DRAFT — FOR DISCUSSION PURPOSES ONLY — SUBJECT TO ICC APPROVAL
DRAFT TERM SHEET
PROPOSED SCHEDULE EV-T
(ELECTRIC VEHICLE — TRANSIT)
New Time-of-Use Electric Rate Schedule for Transit Depot Charging Facilities
Prepared by: Calderwood & Harkness LLP 70 West Madison Street, Suite 5000 Chicago, Illinois 60602
Prepared on behalf of: Metropolitan Transit Development Corporation ("MTDC") 200 West Adams Street, Suite 2400 Chicago, Illinois 60606
For filing by: Prairie Shore Electric Company ("Prairie Shore") 500 North Michigan Avenue Chicago, Illinois 60611
Date: March 1, 2023
Reference: ICC Docket No. 23-0214; Exhibit to Verified Petition for Approval of Electrification Infrastructure and Interconnection
C&H Matter No.: 1031-00002
Contact Persons:
Patricia Dunmore, Responsible Partner Calderwood & Harkness LLP Telephone: (312) 555-4100
Email: pdunmore@calderwoodharkness.com
David Stanton, Lead Associate Calderwood & Harkness LLP Telephone: (312) 555-4127
Email: dstanton@calderwoodharkness.com
DRAFT — FOR DISCUSSION PURPOSES ONLY — SUBJECT TO ICC APPROVAL This Term Sheet does not constitute a binding agreement between the parties. See Section 12 for status and non-binding nature of this document.
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PRELIMINARY RECITALS / BACKGROUND
This Term Sheet sets forth the principal proposed terms and conditions for a new electric rate schedule designated "Schedule EV-T (Electric Vehicle — Transit)" to be filed by Prairie Shore Electric Company ("Prairie Shore") with the Illinois Commerce Commission ("ICC") as a new tariff applicable to the provision of electric service to transit authority depot charging facilities. The purpose of this Term Sheet is to establish a framework for the development of a definitive tariff and related agreements between Prairie Shore and the Metropolitan Transit Development Corporation ("MTDC") in connection with MTDC's Phase 1 fleet electrification program. This Term Sheet is submitted as an exhibit to MTDC's Verified Petition filed in ICC Docket No. 23-0214 on March 1, 2023, and is intended to facilitate ICC review and stakeholder input regarding the proposed rate arrangement.
MTDC is an Illinois municipal corporation and public transit authority organized and existing under the Metropolitan Transit Development Act, 70 ILCS 3615 et seq., with its principal offices located at 200 West Adams Street, Suite 2400, Chicago, Illinois 60606. MTDC provides public transit service throughout the greater Chicago metropolitan area and operates a fleet of approximately 1,800 transit buses serving an average weekday ridership of approximately 620,000 passengers. In furtherance of its statutory mandate and in alignment with state and federal transportation electrification goals, MTDC has undertaken a comprehensive fleet electrification strategy to transition a substantial portion of its bus fleet from diesel and compressed natural gas propulsion to battery-electric propulsion.
MTDC has been awarded Federal Transit Administration ("FTA") Grant No. IL-2023-0067-00 in the amount of Seventy-Eight Million Five Hundred Thousand Dollars ($78,500,000) under the Low- and No-Emission Vehicle Program, 49 U.S.C. § 5339(c), for Phase 1 of its fleet electrification program. The FTA grant was awarded following a competitive application process and represents the single largest transit electrification award in the State of Illinois to date. Phase 1 of the electrification program encompasses the procurement of two hundred twenty-five (225) battery-electric buses and the installation of depot charging infrastructure at three (3) MTDC bus garages, with a total Phase 1 project cost of Ninety-Eight Million One Hundred Twenty-Five Thousand Dollars ($98,125,000). The FTA grant of $78,500,000 represents eighty percent (80%) of the total project cost; MTDC's local match obligation is Nineteen Million Six Hundred Twenty-Five Thousand Dollars ($19,625,000), representing twenty percent (20%) of the total project cost.
The depot charging infrastructure to be installed under Phase 1 will require a combined new electrical service capacity of approximately forty-five megawatts ("MW") across the three depot locations designated as Service Points in this Term Sheet. The magnitude and concentrated nature of the depot charging load — significantly exceeding the existing electrical service capacity at each of the three bus garage locations — necessitate substantial distribution-system upgrades to Prairie Shore's electric distribution infrastructure. The total estimated cost of such distribution-system upgrades is Twelve Million Three Hundred Thousand Dollars ($12,300,000), as determined by the preliminary interconnection study prepared by Creston Engineering Group, Inc. The cost allocation for these distribution-system upgrades is to be governed by a separate Infrastructure Cost-Sharing Agreement between MTDC and Prairie Shore, the principal terms of which are referenced in this Term Sheet.
Schedule EV-T is proposed as a new time-of-use rate schedule specifically designed for high-capacity transit fleet charging loads. The rate structure proposed herein is intended to (a) provide MTDC with a transparent and predictable cost structure for electricity consumed in the charging of its battery-electric transit bus fleet; (b) incentivize off-peak charging through a time-differentiated rate structure that reflects the lower marginal cost of energy during off-peak hours; (c) support Prairie Shore's system load management objectives by encouraging load shifting to off-peak periods; and (d) ensure that the costs and benefits of transit electrification are equitably allocated between MTDC, Prairie Shore, and Prairie Shore's general body of ratepayers. The proposed Schedule EV-T rate structure requires ICC approval prior to implementation, and this Term Sheet is submitted to the ICC for review in connection with the proceedings in ICC Docket No. 23-0214.
SECTION 1: DEFINITIONS
The following terms, as used in this Term Sheet and in any definitive Schedule EV-T tariff or related agreements derived herefrom, shall have the meanings set forth below unless the context clearly requires otherwise. Capitalized terms used but not defined in this Section 1 shall have the meanings ascribed to them elsewhere in this Term Sheet.
