<PAGE>
EXHIBIT 10(o)3
Minnesota Power
Original Sheet No. 1
First Revised Rate Schedule FERC No.
175
WHOLESALE POWER COORDINATION
AND DISPATCH OPERATING AGREEMENT
Between
MINNESOTA POWER, INC.
and
SPLIT ROCK ENERGY LLC
Issued by: Eric R. Norberg
Effective: February 1, 2004
Issued on: January 30, 2004
<PAGE>
Minnesota Power
Original Sheet No. 2
First Revised Rate Schedule FERC No.
175
This WHOLESALE POWER COORDINATION AND DISPATCH OPERATING
AGREEMENT
("AGREEMENT") dated the 14th day of April,
2000, as amended as of January 30,
2004, between Minnesota Power, Inc, a
Minnesota corporation ("MP"), and SPLIT
ROCK ENERGY LLC, a Minnesota limited
liability company ("Split Rock"). For
purposes of this AGREEMENT, MP or Split
Rock shall be referred to individually
as a "Party" and collectively as the
"Parties."
RECITALS
WHEREAS, MP is an investor-owned electric utility that owns
electric
generation, transmission and distribution
facilities and is engaged in the
generation, transmission and sale of
electric power and energy to retail
customers in the state of Minnesota and to
wholesale customers in Minnesota and
throughout the Midwest; and
WHEREAS, Great River Energy ("GRE") is an electric cooperative
company
that owns electric generation and
transmission facilities and is engaged in the
generation, transmission, and sale of
electric power and energy at wholesale in
the state of Minnesota; and
WHEREAS, MP and GRE, operate their respective electric systems
within
the interconnected electrical transmission
network in accordance with the
requirements and guidelines set forth by
the Mid-Continent Area Power Pool
("MAPP"); and
WHEREAS, MP and GRE desire to jointly commit their generating
and
purchased power resources for load and
capability requirements under MAPP; and
WHEREAS, Split Rock is a limited liability company, of which GRE is
a
member; and
WHEREAS, MP desires to enter into a power coordination agreement
with
Split Rock setting out the terms and
conditions under which MP will, among other
things, make its generating and purchased
power resources available to Split
Rock, along with GRE's generating and
purchased power resources, to meet the
End-Use Load Obligations of MP and GRE, and
Split Rock will, among other things,
be responsible for meeting MP's load and
capability responsibilities under MAPP.
NOW, THEREFORE, in consideration of the premises and for other good
and
valuable consideration, the receipt,
adequacy and sufficiency of which are
hereby acknowledged, and intending to be
legally bound, MP and Split Rock hereto
agree as follows:
Issued by: Eric R. Norberg
Effective: February 1, 2004
Issued on: January 30, 2004
<PAGE>
Minnesota Power
Original Sheet No. 3
First Revised Rate Schedule FERC No.
175
SECTION 1.
TERM OF AGREEMENT AND DEFINITIONS
Section 1.01 Term of
Agreement.
This AGREEMENT shall become effective on the latest of: (1) the
date
this AGREEMENT is approved by the
Administrator of the RUS or accepted for
filing by any other regulatory agencies as
required by law; or (2) the date
hereof. After such effective date, this
AGREEMENT shall remain in effect until
terminated by either party in accordance
with this AGREEMENT.
Section 1.02 Purpose of
Agreement.
The purpose of this AGREEMENT, among other things, is to establish
the
terms and conditions under which Split Rock
shall: (i) be responsible for the
commitment of MP's Generation Resources,
and the procurement of capacity and
energy, with the Generation Resources of
GRE to serve safely and reliably, the
full requirements of MP's End-Use Loads and
GRE's End-Use Loads; and (ii) be a
member of MAPP and undertake those MAPP
obligations and responsibilities
necessary for Split Rock to assume the MAPP
End-Use Load Obligation for the
combined electric loads of MP and GRE and
to represent the interests of MP and
GRE in MAPP and its subcommittees for that
purpose. Moreover, this agreement
provides the foundation for meeting the
Joint Reporting of Load and Capability
requirements set forth in the MAPP Restated
Agreement, Section 6.4.3 and the
MAPP Generation Reserve Sharing Pool
Handbook, Section 4.2.1.7.
