Staff Report Item 15
Staff Report Item 15
To: Ava Community Energy Authority
From: JP Ross, Vice President Local Development
Subject: Resolution of the Board of Directors of Ava Community Energy Authority to;
1) Authorize the CEO to negotiate and execute Power Purchase Agreements with each of the Cities participating in the Program Ava to sell solar energy generation and energy services. 2) Authorize the CEO to negotiate and execute an Engineering, Procurement and Construction agreement with McMillan Electric for construction of projects for Ava’s Resilient Critical Municipal Facilities Program.
3) Approve Ava to use $8,000,000 from the previously approved Local Development budget for solar and storage incentives, construction capital, and operations & maintenance related services for Critical Municipal Facilities projects
Date: May 21, 2025
__________________________________________________________________ Summary/Recommendation
Adopt resolutions authorizing the CEO to negotiate and execute an Engineering, Procurement and Construction Agreement (“EPCA”) with McMillan Electric and Power Purchase Agreements (“PPAs”) with four Cities to deliver solar energy and resilience services to Cities participating in the Critical Municipal Facilities Program (“Program”). In addition, provide authorization for Ava to use previously approved Local Development Staff Report Item 15
funding to fund construction and provide incentives for participating solar and storage projects.
Financial Impact
This Program will utilize previously allocated Local Development funding to capitalize the construction of the projects and provide incentives to the participating Cities. Ava will identify downside risk scenarios as described below. The PPA with Cities will pay back project development costs over time. Ava will allocate $8,000,000 from the Local Development budget to fund incentives and the construction of these projects Analysis and Context
The Resilient Municipal Critical Facilities Program (“Program”) resulted from a desire by Ava to reduce barriers to solar and solar + storage deployments for local governments in our territory. Local governments often do not have the available staff time, financial resources, or technical expertise to advance these types of projects and may have relatively small facilities with commensurately small projects that cannot take advantage of bulk purchasing. Similarly, solar and storage contractors face high customer acquisition and initial project development costs, which are relatively higher for smaller facilities that cannot support larger solar deployments.
The solar and solar + storage systems are intended to be designed and operated with the following benefits in mind:
1. Provide resiliency back-up for critical loads in the event of grid outages for sites with battery storage.
2. Reduce customer energy bills through Time-of-Use (TOU) energy and demand charge reductions.
3. Provide an energy price hedge for City electricity bills
4. Manage battery discharge during TOU periods to reduce both customer bills and Ava wholesale energy procurement requirements (i.e., resource adequacy capacity requirements).
5. Reducing reliance on existing diesel-powered generators, minimizing CO2 equivalent emissions.
Summary of Previous work on Program
Ava has been working to develop these projects over several years through a third-party asset ownership model. The following is a list of activities completed to deliver these projects that have been described in previous Board documents:
- Evaluation of City facilities for participation in the Program - City Council Resolutions to participate in the Program - Ava Development of standard Power Purchase Agreement to be signed with participating Cities
- 2022 Request for Offers, Selection of Sunwealth as PPA counterparty - 2023 NEM2.0 Interconnection applications submitted to preserve NEM 2.0 status.
- 2023 Request for Offers, Selection of Greenbridge as PPA counterparty Staff Report Item 15
Despite repeated attempts to contract with a private asset owner to develop and own projects Ava has been unable to execute PPAs with the selected counterparties.
Pivot to Ava Ownership of Assets
At the February 19, 2025 Board Meeting staff presented a potential change to the ownership structure in light of challenges with the counterparty Greenbridge and policy uncertainty. The board delegated further diligence to the Executive committee. At the March, 2025 Executive Committee Ava presented a proposal to move forward on fully diligencing owning the assets on Ava’s balance sheet without a 3rd party financing entity. The Executive Committee directed Ava to develop and issue a Public Works compliant Request for Qualifications and subsequent Request for Proposals pursuant to California Public Contracting Law and to select and contract with a qualified contractor and commence negotiation of an agreement to build the Projects for Ava. It was determined that Ava would stay the course in terms of contracting with each of the Cities using the previously developed PPA. Following a full diligence of this process, staff would return to the full board with a recommendation on moving forward with the portfolio.
Ava issued a Request for Qualifications for Design/Build of the projects on March 4, 2025 and received ten (10) qualifying bids. Ava then issued a Request for Proposals to the qualified list of respondents to design and construct the Project for Ava. Ava received six (6) proposals and selected three (3) finalists that were invited to complete site walks in order to develop a final pricing proposal.
Final Portfolio and Pricing Structure
Ava has continued to work with City staff to refine project selection and designs for projects in the Program. Project designs have been adjusted based on City department requests.
After the Board and Executive Committee provided direction to staff regarding the pivot to Ava ownership of the Solar and Storage projects, Ava communicated this change of plans to City staff. City staff indicated an interest in continuing to work to develop these projects under an Ava ownership structure.
Ava staff has been evaluating the development costs and risks associated with long-term ownership of these assets and the bill savings that can be offered to Cities with the associated risks. Ava has offered Cities a solar PPA and BESS rate that delivers 0.5% bill savings over the term of the PPA. Ava would take on any downside risks associated with these projects, as described in the tables below.
Ava is continuing to work with Berkeley, Fremont, Hayward, and Livermore with 2 sites per city for a total of 8 projects totaling 501kW of PV and 1.34MWh of BESS. The cities of Oakland and San Leandro have elected not to proceed on this phase of the portfolio.
Staff Report Item 15
Ava staff is requesting $8,000,000 to cover upfront construction costs, which covers all downside scenarios such as higher tariffs and construction costs and early term operating expenses.
Figure 3: Final Portfolio and City Savings
Figure 4: Project Capital and Risk Scenarios
Staff Report Item 15
Figure 5: Final Portfolio by type
Ava staff is working actively with participating cities to finalize PPA language updates and all cities anticipate getting formal city council approvals in June and July. Staff intends to sign the EPCA by the end of May and issue a Limited Notice to Proceed to finalize designs and seek permitting. Following formal city approvals, Ava will issue full Notice to Proceed in order to procure equipment. To the extent a city does not receive formal approval on the PPA, Ava could bear out of pocket expenses for design and permitting work, but does not plan to take procurement risk. Staff may consider ordering equipment earlier for the purpose of mitigating tariff and supply chain-related risks.
Use of Local, Union Labor
McMillan Electric and Ava have committed to developing these projects using local, union labor to the extent such labor is available and qualified for the work. McMillan is headquartered in San Francisco and is an IBEW 595 (Alameda County) signatory contractor working in the Bay Area for 56 years. McMillan is committed to using local workers and sub-contractors residing in Alameda and San Joaquin counties and to paying prevailing wages in each jurisdiction. McMillan has committed to using Union Labor for on-site work. Additionally, McMillan will use local hires for on-site work so long as the use of local hires enables it to meet project delivery milestones. The current pricing of projects in the portfolio assumes the use of Union Labor on these projects. If the developer cannot find union labor that meets these requirements, they will provide notice to Ava and provide an alternative proposal that meets requirements (i)-(iii) above.
EPCA and PPA Transaction Summary
The structure of the EPCA and PPA with Cities is shown below. The EPCA requires Ava to execute PPAs with participating Cities to become fully effective. Ava has been working with City staff and legal counsel to come to agreement on City specific provisions for each of the four Cities. Ava has structured the current version of the PPA to manage risk to Ava between the parties.
Staff Report Item 15
Figure 6: Ava Asset Ownership and PPA Structure
Board Authorization Requests
Authorization to Negotiate and Execute EPCA with McMillan Electric Ava staff is requesting the Board adopt a Resolution authorizing the CEO to negotiate and execute an EPCA with McMillan Electric that meets the obligations listed above.
Authorization to negotiate and execute City PPAs
Ava staff is requesting the Board adopt a Resolution authorizing the CEO to negotiate and execute PPAs with Cities participating in the Critical Municipal Facilities Program.
Critical Municipal Facility Program Budget Authorization Staff requests the Board adopt a Resolution authorizing the use of $8,000,000 in previously allocated Local Development funds to fund incentives and the construction of these projects.
Committee Recommendation
In March of 2025 the Ava Executive Committee heard an update on the progress of the Program and directed staff to pursue direct ownership of solar and storage projects in the Program.
This matter was brought to the Executive sub-committee on May 7,2025 as an informational item.
Staff Report Item 15
Attachments
A. Resolution Authorizing the CEO to Negotiate and Execute Power Purchase Agreements with Each of the Cities Participating in The Critical Municipal Facilities Program; Negotiate and Execute an Engineering, Procurement and Construction Agreement with McMillan Electric; And Provide $8,000,000 in Construction Capital and Incentives For The Program
B. Draft Ava/McMillan Engineering, Procurement and Construction Agreement (EPCA)
C. Draft Ava/City Power Purchase Agreement (PPA)
D. Power Point Presentation
Attachment Staff Report Item 15A
RESOLUTION NO. R-2025-XX
A RESOLUTION OF THE BOARD OF DIRECTORS
OF AVA COMMUNITY ENERGY AUTHORITY AUTHORIZING THE CEO TO
NEGOTIATE AND EXECUTE POWER PURCHASE AGREEMENTS WITH
EACH OF THE CITIES PARTICIPATING IN THE CRITICAL MUNICIPAL FACILITIES PROGRAM: NEGOTIATE AND EXECUTE AN ENGINEERING,
PROCUREMENT AND CONSTRUCTION AGREEMENT WITH MCMILLAN
ELECTRIC; AND PROVIDE $8,000,000 IN LOCAL DEVELOPMENT
FUNDING FOR THE PROGRAM
WHEREAS Ava Community Energy Authority (“Ava”) was formed as a community choice aggregation agency (“CCA”) on December 1, 2016, under the Joint Exercise of Powers Act, California Government Code sections 6500 et seq., among the County of Alameda, and the Cities of Albany, Berkeley, Dublin, Emeryville, Fremont, Hayward, Livermore, Piedmont, Oakland, San Leandro, and Union City to study, promote, develop, conduct, operate, and manage energy-related climate change programs in all of the member jurisdictions. The cities of Newark and Pleasanton, located in Alameda County, along with the City of Tracy, located in San Joaquin County, were added as members of Ava and parties to the Joint Powers Agreement (“JPA”) in March of 2020. The city of Stockton was added as a member to Ava in September of 2022. The city of Lathrop was added as a member to Ava in October of 2023. San Joaquin County was added as a member to Ava in July 2024. On October 24, 2023, Ava legally adopted the name Ava Community Energy Authority, where it had previously used the name East Bay Community Energy Authority since its inception.
WHEREAS Ava has been developing the Resilient Critical Facilities Program (“The Program”) to develop cost effective solar + storage Power Purchase Agreements (“PPAs”) on municipal critical facilities to deliver resilience and energy security to member agencies and their residents,
WHEREAS Four member agencies; Berkeley, Fremont, Hayward, Livermore have all passed city council resolutions to participate in The Program as long as Ava can deliver solar + storage projects that do not cost more than cities would pay for grid supplied electricity during the course of the PPAs,
WHEREAS Ava has developed a portfolio of sites and a standard form PPA to use for solar and storage resilience projects
WHEREAS Ava has pivoted from contracting with a PPA counterparty that would own and operate the solar projects to a model whereby Ava will directly own the assets and pursue installation of the projects prior to the April 2026 NEM2.0 sunset date WHEREAS in compliance with applicable design-build provisions of the Public Contract Code, on March 4, 2025, Ava issued a Request for Qualifications to establish a list of qualified design-build entities. Thereafter, Ava issued a Request for Proposals to Attachment Staff Report Item 15A
those responding design-build entities found qualified to build a cost effective, high quality solar + storage project at various sites, for The Program, and, WHEREAS Ava selected a proposal based on best value that met Ava’s requirements for cost effectiveness and installation quality from McMillan Electric (“Project Developer”) and Ava is in the process of negotiating the final details of an Engineering, Procurement, Construction Agreement (the “EPCA”) WHEREAS Ava has incorporated City specific requests on site design for the projects
WHEREAS Ava has incorporated City specific terms from the respective City Attorneys on Ava’s PPA with participating Cities
WHEREAS Timeliness is of the essence in signing the PPA with Cities to achieve project Commercial Operation date milestones
WHEREAS Ava has sufficient Local Development funding to support incentives and construction capital for the Critical Municipal Facilities Program
NOW, THEREFORE, THE BOARD OF DIRECTORS OF AVA COMMUNITY ENERGY AUTHORITY DOES HEREBY RESOLVE AS FOLLOWS:
Section 1. The CEO is hereby authorized to negotiate and execute Power Purchase Agreements with each of the Cities participating in the Program for Ava to sell solar energy generation and energy services.
Section 2. The CEO is hereby authorized to negotiate and execute an Engineering, Procurement and Construction agreement with McMillan Electric for construction of projects for Ava’s Resilient Critical Municipal Facilities Program.
Section 3. Ava is approved to use $8,000,000 from the previously approved Local Development budget to for solar and storage incentives, construction capital, and operations & maintenance related services for Critical Municipal Facilities projects.
ADOPTED AND APPROVED this 21st day of May, 2025.
Jack Balch, Chair
ATTEST:
Adrian Bankhead, Clerk of the Board
Ava Draft (April 18, 2025)
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MASTER ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT between
Ava Community Energy
and
[__________]
dated
[__________], 2025
Attachment Staff Report Item 15B
-i-TABLE OF CONTENTS
– KEY DEFINITIONS..................................................................................................... 1
1.1 Definitions..................................................................................................................... 1
1.2 Rules of Usage .............................................................................................................. 9 – RELATIONSHIP BETWEEN THE PARTIES.......................................................... 10
2.1 Status of Contractor .................................................................................................... 10
2.2 Subcontracts and Subcontractors................................................................................ 10
2.3 Communication........................................................................................................... 10
2.4 Party Representatives.................................................................................................. 10
2.5 Reports........................................................................................................................ 11
2.6 Meetings and Project Management............................................................................. 11 – PERFORMANCE OF THE WORK........................................................................... 11
3.1 Generally..................................................................................................................... 11
3.2 Project Designer Services........................................................................................... 11
3.3 Ava and Independent Engineer Review...................................................................... 11
3.4 Construction................................................................................................................ 12
3.5 Equipment and Materials............................................................................................ 12
3.6 Supervision ................................................................................................................. 13
3.7 Governmental Authorizations..................................................................................... 13
3.8 Laws and Regulations; Standard of Performance....................................................... 13
3.9 Employment of Licensed and Qualified Personnel .................................................... 13
3.10 [Workforce Standards................................................................................................. 13
3.11 Liens............................................................................................................................ 14
3.12 Books and Records ..................................................................................................... 15
3.13 Project Deliverables.................................................................................................... 16 – NOTICE TO PROCEED AND COMPLETION OF WORK..................................... 16
4.1 Project Schedule.......................................................................................................... 16 . 16
4.2 Commencement of Work; New Addendum Processing ............................................. 16
4.3 Notice to Proceed........................................................................................................ 16
4.4 Final Building Department Approval Delay............................................................... 17
4.5 Guaranteed Substantial Completion Date................................................................... 17 – CHANGE ORDERS ................................................................................................... 17
5.1 Changes....................................................................................................................... 17
5.2 Emergencies................................................................................................................ 17
5.3 Ava-Directed Change Orders...................................................................................... 17
5.4 Draft Change Orders................................................................................................... 17
5.5 Grounds for Dispute.................................................................................................... 18
5.6 Right to Audit ............................................................................................................. 18 Attachment Staff Report Item 15B
-ii-5.7 Effect of Approved Change Order.............................................................................. 18
5.8 Optional Cancellation of Addenda by Ava................................................................. 18 – CONTRACT PRICE AND PAYMENT TERMS ...................................................... 20
6.1 Contract Price.............................................................................................................. 20
6.2 Milestones and Milestone Payment Schedule............................................................. 20
6.3 Waiver of Liens........................................................................................................... 20
6.4 Disputed Invoices/Late Payments............................................................................... 20
6.5 Interest......................................................................................................................... 21
6.6 Setoff Rights ............................................................................................................... 21
6.7 Taxes........................................................................................................................... 21
6.8 Contract Retention ...................................................................................................... 21
6.9 Substitutions for Contract Retention........................................................................... 22 – TESTING, INSPECTION, SUBSTANTIAL COMPLETION AND FINAL COMPLETION....................................................................................................................... 22
7.1 Testing......................................................................................................................... 22
7.2 Installed Capacity Tests.............................................................................................. 22
7.3 Storage Capacity Tests................................................................................................ 23
7.4 Inspection.................................................................................................................... 23
7.5 Interconnection ........................................................................................................... 24
7.6 System Electrification Approval................................................................................. 24
7.7 Substantial Completion............................................................................................... 24
7.8 Final Completion ........................................................................................................ 26 – WARRANTIES .......................................................................................................... 26
8.1 Workmanship Warranty.............................................................................................. 26
8.2 Roof Damage Warranty .............................................................................................. 27
8.3 Equipment Warranties ................................................................................................ 27 TITLE; RISK OF LOSS ................................................................................................ 27
9.1 Title to Work, Equipment and Projects....................................................................... 27
9.2 Title to RECs and Incentives; Cooperation ................................................................ 27
9.3 Risk of Loss................................................................................................................ 28
9.4 Damage to Property .................................................................................................... 28
9.5 Hazardous Materials; Safety ....................................................................................... 28
9.6 Emergencies................................................................................................................ 29
9.7 Access to Project Sites................................................................................................ 29
9.8 Project Site Disruptions .............................................................................................. 29
9.9 Clean-Up..................................................................................................................... 29 – FORCE MAJEURE .................................................................................................. 29
10.1 Definition of Force Majeure ....................................................................................... 29
10.2 No Liability if Force Majeure Occurs......................................................................... 30
10.3 Notice of Force Majeure ............................................................................................. 30 Attachment Staff Report Item 15B
-iii-10.4 Mitigation of Force Majeure Event............................................................................. 30 – INSURANCE............................................................................................................ 31
11.1 Coverage ..................................................................................................................... 31 – INDEMNIFICATION; LIMITATION OF LIABILITY .......................................... 31
12.1 Indemnification by Contractor.................................................................................... 31
12.2 Design Professional Services...................................................................................... 31
12.3 Notice and Participation in Third Party Claims.......................................................... 31
12.4 Environmental Indemnification .................................................................................. 32
12.5 Notices ........................................................................................................................ 32
12.6 Limitation of Liability................................................................................................. 32 – DEFAULT ................................................................................................................ 32
13.1 Events of Default ........................................................................................................ 32
13.2 Ava's Rights................................................................................................................ 32
13.3 Contractor's Rights...................................................................................................... 33 – TERMINATION....................................................................................................... 33
14.1 Termination................................................................................................................. 33
14.2 Effect of Termination due to Ava Default .................................................................. 33
14.3 Effect of Termination due to Contractor Default........................................................ 33
14.4 Survival....................................................................................................................... 34 – PERFORMANCE AND PAYMENT BONDS......................................................... 34
15.1 Generally..................................................................................................................... 34
15.2 Period of Maintenance ................................................................................................ 34
15.3 Penal Sums.................................................................................................................. 34
15.4 Costs............................................................................................................................ 34
15.5 Attorneys' Fees............................................................................................................ 34 - DISPUTE RESOLUTION......................................................................................... 35
16.1 Contractor Claims....................................................................................................... 35
16.2 Other Disputes. ........................................................................................................... 35 – REPRESENTATIONS AND WARRANTIES......................................................... 35
17.1 Contractor Representations and Warranties................................................................ 35
17.2 Ava's Representations and Warranties........................................................................ 37 – MISCELLANEOUS PROVISIONS......................................................................... 37
18.1 Assignment ................................................................................................................. 37
18.2 Change in Law. ........................................................................................................... 37
18.3 Amendments............................................................................................................... 38
18.4 No Waiver................................................................................................................... 38
18.5 No Third-Party Beneficiaries...................................................................................... 38 Attachment Staff Report Item 15B
-iv-18.6 Governing Law; Venue............................................................................................... 38
18.7 Entire Contract............................................................................................................ 38
18.8 Relationship of Agreement and Addendum................................................................ 38
18.9 Performance of Obligations........................................................................................ 39
18.10 Further Assurances...................................................................................................... 39
18.11 No Recourse to Members of Ava................................................................................ 39
18.12 Counterparts; Electronic Signatures ........................................................................... 39
18.13 Confidentiality; Press Releases................................................................................... 39
18.14 Severability ................................................................................................................. 40
18.15 Labor Code Compliance ............................................................................................. 41
18.16 Antitrust Claims.......................................................................................................... 42
18.17 State Audit .................................................................................................................. 42
18.18 Conflict of Interest ...................................................................................................... 42
18.19 Skilled and Trained Workforce................................................................................... 43
18.20 Third Party Claims...................................................................................................... 43
18.21 Contractor's License.................................................................................................... 43
18.22 Licensed Contractor Notice ........................................................................................ 43
18.23 Trenching Work.......................................................................................................... 43 Attachment Staff Report Item 15B
-v-LIST OF EXHIBITS
Exhibit A Form of Project Addendum
Exhibit B Insurance Requirements
Exhibit C Form of Payment Request
Exhibit D Form of Conditional Lien Waiver (Contractor)
Exhibit E Form of Conditional Lien Waiver (Subcontractor) Exhibit F Form of Unconditional Lien Waiver (Contractor) Exhibit G Form of Unconditional Lien Waiver (Subcontractor) Exhibit H Installed Capacity Testing Requirements
Exhibit I Form of Installed Capacity Certificate
Exhibit J Storage Capacity Testing Requirements
Exhibit K Substantial Completion Certificate
Exhibit L Final Completion Certificate
Exhibit M Payment and Performance Bond
Exhibit N Form of Change Order
Attachment Staff Report Item 15B
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MASTER ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT This MASTER ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT ("Agreement") is made as of [________], 2025 ("Effective Date"), by and between Ava Community Energy, a joint powers authority of the State of California ("Ava") and [INSERT ENTITY NAME, TYPE AND STATE OF FORMATION] ("Contractor"). Ava and Contractor may be referred to herein in the singular as "Party" or jointly as "Parties". This Agreement sets forth the general terms and conditions for the design, engineering, procurement, installation, construction, test commission and start-up on a turnkey basis of one or more Projects (as defined in Article 1) by Contractor on commercial property, with the terms and conditions for the Work (as defined in Article 1) associated with each individual Project also being governed by the terms and conditions of a separate Project Addendum ("Addendum").
RECITALS
WHEREAS, Ava is developing a portfolio of photovoltaic solar facilities (each, a "Generating Project") and battery energy storage facilities (each, a "Storage Project", and together with the Generating Projects, the "Projects") at a variety of locations, as more particularly described in each Addendum (the "Project Site");
WHEREAS, Ava has entered into a power purchase agreement with each City with respect to the Projects under which Ava shall sell and the applicable City shall purchase the products generated by such Projects (each a “City PPA”);
WHEREAS, Ava has worked with a third-party design and engineering firm ("Project Designer") to provide the services listed in the Addendum (the "Project Designer Services") with respect to each of the Projects;
WHEREAS, Ava desires to engage Contractor to perform the balance of the design and engineering work not otherwise performed by Project Designer with respect to the Projects and to permit, procure, construct, install, commission, test and interconnect the Projects pursuant to the terms and conditions of this Agreement and the applicable Addendum ("Work") and Contractor desires to perform the Work; and
WHEREAS, Ava seeks to have the Work performed such that the Projects qualify for Pacific Gas & Electric Company ("Utility") net metering 2.0 tariff ("NEM2").
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, it is agreed:
– KEY DEFINITIONS
1.1 Definitions. The Parties hereby agree that capitalized terms used in this Agreement, unless otherwise defined herein or in a particular Addendum, shall have the meanings assigned below:
Attachment Staff Report Item 15B
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"Addendum" has the meaning set forth in the preamble, a form of which is attached hereto as Exhibit A.
"Affected Party" shall have the meaning in Section 10.1(a). "Agreement" has the meaning set forth in the preamble.
"Applicable Laws" means any applicable constitution, charter, act, statute, law, ordinance, code (including, without limitation national, state and local building, installation, engineering, electrical (including but not limited to California Building Code, California Electrical Code and National Electrical Code standards)), Public Contract Code, Government Code, and construction codes and standards, rule, case law, regulation, order, treaty, decree, announcement, Governmental Authorization, Utility tariff or rule, Utility Approval or published practice or any interpretation thereof, or other legislative or administrative action of any Governmental Authority, or specified standards or objective criteria contained in any applicable Governmental Authorization, or a final decree, judgment, or order of a court, or any applicable engineering, construction, or safety regulation or code.
“Applicable Project Component” means any article, material, or supply, whether manufactured or unmanufactured, that is directly incorporated into a Project Site. An Applicable Project Component may qualify as steel, iron, or a Manufactured Product.
"Ava" shall have the meaning set forth in the preamble. "Ava-Directed Change Order" shall have the meaning in Section 5.3. "Business Day" means any day on which Federal Reserve member banks in San Francisco, California are open for business.
“Change” shall have the meaning set forth in Section 5.1. "Change In Law" means (i) the enactment, adoption, promulgation, modification or repeal after the Effective Date of any Applicable Law, or (ii) the imposition of any material conditions on the issuance or renewal of any applicable permit after the Effective Date (notwithstanding the general requirements contained in any applicable permit at the time of application or issue to comply with future laws, ordinances, codes, rules, regulations or similar legislation). "Change Order" shall have the meaning set forth in Section 5.1. "City" means either the City of Berkeley, California; the City of Fremont, California; the City of Hayward, California; the City of Livermore, California; the City of Oakland, California; or the City of San Leandro, California or any or all of the foregoing as the context may require. “City PPA” has the meaning set forth in the Recitals.
“Claims” has the meaning set forth in Section 12.1.
Attachment Staff Report Item 15B
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“Confidential Information” shall have the meaning set forth in Section 18.8. “Contract Price” means the sum of the Project Contract Prices for each of the Projects specified in each Addendum that Ava shall pay Contractor pursuant to the terms and conditions of the Agreement.
“Contractor” has the meaning set forth in the preamble. “Current Storage Capacity” means, with respect to each Storage Project, the total capacity (in kWh) of such Storage Project, initially equal to the amount set forth in the Project Addendum. “Delivery Point” has the meaning set forth in the Addendum. “Design and Permitting Completion” means with respect to each Project, (i) Contractor has delivered one-hundred percent (100%) design documents; (ii) Contractor has attained all necessary permits and approvals from Government Authorities, and (iii) Contractor has submitted and Ava has approved all Substantial Equipment.
"Disclosing Party" shall have the meaning set forth in Section 18.13(b). "Effective Date" has the meaning set forth in the preamble. "Elective Pay Rules" shall have the meaning set forth in Section 9.2. "Equipment" means any article, material, or supply, whether manufactured or unmanufactured by Contractor, that is directly incorporated into a Project and all facilities, systems and ancillary equipment relating thereto to be located on the applicable Project Site, including, but not limited to modules, trackers, inverters, wiring devices, optimizers, conduits, mounting system, racking system, footers, carport structures, monitoring equipment, meters, balance of system, battery storage equipment, and any and all materials and equipment required to construct turnkey, operational solar photovoltaic systems and battery storage systems, interconnected to the grid. Equipment shall not include any materials, apparatus or tools owned by Contractor or any subcontractor that are used to complete the Work but are not contemplated under the Agreement to become part of the Projects. For the avoidance of doubt, “Equipment” includes the “Substantial Equipment”. "Error-Free" means the Equipment (i) is free from defects in design, materials, and workmanship, (ii) conforms to the specifications set forth in the Agreement and Addendum, and (iii) functions as designed.
“Final Building Permit Approval” means with respect to each Project, (i) all electrical systems have been checked, are ready for operation, and the Project has passed electrical inspection; (ii) the Project has obtained final building permit sign off and electrical clearing by the authority having jurisdiction; and (iii) Contractor has delivered documentary evidence that the Project has qualified for NEM2.
Attachment Staff Report Item 15B
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"Final Building Approval Deadline" shall have the meaning set forth in Section 4.4. "Final Completion" shall have the meaning set forth in Section 7.8(a). "Final Completion Notification" shall have the meaning set forth in Section 7.8(b). "Final Plans" shall have the meaning set forth in Section 3.2. "Force Majeure" shall have the meaning set forth in Section 10.1. "Generating Project" has the meaning set forth in the Recitals. "Governmental Authority" means any governmental, administrative or municipal authority, including any ministry, department, municipality, instrumentality, agency or commission under direct or indirect control of any city, county, state or Federal government, or governmental entity with jurisdiction over the applicable Project Sites or Projects or any part of the Work or entity with jurisdiction or approval rights over improvements to the Project Sites. "Governmental Authorizations" means all permits, consents, decisions, ordinances, licenses, approvals, authorizations, certificates, confirmations or exemptions from, and all applications and notices filed with or required by, any Governmental Authority that are necessary for the performance of the Works or any other obligation of either Party.
"Guaranteed Substantial Completion Date" means the deadline set forth in the Milestone Schedule upon which Substantial Completion must be achieved. "Hazardous Substances" means any chemical, waste or other substance (a) which now or hereafter becomes defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “pollution,” “pollutants,” “regulated substances,” or words of similar import under any laws pertaining to the environment, health, safety or welfare, (b) which is declared to be hazardous, toxic, or polluting by any Governmental Authority, (c) exposure to which is now or hereafter prohibited, limited or regulated by any Governmental Authority, (d) the storage, use, handling, disposal or release of which is restricted or regulated by any Governmental Authority, or (e) for which remediation or cleanup is required by any Governmental Authority. "Incentives" means (i) a payment paid by a utility or state or local Governmental Authority based in whole or in part on the cost or size of the Project such as a rebate, (ii) a performance-based incentive paid as a stream of periodic payments by a utility, state or Governmental Authority based on the production of the Project, (iii) investment tax credits, production tax credits, and similar tax credits, grants or other tax benefits under federal, state or local law, including, but not limited to, any direct payment and transfer rights thereto, and (iv) any other attributes, commodity, revenue stream or payment in connection with the Project (such as ancillary or capacity revenue), in each case of (i) through (iv) relating to the construction, ownership, use or production of energy from the Project, provided that Incentives shall not include RECs.
Attachment Staff Report Item 15B
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“Independent Engineer” means a person designated by Ava to inspect and review the Work. "Installed Capacity" means, with respect to any Project, the maximum dependable operating capability of such Project to deliver energy at the meter, and adjusted for electricity losses to the delivery point (up to but not in excess of the Project Capacity). "Interest Rate" shall have the meaning in Section 6.5.
“Licensed Professional Engineer” means an independent, professional engineer selected by Contractor and reasonably acceptable to Ava, licensed in the State of California. "Lien" means any mortgage, pledge, assessment, security interest, lease, lien, stop notice, adverse claim, levy, right of retention, charge or other encumbrance of any kind, or any conditional sale contract, title retention contract or other agreement to give any of the foregoing. “Manufactured Product” is any Applicable Project Component other than a construction material made primarily of steel or iron that is structural in function. “Master Site License” means the site license document set forth in the Addendum for a Project.
"Milestone" means each milestone set forth in an Addendum for a Project, including Design and Permitting Completion, Mobilization & Construction Commencement, Final Building Permit Approval, Substantial Completion, and Final Completion. "Milestone Payment" shall have the meaning provided in Section 6.1. "Milestone Percentage" shall have the meaning set forth in Section 6.2(b). "Milestone Schedule" shall have the meaning set forth in Section 4.2(a). “Mobilization & Construction Commencement” means with respect to each Project, (i) Contractor has placed procurement orders for and delivered all Equipment to the Project Site; (ii) Contractor has delivered the final construction schedule and attained written approval from Ava and the City on such construction schedule; and (iii) Contractor has commenced construction of the Project.
“NBT” shall mean Net Billing Tariff.
"NEM2" has the meaning set forth in the Recitals.
"Operations Manual" shall mean a manual provided by Contractor for each Project in a form reasonably acceptable to Ava describing procedures for the operation of such Project, including appropriate safety precautions and limitations, optimum operating conditions, original equipment manufacturer requirements and warranty conditions, maintenance procedures, spare parts lists, instructions, schedules and aids, and all other information necessary, appropriate, or helpful to instruct Attachment Staff Report Item 15B
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operator personnel in all phases of operation of the Project and to maintain the Project in optimum operating condition.
"Party" or "Parties" has the meaning set forth in the preamble. "Payment Request" has the meaning in Section 6.2(a).
"Person" means any individual, corporation, partnership, joint venture, trust, unincorporated organization, association or Governmental Authority.
"Plans" has the meaning set forth in Section 3.3.
"Project Capacity" means (a) with respect to a Generating Project, the PV Nameplate Capacity of such Project, and (b) with respect to a Storage Project, the Storage Inverter Power of such Project. "Project Contract Price" means the total price for an individual Project in the portfolio as set forth in the Addendum for such Project.
"Project Deliverables" has the meaning set forth in Section3.13. "Project Designer" has the meaning set forth in the Recitals. "Project Designer Services" has the meaning set forth in the Recitals. "Project Documentation" means, with respect to each Project: (i) a list of all of the components of a Project as installed after the Work has been conducted with respect to such Project, including manufacturer names, model numbers, serial numbers and number of items installed; (ii) warranty information on all components of the Project for which the manufacturer has provided warranty documentation; (iii) Final Plans; (iv) shop drawings; (v) as-built drawings of the Project certified as correct by a licensed professional engineer of the jurisdiction in which the Project is located; (vi) copies of all Governmental Authorizations, including, but not limited to building permits and inspection reports; (vii) the interconnection agreement with the Utility; (viii) the net metering agreement with the Utility; (ix) documentation of all Utility Approvals; and (x) Operations Manual. "Project Installation Checklists and Acceptance Tests" shall mean checklists and tests sufficient to enable Ava's Independent Engineer or other Ava designee to evaluate whether the Project is ready for commercial operation in compliance with Applicable Law, Prudent Practices and all terms and conditions of this Agreement, the content of which Contractor shall propose to, and which shall be approved in writing by, Ava or its Independent Engineer, at Ava's discretion.1 "Project Operation Manual" shall mean a manual provided by Contractor for each Project in a form reasonably acceptable to Ava describing procedures for the operation of such Project, including appropriate safety precautions and limitations, optimum operating conditions, original equipment 1 Ava NTD: Contractor to please provide for Ava’s review.
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manufacturer requirements and warranty conditions, maintenance procedures, spare parts lists, instructions, schedules and aids, and all other information necessary, appropriate, or helpful to instruct operator personnel in all phases of operation of the Project and to maintain the Project in optimum operating condition.
"Project Packages" means the work product prepared by Project Designer and provided to Contractor by Ava prior to the Effective Date, as set forth in the Schedule C to the Addendum for a Project.
"Project Roof" shall have the meaning set forth in Section 8.2. "Project Site" has the meaning set forth in the Recitals. "Project Site Plans" has the meaning set forth in Section 3.3. "Projects" has the meaning set forth in the Recitals.
"Prudent Practices" means the practices, methods and acts engaged in or approved by the solar energy and battery storage industry in performing services of a similar kind in the United States for projects of a similar size and complexity as the Projects that, at a particular time, in the exercise of reasonable judgment in light of the facts known or that reasonably should have been known at the time a decision was made, would have been expected to accomplish the desired result in a manner consistent with Applicable Law, Utility Approvals, reliability, safety, environmental protection, equipment manufacturers' recommendations economy and expedition.
"PV Nameplate Capacity" means the nameplate capacity of a Generating Project, as set forth in the Addendum.
"PWA Requirements" has the meaning set forth in Section 3.10(a). "REC" means a renewable energy credit or certificate under any state renewable portfolio, standard or federal renewable energy standard, voluntary renewable energy credit, pollution allowance, carbon credit and any similar environmental allowance, credit, attribute or green tag or other reporting right under Section 1605(b) of The Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program or voluntary program or system, in each case relating to the construction, ownership, use or production of energy from the Project, provided that RECs shall not include Incentives. "Receiving Party" shall have the meaning set forth in Section 18.13(b). “Regulations” mean the federal income tax regulations promulgated under the Code, including any proposed, temporary, and/or final regulations, to the extent such regulations are effective at the applicable time and as the same may be amended from time to time (including corresponding provisions of successor regulations).
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"Rejected Services" shall have the meaning in Section 7.4(f). "Roof Damage Warranty" shall have the meaning in Section 8.2. "Setoff Amount" shall have the meaning in Section 6.6.
"Site Control Documents” shall mean (i) the Master Site License by and between Ava and a City, with respect to a Project Site; and (ii) leases, easements, access agreements and other real property documents relating to a Project Site.
"Storage Capacity Test" means any test or retest of the capacity of a Storage Project conducted in accordance with the testing procedures, requirement, and protocols to be set forth in the Agreement. "Storage Inverter Power" means the maximum nameplate discharge power rating, in kilowatts, of a Storage Project, as set forth in the Addendum.
"Storage Project" has the meaning set forth in the Recitals. "Subcontractor" shall mean a person or entity of any tier directly or indirectly engaged by Contractor regarding the performance or provision of the Work or the fulfillment, in whole or in part, of any obligation undertaken by Contractor in connection with this Agreement. "Substantial Completion" has the meaning set forth in Section 7.7(a). "Substantial Completion Certificate" means a certificate verifying the achievement of Substantial Completion with respect to a Project, the form of which is attached hereto as Exhibit K. "Substantial Completion Notification" shall have the meaning set forth in Section 7.7(b). “Substantial Equipment” means all modules, inverters, trackers, mounting system, carport structures and meters for a Generating Project, and all battery modules, power conversion system, thermal management system and safety systems for a Storage Project. "Taxes" shall have the meaning set forth in Section 6.6. "Test Reports" shall have the meaning in Section 7.1.
"Tier 1 Supplier" means a "Tier 1 Module Manufacturer" as listed from time to time by BloombergNEF, published on a quarterly basis, or if no longer published, a similar publication mutually agreed upon by the Parties.
"Utility" shall have the meaning set forth in the Recitals. "Utility Approval" means all required approvals of the Utility, including, but not limited to, interconnection approval, permission to operate, net energy metering agreement and interconnection agreements.
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"Work" shall have the meaning set forth in the Recitals.
1.2 Rules of Usage. The Parties hereby agree that the following rules of usage shall apply to this Agreement unless otherwise required by the context or unless otherwise specified:
(a) Singular and Plural. Definitions set forth herein shall be equally applicable to the singular and plural forms of the terms defined.
(b) Section References and Headings. References to articles, sections, paragraphs, clauses, annexes, appendices, schedules or exhibits are references to articles, sections, paragraphs, clauses, annexes, appendices, schedules or exhibits in this Agreement. The headings, subheadings and table of contents used in this Agreement are solely for convenience of reference and shall not constitute a part of this Agreement nor shall they affect the meaning, construction or effect of any provision thereof.
(c) References to Persons. References to any Person shall include such Person, its successors and permitted assigns and transferees.
(d) Agreements and Laws as Amended. Reference to any agreement (including this Agreement) means such agreement as amended, supplemented or otherwise modified from time-to-time in accordance with the applicable provisions thereof. Reference to any law includes any amendment or modification to such law and any rules or regulations issued thereunder or any legal requirement enacted in substitution or replacement thereof. (e) Grammatical Forms. Where a word or phrase is specifically defined, other grammatical forms of such word or phrase have corresponding meanings; the words "herein," "hereunder," and "hereof" refer to the provisions of this Agreement as a whole and not to any particular portion or provision of this Agreement; "including" means "including, but not limited to", and other forms of the verb "to include" are to be interpreted similarly; and references to "or" shall be deemed to be disjunctive but not necessarily exclusive (i.e., unless the context dictates otherwise, "or" shall be interpreted to mean "and/or" rather than "either/or").
(f) Day. References to "days" shall mean calendar days, unless the term "Business Days" is used. If the time for performing an obligation expires on a day that is not a Business Day, the time shall be extended until that time on the next Business Day. (g) Time Periods and Time Zone. References to time are references to the time in effect in San Francisco, California. Obligations to be performed within a specific period of time shall be performed no later than 11:59 p.m. on the last day of such time period. Time periods shall be calculated exclusive of the day on which the time period commences. For purposes of example only, a time period consisting of three (3) Business Days which commences on a Tuesday would end at 11:59 p.m. on Friday.
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– RELATIONSHIP BETWEEN THE PARTIES
2.1 Status of Contractor. Contractor shall perform and execute the provisions of this Agreement as an independent contractor to Ava and shall not be an agent, employee or partner of Ava.
2.2 Subcontracts and Subcontractors. No contractual relationship shall exist between Ava and any Subcontractor with respect to the Work performed hereunder. Contractor shall be fully responsible for the works, services, and materials and the acts, defaults and neglects of any Subcontractor, its agents or employees as fully as if they were Contractor's own or those of Contractor's agents or employees. On a monthly basis, within ten (10) days of the end of such month, Contractor shall provide to Ava a list of all Subcontractors used by Contractor during such month. All construction subcontractors awarded construction subcontracts in connection with this Agreement shall be afforded all the protections of Public Contract Code Section 4100, et seq. If Contractor awards a construction subcontract to a subcontractor not listed in Contractor’s proposal with a value exceeding one half of a percent (0.5%) of the Contract Price after the Effective Date, Contractor shall: (a) provide public notice of the availability of the work to be subcontracted in accordance with the publication requirements applicable to the competitive bidding process of the local agency, including a fixed date and time on which qualifications statements, bids, or proposals will be due, and (b) establish reasonable qualification criteria and standards.
