CENTRAL COAST COMMUNITY ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
3 The Management’s Discussion and Analysis provides an overview of Central Coast Community Energy’s (3CE) financial activities as of and for the years ended September 30, 2023 and 2022. The information presented here should be considered in conjunction with the audited financial statements.
BACKGROUND
3CE’s formation was made possible in 2002 by the passage of California Assembly Bill 117, which enabled communities to purchase power on behalf of their residents and businesses as an alternative to legacy Investor-Owned Utilities (IOU).
3CE is a Community Choice Aggregator (CCA) established on February 21, 2017 pursuant to Public Utilities Code Section 366.2 and operating as a Joint Powers Authority (JPA) pursuant to Government Code section 6500 et seq. 3CE currently serves residential, commercial and agricultural/industrial customers in communities located within its service area. 1 3CE serves approximately 450,000 customer accounts. 3CE is committed to charging competitive retail generation rates, offering innovative energy programs to facilitate electrification, and reducing greenhouse gas (GHG) emissions through long-term contracts for existing and new utility-scale renewable electricity generation. 3CE has established an innovative procurement strategy to accelerate the reduction of GHG emissions, committing 3CE to developing a resource mix which delivers clean renewable energy for 60% of 3CE’s demand by the year 2025 and 100% of 3CE’s demand by the year 2030.
3CE is governed by a Policy Board and an Operations Board. The Policy Board consists of elected officials from member jurisdictions, while the Operations Board consists of senior staff from those jurisdictions. The Policy Board provides guidance and approval in strategic planning and goal setting, budgets, rates, large capital expenditures, and financing. The Operations Board provides guidance and approval on contracts, agreements, and policies that govern day-to-day operations. 3CE has the rights and powers to set rates for its services, incur debt, and issue bonds or other obligations. 1 As of September 30, 2023, 3CE’s members included the California Cities and Towns of Arroyo Grande, Atascadero, Buellton, Capitola, Carpinteria, Carmel-by-the-Sea, Del Rey Oaks, Goleta, Gonzales, Greenfield, Grover Beach, Guadalupe, Hollister, Marina, Monterey, Morro Bay, Pacific Grove, Paso Robles, Pismo Beach, Salinas, San Juan Bautista, San Luis Obispo, Sand City, Santa Cruz, Santa Maria, Scotts Valley, Seaside, Soledad, Solvang and Watsonville as well as the Counties of Monterey, San Benito, Santa Barbara, San Luis Obispo, and Santa Cruz. 3CE anticipates initiating service in the City of Atascadero and the County of San Luis Obispo in January 2025.
CENTRAL COAST COMMUNITY ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
4 Financial Reporting
3CE presents its financial statements as an enterprise fund under the economic resources measurement focus and accrual basis of accounting, in accordance with Generally Accepted Accounting Principles (GAAP) for proprietary funds, as prescribed by the Governmental Accounting Standards Board (GASB).
Contents Of This Report
This report is divided into the following sections:
Management’s discussion and analysis.
The Basic Financial Statements:
o The Statements of Net Position include all of 3CE’s assets, liabilities, and net position and provides information about the nature and amounts of resources and obligations at a specific point in time.
o The Statements of Revenues, Expenses, and Changes in Net Position report all of 3CE’s revenue and expenses for the years shown.
o The Statements of Cash Flows report the cash provided and used by operating activities, as well as other sources and uses, such as capital asset acquisitions and investing activities.
o The Notes to the Basic Financial Statements provide additional details and information related to the basic financial statements.
CENTRAL COAST COMMUNITY ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
5 FINANCIAL HIGHLIGHTS
The following table is a summary of 3CE’s assets, liabilities, and net position, and a discussion of significant changes for the years ended September 30:
2023 2022 2021
Current assets 324,238,888 $ 259,993,090 $ 229,102,332 $ Noncurrent assets
Capital and lease assets, net 2,008,218 219,319 328,942 Other noncurrent assets 1,543,979 1,731,180 79,280
Total noncurrent assets 3,552,197 1,950,499 408,222
Total assets 327,791,085 261,943,589 229,510,554
Current liabilities 54,996,528 45,601,781 32,490,845
Noncurrent liabilities 30,923,232 9,131,250 7,031,250
Total liabilities 85,919,760 54,733,031 39,522,095
Net position
Net investment in capital assets 520,678 219,319 328,942 Restricted for security collateral 294,000 294,000 294,000 Unrestricted 241,056,647 206,697,239 189,365,517
Total net position 241,871,325 $ 207,210,558 $ 189,988,459 $ Current Assets
Current assets were approximately $324,239,000 at the end of 2023 and consist of cash, accounts receivable, accrued revenue, investments, and deposits. Accrued revenue is revenue from energy delivered but not invoiced to customers at year-end. Accounts receivable represents energy delivered and invoiced but not paid for by customers. Total current assets increased each year as a result of 3CE’s operating surplus for each year.
CENTRAL COAST COMMUNITY ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
6 Noncurrent Assets
Capital assets are reported net of depreciation. Changes during the years include acquisition of furniture and equipment, leasehold improvements, and software, less depreciation and amortization. 3CE does not own assets used for electricity generation, transmission or distribution.
A lease asset is reported in accordance with Governmental Accounting Standards Board No. 87 (GASB 87). 3CE entered into a lease in October 2022 for its office space, which accounts for the increase in capital and lease assets.
Other noncurrent assets consist of the long-term portion ($1,521,000) of a $2,000,000 loan made in 2022 to the County of Santa Cruz regarding their acquisition of generator equipment.
Also included in other noncurrent assets are deposits for regulatory and other operating purposes.
Current Liabilities
Current liabilities of approximately $54,997,000 as of September 30, 2023 consist primarily of the cost of electricity delivered to customers that is due to be paid by 3CE after the fiscal year. Current liabilities also include amounts owed for trades payable, personnel costs, taxes and surcharges owed to other governments, and deposits received from suppliers.
Accrued cost of electricity increased each year compared to the prior year. This was a result of increased prices of electricity purchased as well as a small increase in the volume of purchased electricity outstanding. Additionally, current liabilities increased significantly in 2023 due to deposits received from energy suppliers.
Noncurrent Liabilities
The increase in noncurrent liabilities in 2023 is the result of several energy supply contracts entered into or negotiated during the year that required the suppliers to post collateral. These deposits are held by 3CE until certain contract milestones are met or contracts are completed. As part of its risk management policy, 3CE requires energy suppliers to post collateral deposits in some cases. Deposits are determined to be a noncurrent liability if they are not expected to be returned to the supplier within one year of the financial statement date.
CENTRAL COAST COMMUNITY ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
7 Summary of Revenues, Expenses, and Changes in Net Position The following table is a summary of 3CE’s results of operations and a discussion of significant changes for the years ended September 30:
2023 2022 2021
Operating revenues 451,619,272 $ 401,698,835 $ 287,931,441 $ Nonoperating revenues 9,635,091 3,800,219 702,036
Total income 461,254,363 405,499,054 288,633,477
Operating expenses 426,540,098 388,276,955 257,383,668
Nonoperating expenses 53,498 - -
Total expenses 426,593,596 388,276,955 257,383,668
Change in net position 34,660,767 $ 17,222,099 $ 31,249,809 $ Operating Revenues
Rate increases in effect during 2023 account for the majority of the increase in revenue compared to 2022.
Revenues from electricity sales increased from 2021 to 2022 by approximately $111,219,000 as a result of both 3CE’s customer base coming entirely online for the full year in 2022, and rate increases that went into effect during the year.
Nonoperating Revenues
The 2023 increase in nonoperating revenues is a result of increased investment returns related to an increase in market interest rates. The increase from 2021 to 2022 was primarily the result of grant income from the California Arrearage Payment Plan (CAPP) that was received in 2022.
Operating Expenses
3CE’s largest operating expense continues to be the purchase of electricity delivered to its customers. 3CE purchases energy products from markets and is developing a balanced and diversified renewable power portfolio. Operating expenses increased each year due to an increase in the number of customers and rising market prices.
CENTRAL COAST COMMUNITY ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
8 ECONOMIC OUTLOOK
The fiscal year ended September 30, 2023 was a year of stable operations and growing cost pressures from increased costs of energy and resource adequacy compliance. 3CE serves over 450,000 residential, commercial, and agricultural/industrial customer meters in a service area spanning five counties: Santa Cruz, Monterey, San Benito, San Luis Obispo, and Santa Barbara. 3CE serves approximately 94% of all eligible customers in the service area, and that rate of participation is expected to remain stable in 2024.
Operating revenues grew over $49,900,000, driven primarily by the rate adjustments to reflect the increased cost of energy. Operating expenses, comprised primarily of energy costs, increased by approximately $38,300,000 due to a combination of rising energy and resource adequacy (RA) costs, and delays in new power projects resulting from interconnection delays, supply chain, and inflationary pressures. Even with the rising energy and RA compliance costs, the net position grew by almost $34,700,000 over the prior year.
Over time, 3CE’s growing portfolio of renewable energy and storage is expected to lower the cost and volatility of the energy it supplies to customers, helping it maintain a robust financial position.
The portfolio continues to include Power Purchase Agreements (PPAs). Six projects supported by PPAs are online as of fiscal year 2022-23. 3CE’s non-energy administrative costs, including contract services, staffing, and general and administrative expenses, were 6% of revenue, reflecting 3CE’s focus on delivering value for customers.
3CE has implemented cost-based rates that ensure customers pay what it costs to serve them and keeps 3CE competitive with legacy Investor-Owned Utility (IOU) rates. Fiscal year 2022-23 was the second year with cost-based rates for the Pacific Gas and Electric (PG&E) service area. This approach led to significant average customer savings versus IOU rates and will continue to do so in 2024. These savings strengthen 3CE’s competitive position. 3CE will explore expanding the cost based rate approach to its Southern California Edison service area anticipated to start in 2025.
Investments from the Inflation Reduction Act, a renewed political focus on developing new renewable resources, and the significant compliance value in battery storage provide an opportunity for 3CE to continue providing new resources at cost competitive rates. 3CE will continue investing in renewable innovation and initiatives to reach 100% clean and renewable energy through the commitment to new, emerging, scalable technologies and programs.
Management intends to continue its conservative use of financial resources and continues to build credit capacity through increased cash reserves, complying with the energy risk management policy, and entering into favorable energy purchase commitments. As a result, 3CE’s financial position and foundation remain strong and positioned for continued success.
CENTRAL COAST COMMUNITY ENERGY
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
9 REQUEST FOR INFORMATION
This financial report is designed to provide 3CE’s customers and creditors with a general overview of the organization’s finances and to demonstrate 3CE’s accountability for the funds under its stewardship.
Please address any questions about this report or requests for additional financial information to 70 Garden Court, Suite 300, Monterey, CA 93940.
Respectfully submitted,
Robert Shaw, Chief Executive Officer
BASIC FINANCIAL STATEMENTS
CENTRAL COAST COMMUNITY ENERGY
The accompanying notes are an integral part of these financial statements. 10
STATEMENTS OF NET POSITION
SEPTEMBER 30, 2023 AND 2022
2023 2022
Current assets
Cash and cash equivalents - unrestricted 195,739,869 $ 150,096,869 $ Accounts receivable, net of allowance 32,759,275 47,107,600 Accrued revenue 24,865,108 18,161,946
Other receivables 4,273,462 2,003,955
Loan receivable 187,201 292,002
Prepaid expenses 380,211 308,419
Deposits 6,494,094 8,293,930
Cash - restricted 294,000 294,000
Investments 59,245,668 33,434,369
Total current assets 324,238,888 259,993,090
Noncurrent assets
Deposits 23,182 23,182
Loan receivable 1,520,797 1,707,998
Lease asset, net of amortization 1,426,467 -
Capital assets, net of depreciation and amortization 581,751 219,319 Total noncurrent assets 3,552,197 1,950,499
Total assets 327,791,085 261,943,589
Current liabilities
Accrued cost of electricity 48,922,476 40,074,582
Accounts payable 2,777,101 1,589,211
Other accrued liabilities 741,801 1,996,024
User taxes and energy surcharges due to other governments 1,753,727 1,941,964 Lease liability 300,423 -
Security deposits - energy suppliers 501,000 -
Total current liabilities 54,996,528 45,601,781
Noncurrent liabilities
Security deposits - energy suppliers 29,756,280 9,131,250 Lease liability 1,166,952 -
Total noncurrent liabilities 30,923,232 9,131,250
Total liabilities 85,919,760 54,733,031
Net investment in capital assets 520,678 219,319
Restricted for security collateral 294,000 294,000
Unrestricted 241,056,647 206,697,239
Total net position 241,871,325 $ 207,210,558 $
NET POSITION
ASSETS
LIABILITIES
CENTRAL COAST COMMUNITY ENERGY
The accompanying notes are an integral part of these financial statements. 11
STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
2023 2022
OPERATING REVENUES
Electricity sales, net 450,713,404 $ 399,149,960 $
Liquidated damages 750,000 2,548,875
Other income 155,868 -
Total operating revenues 451,619,272 401,698,835
OPERATING EXPENSES
Cost of electricity 398,746,769 366,610,134
Contract services 10,820,099 9,288,170
Staff compensation 6,200,592 6,089,226
Program incentives 8,484,775 4,374,729
Other operating expenses 1,869,295 1,826,016
Depreciation and amortization 418,568 88,680
Total operating expenses 426,540,098 388,276,955
Operating income 25,079,174 13,421,880
NONOPERATING REVENUES (EXPENSES)
Interest and investment returns 8,184,122 1,040,759
Grant revenue 1,450,969 2,759,460
Financing costs (53,498) -
Nonoperating revenues 9,581,593 3,800,219
CHANGE IN NET POSITION 17,222,099 34,660,767
Net position at beginning of year 207,210,558 189,988,459 Net position at end of year 241,871,325 $ 207,210,558 $
CENTRAL COAST COMMUNITY ENERGY
The accompanying notes are an integral part of these financial statements. 12
STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
2023 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 466,288,740 $ 398,416,283 $
Receipts of liquidated damages 897,000 2,401,875
Other operating receipts 155,868 -
Receipts of deposits and collateral 53,684,900 11,219,952 Payments to suppliers for electricity (392,088,215) (345,208,662) Payments of deposits and collateral (30,759,035) (17,376,728) Payments for other goods and services (12,022,290) (10,922,374) Payments for program incentives (7,797,967) (4,196,754) Payments of staff compensation (6,467,227) (6,178,169)
Payments of taxes and energy surcharges to other governments (8,274,859) (6,812,737) Net cash provided by operating activities 63,616,915 21,342,686
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Grant revenue 1,450,969 2,759,460
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Payments of lease liability (264,318) -
Payments to acquire capital assets (509,105) (1,113)
Net cash used by capital and related financing activities (773,423) (1,113)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 7,060,790 970,035
Proceeds from investment sales 111,223,174 -
Principal payments received on loan receivable 292,002 - Purchase of investments (137,227,427) (32,418,822)
Loan issued - (2,000,000)
Net cash used by investing activities (18,651,461) (33,448,787) Net change in cash and cash equivalents 45,643,000 (9,347,754) Cash and cash equivalents at beginning of year 150,390,869 159,738,623 Cash and cash equivalents at end of year $ 150,390,869 196,033,869 $ Reconciliation to the Statement of Net Position
Cash and cash equivalents - unrestricted 195,739,869 $ 150,096,869 $ Cash - restricted 294,000 294,000
Cash and cash equivalents 196,033,869 $ 150,390,869 $
SUPPLEMENTAL CASH FLOW INFORMATION
Capital asset acquisitions included in accounts payable and other liabilities 20,165 $ -
CENTRAL COAST COMMUNITY ENERGY
The accompanying notes are an integral part of these financial statements. 13
STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
2023 2022
Operating income 25,079,174 $ 13,421,880 $
Adjustments to reconcile operating income to net
cash provided by operating activities
Depreciation and amortization expense 418,568 88,680
(Increase) decrease in:
Accounts receivable, net of allowance 14,348,325 (9,731,301) Accrued revenue (6,703,164) 1,849,150
Energy settlements receivable - 7,856,108
Other receivables (1,913,221) (1,069,449)
Prepaid expenses (71,792) 1,251,830
Deposits 1,799,836 (6,575,149)
Increase (decrease) in:
Accrued cost of electricity 8,847,894 11,425,158
Accounts payable 1,167,725 357,493
Other accrued liabilities (294,223) (115,044)
User taxes and surcharges due to other governments (188,237) 483,330 Security deposits - energy suppliers 21,126,030 2,100,000 Net cash provided by operating activities 63,616,915 $ 21,342,686 $
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
14 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
Central Coast Community Energy (3CE) is a Joint Powers Authority created on February 21, 2017, and its jurisdictions consist of the following local governments as of September 30, 2023:
Counties Cities and Towns
Monterey Arroyo Grande Morro Bay
San Benito Atascadero Pacific Grove
Santa Barbara Buellton Paso Robles
Santa Cruz Capitola Pismo Beach
Carpinteria Salinas
Carmel-by-the-Sea San Juan Bautista
Del Rey Oaks San Luis Obispo
Goleta Sand City
Gonzales Santa Cruz
Greenfield Santa Maria
Grover Beach Scotts Valley
Guadalupe Seaside
Hollister Soledad
Marina Solvang
Monterey Watsonville
3CE is separate from and derives no financial support from its members. 3CE is governed by two Boards, a Policy Board and an Operations Board. Each Board is comprised of 17 members with 17 alternates representing the participating communities. Some of the 17 members represent more than one jurisdiction. Policy Board Members are elected officials from 3CE member communities.
Operations Board Members are executives leading the member cities and counties. 3CE was formed to acquire retail electricity for the residents and businesses within its members’ jurisdictions, study, promote, conduct, operate, and manage energy and energy-related climate change programs, and to exercise all other powers necessary and incidental to accomplishing these objectives. A core function of 3CE is to provide electric service that includes the use of renewable sources under the Community Choice Aggregation Program under California Public Utilities Code Section 366.2.
3CE began its energy delivery operations in March 2018. Electricity is acquired from commercial suppliers and delivered through existing physical infrastructure and equipment managed by Pacific Gas and Electric Company (PG&E) and Southern California Edison (SCE).
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
15 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
BASIS OF ACCOUNTING
3CE’s financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements. 3CE’s operations are accounted for as a governmental enterprise fund and are reported using the economic resources measurement focus and the accrual basis of accounting, similar to business enterprises. Accordingly, revenues are recognized when they are earned; and expenses are recognized at the time liabilities are incurred. Enterprise fund type operating statements present increases (revenues) and decreases (expenses) in total net position. Reported net position is segregated into three categories: investment in capital assets, restricted, and unrestricted.
When both restricted and unrestricted resources are available for use, it is 3CE’s policy to use restricted resources first, and then unrestricted resources as they are needed.
CASH AND CASH EQUIVALENTS
For purposes of the Statements of Cash Flows, 3CE defines cash and cash equivalents to include cash on hand, demand deposits and short-term investments with an original maturity of three months or less. 3CE has cash that is restricted under various security agreements. This is reported as restricted cash on the Statements of Net Position and is included in cash and cash equivalents for the purpose of the Statements of Cash Flows.
PREPAID EXPENSES AND DEPOSITS
Contracts to purchase energy may require 3CE to provide the supplier with advanced payments or security deposits. Deposits are generally held for the term of the contract and are classified as current or noncurrent assets depending on the length of time the deposits will be outstanding. Also included are prepaid expenses and deposits for regulatory and other operating purposes.
INVESTMENTS
Investments are stated at fair value based on prices listed on a national exchange for debt securities.
Certificates of deposits are stated at cost. 3CE intends to hold its securities to maturity. Investments with a maturity of less than one year are shown as current assets in the Statement of Net Position. 3CE’s Investment Policy permits the investment of funds in depository accounts, certificates of deposit and the Local Agency Investment Fund (LAIF) program operated by the California State Treasury, United States Treasury obligations, Federal Agency Securities, commercial paper, and money market funds.
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
16 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
LEASE ASSET AND LEASE LIABILITY
3CE recognizes an asset and liability when it enters into certain leasing arrangements. The leased asset is amortized over the term of the lease. The lease liability is the present value of payments expected to be paid to the lessor during the lease term. 3CE’s leased asset and liability relate to its office premises.
CAPITAL ASSETS AND DEPRECIATION
3CE’s policy is to capitalize furniture and equipment valued over $1,000 that is expected to be in service for over one year. Depreciation is computed according to the straight-line method over estimated useful lives of three years for electronic equipment and seven years for furniture and leasehold improvements. 3CE does not own any electric generation, transmission or distribution assets.
SECURITY DEPOSITS-ENERGY SUPPLIERS
Various energy contracts entered into by 3CE require the supplier to provide 3CE with a security deposit. These deposits are generally held for the term of the contract or until the completion of certain benchmarks. Deposits are classified as current or noncurrent depending on the length of time the deposits will be held.
NET POSITION
Net position is presented in the following components:
Net investment in capital assets: This component of net position consists of capital assets, lease asset, net of accumulated depreciation and amortization, and reduced by outstanding borrowings that are attributable to the acquisition, construction, or improvement of those assets.
Restricted for security collateral: This component of net position consists of constraints placed on net asset use through external constraints imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or constraints imposed by law through constitutional provisions or enabling legislation.
Unrestricted: This component of net position consists of net position that does not meet the definition of “net investment in capital assets” or “restricted for security collateral.”
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
17 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
OPERATING AND NONOPERATING REVENUES
Operating revenues include energy sales to retail and wholesale customers, and liquidated damages from suppliers that fail to meet delivery commitments.
Investment income includes interest earned on bank deposits as well as unrealized gains and losses on its investment holdings. Interest and investment income are considered nonoperating revenues.
REVENUE RECOGNITION
3CE recognizes revenue on the accrual basis. This includes invoices issued to customers during the reporting period and electricity estimated to have been delivered, but not yet billed at year-end.
Management estimates that a portion of the billed amounts will be uncollectible. Accordingly, an allowance for uncollectible accounts has been recorded.
OPERATING AND NONOPERATING EXPENSES
Operating expenses include the costs of electricity, staffing, contractor services, program incentives, and other operating expenses. Expenses not meeting this definition are reported as nonoperating expenses.
ELECTRICAL POWER PURCHASED
During the normal course of business, 3CE purchases electrical power from numerous suppliers.
Electricity costs include the cost of energy and capacity arising from contracts with energy suppliers as well as generation credits, and load and other charges arising from 3CE’s participation in the California Independent System Operator’s (CAISO) centralized market. The cost of electricity and capacity is recognized as “Cost of Electricity” in the Statements of Revenues, Expenses and Changes in Net Position.
To comply with the State of California’s Renewable Portfolio Standards (RPS), 3CE acquires RPS eligible renewable energy evidenced by Renewable Energy Certificates (Certificates) recognized by the Western Renewable Energy Generation Information System. 3CE obtains Certificates with the intent to retire them and does not sell or build surpluses of Certificates with a profit motive. An expense is recognized at the point that the cost of the Certificate is due and payable to the supplier. 3CE purchases capacity commitments from qualifying generators to comply with the California Public Utility Commission’s Resource Adequacy Program. The goals of the Resource Adequacy Program are to provide sufficient resources to the CAISO to ensure the safe and reliable operation of the grid in real-time and to provide appropriate incentives for the siting and construction of new resources needed for reliability in the future.
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
18 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
STAFFING COSTS
3CE pays employees bi-weekly and fully pays its obligation for health benefits and contributions to its defined contribution retirement plan each month. 3CE is not obligated to provide post-employment healthcare or other fringe benefits, and accordingly, no related liability is recorded in these financial statements. 3CE provides compensated time off, and the related liability is recorded in these financial statements.
INCOME TAXES
3CE is a Joint Powers Authority under the provision of the California Government Code and is not subject to federal or state income or franchise taxes.
ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
RECLASSIFICATIONS
Certain amounts in the prior-year financial statements have been reclassified for comparative purposes to conform to the presentation of the current-year financial statements. These reclassifications did not result in any change in previously reported net position or change in net position.
2. CASH AND CASH EQUIVALENTS
3CE maintains its cash in both interest-bearing and non-interest-bearing deposit accounts in several banks. 3CE’s deposits are subject to California Government Code Section 16521, which requires banks to collateralize public funds in excess of the Federal Deposit Insurance Corporation (FDIC) limit of $250,000 by 110%. Certain short-term investments with original maturities of less than three months are classified as cash and cash equivalents, which are not subject to the collateral requirement or FDIC coverage previously mentioned. Accordingly, the amount of risk is not disclosed. 3CE monitors its risk exposure on an ongoing basis.
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
19 3. RECEIVABLES AND DEPOSITS
ACCOUNTS RECEIVABLE
Accounts receivable were as follows as of September 30:
2023 2022
Accounts receivable from customers 43,313,058 $ 55,979,470 $ Allowance for uncollectible accounts (10,553,783) (8,871,870) Net accounts receivable 32,759,275 $ 47,107,600 $
The majority of account collections occur within the first few months following customer invoicing. 3CE estimates that a portion of the billed accounts will not be collected. 3CE continues collection efforts on accounts in excess of de minimis balances regardless of the age of the account. Although collection success generally decreases with the age of the receivable, 3CE continues to have success in collecting older accounts. The allowance for uncollectible accounts at the end of a period includes amounts billed during the current and prior fiscal years. During 2023 and 2022, 3CE recorded $6,864,000 and $6,192,000, respectively, as an increase to the allowance in anticipation of uncollectible accounts. Bad debt expense is reported as a reduction in electricity sales on the Statement of Revenues, Expenses and Changes in Net Position. Other changes in the allowance for uncollectible accounts from year to year are the result of account write-offs. In 2023 and 2022, 3CE received CAPP funds (see Note 6) that helped recover for previously written off accounts receivable.
OTHER RECEIVABLES
Other receivables consists primarily of amounts due from energy suppliers, generally as a result of certain wholesale transactions for energy products.
DEPOSITS
Combined current and noncurrent deposits were approximately $6,517,000 and $8,317,000 as of September 30, 2023 and 2022, respectively. The majority of current deposits relate to collateral posted with the CAISO, which is determined based on 3CE’s market exposure at a given time. Also included in current assets are funds provided to an energy program implementer to issue customer incentive payments.
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
20 4. INVESTMENTS
During the years ended September 30, 2023 and 2022, 3CE purchased investments with original maturities of three months or more. As of September 30, investments were as follows:
2023 2022
Investments at Fair Value:
Commercial paper 3,700,088 $ 2,435,226 $
U.S. government & agency obligations 45,545,580 14,584,200 Municipal obligations - 3,863,262
Total investments at fair value 49,245,668 20,882,688
Certificate of deposits 10,000,000 12,551,681
Total investments 59,245,668 $ 33,434,369 $
FAIR VALUE MEASUREMENT
GASB Statement No. 72, Fair Value Measurement and Application, sets forth the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are significant other observable inputs, and Level 3 inputs are significant unobservable inputs.
In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. 3CE’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.
As of September 30, 2023 and 2022, 3CE’s investments are considered Level 1 inputs, except for certificates of deposits, which are based on the nominal value. Quoted prices in active markets were used for determining fair value measurement.
CREDIT RISK
Credit risk is the risk an issuer or other counterparty to an investment will not fulfill its obligations.
Certain investments, such as obligations of the U.S. government or obligations explicitly guaranteed by the U.S. government, are not considered to have credit risk. Credit risk for other investments is not available.
3CE’s investment policy addresses this risk. 3CE limits investments to those allowed by Section 53601 of the California Government Code that addresses the risk allowable for each investment.
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
21 4. INVESTMENTS (continued)
CUSTODIAL CREDIT RISK – CERTIFICATE OF DEPOSITS
Custodial credit risk is the risk that in the event of a financial institution failure, 3CE’s deposits may not be returned to 3CE. 3CE’s deposits are subject to California Government Code Section 16521, which requires banks to collateralize public funds in excess of the Federal Deposit Insurance Corporation (FDIC) limit of $250,000 by 110%.
As of September 30, 2023 and 2022, none of 3CE’s bank balances are known to be individually exposed to custodial credit risk.
CUSTODIAL CREDIT RISK - INVESTMENTS
Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, 3CE would not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. All of 3CE’s investments are exposed to custodial credit risk.
INTEREST RATE RISK
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Duration is a measure of the price sensitivity of a fixed income portfolio to changes in interest rates. It is calculated as the weighted average time to receive a bond’s coupon and principal payments. The longer the duration of a portfolio, the greater its price sensitivity to changes in interest rates. 3CE manages its exposure to declines in fair values by limiting the weighted average maturity of its investments.
All investments had a maturity of less than one year as of September 30, 2023 and 2022. 3CE intends to hold investments to maturity.
