1 AGREEMENT
This Agreement (“Agreement”), dated by the Anaheim City Clerk on _____________________ (“Effective Date”), is made and entered into by and between the City of Anaheim, a municipal corporation (“Anaheim”), and Siemens Industry, Inc., a Delaware corporation (“Service Provider” or “Provider”). Anaheim and Provider are sometimes individually referred to as “Party” and collectively as “Parties.”
RECITALS
A. Anaheim is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Anaheim Charter.
B. Anaheim desires to engage Provider to provide wholesale energy risk management quantitative model review and development in the areas of power supply risk management, natural gas risk management and battery energy storage system (“BESS”) risk management to align with current industry best practices (“Project”).
C. Provider possesses the skill, experience, ability, licenses, certifications, and materials necessary to perform the Project services.
D. Anaheim has solicited and received a proposal from Provider and has evaluated Provider’s previous experience and expertise, and Anaheim desires to retain Provider to render the Project services under the terms and conditions set forth in this Agreement.
TERMS AND CONDITIONS
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. SERVICES TO BE PROVIDED
Provider shall provide to Anaheim all labor, materials, tools, equipment, services, systems, and incidental and customary work necessary for the Project (“Services”). The Services are more particularly described in the Scope of Services attached hereto as Exhibit A and incorporated herein by this reference (“Scope of Services”). On behalf of Anaheim, the Public Utilities General Manager (“General Manager”) or designee is authorized to add, modify, or delete tasks from the Scope of Services.
2. TERM
The term of this Agreement commences on the Effective Date and continues through its 2nd anniversary, unless earlier terminated per Section 25 (“Term”). Thereafter, the Term shall automatically extend for one (1) successive annual period on the anniversary of the Effective Date, for a total Term of three (3) years, unless Anaheim gives written notice of nonrenewal prior to expiration of the then-current Term. Each initial and successive annual period is referred to as “Term Year.”
2 3. TIME OF PERFORMANCE
3.1 Time is of the essence in the performance of this Agreement, and Provider shall perform and complete all Services in a diligent and timely manner. Provider’s failure to adhere to stated schedules, if any, may result in Anaheim’s election to terminate this Agreement.
3.2 The time period(s) specified for performance of the Services rendered, pursuant to this Agreement, shall be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of Provider, including, but not restricted to, acts of God or of the public enemy; unusually severe weather, fires, earthquakes, floods, pestilence, or other natural catastrophes; epidemics; quarantine restrictions; riots; strikes; freight embargoes; wars; litigation; civil disturbance or disobedience; labor dispute; labor or material shortage; sabotage; change in government priorities; restraint by court order or public authority; and action or non-action by or inability to obtain the necessary authorization or approvals from any governmental agency or authority, and/or acts of any governmental agency, including Anaheim, which by the exercise of due diligence such Party cannot reasonably be expected to avoid and by which exercise of due diligence has been unable to overcome, if Provider shall within ten (10) days of the commencement of such delay notify Anaheim’s project administrator (“Project Administrator”) in writing of the causes of the delay.
The Project Administrator shall ascertain the facts and the extent of delay and may extend the time for performing the Services for the period of the delay if, in the judgment of the Project Administrator, such delay is justified. The Project Administrator’s determination shall be final and conclusive upon the Parties. In the event of delay, however caused, Provider’s sole remedy shall be an extension of the Term, pursuant to this Section, and Provider shall not be entitled to recover damages against Anaheim.
4. COMPENSATION
4.1 Anaheim shall pay Provider for the Services satisfactorily completed pursuant to the unit prices/billing rates listed in Exhibit B, attached hereto and incorporated herein (“Schedule of Compensation”). No changes to the Schedule of Compensation’s unit prices/billing rates may be made without the prior written authorization of the General Manager or designee.
4.2 Anaheim shall reimburse Provider for only those costs or expenses specifically approved in writing in advance by the General Manager or designee.
4.3 Except as provided in Section 4.4 below, the Parties understand and agree that full and complete payment for all Services provided under this Agreement, including, but not limited to, all reimbursable expenses and subconsultant fees, if any, shall not exceed one hundred eighty-eight thousand, seven hundred fifty-four dollars and 00/100 cents ($188,754.00) (“Contract Amount”) for the Term of the Agreement. The Contract Amount does not constitute a guarantee of payment to 3 Provider but instead constitutes a spending option for Anaheim, as may be needed.
4.4 The General Manager is authorized to approve expenditures above the Contract Amount not to exceed fifteen percent (15%) of the Contract Amount for additional services (“Extra Services”) that the General Manager determines (a) are necessary for the successful completion of the Services, (b) can be paid for by available budget appropriations, and (c) are in Anaheim’s best interest to purchase.
4.4.1 In no event shall Provider render Extra Services without the written authorization of the General Manager or designee.
4.4.2 Extra Services shall be billed at either the unit prices/billing rates set forth in the Schedule of Compensation or at a fixed price, at the General Manager’s discretion. If billed at a fixed price, Provider shall provide Anaheim with a general description of the Extra Services to be performed with a proposed price.
4.4.3 Any approved Extra Services will be incorporated into the Services and the Agreement upon the Parties’ execution of a letter agreement (“Extra Services Letter”) that contains (a) the agreed price for the Extra Services and (b) a description of the Extra Services. Provider shall commence performance of the Extra Services either upon the Parties’ execution of the Extra Services Letter or such other time expressly indicated therein.
4.4.4 Other than the Extra Services that the General Manager or designee is authorized to approve pursuant to this Section 4.4, Provider shall not render additional services beyond the scope of this Agreement unless such services are first approved by a written amendment to this Agreement.