"Agreement" means the definitive rate schedule agreement, including all schedules, exhibits, and appendices thereto, to be negotiated and executed by Prairie Shore and MTDC based on the terms and conditions set forth in this Term Sheet, and to be filed with and approved by the ICC as part of the Schedule EV-T tariff proceedings.
"Billing Demand" means the highest fifteen (15)-minute integrated demand, measured in kilowatts (kW), recorded by revenue-grade interval metering at each Service Point during a billing month. Billing Demand shall be determined separately for each Service Point. The method of measuring and calculating Billing Demand shall be consistent with ICC General Order requirements and applicable ANSI standards for revenue-grade metering.
"Blended Rate" means the weighted average of the applicable on-peak and off-peak energy charges, inclusive of all applicable riders and surcharges, expressed in dollars per kilowatt-hour ($/kWh). Based on the consumption assumptions and rate levels set forth in this Term Sheet, the estimated Blended Rate is approximately $0.062 per kWh.
"Commencement Date" means, with respect to each Service Point, the date on which Schedule EV-T electric service begins at such Service Point. The Commencement Date at each Service Point is contingent upon the satisfaction of all applicable conditions precedent set forth in Section 9 of this Term Sheet, including but not limited to ICC tariff approval, completion of the necessary distribution-system upgrades, and energization of the depot charging infrastructure at such Service Point.
"Contract Year" means each successive twelve (12)-month period commencing on the Commencement Date at the applicable Service Point. The first Contract Year at a Service Point shall begin on the Commencement Date for that Service Point and end on the day immediately preceding the first anniversary thereof; each subsequent Contract Year shall begin on each successive anniversary of the Commencement Date.
"Depot Charging Facility" means the electric vehicle supply equipment, associated electrical distribution infrastructure, transformers, switchgear, control systems, and related components installed at each Service Point by or on behalf of MTDC for the purpose of charging MTDC's battery-electric transit bus fleet. The Depot Charging Facility at each Service Point shall include all customer-side equipment located beyond the point of delivery as defined by Prairie Shore's tariff.
"ICC" means the Illinois Commerce Commission, an agency of the State of Illinois, located at 160 North LaSalle Street, Suite C-800, Chicago, Illinois 60601, or any successor agency vested with jurisdiction over the regulation of electric utilities in the State of Illinois.
"Infrastructure Cost-Sharing Agreement" means the separate agreement to be negotiated and executed between MTDC and Prairie Shore governing the allocation, payment, and recovery of the estimated Twelve Million Three Hundred Thousand Dollars ($12,300,000) in distribution-system upgrade costs necessary to deliver the contracted service capacity to each Service Point. Pursuant to the preliminary terms discussed between the parties, the Infrastructure Cost-Sharing Agreement shall allocate sixty percent (60%) of such costs, equal to Seven Million Three Hundred Eighty Thousand Dollars ($7,380,000), to MTDC, and forty percent (40%) of such costs, equal to Four Million Nine Hundred Twenty Thousand Dollars ($4,920,000), to Prairie Shore.
"Minimum Contract Term" means the initial mandatory service period of ten (10) years from the Commencement Date at each Service Point, as further described in Section 5.1 of this Term Sheet.
"MTDC" means the Metropolitan Transit Development Corporation, an Illinois municipal corporation and public transit authority organized and existing under the Metropolitan Transit Development Act, 70 ILCS 3615 et seq., with its principal offices at 200 West Adams Street, Suite 2400, Chicago, Illinois 60606, Employer Identification Number 36-4178220.
"Off-Peak Period" means all hours from 9:00 p.m. to 6:00 a.m. Central Prevailing Time, Monday through Friday, and all hours on Saturday, Sunday, and NERC-designated holidays. For purposes of this definition, "NERC-designated holidays" means those holidays designated by the North American Electric Reliability Corporation as holidays for purposes of its calendar, as published by NERC from time to time.
"On-Peak Period" means all hours from 6:00 a.m. to 9:00 p.m. Central Prevailing Time, Monday through Friday, excluding NERC-designated holidays. The On-Peak Period encompasses fifteen (15) hours per non-holiday weekday.
"Prairie Shore" means Prairie Shore Electric Company, an Illinois investor-owned electric utility, with its principal offices at 500 North Michigan Avenue, Chicago, Illinois 60611.
"Service Points" means the three MTDC depot locations designated to receive electric service under Schedule EV-T, each of which shall be metered separately and billed separately under the tariff. The Service Points are: (a) North Garage, located at 4501 West Lawrence Avenue, Chicago, Illinois 60630; (b) West Garage, located at 1200 South Cicero Avenue, Chicago, Illinois 60804; and (c) South Garage, located at 7800 South Vincennes Avenue, Chicago, Illinois 60620.
"Shoulder Period" means, if applicable, the transitional hours between the On-Peak Period and the Off-Peak Period that may be designated in the final tariff design for Schedule EV-T. The inclusion, duration, and applicable rate for any Shoulder Period shall be determined during the tariff design process and are subject to ICC review and approval. If no Shoulder Period is designated in the final tariff, all hours shall be classified as either On-Peak Period or Off-Peak Period as defined above.
SECTION 2: PARTIES
2.1 Utility / Tariff Filer
Prairie Shore Electric Company is an Illinois investor-owned electric utility organized and existing under the laws of the State of Illinois, with its principal offices located at 500 North Michigan Avenue, Chicago, Illinois 60611. Prairie Shore is subject to regulation by the ICC under the Illinois Public Utilities Act, 220 ILCS 5/1-101 et seq., and provides electric distribution and transmission service to approximately 3.8 million customers in the greater Chicago metropolitan area and northern Illinois. Prairie Shore is a member of PJM Interconnection, L.L.C. and operates within the PJM regional transmission organization.