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
22 5. CAPITAL ASSETS AND LEASE ASSET
Capital asset activity for the years ended September 30, 2023 and 2022 was as follows:
Furniture &
Equipment
Leasehold
Improvements Software
Accumulated
Depreciation
and
Amortization Total
Balances at September 30, 2021 598,432 $ 80,743 $ - $ (350,233) $ 328,942 $ Additions 1,113 - - (88,680) (87,567)
Dispositions - (22,056) - - (22,056)
Balances at September 30, 2022 599,545 58,687 - (438,913) 219,319 Additions 97,171 31,974 400,126 (166,838) 362,432
Balances at September 30, 2023 696,716 $ 90,661 $ 400,126 $ (605,751) $ 581,751 $ Lease asset activity for the years ended September 30, 2023 and 2022 was as follows:
Lease Asset
Accumulated
Amortization Total
Balances at September 30, 2021 - $ - $ - $
Additions - - -
Dispositions - - -
Balances at September 30, 2022 - - -
Additions 1,678,197 (251,730) 1,426,467
Dispositions - - -
Balances at September 30, 2023 1,678,197 $ (251,730) $ 1,426,467 $
6. GRANT REVENUE
3CE administers a grant from the California Arrearage Payment Program (CAPP) that offers financial assistance for California energy utility customers to help reduce past due energy account balances that increased during the COVID-19 pandemic. In 2022 this program was funded through the federal American Rescue Plan Act (ARPA) with Coronavirus State and Local Fiscal Recovery Funds. The program was funded by the State of California in 2023. Grant revenue recognized for the years ended September 30, 2023 and 2022 was $1,451,000 and $2,759,000, respectively.
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
23 7. DEFINED CONTRIBUTION RETIREMENT PLAN
3CE provides retirement benefits to eligible employees through a 401(a) Retirement Plan (Plan). The Plan is a defined contribution (Internal Revenue Code 401(a)) retirement plan established to provide benefits at retirement to employees of certain qualified employers admitted by the Plan. The Plan is administered by the Public Agency Retirement System (PARS). As of September 30, 2022, there were 34 plan participants. 3CE is required to contribute 10% of covered payroll as a match to required employee contributions. 3CE contributed approximately $502,000 and $462,000 for the years ended September 30, 2023 and 2022, respectively. Plan provisions and contribution requirements as they apply to 3CE are established and may be amended by the Board of Directors. 3CE elected out of the Social Security system for employees eligible for the Plan. 3CE also provides a 457(b) Retirement Plan where employees can make tax deferred contributions.
8. RISK MANAGEMENT
3CE is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; and errors and omissions. During the year, 3CE purchased insurance policies from investment-grade commercial carriers to mitigate risks that include those associated with earthquakes, theft, general liability, errors and omissions, and property damage. 3CE has general liability coverage of $1,000,000, with a deductible of $1,000.
3CE maintains risk management policies, procedures and systems that help mitigate credit, liquidity, market, operating, regulatory and other risks that arise from participation in the California energy market.
Credit guidelines include a preference for transacting with investment-grade counterparties, evaluating counterparties’ financial condition and assigning credit limits as applicable. These credit limits are established based on risk and return considerations under terms customarily available in the industry. In addition, 3CE enters into netting arrangements whenever possible and, where appropriate, obtains collateral and other performance assurances from counterparties.
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
24 9. PURCHASE COMMITMENTS
POWER AND ELECTRIC CAPACITY
In the ordinary course of business, 3CE enters into power purchase agreements to acquire energy and electric capacity. The price and volume of purchased power is largely fixed. Variable priced power, which is a small part of 3CE’s portfolio, is generally linked to the market price of either natural gas or power at the date of delivery. Variable volume is generally associated with contracts to purchase energy from resources with varying availability and production, such as solar, wind and hydroelectric facilities.
3CE enters into long-term power purchase agreements to ensure stable competitive rates for its customers and to comply with state law and voluntary targets for renewable and greenhouse gas (GHG) free products.
The following table represents the expected, undiscounted, contractual obligations outstanding as of September 30, 2023:
Year ending September 30,
2024 496,000,000 $
2025 344,000,000
2026 196,000,000
2027 191,000,000
2028 186,000,000
2029-2053 2,755,000,000
Total 4,168,000,000 $
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
25 10. LEASES
A lease asset is reported in accordance with Governmental Accounting Standards Board No. 87 (GASB 87). According to GASB, the Statement aims to increase the usefulness of governments’ financial statements by requiring reporting of certain lease assets and liabilities that previously were not recognized on the statement of net position.
On October 27, 2022, 3CE entered into a 3-year non-cancelable lease commencing on January 1, 2023 for its office premises. The rental agreement includes an option to renew the lease for two additional one-year terms.
Rental payments under this lease were $330,000 for the year ended September 30, 2023.
As of September 30, 2023, future minimum lease payments under this lease were as follows:
Year ending September 30, Principal Interest Total
2024 300,423 $ 59,931 $ 360,354 $
2025 325,259 45,905 371,164
2026 351,568 30,731 382,299
2027 379,426 14,342 393,768
2028 110,699 878 111,577
Total 1,467,375 $ 151,787 $ 1,619,162 $
26 CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
11. JOINT VENTURE
3CE participates in a joint powers agreement (JPA) through the California Community Choice Financing Authority (CCCFA). CCCFA was formed as a conduit issuer to assist its members by undertaking the financing or refinancing of energy prepayments that can be financed with tax advantaged bonds on behalf of one or more of the members by, among other things, issuing or incurring bonds and entering into related contracts with its members. Any debt or liability incurred by CCCFA on behalf of a member to prepay for renewable energy is not a debt or liability of that member. Furthermore, the assets of CCCFA in the form of prepaid energy or reserves held by the respective bond trustees for any prepayment transaction undertaken on behalf of a member does not constitute an asset or reserve of that member.
In December 2023, CCCFA issued bonds in the amount of $647,750,000, excluding original issue premium, the proceeds of which to be used to finance energy purchases that will be delivered to 3CE.
No debt, liability, or obligation of CCCFA is a debt, liability, or obligation of 3CE. 3CE will purchase energy from CCCFA in the same manner as it purchases energy from other suppliers. 3CE did not purchase any energy from CCCFA during fiscal year 2023. The outstanding purchase commitments related to these financing facilities are included in Note 9.
Each member of CCCFA is responsible for paying an equal portion of CCCFA’s general and administrative operating costs as determined by its board. During the years ended September 30 2023, and 2022, 3CE contributed approximately $18,000 and $28,000, respectively, to CCCFA to assist in its operating activities.
The financial statements of CCCFA are available online at http://www.cccfa.org/key-documents.html.
12. FUTURE GASB PRONOUNCEMENTS
The requirements of the following GASB Statements are effective for years ending after September 30, 2023:
GASB has approved GASB Statement No. 100, Accounting Changes and Error Corrections – An Amendment of GASB Statement No. 62, and GASB Statement No. 101, Compensated Absences. Management is evaluating the effect of implementation of these statements.
1 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
Central Coast Community Energy
Management is responsible for the accompanying special purpose statements of Central Coast Community Energy (a California Joint Powers Authority) which comprise the budgetary comparison schedule and a supplemental budgetary comparison schedule for the period ended September 30, 2023, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.
The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of the Authority.
Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.
Central Coast Community Energy’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.
We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.
Maher Accountancy
San Rafael, CA
November 13, 2023
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com
2022/23 YTD
Budget (Amended)
2022/23 YTD
Actual
2022/23 YTD
Budget Variance
(Under) Over
2022/23 YTD
Actual / Budget %
2022/23 Annual
Budget (Amended)
2022/23 Budget
Less Actual
2022/23 Budget
Remaining /
Budget %
REVENUES AND OTHER SOURCES
Electricity sales 463,110,000 $ 459,028,029 $ (4,081,971) $ 99% 463,110,000 $ 4,081,971 $ 1% Uncollectible accounts (7,500,000) (6,863,656) 636,344 92% (7,500,000) (636,344) 8% Net revenue - electricity 455,610,000 452,164,373 (3,445,627) 99% 455,610,000 3,445,627 1% Investment and miscellaneous income 6,187,000 8,339,990 2,152,990 n/a 6,187,000 (2,152,990) n/a Total revenues and other sources 461,797,000 461,254,363 (542,637) 100% 461,797,000 542,637 0% EXPENDITURES AND OTHER USESCurrent Expenditures
Cost of energy 398,884,224 403,427,000 (4,542,776) 99% 403,427,000 4,542,776 1% Energy programs (incentives and grants) 15,920,000 9,266,438 (6,653,562) 58% 15,920,000 6,653,562 42% Data manager 2,967,678 2,975,000 (7,322) 100% 2,975,000 7,322 0% Utility service fees 1,808,000 1,831,586 23,586 101% 1,808,000 (23,586) -1% Staffing 9,191,000 6,200,593 (2,990,407) 67% 9,191,000 2,990,407 33% Professional services 3,317,000 2,151,323 (1,165,677) 65% 3,317,000 1,165,677 35% Legal services 1,860,000 1,223,252 (636,748) 66% 1,860,000 636,748 34% Marketing and customer enrollment 717,428 951,000 (233,572) 75% 951,000 233,572 25% Other general & administration 3,599,000 2,133,615 (1,465,385) 59% 3,599,000 1,465,385 41% Total current expenditures 443,048,000 425,376,137 (17,671,863) 96% 443,048,000 17,671,863 4% Other Uses
Capital outlay 203,000 129,142 (73,858) n/a 203,000 73,858 n/a Total other uses 203,000 129,142 (73,858) n/a 203,000 73,858 Total expenditures and other uses 443,251,000 425,505,279 (17,745,721) 96% 443,251,000 17,745,721 4% Surplus (Deficit) 18,546,000 $ 35,749,084 $ 17,203,084 $ 18,546,000 $ (17,203,084) $ -93% Reserves at end of reporting period: Held for working capital 50,200,000 $ Held for reserves - cash and cash equivalents 140,839,869 Held for reserves - investments 59,245,668 Total 250,285,537 $
CENTRAL COAST COMMUNITY ENERGY
SUPPLEMENTAL BUDGETARY COMPARISON SCHEDULE
Year Ended September 30, 2023
CCA Program Surplus/(Deficit)
per budgetary comparison schedule: 35,749,084 $
Adjustments needed to reconcile to the
changes in net position in the
Statement of Revenues, Expenses
and Changes in Net Position:
Add back GASB 87 lease amortization not in operating budget 210,822 Subtract depreciation expense (418,568)
Add back capital asset acquisitions 529,270
Change in Net Position 36,070,608 $
REVENUES, EXPENSES AND CHANGES IN NET POSITION
CENTRAL COAST COMMUNITY ENERGY
BUDGET RECONCILIATION TO STATEMENT OF
Year Ended September 30, 2023
Budget Item YTD Variance Comment
Electric Sales Revenue (0.9%) Sales revenue includes revenues actually billed to customers as well as estimated customer usage during the reporting period that is not yet billed.
Cost of Energy (1.1%) Variances in this category are typically due to (1) timing difference between projected and actual REC deliveries, (2) variance from actual to anticipated market prices, and (3) variance from actual to expected volume used by customers. Cost of energy includes scheduling coordinator fees for budget purposes only.
Staffing (32.5%) Staffing expenses are under budget due to the timing of new hires.
Professional Services (35.1%) This category includes accounting, IT, technical and other consultants.
Legal Costs (34.2%) This category includes outside legal costs for regulatory and energy procurement needs.
Marketing and customer enrollment (24.6%) Variance is mostly due to the lower than anticipated costs of recent customer enrollments.
Data Management Services (0.2%) These fees non-discretionary and are charged on a per customer basis.
Utility Service Fees 1.3% These are PG&E and SCE fees charged on a per customer basis.
Other General & Administrative (40.7%) This category includes occupancy costs, industry membership dues, and other general and administrative costs.
Energy and Related Programs (41.8%) Programs expenses have generally been delayed until future periods Budget Commentary for significant items
CENTRAL COAST COMMUNITY ENERGY
October 1, 2022 through September 30, 2023
-$17.5
-$3.0
Act
Bud
$53.3
$52.2
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Actual
$452.2 Budget
$455.6
$0.0
$100.0
$200.0
$300.0
$400.0
$500.0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Actual
Budget
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Actual (T48/T8) 415 407 429 406 370 383 362 399 389 424 442 409 Budget 453 425 424 431 393 432 396 419 426 442 456 435
0 50
100
150
200
250
300
350
400
450
500
CUSTOMERS
SALES VOLUME
409 GWh
STD MARGIN
-$17.5M (45%)
Δ in NET ASSETS
-$20.4M
REVENUE
$39.8M
Cumulative YTD Electricity Sales
Cumulative YTD Direct Margin
(Electricity Sales less Cost of Energy)
Data Definitions:
CUSTOMERS: Count of active customers from Calpine.
REPORTED / SALES VOLUME: Best available estimate of actual meter volume. Currently based on T+8 SQMD Report and T+48 when available.
REVENUE: Total Operating Revenue, net of uncollectible, (excludes Miscellaneous and Interest income).
NON-OP REV: Other uses, primarily Interest Income
ELECTRICITY SALES: Sales from electricity (net of uncollectible).
STD MARGIN: Electricity Sales less cost of energy (Forecasting & scheduling included in Cost of Energy to match budget) ACTUAL: Same as sales volume above
BUDGET: Volumes from FY22/23 budget (no update for amended budget) Monthly Sales Volume (GWh)
Financial Dashboard: September 2023
Margin %
CUSTOMERS
457,000
ACTIVE
September revenue of $39.8M accounts for
409 GWh in net retail consumption.
Fiscal Year electricity revenue is $452M
compared to an amended budget of $456M.
YTD Direct Margin (defined as Electricity
Sales less Cost of Energy) of $53M is ahead
of amended budget by $1.1M.
The chart to the right shows volume
comparison to budgeted volume.
The charts below display cumulative
revenue and margin $ vs budget.
31%
48%
21%
37%
46%
16%
Res
Com
Ag
YTD Month
33%
47%
19%
39%
44%
16%
Res
Com
Ag
YTD Month
Revenue $39.8
C.O.E. $56.4
OpEx $3.9
Net Income -
-44.9% $20.4
-7.5%
Act
Bud
Margin $
10 Page 238 of 438
Return of Investments YTD Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep CASH AND CASH EQUIVALENTSRiver City Bank - Money Market and other Interest Earning AccountsFunds Invested - Average Balance $ 70,230,463 68,793,882 $ 70,636,473 $ 68,570,477 $ 76,819,998 $ 92,274,506 $ 104,647,869 $ 105,080,118 $ 111,614,272 $ 114,000,514 $ 119,614,629 $ 126,865,152 $ Gains/Losses/Interest $ 85,008 2,528,887 $ 94,651 $ 119,286 $ 123,533 $ 137,627 $ 205,218 $ 240,392 $ 257,694 $ 273,188 $ 302,124 $ 332,859 $ 357,308 Average APY 1.48% 1.62% 2.03% 2.16% 2.15% 2.67% 2.76% 2.94% 2.94% 3.18% 3.34% 3.38%INVESTMENTSRiver City Bank - Treasury-indexed productsFunds Invested - Average Balance $ 45,259,882 40,162,814 $ 55,127,902 $ 47,699,367 $ 47,828,254 $ 42,893,075 $ 42,856,284 $ 42,594,899 $ 42,768,287 $ 32,732,944 $ 47,754,493 $ 40,000,000 $ Gains/Losses/Interest $ 67,213.37 2,052,288 146,549.22 207,805 214,163 186,551 167,504 148,003 185,195 177,344 206,535 224,925 $ 120,500 Average APY 2.01% 3.89% 4.52% 5.39% 4.68% 4.69% 4.14% 5.22% 4.98% 7.57% 5.65% 3.62%RBC GAM / Principal Financal/ Schwab/ ChaseFunds Invested - Average Balance $ 75,641,706 75,380,564 $ 75,948,593 $ 76,212,285 $ 76,458,827 $ 76,851,697 $ 77,101,019 $ 77,341,109 $ 77,675,387 $ 77,988,923 $ 78,339,918 $ 78,686,011 $ Gains/Losses/Interest $ 143,733.97 3,461,134 261,142.30 306,886.17 266,301.86 246,542.46 392,869.54 252,509.11 240,089.34 334,278.08 316,486.41 350,995 $ 349,299 Average APY 2.29% 4.14% 4.85% 4.19% 3.87% 6.13% 3.93% 3.73% 5.16% 4.87% 5.38% 5.33%
CENTRAL COAST COMMUNITY ENERGY
Investment Summary
October 1, 2022 through September 30, 2023
Current 0 - 30 Days 31 - 60 Days 61 - 90 Days > 91 Days A/R Balance 9,802,764 19,424,430 2,510,135 608,982 412,964 32,759,275
CENTRAL COAST COMMUNITY ENERGY
Summary of Accounts Receivable, Net of Bad Debt Allowance As of September 30, 2023
Staff Report Item 6
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Jerri Strickland, Policy Advisor
Kalia Mitchell-Silbaugh, Policy Advisor
SUBJECT: Receive Regulatory Update
DATE: March 13, 2024
RECOMMENDATION:
This recommends the Operations Board receive the attached Regulatory Update.
DISCUSSION/ANALYSIS:
Please find attached 3CE’s Regulatory Update, providing the latest information on the following:
Resource Adequacy (RA)
Provider of Last Resort (POLR) and Emergency Transition Planning Load Management Standards (LMS) and Real-Time Pricing Demand Flexibility
Bioenergy Market Adjustment Tariff (BioMAT)
Integrated Resource Planning (IRP)
GO 156 Annual Supplier Diversity Report & Plan
Interconnections
Energy Resources Recovery Account (ERRA) Compliance
ERRA Forecast
CONCLUSION:
This is an informational item only.
ATTACHMENT(S):
1. Regulatory Update
Regulatory Update
March 13, 2024
2 Table of Contents
REGULATORY UPDATE .........................................................................................................................................................3 Resource Adequacy (RA) -...............................................................................................................................................3 Provider of Last Resort (POLR) and Emergency Transition Planning -.......................................................4 Load Management Standards (LMS) and Real-Time Pricing - .........................................................................4 Demand Flexibility -...........................................................................................................................................................5 Bioenergy Market Adjustment Tariff (BioMAT) -..................................................................................................6 Renewables Portfolio Standard (RPS) -....................................................................................................................6 Integrated Resource Planning (IRP) -.........................................................................................................................7 GO 156 Annual Supplier Diversity Report & Plan -...............................................................................................7 Interconnections –..............................................................................................................................................................8 Energy Resources Recovery Account (ERRA) Compliance –............................................................................9 Energy Resources Recovery Account (ERRA) Forecast –...................................................................................9
3 REGULATORY UPDATE
Resource Adequacy (RA) - R.23-10-011
Issue
The Resource Adequacy (RA) program is the California Public Utilities Commission’s (CPUC) main grid reliability planning program. All load serving entities (LSEs) under the CPUC’s jurisdiction, including CCAs, must demonstrate purchase of a specified amount of eligible RA generation capacity each month and year to comply with RA program requirements. Increasing demand for and a decreasing supply of eligible RA capacity over the past five years have resulted in sharply increased prices and unprecedented difficulty procuring sufficient RA to achieve compliance. Over the past year the CPUC has also sought to tie RA compliance to other, unrelated functions such as CCA expansion into new communities.
Status
The CPUC initiated a new proceeding to refine the Slice-of-Day (SOD) framework for the 2025 Resource Adequacy (RA) compliance year. CalCCA, on January 19, proposed a temporary RA waiver process, price regulation, and increased out-of-state participation in California's RA market to ease the transition into the first SOD RA framework compliance year.
On February 6, 2024, the CPUC released a report summarizing the implementation of the SOD framework, including analyses and stakeholder inquiries about possibly postponing the SOD to 2026. CalCCA responded on February 23, 2024, advocating for hourly load obligation trading, inclusion of effective Planning Reserve Margin (PRM) in analyses, and a delay of SOD implementation to 2026.
Furthermore, CalCCA filed a Petition for Writ of Review in October 2023 against the CPUC's denial of a rehearing regarding Resolution E-5258, which suspended expansions of 3CE and Ava Community Energy. In a reply on February 1, 2024, CalCCA contested the CPUC's claim to deference and authority, challenged the informal proceeding's review standard, and questioned the evidence supporting the CPUC's actions.
Next Steps
There will be two opportunities for further comments on the RA reform proposals prior to the expected PD in May 2024. A response from the CPUC to CalCCA’s Petition for Writ is expected to be filed by March 22, 2024.
4 Provider of Last Resort (POLR) and Emergency Transition Planning - R.21-03-011 Issue
The Provider of Last Resort (POLR) is the backstop entity that provides electric service to customers of a load serving entity if that LSE fails suddenly. This role has historically been held by the investor-owned utilities (IOUs, namely Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric), but this proceeding is establishing a process to allow CCAs and other non-IOU LSEs to become POLR in their service areas. This proceeding is also considering rules designed to prevent LSE failures that have various implications for 3CE finances and operations. This includes changes to how much money CCAs must post as insurance against their own failure (called the Financial Security Requirement or FSR). 3CE’s FSR has been set at $147,000 since 2018, but that amount is likely to increase with the reforms being considered in this proceeding.
Status
In July of 2023, parties including CalCCA filed opening and reply briefs. This was the last opportunity for stakeholder input before the CPUC issues a Proposed Decision on FSR changes.
Next Steps
Staff are awaiting the delayed October 2023 Proposed Decision (PD). On February 7th, 3CE and other CCA staff met with Energy Division to inquire about its status and were informed a PD is imminent. Upon release, staff will review the PD, submit comments, and engage with CPUC staff as needed. 3CE will also adjust its internal financial planning to reflect any changes made to the FSR.
Load Management Standards (LMS) and Real-Time Pricing - 23-LMS-01 Issue
The California Energy Commission’s (CEC) updated Load Management Standards (LMS) now require IOUs, municipal utilities, and CCAs with load greater than 700 GWh/year to upload time-dependent rates to the CEC’s Market Informed Demand Automation Server (MIDAS) platform, develop a LMS Compliance Plan by March 2024, and present to their governing bodies, for approval by the CEC, at least one hourly marginal cost based rate option (often referred to as a real-time rate) for their customers by 2025.
Status
As of July 28, 2023, 3CE’s MIDAS platform updates have been completed. On February 21, 3CE’s Policy Board approved 3CE’s LMS Plan and authorized its submission to the CEC.
Next Steps
3CE will file its LMS Plan within 30 days of its adoption by the Policy Board in accordance with the timeline set forth in the CEC’s LMS.
5 Demand Flexibility - R.22-07-005
Issue
Launched in 2022, this CPUC proceeding aims to enhance demand flexibility and grid reliability in California, mitigating costs from grid stress. 3CE participates to protect its ratemaking authority, track IOU rate changes, design potential new programs, solve data sharing issues affecting rate design, and prevent cost shifts among customers. Additionally, this proceeding will be where the implementation of AB 205's mandate for an income-graduated fixed charge (IGFC) by July 1, 2024, will be considered. The goal of the IGFC is to lower energy costs for low-income residents through a fixed monthly charge. Although this charge affects only the delivery side and not 3CE's direct operations, 3CE staff monitor developments to gauge impacts on customer experience.
Status
On January 26, the CPUC issued a Decision directing PG&E to expand CCA Valley Clean Energy’s AgFit pilot to bundled and unbundled agricultural customers in PG&E service territory and extending the duration of the pilot to December 31, 2027. AgFit offers agricultural customers assistance with water pumping automation, time-varying rates that incentivize pumping during off-peak hours, and on-bill savings. The Decision authorizes funding for PG&E to administer the expanded pilot and provide incentives to CCAs for pilot participation.
On March 1, a workshop was held to discuss how IOUs will reduce customer enrollment in conflicting demand response programs. It detailed collaboration processes between CCAs and IOUs, focusing on ensuring that participants in the Expanded AgFit pilots understand the requirements to avoid conflicting demand response programs.
Next Steps
3CE will evaluate PG&E’s forthcoming AgFit implementation plan, due to the CPUC by March 25, to ensure that it aligns with 3CE operations before moving forward with AgFIT implementation. 3CE will also continue to monitor the implementation of the first IGFCs to ensure that fixed charges are limited to transmission and distribution rate components and will analyze the PD on the IGFC upon its issuance, scheduled for March or April of 2024.
6 Bioenergy Market Adjustment Tariff (BioMAT) - R.22-10-010 Issue
BioMAT is a procurement program opened in 2015 to encourage the development of small bioenergy projects in California. The program is unique in that it allows load serving entities (LSEs) contracting with these projects to recover the costs from all California electricity users through the Public Purpose Programs (PPP) charge. In 2021, 3CE and other CCAs successfully lobbied legislators to reverse the exclusion of CCAs from BioMAT with the passage of AB 843. AB 843 was the first time CCAs gained access to PPP funding, setting a valuable policy precedent. The CPUC began implementation of AB 843 in October 2022 by opening of a new proceeding to work through the details of CCA participation.
Status
On January 29, CalCCA submitted a BioMAT program enrollment Advice Letter (AL) on behalf of participating CCAs, including 3CE, requesting approval of pro forma program documents. On February 1, 3CE submitted a Tier 3 AL stating that there were no forecasted BioMAT revenue requirements as no eligible Power Purchase Agreements have currently been signed for 2024-2025.
Next Steps
3CE is working internally to set up a balancing account to track BioMAT program costs for reimbursement by the CPUC, as well as other implementation steps in preparation to participate in the BioMAT program. 3CE has also joined a joint CCA effort to advocate for extension of the BioMAT program, which is currently set to end on December 31, 2025. The Joint CCAs will submit comments on March 4 asking the CPUC to consider a 5-year extension of the BioMAT program in the scope of the new RPS proceeding.
Renewables Portfolio Standard (RPS) - R.24-01-017
Issue
The CPUC’s Renewables Portfolio Standard (RPS) proceeding monitors compliance by retail sellers, including CCAs, within California’s RPS program which requires that 60% of all electricity retail sales be served by renewable resources by 2030 and at least 65% of the procurement a retail seller counts toward the RPS requirements be from long-term contracts.
Status
On December 21, the CPUC issued a Decision adopting the Draft 2023 RPS plans of retail sellers including 3CE.
On January 25, the CPUC voted to initiate a new rulemaking to continue implementation of the RPS program, including reviewing RPS procurement plans, providing tools for RPS analysis and reporting, assessing RPS compliance, and integrating new legislative mandates into the RPS program.
Next Steps
Staff will actively monitor and participate in the new RPS proceeding to advocate for beneficial changes to the BioMAT program and the use of appropriate tools and analysis to enhance the CPUC’s reporting process.
Meanwhile, 3CE will maintain its commitment to ongoing RPS compliance, aligning with the Board's directive to surpass the state's goal well in advance by procuring 100% clean and renewable energy by 2030.
7 Integrated Resource Planning (IRP) - R.20-05-003
Issue
Integrated Resource Planning (IRP) is the CPUC’s greenhouse gas (GHG) reduction planning program. LSEs must submit IRPs every two years demonstrating that planned future procurement will produce GHG emissions below an assigned benchmark while contributing to a resource fleet that meets sector-wide GHG targets while maintaining grid reliability. Previous IRP cycles have produced three procurement mandates, which apply to 3CE and other CCAs. The next cycle of IRP will begin shortly.
Status
On February 15, the CPUC approved a Decision that adopts a Preferred System Plan (PSP) portfolio that meets a statewide 25 million metric ton GHG target for the electric sector in 2035 and approved with modifications a Petition for Modification (PFM) to allow extension of deadlines for procurement of long lead-time (LLT) resources under certain conditions. 3CE previously submitted comments in support of the PFM because it aligns with the goal of accelerating LLT resource deployment and decreases the likelihood that a LSE will be penalized for delays outside of its control. This Decision also approved or requested additional information on individual LSEs’ 2022 IRP submissions. 3CE was requested to provide additional information on our rate design by May 1, 2024.
Next Steps
Staff have prepared a response to the request for additional information highlighting our cost-of-service rate structure and how it minimizes bill impacts for customers, which will be provided to the CPUC well before the May 1 deadline. Additionally, 3CE will be actively engaged in this proceeding, conducting advocacy around the structure of the long-term framework and incorporating any new mandates or changes to previous ones into internal procurement planning. The next round of IRP submissions will be due November 2024.
GO 156 Annual Supplier Diversity Report & Plan - R.21-03-010 Issue
GO 156 is a California Public Utilities Commission (CPUC) program that requires California load-serving entities to report on the portion of their contracts and subcontracts that are signed with businesses that qualify as Women, Minority, Disabled, Veteran, Lesbian, Gay, Bisexual, Transgender Business Enterprises (WMDVLGBTBE).
Status
3CE Staff submitted its 2023 Annual Supplier Diversity Report and 2024 Plan on February 28th, prior to the March 1 deadline. The Plan presents 3CE’s 2023 annual non-energy spending and planned activities to support small, local, and diverse businesses in 2024. As done in previous submissions, staff highlighted how equity is a priority of 3CE board decisions and organizational practices.
Next Steps
3CE Staff will attend the CPUC’s Small and Diverse Business Expo on April 4 as part of our ongoing efforts to support and connect with these businesses.
8 Interconnections – R.24-01-008
Issue
The California Energy Commission’s (CEC) 2023 Integrated Energy Policy Report (IEPR) identifies interconnection delays as a significant barrier to achieving California’s electrification and decarbonization goals.
