ENERGY STORAGE AGREEMENT
COVER SHEET
Seller: Roadhouse Energy Storage, LLC, a Delaware limited liability company Buyer: City of Anaheim, a California municipal corporation Description of Facility: A 300 MW / 1,200 MWh (at 4 hours of discharge) battery energy storage system, located in San Bernadino County, California
Milestones:
Milestone Expected Date for Completion
Execute Interconnection Agreement Complete
Evidence of Site Control Prior to Construction Start
Guaranteed Construction Start Date April 1, 2026
Target Commercial Operation Date June 15, 2027
Guaranteed Commercial Operation Date October 1, 2027
Delivery Term: Twenty (20) Contract Years
Guaranteed Capacity: 300 MW
Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
1 83.9%
2 83.6%
3 83.3%
4 83.0%
5 82.7%
6 82.4%
7 82.1%
8 81.8%
9 81.5%
10 81.2%
11 80.9%
12 80.6%
13 80.3%
14 80.0%
15 79.7%
16 79.4%
17 79.1%
18 78.8%
19 78.5%
20 78.2%
Guaranteed Construction Start Date: April 1, 2026, as such date may be extended by a Development Cure Period pursuant to Section 5 of Exhibit B.
Guaranteed Commercial Operation Date: October 1, 2027, as such date may be extended by a Development Cure Period pursuant to Section 5 of Exhibit B.
Contract Price:
Contract Year Contract Price
1 – 20 $18.76 per kW-mo. (flat) with no escalation
Product:
☒ Facility Energy
☒ Installed Capacity
☒ Capacity Attributes
☒ Ancillary Services
Expected RA Capacity : Installed Capacity multiplied by the applicable Seasonal Availability Guarantee
Scheduling Coordinator: Buyer
Security Amount:
Development Security amount: $100/kW for each kW of Guaranteed Capacity (measured in kW) Operation Security amount : $ 100/kW for each kW of Installed Capacity (measured in kW) ; provided, however:
(i) so long as the Seller owns the Facility, or if the Facility is transferred to an Affiliate of Seller pursuant to the terms of this Agreement, the Operation Security will be reduced to $50/kW for each kW of Installed Capacity beginning on the first day of the eleventh (11th) Contract Year through the end of the Term ; provided that, notwithstanding anything contrary in this Agreement, such Seller Affiliate is a Qualified Operator or has retained a Qualified Operator, and; (ii) if the Facility is trans ferred to a non- Affiliate pursuant to the terms of this Agreement, the amount of the Operation Security shall remain at $100/kW for each kW of Installed Capacity for the entire Delivery Term.
TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS 1
1.1 Definitions ............................................................................................................. 1
1.2 Rules of Interpretation ...................................................................................... 21 ARTICLE 2 TERM; CONDITIONS PRECEDENT; EARLY TERMINATION ..................... 22
2.1 Contract Term. ................................................................................................... 22
2.2 Conditions Precedent ......................................................................................... 22
2.3 Development; Construction; Progress Reports............................................... 23
2.4 Remedial Action Plan ........................................................................................ 23
2.5 Pre-Commercial Operation Actions ................................................................. 23
2.6 Seller Pre-COD Termination Right ................................................................. 24 ARTICLE 3 PURCHASE AND SALE ...................................................................................... 24
3.1 Purchase and Sale of Product ........................................................................... 24
3.2 Facility Energy and Ancillary Services ............................................................ 24
3.3 Ownership of Incentives .................................................................................... 25
3.4 Capacity Attributes ............................................................................................ 25
3.5 Resource Adequacy Failure. ............................................................................. 25
3.6 CAISO Ancillary Services Certification; Additional Ancillary Services...... 26
3.7 Change in Law and Compliance Expenditure Cap ........................................ 27 . 27
ARTICLE 4 OBLIGATIONS AND DELIVERIES ................................................................... 28
4.1 Delivery ............................................................................................................... 28
4.2 Station Use .......................................................................................................... 29
4.3 Performance Guarantees ................................................................................... 29
4.4 Facility Testing ................................................................................................... 30
4.5 Testing Costs and Revenues .............................................................................. 31
4.6 Facility Operations............................................................................................. 31
4.7 Dispatch Notices ................................................................................................. 32
4.8 Energy Management .......................................................................................... 32
4.9 Capacity Availability Notice ............................................................................. 33
4.10 Outages................................................................................................................ 34 ARTICLE 5 TAXES, GOVERNMENTAL AND ENVIRONMENTAL COSTS .................... 35
5.1 Allocation of Taxes and Charges ...................................................................... 35
5.2 Cooperation ........................................................................................................ 36 ARTICLE 6 MAINTENANCE AND REPAIR OF THE FACILITY ....................................... 36
6.1 Maintenance of the Facility ............................................................................... 36
6.2 Maintenance of Health and Safety ................................................................... 36
6.3 Shared Facilities ................................................................................................. 37 ARTICLE 7 METERING ........................................................................................................... 37
7.1 Metering .............................................................................................................. 37
7.2 Meter Verification .............................................................................................. 38 ii
ARTICLE 8 INVOICING AND PAYMENT; CREDIT ............................................................ 38
8.1 Invoicing.............................................................................................................. 38
8.2 Payment .............................................................................................................. 38
8.3 Books and Records ............................................................................................. 39
8.4 Payment Adjustments; Billing Errors ............................................................. 39
8.5 Billing Disputes................................................................................................... 39
8.6 Netting of Payments ........................................................................................... 39
8.7 Development Security and Operation Security. .............................................. 40 (a) Seller’s Development Security .......................................................................... 40 (b) Seller’s Operation Security ............................................................................... 40
8.8 First Priority Security Interest in Cash or Cash Equivalent Collateral ....... 40 ARTICLE 9 NOTICES .............................................................................................................. 41
9.1 Addresses for the Delivery of Notices............................................................... 41
9.2 Acceptable Means of Delivering Notice ........................................................... 41 ARTICLE 10 FORCE MAJEURE ............................................................................................. 42
10.1 Definition ............................................................................................................ 42
10.2 No Liability If a Force Majeure Event Occurs ............................................... 43
10.3 Notice ................................................................................................................... 44
10.4 Termination Following Force Majeure Event ................................................. 44 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ..................................................... 44
11.1 Events of Default ................................................................................................ 44
11.2 Remedies; Declaration of Early Termination Date ........................................ 47
11.3 Damage Payment; Termination Payment ....................................................... 47
11.4 Notice of Payment of Damage Payment ........................................................... 48
11.5 Disputes With Respect to Damage Payment ................................................... 48
11.6 Rights And Remedies Are Cumulative ............................................................ 48
11.7 Mitigation............................................................................................................ 49 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES ........ 49
12.1 No Consequential Damages ............................................................................... 49
12.2 Waiver and Exclusion of Other Damages ........................................................ 49 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY .......................... 50
13.1 Seller’s Representations and Warranties ........................................................ 50
13.2 Buyer’s Representations and Warranties ........................................................ 51
13.3 General Covenants ............................................................................................. 52 ARTICLE 14 ASSIGNMENT.................................................................................................... 52
14.1 General Prohibition on Assignments ............................................................... 52
14.2 Collateral Assignment ....................................................................................... 53
14.3 Other Assignments and Permitted Transfers.................................................. 53
14.4 Shared Facilities; Portfolio Financing ............................................................. 53
14.5 Accommodation of Lenders .............................................................................. 53 iii
ARTICLE 15 DISPUTE RESOLUTION ................................................................................... 54
15.1 Governing Law ................................................................................................... 54
15.2 Judicial Reference .............................................................................................. 54
15.3 Dispute Resolution ............................................................................................. 54
15.4 Attorneys’ Fees ................................................................................................... 54
15.5 Venue ................................................................................................................... 54 ARTICLE 16 INDEMNIFICATION ......................................................................................... 54
16.1 Indemnification .................................................................................................. 54
16.2 Claims.................................................................................................................. 55 ARTICLE 17 INSURANCE ...................................................................................................... 56
17.1 Insurance ............................................................................................................ 56 ARTICLE 18 CONFIDENTIAL INFORMATION ................................................................... 58
18.1 Definition of Confidential Information ............................................................ 58
18.2 Duty to Maintain Confidential Information .................................................... 58
18.3 Irreparable Injury; Remedies ........................................................................... 59
18.4 Further Permitted Disclosure ........................................................................... 59
18.5 Press Releases ..................................................................................................... 59 ARTICLE 19 MISCELLANEOUS ............................................................................................ 59
19.1 Entire Agreement; Integration; Exhibits......................................................... 59
19.2 Amendments ....................................................................................................... 59
19.3 No Waiver ........................................................................................................... 59
19.4 No Agency, Partnership, Joint Venture or Lease ........................................... 60
19.5 Severability ......................................................................................................... 60
19.6 Mobile-Sierra...................................................................................................... 60
19.7 Counterparts ...................................................................................................... 60
19.8 Binding Effect ..................................................................................................... 60
19.9 Forward Contract; Inapplicability/Waiver of Bankruptcy Code Section 366 .......................................................................................................... 60
19.10 Change in Electric Market Design ................................................................... 61
19.11 Further Assurances ............................................................................................ 61
19.12 Survival.
iv
Exhibits:
Exhibit A Facility Description
Exhibit B Facility Construction Commercial Operation and Guaranteed Capacity Exhibit C Compensation
Exhibit D Scheduling Coordinator Responsibilities
Exhibit E Progress Reporting Form
Exhibit F-1 Form of Monthly Expected Available Capacity Report Exhibit F-2 Form of Monthly Expected Storage Capability Report Exhibit G Form of Daily Availability Notice
Exhibit H Form of Commercial Operation Date Certificate Exhibit I Form of Storage Capacity Test Certificate
Exhibit J Form of Construction Start Date Certificate
Exhibit K Form of Letter of Credit
Exhibit L Form of Replacement RA Notice
Exhibit M Notices
Exhibit N Storage Capacity Tests
Exhibit O Seasonal Availability Calculation
Exhibit P Operating Restrictions
Exhibit Q Metering Diagram
Exhibit R Intentionally Omitted
Exhibit S Form of Consent and Agreement
Exhibit T Form of Estoppel Certificate
Exhibit U Milestone Schedule
Exhibit V Insurance Exception(s)
1 ENERGY STORAGE AGREEMENT
This Energy Storage Agreement (“Agreement ”) is entered into as of May 9, 2024 (the “Effective Date”), between Buyer and Seller. Buyer and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties.” All initially capitalized terms used in this Agreement are used with the meanings ascribed to them in Section 1.1 of this Agreement.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, maintain, and operate the Facility; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:
ARTICLE 1
DEFINITIONS
1.1 Definitions. The following terms, when used herein with initial capitalization, shall have the meanings set forth below:
“AC ” means alternating current.
“Accepted Compliance Costs” has the meaning set forth in Section 3.7(a). “Additional Ancillary Services” has the meaning set forth in Section 3.6. “Additional Cycles Payment Amount” has the meaning set forth in Exhibit P. “Affiliate” means, with respect to any Person, each Person that directly or indirectly controls, is controlled by, or is under common control with such designated Person. For purposes of this definition and the definition of “Permitted Transfer” and “Permitted Transferee”, “control”, “controlled by”, and “under common control with”, as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person. Notwithstanding the foregoing, with respect to Seller, Affiliate shall include any investment funds or publicly- traded vehicles for the ownership of operating power generation, storage, or transmission assets (such as a “ yield co”) controlled by Seller, NextEra Energy, Inc. or an Affiliate of NextEra Energy, Inc., NextEra Energy Partners, LP (“NEP”), NextEra Energy Operating Partners, LP (“ NEOP”), and NextEra Energy Capital Holdings, Inc. (“NEECH”), and their respective direct or indirect subsidiaries. 2 “Agreement” has the meaning set forth in the Preamble and includes the Cover Sheet and all Exhibits and schedules hereto, and any written supplements hereto. “A lternative Dispatches ” has the meaning set forth in Section 4.6(b). “Ancillary Services ” means spinning reserve, non-spinning reserve, regulation up, regulation down, voltage support, and any other ancillary service, as each is defined in the CAISO Tariff as of the Effective Date, in each case that can be provided by the Facility based on the Operating Restrictions. For avoidance of doubt, the Ancillary Services do not include black start. “A utomated Dispatches ” has the meaning set forth in Section 4.6(b). “ADS” has the meaning set forth in the CAISO Tariff.
“AGC” has the meaning set forth in the CAISO Tariff.
“Availability Adjustment” has the meaning set forth in Exhibit O. “Availability Notice” has the meaning set forth in Section 4.9(b). “Availability Standards” has the meaning set forth in the CAISO Tariff or such other similar term as modified and approved by FERC and incorporated in the CAISO Tariff. “Available Capacity” means the capacity of the Facility, expressed in whole MWs, that is expected to be mechanically available to charge and discharge Energy and provide Ancillary Services.
“B ankrupt ” or “Bankruptcy” means with respect to any entity, that such entity (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of sixty (60) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due.
“B
ESS Equipment ” means batteries, battery modules, onboard sensors, control components, inverters, transformers, or any of their components. “B usiness Day ” means any day except a Saturday, Sunday, the day after Thanksgiving, or a Federal Reserve Bank holiday. A Business Day begins at 8:00 a.m. and ends at 5:00 p.m. Pacific Prevailing Time.
“B uyer” has the meaning set forth on the Cover Sheet.
“Buyer Dispatched Test” has the meaning in Section 4.4(c). 3 “Buyer’s Indemnified Parties” has the meaning set forth in Section 18.2(c). “Buyer’s Risk Manager” means the officer appointed by Buyer as Risk Manager who is responsible for insurance decisions.
“CAI SO ” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“C AISO Certification ” means the certification and testing requirements for a storage unit set forth in the CAISO Tariff that are applicable to the Facility, including certification and testing requirements for Ancillary Services, PMAX, and PMIN that apply to the Facility. “C AISO Charges Invoice ” has the meaning set forth in Exhibit D. “CAISO Dispatch ” means any Charging Notice or Discharging Notice given by the CAISO to the Facility, whether through ADS, AGC or any successor communication protocol, communicating an Ancillary Service Award (as defined in the CAISO Tariff) or directing the Facility to charge or discharge at a specific MW rate for a specific period of time or to a specified Stored Energy Level.
“C
AISO Grid ” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAI SO Tariff ” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC.
“C
apacity Attribute ” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of power that the Facility can charge, discharge and deliver to the Delivery Point at a particular moment and that can be purchased, sold or conveyed under CAISO market rules, including Resource Adequacy Benefits. “C
apacity Damages ” has the meaning set forth in Section 6 of Exhibit B. “CEQA” means the California Environmental Quality Act.
“Change in Law” means the adoption, promulgation, taking effect of, implementation, or modification of the CAISO Tariff by the CAISO, or of any Law, occurring or becoming effective after the Effective Date that (i) relates to the registration, valuation, retirement, or transfer of the Product, or (ii) that affects the amount of Resource Adequacy Capacity that is eligible to be shown on a Supply Plan, or (iii) that otherwise relates to any performance obligations under the Agreement, and that has increased Seller’s costs a bove the costs that could reasonably have been contemplated as of the Effective Date to take all actions to comply with Seller’s obligations under this Agreement or that reduces or impairs the amount of Product that can be provided by the Facility.
“C
hange of Control ” means, except in connection with public market transactions of 4 equity interests or capital stock of Seller’s Ultimate Parent, any circumstance in which Ultimate Parent ceases to own, directly or indirectly through one or more intermediate entities, more than fifty percent (50%) of the outstanding equity interests in S eller; provided that in calculating ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more intermediate entities shall not be counted towards Ultimate Parent’s ownership interest in Seller unless Ultimate Parent directly or indirectly owns more than fifty percent (50%) of the outstanding equity interests in each such intermediate entity; and (b) ownership interests in Seller owned directly or indirectly by any Lender (including any cash equity or tax equity provider) or assignee or transferee thereof shall be excluded from the total outstanding equity interests in Seller.
“Charging Energy” means Energy delivered to the Facility (including pursuant to a Charging Notice) as measured at the Facility Metering Point by the Facility Meter, as such meter readings are adjusted consistent with CAISO meter requirements and Prudent Operating Practices to account for Electrical Losses.
“C
harging Notice ” means the operating instruction, and any subsequent updates, given by Buyer’s SC or the CAISO to Seller, directing the Facility to charge at a specific MW rate for a specific period of time or to a specified Stored Energy Level ; provided, any such operating instruction shall be in accordance with the Operating Restrictions. “CO D Certificate ” has the meaning set forth in Section 2 of Exhibit B. “Commercial Operation” has the meaning set forth in Exhibit B. “Commercial Operation Date” has the meaning set forth in Section 2 of Exhibit B. “Commercial Operation Delay Damages ” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) one-hundred eighty (180). “C ommercial Operation Storage Capacity Test ” means the Storage Capacity Test conducted in connection with Commercial Operation of the Facility, including any additional Storage Capacity Test for additional capacity installed after the Commercial Operation Date pursuant to Section 6 of Exhibit B.
“Communications Protocols ” means certain Operating Restrictions developed by the Parties pursuant to Exhibit P that involve procedures and protocols regarding communication with respect to the operation of the Facility pursuant to this Agreement. “C ompliance Actions ” has the meaning set forth in Section 3.7(b). “Compliance Costs” means costs required to be incurred by Seller as a result of a Change in Law (i) due to any required physical change to the Facility or its interconnection facilities or shared facilities, or any change in the method of operation of the Facility, in each case in light of counting conventions or other rulings or interpretations in effect following the Change in Law, or 5 (ii) that result in a material increase in the costs that could have been reasonably expected by Seller as of the Effective Date in order to comply with Seller’s obligations under the Agreement with respect to the construction or operation of the Facility or its related interconnection facilities or shared facilities, and the delivery of the Product. For avoidance of doubt, Compliance Costs shall not include any liability or obligations for Replacement RA or RA Deficiency Amounts. “Compliance Expenditure Cap” has the meaning set forth in Section 3.7(b). “Confidential Information” has the meaning set forth in Section 18.1. “Consent to Collateral Assignment” has the meaning set forth in Section 14.2. “Construction Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) one hundred eighty (180). “C onstruction Start ” has the meaning set forth in Section 1 of Exhibit B. “Construction Start Date” has the meaning set forth in Section 1 of Exhibit B. “Contract Capacity” means the total capacity (in MW) of the Facility initially equal to the Guaranteed Capacity amount set forth on the Cover Sheet, as the same may be adjusted from time to time pursuant to Section 6 of Exhibit B or Section 4.4 and Exhibit N to reflect the results of the most recently performed Storage Capacity Test, not to exceed the Guaranteed Capacity. “Contract Term” has the meaning set forth in Section 2.1(a). “Contract Year” means a period of twelve (12) consecutive months. The first Contract Year shall commence on the Commercial Operation Date and each subsequent Contract Year shall commence on the anniversary of the Commercial Operation Date. “C
osts ” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third -party transaction costs and expenses reasonably incurred by such Non-Defaulting Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace this Agreement, and all reasonable and documented attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating this Agreement.
“C over Sheet ” means the cover sheet to this Agreement, which is incorporated into this Agreement.
“C PM Soft Offer Cap ” has the meaning set forth in the CAISO Tariff. “CPUC” means the California Public Utilities Commission, or any successor government entity.
“CP UC System RA Penalty ” means the penalty price (in dollars per kW-month) adopted by the CPUC for a load serving entity’s failure to procure up to the system RAR that applies to the RA Shortfall Month.
6 “Credit Rating” means, with respect to any entity, the rating assigned to such entity’s unsecured, senior long-term debt obligations by Fitch, S&P or Moody’s. If ratings by Fitch, S&P and Moody’s are not equivalent, the two highest ratings shall apply. “C umulative Year-to-Date Stored Energy Level” has the meaning set forth in Exhibit P. “Curtailment Order” means any of the following:
(a) CAISO orders, directs, alerts, or provides notice to a Party, to curtail deliveries of Facility Energy or Charging Energy, including due to: (i) any System Emergency; (ii) any warning of an anticipated System Emergency, or warning of an imminent condition or situation, which jeopardizes CAISO’s electric system integrity or the integrity of other systems to which CAISO is connected; or (iii) in response to an Energy oversupply or potential Energy oversupply; (b) a curtailment ordered by the Transmission Provider including due to: (i) any situation that affects normal function of the electric system including any abnormal condition that requires action to prevent circumstances such as equipment damage, loss of load, or abnormal voltage conditions, or (ii) any warning, forecast or anticipation of conditions or situations that jeopardize the Transmission Provider’s electric system integrity or the integrity of other systems to which the Transmission Provider is connected;
(c) a curtailment ordered by CAISO or the Transmission Provider including due to a Transmission System Outage or scheduled or unscheduled, maintenance or construction, on the Participating Transmission Owner’s transmission facilities; or (d) a curtailment in accordance with Seller’s obligations under its Interconnection Agreement with the Transmission Provider or distribution operator. “Damage Payment ” means the amount to be paid by the Defaulting Party to the Non-Defaulting Party as a result of the termination of this Agreement, or by Seller to Buyer in the event of a termination by Seller under Section 2.6, occurring prior to the Commercial Operation Date, in the dollar amount set forth in Section 11.3(a). “Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Day-Ahead Schedule” has the meaning set forth in the CAISO Tariff. “Defaulting Party” has the meaning set forth in Section 11.1(a). “Delay Damages” means Construction Delay Damages and Commercial Operation Delay Damages.
“D elivery Point ” has the meaning set forth in Exhibit A. “Delivery Term ” means the period of Contract Years set forth on the Cover Sheet beginning on the Commercial Operation Date, unless terminated earlier in accordance with the terms and conditions of this Agreement.
7 “Development Cure Period” has the meaning set forth in Section 5 of Exhibit B. “Development Security” means a Letter of Credit in the amount set forth on the Cover Sheet.
“D ischarging Energy ” means Energy delivered from the Facility to the Delivery Point (including pursuant to a Discharging Notice) as measured at the Facility Metering Point by the Facility Meter, as such meter readings are adjusted consistent with CAISO meter requirements and Prudent Operating Practices to account for Electrical Losses. “D ischarging Notice ” means the operating instruction, and any subsequent updates, given by Buyer’s SC or the CAISO to the Facility, directing the Facility to discharge Facility Energy at a specific MW rate for a specific period of time or to a specified Stored Energy Level. “D isclosing Party” has the meaning set forth in Section 18.2(a) . “Dispatch Notice” means any Charging Notice , Discharging Notice , and subsequent updates thereto, given by the CAISO, Buyer, or Buyer’s SC to Seller directing the Facility to charge or discharge Facility Energy at a specific MW rate for a specific period of time or to a specified Stored Energy Leve l; provided, any such Charging Notice, Discharging Notice, and update shall be in accordance with the Operating Restrictions and the CAISO Tar iff. Dispatch Notices may be communicated electronically through ADS, AGC, or e-mail, or telephonically, in accordance with the procedures set forth in Section 4.7. Telephonic or other verbal communications shall be documented (either recorded by tape, electronically or in writing) and such recordings shall be made available to both Buyer and Seller upon request for settlement purposes. Any instruction to charge or discharge the Facility pursuant to a Buyer Dispatched Test shall be considered a Charging Notice or Discharging Notice, as applicable. “DO
C” means the U.S. Department of Commerce.
“Early Termination Date” has the meaning set forth in Section 11.2(a). “Effective Date” has the meaning set forth on the Preamble. “Efficiency Rate” means the rate calculated by dividing Energy Out by Energy In (a) pursuant to Exhibit N for the initial Efficiency Rate, and (b) based on actual Facility operations for each calendar month thereafter.
“E lectrical Losses ” means all transmission or transformation losses (a) between the Delivery Point and the Facility Metering Point associated with delivery of Charging Energy, and (b) between the Facility Metering Point and the Delivery Point associated with delivery of Facility Energy.
“E
nergy ” means electrical energy, measured in kilowatt -hours, megawatt -hours, or multiple units thereof.
“E nergy In ” means the total Energy delivered to the Delivery Point pursuant to one or more Charging Notices during the relevant period as recorded by the CAISO. 8 “Energy Management System ” or “EMS ” means the Facility’s energy management system.
“E nergy Out ” means the total Energy delivered to the Delivery Point pursuant to one or more Discharging Notices during the relevant period as recorded by the CAISO. “Event of Default” has the meaning set forth in Section 11.1. “Excused Hour (s)” means Force Majeure Events, any unavailability caused by Buyer, Storage Capacity Tests, System Emergencies, curtailments including Curtailment Orders , Transmission System Outages, compliance with any Operating Restriction, Serial Defects, and Planned Outages.
“E xpected RA Capacity ” has the meaning set forth on the Cover Sheet. “Facility” means the energy storage facility described on the Cover Sheet and in Exhibit A located at the Site , including mechanical equipment and associated facilities and equipment required to deliver Product (but excluding any Shared Facilities), as such energy storage facility may be expanded or otherwise modified from time to time in accordance with the terms hereof. “F acility Cost ” means as of the applicable measurement date, the aggregate amount of all costs and expenses incurred by Seller for the development, design, engineering, equipping, procuring, constructing, installing, starting up and testing of the Facility, including (a) the cost of all labor, services, materials, supplies, equipment, tools, transportation, supervision, storage, training, demolition, site preparation, civil works, and remediation in connection therewith, (b) the cost of acquiring title to , the leasehold in terest, and/or any other property, easement or other interest in the Site, (c) the cost of acquiring the Permits for the Facility, (d) the interest costs during construction, and (e) the cost of establishing a spare parts inventory for the Facility. “F
acility Debt ” means any senior or subordinated construction, interim or long-term debt financing (not including any back leverage debt for which Seller has no liability and for clarification purposes not including any cash equity or tax equity financing) or refinancing for or in connection with the development, construction, purchase, ownership, installation or operation of the Facility, including (a) any financing or refinancing provided to Seller or any upstream equity owner with respect to the Facility (including as part of a portfolio with other energy generation or storage projects, with the amount of such debt attributable to the Facility equal to the pro rata amount of the MW capacity of the Facility as compared to the total MW capacity of any other projects included in such financing/the entire portfolio) and (b) any interest rate protection agreements hedging any of the foregoing debt obligations. “F
acility Energy ” means the Energy delivered from the Facility to the Delivery Point during any Settlement Interval or Settlement Period, as measured at the Facility Metering Point by the Facility Meter, as such meter readings are adjusted by the CAISO for any applicable Electrical Losses and net of Station Use. All Facility Energy shall have originally been delivered to the Facility as Charging Energy.
“F acility Meter ” means a CAISO-approved bi-directional revenue quality meter or meters (with a 0.3 accuracy class), metering scheme, CAISO-approved data processing gateway or remote 9 intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Charging Energy delivered to the Facility Metering Point and the amount of Facility Energy delivered to the Delivery Point for the purpose of invoicing in accordance with Section 8.1
. T he Facility may contain multiple
measurement devices that will make up the Facility Meter, and, unless otherwise indicated, references to the Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together.
“F
acility Metering Point ” means the location(s) of the Facility Meter shown in Exhibit Q. “Federal Financial Regulator” means the United States Federal Reserve System, Office of the Comptroller of the Currency, or Federal Deposit Insurance Corporation. “F ERC” means the Federal Energy Regulatory Commission or any successor government entity.