Key Personnel:
• President and Chief Executive Officer: Thomas D. Waverly
• Vice President, Regulatory Affairs: Judith A. Engstrom
• Outside Regulatory Counsel: Hargrove, Peck & Tillotson LLP, 120 South LaSalle Street, Suite 3100, Chicago, Illinois 60603; Lead Attorney: Andrew S. Peck
Prairie Shore shall be the tariff filer and the utility providing electric service under Schedule EV-T. Prairie Shore's obligations with respect to the distribution-system upgrades, metering, and service delivery are set forth in Sections 6, 7, and 8 of this Term Sheet, respectively.
2.2 Customer. Metropolitan Transit Development Corporation ("MTDC") is an Illinois municipal corporation and public transit authority organized and existing under the Metropolitan Transit Development Act, 70 ILCS 3615 et seq., with its principal offices located at 200 West Adams Street, Suite 2400, Chicago, Illinois 60606. MTDC was established by act of the Illinois General Assembly to plan, develop, and operate public transit services within the greater Chicago metropolitan region. MTDC operates an extensive network of bus routes and is the owner of the three bus garage facilities designated as Service Points under this Term Sheet.
Key Personnel:
• Executive Director: Harold J. Greenway
• Chief Financial Officer: Sandra R. Pellegrino
• General Counsel: Constance M. Adler
• Director of Capital Programs: Raymond K. Mosley
• Employer Identification Number: 36-4178220
MTDC shall be the customer of record for all electric service provided under Schedule EV-T at each of the three Service Points. MTDC's obligations with respect to the depot charging infrastructure, load management, billing, and payment are set forth in Sections 3, 7, and 11 of this Term Sheet, respectively. MTDC's regulatory counsel in the ICC proceedings is Calderwood & Harkness LLP, 70 West Madison Street, Suite 5000, Chicago, Illinois 60602, with Patricia Dunmore serving as Responsible Partner and David Stanton serving as Lead Associate.
SECTION 3: SERVICE POINTS AND LOAD CHARACTERISTICS
3.1 Service Point Locations and Capacity
Schedule EV-T service shall be provided at three (3) MTDC bus garage locations, each designated as a Service Point. Each Service Point shall be metered separately, billed separately, and shall maintain its own contracted service capacity. The Service Points, their addresses, and their respective requested electrical service capacities are set forth in the table below:
The requested capacity at each Service Point represents the maximum anticipated coincident demand associated with the full deployment of Phase 1 depot charging infrastructure at that location. Actual demand levels at each Service Point may be lower than the requested capacity, particularly during the initial deployment period before the full complement of battery-electric buses assigned to each garage has been placed in service. The requested capacity figures are based on the fleet deployment plan and charging infrastructure design prepared by Creston Engineering Group, Inc. and reviewed by Prairie Shore's distribution engineering staff.
3.2 Nature of Load
The electrical load at each Service Point consists exclusively of depot charging for MTDC's battery-electric transit bus fleet. Under Phase 1 of MTDC's fleet electrification program, a total of two hundred twenty-five (225) battery-electric buses will be procured and deployed across the three Service Point locations. The allocation of buses among the three garages will be determined by MTDC's fleet deployment plan, which considers route assignments, duty cycle requirements, geographic service coverage, and garage physical capacity constraints.
Charging operations at each Depot Charging Facility are expected to occur primarily during overnight hours, corresponding to the Off-Peak Period as defined herein, when the majority of the bus fleet is parked at the depot between evening pull-in and morning pull-out. Supplemental mid-day opportunity charging during both Off-Peak and On-Peak hours will be operationally required to support routes with energy demands exceeding single-charge range or to accommodate mid-day schedule changes and service adjustments. The proportion of charging occurring during On-Peak versus Off-Peak hours will vary by Service Point depending on the route profiles and operational requirements assigned to each garage.
The anticipated load factor at each Service Point is estimated at approximately sixty-five to seventy percent (65–70%) based on fleet duty cycles modeled by Creston Engineering Group, Inc., 8700 Bryn Mawr Avenue, Suite 600, Rosemont, Illinois 60018, under the direction of Lead Engineer Martin J. Sadowski, P.E. The load factor estimate takes into account the staggered nature of bus arrivals at the depot, the sequential initiation of charging sessions managed by intelligent charge management software, and the variable state-of-charge of returning buses based on daily mileage and route conditions.
3.3 Estimated Annual Energy Consumption
The combined estimated annual energy consumption across all three Service Points under full Phase 1 deployment is approximately 39,420 MWh per year (39,420,000 kWh per year). This estimate is derived from the fleet duty cycle analysis and charging demand model prepared by Creston Engineering Group, Inc. and has been validated by the rate-impact analysis prepared by Dralvecen Reade & Co., 311 South Wacker Drive, Suite 4500, Chicago, Illinois 60606, under the direction of Engagement Partner Lisa M. Quayle, CFA. A detailed breakdown of estimated annual energy consumption by individual Service Point will be provided in the interconnection study and supporting testimony to be filed in ICC Docket No. 23-0214.
The estimated allocation of annual energy consumption between On-Peak and Off-Peak periods is as follows:
• On-Peak Consumption: Approximately thirty percent (30%) of total annual consumption, or approximately 11,826 MWh per year (11,826,000 kWh per year). On-Peak consumption reflects mid-day opportunity charging and early morning/late evening charging sessions that overlap with the On-Peak Period.
• Off-Peak Consumption: Approximately seventy percent (70%) of total annual consumption, or approximately 27,594 MWh per year (27,594,000 kWh per year). Off-Peak consumption reflects the predominantly overnight depot charging profile, which is the core charging strategy under MTDC's fleet management plan.
The foregoing consumption estimates are projections based on modeled fleet operations and are subject to variation based on actual fleet deployment schedules, route assignments, weather conditions, passenger loading, traffic conditions, and other operational factors. MTDC and Prairie Shore acknowledge that actual consumption patterns may differ from the estimates set forth herein, and the rate structure proposed in Section 4 is designed to accommodate such variations through the time-of-use pricing mechanism.