Section 1.03
Definitions.
The following terms, when used herein, shall have the meanings
specified below
a. "Due
Diligence" means the exercise of good faith efforts to perform
a required or requested act on a timely
basis and in accordance with Good
Utility Practice, using the technical and
human resources reasonably available.
b.
"End-Use Load" means the load of persons or other entities that
purchase or produce electric energy for
their own consumption and not for
resale, as defined in the MAPP Restated
Agreement or by any similar successor
organization.
c.
"End-Use Load Obligation" means an obligation imposed by law,
regulation or contract to serve End-Use
Load within the MAPP Region including
any obligation imposed by an assignment of
End-Use Load Obligation, as defined
in the MAPP Restated Agreement, or by any
similar successor organization.
d.
"FERC" means the Federal Energy Regulatory Commission (or its
successor).
e.
"Force Majeure" means any cause beyond the control of the Party
affected, including, without limitation,
the following: acts of God, fire,
flood, landslide, lightning, earthquake,
tornado, storm, freeze, drought,
blight, famine, epidemic or quarantine;
strike, lockout, or other labor
difficulty; act or failure to act on the
part of any Party that impedes or
prevents the others Party's
Issued by: Eric R. Norberg
Effective: February 1, 2004
Issued on: January 30, 2004
<PAGE>
Minnesota Power
Original Sheet No. 4
First Revised Rate Schedule FERC No.
175
performance; theft, casualty, accident,
equipment breakdown, failure or shortage
of, or inability to obtain from usual
sources goods, labor, equipment,
information or drawings, machinery,
supplies, energy, fuel, or materials;
embargo; injunction; litigation or
arbitration with suppliers or manufacturers;
civil unrest, war, civil disorder or
disturbance, explosion, or breach of
contract by any supplier, contractor,
subcontractor, laborer or materialman,
including, but not limited to, failure of
facilities, flood, earthquake, storm,
fire, lightning, epidemic, war, riot, civil
disturbance, labor disturbance,
sabotage, and restraint by court or public
authority.
f.
"Generation Resources" means MP's electric generation resources
and/or
GRE's electric generation resources,
whether owned or under contract.
g.
"Good Utility Practice" means any of the practices, methods, and
acts
engaged in or approved by a significant
portion of the electric utility industry
during the relevant time period, or any of
the practices, methods, and acts
which, in the exercise of reasonable
judgment in light of the facts known at the
time the decision was made, could have been
expected to accomplish the desired
result at the lowest possible cost
consistent with good business practices,
reliability, and safety. Good Utility
Practice is not intended to be limited to
the optimum practice, method, or act to the
exclusion of all others, but rather
as a spectrum of possible practices,
methods, or acts which could have been
expected to accomplish the desired result
at the lowest possible cost consistent
with good business practices, reliability,
and safety. Good Utility Practice
includes due regard for manufacturers'
warranties and the requirements of
regulatory authorities.
h.
[intentionally left blank]
i.
"MAPP" means the Mid-Continent Area Power Pool or its successor
organization.
j.
"MAPP Agreement" means the Mid-Continent Area Power Pool
Restated
Agreement dated January 12, 1996, as
amended, and as may be further amended from
time to time.
k.
"MAPP Generation Reserve Sharing Pool Handbook" means the
Mid-Continent
Area Power Pool Handbook that sets forth
the basic requirements for the approval
of joint reporting of load and capacity
between two or more MAPP End-Use Load
Members.
l.
[intentionally left blank]
m.
[intentionally left blank]
n.
"Power" means either electric capacity or energy or both.
o.
"RUS" means the U.S.D.A. Rural Utilities Service or its
successor.
p.
