HomeMy WebLinkAboutA4. MOU License for NWEnergy
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Natalie Meyer, Sustainability Program Manager
Craig Woolard, Public Works Director
Chuck Winn, Assistant City Manager SUBJECT: Memorandum of Understanding and License Agreement for the
NorthWestern Energy Bozeman Solar Pilot Project at the Water Reclamation Facility
MEETING DATE: February 8, 2016
AGENDA ITEM TYPE: Action
RECOMMENDED MOTION: I hereby move to authorize the City Manager to sign a
Memorandum of Understanding and License Agreement to allow NorthWestern Energy to
develop, own, and operate a utility-scale solar photovoltaic (PV) array on city property located at
the Water Reclamation Facility.
BACKGROUND: In partnership with the City of Bozeman, NorthWestern Energy is
planning a pilot project that will test utility-scale solar PV on the grid. The growth of solar PV
and emergence of new technologies are changing electric utilities across the country. Variable
and distributed renewable energy sources, such as solar PV, are expanding rapidly in Bozeman
and throughout Montana. There are growing expectations for electric utilities to offer new sources of clean and renewable, yet intermittent energy sources. Offering variable and distributed
sources of energy demands more out of our traditional grid.
On June 3, 2015, the City of Bozeman and NorthWestern Energy jointly hosted a public
Sustainable Energy Workshop to discuss the opportunities and challenges related to renewable energy. At this meeting, NorthWestern Energy announced plans to invest $3 Million dollars into
sustainable energy pilot projects in their Montana service territory, with the first $1 Million
committed to the Bozeman area. NorthWestern Energy is undertaking several pilot projects that
will help them better understand the impacts of renewable and distributed energy on various
aspects of electric utility service.
Bozeman Pilot Project Description
Following the Sustainable Energy Workshop, NorthWestern Energy formed a steering
committee that included representatives from NorthWestern, the City of Bozeman, and Montana State University to help develop Bozeman’s sustainable energy project. Over a period of several
months, the steering committee decided to test three technologies as part of the Bozeman Pilot
Project: 1) Utility-scale Solar PV, 2) Advanced Inverters, and 3) Enhanced Metering for
residential and commercial customers. Together, the three technologies will provide valuable
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data to NorthWestern Energy regarding generation capacity, system reliability, power quality,
customer usage patterns, and overall management of an intermittent energy resource. Based on
engineering estimates, the solar PV plant would have a nameplate capacity of up to 300kW,
which would generate roughly 398,000 kWh per year. A solar plant of this size would require a land area of two to three acres.
NorthWestern Energy’s goal for the pilot project is to evaluate long-term sustainable models for
the integration of renewable energy. The data collected from the Bozeman pilot project will
concurrently test several key areas, including: community solar, load peak shaving, integration of solar to the grid, and virtual-metering with data recording for residential and commercial
customers. Data collected from the solar pilot will be used to explore renewable energy rate
models to help inform future planning and investment, including rate models for community
solar.
The City’s goal for this project is to help satisfy our commitments under the Mayors’ Climate
Protection Agreement (signed in 2006) and under our adopted Municipal and Community
Climate Action Plans (adopted in 2008 and 2011). Participating in this pilot project as a partner
gives the City an opportunity to help advance local renewable energy and participate in the
shaping of NorthWestern Energy’s long-term vision for distributed, renewable energy.
Project Location
The steering committee surveyed a variety of locations in the Bozeman area for the pilot project
and ultimately identified land that is owned by the City of Bozeman at the Water Reclamation Facility on Moss Bridge Road. Some of the factors the steering committee considered during site
selection were zoning, future land use and facility plans, neighboring developments, solar access,
floodplains, proximity to NorthWestern Energy infrastructure, expansion capacity, and
replicability of the pilot project. Land located at the Water Reclamation Facility meets all the
criteria for the pilot project.
