Central Coast Community Energy (3CE) Operations Board
February 12, 2025

Staff Report Item 5
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dawn Mathes- Park, Director of Communications & Outreach SUBJECT: Approve and authorize the CEO to execute an agreement with Salesforce Corporation for mass digital communications in an amount not to exceed $91,010, effective April 1, 2025 with an initial delivery term of 28 months and authorize the CEO to execute up to two (2) amendments that do not exceed 10% of the total purchase price, subject to approval by the General Counsel DATE: February 12, 2025
RECOMMENDATION:

Staff recommends that: a) the Operations Board approve and authorize the CEO to execute an agreement with Salesforce Corporation for mass digital communications in an amount not to exceed $91,010, effective March 31, 2025 with an initial delivery term of 28 months; and b) authorize the CEO to execute up to two (2) amendments that do not exceed 10% of the total purchase price, subject to approval by the General Counsel.

BACKGROUND:

Since May 20, 2021, 3CE has been using a software product called Mass Mailer to manage and send mass digital communications to customers, including required notifications, informational and programs-related emails, and monthly newsletters. Instead of sending emails one by one, Mass Mailer is designed to allow 3CE to send bulk emails and allow staff to track performance metrics such as open rates and responses.

DISCUSSION/ANALYSIS:

Since implementing Mass Mailer in 2021, staff have encountered persistent technical and operational issues, including:
 Integration Failures – Frequent syncing issues between Mass Mailer and the Customer Relationship Management (CRM) platform require manual data corrections, troubleshooting, and ongoing requests to Mass Mailer customer service.

 Deliverability Problems – A significant number of emails are incorrectly flagged as spam or undeliverable due to inadequate email authentication protocols.  Limited Automation & Personalization – The platform lacks the ability to segment audiences effectively and provide personalized content.
 Inconsistent Tracking & Reporting – Email engagement reporting data (e.g., opens, clicks, bounces) does not fully integrate into the CRM.
 Performance Concerns – Mass Mailer consumes excessive data, impacting the overall CRM system’s performance.

To identify a more effective solution, staff researched and conducted product demonstrations for the following services: (1) customized enhancements to Mass Mailer, (2) SAP Marketing Cloud, and (3) Salesforce Marketing Cloud.

The customized enhancements to Mass Mailer proved ineffective to address the persistent data syncing and deliverability problems. Similarly, the SAP Marketing Cloud is not fully compatible with the agency’s Salesforce-based CRM, making it an impractical option.

Salesforce Marketing Cloud offers several advantages:
 Seamless integration with the agency’s Salesforce CRM, eliminating data synchronizing issues and ensuring a unified customer communication platform.  Advanced automation tools that streamline email campaigns, improve engagement, and reduce manual workload.
 Enhanced audience segmentation and personalization, enabling more targeted, data-driven communication strategies.
 Stronger email deliverability through built-in authentication and compliance features, reducing spam issues.
 Comprehensive tracking and analytics that fully integrate with Salesforce, providing reliable insights to optimize outreach efforts.

To ensure an effective transition, the Salesforce Marketing Cloud will be implemented to overlap with existing Mass Mailer service until May 2025.

FISCAL IMPACT:

The fiscal impact of the Salesforce Marketing Cloud services will not exceed $91,010 over the 28-month term of the agreement. Current fiscal year expenditures are within the FY2024-25 Budget and future expenses will be budgeted as appropriate.

CONCLUSION:

Approval of this agreement will advance 3CE’s ability to execute more efficient, data-driven customer communications, enhance email deliverability and engagement, and ensure seamless integration with the agency’s Salesforce-based CRM.

ATTACHMENT(S):

1. Salesforce Master Services Agreement

2. Agreement Order Form for Salesforce Marketing Cloud services

MAIN SERVICES AGREEMENT
THIS MAIN SERVICES AGREEMENT GOVERNS CUSTOMER’S ACQUISITION AND USE OF SFDC SERVICES.

CAPITALIZED TERMS HAVE THE DEFINITIONS SET FORTH HEREIN.

IF CUSTOMER REGISTERS FOR A FREE TRIAL OF SFDC SERVICES OR FOR FREE SERVICES, THE APPLICABLE PROVISIONS OF THIS AGREEMENT WILL ALSO GOVERN THAT FREE TRIAL OR THOSE FREE SERVICES.

BY ACCEPTING THIS AGREEMENT, BY (1) CLICKING A BOX INDICATING ACCEPTANCE, (2) EXECUTING AN ORDER FORM THAT REFERENCES THIS AGREEMENT, OR (3) USING FREE SERVICES, CUSTOMER AGREES TO THE TERMS OF THIS AGREEMENT. IF THE INDIVIDUAL ACCEPTING THIS AGREEMENT IS ACCEPTING ON BEHALF OF A

COMPANY OR OTHER LEGAL ENTITY, SUCH INDIVIDUAL REPRESENTS THAT THEY HAVE THE AUTHORITY TO

BIND SUCH ENTITY AND ITS AFFILIATES TO THESE TERMS AND CONDITIONS, IN WHICH CASE THE TERM “CUSTOMER” SHALL REFER TO SUCH ENTITY AND ITS AFFILIATES. IF THE INDIVIDUAL ACCEPTING THIS

AGREEMENT DOES NOT HAVE SUCH AUTHORITY, OR DOES NOT AGREE WITH THESE TERMS AND CONDITIONS, SUCH INDIVIDUAL MUST NOT ACCEPT THIS AGREEMENT AND MAY NOT USE THE SERVICES.

The Services may not be accessed for purposes of monitoring their availability, performance or functionality, or for any other benchmarking or competitive purposes.

SFDC’s direct competitors are prohibited from accessing the Services, except with SFDC’s prior written consent.

This Agreement was last updated on October 16, 2023. It is effective between Customer and SFDC as of the date of Customer’s accepting this Agreement (the “Effective Date”).

1. DEFINITIONS
“Affiliate” means any entity that directly or indirectly controls, is controlled by, or is under common control with the subject entity. “Control,” for purposes of this definition, means direct or indirect ownership or control of more than 50% of the voting interests of the subject entity.
“Agreement” means this Main Services Agreement.
“Beta Services” means SFDC services or functionality that may be made available to Customer to try at its option at no additional charge which is clearly designated as beta, pilot, limited release, developer preview, non-production, evaluation, or by a similar description.
“Content” means information obtained by SFDC from publicly available sources or its third-party content providers and made available to Customer through the Services, Beta Services or pursuant to an Order Form, as more fully described in the Documentation.
“Customer” means in the case of an individual accepting this Agreement on his or her own behalf, such individual, or in the case of an individual accepting this Agreement on behalf of a company or other legal entity, the company or other legal entity for which such individual is accepting this Agreement, and Affiliates of that company or entity (for so long as they remain Affiliates) which have entered into Order Forms.
“Customer Data” means electronic data and information submitted by or for Customer to the Services, excluding Content and Non-SFDC Applications.
“Documentation” means the applicable Service’s Trust and Compliance documentation at https://www.salesforce.com/company/legal/trust-and-compliance-documentation/ and its usage guides and policies, as updated from time to time, accessible via help.salesforce.com or login to the applicable Service. “Free Services” means Services that SFDC makes available to Customer free of charge. Free Services exclude Services offered as a free trial and Purchased Services.

SFDC-MSA, October 16, 2023 Page 1 of 15

“Malicious Code” means code, files, scripts, agents or programs intended to do harm, including, for example, viruses, worms, time bombs and Trojan horses.
“Marketplace” means an online directory, catalog or marketplace of applications that interoperate with the Services, including, for example, the AppExchange at http://www.salesforce.com/appexchange, Mulesoft Anypoint Exchange at https://www.mulesoft.com/exchange, or the Heroku Elements Marketplace at https://elements.heroku.com/, and any successor websites.
“Non-SFDC Application” means Web-based, mobile, offline or other software functionality that interoperates with a Service, that is provided by Customer or a third party and/or listed on a Marketplace including as Salesforce Labs or under similar designation. Non-SFDC Applications, other than those obtained or provided by Customer, will be identifiable as such. “Order Form” means an ordering document or online order specifying the Services to be provided hereunder that is entered into between Customer and SFDC or any of their Affiliates, including any addenda and supplements thereto. By entering into an Order Form hereunder, an Affiliate agrees to be bound by the terms of this Agreement as if it were an original party hereto. “Purchased Services” means Services that Customer or Customer’s Affiliate purchases under an Order Form or online purchasing portal, as distinguished from Free Services or those provided pursuant to a free trial. “Services” means the products and services that are ordered by Customer under an Order Form or online purchasing portal, or provided to Customer free of charge (as applicable) or under a free trial, and made available online by SFDC, including associated SFDC offline or mobile components, as described in the Documentation. “Services” exclude Content and Non-SFDC Applications.
“SFDC” means the Salesforce company described in the “SFDC Contracting Entity, Notices, Governing Law, and Venue” section below.
“User” means, in the case of an individual accepting these terms on his or her own behalf, such individual, or, in the case of an individual accepting this Agreement on behalf of a company or other legal entity, an individual who is authorized by Customer to use a Service, for whom Customer has purchased a subscription (or in the case of any Services provided by SFDC without charge, for whom a Service has been provisioned), and to whom Customer (or, when applicable, SFDC at Customer’s request) has supplied a user identification and password (for Services utilizing authentication). Users may include, for example, employees, consultants, contractors and agents of Customer, and third parties with which Customer transacts business.

2. SFDC RESPONSIBILITIES

2.1 Provision of Purchased Services. SFDC will (a) make the Services and Content available to Customer pursuant to this Agreement, and the applicable Order Forms and Documentation, (b) provide applicable SFDC standard support for the Purchased Services to Customer at no additional charge, and/or upgraded support if purchased, (c) use commercially reasonable efforts to make the online Purchased Services available 24 hours a day, 7 days a week, except for: (i) planned downtime (of which SFDC shall give advance electronic notice), and (ii) any unavailability caused by circumstances beyond SFDC’s reasonable control, including, for example, an act of God, act of government, flood, fire, earthquake, civil unrest, act of terror, strike or other labor problem (other than one involving SFDC employees), Internet service provider failure or delay, Non-SFDC Application, or denial of service attack, and (d) provide the Services in accordance with laws and government regulations applicable to SFDC’s provision of its Services to its customers generally (i.e., without regard for Customer’s particular use of the Services), and subject to Customer’s and Users’ use of the Services in accordance with this Agreement, the Documentation and the applicable Order Form.

2.2 Protection of Customer Data. SFDC will maintain appropriate administrative, physical, and technical safeguards for protection of the security, confidentiality and integrity of Customer Data, as described in the Documentation. Those safeguards will include, but will not be limited to, measures designed to prevent unauthorized access to or disclosure of Customer Data (other than by Customer or Users). The terms of the data processing addendum at https://www.salesforce.com/company/legal/agreements/ (“DPA”) posted as of the Effective Date are hereby incorporated by reference. To the extent Personal Data from the European Economic Area (EEA), the United Kingdom and Switzerland are processed by SFDC, its Processor Binding Corporate Rules,, and/or the Standard Contractual Clauses shall apply, as further set forth in the DPA. For the purposes of the Standard Contractual Clauses, Customer and its applicable Affiliates are each the data exporter, and Customer's acceptance of this Agreement, and an applicable Affiliate's execution of an Order Form, shall be treated as its execution of the Standard Contractual Clauses and Appendices. Upon request by Customer made within 30 days after the effective date of termination or expiration of this Agreement, SFDC will make Customer Data available to Customer for export or download as provided in the Documentation. After such 30-day period, SFDC will have no obligation to maintain SFDC-MSA, October 16, 2023 Page 2 of 15

or provide any Customer Data, and as provided in the Documentation will thereafter delete or destroy all copies of Customer Data in its systems or otherwise in its possession or control, unless legally prohibited.

2.3 SFDC Personnel. SFDC will be responsible for the performance of its personnel (including its employees and contractors) and their compliance with SFDC’s obligations under this Agreement, except as otherwise specified in this Agreement.

2.4 Beta Services. From time to time, SFDC may make Beta Services available to Customer at no charge. Customer may choose to try such Beta Services or not in its sole discretion. Any use of Beta Services is subject to the Beta Services terms at https://www.salesforce.com/company/legal/agreements/.

2.5 Free Trial. If Customer registers on SFDC’s or an Affiliate’s website for a free trial, SFDC will make the applicable Service(s) available to Customer on a trial basis free of charge until the earlier of (a) the end of the free trial period for which Customer registered to use the applicable Service(s), or (b) the start date of any Purchased Service subscriptions ordered by Customer for such Service(s), or (c) termination by SFDC in its sole discretion. Additional trial terms and conditions may appear on the trial registration web page. Any such additional terms and conditions are incorporated into this Agreement by reference and are legally binding.

ANY DATA CUSTOMER ENTERS INTO THE SERVICES, AND ANY CUSTOMIZATIONS MADE TO THE SERVICES BY OR FOR CUSTOMER, DURING CUSTOMER’S FREE TRIAL WILL BE PERMANENTLY LOST UNLESS

CUSTOMER PURCHASES A SUBSCRIPTION TO THE SAME SERVICES AS THOSE COVERED BY THE TRIAL,

PURCHASES APPLICABLE UPGRADED SERVICES, OR EXPORTS SUCH DATA, BEFORE THE END OF THE TRIAL PERIOD. CUSTOMER CANNOT TRANSFER DATA ENTERED OR CUSTOMIZATIONS MADE DURING THE FREE TRIAL TO A SERVICE THAT WOULD BE A DOWNGRADE FROM THAT COVERED BY THE TRIAL (E.G., FROM ENTERPRISE EDITION TO PROFESSIONAL EDITION); THEREFORE, IF CUSTOMER PURCHASES A SERVICE

THAT WOULD BE A DOWNGRADE FROM THAT COVERED BY THE TRIAL, CUSTOMER MUST EXPORT

CUSTOMER DATA BEFORE THE END OF THE TRIAL PERIOD OR CUSTOMER DATA WILL BE PERMANENTLY LOST.

NOTWITHSTANDING THE “REPRESENTATIONS, WARRANTIES, EXCLUSIVE REMEDIES AND DISCLAIMERS” SECTION AND “INDEMNIFICATION BY SFDC” SECTION BELOW, DURING THE FREE TRIAL THE SERVICES ARE PROVIDED “AS-IS” WITHOUT ANY WARRANTY AND SFDC SHALL HAVE NO INDEMNIFICATION OBLIGATIONS

NOR LIABILITY OF ANY TYPE WITH RESPECT TO THE SERVICES FOR THE FREE TRIAL PERIOD UNLESS SUCH EXCLUSION OF LIABILITY IS NOT ENFORCEABLE UNDER APPLICABLE LAW IN WHICH CASE SFDC’S

LIABILITY WITH RESPECT TO THE SERVICES PROVIDED DURING THE FREE TRIAL SHALL NOT EXCEED $1,000.00. WITHOUT LIMITING THE FOREGOING, SFDC AND ITS AFFILIATES AND ITS LICENSORS DO NOT REPRESENT OR WARRANT TO CUSTOMER THAT: (A) CUSTOMER’S USE OF THE SERVICES DURING THE FREE TRIAL PERIOD WILL MEET CUSTOMER’S REQUIREMENTS, (B) CUSTOMER’S USE OF THE SERVICES DURING

THE FREE TRIAL PERIOD WILL BE UNINTERRUPTED, TIMELY, SECURE OR FREE FROM ERROR, AND (C) USAGE DATA PROVIDED DURING THE FREE TRIAL PERIOD WILL BE ACCURATE. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE “LIMITATION OF LIABILITY” SECTION BELOW, CUSTOMER SHALL BE

FULLY LIABLE UNDER THIS AGREEMENT TO SFDC AND ITS AFFILIATES FOR ANY DAMAGES ARISING OUT OF CUSTOMER’S USE OF THE SERVICES DURING THE FREE TRIAL PERIOD, ANY BREACH BY CUSTOMER OF THIS AGREEMENT AND ANY OF CUSTOMER’S INDEMNIFICATION OBLIGATIONS HEREUNDER.

CUSTOMER SHALL REVIEW THE APPLICABLE SERVICE’S DOCUMENTATION DURING THE TRIAL PERIOD TO

BECOME FAMILIAR WITH THE FEATURES AND FUNCTIONS OF THE SERVICES BEFORE MAKING A PURCHASE.

2.6 Free Services. SFDC may make Free Services available to Customer. Use of Free Services is subject to the terms and conditions of this Agreement. In the event of a conflict between this section and any other portion of this Agreement, this section shall control. Free Services are provided to Customer without charge up to certain limits as described in the Documentation. Usage over these limits requires Customer’s purchase of additional resources or services. Customer agrees that SFDC, in its sole discretion and for any or no reason, may terminate Customer’s access to the Free Services or any part thereof.

Customer agrees that any termination of Customer’s access to the Free Services may be without prior notice, and Customer agrees that SFDC will not be liable to Customer or any third party for such termination. Customer is solely responsible for exporting Customer Data from the Free Services prior to termination of Customer’s access to the Free Services for any reason, provided that if SFDC terminates Customer’s account, except as required by law SFDC will provide Customer a reasonable opportunity to retrieve its Customer Data.

SFDC-MSA, October 16, 2023 Page 3 of 15

NOTWITHSTANDING THE “REPRESENTATIONS, WARRANTIES, EXCLUSIVE REMEDIES AND DISCLAIMERS” SECTION AND “INDEMNIFICATION BY SFDC” SECTION BELOW, THE FREE SERVICES ARE PROVIDED “AS-IS”

WITHOUT ANY WARRANTY AND SFDC SHALL HAVE NO INDEMNIFICATION OBLIGATIONS NOR LIABILITY OF

ANY TYPE WITH RESPECT TO THE FREE SERVICES UNLESS SUCH EXCLUSION OF LIABILITY IS NOT ENFORCEABLE UNDER APPLICABLE LAW IN WHICH CASE SFDC’S LIABILITY WITH RESPECT TO THE FREE SERVICES SHALL NOT EXCEED $1,000.00. WITHOUT LIMITING THE FOREGOING, SFDC AND ITS AFFILIATES AND ITS LICENSORS DO NOT REPRESENT OR WARRANT TO CUSTOMER THAT: (A) CUSTOMER’S USE OF THE FREE SERVICES WILL MEET CUSTOMER’S REQUIREMENTS, (B) CUSTOMER’S USE OF THE FREE SERVICES

WILL BE UNINTERRUPTED, TIMELY, SECURE OR FREE FROM ERROR, AND (C) USAGE DATA PROVIDED THROUGH THE FREE SERVICES WILL BE ACCURATE. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE “LIMITATION OF LIABILITY” SECTION BELOW, CUSTOMER SHALL BE FULLY LIABLE UNDER THIS AGREEMENT TO SFDC AND ITS AFFILIATES FOR ANY DAMAGES ARISING OUT OF CUSTOMER’S USE OF THE FREE SERVICES, ANY BREACH BY CUSTOMER OF THIS AGREEMENT AND ANY OF CUSTOMER’S INDEMNIFICATION OBLIGATIONS HEREUNDER.

3. USE OF SERVICES AND CONTENT

3.1 Subscriptions. Unless otherwise provided in the applicable Order Form or Documentation, (a) Purchased Services and access to Content are purchased as subscriptions for the term stated in the applicable Order Form or in the applicable online purchasing portal, (b) subscriptions for Purchased Services may be added during a subscription term at the same pricing as the underlying subscription pricing, prorated for the portion of that subscription term remaining at the time the subscriptions are added, and (c) any added subscriptions will terminate on the same date as the underlying subscriptions. Customer agrees that its purchases are not contingent on the delivery of any future functionality or features, or dependent on any oral or written public comments made by SFDC regarding future functionality or features.

3.2 Usage Limits. Services and Content are subject to usage limits specified in Order Forms and Documentation. If Customer exceeds a contractual usage limit, SFDC may work with Customer to seek to reduce Customer’s usage so that it conforms to that limit. If, notwithstanding SFDC’s efforts, Customer is unable or unwilling to abide by a contractual usage limit, Customer will execute an Order Form for additional quantities of the applicable Services or Content promptly upon SFDC’s request, and/or pay any invoice for excess usage in accordance with the “Invoicing and Payment” section below.

3.3 Customer Responsibilities. Customer will (a) be responsible for Users’ compliance with this Agreement, Documentation and Order Forms, (b) be responsible for the accuracy, quality and legality of Customer Data, the means by which Customer acquired Customer Data, Customer’s use of Customer Data with the Services, and the interoperation of any Non-SFDC Applications with which Customer uses Services or Content, (c) use commercially reasonable efforts to prevent unauthorized access to or use of Services and Content, and notify SFDC promptly of any such unauthorized access or use, (d) use Services and Content only in accordance with this Agreement, Documentation, the Acceptable Use and External Facing Services Policy and the Artificial Intelligence Acceptable Use Policy both available at https://www.salesforce.com/company/legal/agreements/, Order Forms and applicable laws and government regulations, and (e) comply with terms of service of any Non-SFDC Applications with which Customer uses Services or Content. Any use of the Services in breach of the foregoing by Customer or Users that in SFDC’s judgment threatens the security, integrity or availability of SFDC’s services, may result in SFDC’s immediate suspension of the Services, however SFDC will use commercially reasonable efforts under the circumstances to provide Customer with notice and an opportunity to remedy such violation or threat prior to any such suspension.

3.4 Usage Restrictions. Customer will not (a) make any Service or Content available to anyone other than Customer or Users, or use any Service or Content for the benefit of anyone other than Customer or its Affiliates, unless expressly stated otherwise in an Order Form or the Documentation, (b) sell, resell, license, sublicense, distribute, rent or lease any Service or Content, or include any Service or Content in a service bureau or outsourcing offering, (c) use a Service or Non-SFDC Application to store or transmit infringing, libelous, or otherwise unlawful or tortious material, or to store or transmit material in violation of third-party privacy rights, (d) use a Service or Non-SFDC Application to store or transmit Malicious Code, (e) interfere with or disrupt the integrity or performance of any Service or third-party data contained therein, (f) attempt to gain unauthorized access to any Service or Content or its related systems or networks, (g) permit direct or indirect access to or use of any Services or Content in a way that circumvents a contractual usage limit, or use any Services to access, copy or use any of SFDC intellectual property except as permitted under this Agreement, an Order Form, or the Documentation, (h) modify, copy, or create derivative works of a Service or any part, feature, function or user interface thereof, (i) copy Content except as permitted herein or in an Order Form or the Documentation, (j) frame or mirror any part of any Service or Content, other than framing on Customer's own intranets or otherwise for its own internal business purposes or as permitted in the Documentation, (k) except to the extent permitted by applicable law, disassemble, reverse engineer, or decompile a Service or Content or access it to (1) SFDC-MSA, October 16, 2023 Page 4 of 15

build a competitive product or service, (2) build a product or service using similar ideas, features, functions or graphics of the Service, (3) copy any ideas, features, functions or graphics of the Service, or (4) determine whether the Services are within the scope of any patent.

3.5 Removal of Content and Non-SFDC Applications. If Customer receives notice, including from SFDC, that Content or a Non-SFDC Application may no longer be used or must be removed, modified and/or disabled to avoid violating applicable law, third-party rights, or the Acceptable Use and External Facing Services Policy, Customer will promptly do so. If Customer does not take required action, including deleting any Content Customer may have downloaded from the Services, in accordance with the above, or if in SFDC’s judgment continued violation is likely to reoccur, SFDC may disable the applicable Content, Service and/or Non-SFDC Application. If requested by SFDC, Customer shall confirm deletion and discontinuance of use of such Content and/or Non-SFDC Application in writing and SFDC shall be authorized to provide a copy of such confirmation to any such third-party claimant or governmental authority, as applicable. In addition, if SFDC is required by any third-party rights holder to remove Content, or receives information that Content provided to Customer may violate applicable law or third-party rights, SFDC may discontinue Customer’s access to Content through the Services.

4. NON-SFDC PRODUCTS AND SERVICES

4.1 Non-SFDC Products and Services. SFDC or third parties may make available (for example, through a Marketplace or otherwise) third-party products or services, including, for example, Non-SFDC Applications and implementation and other consulting services. Any acquisition by Customer of such products or services, and any exchange of data between Customer and any Non-SFDC provider, product or service is solely between Customer and the applicable Non-SFDC provider. SFDC does not warrant or support Non-SFDC Applications or other Non-SFDC products or services, whether or not they are designated by SFDC as “certified” or otherwise, unless expressly provided otherwise in an Order Form. SFDC is not responsible for any disclosure, modification or deletion of Customer Data resulting from access by such Non-SFDC Application or its provider.

4.2 Integration with Non-SFDC Applications. The Services may contain features designed to interoperate with Non-SFDC Applications. SFDC cannot guarantee the continued availability of such Service features, and may cease providing them without entitling Customer to any refund, credit, or other compensation, if for example and without limitation, the provider of a Non-SFDC Application ceases to make the Non-SFDC Application available for interoperation with the corresponding Service features in a manner acceptable to SFDC.

5. FEES AND PAYMENT

5.1 Fees. Customer will pay all fees specified in Order Forms. Except as otherwise specified herein or in an Order Form, (i) fees are based on Services and Content subscriptions purchased and not actual usage, (ii) payment obligations are non- cancelable and fees paid are non-refundable, and (iii) quantities purchased cannot be decreased during the relevant subscription term.

5.2 Invoicing and Payment. Customer will provide SFDC with valid and updated credit card information, or with a valid purchase order or alternative document reasonably acceptable to SFDC. If Customer provides credit card information to SFDC, Customer authorizes SFDC to charge such credit card for all Purchased Services listed in the Order Form for the initial subscription term and any renewal subscription term(s) as set forth in the “Term of Purchased Subscriptions” section below.

Such charges shall be made in advance, either annually or in accordance with any different billing frequency stated in the applicable Order Form. If the Order Form specifies that payment will be by a method other than a credit card, SFDC will invoice Customer in advance and otherwise in accordance with the relevant Order Form. Unless otherwise stated in the Order Form, invoiced fees are due net 30 days from the invoice date. Customer is responsible for providing complete and accurate billing and contact information to SFDC and notifying SFDC of any changes to such information.

5.3 Overdue Charges. If any invoiced amount is not received by SFDC by the due date, then without limiting SFDC’s rights or remedies, (a) those charges may accrue late interest at the rate of 1.5% of the outstanding balance per month, or the maximum rate permitted by law, whichever is lower, and/or (b) SFDC may condition future subscription renewals and Order Forms on payment terms shorter than those specified in the “Invoicing and Payment” section above.

5.4 Suspension of Service and Acceleration. If any charge owing by Customer under this or any other agreement for services is 30 days or more overdue, (or 10 or more days overdue in the case of amounts Customer has authorized SFDC to charge to Customer’s credit card), SFDC may, without limiting its other rights and remedies, accelerate Customer’s unpaid fee obligations under such agreements so that all such obligations become immediately due and payable, and suspend Services until such amounts are paid in full, provided that, other than for customers paying by credit card or direct debit whose payment has been declined, SFDC will give Customer at least 10 days’ prior notice that its account is overdue, in accordance with the “Manner of Giving Notice” section below for billing notices, before suspending services to Customer.

SFDC-MSA, October 16, 2023 Page 5 of 15

5.5 Payment Disputes. SFDC will not exercise its rights under the “Overdue Charges” or “Suspension of Service and Acceleration” section above if Customer is disputing the applicable charges reasonably and in good faith and is cooperating diligently to resolve the dispute.

5.6 Taxes. SFDC's fees do not include any taxes, levies, duties or similar governmental assessments of any nature, including, for example, value-added, sales, use or withholding taxes, assessable by any jurisdiction whatsoever (collectively, “Taxes”).

Customer is responsible for paying all Taxes associated with its purchases hereunder. If SFDC has the legal obligation to pay or collect Taxes for which Customer is responsible under this section, SFDC will invoice Customer and Customer will pay that amount unless Customer provides SFDC with a valid tax exemption certificate authorized by the appropriate taxing authority.

For clarity, SFDC is solely responsible for taxes assessable against it based on its income, property and employees.