2.3 Communication. All written documentation or notices may be transmitted via US Post, private express mail service, or electronic mail via the following addresses:
If to Ava:
Ava Community Energy
Attn: Ava CMF
1999 Harrison Street, Suite 800
Oakland, CA 94612
Email: [email protected]
If to the Contractor:
[CONTRACTOR NAME]
[STREET ADDRESS, MAILING ADDRESS IF DIFFERENT]
Attn: [Contact Person]
Local Phone: [Phone Number]
Email: [Email Address]
Parties may update the contact information via written notification. All notices shall be effective upon receipt.
2.4 Party Representatives. Each Party shall appoint and give written notice to the other Party of a representative who will be authorized to represent such Party in all respects regarding this Attachment Staff Report Item 15B
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Agreement. Either Party may replace its representative at any time by providing written notice to the other Party.
2.5 Reports. Contractor shall provide weekly progress reports to Ava which describe Contractor's progress in achieving completion of each of the Projects. Contractor shall provide any reasonably requested documentation related to completion of the Project within ten (10) Business Days of receipt of such request from Ava.
2.6 Meetings and Project Management. Contractor shall attend and conduct the following meetings: (a) a bi-weekly progress and schedule review meeting during the design phase of this Agreement for each Project, and (b) a weekly progress and schedule review meeting during the construction phase of this Agreement for each Project. Meetings may be conducted in-person or remotely by telephone or videoconference. During the construction stage, Contractor shall provide a three-week look-ahead schedule prior to all weekly meetings. – PERFORMANCE OF THE WORK
3.1 Generally. Contractor shall, on a fixed-price turnkey basis for each Project: (a) subject to Section 3.2, design and engineer the Project; (b) furnish and procure all Equipment, supplies, labor, administration and superintendence, tools and materials necessary for the Work; (c) permit, construct, install, start-up, commission, test and interconnect the Project; and (d) perform all related activities for the successful completion of the Work and the delivery of the Project pursuant to the Project Packages or the Final Plans, as applicable, and in compliance with this Agreement, the technical requirements set forth in the Addenda, Prudent Practices and Applicable Law, and in a manner consistent with the requirements of the Site Control Documents.
3.2 Project Designer Services. Contractor has reviewed the Project Package provided by Ava for each Project and hereby confirms that Contractor believes Contractor is able to procure, permit, construct, install, commission, test and interconnect the Projects pursuant to the applicable Project Package and the terms and conditions of this Agreement. Contractor shall review the Project Designer Services as set forth in the applicable Addendum as described in the Project Packages and through reasonable additional due diligence of Contractor. Contractor shall be responsible for providing all additional design and engineering services necessary to deliver to Ava completed and fully operational Projects meeting all terms, conditions and covenants of this Agreement including, but not limited to, all warranties. If, in the performance of such review, due diligence or performance of the Work, Contractor reasonably determines that it will need to make changes to the Project Package for a Project or repeat elements of the Project Designer Services in order to complete the Work for such Project in accordance with Prudent Practices or at the direction of Ava, Contractor shall propose such changes and the Parties shall confer, confirm any such changes with the applicable City and agree in writing to final plans (the "Final Plans"). In such event, Contractor shall be responsible for providing revised detailed design drawings necessary to provide a turnkey installation of the applicable Project.
The Change Order process set forth in Article 5 shall apply to any such changes to the Project Package.
3.3 Ava and Independent Engineer Review. Contractor shall provide construction documents that include, but are not limited to, a design and construction schedule, Project Site plans Attachment Staff Report Item 15B
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("Project Site Plans"), photovoltaic system plans, battery storage system plans, single line schematics, and racking system and equipment layouts with elevations and any other documents set forth in the technical specification attached to the Addenda. All drawings, specifications, plans and other design documents, including, but not limited to the Final Plans ("Plans") shall be submitted to Ava for review and comment at least eighty (80) days prior to the Mobilization & Construction Commencement deadline set forth in the Milestone Schedule for a Project, and shall be subject to Ava's written approval. Within thirty (30) days of receipt of such Plans, Ava shall provide written notice to Contractor either (a) accepting the Plans, or (b) rejecting the Plans, along with a commercially reasonable explanation for doing so. If Ava rejects the Plans, Contractor shall modify the Plans to address Ava’s comments and submit such revised Plans to Ava for review within fifteen (15) days of receipt of Ava’s rejection notice. Within twenty-one (21) days of receipt of the revised Plans, Ava shall provide written notice either (a) accepting the revised Plans, or (b) rejecting the revised Plans, along with a commercially reasonable explanation for doing so. If Ava rejects the revised Plans, the Parties shall resolve their differences in accordance with the dispute resolution procedures set forth in Article 16. Any such review and comment by Ava shall not relieve or absolve Contractor from its responsibility under this Agreement or from its liability for any error, fault or inconsistency in the Work. Ava reserves the right to retain at its expense an Independent Engineer to review and approve Plans and all Project Documentation. In the event that Ava retains an Independent Engineer the Parties shall agree to a process for submission of Plans and other Project Documentation to Independent Engineer in accordance with Prudent Practices.2
3.4 Construction. Contractor shall construct the Projects according to the technical requirements and the Project Package or Final Plans, as applicable, set forth in the Addendum, and all other terms and conditions of this Agreement and shall continuously monitor and review such construction for conformance with this Agreement.
3.5 Equipment and Materials. Contractor shall submit to Ava a written proposal of the Substantial Equipment Contractor proposes to procure for each Project, which shall include the cost, manufacturer, country of origin and estimated tariff for such Substantial Equipment at the time the proposal is submitted to Ava. Ava’s written approval shall be required for all Substantial Equipment used in the Work and Contractor shall not place an order for any Substantial Equipment until such written approval is received from Ava. Ava may delegate approval of Substantial Equipment to its Independent Engineer. Contractor is responsible for installing all Equipment and following all specifications, directions and product installation instructions of manufacturers and suppliers in accordance with the technical requirements set forth in each Addendum. Contractor shall provide and pay for all labor, materials, equipment, tools, supervision, testing, inspection, and other services as necessary to complete performance of the Work, whether by Contractor or its Subcontractors. The Contractor’s mark-up on any equipment procured pursuant to this Agreement shall be limited to fifteen (15%) of the cost of such equipment.
2 Ava NTD: The timeframes in this Section 3.3 have been included to accommodate the design process Ava must comply with under the City PPAs.
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3.6 Supervision. Contractor shall supervise and direct the Works using its best skill and attention. Contractor shall maintain a full-time supervisor at each Project Site during all times at which Works are being performed by Contractor or any of its Subcontractors. Contractor shall be solely responsible for all construction means, methods, techniques, sequences, and procedures, and for coordinating all portions of the Works. Contractor shall have complete responsibility for the Work and for the prevention of injuries to persons and damage to the Work. Contractor shall in no way be relieved of responsibility by any right of Ava, or any other person to give permission or directions relating to any part of the Works, by any such permissions or directions given, or by failure to give such permission or directions. Contractor shall remove from each Project Site any employee or agent of Contractor or any Subcontractor who is incompetent, insubordinate, careless or disorderly or whose removal is requested by Ava, in its sole discretion. Contractor shall cooperate with any separate contractors of Ava or City on the Project Sites and coordinate its activities with them.
3.7 Governmental Authorizations. Contractor shall secure and pay for all Governmental Authorizations relating to construction and/or installation of the Project and Contractor's performance of the Work, including, but not limited to, building permits, environmental permits, and conditional use permits, and Utility Approval for the Works.
3.8 Laws and Regulations; Standard of Performance. Contractor shall, and shall cause its agents, employees and Subcontractors to, at all times perform the Works and all obligations under this Agreement (a) in a safe and expeditious manner, (b) in compliance with all Applicable Laws, (c) in accordance with Prudent Practices, rules of Ava and City which Contractor receives in writing and all other requirements of this Agreement, (d) consistent with the requirements applicable to on-site generation, if any, of the Utility; and (e) in compliance with all vendor equipment warranty requirements that have been provided, maintenance instructions and specifications. In no way limiting the generality of the foregoing, Contractor shall be responsible for and shall ensure that the design, engineering, construction and projected operation of the Project shall be in full accord with all Applicable Laws, including, without limitation by their specification, all land use, environmental, and health and safety laws and Utility requirements, including, but not limited to, all interconnection and net metering requirements.
3.9 Employment of Licensed and Qualified Personnel. Contractor shall ensure that all personnel, employees, labor, supervision, and Subcontractors of any tier are properly licensed and qualified to perform the Work that they are engaged to perform. All such Work will be performed with the degree of care, skill and responsibility ordinary and customary among such licensed personnel. In no event shall Contractor be relieved of any responsibility for the performance of such Work, and Contractor shall be held to the same degree of responsibility and liability with respect to such Work as the licensed personnel performing such Works. Contractor shall not knowingly permit employment of Persons not skilled or qualified for the tasks assigned to them.
3.10 [Workforce Standards.
(a) Contractor acknowledges that Ava, its affiliate, or a tax credit investment entity organized to benefit Ava, intends to utilize the maximum amount of investment tax credits and production tax credits available under Code Sections 45 or 48. Contractor agrees to satisfy and comply, Attachment Staff Report Item 15B
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and cause all of its Subcontractors to satisfy and comply, with the prevailing wage and registered apprentice requirements set forth in Code Sections 45 and 48, the Regulations, and any applicable guidance (the "PWA Requirements"), so that Ava or its affiliates (as the case may be) will qualify for the increased credit amount for taxpayers satisfying the PWA Requirements. Contractor will provide and cause others, including Subcontractors, to provide to Ava all information (oral or written), documentation, reports, forms, and the like, required for Ava or its affiliates (as the case may be) to comply with the recordkeeping and reporting requirements set forth in the PWA Requirements, which includes, but is not limited to, the following information for each laborer and mechanic (including each qualified apprentice) employed by Contractor, or a Subcontractor with respect to each Project Site:
(i) The hourly rate(s) of wages paid (including rates of contributions or costs for bona fide fringe benefits or cash equivalents thereof) for each applicable labor classification; (ii) The total number of labor hours worked per pay period; (iii) The total wages paid for each pay period (including identifying any deductions from wages); and
(iv) Records to support wages paid to any apprentices at less than the applicable prevailing wage rates, including records reflecting the registration of the apprentices with a registered apprenticeship program and the applicable wage rates and apprentice to journey worker ratios prescribed by the apprenticeship program.
(b) Contractor will cooperate and cause others to cooperate, including Subcontractors, with any requests made by Ava regarding the PWA Requirements, which includes, but is not limited to, any information needed by Ava or its affiliates (as the case may be) involving any audit, proceeding, litigation, or other tax contest, and actions or inactions that are needed to cure, remedy, or satisfy any violations of the PWA Requirements or Elective Pay Rules. Contractor shall ensure that there shall not be a recapture of any increased credit amounts, an excess credit transfer under Code Section 6418(g)(2), or an excessive credit payment under Code Section 6417(d)(6), with respect to failure to satisfy the PWA Requirements.
(c) Contractor will, within ten (10) days prior written notice, reimburse Ava in full for any cure payments, as defined in the PWA Requirements, made by Ava, or its affiliate, to a laborer or mechanic (including each qualified apprentice) employed by Contractor or a Subcontractor with respect to a Project Site who was not paid prevailing wages pursuant to the PWA Requirements by Contractor or a Subcontractor.]3
3.11 Liens.
3 Ava NTD: Subject to Ava tax specialist review.
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(a) Prohibition Against Liens on Project Sites. Contractor shall under no circumstances assert or permit any of its Subcontractors or agents to assert, a Lien on the Project Sites.
Contractor shall promptly notify Ava of any Lien or other charges which, if unpaid, might be or become a Lien on any of the Project Sites. Contractor shall promptly pay or discharge (and properly record any discharge), any Lien or other charges which, if unpaid, might be or become a Lien on the Project Sites. Contractor shall indemnify, defend, hold harmless and protect Ava, City and each of their assigns from and against any and all Liens on the Project Sites. (b) Equipment Liens. Contractor shall promptly pay or discharge (and properly record any discharge), any Lien or other charges which, if unpaid, might be or become a Lien on the Projects or and Equipment, excluding liens caused by Ava's breach of its payment obligations to Contractor pursuant to the terms and conditions of Article 6. Contractor shall indemnify, defend, hold harmless and protect Ava and its assigns from and against any and all improper Liens on the Equipment and Projects. Promptly upon receiving notice that an improper Lien has been filed, Contractor shall notify Ava in writing of the imposition of a Lien and shall commence to take the steps necessary to discharge said claim or Lien, including, if necessary, the furnishing of a lien bond.
Contractor may seek to contest the amount of validity of any such Lien, provided it timely complies with all procedures for contesting such Lien, posts any bond or other security necessary under such procedures, and if such procedures do not require the posting of security, establishes for the benefit of Ava and City and its assigns a deposit, letter of credit or other security acceptable to Ava and City to indemnify them against any loss which could reasonably be expected to arise if such Lien is not removed or discharged.
(c) Failure to Discharge Improper Liens. Upon the failure of Contractor to promptly pay or discharge a Lien or provide Lien security within ten (10) Business Days of its receipt of notice that the Equipment or any Project Site has been improperly liened, Ava may pay or discharge such Lien and immediately invoice Contractor for such amounts, set off such amounts against subsequent amounts due and owing to Contractor or Ava may seek recovery of the costs to discharge such Lien from Contractor's surety pursuant to Article 15. Ava may seek recovery of the costs to discharge such Lien from the Contractor or such surety without having exhausted remedies against the other. If Ava invoices Contractor for Ava's discharge of an improper Lien, Contractor shall promptly, but in no event more than five (5) Business Days from receipt of the invoice, reimburse Ava. (d) Waivers and Releases of Liens. Upon Ava's request, Contractor shall tender waivers and releases of Liens relating to the Work from itself and its Subcontractors in a form acceptable to Ava and complying with Applicable Law. To the extent Contractor has not received payment for Work covered by the waiver and release, the effectiveness of such waiver and release shall be conditioned upon receipt of payment for such Work.
3.12 Books and Records. With respect to each Project, Contractor shall retain, and shall require all Subcontractors to retain, for a period of two (2) years from (a) the Final Completion Date, all records relating to its performance of the Work on such Project, and (b) the end of the applicable warranty period, all records relating to performance of Contractor's warranty obligations herein with respect to such Project.
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3.13 Project Deliverables. For each Project, Contractor shall provide Ava with copies of all building permits and other written Governmental Authorizations, written evidence of Utility Approvals, any printed operations manuals that came with the Equipment, the Project Operations Manual and Project Documentation (the "Project Deliverables") with the Substantial Completion Certificate pursuant to Section 7.7(b). All Project Packages and Project Deliverables shall be the sole property of Ava.
– NOTICE TO PROCEED AND COMPLETION OF WORK
4.1 Project Schedule.
(a) Time is of the Essence. Contractor agrees that retaining the Projects' eligibility for NEM2 is a material term of this Agreement. Accordingly, Contractor shall diligently conduct the Work in a timely manner and according to a schedule that enables Ava to take service under Utility's applicable NEM2 tariff. Contractor shall perform the Work diligently in accordance with the deadlines set forth in the column headed "Milestone Deadline" in the applicable Milestone Schedule table set forth in the Addendum ("Milestone Schedule"). Time is of the essence in the performance of all Work hereunder. Any change to the Milestone Schedule for a Project shall require a Change Order pursuant to Article 5.
(b) Progress Measurements. Contractor shall measure its progress on each Project on a timeline and in a format to be mutually agreed between Ava and Contractor.
4.2 Commencement of Work; New Addendum Processing.
(a) Commencement of Work. The Work with respect to a particular Project covered by a particular Addendum shall commence on the date that Ava executes and delivers the applicable Addendum to Contractor in accordance with Section 4.2(b). Contractor shall submit to Ava the Addendum executed by Contractor on the Effective Date. 4 (b) Processing by Ava. Once the executed Addendum referenced in Section 4.2(a) is received by Ava, Ava shall use reasonable efforts to process, execute and deliver to Contractor the Addendum within three (3) Business Days.
4.3 Notice to Proceed. Contractor shall request in writing (email acceptable) a notice to proceed with procurement, installation, construction, testing, commissioning, and start-up of a Project.
Ava shall respond in writing (email acceptable) within three (3) Business Days. Contractor shall not commence with procurement, installation, construction, testing, commissioning, and start-up of the Project until Ava has provided Contractor with a notice to proceed. Ava, in its sole discretion, may suspend its issuance of a notice to proceed for a Project for any reason until such time as Ava decides to proceed with the Project. Ava, in its sole discretion, shall have the right to suspend a notice to proceed already granted on any Project that Ava believes in its reasonable discretion has violated the 4 Ava NTD: Ava intends to enter into an Addenda for each of the Projects on the Effective Date.
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provisions of this Agreement or if Contractor is otherwise in breach of this Agreement as it relates to the Project in question.
4.4 Final Building Department Approval Delay. In recognition that, to be eligible for NEM2, Final Building Permit Approval must occur with respect to a Project by the date set forth in each Addendum for such Project ("Final Building Permit Approval Deadline"), the Parties agree that if Contractor fails to achieve Final Building Permit Approval by the Final Building Permit Approval Deadline, then Contractor shall pay Ava liquidated damages in the amount set forth in the Addendum ("NEM2 Delay Damages") to compensate Ava for a portion of the financial loss Ava will incur as a result of Ava implementing NBT to exports of energy rather than NEM2.
4.5 Guaranteed Substantial Completion Date. Contractor guarantees that it shall achieve Substantial Completion no later than the Guaranteed Substantial Completion Date, as adjusted pursuant to Article 5 or as a result of Force Majeure Events, City delays, Ava delays or Utility or Governmental Authority delays. The Guaranteed Substantial Completion Date may only be adjusted as provided in this Agreement or by mutual agreement of the Parties. If Contractor fails to achieve Substantial Completion by the Guaranteed Substantial Completion Date, Contractor shall pay Ava liquidated damages in the amount of one thousand dollars ($1,000) for each calendar day of such delay. Contractor's total liability for liquidated damages with respect to Contractor failing to achieve Substantial Completion by the Guaranteed Substantial Completion Date shall be limited to twelve percent (12%) of the Project Contract Price applicable to such Project. – CHANGE ORDERS
5.1 Changes. Either Party may propose, and pursuant to Section 5.2 Ava may require, changes in the Work or Equipment necessitated as a result of unforeseen circumstances (each a "Change"). Except as provided in Section 5.3, no Change shall be made unless expressly agreed to in writing by Ava and Contractor pursuant to the terms and conditions of this Article 5 (“Change Order”).
5.2 Emergencies. Notwithstanding Section 5.1, if a Change is required due to an emergency creating an imminent threat of serious injury or death to person(s) or significant damage to property, Contractor shall be obligated and authorized to proceed in the absence of an approved Change Order.
5.3 Ava-Directed Change Orders. Ava may direct Contractor to perform Changes which affect, among other things, the Project Contract Price, the Project Site and the deadlines set forth on the Milestone Schedule (a "Ava-Directed Change Order"). In such an event, Contractor or Ava, as applicable, may be entitled to an equitable adjustment in the Project Contract Price or the deadlines set forth on the Milestone Schedule, as applicable, if reasonably warranted. Any such direction must be in a written Change Order.
5.4 Draft Change Orders. In the event either Party proposes a Change, or if Ava directs a change pursuant to Section 5.3, Contractor shall prepare a draft Change Order substantially in the form of Exhibit N describing the proposed Change, the cause of such Change, an estimate of any increase or decrease in the Project Contract Price resulting from the proposed Change and the basis for such Attachment Staff Report Item 15B
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estimate, including, but not limited to, vendor pricing for the cost of Equipment added or deleted by such Change, and estimated quantities of Equipment and labor added or deleted by such Change.
Proposed Changes in costs shall be computed based on Contractor’s cost of materials and labor, plus fifteen percent (15%) for administrative overhead; provided that no additional markup shall be included. The draft Change Order shall be accompanied by all detailed supporting documentation from Contractor and any applicable supplier, Subcontractor, or vendor. The draft Change Order shall provide the impacts of such Change on the deadlines set forth in the Milestone Schedule. Contractor may not request a Change if such Change is based on an occurrence or event which occurred more than thirty (30) calendar days prior to date of Contractor's written request for a Change.
5.5 Grounds for Dispute. Ava shall have the right to accept or reject any portion of Contractor's draft Change Order within fifteen (15) Business Days after receipt of such draft Change Order. If Contractor and Ava cannot agree upon a Change, including but not limited to an equitable adjustment to the Project Contract Price or to the deadlines set forth in the Milestone Schedule, materials, Equipment or Work, the provisions of shall be invoked to resolve the dispute. Contractor shall continue to provide other portions of the Work not affected or impacted by such proposed Change until such time as the dispute relating to the proposed Change is resolved.
5.6 Right to Audit. In the event there is an equitable adjustment to the Project Contract Price based on time and materials as a result of a Change Order, Ava shall have the right to audit Contractor's evidence of material and Equipment costs, labor hours, labor rates and other commercially reasonable information to the extent reasonably necessary to verify such equitable adjustment.
5.7 Effect of Approved Change Order. Payment for adjustments to the Project Contract Price resulting from an approved Change Order is due as provided in the relevant Change Order. Upon execution of a Change Order by the Parties, such Change Order and any additional Work and Equipment authorized by said Change Order shall be made part of this Agreement.
5.8 Optional Cancellation of Addenda by Ava.
(a) Ava's Right to Cancel. The Parties acknowledge and agree that the City PPA provides City and Ava with the right to cancel a Project and/or terminate such City PPA in certain circumstances. Should either City or Ava cancel a Project or a City PPA is otherwise terminated according to its terms prior to performance of the applicable Addendum by Contractor, Ava shall have the right, upon written notice to Contractor, to cancel the applicable Addendum. (b) Ava's Right to Terminate for Convenience. In addition to the foregoing, Ava may terminate this Agreement or any Addendum by providing written notice to Contractor that contains a termination effective date that is not less than ten (10) days from the date of such notice. In the event of termination of this Agreement, unless the termination notice provides otherwise, the Parties may, at Ava's discretion as set forth in the notice, fulfill the Addenda executed as of the termination notice date and this Agreement shall terminate upon the completion of all Work related to the Project contemplated by such Addenda.
Attachment Staff Report Item 15B
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(c) Contractor's Obligations Upon Cancellation of an Addendum. Upon Contractor's receipt of notice cancelling or terminating an Addendum pursuant to Section 5.8(a) and Section 5.8(b), Contractor shall, unless the notice directs otherwise:
(i) Immediately discontinue the Work on the date and to the extent specified in such notice and make the Work ready for use under other Addenda or storage as may be directed by Ava;
(ii) Place no further orders for materials or equipment or enter into Subcontracts relating to such Addendum;
(iii) Promptly make every reasonable effort to procure cancellation upon terms satisfactory to Ava of all orders, Subcontracts and rental agreements relating to the Addendum, or modification of such orders, Subcontracts and rental agreements to account for cancellation of such Addendum;
(iv) Deliver to Ava all information prepared hereunder with respect to the Project as may be reasonably requested by Ava and which has been paid for by Ava, including all Design Documents, as-built drawings (completed or in progress), and other information prepared hereunder as of the date of termination and assign to Ava, to the extent assignable, all issued Governmental Authorizations and other rights and documents referenced herein; and (v) Thereafter execute only that portion of the Work under such cancelled or terminated Addendum as may be directed by Ava to preserve and protect the Work already in progress and any equipment and materials present on the Project Site or in transit thereto. (d) Contractor’s Remedies. Contractor waives any claims for consequential damages, including loss of anticipated profits for uncompleted Work, on account of a cancellation or termination by Ava pursuant to Section 5.8(a) and Section 5.8(b), and shall accept as its sole remedy payment of: (i) the Project Contract Price attributable to the Work (including any Work in progress and equipment and materials purchased) properly performed by Contractor and its Subcontractors under the Addendum as of the effective date of cancellation provided that such Work is properly evidenced in such manner reasonably requested by Ava; and (ii) any other out-of-pocket costs and expenses reasonably incurred by Contractor as a result of such cancellation which, under the circumstances and Contractor’s exercise of reasonable diligence, cannot reasonably be avoided by Contractor and are a direct result of such termination and provided that such Work is properly evidenced in such manner reasonably requested by Ava. Contractor shall use best efforts to minimize any such costs of cancellation. Ava shall direct Contractor to either, at Ava’s option, retain all equipment and materials procured for use in performing the Work under such cancelled or terminated Addendum for use in association with performing Work under other executory or future Addenda, or shall provide shipping instructions to Contractor to have such equipment and materials delivered to Ava at Ava's expense. Payments for cancellation under this Section 5.8(d) shall be due within ten (10) Business Days of Ava's receipt and acceptance of a substantiated, itemized invoice and the delivery of any such Work pursuant to the previous sentence (if such delivery is Ava's selected option).
Attachment Staff Report Item 15B
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– CONTRACT PRICE AND PAYMENT TERMS
6.1 Contract Price. As full and total consideration to Contractor for performance of the Work for a Project, Ava shall pay Contractor the Project Contract Price according to the terms and conditions of this Article 6. For each Project, Ava shall pay to Contractor the percentage set forth in the Milestone Schedule of the applicable Project Contract Price for such Milestone in accordance with the provisions of this Article 6 (each such payment, a "Milestone Payment").
6.2 Milestones and Milestone Payment Schedule.
(a) Payment Requests. Once Contractor has achieved a Milestone with respect to a Project, Contractor shall submit to Ava a request in the form attached as Exhibit C ("Payment Request"). Contractor's Payment Request shall certify the completion of the applicable Milestone outlined in the applicable Addendum for such Project as of the end of the period covered by the Payment Request. Ava shall review each Payment Request and, subject to Sections 6.4, Section 6.6 and Section 6.8, countersign each Payment Request by duly authorized personnel of Ava indicating Ava's approval of the Payment Request, and the amount due pursuant to such Payment Request shall be paid by Ava net thirty (30) Business Days from the delivery of Ava's countersignature to the Payment Request.
(b) Milestone Payments. A Milestone Payment amount shall equal the percentage of the Project Contract Price corresponding to the applicable Milestone achieved as indicated in the column headed "Percent of Project Contract Price" on the applicable Milestone Schedule (the "Milestone Percentage").
6.3 Waiver of Liens. Each Payment Request will also be accompanied by all applicable conditional and unconditional executed Lien waivers and releases from the Contractor and each Subcontractor, vendor and supplier that furnished labor, equipment, materials or services with respect to the Project during the period covered by such Payment Request. Contractor's conditional waiver and release shall substantially conform to the form of those included in Exhibit D (Form of Conditional Lien Waiver (Contractor)) and Exhibit E (Form of Conditional Lien Waiver (Subcontractor)). Upon each payment by Ava, Contractor shall execute, and cause all such vendors and suppliers, and Subcontractors to execute an unconditional waiver and release acknowledging receipt of all payments due through the period covered by the previous Payment Request. Contractor's and Subcontractor's vendors' and suppliers' unconditional waivers and releases shall substantially conform to the form of those included as Exhibit F (Form of Unconditional Lien Waiver (Contractor)) and Exhibit G (Form of Unconditional Lien Waiver (Subcontractor)). Contractor shall deliver the executed unconditional Lien releases to Ava within ten (10) calendar days of its next succeeding Payment Request, including the final Payment Request to ensure an effective waiver of mechanics' or materialmen's Liens in compliance with the laws of the State of California. Ava's obligation to make payments is expressly conditioned upon the receipt of all such Lien waivers.
6.4 Disputed Invoices/Late Payments. If Ava disputes any Payment Request, or part thereof, or fails to countersign a Payment Request within thirty (30) Business Days, Ava shall provide to Contractor a written explanation of the basis for the dispute and the dispute resolution procedures Attachment Staff Report Item 15B
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set forth in Article 14 shall be initiated. If any amount disputed by Ava is finally determined to be due to Contractor, either by agreement between the Parties or as a result of dispute resolution pursuant to Article 14, Ava shall be liable for such amount plus interest as designated in Section 6.5 to Contractor.
6.5 Interest. All amounts not paid when due shall bear interest from the due date at the rate of five percent (5%) per annum (or such other percentage, if lower, as shall not exceed the maximum rate permitted by law) (the "Interest Rate").
6.6 Setoff Rights. In the event of Claims that Ava reasonably and in good faith believes are subject to indemnification by Contractor pursuant to Section 12.1 of this Agreement, Ava may withhold from a Milestone Payment owed to Contractor the amount of such Claim that Ava believes in good faith to be subject to indemnification by Contractor ("Setoff Amount"). Ava shall promptly notify Contractor of its determination to withhold any Setoff Amounts from a Milestone Payment and, in such event, such payment will be reduced by the Setoff Amount. In the alternative and at Ava's sole discretion, Ava may seek recovery of the amount of such Claims from Contractor's surety pursuant to Article 15. Ava may seek recovery of the amount of such Claims from the Contractor or such surety without having exhausted remedies against the other.
6.7 Taxes. The Project Contract Price includes all taxes (including sales, use, excise, ad valorem, service, business, occupation or similar taxes), assessments, duties, tariffs, levies, charges and rates ("Taxes") that are imposed by any Governmental Authority on or with respect to the Work and Contractor, including all income tax imposed on or with respect to the Contractor or Subcontractor, employee benefit taxes (whether imposed on Contractor or Subcontractor), fees for Governmental Authorizations and Utility Approvals for which Contractor is responsible under this Agreement, taxes imposed upon the Work or wages of Contractor's employees, agents and representatives. Any Taxes will be remitted to the appropriate Governmental Authority by Contractor; if Ava pays any such Taxes or fees set forth above on account of Contractor, Ava may at its sole option invoice Contractor for such amounts, set off such amounts against amounts due and owing to Contractor or Ava may seek recovery of such Taxes or fees from Contractor's surety pursuant to Article 15.
6.8 Contract Retention. From each Milestone Payment, five percent (5%) will be deducted and retained by Ava, and the remainder will be paid to Contractor. All Contract retention shall be released and paid to Contractor and Subcontractors pursuant to Public Contract Code Section 7107.5 In addition to such retentions, Ava may deduct from each Milestone Payment an amount necessary to protect Ava from loss incurred due to: (a) liquidated damages which have accrued as of the date of the Payment Request; (b) any sums expended by the Ava in performing any of Contractor's obligations under this Agreement which Contractor has failed to perform or has performed inadequately; (c) defective Work not remedied by Contractor; (d) stop notices as required by state law; (e) reasonable 5 Ava NTD: These retention requirements are required for compliance with the Public Contract Code. In compliance with the Public Contract Code, Ava proposes releasing 50% of the total retention for all Projects once 50% of the Projects have achieved Final Completion. Retention for each Project achieving Final Completion after that 50% milestone will be released as each Project achieves Final Completion.
Attachment Staff Report Item 15B
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doubt that the Work can be completed for the unpaid balance of the Contract Price or within the scheduled completion date; (f) unsatisfactory prosecution of the Work by Contractor; (g) unauthorized deviations from this Agreement; (h) failure of Contractor to maintain or submit on a timely basis proper and sufficient documentation as required by this Agreement or by Ava during the prosecution of the Work; (i) erroneous or false estimates by Contractor of the value of the Work performed; (i) any sums representing expenses, losses, or damages as determined by Ava, incurred by Ava for which Contractor is liable under this Agreement; and (j) any other sums which Ava is entitled to recover from Contractor under the terms of this Agreement or pursuant to state law, including Section 1727 of the California Labor Code. The failure by Ava to deduct any of these sums from a Milestone Payment shall not constitute a waiver of the Ava's right to such sums.
6.9 Substitutions for Contract Retention. In accordance with California Public Contract Code Section 22300, Ava will permit the substitution of securities for any monies withheld by Ava to ensure performance under the Agreement. At the request and expense of Contractor, securities equivalent to the amount withheld shall be deposited with Ava, or with a state or federally chartered bank in California as the escrow agent, and thereafter Ava shall then pay such monies to Contractor as they come due. Upon satisfactory completion of a Project, the securities shall be returned to Contractor. For purposes of this Section 6.9 and Section 22300 of the Public Contract Code, the term "satisfactory completion of a Project" shall mean the time Ava has issued written final acceptance of a Project and filed a notice of completion as permitted by Law and provisions of this Agreement.
Contractor shall be the beneficial owner of any securities substituted for monies withheld and shall receive any interest thereon. The escrow agreement used for the purposes of this Section 6.9 shall be in the form provided by Ava.
– TESTING, INSPECTION, SUBSTANTIAL COMPLETION AND FINAL
COMPLETION
7.1 Testing. Contractor shall perform pre-parallel testing and verification required to substantiate that each Project is complete, safe for Utility interconnection and parallel operation, compliant with Applicable Law and capable of achieving the project capacity set forth in the Addendum. Ava or its designee shall have the right to review and approve the testing and verification criteria which must be achieved for each Project as proposed by Contractor. Contractor shall provide notice to Ava of any scheduled test(s) of installed Equipment, and Ava and/or its designees, including but not limited to the Independent Engineer, if so retained, shall have the right to be present at any or all such tests conducted by Contractor, any Subcontractor, and/or manufacturers of the Equipment.
Contractor shall be responsible for correcting and/or adjusting all deficiencies in the Project and equipment operations that Contractor supplied and installed that may be observed during testing and verification procedures. The test procedure set forth herein shall be repeated until the Project passes the test. Contractor shall document all testing and provide written reports detailing such test results ("Test Reports") for the Project to Ava when it delivers the Substantial Completion Certificate for such Project pursuant to Section 7.7(b).
7.2 Installed Capacity Tests. With respect to each Project, prior to Substantial Completion, Contractor shall engage a Licensed Professional Engineer to perform a pre-operational test to Attachment Staff Report Item 15B
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determine the Installed Capacity of the Project in accordance with the process specified in Exhibit H.
No later than ten (10) Business Days prior to conducting such test, Contractor shall notify Ava of the date on which it intends to engage a Licensed Professional engineer to perform such test. Ava and the City shall have the right to be present during any such test. Following the test, Contractor shall deliver a certificate substantially in the form of Exhibit I setting forth the Installed Capacity as of the date Substantial Completion is achieved.
7.3 Storage Capacity Tests.
(a) With respect to each Storage Project, prior to Substantial Completion, Contractor shall schedule and complete a Storage Capacity Test in accordance with Exhibit J.
Thereafter, Contractor and Ava shall have the right to additional Storage Capacity Tests in accordance with Exhibit J. In performing the Storage Capacity Test, Contractor warrants that it will perform such tests in a manner as to not void or otherwise negate any manufacturers' warranty obtained for the equipment.
(b) Ava shall have the right to send one or more representative(s) to witness any Storage Capacity Test. Ava shall be responsible for all costs, expenses, and fees payable or reimbursable to its representatives(s) witnessing any Storage Capacity Test. Except as otherwise specified in Exhibit J, all other costs or revenues associated with any Storage Capacity Test shall be borne by, or accrue to, Contractor, as applicable.
(c) Following each Storage Capacity Test, Contractor shall submit a testing report in accordance with Exhibit J.
7.4 Inspection.
(a) Contractor's Inspection. Contractor shall inspect and test all Work as necessary to ensure compliance with all terms and conditions of this Agreement and Addendum. (b) Inspections Requested by Ava. Contractor shall, at Ava's reasonable request, conduct any inspection on behalf of and pursuant to Ava's reasonable instructions. (c) Inspections Performed by Ava or Independent Engineer. Ava and, if applicable, the Independent Engineer or other designee of Ava, shall be permitted to inspect the Work. To the extent reasonably possible, Ava and such designees will perform inspections in such manner as not to delay the Work, and Contractor shall perform the Work in such manner as not to delay inspections unreasonably. Contractor shall give Ava reasonable advance notice of Work requiring inspection by Ava or City, if applicable, pursuant to Prudent Practices. Contractor shall furnish Ava reasonable facilities for its and its designees' safety and convenience in inspecting the Work. If Ava or its designee finds that conditions are unsafe for inspection at a particular Project Site, they may, upon notice to Contractor, decline to inspect at the Project Site until such conditions are corrected. No acceptance of the Work shall be construed to result from such inspection by Ava or its designee. No inspection or test or waiver thereof shall relieve Contractor of its responsibility for meeting the requirements of this Agreement.
Attachment Staff Report Item 15B
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(d) Notice of Inspections by Third Parties. If this Agreement or Applicable Law requires any portion of the Works to be inspected, tested or approved, Contractor shall give Ava timely notice so that it or its designee may observe such inspection, testing or approval. (e) Costs. Except for inspections by Ava or its designee pursuant to Section 7.4(c), Contractor shall bear all costs of inspections, tests or approvals. (f) Rejection of Work. Ava shall have the right to reject Work not complying with the requirements of this Agreement ("Rejected Services"). Rejected Services shall be replaced or corrected at Contractor's expense. If Ava reasonably determines it is uneconomic or otherwise undesirable for Contractor to replace or correct such Rejected Services, the Project Contract Price shall be reduced by an equitable amount.
7.5 Interconnection. Contractor shall connect the Projects to the electricity distribution system of the Utility and shall ensure that the Projects and their connection to the electricity distribution system conform to all applicable requirements of the Utility and all other Persons with authority over the Projects and their operation and connection to the electricity distribution system.
7.6 System Electrification Approval. Contractor shall not electrify, turn on or operate any Project without the prior, written request of Ava, other than as required pursuant to the testing or inspection procedures set forth in Section 7.1, Section 7.2, Section 7.3 and Section 7.4. Contractor shall place labeling on or around the Project sufficient to inform the City, its employees, invitees and the general public that the Project shall not be electrified, turned on or operated by anyone other than Ava or its contractors or agents. Once Final Completion has been achieved with respect to a Project, Contractor shall electrify such Project within five (5) Business Days of its receipt of written instructions from Ava requesting such action with respect to such Project.
7.7 Substantial Completion
(a) Substantial Completion of the Work. With respect to each Project, "Substantial Completion" shall mean:
(i) Contractor has completed the engineering, procurement, and construction Work pursuant to the terms and conditions of this Agreement with respect to such Project; (ii) The Project is in all respects capable of commercial operation as designed;
(iii) All remaining electrical systems have been checked and are ready for operation and the Project has passed the Project Installation Checklists and Acceptance Tests; (iv) Testing pursuant to Section 7.1 has been conducted and the Project has passed such tests;
Attachment Staff Report Item 15B
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(v) Contractor has verified that the Project may be initially operated without damage to the Project Site or any other property and without injury to any person; (vi) Contractor has certified that Contractor has obtained all Governmental Authorizations necessary for the installation and operation of the Project on or prior to the date on which each such Governmental Authorization is or was required. Copies of the documentation of any such Governmental Authorizations shall be attached to the Substantial Completion Certificate; (vii) Contractor has provided Ava with all documentation required under Section 3.13;
(viii) Contractor has provided the City personnel a basic training covering safety, key equipment, disconnects, preventative maintenance recommendations, and other information as needed to provide such personnel an appropriate familiarity with the Project; (ix) Contractor has delivered unconditional lien waivers with respect to any Work that could result in a Lien on the Project or the Project Site pursuant to Section 6.3; (x) Contractor has delivered a certificate substantially in the form of Exhibit H setting forth the Installed Capacity as of the date Substantial Completion is achieved; (xi) Contractor has paid Ava all amounts owing under this Agreement, if any, including any liquidated damages;
(xii) The Project has been installed in conformance with the terms and conditions of this Agreement and applicable Addendum; and (xiii) All requirements imposed by the Utility for testing and interconnection of the Project have been satisfied, including having been connected to the Utility's distribution system and such connection has been approved by the Utility through the granting of “permission to operate”. (b) Substantial Completion Certificate. Contractor shall provide Ava with forty (40) days written notice of when Contactor believes Contractor will achieve Substantial Completion for a Project. When Contractor believes it has achieved Substantial Completion for a Project, it shall deliver to Ava an executed Substantial Completion Certificate in the form attached hereto as Exhibit K, certifying the achievement of each of the conditions to Substantial Completion for such Project and each other representation and warranty set forth in the Substantial Completion Certificate. Ava shall notify Contractor within fifteen (15) Business Days in writing whether it concurs that the conditions to Substantial Completion have been satisfied or which conditions it believes Contractor has failed to satisfy, in which event Contractor shall perform such additional Work to achieve Substantial Completion. Thereafter, Contractor shall have the right to issue another notice of Substantial Completion. The foregoing procedures shall be repeated, if necessary, until Ava has determined that Contractor has achieved Substantial Completion and has provided written notice of such determination to Contractor ("Substantial Completion Notification").
Attachment Staff Report Item 15B
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7.8 Final Completion
(a) Final Completion of the Work. With respect to each Project, "Final Completion" shall mean:
(i) Substantial Completion has occurred and the conditions for Substantial Completion continue to be satisfied;
(ii) Contractor has certified that Contractor has obtained all Governmental Authorizations and Utility Approvals necessary for the installation and operation of the Project on or prior to the date on which each such Governmental Authorization or Utility Approval is or was required. Copies of the documentation of any such Governmental Authorizations and Utility Approvals shall be attached to the Final Completion Certificate; (iii) All punch list item have been completed to the satisfaction of Ava; and (iv) All of Contractor's materials and waste have been removed from the Project Site and properly disposed of.