4.5 Provider shall submit invoices to Anaheim upon completion of the applicable task(s), describing the work performed and identifying the corresponding line items set forth in Exhibit B. The timing and frequency of invoices shall generally correspond to each task’s estimated completion schedule set forth in Exhibit B (“Task Estimated Completion Date(s)”), but may vary based on the actual completion of such task(s). Provider's invoices shall be based on the line items contained in Exhibit B. For items authorized in advance by Anaheim, for which Anaheim determines there is no line-item equivalent listed, Provider’s invoice shall include the name of the person who performed the work, a brief description of the Services performed and/or the specific task in the Scope of Services to which it relates, the date the Services were performed, the number of hours spent on work billed on an hourly basis, and a description of any reimbursable expenditures. Anaheim shall pay Provider no later than thirty (30) days after approval of the applicable invoice by Anaheim staff.
4 4.6 All Parties recognize that the continuation of this Agreement after the close of any fiscal year of Anaheim, which fiscal year ends on June 30 of each year, shall be subject to budget approval providing for or covering such contract items as an expenditure in said budget. Anaheim does not represent that said budget item will actually be adopted, said determination being the determination of the City Council at the time of the adoption of the budget. No penalty shall accrue to Anaheim in the event this provision shall be exercised. Should termination be accomplished in accordance with this Section, the Parties shall negotiate a settlement based on monies paid and due, items delivered, and Services provided.
5. PROJECT MANAGER
5.1 Provider designates Amanda Soto as its “Project Manager,” who shall coordinate the Services. This Project Manager shall be available to Anaheim at all reasonable times during the Term of this Agreement. It is expressly understood that the experience, knowledge, capability, and reputation of the foregoing Project Manager is a substantial inducement for Anaheim to enter into this Agreement.
Therefore, the foregoing Project Manager shall be responsible during the Term of this Agreement for directing all activities of Provider and devoting sufficient time to personally supervise the provision of Services hereunder. The Provider may not change the Project Manager without the General Manager or designee’s express written authorization.
5.2 Any personnel or subconsultant, if any, who fail or refuse to perform the Services in a manner acceptable to Anaheim or who are determined by Anaheim, in its sole discretion, to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, or a threat to the safety of persons or property, shall be promptly removed from the Project by Provider at the request of Anaheim.
Provider warrants that it will continuously furnish the necessary personnel to complete the Services on a timely basis as contemplated by this Agreement.
6. ADMINISTRATION
The Anaheim Public Utilities Department (“APU”) will administer this Agreement. The following APU employees are authorized to take the below actions pursuant to this Agreement:
• The General Manager is authorized to take any action on behalf of Anaheim as set forth herein and to terminate this Agreement in accordance with Section 25 below. • Anaheim designates Bryan Chu, Enterprise Risk Supervisor, as its “Project Administrator.” The General Manager or designee may change the Project Administrator at any time, and Anaheim will provide Provider written notice of such change as soon as is practical. The Project Administrator, or designee, shall have the power to act on behalf of Anaheim for ordering, reviewing, and approving all Services performed by Provider under this Agreement. The Project Administrator shall not be authorized to approve Extra Services, change unit prices/billing rates, or terminate Services under this Agreement.
5 7. STANDARD OF CARE
7.1 As a material inducement for Anaheim to enter this Agreement, Provider represents and warrants that it is a provider of first-class work and services and is experienced in performing the Services contemplated herein, and in light of such status and experience Provider covenants that it shall follow the highest professional standards in performing the work and Services required hereunder and that all work will be of good quality. Provider further warrants that all employees and subcontractors, if any, shall have sufficient skill and experience to perform the Services assigned to them. For purposes of this Agreement, the phrase “highest professional standards” shall mean those standards of practice recognized by one or more first-class firms performing similar work under similar circumstances.
7.2 Provider represents and warrants to Anaheim that it has, shall obtain, and shall keep in full force in effect during the Term hereof, at its sole cost and expense, all licenses, permits, qualifications, insurance, certifications, and approvals of whatsoever nature that is legally required of Provider to practice its profession, including any licenses and certifications, if any, listed in Exhibit A. Provider shall maintain a City of Anaheim business license during the Term.
7.3 At no cost to Anaheim, Provider shall re-perform any Services that Anaheim reasonably deems unsatisfactory.
8. FAMILIARITY WITH WORK
By executing this Agreement, Provider represents and warrants that Provider: (i) has thoroughly investigated and considered the Services to be performed; (ii) has carefully considered how the Services should be provided; and (iii) fully understands the facilities, difficulties, and restrictions attending the provision of the Services under this Agreement. Should Provider discover any latent or unknown conditions materially differing from those inherent in the provision of such Services or as represented by Anaheim, Provider shall immediately inform Anaheim of such fact and shall not proceed except at Provider’s risk until written instructions are received from Anaheim.
9. INDEPENDENT CONTRACTOR
9.1 Neither Anaheim nor any of its employees shall have any control over the manner, mode, or means by which Provider, its agents or employees, perform the Services, except as otherwise set forth herein. Except as expressly provided herein, Anaheim shall have no voice in the selection, discharge, supervision, or control of Provider’s employees, servants, representatives or agents, or in fixing their number, compensation, or hours of service. Provider shall perform all Services as an independent contractor of Anaheim and shall remain at all times, as to Anaheim, a wholly independent contractor with only such obligations as are consistent with that role. Provider shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of Anaheim. 6 Anaheim shall not in any way or for any purpose become or be deemed to be a partner of Provider in its business or otherwise or a joint venturer or a member of any joint enterprise with Provider.
9.2 In consideration for the compensation Anaheim pays to Provider, Provider agrees that Anaheim shall not be liable or responsible for any benefits, including, but not limited to, worker’s compensation, disability, retirement, life, unemployment, health, or any other benefits that Provider offers to its employees/agents, and Provider agrees that it shall not sue or file a claim, petition, or application therefor against Anaheim or any of its appointed or elected officials (together, “officials”), officers, employees, agents, representatives, or sureties.
10. INSURANCE
10.1 Without limiting Anaheim’s right to indemnification, it is agreed that Provider shall secure, prior to commencing any activities under this Agreement, and maintain, during the term of this Agreement, minimum limits of insurance coverage as follows:
10.1.1 Workers’ Compensation Insurance as required by California law and Employers Liability Insurance in an amount not less than $1,000,000. This coverage requires a Waiver of Subrogation Endorsement.
