of Maximum Demand Commodity Charge Summer Billing Months of June through October $0.0357 Per kWh for all kWh during the On-Peak Period,plus $0.0322 Per kWh for all kWh during the Off-Peak Period,plus Winter Billing Months of November through May $0.0340 Per kWh for all kWh during the On-Peak Period,plus $0.0322 Per kWh for all kWh during the Off-Peak Period Reactive Power Charge $0.0082 per kvarh in excess of 50%of total kWh The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh)metering installed in accordance with B WL Rules and Regulations regarding power factor. Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Enerey Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property, or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Billine Demand On-Peak Billing Demand: The On-Peak Billing Demand shall be the kW supplied during the 15-minute period of maximum use during the On-Peak Period during the month. Maximum Demand: The Maximum Demand shall be the kW supplied during the 15-minute period of maximum use during the month whether on-peak or off-peak. Schedule of on-peak and off-peak periods-The On-Peak Period shall be from 10:00 a.m.until 6:00 p.m.,Monday through Friday. All other hours shall comprise the Off-Peak Period. Adopted:May 24,2005 Effective:July 1,2005 4 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A PRIMARY ELECTRIC SERVICE RATE NO.5 Multiple Delivery Point Aeereeation-The 15-minute period demands of multiple delivery points of a customer may be summed for determination of the total On-Peak Billing Demand under the following conditions: (a)the Maximum Demand at each delivery point must equal or exceed 100 kW;(b)the total On-Peak Billing Demand shall not be less than 4,000 kW;and(c)the customer shall agree to a service contract with the BWL for the customer's full electrical service requirements at the aggregated delivery points for a period of not less than five(5)years. Aggregation shall be applicable for determination of the On-Peak Billing Demand only. All other charges,including the Basic Service Charge and Maximum Demand,shall apply to each delivery point independently. Metering-When the BWL elects to measure the service on the secondary side of the transformers,the metered kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer losses. Where the customer receives service through more than one meter installation,consumption as registered by the different meter installations will not be combined for billing purposes,but will be billed and computed separately except as provided for in Multiple Delivery Point Aggregation. Equipment Supplied by Customer-The customer shall be responsible for furnishing,installing and maintaining all necessary transforming,controlling and protective equipment required for service beyond the BWL primary-voltage delivery point. At the sole option of the BWL,a customer may lease such transformers or other equipment from the BWL under terms established by the BWL. Delaved Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 5 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A MUNICIPAL WATER PUMPING ELECTRIC SERVICE RATE NO.7 Availability-This rate is available to any political subdivision or agency of the State of Michigan desiring service for potable water pumping and associated potable water production equipment when the entire electrical requirements are supplied at one point of delivery through one meter. This rate is not available for emergency,standby,or auxiliary service. Nature of Service-The service is alternating current,60 hertz,three phase. The secondary or primary voltage is determined by the BWL. Monthlv Rate-Shall be computed in accordance with the following charges. 7/1/05 Basic Service Charge $10.30 Per customer per month Commodity Charge $.0577 Per kWh Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Enerev Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. MeterinE-Where the BWL elects to measure the service on the primary side of the transformers serving the customer,the metered kWh thus measured will be reduced 3%for billing purposes to adjust for transformer losses. Delaved Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 6 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A LARGE CAPACITY ELECTRIC SERVICE RATE NO.8 Availability-This rate is available to any customer desiring primary voltage service when:(a)the electrical requirements are supplied at one or more points of delivery as provided below for Multiple Delivery Point Aggregation;(b)where the total On-Peak Billing Demand is 25,000 kW or more;and(c)the customer agrees to a service contract with the BWL for the customer's full electrical service requirements at the applicable delivery points for a period of not less than ten(10) years. This rate is not available for standby or emergency service. Nature of Service-The service is alternating current,60 hertz,three phase. The primary voltage is determined by the Board of Water and Light(BWL). Monthly Rate-Shall be computed in accordance with the following charges: 7/1/05 Basic Service Charge $257.50 per delivery point per month Capacity Charge $8.24 per kW for all kW of On-Peak Billing Demand,plus $1.55 per kW for all kW of Maximum Demand Commodity Charge Summer Billing Months of June through October $0.0309 per kWh for all kWh during the On-Peak Period,plus $0.0268 per kWh for all kWh during the Off-Peak Period,plus Winter Billing Months of November through May $0.0297 per kWh for all kWh during the On-Peak Period,plus $0.0268 per kWh for all kWh during the Off-Peak Period Reactive Power Charge $0.0082 Per k varh in excess of 50%of total kWh Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Energv Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Billing Demand On-Peak Billing Demand: The On-Peak Billing Demand shall be the total kW supplied to all applicable delivery points during the 15-minute period of maximum use during the On-Peak Period during the month. (See Multiple Delivery Point Aggregation.) Maximum Demand: The Maximum Demand for each delivery point shall be the kW supplied during the 15- minute period of maximum use during the month whether on-peak or off'-peak. Adopted:May 24,2005 Effective:July 1,2005 7 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A LARGE CAPACITY ELECTRIC SERVICE RATE NO.8 Schedule of on-peak and off-peak periods-The On-Peak Period shall be from 10:00 a.m.until 6:00 p.m.,Monday through Friday. All other hours shall comprise the Off-Peak Period. Multiple Delivery Point Aggregation-The 15-minute period demands of multiple delivery points of a customer shall be summed for determination of the total On-Peak Billing Demand under the following conditions: (a)the Maximum Demand determined at each delivery point must equal or exceed 1,000 kW;and(b)the total On-Peak Billing Demand shall not be less than 25,000 kW. Aggregation shall be applicable for determination of the On-Peak Billing Demand only. All other charges,including the Basic Service Charge and Maximum Demand,shall apply to each delivery point independently. Metering-When the BWL elects to measure the service on the secondary side of the transformers,the metered kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer losses. Where the customer receives service through more than one meter installation,consumption as registered by the different meter installations will not be combined for billing purposes,but will be billed and computed separately except as provided for Multiple Delivery Point Aggregation. Equipment Supplied by Customer-The customer shall be responsible for furnishing,installing and maintaining all necessary transforming,controlling and protective equipment required for service beyond the BWL primary-voltage delivery point. At the sole option of the BWL,a customer may lease such transformers or other equipment from the BWL under terms established by the BWL. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 8 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A OUTDOOR LIGHTING SERVICE RATE NO.9 Availability-This rate is available to any customer located within the Board of Water and Light(BWL)service area for dusk to dawn lighting of customer's premises. The BWL furnishes and maintains all lights. The installation will overhang private property from existing or new poles set at points accessible to BWL construction and maintenance equipment. This rate is not available for purposes of street,highway,or public thoroughfare lighting. Monthly Rate-Shall be computed in accordance with the following charges. Luminaires on Overhead Mast Arm on existing BWL poles High Pressure Sodium 7/1/05 100 W $9.31 250 W $15.70 400 W $16.79 Mercury Vapor' 175 W $9.76 400 W $16.79 Floodlighting Luminaires on Bracket Arm on existing BWL poles High Pressure Sodium 100 W $13.30 250 W $16.67 400 W $19.52 Metal Halide 400 W $24.26 1000 W $41.95 1500 W $58.23 In the event additional facilities or rearrangement of existing facilities is required,the BWL shall install,operate and maintain such facilities for the following monthly charges. Type of Facilities 7/1/05 35-foot wood poles including span of overhead $11.97 Per pole secondary extension 37-foot concrete pole including span of overhead $17.52 Per pole secondary extension Other facilities,hand set poles,or rearrangement of existing facilities 1.67% of estimated cost Adopted:May 24,2005 Effective: July 1,2005 Rates apply to existing luminaires only and are not open to new business. 9 Board of Water and Light,Lansing,Michigan—Electric Utility Rates OUTDOOR LIGHTING SERVICE ATTACHMENT A RATE NO.9 Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property, or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill that is not paid on or before the due date. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Service Contract-A written service agreement shall be entered into to take BWL service for a term of years determined as follows: (a) One year, if additional facilities are not required, or (b) Three years, if additional facilities are required (c) Five years,for metal halide lamps or if monthly charges calculated at 1.67%of estimated cost, (d) Ten years,if special contractual arrangements are made. In the event the customer discontinues service before the end of the agreement tern,the established rate for the remaining portion of the agreement shall immediately become due and payable. The BWL will replace lamps or make repairs when practicable after the customer has reported that the installation requires servicing. Such replacements and repairs will be made during regular working hours. The BWL may refuse or restrict the service provided in this rate to seasonal type customers and/or may require such customers to pay for the service annually in advance where the permanency of the customer is doubtful or has not been demonstrated by the customer. If relocation,including adjustment,of the outdoor protective light or relocation of other facilities used in connection with the light is desired by the customer during the term of the contract,the BWL will provide this service, if feasible,at the customer's expense. Adopted:May 24,2005 Effective:July 1,2005 10 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A TRAFFIC LIGHT SERVICE RATE NO.11 Availability-This rate is available to any political subdivision or agency of the State of Michigan desiring unmetered secondary service for operating traffic lights installed on streets or highways for traffic control and guidance. Nature of Service-The service is alternating current,60 hertz,single phase, 120/240 nominal volts Monthly Rate-Shall be computed in accordance with the following charges. 7/1/05 Basic Service Charge $2.06 Per customer per month Commodity Charge $.0319 Per watt of active load per month The actual labor,material,miscellaneous and indirect charges experienced maintaining and relamping traffic signals during the preceding month. Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property, or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Determination of Active Load-The active load of flasher lamps or cyclically operated traffic control lamps shall be 50% of total wattage of all lamps used during one complete cycle of operation. The active load of continuous,non-intermittent steady burning lamps shall be 100%of the total wattage of all lamps used. Delayed Pavment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 11 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A SPACE CONDITIONING AND ELECTRIC WATER HEATING SERVICE RATE NO.12 Availabilitv-This rate is available to any customer desiring service for commercial/industrial space conditioning and/or electric water heating furnished through a separate meter to which no other electrical device except electric space heating, electric air conditioning,humidity control equipment or electric water heating equipment may be connected. Electric space heating will be considered to include heating by light system provided the primary means of space heating at the time of maximum heating requirements will be furnished by the lighting system with the balance of the heating requirements furnished by supplementary electric heating equipment. This rate is not available to new applications for heat for light systems received after March 1, 1979. This rate is not applicable to the use of electricity for electric air conditioning unless the customer has permanently installed electric space heating equipment and uses it as the principal source of space heating,or to the use of electricity for occasional or seasonal substitute for another method of water heating. Nature of Service-The service is alternating current,60 hertz,single phase at Board of Water and Light(BWL)available secondary voltage. Three phase service will be furnished at BWL option. Monthly Rate-Shall be computed in accordance with the following charges. 7/1/05 Basic Service Charge $20.60 Commodity Charge Summer Billing Months of June through October $.0873 per kWh Winter Billing Months of November through May $.0542 per kWh Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Energy Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tax Adiustment-Bill shall be increased within the limits of any governmental authority or political subdivision which levies taxes, license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 12 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A RESIDENTIAL ELECTRIC SERVICE, SENIOR CITIZEN RATE NO.21 Availabilitv-This rate is available to any single family or multifamily dwelling of 4 units or less when the entire electric requirements are supplied at one point of delivery through the same meter. The customer must be 65 years of age and head of the household being served. Service to appurtenant buildings may be taken through the same meter. Service under this rate is not available to any single family or multifamily dwelling of 4 units or less unit when a portion of the residence or dwelling unit is used for commercial,industrial,or resale purposes unless the wiring is so arranged that service for residential and non-residential purposes are metered separately. Customers taking service under this rate shall provide evidence of age and contract with the Board of Water and Light (BWL)to remain on this rate for at least twelve(12)months. Nature of Service-The service is alternating current,60 hertz,single phase, 120/240 nominal volts. Monthly Rate-Shall be computed in accordance with the following charges. 7/1/05 Basic Service Charge $4.38 Commodity Charge $.0469 per kWh for the first 300 kWh $.0791 per kWh for the next 200 kWh $.1061 per kWh for all over 500 kWh Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Energy Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges and calculated as defined on a separate rate schedule incorporated herein by this reference. Tar Adjustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges, shall be added to any bill that is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the BWL. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective: July 1,2005 13 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A STREET LIGHTING SERVICE BOARD OWNED SYSTEMS RATE NO.31 Availabilitv-Available to any political subdivision or agency of the State of Michigan for street lighting service for any system consisting of one or more luminaires where the BWL has an existing distribution system with secondary voltage available. Luminaires may be installed with no limitations as to spacing between luminaires. Where an overhead line extension is required to serve one or more luminaires,the BWL will furnish 350 linear feet of line extension per luminaire served from such extension. A special agreement will be required if more than 350 linear feet of line extension per luminaire is required. Nature of Service-The BWL will furnish,install,own,operate,and maintain all equipment comprising the street lighting system,and supply the unmetered energy. The BWL reserves the right to furnish service from either a series or multiple system or both. Annual Rate-The annual rate per luminaire with fixture and setting,payable in twelve(12)monthly installments, shall be as follows; High Pressure Sodium Luminaire 7/1/05 70 W $70 100 W $79 150 W $92 250 W $112 400 W $143 1000 W $293 Mercury Vapor Luminaire2 100 W $75 175 W $90 250 W $105 400 W $135 1000 W $256 Metal Halide Luminaire 175 W $157 250 W $178 400 W $180 1000 W $350 1500 W $537 Induction Luminaire 85 W $75 165 W $91 Adopted:May 24,2005 Effective:July 1,2005 Rates apply to existing luminaires only and are not open to new business except where the BWL elects,at the customer's request,to install additional luminaires within an area already served by a mercury vapor lighting system. 14 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A STREET LIGHTING SERVICE BOARD OWNED SYSTEMS RATE NO.31 Annual Rate(continued) plus an additional annual charge,depending on type of installation,of: 7/1/05 Wood Pole—Overhead Service None Wood Pole—Underground Service $81 Concrete Pole—Overhead Service $128 Concrete Pole—Underground Service $128 Post Top $81 Historic—Single Top $265 Large Historic—Dual Top $775 Small Historic—Dual Top $551 Wall/Tunnel—8760 hours $112 Wall/Tunnel—4200 hours $68 Bollard $263 Customer Contribution-The annual rates are based on fixtures normally stocked by the BWL,and installed utilizing normal construction techniques. The BWL may,at its option,upon customer request install a street lighting system not covered by the rates below. The customer,after installation,will be required to make a one time contribution equal to the difference between the actual installed cost and the BWL estimated installed cost of a standard installation. The annual unit charge for each luminaire will then be as stated below. Unit Replacement-The BWL may,at its option,upon customer request replace existing street light units. After installation,the customer shall make a one time contribution equal to the undepreciated value of the unit plus the cost of removal. Special Terms and Conditions-The BWL reserves the right to make special contractual arrangements as to termination charges,contributions in aid of construction,term or other special considerations when the customer requests service,equipment or facilities not normally provided under this rate. Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill that is not paid on or before the due date. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective: July 1,2005 15 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A STREET LIGHTING SERVICE CUSTOMER OWNED SYSTEMS RATE NO.32 Availability-Available to any political subdivision or agency of the State of Michigan for street lighting service for any system consisting of one or more luminaires where the BWL has an existing distribution system available. Nature of Service-The BWL will connect the customer's equipment to BWL lines,furnish the control equipment, supply the unmetered energy,control the burning hours of the lamps,provide normal replacement of luminaire refractors,control devices and lamps. The customer will furnish,install and own all equipment comprising the street lighting system, including,but not limited to the overhead wires or underground cables between luminaires and the supply circuits extending to the point of attachment with the BWL. All maintenance and replacement of the customer's equipment except normal lamp and glass replacement shall be paid by the customer. The BWL reserves the right to furnish service from either a series or multiple system or both. Annual Rate-The annual rate per luminaire,payable in twelve(12)monthly installments,shall be as follows: High Pressure Sodium Luminaire 7/1/05 70 W $36 100 W $46 150 W $58 250 W $78 400 W $110 1000 W $261 Mercury Vapor Luminaire3 175 W $54 250 W $71 400 W $100 1000 W $222 Incandescent Luminaire4 2500 L $74 4000 L $117 6000 L $142 Maintenance Charge-The actual labor,material,miscellaneous and indirect charges experienced maintaining street light units during the preceding month. Combined Rates-The annual rate for units consisting of more than one luminaire shall be the appropriate combination of individual unit charges above. Adopted:May 24,2005 Effective:July 1,2005 7 Rates apply to existing luminaires only and are not open to new business except where the BWL elects,at the customer's request,to install additional luminaires within an area already served by a mercury vapor lighting system. 4 Rates apply to existing luminaires only and are not open to new business. 16 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A STREET LIGHTING SERVICE CUSTOMER OWNED SYSTEMS RATE NO.32 Special Terms and Conditions-The BWL reserves the right to make special contractual arrangements as to termination charges,contributions in aid of construction,term or other special considerations when the customer requests service,equipment or facilities not normally provided under this rate. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill that is not paid on or before the due date. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 17 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A ECONOMIC DEVELOPMENT RIDER Purpose-The primary purpose of this rider is to enhance economic development in the Board of Water and Light(BWL) service area. It will be offered to customers when,in the utility's judgment,the availability of the rider is a major factor for the customer locating or expanding its operations and when the rider will result in a net benefit to the BWL and its customers. Availability-This rider is available to industrial customers on Large General Electric Service Rate No.4 or Primary Electric Service Rate No.5 or Large Capacity Electric Service Rate No.8. For purposes of this rider,an industrial customer is defined as any business that manufactures a product for sale or research and development. This would include usage for facilities directly associated with and on the same premises as the manufacturing business such as offices and warehouses. A customer desiring service under this rider must contract for such service on or before December 31,2003. This rate will be available for a period of five years from the date of the contract. All provisions of this rider are the same as the principal service rate with the following exceptions: New Customer-A new customer is a new industrial customer taking service on or after January 1, 1991,where the new load results in 100 kW or more of billing demand. Existing Customer-An existing customer is an existing industrial customer who contracts for a bona fide increase in connected load resulting in an increase of 100 kW,or 10%of their historical billing demand, whichever is greater,or more of billing demand on or after January 1, 1991. Monthlv Rate Capacity Charge:A percentage of the capacity charge included in the principal service rate,less credits,as follows: Contract Year % 1 50% 2 60% 3 70% 4 80% 5 90% Contracted Historical Billing Demand-An existing customer's contracted historical billing demand will be the average of the three highest registered demands,including metering adjustments,during the twelve(12)month period prior to the contract or as established by mutual consent. The contracted historical billing demand shall be subject to the 60% provision during the contract period. The BWL reserves the right to establish a contracted historical billing demand for all customers with duplicate or replacement operations within the BWL service area. Billing Demand-For a new customer,the entire billing demand shall be subject to the capacity charge in this rider and shall never be less than 100 kW or subject to the 60%provision. For an existing customer,or a new customer with an established contracted historical billing demand,the contracted historical billing demand shall be billed at the capacity charge in the customer's principal service rate. Only the billing demand in excess of the contracted historical billing demand shall be billed at the capacity charge in this rider and shall not be subject to the 60%provision. Minimum Charge-A new customer shall have a minimum billing demand of 100 kW. A customer,with an established contracted historical billing demand,shall have a minimum billing demand equal to 60%of the contracted historical billing demand. Adopted:July 25,2000 Effective:January 1,2001 18 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A ENERGY COST ADJUSTMENT The Energy Cost Adjustment permits the monthly adjustment of rates for the costs of energy incurred in supplying electricity to retail customers. All residential and general service rates are subject to the Energy Cost Adjustment. In applying the Energy Cost Adjustment the applicable rate per kWh shall be increased or decreased by the amount of the current Energy Cost Adjustment. The following definitions and procedures will be followed in calculating the monthly Energy Cost Adjustment. Definitions Energy Cost Adjustment-the amount per kWh by which the applicable rates shall be adjusted for billing in each month. Energy Costs-those costs incurred in supplying retail electricity. Such costs include fuel burned,energy costs associated with firm power purchases,net interchange power costs, and costs associated with other temporary power transactions. The cost of fuel burned shall include the delivered cost of fuel(base cost,escalations, premiums/penalties,transportation,demurrage),outside lab fees and other outside costs related to fuel procurement, and fuel additives such as freeze proofing. Over/Under Recovery-the difference between actual Energy Costs for prior months and the amount of energy cost recovered by means of the Base Cost of Energy and the Energy Cost Adjustment. The Over/Under Recovery shall be added to the Energy Costs for purposes of computing the Energy Cost Adjustment for each month. Base Cost of Energy-the average Energy Cost included in the energy rates of the various rate schedules. Such amount shall not be recovered by means of the Energy Cost Adjustment. The current Base Cost of Energy is $0.017921 per kWh sold. Procedures Estimated Energy Cost shall be projected for a twelve-month period. Any amount of Over/Under Recovery (positive or negative)shall be added to the Energy Cost to determine the total cost basis for the Energy Cost Adjustment. The total cost basis shall be divided by the projected total retail billed sales for the twelve-month period resulting in the average energy cost per kWh. The Base Cost of Energy shall be subtracted from the average energy cost to result in the Energy Cost Adjustment. The Energy Cost Adjustment shall be reviewed and,as necessary,revised periodically in accordance with the provisions of this schedule,but not less frequently than every twelve months. Effective February 2, 1999,through February 2,2003,the Energy Cost Adjustment is frozen at$0.001000 per kWh. Thus,the total cost of fuel and purchased power charged to customers is set at$0.018921 per kWh(Base 0.017921 +ECA 0.001000). Adopted: January 26, 1999 Effective:February 1, 1999 19 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A SCHEDULED CURTAILMENTANTERRUPTIBLE SERVICE RIDER Availabilitv-This rider is available to customers on Primary Electric Service Rate No.5 or Large Capacity Electric Service Rate No.8 and any applicable future primary or transmission service rate approved by the commissioners. A customer desiring service under this rider must contract to curtail or interrupt its demand by 1,000 kW or more, upon notice by the Board of Water and Light(BWL). The amount of curtailable or interruptible demand subject to this rider may be limited by the Commissioners in total and by customer. Conditions of Curtailment/Interruption-The Commissioners may determine the total kW demand subject to this rider. The General Manager has authorization to negotiate with qualifying customers as to the following terms and conditions of this rider; [1]the customer kW demand subject to interruption or curtailment, [2]metering requirements, [3]the duration of any interruption or curtailment, [4]the notice period,and, [5]buy through provisions(if any). The contract with the customer will contain the conditions under which the BWL will require curtailment or interruption. Any reduced rate available will include some contribution to fixed costs and depend upon the customer's individual circumstances. The customer agrees to pay$50 per kW for the highest 15-minute kW demand created during the curtailed or interrupted period plus replacement energy out