“F itch ” means Fitch Ratings Ltd., or its successor.
“Flexible Capacity” means, with respect to any particular Showing Month, the number of MWs of Product which are eligible to satisfy Flexible RAR. “F lexible RAR ” means the flexible capacity requirements established for load -serving entities by the CAISO pursuant to the CAISO Tariff to the Resource Adequacy Rulings, or by any other Governmental Authority with jurisdiction over the Parties. “Force Majeure Event” has the meaning set forth in Section 10.1(a). “Foreign Government” means any national, international, intergovernmental, subnational or local governmental, quasi-governmental, judicial, regulatory or administrative agency, council, parliament, court, commission, bureau, entity, or other body exercising any legal, administrative, bank resolution, executive, judicial, legislative, police, policy, treaty, regulatory or taxing authority or power that is not the United States of America or a political subdivision thereof (including for avoidance of doubt of any state, local, or municipality located within the United States of America).
“F
ull Capacity Deliverability Status ” or “FCDS” has the meaning set forth in the CAISO Tariff.
“Ga ins ” means, with respect to any Non-Defaulting Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner. Factors used in determining the economic benefit to a Non-Defaulting Party may include reference to information supplied by one or more third parties, which may include dealers in the relevant markets, information vendors, and other sources of market information, but shall exclude Affiliates of the Non-Defaulting Party, including quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads, or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs ( e.g., SP-15), all of 10 which should be calculated for the remaining Contract Term, and include the value of Capacity Attributes.
“Governmental Authority ” means any federal, state, provincial, local , or municipal government, any political subdivision thereof , or any other governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including the CEC and CAISO; provided, “Governmental Authority” shall not in any event include any Party. “G
uaranteed Capacity ” has the meaning set forth on the Cover Sheet, which is the maximum dependable operating capability of the Facility to discharge Energy, as measured in MW AC at the Delivery Point (i.e., measured at the Facility Meter and adjusted for Electrical Losses to the Delivery Point) for four (4) hours of continuous discharge. “G uaranteed Commercial Operation Date” has the meaning set forth on the Cover Sheet.
“G uaranteed Construction Start Date ” has the meaning set forth on the Cover Sheet. “Guaranteed Efficiency Rate ” means the minimum guaranteed Efficiency Rate of the Facility in each Contract Year of the Delivery Term, as set forth on the Cover Sheet. “I mbalance Energy ” means the amount of Energy in MWh, in any given Settlement Period or Settlement Interval, by which the amount of Charging Energy or Facility Energy deviates from the amount of Scheduled Energy.
“I
mport Restriction Action ” means (a) the Uyghur Forced Labor Prevention Act and/or the Hoshine Silicon Industry Withhold Release Order , and/or (b) a Governmental Authority implements any Law or policy, or a Governmental Authority including the United Status Customs & Border Protection, utilizes CF28s, Withhold Release Orders, or takes other detention, seizure or enforcement actions that prevent or delay the delivery of major equipment , including BESS Equipment procured by Seller, directly or indirectly, to be used in connection with the Facility. “I ncentives ” means: (a) all Tax Credits and other federal, state, or local Tax credits or other Tax benefits associated with the construction or ownership of, investment in, or production or storage of electricity with respect to the Facility (including Production Tax Credits, ITCs , and other credits under Sections 38, 45, 45Y, 46, 48, and 48E of the Internal Revenue Code of 1986, as amended); (b) any federal, state, or local grants, subsidies or other like benefits relating in any way to the Facility , including a cash grant available under Section 1603 of Division B of the American Recovery and Reinvestment Act of 2009, in lieu of federal tax credits or any similar or substitute payment available under subsequently enacted federal legislation; and (c) any other form of incentive relating in any way to the Facility that is not a Product. “I
ndemnified Party ” means Buyer.
“Indemnifying Party” means Seller.
11 “Initial Synchronization” means the commencement of Trial Operations (as defined in the CAISO Tariff).
“I nstalled Capacity” means the lesser of (a) PMAX, and (b) maximum dependable operating capacity of the Facility to discharge Energy for four (4) hours of continuous discharge, as measured in MW AC at the Facility Meter Point by the Facility Meter and adjusted for Electrical Losses to the Delivery Point, that achieves Commercial Operation, as evidenced by a certificate substantially in the form attached as Exhibit I hereto, as such capacity may be adjusted pursuant to Section 6 of Exhibit B.
“Inter-SC Trade” has the meaning set forth in the CAISO Tariff. “Interconnection Agreement ” means the interconnection agreement entered into by Seller or an Affiliate pursuant to which the Facility will be interconnected with the Transmission System, and pursuant to which Interconnection Facilities that are used by the Facility and any other Interconnection Facilities will be constructed, operated and maintained during the Contract Term. “I nterconnection Capacity Limit ” means the maximum instantaneous amount of Energy that is permitted to be delivered to or from the Facility to the Delivery Point under the Interconnection Agreement, in the amount of 300 MW.
“I
nterconnection Facilities ” means the interconnection facilities, control and protective devices and metering facilities required to connect the Facility with the Transmission System in accordance with the Interconnection Agreement.
“Interest Rate” has the meaning set forth in Section 8.2. “Interim Deliverability Status” has the meaning set forth in the CAISO Tariff. “ITC” means the investment tax credit established pursuant to Section 48, 48E or other applicable provisions of the United States Internal Revenue Code of 1986, as such Law may be amended or superseded.
“k
Wh ” means a kilowatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“L aw ” means any applicable law, statute, rule, regulation, decision, writ, order, decree or judgment, permit or any interpretation thereof, promulgated or issued by a Governmental Authority.
“L
ender” means, collectively, any Person ( a) providing senior or subordinated construction, interim, back leverage, mezzanine, or long-term debt, equity, or tax equity financing or refinancing for or in connection with the development, construction, purchase, installation, or operation of the Facility, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including cash or tax equity), public debt , or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or refinancing for the Facility or purchasing equity ownership interests of Seller and/or its Affiliates, 12 and any trustee or agent or similar representative acting on their behalf, (b) providing interest rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations , (c) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Facility , or (d) acting as issuing bank for any Letter(s) of Credit issued pursuant hereto or in connection with the Facility. “Letter(s) of Credit ” means one or more irrevocable nontransferable standby letters of credit in a form substantially similar to the letter of credit set forth in Exhibit K and issued by: (i) a United States commercial bank; (ii) a United States branch of a Canadian, Japanese, or Australian bank from which any draw can be made; or (iii) United States branch of another foreign bank from which any draw can be made that is acceptable to Buyer in its sole discretion; with any such bank having: (A) U.S-based assets of at least $10 billion , and (B) a Credit Rating of at least A - from S&P, A- from Fitch, or A3 from Moody’s from at least two such ratings agencies, or, if such entity is rated by only one of S&P, Fitch, and Moody’s, a Credit Rating of at least AA- from S&P, AA- from Fitch, or Aa3 from Moody’s. Notwithstanding anything contrary herein, any Letter of Credit will specify that the term of the Letter of Credit is automatically extended or renewed at least thirty (30) days prior to expiration of such Letter of Credit, except for the final issuance of the Letter of Credit, which may expire without automatic renewal on any date that is one-hundred five (105) or more days after the expiration or termination of the Delivery Term . Seller must bear all costs of any Letters of Credit.
“L
icensed Professional Engineer” means a professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the State of California. “L ocal RAR” means the L ocal Resource Adequacy Requirements established for load-serving entities by the CAISO pursuant to the CAISO Tariff to the Resource Adequacy Rulings, or by any other Governmental Authority with jurisdiction over the Parties. Local RAR may also be known as local area reliability, local resource adequacy, local resource adequacy procurement requirements, or local capacity requirement in other regulatory proceedings or legislative actions.
“L
osses” means, with respect to any Non -Defaulting Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner.
Factors used in determining economic loss to a Non-Defaulting Party may include reference to information supplied by one or more third parties, which may include dealers in the relevant markets, information vendors, and other sources of market information, but shall exclude Affiliates of the Non- Defaulting Party, including quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads , or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs ( e.g., SP-15), all of which should be calculated for the remaining Contract Term and must include the value of Capacity Attributes.
“Ma
ximum Pre- COD Damages Amount ” means the amount of the Development Security specified on the Cover Sheet that was required to be posted under this Agreement. 13 “Milestones” means the milestones set forth on the Cover Sheet and Exhibit U. “Monthly Capacity Payment” means the payment required to be made by Buyer to Seller each month of the Delivery Term as compensation for the Product, as calculated in accordance with Exhibit C.
“Monthly Forecast” has the meaning set forth in Section 4.9(a). “Moody’s” means Moody’s Investors Service, Inc., or its successor. “MW” means megawatts in alternating current, unless expressly stated in terms of direct current.
“MW h ” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“NE ECH ” has the meaning set forth in the definition of Affiliate. “NEER” means NextEra Energy Resources, LLC.
“NEOP” has the meaning set forth in the definition of Affiliate. “NEP” has the meaning set forth in the definition of Affiliate. “NEPA” means the National Environmental Policy Act.
“NERC” means the North American Electric Reliability Corporation or any successor entity.
“N etwork Upgrades ” has the meaning set forth in the CAISO Tariff. “New BESS Trade Measure Event” means any of the following events, during the period while the applicable ruling request, inquiry, rulemaking, or other filing or proceeding remains pending or subject to appeal before the DOC or other applicable Governmental Authority:
(a) F
iling of any anti -circumvention ruling request alleging that manufacturers or importers are circumventing any antidumping and/or countervailing duty (“AD/CVD”) orders on BESS Equipment;
(b) Initiation of any anti -circumvention inquiry into whether manufacturers or importers are circumventing any AD/CVD orders on BESS Equipment or issuance in any such inquiry of any finding or ruling that manufacturers or importers are circumventing any AD/CVD orders on BESS Equipment; or
(c) Filing or initiation of any rulemakings, laws, adjudications, or other proceedings to increase, extend, or expand application of, or impose any new, tariffs, including AD/CVD or other trade measures on BESS Equipment.
14 “New Contract Capacity Date” means the beginning of the day following the completion of a Storage Capacity Test except in the circumstance due to a Serial Defect in which case such Storage Capacity Test result shall become the new Contract Capacity at the beginning of the day Buyer provided Notice to Seller requesting such a Storage Capacity Test. “Non-Defaulting Party” has the meaning set forth in Section 11.2. “Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, next Business Day courier service, or electronic messaging (e-mail).
“O ff-Peak Hour ” means any hour that is not an On-Peak Hour. “On-Peak Hour” means any hour from hour-ending 0700 to hour-ending 2200 (i.e., 6:00 AM to 9:59 PM) on Monday through Saturday, Pacific Prevailing Time, excluding North American Electric Reliability Council (NERC) holidays.
“O perating Restrictions ” means those restrictions, rules, requirements, and procedures set forth in Exhibit P.
“Operation Security” means Letter(s) of Credit in the amount set forth on the Cover Sheet. “Outage Schedule” has the meaning set forth in Section 4.10(a)(i). “Partial Capacity Deliverability Status” has the meaning set forth in the CAISO Tariff. “Party” has the meaning set forth in the Preamble.
“Performance Guarantees” has the meaning set forth in Section 4.3(d). “Permitted Transfer” means any of the following:
(a) Any t ransaction or combination of transactions between or among Affiliates of Seller, including any corporate reorganization, merger, combination or similar transaction or transfer of assets or ownership interests involving Seller or its Affiliates; provided that (i) Ultimate Parent retains, directly or indirectly, ownership of fifty percent (50%) or more of the entity that is Seller after the transaction(s), or a wholly-owned, indirect subsidiary of Ultimate Parent operates the Facility after the transaction(s) , and (ii) if such transactions transfer this Agreement to any entity other than the entity that is the Seller before such transactions, the transferee executes and delivers to Buyer a written agreement under which the transferee assumes in writing all of Seller’s duties and obligations under this Agreement and otherwise agrees to be bound by all of the terms and conditions of this Agreement;
(b) Any Change of Control of Ultimate Parent , NEER, NEP, NEOP, or NEECH, or any combination thereof;
(c) Any change of economic and voting rights triggered in Seller’s organization documents arising from the financing of the Facility that does not result in the transfer of 15 ownership, economic or voting rights in any entity that had no such rights immediately prior to the change;
(d) Any direct or indirect transfer of shares of, or equity interests in, Seller to a Lender; or
(e) A transfer of the Facility (or the direct or indirect ownership of equity interests in Seller) in connection with any of the following: (i) all or substantially all of the assets of NEER, NEECH, or Ultimate Parent; (ii) all or substantially all of NEER’s or Ultimate Parent’s renewable energy generation portfolio; or (iii) all or substantially all of NEER’s or Ultimate Parent’s solar generation and/or energy storage portfolio; or (iv) the direct or indirect transfer of shares of, or equity interests in, Seller to a person in which, following the transfer, an Affiliate of NEER continues to hold an economic interest in the Facility; provided, that in the case of each of (i) through (iv) above: (A) the transferee (1) executes and delivers to Buyer a written agreement under which the transferee assumes in writing all of Seller’s duties and obligations under this Agreement and otherwise agrees to be bound by all of the terms and conditions of this Agreement, and (2) meets credit security requirements set forth by this Agreement; and (B) the entity that operates the Facility following such transfer is (or contracts with) a Qualified Operator; “P ermitted Transferee” means ( i) any Affiliate of Seller , or (ii) any entity that satisfies, or is controlled by another Person that satisfies, the following requirements:
(a) Such entity or Person has a tangible net worth of not less than one hundred fifty million dollars ($150,000,000) or a Credit Rating of at least BBB - from S&P, BBB- from Fitch, or Baa3 from Moody’s; and
(b) Such entity or Person is a Qualified Operator or has retained a third-party Qualified Operator.
Notwithstanding the foregoing, with respect to Seller, Permitted Transferee shall include NEP, NEOP, and NEECH, and their respective direct and indirect subsidiaries. “Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint -stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“P
lanned Outage ” means a period during which the Facility is either in whole or in part not capable of providing service due to planned maintenance that has been scheduled in advance in accordance with Section 4.10(a).
“PMAX” means the applicable CAISO-certified maximum operating level of the Facility. “PMIN” means the applicable CAISO-certified minimum operating level of the Facility. “PNode” has the meaning set forth in the CAISO Tariff.
16 “Portfolio” means the single portfolio of electrical energy generating, energy storage, or other assets and entities, including the Facility (or the interests of Seller or Seller’s Affiliates or the interests of their respective direct or indirect parent companies), that entails assets in the United States, that is pledged as collateral security in connection with a Portfolio Financing. “P ortfolio Financing” means any equity (including tax equity) financings or debt transactions entered into by an Affiliate of Seller that is secured only by a Portfolio. “P ortfolio Financing Entity” means any Affiliate of Seller that enters into a tax equity transaction or incurs debt in connection with any Portfolio Financing. “P roduct ” has the meaning set forth on the Cover Sheet. “Progress Report” means a progress report including the items set forth in Exhibit E. “Prudent Operating Practice” means (a) the applicable practices, methods , and acts required by or consistent with applicable Laws and reliability criteria, and otherwise engaged in or approved by a significant portion of the electric industry during the relevant time period with respect to grid-interconnected, utility-scale energy storage facilities in the Western United States, or (b) any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Prudent Operating Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to acceptable practices, methods or acts generally accepted in the industry with respect to grid-interconnected, utility-scale energy storage facilities in the Western United States. Prudent Operating Practice shall include compliance with applicable Laws, applicable safety and reliability criteria, and the applicable criteria, rules and standards promulgated in the National Electric Safety Code and the National Electrical Code, as they may be amended or superseded from time to time, including the criteria, rules and standards of any successor organizations.
“Qu
alified Operator ” means Seller or an operator of energy storage facilities that has sufficient experience and technical capability to perform for Seller’s benefit the obligations of Seller under this Agreement related to the operation and maintenance of the Facility in accordance with the applicable requirements of this Agreement, as evidenced by such operator having operated two (2) or more battery energy storage facilities having a nameplate capacity rating of fifty (50) MW and/or two hundred (200) MWh or more, for not less than three (3) years. “R
A Commencement Date” means the first day of the first calendar month that is at least two (2) months after the Commercial Operation Date. For illustrative purposes, if the Commercial Operation Date is June 30, the RA Commencement Date shall be September 1, as evidenced by CAISO’s acceptance of Buyer’s monthly Resource Adequacy Plan. “R
A Compliance Showing ” means the (a) Local RAR compliance or advisory showings (or similar or successor showings), (b) RAR compliance or advisory showings (or similar or successor showings), and (c) Flexible RAR compliance or advisory showings (or similar successor showings), in each case that, an entity is required to make to the CAISO pursuant to the CAISO 17 Tariff pursuant to the Resource Adequacy Rulings, or to any Governmental Authority having jurisdiction over Buyer or Seller.
“RA Deficiency Amount” means the liquidated damages payment that Seller shall pay to Buyer for an applicable RA Shortfall Month as calculated in accordance with Section 3.5(d). “RA Shortfall” has the meaning set forth in Section 3.5(b). “RA Shortfall Month ” means, for purposes of calculating an RA Deficiency Amount under Section 3.5(d), any Showing Month in which there is an RA Shortfall. “Real-Time Market” has the meaning set forth in the CAISO Tariff. “Receiving Party” has the meaning set forth in Section 18.2(a). “Remedial Action Plan” has the meaning set forth in Section 2.4. “Replacement RA” means Resource Adequacy Benefits, if any, equivalent to those that would have been provided by the Facility with respect to the applicable month in which a RA Deficiency Amount otherwise would be owed to Buyer under this Agreement. “R
equested Confidential Information” has the meaning set forth in Section 18.2(c). “Resource Adequacy Benefits ” means the rights and privileges attached to the Facility that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in any Resource Adequacy Rulings, including any Flexible Capacity , and any local, zonal or otherwise locational attributes, that are associated with and available from the Facility. “R esource Adequacy Capacity ” has the meaning set forth in the CAISO Tariff. “Resource Adequacy Plan” has the meaning set forth in the CAISO Tariff. “Resource Adequacy Requirements ” or “RAR” means the resource adequacy requirements applicable to an entity as established by the CAISO pursuant to the CAISO Tariff or by any other Governmental Authority having jurisdiction over Buyer or Seller. “R esource Adequacy Resource” has the meaning set forth in the Resource Adequacy Rulings.
“R esource Adequacy Rulings ” means any other existing or subsequent ruling or decision, or any other resource adequacy laws, rules or regulations enacted, adopted or promulgated by any applicable Governmental Authority having jurisdiction over Buyer or Seller, however described, as such decisions, rulings, Laws, rules or regulations may be amended or modified from time -to- time throughout the Contract Term.
“S
&P ” means the Standard & Poor’s Financial Services, LLC (a subsidiary of S&P Global Inc.) or its successor.
“S CADA Systems ” means the standard supervisory control and data acquisition (SCADA) 18 systems to be installed by Seller as part of the Facility, including those system components that enable Seller to receive ADS and AGC instructions from the CAISO or similar instructions from Buyer’s SC.
“Schedule” has the meaning set forth in the CAISO Tariff, and “ Scheduled” and “Scheduling” have a corollary meaning.
“Scheduled Energy” means the Charging Energy or Facility Energy that clears under the applicable CAISO market based on the final Day -Ahead Schedule (s), FMM Schedule (s) (as defined in the CAISO Tariff), and/or any other financially binding Schedule(s), market instruction or dispatch for the Facility for a given period of time implemented in accordance with the CAISO Tariff.
“Sc
heduling Coordinator ” or “SC” means an entity certified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff for the purposes of undertaking the functions specified in “Responsibilities of a Scheduling Coordinator,” of the CAISO Tariff, as amended from time to time.
“S
easonal Availability” has the meaning set forth in Exhibit O. “Seasonal Availability Guarantee” has the meaning set forth in Section 4.3(a). “Seasonal Period” means the Summer Season or the Winter Season. “Security Interest” has the meaning set forth in Section 8.8. “Seller” has the meaning set forth on the Cover Sheet.
“Seller Initiated Test” has the meaning set forth in Section 4.4(c). “Serial Defect” means a defect with respect to at least fifty percent (50%) of the Facility’s battery capacity, or at least fifty percent (50%) of the Facility’s inverter capacity or sub-inverter capacity, in which case the time to cure shall not exceed three hundred sixty-five (365) days. “Se
ttlement Amount ” means the Non -Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non- Defaulting Party. If the Non-Defaulting Party’s Gains exceed the sum of its Costs and Losses, then the Settlement Amount shall be zero dollars ($0). The Settlement Amount does not include consequential, incidental, punitive, exemplary or indirect or business interruption damages. “S ettlement Interval ” has the meaning set forth in the CAISO Tariff. “Settlement Period” has the meaning set forth in the CAISO Tariff. “Shared Facilities” means the gen-tie lines, transformers, substations, or other equipment, permits, contract rights, and other assets and property (real or personal), in each case, as necessary to enable delivery of Energy from the Facility (which is excluded from Shared Facilities) to the 19 point of interconnection, including the Interconnection Agreement itself, that are used in common with Affiliates and/or third parties or by Seller for electric generation or storage facilities owned by Seller other than the Facility.
“Showing Month” shall be the calendar month of the Delivery Term that is the subject of the RA Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the CAISO Tariff. For illustrative purposes only, pursuant to the CAISO Tariff and Resource Adequacy Rulings in effect as of the Effective Date, the monthly RA Compliance Showing made in June is for the Showing Month of August.
“S
ite ” means the real property on which the Facility is or will be located, as further described in Exhibit A, and as shall be updated by Seller at the time Seller provides an executed Construction Start Date certificate in the form of Exhibit J to Buyer. “Site Control” means that, for the Delivery Term, Seller or its Affiliate: (a) owns or has the option to purchase the Site; (b) is the lessee or has the option to lease the Site; or (c) is the holder of an easement or an option for an easement, right-of-way grant, or similar instrument with respect to the Site.
“S OC ” or “State of Charge” means (a) the level of charge of the Facility relative to (b) the Contract Capacity multiplied by four (4) hours, expressed as a percentage. “S QMD Plan ” has the meaning set forth in the CAISO Tariff. “SP-15” means the Existing Zone Generation Trading Hub for Existing Zone region SP15 as set forth in the CAISO Tariff.
“S tation Use ” means the Energy that is used within the Facility to power certain lights, motors, temperature control systems, control systems and other ancillary electrical loads that are necessary for operation of the Facility (or as otherwise defined by the retail energy provider and CAISO Tariff) except during periods in which the Facility is charging or discharging pursuant to a Seller Initiated Test, a Buyer Dispatched Test, a Charging Notice, or a Discharging Notice. “S
torage Capability” means the capability of the Facility to charge and discharge Energy, expressed in whole MWhs, that is expected for each hour of the applicable period. “S torage Capacity Test ” or “SCT” means any test or retest of the Facility to establish the Installed Capacity, Contract Capacity, initial Efficiency Rate or any other test conducted pursuant to Exhibit N.
“Stored Energy Level” means, at a particular time, the amount of Energy in the Facility available to be discharged as Facility Energy, expressed in MWh. “S ummer Season ” means the months of May through September, inclusive. “Supply Plan” has the meaning set forth in the CAISO Tariff. 20 “System Emergency” means any condition that requires, as determined and declared by CAISO or the Transmission Provider, automatic or immediate action to ( i) prevent or limit harm to or loss of life or property, (ii) prevent loss of transmission facilities or generation supply in the immediate vicinity of the Facility, or (iii) to preserve Transmission System reliability. “T-8 ” means that date which is eight ( 8) days prior to the start of the applicable Showing Month.
“T arget Commercial Operation Date” has the meaning set forth on the Cover Sheet. “Tax” or “Taxes ” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “T
ax Credits ” means the ITC and any state, local and/or federal production tax credit (PTC), depreciation benefit, tax deduction, investment tax credit and/or other tax benefit s associated with the production of clean or renewable energy, investments in clean or renewable energy facilities or battery storage facilities , and/or the construction, operation or the ownership of, the Facility or any part thereof (including any cash payment or grant). “Termination Payment” has the meaning set forth in Section 11.3(b). “Trade FME Claims” has the meaning set forth in Section 10.1(b). “Trade Restraint” has the meaning set forth in Section 10.1(b). “Transmission Provider” means any entity that owns, operates or maintains transmission or distribution lines and associated facilities and/or has entitlements to use certain transmission or distribution lines and associated facilities for the purpose of transmitting or transporting the Facility Energy from the Delivery Point or Charging Energy to the Delivery Point. “T
ransmission System ” means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service downstream from the Delivery Point.
“T
ransmission System Outage ” means an outage on the Transmission System, other than a System Emergency, that is not caused by Seller’s actions or inactions and that prevents Buyer or the CAISO (as applicable) from receiving Facility Energy onto the Transmission System or the Facility from receiving Charging Energy.
“U
ltimate Parent ” means NextEra Energy, Inc., NEER, NEP, NEOP, or NEECH, and any combination thereof.
21 “Unplanned Outage” means a period during which the Facility is unavailable to provide some or all of the Product due to the need to maintain or repair a component of the Facility, which period is not a Planned Outage.
“W ECC” means the Western Electricity Coordinating Council. “Winter Season” means the months of October through April, inclusive.
1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders;
(c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Article, Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless otherwise specified;
(e) a reference to a document or agreement or this Agreement shall mean such document, agreement or this Agreement including any valid amendment or supplement to, or replacement, novation or modification of such document or agreement or this Agreement; (f) a reference to a Person includes that Person’s successors and permitted assigns; (g) the terms “include” and “including” mean “include or including (as applicable) without limitation” and any list of examples following such term shall in no way restrict or limit the generality of the word or provision in respect of which such examples are provided; (h) except as applicable to a Change in Law, references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires;
(i) in the event of a conflict, a mathematical formula or other precise description of a concept or a term shall prevail over words providing a more general description of a concept or a term;
(j) references to any amount of money shall mean a reference to the amount in United States Dollars;
(k) the expression “and/or” when used as a conjunction shall connote “any or all of”; 22 (l) words, phrases or expressions not otherwise defined herein that (i) have a generally accepted meaning in Prudent Operating Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Operating Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings; and
(m) each Party acknowledges that it was represented by counsel in connection with this Agreement and that it or its counsel reviewed this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
ARTICLE 2
TERM; CONDITIONS PRECEDENT; EARLY TERMINATION
2.1 Contract Term.
(a) The term of this Agreement shall commence on the Effective Date and remain in full force and effect until the conclusion of the Delivery Term, subject to any early termination provisions set forth herein (“Contract Term”).
(b) Applicable provisions of this Agreement shall continue in effect after termination, including any early termination under Section 2. 6, Section 10.4, or Section 11.2, to the extent necessary to enforce or complete the duties, obligations or responsibilities of the Parties arising prior to termination. The confidentiality and indemnity obligations of the Parties under this Agreement shall remain in full force and effect for one (1) year following the termination of this Agreement.