10.1.2 Commercial General Liability Insurance, including coverage for Premises and Operations, Contractual Liability, Personal Injury Liability, Products/Completed Operations Liability, as well as Independent Consultant’s Liability where appropriate, in an amount not less than $2,000,000 per occurrence, $4,000,000 annual aggregate. Such insurance shall be written on a primary basis but may include a deductible or self- insured retention of more than $10,000 per occurrence, provided that such deductible or self-insured retention is disclosed to Anaheim, in writing, prior to the inception of this Agreement. This coverage requires a Waiver of Subrogation Endorsement.
10.1.3 Commercial Automobile Liability Coverage as required by California law, including—as applicable—owned, non-owned, and hired autos, in an amount not less than $2,000,000 per occurrence, combined single limit.
This coverage requires a Waiver of Subrogation Endorsement.
10.1.4 Professional Liability Insurance, inclusive of Cyber Liability Insurance (where required), in an amount not less than $2,000,000. Such insurance shall be written on a primary basis but may include a deductible or self-insured retention of more than $10,000 per occurrence, provided that such deductible or self-insured retention is disclosed to Anaheim, in writing, at the inception of this Agreement.
7 10.2 Any required coverage written with primary and excess layers to satisfy the minimum requirements of this Agreement must be submitted for approval to Anaheim’s Risk Manager prior to the inception of the final Agreement.
10.3 Provider is responsible for the satisfaction of any applicable deductible or self- insured retention obligation.
10.4 Provider agrees that this insurance shall not be voluntarily cancelled by Provider or limited in scope or coverage by Provider until after thirty (30) days prior written notice has been 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.
10.5 Each insurance policy required by this Agreement, except policies for Professional Liability and Workers’ Compensation, shall contain the following clauses or shall otherwise provide for the following conditions:
10.5.1 “It is agreed that any insurance maintained by Provider, pursuant to this Agreement shall be primary to, and not contribute with, any insurance or self-insurance maintained by the City of Anaheim.”
10.5.2 “The City of Anaheim, its officers, agents, employees, representatives and volunteers are included as additional insureds with respect to the scope of work, operations and/or activities of or performed on behalf of or at the direction of the Named Insured, performed under this Agreement with the City of Anaheim.”
10.6 Prior to commencing any work under this Agreement, Provider shall deliver to Anaheim insurance certificates confirming the existence of the insurance required under this Agreement, and including the applicable clauses referenced above.
Also, within thirty (30) days of the execution date of this Agreement, Provider shall provide Anaheim (i) endorsements to the insurance policies that add to these policies the applicable clauses referenced above, or (ii) in lieu of said endorsements, documentation acceptable to Anaheim evidencing that the coverage, terms, and conditions set forth in the above-referenced clauses are otherwise included in said insurance policies. Insurance required hereunder shall be placed with insurers (i) admitted to write insurance in California, (ii) possessing an A. M. Best’s rating of A VII or higher, or (iii) otherwise acceptable to Anaheim, with prior written permission from Anaheim. In the event that a claim or other legal action is filed against Anaheim, and if Anaheim, in its good faith opinion, believes it may have coverage under any of the insurance required herein, then Anaheim has the right to demand, and to receive within a reasonable time period, copies of the insurance policies related to such required insurance; provided, however, that this provision shall not apply if the Parties agree that Provider shall fully defend, hold harmless, and indemnify Anaheim against any such claim or other legal action.
8 10.7 In addition to other remedies Anaheim may have if Provider fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time required, Anaheim may, at its sole option:
1. Order Provider to stop work under this Agreement and/or withhold any payment(s) that become due to Provider hereunder until Provider demonstrates compliance with the requirements hereof; or
2. Terminate this Agreement.
Exercise of any of the above remedies, however, is an alternative to other remedies Anaheim may have and is not the exclusive remedy for Provider’s failure to maintain insurance or secure appropriate endorsements.
10.8 Nothing herein contained shall be construed in any way as limiting the extent that a Provider may be held responsible for payments of damages to persons or property resulting from Provider’s (or Provider’s Agent or Sub-Agent, if any) performance of the work covered under this Agreement.
10.9 In the event Provider hires other persons or firms to perform some of the work related to this Agreement, Provider 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 Provider 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, Provider shall provide, or cause to be provided, evidence of such insurance coverage, reasonably acceptable to Anaheim.
10.10 Anaheim’s Risk Manager is hereby authorized to amend or reduce the requirements set forth herein if such customer-generated requested amendment or reduction request is in Anaheim’s best interest.
11. INDEMNIFICATION
11.1 As respects acts, errors or omissions in the performance of professional services, Provider agrees to indemnify and hold harmless Anaheim, its officials, officers, and employees from and against any and all claims, losses, damages, defense costs, or liability, of any kind or nature, directly arising out of the negligent acts, errors or omissions of the Provider or any Sub-Agent in the performance of professional services under this Agreement.
11.2 As respects 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, Provider agrees to indemnify, defend (at Anaheim's option), and hold harmless Anaheim, its officials, officers, employees, agents, and representatives from and against any and all claims, losses, damages, defense costs, or liability, of 9 any kind or nature (collectively referred to hereinafter as “Claims”), arising out of or in connection with Provider’s (or Provider’s Agent or Sub-Agent, if any) acts, errors, omissions, or work, relative to this Agreement, except for those Claims that arise out of the sole negligence or willful misconduct of Anaheim.
11.3 The obligations set forth in this indemnification provision (i) shall be in effect without regard to whether or not Anaheim, Provider or any other person maintains or fails to maintain insurance coverage or a self-insurance program, for any such Claims; and (ii) shall survive the termination of this Agreement.
