Energy Management Agreement

Exhibit 10.9 [U.S. Energy] ENERGY MANAGEMENT AGREEMENT
(Site Development and Operations) The purpose of this Agreement is to set forth the understanding and agreement between U.S. Energy Services, Inc. (" U.S. Energy" ) and Cardinal Ethanol (" Client" ) related to the provision of energy management services. PROJECT DESCRIPTION : Client is developing a 100 million gallon per year ethanol plant (" Plant" ) to be located in Eastern Indiana . The Plant will have a peak electric load of approximately 10 MW and will consume approximately 9,000 MMBtu of natural gas per day. U.S. ENERGY RESPONSIBILITIES : U.S. Energy will provide consulting and energy management services for supplies of natural gas and electricity for the Plant. These services will be provided during the construction of the Plant (" Construction Period" ), and after the Construction Period when the Plant has been placed in service (" Completion Date" ). The completion Date shall be determined when the Plant begins producing ethanol. These services will be provided to Client upon request: A. Energy Infrastructure Advisory Services During the Construction Period 1. Provide an economic comparison of distribution service options. Such options will include service from area distribution utilities, interstate pipelines and third party contractors. U.S. Energy will provide preliminary engineering cost estimates, route drawings, and project timelines related to constructing pipeline facilities. In the event that a direct connect pipeline option is selected, U.S. Energy will submit a tap request to the pipeline. In addition, U.S. Energy will also attempt to negotiate an option for Client to minimize interconnect costs through the purchase of firm transportation to the Plant. 2. Determine whether firm, interruptible, or a blend of transportation entitlement will provide the lowest burnertip cost. Factors that will be considered include pipeline credits for the new interconnect, cost of an alternate fuel system, and availability of specific receipt point capacity. 3. Provide advisory services to Client regarding electric pricing and service agreement. a. Analyze the electric service proposals along with primary, secondary and generation options and recommend an electric sourcing strategy and plan. The plan may include a combination of electric supplier agreement and/or installation of on-site generation.


b. Negotiate final electric service agreements that meet the pricing and reliability requirements of Client, including options for third party access to electric metering. c. Prepare and implement a regulatory strategy, if required and if an alternative power supplier is selected. Any attorney fees required for the specific purpose of obtaining regulatory approval for an alternative power supplier, if any, will be over and above U.S. Energy' s monthly fee herein, and must be pre-approved by Client. 4. Evaluate the proposed electric distribution infrastructure (substation) for reliability, future growth potential and determination of the division of ownership of facilities between the utility and the Plant. 5. Investigate economic development rates, utility grants, equipment rebates and other utility programs that may be available. B. On-Going Energy Management Services Following the Completion Period U.S. Energy will provide the following services as Client' s request: 1. Provide natural gas supply information to minimize the cost of natural gas purchased. This will include acquiring multiple supply quotes and reporting to Client the various supply index and fixed prices. U.S. Energy will not take title ...