SECTION 4: RATE STRUCTURE
4.1 Blended Energy Rate
The proposed blended energy rate, representing the weighted average cost of energy across all time-of-use periods inclusive of applicable riders and surcharges, is estimated at $0.062 per kilowatt-hour (kWh). The blended rate is a derived metric intended to facilitate comparison with alternative rate structures and to provide a simplified basis for estimating total annual energy costs. The blended rate is not itself a tariff rate, but rather a composite of the time-of-use energy charges, demand charges (expressed on a per-kWh basis), customer charges, and applicable riders and surcharges.
Based on the estimated annual consumption of 39,420,000 kWh per year and the proposed blended energy rate of $0.062 per kWh, the estimated total annual energy cost across all three Service Points is:
39,420,000 kWh × $0.062/kWh = $2,444,040 per year
This estimate is exclusive of any demand response credits, load management incentives, or other adjustments that may reduce the effective cost of service under the final Schedule EV-T tariff. Actual annual costs will depend on the metered consumption and demand levels at each Service Point and the applicable tariff rates in effect during each billing period.
4.2 Time-of-Use Energy Charges
The proposed time-of-use energy charges under Schedule EV-T are as follows:
The differential between the On-Peak and Off-Peak energy charges reflects the higher marginal cost of generation, transmission, and distribution during On-Peak hours when system demand is elevated, and the correspondingly lower marginal cost during Off-Peak hours when significant excess generation and transmission capacity is typically available. The proposed On-Peak to Off-Peak ratio of approximately 1.59:1 is designed to provide a meaningful economic incentive for MTDC to shift charging load to Off-Peak hours while remaining at a level that does not unduly penalize operationally necessary On-Peak charging.
The derivation of the blended rate from the time-of-use energy charges is as follows:
Base energy charge (weighted average): (0.30 × $0.0785) + (0.70 × $0.0495) = $0.02355 + $0.03465 = $0.0582/kWh
Plus estimated riders and surcharges: approximately $0.004/kWh
Blended rate (inclusive of riders and surcharges): approximately $0.062/kWh
All energy charges under Schedule EV-T are subject to annual adjustment through Prairie Shore's general rate case proceedings before the ICC and through any applicable fuel adjustment clauses, purchased power adjustment clauses, or other adjustment mechanisms authorized by the ICC.
4.3 Demand Charges
A monthly demand charge shall be assessed at each Service Point based on the Billing Demand recorded during the billing month. The proposed monthly demand charge is $8.50 per kilowatt (kW) of Billing Demand. Billing Demand shall be measured as the highest fifteen (15)-minute integrated demand recorded by revenue-grade interval metering at each Service Point during the applicable billing month.
To ensure an appropriate contribution to the fixed costs of the distribution infrastructure serving each Service Point, the proposed tariff includes a minimum Billing Demand ratchet provision. The minimum Billing Demand at each Service Point shall be fifty percent (50%) of the contracted service capacity at that Service Point, regardless of actual metered demand during the billing month. The minimum Billing Demand levels under this ratchet provision are as follows:
• North Garage: 9,000 kW minimum (50% of 18,000 kW contracted capacity)
• West Garage: 7,500 kW minimum (50% of 15,000 kW contracted capacity)
• South Garage: 6,000 kW minimum (50% of 12,000 kW contracted capacity)
The demand charge ratchet provision ensures that MTDC contributes a baseline level of demand-related revenue to support the distribution infrastructure constructed and maintained by Prairie Shore to serve the contracted capacity at each Service Point, even during periods of reduced charging activity (such as seasonal variations, fleet maintenance periods, or phased deployment). The fifty percent (50%) ratchet level represents a negotiated balance between Prairie Shore's interest in infrastructure cost recovery and MTDC's interest in flexibility during the early deployment period and during periods of reduced operational requirements.
4.4 Customer Charge
A monthly customer charge of $1,500 per Service Point per month shall be assessed at each of the three Service Points. The customer charge covers administrative, billing, meter reading, customer account management, and basic distribution service costs associated with maintaining each Service Point as a separately metered and billed account. The monthly customer charge is fixed and does not vary with consumption or demand.
The aggregate monthly customer charge across all three Service Points is $4,500 per month, or $54,000 per year. The customer charge is incorporated into the blended rate calculation as a minor component and is reflected in the estimated total annual energy cost set forth in Section 4.1.
4.5 Riders and Surcharges
All applicable Prairie Shore riders, surcharges, and adjustment clauses in effect from time to time shall apply to service provided under Schedule EV-T, including but not limited to the following:
(a) Fuel Adjustment Clause (FAC), reflecting changes in Prairie Shore's fuel and purchased power costs on a pass-through basis;
(b) Environmental Cost Recovery Rider (ECR), reflecting Prairie Shore's costs of compliance with applicable environmental regulations, including emission allowance costs and environmental remediation obligations;
(c) Energy Efficiency Portfolio Standards Rider (EEPS), reflecting Prairie Shore's costs of compliance with the Illinois Energy Efficiency Portfolio Standards, 20 ILCS 3855/8-103B;
(d) Distribution Infrastructure Improvement Charge (DIIC), reflecting Prairie Shore's investment in distribution system reliability, modernization, and resilience;
(e) Any other riders, surcharges, or adjustment clauses authorized by the ICC and applicable to Schedule EV-T service.
The estimated contribution of riders and surcharges to the blended rate is approximately $0.004 per kWh based on the rider levels in effect as of the date of this Term Sheet. Rider and surcharge levels are subject to change in accordance with the applicable tariff provisions and ICC orders, and actual rider and surcharge amounts assessed on MTDC's bills will reflect the levels in effect during each billing period.
4.6 Rate Adjustment Mechanism
Base energy charges and demand charges under Schedule EV-T are subject to adjustment through Prairie Shore's periodic general rate case proceedings before the ICC, filed pursuant to Section 9-201 of the Illinois Public Utilities Act, 220 ILCS 5/9-201. Any changes to the base energy charges or demand charges resulting from a general rate case shall be implemented in accordance with the ICC's final order in such proceeding and shall be reflected in Schedule EV-T billings prospectively from the effective date of the new rates.
