1 FIRST AMENDMENT
TO
RENEWABLE POWER PURCHASE AND SALE AGREEMENT
This FIRST AMENDMENT TO RENEWABLE POWER PURCHASE AND SALE AGREEMENT (this “Amendment”) dated as of the date of execution hereinafter set forth opposite the name of Buyer’s signatory (the “First Amendment Effective Date ”) is made by and between City of Anaheim, a municipal corporation organized and existing under the laws of the State of California (referred to interchangeably as “ Buyer” or “Anaheim”) and San Gorgonio Farms, Inc., a California corporation (“Seller”). Buyer and Seller are sometimes referred to herein individually as a “Party” and collectively as the “Parties.” Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Renewable Power Purchase and Sale Agreement.
Recitals
A. Buyer and Seller entered into that certain Renewable Power Purchase and Sale Agreement, dated October 22, 2013 (the “PPA”).
B. Buyer and Seller agree that the Term Commencement Date is December 13, 2013.
C. Pursuant to Section 10.09(c) of the PPA, the Parties desire to amend the PPA as set forth in this Amendment.
D. The Parties have mutually agreed to one (1) extension to the term of the PPA pursuant to the terms of Section 1.06(b) thereof; the last day of the Term, as so extended, shall be December 31, 2033.
Agreement
NOW THEREFORE, in consideration of the foregoing recitals, which are incorporated herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree to amend the PPA as follows:
I. Amendments.
(a) Contract Capacity. Sections 1.01(f) and 1.01(g) of the PPA are hereby deleted in their entirety and replaced with the following:
“(f) ERR Type: Wind (as may be modified in connection with a Facility Repower pursuant to Section 3.26).”
“(g) Contract Capacity: 31 MW (as may be modified in connection with a Facility Repower pursuant to Section 3.26).”
The Contract Capacity may be reduced by Seller once per Term Year, effective as of the first day of such Term Year, by Seller delivering Notice to Anaheim on or before the date that is thirty (30) days before the expiration of the preceding Term Year stating the new amount of the Contract Capacity. In no event shall the Contract Capacity be less than sixteen (16) MW. Once the Contract Capacity has been reduced in t he manner set forth herein, the Contract Capacity shall not be increased without the prior written consent of both Parties, except in connection with a Facility Repower.” 2 (b) Product Price. Section 1.07 of the PPA is hereby deleted in its entirety and replaced with the following:
“(a) Original Term: During the Original Term the Product Price is an amount equal to all CAISO Revenues associated with each MWh of Product received from the Project at the Delivery Point (net of any CAISO Charges and Fees, as set forth in this Agreement) and any subsequent CAISO True-Ups for prior periods, plus $38.50/MWh for each MWh of CEC RPS Eligible Bucket One (1) energy (as defined by Section 399.16(b)(1) of the California Public Utilities Code and as evidenced by the transfer of WREGIS Certificates to Anaheim).
(b) Original Term Extension(s) : During the Original Term extensions, the Product Price is an amount equal to all CAISO Revenues associated with each MWh of P roduct received from the Project at the Delivery Point (net of any CAISO Charges and Fees, as set forth in this Agreement) and any subsequent CAISO True -Ups for prior periods, plus $22.00/MWh for each MWh of CEC RPS Eligible Bucket One (1) energy (as defined by Section 399.16(b)(1) of the California Public Utilities Code and as evidenced by the transfer of WREGIS Certificates to Anaheim).”
(c) Generating Facility Repowering . The following new Section 3.26 of the PPA is hereby inserted in the appropriate numerical order:
“3.26 Generating Facility Repowering.
Notwithstanding anything else in this Agreement, Seller shall be permitted, without the consent of Anaheim, to modify the Generating Facility by replacing existing Wind Turbines with new or different wind turbines having a projected useful life that is no shorter than the expected useful life of the existing Wind Turbines, so long as the aggregate Wind Turbine generating capacity after such replacement does not exceed 33 MW, adding energy storage devices that shall not negatively affect or interfere with the operation or maintenance of the Generating Facility, and making other changes reasonably required to facilitate the foregoing (“Facility Repower”).