6. PROPRIETARY RIGHTS AND LICENSES

6.1 Reservation of Rights. Subject to the limited rights expressly granted hereunder, SFDC, its Affiliates, its licensors and Content Providers reserve all of their right, title and interest in and to the Services and Content, including all of their related intellectual property rights. No rights are granted to Customer hereunder other than as expressly set forth herein.

6.2 Access to and Use of Content. Customer has the right to access and use applicable Content subject to the terms of applicable Order Forms, this Agreement and the Documentation.

6.3 License by Customer to SFDC. Customer grants SFDC, its Affiliates and applicable contractors a worldwide, limited-term license to host, copy, use, transmit, and display any Non-SFDC Applications and program code created by or for Customer using a Service or for use by Customer with the Services, and Customer Data, each as appropriate for SFDC to provide and ensure proper operation of the Services and associated systems in accordance with this Agreement. If Customer chooses to use a Non-SFDC Application with a Service, Customer grants SFDC permission to allow the Non-SFDC Application and its provider to access Customer Data and information about Customer’s usage of the Non-SFDC Application as appropriate for the interoperation of that Non-SFDC Application with the Service. Subject to the limited licenses granted herein, SFDC acquires no right, title or interest from Customer or its licensors under this Agreement in or to any Customer Data, Non-SFDC Application or such program code.

6.4 License by Customer to Use Feedback. Customer grants to SFDC and its Affiliates a worldwide, perpetual, irrevocable, royalty-free license to use, distribute, disclose, and make and incorporate into its services any suggestion, enhancement request, recommendation, correction or other feedback provided by Customer or Users relating to the operation of SFDC’s or its Affiliates’ services.

6.5 Federal Government End Use Provisions. SFDC provides the Services, including related software and technology, for ultimate federal government end use in accordance with the following: The Services consist of “commercial items,” as defined at FAR 2.101. In accordance with FAR 12.211-12.212 and DFARS 227.7102-4 and 227.7202-4, as applicable, the rights of the U.S. Government to use, modify, reproduce, release, perform, display, or disclose commercial computer software, commercial computer software documentation, and technical data furnished in connection with the Services shall be as provided in this Agreement, except that, for U.S. Department of Defense end users, technical data customarily provided to the public is furnished in accordance with DFARS 252.227-7015. If a government agency needs additional rights, it must negotiate a mutually acceptable written addendum to this Agreement specifically granting those rights.

7. CONFIDENTIALITY

7.1 Definition of Confidential Information. “Confidential Information” means all information disclosed by a party (“Disclosing Party”) to the other party (“Receiving Party”), whether orally or in writing, that is designated as confidential or that reasonably should be understood to be confidential given the nature of the information and the circumstances of disclosure. Confidential Information of Customer includes Customer Data; Confidential Information of SFDC includes the Services and Content, and the terms and conditions of this Agreement and all Order Forms (including pricing). Confidential Information of each party includes business and marketing plans, technology and technical information, product plans and designs, and business processes disclosed by such party. However, Confidential Information does not include any information that (i) is or becomes generally known to the public without breach of any obligation owed to the Disclosing Party, (ii) was known to the Receiving Party prior to its disclosure by the Disclosing Party without breach of any obligation owed to the Disclosing Party, (iii) is received from a third party without knowledge of any breach of any obligation owed to the Disclosing Party, or (iv) was independently developed by the Receiving Party. For the avoidance of doubt, the non-disclosure obligations set forth in this “Confidentiality” section apply to Confidential Information exchanged between the parties in connection with the evaluation of additional SFDC services.

SFDC-MSA, October 16, 2023 Page 6 of 15

7.2 Protection of Confidential Information. As between the parties, each party retains all ownership rights in and to its Confidential Information. The Receiving Party will use the same degree of care that it uses to protect the confidentiality of its own confidential information of like kind (but not less than reasonable care) to (i) not use any Confidential Information of the Disclosing Party for any purpose outside the scope of this Agreement and (ii) except as otherwise authorized by the Disclosing Party in writing, limit access to Confidential Information of the Disclosing Party to those of its and its Affiliates’ employees and contractors who need that access for purposes consistent with this Agreement and who have signed confidentiality agreements with the Receiving Party containing protections not materially less protective of the Confidential Information than those herein. Neither party will disclose the terms of this Agreement or any Order Form to any third party other than its Affiliates, legal counsel and accountants without the other party’s prior written consent, provided that a party that makes any such disclosure to its Affiliate, legal counsel or accountants will remain responsible for such Affiliate’s, legal counsel’s or accountant’s compliance with this “Confidentiality” section. Notwithstanding the foregoing, SFDC may disclose the terms of this Agreement and any applicable Order Form to a contractor or Non-SFDC Application Provider to the extent necessary to perform SFDC’s obligations under this Agreement, under terms of confidentiality materially as protective as set forth herein.

7.3 Compelled Disclosure. The Receiving Party may disclose Confidential Information of the Disclosing Party to the extent compelled by law to do so, provided the Receiving Party gives the Disclosing Party prior notice of the compelled disclosure (to the extent legally permitted) and reasonable assistance, at the Disclosing Party's cost, if the Disclosing Party wishes to contest the disclosure. If the Receiving Party is compelled by law to disclose the Disclosing Party’s Confidential Information as part of a civil proceeding to which the Disclosing Party is a party, and the Disclosing Party is not contesting the disclosure, the Disclosing Party will reimburse the Receiving Party for its reasonable cost of compiling and providing secure access to that Confidential Information.

8. REPRESENTATIONS, WARRANTIES, EXCLUSIVE REMEDIES AND DISCLAIMERS

8.1 Representations. Each party represents that it has validly entered into this Agreement and has the legal power to do so.

8.2 SFDC Warranties. SFDC warrants that during an applicable subscription term (a) this Agreement, the Order Forms and the Documentation will accurately describe the applicable administrative, physical, and technical safeguards for protection of the security, confidentiality and integrity of Customer Data, (b) SFDC will not materially decrease the overall security of the Services, (c) the Services will perform materially in accordance with the applicable Documentation, and (d) subject to the “Integration with Non-SFDC Applications” section above, SFDC will not materially decrease the overall functionality of the Services. For any breach of a warranty above, Customer’s exclusive remedies are those described in the “Termination” and “Refund or Payment upon Termination” sections below.

8.3 Disclaimers. EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY MAKES ANY WARRANTY OF ANY

KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND EACH PARTY SPECIFICALLY

DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY,

FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW. SERVICES PROVIDED FREE OF CHARGE, CONTENT AND BETA SERVICES ARE PROVIDED “AS IS,” AND AS AVAILABLE EXCLUSIVE OF ANY WARRANTY WHATSOEVER.

9. MUTUAL INDEMNIFICATION

9.1 Indemnification by SFDC. SFDC will defend Customer against any claim, demand, suit or proceeding made or brought against Customer by a third party alleging that any Purchased Service infringes or misappropriates such third party’s intellectual property rights (a “Claim Against Customer”), and will indemnify Customer from any damages, attorney fees and costs finally awarded against Customer as a result of, or for amounts paid by Customer under a settlement approved by SFDC in writing of, a Claim Against Customer, provided Customer (a) promptly gives SFDC written notice of the Claim Against Customer, (b) gives SFDC sole control of the defense and settlement of the Claim Against Customer (except that SFDC may not settle any Claim Against Customer unless it unconditionally releases Customer of all liability), and (c) gives SFDC all reasonable assistance, at SFDC’s expense. If SFDC receives information about an infringement or misappropriation claim related to a Service, SFDC may in its discretion and at no cost to Customer (i) modify the Services so that they are no longer claimed to infringe or misappropriate, without breaching SFDC’s warranties under “SFDC Warranties” above, (ii) obtain a license for Customer’s continued use of that Service in accordance with this Agreement, or (iii) terminate Customer’s subscriptions for that Service upon 30 days’ written notice and refund Customer any prepaid fees covering the remainder of the term of the terminated subscriptions. The above defense and indemnification obligations do not apply if (I) the allegation does not state with specificity that the Services are the basis of the Claim Against Customer; (II) a Claim Against Customer arises from the use or combination of the Services or any part thereof with software, hardware, data, or processes not provided by SFDC, if the Services or use thereof would not infringe without such combination; (III) a Claim Against Customer arises from Services SFDC-MSA, October 16, 2023 Page 7 of 15

under an Order Form for which there is no charge; or (IV) a Claim against Customer arises from Content, a Non-SFDC Application or Customer’s breach of this Agreement, the Documentation or applicable Order Forms.

9.2 Indemnification by Customer. Customer will defend SFDC and its Affiliates against any claim, demand, suit or proceeding made or brought against SFDC by a third party (a) alleging that the combination of a Non-SFDC Application or configuration provided by Customer and used with the Services, infringes or misappropriates such third party’s intellectual property rights, or (b) arising from (i) Customer’s use of the Services or Content in an unlawful manner or in violation of the Agreement, the Documentation, or Order Form, (ii) any Customer Data or Customer’s use of Customer Data with the Services, or (iii) a Non-SFDC Application provided by Customer(each a “Claim Against SFDC”), and will indemnify SFDC from any damages, attorney fees and costs finally awarded against SFDC as a result of, or for any amounts paid by SFDC under a settlement approved by Customer in writing of, a Claim Against SFDC, provided SFDC (A) promptly gives Customer written notice of the Claim Against SFDC, (B) gives Customer sole control of the defense and settlement of the Claim Against SFDC (except that Customer may not settle any Claim Against SFDC unless it unconditionally releases SFDC of all liability), and (C) gives Customer all reasonable assistance, at Customer’s expense. The above defense and indemnification obligations do not apply if a Claim Against SFDC arises from SFDC’s breach of this Agreement, the Documentation or applicable Order Forms.

9.3 Exclusive Remedy. This “Mutual Indemnification” section states the indemnifying party’s sole liability to, and the indemnified party’s exclusive remedy against, the other party for any third-party claim described in this section.

10. LIMITATION OF LIABILITY

10.1 Limitation of Liability. IN NO EVENT SHALL THE AGGREGATE LIABILITY OF EACH PARTY TOGETHER WITH

ALL OF ITS AFFILIATES ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE TOTAL AMOUNT

PAID BY CUSTOMER AND ITS AFFILIATES HEREUNDER FOR THE SERVICES GIVING RISE TO THE LIABILITY IN THE TWELVE MONTHS PRECEDING THE FIRST INCIDENT OUT OF WHICH THE LIABILITY AROSE. THE

FOREGOING LIMITATION WILL APPLY WHETHER AN ACTION IS IN CONTRACT OR TORT AND REGARDLESS OF THE THEORY OF LIABILITY, BUT WILL NOT LIMIT CUSTOMER'S AND ITS AFFILIATES’ PAYMENT OBLIGATIONS UNDER THE “FEES AND PAYMENT” SECTION ABOVE.

10.2 Exclusion of Consequential and Related Damages. IN NO EVENT WILL EITHER PARTY OR ITS AFFILIATES HAVE

ANY LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT FOR ANY LOST PROFITS, REVENUES,

GOODWILL, OR INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, COVER, BUSINESS INTERRUPTION OR

PUNITIVE DAMAGES, WHETHER AN ACTION IS IN CONTRACT OR TORT AND REGARDLESS OF THE THEORY

OF LIABILITY, EVEN IF A PARTY OR ITS AFFILIATES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR IF A PARTY’S OR ITS AFFILIATES’ REMEDY OTHERWISE FAILS OF ITS ESSENTIAL PURPOSE.

THE FOREGOING DISCLAIMER WILL NOT APPLY TO THE EXTENT PROHIBITED BY LAW.

11. TERM AND TERMINATION

11.1 Term of Agreement. This Agreement commences on the date Customer first accepts it and continues until all subscriptions hereunder have expired or have been terminated.

11.2 Term of Purchased Subscriptions. The term of each subscription shall be as specified in the applicable Order Form. Except as otherwise specified in an Order Form, subscriptions will automatically renew for additional one year terms, unless either party gives the other written notice (email acceptable) at least 30 days before the end of the relevant subscription term. Except as expressly provided in the applicable Order Form, renewal of promotional or one-time priced subscriptions will be at SFDC’s applicable list price in effect at the time of the applicable renewal. Notwithstanding anything to the contrary, any renewal in which subscription volume or subscription length for any Services has decreased from the prior term will result in re-pricing at renewal without regard to the prior term’s per-unit pricing.

11.3 Termination. A party may terminate this Agreement for cause (i) upon 30 days written notice to the other party of a material breach if such breach remains uncured at the expiration of such period, or (ii) if the other party becomes the subject of a petition in bankruptcy or any other proceeding relating to insolvency, receivership, liquidation or assignment for the benefit of creditors.

11.4 Refund or Payment upon Termination. If this Agreement is terminated by Customer in accordance with the “Termination” section above, SFDC will refund Customer any prepaid fees covering the remainder of the term of all Order Forms after the effective date of termination. If this Agreement is terminated by SFDC in accordance with the “Termination” section above, Customer will pay any unpaid fees covering the remainder of the term of all Order Forms to the extent permitted by applicable law. In no event will termination relieve Customer of its obligation to pay any fees payable to SFDC for the period prior to the effective date of termination.

SFDC-MSA, October 16, 2023 Page 8 of 15

11.5 Surviving Provisions. The sections titled “Free Services,” “Fees and Payment,” “Proprietary Rights and Licenses,” “Confidentiality,” “Disclaimers,” “Mutual Indemnification,” “Limitation of Liability,” “Refund or Payment upon Termination,” “Removal of Content and Non-SFDC Applications,” “Surviving Provisions” and “General Provisions” will survive any termination or expiration of this Agreement, and the section titled “Protection of Customer Data” will survive any termination or expiration of this Agreement for so long as SFDC retains possession of Customer Data.

12. GENERAL PROVISIONS

12.1 Export Compliance. The Services, Content, other SFDC technology, and derivatives thereof may be subject to export laws and regulations of the United States and other jurisdictions. SFDC and Customer each represents that it is not on any U.S. government denied-party list. Customer will not permit any User to access or use any Service or Content in a U.S.-embargoed country or region (currently the Crimea, Luhansk or Donetsk regions, Cuba, Iran, North Korea, or Syria) or as may be updated from time to time at https://www.salesforce.com/company/legal/compliance/ or in violation of any U.S. export law or regulation.

12.2 Anti-Corruption. Neither party has received or been offered any illegal or improper bribe, kickback, payment, gift, or thing of value from an employee or agent of the other party in connection with this Agreement. Reasonable gifts and entertainment provided in the ordinary course of business do not violate the above restriction.

12.3 Entire Agreement and Order of Precedence. This Agreement is the entire agreement between SFDC and Customer regarding Customer’s use of Services and Content and supersedes all prior and contemporaneous agreements, proposals or representations, written or oral, concerning its subject matter. The parties agree that any term or condition stated in a Customer purchase order or in any other Customer order documentation (excluding Order Forms) is void. In the event of any conflict or inconsistency among the following documents, the order of precedence shall be: (1) the applicable Order Form, (2) this Agreement, and (3) the Documentation. Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.

12.4 Relationship of the Parties. The parties are independent contractors. This Agreement does not create a partnership, franchise, joint venture, agency, fiduciary or employment relationship between the parties. Each party will be solely responsible for payment of all compensation owed to its employees, as well as all employment-related taxes.

12.5 Third-Party Beneficiaries. There are no third-party beneficiaries under this Agreement.

12.6 Waiver. No failure or delay by either party in exercising any right under this Agreement will constitute a waiver of that right.

12.7 Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law, the provision will be deemed null and void, and the remaining provisions of this Agreement will remain in effect.

12.8 Assignment. Neither party may assign any of its rights or obligations hereunder, whether by operation of law or otherwise, without the other party’s prior written consent (not to be unreasonably withheld); provided, however, either party may assign this Agreement in its entirety (including all Order Forms), without the other party’s consent to its Affiliate or in connection with a merger, acquisition, corporate reorganization, or sale of all or substantially all of its assets. Notwithstanding the foregoing, if a party is acquired by, sells substantially all of its assets to, or undergoes a change of control in favor of, a direct competitor of the other party, then such other party may terminate this Agreement upon written notice. In the event of such a termination, SFDC will refund Customer any prepaid fees covering the remainder of the term of all subscriptions for the period after the effective date of such termination. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties, their respective successors and permitted assigns.

12.9 SFDC Contracting Entity, Notices, Governing Law, and Venue. The SFDC entity entering into this Agreement, the address to which Customer should direct notices under this Agreement, the law that will apply in any dispute or lawsuit arising out of or in connection with this Agreement, and the courts that have jurisdiction over any such dispute or lawsuit, depend on where Customer is domiciled.

SFDC-MSA, October 16, 2023 Page 9 of 15

For Customers domiciled in North or South America
If Customer is
domiciled in:

The SFDC entity
entering into this
Agreement is:

Notices should be addressed to: Governing law is: Courts with exclusive
jurisdiction are:

Any country
other than
Brazil or
Canada
Salesforce, Inc. (f/k/a
salesforce.com, inc.),
a Delaware
corporation
Salesforce Tower, 415 Mission
Street, 3rd Floor, San Francisco,
California, 94105, U.S.A., attn: VP,
Worldwide Sales Operations, with a
copy to attn: General Counsel
California and
controlling United
States federal law
San Francisco,
California,
U.S.A.

Brazil Salesforce Tecnologia
Ltda.

Av. Jornalista Roberto Marinho,
85, 14º Andar - Cidade Monções,
CEP 04576-010 São Paulo - SP
Brazil São Paulo, SP,
Brazil
Canada salesforce.com
Canada Corporation, a
Nova Scotia
corporation
Salesforce Tower, 415 Mission
Street, 3rd Floor, San Francisco,
California, 94105, U.S.A., attn: VP,
Worldwide Sales Operations, with a
copy to attn: General Counsel
Ontario and
controlling
Canadian federal
law
Toronto, Ontario,
Canada
For Customers domiciled in Europe, the Middle East, or Africa If Customer is
domiciled in:

The SFDC entity
entering into this
Agreement is:

Notices should be addressed to: Governing law is: Courts with exclusive
jurisdiction are:

Any country
other than
France,
Germany, Italy,
Spain, or the
United
Kingdom
SFDC Ireland
Limited, a limited
liability company
incorporated in
Ireland
Salesforce UK Limited, Floor 26
Salesforce Tower, 110 Bishopsgate,
London, EC2N 4AY, United
Kingdom, attn: VP, Sales
Operations, with a copy to attn.:

Legal Department - Salesforce
Tower, 60 R801, North Dock,
Dublin, Ireland
England London, England
France salesforce.com
France, a French
S.A.S company with a
share capital of
37,000 €, registered
with the Paris Trade
Registry under
number 483 993 226
RCS Paris, Registered
office: 3 Avenue
Octave Gréard, 75007
Paris, France
Salesforce UK Limited, Floor 26
Salesforce Tower, 110 Bishopsgate,
London, EC2N 4AY, United
Kingdom, attn: VP, Sales
Operations, with a copy to attn.:

Legal Department - Service
Juridique, 3 Avenue Octave Gréard,
75007 Paris, France
France Paris, France
Germany salesforce.com
Germany GmbH, a
limited liability
company,
incorporated in
Germany
Salesforce UK Limited, Floor 26
Salesforce Tower, 110 Bishopsgate,
London, EC2N 4AY, United
Kingdom, attn: VP, Sales
Operations, with a copy to attn.:

Legal Department -
Erika-Mann-Strasse 31-37, 80636
München, Germany
Germany Munich,
Germany
SFDC-MSA, October 16, 2023 Page 10 of 15

Italy salesforce.com Italy
S.r.l., an Italian
limited liability
company having its
registered address at
Piazza Filippo Meda
5, 20121 Milan (MI),
VAT / Fiscal code n.
04959160963
Salesforce UK Limited, Floor 26
Salesforce Tower, 110 Bishopsgate,
London, EC2N 4AY, United
Kingdom, attn: VP, Sales
Operations, with a copy to attn.:

Legal Department
Italy Milan, Italy
Spain Salesforce Systems
Spain, S.L., a limited
liability company
incorporated in Spain
Salesforce UK Limited, Floor 26
Salesforce Tower, 110 Bishopsgate,
London, EC2N 4AY, United
Kingdom, attn: VP, Sales
Operations, with a copy to attn.:

Legal Department - Paseo de la
Castellana 79, Madrid, 28046, Spain
Spain Madrid, Spain
United
Kingdom
Salesforce UK
Limited, a limited
liability company
incorporated in
England
Salesforce UK Limited, Floor 26
Salesforce Tower, 110 Bishopsgate,
London, EC2N 4AY, United
Kingdom, attn: VP, Sales
Operations, with a copy to attn:

Legal Department, Salesforce UK
Limited, Floor 26 Salesforce Tower,
110 Bishopsgate, London, EC2N
4AY, United Kingdom
England London, England
For Customers domiciled in Asia or the Pacific Region
If Customer is
domiciled in:

The SFDC entity
entering into this
Agreement is:

Notices should be addressed to: Governing law is: Courts with exclusive
jurisdiction are:

Any country
other than
Australia,
India, Japan, or
New Zealand
salesforce.com
Singapore Pte Ltd, a
Singapore private
limited company
5 Temasek Boulevard #13-01,
Suntec Tower 5, Singapore, 038985,
attn: Director, APAC Sales
Operations, with a copy to attn:

General Counsel
Singapore Singapore
Australia or
New Zealand
SFDC Australia Pty
Ltd
Salesforce Tower, Level 39, 180
George St, Sydney NSW 2000, attn:

Senior Director, Finance with a copy
to attn: General Counsel
New South Wales,
Australia
New South
Wales, Australia
India Salesforce.com India
Private Limited, a
company incorporated
under the provisions
of the Companies Act,
1956 of India
Salesforce.com India Private
Limited
Torrey Pines, 3rd Floor,
Embassy Golflinks Software
Business Park
Bengaluru, Karnataka 560071,
India
India Bengaluru , India
Japan Salesforce Japan Co.,
Ltd. (f/k/a Kabushiki
Kaisha
Salesforce.com), a
Japan corporation
1-1-3, Marunouchi, Chiyoda-ku,
Tokyo 100-0005, Japan, attn: Senior
Director, Japan Sales Operations,
with a copy to attn: General Counsel
Japan Tokyo, Japan
SFDC-MSA, October 16, 2023 Page 11 of 15

12.10 Manner of Giving Notice. Except as otherwise specified in this Agreement, all notices related to this Agreement will be in writing and will be effective upon (a) personal delivery, (b) the second business day after mailing, or (c), except for notices of termination or an indemnifiable claim (“Legal Notices”), which shall clearly be identifiable as Legal Notices, the day of sending by email. Billing-related notices to Customer will be addressed to the relevant billing contact designated by Customer.

All other notices to Customer will be addressed to the relevant Services system administrator designated by Customer.

12.11 Agreement to Governing Law and Jurisdiction. Each party agrees to the applicable governing law above without regard to choice or conflicts of law rules, and to the exclusive jurisdiction of the applicable courts above.

12.12 Local Law Requirements: France.

With respect to Customers domiciled in France, the following provisions shall be applicable :
(1) Section 8.2 “SFDC Warranties” is replaced by the following :

8.2 SFDC Warranties. During an applicable subscription term (a) this Agreement, the Order Forms and the Documentation will accurately describe the applicable administrative, physical, and technical safeguards for protection of the security, confidentiality and integrity of Customer Data, (b) SFDC will not materially decrease the overall security of the Services, (c) the Services will perform materially in accordance with the applicable Documentation, and (d) subject to the “Integration with Non-SFDC Applications” section above, SFDC will not materially decrease the overall functionality of the Services. (2) a new Section 12.12.1 is added as follows:

12.12.1 PGSSI-S. To the extent Customer is subject to Article L.1111-8 (or any successor thereto) of the French public health code (Code de la Santé Publique), Customer shall abide by the Global Information Security Policy for the Healthcare Sector (PGSSI-S) pursuant to Article L.1110-4-1 (or any successor thereto) of the aforementioned code. (3) a new Section 12.12.2 is added as follows :

12.12.2 Exclusions. To the extent permitted under applicable law, the provisions of Article 1222 and 1223 of the French Civil Code shall in no event be applicable.
(4) a new Section 12.12.3 is added as follows :

12.12.3 Language. The Parties agree that this Agreement and/or any Documentation and other information or policies referenced or attached to this Agreement may be in English. (5) a new Section 12.12.4 is added as follows :

12.12.4 Independence Towards Third Parties. For the avoidance of doubt, any third parties, including those Customer contracted with to provide consulting and/or implementation services in relation to the Services, are independent of SFDC and SFDC shall in no event be responsible for their acts or omissions, including when such acts or omissions impact Customer’s use of the Services.
(6) in the event of any conflict between any statutory law in France applicable to Customer, and the terms and conditions of this Agreement, the applicable statutory law shall prevail.

12.13 Local Law Requirements: Germany. With respect to Customers domiciled in Germany, Section 8 “REPRESENTATIONS, WARRANTIES, EXCLUSIVE REMEDIES AND DISCLAIMERS”, Section 9.3 “Exclusive Remedy”, and Section 10 “LIMITATION OF LIABILITY” of this Agreement are replaced with the following sections respectively:
8 WARRANTIES FOR CUSTOMERS DOMICILED IN GERMANY

8.1 Agreed Quality of the Services. SFDC warrants that during an applicable subscription term (a) this Agreement, the Order Forms and the Documentation will accurately describe the applicable administrative, physical, and technical safeguards for protection of the security, confidentiality and integrity of Customer Data, (b) SFDC will not materially decrease the overall security of the Services, (c) the Services will perform materially in accordance with the applicable Documentation, and (d) subject to the “Integration with Non-SFDC Applications” section above, SFDC will not materially decrease the overall functionality of the Services.

SFDC-MSA, October 16, 2023 Page 12 of 15

8.2 Content. SFDC is not designating or adopting Content as its own and assumes no warranty or liability for Content. The parties agree that the “Reporting of Defects”, “Remedies resulting from Defects” and “Exclusions” section shall apply accordingly to SFDC’s responsibility in the event SFDC is deemed responsible for Content by a court of competent jurisdiction.

8.3 Reporting of Defects. Customer shall report any deviation of the Services from the “Agreed Quality of the Services” section (“Defect”) to SFDC in writing without undue delay and shall submit a detailed description of the Defect or, if not possible, of the symptoms of the Defect. Customer shall forward to SFDC any useful information available to Customer for rectification of the Defect.

8.4 Remedies Resulting from Defects. SFDC shall rectify any Defect within a reasonable period of time. If such rectification fails, Customer may terminate the respective Order Form provided that SFDC had enough time for curing the Defect. In the “Refund or Payment upon Termination” section, sentence 1 and sentence 3 shall apply accordingly. If SFDC is responsible for the Defect or if SFDC is in default with the rectification, Customer may assert claims for the damage caused in the scope specified in the “Limitation of Liability” section below.

8.5 Defects in Title. Defects in title of the Services shall be handled in accordance with the provisions of Clause 9 “Mutual Indemnification”.

8.6 Exclusions. Customer shall have no claims under this Clause 8 “Warranty” if a Defect was caused by the Services not being used by Customer in accordance with the provisions of this Agreement, the Documentation and the applicable Order Forms.

9.3 Liability resulting from Indemnification for Customers domiciled in Germany. The below “Limitation of Liability” section shall apply to any claims resulting from this “Mutual Indemnification” section.

10. LIMITATION OF LIABILITY FOR CUSTOMERS DOMICILED IN GERMANY

10.1 Unlimited Liability. The Parties shall be mutually liable without limitation (a) in the event of willful misconduct or gross negligence, (b) within the scope of a guarantee taken over by the respective party, (c) in the event that a defect is maliciously concealed, (d) in case of an injury to life, body or health,
(e) according to the German Product Liability Law.

10.2 Liability for Breach of Cardinal Duties. If cardinal duties are infringed due to slight negligence and if, as a consequence, the achievement of the objective of this Agreement including any applicable Order Form is endangered, or in the case of a slightly negligent failure to comply with duties, the very discharge of which is an essential prerequisite for the proper performance of this Agreement (including any applicable Order Form), the parties’ liability shall be limited to foreseeable damage typical for the contract. In all other respects, any liability for damage caused by slight negligence shall be excluded.