[intentionally left blank]
SECTION 2.[intentionally left blank]
Issued by: Eric R. Norberg
Effective: February 1, 2004
Issued on: January 30, 2004
<PAGE>
Minnesota Power
Original Sheet No. 5
First Revised Rate Schedule FERC No.
175
SECTION 3.
PARTIES' RESPONSIBILITIES
Section 3.01 Split Rock
Responsibilities.
Section 3.01.1 The responsibilities of Split Rock shall
include:
a.
Establish procedures and operating protocols consistent with
the
provisions hereof governing the
coordination of MP's Generation Resources and
GRE's' Generation Resources to serve
End-Use Load pursuant to this AGREEMENT.
b.
[intentionally left blank]
c.
[intentionally left blank]
d.
Represent MP's End-Use Load interests in NERC and MAPP and perform,
on
behalf of MP, those responsibilities and
undertake those obligations that are
consistent with and required by such
organizations and/or councils.
e.
[intentionally left blank]
f. Take
such other actions and perform such other duties as may be
required in connection with the terms of
this AGREEMENT and approved by MP and
GRE.
Section 3.01.2 Limitation on Split Rock Responsibilities. Nothing
in
this AGREEMENT or otherwise shall be interpreted as requiring
that
Split Rock assume any responsibility, and Split Rock shall not have
any
responsibility, for the physical operation and/or maintenance of
any of
MP's Generation Resources or facilities, employees, fuel
arrangements
or obligations, economic dispatch of MP Generation, control
area
operation, or for any MP debt or other obligations related to
ownership
or operation and maintenance of those resources or facilities.
Section 3.02 MP
Responsibilities.
The responsibilities of MP under this AGREEMENT shall include but
are
not necessarily limited to the
following:
a.
[intentionally left blank]
b.
[intentionally left blank]
c. MP
shall be responsible for the costs of owning and operating its
control center and providing or obtaining
from third parties all necessary
control area functions and services. MP
shall provide to Split Rock control
center information and coordinate control
area functions and services with Split
Rock and/or GRE as reasonably necessary for
Split Rock to fulfill its
obligations hereunder.
d. MP
shall coordinate with Split Rock, and may designate Split Rock
as
its agent, to obtain from third parties the
transmission service necessary to
implement this AGREEMENT.
Issued by: Eric R. Norberg
Effective: February 1, 2004
Issued on: January 30, 2004
<PAGE>
Minnesota Power
Original Sheet No. 6
First Revised Rate Schedule FERC No.
175
SECTION 4.
DISPATCH OF MEMBERS' GENERATION RESOURCES
Section 4.01 Dispatch
and Scheduling.
a.
Split Rock shall provide services that are necessary and
appropriate to
commit and dispatch the Generation
Resources of MP and GRE to serve the combined
End-Use Load of MP and GRE. Split Rock
shall not commit and dispatch MP
Generation Resources to meet loads that are
not End-Use Loads of MP and GRE. MP
operators may take any and all actions that
they reasonably believe, based on
the circumstances and information available
to them at the time, are necessary
and appropriate to avoid or alleviate
emergency conditions or to protect the
safety of persons or property.
b. MP
shall provide and maintain, at its own expense, in accordance
with
specifications and procedures satisfactory
to meet its obligations hereunder,
such telecommunications and other
facilities at its premises as are necessary to
transfer data relating to its Generation
Resources, and other necessary
operating data, to and from Split Rock.
c. The
Parties shall develop and maintain any necessary operating
guidelines to implement the provisions of
this Agreement. Such operating
guidelines shall include a priority of the
use of MP Generation Resources for MP
End-Use Loads and GRE Generation Resources
for GRE End-Use Loads.
Section 4.02 Ownership
and Maintenance of Generation Resources.
a. MP
shall have the responsibility, at its cost, to operate and
maintain
its Generation Resources, including
maintaining any necessary accreditation,
consistent with Good Utility Practice and
any operating practices or protocols
implemented by Split Rock pursuant to this
AGREEMENT.
b. MP
may retire or dispose of any of its existing Generation
Resources,
or choose not to renew or extend the
contractual arrangement