of pocket cost plus 10%should the customer choose not to curtail or interrupt electric load. Definitions Curtailed load-The customer agrees to reduce electric load upon notice from the BWL. Interrupted load-The customer agrees to receive no electricity upon notice from the BWL. Adopted: December 14, 1999 Effective:January 1,2000 20 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A RENEWABLE ENERGY RIDER Nature of Service:The BWL will provide green power to system per the participant enrollment,however,the BWL does not guarantee that the actual electricity delivered to each participant's facility at any specific time will be produced from a green supply resource. Availability-This rider is available to customers making use of any BWL Electric Rate Schedule. Monthly Rate—Customers electing this premium service option will receive an additional charge for monthly energy of up to$7.50 per month for each kWh block of electricity they choose to purchase under this rider. Actual prices will be published each November and will be based on the expected additional cost of renewable resources and other renewable/conservation programs for the upcoming year. The amount of kWhs in each kWh block will be based on the availability of resources that the BWL is able to secure. Participation will be limited to the amount of resources that the BWL is able to secure. Minimum Bill:If the participant's actual monthly consumption is less than the kWh block in the contract,the participant will be charged for the full month's premium. Term and Form of Contract:All participants for this service under this rider will require a written contract stating the number of blocks,block size and the specified period of time in which they will be enrolled. Adopted:August 22,2000 Effective:January 1,2001 21 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A INFRASTRUCTURE RECOVERY RIDER Purpose:The primary purpose of this rider is to encourage economic development in the Board of Water and Light (BWL)service area and recover those expenses necessary to provide electric distribution infrastructure from the customers receiving retail electric service from the BWL on the qualifying property. It will be offered to customers when,in the BWL's judgement,the availability of the rider is a major factor in the customer locating or expanding its operations and when the rider will result in a net benefit to the BWL and its customers. Availabilitv-This rider is available to developers or customers that are developing commercial or industrial facilities requiring installation of BWL electric infrastructure. A customer desiring service under this rider must contract for full service electric requirements for the qualifying property,on or before December 31,2005. Qualifying property under contract must be 50 acres or more,unless specifically approved by the Board of Commissioners. The contract is subject to BWL funding ability and shall include BWL minimum revenue requirements. The contract term shall not be less than five years nor greater than twenty years. All provisions of the applicable principal service rate remain the same with the following exceptions: Monthly Rate Infrastructure Recovery Charge: During the term of the contract,up to 15%of the total monthly electric bill,less sales tax and franchise fees shall be added to the monthly charges for all electric services on the qualifying property. This charge shall be calculated using the contract term and economic criteria,as required by the BWL Rules and Regulations for Electric Service. Adopted:July 23,2002 Effective: September 1,2002 22 Board of Water and Light,Lansing,Michigan—Electric Utility Rates ATTACHMENT A STREET LIGHT RIDER Purpose—The primary purpose of this rider is to enhance economic recovery&development in the Board of Water and Light(BWL)service area. It is available when,in the utility's sole judgment,the availability of the rider is a major factor in improving our regional economy,and when application of the rider wilt result in a net benefit to the BWL and its customers. Availability—This rider is available solely to The City of Lansing and applicable only to its street lighting service with the Board of Water and Light. To qualify for this rider,the City of Lansing must enter into a written contract with the BWL specifying the operational aspects of the rider,including the percentage rate discounts permitted. The rider shall be in effect for a period not exceeding ten years from the date of the contract;however,the discount rate portion of the rider is only available for the first two years of that period. Monthly Rate—Through June 30,2005,the customer will be billed their normal monthly charges under Rate 31, less up to a 50%rate discount. From July 1,2005 through and including June 30,2006,the customer will be billed their normal monthly charges under Rate 31,less up to a 20%rate discount. During the remaining term of the contract,the customer will be billed their normal monthly charges under Rate 31,plus a rate surcharge of up to 9%. All references in this rider to Rate 31 mean the Rate 31 in effect at the time of billing. Delayed Payment Charge—A delayed payment charge of 5% of the unpaid balance, excluding delayed payment charges,shall be added to any bill which is not paid on or before the due date. Rules and Regulations—Service under this rate is subject to the BWL Rules and Regulations for Electric Service, which are incorporated herein by this reference, Adopted: September 28,2004 Effective: September 1,2004 Expires:July 1,2014 23 ATTACHMENT B Water Rate Schedules CONTENTS Residential Water Service,Rate No. 1 ..........................................................................................................................1 GeneralWater Service,Rate No.2................................................................................................................................2 Water System Connection Fees,Rate No.3..................................................................................................................3 FireService,Rate No.4................................................................................................................................................4 Lawn Sprinkling Water Service,Rate No. 5................................................................................................................5 FireHydrant Charges,Rate No.6.................................................................................................................................6 FireHydrant Rider.........................................................................................................................................................7 Board of Water and Light,Lansing,Michigan—Water Utility Rates ATTACHMENT B RESIDENTIAL WATER SERVICE RATE NO. 1 Availability-This rate is available to any single-family residence or multifamily dwelling of 4 units or less served by one meter. Monthly Rate-Shall be computed in accordance with the following charges. Basis Service Charge: per customer per month or part thereof: Meter 7/1/05 7/1/06 5/8" $6.60 $7.03 3/4" * $9.24 $9.84 1" $17.17 $18.29 1'/4" or 1%" $38.30 $40.79 2" $67.35 $71.73 Commodity Charge:per ccf of water used per month; $1.58 $1.68 *The BWL standard residential installation is a 1"service line with a'/4"meter. The BWL reserves the right,in its sole judgment,to install 5/8"meters on any new service installation when circumstances warrant. Power and Chemical Cost Adjustment-The power and chemical cost adjustment shall consist of an increase or decrease of 0.10 per ccf billed for each 0.1¢ increase or decrease in the average cost of power and chemicals required to deliver treated water to the customer's meter above or below 17.5¢per ccf. The cost per ccf for the billing period shall consist of the weighted average cost of chemicals,electricity,steam and oil used in pumping and treatment facilities during the one month period preceding the month billed by two months. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of water,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Minimum Charge-The minimum charge shall be the above Basic Service Charge applied for 30 days. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill which is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the Board. Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations for Water Service which are incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 1 ATTACHMENT B GENERAL WATER SERVICE RATE NO.2 Availability-This rate is available to any customer served on the BWL's water system. Service under this rate is not available for resale. Monthly Rate-Shall be computed in accordance with the following charges. Basic Service Charge: per customer per month or part thereof; Meter 7/1/05 7/1/06 5/8" $6.60 $7.03 3/4" * $9.24 $9.84 1" $17.17 $18.29 1%4"or 1%Z" $38.30 $40.79 2" $67.35 $71.73 3" $151.87 $161.74 4" $270.72 $288.32 6" $608.80 $648.37 8" $1,081.57 $1,151.87 10" $1,690.37 $1,800.24 Commodity Charge:per ccf of water used per month; $1.58 $1.68 *The BWL standard residential installation is a 1"service line with a'/4"meter. The BWL reserves the right,in its sole judgment,to install 5/8"meters on any new service installation when circumstances warrant. Power and Chemical Cost Adiustment-The power and chemical cost adjustment shall consist of an increase or decrease of 0.10 per ccf billed for each 0.1¢increase or decrease in the average cost of power and chemicals required to deliver treated water to the customer's meter above or below 17.50 per ccf. The cost per ccf for the billing period shall consist of the weighted average cost of chemicals,electricity,steam and oil used in pumping and treatment facilities during the one month period preceding the month billed by two months. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of water,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Minimum Charge-The minimum charge shall be the above Basic Service Charge applied for 30 days. Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill which is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the Board. Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations for Water Service which are incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 2 Board of Water and Light,Lansing,Michigan—Water Utility Rates WATER SYSTEM CONNECTION FEES RATE NO.3 ATTACHMENT B System Connection Fees-The following schedule of fees shall apply to all new water service connections made to the mains. This fee shall not apply to active services that are being replaced. Service Connection to Main 1/1/02 1/19/01 1/1/03 1" or smaller $1,000 $1,000 $1,000 1%" $1,966 $2,081 $2,194 2" $3,495 $3,700 $3,900 3" $3,932 $4,163 $4,388 4" $6,990 $7,400 $7,800 6" $15,728 $16,650 $17,550 8" and over $27,961 $29,600 $31,200 Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of water,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Delaved Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill that is not paid on or before the due date. Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations for Water Service which are incorporated herein by this reference. Adopted: December 19,2000 Effective: January 19,2001 3 Board of Water and Light,Lansing,Michigan—Water Utility Rates FIRE SERVICE RATE NO.4 Fire Service - A fire service line will be installed to a fire hydrant(s)or a customer's detector check valve in ATTACHMENT B accordance with the schedule of charges for water system connection fees(Rate 3)and the current water service installation charges set forth in the Rules and Regulations for Water Service. The location of the detector check valve shall be determined by the Water Distribution Engineering Department. Fire service lines shall be used for fire protection purposes only. No additional charges will be made for water used for testing and fire purposes. The customer shall maintain the detector check valve and fire protection system connected thereto in good condition in compliance with Section 34-9,Repair and Protection of Equipment,of the Code of the City of Lansing,Michigan. Monthly Fire Service Charge-Water supply and maintenance of a fire service line to a detector check valve shall be provided in accordance with the following schedule of charges: Service Size 7/1105 7/1/06 4"or smaller $48 $51 6" $107 $114 8" $190 $202 10"or larger $296 $315 Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes, license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of water,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Minimum Charge-Billings subject to this rate are not subject to a minimum charge. Delayed Pavment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill which is not paid on or before the due date. Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations for Water Service which are incorporated herein by this reference. Adopted: May 24,2005 Effective: July 1,2005 4 Board of Water and Light,Lansing,Michigan—Water Utility Rates LAWN SPRINKLING WATER SERVICE RATE NO.5 Availabilitv-This rate is available to any customer served on the B WL's water system where the meter or service is installed solely for lawn sprinkling. Municipalities having jurisdiction over sewer system rates may designate other uses of water which are subject to this rate. Monthly Rate- Shall be computed in accordance with the following charges. ATTACHMENT B Basic Service Charge:Billings subject to this rate are not subject to a Basic Service Charge. Commodity Charge:per ccf of water used per month 7/1/05 7/1/06 all ccf $1.58 $1.68 Power and Chemical Cost Adiustment-The power and chemical cost adjustment shall consist of an increase or decrease of 0.10 per ccf billed for each 0.1¢increase or decrease in the average cost of power and chemicals required to deliver treated water to the customer's meter above or below 17.5¢per ccf. The cost per ccf for the billing period shall consist of the weighted average cost of chemicals,electricity,steam and oil used in pumping and treatment facilities during the one month period preceding the month billed by two months. Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of water,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Minimum Charile-Billings subject to this rate are not subject to a minimum charge. Delayed Payment Charlie-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill which is not paid on or before the due date. Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a service location irrespective of prior service with the Board. Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations for Water Service which are incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 5 Board of Water and Light,Lansing,Michigan—Water Utility Rates FIRE HYDRANT CHARGES RATE NO.6 Annual Fire Hydrant Charge- Water Supply and maintenance of a fire service line to a public or private fire hydrant shall be provided in accordance with the following annual schedule of charges: 7/1/05 7/l/06 All Hydrants $314 $334 Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of water,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. ATTACHMENT B Minimum Charge-Billings subject to this rate are not subject to a minimum charge. Delaved Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,shall be added to any bill which is not paid on or before the due date. Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations for Water Service which are incorporated herein by this reference. Adopted:May 24,2005 Effective:July 1,2005 6 Board of Water and Light,Lansing,Michigan—Water Utility Rates FIRE HYDRANT RIDER Purpose—The primary purpose of this rider is to enhance economic recovery&development in the Board of Water and Light(BWL)service area. It is available when,in the utility's sole judgment,the availability of the rider is a major factor in improving our regional economy,and when application of the rider will result in a net benefit to the BWL and its customers. Availability—This rider is available solely to The City of Lansing and applicable only to its public hydrant service with the Board of Water and Light. To qualify for this rider,the City of Lansing must enter into a written contract with the BWL specifying the operational aspects of the rider,including the percentage rate discounts permitted. The rider shall be in effect for a period not exceeding ten years from the date of the contract;however,the discount rate portion of the rider is only available for the first two years of that period. Monthly Rate—Through June 30,2005,the customer will be billed their normal monthly charges under Rate 6, less up to a 50%rate discount. From July 1,2005 through and including June 30,2006,the customer will be billed their normal monthly charges under Rate 6, less up to a 20%rate discount. During the remaining term of the ATTACHMENT B contract,the customer will be billed their normal monthly charges under Rate 6,plus a rate surcharge of up to 9%. All references in this rider to Rate 6 mean the Rate 6 in effect at the time of billing. Delayed Payment Charge—A delayed payment charge of 5%of the unpaid balance, excluding delayed payment charges,shall be added to any bill which is not paid on or before the due date. Rules and Regulations—Service under this rate is subject to the BWL Rules and Regulations for Water Service, which are incorporated herein by this reference. Effective:September 1,2004 Adopted:September 28,2004 Expires: July 1,2014 7 WATE�RBL�IGHT Lansing Board of so Water and Light Rules and Regulations For Electric Service DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 07/01/05 ATTACHMENT C WATER&LI Lansing Board of 'Table of Contents so Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions....................................................................................................................................................................4 GeneralProvisions.......................................................................................................................................................6 ServiceConditions.......................................................................................................................................................7 Characterof Service..................................................................................................................................................7 Descriptionof Service...............................................................................................................................................7 AvailableVoltage..................................................................................................................................................7 Dual Voltage Transformers...................................................................................................................................8 Agreements............................................................................................................................................................8 MaterialAvailability..............................................................................................................................................8 Useof Service...............................................................................................................................................................9 General......................................................................................................................................................................9 Accessand Damages.................................................................................................................................................9 CustomerEquipment.................................................................................................................................................9 PowerQuality............................................................................................................................................................9 PowerFactor............................................................................................................................................................10 Tampering................................................................................................................................................................10 Metering.....................................................................................................................................................................I I General....................................................................................................................................................................I I Install ati on/O wnership.............................................................................................................................................I I EquipmentLocation................................................................................................................................................I I MultipleOccupancy Buildings................................................................................................................................12 Applicationof Rates..................................................................................................................................................13 General....................................................................................................................................................................13 Resale......................................................................................................................................................................13 Choiceof Rates........................................................................................................................................................14 ReactivePower........................................................................................................................................................14 Space Conditioning-Electric Water Heating Service.............................................................................................15 Mobile Homes in Courts-Individually Served.......................................................................................................15 Apartment Buildings and Multiple Dwelling Structures.........................................................................................15 Cogeneration and Small Power Production Facility................................................................................................15 BillingDemand........................................................................................................................................................16 MinimumCharges...................................................................................................................................................16 Property Owner-Rental Agent Agreement for'Leave On' Service........................................................................16 Responsibility for Payment of Bills..........................................................................................................................17 General....................................................................................................................................................................17 EstimatedConsumption...........................................................................................................................................17 BillingErrors...........................................................................................................................................................17 AccountSecurity Deposits......................................................................................................................................17 Dispute and Hearing Procedure...............................................................................................................................19 Disputes...................................................................................................................................................................19 Hearings...................................................................................................................................................................19 Sale and Lease of Service Facilities..........................................................................................................................21 Distribution System Extensions................................................................................................................................22 General....................................................................................................................................................................22 Request for Distribution System Extension.........................................................................................................22 Ownership............................................................................................................................................................22 Nonrefundable Contribution for Underground Extensions..................................................................................22 Deposit.................................................................................................................................................................22 Refunds................................................................................................................................................................23 Economic Development Offsets..........................................................................................................................24 DRAFT 6/23/2005 PROPOSED EFFECTIVE: 07/01/05 ATTACHMENT C Page 2 of41 WATERRIGHTT Lansing Board of Table of Contents Water and Light Easements and Tree Trimming/Removal Permits...............................................................................................24 Non-Standard Equipment....................................................................................................................................24 Non-Standard Construction.................................................................................................................................24 OtherFacilities....................................................................................................................................................24 CustomerProvided Facilities...............................................................................................................................25 MobileHome Courts...........................................................................................................................................25 StreetLighting.....................................................................................................................................................25 OutdoorProtective Lighting................................................................................................................................25 Subdivisions.........................................................................................................................................................25 AvailableVoltage................................................................................................................................................25 Construction Date of Distribution Extension.......................................................................................................26 Trenchingand Duct.................................................................................................................................................26 Conversion of Existing Overhead Distribution Systems and Associated Services..................................................27 Electric Facility Relocations and Removals............................................................................................................27 Distribution System Extensions for Second Source................................................................................................28 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 Multi-Dwelling Structure Services..........................................................................................................................33 Conversion of Existing Overhead Electric Service..................................................................................................33 Electric Service Relocations and Removals............................................................................................................33 SecondService........................................................................................................................................................33 Motors.........................................................................................................................................................................35 Useof Board Equipment...........................................................................................................................................36 General....................................................................................................................................................................36 AuthorizedAttachments..........................................................................................................................................36 UnauthorizedUse and Removal..............................................................................................................................36 ParallelPower Sources;.............................................................................................................................................37 General....................................................................................................................................................................37 Approvals................................................................................................................................................................37 Controland Protection.............................................................................................................................................37 Operation.................................................................................................................................................................37 Termination.............................................................................................................................................................38 Contract...................................................................................................................................................................38 Scheduleof Fees&Charges......................................................................................................................................39 DRAFT 6/23/2005 PROPOSED EFFECTIVE: 07/01/05 ATTACHMENT C Page 3 of 41 ware Lansing Board of Definitions on 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. BORING— To pierce the ground with a turning or twisting movement of a tool to make a hole for pipes, cables etc. 