Exhibit 10.6


 


ELECTRIC SERVICE AGREEMENT


 


This Agreement
is made as of October 3, 2003, by and between Adams-Columbia Electric
Cooperative, of Friendship, Wisconsin (“ACEC” or the “Cooperative”), and United
Wisconsin Grain Producers (“UWGP” or “Member”).


 


PREMISES


 


1.                                       The
Cooperative supplies electric power and energy on a cooperative basis to its
members in and around Adams, Marquette, Waushara, Columbia, and other adjacent
counties in central Wisconsin, and wishes to provide electric power and energy
to Member upon the terms stated in this Agreement.


 


2.                                       UWGP
wishes to be a member of the Cooperative and obtain from the Cooperative, on a
cooperative basis, electric power and energy for the Member’s Friesland ethanol
plant located on the NW 1⁄4 section 27, T13N, R12E (Randolph Township) in
Columbia County, Wisconsin, (hereafter referred to as the “Site”) upon the
terms to be stated in this Agreement.


 


3.                                       Member
further wishes to have the Cooperative request transmission service from the
appropriate transmission providers and to own, operate, and maintain a
substation and appurtenant facilities to supply power to the Site upon the
terms to be stated in this Agreement.


 


4.                                       This
Agreement states the terms of the Agreement between the parties, as
supplemented by the Bylaws, policies, rules, and regulations of the
Cooperative, as they may be modified from time to time, which are incorporated
herein by reference.


 


AGREEMENT


 


In consideration of the above
premises, and for other good and valuable consideration, the parties agree as
follows:


 


1.                                      SPECIFIC
SERVICE REQUIREMENTS AND FACILITIES


 


UWGP selected ACEC to provide
service to UWGP’s proposed ethanol plant near Friesland, Wisconsin.  Said facility was located more than 500’
from the existing local service distribution lines of both ACEC and Alliant
Energy/WP&L.  Member acknowledges
that it had the opportunity to receive service from either ACEC or Alliant
Energy/WP&L, and chose ACEC to supply electric service as permitted by
law.  Electric service will be supplied
to UWGP at both 4,160 volt (nominal) and 277/480 volt (nominal) services on the
site provided by UWGP.


 


1.1                                 Cooperative-owned
facilities and equipment.  ACEC will
arrange for transmission service to the site with the American Transmission
Company, LLC (ATCLLC) at a capacity level not less than ten (10) MW.  The costs for transmission service will be
charged to UWGP on a monthly basis at rates included in Schedule 1
attached.  ACEC will own, operate, and
maintain


 


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a substation at a mutually agreed to location on property provided by
UWGP for this purpose.  ACEC will also
own, operate, and maintain necessary distribution facilities to provide UWGP
with the desired level of service facilities at mutually agreed to
locations.  Schedule 1 was prepared
based on preliminary indications that UWGP desired two primary voltage (4,160
volt) services and five secondary (277/480 volt) services.  By mutual agreement the parties may amend
this Agreement to modify the desired number of service points and the costs
associated with those services.


 


1.2                                 Member-owned
facilities and equipment.  UWGP will
be responsible for the secondary wire leaving each desired secondary-voltage
service point and for the transformer and secondary wire from each desired
primary-voltage service point.  Member
will insure that operation of its facilities will not cause harm from voltage
flickering to other members of the Cooperative, or the customers of other utilities,
by the installation and proper maintenance of soft-start capability for all
motors 150 horsepower and above.


 


2.                                      ELECTRIC
SERVICE GENERAL TERMS AND CONDITIONS


 


2.1                                 UWGP,
agrees prior to receiving service to become a member of the Cooperative, and
shall pay the Membership fee and be bound by the Cooperative’s Bylaws,
policies, rules, and regulations as they may be modified from time to time by
the Cooperative’s membership or Board of Directors.  UWGP acknowledges that it has received a copy of the current
Bylaws.


 


2.2                                 Member
shall provide and maintain suitable locations and electric supply for the
installation of any Cooperative-owned electric facilities or equipment on
Member’s property.  Member agrees to
convey such easements as in Cooperative’s reasonable judgment may be necessary
or convenient for the Cooperative to provide service at the location(s)
described in this Agreement.


 


2.3                                 Member
shall be solely responsible for the design, installation, operation,
maintenance, and safety of any and all Member-supplied electric facilities or
equipment.