Ongoing initiatives led by various entities are working to address this issue and streamline processes for connecting clean resources to the grid. One such effort is CAISO’s 2023 Interconnection Process Enhancements (IPE) initiative, focused on enhancing coordination of resource procurement, interconnection, and transmission planning to achieve state reliability and policy needs. In addition, the CPUC instituted a new rulemaking in January of 2024 to establish reasonable timelines for customers to receive new service connections and to create procedures for customers to report delays as part of implementing recent statutes.
Status
The CPUC will issue a scoping memo in March for its new OIR. CAISO released a draft final IPE proposal on February 15th that proposes significant modifications to its interconnections study process, including a new scoring criteria that would weigh LSE interest in prospective projects. CalCCA submitted comments in support of most elements included in the proposal. CAISO will issue a final IPE proposal on March 29, to be voted on by its governing board in May.
Next Steps
Distribution planning or implementation failures can delay new customer load interconnection, affecting CCA customers. 3CE will continue to monitor these initiatives, advocate for transparency and efficiency in interconnection and energization processes, and promote accelerated deployment and grid connection of clean energy resources.
9 Energy Resources Recovery Account (ERRA) Compliance – A.22-02-015; A.22-04-001 Issue
Energy Resource Recovery Account (ERRA) compliance filings are made annually by the Investor Owned Utilities (IOUs) for the approval of costs associated with Utility Owned Generation (UOG) operations and fuel procurement, Portfolio Allocation Balancing Account (PABA) entries, economic dispatch of electric resources, and contract administration. IOUs are required to demonstrate compliance with CPUC decisions and the California Public Utilities Code. All CCAs participate jointly in these proceedings through CalCCA to ensure unbundled customers are treated equitably in IOU rate-setting decisions.
PG&E Status
In 2022, PG&E disclosed over 900MW of excess RA after initial reports showed none. PG&E's motion to block Joint CCAs from questioning its RA sales was quickly approved by the ALJ, marking the third such ruling against the Joint CCA's efforts to scrutinize PG&E's RA transactions. The Joint CCAs have appealed these rulings on February 23, seeking a review while the case progresses.
SCE Status
The 2022 SCE ERRA Compliance Case highlights two unresolved issues: SCE's overcharge on franchise fees to departing load customers and its attempt to recover CAISO penalty costs through customer rates. The Joint CCAs are advocating for a refund of the over collected franchise fees and opposing the inclusion of CAISO penalties in rates.
Next Steps
Joint PG&E CCAs plan an ex parte meeting with Commissioner Reynold’s staff regarding the ALJ’s rulings and await an amended proceeding schedule. SCE CCAs seek to review SCE’s franchise fee agreements to address the overcollection issue and plan to negotiate to facilitate Discovery Requests' entry into the record, with hearings set for March 20th.
Energy Resources Recovery Account (ERRA) Forecast – A.23-05-012; A.23-06-001 Issue
ERRA forecast applications are filed annually by IOUs to look ahead at energy procurement-related revenue requirements, including the allocation of costs across Power Charge Indifference Adjustment (PCIA) vintages.
CCAs participate through CalCCA to ensure: (1) accuracy of forecast account balances, rates, and cost calculations; (2) proper attribution of PCIA vintage; (3) proposer attribution between bundled and unbundled customers; (4) appropriateness of IOU proposals within the context of an ERRA forecast proceeding.
Status
On January 5, 2024, CalCCA, SDCP, and CEA (CCA Parties) submitted a pre-hearing conference (PHC) statement for the January 9 PHC regarding the Track 2 ERRA Forecast proceeding. Track 2, involving all three IOUs, focuses on fixed generation costs. Diverse determinations by IOUs on these costs were revealed through ERRA forecast rulings. The PHC statement includes recommendations on scope and schedule, emphasizing issues like utility-owned generation vintaging, treatment of banked RECs, and excluding Replacement RA costs. During the January 9 PHC, the CCA Parties presented these concerns, with Cal Advocates supporting the call for a standardized definition of fixed generation costs.
Next Steps
The ALJ will make decisions on scoping rulings, including issues like UOG re-vintaging and banked REC treatment. The inclusion of these issues may impact the valuation of PCIA, potentially resulting in benefits or drawbacks for unbundled customers. The CCAs will continue to review the work presented by the IOUs to ensure the just treatment of both bundled and unbundled customers.
Staff Report Item 7
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Griffin Boyle, Energy Programs Analysts
Paige Callaghan, Energy Programs Analysts
SUBJECT: Receive Update on FY 2023-24 Energy Programs
DATE: March 13, 2024
RECOMMENDATION:
This memorandum recommends that the Operations Board of Directors receive an update on FY 2023- 24 Energy Programs.
DISCUSSION/ANALYSIS:
On September 14, 2023, the 3CE Policy Board of Directors adopted the FY 2023-24 Operating Budget, which included approximately $16M for the FY 2023-24 Energy Programs Portfolio. The adopted budget funded programs related to transportation electrification and building electrification for all customer classes, agricultural equipment electrification, and programs specific to our Member Agencies.
Attached to this report are status updates on 3CE’s Energy Programs, which includes both Community Programs and Member Agency Programs. These status updates highlight a variety of program performance metrics, including equipment incentivized, housing units electrified, dollars spent or reserved, and performance on equity (e.g., dollars going towards income qualified residents).
FISCAL IMPACT:
There is no fiscal impact associated with this report and update.
CONCLUSION:
3CE’s Energy Programs support local economic stimulation by providing the community and Member Agencies with funding and services to accelerate regional electrification as well as enhanced incentives for underserved customers to reduce GHG emissions throughout the 3CE service area.
ATTACHMENT(S):
1. Community Programs Update
2. Member Agency Services Update
FY 2023-24 Community Energy Programs
This report provides an update on participation in Central Coast Community Energy’s (3CE’s) Community Energy Programs for the fiscal year to date.
Electrify Your Ride Program
3CE’s Electrify Your Ride (EYR) program provides rebates for the purchase or lease of an electric vehicle (EV), for Level 2 EV Chargers, and electrical upgrades that may be needed to install chargers. The program also provides technical assistance for EV infrastructure buildout at publicly accessible commercial sites and at multifamily residential properties. The FY 2023-24 budget for EYR totals $4 million.
On January 5th, 3CE launched a Direct-Current Fast Charger (DCFC) program for eligible commercial, multifamily, and agricultural customers. Designed as a post-purchase rebate incentive, applicants can receive a rebate for 50% of the total purchase and installation costs of a DCFC, up to $100,000.00 USD. Eligible projects must be publicly available; however, agricultural applicants may install DCFCs on a private lot to support electrification of agricultural equipment. Incentives are available on a first come, first served basis until funding has been fully awarded. Higher incentive amounts are given to income-qualified customers and multifamily-unit buildings to promote greater adoption of transportation electrification in disadvantaged and low-income communities.
Since the beginning of FY 2023-24, 3CE has received 861 applications and has approved over $1.4 million in incentives. The following figures summarize program performance based on applications received in FY 2023-24:
Figure 1 (above): Electrify Your Ride funds distributed by County in FY 2023-24.
Figure 2 (above): Electrify Your Ride Program Funds distributed by measure type in FY 2023-
24. 18%
2%
35%
26%
19%
FY 2023-24 EYR FUNDS DISTRIBUTED BY COUNTY
SUM OF REBATES = $1,410,562
Monterey County
San Benito County
San Luis Obispo County
Santa Barbara County
Santa Cruz County
60%
31%
9%
FY 2023-24 EYR FUNDS DISTRIBUTED BY MEASURE
SUM OF REBATES = $1,410,562
Battery EV
EV Readiness
Level 2 EV Charger
Figure 3 (above): Breakdown of funds distributed to income-qualified applicants.
Tier 1 = 201 - 400% FPL; Tier 2 = <200% FPL; N/A = Non-Income Qualified applicants Electric Bus Program
3CE’s Electric Bus Program provides public schools/school districts, farmworker transit organizations, and public transit agencies enrolled in 3CE service the opportunity to receive funding for the purchase of an all-electric bus. In FY 2023-24, the budget for the Electric Bus program is $2 million.
Applications are accepted on a rolling basis until funds are fully distributed. Applicants are encouraged to apply for rebates following the purchase and delivery of an electric bus. Notices of Qualification (NOQ) may be requested to provide applicants with assurances of their eligibility status. Program recipients may elect for funds to be distributed directly from 3CE to the bus manufacturer upon receipt of the final invoice. Applicants are encouraged to stack/leverage other incentive funds and no matching fund source restrictions apply.
To date, 3CE has received one application for an electric school bus to serve a Title 1 school in Monterey County and two School District applications for an electric bus from Santa Cruz and Santa Barbara counties. Payments for an electric school bus charger in Los Olivos and an electric bus rebate in Orcutt have also been made.
13%
23%
64%
FY 2023-24 EYR FUNDS
% Income Qualified Incentives Distributed
Income Qualified - Tier 1
Income Qualified - Tier 2
N/A
Electrify Your Home Program
On December 6, 2023, 3CE re-launched the Electrify Your Home (EYH) program, which continues to provide incentives to contractors enrolled in the TECH Clean California (TECH) program for installation of all-electric heat pump water heating and HVAC systems in existing single and multi-family buildings. EYH reduces purchase costs to 3CE customers to incentivize making the switch to all-electric heat pump technology. The FY 2023-24 budget for EYH is $1.5 million.
Contractors enrolled in TECH also have access to no-cost education and training on electrification design and specification, heat pump installation, building science, and sales and marketing for electric heat pumps. There are currently 75 licensed contractors enrolled in the TECH program that work in 3CE’s service area.
Recently, the TECH Clean California budget for single-family market-rate heat pump water heaters, in the PG&E gas territory, was nearly exhausted. To ensure a consistent experience for our customers and contractors, 3CE has increased its contribution to the EYH water heater incentives to compensate for the TECH budget shortage. In FY 2023-24 the EYH program has completed five projects and distributed $15,000 dollars in incentives.
New Construction Electrification Program (NCEP)
This year’s iteration of the NCEP program will continue to provide affordable and farmworker housing developers and homeowners building Accessory Dwelling Units (ADUs) with incentives to build all-electric housing. 3CE also offers incentives to rebuild all-electric homes to people who lost their homes because of a declared natural disaster, such as the 2022-2023 winter storms. Beginning in January 2024, NCEP expanded to include market-rate single and multifamily housing. Also, this year, to streamline the application process, 3CE is encouraging eligible applicants to submit funding requests post-project completion.
Qualifying housing projects must be built to all-electric standards for all energy utility needs, including but not limited to water heating, space heating, and cooking appliances. Incentives are provided “downstream” to developers and homeowners on a per-unit basis upon successful completion of the project. In FY 2023-24, 3CE budgeted a total of $1.1 million for NCEP.
Since October 1, 3CE has approved two new applications totaling $20,000 for an all-electric ADU and an all-electric disaster rebuild project. Also in FY 2023-24, 3CE has paid $15,000 in incentives for three NCEP projects reserved in past fiscal years.
Agricultural Electrification Program
3CE’s Agricultural (Ag) Electrification program provides rebates to ag customers for replacing fossil fuel powered equipment with electric powered alternatives including farm tools, irrigation pumps, vehicles, and more. Enhanced incentives are available for small businesses and for businesses replacing equipment damaged or destroyed by a declared natural disaster. The program also provides technical assistance for EV infrastructure buildout at agricultural customer sites. The FY 2023-24 budget for Ag Electrification is $1.8 million.
Rebates for equipment with higher estimated GHG emissions avoidance and those benefiting small to medium sized businesses are supported by greater incentive levels. 3CE covers up to 50% of the cost for farm equipment, providing up to $15,000 USD for smaller “Tier 1” equipment and up to $75,000 USD for larger “Tier 2” equipment. Program funds are offered as a post-purchase rebate.
Since the start of the current fiscal year, 3CE has received three Tier 1 applications and four Tier 2 applications for the Ag Electrification Program in Santa Barbara (2 applicants), Monterey (1 applicant), Santa Cruz (2 applicants), San Luis Obispo (1 applicant) and San Benito (1 applicant) Counties. Four additional projects have been paid out in FY 2023-24 totaling $45,000 USD.
FY 2023-24 3CE Member Agency Programs
This report provides an update on FY 2023-24 Member Agency program implementation activities.
Reach Code Program
3CE’s Reach Code program for Member Agencies provides no-cost technical assistance to help local cities and counties adopt and implement reach codes, including stakeholder outreach support. Services include presenting to key stakeholders, answering technical questions, attending meetings, developing customized ordinances, reviewing staff presentations and reports, and developing implementation tools to help Member Agencies enforce reach codes. In FY 2023-24, 3CE budgeted a total of $100,000 for the Reach Code program.
Since launching the Reach Code program on October 1, 3CE has engaged four Member Agencies:
Member Agency Reach Code Type
City of San Luis Obispo New Construction and Existing Buildings City of Santa Cruz Existing Buildings
City of Goleta Electric Vehicle Charging Infrastructure County of Monterey Electric Vehicle Charging Infrastructure Electrify Your Fleet Program
3CE’s Electrify Your Ride (EYF) program provides rebates to Member Agencies after the purchase or lease of eligible vehicles as well as an option to reserve funds in advance of taking possession of an eligible vehicle. To reserve funds, applicants must provide proof of intent to acquire an eligible vehicle. Applications will be accepted until program funds are fully reserved or spent. A 3CE Member Agency applicant is eligible to reserve or be awarded up to $150,000 in EYF incentives in the program year. In FY 2023-24, 3CE budgeted a total of $2.1 million for EYF.
Since launching the program on October 1, 3CE has incentivized 14 Battery Electric Vehicles totaling $126,000.
Charge Your Fleet Program
3CE’s Charge Your Fleet (CYF) program provides rebates for the purchase and installation of Level 2 or Level 3 (DC Fast Chargers) EV chargers. Member Agencies are eligible for up to $150,000 in CYF each year. 3CE’s 2023-24 CYF budget totals $1.2 million.
Since launching the program on October 1, 3CE has incentivized 24 EV chargers totaling $208,698.
Member Agency Equipment Type Quantity Total Incentive
CITY OF CARPINTERIA Level 2 10 $48,698.25
CITY OF SAN LUIS OBISPO Battery Electric Vehicle
(BEV)
1 $5,000.00
CITY OF SANTA CRUZ Level 2 4 $20,000.00
CITY OF SANTA MARIA Battery Electric Vehicle
(BEV)
7 $79,000.00
Level 2 8 $40,000.00
CITY OF WATSONVILLE Level 3 2 $100,000.00
COUNTY OF SANTA CRUZ Battery Electric Vehicle
(BEV)
6 $42,000.00
Total 38 $334,698.25
Summary of EYF and CYF applications paid in FY 2023-24.
Plan Your Fleet Program
3CE’s Plan Your Fleet (PYF) program provides no-cost planning, design, and engineering consulting to Member Agencies to accelerate fleet electrification and EV charging infrastructure development across the Central Coast. 3CE’s FY 203-24 budget for PYF is $250,000.
This fiscal year to date, the jurisdictions of Carpinteria, Greenfield, Monterey County, and Santa Barbara County are participating in the program to receive fleet replacement plans, charging infrastructure designs, or both.
Member Agency Building and Transportation Electrification Working Groups 3CE is facilitating working groups made up of Member Agency staff focused on building and transportation electrification to promote existing programs and identify needs, barriers, and scalable solutions for regional electrification. The next working group event is currently scheduled for Spring 2024.
Staff Report Item 8
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Juan Lopez, Director of Finance
SUBJECT: Receive the Quarterly Investment Report
DATE: March 13, 2024
RECOMMENDATION:
Receive the Quarterly Investment Report.
BACKGROUND:
The Audit and Finance Committee received an update on banking diversification on June 21, 2023, in response to the series of bank failures and bankruptcies that affected mid-size financial institutions in early 2023. Staff took guidance from the Committee to add additional financial and investment diversification to mitigate the potential risk of holding assets in a few concentrated financial institutions.
Since June 2023, staff have worked on diversifying 3CE’s cash and investment holdings while taking advantage of favorable interest rates to increase investment returns.
DISCUSSION/ANALYSIS:
Staff evaluated the fiscal position of 3CE’s current institutional banking and investment partners and found that they were appropriately collateralized and did not present an immediate risk. 3CE’s deposits are subject to California Government Code Section 16521, which requires banks to collateralize public funds in excess of the Federal Deposit Insurance Corporation (FDIC) limit of $250,000 by 110%. Certain short-term investments with original maturities of less than three months are not subject to the collateral requirement or FDIC coverage. 3CE monitors its risk exposure on an ongoing basis for those short-term investments. Although the funds held for operations are either FDIC-insured or collateralized, staff sought diversification efforts to minimize risks. Staff opened an operating account with JP Morgan Chase and two brokerage accounts with Schwab and Fidelity. Below is a breakdown of funds held as of January 31, 2024.
Investment Strategy
The Finance Department has spent the past months right sizing its portfolio to make its money work while keeping enough liquidity to meet operating costs. The investment strategy consists of holding three different “classes” of funds to right-size its portfolio:
cash to meet ongoing operation costs;
liquidity reserves to meet collateral calls and unforeseen costs; and core investment portfolio comprised of short-term investments.
The investment strategy is passive, where fixed-income holdings such as Treasury notes and bills are held to maturity, and 3CE receives the coupon income and discount. Royal Bank of Canada (RBC) is the investment manager for $80.1 million of 3CE’s investments, while 3CE is the investment manager of the $30.2 million held in the Schwab brokerage account. 3CE has instructed RBC to let investments mature to free up liquidity reserves to ensure that deposits held from energy suppliers are readily available should they provide letters of credit to free up their collateral. An alternative option to using an investment manager or self-investing is to utilize a local government or state investment pool such as the Local Agency Investment Fund (LAIF) or California Asset Management Program (CAMP). 3CE researched these investment options and found the investment fees costly compared with self-investment, with little to no significant increased investment performance compared to 3CE’s current investment holdings because of a high-interest environment.
Investment Vehicles
3CE’s investment mix aligns with the Investment Policy and California Government Code. As of January 31, 2024, 3CE held $101.7 million in cash, $102.4 million in U.S. Treasuries, $40.2 million in certificates of deposit, $11.7 million in money market funds, and $4.5 million in federal agency notes. Aside from money market funds, all other investment types do not have state investment limits. State code limits money market funds to 20% of the portfolio and 3CE’s money market funds were at about 5%. All holdings managed by RBC and 3CE are high-grade rated investments or higher. Below is the breakdown of the cash and investment balances held by institution and investment mix as of January 31, 2024:
River City Bank $144,922,284
Chase 5,321,209
sub-total 150,243,494
Royal Bank of Canada $ 80,080,243
Schwab 30,230,860
sub-total 110,311,103
Total $260,554,597
Cash and Investment Balances
Operating Accounts
Investment Accounts Page 262 of 438
Investment Performance in a High-Interest Environment
The federal funds target rate has remained at 5.25% to 5.5% since last summer, following 11 increases that began in March 2022. After a long period of near-zero yields, yields on the three-month Treasury bill have been as high as 5.5%, their highest level since December 2000, per Morningstar. In Fiscal Year 2022- 23, 3CE put its cash to work in the various investment vehicles outlined in the prior section to take advantage of the high-interest environment. As a result, investment income totaled $8.2 million, an increase of $7.2 million from the prior fiscal year.
Of that $8.2 million, $3.5 million came from short-term investments in RBC and Schwab with monthly yields ranging from 2.3% to 6.1%, $2.5 million from money market funds and cash interest earnings held at River City Bank (RCB) with monthly yields ranging from 1.5% to 3.4%, and $2.1 million from certificates of deposits held at RCB with monthly yields ranging from 2.0% to 7.6%.
The first quarter of FY 2023-24 netted investment earnings of $3.0 million, made up of $1.3 million from short-term investments, $1.1 million from money market funds, and $0.6 million from certificates of deposits. 3CE anticipates seeing similar investment earnings in future quarters as long as the federal funds target rate remains consistent over the coming months.
FISCAL IMPACT:
There is no fiscal impact to receiving this report.
CONCLUSION:
Since its presentation to the Audit and Finance Committee on June 21, 2023, 3CE has been proactive in diversifying its financial institutional partners while putting cash and short-term investments to work to take advantage of a high-interest environment. This investment performance and diversification will right-size the portfolio to meet short and long-term obligations while mitigating investment risks. This report was presented to the Audit & Finance Committee and received by the Policy Board on February 21, 2024.
ATTACHMENT(S):
None
Institution Balance Investment Mix
River City Bank $144,922,284
Cash (sweep) - $89M
CDs - $40M
Money Market - $10M
cash (operating) - $5M
Chase 5,321,209 cash (operating)
Royal Bank of Canada 80,080,243
Treasuries - $74M
Federal Agencies - $5M
Money Market - $1M
Schwab 30,230,860
Treasuries - $28M
cash (sweep) - $2M
Total $260,554,597
Staff Report Item 9
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Juan Lopez, Director of Finance
SUBJECT: Receive a Financial Report for the period October 1, 2023 through December 31, 2023 DATE: March 13, 2024
RECOMMENDATION:
Receive a Financial Report for the period October 1, 2023, through December 31, 2023.
SUMMARY:
For the first quarter of FY 2023-24, operating revenues totaled $123.5 million, while operating expenses totaled $99.6 million for a net operating income of $23.9 million. Non-operating revenue added $3.0 million to total revenue, tallying a positive change in net position of $26.8 million.
The first quarter actuals versus budget are favorable. Operating revenue is lower than budget by $9.7 million, reflecting the seasonal nature of revenues and expenditures. Operating revenue should align with the budget as the fiscal year progresses. Investment revenue exceeds budget by $1.4 million due to staff active management in a favorable short-term interest rate environment. Non-energy operating costs were $4.8 million lower than budget as a result of vacancies and general operating cost reductions (due to timing). Energy costs were $3.3 million higher than budget.
Net position for the quarter grew by $26.8 million, an increase of 11.1%. Cash, cash equivalents, and short-term investments totaled $258.8 million, a 1.5% increase from the start of the fiscal year. Liquidity is expected to increase for the rest of the fiscal year as a result of the January and February 2024 rate changes in the PG&E and SCE territories. Modest increases in accrued revenue, collateral posted with the CAISO, and decreases in accrued electricity costs are factored into the increase in the net position. These
positive results are expected to be minimized throughout the remainder of the fiscal year as energy costs and resource adequacy purchases materialize.
FISCAL IMPACT:
There is no financial impact associated with this report.
ATTACHMENT(S):
1. December 31, 2023 Financial Report
Compiled Financial Statements 1
Compiled Budgetary Comparison Schedule 6
Budget Variance Commentary 9
Financial Dashboard 10
Investment Summary 11
Accounts Receivable Aging Summary 12
Table of Contents
FINANCIAL REPORT
Fiscal Year to Date
As of December 31, 2023
1 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
Central Coast Community Energy
Management is responsible for the accompanying financial statements of Central Coast Community Energy (a California Joint Powers Authority) which comprise the statement of net position as of December 31, 2023, and the related statement of revenues, expenses, and changes in net position, and the statement of cash flows for the period then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements.
Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.
Central Coast Community Energy’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.
We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.
Maher Accountancy
San Rafael, CA
January 29, 2024
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com
Current assets
Cash and cash equivalents - unrestricted 169,025,868 $
Accounts receivable, net of allowance 33,191,063
Accrued revenue 28,779,085
Other receivables 371,527
Loan receivable 188,951
Prepaid expenses 1,956,852
Deposits 16,054,329
Cash - restricted 294,000
Investments 89,742,481
Total current assets 339,604,156
Noncurrent assets
Deposits 23,182
Loan receivable 1,425,882
Lease asset, net of amortization 1,342,557
Capital assets, net of depreciation and amortization 549,748 Total noncurrent assets 3,341,369
Total assets 342,945,525
Current liabilities
Accrued cost of electricity 38,040,466
Accounts payable 1,763,185
Other accrued liabilities 955,105
User taxes and energy surcharges due to other governments 1,836,917 Lease liability 306,469
Security deposits - energy suppliers 501,000
Total current liabilities 43,403,142
Noncurrent liabilities
Security deposits - energy suppliers 29,756,280
Lease liability 1,089,039
Total noncurrent liabilities 30,845,319
Total liabilities 74,248,461
Net investment in capital assets 496,797
Restricted for security collateral 294,000
Unrestricted 267,906,267
Total net position 268,697,064 $
NET POSITION
As of December 31, 2023
STATEMENT OF NET POSITION
CENTRAL COAST COMMUNITY ENERGY
ASSETS
LIABILITIES
OPERATING REVENUES
Electricity sales, net 123,465,181 $
Total operating revenues 123,465,181
OPERATING EXPENSES
Cost of electricity 93,795,363
Contract services 2,308,380
Staff compensation 1,878,121
Other operating expenses 387,627
Program incentives 1,105,594
Depreciation and amortization 137,776
Total operating expenses 99,612,861
Operating income (loss) 23,852,320
NONOPERATING REVENUES (EXPENSES)
Interest and investment returns 2,993,099
Interest and financing costs (19,680)
Nonoperating revenues (expenses) 2,973,419
CHANGE IN NET POSITION 26,825,739
Net position at beginning of period 241,871,325
Net position at end of period 268,697,064 $
Three Months Ended December 31, 2023
AND CHANGES IN NET POSITION
STATEMENT OF REVENUES, EXPENSES
CENTRAL COAST COMMUNITY ENERGY
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 121,235,154 $
Receipts of deposits and collateral 25,330,483
Payments to suppliers for electricity (102,386,584)
Payments of deposits and collateral (34,890,718)
Payments for other goods and services (3,055,453)
Payments for program incentives (1,792,402)
Payments of staff compensation (1,617,687)
Payments of taxes and energy surcharges to other governments (2,029,548) Net cash provided by operating activities 793,245
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Interest and related expense payments (3,440)
Net cash provided by non-capital financing activities (3,440)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Payments of lease liability (88,106)
Payments to acquire capital assets (42,028)
Net cash provided (used) by capital and related financing activities (130,134)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 2,457,308
Proceeds from investment sales 19,214,155
Principal payments received of loan receivable 93,165
Purchase of investments (49,138,300)
Net cash provided (used) by investing activities (27,373,672) Net change in cash and cash equivalents (26,714,001)
Cash and cash equivalents at beginning of year 196,033,869 Cash and cash equivalents at end of period $ 169,319,868 Reconciliation to the Statement of Net Position
Cash and cash equivalents - unrestricted $ 169,025,868
Cash - restricted 294,000
Cash and cash equivalents $ 169,319,868
Three Months Ended December 31, 2023
STATEMENT OF CASH FLOWS
CENTRAL COAST COMMUNITY ENERGY
Operating income (loss) 23,852,320 $
Adjustments to reconcile operating income (loss) to net cash provided by operating activities
Depreciation and amortization expense 137,776
(Increase) decrease in:
Accounts receivable, net of allowance (431,788)
Accrued revenue (3,913,978)
Other receivables 3,865,058
Prepaid expenses (1,576,641)
Deposits (9,560,235)
Increase (decrease) in:
Accrued cost of electricity (10,882,010)
Accounts payable (993,751)
Other accrued liabilities 213,304
User taxes and energy surcharges due to other governments 83,190 Net cash provided by operating activities 793,245 $
CENTRAL COAST COMMUNITY ENERGY
STATEMENT OF CASH FLOWS (continued)
Three Months Ended December 31, 2023
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
6 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
Central Coast Community Energy
Management is responsible for the accompanying special purpose statements of Central Coast Community Energy (a California Joint Powers Authority) which comprise the budgetary comparison schedule and a supplemental budgetary comparison schedule for the period ended December 31, 2023, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.
The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of the Authority.
Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.
Central Coast Community Energy’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.
We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.
Maher Accountancy
San Rafael, CA
January 29, 2024
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com
2023/24 YTD
Budget
2023/24 YTD
Actual
2023/24 YTD
Budget Variance
(Under) Over
2023/24 YTD
Actual / Budget %
2023/24 Annual
Budget
2023/24 Budget
Less Actual
2023/24 Budget
Remaining /
Budget %
REVENUES AND OTHER SOURCES
Electricity sales 135,042,000 $ 125,127,777 $ (9,914,223) $ 93% 563,933,447 $ 438,805,670 $ 78% Uncollectible accounts (1,875,000) (1,664,200) 210,800 89% (7,500,000) (5,835,800) 78% Electricity sales, net 133,167,000 123,463,577 (9,703,423) 93% 556,433,447 432,969,870 78% Investment and miscellaneous income 1,600,000 2,994,703 1,394,703 187% 6,400,000 3,405,297 53% Total revenues and other sources 134,767,000 126,458,280 (8,308,720) 94% 562,833,447 436,375,167 78% EXPENDITURES AND OTHER USESCurrent Expenditures
Cost of energy 93,869,112 90,515,000 3,354,112 104% 520,297,514 426,428,402 82% Salaries and benefits 2,384,000 1,878,121 (505,879) 79% 9,537,076 7,658,955 80% Services and supplies 8,250,000 3,957,175 (4,292,825) 48% 32,998,857 29,041,682 88% Total current expenditures 101,149,000 99,704,408 (1,444,592) 99% 562,833,447 463,129,039 82% Surplus (deficit) $ 33,618,000 $ 26,753,872 $ (6,864,128) $ (26,753,872) - $
CENTRAL COAST COMMUNITY ENERGY
SUPPLEMENTAL BUDGETARY COMPARISON SCHEDULE
Three Months Ended December 31, 2023
CCA Program Surplus/(Deficit)
per budgetary comparison schedule: 26,753,872 $
Adjustments needed to reconcile to the
changes in net position in the
Statement of Revenues, Expenses
and Changes in Net Position:
Add back GASB 87 lease amortization not in operating budget 71,867 Change in Net Position 26,825,739 $
REVENUES, EXPENSES AND CHANGES IN NET POSITION
CENTRAL COAST COMMUNITY ENERGY
BUDGET RECONCILIATION TO STATEMENT OF
Three Months Ended December 31, 2023
Budget Item YTD Variance Comment
Electric Sales Revenue (7.3%) Sales revenue includes revenues actually billed to customers as well as estimated customer usage during the reporting period that is not yet billed.