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. ADOPTED: 05/25/04 EFFECTIVE: 07/01/04 ATTACHMENT C Page 4 of41 wn` Lansing Board of Definitions Water and Light Electric Rule and Regulation 1 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. 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. MULTI-DWELLING STRUCTURE—A building containing 5 or more Dwelling Units, including but not limited to apartments,condominiums or senior housing projects. PERSON— Any individual, corporation, partnership, company, limited liability corporation, organization or governmental entity. 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 Multi-Dwelling 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: 05/25/04 EFFECTIVE: 07/01/04 ATTACHMENT C Page 5 of41 Qmdvbi WATEERRIIGHTHT Lansing Board of General Provisions Water and Light Electric Rule and Regulation 2 General Provisions 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.coni 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 Person 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. This document is intended to cover most situations where standardized policies and practices have been established. No officer, agent or employee of the Board has authority to waive or modify the provisions of this document unless specifically authorized to do so by the Board of Commissioners. The Board of Commissioners may revise this document at any time and may modify or suspend any portion of it temporarily or permanently. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 6 of41 WATERRIGHT Lansing Board of Service Conditions in 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 cases where the Board permits a separate power source, 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. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 7of41 WATER Lansing Board of Service Conditions Water and Light Electric Rule and Regulation 3 (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 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 (Phase to Phase) Combined 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. The Board may charge a Connect Fee when the Customer request the service to be made active outside normal business hours as specified in Rule 15. 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Pale 8 of41 WATER&LIGHT Lansing Board of Use of Service go 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 permission 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: 05/25/04 EFFECTIVE: 07/01/04 ATTACHMENT C Page 9 of41 WATERRCIGHT Lansing Board of Use of Service RNWater 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: 05/25/04 EFFECTIVE: 07/01/04 ATTACHMENT C Page 10 of41 WATER&LIGHT 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 connection 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 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 11 of41 WATERR&LIGHT Lansing Board of Metering on 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 Schedule 5 or Rate Schedule 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 12of41 WATER&UGHGH�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 owner or operator shall be responsible for payment of purchased Energy for resale as required by Rule 7. The Board shall have no obligation to furnish or maintain meters or other Facilities for the resale of service by the reselling owner or operator to the occupant. Billing records of the owner or operator may be audited once every 12 to 18 months using generally accepted auditing practices. The audit shall be conducted by the Board or if the Board elects,by an independent auditing firm approved by the Board. The reselling owner or operator shall be assessed a reasonable fee for an audit conducted by the Board. The owner or operator providing the resale shall be responsible for testing each occupant's meter at least once every 3 years. The accuracy of such meters shall be maintained within 2% for non Demand meters and within 1% for Demand meters. Meters shall be tested only by outside testing services or laboratories approved by the Board. A record of each meter, including testing results, shall be kept by the reselling owner or operator during the use of the meter and for an additional period of one year thereafter. When requested,the reselling owner operator shall submit certified copies of the meter test results and meter records to the Board. The reselling owner or operator shall render a bill once during each billing month to each of the occupants' or tenants in accordance with the appropriate Board Rate Schedule. Every bill rendered by the reselling owner or operator shall specify the following information; The Rate Schedule title, the due date,the beginning and ending meter reading of the billing period and the dates thereof;the difference between the meter readings; the amount due for distribution services and/or Energy use, as applicable to the Rate; subtotal before taxes, the amount of sales tax, other taxes where applicable; the amount due for other authorized charges; and the total amount due. The due date shall be 21 days from the date of rendition.The reselling owner operator shall be responsible for all collections and payment disputes for resale occupants. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 13 of41 WATe"�R&L Lansing Board of Application of Rates RNWater and Light Electric Rule and Regulation 6 The reselling owner or operator shall supply each occupant with an electric system adequate to meet the needs of the occupant with respect to the nature of service, voltage level and other conditions of service. If the reselling owner or operator fails to meet the obligations of this rule,the Board will notify the appropriate authorities and after reviewing with the reselling owner or operator, the problem(s) is not resolved,the Board may declare the reselling owner or operator in violation of Rule 2. 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 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 14of41 WATEERRLI�GHT Lansing Board of Application of Rates ImWater 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 10.1.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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 15 of41 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 16 of41 WATEER LI� 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. The Board will charge a"Non Sufficient Funds Fee" in accordance with Rule 15 for returned checks. 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 A. 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. B. When an error is found to exist in the billing of a contract or service agreement with or governing the Customer, the Board will correct such error to recover or refund the difference between 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 or without an established credit history. The Board shall 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 ADOPTED: 05/25/04 Page 17 of 41 EFFECTIVE:07/01/04 ATTACHMENT C WATE"`Ra`�'R L�IGHTT Lansing Board of Responsibility for Payment of Bills in Water and Light Electric Rule and Regulation 7 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. 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 misrepresents their identity. (3) The Customer fails to provide positive identification at the time of applying for service. (4) The Customer has diverted or interfered, in an unauthorized manner, with utility service in the past 6 years. (5) 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, (5) credit card reversal, (6) or other payment method cancellation. (6) The Customer has a prior account that is delinquent within the last 6 years. 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 may not be required to submit a deposit, in any of the following situations: (1) The Customer has previously established an acceptable payment history with the Board on a similar account. (2) The Customer's bill is paid by a governmental agency. (3) The Customer secures a guarantor;the guarantor has an acceptable payment history. (4) The Customer provides an acceptable surety bond. (5) 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. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 18 of41 WATERBLIGHT Lansing Board of Dispute and Hearing Procedure 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 the hearing. Service may be discontinued for has requested a hearing, pending results of 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: 05/25/04 Page 19 of 41 EFFECTIVE:07/01/04 ATTACHMENT C WATER Lansing Board of Dispute and Hearing Procedure 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 20 of41 wATE Lansing Board of Sale and Lease of Service Facilities Water 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: 05/25/04 Page 21 of 41 EFFECTIVE:07/01/04 ATTACHMENT C goWATERBLIGHT 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 prior to construction, 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 and Multi-Dwelling Structures: 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,prior to construction, 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 22 of41 WA7EA8LIGHT 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. Rule 10.1.C. "Nonrefundable Contribution for Underground Extensions" may not apply to distribution system extensions evaluated under this section herein. 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. E. Refunds e extension deposits made with the Board shall be subject to refund Distribution Lin without interest during the first five (5) twelve (12) month periods from the date of the written agreement for a distribution system extensi n as required by this Rule 10.1.D. o 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 permanent Customer(s) directly connected to the extension and; 2) An amount equal to one and one-half(V/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. Refunds will not be made until the original Customer(s) or its equivalent are permanently connected to the extension. ADOPTED: 05/25/04 Page 23 of 41 EFFECTIVE:07/01/04 ATTACHMENT C goWATE&'LIGHT Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 F. 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. G. 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. 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 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: OS/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 24 of 41 WATER&LIGHT Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 K. 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. L. Mobile Home Courts Underground distribution systems and services for Mobile Home Courts shall be installed under the provisions of this Rule 10 and Rule 11, 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 system, including the red es tion of the service lateral The service conductors from the meter to the mobile home be the responsibility of the Mobile Home Court owner. M. 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. street lighting in areas served directly by The Board may provide underground underground distribution systems. N. 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 hate Schedule. O. 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. P. 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: 05/25/04 Page 25 of 41 EFFECTIVE:07/01/04 ATTACHMENT C inWATEER&�HT Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 Q. 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. The other utility(s) electing to utilize joint trench will be responsible for payment of"Joint Trench Charges" in accordance with Rule 15, "Joint Trench Charles". 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 may elect at its sole discretion to install additional conduit or duct at the request of other utility providers. The utility(s) utilizing the conduit or duct will be responsible for payment of joint installation in accordance with Rule 15. 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. ADOPTED: OS/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 26 of41 WATERBtIGHT Lansing Board of Distribution system Extensions Water and Light Electric Rule and Regulation 10 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. 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 10.1.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. ADOPTED: 05/25/04 Page 27 of 41 EFFECTIVE:07/01/04 ATTACHMENT C WATE�a Lansing Board of Distribution System Extensions Water and Light Electric Rule and Regulation 10 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 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. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 28of41 WATERBCIGHT Lansing Board of Services Water 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 ali lea an s regula of the tions ns and local o al Electrical Code, National other Electrical Safety Code and applicable law Service shall not be provided to a Service Location through an existing structure. 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.LD. 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 of construction. Meters shall be installed by st justify e $O ard security deposit if required prior to the start such and may be read daily and the deposit will be modified, as the Energy used may j modification. Minor temporary Loads such as construction security cameras may be unrnetered and billed at a flat Rate at the approval of the System Integrity and Customer Projects Department. is red and here such service is Where overheads not exceedrvice of feet atOtheAt'me temporres or arysservicelis needed,Nthe charge will be as available and does not exce specified in Rule 15. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 29 of 41 inWATER&LIGHTLansing Board of Services Water and Light Electric Rule and Regulation 11 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 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. The ampacity of the Board's overhead service conductors will be rated for the estimated electric Demand but not less than 50% of the customer's main over current device(s). 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. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 30 of 41 WATER&LIGH®T Lansing Board of Services Water and Light Electric Rule and Regulation 11 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 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 supplied by the Board and installed by the Customer. 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 between the ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 31of41 WATERRIGftHTT Lansing Board of Services go Water and Light Electric Rule and Regulation 11 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. C. In locations were the Customer's service conductors are permitted to be connected directly to a Board-owned transformer,only Board approved and provided terminations shall be allowed. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 32 of41 WATEER�&L�IGHHT Lansing Board of Services Water and Light Electric Rule and Regulation 11 7. Multi-Dwellina Structure Services The owner or developer of each Multi-Dwelling Structure requiring an underground single phase electric service system shall install, maintain and own the underground secondary service conductors between the building and the service pedestal,padmount transformer, or secondary attachment on the pole. The total capacity of the Dwelling Units connected to each service shall not exceed the capacity of a single 167 kVA transformer. Customers located in areas served by direct burial distribution systems may request the Board to install direct buried single phase electric secondary service conductors to Multi-Dwelling Structures not exceeding 800 A where the point of metering is located outside and is in compliance with the Board's requirements. The Board will comply with this request, if it is feasible, but shall only install service conductors to a 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. 8. 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. 9. 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. 10. 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. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 33 of41 WATER&LIGHT Lansing Board of Services Water and Light Electric Rule and Regulation 11 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 34 of41 WATE�RLIGHT Lansing Board of Motors In 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 '/z hp or less 120 50 Amperes '/z 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 35of41 WATE Lansing Board of Use of Board Equipment Water and Light Electric Rule and Regulation 13 Use of Board Equipment 1. General The Board's wires, poles and apparatus,together with any interconnections 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 1.5. 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 13.3.13 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 36 of41 WATER&LIGHT Lansing Board of Parallel Power Sources go 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 located 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 37 of 41 WATERLansing 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: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 38 of41 WATER&LIGGHT Lansing Board of Schedule of Fees & Charges Water and Light Electric Rule and Regulation 15 Schedule of Fees& Charges ELECTRIC FEES and.CHARGES Charge Description When Applied Charge Residential Underground Distribution When requested by Customer $3.50/ft Extension $7/ft for undeveloped lots Residential Underground Service When requested by Customer $4.50/ft Green space only,restoration not included. Installation $300 minimum requiring conduit,sidewalk crossing or other hindrances will be billed at time and material Commercial Underground Distribution When requested by Customer $7/ft Extension Commercial Underground Service When requested by Customer $ 400 A or less and green space only,restoration not $58 0 0 minimum included. Multi-Dwelling Structure Single Phase 800 A or less $6.50/ft $580 minimum Transformer kVA Capacity Commercial or Industrial underground services $10/kVA Current and Potential Transformer When requested by Customer,401—1000A $550 ea. Enclosure When requested by Customer,>1001A—1200A $800 ea. When requested by Customer,>1201A—3000A $8,400 ea. Multiple secondary termination cabinet When requested by Customer,up to 3000A $8,000 ca. Secondary Service Termination Box BWL installed commercial services requested by customer $500 ea. with trough system 800 A or less on Multi-Dwelling Structures Temporary Service Overhead Install&remove service drop, 100 ft max, 200 A or less $350 ea. 201A to 400 A $525 ea. Temporary Service Overhead Install&remove service drop,exceeds 100 ft, At cost 400 A or not available Temporary Underground When requested by Customer, $330 ea. (Normal) Connection&disconnection only April 1—December 14 Temporary Underground When requested by Customer, $500 ea. (Winter) Connection&disconnection only December 15—March 31 Secondary Riser Pole Charge When requested by Customer Single Phase 400 A or less $450 ea. Three Phase 400 A or less $650 ea. Site Inspection When applicable $75 ea. ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page 39 of41 WATER&UGHT 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 and engineering At cost Pole Attachment Fees Annual fee $13 per attachment $260 minimum Application deposit,credited to make ready costs and $28 per pole engineering $560 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 I joint user Winter charge may also apply. Conduit Delivery for Joint Facilities To other utilities when conduit is delivered to site for $2.00/ft if 2 joint users Installation road or drive crossing for installation by developer's in same conduit contractor or BWL for utilization by Joint user(s). $3.50/ft if 1 joint users Joint Conduit Push with BWL To other utilities to utilize separately installed conduit $18 /ft if 2 joint users in same conduit $28/ft if 1 joint user Winter Construction Charge may apply. Joint Boring with BWL To other utilities to utilize separately installed flexible $I8/ft if 2 joint users in duct. same duct $27/ft if 1 joint user Winter Construction Charge may apply. Winter Construction Charge December 15—March 31 $7/ft In addition to normal charge Connect fee 7:30 a.m.—5:30 p.m.weekdays No charge After 5:30 p.m.on weekdays or weekends and holidays $130 Reconnection fee Each occurrence Non-pay(Normal hours) 7:30am—5:30 p.m.weekdays $25 Non-pay(Other than normal hours) After 5:30 p.m.on weekdays or weekends and holidays $100 Meter Tampering Any time $100 Cut at Pole Anytime $150 Security Deposits—Residential For all new customers unless waived by conditions $68 stated in Rule 7. Security Deposits—Commercial& For all new customers unless waived by conditions 1.5 times average Industrial stated in Rule 7. monthly bill Missed Appointment,No Show,No After second occurrence $25 access Fee ADOPTED: 05/25/04 EFFECTIVE: 07/01/04 ATTACHMENT C Page 40 of41 WATER Lansing Board of Schedule of Fees & Charges Water and Light Electric Rule and Regulation 15 ELECTRIC FEES and CHARGES Charge Description When Applied Charge Non Sufficient Funds(NSF)Fee For Non Sufficient Funds on Checks $20 Rate 5&8 Meter Non-compliance For each month of non-compliance with meter $80/month Charge requirements Meter Calibration Charge When Customer requested meter calibration check is $70 within plus or minus 2%accuracy Charges other than published Relocations,damages,etc. At Cost ADOPTED: 05/25/04 EFFECTIVE:07/01/04 ATTACHMENT C Page41of41 s 'i_.~ .r WATERBCIGHT Lansing Board of Water and Light Rules and Regulations For Water Service DRAFT: 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT D WATER&LIGHTT Lansing Board of Table of Contents go Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions....................................................................................................................................................................4 GeneralProvisions.......................................................................................................................................................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.....................................................................................................................................................................I I General....................................................................................................................................................................I I Sizing/Installation/Ownership.................................................................................................................................11 EquipmentLocation................................................................................................................................................I I MultipleOccupancy Buildings................................................................................................................................I I Damagedor Frozen Meter.......................................................................................................................................12 Applicationof Rates..................................................................................................................................................13 General....................................................................................................................................................................13 Resale......................................................................................................................................................................13 Choiceof Rates........................................................................................................................................................14 Apartment Buildings and Multiple Dwelling Structures.........................................................................................14 Billing......................................................................................................................................................................14 MinimumCharges...................................................................................................................................................14 Property Owner-Rental Agent Agreement for'Leave On'Service........................................................................14 Responsibility for Payment of Bills..........................................................................................................................16 General....................................................................................................................................................................16 EstimatedConsumption...........................................................................................................................................16 BillingErrors...........................................................................................................................................................16 AccountSecurity Deposits......................................................................................................................................16 Disputeand Hearing Procedure...............................................................................................................................18 Disputes...................................................................................................................................................................18 Hearings...................................................................................................................................................................18 WaterCustomer Choice Program............................................................................................................................20 General....................................................................................................................................................................20 Contractor Qualification and Approval...................................................................................................................20 ResidentialServices.................................................................................................................................................20 Deposit for On-Site Water Mains and Large Services.............................................................................................20 Permits.....................................................................................................................................................................20 DistributionSystem Extensions................................................................................................................................21 General....................................................................................................................................................................21 Request for Distribution System Extension.........................................................................................................21 Ownership............................................................................................................................................................21 Availability of Distribution System Extension....................................................................................................21 