12. INTELLECTUAL PROPERTY
12.1 Provider shall, at its sole expense, defend, indemnify, and hold harmless Anaheim, its officials, officers, employees, and agents from and against any claims, liabilities, damages, losses, and expenses (including reasonable attorneys’ fees and costs) arising from infringement or alleged infringement of any U.S. patent, trademark, copyright, or other intellectual property rights related to any work product, materials, or documents (collectively, “work product”) provided by Provider to Anaheim under this Agreement. This indemnity obligation includes any claims that may arise out of or are related to Provider’s use of third- party intellectual property in connection with the performance of this Agreement.
This indemnity excludes claims resulting solely from Anaheim’s unauthorized modification or misuse of work product.
12.2 In the event of any indemnifiable claim under Section 12.1, Provider shall, at its expense and option, (a) secure for Anaheim the right to continue using the work product, (b) modify the work product to be non-infringing while maintaining equivalent functionality, or (c) replace the work product with a non-infringing alternative that provides equivalent functionality.
13. EXCLUDED DAMAGES
Unless otherwise expressly stated herein, each Party’s maximum liability (and sole remedy against the other) for any loss or damage arising from performance or non-performance under this Agreement shall be limited to proven direct, actual damages. Neither Party shall be liable to the other for any indirect, punitive, incidental, reliance, special, or consequential damages, whether or not such Party had been advised of the possibility of such damages.
14. PERFORMANCE OF SERVICES
14.1 Provider is responsible for keeping the Project Administrator or designee informed on a regular basis regarding the status and progress of the Services, activities performed and planned, and any meetings that have been scheduled or are desired.
14.2 In performing the Services, Provider agrees to work closely and cooperate fully with the Project Administrator and such other employees, consultants, or contractors of Anaheim, whom Anaheim has assigned to the Project. 10 15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
The Parties recognize that a substantial inducement to Anaheim for entering into this Agreement is the professional reputation, experience, and competence of Provider. Provider has no right to assign, transfer, delegate, or otherwise encumber (together “Assignment”) any rights, obligations, duties, interests, or privileges in or arising out of this Agreement, including as a result of a merger, acquisition, consolidation, or other form of corporate assimilation, without the prior written consent of Anaheim. Any such purported Assignment without Anaheim’s prior consent shall be void as to Anaheim. If Anaheim approves an Assignment, this Agreement and the covenants and conditions contained herein shall be binding upon and inure to the benefit of and shall apply to the permitted successors and assigns of Provider.
16. SUBCONTRACTING
Except for those subcontractors set forth in the Scope of Services, if any, Provider shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of Anaheim. Provider shall be fully responsible to Anaheim for all acts and omissions of any subcontractor. Nothing in this Agreement shall create any contractual relationship between Anaheim and the subcontractor, nor shall it create any obligation on the part of Anaheim to pay or ensure the payment of any monies due to any such subcontractor other than as otherwise required by law. Anaheim is an intended beneficiary of any work performed by any subcontractor for purposes of establishing a duty of care between the subcontractor and Anaheim pursuant to this Agreement.
17. USE AND OWNERSHIP OF DOCUMENTS AND DATA
17.1 Anaheim shall furnish to Provider such documents, data, and materials as may be relevant and pertinent to the provision of Services hereunder as Anaheim may possess or acquire.
17.2 All documents, data, and written materials furnished by Anaheim to Provider pursuant to Section 17.1 shall remain the property of Anaheim and shall be returned to Anaheim upon termination of this Agreement, for any reason. All documents, data, or written material prepared or caused to be prepared by Provider, its officers, employees, agents, and subcontractors in the course of implementing this Agreement shall become the exclusive property of Anaheim, and Anaheim shall have the sole right to use such materials in its discretion without further compensation to Provider or any other party. Provider shall, at Provider’s sole cost and expense, provide such documents, data, and material to Anaheim upon prior written request.
18. CONFIDENTIALITY
18.1 “Confidential Information” means, with respect to a Party hereto, all information or material that are either (1) marked or identified as “Confidential,” “Restricted,” or “Proprietary,” or other similar marking or identification, or (2) the Receiving Party knew, or under the circumstances should have known, was considered confidential or proprietary by the Disclosing Party. Confidential 11 Information shall consist of all information, whether in written, oral, electronic, digital, or other form that was furnished in connection with this Agreement by the Disclosing Party or its Representatives (“Representative” is defined as any elected or appointed official, affiliate, director, officer, employee, agent, advisor, or consultant of a Party or any of its subsidiaries or affiliates) to the Receiving Party or to its Representatives and specifically includes, but is not limited to, Anaheim’s individually identifiable customer information and Anaheim’s customer usage data and financial data. The term Confidential Information shall not include any of the following: (1) information already in possession of, or already known to, the Receiving Party as of the Effective Date without an obligation of confidentiality; (2) information in the public domain at the time of the disclosure, or which, after such disclosure, enters into the public domain through no breach of this Agreement by the Receiving Party or its Representative(s); (3) information lawfully furnished or disclosed to the Receiving Party by a non-party to this Agreement without any obligation of confidentiality and through no breach of this Agreement by the Receiving Party or its Representative(s); (4) information independently developed by the Receiving Party without use of any Confidential Information of the Disclosing Party; or (5) information authorized in writing by the Disclosing Party to be released from the confidentiality obligations herein.
18.2 Provider and Anaheim shall each hold the other’s Confidential Information in confidence. Neither Party shall make the other’s Confidential Information available in any form to any third party or use the other’s Confidential Information for any purpose other than to perform this Agreement. The Party providing Confidential Information (“Disclosing Party”) to the other Party (“Receiving Party”) shall remain the sole owner of such information. Except as provided elsewhere within this Agreement, nothing contained in this Agreement shall be construed as granting or conferring any right or license in any Confidential Information or in any patents, copyrights, software, or other technology, either expressly or by implication to the Receiving Party, its Representatives, or to others.