 


2.4                                 The
Cooperative shall furnish, install, operate, and maintain the Cooperative-owned
electric equipment or facilities described in Section 1 above to deliver
electric power and energy to the Member, including the means specified to meter
that power and energy.  Metered
quantities shall include all electrical losses incurred on Site to provide
power and energy to the Member.  The
Cooperative does not undertake or assume any responsibility to assist or advise
the Member concerning the design, installation, operation, or maintenance of
electric facilities or equipment supplied and owned by Member.


 


2.5                                 The
Cooperative as owner and operator of the substation will retain the right to
utilize the substation to meet other needs of the Cooperative’s system and the
needs of its membership.  Such usage
will not conflict with the needs of the Member herein.  If the Cooperative uses this facility in
such a manner as to conflict with the needs of the Member, the Cooperative will
be responsible for costs required to remove the conflict.


 


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If the
Cooperative uses the substation in such a manner as to benefit the general
membership other than Member, then the Cooperative shall provide to the Member
a construction credit for the substation based on any incremental cost the
Member paid to expand the substation facilities above the capacity requested by
the Member for its own use, whether or not the Member has used the capacity it
requested for its own use.  Any incremental
costs to be paid by the member and any construction credit eligible for refund
to the Member must have been identified in writing by the Cooperative prior to
construction of said facilities.


 


2.6                                 Electric
equipment or facilities furnished and maintained by the Cooperative on the
Member’s property shall remain the property of the Cooperative, and the
Cooperative may remove it upon reasonable notice upon termination of this
Agreement for any reason.


 


2.7                                 Authorized
representatives or employees of the Cooperative may enter the Member’s premises
at all reasonable times in order to carry out the Cooperative’s
responsibilities under this Agreement, as well as to maintain or remove any
Cooperative- furnished equipment or facilities.


 


2.8                                 Member
shall not interfere with the operation of any Cooperative-owned electric
equipment or facilities, including any metering equipment (whether owned by the
Cooperative or others), and Member shall advise the Cooperative as soon as
possible if Member discovers any problem with the condition or functioning of
Cooperative-owned equipment or facilities. 
Member shall notify the Cooperative immediately if Member discovers that
the condition or operation of any of the Member-supplied equipment or
facilities may pose a risk to any persons or property.


 


2.9                                 The
Cooperative shall use reasonable diligence to provide the power and energy
consistent with the type of electric service being provided to Member.  Should the Cooperative’s supply of electric
power and energy fail or be interrupted, or become defective, through:  a) compliance with any law, ruling, order,
regulation, requirement, or instruction of any federal, state, or municipal
government or any governmental department or agency or any court of competent
jurisdiction; b) Member’s actions or omissions; c) operation of protective
devices; or, d) acts of God, fires, strikes embargoes, wars, insurrection,
riot, or other causes beyond the reasonable control of the Cooperative or the
Cooperative’s wholesale power supplier, neither the Cooperative nor any
wholesale power supplier to the Cooperative shall be liable for any loss or
damages incurred by Member or be deemed to be in breach of this Agreement.  Member acknowledges that the delivery of
electric power and energy may at times be subject to interruption by causes
beyond the control of the Cooperative, including weather conditions, vandalism,
and other interruptions, and the Member assumes the risk of those potential
interruptions.


 


3.                                      PAYMENT
FOR ELECTRIC SERVICE


 


3.1                                 Rates.


 


Member shall pay the Cooperative for all electric service provided
under this Agreement at the rates and upon the terms and conditions set forth
in the rate schedule attached to and


 


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incorporated in this Agreement as Schedule 1, and any revisions or
substitutes subsequently adopted by the Cooperative’s Board of Directors.  The rates set forth herein and attached in
Schedule 1 are based on the cost of providing distribution service at this
site and for securing power supply and transmission services at the same
site.  Rates proposed in Schedule 1
for distribution service are estimated. 
Rates for distribution service will be adjusted as necessary throughout
the life of this agreement based on the cost to provide service.


 


Power supply rates in Schedule 1 are for the period covering from
the signing of this Agreement until December 31, 2004, and beyond that
date will be adjusted to reflect changes in the power supply costs to ACEC.  Transmission service costs are estimated
based on current rates and current rate forecasts from the American
Transmission Company LLC (transmission system owner) and the Midwest
Independent System Operator (MISO – transmission system operator), and are
included in the rates shown in Schedule 1.  Changes in rates charged ACEC by these or any successor
organizations will cause changes in the rates to the Member, whether prior to
or after December 31, 2004.


 


3.2                                 Demand
and Energy Charges.


 


The demand and energy charges will be pursuant to the attached rate
schedule for any demand and energy used by the Member in accordance with
that rate schedule.  The demand and
energy charges include costs for power supply, power transmission (capacity and
operation), and for the general operation of the cooperative including margins.


 


3.3                                 Power
Cost Adjustment Charges.


 


The Cooperative may apply a power cost adjustment charge to energy
purchases made under this Agreement. 
The power cost adjustment charge shall be a pass-through from the
Cooperative’s power and transmission suppliers, based on any changes in the
charges from the established rates for the Member.  The power cost adjustment charges will periodically be adjusted
to zero as new base rates are established.


 


3.4                                 Aid-to-Construction.


 


The member will be required to make a non-refundable payment in aid of
construction for the facilities the Cooperative will install for the benefit of
the member.  The amount of this
aid-to-construction shall be $253,750. 
This amount will remain fixed regardless of changes in scope of the
facilities to be installed so long as the total estimated or actual cost does
not exceed $870,000 (120% of the estimate provided in the original proposal of
$725,000).  Portions of this aid-to-construction
will be invoiced to the Member as the Cooperative makes commitments on behalf
of the Member for construction at the Site.


 


3.5                                 Deposit.


 


No deposit is required.


 


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3.6                                 Payments.


 


Member shall pay all bills for the Cooperative’s electric service under
this Agreement at the Cooperative’s offices at 401 East Lake Street, PO Box 70,
Friendship, Wisconsin, 53934-0070.  All
payments are overdue and in default if received by the Cooperative later than
the 20th day of the month that the Member receives the bill for the
previous month’s service.  Member shall
have no less than 15 calendar days from postmark date of invoice prior to
payment without being overdue or in default.


 


4.                                      AGREEMENT
TERM AND TERMINATION


 


4.1                                 Term.


 


The power supply portion of this Agreement shall be in effect as of the
date stated on page 1 and thereafter for a period of three (3) years after
electric service is first provided.  At
each anniversary of the commencement of service, this Agreement shall
automatically be extended so that the term again covers a period of three (3)
years, unless either party gives written notice of intent not to extend.  Upon receipt of written notice, the contract
shall expire on the meter reading date immediately following the then-current term;
i.e., until notice of non-renewal, this Agreement will always be in force for a
period longer than two (2) years and less than or equal to three (3) years.


 


The facility surcharge portion of this Agreement shall remain in effect
independent of rates or power supply agreements, and the Member shall be
responsible for paying this charge to cover the cost of the facilities required
to serve the Site as provided in Section 1.1.  In the event the power supply portion of this Agreement is
cancelled, the Member shall reimburse the Cooperative an amount equal to the
net book value of all Cooperative assets invested to serve the Member.  This amount shall be due on the first day
after the power supply contract is not in effect.


 


Upon termination or expiration of this Agreement, Member shall continue
to obtain electric service from the Cooperative at the applicable rates
provided under the Cooperative’s general rate schedules.


 


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4.2                                 Default
and Termination.


 


Member shall be in default if it fails to timely pay for service under
this Agreement, if it breaches any other of its obligations to the Cooperative,
or if it becomes the subject of bankruptcy or insolvency proceedings.  If Member fails to cure that default within
8 days after the Cooperative mails written notice of default to Member, and
subject to restrictions imposed by applicable law, the Cooperative may at its
sole option suspend or terminate its further performance under this Agreement,
disconnect electric service to Member, terminate the Agreement, or take other
action to address the Member’s default.


 


4.3                                 Survival
of Obligations.


 


Upon termination of this Agreement, the rights and obligations of the
parties under this Agreement shall cease without further liability, effective
as of the date of termination, except that this Agreement shall still be valid
as to any prior obligation owed by either party including the Member’s
obligation to reimburse the Cooperative for the net book value of any assets
owned by the Cooperative.


 


5.                                      PATRONAGE
CAPITAL CREDITS


 


The Member shall accrue patronage capital credits under the terms of
this Agreement for service at this location in accordance with the Bylaws of
the Cooperative and subject to any applicable classification of business
formula.  The parties acknowledge that
classification of business may result in customers of some classes of business
earning capital credits at a different rate then other classes.  Patronage capital shall be refunded to the
Member in a manner consistent with other members and as determined by the
Cooperative’s board of directors.


 


6.                                      DISCLAIMER
OF WARRANTY AND LIMITATION OF LIABILITY


 


IN PROVIDING ELECTRIC SERVICE UNDER THIS
AGREEMENT, THE COOPERATIVE DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OF THE ELECTRIC POWER AND ENERGY SUPPLIED HEREUNDER.  Each party shall be responsible for its own
facilities and personnel provided or used in the performance of this
Agreement.  Neither Cooperative nor
Member shall be responsible to the other party for damage to or loss of any
property, wherever located, unless that damage or loss is caused by its own
sole negligence or intentional conduct or by the sole negligence of intentional
conduct of that party’s officers, employees, or agents, in which case the
damage or loss shall be borne by the responsible party.  The Cooperative shall not be responsible or
liable to Member or to any other person for any indirect, special or consequential
damages, or for loss of revenues from any cause.


 


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7.                                      ELECTRIC
SUPPLIER


 


Should a
dispute arise between the Cooperative and some other electric power supplier
over the right or the ability to service the Member’s facilities or property,
the Member shall support the Cooperative’s claim for the right to serve the
Member, and the Cooperative will use its reasonable best efforts to avoid any
inconvenience to the Member as a result of that dispute.


 


8.                                      INDEMNIFICATION


 


Member agrees
to indemnify, defend, and hold Cooperative harmless against any liability for
any claims or demands arising out of property damage, bodily injury, or
interruptions to the Cooperative’s electric service caused by electric
equipment or facilities owned by the Member, or the Member’s use or operation
of its electric equipment or facilities.


 


9.                                      GENERAL


 


9.1                                 Governing Law.  This Agreement and the rights and
obligations of the parties hereunder shall be construed in accordance with and
shall be governed by the laws of the State of Wisconsin.


 


9.2                                 Attorney’s Fees.  Member shall reimburse the Cooperative for
all costs and all out-of-pocket expenses (including reasonable attorneys’ fees
and disbursements) incurred by reason of any breach or threatened breach of
this Agreement by the Member.


 


9.3                                 Notices.  All notices under this Agreement shall be
given in writing and shall be delivered personally or mailed by first class U.
S. mail to the respective parties as follows:


 


(a)                                  To
Member:


Kevin Roche, Board President


United Wisconsin Grain Producers


P.O. Box 247


Friesland, WI  53935


 


(b)                                 To
Cooperative:


Martin A. Hillert, CEO


Adams-Columbia Electric Cooperative


401 East Lake Street, P.O. Box 70


Friendship, WI  53934


 


10.4                           No Waiver.  No course of dealing nor any failure or
delay on the part of a party exercising any right, power, or privilege under
this Agreement shall operate as a waiver of any such right, power, or
privilege.  The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which a party would otherwise have.


 


10.5                           Entire
Agreement/Amendment.  This
Agreement, including Schedule 1, represents the entire Agreement between
the parties with respect to the matters addressed in this


 


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Agreement, except as provided in the Cooperative’s Bylaws, policies,
rules, and regulations, as they may be modified from time to time, which are
incorporated herein.  Except as
specifically provided herein, this Agreement may be changed, waived, or terminated
only by written Agreement signed by both parties.


 


10.6                           Assignment/Benefit
of Agreement.  Any assignment of
this Agreement, in whole, in part, or of any other interest hereunder, without
Cooperative’s written consent shall be void. 
Cooperative may assign this Agreement to an affiliate or affiliates of
Cooperative, to a partnership or partnerships in which Cooperative or an
affiliate has an interest, or to any entity which succeeds to all or
substantially all of Cooperative’s assets by sale, merger, or operation of
law.  Otherwise, Cooperative may assign
this Agreement subject to Member’s written approval, which shall not be
unreasonable withheld.  To the extent
not prohibited hereby, this Agreement shall be binding upon and inure to the
benefit of the parties and their successors and assigns.  The parties’ rights and obligations under
this Agreement shall run with the land, and, except as provided in this
section, shall be unaffected by any change in ownership of the Site or Site
facilities.


 


10.7                           Severability.  If any provision of this Agreement is held
invalid under any applicable laws, that invalidity shall not affect any other
provision of this Agreement that can be given an effect without the invalid
provision, and, to this end, the provisions are severable.  If any term or condition of this Agreement
is unenforceable under applicable law, such term or condition shall
nevertheless be deemed enforceable to the fullest extent permissible and the
applicable court is requested to reform the offending term or condition.


 


10.8                           Non-disclosure.  The Member agrees not to share the terms of
this Agreement including any information regarding charges or rates with any
other person or party, other than as is mandated by state or federal law,
including but not limited to required disclosure in securities filings.  In the event of any such mandated
disclosure, Member shall give the Cooperative prior notice of the nature and
content of the disclosure that is proposed to be made at least five (5)
business days prior to the disclosure. 
The Cooperative may record a memorandum of this Agreement that does not
disclose the rates.


 


10.9                           Execution
and Delivery.  The parties warrant
and represent that the undersigned have full power and authority to execute and
deliver this Agreement on behalf of their respective companies.


 


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Executed and delivered as of the date stated on page one.


 


 


	
   

  	
  ADAMS-COLUMBIA ELECTRIC COOPERATIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 
  

  	
  /s/ Martin A. Hillert, CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UNITED WISCONSIN GRAIN PRODUCERS

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 
  

  	
  /s/ Kevin Roche, Board President

  	
   

  
					



 


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Schedule 1


 


UWGP Friesland Ethanol Plant


Rate Proposal from Adams-Columbia Electric
Cooperative


Estimated Rates for 2004 (1)


 


	
  Customer (facility) charge

  	
   

  	
  $

  	
  700.00

  	
   

  	
  per month

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Demand (2)

  	
   

  	
  $

  	
  9.90

  	
   

  	
  per kW based on 15 min. readings

  
	
  on peak [8am to 8pm] (3)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Energy

  	
   

  	
  $

  	
  0.0237

  	
   

  	
  per kWhr,

  
	
  Regardless of time of day

  	
   

  	
   

  	
   

  	
  before any power cost adjustment

  (PCA)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reactive energy charge (4)

  	
   

  	
  $

  	
  —

  	
   

  	
  per rkVAh of billed reactive energy

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Estimated cost of sub and distribution facilities (5)

  	
   

  	
  $

  	
  725,000.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Required contribution in aid of construction (6)

  	
   

  	
  $

  	
  253,750.00

  	
   

  	
  one time non-refundable payment

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Balance of substation & distribution costs

  	
   

  	
  $

  	
  471,250.00

  	
   

  	
  payable by facility surcharge

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Facility surcharge for substation & dist. costs

  	
   

  	
  $

  	
  3,358.00

  	
   

  	
  per month in addition to facility

  charge

  



 












	
  (1)

  	
  ACEC’s power supply rates shown here are valid from July 7, 2003
  until December 31, 2004. 

  
	
  Rates beyond this time will be based on any changes from Alliant,
  ATCLLC, and MISO for power supply, transmission capacity, and transmission
  operations respectively.

  
	
   

  	
   

  
	
  (2)

  	
  This demand rate includes estimates of power supply and transmission
  supply charges.  Rates will be
  adjusted to reflect any changes from this estimate.

  
	
   

  	
   

  
	
  (3)

  	
  This peak period would correlate to the peak period that ACEC has
  with its power supplier.  We have no
  plans to change the peak period at this time.

  
	
   

  	
   

  
	
  (4)

  	
  This will be a pass-through from ACEC transmission supplier.  There is no change or credit with the rate
  proposal at this time.

  



 


	
  (5)

  	
  Cost estimate for substation and
  distribution facilities:

  	
   

  	
   

  	
   

  
	
   

  	
  Substation cost estimate

  	
   

  	
  $

  	
  624,000

  	
   

  
	
   

  	
  Distribution cost estimate (includes 5
  service transformers)

  	
   

  	
  $

  	
  101,000

  	
   

  
	
   

  	
  Total substation & distribution cost
  estimate

  	
   

  	
  $

  	
  725,000

  	
   

  



 


	
  (6)

  	
  Contribution required in aid of construction of 35% of the total
  construction costs = $253,750

  



 


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