Contribution In Aid of Construction for System Extensions...............................................................................21 Installation of Distribution System Extension.....................................................................................................22 Adequate Pressure and Flow Capacity................................................................................................................22 DRAFT:6/23/2005 Proposed EFFECTIVE: 7/l/05 ATTACHMENT D Page 2 of36 WATERRIGHT Lansing Board of Table of Contents Water and Light Permits.................................................................................................................................................................23 StakingRequirements..........................................................................................................................................23 FireHydrants.......................................................................................................................................................23 Oversizing of Distribution System Extension......................................................................................................23 Economic Development Considerations..............................................................................................................23 Easements............................................................................................................................................................23 Non-Standard Equipment....................................................................................................................................24 Non-Standard Construction.................................................................................................................................24 OtherFacilities....................................................................................................................................................24 Construction Date of Distribution System Extension..........................................................................................24 Water Facility Relocations and Removals...............................................................................................................24 Services.......................................................................................................................................................................26 General....................................................................................................................................................................26 TemporaryWater Service........................................................................................................................................26 DomesticWater Service..........................................................................................................................................26 General................................................................................................................................................................26 Customer Connections to Board Facilities..........................................................................................................27 Charges................................................................................................................................................................27 FireService..............................................................................................................................................................27 General................................................................................................................................................................27 Charges................................................................................................................................................................28 Lawn Sprinkler(Irrigation)Service.........................................................................................................................28 Water Facility Relocations and Removals...............................................................................................................28 BoosterPumps...........................................................................................................................................................29 WaterStorage Facilities............................................................................................................................................30 Cross—Connection......................................................................................................................................................31 General....................................................................................................................................................................31 Installation of Backflow Prevention Devices..........................................................................................................31 Inspection and Maintenance of Backflow Prevention Devices................................................................................31 Compliance..............................................................................................................................................................31 SevereHazard Locations.........................................................................................................................................31 SecondarySupplies..................................................................................................................................................32 Scheduleof Fees&Charges......................................................................................................................................33 DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 3of36 wnrE" icy Lansing Board of Definitions in Water and Light 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. BORING— To pierce the ground with a turning or twisting movement of a tool to make a hole for pipes,cables etc. CUSTOMER— A purchaser of water service supplied by the Board or a governmental entity that authorizes the Board to provide water service. CUSTOMER OWNED FIRE HYDRANT—The hydrant and appurtenances owned and maintained by the Customer, installed on CUSTOMER PIPING on private property after the Board metering point. 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. METER SET—Those pipes,valves and appurtenances that house the water meter. 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. PERSON— Any individual, corporation, partnership, company, limited Liability Corporation, organization or governmental entity. PRIVATE FIRE HYDRANT — The hydrant and appurtenances owned and maintained by the Board, installed on Water Mains on private property in Board approved easements to provide water primarily for fire fighting purposes for the property benefit. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 4 of 36 WATER" R&LIGHT Lansing Board of Definitions Water and Light Water Rule and Regulation 1 PUBLIC FIRE HYDRANT — The hydrant and appurtenances owned and maintained by the Board, installed on Water Mains within public right-of-way or in Board approved easements to provide water primarily for fire fighting purposes for public benefit. 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 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 water service to Customer Piping. 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. DRAFT: 6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 5 of 36 WATER&LIcHT Lansing Board of General Provisions Water and Light Water Rule and Regulation 2 General Provisions 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.coni 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 Person 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 2" or larger 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. This document is intended to cover most situations where standardized policies and practices have been established. No officer, agent or employee of the Board has authority to waive or modify the provisions of this document unless specifically authorized to do so by the Board of Commissioners. The Board of Commissioners may revise this document at any time and may modify or suspend any portion of it temporarily or permanently. DRAFT: 6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page6of36 WATER RIGHT&EIGHT Lansing Board of Service Conditions Ow 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 7 of36 WATER ER&LIGH�T 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 permanent use of the service. The Board may charge a Connect Fee when the Customer request the service to be made active outside normal business hours as specified in Rule 15. 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/l/05 ATTACHMENT D Page 8 of 36 WATER&LIGHT Lansing Board of Use of Service Water and Light Water Rule and Regulation 4 MW 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 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 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. DRAFT: 6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 9 of36 WATem` RBI® 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. DRAFT: 6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 10 of 36 WATER&LIGHT 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 or pit at or near the property line, and the cost, ownership and maintenance of the meter manhole or pit structure and the piping from the outlet of the Meter Set thereof shall be the responsibility of the Customer, except where the Board has retained ownership. The customer shall at all times, provide clear access to the meter manhole or pit structure for the purpose of meter and meter set access and maintenance. 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. DRAFT: 6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 11 of36 WATER Lansing Board of Metering on 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 12 of36 WATEER&LhGHiT Lansing Board of Application of Rates RDWater 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 owner or operator shall be responsible for payment of purchased water for resale as required by Rule 7. The Board shall have no obligation to furnish or maintain meters or other Facilities for the resale of service by the reselling owner or operator to the occupant. Billing records of the owner or operator may be audited once every 12 to 18 months using generally accepted auditing practices. The audit shall be conducted by the Board or if the Board elects, by an independent auditing firm approved by the Board. The reselling owner or operator shall be assessed a reasonable fee for an audit conducted by the Board. The owner or operator providing the resale shall be responsible for testing of each occupant's meter at least once every 3 years. The accuracy of such meters shall be maintained according to the most recent publication of Table 5-3, "Test Requirements for New, Rebuilt and Repaired Cold-Water Meters" within the AWWA M6 manual. Meters shall be tested only by outside testing services or laboratories approved by the Board. A record of each meter, including testing results, shall be kept by the reselling owner or operator during the use of the meter and for an additional period of one year thereafter. When requested,the reselling owner operator shall submit certified copies of the meter test results and meter records to the Board. The reselling owner or operator shall render a bill once during each billing month to each of the occupants' or tenants in accordance with the appropriate Board Rate Schedule. Every bill rendered by the reselling owner or operator shall specify the following information; The Rate Schedule title, the due date,the beginning and ending meter reading of the billing period and the dates thereof;the difference between the meter readings; the amount due for services and/or commodity use, as applicable to the Rate; subtotal before taxes,other taxes where applicable; the amount due for other authorized charges; and the total amount due. The due date shall be 21 days from the date of rendition.The reselling owner operator shall be responsible for all collections and payment disputes for resale occupants. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 13 of 36 WA ER&LIGHT Lansing Board of Application of Rates Water and Light Water Rule and Regulation 6 The reselling owner or operator shall supply each occupant with a water system adequate to meet the needs of the occupant with respect to the nature of service, water quality, pressure, Cross- Connection control and other conditions of service. If the reselling owner or operator fails to meet the obligations of this rule, the Board will notify the appropriate authorities and after reviewing with the reselling owner or operator, the problem(s) is not resolved, the Board my declare reselling owner or operator in violation of Rule 2. 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, 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 DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 14 of 36 NAVAOAIO WATERRIGHYT Lansing Board of Application of Rates Water and Light Water Rule and Regulation 6 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. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 15 of36 WArEERRRIIGGHWT Lansing Board of Responsibility for Payment of Bills onWater 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. The Board will charge a"Non Sufficient Funds Fee" in accordance with Rule 15 for returned checks. 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 A. 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. B. When an error is found to exist in the billing of a contract or service agreement with or governing the Customer, the Board will correct such error to recover or refund the difference between 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 or without and established credit history. The Board shall 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 DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 16of36 WATE ERRIG"r Lansing Board of Responsibility for Payment of Bills Water and Light Water Rule and Regulation 7 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. 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 misrepresents their identity. (3) The Customer fails to provide positive identification at the time of applying for service. (4) The Customer has diverted or interfered, in an unauthorized manner, with utility service in the past 6 years. (5) 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, (5) credit card reversal, (6) or other payment method cancellation. (6) The Customer has a prior account that is delinquent within the last 6 years. A. 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. B. New Customers may not be required to submit a deposit, in any of the following situations: (1) The Customer has previously established an acceptable payment history with the Board on a similar account. (2) The Customer's bill is paid by a governmental agency. (3) The Customer secures a guarantor;the guarantor has an acceptable payment history. (4) The Customer provides an acceptable surety bond. (5) 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/l/05 ATTACHMENT D Page 17 of36 wares Lansing Board of Dispute and Hearing Procedure goWater 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, 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. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 18 of36 WATERRIGHT 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. DRAFT: 6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 19 of36 WATEERa&tLIIGGHT 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), and On-Site Water Mains, except Meter Set and metering equipment,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 Customer Choice Water Service 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 as stated in Rule 15 for each inspection. 4. Deposit and Non-Refundable Contributions for On-Site Water Mains and Large Services A deposit and non-refundable contribution shall be required for any Customer desiring to install On- Site Water Mains or commercial Customer Water Services. The amount of such deposit and non- refundable contribution 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, except no billing or refund will be made if the actual cost is within$100 dollars of the actual cost. 5. Permits The Board will obtain the MDEQ Permit For Water System Construction. The Customer shall be required to obtain all other permits. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 20of36 WATER Lansing Board of Distribution System Extensions so 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 Svstem. 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 determine whether or not any particular Water Distribution Svstem 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 prior to construction, 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. 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. DRAFT: 6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page21 of36 ffwafiiw WATERBLIGHHTT 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 Prop-ram". 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 approved site plan for Board review and approval. Installation of a Water Distribution Svstem 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. Variances from the Board's flow and pressure capacity requirements may be granted in writing by the Board and where applicable,the governing Fire Marshall. Where 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 22 of 36 WATE Lansing Board of Distribution System Extensions Water and Light Water Rule and Regulation 10 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. 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. Fire Hydrants designated as Private Hydrants shall be billed according to Rate Schedule 6 and are the responsibility of the property owner. 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 govermmental 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 and Tree Removal Permits 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 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 Water Distribution System extension including any Water Distribution System 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page23 of36 WATEERRIGIGH�T Lansing Board of Distribution System Extensions Water and Light Water Rule and Regulation 10 In the event the required easements and tree 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). 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 DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 24of36 WATER RBLI� Lansing Board of Distribution System Extensions WX Water and Light Water Rule and Regulation 10 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. DRAFT:6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 25 of 36 WATE`�aucHT 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 t0.1.D. 2. Temporary Water Service Temporary water service is available to contractors and others for construction activities, sewer flushing, festival usage, and bulk tanker fill 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 two inches(2")and larger or unusual connections. Customer Water Services shall be installed from the Water Main to the Customer's building or metering manhole or pit 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 to the meter or meter manhole or pit 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 26 of 36 WATER RR&LIGHT 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 manhole or pit, the Customer shall connect at the outlet of Meter Set. The customer shall install a shut-off valve after the outlet of the Meter Set, normally installed at the inside wall of building to be served.. The customer shall be responsible to install, own and maintain Customer Piping from the outlet of the Meter Set and the customer shall be responsible to install, own and maintain the meter manhole or pit structures which house the Meter Set,except where the Board has retained ownership. 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 prior to construction, 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 Recoveiy"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 Schedule 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 DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 27 of 36 WATER& Lansing Board of Services inWater and Light Water Rule and Regulation 11 (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, except were Customer Owned Hydrants or Fire Services are connected after the Board's metering point. 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 1.1.3.A. B. Charges The Board shall assess a"Fire Hydrant"charge as stated in Rule 1.5 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. S. 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 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. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 28 of 36 WATER&LIGHT 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 unmetered 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. DRAFT: 6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 29 of36 WATERBUGHT Lansing Board of Water Storage Facilities go 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. DRAFT: 6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 30 of36 SNO WATEER LIGHT Lansing Board of Cross Connection go 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, or Customer Piping (internal or external) is too complex to provide for reasonable inspection, or there exist a high potential for future cross connections, 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 DRAFT:6/23/2005 ATTACHMENT D Proposed EFFECTIVE:7/l/05 Page 31 of 36 WATEER&LIGHT Lansing Board of Cross Connection go Water and Light Water Rule and Regulation 14 (3) Waste-treatment plants(both solid and liquid waste) (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. DRAFT:6/23/2005 ATTACHMENT D Proposed EFFECTIVE:7/1/05 Page 32 of 36 wdww WATE uiabR&LIG�HT 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 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" $45/ft On 8" $55/ft On 12" $90/ft On 16" $115/ft Fire Hydrant Installation When requested by Customer Firm Price Quote Up to and Incl. I"Water Service Main-to-Curb Box Stub on previously installed $1,500 per stub plus water mains restoration cost Curb Box-to-Building(Trenched) $675 minimum,$12/ft in excess of 45 feet plus restoration cost Curb Box-to-Building(Bored) $1,300 minimum,$28/ft in excess of 45 feet plus restoration cost Indoor Meter Set—Standard $175 Indoor Meter Set-With Bacldlow Prevention $280 Water Services(BWL Installed) Indoor Meter Set-With Split Irrigation $295 Outdoor Meter Set with Meter pit $1,800 Outdoor Meter Set with Meter pit—Customer S 150 Choice Program(labor only) (Connection Fee applicable) Retrofit of existing service to allow for split $500 irrigation service Charge for setting meter on a split service after $60 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 Outdoor Meter Set With Meter pit—Customer $150 Choice Program(labor only) Spilt Irrigation Service Firm price quote Winter Construction Charge Water Services,2"and under $13/Trench ft Greater than 2"pipe or service Firm price quote December 15—March 31 In addition to normal charge DRAFT: 6/23/2005 Proposed EFFECTIVE: 7/1/05 ATTACHMENT D Page 33 of 36 WATER Aar Lansing Board of Schedule of Fees & Charges Water and Light Water Rule and Regulation 15 WATER FEES"and CHARGES Charge Description When Applied Charge Frozen Meter Charge Upon occurrence For services: Up to 1" _$265 1 % _$615 2" _$795 plus additional labor& material cost if necessary Bulk Water Permit Fee Initial application fee $50 ea Bulk Water Renewal Fee Yearly $25 yearly Consumption Fee For commodity used $commodity charge/ccf (Filled at Hazel Street Yard Hydrant) +chemical charge-calculated according to current General Water Service Rate 2. Hydrant Flow Testing When requested by Customer $245 ea. Residential Service Inspection Each residential service inspection visit $60 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 commercial services Deposit of 5%for inspection, Administration actual cost of inspection that (Customer Choice Program) are less than or exceeding deposit will be reimbursed or billed. Additionally a nonrefundable 3%for engineering and admin for projects based on BWL Estimated construction cost of $100,000 or less Deposit of 4%for inspection, actual cost of inspection that are less than or exceeding deposit will be reimbursed or billed. Additionally a nonrefundable 2%for engineering and admin for projects based on BWL estimated construction cost of >$100,000 $1,400 minimum non refundable fee for construction inspection and $600 minimum non refundable fee for engineering and administration. DRAFT:6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 34 of 36 WATER B�LIGHT Lansing Board of Schedule of Fees & Charges Water and Light Water Rule and Regulation 15 WATER FEES and CHARGES Charge Description When Applied Charge Temporary Hydrant Usage for Within BWL service area for construction use construction,festivals and governmental special use by special Permit Fee per project $150 permit. (A) 1"RPZ backflow device plus $380 if required. Commodity fee $30/month or portion thereof (B) 2"RPZ backflow device plus $720 if required Continued on next page Commodity fee $60/month or portion thereof (C) Other approved backflow prevention Cost based on estimated usage device Temporary Hydrant Usage for Non-compliance fee $250 deposit construction,festivals and governmental special use by special Hydrant wrench $40 permit. Continued from previous page Water Theft Penalty Fee $500 1"occurrence Up to$1500 2"d occurrence Up to$5000 Yd occurrence and permit revocation Festivals,non-profit or otherwise 1" 1-3 days=$100 -includes rental of RPZ 4-7 days=$300 8+days=$500 2" 1-3 days=5250 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 For all new customers unless waived by conditions stated in Rule 7. Water&City Sewer $71 Water Only $27 Security Deposits—Commercial& For all new customers unless waived by conditions 1.5 times average monthly bill Industrial stated in Rule 7. Connect fee 7:30 a.m.—5:30 p.m.weekdays No charge After 5:30 p.m.on weekdays or weekends and $130 holidays Reconnection Fee Non-pay(Normal hours) 7:30am—5:30 pm weekdays $25 Non-pay(Other than normal hours) After 5:30 p.m.on weekdays or weekends and $130 holidays Meter Tampering Any time $130 Missed Appointment,No Show,No After second occurrence $25 access Fee Non Sufficient Funds(NSF)Fee For Non Sufficient Funds on Checks $20 Meter Calibration Charge Customer request meter calibration check is within $70 plus or minus 1.5%of accuracy Charges other than those published Relocations,damages,etc. At cost DRAFT: 6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 35 of36 WATERRIGHT Lansing Board of Schedule of Fees & Charges goWater and Light Water Rule and Regulation 15 DRAFT: 6/23/2005 Proposed EFFECTIVE:7/1/05 ATTACHMENT D Page 36 of36 WATER&LIGHT Lansing Board of go Water and Light Rules and Regulations For Steam Service DRADT: 6/23/2005 PROSED EFFECTIVE:7/1/05 ATTACHMENT E wnre' c® Lansing Board of Table of Contents go Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions....................................................................................................................................................................4 GeneralProvisions.......................................................................................................................................................