18.3 By virtue of this Agreement, each Party hereto may disclose to the other Party information that is Confidential Information. This Agreement does not diminish, revoke, or supersede any existing confidentiality, non-disclosure, or similar agreement between the Parties that does not pertain to the subject matter of this Agreement. However, any Confidential Information, whether or not previously disclosed, that pertains to the subject matter of this Agreement shall be governed by the terms of this Section 18, which shall supersede any less-restrictive provisions of such previous agreement with respect to such Confidential Information. Any Confidential Information relating to the subject matter of this Agreement that was exchanged under such previous agreement shall be treated as though it were exchanged under this Agreement as of the date of such exchange.
18.4 The Receiving Party will treat all Confidential Information of the Disclosing Party as confidential and proprietary, and the Receiving Party shall only use such 12 information in furtherance of this Agreement. As such, the Receiving Party shall hold in confidence the Confidential Information of the Disclosing Party and ensure that such Confidential Information is not disclosed to any other person or entity, except as expressly permitted by this Agreement or as authorized in writing by the Disclosing Party. Receiving Party shall not disclose Confidential Information of the Disclosing Party received under this Agreement to any person other than its Representatives who require knowledge of such Confidential Information in furtherance of this Agreement. The Receiving Party shall inform its Representatives of the confidential nature of the Confidential Information of the Disclosing Party and advise such Representatives of the limitations on the use and disclosure and prohibition on making copies or summaries of such Confidential Information. The Receiving Party shall be responsible for any breach of this Agreement by its Representatives. Neither Party shall use the Confidential Information of the other Party for any commercial purpose.
18.5 If the Receiving Party becomes legally compelled (by oral questions, interrogatories, request for information or documents, subpoena, civil investigative demand, or similar process) to disclose any Confidential Information of the Disclosing Party or is requested Confidential Information pursuant to the California Public Records Act or similar law, the Receiving Party will provide the Disclosing Party with written notice of such an occurrence (if so permitted) as soon as possible, but in no event later than five (5) days after knowledge of Provider’s obligation to such requirement. Thereafter, at its sole costs and expense, the Disclosing Party may seek a protective order or other appropriate remedy or waive compliance with the provisions of this Agreement. So long as it is consistent with applicable law, the Receiving Party will not oppose action by, and the Receiving Party will cooperate with, the Disclosing Party, at the Disclosing Party’s sole cost and expense, to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information. If the Disclosing Party fails to obtain such protective order or other remedy, or if the Disclosing Party waives compliance with the requirements of the preceding sentence, the Receiving Party will disclose only that Confidential Information that it is legally required to disclose and will exercise commercially reasonable efforts, at Disclosing Party’s expense, to obtain reliable assurance that confidential treatment will be accorded the Confidential Information so disclosed.
18.6 In the event the Receiving Party discloses, disseminates, or releases any Confidential Information, except as expressly permitted by this Agreement, such disclosure, dissemination, or release will be deemed a material breach of this Agreement, and the Disclosing Party may demand prompt return of all Confidential Information previously provided to the Receiving Party. As soon as the Receiving Party becomes aware that it has made an unauthorized disclosure of Confidential Information, the Receiving Party shall take any and all necessary actions to recover the improperly disclosed Confidential Information and immediately notify Disclosing Party regarding the nature of the unauthorized disclosure and the corrective measures being taken. Each Party agrees that any 13 breach of their confidentiality obligations could cause irreparable harm to the other Party, the amount of which would be extremely difficult to estimate.
Accordingly, it is understood and agreed that monetary damages would not be a sufficient remedy for any material breach of this Agreement and that specific performance and injunctive relief in addition to monetary damages shall be appropriate remedies for any breach or any threat of such breach. The provisions of this Paragraph are in addition to any other legal rights or remedies the Disclosing Party may have.
18.7 Within two (2) weeks of the termination of this Agreement, Provider will return to Anaheim or destroy, to the extent permitted by law, any and all Confidential Information, including all originals, copies, translations, transcriptions, or any other form of said material without retaining any copy or duplicate thereof; provided that Provider may retain Confidential Information contained on backup media created in the ordinary course of business; provided further that there is no effort to access such Confidential Information, and Provider’s confidential obligations with respect to such information shall continue so long as such information is retained. Provider shall certify in writing the destruction of the Confidential Information. Anaheim may perform an audit of Provider’s records to confirm the return or destruction of the Confidential Information. Anaheim shall have this audit right for three (3) years after the termination of this Agreement.
18.8 Notwithstanding the termination of this Agreement, this Confidentiality Section shall survive the expiration or earlier termination of this Agreement.
19. FISCAL RECORDS AND AUDIT
19.1 Provider shall keep records and invoices in connection with the Services. Provider shall use recognized accounting methods in preparing such reports and invoices.
Anaheim reserves the right to designate its own employee representative(s) or its contracted representative(s) with a certified public accounting firm, who shall have the right to audit Provider’s accounting procedures and internal controls of Provider’s financial systems and to examine any cost, revenue, payment, claim, record, or supporting documentation resulting from any item set forth in this Agreement. If Provider fails to provide supporting documentation satisfactory to Anaheim for costs charged, then Provider agrees to reimburse Anaheim for those costs. Any such audit(s) shall be undertaken by Anaheim or its representative(s) at reasonable times and in conformance with generally accepted auditing standards.
Provider agrees to fully cooperate with any such audit(s).
19.2 This right to audit shall extend during the length of this Agreement and for a period of three (3) years, or longer if required by law, following the date of final payment under this Agreement. Provider agrees to retain all necessary records/documentation for the entire length of this audit period.
19.3 Provider will be notified in writing of any exception taken as a result of an audit.
Any adjustments and/or payments that must be made as a result of any such audit 14 or inspection of Provider’s invoices and/or records shall be made within thirty (30) days from presentation of Anaheim’s findings to Provider. If Provider fails to make such payment, Provider agrees to pay interest, accruing monthly, at a rate of ten percent (10%) per annum unless another section of this Agreement specifies a higher rate of interest, which higher rate would then prevail. Interest will be computed from the date of written notification of exception(s) to the date Provider reimburses Anaheim for any exception(s). If an audit inspection or examination in accordance with this article discloses overcharges (of any nature) by Provider to Anaheim in excess of one percent (1%) of the value of that portion of the Agreement that was audited, the actual cost of Anaheim’s audit shall be reimbursed to Anaheim by Provider.
