Consent Item 15
Consent Item 15
To: Ava Community Energy Authority
From: Courtney Wall, Power Resources Manager
Subject: Approving a Resolution Authorizing the Chief Executive Officer to Negotiate and Execute a Third Amendment to the Resource Adequacy Confirmation Letter with IP Aramis, LLC
Date: June 18, 2025
__________________________________________________________________ Summary/Recommendation
Adopt a Resolution of the Board of Directors (“Board”) of Ava Community Energy (“Ava”) Authorizing the Chief Executive Officer (“CEO”) to Negotiate and Execute a Third Amendment to the Resource Adequacy Confirmation Letter with IP Aramis, LLC (“Seller”) Financial Impact
Exact final costs are challenging to quantify, as the final pricing is indexed to the final import tariffs levied against the battery cells at the time of import.
Analysis and Context
Ava executed a Resource Adequacy Confirmation Letter with the Seller on November 20, 2020, in accordance with the Master Power Purchase and Sale Agreement between Seller and Ava dated November 20, 2020, as amended by the First Amendment to the Confirmation Letter, dated September 3, 2021, and as amended by the Second Amendment to the Confirmation Letter, dated March 10, 2025 (collectively, the Energy Storage Agreement, “ESA”).
The IP Aramis, LLC project is a 100-megawatt (“MW”) capacity solar and 100 MW battery energy storage system (“BESS”) located in Ava’s service territory in Alameda County. Ava is contracted for 25 MW of Resource Adequacy from the BESS with a 10-year delivery term Consent Item 15
(“Project”). The Project plans to become operational by January 1, 2027, and the developer is Intersect Power. The original Project was evaluated during Ava’s CA Renewable Energy Request for Proposals (“RFP”), launched in June 2018, and the ESA was approved for execution during Ava’s Board of Directors meeting on November 18, 2020.
The Project has encountered numerous challenges during development, which have been resolved through diligent efforts by the Seller. In addition to the challenges during development, construction is now impacted by the changes in import tariff rates, which affect BESS materials.
These unplanned and additional Project costs are straining the economics of the Project, and as a result, construction is not possible without amending the ESA. This could potentially result in Ava losing a Project within its service territory. To mitigate this risk, the Seller approached Ava in 2025 requesting a price adjustment. Ava and the Seller negotiated a price adjustment to reach a balance between maintaining Ava customers’ benefits from the Project relative to market pricing and providing increased revenue, allowing the Seller to move forward with construction of the Project. As a result of these negotiations, the Amendment adjusts the ESA’s price to raise or lower relative to the amount of the Seller’s additional import tariff costs exclusively for the battery cells that comprise the Project. Additionally, the Seller agrees to a cap on the price increase, a cost demonstration justifying the final levied import tariff costs, and the provision of a certification by an Independent Engineer validating the accuracy of the cost directly caused by import tariffs to the Project.
The amended ESA will remain competitive in today’s market and includes protections for Ava customers against future tariff risks. When constructed, the Project will benefit Ava customers with a localized reliability instrument located in Ava’s service territory.
Ava is asking the Board to Authorize the Chief Executive Officer (“CEO”) to continue these negotiations, and when complete, execute an Amendment that is beneficial to Ava customers.
Attachments (if applicable)
A. Resolution of the Board of Directors of Ava Community Energy Authorizing the Chief Executive Officer to Negotiate and Execute a Third Amendment to the Resource Adequacy Confirmation Letter with IP Aramis, LLC
Attachment Consent Item 15A
RESOLUTION NO. R-202x-XX
A RESOLUTION OF THE BOARD OF DIRECTORS
OF AVA COMMUNITY ENERGY AUTHORITY AUTHORIZING THE CHIEF
EXECUTIVE OFFICER TO NEGOTIATE AND EXECUTE A THIRD
AMENDMENT TO THE RESOURCE ADEQUACY CONFIRMATION LETTER
WITH IP ARAMIS, LLC
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 executed a Resource Adequacy Confirmation Letter with IP Aramis, LLC (“Seller”) on November 20, 2020, in accordance with the Master Power Purchase and Sale Agreement between Ava and the Seller and dated November 20, 2020, collectively the Energy Storage Agreement (“ESA”), as amended by the First Amendment to the Confirmation Letter, dated September 3, 2021, and as amended by the Second Amendment to the Confirmation Letter, dated March 10, 2025; and WHEREAS The ESA is for 25-Megawatts (“MW”) of Firm Resource Adequacy from a 100 MW Solar and Storage Project in North Livermore, California, with an expected Delivery Start Date of January 1, 2027; and
WHEREAS Ava has negotiated with the Seller to adjust the price to raise or lower with additional costs caused by changes to import tariffs.
NOW, THEREFORE, THE BOARD OF DIRECTORS OF AVA COMMUNITY ENERGY AUTHORITY DOES HEREBY RESOLVE AS FOLLOWS:
Section 1. The Chief Executive Officer, in consultation with staff and legal counsel, is hereby authorized to negotiate and execute a Third Amendment to the Resource Adequacy Confirmation Letter with IP Aramis, LLC.
Attachment Consent Item 15A
ADOPTED AND APPROVED this 18th day of June, 2025.
Jack Balch, Chair
ATTEST:
Adrian Bankhead, Clerk of the Board