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 Applicationof Rates..................................................................................................................................................I I General....................................................................................................................................................................11 Resale......................................................................................................................................................................11 Choiceof Rates........................................................................................................................................................12 Billing......................................................................................................................................................................12 MinimumCharges...................................................................................................................................................12 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 DistributionSystem 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..........................................................................................19 Steam Facility Relocations and Removals...............................................................................................................20 Services.......................................................................................................................................................................21 General....................................................................................................................................................................21 DRAFT 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT E Page 2 of28 saffigamewom WA7E Lansing Board of Table of Contents Water and Light SteamService..........................................................................................................................................................21 21 General................................................................................................................................................................ Customer Connections to Board Facilities..........................................................................................................22 CustomerSteam Piping.......................................................................................................................................22 Installation and Maintenance of Steam Services.................................................................................................23 Steam Facility Relocations and Removals...............................................................................................................23 Condensate and Master Trap .....................24 General....................................................................................................................................................................24 Condensate..............................................................................................................................................................24 MasterTrap.............................................................................................................................................................24 Condensate(Surge)Tanks.......................................................................................................................................25 By-pass Valve..........................................................................................................................................................25 System Extension&Service Deposit........................................................................................................................26 General....................................................................................................................................................................26 Distribution System Extension and Customer Steam Service.................................................................................26 CustomerSteam Service Only.................................................................................................................................27 Scheduleof Fees&Charges......................................................................................................................................28 DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/l/05 - ATTACHMENT E Page 3 of 28 WATER Lansing Board of Definitions Water and Light Steam 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. 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. PERSON— Any individual, corporation, partnership, company, limited liability corporation, organization or governmental entity. 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 4 of28 WpTE Lansing Board of General Provisions Water and Light Steam Rule and Regulation 2 General Provisions 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.corn 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 Person 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. This document is intended to cover most situations where standardized policies and practices have been established. No officer, agent or employee of the Board has authority to waive or modify the provisions of this document unless specifically authorized to do so by the Board of Commissioners. The Board of Commissioners may revise this document at any time and may modify or suspend any portion of it temporarily or permanently. DRAFT 6/23/2005 Page 5 of 28 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E onWATERRIGHT Lansing Board of Service Conditions Water and Light Steam Rule and Regulation 3 Service Conditions I. 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; 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 6 of28 WATER 'T Lansing Board of Service Conditions 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. The Board may charge a Connect Fee when the Customer request the service to be made active outside normal business hours as specified in Rule 13. 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 7 of 28 WATEER�&UGGHT Lansing Board of Use of Service goWater 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 8 of28 WATER&LIGHHT Lansing Board of Use of Service RM 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 9 of28 WATER RLIGHTT Lansing Board of Metering on 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 10 of28 WATER 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 owner or operator shall be responsible for payment of purchased steam for resale as required by Rule 7. The Board shall have no obligation to furnish or maintain meters or other facilities for the resale of service by the reselling owner or operator to the occupant. Billing records of the owner or operator may be audited once every 12 to 18 month using generally accepted auditing practices. The audit shall be conducted by the Board or if the Board elects,by an independent auditing firm approved by the Board.The reselling owner or operator shall be assessed a reasonable fee for an audit conducted by the Board. The owner or operator providing the resale shall be responsible for testing of each occupant's meter at least once every 3 years. The accuracy of such meters shall be maintained within 2%. Meters shall be tested only by outside testing services or laboratories approved by the Board. A record of each meter, including testing results, shall be kept by the reselling owner or operator during the use of the meter and for an additional period of one year thereafter. When requested, the reselling owner operator shall submit certified copies of the meter test results and meter records to the Board. The reselling owner or operator shall render a bill once during each billing month to each of the occupants' or tenants in accordance with the appropriate Board Rate Schedule. Every bill rendered by the reselling owner or operator shall specify the following information;The Rate Schedule title, the due date,the beginning and ending meter reading of the billing period and the dates thereof;the difference between the meter readings;the amount due for services and/or commodity use, as applicable to the Rate;subtotal before taxes,sales tax,other taxes where applicable;the amount due for other authorized charges; and the total amount due. The due date shall be 21 days from the date of rendition.The reselling owner operator shall be responsible for all collections and payment disputes for resale occupants. The reselling owner or operator shall supply each occupant with a steam system adequate to meet the needs of the occupant with respect to the nature of service, pressure, and other conditions of service. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 11 of28 WATER&LIGHT Lansing Board of Application of Rates go Water and Light Steam Rule and Regulation 6 If the reselling owner or operator fails to meet the obligations of this rule, the Board will notify the appropriate authorities and after reviewing with the reselling owner or operator, the problem(s) is not resolved,the Board may declare the reselling owner or operator in violation of Rule 2. 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. 6. Property Owuer-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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 12 of28 WATER a�LIGHT 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. 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. The Board will charge a"Non Sufficient Funds Fee"in accordance with Rule 13 for returned checks. 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 A. 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. B. When an error is found to exist in the billing of a contract or service agreement with or governing the Customer,the Board will correct such error to recover or refund the difference between 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 or without an established credit history. The Board shall apply different rules to new Customers signing up for service in accordance with Rule 7A.C. The deposit is DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/l/05 ATTACHMENT E Page 13 of28 WATER Lansing Board of Responsibility for Payment of Bills ow Water and Light Steam Rule and Regulation 7 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. 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 misrepresents their identity. (3) The Customer fails to provide positive identification at the time of applying for service. (4) The Customer has diverted or interfered, in an unauthorized manner, with utility service in the past 6 years. (5) 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, (5) credit card reversal, (6) or other payment method cancellation. (6) The Customer has a prior account that is delinquent within the last 6 years. 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 may not be required to submit a deposit, in any of the following situations: (1) The Customer has previously established an acceptable payment history with the Board on a similar account. (2) The Customer's bill is paid by a governmental agency. (3) The Customer secures a guarantor;the guarantor has an acceptable payment history. (4) The Customer provides an acceptable surety bond. (5) 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. DRAFT 6/23/2005 PROPOSED EFFECTIVE:7/1/05 ATTACHMENT E Page 14 of28 WATERRIGHTT 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 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: 5/25/04 EFFECTIVE:7/l/04 ATTACHMENT E Page 15 of28 WATER Lansing Board of Dispute and Hearing Procedure WN Water 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 16 of28 WATER&LIGHT Lansing Board of Distribution System Extensions go 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. ADOPTED: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 17of28 wATERB�iGH�T Lansing Board of Distribution System Extensions go Water and Light Stearn Rule and Regulation 9 Where a Steam Distribution System reinforcement is required to provide adequate temperature, pressure and flow capacity at the location of the Steam Distribution System 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 and Tree Trimming/Removal Permits 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. 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). 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 18 of28 WATER BEI® Lansing Board of Distribution System Extensions Water and Light Steam 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 Steam Distribution System extension to meet a mutually agreed upon date. ADOPTED: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 19of28 WATE�RBLI� 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 20 of28 WATER Lansing Board of Services &LIGHT 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 21of28 WATER RBLIG�HT 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 22 of28 WATERS Lansing Board of Services on 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: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT E Page 23 of28 WATEERRIG�HTT 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 24 of28 WATEER&GHT Lansing Board of Condensate and Traps WM 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 25of28 WATER&LIGHT Lansing Board of System Extension & Service Deposit 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%z) 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 26 of 28 WATER Lansing Board of System Extension & Service Deposit OWN 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: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 27of28 WATE�RRIG�HT Lansing Board of Schedule of Fees & Charges noWater and Light Steam Rule and Regulation 13 Schedule of Fees& Charges STEAM FEES and CHARGES Charge Description When Applied Charge Security Deposits—Residential For all new customers unless waived by conditions $139 stated in Rule 7. Security Deposits—Commercial& For all new customers unless waived by conditions 1.5 times average monthly bill Industrial stated in Rule 7. Connect fee 7:30 a.m.—5:30 p.m.weekdays No charge After 5:30 p.m.on weekdays or weekends and $130 holidays Reconnection fee Non-pay(Normal hours) 7:30 a.m.—5:30 p.m.weekdays $75 Non-pay(Other than normal hours) After 5:30 p.m.on weekdays or weekends and $130 holidays Meter Tampering Any time $130 Missed Appointment,No Show,No After second occurrence $25 access Fee Non Sufficient Funds(NSF)Fee For Non Sufficient Funds on Checks $20 Charges other than those published Relocations,damages,etc. At cost ADOPTED: 5/25/04 EFFECTIVE:7/1/04 ATTACHMENT E Page 28 of 28 WATERRIGHHT Lansing Board of Water and Light Rules and Regulations For Chilled Water Service DRAFT 6/23/2005 PROPOSED EFFECTIVE: 7/01/05 ATTACHMENT F WATER R�&LI�GHT Lansing Board of Table of Contents go Water and Light TABLE OF CONTENTS PAGE NUMBER Definitions....................................................................................................................................................................4 GeneralProvisions.......................................................................................................................................................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 Steam Quality and Disturbances................................................................................................................................8 ImproperUse and Tampering....................................................................................................................................9 Metering.....................................................................................................................................................................10 General....................................................................................................................................................................10 Sizing/Installation/Ownership.................................................................................................................................10 EquipmentLocation................................................................................................................................................10 DamagedMeter.......................................................................................................................................................10 Applicationof Rates..................................................................................................................................................11 General....................................................................................................................................................................I I Resale......................................................................................................................................................................I I Billing......................................................................................................................................................................12 MinimumCharges...................................................................................................................................................12 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 EconomicDevelopment Offsets..........................................................................................................................18 Easements............................................................................................................................................................18 Non-Standard Equipment....................................................................................................................................Is Non-Standard Construction.................................................................................................................................18 OtherFacilities....................................................................................................................................................18 Construction Date of Distribution System Extension..........................................................................................19 Steam Facility Relocations and Removals...............................................................................................................19 Services.......................................................................................................................................................................20 General....................................................................................................................................................................20 SteamService..........................................................................................................................................................20 DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 2 of23 WATE�� Lansing Board of Table of Contents Water and Light General................................................................................................................................................................20 Customer Connections to Board Facilities..........................................................................................................21 CustomerSteam Piping.......................................................................................................................................21 Installation and Maintenance of Steam Services.................................................................................................21 Steam Facility Relocations and Removals...............................................................................................................21 System Extension&Service Deposit........................................................................................................................22 General....................................................................................................................................................................22 Distribution System Extension and Customer Steam Service.................................................................................22 Customer Steam Service Only.................................................................................................................................22 Scheduleof Fees&Charges......................................................................................................................................23 DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 3 of23 WATE"Ham 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 includes pipes, fittings, valves, associated structures and the like, used as a part of or in connection with a chilled water installation. PERSON— Any individual, corporation, partnership, company, limited liability corporation, organization or governmental entity. 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. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 4 of 23 WATEER&LIGHT Lansing Board of General Provisions Water and Light Chilled Water Rule and Regulation 2 General Provisions 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 Person 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. This document is intended to cover most situations where standardized policies and practices have been established. No officer, agent or employee of the Board has authority to waive or modify the provisions of this document unless specifically authorized to do so by the Board of Commissioners. The Board of Commissioners may revise this document at any time and may modify or suspend any portion of it temporarily or permanently. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 5 of23 WATER Lansing Board of Service Conditions in 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. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 6 of23 WATER LIGHHT 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. The Board may charge a Connect Fee when the Customer request the service to be made active outside normal business hours as specified in Rule 12. 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. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 7 of 23 WATE�R&LIGIGHTT Lansing Board of Use of Service so 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. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 8 of23 WATE R RIGHT Lansing Board of Use of Service go 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 the Board. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 9 of 23 WATER&LIGHT Lansing Board of Metering noWater 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. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 10 of23 WATE Lansing Board of Application of Rates 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 owner or operator shall be responsible for payment of purchased chilled water for resale as required by Rule 7. The Board shall have no obligation to furnish or maintain meters or other facilities for the resale of service by the reselling owner or operator to the occupant. Billing records of the owner or operator may be audited once every 12 to 18 month using generally accepted auditing practices. The audit shall be conducted by the Board or if the Board elects, by an independent auditing firm approved by the Board. The reselling owner or operator shall be assessed a reasonable fee for an audit conducted by the Board. The owner or operator providing the resale shall be responsible for testing of each occupant's meter at least once every 3 years. The accuracy of such meters shall be maintained within 2%. Meters shall be tested only by outside testing services or laboratories approved by the Board. i� reCvid of each nieier, including testing results, shall be kept by the reselling owner or operator during the use of the meter and for an additional period of one year thereafter. When requested, the reselling owner operator shall submit certified copies of the meter test results and meter records to the Board. The reselling owner or operator shall render a bill once during each billing month to each of the occupants' or tenants in accordance with the appropriate Board Rate Schedule. Every bill rendered by the reselling owner or operator shall specify the following information; The Rate Schedule title, the due date, the beginning and ending meter reading of the billing period and the dates thereof;the difference between the meter readings; the amount due for services and/or commodity use, as applicable to the Rate;subtotal before taxes, sales tax, other taxes where applicable;the amount due for other authorized charges; and the total amount due. The due date shall be 21 days from the date of rendition. The reselling owner operator shall be responsible for all collections and payment disputes for resale occupants. The reselling owner or operator shall supply each occupant with a chilled water system adequate to meet the needs of the occupant with respect to the nature of service,and other conditions of service. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 11 of23 WATE!RBLIGHT Lansing Board of Application of Rates go Water and Light Chilled Water Rule and Regulation 6 If the reselling owner or operator fails to meet the obligations of this rule, the Board will notify the appropriate authorities and after reviewing with the reselling owner or operator, the problem(s) is not resolved,the Board may declare the reselling owner or operator in violation of Rule 2. 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. DRAFT: 6/23/2005 PROPOSED EFFECTIVE: 7/1/05 ATTACHMENT F Page 12 of23 WATEHT 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. The Board will charge a"Non Sufficient Funds Fee"in accordance with Rule 12 for returned checks. 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 A. 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. B. When an error is found to exist in the billing of a contract or service agreement with or governing the Customer, the Board will correct such error to recover or refund the difference between 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 or without an established credit history. The Board shall 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. To determine the deposit for new commercial and industrial Customers, the Board will estimate the average monthly bill and apply the 1.5 factor. ADOPTED:5/25/04 EFFECTIVE:7/l/04 ATTACHMENT F Page 13 of23 wnTe Lansing Board of Responsibility for Payment of Bills Water and Light Chilled Water Rule and Regulation 7 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. 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 misrepresents their identity. (3) The Customer fails to provide positive identification at the time of applying for service. (4) The Customer has diverted or interfered, in an unauthorized manner, with utility service in the past 6 years. (5) 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, (5) credit card reversal, (6) or other payment method cancellation. (6) The Customer has a prior account that is delinquent within the last 6 years. 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 may not be required to submit a deposit, in any of the following situations: (1) The Customer has previously established an acceptable payment history with the Board on a similar account. (2) The Customer's bill is paid by a governmental agency. (3) The Customer secures a guarantor with a similar account and an acceptable payment history. (4) The Customer provides an acceptable surety bond. (5) 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. ADOPTED:5/25/04 EFFECTIVE:7/1/04 ATTACHMENT F Page 14of23 WATE`3aucHT Lansing Board of Dispute and Hearing Procedure in 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: 5/25/04 EFFECTIVE: 7/l/04 ATTACHMENT F Page 15 of23 WATERRIGHT Lansing Board of Dispute and Hearing Procedure on 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: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page 16 of23 WATER&LIGHT Lansing Board of Distribution System Extensions so 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 II 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: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page 17 of 23 WATEERR&&LIGGHTT 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 and Tree Trimming/Removal Permits 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. 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 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). 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: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page 18 of23 WATER Lansing Board of Distribution System Extensions MW 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, plus 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: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page19of23 WATEERi&LIGHT 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 full 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: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page21 of23 WATER&UGHT Lansing Board of Schedule of Fees & Charges go Water and Light Chilled Water Rule and Regulation 12 Schedule of Fees & Charges CH[LLED WATER FEES and CHARGES Charge Description When Applied Charge Security Deposits—Commercial& For all new customers unless waived by conditions 1.5 times average monthly bill Industrial stated in Rule 7. Connect fee 7:30 a.m.—5:30 p.m.weekdays No charge After 5:30 p.m.on weekdays or weekends and $130 holidays Reconnection fee Non-pay(Normal hours) 7:30 a.m.—5:30 p.m.weekdays $75 Non-pay(Other than normal hours) After 5:30 p.m.on weekdays or weekends and $130 holidays Meter Tampering Any time $130 Missed Appointment,No Show,No After second occurrence $25 access Fee Non Sufficient Funds(NSF)Fee For Non Sufficient Funds on Checks $20 Charges other than those published Relocations,damages,etc. At cost ADOPTED: 5/25/04 EFFECTIVE: 7/1/04 ATTACHMENT F Page 23 of 23 Human Resources 1232 Haco Drive WATER&LIGHT P.O.Box 13007 Lansing,MI 48901 517.702.6262 www.lbwl.com ATTACHMENT G Skill Family Range Adjustments for FY 2006 for Non-Bargaining Unit Employees Skill.Famil FY 2006 Range Adjustment Customer Service.