Cost of Energy 3.7% Variances in this category are typically due to (1) timing difference between projected and actual REC deliveries, (2) variance from actual to anticipated market prices, and (3) variance from actual to expected volume used by customers. Cost of energy includes scheduling coordinator fees for budget purposes only.
Staffing (21.2%) Staffing expenses are under budget due to the timing of new hires.
Professional Services (67.1%) This category includes accounting, IT, technical and other consultants.
Legal Costs (59.3%) This category includes outside legal costs for regulatory and energy procurement needs.
Marketing and customer enrollment (58.4%) Variance is mostly due to the lower than anticipated costs of recent customer enrollments.
Data Management Services (7.6%) These fees non-discretionary and are charged on a per customer basis.
Utility Service Fees (4.7%) These are PG&E and SCE fees charged on a per customer basis.
Other General & Administrative (49.0%) This category includes occupancy costs, industry membership dues, and other general and administrative costs.
Energy and Related Programs (67.4%) Programs expenses have generally been delayed until future periods Budget Commentary for significant items
CENTRAL COAST COMMUNITY ENERGY
October 1, 2023 through December 31, 2023
$13.2
$22.9
Act
Bud
$29.6
$42.7
$36.1
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Actual
Budget
$123.5
$133.2
$556.4
$0.0
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Actual
Budget
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Actual (T48/T8) 416 393 410
Budget 420 402 416 419 383 432 396 419 426 442 456 435
0 50
100
150
200
250
300
350
400
450
500
CUSTOMERS
SALES VOLUME
410 GWh
STD MARGIN
$13.2M (31%)
Δ in NET ASSETS
$12.0M
REVENUE
$42.9M
Cumulative YTD Electricity Sales
Cumulative YTD Direct Margin
(Electricity Sales less Cost of Energy)
Data Definitions:
CUSTOMERS: Count of active customers from Calpine.
REPORTED / SALES VOLUME: Best available estimate of actual meter volume. Currently based on T+8 SQMD Report and T+48 when available.
REVENUE: Total Operating Revenue, net of uncollectible, (excludes Interest income).
ELECTRICITY SALES: Sales from electricity (net of uncollectible).
STD MARGIN: Electricity Sales less cost of energy (Forecasting & scheduling included in Cost of Energy to match budget) ACTUAL: Same as sales volume above
BUDGET: Volumes from FY23/24 budget
Monthly Sales Volume (GWh)
Financial Dashboard: December 2023
Margin %
CUSTOMERS
456,000
ACTIVE
December revenue of $42.9M accounts for
410 GWh in net retail consumption, 6 GWh
below budget.
YTD Electricity revenue is $123.5M
compared to budget of $133.2M. YTD
Direct Margin (defined as Electricity Sales
less Cost of Energy) of $29.6M is below
budget by $13.1M.
The chart to the right shows volume
comparison to budgeted volume.
The charts below display cumulative
revenue and margin $ vs budget.
41%
47%
12%
36%
48%
17%
Res
Com
Ag
YTD Month
45%
45%
11%
39%
46%
15%
Res
Com
Ag
YTD Month Revenue $42.9
C.O.E. $28.7
OpEx $2.3
Net Income $12.0
31.4%
51.2%
Act
Bud
Margin $
10
Return of Investments YTD Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep CASH AND CASH EQUIVALENTSRiver City Bank - Money Market and other Interest Earning AccountsFunds Invested - Average Balance $ 109,380,169 127,068,814 $ 100,067,132 $ Gains/Losses/Interest $ 1,051,592 $ 382,898 328,802.57 339,891.42 Average APY 3.62% 3.61% 4.08%INVESTMENTSRiver City Bank - Treasury-indexed productsFunds Invested - Average Balance $ 40,000,000 $ 50,000,000 $ 40,000,000Gains/Losses/Interest $ 627,907 178,385.54 213,485.85 236,035.13 Average APY 5.35% 5.12% 7.08%RBC GAM / Principal Financal/ Schwab/ ChaseFunds Invested - Average Balance $ 89,306,054 $ 94,745,123 $ 110,223,316 Gains/Losses/Interest $ 1,288,693 375,490.63 434,211.19 478,991.16 Average APY 5.05% 5.50% 5.21%
CENTRAL COAST COMMUNITY ENERGY
Investment Summary
October 1, 2023 through December 31, 2023
11
Current 0 - 30 Days 31 - 60 Days 61 - 90 Days > 91 Days A/R Balance $ 17,851,987 $ 11,784,440 $ 3,158,102 $ 724,961 $ (328,427) $ 33,191,063
CENTRAL COAST COMMUNITY ENERGY
Summary of Accounts Receivable, Net of Bad Debt Allowance As of December 31, 2023
12
Report Item 10
TO: 3CE Operations Board of Directors
FROM: Seth Capron, Community Advisory Council Chair
SUBJECT: CAC Report
DATE: March 13, 2024
February 7, 2024 Community Advisory Council Meeting
Energy Affordability & Arrearage Management Plan – Discussion Item Update on impending potential wave of customer shutoffs A great deal of concern about possible outcomes for low-income customers FY 2022-23 Energy Programs Portfolio Evaluation – Discussion Item Thorough report covering completed fiscal year
Look back to identify areas for program improvement
Of the $14.9 million budgeted for incentives, only $8.3 million, or 56%, was spent. o Each program’s percent of budgeted incentive dollars spent was reported Electrify Your Ride - $$3.7M or 91%
Electric Bus - $875K or 44%
New Construction Electrification - $616K or 41%
Electrify Your Home - $848K or 59%
Ag Electrification – $732K or 37%
Charge Your Fleet - $208K or 17%
Electrify Your Fleet – $757K or 38%
Approximately $3.7 million, 44% of funds distributed, were for equity-focused projects o Income-qualified customers, Title 1 schools, and small to medium-sized agricultural businesses.
o Programs rated on uptake by underserved communities
Programs resulted in 4,732 metric tons of CO2
o Each program analyzed for the cost per ton of GHG eliminated o GHG reduction needs to be analyzed wholistically, estimating program effects beyond customers actually receiving incentives.
Notable recommendations
o Continue Electrify Your Ride’s focus on targeting lower income customers o Focus EVCE installation at workplaces and in low income residential areas o Staff is considering implementing a direct-install program for building electrification
Broaden reach of program beyond middle and upper income homeowners Target income-qualified customers for no-cost installation Combine with 3rd party energy efficiency programs to result in lower electric bills
o Update Underserved Communities Outreach and Engagement Plan to better connect o Consider expanding New Construction Electrification to include market rate housing o Consider focusing additional incentive levels for electrifying nonprofit low income multi-family housing o Use data analysis to correlate effective outcomes from specific outreach activities Report is still in draft state – Please read when presented to the Board 3CE’s Demand Response Strategy Considerations – Workplan Discussion Item Staff provided a brief report on RFP responses submitted by vendors on a Behind-the-Meter Battery Energy Storage Solution and Demand Response offering Staff analyzing a range of possibilities offered, including advanced analytics, research-driven customer targeting, flexible platforms for distributed energy resources, and tailored incentives Update on FY 2023-24 Energy Programs – Workplan Discussion Item Regular update on current fiscal year participation levels in different programs Highlights include:
o Electrify Your Ride continues to show strong customer participation o Electric Bus Program – Availability of buses continues to impact program o New Construction Electrification – Slow uptake in initial months of fiscal year o Member Agency Electrify Your Fleet – Only 1 application received this fiscal year Vehicle availability is still an issue
o Member Agency Charge Your Fleet – Only 1 application received this fiscal year o Member Agency Plan Your Fleet – Only 2 agencies have expressed interest this fiscal year
Staff Report Item 11
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
SUBJECT: CEO Report
DATE: March 13, 2024
STAFFING UPDATE
Nicholas Dominguez -Director of Power Supply Resources
Nick spent over 11 years with the Lassen Municipal Utility District. Nick most recently served as the Interim General Manager and was primarily responsible for leading the business department and strategic initiatives, including renewable energy and transmission agreements. He served on the Utah Associated Municipal Power System Board of Directors New Resource Project and is a graduate of the American Public Power Association’s Strategic Leadership for Public Power program and the California Municipal Utility Association’s Next Level Leadership program. Nick is excited to join the 3CE team and continue his service to community-owned power.
Christopher Cook-Director of Energy Programs
Chris Cook spent 9 years with California American Water, where he most recently served as Director of Operations, guiding the Central Division’s operations, $50 million operating budget. Before joining California American Water, Chris held engineering positions as an R&D engineer and engineering consultant. He also served a two-year stint with the Peace Corps in Guinea, West Africa. Chris grew up on the Monterey Peninsula. Chris brings a hometown pride, collaborative management style and an engaging enthusiasm to his work, as well as more than 20 years of experience in engineering, project, and team leadership.
3CE RATE SETTING
Staff is working with NewGen Strategies and Solutions, LLC to design cost-based rates that incorporate the Southern California Edison served territory in south Santa Barbara County. Staff is evaluating differences in customer consumption patterns that may impact the cost to serve customers,
competitiveness to the incumbent investor-owned utilities, and where different rate offerings may incentivize customers to change consumption behaviors. 3CE is committed to ensuring its rates recover costs, provide a strong financial foundation for the agency, and support our mission to reduce emissions related to energy consumption.
CALIFORNIA CLIMATE CREDIT
California Climate Credit: California electricity customers have received a California Climate Credit on their energy bills, which is designed to help mitigate the cost of transitioning to a clean and renewable grid. The credit is funded through California’s Cap and Trade program and administered by the CPUC.
The 2024 credit will be $55.17 for 3CE’s shared PG&E customers and $86 for 3CE’s shared SCE customers. Customers do not have to take any action to receive the credit, which is automatically applied through the utility’s billing process.
EXPANSION OF SYSTEM RELIABILITY PILOTS - AgFIT
On January 25, the California Public Utilities Commission (CPUC) issued a decision authorizing expansion of successful demand flexibility pilot programs to include Community Choice Aggregators (CCAs).
In 2022, CCA Valley Clean Energy (VCE) launched a pilot program with Pacific Gas & Electric (PG&E) which incentivized agricultural customers to shift irrigation operations to periods of the day when renewable energy is abundant by offering real-time variable rates-based market prices. The program met with support from agricultural customers who shifted irrigation hours without impacting operations and receive savings on their energy bills as a result. By 2023, VCE had enrolled 3.1 MW of load.
PG&E was directed to expand this program, called AgFIT, throughout its service territory by including other CCAs. The CPUC decision instructs PG&E to target a combined 100-megawatt-load-shift away from peak hours (50-megawatt enrollment per pilot) and authorizes the utility to spend up to $36 million on customer incentives, administration, and marketing. CCAs will receive an incentive of $20 per kilowatt for each year of customer enrollment in the program.
CALIFORNIA COMMUNITY POWER OWNED ASSET EVALUATION
Staff is working with California Community Power (CCPower) on a multi-phase evaluation of asset ownership. Phase 1 was conducted by CCPower staff to evaluate the economic analysis and due diligence on the impacts of the Inflation Reduction Act for public asset owners, delivery method protocols, and development service providers. Phase 2 includes due diligence regarding CCPower bonding capacity, development of pro forma agreements, and solicitation development.
Following the outcome of Phase 2, staff will determine to proceed with future phases which include the asset engineering, contract negotiations, and potential bond issuance (Phase 3) and ultimately construction, commissioning, and operation (Phase 4).
PROPERTY ACQUISITION
Staff successfully negotiated and closed on the purchase of 1026 Palm Street in downtown San Luis Obispo. Our next step is to solicit an architectural firm to design and remodel the space for 3CE’s needs.
ATTACHMENT(S):
1. 2024 February Customer Enrollment and Engagement Report
2. Contract List Under $200k
Customer Enrollment and Engagement Report
Central Coast Community Energy
Communications and Outreach
February 2024
Member Agency Services
3CE facilitated the Member Agency Quarterly Meeting for Member Agency staff on January 17. Member Agency staff heard updates on City of Atascadero and SLO County enrollment preparations, rates, the net billing tariff (solar billing plan) rollout schedule, changes to our rebate methodology and rundown of current energy programs. Our Hybrid Natural Gas Power Plant with Battery Energy Storage System Strategy was presented and discussed. An alternate time was offered on January 18th for staff that was unable to attend the first meeting.
3CE continued to provide support to City of Goleta, City of Santa Cruz, and City of San Luis Obispo Reach Code efforts. Ongoing engagement with City of Carpinteria to deliver Fleet Replacement Plan and Infrastructure Plans as part of Plan Your Fleet; City of Greenfield is just the latest under-resourced Member Agency to embark upon both Plan Your Fleet deliverables, a key goal of the program.
Enrollment Statistics
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
ARROYO GRANDE
BUELLTON
CAPITOLA
CARMEL
CARPINTERIA
DEL REY OAKS
GOLETA
GONZALES
GREENFIELD
GROVER BEACH
GUADALUPE
HOLLISTER
MARINA
MONTEREY
MONTEREY COUNTY
MORRO BAY
PACIFIC GROVE
PASO ROBLES
PISMO BEACH
SALINAS
SAN BENITO…
SAN JUAN BAUTISTA
SAN LUIS OBISPO
SAND CITY
SANTA BARBARA…
SANTA CRUZSANTA CRUZ…
SANTA MARIA
SCOTTS VALLEY
SEASIDE
SOLEDAD
SOLVANG
WATSONVILLE
CARE/FERA Enrollment by Community
Enrollment as of February 1, 2024
Member Community % of Eligible Accounts % of Eligible Load ARROYO GRANDE 94.83% 92.98%
BUELLTON 96.81% 94.52%
CAPITOLA 95.23% 97.82%
CARMEL 97.66% 97.60%
CARPINTERIA 95.71% 98.70%
DEL REY OAKS 95.74% 96.89%
GOLETA 95.29% 87.90%
GONZALES 87.62% 97.09%
GREENFIELD 88.08% 94.94%
GROVER BEACH 96.34% 95.72%
GUADALUPE 97.44% 99.11%
HOLLISTER 89.09% 91.75%
MARINA 93.77% 92.16%
MONTEREY 95.95% 95.00%
MONTEREY COUNTY 92.90% 92.76%
MORRO BAY 96.93% 95.42%
PACIFIC GROVE 96.73% 96.69%
PASO ROBLES 92.07% 85.41%
PISMO BEACH 95.58% 95.94%
SALINAS 90.18% 93.42%
SAN BENITO COUNTY 90.83% 94.48%
SAN JUAN BAUTISTA 91.35% 91.71%
SAN LUIS OBISPO 96.09% 97.22%
SAND CITY 93.20% 67.34%
SANTA BARBARA COUNTY 94.81% 80.30%
SANTA CRUZ 96.38% 94.78%
SANTA CRUZ COUNTY 95.04% 96.14%
SANTA MARIA 97.86% 91.62%
SCOTTS VALLEY 96.50% 94.62%
SEASIDE 94.33% 96.15%
SOLEDAD 88.83% 94.13%
SOLVANG 96.35% 96.07%
WATSONVILLE 91.02% 93.95%
Total Enrollment 93.40% 91.41%
Media Outreach
January 2024
Facebook
Followers: 1.8K
Page Reach: 1.2K
Page Impressions: 2K
Post Reach: 868
New page followers: 2
Link Clicks: 59
Top Performing Content: Congratulations to the City of Watsonville - City Gov't on its new Direct Current Fast Charging (DCFC) equipment! 3CE's Charge Your Fleet Program funded this project to help the city reduce greenhouse gas emissions, improve air quality, and accelerate electrification efforts along the Central Coast. The DCFC equipment will power an all-electric refuse hauler. Keep up the great work Watsonville! 🙌 Learn more about 3CE's Charge Your Fleet Program:
https://ow.ly/pYGY50QuYat
Facebook En Espanol
Followers: 165
Page Reach: 24
Page Impressions: 49
Instagram
Followers: 1.1K
New Followers: 18
Reach: 470
Top Performing Content: Checking out the "power" of progress at the world's largest battery storage facility, the Moss Landing Energy Storage Facility! 🔋 Operated by Vistra Corp, this behemoth boasts a capacity of 750 MW/3,000 MWh! Our tour emphasized the transformative role of energy storage solutions. The future of energy is here, and it's efficient and reliable. This peek under the hood at Moss Landing reminded us that innovative thinking and advanced tech redefine our relationship with energy.💡Thanks to @vistracorp for the eye-opening experience! 🙌 Join us in our mission for a sustainable
future. #cleanenergy #renewable #sustainability #energyrevolution #batte ries #batterystorage #batterystoragesolutions
Twitter (X)
Followers: 1.2K
New Followers: 24
Top Performing Content: New info on
the SunZia Wind Project.
@GErenewables will contribute 674
wind turbines to the project that will
provide more than 2.4 gigawatts (GW) of
power #renewables #cleanenergy
#sustainability
https://twitter.com/GErenewables/statu
s/1744708160726683853
LinkedIn
Followers: 2.2K
New Followers: 33
Post Clicks: 575
Top Performing Content: Central Coast Community Energy staff recently toured the Moss Landing Energy Storage Facility in Monterey County, operated by Vistra Corp. With an impressive capacity of 750 MW/3,000 MWh, it's the largest battery storage facility in the world! 🔋This tour revealed the industry's immense progress in energy storage solutions and its capacity to drive the global energy transition. Battery storage technology presents us with solutions that are beneficial for the environment and efficient and reliable, truly a game-changer in our quest for a sustainable future. Exploring Moss Landing Energy Storage Facility served as a reminder that innovation and cutting-edge technologies are reshaping how we generate, store, and distribute energy. Seeing how these advancements lay the foundation for a cleaner environment is exciting! To learn more about this facility, check out this
article: https://ow.ly/8RO050QpiI8. Also, big thanks to Vistra Corp. for the informative tour!#cleanenergy #renewables #sustainability #California Earned media:
KCSB-FM Radio- 3CE New Construction Electrification Program Ten Peaks Journal - Central Coast Community Energy and Silicon Valley Clean Energy Sign Contracts with Pattern Energy for Portions of 3,500+ MW SunZia Wind Project
CCCE Contracts < $200k
Vendor Total Engagement Amount From To Service Scope Remarks 1 TrattenPrice Consulting LLC $90,000 11/16/2023 10/15/2024 Assistance in developing of relationships and landscape of the state legislature, regulating bodies, influencers, policies, and future issues of interest related to 3CE's mission. 2 Robert Olson $13,812 3/31/2024 9/30/2024 San Luis Obispo Office agreement to extend the lease for a six month period.
Staff Report Item 13
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dennis Dyc-O’Neal, Chief Operating Officer SUBJECT: Approve and authorize the CEO to: (1) execute a Scheduling Coordination Agreement between 3CE and Tenaska Power Services Co., to provide scheduling services for operational 3CE clean and renewable projects, and any necessary ancillary agreements and documents, for an initial 33-month term through December 2026; and (2) extend the term for successive one (1) year terms
DATE: March 13, 2024
RECOMMENDATION:
This memorandum recommends the Operations Board approve and authorize the CEO to: (1) execute a Scheduling Coordinator Agreement between 3CE and Tenaska Power Services Co. (“TPS”), to provide scheduling services for operational 3CE clean and renewable projects, and any necessary ancillary agreements and documents, for an initial 33-month term through December 2026; and (2) extend the term for successive one (1) year terms.
BACKGROUND:
Scheduling Coordinator service providers serve as the official interface between a generating or energy storage facility with the California Independent System Operator (“CAISO”). CAISO requires all resources participating in the energy markets be scheduled through a certified scheduling coordinator who can directly bid or self-schedule resources (as well as handle energy settlements). The Scheduling Coordinator must meet all the requirements of the CAISO, such as having 24 hour/7 days a week scheduling desk in constant communications with CAISO.
3CE online generation resources (many of them joint projects with Silicon Valley Clean Energy) have been scheduled since May 2021, by zGlobal, Inc.
DISCUSSION/ANALYSIS:
Approving the TPS Scheduling Coordinator Services Agreement helps ensure that 3CE maximizes the value of our operating renewable PPAs within the CAISO energy markets.
With six operating renewable resources (two geothermal, one wind, and three solar + storage) and a new resource scheduled to come online in 2024, 3CE’s need for scheduling coordinator services has increased at a point that the industry expands its understanding of the complexity of operating and optimizing intermittent renewable resources along with hybrid and co-located storage assets.
That increased complexity and continually evolving compliance structures, as well as the need to ensure competitive pricing for 3CE customers, prompted 3CE) in collaboration with Silicon Valley Clean Energy) to issue a Request for Proposals (RFP) for scheduling coordinator services. Four established scheduling coordinator service providers submitted bids. A joint project team evaluated submitted bids on a quantitative and qualitative basis. TPS being selected.
TPS is a wholly owned subsidiary of Tenaska, an energy company headquartered in Omaha, Nebraska with several offices throughout North America. TPS is an established and proven provider of scheduling and settlement services for generation resources within CAISO, operating since 1997. TPS will be replacing our existing scheduling coordinator provider.
Under the proposed agreement, TPS will provide the following services for projects where 3CE holds scheduling coordinator responsibilities:
1. Scheduling of energy and other products into CAISO markets consistent with 3CE direction;
2. Facilitating scheduling changes as necessary;
3. Resource monitoring and communication coordinator regarding CAISO directives or instructions;
4. Outage scheduling services;
5. Shadow settlement services and analysis;
6. Filing of Resource Adequacy supply plans, and;
7. Additional support to facilitate scheduling services.
In coordination with the proposed TPS scheduling coordinator service agreement, 3CE has engaged STEM, Inc. to provide battery optimization services. Confirmation of the STEM, Inc. battery optimization agreement is on this Board’s agenda as a separate item.
Services are provided based on a start-up and fixed monthly fee for each resource. 3CE currently has three resources requiring the fulling scheduling coordinator services and four requiring monitoring services. As new resources begin generating, they can be incorporated into the proposed agreement.
FISCAL IMPACT:
3CE staff currently expect the costs to be the following:
Fiscal Year Expected Fees
23-24 $171,200
24-25 $262,224
25-26 $267,468
26-27 $272,818
$973,710
Actual costs under this agreement may change as the fee schedule is based on the number of resources receiving TPS services, as defined in the agreement.
Staff intend to manage and control costs under this agreement through the annual budget process.
CONCLUSION:
Approval of the proposed TPS scheduling coordinator services agreement will enable the economic and compliant operation of 3CE’s resources.
ATTACHMENT(S):
1. Scheduling Coordinator Services Agreement between 3CE and TPS
1 SCHEDULING COORDINATOR AGREEMENT
This Scheduling Coordinator Agreement (“Agreement”) is executed on March 13, 2024 (“Effective Date”) between Central Coast Community Energy, a California joint powers authority (“3CE”) and Tenaska Power Services Co. (“TPS”), a Nebraska corporation. 3CE and TPS are also hereinafter referred to in this Agreement individually as “Party” and collectively as the “Parties”.
This Agreement consists of and is governed by the Base Agreement and the General Terms and Conditions attached hereto, together with attached exhibits incorporated by reference in this Agreement.
RECITALS
WHEREAS, 3CE directly or indirectly owns, controls and/or has power purchase and energy storage agreements (“PPAs”) with generating facilities located within the CAISO and WECC markets as described further in Exhibit A hereto (the “Resource(s)”), and participates in the CAISO markets (the “Project”);
WHEREAS, TPS is in the business of providing Scheduling Coordinator services, including scheduling Energy, load, Capacity, Ancillary Services, and managing congestion revenue rights from generating facilities through the markets operated by CAISO; WHEREAS, 3CE desires TPS to provide certain Scheduling Coordinator Services and other services for the Resources and Services, as defined below and as set forth in this Agreement, in each case, in accordance with the terms and conditions as set forth herein; WHEREAS, TPS desires to perform certain Scheduling Coordinator Services and other services for the Resources and Services, in each case, on the terms and conditions as set forth herein;
NOW, THEREFORE, in consideration of the premises, together with other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Party, 3CE and TPS agree as follows:
BASE AGREEMENT
1. DESIGNATION
Except as provided in this Section 1, no Party will be an agent, partner, joint venturer, or legal representative of any other Party for any purpose whatsoever, and no Party is authorized to assume or create any obligation, liability, or responsibility, expressed or implied, on behalf of or in the name of any other Party, or to bind any other Party to any Third Party in any manner whatsoever; provided, however, that 3CE authorizes TPS to act, and TPS agrees to act, subject to the terms of this Agreement, as 3CE’s exclusive provider of the Services for the Resources.
The Parties shall conduct their respective duties, obligations, and operations related to this Agreement in accordance with the terms of this Agreement, the Governing Rules, and Prudent Industry Practice.
The relationship of 3CE, on the one hand, with TPS, on the other hand, as set forth in this Agreement is one of an independent contractor.
2 2. SCHEDULING COORDINATOR SERVICES
2.1 SCID Services. TPS has obtained, or shall promptly obtain upon execution of this Agreement, an SCID that will be unique to the Resources, and TPS represents and warrants that such SCID has not been previously used and shall not be used in connection with any other transactions or Resources. TPS shall use such SCID only in respect of Transactions for 3CE and the Resources, and not for any other transaction, Resources or purpose. TPS shall be responsible for satisfying the CAISO credit requirements under the Governing Rules, including posting all required security. TPS shall pass through to 3CE the actual SCID cost assessed by CAISO (“CAISO SCID Fee”) for such SCID.
The Parties understand and agree that it is 3CE’s intent to obtain 3CE’s own Scheduling Coordinator ID for 3CE’s use during the Term of this Agreement. To the extent necessary, TPS shall assist 3CE in facilitating the transition with the CAISO from the SCID obtained by TPS for 3CE’s Resources to 3CE’s own SCID. Furthermore, the Parties agree to cooperate in good faith to make necessary changes to this Agreement to accommodate this transition, provided however, such changes shall not include adjustments to the Fixed Monthly Fee for Services to be provided under this Agreement.
2.2 Scheduling. If the TPS Customer Portal is available, 3CE will utilize it to communicate desired Energy and Ancillary Services schedules for the DAM and Real-Time FMM scheduling cycles. Otherwise, a TPS developed scheduling spreadsheet template will be submitted by 3CE for the DAM and all Real-Time FMM scheduling cycles. TPS will provide, and 3CE grants TPS the authority to perform, scheduling services for the Resources in the role of 3CE’s Scheduling Coordinator in accordance with (i) the Governing Rules, (ii) Prudent Industry Practice, and (iii) instructions from 3CE. As part of its Scheduling Coordinator responsibilities under this Agreement, TPS will submit all Energy and Ancillary Services bids and offers consistent with the rules and regulations of CAISO and the directions of 3CE. TPS will schedule all output from the Resources consistent with each Resource’s operational and economic parameters as communicated to TPS by 3CE; provided, however, to the extent TPS determines in its reasonable discretion that the scheduling of Products from any Resource to a Third Party creates any TPS Credit Exposure, in excess of the 3CE Threshold, for which TPS is not sufficiently secured, then TPS shall not be required to continue scheduling such Products to a Third Party unless and until TPS receives sufficient Credit Support from 3CE to mitigate TPS’s Credit Exposure, in excess of the 3CE Threshold. Subject to the foregoing sentence, TPS will schedule all Transactions with the appropriate Third Parties, transmission providers, and balancing authorities, in accordance with this Agreement. 3CE will provide TPS all information relevant to or required by the Governing Rules in order to satisfy all relevant data and information required for participation in the CAISO markets. Such information will be provided to TPS in those time increments, quantities, duration, and terms in compliance with the Governing Rules.
Each component of 3CE’s offers (collectively and individually) shall, when provided to TPS, be in a form intended to satisfy the requirements of the Governing Rules. If TPS discovers that 3CE’s offers conflict with the requirements of the Governing Rules, TPS shall immediately notify 3CE thereof and shall coordinate with 3CE to modify 3CE’s offers to comply with such requirements. If offers cannot be modified, then TPS will have the right to reject 3CE’s offers to remedy any conflict therewith, and shall immediately notify 3CE thereof. 3CE will provide or make available to TPS all such information using the format, software, and communication format and specifications, and other technical criteria mutually agreed between the Parties. 3CE will provide TPS the necessary information at least two (2) hours prior to any applicable deadline specified under the Governing Rules. 3CE may, in lieu of providing specific offers to TPS, provide TPS
3 specific procedures and operating rules to be used by TPS to generate all or a portion of the offers. If 3CE does so, then TPS shall generate offers in accordance with such procedures and operating rules and submit such offers to the applicable CAISO markets in accordance with the Governing Rules.