(b) Final Completion Certificate. When Contractor believes it has achieved Final Completion for a Project, it shall deliver to Ava an executed Final Completion Certificate in the form attached hereto as Exhibit L, certifying the achievement of each of the criteria of Final Completion with respect to such Project and each other representation and warranty set forth in the Final Completion Certificate. Ava shall notify Contractor within fifteen (15) Business Days in writing whether it concurs that the conditions to Final Completion have been satisfied or which conditions it believes Contractor has failed to satisfy, in which event Contractor shall perform such additional Work to achieve Final Completion. Thereafter, Contractor shall have the right to issue another notice of Final Completion. The foregoing procedures shall be repeated, if necessary, until Ava has determined that Contractor has achieved Final Completion and has provided written notice of such determination to Contractor ("Final Completion Notification") which such notification shall include the date on which Ava deems Final Completion to have occurred (the "Final Completion Date"). The full remaining balance of the Project Contract Price for such Project shall be due net thirty (30) Business Days from the date of the Final Completion Notification for such Project. – WARRANTIES
8.1 Workmanship Warranty. Contractor covenants and warrants that: (a) the Work and the Projects shall be free from defects in design, materials and workmanship; (b) all Work shall comply with all Applicable Laws, Governmental Authorizations, Utility Approvals, permits, standards and Prudent Practices; and (c) the Projects shall be fit for use by the City as commercial photovoltaic solar electric generation and/or battery storage (as applicable) and the Work will be performed, and the Projects will be designed, engineered, procured, installed, constructed, tested, interconnected and energized to be capable of operation, so as to meet or exceed the requirements of the Agreement. For the avoidance of doubt, Contractor's warranty obligations shall apply to the Project Design Work. The workmanship warranty shall survive the termination of this Agreement for a period of two (2) years Attachment Staff Report Item 15B
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following the Substantial Completion date for each Project. If any Project, or any component or portion thereof, fails to conform to the foregoing warranty, Contractor shall, at its own expense (including all "in-and-out" costs), investigate and remedy such defect in a timely manner at Contractor’s expense.
8.2 Roof Damage Warranty. Contractor warrants that no damage will be inflicted on the roof on which any Project ("Project Roof") is installed as a result of the installation of the Project ("Roof Damage Warranty"). With respect to each Project, Contractor shall provide such Roof Damage Warranty starting on the date the Works commence and ending on the date that is the later of (a) ten (10) years after Contractor's most recent performance of installation activities on such Project Roof or (b) the expiration of any then-effective installer warranty on the applicable Project Roof. In the event that Contractor damages any Project Roof during the term of the Roof Damage Warranty, Contractor shall promptly repair and remedy such damage to the reasonable satisfaction of Ava. Contractor shall ensure that its performance of the Work conforms to any requirements of the City's roof warranty, including, but not limited to, coordinating inspections by the applicable roof warrantor, and shall obtain documentation from such roof warrantor that the roof warranty of the City’s roof has been maintained.
8.3 Equipment Warranties. With respect to each Project, Contractor warrants that on the date that Contractor achieves Substantial Completion, all Equipment (a) will be new, (b) will be Error-Free, (c) will be provided by a Tier 1 Supplier, and (d) with respect to each Storage Project, (i) benefits from a manufacturer's warranty (including an energy retention warranty) for the period set forth in the technical requirement attached to the Addenda, and (ii) includes all of the components, functionality, and other material features that affect performance and provides the user experience (i.e., data acquisition and operating controls) of a standard, high-quality storage facility. In procuring all equipment necessary for the Work, Contractor shall obtain all applicable manufacturers' warranties.
In performing the Work, Contractor warrants that it will install all equipment in such a manner as to not void or otherwise negate any manufacturers' warranty. On the date that Contractor achieves Final Completion, Contractor shall deliver to Ava all manufacturers' warranties it obtained when procuring the equipment which shall be for the sole benefit of Ava.
TITLE; RISK OF LOSS
9.1 Title to Work, Equipment and Projects. Title to the Work, Equipment and Project shall pass to Ava on the date Ava provides Contractor with the Substantial Completion Notification with respect to such Project, or, provided Ava has delivered written notice to Contractor requesting such title, upon payment made by Ava in accordance with this Agreement, whichever is earlier. Contractor warrants that legal title to, and ownership of the Work, Equipment and Projects shall be free and clear of any and all Liens when title thereto passes to Ava; provided, that Contractor and its Subcontractors maintain all mechanic's lien or other materialman's lien rights in the event Substantial Completion has occurred, but Contractor has not been paid. Contractor shall deliver to Ava such assignments, bills of sale or other documents as reasonably requested by Ava to evidence such transfer of title.
9.2 Title to RECs and Incentives; Cooperation. Ava or its assignee shall own, is entitled to the benefit of, and may assign or sell in its sole and absolute discretion, all right, title and interest in all RECs and Incentives associated with or resulting from the development and installation of the Attachment Staff Report Item 15B
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Projects and the production, sale, purchase or use of the energy output of the Projects. If necessary, Contractor shall cooperate with Ava in obtaining, securing and transferring any and all RECs and Incentives, including, but not limited to, cooperating, as requested by Ava, with respect to any challenges as to Ava obtaining any portion or amount of the Incentives. Contractor shall not make any filing or statements inconsistent with Ava's ownership interests in the RECs and Incentives, nor shall Contractor attempt to sell, assign or transfer such RECs or Incentives. If any RECs or Incentives are delivered directly to Contractor, Contractor shall immediately deliver such items or amounts to Ava.
Contractor covenants and warrants that Contractor will cooperate and cause others to cooperate, including Subcontractors, with any requests made by Ava with respect to Code Section 6417, and all applicable guidance (the "Elective Pay Rules"), which includes, but is not limited to, any information needed by Ava or its affiliates (as the case may be) involving any audit, proceeding, litigation, or other tax contest, and actions or inactions that are needed to cure, remedy, or satisfy any violations of the Elective Pay Rules. Contractor will provide Ava with any information and documentation necessary to establish reasonable cause exists under the Elective Pay Rules.
9.3 Risk of Loss. Contractor shall have the full responsibility for care, custody and control of the Equipment and Project and shall bear the risk of loss thereof until Ava issues a Substantial Completion Notification to Contractor or the termination of the Agreement, whichever is earlier.
9.4 Damage to Property. Contractor shall be solely responsible for any damage caused to the Project Sites by Contractor or any of its Subcontractors or agents in the course of performing the Work and shall be obligated to reimburse Ava for all costs and expenses incurred in repairing such damage.
9.5 Hazardous Materials; Safety. Contractor shall not bring any hazardous material onto a Project Site without first obtaining the written permission of the City and Ava. Contractor shall not discharge, store, or dispose of any hazardous material, hazardous substances or hazardous wastes on a Project Site. Contractor shall be responsible for all health and safety precautions and measures on the Project Sites, including the number and qualifications of persons on the Project Sites. Contractor shall initiate, maintain and supervise all safety precautions necessary to comply with all applicable provisions of federal, state and local health and safety Applicable Laws and Prudent Practices.
Contractor shall continuously inspect all Work and the Project Sites to discover any conditions which might involve such safety risks and shall be solely responsible for discovery, determination and correction of any such conditions. Contractor shall not be responsible for hazardous materials, hazardous substances or hazardous waste that are not brought to a Project Site by Contractor, a Subcontractor or the agents or employees of Contractor or a Subcontractor, provided that to the extent the presence or discharge of hazardous materials, hazardous substances or hazardous waste is known by Contractor, Contractor shall not worsen such condition as a result of the acts or omissions of Contractor. Ava shall provide Contractor with any information it receives from a City regarding hazardous materials, hazardous substances or hazardous waste in the possession, custody, or control of such City. Contractor shall promptly notify Ava if Contractor becomes aware of any hazardous materials, hazardous substances or hazardous waste on or about a Project Site generally or any deposit, spill or release of any hazardous materials, hazardous substances or hazardous waste.
Attachment Staff Report Item 15B
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9.6 Emergencies. In the event of any emergency endangering life or property, Contractor shall take such action as may be reasonable and necessary to prevent, avoid or mitigate damage, injury or loss and shall report as soon as possible any such incidents, including Contractor's response thereto, via a telephone call to Ava and to the applicable City as soon as possible but, at a minimum, within twenty-four (24) hours of the incident and written notice to Ava promptly thereafter.
9.7 Access to Project Sites. Subject to Ava being granted access to the Project Site pursuant to the Master Site License, Ava or its designee shall arrange for Contractor to have access to the Project Site sufficient to enable Contractor’s performance of the Work pursuant to the deadlines set forth on the Milestone Schedule and other timing requirements of this Agreement. Contractor’s access to the site shall be subject to the requirements of the Site Control Documents. Contractor shall allow Ava and the City at all times complete and unobstructed access to the Project Site and the Work performed by Contractor hereunder provided that Ava shall not unreasonably impede or unreasonably disrupt Contractor’s performance of the Work. For the avoidance of doubt, all Equipment, systems, materials and Work shall be subject to inspection and testing by Ava or its designated representative during normal business hours.
9.8 Project Site Disruptions. In exercising its access to each Project Site for the purpose of performing the Work, Contractor shall provide the applicable City with no less than thirty (30) Business Days of advance notice of when Contractor intends to first access the applicable Project Site and shall reasonably attempt to minimize any disruption to activities occurring on the Project Sites, including, but not limited to, minimizing any disruption in electric service to City. Each City shall have the right to have a representative present at all times during which Contractor is exercising its access to the applicable Project Sites.
9.9 Clean-Up. Contractor shall, at the end of each day during which it performs Works at a Project Site, keep such Project Site free from waste materials or rubbish caused by its operations.
Prior to Final Completion with respect to a Project, Contractor shall remove promptly all of its tools, construction/installation equipment, machinery, surplus materials, waste material and Service-related rubbish from and around the applicable Project Site.
– FORCE MAJEURE
10.1 Definition of Force Majeure.
(a) "Force Majeure" means an event or circumstance that prevents a Party (the "Affected Party") from performing, in whole or in part, an obligation under this Agreement that (i) is not reasonably anticipated by the Affected Party as of the Effective Date or Project Effective Date (as applicable), (ii) is not within the reasonable control of the Affected Party, (iii) is not the result of the negligence, fault or failure to act by the Affected Party, and (iv) could not be overcome or its effects mitigated by the use of due diligence by the Affected Party. Force Majeure includes the following types of events and circumstances (but only to the extent that such events or circumstances satisfy the requirements in the preceding sentence): tornado, hurricane, lightning, tsunami, flood, earthquake or other acts of God, fire, explosion, invasion, acts of terrorism, war (declared or undeclared) or other armed conflict, riot, revolution, insurrection or similar civil disturbance, global pandemic (except as Attachment Staff Report Item 15B
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excluded below), sabotage, strikes, walkouts, lock-outs, work stoppages or other labor disputes (in each case, not attributable to the actions of Contractor); and action, inaction or restraint by a Governmental Authority that materially impairs the Affected Party's ability to perform its obligations under this Agreement and does not result from the action or inaction of the Affected Party (or any affiliate thereof), provided that the Affected Party has used and continues to use its commercially reasonable efforts to timely request and diligently pursue the applicable action or inaction of such Governmental Authority.
(b) Notwithstanding the foregoing, none of the following shall constitute Force Majeure: (i) inability to obtain any supply of goods or services, unless due to an independent event of Force Majeure; (ii) economic hardship, including lack of money; (iii) the increased cost of electricity, materials, equipment, steel, labor services or transportation; (iv) delays in customs or similar regulatory clearance, unless due to an independent event of Force Majeure; or (vi) any equipment failure unless due to an independent event of Force Majeure.
10.2 No Liability if Force Majeure Occurs. The Affected Party shall not be considered to be in default in the performance of its obligations hereunder to the extent that the failure or delay of its performance is due to an event of Force Majeure, and the other Party shall be excused from its corresponding performance obligations for the period of the Affected Party's failure or delay of performing; provided, that the Affected Party's excuse from performance is limited to those Projects that are affected by Force Majeure. The burden of proof for establishing the existence and consequences of Force Majeure lies with the Affected Party.
10.3 Notice of Force Majeure. Within seven (7) days of becoming aware of the event of Force Majeure, the Affected Party shall provide the other Party with written notice describing in detail the occurrence giving rise to the event of Force Majeure, including the nature, cause, estimate date of commencement thereof, the affected Projects, and the anticipated extent of any delay or interruption in performance. Failure to provide timely notice constitutes a waiver of the event of Force Majeure.
Upon written request from Ava, Contractor shall provide documentation demonstrating to Ava's reasonable satisfaction that each day of the claimed delay was the result of Force Majeure and did not result from Contractor's actions or failure to exercise due diligence or take reasonable actions. The Affected Party shall promptly notify the other Party in writing of the cessation or termination of such event of Force Majeure, all as known or estimated in good faith by the Affected Party.
10.4 Mitigation of Force Majeure Event. The suspension of a Party's performance under this Agreement and Addendum due to a claim of Force Majeure shall be limited to Projects that are materially affected by such event of Force Majeure and must be of no greater scope and of no longer duration than is required by the event of Force Majeure. The Affected Party shall take, or cause to be taken, such actions as may be necessary to void, nullify or otherwise mitigate, in all material respects, the effects of such event of Force Majeure. The Parties shall take all reasonable steps to resume normal performance under this Agreement after the cessation of any event of Force Majeure.
Attachment Staff Report Item 15B
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– INSURANCE
11.1 Coverage. Contractor shall purchase and maintain, and shall require that each Subcontractor purchases and maintains, in full force and effect insurance policies as will protect it from all Claims which may arise out of or result from such person's or its employees' and agents' Work whether such Work be provided by itself or by any contractor, subcontractor or agent or by anyone directly or indirectly hired by any of them, or by anyone for whose acts any of them may be liable. At a minimum, such insurance shall be of the types and in the amounts set forth on Exhibit B hereto and Contractor shall comply, and cause any Subcontractor to comply, with all terms and conditions of Exhibit B hereto. The insurance coverage and limits required by this Agreement and obtained or maintained by Contractor and any Subcontractor shall not limit the liabilities or obligations assumed by Contractor in any way.
– INDEMNIFICATION; LIMITATION OF LIABILITY
12.1 Indemnification by Contractor. To the fullest extent permitted by law, Contractor shall indemnify, defend and hold harmless Ava, its officers, directors, agents, employees, affiliates, representatives and assigns from and against all third-party claims, liability or losses ("Claims"), including but not limited to those losses arising from (a) personal injury or death, (b) damage to property, (c) taxes for which Contractor is responsible under this Agreement, (d) fines or penalties payable by the Contractor, (e) Contractor's violation of Applicable Law or breach of this Agreement, (e) any failure to timely remove a Lien on the Equipment, a Project or Project Site in violation of Section 3.11; and (f) any other acts or omissions resulting in damages, losses or liabilities to the extent such losses result from or arise out of or in any way are connected with Contractor's performance of this Agreement or Ava's use of any service, technology or good provided by Contractor to Ava under this Agreement infringes any patent, trademark, copyright or other intellectual property right, including trade secret rights, of a third-party, except as may arise solely from the negligence, willful misconduct or violation of Applicable Law by Ava, its officers, employees, subcontractors or agents.
Notwithstanding the above, Contractor shall not be required to defend, indemnify, and hold harmless Ava for Ava's own negligent acts, omissions or willful misconduct.
12.2 Design Professional Services. To the extent that a portion of Contractor's services under this Agreement are design professional services subject to Civil Code Section 2782.8, and to the extent that a particular claim or litigation arises from such design professional services, Contractor's obligations under this Article 12 shall be subject to any applicable limitations mandated by Civil Code Section 2782.8.
12.3 Notice and Participation in Third Party Claims. Ava shall give Contractor written notice with respect to any liability asserted under a Claim as soon as possible upon the receipt of information of any possible Claim or of the commencement of such Claim. Contractor may assume the defense of any Claim, at its sole cost and expense, with counsel designated by Contractor and reasonably satisfactory to Ava. Ava may, however, select separate counsel if both Parties are defendants in the Claim and such defense or other form of participation is not reasonably available to Contractor. Contractor shall pay the reasonable attorneys' fees incurred by such separate counsel until such time as the need for separate counsel expires. Ava may also, at the sole cost and expense of Attachment Staff Report Item 15B
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Contractor, assume the defense of any Claim if Contractor fails to assume the defense of the Claim within a reasonable time. Contractor may not settle any Claim covered by this Section 12.3 unless it has obtained the prior written consent of Ava, which consent shall not be unreasonably withheld or delayed. All of the Parties' obligations under this Section 12.3 are intended to apply to the fullest extent permitted by Applicable Law and shall survive the expiration or sooner termination of this Agreement.
12.4 Environmental Indemnification. Contractor shall indemnify, defend, and hold harmless each of Ava and its affiliates, contractors, agents, and employees from and against all liabilities arising out of or relating to the existence at, on, above, below or near the Project Site of any hazardous substance to the extent deposited, spilled or otherwise caused by Contractor or its of its affiliates, subcontractors, agents, or employees, unless such hazardous substances existed prior to the Effective Date and the existence thereof was not known by Contractor and was not reasonably apparent or reasonably inferred from, any information provided by Ava to Contractor or within public records relating to the Project Site prior to such release.
12.5 Notices. Each Party shall promptly notify the other Party if it becomes aware of any hazardous substance on or about the Project Site generally or any deposit, spill or release of any Hazardous Substance.
12.6 Limitation of Liability. EXCEPT WITH RESPECT TO (A) CONTRACTOR'S
INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT OR (B) LIABILITY ARISING OUT
OF A PARTY'S GROSS NEGLIGENCE, WILLFUL MISCONDUCT, FRAUD, OR ILLEGAL OR
UNLAWFUL ACTS, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR INDIRECT, INCIDENTAL, PUNITIVE, EXEMPLARY, SPECIAL OR
CONSEQUENTIAL DAMAGES, LOST PROFIT OR BUSINESS INTERRUPTION DAMAGES,
WHETHER BY STATUTE, IN TORT, OR CONTRACT, EXCEPT TO THE EXTENT THAT ANY
PAYMENTS REQUIRED TO BE MADE PURSUANT TO THIS AGREEMENT ARE DEEMED TO BE SUCH DAMAGES. This Section 12.6 shall prevail over any conflicting or inconsistent provisions contained elsewhere in this Agreement.
– DEFAULT
13.1 Events of Default. Any of the following occurrences or events, by or against Contractor and by or against Ava, shall constitute a default under this Agreement:
(a) Breach of any of the terms, conditions, representations, warranties, or guarantees expressed in this Agreement;
(b) Filing of a voluntary petition in bankruptcy, confession of insolvency, or any assignment for the benefit of Contractor's creditors; and (c) Contractor assigns or transfers the Agreement or any right or interest therein except as expressly permitted in accordance with this Agreement.
13.2 Ava's Rights.
Attachment Staff Report Item 15B
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(a) In the event that Contractor is in default of this Agreement pursuant to Section 13.1, and fails to cure such default within twenty (20) days following receipt of written notice from Ava that an event of default has occurred, then Ava may exercise any rights and remedies available to it at law or in equity, including, but not limited to, seeking an order of specific performance or injunctive relief, suspending its or Contractor's performance under this Agreement, exercising its rights under the payment and performance bonds, and terminating the Agreement for cause, and following termination, Ava may pursue any and all other rights and remedies afforded at law or in equity. Furthermore, Ava shall have the right to take possession of all of Contractor's materials tools and equipment located at the Project Site for the purpose of completing the Work and may employ any other person, firm or corporation to finish the Work by whatever method Ava may deem expedient, provided, however, if Contractor has begun, in good faith, curing such default within the period specified above, but the cure using Prudent Practices requires a longer period to accomplish, then Ava shall have no cause for termination or Ava's completion of the Work so long as Contractor is diligently pursuing such cure. Ava shall be entitled to recover from Contractor the difference between the amount paid to a replacement Contractor to complete the Work in accordance with this Agreement and the remaining portion of the amounts payable to Contractor for the Work that it failed to complete under this Agreement, plus any incidental expenses relating to the retention of such replacement Contractor.
13.3 Contractor's Rights. In the event that Ava is in default of this Agreement pursuant to Section 13.1, and fails to cure such default within twenty (20) days following receipt of written notice from Contractor that an event of default has occurred, then this Agreement may be terminated by Contractor for cause, provided, however, if Ava has begun, in good faith, curing such default within the period specified above, but the cure using Prudent Practices requires a longer period to accomplish, then Contractor shall have no cause for termination so long as Ava is diligently pursuing such cure. – TERMINATION
14.1 Termination. This Agreement may be terminated (a) by either Party pursuant to the provisions of Section 5.8(b) and Article 13; or (b) at any time upon mutual written agreement of both Parties. Upon termination, Contractor shall promptly withdraw from each Project Site, remove such materials and any debris or waste generated by Contractor or its Subcontractors and leave each Project Site in a safe condition, consistent with Prudent Practices.
14.2 Effect of Termination due to Ava Default. In the event of termination due to Ava's default, Ava shall pay to Contractor that portion of the Contract Price associated with all payment milestones achieved plus a pro rata portion of the Milestone Payment amounts for payment milestones partially achieved up to the date of Contractor's receipt of notice of termination plus any costs attributable to and incurred in terminating the Work, but in no event shall the total amount exceed the Contract Price. Ava shall pay Contractor all its incremental costs for terminating the Work and leaving the Project Sites in a safe condition.
14.3 Effect of Termination due to Contractor Default. In the event of termination due to Contractor's default, Ava shall pay to Contractor that portion of the Contract Price associated with all Milestones achieved plus a pro rata portion of the Milestone Payment amounts for Milestones partially achieved up to the date of Contractor's receipt of notice of termination. In addition to those remedies Attachment Staff Report Item 15B
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available to Ava pursuant to Section 13.2, Ava may, at its option, take possession of all Work and Equipment for which Ava has paid Contractor, including all designs, drawings, plans, and specifications prepared as part of the Project Designer Services, including all intellectual property and proprietary rights related thereto. If Ava makes such an election, Contractor shall (i) assign and transfer to Ava all of Contractor's right, title and interest in Contractor's contracts with its Subcontractors (including all warranties and guarantees thereunder) with respect to Equipment or Projects that have been paid for by Ava, and (ii) cooperate with Ava and allow Ava to access and use all other data, drawings, documents, specifications, permits, and other information in its possession relating to the Projects, including proprietary intellectual property furnished by Contractor.
14.4 Survival. Article 2, Section 3.8, [Section 3.10], Section 4.4, Article 6, Section 7.6, Section 9.1, Section 9.2, Section 9.3, Section 9.4, Section 9.5, Section 9.6, Section 9.7, Article 8, Article 12, Article 13, Article 14, Article 15, Article 16, and Article 18 shall survive the termination or expiration of this Agreement.
– PERFORMANCE AND PAYMENT BONDS
15.1 Generally. Contractor shall maintain and provide for the benefit of Ava, in accordance with the terms and conditions of this Article 15, performance and payment bonds with penal sums as described below in the form attached as Exhibit M and from a bonding agency or surety approved by Ava and licensed in the state(s) where all Project Sites are located and with an A.M. Best's rating of A+ or better. If the bonding agency or surety's rating drops below that required in the foregoing sentence, Ava may require Contractor to replace the surety with another surety acceptable to Ava and that meets the foregoing rating requirements.6
15.2 Period of Maintenance. The performance and payment bonds shall be maintained and effective commencing no later than ten (10) days after the Effective Date, and remain in effect until the expiration of each of Contractor's warranties given pursuant to this Agreement.
15.3 Penal Sums. The performance and payment bonds shall have penal sums equivalent to (a) from the bond issuance date under Section 15.2 and until Final Completion has been achieved for all Projects, the Contract Price, and (b) from the date on which Final Completion has been achieved for all Projects and until the later of the expiration of each of Contractor's warranties given pursuant to this Agreement, One Million Dollars ($1,000,000).
15.4 Costs. All costs and expenses relating to the procurement and maintenance of the performance and payment bonds shall be borne solely by Contractor.
15.5 Attorneys' Fees. The performance and payment bonds shall provide that attorneys' fees shall be awarded to Ava if it prevails on any suit on the bonds. 6 Ava NTD: Contractor to confirm whether it can procure a single payment and a single performance bond for all of the Project, while naming the applicable Cities as additional insured.
Attachment Staff Report Item 15B
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- DISPUTE RESOLUTION
16.1 Contractor Claims. All disputes regarding claims brought by the Contractor for (a) a time extension, including, without limitation, for relief from damages or penalties for delay assessed by Ava, (b) payment by Ava of money or damages arising from work done by, or on behalf of, the Contractor pursuant to this Agreement payment, for which is not otherwise expressly provided or to which the claimant is not otherwise entitled, or (c) payment of an amount that is disputed by Ava, shall be subject to Public Contract Code Section 9204 and Public Contract Code Section 20104, et seq. (Article 1.5), where applicable. This Agreement hereby incorporates those provisions as though fully set forth herein. The Contractor or any Subcontractor must file a claim in accordance with Section 9204 and Article 1.5 (if applicable), and must then adhere to Section 9204 and Article 1.5 (as applicable). In addition to compliance with Public Contract Code Section 9204 and Article 1.5, filing a claim in accordance with the Government Claims Act (Government Code Section 810 et seq.) is a prerequisite to filing any lawsuit against Ava relating to this Contract.
16.2 Other Disputes. For all other disputes not falling within the scope of Section 16.1, the Parties shall follow the dispute regime set forth in this Section 16.2. Within ten (10) days following the receipt of a written notice from either Party identifying such dispute, the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally, and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either (a) thirty (30) days of initiating such discussions or (b) forty (40) days after notice of the dispute, the Parties shall submit the dispute to mediation prior to seeking any and all remedies available to it at law or in equity.
The Parties shall cooperate in selecting a qualified neutral mediator selected from a panel of neutrals and in scheduling the time and place of the mediation as soon as reasonably possible, but in no event later than thirty (30) days after the request for mediation is made. The Parties agree to participate in the mediation in good faith and to share the costs of the mediation, including the mediator's fee, equally, but such shared costs shall not include each Party's own attorneys' fees and costs, which shall be borne solely by such Party. If the mediation is unsuccessful, then either Party may seek any and all remedies available to it at law or in equity, subject to the limitations set forth in this Agreement. – REPRESENTATIONS AND WARRANTIES
17.1 Contractor Representations and Warranties. Contractor hereby represents and warrants as follows:
(a) Organization. It is duly organized, validly existing and in good standing under the Applicable Law of the jurisdiction of its organization. (b) Power and Authority. It has the power to make and carry out this Agreement and to perform its obligations hereunder and all such actions have been duly authorized by all necessary proceedings on its part.
(c) No Conflict. The execution, delivery and performance of this Agreement will not conflict with, result in the breach of, constitute a default under or accelerate performance required Attachment Staff Report Item 15B
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by any of the terms of its organizational documents or any Applicable Law or any covenant, agreement, understanding, decree or order to which it is a party or by which it or any of its properties or assets is bound or affected.
(d) Validity and Binding Effect. This Agreement has been duly and validly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms, except to the extent that its enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general principles of equity.
(e) No Bankruptcy. No event of bankruptcy has occurred with respect to the Contractor or any affiliate thereof.
(f) Qualification. Contractor and each of Contractor's Subcontractors is and will be authorized to do business in the jurisdictions in which it will perform the Work, is and will be in good standing in the State of California and has and will have the lawful power to engage in the business it presently conducts and contemplates conducting. (g) Licenses. Contractor and each of Contractor's Subcontractors is and will be duly licensed to perform the Works as required by Applicable Law. (h) Bonding. Contractor and each of Contractor's Subcontractors has and will have posted license bonds as required by Applicable Law.
(i) Insurance. Contractor and each of Contractor's Subcontractors has and will maintain all insurance required under this Agreement, in accordance with Article 12. (j) Knowledge and Experience. Contractor and each of Contractor's employees and Subcontractors has and will have all the required authority, ability, skill, experience and capacity necessary to perform the Work and diligently do so in a timely and professional manner, utilizing sound project management procedures, construction procedures and supervisory procedures, all in accordance with this Agreement, Applicable Law, Governmental Authorizations, Utility Approvals and Prudent Practices. Contractor has the experience and skills necessary to determine, and Contractor has reasonably determined, that Contractor can perform the Work for the Contract Price. (k) Project Site Conditions. Contractor has inspected the Project Sites and satisfied itself as to the conditions and circumstances affecting the Work that could be reasonably ascertained as of the Effective Date by reviewing reasonably available documentation, including technical information and requirements, the Project Package and local conditions and circumstances. (l) No Litigation. There is no action, suit, proceeding, or investigation pending or, to Contractor's knowledge, currently threatened against Contractor for construction contracts, engineering, procurement and construction contracts, operations and maintenance contracts, design agreements, other forms of contracts for any of the types of Work provided hereunder, subcontracts (subcontractors), collective bargaining agreements or surety guarantees.
Attachment Staff Report Item 15B
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17.2 Ava's Representations and Warranties. Ava hereby represents and warrants as follows:
(a) Ava is a joint powers authority and a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations, and orders of the California Public Utilities Commission, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All persons making up the governing body of Ava are the elected or appointed incumbents in their positions and hold their positions in good standing in accordance with the Joint Powers Agreement and all Applicable Law.
(b) Ava has the power and authority to enter into design-build agreements. The execution, delivery and performance of this Agreement by Ava has been duly authorized by all necessary action on the part of Ava and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Ava or any other party to any other agreement with Ava.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Ava with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Applicable Law presently in effect having applicability to Ava, the documents of formation of Ava or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Ava is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Ava. (e) Ava is a "local public entity" as defined in Section 900.4 of the Government Code of the State of California.
– MISCELLANEOUS PROVISIONS
18.1 Assignment. Contractor may not assign or transfer this Agreement or its rights or obligations hereunder, in whole or in part, without the prior written consent of Ava, which consent shall not be unreasonably withheld, conditioned, or delayed. This Agreement shall be binding upon and inure to the benefit of the Parties hereto, their successor and assigns. Any purported assignment in violation of this Section 18.1 is void ab initio.
18.2 Change in Law. In the event that any Change in Law occurring after the Effective Date results in this Agreement or any provision hereof being incapable of being performed or administered, then either Party may request that the Parties 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, the Parties shall engage in such negotiations in good faith. If the Parties 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 either Party may submit issues pertaining to changes to this Agreement to the dispute Attachment Staff Report Item 15B
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resolution process set forth in Article 16. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, or constitute, or form the basis of, an event of Force Majeure, and (ii) all unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution.7
18.3 Amendments. No change, amendment or modification of this Agreement or Addendum shall be valid or binding upon the parties hereto unless such change, amendment, or modification shall be in writing and duly executed by both Parties.
18.4 No Waiver. Any failure of Ava or Contractor to enforce any of the provisions of this Agreement or to require at any time performance by Contractor or Ava of any of the provisions hereof during the pendency of this Agreement shall in no way affect the validity of this Agreement, or any part hereof, and shall not be deemed a waiver of the right of Ava or Contractor thereafter to enforce any and each such provision.
18.5 No Third-Party Beneficiaries. This Agreement is made and entered into for the sole protection and legal benefit of Ava and Contractor, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement.
18.6 Governing Law; Venue. 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 extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. The Parties agree that any suit, action or other legal proceeding by or against any Party (or its affiliates or designees) with respect to or arising out of this Agreement shall be brought in the federal courts of the United States or the courts of the State of California sitting in Alameda County, California.
18.7 Entire Contract. This Agreement along with the Addendum and Exhibits B through M (which are incorporated into this Agreement by this reference and deemed to be an integral part of this Agreement), contains the entire understanding of the Parties with respect to the subject matter hereof and supersedes any and all prior negotiations, contracts, agreements, commitments, and writings with respect thereto. There are no oral understandings, terms or conditions and neither Party has relied upon any representation, express or implied, not contained in this Agreement and the Addendum.
18.8 Relationship of Agreement and Addendum. The Parties intend to enter into separate Addenda setting forth the particular terms and conditions for each Project designed, engineered, procured, installed and constructed by Contractor. As such, each Addendum executed on or after the Effective Date shall incorporate, in toto, all of the terms and conditions of this Agreement. 7 Ava NTD: Approach to tariff risk to be discussed by the parties.
Attachment Staff Report Item 15B
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18.9 Performance of Obligations. If an obligation to be performed under this Agreement falls due on a day other than a Business Day, the obligation shall be due on the next Business Day.
18.10 Further Assurances. Each of the Parties hereto agree 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.
18.11 No Recourse to Members of Ava. Ava is organized as a joint powers authority in accordance with the Joint Powers Act pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Ava shall solely be responsible for all debts, obligations, and liabilities accruing and arising out of this Agreement. Contractor shall have no rights and shall not make any claims, take any action, or assert any remedies against any of Ava's constituent members, or the employees, directors, officers, consultants or advisors of Ava or its constituent members, in connection with this Agreement.
18.12 Counterparts; Electronic Signatures. 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. The Parties may rely on electronic or scanned signatures as originals. Delivery of an executed signature page of this Agreement by electronic format (including portable document format (.pdf)) shall be the same as delivery of an original executed signature page.
18.13 Confidentiality; Press Releases.
(a) Definition of Confidential Information. "Confidential Information" whether oral or written, which is delivered by Contractor to Ava or by Ava to Contractor, including: (i) the pricing and other commercially sensitive terms and conditions of, and proposals and negotiations related to, this Agreement, and (ii) information that either Contractor or Ava stamps or otherwise identifies as "confidential" or "proprietary" before disclosing it to the other. Confidential Information does not include (a) information that was publicly available at the time of disclosure, other than as a result of a disclosure in breach of this Agreement; (b) information that becomes publicly available through no fault of the recipient after the time of the delivery; (c) 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 restriction against disclosing such information to the recipient; and (d) information that the recipient independently developed without a violation of this Agreement. Notwithstanding the foregoing, the Parties acknowledge and agree that Ava intends to make publicly available a version of this Agreement with certain commercially sensitive provisions removed or redacted.
(b) Duty to Maintain Confidentiality. Confidential Information will retain its character as Confidential Information but may be disclosed by the recipient (the "Receiving Party") if and to the extent such disclosure is required (i) to be made by any requirements of law, (ii) pursuant to an order of a court, or (iii) in order to enforce this Agreement. If the Receiving Party becomes legally compelled (by interrogatories, requests for information or documents, subpoenas, summons, Attachment Staff Report Item 15B
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civil investigative demands, or similar processes or otherwise in connection with any litigation or to comply with any Applicable Law, order, ruling, regulatory request, accounting disclosure rule or standard or any CAISO rule) to disclose any Confidential Information of the disclosing Party (the "Disclosing Party"), Receiving Party shall provide Disclosing Party with prompt notice so that Disclosing Party, at its sole expense, may seek an appropriate protective order or other appropriate remedy. The Receiving Party is not required to defend against such request and shall be permitted to disclose such Confidential Information of the Disclosing Party, with no liability for any damages that arise from such disclosure. The Parties acknowledge and agree that this Agreement, and information and documentation provided in connection with this Agreement, including Confidential Information, may be subject to the California Public Records Act (Government Code Section 7920 et seq.), and Ava shall incur no liability arising out of any disclosure of such information or documentation provided in connection with this Agreement, including Confidential Information, that is subject to public disclosure under the California Public Records Act. (c) Irreparable Injury; Remedies. Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect the 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, in addition to any other remedies that may be available, in law, in equity or otherwise, 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. (d) Disclosure to Financing Parties, etc. Notwithstanding anything to the contrary in this Article 18, Confidential Information may be disclosed by the Parties to any actual or potential Financing Party or investor or any of its affiliates, and the Parties' actual agents, consultants, contractors or trustees, so long as the Person to whom Confidential Information is disclosed is either (x) bound by similarly restrictive confidentiality obligations as those contained in this Agreement, or (y) agrees in writing to be bound by the confidentiality provisions of this Article 18 to the same extent as if it were a Party.
(e) Press 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. For the purposes of this section and to the extent the information is not prohibited from disclosure under Applicable Law, press release does not include records released by Ava, including annual comprehensive financing reports; memorandums or reports to Ava's board members; documentations submitted to regulatory agencies; disclosures related to public financings; and productions of records required by subpoena, court order or under the California Public Records Act.
18.14 Severability. 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 Attachment Staff Report Item 15B
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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.
18.15 Labor Code Compliance.
(a) Contractor acknowledges that this contract is subject to the provisions of Division 2, Part 7, Chapter 1 (commencing with Section 1720) of the California Labor Code relating to public works, and agrees to be bound by all the provisions thereof as though set forth in full herein. (b) This is a public work and requires the payment of prevailing wages for the work or craft in which the worker is employed for any public work done under the Agreement by Contractor or by any subcontractor pursuant to Section 1771 of the Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, Ava has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of workman needed to execute this contract from the Director of the Department of Industrial Relations. These rates are on file with the Authority or may be obtained at http://www.dir.ca.gov/OPRL/DPreWageDetermination.htm.
(c) Contractor shall post a copy of such wage rates at the job site and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with the provisions of Sections 1775, 1776, 1777.5, 1777.6, and 1813 of the Labor Code. Pursuant to the provisions of 1775 of the Labor Code, Contractor shall forfeit to the Ava, as a penalty, not more than two hundred dollars ($200) for each calendar day, or portion thereof, for each laborer, worker, or mechanic employed, paid less than the stipulated prevailing rates for any work done under this Agreement, by him or by any subcontractor under him, in violation of the provisions of this Agreement. (d) In accordance with Labor Code Sections 1725.5 and 1771.1, and except for projects involving construction, alteration, demolition, installation, or repair work of twenty five thousand dollars ($25,000) or less, or maintenance work of fifteen thousand dollars ($15,000) or less, no contractor or subcontractor shall be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any public work contract unless currently registered and qualified to perform public work pursuant to Section 1725.5.
(e) Pursuant to Labor Code Section 1776, Contractor shall maintain and make available an accurate record showing the name of each worker and hours worked each day and each week by each worker employed by Contractor performing services covered by this Agreement. Contractor and its subcontractors shall furnish electronic certified payroll records to the Labor Commissioner in accordance with Labor Code Section 1771.4. The project is subject to compliance monitoring and enforcement by the Department of Industrial Relations. The Contractor is responsible for compliance with Section 1776 by itself and all of its subcontractors. The Contractor shall post job site notices, as prescribed by regulation.
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(f) Contractor shall comply with and be bound by the provisions of Labor Code Sections 1777.5, 1777.6 and 1777.7 and California Code of Regulations Title 8, Section 200 et seq. concerning the employment of apprentices on public works projects. The Contractor shall be responsible for compliance with these Sections for all apprenticeable occupations. Before commencing Work on a Project, the Contractor shall provide the Authority with a copy of the information submitted to any applicable apprenticeship program. Within sixty (60) days after concluding Work, Contractor and each of its subcontractors shall submit to the Ava a verified statement of the journeyman and apprentice hours performed under this Agreement. (g) Contractor agrees to comply with the provisions of California Labor Code Section 1813 concerning penalties for workers who work excess hours. The Contractor shall, as a penalty to Ava, forfeit twenty-five dollars ($25) for each worker employed in the execution of the contract by the Contractor or by any subcontractor for each calendar day during which such worker is required or permitted to work more than eight (8) hours in any one calendar day and forty (40) hours in any one calendar week in violation of the provisions of Division 2, Part 7, Chapter 1, Article 3 of the California Labor Code.
(h) California Labor Code Sections 1860 and 3700 provide that every contractor will be required to secure the payment of compensation to its employees. In accordance with the provisions of California Labor Code Section 1861, by signing the Agreement in which these terms are incorporated, Contractor hereby certifies as follows: "I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract."
18.16 Antitrust Claims. This Agreement is subject to Public Contract Code Section 7103.5.
In entering into this Agreement to supply goods, services or materials, Contractor hereby offers and agrees to assign to Ava all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Section 15) or under the Cartwright Act (Chapter 2, commencing with Section 16700, of Part 2 of Division 7 of the Business and Professions Code) arising from purchases of goods, services, or materials pursuant to this Agreement. This assignment shall be made and become effective at the time Ava tenders final payment to Contractor, without further acknowledgment by the parties.
18.17 State Audit. This Agreement is subject to the examination and audit of the California State Auditor, at the request of the public entity or as part of any audit of the public entity, for a period of three (3) years after final payment under the contract. The Parties acknowledge that the Parties may be subject to examination and audit by the California State Auditor and shall cooperate with respect to such audit.
18.18 Conflict of Interest. Contractor maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Contractor, to solicit or secure this Agreement. Further, Contractor warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Contractor, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from Attachment Staff Report Item 15B
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the award or making of this Agreement. For breach or violation of this warranty, Ava shall have the right to rescind this Agreement without liability. For the term of this Agreement, no director, official, officer or employee of Ava, during the term of his or her service with Ava, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. In addition, Contractor agrees to file, or to cause its employees or subcontractors to file, a Statement of Economic Interest with Ava’s filing officer as required under state law in the performance of the Work.