10.3 Liability Cap. Unless the parties are liable in accordance with “Unlimited Liability” section above, in no event shall the aggregate liability of each party together with all of its Affiliates arising out of or related to this Agreement exceed the total amount paid by Customer and its Affiliates hereunder for the Services giving rise to the liability in the 12 months preceding the first incident out of which the liability arose. The foregoing limitation will not limit Customer’s and its Affiliates’ payment obligations under the “Fees and Payment” section above.

10.4 Scope. With the exception of liability in accordance with the “Unlimited Liability” section, the above limitations of liability shall apply to all claims for damages, irrespective of the legal basis including claims for tort damages. The above limitations of liability also apply in the case of claims for a party’s damages against the respective other party’s employees, agents or bodies.

12.14 Local Law Requirements: Italy. With respect to Customers domiciled in Italy, Section 5.2 “Invoicing and Payment”, Section

5.3 “Overdue Charges,” and Section 12.2 “Anti Corruption” of this Agreement are replaced with the following sections respectively:

5.2. Invoicing and Payment

5.2.1 Invoicing and Payment. Fees will be invoiced in advance and otherwise in accordance with the relevant Order Form.

Unless otherwise stated in the Order Form, fees are due net 30 days from the invoice date. The parties acknowledge that invoices are also be submitted electronically by SFDC in accordance with the “Electronic Invoicing” section below through the Agenzia delle Entrate’s Exchange System (SDI – Sistema di Interscambio) and any delay due to the SDI shall not affect the SFDC-MSA, October 16, 2023 Page 13 of 15

foregoing payment term. Customer shall be responsible for providing complete and accurate billing and contact information to SFDC and shall notify SFDC of any changes to such information.

5.2.2 Electronic Invoicing. The invoice will be issued in electronic format as defined in article 1, paragraph 916, of Law no. 205 of December 27, 2017, which introduced the obligation of electronic invoicing, starting from January 1, 2019, for the sale of goods and services performed between residents, established or identified in the territory of the Italian State. To facilitate such electronic invoicing, Customer shall provide to SFDC at least the following information in writing: Customer full registered company name, registered office address, VAT number, tax/fiscal code and any additional code and/or relevant information required under applicable law. In any event, the parties shall cooperate diligently to enable such electronic invoicing process. Any error due to the provision by Customer of incorrect or insufficient invoicing information preventing (a) SFDC to successfully submit the electronic invoice to the SDI or (b) the SDI to duly and effectively process such invoice or (c) which, in any event, requires SFDC to issue an invoice again, shall not result in an extension of the payment term set out in the “Invoicing and Payment” section above, and such term shall still be calculated from the date of the original invoice. SFDC reserves the right to provide any invoice copy in electronic form via email in addition to the electronic invoicing described herein.

5.2.3 Split Payment. If subject to the “split payment” regime, Customer shall be exclusively responsible for payment of any VAT amount due, provided that Customer shall confirm to SFDC the applicability of such regime and, if applicable, Customer shall provide proof of such VAT payment to SFDC and, if applicable, Customer shall provide proof of such VAT payment to SFDC.

5.3 Overdue Charges. Subject to the “Payment Disputes” section below, if any invoiced amount is not received by SFDC by the due date, then without limiting SFDC’s rights or remedies, those charges, without the need for notice of default, may accrue late interest at the rate of 1.5% of the outstanding balance per month, or the maximum rate permitted by law (Legislative Decree no. 231/2002), whichever is lower and/or (b) SFDC may condition future subscription renewals and Order Forms on payment terms shorter than those specified in the “Invoicing and Payment” section above.

12.2 Anti-Corruption.

12.2.1 Anti-Corruption. Neither party has received or been offered any illegal or improper bribe, kickback, payment, gift, or thing of value from an employee or agent of the other party in connection with this Agreement. Reasonable gifts and entertainment provided in the ordinary course of business do not violate the above restriction.

12.2.2 Code of Conduct and Organization, Management and Control Model. Customer acknowledges that SFDC has adopted an Organization, Management and Control Model pursuant to Legislative Decree 231/2001 to prevent crimes provided for therein and commits to comply with the principles contained in the above Legislative Decree 231/2001 and in the SFDC Code of Conduct which is available at the following link: https://www.salesforce.com/content/dam/we b/en_us/www/documents/legal/sfdc-code-of-conduct.pdf. Customer also acknowledges and agrees that the violation of the principles and the provisions contained in Legislative Decree 231/2001 and in the SFDC Code of Conduct by Customer may entitle SFDC, based on the severity of the violation, to terminate this Agreement for cause as set out in Section 11.3(i) above.

12.15 Local Law Requirements: Spain. With respect to Customers domiciled in Spain, in the event of any conflict between any statutory law in Spain applicable to Customer, and the terms and conditions of this Agreement, the applicable statutory law shall prevail.

12.16 Local Law Requirements: India. With respect to Customers domiciled in India, the following shall apply:

12.16.1 Venue and Arbitration
A. Subject to the “Arbitration” Section below, the courts located in Bengaluru , India shall have exclusive jurisdiction over any dispute relating to this Agreement, and each party hereby consents to the exclusive jurisdiction of such courts. Without prejudice to the generality of the foregoing, the courts at Bengaluru, India shall have exclusive jurisdiction on matters arising from, relating to, or in connection with an award made under the “Arbitration” Section below.

B. Arbitration. In the event of any dispute, controversy or claim between the Parties hereto arising out of or relating to this Agreement, the Parties shall first seek to resolve the dispute in good faith through informal discussion. If such dispute, controversy, or claim cannot be resolved informally within a period of 10 (ten) business days from the date on which the dispute arose, the Parties agree that it shall be settled by binding arbitration to be held before a panel consisting of 3 (three) arbitrators, where each Party shall appoint an arbitrator and such arbitrators shall appoint the third and presiding arbitrator.

SFDC-MSA, October 16, 2023 Page 14 of 15

The arbitration shall be conducted in accordance with provisions of the (Indian) Arbitration and Conciliation Act, 1996, as amended from time to time (“Arbitration Act”). The seat and venue of the arbitration shall be Bengaluru , India. The language of the arbitration shall be English. The Parties agree that any of them may seek interim measures under section 9 of the Arbitration Act, including injunctive relief in relation to the provisions of this Agreement or the Parties' performance of it from courts in Bengaluru, India, without prejudice to any other right the Parties may have under the Arbitration Act and other applicable laws. The arbitration panel's decision shall be final, conclusive and binding on the parties to the arbitration. The Parties shall each pay one-half of the costs and expenses of such arbitration, and each shall separately pay its respective counsel fees and expenses. The prevailing Party may, in the judgement of the arbitration panel, be entitled to recover its fees and expenses. All dispute resolution proceedings, all matters pertaining to such proceedings and all documents and submissions made pursuant thereto shall be strictly confidential and subject to the provisions of “Confidentiality” Section of this Agreement.

12.16.2 Section 5.2 “Invoicing and Payment” of this Agreement is replaced with the following section:

5.2 Invoicing and Payment

5.2.1 Invoicing and Payment. Unless otherwise stated in the relevant Order Form, fees (i) will be invoiced in advance, and (ii) are due net 30 days from the invoice date.. The parties acknowledge that invoices are also to be submitted electronically by SFDC in accordance with the “Electronic Invoicing” section below through the Government of India’s e-invoicing system (“GST Portal”) and any delay due to such submission shall not affect the foregoing payment term. Customer shall be responsible for providing complete and accurate billing and contact information to SFDC and shall notify SFDC of any changes to such information.

5.2.2 Electronic Invoicing. Customer shall provide to SFDC at least the following information in writing to facilitate electronic invoicing: Customers full registered company/legal entity name, registered office address, goods and services tax identification number, address and/or relevant information required under applicable law. In any event, the parties shall cooperate diligently to enable such electronic invoicing process. Any error/delay in issuance of the electronic invoice due to:
(a) the provision by Customer of incorrect or insufficient invoicing information preventing SFDC from successfully submitting the electronic invoice to the GST Portal; or (b) the GST Portal and/or any other government authority (or their designated agent/agency) not being able to duly and effectively process such invoice; or (c) any event which requires SFDC to issue an invoice again; shall not result in an extension of the payment term set out in the “Invoicing and Payment” section above, and such term shall still be calculated from the date of the original invoice. SFDC reserves the right to provide any invoice copy in electronic form via email in addition to the electronic invoicing described herein.

12.17 Local Law Requirements: United Kingdom. With respect to Customers domiciled in the United Kingdom, Section

12.3 “Entire Agreement and Order of Precedence” of this Agreement is replaced with the following section:

12.3 Entire Agreement and Order of Precedence. This Agreement is the entire agreement between SFDC and Customer regarding Customer’s use of Services and Content and supersedes all prior and contemporaneous agreements, proposals or representations, written or oral, concerning its subject matter. No representation, undertaking or promise shall be taken to have been given or be implied from anything said or written in negotiations between the parties prior to this Agreement except as expressly stated in this Agreement. Neither party shall have any remedy in respect of any untrue statement made by the other upon which that party relied in entering this Agreement (unless such untrue statement was made fraudulently) and that party's only remedies shall be for breach of contract as provided in this Agreement. The parties agree that any term or condition stated in a Customer purchase order or in any other Customer order documentation (excluding Order Forms) is void. In the event of any conflict or inconsistency among the following documents, the order of precedence shall be: (1) the applicable Order Form, (2) this Agreement, and (3) the Documentation. Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.

SFDC-MSA, October 16, 2023 Page 15 of 15

3 / 4
Any subscription product pricing in this Order Form that differs from that under Pricing Schedule, that is for a product not listed under Pricing Schedule or that does not have a Pricing Schedule on the Order Form is a one-time discount applicable to this Order Form only, notwithstanding anything to the contrary in the MSA. Any future purchases of such subscription products (including add-on subscriptions) shall be at the pricing under Pricing Schedule, or if the product is not listed under Pricing Schedule, at Salesforce's then-current list pricing for such product.

Product Special Terms
NOTICE - Contacts
Overage fees will be billed monthly, in arrears, for each month that Customer exceeds its then-current volume.

NOTICE - Usage Billing
Usage fees are billable monthly, in arrears.

NOTICE - Mobile Messaging
Customer acknowledges and agrees to indemnify, defend, and hold Salesforce, aggregators (as defined in the applicable Security, Privacy, and Architecture Documentation), and their respective affiliates harmless from and against any claim or loss arising from or relating to Customer's use of SMS and MMS messaging or Customer Data sent via SMS and MMS messaging. ANY LIMITATION OF

LIABILITY SET FORTH IN THE AGREEMENT WILL NOT APPLY WITH RESPECT TO THE INDEMNIFICATION OBLIGATIONS SET FORTH ABOVE. Note: Only first instance messages (e.g., STOP, QUIT, CANCEL, END, UNSUBSCRIBE as the first word), as described in the Documentation, will stop recipients from receiving messages.

SMS/MMS Mobile Messages
A detailed description of SMS/MMS Mobile Messages and how they may be used, including the corresponding multipliers by market, can be found at https://sfdc.co/mc-multipliers. The following terms apply to this product: NOTICE - Overage Billing. For Customers with Contract Start Dates beginning on or after September 1, 2022: Multipliers are subject to change upwards or downwards at any time, notwithstanding anything to the contrary in the Main Services Agreement. SFDC will provide Customer with at least 30 days’ notice of any increase in multipliers, and any such increase will not apply until after the expiration of the applicable notice period.

Super Messages - Excluding SMS/MMS
A detailed description of Super Messages - excluding SMS/MMS, and how they may be used, can be found at https://sfdc.co/mc-multipliers.

SSL Certificate
Customer understands that SSL Certificate cannot be provisioned until Sender Authentication Package (SAP) provisioning is complete.

Customer shall work with SFDC and provide timely cooperation to complete the SAP provisioning, and understands that SSL Certificate provisioning may take up to 4 weeks after SAP is provisioned.

4 / 4
Purchase Order Information
Is a Purchase Order (PO) required for the purchase or payment of the products on this Order Form?(Customer to complete) [ ] No
[ ]  Yes - Please complete below
PO Number:

PO Amount:

Upon signature by Customer and submission to Salesforce, this Order Form shall become legally binding unless this Order Form is rejected by Salesforce for any of the following reasons: (1) the signatory below does not have the authority to bind Customer to this Order Form, (2) changes have been made to this Order Form (other than completion of the purchase order information and the signature block), or (3) the requested purchase order information or signature is incomplete or does not match our records or the rest of this Order Form. Subscriptions are non-cancelable before their Order End Date. This Order Form is governed by the terms of the Salesforce MSA found at https://www.salesforce.com/company/msa.jsp, unless (i) Customer has a written MSA executed by Salesforce for such Services as referenced in the Documentation, in which case such written Salesforce MSA will govern or (ii) otherwise set forth herein. Additional information related to the Services may be found in the Documentation at https://sfdc.co/ptd. For the avoidance of doubt, the applicable MSA takes precedence over the Documentation.

Confidential and proprietary. © Copyright 2000-2022 Salesforce, Inc. All rights reserved.

Staff Report Item 6
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Inaara Muhammad, Manager of Energy Programs SUBJECT: Update on 3CE’s Energy Programs
DATE: February 12, 2025
RECOMMENDATION:

Receive an update on 3CE’s Energy Programs.

BACKGROUND:
3CE’s Energy Programs have been administered since 2019 to support 3CE’s mission by serving the Central Coast community with incentives to engage in electrification initiatives, strengthen the local economy, and reduce greenhouse gas emissions. The Energy Programs portfolio has undergone several iterations to improve community-wide accessibility and achieve parity for priority communities.

Currently, 3CE offers 11 programs and concierge services to support residential, commercial, and public agency electrification efforts in the transportation, building, and agricultural sectors.

DISCUSSION/ANALYSIS:

As part of 3CE’s commitment to customers, 3CE staff continually evaluate Energy Programs’ performance by tracking several key indicators and use this analysis to improve the impact of 3CE’s Energy Programs. This dedication to continuous improvement is reflected in the Energy Programs Update for FY 2023-24 (Attachment 1), and in the table below.

3CE’s Energy Programs’ Incentives & Highlights
$11 million in incentives across 11 programs and support services (1.8 million increase from prior FY 2022-23)
FY 2022-23 FY 2023-24 Highlights
Heat Pump Water
Heater & HVAC Units
243 units 396 units Ensured uninterrupted program operations during TECH funding uncertainties
All-Electric New
Construction
249 units 460 units Expanded program to include incentives for all-electric market-rate single and multifamily housing
E-buses 6 E-buses 18 E-buses Expanded program to allow up to five rebates per customer
Electric Vehicles 1,054 EVs 1,108 EVs 3,200 MT CO2e avoided, equivalent to over 709 gas cars off the road
EV Chargers 805 EV
Chargers
819 EV
Chargers
Over $2.1 million enabled in EV Charger
purchases and installation across 3CE service area
Ag Equipment 32 rebates 18 rebates Increased cap to allow two rebates per customer Battery Systems 0 kWh 131 kWh Launched Residential Battery Rebate program In FY 2023-24, 3CE supported various electrification initiatives for our Member Agencies.

FY 2023-24 Member Agency Program Participation
Plan Your Fleet Charge & Electrify Your Fleet
 City of Carpinteria
 City of Greenfield
 City of Marina
 City of Monterey
 City of San Luis Obispo
 City of Santa Maria
 City of Soledad
 County of Monterey
 County of Santa Barbara
 City of Capitola – 1 EV
 City of Carmel-By-The-Sea – 3 EVs
 City of Carpinteria – 10 L2s
 City of Goleta – 1 EV
 City of Santa Cruz – 4 EVs & 7 L2s
 City of San Luis Obispo – 10 EVs
 City of Santa Maria – 14 EVs and 13 L2s
 City of Watsonville – 3 EVs & 2 L3s
 County of Santa Barbara – 2 EVs & 28 L2s
 County of Santa Cruz – 6 EVs
The first quarter of FY 2024-25 began with strong participation in 3CE's Energy Programs. This is in part due to the new Customer Relationship Management (CRM) system, which allowed for no disruption to the agency’s energy programs offerings during the transition to a new fiscal year. The Energy Programs

Update for Q1 FY2024-25 (Attachment 2) shows highlights of the agency’s programs’ impact in the first quarter. Accomplishments include:
 The Residential Battery Rebate Program now supports 170 kWh of load shifting daily between 4- 9 pm.
 The Electrify Your Ride Program has already replaced 82 gas cars with electric vehicles.  The Ag Electrification Program has distributed rebates to small businesses in four separate counties in the 3CE service area.
 Plan Your Fleet and Reach Codes each have four Member Agencies enrolled with projects underway.
3CE’s Energy Programs Portfolio Analysis Update (Attachment 3) gives a more detailed status update of the individual Energy Programs for FY 2024-25. These status updates share a variety of program performance metrics including equipment incentivized, housing units electrified, dollars spent, and performance on equity (e.g., incentives and support for income-qualified customers.) The update also describes strategic initiatives currently underway to enhance the Energy Programs portfolio through pilots and new program offerings. Below are highlights of several strategic initiatives across Energy Programs’ focus areas.
 Transportation Electrification
- On December 11, 2024, the Policy Board approved an EV Charger Asset Pilot at 3CE’s offices located at 1026 Palm Street in San Luis Obispo. The project will include five parking spaces serviced by three L2 charging stations. The EV charging stations at the 1026 Palm Street office parking lot will allow 3CE to evaluate workplace charging and possible synergies with innovative management tools such as vehicle-to-load charging.  Building Electrification
- In November, 3CE hosted two community listening sessions to gather feedback on 3CE’s current Electrify Your Home program and potential improvements to the program’s design. As recommended by the CAC, the listening sessions collected feedback for five program design focus areas: Awareness, Evaluation, Installation, Rebates, and Post-Install Monitoring. Community feedback from the two events will inform future program improvements for Electrify Your Home.
 Ag Electrification
- 3CE staff are beginning to evaluate the potential for enhancements to the current Ag Electrification program, including whether it could benefit from a similar community workshop approach as is currently being conducted with the CAC for Electrify Your Home.

 Demand Response
- 3CE staff are preparing to launch the Hourly Flex Pricing Expanded Pilots 1 and 2 in Q1 2025. The pilot project is designed to enable significant customer savings and grid operational benefits through real-time, dynamic price signals and automated control of equipment for eligible agricultural, residential, and commercial customers.

FISCAL IMPACT:

There is no fiscal impact associated with this report and update.

CONCLUSION:
3CE’s Energy Programs support California’s Central Coast communities by providing funding and services to accelerate regional electrification, reduce greenhouse gas emissions, and benefit local customers and economies.

ATTACHMENT(S):

1. Energy Programs Update for FY 2023-24

2. Energy Programs Update for Q1 FY 2024-25

3. 3CE Energy Programs Portfolio Analysis Update

Energy Programs Updates
We serve our central coast community by providing reliable, affordable, clean electricity and electrification programs to reduce greenhouse gas emissions and strengthen our local economy.

Over 3,200 MT CO2e avoided
in FY 23/24
709
14 18
diesel buses off the
road with support of
E-Bus Program
gas cars off the road
with support of Electrify
Your Ride
ag equipment transitioned
to electric alternatives with
support of Agricultural
Electrification Program
*calculated using EPA and CARB reference data
• City of Carpinteria
• City of Greenfield
• City of Marina
• City of Monterey
• City of San Luis Obispo
• City of Santa Maria
• City of Soledad
• County of Monterey
• County of Santa Barbara
Plan Your Fleet
City of San Luis Obispo ..............

City of Santa Maria .....................

County of Santa Cruz .................

City of Capitola ...........................

City of Carmel-By-The-Sea .........

City of Goleta ..............................

City of Carpinteria .......................

County of Santa Barbara ............

City of Santa Cruz .......................

City of Watsonville ......................
10 EVs
14 EVs & 13 L2s
6 EVs
1 EV
3 EVs
1 EV
10 L2s
2 EVs & 28 L2s
4EVs & 7 L2s
3EVs & 2 L3s
Charge & Electrify Your Fleet
Winery in Santa Maria
$20,500
Ag Electrification Program
Affordable Housing in Marina
$165,000
New Construction Elec. Program
Santa Cruz City Schools
$157,000
E-Bus Program
$11M of incentive spend in FY
2023-24, a $1.8M increase
from prior FY
Community Program Participation
Program
FY 22/23 FY 23/24
Total Rebates
500
400
100
200
300
0 Electrify Your Home New Construction
243
396
249
460

Energy Programs Updates
FY 2024-25 Q1
We serve our central coast community by providing reliable, affordable, clean electricity and electrification programs to reduce greenhouse gas emissions and strengthen our local economy.

Over 142 MT CO2e avoided as of 1Q25
82 gas cars off the road 4
with support of
Electrify Your Ride
ag equipment transitioned
to electric alternatives with
support of Agricultural
Electrification Program
*calculated using EPA and CARB reference data
• City of Salinas
• City of San Luis Obispo
• City of Soledad
• County of Santa Barbara
Plan Your Fleet
County of Santa Barbara .................. 60 L2s
Charge & Electrify Your Fleet
Bee Farm in Santa Barbara
$64,829
Ag Electrification Program
ADU in San Luis Obispo
$165,000
New Construction Elec. Program
13 kW battery in Monterey
$6,500
Residential Battery Rebate Program
Reach Codes
City of Goleta - New Construction (underway)
City of San Luis Obispo - Existing Buildings Update (underway) City of Santa Cruz - Existing Buildings (underway)
County of Monterey - EV Charging Infrastructure (underway)

3CE’s Energy Programs Portfolio Update
This report provides an update on participation in Central Coast Community Energy’s (3CE) Energy Programs Portfolio with data collected through December 2024.

TRANSPORTATION ELECTRIFICATION
Electrify Your Ride Program
3CE’s Electrify Your Ride (EYR) program incentivizes residential and commercial electrification through rebates for the purchase or lease of an electric vehicle (EV), for purchase of Level 2 and Direct Current Fast Chargers, and for electrical work necessary to install chargers. In addition, EYR provides technical assistance for EV infrastructure build-out at publicly accessible commercial sites and at multifamily residential properties. The FY 2024-25 budget for EYR is $4.1 million.

Incentives are available on a first-come, first-served basis until funding is fully awarded. To promote greater adoption of transportation electrification in disadvantaged and low-income communities, higher incentive amounts are available for income-qualified customers and multifamily-unit buildings.

In FY 2024-25, EYR has distributed over $437,536 in rebates acrossfive counties, enabling over $5.7 million in electric vehicle and EV charger purchases.

Figure 1 (above): EYR funds distributed by county in FY 2024-25.

Figure 2 (above): EYR funds distributed by incentive type in FY 2024-25.

Figure 3 (above): EYR funds distributed to income-qualified applicants in FY 2024-25.

Tier 1 = 201 - 400% FPL; Tier 2 = < 200% FPL; Standard = 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 incentives to support the purchase of up to five all-electric buses. In FY 2024-25, the budget for the Electric Bus program is $1.4 million.

Applications are accepted 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 assure applicants 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 restrictions apply.

The program has not received applications so far in FY 2024-25. 3CE staff are actively engaging with the community to promote the program to interested schools, organizations, and transit authorities.

Plan Your Fleet Program
3CE’s Plan Your Fleet (PYF) program provides planning, design, and engineering consulting to Member Agencies to accelerate fleet electrification and EV charging infrastructure development across the Central Coast. The FY 2024-25 budget for Plan Your Fleet is $650,000.

The following jurisdictions have engaged with the Plan Your Fleet program so far this fiscal year:
 City of Salinas
 City of San Luis Obispo
 City of Soledad
 County of Santa Barbara
Additional jurisdictions are planning to engage in the coming months and will be included in the report as each scope is finalized.

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 funding support each fiscal year. 3CE’s 2024-25 CYF budget totals $1.0 million.

In FY 2024-25, the program has incentivized 60 chargers totaling $150,000.00.

Member Agency Equipment Type Quantity Total Incentive
COUNTY OF SANTA BARBARA Level 2 60 $150,000.00
TOTAL 60 $150,000.00
Table 1: Charge Your Fleet projects awarded in FY 2024-25.

Electrify Your Fleet Program
3CE’s Electrify Your Fleet (EYF) program incentivizes Member Agencies to purchase or lease electric fleet vehicles. Applications are accepted until program funds are spent. 3CE Member Agency applicants are

eligible to be awarded up to $150,000 in EYF incentives in a single program year. In FY 2024-25, 3CE has budgeted $1.1 million for EYF.

In FY 2024-25, the program has received one application to date and is actively engaging with Member Agencies who are in the process of purchasing electric fleet vehicles including the City of Carpinteria, City of Goleta, City of San Luis Obispo, City of San Juan Batista, City of Santa Cruz, City of Santa Maria, City of Watsonville, and County of Monterey. 3CE expects increased participation later in the fiscal year as Member Agencies who participated in FY 2023-24's Plan Your Fleet program implement their plans.

EV Charger Asset Pilot
The EV Charger Asset Pilot will improve access to public and workplace charging through 3CE owned and operated Level 2 EV chargers and Direct Current Fast Chargers.

On December 11, 2024, the Policy Board approved an EV Charger Asset Pilot at 3CE’s offices located at 1026 Palm Street in San Luis Obispo. The project will include five parking spaces serviced by three L2 charging stations. The EV charging stations at the 1026 Palm Street office parking lot will allow 3CE to evaluate workplace charging and possible synergies with innovative energy management approaches such as vehicle-to-load charging. 3CE staff will continue to share progress on the project in future staff reports.

BUILDING ELECTRIFICATION
Electrify Your Home Program
The Electrify Your Home (EYH) program provides 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, incentivizing making the switch to all-electric heat pump technology. The FY 2024-25 budget for EYH is $720,000 Contractors enrolled in TECH are provided education and training on electrification design and specifications, heat pump installation, building science, and sales and marketing for electric heat pumps at no cost. There are currently seventy-five (75) licensed contractors enrolled in the TECH program that work in 3CE’s service area.

On November 13, 2024, the Operations Board approved an amendment to 3CE’s contract with Energy Solutions, 3CE’s program administrator for Electrify Your Home. The amendment increased the not-to-exceed amount listed in the contract by $990,000 and extended the term of the agreement by eight months to allow for continued and uninterrupted services to support Electrify Your Home through the end of FY 2024-25.

In FY 2024-25, the EYH program distributed $133,100 in rebates to promote the installation of 21 Heat Pump HVAC units and 15 Heat Pump Water Heater Units.
3CE County Heat Pump HVAC
Units Installed
Heat Pump Water
Heater Units Installed
MONTEREY 7 6
SAN LUIS OBISPO 0 4
SANTA BARBARA 1 1
SANTA CRUZ 13 4
Table 2: Electrify Your Home installations by county.
3CE staff are actively collaborating with the Community Advisory Council to host community listening sessions to gather feedback on the current Electrify Your Home Program and potential improvements to the program’s design. Two listening sessions were hosted in November, and two additional listening sessions are scheduled in April. Community feedback from the events will inform future program improvements for Electrify Your Home across five program design focus areas: Awareness, Evaluation, Installation, Rebates, and Post-Install Monitoring.

New Construction Electrification Program
The New Construction Electrification Program (NCEP) provides housing developers and homeowners with incentives to build all-electric single and multifamily housing, including market- rate, affordable, farmworker, and disaster -rebuild housing types as well as Accessory Dwelling Units (ADUs). Qualifying projects must be fully electric including appliances for space heating, water heating and cooking. The FY 2024-25 budget for NCEP is $1.0 million.

So far in FY 2024-25, the program has distributed $35,000 across four counties to support construction of seven units.
3CE County
Market-Rate
Housing
Affordable
Housing
Accessory
Dwelling Units
(ADUs)
Disaster
Rebuilds
Total Units
Incentivized

SAN BENITO - - - - -
SAN LUIS OBISPO - - 2 - 2
SANTA BARBARA - - 2 - 2
SANTA CRUZ - - 2 - 2
MONTEREY - - 1 - 1
Table 3: All-electric construction supported via NCEP in FY 2024-25.

Reach Code Program
3CE’s Reach Code program launched October 1, 2022 to provide Member Agencies 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 2024-25, 3CE has budgeted $150,000 for the Reach Code program.