2.3 Schedule Changes. Notwithstanding Section 2.2, 3CE may change information previously provided to TPS, provided any such change is provided to TPS no later than any applicable deadline specified under the Governing Rules. Provided that 3CE provides any such change in accordance with the deadlines provided within this Section 2.3, TPS will use commercially reasonable efforts to timely implement any such changes. In the event that any change timely provided to TPS differs from prior information for the same time period, such subsequent information, upon receipt by TPS, shall supersede the prior information, and TPS will rely upon and implement the most recent information when submitting such information to CAISO for 3CE. TPS shall promptly notify 3CE if it is unable to implement any changes provided by 3CE and provide explanation why TPS was not able to implement the changes and a mitigation plan that would enable TPS to implement the changes in the future.
2.4 24-Hour Monitoring. For Products delivered from the Resources to CAISO, TPS will administer and monitor sales to CAISO. TPS will provide 3CE with access to the CAISO Energy markets (including, without limitation, the Capacity bilateral markets) and the Services twenty-four (24) hours per Day, seven (7) Days per week, subject to market availability and operational limitations of the Resources. TPS will timely communicate with CAISO regarding the Resources and, as soon as practicable, inform 3CE of any and all CAISO directives or instructions affecting the Resources.
2.5 Outage Reporting. TPS will provide Outage scheduling services to 3CE, which will consist solely of relaying to CAISO, in such electronic data transmission format as is authorized by CAISO for the transmission of Outage information, all information furnished to TPS by 3CE concerning the Resources’ Outages and relaying to 3CE in a timely manner all electronic data received from CAISO concerning Outages at the Resources. TPS will transmit each Resource’s Outage data to CAISO within time periods specified for the transmission of such data under the CAISO Agreements. 3CE shall be responsible for furnishing such data required by the CAISO Agreements to TPS in sufficient time to permit TPS to comply with applicable timing requirements of the CAISO Agreements. If TPS’s Customer Portal is available, 3CE will utilize it to communicate Outage information.
Otherwise, 3CE shall provide the information to TPS in a template provided by TPS.
2.6 Shadow Settlement. TPS will use its proprietary data management and calculation engine, PowerTools Platform®©, to shadow settle all CAISO settlement statement versions regarding the Resources. TPS will analyze discrepancies found between TPS’s internally generated settlement statements and CAISO’s settlement statements. 3CE will provide TPS parameters for further investigation of such discrepancies and filing of disputes with CAISO. For discrepancies falling within 3CE’s parameters, TPS will file disputes with CAISO for 3CE, will manage these disputes with CAISO, and will regularly provide 3CE a status report on all filed disputes. TPS will also review all additional CAISO settlement statements to verify CAISO has made requested changes to prior statements and to verify the accuracy of any additional CAISO charges and credits.
2.7 RA Supply Plans. TPS will file Resource Adequacy supply plans, if any, with CAISO on behalf of 3CE and shall provide a copy of such plans to 3CE at the same time the plans are filed with CAISO.
4 2.8 Support Services. The Parties acknowledge and agree that TPS will be unable to commence providing the Services contemplated by this Agreement until all necessary registrations, acknowledgements, agreements and other documentation (“Documentation”) have been provided to and approved by CAISO to enable TPS to commence providing the Services. The period of time from the Effective Date of this Agreement until the Commencement Date is defined as the “Support Services Period”.
During the Support Services Period, 3CE and TPS shall each work diligently to ensure that all necessary Documentation is completed and necessary CAISO approvals are obtained expeditiously. 3CE shall notify TPS of the completion of all necessary Documentation and approvals. Subject to the terms of this Agreement and starting on the Effective Date, TPS shall provide to 3CE the services necessary to ensure the commencement of the Services, as such services are described in Exhibit C hereto (the “Support Services”). All Services under this Agreement (other than Support Services) will commence on the Commencement Date.
3. RESERVED
4. OPERATIONAL SERVICES
4.1 Schedule of Costs. The expectation is that the Resources will be economically bid into the CAISO market. 3CE will provide in writing to TPS information and instructions setting forth the bids for each Resource. If applicable, 3CE will also provide TPS information and instructions on Ancillary Services bids with respect to each Resource. 3CE will notify TPS in writing via the TPS provided template of any revisions to the operational and economic parameters for the bids. Any revision will only apply to Transactions entered into or agreed upon hereunder after receipt of such revisions by TPS.
4.2 Dispatch Instructions. The Parties acknowledge that from time to time, CAISO or a Governmental Authority may issue verbal instructions or orders to TPS affecting or requiring specific actions with respect to operation of the Resources (collectively, “CAISO Dispatch Instructions”). CAISO Dispatch Instructions will be communicated to 3CE following receipt of such by TPS. Based on the CAISO Dispatch Instructions, TPS shall communicate to 3CE the quantities of Energy (or any other Product) to generate or provide, or to cease generating or providing, and the time period during which such instructions are to be followed, and 3CE shall endeavor to cause the applicable Resource to promptly comply with such instructions consistent with the operational limitations of such Resource, as appropriate; provided that, if in the sole and reasonable judgment of 3CE, such compliance would create a threat to safety, risk of bodily harm or damage to equipment, or is not otherwise in compliance with the CAISO Agreements, 3CE will notify TPS immediately of the reason for non-compliance and TPS will communicate such reason to CAISO in accordance with the CAISO Agreements. TPS shall not be liable to 3CE for any damages resulting from compliance or non-compliance with any CAISO Dispatch Instruction except to the extent any non-compliance is directly attributable to TPS’s (i) breach of this Agreement (ii) failure to comply with such CAISO Dispatch Instruction, (iii) failure to timely provide notice of such CAISO Dispatch Instruction to 3CE, or (iv) incorrect communication to 3CE of the details of such CAISO Dispatch Instruction; provided, however, that any payment required shall remain subject to the limitation of liability in Section 10.2 of the General Terms and Conditions.
5. PAYMENTS
5.1 Set-Up Fee. TPS shall charge 3CE a one-time fee for establishing and configuring the telemetry and other communication equipment and software linking the Resources to TPS (and to CAISO where applicable) and for provision of the Support Services described in
5 Exhibit C (“Set-Up Fee”). The Set-Up Fee shall equal to twenty thousand Dollars ($20,000) for the Resources identified in Exhibit A. Any Resource which 3CE may request to be added to Exhibit A after the Effective Date shall be subject to TPS’s approval, an additional Set-Up Fee negotiated between the Parties, and an amendment to this Agreement.
5.2 Fixed Monthly Fee. For performance of the Services described herein, 3CE shall pay TPS a monthly fee equal to the amount listed for the corresponding Resource in Exhibit A (“Fixed Monthly Fee”) in arrears and prorated for any partial Month of Service, beginning on the Resource Commencement Date and continuing throughout the Term; provided that the Fixed Monthly Fee shall increase by the Escalator on the first day of the Month of each anniversary of the Commencement Date. Any Resource requested by 3CE for addition to Exhibit A after the Effective Date shall be subject to an additional Fixed Monthly Fee negotiated between the Parties and memorialized in an amendment hereto.
5.3 Pass Through Amounts and Reimbursements. Except when specified otherwise under this Agreement, 3CE shall pay TPS all Pass Through Amounts in accordance with this Agreement. TPS shall pass through to 3CE all settlement amounts it receives from CAISO for 3CE’s Products in accordance with Section 6.1 of the General Terms and Conditions.
Notwithstanding anything to the contrary, no amounts shall be recovered twice pursuant to this Agreement.
6. TERM
(a) All Services and the obligation to pay fees under this Agreement, other than the Support Services and the Set-Up Fee, respectively, shall be effective as of the Commencement Date unless provided otherwise in this Agreement. All other terms, provisions, and obligations, including the Support Services, the Set-Up Fee, and associated Pass Through Amounts, shall be effective as of the Effective Date of this Agreement. This Agreement shall have a primary term beginning on the Commencement Date and expiring at 11:59:59 p.m. PPT on December 31, 2026 (the “Initial Term”). Upon expiration of the Initial Term, this Agreement shall then automatically renew and extend for successive one (1) year terms (each a “Renewal Term”) unless either Party provides written notice of non-renewal to the other Party no later than sixty (60) Days prior to the expiration of the Initial Term or any Renewal Term (as applicable).
(b) Transition of Scheduling Coordinator Services.
(i) If an Event of Default or Force Majeure occurs and is continuing with respect to TPS, TPS shall cooperate in good faith with 3CE and promptly execute all documents and take all other reasonable steps requested by 3CE that may be required or reasonably necessary to transition the Scheduling Coordinator function from TPS to 3CE’s designee. Without limiting the generality of the foregoing, TPS hereby agrees that 3CE has the power and right, without notice to or assent by TPS, upon the occurrence and during the continuation of any Event of Default or Force Majeure (or any other event that pursuant to the express provisions hereof allows 3CE to replace TPS as 3CE’s Scheduling Coordinator), to execute all documents and take all other reasonable steps which may be required or reasonably necessary to transition the Scheduling Coordinator Services from TPS to 3CE’s designee. TPS agrees that any request by 3CE that TPS take any action pursuant to this Section 6(b), and any action taken by 3CE pursuant to this Section 6(b), shall not constitute a breach of any
6 obligation in this Agreement that TPS be the exclusive provider of any Services. Subject to Section 13 of the General Terms and Conditions, to the extent a Force Majeure with respect to TPS ceases to exist, then 3CE may elect to transition the Scheduling Coordinator Services from 3CE’s designee back to TPS. If the Scheduling Coordinator Services are transitioned to 3CE’s designee due to an Event of Default with respect to TPS and 3CE does not terminate this Agreement in accordance with Section 11 of the General Terms and Conditions, the Parties shall cooperate in good faith to transition the Scheduling Coordinator Services from 3CE’s designee back to TPS at such time as such Event of Default is cured by TPS or otherwise ceases to exist. This Section 6(b) shall survive the expiration or earlier termination of this Agreement. (ii) If TPS ceases to be the Scheduling Coordinator for the Resources and other Transactions due to the expiration or earlier termination of this Agreement or any other reason, or if TPS is performing the Scheduling Coordinator Services solely pursuant to the application of Section 6(c) of the Base is Agreement, TPS shall cooperate with 3CE’s requests to transition the Scheduling Coordinator Services and other Services hereunder (including executing any consents or documents and taking all other steps as may be required under the CAISO Agreements or as 3CE may otherwise reasonably request to remove TPS as Scheduling Coordinator for the Resources), and 3CE shall be responsible for notifying CAISO, the CPUC, and any Third Parties, as applicable, involved or relating to this Agreement, of the removal of TPS as 3CE’s Scheduling Coordinator for the Resources. In the event that, after the expiration or earlier termination of this Agreement, TPS receives statements or invoices from CAISO or other Third Parties related to 3CE or pertaining to the Resources or any Transactions, as outlined in Section 6.1 of the General Terms and Conditions, TPS shall pass through charges reflected in those statements or invoices to 3CE and 3CE shall be responsible for payment.
This Section 6(b) shall survive termination of this Agreement. (c) Notwithstanding anything to the contrary in any provision of this Agreement, but without limiting the Parties’ obligations under Section 6(b) of the Base is Agreement, if, on the date this Agreement would expire or otherwise terminate, CAISO’s system still recognizes TPS as the Scheduling Coordinator for the Resources, then the Term of this Agreement shall be deemed to continue (and the terms of this Agreement shall survive) until the date that CAISO confirms in its system that TPS is no longer the Scheduling Coordinator for the Resources. (d) Termination for Performance. If at any time a Party believes the performance of the other Party under this Agreement is deficient, such Party has the right to provide the other Party with written notice of the performance deficiency, along with a description of the performance deficiency (“Notifying Party”). Upon receipt of such notice of performance deficiency, the Party receiving notice (“Notified Party”) shall have thirty (30) Days to correct such performance deficiency and within seven (7) Days from receipt of the notice to provide a written description to the Notifying Party of the remedial actions taken or to be taken to restore or improve the quality of performance, including by addressing the areas of performance identified in the notice. If the Notified Party fails within such thirty (30) Days to restore the quality of performance to a level deemed satisfactory to the Notifying Party in such Party’s reasonable discretion, such Party shall have the right, following expiration of the thirty (30) Day remediation period, to terminate this
7 Agreement by providing thirty (30) Days’ written notice to the Notified Party and designating a termination date (“Termination for Performance”). Within thirty (30) Days following the effective date of any such Termination for Performance, each Party will pay to the other Party the sum of all amounts that are owed for activity performed prior to such effective date, but no additional termination fee will be owed. For the avoidance of doubt, (a) the rate or amount of fees for Services payable under Section 5 of the Base Agreement or (b) the experience of lower than desired revenues received by 3CE for sales of Products where such lower revenues result from general market conditions, rather than caused by the performance of a Party, shall not be grounds for invoking a Termination for Performance. The obligations in this Section shall survive the expiration or earlier termination of this Agreement.
(e) For the avoidance of doubt, from and after the Effective Date and for the duration of the Term, no Party shall have any right to terminate this Agreement early or otherwise exercise a non-renewal of this Agreement except to the extent expressly permitted under the terms of this Agreement or as otherwise mutually agreed by the Parties in writing.
8 WITNESS that the Parties have executed this Agreement effective as of the Effective Date.
CENTRAL COAST COMMUNITY ENERGY
By: _________________________________
Name: Robert M. Shaw
Title: Chief Operating Officer
Approved As to Form:
By: _________________________________
Name: Charles McKee
Title: 3CE General Counsel
TENASKA POWER SERVICES CO.
By: _________________________________
Name: ______________________________
Title: _______________________________
9 GENERAL TERMS AND CONDITIONS
SECTION 1
DEFINITIONS
As used in this Agreement and any amendments hereto, and in addition to other terms elsewhere defined in this Agreement, each of the following terms shall have the indicated meanings; provided, however, capitalized terms not otherwise defined herein shall have the same meanings defined in the Governing Rules.
“3CE” shall have the meaning set forth in the preamble of the Agreement. “3CE Threshold” means four million Dollars ($4,000,000); provided, however, that if a Material Adverse Change has occurred and is continuing with respect to 3CE then the 3CE Threshold will be zero ($0).
“Affected Party” has the meaning given that term in Section 8.3 of the General Terms and Conditions.
“Affiliate” means, with respect to any Person, (i) any other Person, directly or indirectly, controlling, controlled by, or under common control with such Person, or (ii) any other Person under the joint control, directly or indirectly, of such Person. As used in this definition, the term “control” and similar terms shall mean the ownership of more than fifty percent (50%) of the voting securities of such Person or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, through ownership of voting securities, by contract or otherwise.
“Agreement” has the meaning assigned to such term in the preamble of this Agreement. “Ancillary Services” has the meaning given that term in the CAISO Agreements. “Applicable Laws” means any act, statute, law, regulation, permit, license, ordinance, rule, judgment, order, decree, directive, guideline, or policy (to the extent mandatory) or any similar form of decision or determination by, or any interpretation or administration of, any of the foregoing by any Governmental Authority with jurisdiction over the Resources, TPS, 3CE, or the Services to be performed under this Agreement.
“Assessments” has the meaning set forth in Section 8.3 of the General Terms and Conditions. “Business Day” means any Day other than a Saturday, Sunday, or Day on which Federal Reserve member banks in New York are closed for business. “Business Hours” shall mean the consecutive hours from 8:00 a.m. to 5:00 p.m. Central Prevailing Time on Business Days.
“CAISO” means the California Independent System Operator Corporation or any successor thereto.
“CAISO Agreements” means CAISO Tariff, CAISO Business Practice Manuals and any other applicable CAISO bylaws, procedures, rules, manuals or documents, or any successor, superseding or amended versions thereof that may take effect from time to time. “CAISO Business Practice Manuals” shall mean the Business Practice Manuals published by CAISO, as amended, restated, supplemented, or otherwise modified from time to time.
10 “CAISO Dispatch Instructions” shall have the meaning given that term in Section 4.2 of the Base Agreement.
“CAISO SCID Fee” has the meaning given that term in Section 2.1 of the Base Agreement. “CAISO Tariff” shall mean the California Independent System Operator Corporation Fifth Replacement FERC Electric Tariff, effective April 1, 2022, as amended from time to time, including any schedules, appendices or exhibits attached thereto. “Capacity” means any capacity used to meet reliability requirements or the ability to generate and provide or deliver a Product, and includes the meaning defined in the Governing Rules. “Commencement Date” means the later of (i) the Effective Date, or (ii) the date upon which TPS receives notice that CAISO authorizes TPS to commence representing the first Resource identified on Exhibit A within CAISO’s system.
“Confidential Information” has the meaning given that term in Section 14.1(a) of the General Terms and Conditions.
“Central Prevailing Time” or “CPT” shall mean standard time or daylight saving time, as applicable to the central time zone of the United States. “CPUC” means the California Public Utilities Commission (or any successor thereto that regulates public utilities in California).
“Credit Exposure” shall mean the net amount one Party would owe the other Party if all Transactions and Services between the Parties under this Agreement were closed out and terminated, and all obligations under this Agreement were accelerated and netted against amounts the other Party would owe such Party on the date of credit calculation to derive the amount of credit exposure faced by one Party to the other Party or a Third Party. This calculation will include amounts owed for delivered Products or Services whether billed or unbilled, the forward value of committed but undelivered Products taking into account deviations in the current market value of a Product from the value or price of such Product prevailing at the time a Transaction was entered into, or prevailing at the time such Product was offered into CAISO, the forward value of amounts owing to or from CAISO for estimated future settlement obligations and revisions, and any fees for Services due and owing under this Agreement. “Credit Support” shall mean cash, pre-payments, letters of credit, and, if acceptable to the requesting Party, may include guarantees or other reasonable forms of security. “Daily Schedule” shall have the meaning given that term in Section 3.2(a) of the General Terms and Conditions.
“Damages Cap” has the meaning given that term in Section 10.2 of the General Terms and Conditions.
“Day” shall mean a calendar day.
“Day-Ahead” has the meaning given that term in the CAISO Agreements. “Day-Ahead Market” or “DAM” has the meaning given that term in the CAISO Agreements. “Defaulting Party” has the meaning given that term in Section 11.2 of the General Terms and
11 Conditions.
“Delivery Point” shall mean the physical point(s) where 3CE delivers Products, which in a typical Transaction shall be the point(s) at which the electric interconnection facilities utilized to meter and financially settle the delivery of Products from the Resources, meet with the high voltage side of the physical interconnection between the Resources and the applicable transmission service provider. For a specific Transaction, the Parties may agree to any Delivery Point that is a defined point at which financial settlement may occur within the CAISO region. “Documentation” has the meaning set forth in Section 2.8 of the Base Agreement. “Due Date” means the tenth (10th) Day after 3CE’s receipt of TPS’s invoice; provided, however, if such Day is not a Business Day, the next Business Day. “Effective Date” has the meaning given in the Preamble of the Agreement. “Energy” has the meaning given the term in the CAISO Agreements. “Energy Imbalance Market” or “EIM” has the meaning given the term in the CAISO Agreements. “Escalator” shall equal the greater of (i) the percentage change in the Consumer Price Index for Urban Areas or “CPI-U” published by the U.S. Department of Labor and applicable for the twelve (12) consecutive Months ending prior to the first Day of the Month in which the Commencement Date occurs each year during the Term, from the annual average CPI-U prevailing for the prior twelve (12) consecutive Month period, or (ii) two percent (2.0%). “Event of Default” has the meaning set forth in Section 11.1 of the General Terms and Conditions.
“FERC” means the Federal Energy Regulatory Commission or any successor thereto. “Fifteen-Minute Market” or “FMM” has the meaning as defined in the CAISO Agreements. “Fixed Monthly Fee” has the meaning set forth in Section 5.2 of the Base Agreement. “Force Majeure” has the meaning set forth in Section 13.1 of the General Terms and Conditions. “Governing Rules” shall mean all applicable CAISO Agreements and any applicable rules and/or directives of CAISO, the CPUC, NERC, FERC or any successor thereto, as the same may be amended from time to time.
“Governmental Authority” shall mean any federal, state or local government, court of competent jurisdiction, administrative agency or commission or other governmental or regulatory instrumentality, agency, authority or authorized arbitral body thereof, including without limitation, CAISO, the CPUC and the NERC.
“Imaged Agreement” has the meaning set forth in Section 16.12 of the General Terms and Conditions.
“Initial Term” has the meaning set forth in Section 6(a) of the Base Agreement. “Interest Rate” means, for any date, the lesser of (i) the per annum rate of interest equal to the “Prime Rate” as may from time to time be published in The Wall Street Journal under “Money
12 Rates” on such Day (or if not published on such Day, on the most recent preceding Day on which published), plus two percent (2%) or (ii) the maximum rate permitted by Applicable Law. “Inter-SC Trade” has the meaning given the term in the CAISO Agreements. “Material Adverse Change” means, with respect to a Party, or The Tenaska Guarantors, as applicable, the occurrence of one or more events which, in the commercially reasonable judgement of the other Party, constitutes a material adverse change in the creditworthiness, financial liquidity, access to capital, financial responsibility or ability of the Party or the Tenaska Guarantors to perform their obligations under this Agreement or the Tenaska Guaranty, as applicable.
“Month” means a calendar month.
“MW” means one megawatt.
“MWh” means one megawatt/hour.
“NERC” means the North American Electric Reliability Corporation or any successor thereto. “Non-Defaulting Party” shall have the meaning set forth in Section 11.2 of the General Terms and Conditions.
“Notified Party” shall have the meaning set forth in Section 6(d) of the Base Agreement. “Notifying Party” shall have the meaning set forth in Section 6(d) of the Base Agreement. “Outage” shall have the meaning given the term in the CAISO Agreements and shall also include any Forced Outage, Approved Maintenance Outage, Maintenance Outage (as each such term is defined in the CAISO Agreements), or decrease in capacity or output at any Resource, whether or not caused by an event of Force Majeure, resulting in interruption, curtailment, reduction, or cessation of the production or provision of Products from the Resource. “Party” or “Parties” has the meaning set forth in the Recitals. “Pass Through Amounts” shall mean, without duplication, all actual, direct Third Party costs incurred by TPS; all charges assessed against TPS by CAISO or any other Governmental Authority and payable by TPS; all credits received by TPS from CAISO; and, to the extent expressly stated to be a Pass Through Amount herein, amounts payable to any other Third Party; provided, in each case, that such costs and charges are directly allocable to TPS’s performance of the Services in accordance with the terms of this Agreement and are directly allocable to Services performed for the Resources, excluding TPS’s cost of (i) providing any Credit Support to 3CE; (ii) any Credit Support provided to CAISO; or (iii) doing business in CAISO generally.
Except with respect to Pass Through Amounts related to CAISO, transmission costs and any charges assessed or imposed by any Governmental Authority, TPS shall use commercially reasonable means to obtain the prior approval of 3CE before incurring any other Third Party costs or charges that are to be passed through to 3CE as Pass Through Amounts. “Permit” means, unless otherwise provided in this Agreement, any approval, waiver, exemption, variance, franchise, permit, authorization, license, or similar order of or from any federal, state, county, municipal, or other governmental body, instrumentality, agency, authority, or court having jurisdiction over the matter in question.
13 “Permitted Termination” has the meaning set forth in Section 8.6 of the General Terms and Conditions.
“Person” means an individual, corporation, voluntary association, joint stock company, business trust, partnership, limited liability company, municipality (including any municipal electric board, cooperative, power utility, agency, or subdivision), rural electric cooperative, or other entity. “Pledgor” shall have the meaning set forth in Section 7.6(c) of the General Terms and Conditions. “PowerTools Platform®©” shall have the meaning as set forth in Section 2.6 of the Base Agreement.
“PPA(s)” shall mean Power Purchase Agreements, each as further described in Exhibit B of this Agreement.
“PPT” means the standard time or daylight saving time, as applicable to the Pacific time zone of the United States.
“Pricing Node” or “PNode” has the meaning given that term in the CAISO Agreements. “Proceedings” has the meaning given that term in Section 16.3 of the General Terms and Conditions.
“Product(s)” means Capacity, Energy, and Ancillary Services from the Resources that are scheduled in the CAISO markets under this Agreement (collectively and individually). “Project” shall have the meaning given that term in the Recitals. “Prudent Industry Practice” means, in respect of the performance under this Agreement, the practices, methods, techniques, standards and acts that, at the time of the performance under this Agreement, are then engaged in or approved by a significant portion of the independent power production industry and that, in the exercise of reasonable judgment in light of the facts known at the time of performance, would have reasonably been expected to accomplish the desired results.
Prudent Industry Practice is not intended to be limited to the optimum practices, methods, techniques, standards and acts to the exclusion of all others, but rather reflect the range of the practices, methods, techniques, standards and acts then generally accepted in the CAISO market, having due regard for, among other things, contractual obligations, Applicable Laws, Permits, and the Governing Rules.
“Real-Time” has the meaning as defined in the CAISO Agreements. “Recording” has the meaning as set forth in Section 16.10 of the General Terms and Conditions. “Renewal Term” has the meaning set forth in Section 6(a) of the Base Agreement. “Representatives” means each Party’s respective directors, officers, and employees, including, without limitation, attorneys, accountants, partners, and consultants. “Resource” or “Resource(s)” shall have the meaning set forth in the Recitals to this Agreement. “Resource Commencement Date” means the date upon which TPS receives notice that CAISO authorizes TPS to commence representing each of the Resources identified on Exhibit A within CAISO’s system.
14 “Responsible Party” has the meaning given that term in Section 8.3 of the General Terms and Conditions.
“Resource Adequacy Capacity” or “RA” means Resource Adequacy Capacity as further defined in the CAISO Agreements or by the CPUC. Resource Adequacy Capacity may have system, local and/or flexible attributes as determined by the CPUC and CAISO and as specified by 3CE. “Scheduling Coordinator” has the meaning given the term in the CAISO Agreements. “SCID” means, for purposes of this Agreement, the Scheduling Coordinator ID assigned to TPS by CAISO in which the Resources reside.
“Secured Party” shall have the meaning set forth in Section 7.6(c) of the General Terms and Conditions.
"Service Fees” means, with respect to a Month, the Fixed Monthly Fee. “Services” shall mean, collectively, all Scheduling Coordinator services required under the Governing Rules for the Resources and provided pursuant to this Agreement, including the obligations set forth in Section 2 of the Agreement and Sections 2 and 6 of the General Terms and Conditions, Operational Services pursuant to Section 4 of the Base Agreement, Support Services, and any other services that TPS and 3CE have expressly agreed to under this Agreement.
“Set Point” has the meaning given the term in the CAISO Agreements. “Set-Up Fee” has the meaning set forth in Section 5.1 of the Base Agreement. “Settlement Process” has the meaning set forth in Section 7.7 of the General Terms and Conditions.
“Support Services” has the meaning set forth in Section 2.8 of the Base Agreement. “Support Services Period” has the meaning set forth in Section 2.8 of the Base Agreement. “TEH” shall have the meaning set forth in Section 7.6(a) of the General Terms and Conditions. “TEI” shall have the meaning set forth in Section 7.6(a) of the General Terms and Conditions “Tenaska Guarantors” shall have the meaning set forth in Section 7.6(a) of the General Terms and Conditions
“Tenaska Guaranty” shall have the meaning set forth in Section 7.6(a) of the General Terms and Conditions
“Term” shall mean the period commencing on the Effective Date through and including the expiration of the Initial Term and any Renewal Term, as applicable, subject in all cases to any early termination of the Agreement as permitted herein and subject to Section 6(c) of the Base Agreement.
“Termination for Performance” shall have the meaning set forth in Section 6(d) of the Base Agreement.
“Third Party” shall mean any Person other than 3CE or TPS.
15 “TPS Customer Portal” means the internet site designated by TPS which provides access to public and 3CE-specific information and a means to transmit certain information from 3CE to TPS. “Transaction” means a particular transaction relating to the scheduling, delivery, sale, and/or purchase of a Product, as applicable.
“WECC” means the Western Electricity Coordinating Council. “Weekly Payment Procedure” has the meaning given that term in Exhibit D. “Weekly Statement” has the meaning given that term in Exhibit D.
The terms defined above have the meanings set forth above for all purposes, and such meanings are equally applicable to both the singular and plural forms of the terms defined. "Include," "includes" and "including" shall be deemed to be followed by "without limitation" whether or not they are in fact followed by such words or words of like import. Any agreement, instrument, document, rule or law defined or referred to herein means such agreement, instrument, document, rule or law as from time to time amended, modified or supplemented. References to a Person include its successors and permitted assigns. "Hereof," "herein," "hereunder" and comparable terms refer, unless otherwise expressly indicated, to the entire agreement or instrument in which such terms are used and not to any particular Article, Section or other subdivision thereof or attachment thereto. References in an instrument to "Article," "Section" or another subdivision or to an attachment are, unless the context otherwise requires, to an article, section or subdivision of or an attachment to such agreement or instrument. All references to exhibits or appendices in any agreement or instrument that is governed by this Agreement are to exhibits or appendices attached to such instrument or agreement. References to any gender include, unless the context otherwise requires, references to all genders. References to "$" or to "Dollars" or to “Cents” shall mean the lawful currency of the United States of America.