2.2 C
onditions Precedent . The Delivery Term shall commence upon Seller’s completion of all of the following conditions:
(a) S eller shall have delivered to Buyer (i) a completion certificate from a Licensed Professional Engineer substantially in the form of Exhibit H, and (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I certifying the Installed Capacity on the Commercial Operation Date;
(b) A Participating Generator Agreement and a Meter Service Agreement between Seller and CAISO shall have been executed and shall be in full force and effect, and a copy of each shall have been delivered to Buyer;
(c) An Interconnection Agreement between Seller (or Seller’s Affiliate) and the Transmission Provider shall have been executed and shall be in full force and effect and a copy of the Interconnection Agreement shall have been delivered to Buyer; (d) All applicable regulatory authorizations, approvals (including NEPA or CEQA approval, if applicable) and permits required to commence operation of the Facility shall have been obtained and shall be in full force and effect;
23 (e) Seller shall have obtained CAISO Certification for the Facility, except for Ancillary Services which shall not be required as a condition for achieving the Commercial Operation Date or the start of the Delivery Term; and
(f) Seller shall have delivered the Operation Security to Buyer in accordance with Section 8.7(b).
2.3 Development; Construction; Progress Reports. Within fifteen (15) days after the close of (i) each calendar quarter from the first calendar quarter following the Effective Date until the Construction Start Date, and (ii) each calendar month from the first calendar month following the Construction Start Date until the Commercial Operation Date, Seller shall provide to Buyer a Progress Report and agree to regularly scheduled meetings (i.e., quarterly or monthly, as applicable) between representatives of Buyer and Seller to review such reports and discuss Seller’s construction progress. The form of the Progress Report is set forth in Exhibit E. Seller also shall provide Buyer with any reasonably requested documentation (subject to confidentiality restrictions and provided that documents containing confidential information may be subject to redaction) directly related to the achievement of Milestones within ten (10) Business Days after Seller’s receipt of any such request from Buyer. Seller is solely responsible for the design and construction of the Facility, including the location of the Site, the Facility layout, and the selection and procurement of the equipment comprising the Facility.
2.4 R
emedial Action Plan . If Seller misses a Milestone by more than ten (10) Business Days, except as the result of Event of Default of Buyer, Seller shall submit to Buyer, within thirty (30) days following the end of such ten (10) Business Days period, a remedial action plan (“Remedial Action Plan”), that identifies (i) the anticipated period of delay (i.e., the estimated date when the missed milestone will be achieved); (ii) the basis for such delay; (iii) a remedial action plan outlining the commercially reasonable steps that Seller is taking to address the delay and to ensure that future milestones, including the Commercial Operation Date, will be achieved by the required date (to the extent possible ); and (iv) other commercially reasonable information relevant to the circumstances, if any, requested by Buyer (subject to confidentiality restrictions and provided that documents containing confidential information may be subject to redaction) . Delivery of a Remedial Action Plan shall not relieve Seller of its obligation to provide Remedial Action Plans with respect to any subsequent Milestones (when required under this Section 2.4) or updates to a Remedial Action Plan to the extent information provided become s inaccurate, and to achieve the Guaranteed Commercial Operation Date in accordance with the terms of this Agreement. Subject to the provisions of Exhibit B, so long as Seller complies with its obligations under this Section
2.4 and is using commercially reasonable efforts to comply with any Remedial Action Plan (as may be updated by Seller from time to time) , Seller shall not be considered in default of its obligations under this Agreement solely as a result of missing a Milestone; provided further, for clarification purposes, the only two Milestones with respect to which an Event of Default may occur are with respect to the Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date pursuant to Sections 11.1(b)(i) & (ii).
2.5 Pre-Commercial Operation Actions . Prior to C onstruction Start, Seller shall provide evidence of Site C ontrol to Buyer (including reasonably requested documentation requested by Buyer), provided, however, that documents containing confidential information may be subject to redaction. The Parties agree that, in order for Buyer to dispatch the Facility for its Commercial 24 Operation Date, the Parties will have to perform certain of their Delivery Term obligations in advance of the Commercial Operation Date, including Seller’s delivery of an Availability Notice for the Commercial Operation Date, and Buyer’s delivery of a Dispatch Notice and nominating and scheduling the Facility for the Commercial Operation Date, in advance of the Commercial Operation Date. The Parties shall cooperate with each other in order for Buyer to be able to dispatch the Facility for the Commercial Op eration Date. Seller will take all actions, at its sole cost and expense, but with the cooperation of Buyer to the extent necessary, to comply with the CAISO’s New Resource Implementation Process.
2.6 Seller Pre- COD Termination Right . Seller may terminate the Agreement prior to Construction Start in exchange for payment to Buyer in the amount of the Damage Payment if: (i) Seller determines in a commercially reasonable manner that it will not be feasible to cause the Commercial Operation Date to occur on or prior to the Guaranteed Commercial Operation Date, subject to Buyer’s consent not to be unreasonable withheld, conditioned or delayed, or (ii) Seller fails to timely achieve the Commercial Operation Date on or before one-hundred eighty (180) days after the Guaranteed Commercial Operation Date (as may be extended by a Developer Cure Period). If Seller exercises any such termination right, then Seller shall pay the Damage Payment (which shall be the amount calculated under Section 11.3(a)(i) that would apply as if Seller were a Defaulting Party to an Event of Default occurring before the Commercial Operation Date) to Buyer not later than ten (10) Business Days after the date of Seller’s Notice of termination, subject to the cap set forth in Section 11.3(a)(iii). If Seller does not pay the Damage Payment when due, then Buyer may draw on the Development Security in the amount of the Damage Payment. Upon Seller’s payment of the Damage Payment (or Buyer’s collection of the Damage Payment through a draw on the Development Security), Buyer shall return any undrawn portion of the Development Security to Seller, less any amounts previously drawn in accordance with this Agreement, this Agreement shall terminate , and neither Party shall have any further liability or obligation under this Agreement , except under the provisions of this Agreement that survive termination as specified in Section 2.1(b).
ARTICLE 3
PURCHASE AND SALE
3.1 Purchase and Sale of P roduct. Subject to the terms and conditions of this Agreement, during the Delivery Term, Buyer will purchase all of the Product produced by or associated with the Facility at the Contract Price and in accordance with Exhibit C, and Seller shall supply and deliver to Buyer all of the Product produced by or associated with the Facility. At its sole discretion, Buyer may during the Delivery Term resell or use for another purpose all or a portion of the Product, provided that no such resale or use shall relieve Buyer of any obligations hereunder or modify any of Seller’s obligations hereunder. During the Delivery Term, Buyer will have exclusive rights to offer, bid, or otherwise submit the Product, or any component thereof, from the Facility after the Delivery Point for resale into the market or to any third party, and retain and receive any and all related revenues.
3.2 F
acility Energy and Ancillary Services . Following the Commercial Operation Date, except for Facility Energy resulting from a Seller Initiated Test, Buyer shall have the exclusive rights to all Facility Energy, subject to the Operating Restrictions. Title to and risk of loss related to the Facility Energy shall pass and transfer from Seller to Buyer at the Delivery Point. Buyer 25 and Seller recognize that in any given Settlement Period there may be Imbalance Energy and following the Commercial Operation Date, any payments related to such Imbalance Energy shall be made by Buyer and shall be for Buyer’s account. Buyer shall have the exclusive rights to all Ancillary Services and Energy associated with Ancillary Services, with characteristics and quantities determined in accordance with the CAISO Tariff. Notwithstanding the foregoing, prior to the Commercial Operation Date, Seller has the right to sell all capacity, Facility Energy, and Ancillary Services from the Facility into the CAISO’s markets and to retain all resulting revenues, and any payments related to Imbalance Energy shall be for Seller’s own account , as further described in Section 4.8(g).
3.3 Ownership of Incentives . Seller shall have all right, title and interest in and to all Incentives. Buyer acknowledges that any Incentives belong to Seller. If any Incentives, or values representing the same, are initially credited or paid to Buyer, Buyer shall cause such Incentives or values relating to same to be assigned or transferred to Seller without delay. Buyer shall reasonably cooperate with Seller, at Seller’s expense, in Seller’s efforts to meet the requirements for any certification, registration, or reporting program relating to Incentives.
3.4 C
apacity Attributes . Seller shall request Full Capacity Deliverability Status for the Facility in the CAISO generator interconnection process . As between Buyer and Seller, Seller shall be responsible for the cost and installation of any Network Upgrades associated with obtaining such Full Capacity Deliverability Status, Partial Capacity Deliverability Status, or Interim Deliverability Status.
(b) T
hroughout the Delivery Term and subject to Section 3.7, Seller grants, pledges, assigns, and otherwise commits to Buyer all the Capacity Attributes from the Facility associated with the Installed Capacity.
(c) Throughout the Delivery Term and subject to Section 3.7, Seller shall use commercially reasonable efforts to maintain eligibility for Full Capacity Deliverability Status for the Facility from the CAISO and shall perform all actions necessary to ensure that the Facility qualifies to provide Resource Adequacy Benefits to Buyer; provided, however, if Seller is unable to maintain Full Capacity Deliverability Status, it will use commercially reasonable efforts to maintain Interim Deliverability Status or Partial Capacity Deliverability Status, as applicable .
Throughout the Delivery Term, and subject to Section 3.7, Seller hereby covenants and agrees to transfer all Resource Adequacy Benefits available from the Facility to Buyer, including during the duration of Interim Deliverability Status or Partial Capacity Deliverability Status. (d) F
or the duration of the Delivery Term, and subject to Section 3.7, Seller shall take all commercially reasonable administrative actions, including complying with all applicable registration and reporting requirements, and execut ing all documents or instruments necessary to enable Buyer to use all of the Capacity Attributes committed by Seller to Buyer pursuant to this Agreement.
3.5 R
esource Adequacy Failure.
(a) RA Deficiency Determination. For each RA Shortfall Month, Seller shall first use commercially reasonable efforts to provide Replacement RA in accordance with Section 3.5( c) 26 below, and then pay to Buyer the RA Deficiency Amount if a shortfall remains following Seller’s attempt to replace the RA . Seller’s provision of R eplacement RA and/or payment of the RA Deficiency Amount is Buyer’s sole remedy for (i) any RA Shortfall, and (ii) any failure by Seller to deliver Capacity Attributes and the Expected RA Capacity hereunder. (b) RA Shortfall . The RA shortfall quantity, for any Showing Month during the Delivery Term that commences with or occurs after the RA Commencement Date (the “RA Shortfall”), shall be equal to: the Expected RA Capacity, minus each of the following:
(i) the quantity of Resource Adequacy Benefits delivered by Seller for the applicable Showing Month, equivalent to the amount of Resource Adequacy Capacity from the Facility that was eligible to be shown on Buyer’s Supply Plan up to and including T-8, (ii) the quantity of Resource Adequacy Benefits that Seller was unable to provide as a result of an Excused Hour excluding Planned Outages, and (iii) the quantity of any Resource Adequacy Benefits that Seller was unable to provide directly affecting the relevant RA Shortfall Month due to any Change in Law consistent with Section 3.7(b)(iii),
provided there shall be no RA Shortfall where such difference is zero (0) or less than zero (0). Seller shall use commercially reasonable efforts to Notify Buyer of any RA Shortfall at least forty-five (45) days prior to the RA Shortfall Month.
(c) Replacement RA. Seller shall use commercially reasonable efforts to provide Replacement RA to Buyer in amounts up to the amount of any RA Shortfall attributable to Planned Outages; provided, that Seller shall not be obligated to pay a higher amount for any Replacement RA than the RA Deficiency Amount for any such RA Shortfall; and provided further, that Seller shall provide a Notice to Buyer identifying any Replacement RA and specifying the applicable resource information at least thirty -five (35) days before the deadline (as established by the CAISO) for Buyer’s submission of its Resource Adequacy Plan for the applicable Showing Month. (d) R A Deficiency Amount Calculation . For each RA Shortfall Month, to the extent there still exists an RA Shortfall after taking into consideration any Replacement RA provided to Buyer, Seller shall pay to Buyer an amount (the “ RA Deficiency Amount”) equal to the product of:
(i) any remaining RA Shortfall that exists after the provision of Replacement RA, multiplied by
(ii) the lower of (A) thirteen dollars fifty cents per kW/month ($13.50 per kW/month), and (B) the sum of the CPUC System RA Penalty and the CPM Soft Offer Cap as listed in Section 43A.4.1.1 of the CAISO Tariff.
3.6 CAISO Ancillary Services Certification; Additional Ancillary Services . Seller shall take all necessary steps within its reasonable control to enable CAISO Ancillary Services Certification to occur within sixty (60) days after the Commercial Operation Date. If the CAISO Ancillary Services Certification has not occurred within sixty (60) days after the Commercial 27 Operation Date, Seller shall owe liquidated damages to Buyer of $20,000 per day of delay, provided that such sixty (60) day deadline shall be extended on a day- for-day if such delay in obtaining Ancillary Services Certification is due to a Force Majeure Event or CAISO -caused delays. Each Party agrees and acknowledges that (a) the actual damages that Buyer would incur due to a delay in CAISO Ancillary Services Certification would be difficult or impossible to predict with certainty, (b) the liquidated damag es set forth in this section are a reasonable and appropriate approximation of such damages, and (c) the liquidated damages set forth in this section are the exclusive remedy for Seller’s delay in the CAISO Ancillary Services Certification on or before the deadline therefor.
If, after the Effective Date, new or incremental opportunities arise for the sale or transfer of additional ancillary services from the Facility that are not known to or contemplated by the Parties as of the Effective Date and which are not related to a Change in Law (collectively, “Additional Ancillary Services ”), then either Party may provide notice to the other Party regarding the availability of any such Additional Ancillary Services from the Facility. Upon Seller’s receipt of Notice from Buyer of Buyer’s intent to claim any such Additional Ancillary Services, the Parties shall determine the necessary actions and additional costs, if any, associated with such Additional Ancillary Services. Buyer and Seller will discuss in good faith potential reconfiguration of the Facility or interconnection facilities as well as the operation of the Facility; provided that neither Party shall be obligated to agree to any changes under the ESA, or to incur any expense in connection with such changes, except under terms mutually acceptable to both Parties (and Seller’s investors/lenders, to the extent applicable) as set forth in a written agreement.
3.7 C
hange in Law and Compliance Expenditure Cap.
(a) Change in Law. If a Change in Law occurs after the Effective Date with respect to obtaining, maintaining, conveying, or effectuating Buyer’s use of any Product, including any such Change in Law that impacts the Facility’s or the Product’s eligibility to qualify for or maintain Resource Adequacy Benefits, then Seller shall use commercially reasonable efforts to comply with such Change in Law as necessary to maintain such eligibility described above, subject to this Section 3.7(a) and the following Section 3.7(b) . Following a Change in Law, and Seller’s recognition of the impact upon the Facility or Seller’s obligations under this Agreement, Seller as soon as practicable will provide Buyer with Notice of the Change in Law, including the anticipated effect on the Facility and the obligations of the Parties under this Agreement, Seller’s proposed commercially reasonable efforts to comply with its obligations under this Agreement in light of the Change in Law, Seller’s estimate of anticipated Compliance Costs, and to what extent, if any, the estimate of anticipated Compliance Costs would exceed the Compliance Expenditure Cap (as defined below), each to the extent then -anticipated by Seller, and subject to further modification by Seller. Buyer will have sixty (60) days to evaluate such Notice (during which time period Seller is not obligated to take any Compliance Actions (as defined below) described in the Notice) and shall, within such time, either (i) agree to reimburse Seller for all or some portion of the Compliance Costs that exceed the Compliance Expenditure Cap (such Buyer -agreed upon Compliance Costs, the “Accepted Compliance Costs”), or (ii) waive Seller’s obligation to take such Compliance Actions, or any part thereof for which Buyer has not agreed to reimburse Seller; provided that Seller agrees to reasonably cooperate with Buyer to discuss alternative Compliance Actions that may mutually benefit the Parties . If Buyer does not respond to a Notice given by Seller under this Section 3.7( a) within sixty (60) days after Buyer’s receipt of same, Buyer shall 28 be deemed to have waived its rights to require Seller to take the Compliance Actions that are the subject of the Notice, and Seller shall have no further obligation to take, and no liability for any failure to take, such Compliance Actions until such time as Buyer agrees to pay the applicable Compliance Costs.
(b) Compliance Expenditure Cap. Notwithstanding anything to the contrary in this Agreement, the Parties agree that the maximum aggregate amount of Compliance Costs that Seller shall be required to incur during the Contract Term to comply with any such Change in Law shall be capped at forty thousand dollars ($40,000) per MW of Guaranteed Capacity with respect to any Change in Law (“Compliance Expenditure Cap”). Any Compliance Cost actions required for Seller to comply with its obligations set forth in Section 3.7(a), the cost of which will be included in the Compliance Expenditure Cap, shall be referred to collectively as the “Compliance Actions.” If Buyer agrees to pay Seller for the Accepted Compliance Costs, then Seller shall take such Compliance Actions covered by the Accepted Compliance Costs as agreed upon by the Parties and Buyer shall pay Seller for Seller’s actual costs to effect the Compliance Actions, not to exceed the Accepted Compliance Costs, within sixty (60) days from the time that Buyer receives an invoice and documentation of such costs from Seller.
If Buyer does not agree to pay the Compliance Costs in excess of the Compliance Expenditure Cap, or if it is not possible for Seller to achieve compliance with a C hange in L aw through the payment or incurrence of Compliance Costs, then in each case: (i) Seller shall be excused from the corresponding Compliance Actions under this Agreement, (ii) Buyer shall continue to pay Seller under this Agreement without any reduction in revenues that otherwise would result from the Change in Law, and (iii) Seller shall be excused from any obligations, including any RA Shortfall- related obligations, to the extent resulting from the Change in Law; provided, for clarification purposes, (1) Seller shall not be excused from any such obligations that Seller can still perform despite such Change in Law (e.g., if CAISO were to modify the Resource Adequacy Requirements such that a 300 MW installed capacity 4-hour duration storage facility were to qualify for only 200 MW of Resource Adequacy Benefits , Seller would still be obligated to provide to Buyer the Contract Capacity, but would not be assessed 100 MW of RA Shortfall), and (2) Seller shall not be excused from any such obligations to the extent this Agreement is “grandfathered in” with respect to such Change in Law, or the Governmental Authority otherwise reverses its decision with respect to the Facility, such that the Change in Law does not apply to this Agreement or the Facility, as applicable.
ARTICLE 4
OBLIGATIONS AND DELIVERIES
4.1 Delivery. Subject to the provisions of this Agreement, commencing on the Commercial Operation Date through the end of the Contract Term, Seller shall supply and deliver the Product to Buyer at the Delivery Point, and Buyer shall take delivery of the Product at the Delivery Point in accordance with the terms of this Agreement. Seller shall be responsible for paying or satisfying when due any costs or charges imposed in connection with the delivery of Facility Energy to the Delivery Point, including any operation and maintenance charges imposed by the Transmission Provider directly relating to the Facility’s operations. Buyer shall be responsible for all costs, charges and penalties (except as may otherwise be set forth in this Agreement) imposed in 29 connection with: (a) the delivery of Charging Energy to the Delivery Point (including the cost of the Charging Energy itself) ; and (b) the acceptance and transmission of Facility Energy at and from the Delivery Point, each including without limitation, transmission costs and transmission line losses and imbalance charges. Charging Energy and Facility Energy will be scheduled with the CAISO by Buyer (or Buyer’s designated Scheduling Coordinator) in accordance with Exhibit D.
4.2 Station Use . Notwithstanding anything to the contrary in this Agreement, the Parties acknowledge (i) Seller is responsible for providing all Energy to serve Station Use (including paying the cost of any Energy used to serve Station Use during periods in which the Facility is not charging or discharging pursuant to a Charging Notice or Discharging Notice), (ii) Energy supplied from Charging Energy or Discharging Energy during periods in which the Facility is charging or discharging pursuant to a Charging Notice or Discharging Notice shall not be considered Station Use, (iii) Station Use may be supplied over the same circuit as Charging Energy and Discharging Energy, and (iv) Seller shall indemnify and hold harmless Buyer from any and all costs, penalties or charges for Energy supplied for Station Use by any means other than retail service from the applicable utility, and shall take any additional measures to ensure Station Use (other than that supplied from Charging Energy or Discharging Energy as provided in clause (ii) or over the same circuit as Charging Energy and Discharging Energy as provided in clause (iii)) is supplied by the applicable utility’s retail service if necessary to avoid any such costs, penalties or charges.
4.3 P
erformance Guarantees .
(a) During the Delivery Term, the Facility shall maintain a Seasonal Availability (calculated in accordance with Exhibit O ) of no less than the applicable “ Seasonal Availability Guarantee” which is the value set forth in the table below for the applicable Contract Year and Seasonal Period.
Seasonal Availability
Guarantee for the
Summer Season
(May-September)
Seasonal Availability
Guarantee for the
Winter Season
(October-April)
Contract Year 1 92% 91%
Contract Year 2 94% 93%
Contract Year 3-20 95% 94%
(b) If the Seasonal Availability during any Seasonal Period is less than the applicable Seasonal Availability Guarantee, then Seller shall owe Buyer a liquidated damages payment calculated by reference to the applicable Availability Adjustment as set forth in Exhibit C. (c) During the Delivery Term, if the Facility does not maintain an Efficiency Rate at least equal to the applicable Guaranteed Efficiency Rate, then Seller shall owe Buyer a liquidated 30 damages payment calculated in accordance with Exhibit C that shall be applied to the monthly payment due from Buyer as set forth in Exhibit C.
(d) The Seasonal Availability Guarantee and the Guaranteed Efficiency Rate collectively are the “Performance Guarantees ”. Notwithstanding anything to the contrary herein, (i) the sole and exclusive remedy for Seller’s failure to meet the applicable Seasonal Availability Guarantee shall be the calculation and application of an Availability Adjustment as set forth in Exhibit O and Exhibit C, and (ii) the sole and exclusive remedy for Seller’s failure to meet the applicable Guaranteed Efficiency Rate shall be the payment of liquidated damages as specified in Exhibit C.
4.4 Facility Testing.
(a) Storage Capacity Test s. Prior to the Commercial Operation Date, Seller shall schedule and complete a Commercial Operation Storage Capacity Test in accordance with Exhibit N. Thereafter, Seller shall have the right to run additional Storage Capacity Test s in accordance with Exhibit N.
(i) Buyer shall have the right , at its expense, to send one or more representatives to witness all Storage Capacity Tests.
(ii) Following each Storage Capacity Test, Seller shall submit a testing report in accordance with Exhibit N. If the actual capacity determined pursuant to a Storage Capacity Test varies from the then-current Contract Capacity, as applicable, then the actual capacity determined pursuant to such Storage Capacity Test shall become the new Contract Capacity on the New Contract Capacity Date.
(b) A dditional Testing. Seller shall, at times and for durations reasonably agreed to by Buyer, conduct necessary testing to ensure the Facility is functioning properly and the Facility is able to respond to Dispatch Notices.
(c) B
uyer or Seller Initiated Tests . R equired annual tests pursuant to Section B of Exhibit N following the Commercial Operation Date shall be deemed Buyer-instructed dispatches of the Facility (“ Buyer Dispatched Test ”). The Commercial Operation Storage Capacity Test and any test of the Facility that is not a Buyer Dispatched Test (including any test requested by Seller to discharge any energy stranded behind any inverters, any test required by CAISO (including any test required to obtain or maintain CAISO Certification), and other Seller-requested discretionary tests or dispatches, at times and for durations reasonably agreed to by Buyer, that Seller deems necessary for purposes of reliably operating or maintaining the Facility or for re - performing a required test within a reasonable number of days of the initial required test) shall be deemed a “Seller Initiated Test”.
(i) For any Seller Initiated Test other than a Storage Capacity Test required by Exhibit N for which there is a stated notice requirement, Seller shall notify Buyer no later than twenty-four (24) hours prior thereto or, if such Notice would occur on a weekend or holiday, no later than twenty-four (24) hours prior to the weekend or holiday (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practices) ; provided, however, when these requests occur during O ff-Peak Hours, notice by Seller to 31 Buyer is reduced to seventy- five (75) minutes and Buyer’s cooperation for Seller to perform such tests shall not be unreasonably withheld and, provided further that such Notice must be in accordance with the pre-scheduling calendar of WECC. (ii) No Dispatch Notices shall be issued during any Seller Initiated Test or Buyer Dispatched Test except as reasonably requested by Seller or Buyer to implement the applicable test. Periods during which Buyer Dispatched Tests render the Storage Facility (or any portion thereof, as applicable) unavailable shall be excluded for purposes of calculating the Seasonal Availability. The Facility will be deemed unavailable during any Seller Initiated Test, and Buyer shall not dispatch or otherwise schedule the Facility during such Seller Initiated Test.
4.5 Testing Costs and Revenues.
(a) Buyer shall be responsible for all Charging Energy and other costs, and shall be entitled to all CAISO revenues associated with a Buyer Dispatched Test . For all Seller Initiated Tests, (i) Seller shall reimburse Buyer the amount of Buyer’s payment of the Charging Energy for such Seller Initiated Test, and ( ii) Seller shall be entitled to all CAISO revenues associated with the discharge of such Energy and pay any related CAISO costs (including penalties, Imbalance Energy costs or revenues, and other charges) . Buyer shall pay to Seller, in the month following Buyer’s receipt of such CAISO revenues and charges, and otherwise in accordance with Exhibit C, all applicable CAISO revenues received by Buyer and associated with the discharge Energy associated with such Seller Initiated Test.
(b) Buyer shall be responsible for all costs, expenses and fees payable or reimbursable to its representatives witnessing any Facility test.
(c) Except as set forth in Sections 4.5(a) and (b), all other costs of any testing of the Facility shall be borne by Seller.
4.6 F acility Operations .
(a) Seller shall operate the Facility in accordance with Prudent Operating Practices.
Seller shall develop written operating procedures for the Facility before the start of the Delivery Term setting forth the protocol under which the Parties shall perform their respective obligations under this Agreement.
(b) During the Delivery Term, Seller shall maintain SCADA Systems, communications links, and other equipment necessary to receive automated Dispatch Notices consistent with CAISO protocols and practice (“ Automated Dispatches”). In the event of the failure or inability of the Facility to receive Automated Dispatches, Seller shall use all commercially reasonable efforts to repair or replace the applicable components as soon as reasonably possible. During any period during which the Facility is not capable of receiving or implementing Automated Dispatches, Seller shall implement back -up procedures consistent with the CAISO Tariff and CAISO protocols to enable Seller to receive and implement non-automated Dispatch Notices (“Alternative Dispatches”).
(c) Seller shall maintain accurate records with respect to all Storage Capacity Tests. 32 (d) Seller shall comply with all reporting requirements required under any Prudent Operating Practices.
4.7 Dispatch Notices. Buyer will have the right to dispatch the Facility seven (7) days per week and twenty -four (24) hours per day (including holidays), by providing Dispatch Notices , subject to the provisions, requirements and limitations set forth in this Agreement, including the Operating Restrictions. Subject to the Operating Restrictions, each Dispatch Notice will be effective unless and until such Dispatch Notice is modified by the CAISO, Buyer or Buyer’s SC .
