05-0103R


RESOLUTION AUTHORIZING MEMBERSHIP APPLICATION AND SERVICE AGREEMENT WITH DULUTH STEAM COOP FOR THE PROVISION TO STEAM SERVICE TO CITY SITES.

BY COUNCILOR STOVER:

     RESOLVED, that the proper city officers are hereby authorized to enter into a steam service agreement and membership application with the Duluth Steam Cooperative Association, substantially in the form of that on file in the office of the city clerk as Public Document No. __________, for the provision of steam service to various city-owned buildings and establishing the terms of service and disconnect.


STATEMENT OF PURPOSE:  The purpose of this resolution is to authorize execution of an agreement with the Duluth Steam Cooperative Association for the provision of steam to various city-owned buildings.


The city is the owner of Duluth Steam which provides steam for heating and cooling purposes to a large number of buildings in the Downtown, Canal Park and East Hillside neighborhoods. At the time that the city acquired the utility from its private owners (who had threatened to abandon the system), it was determined that the most desirable way to operate the system was to assist in creating a cooperative consisting of the major system users and to contract with the cooperative to actually operate the utility. The city, of course, was one of the major users of the utility and so, the city ended up being related to the steam system in three ways: 1.) as the owner of the utility including the Downtown steam plant and the distribution system; 2.) as a member of the cooperative that operates the utility; and 3.) as a customer and consumer of the utility’s steam.


This agreement pertains to the city’s role as a utility customer and is similar to the agreement which the cooperative has with all of its customers. It sets forth the terms and conditions of provision of the steam to the customer.


The major difference from the typical agreement is that the city agreement does not deal with any future costs of disconnecting steam services from its buildings, should it be desired in the future. This will be dealt with by letter and will provide that the city will have the option of disconnecting with its own forces or of having the Coop do the disconnect.

 

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