&Office 0.0% Directors 0.0% Engineering &Scientific +3.0% Finance& Purchasing 0.0% Human Resources&Legal 0.0% Information Technology 0.0% Marketing &Communication 0.0% Technical 0.0% Performance Increase Matrix for FY 2006 for Non-Bargaining Unit Employees Salary Increase Percentage Appraised Level of Performance'' Range Power Performer' Maximum of 7.5% 451 -500 Outstanding 4.5% or 5.0% 376 -450 Exceeds Expectations 3.5% or 4.0% 276-375 Meets'Expectations 2.0%, 2.5% or 3.0% 226 -275 Needs Improvement 0.5% or 1.0% 225'or less Fails to Meet Expectations 0.0% 'Power Performer: In order to be eligible to receive a "Power Performer' award, an employee's performance level must be "Outstanding" and the employee must be nominated for the Power Performer Program by his or her process Director. The Process Council jointly reviews nominees and makes recommendation for the General Manager's approval. The performance award can be up to a maximum of 7.5%. Power Performers receive 100% of their award to their base salary not to exceed their range maximum—whether or not it places their base salary above the market rate or the base pay cap. Power Performer awards may be distributed to up to 10 percent of the employees in each process. Note: FY 2004 was the last year employees were eligible to earn variable pay above their pay range maximum. As of FY 2001, 53 employees were above their pay range maximum. Currently,with the adoption of this resolution, 4 employees will be above their pay range maximum and will not be eligible to receive variable pay. These employees will still receive a performance appraisal. ATTACHMENT H i Projected Income Statement (by Utility) CHILLED r $(000) ELECTRIC WATER STEAM WATER TOTAL PROJECTED INCOME STATEMENT FY 2006 SALES (mwh,ccf,mlb,ton-hrs) 3,345,000 10,747,000 1,093,000 11,931,000 OPERATING REVENUE 185,015 24,958 13,376 4,973 228,322 Operation& Maintenance Expense (159,174) (21,720) (10,695) (1,734) (193,322) Depreciation Expense (21,211) (4,000) (1,677) (1,722) (28,610) TOTAL OPERATING EXPENSE (180,385) (25,720) (12,372) (3,456) (221,932) OPERATING INCOME (Loss) 4,630 (762) 1,004 1,517 6,390 Payment to City (7,401) (998) (535) (199) (9,133) Other Non-Operating Income 2,946 2,175 272 0 5,393 Other Non-Operating Expense (1,811) 707 163 1( ,934) (4,615) NET INCOME (Loss) (1,636) (292) 579 (616) (1,966) Return on Net Assets(3/31/05 base) -0.6% -0.2% 1.7% -2.0% -0.4% Excludes Central Utility Complex revenue, depreciation and debt service. BWL income from CUC included in other income. WATER&LIGHT 10 s, SUMMARY ATTACHMENT H ANNUAL CAPITAL ADDITIONS,PLANNED CAPITAL PROJECTS&BONDED CAPITAL PROJECTS FISCAL YEAR 2005-2006 BUDGET Final BOARD OF WATER AND LIGHT Pagel of 18 Total Expenditures Expenditures Total Fiscal Year 2005-2006 Funding Project As Of Fiscal Year Project Cash Bond Dollars in (000's) Estimates 6/30/05 2005-06 Balances Flow Fund CIA Total ELECTRIC Sub-Total Revenue 7,536 0 7,536 0 6,240 0 1,296 7,536 Sub-Total Non-Revenue 32,142 8,315 14,959 8,868 13,372 0 1,587 14,959 TOTAL ELECTRIC 39,678 8,315 22,495 8,868 19,612 0 2,883 22,495 WATER Sub-Total Revenue 8,200 0 8,200 0 0 0 8,200 8,200 Sub-Total Non-Revenue 46,653 113 11,336 35,204 10,666 0 670 11,336 TOTAL WATER 54,853 113 19,536 35,204 10,666 0 8,870 19,536 STEAM Sub-Total Revenue 15 0 15 0 15 0 0 15 Sub-Total Non-Revenue 781 105 676 0 676 0 0 676 TOTAL STEAM 796 105 691 0 691 0 0 691 CHILLED WATER Sub-Total Revenue 274 0 274 0 274 0 0 274 Sub-Total Non-Revenue 0 0 0 0 0 0 0 0 TOTAL CHILLED WATER 274 0 274 0 274 0 0 274 COMMON Sub-Total Revenue 846 (14) 600 260 600 0 0 600 Sub-Total Non-Revenue 3,393 1,776 1,617 0 1,617 0 0 1,617 TOTAL COMMON 4,239 1,762 2,217 260 2,217 0 0 2,217 CAPITAL BUDGET SUMMARY Sub-Total Revenue 16,871 (14) 16,625 260 7,129 0 9,496 16,625 Sub-Total Non-Revenue 82,969 10,309 28,588 44,072 26,331 0 2,257 28,588 TOTAL BUDGET 99,840 10,295 45,213 44,332 33,460 0 11,753 45,213 NOTE: Budgeted Capital Expenditures = $45,213 less $11,753(CIA) _$33,460 less $0(Bond Funds) _$33,460 ^ CIA=Contribution in Aid PRELIMINARYMINUTES, SUBJECT TO BOARD APPROVAL ON 5124105 MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Tuesday, March 22, 2005 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Gary L. Calkins, Ronald C. Callen, Tim Haggart, Ifield Joseph, Santiago Rios, Robin M. Smith Absent: Commissioner Nancy Wonch _ -y The Secretary declared a quorum present. Chairperson Smith called the meeting to order at 5:30 p.m. - ' APPROVAL OF MINUTES Motion by Commissioner Joseph, seconded by Commissioner Haggart, to approve the minutes of the regular meeting held January 25, 2005. 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. Glen Kirk, Finance Director for the City of Lansing, asked the Board for another thirty days to complete final details of a development agreement for the BWL riverfront property at Shiawassee and Grand Avenue, known as the Coal Storage property. At the regular meeting in January 2005, the Board approved a resolution requiring River Street Triangle, LLC (developer) to pay a non-refundable $100,000 deposit as a condition for the developer to retain its option through June 2005, which is the date the option is due to expire. Mr. Kirk noted that there is much to be gained from the City by having the proposed riverfront residential housing developed on the site. The project would generate additional property and income taxes. Patrick Reid, attorney for River Street Triangle, LLC, also urged the Board to grant a thirty-day extension to finalize details to close the transaction on the Coal Storage property. He said the developer wants to start construction on the riverfront residential housing project this spring. Mr. Reid recognized developer Joel Ferguson who was present in the audience to respond to any questions the Commissioners may have. Draft Minutes—subject to Board Approval on 5124105 Board Meeting Page 25 March 22,2005 Joseph Davis, Business Manager for IBEW Local 352, spoke regarding the resolution under consideration concerning changes to the pensions of Defined Benefit Plan pensions. He noted that although the union does not negotiate for pensioners, it does negotiate for active members who are covered by pension plans and that is why the time line referenced in the attachment of the November 25, 1996 Personnel Committee Report was set the way it was. Mr. Davis urged the Board to maintain the same timeline and to review the cost of living issue for Defined Benefit pensioners on a regular basis. James Chandler, BWL Lineworker expressed concern with the BWL's new strategic plan. He said he disagrees with the perceived organizational strengths and weaknesses pertaining to operational and manpower efficiencies. He stated that if he is going to be required to work under conditions that are going to jeopardize his safety, then he is gong to have to step back and rely on the MIOSHA Rules to make sure he works safely around high voltage, hazardous conditions. He suggested that if he is going to get moved around to where he becomes minimally responsible for what happens out in the field, then he expects the same things to be done in-house, such as outsourcing financial accounting. COMMUNICATIONS Letter from Nancy Duncan resigning as Commissioner from the Second Ward for the Board of Water and Light effective February 28, 2005. Placed on file. E-mail from Howard Gladding, 3506 Laureate Drive, Holt, dated March 22, 2005, expressing concern with the proposed water rate increase under consideration. Placed on file. COMMITTEE REPORTS Resolution 2005-3.1 FINANCE COMMITTEE 'REPORT A meeting of the Finance Committee of the Board of Water and Light was held at the Executive Offices, Lansing, beginning at 5:30 p.m., Tuesday, February 15, 2005. Committee Chair Nancy Duncan called the meeting to order and asked the secretary to call the roll. The following members of the Finance Committee were present: Commissioners Ron Callen, Nancy Duncan, Ifield Joseph, and Robin Smith. Chair Duncan informed the Committee that for personal reasons, she is resigning her position as Commissioner from the Second Ward for the Lansing Board of Water and Light (BWL). She expressed her appreciation for the opportunity to serve the residents of Lansing and the customers of the BWL and wished the Commissioners the best. Draft Minutes—subject to Board Approval 0715124105 Page 26 Board Meeting March 22,2005 The Committee along with General Manager Novick and staff thanked Commissioner Duncan for her wise counsel and service to the BWL. PUBLIC COMMENT There were no public comments. FINANCIAL ACCOUNTING STATEMENT (FAS) NO. 71 ISSUES Senior Vice President of Finance Dennis McFarland reported that in 2003, staff made a commitment to the Board of Commissioners that all future FAS No. 71 related items to be recorded in the financial statements would be approved by the Board prior to their use. FAS No. 71 provides guidance in preparing general purpose financial statements for most utilities. He noted that if costs are to be recovered in the future, those costs should be capitalized as regulatory assets. If current recovery is provided for costs expected to incur in the future, those costs should be recorded as a regulatory liability. The goal is to match costs and revenues. Mr. McFarland clarified management's current accounting treatment for all transactions subject to FAS No. 71 accounting. 1. Accounting for the Central Utilities Complex (CUC): Certain items, such as revenue received from General Motors for debt service payment, are offset by the amortization of the CUC investment. The current effect in net income is 5% profit margin or $444,356 in FY 2004. This current treatment of FAS No. 71 was approved by Resolution 2003-8-3. 2. Contribution in Aid of Construction (CIAC) for Electric and Steam: Electric and Steam services to large projects may require the developer to pay a CIAC based on the BWL's estimated construction costs. Rather than recognizing that as revenue, it is credited to the asset, thus reducing the amount of depreciation on a going forward basis. This complies with Federal Energy Regulatory Commission (FERC) guidelines. This current treatment of FAS No. 71 was approved by Resolution 2003- 8-3. 3. Environmental Remediation of the North Lake Lansing Road Landfill: FAS No. 71 permits BWL to record the estimated liability as a deferred expense. This deferral allows the BWL to charge operating expense as the actual costs are paid out and recovered in rates. This current treatment of FAS No. 71 was approved by Resolution 2004-11-2. Mr. McFarland presented the following recommendations for applying FAS No. 71: 1. Energy Cost Adjustment (ECA) a. Defer difference in energy cost and amount recovered in the rates b. Normalization of ECA revenues c. Track ECA to assure full recovery of eligible costs Draft Minutes—subject to Boarcl Approval on 5124105 Board Meeting Page 27 March 22,2005 2. Contribution in Aid of Construction (CIAC) for Water a. Credit CIAC against the asset b. Allow for the same treatment of CIAC for Water as for Electric and Steam. Mr. McFarland reported that in the past, management applied FAS No. 71 to the capitalization of interest during construction. Justification cannot be made for using FAS No. 71 on a going forward basis for capitalization of interest. He recommended discontinuing FAS No. 71 for this accounting application. Staff is currently in the process of developing a procedure to support the capitalization of interest related to large projects. Following discussion, the Finance Committee voted to advance this recommendation to the Board for action at the March 22°d Board meeting. Voting Aye: Callen, Duncan, Joseph, Smith Voting Nay: None Absent: None BUDGET ASSUMPTIONS Vice President of Finance McFarland presented the Financial Plan and FY 2006 budget assumptions. He reported that the financial goals are to maintain a strong credit quality, ensure adequate liquidity, maintain rate competitiveness, efficient and appropriate use of capital, and financially independent utilities. Beginning July 1, 2005, staff will report on four separate utilities with a revised methodology for allocating overhead costs. Mr. McFarland compared the sales forecast for FY 2006 over FY 2005 utility FY'06 Forecast FY'05 Forecast % '06 Budget , to '05 Budget, Electric—Retail 2,532,000 2,455,000 3.0% Electric—Wholesale 604,000 681,000 -12.7% Electric(mwh) 3,136,000 3,136,000 0.0% Water(ccf) 11,187,741 11,139,870 0.4% Steam (mlb) 2,057,000 2,056,000 0.0% Chilled Water tnhr 11,931,000 11,931,000 0.0% Electric: ■ Residential/Commercial/Industrial (excluding General Motors) on historical growth rates normalized for weather ■ Trended growth rates: Residential= 1.5%, Commercial=2.05%, Industrial=0.60% ■ GM: includes retirements and line reductions at Plants 1 & 6, increased production at Mid- MI Stamping Plant ■ Wholesale based on remaining generation availability Water: ■ Residential/Commercial/Industrial based on historical growth rates with deductions for line reductions at GM Plants 1 and 6 • Trended growth rates: Residential=0.98%, Commercial=0.19%, Industrial=0.0% Draft Minutes—subject to Board Approval on 5124105 Page 26 Board Meeting March 22,2005 ■ Wholesale based on historical and/or contractual commodities Steam: ■ Residential/CommerciaVIndustrial based on historical growth rates with deductions for line reductions at GM Plants 1 and 6 Chilled Water: ■ Based on full year of all buildings on line,normalized for weather Revenue assumptions for FY'06 were presented: • Rate increases effective July 1, 2005 for each utility: - Electric: 3% - Water: 6.5% - Steam (Central District): 33% • Chilled Water at minimum bill levels • 2% increase in Electric Wholesale prices Operating expense assumptions include: • No increase in full-time employees. Given forecasted retirements at BWL and the time it takes to fill the positions, larger cost centers will budget for vacancies at the rate of about 10%. • Salary increases for the bargaining unit are based on the union contract and non-bargaining increases are based on market study to be presented to the Human Resources Committee in April for Board action in May. • Increase in health care cost of 11% for insurance premiums and Medicare reimbursements. This includes the premium sharing that is currently in place for active employees. • Funding of retiree health care (GASB 45). The recently published GASB standard requires that the accrued liability for non-pension benefits for retirees, such as retiree health care cost,be amortized to expenses, similar to pension benefits. Currently that figure stands at an estimated $181 million for the BWL. Amortizing the obligation over a 30-year period would result in an additional $5 million dollars of annual expenses. • Reallocation of discretionary resources. Capital expenditures: • Revenue producing capital additions to be justified by cost/benefit analysis • Capital targeted an annual depreciation expense (FY 2006 budget— $29 million) • Ten-Year Lead Service Replacement Program Other considerations include: • BWL participation in the Clean Water State Revolving Fund (SRF) funding • Payment in Lieu of Taxes (PILOT) to remain at 4% Draft Minutes—subject to Board Approval on 5124105 Board Meeting Pagc 29 March 22,2005 By consensus the Committee concurred with the budget assumptions and directed staff to proceed with a proposed FY 2006 Budget. A detailed O&M and Capital Budget will be presented to the Finance Committee in May for deliberation and recommendation to the Board. General Manager Sandy Novick reported that staff is preparing a rate case strategy presentation and a draft communication plan for various audiences on proposed rate increases for the Committee of the Whole meeting in March. AUDIT CHARTER Internal Auditor Holloway reviewed a draft Internal Audit Charter. An Internal Audit Charter defines the mission, purpose, independence, authority, responsibility and scope, and standards of internal audit. Mr. Holloway reported that the Board last approved an audit charter in October 1995. Since that time, significant changes have taken place within the audit profession, partly driven by the Enron and WorldCom scandals. These changes revised the International Standards for the Professional Practice of Internal Auditing by expanding the role of internal audit to include the evaluation of risk management and evaluation of internal controls and governance processes which expands it beyond traditional controls. Mr. Holloway presented a Draft Internal Audit Charter (Attachment A) for consideration, which is based on recommendations by the Institute of Internal Auditors. Mr. Holloway noted that he is in the process of finalizing a Records Retention Plan for his department to be distributed to the Commissioners at the next meeting. Following discussion, the Finance Committee voted to recommend that the Board approve the Internal Audit Charter. This item will advance to the Board for action on March 22, 2005. Voting Aye: Callen, Duncan, Joseph, Smith Voting Nay: None Absent: None AUDIT PLAN Mr. Holloway reported that in order to develop an annual audit plan, internal audit standards require that the audit plan be based on risk assessment. He reported on recent major milestones that have shaped our current view of risk assessments. These include: Sarbanes-Oxley (SOX) Act of 2002, which imposed new financial reporting requirements on listed companies. SOX requires evaluation of internal controls over financial reporting based on a suitable framework. Existing internal control frameworks include required risk identification and management. International Standards for the Professional Practice of Internal Auditing. The recently revised standards provide a new definition of internal audit, which include that internal audit activity should evaluate and improve the organization's risk management, control, and governance Draft Minutes—subject to Board Approval on 5124105 Page 26 Board Meeting March 22,2005 processes. An annual audit plan was also included based upon an annual risk assessment and additional risk-related guidelines. COSO Enterprise Risk Management (ERM) — Integrated Framework. The Committee of Sponsoring Organizations (COSO) ERM framework defines essential components, suggests a common language, and provides clear direction and guidance for enterprise risk management. Other milestones include (1) FASB 133 - This standard requires the method of evaluating the effectiveness of Derivative Instruments and Hedging Activities to be consistent with the entity's approach to managing risks; (2) GASB 40 - Deposit and Investment Risk Disclosures modified standards requiring communications of these risks; and (3) Basel Accords—Impacts the banking industry and is effective in 2007 among the ten largest banks which operate internationally. Risk identification and management is required. Mr. Holloway then reviewed the results of his risk assessment based on interviews with Commissioners and management. The top ten risks at a macro and micro levels were discussed. He also reviewed his Internal Audit Plan (Attachment B) for the remainder of FY 2005. Mr. Holloway reminded the Committee that special projects could surface requiring a slight modification to the plan. The Committee requested information on the concepts of control and governance. Mr. Holloway indicated that he would forward this information to the Commissioners. Following discussion, the Finance Committee voted as follows to recommend that the Board approve the Internal Audit Plan for the remainder of FY 2005. This item will advance to the Board for action on March 22, 2005. Voting Aye: Callen, Duncan, Joseph, Smith Voting Nay: None Absent: None There being no further business, the Finance Committee adjourned at 7:39 p.m. Respectfully submitted, Nancy Duncan, Chair Finance Committee Motion by Commissioner Joseph, seconded by Commissioner Haggart, to receive the report. Action: Carried unanimously. Resolution 2005-3-2 U HUMAN RESORCES COMMITTEE REPORT A meeting of the Human Resources Committee of the Board of Water and Light was held at the Executive Offices, Lansing, beginning at 4:00 p.m., Thursday, February 24, 2005. Committee Chair Tim Haggart called the meeting to order and asked the secretary to call the roll. The following members of the Human Resources Committee were present: Commissioners Gary Draft Minutes—subject to Board Approval on 5124105 Board Meeting Page 31 March 22,2005 Calkins, Tim Haggart, Santiago Rios, and Nancy Wonch. Also present was Commissioner Robin Smith. PUBLIC COMMENT BWL retiree Ron Byrnes, representing the Retirees' Pension and Benefits Committee, urged the Commissioners to consider the facts presented in letters the group submitted dated January 18 and February 4, 2005. He asked for a decision that would be fair to everyone. PENSION COLA ISSUE Chair Haggart asked General Manager Sanford Novick to give an overview of the documents included in the committee packet concerning the Pension COLA matter. The materials included the Committee of the Whole resolution, dated January 11, 2005, which was referred to the Board for consideration on January 25, 2005. The Board tabled the Resolution regarding the process of recommending changes to retirees' pension, pending further study and discussion with staff. Also, the Board Chair referred this issue to the Human Resources Committee for review and recommendation. Pertinent documents included in the packet were: ■ A graphical representation of how primary cash flows and what happens if money flows out of the Defined Benefit (DB) Pension Plan Trust. ■ Investment summary of the DB Plan since 1998 and schedule of funding progress. ■ Investment summary of the Post-Retirement Benefit Plan (VEBA) since 2000 and schedule of funding progress. ■ Historical Retiree Health Care Expenses since 2000 and forecast for 2005 and 2006. ■ Sections of agreements between BWL and IBEW Local 352 effective November 1, 1996 and November 1, 1999 relevant to retirement pension. ■ A letter from Ron Byrnes, Chair of the Retiree Pension and Benefit Committee, dated February 4, 2005, regarding DB cost of living consideration. (It was explained that as of year-end 2004, BWL annual disbursements to 510 DB retirees was $7.8 million. In addition, there are 74 active employees in the DB plan and 23 individuals that have vested interests in the plan but are not currently collecting benefits. Over the last three years, 2001-04, the CPI has risen about 6.5%. If a full inflationary adjustment of 6.5% were granted, the annual DB Pension expense would increase approximately $500,000 per year. In time, another 100 individuals would begin drawing benefits, which would increase costs by approximately$100,000 per year if their benefits were adjusted correspondingly. The Committee engaged in lengthy discussion on the question as to whether the Board is contractually obligated to continue the three-year review referenced in a document entitled: Draft Minutes—subject to Board Approval on 5124105 Page 26 Board Meeting March 22,2005 "Pension Settlement Issues" dated November 25, 1996. It was concluded that that there was no contractual obligation to review and/or adjust retiree pensions. It can be assumed that the language did not become a part of the union contract. Although there is a history of periodically reviewing and either adjusting retiree pensions or maintaining their status quo, the Committee determined that the BWL's current financial condition and projections of revenue and expenses presented by management at the January Committee of the Whole meeting indicate that such an adjustment would not be prudent. Further it was agreed that the Board has the right to change both what past Boards have done and future Boards have the right to change what this current Board has done. (Commissioner Wonch entered the meeting at 4:40 p.m.) The Committee asked whether a procedure could be developed by staff that would describe the process, rationale and impact when considering changes to retirees' pensions. The Commissioners suggested using the memo prepared by Internal Auditor Glenn Holloway, dated February 11, 2005 as a template for compiling useful information. A suggestion was also made for staff to survey other utilities in Michigan to compare how others are addressing pension adjustments and health care premiums in our industry. Further, it was proposed that within thirty days after the 2006 union contract is ratified, that management evaluate expenses and revenues including the BWL's position with VEBA funding and health insurance liability to recommend whether the BWL's financial position supports retiree pension adjustments. Commissioner Wonch made a motion to bring to the Board the Committee's recommendation in the form of a resolution that addresses three parts: l. That the Board is not contractually obligated to continue the three-year pension adjustment review process. 2. That the Commissioners have given consideration for a COLA pension adjustment and determined that an adjustment is not financially prudent at this time. 3. That a good process be established for future Boards to use to determine if pension adjustments are warranted. The Human Resources Committee voted as follows to recommend that the Board approve at its next meeting a resolution to formalize the three points listed above. This item will be on the Agenda under Resolutions for the March 22rid Board meeting. Voting Aye: Haggart, Calkins, Rios, Wonch Voting Nay: None Absent: None Other: Commissioner Smith attended as an alternate member. Draft Minutes—subject to Board Approval on 5124105 Board Meeting Page 33 March 22,2005 PUBLIC COMMENT BWL retiree Ron Byrnes thanked the Committee for setting forth the groundwork for fixture Boards to advance forward when considering retiree benefit issues. BWL retiree Max Zemer inquired about the composition of the BWL Pension Fund Trustees. Commissioner Wonch responded that the Trustees of the Defined Benefit Plan and Trust are all the Commissioners of the BWL. CONSULTANT AGREEMENT WITH FORMER INTERNAL AUDITOR At the January 25, 2005 board meeting, some questions were raised related to the consulting agreement the Board has entered into with the former Internal Auditor. They asked for background information to determine if appropriate policies are in place to protect BWL records. This matter was referred to the Human Resources Committee to discuss the Board's practice of issuing contracts. Commissioner Rios noted concern he has with the Board's process of issuing contracts with an outside consultant. He said that a procedure is needed with clear direction as to who has oversight and approval responsibilities to ensure appropriate check and balances are in place. Commissioner Calkins and Smith stated that it would be beneficial for all the Commissioners to be kept informed on the progress of the consultant's professional services. Commissioner Wonch discussed the rationale for the contract and added that it was necessary relative to a specific lawsuit. The consultant has generated savings to the BWL in legal fees by virtue of her expertise and institutional memory from her past employment with the BWL. With respect to BWL records, Commissioner Wonch stated that the consultant only has "copies" of documents required to work on the assigned special project. Following discussion, Commissioner Rios suggested a section in the Board's Rules of Procedure on retaining outside consultants and the Board of Commissioners' oversight responsibilities. The Committee agreed to refer the issue of retaining outside consultants by the Board of Commissioners to the Committee of the Whole at which the Board's Rules of Procedure is an agenda item for discussion at the March 10, 2005 meeting. FOURTH QUARTER PERFORMANCE REPORTS FOR THE DEFINED BENEFIT PENSION FUND AND THE VEBA RETIREE BENEFIT PLAN AND TRUST Senior Vice President of Finance Dennis McFarland reported on fourth quarter results for the DB Pension Fund and the VEBA Retiree Benefit Plan and Trust. (The complete report is on file with the Secretary's Office.) As of December 31, 2004, the DB Pension Fund had assets of about $129 million, which is down about $5 million from 2003 due to current year benefits paid to retirees of about $9 million and the VEBA transfer of approximately $5 million, which more than offset the investment range for the year. Mr. McFarland noted that the asset allocation for cash is a bit over-weighted because $5 million set aside for one of the small cap managers was not transferred until February 1, 2005 due to cash timing issues. The total fund generated a Draft Minutes—subject to Board Approval on 5124105 Page 26 Board Meeting March 22,2005 return of 8.1% for the year and 5.5% for the five-year period. There was mixed performance relative to benchmarks, but positive relative to the broad market. He also reported that the DB funding status has not changed since the last report because actuarial studies are conducted annually as of February; consequently, before the next Human Resources Committee.meeting, an updated report on the funded status will be available for review. Mr. McFarland reported on the fourth quarter results of the Voluntary Employee Benefit Administration (VEBA): Retiree Benefit Plan and Trust. As of December 31, 2004, the VEBA was up almost $25 million compared to $16 million for the same period in 2003, mostly due in part to a transfer from the DB Pension Plan to the VEBA trust and investment earnings on the VEBA for the year. Mr. McFarland explained that the asset allocation for equities is over- weighted because of not having submitted a revised asset allocation policy for the VEBA at the same time the Pension Fund Trustees' revised the DB Plan Investment Policy, changing the asset allocation, on November 23, 2004. Staff will make a recommendation to the Pension Fund Trustees in the fall for a change in the VEBA asset allocation similar to the DB Pension Plan. Mr. McFarland reported that the one-year return on fixed income for the VEBA was 8.2%, which outperformed the Lehman Brothers