The proposed pilot project site is located within Section 26, a portion of Parcel B of Certificate
of Survey 473D, as is illustrated on Exhibit A in the attached License Agreement. It includes 2.5
acres of land to the southwest of the main Water Reclamation Facility operations. The project
site is bordered by Infiltration Percolation (IP) Beds and Sludge Storage Lagoons to the north and west, the Frontage Road and Interstate-90 to the southwest, and a watercourse to the east.
The surrounding features limit potential land use options. Historically, there was an agricultural
farm lease associated with the project site, but the lease is inactive. There are no current or
planned water reclamation related uses for this portion of the land parcel. Under the License
Agreement, the City Commission may terminate the agreement with six months’ notice if the Commission determines that the site is necessary for uses related to the City’s Water
Reclamation Facility operations.
The project will include a utility interconnection to a solar PV plant consisting of solar modules,
inverters, monitoring and communication equipment, and service parking lot. A conceptual design is provided in Exhibit A of the attached License Agreement.
Memorandum of Understanding and License Agreement
In consideration of the mutually beneficial partnership, the City of Bozeman will license the land to NorthWestern Energy for $1.00 for a five year research and data collection period. After this
time, the license may be extended or renegotiated. Under the License Agreement, the City of
Bozeman will have access to the data generated from the pilot project.
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NorthWestern Energy will be responsible for all costs involved with constructing, maintaining,
repairing, and removing the solar PV plant. NorthWestern Energy will own the infrastructure and
be responsible for all taxes. Upon pilot project completion and removal, NorthWestern Energy will fully restore the property to its previous condition.
UNRESOLVED ISSUES: None.
ALTERNATIVES: As recommended by the Commission.
FISCAL EFFECTS: While city staff time may be required during project and research
development, the pilot project will not impact city budgets or utility rates.
Attachments: Memorandum of Understanding License Agreement
Report compiled on: January 28, 2016
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Memorandum of Understanding Page 1
MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING (“MOU”) is entered into this ______ day of
February 2016, between the City of Bozeman, a self-governing municipality operating pursuant to its Charter and the laws of the State of Montana, with a mailing address of P.O. Box 1230,
Bozeman, Montana 59771-1230, (the “City”) and NorthWestern Corporation d/b/a NorthWestern
Energy, a Delaware corporation, of 40 East Broadway, Butte, Montana 59701-9394, (“NWE”, and
collectively with the City the “Parties”) and provides as follows:
1. PURPOSE:
This MOU is intended to describe the goals, terms, conditions and understandings of the
parties regarding the Bozeman Pilot Solar Project, a collaborative effort between the City, NWE, and Montana State University (the “Project”). The Project consists of a solar array and
related infrastructure to be constructed, owned and operated by NWE on property owned by
the City. The purpose of the Project is to evaluate the feasibility of utility-scale solar infrastructure.
2. RECITALS:
i) NWE is a public utility that is investigating the technological and operational issues and
opportunities regarding utility-scale solar infrastructure and its impact on customers and
the electrical system. ii) The City has committed to advancing renewable energy development in Bozeman and
Montana by adopting the Mayors’ Climate Protection Agreement (signed in 2006) and
Municipal and Community Climate Action Plans (adopted in 2008 and 2011).
iii) On June 3, 2015 NWE, the City, and the U.S. Department of Energy Sunshot Solar
Outreach Partnership presented the Bozeman Sustainable Workshop, where NWE announced it will invest up to $1 million in the Project.
iv) NorthWestern Energy’s goal for the Project is to understand the impacts of solar energy
on the electric utility and to use the Project’s data to develop cost effective solutions for their customers. NWE believes that participation in the Project will advance its renewable
energy goals.
v) The City’s goal for this Project is to address commitments under the Mayors’ Climate Protection Agreement and the Municipal and Community Climate Action Plans. The City
believes that its participation in the Project will advance the City’s renewable energy goals.