20. WITHHOLDINGS
Anaheim may withhold payment to Provider of any disputed sums until satisfaction of the dispute with respect to such payment. Such withholding shall not be deemed to constitute a failure to pay according to the terms of this Agreement. Provider shall not discontinue the Services as a result of such withholding. Provider shall have an immediate right to appeal to the City Manager or designee with respect to such disputed sums, and his decision shall be final.
Provider shall be entitled to receive interest on any withheld sums at the rate of return that Anaheim earned on its investments during the time period, from the date of withholding of any amounts found to have been improperly withheld.
21. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional inexperience of Provider that result in expense to Anaheim greater than what would have resulted if there were not errors or omissions in the Services performed by Provider, the additional cost and expense shall be borne by Provider. Nothing in this paragraph is intended to limit Anaheim’s rights under the law or any other sections of this Agreement.
22. ANAHEIM’S RIGHT TO EMPLOY OTHERS
Provider acknowledges and agrees that this Agreement and the provision of services hereunder are nonexclusive and that Anaheim may enter into similar agreements with other entities for the provision of similar services.
23. CONFLICTS OF INTEREST
23.1 Provider or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the “Act”), which (1) requires such persons to disclose any financial interest that may foreseeably be materially affected by the Services performed under this Agreement and (2) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, Provider shall conform to all other requirements of the Act that may be applicable. Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by Anaheim.
15 23.2 Provider’s Services under this Agreement may now or in the future involve participation in governmental decision-making processes such that Anaheim deems it necessary to designate one or more of Provider’s employees a filer of a Statement of Economic Interests (“Form 700 Filer”) under the Act. Anaheim shall make such designations based on the nature and scope of the Services and requirements of the Act. If Provider’s employee(s) is designated a Form 700 Filer, such employee(s) shall file under Disclosure Category 1, unless otherwise directed by Anaheim, and shall periodically complete ethics training as required by Anaheim. Provider shall at its own cost and expense ensure such employee’s compliance with these filing and ethics-training requirements.
23.3 Provider shall indemnify and hold harmless Anaheim for any and all claims for damages resulting from Provider’s violation of this Section.
24. NOTICES
Any notice or demand to be made under this Agreement shall be in writing and shall be deemed effective when: (1) delivered personally, upon receipt or refusal of receipt by the receiving Party; (2) sent by registered or certified mail, return receipt requested, postage prepaid, on the date shown on the return receipt or the date of refusal of receipt; or (3) sent by recognized overnight courier service, delivery fees prepaid, the business day following deposit with the courier.
Notices shall be addressed to the Parties at the following addresses:
If to Anaheim: Anaheim City Clerk
City of Anaheim
200 S. Anaheim Boulevard, 2nd Floor
Anaheim, California 92805
With copies to: Public Utilities General Manager
City of Anaheim
201 S. Anaheim Blvd., Suite 1101
Anaheim, CA 92805
If to Provider: Siemens Industry, Inc.
Attn: Bernardo Fernandes
400 State Street
Schenectady, NY 12305
Each Party may change its address for notice by providing written notice to the other in accordance with this Section.
25. EARLY TERMINATION
25.1 “Default” shall mean the failure of Provider to perform any of Provider’s duties or obligations or the breach by Provider of any of the terms and conditions set forth in this Agreement. In addition, Provider shall be deemed to be in Default upon Provider’s (i) application for, consent to, or suffering of, the appointment of 16 a receiver, trustee, or liquidator for all or a substantial portion of its assets; (ii) making a general assignment for the benefit of creditors; (iii) being adjudged bankrupt; (iv) filing a voluntary petition or suffering an involuntary petition under any bankruptcy, arrangement, reorganization, or insolvency law (unless in the case of an involuntary petition, the same is dismissed within thirty (30) days of such filing); or (v) suffering or permitting to continue unstayed and in effect for fifteen (15) consecutive days any attachment, levy, execution, or seizure of all or a substantial portion of Provider’s assets or of Provider’s interests hereunder.
25.2 Anaheim shall not be deemed to be in default in the performance of any obligation required to be performed by Anaheim hereunder unless and until Anaheim has failed to perform such obligation for a period of thirty (30) days after receipt of written notice from Provider specifying in reasonable detail the nature and extent of any such failure; provided, however, that if the nature of Anaheim’s obligation is such that more than thirty (30) days are required for its performance, then Anaheim shall not be deemed to be in default if Anaheim shall commence to cure such performance within such thirty (30) day period and thereafter diligently prosecute the same to completion.
25.3 In the event of any Default, Anaheim may immediately terminate this Agreement.
Such termination shall be effective immediately upon receipt by Provider of written notice from Anaheim. In such event, Provider shall have no further rights hereunder, and Anaheim shall have all other rights and remedies as provided by law.
25.4 Anaheim may terminate this Agreement at any time without the necessity of cause or Default by giving seven (7) days’ notice in writing to Provider. In such event, the Parties shall have no further rights hereunder, except that Provider shall be paid for all services adequately rendered prior to such termination. Provider may not terminate this Agreement except for cause.
25.5 Anaheim may suspend or abandon the Services for any reason with or without notice. If any part of the Project is suspended or abandoned for any reason, Anaheim shall have the right to suspend or terminate the affected portion(s) of this Agreement, including any part of the Services. In the event of such suspension or termination, Provider shall only expend such additional time as is necessary to assemble the Services in progress for the purpose of properly filing and closing the job and as is previously approved by Project Administrator. In no event shall additional time exceed ten percent (10%) of the total time expended on the suspended or abandoned portion of the Services prior to the date of notice of suspension or termination. In the event the Services are suspended for longer than six (6) months, Provider may terminate this Agreement as it applies to the suspended portion of the Project by giving Anaheim at least thirty (30) days’ written notice.