18.19 Skilled and Trained Workforce. Unless exempt, the Contractor and its subcontractors at every tier will use a skilled and trained workforce to perform all Work under this Agreement that falls within an apprenticeable occupation in the building and construction trades. In accordance with Labor Code Section 2600, et seq., at least 30 percent (30%) of the skilled journeypersons employed to perform work on the Agreement by the entity and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation that was approved by the Chief of the Division of Apprenticeship Standards pursuant to Section 3075 of the Labor Code. At any time upon Ava's request, the Contractor shall provide monthly evidence while the Agreement is being performed, that Contractor and its subcontractors are complying with the foregoing requirements.
18.20 Third Party Claims. Pursuant to Public Contract Code Section 9201, Ava has full authority to compromise or otherwise settle any claim relating to this Agreement at any time. Ava shall timely notify Contractor of the receipt of any third-party claim relating to the Agreement. Ava shall be entitled to recover its reasonable costs incurred in providing the notification required by Public Contract Code Section 9201(b).
18.21 Contractor's License and Classification. The Contractor's Class [__] California contractor's license number is [INSERT CONTRACTOR LICENSE NUMBER]. 8 18.22 Licensed Contractor Notice. Contractors are required by Applicable Law to be licensed and regulated by the Contractors' State License Board, which has jurisdiction to investigate complaints against contractors if a complaint regarding a patent act or omission is filed within four (4) years of the date of the alleged violation. A complaint regarding a latent act or omission pertaining to structural defects must be filed within ten (10) years of the date of the alleged violation. Any questions concerning a contractor may be referred to the Registrar, Contractors' State License Board, P.O. Box 26000, Sacramento, CA 95826.
18.23 Trenching Work.
(a) If the Work governed by this Agreement entails excavation of any trench or trenches five (5) feet or more in depth, Contractor shall comply with all applicable provisions of the California Labor Code, including Section 6705. To this end, Contractor shall submit for Ava’s review and approval a detailed plan showing the design of shoring, bracing, sloping, or other provisions to be made for worker protection from the hazard of caving ground during the excavation of such trench or 8Ava NTD: Contractor to please confirm.
Attachment Staff Report Item 15B
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trenches. If such plan varies from the shoring system standards, the plan shall be prepared by a registered civil or structural engineer.
(b) In accordance with Labor Code Section 6707, and in addition to the foregoing, all work that entails excavation of any pipeline, sewer, sewage disposal system, boring and jacking pit, or similar trenches or open excavations which are five feet or deeper, shall comply with all applicable safety orders.
(c) As required by Public Contract Code Section 7104, if this Agreement involves digging trenches or other excavations that extend deeper than four (4) feet below the surface, Contractor shall promptly, and prior to disturbance of any conditions, notify Ava of: (i) any material discovered in excavation that Contractor believes to be a hazardous waste that is required to be removed to a Class I, Class II or Class III disposal site; (ii) subsurface or latent physical conditions at the site differing from those indicated by Ava; and (3) unknown physical conditions of an unusual nature at the site, significantly different from those ordinarily encountered in such contract work.
Upon notification, Ava shall promptly investigate the conditions to determine whether a Change Order is appropriate. In the event of a dispute, Contractor shall not be excused from any scheduled completion date and shall proceed with all Work to be performed under the Agreement, but shall retain all rights provided by the Agreement or by law for making protests and resolving the dispute. (d) The location and existence of any underground utility or substructure has not been obtained. The methods used and costs involved to locate existing elements, points of connection and all construction methods are Contractor’s sole responsibility. Accuracy of information furnished, as to existing conditions, is not guaranteed by the Ava. Contractor, at its sole expense, must make all investigations necessary to determine locations of existing elements, which may include contacting Underground Service Alert and other private underground locating firm(s), utilizing specialized locating equipment, hand trenching, or both. Contractor shall comply with all requirements of the Dig Safe Act of 2016 (Government Code Section 4216, et seq.). Contractor shall be responsible for preserving the integrity of the existing underground utilities at the site. (e) To the extent required by Section 4215 of the California Government Code, Ava shall compensate Contractor for the costs of: (i) locating and repairing damage to underground utility facilities not caused by the failure of Contractor to exercise reasonable care; (ii) removing or relocating underground utility facilities not indicated in the construction drawings; and (iii) equipment necessarily idled during such work. Contractor shall not be assessed liquidated damages for delay caused by failure of Ava to provide for removal or relocation of such utility facilities. [Signature Page Follows]
Attachment Staff Report Item 15B
Signature page to Master Engineering Procurement and Construction Agreement IN WITNESS WHEREOF, the Parties have hereto set their hands as of the Effective Date.
AVA COMMUNITY ENERGY AUTHORITY [INSERT CONTRACTOR NAME]
SIGNATURE SIGNATURE
Howard Chang NAME
Chief Executive Officer TITLE
DATE DATE
APPROVED AS TO FORM:
SIGNATURE
Inder Khalsa
General Counsel
DATE
Attachment Staff Report Item 15B
1 EXHIBIT A
FORM OF PROJECTADDENDUM CONTRACT9
THIS PROJECT ADDENDUM ("Addendum") is made by and between Ava Community Energy ("Ava") and [INSERT CONTRACTOR NAME AND ENTITY TYPE] ("Contractor") for the design, engineering, procurement, installation, and construction of the Project described herein. This Addendum hereby incorporates, in toto, the terms and conditions set forth in the Master Engineering, Procurement and Construction Agreement ("Agreement"), and all schedules and exhibits thereto, executed by Ava and Contractor on [__], 2025. Capitalized terms contained herein have the meanings set forth in the Agreement.
It is agreed:
PROJECT: [__]
Project Contract Price: [__]
City: [__]
Project Site: [__], as more particularly described in Schedule A to this Addendum.
Master Site License: [__]
PV Description: [__]
PV Nameplate Capacity: [__]
9 Ava NTD: Ava intends to enter into 12 Addenda for each of the Project Sites. The details for each of these Projects are set out in the Term Sheet.
Attachment Staff Report Item 15B
2 Storage Inverter Power: [__]
Current Storage Capacity: [__]
Utility: [__]
NEM2 Delay Damages: [__]
Delivery Point: [__]
TECHNICAL SPECIFICATIONS
The technical specification for the Project is set forth in Schedule B to this Addendum.
PROJECT DESIGN SERVICES
The Project Package for the Project is set forth in Schedule C to this Addendum.
MILESTONE SCHEDULE
The Milestone Schedule for the Project is set forth in Schedule D to this Addendum.
CITY SPECIFIC TERMS
[__]
10 MISCELLANEOUS
Neither this Addendum, nor the Agreement, creates any employment, agency, partnership, joint venture or other joint relationship between the Parties. Should a conflict arise between the terms of this Addendum and the terms of the Agreement that cannot be reconciled, the terms of this 10 Ava NTD: To be populated with City specific terms on a Project-by Project basis.
Attachment Staff Report Item 15B
3 Addendum shall govern; provided, however, agreement on a conflicting term in this Addendum shall not operate to modify the conflicting term in the Agreement for future addenda executed between the Parties. This Addendum may be executed in counterparts, each of which will be deemed an original, but all of which taken together will constitute but one and the same instrument.
Attachment Staff Report Item 15B
4 SCHEDULE A
PROJECT SITE
Attachment Staff Report Item 15B
5 SCHEDULE B
TECHNICAL SPECIFICATIONS
Attachment Staff Report Item 15B
6 SCHEDULE C
PROJECT DESIGN SERVICES
Attachment Staff Report Item 15B
7 SCHEDULE D
MILESTONE SCHEDULE
Milestone Milestone Value: % of Project
Contract Price
Milestone Deadline
Design and Permitting
Completion
[10%] [__]
Mobilization &
Construction
Commencement
[40%] [__]
Final Building Permit
Approval
[25%] April 14, 2026
Substantial Completion [20%] [__]
Final Completion [5%] [__]
Attachment Staff Report Item 15B
8 AVA COMMUNITY ENERGY AUTHORITY [INSERT CONTRACTOR NAME]
SIGNATURE SIGNATURE
Howard Chang NAME
Chief Executive Officer TITLE
DATE DATE
APPROVED AS TO FORM:
SIGNATURE
Inder Khalsa
General Counsel
DATE
Attachment Staff Report Item 15B
1 EXHIBIT B
INSURANCE REQUIREMENTS11
A. ENDORSEMENTS AND CONDITIONS APPLYING TO ALL PHASES INSURANCE Without limiting Contractor’s indemnification of Ava, Contractor shall provide and maintain at its own expense, during the term of this Agreement, or phase of this Agreement if coverage is phase-specific, or as may be further required herein, the following insurance coverages and provisions:
1. REDUCTION OR LIMIT OF OBLIGATION: All insurance policies, including excess and umbrella insurance policies, shall include an endorsement and be primary and non-contributory and will not seek contribution from any other insurance (or self-insurance) available to Ava.
The primary and non-contributory endorsement shall be at least as broad as ISO Form 20 01 04 13. Pursuant to the provisions of this Agreement insurance effected or procured by Contractor shall not reduce or limit Contractor’s contractual obligation to indemnify and defend Ava, its officers, directors, agents, employees, affiliates, representatives and assigns.
2. EVIDENCE OF COVERAGE: Before commencing the Work under this Agreement, Contractor shall provide Certificate(s) of Insurance and applicable insurance endorsements, in form and satisfactory to Ava, evidencing that all required insurance coverage is in effect. The required certificate(s) and endorsements must be sent as set forth in the notices. This approval of insurance shall neither relieve nor decrease the liability of Contractor.
3. DURATION OF COVERAGE: All required insurance shall be maintained during the entire term of this Agreement or phase of this Agreement to which it applies. In addition, insurance policies and coverage(s) written on a claims-made basis:
• Shall be maintained during the entire term of this Agreement or phase of this Agreement to which it applies and until two (2) years following termination of this Agreement or Final Completion is achieved under this Agreement. • The retroactive date must be before the Effective Date or the beginning of the Work. • If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a retroactive date prior to the Effective Date or the beginning of Work, Contractor must purchase extended reporting period coverage for a minimum of two (2) years after Final Completion.
4. ADDITIONAL INSURED: All insurance required herein with the exception of Personal Automobile Liability, Workers’ Compensation and Employers Liability, shall be endorsed to 11 Ava NTD: Subject to Ava’s insurance specialist review.
Attachment Staff Report Item 15B
2 name as additional insured: Ava, the Cities and their respective elected officials, officers, agents, employees, volunteers, and representatives. The Additional Insured endorsement shall be at least as broad as ISO Form Number CG 20 38 04 13.
All private property owners granting “Rights of Entry” for construction of the Work shall be covered as insureds under the same coverage as provided Ava as respects their ownership of the property and the work to be done thereon.
5. INSURER FINANCIAL RATING: Insurance shall be maintained through an insurer with an A.M. Best Rating of no less than A: VII or equivalent shall be admitted to the State of California unless otherwise waived by Risk Management, and with deductible amounts acceptable to Ava. Acceptance of Contractor’s insurance by Ava shall not relieve or decrease the liability of Ava hereunder. Any deductible or self-insured retention amount or other similar obligation under the policies shall be the sole responsibility of Contractor.
6. SUBCONTRACTORS: Contractor shall include all subcontractors as an insured (covered party) under its policies or shall verify that the subcontractor, under its own policies and endorsements, has complied with the insurance requirements in this Agreement, including this Exhibit B. Additional Insured endorsement shall be at least as broad as ISO Form Number CG 20 38 04 13.
7. JOINT VENTURES: If Contractor is an association, partnership or other joint business venture, required insurance shall be provided by one of the following methods:
• Separate insurance policies issued for each individual entity, with each entity included as a “Named Insured” (covered party), or at minimum named as an “Additional Insured” on the other’s policies.
• Coverage shall be at least as broad as in the ISO forms named above. Joint insurance program with the association, partnership or other joint business venture included as a “Named Insured”.
8. NOTICE OF CANCELLATION: All coverage as required herein shall not be canceled or changed so as to no longer meet the specified Ava insurance requirements without thirty (30) days’ prior written notice of such cancellation or change being delivered to Ava or their designated agent.
B. DESIGN PHASE INSURANCE REQUIREMENTS
Insurance required during the design phase will include:
1. Commercial General Liability Insurance for bodily injury (including death) and property damage which provides limits as follows:
a. Each occurrence -$2,000,000
Attachment Staff Report Item 15B
3 b. General aggregate -$2,000,000
c. Personal Injury -$2,000,000
2. General liability coverage shall include:
a. Project Site and Operations
b. Personal Injury liability
c. Severability of interest
3. Automobile Liability Insurance
For bodily injury (including death) and property damage which provides total limits of not less than one million dollars ($1,000,000) combined single limit per occurrence applicable to all owned, non-owned and hired vehicles.
4. Workers’ Compensation and Employer’s Liability Insurance a. Statutory California Workers’ Compensation coverage including broad form all states coverage.
b. Employer’s Liability coverage for not less than one million dollars ($1,000,000) per occurrence.
5. Professional Errors and Omissions Liability Insurance a. Coverage shall be in an amount of not less than two million dollars ($2,000,000) per occurrence/aggregate.
b. If coverage contains a deductible or self-retention, it shall not be greater than two hundred fifty thousand dollars ($250,000) per occurrence/event. c. Coverage as required herein shall be maintained for a minimum of three (3) years following termination or completion of this Agreement.
6. Claims Made Coverage
If coverage is written on a claims’ made basis, the Certificate of Insurance shall clearly state so. In addition to coverage requirements above, such policy shall provide that:
a. Policy retroactive date coincides with or precedes the consultant’s start of work (including subsequent policies purchased as renewals or replacements).
Attachment Staff Report Item 15B
4 b. Policy allows for reporting of circumstances or incidents that might give rise to future claims.
C. CONSTRUCTION PHASE INSURANCE REQUIREMENTS
The following limits shall apply:
1. Commercial General Liability Insurance for bodily injury (including death) and property damage which provides limits as follows:
a. Each occurrence -$2,000,000
b. General aggregate -$4,000,000
c. Products/Completed Operations aggregate ** - $4,000,000 d. Personal Injury -$2,000,000
A minimum of 50% of each of the aggregate limits must remain available at all times unless coverage is project specific.
2. General liability coverage shall include:
a. Project Site and Operations
b. **Products/Completed Operations with limits of four million dollars ($4,000,000) per aggregate to be maintained for two (2) years following Final Completion.
c. Contractual Liability expressly including liability assumed under this Agreement. If Contractor is working within fifty (50) feet of a railroad or light rail operation, any exclusion as to performance of operations within the vicinity of any railroad bridge, trestle, track, roadbed, tunnel, underpass or crossway shall be deleted, or a railroad protective policy provided.
d. Personal Injury liability
e. Contractor’s, Ava’s, and City’s protective liability f. Severability of interest
g. Explosion, Collapse, and Underground Hazards (X, C and U) h. Broad Form Property Damage liability
Attachment Staff Report Item 15B
5 3. General liability coverage shall include the following endorsements, copies of which shall be provided to Ava:
a. Contractual Liability Endorsement: Insurance afforded by this policy shall apply to liability assumed by the insured under written contract with Ava. b. X C & U (Explosion, Collapse and Underground) Endorsement: Insurance afforded by this policy shall provide X, C and U Hazards coverage.
4. Automobile Liability Insurance
For bodily injury (including death) and property damage which provides total limits of not less than one million dollars ($1,000,000) combined single limit per occurrence applicable to all owned, non-owned and hired vehicles.
5. Workers’ Compensation and Employer’s Liability Insurance a. Statutory California Workers’ Compensation coverage including broad form all states coverage.
b. Employer’s Liability coverage for not less than one million dollars ($1,000,000) per occurrence.
6. Property Installation floater:
The property installation floater shall provide property damage coverage for any building, structure, machinery or equipment damaged, impaired, broken, or destroyed during the performance of the work, including during transit, installation and testing at the entity’s site.
The coverage shall be in the amount of the value of the completed Project and materials.
Attachment Staff Report Item 15B
6 EXHIBIT C
FORM OF PAYMENT REQUEST
[CONTRACTOR FULL CORPORATE NAME AND CONTACT INFO]
Project Site:
Application is made for payment pursuant to that certain Master Engineering, Procurement and Construction Agreement (“Agreement”), dated as of [__], 2025, by and between Ava Community Energy, a joint powers authority of the State of California (“Ava”) and [INSERT ENTITY NAME, TYPE AND STATE OF FORMATION] ("Contractor").
1. Project Contract Price $
4. Total Work completed to date $
5. Less previous applications for payment paid $
6. Current Payment Due $
7. Balance to Finish $
Pursuant to the terms and subject to the conditions of the Agreement, Contractor certifies to the best of the Contractor’s knowledge, information, and belief that the Work covered by this Payment Request has been completed in accordance with the Agreement.
[CONTRACTOR]
By:
Name:
Title:
Date:
RECEIVED AND ACKNOWLEDGED BY:
Ava Community Energy
By:
Name of Duly Authorized Ava Employee:
Title:
Date:
Attachment Staff Report Item 15B
1 EXHIBIT D
FORM OF CONDITIONAL LIEN WAIVER (CONTRACTOR)
[CONTRACTOR FULL CORPORATE NAME AND CONTACT INFO]
California Contractors State License Board No. [___]
Project Site Name:
Through Date:
Milestone:
Invoice Amount:
This Exhibit D to that certain Master Engineering, Procurement and Construction Agreement by and between Ava Community Energy, a joint powers authority of the State of California (“Ava”) and [INSERT ENTITY NAME, TYPE AND STATE OF FORMATION] ("Contractor") dated as of [__], 2025 (the “Agreement”) is provided pursuant to Section 6.3 of the Agreement. This Exhibit D shall in no way limit the obligations set forth elsewhere in the Agreement. In the event of a conflict between this Exhibit D and the Agreement, the terms and conditions of the Agreement control.
Capitalized terms used in this Exhibit D, unless otherwise defined herein, shall have the meanings assigned to them in the Agreement.
Conditional Waiver and Release
This document waives and releases Lien, stop payment notice, and payment bond rights, if any, the Contractor has for labor and Work provided, and Equipment and material delivered, to Ava for the Project Site identified above through the Through Date of this document for the completed milestone referenced above. Rights based upon labor or Work provided, or Equipment or material delivered, pursuant to a written Change Order that has been fully executed by the Parties prior to the date that this document is signed by the Contractor, are waived and released by this document, unless listed as an applicable Exception below. This document is effective only on the Contractor’s receipt of payment from Ava of the applicable Milestone Payment associated with the milestone for the applicable Project.
Exceptions
This document does not affect any of the following:
1. The following Milestone Payments for which the Contractor has previously given a conditional waiver and release but has not received payment:
Date(s) of waiver and release:
Attachment Staff Report Item 15B
2 Amount(s) of unpaid Milestone Payment(s):
2. This document is not intended to waive Contractor’s rights pursuant to any other section of the Agreement, including those relating to breaches other than failure to make payment for Work performed.
3. This document may not be a complete release of all rights to payment under the Agreement.
Contractor may perform other Work under the Agreement for which the Agreement provides separate payment and which this document does not cover.
IN WITNESS WHEREOF, Contractor, by its duly authorized officer or representative, has executed this document as of the date set forth below.
[CONTRACTOR]:
By:
Name:
Title:
Date:
Attachment Staff Report Item 15B
3 EXHIBIT E
FORM OF CONDITIONAL LIEN WAIVER (SUBCONTRACTOR)
[SUBCONTRACTOR FULL CORPORATE NAME AND CONTACT INFO]
Project Site Name:
Through Date:
Milestone:
Invoice Amount:
This Exhibit E to that certain Master Engineering, Procurement and Construction Agreement by and between Ava Community Energy, a joint powers authority of the State of California (“Ava”) and [INSERT ENTITY NAME, TYPE AND STATE OF FORMATION] ("Contractor") dated as of [__], 2025 (the “Agreement”) is provided pursuant to Section 6.3 of the Agreement. This Exhibit E shall in no way limit the obligations set forth elsewhere in the Agreement. In the event of a conflict between this Exhibit E and the Agreement, the terms and conditions of the Agreement control. Capitalized terms used in this Exhibit E, unless otherwise defined herein, shall have the meanings assigned to them in the Agreement.
Conditional Waiver and Release
This document waives and releases Lien, stop payment notice, and payment bond rights, if any, the Subcontractor has for labor and Work provided, and Equipment and material delivered, to Ava for the Project Site identified above through the Through Date of this document for the completed milestone referenced above. Rights based upon labor or Work provided, or Equipment or material delivered, pursuant to a written Change Order that has been fully executed by the Parties prior to the date that this document is signed by the Contractor, are waived and released by this document, unless listed as an applicable Exception below. This document is effective only on the Subcontractor’s receipt of payment from Ava of the applicable Milestone Payment associated with the milestone for the applicable Project.
Exceptions
This document does not affect any of the following:
1. The following Milestone Payments for which the Subcontractor has previously given a conditional waiver and release but has not received payment:
Date(s) of waiver and release:
Amount(s) of unpaid Milestone Payment(s):
Attachment Staff Report Item 15B
4 2. This document is not intended to waive Subcontractor’s rights pursuant to any other section of the Agreement, including those relating to breaches other than failure to make payment for Work performed.
3. This document may not be a complete release of all rights to payment under the Agreement.
Subcontractor may perform other Work under the Agreement for which the Agreement provides separate payment and which this document does not cover.
IN WITNESS WHEREOF, Subcontractor, by its duly authorized officer or representative, has executed this document as of the date set forth below.
[SUBCONTRACTOR]:
By:
Name:
Title:
Date:
Attachment Staff Report Item 15B
5 EXHIBIT F
FORM OF UNCONDITIONAL LIEN WAIVER (CONTRACTOR)
[CONTRACTOR FULL CORPORATE NAME AND CONTACT INFO]
California Contractors State License Board No. [___]
Project Site Name:
Through Date:
Milestone:
Invoice Amount:
This Exhibit F to that certain Master Engineering, Procurement and Construction Agreement by and between Ava Community Energy, a joint powers authority of the State of California (“Ava”) and [INSERT ENTITY NAME, TYPE AND STATE OF FORMATION] ("Contractor") dated as of [__], 2025 (the “Agreement”) is provided pursuant to Section 6.3 of the Agreement. This Exhibit F shall in no way limit the obligations set forth elsewhere in the Agreement. In the event of a conflict between this Exhibit F and the Agreement, the terms and conditions of the Agreement control. Capitalized terms used in this Exhibit F, unless otherwise defined herein, shall have the meanings assigned to them in the Agreement.
Unconditional Waiver and Release
The undersigned has been paid in full for all labor, services, equipment, or material furnished to Ava for the milestone listed above on the job located at the Project Site identified above and does hereby unconditionally and irrevocably waive and release any right to a mechanic’s lien, stop notice, or any right against a labor and material bond on the Project, Equipment or Project Site. If the undersigned has filed with a public agency a U.C.C. Financing Statement evidencing a security interest in equipment delivered or installed in connection with the Project or the Work, the undersigned agrees to promptly execute and file with such public agency any documents necessary to terminate the effectiveness of such U.C.C. Financing Statement.
Attachment Staff Report Item 15B
6 NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID.
IF YOU HAVE NOT BEEN PAID, USE A CONDITIONAL RELEASE FORM.
Exceptions
1. This document is not intended to waive Contractor’s rights pursuant to any other section of the Agreement, including those relating to breaches other than failure to make payment for Work performed.
2. This document may not be a complete release of all rights to payment under the Agreement. Contractor may perform other Work under the Agreement for which the Agreement provides separate payment and which this document does not cover.
IN WITNESS WHEREOF, Contractor, by its duly authorized officer or representative, has executed this document as of the date set forth below.
[CONTRACTOR]:
By:
Name:
Title:
Date:
Attachment Staff Report Item 15B
7 EXHIBIT G
FORM OF UNCONDITIONAL LIEN WAIVER (SUBCONTRACTOR)
[SUBCONTRACTOR FULL CORPORATE NAME AND CONTACT INFO]
Project Site Name:
Through Date:
Milestone:
Invoice Amount:
This Exhibit G to that certain Master Engineering, Procurement and Construction Agreement by and between Ava Community Energy, a joint powers authority of the State of California (“Ava”) and [INSERT ENTITY NAME, TYPE AND STATE OF FORMATION] ("Contractor") dated as of [__], 2025 (the “Agreement”) is provided pursuant to Section 6.3 of the Agreement. This Exhibit G shall in no way limit the obligations set forth elsewhere in the Agreement. In the event of a conflict between this Exhibit G and the Agreement, the terms and conditions of the Agreement control. Capitalized terms used in this Exhibit G, unless otherwise defined herein, shall have the meanings assigned to them in the Agreement.
Unconditional Waiver and Release
The undersigned has been paid in full for all labor, services, equipment, or material furnished to Ava for the milestone listed above on the job located at the Project Site identified above and does hereby unconditionally and irrevocably waive and release any right to a mechanic’s lien, stop notice, or any right against a labor and material bond on the Project, Equipment or Project Site. If the undersigned has filed with a public agency a U.C.C. Financing Statement evidencing a security interest in equipment delivered or installed in connection with the Project or the Work, the undersigned agrees to promptly execute and file with such public agency any documents necessary to terminate the effectiveness of such U.C.C. Financing Statement.
NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID.
IF YOU HAVE NOT BEEN PAID, USE A CONDITIONAL RELEASE FORM.
Exceptions
1. This document is not intended to waive Contractor’s rights pursuant to any other section of the Agreement, including those relating to breaches other than failure to make payment for Work performed.
Attachment Staff Report Item 15B
8 2. This document may not be a complete release of all rights to payment under the Agreement. Contractor may perform other Work under the Agreement for which the Agreement provides separate payment and which this document does not cover.
IN WITNESS WHEREOF, Contractor, by its duly authorized officer or representative, has executed this document as of the date set forth below.
[SUBCONTRACTOR]:
By:
Name:
Title:
Date:
Attachment Staff Report Item 15B
9 EXHIBIT H
INSTALLED CAPACITY TESTING REQUIREMENTS12
12 Ava NTD: Contractor to propose specific Generating Project Installed Capacity testing procedures for Ava’s review.
For Generating Projects capacity tests, Ava's preference is to use three-day weather-adjusted testing to verify Generating Project system performance with a mutually-agreed upon PVSyst file as the basis for such tests.
Attachment Staff Report Item 15B
1 EXHIBIT I
FORM OF INSTALLED CAPACITY CERTIFICATE
This certification ("Certification") of Installed Capacity is delivered by [Licensed Professional Engineer] ("Engineer") to Ava Community Energy, a California joint powers authority ("Ava") in accordance with the terms of that certain Master Engineering, Procurement and Construction Agreement dated as of [__], 2025 (the "Agreement") by and between [Entity name, state of formation, type of entity] ("Contractor") and Ava. 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 and represent to Ava the following:
• [Contractor has installed equipment for the Generating Project with a nameplate capacity of no less than one hundred percent (100%) of the PV Nameplate Capacity. The Generating Project's testing included a performance test demonstrating peak electrical output of no less than one hundred percent (100%) of the PV Nameplate Capacity for the Generating Project at the Delivery Point, as adjusted for ambient conditions on the date of such testing.]13 • [Contractor has installed equipment for the Storage Project with a nameplate capacity of no less than one hundred percent (100%) of the Current Storage Capacity. The Storage Project is fully capable of charging, storing, and discharging energy up to no less than one hundred percent (100%) of the Current Storage Capacity and receiving instructions to charge, store, and discharging energy, all within the operational constraints and subject to the applicable Operating Restrictions.]14
EXECUTED by [Licensed Professional Engineer]
this ________ day of _____________, 20__.
[Licensed Professional Engineer]
By:
Printed Name:
Title:
13Ava NTD: These provisions should only be included if this Certification is delivered on behalf of a Generating Project. 14 Ava NTD: These provisions should only be included if this Certification is delivered on behalf of a Storage Project.
Attachment Staff Report Item 15B
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EXHIBIT J
STORAGE CAPACITY TESTING REQUIREMENTS15
15 Ava NTD: Contractor to propose Storage Capacity Testing Requirements for Ava’s consideration.
Attachment Staff Report Item 15B
-1-
EXHIBIT K
SUBSTANTIAL COMPLETION CERTIFICATE
This Substantial Completion Certificate, dated [__], is issued pursuant to Section 7.7(b) of that certain Master Engineering, Procurement and Construction Agreement (“Agreement”) dated [__], 2025, by and between Ava Community Energy, a joint powers authority of the State of California (“Ava”) and [INSERT ENTITY NAME, TYPE AND STATE OF FORMATION] ("Contractor"). Capitalized terms have the same meaning as in the Agreement.
The undersigned, being a duly authorized representative of the Contractor, does hereby certify that, with respect to the Project located at [Project Site address] ([Project Site Name]), [he/she] is [they are] duly authorized to certify and does hereby certify on behalf of Contractor as follows:
1. Contractor has complied with each of its obligations to date under the Agreement and is not currently in default under such Agreement.
2. The Representations and Warranties contained in Section 17.1 of the Agreement are true and correct as of the date set forth above.
3. Contractor hereby certifies that Substantial Completion was achieved as of the date first set forth above. Without limiting the generality of the foregoing, the following is true and correct as of the date first set forth above:
(a) [Contractor has completed the engineering, procurement, and construction Work pursuant to the terms and conditions of this Agreement with respect to such Project; (b) The Project is in all respects capable of commercial operation as designed; (c) All remaining electrical systems have been checked and are ready for operation and the Project has passed the Project Installation Checklists and Acceptance Tests; (d) Testing pursuant to Section 7.1 has been conducted and the Project has passed such tests;
(e) Contractor has verified that the Project may be initially operated without damage to the Project Sites or any other property and without injury to any person; (f) Contractor has obtained all Governmental Authorizations necessary for the installation and operation of the Project on or prior to the date on which each such Governmental Authorization is or was required. Copies of the documentation of any such Governmental Authorizations and Utility Approvals are attached hereto; Attachment Staff Report Item 15B
2 (g) The Project has been installed in conformance with the terms and conditions of this Agreement;
(h) Contractor has provided Ava with all documentation required under Section
3.13;
(i) Contractor has provided the City personnel a basic training covering safety, key equipment, disconnects, preventative maintenance recommendations, and other information as needed to provide such personnel an appropriate familiarity with the applicable Project; (j) Contractor has delivered unconditional lien waivers with respect to any Work that could result in a lien on the Project or the Project Site pursuant to Section 6.3; (k) Contractor has delivered a certificate substantially in the form of Exhibit H setting forth the Installed Capacity; and
(l) All requirements imposed by the Utility for testing and interconnection of the Project have been satisfied, including having been connected to the Utility’s distribution system and such connection has been approved by the Utility through the granting of “permission to operate.”]
4. The Work has been conducted in accordance with all Applicable Law and Prudent Practices.
[CONTRACTOR]
By:
Name:
Title:
Attachment Staff Report Item 15B
3 EXHIBIT L
FINAL COMPLETION CERTIFICATE
This Final Completion Certificate, dated [__], is issued pursuant to Section 7.8(b) of that certain Master Engineering, Procurement and Construction Agreement (“Agreement”) dated [__], 2025, by and between Ava Community Energy, a joint powers authority of the State of California (“Ava”) and [INSERT ENTITY NAME, TYPE AND STATE OF FORMATION] ("Contractor") Capitalized terms have the same meaning as in the Agreement.
The undersigned, being a duly authorized representative of the Contractor, does hereby certify that, with respect to the Project located at [Project Site address] ([Project Site Name]), [he/she is] [they are] duly authorized to certify and does hereby certify on behalf of Contractor as follows:
1. Contractor has complied with each of its obligations under the Agreement and is not currently in default under such Agreement.
2. The Representations and Warranties contained in Section 17.1 of the Agreement are true and correct as of the date set forth above.
3. Contractor hereby certifies that Final Completion was achieved as of the date first set forth above. Without limiting the generality of the foregoing, the following is true and correct as of the date first set forth above:
(a) [Substantial Completion has occurred and the conditions to Substantial Completion continue to be satisfied;
(b) Contractor has certified that Contractor has obtained all Governmental Authorizations and Utility Approvals necessary for the installation and operation of the Project on or prior to the date on which each such Governmental Authorization or Utility Approval is or was required. Copies of the documentation of any such Governmental Authorizations and Utility Approvals are attached hereto; and
(c) All punch list items have been completed to the satisfaction of Ava.]
4. The Project is free of all Liens placed by Contractor or its Subcontractors or agents, and to Contractor’s knowledge after due inquiry, the Project Site is not subject to Liens caused by Contractor or its Subcontractor or agents unless liens are caused due to non-payment by Ava.
5. Contractor has removed all of its tools, construction/installation equipment, machinery, surplus materials, waste material and Work-related rubbish from and around the Project Sites. [CONTRACTOR]
Attachment Staff Report Item 15B
4 By:
Name:
Title:
Attachment Staff Report Item 15B
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EXHIBIT M
PAYMENT AND PERFORMANCE BONDS
16 16 Ava NTD: Ava to provide form of payment and performance bonds for Contractor’s review.
Attachment Staff Report Item 15B
2 EXHIBIT N
FORM OF CHANGE ORDER17
Change Order Notice No. _____
Project Site Name:
Project Site Address:
Contractor hereby submits a Change Order pursuant to that certain Master Engineering, Procurement and Construction Agreement (“Agreement”) dated [__], 2025, by and between Ava Community Energy, a joint powers authority of the State of California (“Ava”) and [INSERT ENTITY NAME, TYPE AND STATE OF FORMATION] ("Contractor"). On [INSERT DATE] Contractor encountered the circumstances set forth in paragraph (1) below which necessitate a Change. Contractor hereby acknowledges that the Change requested herein must first be approved by Ava pursuant to a Change Order, and any work outside the Work defined in the Agreement performed by Contract prior to its having received a Change Order from Ava will be at Contractor’s sole risk and expense.
Terms used and not defined herein shall have the meanings set forth in the Agreement.
1. Circumstances necessitating a Change:
2. Requested Change in the Work:
3. Impact of this requested Change to Project Contract Price:
Original Project Contract Price
Prior Change Orders to Date
Cost of Change:
[List Equipment]
[List of Labor and Rate]
Current Project Contract Price
New Change Order
New Project Contract Price
4. Impact of this requested Change to deadlines set forth in the Milestone Schedule:
17 Ava NTD: Ava is also open to considering Contractor’s form of change order.
Attachment Staff Report Item 15B
3 5. List of supporting documentation attached hereto:
This Change Order is part of the Work to be performed under the Agreement and is subject to all terms and conditions of the Agreement.
[CONTRACTOR]
By:
Name:
Title:
Date:
Ava Community Energy
By:
Name:
Title:
Date:
Attachment Staff Report Item 15B
WSGR Draft 4.25.25
AVA COMMUNITY ENERGY – [CITY]
RENEWABLE ENERGY & STORAGE POWER PURCHASE AGREEMENT
(CRITICAL MUNICIPAL FACILITIES)
Attachment Staff Report Item 15C
i
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS............................................................................................................... 1 Section 1.1 Contract Definitions............................................................................................. 1 ARTICLE 2 SCOPE OF TRANSACTION; PROJECT SITE ADDENDA ............................................ 1 Section 2.1 Scope of Transaction............................................................................................ 1 Section 2.2 Delivery of Project Energy.................................................................................... 2 Section 2.3 Project Site Addenda ............................................................................................ 2 ARTICLE 3 TERM AND TERMINATION........................................................................................ 2 Section 3.1 Effective Date; Term............................................................................................ 2 Section 3.2 Early Termination of Projects ............................................................................... 2 ARTICLE 4 PROJECT DEVELOPMENT; MILESTONES ................................................................. 4 Section 4.1 Generally............................................................................................................. 4 Section 4.2 Development Progress Reports ............................................................................. 4 Section 4.3 Project Design Approval....................................................................................... 4 Section 4.4 Construction Start ................................................................................................ 5 Section 4.5 Obligation to Interconnect .................................................................................... 5 Section 4.6 Commercial Operation. ........................................................................................ 5 ARTICLE 5 INVOICING AND PAYMENT....................................................................................... 6 Section 5.1 Billing and Payment Terms................................................................................... 6 Section 5.2 Monthly Invoices................................................................................................. 7 Section 5.3 Payment Terms.................................................................................................... 8 Section 5.4 Payment Adjustments; Billing Errors..................................................................... 8 Section 5.5 Billing Disputes................................................................................................... 8 Section 5.6 Pass Through ....................................................................................................... 8 Section 5.7 Books and Records............................................................................................... 9 Section 5.8 Taxes .................................................................................................................. 9 ARTICLE 6 PROJECT SITE ACCESS; PROPERTY OWNERSHIP ................................................. 10 Section 6.1 Access Rights.................................................................................................... 10 Section 6.2 Ownership of Projects ........................................................................................ 12 Section 6.3 Covenants and Obligations Regarding Liens........................................................ 12 ARTICLE 7 PROJECT SITE MAINTENANCE ............................................................................... 13 Section 7.1 General Covenants............................................................................................. 13 Section 7.2 Transmission and Distribution Maintenance Information ...................................... 13 Section 7.3 Use of Equipment .............................................................................................. 13 Section 7.4 Insolation .......................................................................................................... 13 Section 7.5 Maintenance of Project Site ................................................................................ 14 Section 7.6 No Alteration of Project Site ............................................................................... 14 Attachment Staff Report Item 15C
ii
Section 7.7 Project Repair and Maintenance .......................................................................... 14 Section 7.8 City-Requested Outages ..................................................................................... 15 Section 7.9 Use and Payment of Contractors and Subcontractors ............................................ 15 Section 7.10 Prevailing Wages; Hiring Requirements. ............................................................. 15 Section 7.11 Notice of Hazardous Substances.......................................................................... 16 ARTICLE 8 PERFORMANCE GUARANTEES; WARRANTIES..................................................... 16 Section 8.1 Guaranteed Energy Production............................................................................ 16 Section 8.2 Guaranteed Storage Availability.......................................................................... 17 Section 8.3 Ava Performance Warranties .............................................................................. 18 Section 8.4 NO OTHER WARRANTY................................................................................. 18 ARTICLE 9 RECS AND INCENTIVES; OPTIMIZATION SAVINGS.............................................. 18 Section 9.1 Renewable Energy Credits.................................................................................. 18 Section 9.2 Delivery of RECs............................................................................................... 19 Section 9.3 Optimization Savings......................................................................................... 19 Section 9.4 Grid Services..................................................................................................... 19 Section 9.5 Storage Management.......................................................................................... 19 ARTICLE 10 FORCE MAJEURE; BUDGETARY NON-APPROPRIATION EVENT ....................... 20 Section 10.1 Force Majeure Event .......................................................................................... 20 Section 10.2 Termination Due To Force Majeure..................................................................... 20 Section 10.3 Budgetary Non-Appropriation Event ................................................................... 20 Section 10.4 Exercise of City Permitting Authority.................................................................. 21 Section 10.5 No-Fault Termination......................................................................................... 21 ARTICLE 11 RELOCATION AND REMOVAL UPON TERMINATION......................................... 21 Section 11.1 Relocation Requests........................................................................................... 21 Section 11.2 Removal Services............................................................................................... 22 Section 11.3 Abandonment .................................................................................................... 22 Section 11.4 Ava Removal Security........................................................................................ 22 ARTICLE 12 MEASUREMENT...................................................................................................... 23 Section 12.1 Meter ................................................................................................................ 23 ARTICLE 13 DEFAULTS, REMEDIES, AND DAMAGES.............................................................. 23 Section 13.1 Ava Project Defaults .......................................................................................... 23 Section 13.2 City’s Remedies for Ava Project Default ............................................................. 23 Section 13.3 Ava Portfolio Defaults........................................................................................ 23 Section 13.4 City’s Remedies for Ava Portfolio Default........................................................... 24 Section 13.5 City Project Default............................................................................................ 24 Section 13.6 Ava’s Remedies for City Project Default ............................................................. 25 Section 13.7 City Portfolio Default......................................................................................... 25 Section 13.8 Ava’s Remedies for City Portfolio Default........................................................... 25 Attachment Staff Report Item 15C
iii
ARTICLE 14 REPRESENTATIONS, WARRANTIES, AND COVENANTS..................................... 26 Section 14.1 Ava Representations and Warranties ................................................................... 26 Section 14.2 City’s Representations and Warranties................................................................. 26 Section 14.3 General Covenants............................................................................................. 27 Section 14.4 Covenants of Ava............................................................................................... 27 ARTICLE 15 INSURANCE............................................................................................................. 28 Section 15.1 Ava’s Insurance ................................................................................................. 28 Section 15.2 City’s Insurance ................................................................................................. 28 ARTICLE 16 INDEMNIFICATION AND LIMITATIONS OF LIABILITY ...................................... 28 Section 16.1 Indemnity by the Parties..................................................................................... 28 Section 16.2 Notice and Participation in Third Party Claims..................................................... 29 Section 16.3 Environmental Indemnification........................................................................... 29 Section 16.4 Limitations on Liability ...................................................................................... 29 ARTICLE 17 CHANGE IN LAW; COMPLIANCE EXPENDITURE CAP ........................................ 30 Section 17.1 Changes in Law ................................................................................................. 30 Section 17.2 Compliance Expenditure Cap.............................................................................. 31 ARTICLE 18 ASSIGNMENT AND FINANCING............................................................................ 31 Section 18.1 Assignment........................................................................................................ 31 Section 18.2 Financing and Collateral Assignment .................................................................. 31 Section 18.3 Termination Requires Consent ............................................................................ 32 ARTICLE 19 CONFIDENTIALITY................................................................................................. 32 Section 19.1 Confidential Information .................................................................................... 32 Section 19.2 Permitted Disclosures......................................................................................... 32 Section 19.3 Miscellaneous.................................................................................................... 33 Section 19.4 Goodwill and Publicity....................................................................................... 33 ARTICLE 20 GENERAL PROVISIONS.......................................................................................... 34 Section 20.1 Interpretation ..................................................................................................... 34 Section 20.2 Choice of Law; Venue........................................................................................ 34 Section 20.3 Dispute Resolution............................................................................................. 34 Section 20.4 Notices.............................................................................................................. 35 Section 20.5 Survival............................................................................................................. 35 Section 20.6 Compliance with All Laws.................................................................................. 35 Section 20.7 Good Faith & Fair Dealing ................................................................................. 36 Section 20.8 Cooperation....................................................................................................... 36 Section 20.9 Construction ...................................................................................................... 36 Section 20.10 Non-Discrimination............................................................................................ 36 Section 20.11 Non-Exclusive Contract...................................................................................... 36 Section 20.12 Further Assurances............................................................................................. 36 Attachment Staff Report Item 15C
iv
Section 20.13 Waivers............................................................................................................. 37 Section 20.14 Non-Dedication of Projects................................................................................. 37 Section 20.15 Service Contract................................................................................................. 37 Section 20.16 No Agency, Lease, Joint Venture or Partnership................................................... 37 Section 20.17 Account Manager............................................................................................... 37 Section 20.18 Entire Agreement, Modification, Severability ...................................................... 37 Section 20.19 Forward Contract ............................................................................................... 38 Section 20.20 No Third-Party Beneficiaries .............................................................................. 38 Section 20.21 Disentanglement ................................................................................................ 38 Section 20.22 Accountability ................................................................................................... 38 Section 20.23 Cooperation with Review ................................................................................... 38 Section 20.24 Authority........................................................................................................... 38 Section 20.25 Counterparts...................................................................................................... 38 Table of Schedules and Exhibits
Schedule I Defined Terms
Exhibit I Expected Annual Contract Quantity and Avoided Utility Cost Exhibit II Form of Project Site Addendum
Exhibit III City-Specific Terms
Exhibit IV Insurance Requirements
Exhibit V Notices
Exhibit VI Ava Termination Payment Schedule
Exhibit VII City Termination Payment Schedule
Attachment Staff Report Item 15C
General Terms and Conditions | 1
RENEWABLE ENERGY & STORAGE POWER PURCHASE AGREEMENT
This Renewable Energy & Storage Power Purchase Agreement (this “Agreement”) is entered into as of [____], 2025 (the “Effective Date”) between [City], a [municipal corporation] 1 (“City”) and Ava Community Energy, a California joint powers authority (“Ava”). City and Ava are sometimes referred to herein individually as a “Party” and jointly as the “Parties”.
RECITALS
WHEREAS, City wishes to engage Ava, whether directly or indirectly through one or more subcontractors, to develop, construct, operate, own, and maintain multiple photovoltaic solar Projects (each, a “Generating Project”, and collectively, the “Generating Projects”) and battery energy storage Projects (each, a “Storage Project”, and collectively, the “Storage Projects”) on a portfolio of Project Sites owned by City, as more particularly described in one or more addenda to be attached hereto and incorporated herein (each, a “Project Site Addendum” or “PSA”); WHEREAS, Ava desires to sell, and City desires to purchase, the Product on the terms and conditions set forth in this Agreement;
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
Section 1.1 Contract Definitions. All capitalized terms used in this Agreement shall have the meanings ascribed to them in Schedule I to this Agreement.
ARTICLE 2
SCOPE OF TRANSACTION; PROJECT SITE ADDENDA
Section 2.1 Scope of Transaction. This Agreement governs the relationship between City and Ava, as detailed under this Section 2.1. At Ava’s discretion, any obligation of Ava under this Agreement may be performed by Ava’s affiliates, agents, representatives, contractors, and/or subcontractors acting on Ava’s behalf; provided, that Ava shall remain solely responsible for any work performed thereby. City and Ava acknowledge and agree that Ava shall own all Projects, and that Ava has engaged (i) Developer to develop and construct the Projects hereunder and to otherwise perform all obligations set forth in the EPC Agreement, and (ii) Operator to operate and maintain the Projects hereunder and to otherwise perform all obligations set forth in the O&M Agreement (either of Developer and/or Operator, as applicable, a “Subcontractor,” and together the “Subcontractors”). Subject to the terms and conditions of this Agreement and each PSA, 1 NTD: City to advise on preferred designation for municipal entity.
Attachment Staff Report Item 15C
General Terms and Conditions | 2
during the Term, Ava shall supply and deliver to City all of the Product produced by or associated with each Project, and City shall purchase all such Product at the Contract Price.
Section 2.2 Delivery of Project Energy. Subject to the provisions of this Agreement, with respect to each Generating Project, for the duration of the applicable Delivery Period, Ava shall supply and deliver the Product to the City at the Delivery Point, and City shall accept delivery of the Product at the Delivery Point in accordance with the terms of this Agreement. Ava shall be responsible for paying or satisfying when due any costs or charges imposed in connection with the delivery of Project Energy to the Delivery Point. Title to and risk of loss related to the Project Energy shall pass and transfer from Ava to City at the Delivery Point. City has no obligation to purchase from Ava any Project Energy that is not or cannot be delivered to the Delivery Point as a result of a Planned Outage, Forced Outage or a Force Majeure Event.
Section 2.3 Project Site Addenda. On the Effective Date, the Parties shall populate and attach hereto a PSA substantially in the form attached hereto as EXHIBIT II for each Project Site hereunder, and each PSA shall become part of and is hereby incorporated into this Agreement. The terms of each such PSA shall, in addition to the terms of this Agreement, govern the obligations of each Party with respect to the Projects thereunder. Any reference to this Agreement shall be a reference to this Agreement together with all PSAs, exhibits, attachments, and schedules hereto.
In the event of a conflict or inconsistency between the provisions of this Agreement and any PSA, the provisions of the PSA shall control. Each PSA may be amended at any time upon mutual agreement of the Parties confirmed in writing. The Parties agree that any PSA amended in accordance with the foregoing sentence shall supersede any prior PSA to the extent provided in such amendment and shall be effective from the date stated in the amended PSA.
ARTICLE 3
TERM AND TERMINATION
Section 3.1 Effective Date; Term. This Agreement is effective as of the Effective Date and shall end upon the expiration of all Project Terms for each Project contemplated hereunder (“Term”). With respect to each Project, the Product supply period (“Delivery Period”) commences on the Commercial Operation Date of the Project and ends on the twenty-fifth (25th) anniversary of such Commercial Operation Date (the “Initial Term”), unless terminated earlier pursuant to the provisions of this Agreement. Thereafter, the term of this Agreement may be extended as it applies to such Project, upon mutual written consent of the Parties, for successive five (5) year periods (each such period, a “Renewal Term”, and together with the Initial Term, the “Project Term”), up to a maximum Project Term of fifty (50) years. Between ninety (90) and one hundred eighty (180) days prior to the end of the Initial Term or any Renewal Term, City shall provide written notice to Ava as to its desire to continue for any subsequent Renewal Term, upon which the Parties shall negotiate in good faith for sixty (60) days the revised terms, if any, applicable to such Renewal Term. After such sixty (60) day period, if the Parties have not mutually agreed upon the terms and conditions applicable to such Renewal Term, then the applicable Project Term will expire at the end of the then-current Initial Term or Renewal Term, as applicable.
Section 3.2 Early Termination of Projects
Attachment Staff Report Item 15C
General Terms and Conditions | 3
(a) Early Termination Events. With respect to each Project, prior to the Construction Start Date, the applicable Party specified below shall have the right to withdraw the affected Project from this Agreement upon the occurrence of any of the following events (each, an “Early Termination Event”), so long as the terminating Party provides reasonably sufficient evidence to the other Party demonstrating the occurrence of such event:
(i) Either Party may withdraw an affected Project under this Section 3.2(a) if (A) Ava encounters extraordinary subsurface conditions that were not reasonably anticipated by either Party as of the Effective Date, such as bedrock or water pipes, which have a material adverse impact on the development costs associated with such Project, and such costs cannot be adequately mitigated or eliminated by Ava using commercially reasonable efforts; (B) Ava discovers historical or cultural artifacts on the Project Site and as a result, Ava is unable to perform its obligations under this Agreement in compliance with Applicable Law; or (C) Ava discovers Adverse Environmental Conditions on the Project Site and the terminating Party provides an opinion from an independent third-party consultant that such Adverse Environmental Conditions cannot be adequately mitigated or eliminated by Ava using commercially reasonable efforts.
(ii) Only Ava may withdraw an affected Project under this Section 3.2(a) if (A) the Local Electric Utility denies Ava’s application for interconnection or easements necessary to enable the delivery of Project Energy to the Delivery Point, or the Project Site is otherwise disqualified by the Local Electric Utility due to acts or omissions of City, despite Ava’s use of commercially reasonable efforts; (B) the EPC Agreement is terminated due to the fault or withdrawal of Developer, despite Ava’s use of commercially reasonable efforts to resolve issues with the Developer and/or find a suitable replacement contractor to perform under the EPC Agreement; (C) the AHJ rejects Ava’s application for a Governmental Approval on non-administrative or prejudicial grounds, despite Ava’s exercise of commercially reasonable efforts; (D) Ava discovers or has reasonable grounds to believe that title to the Project Site is unclear, defective or encumbered by adverse claims, restrictions or Liens, and can provide supporting documentation or evidence of such belief; or (E) any portion of the Project Site is damaged by fire, earthquake, flood or other casualty in a manner that has a material adverse effect on the installation or operation of the Project at the Project Site and such damage cannot be readily remedied. (b) Procedures. Upon any such withdrawal of a Project due to an Early Termination Event, (1) the applicable PSA shall be deemed withdrawn from this Agreement, (2) neither Party shall have any liability to the other Party with respect to the withdrawn Project other than those that survive this Agreement, and (3) Ava shall have the right to (i) deliver to City a Relocation Request in accordance with Section 11.1, and/or (ii) adjust the Renewable Rate in accordance with Section 5.1(b). In the case of a claim by City that a Project meets the qualification for an Early Termination Event, Ava may in good faith challenge such a claim in its reasonable judgment. Any disagreement between the Parties regarding the applicability of an Early Termination Event asserted by City shall be subject to the dispute resolution provisions of Section 20.3.
Attachment Staff Report Item 15C
General Terms and Conditions | 4
ARTICLE 4
PROJECT DEVELOPMENT; MILESTONES
Section 4.1 Generally. Ava shall, directly or indirectly through Developer, develop, design, engineer, construct, install, and commission each Project in a timely fashion and in accordance with the terms of this Agreement, Prudent Operating Practice, and Applicable Law.
Section 4.2 Development Progress Reports. With respect to each Project, starting on the Effective Date until all Projects hereunder have achieved COD, Ava shall provide quarterly progress reports (a “Progress Report”) to City which describe Ava’s progress in achieving Construction Start and COD for each Project therein. Ava shall also provide City with any reasonably requested documentation (subject to confidentiality restrictions) directly related to the achievement of Construction Start or COD for any Project within twenty (20) Business Days of receipt of such request from City.
Section 4.3 Project Design Approval.
2 With respect to each Project, no later than sixty
(60) days prior to the Estimated Construction Start Date, Ava shall deliver to City (i) a design & construction schedule, (ii) all drawings, plans, and specifications for the construction of the Project, and (iii) production estimation reports from Helioscope (or any comparable entity) (the “Design Plan”), which shall be subject to approval by City in its reasonable discretion. Within twenty-one (21) days following the date on which the Design Plan is received by City, City shall provide written notice to Ava either (a) accepting the Design Plan, or (b) rejecting the Design Plan, along with its commercially reasonable explanation for doing so, including, but not limited to, reference to (x) any operational issues at the applicable Project Site, or (y) substantial revisions to the original draft design plan upon which indicative pricing was based. If City rejects the Design Plan under clause (b) above, within twenty-one (21) days of receipt of City’s rejection, Ava, directly or indirectly through Developer, shall modify the Design Plan to address City’s objections (such modified plan, the “Modified Design Plan”) and submit such Modified Design Plan to City for approval in its reasonable discretion. Within fifteen (15) days following the date on which the Modified Design Plan is received by City, City shall provide written notice to Ava indicating its acceptance or rejection of the Modified Design Plan. If City accepts the Modified Design Plan, such Modified Design Plan shall be deemed the applicable Design Plan for such Project. If City rejects the Modified Design Plan, the Parties shall resolve their differences in accordance with the dispute resolution procedures set forth in Section 20.3. Notwithstanding the foregoing, if Ava determines in its reasonable discretion that adherence to the Design Plan review periods and deadlines set forth in this Section 4.3 would render Ava’s ability to perform its obligations under this Agreement impossible or infeasible for any Project due to any deadlines for a necessary Governmental Approval or Critical Milestones hereunder, the Parties shall mutually agree in writing to the minimum changes to the deadlines set forth in this Section 4.3 necessary to make this Agreement capable of being performed and administered in accordance with its terms, while 2 Note to Cities: These timelines for project design approval have been drafted with prompt City review and execution of the PPA in mind. If Cities are unable to execute swiftly, Ava may need to shorten these timeframes to ensure construction can commence early enough that Projects can be completed by the NEM 2.0 deadline.
Attachment Staff Report Item 15C
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attempting to maximize the period during which the Design Plan is capable of being reviewed by City.
(a) Adherence to Applicable Law. Notwithstanding anything to the contrary in this Agreement, the Parties recognize and acknowledge that the Design Plan and Modified Design Plan, if any, shall be subject to the requirements of all applicable permitting and approval processes by the applicable AHJ, and any Design Plan and/or Modified Design Plan may be modified at any time prior to COD as necessary to obtain any required Governmental Approvals.
Section 4.4 Construction Start.
(a) Construction Start. With respect to each Project, “Construction Start” shall be deemed to have occurred once (i) Ava and/or Developer, as applicable, has engaged all major contractors and ordered all major equipment and supplies as, in each case, can reasonably be considered necessary so that physical construction of such Project may begin and proceed to completion without foreseeable interruption of material duration, (ii) Ava has delivered to City, directly or indirectly through Developer, a Design Plan which has been approved by City in its reasonable discretion in accordance with Section 4.3, and (iii) Ava has issued a notice to proceed to Developer that authorizes Developer to mobilize the Project Site and begin physical construction of the Project at the Project Site. The date of Construction Start will be evidenced by and subject to Ava’s delivery to City of written notice indicating the occurrence of Construction Start, and the date stated in such notice shall be the “Construction Start Date”.
Section 4.5 Obligation to Interconnect. Ava shall, at its own cost and expense, negotiate and enter into an Interconnection Agreement and such other agreements with the Local Electric Utility as needed to enable the transmission of Project Energy to the Delivery Points. City shall not be responsible for any costs under the Interconnection Agreement or any other agreements between Ava and the Local Electric Utility, including but not limited to the costs of any upgrades to the Transmission System associated with the interconnection of the Project. In no event shall City be required to maintain the interconnection facilities, including metering facilities, or for the cost and expense associated therewith.
Section 4.6 Commercial Operation.
(a) Commercial Operation Deadline. With respect to each Project, Ava shall cause the Commercial Operation Date to occur no later than the Commercial Operation Deadline. (b) Force Majeure Delay. If Ava’s timely achievement of the Commercial Operation Date is impacted by a Force Majeure Event (“Force Majeure Delay”), Ava shall be entitled to extend the Commercial Operation Deadline on a day-for-day basis for the duration of such Force Majeure Delay up to no more than one hundred twenty (120) days (“FM Delay Cure Period”), so long as Ava provides to City written notice of a Force Majeure Event in accordance with the requirements set forth in Section 10.1 on or before the Commercial Operation Deadline.
For the avoidance of doubt, no Delay Damages shall be owed during such FM Delay Cure Period. (c) COD Delay Notice; COD Delay Cure Period. Ava shall provide City with advanced notice of any delay in achieving COD by the Commercial Operation Deadline (“COD Delay Notice”) at least forty (40) days in advance of the Commercial Operation Deadline (or, if Attachment Staff Report Item 15C
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Ava’s anticipation of such delay does not arise until after such advanced window, then as soon as reasonably practicable following such anticipation arising). If the Project has not achieved COD by the Commercial Operation Deadline (as extended by any FM Delay Cure Period thereto), then Ava may avoid an Ava Event of Default for the duration of the COD Delay Cure Period by passing through to the City the Delay Damages received from Developer pursuant to Section 5.6. Prior to the expiration of the COD Delay Cure Period, as long as Ava has provided the COD Delay Notice to City and passed through all Delay Damages received from Developer in accordance with this Section 4.6(c), Ava’s failure to achieve COD by the Commercial Operation Deadline shall not be deemed an Ava Event of Default. Upon either (A) Ava’s failure to timely pass through the Delay Damages, or (B) Ava’s failure to achieve COD on or prior to the expiration of the COD Delay Cure Period, in each case for any reason other than a Force Majeure Delay or City’s fault or negligence, Ava shall be deemed a Defaulting Party pursuant to Section 13.1(a) and City shall have the right to declare an Ava Event of Default and terminate the applicable Project. (i) Acknowledgement of Liquidated Damages. Each Party agrees that (1) the damages that City would incur due to Ava’s delay in achieving COD by the Commercial Operation Deadline would be difficult or impossible to predict with certainty, and (2) the prorated Delay Damages passed through pursuant to Section 5.6 are an appropriate approximation of such damages.
(d) COD Confirmation; Commissioning Tests. With respect to each Project, Ava shall (i) take all actions and obtain all approvals necessary to meet the obligations of this Agreement, to develop the Project, and to deliver the Product to City pursuant to the terms of this Agreement, and (ii) use commercially reasonable efforts to cause Developer to comply with all applicable CAISO and Local Electric Utility requirements for pre-operational testing. No later than three (3) Business Days prior to conducting a pre-operational test in connection with Commercial Operation of the Project (a “Commissioning Test”), Ava shall notify City of the date on which it intends to retain a Licensed Professional Engineer to conduct such Commissioning Tests. City shall have the right to be present during any such Commissioning Test, and to receive copies of an Installed Capacity Certificate issued by the Licensed Professional Engineer thereafter. Ava may change the date for such Commissioning Tests upon three (3) days’ advanced written notice of the Commissioning Test. On or promptly following the Commercial Operation Date (but in no event later than ten (10) Business Days thereafter), Ava shall provide notice to City confirming the occurrence of the Commercial Operation Date.
ARTICLE 5
INVOICING AND PAYMENT
Section 5.1 Billing and Payment Terms.
(a) Calculation of Monthly Payment. On a monthly basis during the Delivery Period, City shall pay Ava a Monthly Payment for all Product delivered hereunder, which shall be calculated in accordance with the following:
(i) With respect to each Project, the “PV Payment” shall be determined by multiplying (i) all PV Energy delivered to City at the Delivery Point during the applicable Contract Month by (ii) the Renewable Rate. The “Storage Payment” shall be calculated by Attachment Staff Report Item 15C
General Terms and Conditions | 7
multiplying (i) the Storage Inverter Power for such Project by the Storage Rate. Notwithstanding the foregoing, the Parties acknowledge and agree that (1) the Renewable Rates and the Storage Rate set forth in this Section 5.1(a)(i) shall be subject to an annual escalation of two percent (2.00%) (the “Annual Escalator”), and (2) other than with respect to such Annual Escalator, such Renewable Rates are to remain fixed for the duration of the Term, except as otherwise set forth in Section 5.1(b) and Section 5.1(c).
(ii) The sum of the PV Payment and the Storage Payment shall constitute the “Project Monthly Payment”, and the sum of all Project Monthly Payments for all Projects hereunder shall constitute the “Monthly Payment”. (b) Adjustments to Renewable Rate. In the event that any Project is terminated or withdrawn from this Agreement due to an Early Termination Event, a City Event of Default, or a Lawful Permitting Denial Event occurring prior to COD for such Project, or otherwise on or before the end of the calendar year following COD for such Project, Ava may revise the applicable Renewable Rate, the amount of which shall be at its sole discretion so long as such revised Renewable Rate provides the City Portfolio with estimated Optimization Savings greater than zero dollars ($0). Upon Ava’s delivery of written notice to City of such revised Renewable Rate in accordance with the foregoing, such revised Renewable Rate shall take effect under this Agreement, and neither Party shall have any liability to the other with respect to the withdrawn Project(s) other than those that survive this Agreement. Any adjustment to the Renewable Rate(s) made in accordance with this Section 5.1(b) shall be reflected in an amendment executed by both Parties in accordance with Section 20.18.
(c) Monthly Bill Credit. On a monthly basis during the first five (5) years of the Initial Term, Ava shall credit the City in the form of a monthly bill credit to City’s monthly invoice, which shall be calculated by multiplying (i) the aggregate Storage Capacity of each Project in the City Portfolio, by (ii) two dollars ($2) per kWh (the product of (i) and (ii), the “Monthly Bill Credit”); provided, however, that no Monthly Bill Credit shall be applied during any Contract Month during which any of the following has occurred and is ongoing for the duration of such Contract Month: a (a) City Project Default, (b) City Portfolio Default, (c) Forced Outage, and/or (d) Force Majeure Event (each, a “Bill Credit Disqualifying Event”). If a Bill Credit Disqualifying Event only applies to particular Projects and not the entire City Portfolio, the Monthly Bill Credit shall be adjusted on a pro rata basis based on the Storage Capacity of the affected Projects. The Monthly Bill Credit shall be delivered from Ava to City in the form of a bill credit on a monthly invoice issued hereunder which reduces the Monthly Payment owed by the City. Notwithstanding the foregoing in this Section 5.1(c), at any time after the Effective Date, Ava may, at its discretion, eliminate or reduce the Monthly Bill Credit if it reasonably determines that such elimination or reduction will result in greater estimated Optimization Savings to City; provided, upon City’s reasonable request, Ava shall deliver to City documentation and calculations supporting its determination hereunder.
Section 5.2 Monthly Invoices. Ava shall invoice City on a monthly basis, the delivery of which shall be no later than forty-five (45) days following the end of the applicable monthly billing period. Failure to send such invoice within ninety (90) days following the end of the applicable monthly billing period shall relieve the City of any liability for payment of the Product for such month. Such monthly invoices shall provide the following information (collectively, the Attachment Staff Report Item 15C
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“Invoice Information”): (i) the records of data from the Meter indicating all PV Energy and Discharging Energy, as applicable; (ii) the Monthly Payment owed; and (iii) any Optimization Savings accrued during the month, if any; provided, that if Ava has not received the Invoice Information from Subcontractor within forty-five (45) days following the end of the applicable monthly billing period, Ava may deliver an invoice to City based on historical trends, the amount owed under any such invoice shall be adjusted upon Ava’s receipt of the Invoice Information from Subcontractor.
Section 5.3 Payment Terms. Subject to Section 5.5, all amounts due under this Agreement are due and payable net thirty (30) days following receipt of an invoice. If such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date shall be considered late and will bear interest on the unpaid balance. Any undisputed portion of the invoice amount not paid within such thirty (30)-day period shall accrue interest at the lesser of (x) an annual rate of five percent (5%) or (y) the maximum rate permitted under Applicable Law (the “Interest Rate”). All payments shall be made in U.S. dollars.
Section 5.4 Payment Adjustments; Billing Errors. Payment adjustments shall be made if (i) City or Ava discovers any good faith inaccuracies or errors in the Invoice Information that are not otherwise disputed under Section 5.5, or (ii) an adjustment to an amount previously invoiced or paid is otherwise required due to a correction of data. If the required adjustment is in favor of City, City’s next Monthly Payment shall be credited in an amount equal to the adjustment.
If the required adjustment is in favor of Ava, Ava shall add the adjustment to City’s next monthly invoice. Adjustments in favor of either Party shall bear interest at the Interest Rate, until settled in full, accruing from the date on which the adjusted amount should have been due.
Section 5.5 Billing 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 computational error within twelve (12) months of the date of such invoice or adjustment to such invoice was rendered. In the event any 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 pursuant to Section 5.3. 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 but excluding the date of payment following resolution. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 5.5 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent such dispute arises out of any misinformation originating from a third party not affiliated with any Party and such third party corrects its information after such 12-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.
Section 5.6 Pass Through Damages. To the extent that Ava receives any Delay Damages, Guaranteed Storage Damages, or Guaranteed Energy Damages from Developer or Operator pursuant to the terms of the EPC Agreement or O&M Agreement, as applicable, Ava shall pass through such amounts (collectively, the “Pass-Through Damages”) to the City in full, Attachment Staff Report Item 15C
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less any reasonably incurred costs by Ava to (i) remedy the underlying default under the EPC Agreement or O&M Agreement, as applicable, (ii) perform any Removal Services at the applicable Project Site, or (iii) collect such amounts from the applicable Subcontractor, including attorneys’ fees (such costs, the “Ava Pass-Through Costs”). Upon Ava’s delivery to the City of the applicable Pass-Through Damages, Ava’s obligation to the City with respect to such incurred Delay Damages or Guaranteed Energy Damages, as applicable, under this Agreement shall be deemed satisfied in full and any corresponding default hereunder shall be deemed remedied, regardless of the amount of Ava Pass-Through Costs; provided, however, that in no event shall the Ava Pass-Through Costs exceed the amount of Pass-Through Damages. Such Pass-Through Damages shall be passed through from Ava to the City within ninety (90) days of receipt from Subcontractor in the form of a bill credit on a monthly invoice issued hereunder which reduces the Monthly Payment owed by the City.
Section 5.7 Books and Records.
(a) Maintenance of Records. The Parties shall maintain (i) any and all documents and records that demonstrate performance under this Agreement and any lease or license relating to the Projects, (ii) all ledgers, books of account, invoices, vouchers, cancelled checks, and other documents evidencing or relating to charges for services, and (iii) any records of expenditures and disbursements charged to the other Party, for a minimum period of two (2) years, or for any longer period required by Applicable Law, from the date of final payment to Ava pursuant to this Agreement. Unless otherwise required by law or directed otherwise by Ava in writing, an electronic copy of any record shall be deemed an original. (b) Inspection. Any documents required to be maintained pursuant to this Agreement shall be made available upon reasonable notice for inspection or audit at no cost to the requesting Party, at any time during regular business hours, upon written request by a designated representative of the requesting Party. The non-requesting Party shall provide copies of such documents to the requesting Party for inspection at a time and place that is convenient to the requesting Party.
Section 5.8 Taxes. Each Party shall be responsible for its respective portion of the taxes hereunder; provided, however, that nothing shall obligate or cause either Party to pay or be liable to pay any taxes for which it is exempt under Applicable Law. (a) City’s Taxes. City is responsible for (i) payment of, or reimbursement to Ava for, all taxes assessed on (A) the PV Energy delivered to City at the Delivery Point, and (B) the Storage Inverter Power provided by the Project for the monthly Storage Payment, and (ii) real property taxes for the property where the Project is located, but only for real property taxes arising from City’s use of the property and no one else. If City is required by law or regulation to remit or pay taxes that are the responsibility of Ava or Subcontractors hereunder, then within ninety (90) days following written notice from City of the taxes paid and applicable amounts, Ava shall reimburse City for the amount of any such paid taxes. Nothing herein shall obligate or cause City to pay or be liable to pay any taxes for which it is exempt under Applicable Law.
Attachment Staff Report Item 15C
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(b) Ava’s Taxes. Ava is responsible for payment of, or reimbursement to City for (i) income taxes or similar taxes imposed on Ava’s revenues due to the sale of electricity or capacity under this Agreement, and (ii) personal property taxes imposed on the Project, if any.
ARTICLE 6
PROJECT SITE ACCESS; PROPERTY OWNERSHIP
Section 6.1 Access Rights.
(a) Non-Exclusive License. With respect to each Project Site, City hereby grants, subject to the terms of this Section 6.1(a), to Ava and to Ava’s affiliates, employees, contractors (the “Licensees”), and assignees a non-exclusive, irrevocable, sub-licensable license running with the Project Site (the “Non-Exclusive License”) for access to, on, over, under, and across the Project Site from the Effective Date until the date that is one hundred eighty (180) days after the earlier of (x) termination of the applicable PSA, or (y) the expiration of the applicable Project Term (the “License Term”), for the purposes of performing all of Ava’s obligations and enforcing all of Ava’s rights set forth in this Agreement, and otherwise as required by the Licensees in order to effectuate the purposes of this Agreement (including, without limitation, subject to approval by the City in its reasonable discretion as to the specific additional location, the right to use additional space on or near the Project Site as reasonably necessary for the installation, interconnection, operation, maintenance, repair, replacement, and removal of the Project Equipment, Delivery Equipment, and any other additional necessary equipment and appurtenances running between the Project and the Delivery Point).
(b) Notification of Access. The Licensees shall provide proper notice to City and comply with City’s site safety and security requirements, as set forth in Attachment A of the applicable PSA, when on the Project Site during the License Term. The Licensees shall provide reasonable advanced notice prior to entry, which shall be no less than fourteen (14) days, to City or his or her designee, of Licensee’s intent to exercise the access rights set forth in this Section 6.1(b); provided, however, in the event of a Forced Outage, Force Majeure Event or other emergency, or if access is required in connection with a City-Requested Outage pursuant to Section 7.8, the Licensees shall provide as much reasonable advanced notice as is practicable under the circumstances prior to such entry. City will not charge rent for such right to access the Project Site. City may delay or deny access to Licensees for good cause by providing written notice of such delay or denial no more than ten (10) days after City receives notice of any Licensee’s intent to exercise access rights; provided, however, if City delays or denies access to Licensees for any reason during the applicable Delivery Period, and such delay or denial has a material adverse effect on Ava’s ability to satisfy the Guaranteed Energy Production and/or the Guaranteed Storage Availability, a City-Requested Outage shall be deemed to have occurred for the duration of such delay or denial.
(c) Maintenance of License. During the License Term, City shall preserve and protect the Licensees’ rights under the Non-Exclusive License and Licensees’ access to the Project Site and shall not interfere or permit any third parties under City’s control to interfere with such rights or access. Notwithstanding anything to the contrary contained herein, Ava shall have the right to assign or sublicense the Non-Exclusive License to Subcontractors and their agents, employees, and contractors, or to any Financing Party. The Financing Parties are intended third Attachment Staff Report Item 15C
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party beneficiaries of City’s agreements in the Non-Exclusive License. Upon any rejection or early termination of the Agreement pursuant to any process undertaken with respect to Ava under the United States Bankruptcy Code, at the request of any Financing Party made within ninety (90) days of such termination or rejection, City shall execute a new grant of Non-Exclusive License(s) in favor of the Financing Parties, or their designees, on substantially the same terms as this Non-Exclusive License and in a manner consistent with the City-Specific Terms included as EXHIBIT III. City will not take any action inconsistent with the foregoing. (d) Rights of Licensees. With respect to each Project, the rights granted to the Licensees pursuant to the Non-Exclusive License for the duration of the License Term shall include the following, without limitation:
(i) The right to use City’s water already available and accessible to the Project Site (a) solely for cleaning the Projects in a manner that is not wasteful (it being understood and agreed that the Licensees’ right to such water is non-exclusive in that City and other third parties may also access such water) or (b) as otherwise required by Applicable Law or Governmental Authority;
(ii) The right to connect and use the electrical systems and internet located upon the Project Site and, as reasonably necessary, on nearby property owned or controlled by City, during the installation and construction of the Project, provided however, that internet access shall be granted under commercially reasonable conditions set forth by and subject to the approval of the applicable City authority, which approval shall not be unreasonably withheld; (iii) After (a) receipt of written consent from City (not to be unreasonably withheld, delayed or conditioned) on the preferred method, timing, and specific vegetation to be impacted and (b) issuance of any permit required under Applicable Law, the right to remove, trim, prune, top, or otherwise control the growth of any tree, shrub, plant, or other vegetation; and
(iv) After (a) receipt of written consent from City (not to be unreasonably withheld, delayed or conditioned) on the preferred method, timing, and specific objects to be impacted and (b) issuance of any permit required by Applicable Law, the right to remove any object on the Project Site that obstructs, interferes with or impairs the Project or its operations.
(v) In addition to the foregoing, City shall grant the Licensees a non-exclusive license over, across, and upon portions of the real property owned by City that lie outside of the Project Site for the limited purposes set forth in subclauses (i) through (iv). (e) Memorandum of License. City agrees that Ava, upon request to and approval from City, may record a memorandum of the Non-Exclusive License and Ava’s rights under this Agreement, and any amendments, assignments or sublicenses thereto, in each instance in form and substance mutually acceptable to each Party in its reasonable discretion. With respect to each Project, the Parties shall finalize a form of memorandum of license prior to the applicable Commercial Operation Date that can be recorded by Ava in the public land records in the county in which the Project Site is located. Upon termination of this Agreement or any PSA hereunder, Attachment Staff Report Item 15C
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with respect to the affected Projects, the Parties shall execute and cause to be recorded a memorandum providing record notice of such termination. (f) Ground-Mounted Generating Projects. The Parties acknowledge and agree that as of the Effective Date, no Generating Project hereunder is contemplated to be ground-mounted; provided, however, if, during the Term, as a result of a reasonably documented design change for any Generating Project, such Project is redesigned by Ava to be ground-mounted and located within a secured fenced area on the Project Site, City hereby grants to the Licensees an exclusive, sub-licensable license running with the Project Site (the “Exclusive License,” and together with the Non-Exclusive License, the “Licenses”) for purposes of the installation, operation, use, and maintenance of the Project on such exclusively licensed area of the Project Site during the License Term.
Section 6.2 Ownership of Projects.
(a) Ownership of Projects; Personal Property. Throughout the Term, Ava shall be the legal and beneficial owner of each Project, and each Project will remain the personal property of Ava and will not attach to or be deemed part of or fixture to the applicable Project Site or any Improvement on which such Project is installed. Each of Ava and City agree that Ava is the tax owner of each Project, and all tax filings and reports shall be filed in a manner consistent with this Agreement. Each Project will at all times retain the legal status of personal property as defined under Article 9 of the Uniform Commercial Code.
(b) Notice to City Lienholders. The City shall use commercially reasonable efforts to provide notice to all parties having a Lien on the applicable Project Site or any Improvement on which a Project is installed regarding the ownership of such Project and the legal status or classification of such Project as personal property. If any mortgage or fixture filing against any Project Site could reasonably be construed as prospectively attaching any Project as a fixture on such Project Site, the City shall provide a disclaimer or release from such lienholder. (c) Fixture Disclaimer. With respect to each Project Site, if the City is the fee owner of such Project Site, City consents to the filing of a disclaimer of any Project thereon as a fixture of the Project Site in the office where records are customarily filed in the jurisdiction where the Project Site is located. If the City is not the fee owner, the City shall obtain such consent from the applicable fee owner. For the avoidance of doubt, in either circumstance Ava shall have the right to file such disclaimer.
Section 6.3 Covenants and Obligations Regarding Liens. The City shall not directly or indirectly cause, create, incur, assume, or suffer to exist any mortgage, pledge, step order, lien (including mechanics, labor or materialmen’s lien), charge, security interest, encumbrance or claim (each, a “Lien”) on or with respect to the Projects or any portion thereof, in favor of any Person other than a Financing Party. Ava shall not directly or indirectly cause, create, incur, assume, or suffer to exist any Lien on or with respect to any equipment or property of City, other than those Liens that Ava is permitted by Applicable Law to place on the City’s interest in a Project Site due the City’s non-payment of amounts due under this Agreement. If either Party breaches its obligations under this Section 6.3, such breaching Party shall (i) promptly notify the other in writing, (ii) cause any Lien to be discharged and released of record within fifteen (15) days of Attachment Staff Report Item 15C
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breaching Party having received written notice thereof, without cost to the other Party, and (iii) indemnify the non-breaching Party against all claims, losses, costs, damages, and expenses, including reasonable attorneys’ fees, incurred in discharging and releasing such Lien.
ARTICLE 7
PROJECT SITE MAINTENANCE
Section 7.1 General Covenants. Each Party covenants to and for the benefit of the other Party that throughout the Term:
(a) Each Party shall maintain (or obtain from time to time, as required) all Governmental Approvals necessary for it to legally perform its obligations under this Agreement. (b) Each Party shall undertake its obligations under this Agreement in compliance with (i) all Applicable Law (including, but not limited to, those related to workplace safety, employment discrimination, prevailing wage, non-discrimination and non-preference, and conflicts of interest); (ii) Prudent Operating Practices; (iii) all applicable operating policies, criteria, rules, guidelines, tariffs, and protocols of the CAISO and the Local Electric Utility; and (iv) all applicable requirements of the CPUC, CARB, FERC, NERC, and WECC (including WECC Scheduling Practices).
Section 7.2 Transmission and Distribution Maintenance Information. If either Party receives information through CAISO or from the Local Electric Utility regarding maintenance that will have a material adverse effect on the Generating Project or which may result in a Forced Outage, it will provide the information promptly to the other Party.
Section 7.3 Use of Equipment. Ava shall maintain and use all equipment in a safe and workmanlike manner at all times. Ava shall prevent or avoid conducting or permitting activities on, in, or about the Project Site or the Improvements that have a reasonable likelihood of causing damage or impairment, or otherwise adversely affecting the Project, Project Site, or Improvements.
Ava shall indemnify City for any loss or damage to the Project, Project Site, or Improvements to the extent caused by or arising out of (i) Ava’s breach of its obligations under this Section 7.3 or (ii) the acts or omissions of Subcontractor (or its employees, agents, invitees, or separate contractors) following its failure to cure those actions contemplated under sub-clause (i) or (ii) within sixty (60) Business Days’ receipt of City’s notice, which shall be provided no later than ten (10) Business Days from City becoming aware of such breach, act, or omission.
Section 7.4 Insolation. City acknowledges that unobstructed access to sunlight (“Insolation”) is essential to Ava’s performance of its obligations and a material term of this Agreement. City shall not cause or permit any interference with the Generating Project’s Insolation and to the extent within its reasonable control shall ensure that vegetation on the Project Site adjacent to the Generating Project is regularly pruned or otherwise maintained to prevent interference with the Generating Project’s Insolation. City shall provide necessary approvals or acknowledgements to enable the delivery of a shade report from SunEye (or a comparable entity) within the five (5) Business Days prior to the Commercial Operation Date. If the Insolation of the Project is materially reduced during the Term due to new obstructions or vegetation, the Expected Annual Contract Quantity shall be reduced in proportion to the decrease in Insolation. If City Attachment Staff Report Item 15C
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discovers any activity or condition that could diminish the Insolation of the Generating Project, City shall immediately notify Ava and cooperate with Ava in preserving and restoring the Generating Project’s Insolation levels as they existed on the Effective Date and as allowed by Applicable Law and within the reasonable control of the City.
Section 7.5 City Maintenance of Project Site. City shall, at its sole cost and expense, maintain the Project Sites and Improvements in good condition and repair. City, to the extent within its reasonable control, (i) shall ensure that the Project Sites remain interconnected to the local utility grid at all times, and (ii) shall not permit cessation of electric service to the Projects from the local utility. City is fully responsible for, and shall properly maintain in full working order and good repair, the electrical infrastructure on the City’s side of the Delivery Point, including all of City’s equipment that utilizes the Project’s outputs. City shall cooperate with Ava and Subcontractors to comply with any technical standards of the utility providing electrical power to the City.
Section 7.6 No Alteration of Project Site. City shall inform Ava in writing not less than thirty (30) days prior to making any alterations or repairs to the Project Site (except for emergency repairs) or any Improvement that may have an Adverse Effect on the operation and maintenance of the Project. Thereafter, City shall use commercially reasonable efforts to conduct such repairs, alterations, or Improvements in compliance with any reasonable request by Ava to mitigate such Adverse Effect, which request shall be made by Ava within ten (10) days after having received written notice from City. If any repair, alteration, or Improvement results in a permanent and material adverse economic impact on the Project, City may request relocation of the Project under Article 11 hereof. To the extent that temporary disconnection or removal of the Project is necessary to perform such alterations or repairs, Ava shall use commercially reasonable efforts to perform such work, and any re-connection or re-installation of the Project, at City’s cost. Ava shall use commercially reasonable efforts to to make any alterations and repairs in a good and workmanlike manner, in compliance with all Applicable Law. For purposes of this Section 7.6, “Adverse Effect” means any set of circumstances or facts which impairs or limits the performance of the Project, including, but not limited to, any event, circumstance or fact that could (i) reduce the solar production of the Generating Project, (ii) adversely impact the performance of the Storage Project, (iii) violate the underlying Project Equipment’s safety and operating standards, or (iv) void any warranty of the Project or the underlying Project Equipment.
Section 7.7 Project Repair and Maintenance. Ava shall, directly or indirectly through Operator, cause the Projects to be operated and maintained in accordance with Prudent Operating Practices. Ava may cause Operator to suspend delivery of electricity from the Project to the Delivery Point for the purpose of maintaining and repairing the Project; provided, that Ava shall cause Operator to use commercially reasonable efforts to (i) minimize any interruption in service to the City and (ii) limit any such suspension of service to weekend or off-peak hours. Scheduled and unscheduled maintenance and repairs shall be undertaken at Ava’s sole cost and expense, except that City shall reimburse Ava for the reasonable cost of any repairs or maintenance resulting from damage caused by City, its agents, employees or contractors. Ava will provide to City a written schedule of times when a Project, or a portion thereof, will be unavailable due to planned inspection or maintenance for the Project (each a “Planned Outage”) for each Contract Year no later than thirty (30) days prior to the first day of the applicable Contract Year. City may provide comments no later than ten (10) days after receiving any such schedule, and Ava will in good faith Attachment Staff Report Item 15C
General Terms and Conditions | 15
take into account any such comments. Ava will deliver to City the final updated schedule of Planned Outages no later than ten (10) days after receiving City’s comments. Ava shall be permitted to reduce deliveries of Product during any period of such Planned Outages; provided, however, such Planned Outages shall not exceed one hundred twenty (120) hours in any calendar year, plus such additional hours as are reasonably necessary for Ava to comply with maintenance, as required by Applicable Law. Notwithstanding the foregoing, Ava shall be permitted to reduce deliveries of Product during a (i) Forced Outage or (ii) a Force Majeure Event, as the result of either of which, Ava shall provide City written notice of such event, including the anticipated duration, if known. Except to the extent expressly provided under this Agreement, City shall have no obligations or liability with respect to the maintenance or repair of Project Equipment.
Section 7.8 City-Requested Outages. With respect to each Project, upon City’s written request, Ava shall cause Operator to take such Project off-line for a total of five (5) days during each Contract Year (each event a “City-Requested Outage” and the five-day period the “Outage Allowance”). The Outage Allowance includes all City-Requested Outage hours undertaken by Operator for maintenance or repairs for which City is responsible pursuant to Section 7.7 or requested by City under this Section 7.8 (other than due to the fault or negligence of Ava). City’s request shall be delivered at least five (5) days in advance. City is not obligated to accept or pay for electricity from the Project for City-Requested Outages up to the annual Outage Allowance. If City’s aggregate hours for City-Requested Outages exceed the Outage Allowance in a given Contract Year, other than due to a Force Majeure Event, Ava shall cause Operator to reasonably estimate the amount of electricity, based on the daily average derived from consumption of Project Energy from the consecutive three (3) weeks immediately preceding the latest City-Requested Outage, that would have been delivered to City during such excess City-Requested Outages, and City shall pay Ava for such amount in accordance with this Agreement.
Section 7.9 Use and Payment of Contractors and Subcontractors. Ava may use properly licensed and qualified contractors and subcontractors to perform its obligations under this Agreement. Ava shall ensure that all contractors and subcontractors are sufficiently qualified and experienced equal to the standard observed by a competent practitioner of the profession in which the consultant or subcontractor is engaged. However, Ava shall be responsible for the quality of the work performed by its contractors and subcontractors. Ava shall pay when due all valid charges from all contractors, subcontractors, and suppliers supplying goods or services to Ava under this Agreement.
Section 7.10 Prevailing Wages; Hiring Requirements.
(a) Prevailing Wage. In accordance with the terms of the EPC Agreement, Ava shall use reasonable efforts to ensure that all contractors, subcontractors, and employees hired or contracted by Developer which will perform construction work or otherwise provide services on any Project Site related to the construction of any Project (such work or services, the “On-Site Services,” and each such contractor or subcontractor, an “On-Site Contractor”) are paid wages at rates not less than those prevailing for workers performing similar work in the locality as provided by applicable California law, if any. Nothing in the EPC Agreement shall require Developer or its subcontractors or contractors to comply with, or assume liability created by, inapplicable provisions of any California labor laws.
Attachment Staff Report Item 15C
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(b) Hiring Requirements. In accordance with the terms of the EPC Agreement, Ava shall use commercially reasonable efforts to cause Developer and/or each On-Site Contractor to (i) hire individuals who reside in either Alameda County or San Joaquin County for the performance of the majority of total hours spent performing On-Site Services, and (ii) utilize union labor in the performance in On-Site Services.
Section 7.11 Notice of Hazardous Substances. If any product being offered, delivered or supplied to the City or at the Project Site in connection with this Agreement is listed in the Hazardous Substances list of the Regulations of the Director of Industrial Relations with the California Occupational Safety and Health Standards Board, or if the product presents a physical or health hazard as defined in the California Code of Regulations, General Industry Safety Order, Section 5194 (T8CCR), Hazard Communication, the Ava shall cause Subcontractor to include a Material Safety Data Sheet (“MSDS”) with delivery or shipment to the Project Site. Each MSDS shall include the contract/purchase order number and identify the “Ship To Address.” Ava shall cause Subcontractor to ensure all shipments and containers comply with the labeling requirements of Title 49, Code of Federal Regulations by identifying the Hazardous Substance, name and address of the manufacturer, and the appropriate hazard warning regarding potential physical safety and health hazards.
ARTICLE 8
PERFORMANCE GUARANTEES; WARRANTIES
Section 8.1 Guaranteed Energy Production.
(a) Guaranteed Energy Production. Starting on the second (2nd) Contract Year, during each Performance Measurement Period, Ava shall be required to deliver to City no less than eighty-five percent (85%) of the Expected Annual Contract Quantity set forth on EXHIBIT I (the “Guaranteed Energy Production”). For purposes of determining whether Ava has achieved the Guaranteed Energy Production, Ava shall be deemed to have delivered to City the “Adjusted Energy Production”, which shall consist of (i) all Project Energy (measured in kWh) actually delivered by Ava to City during the applicable Contract Year, and (ii) any energy in the amount it could have delivered to City but was prevented from delivering to City by reason of (A) the occurrence of a Force Majeure Event (so long as such Force Majeure Event was properly declared in accordance with Section 10.1), (B) a Planned Outage, and/or (C) a Forced Outage (“Lost Output”). For each Contract Year, Ava shall be deemed to have achieved the Guaranteed Energy Production if the Adjusted Energy Production is greater than or equal to eighty-five percent (85%) of the Expected Annual Contract Quantity. If Ava fails to achieve the Guaranteed Energy Production amount in any Contract Year, Ava shall pay City Guaranteed Energy Damages calculated in accordance with Section 8.1(b). For purposes of this Section 8.1(a), “Performance Measurement Period” means each rolling three (3) Contract Year period starting on the second (2nd) Contract Year (i.e., Contract Years 2, 3, and 4 shall comprise the first such period, Contract Years 3, 4, and 5 shall constitute the second such period, etc.) during the Portfolio Delivery Period (and, for the avoidance of doubt, as first determined after the end of the fourth (4th ) Contract Year with respect to the first Performance Measurement Period). (b) Guaranteed Energy Damages. On or before the fifteen (15th) day of the first monthly billing period of the following Performance Measurement Period, City shall invoice Ava Attachment Staff Report Item 15C
General Terms and Conditions | 17
for all Guaranteed Energy Damages accrued, if any, during the preceding Performance Measurement Period, in accordance with the following:
(i) In any Performance Measurement Period, in the event that Ava fails to achieve the Guaranteed Energy Production, Ava shall pay City the Guaranteed Energy Damages accrued during such Performance Measurement Period; provided, however, that Ava shall have no obligation to pay Guaranteed Energy Damages in excess of seventy-five percent (75%) of the applicable PV Payments accrued during such Performance Measurement Period (the “Guaranteed Energy Damages Cap”). Guaranteed Energy Damages will be City’s sole and exclusive remedy for Ava’s failure to achieve the Guaranteed Energy Production.
Section 8.2 Guaranteed Storage Availability.
(a) Guaranteed Storage Availability. With respect to each City Portfolio, during each Contract Year commencing with the second (2nd) Contract Year, Ava shall be required to maintain an Annual Storage Availability greater than or equal to ninety-two percent (92%) (the “Guaranteed Storage Availability”). In each Contract Year, the “Project Annual Storage Availability” shall be calculated for each Storage Project as a percentage based on the quotient of:
(A) (i) the total number of hours in the Contract Year, minus (ii) the total number of hours in such Contract Year during which the Storage Project was unavailable, other than as a result of Excused Storage Event; divided by (B) the total number of hours in the Contract Year. The “Annual Storage Availability” shall be calculated as the weighted average Project Annual Storage Availability across the City Portfolio, as adjusted by the Storage Inverter Power for each Storage Project. For purposes of determining the Project Annual Storage Availability, a Storage Project shall be deemed to be available during the occurrence of any of the following events (each, an “Excused Storage Event”): (i) Force Majeure Event, (ii) Planned Outage, (iii) City-Requested Outage (to the extent such outages do not exceed the Outage Allowance for the applicable Contract Year), or (iv) Forced Outage.
(b) Guaranteed Storage Damages. In any Contract Year, if Ava fails to achieve the Guaranteed Storage Availability, Ava shall owe City liquidated damages (“Guaranteed Storage Damages”) in an amount equal to the product of (A) the aggregate applicable Storage Payments paid by the City for such Contract Year, multiplied by (B) ninety-two percent (92%) less the Annual Storage Availability. Such Guaranteed Storage Damages shall be credited from Ava to the City in the form of a bill credit on the monthly invoice, to be applied to the Monthly Payment starting in the month following the Contract Year for which the Guaranteed Storage Damages are owed. Such bill credit will reduce the Monthly Payment owed to Ava by the City. In the event the Guaranteed Storage Damages exceed the amount owed for the Monthly Payment, the remaining Guaranteed Storage Damages will be credited toward Monthly Payments on future monthly invoices until the Guaranteed Storage Damages have been credited in full.
Section 8.3 Ava Performance Warranties.
(a) Roof Damage Warranty. Ava warrants that no damage will be inflicted on the roof of any Improvement on which any Project is installed (“Project Roof”) as a result of the installation or maintenance of such Project (“Roof Damage Warranty”). With respect to each Project, Ava shall provide such Roof Damage Warranty starting on the applicable Construction Attachment Staff Report Item 15C
General Terms and Conditions | 18
Start Date and ending on the date that is the later of (x) ten (10) years after Ava’s most recent performance of installation or maintenance activities on such Project Roof, or (y) the expiration of any then-effective installer warranty on the applicable Project Roof. In the event that Ava or Subcontractor damages any Project Roof during the term of the Roof Damage Warranty, Ava shall promptly repair and remedy such damage to the reasonable satisfaction of City. (b) Workmanship Warranty. Ava warrants that each Project will be fit for its intended purpose and free from defects in design, materials, and workmanship for a period of [one (1) year],3starting on the Commercial Operation Date. If any Project, or any component or portion thereof, fails to conform to the foregoing warranty, Ava shall, at its own expense, remedy such defect in a timely manner.
(c) Project Equipment Warranty. With respect to each Project, Ava warrants that on the applicable Commercial Operation Date, all Project Equipment will be (1) new, (2) Error-Free, (3) provided by a Tier 1 Supplier, and (4) with respect to each Storage Project only, will (i) benefit from a manufacturer’s warranty, including an energy retention warranty, and (ii) include all of the components, functionality, and other material features that affect performance and provide the user experience of a standard, high-quality storage project.
Section 8.4 NO OTHER WARRANTY. EXCEPT AS EXPRESSLY PROVIDED IN
THIS AGREEMENT, AVA MAKES NO WARRANTIES OR GUARANTEES, EXPRESS OR
IMPLIED, AND EXPLICITY DISCLAIMS ANY WARRANTY OR GUARANTEE IMPLIED
BY LAW, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE OR NON-INFRINGEMENT, AND IMPLIED WARRANTIES OF CUSTOM OR USAGE.
ARTICLE 9
RECS AND INCENTIVES; OPTIMIZATION SAVINGS
Section 9.1 Renewable Energy Credits. Upon purchasing the Product pursuant to this Agreement, City is entitled to the benefit of, and will retain all ownership interests in, the RECs associated with such Product. Ava is entitled to the benefit of, and will retain all ownership in, the Incentives. Ava shall cooperate with City in obtaining, securing, and transferring any and all RECs to the City. City is not obligated to incur any out-of-pocket costs or expenses in connection with such actions unless reimbursed by Ava. Ava shall not make any filings or statements inconsistent with City’s ownership interests in the RECs. If any RECs are delivered directly to Ava, Ava shall promptly pay or deliver such items to City. For the avoidance of doubt, so long as Ava cooperates in City obtaining all ownership interests in the RECs, Ava shall have the unrestricted right to obtain and utilize all other Incentives, Ancillary Services, and Capacity Attributes associated with the Product hereunder.
Section 9.2 Delivery of RECs. Ava shall take, or cause to be taken, all actions, and shall execute all documents or instruments necessary to ensure that all WREGIS Certificates associated with RECs corresponding to any Project Energy are issued, tracked, and transferred in a timely 3 NTD: Ava to confirm in subsequent turn after finalizing terms of EPC Agreement.
Attachment Staff Report Item 15C
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manner to the City for the City’s sole benefit. Ava shall transfer the RECs to the City. Ava shall comply with all Applicable Law, including the WREGIS Operating Rules, regarding the certification and transfer of such WREGIS Certificates to the City and the City shall be given sole title to all such WREGIS Certificates. In addition, with respect to each Project, prior to COD, Ava shall register the Project, or cause the Project to be registered, with WREGIS, and establish an account with WREGIS (“Ava WREGIS Account”), which Ava shall maintain until the end of the applicable Delivery Period. Ava shall transfer the WREGIS Certificates using Forward Certificate Transfers from the Ava WREGIS Account to the WREGIS account(s) of the City or the account(s) of a designee that the City identifies by notice to Ava (“City WREGIS Account”).
Notwithstanding the foregoing, in the event that the City does not have a City WREGIS Account, Ava shall deliver all RECs hereunder via Attestation Form.
Section 9.3 Optimization Savings. Ava shall provide Optimization Savings with the Product. “Optimization Savings” means the savings realized on City’s utility bill(s) directly attributable to the use of the Project and shall include, but not be limited to, savings that are realized from demand charge management, energy arbitrage, load shaping, and coincident peak, installed capacity tag mitigation, or any front-of-the-meter savings, which shall be reflected in the form of a credit reduction to the applicable Monthly Payment on the monthly invoices issued by Ava hereunder. For the avoidance of doubt, any City savings resulting from a rate or tariff switch, Monthly Bill Credit, or other upfront Ava incentives enabled by the presence and/or operation of the Project shall be considered Optimization Savings. Ava shall provide Optimization Savings in a commercially reasonable manner, but Ava shall have discretion over the manner in which Optimization Savings are provided, including which services comprising constituent parts of Optimization Savings to provide at any particular time, to accrue Total System Benefit. Ava shall have no obligation and makes no guarantees as to the amount of Optimization Savings that will be provided to the City hereunder.
Section 9.4 Grid Services. Ava and City acknowledge that the Storage Projects are capable of generating revenue through demand response, capacity, and/or wholesale energy (collectively, the “Grid Services” and each a “Grid Service”). Grid Services may be provided through, to, or in connection with the CAISO, the Local Electric Utility, or an aggregator. Ava may enroll the Storage Project in Grid Services if (i) Ava provides advance written notice to the City and (ii) Ava determines, in its reasonable discretion, that such enrollment will not reduce the realized Optimization Savings or impair the Storage Project’s twenty percent (20%) battery back-up reserve. If Ava enrolls the Storage Project in Grid Services, Ava shall receive any value resulting from the Grid Services provided, including revenues, environmental benefits, and grid reliability and resiliency.
Section 9.5 Storage Management. Ava shall, at all times during the Term, operate and maintain the Storage Projects in accordance with Prudent Operating Practice and Applicable Law.
At all times throughout the Delivery Period, Ava shall cause each Storage Project to maintain a twenty percent (20%) minimum battery back-up reserve.
Attachment Staff Report Item 15C
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ARTICLE 10
FORCE MAJEURE; BUDGETARY NON-APPROPRIATION EVENT
Section 10.1 Force Majeure Event. If either Party reasonably is unable to timely perform any of its obligations (other than payment obligations) under this Agreement, in whole or in part, due to a Force Majeure Event and without the fault or negligence of the Party relying thereon as justification for such delay, that Party will be excused from performing such obligations for the duration of the time that such Party remains affected by the Force Majeure Event; provided that such Party uses commercially reasonable efforts to mitigate the impact of the Force Majeure Event and resumes performance of its affected obligations as soon as reasonably practical. The Party affected by the Force Majeure Event shall notify the other Party as soon as reasonably practical after the affected Party becomes aware that it is or will be affected by a Force Majeure Event. If the Force Majeure Event occurs during the Term and impacts the ability of the Project to deliver electricity to the Delivery Point or to provide capacity, as applicable, the Term will be extended day-for-day for each day delivery is suspended due to the Force Majeure Event.
Section 10.2 Termination Due To Force Majeure. With respect to each Project, after the Commercial Operation Date, either Party shall have the right, but not the obligation, to either (a) terminate the applicable Project or (b) relocate the applicable Project in accordance with Section 11.1, in each case, after the occurrence of the following (each, a “Force Majeure Failure”): (1) due to a Force Majeure Event, Ava is unable to meet its obligations under this Agreement for a period greater than ninety (90) consecutive days; or (2) the Project is (i) destroyed by a Force Majeure Event and Ava is unable to rebuild the Project within one (1) year, or (ii) rendered permanently inoperable by a Force Majeure Event. For the avoidance of doubt, any Force Majeure Delay occurring prior to the Commercial Operation Date shall be subject to the requirements in Section 4.6(b).
Section 10.3 Budgetary Non-Appropriation Event. Notwithstanding anything to the contrary, due to the constitutional limitations levied on City, City may be unable to appropriate funds for the procurement of any utility services for a particular fiscal year (a “Budgetary Non-Appropriation Event”). If a Budgetary Non-Appropriation Event occurs with respect to City during the Delivery Period of any Project hereunder, then City shall notify Ava of the starting date of such Budgetary Non-Appropriation Event (the “Non-Appropriation Start Date”) within thirty (30) days of its receipt of the invoice for the first month affected by such Budgetary Non-Appropriation Event. During a Budgetary Non-Appropriation Event, if City does not otherwise have other funds available to make payments due under this Agreement, City is not obligated to accept delivery of, or pay for, any Product delivered under this Agreement for the period starting on the Non-Appropriation Start Date until such Budgetary Non-Appropriation Event has terminated (such period, the “Non-Appropriation Period”), which shall be confirmed by City in a writing timely delivered to Ava after the City has properly appropriated funds for payment hereunder. For the avoidance of doubt, during the Non-Appropriation Period, Ava shall have no obligation to deliver any Product hereunder. City agrees that it shall use its best efforts to seek appropriation for utility services during the term of this Agreement. If a Budgetary Non-Appropriation Event continues for more than one hundred eighty (180) days, Ava (but not City) may, at its sole discretion, terminate this Agreement.
Attachment Staff Report Item 15C
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Section 10.4 Exercise of City Permitting Authority. If Ava, acting in good faith, reasonably determines that City lawfully, fairly, and neutrally applied its authority to deny, suspend, revoke or terminate a certificate, permit, franchise, approval, authorization, or power under Applicable Law for any Project (its “Permitting Authority”), and such lawful exercise of the City’s Permitting Authority causes Ava or Subcontractor to be unable to lawfully conduct operations on the Project Site (a “Lawful Permitting Denial Event”), then Ava may, at its sole discretion, terminate the Affected Projects in accordance with Section 10.5 below. If such Lawful Permitting Denial Event occurs prior to the Commercial Operation Date of the Affected Project, Ava shall have the right to adjust the Renewable Rate in accordance with Section 5.1(b).
Section 10.5 No-Fault Termination. If either Party terminates one or more Projects (the “Affected Projects”) due to, (a) after Construction Start, either a Force Majeure Failure in accordance with Section 10.2 or a Budgetary Non-Appropriation Event in accordance with Section 10.3, or (b) at any time during the Term, a Lawful Permitting Denial Event in accordance with Section 10.4 or a Tariff Termination in accordance with Section 17.1, then upon any such termination, (i) neither Party shall have any liability to the other Party with respect to such Affected Projects other than those that survive this Agreement, and (ii) Ava shall have the option to deliver a Relocation Request in accordance with Section 11.1, provided that nothing contained in this Section 10.5 shall limit the Parties’ rights and obligations under Section 5.1(b). Notwithstanding the foregoing, the occurrence of a Force Majeure Event, Budgetary Non-Appropriation Event, Lawful Permitting Denial Event, or Tariff Termination shall not, to the extent an Event of Default exists during such time, limit either Party’s ability to declare an Event of Default pursuant to Article 13 and receive a Termination Payment, to the extent applicable.
ARTICLE 11
RELOCATION AND REMOVAL UPON TERMINATION
Section 11.1 Relocation Requests. With respect to each Project, at any time during the Project Term, either Party shall have the right to propose in writing the relocation of the applicable Project to a new Project Site upon the occurrence of an EOD Relocation Event or No-Fault Relocation Event (a “Relocation Request”). If both Parties agree in their reasonable discretion that the Relocation Request is practically feasible and preserves the economic value of the agreement, the Parties shall seek to negotiate in good faith an agreement for the relocation of the Project, which relocated site shall be subject to the approval of Ava in its reasonable discretion and subject to the negotiation of a mutually acceptable license. Upon successful relocation of the Project due to an EOD Relocation Event, any Event of Default associated with the original Project Site, if applicable, shall be deemed to have been cured, and the Non-Defaulting Party shall have no right to declare an Event of Default associated therewith. The costs associated with any relocation performed due to an EOD Relocation Event shall be borne entirely by the Defaulting Party, whereas the costs and expenses associated with any relocation performed due to a No-Fault Relocation Event shall be split evenly between the Parties; provided, if any relocation occurs during the Delivery Period, City shall be required to continue to make the Project Monthly Payment for the period of time between decommissioning of the Project at the original Project Site and the Commercial Operation Date of the Project at the new Project Site based upon a pro rata calculation of the Expected Annual Contract Quantity for such period. If the Parties are unable to reach agreement on relocation of the Project within one hundred twenty (120) days after the date of receipt of City’s proposal, then such Relocation Request shall be deemed withdrawn and the Attachment Staff Report Item 15C
General Terms and Conditions | 22
applicable Project may be terminated in accordance with this Agreement. For purposes of this Section 11.1, an “EOD Relocation Event” shall be deemed to have occurred (a) with respect to either Party, if an Event of Default occurs and such Event of Default could reasonably be cured by moving the Project to another Project Site, or (b) the City terminates or withdraws the applicable Project from this Agreement for any reason other than an Ava Event of Default. A “No-Fault Relocation Event” shall be deemed to have occurred if (i) any Early Termination Event occurs, or (ii) a Force Majeure Failure occurs.
Section 11.2 Removal Services. Upon the expiration or earlier termination of this Agreement or any PSA hereunder, Ava shall, at Ava’s sole expense (unless expressly provided otherwise in this Agreement), within ninety (90) days after the applicable termination or expiration (the “Removal Deadline”), perform, or caused to be performed, the following actions to remove the Project from the Project Site (the “Removal Services”): (i) remove all tangible property comprising the Project, personal property of Ava and/or Subcontractors, and all other related equipment; (ii) ensure that the Project Site is returned to substantially its original condition (excluding ordinary wear and tear), including by (x) removing the Project’s mounting pads or other support structures and (y) repairing and restoring the roof and the roof membrane, subject to Section 8.3(a). City shall ensure that Ava and/or Subcontractor is given sufficient access, space, and cooperation as reasonably necessary to facilitate the Removal Services. This provision shall survive the expiration or termination of this Agreement and any PSA hereunder.
Section 11.3 Abandonment. If Ava fails to commence the Removal Services by the applicable Removal Deadline, any property not removed from the Project Site shall be deemed abandoned by Ava, and shall become the property of City, and City may, at its option, remove the Project and/or Project Equipment from the Project Site and relocate to a warehouse, or otherwise dispose or retain ownership of such property indefinitely, as it determines in its sole discretion. If the City performs any Removal Services after the Removal Deadline in accordance with this Section 11.3, Ava shall reimburse City for the cost of such Removal Services (the “Removal Costs”) within thirty (30) days of receipt of an invoice thereof. City shall have no liability to Ava or Subcontractor for any property deemed abandoned per this Section 11.3. This provision shall survive the expiration or termination of this Agreement and any PSA hereunder.
Section 11.4 Ava Removal Security. If a Credit Downgrade Event occurs with respect to Ava at any time during the Term, within forty-five (45) days of such Credit Downgrade Event, Ava shall post or deliver to City a security deposit of fifty dollars ($50) per kW of Contract Capacity (“Ava Removal Security”) in the form of a Letter of Credit or cash. If (i) Ava fails to commence the Removal Services by the applicable Removal Deadline, and (ii) fails to reimburse City for the cost of Removal Services within thirty (30) days of receipt in accordance with Section 11.3, then, to the extent such Ava Removal Security is available in accordance with this Section 11.4, City may draw on any outstanding Letter of Credit and retain any cash then held by City to satisfy any amounts owed by Ava with respect to the Removal Costs only; provided, that City shall be obligated to return any surplus proceeds in excess of the Removal Costs after Ava’s obligations under Section 11.3 have been satisfied. Ava shall maintain the Ava Removal Security until (a) the Removal Services have been completed and (b) the Removal Costs have been paid or reimbursed by the responsible Party in full pursuant to the terms of this Agreement. Following the occurrence of both (a) and (b), City shall promptly return to Ava the Ava Removal Security, less any amounts drawn thereon in accordance with this Section 11.4.
Attachment Staff Report Item 15C
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ARTICLE 12
MEASUREMENT
Section 12.1 Meter. Each Project’s electricity output during the Term shall be measured by the applicable City’s meter, which shall be a revenue grade meter that meets ANSI-C12.20 standards for accuracy (the “Meter”). The Meter shall be installed, commissioned, and operated by Ava and/or Subcontractor throughout the applicable Project Term at Ava’s sole cost and expense. Throughout the Term, Ava shall provide reasonable access to the Meter and measurement data associated therewith to Ava and the City.
ARTICLE 13
DEFAULTS, REMEDIES, AND DAMAGES
Section 13.1 Ava Project Defaults. With respect to the affected Project only, Ava shall be deemed a Defaulting Party upon the occurrence of any of the following events (each, an “Ava Project Default”):
(a) The Project fails to achieve the Commercial Operation Date by the Commercial Operation Deadline (subject to any FM Delay Cure Period or COD Delay Cure Period thereto);
(b) A Forced Outage lasting longer than two hundred seventy (270) days occurs with respect to such Project; provided, however, that this Section 13.1(b) shall not apply to a Forced Outage caused solely by a Force Majeure Event; or (c) Due to acts or omissions of Ava, a mechanics’ Lien is filed against the Project, and such Lien has not been discharged, bonded or contested by Ava in good faith by proper legal proceedings within twenty (20) days of receipt of notice thereof.
Section 13.2 City’s Remedies for Ava Project Default. If a Ava Project Default has occurred and is continuing, and following the expiration of any applicable cure period set forth therein, City may perform any and all of the following actions: (i) suspend performance under this Agreement with respect to such Project; (ii) accelerate all amounts owing between the Parties with respect to such Project; (iii) withhold a portion of any payments due to Ava under this Agreement in an amount attributable to such Project; and/or (iv) terminate the applicable PSA. Upon the termination of any PSA hereunder, Ava shall perform the Removal Services for such Project in accordance with Section 11.2 at Ava’s sole expense.
Section 13.3 Ava Portfolio Defaults. Ava shall be deemed a Defaulting Party under this Agreement upon the occurrence of any of the following events (each, a “Ava Portfolio Default”):
(a) Ava delivers to City, without City’s prior consent, energy or other product from a resource outside of the City Portfolio;
(b) A Bankruptcy Event has occurred with respect to Ava; (c) Ava fails to pay City any undisputed amount owed under this Agreement within sixty (60) days after receipt of notice from City of such past due amount; Attachment Staff Report Item 15C
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(d) Ava fails to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default under this Article 13) and such failure is not remedied within thirty (30) days after notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if Ava is unable to remedy such default within such initial thirty (30) day period despite exercising commercially reasonable efforts); provided, that the cure period under this Section 13.3(d) may be extended by an additional subsequent period not to exceed ninety (90) days if a Financing Party has stepped in to effectuate a cure in accordance with the terms of any financing arrangement agreed to pursuant to Section 18.2; and (e) Any representation or warranty made by Ava herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if Ava is unable to remedy such default within such initial thirty (30) day period despite exercising commercially reasonable efforts; provided, that the cure period under this Section 13.3(e) may be extended by an additional subsequent period not to exceed ninety (90) days if a Financing Party has stepped in to effectuate a cure in accordance with the terms of any financing arrangement agreed to pursuant to Section 18.2.
Section 13.4 City’s Remedies for Ava Portfolio Default. If an Ava Portfolio Default has occurred and is continuing, and the following the expiration of any applicable cure period set forth therein, City may perform any and all of the following actions: (i) suspend performance under this Agreement; (ii) accelerate all amounts owing between the Parties; (iii) withhold all payments due to Ava under this Agreement; (iv) terminate this Agreement upon providing written notice to Ava, and upon any such termination, demand payment from Ava of the Termination Payment; and/or (v) exercise any other right or remedy available at law or in equity, except to the extent such remedies are expressly limited under this Agreement; provided, that no termination may occur unless and until written notice has been delivered to any Financing Party for which City has received notice in accordance with Section 18.2. Upon the termination of this Agreement, Ava shall perform the Removal Services for the entire City Portfolio in accordance with Section 11.2 at Ava’s sole expense.
Section 13.5 City Project Default. With respect to the affected Project only, City shall be deemed a Defaulting Party upon the occurrence of any of the following events (each, a “City Project Default”):
(a) Due to acts or omissions of the City, Ava indirectly loses its rights to use and enjoy the Project Site under the Non-Exclusive License, unless the Parties can agree to relocate the Project in accordance with Section 11.1, and except where such acts or omissions of the City constitute the lawful application of City’s Permitting Authority pursuant to Section 10.4; (b) The occurrence of any act or omission by City that operates to suspend, revoke or terminate any certificate, permit, franchise, approval authorization or power necessary for Ava to lawfully conduct operations on the Project Site, except where such act or omission of City is the result of (i) the negligence or willful misconduct of Ava or (ii) a Lawful Permitting Denial Event; and
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(c) The occurrence of any act or omission by City that is inconsistent with this Agreement that materially interferes with Ava’s development, construction, operation or maintenance of any Project, and such failure is not remedied within thirty (30) days after notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if City is unable to remedy such default within such initial thirty (30)-day period despite exercising commercially reasonable efforts).
Section 13.6 Ava’s Remedies for City Project Default. If a City Project Default has occurred and is continuing, and following the expiration of any applicable cure period set forth therein, Ava may perform any and all of the following actions: (i) suspend performance under this Agreement with respect to such Project; (ii) accelerate all amounts owing between the Parties with respect to such Project; (iii) withhold a portion of any payments due to City under this Agreement in an amount attributable to such Project; and/or (iv) terminate the applicable PSA. Upon the termination of any PSA hereunder, Ava shall perform the Removal Services for such Project in accordance with Section 11.2 at City’s sole expense.
Section 13.7 City Portfolio Default. City shall be deemed a Defaulting Party under this Agreement upon the occurrence of any of the following events (each, a “City Portfolio Default”):
(a) A Bankruptcy Event shall have occurred with respect to City; (b) City fails to pay Ava any undisputed amount owed under the Agreement within sixty (60) days after receipt of notice from Ava of such past due amount; (c) City fails 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 Article 13), and such failure is not remedied within thirty (30) days after notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if City is unable to remedy such default within such initial thirty (30) day period despite exercising commercially reasonable efforts); or
(d) Any representation or warranty made by City herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if City is unable to remedy such default within such initial thirty (30) day period despite exercising commercially reasonable efforts).
Section 13.8 Ava’s Remedies for City Portfolio Default. If a City Portfolio Default has occurred and is continuing, and following the expiration of any applicable cure period set forth therein, Ava may perform any and all of the following actions: (i) suspend performance under this Agreement; (ii) accelerate all amounts owing between the Parties; (iii) withhold all payments due to City under this Agreement; (iv) terminate this Agreement upon providing written notice to City, and upon any such termination, demand payment from City of the City Termination Payment; and/or (v) exercise any other right or remedy available at law or in equity, except to the extent such remedies are expressly limited under this Agreement. Upon receiving payment of the City Termination Payment, Ava shall perform the Removal Services in accordance with Section 11.2 at City’s sole expense.
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ARTICLE 14
REPRESENTATIONS, WARRANTIES, AND COVENANTS
Section 14.1 Ava Representations and Warranties. Ava represents and warrants to City the following:
(a) Valid Existence. Ava is a joint powers authority and community choice aggregator, duly organized, validly existing, and in good standing under the laws of the State of California and the rules, regulations, and orders of the CPUC, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. (b) No Conflicts. The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfilment of and compliance with the provisions of this Agreement by Ava will not conflict with, or constitute a breach of or a default under, any Applicable Law present in effect having applicability to Ava, the documents of formation of Ava, or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness, or any other agreement or instrument to which Ava is a party or by which any of its property is bound.
Section 14.2 City’s Representations and Warranties. City represents and warrants to Ava the following:
(a) Valid Existence. The City is a municipal corporation, duly organized, validly existing, and in good standing under the laws of the State of California, and is qualified to conduct business in the City of [____].
(b) No Conflicts. The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfilment of and compliance with any provisions of this Agreement by the City will not conflict with, or constitute a breach of or a default under, any Applicable Law present in effect having applicability to the City, the documents of formation of the City, or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness, or any other agreement or instrument to which the City is a party or by which any of its property is bound.
(c) Licenses. (i) City has achieved Site Control for the Project Site such that City has the full right, power, and authority to grant the Licenses in Article 6, and (ii) such grant of the Licenses does not violate any law applicable to City or the Project Site, and is not inconsistent with and will not result in a breach or default under any agreement by which City is bound or that affects the Project Site.
(d) Other Agreements. Neither the execution and delivery of this Agreement by City nor the performance by City of any of its obligations under this Agreement conflicts with or will result in a breach or default under any agreement or obligation to which City is a party or by which City is bound.
(e) Accuracy of Information. All information provided by City to Ava, as it pertains to (i) the Project Site, (ii) the Improvements on which the Project is to be installed, if Attachment Staff Report Item 15C
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applicable, (iii) City’s planned use of the Project Site and any applicable Improvements, and (iv) City’s estimated electricity requirements, if provided, is accurate in all material respects. (f) City Status. City is not a public utility or a public utility holding company and is not subject to regulation as a public utility or a public utility holding company. City is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California. (g) Limit on Use. No portion of the electricity generated by the Project shall be used to heat a swimming pool.
Section 14.3 General Covenants. Each Party covenants to and for the benefit of the other Party that throughout the Term:
(a) Each Party shall maintain (or obtain from time to time, as required) all Governmental Approvals necessary for it to legally perform its obligations under this Agreement. (b) Each Party shall undertake its obligations under this Agreement in compliance with (i) all Applicable Law (including, but not limited to, those related to workplace safety, employment discrimination, prevailing wage, non-discrimination and non-preference, and conflicts of interest), Prudent Operating Practices, (ii) all applicable operating policies, criteria, rules, guidelines, tariffs and protocols of the CAISO and the Local Electric Utility, and (iii) all applicable requirements of the CPUC, CARB, FERC, NERC, and WECC (including WECC Scheduling Practices).
Section 14.4 Covenants of Ava. Ava covenants to and for the benefit of City that throughout the Term:4
(a) None of Ava, its employees, contractors, or agents have been suspended, debarred, or excluded from, or ineligible from, receiving federal or state funds. Ava shall notify City if Ava is suspended, barred, excluded, or determined to be ineligible for receiving state or federal funds at any time during the Term within thirty (30) days of Ava obtaining knowledge thereof.
(b) All personnel performing operation and maintenance services for the Projects shall be licensed and in good standing, and sufficiently qualified, experienced, and trained in accordance with Prudent Operating Practices.
4 Note to Cities: We have deleted the concept of the Performance Security, as we do not expect to receive a Performance Security from the O&M Contractor as this is not customary in the market. Ava, (which is considered an investment-grade entity) will stand behind O&M obligations in this agreement.
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ARTICLE 15
INSURANCE
At all times during the Term, the Parties shall maintain the following insurance, as applicable:
Section 15.1 Ava’s Insurance. Ava shall, directly or indirectly through the applicable Subcontractor, obtain and maintain the policies of insurance in amounts and with coverage as set forth in Exhibit IV of the applicable Addendum for the Term of this Agreement.
Section 15.2 City’s Insurance. City is a self-insured public agency. Upon Ava’s request, City shall deliver to Ava certificates of insurance evidencing the insurance coverage.
ARTICLE 16
INDEMNIFICATION AND LIMITATIONS OF LIABILITY
Section 16.1 Indemnity by the Parties. To the fullest extent permitted by law, each Party (“Indemnifying Party”) shall defend, indemnify, and hold harmless, with counsel of its own choosing (subject to terms of the next paragraph), the other Party, and its successors and assigns, and their elected officials, officers, directors, employees, agents, affiliates and representatives (each, an “Indemnified Party”) from and against any and all third-party claims, liability or losses (“Claims”), including but not limited to those losses arising from (i) personal injury or death, (ii) damage to property, (iii) taxes for which the Indemnifying Party is responsible under this Agreement, (iv) fines or penalties payable by the Indemnified Party, or (v) any other actions resulting in damages, losses or liabilities, to the extent such losses result from or arise out of or in any way are connected with the Indemnifying Party’s performance of this Agreement or, in the case of Ava, (a) City’s use of any service, technology, or good provided by Ava to City under this Agreement infringes any patent, trademark, copyright, or other intellectual property right, including trade secret rights or rights of a third party, except as may arise solely from the negligence, willful misconduct, or violation of law by the Indemnified Party, its officers, employees, subcontractors, or agents, or (b) City’s damages stemming from failure to release specific records pursuant to the California Public Records Act at Ava’s direction that City not release such specific requested records related to this Agreement to the public. Notwithstanding the above, an Indemnifying Party shall not be required to defend, indemnify, and hold harmless an Indemnified Party for the Indemnified Party’s own negligent acts, omissions, or willful misconduct. It is the intent of the Parties that where negligence is determined to have been joint or contributory, principles of comparative negligence will be followed, and each Party shall bear the proportionate cost of any loss damage, expense, or liability attributable to that Party’s negligence. (a) Design Professional Services. To the extent that a portion of Ava’s services under this Agreement are design professional services subject to Civil Code Section 2782.8, and to the extent that a particular claim or litigation arises from such design professional services, Ava’s obligations under this Section 16.1(a) shall be subject to any applicable limitations mandated by Civil Code Section 2782.8.
Section 16.2 Notice and Participation in Third Party Claims. The Indemnified Party shall give the Indemnifying Party written notice with respect to any liability asserted under a Claim Attachment Staff Report Item 15C
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as soon as possible upon the receipt of information of any possible Claim or of the commencement of such Claim. The Indemnifying Party may assume the defense of any Claim, at its sole cost and expense, with counsel designated by the Indemnifying Party and reasonably satisfactory to the Indemnified Party. The Indemnified Party may, however, select separate counsel if both Parties are defendants in the Claim and such defense or other form of participation is not reasonably available to the Indemnifying Party. The Indemnifying Party shall pay the reasonable attorneys’ fees incurred by such separate counsel until such time as the need for separate counsel expires.
The Indemnified Party may also, at the sole cost and expense of the Indemnifying Party, assume the defense of any Claim if the Indemnifying Party fails to assume the defense of the Claim within a reasonable time. Neither Party may settle any Claim covered by this Section 16.2 unless it has obtained the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. The Indemnifying Party has no liability under this Section 16.2 for any Claim for which such notice is not provided if the failure to give notice prejudices the Indemnifying Party.
All of the Parties’ obligations under this Section 16.2 are intended to apply to the fullest extent permitted by law and shall survive the expiration or sooner termination of this Agreement.
Section 16.3 Environmental Indemnification.
(a) Ava Indemnity. Ava shall indemnify, defend, and hold harmless all of City’s Indemnified Parties from and against all liabilities arising out of or relating to the existence at, on, above, below, or near the Project Site of any Hazardous Substance to the extent deposited, spilled, or otherwise caused by Subcontractors, Ava, or any of their contractors, agents or employees, to the extent such liabilities do not result from the gross negligence or willful misconduct of City.
(b) City Indemnity. City shall indemnify, defend, and hold harmless Subcontractors and all of Ava’s Indemnified Parties from and against all liabilities arising out of or relating to the existence at, on, above, below, or near the Project Site of any Hazardous Substance, except to the extent deposited, spilled, or otherwise caused by Subcontractors, Ava, or any of their contractors, agents or employees, to the extent such liabilities to not result from the gross negligence or willful misconduct of the same Subcontractor or Ava. (c) Notice. Each Party shall promptly notify the other Party if it becomes aware of any Hazardous Substance on or about the Project Site generally or any deposit, spill, or release of any Hazardous Substance.
Section 16.4 Limitations on Liability.
(a) No Consequential Damages. EXCEPT TO THE EXTENT (i) PART OF AN
EXPRESS REMEDY OR EXPRESS MEASURE OF DAMAGES HEREIN, INCLUDING ANY TERMINATION PAYMENT, (ii) PART OF A THIRD PARTY INDEMNITY CLAIM, OR (iii) RESULTING FROM A PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, PUNITIVE,
EXEMPLARY, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, OR LOSSES
OR DAMAGES FOR LOST REVENUE OR LOST PROFITS, WHETHER FORESEEABLE OR
NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT BY STATE, IN TORT OR IN CONTRACT.
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(b) Cumulative Remedies. IF NO REMEDY OR MEASURE OF DAMAGES
IS EXPRESSLY PROVIDED, OR IF A REMEDY OR MEASURE OF DAMAGES IS
EXPRESSLY NON-EXCLUSIVE, THE NON-DEFAULTING PARTY SHALL HAVE THE
RIGHT TO EXERCISE ALL RIGHTS AND REMEDIES AVAILABLE TO IT AT LAW OR IN
EQUITY, PROVIDED, HOWEVER, THAT THE LIABILITY OF THE DEFAULTING PARTY
SHALL BE LIMITED TO DIRECT, ACTUAL DAMAGES ONLY AND ALL OTHER DAMAGES AND REMEDIES ARE WAIVED.
(c) Exclusive Remedies. FOR BREACH OF ANY PROVISION OF THIS
AGREEMENT FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS
PROVIDED IN THIS AGREEMENT, THE RIGHTS OF THE NON-DEFAULTING PARTY
AND THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED AS SET
FORTH IN THIS AGREEMENT, AS THE SOLE AND EXCLUSIVE FULL, AGREED UPON
AND LIQUIDATED DAMAGES, AND NOT AS A PENALTY, AND ALL OTHER DAMAGES OR REMEDIES ARE WAIVED.
(d) Limitation on Ava Liability Prior to COD. Notwithstanding anything herein to the contrary, with respect to each Project, Ava’s aggregate liability for all amounts owed under this Agreement shall by capped in the aggregate at an amount equal to two hundred dollars ($200) per kW of Project Capacity.
ARTICLE 17
CHANGE IN LAW; COMPLIANCE EXPENDITURE CAP
Section 17.1 Changes in Law. Subject to Section 17.2 below, in the event that any Change in Law occurring after the Effective Date results in this Agreement or any provisions hereof becoming incapable of being performed or administered, then either Party may request that Ava and the City 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, the Parties shall engage in such negotiations in good faith. If the Parties 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 either Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Section 20.3. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, or constitute, or form the basis of, a Force Majeure Event, and (ii) all unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution. Notwithstanding the foregoing, in the event of any tariff enacted or imposed by a Governmental Authority after the Effective Date that results in Ava no longer being able to provide Optimization Savings greater than zero dollars ($0) to City, as determined by Ava in its sole discretion, then Ava may (x) terminate or withdraw one or more Project(s) from the City Portfolio in order to achieve estimated Optimization Savings greater than zero dollars ($0) over the Portfolio Delivery Period, or (y) terminate the entire City Portfolio, if it is impossible to provide Optimization Savings greater than zero dollars ($0) (in the case of (x) or (y), a “Tariff Termination”).
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Section 17.2 Compliance Expenditure Cap. With respect to each Project, if a Change in Law has increased Ava’s known or reasonably expected costs to comply with its obligations under this Agreement or the applicable PSA (any action required to be taken by Ava to comply with such Change in Law, a “Compliance Action”), then the Parties agree that the maximum amount of costs and expenses Ava shall be required to bear during the Project Term to comply with all such obligations shall be capped at one hundred dollars ($100) per kW of such Project’s Guaranteed Nameplate Capacity or Storage Inverter Power, as applicable, in aggregate over the Project Term (the “Compliance Expenditure Cap”). If Ava reasonably anticipates the need to incur out-of-pocket expenses in excess of the Compliance Expenditure Cap in order to take any Compliance Action, Ava shall provide notice to the City of such anticipated out-of-pocket expenses. If, within ten (10) Business Days after receiving Ava’s notice, the City does not agree in writing to reimburse Ava for all costs and expenses of Compliance Actions in excess of the Compliance Expenditure Cap, Ava’s obligation to take any and all applicable Compliance Actions, and deliver any and all Product that may not be delivered in the absence of such Compliance Actions, shall be waived.
ARTICLE 18
ASSIGNMENT AND FINANCING
Section 18.1 Assignment.
(a) Restrictions on Assignment. This Agreement may not be assigned, in whole or in part, by City. Ava may, by providing prior written notice to City, assign, mortgage, pledge or otherwise directly or indirectly assign its interests in this Agreement to any (i) Financing Party, (ii) entity through which Ava is obtaining financing from a Financing Party, or (iii) California joint powers authority (each, a “Permitted Assignee”); provided, that, Ava is not released from liability hereunder as a result of any assignment to a joint powers authority unless such joint powers authority assumes Ava’s obligations hereunder by binding written instrument. (b) Successors and Permitted Assignees. This Agreement is binding on and inures to the benefit of successors and Permitted Assignees.
Section 18.2 Financing and Collateral Assignment. The Parties acknowledge that Ava may obtain debt or equity financing or other credit support from lenders, investors, including tax equity investors, or other third parties (each a “Financing Party”) in connection with the installation, construction, ownership, operation, and maintenance of the Projects, and that Ava’s obligations under the financing documents may be secured by, among other collateral, a pledge or collateral assignment of Ava’s rights under this Agreement. Ava shall promptly notify City of the identity of any Financing Party retained by Ava under this Section 18.2.
Section 18.3 Termination Requires Consent. Ava and City agree that any right of Ava to terminate this Agreement may be subject to the prior written consent of any Financing Party.
ARTICLE 19
CONFIDENTIALITY
Section 19.1 Confidential Information. To the maximum extent permitted by Applicable Law, if either Party provides Confidential Information to the other or, if in the course of performing under this Agreement or negotiating this Agreement, a Party learns Confidential Attachment Staff Report Item 15C
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Information of the other Party, the receiving or learning Party shall (i) protect the Confidential Information from disclosure to third parties with the same degree of care accorded its own confidential and proprietary information and (ii) refrain from using such Confidential Information, except in the negotiation, performance, enforcement and, in the case of Ava, financing, of this Agreement.
(a) Confidential Information does not include any information that (i) becomes publicly available other than through breach of this Agreement, (ii) is required to be disclosed to a Governmental Authority under Applicable Law or pursuant to a validly issued subpoena, (iii) is independently developed by the receiving Party, or (iv) becomes available to the receiving Party without restriction from a third party under no obligation of confidentiality. If disclosure of information is required by a Governmental Authority, the disclosing Party shall, to the extent permitted by Applicable Law, notify the other Party of such required disclosure promptly upon becoming aware of such required disclosure and shall reasonably cooperate with the other Party’s efforts to limit the disclosure to the extent permitted by Applicable Law. (b) The Parties acknowledge and agree that the Agreement and any transaction entered into in connection herewith are subject to the requirements of the California Public Records Act (Government Code Section 7920.000 et seq.). In order to designate information as confidential, the disclosing Party must clearly stamp and identify the specific portion of the material designated with the word “confidential.” 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.
Section 19.2 Permitted Disclosures. Notwithstanding Section 19.1:
(a) A Party may provide such Confidential Information to its affiliates and to its and its affiliates’ respective officers, directors, members, managers, employees, agents, contractors, consultants, counsel, and Financing Parties, and their respective consultants and counsel (collectively, “Representatives”), and potential direct or indirect assignees of this Agreement, if such potential assignees are first bound by a written agreement or legal obligation restricting use and disclosure of Confidential Information. Each Party is liable for breaches of this provision by any Person to whom that Party discloses Confidential Information; and (b) Upon request or demand made to either Party hereto by a validly issued subpoena or any third party not a Party hereto and not otherwise subject to the provisions of Section 19.2(a) pursuant to the California Public Records Act for production, inspection and/or copying of Confidential Information (“Requested Confidential Information”), the disclosing Party shall, as soon as practical, prior to releasing any Requested Confidential Information, notify the other Party in writing via electronic mail that such request has been made. The other Party 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 the disclosing Party. If the other Party takes no such action within ten (10) days after receiving the foregoing notice from the disclosing Party, the disclosing Party 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 the other Party takes or attempts to take such action, the disclosing Party shall provide timely and reasonable cooperation Attachment Staff Report Item 15C
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to the other Party, if requested by the other Party, and the other Party agrees to indemnify and hold harmless the disclosing Party and its Representatives from any claims, liability, award of attorneys’ fees or damages, and to defend any action, claim or lawsuit brought against any of the disclosing Party or its Representatives for the disclosing Party’s refusal to disclose any Requested Confidential Information.
Section 19.3 Miscellaneous. All Confidential Information remains the property of the disclosing Party and will be returned to the disclosing Party or destroyed, at the receiving Party’s option, after the receiving Party’s need for it has expired or upon the request of the disclosing Party. Each Party acknowledges that the disclosing Party would be irreparably injured by a breach of this Article 19 by the receiving Party or its Representatives or other Person to whom the receiving Party discloses Confidential Information of the disclosing Party and that the disclosing Party may be entitled to equitable relief, including injunctive relief and specific performance, for breaches of this Article 19. To the fullest extent permitted by Applicable Law, such remedies shall not be deemed to be the exclusive remedies for a breach of this Article 19 but will be in addition to all other remedies available at law or in equity. The obligation of confidentiality will survive termination of this Agreement for a period of two years.
Section 19.4 Goodwill and Publicity. Neither Party may (i) make any press release or public announcement of the specific terms of this Agreement or the use of renewable energy or storage involving this Agreement (except for filings or other statements or releases as may be required by Applicable Law) or (ii) use any name, trade name, service mark, or trademark, as applicable, of the other Party in any promotional or advertising material without the prior written consent of the other Party. The Parties shall coordinate and cooperate with each other when making public announcements regarding this Agreement, the Project and its use, and each Party may promptly review, comment upon, and approve any publicity materials, press releases, or other public statements before they are made. Notwithstanding the above, Ava is entitled to place signage on the Project Site with written approval from City reflecting its association with the Project and to make public statements regarding the transactions contemplated by this Agreement and the Project and its use as part of Ava’s monthly, public board meetings. Ava may not use the name of City or reference any endorsement from City in any fashion for any purpose without the prior express written consent of City.
ARTICLE 20
GENERAL PROVISIONS
Section 20.1 Interpretation. Unless otherwise defined or required by the context in which any term appears: (i) 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; (ii) the singular includes the plural and vice versa; (iii) the words “herein,” “hereof”, and “hereunder” refer to this Agreement as a whole and not to any particular section or subsection of this Agreement; (iv) references to any agreement, document or instrument mean such agreement, document or instrument as amended, restated, modified, supplemented or replaced from time to time; (v) the words “include,” “includes” and “including” mean include, includes and including “without limitation;” (vi) references to “or” shall be deemed to be disjunctive but not necessarily exclusive (i.e., unless the context dictates otherwise, “or” shall be interpreted to mean “and/or” rather than “either/or”); (vii) words “herein,” “hereunder,” and “hereof” refer to the Attachment Staff Report Item 15C
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provisions of this Agreement as a whole and not to any particular portion or provision of this Agreement and (viii) 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. The captions or headings in this Agreement are strictly for convenience and will not be considered in interpreting this Agreement. As used in this Agreement, “dollar” and the “$” sign refer to United States dollars.
Section 20.2 Choice of Law; Venue. The law of the State of California governs all matters arising out of this Agreement without giving effect to conflict of laws principles. In the event that a suit is brought by either Party hereunder, the Parties agree that venue shall be exclusively vested in the state courts of California in the County of Alameda, or if federal jurisdiction is appropriate, exclusively in the United States District Court in the Northern District of California.
Section 20.3 Dispute Resolution. The Parties shall negotiate in good faith and attempt to resolve expeditiously and inexpensively any dispute, controversy, or claim arising out of or relating to this Agreement (a “Dispute”) within fifteen (15) days after the date that a Party gives written notice of such Dispute to the other Party. If the Parties are unable to resolve a Dispute arising hereunder within the earlier of either thirty (30) days of initiating such discussions, or within forty (40) days after submission of notice of the Dispute, the Parties shall submit the Dispute to mediation prior to seeking any and all remedies available at law in or equity. The Parties will cooperate in selecting a qualified neutral mediator selected from a panel of neutrals and in scheduling the time and place of the mediation as soon as reasonably possible, but in no event later than thirty (30) days after the request for mediation is made. The Parties agree to participate in the mediation in good faith and to share the costs of the mediation, including the mediator’s fee, equally, but such shared costs shall not include each Party’s own attorneys’ fees and costs, which shall be borne solely by such Party. If the mediation is unsuccessful, then either Party may seek any and all remedies available to it at law or in equity, subject to the limitations set forth in this Agreement.
Section 20.4 Notices. All notices under this Agreement shall be in writing and delivered by hand, electronic mail, overnight courier, or regular, certified or registered mail, return receipt requested, and will be deemed received upon personal delivery, acknowledgment of receipt of electronic transmission, the promised delivery date after deposit with overnight courier or five days after deposit in the mail. Notices must be sent to the Person identified on EXHIBIT V at the addresses set forth on EXHIBIT V. Each Party may designate a different Person and address by sending written notice to the other Party, to be effective no sooner than ten days after the date of submission of such notice designating a different Person and address.
Section 20.5 Survival. The provisions of this Agreement that should reasonably be considered to survive termination of this Agreement, including, without limitation the provisions enumerated in this Section 20.5, will survive termination of this Agreement:
(a) obligations to pay by either Party that have accrued prior to termination or expiration;
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(b) obligations to repair damage caused by either Party under Article 7, Article 8 or otherwise;
(c) Section 5.6 (Pass Through Damages);
(d) Section 5.7 (Books and Records);
(e) Section 11.2 (Removal);
(f) Section 11.3 (Abandonment);
(g) Section 11.4 (Ava Removal Security)
(h) Article 13 (Defaults, Remedies, and Damages);
(i) Article 14 (Representations, Warranties, and Covenants); (j) Article 16 (Indemnification and Limitations of Liability); (k) Article 19 (Confidentiality); and
(l) Article 20 (General Provisions).
Section 20.6 Compliance with All Laws. The Parties shall at all times comply with all Applicable Laws. City shall at all times keep Ava fully informed of City’s charter, codes, ordinances, and regulations and of all state and federal laws in any manner affecting the performance of this Agreement to ensure that the Parties shall at all times comply with all applicable local codes, ordinances, and regulations, as they may be amended from time to time.
Examples of such regulations include but are not limited to California Occupational Safety and Health Act of 1973, Labor Code §6300 et. seq., the Fair Packaging and Labeling Act, and the standards and regulations issued there under.
Section 20.7 Good Faith & Fair Dealing. The Parties agree to act reasonably and in accordance with the principles of good faith and fair dealing in the performance of this Agreement.
Unless expressly provided otherwise in this Agreement, (i) wherever this Agreement requires the consent, approval or similar action by a Party, such consent, approval or similar action shall not be unreasonably withheld or delayed, and (ii) wherever this Agreement gives a Party a right to determine, require, specify or take similar action with respect to matters, such determination, requirement, specification or similar action shall be reasonable.
Section 20.8 Cooperation. The Parties agree to reasonably cooperate with each other in the implementation and performance of this Agreement. Such duty to cooperate shall not require either Party to act in a manner inconsistent with its rights under this Agreement.
Section 20.9 Construction. The Parties acknowledge that this Agreement was jointly prepared by them, by and through their respective legal counsel, and any uncertainty or ambiguity existing herein shall not be interpreted against either Party on the basis that the Party drafted the Attachment Staff Report Item 15C
General Terms and Conditions | 36
language, but otherwise shall be interpreted according to the application of the rules on interpretation of contracts.
Section 20.10 Non-Discrimination. Ava shall comply with all Applicable Laws, including City’s policies concerning nondiscrimination and equal opportunity in contracting. Such laws include but are not limited to the following: Title VII of the Civil Rights Act of 1964 as amended; Americans with Disabilities Act of 1990; The Rehabilitation Act of 1973 (Sections 503 and 504); California Fair Employment and Housing Act (Government Code Sections 12900 et seq.); and California Labor Code Sections 1101 and 1102. Ava shall not discriminate (i) against any subcontractor, employee or applicant for employment or (ii) in the provision of services provided under this Agreement because of age, race, color, national origin, ancestry, religion, sex/gender, sexual orientation, mental disability, physical disability, medical condition, political beliefs, organizational affiliations or marital status in the recruitment or selection for training, including apprenticeship, hiring, employment, utilization, promotion, layoff, rates of pay or other forms of compensation.
Section 20.11 Non-Exclusive Contract. This Agreement does not establish an exclusive contract between the City and Ava for the purchase of electricity or power or any services. To the extent that the City has remained in compliance with and has not defaulted under any terms of this Agreement, the City expressly reserves all its rights, including but not limited to, the following:
the right to utilize others to provide electricity, products, support and services; the right to request proposals from others with or without requesting proposals from Ava; and the unrestricted right to bid any such product, support or service.
Section 20.12 Further Assurances. Each Party shall provide such information, execute and deliver any instruments and documents, and take such other actions as may be 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.
Section 20.13 Waivers. No provision or right or entitlement under this Agreement may be waived or varied except in writing signed by the Party to be bound. No waiver of any of the provisions of this Agreement will constitute a waiver of any other provision, nor will such waiver constitute a continuing waiver unless otherwise expressly provided.
Section 20.14 Non-Dedication of Projects. Nothing in this Agreement may be construed as the dedication by either Party of its Projects or equipment to the public or any part thereof.
Neither Party may knowingly take any action that would subject the other Party, or other Party’s Projects or equipment, to the jurisdiction of any Governmental Authority as a public utility or similar entity. Neither Party may assert in any proceeding before a court or regulatory body that the other Party is a public utility by virtue of such other Party’s performance under this Agreement.
If Ava is reasonably likely to become subject to regulation as a public utility, then the Parties shall use commercially reasonable efforts to restructure their relationship under this Agreement in a manner that preserves their relative economic interests while ensuring that Ava does not become subject to any such regulation. If the Parties are unable to agree upon such restructuring, Ava may terminate this Agreement without further liability under this Agreement except with respect to Attachment Staff Report Item 15C
General Terms and Conditions | 37
liabilities accrued prior to the date of termination and remove the Project in accordance with Section 11.2 of this Agreement.
Section 20.15 Service Contract. The Parties intend this Agreement to be a “service contract” within the meaning of Section 7701(e)(3) of the Internal Revenue Code of 1986. City shall not take the position on any tax return or in any other filings suggesting that it is anything other than a City of electricity from the Project.
Section 20.16 No Agency, Lease, Joint Venture or Partnership. No provision of this Agreement may be construed or represented as creating a partnership, trust, joint venture, fiduciary, or any similar relationship between the Parties. No Party is authorized to act on behalf of the other Party, and neither may be considered the agent of the other. Ava shall perform pursuant to this Agreement as an independent contractor and not as an officer, agent, servant, or employee of City. Ava shall be solely responsible for the acts and omissions of its officers, agents, employees, contractors, and subcontractors, if any. Nothing herein shall be considered as creating a partnership or joint venture between City and Ava. No Person performing any services and/or supplying all goods shall be considered an officer, agent, servant, or employee of City, nor shall any such Person be entitled to any benefits available or granted to employees of City. Any terms in this Agreement referring to direction from City shall be construed as providing for direction as to policy and the result of Ava’s work only, and not as to the means by which such a result is obtained. City does not retain the right to control the means or the method by which Ava performs work under this Agreement.
Section 20.17 Account Manager. Ava must assign an account manager to City to facilitate the contractual relationship and to be fully responsible and accountable for fulfilling City’s requirements. Ava represents and warrants that such account manager will ensure that City receives adequate support, problem resolution assistance, and required information on a timely basis.
Section 20.18 Entire Agreement, Modification, Severability. This Agreement, together with all of the exhibits, schedules, attachments, and PSAs, constitutes the entire agreement of the Parties regarding its subject matter and supersedes all prior proposals, agreements or other communications between the Parties, oral or written. The exhibits, schedules, attachments, and PSAs attached hereto are integral parts hereof and are made part of this Agreement by reference.
This Agreement may be modified only by a writing signed by both Parties. If any provision of this Agreement is found unenforceable or invalid, such provision shall not be read to render this Agreement unenforceable or invalid as a whole. In such event, such provision shall be rectified or interpreted so as to best accomplish its objectives within the limits of Applicable Law.
Section 20.19 Forward Contract. The transaction contemplated under this Agreement constitutes a “forward contract” within the meaning of the United States Bankruptcy Code, and the Parties further acknowledge and agree that each Party is a “forward contract merchant” within the meaning of the United States Bankruptcy Code. Each Party further agrees that, for all purposes of this Agreement, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last Attachment Staff Report Item 15C
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resort to the extent such term relates to 11 U.S.C. §366 or another provision of 11 U.S.C. § 101- 1532.
Section 20.20 No Third-Party Beneficiaries. Except as otherwise expressly provided herein, this Agreement and all rights hereunder are intended for the sole benefit of the Parties hereto, and the Financing Parties to the extent provided herein or in any other agreement between a Financing Party and Ava or City, and do not imply or create any rights on the part of, or obligations to, any other Person.
Section 20.21 Disentanglement. Ava shall cooperate with City to ensure a smooth transition at the time of termination of this Agreement, regardless of the nature or timing of the termination. Ava shall cooperate with City’s efforts to ensure that there is no interruption of electricity and no adverse impact on the provision of services or City’s activities. Ava shall return to City all City assets or information in Ava’s possession. Ava shall deliver to City or its designee, at City’s request, all documentation and data related to City, including, but not limited to, City data and client files, held by Ava, and Ava shall destroy all copies thereof not turned over to City, all at no charge to City.
Section 20.22 Accountability. Ava will be the primary point of contact and assume the responsibility of all matters relating to this Agreement, including those involving the manufacturer, deliverer or any subcontractor, as well as payment issues. If issues arise, Ava must act as soon as reasonably practicable to correct or resolve the issues.
Section 20.23 Cooperation with Review. Ava shall cooperate with City’s periodic review of Ava’s performance. Such review may be conducted on a bi-annual basis, in the reasonable discretion of City, upon no less than sixty (60) days’ advance written notice to Ava.
Section 20.24 Authority. The signatories hereto represent and warrant that they are duly authorized on behalf of their respective entities to enter into and consummate this Agreement.
Section 20.25 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument. The Parties agree that the digital signatures of the signatories included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Any digital signature shall have the same legal validity and enforceability as a manually executed signature or use of a paper-based record keeping system to the fullest extent permitted by Applicable Law. [Remainder of Page Intentionally Left Blank]
Attachment Staff Report Item 15C
[Signature Page to [___] City PPA – Critical Municipal Facilities] IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
[CITY]
By:
Name:
Title:
AVA COMMUNITY ENERGY, A
CALIFORNIA JOINT POWERS
AUTHORITY
By:
Name: Howard Chang
Title: Chief Executive Officer
APPROVED AS TO FORM:
By:
Name: Inder Khalsa
Title: General Counsel
Date:
Attachment Staff Report Item 15C
Schedule I | 1
Schedule I
Defined Terms
“Adjusted Energy Production” has the meaning set forth in Section 8.1(a) “Adverse Effect” has the meaning set forth in Section 7.6. “Adverse Environmental Conditions” means (i) the existence or the continuation of the existence of Environmental Contamination (including, without limitation, a sudden or non-sudden accidental or non-accidental Environmental Contamination), or exposure to or release of any substance, chemical, material, pollutant, Hazardous Substance, odor or audible noise or other release or emission in, into or onto the environment at, in, by or related to the Project Site, (ii) the environmental aspect of the transportation, storage, treatment or disposal or materials in connection with the Project, or (iii) the violation, or alleged violation, of any Environmental Law, permits or licenses of, by or from any Governmental Authority relating to environmental matters connected with the applicable Project Site.
“Affected Projects” has the meaning set forth in Section 10.5. “Agreement” has the meaning set forth in the Preamble.
“AHJ” means any Governmental Authority, agency, organization, office or Person responsible for (i) enforcing the requirements of a statute, regulation, code or standard, (ii) issuing a Governmental Approval, or (iii) or for approving equipment, materials, an installation or a procedure in relation to a Project.
“Ancillary Services” means operating reserves, regulation, black-start capability, reactive supply, voltage control, frequency response, contingency reserves, other products associated with electric generation and Energy that a Project is capable of providing and all other beneficial attributes and outputs of the Project not required for the operation of the Project. “Annual Escalator” has the meaning set forth in Section 5.1(a)(i). “Annual Storage Availability” has the meaning set forth in Section 8.2(a). “Applicable Law” means all national, state, local or municipal laws, statutes, codes, acts, treaties, ordinances, orders, judgments, writs, decrees, injunctions, rules, regulations, Governmental Approvals, licenses, permits, directives, and requirements of all regulatory and other Governmental Authorities.
“Attestation Form” means documentation provided by Ava to City transferring title to the RECs, specifying the Project, REC quantity, and REC vintage with respect to the RECs sold herein. “Ava” has the meaning set forth in the Preamble.
“Ava Event of Default” means an Ava Portfolio Default or an Ava Project Default, or both, as the context may require.
Attachment Staff Report Item 15C
Schedule I | 2
“Ava Pass-Through Costs” has the meaning set forth in Section 5.6 “Ava Portfolio Default” has the meaning set forth in Section 13.3. “Ava Project Default” has the meaning set forth in Section 13.1. “Ava Removal Security” has the meaning set forth in Section 11.4. “Ava Termination Payment” means the corresponding amount set forth in the schedule set forth in EXHIBIT VI.
“Ava WREGIS Account” has the meaning set forth in Section 9.2. “Avoided Utility Cost” means the applicable amount set forth in EXHIBIT I. “Bankruptcy Event” means with respect to any entity, the occurrence of any of the following:
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, or has any such petition filed or commenced against it and such case filed against it is not dismissed in 60 days, (b) makes an assignment or any general arrangement for the benefit of creditors, (c) otherwise becomes bankrupt or insolvent (however evidenced), (d) 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 (e) is generally unable to pay its debts as they fall due.
“Bill Credit Disqualifying Event” has the meaning set forth in Section 5.1(c), “Budgetary Non-Appropriation Event” has the meaning set forth in Section 10.3. “Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in the State of California are authorized or required to close. “CAISO” means the California Independent System Operator or any successor entity performing similar functions.
“Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of power that the Project can accept at or deliver to the Delivery Point at a particular moment and that can be purchased and sold under CAISO market rules, including Resource Adequacy Benefits. “CARB” means the California Air Resources Board.
“Change in Law” means (i) the enactment, adoption, promulgation, modification or repeal after the Effective Date of any Applicable Law or regulation, (ii) the imposition of any material conditions on the issuance or renewal of any applicable permit after the Effective Date (notwithstanding the general requirements contained in any applicable permit at the time of application or issue to comply with future laws, ordinances, codes, rules, regulations or similar Attachment Staff Report Item 15C
Schedule I | 3
legislation) or (iii) a change in any utility rate schedule or tariff approved by any Governmental Authority.
“Charging Energy” means the PV Energy and/or grid energy, net of Station Use, delivered to the Storage Project as measured by the Meter in accordance with CAISO metering requirements and Prudent Operating Practice, as such meter readings are adjusted pursuant to CAISO requirements for any applicable Electrical Losses.
“City” has the meaning set forth in the Preamble.
“City Portfolio” means, collectively, all Projects contemplated under this Agreement. “City Portfolio Default” has the meaning set forth in Section 13.7. “City Project Default” has the meaning set forth in Section 13.5. “City WREGIS Account” has the meaning set forth in Section 9.2. “City-Requested Outage” has the meaning set forth in Section 7.8. “City Termination Payment” means the corresponding amount set forth in the schedule set forth in EXHIBIT VII.
“Claims” has the meaning set forth in Section 16.1.
“COD Delay Cure Period” means a period of up to forty five (45) days. “COD Delay Notice” has the meaning set forth in Section 4.6(c). “Commercial Operation” means that the Project is mechanically complete, capable of providing electricity to the Delivery Point at the capacity specified on the applicable Project Site Addendum, subject to the caveats set forth in this Agreement, and has permission to operate from the relevant Governmental Authority. The Project is fully operational, reliable, and interconnected, fully integrated and synchronized with the distribution system. “Commercial Operation Date” or “COD” means, for each Project, the date upon which Commercial Operation has been achieved, as indicated via written notice from Ava to the City in accordance with Section 4.6(d).
“Commercial Operation Deadline” means the deadline by which each Project must achieve COD, as set forth in the applicable PSA.
“Commissioning Test” has the meaning set forth in Section 4.6(d). “Compliance Action” has the meaning set forth in Section 17.2. “Compliance Expenditure Cap” has the meaning set forth in Section 17.2.
Attachment Staff Report Item 15C
Schedule I | 4
“Confidential Information” means, whether oral or written, which is delivered by the receiving Party or learning Party, including information that either the learning Party or the receiving Party stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. “Construction Start” has the meaning set forth in Section 4.4(a). “Construction Start Date” has the meaning set forth in Section 4.4(a). “Contract Capacity” means the sum of the Guaranteed Nameplate Capacity of each Generating Project and Storage Inverter Power of each Storage Project within the City Portfolio. “Contract Month” means any calendar month during the Term, commencing on the first calendar month to occur subsequent to the Commercial Operation Date of the first Project to achieve COD hereunder.
“Contract Price” means the Renewable Rate or the Storage Rate, or both, as the context may require.
“Contract Year” means any consecutive twelve (12)-month period during the Term, commencing on the Commercial Operation Date of the first Project to achieve COD and ending on the last day of such twelve (12)-month period.
“CPUC” means the California Public Utilities Commission or any successor agency performing similar statutory functions.
“Credit Downgrade Event” means (a) the long-term, senior, unsecured debt rating of Ava (i) falls below BBB- from S&P and (ii) Baa3 from Moody’s, or (b) Ava is no longer rated by either of S&P and Moody’s.
“Critical Milestones” means the Construction Start Date and the Commercial Operation Deadline. “Defaulting Party” means any Party with respect to which an Event of Default has occurred and is ongoing.
“Delay Damages” means, with respect to each Project, liquidated damages received from Developer due to failure to achieve the applicable development milestones set forth in the EPC Agreement, including, but not limited to, the Commercial Operation Deadline. “Delivery Equipment” means utility lines, cables, conduits, transformers, wires, meters, monitoring equipment, and other necessary appurtenances. “Delivery Period” has the meaning set forth in Section 3.1. “Delivery Point” means, with respect to each Project, the point where such Project is interconnected to City’s existing electrical system.
“Design Plan” has the meaning set forth in Section 4.3.
Attachment Staff Report Item 15C
Schedule I | 5
“Developer” means, [_____], a [_____], or any successor thereto, in each case, with whom Ava is contracting for the engineering, procurement, construction, and installation of the Projects. “Discharging Energy” means, with respect to a Storage Project, all Energy delivered to the applicable Delivery Point from the Storage Project, as measured by the Meter in accordance with CAISO metering requirements and Prudent Operating Practices, adjusted pursuant to CAISO requirements for any applicable Electrical Losses.
“Dispute” has the meaning set forth in Section 20.3.
“Early Termination Event” has the meaning set forth in Section 3.2(a). “Effective Date” has the meaning set forth in the Preamble. “Electrical Losses” means all transmission or transformation losses between the Project and the Delivery Point, including, as applicable, losses associated with (i) delivery of PV Energy to the Delivery Point, (ii) delivery of Charging Energy to the Storage Project, (iii) conversion of Charging Energy into Discharging Energy, and (iv) delivery of Discharging Energy to the Delivery Point.
“Energy” means electrical energy generated by the Generating Project. “Environmental Contamination” means the presence of a Hazardous Substance in a concentration exceeding legally allowable limits in violation of Applicable Law, including Environmental Law.
“Environmental Law” means any Applicable Law related to (a) the prevention, abatement or elimination of pollution, (b) the protection or preservation of the environment (including air, soil, land surface, subsurface strata, ground water, surface water, coastal water, and wetlands), wildlife (including endangered, threatened or protected species, migratory birds and bald or golden eagles), wildlife habitat, cultural resources, or natural resources, and (c) the use, generation, handling, treatment, storage, disposal, release, transportation or regulation of, or exposure to, Hazardous Substances.
“EOD Relocation Event” has the meaning set forth in Section 11.1. “EPC Agreement” means that certain [Engineering, Procurement, and Construction Agreement], dated as of [___], 2025 between Ava and Developer for the engineering, procurement, construction, and installation of the Projects.
“Error-Free” means the Project Equipment (i) is free from material defects in design, materials, and workmanship, (ii) substantially conforms to the specifications set forth in this Agreement, including the Design Plan, and (iii) functions as designed. “Estimated Construction Start Date” has the meaning set forth in the applicable PSA. “Event of Default” means an Ava Event of Default or a City Event of Default, as the context may require.
Attachment Staff Report Item 15C
Schedule I | 6
“Exclusive License” has the meaning set forth in Section 6.1(f). “Excused Storage Event” has the meaning set forth in Section 8.2(a). “Expected Annual Contract Quantity” has the meaning set forth in EXHIBIT I. “FERC” means the Federal Energy Regulatory Commission.
“Financing Party” has the meaning set forth in Section 18.2. “FM Delay Cure Period” has the meaning set forth in Section 4.6(b). “Force Majeure Delay” has the meaning set forth in Section 4.6(b). “Force Majeure Event” means any event or circumstance beyond the reasonable control of and without the fault or negligence of the affected Party, including, without limitation: tornado, hurricane, lightning, tsunami, flood, earthquake or other acts of God; fire; explosion; invasion, acts of terrorism, war (declared or undeclared) or other armed conflict; riot, revolution, insurrection or similar civil disturbance; global pandemic (except as excluded below); sabotage; strikes, walkouts, lock-outs, work stoppages or other labor disputes (in each case, not attributable to the actions of Ava); and action, inaction or restraint by a Governmental Authority, other than the City, that materially impairs the affected Party’s ability to perform its obligations under this Agreement, provided that the affected Party used and continues to use commercially reasonable efforts to timely request and diligently pursue the applicable action or inaction of such Governmental Authority, and understanding that any exercise of City Permitting Authority that prevents an affected Party from performing its obligations hereunder will be governed by Section 10.4.
Notwithstanding the foregoing, none of the foregoing shall constitute Force Majeure Events: (i) Ava’s ability to sell, or City’s ability to purchase the Product, or any portion thereof, at a more advantageous price than what is provided under this Agreement; (ii) inability to obtain any supply of goods or services, unless due to an independent Force Majeure Event; (iii) economic hardship, including lack of money; (iv) the increased costs of electricity, materials, equipment, steel, labor services or transportation; (v) delays in customs or similar regulatory clearance, unless due to an independent Force Majeure Event; or (vi) any equipment failure, unless due to an independent Force Majeure Event.
“Force Majeure Failure” has the meaning set forth in Section 10.2. “Forced Outage” means an unexpected failure of one or more components of the Project that prevents Ava from generating Energy or making Project Energy available at the Delivery Point and that is not the result of a Force Majeure Event.
“Forward Certificate Transfers” has the meaning set forth in the WREGIS Operating Rules. “Generating Project” has the meaning set forth in the Recitals. “Governmental Approval” means all authorizations, consents, approvals, waivers, exceptions, variances, filings, permits, orders, licenses, exemptions, notices to and declarations of or with any Governmental Authority and shall include those siting and operating permits and licenses, and any Attachment Staff Report Item 15C
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of the foregoing under any applicable Environmental Law, that are required for the development, use, and operation of any Project hereunder.
“Governmental Authority” means any foreign, federal, state, local or other governmental, regulatory or administrative agency, court, commission, department, board, or other governmental subdivision, legislature, rulemaking board, court, tribunal, arbitrating body or other governmental AHJ or effective control over a Party.
“Grid Services” has the meaning set forth in Section 9.4. “Guaranteed Energy Damages” means liquidated damages in an amount equal to the product of (a) the applicable Avoided Utility Cost, multiplied by (b) the Guaranteed Energy Shortfall. “Guaranteed Energy Damages Cap” has the meaning set forth in Section 8.1(b)(i). “Guaranteed Energy Production” has the meaning set forth in Section 8.1(a). “Guaranteed Energy Shortfall” means, with respect to each year in any Performance Measurement Period, the difference between (a) the product of (i) Expected Annual Contract Quantity, and (ii) 0.85; and (b) the Adjusted Energy Production; provided, if the foregoing formula results in a negative number, the Guaranteed Energy Shortfall shall be zero (0) kWh. “Guaranteed Nameplate Capacity” has the meaning set forth on the applicable PSA. “Guaranteed Storage Availability” has the meaning set forth in Section 8.2(a) “Guaranteed Storage Damages” has the meaning set forth in Section 8.2(b). “Hazardous Substance” means any chemical, waste or other substance (a) which now or hereafter becomes defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “pollution,” “pollutants,” “regulated substances,” or words of similar import under any laws pertaining to the environment, health, safety or welfare, (b) which is declared to be hazardous, toxic, or polluting by any Governmental Authority, (c) exposure to which is now or hereafter prohibited, limited or regulated by any Governmental Authority, (d) the storage, use, handling, disposal or release of which is restricted or regulated by any Governmental Authority, or (e) for which remediation or cleanup is required by any Governmental Authority. “Improvements” means any buildings and other improvements on the Project Site other than the Project or the Project Equipment.
“Incentives” means (i) a payment paid by a utility or state or local Governmental Authority based in whole or in part on the cost or size of the Project such as a rebate, (ii) a performance-based incentive paid as a stream of periodic payments by a utility, state or Governmental Authority based on the production of the Project, (iii) investment tax credits, production tax credits, and similar tax credits, grants or other tax benefits under federal, state or local law, and (iv) any other attributes, commodity, revenue stream or payment in connection with the Project (such as ancillary or Attachment Staff Report Item 15C
Schedule I | 8
capacity revenue), in each case of (i) through (iv) relating to the construction, ownership, use or production of energy from the Project, provided that Incentives shall not include RECs. “Indemnified Party” has the meaning set forth in Section 16.1. “Indemnifying Party” has the meaning set forth in Section 16.1. “Initial Term” has the meaning set forth in Section 3.1. “Insolation” has the meaning set forth in Section 7.4.
“Installed Capacity” means, with respect to any Project that has achieved COD, the maximum dependable operating capability of such Project to deliver Project Energy at the Meter, and adjusted for Electrical Losses to the Delivery Point (up to but not in excess of the Project Capacity). “Installed Capacity Certificate” means a certificate issued by a Licensed Professional Engineer confirming the Installed Capacity of the Project.
“Interconnection Agreement” means, with respect to each Project, the interconnection agreement entered into by and between Ava and the Local Electric Utility pursuant to which such Project will be interconnected with the Transmission System.
“Interest Rate” has the meaning set forth in Section 5.3. “Invoice Information” has the meaning set forth in Section 5.2. “Joint Powers Act” means the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.).
“Joint Powers Agreement” means that certain Joint Powers Agreement dated December 1, 2016, as amended from time to time, under which Ava is organized as a joint powers authority in accordance with the Joint Powers Act.
“kW” means kilowatt in alternating current, unless expressly stated in terms of direct current. “kWh” means kilowatt-hour in alternating current, unless expressly stated in terms of direct current.
“Lawful Permitting Denial Event” has the meaning set forth in Section 10.4. “Letter of Credit” means an irrevocable, standby letter of credit issued by a U.S. commercial bank or a foreign bank with a U.S. branch with such bank having a credit rating of at least A-without an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s, the form of which shall be mutually agreeable to the Parties. “License Term” has the meaning set forth in Section 6.1(a). “Licensed Professional Engineer” means an independent, professional engineer selected by Ava and reasonably acceptable to City, licensed in the State of California.
Attachment Staff Report Item 15C
Schedule I | 9
“Licensees” has the meaning set forth in Section 6.1(a). “Licenses” has the meaning set forth in Section 6.1(f). “Lien” has the meaning set forth in Section 6.3.
“Local Electric Utility” means Pacific Gas and Electric Company, an investor-owned utility headquartered in San Francisco, California.
“Lost Output” has the meaning set forth in Section 8.1(a). “Meter” has the meaning set forth in Section 12.1.
“Modified Design Plan” has the meaning set forth in Section 4.3. “Monthly Bill Credit” has the meaning set forth in Section 5.1(c), “Monthly Payment” has the meaning set forth in Section 5.1(a)(ii). “Monthly Storage Availability” has the meaning set forth in Section 8.2(a). “MSDS” has the meaning set forth in Section 7.11.
“NERC” means the North American Electric Reliability Corporation. “No-Fault Relocation Event” has the meaning set forth in Section 11.1. “Non-Appropriation Period” has the meaning set forth in Section 10.3. “Non-Appropriation Start Date” has the meaning set forth in Section 10.3. “Non-Defaulting Party” means, with respect to the occurrence of any Event of Default, the Party that is not the Defaulting Party in connection with such Event of Default. “Non-Exclusive License” has the meaning set forth in Section 6.1(a). “O&M Agreement” means, with respect to each Project, one or more commercially negotiated contract(s) for the operation and maintenance of the applicable Project, which shall be entered into by and between Ava and Operator.