If an electronic submittal is not possible for reasons beyond Buyer’s control, Dispatch Notices may be provided (in order of preference) telephonically or by electronic mail to Seller’s personnel designated to receive such communications, as provided by Seller in writing. In addition to any other requirements set forth or referred to in this Agreement, all Dispatch Notices will be made in accordance with Market Notice Timelines specified in the CAISO Tariff.
4.8 E
nergy Management .
(a) Charging Generally. Upon receipt of a valid Charging Notice, Seller shall take any and all action necessary to deliver the Charging Energy to the Facility in order to deliver the Product in accordance with the terms of this Agreement, including maintenance, repair or replacement of equipment in Seller’s possession or control used to deliver the Charging Energy from the Delivery Point to the Facility. Except as otherwise expressly set forth in this Agreement, following the Commercial Operation Date, Buyer shall be responsible for paying all costs including CAISO costs and charges associated with Charging Energy. (b) C
harging Notices . Buyer will have the right to charge the Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by causing Charging Notices to be issued, subject to the provisions, requirements and limitations set forth in this Agreement and the Operating Restrictions. Each Charging Notice issued in accordance with this Agreement will be effective unless and until Buyer’s SC or CAISO modifies such Charging Notice by providing Seller with an updated Charging Notice.
(c) N
o Unauthorized Charging. Seller shall not charge the Facility during the Delivery Term other than pursuant to a valid Charging Notice (it being understood that Seller may adjust a Charging Notice to the extent necessary to maintain compliance with the Operating Restrictions), or in connection with a Seller Initiated Test (including Facility maintenance or a Storage Capacity Test), or pursuant to a notice from the Transmission Provider or Governmental Authority. If, during the Delivery Term, Seller charge s the Facility (i) to a Stored Energy Level greater than the Stored Energy Level provided for in a Charging Notice, or (ii) in violation of the first sentence of this Section 4.8(c), then ( x) Seller shall pay Buyer the cost of such Energy associated with such charging of the Facility, and ( y) Buyer shall be entitled to discharge such Energy and entitled to all of the CAISO revenues and other benefits (including Product) associated with such discharge.
(d) D ischarging Notices. Buyer shall have the right to discharge the Facility seven (7) days per week and twenty- four (24) hours per day (including holidays), by causing Discharging Notices to be issued, subject to the provisions, requirements and limitations set forth in this Agreement and the Operating Restrictions. Each Discharging Notice issued in accordance with 33 this Agreement will be effective unless and until Buyer’s SC or the CAISO modifies such Discharging Notice by providing Seller with an updated Discharging Notice. (e) No Unauthorized Discharging. Seller shall not discharge the Facility during the Delivery Term other than pursuant to a valid Discharging Notice (it being understood that Seller may adjust a Discharging Notice to the extent necessary to maintain compliance with the Operating Restrictions), or in connection with a Seller Initiated Test (including Facility maintenance or a Storage Capacity Test), or pursuant to a notice from the Transmission Provider or Governmental Authority.
(f) C
AISO Dispatches . During the Delivery Term, CAISO Dispatches shall have priority over any Charging Notice or Discharging Notice issued by Buyer’s SC, and Seller shall have no liability for violation of this Section 4.8 or any Charging Notices or Discharging Notice if and to the extent such violation is caused by Seller’s compliance with any CAISO Dispatch. (g) P re -Commercial Operation Date Period. Prior to the Commercial Operation Date, (i) Buyer shall have no rights to issue or cause to be issued Charging Notices or Discharging Notices, (ii) Seller shall have exclusive rights to charge and discharge the Facility, (iii) Buyer and Buyer’s SC shall reasonably coordinate and cooperate with Seller with respect to Facility testing, and (iv) Seller shall be responsible for CAISO costs (including penalties, Imbalance Energy costs or revenues, and other charges) and sha ll be entitled to all CAISO revenues (including credits, Imbalance Energy costs or revenues, and other payments), including revenues associated with CAISO dispatches, bid cost recovery, or other credits in respect of the Product scheduled or delivered from the Facility. Although Buyer has no payment obligation for such pre-Commercial Operation Date items, as Buyer or its designated agent is the Scheduling Coordinator, Buyer or its Scheduling Coordinator shall remit to Seller amounts and supporting documentation, within twenty-one (21) Business Days after the end of each month in which Buyer or its Scheduling Coordinator has received funds or other credits from the CAISO in respect of pre -Commercial Operation Date items . Commencing on the Commercial Operation Date, Buyer shall have exclusive rights to issue or cause to be issued Charging Notices or Discharging Notices and all CAISO costs, revenues, penalties and other amounts owing to or paid by CAISO in respect of the Facility operations shall be for Buyer’s account.
(h) C
urtailments . Notwithstanding anything in this Agreement to the contrary, during any Settlement Interval, Curtailment Orders applicable to such Settlement Interval shall have priority over any Dispatch Notices applicable to such Settlement Interval, and Seller shall have no liability for violation of this Section 4.8 or any Dispatch Notice if and to the extent such violation is caused by Seller’s compliance with any Curtailment Order or other instruction or direction from a Governmental Authority or the Transmission Provider . Buyer shall have the right, but not the obligation, to provide Seller with updated Dispatch Notices during any Curtailment Order consistent with the operational procedures.
4.9 C
apacity Availability Notice .
(a) No less than thirty (30) days before the beginning of Commercial Operation, and thereafter ten (10) Business Days before the beginning of each month during the Delivery Term, Seller shall provide to Buyer and the SC (if applicable) a non- binding forecast of the hourly 34 expected Available Capacity, and a non-binding forecast of the hourly expected available Storage Capability, for each day of the following month in a form substantially similar to Exhibits F-1 and F-2, as applicable (“Monthly Forecast”).
(b) During the Delivery Term, no later than two (2) Business Days before each schedule day for the Day- Ahead Market in accordance with WECC scheduling practices, Seller shall provide Buyer and the SC (if applicable) with an hourly schedule of the Available Capacity that the Facility is expected to have for each hour of such schedule day (including, in each case, as such availability may be adjusted as required by the CAISO Tariff for reporting to CAISO) (the “Availability Notice”). Seller shall provide Availability Notices (including updated Availability Notices) using the form attached in Exhibit G, or other form as reasonably requested by Buyer, by (in order of preference) electronic mail or telephonically to Buyer personnel or its Scheduling Coordinator designated to receive such communications.
(c) Seller shall notify Buyer and the SC (if applicable) immediately with an updated Monthly Forecast and Availability Notice, as applicable, if the Available Capacity of the Facility (including, in each case, as such availability may be adjusted as required by the CAISO Tariff for reporting to CAISO) changes or is expected to change by one (1) MW or more after Buyer’s receipt of a Monthly Forecast or Availability Notice . Seller shall accommodate Buyer’s reasonable requests for changes in the time of delivery of Availability Notices.
4.10 Outages.
(a) Planned Outages.
(i) At least thirty (30) days prior to the Guaranteed Commercial Operation Date and by August 30 of each subsequent Contract Year, Seller shall submit to Buyer Seller’s schedule of proposed Planned Outages (“Outage Schedule”) for the following twelve (12)-month period in a form reasonably agreed to by Buyer . Within fifteen (15) days after its receipt of an Outage Schedule, Buyer shall give Notice to Seller of any reasonable request s for changes to the Outage Schedule, and Seller shall , consistent with Prudent Operating Practices, accommodate Buyer’s requests regarding the timing of any Planned Outage. Seller may propose changes to any Planned Outage included in an Outage Schedule by providing Notice to Buyer at least fifteen (15) days prior to such Planned Outage . Within three (3) days after receipt of such Notice, Buyer may propose alternate dates for the re scheduled Planned Outage and Seller shall use commercially reasonable efforts to accommodate such requests to the extent consistent with Prudent Operating Practices. Seller shall cooperate with Buyer to arrange and coordinate all Planned Outages with the CAISO. Seller shall communicate to Buyer all changes to a Planned Outage and estimated time of return of the Facility as soon as practicable after the condition causing the change becomes known to Seller.
(ii) I
f reasonably required in accordance with Prudent Operating Practices, Seller may perform maintenance at a different time than maintenance scheduled pursuant to Section 4.10(a)(i). Seller shall provide Notice to Buyer within the time period determined by the CAISO for the Facility, as a Resource Adequacy Resource that is subject to the Availability Standards, to qualify for an “Approved Maintenance Outage” under the CAISO Tariff (or such shorter period as may be reasonably acceptable to Buyer based on the likelihood of dispatch by 35 Buyer), and Seller shall use commercially reasonable efforts to limit maintenance repairs performed pursuant to this Section 4.10(a) to periods when Buyer does not reasonably believe the Facility will be dispatched.
(b) N o Planned Outages During Summer Months . Except as scheduled by the Parties under Section 4.1 0(a)(ii), during the Summer Season of each Contract Year, Seller shall not schedule any non-emergency outage or maintenance that reduces the Available Capacity of the Facility by more than ten percent (10%), unless (i) such outage or maintenance is required to avoid an emergency or damage to the Facility or its Interconnection Facilities, (ii) such outage or maintenance is necessary to maintain equipment warranties or is otherwise required by the equipment manufacturer and cannot be scheduled outside the Summer Season of each Contract Year, (iii) such outage or maintenance occurs in connection with any Force Majeure Event, (iv) such outage or maintenance is required by Law or by the CAISO Tariff or the tariffs of the Transmission Provider, or (v) the Parties agree to such outage or maintenance in writing. (c) N
otice of Unplanned Outages . Seller shall notify Buyer by telephone followed by an email to Buyer’s Scheduling Coordinator no later than ten (10) minutes following the occurrence of an Unplanned Outage if such outage represents 10 MW or more of the Installed Capacity, or if Seller has knowledge that an Unplanned Outage will occur, Seller shall relay outage information to Buyer as soon as reasonably practicable, but in any event as required by the CAISO Tariff within twenty (20) minutes of the Unplanned Out age. Seller shall communicate to Buyer the estimated time of return of the Facility as soon as practical after Seller has knowledge thereof.
Seller shall be permitted to reduce deliveries of Product during any Unplanned Outage if such reduction is required due to such outage.
(e) S
ystem Emergencies and other Interconnection Events . Seller shall be permitted to reduce deliveries of Product during any period of System Emergency, Transmission System Outage, or upon notice of a Curtailment Order pursuant to the terms of this Agreement, the Interconnection Agreement or applicable tariff if such reduction is required due to such System Emergency or other interconnection event.
(f) F
orce Majeure Event . Seller shall be permitted to reduce deliveries of Product during any Force Majeure Event if and to the extent such Force Majeure Event prevents Seller from delivering any such Product.
(g) H
ealth and Safety . Seller shall be permitted to reduce deliveries of Product if required to maintain health and safety pursuant to Section 6.2. (g) Reports of Outages. Seller shall promptly prepare and provide to Buyer all reports of Unplanned Outages or Planned Outages that Buyer may reasonably require f or the purpose of enabling Buyer to comply with the CAISO Tariff or any applicable Laws.
ARTICLE 5
TAXES, GOVERNMENTAL AND ENVIRONMENTAL COSTS
5.1 Allocation of Taxes and Charges . Seller shall pay or cause to be paid all Taxes on or with respect to the Facility or on or with respect to the sale and making available of Product to Buyer, that are imposed on Product prior to its delivery to Buyer at the time and place contemplated 36 under this Agreement (other than withholding or other Taxes imposed on Buyer’s income, revenue, receipts or employees).
Buyer shall pay or cause to be paid all Taxes on or with respect to the delivery to and purchase by Buyer of Product that are imposed on Product at and after its delivery to Buyer at the time and place contemplated under this Agreement and on Charging Energy prior to its delivery to Seller ; provided that Seller is responsible for withholding or other Taxes imposed on Seller’s income, revenue, receipts or employees).
If a Party is required to remit or pay Taxes that are the other Party’s responsibility hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement from the other for such Taxes or, if Buyer is required to remit or pay Taxes which are Seller’s responsibility hereunder, Buyer may deduct the amount of any such Tax from the sums due to Seller under Article 8 of this Agreement.
In the event any sale of Product hereunder is exempt from or not subject to any particular Tax, Buyer shall provide Seller with all necessary documentation to evidence such exemption or exclusion within thirty (30) days after the date Buyer makes such claim. Nothing shall obligate or cause a Party to pay or be liable to pay any Tax for which it is exempt under the Law.
5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefor from the other Party. All Product delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Product.
ARTICLE 6
MAINTENANCE AND REPAIR OF THE FACILITY
6.1 Maintenance of the Facility.
(a) Seller shall, as between Seller and Buyer, be solely responsible for the operation and maintenance of the Facility and the delivery of the Product and shall comply with applicable Law and Prudent Operating Practices relating to the operation and maintenance of the Facility. (b) Seller shall promptly make all necessary repairs to the Facility, and any portion thereof, and take all actions necessary to provide the Product to Buyer in accordance with the terms of this Agreement (and, at a minimum, the Performance Guarantees).
6.2 Maintenance of Health and Safety. Seller shall take reasonable safety precautions with respect to the operation, maintenance, repair and replacement of the Facility . If Seller becomes aware of any circumstances relating to the Facility that create an imminent risk of damage or injury to any Person or any Person’s property, Seller shall take prompt, reasonable action to prevent such damage or injury and shall give Buyer’s emergency contact identified in Exhibit M Notice of such condition. Such action may require disconnecting and removing all or a portion of the Facility or suspending the supply of Facility Energy to the Delivery Point. 37 6.3 Shared Facilities. The Parties acknowledge and agree that certain of the Shared Facilities and Interconnection Facilities, and Seller’s rights and obligations under the Interconnection Agreement, may be subject to certain shared facilities and/or co-tenancy agreements to be entered into among Seller, the Transmission Provider, Seller’s Affiliate s, and/or third parties pursuant to which certain Interconnection Facilities may be subject to joint ownership and shared maintenance and operation arrangements , including through shared ownership of, or possessing contractual right from, an Affiliate that is the interconnection customer under the Interconnection Agreement or the owner of any Shared Facilities and Interconnection Facilities ; provided, such agreements shall (i) permit Seller to perform or satisfy, and shall not purport to limit, its obligations hereunder, including maintaining Shared Facility capacity equal to the Interconnection Capacity Limit for Buyer’s sole use, (ii) provide for separate metering of the Facility, (iii) provide that any other generating or energy storage facilities not included in the Facility but using Shared Facilities shall not be included within the Facility’s CAISO Resource ID (as defined in the CAISO Tariff), and (iv) provide that in the event of any discretionary allocation of curtailment that is not specific to one or more CAISO Resource IDs of output from generating or energy storage facilities using the Shared Facilities, the Facility shall not be allocated more of such curtailment than the Facility’s pro rata portion of the total capacity of all generating or energy storage facilities using the Shared Facilities.
ARTICLE 7
METERING
7.1 Metering. Seller shall measure the amount of Charging Energy and Facility Energy using the Facility Meter, which will be subject to adjustment in accordance with applicable CAISO meter requirements and Prudent Operating Practices, including to account for Electrical Losses . The Facility Meter will be operated pursuant to applicable CAISO-approved calculation methodologies and maintained at Seller’s cost. If Seller elects to submit a SQMD Plan for the Facility, then the Facility Meter(s) will be programmed, operated and maintained pursuant to the applicable CAISO- approved SQMD Plan for the Facility, at Seller’s sole cost, throughout the period to which the SQMD Plan applies. Seller shall promptly provide to Buyer a copy of any CAISO -approved SQMD Plan and any modifications thereto and notice of any termination or withdrawal thereof.
Subject to meeting any applicable CAISO requirements, the Facility M eter shall be programmed to adjust for all Electrical Losses from such meters to the Delivery Point in a manner subject to Buyer’s prior written approval, not to be unreasonably withheld. Metering shall be consistent with the Metering Diagram set forth as Exhibit Q, as may be revised to be consistent with any CAISO- approved SQMD Plan. Each meter shall be kept under seal, such seals to be broken only when the Facility Meters are to be tested, adjusted, modified or relocated. In the event Seller breaks a seal, Seller shall notify Buyer as soon as practicable . In addition, Seller hereby agrees to provide all Facility Meter data to Buyer in a form reasonably acceptable to Buyer, and consents to Buyer obtaining from CAISO the CAISO meter data directly relating to the Facility and all inspection, testing and calibration data and reports , to the extent such meter data and related meters are not the subject of a CAISO-approved SQMD Plan. Seller shall provide Buyer with a live data metering connection that may be accessed using either the Inter -Control Center Communications Protocol (“ICCP”) as defined by the International Electrotechnical Commission or Distributed Network Protocol (“DNP3”), based on the standards of the International Electrotechnical Commission, to enable the exchange of real -time and historical power system monitoring and control data, including measured values and accounting data. Seller and Buyer, or Buyer’s Scheduling 38 Coordinator, shall cooperate to allow both Parties to retrieve the meter reads from the CAISO Market Results Interface -Settlements (MRI-S) web and/or directly from the CAISO meter(s) at the Facility, to the extent such meter data and related meters are not the subject of a CAISO - approved SQMD Plan.
7.2 Meter Verification. Annually, if Seller has reason to believe there may be a Facility Meter malfunction, or upon Buyer’s reasonable request, Seller shall test the Facility Meter. The tests shall be conducted by independent third parties qualified to conduct such tests. Buyer shall be notified at least seven (7) days in advance of such tests and have a right to be present during such tests. If a Facility Meter is inaccurate it shall be promptly repaired or replaced. If a meter is inaccurate by more than one percent (1%) and it is not known when the Facility Meter inaccuracy commenced (if such evidence exists , then such date will be used to adjust prior invoices), then the invoices covering the period of time since the last Facility Meter test shall be adjusted for the amount of the inaccuracy on the assumption that the inaccuracy persisted during one-half of such period so long as such adjustments are accepted by CAISO; provided, such period may not exceed twelve (12) months.
ARTICLE 8
INVOICING AND PAYMENT; CREDIT
8.1 Invoicing. Seller shall use commercially reasonable efforts to deliver an invoice to Buyer for Product within ten (10) days after the end of the prior monthly delivery period. Each invoice shall reflect (a) records of metered data, including (i) CAISO metering and transaction data sufficient to document and verify the amount of Product delivered by the Facility for any Settlement Period during the preceding month, including the amount of Charging Energy, Discharging Energy, and the amount of Replacement RA delivered to Buyer (if any) , and (ii) Seller’s records of metered data, including data showing a calculation of the Monthly Capacity Payment and other relevant data for the prior month; and (b) be in a format reasonably specified by Buyer, covering the Product provided in the preceding month determined in accordance with the applicable provisions of this Agreement. Buyer shall, and shall cause its Scheduling Coordinator to, provide Seller with all reasonabl y requested information with respect to any records, inclu ding invoices or settlement data from the CAISO, forecast data and other information, all as may be necessary from time to time for Seller to prepare and verify the accuracy of all invoices. The invoice shall be delivered by electronic mail in accordance with Exhibit M.
8.2 Payment. Buyer shall make payment to Seller of Monthly Capacity Payments for Product by wire transfer or ACH payment to the bank account provided on each monthly invoice. Buyer shall pay undisputed invoice amounts within forty -five (45) days of Buyer’s receipt of Seller’s invoice; provided, if such due date is not a Business Day, such due date shall be the next Business Day. Payments made after the due date will be considered late and will bear interest on the unpaid balance in an amount equal to the effective prime rate published on the date of the invoice in The Wall Street Journal (or, if The Wall Street Journal is not published on that day, the next succeeding date of publication), (the “Interest Rate”). If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day which the payment is due.
39 8.3 Books and Records. To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least seven (7) years or as otherwise required by Law. Upon fifteen (15) days’ Notice to the other Party, either Party shall be granted reasonable access to the accounting books and records within the possession or control of the other Party pertaining to all invoices generated pursuant to this Agreement. Seller acknowledges that in accordance with California Government Code Section 8546.7, Seller may be subject to audit by the California State Auditor with regard to Seller’s performance of this Agreement because the compensation under this Agreement exceeds $10,000.
8.4 P
ayment Adjustments; Billing Errors . Payment adjustments shall be made if Buyer or Seller discovers there have been inaccuracies in invoicing that are not otherwise disputed under Section 8.5 or an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO, or there is determined to have been a Facility Meter inaccuracy sufficient to require a payment adjustment. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.2, accruing from the date on which the adjusted amount should have been due.
8.5 B illing Disputes . A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered, or (ii) the time period allowed by Law for the CAISO to correct data. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved.
Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned via adjustments in accordance with Section 8.4. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.5 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve -month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.
8.6 N
etting of Payments . The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other with respect to this Agreement on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including any related damages calculated pursuant to Exhibits B and C , interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.
40 8.7 Development Security and Operation Security.
(a) Seller’s Development Security. To secure its obligations under this Agreement, Seller shall deliver the Development Security to Buyer within twenty (20) days after the Effective Date. Seller shall maintain the Development Security in full force and effect, subject to the terms of this Section 8.7(a). Upon the earlier of ( a) Seller’s delivery of the Operation Security , or (b) sixty (60) days after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts, if any, drawn in accordance with this Agreement. Subject to this Section 8.7(a) and the other terms of this Agreement governing Seller’s Development Security requirements, Seller may change the issuer of the Development Security from time to time and at any time, so long as the Development Security continues to meet the qualifications required by this Agreement . For avoidance of doubt, Seller shall have no replenishment obligation with respect to the Development Security, including following any draw by Buyer. (b) S
eller’s Operation Security . To secure its obligations under this Agreement, Seller shall deliver the Operation Security to Buyer on or before the Commercial Operation Date.
The Operation Security shall be provided in the form of a Letter of Credit. Seller shall maintain the Operation Security in full force and effect, and Seller shall replenish the Operation Security within ten (10) Business Days after any draw thereon in the event Buyer collects or draws down any portion of the Operation Security for any reason permitted under this Agreement other than to satisfy a Termination Payment, until the following have occurred: (a) the Delivery Term has expired or terminated early; and (b) all payment obligations of Seller due and payable under this Agreement, including compensation for penalties, any Termination Payment, indemnification payments, or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both of the events in subsections (a) and (b) above, Buyer shall promptly return to Seller the unused portion of the Operation Security. Subject to this Section
8.7(b) and the other terms of this Agreement governing Seller’s Operation Security requirements, Seller may change the issuer of the Operation Security from time to time and at any time, so long as the Operation Security continues to meet the qualifications required by this Agreement.
8.8 F irst Priority Security Interest in Cash or Cash Equivalent Collateral . To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest (“Security Interest”) in, and lien on (and right to net against), and assignment of the Development Security, the Operation Security, or any other cash collateral and cash equivalent collateral posted by Seller pursuant to Section 8.7, and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s Security Interest in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof. Upon or any time after (i) the occurrence of an Event of Default caused by Seller ; (ii) an Early Termination Date resulting from an Event of Default caused by Seller; or (iii) subject to any applicable cure period, Seller fail s to timely pay Buyer any amount due hereunder, including Delay Damages and/or the Termination Payment (with any draw limited to such unpaid amounts); (iv) if thirty (30) or fewer days remain prior to the expiration of such Letter of Credit and (A) if either such Letter of Credit (which is not the final issuance of the Letter of Credit) does not specify that the issuer will automatically extend the expiration date or a replacement Letter of Credit or a replacement Letter of Credit has not been provided for the period 41 after such expiration, or (B) if in respect of the final issuance of the Letter of Credit one -hundred five (105) or fewer days remain prior to the expiration or termination of the Delivery Term and any Termination Payment, indemnification payments, or other damages, as of such time have not been paid in full (whether directly or indirectly such as through set-off or netting) (with any draw limited to such unpaid amounts); (v) any replacement Letter of Credit is not provided as required under this Agreement, including with respect to Section 11.1(b)(iv) ; or (vi) any other occasion provided for in this Agreement where Buyer is authorized to draw on and retain all or a portion of the Development Security or the Operation Security, as applicable, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.8):
(a) exercise any of its rights and remedies with respect to the Development Security or the Operation Security, as applicable, including any such rights and remedies under Law then in effect;
(b) draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Development Security or Operation Security, as applicable; and (c) liquidate all Development Security or Operation Security, as applicable, then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller , including any equity or right of purchase or redemption by Seller.
Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller ’s obligations under this Agreement ; provided, that Seller shall remain liable for any amounts owing to Buyer after such application, except to the extent limited in this Agreement, subject to Buyer ’s obligation to return any surplus proceeds remaining after such obligations are satisfied in full. Any failure of, or delay by, Buyer in electing to draw any amount from the Development Security or the Operation Security shall in no way prejudice Buyer’s rights to subsequently recover such amounts from the Development Security or the Operation Security, except to the extent set forth in the applicable Development Security or the Operation Security .
Notwithstanding the other provisions of this Agreement, the Operation Security: (i) constitutes security for, but is not a limitation of, Seller’s obligations under this Agreement, and (ii) shall not be Buyers’ exclusive remedy against Seller for Seller’s failure to perform in accordance with this Agreement.
ARTICLE 9
NOTICES
9.1 Addresses for the Delivery of Notices. Any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the address set forth in Exhibit M or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.
9.2 A cceptable Means of Delivering Notice. Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered as follows: (a) if sent by a regularly scheduled next Business Day delivery carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees, the next Business Day after the same is delivered by the sending Party to such carrier; ( b) if sent by 42 electronic communication (including electronic mail or other electronic means) at the time the message is sent as indicated by the time stamp and, if after 5 :00 pm Pacific Prevailing Time, on the next Business Day provided that only notices regarding scheduling or invoices, or other notices set forth elsewhere in this Agreement explicitly permitting electronic communication, may be sent by electronic communication; or (c ) if delivered in person, upon receipt by the receiving Party.
Notwithstanding to the co ntrary herein , Notices of outages or other scheduling or dispatch information or requests, may be sent by electronic communication or by telephone, provided that such telephone communication is followed by a summary by electronic mail.
ARTICLE 10
FORCE MAJEURE
10.1 Definition.
(a) “Force Majeure Event” means any event or circumstance that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of commercially reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party (or any subcontractor or Affiliate of that Party) relying thereon as justification for such delay, nonperformance, or noncompliance.
(b) W
ithout limiting the generality of the foregoing, so long as the following events, meet the definition of “Force Majeure Event”, a Force Majeure Event may include: an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, ice storms (including for clarification purposes hail), landslide, mudslide, earthquake, volcanic eruption, or other cataclysmic events; explosion; fire; epidemic or pandemic (including any quarantine related to any such epidemic or pandemic mandated by any Governm ental Authority); any temporary restraint or restriction imposed by applicable Law or any directive from a G overnmental Authority which is not otherwise a Change in Law which remedy is specified in Section 3.7 or change in the CAISO Tariff or the Western Interconnection which remedy is specified in Section 19.10; Trade Restraint; sabotage; terrorism; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; strikes or other labor difficulties caused or suffered by a Party or any third party except as set forth below and unrelated to a Trade Restraint; or a failure of any final step-up transformer used by the Facility so long as it is maintained in accordance with Prudent Operating Practice and limited to no more than one (1) time during the Contract Term.