SECTION 2
PERFORMANCE OBLIGATIONS
2.1 Commencement. 3CE and TPS shall use commercially reasonable efforts to complete and submit any and all Documentation and fulfill any other steps required by CAISO, authorizing TPS to act as 3CE’s Scheduling Coordinator in order to provide Services for the Resources in accordance with the terms herein and applicable Governing Rules.
TPS’s obligations to perform Services under this Agreement other than Support Services shall not commence until the Commencement Date.
2.2 TPS as Scheduling Coordinator and Principal.
(a) To the extent necessary to fulfill TPS's obligations as Scheduling Coordinator hereunder for Products to which title is held by 3CE, 3CE authorizes TPS to convey title to such Products on behalf of 3CE. All revenues associated with such Products delivered to CAISO are the property of TPS, and upon TPS receiving revenues from CAISO associated with such Products delivered to or settled with CAISO, TPS shall have an obligation hereunder to pay 3CE all revenues associated with such delivered or settled Products as paid by CAISO to TPS in accordance with Section 7 of the General Terms and Conditions. All such Transactions transacted and settled with CAISO will be memorialized pursuant to the terms of Section 2.6 of the General Terms and Conditions. Notwithstanding the foregoing, all such Products must be capable of being purchased and resold under TPS’s market-based rate authority with FERC; in the event TPS is precluded
16 from selling a particular Product under its market based rate authority, as to that Product, TPS will act as 3CE’s representative in arranging for the sale of such Product.
(b) For the avoidance of doubt, TPS, in its role as 3CE’s Scheduling Coordinator for the Resources hereunder, shall schedule all of 3CE’s Transactions associated with the Resources which require scheduling with CAISO for 3CE subject to and in accordance with this Agreement.
2.3 Standard of Performance. TPS will perform the Services in a timely, good, workmanlike and commercially reasonable manner and in accordance with (i) the Governing Rules and Applicable Law, (ii) Prudent Industry Practice, (iii) instructions from 3CE, and (iv) the terms of this Agreement.
2.4 Exclusivity. For the Resources, subject to the terms and conditions of this Agreement, 3CE grants TPS the exclusive right during the Term to:
(a) act as 3CE’s provider of Services such that,
(i) the Resources designated in Exhibit A will be solely represented by TPS as Scheduling Coordinator;
(ii) 3CE will schedule all Products through and with TPS; and (iii) during the term of this Agreement, 3CE will not schedule Products related Ito the Resources directly with CAISO, or through any other Person except TPS, as long as there is no Force Majeure event or Event of Default that has occurred and is continuing with respect to TPS;
(b) serve as 3CE’s representative, limited to the purpose of representing 3CE as the Scheduling Coordinator for the Resources in communications with CAISO, as provided under Section 2 of the Base Agreement; and
(c) schedule the Products per 3CE’s instruction described in this Agreement; and (d) administer the purchase or sale of Products from the Resources into CAISO in accordance with the terms and conditions of this Agreement and the Governing Rules.
2.5 Reserved.
2.6 Reports. To the extent TPS is purchasing or selling Products from or pertaining to the Resources, in order to transact and settle such Products with CAISO pursuant to Section
2.2(a) of these General Terms and Conditions and upon 3CE’s request, TPS shall deliver a report to 3CE in a mutually agreed format, containing the provisions of such Transaction(s), including the type of Product and the quantity thereof that TPS has sold or purchased. The Parties agree that TPS’s provision of this report will be deemed to be a confirmation of Transactions entered into pursuant to Section 2.2(a) of these General Terms and Conditions.
2.7 Regulatory Reporting. TPS will reasonably assist 3CE in data collection for 3CE’s regulatory reporting obligations upon 3CE’s request. 3CE will be responsible for required state, federal or regional reports applicable to its licenses and business interests. For clarification, nothing herein shall obligate TPS to prepare or submit any regulatory or
17 governmental reports for 3CE; provided, however, that TPS shall timely provide to 3CE all information in its possession that is reasonably requested by 3CE for 3CE’s regulatory or governmental reports. For clarification, TPS will provide 3CE with transaction details in its possession in a format readily usable by 3CE to submit its FERC Electric Quarterly Reports (“EQR”).
SECTION 3
OPERATIONAL ISSUES
3.1 Resource Information. To the extent applicable to the Resources, 3CE will provide or cause to be provided to TPS the following information:
(a) all CPUC, CAISO and/or EIM registration and system modeling information required for the provision of Services applicable to the Resources, including but not limited to information relating to the CAISO and/or EIM network model, as soon as reasonably practicable after the Effective Date; and (b) all relevant parameters, Real-Time data telemetry point map, Delivery Point(s), and Pricing Node(s), each as applicable to each Resource and as may be required by the Governing Rules, along with any other information about the Resources that 3CE reasonably believes would be helpful for TPS to know or that TPS reasonably requests in connection with the Services provided under this Agreement. TPS will provide assistance to 3CE to identify required information. 3CE will use good faith efforts to, as soon as practicable, provide TPS with any and all applicable additions or changes to the above information required for the provision of Services. TPS may rely on the most recent information 3CE has supplied to TPS.
Resources may only be added to or removed from this Agreement through a written amendment of this Agreement executed by the Parties.
3.2 Daily Schedule of Sales Commitments and Products Availability. (a) If applicable, two hours prior to the deadline specified in the Governing Rules for Day-Ahead Market submissions on each Day, or sooner if practicable, 3CE will provide or cause to be provided to TPS a written schedule (the “Daily Schedule”) setting forth 3CE’s next Day’s hourly expected quantity of Products available from the Resources based on anticipated operational requirements and the level of 3CE’s participation in the CAISO market. The Daily Schedule will also describe the nature and expected duration of any scheduled or unscheduled limitations of each Resource, or any Resource maintenance requirements, that have not previously been communicated for the Day on which the Daily Schedule is received, or any succeeding Day.
(b) In addition to providing TPS with the Daily Schedule, throughout each operating Day, 3CE must provide or cause to be provided to TPS updates on 3CE’s ability to sell Products when and if such information changes materially from that information previously communicated to TPS by 3CE. These updates will be provided via a mutually agreed upon template sent electronically or over the phone or such other means as mutually agreed by the Parties. If updates occur over the phone, 3CE will make commercially reasonable efforts to send the template with the updated information as soon as is practicable, and TPS will make commercially reasonable efforts to submit the schedule.
18 SECTION 4
INSURANCE
4.1 Insurance Requirements. Prior to commencement of this Agreement, TPS shall provide a “Certificate of Insurance” certifying that coverage as required herein has been obtained.
This verification of coverage shall be sent to 3CE.
4.2 Minimum Limits. Without limiting TPS’s duty to defend and indemnify, TPS shall maintain in effect throughout the term of this Agreement a policy or policies of insurance with the following minimum limits of liability:
(a) Commercial General Liability Insurance, including but not limited to premises and operations, including coverage for Bodily Injury and Property Damage, Personal Injury, Contractual Liability, Broad form Property Damage, Independent Contractors, Products and Completed Operations, and cross-liability with a combined single limit for Bodily Injury and Property Damage of $1,000,000 per occurrence, and $2,000,000 in the aggregate. Such requirement may be met through any combination of primary and excess policies.
(b) Business Automobile Liability Insurance, covering all motor vehicles, including owned, leased, non-owned, and hired vehicles, used in providing services under this Agreement, with a combined single limit for Bodily Injury and Property Damage of $1,000,000 per occurrence.
(c) Workers’ Compensation Insurance, if TPS employs others in the performance of this Agreement, in accordance with California Labor Code section 3700 and with Employer’s Liability limits of $1,000,000 each person, $1,000,000 each accident and $1,000,000 each disease.
4.3 Term of Insurance. Unless otherwise specified by this Agreement, all such insurance shall be written on an occurrence basis, or, if the policy is not written on an occurrence basis, such policy with the coverage required herein shall continue in effect for a period of two (2) years following the date TPS completes its performance of services under this Agreement.
4.4 Additional Insureds. Commercial general liability and automobile liability policies shall include 3CE, its directors, board members, officers, agents, and employees as Additional Insureds with respect to liability arising out of TPS’s work, including ongoing and completed operations, and shall further provide that such insurance is primary insurance to any insurance or self-insurance maintained by 3CE and that the insurance of the Additional Insureds shall not be called upon to contribute to a loss covered by the TPS’s insurance.
SECTION 5
EQUIPMENT AND DATA TRANSMISSION
5.1 Data Transmission. The Parties agree that 3CE will send or cause to be sent telemetered data directly to CAISO and communicate required telemetered data from and to the Resources. 3CE shall continually transmit, or cause to be continually transmitted, operational Resource data to TPS on a Real-Time basis as required by the Governing Rules.
5.2 Communication Cost. 3CE shall provide TPS with access to all applicable CAISO communication systems available to 3CE, as necessary for TPS to provide 3CE with
19 Services described in this Agreement or as may be required by the Governing Rules. 3CE shall reimburse TPS for all additional reasonable Third Party costs or expenses incurred by TPS for equipment or facilities located at 3CE’s site and/or directly and solely related to providing communications to the Resources or to adjust for changes in (i) CAISO or NERC communication criteria or standards, or (ii) communication technology implemented by 3CE during the Term to the extent TPS’s provision of additional equipment or facilities have been authorized by 3CE, all of which shall be passed through to 3CE as Pass Through Amounts under this Agreement. Prior to incurring any such Third Party costs subject to reimbursement by 3CE, TPS shall provide 3CE with an estimate of and explanation of the need for such costs and obtain 3CE’s approval for such costs, which shall not be unreasonably withheld. For such communication costs, TPS will invoice 3CE for such Pass Through Amounts in accordance with Section 7.1 of the General Terms and Conditions, providing 3CE with supporting details from TPS’s invoices from Third Party communications providers or vendors. Included in communications costs reimbursable by 3CE are any incremental costs applicable to CAISO WAN costs attributable to 3CE that are supported by cost documentation from CAISO.
SECTION 6
SETTLEMENTS AND PASS THROUGH AMOUNTS
6.1 CAISO Settlements; Pass Through Amounts. TPS will administer all settlement charges and payments with CAISO related to the scheduling of the Products in the CAISO markets and Third Parties, as applicable, and will invoice or credit (as applicable) 3CE in accordance with Section 7.1 of the General Terms and Conditions for such payments TPS made to or received from CAISO, or Third Parties for any Pass Through Amounts and settlement payments related to any other Transactions or Services to 3CE under this Agreement. Subject to the provisions of Section 7 of the General Terms and Conditions, the Parties understand that TPS will not charge or credit 3CE for such settlement charges and payments until TPS has been charged or credited for such payment. In addition, the Parties understand that when CAISO short pays or otherwise fails to pay TPS amounts related to the Resources or other Transactions, then TPS shall not be obligated to pay 3CE such unpaid amounts until TPS has received such unpaid amounts due from CAISO.
When paid by CAISO or a Third Party, as applicable, TPS will credit any such payments received to 3CE on the next invoice delivered by TPS to 3CE pursuant to Section 7 of the General Terms and Conditions herein. For the avoidance of doubt, receipt of payments from CAISO by TPS shall include receipt of payment in the form of credit or offset against other payment obligations owed to CAISO (to the extent permitted under the CAISO Agreements). 3CE shall reimburse TPS for all Pass Through Amounts assessed by CAISO or Third Parties to the extent related to or apportionable to any Transactions or Services. 3CE shall pay its proportionate share of all Pass Through Amounts assessed against or credited to TPS by CAISO, a transmission or distribution company, or regulatory authority, as applicable, to 3CE. As used in the previous sentence, the term “proportionate” shall mean that 3CE shall pay all Pass Through Amounts directly allocable to the Resources, Transactions and Services. All Pass Through Amounts and CAISO settlement charges and payments shall be payment obligations of the applicable Party that shall be due and payable as provided in Section 7 of the General Terms and Conditions. These obligations shall survive the termination of this Agreement.
6.2 Allocation Shares. The Parties acknowledge that 3CE and Silicon Valley Clean Energy (“SVCE”) are each entitled to a share of the Product from the Resources set forth in Exhibit A under the heading of Shared Resources and 3CE is solely entitled to the Product of the Resources set forth in Exhibit A under the heading of 3CE Resources. In each invoice delivered pursuant to this Agreement, TPS shall (a) allocate the CAISO Settlements, Pass Through Amounts and applicable Service Fees to 3CE and SVCE in accordance with the
20 percentages set forth in Exhibit A for Shared Resources, and (b) assign all CAISO Settlements, Pass Through Amounts and Services Fees to 3CE for 3CE Resources.
6.3 Reconciliation. TPS will reconcile all CAISO statements and Pass Through Amounts related to the Resources and Transactions. When TPS provides 3CE with each invoice, if 3CE disputes the accuracy of an invoice, it shall raise the dispute with reasonable notice to TPS prior to any deadline for contesting such settlement statements established in the Governing Rules, or otherwise 3CE shall be deemed to concur in the invoice’s accuracy.
In the event 3CE has a question regarding a specific charge noted in any invoice, 3CE may review the specific information related to such charge in the applicable supporting statement; provided, however, the exercise of this right shall not extend the then-applicable period in which 3CE must challenge any invoice. If 3CE disputes the accuracy of any invoice relating to Pass Through Amounts, TPS agrees, upon 3CE’s election and at 3CE’s cost, to reasonably act on 3CE’s behalf in disputing Pass Through Amounts with CAISO or, if applicable, a Third Party, acting in accordance with the Governing Rules in pursuing such billing disputes, as applicable; provided, however, at any time in the dispute resolution process, TPS may cease such efforts to contest Pass Through Amounts in the event TPS determines in its commercially reasonable judgment that (i) such Pass Through Amounts are correct, (ii) such dispute resolution is unlikely to be successful in adjusting the disputed Pass Through Amounts, or (iii) the cost or effort to continue pursuit of the dispute resolution process is unacceptable to TPS. In such event, TPS will notify 3CE of TPS’s decision to abandon pursuit of the dispute resolution process in a reasonable time prior to abandoning the claim, and in the event an assignment of claims is permitted under the Governing Rules, TPS will assign the claim under dispute to 3CE to enable 3CE’s independent pursuit of the claim. 3CE will be solely responsible for verifying the accuracy of meter data that is used to calculate CAISO Settlements with CAISO. 3CE and TPS will cooperate to provide any supporting data relating to the dispute in sufficient time for TPS to provide such data to CAISO under applicable Governing Rules.
If the dispute resolution data is not submitted on time, or the dispute resolution is adverse to 3CE, 3CE shall pay all Pass Through Amounts based upon the CAISO data. TPS shall not be responsible to 3CE for errors in meter data supplied by CAISO or any other source, if applicable, for use in settlement calculations. The obligations in this Section 6.2 shall survive the expiration or earlier termination of this Agreement.
SECTION 7
BILLING; PAYMENT; CREDIT
7.1 Invoices. All Services hereunder and Transactions hereunder will be accounted for on the basis of the settlement procedures set by the Governing Rules. The accounting period for Services, Transactions, and CAISO settlements will be one (1) Month. TPS’s monthly invoices will detail the Services and quantity of Products and imbalance charges scheduled and settled for 3CE under this Agreement during the applicable billing Month together with any adjustments for prior Months’ Services, 3CE’s Transactions to account for revised settlement billing statements received from Third Parties and from CAISO (and any applicable Pass Through Amounts), which invoice shall contain such detail and substantiating documentation as 3CE may reasonably request. In the event a CAISO statement conflicts with 3CE’s or TPS’s records, the CAISO statement will govern subject to any dispute 3CE timely raises with TPS for submission to the CAISO regarding such statement; provided however that submission of a dispute will not relieve a Party of its payment obligation until the dispute is resolved and to the extent adjustments are made to amounts owed. TPS’s invoice will show the amount that each Party owes (or is owed) pursuant to this Agreement. Invoices may be based upon estimated quantities, costs, and prices and adjusted by subsequent invoices once actual quantities, costs, and prices become known, pursuant to the Settlement Process.
21 7.2 Payment Date. A Party owing a Payment to the other Party, as set forth in the monthly invoices, shall make the payment on or before the tenth (10th) day after receipt of the monthly invoice (“Monthly Due Date”). In addition to the billing and payment process described in this Section 7, the Weekly Payment procedure set forth in Exhibit D will apply when the Resource is in a TPS SCID.
7.3 Late Payment. Amounts owed, but not paid on or before the Due Date will be payable with interest at the Interest Rate calculated daily from the Due Date until payment is received; provided, however, for payments from CAISO or a Governmental Authority, TPS will pass through to 3CE only such interest payments received from CAISO or the Governmental Authority for payments due 3CE.
7.4 Offset. In the event that 3CE and TPS are each required to pay an amount to the other in the same Month pursuant to this Agreement, then such amounts will be aggregated, and the Parties will discharge their obligations to pay through offset. In such an offset, the Party owing the greater aggregate amount will pay to the other Party the net difference between the amounts owed.
7.5 Billing Disputes. In the event 3CE, in good faith, disputes any TPS invoice, 3CE will provide TPS with written notice of the disputed amounts, together with a statement describing the particulars of the dispute, including the calculations with respect to any errors or inaccuracies, and any such amounts (other than Pass Through Amounts) so disputed shall not be required to be paid until resolution of the dispute. TPS agrees to work diligently with 3CE to clarify and/or correct any error or suspected errors on the invoices before the Due Date. Except to the extent that TPS agrees that any Pass Through Amount is not due, the Party owing any amount shall pay all amounts of Pass Through Amounts, assessed pursuant to Section 5.3 of the Base Agreement, even if disputed, set forth in the TPS invoice on or before the Due Date. If it is subsequently determined that 3CE has overpaid or underpaid amounts actually due, the Parties will make any necessary adjustments within ten (10) Days after determination of any overpayment or underpayment. Subject to Section 7.4 of the General Terms and Conditions, the Party in receipt of any overpayments shall refund such overpayments with interest accrued at the Interest Rate from the date payment was received. The obligations under this Section 7.5 will survive the expiration or earlier termination of this Agreement.
7.6 Credit Support.
(a) TPS Credit Support and Limits. 3CE’s obligation to utilize and continue TPS’s Services under this Agreement is conditioned upon TPS satisfying 3CE’s credit policies and requirements. If at any time during the Term 3CE incurs any Credit Exposure to TPS, 3CE may request, and upon receiving such request, TPS shall promptly cause to be delivered to 3CE, a guaranty duly executed by Tenaska Energy Holdings, LLC (“TEH”) and Tenaska Energy Inc. (“TEI” and together with TEH, the “Tenaska Guarantors”) in the amount of five million Dollars ($5,000,000 USD), in favor of 3CE in a form agreed to by the Parties (the “Tenaska Guaranty”), and TPS shall cause the Tenaska Guaranty to remain in full force and effect until TPS no longer has any remaining obligations under this Agreement. If at any time (i) TPS fails to maintain the Tenaska Guaranty in accordance with this Section, (ii) a Material Adverse Change has occurred with respect to the Tenaska Guarantors, or (iii) the liability limit of the Tenaska Guaranty is less than 3CE’s Credit Exposure to TPS, 3CE shall have the right to request additional adequate Credit Support in an amount sufficient to secure 3CE’s Credit Exposure to TPS. A failure by TPS to provide such additional adequate Credit Support pursuant to this Section 7.6(a)
22 within three (3) Business Days of receiving a request hereunder will be an Event of Default pursuant to Section 11.1(a) of the General Terms and Conditions. (b) 3CE Credit Support and Limits. TPS’s obligation to provide Services hereunder is conditioned upon 3CE’s compliance with TPS’s credit policies and requirements. 3CE shall provide TPS with adequate assurance of its creditworthiness prior to the Commencement Date, and shall provide adequate Credit Support throughout the Term to cover TPS’s Credit Exposure to 3CE. Upon request, 3CE shall promptly provide quarterly, annual, and other financial data as reasonably requested to enable TPS to monitor 3CE’s ongoing creditworthiness. If at any time during the Term, TPS’ Credit Exposure to 3CE, less any Credit Support held by TPS, exceeds the 3CE Threshold, then TPS shall have the right to request additional adequate Credit Support in an amount sufficient to secure TPS’s Credit Exposure to 3CE above the 3CE Threshold. A failure by 3CE to provide Credit Support pursuant to this Section 7.6(b) within three (3) Business Days of receiving a request hereunder will be an Event of Default pursuant to Section 11.1(a) of the General Terms and Conditions. Unless TPS has received Credit Support to cover its Credit Exposure to 3CE above the 3CE Threshold, TPS shall not be obligated to perform or receive, as the case may be, any Services or Transactions under this Agreement and may suspend performance until adequate Credit Support is provided. (c) Grant of Security Interest/Remedies. To secure its obligations under this Agreement and to the extent either or both Parties deliver Credit Support hereunder, each Party (a “Pledgor”) hereby grants to the other Party (the “Secured Party”) a present and continuing security interest in, and lien on (and right of setoff against), and assignment of, all cash collateral and cash equivalent collateral and any and all proceeds resulting therefrom or the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of, such Secured Party, and each Party agrees to take such action as the other Party reasonably requires in order to perfect the Secured Party’s first-priority security interest in, and lien on (and right of setoff against) such collateral and any and all proceeds resulting therefrom or from the liquidation thereof. Upon TPS’s receipt of settlement payments from CAISO, the settlement payments shall be deemed Credit Support posted by 3CE until disbursed to 3CE by TPS under Section 7.2 of the General Terms and Conditions. Upon or any time after the occurrence or deemed occurrence and during the continuation of an Event of Default, the Non-Defaulting Party may do any one or more of the following: (i) exercise any of the rights and remedies of a Secured Party with respect to all Credit Support including any such rights and remedies under law then in effect; (ii) exercise its rights of setoff against any and all property of the Defaulting Party in the possession of the Non-Defaulting Party or its agent; (iii) draw on any outstanding letter of credit issued for its benefit; and (iv) liquidate all Credit Support then held by or for the benefit of the Secured Party free from any claim or right of any nature whatsoever of the Defaulting Party including any equity or right of purchase redemption by the Defaulting Party. The Secured Party shall apply the proceeds of the Credit Support realized upon the exercise of any such rights or remedies to reduce the Pledgor’s obligations under this Agreement (the Pledgor remaining liable for any amounts owing to the Secured Party after such application), subject to the Secured Party’s obligation to return any surplus proceeds remaining after such obligations are satisfied in full.
7.7 True-Up/Credit Provisions. The Parties understand and agree that CAISO issues, revises, and restates its settlement statements in accordance with the Governing Rules (the “Settlement Process”). To accommodate the Settlement Process, the Parties agree that
23 either Party may raise a dispute with CAISO with respect to any statement or payment after other applicable deadlines for disputing such statement or payment have passed so long as such dispute is raised no later than ten (10) Days following the date of the relevant CAISO settlement statement. In each Month’s invoice to 3CE, TPS will include any revisions or corrections to prior Months’ invoices arising from CAISO’s Settlement Process. CAISO’s Settlement Process could result in 3CE owing additional payments to TPS or being owed payments by TPS. Upon receipt of each invoice and not later than the Due Date, 3CE shall pay TPS any amounts owed, and TPS shall pay 3CE any amounts owed, which arise from CAISO’s Settlement Process. No invoice rendered by TPS to 3CE under this Agreement shall be final until and unless CAISO has determined that no further restatement or resettlement of such Month shall occur and TPS has transmitted an invoice to 3CE for that Month reflecting any and all CAISO settlement statements applicable to that Month.
(a) Security After Termination. Upon termination of the Agreement, TPS will make a good faith estimate of any amounts by which CAISO may adjust prior settlement statements during the Settlement Process for Months of Service under this Agreement and will advise 3CE of such estimated amounts. The Party owed the greater aggregate amount, provided that such amount exceeds fifty thousand Dollars ($50,000), may demand reasonable security of performance, the Party estimated to owe the greater aggregate amount shall provide such Credit Support acceptable to the requesting Party in its reasonable discretion. TPS will continue to transmit settlement invoices to 3CE, as described herein. Upon receipt of each invoice and not later than the Weekly Due Date, 3CE shall pay TPS any amounts owed, and TPS shall pay 3CE any amounts owed, which arise from CAISO’s Settlement Process. Section 7.7 and 7.7(a) shall survive termination of the Agreement until the Settlement Process for months of Service under the Agreement is complete, invoices have been issued to 3CE, and payments between the Parties have been resolved.
(b) Statements received after termination of this Agreement. After the expiration or earlier termination of this Agreement, if TPS receives any statements from CAISO or Third Parties, whether adjustments or revisions, attributable to any Pass Through Amounts under this Agreement, TPS will invoice or pay 3CE accordingly.
TPS will continue to send monthly invoices to 3CE reflecting any revisions, corrections, or adjustments to prior months’ statements from CAISO until TPS has transmitted invoices which reflect corrections for any month made by CAISO, applicable to 3CE for such month. For each invoice provided to 3CE after the expiration or earlier termination of the Agreement, 3CE shall pay TPS any amounts owed, and TPS shall pay 3CE any amounts owed, as the case may be, by the Due Date. This Section 7.7(b) shall survive the expiration or earlier termination of this Agreement until accounting and billing for Pass Through Amounts and Services for all months of Service under this Agreement are complete, invoices have been issued to 3CE, and payments between the Parties have been resolved.
7.8 Maintenance of Records; Audit.
(a) TPS and 3CE shall each maintain in accordance with Prudent Industry Practice complete, accurate and up-to-date supporting records that are pertinent to the Services and payment obligations hereunder, including all Pass Through Amounts.
TPS shall ensure that such supporting books and records are distinguishable from TPS’s other Scheduling Coordinator activities. The Parties shall each retain such books and records for a minimum of four (4) years after the Term, or if longer, the relevant period required by Applicable Law or Governing Rules.
24 (b) Each Party has the right, at its sole expense and during Business Hours and upon reasonable written notice to the other Party, to examine the records of the other Party as necessary to verify the accuracy of any invoice, charge, or computation made pursuant to this Agreement. If any such examination reveals any inaccuracy in any invoice, the necessary adjustments in such invoice and the payments thereof will be promptly made together with interest at the Interest Rate, if applicable, from the original date of payment; provided that no adjustment for any invoice or payment will be made unless objection to its accuracy thereof was made prior to the lapse of two (2) years from the date that the disputed invoice was delivered; and, provided further, no adjustment will be made to invoices or summaries related to CAISO settlement statements that CAISO has deemed final under the Governing Rules. Notwithstanding anything in this Agreement to the contrary, adjustments to any invoice may be made up to four (4) years from the date that the particular Transactions were completed to adjust for (i) corrections made by CAISO to prior CAISO statements. This paragraph of this Agreement survives the expiration or earlier termination of this Agreement for a period of four (4) years from the date of such expiration or earlier termination of this Agreement for the purpose of the right to examine records and such invoice and payment objections and corrections.
SECTION 8
GOVERNING RULES
8.1 Governing Rules. Both Parties agree to abide by all Applicable Laws and the Governing Rules. For purposes of determining responsibility and rights of the Parties at any given time, in addition to the terms and conditions of this Agreement, the Applicable Laws and Governing Rules which are in effect at the time of performance or non-performance of an action, subject to the continuation of any grandfathered provisions, will govern with respect to that action. In the event of a direct and irreconcilable conflict between Applicable Laws and the Governing Rules and the terms and conditions set forth in this Agreement, the Applicable Laws and Governing Rules will prevail.
8.2 Compliance Support. TPS shall use commercially reasonable efforts to assist 3CE in any audit of the Resources conducted or initiated by a regional reliability coordinator or NERC, including preparation of responses to NERC or regional reliability coordinator data requests related to NERC standards for which TPS has information useful to 3CE for the demonstration of compliance. In addition to the foregoing, if the regional reliability coordinator requests a NERC audit for a time period during which TPS served as 3CE’s Scheduling Coordinator, then upon 3CE’s request, with respect to such audits that call for production of records of Scheduling Coordinator-related communications with CAISO, TPS shall support 3CE with relevant information and assistance including assisting 3CE in responding to a NERC audit by providing 3CE with TPS’s pertinent documentation of TPS’s communications with CAISO or the applicable Resource. Nothing contained in this Agreement shall be construed to make TPS a “generation owner,” “generation operator,” or any similar entity, or to make TPS subject to any classification under applicable NERC rules as a result of TPS’s execution of this Agreement or TPS’s performance of the Services or otherwise, and 3CE shall not register TPS or require TPS to register with NERC as a “generation owner” or “generation operator” with respect to the Resources.
8.3 Compliance with Laws. TPS and 3CE will at all times comply with all Applicable Laws and the Governing Rules. In the event that actions or omissions of one Party (“Responsible Party”) cause the other Party (“Affected Party”) to (a) be materially non-compliant with the Governing Rules or Applicable Laws affecting Scheduling Coordinators or the
25 Resources, or (b) have assessed or brought against it any fines, penalties, reprimands, censures, sanctions, assessments, or other material adverse actions by CAISO, market monitor, or any other Governmental Authority (“Assessments”) (which, for the avoidance of doubt, will not include ordinary course settlement charges or penalties, such as imbalance penalties or charges, mismatched schedule charges, uninstructed deviation charges, or late fees), then, in addition to any other rights or remedies under this Agreement (including, without limitation, the right, if any, to indemnification against such Assessments), the Affected Party may exercise any or all of the following:
(i) give written notice to the Responsible Party setting forth the circumstances of non-compliance and, if practicable, demand that the Responsible Party cure such non-compliance; and (ii) demand that the Responsible Party use commercially reasonable efforts to cooperate in the Affected Party’s defense against such allegation or Assessment (provided the foregoing will not require the Affected Party to incur material expenses unless reimbursed by the Responsible Party nor take any position in any regulatory proceeding contrary to its interests or policies).
