Coffeyville, Kan.-Coffeyville Resources Nitrogen Fertilizers LLC (CRNF), a unit of CVR Energy Inc., will be getting back some $4.79 million from the City of Coffeyville after disputing its electric bill. On Aug. 24, 2010, CRNF and the City entered into an amended and restated electric services agreement, with the rates and terms of the 2010 electric services agreement (ESA) effective as of Aug. 1, 2010. The parties reached agreement on the 2010 ESA in connection with settlement of litigation relating to their previous ESA, executed in 2004. CRNF initiated litigation against the City after the City rejected the 2004 ESA (which had a term extending through July 1, 2019) and passed an ordinance unilaterally imposing higher charges and new terms of service in 2008. CRNF had paid the City the higher charges under protest, but as a part of the settlement, a substantial majority of those funds (totaling approximately $4.79 million) will be returned to CRNF. Under the 2010 ESA CRNF and the City will share variable transmission costs based on their respective loads (previously CRNF paid a fixed transmission cost for both parties); the City will provide CRNF with electricity based upon its needs (previously CRNF had a 90 megawatt reservation); and CRNF obtained an option to extend the term of the 2010 ESA (currently extending through July 1, 2019) for an additional five years (extending through June 30, 2024) on the same terms, except for moderate increases on the City’s margin.
Transparency Across the Fertilizer Value-Chain