Seller has advised Buyer prior to the Effective Date of potential Force Majeure Events pertaining t
o Trade Restraints that may prevent or delay Seller from performing its obligations under the ESA (together, the “ Trade FME Claims ”). Seller shall not be precluded from asserting a Force Majeure Event claim with respect to any Trade FME Claims on any grounds that such claim may have been foreseeable as of the Effective Date. Notwithstanding anything contrary herein, to the extent such Trade FME Claims are asserted by Seller, each Party reserves its rights as to whether the Trade FME Claim actually prevents or delays Seller from performing its obligations under the ESA, whether despite the exercise of reasonable efforts by Seller, the Trade FME Claim cannot be avoided by and is beyond the reasonable control of and without the fault or negligence of Seller, that notice of such actual claim was appropriately provided as required under the Agreement, and 43 that Seller has provided any documentation required under the Agreement. “ Trade Restraint” means any Force Majeure Event caused by a New BESS Trade Measure Event or Import Restriction Action.
(c) N otwithstanding the foregoing, the term “ Force Majeure Event” does not include (i) changes in Law (subject to the Trade Restraints) or economic conditions that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including Buyer’s ability to buy components of the Product at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under this Agreement, or the increase in price of materials required for construction or maintenance of the Facility); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above that disables physical or electronic facilities necessary to transfer funds to the payee Party; (iv) a Curtailment Order; (v) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Facility, except and to the extent such inability is caused by a Force Majeure Event; (vi) a strike, work stoppage or labor dispute limited only to any one or more of Seller, Seller’s Affiliates, Seller’s contractors, their subcontractors thereof or any other third party employed by Seller to work on the Facility; (vii) any equipment failure except and to the extent such equipment failure is caused by a Force Majeure Event (including, or avoidance of doubt if such equipment failure relates to the failure of any final step-up transformer used by the Facility); or (viii) any action or inaction by any third party, including Transmission Provider, that delays or prevents the approval, construction or pl acement in service of any Interconnection Facilities or Network Upgrades, except and to the extent caused by a Force Majeure Event.
10.2 N
o Liability If a Force Majeure Event Occurs . Neither Party shall be liable to the other Party in the event it is prevented from performing its obligations hereunder in whole or in part due to a Force Majeure Event. The Party rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take reasonable actions necessary to mitigate the effects of the Force Majeure Event and remove such inability with due speed and diligence. Nothing herein shall be construed as permitting that Party to continue to fail to perform after said cause has been removed. The obligation to use due speed and diligence shall not be interpreted to require resolution of labor disputes by acceding to demands of the opposition when such course is inadvisable in the discretion of the Party having such difficulty. Neither Party shall be considered in breach or default of this Agreement if and to the extent that any failure or delay in the Party’s performance of one or more of its obligations hereunder is caused by a Force Majeure Event. The non-claiming Party shall not be required to perform or resume perform ance of any obligations corresponding to the obligations of the Party claiming suspension or excuse of performance by reason of a Force Majeure Event during the period of any such Force Majeure Event ; provided, however, that the occurrence and continuation of a Force Majeure Event shall not suspend or excuse the obligation of Buyer to make any Monthly Capacity Payment except to the extent the capacity from the Facility is not either eligible to be shown on a Supply Plan or able to be dispatched in the CAISO Market, each due to the Force Majeure Event (and in the case that the Force Majeure Event partially reduces the amount of capacity that can be shown on a Supply Plan or able to be dispatched into the CAISO Market, the Monthly Capacity Payment shall be reduced proportionally); and further provided the occurrence and continuation of a Force Majeure Event shall not suspend or excuse the obligation 44 of a Party to make any payments due for performance provided prior to the occurrence of the Force Majeure Event.
10.3 Notice. T he claiming Party, within fourteen (14) days after the date the claiming Party became aware of the Force Majeure Event and its impact on the Facility , shall provide the other Party Notice describing the occurrence giving rise to the Force Majeure Event claim, including the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance. Failure of the claiming Party to provide written notice as required in the preceding sentence constitutes a waiver of a Force Majeure Event claim for all periods prior to other Party’s receipt of such written notice to the extent the non -claiming Party is materially adversely affected by the claiming Party’s failure to provide such timely notice. The suspension of performance due to a claim of Force Majeure must be of no greater scope and of no longer duration than is required by the Force Majeure, provided the suspension of performance due to a claim of Force Majeure Event shall include any reasonable time period for mobilization/re - mobilization.
10.4 T
ermination Following Force Majeure Event . Following the Commercial Operation Date, either Party may terminate this Agreement upon written Notice to the other Party if a Force Majeure Event has occurred and:
(a) the claiming Party has claimed and received relief from performance of its obligations for a consecutive twelve (12)-month period due to a Force Majeure Event that effected more than 50% of the Facility or Product delivered hereunder; or (b) Seller has claimed relief due to the destruction of the Facility and Seller provides Notice that the Facility will not be able to provide Buyer Product due to such destruction with a consecutive twelve (12)-month period.
Upon any such termination, neither Party shall have any liability to the other Party, except for those obligations which survive termination of this Agreement, and Buyer shall promptly return to Seller any Operation Security then held by Buyer, less amounts drawn in accordance with this Agreement, if any.
ARTICLE 11
DEFAULTS; REMEDIES; TERMINATION
11.1 Events of Default. An “Event of Default” shall mean, (a) with respect to either Party (the “Defaulting Party”), the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such Party does not cause such representation or warranty to be true and correct within thirty 45 (30) days after Notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if such Party is unable to cause such representation or warranty to be true and correct within such initial thirty (30) -day period despite exercising commercially reasonable efforts);
(iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default set forth in this Section 11.1
, and except to the extent an exclusive remedy for such performance failure is set forth herein, including (A) any failure of Seller to provide the Capacity Attributes or any RA Shortfall, the exclusive remed y for which is set forth in Section 3.5, (B) any failure of Seller in connection with unauthorized charging or discharging, the exclusive remedies for which are set forth in Section 4.8(c), or (C) any failure of Seller related to any Performance Guarantee that does not trigger the provisions of Section 11.1(b)(ii), the exclusive remedies for which are set forth in Exhibit C and Exhibit O), and such failure is not remedied within thirty (30) days after Notice thereof (or such longer additional period, not to exceed an additional ninety (90) days, if such Party is unable to remedy such failure within such initial thirty (30) days period despite exercising commercially reasonable efforts);
(iv
) The failure of Seller to maintain and provide acceptable evidence of the required insurance for the required period of coverage as set forth in Section 17 and such failure is not remedied within thirty (30) days after Notice thereof; (v) such Party becomes Bankrupt;
(vi) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Article 14;
(vii) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party;
(b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
(i) Seller’s failure to achieve Construction Start on or before one-hundred eighty (180) days after the Guaranteed Construction Start Date (as may be extended by a Developer Cure Period);
(ii) Seller’s failure to achieve Commercial Operation on or before one-hundred eighty (180) days after the Guaranteed Commercial Operation Date (as may be extended by a Developer Cure Period);
(iii) except with respect to a Letter of Credit default described in Section
11.1(b)(iv) below, Seller’s failure to satisfy the collateral requirements pursuant to 46 Section 8.7 within ten (10) Business Days after Seller’s receipt of Notice from Buyer, including the failure to replenish the Operation Security amount to the extent set forth in accordance with this Agreement in the event Buyer draws against it for any reason other than to satisfy a Termination Payment;
(iv) with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer a replacement Letter of Credit from an issuer meeting the criteria set forth in the definition of “ Letter of Credit” in the amount required hereunder within ten (10) Business Days after Seller receives Notice of the occurrence of any of the following events:
(A) the issuer of the outstanding Letter of Credit shall fail to meet the criteria for an acceptable issuer as set forth in the definition of “Letter of Credit”; (B) the issuer of such Letter of Credit becomes Bankrupt; (C) the issuer of the outstanding Letter of Credit shall fail to comply with or perform its obligations under such Letter of Credit and such failure shall be continuing after the lapse of any applicable grace period permitted under such Letter of Credit;
(D) the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit; (E) the issuer of the outstanding Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit;
(F) such Letter of Credit fails or ceases to be in full force and effect at any time;
(G) such Party shall fail to renew or cause the renewal of each outstanding Letter of Credit on a timely basis as required in accordance with this Agreement, including the definition of “Letter of Credit”; or (H) The Letter of Credit from a United States branch of a foreign bank
(a) has, or is required by a Foreign Government to have, a contractual term by which it is subject to the write-down or conversion tools or powers (commonly known as “bail-in”) of any Foreign Government, (b) is or becomes an obligation of the issuer subject to the write -down or conversion tools or powers of any Foreign Government, irrespective of whether it has or is required to have a contractual term so providing, or (c) is treated by a Federal Financial Regulator or a Foreign Government as an obligation of the issuer in the nature of a “covered debt instrument” within the meaning of 12 C.F.R. §324.2.
47 11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (“ Non-Defaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“ Early Termination Date ”) that terminates this Agreement and ends the Delivery Term effective as of the Early Termination Date; (b) t o accelerate all amounts owing between the Parties, and to collect as liquidated damages (i) the Damage Payment in the case of an Early Termination Date that occurs before the Commercial Operation Date (subject to the limitation in Section 11.3(a)(iii)), or (ii) the Termination Payment in the case of an Early Termination Date occurring on or after the Commercial Operation Date, in each case calculated in accordance with Section 11.3 below; (c) to withhold any payments due to the Defaulting Party under this Agreement pending declaration of an Early Termination Date;
(d) to suspend performance pending declaration of an Early Termination Date; and (e) to exercise any other right or remedy available at law or in equity, including specific performance or injunctive relief, except to the extent such remedies are expressly limited under this Agreement;
(f) provided, that payment by the Defaulting Party of the Damage Payment or Termination Payment, as applicable, shall constitute liquidated damages, as the Non-Defaulting Party’s damages caused by the Defaulting Party would be difficult or impossible to determine and that the Damage Payment or Termination Payment, as applicable, is a reasonable approximation of the Non- Defaulting Party’s harm or loss, and the Non- Defaulting Party’s sole and exclusive remedy for any termination of this Agreement and the Event of Default related thereto.
11.3 Damage Payment; Termination Payment. If an Early Termination Date has been declared, the Non -Defaulting Party shall calculate, in a commercially reasonable manner, the Damage Payment or Termination Payment, as applicable, in accordance with this Section 11.3. (a) Damage Payment Prior to Commercial Operation Date . If the Early Termination Date occurs before the Commercial Operation Date, then the Damage Payment shall be due and shall be calculated in accordance with this Section 11.3(a). (i) Subject to the limitation in Section 11.3(a)(iii), if Seller is the Defaulting Party, then the Damage Payment shall be owed to Buyer and shall equal : (A) the Development Security, minus, (B) any amounts paid by Seller including any Construction Delay Damages and Commercial Operation Delay Damages, minus, (C) any amounts that Buyer has drawn from the Development Security. I f Seller has not timely paid the full amount Damage Payment, then Buyer may liquidate any such portion of the Development Security required to pay Buyer the Damage Amount. There will be n o amounts owed to Seller.
48 (ii) If Buyer is the Defaulting Party, then the Damage Payment shall be calculated in the same manner as a Termination Payment pursuant to Section 11.3(b) .
There will be no amount owed to Buyer.
(iii) O ther than to the limited extent as may be agreed to by the Parties under Section 4 of Exhibit B, notwithstanding anything to the contrary in this Agreement, Seller’s total liability prior to the Commercial Operation Date, including for Construction Delay Damages, Commercial Operation Delay Damages, the Damage Payment, any other payments owed under this Agreement, and any draws by Buyer on the Development Security, shall not exceed the Maximum Pre-COD Damages Amount. (b) T
ermination Payment On or After the Commercial Operation Date . The payment owed by the Defaulting Party to the Non-Defaulting Party if an Early Termination Date has been declared on or after the Commercial Operation Date (“ Termination Payment ”) shall be the aggregate of the Settlement Amount plus any and all other amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount as of the Early Termination Date. Without prejudice to the Non- Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount.
11.4 N otice of Payment of Damage Payment or Termination Payment . As soon as practicable, but in no event later than sixty (60) days after the Early Termination Date, Notice shall be given by the Non- Defaulting Party to the Defaulting Party of the amount of the Damage Payment or Termination Payment, as applicable, and whether the Damage Payment or Termination Payment, as applicable, is due to the Non- Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for s uch calculation. The Damage Payment or Termination Payment, as applicable, shall be made to the Non-Defaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.
Notwithstanding the foregoing, if the Defaulting Party does not owe the Non-Defaulting Party for any Damage Payment or Termination Payment (including for avoidance of doubt after the netting of any amounts that were owed to the Defaulting Party) , as applicable, the Non-Defaulting Party shall continue to owe any other unpaid amounts due to the Defaulting Party under this Agreement.
11.5 D isputes With Respect to Damage Payment or Termination Payment . If the Defaulting Party disputes the Non- Defaulting Party’s calculation of the Damage Payment or Termination Payment, as applicable, in whole or in part, the Defaulting Party shall, within ten (10) Business Days after such Notice of the Non-Defaulting Party’s calculation of the Termination Payment or Damage Payment, as applicable, is effective in accordance with Section 11.4: (i) provide to the Non- Defaulting Party a detailed written explanation of the basis for such dispute , and (ii) pay any undisputed portion of the Damage Payment or Termination Payment, as applicable. Disputes regarding the Damage Payment or Termination Payment, as applicable, shall be determined in accordance with Article 15.
11.6 R ights And Remedies Are Cumulative . Except where liquidated damages or other remedy are explicitly provided as the exclusive remedy, the rights and remedies of a Party pursuant 49 to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
11.7 Mitigation. Any Non-Defaulting Party shall be obligated to use commercially reasonable efforts to mitigate its Costs, Losses and damages resulting from any Event of Default of the other Party under this Agreement.
ARTICLE 12
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.
12.1 No Consequential Damages. EXCEPT TO THE EXTENT PART OF (A) AN EXPRESS
REMEDY OR MEASURE OF DAMAGES HEREIN, OR (B) A LIQUIDATED DAMAGES
CALCULATION PERFORMED IN ACCORDANCE WITH THIS AGREEMENT, NEITHER
PARTY SHALL BE LIABLE TO THE OTHER OR ITS INDEMNIFIED PERSONS FOR ANY
SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT, OR CONSEQUENTIAL DAMAGES, OR
LOSSES OR DAMAGES FOR LOST REVENUE OR LOST PROFITS, WHETHER
FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNE CTION WITH THIS AGREEMENT, BY STATUTE, OR IN TORT OR CONTRACT.
12.2 Wai
ver and Exclusion of Other Damages .
(a) EXCEPT AS EXPRESSLY SET FORTH HEREIN, THERE IS NO WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE
EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF
LIABILITY CONTAINED IN THIS AGREEMENT, INCLUDING THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF CONSEQUENTIAL AND OTHER DAMAGES PURSUANT TO SE CTION 12.1, SHALL
APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.
(b) FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND
EXCLUSIVE REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS
REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH
PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.
(c) IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY.
(d) TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER
ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE
DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT OTHERWISE OBTAINING AN
ADEQUATE REMEDY IS INCONVENIENT, AND THAT THE LIQUIDATED DAMAGES 50 CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED
ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE
CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY
PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT , OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.
(e) THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES
AND THE EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE
REMEDY FOR THE BREACH BY THE OTHER OF THE TERMS OF THIS AGREEMENT,
AND, EXCEPT AS OTHERWISE PROVIDED HEREIN, EACH PARTY WAIVES ANY
RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE WITH RESPE CT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.
ARTICLE 13
REPRESENTATIONS AND WARRANTIES; AUTHORITY
13.1 Seller’s Representations and Warranties . As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability company, duly organized, validly existing, and in good standing under the laws of the jurisdiction of its formation, and is qualified to conduct business in each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller.
(b) Seller has (or will have, pending required management, board, or board committee approvals prior to the time required to perform under this Agreement) the power and authority to own, lease, or to be the holder of title, an easement or an option for an easement, right -of-way grant, or similar instrument with respect to the Facility and S ite and enter into and perform this Agreement, and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement , except where such failure does not have a material adverse effect on Seller’s performance under this Agreement or the enforceability of this Agreement . The execution, delivery and (subject to the prior proviso) performance of this Agreement by Seller has been duly authorized by all necessary limited liability company action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller.
(c) The execution and delivery of this Agreement, consummation of the obligations contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller, or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. 51 (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Seller has (i) not entered into this Agreement with the actual intent to hinder, delay or defraud any creditor, and (ii) received reasonably equivalent value in exchange for its obligations under this Agreement. No petition in bankruptcy has been filed aga inst Seller (other than petitions that have been dismissed within thirty (30) days after filing), and Seller has never made an assignment for the benefit of creditors or taken advantage of any insolvency act for its benefit as a debtor.
(f) The Facility is or will be located in the State of California.
13.2 Buyer’s Representations and Warranties . As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a municipal corporation, duly organized, validly existing, and in good standing under the laws of the State of California and the rules, regulations and orders of the CEC, and is qualified to conduct business in the jurisdiction of the Buyer. All Persons making up the governing body of Buyer are the elected or appointed incumbents in their positions and hold their positions in good standing in accordance with applicable Law. (b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, including competitive bidding, public notice, open meetings, election, referendum, or prior appropriation requirements, the documents of formation of Buyer , or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Buyer is a party or by which any of its property is bound.
(d) This Agreement has been duly executed and delivered by Buyer. This Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Buyer is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California.
52 13.3 General Covenants. Commencing on the Effective Date (unless otherwise noted below) and continuing throughout the Contract Term:
(a) Each Party covenants that it shall continue to be duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and to be qualified to conduct business in each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition;
(b) Each Party covenants that it shall maintain (or obtain from time to time as required) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement;
(c) Each Party covenants that it shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and in compliance with any Law;
(d) Seller covenants that it shall be solely engaged in the business of developing, constructing, owning and operating the Facility;
(e) Seller shall not, at any time during the Delivery Term, incur or permit Facility Debt in an amount that, in the aggregate as of the date it is incurred, exceeds ninety percent (90%) of the Facility Cost;
(f) Seller covenants that it will obtain and maintain Site Control required for constructing, operating, and maintaining the Facility.
(g) Seller covenants that it will obtain and maintain to the extent applicable all regulatory authorizations, approvals, land use entitlements, and environmental compliance, including compliance with CEQA (and NEPA, if applicable) and any applicable mitigation measures, (if any), required for constructing, operating, and maintaining the Facility, ensuring they remain valid throughout the Delivery Term. Seller, after becoming aware of, will promptly notify Buyer of any events, such as the commencement of or significant changes in any legal or regulatory action, that could affect these authorization-related items. (h) Buyer covenants that with respect to its contractual obligations under this Agreement, it will not claim immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (1) suit, (2) jurisdiction of court, (3) relief by way of injunction, order for specific performance or recovery of Buyer’s property, (4) attachment of Buyer’s assets, or (5) execution or enforcement of any judgment; provided that this shall not be construed as a waiver of any other rights, defenses, or immunities available to Buyer under applicable law.
ARTICLE 14
ASSIGNMENT
14.1 General Prohibition on Assignments . Except as provided below in this Article 14, neither Party may voluntarily assign this Agreement or its rights or obligations under this Agreement, without the prior written consent of the other Party, which consent shall not be 53 unreasonably withheld, conditioned, or delayed. A Change of Control is deemed an assignment for purposes of this Agreement. Any assignment, including any Change of Control, made without required written consent, or in violation of the conditions to assignment set out below, shall be null and void. Each Party shall comply with any applicable request from the other Party with respect to compliance with any “know your customer” obligations required by Applicable Law.
14.2 Collateral Assignment. Subject to the provisions of this Section 14.2, Seller has the right to assign this Agreement as collateral for any financing or refinancing of the Facility. In connection with any financing or refinancing of the Facility by Seller, Buyer shall in good faith work with Seller and Lender to agree upon a consent to collateral assignment of this Agreement, or a consent reasonably requested by a Lender or financing party in connection with a financing in which the membership interests of Seller or its direct or indirect parent are collaterally assigned in lieu of an assignment of this Agreement (each, a “Consent to Collateral Assignment”). Such Consent to Collateral Assignment shall be substantially the form attached as Exhibit S, subject to modifications reasonably requested by Seller or its Lenders or financing parties to reflect the applicable financing structure and documentation.
14.3 O
ther Assignments and Permitted Transfers . In addition to assignments addressed in Section 14.2, Seller may, without the prior written consent of Buyer:
(a) engage in and consummate any transaction that results in a Permitted Transfer; or (b) transfer or assign this Agreement or undergo a Change of Control in which the assignee or the entity that is the Seller following such Change of Control is a Permitted Transferee.
14.4 Shared Facilities; Portfolio Financing. Buyer agrees and acknowledges that Seller may elect to finance all or any portion of the Facility or the Interconnection Facilities or the Shared Facilities (1) utilizing tax equity investment, and/or (2) through a Portfolio Financing, which may include cross -collateralization or similar arrangements . In connection with any financing or refinancing of the Facility, the Interconnection Facilities or the Shared Facilities by Seller or any Portfolio Financing, Buyer shall execute and deliver such further consents, approvals and acknowledgments as may be reasonable and necessary to facilitate such transactions ; provided, Buyer shall not be required to agree to any terms or conditions which are reasonably expected to have a material adverse effect on Buyer.
14.5 A
ccommodation of Lenders . Buyer will, as soon as reasonably practicable after request, cooperate reasonably with Seller and any Lender or tax equity investor of Seller or a parent of Seller involving the Facility or this Agreement to provide such consents to assignments, estoppels (substantially the form attached as Exhibit T , subject to modifications reasonably requested by Seller or its Lenders or financing parties to reflect the applicable financing structure and documentation), certifications, representations, information or other documents as may be reasonably requested by Seller or such Lender or tax equity investor in connection with any financing or assignment involving the Facility or this Agreement, including in connection with a financing in which the membership interests of Seller or its direct or indirect parent(s) are collaterally assigned in lieu of an assignment of this Agreement. Seller shall be responsible for Buyer’s reasonable costs associated with the preparati on, review, execution and delivery of 54 documents in connection with any assignment of this Agreement by Seller, including reasonable attorneys’ fees, not to exceed a cumulative amount of $10,000 per each such assignment.
ARTICLE 15
DISPUTE RESOLUTION
15.1 Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of Law. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW , EACH PARTY WAIVES ITS RESPECTIVE
RIGHT TO ANY JURY TRIAL WITH RESPECT TO ANY LITIGATION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT.
15.2 J
udicial Reference. Each of the Parties hereto hereby consents to the adjudication of all claims pursuant to judicial reference as provided in California Code of Civil Procedure Section 638, and the judicial referee shall be a retired judge and shall be empowered to hear and determine all issues in such reference, whether fact or law. Each of the Parties hereto represents that each has reviewed this waiver and consent and each knowingly and voluntarily waives its jury trial rights and consents to judicial reference following consultation with legal counsel on such matters. In the event of litigation, a copy of this Agreement may be filed as a written consent to a trial by the court or to judicial reference under California Code of Civil Procedure Section 638 as provided herein.
15.3 D
ispute Resolution . In the event of any claim, controversy or dispute between the Parties arising out of or relating to or in connection with this Agreement (each a “Dispute”), either Party shall deliver to the other Party notice of the Dispute with a detailed description of the underlying circumstances of such Dispute (a “Dispute Notice”); provided nothing herein shall prevent a Party from exercising its rights under Section 11.2 with respect to the occurrence of an Event of Default.
The senior officers of the Parties shall meet and confer as often as they deem reasonably necessary during a thirty (30) day period following receipt of the Dispute Notice in good faith negotiations to resolve the Dispute to the satisfaction of each Party. In the event such Dispute is not resolved by the expiration of the thirty (30) day period, then a Party may pursue any legal remedy available to it in accordance with this Agreement.
15.4 A
ttorneys’ Fees . In any proceeding brought to enforce this Agreement or because of the breach by any Party of any covenant or condition herein contained, each Party shall bear its own respective costs, expenses and attorneys’ fees in connection with said action except to the extent such costs, expenses and attorneys’ fees are calculated as Costs.
15.5 V enue . In the event of any legal action to enforce or interpret this Contract, the sole and exclusive venue shall be a court of competent jurisdiction located in California sitting in Orange County, California, and the Parties hereto agree to and do hereby submit to the jurisdiction of such court and waive any claim or defense that such forum is not convenient or proper.
ARTICLE 16
INDEMNIFICATION
16.1 Indemnification.
55 (a) Seller Indemnification. With respect to acts, errors or omissions in the performance of professional services, Seller agrees to indemnify and hold harmless Buyer, its officials, officers, employees, agents, and representatives from and against any and all claims, losses, damages, defense costs, or liability, of any kind or nature (collectively referred to hereinafter as “Claims”), to the extent directly arising out of the negligent acts, errors or omissions of the Seller or any of its Affiliates, directors, officers, employees, subcontractors, agents, and sub- agents in the performance of professional services under this Agreement, including environmental claims from third parties resulting from Seller’s construction or operation of the Facility, excluding any environmental claims resulting from the Charging Energy. (b) With respect to all acts, errors or omissions that do not arise directly out of the performance of professional services, including but not limited to those acts, errors or omissions typically covered by general and automobile liability insurance, Seller agrees to indemnify, defend (at Buyer’s option), and hold harmless Buyer, its officials, officers, employees, agents, and representatives from and against any and all Claims arising out of or in connection with Seller’s (or any of its Affiliates, directors, officers, employees, subcontractors, agents, and sub- agents) acts, errors, omissions, or work, relative to this Agreement, including environmental claims from third parties resulting from Seller’s construction or operation of the Facility, excluding any environmental claims resulting from the Charging Energy, except for those Claims that arise out of the sole negligence or willful misconduct of Buyer.
16.2 Claims. Promptly after receipt by Indemnified Party of any claim or Notice of the commencement of any action, administrative, or legal proceeding, or investigation as to which the indemnity provided for in this Article 16 may apply, the Indemnified Party shall notify the Indemnifying Party in writing of such fact. The Indemnifying Party shall assume the defense thereof with counsel designated by the Indemnifying Party and satisfactory to the Indemnified Party, provided, if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to, or inconsistent with, those available to the Indemnifying Party, then the Indemnified Party shall have the right to select and be represented by separate counsel, at the Indemnifying Party’s expense, unless a liability insurer is willing to pay such costs. If the Indemnifying Party fails to assume the defense of a claim meriting indemnification, the Indemnified Party may at the expense of the Indemnifying Party contest, settle, or pay such claim; provided, settlement or full payment of any such claim may be made only following consent of the Indemnifying Party or, absent such consent, written opinion of the Indemnified Party’s counsel that such claim is meritorious or warrants settlement and such settlement is made in good faith, and provided further that Indemnifying Party was provided adequate Notice of the settlement . The obligations set forth in this indemnification provision (i) shall be in effect without regard to whether Buyer, Seller or any other person or entity maintains or fails to maintain insurance coverage or a self-insurance program, for any such Claim(s); and (ii) shall survive the t ermination of this Agreement for a period of two (2) years . Nothing in this Section 16.2 shall enlarge or relieve either Party of any liability to the other for any breach of this Agreement. Neither Party shall be indemnified to the extent its damages result from its gross negligence, intentional acts, or willful misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligation to pay claims consistent with the provisions of a valid insurance policy.