3. AGREEMENT:
i) Project Site. The City agrees to grant NWE permission to install, operate, monitor,
maintain, repair and remove the equipment, facilities and improvements as reasonably necessary to develop the Project upon real property owned by the City as further
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Memorandum of Understanding Page 2
described in the License Agreement shown as Exhibit 1 to this Agreement, which is incorporated herein by this reference.
ii) Project Construction. NWE agrees to construct the Project, which will include a utility
interconnection to solar photovoltaic (“PV”) plant consisting of solar modules, inverter(s),
racking, monitoring and communication equipment, and a service parking lot.
iii) Mutual Cooperation. The City and NWE agree to cooperate in the development of the Project to extent feasible in an effort to construct, maintain and operate the Project in accordance with the mutual goals of each party.
iv) Data Sharing. NWE will share aggregate time-of-use data generated from the Project to
meet the City’s goals under this MOU including, but not limited to, aggregated usage data
by sector (industrial, commercial, and residential), the solar energy output, and detailed project costs. It is understood that the data shared shall not be required to include any
information that would identify individuals or property addresses of NWE customers.
v) MSU Involvement. NWE and the City will aide MSU in furthering solar research by
allowing supervised site access, the installation of monitoring equipment that is pre-approved in writing by both Parties, and the sharing of available aggregate data generated
from the Project, as described and subject to the limitations in Section 3(iv). MSU’s
access to the Site shall be as an invitee of NWE, supervised by NWE personnel.
vi) Public Relations. The City and NWE agree to collaborate on all press releases and media interactions.
4. TIME OF THE ESSENCE:
Time is and shall be deemed of the essence with respect to the performance of each
provision of this Agreement.
5. ENTIRE AGREEMENT:
This MOU and all Exhibits attached hereto constitute the entire agreement between the
Parties and supersedes any prior or contemporaneous oral or written representations or
agreements. 6. HEADINGS:
The headings are inserted for convenience only and are not to be interpreted as a part of
this Agreement.
7. AMENDMENTS: This Agreement shall not be changed except if done in writing signed by the City and
NWE.
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Memorandum of Understanding Page 3
8. NOTICE:
The effective date of any notices or other written communications hereunder shall be deemed to occur (i) upon delivery, if delivered in person or by electronic mail with read receipt;
(ii) one business day after having been deposited for overnight delivery with any reputable
overnight courier service, or (iii) three business days after having been deposited in any post
office or mail depository regularly maintained by the U.S. Postal Service and sent by registered or certified mail, postage prepaid, return receipt requested, to the address as set
forth in the introduction to this Agreement. Notices shall be sent to:
If to City:
Natalie Meyer, Sustainability Program Manager
121 N. Rouse Ave.
Bozeman, MT 59771 nmeyer@bozeman.net
If to NWE: Jonathan Shafer, Engineer – Automation and Technology 11 East Park St.
Butte, MT 59701
Jonathan.Shafer@northwestern.com
and
Pat Asay, Manager - NorthWestern Energy Lands and Permitting 11 East Park St.
Butte, MT 59701
Pat. Asay@northwestern.com
9. CONTROLLING LAW:
This Agreement shall be interpreted under the laws of the State of Montana.
10. INTERPRETATION:
This Agreement has been reviewed by both parties, each of whom has had the
opportunity to consult with independent counsel regarding it and has done so to the extent that such party desired. No stricter construction or interpretation of the terms hereof shall be applied against either party as the drafter hereof.
11. NO THIRD PARTY BENEFICIARY:
This MOU is for the exclusive benefit of the parties, does not constitute a third-party
beneficiary agreement, and may not be relied upon or enforced by a third party.
12. BINDING EFFECT:
This Agreement shall be binding upon and inure to the benefit of the parties and their
successors and assigns.
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13. EQUAL OPPORTUNITY:
NWE shall have a policy to provide equal employment opportunity in accordance with all
applicable state and federal anti-discrimination laws, regulations, and contracts. NWE shall not refuse employment to a person, bar a person from employment, or discriminate against
a person in compensation or in a term, condition, or privilege of employment because of
race, color, religion, creed, sex, age, marital status, national origin, actual or perceived sexual orientation, gender identity, physical or mental disability, except when the reasonable demands of the position require an age, physical or mental disability, marital status or sex
distinction. NWE shall require these nondiscrimination terms of its Subcontractors fulfilling
NWE’s obligations under this MOU.