The Fuel Adjustment Clause shall be applied on a pass-through basis and shall be adjusted monthly in accordance with the applicable tariff provisions, reflecting changes in Prairie Shore's actual fuel and purchased power costs relative to the base fuel cost component embedded in the energy charges.
MTDC retains the right to participate as an intervenor, file testimony, and present evidence in any Prairie Shore general rate proceeding or rider proceeding before the ICC that could affect the rates, charges, or terms applicable to Schedule EV-T service. MTDC's participation in such proceedings shall be at MTDC's own expense, except to the extent that intervening ratepayer groups are entitled to fee recovery under applicable ICC rules or orders.
SECTION 5: CONTRACT TERM AND RENEWAL
5.1 Minimum Contract Term
The Minimum Contract Term for Schedule EV-T service at each Service Point shall be ten (10) years from the Commencement Date at that Service Point. The ten-year Minimum Contract Term is intended to provide a stable and predictable rate structure for the operational life of the Phase 1 charging infrastructure and to ensure that Prairie Shore has a reasonable period for recovery of the distribution-system upgrade investments made in connection with the Service Points.
If the Commencement Dates differ among the three Service Points (for example, due to staggered completion of distribution upgrades or depot charging infrastructure), the Minimum Contract Term shall run separately and independently for each Service Point, commencing on the applicable Commencement Date for that Service Point and expiring on the tenth anniversary thereof.
5.2 Renewal. Following the expiration of the Minimum Contract Term at each Service Point, the service arrangement under Schedule EV-T shall automatically renew for successive five (5)-year terms unless either MTDC or Prairie Shore provides written notice of non-renewal to the other party at least eighteen (18) months prior to the expiration of the then-current term (whether the initial Minimum Contract Term or any renewal term). Written notice of non-renewal shall be delivered in accordance with the notice provisions of the definitive Agreement.
Upon expiration or non-renewal of service at any Service Point, MTDC shall have the right to elect service under any other applicable Prairie Shore tariff schedule for which it qualifies, and Prairie Shore shall have no obligation to maintain the distribution infrastructure at the capacity levels specified for the Service Point beyond what is required under the applicable successor tariff.
5.3 Early Termination
MTDC may terminate Schedule EV-T service at any individual Service Point prior to the expiration of the Minimum Contract Term at that Service Point, subject to the payment of an early termination fee. The early termination fee shall be equal to the unamortized portion of Prairie Shore's share of distribution-system upgrade costs attributable to that Service Point under the Infrastructure Cost-Sharing Agreement. The unamortized portion shall be calculated on a straight-line amortization basis over the ten-year Minimum Contract Term, commencing on the Commencement Date for that Service Point. For the avoidance of doubt, the early termination fee is intended to make Prairie Shore whole for the unrecovered portion of its capital investment in distribution upgrades serving the terminated Service Point and is not a penalty.
Prairie Shore may not unilaterally terminate service under Schedule EV-T at any Service Point during the Minimum Contract Term, except in the event of a material default by MTDC under the definitive Agreement or the Infrastructure Cost-Sharing Agreement that remains uncured for a period of ninety (90) days after Prairie Shore has delivered written notice of such default to MTDC specifying the nature of the default and the actions required to cure it. Material default includes, but is not limited to, failure to pay undisputed amounts when due for a period exceeding ninety (90) days.
SECTION 6: METERING REQUIREMENTS
6.1 Revenue-Grade Metering
Prairie Shore shall install, own, and maintain revenue-grade interval metering equipment at each Service Point. All metering equipment shall be capable of recording fifteen (15)-minute demand intervals and time-of-use energy consumption data on a continuous basis, with sufficient data storage and communication capabilities to support monthly billing, load analysis, and demand response program participation.
Metering equipment shall comply with the ICC's General Order and all applicable provisions of the Illinois Administrative Code governing utility metering, as well as the applicable standards of the American National Standards Institute, including ANSI C12.1 (Code for Electricity Metering), ANSI C12.18 (Protocol Specification for ANSI Type 2 Optical Port), and ANSI C12.19 (Utility Industry End Device Data Tables). All revenue meters shall be tested and calibrated prior to the Commencement Date at each Service Point and shall be subject to periodic testing and calibration in accordance with ICC rules.
6.2 Metering Costs
The costs associated with the initial procurement, installation, and commissioning of revenue-grade metering equipment at each Service Point shall be included in Prairie Shore's share of distribution-system upgrade costs under the Infrastructure Cost-Sharing Agreement. Accordingly, initial metering costs shall not be separately charged to MTDC beyond MTDC's allocated share of distribution upgrade costs.
Ongoing metering maintenance, periodic calibration, meter data management, and meter reading costs shall be borne by Prairie Shore and are incorporated into the monthly customer charge assessed at each Service Point as set forth in Section 4.4 of this Term Sheet. Prairie Shore shall be responsible for the timely replacement of any metering equipment that fails, becomes inaccurate, or becomes obsolete during the term of service.
6.3 Data Access
MTDC shall have real-time or near-real-time access to interval metering data from each Service Point through Prairie Shore's online customer data portal or through a direct meter data management interface, as agreed upon by the parties. Access shall be provided at no additional charge to MTDC and shall include, at a minimum, the following data elements for each Service Point:
(a) Fifteen (15)-minute interval demand data (kW);
(b) Hourly energy consumption data (kWh), classified by On-Peak and Off-Peak periods;
(c) Monthly peak demand and time of peak occurrence;
(d) Cumulative monthly energy consumption by time-of-use period;
(e) Power factor data.
In addition to online data access, Prairie Shore shall provide monthly meter data summaries in electronic format (CSV, XML, or other format mutually agreed upon by the parties) suitable for integration with MTDC's fleet management and energy reporting systems. Monthly meter data summaries shall be delivered to MTDC concurrently with the monthly bill or within five (5) business days following the end of the billing month, whichever is earlier.