56 ARTICLE 17
INSURANCE
17.1 Insurance.
(a) Policy Types. Seller shall maintain, or cause to be maintained at its sole expense, policies of insurance with coverage as set forth below in this Section 17.1(a):
(1) General Liability. Seller shall maintain, or cause to be maintained at its sole expense, (i) commercial general liability insurance, including products and completed operations and personal injury insurance, in a minimum amount of Five Million Dollars ($ 5,000,000) per occurrence, and an annual aggregate of not less than Five Million Dollars ($5,000,000), endorsed to provide contractual liability in said amount, specifically covering Seller’s obligations under this Agreement and including Buyer as an additional insured; and (ii) an umbrella insurance policy in a minimum limit of liability of Five Million Dollars ($5,000,000) per occurrence and in aggregate.
The amount of insurance required above may be satisfied by any combination of primary and excess insurance.
(2) E
mployer’s Liability Insurance. Employers’ Liability insurance in an amount no less than One Million Dollars ($1,000,000.00) for injury or death occurring as a result of each accident and bodily injury by disease.
(3) W orkers Compensation Insurance . Seller, if it has employees, shall also maintain at all times during the Contract Term workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of California Law. (4) B usiness Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage in an amount no less than of Two Million Dollars ($ 2,000,000) per occurrence and Two Million Dollars in aggregate. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non- owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement. (5) B uilder’s All- Risk Insurance . Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date, builder’s all-risk insurance covering the Facility during such construction periods. (6) S
ubcontractor Insurance . Seller shall require all of its subcontractors to carry: (i) comprehensive general liability insurance with a combined single limit of coverage in an amount no less than One Million Dollars ($1,000,000); (ii) workers’ compensation insurance and employers’ liability coverage in accordance with applicable requirements of Law; and (iii) business auto insurance for bodily injury and property damage with limits of coverage in an amount no less than One Million Dollars ($1,000,000) per o ccurrence. All subcontractors shall name Seller as an additional insured to insurance carried pursuant to clauses (6)(i) and (6)(iii). All subcontractors shall provide a primary endorsement and a waiver of subrogation to Seller for the required coverage pursuant to this Section
17.1(6).
(b) Evidence of Insurance. Within thirty (30) days after the Effective Date and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such 57 coverage. Such certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of any material modification, cancellation or termination of coverage, given to the City Clerk, City of Anaheim, 200 S. Anaheim Blvd., Anaheim, CA 92805. This does not apply to cancellation for non-payment of premium, which requires notice of not less than ten (10) days. The general liability, auto liability and worker’s compensation policies shall be endorsed with a waiver of su brogation in favor of Buyer for all work performed by Seller, its employees, agents and sub-contractors.
Seller agrees that any required coverage satisfied by self -insurance or a self -insured retention shall be disclosed to Buyer for approval by Buyer’s Risk Manager prior to execution of this Agreement.
Seller agrees that it will not voluntarily or materially alter, change or reduce any required coverage without providing a ten (10) day notice to Buyer.
Each insurance policy required by this Agreement, except policies for Workers’ Compensation, shall contain the following clauses or shall otherwise provide for the following conditions:
(i) “It is agreed that any insurance maintained by Seller pursuant to this Agreement shall be primary to, and not contribute with, any insurance or self -insurance maintained by the City of Anaheim.”
(ii) “The City of Anaheim, its officers, agents, employees, representatives and Anaheim-designated volunteers are added as additional insured as respects the acts, omissions, operations and activities of, or on behalf of, the named insured, in regard to products supplied to, or work or services performed for, or related to, the City of Anaheim.” Insurance required hereunder shall be placed with insurers (i) admitted or approved to write insurance in California, (ii) possessing an A. M. Best’s rating of A- VII or higher, or (iii) otherwise acceptable to Buyer, with prior written permission from Buyer.
Nothing herein contained shall be construed in any way as limiting the extent that Seller may be held responsible for payments of damages to persons or property resulting from Seller’s, (or Seller’s agent or sub-agent, if any) performance of the work covered under this Agreement.
In the event Seller hires other persons or firms to perform some of the work related to this Agreement, Seller shall ensure (i) that the acts or omissions of such persons or firms are covered under the above-referenced liability insurance, or (ii) that such firms maintain insurance equal to or better than, and subject to the same limits, terms and conditions as, the insurance required of Seller under this Agreement (except for firms that are not performing professional services—such firms shall not be required to carry the above -referenced professional liability insurance); and in either instance, Seller shall provide, or cause to be provided, evidence of such insurance coverage, reasonably acceptable to Buyer.
Buyer’s Risk Manager is hereby authorized to reduce the requirements set forth in this Section 17.1 in the event such reduction is in Buyer’s best interest, and to the extent agreed to by Seller, and any such reduction shall be detailed in Exhibit V to this Agreement, or a revised Exhibit 58 V meeting such requirements.
ARTICLE 18
CONFIDENTIAL INFORMATION
18.1 Definition of Confidential Information . The following constitutes “ Confidential Information,” whether oral or written which is delivered by Seller to Buyer or by Buyer to Seller including: (a) the terms and conditions of, and proposals and negotiations related to, this Agreement except to the extent required for inclusion into public agendas or other required documentation for purposes of obtaining approvals and authorizations regarding this Agreement; and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include :
(i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restricti on against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement.
18.2 D
uty to Maintain Confidential Information .
(a) The Party receiving Confidential Information (the “ Receiving Party ”) from the other Party (the “ Disclosing Party”) shall not disclose Confidential Information to a third party (other than the Party’s employees, lenders, investors, prospective lenders and investors, counsel, accountants, directors or advisors, or any such representatives of a Party’s Affiliates, who have a need to know such information and have agreed to keep such terms confidential) except in order to comply with any applicable Law , regulation, or any exchange, control area or independent system operator rule or in connection with any court or regulatory proceeding applicable to such Party or any of its Affiliates; provided, each Party shall, to the extent practicable, use reasonable efforts to prevent or limit the disclosure.
(b) The Parties acknowledge and agree that the Agreement and any transactions entered into in connection herewith are subject to the requirements of the California Public Records Act (Government Code Section 6250 et seq.) and the Ralph M. Brown Act (Cal. Govt. Code §§ 54950 et seq.). The Parties agree not to over -designate material as Confidential Information . Over- designation includes stamping whole agreements, entire pages or series of pages as “Confidential” that clearly contain information that is not Confidential Information. (c) Upon request or demand of any third person or entity not a Party hereto to Buyer pursuant to the California Public Records Act for production, inspection and/or copying of Confidential Information (“ Requested Confidential Information”), Buyer shall as soon as practical notify Seller in writing via email that such request has been made. Seller shall be solely responsible for taking at its sole expense whatever legal steps are necessary to prevent release of the Requested Confidential Information to the third party by Buyer. If Seller takes no such action within seven (7) Business Days after receiving the foregoing notice from Buyer, Buyer shall, at its discretion, be permitted to comply with the third party’s request or demand and is not required to defend against it. If Seller does take or attempt to take such action, Buyer shall provide timely and 59 reasonable cooperation to Seller, if requested by Seller, and Seller agrees to indemnify and hold harmless Buyer, its officers, employees and agents (“ Buyer’s Indemnified Parties ”), from any claims, liability, award of attorneys’ fees, or damages, and to defend any action, claim or lawsuit brought against any of Buyer’s Indemnified Parties for Buyer’s refusal to disclose any Requested Confidential Information.
18.3 I
rreparable Injury; Remedies . Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party, and expressly acknowledges that monetary damages would be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth herein. Accordingly, Receiving Party acknowledges that any such breach or threatened breach will cause irreparable injury to Disclosing Party and that , notwithstanding anything contrary herein, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach , without the necessity of proving actual damages, in addition to any other remedies that may be available, in law, in equity or otherwise.
18.4 F
urther Permitted Disclosure. Notwithstanding anything to the contrary in this Article 18, Confidential Information may be disclosed by the Receiving Party to any of its agents, consultants, contractors, trustees, or actual or potential financing parties (including, in the case of Seller, its Lender(s)), so long as such Person to whom Confidential Information is disclosed has a need to know such Confidential Information and is or agrees to be bound by confidentiality provisions, and provided further that Receiving Party is responsible for any breach of this Article 18 by such agents, consultants, contractors, trustees, or actual or potential financing parties.
18.5 P
ress Releases . Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such public statement.
ARTICLE 19
MISCELLANEOUS
19.1 Entire Agreement; Integration; Exhibits . This Agreement, together with the Cover Sheet and Exhibits attached hereto constitutes the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. In the event of a conflict between the provisions of this Agreement and those of the Cover Sheet or any Exhibit, the provisions of first the Cover Sheet, and then this Agreement shall prevail, and such Exhibit shall be corrected accordingly.
19.2 A
mendments . This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer and this Agreement may not be amended by electronic mail communications.
19.3 N
o Waiver . Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
60 19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy storage-related product seller and energy storage -related product purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) and/or, to the extent set forth herein, any Lender and/or Indemnified Party.
19.5 S
everability . In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
19.6 M
obile -Sierra. To the fullest extent permitted by applicable law, each Party, for itself and its successors and assigns, hereby expressly and irrevocably waives any rights it can or may have, now or in the future, whether under §§ 205 and/or 206 of the Federal Power Act or otherwise, to seek to obtain from FERC by any means, directly or indirectly (through complaint, investigation or otherwise), and each hereby covenants and agrees not at any time to seek to so obtain, an order from FERC changing any section of this Agreement specifying the rate, charge, classification, or other term or condition agreed to by the Parties, it being the express intent of the Parties that, to the fullest extent permitted by applicable law, neither Party shall unilaterally seek to obtain fr om FERC any relief changing the rate, charge, classification, or other term or condition of this Agreement, notwithstanding any subsequent changes in applicable law or market conditions that may occur. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v.
Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956) . Changes proposed by a non- Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under applicable Law.
19.7 C
ounterparts . This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
19.8 B
inding Effect . This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
19.9 F orward Contract ; Inapplicability/Waiver of Bankruptcy Code Section 366. (a) Each Party acknowledges, intends, and to the extent applicable agrees that (i) this Agreement and the transactions contemplated by this Agreement constitute a “forward contract” and at least one of the Parties is a “forward contract merchant” within the meaning of the United States Bankruptcy Code; (ii) all payments made or to be made by a Party pursuant to this Agreement, including the application by a Party of Development Security and Operation Security 61 to any amounts due and owing to such Party, constitute “settlement payments” within the meaning of the United States Bankruptcy Code; and (iii) its rights under Section 11.2 of this Agreement constitute a “contractual right to liquidate, terminate or accelerate” or offset under a forward contract within the meaning of ⸹⸹556, 561 of the Bankruptcy Code. (b) Each Party acknowledges and agrees that, upon a Party becoming Bankrupt, the other Party shall be entitled to exercise its rights and remedies under this Agreement in accordance with the safe harbor provisions of the Bankruptcy Code set forth in, inter alia, Sections 362(b)(6), 362(b)(17), 362(b)(27), 546(e), 548(d)(2), 556, and 561 thereof. (c) Each Party acknowledge and agrees that, for all purposes of this Agreement and to the extent permitted by applicable Law, that the provisions of 11 U.S.C. § 366 in any bankruptcy case or proceeding wherein such Party is a debtor are inapplicable, or if found to be applicable each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any bankruptcy case or proceeding wherein such Party is a debtor. In any such bankruptcy case or proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. §366 or any other provision of 11 U.S.C. § 101- 1532.
19.10 Change in Electric Market Design . If a change in the CAISO Tariff or the Western Interconnection, which is not otherwise a Change in Law which remedy is specified in Section 3.7, renders this Agreement or any provisions hereof incapable of being performed or administered, then any Party may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to make this Agreement capable of being performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith. If Buyer and Seller are unable, within sixty (60) days after delivery of such request, to agree upon changes to this Agreement or to resolve issues relating to changes to this Agreement, then any Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Article
15. Notwithstanding the foregoing, (i) a change in cost, value, or market price shall not be a reason to render this Agreement or any of the provisions hereof incapable of being performed or administered, and (ii) all of the unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution.
19.11 F
urther Assurances . Each of the Parties hereto agrees to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement.
19.12 Survival. The provisions of this Agreement that by their sense and context are intended to survive the termination or expiration of this Agreement shall survive to the extent necessary to carry out the obligations of the Parties under this Agreement. [Signatures on following page]
Signature Page to Energy Storage Agreement
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
CITY OF ANAHEIM, a municipal corporation
By:
Dukku Lee
Public Utilities General Manager
ATTEST
By:
Theresa Bass
City Clerk
ROADHOUSE ENERGY STORAGE, LLC, a
Delaware limited liability company
By:
[Name]
[Title]
APPROVED AS TO FORM:
ANAHEIM CITY ATTORNEY’S OFFICE
By:
Andrew Lee
Deputy City Attorney
Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Site Name: Roadhouse Energy Storage (for clarification, the Facility may comprise only a portion of the entire Roadhouse energy complex).
Site may include all or some of the following APNs : Seller to provide at least sixty (60) days prior to the Guaranteed Construction Start Date.
City: Ontario, CA
County: San Bernadino, California
Zip Code: 91761
Facility Description: Lithium Ion Battery Storage Facility Delivery Point: The P-node for the Facility (as defined below) Facility Meter: See Exhibit Q
Facility Metering Points: See Exhibit Q
P-node: To be established prior to the Commercial Operation Date. P-node shall be located in San Bernadino County, CA. Seller shall notify Buyer following the establishment of the P-node.
Transmission Provider: Southern California Edison
Interconnection Point: Southern California Edison Company’s 220 kV Mira Loma Substation.
Exhibit B - 1
EXHIBIT B
FACILITY CONSTRUCTION, COMMERCIAL OPERATION AND GUARANTEED
CAPACITY
1. Construction of the Facility.
(a) “Construction Start” will occur when Seller has (i) acquired all applicable regulatory authorizations, approvals , and permits necessary to start construction activities at the Site, and (ii) executed an engineering, procurement, and construction contract and issued thereunder a final notice to proceed that authorizes the contractor to mobilize to Site and begin construction. The date of Construction Start will be evidenced by Seller’s delivery to Buyer of a certificate substantially in the form attached as Exhibit J hereto, and the date certified therein shall be the “Construction Start Date.” Subject to the other terms of this Agreement, Seller shall cause Construction Start to occur no later than the Guaranteed Construction Start Date. (b) S eller shall be entitled to extend the Guaranteed Construction Start Date if such delay meets the qualifications of the Development Cure Period. Seller may also extend the Guaranteed Construction Start Date by paying Construction Delay Damages to Buyer for each day of extension of the Guaranteed Construction Start Date, not to exceed a total of one hundred eighty (180) days of extensions by such payment of Construction Delay Damages. On or before the tenth (10th) of each month, Buyer shall invoice Seller for Construction Delay Damages, if any, accrued during the prior month and, within ten (10) Business Days following Seller’s receipt of such invoice, Seller shall pay Buyer the amount of the Construction Delay Damages set forth in such invoice . If Seller achieves Commercial Operation within fifteen (15) days after the Guaranteed Commercial Operation Date (not including any extensions to such date resulting from Seller’s payment of Commercial Operation Delay Damages, but as may be extended pursuant to a Development Cure Period), then Buyer shall refund to Seller all Construction Delay Damages paid by Seller.
2. C
ommercial Operation of the Facility . “ Commercial Operation ” means the condition existing when Seller has fulfilled all of the conditions precedent in Section 2.2 of the Agreement and provided Notice to Buyer substantially in the form of Exhibit H (the “COD Certificate”). The date when Commercial Operation occurs as set forth in the COD Certificate is the “Commercial Operation Date.” Seller may achieve the Commercial Operation Date prior to the Target Commercial Operation Date so long as Seller gives written notice thereof to Buyer not less than ninety (90) days prior to the anticipated Commercial Operation Date, but in no event shall the Commercial Operation Date be achieved earlier than October 1, 2026. (a) Subject to the other terms of this Agreement, Seller shall cause Commercial Operation to occur by the Guaranteed Commercial Operation Date . Seller shall notify Buyer that it intends to achieve Commercial Operation at least sixty (60) days before the anticipated Commercial Operation Date.
(b) Seller shall be entitled to extend the Guaranteed Commercial Operation Date if such delay meets the qualifications of the Development Cure Period. Seller may also extend the Guaranteed Commercial Operation Date by paying Commercial Operation
Exhibit B - 2
Delay Damages to Buyer for each day of extension of the Guaranteed Commercial Operation Date, not to exceed a total of one hundred eighty (180) days of extension by such payment of Commercial Operation Delay Damages. On or before the tenth (10th) of each month, Buyer shall invoice Seller for Commercial Operation Delay Damages, if any, accrued during the prior month and, within ten (10) Business Days following Seller’s receipt of such invoice, Seller shall pay Buyer the amount of the Commercial Op eration Delay Damages set forth in such invoice.
3. Potential Extension of Guaranteed Dates Subject to Parties’ Agreement . If Seller fails to achieve Construction Start by the date that is one hundred eighty (180) days after the Guaranteed Construction Start Date (as such Guaranteed Construction Start Date may be extended by the Development Cure Period and/or by payment of the Construction Delay Damages to Buyer) and/or fails to achieve Commercial Operation by the date that is one hundred eighty (180) days after the Guaranteed Commercial Operation Date ( as such Guaranteed Commercial Operation Date may be extended by the Development Cure Period and/or by payment of the Commercial Operation Delay Damages to Buyer)), Buyer shall have the right in its sole discretion and without penalty to (i) terminate the Agreement as set forth in the immediately following Section 4 of this Exhibit B, or (ii) to elect to allow Seller to continue to pay the Construction Delay Damages or the Commercial Operation Delay Damages, each as applicable, to Buyer for a period of time specified by Buyer, with Seller’s agreement; provided that if the Parties so agree to permit Seller to continue to pay Construction Delay Damages or the Commercial Operation Delay Damages, each as applicable, assuming Seller timely pays the Daily Delay Damages for such an extension period, Buyer shall not terminate the Agreement based on Seller’s failure to timely achieve the Guaranteed Construction Start or Guaranteed Commercial Operation Date, as applicable, until and unless Seller fails to achieve Construction Start or Commercial Operation, as applicable, by such extended deadline as has been agreed to by the Parties; provided further that any such Construction Delay Damages or Commercial Operation Delay Damages, each as applicable, accrued during the extension period shall be amounts that are paid in excess of the Maximum Pre-COD Damages.
4. T
ermination for Failure to Achieve Commercial Operation . If the Facility has not achieved Construction Start on or before one- hundred eighty (180) days after Guaranteed Construction Start Date or Commercial Operation on or before one hundred eighty (180) days after the Guaranteed Commercial Operation Date (as each may be extended by a Developer Cure Period), Buyer or Seller may elect to terminate this Agreement in accordance with Sections 2.6,
11.1(b)(i), 11.1(b)(ii) and 11.2, as applicable.
5. Extension of the Guaranteed Dates.
The Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date each shall be extended automatically on a day-for-day basis for the duration of any and all delays arising out of the following circumstances to the extent the following circumstances are not the result of Seller’s failure to take all commercially reasonable actions to meet the applicable requirements and deadlines (the “Development Cure Period ”); provided, that day-for-day delays caused by more than one of the following circumstances occurring at the same time shall apply concurrently:
Exhibit B - 3
(a) a delay in the issuance of any permit or approval required to achieve the Construction Start or Commercial Operation;
(b) a delay caused by one or more Force Majeure Events; (c) a delay in the completion of construction of any Interconnection Facilities or Network Upgrades required for the Facility to interconnect with the transmission system, charge and discharge Energy, and deliver Capacity Attributes to Buyer, including without limitation if the Interconnection Facilities or Network Upgrades are not complete and ready at least four (4) months prior to the Guaranteed Commercial Operation Date (as in effect before an extension under this Section 5(c)); or
(d) Buyer has not made all necessary arrangements to receive the Facility Energy at the Delivery Point by the Guaranteed Commercial Operation Date.
Seller shall submit a Notice of a Development Cure Period delay to Buyer and may revise or supplement any previously submitted Notice to, among other things , reflect additional days of Development Cure Period which occur after the submission of any such Notice. Notwithstanding anything in this Agreement to the contrary, the cumulative extensions granted under the Development Cure Period (other than the extensions granted pursuant to Section 5(d) above, which shall not have any limit ) shall not exceed three-hundred (300) days. Upon request from Buyer, Seller shall provide documentation demonstrating to Buyer’s reasonable satisfaction that the delays described above did not result from Seller’s actions or failure to take commercially reasonable actions. Extensions due to any Development Cure Period shall apply to the Guaranteed Construction Start Date and Guaranteed Commercial Operation Date simultaneously but shall not exceed three-hundred (300) days in the aggregate.
6. F
ailure to Reach Guaranteed Capacity . If, at Commercial Operation, the Installed Capacity is less than one hundred percent (100%) of the Guaranteed Capacity, Seller shall have one hundred fifty (150) days after the Commercial Operation Date to install additional capacity such that the Installed Capacity is equal to (but not greater than) the Guaranteed Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit I hereto specifying the new Installed Capacity. If Seller fails to construct the Guaranteed Capacity by such date, Seller shall pay “Capacity Damages” to Buyer, in an amount equal to Two Hundred Fifty Thousand Dollars ($250,000) for each MW that the Guaranteed Capacity exceeds the Installed Capacity, and the definition of “ Guaranteed Capacity”, “Qualified Capacity”, and other applicable portions of the Agreement shall be adjusted to reflect the Installed Capacity accordingly. Seller’s payment of Capacity Damages under this Section 6 shall be Buyer’s sole and exclusive remedy for Seller’s failure to install the Guaranteed Capacity after the Commercial Operation Date.
Exhibit C - 1
EXHIBIT C
COMPENSATION
Buyer shall compensate Seller for the Product in accordance with this Exhibit C. (a) Monthly Capacity Payment. For each month of the Delivery Term (and pro- rated for the first and last month of the Delivery Term if the Delivery Term does not start on the first day of a calendar month), Buyer shall pay Seller a “Monthly Capacity Payment ” equal to the product of (i) the Contract Price (in dollars per kW -month), multiplied by (ii) one thousand (1,000), multiplied by (iii) the Contract Capacity (in MW). If the Contract Capacity is adjusted pursuant to a Storage Capacity Test on any day other than the first day of a calendar month, the Monthly Capacity Payment shall be calculated separately for each portion of the month in which the different Contract Capacity is applicable.
(b) S
easonal Availability Adjustment. If the Seasonal Availability for any Seasonal Period during the Delivery Term is less than the applicable Seasonal Availability Guarantee, then in the second monthly invoice provided to Buyer after the end of such Seasonal Period, Seller shall include a credit on such invoice equal to the product of (i) the sum of the aggregate Monthly Capacity Payments paid by Buyer for such Seasonal Period, multiplied by (ii) one hundred percent (100%) minus the Availability Adjustment or AA applicable to such Seasonal Period as calculated in accordance with Exhibit O . For the avoidance of doubt, if the applicable Availability Adjustment or AA for such Seasonal Period is 100%, then no credit or payment shall be owed by Seller for such Seasonal Period.
(c) L
iquidated Damages for Failure to Achieve the Guaranteed Efficiency Rate. If during any month during the Delivery Term, the Efficiency Rate applicable to such month is less than the applicable Guaranteed Efficiency Rate, Seller shall owe liquidated damages to Buyer, which damages shall be calculated by multiplying (i) the total Charging Energy for such month, by (ii) the percentage amount by which such applicable Efficiency Rate is less than the Guaranteed Efficiency Rate, by (iii) a rate equal to the simple average of the Day -Ahead Market locational marginal price for all the hours in which Charging Energy was provided in the applicable month, as published by the CAISO, for the Delivery Point, provided, that if the foregoing calculation results in a negative value, then no liquidated damages amount shall be owed by either Party. Any such amounts shall be credited by Seller against amounts owed by Buyer in the applicable monthly invoice.
(d) T
ax Credits. The Parties agree that the Contract Price is not subject to adjustment or amendment if Seller fails to receive any Tax Credits, or if any Tax Credits expire, are repealed or otherwise cease to apply to Seller or the Facility in whole or in part, or Seller or its investors are unable to benefit from any Tax Credits. Seller shall bear all risks, financial and otherwise, throughout the Contract Term, associated with Seller’s or the Facility’s eligibility to receive Tax Credits or to qualify for accelerated depreciation for Seller’s accounting, reporting or Tax purposes. The obligations of the Parties hereunder, including those obligations set forth herein regarding the purchase and price for and Seller’s obligation to deliver Product, shall be effective regardless of whether the sale of Product is eligible for, or receives Tax Credits during the Contract Term.
Exhibit D - 1
EXHIBIT D
SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Buyer as Scheduling Coordinator for the Facility. From and after Initial Synchronization of the Facility to the CAISO Grid, Buyer shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility for both the delivery and the receipt of Charging Energy, Facility Energy , and the Product at the Delivery Point. At least thirty (30) days prior to the Initial Synchronization of the Facility to the CAISO Grid, (i) Seller, with cooperation of Buyer, shall take all actions and execute and deliver to Buyer and the CAISO all documents necessary to authorize or designate Buyer (or Buyer’s designee) as the Scheduling Coordinator for the Facility effective as of the Initial Synchronization of the Facility to the CAISO Grid, and (ii) Buyer shall, and shall cause its designee to, take all actions and execute and deliver to Seller and the CAISO all documents necessary to authorize or designate Buyer or its designee as the Scheduling Coordinator for the Facility effective as of the Initia l Synchronization of the Facility to the CAISO Grid. From and after Initial Synchronization of the Facility to the CAISO Grid, Seller shall not authorize or designate any other party to act as the Facility’s Scheduling Coordinator, nor shall Seller perform for its own benefit the duties of Scheduling Coordinator, and Seller shall not revoke Buyer’s authorization to act as the Facility’s Scheduling Coordinator unless agreed to by Buyer. Buyer (as the Facility’s SC) shall submit bids to the CAISO in accordance with this Agreement , Prudent Operating Practices, the Operating Restrictions, and the applicable CAISO Tariff, protocols and Scheduling practices for Product on a day- ahead, hour-ahead, fifteen-minute market, real time or other market basis that may develop after the Effective Date, as determined by Buyer.