CITY OF BOZEMAN NORTHWESTERN ENERGY
By: By:
Its: Its:
Date: Date:
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License Agreement Page 1
EXHIBIT “1”
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (“Agreement” or “License”) is entered into this ______ day of February, 2016 (the “Effective Date”), between City of Bozeman, a self-governing municipality
operating pursuant to its Charter and the laws of the State of Montana, with a mailing address
of P.O. Box 1230, Bozeman, Montana 59771-1230, (the “City”) and NorthWestern Corporation
d/b/a NorthWestern Energy, a Delaware corporation, of 40 East Broadway, Butte, Montana 59701-9394, (“NWE”, and collectively with the City the “Parties”) and provides as follows:
1. PURPOSE:
This Agreement is intended for the City to grant a license to NWE, to allow it to utilize the real property necessary for the siting and placement of solar array panels and associated
solar equipment for the Solar Project that is a collaborative effort between the City, NWE, and
Montana State University (the “Project”). This purpose of the Project is to evaluate sustainable renewable energy and the integration of such projects to the existing power grid.
2. PROPERTY:
In consideration of $1.00, and other good and valuable consideration, the City does
hereby grant NWE permission, revocable and terminable as provided herein, to install, operate, monitor, maintain, repair and remove the equipment, facilities and improvements as
reasonably necessary to develop the solar photovoltaic plant as anticipated by the Project
upon real property owned by the City, which is located in Gallatin County, Montana, and is more particularly described as follows:
TOWNSHIP 1 SOUTH, RANGE 9 WEST, P.M.M.
Section 26: A portion of Parcel B of Certificate of Survey 473D, as is illustrated on Exhibit
A (“the Site”).
3. TITLE:
NWE hereby acknowledges this license grants a privilege and not an interest in real
property or the title of the City to the above described property and NWE agrees never to deny
such title or claim, at anytime, or claim any interest or estate of any kind or extent whatsoever
in the property or Site by virtue of this Agreement or NWE’s occupancy or use hereunder.
4. TERM AND TERMINATION:
The term of this Agreement shall commence on _____________, 2016 and continue for a
period of five (5) years. At the end of said five (5) year period, both parties may agree to either extend this Agreement for five (5) additional years, or in good faith renegotiate the
terms of this Agreement. On termination of this Agreement and if it is not extended or
renegotiated, NWE shall surrender the Site to the City, in as good condition as it was at the
time of NWE's entry into this Agreement, removing the solar photovoltaic (“PV”) plant, along with any other personal property and other items placed on the Site by NWE, or anyone
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License Agreement Page 2
claiming under NWE and promptly restoring the City’s Real Property including returning the original contour, removing the service parking lot described in Section 6, and re-vegetating the same with suitable native vegetation to the City’s satisfaction.
This License is terminable by mutual agreement of the Parties for any reason before the expiration of its term. The City may by resolution adopted by the Bozeman City Commission
(“Commission”) terminate this Agreement upon six (6) months’ written notice to NWE if the
Commission determines, at its sole discretion, that the Site is necessary for uses related to the City’s water reclamation operations. Should the City terminate this License within its initial five (5) year term, City shall reimburse NWE for its reasonable costs of removal of the solar PV
plant and restoring the City’s Real Property as described in this Section 4. NWE shall provide
City with documents reasonably satisfactory to the City evidencing such costs of removal and restoration.