So far in FY 2024-25, 3CE is providing assistance to the following Member Agencies:

Member Agency Reach Code Type
City of Goleta New Construction (underway)
City of San Luis Obispo Existing Buildings (underway)
City of Santa Cruz Existing Buildings (complete)
Table 4: Reach Codes participation in FY 2024-25.

AGRICULTURAL ELECTRIFICATION
Agricultural Electrification Program
3CE’s Agricultural (Ag) Electrification program provides rebates to agricultural 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 offers technical assistance for EV infrastructure buildout at agricultural customer sites. The FY 2024-25 budget for Ag Electrification is $800,000.

Rebates for equipment with higher estimated GHG emissions avoidance and those benefiting small to medium sized agricultural businesses are supported with greater incentive levels. 3CE covers up to 50% of the cost for ag 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, with up to two rebates per customer per fiscal year.

So far in FY 2024-25, 3CE has distributed $188,174 in rebates to support five equipment purchases:

Electric Ag Equipment Qty Incentivized Recipients
Excavator 2  Bee Farm in County of Santa Barbara
 Winery in County of Santa Cruz
Tractor (standard) 2  Winery in County of Monterey
 Flower Farm in County of Santa Barbara
Forklift 1  Farm in County of San Benito
Table 5: Agricultural Electrification projects awarded in FY 2024-25. 100% of Agricultural Electrification Program incentives distributed so far in FY 2024-25 have been to small businesses who are 3CE customers.

County % of incentives distributed to small businesses
SAN BENITO 100%
SAN LUIS OBISPO 0%
SANTA BARBARA 100%
SANTA CRUZ 100%
MONTEREY 100%
TOTAL 100%
Table 6: Agricultural Electrification projects awarded to small businesses in FY 2024-25.

DEMAND RESPONSE / LOAD MANAGEMENT
Residential Battery Rebate Program
3CE’s Residential Battery Rebate program launched on July 16, 2024, to incentivize use of residential behind-the-meter battery storage systems. Rebates are provided for purchase of eligible batteries, qualifying installation hardware, and labor directly related to the battery system's installation. 3CE has set a goal of issuing four hundred (400)rebates per fiscal year, which equates to approximately 2.6 megawatts (MW) of load shifted, and an annual expenditure of $2M.

The program offers a $300 per kilowatt hour (kWh) base rebate for customers. A $500 per kilowatt hour (kWh) rebate is offered to Net Energy Metering (NEM) 1.0 and NEM 2.0 tariff customers who elect to transition to Net Billing Tariff (NBT) early. Additionally, the program offers a $500 per kilowatt hour (kWh) rebate for customers who are enrolled in the Medical Baseline program and are reliant on electricity to power medical devices. To promote adoption in disadvantaged and low-income communities, the program also offers a $500 per kilowatt hour (kWh) rebate for customers enrolled in CARE or FERA payment assistance programs.

As of January 2025, 3CE has received 123 applications for the program. Since launching, 3CE has distributed $111,100 in rebates to customers, with approximately 175 kWh of load shifted daily during the peak period of 4:00 pm to 9:00 pm.

Figure 4 (above): kWh of load shifted daily during the peak period of 4:00 pm to 9:00 pm per month.

Staff will present a report on the program’s performance over its first six months to the Community Advisory Council, Operations, and Policy Boards in 2025.

Hourly Flex Pricing Expanded Pilot 1 and 2
3CE is partnering with PG&E and its vendors in the Hourly Flex Pricing Pilot, which will offer 3CE customers a way to lower their energy costs by offering market-based pricing, that can be checked up to one week in advance, and then shifting load accordingly, which will be tracked on a monthly performance bill. At the end of each 12-month participation period, any total cost savings through load shifting would be credited to the customer via a check from 3CE.

The Hourly Flex Pricing Expanded Pilot 1 will be for agricultural 3CE customers and will include a one-time rebate for purchasing automation technology and software that responds to price signals, such as a controller for an irrigation pump.

The Hourly Flex Pricing Expanded Pilot 2 will be for commercial and residential customers.

OTHER STRATEGIC INITIATIVES
Customer Relationship Management System Integration
The new Customer Relationship Management (CRM) tool for program applications and management was successfully launched on October 1st, 2024. Existing program applications were kept open during the transition from FY 2023-24 to the current fiscal year. Additional usability features for 3CE remain under development.

Staff Report Item 7
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Jerri Strickland, Manager of Energy Policy SUBJECT: Regulatory Update
DATE: February 12, 2025
RECOMMENDATION:

This recommends the Operations Board of Directors receive the Regulatory Update.

DISCUSSION/ANALYSIS:

Please find attached 3CE’s Regulatory Update, providing the latest information on the following:
 Resource Adequacy (RA)
 Integrated Resource Planning (IRP)
 Interconnections
 Renewable Portfolio Standard (RPS)
 PG&E Rule 30 Application for Transmission Service
 Distribution Planning
 Preventing Disconnections
 Load Management Standards (LMS) and Real-Time Pricing  Power Source Disclosure (PSD) and Power Content Label (PCL)  Integrated Energy Policy Report (IEPR)
 Provider of Last Resort (POLR) and Emergency Transition Planning  Energy Resources Recovery Account (ERRA) Forecast
FISCAL IMPACT:

No financial impact by receiving this report.

CONCLUSION:

This is an informational item only.

ATTACHMENT(S):

1. Regulatory Update

Regulatory Update
February 12, 2025

2 Table of Contents
REGULATORY UPDATE...................................................................................................................................3 Resource Adequacy (RA) ..........................................................................................................................3 Integrated Resource Planning (IRP) .........................................................................................................3 Interconnections ......................................................................................................................................4 Renewable Portfolio Standard ..................................................................................................................4 PG&E Rule 30 Application for Transmission Service.................................................................................5 Distribution Planning ................................................................................................................................5 Preventing Disconnections .......................................................................................................................6 Load Management Standards (LMS) and Real-Time Pricing ....................................................................6 Power Source Disclosure (PSD) and Power Content Label (PCL) ..............................................................7 Integrated Energy Policy Report (IEPR).....................................................................................................7 Provider of Last Resort (POLR) and Emergency Transition Planning ........................................................8 Energy Resources Recovery Account (ERRA) Forecast .............................................................................8

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.

Sharply increasing prices for RA capacity and changes in the RA compliance paradigm have made the cost of compliance increase significantly. Over the past year the CPUC has also tied RA compliance to other unrelated functions such as CCA expansion into new communities.

Status
On December 5, 2024, the CPUC issued a final Track 2 Decision that adopted PG&E’s proposal to eliminate the current non-compensated self-showing process for LSEs with local RA under contract, introducing a new reporting requirement for LSEs to report local capacity directly to the Energy Division (ED).

The Decision also adopted CalCCA’s recommended central procurement entity (CPE) procurement timeline, which will provide LSEs with more certainty on procurement obligations, and delayed adoption of the 2026 Planning Reserve Margin (PRM) to allow for further analysis and stakeholder review. The PRM is a buffer added to RA obligations to ensure grid reliability, but the initially proposed 2026 PRM was significantly higher than prior years and raised stakeholder concerns related to its accuracy and affordability.

Pursuant to the Decision, ED issued a revised PRM study and two high level proposals for the 2026 PRM that better balance affordability and reliability. These proposals will be considered in Track 3 along with proposed refinements to the Slice of Day (SOD) framework and the development of an unforced capacity (UCAP) methodology to account for historical forced outage rates in RA values for certain resources.

All parties submitted Track 3 proposals on January 17, 2025. 3CE staff worked with CalCCA to develop proposals, including reintroducing the proposal for hourly load obligation trading, consolidating the new CPE data request with the existing RA filing process, and formalizing counting rules for co-located resources.

Next Steps
Opening comments on all Track 3 proposals, including proposals for the 2026 PRM, are due March 3.

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 and maintaining grid reliability.

Previous IRP cycles have produced three procurement mandates, which apply to 3CE and other CCAs.

On April 18, the CPUC issued an Amended Scoping Memo stating its intent to address additional issues in the IRP proceeding, including implementation of Assembly Bill (AB) 1373 which allows the Commission to request that the Department of Water Resources (DWR) serve as a central procurement entity (CPE) for certain long-lead time (LLT) resources, as well as development of a long term procurement framework entitled the Reliable

4 and Clean Power Procurement Program (RCPPP) that would replace the CPUC’s current ad hoc mandate structure.

Status
On January 10, the CPUC issued a Proposed Decision (PD) selecting resource portfolios for CAISO to analyze in its 2025-2026 Transmission Planning Process (TPP). Once studied, these resource portfolios will be used to assess the need for upgrades or additions to the transmission system. The PD recommends a base case portfolio with approximately 63 GW of new storage and clean energy to come online by 2035 and adopts a sensitivity portfolio that includes the maximum amount of LLT resources ordered for central procurement by DWR. The CPUC also requests that CAISO reserve deliverability for certain types of resources, including geothermal, biomass, offshore wind, and non-battery long duration energy storage, and consider transmission solutions to bring more out-of-state wind into the CAISO balancing authority area.

Staff supported CalCCA’s development of comments to the PD, submitted January 30, 2025.

Next Steps
3CE continues to await a staff proposal on the RCPPP design, expected in early 2025, and will evaluate it once available to assess impacts to 3CE’s procurement processes and advocate for improved coordination between the RA and IRP programs. 3CE’s next IRP filing will be due by November 1, 2025.

Interconnections – IPE 2023
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 the California Independent System Operator’s (CAISO) 2023 Interconnection Process Enhancements (IPE) initiative, focused on enhancing coordination of resource procurement, interconnection, and transmission planning to achieve state reliability and policy needs.

Status
On January 9, CAISO issued a draft final proposal for Track 3 of its IPE initiative, which proposes modifications to its process for allocating Transmission Plan Deliverability (TPD) to enable projects in the interconnection queue to provide resource adequacy. The proposal would prioritize deliverability for projects with signed Power Purchase Agreements (PPAs) and provide a pathway for projects without PPAs to receive conditional allocations that can be retained with an executed PPA. The proposed changes would alter the timing of the TPD allocation cycle, so 3CE will monitor the initiative for any impact to its current procurement process.

Comments on the draft proposal were due January 29, 2025.

Next Steps
CAISO will issue a final proposal and seek approval from the CAISO Board of Governors in March. If approved, the new TPD allocation process would begin in 2027.

Renewable Portfolio Standard - 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

5 renewable resources by 2030 and at least 65% of this procurement to be from long-term contracts. The CPUC initiated 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.

Status
On December 19, 2025 the CPUC voted to adopt its Decision on LSE 2024 RPS Procurement Plans. Pursuant to the Decision, 3CE submitted a final version of its RPS Procurement Plan on January 23 with minor revisions to its reported over procurement values, which represent 3CE’s exceedance of annual RPS requirements.

Next Steps
3CE will continue to track the RPS proceeding to remain updated on program requirements and monitor for a potential Amended Scoping Memo that would indicate whether the CPUC will consider extending the BioMAT program end date, currently set for December 2025. 3CE’s next RPS Procurement Plan is due July 1.

PG&E Rule 30 Application for Transmission Service– A.24-11-007 Issue
On November 21, 2024, PG&E submitted an Application requesting approval of a new rule for non-residential customers requesting interconnection at transmission-level voltages, citing a recent increase in customers such as data centers requesting transmission-level interconnections.

Current PG&E rules are focused on distribution-level interconnections. Under the proposed rule, the transmission-level customer would pay interconnection costs in advance until their forecasted load materials, at which point the costs would be collected through rates. 3CE is supporting a joint CCA coalition to participate in the proceeding to ensure that any resulting rule change supports improved interconnections, affordability, and does not negatively impact competition.

Status
On December 23, 2025, 3CE and 5 other CCAs submitted a response to PG&E’s Application to raise important issues for consideration within the proceeding, including safeguards against PG&E’s inherent market power advantages, collaboration with CCAs, affordability, and cost allocation.

The comments captured a main concern identified by 3CE that implementation of Rule 30 should not impact a customer’s choices for generation service. On January 2, PG&E filed a reply, arguing that many of the issues raised by the Joint CCAs are unnecessary for consideration within the proceeding.

Next Steps
A Prehearing Conference is scheduled for January 29 to address the scope and schedule of the proceeding.

Distribution Planning – R.21-06-017
Issue
In anticipation of extensive increases in Distributed Energy Resources (DER) due to California’s transportation electrification (TE) and climate goals, the CPUC initiated a Rulemaking to determine how to optimize DER integration within the distribution grid. This Rulemaking seeks to improve the transparency, accuracy, and efficacy of IOU distribution planning processes to better accommodate DER growth and mitigate the need for costly grid upgrades.

6 Status
To inform Track 2 of the proceeding, the CPUC directed a Future Grid Study of distribution system operational needs, barriers, and solutions to efficiently operate a high DER grid. On December 6, 2025 3CE staff worked with CalCCA to submit comments identifying CAISO visibility into DERs as an important priority for enabling behind-the-meter resources to be scheduled and dispatched in the wholesale market.

Next Steps
A PD on Track 2 issues, including grid operational needs, is expected for issuance in early 2025. Separately, the CPUC will hold a series of workshops throughout Q1 on various topics related to distribution planning, including equity, pending loads, and scenario planning. 3CE will continue to monitor the proceeding to stay informed of any changes to current grid planning efforts.

Preventing Disconnections – R.18-07-005
Issue
In 2020, the CPUC established temporary residential disconnection rate caps for IOUs initially set to expire in 2024, which were extended through July 1, 2025. These caps limit the number of customers to which the IOUs can shut off power due to nonpayment. On October 30, 2024, the CPUC filed an amended Scoping Memo for Phase 2 of the proceeding, which will address residential disconnections, arrearage management programs, and disconnection protections during extreme weather events.

Status
The CPUC asked in its scoping memo for stakeholders, including IOUs, CCAs, and other parties, to respond to questions related to Senate Bill (SB) 1142, which established the Arrearage Management Program (AMP), and disconnection practices during extreme weather events. Party comments filed in November and December provided input on reducing residential disconnections and improving reconnection processes. CalCCA submitted comments to emphasize the need for equitable treatment of CCAs in disconnection and arrearage management policies and importance of clear guidelines and customer impact considerations. On December 12, 2024, the CPUC held a workshop to discuss Phase 2 issues.

Next Steps
Staff is reviewing comments from recent workshops. Further, the CPUC is expected to release a Phase 2 proposal on issues related to SB 1142 in February or March for further stakeholder comment.

Load Management Standards (LMS) and Real-Time Pricing – 23-LMS-01 Issue
The California Energy Commission’s (CEC) updated Load Management Standard (LMS) regulations 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 an 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
In October of last year, 3CE worked with the IOUs, Publicly Owned Utilities, and other CCAs to submit an initial proposed framework for a Single Statewide Tool to house all customer rate information. The CEC issued a request for stakeholder comments on the Joint proposal for the Single Statewide tool by January 17. 3CE worked with CalCCA to develop comments that request the CEC consider pausing LMS implementation and restructuring the program to meet the overall goals in a cost-effective, voluntary manner. The comments also argue that LMS costs should be funded by the profit-motivated beneficiaries instead of all ratepayers. Staff

7 submitted an Advice Letter on January 22 to notify the CPUC of 3CE’s intent to enroll customers in PG&E’s Expanded Pilot 2, which extends dynamic rate offerings to residential and commercial customers.

Next Steps
3CE continues to await an official determination letter on 3CE’s LMS compliance approach. In the meantime, Staff will continue to monitor the LMS program to stay informed on any changes resulting from comments on the Single Statewide Tool and CCA advocacy around more practical implementation of the standards.

Power Source Disclosure (PSD) and Power Content Label (PCL) – 21-OIR-01 Issue
The CEC’s Power Source Disclosure (PSD) program requires LSEs to provide annual disclosures of the energy sources and greenhouse gas (GHG) emissions associated with their electricity portfolio from the prior year. LSEs disclose this information to their consumers along with California’s total system power mix on an annual Power Content Label (PCL). 3CE’s annual PCL reflects the GHG intensity and energy resources associated with its two energy products, 3Cchoice and 3Cprime.

Status
The CEC is amending its PSD regulations in accordance with recent legislation requiring LSEs to report transmission and distribution losses associated with retail sales and hourly data on load, sources of electricity, and associated GHG emissions. On December 9, the CEC issued revised amendments to PSD program rules with clarification on the calculation of default loss factors for reporting loss-adjusted load. CalCCA submitted comments on January 3 requesting that the CEC delay reporting of losses until 2027 and provide reporting templates as soon as possible to facilitate LSE compliance with the program requirements once adopted.

Next Steps
3CE will continue to monitor any changes to the PSD program to ensure compliance with reporting requirements. To maintain compliance, 3CE submitted its 2023 Power Content Label to the CEC.

Integrated Energy Policy Report (IEPR) – 24-IEPR-01
Issue
The Integrated Energy Policy Report (IEPR) is produced every two years by the California Energy Commission (CEC), with an update every other year. The IEPR provides an assessment of California’s energy system, identifies major energy trends, and issues, and provides policy recommendations to advance state goals. In 2024, the CEC updated its forecast, which included an updated 15-year electricity demand forecast. The IEPR forecast is a key input in electric system planning conducted by the CPUC, CAISO, and IOUs.

Status
On December 12, the CEC held a workshop to present the 2024 Draft IEPR Update forecast for public review and feedback. 3CE staff attended the workshop and helped CalCCA draft comments recommending improvements to the CEC’s forecast methodology. In response to comments, the CEC adjusted its data center forecast to include new data from PG&E, updated the behind-the-meter (BTM) photovoltaic (PV) and storage projections to incorporate interconnection data, and adjusted the Local Reliability Scenario. The CEC adopted the California Energy Demand 2024-2040 Forecast Update during its January 21 business meeting.

Next Steps
Preliminary review demonstrates that the load forecast for 2025 and 2026 are 132 MWs lower and 468 MWs higher respectively than the 2023 CEC load forecast. This result is a better outcome for RA load forecast

8 volatility than the 1,200 MW swing between the 2023 and 2022 forecast. These results will be used to inform future RA requirements, IRPs, and transmission and distribution planning.

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. 3CE does not aim to be the POLR but is monitoring and participating in this proceeding because certain rules designed to prevent LSE failures can 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).

Status
Phase 2 of the proceeding consist of two tracks: the first will address primary threshold questions regarding the authority of the CPUC and non-IOU POLRs, while the second will focus on the regulatory framework and application process for non-IOU entities to become POLRs. 3CE worked with CalCCA to submit opening comments, due January 10, arguing that Commission jurisdiction of a non-IOU POLR is limited by statute to regulation of its POLR-specific operations and that a non-IOU POLR should receive the same forms of cost recovery currently granted to the IOUs. These comments also identify that although no entity has explicitly expressed interest in taking on the role of designated POLR, the Commission is statutorily obligated to establish a framework for the IOUs to transfer POLR service to a non-IOU LSE.

Next Steps
3CE will work with CalCCA to submit reply comments, due January 24 to oppose arguments from the IOUs that propose broader Commission jurisdiction over a non-IOU POLR and continue to advocate for the legislatively protected autonomy of non-IOU LSEs. A resolution on threshold issues is scheduled for Quarter 2 of 2025.

Energy Resources Recovery Account (ERRA) Forecast — A.24-05-007; A.24-05-009 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.

PGE Status
Advocacy issues in this case revolve around: (1) preventing adoption of PG&E’s RA and RPS market-price benchmark (MPB) mitigation proposals to freeze MPBs for RA and RPS; and (2) getting the CPUC to adopt CalCCA’s common cost allocation proposal, which would distribute administrative generation costs across PCIA vintages by gross revenue requirement. The CPUC approved PG&E’s ERRA Forecast Revised PD at the December 19, 2024, voting meeting. The Decision successfully rejected PG&E’s MPB mitigation proposal but adopted its cost allocation proposal. However, the CPUC agreed with CalCCA that the cost allocation proposal should not affect 2024 costs. The Decision also noted that MPB reform will be addressed in a future rulemaking.

SCE Status
Advocacy in the SCE ERRA Forecast Case revolve around rejection of two SCE proposals: (1) SCE’s RA Categorization Proposal (which will categorize RA retained for system use at the lower local RA MPB); and (2)

9 SCE’s SOD RA valuation proposal (which will adjust how the quantity of RA is calculated in valuing SCE’s PCIA RA portfolio). At the December 19, 2024 voting meeting, The CPUC approved a Decision that contains mixed results for CalCCA’s issues. The Decision accepts SCE’s RA categorization proposal, which CalCCA argued does not align with how the RA is actually used. As with PG&E’s ERRA Forecast issues around MPBs, the discussion of any changes to RA MPBs with SCE will transfer to a future rulemaking with all IOUs present.

Next Steps
3CE staff will utilize the results of the ERRA Forecast proceedings to make informed recommendations related to rates and competitiveness. Additionally, 3CE staff already working with CalCCA who have retained external legal counsel in anticipation of the opening of a new PCIA proceeding that will address fundamental issues with and changes to current the RA MPBs.

Staff Report Item 8
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Gina Urmatan, Senior Accountant
SUBJECT: Financial report for the period October 1, 2024, through November 30, 2024 DATE: February 12, 2025
RECOMMENDATION:

Receive a financial report for the period October 1, 2024, through November 30, 2024.

SUMMARY:

Over the first two months of Fiscal Year 2024-25, ending November 30, 2024, operating revenues amounted to $91.5 million, and operating expenses totaled $78.6 million for a net operating income of $12.9 million. Non-operating revenue of $1.6 million, driven by interest and investment returns, netted the month with a net position increase of $14.5 million.

Year-to-date operating revenue is $8.1 million below budget, primarily due to lower-than-expected retail load. 3CE is actively monitoring retail load projections and will adjust the forecast downward as part of the proposed rate recommendation for Policy Board approval at its March 19 meeting. This adjustment is based on a comparison of prior year forecasted versus actual results, as well as year-to-date actuals. Non-operating revenue from investment returns from assets held in operating and investment accounts and interest on collateral exceeded the budget with a favorable variance of $0.4 million, resulting from a favorable short-term interest rate. Year-to-date total revenue is $7.7 million lower than budget, an unfavorable variance of 7.6%.

Year-to-date operating expenditures are lower than the budget by $5.5 million, a variance of 6.5%. The cost of energy was $2.1 million lower than the budget, primarily due to the timing of invoicing for regulatory compliance for renewable energy attributes, Renewable Energy Certificates (RECs). Non-energy operating costs were $3.4 million lower than budget due to less-than-planned costs for contracted services, energy programs, and staff vacancies. The capital outlay was below budget by $2.8

million since capital projects are not recorded as direct expenditures. Instead, these projects are recorded as capital assets on the balance sheet and are expensed over time through depreciation in accordance with accounting principles. Year-to-date total expenditures are $8.4 million lower than budget, a variance of 9.6%. These variances are expected to level out over the fiscal year as 3CE fulfills its energy obligations, including resource adequacy (RA) and renewable energy credits (RECs).

Additionally, higher energy costs are anticipated due to the enrollment of the City of Atascadero and the County of San Luis Obispo that began in January 2025.

The net position at the end of November 30, 2024, totaled $232.7 million, a $14.5 million increase from the start of the fiscal year. The increase is primarily due to increased cash and investments, reduced receivables, and collateral receipts from suppliers. Cash, cash equivalents, and short-term investments totaled $244.2 million, a $17.5 million increase from the start of the fiscal year. The increase is due to deposits and collateral from energy counterparties.

FISCAL IMPACT:

There is no financial impact associated with receiving this report.

ATTACHMENT(S):

1. November 30, 2024 Financial Report

FINANCIAL REPORT
Fiscal Year to Date
As of November 30, 2024

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 November 30, 2024, and the related statement of revenues, expenses, and changes in net position, and the statement of cash flows for the two months 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
December 27, 2024
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com

Current assets
Cash and cash equivalents 147,677,807$
Accounts receivable, net of allowance 39,494,283
Accrued revenue 29,810,899
Other receivables 1,321,746
Investments 89,072,636
Prepaid expenses 2,269,762
Deposits 11,126,235
Loan receivable 192,501
Total current assets 320,965,869
Noncurrent assets
Investments 7,490,238
Deposits 23,182
Loan receivable 1,233,381
Capital assets, net of depreciation and amortization 3,761,469 Total noncurrent assets 12,508,270
Total assets 333,474,139
Current liabilities
Accrued cost of electricity 65,433,802
Accounts payable 1,340,388
Other accrued liabilities 1,757,587
User taxes and energy surcharges due to other governments 1,772,976 Security deposits - energy suppliers 19,089,299
Lease liability 329,522
Total current liabilities 89,723,574
Noncurrent liabilities
Security deposits - energy suppliers 10,303,125
Lease liability 785,584
Total noncurrent liabilities 11,088,709
Total liabilities 100,812,283
Net investment in capital assets 2,646,363
Unrestricted 230,015,493
Total net position 232,661,856$

NET POSITION
As of November 30, 2024

STATEMENT OF NET POSITION

CENTRAL COAST COMMUNITY ENERGY
ASSETS

LIABILITIES

OPERATING REVENUES
Electricity sales, net 91,461,279$
Other income 13,763
Total operating revenues 91,475,042

OPERATING EXPENSES
Cost of electricity 73,749,882
Contract services 2,394,371
Staff compensation 1,486,992
Other operating expenses 329,353
Program incentives 519,939
Depreciation and amortization 104,546
Total operating expenses 78,585,083
Operating income (loss) 12,889,959

NONOPERATING REVENUES (EXPENSES)
Investment income 1,615,109
Interest and financing costs (8,655)
Nonoperating revenues (expenses) 1,606,454
CHANGE IN NET POSITION 14,496,413
Net position at beginning of period 218,165,443
Net position at end of period 232,661,856$
Two Months Ended November 30, 2024

AND CHANGES IN NET POSITION

STATEMENT OF REVENUES, EXPENSES

CENTRAL COAST COMMUNITY ENERGY

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 99,209,938$
Other operating receipts 5,035,278
Receipts of deposits and collateral 22,200,506
Payments to suppliers for electricity (86,703,329)
Payments of deposits and collateral (2,574,421)
Payments for other goods and services (3,158,799)
Payments for program incentives (2,831,673)
Payments of staff compensation (1,347,410)
Payments of taxes and energy surcharges to other governments (1,871,588) Net cash provided by operating activities 27,958,502

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments of lease liability (60,499)
Payments to acquire capital assets (50,139)
Net cash provided (used) by capital and related financing activities (110,638)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 1,107,662
Proceeds from investment sales 13,600,000
Principal payments received of loan receivable 94,915
Purchase of investments (45,512,315)
Net cash provided (used) by investing activities (30,709,738) Net change in cash and cash equivalents (2,861,874)
Cash and cash equivalents at beginning of year 150,539,681 Cash and cash equivalents at end of period 147,677,807$ Two Months Ended November 30, 2024

STATEMENT OF CASH FLOWS

CENTRAL COAST COMMUNITY ENERGY

Operating income (loss) 12,889,959$
Adjustments to reconcile operating income (loss) to net cash provided by operating activities
Depreciation and amortization expense 104,546
(Increase) decrease in:

Accounts receivable, net of allowance 4,943,612
Accrued revenue 1,137,630
Other receivables 5,037,275
Prepaid expenses (440,538)
Deposits 455,578
Increase (decrease) in:

Accrued cost of electricity (11,339,444)
Accounts payable (3,522,601)
Other accrued liabilities 956,657
User taxes and energy surcharges due to other governments (204,172) Security deposits - energy suppliers 17,940,000
Net cash provided by operating activities 27,958,502$
Unrealized appreciation (depreciation) and
timing differences in investment income 507,447$

NONCASH INVESTING ACTIVITES

CENTRAL COAST COMMUNITY ENERGY
STATEMENT OF CASH FLOWS (continued)
Two Months Ended November 30, 2024

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET

CASH PROVIDED BY OPERATING ACTIVITIES

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 for the two months ended November 30, 2024, 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
December 27, 2024
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com

Actual Budget Amount % Actual Budget Amount % Budget
Annual Budget
Less Actual
YTD

REVENUES AND OTHER SOURCES
Electricity sales, net $ 44,036,825 $ 48,301,381 $ (4,264,556) -9% $ 91,461,279 $ 99,583,573 $ (8,122,294) -8% $ 745,962,356 $ 654,501,077 Interest and investment returns 770,529 583,333 187,196 32% 1,615,109 1,166,666 448,443 38% 7,000,000 5,384,891 Other income 7,622 5,700 1,922 34% 13,763 11,400 2,363 21% 68,400 54,637 Total revenues and other sources 44,814,976 48,890,414 (4,075,438) -8% 93,090,151 100,761,639 (7,671,488) 92% 753,030,756 659,940,605 EXPENDITURES AND OTHER USESCurrent Expenditures Cost of energy 33,012,900 37,291,053 4,278,153 11% 74,128,768 76,198,392 2,069,624 -97% 665,267,116 591,138,348 Salaries and benefits 774,610 1,048,820 274,210 26% 1,486,992 2,097,640 610,648 29% 12,585,842 11,098,850 Services and supplies 1,414,876 2,931,483 1,516,607 52% 3,029,823 5,862,965 2,833,142 48% 35,177,798 32,147,975 Capital outlay - 1,443,167 1,443,167 100% 41,705 2,886,333 2,844,628 99% 17,318,000 17,276,295 Total current expenditures 35,202,386 42,714,523 7,512,137 18% 78,687,288 87,045,330 8,358,042 10% 730,348,756 651,661,468 Surplus (deficit) 9,612,590$ 6,175,891$ 3,436,699$ 14,402,863$ 13,716,309$ 686,554$ 22,682,000$ 8,279,137$ Annual

CENTRAL COAST COMMUNITY ENERGY

BUDGETARY COMPARISON SCHEDULE
Current Month and Two Months Ended November 30, 2024
Current Month
Variance
Favorable
(unfavorable)
Year-To-Date
Variance
Favorable
(unfavorable)

Budget Item YTD Variance Comment
Electric Sales Revenue (8.4%) 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 (2.7%) 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 (29.1%) Staffing expenses are under budget due to the timing of new hires.