Seller (with assistance from Buyer) shall have taken all actions and executed all documents and instruments required to be performed and/or signed by Seller to authorize Buyer (or its designated agent) to act as Scheduling Coordinator for the Facility. (b) Notices. Seller shall cooperate with Buyer to provide notices and updates required under the CAISO Tariff. Seller shall promptly submit such information to Buyer by electronic e- mail notice to the personnel designated to receive such information. For real -time operations, telephonic communications are required to the personnel designated to receive such information. (c) C AISO Costs and Revenues . Except as otherwise set forth below, following the Commercial Operation Date, Buyer (as Scheduling Coordinator for the Facility) shall be responsible for CAISO costs (including penalties, Imbalance Energy costs or revenues, and other charges) and shall be entitled to all CAISO revenues (including credits, Imbalance Energy revenues or costs, and other payments), including revenues associated with CAISO dispatches, bid cost recovery, Inter -SC Trade credits, or other credits in respect of the Product Scheduled or delivered from the Facility. Seller shall be responsible for all CAISO costs and penalties resulting from any failure by Seller to comply with applicable provisions of the CAISO Tariff or the outage notification requirements set forth in this Agreement (except to the extent such non-compliance is caused by Buyer’s failure to perform its duties as Scheduling Coordinator for the Facility). If requested by Seller, Buyer or its designated SC shall make commercially reasonable ef forts to cooperate with Seller to allow Seller to submit replacement Resource Adequacy Capacity or make Resource Adequacy Capacity substitutions with respect to outages at the Facility as permitted by
Exhibit D - 2
the CAISO Tariff. The Parties agree that any Availability Incentive Payments (as defined in the CAISO Tariff) are for the benefit of Seller and for Seller’s account and that any Non-Availability Charges (as defined in the CAISO Tariff) are the responsibility of Seller and for Seller’s account.
In addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling, outage reporting, or generator operation, and any such sanctions or penalties are imposed upon the Facility or to Buyer as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties shall be Seller’s responsibility. (d) CAISO Settlements . Buyer (as the Facility’s SC) shall be responsible for all settlement functions with the CAISO related to the Facility. Buyer shall render a separate invoice to Seller for any CAISO payments, charges or penalties (“ CAISO Charges Invoice”) for which Seller is responsible under this Agreement. CAISO Charges Invoices shall be rendered after settlement information becomes available from the CAISO that identifies any CAISO charges.
Notwithstanding the foregoing, Seller acknowledges that the CAISO will issue additional invoices reflecting CAISO adjustments to such CAISO charges. Buyer shall review, validate, and if requested by Seller under paragraph (e) below, dispute any charges that are the responsibility of Seller in a timely manner and consistent with Buyer’s existing settlement processes for charges that are Buyer’s responsibilities. Subject to Seller’s right to dispute and to require Buyer to pursue the dispute of any such invoices, Seller shall pay the amount of CAISO Charges Invoices within ten (10) Business Days of Seller’s receipt of the CAISO Charges Invoice. If Seller fails to pay such CAISO Charges Invoice within that period, Buyer may net or offset any amounts owing to it for such CAISO Charges Invoices against any future amounts it may owe to Seller under this Agreement. The obligations under this Section with respect to payment of CAISO Charges Invoices shall survive the expiration or termination of this Agreement. (e) D
ispute Costs . If requested by Seller within the CAISO timeline for disputes , Buyer (or the Facility’s SC) shall dispute CAISO settlements in respect of the Facility. Seller agrees to pay Buyer’s costs and expenses (including reasonable attorneys’ fees) associated with its involvement with such CAISO disputes to the extent they relate to CAISO charges payable by Seller with respect to the Facility that Seller has directed Buyer to dispute. (f) T
erminating Buyer’s Designation as Scheduling Coordinator . At least thirty (30) days prior to expiration of this Agreement or as soon as reasonably practicable upon an earlier termination of this Agreement, the Parties will take all actions necessary to terminate the designation of Buyer as Scheduling Coordinator for the Facility as of 11:59 p.m. Pacific Prevailing Time on such expiration/termination date.
(g) M
aster Data File and Resource Data Template. Seller shall provide the data to the CAISO (and to Buyer) that is required for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement. Neither Party shall change such data without the other Party’s prior written consent, not to be unreasonably withheld, conditioned or delayed.
(h) N
ERC Reliability Standards . Buyer (as Scheduling Coordinator) shall cooperate reasonably with Seller to the extent necessary to enable Seller to comply, and for Seller to demonstrate Seller’s compliance with, NERC reliability standards. This cooperation shall include
Exhibit D - 3
the provision of information in Buyer’s possession that Buyer (as Scheduling Coordinator) has provided to the CAISO related to the Facility or actions taken by Buyer (as Scheduling Coordinator) related to Seller’s compliance with NERC reliability standards. Buyer (as Scheduling Coordinator) shall be responsible for Buyer’s compliance with NERC reliability standards related to Scheduling Coordinators.
Exhibit E - 1
EXHIBIT E
PROGRESS REPORTING FORM
Each Progress Report must include the following items:
1. Executive Summary.
2. Facility description.
3. Status of the development, construction, start -up and testing of the Facility, each as applicable.
4. Description of any material changes or planned changes to the Facility or the Site.
5. Summary of activities during the previous calendar quarter or month, as applicable.
6. Forecast of activities scheduled for the current calendar quarter or month, as applicable.
7. Written description about the progress relative to the Milestones, including whether Seller has met or is on target to meet the Milestones.
8. Gantt chart schedule showing progress on achieving the Milestones.
9. Progress and schedule of all material agreements, permits, approvals and technical studies.
10. List of issues that are reasonably likely to affect Seller’s Milestones.
Exhibit F - 1
EXHIBIT F-1
FORM OF MONTHLY EXPECTED AVAILABLE CAPACITY REPORT
[MW Per Hour] – [Insert Month]
1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 Day
1 Day
2 Day
3 Day
4 Day
5 [insert additional rows for each day in the month]
Day
29 Day
30 Day
31 The foregoing table is provided for informational purposes only, and it shall not constitute, or be deemed to constitute, an obligation of any of the Parties to this Agreement.
Exhibit F - 2
EXHIBIT F-2
FORM OF MONTHLY EXPECTED STORAGE CAPABILITY REPORT
[Stored Energy Capability, MWh Per Hour] – [Insert Month]
1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 Day
1 Day
2 Day
3 Day
4 Day
5 [insert additional rows for each day in the month]
Day
29 Day
30 Day
31 The foregoing table is provided for informational purposes only, and it shall not constitute, or be deemed to constitute, an obligation of any of the Parties to this Agreement.
Exhibit G - 1
EXHIBIT G
FORM OF DAILY AVAILABILITY NOTICE
Trading Day:
Station: Issued By:
Unit: Issued At:
Unit 100% Available No Restrictions:
Hour
Ending
Available Capacity Storage
Capability
Comments
(MW) (MWh)
1:00
2:00
3:00
4:00
5:00
6:00
7:00
8:00
9:00
10:00
11:00
12:00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
24:00
Exhibit G - 2
Comments:
Exhibit H - 1
EXHIBIT H
FORM OF COMMERCIAL OPERATION DATE CERTIFICATE
This certification (“ Certification”) of Commercial Operation is delivered by _______[ licensed professional engineer ] (“ Engineer”) to City of Anaheim, a California municipal corporation (“Buyer”) in accordance with the terms of that certain Energy Storage Agreement dated _______ (“Agreement”) by and between Roadhouse Energy Storage, LLC , a Delaware limited liability company (“Seller”) and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
As of _______[DATE]_____, Engineer hereby certifies and represents to Buyer the following:
1. The Facility is operational, interconnected, and synchronized with the Transmission System.
2. Seller has installed equipment for the Facility with an Installed Capacity of no less than ninety-five percent (95%) of the Guaranteed Capacity.
3. The Facility’s Installed Capacity is no less than ninety -five percent (95%) of the Guaranteed Capacity and the Facility is capable of charging, storing and discharging Energy, all within the operational constraints and subject to the applicable Operating Restrictions.
4. The Transmission Provider has provided documentation supporting release for Commercial Operation by [Name of Transmission Provider as appropriate] on _______[DATE]_____.
5. The CAISO has provided notification supporting Commercial Operation (which for avoidance of doubt shall not require certification including CAISO certification of ancillary services with respect to the Facility) , in accordance with the CAISO Tariff on _______[DATE]_____.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Its:
Date:
Exhibit I - 1
EXHIBIT I
FORM OF STORAGE CAPACITY TEST CERTIFICATE
This certification (“ Certification”) of Storage Capacity Test results is delivered by [licensed professional engineer] (“ Engineer”) to City of Anaheim, a California municipal corporation (“Buyer”) in accordance with the terms of that certain E nergy Storage Agreement dated __________ (“Agreement”) by and between Roadhouse Energy Storage, LLC and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
I hereby certify that a S torage Capacity Test conducted on [Date] demonstrated (i) an installed capacity of __ MW AC to the Delivery Point at four (4) hours of continuous discharge, and (ii) an Efficiency Rate of __%, all in accordance with the testing procedures, requirements and protocols set forth in Section 4.4 and Exhibit N of the Agreement.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Its:
Date:
Exhibit J - 1
EXHIBIT J
FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of Construction Start Date (“Certification”) is delivered by Roadhouse Energy Storage, LLC, a Delaware limited liability company (“Seller”) to City of Anaheim, a California municipal corporation (“Buyer”) in accordance with the terms of that certain Energy Storage Agreement dated __________ (“ Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Seller hereby certifies and represents to Buyer the following:
(1) Construction Start (as defined in Exhibit B of the Agreement) has occurred, and a copy of the notice to proceed that Seller issued to its contractor as part of Construction Start is attached hereto.
(2) t
he Construction Start Date occurred on _____________ (the “Construction Start Date ”); and
(3) t he precise Site on which the Facility is located is, which must be within the boundaries of the previously identified Site:
_____________________________________________________________________ (such description shall amend the description of the Site in Exhibit A of the Agreement).
IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as of the ___ day of ________.
Roadhouse Energy Storage, LLC
By:
Its:
Date:
Exhibit K - 1
EXHIBIT K
FORM OF LETTER OF CREDIT
IRREVOCABLE NON-TRANSFERABLE STANDBY LETTER OF CREDIT
NO. XXXXXXXX
DATE:
WE HEREBY ISSUE OUR IRREVOCABLE NON-TRANSFERABLE STANDBY LETTER OF CREDIT NO. [NUMBER]
ISSUING BANK:
[ISSUER]
[ADDRESS]
[PHONE NUMBER]
[FAX NUMBER]
BENEFICIARY:
CITY OF ANAHEIM
201 S. ANAHEIM BLVD., SUITE 1101
ANAHEIM, CA 92805
ATTN: CHIEF RISK MANAGER
APPLICANT:
NEXTERA ENERGY CAPITAL HOLDINGS, INC., ON BEHALF OF ITS SUBSIDIARY
ROADHOUSE ENERGY STORAGE, LLC
ATTN;
700 UNIVERSE BLVD
JUNO BEACH, FL 33408
AMOUNT: USD $[AMOUNT] (AMOUNT XX/100 UNITED STATES DOLLARS)
EXPIRATION DATE: [DATE]
WE HEREBY OPEN OUR IRREVOCABLE NON-TRANSFERABLE STANDBY LETTER OF CREDIT (“LETTER OF CREDIT”) IN FAVOR OF THE CITY OF ANAHEIM AND FOR THE
ACCOUNT OF THE ABOVE-REFERENCED APPLICANT IN THE AGGREGATE AMOUNT OF USD [AMOUNT] (AMOUNT), WHICH IS AVAILABLE BY PAYM ENT AT SIGHT AGAINST SITE DRAFT WHEN ACCOMPANIED BY THE FOLLOWING DOCUMENTS:
A DRAWING CERTIFICATE SPECIFICALLY REFERENCING THIS LETTER OF CREDIT NUMBER, AS EXEMPLIFIED BY ATTACHMENT A.
WE ARE ADVISED BY THE APPLICANT THAT THIS LETTER OF CREDIT IS ISSUED IN
CONNECTION WITH THE ENERGY STORAGE AGREEMENT BETWEEN THE CITY OF
Exhibit K - 2
ANAHEIM AND ROADHOUSE ENERGY STORAGE, LLC DATED [INSERT DATE] (“AGREEMENT”).
IF A COMPLYING PRESENTATION OF DRAW DOCUMENTS IS MADE PRIOR TO 11:00
AM (EASTERN TIME) ON A BUSINESS DAY, THEN WE SHALL, PRIOR TO THE CLOSE
OF BUSINESS ON THE FIRST FOLLOWING BUSINESS DAY, MAKE PAYMENT IN IMMEDIATELY AVAILABLE FUNDS. IF A COMPLYING PRESENTATION OF DRAW DOCUMENTS IS MADE AT OR AFTER 11:00 AM (EASTERN TIME) ON A BUSINESS
DAY, THEN WE SHALL, PRIOR TO THE CLOSE OF BUSINESS ON THE SECOND
FOLLOWING BUSINESS DAY, MAKE PAYMENT IN IMMEDIATELY AVAILABLE FUNDS.
PARTIAL DRAWINGS AND MULTIPLE PRESENTATIONS ARE PERMITTED.
ALL CHARGES OF THE ISSUER ARE FOR THE ACCOUNT OF THE APPLICANT.
EXCEPT AS OTHERWISE PROVIDED BELOW, THIS LETTER OF CREDIT SHALL
AUTOMATICALLY RENEW WITHOUT AMENDMENT OR NOTICE FOR AN
ADDITIONAL PERIOD OF ONE (1) YEAR FROM THE EXPIRATION DATE HEREOF OR ANY FUTURE EXPIRATION DATE, UNLESS AT LEAST THIRTY (30) DAYS PRIOR T O
ANY EXPIRATION DATE THE ISSUER SENDS NOTICE TO THE BENEFICIARY BY
OVERNIGHT COURIER SERVICE AT THE ABOVE -STATED ADDRESS STATING THAT
ISSUER ELECTS NOT TO RENEW THIS LETTER OF CREDIT FOR ANY ADDITIONAL PERIOD. HOWEVER, IN THE EVENT ISSUER GIVES SUCH NON- RENEWAL NOTICE,
BENEFICIARY MAY DRAW THE THEN FULL AVAILABLE AMOUNT OF THIS LETTER OF CREDIT IN ACCORDANCE WITH THE TERMS HEREIN.
THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING.
THIS UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED, AMENDED,
AMPLIFIED, OR INCORPORATED BY REFERENCE TO ANY DOCUMENT, CONTRACT, OR AGREEMENT REFERENCED TO HEREIN.
WE HEREBY AGREE WITH YOU THAT DRAFT(S) DRAWN UNDER AND IN
COMPLIANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT
SHALL BE DULY HONORED IF PRESENTED TOGETHER WITH DOCUMENT(S) AS SPECIFIED AT OUR OFFICES AT [ADDRESS]ON OR BEFORE THE ABOVE STATED EXPIRY DATE, OR ANY EXTENDED EXPIRY DATE IF APPLICABLE. DRAFT(S)
DRAWN UNDER THIS LETTER OF CREDIT MUST SPECIFICALLY REFERENCE THIS LETTER OF CREDIT NUMBER.
ALTERNATIVELY, PRESENTATION OF SUCH DRAWING DOCUMENTS MAY BE MADE BY FAX TRANSMISSION TO [FAX NUMBER] OR SUCH OTHER FAX NUMBER IDENTIFIED BY ISSUING BANK IN A WRITTEN NOTICE TO YOU. TO THE EXTENT A
PRESENTATION IS MADE BY FAX TRANSMISSION, YOU SHOULD PROVI DE TELEPHONE NOTIFICATION THEREOF TO ISSUING BANK TO [PHONE NUMBER]
PRIOR TO OR SIMULTANEOUSLY WITH THE SENDING OF SUCH FAX
Exhibit K - 3
TRANSMISSION, PROVIDED, HOWEVER, THAT ISSUING BANK’S RECEIPT OF SUCH TELEPHONE NOTICE SHALL NOT BE A CONDITION TO PAYMENT HEREUNDER.
THIS LETTER OF CREDIT IS SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES 1998, INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 590 (“ISP 98”). AS TO MATTERS NOT GOVERNED BY THE ISP 98, THIS LETTER OF
CREDIT IS GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE U.S. FEDERAL LAW.
SIGNED:
ISSUING BANK
[ISSUER]
________________________
NAME
TITLE
AUTHORIZED SIGNATURE
Exhibit K - 4
ATTACHMENT A
DRAWING CERTIFICATE
TO [ISSUING BANK NAME]
IRREVOCABLE NON-TRANSFERABLE STANDBY LETTER OF CREDIT
No.
DRAWING CERTIFICATE
Bank
Bank Address
Subject: Irrevocable Non-transferable Standby Letter of Credit Reference Number:
The undersigned , an authorized representative of City of Anaheim (the “Beneficiary”), hereby certifies to [Issuing Bank Name] (the “Bank”), and _____________________ (the “Applicant”), with reference to Irrevocable Nontransferable Standby Letter of Credit No. ( ), dated , (the “Letter of Credit”), issued by the Bank in favor of the Beneficiary, as follows as of the date hereof:
1. The Beneficiary is entitled to draw under the Letter of Credit an amount equal to $ , for the following reason(s) [check applicable provision]:
[ ]A. An Event of Default, as defined in that certain Energy Storage Agreement between Roadhouse Energy Storage, LLC (“Applicant’s Subsidiary”) and Beneficiary dated as of [Agreement Date] along with any amendments, as amended from time to time (the “Agreement”), with respect to the Applicant’s Subsidiary has occurred and is continuing.
[ ]B. An Early Termination Date has occurred or been designated as a result of an Event of Default (as defined in the Agreement) with respect to the Applicant’s Subsidiary for which there exist an unsatisfied obligation.
[ ]C. The Bank has heretofore provided written notice to the Beneficiary of the Bank’s intent not to renew the Letter of Credit following the present Expiration Date thereof (“Notice of Non -renewal”), and Applicant has failed to provide the Beneficiary w ith a replacement letter of credit satisfactory to Beneficiary in in accordance with the Agreement within ten (10) business days following the date of the Notice of Non-renewal.
[ ]D. The Beneficiary has not been paid any or all of the Applicant’s Subsidiary’s payment obligations now due and payable, after any applicable cure period, under the Agreement.
Exhibit K - 5
[ ]E The Agreement allows Beneficiary to draw on this Letter of Credit for [specify reason]. We therefore demand payment in the amount (insert dollar amount) as same is due and owing.
[ ]F. Other:
__________________________________________________________________ ________________________.
2. Based upon the foregoing, the Beneficiary hereby makes demand under the Letter of Credit for payment of U.S. DOLLARS AND ____/100ths (U.S.$ ), which amount does not exceed (i) the amount set forth in paragraph 1 above, and (ii) the available amount under the Letter of Credit as of the date hereof.
3. Funds paid pursuant to the provisions of the Letter of Credit shall be wire transferred to the Beneficiary in accordance with the following instructions:
Unless otherwise provided herein, capitalized terms which are used and not defined herein shall have the meaning given each such term in the Letter of Credit.
IN WITNESS WHEREOF, this Certificate has been duly executed and delivered on behalf of the Beneficiary by its authorized representative as of this ____ day of ______________________, 20____.
Beneficiary: CITY OF ANAHEIM
By:
Name:
Title:
Exhibit L - 1
EXHIBIT L
FORM OF REPLACEMENT RA NOTICE
This Replacement RA Notice (this “ Notice”) is delivered by Roadhouse Energy Storage, LLC , a Delaware limited liability company (“Seller”) to City of Anaheim, a California municipal corporation (“Buyer”) in accordance with the terms of that certain Energy Storage Agreement dated __________ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Notice but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Pursuant to Section 3.5 o f the Agreement, Seller hereby provides the below Replacement RA product information:
Exhibit L - 2
Roadhouse Energy Storage, LLC
By:
Its:
Date:
Exhibit M - 1
EXHIBIT M
NOTICES
[Notice information to be added]
Exhibit N - 1
EXHIBIT N
STORAGE CAPACITY TESTS
Storage Capacity Test Notice and Frequency
A. Commercial Operation Storage Capacity Test (s). Upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall schedule and complete a Commercial Operation Storage Capacity Test prior to the Commercial Operation Date. Such initial Commercial Operation Storage Capacity Test (and any subsequent Commercial Operation Storage Capacity Test permitted in accordance with Exhibit B) shall be performed in accordance with this Exhibit N and shall establish the Installed Capacity and initial Efficiency Rate hereunder based on the actual capacity and capabilities of the Facility determined by such Commercial Operation Storage Capacity Test(s).
B. S
ubsequent Storage Capacity Tests. Following the Commercial Operation Storage Capacity Test(s), at least fifteen (15) days in advance of the start of each Contract Year, upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall schedule and complete a Storage Capacity Test . In addition, Buyer shall have the right to require a retest of the Storage Capacity Test at any time upon no less than five (5) Business Days prior Notice to Seller if Buyer provides data with such Notice reasonably indicating that the then -current Contract Capacity has varied materially from the results of the most recent prior Storage Capacity Test. Seller shall have the right to run retests of any Storage Capacity Test at any time upon five (5) Business Days’ prior Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practice).
C. T
est Results and Re- Setting of Contract Capacity. No later than ten (10) Business Days following any Storage Capacity Test, Seller shall submit a testing report detailing results and findings of the test. The report shall include Facility Meter readings and plant log sheets verifying the operating conditions and output of the Facility. In accordance with Section 4.4( a)(ii) of the Agreement and Part II(I) below, after the Commercial Operation Storage Capacity Test (s), the Contract Capacity (up to, but not in excess of, the Installed Capacity) determined pursuant to such Storage Capacity Test shall become the new Contract Capacity on the New Contract Capacity Date.
Storage Capacity Test P rocedures
PART I. GENERAL.
A. Each Storage Capacity Test shall be conducted in accordance with Prudent Operating Practices, the Operating Restrictions, and the provisions of this Exhibit N. For ease of reference, a Storage Capacity Test is sometimes referred to in this Exhibit N as a “SCT”. Buyer or its representative may be present for the SCT and may, for informational purposes only, use its own metering equipment (at Buyer’s sole cost).
B. C onditions Prior to Testing.
Exhibit N - 2
(1) EMS Functionality. The EMS shall be successfully configured to receive data from the Battery Management System (BMS), exchange DNP3 data with the Buyer SCADA device, and transfer data to the database server for the calculation, recording and archiving of data points.
(2) C ommunications. The Remote Terminal Unit (RTU) testing should be successfully completed prior to any testing. The interface between Seller’s RTU and the SCADA System should be fully tested and functional prior to starting any testing, including verification of the data transmission pathway between Seller’s RTU and Seller’s EMS interface and the ability to record SCADA System data.
(3) C ommissioning Checklist. Commissioning shall be successfully completed per manufacturer guidance on all applicable installed Facility equipment, including verification that all controls, set points, and instruments of the EMS are configured.
PART II. REQUIREMENTS APPLICABLE TO ALL STORAGE CAPACITY TESTS.
A. Test Elements . Each SCT shall include at least the following individual test elements, which must be conducted in the order prescribed in Part III of this Exhibit N, unless the Parties mutually agree to deviations therefrom . The Parties acknowledge and agree that should Seller fall short of demonstrating one or more of the Test Elements as specified below, the Test will still be deemed “complete,” and any adjustments necessary to the Contract Capacity resulting from such Test, if applicable, will be made in accordance with this Exhibit N. (1) Electrical output at maximum discharging level (MW) for four (4 ) continuous hours; and
(2) Electrical input at maximum charging level at the Facility Meter (MW), as sustained until the SOC reaches at least 90%, continued by the electrical input at a rate up to the maximum charging level at the Facility Meter (MW), as sustained until the SOC reaches 100%.
B. Parameters. During each SCT , the following parameters shall be measured and recorded simultaneously for the Facility, at two (2) second intervals:
(1) Time;
(2) The amount of Facility Energy delivered to the Facility Meter (kWh) (i.e., to each measurement device making up the Facility Meter); (3) Net electrical energy input from the Facility Meter (kWh) (i.e., from each measurement device making up the Facility Meter);
(4) Stored Energy Level (MWh).
C. Intentionally Omitted.
D. Test Showing. Each SCT shall record and report the following datapoints:
Exhibit N - 3
(1) That the SCT successfully started;
(2) The maximum sustained discharging level for four (4) consecutive hours pursuant to A(1) above;
(3) The maximum sustained charging level to attain 90% SOC pursuant to A(2) above;
(4) Amount of time between the Facility’s electrical output going from 0 to the maximum sustained discharging level registered during the SCT (for purposes of calculating the ramp rate);
(5) Amount of time between the Facility’s electrical input going from 0 to the maximum sustained charging level registered during the SCT (for purposes of calculating the ramp rate);
(6) Amount of Charging Energy and Energy In to go from 0% SOC to 100% SOC;
(7) Amount of Facility Energy and Energy Out to go from 100% SOC to 0% SOC.
E. Test Conditions.
(1) General. At all times during a SCT , the Facility shall be operated in compliance with Prudent Operating Practices, the Operating Restrictions, and all operating protocols recommended, required or established by the manufacturer for the Facility. (2) A bnormal Conditions . If abnormal operating conditions that prevent the testing or recordation of any required parameter occur during a SCT, Seller may postpone or reschedule all or part of such SCT in accordance with Part II.F below. (3) I nstrumentation and Metering. Seller shall provide all instrumentation, metering and data collection equipment required to perform the SCT. The instrumentation, metering and data collection equipment electrical meters shall be calibrated in accordance with Prudent Operating Practice and, as applicable, the CAISO Tariff.
F. I
ncomplete Test . If any SCT is not completed in accordance herewith, Buyer may in its sole discretion: (i) accept the results up to the time the SCT stopped without any modification to the Contract Capacity pursuant to Section H below; (ii) require that the portion of the SCT not completed, be completed within a reasonable specified time period; or (iii) require that the SCT be entirely repeated within a reasonable specified time period. Notwithstanding the above, if Seller is unable to complete a SCT due to a Force Majeure Event or the actions or inactions of Buyer or the CAISO or the Transmission Provider, Seller shall be permitted to reconduct such SCT on dates and at times reasonably acceptable to the Parties.
G. T est Report . Within ten (10) Business Days after the completion of any SCT, Seller shall prepare and submit to Buyer a written report of the results of the SCT, which report shall
Exhibit N - 4
include:
(1) A record of the personnel present during the SCT that served in an operating, testing, monitoring or other such participatory role; (2) The measured and calculated data for each parameter set forth in Part II.A through D, including copies of the raw data taken during the test; and (3) Seller’s statement of either Seller’s acceptance of the SCT or Seller’s rejection of the SCT results and reason(s) therefor.
Within five (5) Business Days after receipt of such report, Buyer shall notify Seller in writing of either Buyer’s acceptance of the SCT results or Buyer’s rejection of the SCT and reason(s) therefor.
If either Party rejects the results of any SCT , such SCT shall be repeated in accordance with Part II.F.
H. Adjustment to Contract Capacity. The Contract Capacity shall be updated in accordance with Part III Test Results below as of the New Contract Capacity Date:
PART III. STORAGE CAPACITY TEST PROTOCOL.
A. Contract Capacity and Initial Efficiency Rate Test
• Procedure:
(1) System Starting State: The Facility will be in the on-line state at 0% SOC. (2) Record the initial value of the SOC.
(3) Command a real power charge that results in an AC power of Facility’s maximum charging level, and continue charging until the Facility has reached 100% SOC. (4) Record and store the SOC after the earlier of (a) the Facility has reached 100% SOC or (b) time elapsed equals four (4) hours divided by the Guaranteed Efficiency Rate, plus thirty (30) minutes of continuous charging.
(5) Record and store the AC Energy In.