Aggregate Index of 4.3%. The equity investments returned 15.8% for the one year compared to the Russell 1000 Index of 11.4%. He noted that the unfunded actuarial accrued liability as of February 29, 2004 is $180.5 million for health care insurance costs as compared $160.8 million for the same period in 2003. Based on increasing health care costs, the total for 2005 is expected to exceed$200 million. (Commissioner Calkins left the meeting at 5:25 p.m.) SELECTION OF INTERNATIONAL FUND MANAGERS Senior Vice President of Finance Dennis McFarland reported that staff, utilizing the expertise of our pension consultant LCG Associates, has conducted an extensive search for investment managers to manage approximately 15% of the fund to be invested in international equities. The search was conducted in accordance with the investment policy adopted by the Pension Fund Trustees on November 23, 2004, which took immediate effect. LCG used both qualitative and quantitative criteria to reduce the qualified candidates to two to three finalists. An internal committee, comprised of individuals from the Finance, Accounting and Human Resources functions, evaluated and ranked the finalists. Those rankings were reviewed with LCG and the ultimate recommendations were made. Mr. McFarland distributed copies of the Investment Manager Selection Report with background information on the two recommended investment managers. He reviewed the criteria for evaluation of the international growth managers. (A copy of the Investment Manager Selection Report is on file in the Corporate Secretary's Office.) RETAINING INTERNATIONAL FUND MANAGERS WHEREAS, the Trustees of the Lansing Board of Water and Light Defined Benefit Plan for Employees' Pension has adopted an investment policy effective November 23, 2004, and WHEREAS, that policy delegated authority to the Human Resources Committee to select and terminate investment managers, and Draft Minutes—subject to Board Approval on 5124105 Board Meeting Page 35 March 22,2005 WHEREAS, a search has been conducted to identify qualified professional, independent investment managers, and WHEREAS, the Human Resources Committee has determined Dodge & Cox, Inc. and Marsico Capital Management, LLC, to be such qualified investment managers. RESOLVED, That Dodge & Cox, Inc., and Marsico Capital Management, LLC be retained to manage a portion of the Defined Benefit Pension Fund in accordance with the Fund's investment policy. There being no further business, the Human Resources Committee adjourned at 5:43 p.m. Respectfully submitted, Tim Haggart, Chair Human Resources Committee Motion by Commissioner Haggart, seconded by Commissioner Calkins, to receive the report. Action: Carried unanimously. Resolution 2005-3-3' COMMITTEE OF THE WHOLE The Committee of the Whole of the Board of Water and Light met at the Executive Offices, Lansing, beginning at 4:00 p.m., Thursday, March 10, 2005. Chair Pro Tern Ron Callen called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Ron Callen, Gary Calkins, Tim Haggart, and Ifield Joseph. Commissioners Santiago Rios (5:00 p.m.), Robin Smith (4:55 p.m.), and Nancy Wonch(4:58 p.m.) arrived during the informational portion of the meeting. There being no objection, the Chair Pro Tem switched the order of the agenda to receive informational reports until such time that a quorum of the committee is established. He announced that business would be conducted once five members of the committee are present. PUBLIC COMMENT There were no public comments. LEAD TASK FORCE REPORT Senior Vice President of Operations Bill Cook presented the report of the Lead Service Replacement Team Report and Implementation Plan. The complete report is on file with the Corporate Secretary's Office. Mr. Cook referred to a written report he had circulated to the Commissioners earlier (copy filed with the Secretary's Office). He reported that the objectives of the team was to develop a plan for replacement of all lead services; communicate the project Draft Minutes—subject to Board Approval on 5124105 Page 26 Board Meeting March 22,2005 status and lead awareness; and monitor, evaluate and make recommendations to improve Board of Water and Light (BWL) corrosion control program. He reported on the progress to date: ■ Since July 2004, over 506 lead services have been replaced, including all licensed day care facilities. ■ Updated water installation standards. ■ Solicited bids and retained Malcolm Pirnie to evaluate BWL corrosion control practices. ■ Assigned an internal BWL project engineer as the project manager. ■ Assisted Ingham County Health Department in testing all area schools. ■ Manually reviewed more than 9,000 service cards to better identify service unknowns. ■ Participated with the AWWARF study regarding lead services. ■ Worked with townships regarding lead service status. ■ Established a process for adding customers to the "sensitive population" list. ■ Established a replacement program and timetable that coordinates with City of Lansing CSO and street replacement efforts. ■ Evaluated ways to reduce the cost of internal plumbing work within the home. ■ Solicited responses to over 40 local and national water contracting firms to bid on service replacement work. ■ Expanded BWL communications via: letters, open houses, community events, brochure, connections, agency support, consumer confidence report, targeted audiences, website, and employee communications. Remaining water services with lead as of December 31, 2004 were summarized: Full service from main to the house: 4,641 Main to curb box: 6,270 Curb box to building: 557 Cast iron with short pigtail: 97 Unknown: 1,161 Total 12,726 Mr. Cook reviewed the implementation plan to replace an average of 1,335 lead services per year for the next nine years. The service replacement priority was outlined: ■ Any lead service component that is worked on or disturbed. ■ Any lead service supplying a home that has been identified by the Ingham County Health Department as having a"lead burdened" child. ■ Any lead service to a school, hospital, licensed day care. ■ Any lead service supplying a sensitive population (pregnant women, children under 6). ■ Services where analysis is or has been over 15ppb or greater. ■ Scheduled lead service replacement (CSO, street restoration,planned work). Mr. Cook told the committee that based on bids and currently expected costs, it is anticipated that the Lead Service Replacement program will cost approximately $4,700,000 per year in today's dollars. Given implementation unknowns as well as potential opportunities to reduce these costs, the team recommended that the BWL budget $3.5 million for FY 2006. Mr. Cook noted that contractor bids were impacted by the BWL Purchasing Policy Requirement 13-06 Draft Minutes—subject to Board Approval on 5124105 Board Meeting Page 37 March 22,2005 requiring prevailing wage and fringe benefits to be paid on all constriction contracts. CSO contractor bids did not reflect anticipated savings associated with the combining of these projects. Mr. Cook reported on future actions to be taken: ■ Award the contract to the BWL contractor or contractors for the upcoming construction season. ■ Award a contract to the CSO contractor for a portion of 2006 projects. ■ Assemble and assign two BWL crews for lead service replacement. ■ Formulate a plan and implement for corrosion control upon receipt of the Malcolm Pirnie Report. ■ Provide the Board of Commissioner a status update before the next construction season in FY 2007. JANUARY FINANCIAL REPORT Senior Vice President of Finance Dennis McFarland presented the financial report for January (copy filed with the Secretary's Office). He reported that the variances in operating income from the budget to actual for the year in large part are the same as they have been in previous financial reports. Due to timing differences, a correction from prior reports is that the City of Lansing has not yet executed a contract to take advantage of the Street Light and Hydrant Riders approved by the Board in September 2004. Mr. McFarland indicated that staff s planning assumption is that the City will eventually implement the riders retroactive to September 2004. The delayed effect of the City of Lansing riders is $750,000. Currently this amount is showing up in the budget as a timing issue. Mr. McFarland noted that the only change to "Pending Items" is a refund of arbitrage rebate funds in the amount of $184,000. He also noted that excess cash from the Michigan Public Power Agency (MPPA) Belle River Project is reflected as non-operating revenue. The revised Net Income for FY'05 is projected at $2.6 million as compared to $2.4 projected at the start of the fiscal year. BROADBAND OVER POWERLINE General Manager Sanford Novick reported that there was an indication in the January 2005 issue of the BWL PIPELINE that the BWL had made a decision to not become involved in Broadband Over Power Line (BPL) service. He said that probably was a step beyond where staff decided; consequently, he spoke with the Commissioners who raised questions about the issue. Mr. Novick clarified that a decision was not made, but in fact staff continues to evaluate BPL technology and the value it would bring to the community. He noted that this technology has not been finalized, and there is a lot yet to be done. Staff has been in touch with the people who are offering the service in Grand Ledge later this year. The Board will be provided with a status report of activities in this arena once more information is known about the success of the service. Mr. Novick noted that the record would be corrected in this month's issue of PIPELINE. Draft Minutes—subject to Board Approval 071 5124105 Page 26 Board Meeting March 22,2005 ENTERPRISE RISK ASSESSMENT Internal Auditor Glenn Holloway continued his discussion on risk and risk management that he briefly reviewed at the Finance Committee meeting of February 15, 2005. He reported that internal audit standards require a risk assessment in order to develop an annual audit plan. He described the three major milestones that have occurred in risk management: (1) The Sarbanes- Oxley Act of 2002 imposed new financial reporting requirements on listed companies, (2) International Standards for the Professional Practice of Internal Auditing as promulgated by The Institute of Internal Auditors were revised to emphasize risk, and (3) COSO Enterprise Risk Management (ERM) — Integrated Framework defines essential components, suggests a common language, and provides clear direction and guidance for enterprise risk management. Mr. Holloway noted that COSO ERM defines risk as the possibility that an event will occur and adversely affect the achievement of objectives. Opportunities are the possibility that an event will occur and positively affect the achievement of objectives. The following Commissioners entered the meeting: Robin Smith (4:55 p.m.), Nancy Wonch (4:58 p.m.) and Santiago Rios (5:01 p.m.). Mr. Holloway further discussed the purpose of risk assessment, the methodologies available and used for developing a risk assessment. The top ten BWL risks at macro and micro levels from interviews with Commissioners and management were reviewed (copy filed with the Secretary's Office). Examples of selected Enterprise Risk Management framework models used by various firms were shown to compare the differences in approach. Mr. Holloway noted that the methodology in developing an enterprise risk assessment could be improved upon. As processes and controls are documented, assessment will be improved. Also, industry best practices may evolve which will contribute to improved risk assessment. In conclusion, Mr. Holloway indicated that the issue of financial reporting and internal control is a serious matter with strict sentencing guidelines. Chair Pro Tem Callen declared a quorum was now present for conducting business. RATE CASE RECOMMENDATION AND COMMUNICATION STRATEGY General Manager Novick stated that management has been spending a great deal of time planning for the future and making financial projections on future revenue and costs. It has been concluded that the BWL will need to devise both operating and rate strategies to overcome a projected revenue deficiency. Each utility service faces its own unique circumstances that are driving the need for increased revenue. The rate adjustments are necessary to recover cost increases due to higher labor, health care and other operating costs, which have occurred since electric and water rates were last increased in January 2003. Senior Vice President of Finance McFarland presented rate case assumptions and proposed rate increases for the electric and water utility. These rates would be distributed equally across all rate classes. Electric: 3.0% increases effective July 1, 2005 Draft Minutes—subject to Board Approval on 5124105 Board Meeting Page 39 March 22,2005 Water: 6.5% effective July 1, 2005 followed by another increase of 6.5% July 1, 2006, Steam: A formal recommendation on steam rate increases will not be made at this time given the uncertainty of that utility. With the recent announcement from General Motors about plant closing schedules, staff is not in a position to make a decision on what a rate increase might be. Informal discussions with steam customers will take place to share information in order to determine future needs and what is best for the steam utility. The Board will be kept informed of these discussions. Mr. McFarland reviewed several charts and graphs outlining the following data (copy filed with the Secretary's Office): ■ Net Income and Cash Projection 2005-2010 with the proposed rate increases layered in. ■ Operating Expense Comparison: FY 2003 and FY 2006 and for FY 2005 and FY 2006 ■ Cost Increase Drivers for Electric ■ Rate Increase Drivers for Water ■ Rate increase history from January 1995 to present ■ Residential Rate Increases and Inflation for Electric and Water and Sewer Communications Director John Strickler presented a communication strategy that describes the rationale for utility rate increases and actions that will be taken to communicate the proposed adjustments to BWL customers, key stakeholders and employees. Following lengthy discussion, staff presented a recommended timeline to proceed with a public hearing to solicit public input on proposed electric and water rate increases. The Committee of the Whole concurred with the timeline and recommended that a formal resolution to set a public hearing date be brought to the Board on March 22, 2005 for action. Aye: Callen, Calkins, Haggart, Joseph, Rios, Smith, Wonch Nay: None Absent: None SPECIAL COUNSEL LIST General Counsel Amy Cavanaugh reported that the City Charter requires City Council to approve special counsel that is retained by the Board of Water and Light (BWL). In the past, a special counsel approved list for a two-year period was compiled by the BWL in-house counsel and approved by the Board for submittal to City Council for approval. Ms. Cavanaugh noted that once approved, for the next two years, the firms are authorized to do work for the BWL without additional input from City Council. She indicated that eight firms responded to the BWL Request for Proposals for legal services. She then summarized the evaluation process, which included: (a) a review of each proposal, (b) solicited comments from directors and managers, (c) solicited comments from Commissioners, and (d) on-site interviews with some of the law firms she was not personally familiar with an attorney's work. Discussion was held on the comparison of the firms and perceived strengths and weaknesses. Ms. Cavanaugh also Draft Minutes—subject to Board Approval on 5124105 Page 26 Board Meeting March 22,2005 indicated the need for a FERC Washington, D.C. counsel and that she would include that firm on the list to be brought to the Board. The Committee of the Whole voted to recommend that the special counsel approved list for a two-year period from March 22, 2005 to March 22, 2007 be brought to the Board for approval. Aye: Callen, Calkins, Haggart, Joseph, Rios, Smith, Wonch Nay: None Absent: None DISPOSAL OF PROPERTY General Manager Novick presented draft resolutions and information regarding two pieces of property that have been identified as surplus and no longer needed for the operation of the Board of Water and Light (BWL). The first property situated in the 2200 block of South Washington Avenue in Delhi Township was purchased by the BWL in 1995 at a cost of$15,000 with the intent to utilize it for a well site designated as Well 83-02. Nearby groundwater pollution from the old Gunn Road Landfill has been identified by staff and the Michigan Department of Environmental Quality as a risk for a future well site. The BWL evaluated the pollution risks and well development costs and determined the site to be unacceptable for a future well site. The second property situated in the 4700 block of Richard Street in Holt, comprised of Parcels A and B, was purchased by the BWL in 1995 at a cost of$20,000 with the intent to utilize a portion of this property (Parcel A) for a well site designated as Well 84-03. The well has been drilled and remaining portion on the property (Parcel B) has been determined as unacceptable for further well development. In 2003, the BWL received notice from Delhi Township that this site was being assessed $27,405.09 as its proportionate share of the Diehl Consolidated Drain Assessment. Delhi Township, in support of park and recreational development plans, has indicated its desire to purchase Parcel B in the amount of$29,000. The proceeds from the sale would be used to pay the outstanding drain assessment of$27,405.09. Following discussion, the Committee of the Whole voted to recommend that resolutions authorizing the sale of the two pieces of property be brought to the Board for approval. Aye: Callen, Calkins,Haggart, Joseph, Rios, Smith, Wonch Nay: None Absent: None RULES OF PROCEDURE Suggestions have been made by some Commissioners for a review of the officer nominations process and the scope of responsibility for each of the standing committees. Following discussion, it was agreed that the Board's Rules of Procedure must be reviewed in their entirety periodically for updating. An ad hoc committee will be formed by Board Chair Robin Smith to Draft Minutes—subject to Board Approval on 5124105 Board Meeting Page 41 March 22,2005 review the rules and report back to the Committee of the Whole with an amended copy for discussion. OPERATIONAL PERFORMANCE REPORTING General Manager Novick reported that interest has been expressed by some Commissioners for more detailed operational reporting from staff at Committee of the Whole or Board meetings. One example given was a report on the status of the Erickson Station Western Coal Conversion project. He asked for the Commissioners' guidance in determining a preference on the level of information to be provided. Mr. Novick offered to meet individually with Commissioners to answer specific questions. Also, he noted that the Balanced Scorecard is an attempt to reflect at a higher-level operational performance results. Following discussion, there was consensus that BWL staff meeting notes have been helpful in getting a recap of general state of affairs. Also, the Commissioners agreed that a statement from the General Manager on significant operational activities would be sufficient either by memo or a verbal report at Commissioner meetings. ENVIRONMENTAL UPDATE General Manager Novick discussed the significance for staff to work with the Board in developing a sense of direction on philosophy with respect to management's treatment of environmental issues. For example, should the BWL be the lowest cost provider or the most environmental and clean utility in the country, or balance those two to the extent it makes sense? He referred to Nick Burwell of Environmental Services for an update on environmental issues. Mr. Burwell reported that last September he discussed multi-pollutant regulations (CO2, NOx, S02, Mercury) and their potential impact on the BWL. For planning purposes, regulations that were determined as "most likely" were used. One of the next steps defined at that time was to monitor and participate in regulatory development. Mr. Burwell suggested that the time to act is now. He discussed the many different regulatory routes, pointing out that there are multiple proposals to control all or some of NOx, S02, Mercury and CO2. One route is the Clean Air Act (CAA), which has resulted in emission reductions and significant air quality improvements nationwide. He noted, however, that the CAA process addresses one pollutant at a time. There is also the Clear Skies initiative. The EPA estimates that from the base year of 2000, the Clear Skies initiative will reduce NOx emissions 59% by 2008 and 67% by 2018; reduce S02 emissions 60% by 2009 and 73% by 2018; and reduce mercury emissions 29%by 2010 and 69% by 2018. Clear Skies supporters include: Unions for Jobs and the Environment (UJAE), American Chemistry Council, American Petroleum Institute, Edison Electric Institute, other utilities in Michigan such as CMS, DTE, AEP, WE, MMEA, APPA. General Manager Novick offered to bring to the Committee a draft philosophy that attempts to capture the essence of the Board's view on balancing costs and environmental stewardship. Following input from the Commissioners, it was agreed to have staff prepare a philosophical statement defining how environmental issues are to be approached rather than a policy statement. There being no further business, the Committee of the Whole adjourned at 6:45 p.m. Respectfully submitted, Draft Minutes—subject to Board Approval on 5124105 l Page 26 Board Meeting March 22,2005 Ron C. Callen, Chair Pro Tern Committee of the Whole Motion by Commissioner Callen, seconded by Commissioner Calkins, to receive the report. Action: Carried unanimously. MANAGER'S RECOMMENDATIONS Background materials on items presented are on file in the Office of the Corporate Secretary. Resolution 2005-3-4 A. SETTING PUBLIC HEARING CONCERNING ELECTRIC AND WATER RATE INCREASES WHEREAS, over the past four months, Board of Water and Light management has been discussing rate strategies with the Commissioners to overcome a projected revenue deficiency over the next six years. WHEREAS, staff has recommended a rate hearing process to adjust electric and water rates effective July 1, 2005. The rate adjustments are necessary to recover cost increases due to higher labor, health care and other operating costs, which have occurred since electric and water rates were last increased in January 2003. The rate case recommendation for electric is a 3 percent across-the-board increase effective July 1, 2005. A 6.5 percent increase is recommended for water effective July 1, 2005 followed by another increase of 6.5 percent on July 1, 2006. RESOLVED, That the request for proposed electric and water rate increases be made the subject of a public hearing prior to further consideration by the Board of Commissioners. RESOLVED FURTHER, That the Board of Commissioners hereby sets the date of Tuesday, May 10, 2005 at 5:30 p.m. for a public hearing to solicit public input on the proposed electric and water rate adjustments. The hearing will be held at the Board of Water and Light offices, 1232 Haco Drive, Lansing. The Corporate Secretary is directed to file with the City Clerk no later than March 26, 2005, information regarding proposed rate increases with an effective date of July 1, 2005. Management discussed rate case scenarios with the Commissioners, based on various assumptions, at the following meetings: Committee of the Whole on December 14, 2004 and January 11, 2005; Board Meeting on January 25, 2005; Finance Committee on February 15, 2005; and Committee of the Whole on March 10, 2005. Motion by Commissioner Calkins, seconded by Commissioner Callen, to approve the resolution. Discussion: General Manager Novick stated that a sophisticated and focused planning process over the past year has culminated with a strategic plan and a long-term financial plan. The BWL's planning process recognizes its commitment to the customers and the community by Draft Minutes—subject to Board Approval on 5124105 Board Meeting Page 43 March 22,2005 continuing to hold down rates or otherwise mitigate the impact of the increases. Mr. Novick noted that the new Balanced Score emphasizes the BWL's need to compare its performance with leaders in the utility industry and to constantly search for ways to improve productivity and efficiency. Commissioner Callen noted that management has discussed rate case scenarios with the Commissioners, based on various assumptions, at the following meetings: Committee of the Whole on December 14, 2004 and January 11, 2005; Board Meeting on January 25, 2005; Finance Committee on February 15, 2005; and Committee of the Whole on March 10, 2005. Action: Carried unanimously. Resolution 2005-3-5 B. on OF FAS NO. 71 TO ENERGY COST ADJUSTMENT (ECA) AND WATER CONTRIB UTION IN AID OF CONSTR UCTON(CIA C) RESOLVED, That the Board of Commissioners, as the regulatory body of the Board of Water and Light, recognize, pursuant to the Financial Accounting Standard (FAS) 71, the financial liability or asset created by the items listed below and elect to defer the current recognition of these items. ■ Energy Cost Adjustment (ECA). This would allow for the recognition of a deferred liability(asset) for the over/under collection of the ECA. ■ Water Contribution in Aid of Constriction (CIAC). This would allow for the crediting of the customer contributions in aid of construction against the cost of the asset. Motion by Commissioner Haggart, seconded by Commissioner Calkins, to approve the resolution. Discussion: Senior Vice President of Finance Dennis McFarland reported that this accounting treatment would allow the ECA to be tracked and would assure that the difference between actual energy costs and the amount established in the rates would be collected through an adjustment to the ECA in future periods. An account would be used that is established by the FERC Uniform System of Accounts to track the deferral. This would assure that all fuel costs are collected or reimbursed in a timely fashion as appropriate. The Water CIAC would be handled in the same manner as the Electric and Steam CIAC. The plant accounts would be recorded at cost. Action: Carried unanimously. Resolution`2005-3-6 C. RETAIN OUTSIDE COUNSEL RESOLVED, That the following law firms be placed on the Board of Water and Light Special Counsel Approved List for a two year period from March 22, 2005 to March 22, 2007. Daft Minutes—subject to Boai-d Approval on 5124105 Page 26 Board Meeting March 22,2005 1, Canady Law Offices 2. Dickinson, Wright PLLC 3. Foster, Swift, Collins & Smith, P.C. 4. Varnum, Riddering, Schmidt &Howlett,LLP 5. Willingham Cote', P.C. 6. Loomis, Ewert, Parsley, Davis & Gotting FURTHER RESOLVED, That the following attorneys are approved to complete the specified on-going projects: 1. Mike Brown and associates with Plunkett & Cooney to complete the Pathways litigation. 