25.6 Provider shall not be relieved of liability to Anaheim for damages sustained by Anaheim by virtue of any breach of Agreement by Provider, and Anaheim may 17 withhold any payments to Provider for the purpose of set-off until such time as the exact amount of damages due Anaheim from Provider is determined. In addition, Anaheim may pursue all remedies available under law for breach of this Agreement. The waiver by either Party of any breach to this Agreement shall not constitute a waiver as to any succeeding breach.
26. COMPLIANCE WITH ALL LAWS
Provider shall at its own cost and expense comply with all statutes, ordinances, regulations, and requirements of all governmental entities, including federal, state, county, or municipal, whether now in force or hereinafter enacted. In addition, all work prepared by Provider shall conform to applicable local, county, state, and federal laws, rules, regulations, and permit requirements and be subject to approval of the Project Administrator.
27. WAIVER
No failure or delay by either Party in exercising any right under this Agreement shall constitute a waiver of that right, nor shall any waiver of a breach or default be deemed a waiver of any subsequent breach or default. Any waiver must be in writing and signed by the waiving Party.
28. INTEGRATED CONTRACT
This Agreement and its Exhibits hereto, if any, contain the entire agreement between the Parties with respect to the matters covered hereby, and no agreement, statement, or promise made by either Anaheim or Provider that is not contained herein shall be valid or binding. No prior agreement, understanding, or representation pertaining to any the matters covered hereby shall be effective for any purpose.
29. CONFLICTS OR INCONSISTENCIES
In the event there are any conflicts or inconsistencies between this Agreement and its Exhibits or any other attachments hereto, if any, the terms of this Agreement shall govern.
30. INTERPRETATION
Each Party acknowledges that he/she/it has had the benefit of advice of competent legal counsel with respect to its decision to enter this Agreement. The provisions of this Agreement shall be interpreted to give effect to their fair meaning and shall be construed as prepared by both Parties.
31. AMENDMENTS
This Agreement may be modified or amended only by a written document executed by both Parties and approved as to form by the Anaheim City Attorney’s Office.
32. SEVERABILITY
If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be held invalid or unenforceable, the remainder of this 18 Agreement or the application of its terms and provisions to persons and circumstances other than those to which it has been held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
33. REMEDIES CUMULATIVE
The remedies given to Anaheim and Provider herein shall be cumulative and are given without impairing any other rights given Anaheim or Provider by statute or law now existing or hereafter enacted, and the exercise of any one remedy by Anaheim or Provider shall not exclude the exercise of any other remedy.
34. NO THIRD-PARTY BENEFICIARIES
The Parties intend that neither rights nor remedies be granted to any third party as a beneficiary of this Agreement or of any covenant, duty, obligation, or undertaking established herein.
35. CONTROLLING LAW AND VENUE
This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to conflict of laws principles. Any legal action or proceeding arising under or related to this Agreement shall be brought exclusively in a court located in Orange County, California. The Parties irrevocably consent to the jurisdiction of such court and waive any objection to venue or forum based on inconvenience or any other grounds.
36. DISCRIMINATION
Provider agrees not to discriminate against any person or class of persons by reason of sex, color, race, creed, religion, marital status, handicap, ancestry, national origin, or other prohibited basis in its provision of Services or hiring of subcontractors or employees. To the extent this Agreement provides that Provider offer accommodations or services to the public, such accommodations or services shall be offered by Provider to the public on fair and reasonable terms.
37. SIGNATURE & DATE AUTHORITY
37.1 Each Party and each Party’s signatory represents and warrants that each is duly authorized to execute and deliver this Agreement on behalf of such Party and that this Agreement is binding upon such Party in accordance with its terms. Upon Anaheim’s request, Provider shall deliver a certified copy of its governing board’s resolution or certificate authorizing or evidencing such execution.
37.2 Anaheim shall have the authority to fill in the date field opposite the Provider’s signature if Provider fails to write a date.
19 38. HEADINGS
The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
39. COUNTERPARTS AND ELECTRONIC SIGNATURE
This Agreement may be executed in counterparts, each deemed an original and together constituting one instrument. Digital signatures obtained through DocuSign shall be considered valid and binding as though signed in ink.
[SIGNATURES ON FOLLOWING PAGE]
A-1
EXHIBIT A
SCOPE OF SERVICES
A. Provider shall perform the following three main tasks:
1. Power Supply Risk Management – Independent Validation
a. Provider shall perform a full technical and strategic validation of APU’s existing cash-flow-at-risk (“CFaR”) framework, including its linkage to the production cost model, annual refresh process, and monthly actual-vs-expected risk reporting.
Provider’s team shall review model structure, Monte Carlo design, volatility and correlation assumptions, distributions, and confidence-interval calculations (5%/95%), then benchmark them against leading utility practices and rating- agency expectations, deliver a calibrated CFaR methodology, parameter set, and documentation that APU staff can independently update each year, along with practical recommendations on reporting, governance, and use of CFaR in planning and Board-level risk oversight.
b. Provider shall develop a durable internal tool to validating utility CFaR/ production-cost–linked risk frameworks and the ability to explain quantitative changes in clear business language for public-power governance.
2. Natural Gas Risk Management – Program and Model Validation/Development
a. Provider shall review APU’s draft gas risk management design—philosophy, volume targets, time-driven and price-driven hedges, and risk reporting—and test it against Western gas market liquidity, basis behavior, and APU’s specific burn and transport profile.
b. Provider shall build a quantitative gas risk model that links minimum and variable burn requirements, pipeline and storage constraints, and hedge structures to clear risk metrics (e.g., P&L distributions, stress-test outcomes such as extreme weather and supply disruptions) and reporting, explicitly incorporating daily variability, market liquidity, and extreme event scenarios such as peak summer/winter demand or supply disruptions. The end state shall be a coherent gas risk framework that connects physical operations, hedging strategies, and clearly defined risk metrics.