(6) Following an agreed-upon rest period, command a real power discharge that results in an AC power output of the Facility’s maximum discharging level and maintain the discharging state until the earlier of (a) the Facility has discharged at the maximum discharging level for four (4) consecutive hours, (b) the Facility has reached 0% SOC, or (c) the sustained discharging level is at least 2% less than the maximum discharging level. (7) Record and store the SOC after four (4) hours of continuous discharging. If the Facility SOC remains above zero percent (0%) after discharging at a rate at or above
Exhibit N - 5
the Guaranteed Capacity (or at or above the Installed Capacity after a Commercial Operation Storage Capacity Test) for four (4) consecutive hours pursuant to Part III.A.6(a), the SOC will be deemed 0.
(8) Record and store the Facility Energy as measured at the Facility Meter. Such data point shall be used for purposes of calculation of the Contract Capacity. (9) If the Facility has not reached 0% SOC pursuant to Section III.A.6, continue discharging the Facility until it reaches a 0% SOC.
(10) Record and store the Facility Energy (in MWh) as measured at the Facility Meter, if applicable.
(11) Record and store the Energy Out from the commencement of discharging pursuant to Part III.A.5 until the Facility has reached a 0% SOC pursuant to either Part III.A.6 or Part III.A.9, as applicable.
• Test Results
(1) The resulting Contract Capacity determination is the sum of the total Facility Energy at the Facility Meter (as reported under Section III.A.8) divided by four (4) hours.
(2) T he resulting initial Efficiency Rate is calculated as the total amount of Energy Out (as reported under Section III.A .11 above) divided by the total amount of Energy In (as reported under Section III.A .5 above), and expressed as a percentage, and shall be used for the calculation of the Efficiency Rate Factor in Exhibit C until updated following the first month of operations.
Exhibit O - 1
EXHIBIT O
SEASONAL AVAILABILITY CALCULATION
Seasonal Availability
Following the end of each Seasonal Period during the Delivery Term, Seller will calculate the “Seasonal Availability” for such Seasonal Period using the formula set forth below:
Seasonal Availability (%) =
[SPDHRSs - UNAVAILHRSs]
[SPDHRSs]
Where:
s = relevant Seasonal Period “s” in which Seasonal Availability is calculated; SPDHRSs is the total number of On-Peak Hours for the Seasonal Period; UNAVAILHRSs, is the total number of On- Peak Hours, or partial On -Peak Hour, in the Seasonal Period during which the Facility was unavailable to charge and discharge Energy and to provide Ancillary Services. For the avoidance of doubt, hours and partial hours of unavailability that are Excused Hours will not be included in UNAVAILHRS s for any Seasonal Period.
Notwithstanding anything to the contrary set forth above in this Exhibit O or elsewhere in this Agreement, to the extent the Facility is unable to provide Ancillary Services during any Settlement Interval or Settlement Period that is not otherwise deemed an Excused Hour, but the Facility is available to charge and discharge Energy between the Facility and the Delivery Point, then such impact on UNAVAILHRS
s shall be reduced by 75%.
Any event that results in unavailability of the Facility for less than a full hour will count as an equivalent percentage of the applicable hour for this calculation. Additionally, if during any hour the Facility is available, but for less than the full amount of the then applicable Contract Capacity, the UNAVAILHRS
s for such hour shall be calculated as an equivalent
percentage of such hour in proportion to the amount of available Contract Capacity.
If the Facility or any component thereof was previously deemed unavailable for an hour or part of an hour, and Seller provides a revised Notice indicating the Facility is available for that hour or part of an hour by 5:00 a.m. of the morning Buyer schedules or bids the Facility in the Day-Ahead Market, the Facility will be deemed to be available to the extent set forth in the revised Notice.
If the Facility or any component thereof was previously deemed unavailable for an hour or part of an hour and Seller provides a revised Notice indicating the Facility is available for that hour or part of an hour at least sixty (60) minutes prior to the time the Buyer is required
Exhibit O - 2
to schedule or bid the Facility in the Real -Time Market, and the Facility is dispatched in the Real-Time Market, the Facility will be deemed to be available to the extent set forth in the revised Notice.
Availability Adjustment
The applicable “Availability Adjustment” or “AA” is calculated as follows:
(i) If the Seasonal Availability (as defined in the ESA) during the applicable Seasonal Availability Guarantee period is greater than or equal to the Seasonal Availability Guarantee, then:
AA = 100%
(ii) If the Seasonal Availability is less than the applicable Seasonal Availability Guarantee, but greater than or equal to 90%, then:
AA = 100% - [(applicable Seasonal Availability Guarantee - Seasonal Availability) x 0.25]
(iii) If the Seasonal Availability is less than 90%, but greater than or equal to 70%, then:
AA = 100% - [((applicable Seasonal Availability Guarantee – 90%) x 0.25) + (90% – Seasonal Availability) × 0.75)]
(iv) If the Seasonal Availability is less than 70%, but greater than or equal to 52%, then:
AA = 100% - [((applicable Seasonal Availability Guarantee – 90%) x 0.5) + ((90% – 70%) × 1.0) + ((70% – Seasonal Availability) × 1.5)]
(v) If the Seasonal Availability is less than 52%,
then: AA = 0
Exhibit P - 1
EXHIBIT P
OPERATING RESTRICTIONS
The Parties will develop and finalize the Operating Restrictions prior to the Commercial Operation Date; provided, the Operating Restrictions (i) may not be materially more restrictive of the operation of the Facility than as set forth below, unless agreed to by Buyer in writing, (ii) will, at a minimum, include the rules, requirements and procedures set forth in thi s Exhibit P, (iii) will include protocols and parameters for Seller’s operation of the Facility in the absence of Charging Notices, Discharging Notices or other similar instructions from Buyer relating to the use of the Facility, and (iv) may include F acility Scheduling, Operating R estrictions and Communications Protocols.
Technology: Lithium Ion Batteries
A. Contract Capacity
Guaranteed Capacity (MW): 300
B. Total Unit Dispatchable Range Information
Interconnect Voltage (kV) 220
Maximum Storage Level (MWh): 1,200
Minimum Storage Level (MWh): 0
Stored energy capability (MWh): 1,200
Maximum Discharge (MW): 300
Maximum Charge (MW): 300
Guaranteed Efficiency Rate: As set forth on the Cover Sheet Maximum number of cycles per day: 2
Maximum number of cycles per year: The maximum number of cycles is 365 cycles per Contract Year (maximum annual
throughput of 438,000 MWh) with no more
than two (2) cycles per day; provided,
however, Seller shall provide Notice to Buyer
within at least 180 days prior to the
Guaranteed Commercial Operation Date the
amount payable by Buyer for each MWh of
throughput (i.e., discharged MWh) that Buyer
dispatches in excess of 438,000 MWh during
a Contract Year (the “
Additional Cycles
Payment Amount”).
Within thirty (30) days after Seller’s
providing such Notice to Buyer, Buyer shall
provide Notice to Seller
stating whether it
accepts the Additional Cycles Payment
Amount. If Buyer does not accept the
Additional Cycles Payment Amount, or fails
Exhibit P - 2
to timely provide such a response Notice to
Seller, within that thirty (30) day period,
Buyer shall not be allowed to discharge the
Facility in excess of 365 cycles during a
Contract Year.
If Buyer provides Notice to Seller accepting
the Additional Cycles Payment Amount,
Buyer shall be allowed to discharge the
Facility in excess of 365 cycles during a
Contract Year subject to Buyer’s payment to
Seller of the Additional Cycles Payment
Amount for any Throughput that exceeds
438,000 MWh during a Contract Year.
Maximum annual average State of Charge
(SOC)
50%. If the year -to-date average Stored
Energy Level exceeds 600 MWh/day at any
time during the second half of a Contract
Year, then the Parties shall confer and
determine a mutually agreeable cure plan to
achieve an annual averaged Stored Energy
Level of 600 MWh/day for such Contract
Year.
If Parties cannot reach a mutually agreeable
cure plan within a two (2) week period
following initiation of discussions, then Seller
may provide Buyer upon seventy- two (72)
hours advance notice that the maximum
allowed Stored Energy Level shall be limited
until the CYTDA Stored Energy Level
(“Cumulative Year-to-Date Stored Energy
Level”) is less than 600 MWh/day, at which
point in time the limitation shall be released.
C. Charge and Discharge Rates
Mode Maximu
m (MW)
Ramp Rate
(MW/s) Description
Energy (Charge) 300 4 MW/s unless limited by
CAISO
Energy (Discharge) 300 4 MW/s unless limited by
CAISO
D. Ancillary Services
Frequency regulation up/down is included: Yes
Spin is included: Yes
Non-spin is included: Yes
Black start is included: No
Exhibit Q - 1
EXHIBIT Q
METERING DIAGRAM
To be provided by Seller at least sixty (60) days prior to Commercial Operation Date
Exhibit R – 1
EXHIBIT R
Intentionally Omitted.
Exhibit S – 1
EXHIBIT S
FORM OF CONSENT AND AGREEMENT
([NAME OF CONTRACTING PARTY])
([NAME OF ASSIGNED AGREEMENT])
This CONSENT AND AGREEMENT (this “Consent”), dated as of ___________, 20[ ], is executed by and among [NAME OF CONTRACTING PARTY] , a [legal form of Contracting Party] organized under the laws of the State of [________] (the “Contracting Party”), [__________], a [___________] (the “Project Owner”), and [_____________], as collateral agent (in such capacity, together with its successors and permitted assigns, the “ Collateral Agent”) for various financial institutions named from time to time as Lenders under the Credit Agreement (as defined below) and any other parties (or any of their agents) who hold any other secured indebtedness permitted to be incurred under the Credit Agreement (the Collateral Agent and all such parties collectively, the “Secured Parties”).
A. The Project Owner owns, operates and maintains [_________________] (the “Project”).
B. The Contracting Party and the Project Owner have entered into the agreement specified in Schedule I hereto (as further amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the “Assigned Agreement”).
C. The Borrower, the Project Owner, the other affiliates of the Borrower as Guarantors, various financial institutions named therein from time to time as Lenders,[_________________] , as the Administrative Agent and Collateral Agent, have entered into a Credit Agreement, dated as of [________________](as amended, modified or supplemented from time to time, the “ Credit Agreement”), providing for the extension of the credit facilities described therein.
D. A s security for the payment and performance by the Project Owner of its obligations under the Credit Agreement and the other Financing Documents (as defined below) and for other obligations owing to the Secured Parties, the Project Owner has assigned al l of its right, title and interest in, to and under, and granted a security interest in, the Assigned Agreement to the Collateral Agent pursuant to the Assignment and Security Agreement, dated as of [_____________________]between the Project Owner and the Collateral Agent (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the " Security Agreement ", and, together with the Credit Agreement and any other financing documents relating to the issuance of the Notes, the “Financing Documents”).
E. It is a requirement under the Credit Agreement that the Project Owner cause the Contracting Party to execute and deliver this Consent.
NOW, THEREFORE as an inducement for Lenders to make the Loans, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto hereby agree as follows:
Exhibit S – 2
1. Consent to Assignment. The Contracting Party hereby acknowledges and consents to the pledge and assignment of all right, title and interest of the Project Owner in, to and under (but not its obligations, liabilities or duties with respect to) the Assigned Agreement by the Project Owner to the Collateral Agent pursuant to the Security Agreement.
2. R
epresentations and Warranties . The Contracting Party represents and warrants as follows:
(a) N o Amendments. [Except as described in Schedule I hereto,] there are no amendments, modifications or supplements (whether by waiver, consent or otherwise) to the Assigned Agreement, either oral or written.
(b) N
o Previous Assignments. The Contracting Party affirms that it has no notice of any assignment relating to the right, title and interest of the Project Owner in, to and under the Assigned Agreement other than the pledge and assignment to the Collateral Agent referred to in Section 1 above.
(c) N
o Termination Event: No Disputes. After giving effect to the pledge and assignment referred to in Section 1, and after giving effect to the consent to such pledge and assignment by the Contracting Party, there exists no event or condition (a “Termination Event ”) that would, either immediately or with the passage of time or giving of notice, or both, entitle either the Project Owner or the Contracting Party to terminate the Assigned Agreement or suspend the performance of its obligations under the Assigned Agreement. [Except as set forth on Schedule III hereto,] there are no unresolved disputes between the parties under the Assigned Agreement.
All amounts due under the Assigned Agreement as of the date hereof have been paid in full [, except as set forth on Schedule III hereto].
3. R
ight to Cure.
(a) From and after the date hereof and unless and until the Contracting Party shall have received written notice from the Collateral Agent that the lien of the Security Agreement has been released in full, the Collateral Agent shall have the right, but not the obligation, following an “event of default” or “default” (or any other similar event however defined) by the Project Owner under the Assigned Agreement, to pay all sums due under the Assigned Agreement by the Project Owner and to perform any other act, duty or obligation required of the Project Owner thereunder as described in Section 3(c) below; provided, that no such payment or performance shall be construed as an assumption by the Collateral Agent or any other Secured Party of any covenants, agreements or obligations of the Project Owner under or in respect of the Assigned Agreement.
(b) The Contracting Party agrees that it will not (i) terminate the Assigned
Exhibit S – 3
Agreement [(other than pursuant to Section __ of the Assigned Agreement)] 1or (ii) suspend the performance of any of its obligations under the Assigned Agreement without first giving the Collateral Agent notice and opportunity to cure as provided below. The Contracting Party further agrees that it will not assign any obligation u nder the Assigned Agreement without the prior consent of the Collateral Agent, except to the extent the Contracting Party may subcontract such obligations to other parties.
(c) If a Termination Event shall occur [(other than a termination pursuant to Section __ of the Assigned Agreement)] 2, and the Contracting Party shall then be entitled to and shall desire to terminate the Assigned Agreement or suspend the performance of any of its obligations under the Assigned Agreement, the Contracting Party shall, prior to exercising such remedies or taking any other action with respect to such Termination Event, give written notice to the Collateral Agent of such Termination Event. If the Collateral Agent elects to exercise its right to cure as herein provided, it shall have a period of [30] 3 days after receipt by it of notice from the
Contracting Party referred to in the preceding sentence in which to cure the Termination Event specified in such notice if such Termination Event consists of a payment default, or if such Termination Event is an event other than a failure to pay amounts due and owing by the Project Owner (a “Non-monetary Event”) the Collateral Agent shall have such longer period as is required to cure such Termination Event so long as the Collateral Agent has commenced and is diligently pursuing appropriate action to cure such Termination Event; provided, however , that (i) if possession of the Project is necessary to cure such Non- monetary Event and the Collateral Agent has commenced foreclosure proceedings, the Collateral Agent will be allowed a reasonable time to complete such proceedings, and (ii) if the Collateral Agent is prohibited from curing any such Non-monetary Event by any process, stay or injunction issued by any governmental authority or pursuant to any bankruptcy or insolvency proceeding or other similar proceeding involving the Project Owner, then the time periods specified herein for curing a Termination Event shall be extended for the period of such prohibition.
(d) Any curing of or attempt to cure any Termination Event shall not be construed as an assumption by the Collateral Agent or the other Secured Parties of any covenants, agreements or obligations of the Project Owner under or in respect of the Assigned Agreement.
4. Replacement Agreements . Notwithstanding any provision in the Assigned Agreement to the contrary, in the event the Assigned Agreement is rejected or otherwise terminated as a result of any bankruptcy, insolvency, reorganization or similar proceedings affecting the Project Owner, at the Collateral Agent’s request, the Contracting Party will enter into a new agreement with the Collateral Agent or the Collateral Agent’s designee for the remainder of the originally scheduled term of the Assigned Agreement, effective as of the date of such rejection,
1 Insert applicable provision, if any, of the Assigned Agreement giving the Contracting Party a right to terminate the Assigned Agreement other than upon a default or other event or condition curable by the Project Owner.
2 Insert applicable provision, if any, of the Assigned Agreement giving the Contracting Party a right to terminate the Assigned Agreement other than upon a default or other event or condition curable by the Project Owner.
3 Or longer cure period specified in Assigned Agreement.
Exhibit S – 4
with the same covenants, agreements, terms, provisions and limitations as are contained in the Assigned Agreement.
5. Substitute Owner. The Contracting Party acknowledges that in connection with the exercise of remedies following a default under the Financing Documents, the Collateral Agent may (but shall not be obligated to) assume, or cause any purchaser at any foreclosure sale or any assignee or transferee under any instrument of assignment or transfer in lieu of foreclosure to assume, all of the interests, rights and obligations of the Project Owner thereafter arising under the Assigned Agreement. If the interest of the Project Owner in the Assigned Agreement shall be assumed, sold or transferred as provided above, the assuming party shall agree in writing to be bound by and to assume the terms and conditions of the Assigned Agreement and any and all obligations to the Contracting Party arising or accruing thereunder from and after the date of such assumption, and the Contracting Party shall continue to perform its obligations under the Assigned Agreement in favor of the assuming party as if such party had thereafter been named as the “Customer” under the Assigned Agreement; provided that if the Collateral Agent or its designee (or any entity acting on behalf of the Collateral Agent, the Collateral Agent’s designee or any of the other Secured Parties) assumes the Assigned Agreement as provided above, it shall not be personally liable for the performance of the obligations thereunder except to the extent of all of its right, title and interest in and to the Project.
6. P
ayments . The Contracting Party shall make all payments due to the Project Owner under the Assigned Agreement directly into the account specified on Schedule II hereto, or to such other person or account as shall be specified from time to time by the Collateral Agent to the Contracting Party in writing. All parties hereto agree that each payment by the Contracting Party as specified in the preceding sentence of amounts due to the Project Owner from the Contracting Party under the Assigned Agreement shall satisfy the Contracting Party’s corresponding payment obligation under the Assigned Agreement.
7. N
o Amendments. The Contracting Party acknowledges that the Financing Documents restrict the right of the Project Owner to amend or modify the Assigned Agreement, or to waive or provide consents with respect to certain provisions of the Assigned Agreement, unless certain conditions specified in the Financing Documents are met. The Contracting Party shall not, without the prior written consent of the Collateral Agent, amend or modify the Assigned Agreement, or accept any waiver or consent with respect to cert ain provisions of the Assigned Agreement, unless the Contracting Party has received from the Project Owner a copy of a certificate delivered by the Project Owner to the Collateral Agent to the effect that such amendment, modification, waiver or consent has been made in accordance with the terms and conditions of the Financing Documents, which may in certain circumstances require the prior written consent of the Collateral Agent thereto.
8. A
dditional Provisions . [To be specified if necessary to clarify the Assigned Agreement.]
9. N otices . Notice to any party hereto shall be in writing and shall be deemed to be delivered on the earlier of: (a) the date of personal delivery, (b) postage prepaid, registered or certified mail, return receipt requested, or sent by express courier, in each case addressed to such party at the address indicated below (or at such other address as such party may have theretofore
Exhibit S – 5
specified by written notice delivered in accordance herewith), upon delivery or refusal to accept delivery, or (c) if transmitted by facsimile, the date when sent and facsimile confirmation is received; provided that any facsimile communication shall be followed promptly by a hard copy original thereof by express courier:
The Collateral Agent: [________________________]
[________________________]
Attn: [________________________]
Telephone No.: [________________________]
Facsimile No.: [________________________]
The Project Owner:
The Contracting Party:
10. Successors and Assigns. This Consent shall be binding upon and shall inure to the benefit of the successors and assigns of the Contracting Party, and shall inure to the benefit of the Collateral Agent, the other Secured Parties, the Project Owner and their respective successors , transferees and assigns.
11. C
ounterparts . This Consent may be executed in one or more counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument.
12. G overning Law. This Consent shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws thereunder (other than Section 5-1401 of the New York General Obligations Law).
Exhibit S – 6
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Consent as of the date first written above.
[NAME OF CONTRACTING PARTY]
By:
Name:
Title:
[________________________]
as Collateral Agent
By:
Name:
Title:
Acknowledged and Agreed:
[________________________]
By:
Name:
Title:
Exhibit S – 7
Schedule I
Assigned Agreement
Exhibit S – 8
Schedule II
Payment Instructions
(Section 6)
All payments due to the Project Owner pursuant to the Assigned Agreement shall be made to [INSERT REVENUE ACCOUNT INFORMATION].
Exhibit S – 9
[Schedule III]
[Amounts Due and Unpaid under the Assigned Agreement
(Section 2(c))]
Exhibit T – 1
EXHIBIT T
FORM OF ESTOPPEL CERTIFICATE
ESTOPPEL CERTIFICATE
(Energy Storage Agreement – ____________ and
_________________
This ESTOPPEL CERTIFICATE (this “ Estoppel Certificate”), dated as of ________ __, 202_, is provided by ___________________, a _________________ (“Buyer”).
RECITALS
A. Buyer and ______________________, a Delaware limited liability company (the “Project Company”) are parties to that certain Energy Storage Agreement, dated as of ______________, 202_ (the “Energy Storage Agreement”), pursuant to which Buyer agreed to purchase from the Project Company in accordance with the terms and conditions set forth therein certain energy storage-related products from the relevant energy storage project described therein (“Storage Project”).
B. Pursuant to that certain [Lender Financing Agreement], by and between [_____] and [_____] (collectively, the “Class B Equity Investors”), the Class B Equity Investors shall acquire the “Class B” membership interests in _____________, the 100% owner of the Project Company.
C. Pursuant to Section ____ of the [Lender Financing Agreement], the Lender has required that this Estoppel Certificate be delivered as a condition precedent to the consummation of the transactions described therein.
NOW, THEREFORE, in consideration of the foregoing recitals, Buyer hereby certifies, agrees and acknowledges as follows:
1. No default or event of default with respect to Buyer, nor, to the knowledge of Buyer, any other party has occurred under the Energy Storage Agreement, and there are no defaults or unsatisfied conditions presently existing (or which would exist after the passage of time and/or giving of notice) that would allow the Project Company or Buyer to terminate the Energy Storage Agreement.
2. There exists no event or condition that would, either immediately or with the passage of time or giving of notice, or both, entitle either the Project Company or Buyer to suspend the performance of its obligations under the Energy Storage Agreement.
3. Each representation or warranty made or given by Buyer in Section ____ of the Energy Storage Agreement is complete, true, and correct.
Exhibit T – 2
4. As of the date hereof, (i) the Energy Storage Agreement is in full force and effect and has not been assigned, amended, supplemented or modified, (ii) there are no pending or threatened disputes or legal proceedings between Buyer and the Project Company, (iii) there is no pending or, to the knowledge of Buyer, threatened action or proceeding involving or relating to Buyer before any court, tribunal, governmental authority or arbitrator which purports to affect the legality, validity or enforceability of the Energy Storage Agreement, (iv) Buyer is not aware of any event, act, circumstance or condition constituting an event of force majeure under the Energy Storage Agreement, and (v) the Project Company owes no indemnity payments or other amounts to Buyer under the Energy Storage Agreement.
5. The execution, delivery and performance by Buyer of this Estoppel Certificate have been duly authorized by all necessary action on the part of Buyer and do not require any approval or consent of any other person or entity and do not violate any provision of any law, regulation, order, judgment, injunction or similar matters or breach any agreement presently in effect with respect to or binding on Buyer.
6. Buyer agrees that any notices required to be delivered to Seller under Section [__] of the Energy Storage Agreement, including notices of an [Event of Default], shall be delivered by Buyer to each of the Class B Equity Investors at their respective notice addresses set forth on Exhibit A hereto, and Buyer agrees that the Class B Equity Investors shall have the right (but not the obligation) to cure the defaults listed in any notice of default in accordance with Section [__] of the Energy Storage Agreement within a cure period that is the same length as the cure period afforded to Seller under the Energy Storage Agreement with respect to such event (but in no event less than 90 days), and which starts on the later of (i) the same date that the Seller’s cure period expires under the Energy Storage Agreement or (ii) the date that the Class B Equity Investors receive such notice that lists the default or defaults of the Seller under the Energy Storage Agreement.
7. [Additional provisions to be included if necessary to clarify the Energy Storage Agreement.]
8. This Estoppel Certificate shall be governed by the laws of the State of New York, without regard to principles of conflict of law.
[Signature page follows]
Exhibit T – 3
IN WITNESS WHEREOF, Buyer has cau sed this Estoppel Certificate to be executed by its undersigned authorized officer as of the date first set forth above.
_______________________________
By: _____________________________
Name:
Title:
Exhibit U– 1
EXHIBIT U
MILESTONE SCHEDULE
Milestone Expected Date for
Completion
Security Due
Execute Interconnection
Agreement Complete N/A
Provision of Development
Security
20 days following the
Effective Date of this
Agreement
$100/kW for each kW of
Guaranteed Capacity
(measured in kW)
Evidence of Site Control Prior to Construction Start N/A Guaranteed Construction Start
Date April 1, 2026 N/A
Target Commercial Operation
Date June 15, 2027 N/A
Guaranteed Commercial
Operation Date October 1, 2027
N/A
Provision of Operation Security On or before the Commercial Operation Date
$100/kW of for each kW
of Installed Capacity
(measured in kW);
provided, however:
(i) so long as the Seller
owns the Facility, or if the
Facility is transferred to an
Affiliate of Seller pursuant
to the terms of this
Agreement, the Operation
Security will be reduced to
$50/kW for each kW of
Installed Capacity
beginning on the first day
of the eleventh (11th)
Contract Year through the
end of the Term; provided
Exhibit U– 2
Milestone Expected Date for
Completion
Security Due
that, notwithstanding
anything contrary in this
Agreement, such Seller
Affiliate is a Qualified
Operator or has retained a
Qualified Operator, and
(ii) if the Facility is
transferred to a non-
Affiliate pursuant to the
terms of this Agreement,
the amount of the
Operation Security shall
remain at $100/kW for
each kW of Installed
Capacity for the entire
Delivery Term.
Exhibit V– 1
EXHIBIT V
INSURANCE EXCEPTION(S)
TO: Office of the City Attorney
FROM: Tracey L. Matthews
Risk Manager
RE: Roadhouse Energy Storage, LLC Energy Storage Agreement
SUBJECT: Approved Exceptions to the Insurance Requirements
Date: April 16, 2024
Roadhouse Energy St orage, LLC (“Roadhouse”) has requested the following exceptions to the City’s Minimum Insurance Requirements for the Roadhouse Energy Storage Agreement (“Agreement”):
1. Commercial Automobile Insurance Limit reduction from $2M per Occurrence to $1M per Occurrence.
2. Use of an insurer(s) with an A- A.M. Best Rating.
The risk analysis and review of the exception requests confirms that (1) Roadhouse is not going to operate a vehicle on behalf of the City of Anaheim (“Anaheim”) or on City of Anaheim property when carrying out the usual and customary terms of the subject Agreement; and (2) that the identified insurer meets financial security guidelines that are negligibly below an A+ rated carrier.
Neither exception request includes an appreciable exposure to any risk of probable harm to the City and are approved and accepted.
These exceptions are continuing provided that (1) Roadhouse remits to Anaheim insurance documentation on an annual basis (subject to cure under Section 11.1(a)(iv)) pursuant to the terms of this Agreement, and (2) Roadhouse does not begin operating a vehicle on behalf of Anaheim or on Anaheim property when carrying out the usual and customary terms of the Agreement without first notifying Anaheim of such intended operation. If Roadhouse begins such operation of a vehicle, Anaheim has the right to review and modify these exceptions with respect to the business auto insurance.