Professional Services (45.6%) This category includes accounting, IT, technical and other consultants.

Legal Costs (17.7%) This category includes outside legal costs for regulatory and energy procurement needs.

Marketing and customer enrollment 13.6% Variance is mostly due to the lower than anticipated costs of recent customer enrollments.

Data Management Services (8.5%) These fees non-discretionary and are charged on a per customer basis.

Utility Service Fees (13.9%) These are PG&E and SCE fees charged on a per customer basis.

Other General & Administrative (54.3%) This category includes occupancy costs, industry membership dues, and other general and administrative costs.

Energy and Related Programs (75.3%) Programs expenses have generally been delayed until future periods Budget Commentary for significant items

CENTRAL COAST COMMUNITY ENERGY
October 1, 2024 through November 30, 2024

Return of Investments YTD Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep CASH AND CASH EQUIVALENTSRiver City Bank/ Chase - Money Market and other Interest Earning AccountsFunds Invested - Average Balance 99,664,821$ 114,669,913$ Gains/Losses/Interest 801,930$ 380,768$ 421,162$ Average APY 4.58% 4.41%INVESTMENTSRBC GAM / Principal Financal/ Schwab/FidelityFunds Invested - Average Balance 125,703,797$ 126,158,519$ Gains/Losses/Interest 759,750$ 451,482.54 308,267.24 Average APY 4.31% 2.93%

CENTRAL COAST COMMUNITY ENERGY
Investment Summary
October 1, 2024 through November 30, 2024

Current 0 - 30 Days 31 - 60 Days 61 - 90 Days > 91 Days A/R Balance 20,998,166$ 8,919,301$ 2,223,207$ 2,427,739$ 4,925,870$ 39,494,283$

CENTRAL COAST COMMUNITY ENERGY
Summary of Accounts Receivable, Net of Bad Debt Allowance As of November 30, 2024

Staff Report Item 9
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Thomas White, Accountant
SUBJECT: Investment Performance Report for the period of October 1, 2023 through September 30, 2024
DATE: February 12, 2025
RECOMMENDATION:

Receive the 3CE investment performance report for the period of October 1, 2023 through September 30, 2024.

BACKGROUND:

The 3CE Audit and Finance Committee (“Committee”) recommended that staff diversify its operating and investment banking partners to mitigate the risk of holding assets in a few concentrated financial institutions. Since the diversification was accomplished, staff has presented the investment performance report to the Committee quarterly and included the reports in the Operations and Policy board meetings.

DISCUSSION/ANALYSIS:
3CE ended the quarter on September 30, 2024, with investment holdings that followed the Investment Policy and the strategy of holding enough cash to meet operating costs, including counterparty collateral calls. The strategy consists of holding three different classes of funds: cash to meet ongoing operating costs, liquidity reserves to meet collateral calls and unforeseen costs, and short-term investments to meet reserves, including the strategic reserve and energy rate stabilization funds. As of September 30, 2024, 3CE held $214.7 million in operating and investment accounts. The table below lists the cash and investment balances by account type.

Cash and Investment Mix Holdings by Institution
Account Type Institution Balance Investment Mix
Operating
River City Bank $79,089,330
Cash (sweep) - $69.8M
money market - $4.3M
cash (operating) - $5.0M
Chase 10,490,963 cash (held for collaterals)
Investment
Schwab 62,047,026 Treasuries - $52.9M
cash (sweep) - $9.1M
Fidelity 63,071,879 Treasuries - $59.8M
money market - $3.3M
Total $214,699,198
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. As of September 30, 2024, 3CE served as investment manager of the $125.1 million held in the Schwab and Fidelity brokerage accounts.

The average annual percentage yield for Treasuries ranged from 4.97% to 5.35% over the fourth quarter.

Treasuries with a maturity date of less than one calendar year accounted for 94.4% of holdings. Two Treasuries with a combined market value of $7.6 million have a maturity date in Q3 of 2026. All investment holdings managed are high-grade rated investments or higher. 3CE’s investment mix aligns with the Investment Policy and California Government Code. As of September 30, 2024, 3CE held $94.5 million in cash and cash equivalents, $121.7 million in U.S.

Treasuries, and $7.5 million in money market funds. Aside from money market funds, all other investment types do not have state investment limits. The State code limits money market funds to 20% of the portfolio. 3CE is well within the State limit at 3.5%.

Cash and Investment Mix Holdings
Type Market Value
% of
Portfolio
Permitted by
CA Government Code
Cash and cash equivalents $94,452,996 44.0% 100%
Money Market Funds 7,524,715 3.5% 20%
U.S. Treasuries 112,721,487 52.5% 100%
Total $214,699,198 100.0%
The FY 2023-24 Adopted Budget, with appropriations of $562.8 million, included estimated investment revenues of $6.4 million. It is estimated that investment earnings from 3CE operating and investment accounts netted $11.7 million, $4.1 million from interest on cash and money market accounts, and $7.5 million from short-term investments, mostly from Treasuries. Interest earned on 3CE collateral held by counterparties is estimated at $1.1 million for total investment and interest earnings of $12.8 million.

The FY 2023-24 Mid-Year Budget Forecast estimated investment income of $10.0 million, 3CE surpassed this estimate due to a favorable interest environment.

FISCAL IMPACT:

There is no fiscal impact to receiving this report.

CONCLUSION:
3CE proactively diversified its financial institutional partners while putting cash and short-term investments to work to take advantage of a continued high-interest environment while retaining cash for ongoing operating costs and collateral calls.

ATTACHMENT(S):

None.

Staff Report Item 10
TO: 3CE Operations Board of Directors
FROM: Operations Board Chair Nominating Committee
PREPARED BY: Heather Vowell, Board Clerk
SUBJECT: Consider and appoint candidates for Operations Board Chair and Vice Chair DATE: February 12, 2025
RECOMMENDATION:

The Policy Board Nominating Committee recommends the 3CE Operations Board consider and appoint:
 Director Matt Huffaker as Chair and
 Director Jim Lewis as Vice Chair; or,
Alternatively, the Operations Board solicit and consider nominations from the floor.

BACKGROUND / DISCUSSION:

Pursuant to Section 3.9 of the 3CE Joint Powers Authority Agreement and Article VI, Section 4 of the 3CE Operating Rules and Procedures, the Chair and Vice Chair each serve a term of one year with no limit to the number of terms they may serve. It has been the practice of both the Policy and Operations Boards has been for the Chair and Vice Chair to serve two consecutive one-year terms.

Resolution OB-2022-04 set forth the Operations Board’s intention to rotate Chair and Vice Chair positions between the northern (Santa Cruz, Monterey, and San Benito Counties) and the southern territories (San Luis Obispo and Santa Barbara counties.) Both the Operations and Policy Boards have followed this practice of rotating Chair and Vice Chair from the northern and southern portions of our service area.

The recently completed term was originally Chair Johnson (City of San Luis Obispo) and Vice Chair Goldstein (Capitola). In April 2024, following Chair Johnson’s resignation, the Operations Board appointed Goldstein and Miyasato to complete the term (ending in 2025).

Chair Goldstein appointed a Nominating Committee consisting of himself, Vice Chair Mona Miyasato, and Director Rene Mendez. In September 2024 and January 2025, at the direction of the Chari, staff solicited from seated and incoming Directors their interest and willingness to serve as Chair or Vice Chair.

The Nominating Committee unanimously supported the nominations of both Director Huffaker and Director Lewis as Chair and Vice Chair, respectively. Both Director Huffaker and Director Lewis have confirmed their willingness to serve in the capacity for which they are nominated.

Staff Report Item 11
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
SUBJECT: CEO Report
DATE: February 12, 2025

STAFFING UPDATE
Navendu Dali joined 3CE on November 18, 2024, as the Manager of IT. Navendu holds a master’s degree in electrical engineering from New York University. With a background in network engineering, he is passionate about managing network infrastructure and maintaining cybersecurity. His experience has led him to various organizations, including a credit union, a public library, and most recently, a country club in Santa Fe, New Mexico. Navendu recently earned his Project Management Professional certification.

Angelica Dayap joined 3CE on November 18, 2024, as an Administrative Specialist. Angelica earned her bachelor’s degree in mechanical engineering from Sacramento State University in December 2020. In her previous role as a Customer Experience-Mechanical Engineer at Zero Motorcycles, and Customer Care Specialist at Lucid Motors, Angelica excelled in handling multiple cases simultaneously, showcasing her excellent ability to manage priorities. Angelica prides herself on providing top-notch customer service in every interaction. She is dedicated to ensuring that each customer’s needs are met with the highest level of professionalism and care.

Elise Doan joined 3CE on November 19, 2024 as the Power Settlement Analyst. Elise holds a bachelor’s degree in business administration and over five years of experience in power settlements and renewable energy with San Jose Clean Energy. Elise’s experience includes collaborating with various stakeholders to validate and approve over $1.5 billion in power settlements, ensuring accurate and timely submission of Power Source Disclosure reports, and facilitating the implementation of amended energy risk management policies and regulations. Elise is a passionate environmental advocate with a

desire to creatively problem-solve, and help businesses, nonprofits, and municipalities implement sustainability initiatives to further reach their greenhouse gas reduction goals.

Robert Wool joined 3CE on November 26, 2024 as a Policy Advisor. Robert brings over eight years of experience in political campaign management, specializing in promoting climate and clean energy candidates and initiatives. His background includes evaluating regulatory proceedings and their implications during his tenure with the State Bar of California. Robert holds a master’s degree in strategic communications and is excited to join 3CE as a Policy Advisor on the Regulatory Affairs team, where he looks forward to contributing to the advancement of renewable energy in California.

Katya Clayton joins 3CE as a Billing Operations and Rates Analyst, bringing over eight years of experience to her role. Prior to joining 3CE, Katya spent two years at TriplePoint Capital, where she managed funding operations for customized venture debt financing and equity investments, helping to support over 200 emerging technology companies. She also has six years of experience in Finance and Billing Operations at DIRECTV, where she specialized in the analysis and execution of content licensing agreements. Katya is passionate about solving complex problems and extracting insights from data. She is currently pursuing a master’s in finance at San Jose State University, expected to graduate in May 2025.

Zhabiz Ahmadi joined 3CE on January 7, 2025 as a Power Settlement Analyst. Zhabiz brings forth 9 years at the Western Area Power Administration (WAPA), an agency under the Department of Energy. Zhabiz brings extensive experience in power marketing, settlements, metering, and energy accounting. Zhabiz background includes analyzing CAISO invoices, allocating and validating charges, and identifying anomalies and issues within the data. Zhabiz is excited to bring her diverse skill set and experiences to her new role at 3CE and contributing to the team’s success.

Das Williams joined 3CE on January 14, 2025 as a Senior Advisor of Policy and Legislative Affairs.

Das brings over two decades of public service experience to this role, including serving in the California State Assembly and most recently as Santa Barbara County Supervisor and former Chair of 3CE’s Policy Board.

Das has demonstrated strong leadership in environmental and energy policy, including his work on landmark legislation like SB350, which set California's path toward 100% clean energy by 2045. His extensive experience in both state and local government, combined with his deep understanding of our Central Coast communities, will help 3CE advance our mission of delivering economic and environmental benefits through clean energy resources.

ENROLLMENT UPDATE
Staff continues to actively engage with enrolling communities throughout unincorporated San Luis Obispo County and Atascadero. To date, staff has conducted 31 presentations to community groups, service clubs, trade organizations, Chambers of Commerce, Community Service Districts, and advisory committees. Additionally, staff has met with top commercial account to discuss enrollment and what it means for these business operations. Currently, 3CE customer retention in unincorporated County and Atascadero is 96% and 92%, respectively.

Monthly update meetings with staff at SLO County and Atascadero continue to serve as a platform for coordinating activities, gathering feedback, reviewing enrollment, and advertising metrics, and distributing outreach materials to Member Agencies.

STAFF PROPOSED REVIEW OF 2025 RATES FOR POTENTIAL ADJUSTMENT Staff is evaluating and developing proposals revise the 2025 electric generation rates approved by the Policy Board at its September 19, 2024 meeting. After the 2025 rates were approved, staff continued to assess the impacts of significant changes to the PCIA implemented through the finalization of investor-owned utility rates in the Energy Resource Recovery Account (ERRA) proceeding, which is used to determine the amounts recoverable in the IOU rates.

While changes were anticipated, the magnitude of the changes and their impact on 3CE's competitive position in PG&E and SCE service areas require changes to 3CE rates to ensure the agency recovers operational expenses while remaining competitive. The Audit and Finance Committee will review these proposed changes in February, and staff will present them for Policy Board consideration on March 19, 2025.

CPUC INVESTIGATION AND GENERAL ORDER-167-C PROPOSAL
Following the Vistra Moss Landing BESS fire, the California Public Utility Commission (CPUC), through its Enforcement and Safety Division initiated an investigation and has been in direct communication with Vistra regarding the incident.

On January 27, 2025, the CPUC issued its DRAFT resolution adopting updates to the General Order 167 which, if approved at the March 13, CPUC meeting, would:
 Implement SB 1383 to establish new standards for the maintenance and operation of Energy Storage Systems (ESS)
 Increase oversight of emergency response action plans for ESS facilities enacted in SB 38  Establishes standards for the maintenance and operations of ESS, establishes Logbook Standards and other technical updates focused on effective and safe operation and maintenance.

FEDERAL ACTION LIMITING FUNDING FOR RENEWABLE GENERATION AND ELECTIFICATION Staff and CalCCA are reviewing the freeze on all federal loans and grants related to the broad renewable, electrification, and climate action programs roughly identified by the Administration as the “Green New Deal.” While the freeze does not directly impact funding or administering of 3CE’s Energy Programs, it does limit customers’ ability to stack 3CE incentives with federal incentives such as federal tax credits for transportation and battery storage projects.

Staff is monitoring the likely and potential impacts of various Executive Orders and tariff pronouncements that may disrupt tax credits supporting developer project financing, limit transmission investment and build out, as well increase costs of critical materials.

ENERGY TRADE DEAL PORTAL DEVELOPMENT UPDATE
3CE has completed the initial buildout of its new Energy Trade Deal Portal. This portal is designed to centralize and manage all energy and capacity contracts for the agency. Additionally, it offers robust reporting capabilities regarding energy risk management, Mark-to-Market analysis, and insights into our technology and counterparty diversification.

The portal was developed internally by our Data Analytics Team, working in collaboration with the Power Supply and Energy Risk Teams. We are currently in the data validation phase and look forward to presenting a demo of the portal to the Board at the April 9th Operations Board Meeting.

ATTACHMENT(S):

1. Contracts less than $200k

CCCE Contracts < $200k
Vendor Total Engagement Amount From To Service Scope Remarks 1 Becker Landscaping $10,000 1/13/2025 1/1/2026 Landscaping Services for SLO 1026 Palm St.

Building
2 Climate Corps (SEI) $79,800 11/27/2024 Until complete Recruiting and Selection services for 3CE 3 Law Office of John Beiers $35,000 10/4/2024 1/15/2025 Legal Services Agreement for Assistance with Workplace Investigation. An agreement and
Amendment No. 1 were executed.
4 Futura Energy Group $150,000 5/1/2023 12/31/2025 Amendment No.1 to extend services:

Recruiting services for 3CE
5 TrattenPrice Consulting $90,000 11/15/2023 10/15/2026 Amendment No. 1 to extend services:

Government relations and lobbying services.
6 County of Monterey $150,000 10/6/2022 12/31/2025 Amendment No. 1 to the Planning, Implementation & Innovation Grant
Agreement
7 Gordian $117,998 12/18/2024 Until complete An agreement for the installation of EV charging stations at the SLO office.

Staff Report Item 12
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Christopher Cook, Director of Energy Programs Ana Capstick, Energy Programs Analyst
SUBJECT: Presentation on Residential Battery Rebate Program performance and initial findings
DATE: February 12, 2025
RECOMMENDATION:

Receive a presentation on the Residential Battery Rebate Program performance and initial findings.

BACKGROUND:
3CE’s Residential Battery Rebate Program seeks to enable residential customers to actively manage their electricity cost, while maximizing use of renewable energy.

At its May 8, 2024 meeting, the Operations Board supported the program design and requested an update on the program after the first six months of its implementation. The program was similarly supported by the Community Advisory Council at its June 5, 2024 meeting.

Following the Policy Board’s unanimous support for the program at its June 26, 2024 meeting, the Program was launched on July 16, 2024.

The Program includes rebates for the purchase and installation of eligible batteries, as indicated in Table 1 below, and requirements for customers to discharge at least 50% of their batteries during the peak hours of 4 pm to 9 pm.

Base Incentive: 3Cchoice, 3Cprime, and NBT
customers
$300 per kWh
NBT Early Adopters; CARE, FERA, & Medical
Baseline $500 per kWh
Table 1: Incentives Offered to Customers
Staff established two major goals for the program based on CAC, Operations Board, and Policy Board input. The first goal was to issue 400 rebates per fiscal year, which equates to approximately 5.2 megawatts (MW) of new energy storage, and an annual expenditure of $2 million. The second goal was to distribute 15% of program rebates to income-qualified customers.

DISCUSSION/ANALYSIS:

Batteries are a necessary part of the transition to renewable energy because they help mitigate the challenges associated with intermittent renewable resources. In this context, “intermittency” refers to the fact that wind and solar only produce energy when nature cooperates. The electricity these sources generate varies from zero to full capacity depending on conditions. Batteries can capture energy during the middle of the day when solar power is abundant and dispatch their power in the evening hours when solar resources go offline and yet, the customer demand for electricity remains high.

The Residential Battery Rebate Program garnered coverage from twelve community news outlets at the time of its launch. In the first six months of its implementation, the program received 123 customer applications, 21% of which have received a rebate. The discussion of Goal 1, below, includes staff’s proposal for increasing the number of eligible applications to address the relatively low number of applicants fully participating in the program.

The following discussion analyzes how the Program’s initial launch compares to its goals.

Goal 1: Deployment of 400 battery systems in the fiscal year, equaling approximately 5.2 megawatts of new energy storage capacity added to the grid.

Meeting this goal would have required 200 customers to enroll in the first six months of the program. 123 applications were received during this time period, and only 26 customers successfully met all program requirements. While customers are interested in participating in the program, scheduling the battery to meet the program’s load shifting requirements has proven to be the main barrier to full participation and enrollment. As a result, a number of applications are currently pending until all program requirements are met. This difficulty is related to battery systems’ complex settings, and customers being unfamiliar with how to configure their system to automatically discharge 50% capacity during the hours of 4 pm to 9 pm. If all customers that initially applied were able to comply with the battery discharge requirements, the program’s load shifting would be approximately 5x greater or approximately 1 MWh, rather than its current 200 kWh.

Figure 1: Applicants that enrolled in load shift tracking and received rebate 3CE staff are actively working to address this issue and increase overall program participation, 3CE has elected to implement an online feature that will allow customers to more easily schedule battery systems to meet the program’s discharge requirements. Customers will be able to adjust their schedule at any time should their energy needs change. It is anticipated this service will address the battery discharge barrier and a higher percentage of customers that initially enroll in the program will be able to fulfill program requirements.

Goal 2: 15% of rebates distributed to income-qualified customers To promote battery storage adoption in underserved communities, the Program offers enhanced incentives for income-qualified customers, defined as being enrolled in CARE or FERA bill payment

assistance programs. These customers qualify for higher incentive amounts from state and federal sources. If combining other available battery storage rebate programs with 3CE’s Residential Battery Rebate Program, customers could expect up to 100% reimbursement towards the total cost to purchase and install a home battery.

Applicant Type* # Applications
Received
# of Rebates
Distributed
$ of Rebates
Distributed
Base 93 22 $106,800
NBT Early Adopters 38 1 $2,500
CARE/FERA Enrolled 9 2 $12,000
Medical Baseline 13 1 $6,500
Total 123 unique
applications
26 total
projects $127,800
*Applicants can be designated as more than one applicant type and may be cross listed.

Table 2: Program Participation and Performance Since Launch In the first six months of the Program, 7% of applications received were from income-qualified customers, with a total of $12,000 in rebates distributed. Though the Program was initially designed to provide rebates to customers who owned their battery systems, 3CE received numerous applications for leased battery systems, along with customer feedback expressing concerns about the additional burden of upfront costs of ownership. To improve accessibility for income-qualified customers, 3CE expanded program eligibility to include leased systems. As a result of this enhancement, 3CE enabled more households to participate in the transition to renewable energy and contribute to grid stability. Twelve customers with leased systems have received rebates so far, and more are expected as the program continues.

Looking Ahead
In its first six months, the Residential Battery Rebate Program enabled 200 kWh of load shifted daily during the 4 pm to 9 pm hours. 3CE is exploring future program enhancements including a customer facing dashboard or interactive website that helps customers to better understand the benefits of load shifting. This enhancement would enable customers to interact with their battery schedule to have a real-time view of their energy consumption and battery system’s discharge throughout the day. Future updates to the program will continue to improve transparency and provide additional control for customers to participate in load shifting.

Figure 2: Kilowatt hours (kWh) of load shifted daily during peak period (4-9 pm) per month FISCAL IMPACT:

There is no fiscal impact associated with this report and update.

CONCLUSION:

In its first six months since launch, 3CE’s Residential Battery Rebate Program has supported load shifting and provided customers with the ability to actively manage their electricity usage with the purchase or lease of behind-the-meter battery storage systems. Adjustments to the program and planned future enhancements will continue to expand adoption of battery storage technology for all residential customers, with continued focus on supporting underserved communities.

ATTACHMENT(S):

None.

Staff Report Item 13
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dennis Dyc-O’Neal, Chief of Power Supply
SUBJECT: Approve and authorize the CEO to execute a Hybrid - Battery Energy Storage System Power (“BESS”) Power Purchase Agreement (“PPA”) with MRP Pacifica Marketing III, LLC for the Tracy Hybrid Project, in a form substantially similar to the attached, as well as any necessary ancillary documents, with a power delivery term of 15.5 years with an expected Start Date of January 1, 2027, in an amount not to exceed $783,000,000
DATE: February 12, 2025
RECOMMENDATION:

This recommends the Operations Board approve and authorize CEO to execute a Hybrid - Battery Energy Storage System Power (“BESS”) Power Purchase Agreement (“PPA”) with MRP Pacifica Marketing III, LLC for the Tracy Hybrid Project, in a form substantially similar to the attached, as well as any necessary ancillary documents, with a power delivery term of 15.5 years with an expected Start Date of January 1, 2027, in an amount not to exceed $783,000,000.

BACKGROUND:

At its September 14, 2023 meeting, the Policy Board, relying in part on its earlier policy position to promote low or zero emission conventional generation resources that “serve as a bridge to California’s zero-carbon grid,” voted unanimously to support the innovative hybrid-battery energy storage system approach that can both: 1) reduce existing natural gas facility emissions; while also, 2) secure valuable Resource Adequacy product for 3CE customers.

The Policy Board’s direction permitted staff to implement a component of 3CE’s strategic approach to cost-effectively meeting our Resource Adequacy compliance obligations under a slide of day compliance

structure. Specifically, to “control […] existing traditional dispatchable resources that can perform in each hour of the 24-hour slice of day paradigm.”
In January 2024, the Operations Board approved, consistent with Policy Board direction, two such hybrid-battery storage Projects (the Panoche and Midway hybrid projects). While these earlier projects added a 1-hour discharge duration battery energy storage system, the Tracy Hybrid project proposed here would add an 8-hour long duration BESS.

DISCUSSION/ANALYSIS:

In May 2024, 3CE launched a request for offers (“RFO”) targeting procurement of renewable energy and/or storage resources to help meet our internal goals, reduce greenhouse gas emissions, and meet reliability requirements.

The RFO solicitation, shortlisting, and negotiations included 3CE’s Project Selection Methodology, which evaluates projects 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.

Staff’s evaluation of the proposed Tracy Hybrid and its developer, Middle River Power (“MRP”) supports selection of the Tracy Hybrid project under the Project Selection Methodology criteria.

Contribution to 3CE’s Mission and Goals
3CE considers several factors that include an evaluation of the developer’s ability to perform, and how the project supports 3CE’s mission to serve the Central Coast with clean, reliable, and affordable electricity and electrification programs to reduce greenhouse gas emissions and stimulate our local economies.

The proposed Tracy Hybrid Project would be the third hybrid-BESS project with developer MRP. The earlier projects are scheduled to be operational in 2026 but to date, no development issues have arisen with either project. MRP owns and manages about 2,000 MW of generating capacity in California and 4,000 MW outside of California.

Approval of the Tracy Hybrid Project accomplishes the earlier board direction to control dispatchable resources to stabilize 3CE’s Resource Adequacy needs on a longer-term basis while reducing existing Low Med High

emissions by constructing a battery at an existing natural gas facility. 3CE will be a joint offtaker of this project, with 3CE taking one third of the total capacity meaning 98MW of RA from the CCGT and 13.3 MW of the 8-hour BESS facility. Two other CCAs are finalizing agreements for offtake of the other two thirds. This hybrid resource will provide valuable fixed-price RA benefits to ensure RA compliance for 3CE under the Slice-of-Day (SOD) RA paradigm, which began in 2025. If approved the proposed project would meet approximately 18% of 3CE’s RA obligation at a savings over 3CE’s forecasted RA price.

Once the BESS obtains operational status, 40MW of the interconnection capacity currently allocated to the CCGT facility will be redistributed to the BESS. 3CE’s scheduling and financial market interests to leverage the 8-hour BESS will maximize the charging and discharging of the new 8-hour BESS to reduce 3CE operational costs (and therefore benefit customers) while also reducing the utilization rate of the CCGT thereby reducing emissions that would have otherwise occurred absent the BESS.

It will provide a cost-effective energy hedge to 3CE and the CAISO. During market condition events and the CCGT is dispatched, the financial structure has the energy being purchased directly by the CAISO from MRP. Thus, it will have no reportable emissions on 3CE’s Power Content Label. 3CE’s ranking for Contribution to Mission and Goals is High.

Workforce Development
The developer, MRP, represents that BESS construction work will also be bound under a project labor agreement (“PLA”) to which 3CE shall not be a party, and expect the number of construction jobs to be around thirty. After the commercial online date, the developer represents the project will hire two additional operators to manage and maintain the BESS resources. 3CE’s ranking for Workforce Development is High.