3. Battery Energy Storage System (BESS) Risk Management – New Program Development
a. Provider shall develop a dedicated BESS risk management model and program that integrates seamlessly with the Wholesale ERM framework. Provider’s solution shall include BESS-specific Value-at-Risk (“VaR”)/revenue-at-risk analytics, degradation and cycling models, warranty and operating limit constraints, and representations of arbitrage and ancillary services value under
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energy price volatility, all delivered as both mathematical models and narrative program documentation that APU staff can maintain.
b. Provider shall design BESS risk metrics and reports that align with those used for generation and hedging so management can compare and govern risks across the full portfolio on a consistent basis.
B. Services to be provided across all three main tasks:
1. Integrated ERM and governance design so power, gas, and BESS models operate under a coherent risk policy and process.
2. Transparent documentation, code/logic walkthroughs, and staff training to ensure APU owns the enhanced ERM tools.
3. Practical, implementation-ready recommendations that recognize APU’s municipal context, CAISO participation, and internal resource constraints, ensuring the enhanced Wholesale ERM program is both technically robust and sustainable over the life of the contract.
C. Project Phases and Timeline
1. Phase 1 - Mobilization and diagnostic (Task Estimated Completion Date – 1 month from the date the project is expected to commence “Project Start Date”) a. Provider shall confirm scope, success criteria, schedule, and key interfaces; inventory existing models, data flows, policies, and reports for power, gas, and planned BESS.
b. Provider shall conduct structured workshops with the following APU Divisions: Integrated Resources, Risk Management, Trading/ Operations, and Accounting—to understand how current CFaR and gas risk concepts are used today, where pain points exist, and what questions management needs the models to answer.
c. Early in this phase, Provider shall define “target-state” risk metrics (e.g., CFaR horizons, VaR levels, stress cases, board reporting needs) so model enhancements are tied to clear business use cases rather than purely academic improvements.
2. Phase 2 - Power supply CFaR validation and enhancement (Task Estimated Completion Date – 3 months from Project Start Date)
a. Model review: Provider shall evaluate the current CFaR structure, input data (production cost output, price/load distributions), Monte Carlo engine, correlation assumptions, and confidence-interval construction.
Provider shall test statistical properties (e.g., stability, reasonableness of tails) and reconcile historical back-tests where possible. b. Benchmarking and redesign: Provider shall compare APU’s approach to leading public-power and IOU practices, then recommend targeted enhancements—e.g., refined price–load correlations, updated volatility, improved scenario design, or clearer separation of controllable vs. uncontrollable risk drivers.
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c. Implementation: Provider shall prototype changes in a transparent environment (e.g., Excel or APU’s existing tools), validate results with APU staff, then transition the agreed-upon methodology into production form with clear step-by-step procedures for annual refresh and monthly performance updates.
d. Governance and reporting: Provider shall define how CFaR is reviewed, who owns parameter updates, and how results are communicated to executives and governing bodies, including standard risk dashboards and narrative commentary.
3. Phase 3 - Natural gas risk management program and model (Task Estimated Completion Date – 3 months from Project Start Date)
a. Program review: Provider shall assess APU’s draft gas risk framework— hedging philosophy, volume targets, tenor buckets, time-vs. price-driven triggers, and reporting—against Western gas market liquidity, basis behavior, and pipeline/storage constraints.
b. Portfolio and constraint analysis: Provider shall map APU’s minimum and variable burn, contract portfolio, pipeline rights, storage (if any), and CAISO interactions to identify where price and volumetric risks actually arise.
c. Model development: Provider shall build a gas risk engine that:
a. Simulates daily demand and price paths;
b. Reflects pipeline and deliverability constraints;
c. Captures hedge positions (physical and financial); and d. Produces intuitive risk outputs (e.g., P&L distributions, stress- scenario losses for extreme weather or supply disruptions). d. Program integration: Provider shall translate model outputs into clear limits, triggers, and decision rules (e.g., how and when to layer hedges, manage shoulder-season exposure, or respond to stress-case signals).
Provider shall deliver a concise gas risk “playbook” describing how front-, middle-, and back-office functions use the model in normal and stressed conditions.
4. Phase 4 – BESS risk management design and integration (Task Estimated Completion Date – 9 months from Project Start Date)
a. Use-case definition: Provider shall work with APU to clarify expected BESS roles (arbitrage, reserves, RA, local reliability), contract structures, warranties, and operational constraints.
b. Model design: Provider shall develop BESS risk models that quantify:
a. Revenue-at-risk under price volatility and different dispatch strategies;
b. Degradation and cycling limits, warranty constraints, and life-cycle cost implications; and
c. Operational constraints (state-of-charge limits, round-trip efficiency, network constraints).
c. ERM integration: Provider shall embed BESS metrics into the same risk “language” as power supply and gas (e.g., VaR/CFaR contributions,
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stress-test impacts), so management can compare and allocate risk limits across asset classes on a consistent basis.
5. Phase 5 – Governance, documentation, and knowledge transfer (Task Estimated Completion Date – 12 months from Project Start Date)
a. Provider shall produce clear technical documentation (model logic, data requirements, parameter sets, and change-control procedures) and non- technical summaries for leadership.
b. Provider shall conduct training sessions and hands-on walkthroughs so APU staff can run the models, adjust scenarios and parameters, troubleshoot issues, and explain results without external support. c. Provider shall help formalize governance—roles, responsibilities, model- review cadence, and approval workflows—so updates and enhancements follow a disciplined process.
B-1
EXHIBIT B
SCHEDULE OF COMPENSATION
Contract Amount shall not exceed $188,754 for the Term of the Agreement.
Line Item Description Unit Cost
1 Cost to perform and complete
Task 1: Power Supply Risk
Management Independent
Validation
$62,918.00
2 Cost to perform and complete
Task 2: Natural Gas Risk
Management Validation
$62,918.00
3 Cost to perform and complete
Task 3: Battery Energy
Storage System (BESS) Risk
Management
$62,918.00
Grand Total: $188,754