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<br />AGREEMENT <br /> <br />This Agreement is entered into this day of , 2007, by and between <br />Great River Energy, a Minnesota cooperative corporation, with its principal office at 17845 <br />East Highway 10, Elk River, Minnesota 55330 (the Cooperative), and the City of Elk River, a <br />political subdivision with its principal office at 13065 Orono Parkway NW, Elk River, <br />Minnesota, 55330 (the City). <br /> <br />WITNESSETH <br /> <br />WHEREAS, the Cooperative wishes to develop and operate a 150-200 megawatt simple- <br />cycle electric generation facility fueled primarily with natural gas with fuel-oil back-up (the <br />Project) and a site under serious consideration is adjacent to GRE's existing 230 kV <br />substation and RDF fired generating plant located in the City of Elk River in Sherburne <br />County (the Property); and <br /> <br />WHEREAS, the Cooperative has represented to the City that: <br /> <br />A. The Project will provide significant electric reliability benefits to the City and the <br />surrounding region. The project is environmentally benign as it will utilize <br />natural gas as its primary fuel and it will operate for peaking or emergency power; <br />and <br /> <br />B. Prior to construction the Project will need to be granted a Certificate of Need <br />and a Site Permit from the Minnesota Public Utilities Commission, and an Air <br />Permit from the Minnesota Pollution Control Agency; and <br /> <br />C. For the Project to be economically viable in the City, the Cooperative must have <br />the Minnesota Legislature enact legislation (the Legislation) that would exempt <br />electric generation equipment to be installed at the Property from taxation as <br />personal property; and <br /> <br />D. Even with the exemption contained in the Legislation, the Cooperative has <br />projected that the Project if constructed and operated, would generate taxes of <br />approximately $310,000 annually attributable to the Project's real property and <br />transmission and gas pipeline interconnections; and <br /> <br />E. In order to maximize the probability of having the Legislation enacted, the <br />Cooperative has requested and received a resolution of support for the Project <br />from the City because without the resolution, the Legislature may not enact the <br />Legislation; and <br /> <br />F. Despite City support for the Project and Legislation, GRE may elect not to <br />construct the Plant at the Property. <br /> <br />WHEREAS, the City is willing to honor the Cooperative's request and provide support <br />for the Legislation as set forth in this Agreement in consideration of the promises of the <br />Company set forth herein. <br />