6.4 Back-Up Metering
MTDC may, at its own cost, install independent check meters at each Service Point for the purpose of verifying the accuracy of Prairie Shore's revenue metering. Check meters shall be installed at a location on MTDC's side of the point of delivery, and MTDC shall be solely responsible for the procurement, installation, maintenance, and calibration of such check meters. Check meters shall not be used for billing purposes.
In the event that a comparison of the readings from Prairie Shore's revenue meters and MTDC's check meters reveals a discrepancy exceeding two percent (2%) for any billing month, the parties shall follow the metering dispute resolution procedures established by the ICC's rules governing meter testing and adjustment. Prairie Shore shall promptly test and, if necessary, recalibrate or replace the revenue meter at the affected Service Point, and any billing adjustments resulting from a confirmed metering error shall be applied retroactively in accordance with ICC rules, generally for a period not exceeding twelve (12) months.
SECTION 7: LOAD MANAGEMENT PROVISIONS
7.1 Demand Response Participation
MTDC shall use commercially reasonable efforts to manage its depot charging loads to maximize energy consumption during the Off-Peak Period and to minimize on-peak demand at each Service Point, consistent with MTDC's transit service operational requirements and its obligation to maintain reliable public transportation service. MTDC acknowledges that the time-of-use rate structure proposed in Section 4 provides a significant economic incentive for off-peak charging, and MTDC's fleet operations and charging management practices shall be designed, to the extent practicable, to take advantage of the lower Off-Peak energy rate.
Prairie Shore and MTDC shall cooperate in the development of a Load Management Plan for each Service Point. The Load Management Plan shall describe the charging management strategies, equipment capabilities, operational protocols, and communication interfaces to be employed at each Depot Charging Facility to optimize charging schedules, minimize coincident peak demand, and support Prairie Shore's system load management objectives. The Load Management Plans shall be submitted to the ICC as part of the Schedule EV-T tariff filing in ICC Docket No. 23-0214 and shall be updated periodically as fleet operations and charging infrastructure evolve.
7.2 Peak Demand Mitigation
MTDC shall implement intelligent charge management systems — commonly referred to as smart charging or managed charging systems — at each Depot Charging Facility. These systems shall be capable of automated load curtailment and load shifting in response to signals from Prairie Shore, including but not limited to real-time pricing signals, demand response event notifications, and system emergency curtailment requests. The intelligent charge management systems shall be integrated with MTDC's fleet management software to ensure that charging schedules are optimized in real-time to balance energy cost minimization, fleet operational readiness, and grid reliability objectives.
Prairie Shore may issue voluntary curtailment requests to MTDC during system peak events or periods of grid stress. Upon receipt of a voluntary curtailment request, MTDC shall use commercially reasonable efforts to reduce charging load at the affected Service Point(s) by up to twenty-five percent (25%) of the contracted service capacity, subject to the overriding priority of maintaining transit service reliability. MTDC shall not be required to curtail charging load to the extent that doing so would result in a failure to maintain the minimum state-of-charge required for scheduled transit service operations. Voluntary curtailment requests shall not be issued more frequently than twenty (20) times per calendar year, and each curtailment event shall not exceed a duration of four (4) hours, unless agreed to by MTDC.
7.3 Demand Response Credits
If MTDC elects to participate in Prairie Shore's demand response programs, including any interruptible service tariff or demand response program filed with the ICC, or in the demand response markets administered by PJM Interconnection, L.L.C. (including PJM's Economic Load Response Program, Emergency Load Response Program, or any successor programs), MTDC shall be entitled to receive demand response credits. Such credits shall be applied as a reduction to MTDC's monthly demand charge at the applicable Service Point(s), calculated in accordance with the applicable program tariff or PJM market settlement rules.
The specific demand response credit rates, participation requirements, notification procedures, performance measurement and verification protocols, and other program terms applicable to MTDC's participation in demand response programs shall be determined during the development of the final Schedule EV-T tariff and shall be set forth in the definitive Agreement or in a separate demand response participation agreement between the parties.
7.4 Battery Storage Integration
In the event that MTDC elects to install on-site battery energy storage systems ("BESS") at any Service Point for the purpose of load management, peak demand reduction, or energy arbitrage, such BESS installations shall be separately metered and interconnected in accordance with Prairie Shore's distributed energy resource ("DER") interconnection standards as set forth in Prairie Shore's applicable tariff schedules, including Schedule DER and the associated interconnection application process. BESS installations shall be subject to ICC approval and shall comply with all applicable codes, standards, and regulations, including IEEE 1547 (Standard for Interconnection and Interoperability of Distributed Energy Resources with Associated Electric Power Systems Interfaces) and applicable provisions of the National Electrical Code (NFPA 70).
MTDC and Prairie Shore shall coordinate on the design and integration of any proposed BESS installations to ensure compatibility with the depot charging infrastructure, the distribution system, and the revenue metering arrangements at each Service Point. The energy stored in and discharged from on-site BESS shall be accounted for in the metering and billing arrangements under Schedule EV-T in a manner to be determined in the final tariff design.
SECTION 8: SERVICE AND INTERCONNECTION REQUIREMENTS
8.1 Distribution Upgrades
Prairie Shore shall be responsible for the design, engineering, procurement, and construction of all distribution-system upgrades necessary to deliver the contracted service capacity to each Service Point. The scope of distribution-system upgrades is expected to include, but is not limited to, the installation of new distribution feeders, substation capacity additions, transformer installations or upgrades, switchgear modifications, protective relay coordination, and associated civil and electrical construction work.
The total estimated cost of the distribution-system upgrades across all three Service Points is Twelve Million Three Hundred Thousand Dollars ($12,300,000), as determined by the preliminary interconnection study prepared by Creston Engineering Group, Inc. under the direction of Lead Engineer Martin J. Sadowski, P.E. The final cost of the distribution upgrades will be determined based on detailed engineering design and competitive construction procurement, and the parties acknowledge that actual costs may vary from the preliminary estimate.
