2.4. ERMUSR 09-08-2015 - Laserfiche WebLink

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2.3 Loss-of-Revenue Payments. Subject to Sections 2.4, 2.5, 2.6, and 2.7, the Municipal shall annually pay the Cooperative the amounts described in this Section as loss-of-revenue compensation. (a) For each Affected Area except for Area 1, an amount equal to the result of multiplying twenty-one mills ($0.021) times each kilowatt hour of electric energy sold by the Municipal to each third party to whom the Municipal provides retail electric service in the Affected Area for the period of ten (10) years commencing on the first full year ending in December 31 that the Municipal provides service after the Transfer Date. (b) For Area 1, an amount equal to the result of multiplying twenty-two mills ($0.022) times each kilowatt hour of electric energy sold by the Municipal to each third party to whom the Municipal provides retail electric service in Area 1 for the period of ten (10) years commencing on the Transfer Date. The Parties acknowledge and agree that the additional compensation for Area 1 is contingent upon the deferral of the Municipal constructing a tie line, anticipated from the City boundary on County Road 12 near the intersection with County Road 40 to the Elk River Station 14 Bank 4, and the Parties entering a separate interconnection agreement, as described in Section 2.8. In the event that the Municipal must construct a tie line in Area 1 within the ten-year period commencing with the Transfer Date, the loss-of-revenue compensation for Area 1 for the years remaining in the this ten-year period shall be the amount stated in Section 2.3(a). 2.4 Indexing. The Parties will annually establish an indexed mill rate for the loss-of-revenue specified in Section 2.3. The index will be established as follows: (a) The Parties will use the Gross Domestic Product — Implicit Price Deflator prepared by the Bureau of Economic Analysis of the United States Department of 5 54