If Seller elects to undertake a Facility Repower:
(a) no less than one hundred twenty (120) days prior to the commencement of the Facility Repower Period , Seller shall provide to Anaheim Notice of the Facility Repower pursuant to Section 3.11(d) , which Notice shall describe in reasonable detail the work to be undertaken and include the expected start and end dates of the Facility Repower Period which shall not to exceed six (6) months;
(b) in recognition of emerging technologies and opportunities that will continue to evolve during the Original Term extension(s), Seller shall have the right to incorporate the use of energy storage devices as a Generating Facility benefit, on the condition that (i) the incorporation of energy storage devices does not affect the Generatin g Facility’s EPS Compliance or RPS Compliance , (ii) the incorporation of energy storage devices does not (x) diminish Anaheim’s rights or benefits hereunder or (y) increase or materially change Anaheim’s obligations or liabilities hereunder, other than (A) with respect to Anaheim acting as Scheduling Coordinator for the Generating Facility (including, if applicable, any storage facilities), or (B) to the extent that Seller pr ovides reasonable compensation to 3 Anaheim, (iii) Seller is otherwise able to continue to comply with all obligations of Seller under this Agreement, and ( iv) Seller obtains increased Insurance in the types and amounts reasonably acceptable to Anaheim for the energy storage devices;
(c) Seller shall deliver to Anaheim no less than one hundred twenty (120) days prior to the expected resumption of commercial operation of the Generating Facility following the Facility Repower Period, a price quote for all energy storage devices’ Products, Green Attributes, and Environmental Attributes including Resource Adequacy Benefits (“Energy Storage Products”) . Anaheim shall have the first right to all Energy Storage Products and have sixty (60) days after receipt of the aforementioned price quote from Seller to accept or reject such offer for all Energy Storage Products. If, during the required time period, Anaheim does not accept or reject the offer for the Energy Storage Products , then for purposes hereunder, Anaheim shall be deemed to have rejected such offer . If Anaheim accepts such offer, the Parties shall enter into good faith negotiations for a period of one hundred twenty (120) days for the amendment of this Agreement to reflect such offer and any intervening market conditions, and Seller shall use commercially reasonable efforts to coordinate the energy storage devices with minimal interference to the Generating Facility. If (i) Anaheim rejects the offer for the Energy Storage Products pursuant to this clause (c), (ii) Anaheim is deemed to reject such offer pursuant to this clause (c) , or (iii) the Parties fail to amend this Agreement within 120 days as set forth in the immediately preceding sentence, then Seller shall be free to sell, transfer, assign, and/or otherwise dispose of all Energy Storage Products without notice to or consent from Anaheim for the duration of the Term.
(d) For the avoidance of doubt, Anaheim shall not be respon sible for any cost associated with the energy storage devices ’ construction, decommissioning or demolition of the Facility Repower or any environmental or other liability associated with the construction, decommissioning or demolition of the Facility Repower without regard to the timing or cause of the construction, decommissioning or demolition.
(e) All rights and obligations under Sections 1.01(g), 3.12, 3.13, 3.14, 3.15, 3.18, and 3.21 shall be suspended during the Facility Repower Period to the extent reasonably necessary to allow Seller to undertake the Facility Repower; such rights and obligations will recommence in full force and effect on the first day following the Facility Repower Period;
(f) As soon as is reasonably practicable following end of the Facility Repower Period, Seller shall provide to Anaheim:
(i) updated information as applicable with respect to the items set forth in Section 3.17,
(ii) an updated Exhibit B, and any other updated Exhibits as are reasonably necessary for Anaheim to continue to operate as the Scheduling Coordinator of the Generating Facility, and
4 (iii) the definition of “Contract Capacity” shall be amended to be equal to the nameplate capacity of the Generating Facility as set fort h in such updated Exhibit B;
(g) Seller shall continue to be subject to Seller’s Energy Delivery Obligation pursuant to Section 3.07 during and after the Facility Repower Period, subject to the provisions of Section 3.25; and
(h) Anaheim shall negotiate in good faith with Seller regarding such changes to the Agreement as may be necessary to accommodate the Facility Repower.”
(d) Events of Default. Sections 6.01(c)(iv), 6.01(vii) and 6.01(xi) are hereby deleted in their entirety and replaced with the following in the appropriate order:
“(iv) The sum of Qualified Amounts plus Lost Output in any consecutive six (6) month period is not at least ten percent (10%) of 70,000 MWh and Seller fails to demonstrate to Anaheim’s reasonable satisfaction, within ten (10) Business Days after Notice from Anaheim, a legitimate reason for the failure to meet the ten percent (10%) minimum; provided, that this Section 6.01(c)(iv) shall not apply during a Facility Repower Period;”
“(vii) Seller removes from the Site equipment upon which the Contract Capacity has been based (except (1) for the purposes of replacement, refurbishment, repair or maintenance, (2) if such equipment has failed as a result of ordinary aging and wear and tear and i s not capable of refurbishment or repair, or (3) in connection with a Facility Repower and the equipment is not returned within five (5) Business Days after Notice from Anaheim;”
“(xi) A termination of, or cessation of service under, any agreement necessary for Seller:
(1) To interconnect the Generating Facility to the Transmission Provider’s electric system;
(2) To transmit the Product on the Transmission Provider’s electric system; or
(3) To comply with the CAISO Tariff;
if such service is not restored within thirty (30) days after such termination or cessation; provided, that this Section 6.01(c)(xi) shall not apply with respect to any such termination or cessation of service in connection with a Facility Repower.”