Innovation
3CE’s Project Selection Methodology supports projects that accelerate decarbonization while remaining cost competitive. This project is a creative approach to streamlining California’s extended interconnection delays that are preventing timely delivery of renewable projects. The proposed project High
High

repurposes an existing site, utilizing the existing valuable and scarce transmission capacity to transition away from a conventional power facility towards an energy storage system.

The modeling indicates the new energy storage system will compete with the existing CCGT to use the interconnection capacity, and is predicted to reduce emissions on average 12%. Actual results are contingent on the real time energy market prices affecting the economics around either running the Peaker or charging and discharging the battery.
3CE’s ranking for Innovation is High.

Location
While not located within the 3CE jurisdictional footprint, the facility is in Tracy, San Joaquin County and grid-tied to the CAISO balancing authority.
3CE’s ranking for Location is Medium.

Year
GHG
Emissions
without
Battery
(tons)
GHG
Emissions
with
Battery
(tons)
GHG
reduction
(tons)
2027 635,341 559,930 (75,411)
2028 602,340 530,845 (71,494)
2029 596,110 525,355 (70,755)
2030 552,780 487,168 (65,612)
2031 505,818 445,780 (60,038)
2032 491,745 433,378 (58,367)
2033 423,021 372,810 (50,210)
2034 386,393 340,530 (45,863)
2035 342,349 301,714 (40,635)
2036 330,262 291,061 (39,200)
2037 323,858 285,418 (38,440)
2038 294,617 259,647 (34,969)
2039 271,583 239,347 (32,235)
2040 230,193 202,870 (27,323)
2041 182,534 160,868 (21,666)
High
Med

Environmental Stewardship
The project is in an area zoned for industrial uses with other operating power plants nearby.

Land, biological and cultural surveys are complete and were included in technical reports to San Joaquin County and no significant impacts were identified. As both the existing CCGT and new BESS facility are on a developed parcel, no significant impacts are anticipated as part of the local planning and entitlement process.

The project is anticipated to reduce the CCGT output and thereby lower emissions in the local area. 3CE’s ranking for Environmental Stewardship is High.

Benefits to Underserved Communities
MRP’s submission notes it has a plan to engage with the local community regarding the construction of the new energy storage system. As the Project is integrating an energy storage system to reduce output from the existing CCGT, it will thereby lower emissions in the area which includes several Disadvantaged Community (DAC) tracts. MRP is planning for approximately 75% of their workers to be hired from the local area for the construction of battery energy storage system. 3CE’s ranking for Benefits to Underserved Communities is Medium.

High
Med

Overview of the Project
Counterparty MRP Pacifica Marketing III LLC
Parent Company Middle River Power (MRP)
Product Natural Gas Peaker Power Plant with BESS, providing Resource Adequacy (RA) benefits and dispatchable energy
Delivery Term 15.5 years
January 1, 2027, through June 30, 2042
Project Name Tracy Hybrid
Contract Capacity 98 MW Natural Gas Combined Cycle Gas Turbine (CCGT)

13.3 MW 8-hour discharge duration Lithium-Ion Battery Energy Storage System (BESS)
This represents 1/3 of the total project size of 336 MW and 40 MW BESS, with two other CCAs taking 2/3 combined
Percentage of RA Obligation
met
18%
Location Tracy, San Joaquin County, California
Not to Exceed $ Amount $783,000,000
FISCAL IMPACT:

The fiscal impact of the Tracy Hybrid Peaker plus BESS project will not exceed $783 million over the 15- year term of the PPA. The project is anticipated to stabilize future energy rates by securing Resource Adequacy resources for 3CE customers.

CONCLUSION:

Approval of the proposed Tracy hybrid project with MRP Pacifica Marketing III, LLC provides 3CE a high value RA product, will reduce our RA non-compliance risks, obtain cost certainty in a volatile market, encourage good-paying jobs in support of battery construction, and reduce emissions from an existing natural gas CCGT Peaker facility.

Attachments:

1. PPA between MRP Pacifica Marketing III LLC and 3CE (Redacted)

1 DISPATCHABLE ENERGY AND ENERGY STORAGE AGREEMENT

COVER SHEET
Seller: MRP Pacifica Marketing III LLC, a Delaware limited liability company Buyer: Central Coast Community Energy, a California joint powers authority Effective Date: [_____], 2025
Facility Descriptions: a natural gas-fired power plant with a nameplate capacity of 336 MW and a battery energy storage system (BESS) with a nameplate capacity of 40 MW, co-located in Tracy, California, as further described in Exhibit A.

Generating Capacity:
336 MW until the Commercial Operation Date, and 296 MW
thereafter.

Thermal RA Contract
Quantity:
336 MW until the CAISO allocates 40 MW of deliverability to the BESS Resource, and 296 MW thereafter.

Thermal Reservation Price:

Thermal RA Price:

Thermal Reservation
Payment:

Buyer’s Share × Thermal Reservation Price × Generating
Capacity × 1,000 (kW/MW) x Generating Capacity
Availability Adjustment Factor (%)
where the Generating Capacity Availability Adjustment
Factor is determined in accordance with Exhibit J.

Thermal RA Payment: Buyer’s Share × Thermal RA Price × Thermal RA Contract Quantity × 1,000 (kW/MW)
Guaranteed GC Availability:

Variable O&M Rate:

Start Charge:

Start-Up Payment: Start Charge × Start-Up Frequency
Storage Contract Quantity: 40 MW
Storage RA Contract
Quantity:
40 MW following the date the CAISO allocates 40 MW of
deliverability to the BESS Resource.

Storage Reservation Price:

Storage RA Price:

Storage Reservation
Payment:

Buyer’s Share × Storage Reservation Price ($/kW-month) × Storage Contract Quantity (MW) × 1,000 (kW/MW) ×
Storage Availability Adjustment Factor (%)
where the Storage Availability Adjustment Factor is
determined in accordance with Exhibit E.

Storage RA Payment: Buyer’s Share × Storage RA Price ($kW-month) × Storage RA Contract Quantity (MW) × 1,000 (kW/MW)

3 ☒ Ancillary Services
Scheduling Coordinator: Seller or Seller’s agent
Seller Payment Security:

Development Security
Performance Security:

TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS ........................................................................................................ 1

1.1 Contract Definitions............................................................................................... 1

1.2 Rules of Interpretation ......................................................................................... 18 ARTICLE 2 TERM; COMMERCIAL OPERATION; OPTIMIZATION SERVICES............. 19

2.1 Contract Term. ..................................................................................................... 19

2.2 Conditions Precedent ........................................................................................... 20

2.3 Reserved............................................................................................................... 21

2.4 Scheduling Services............................................................................................. 21

2.5 Forecasting Services ............................................................................................ 22

2.6 Financial Responsibility for Scheduling and Forecasting Services..................... 22

2.7 Performance Maximization.................................................................................. 22 ARTICLE 3 PURCHASE AND SALE...................................................................................... 23

3.1 Purchase and Sale of Product............................................................................... 23

3.2 Ownership of Standalone Energy Storage Incentives.......................................... 24

3.3 Capacity Attributes and RA Shortfall Damages.................................................. 24

3.4 Variable O&M ..................................................................................................... 25

3.5 Reservation and RA Payment .............................................................................. 25

3.6 Test Energy .......................................................................................................... 25

3.7 Emissions............................................................................................................. 25 ARTICLE 4 OBLIGATIONS AND DELIVERIES................................................................... 25

4.1 Product Delivery .................................................................................................. 25

4.2 Transfer of Resource Adequacy Benefits. ........................................................... 26

4.3 Seller’s Option To Provide Alternate Capacity ................................................... 27

4.4 Buyer’s Re-Sale of RA Product........................................................................... 28

4.5 Hold-Back and Substitute Capacity ..................................................................... 29

4.6 Gas Supply........................................................................................................... 29

4.7 Charging Energy Management ............................................................................ 30

4.8 Reduction in Deliveries........................................................................................ 32

4.9 Generating Capacity Availability ........................................................................ 32

4.10 Storage Availability ............................................................................................. 33

4.11 Storage Capacity Tests......................................................................................... 33

4.12 Efficiency Guaranty ............................................................................................. 34

4.13 Heat Rate Guaranty.............................................................................................. 34

4.14 Cycle Limits......................................................................................................... 34

4.15 Interconnection Capacity ..................................................................................... 34

4.16 Title and Risk of Loss.......................................................................................... 34 ARTICLE 5 TAXES .................................................................................................................. 35

5.1 Allocation of Taxes and Charges......................................................................... 35

5.2 Cooperation.......................................................................................................... 35 ARTICLE 6 MAINTENANCE OF THE FACILITY................................................................ 35

ii

6.1 Maintenance of the Facility ................................................................................. 35

6.2 Maintenance of Health and Safety....................................................................... 35

6.3 Shared Facilities................................................................................................... 35 ARTICLE 7 METERING........................................................................................................... 36

7.1 Metering............................................................................................................... 36

7.2 Meter Verification................................................................................................ 36

7.3 Meter Adjustments............................................................................................... 36 ARTICLE 8 INVOICING AND PAYMENT; CREDIT............................................................ 36

8.1 Contract Price....................................................................................................... 36

8.2 Statements and Invoicing..................................................................................... 37

8.3 Payment................................................................................................................ 37

8.4 Books and Records .............................................................................................. 38

8.5 Invoice Adjustments ............................................................................................ 38

8.6 Billing Disputes ................................................................................................... 38

8.7 Netting of Payments............................................................................................. 38

8.8 Payment Security ................................................................................................. 39

8.9 Use of Financial Security..................................................................................... 39 ARTICLE 9 NOTICES .............................................................................................................. 40

9.1 Addresses for the Delivery of Notices................................................................. 40

9.2 Acceptable Means of Delivering Notice.............................................................. 40 ARTICLE 10 FORCE MAJEURE............................................................................................. 40

10.1 Definition ............................................................................................................. 40

10.2 Termination Following Force Majeure Event...................................................... 41

10.3 Notice for Force Majeure..................................................................................... 41 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION..................................................... 42

11.1 Events of Default ................................................................................................. 42

11.2 Remedies; Declaration of Early Termination Date.............................................. 43

11.3 Termination Payment........................................................................................... 43

11.4 Notice of Payment of Termination Payment ....................................................... 44

11.5 Disputes With Respect to Termination Payment................................................. 44

11.6 Rights And Remedies Are Cumulative................................................................ 44 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES ........ 44

12.1 No Consequential Damages................................................................................. 44

12.2 Waiver and Exclusion of Other Damages............................................................ 45 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY.......................... 45

13.1 Seller’s Representations and Warranties ............................................................. 45

13.2 Buyer’s Representations and Warranties............................................................. 46

13.3 General Covenants............................................................................................... 47 ARTICLE 14 ASSIGNMENT.................................................................................................... 47

14.1 General Prohibition on Assignments................................................................... 47

iii

14.2 Collateral Assignment.......................................................................................... 47

14.3 Buyer Limited Assignment.................................................................................. 49 ARTICLE 15 DISPUTE RESOLUTION................................................................................... 49

15.1 Governing Law .................................................................................................... 49

15.2 Dispute Resolution............................................................................................... 49

15.3 Arbitration............................................................................................................ 49 ARTICLE 16 INDEMNIFICATION ......................................................................................... 50

16.1 Indemnity ............................................................................................................. 50

16.2 Notice of Claim.................................................................................................... 51

16.3 Failure to Provide Notice ..................................................................................... 51

16.4 Defense of Claims................................................................................................ 51

16.5 Rights and Remedies are Cumulative .................................................................. 51 ARTICLE 17 INSURANCE ...................................................................................................... 52

17.1 Insurance .............................................................................................................. 52 ARTICLE 18 CONFIDENTIAL INFORMATION................................................................... 52

18.1 Definition of Confidential Information................................................................ 52

18.2 Duty to Maintain Confidentiality......................................................................... 53

18.3 Irreparable Injury; Remedies ............................................................................... 53

18.4 Disclosure to Financing Parties, Etc. ................................................................... 53

18.5 Press Releases...................................................................................................... 54 ARTICLE 19 MISCELLANEOUS............................................................................................ 54

19.1 Entire Agreement; Integration; Exhibits.............................................................. 54

19.2 Amendments........................................................................................................ 54

19.3 No Waiver............................................................................................................ 54

19.4 No Agency, Partnership, Joint Venture or Lease................................................. 54

19.5 Severability .......................................................................................................... 54

19.6 Mobile-Sierra ....................................................................................................... 54

19.7 Counterparts......................................................................................................... 55

19.8 Electronic Delivery .............................................................................................. 55

19.9 Binding Effect...................................................................................................... 55

19.10 No Recourse to Members of Buyer ..................................................................... 55

19.11 Forward Contract ................................................................................................. 55

19.12 Further Assurances............................................................................................... 55

19.13 Change in Electric Market Design....................................................................... 56

iv
Exhibits:

Exhibit A Facility Description
Exhibit B Facility Commercial Operation
Exhibit C Heat Rate and Efficiency Guaranty
Exhibit D Form of Letter of Credit
Exhibit E Storage Availability
Exhibit F Storage Capacity and Efficiency Rate Tests
Exhibit G Notices
Exhibit H Operating Procedures
Exhibit I Maintenance Intervals
Exhibit J Generating Capacity Availability
Exhibit K [Reserved]
Exhibit L Form of Commercial Operation Date Certificate Exhibit M Form of Installed Capacity Certificate
Exhibit N Scheduling Coordinator Responsibilities
Exhibit O Gas Hedging Transaction
Exhibit P Form of Fixed Price Gas Order

DISPATCHABLE ENERGY AND ENERGY STORAGE AGREEMENT
This Dispatchable Energy and Energy Storage Agreement (“Agreement”) is entered into as of 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 or its Affiliates owns and operates the Thermal Resource; WHEREAS, Seller or its Affiliates intends to develop, design, permit, construct, own, and operate the BESS Resource; 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:
“Accepted Compliance Costs” has the meaning set forth in Section 4.9(c)(iii). “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”, “control”, “controlled by”, and “under common control with”, as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person.
“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. “Alternating Current” or “AC” means alternating current. “Ancillary Services” has the meaning set forth in the CAISO Tariff and for the purposes of this Agreement, means Buyer’s Share thereof.

2 “Annual Cycle Limit” means the maximum number of times the BESS Resource can be Cycled each Contract Year as set forth on Exhibit H.
“Annual Run Hour Limit” means the maximum number of hours the Thermal Resource can be operated each year as set forth on Exhibit H.
“Annual Storage Capacity Test” has the meaning set forth in Exhibit F. “Auxiliary Use” means the Energy that is used (including Energy used during the charging or discharging of the BESS Resource) within the BESS Resource to power the motors, temperature control systems, control systems and other electrical loads that are integral to the operation of the BESS Resource.
“Available” means that the BESS Resource is available either to be charged or discharged. “Availability Incentive Payments” has the meaning set forth in the CAISO Tariff. “Bankrupt” means with respect to any entity, such entity (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of 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. “BESS Resource” means the battery energy storage plant identified in Exhibit A as the “BESS Resource” at the Facility as further described in Exhibit A. “BESS Resource Meters” means the meters used to measure Charging Energy and the Discharging Energy.
“BESS Resource Metering Points” means the location or locations of the BESS Resource Meters.
“BESS Resource PNode” means the BESS Resource PNode identified on the Cover Sheet, as such location may be redesignated from time to time. “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. Pacific Prevailing Time (PPT).
“Buyer” has the meaning set forth on the Cover Sheet.
“Buyer Default” means an Event of Default of Buyer.
“Buyer’s Share” means thirty-three and one third percent (33.3%).

3 “CAISO” means the California Independent System Operator Corporation. “CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs) (as such term is defined in Appendix A to the CAISO Tariff), and Operating Procedures (as such term is defined in Appendix A to the CAISO Tariff), including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC; provided that if there is a conflict between the BPMs, the CAISO Operating Agreement (as such term is defined in Appendix A to the CAISO Tariff) or the Operating Procedures, on the one hand, and the CAISO Tariff, on the other hand, the CAISO Tariff will control. “Capacity Attribute” means Buyer’s Share of any current or future defined characteristic, certificate, tag, credit or accounting construct associated with the amount of power that the Facility can accept at or deliver to the applicable Delivery Point at a particular moment and that can be purchased and sold under CAISO market rules, including Resource Adequacy Benefits. “Capacity Limit” has the meaning set forth in Exhibit F. “CARB Cap and Trade Program” means California Cap and Trade Program (Title 17 California Code of Regulations Sections 95801-96022).
“Carbon Allowances” means those allowances distributed under the CARB Cap and Trade Program.
“Carbon Emission Regulations” means those regulations that may be adopted from time to time by the State of California pertaining to limiting, taxing, charging for or otherwise regulating carbon dioxide emissions including, but not limited to, the CARB Cap and Trade Program. “Chairperson” has the meaning set forth in Section 15.3. “Change in Law” means the adoption, promulgation, taking effect of, implementation or modification of any Law by a Governmental Authority after the Effective Date that relates to the regulation or control of any emissions associated with the Thermal Resource. “Charging Energy” means the Buyer’s Share of Energy delivered to the BESS Resource from the CAISO Grid pursuant to a Charging Notice as measured at the BESS Resource Metering Point by the BESS Resource Meter, as such meter readings are adjusted by the CAISO for any applicable Electrical Losses.
“Charging Notice” means the operating instruction, and any subsequent updates, given by the SC or the CAISO to the Facility, directing the Facility to charge at a specific MW rate for a specified period of time or amount of MWh, provided that any such operating instruction shall be in accordance with the Operating Procedures. For the avoidance of doubt, any Buyer request to initiate a Storage Capacity Test shall not be considered a Charging Notice.

4 “CIRA Tool” means the CAISO Customer Interface for Resource Adequacy. “Claim” has the meaning set forth in Section 16.2.
“COD Certificate” has the meaning set forth in Exhibit B. “COD Delay Damages” means an amount equal to
“COD Delay Period” has the meaning set forth in Exhibit B. “Collateral Assignment Agreement” has the meaning set forth in Section 14.2. “Commercial Operation” means the conditions for commercial operation of the BESS Resource set forth in Exhibit B have been satisfied.
“Commercial Operation Date” or “COD” means the date on which Commercial Operation is achieved and the conditions set forth in Section 2.2 have been satisfied. “Compliance Actions” has the meaning set forth in Section 4.9(c)(i). “Compliance Expenditure Cap” has the meaning set forth in Section 4.9(c). “Compliance Showings” means the (a) the Resource Adequacy Resource requirements compliance or advisory showings (or similar or successor showings), and (b) if applicable, the Local RAR compliance or advisory showings (or similar or successor showings) that Buyer is required to make to the CPUC (and, to the extent authorized by the CPUC, to the CAISO), pursuant to the Resource Adequacy Rulings, to the CAISO pursuant to the CAISO Tariff, or to any Governmental Authority having jurisdiction.
“Confidential Information” has the meaning set forth in Section 18.1. “Contract Price” has the meaning set forth in Section 8.1. “Contract Term” has the meaning set forth in Section 2.1. “Contract Year” means a period of twelve (12) consecutive months beginning on the Thermal Start Date or an anniversary thereof and ending at midnight at the end of the day prior to the applicable anniversary of such Thermal Start Date, except with respect to the final Contract Year of the Delivery Term, which may be less than twelve (12) months. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions, and other similar third-party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements that replace the Agreement; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating the Agreement. “Cover Sheet” means the cover sheet to this Agreement, which is incorporated into this Agreement.

5 “CPM Capacity” has the meaning set forth in the CAISO Tariff. “CPM Capacity Payment” has the meaning set forth in the CAISO Tariff. “CPUC” means the California Public Utilities Commission or any successor agency performing similar statutory functions.
“CPUC Filing Guide” is the document issued annually by the CPUC that sets forth the guidelines, requirements, and instructions for load serving entities to demonstrate compliance with the CPUC’s resource adequacy program.
“Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P or Moody’s. If ratings by S&P and Moody’s are not equivalent, the lower rating shall apply.
“Cycle” means each time that the total MWhs discharged from the BESS Resource equals the Maximum Stored Energy Level for the BESS Resource as set forth in Exhibit A. “Daily Cycle Limit” means the maximum number of times the BESS Resource can be cycled each day as set forth on Exhibit H.
“Daily Start Limit” means the maximum number of times the Thermal Resource can be started each day as set forth on Exhibit H.
“Damage Payment” means the dollar amount that equals
“Defaulting Party” has the meaning set forth in Section 11.1(a). “Delivery Point” shall mean the Thermal Resource PNode or the BESS Resource PNode, as applicable.
“Delivery Term” has the meaning set forth on the Cover Sheet. “Development Cure Period” has the meaning set forth in Exhibit B. “Development Security” means (i) cash or (ii) a Letter of Credit, in each case in the amount set forth on the Cover Sheet for “Development Security”. “Discharging Energy” means Buyer’s Share of all Energy delivered to the Delivery Point from the BESS Resource, net of the Electrical Losses, as measured at the BESS Resource Metering Point by the BESS Resource Meter. All Discharging Energy will have originally been delivered to the BESS Resource from the CAISO Grid as Charging Energy. “Discharging Notice” means the operating instruction, and any subsequent updates, given by Buyer to Seller, directing the Facility to discharge Discharging Energy at a specific MW rate

6 to a specified Stored Energy Level, provided that (a) any such operating instruction or updates shall be in accordance with the Operating Procedures and (b) if the sum of Dispatchable Energy and Discharging Energy would exceed the Interconnection Capacity Limit, such “Discharging Notice” shall be deemed to be automatically adjusted to reduce the amount of Dispatchable Energy so that the sum of Discharging Energy and Dispatchable Energy does exceed the Interconnection Capacity Limit.
“Disclosing Party” has the meaning set forth in Section 18.2. “Dispatchable Energy” means Buyer’s Share of all Energy delivered by the Thermal Resource.
“Early Termination Date” has the meaning set forth in Section 11.2(a). “Effective Date” has the meaning set forth on the Cover Sheet. “Effective Discharge Capacity” has the meaning set forth in Exhibit F. “Efficiency Rate” means the round-trip efficiency rate of the BESS Resource determined in accordance with Exhibit C, as the same is to be tested prior to and established as of the Commercial Operation Date and adjusted from time to time pursuant to Exhibit F to reflect the results of the most recently performed Storage Capacity Test. “Electrical Losses” means, subject to meeting any applicable CAISO requirements and in accordance with Section 7.1, losses of Energy along with all transmission or transformation losses between the Delivery Point and the Facility.
“Energy” means alternating current electrical energy measured in MWh. “Energy Meter” means the meters used to measure Charging Energy, Discharging Energy and Dispatchable Energy, as applicable.
“Environmental Attributes” means any and all environmental characteristics, environmental claims, environmental credits, environmental benefits, environmental emissions reductions, environmental offsets, environmental allowances and environmental allocations, existing now or in the future, howsoever characterized, denominated, measured or entitled, attributable to the generation, storage or discharge of Energy from the Facility. “Event of Default” has the meaning set forth in Section 11.1. “Excused Event” means any
within the parameters set forth in Exhibit I
“Expected Commercial Operation Date” has the meaning set forth on the Cover Sheet. “Facility” means the Thermal Resource and BESS Resource and related generation, storage and mechanical equipment and associated facilities and equipment required to deliver

7 Product (but excluding any Shared Facilities), and as such generation and storage facility may be expanded or otherwise modified from time to time in accordance with the terms of this Agreement.

This equipment includes but is not limited to gas turbine engines, transformers, batteries, fire suppression, thermal management, enclosures, and inverters. “Facility Energy” means the Discharging Energy and the Dispatchable Energy. “FERC” means the Federal Energy Regulatory Commission.
“Financial Security” means the Development Security or the Performance Security, as applicable.
“Financing Party” means, collectively, any Person (i) providing senior or subordinated construction, interim, back leverage and/or long-term debt, equity or tax equity financing (including transferees or purchasers in connection with tax credit transfers) or refinancing for or in connection with the development, construction, purchase, installation or operation of the Facility, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including tax equity), public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or refinancing for the Facility (including transferees or purchasers in connection with tax credit transfers) or purchasing equity ownership interests of Seller or its Affiliates, and any trustee or agent or similar representative acting on their behalf, (ii) providing Interest Rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations or (iii) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Facility.
“Flexible Capacity Category” shall be as described in the annual CPUC Filing Guide, as such may be modified, amended, supplemented or updated from time to time. “Flexible Ramping Product” means Buyer’s Share of this Product, as defined in the CAISO Tariff.
“Force Majeure Event” has the meaning set forth in Section 10.1. “Forced Facility Outage” means an unexpected failure of one or more components of the Facility or any outage of the Transmission System that prevents Seller from making Facility Energy available at the applicable Delivery Point and that is not the result of a Force Majeure Event.
“Forecasting Agreement” has the meaning set forth in Section 2.5(a). “Gains” means, with respect to any Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner. Factors used in determining the economic benefit to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant

8 rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term, and include the value of Capacity Attributes.
“Gas Distribution Utility” has the meaning set forth on the Cover Sheet. “Gas Meter” means the meters used to measure the natural gas supplied to the Thermal Resource.
“Gas Utility Receipt Point” has the meaning set forth on the Cover Sheet. “Generating Capacity” means the capacity of the Thermal Resource, expressed in whole MWs, that is capable of generating Energy, as such amount is set forth on the Cover Sheet. “Generating Capacity Availability Adjustment Factor” or “GCAAF” has the meaning set forth in Exhibit J.
“Governmental Approval” means all authorizations, consents, approvals, waivers, exceptions, variances, filings, permits, orders, licenses, exemptions, notices to and declarations of or with any Governmental Authority and shall include (i) with respect to Seller, those siting and operating permits and licenses, and any of the foregoing under any applicable environmental Law, that are required for the use and operation of the Facility and (ii) with respect to Buyer, those federal licenses and state market participation agreements necessary or appropriate to take delivery of and resell electricity.
“Governmental Authority” means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other governmental, quasi-governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO; provided, however, that “Governmental Authority” shall not in any event include any Party. “Guaranteed Commercial Operation Date” has the meaning set forth in Exhibit B. “Guaranteed Efficiency Rate” means the percentage specified on the Cover Sheet. “Guaranteed GC Availability” has the meaning set forth on the Cover Sheet. “Guaranteed Heat Rate” means the percentage specified on the Cover Sheet. “Guaranteed Storage Availability” has the meaning set forth on the Cover Sheet. “Heat Rate” has the meaning set forth in Exhibit C.
“Hedging Transaction” has the meaning set forth in Section 4.6(c). “Hold-Back Capacity” has the meaning set forth in Section 4.5.

9 “Indemnifying Party” has the meaning set forth in Section 16.1. “Indemnified Party” has the meaning set forth in Section 16.1. “Indemnifiable Loss(es)” has the meaning set forth in Section 16.1. “Installed Capacity” means the nameplate capacity of the BESS Resource at the Point of Interconnection, as evidenced by a certificate from a Licensed Professional Engineer substantially in the form attached as Exhibit M hereto, as it may be updated from time to time by delivery of a subsequent certificate from a Licensed Professional Engineer in the form attached as Exhibit M hereto solely as permitted pursuant to Section 4 of Exhibit B. “Interconnection Agreement” means the interconnection agreements among Seller (or Seller’s Affiliate), the CAISO, and the Participating Transmission Owner, pursuant to which (i) the Thermal Resource will be interconnected with the Transmission System, providing for interconnection capacity available or allocable to the Thermal Resource that is no less than the Storage Contract Quantity, (ii) the BESS Resource will be interconnected with the Transmission System, providing for interconnection capacity available or allocable to the BESS Resource that is no less than the Storage Contract Quantity, provided that such interconnection capacity may be maintained through a combination of rights under the Interconnection Agreement dedicated to the BESS Resource and under an Interconnection Agreement shared with the Thermal Resource, and pursuant to which the applicable Interconnection Facilities and any other Interconnection Facilities have or will be constructed, operated and maintained during the Delivery Term. “Interconnection Capacity Limit” means the maximum instantaneous amount of Energy that is permitted to be delivered to the Delivery Point under Seller’s Interconnection Agreement, which shall in no event exceed three hundred thirty-six (336) MW. “Interconnection Delays” means any delay in achieving Commercial Operation due to any delay in obtaining the Interconnection Agreement or completing the Interconnection Facilities under the Interconnection Agreement provided that in either case Seller has taken actions consistent with Prudent Industry Practices to obtain the Interconnection Agreement and cause the applicable Interconnection Facilities to be completed.
“Interconnection Facilities” means the interconnection facilities, control and protective devices, and metering facilities required to connect the Facility with the Transmission System in accordance with the Interconnection Agreement.
“Interest Rate” has the meaning set forth in Section 8.3. “Investment Grade Credit Rating” means a Credit Rating of “JAMS” has the meaning set forth in Section 15.3.

