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UTILITY COMMITTEE AGENDA JANUARY 27, 2014 - 5:30 P.M. CITY HALL COUNCIL CHAMBERS 15 LOOCKERMAN PLAZA DOVER, DELAWARE Public comments are welcomed on any item and will be permitted at appropriate times. When possible, please notify the City Clerk (736-7008 or e-mail at CityClerk@dover.de.us) should you wish to be recognized. AGENDA ADDITIONS/DELETIONS 1. Explanation of PJM (Pennsylvania, Jersey, Maryland Power Pool) Reactive Service Charges - Robert Trinnear, The Energy Authority 2. Permanent Easement and Temporary Workspace Agreements - Eastern Shore Natural Gas (Staff Recommends Authorizing the City Manager or His Designated Staff to Execute the Easement Agreement and Other Necessary Agreements with Eastern Shore Natural Gas (ESNG) to Facilitate the Construction of the Proposed 16" Natural Gas Pipeline Across Lands Owned by the City of Dover, as Depicted in the Referenced Agreements. Financial Consideration for the Easements Shall Be Delegated to the City Manager and the City Manager Will Notify City Council of the Results.) (Due to Time Constraints, This Item Has Been Placed on the Council Agenda for the Meeting Being Held Later in the Evening) 3. Easements and Rights-of-Way between City of Dover and Delmarva Power & Light Company (Staff Recommends Authorizing the City Manager to Execute the Final Versions of All Components of Document "A", Document "B", and Document "C" for the Granting of Easements and Rights-of-Way to Delmarva Power & Light Company for the Proposed Construction, Operation, and Maintenance of Power Lines and Structures Associated with the Transmission of Electric Power from the Garrison Energy Center (GEC) to the Cartanza Substation; and Authorizing the City Manager to Amend the Original Lease Between the City of Dover and the Garrison Energy Center, LLC to Add the Acres Described Within the Documents (A Total of 8.4301 Acres) in Accordance with the Rents Described in the Lease) (Due to Time Constraints, This Item Has Been Placed on the Council Agenda for the Meeting Being Held Later in the Evening) 4. Adjournment by 5:55 p.m. /tm S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\Committee-Agendas\2014\01-27-2014 UTILITY.wpd THE AGENDA ITEMS AS LISTED MAY NOT BE CONSIDERED IN SEQUENCE. THIS AGENDA IS SUBJECT TO CHANGE TO INCLUDE THE ADDITION OR THE DELETION OF ITEMS, INCLUDING EXECUTIVE SESSIONS.

Reactive Service Charges Update January 2013

What are Reactive Services Charges? Reactive Services are used to provide voltage control on the power grid Reactive Services provided by Installing equipment on transmission system Changing MVAR output of generators Reactive Services Charges Credits to generation Charges to load CONFIDENTIAL & PROPRIETARY

What has changed PJM Rule Change – Effective date 12/1/2012 Small impact projected Changed allocation of Reactive Service costs Result of Rule Change Increase in Reactive Service Costs being allocated to LSEs such as Dover Large Actual Monetary Impact CONFIDENTIAL & PROPRIETARY

Reactive Services Charges CONFIDENTIAL & PROPRIETARY

What is being done? PJM Stakeholder process Stakeholders have been very vocal Communicating the magnitude of the change Call for immediate change to tariff Energy Market Uplift Senior Task Force Considering Potential remedies Potential tariff revisions in June 2014 PJM $25 - $30m error Adjustments will begin to appear in January bills Lower Reactive charges moving forward Implement New Scheduling Procedures Reactive support for transfer interfaces CONFIDENTIAL & PROPRIETARY