2. Jeff Chalmers with Howard &Howard to prepare condominium documents for development of the Ottawa Street Station. RESOLVED FURTHER, That this 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. Motion by Commissioner Calkins, seconded by Commissioner Rios, to approve the resolution. Discussion: General Counsel Amy Cavanaugh reported that the BWL sent ten Requests for Proposals to area law firms and received eight responses. Staff Attorney Brandie Ekren and General Counsel Amy Cavanaugh evaluated the proposals in the following manner: a) reviewed each proposal, b) solicited comments from directors and managers, c) solicited comments from Board members, and d) interviewed some law firms (particularly where staff was not personally familiar with an attorney's work.) A comparison of the firms' strengths and weaknesses was also considered. Action: Carried unanimously. Resolution 2005-3-7 SPECIAL COUNSEL FOR F.E.R.C. MATTERS RESOLVED, That the following law firm be placed on the Board of Water and Light Special Counsel Approved List for a two year period from March 22, 2005 to March 22, 2007 as the BWL's Federal Energy Regulatory Commission(FERC) counsel: Miller, Balis &O'Neil 1140 Nineteenth St.,NW Suite 700 Washington, D.C. 20036-6600 RESOLVED FURTHER, That this firm 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. Draft Minutes—subject to Board Approval on 5124105 Board Meeting Page 45 March 22,2005 Motion by Commissioner Calkins, seconded by Commissioner Rios, to approve the resolution. Discussion: General Counsel Amy Cavanaugh reported that as discussed at the March 10, 2005 Committee of the Whole meeting, the BWL did a separate Request for Proposals for a Washington D.C. counsel to represent the BWL before the Federal Energy Regulatory Commission. Having this counsel is particularly important given the BWL's notice of termination to the Michigan Public Power Agency (MPPA) of participation in the power pool. The BWL received two proposals, from Van Ness Feldman and Miller, Balis & O'Neil. Although both firms were clearly capable of performing the work, Ms. Cavanaugh, General Manager Novick and Sr. Vice President of Operations Bill Cook selected Miller, Balis & O'Neil because they felt more comfortable with the relationship and the specific attorney who would be assigned to the BWL's work. William (Bud) Miller will be the attorney primarily responsible for the BWL's representation. Action: Carried unanimously. Res01ution2005-3-8 D. DECLARE BOARD OF WATER AND LIGHT (BWL)PROPERTY ON 2200 BLOCK OF S. WASHINGTON AVENUE, LANSING, DELHI TOWNSHIP,AS SURPLUS AND NO LONGER NEEDED FOR OPERATONS AND AUTHORIZE THE SALE OF THE PROPERTY IN ACCORDANCE WITH CURRENT BWL PROPERTY DISPOSAL PROCEDURES WHEREAS, the following described Well 83-02 Property, located east of S. Washington Ave and approximately one-half mile north of Holt Road in Delhi Township, Ingham County, Michigan, has been identified as surplus and no longer needed for the operation of the Board of Water and Light (BWL); Well 83-02 Property Description: A parcel of land in the Southeast 1/4 of Section 17, Town 3 North, Range 2 West, Delhi Township, Ingham County, Michigan, said parcel particularly described as follows: Beginning at a point on the East line of Lot 8 of Supervisors Plat Number 14, Delhi Township, Ingham County, Michigan, as recorded in Liber 21 of Plats, Page 29, Ingham County Records, said point of beginning being 317 feet South of the South Line of Lot 13 of said Plat; thence North 200 feet, along the East lines of Lots 8,9 and 11 of said Plat to a point that is 117 feet South of the South line of Lot 13 of said Plat; thence East 200 feet; thence South 200 feet to a point that is 317 feet South of the South line of Lot 13 of said Plat; thence Westerly 200 feet Parallel to the South Line of Lot 13 of said Plat to the point of beginning. Together with an easement for ingress and egress described as follows: Beginning at the Northeast corner of Lot 11 of Supervisor's Plat No. 14, Delhi Township, Ingham County, Michigan, as recorded in Ingham County Plats; thence North along the East Plat line 60 feet, more or less, to a point on the South line of Lot 13 of said Plat; thence Easterly along the South line of Lot 13, 30 feet; thence South 117 feet; thence Westerly parallel to the South line of Lot 13, 30 feet to a point on the East line of Lot 11 of said Plat; thence North along the East line of Lot 11, 57 feet, more or less, to the point of beginning of this Ingress/Egress Area Draft Minutes—subject to Board Approval on 5124105 Page 26 Board Meeting March 22,2005 description. *Reference deed to the City of Lansing by its Board of Water and Light recorded in L. 2320, Pages 378-379 of Ingham County, Michigan deeds. *See EXHIBIT "A" WHEREAS, the BWL has been contacted by an adjacent property owner interested in purchasing the property for development purposes; and WHEREAS, upon approval of the property as surplus by the Board of Commissioners, the BWL will proceed to obtain an appraisal and dispose of the property in accordance with current BWL "Property Disposal Procedures;" RESOLVED, That the Board of Commissioners hereby declares the above described Well 83-02 Property as surplus and no longer needed for Utility purposes and approves the sale of the property in accordance with current BWL "Property Disposal Procedures." RESOLVED FURTHER, That the General Manager and Corporate Secretary are authorized to sign all documents necessary to dispose of this parcel, subject to approval of BWL General Counsel. FURTHER RESOLVED, That this sale is expressly conditioned upon compliance with the Lansing City Charter or Codified Ordinances of the City of Lansing, including approval of the sale by the Lansing City Council. Motion by Commissioner Joseph, seconded by Commissioner Rios, to approve the resolution. Discussion: Mr. Novick reported that the BWL purchased this property in 1995 at a cost of $15,000 with the intent to utilize it for a well site designated as Well 83-02. Nearby groundwater pollution from the old Gunn Road Landfill has been identified by staff and the MDEQ as a risk to this site as a future well site. A staff committee on water supply met on January 13, 2005 to evaluate the pollution risks and well development costs and determined the site to be unacceptable for a future well site. Therefore, it is recommended that the property be declared surplus and sold in accordance with the BWL " Property Disposal Procedure." The selling price will be set at an amount that will reimburse the BWL for the current appraised value of the property, BWL administrative costs, real estate fees, closing fees, etc. Action: Carried unanimously. Resolution 2005-3-9 . .. ... . . ......... E. DECLARE BOARD OF WATER AND LIGHT (BWL) PROPERTY ON 4700 BLOCK OF RICHARD STREET, HOLT, AS SURPLUS AND NO LONGER NEEDED FOR OPERATONS AND AUTHORIZE THE SALE OF THE PROPERTY IN ACCORDANCE WITH CURRENT BWL PROPERTY DISPOSAL PROCEDURES WHEREAS, the following parcel (Parcel "B"), located on the east side of Main Street and the north side of Richard Street, approximately one-half mile north of Holt Road in Delhi Township, Draft Minutes—subject to Board Approval on 5124105 Board Meeting Page 47 March 22,2005 Ingham County, Michigan, is no longer needed for the operation of the Board of Water and Light (BWL); and Parcel "B" Description: COMMENCING AT THE 1/4 CORNER COMMON TO SECTIONS 15 & 22, T. 3 N., R. 2 W., DELHI TOWNSHIP, INGHAM COUNTY, MICHIGAN, SAID 1/4 CORNER RECORDED IN L. 8, P. 606, INGHAM COUNTY LAND CORNER RECORDATION CERTIFICATES: THENCE N 00°06'31" W 1316.21 FT. TO A FOUND SQUARE CONCRETE PLAT MONUMENT AT THE NORTHWEST CORNER OF THE "REPLAT OF BLOOMFIELD PARK", L. 19, PP. 30-31, INGHAM COUNTY PLATS, AND BEING THE POINT OF BEGINNING OF PARCEL "B": THENCE N 00°05'30" W 1305.65 FT. TO THE LOCALLY ACCEPTED CENTER POST OF SECTION 15, SAID CENTER POST BEING RECORDED IN L. 8, P. 603, INGHAM COUNTY LAND CORNER RECORDATION CERTIFICATES; THENCE ALONG THE SOUTH PLAT LINE OF "STERLING FARMS" AS RECORDED IN L. 6, P. 46, INGHAM COUNTY PLATS, S 89°28'17" E 217.93 FT. TO THE N.W. CORNER OF "WEBERT PARK SUBDIVISION" AS RECORDED IN L. 8, P. 11 OF INGHAM COUNTY PLATS; THENCE ALONG THE EDGE OF "WEBERT PARK SUBDIVISION" THE FOLLOWING FOUR COURSES; S 07011'03" E 146.19 FT. (147 FT. PLAT); THENCE ALONG A CURVE TO THE LEFT WITH A RADIUS OF 316 FT., LENGTH OF 152.64 FT., CENTRAL ANGLE OF 27°40'33", LONG CHORD BEARING S 54°00'54" E FOR 151.16 FT. (152 FT. PLAT) TO A FOUND 1/2" IRON PIPE IN AN 8"±DIAMETER CONCRETE BASE; THENCE ALONG A CURVE TO THE LEFT WITH A RADIUS OF 884 FEET, LENGTH OF 301.96 FT., CENTRAL ANGLE OF 19°34'16", LONG CHORD BEARING S 81041'27" E FOR 300.49 FT. (302 FT. PLAT) TO A FOUND 3/4" IRON PIPE AT THE N.W. CORNER OF LOT 81 OF "WEBERT PARK SUBDIVISION"; THENCE S 00012'34" E 531.17 FT. (531.40 FT. PLAT) TO THE N.W. CORNER OF LOT 74 OF "WEBERT PARK SUBDIVISION"; THENCE N 89°04'08" W 135.00 FT.; THENCE S 00°12'34" E 62.97 FT. (63 FT. DEED); THENCE S 89°04'08" E 135.00 FT. TO THE S.W. CORNER OF LOT 74 OF "WEBERT PARK SUBDIVISION"; THENCE ALONG THE WEST LINE OF "WEBERT PARK SUBDIVISION" S 00012'34" E 442.91 FT. (443.1 FT. PLAT & DEED) TO A FOUND SQUARE PLAT MONUMENT AT THE N.E CORNER OF THE "REPLAT OF BLOOMFIELD PARK"; THENCE ALONG THE NORTH LINE OF RICHARD STREET (66 FT. WIDE) N 89°04'08" W 231.43 FT. (231.70 FT. DEED); THENCE N 00°04'08" W 150.00 FT.; THENCE N 89°04'08" W 239.72 FT. (240 FT. DEED); THENCE S 00°04'08" E 150.00 FT. TO A POINT ON THE NORTH LINE OF RICHARD STREET; THENCE ALONG THE NORTH LINE OF RICHARD STREET N 89004'08" W 186.49 FT. (186.7 FT. DEED) TO THE SQUARE CONCRETE PLAT MONUMENT AT THE POINT OF BEGINNING OF THIS DESCRIPTION, SUBJECT TO RIGHTS GRANTED FOR THE "DIEHL DRAIN", AND SUBJECT TO ANY AND ALL OTHER EASEMENTS AND RESTRICTIONS OF RECORD, AND EXCEPT THE FOLLOWING DESCRIBED PARCEL "A": BEGINNING AT THE FOUND SQUARE PLAT MONUMENT AT THE N.E. CORNER OF THE "REPLAT OF BLOOMFIELD PARK"; THENCE ALONG THE NORTH LINE OF RICHARD STREET (66 FT. WIDE) N 89°04'08" W Draft Minutes—subject to Board Approval on 5124105 Page 26 Board Meeting March 22,2005 231.43 FT. (231.70 FT. DEED); THENCE N 00°04'08" W 202.59 FT.; THENCE PARALLEL TO RICHARD STREET S 89°04'08" E 230.93 FT. TO A POINT ON THE WEST LINE OF "WEBERT PARK SUBDIVISION"; THENCE ALONG THE WEST LINE OF "WEBERT PARK SUBDIVISION" S 00012'34" E 202.60 FT. TO THE POINT OF BEGINNING OF PARCEL"A". *See EXHIBIT "A" WHEREAS, the BWL property disposal procedure specifies that local units of government be given first rights to purchase surplus properties at an amount equal to or greater than the appraised value; and WHEREAS, Delhi Charter Township in support of park and recreational development plans has indicated its desire to purchase Parcel`B" in the amount of$29,000.00. RESOLVED, That the Board of Commissioners hereby moves that upon execution of a Purchase and Sale agreement and a Memorandum of Understanding between Delhi Charter Township and the Board of Water & Light, declares the above described Parcel "B" as surplus and approves the sale of the property to Delhi Charter Township for $29,000.00; RESOLVED FURTHER, That the General Manager and Corporate Secretary are authorized to sign all documents necessary to convey this parcel to Delhi Charter Township, subject to approval of BWL General Counsel; RESOLVED FURTHER, That this sale is expressly conditioned upon compliance with the Lansing City Charter or Codified Ordinances of the City of Lansing, including approval of the sale by the Lansing City Counsel. Motion by Commissioner Callen, seconded by Commissioner Joseph, to approve the resolution. Discussion. The BWL purchased the property comprised of Parcels "A" and `B" in May of 1995 at a cost of$20,000 with the intent to utilize a portion of this property (Parcel "A") for a well site designated as Well 84-03. Well 84-03 has been drilled and the remaining portion on the property, Parcel "B" has been determined as unacceptable for further well development. In May of 2003, the BWL received notice from Delhi Township that this site was being assessed $27,405.09 as its proportionate share of the Diehl Consolidated Drain Assessment. Delhi Township contacted the BWL and recommended that the BWL sell to Delhi Township the unused portion of the property (Parcel "B") for use as a Township park. Since the BWL has no future identified use for Parcel "B," it is recommended that the BWL accept the offer from Delhi Township. An appraisal of Parcel `B" was completed in October of 2003 and Parcel `B" was determined to have a value of $20,000. The recommended selling price of $29,000 will reimburse the BWL for the appraised value of the property and the administrative costs involved in the property sale. After the sale closing is completed, the proceeds from the sale will be used to pay the outstanding drain assessment of$27,405.09. Action: Carried unanimously. Di-aft Minutes—subject to Board Approval on 5124105 Board Meeting Page 49 March 22,2005 UNFINISHED BUSINESS MOTION TO TAKE FROM THE TABLE Motion by Commissioner Rios, seconded by Commissioner Callen to Take From The Table the "proposed"resolution presented by the Committee of the Whole at the January 25, 2005 Board Meeting: "PROPOSED" RESOLUTION REGARDING THE PROCESS OF RECOMMENDING CHANGES TO RETIREES' PENSIONS WHEREAS, on January 11, 2005, the Committee of the Whole reviewed a summary prepared by Human Resources regarding retirees' pension adjustments. The summary provided a history of previous pension plan adjustments and other considerations, and WHEREAS, this background information was requested by the Commissioners as a result of a question raised by several retirees at the November 23, 2004 Board meeting as to whether the Board of Commissioners resolved to periodically review retirees' pensions. RESOLVED, That BWL management may, in its discretion, review and/or recommend changes to retirees' pensions to the Board of Commissioners. Discussion: Chairperson Smith stated that at the January 25, 2005 meeting, the Board consented to Lay the pending question on the Table until additional information requested from staff was received. The issue of retiree pension adjustments was also referred to the Human Resources Action: Carried unanimously. Motion by Commissioner Rios and seconded by Commissioner Joseph, to rescind the proposed Resolution. Action: The motion to rescind the proposed resolution was approved by the following vote: YEAS: Commissioners Callen, Calkins,Haggart, Joseph, Rios, Smith. NAYS: None ABSENT: Commissioner Wonch Resolution 2005-3=10 RIVER STREET TRIANGLE PROPERTY PROJECT Chair Robin Smith, referring to the request received during Public Comment by City Finance Director Glen Kirk, to extend by thirty (30) days the agreement between the Board of Water and Light and River Street Triangle, LLC, asked for a motion on the question to extend the agreement. Moved by Commissioner Rios, seconded by Commissioner Haggart to rescind Resolution 2005- 1-5, "Resolution to Require Payment of Non-Refundable Option Fee or to Issue Notice of Draft Minutes—subject to Board Approval on 5124105 Page 26 Board Meeting March 22,2005 Cancellation for Purchase Agreement Regarding Former Coal Storage Property at 312 North Grand, " approved at the last meeting, January 25,2005. Discussion. General Manager Novick reported that by rescinding Resolution 2005-1-5, all terms, conditions and timetables established in the agreement dated May 17, 2002 remain the same. He noted that the earlier resolution approved in January required a non-refundable $100,000 deposit as a condition of the developer retaining its option through June 2005, which is the expiration date. The deadline for paying the deposit was March 29, 2005. Mr. Novick pointed out that the agreements with the City were amended November 1, 2004 to extend the contracts to June 15, 2005 to give the developer additional time to complete the lease negotiations. Commissioner Joseph expressed concern with the dormant state of the project over the past three to four years. He also expressed disappointment that the developer left the meeting before the Commissioners discussed the request made by the City and the developer. Following lengthy discussion, the Commissioners agreed to give the City's request consideration and then address this matter again after thirty days. Action: Carried unanimously. NEW BUSINESS TRI-COUNTY REGIONAL PLANNING COMMISSION PRESENTATION Gail Peterson, BWL Engineer/Specialist of Environmental Engineering, reported that she and Bill Maier, Engineer/Specialist of Environmental Engineering, have been working on the Groundwater and Wellhead Protection Program with the City of Lansing. The BWL has received state grants used to promote groundwater educate relative to wellhead protection and groundwater protection in the Lansing area. Ms. Peterson introduced Christine Spitzley, Environmental Program Planner for the Tri-County Regional Planning Commission who presented a detailed presentation on wellhead protection efforts. She reviewed the timeline over three decades of water quality starting with the 208 Water Quality Plans in 1970, the start of the Groundwater Management Board in 1980, the Groundwater and Wellhead Protection in 1990 and the Storm Water/Phase Il in 2000. Ms. Spitzley reported on things the Tri-County Regional Planning Commission has done in the areas of public education and wellhead protection ordinances, and contaminant source inventory and abandoned well survey/closures. At the conclusion of her presentation, Ms. Spitzley thanked the Board for the opportunity to speak on the important issue of groundwater and wellhead protection. She commended the Board and BWL staff for their generous support and participation in wellhead planning. She noted that the Lansing area is considered to be a national leader in groundwater protection efforts. BWL RECEIVES UNITED WAY CAMPAIGN PLAQUE. General Manager Novick reported that BWL employees dug deep into their pockets for the second year in a row to support the United Way. He congratulated Co-Chairs Jim Dravenstatt- Moceri, representing the Bargaining unit, and Calvin Jones, representing the Non-Bargaining unit, for their leadership. Mr. Dravenstatt-Moceri reported that the campaign goal was $96,000 and a total of$96,652.85 was raised. He acknowledged the team and representatives who contributed their time to assure the success of the campaign. He also presented the Board with a Draft Minutes—subject to Board Approval on 5124105 Board Meeting Page 51 March 22,2005 plaque, which says: "The Lansing BWL with sincere appreciation for your outstanding support to United Way in the community." The Commissioners applauded the United Way representatives and all employees for their outstanding support. BWL A SILVER BELLS SIGNATURE SPONSOR. General Manager Novick reported that Silver Bells is a major event in the City of Lansing, which starts off the holiday and winter season. The BWL is a signature sponsor with BWL employee involvement in the lighting of the holiday tree in front of the State Capitol and two festive floats. Due to the rainy weather, 50,000 people attended the event as compared to 80,000 the previous year. Mr. Novick noted that the Arts Council of Greater Lansing has donated to the BWL a beautiful digitally enhanced picture of the Silver Bells celebration of lights. The picture will hang in an appropriate place in the main office building. Commissioner Smith commented that Silver Bells is a great family event. She thanked BWL volunteers for their contribution in snaking this event a success. Resolution`2005-3'-11 ELECTION OF THE CHAIR PRO TEM Chair Robin Smith announced that the election of a Chair Pro Tem for the remainder of this fiscal year was now in order. She asked for nominations. Commissioner Callen nominated Commissioner Tim Haggart, but Commissioner Haggart respectfully declined it. Moved by Commissioner Rios and seconded by Commissioner Calkins to nominate Commissioner Ifield Joseph. There being no other nominations, the Chair closed nominations. By unanimous vote, Commissioner Ifield Joseph was elected Chair Pro Tern for the remainder of this fiscal year ending June 30, 2005, RESOLUTIONS Resolution2005-3-12 RESOLUTION HONORING NANCY W. DUNCAN WHEREAS, in recognition of her outstanding service as a Commissioner of the Lansing Board of Water and Light, it is with respect and appreciation that we recognize Nancy Duncan as she completes four and one-half years of dedicated service as a public servant on this Board; and WHEREAS, Nancy Duncan was appointed to the Board as an At Large Commissioner on August 2000 and later assigned to the Second Ward in 2004. She was elected Chair Pro Tern in 2002 and held that office two times. She became Vice Chair in 2004 and served in that capacity Draft Minutes—subject to Board Approval on 5124105 Page 26 Board Meeting March 22,2005 for one year. She also chaired the Finance Committee between 2001 and 2005 while being a member of the Executive Committee since 2002 and Nominating Committee in 2000 and 2001; and WHEREAS, we are sincerely grateful for Nancy's outstanding vision, leadership and intelligence. The people of the Lansing community and the employees of the Board of Water and Light have benefited from her long hours and hard work on this Board. She never lost sight of the goal of assuring that electric, water, steam and chilled water are reliable and delivered at the lowest price possible. Nancy played a pivotal role in the success of the Board of Water and Light by sharing her analytical ability and broad knowledge in evaluating financial management systems. She actively monitored the utility's organizational performance to achieve excellence in rates,reliability, and service; and RESOLVED by the Board of Water and Light Commissioners, That the members of this Board honor and thank Nancy W. Duncan for her distinguished service. In regular session this 22na day of March 2005, we wish Nancy and her husband, Ron, and family the very best and well- deserved happiness and fulfillment. Motion by Commissioner Haggart, seconded by Commissioner Rios, to approve the resolution. Discussion: Commissioner Callen commented that the Commissioners and the BWL benefited from the financial experience Nancy Duncan brought to the Board. Commissioner Smith noted that the Commissioners plan to honor Ms. Duncan at a recognition dinner. Action: Carried unanimously. RESOLUTION BY THE HUMAN RESOURCES COMMITTEE Resolution 2005-3-13 BOARD POLICY ON CHANGES TO DEFINED BENEFIT PLAN PENSIONERS WHEREAS, the Board of Commissioners, at its January 25, 2005, meeting, tabled a Resolution from its Committee of the Whole regarding Defined Benefit Plan cost of living considerations and recommended the issue to its Human Resources Committee for further study and discussion; and, WHEREAS, the Board of Commissioners' Human Resources Committee received written and public comments regarding Cost of Living Adjustments to the pensions of BWL Defined Benefit Plan pensioners; and, WHEREAS, the Board of Commissioners' Human Resources Committee reviewed the records provided them by the public and staff regarding Defined Benefit cost of living considerations, sections of agreements between BWL and IBEW Local 352, investment summaries of the Defined Benefit Plan and Post-Retirement Benefit Plan (VEBA), historical retiree health care expenses, and other information concerning the financial impact of giving to Defined Benefit pensioners a Cost of Living Adjustment; and, Draft Minutes—subject to Board Approval on 5124105 Board Meeting Page 53 March 22,2005 WHEREAS, the Board of Commissioners' Human Resources Committee sought and received legal opinion from the BWL General Counsel regarding the legal obligation of the Board of Commissioners to consider increases. RESOLVED, That neither the Board of Commissioners nor the BWL is legally obligated to review post-retirement pension increases for Defined Benefit Plan pensioners; RESOLVED FURTHER, That the Board of Commissioners has given consideration for a Cost of Living Adjustment to Defined Benefit Plan pensioners and determined that an adjustment is not currently prudent. RESOLVED FURTHER, That the issue be reviewed again by Management within 30 days of Board of Commissioners' approval of the next BWL-IBEW Contract considering the BWL's projected revenues and expenses. RESOLVED FURTHER, That Management compile additional information for Board of Commissioners' consideration that might be useful in evaluating the prudence of any future adjustment. Motion by Commissioner Haggart, seconded by Commissioner Rios, to approve the resolution. Action: Carried unanimously. RESOLUTION BY THE FINANCE COMMITTEE Resolution 2005-3-14 INTERNAL AUDIT CHARTER RESOLVED, That the Board of Commissioners hereby approves the Audit Charter, appended to these minutes as Attachment A, which conforms with the International Standards for the Professional Practice of Internal Auditing. The Internal Audit Charter was submitted and discussed at the Finance Committee meeting on February 15, 2005. Motion by Commissioner Calkins, seconded by Commissioner Rios, to approve the resolution. Discussion. Internal Auditor Glenn Holloway stated that the purpose of the Internal Audit Charter is to establish the mission, purpose, independence, authority, responsibility and scope, and standards of the Internal Auditor. It puts the emphasis on improving the effectiveness of risk management, control, and governance processes. Action: Carried unanimously. Draft Minutes—subject to Bom-d Approval on 5124105 Page 26 Board Meeting March 22,2005 RESOLUTION BY THE FINANCE COMMITTEE Resolution 2005-3-15 INTERNAL AUDIT PLAN RESOLVED, That the Board of Commissioners hereby approves the Internal Audit Plan, appended to these minutes as Attachment B, for the remainder of Fiscal Year 2005. The Internal Audit Plan was submitted and discussed at the Finance Committee meeting on February 15, 2005. The audit plan is subject to slight modification pending special projects that may require priority attention. Motion by Commissioner Haggart, seconded by Commissioner Rios, to approve the resolution. Discussion: Internal Auditor Holloway reported that the Internal Audit Plan is based on the risk assessment from comments received by management and the commissioners. He noted that the plan is flexible and may change as circumstances require. The Commissioners acknowledged that some adjustments might be necessary due to urgent projects. Action: Carried unanimously. GENERAL MANAGER'S REMARKS December Customer Survey. General Manager Novick reported that an executive summary of the Customer Survey conducted in December was included with the Board meeting packet. The survey specifically measures the effectiveness of communications activities over the last year, although it also contains questions regarding overall satisfaction and favorability, which are a staple of the spring survey. He noted that given some of the negative publicity directed toward the BWL over the last several months, survey results were very encouraging, with overall satisfaction and favorability remaining steady. The survey provides direction for our communications activities in community sponsorships and activities, radio and TV campaign, lead service lines, and the Connections newsletter. Addy Awards. General Manager Novick reported that the Lansing Advertising Club held its annual awards ceremonies on March I lth and work performed for the BWL over the past year was heavily represented. Mr. Novick congratulated Pace & Partners, the BWL's advertising agency, for taking top honors with nine awards, including five for work performed on BWL projects. He also commended Queue Creative, formerly known as The Foresight Group, for winning three awards for the corporate brochure produced for the BWL last year. Commissioner Rios echoed Mr. Novick's comments and noted that it is a real tribute for the hard work and recognition these two local advertising agencies have achieved. Commissioner Smith commended John Strickler and staff for responding to the Commissioners' request for a fresh approach and focus, such as having a recognizable theme, The Lugnuts "Plug into Lansing" TV spot. Draft Minutes—subject to Board Approval on 5124105 Board Meeting Page 55 March 22,2005 COMMISSIONERS' COMMENTS Chair Robin Smith announced that she is appointing Commissioner Ron Callen chair of the Finance Committee for the remainder of this fiscal year ending June 30, 2005, to fill the position held by former Commissioner Nancy Duncan who resigned as of February 28, 2005. Chair Smith also appointed an ad hoc committee to review the Board's Rules of Procedure for updating. Committee members are: Cominissioners Calkins, Rios, Wonch, and Smith. ABSENCES On motion by Commissioner Rios and seconded by Commissioner Haggart, that the absence of Commissioner Wonch be excused. Carried unanimously. PUBLIC COMMENTS There were no public comments. ADJOURNMENT On motion by Commissioner Joseph, seconded by Commissioner Rios, the meeting adjourned at 7:34 p.m. /s/Mary E. Sova, Secretary Draft Filed with Lansing City Clerk April 5, 2005 Draft Minutes—subject to Board Approval on 5124105 ATTACHMENT A Lansing Board of Water and Light Draft Internal Audit Charter Mission: The mission of internal audit is to provide independent, objective auditing and consulting services to the Board of Commissioners, enabling the Board to better serve customers, employees, and the community. Purpose: Internal audit's purpose is to add value and improve operations. It helps BWL accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. Independence: The Internal Auditor is appointed annually by the Board of Commissioners, and reports to them through the Chair of the Finance Committee. For administrative purposes, the Internal Auditor also reports to the Director and General Manager. To ensure independence, the internal audit function shall have no direct responsibility or any authority over any of the activities or operations of the BWL. Authority: Internal Audit shall have unrestricted access to all activities, records, properties and personnel. All processes, activities, and responsibility areas are subject to audit. Responsibility and Scope: Management is responsible for establishing and maintaining risk management, control, and governance processes. Internal audit is responsible to determine whether management's processes are adequate and functioning in a manner to ensure: • Risks are appropriately identified and managed. • Significant financial, managerial, and operating information is accurate, reliable, and timely, • Resources are acquired economically, used efficiently, and adequately protected. • Employees' actions are in compliance with policies, procedures, standards, laws, regulations and contracts. • Programs, plans, and objectives are achieved. Standards: The Internal Auditor shall comply with the International Standards for the Professional Practice of Internal Auditing of The Institute of Internal Auditors. The Internal Auditor shall consider and, where appropriate, comply with Statements on Auditing Standards of the American Institute of Certified Public Accountants. ATTACHMENT B Proposed Internal Audit Annual Audit Plan FY 05 Budget Hours Internal Audits Travel 120 P-Card 120 Fuel 160 Cash Controls 120 Continuous Audit: Org Risk Assessment 4 Inventory 4 Cash Counts 4 Vehicle/Equip 4 Contract Reviews 4 Projects: Follow up External Audit 90 Company Meetings: Board Meeting 6 Board Meeting - COW 3 Board - Finance Committee 4 Executive Staff 36 Other Staff 12 President/Mgr Meetings 1 Safety Meetings 2 Benefits/United Way/Other 1 Performance Monitoring: KPI's 4 Monthly Report 4 Training: Seminar 8 IIA 2 MSCPA 2 Company Training/Self 4 Visio 4 APPA Conference 24 Misc Research Audit/Acct. Stds. 6 Office Set-up/Tools 6 Vacations 17 Total Hours 776