10 “Joint Powers Act” means the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.).
“Joint Powers Agreement” means that certain Joint Powers Agreement dated February 21, 2017, as amended from time to time, under which Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act.
“Law” means any applicable law, statute, rule, regulation, decision, writ, order, decree or judgment, permit or any interpretation thereof, promulgated or issued by a Governmental Authority.
“Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank, or U.S. branch of a foreign bank, with such bank having a Credit Rating of at least A- with an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s, in a form substantially similar to the letter of credit set forth in Exhibit D.
“Licensed Professional Engineer” means either (i) [_____], (ii) [_____], (iii) the independent engineer retained by the Financing Parties, or on their behalf under customary terms and conditions, in connection with a financing of the Facility, which engineer, or employee or principal thereof (a) is licensed to practice engineering in [_____], (b) has training and experience in the power industry specific to the technology of the Facility, (c) is not a representative of a consultant, engineer, contractor, designer or other individual involved in the development of the Facility or of a manufacturer or supplier of any equipment installed at the Facility other than as the independent engineer for the Financing Parties, and (d) is licensed in an appropriate engineering discipline for the required certification being made, or (iv) a person acceptable to Buyer in its reasonable judgment.
“Limited Assignee” has the meaning set forth in Section 14.3. “Local RAR” means the local resource adequacy requirements established for load serving entities by the CPUC pursuant to the Resource Adequacy Rulings, the CAISO pursuant to the CAISO Tariff or by any other Governmental Authority having jurisdiction. “Losses” means, with respect to the Non-Defaulting Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner, which economic loss (if any) shall be deemed to be the loss (if any) to such Party represented by the difference between the present value of the payments required to be made during the remaining Contract Term of this Agreement and the present value of the payments that would be required to be made under transaction(s) replacing this Agreement. Factors used in determining economic loss to a Party may include reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid

11 trading hubs (e.g., NP-15), all of which should be calculated for the remaining Contract Term and must include the value of Capacity Attributes.
“Maintenance Hour” has the meaning set forth in Exhibit I. “Maintenance Plan” has the meaning set forth in Exhibit I. “Material Variance” has the meaning set forth in Exhibit F. “Major Overhaul” has the meaning set forth in Exhibit I. “Minimum Down Time” means the minimum number of hours the Thermal Resource must be off-line after the cessation of Energy deliveries to the Delivery Point as set forth on Exhibit H.
“Minimum Run Time” means the minimum number of hours the Thermal Resource must continue to run once it commences delivering Energy to the Delivery Point as set forth on Exhibit H.
“Monthly GC Availability” has the meaning set forth in Exhibit J. “Monthly Storage Availability” has the meaning set forth in Exhibit E. “Moody’s” means Moody’s Investors Service, Inc.
“Must Offer Obligations” means the obligation to bid or cause the SC to bid the applicable resource into the CAISO Markets (as defined in the CAISO Tariff) in order for the applicable resource to qualify to deliver Resource Adequacy Benefits. “MW” means megawatts in alternating current, unless expressly stated in terms of direct current.
“MWh” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“Non-Availability Charges” has the meaning set forth in the CAISO Tariff. “Non-Defaulting Party” has the meaning set forth in Section 11.2. “Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or email in accordance with Article 9.
“Notice of Claim” has the meaning set forth in Section 16.2. “Notification Deadline” means twenty (20) Business Days before the relevant deadlines for the corresponding Compliance Showings applicable to the relevant Showing Month. “Offtakers” has the meaning set forth in Section 2.7.

12 “Operating Procedures” means those rules, requirements, and procedures developed pursuant to Section 2.2 consistent with Exhibit H, as the same may be modified from time to time in accordance with this Agreement.
“Owner” has the meaning set forth in Section 1.2(m).
“Pacific Prevailing Time” means the prevailing standard time or daylight savings time, as applicable, in the Pacific time zone.
“Participating Transmission Owner” or “PTO” means an entity that owns, operates, and maintains transmission or distribution lines and associated facilities or has entitlements to use certain transmission or distribution lines and associated facilities where the Facility is interconnected. For purposes of this Agreement, the Participating Transmission Owner for the Facility is set forth in Exhibit A.
“Party” or “Parties” has the meaning set forth in the Preamble. “Performance Benchmarks” has the meaning set forth in Section 2.7. “Performance Security” means (i) cash, (ii) a Letter of Credit or (iii) guaranty in form and substance acceptable to Buyer, acting reasonably and in good faith, in each case in the amount set forth on the Cover Sheet for “Performance Security”. “Permitted Transferee” means (i) any Affiliate of Seller, (ii) any entity that has, or is controlled by another Person that has
, or (iii) any other entity approved in writing by
Buyer acting reasonably and in good faith.
“Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“Planned Outages” has the meaning set forth in Exhibit I. “PMAX” has the meaning in the CAISO Tariff.
“Point of Interconnection” has the meaning set forth on the Cover Sheet. “Product” has the meaning set forth on the Cover Sheet. “Prudent Industry Practice” means (a) the applicable practices, methods and acts required by or consistent with applicable Laws and reliability criteria, and otherwise engaged in or approved by a significant portion of the electric utility industry during the relevant time period with respect to grid-interconnected, utility-scale generating facilities with integrated storage or standalone storage facilities in the Western United States, or (b) any of the practices, methods and acts which, in light of the facts known at the time the decision was made, could have been expected

13 to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Prudent Industry Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to acceptable practices, methods or acts generally accepted in the industry with respect to grid-interconnected, utility-scale generating facilities with integrated storage or stand-alone storage in the Western United States.

Prudent Industry Practice includes compliance with applicable Laws, applicable reliability criteria, and the criteria, rules and standards promulgated in the National Electric Safety Code and the National Electrical Code, as they may be amended or superseded from time to time, including the criteria, rules and standards of any successor organizations. “Qualifying Capacity” or “QC” has the meaning set forth in the CAISO Tariff. “RA Contract Quantity” means the sum of the Thermal RA Contract Quantity and the Storage RA Contract Quantity.
“RA Product” has the meaning set forth in Section 4.2(a). “RA Shortfall” has the meaning set forth in Section 4.2(a). “RA Shortfall Damage Amount” has the meaning set forth in Section 3.3(b). “RA Shortfall Amount” means an amount equal to the difference of (a) Buyer’s Share of the RA Contract Quantity, minus (b) the RA Product.
“Real-Time Market” has the meaning set forth in the CAISO Tariff. “Receiving Party” has the meaning set forth in Section 18.2. “Replacement RA” means Resource Adequacy Benefits, if any, equivalent to those that would have been provided by the Thermal Resource or BESS Resource, as applicable, with respect to the applicable Showing Month, including, as applicable, the Showing Availability and Flexible Capacity Category, and any successor criteria applicable to the Facility, and any Local RAR; provided that any Replacement RA capacity must be communicated by Seller to Buyer with Replacement RA product information in a Notice to Buyer no later than the Notification Deadline. “Replacement Price” has the meaning set forth in Section 3.3(b). “Replacement Unit” has the meaning set forth in Section 4.3. “Resource” or “Resources” has the meaning set forth in Exhibit I. “Resource Adequacy Benefits” means the rights and privileges attached to the Facility associated with the RA Contract Quantity that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in any Resource Adequacy Rulings and includes any local, zonal or otherwise locational attributes associated with the Facility, in addition to flex attributes. “Resource Adequacy Plan” has the meaning set forth in the CAISO Tariff.

14 “Resource Adequacy Rulings” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024, 14-06-050, and any other existing or subsequent decisions, resolutions, or rulings related to resource adequacy, including, without limitation, the Slice of Day Requirements and the CPUC Filing Guide, in each case as may be amended from time to time by the CPUC, and any other existing or subsequent ruling or decision, or any other resource adequacy Law, however described, as such decisions, rulings, Laws, rules or regulations may be amended or modified from time-to-time throughout the Delivery Term. 1 “S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of The McGraw-Hill Companies, Inc.).
“SC Agreement” has the meaning set forth in Section 2.4(a). “Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” and “Scheduling” have a corollary meaning.
“Scheduling Coordinator” or “SC” means an entity certified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff for the purposes of undertaking the functions specified in “Responsibilities of a Scheduling Coordinator,” of the CAISO Tariff, as amended from time to time.
“Seller” has the meaning set forth on the Cover Sheet.
“Settlement Amount” means the Non-Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Party. If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be Zero Dollars ($0).
“Shared Facilities” means the gen-tie lines, transformers, substations, or other equipment, permits, contract rights, and other assets and property (real or personal), in each case, as necessary to enable delivery of Energy from the Facility (which is excluded from Shared Facilities) to the point of interconnection, including the Interconnection Agreement itself, that are used in common with third parties.
“Shared Facilities Agreement” has the meaning set forth in Section 6.3. “Showing Availability” means that the RA Product will be available at least in the amount of the Thermal RA Contract Quantity or Storage RA Contract Quantity, as applicable, for every hour for each Showing Month during the Delivery Period as the Thermal Resource or BESS Resource, as applicable, and the Replacement Unit providing the RA Product uses the same NQC

15 value for all 24 hourly showings across all days of a Showing Month pursuant to CPUC Decision 23-04-010 as the Thermal Resource or BESS Resource, as applicable, that it is replacing. “Showing Deadline” means, for any Showing Month, the deadline for submitting a Supply Plan applicable to that Showing Month, as established by the CAISO. “Showing Month” means the calendar month of the Delivery Term that is the subject of the Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the CAISO Tariff. For illustrative purposes only, pursuant to the CAISO Tariff and Resource Adequacy Rulings in effect as of the Effective Date, the monthly Compliance Showing made in June is for the Showing Month of August.
“Shown Unit” means the Thermal Resource, the BESS Resource, or any Replacement Unit, as applicable.
“Site” means the applicable real property on which the Facility is or will be located, as further described in Exhibit A.
“Slice of Day” or “SOD” means the CPUC’s 24-hour Slice-of-Day Framework established in D.22-06-050, D.23-04-010 and D. 24-06-004, as may be modified by the CPUC from time to time.
“Slice of Day Requirements” means the Slice-of-Day Framework, or any successor program thereof, as may be established and modified by the CPUC from time to time. “Standalone Energy Storage Incentives” means: (a) all federal, state, or local Tax credits or other Tax benefits associated with the construction or ownership of the BESS Resource (including credits under Sections 38, 45, 46 and 48 of the Internal Revenue Code of 1986, as amended); (b) any federal, state, or local grants, subsidies or other like benefits relating in any way to the BESS Resources; and (c) any other form of incentive relating in any way to the BESS Resources that is not an Environmental Attribute associated with Charging Energy. “Start Charge” has the meaning set forth on the Cover Sheet. “Start-Up” means the action of bringing the Thermal Resource from shutdown to synchronization at its minimum load and the unconditional release of such Thermal Resource for ramping to the Dispatchable Energy.
“Start-Up Frequency” means the number of Start-Ups of the Thermal Resource occurring during each month of the Delivery Term.
“Station Power” means:
(a) The Energy produced or discharged by the Facility that is used within the Facility to power the lights, motors, cooling equipment, control systems and other electrical loads that are necessary for operation of the Facility; and

16 (b) the Energy produced or discharged by the Facility that is consumed within the Facility’s electric energy distribution system as losses. “Station Use” means, in addition to all Auxiliary Use, the Energy (including Energy produced or discharged by the Facility) that is used within the Facility to power the lights, motors, temperature control systems, control systems, and other electrical loads that are necessary for operation of the Facility, and excludes any energy that is used within the Facility to power the lights, motors, cooling equipment, control systems, and other electrical loads that are necessary for operation of the Facility during the period in which the Facility is charging or discharging pursuant to a Charging Notice or Discharging Notice.
“Storage Availability Adjustment Factor” has the meaning set forth in Exhibit E. “Storage Capacity” means PMAX.
“Storage Capacity Test” means any test or retest of the capacity of the BESS Resource and/or Efficiency Rate conducted in accordance with the testing procedures, requirements and protocols set forth in Section 4.11 and Exhibit F.
“Storage Contract Capacity” has the meaning set forth on the Cover Sheet. “Storage Contract Quantity” has the meaning set forth on the Cover Sheet. “Storage Energy” means the total quantity of Energy measured in MWh that can be stored by the BESS Resource as set forth on the Cover Sheet.
“Storage RA Contract Quantity” means the amount of Resource Adequacy Benefits associated with the BESS Resource as set forth on the Cover Sheet; provided, however, any reduction in the amount of Resource Adequacy Benefits that are associated with the BESS Resource due to a change in applicable Law (including a change in the CPUC or CAISO methodology for calculating Qualifying Capacity or Net Qualifying Capacity (as those terms are defined in the CAISO Tariff)) after the Effective Date, shall not result in a reduction in the Storage RA Contract Quantity, and Seller shall be deemed to have delivered the entire amount of Resource Adequacy Benefits associated with the BESS Resource as set forth on the Cover Sheet if Seller makes available for Buyer’s use the then-applicable Net Qualifying Capacity the BESS Resource. “Storage RA Payment” has the meaning set forth on the Cover Sheet. “Storage RA Price” has the meaning set forth on the Cover Sheet. “Storage RA Start Date” has the meaning set forth on the Cover Sheet. “Storage Reservation Payment” has the meaning set forth on the Cover Sheet. “Storage Reservation Price” has the meaning set forth on the Cover Sheet. “Storage Resource Adequacy Benefits” means the rights and privileges attached to the Facility associated with the Storage RA Contract Quantity that satisfy any entity’s resource

17 adequacy obligations, as those obligations are set forth in any Resource Adequacy Rulings and includes any local, zonal or otherwise locational attributes associated with the Facility, in addition to flex attributes.
“Stored Energy Level” means, at a particular time, the amount of Energy in the Facility available to be discharged as Discharging Energy, expressed in MWh. “Subsequent Buyer” means the purchaser of RA Product from Buyer in a re-sale of RA Product by Buyer.
“Substitute Capacity” means “RA Substitute Capacity” as defined in the CAISO Tariff. “Substitute Capacity Request” has the meaning set forth in Section 4.5(b). “Supply Plan” has the meaning set forth in the CAISO Tariff. “System Emergency” means any condition that requires, as determined and declared by CAISO or the PTO, automatic or immediate action to (i) prevent or limit harm to or loss of life or property, (ii) prevent loss of transmission facilities or generation supply in the immediate vicinity of the Facility, or (iii) to preserve Transmission System reliability. “Tax” or “Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Terminated Transaction” has the meaning set forth in Section 11.2(a). “Termination Payment” has the meaning set forth in Section 11.3. “Test Energy” has the meaning set forth in Section 3.6. “Thermal Start Date” has the meaning set forth on the Cover Sheet. “Thermal RA Contract Quantity” means the amount of Resource Adequacy Benefits associated with the Thermal Resource as set forth on the Cover Sheet; provided, however, any reduction in the amount of Resource Adequacy Benefits that are associated with the Thermal Resource due to a change in applicable Law (including a change in the CPUC or CAISO methodology for calculating Qualifying Capacity or Net Qualifying Capacity) after the Effective Date, shall not result in a reduction in the Storage RA Contract Quantity, and Seller shall be deemed to have delivered the entire amount of Resource Adequacy Benefits associated with the Thermal Resource as set forth on the Cover Sheet if Seller makes available for Buyer’s use the then-applicable Net Qualifying Capacity of the Thermal Resource. “Thermal RA Payment” has the meaning set forth on the Cover Sheet.

18 “Thermal Reservation Payment” has the meaning set forth on the Cover Sheet. “Thermal Reservation Price” has the meaning set forth on the Cover Sheet. “Thermal Resource” means the natural gas-fired turbine electricity generating power plant at the Facility as described in Exhibit A.
“Thermal Resource Adequacy Benefits” means the rights and privileges attached to the Facility associated with the Thermal RA Contract Quantity that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in any Resource Adequacy Rulings and includes any local, zonal or otherwise locational attributes associated with the Facility, in addition to flex attributes.
“Thermal Resource PNode” means the Thermal Resource PNode identified on the Cover Sheet, as such location may be redesignated from time to time. “Transmission Provider” means any entity or entities transmitting or transporting Facility Energy on behalf of Seller or Buyer from the applicable Delivery Point. “Transmission System” means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service downstream from the Delivery Points.
“Unavailable” means that the BESS Resource is not available to be charged nor to be discharged.
“Variable O&M Rate” has the meaning set forth on the Cover Sheet.

1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless otherwise specified;
(e) a reference to a document or agreement, including this Agreement means such document, agreement or this Agreement including any amendment or supplement to, or replacement, novation or modification of this Agreement, but disregarding any amendment,

19 supplement, replacement, novation or modification made in breach of such document, agreement or this Agreement;
(f) a reference to a Person includes that Person’s successors and permitted assigns;
(g) the term “including” means “including without limitation” and any list of examples following such term shall in no way restrict or limit the generality of the work or provision in respect of which such examples are provided; (h) references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires; (i) in the event of a conflict, a mathematical formula or other precise description of a concept or a term shall prevail over words providing a more general description of a concept or a term;
(j) references to any amount of money shall mean a reference to the amount in United States Dollars;
(k) words, phrases or expressions not otherwise defined herein that (i) have a generally accepted meaning in Prudent Industry Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Industry Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings;
(l) each Party acknowledges that it was represented by counsel in connection with this Agreement and that it or its counsel reviewed this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement; and
(m) Buyer acknowledges that, as of the Effective Date, the Facility is (or will be) owned by two of Seller’s Affiliates (each, an “Owner”), one of which owns the Thermal Resource and one of which will own the BESS Resource. Throughout the Contract Term Seller will maintain, such agreements with the Owners and other instruments as are necessary for Seller to perform its obligations under this Agreement. References to Seller in this Agreement will include, as the context requires, Seller and/or the Owners.

ARTICLE 2
TERM; COMMERCIAL OPERATION; OPTIMIZATION SERVICES

2.1 Contract Term.
(a) The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect until the conclusion of the Delivery Term, subject to any early

20 termination provisions and any contract term extension provisions set forth herein (“Contract Term”).
(b) Applicable provisions of this Agreement shall continue in effect after termination, including early termination, to the extent necessary to enforce or complete the duties, obligations or responsibilities of the Parties arising prior to termination. The confidentiality obligations of the Parties under Article 18 and all indemnity and audit rights and obligations shall remain in full force and effect for five (5) years following the termination of this Agreement.

2.2 Conditions Precedent. The Commercial Operation Date shall not occur until the following conditions have been satisfied:
(a) Seller has delivered to Buyer (i) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit L and (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit M setting forth the Installed Capacity on the Commercial Operation Date;
(b) A Participating Generator Agreement (as defined in the CAISO Tariff) and/or a Participating Load Agreement (as defined in the CAISO Tariff) and a Meter Service Agreement for CAISO Metered Entities (as defined in the CAISO Tariff) for the BESS Resource between Seller and CAISO shall have been executed and delivered and be in full force and effect, and a copy of each such agreement delivered to Buyer;
(c) An Interconnection Agreement between Seller (or its Affiliate or a third-party transmission entity, if a sharing arrangement permitted by this Agreement is in effect) and the PTO shall have been executed and delivered and be in full force and effect and a copy of the Interconnection Agreement delivered to Buyer;
(d) All applicable regulatory authorizations, approvals, and permits required for operation of the BESS Resource have been obtained (or if not obtained, applied for and reasonably expected to be received within ninety (90) days) and all conditions thereof that are capable of being satisfied on the Commercial Operation Date have been satisfied and shall be in full force and effect, and Seller has delivered to Buyer an attestation certificate from an officer of Seller certifying to the satisfaction of this condition;
(e) Seller has obtained all real property rights, including Site control, required for the operation of the BESS Resource during the Delivery Term, and Seller has provided evidence of such rights to Buyer;
(f) Insurance requirements for the Facility pursuant to Article 17 have been met, with evidence provided in writing to Buyer;
(g) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8; and
(h) Seller has paid Buyer for all amounts then owing under this Agreement, if any, including COD Delay Damages.

21 At least ninety (90) days prior to the Commercial Operation Date, Seller shall deliver Notice to Buyer of the anticipated Commercial Operation Date and the proposed Operating Procedures, which Operating Procedures shall be consistent with, and no less restrictive than, the technical, operational and decision-making parameters or procedures described in Exhibit H. The Parties shall meet periodically upon the written request of either Party, but in any event no less than once per Contract Year, to evaluate potential changes to the Operating Procedures.

2.3 Reserved.

2.4 Scheduling Services.
(a) At least one hundred twenty (120) days prior to the Thermal Start Date, Seller shall
(b) During the Delivery Term, Seller’s designee under the SC Agreement shall be responsible for performing all obligations under this Agreement that are appropriate or required to be performed by a Scheduling Coordinator; provided, however, notwithstanding the foregoing, as of the Effective Date, such Seller’s designee under the SC Agreement shall be responsible for submitting Supply Plans for the Thermal RA Contract Quantity for the two (2) Showing Months preceding the Thermal Start Date. Seller shall provide guidance and direction directly to the Scheduling Coordinator to optimize the dispatch of the Facility and procure natural gas, and Seller’s instructions shall be controlling. During the Delivery Term, Seller shall take, or cause the Facility’s SC to take, all necessary steps to qualify itself and the Facility in such other manner identified and approved by the CAISO and CPUC that permits Seller to sell and deliver any and all Resource Adequacy Benefits and other Capacity Attributes to Buyer. In addition to the requirements of Exhibit N, Seller shall cause the Facility’s SC to comply, with all applicable CAISO Tariff provisions, CPUC Decisions and all other applicable rules, requirements or Laws, including any bidding of the Facility to meet any Must Offer Obligations, in order to deliver or maintain the right to deliver Resource Adequacy Benefits and other Capacity Attributes to Buyer. (c)
(d) Notwithstanding any other provision of this Section 2.4, the provisions of

22 this Section 2.4 shall be subject at all times to the provisions of Section 2.7.

2.5 Forecasting Services.
(a) At least ninety (90) days prior to the Thermal Start Date,

(b) In connection with any bidding, dispatch or other decisions (c) Notwithstanding any other provision of this Section 2.5, the provisions of this Section 2.5 shall be subject at all times to the provisions of Section 2.7.

2.6 Financial Responsibility for Scheduling and Forecasting Services. (a)
(b) The Parties acknowledge and agree that Seller will not be directly performing SC services. Seller shall not be responsible for the financial results of Seller’s dispatch instructions to the SC but shall be responsible for the SC’s failure to implement such instructions in accordance with the requirements of this Agreement, including Prudent Industry Practice and the requirements of the CAISO Tariff. Seller will use reasonable efforts to ensure that the SC Agreement has a provision identifying Buyer as a third-party beneficiary of the SC Agreement and entitling Buyer to have direct recourse against the SC for remedies, including breach of contract and indemnification.

2.7 Performance Maximization.

23 ARTICLE 3

PURCHASE AND SALE

3.1 Purchase and Sale of Product. Subject to the terms and conditions of this Agreement, during the Delivery Term, Buyer will purchase all the Product associated with the Facility at the Contract Price, and Seller shall supply and deliver to Buyer all the Product associated with the Facility. During the Delivery Term, Buyer will have exclusive rights, subject to compliance with the Operating Procedures, to offer, bid, or otherwise submit the Product from the Facility for sale in the available markets and retain and receive any and all related revenues. (a) Facility Energy. Buyer’s right to Facility Energy shall not commence until the Thermal Start Date and is limited to the Interconnection Capacity Limit. Seller may elect to schedule any combination of Dispatchable Energy and Discharge Energy, but in the event that such scheduling results in an amount of Dispatchable Energy and Discharging Energy that would exceed the Interconnection Capacity Limit, Seller shall adjust the Dispatchable Energy so that the

24 sum of Discharging Energy and Dispatchable Energy does not exceed the Interconnection Capacity Limit. Notwithstanding the forgoing, Buyer’s right to Facility Energy from the BESS Resource shall not commence until the Commercial Operation Date. (b) Ancillary Services. Buyer’s right to Ancillary Services and Flexible Ramping Product from the Thermal Resource shall not commence until the Thermal Start Date, and Buyer’s right to Ancillary Services and Flexible Ramping Product from the BESS Resource shall not commence until the Commercial Operation Date. Further, Buyer’s right to Ancillary Services and Flexible Ramping Product is limited to the Ancillary Services and Flexible Ramping Product that can be provided from Energy from the applicable resource under the CAISO Tariff without modifying the Facility and in no event greater than the Interconnection Capacity Limit.

Such right specifically excludes any Ancillary Services and Flexible Ramping Product that interfere or conflict with the ability to supply the Resources Adequacy Benefits. Buyer may elect to schedule Ancillary Services and Flexible Ramping Product from any combination of Dispatchable Energy and Discharging Energy, but the total quantity may not exceed the quantity of Ancillary Services and Flexible Ramping Product that can be provided from the Interconnection Capacity Limit in any hour.
(c) Environmental Attributes. Buyer shall own all of Buyer’s Share of Environmental Attributes associated with (i) the generation of electricity by the Thermal Resource and (ii) the Charging Energy.

3.2 Ownership of Standalone Energy Storage Incentives. Seller shall own and may assign or sell, in its sole discretion, all right, title, and interest to any Standalone Energy Storage Incentives associated with or resulting from the development, installation, ownership or operation of the Facility or the production, sale, purchase or use of the Charging Energy or Discharging Energy, in each case that currently exist or as may become available due to any change in Law.

3.3 Capacity Attributes and RA Shortfall Damages.
(a) Capacity Attributes other than RA Product. Seller shall own and may assign or sell, in its sole discretion, all right, title, and interest to any Capacity Attributes associated with or resulting from the development, installation, ownership or operation of the Facility or the production, sale, purchase or use of the Facility Energy, in each case that currently exist or as may become available due to any change in Law, except to the extent such Capacity Attributes are necessary to deliver the RA Product, including to meet the requirements of the Resource Adequacy Rulings.
2 (b) RA Shortfall Damages. With respect to any RA Shortfall commencing on the Thermal Start Date, Seller shall pay to Buyer an amount equal to the product of the RA Shortfall Amount

25 3.4 Variable O&M. During the Delivery Term, Buyer shall pay the Variable O&M Rate to Seller for all Dispatchable Energy pursuant to the invoicing and payment provisions set forth in Article 8.

3.5 Reservation and RA Payments. During each month of the Delivery Term, Buyer shall pay the monthly Thermal Reservation Payment and Thermal RA Payment and, during each month of the Delivery Term following the Commercial Operation Date, the Storage Reservation Payment and Storage RA Payment, to Seller pursuant to the invoicing and payment provisions set forth in Article 8.

3.6 Test Energy. To the extent that all or a portion of Buyer’s Share of any electricity is delivered to Buyer from the BESS Resource prior to the Commercial Operation Date (“Test Energy”), delivery of such Test Energy shall not be evidence that Commercial Operation has been achieved or that the BESS Resource has been placed in service.

3.7 Emissions.
(a) Carbon Emissions. The Parties acknowledge and agree that Buyer shall reimburse Seller Buyer’s Share of all costs for the Facility to comply with the Carbon Emission Regulations, including Buyer’s Share of the documented costs of Carbon Allowances allocated to Buyer by Seller. To the extent there is any change in the operations of the Facility or any Change in Law that changes how the Carbon Emission Regulations are being implemented, Seller shall be responsible for taking those actions necessary or appropriate to comply with any such Change in Law and Buyer shall reimburse Seller for Buyer’s Share of the reasonable and documented costs associated therewith.
(b) Other Air Emissions. Seller represents and warrants that presently the Facility has the necessary air emission permits (excluding those associated with Carbon Emission Regulations) to operate as it has historically operated. To the extent there is any change in the operations of the Facility or any Change in Law that changes the air emission permits or Seller’s cost of complying with such air emission permits, Seller shall be responsible for taking those actions necessary or appropriate to comply with any such Change in Law and Buyer shall reimburse Seller for Buyer’s Share of the reasonable and documented costs associated therewith.