(e) Defined Terms. Exhibit A of the PPA is hereby amended by adding (or replacing, as the case may be) the following defined terms, in alphabetic order and appropriately numbered as they appear in Exhibit A:
““Energy Storage Products” has the meaning set forth in Section 3.26(c).”
““Environmental Attributes ” means RECs, and any and all other current or future credits, benefits, emission reductions, offsets or allowances, howsoever entitled, named, registered, created, measured, allocated or validation (a) that are any time recogniz ed or deemed (or both) by Anaheim, applicable law, or any voluntary or mandatory program of any other Governmental Authority or oth er person and (b) that are attributable to (i) generation of 5 wind system energy during the Original Term extensions required to be delivered by Seller to Anaheim during the Original Term extensions, (ii) storage of energy or other services in connection with the energy storage devices and (iii) emissions or other environmental characteristics of wind system energy or its displacement of conventional or other types of energy generation. Environmental Attributes include any of the aforementioned arising out of legislation or regulation concerned with oxides of nitrogen, sulfur, carbon, or any other greenhouse gas or chemical co mpound, particulate matter, soot, or mercury, or implementing the United Nations Framework Convention on Climate Change (the “UNFCC”), the Kyoto Protocol to the UNFCCC, California’s greenhouse gas legislation (including RPS Legislation and California Assembly Bill 32 (Global Warming Solutions Act of 2006) and any regulations implemented pursuant to that act, including any compliance instruments accepted under the California Cap and Greenhouse Gas Emissions and Market-Based Compliance Me chanisms regulations of the California Air Resources Board or any successor regulations thereto) or any similar international, federal, state or local program or crediting “early action” with a view thereto, laws or regulations involving or administered by Clean Air Markets Division (the “ CAMD”), and all Environmental Attribute Reporting Rights, including all evidences (if any) thereof such renewable energy certificates of any kind.”
““Facility Repower” has the meaning set forth in Section 3.26.”
““Facility Repower Period” means the period during which the Generating Facility Capacity is materially reduced in connection with the Facility Repower , which shall not exceed six (6) months.”
““First Amendment Effective Date” has the meaning set forth in that certain First Amendment to Renewable Power Purchase and Sale Agreement, by and between the Seller and Anaheim.”
II. Miscellaneous.
(a) Representations Regarding this Amendment . By its execution hereof, each Party represents and warrants that it is authorized to enter into this Amendment, that this Amendment does not conflict with any contract, lease, or other obligation to which it is a party or by which it is bound, which conflict could reasonably be expected to have a material adverse effect on the ability of such Party to perform its obligations hereunder, and that this Amendment represents its valid and binding obligation, enforceable against it in accordance with its terms, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of rights generally. All terms and conditions of this Amendment shall be binding on the Parties, their heirs, administrators, successors, representatives, and/or assigns.
(b) No Other Amendments . Except as specifically provided in this Amendment, no other amendments, revisions, or changes are made to the PPA. All other terms and conditions of the PPA remain in full force and effect and the Parties hereby ratify and confirm their rights, obligations, and representations under the PPA, as amended hereby.
(c) Conforming References. Upon the effectiveness of this Amendment, each reference in the PPA to “this Agreement”, “thereund er”, “hereto”, “herein”, or words of like import, shall mean and be a reference to the PPA as amended hereby and each reference to a Section or subsection of the Agreement shall be a reference to such Section or subsection as amended.
6 (d) Counterparts. This Amendment may be executed in one or more counterparts, each of which will be deemed to be an original of this Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement. Copies of this Amendment and of signature pages exchanged by facsimile transmission, Portable Document Format (i.e., PDF), or by other electronic means may be used in lieu of the original Amendment for all purposes; provided however, original (wet) signatures are required for the execution and delivery of the Amendment.
(e) Governing Law ; Mediation. This Amendment shall be governed by Section 10.07 (Governing Law) and Article Twelve (Mediation) of the PPA.
(f) Amendment. This Amendment may be amended, supplemented or modified only by a written instrument duly executed by or on behalf of each of the Parties in accordance with Section 10.09(n) of the PPA.
(g) Entire Agreement. This Amendment contains the entire understanding of the Parties with respect to the subject matter hereof.
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