ACTION FORM PROCEEDING: Utility Committee DEPARTMENT OF ORIGIN: City Manager’s Office DATE SUBMITTED: January 22, 2014 PREPARED BY: Scott D. Koenig, P.E., City Manager and William G. Neaton, Economic Dev. Manager SUBJECT: Permanent Easement and Temporary Workspace Agreement – Eastern Shore Natural Gas REFERENCE: N/A RELATED PROJECT: Garrison Oak Technology Park REVIEWED BY: Scott D. Koenig, P.E., City Manager and William G. Neaton, Economic Dev. Manager EXHIBITS: Exhibit A – Permanent Easement Agreement; Exhibit B – Temporary Workspace Agreement; Exhibit C – Temporary Workspace Agreement; Exhibit D – Authorization to use existing utility easement in GOTP EXPENDITURE REQUIRED: N/A AMOUNT BUDGETED: N/A FUNDING SOURCE (Dept./Page in CIP & Budget): TIME TIMETABLE: Immediate RECOMMENDED ACTION: Authorize the City Manager or his designated staff to execute the easement agreement and other necessary agreements with Eastern Shore Natural Gas (ESNG) to facilitate the construction of the proposed 16” natural gas pipeline across lands owned by the City of Dover as depicted in the referenced agreements. Financial consideration for the easements shall be delegated to the City Manager and the City Manager will notify City Council of the results. BACKGROUND AND ANALYSIS The City proposes to grant a Permanent Easement as described in the Permanent Easement Agreement (Tax Parcel No.: LC-05-068.00-02-07.00-000 P/O) to Eastern Shore Natural Gas (ESNG) for the purpose of allowing Eastern Shore Natural Gas to construct a 16” natural gas pipeline to service the Garrison Energy Center (GEC). The location and description of the proposed permanent easement is detailed in Exhibit A. In addition, the proposed construction will require the use of various temporary workspaces as described in Exhibit B and Exhibit C. Upon completion of the construction of the pipeline project, all rights conveyed to ESNG by these temporary workspace agreements will terminate. Exhibit D allows ESNG to use a portion of an existing 40-foot wide utility easement that is generally described as being bisected by the lot line between Lot #7 and Lot #5, as shown on Plot Book 111/19 and on Plot Book 117/98. Financial consideration for the easements and temporary workspaces is currently under negotiation; however, time is of the essence to begin construction.

ACTION FORM PROCEEDING: Utility Committee DEPARTMENT OF ORIGIN: City Manager’s Office DATE SUBMITTED: January 22, 2014 PREPARED BY: William G. Neaton, Economic Dev. Manager & Scott D. Koenig, P.E. City Manager SUBJECT: Easements and Rights-of-Way between City of Dover and Delmarva Power & Light Company REFERENCE: N/A RELATED PROJECT: Garrison Oak Technology Park REVIEWED BY: Scott Koenig, City Manager and William G. Neaton, Economic Development Director for City of Dover EXHIBITS: Document “A”, Document “B”, Document “C” EXPENDITURE REQUIRED: N/A AMOUNT BUDGETED: N/A FUNDING SOURCE (Dept./Page in CIP & Budget): TIME TIMETABLE: Immediate RECOMMENDED ACTION: Authorize the City Manager to execute the final versions of all components of Document “A”, Document “B” and Document “C” for the granting of easements and rights-of-way to Delmarva Power & Light Company for the proposed construction, operation, and maintenance of power lines and structures associated with the transmission of electric power from the Garrison Energy Center (GEC) to the Cartanza substation. In addition, authorize the City Manager to amend the original lease between the City of Dover and the Garrison Energy Center, LLC to add the acres described within the documents (a total of 8.4301 acres) in accordance with the rents described in the lease. BACKGROUND AND ANALYSIS The City proposes to grant a series of easements and rights-of-way to Delmarva Power & Light Company for the proposed construction, operation, and maintenance of power lines and structures associated with the transmission of electric power from the Garrison Energy Center (GEC) to the Cartanza substation. Document “A” describes: Lot 6&7 (Tax Map No. LC-05-068.00-07.00 Lot 7 and LC-05-068.00-02-06.00 Lot 6), the lands within the Garrison Oak Technical Park, having been granted to Owner by deed dated August 30, 1999, which is recorded in Book 327, Page 136, filed in the Office of the Recorder of Deeds in and for Kent County, Delaware. (1.2494 acres – Lot 7); (2.1410 acres – Lot 6) Shallow Well (Tax Map No. LC-059.00-01-28.01), the land on the east side of White Oak road, having been granted to Owner by deed filed November 1, 1990, which is recorded in Book C49, Page 84, filed in the Office of the Recorder of Deeds in and for Kent County, Delaware. (0.1872 acres) Document “B” describes: An easement of varying width on the Cartanza Substation Property (Tax Map No. LC-00-059.00-01-20.01 (Portion of)) as depicted in the document. (3.7300 acres)

Document “C” describes: A shared easement and right-of-way across Tax Parcel No. LC-00-059.01-20.01. (1.1225 Acres +/-) Each of these easements will be conveyed to Delmarva Power & Light Company for a nominal fee as described in the documents. In addition, the City Manager is seeking authorization to amend the original lease between the City of Dover and the Garrison Energy Center, LLC to add the acres described above (a total of 8.4301 acres) in accordance with the rents described in the document.