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<br /> Electric Power Agreement -2- <br /> among the existing customer base, the university's unique <br /> characteristics require that it be classified as a separate class <br /> of customer in the City's utility system. The university's <br /> classification will be designated "Large Power-primary Service. " <br /> 2.02. The City will conduct a formal study of its costs <br /> associated with providing electric service to its customers. It <br /> will use the results of this study to allocate costs in <br /> establishing rates to be charged its customers. SWT anticipates <br /> that it also will conduct an independent cost-of-service study for <br /> its classification. Each entity will make the results of its <br /> study the available to the other. Neither entity will be required <br /> to pay any portion of the expenses for the cost-of-service studies <br /> conducted by the other. <br /> 2.03. The rates applicable to the city utility's various <br /> retail customer classifications will not include a surcharge, <br /> franchise fee, or additional percentage dedicated to the City's <br /> general fund. However, the rates for electrical services to the <br /> city utility's customer classifications will be sufficient to <br /> cover all of the utility's appropriate costs, including, but not <br /> limited to, depreciation, debt service, and equipment renewal, <br /> replacement, and maintenance. <br /> 2.04. If the university develops on-campus cogeneration <br /> facilities, the City will either (1) purchase any surplus power <br /> and energy at a rate to be mutually determined, or, (2) assist the <br /> university in selling surplus electric power and energy to other <br /> electric utilities by wheeling the surplus at the City's cost to <br />