5. USE OF PROPERTY:
The City agrees to allow NWE, MSU, and NWE’s contractors access to the Site for installation, operation, monitoring, maintenance, repair and removal of the solar PV plant, and related activities. Access to the Site during construction of the Project will be over the existing
Moss Bridge Road access that crosses the Bozeman City Water Reclamation Facility
(“WRF”). To ensure security of WRF operations and protect the Project Site, after Project construction is complete NWE and its invitees will access the Site through the main front entry
of the WRF after checking in with WRF reception staff, except in exigent circumstances where
NWE’s immediate access to the Site is reasonably necessary in NWE’s discretion to prevent injury to persons or property. The City shall provide NWE with the means to access the Site under such circumstances.
Upon prior notice to NWE, the City shall have the right of access and entry upon the Site at any time to make inspections and to ensure compliance with the terms of this Agreement,
provided it shall first give notice to NWE of its desire to access the Site, so that NWE may
arrange for a NWE escort, and to comply with all industry standard safety practices. NWE shall not commit, or suffer to be committed, any waste on the Site, nor shall NWE
maintain, commit, or permit the maintenance of any nuisance on the Site or use the Site for
any unlawful purpose.
6. CONSTRUCTION:
All construction on the property will meet applicable City requirements. NWE shall bear all
costs and expense of constructing, maintaining, repairing and removing the solar PV plant. NWE shall keep the Site (and the City’s adjoining property) free of all liens, assessments or any other encumbrances arising out of the NWE’s construction, maintenance repair and
removal of the solar photovoltaic plant. NWE shall be responsible for all taxes on the solar
photovoltaic plant located on the Site.
NWE may construct access road(s) and service lot(s) to provide reasonable access for
construction and maintenance of the Site and solar PV plant, subject to the City’s approval of
such plans.
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7. THE ENVIRONMENT:
Should NWE discover the presence of Hazardous materials on, under, in or about the Site, it shall immediately notify the City. Hazardous Materials is defined as any substance, the
presence of which requires investigation or remediation under any federal, state or local
statute, regulation, ordinance, order, action, policy or common law.
8. FENCING:
NWE shall have the right to construct and maintain adequate fencing and gates necessary for its use of the Site. NWE will coordinate with the City for construction of said fence and
gates as to not interfere with operation of the City Water Reclamation Facility and to meet City
requirements. During construction of the Project, NWE will install a construction fence with
WRF accessible locked gate to maintain the security of the WRF.
9. COMPLIANCE WITH LAWS AND REGULATIONS:
NWE agrees to comply with all applicable local, county, state and federal laws and
regulations applicable to its use of the Site. NWE shall provide all notices, comply with all applicable laws, ordinances, rules, and regulations, obtain all necessary permits, licenses,
site development approvals, and inspections from applicable governmental authorities, pay
all fees and charges in connection therewith, and perform all surveys and locations necessary for the timely completion of the Project.
10. INDEMNIFICATION:
To the fullest extent permitted by law, NWE, recognizing it exercises its privileges under
this Agreement at its own risk, shall release, and shall protect, defend, indemnify, and hold
harmless the City and its agents, representatives, employees, and officers from and against
any and all claims, demands, actions, fees and costs (including attorney’s fees and the
costs and fees of expert witness and consultants), losses, expenses, liabilities (including
liability where activity is inherently or intrinsically dangerous) or damages of whatever kind
or nature connected therewith and without limit and without regard to the cause or causes
thereof or the negligence of any party or parties that may be asserted against, recovered
from or suffered by the City, occasioned by, growing or arising out of or resulting from or in
any way related to: (i) the occupation or use of the Site by NWE; (ii) the negligent, reckless,
or intentional misconduct of NWE, its officers, employees, or agents on or related to the Site
or Project; and (iii) any negligent, reckless, or intentional misconduct of any of the NWE’s
guests, invitees, contractors, or subcontractors on or related to the Project or the Site.
These indemnification obligations shall not apply to claims, demands, actions, fees and
costs, losses, expenses, liabilities or damages of whatever kind occasioned by, growing or
arising out of or resulting from or in any way related to: (i) conditions on the Site, including
the presence of Hazardous Materials, in existence prior to the Effective Date of this License;
and (ii) the negligent, reckless, or intentional misconduct of the City, its officers, employees,
or agents on or related to the Site or Project.
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Such obligation shall not be construed to negate, abridge, or reduce other rights or obligations of indemnity that would otherwise exist as to an indemnitee described in this Section. The indemnification obligations of this Section must not be construed to negate,
abridge, or reduce any common-law or statutory rights of the indemnitee(s) which would
otherwise exist as to such indemnitee(s).
NWE’s indemnity under this Section shall be without regard to and without any right to
contribution from any insurance maintained by the City.
11. INSURANCE:
During the term of this Agreement NWE shall maintain insurance, which may include self-
insured retention and excess coverage, with the minimum limits set out below:
Workers’ Compensation – statutory;
Employers’ Liability - $1,000,000 per occurrence; $2,000,000 annual aggregate;
Commercial General Liability - $1,000,000 per occurrence; $2,000,000 annual
aggregate;
Automobile Liability - $1,000,000 property damage/bodily injury; $2,000,000
annual aggregate
Subcontractors hired by NWE to provide services related to the Project on the Site shall
carry insurance in the above amounts and shall name the City of Bozeman as an additional
insured.
12. TIME OF THE ESSENCE: Time is and shall be deemed of the essence with respect to the performance of each
provision of this Agreement.
13. HEADINGS:
The headings are inserted for convenience only and are not to be interpreted as a part of
this Agreement. 14. AMENDMENTS:
This Agreement shall not be changed except if done in writing signed by the City and
NWE. 15. NOTICE: The effective date of any notices or other written communications hereunder shall be
deemed to occur (i) upon delivery, if delivered in person or by electronic mail, with read
receipt; (ii) one business day after having been deposited for overnight delivery with any reputable overnight courier service, or (iii) three business days after having been deposited in
any post office or mail depository regularly maintained by the U.S. Postal Service and sent by
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registered or certified mail, postage prepaid, return receipt requested, to the address as set forth in the introduction to this Agreement. Notices shall be sent to:
If to City:
Natalie Meyer, Sustainability Program Manager 121 N. Rouse Ave.
Bozeman, MT 59771
nmeyer@bozeman.net If to NWE:
Jonathan Shafer, Engineer – Automation and Technology
11 East Park St. Butte, MT 59701
Jonathan.Shafer@northwestern.com
and
Pat Asay, Manager - NorthWestern Energy Lands and Permitting
11 East Park St. Butte, MT 59701
Pat.Asay@northwestern.com
16. CONTROLLING LAW:
This Agreement shall be interpreted under the laws of the State of Montana.
17. INTERPRETATION:
This Agreement has been reviewed by both parties, each of whom has had the
opportunity to consult with independent counsel regarding it and has done so to the extent that such party desired. No stricter construction or interpretation of the terms hereof shall be
applied against either party as the drafter hereof.
18. NO THIRD PARTY BENEFICIARY:
This Agreement is for the exclusive benefit of the parties, does not constitute a third-
party beneficiary agreement, and may not be relied upon or enforced by a third party.
19. BINDING EFFECT:
This Agreement shall be binding upon and inure to the benefit of the parties and their
successors and assigns.
20. EQUAL OPPORTUNITY:
NWE shall have a policy to provide equal employment opportunity in accordance with all applicable state and federal anti-discrimination laws, regulations, and contracts. NWE shall
not refuse employment to a person, bar a person from employment, or discriminate against
a person in compensation or in a term, condition, or privilege of employment because of race, color, religion, creed, sex, age, marital status, national origin, actual or perceived
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sexual orientation, gender identity, physical or mental disability, except when the reasonable demands of the position require an age, physical or mental disability, marital status or sex distinction. NWE shall require these nondiscrimination terms of its Subcontractors fulfilling
NWE’s obligations under this Agreement.
CITY OF BOZEMAN NORTHWESTERN ENERGY
By: By:
Its: Its:
Date: Date:
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License Agreement Page 7
EXHIBIT “A”
Site Overview:
Conceptual Design:
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