The Responsible Party will reimburse the Affected Party for any Assessments paid by the Affected Party; provided, however, that any payment required shall remain subject to the limitation of liability in Section 10.2 of the General Terms and Conditions.
8.4 TPS Affiliates. Notwithstanding any provision of this Agreement to the contrary, TPS shall in all cases remain obligated for the performance of the Services and its obligations under this Agreement regardless of whether such Services or obligations are performed by its Affiliates.
8.5 Operation of 3CE’s Resources. Notwithstanding anything in this Agreement to the contrary, 3CE retains and shall retain ultimate decision-making authority and control with respect to the Resources relating to the operation, maintenance and dispatch of the Resources and the sale of Products from or pertaining to the Resources. Accordingly, all control over and with respect to the dispatch, maintenance and operation of the Resources, the undertaking of any particular arrangement or Transaction, the ultimate decision-making authority hereunder, and the execution of any Transaction shall reside exclusively with 3CE. TPS shall have no dispatch control over the Resources during any period of the Term, whether in practice as a result of the performance or undertaking of the Services, or otherwise pursuant to the terms of this Agreement. 3CE’s operation, maintenance and dispatch of the Resources, shall be in accordance with Prudent Industry Practice and the Governing Rules, and comply with all applicable Permits.
8.6 Change in Laws or Regulations. In the event a change in Applicable Laws or the Governing Rules (a) materially impairs a Party’s ability to perform under this Agreement, or (b) in the case of TPS, authorizes the CPUC to assert any new or additional jurisdiction over Scheduling Coordinators, the adversely affected Party may notify the other Party of the adverse effect and propose amendments to this Agreement to address the adverse effect of the change in Applicable Laws or Governing Rules. The Parties shall negotiate in good faith to amend this Agreement to restore the Parties to the relative benefits and obligations contemplated under this Agreement prior to the change in Applicable Laws or Governing Rules. If the Parties have not reached agreement on an amendment by the thirtieth (30th) Day after the effectiveness of the notice sent by the affected Party, then the affected Party may, upon written notice to the other Party, terminate this Agreement by designating a termination date that is no earlier than ninety (90) Days after the date of such written notice (“Permitted Termination”). Neither Party shall owe damages to the
26 other Party in the event of a Permitted Termination; provided, that neither Party shall be relieved of any payment obligations accruing under this Agreement prior to the date of such termination or that by their nature survive such termination. Upon a Permitted Termination, TPS will reasonably cooperate with 3CE to transition the Resources and the Scheduling Coordinator Services to a replacement Scheduling Coordinator in accordance with Section 6(b) of the Base Agreement.
SECTION 9
TAXES
9.1 Taxes. The seller or distributor of a Product will pay or cause to be paid all taxes imposed by any Governmental Authority on, or with respect to, a Product or a Transaction arising prior to the Delivery Point, and the buyer of a Product shall pay, or cause to be paid, all taxes imposed by any Governmental Authority on, or with respect to, a Product or a Transaction arising at or after the Delivery Point. In no event shall 3CE have any liability for taxes owed by TPS for performance under this Agreement.
Each Party must provide a state sales tax exemption form and a federal W-9 form to the other Party upon request. The Party failing to provide a sales tax exemption form will be liable for any state sales tax assessments on Transactions.
Each Party agrees to cooperate with the other Party in the event a state, municipality, or other relevant Governmental Authority ever audits or challenges a Party’s compliance with the rules and regulations governing the payment of taxes related to a Product or Transaction under this Agreement. Furthermore, each Party agrees to indemnify the other Party for any taxes, penalties, late fees, or other charges a Party is required to pay a taxing authority for uncollected and owed taxes which were the responsibility of the other Party under this Agreement, or which arose due to (i) a Party’s failure to provide appropriate exemption certification or (ii) a Party’s misrepresentation of any tax status. This provision shall survive the expiration or earlier termination of this Agreement and shall stay in full force and effect for five (5) years following the expiration or earlier termination of this Agreement.
SECTION 10
INDEMNITIES, LIABILITIES AND WARRANTY DISCLAIMER
10.1 INDEMNITIES. SUBJECT TO THE LIABILITY LIMITATIONS SET FORTH IN SECTION
10.2 BELOW, EACH PARTY UNDERSTANDS AND AGREES THAT IT SHALL DEFEND, RELEASE, INDEMNIFY, AND HOLD THE OTHER PARTY (INCLUDING SUCH PARTY’S
OWNERS, AFFILIATES, AND REPRESENTATIVES) HARMLESS FROM (I) ALL THIRD
PARTY LIABILITIES, COSTS, CLAIMS, LOSSES, OR CAUSES OF ACTION ARISING
FROM PERSONAL INJURY, PROPERTY LOSS, PROPERTY DAMAGE, OR DEATH,
HOWEVER CAUSED, AND RELATED TO ANY EVENT, CIRCUMSTANCE, ACT OR
INCIDENT FIRST OCCURRING OR EXISTING DURING THE PERIOD OF TIME WHEN
CONTROL AND TITLE TO ANY PRODUCT IS VESTED IN SUCH INDEMNIFYING
PARTY, OR (II) ANY OTHER THIRD PARTY LIABILITIES, COSTS, CLAIMS, LOSSES,
OR CAUSES OF ACTION TO THE EXTENT CAUSED BY SUCH INDEMNIFYING PARTY’S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE.
10.2 LIMITATION OF LIABILITY. EXCEPT FOR INDEMNITIES PROVIDED IN SECTION 10.1
HEREOF, THE LIABILITY OF EACH PARTY TO THE OTHER PARTY FOR ANY CLAIM
OR CAUSE OF ACTION RELATED TO THIS AGREEMENT SHALL BE LIMITED TO DIRECT, ACTUAL DAMAGES ONLY AND ALL OTHER DAMAGES ARE WAIVED. IN
NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
27 CONSEQUENTIAL, INDIRECT, PUNITIVE, LOST PROFIT, LOST OPPORTUNITY,
BUSINESS INTERRUPTION, OR EXEMPLARY DAMAGES FOR ANY CLAIM OR
CAUSE OF ACTION RELATED TO THIS AGREEMENT, WHETHER ARISING FROM
BREACH OF CONTRACT OR WARRANTY, INDEMNITY, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), STATUTE, OR OTHERWISE. MOREOVER,
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, EXCLUDING ANY LIABILITY FOR PAYMENTS OR CREDITS DUE TO 3CE UNDER THE
BASE AGREEMENT, UNLESS THE CLAIMS OR OBLIGATIONS ARE CAUSED BY TPS’S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, FOR ANY THREE (3) MONTH PERIOD OF SERVICES, THE LIABILITY OF TPS TO 3CE FOR ANY
OBLIGATIONS OR CLAIMS UNDER THIS AGREEMENT (INCLUDING INDEMNITIES)
SHALL BE LIMITED TO A MAXIMUM OF THE SERVICE FEES RECEIVED BY TPS FROM 3CE (I) WITH RESPECT TO THE THREE (3) MONTHS OF THE TERM, FOR THE
MONTHS PRECEDING THE MONTH IN WHICH THE EVENT GIVING RISE TO THE CLAIM OCCURRED, AND THEREAFTER (II) FOR THE THREE (3) MONTHS
IMMEDIATELY PRECEDING THE MONTH IN WHICH THE EVENT GIVING RISE TO THE CLAIM OCCURRED (THE “DAMAGES CAP”); PROVIDED, HOWEVER, ONCE
ANY PORTION OF THE DAMAGES CAP HAS BEEN PAID OUT BY TPS IN
SATISFACTION OF A CLAIM, SUCH PORTION THAT HAS BEEN PAID OUT SHALL BE
DEDUCTED FROM THE DAMAGES CAP OTHERWISE AVAILABLE TO SATISFY ANY SUBSEQUENT CLAIM(S) ARISING DURING SUCH PERIOD. FOR THE AVOIDANCE OF DOUBT, OTHER THAN WITH RESPECT TO TPS’S PAYMENT OBLIGATIONS
EXPRESSLY EXCLUDED FROM THE LIMITATION OF LIABILITY ABOVE, TPS WILL
NOT BE OBLIGATED TO PAY OUT IN THE AGGREGATE FOR CLAIMS IN ANY CONSECUTIVE THREE (3) MONTH PERIOD MORE THAN THE SERVICE FEES TPS HAS RECEIVED FROM 3CE FOR SUCH THREE (3) MONTH PERIOD.
10.3 WARRANTY DISCLAIMER. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, THE SERVICES ARE PROVIDED ON AN “AS IS” BASIS, AND 3CE’S USE OF THE SERVICES IS AT ITS OWN RISK. TPS DOES NOT MAKE, AND
HEREBY DISCLAIMS, ANY AND ALL OTHER EXPRESS OR IMPLIED WARRANTIES
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, AND TITLE, AND ANY WARRANTIES ARISING FROM A COURSE OF DEALING, USAGE, OR TRADE PRACTICE. TPS DOES NOT
WARRANT THAT THE SERVICES WILL BE UNINTERRUPTED, ERROR-FREE, OR
COMPLETELY SECURE, OR THAT THE PROVISION OF SERVICES WILL ALWAYS BE EXECUTED WITHOUT HUMAN ERRORS OR OMISSIONS.
10.4 ADDITIONAL INDEMNITIES. AN INDEMNIFYING PARTY’S INDEMNITY
OBLIGATIONS, AND ANY WAIVERS AND RELEASES OF CLAIMS IN THIS
AGREEMENT WILL EXTEND TO THE INDEMNIFIED PARTY, ITS AFFILIATED
COMPANIES, INCLUDING ANY ENTITY CONTROLLING, UNDER THE CONTROL OF,
OR UNDER COMMON CONTROL WITH SUCH PARTY, AND TO THE RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, OWNERS, SHAREHOLDERS AND INSURERS OF EACH THEREOF.
10.5 Survival. The provisions of this Section 10 shall survive the expiration or earlier termination of this Agreement.
SECTION 11
DEFAULTS AND REMEDIES
11.1 Events of Default. A Party will be in default under this Agreement upon the occurrence of any one or more of the following events (each an “Event of Default”):
28 (a) the failure by a Party to make a timely payment of any amounts due or provide required Credit Support to the other Party under this Agreement; (b) the failure by a Party to perform its material obligations under this Agreement which failure is not excused by the terms of this Agreement;
(c) the breach of any representation or warranty of such Party that results in a material adverse impact on the other Party;
(d) the appointment (voluntary or involuntary) of a receiver or liquidator or trustee of such Party or of any of the property of such Party by order of a court of competent jurisdiction;
(e) the filing of a petition or consent seeking relief or assisting in seeking relief in a proceeding under any of the provisions of federal or state bankruptcy or insolvency laws, as any such laws now exist or as those laws may be amended, or the filing of an answer admitting the material allegations of a petition filed against it in such proceeding; the general assignment by a Party for the benefit of its creditors; or the admission by a Party in writing of its inability to pay its debts generally as they become due; and/or
(f) the commission of a fraudulent act or omission by a Party in the performance of its obligations hereunder.
11.2 Rights of Non-Defaulting Party. If an Event of Default shall have occurred and be continuing with respect to a Party (the “Defaulting Party”), the Party not subject to an Event of Default (the “Non-Defaulting Party”) shall have the right to take any one or more of the following actions:
(a) upon the occurrence of an Event of Default as specified in Sections 11.1(a),
11.1(b), 11.1(d), 11.1(e), or 11.1(f), to suspend performance immediately and without notice;
(b) upon the occurrence of an Event of Default as specified in Section 11.1(c), upon three (3) Business Days’ notice, to suspend performance of any obligation which, if performance continued, would expose the Non-Defaulting Party to material risks or material unrecovered costs;
(c) upon the occurrence of an Event of Default as specified under Sections 11.1(a),
11.1(b), or 11.1(f), to terminate this Agreement by giving the Defaulting Party written notice setting forth a description of the Event of Default and designating a termination date, provided that the Defaulting Party shall have three (3) Business Days after the date of such notice in which to cure the Event of Default; (d) upon the occurrence of an Event of Default as specified under Section 11.1(c), to terminate this Agreement by giving the Defaulting Party written notice setting forth a description of the Event of Default and designating a termination date, provided that the Defaulting Party shall have fifteen (15) Days after the date of such notice in which to cure the Event of Default;
(e) upon the occurrence of an Event of Default as specified in Sections 11.1(d), or
11.1(e), to terminate this Agreement immediately and without notice;
29 (f) to pursue collection of direct, actual damages and seek any other remedy at law or in equity (except to the extent limited by, or waived under, this Agreement); (g) to pursue collection of reasonable attorney's fees and costs if any action is brought to enforce any term or provision of this Agreement or collect amounts due (whether at the trial court level or any appeal there from); and/or (h) to pursue any other remedy provided under this Agreement.
11.3 Acceleration of Amounts Due. If a termination of this Agreement occurs pursuant to this Section 11, the Non-Defaulting Party may accelerate all amounts owing between the Parties, offset amounts owed by the Defaulting Party against amounts due the Defaulting Party and against any Credit Support held between the Parties, and liquidate and terminate all Services, Transactions and/or scheduled quantities of Products where commercially reasonable to do so. To the extent applicable, where scheduled Transactions or scheduled quantities cannot be liquidated or terminated in a commercially reasonable manner, then this Agreement will continue in force as to those scheduled Transactions and scheduled quantities for the duration of the contractual commitment to Third Parties.
SECTION 12
NOTICES
12.1 Notices. Unless otherwise provided in this Agreement, any notices given under this Agreement must be in writing and personally delivered or sent by mail or email to such Persons or locations designated on Exhibit B and shall be deemed given and effective when delivered by hand or upon:
(a) three (3) Business Days after such notice is deposited in the United States mail with postage prepaid for transmittal by registered or certified mail, return receipt requested;
(b) one (1) Business Day after such notice is placed in the hands of a recognized commercial mail or courier service for overnight delivery; or (c) the Business Day on the date such notice was sent by email with confirmation of receipt of such email by confirmed email transmission, provided that such receipt occurred during Business Hours of such Business Day. For email transmissions received after such Business Hours of such Business Day at the receiving location, notice shall be deemed effective upon the opening of Business Hours of the next Business Day.
SECTION 13
FORCE MAJEURE
13.1 Force Majeure. Subject to Section 13.2 of the General Terms and Conditions, neither Party will be considered to be in default in the performance of any obligations under this Agreement (other than the obligation to make a payment of amounts owed) to the extent and for the duration that such failure of performance results from Force Majeure. The term “Force Majeure” means causes that are beyond the reasonable control of the Party affected which, by exercise of due diligence, such Party could not reasonably have been expected to avoid and which, by exercise of due diligence, it has been unable to overcome and not the result of the fault or negligence of such Party including, but not limited to: flood, earthquake, tornado, hurricane, storm, or fire; acts of terrorism; civil disobedience, strikes,
30 or other labor dispute; labor or material shortage; sabotage; pandemic, epidemic or other public health emergency; restraint, order, rule, or regulation of any court, governmental body, or public authority, including CAISO (whether valid or invalid).
13.2 Due Diligence. No Party, however, shall be relieved of liability for failure of performance hereunder based on Force Majeure if such failure is due to causes arising out of its own negligence or due to removable or remediable causes which it fails to remove or remedy within a reasonable time period. A Party claiming Force Majeure must exercise due diligence to overcome the Force Majeure event. Either Party rendered unable to fulfill any of its obligations under this Agreement by reason of Force Majeure shall give prompt written notice of such fact to the other Party and shall exercise due diligence to remove such inability with all reasonable dispatch.
13.3 Obligations During Force Majeure. Notwithstanding any other provisions as stated in Section 13, an event of Force Majeure does not relieve a Party of any of its obligations under the Governing Rules and this Agreement that the Party can reasonably perform during a Force Majeure event, and does not excuse a Party of its obligations to make payments for obligations arising prior to the Force Majeure event, or of any payment obligations for its non-performance arising pursuant to the Governing Rules and this Agreement.
SECTION 14
CONFIDENTIALITY
14.1 Confidentiality.
(a) Subject to the remaining provisions of this Section 14.1, each Party agrees, for itself, its Affiliates, and its Representatives, to keep confidential this Agreement, all negotiations concerning this Agreement, and all other information furnished by either Party related to schedules, Services, credit and financial obligations, and Transactions under this Agreement ("Confidential Information"); provided, however, such confidentiality obligation will expire three (3) years immediately following the expiration or earlier termination of this Agreement. (b) The receiving Party, its Affiliates, and its Representatives shall not disclose any Confidential Information to any Third Party without the prior written consent of the disclosing Party unless requested or required by a Governmental Authority or self-regulatory organization or as permitted in accordance hereof, except that a Party may disclose Confidential Information to any Affiliate, Representative, current or future financing sources, insurer, auditor, or potential purchaser of or investor in a Party and its parent or Affiliates (and its and their Representatives who need to know such information) who agree to keep such Confidential Information confidential on terms no less restrictive, as a whole, than those set forth in this Section 14.1, without such prior written consent. Except with regard to disclosures permitted by this Section 14.1, the disclosing Party shall require such Third Party to agree in writing to treat the Confidential Information in accordance with this Agreement. Each Party shall be responsible for the compliance by its Affiliates and Representatives with this Section 14.1 of the General Terms and Conditions. (c) In the event any Party is requested or required to disclose such Confidential Information pursuant to Applicable Law including, but not limited to a request for disclosure under the California Public Records Act (California Government Code Section 6250, et seq.) or by a court, agency, or other governing body having or
31 purporting to have jurisdiction over the Party, to the extent permitted by Applicable Law, such Party must notify the other Party prior to any disclosure so as to allow the other Party to seek appropriate protection from disclosure. (d) The Parties agree that disclosure of Confidential Information in breach of the confidentiality provisions of this Agreement constitutes an irreparable injury and that injunctive relief is an appropriate remedy to prevent the unwarranted disclosure of any Confidential Information.
(e) The confidentiality provisions of this Agreement will not apply to any Confidential Information (i) the receiving Party developed independently without using the Confidential Information, (ii) that was in the public domain at the time of its disclosure hereunder, (iii) which passes into the public domain by acts other than the acts of or caused by the Party receiving said Confidential Information, or (iv) is disclosed to the receiving Party by a Third Party, provided that the receiving Party does not know (or has no reasonable basis to know) that the information was received or disclosed unlawfully.
SECTION 15
REPRESENTATIONS AND WARRANTIES
15.1 Mutual Representations and Warranties. Each Party represents and warrants to the other Party at all times during the Term that:
(a) it is duly organized, validly existing, and in good standing under the laws of the jurisdiction under which it is organized and is authorized to do business in the State of California;
(b) it has the full power and authority to enter into this Agreement and perform all of its specified obligations, representations, warranties, and covenants under this Agreement;
(c) it is not bankrupt, does not contemplate becoming bankrupt nor, to its knowledge, will become bankrupt;
(d) (i) the execution, delivery, and performance of this Agreement have been duly authorized by all requisite action of its governing body and does not and will not conflict with any provision of its organizational documents, any Applicable Law or any material agreement or instrument to which it is a party or by which it or a material portion of its property or assets may be bound or effected, and (ii) the Person signing this Agreement on its behalf was duly authorized to execute and deliver this Agreement on its behalf;
(e) it has obtained, or will obtain prior to the Commencement Date, all required licenses, registrations, certifications, Permits, and other authorizations; and has taken, or will take prior to the Commencement Date, all actions required by Applicable Laws, the Governing Rules or governmental regulations with the exception of licenses, registrations, certifications, Permits, or other authorizations that do not materially affect its performance under this Agreement; (f) it is not in violation of any contracts, laws, ordinances, or governmental rules, regulations, or orders of any Governmental Authority or arbitration board materially affecting performance of this Agreement and to which it is subject;
32 (g) it is solely responsible for keeping itself informed of and understanding its respective responsibilities under the Governing Rules and any laws, rules, regulations, and tariffs approved by any Governmental Authority with jurisdiction over the matters specified in this Agreement; and
(h) it is not registered as a commodity trading advisor under the U.S. Commodity Exchange Act and is not holding itself out as in the business of advising others as to the value or advisability of trading swaps, options, futures or cash settled forwards or any other commodity transaction. Any oral or written communications by TPS with respect to this Agreement are not intended to be commodity trading advice.
15.2 Additional 3CE Representations and Warranties. 3CE represents and warrants that 3CE will work in good faith with TPS to make, prior to the Commencement Date, all required registrations with, and receive all required certifications and approvals from, the CPUC and all required registrations with, and receive any necessary qualifications from, CAISO to perform this Agreement.
15.3 Additional TPS Representations and Warranties. TPS represents and warrants that (i) TPS is certified as a Scheduling Coordinator with CAISO and, prior to the Commencement Date and during the Term, will be authorized by CAISO to represent the Resources, communicate, schedule, and settle Transactions with CAISO and (ii) TPS has made or will make prior to the Commencement Date all other required registrations with, and received all other required certifications and approvals from, the CPUC, and has made all other required registrations with, and received any other necessary qualifications from, CAISO to perform under this Agreement.
SECTION 16
MISCELLANEOUS
16.1 Disclaimer. This Agreement does not constitute, create, give effect to, or otherwise recognize or imply the existence of a joint venture, pooling arrangement association, partnership, or other formal or informal business organization of any kind among the Parties, and the rights and obligations of the Parties with respect to this Agreement shall be limited to those set forth in this Agreement.
16.2 Assignment. Neither Party will assign this Agreement or its performance or rights arising under or related to this Agreement without the prior written consent of the other Party, which consent may not be unreasonably withheld, conditioned or delayed; provided, however, either Party may, without the consent of the other Party (and without relieving itself from liability hereunder), (i) transfer or assign this Agreement to any Person or entity succeeding to all or substantially all of the assets of such Party that has a credit rating of BBB- or better from Standard & Poor’s Financial Services, LLC (a subsidiary of S&P Global Inc.) or a Credit Rating of Baa3 or better from Moody’s Investors Services, Inc., if any, or (ii) to a Person who succeeds to the interests of the assigning Party by merger, consolidation, or operation of law; provided, in each such case, any such assignee shall agree in writing to be bound by the terms and conditions hereof and so long as the transferring Party delivers such tax and enforceability assurance as the non-transferring Party may reasonably request and, in the case of TPS, the assignee possesses all licenses and expertise (including Scheduling Coordinator status) necessary to perform all obligations of TPS under this Agreement. Any purported assignment in contraventions of this Section will be null and void and the non-assigning Party is not obligated to recognize the purported assignment of this Agreement. This Agreement will be binding
33 on, and inure to the benefit of any permitted, assigned, or successor of the assigning Party.
16.3 Governing Law; Jury Trial Waiver; Expenses. This Agreement and all matter and claims arising under or relating to this Agreement is governed by and construed in accordance with the laws of the State of California without regard to conflicts of laws principles. With respect to any suit, action or proceedings relating to this Agreement (“Proceedings”), each Party irrevocably submits to the exclusive jurisdiction of the courts of the State of California and the United States District Courts located therein, and waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. EACH PARTY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION, CLAIM OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY CREDIT SUPPORT DOCUMENT. EACH
PARTY ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. IF EITHER PARTY BRINGS ANY
LEGAL ACTION TO ENFORCE ITS RIGHTS UNDER THIS AGREEMENT OR SEEKS
ENFORCEMENT UNDER THE TERMS OF ANY CREDIT SUPPORT PROVIDED BY
THE OTHER PARTY, THE PREVAILING PARTY SHALL BE ENTITLED TO REIMBURSEMENT FROM THE OTHER PARTY OF REASONABLE ATTORNEYS’
FEES AND LITIGATION COSTS AND EXPENSES, INCLUDING WITNESS FEES OF
ANY KIND, IN AN AMOUNT TO BE DETERMINED BY THE APPLICABLE COURT OR BY AGREEMENT OF THE PARTIES.
16.4 Counterparts. This Agreement may be executed in multiple counterparts, including PDF documents exchanged by electronic mail, each one of which will be considered an original Agreement, but all of which together will constitute one and the same instrument.
16.5 Waiver. No waiver by any Party, either express or implied, of any one or more defaults by the other in the performance of any provisions of this Agreement will operate or be construed as a waiver of any other default or defaults, whether of a like or a different character. The rights and remedies of the Parties are cumulative and not alternative.
Neither any failure nor any delay by any Party in exercising any right, power or privilege hereunder will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. Failure by a Party to enforce any of the terms, covenants, conditions or other provisions of this Agreement at any time will not in any way affect, limit, modify or waive that Party’s right thereafter to enforce strict compliance with every term, covenant or condition of this Agreement, notwithstanding any course of dealing or custom of the trade.
16.6 Entire Agreement; Amendment. This Agreement contains the entire understanding and agreement between the Parties with respect to the subject matter of this Agreement and supersedes all previous communications, negotiations and agreements, whether oral or written, between the Parties with respect to such subject matter. No alteration of or amendment to this Agreement will be effective unless in writing and signed by an authorized representative of each Party.
16.7 Severability. Any provision, article, or section declared or rendered unlawful by a court of law or regulatory agency with jurisdiction over the Parties, or deemed unlawful because of a statutory change, will not otherwise affect the other lawful obligations that arise under
34 this Agreement. In the event any provision of this Agreement is declared invalid, the Parties will promptly negotiate to restore this Agreement as near as possible to its original intent.
16.8 Headings. The section headings of this Agreement are for convenience of reference only, and do not form a part of this Agreement, and do not in any manner modify, interpret, or construe the intent or agreement of the Parties.
16.9 Exclusion of Third Party Rights. The provisions of this Agreement will not impart rights enforceable by any Person or entity not a Party or bound as a Party hereto unless such Person or entity is a permitted successor or assignee of a Party bound by this Agreement, and the Parties do not intend to create any Third Party beneficiary under this Agreement, except to the extent (i) security interests in this Agreement have been granted to a Party’s lenders, and (ii) certain rights to raise contractual rights and/or defenses under this Agreement have been extended to a Party’s guarantor under any guaranty provided as Credit Support hereunder.
16.10 Recordings. Each Party consents to the recording and retention of any telephone conversations, e-mail or electronic message between the Parties (“Recording”), and each Party will obtain any required consents to such Recordings from such Party’s affected personnel, contractors, or agents. Subject to other applicable rules of evidence, such as the rule of relevance, the contents of such Recording transmitted between the Parties concerning this Agreement, may be utilized to determine the intent of the Parties in any dispute arising under this Agreement, and such Recording will be deemed a written business record of any information, confirmation, consent, bid, authorization, instruction, notice, or Transaction under this Agreement, which may be submitted in evidence in any proceeding or action related to this Agreement. Each Party waives objection to the admission in court of such Recording based on the “Best Evidence Rule” or other legal principles. Such Recording will be the controlling evidence of the Parties’ agreement with respect to any particular information, confirmation, consent, notice, or Transaction in the event a written confirmation of that information, confirmation, consent, notice, or Transaction is not fully executed or accepted by both Parties. A written confirmation executed by both Parties will prevail over a Recording of a Transaction. Each Party waives any further notice of monitoring or recording and agrees to notify its officers and employees and obtain any required consent to any such monitoring or recording.
16.11 No Recourse to Members of 3CE. 3CE is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. 3CE shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of 3CE’s constituent members, or the employees, directors, officers, consultants or advisors or 3CE or its constituent members, in connection with this Agreement.
16.12 Imaged Agreement. Any original executed Agreement, confirmation or other related document may be photocopied and stored on computer tapes and disks (the “Imaged Agreement”). The Imaged Agreement, if introduced as evidence on paper, the confirmation if introduced as evidence in automated facsimile form, the Recording, if introduced as evidence in its original form and as transcribed onto paper, and all computer records of the foregoing, if introduced as evidence in printed format, in any judicial, arbitration, mediation or administrative proceedings, will be admissible as between the Parties to the same extent and under the same conditions as other business records originated and maintained in documentary form. Neither Party will object to the
35 admissibility of the Recording, the confirmation or the Imaged Agreement (or photocopies of the transcription of the Recording, the confirmation or the Imaged Agreement) on the basis that such were not originated or maintained in documentary form under the hearsay rule, the best evidence rule or other rule of evidence.