“On-Site Services” has the meaning set forth in Section 7.10(a). “On-Site Contractor” has the meaning set forth in Section 7.10(a). “Operator” means the entity with which Ava enters into an O&M Agreement for the operation and maintenance of the Projects.
“Optimization Savings” has the meaning set forth in Section 9.3.
Attachment Staff Report Item 15C
Schedule I | 10
“Outage Allowance” has the meaning set forth in Section 7.8. “Parties” and “Party” have the meanings set forth in the Preamble. "Pass-Through Damages” has the meaning set forth in Section 5.6. “Performance Measurement Period” has the meaning set forth in Section 8.1(a). “Permitted Assignee” has the meaning set forth in Section 18.1(a). “Permitting Authority” has the meaning set forth in Section 10.4. “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.
“Planned Outage” has the meaning set forth in Section 7.7. “Portfolio Delivery Period” means the period starting on the first Commercial Operation Date to occur with respect to any Project hereunder and ending upon the expiration or early termination of all Project Terms hereunder.
“Product” means PV Energy, Storage Capacity, and RECs.
“Progress Report” has the meaning set forth in Section 4.2. “Project” means any individual Generating Project or Storage Project. “Project Annual Storage Availability” has the meaning set forth in Section 8.2(a). “Project Capacity” means, with respect to any co-located Projects on a particular Project Site, the sum of the Guaranteed Nameplate Capacity of the applicable Generating Project and Storage Inverter Power of the applicable Storage Project.
“Project Energy” means the sum of PV Energy and Discharging Energy during the monthly billing period contemplated under this Agreement, net of Electrical Losses and Station Use, as measured by the Meter, which Meter will be adjusted in accordance with CAISO meter requirements and Prudent Operating Practice to account for Electrical Losses and Station Use. “Project Equipment” means PV modules, PV inverters, PV racking, battery modules, battery inverters, charge controllers, electrical panels, electrical disconnects, electric meters, transformers, and any other supporting equipment, structures, and security features, each to the extent applicable for any given Project.
“Project Monthly Payment” has the meaning set forth in Section 5.1(a)(ii). “Project Roof” has the meaning set forth in Section 8.3(a).
Attachment Staff Report Item 15C
Schedule I | 11
“Project Site” means, with respect to a Project, the real property upon which such Project shall be installed, as described or depicted in the applicable PSA. “Project Site Addendum” or “PSA” has the meaning set forth in the Recitals. “Project Term” has the meaning set forth in Section 3.1. “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 solar industry during the relevant time period with respect to distributed generation generating projects with integrated storage in the Western United States or (b) any of the practices, methods, and acts that, 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 distributed generation generating projects with integrated storage in the Western United States. Prudent Operating Practice includes compliance with Applicable Laws, applicable reliability criteria, and the 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. “PV Energy” means that portion of Energy that is delivered directly to the Delivery Point from a Generating Project and is not Discharging Energy.
“PV Payment” has the meaning set forth in Section 5.1(a)(i). “REC” means a renewable energy credit or certificate under any state renewable portfolio, standard or federal renewable energy standard, voluntary renewable energy credit certified by a non-governmental organization, pollution allowance, carbon credit and any similar environmental allowance or credit and green tag or other reporting right under Section 1605(b) of The Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program, in each case relating to the construction, ownership, use or production of energy from the Project, provided that RECs shall not include Incentives.
“Relocation Request” has the meaning set forth in Section 11.1. “Removal Costs” has the meaning set forth in Section 11.3. “Removal Deadline” has the meaning set forth in Section 11.2. “Removal Services” has the meaning set forth in Section 11.2. “Renewable Rate” has the meaning set forth in the applicable PSA. “Renewal Term” has the meaning set forth in Section 3.1.
Attachment Staff Report Item 15C
Schedule I | 12
“Representatives” has the meaning set forth in Section 19.2(a). “Requested Confidential Information” has the meaning set forth in Section 19.2(b). “Resource Adequacy Benefits” means the rights and privileges attached to the Project that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in any CPUC decision and includes any local, zonal or otherwise locational attributes associated with the Project, in addition to flex attributes.
“Roof Damage Warranty” has the meaning set forth in Section 8.3(a). “Site Control” means that City: (A) is the fee simple owner of the Project Site; or (B) is the lessee of the Project Site pursuant to a lease which (i) has a term no shorter than the duration of the Initial Term, and (ii) authorizes City to act in all manners relating to the control and operation of the Project Site.
“Station Use” means: (i) the Energy produced or discharged by the Project that is used within the Project to power the lights, motors, control systems, and other electrical loads that are necessary for operation of the Project; and (ii) the Energy produced or discharged by the Project that is consumed within the Project’s electric energy distribution system as losses. “Storage Capacity” means the maximum dependable operating capability of the Storage Project to discharge electric energy that can be sustained for four consecutive hours (in kWh). “Storage Inverter Power” means the nameplate discharging power rating, in kWs, of a Storage Project, as specified in the applicable PSA.
“Storage Payment” has the meaning set forth in Section 5.1(a)(i). “Storage Project” has the meaning set forth in the Recitals. “Storage Rate” has the meaning set forth in the applicable PSA. “Subcontractors” has the meaning set forth in Section 2.1. “Tariff Termination” has the meaning set forth in Section 17.1. “Term” has the meaning set forth in Section 3.1.
“Termination Payment” means the Ava Termination Payment or City Termination Payment, or both, as the context may require.
“Tier 1” means, with respect to the Generating Project, any equipment offered by any Tier 1 Supplier and, with respect to a Storage Project, any battery storage system that (i) is offered by any Tier 1 Supplier, (ii) benefits from a manufacturer’s warranty (including an energy retention warranty), and (iii) includes all of the components, functionality, and other material features that affect performance and the user experience (i.e., data acquisition and operating controls) of a standard, high-quality storage project.
Attachment Staff Report Item 15C
Schedule I | 13
“Tier 1 Supplier” means a “Tier 1 Module Manufacturer” as listed from time to time by Bloomberg New Energy Finance’s PV Market Outlook, published on a quarterly basis, or if no longer published, a similar publication agreed upon by Ava and City in writing, and as agreed to by City.
“Total System Benefit” means the sum of all revenue and bill savings from Optimization Savings realized by the operation of the Project, net of any electricity expenses associated with the operation of the Project, as calculated by Ava. Total System Benefit does not include RECs or Incentives. A hypothetical calculation of Total System Benefit is as follows: (i) estimated cumulative Project Site utility expenses during the Term if the Project did not exist, less (ii) estimated cumulative Project Site utility expenses during the Term with the Project in operation, less (iii) cumulative Monthly Payments during the Term. “Transmission System” means the transmission Projects operated by the CAISO, now or hereafter in existence, which provide energy transmission service downstream from the Delivery Point.
“WECC” means the Western Electricity Coordinating Council. “WREGIS” means the Western Renewable Energy Generation Information System or any successor renewable energy tracking program.
“WREGIS Certificate” has the same meaning as “certificate” as defined in the WREGIS Operating Rules.
“WREGIS Operating Rules” means those operating rules and requirements adopted by WREGIS as of November 2024, as subsequently amended, supplemented or replaced (in whole or in part) from time to time.
Attachment Staff Report Item 15C
Exhibit I | 1
EXHIBIT I
EXPECTED ANNUAL CONTRACT QUANTITY AND AVOIDED UTILTY COST [To be attached]
Attachment Staff Report Item 15C
Exhibit II | 1
EXHIBIT II
FORM OF PROJECT SITE ADDENDUM
[To be attached]
Attachment Staff Report Item 15C
Exhibit III | 1
EXHIBIT III
CITY-SPECIFIC TERMS
[To be attached]
Attachment Staff Report Item 15C
Exhibit IV | 1
EXHIBIT IV
INSURANCE REQUIREMENTS
A. ENDORSEMENTS AND CONDITIONS APPLYING TO ALL PHASES
INSURANCE
Without limiting Ava’s indemnification of the City, Ava shall provide and maintain at its own expense, during the term of this Agreement, or phase of this Agreement if coverage is phase-specific, or as may be further required herein, the following insurance coverages and provisions:
1. REDUCTION OR LIMIT OF OBLIGATION: All insurance policies, including excess and umbrella insurance policies, shall include an endorsement and be primary and non-contributory and will not seek contribution from any other insurance (or self-insurance) available to the City. The primary and non-contributory endorsement shall be at least as broad as ISO Form 20 01 04 13. Pursuant to the provisions of this Agreement insurance effected or procured by Ava shall not reduce or limit Ava’s contractual obligation to indemnify and defend the Indemnified Parties.
2. EVIDENCE OF COVERAGE: Before commencing operations under this Agreement, Ava shall provide Certificate(s) of Insurance and applicable insurance endorsements, in form and satisfactory to City, evidencing that all required insurance coverage is in effect. The required certificate(s) and endorsements must be sent as set forth in the notices.
Ava shall not receive a notice to proceed with the work under this Agreement until it has obtained all insurance required and such insurance has been approved by the City. This approval of insurance shall neither relieve nor decrease the liability of Ava.
3. DURATION OF COVERAGE: All required insurance shall be maintained during the entire term of this Agreement or phase of this Agreement to which it applies. In addition, insurance policies and coverage(s) written on a claims-made basis:
• Shall be maintained during the entire term of this Agreement or phase of this Agreement to which it applies and until 5 years following the letter of termination of this Agreement/phase of this Agreement and acceptance of all work provided under this Agreement.
• The retroactive date must be before the execution date of the contract or the beginning of contract work.
• If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a retroactive date prior to the contract effective, or start of work date, Ava must purchase extended reporting period coverage for a minimum of five (5) years after completion of work.
4. ADDITIONAL INSURED: All insurance required herein with the exception of Personal Automobile Liability, Workers’ Compensation and Employers Liability, shall be endorsed to name as additional insured: City or, its elected officials, officers, agents, employees, Attachment Staff Report Item 15C
Exhibit IV | 2
volunteers, and representatives. The Additional Insured endorsement shall be at least as broad as ISO Form Number CG 20 38 04 13.
In all cases, the additional insured endorsement shall be at least as broad as ISO Form CG 20 38 04 13.
All private property owners granting “Rights of Entry” for construction of the work shall be covered as insureds under the same coverage as provided the City as respects their ownership of the property and the work to be done thereon.
5. INSURER FINANCIAL RATING: Insurance shall be maintained through an insurer with an A.M. Best Rating of no less than A: VII or equivalent shall be admitted to the State of California unless otherwise waived by Risk Management, and with deductible amounts acceptable to the City. Acceptance of Ava’s insurance by City shall not relieve or decrease the liability of Ava hereunder. Any deductible or self-insured retention amount or other similar obligation under the policies shall be the sole responsibility of Ava.
6. SUBCONTRACTORS: Ava shall include all subcontractors as an insured (covered party) under its policies or shall verify that the subcontractor, under its own policies and endorsements, has complied with the insurance requirements in this Agreement, including this Exhibit IV. Additional Insured endorsement shall be at least as broad as ISO Form Number CG 20 38 04 13.
7. JOINT VENTURES: If Ava is an association, partnership or other joint business venture, required insurance shall be provided by one of the following methods:
• Separate insurance policies issued for each individual entity, with each entity included as a “Named Insured” (covered party), or at minimum named as an “Additional Insured” on the other’s policies.
• Coverage shall be at least as broad as in the ISO forms named above. Joint insurance program with the association, partnership or other joint business venture included as a “Named Insured”.
8. NOTICE OF CANCELLATION:
All coverage as required herein shall not be canceled or changed so as to no longer meet the specified City insurance requirements without 30 days’ prior written notice of such cancellation or change being delivered to the City or their designated agent.
9. SELF-INSURANCE:
City acknowledges that some insurance requirements contained in this Agreement may be fulfilled by self-insurance on the part of Ava. However, this shall not in any way limit liabilities assumed by Ava under this Agreement. Any self-insurance shall be approved in writing by City upon satisfactory evidence of financial capacity. Ava’s obligation hereunder may be satisfied in whole or in part by adequately funded self-insurance programs or self-insurance retentions. City acknowledges that some insurance Attachment Staff Report Item 15C
Exhibit IV | 3
requirements contained in this Agreement may be fulfilled by a combination of primary and excess liability policies. However, this shall not in any way limit liabilities assumed by Ava under this Agreement.
B. DESIGN PHASE INSURANCE REQUIREMENTS
Insurance required during the design phase will include:
1. Commercial General Liability Insurance for bodily injury (including death) and property damage which provides limits as follows:
a. Each occurrence -$2,000,000
b. General aggregate -$2,000,000
c. Personal Injury -$2,000,000
2. General liability coverage shall include:
a. Project Site and Operations
b. Personal Injury liability
c. Severability of interest
3. Automobile Liability Insurance
For bodily injury (including death) and property damage which provides total limits of not less than one million dollars ($1,000,000) combined single limit per occurrence applicable to all owned, non owned and hired vehicles.
4. Workers’ Compensation and Employer’s Liability Insurance a. Statutory California Workers’ Compensation coverage including broad form all states coverage.
b. Employer’s Liability coverage for not less than one million dollars ($1,000,000) per occurrence.
5. Professional Errors and Omissions Liability Insurance a. Coverage shall be in an amount of not less than two million dollars ($2,000,000) per occurrence/aggregate.
b. If coverage contains a deductible or self-retention, it shall not be greater than two hundred fifty thousand dollars ($250,000) per occurrence/event. c. Coverage as required herein shall be maintained for a minimum of three years following termination or completion of this Agreement.
Attachment Staff Report Item 15C
Exhibit IV | 4
6. Claims Made Coverage
If coverage is written on a claims’ made basis, the Certificate of Insurance shall clearly state so. In addition to coverage requirements above, such policy shall provide that:
a. Policy retroactive date coincides with or precedes the consultant’s start of work (including subsequent policies purchased as renewals or replacements). b. Policy allows for reporting of circumstances or incidents that might give rise to future claims.
C. CONSTRUCTION PHASE INSURANCE REQUIREMENTS
The following limits shall apply:
1. Commercial General Liability Insurance for bodily injury (including death) and property damage which provides limits as follows:
a. Each occurrence -$2,000,000
b. General aggregate -$4,000,000
c. Products/Completed Operations aggregate ** - $4,000,000 d. Personal Injury -$2,000,000
A minimum of 50% of each of the aggregate limits must remain available at all times unless coverage is project specific.
2. General liability coverage shall include:
a. Project Site and Operations
b. **Products/Completed Operations with limits of four million dollars ($4,000,000) per aggregate to be maintained for three (3) years following acceptance of the work by City.
c. Contractual Liability expressly including liability assumed under this Agreement.
If Ava is working within fifty (50) feet of a railroad or light rail operation, any exclusion as to performance of operations within the vicinity of any railroad bridge, trestle, track, roadbed, tunnel, underpass or crossway shall be deleted, or a railroad protective policy provided.
d. Personal Injury liability
e. City’s and Ava’s protective liability
f. Severability of interest
Attachment Staff Report Item 15C
Exhibit IV | 5
g. Explosion, Collapse, and Underground Hazards (X, C and U) h. Broad Form Property Damage liability
3. General liability coverage shall include the following endorsements, copies of which shall be provided to City:
a. Contractual Liability Endorsement:
Insurance afforded by this policy shall apply to liability assumed by the insured under written contract with City.
b. X C & U (Explosion, Collapse and Underground) Endorsement:
Insurance afforded by this policy shall provide X, C and U Hazards coverage.
4. Automobile Liability Insurance
For bodily injury (including death) and property damage which provides total limits of not less than one million dollars ($1,000,000) combined single limit per occurrence applicable to all owned, non-owned and hired vehicles.
5. Workers’ Compensation and Employer’s Liability Insurance a. Statutory California Workers’ Compensation coverage including broad form all states coverage.
b. Employer’s Liability coverage for not less than one million dollars ($1,000,000) per occurrence.
6. Property Installation floater:
The property installation floater shall provide property damage coverage for any building, structure, machinery or equipment damaged, impaired, broken, or destroyed during the performance of the work, including during transit, installation and testing at the entity’s site. The coverage shall be in the amount of the value of the completed Project and materials.
D. OPERATIONS AND MAINTENANCE PHASE INSURANCE REQUIREMENTS Ava shall cause the delivery of certification of insurance requirements during the operations and maintenance phase no less than sixty (60) days prior to the estimated COD Deadline.
The following limits shall apply:
1. Commercial General Liability Insurance - for bodily injury (including death) and property damage which provides limits as follows:
Attachment Staff Report Item 15C
Exhibit IV | 6
a. Each occurrence -$2,000,000
b. General aggregate -$4,000,000
c. Personal Injury -$2,000,000
2. General liability coverage shall include:
• Project Site and Operations
• Personal Injury liability
• Severability of interest
3. Automobile Liability Insurance
For bodily injury (including death) and property damage which provides total limits of not less than one million dollars ($1,000,000) combined single limit per occurrence applicable to all owned, non-owned and hired vehicles.
4. Workers’ Compensation and Employer’s Liability Insurance • Statutory California Workers’ Compensation coverage including broad form all-states coverage. • Employer’s Liability coverage for not less than one million dollars ($1,000,000) per occurrence.
Attachment Staff Report Item 15C
Exhibit V | 1
EXHIBIT V5
NOTICES6
[City] Ava
All Notices:
Street:
City:
Attn:
Phone:
Email:
All Notices:
1999 Harrison Street, Suite 800
Oakland, CA 94612
Attn: Ava CMF
Phone: (833) 699-3223
Email: [email protected]
Reference Numbers:
Duns:
Federal Tax ID Number:
Reference Numbers:
Duns: 081103072
Federal Tax ID Number: 82-2262960
Invoices:
Attn:
Phone:
Email:
Invoices:
Attn: Ava CMF
Phone: (833) 699-3223
Email: [email protected]
With an additional copy to:
[email protected]
Payments:
Attn:
Phone:
Email:
Payments:
Attn: Ava CMF
Phone: (833) 699-3223
Email: [email protected]
With an additional copy to:
[email protected]
Wire Transfer:
BNK:
ABA:
ACCT:
Wire Transfer:
BNK: River City Bank
2485 Natomas Park Drive, Suite 100,
Sacramento, CA 95833
ABA: 121133416
5 Note to City: Please populate this Exhibit V and send to Ava as soon as possible to ensure it is included in the final execution version.
6 NTD: Please note that we plan to redact financial information prior to submitting this PPA to the public record.
Attachment Staff Report Item 15C
Exhibit V | 2
[City] Ava
Credit and Collections:
Attn:
Phone:
Email:
Credit and Collections:
Attn: Ava CMF
Phone: (833) 699-3223
Email: [email protected]
With an additional copy to:
[email protected]
Emergency Contact:
Attn:
Phone:
Email:
Emergency Contact:
Attn: Ava CMF
Phone: (833) 699-3223
Email: [email protected]
With Additional Notices of an Event of
Default to:
Attn:
Phone:
Email:
With Additional Notices of an Event of
Default to:
Attn: Ava CMF
Phone: (833) 699-3223
Email: [email protected]
With an additional copy to:
[email protected]
Attachment Staff Report Item 15C
Exhibit VI | 1
EXHIBIT VI
AVA TERMINATION PAYMENT SCHEDULE
[To be attached]
Attachment Staff Report Item 15C
Exhibit VII | 1
EXHIBIT VII
CITY TERMINATION PAYMENT SCHEDULE
[To be attached]
Attachment Staff Report Item 15C
Critical Municipal Facilities
Board Meeting
May 21, 2025
Attachment Staff Report Item 15D
Executive Summary • Ava is completing negotiations on an Engineering, Procurement, & Constuction Agreement ("EPCA") with
McMillan Electric to design, and construct solar and storage systems on up to 8 municipal sites and power purchase
agreements (“PPAs”) with 4 participating cities.
• Ava to own and operate the systems and intends to select McMillan Electric, an experienced design build electrical and renewables contractor as EPC Contractor.
• City project portfolios are designed to provide resiliency benefits to protect against grid outages, and deliver energy hedge and 0.5% energy bill savings over the project term. • Projects must achieve final electrical clearance and NEM2 qualification by PG&E’s April 15, 2026 cliff date.
• Ava to provide 0.5% savings floor to Cities while bearing up to $5.6M in financial risk on City’s behalf.
• Ava must execute EPC Agreement by end of May and City PPAs in July 31, 2025 for NEM2 attainment to be viable. • Board Authorization Requests:
1) EPC Agreement with McMillan Electric (negotiate & execute) 2) PPAs with Cities (negotiate & execute)
3) Allocate $8,000,000 in Local Development Funding for the Program
2 Cities •Berkeley •Fremont •Hayward •Livermore
Attachment Staff Report Item 15D
Shift to Ava Ownership & EPC Contractor RFP
3 • Ava previously intended to enter master PPA with a third party to construct, operate, and own the systems and backstop Ava’s obligations of City PPAs
• With NEM2.0 cliff date in Apr 2026 and policy uncertainty, Ava is advancing to develop and own smaller CMF portfolio by entering EPC Agreement with EPC Contractor • EPC Contractor to install systems and provides services, including:
▪ Project design
▪ Permitting
▪ Equipment procurement
• Ava intends to claim Direct Pay of the Investment Tax Credit ("ITC") under the Inflation Reduction Act to support project capitalization
• Ava will develop experience in project delivery, project ownership, asset management, and capturing ITC
▪ Project construction
▪ Testing, commissioning, and interconnection
Attachment Staff Report Item 15D
City PPA Overview
Ava to enter long-term power purchase agreements "PPAs" with each participating city in which Ava will own and operate the projects.
4 • City PPAs: Ava to enter into individual PPAs with each participating city ▪ Ava to sell energy generation and energy services (e.g. battery for backup energy and savings optimization) to Cities
▪ Ava to deliver construction, operation, and system maintenance (directly or indirectly via McMillan's obligations in the EPC Agreement)
▪ Cities currently confirming participation and seeking formal authorization to participate – approvals expected in June & July
• Benefits to Cities:
▪ Resilience through installation of battery at critical municipal facilities to maintain critical site operations during outages and Public Safety Power Shutoff events. Batteries sized to meet critical on-site demands. ▪ Energy hedge: Systems provide energy hedge to sites against rising PG&E costs ▪ Solar / renewables align with Cities’ renewable energy goals ▪ Procurement benefits: Multi-city initiative enables improved commercial terms for Cities relative to single-project development ▪ Trusted counterparty: Ava Board oversight ensures accountability Attachment Staff Report Item 15D
EPC Contractor RFP Overview
• Over past 2 months, Ava designed and ran an
accelerated RFP to select the EPC Contractor.
• Ava has engaged with TerraVerde (SF-based owner’s rep energy consultant specializing in municipal RFPs) to
manage the RFP and advise Ava.
• RFP Participation:
▪ RFQ: 10 responses
▪ Round 1 Pricing: 6 responses
▪ Round 2 Final Pricing : 3 finalists (post site walks) • Final round bids and interview were conducted during
the week of 4/30. Ava shared letter of intent to
McMillan, which was acknowledged on 5/9
5 Key Dates
Final Round
Invites Sent
4/18 (to 3
finalists)
Complete
Project site walks
hosted
4/21 – 4/22 Complete
Final bids due 4/30 Complete
Finalist
interviews
5/5 Complete
Expected award /
EPC Contractor
selection date
5/9 Complete
Ava BoD meeting 5/21 Current
EPC Agreement
Execution
EOM May Forthcoming
City PPA
Execution
June / July Forthcoming
Ava initiated a design-build contract RFQ / RFP process in March to select an EPC Contractor to construct the CMF portfolio as a public works project
Attachment Staff Report Item 15D
EPC RFP Evaluation Criteria
6 Ava has named the following evaluation criteria in its Request for Proposal.
Criteria Category Description
Experience and Knowledge • Experience and qualifications developing similar projects • Local presence and demonstration of knowledge of local environment and Financial Wherewithal • Company’s financial position w/r/t to ability to uphold warranties & guarantees Insurance and Bonding Capabilities • Ability to procure requirement construction insurance & meet bonding requirements Equipment and Warranties • Quality of proposed equipment & warranties • Focus on ability to mitigate tariff risk through equipment & procurement Cost, Value, and Savings Potential • Proposed project cost and ability to maximize savings to site hosts Project Management and Execution Capabilities • Focus on project schedule to meet key milestones by NEM2 cliff date • Demonstration of project management, coordination, value engineering, etc.
Client References • Reference checks conducted as part of Round 1 responses Labor Plan • Ability to meet PWA; relationships with union • Ability to comply with Ava’s Workforce and Environmental Justice criteria Ability to accept proposed commercial and legal
terms
• Review of comments on Ava’s draft EPCA
• Focus on ability to provide
Clarity, Completeness, Conformance, Suitability, &
Creativity of Proposal
• Addressed prompts comprehensively and conformed to the format • Demonstrated ability to meet the project objectives
Other capabilities • E.g. ability to provide O&M services and/or extended warranties Attachment Staff Report Item 15D
Selected EPC
Contractor:
McMillan Electric
• San Francisco-based design build electrical contractor with over 550 employees and 56 years of experience
• Union-based shop that solely works with IBEW for field workers, and is a signatory with IBEW 595 (Alameda County) and IBEW 6 (San Francisco) • Construction portfolio includes over 90 solar and/or storage projects in the PG&E territory
• Has notably served as EPC partner with Peninsula Clean Energy to develop and construct their portfolio of solar and storage projects • Other project-specific qualifications
▪ Offers long-term operations and maintenance capabilities, including performance guarantees
▪ Presented strong project plan for achieving NEM2.0, with ability to accept liquidated damages for
▪ Met bonding and insurance requirements
7 Attachment Staff Report Item 15D
Labor Commitments
8 Under the EPC Agreement, Contractor to agree to comply with prevailing wages and apprenticeship and prioritized use of union and local labor.
• Prevailing wages: Commitment to pay prevailing wages across all projects.
• Use of union labor: McMillan is a IBEW signatory contractor with relationships across the Bay Area, including IBEW 595 (Alameda County). McMillan to use union on-site workers to complete the projects
• Use of local labor: McMillan to use local labor (workers residing in Alameda or San Joaquin counties) for at least 50% of on-site hours to the extent it is possible to meet project milestone deadlines.
Attachment Staff Report Item 15D
Transaction Diagram
9 McMillan
EPC Contractor
Ava
System Owner & PPA
Seller
Participating
Cities
(multiple)
EPC Agreement City PPA
(Various)
Engineering, procurement,
& construction services
Energy delivery & services
energy services
System cost ($) Monthly payment ($)
Lunar
Prospective grid
services platform
MSA
Platform &
capacity
fees ($)
VPP-enabling
software
services
[Prospective grid services
agreement]
DER capacity commitment
Payment / incentive ($)
Structural Summary
1. EPC Contractor and Ava enter master EPC
Agreement. EPC designs & constructs projects;
Ava purchases and operates the projects.
2. Ava enters Power Purchase Agreements (“City
PPA”) with each participating City as final
offtaker.
3. Ava enters O&M Agreement with O&M Service
Provider to maintain the systems.
4. Ava maintains optionality to enter future grid
services arrangements with Cities.
Ava to own and operate the projects, while using third-parties to perform development, construction, and maintenance services.
McMillan
Transitional O&M
Agreement
O&M Agreement
Operations &
maintenance services
Monthly payment ($)
Attachment Staff Report Item 15D
PPA Pricing Provides Minimal Savings
10 Ava’s pricing construct ensures each City achieves resilience benefits and a minimum level of energy savings, factoring each City’s utility bill savings after PPA payments and Ava incentives.
City Savings Calculation
Estimated site utility costs during term without projects (-) Estimated site utility costs during term with projects = Estimated City utility bill savings
(+) Ava BESS incentives
(-) cumulative PPA payments for the projects
= Cumulative net energy bill savings to City
Site list and capacity figures to be finalized as part of EPC designs Total 25-year energy savings for 8 sites across 4 Cities:
~$91,000
Attachment Staff Report Item 15D
Ava Passing Through Incentives to Cities
11 Ava has existing CMF budget that can be applied towards Solar & Storage incentives, similar to upcoming Ava Resilience Hub incentives.
• All projects will receive an incentive of
$2/month/kWh of aggregate BESS nameplate
capacity for 5 years.
• If schedules are not met, NEM3.0 projects will
also receive an upfront incentive of $400/kWh to
account for lower bill savings.
• Incentive to be passed to Cities as a monthly bill
credit on City PPA invoices from Ava for a 5-year
credit term.
• Cumulative upfront and ongoing BESS incentives
of $161k for all projects “Ava BESS Incentive” represents total incentive to be paid on monthly basis over 5 years.
Specific amounts above subject to change based on final as-built BESS capacities for the projects.
Attachment Staff Report Item 15D
Ava Financial Risk / Return Profile
12 Ava is seeking approval of $8,000,000 of previously approved Local Development budget towards this program to for initial capital expenditures + potential downside risks, solar & storage incentives to cities, and operations & maintenance related services. Ava will recoup a portion of this funding back over the life of the PPA through the PPA revenues.
Ava Risk
Risk
Scale ($) Risk Mitigant
Missing NEM2.0 deadline $(1.4)M Contractor liquidated
damages
Tariffs on project
equipment5
$(1.5)M Limited int’l
procurement; expedite
City PPA execution or
pre-order equipment
Increased EPC CapEx $(0.6)M Pre-pricing site walks
Repeal of ITC / Direct Pay
provisions1
$(2.1)M Safe harbor through
procurement
$ Ava at-risk if all events
occur
$(5.6)M
Nominal CF to Ava if all
risks occur6
$(3.1)M
1Assumes 40% Direct Pay (30% base credit + 10% Energy Communities bonus credit) and $5.4M eligible ITC basis.
2 "Net CapEx after ITC Proceeds" means total upfront project costs, less Expected ITC Proceeds. 3 "Net Cash Flows to Ava" means the sum of expected 25-year City PPA revenue for the projects less the sum of 25-year estimates expenses related to operations & maintenance, project insurance, non-warranty equipment replacements, decommissioning, & other Ava operating overhead for the projects.
4 "Present Value of Net Cash Flows to Ava" assumes a 6% discount rate to the annual cash flows from Net Cash Flows to Ava, which assumes a return with slight premium to municipal cost of debt.
CapEx Scenarios
Maximum ITC
Proceeds1
Net CapEx after ITC
Proceeds2
Base: 40% ITC to Ava $2.1M $3.3M
Downside: No ITC to Ava $0M $5.4M
Cashflow Scenarios
Nominal Net Cash
Flows to Ava3
Present Value of Net
Cash Flows to Ava4 @
6% discount rate
Base: 40% ITC to Ava $2.5M $(0.3)M
No ITC to Ava $0.4M $(2.4)M
5Tariff subject to federal policy variability. Assumes 55.4% increase to current 27.7% tariff on equipment costs, which make up ~50% of CapEx. 6$(3.1)M = $2.5M nominal 25-year net CF to Ava less $5.6M Ava capital at-risk if all events occur Table above excludes potential liquidated damages Ava may recover under EPC Agreement negotiations.
Attachment Staff Report Item 15D
EPC Contractor, Equipment, Operations, & Warranties
• Engineering, Procurement, and Construction Contractor: TBD through RFP ▪ Required workmanship warranty: 2 years
▪ Roof warranty: Pending EPCA negotiation, but at least 1-year for installation damages for roofs with existing roof warranty.
• Major Equipment
▪ Minimum warranties to be finalized as part of EPCA negotiation. Ava’s expectation:
• Solar modules: Minimum 25 year warranty
• Battery energy storage systems: Minimum 10 year warranty • Inverters: Minimum 5 year warranty
▪ Major equipment selection to be finalized / determined ahead of procurement in June / July
• Operations & Maintenance:
▪ Ava reserving $3.7M for operating expenses, including maintenance, asset management, equipment replacement, insurance and decommissioning
▪ Ava evaluating O&M and performance guarantee offerings, Ava plans to enter transitionary 2-year O&M agreement with McMillan with option to extend as part of the EPC Agreement
13 Attachment Staff Report Item 15D
Next Steps & Timing
Key milestones:
Ava/City coordination is a key to success, PPA signing, permitting and site access will need to occur on schedule to ensure success
• End of month May: Execute EPC Agreement; commence final design • June: Ava provides LNTP and McMillan commences designs and Ava may authorize pre-ordering equipment to mitigate tariff risk
▪ Note that City PPA approvals follow Ava EPC signing and Ava will incur out of pocket expenses if cities do not end up approving the PPAs • June-July 2025: Execute City PPAs following remaining City Council approval • June - Dec 2025: Permitting and procurement, and construction commencement • Jan – Mar 2026: PV mechanical completion & final electrical clearance • April 15, 2026: PG&E’s NEM2 cliff date to achieve PV final electrical clearance • Mar – Sep 2026: Complete remaining BESS construction, testing, & commissioning; achieve commercial operation date if phasing is necessary
• 2027: Seek ITC (Direct Pay) reimbursement
14 **Note: Timelines are subject to finalized with final EPC Contractor selected under RFP Attachment Staff Report Item 15D
Recommendation
• Staff is recommending moving forward with building the 8-site Critical Municipal Facilities portfolio
• Policy landscape continues to be uncertain, with risk associated with the Investment Tax Incentive and Tariffs, in addition to a compressed schedule to build the sites • Total Capital Expenditures is relatively contained at $5-8MM while delivering valuable resilience for member cities and developing asset ownership competencies and experience for Ava • Staff is seeking authorization for:
o CEO to negotiate and execute Power Purchase Agreements with each of the Cities participating in the Program
o CEO to negotiate and execute Engineering, Procurement, & Construction Agreement with McMillan Electric
o Ava to use $8,000,000 from the previously approved Local Development budget for solar and storage incentives, construction capital, and operations & maintenance related services for Critical Municipal Facilities projects
15 Attachment Staff Report Item 15D
Appendix – Risk Registers
16 Attachment Staff Report Item 15D
RFP Advisor:
TerraVerde
• San Francisco-based owner’s representative energy consulting firm proudly supporting clients with the design and deployment of energy projects and programs
• Supported the successful implementation of over $500 million in solar and battery energy storage systems since 2009.
• Focus on supporting municipal agencies with reducing operational costs, supporting over 140 public entities on over 260 energy project assessments and procurements.
• California clients have included the Alameda County Water District, Contra Costa Water District, and the City of Lathrop, amongst many more.
• For Ava’s EPC Contractor RFP, TerraVerde has supported RFP structuring, advisory, and process management
17 Attachment Staff Report Item 15D
Other Third-Party Advisors
• Outside counsel: Ava representation and transaction
document drafting by Wilson Sonsini, a leading renewable energy and clean technology law firm.
• Energy modeling: Project site assessment verification services provided by EcoMotion, an experienced
consultancy with specialty in microgrid resiliency projects. • Independent Engineering: Technical and engineering
advisory by NV5, a leading consultancy in the environmental and energy space.
18 Program structure and project consultation has been supported by best-in-class advisory.
Attachment Staff Report Item 15D
Financial Risk Register (1 of 2)
Risk Sub-Risk or Description
Risk
Level Next Steps / Mitigation
Missing NEM 2.0
Deadline
• If Contractor misses NEM 2.0 cliff dates for project(s), loss of NEM2 export value would deteriorate savings potential for all sites. • Ava would need to materially reduce PPA prices to deliver cost neutrality to Cities
High
• Contractor has accepted substantive liquidated
damages for failure to achieve NEM2.0 timelines
Tariff Risk on
Equipment
• Recent volatility (and general increases) around tariffs to countries with strong PV and BESS export presence
• Risk of tariffs continuing to change between procurement order and equipment reaching port of entry High
• Contractor tariff exposure currently limited to BESS
with PV / inverter supply available domestic. Ava
pushing to expedite City approval to de-risk
potential supply chain deterioration.
• Negotiating termination for cause for material tariff increases in EPCA
Federal repeal of IRA
provisions around
ITC impacting Ava
• Non-zero chance of federal repeal of Inflation Reduction Act provisions that would enable Ava to claim up to 40% investment tax credit via Direct Pay on eligible project costs
High
• Ava pricing City PPAs to minimal savings, with ability to reduce PPA rates to increase savings if Direct Pay
credits can be claimed
Contractor change
orders on project
cost
• Project costs may change as Contractor finalizes technical review and completes 90-100% design Medium
• Ava requesting adherence to 60% designs
• Conducted site walks and requesting pricing
contingencies as part of RFP
City PPA Execution
Timeline
• Ava does not yet have clarity from each City on council approval and execution timelines
Medium
• Pushing cities for short timeline and clarity on
approval timelines
• Ava to share execution-ready City PPA before EOM
May
Risk Key:
• High = Portfolio at Risk;
• Medium = 3+ Day Delay;
• Low = Low probability &/or 1-2 Day Delay
**Note: Mitigation strategies are subject to further negotiation with EPC Contractor under EPC Agreement Attachment Staff Report Item 15D
Financial Risk Register (2 of 2)
Risk Sub-Risk or Description Risk Level Next Steps / Mitigation City Permitting Approval
Timeline
• Signing/permitting delays risk NEM 2.0 deadline & create an “out” for EPC to pay damages owed for NEM 2.0 delays
• Ava will proceed with design work under EPC Agreement prior to City PPA execution. Medium
• Cities have reviewed 60% designs for projects
• Ava will not proceed past design phase to procure
equipment until City PPAs are signed. Maximum
potential design phase spend capped at $0.6M
under EPC Agreement.
EPC Agreement
terminates or not
executed
• Ava must successfully execute EPC Agreement to proceed with the portfolio
• In event the EPC Agreement terminates after City PPAs are executed (e.g. due to EPC Contractor default), Ava would need to engage a replacement EPC to proceed with the
projects.
Medium
• Ava to sign EPC Agreement before City PPAs
• Ava has right to terminate City PPAs prior to
Construction Start if EPC Agreement terminates
• Ava to use commercially-reasonable efforts to
replace EPC after Construction Start; otherwise
agreement can be terminated under Ava default
Ava procurement of
O&M Contract
• In lieu of building internal O&M function, Ava will need to sign O&M services agreement to monitor system for billing, and uphold its operations & maintenance and performance guarantee obligations
Low
• McMillan offers O&M for PV and BESS, along with
associated performance guarantees, which Ava is
considering entering
Risk Key:
• High = Portfolio at Risk;
• Medium = 3+ Day Delay;
• Low = Low probability &/or 1-2 Day Delay
**Note: Mitigation strategies are subject to further negotiation with EPC Contractor under EPC Agreement Attachment Staff Report Item 15D
Ava Project Risk Register (1 of 2)
21 Issue Risk(s) Mitigation
Development Timing • Project construction and commissioning runs late, causing certain projects to miss NEM2.0 deadline and/or inconvenience at project sites
• EPC Contractor to owe substantive liquidated damages if projects do not achieve NEM2.0, which are passed through to Cities.
Equipment
Performance
• Poor solar or battery performance result in reduced
energy savings delivered to the site
• Solar performance guarantee and BESS availability guarantee to be backstopped by O&M Agreement. Ava to passthrough damages if it receives additional funds from O&M Provider.
Project Operation &
Maintenance
• Solar or BESS equipment failure or underperformance • Ava has modeled City PPA pricing to cash-flow positivity after expected O&M and equipment replacement costs
• Ava to lean on EPC Contractor workmanship and roof warranties during EPC Agreement warranty period
• Ava to enter O&M agreement following EPC Agreement execution to have reputable third-party responsibility for project monitoring and issue resolution Equipment Selection &
Procurement
• Equipment does not meet industry standards around
performance and/or warranty
• Sourcing practices conflict with federal/state/local
regulations
• Ava and its technical consultants vetting RFP McMillan's proposed equipment as part of RFP selection
• EPC Agreement to require Tier 1 PV and BESS equipment with minimum manufacturer’s warranties
• Ava to have explicit approval rights under the EPC Agreement on OEMs prior to placement of major procurement orders
Project / Portfolio
Termination Rights
• Project terminations or default by City impacts on EPC Agreement
• Project termination or default by EPC Contractor to leave Ava at risk to its City PPA obligations
• Ava to have ability to terminate for convenience in EPC Agreement, along with ability to terminate individual project(s)
• In City PPA, Ava to have right to terminate City PPA prior to construction start if EPC Agreement terminates.
Program has been designed to offer cost-neutral renewable-based energy resiliency for Cities. Ava directly provides services to Cities, while mitigating risk to Ava as owner. **Note: Mitigation strategies are subject to further negotiation with EPC Contractor under EPC Agreement Attachment Staff Report Item 15D
22 Issue Risk Mitigation
Insurable damage to
System
• Unforeseen installer liability during construction
• Disaster, wildfire, extreme weather, or other insurable event results in system loss during operation
• Ava requiring EPC Contractor to procure construction all-risk insurance during the design & construction phases
• Ava to procure operational all-risk insurance during City PPA operational term
• Force majeure language limits performance obligation
Project Removal • Cities left bearing the responsibility and expense of removing systems from their sites at end of term
• Ava bears obligation to pay for end-of-term project removals • In event Ava loses investment grade status, Ava to post cash or LC security at City’s benefit for use in system removals
Ava Project Risk Register (2 of 2)
Attachment Staff Report Item 15D