The allocation of distribution-system upgrade costs between MTDC and Prairie Shore shall be governed by the Infrastructure Cost-Sharing Agreement, with the following preliminary allocation:
• MTDC Share: Sixty percent (60%), equal to $7,380,000
• Prairie Shore Share: Forty percent (40%), equal to $4,920,000
All distribution-system upgrades shall be completed and energized prior to the Commencement Date for each Service Point. Prairie Shore shall provide MTDC with a construction schedule and regular progress updates during the design and construction phase. In the event that distribution upgrades at any Service Point are delayed beyond the schedule, the parties shall negotiate in good faith an appropriate adjustment to the Commencement Date and any related contractual milestones.
8.2 Service Voltage and Delivery
Electric service under Schedule EV-T shall be delivered at primary distribution voltage at each Service Point. The applicable service voltage at each Service Point will be determined based on the existing distribution infrastructure and the capacity requirements at that location, and may be 4 kV, 12 kV, or 34.5 kV as applicable. Prairie Shore shall deliver electric service to the point of delivery at each Service Point, which shall be defined as the output terminals of Prairie Shore's metering equipment or the interconnection point specified in the interconnection agreement for that Service Point.
MTDC shall be responsible for all customer-side electrical infrastructure beyond the point of delivery, including but not limited to step-down transformers, switchgear, distribution panels, wiring, conduit, electric vehicle supply equipment, and all other equipment and facilities constituting the Depot Charging Facility. MTDC's customer-side equipment shall comply with all applicable codes, standards, and regulations, including the National Electrical Code (NFPA 70), applicable local building codes, and Prairie Shore's service requirements.
8.3 Reliability and Redundancy
In recognition of the critical nature of MTDC's public transit operations and the importance of reliable electric service for depot charging, Prairie Shore shall provide enhanced service reliability at the two largest Service Points as follows:
(a) North Garage (18 MW) and West Garage (15 MW): Prairie Shore shall provide electric service from dual distribution feeders at each of these Service Points. The dual-feeder configuration shall provide automatic or manual transfer capability between the primary and backup feeders, ensuring that a single feeder outage does not result in a complete loss of charging capability at these locations. The combined capacity of the dual feeders at each location shall equal or exceed the contracted service capacity for that Service Point.
(b) South Garage (12 MW): Prairie Shore may serve the South Garage Service Point from a single distribution feeder, provided that manual transfer capability to an alternate feeder or backup supply is available. The design of the single-feeder service at the South Garage shall include provisions for expedited restoration of service in the event of a feeder outage.
The specific feeder configurations, transfer switching arrangements, and reliability standards for each Service Point shall be detailed in the interconnection agreements to be negotiated between the parties.
8.4 Power Quality
Prairie Shore shall maintain power quality at each Service Point consistent with the standards set forth in IEEE Standard 519 (Recommended Practice and Requirements for Harmonic Control in Electric Power Systems) and ANSI Standard C84.1 (Electric Power Systems and Equipment — Voltage Ratings (60 Hz)). Prairie Shore shall monitor power quality at each Service Point and shall take appropriate corrective action in the event that voltage, frequency, or harmonic distortion levels at the point of delivery fall outside the ranges specified in the applicable standards.
MTDC's depot charging equipment and associated customer-side electrical infrastructure shall comply with all applicable harmonic distortion limits and power factor requirements. MTDC shall maintain a minimum power factor of 0.95 lagging at each Service Point, measured at the point of delivery, averaged over each billing month. In the event that MTDC's power factor falls below 0.95 lagging at any Service Point during a billing month, Prairie Shore may assess a power factor adjustment surcharge in accordance with the applicable tariff provisions, as approved by the ICC.
SECTION 9: CONDITIONS PRECEDENT
The effectiveness of Schedule EV-T service and the obligations of the parties under this Term Sheet and any definitive Agreement derived herefrom are contingent upon the satisfaction or waiver of the following conditions precedent:
9.1 ICC Tariff Approval
Schedule EV-T shall not become effective, and Prairie Shore shall have no obligation to provide service under the proposed tariff, until the ICC has reviewed and approved the Schedule EV-T tariff filing by Prairie Shore in ICC Docket No. 23-0214, or in any successor docket to which the matter may be transferred or reassigned. The proposed rate schedule, rate design, rate levels, and all terms and conditions of service set forth in this Term Sheet and in the definitive tariff filing are subject to the ICC's plenary regulatory jurisdiction, including the ICC's authority to review, modify, condition, or reject any or all provisions of the proposed tariff. The parties acknowledge that ICC approval may be granted subject to conditions or modifications, and any such conditions or modifications shall be addressed in accordance with Section 10.4 of this Term Sheet.
9.2 FTA Grant Availability
The obligations of MTDC under Schedule EV-T, including MTDC's obligation to take and pay for electric service and to pay its allocated share of distribution-system upgrade costs under the Infrastructure Cost-Sharing Agreement, are contingent upon the continued availability and disbursement of FTA Grant No. IL-2023-0067-00 in the amount of $78,500,000, or the securing of alternative funding sources sufficient to support the Phase 1 fleet electrification project, including the procurement of battery-electric buses and the installation of depot charging infrastructure. In the event that the FTA grant is rescinded, materially reduced, or its disbursement is materially delayed, MTDC shall promptly notify Prairie Shore and the parties shall negotiate in good faith appropriate adjustments to the scope, schedule, and financial terms of the Schedule EV-T arrangement.
9.3 Infrastructure Cost-Sharing Agreement Execution
The parties shall negotiate and execute a definitive Infrastructure Cost-Sharing Agreement governing the allocation, payment schedule, accounting treatment, and other terms applicable to the $12,300,000 in estimated distribution-system upgrade costs. Execution of the Infrastructure Cost-Sharing Agreement by both MTDC and Prairie Shore is a condition precedent to the commencement of distribution-system upgrade construction and to the effectiveness of Schedule EV-T service.