ARTICLE 4

OBLIGATIONS AND DELIVERIES

4.1 Product Delivery. Subject to the provisions of this Agreement, during the Delivery Term:
(a) Seller shall supply and deliver the Product to Buyer, and Buyer shall accept and pay for the Product, in accordance with the terms of this Agreement. Notwithstanding

26 anything herein to the contrary, Seller shall have no obligation to deliver any (i) Thermal Resource Adequacy Benefits prior to the Thermal Start Date or (ii) Storage Resource Adequacy Benefits prior to the Storage RA Start Date. For the avoidance of doubt, Seller shall maintain the sole and beneficial owner of any Product not supplied and delivered to Buyer under this Agreement. (b) Seller will be responsible for paying or satisfying when due any costs or charges imposed in connection with Station Power.
(c) Buyer shall be responsible for all costs and charges, imposed in connection with: (i) the delivery of Charging Energy to the Delivery Point for the BESS Resource (including the cost of the Charging Energy itself and associated Electrical Losses), and (ii) the acceptance and transmission of Discharging Energy and Dispatchable Energy at and from the applicable Delivery Point, including without limitation, transmission costs and transmission line losses with regard to (i) and (ii). Charging Energy, Discharging Energy, Dispatchable Energy, Resource Adequacy Benefits, and other Products will be Scheduled and delivered to the CAISO by the Scheduling Coordinator.
(d) Exclusive Rights. Buyer shall have exclusive rights to the Product and all benefits derived therefrom, including the exclusive right to use, market or sell the RA Product and the right to all revenues generated from the use, resale or remarketing of the RA Product.

4.2 Transfer of Resource Adequacy Benefits.
(a) Seller shall transfer Buyer’s Share of the RA Contract Quantity and, if applicable, Replacement RA from the Facility or any Replacement Units (the “RA Product”) to Buyer by submitting Supply Plans to CAISO for the Shown Unit(s). (b) Seller shall cause all Supply Plans to meet and be filed in conformance with the requirements of the CPUC and the CAISO Tariff. Seller shall submit, or cause the Shown Unit’s SC to submit, on a timely basis with respect to each applicable Showing Month, Supply Plans in accordance with the CAISO Tariff and CPUC requirements to identify and confirm the RA Product delivered in accordance with Buyer’s instructions for each Showing Month of the Delivery Term.
(c) If CAISO rejects the Supply Plan or the Resource Adequacy Plan with respect to any part of the RA Product for the Facility in any Showing Month, the Parties shall confer, make such corrections as are necessary for acceptance, and resubmit the corrected Supply Plan for validation before the applicable deadline for the Showing Month. (d) The RA Product is received when the CIRA Tool shows that the Supply Plan submitted in compliance with Buyer’s instructions, including Buyer’s instructions to withhold all or part of the RA Product for such Showing Month, has been accepted for the RA Product from the Shown Unit(s) by CAISO. Seller has failed to transfer the RA Product under this Section 4.2 if (i) Buyer has elected to submit the RA Product from the Shown Unit(s) in its Resource Adequacy Plan and such submission is accepted by the CPUC and the CAISO but the Supply Plan and Resource Adequacy Plan are not matched in the CIRA Tool and are rejected by CAISO due to the acts or omissions of Seller notwithstanding performance of the Parties’ obligations in Section

4.2(c) or (ii) Seller fails to submit the volume of RA Product for any Showing Month in such

27 amount as instructed by Buyer for the applicable Showing Month (not to exceed Buyer’s Share of the RA Product) (an “RA Shortfall”). Seller will not have failed to properly transfer the RA Product if Buyer fails or chooses not to submit the Shown Unit(s) and the RA Product in its Resource Adequacy Plan with the CPUC or CAISO.
(e) Hold-Back Capacity, if any, is deemed RA Product received by Buyer, unless utilized under Section 4.5 as Substitute Capacity, then RA Product is considered received according to the requirements therein.
(f) To the extent Seller reduces deliveries of Product pursuant to Section 4.8 prior to the Facility being included in the applicable Supply Plan and does not elect to provide Replacement RA, Buyer shall be responsible for the costs associated with procuring Substitute Capacity to the extent Buyer directs Seller to include the Facility in the applicable Supply Plan.

To the extent Seller reduces deliveries of Product either pursuant to Section 4.8 or otherwise after the Facility is included in the applicable Supply Plan, Seller shall be responsible for the costs associated with procuring Substitute Capacity.

4.3 Seller’s Option To Provide Alternate Capacity. If Seller is unable to provide the Resource Adequacy Benefits from the Facility for a Showing Month for any reason, including, without limitation, as provided in Section 4.8, then Seller may, at no cost to Buyer, provide Buyer with Replacement RA from one or more replacement units having the same or better Capacity Attributes (including Showing Availability) as the Thermal Resource or BESS Resource, as applicable (each such unit, a “Replacement Unit”) in an amount such that the total amount of RA Product provided to Buyer from the Facility and any Replacement Unit(s) for each Showing Month is not more than the RA Contract Quantity, provided that in each case:
(a) Seller shall notify Buyer in writing of its intent to provide Replacement RA and shall identify the proposed Replacement Units from which such Replacement RA shall be provided no later than the Notification Deadline for Buyer’s Compliance Showings related to such Showing Month;
(b) The proposed Replacement Units must (i) be accepted by the CAISO, and (ii) otherwise satisfy the requirements of this Agreement; (c) Seller shall, or shall cause the SC to submit, a Supply Plan for each Showing Month and, if applicable, annual filing, no later than the Notification Deadline for Buyer’s Compliance Showings;
(d) If Seller does not comply with the requirements of Sections 4.3(a), (b) and (c) for the applicable Showing Month and, if applicable, annual filing, then any such Replacement Units shall not be deemed a Replacement Unit for purposes of this Agreement for that Showing Month; and
(e) The designation of any Replacement Unit(s) by Seller shall be subject to Buyer’s prior written approval, which shall not be unreasonably withheld, conditioned or delayed. (f) In no event shall a Replacement Unit utilize coal or coal materials as a source of fuel. A Replacement Unit must be a specific resource that is connected directly to the

28 CAISO-controlled grid or be under the operational control of CAISO. A Replacement Unit may not be an unspecified import.
(g) Once Seller has identified in writing any Replacement Units that meetthe requirements of this Section 4.3 and Buyer has approved such Replacement Units as consistent with this Agreement, then any such Replacement Units shall be deemed a Shown Unit for purposes of this Agreement for that Showing Month. Buyer’s approval of a Replacement Unit as to a given Showing Month shall not be construed as approval of such Replacement Unit for any subsequent Showing Month.

4.4 Buyer’s Re-Sale of RA Product.
(a) Buyer may re-sell all or part of the RA Product; provided that any such re-sale must not increase Seller’s obligations hereunder other than as set forth in this Section 4.4. For any such resale, the Resource Adequacy Plan of Buyer as used herein will refer to the Resource Adequacy Plan of the Subsequent Buyer. Seller shall, or shall cause the Shown Unit’s SC, to follow Buyer’s instructions with respect to providing such resold RA Product to Subsequent Buyers, to the extent such instructions are consistent with Seller’s obligations under this Agreement. Seller shall, and shall cause the Shown Unit’s SC, to take all commercially reasonable actions and execute all documents or instruments reasonably necessary to allow such Subsequent Buyers to use such resold RA Product in a manner consistent with Buyer’s rights under this Agreement. If Buyer incurs any liability to a Subsequent Buyer due to the failure of Seller or the Shown Unit’s SC to comply with this Agreement, Seller will be liable to Buyer for the amounts Seller would have owed Buyer under this Agreement if Buyer had not resold the RA Product. (b) Buyer shall notify Seller in writing of any resale of RA Product and the Subsequent Buyer no later than two (2) Business Days before the deadline for the Compliance Showing for each Showing Month for which Buyer has resold the RA Product. Buyer shall notify Seller of any subsequent changes or further resales no later than two (2) Business Days before the deadline for the Compliance Showing for each Showing Month for which Buyer has resold the RA Product.
(c) If CAISO or CPUC develops a centralized capacity market, Buyer will have exclusive rights to direct the Seller or the Shown Unit’s SC to offer, bid or otherwise submit the RA Product for re-sale into such market, and Seller and the Shown Unit’s SC shall comply with the Buyer’s direction and Buyer shall retain and receive all revenues from such re-sale. (d) Buyer shall have the exclusive right to direct the Seller or the Shown Unit’s SC to offer, bid or otherwise submit the RA Product into the CAISO Competitive Solicitation Process (CSP) for CPM Capacity. Seller and the Shown Unit’s SC shall comply with the Buyer’s direction and, to the extent that the CAISO designates the RA Product as CPM Capacity, Buyer shall be entitled to retain and receive the CPM Capacity Payment. Unless otherwise instructed by Buyer, (i) Seller shall not, and shall cause the Shown Unit’s SC to not, offer any portion of the RA Product to CAISO as CPM Capacity and (ii) if CAISO designates any portion of the RA Product as CPM Capacity, then Seller shall, and shall cause the Shown Unit’s SC to, promptly (and in any event within one (1) Business Day of the time Seller receives notification from CAISO) notify Buyer of such designation, and if CAISO makes such a designation, Seller shall not, and shall

29 cause the Shown Unit’s SC to not, accept any such designation by CAISO unless and until Buyer has agreed to accept such designation.

4.5 Hold-Back and Substitute Capacity.
(a) No later than three (3) Business Days before the relevant deadline for the initial Compliance Showing with respect to a particular Showing Month, Buyer may request in writing that Seller not list, or cause the Shown Unit’s SC not to list, in the Shown Unit’s Supply Plan a portion or all of the RA Product for such Showing Month (“Hold-Back Capacity”). The amount of RA Product that is the subject of Buyer’s request for Hold-Back Capacity shall be deemed RA Product received by Buyer consistent with Section 4.2 for purposes of calculating the payments due hereunder, unless utilized under Section 4.5(b) as Substitute Capacity, then RA Product is considered received according to the requirements therein. Seller shall, or shall cause the Shown Unit’s SC to, comply with Buyer’s request under this Section 4.5. (b) In any Showing Month in which Buyer has designated Hold-Back Capacity, Buyer may request, in writing, that Seller make the Hold-Back Capacity available for Buyer’s use as Substitute Capacity within the respective Showing Month (“Substitute Capacity Request”) with the following schedule:
(i) For Buyer’s Substitute Capacity Requests that are to be scheduled with CAISO prior to the Showing Month (e.g., through the CAISO RA Substitute Capacity assessment), the Substitute Capacity Request shall be received by Seller at least two (2) Business Days prior to the applicable CAISO scheduling deadline. Seller shall, or shall cause the Facility’s Scheduling Coordinator to, comply with Buyer’s request under this Section 4.5(b), provided that to the extent Seller is unable to provide the requested Substitute Capacity from the Facility due to a Planned Outage or a Forced Facility Outage, Seller shall not have any liability for such failure. (ii) For Buyer’s Substitute Capacity Requests that are to be scheduled with CAISO after the commencement of the Showing Month, the Substitute Capacity Request shall be received by Seller at least five (5) Business Days before Buyer submits its Substitute Capacity in the CIRA Tool. Seller shall, or shall cause the Replacement Unit’s Scheduling Coordinator to, comply with Buyer’s request under this Section 4.5(b), provided that to the extent Seller is unable to provide the requested Substitute Capacity from the Facility due to a Planned Outage or a Forced Facility Outage, Seller shall not have any liability for such failure.

4.6 Gas Supply.
(a) Gas Utility Connection. Seller will, at its sole cost and expense, maintain the interconnection of the Thermal Resource and gas meter to the Gas Distribution Utility. (b) Supply of Gas.
(i) Seller will cause the Scheduling Coordinator to ensure the procurement of a sufficient quantity of natural gas for the operation of the Thermal Resource consistent with the dispatch schedule for the Thermal Resource and to cause the delivery of such natural gas to the Gas Utility Receipt Point; and

30 (ii) Buyer will pay all costs associated with the procurement and delivery of natural gas to the Facility, excluding any costs, charges or penalties incurred due to the Seller’s failure to perform its actions under this Agreement or Seller’s failure to comply with the tariffs, agreements or other requirements of the Gas Distribution Utility. (c) Gas Hedging. Buyer may, from time to time, request that Seller enter into arrangements to purchase physical natural gas at a fixed price in accordance with Exhibit O (a “Hedging Transaction”). To the extent physical gas is procured pursuant to a Hedging Transaction, and the Thermal Resource is dispatched such that natural gas is required in excess of the quantity of physical gas procured under the Hedging Transaction or uses less natural gas than the quantity of physical gas procured under the Hedging Transaction, Seller shall use commercially reasonable efforts to procure or liquidate, as the case may be, natural gas consistent with Prudent Industry Practices, and shall pass through to Buyer any resulting costs or revenues.

4.7 Charging Energy Management.
(a) Generally. Buyer shall be solely responsible, at its sole cost, for procuring Charging Energy. Buyer shall be solely responsible, at its sole cost, for arranging transmission and wheeling required to deliver Charging Energy to the Delivery Point for the BESS Resource and to accept Discharging Energy at the Delivery Point for the BESS Resource. Except as expressly set forth in this Agreement, including Sections 4.7(c) and (e) and Section 4.11(b), Buyer shall be responsible for paying Buyer’s Share of all CAISO costs and charges associated with charging of the BESS Resource. If CAISO rules or protocols become inconsistent with such understanding, the Parties shall reasonably coordinate to amend or modify this Agreement to carry out the intent hereof, such agreement not to be unreasonably delayed, conditioned or withheld. (b) Charging Notices. The BESS Resource will have the capability to be charged seven (7) days per week and twenty-four (24) hours per day (including holidays), through Charging Notices sent electronically, subject to the requirements and limitations set forth in this Agreement, including the Operating Procedures; provided, however, that the sole and exclusive remedy for any failure of the BESS Resource to be available is the Storage Availability Adjustment Factor. Each Charging Notice issued in accordance with this Agreement will be effective unless and until CAISO modifies such Charging Notice by providing Seller with an updated Charging Notice. Seller shall comply with all Charging Notices, subject to the requirements and limitations set forth in this Agreement. Each Charging Notice issued in accordance with this Agreement will be effective unless and until such Charging Notice is modified with an updated Charging Notice (including as automatically updated in accordance with the definition of Charging Notice).

Notwithstanding the foregoing, Seller shall be solely responsible for causing sufficient Charging Notices to be issued to (i) support any Discharging Notices, (ii) ensure the eligibility of the Resource Adequacy Benefits for purchase and sale under the CAISO market rules, and (iii) otherwise participating in any CAISO markets.
(c) No Unauthorized Charging. Seller shall not charge the BESS Resource during the Delivery Term other than (i) pursuant to a valid Charging Notice, (ii) in connection with a Storage Capacity Test or (iii) pursuant to a notice from CAISO. If, during the Contract Term, Seller (1) charges the BESS Resource to a Stored Energy Level greater than the Stored Energy Level provided for in the Charging Notice or (2) charges the BESS Resource in violation of the

31 first sentence of this Section 4.7(c), then (x) Seller shall be responsible for Buyer’s Share of all Energy costs associated with such charging of the BESS Resource, (y) Buyer shall not be required to pay for such Energy, and (z) Buyer shall be entitled to the Product associated with discharging such Energy.
(d) Discharging Notices. The BESS Resource will have the capability to be discharged seven (7) days per week and twenty-four (24) hours per day (including holidays), through Discharging Notices sent electronically, subject to the requirements and limitations set forth in this Agreement, including the Operating Procedures; provided, however, that the sole and exclusive remedy for any failure of the BESS Resource to be available is the Storage Availability Adjustment Factor. Seller shall comply with all Discharging Notices, subject to the requirements and limitations set forth in this Agreement. Each Discharging Notice issued in accordance with this Agreement will be effective unless and until the CAISO modifies such Discharging Notice by providing Seller with an updated Discharging Notice.
(e) No Unauthorized Discharging. Seller shall not discharge the BESS Resource during the Delivery Term other than pursuant to a valid Discharging Notice, or in connection with a Storage Capacity Test, or pursuant to a notice from the CAISO. If, during the Delivery Term, Seller discharges the BESS Resource (i) other than as provided for in the Discharging Notice or (ii) in violation of the first sentence of this Section 4.7(e), then (x) Seller shall be responsible for all Energy costs associated with such discharging of the BESS Resource, (y) Buyer shall not be required to pay for the Charging Energy that was discharged, and (z) Buyer shall be entitled to the Product associated with such discharge. Seller shall ensure at all times that the sum of the Dispatchable Energy and the Discharging Energy does not exceed the Interconnection Capacity Limit.
(f) Scheduling Charging Energy and Discharging Energy. Seller (or Seller’s SC) shall schedule Charging Energy and Discharging Energy in accordance with the Charging Notices and Discharging Notices, subject to the requirements of this Agreement. In the event that Seller (or Seller’s SC) fails to schedule the Charging Energy or Discharging Energy in accordance with the requirements of this Agreement, the payment amounts owed to Buyer by Seller shall equal the net revenue Buyer would have received had Seller (or Seller’s SC) properly Scheduled the Charging Energy or Discharging Energy, as applicable. Payment of such amount shall be Seller’s sole and exclusive liability for any failure to schedule the Charging Energy or Discharging Energy, except as provided in Exhibit N.
(g) Coordination Regarding Commissioning and Storage Capacity Tests. Prior to the Commercial Operation Date, Buyer shall have no rights to issue or cause the BESS Resources to be charged or discharged. Seller shall have exclusive rights to test, charge, and discharge the BESS Resource. Seller is responsible to procure, at its own cost, any Energy required for commissioning purposes and to arrange to discharge such Energy into the grid. Seller shall be entitled to all CAISO revenues and other amounts paid by CAISO in respect of the BESS Resource testing for periods prior to the Commercial Operation Date. Both prior to and after the Commercial Operation Date, (i) Buyer shall reasonably coordinate and cooperate with Seller with respect to BESS Resource commissioning and Storage Capacity Tests, and (ii) Seller shall reasonably coordinate and cooperate with Buyer with respect to BESS Resource commissioning and Storage

32 Capacity Tests so as to minimize direct and opportunity costs to the Buyer associated with such activities.

4.8 Reduction in Deliveries.
(a) Facility Maintenance. Seller will deliver to Buyer the expected schedule for performing maintenance on the Facility in accordance with Exhibit I. Seller shall be permitted to reduce deliveries of Product during a Planned Outage. (b) Forced Facility Outage. Seller shall be permitted to reduce deliveries of Product during any Forced Facility Outage. Seller shall provide Buyer with Notice and expected duration (if known) of any Forced Facility Outage.
(c) Force Majeure Event. Seller shall be permitted to reduce deliveries of Product during any Force Majeure Event.
(d) Health and Safety. Seller shall be permitted to reduce deliveries of Product as necessary to maintain health and safety pursuant to Section 6.2.

4.9 Generating Capacity Availability.
(a) During the Delivery Term, the Facility shall maintain a Monthly GC Availability during each month of no less than the Guaranteed Generating Capacity Availability, which Monthly GC Availability shall be calculated in accordance with Exhibit J. (b) If the Monthly GC Availability during any month is less than the Guaranteed GC Availability, then Buyer’s payment for the Product shall be calculated by reference to the Generating Capacity Availability Adjustment Factor as determined in accordance with Exhibit J.
(c) Compliance Expenditure Cap. If a change in applicable Laws occurring after the Effective Date has increased Seller’s cost to comply with Seller’s obligations under this Agreement with respect to obtaining, maintaining, conveying or effectuating Buyer’s use of the Resource Adequacy Benefits, then the Parties agree that the maximum aggregate amount of costs and expenses Seller shall be required to bear during the Delivery Term to comply with all of such obligations shall be capped at
(“Compliance Expenditure Cap”).
(i) Any actions required for Seller to comply with its obligations set forth in the first paragraph above, the cost of which will be included in the Compliance Expenditure Cap, shall be referred to collectively as the “Compliance Actions.” (ii) If Seller reasonably anticipates the need to incur out-of-pocket expenses in excess of the Compliance Expenditure Cap in order to take any Compliance Action, Seller shall provide Notice to Buyer of such anticipated out-of-pocket expenses. (iii) Buyer will have sixty (60) days to evaluate such Notice (during

33 which time period Seller is not obligated to take any Compliance Actions described in the Notice) and shall, within such time, either (1) agree to reimburse Seller for all or some portion of the costs that exceed the Compliance Expenditure Cap (such Buyer-agreed upon costs, the “Accepted Compliance Costs”) or (2) waive Seller’s obligation to take such Compliance Actions, or any part thereof for which Buyer has not agreed to reimburse Seller. If Buyer does not respond to a Notice given by Seller under this Section within sixty (60) days after Buyer’s receipt of same, Buyer shall be deemed to have waived its rights to require Seller to take the Compliance Actions that are the subject of the Notice, and Seller shall have no further obligation to take, and no liability for any failure to take, such Compliance Actions until such time as Buyer agrees to pay such Accepted Compliance Costs.
(iv) If Buyer agrees to reimburse Seller for the Accepted Compliance Costs, then Seller shall take such Compliance Actions covered by the Accepted Compliance Costs as agreed upon by the Parties, and Buyer shall reimburse Seller for Seller’s actual costs to effect the Compliance Actions, not to exceed the Accepted Compliance Costs, within sixty (60) days from the time that Buyer receives an invoice and documentation of such costs from Seller.

4.10 Storage Availability.
(a) During the Delivery Term, the Facility shall maintain a Monthly Storage Availability during each month of no less than the Guaranteed Storage Availability, which Monthly Storage Availability shall be calculated in accordance with Exhibit E. (b) If the Monthly Storage Availability during any month is less than the Guaranteed Storage Availability, then Buyer’s payment for the Product shall be calculated by reference to the Storage Availability Adjustment Factor (as determined in accordance with Exhibit E).

4.11 Storage Capacity Tests.
(a) Prior to the Commercial Operation Date, Seller shall schedule and complete a Storage Capacity Test in accordance with Exhibit F. Thereafter, Seller and Buyer shall have the right to run retests of the Storage Capacity Test in accordance with Exhibit F. (b) Buyer shall have the right to send one or more representative(s) to witness all Storage Capacity Tests. Alternatively, to the extent that any Storage Capacity Tests are done remotely, and no representatives are needed on Site, Seller shall arrange for both Parties to have access to all data and other information arising out of such tests. Buyer shall be responsible for all costs, expenses, and fees payable or reimbursable to its representative(s) witnessing any Storage Capacity Test. For any Storage Capacity Tests initiated by Seller, Seller shall (i) not be entitled to the payment for associated Charging Energy, (ii) be liable for all CAISO costs and charges for associated Charging Energy and (iii) be entitled to any CAISO revenues associated with Discharging Energy. For any Storage Capacity Tests initiated by Buyer, Buyer shall (x) procure the associated Charging Energy, (y) be liable for all CAISO costs and charges for the associated Charging Energy, and (z) be entitled to any CAISO revenues associated with the associated

34 Discharging Energy. No Charging Notices or Discharging Notices shall be issued during any Storage Capacity Test except as reasonably requested by Seller or Buyer to implement the applicable test.
(c) Following each Storage Capacity Test, Seller shall submit a testing report in accordance with Exhibit F. If the actual capacity or efficiency rate determined pursuant to a Storage Capacity Test varies from the then current Storage Capacity and/or Efficiency Rate, as applicable, then the actual capacity and/or efficiency rate, as applicable, determined pursuant to a Storage Capacity Test (not to exceed the initial Storage Contract Quantity set forth on the Cover Sheet) shall become the new Storage Contract Quantity at the beginning of the day following the completion of the test for all purposes under this Agreement.

4.12 Efficiency Guaranty. On a monthly basis, if the Efficiency Rate of the BESS Resource is less than the Guaranteed Efficiency Rate, Seller shall reimburse Buyer for the incremental cost of purchasing Charging Energy calculated in accordance with Exhibit C.

4.13 Heat Rate Guaranty. On a monthly basis, if the Heat Rate of the Thermal Resource exceeds the Guaranteed Heat Rate, Seller shall reimburse Buyer for Buyer’s Share of the incremental cost of purchasing natural gas for the Thermal Resource calculated in accordance with Exhibit C.

4.14 Cycle Limits. Buyer may not exceed the Daily Start Limit or Annual Run Hour Limit of the Thermal Resource or the Daily Cycle Limit or Annual Cycle Limit of the BESS Resource. In the event that Buyer exceeds the preceding limits or its usage is below the preceding limits, Buyer shall, if and to the extent applicable, be assessed additional fees or credits in accordance with Exhibit J.

4.15 Interconnection Capacity. Throughout the Delivery Term, Seller shall have and maintain interconnection capacity available or dedicated (a) to the Thermal Resource that is no less than the Generating Capacity, and (b) to the BESS Resource that is no less than the Storage Contract Quantity, provided that such interconnection capacity may be maintained through a combination of rights under the Interconnection Agreement dedicated to the BESS Resource and under an Interconnection Agreement shared with the Thermal Resource. Seller shall be responsible for all costs of interconnecting the Thermal Resource and the BESS Resource to the Transmission System. Seller shall hold Buyer harmless from any penalties, imbalance energy charges, or other costs from CAISO or the Gas Distribution Utility or under this Agreement resulting from Seller’s breach of this Section 4.15. Buyer shall use commercially reasonable efforts to mitigate the damages from such breach.

4.16 Title and Risk of Loss. As between Buyer and Seller, Buyer shall have risk of loss for all natural gas prior to delivery to the gas meter for the Thermal Resource, and Seller shall have risk of loss thereafter. Risk of loss related to the Charging Energy will pass and transfer from the Buyer to the Seller when the Charging Energy is delivered to the Delivery Point. Title and risk of loss related to the Facility Energy will pass and transfer from the Seller to the Buyer when Facility Energy is delivered to the Delivery Point.

35 ARTICLE 5
TAXES

5.1 Allocation of Taxes and Charges. Seller shall pay or cause to be paid all Taxes on or with respect to the Facility or on or with respect to the sale and making available of Product to Buyer, that are imposed on Product prior to its delivery to Buyer at the time and place contemplated under this Agreement. Buyer shall pay or cause to be paid all Taxes on or with respect to the delivery to and purchase by Buyer of Product that are imposed on Product at and after its delivery to Buyer at the time and place contemplated under this Agreement (other than withholding or other Taxes imposed on Seller’s income, revenue, receipts or employees), if any.

If a Party is required to remit or pay Taxes that are the other Party’s responsibility hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement from the other for such Taxes. In the event any sale of Product hereunder is exempt from or not subject to any particular Tax, Buyer shall provide Seller with all necessary documentation within thirty (30) days after the Effective Date to evidence such exemption or exclusion. If Buyer does not provide such documentation, then Buyer shall indemnify, defend, and hold Seller harmless from any liability with respect to Taxes from which Buyer claims it is exempt.

5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, however, that neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefor from the other Party. All Product delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Product.

ARTICLE 6

MAINTENANCE OF THE FACILITY

6.1 Maintenance of the Facility. Seller shall comply with Law and Prudent Industry Practice relating to the operation and maintenance of the Facility, the generation and sale of Product.

6.2 Maintenance of Health and Safety. Seller shall take reasonable safety precautions with respect to the operation, maintenance, repair, and replacement of the Facility. If Seller becomes aware of any circumstances relating to the Facility that create an imminent risk of damage or injury to any Person or any Person’s property, Seller shall take prompt action to prevent such damage or injury and shall give Notice to Buyer’s emergency contact identified on Exhibit G of such condition. Such action may include, to the extent reasonably necessary, disconnecting and removing all or a portion of the Facility, or suspending the supply of Energy, Dispatchable Energy or Discharging Energy to Buyer.

6.3 Shared Facilities. The Parties acknowledge and agree that certain of the Interconnection Facilities, Seller’s rights and obligations under the Interconnection Agreement and Seller’s rights and obligations under transmission service agreements with a Transmission Provider, may be subject to certain shared facilities and/or co-tenancy agreements (“Shared Facilities Agreements”) to be entered into among two or more of Seller, the Participating