16.13 Joint Preparation of Agreement. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provisions of this Agreement.
16.14 No Fiduciary Duty. Both Parties recognize the commercial nature of this Agreement and neither Party will owe any essential fiduciary duty to the other Party or any Third Party with respect to the performance of any of its obligations hereunder. The Parties hereby waive, to the fullest extent permitted by Applicable Law, any and all fiduciary duties that, absent such waiver, may be implied by law, and in doing so, recognize, acknowledge and agree that their duties and obligations to one another are only as expressly set forth in this Agreement. 3CE acknowledges and agrees that this Agreement shall not preclude TPS from providing services or making sales of a like nature to any other Person, either currently or in the future. TPS may, notwithstanding this Agreement, engage in whatever activities it may choose, including, without limitation, providing the same or similar sales or services in the same geographic region (or other competing activities) for its own account (or for the account of others). Neither this Agreement nor any activity undertaken related to this Agreement will prevent TPS from engaging in such activities or require TPS to disclose the same.
16.15 Survival of Contract Terms. In addition to Sections of this Agreement which specifically state that they shall survive the expiration or earlier termination of this Agreement, the Parties also agree that these General Terms and Conditions shall survive the expiration or earlier termination of this Agreement as and to the extent necessary to give proper effect to the intent of the Parties with respect to their respective rights and obligations arising prior to the termination of this Agreement.
16.16 No Public Utility Designation. Each Party agrees that it shall not claim in any bankruptcy proceeding related to such Party that the other Party is serving as a public utility for such Party by selling Energy or providing Services under this Agreement.
16.17 Non-Discrimination. During the performance of this Agreement, neither Party, or their Representatives, shall unlawfully discriminate against any person because of race, religious creed, color, sex, national origin, ancestry, physical disability, mental disability, medical condition, marital status, age (over 40), or sexual orientation, either in 3CE or TPS’s employment practices or in the furnishing of services to recipients. Both Parties shall ensure that the evaluation and treatment of their employees and applicants for employment and all persons receiving and requesting services are free of such discrimination. Both Parties and their Representatives shall, in the performance of this Agreement, fully comply with all Applicable Laws which prohibit discrimination. The provision of services primarily or exclusively to such target population as may be designated in this Agreement shall not be deemed to be prohibited discrimination.
Exhibit A - 1
EXHIBIT A
RESOURCE INFORMATION
A. 3CE’s Resources That Will Require Scheduling
Resource #1
Resource Name: Slate Solar Photovoltaic + BESS
Location: King County, California
Number of CAISO Resource IDs: 1
CAISO Resource ID: SLATE_2_SLASR3
Unit SCID: To be determined
Portion of total CAISO Net Qualifying
Capacity of Resource:
100%
Resource Type: Solar Photovoltaic coupled with BESS in a hybrid configuration
Capacity: 67 MW solar, 34 MW BESS
Delivery Point: At resource’s P-node
Facility PNode: MUSTANGS_2_B1
Transmission Owner: Pacific Gas & Electric Company
PPA Term (Years) 17 years
Fixed Monthly Fee: $6,000
Resource #2
Resource Name: Rabbitbrush Solar Photovoltaic + BESS
Location: Kern County, California
Number of CAISO Resource IDs: 1
CAISO Resource ID: RATSKE_2_RBSSB1
Unit SCID: To be determined
Portion of total CAISO Net Qualifying
Capacity of Resource:
100%
Resource Type: Solar Photovoltaic coupled with BESS in a hybrid configuration
Capacity: 60 MW solar, 12 MW BESS
Delivery Point: At resource’s P-node
Facility PNode: RATTLSNK_7_RB1N001
Transmission Owner: Southern California Edison Company
PPA Term (Years) 15 years
Fixed Monthly Fee: $6,000
B. Shared Resources (with Silicon Valley Clean Energy Authority “SVCE”) That Will Require Scheduling:
Resource #3
Resource Name: Victory Pass Solar Photovoltaic + BESS
Location: Riverside County, California
Number of CAISO Resource IDs: 2
CAISO Resource ID: VICPAS_2_VPSBT1 (BESS)
VICPAS_2_VPSSR1 (Solar)
Unit SCID: To be determined
Portion of total CAISO Net Qualifying
Capacity of Resource:
100% of 200 MW solar and 100% of 50 MW
BESS
Exhibit A - 1
Resource Type: Solar Photovoltaic coupled with BESS in a co-located configuration Capacity: 100 MW solar, 25 MW BESS
Delivery Point: At resource’s P-node
Facility PNode: VPASS_7_NBT1 (BESS)
VPASS_7_NSR1 (Solar)
Transmission Owner: Southern California Edison Company
PPA Term (Years): 15 years
Fixed Monthly Fee: $3,000 ($6,000 shared 50%/50% with SVCE) 3CE's Percentage Share of Resource: 50%
SVCE’s Percentage Share of Resource: 50%
C. 3CE’s Resources That Will Not Require Scheduling, But will Require Monitoring Resource #4
Resource Name: Coso Geothermal
Location: Inyo County, California
Number of CAISO Resource IDs: 3
CAISO Resource ID: BLM_2_UNITS, CALGEN_1_UNITS,
NAVYII_2_UNITS
Unit SCID:
Portion of total CAISO Net Qualifying
Capacity of Resource:
100%
Resource Type: Geothermal
Capacity: 64.98 MW (degrades by year, step down to about 45MW/yr in 2027)
Delivery Point: Any or all of the following PNodes (CAISO Pnodes: POD_CALGEN_1_UNITS- APND;
POD_NAVYII_2_UNITS-APND;
POD_BLM_2_UNITS-APND), allocated in
accordance with ordinary business practices
which generally means Seller shall use
commercially reasonable efforts to allocate the
Delivered Energy in the same proportion to how
the Facility Energy is allocated among the
PNodes; provided, nothing herein shall prevent
Seller from reallocating Delivered Energy in light
of actual operating conditions as they occur.
Facility PNode: See “Delivery Point”
Transmission Owner: Southern California Edison Company
PPA Term (Years) 15 years
Fixed Monthly Fee: $1,800 ($3,000 shared with SVCE at 60% 3CE and 40% SVCE)
D. Shared Resources (with Silicon Valley Clean Energy Authority “SVCE”) That Will Not Require Scheduling, But Will Require Monitoring
Resource #5
Resource Name: Yellow Pine Solar Photovoltaic + BESS
Location: Clark County, Nevada
Number of CAISO Resource IDs: 2
CAISO Resource ID: YELPIN_2_YP2BT1 (BESS)
YELPIN_2_YP2SR1 (Solar)
Exhibit A - 1
Unit SCID: YPSS
Portion of total CAISO Net Qualifying
Capacity of Resource:
100% of 125 MW solar and 100% of 65 MW
BESS
Resource Type: Solar Photovoltaic coupled with BESS in a co-located configuration Capacity: 75 MW solar, 39 MW BESS
Delivery Point: At resource’s P-node
Facility PNode: YELWPN1_7_N002 (BESS)
YELWPN1_7_N001 (Solar)
Transmission Owner: GridLiance
PPA Term (Years): 20 years
Fixed Monthly Fee: $1,800 ($3,000 shared with SVCE at 60% 3CE and 40% SVCE)
3CE's Percentage Share of Resource: 60%
SVCE’s Percentage Share of Resource: 40%
Resource #6
Resource Name: Ormat’s Mammoth Casa Diablo IV
Geothermal Project
Location: Mono County, California
Number of CAISO Resource IDs: 1
CAISO Resource ID: CASADB_1_CD4GT1
Unit SCID: TS22
Portion of total CAISO Net Qualifying
Capacity of Resource:
Approximately 35% (14 MW) of Resource’s total
capacity of 40 MW
Resource Type: Geothermal
Capacity: 7 MW
Delivery Point: At resource’s P-node
Facility PNode: CSADIAB_7_N001
Transmission Owner: Southern California Edison
PPA Term (Years): 10 years
Fixed Monthly Fee: $1,500 ($3,000 shared 50%/50% with SVCE) 3CE's Percentage Share of Resource: 50%
SVCE’s Percentage Share of Resource: 50%
Resource #7
Resource Name: AES Mountainview Wind Project
Location: Riverside County, California
Number of CAISO Resource IDs: 1
CAISO Resource ID: MTWind_1_MVPWD1
Unit SCID: AIE6
Portion of total CAISO Net Qualifying
Capacity of Resource:
100% of Resource’s total capacity of
approximately 66.6 MW
Resource Type: Wind
Capacity: 33.3 MW
Delivery Point: At resource’s P-node
Facility PNode: MTWIND_7_N004
Transmission Owner: Southern California Edison
PPA Term (Years): 20 years
Fixed Monthly Fee: $1,500 ($3,000 shared 50%/50% with SVCE) 3CE's Percentage Share of Resource: 50%
SVCE’s Percentage Share of Resource: 50%
Exhibit A - 1
SERVICE FEE SCHEDULE IN 2024 FOR GENERIC RESOURCES1:
Costs on a per unit Set Up Fee Monthly Fee
Set Up4 $ 5,000 N/A
Telemetry $ -
TPS will pass through any actual
monthly cost for communication
channels needed between the
Facility and TPS’s primary and
backup operation centers without
markup.
Scheduling and Outage
Management (2 or less
Resource IDs) 2, 3
$ - $ 6,000.00
Scheduling and Outage
Management (3 or 4
Resource IDs) 2, 3
$ - $ 8,000.00
Scheduling and Outage
Management (5 or 6
Resource IDs) 2, 3
$ - $ 10,500.00
Scheduling and Outage
Management (7 or more
Resource IDs)2, 3
$ - To be discussed between the
Parties
Data and Settlement
Validation 2, 3 $ - $ 3,000.00
2Fixed Monthly Fee will increase annually by the CPI-U (minimum 2%). 3Pricing provided is for technology types currently online or expected to come online based on the Resources List provided by the Joint Agencies (solar, solar + storage, standalone storage, geothermal, and wind). TPS has experience with all technology types and could provide services to other resource types as agreed upon by the Joint Agencies and TPS. 4 Fee will be assessed on a per Resource basis.
1 This service fee schedule applies to Resources yet to be named by SVCE during the term of this Agreement. The fee schedule is adjusted annually pursuant to Section 5.2 of the Base Agreement.
Exhibit B - 1
EXHIBIT B
NOTICE INFORMATION
TENASKA POWER SERVICES CO. CENTRAL COAST COMMUNITY ENERGY Notice Address:
300 E. John Carpenter Freeway, Suite 1100
Irving, TX 75062
Notice Address:
70 Garden Ct, Ste 300
Monterey, CA 93940
Attn: Director, Contract Administration Attn: Dennis Dyc-O’Neal, COO Phone: (817) 303-1860 Phone: 831-641-7240
Facsimile: (817) 303-1867 Facsimile:
Email: [email protected] Email: [email protected] CICI Number: 549300K7NFSB93YGBN35 CICI Number:
CFTC Designation: End User CFTC Designation:
Duns: 01-501-6913 Duns: 080977851
Federal Tax ID Number: 47-0824081
(The above is the Tax ID for Tenaska Energy, Inc.,
the parent company of TPS. TPS is a disregarded
entity for federal tax purposes.)
Federal Tax ID Number: 82-2386705
Confirmations:
Attn: Confirms
Phone: (817) 303-3609
Email: [email protected]
Confirmations:
Attn:
Phone:
Email:
Real-Time Trading:
Phone: (817) 462-1528
Real-Time Trading:
Phone:
Payments:
Attn: Accounts Receivable
14302 FNB Parkway
Omaha, NE 68154
Phone: (402) 938-1621
Payments:
Attn: Accounts Payable
70 Garden Ct, Suite 300
Monterey, CA 93940
831-641-7218
Invoices:
Attn: Accounts Payable
Phone: (817) 462-1521
Email: [email protected]
Invoices:
Attn: Accounts Payable
Phone: 831-641-7218
Email: [email protected]
Wire/ACH Transfer:
Bank: US Bank, Omaha, NE
ABA No: 042000013
Account No: 130111671306
Account Name: Tenaska Power Services Co.
Wire/ACH Transfer:
Bank: River City Bank
ABA No: 121133416
Account No: 9981454362
Account Name: CCCE
Credit and Collections:
Attn: Credit Department
Phone: (817) 303-1113
Email: [email protected]
Credit and Collections:
Attn: Dewayne Woods, CFO
Phone: 831-641-7210
Email: [email protected]
With additional Notices of an Event of Default
or Potential Event of Default to:
Attn: Vice President and General Counsel
Phone: (817) 462-1507
Email: [email protected]
With additional Notices of an Event of Default or
Potential Event of Default to:
Attn: Deanna Fernandez Contracts and Compliance
Manager
Email: [email protected]
Exhibit C - 1
EXHIBIT C
SUPPORT SERVICES
In addition to those activities described in Section 2.8 of the Base Agreement, TPS will (with 3CE’s cooperation as necessary):
1. determine, establish and implement the necessary communication methods, operational information technology and interfaces with CAISO including for purposes of transmitting Real-Time telemetry from the Resources to TPS’s primary and backup operation centers;
2. establish itself as the Scheduling Coordinator for the Resources;
3. if applicable, specify, install, configure, and test all required interface equipment needed to acquire and transmit CAISO-required Real-Time telemetry;
4. one (1) Business Day prior to the Commencement Date, submit offers to CAISO applicable to the Resources for the Commencement Date;
5. provide such other assistance with respect to the Documentation as 3CE may reasonably require;
6. assist 3CE with the CAISO New Resource Implementation (NRI) Checklist as 3CE may reasonably require; and
7. assist 3CE in establishing and setting up its ability to send and transmit telemetering data to the markets.
Exhibit D - 1
EXHIBIT D
WEEKLY PAYMENT PROCEDURE
In addition to the monthly invoice process described in Section 7 of the General Terms and Conditions, the Parties agree to use the following process for exchanging weekly amounts (“Weekly Payment Procedure”):
1) Each Wednesday (or if a Wednesday is not a Business Day, the next Business Day), TPS will produce a statement of CAISO settlement activity for the 2nd week prior (Monday-Sunday) for the Resources (“Weekly Statement”). For example, under the Weekly Payment Procedure, TPS would issue a Weekly Statement on Wednesday, July 26, 2023, which would reflect CAISO settlement activity for Operating Days July 10 – 16, 2023. 2) The Party owing an amount shown on a Weekly Statement will remit such amount three (3) Business Days after receipt of the Weekly Statement (typical due date will be the Friday following the Weekly Statement issued on Wednesday).
3) Weekly Statements will only reflect initial CAISO settlement activity. 4) TPS will continue to issue monthly invoices pursuant to Section 7 of the General Terms and Conditions, including Fixed Monthly Fees, Pass Through Amounts, and any CAISO settlement amounts not already remitted under a Weekly Statement.
Staff Report Item 14
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dennis Dyc-O’Neal, Chief Operating Officer SUBJECT: Approve and authorize the CEO to execute an Energy Storage Agreement with San Gabriel Project I LLC, as well as any necessary ancillary documents, for a 125MW storage facility in an amount not to exceed $295,000,000 with a delivery term of 15 years DATE: March 13, 2024
RECOMMENDATION:
This memorandum recommends the Operations Board approve and authorize the CEO to execute an Energy Storage Agreement (“ESA”) with San Gabriel Project I LLC, as well as any necessary ancillary documents, for a 125MW storage facility in an amount not to exceed $295,000,000 with a delivery term of 15 years (the “Gabriel Storage Project”). The Projects anticipated Commercial Operation Date is June 1, 2027.
BACKGROUND:
3CE launched a request for offers (“RFO”) in February 2023 targeting procurement of renewable energy and storage resources to help meet our internal 100% Clean and Renewable goal, as well as state regulatory requirements.
3CE received a robust response to the RFO for 48 different projects. Staff evaluated these projects based on quantitative and qualitative criteria.
DISCUSSION/ANALYSIS:
Staff applied 3CE’s Project Selection Methodology to projects identified in the February 2023 RFO. The Gabrial Storage Project was selected following the quantitative evaluation and review of qualitative criteria which demonstrates that the Gabriel Storage Project approval will provide 3CE an important storage resource that will allow 3CE to shift our existing generation portfolio,
made up predominately of solar plus storage and wind, to better match 3CE customer consumption patterns.
Developer
Aypa Power Holdings, LP (“Aypa”) is a Delaware limited partnership and Blackstone portfolio company.
Aypa develops, owns, and operates utility-scale energy storage and hybrid renewable energy projects.
Aypa’s first energy storage project came online in 2018. The company currently has more than 22,000 MW in development across North America.
Overview of the Project
Counterparty San Gabriel Project I LLC
Parent Company Aypa Power Holdings LP
Product Dispatch Rights of a Battery Energy Storage System, with Resource Adequacy Benefits.
Delivery Term 15 years
June 1, 2027 through May 31, 2042
Project Name Gabriel Storage
Contract Capacity 125 MW/ 500 MWh (4-hour discharge duration) Lithium-Ion Battery Energy Storage System
Location Los Angeles County, California
Not to Exceed Amount $295,000,000
The RFO solicitation and shortlisting occurred prior to 3CE’s Project Selection Methodology, adopted in June 2023. However, staff have collected the information to evaluate this project on 1) ability to cost effectively meet 3CE’s regulatory obligations and 100% clean and renewable energy goal; 2) commitment to workforce development; 3) potential for innovation; 4) location; 5) environmental impacts, and 6) benefits accruing to underserved communities.
Each category is ranked on a scale of Low, Medium, or High.
Low Med High
Contribution to 3CE’s Mission and Goals
The Gabriel Storage Project is a critical component of meeting 3CE’s mission and goals of providing 100% of its retail demand through clean and renewable generation and remaining cost competitive. This resource will provide flexible Resource Adequacy (“RA”) benefits to ensure RA compliance for 3CE within the new 24-hour Slice-of-Day (“SOD”) RA paradigm. It will meet approximately 13% of 3CE’s RA obligation. The Project’s expected Commercial Operation Date in 2027 adds additional value as a resource to meet 3CE’s Mid-Term Reliability (MTR) mandate.
3CE’s ranking is High.
Workforce Development
Aypa represents it is committed to paying local prevailing wages and plans to secure a Project Labor Agreement. The developer estimates around 200 jobs will be created during construction and 5 permanent jobs once operations begin. They are targeting at least 60% of the workforce to come from areas local to the project location. 3CE’s ranking is High.
Innovation
3CE supports projects that accelerate decarbonization while remaining cost competitive.
Innovative projects can be those that introduce new technologies, achieve scale for existing technologies, or reduce barriers to the adoption of already scaled technologies. This project is using mainstream Lithium-Ion battery technology to increase the scale of energy storage resources to work with intermittent renewable energy resources to shift generation to the daily net peak periods thus increasing grid reliability. 3CE’s ranking is Medium.
Location
While not located within the 3CE jurisdictional footprint, the Gabriel Storage Project is in the city of Irwindale, Los Angeles County and grid-tied to the CAISO balancing authority.
High
High
Med
3CE’s ranking is Medium.
Environmental Stewardship
This project is a redevelopment of a shuttered landfill and quarry site. Aypa has indicated it will comply with all local entitlement and land use regulations but notes an environmental survey is not required as no sensitive species are at the project site given its location is in an urban setting.
3CE’s ranking is High.
Benefits Accrued to Underserved Communities
Aypa has indicated they plan to implement a proactive, bilingual, and comprehensive outreach strategy to educate and inform the local community about the benefits of the project. Aypa anticipates that at least 60% of their construction workers to be hired from the local project area.
3CE’s ranking is Medium.
FISCAL IMPACT:
The fiscal impact of the 125 MW/500 MWh Gabriel Storage project will not exceed $295 million over the 15-year term of the ESA.
CONCLUSION:
Approval of this ESA will contribute to 3CE meeting our aggressive 100% clean and renewable goal, providing valuable Resource Adequacy benefits, and contribute to meeting our regulatory compliance obligations.
ATTACHMENT(S):
1. ESA between San Gabriel Project I LLC and 3CE (Redacted) Med
High
Med
TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS ........................................................................................................ 1
1.1 Contract Definitions ............................................................................................... 1
1.2 Rules of Interpretation ......................................................................................... 16 ARTICLE 2 TERM; CONDITIONS PRECEDENT.................................................................. 17
2.1 Contract Term. ..................................................................................................... 17
2.2 Conditions Precedent ........................................................................................... 17
2.3 Development; Construction; Progress Reports .................................................... 18
2.4 Remedial Action Plan .......................................................................................... 18 ARTICLE 3 PURCHASE AND SALE ...................................................................................... 19
3.1 Purchase and Sale of Product ............................................................................... 19
3.2 Imbalance Energy. ............................................................................................... 19
3.3 Capacity Attributes. ............................................................................................. 19
3.4 Resource Adequacy Failure ................................................................................. 20
3.5 CPUC Mid-Term Reliability Requirements. ....................................................... 20
3.6 Compliance Expenditure Cap. ............................................................................. 21 ARTICLE 4 OBLIGATIONS AND DELIVERIES ................................................................... 22
4.1 Delivery................................................................................................................ 22
4.2 Title and Risk of Loss .......................................................................................... 22
4.3 Forecasting ........................................................................................................... 22
4.4 Dispatch Down/Curtailment. ............................................................................... 24
4.5 Charging Energy Management ............................................................................ 25
4.6 Reduction in Delivery Obligation ........................................................................ 26
4.7 [Reserved] ............................................................................................................ 27
4.8 Storage Availability ............................................................................................. 27
4.9 Storage Capacity Tests ......................................................................................... 27
4.10 Interconnection Capacity ..................................................................................... 28
4.11 Station Use ........................................................................................................... 28
4.12 Facility Operations and Maintenance .................................................................. 28 ARTICLE 5 TAXES .................................................................................................................. 28
5.1 Allocation of Taxes and Charges. ........................................................................ 28
5.2 Cooperation. ......................................................................................................... 29 ARTICLE 6 MAINTENANCE OF THE FACILITY ................................................................ 29
6.1 Maintenance of the Facility. ................................................................................ 29
6.2 Maintenance of Health and Safety. ...................................................................... 29
6.3 Shared Facilities ................................................................................................... 29 ARTICLE 7 METERING ........................................................................................................... 29
7.1 Metering. .............................................................................................................. 29
7.2 Meter Verification. ............................................................................................... 30 ARTICLE 8 INVOICING AND PAYMENT; CREDIT ............................................................ 30
ii
8.1 Invoicing. ............................................................................................................. 30
8.2 Payment................................................................................................................ 30
8.3 Books and Records. ............................................................................................. 31
8.4 Payment Adjustments; Billing Errors. ................................................................. 31
8.5 Billing Disputes. .................................................................................................. 31
8.6 Netting of Payments. ............................................................................................ 32
8.7 Seller’s Development Security. ........................................................................... 32
8.8 Seller’s Performance Security. ............................................................................. 32
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral ................ 33
8.10 Seller Financial Statements. ................................................................................. 33 ARTICLE 9 NOTICES .............................................................................................................. 34
9.1 Addresses for the Delivery of Notices ................................................................. 34
9.2 Acceptable Means of Delivering Notice .............................................................. 34 ARTICLE 10 FORCE MAJEURE ............................................................................................. 34
10.1 Definition ............................................................................................................. 34
10.2 No Liability If a Force Majeure Event Occurs .................................................... 35
10.3 Notice ................................................................................................................... 35
10.4 Termination Following Force Majeure Event ...................................................... 36 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ..................................................... 36
11.1 Events of Default ................................................................................................. 36
11.2 Remedies; Declaration of Early Termination Date. ............................................. 39
11.3 Termination Payment ........................................................................................... 39
11.4 Notice of Payment of Termination Payment ....................................................... 40
11.5 Disputes With Respect to Termination Payment ................................................. 40
11.6 Rights And Remedies Are Cumulative ................................................................ 40
11.7 Seller Pre-COD Liability Limitations .................................................................. 40 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES ........ 41
12.1 No Consequential Damages. ................................................................................ 41
12.2 Waiver and Exclusion of Other Damages. ........................................................... 41 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY .......................... 42
13.1 Seller’s Representations and Warranties. ............................................................ 42
13.2 Buyer’s Representations and Warranties ............................................................. 43
13.3 General Covenants ............................................................................................... 44
13.4 Prevailing Wage ................................................................................................... 44 ARTICLE 14 ASSIGNMENT.................................................................................................... 45
14.1 General Prohibition on Assignments ................................................................... 45
14.2 Permitted Assignment .......................................................................................... 45
14.3 Collateral Assignment. ......................................................................................... 45 ARTICLE 15 DISPUTE RESOLUTION ................................................................................... 48
15.1 Governing Law. ................................................................................................... 48
iii
15.2 Dispute Resolution. .............................................................................................. 48 ARTICLE 16 INDEMNIFICATION ......................................................................................... 48
16.1 Mutual Indemnity................................................................................................. 48
16.2 Notice of Claim. ................................................................................................... 49
16.3 Failure to Provide Notice. .................................................................................... 49
16.4 Defense of Claims ................................................................................................ 49
16.5 Subrogation of Rights .......................................................................................... 50
16.6 Rights and Remedies are Cumulative .................................................................. 50 ARTICLE 17 INSURANCE ...................................................................................................... 50
17.1 Insurance .............................................................................................................. 50 ARTICLE 18 CONFIDENTIAL INFORMATION ................................................................... 51
18.1 Definition of Confidential Information ................................................................ 51
18.2 Duty to Maintain Confidentiality ......................................................................... 51
18.3 Irreparable Injury; Remedies ............................................................................... 52
18.4 Disclosure to Lenders, Etc. .................................................................................. 52
18.5 Press Releases ...................................................................................................... 52 ARTICLE 19 MISCELLANEOUS ............................................................................................ 52
19.1 Entire Agreement; Integration; Exhibits .............................................................. 52
19.2 Amendments ........................................................................................................ 53
19.3 No Waiver ............................................................................................................ 53
19.4 No Agency, Partnership, Joint Venture or Lease ................................................. 53
19.5 Severability .......................................................................................................... 53
19.6 Mobile-Sierra ....................................................................................................... 53
19.7 Counterparts; Electronic Signatures. ................................................................... 53
19.8 Electronic Delivery .............................................................................................. 54
19.9 Binding Effect ...................................................................................................... 54
19.10 No Recourse to Members of Buyer. .................................................................... 54
19.11 Forward Contract ................................................................................................. 54
19.12 Service Contract ................................................................................................... 54
19.13 Further Assurances............................................................................................... 54
iv
Exhibits:
Exhibit A Facility Description
Exhibit B Facility Construction and Commercial Operation Exhibit C Compensation
Exhibit D Scheduling Coordinator Responsibilities
Exhibit E Progress Reporting Form
Exhibit F Form of Monthly Forecast
Exhibit G [Reserved]
Exhibit H Form of Commercial Operation Date Certificate Exhibit I Form of Installed Capacity Certificate
Exhibit J Form of Construction Start Date Certificate
Exhibit K Form of Letter of Credit
Exhibit L Form of Guaranty
Exhibit M Form of Replacement RA Notice
Exhibit N Notices
Exhibit O Storage Capacity Tests
Exhibit P Storage Facility Availability
Exhibit Q Operating Restrictions
Exhibit R Metering Diagram
ENERGY STORAGE SERVICE AGREEMENT
This Energy Storage Service Agreement (“Agreement”) is entered into as of the last dated signature on the signature page hereto (the “Effective Date”), between Buyer and Seller. Buyer and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties.” All capitalized terms used in this Agreement are used with the meanings ascribed to them in Article 1 to this Agreement.
RECITALS
WHEREAS, Seller intends to develop, design, permit, construct, own, and operate the Facility; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:
ARTICLE 1
DEFINITIONS
1.1 Contract Definitions. The following terms, when used herein with initial capitalization, shall have the meanings set forth below:
“AC” means alternating current.
“Accepted Compliance Costs” has the meaning set forth in Section 3.6(d). “Actual Monthly NQC” means the amount of Net Qualifying Capacity from the Facility that is eligible to count toward meeting Resource Adequacy Requirements by both the CPUC and CAISO.
“Affiliate” means, with respect to any Person, each Person that directly or indirectly controls, is controlled by, or is under common control with such designated Person. For purposes of this definition and the definition of “Permitted Transferee” and “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person.
Notwithstanding the foregoing, with respect to Seller, “Affiliates” shall mean Aypa Power Holdings LP and its subsidiaries provided, however, that the term “Affiliate,” when used with respect to Seller shall not include any direct or indirect tax equity investor.
2 “Agreement” has the meaning set forth in the Preamble and includes any Exhibits, schedules and any written supplements hereto, the Cover Sheet, and any designated collateral, credit support or similar arrangement between the Parties. “Ancillary Services” means all ancillary services, products and other attributes, if any, associated with the Facility consistent with the Operating Procedures. “Annual Cost Cap” has the meaning set forth in Section 3.6(a). “Availability Adjustment” has the meaning set forth in Exhibit P. “Available Storage Capacity” means the Facility’s then current Net Qualifying Capacity. “Bankrupt” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due. “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday in California. A Business Day begins at 8:00 a.m. and ends at 5:00 p.m. local time for the Party sending a Notice, or payment, or performing a specified action. “Buyer” means Central Coast Community Energy, a California joint powers authority. “Buyer Default” means an Event of Default of Buyer.
“CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“CAISO Approved Meter” means a CAISO approved revenue quality meter or meters, metering scheme, CAISO approved data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time Charging Energy and Discharging Energy. “CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Metered Entity” has the meaning set forth in the CAISO Tariff. “CAISO Operating Order” means the Operating Instruction or Dispatch Instruction as defined in the CAISO Tariff.
“CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures (as such