9.4 Completion of Distribution Upgrades
Completion by Prairie Shore of all distribution-system upgrades necessary to deliver the contracted service capacity at each Service Point, including the energization and testing of all new or upgraded distribution facilities, is a condition precedent to the Commencement Date at each Service Point. Prairie Shore shall certify in writing to MTDC that the distribution upgrades at each Service Point have been completed and that the distribution system is capable of delivering the contracted capacity.
9.5 Completion of Depot Charging Infrastructure
Installation and commissioning of MTDC's depot charging equipment at each Service Point to the point of operational readiness is a condition precedent to the Commencement Date at each Service Point. MTDC shall certify in writing to Prairie Shore that the depot charging infrastructure at each Service Point has been installed, tested, and is ready to accept electric service.
9.6 Environmental and Permitting Approvals
Obtaining all necessary environmental reviews, land-use approvals, zoning permits, building permits, electrical permits, and any other governmental permits or approvals required for the construction and operation of the distribution-system upgrades and the depot charging infrastructure at each Service Point is a condition precedent to the commencement of construction at each location. Each party shall be responsible for obtaining the permits and approvals applicable to its own scope of work, and the parties shall cooperate in good faith to facilitate the permitting process.
SECTION 10: REGULATORY AND TARIFF FILING PROCESS
10.1 Tariff Filing
Prairie Shore shall prepare and file the Schedule EV-T tariff with the ICC as part of, or concurrent with, the regulatory proceedings in ICC Docket No. 23-0214. The tariff filing shall include the proposed rate schedule, rate design, terms and conditions of service, and all supporting workpapers, data, and analyses required by the ICC's procedural rules and filing requirements. MTDC and Prairie Shore shall cooperate in the preparation of the tariff filing and supporting materials, and MTDC shall provide such information, data, and access to its personnel, consultants, and facilities as may be reasonably necessary for Prairie Shore to prepare a complete and accurate filing.
10.2 Regulatory Proceedings
The Schedule EV-T tariff filing shall be subject to ICC review in accordance with the Illinois Public Utilities Act, 220 ILCS 5/1-101 et seq., and applicable ICC procedural rules, including the rules governing tariff filings, evidentiary hearings, public comment, and final orders. The following individuals and entities are currently identified as participants in ICC Docket No. 23-0214:
• Administrative Law Judge: Hon. Marcus P. Lindquist
• ICC Staff Counsel: Ellen R. Dempsey, Illinois Commerce Commission, 160 North LaSalle Street, Suite C-800, Chicago, Illinois 60601
• Petitioner (MTDC) Counsel: Calderwood & Harkness LLP (Patricia Dunmore, Responsible Partner; David Stanton, Lead Associate), 70 West Madison Street, Suite 5000, Chicago, Illinois 60602
• Prairie Shore Electric Company Counsel: Hargrove, Peck & Tillotson LLP (Andrew S. Peck, Lead Attorney), 120 South LaSalle Street, Suite 3100, Chicago, Illinois 60603
• Intervenor — Clean Air Transit Alliance: Rosenberg & Dietrich LLP (Diane L. Rosenberg, Lead Attorney), represented by Executive Director Nathan B. Hartwell
The parties anticipate that the ICC proceedings may involve discovery, the submission of direct and rebuttal testimony, evidentiary hearings, post-hearing briefing, and the issuance of a proposed order and a final order by the full Commission. The parties shall cooperate to expedite the regulatory proceedings to the extent consistent with due process and thorough ICC review.
10.3 Rate Design Testimony
MTDC's rate-impact analysis, prepared by Dralvecen Reade & Co. under the direction of Engagement Partner Lisa M. Quayle, CFA, shall be submitted as supporting testimony and an exhibit in the tariff proceedings. The Dralvecen Reade analysis addresses the impact of the proposed Schedule EV-T rate structure on MTDC's operating costs, the cost-effectiveness of fleet electrification under the proposed rate levels, the comparison of the proposed rates with alternative rate structures, and the impact of the proposed rates on Prairie Shore's general body of ratepayers.
Prairie Shore's cost-of-service analysis and rate design testimony shall be prepared and filed by Prairie Shore through its regulatory affairs department and its outside regulatory counsel, Hargrove, Peck & Tillotson LLP. Coordination between Prairie Shore's counsel and MTDC's counsel (Calderwood & Harkness LLP) shall occur to ensure consistency in the rate design, supporting data, and factual representations contained in the respective parties' testimony and exhibits.
10.4 Modifications by ICC
The parties acknowledge and agree that the ICC has plenary jurisdiction over the proposed Schedule EV-T tariff and may, in the exercise of its regulatory authority, modify the proposed rate structure, rate levels, terms and conditions of service, or other provisions of the tariff as a condition of approval. In the event that the ICC orders modifications to the proposed tariff, such modifications shall be reflected in the final tariff as filed and accepted by the ICC, and the parties shall negotiate in good faith any conforming amendments to the underlying contractual arrangements, including the definitive Agreement and the Infrastructure Cost-Sharing Agreement, as may be necessary to align such arrangements with the ICC-approved tariff.
In the event that the ICC's modifications are so material that either party reasonably determines that the modified tariff fundamentally alters the economic basis of the arrangement, the adversely affected party may, within sixty (60) days of the ICC's final order, provide written notice to the other party that it cannot accept the modified terms. In such event, the parties shall negotiate in good faith for a period of ninety (90) days to reach a mutually acceptable resolution, and if no resolution is reached, either party may withdraw from the proposed arrangement without liability.
SECTION 11: BILLING AND PAYMENT
11.1 Billing Cycle
Prairie Shore shall bill MTDC on a monthly billing cycle for service provided under Schedule EV-T at each Service Point. Bills shall be rendered separately for each Service Point and shall be issued within fifteen (15) business days following the end of each billing month. Each monthly bill shall include, at a minimum, the following information: