Central Coast Community Energy (3CE) Operations Board
August 13, 2025

diesel buses off the
road with support
of E-bus program
12 Energy Programs Updates
2025 Q3
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 3,203 MT CO2e avoided as of JULY 2025
Plan Your Fleet Charge & Electrify Your Fleet
Reach Codes
*calculated using EPA and CARB reference data
gas cars off the
road with support
of Electrify Your
Ride
• City of Atascadero
• City of Capitola
• City of Carmel
• City of Guadalupe
• City of Monterey
• City of Salinas
• City of Sand City
• City of San Luis Obispo
• City of Soledad
• County of Santa Barbara
City of Goleta - New Construction (complete)
City of San Luis Obispo - Existing Buildings Multifamily (underway) City of Santa Cruz - Existing Buildings (underway)
City of San Luis Obispo.......1 EV & 8 L2s
County of San Luis Obispo...2 EVs
County of Santa Barbara .... 60 L2s
ag equipment
transitioned to electric
alternatives with
support of Agricltural 747 Electrification Program
Farm in Santa Barbara County
$50,499
Ag Electrification Program
Affordable Housing in Santa Cruz
$50,000
New Construction Elec. Program
Grape Farm in San Luis Obispo
$92,877
Ag Electrification Program
536
238
20 City of Goleta............17 L2s
City of Salinas............3 EVs
City of Santa Cruz....1 L3
City of Santa Maria...2 EVs

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 July 2025. The Energy Programs Update for Q3 FY 2024- 25 (Attachment 1) highlights the agency’s programs’ impact through the third quarter, as compared to the prior fiscal year’s Q3.
3Q FY23/24 3Q FY24/25
Total $ Distributed $5.3mil $9.2mil
GHG reductions 469 gas cars off the road 747 gas cars off the road Load Shifted 0kWh over 1,181 kWh daily

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, 3CE has distributed over $3,121,410 in EYR rebates across five counties, supporting over $35 million in EV and EV charger purchases. The EV purchases have resulted in over 3,203 MT CO2e avoided, which is equivalent to removing 747 gas cars off the road for one year.

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. The FY 2024-25 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.

To date, 3CE has distributed $1 mil in rebates for 12 electric buses and transit vans in five counties. These rebates have helped enable about $8.7M in electric bus purchases. 3CE staff continue to actively engage with the community to promote the program to interested schools, organizations, and transit authorities.

County Applicant
Type
Total
Funding
Total # of
E-Buses
% of Funding to Title 1 School or
Low-Income Community
Monterey 1 School District $200,000 1 100%
San Benito 1 School District $75,168 1 0%
San Luis Obispo 1 Transit Agency $400,000 5 -

Santa Barbara 2 School Districts $125,055 3 50%
Santa Cruz 2 School Districts $243,254 2 0%
TOTAL:
7 School Districts
& 1 Transit Agency $1,043,478 12 50%
Table 1 (above): FY 2-24-25 Electric Bus Program projects.

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 Atascadero  City of Salinas
 City of Capitola  City of Sand City
 City of Carmel-by-the-Sea  City of San Luis Obispo
 City of Guadalupe  City of Soledad
 City of Monterey  County of Santa Barbara
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 Charger) EV chargers. Member Agencies are eligible for up to $150,000 in funding support each fiscal year. 3CE’s FY 2024-25 CYF budget totals $1 million.

In FY 2024-25, the program has incentivized 86 chargers totaling nearly $284k and is engaged with additional Member Agencies who are in the process of installing EV chargers. 3CE expects increased participation towards the end of the fiscal year as Member Agencies who took part in FY 2023-24's Plan Your Fleet program implement their plans.

Member Agency Equipment Type Quantity Total Incentive
CITY OF GOLETA Level 2 17 $10,647.00
CITY OF SAN LUIS OBISPO Level 2 8$22,884.25

CITY OF SANTA CRUZ Level 3 1 $100,000.00
COUNTY OF SANTA BARBARA Level 2 60 $150,000.00
TOTAL 86 $283,531.25
Table 2 (above): 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.

To date in FY 2024-25, 3CE has received six applications. Staff are working 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, and the City of Watsonville and expects increased participation later in the fiscal years.

Member Agency Equipment Type Quantity Total Incentive
CITY OF SALINAS Battery Electric Vehicle 3 $21,000.00
CITY OF SAN LUIS OBISPO Electric Equipment 1 $25,000.00 CITY OF SANTA MARIA Battery Electric Vehicle 2 $10,000.00 COUNTY OF SAN LUIS OBISPO Battery Electric Vehicle 2 $14,000.00 TOTAL 8 $70,000.00
Table 3 (above): Electrify Your Fleet projects awarded in FY 2024-25.

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.

Workplace charging at 3CE’s San Luis Obispo and Soquel Offices On December 11, 2024, the Policy Board approved an EV charger capital project at 1026 Palm Street in San Luis Obispo as part of 3CE’s EV Charger Asset Pilot. Initial construction, including civil work and charger pedestal installation, was completed and highlighted during 3CE’s community open house on March 19,

2025. Final construction, including fire sprinkler upgrades and charger energization, was completed on July 14. Charger activation is currently in progress, with full operational status expected by July 31, 2025.

The project remains within the approved construction budget of $165,598 and is expected to realize additional cost savings through a $68,400 grant awarded by the San Luis Obispo APCD.

On June 18, 2025, the Policy Board approved a second EV charger project at 3CE’s Santa Cruz office located at 2601 Porter Street in Soquel as an additional workplace charging pilot site.

Since the Board’s initial approval in December, EV ownership among San Luis Obispo office employees has increased by 50 percent, reinforcing the value of accessible workplace charging. Staff have applied lessons learned from the San Luis Obispo project to advance preliminary work at the Soquel site, including engineering design and contractor pricing.

Picture 1 (above): EV Chargers at 3CE’s San Luis Obispo Office Future Pilot Sites
3CE staff are exploring additional pilot projects for workplace and public EV charging as part of the implementation of the EV Charging Master Plan. These potential sites will support 3CE’s strategy to expand access to EV charging along the Central Coast through agency-managed infrastructure.

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.

On April 9th, the Operation Board authorized Amendment No. 6 to 3CE’s agreement with Energy Solutions.

The Amendment revised the scope of work to bring incentive check processing in house, reducing the total not to exceed amount by $735,000. The execution of Amendment No. 6 will provide both program stability and budgetary flexibility through the end of the fiscal year.

In FY 2024-25, the EYH program has so far distributed $2,583,325 in rebates to support the installation of 188 Heat Pump HVAC units and 615 Heat Pump Water Heater Units. On July 3rd, the program was paused to new applications due to influx in participation in San Luis Obispo and Santa Barbara counties. As a result, the program is expected to distribute 70% rebates this fiscal year to income qualified customers.

The program will be relaunched on October 1st and include expanded eligibility guidelines to retroactively rebate customers who purchased appliances during the pause period.

County Heat Pump HVAC
Units Installed
Heat Pump Water Heater
Units Installed
MONTEREY 42 35
SAN BENITO 3 0
SAN LUIS OBISPO 10 22
SANTA BARBARA 7 546
SANTA CRUZ 126 12
Table 4 (above): FY 2024-25 Electrify Your Home installations by county. 3CE staff are collaborating with the agency’s Community Advisory Council (CAC) to design the next iteration of Electrify Your Home. On July 7th, 2025, 3CE published a request for proposals seeking a program facilitator to provide Virtual Home Assessments to 3CE’s residential customers.

New Construction Electrification Program
The New Construction Electrification Program (NCEP) provides housing developers and homeowners 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.

In FY 2024-25, the program has so far distributed $719,000 across four counties to support construction of 240 all-electric units.
3CE County
Market-Rate
Housing
Affordable
Housing
Accessory Dwelling
Units (ADUs)
Disaster
Rebuilds
Total Units
Incentivized
MONTEREY - - 3 - 3

SAN BENITO - - - - -

SAN LUIS
OBISPO 2 34 15 - 51
SANTA
BARBARA - 5 - 5
SANTA CRUZ - 172 5 4 181
Table 5 (above): All-electric construction supported via NCEP in FY 2024-25.

Reach Code Program
3CE’s Reach Code program launched October 1, 2022, providing local cities and counties with no-cost technical assistance to help adopt and implement reach codes, including stakeholder outreach support.

Services include presenting to key stakeholders, technical consultation, developing customized ordinances, reviewing staff presentations and reports, and developing implementation tools to help Member Agencies enforce reach codes. In FY 2024-25, 3CE budgeted $150,000 for the Reach Code program.

On April 9
th, 2025, the Operations Board approved an amendment to 3CE’s contract with TRC Engineers, 3CE’s technical support vendor for Reach Codes. The amendment increased the not-to-exceed amount listed in the contract by $385,000 and extended the term of the agreement by two years to allow for continued and uninterrupted services to support the Reach Codes program. The amendment also added additional services for code updates, and outreach to engage new member agencies with the program.

In FY 2024-25, 3CE is so far providing Reach Code assistance to the following Member Agencies:

Member Agency Reach Code Type
City of Goleta New Construction (complete)
City of San Luis Obispo Existing Buildings (underway)
City of Santa Cruz Existing Buildings (underway)
Table 6 (above): 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 the Ag Electrification Program is $800,000.

Rebates for equipment with higher estimated GHG emissions avoidance and more expensive equipment options, as well as those projects 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:
 Tier 1: Up to $15,000 for lower cost and GHG avoidance projects; and  Tier 2: Up to $75,000 for larger relative cost and GHG avoidance projects.

Program funds are offered as a post-purchase rebate, with up to two rebates per customer per fiscal year.

In FY 2024-25, 3CE has so far distributed $646,916 in rebates to support 20 equipment purchases. These rebates have helped enable over $1.5M in all-electric agricultural equipment. 80% of incentives distributed in FY 2024-25 have been to small business customers.

County Equipment
Incentivized
Total
Incentives
% Incentives to
Small Businesses
Monterey
3 Standard tractors
1 Irrigation pump
1 Harvest equipment
$134,279 80%
San Benito 1 Standard tractor
1 Forklift $58,095 100%
San Luis
Obispo 2 Standard tractors $92,877 100%
Santa
Barbara
4 Standard tractors
1 Excavator $209,946 80%
Santa Cruz
2 Standard tractors
1 Compact tractor
1 Excavator
1 Irrigation pump
1 Harvest equipment
$151,719 100%

Total: 20 All-electric equipment $646,916 80%
Table 7 (above): Agricultural electrification projects awarded in FY 2024-25.

ENERGY OPTIMIZATION
Residential Battery Rebate Program
3CE’s Residential Battery Rebate program launched on July 16, 2024, to promote the use of residential behind-the-meter battery storage systems. Rebates are provided for the 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 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) rebate for customers. A $500 per kilowatt hour (kWh) rebate is offered to Net Energy Metering (NEM) 1.0 and NEM 2.0 customers who elect to transition to the Solar Billing Plan (SBP), also known as the 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 rely on electricity to power medical devices. To promote adoption in disadvantaged and low-income communities, the program offers a $500 per kilowatt hour (kWh) rebate for customers enrolled in CARE or FERA payment assistance programs.

In February 2025, staff introduced a new scheduling assistance service to help customers meet the program’s requirements by setting their battery systems to discharge during the peak hours of 4 pm to 9 pm. 83 customers have since signed up to receive assistance and have successfully met discharge requirements. Staff are conducting direct outreach to rebate applicants to facilitate their enrollment.

In FY 2024-25, 3CE hasso far received 425 applicationsfor the program. Since launching the program, 3CE has distributed $993,200 in rebates to customers, with approximately 1,391 kWh of load shifted daily during peak hours.

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

Hourly Flex Pricing Pilots 1 and 2
3CE is reaching out to eligible customers for the Hourly Flex Pricing Pilots (HFPP), which provides customer savings and operational benefits through real-time, dynamic price signals. The pilots offer eligible agricultural, commercial, and residential customers a way to lower their energy costs by locking into hourly, market-based energy prices, forecasted up to one week in advance. The pricing provides an opportunity for participants to shift energy use to lower priced hours. Participants are charged monthly at their normal rate; however, a monthly “performance bill” based on the hourly rates is issued and at the end of each 12-month period, with any total cost savings achieved through hourly price-based load shifting paid to the customer by 3CE check.

The Hourly Flex Pricing Expanded Pilot 1 is for agricultural customers and includes the option to receive a one-time rebate for purchasing automation technology and software that responds to price signals, such as a smart controller for an irrigation pump. The HFP Expanded Pilot 2 is for commercial and residential customers. All customer classes have access to Automation Service Providers (ASPs) to help manage load shifting and optimize cost savings.

To date, 3CE has 58 customers enrolled in HFP Pilots 1 or 2. Total enrolled load from these customers is just over 16 GWh; approximately 25% of 3CE’s total internal load enrollment goals for the pilot.

Pilot Customers Enrolled Total Enrolled Load
HFP Expanded Pilot 1 (Agricultural) 4 4.04 GWh
HFP Expanded Pilot 2 (Commercial) 45 12.00 GWh
HFP Expanded Pilot 2 (Residential) 9 0.085 GWh
TOTAL 58 16.125 GWh
Table 8 (above): 3CE customers enrolled in Hourly Flex Pricing Pilot

OTHER STRATEGIC INITIATIVES
Customer Relationship Management System
The new Customer Relationship Management (CRM) tool for program management and applications 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 are under development.

Staff Report Item 9
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Jerri Strickland, Director of Regulatory Affairs & Compliance Kalia Mitchell-Silbaugh, Policy Advisor
Robert Wool, Policy Advisor
SUBJECT: CPUC Regulatory Update
DATE: August 13, 2025
RECOMMENDATION:

CPUC Regulatory Update to the Operations Board of Directors.

DISCUSSION/ANALYSIS:

Please find attached 3CE’s Regulatory Update, providing the latest information on the following:
 Resource Adequacy (RA)
 Provider of Last Resort (POLR) and Emergency Transition Planning  Preventing Disconnections
 New Power Charge Indifference Adjustment (PCIA) Rulemaking  Integrated Resource Planning (IRP)
 Interconnections
 PG&E Rule 30 Application for Transmission Service
 Energy Resources Recovery Account (ERRA) Compliance
 Energy Resources Recovery Account (ERRA) Forecast
 General Rate Cases
FISCAL IMPACT:

No financial impact by receiving this report.

CONCLUSION:

This is an informational item only.

ATTACHMENT(S):

1. CPUC Regulatory Update

Operations Board
CPUC Regulatory Update
August 13, 2025

Table of Contents
REGULATORY UPDATE......................................................................................................................................................... 3 Resource Adequacy (RA) -.............................................................................................................................................. 3 Provider of Last Resort (POLR) and Emergency Transition Planning –...................................................... 3 Preventing Disconnections -.......................................................................................................................................... 4 New Power Charge Indifference Adjustment (PCIA) Rulemaking –.............................................................. 4 Integrated Resource Planning (IRP) -........................................................................................................................ 5 Interconnections - .............................................................................................................................................................. 6 PG&E Rule 30 Application for Transmission Service –....................................................................................... 6 Energy Resources Recovery Account (ERRA) Compliance –............................................................................ 7 Energy Resources Recovery Account (ERRA) Forecast – .................................................................................. 7 General Rate Cases —....................................................................................................................................................... 8

REGULATORY UPDATE
Resource Adequacy (RA) - R.23-10-011
Issue
The Resource Adequacy (RA) program is the California Public Utilities Commission’s (CPUC) main grid reliability planning program. All load serving entities (LSEs) under the CPUC’s jurisdiction, including CCAs, must demonstrate purchase of a specified amount of eligible RA generation capacity each month and year to comply with RA program requirements. Increasing demand for and a decreasing supply of eligible RA capacity over the past five years have resulted in sharply increased prices and unprecedented difficulty procuring sufficient RA to achieve compliance. Over the past year, the CPUC has also sought to tie RA compliance to other, unrelated functions such as CCA expansion into new communities.

Status
On May 22, the CPUC issued a Proposed Decision (PD) in Track 3 of the RA proceeding, concurring with 3CE that adopting a minimal increase of the Planning Reserve Margin (PRM), or the buffer on top of RA procurement requirements to account for differences between actual and forecasted demand, and extending the “effective” framework is a more prudent and reasonable approach than adopting higher procurement requirements that could result in unnecessary procurement at significant costs to ratepayers. However, the PD declined to adopt CalCCA’s proposal for hourly load obligation trading, despite strong stakeholder support and demonstrated affordability benefits. On June 11, 3CE submitted comments on the PD requesting that the Commission commit to implementation of hourly load obligation if Energy Division analysis confirms the existence of transactability issues. The Final Track 3 Decision, issued June 27, directed Energy Division to issue a report on transactability issues in Quarter 1 of 2026.

Next Steps
The Track 3 Decision closed the RA proceeding but set workshops for the remainder of 2025 to consider accreditation of long-duration energy storage under the slice-of-day (SOD) framework and proposals for an unforced capacity (UCAP) methodology to account for historical forced outage rates in RA capacity values of certain resources. The CPUC will also hold a workshop on July 30 to discuss SOD implementation updates for the 2026 compliance year. 3CE staff will attend the CPUC’s RA workshops to remain informed of any changes to SOD requirements.

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 wants to ensure the process is fair for all LSEs and avoids competitive issues. This proceeding is also considering rules designed to prevent LSE failures that have various implications for 3CE finances and operations. This includes changes to how much money CCAs must post as insurance against their own failure (called the Financial Security Requirement or FSR).

Status
In 2024, CalCCA filed an Advice Letter (AL) to clarify certain financial reporting requirements established by the Phase 1 POLR Decision, which adopted a two-tiered reporting structure whereby all CCAs must comply with a Tier 1 requirement to provide the CPUC with audited financial information once per year, and more stringent Tier 2 reporting requirements that CCAs must comply with if certain reporting triggers are met. 3CE is not subject to any of the additional Tier 2 requirements and submitted its most recent audited financial information to the CPUC on July 1. On July 24, the CPUC approved Resolution E-5406 and adopted many of the important clarifications within CalCCA’s AL related to Tier 2 trigger conditions and notification timelines.

Next Steps
The POLR proceeding is now in Phase 2, in which the Commission is considering procedural pathways for non-IOU LSEs to apply for POLR status. A Phase 2 Decision is expected by the end of 2025, or Q1 of 2026 at the latest. 3CE will continue to monitor the proceeding and advocate for the legislatively protected autonomy of non-IOU LSEs.

Preventing Disconnections - R.18-07-005
Issue
In October of 2024, the CPUC issued a Phase 2 Scoping Memo that added two new topics to address, the implementation of SB 1142, which requires the IOUs to restore service to a disconnected customer who agrees to certain payment plans, and disconnections protections under extreme weather conditions, to further consider how to prevent disconnections in this proceeding. The Commission also ordered the IOUs to include additional data points regarding disconnections in their monthly reports pursuant to D.18-12-013. In addition, the Commission made permanent interim disconnections protections from previous proceedings.

Status
In June, the IOUs began submitting monthly disconnection data reports which provided data regarding service terminations and reconnections, billing assistance and payment arrangements, and arrears. The reports show that total arrearages have decreased marginally for PG&E and SDG&E, but SCE has seen a sizable decrease since the beginning of the year.

Next Steps
3CE will continue to participate in the proceeding with CalCCA to shape the CPUC’s disconnection policies throughout 2025. 3CE has been working with CalCCA to ensure that CCAs receive ample data regarding unbundled customer’s disconnections and advocate for our customers as the Commission looks to balance disconnections with managing arrears.

New Power Charge Indifference Adjustment (PCIA) Rulemaking – R.25-02-005 Issue
On February 20, the CPUC opened a new proceeding to update policies and procedures related to the IOUs’ Energy Resource Recovery Accounts (ERRA) and the Power Charge Indifference Adjustment (PCIA).

The PCIA is a fee that all customers pay to ensure that bundled customers who remain served by the IOUs are indifferent to the allocation of costs associated with legacy procurement done on behalf of all customers prior to unbundled customers departing IOU generation service. The rulemaking will address near- and long-term changes impacting the PCIA, which the CPUC calculates using market price benchmarks (MPBs) to establish the market value of the IOUs’ PCIA-eligible portfolio. In recent ERRA

proceedings, the IOUs have proposed new policies related to the calculation of MPBs, citing concerns with the accuracy and volatility of the current methodology.

Status
On June 25, the CPUC adopted a Decision for Track 1 of this proceeding. The Decision excludes affiliate transactions (between partner or subsidiary companies) and swap transactions (trades at similar prices for similar products with slightly different attributes) from the calculation of MPBs, finding that their inclusion could distort benchmark values used to set the PCIA. The Decision also consolidates the three existing MPBs for RA products into a single benchmark. These changes will apply to the 2025 Final MPB, even though they were not used in the forecast. Additionally, the Commission struck all references supporting a mark-to-market approach for setting MPBs, signaling that this valuation method may be reconsidered in Track 2.

Next Steps
While awaiting a Scoping memo for Track 2, 3CE has begun discussions with other CCAs through CalCCA regarding proposals for broader PCIA reform. The goal is to create a one-page straw proposal for multiple ideas that could improve PCIA calculation and equitable treatment for customers.

Integrated Resource Planning (IRP) - R.20-05-003
Issue
Integrated Resource Planning (IRP) is the CPUC’s grid reliability and 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 and Clean Power Procurement Program (RCPPP) that would replace the CPUC’s current ad hoc mandate structure.

Status
On April 29, the CPUC issued design proposals for the RCPPP, the new long term procurement framework intended to give LSEs a clear and predictable set of long-term reliability and greenhouse-gas (GHG) reduction procurement requirements to replace the current order-by-order approach. The staff paper provides two options for reliability procurement and one proposal for GHG reduction procurement. On June 23 and 24, the CPUC held RCPPP workshops for parties to present feedback and alternative proposals in response to the staff proposals. 3CE attended these workshops and worked with CalCCA to develop recommendations for the RCPPP framework, advocating for the CPUC to prioritize feasibility, efficiency, and affordability in the procurement program. A major component of this recommendation is for the CPUC to use SOD counting rules in RCPPP to avoid misalignment with the RA program, which could result in LSEs having to over-procure. CalCCA will also file comments in response to a motion filed by American Clean Power – California, requesting the CPUC to direct IOUs to undertake immediate procurement of resources eligible for Investment and Production Tax Credits. CalCCA’s response will emphasize that the CPUC cannot order procurement without identifying a reliability need,

that the motion pre-supposes LSEs are not already procuring these resources, and that emergency procurement orders risk increasing ratepayer costs.

New IRP Venue
On July 2, the CPUC opened a proceeding, R.25-06-019, as a new primary venue for oversight of the IRP process, including the next individual LSE IRP filings. The preliminary scoping memo for the proceeding indicates the deadline for the next IRP filings is extended to no earlier than December 1, 2025, and potentially later. The Commission will also take up RCPPP development and implementation in the new proceeding after issuing a decision on a directional framework in the R.20-05-003 proceeding. 3CE is a respondent in the new proceeding and is collaborating with CalCCA on opening comments due August 1 to advocate for improvements to load forecasting and transmission planning to reduce renewable curtailments and reliance on gas resources in the most cost-effective manner.

Next Steps
3CE will continue to monitor the two IRP proceedings, engage in the development of the RCPPP framework, and prepare for upcoming IRP compliance requirements. A CPUC Ruling containing the filing requirements for individual LSE IRPs is anticipated in August.

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

Status
On July 8, the CAISO issued a scoping document for the fifth iteration of the interconnection process enhancements (IPE) initiative. The primary objective of this latest iteration is to address commitments that CAISO made during its 2023 IPE initiative, including considering how to allow operational energy-only (EO) projects to seek deliverability. 3CE worked with CalCCA to draft comments in support of the initial scope, advocating that if a project enters the queue and comes online as EO, it should be allowed to submit a new interconnection request for deliverability.

Next Steps
The CAISO will post a straw proposal on items in scope for IPE 5.0 on August 1, followed by a workshop on August 11. 3CE will continue tracking the initiative and encourage reform to accelerate and streamline the interconnection process.

PG&E Rule 30 Application for Transmission Service – A.24-11-007 Issue
On November 21, 2024, PG&E submitted an Application to the CPUC 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 materializes, at which point the costs would be collected through rates. Due to the industry-wide implications, CalCCA has taken up this case that 3CE had initially spearheaded.

Status
CalCCA submitted comments on a Proposed Decision (PD) partly granting PG&E’s Motion for Interim Implementation on July 10, 2025, requesting modifications to the PD that require PG&E to provide the customer information when the transmission application is submitted to PG&E, rather than after the customer signs the Rule 30 agreement. CalCCA attended Ex Partes with all five CPUC Commissioners during the week of July 7, 2025. At the Ex Partes, CalCCA explained the CCA’s need for customer information regarding large load transmission interconnection applications. After discussions with PG&E, in which PG&E stated it would support CalCCA’s requests if CalCCA supports its motion for interim implementation, CalCCA filed Reply comments on July 15, 2025, to adopt PG&E’s requests. CalCCA and PG&E also attended a July 18, 2025 meeting with Energy Division to support the requests for information sharing and interim implementation. The Proposed Decision was adopted during the Commission’s July 24, 2025 voting meeting.

Next Steps
The recent decision implements Rule 30 on an interim basis. 3CE and CalCCA will continue to monitor this proceeding to ensure data transparency and equitable customer treatment are upheld throughout the development of the full Rule 30 framework.

Energy Resources Recovery Account (ERRA) Compliance – A.25-04-001 Issue
Each year, investor-owned utilities (IOUs) submit Energy Resource Recovery Account (ERRA) Compliance applications to the California Public Utilities Commission (CPUC). These filings provide a review of the utilities’ costs related to utility-owned generation (UOG) operations, fuel procurement, Portfolio Allocation Balancing Account (PABA) entries, economic dispatch of electric resources, and contract management activities. In these applications, IOUs must demonstrate that they have complied with relevant CPUC decisions and provisions of the California Public Utilities Code. 3CE participates alongside our industry association, California Community Choice Association (CalCCA) to review key issues, including whether contracts – such as those with qualifying facilities – were managed prudently, whether entries in balancing and memorandum accounts were properly recorded and consistent with regulatory requirements, and whether the recovery of costs from the record year is justified and reasonable.

SCE 2024 ERRA Compliance - A.25-04-001:

The CPUC issued a Scoping Memo in SCE’s 2024 ERRA Compliance case, setting the scope and schedule. Intervenor testimony is set for December 5, 2025.

Next Steps:

CalCCA will issue discovery to ensure SCE’s activities complied with CPUC rules, particularly around RA accounting, utility owned storage, CAISO penalties, and customer PCIA vintaging errors.

Energy Resources Recovery Account (ERRA) Forecast – A.24-05-009; A.24-05-007 Issue
ERRA forecast applications are filed annually by IOUs to look ahead at energy procurement-related revenue requirements, including the allocation of costs across Power Charge Indifference Adjustment

(PCIA) vintages. CCAs participate through CalCCA to ensure: (1) accuracy of forecast account balances, rates, and cost calculations; (2) proper attribution of PCIA vintage; (3) proposer attribution between bundled and unbundled customers; (4) appropriateness of IOU proposals within the context of an ERRA forecast proceeding.

Status
Consolidated Track Two 2024 ERRA Forecast - A.23-05-012, A.23-07-012:

CalCCA filed Opening Comments to the Proposed Decision on July 9, 2025, requesting clarification that the best venue for discussing common cost allocation in the PCIA is the PCIA OIR. PG&E also filed Opening Comments requesting that the CPUC remove any mention of discussing common cost allocation (how systemwide costs are shared across all customers, including CCA customers) in another proceeding.

CalCCA replied to PG&E’s Opening Comments, arguing against its proposal to strike the mention of discussing the common cost allocation in another proceeding.

PG&E 2026 ERRA Forecast - A.25-05-011
CalCCA attended the July 8, 2025 Pre-Hearing Conference (PHC) for PG&E’s ERRA Forecast proceeding. At the outset, the ALJ expressed agreement with CalCCA’s proposal in its protest to keep both PG&E’s RA Slice of Day (SOD) proposal and PG&E’s pre-2019 banked Renewable Energy Credit proposal out of scope of the ERRA Forecast. CalCCA also rebutted PG&E’s arguments for the inclusion in scope of both issues.

CalCCA attended an ex parte with Commissioner Reynolds’ office on July 15, 2025, to continue advocating for excluding PG&E’s SOD proposal from the scope of the ERRA Forecast proceeding. From the ex parte, CalCCA got the impression that the CPUC is looking for a compromise position to allow for an interim implementation of modifications to RA counting to align SOD and the PCIA RA MPB. While CPUC staff agreed SOD should be addressed in the PCIA Rulemaking, they also recognized that a resolution on that issue will not happen before a final decision in PG&E’s ERRA Forecast case. CalCCA expects this issue to be scoped into the proceeding.

SCE 2026 ERRA Forecast - A.25-05-008
CalCCA attended the July 10, 2025, PHC for SCE’s ERRA Forecast. With parties in agreement on scope, minor modifications were made by the ALJ to the stipulated schedule agreed on by parties in the Meet and Confer Status Report. The CPUC issued a Scoping Ruling; CalCCA did not have any disputes on scope or schedule.

Next Steps
Parties await a Commissioner Decision in the Consolidated Track Two 2024 ERRA Forecast and a scoping memo for the 2026 ERRA Forecast. CalCCA is drafting Intervenor Testimony, due August 15, 2025, for the SCE 2026 ERRA Forecast.

General Rate Cases — A.24-09-014; A.24-03-019
Issue
In four-year cycles, the IOUs submit General Rate Case (GRC) applications for authority to adjust rates and charges for electric and gas service. The CPUC conducts GRCs in two phases, using Phase I to set the total amount each IOU is authorized to collect and Phase 2 to determine the cost allocation and rate schedules for each customer class. All CCAs participate jointly in GRCs through CalCCA to advocate for just and reasonable IOU rate design and transparent customer bill presentment.

PG&E GRC Phase 1 – A.25-05-009
CalCCA attended the PHC for PG&E’s 2027 GRC on July 3, 2025. PG&E did not contest CalCCA’s proposed issues for the scope, which included consideration of proper vintaging for new investments in PG&E-owned hydro facilities and the certainty required for PG&E to include Pending Loads in its distribution cost recovery request.

SCE GRC Phase 1 – A.23-05-010
The Administrative Law Judge in SCE’s Phase 1 GRC noticed in-person Oral Arguments via ruling, setting the date for August 11, 2025. Since Oral Arguments are typically scheduled after a proposed decision and the CPUC has yet to issue a proposed decision, CalCCA expects one will be issued soon.

Next Steps
Parties are awaiting a Scoping Memo for PG&E’s GRC Phase 1 and a Proposed Decision in SCE’s GRC Phase 1.

Staff Report Item 10
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
SUBJECT: CEO Report
DATE: August 13, 2025
CalCCA SEEKS REHEARING ON POWER CHARGE INDIFFERENCE ADJUSTMENT On June 26, the California Public Utility Commission (CPUC) adopted a decision implementing immediate changes to the Power Charge Indifference Adjustment (PCIA). While, the decision reflects several proposals supported by 3CE and California Community Choice Association (CalCCA), its major impact was to manipulate the market price benchmark for 2025 after that forecast was set. This retroactive ratemaking approach dramatically reduces the market valuation for all the high-cost resource adequacy and other energy products CCAs were forced to purchase.

On July 29, CalCCA filed an Application for Rehearing (AfR) on behalf of CCAs, arguing that applying the new MPB methodology to the final 2025 PCIA revenue requirements constitutes unlawful retroactive ratemaking, in violation of Public Utilities Code Section 728. The AfR requests that the revised MPB be applied prospectively, beginning with the 2026 ERRA Forecast. Reply comments are due by Tuesday, August 12. The Commission has 120 days to respond; if no action is taken, the AfR is deemed denied.

A troubling foreshadowing of where the Commission may go in the broader PCIA reform proceeding, the decision removed all Proposed Decision’s strong language endorsing a Mark-to-Market approach for setting the MPB.

FEDERAL POLICY SHIFTS IMPACTING RENEWABLE ENERGY INDUSTRY The passage of the “One Big Beautiful Bill” (H.R. 1) marks a major shift in federal energy policy, rolling back legislation that supports 3CE’s mission. The bill has direct implications for our operations and will likely increase energy costs for customers. Below is a summary of H.R 1’s critical impacts and deadlines.

Under H.R. 1, federal clean energy tax credits are being phased out.  For solar and wind projects to receive Investment/Production Tax Credits (ITC/PTC), projects must be online by December 31, 2027, (unless construction begins before July 4, 2026).  Hydroelectric, nuclear, and geothermal projects must begin construction by December 31, 2033, to receive the full tax credit, with reduced values of 75 percent in 2034 and 50 percent in 2035.  No credit is available for projects that start construction in 2036 or later.  All projects starting construction after December 31, 2025, must have been contracted before June 16, 2025, to avoid foreign entity restrictions on tax credit eligibility.  The foreign entity restrictions are defined broadly, making its full effect difficult to predict.

H.R. 1 significantly cuts federal tax incentives for both residential and commercial customers.  Electric vehicle incentives are being cut several years early; the Clean Vehicle Credit ($7,500), Previously Owned Clean Vehicle Credit ($4,000), and Commercial Clean Vehicle Credit ($7,500/$40,000) will end for vehicles acquired after September 30, 2025.  Tax credits for building electrification (electric heat pump water heaters, household & commercial batteries) are now set to expire after December 31, 2025, including the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit.

EXECUTIVE ORDERS ON RENEWABLE ENERGY
On July 7, 2025, President Trump signed Executive Order 14315: “Ending Market Distorting Subsidies for Unreliable, Foreign-Controlled Energy Sources.” The order reinforces H.R. 1’s timeline, tax credit phase-out for wind and solar projects, and foreign-entity restrictions. The President’s earlier-issued Wind Moratorium Memorandum restricts approval, permitting, and leasing for new or existing federal onshore/offshore wind projects. Executive Orders pertaining to energy issued in January, April, and May combine to elevate review procedures across agencies -- including the interior, environmental protection, and agriculture departments – for projects on federal land.

DOI SECRETARY’S LETTER ON WIND & SOLAR PROJECTS
On July 17, 2025, the U.S. Department of the Interior (DOI) announced its plan to end incentives for “unreliable, subsidy-dependent” wind and solar projects, demanding all wind/solar leasing, rights-of-way, permits, construction plans, and related decisions be subject to elevated scrutiny by the DOI Office of the Secretary. DOI Secretary Doug Burgum additionally issued an order on August 1, mandating that the DOI now assess capacity density of proposed projects relative to alternatives—arguing that wind/solar consume disproportionate federal land per megawatt versus other sources like gas. These directives are part of a broader shift aligned with President Trump’s “Energy Dominance” framework, which prioritizes dispatchable, high-density, fossil-based energy sources.

COMMUNITY ADVISORY COUNCIL REPORT
At its regularly scheduled meeting on June 4, 2025, 3CE’s Community Advisory Council received comprehensive updates on 3CE's operations and energy programs with positive feedback from members.

Chief Communications Officer Catherine Stedman provided updates on federal incentive opportunities, enrollment completion in Atascadero and San Luis Obispo County, and the upcoming Annual Meeting in San Luis Obispo. The Council received presentations on findings from the April 2025 Electrify Your Home community workshops and proposed program design improvements for version 2.0, progress updates on the FY 2024-25 Underserved Communities Outreach and Engagement Plan implementation (including successful Spanish-language audience engagement and bill assistance initiatives), and the Final FY 2023- 24 Energy Programs Portfolio Evaluation Report showing $11 million in incentives distributed with significant greenhouse gas emission reductions of 3,758 metric tons CO2e. The Council's positive reception of all agenda items, particularly the community-informed program enhancements and equity-focused outreach efforts, demonstrates strong Advisory Council support for 3CE's continued expansion of clean energy programs and inclusive customer engagement strategies across the Central Coast region ATTACHMENT(S):

1. 3CE Contracts under $200k

2. Customer Outreach and Engagement Report

Central Coast Community Energy (3CE) Contracts under $200,000/fiscal year Vendor Total Engagement Amount From To Service Scope Remarks 3 Bay Media, Inc. DBA Media Systems Group $5,302 5/30/2025 7/30/2025 Audio-visual products and services for IT Department
4 BRB Law $5,460 5/1/2025 Engagement for Legal Services pertaining to on going complaing against Southern California Edison
Company - Joint representation - 3.5% shared cost
1 Peek Painting $10,000 7/17/2025 12/10/2025 Painting company for SLO Office - 1026 Palm St. 2 The Centre for Organization Effectiveness $80,960.00 5/19/2025 12/31/2026 Amendment No.2 to add $5,500 additional for Faciliatation and Change Management Support &
Extend the term to December 31, 2026
5 Monterey Language Services $88,000 6/2/2025 9/30/2025 Renewal and Amendment No. 3 to the Services Agreement, which was effective on 9/28/2021 and
changes to sections 2.1 and 3.1
6 Texture $375,000 7/7/2025 9/30/2027 Amendment 1 to extend services to FY 2026-2027 NTE $375,000. FY are $25,000 for FY 2023-24,
$50,000 for FY 2024-25, $150,000 for FY 2025-26,
and $150,000 for FY 2026-27

Customer Outreach and
Engagement Report
Statistics and Activity
Central Coast Community Energy
Communications and Outreach
Submitted July 29, 2025

2 Table of Contents
Community and Government Relations...................................................................................... 3 Key Accounts ............................................................................................................................. 3 3CE Enrollment Profile............................................................................................................... 4 Call Center Statistics.................................................................................................................. 5 Opt-Outs, Opt-Ins, Opt-Ups........................................................................................................ 6 Media Outreach ......................................................................................................................... 7

3 Community and Government Relations
In June, staff presented to the Gonzales and Del Rey Oaks City Councils and met with local officials across Santa Cruz, Monterey, San Luis Obispo, and Santa Barbara counties.

State advocacy focused on SB 540, SB 306, SB 283, AB 825, and RA transactability, with meetings held with six legislative offices. Staff also met with key offices regarding the PCIA.

Federal engagement included calls with five developers, participation in CalCCA/LEAN efforts, a regional op-ed, and an economist letter sent to four congressional holdouts.

Community engagement included meetings with Indivisible Monterey, Green Foothills, and the Los Padres Sierra Club.

Key Accounts
3CE staff met with three Key Accounts to discuss the Hourly Flex Pricing (HFP) Pilot and updates to the 3CE E-Bus Program.
3CE staff participated in the Monterey County Hospitality (MCHA) Annual Employee Appreciation Day and attended the monthly AgKnowledge course, connecting with Key Accounts in both community engagement activities.

4 3CE Enrollment Profile
3CE Enrollment as of July 2, 2025 3CE Load by Rate Class Town or Territory Eligible Accounts Eligible Load % COMM % AGR %RES ARROYO GRANDE 93.9% 93.8% 50% 0% 50%
ATASCADERO 88.3% 89.6% 47% 0% 53%
BUELLTON 96.5% 95.0% 71% 1% 28%
CAPITOLA 96.1% 94.9% 57% 0% 43%
CARMEL 97.6% 98.2% 52% 0% 48%
CARPINTERIA 94.8% 90.9% 56% 4% 40%
DEL REY OAKS 95.2% 97.1% 37% 2% 61%
GOLETA 94.0% 95.5% 75% 1% 24%
GONZALES 86.9% 97.6% 25% 58% 17%
GREENFIELD 87.3% 97.0% 22% 56% 22%
GROVER BEACH 96.2% 97.4% 43% 0% 57%
GUADALUPE 97.3% 99.3% 20% 55% 25%
HOLLISTER 88.7% 94.0% 48% 10% 42%
MARINA 93.8% 93.5% 60% 0% 40%
MONTEREY 95.9% 95.4% 75% 0% 25%
MORRO BAY 97.0% 96.3% 47% 0% 53%
PACIFIC GROVE 96.6% 97.8% 43% 0% 57%
PASO ROBLES 90.7% 91.2% 61% 1% 38%
PISMO BEACH 95.3% 96.7% 63% 0% 37%
SALINAS 89.3% 94.5% 52% 16% 32%
SAN JUAN BAUTISTA 91.8% 94.7% 33% 0% 67%
SAN LUIS OBISPO 96.3% 97.3% 68% 0% 32%
SAND CITY 96.0% 99.0% 94% 0% 6%
SANTA CRUZ 96.7% 97.2% 57% 1% 42%
SANTA MARIA 97.5% 91.5% 60% 11% 29%
SCOTTS VALLEY 96.3% 97.8% 65% 0% 35%
SEASIDE INC 94.0% 96.6% 50% 0% 50%
SOLEDAD INC 87.5% 94.5% 45% 15% 40%
SOLVANG 96.3% 96.5% 62% 0% 38%
UNINC MONTEREY 92.4% 96.9% 38% 38% 24%
SAN BENITO COUNTY 90.1% 95.8% 49% 20% 31%
SAN LUIS OBISPO COUNTY 91.7% 94.8% 38% 19% 42%
SANTA BARBARA COUNTY 93.4% 79.4% 52% 18% 30%
SANTA CRUZ COUNTY 94.8% 95.7% 27% 6% 67%
WATSONVILLE 90.6% 94.2% 58% 13% 29%
3CE Total 93.2% 92.8% 49% 16% 35%

5 Call Center Statistics
June 2025
Call Volume: 1,046
Call volume has returned to normal levels since the enrollment of Atascadero and SLO County.

Spanish Language Calls: 68
35 calls taken by Spanish-speaking agents
33 calls assisted with translation services
Note: A call can be logged for multiple topics
Top 5 Call Topics Combined (SCE & PGE)
6/01/25 – 6/30/25
Rebates 452 41%
Billing Inquiry 230 21%
General Info 212 19%
Split Billing 159 14%
Net Energy Metering 129 12%

6 Opt-Outs, Opt-Ins, Opt-Ups
Reason Given for Opt-Out PGE SCE Total
Dislike being automatically enrolled 51 4 55
Rate or Cost Concerns 50 2 52
Other 22 3 25
Service or Billing Concerns 15 3 18
Decline to Provide 11 0 11
Have Renewable Energy Reliability Concerns 5 1 6
Concerns about Government-Run Power Agency 1 2 3
Total Opt-Outs 155 15 170
Call
Center
34%
Website
40%
Interactiv
e Voice
Response
26%
Opt-Outs by Method

7 Media Outreach
June 2025
Facebook
 Followers: 2.15K
 Page Reach: 239K
 Page Impressions: 287K
 Post Reach: 1.63K
 New page followers: 19
 Top Performing Content: Today we celebrate #Juneteenth — a powerful reminder of freedom, resilience, and the ongoing journey toward justice.

At 3CE, we honor this day by reaffirming our commitment to community empowerment through clean energy access, local investment, and representation.
#Juneteenth2025 #PowerForAll #EquityMatters
#CommunityEmpowerment
Facebook En Espanol
 Followers: 247
 Page Reach: 376
 Page Impressions: 742

Instagram
 Followers: 1.24K
 New Followers: -1
 Reach: 1.51K
 Top Performing Content: This June, we’re celebrating love, nature, and the power to create change. Whether you’re hiking a favorite trail or waving a rainbow flag—know that 3CE stands with you. 🌈🌿

Twitter (X)
 Followers: 1.09K
 New Followers: -2

8  Top Performing Content: Meet Rose & Will With long commutes, switching to an EV made sense-- with rebates from 3CE. “It feels amazing to know our small decision is contributing to a cleaner, more sustainable future.” #DriveElectric #3CE #EVRebates #CleanTransportation #PowerForGood #Sustainability LinkedIn
 Followers: 3.11K
 New Followers: 65
 Post Clicks: 239
 Top Performing Content: We’re excited to welcome Byron Vosburg to the 3CE team as our new Chief Operating Officer!
With deep experience in the CCA world and a strong track record in energy, Byron brings the kind of leadership that drives innovation and impact. We’re lucky to have him on board!
hashtag#WelcomeToTheTeam hashtag#3CEnergy
hashtag#CleanEnergyLeader

Earned Media
 Affordable Housing Finance: 6/3/2025:
https://www.housingfinance.com/developments/california-development-delivers-affordable-housing-to-families-farmworkers_o  Monterey County Weekly: 6/4/2025:
https://www.montereycountynow.com/news/the_buzz/the-buzz-06-05- 25/article_4d0bac30-b372-4142-8027-49e25810645b.html
 Lookout Santa Cruz: 6/16/2025: https://lookout.co/county-to-host-public-meetings-on-battery-energy-storage-facilities/story  CalCoastNews: 6/21/2025: https://calcoastnews.com/2025/06/destroying-californias-economy-one-energy-sector-at-a-itme/  Santa Cruz Sentinel: 6/26/2025:
https://www.santacruzsentinel.com/2025/06/26/experts-tout-benefits-of-battery-storage-amid-continued-community-pushback-in-santa-cruz-county/

Staff Report Item 11
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Alicia Hicks, Director of Human Resources and Administrative Services SUBJECT: Presentation on 3CE Vacancies, Recruitment and Retention Efforts Pursuant to Government Code Section 3502.3
DATE: August 13, 2025
RECOMMENDATION:

It is recommended that the Operations Board receive a presentation on 3CE vacancies, recruitment, and retention efforts pursuant to Government Code Section 3502.3.

BACKGROUND:

In September of 2024, Governor Newsom signed AB 2561 into law, amending the Meyers-Milias Brown Act, which added Government Code Section 3502.3. This new law requires public agencies to present to the Board on the status of vacancies, as well as recruitment and retention efforts, per fiscal year (FY).

The report shall be provided at a public hearing and prior to the adoption of the agency’s budget. The presentation shall also identify any necessary changes to policies, procedures, and recruitment activities that may lead to hiring obstacles, if any.

DISCUSSION
Vacancies
Position vacancies may occur for various reasons throughout any given year, including internal promotion or transfer of a staff member, retirements, resignations, terminations, or due to the approval of a new position. There are currently fifty-six (56) budgeted positions and one (1) vacancy at 3CE.

Recruitment and Retention of Staff
3CE employs a variety of recruitment strategies to attract talent, such as posting job vacancies on the agency’s website and the HRIS Neogov recruitment portal, utilizing industry-specific job boards,

advertising open positions on social media platforms and engaging recruiters to supplement in-house efforts.
3CE is independently certified as a Great Place to Work, recognizing 3CE’s exceptional culture, extraordinary staff, and high commitment to our mission and community. Our commitment to ensuring we retain exceptional staff focuses on maintaining competitive compensation and employee benefits, investing in training and development, and providing guidance on promotional opportunities within the organization. Staff engagement and recognition initiatives, including Employee of the Quarter, health and wellness committee activities, and the Safety Coordinator committee, play a crucial role in fostering a positive workplace environment. As a result, 3CE achieved a retention rate of approximately 93% in FY24/25.

There are no necessary changes in policies, procedures or recruitment activities that may lead to obstacles in the hiring process.

FISCAL IMPACT:

No fiscal impact associated with this report.

CONCLUSION:

Staff will continue to provide informational updates consistent with Government Code 3502.3 requirements on an annual basis.

ATTACHMENT(S):

None.

Staff Report Item 12
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Leo Kim, Director of Power Supply
SUBJECT: (1) Authorize the CEO to execute a Hybrid - Battery Energy Storage System Power Purchase Agreement with MRP Pacifica Marketing III, LLC for 57 MW of dispatchable energy and 50.6 MW of resource adequacy from the VacaDixon Hybrid Project, in a form substantially similar to the attached, as well as any necessary ancillary documents, with a power delivery term of 16.7 years effective upon execution, in an amount not to exceed $222,000,000; (2) Authorize the CEO to execute up to two (2) amendments, that do not change the total not to exceed contract amount, subject to approval by the General Counsel
DATE: August 13, 2025
RECOMMENDATION:

This recommends the Operations Board : (1) Authorize the CEO to execute a Hybrid - Battery Energy Storage System Power Purchase Agreement with MRP Pacifica Marketing III, LLC for 57 MW of dispatchable energy and 50.6 MW of resource adequacy from the VacaDixon Hybrid Project, in a form substantially similar to the attached, as well as any necessary ancillary documents, with a power delivery term of 16.7 years effective upon execution, in an amount not to exceed $222,000,000; (2) Authorize the CEO to execute up to two (2) amendments, that do not change the total not to exceed contract amount, subject to approval by the General Counsel.

BACKGROUND:

In 2023, 3CE staff sought and received Policy Board direction and support for an innovative approach to both: 1) reduce existing natural gas facility emissions; and 2) secure valuable Resource Adequacy (RA) product for 3CE by hybridization of an existing natural gas power generation facility.

In January 2024, the Operations Board approved two agreements for hybridization of Panoche Hybrid and Midway Hybrid. In February 2024, the Operations Board approved the Tracy Hybrid project. Each is

a Hybrid Natural Gas Peaker unit plus Battery Energy Storage System agreement whereby 3CE’s long-term offtake commitments support installation of a new BESS at an existing natural gas facility, thereby reducing emissions from the existing facilities while also securing RA attributes to increase cost certainty and reduce non-compliance risks.
2025 Clean Energy and Reliability Request for Offers
3CE launched a request for offers (“RFO”) in May 2025 targeting procurement of renewable energy and storage resources to help reduce greenhouse gas emissions, meet reliability requirements, and meet other program and portfolio needs.

RFO administration, shortlisting, and negotiation were consistent with 3CE’s Project Selection Methodology, adopted in June 2023. In addition to evaluation of each developer’s ability to perform as proposed, Staff evaluated each of the following quantitative and qualitative criteria:
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
6) benefits accruing to underserved communities.

DISCUSSION/ANALYSIS:

The VacaDixon Hybrid project was submitted by Middle River Power (“MRP”), which also developed 3CE’s Panoche, Midway, and Tracy Hybrid projects. In all, MRP owns and manages approximately 2,000 MW of generating capacity in California and 4,000 MW outside of California.

The proposed VacaDixon Hybrid Project is consistent with previous board direction to stabilize 3CE’s Resource Adequacy needs on a longer-term basis while reducing existing emissions via construction of batteries at existing natural gas generating units.

Evaluation of the VacaDixon Hybrid project against 3CE’s Project Selection Methodology is reflected below. Each category is ranked on a scale of Low, Medium, or High.

Contribution to 3CE’s Mission and Goals
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. It will meet approximately 5% of 3CE’s RA obligation.

Low Med High

It will provide a cost-effective energy hedge to 3CE and the CAISO. During constrained market condition events and when the gas turbine is dispatched, the financial structure results in sale of the energy directly from the Seller to the CAISO. Thus, it will have no reportable emissions on 3CE’s Power Content Label.
3CE will work to maximize the charging and discharging of the new 1-hour BESS to provide the greatest value for 3CE customers and to reduce the utilization rate of the gas turbine, thus reducing emissions that would have otherwise occurred absent from the BESS. 3CE’s ranking is High.

Workforce Development
The developer, MRP, represents that BESS construction work will be pursuant to a project labor agreement (“PLA”), to which 3CE shall not be a party, and expects approximately 30 construction jobs.

After the commercial online date, the developer represents that the project will hire two additional operators to manage and maintain the BESS resources.
3CE’s ranking is High.

Innovation
3CE’s Project Selection Methodology supports projects that accelerate decarbonization while remaining cost competitive. This project is a creative repurposing of an existing site, utilizing valuable and scarce transmission capacity to transition from a conventional power facility towards an energy storage system.

Modeling provided by the MRP indicates the new energy storage system will compete with the existing natural gas combined simple cycle gas turbine to use the interconnection capacity, and is predicted to reduce emissions on average 37%. 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.

High
High

CO2 Projected Emissions (in tons)
for the VacaDixon facility
Year
GHG
Emissions
without
Battery
GHG
Emissions
with Battery
GHG Emission
Reductions due
to Battery
2027 74,240 48,183 26,057
2028 75,849 47,632 28,216
2029 73,430 50,213 23,216
2030 67,565 44,289 23,276
2031 58,260 42,882 15,378
2032 54,017 36,326 17,691
2033 45,862 28,830 17,033
2034 42,029 27,647 14,382
2035 36,046 23,340 12,706
2036 34,616 20,856 13,759
2037 33,847 19,544 14,304
2038 31,661 19,339 12,323
2039 28,671 15,883 12,789
2040 22,623 13,013 9,610
3CE’s ranking is High
Location
While not located within the 3CE jurisdictional footprint, the facility is in Solano County and grid-tied to the CAISO balancing authority.
3CE’s ranking is Medium.

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

Land, biological and cultural surveys are underway and will be included in technical reports to the California Energy Commission as part of the permitting process; no significant impacts are anticipated to be identified. As both the existing gas turbine and new BESS facility are on developed industrial parcels, no significant impacts are anticipated.

High
Med

The project is anticipated to reduce the gas turbine output and thereby lower emissions in the local area, which is roughly five miles from the nearest Disadvantaged Community (DAC) tract. 3CE’s ranking is High.

Benefits Accrued to Underserved Communities
MRP’s submission notes that it plans 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 gas turbine, it will thereby lower emissions in the local area.

MRP expects approximately 75% of their workers to be hired from the local area for the construction of battery energy storage system.
3CE’s ranking is Medium.

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 16.7 years
January 1, 2027, through August 31, 2043
Project Name VacaDixon Hybrid
Contract Capacity 50.6 MW Natural Gas Simple Cycle Gas Turbine (GT) Peaker 57 MW 1-hour discharge duration Lithium-Ion Battery Energy Storage System (BESS)
Percentage of RA Obligation met 5%
Location Solano County, California
Not to Exceed $ Amount $222,000,000
High
Med

FISCAL IMPACT:

The fiscal impact of the VacaDixon Hybrid Peaker plus BESS project will not exceed $222 million over the

16.7-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 MRP Pacifica Marketing III, LLC project provides 3CE, a high-value RA product, will reduce 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 turbine Peaker facility.

ATTACHMENT(S)

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

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

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

1.2 Rules of Interpretation ......................................................................................... 14 ARTICLE 2 TERM; COMMERCIAL OPERATION; OPTIMIZATION SERVICES ............. 16

2.1 Contract Term. ..................................................................................................... 16

2.2 Conditions Precedent ........................................................................................... 16

2.3 Scheduling Services ............................................................................................. 17

2.4 Forecasting Services ............................................................................................ 18

2.5 Financial Responsibility for Scheduling and Forecasting Services ..................... 19 ARTICLE 3 PURCHASE AND SALE ...................................................................................... 19

3.1 Purchase and Sale of Product ............................................................................... 19

3.2 Ownership of Standalone Energy Storage Incentives .......................................... 20

3.3 Capacity Attributes .............................................................................................. 20

3.4 Variable O&M ..................................................................................................... 20

3.5 Reservation Payment ........................................................................................... 20

3.6 Test Energy .......................................................................................................... 20

3.7 Emissions ............................................................................................................. 20 ARTICLE 4 OBLIGATIONS AND DELIVERIES ................................................................... 21

4.1 Product Delivery .................................................................................................. 21

4.2 Transfer of Resource Adequacy Benefits. ........................................................... 21

4.3 Seller’s Option To Provide Alternate Capacity ................................................... 22

4.4 Buyer’s Re-Sale of RA Product ........................................................................... 23

4.5 Hold-Back and Substitute Capacity ..................................................................... 24

4.6 Gas Supply ........................................................................................................... 24

4.7 Charging Energy Management ............................................................................ 25

4.8 Reduction in Deliveries........................................................................................ 27

4.9 RA Availability .................................................................................................... 27

4.10 Storage Availability ............................................................................................. 27

4.11 Storage Capacity Tests ......................................................................................... 28

4.12 Efficiency Guaranty ............................................................................................. 28

4.13 Heat Rate Guaranty .............................................................................................. 28

4.14 Cycle Limits ......................................................................................................... 28

4.15 Interconnection Capacity ..................................................................................... 28

4.16 Title and Risk of Loss .......................................................................................... 29 ARTICLE 5 TAXES .................................................................................................................. 29

5.1 Allocation of Taxes and Charges ......................................................................... 29

5.2 Cooperation .......................................................................................................... 29 ARTICLE 6 MAINTENANCE OF THE FACILITY ................................................................ 30

6.1 Maintenance of the Facility ................................................................................. 30

6.2 Maintenance of Health and Safety ....................................................................... 30

ii

6.3 Shared Facilities. .................................................................................................. 30 ARTICLE 7 METERING ........................................................................................................... 30

7.1 Metering ............................................................................................................... 30

7.2 Meter Verification ................................................................................................ 30

7.3 Meter Adjustments ............................................................................................... 30 ARTICLE 8 INVOICING AND PAYMENT; CREDIT ............................................................ 31

8.1 Contract Price....................................................................................................... 31

8.2 Statements and Invoicing ..................................................................................... 31

8.3 Payment................................................................................................................ 31

8.4 Books and Records .............................................................................................. 32

8.5 Invoice Adjustments ............................................................................................ 32

8.6 Billing Disputes ................................................................................................... 32

8.7 Netting of Payments ............................................................................................. 33

8.8 Payment Security ................................................................................................. 33

8.9 Use of Financial Security ..................................................................................... 34 ARTICLE 9 NOTICES .............................................................................................................. 34

9.1 Addresses for the Delivery of Notices ................................................................. 34

9.2 Acceptable Means of Delivering Notice .............................................................. 34 ARTICLE 10 FORCE MAJEURE ............................................................................................. 35

10.1 Definition ............................................................................................................. 35

10.2 Termination Following Force Majeure Event...................................................... 35

10.3 Notice for Force Majeure. .................................................................................... 36 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ..................................................... 36

11.1 Events of Default ................................................................................................. 36

11.2 Remedies; Declaration of Early Termination Date. ............................................. 37

11.3 Termination Payment ........................................................................................... 38

11.4 Notice of Payment of Termination Payment ....................................................... 38

11.5 Disputes With Respect to Termination Payment ................................................. 38

11.6 Rights And Remedies Are Cumulative ................................................................ 38 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES ........ 39

12.1 No Consequential Damages ................................................................................. 39

12.2 Waiver and Exclusion of Other Damages ............................................................ 39 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY .......................... 40

13.1 Seller’s Representations and Warranties ............................................................. 40

13.2 Buyer’s Representations and Warranties ............................................................. 40

13.3 General Covenants ............................................................................................... 41 ARTICLE 14 ASSIGNMENT.................................................................................................... 41

14.1 General Prohibition on Assignments ................................................................... 41

14.2 Collateral Assignment .......................................................................................... 41

14.3 Buyer Limited Assignment .................................................................................. 43

iii
ARTICLE 15 DISPUTE RESOLUTION ................................................................................... 44

15.1 Governing Law .................................................................................................... 44

15.2 Dispute Resolution ............................................................................................... 44

15.3 Arbitration ............................................................................................................ 44 ARTICLE 16 INDEMNIFICATION ......................................................................................... 45

16.1 Indemnity ............................................................................................................. 45

16.2 Notice of Claim .................................................................................................... 45

16.3 Failure to Provide Notice ..................................................................................... 45

16.4 Defense of Claims ................................................................................................ 46

16.5 Rights and Remedies are Cumulative .................................................................. 46 ARTICLE 17 INSURANCE ...................................................................................................... 46

17.1 Insurance .............................................................................................................. 46 ARTICLE 18 CONFIDENTIAL INFORMATION ................................................................... 47

18.1 Definition of Confidential Information ................................................................ 47

18.2 Duty to Maintain Confidentiality ......................................................................... 47

18.3 Irreparable Injury; Remedies ............................................................................... 48

18.4 Disclosure to Financing Parties, Etc. ................................................................... 48

18.5 Press Releases ...................................................................................................... 48 ARTICLE 19 MISCELLANEOUS ............................................................................................ 48

19.1 Entire Agreement; Integration; Exhibits .............................................................. 48

19.2 Amendments ........................................................................................................ 49

19.3 No Waiver ............................................................................................................ 49

19.4 No Agency, Partnership, Joint Venture or Lease ................................................. 49

19.5 Severability .......................................................................................................... 49

19.6 Mobile-Sierra ....................................................................................................... 49

19.7 Counterparts ......................................................................................................... 49

19.8 Electronic Delivery .............................................................................................. 50

19.9 Binding Effect ...................................................................................................... 50

19.10 No Recourse to Members of Buyer ..................................................................... 50

19.11 Forward Contract ................................................................................................. 50

19.12 Further Assurances............................................................................................... 50

19.13 Change in Electric Market Design ....................................................................... 50

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 Tests
Exhibit G Notices
Exhibit H Operating Procedures
Exhibit I Maintenance Intervals
Exhibit J RA 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:
“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. “Annual Cycle Limit” means the maximum number of times the BESS Resource can be Cycled each Contract Year as set forth on the Cover Sheet.

2 “Annual Run Hour Limit” means the maximum number of hours the Thermal Resource can be operated each year as set forth on the Cover Sheet. “Available” means that the BESS Resource is available either to be charged or discharged. “Availability Assessment Hours” has the meaning set forth in the CAISO Tariff. “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” meansthe 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 AM and ends at 5:00 PM Pacific Prevailing Time (PPT).
“Buyer” has the meaning set forth on the Cover Sheet.
“Buyer Default” means an Event of Default of Buyer.
“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), 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

3 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 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. “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, California Cap and Trade Program (Title 17 California Code of Regulations Sections 95801-96022). “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 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. “CIRA Tool” means the CAISO Customer Interface for Resource Adequacy. “Claim” has the meaning set forth in Section 16.2.
“COD Delay Damages” means an amount equal to

“Commercial Operation” means the conditions for commercial operation of the BESS Resource set forth in Exhibit B have been satisfied.
“Commercial Operation Date” means the date on which Commercial Operation is achieved and the conditions set forth in Section 2.2 have been satisfied. “Compliance Showings” means the (a) the Resource Adequacy 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.

4 “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 System RA Start Date or an anniversary thereof and ending at midnight at the end of the day prior to the applicable anniversary of such System RA Start Date. “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 which 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.
“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 which 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 Start Limit” means the maximum number of times the Thermal Resource can be started each day as set forth on the Cover Sheet.
“Damage Payment” means the dollar amount that equals
“Dealer” means an entity or person that buys or sells power and takes title to the power at some point.

5 “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 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 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 to a specified Stored Energy Level, provided that any such operating instruction or updates shall be in accordance with the Operating Procedures.
“Dispatchable Energy” means 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. “Efficiency Rate” means the round-trip efficiency of the BESS Resource determined in accordance with Exhibit C.
“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 Contract Quantity” has the meaning set forth on the Cover Sheet. “Energy Meter” means the meters used to measure Charging Energy, Discharging Energy and Dispatchable Energy, as applicable.
“Energy Reservation Payment” has the meaning set forth on the Cover Sheet. “Energy Reservation Price” has the meaning set forth on the Cover Sheet. “Energy Start Date” has the meaning set forth on the Cover Sheet. For the avoidance of doubt, the Energy Start Date shall commence on the date set forth on the Cover Sheet notwithstanding that the BESS Resource has not yet been constructed.

6 “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” has the meaning set forth in Exhibit E. “Expected Commercial Operation Date” has the meaning set forth on the Cover Sheet. “Facility” means the energy generation and storage facility described on the Cover Sheet and in Exhibit A (including the operational requirements of the energy generation and storage facility), located at the Site and related generation, storage and mechanical equipment and associated facilities and equipment required to deliver 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” has the meaning set forth in the CAISO Tariff.

7 “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 2.4(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 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. “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 Project 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 Heat Rate” means the percentage specified on the Cover Sheet.

9 “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.
“Local RA Start Date” has the meaning set forth on the Cover Sheet. “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. “Local RAR Attributes” means, with respect to the Facility, any and all Resource Adequacy Benefits of the Facility, as may be identified from time to time by the CPUC, CAISO, or other Governmental Authority having jurisdiction over Local RAR that can be counted toward Buyer’s Local RAR.
“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 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.
“Major Subcontractor” means a subcontractor performing work at the applicable Site under a contract for payment of amounts in excess of One Million Dollars ($1,000,000). “Monthly RA 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 in order for the applicable resource to qualify to deliver Resource Adequacy Benefits.

11 incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“Planned Outage” has the meaning set forth in Exhibit I. “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 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. “RA Capacity Forecast” has the meaning set forth in Section 2.4(d). “RA Contract Quantity” has the meaning set forth on the Cover Sheet. “RA Product” has the meaning set forth in Section 4.2(a). “RA Reservation Payment” has the meaning set forth on the Cover Sheet. “Real-Time Market” has the meaning set forth in the CAISO Tariff. “Replacement RA” means Resource Adequacy Benefits, if any, equivalent to those that would have been provided by the Facility with respect to the applicable Showing Month, including, as applicable, Resource Category 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 Unit” has the meaning set forth in Section 4.3. “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.

12 “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 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.
“Resource Category” shall be as described in the annual CPUC Filing Guide, as such may be modified, amended, supplemented or updated from time to time. “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 2.3(a). “Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” has 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 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.

13 “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.
“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. “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
(b) the Energy produced or discharged by the Facility that is consumed within the Facility’s electric energy distribution system as losses. “Storage Availability Adjustment Factor” has the meaning set forth in Exhibit E. “Storage Capacity” means the maximum dependable capability of the BESS Resource to discharge Energy at a particular moment.
“Storage Capacity Forecast” has the meaning set forth in Section 2.4(d). “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 Energy” means the total quantity of electric energy measured in MWh that can be stored by the BESS Resource as set forth on the Cover Sheet. “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.

14 “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. “System RA Start Date” has the meaning set forth in the Cover Sheet. “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 Resource” means the natural gas-fired turbine electricity generating power plant at the Facility as described in Exhibit A.
“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;

15 (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, 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; and
(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.
(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

16 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 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 and/or a Participating Load Agreement and a Meter Service Agreement 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;

20 Ancillary Services and Flexible Ramping Product from any combination of Dispatchable Energy and Discharge Energy, but the total quantity may not exceed the quantity of Ancillary Services and Flexible Ramping Product that can be provided from the Energy Contract Quantity in any hour.
(c) Environmental Attributes. Buyer shall own all 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. 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 Contract Quantity. Buyer shall cooperate with Seller in connection with Scheduling any such Capacity Attributes sold to third parties.

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

3.5 Reservation Payment. During each month of the Delivery Term, Buyer shall pay the monthly RA Reservation Payment and, following the Energy Start Date, the Energy Reservation Payment, to Seller pursuant to the invoicing and payment provisions set forth in Article 8.

3.6 Test Energy. To the extent any electricity is delivered to Buyer from the Facility 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 presently the cost for the Facility complying with the Carbon Emission Regulations is included in the tariffs charged by the Gas Distribution Utility. 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 the reasonable and documented costs associated therewith.
(b) Other Air Emissions. Seller represents and warrants that presently the

21 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 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 anything herein to the contrary, Seller shall have no obligation to deliver any Resource Adequacy Benefits prior to the System RA Start Date, to deliver any Local RAR Attributes prior to the Local RA Start Date, or to make the BESS Resource available prior to the Commercial Operation Date. (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, charges and penalties, if any, 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.

4.2 Transfer of Resource Adequacy Benefits.
(a) Seller shall transfer the Resource Adequacy Benefits and, if applicable, Replacement RA from 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.

22 (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 amount as instructed by Buyer for the applicable Showing Month. 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 Capacity Attributes as the Facility (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

23 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 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 meet the 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

24 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 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 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 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 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.

25 (b) Supply of Gas.
(i) Seller will cause the Scheduling Coordinator to procure a sufficient quantity of natural gas for the continuous operation of the Thermal Resource consistent with the dispatch schedule for the Thermal Resource and to deliver such natural gas to the Gas Utility Receipt Point; and
(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 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, provided, that the right to issue Charging Notices is 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 the Buyer or 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, Buyer shall be solely responsible for causing sufficient Charging Notices to be issued to (i) support any Discharging Notices and (ii) ensure the eligibility of the Resource Adequacy Benefits for

26 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 pursuant to a valid Charging Notice, or in connection with a Storage Capacity Test, or pursuant to a notice from CAISO. If, during the Contract Term, Seller (i) charges the BESS Resource to a Stored Energy Level greater than the Stored Energy Level provided for in the Charging Notice or (ii) charges the BESS Resource in violation of the first sentence of this Section 4.7(c), then (x) Seller shall be responsible for 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 discharge such Energy and entitled to the Product associated with discharging such Energy.
(d) Discharging Notices. Buyer will have the right to discharge the BESS Resource seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Discharging Notices to Seller electronically, and 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 Buyer or 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 (i) discharges the BESS Resource other than as provided for in the Discharging Notice or (ii) discharges the BESS Resource 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. (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 Buyer’s instructions and 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

27 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 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 RA Availability.
(a) During the Delivery Term, the Facility shall maintain a Monthly RA Availability during each month of no less than the Guaranteed RA Availability, which Monthly RA Availability shall be calculated in accordance with Exhibit J. (b) If the Monthly RA Availability during any month is less than the Guaranteed RA Availability, then Buyer’s payment for the Product shall be calculated by reference to the RA Availability Adjustment Factor as determined in accordance with Exhibit J. (c) The sole and exclusive remedy for any failure of the Facility to provide Resource Adequacy Benefits is the RA Availability Adjustment Factor. Buyer shall be solely responsible for procuring those Resource Adequacy Benefits that the Facility fails to provide under this Agreement.

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

28 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 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 Energy Contract Quantity set forth on the Cover Sheet) shall become the new Energy 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 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 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 RA Contract Quantity, and (b) to the BESS Resource that is no less than the Storage

29 Contract Capacity, 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.

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.

30 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, Dispatching 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 Transmission Owner, Seller’s Affiliates, and/or third parties pursuant to which certain Interconnection Facilities, interconnection service and/or transmission service may be subject to joint ownership and/or shared maintenance and operation arrangements; provided that such Shared Facilities Agreements shall permit Seller to perform or satisfy, and shall not purport to limit, its obligations hereunder, including providing interconnection capacity for the Facility in an amount not less than the Energy Contract Quantity.

ARTICLE 7

METERING

7.1 Metering. Seller shall obtain and maintain a CAISO Resource ID for the BESS Resource and the Thermal Resource. At Seller’s expense, Seller shall install and maintain all necessary Energy Meters and telemetry required by the CAISO to deliver the Product. At Seller’s expense, Seller shall install and maintain the Gas Meter as required for the Thermal Resource to receive natural gas service from the Gas Distribution Utility.

7.2 Meter Verification. If Seller has reason to believe there may be an Energy Meter or a Gas Meter malfunction, or upon Buyer’s reasonable request, Seller shall test the Energy Meter or the Gas Meter. The tests shall be conducted by independent third parties qualified to conduct such tests. Buyer shall be notified seven (7) days in advance of such tests and have a right to be present during such tests. Meter accuracy shall be determined based on CAISO or Gas Distribution Utility standards, as appliable. If a meter is inaccurate it shall be promptly repaired or replaced at Seller’s expense. If the meter test was performed by Buyer’s request and the meter(s) provided to be accurate, Buyer shall reimburse Seller for the costs and expenses associated with the test.

7.3 Meter Adjustments. If a meter provided to be inaccurate, the procedures used by

31 the CAISO or the Gas Distribution Utility, as applicable, shall be used to adjust payments due hereunder. If no such procedures are applicable, Seller shall, acting reasonably and in good faith, determine when the inaccuracy first became effective and calculate the resulting adjustments. If Seller cannot reasonably determine when the inaccuracy first occurred, it will be assumed to have occurred halfway between the previous test and the current test (not to exceed 6 months).

ARTICLE 8
INVOICING AND PAYMENT; CREDIT

8.1 Contract Price. The contract price (the “Contract Price”) shall be calculated monthly, in arrears, as follows:
(a) The RA Reservation Payment, plus
(b) The Energy Reservation Payment, plus
(c) The product of (i) the Variable O&M and (ii) the Dispatchable Energy delivered in the applicable month; plus
(d) The costs incurred by Seller from the Gas Distribution Utility for receipt of any natural gas associated with Dispatchable Energy 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.

8.2 Statements and Invoicing. Seller shall deliver an invoice to Buyer within ten (10) days after the end of the prior monthly delivery period. Each invoice shall (a) include records of metered data, including the amount of Charging Energy, Discharging Energy and Dispatchable Energy delivered to Buyer (if any), the RA Reservation Payment, the Energy Reservation Payment and the total Contract Price; (b) reflect any records, including invoices or settlement data from the CAISO, necessary to verify the accuracy of any amount; (c) reflect any CAISO costs and revenues passed through to Buyer, (d) include any natural gas costs or revenues passed through to Buyer pursuant to Section 4.6 and (e) be in a format and contain detail reasonably acceptable to Buyer, covering the services provided in the preceding month determined in accordance with the applicable provisions of this Agreement. The invoice shall be delivered by electronic mail in accordance with Exhibit G.

8.3 Payment. Buyer shall make payment to Seller for Product by wire transfer or ACH payment to the bank account designated by Seller in Exhibit G, which may be updated by Seller by Notice hereunder; provided, however, that changes to invoice, payment, wire transfer and other banking information in the Agreement must be made in writing and delivered via certified mail and shall include contact information for an authorized person who is available by telephone to verify the authenticity of such requested changes to the Agreement. Buyer shall pay undisputed invoice amounts within thirty (30) days after receipt of the invoice. If such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall

32 be calculated based on the 3-Month prime rate (or any equivalent successor rate accepted by a majority of major financial institutions) published on the date of the invoice in The Wall Street Journal (or, if The Wall Street Journal is not published on that day, the next succeeding date of publication), plus two percent (2%) (the “Interest Rate”). If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day.

8.4 Books and Records. To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least five (5) years or as otherwise required by Law. Upon five (5) Business Days’ Notice to the other Party, either Party shall be granted access to the accounting books and records within the possession or control of the other Party pertaining to all invoices generated pursuant to this Agreement.

8.5 Invoice Adjustments. Invoice adjustments shall be made if (a) there have been good faith inaccuracies in invoicing or payment that are not otherwise disputed under Section 8.6, (b) an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO, or pursuant to a Storage Capacity Test, or (c) there have been meter inaccuracies; provided, however, that there shall be no adjustments to prior invoices based upon meter inaccuracies except to the extent that such meter adjustments are accepted by CAISO for revenue purposes. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.3, accruing from the date on which the adjusted amount should have been due. Unless otherwise agreed by the Parties, no adjustment of invoices shall be permitted after twelve (12) months from the date of the invoice.

8.6 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned via adjustments in accordance with Section 8.5. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.6 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.

33 8.7 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including, without limitation, liquidated damage payments under Exhibit B, CAISO Costs and Revenues calculated pursuant to Exhibit N, interest, payments, and credits shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.

8.8 Payment Security.
(a) Seller’s Development Security. To secure its obligations under this Agreement, Seller shall deliver the Development Security to Buyer within thirty (30) days after the Effective Date. Seller shall maintain the Development Security in full force and effect. Upon the earlier of (i) Seller’s delivery of the Performance Security, or (ii) sixty (60) days after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement. If the Development Security is a Letter of Credit and the issuer of such Letter of Credit (x) fails to maintain the minimum Credit Rating specified in the definition of Letter of Credit, (y) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the Commercial Operation Date, or (z) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Development Security. (b) Seller’s Performance Security. To secure its obligations under this Agreement, Seller shall deliver Performance Security to Buyer on or before the Commercial Operation Date. Seller shall maintain the Performance Security in full force and effect, and Seller shall within ten (10) Business Days after any draw thereon replenish the Performance Security in the event Buyer collects or draws down any portion of the Performance Security for any reason permitted under this Agreement, until the following have occurred: (A) the Delivery Term has expired or terminated early; and (B) all payment obligations of the Seller then due and payable under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Performance Security. If the Performance Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the minimum Credit Rating set forth in the definition of Letter of Credit, (ii) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the Commercial Operation Date, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Performance Security. (c) First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest in, and lien on (and right to net against), and assignment of the Development Security and Performance Security to the extent provided in the form of cash, and any other cash collateral and cash equivalent collateral posted pursuant to Section 8.8 and any and all interest thereon or proceeds resulting therefrom or from

34 the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s security interest granted under this Section 8.8(c) in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.

8.9 Use of Financial Security. Upon or any time after the occurrence of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Financial Security provided by Seller, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.9):
(a) Exercise any of its rights and remedies with respect to the Financial Security, including any such rights and remedies under Law then in effect; (b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Financial Security; and
(c) Liquidate the applicable Financial Security then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.

Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce the Seller’s obligations under this Agreement and Seller shall remain liable for any amounts owing to Buyer after such application, subject to Buyer’s obligation to return any surplus proceeds remaining after these obligations are satisfied in full.

ARTICLE 9

NOTICES

9.1 Addresses for the Delivery of Notices. Any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the address set forth on Exhibit G or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.

9.2 Acceptable Means of Delivering Notice. Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered if sent by electronic mail at the time indicated by the time stamp upon delivery, except that if received after 5 PM Pacific Prevailing Time, it shall be deemed received on the next Business Day.

Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch information or requests, may be sent by electronic mail, or any other mutually acceptable form of electronic communication, and shall be considered delivered upon successful completion of such transmission (or, in the case of electronic mail, if no notice of delivery failure is received). Notices of claimed breach of this Agreement or an Event of Default must concurrently be sent by hand delivery or overnight carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees.

35 ARTICLE 10

FORCE MAJEURE

10.1 Definition.
(a) “Force Majeure Event” means any act or event that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance. (b) Without limiting the generality of the foregoing, so long as the following events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance or noncompliance, a Force Majeure Event may include an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; epidemic; pandemic; or strikes or other labor difficulties caused or suffered by a Party or any third party except as set forth below. (c) Notwithstanding the foregoing, the term “Force Majeure Event” does not include (i) economic conditions that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including an increase in component costs for any reason, including foreign or domestic tariffs, Buyer’s ability to buy storage capacity at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under this Agreement); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above; (iv) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Facility except to the extent such inability is caused by a Force Majeure Event; or (v) any equipment failure except if such equipment failure is caused by a Force Majeure Event.

10.2 Termination Following Force Majeure Event. If a Force Majeure Event has occurred after the Commercial Operation Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon Notice to the other Party. In addition, if a Force Majeure Event causes the Facility to be materially damaged such that returning the Facility to the full operational status that existing prior to the Force Majeure Event is reasonably expected to take more than twelve (12) months, Seller may terminate this Agreement upon Notice to Buyer.

Upon any such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.1(b). Notwithstanding the foregoing, the occurrence and continuation of a Force Majeure Event shall not (a) suspend or excuse the obligation of a Party

36 to make any payments due hereunder, (b) suspend or excuse the obligation of Seller to achieve the Guaranteed Commercial Operation Date beyond the extensions provided in Exhibit B, or (c) limit Buyer’s right to declare an Event of Default pursuant to Section 11.1(b)(i) or (ii) and receive a Damage Payment upon exercise of Buyer’s default right pursuant to Section 11.2.

10.3 Notice for Force Majeure. Within two (2) Business Days of the Party becoming aware of that a Force Majeure Event will impact the Party’s performance under this Agreement, the claiming Party shall provide the other Party with oral notice of the Force Majeure Event, and within two (2) weeks thereafter the claiming Party shall provide the other Party with Notice in the form of a letter describing in detail the occurrence giving rise to the Force Majeure Event, including the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance. Failure to provide timely Notice shall not constitute a waiver of the Force Majeure Event, but the relief granted shall be based on the date Notice is provided rather than the date of the Force Majeure Event. Upon written request from the other Party, the claiming Party shall provide documentation demonstrating to other Party’s reasonable satisfaction that each day of the claimed delay was the result of a Force Majeure Event and did not result from the claiming Party’s actions or failure to exercise due diligence or take reasonable actions. The claiming party shall promptly notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party. The suspension of performance due to a claim of a Force Majeure Event must be of no greater scope and of no longer duration than is required by the Force Majeure Event.

ARTICLE 11
DEFAULTS; REMEDIES; TERMINATION

11.1 Events of Default. An “Event of Default” shall mean, (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof; (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default set forth in this Section 11.1) and such failure is not remedied within thirty (30) days after Notice thereof;
(iv) such Party becomes Bankrupt;
(v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Section 14.2 or 14.3, as appropriate; or

38 provided, that payment by the Defaulting Party of the Damage Payment or Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Party’s sole and exclusive monetary remedy for any termination of this Agreement and the Event of Default related thereto.

11.3 Termination Payment. The Termination Payment (“Termination Payment”) for the Terminated Transaction owed pursuant to Section 11.2 (b)(ii) shall be the aggregate of the Settlement Amount plus any or all other amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information. The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages. Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (a) the actual damages that the Non-Defaulting Party would incur in connection with the Terminated Transaction would be difficult or impossible to predict with certainty, (b) the Damage Payment or Termination Payment described in Section

11.2 or this Section 11.3 (as applicable) is a reasonable and appropriate approximation of such damages, and (c) the Damage Payment or Termination Payment described in Section 11.2 or this Section 11.3 (as applicable) is the exclusive remedy of the Non-Defaulting Party in connection with the Terminated Transaction but shall not otherwise act to limit any of the Non-Defaulting Party’s rights or remedies if the Non-Defaulting Party does not elect a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.

11.4 Notice of Payment of Termination Payment. As soon as practicable after termination of this Agreement, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Damage Payment or Termination Payment, as applicable, and whether the Termination Payment is due to or from the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for such calculation. The Termination Payment shall be made to or from the Non-Defaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.

11.5 Disputes With Respect to Termination Payment. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, the Defaulting Party shall, within five (5) Business Days of receipt of the Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the Termination Payment shall be determined in accordance with Article 15.

11.6 Rights And Remedies Are Cumulative. Except where an express and exclusive remedy or measure of damages is provided, the rights and remedies of a Party pursuant to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.

39 ARTICLE 12
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.

12.1 No Consequential Damages. EXCEPT TO THE EXTENT PART OF AN

EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, OR PART OF AN ARTICLE 16 INDEMNITY CLAIM, OR INCLUDED IN A LIQUIDATED DAMAGES CALCULATION,

OR ARISING FROM FRAUD OR INTENTIONAL MISREPRESENTATION, NEITHER

PARTY SHALL BE LIABLE TO THE OTHER OR ITS INDEMNIFIED PERSONS FOR ANY

SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT, OR CONSEQUENTIAL DAMAGES, OR

LOSSES OR DAMAGES FOR LOST REVENUE OR LOST PROFITS, WHETHER

FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT.

12.2 Waiver and Exclusion of Other Damages. EXCEPT AS EXPRESSLY SET

FORTH HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR

A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND

MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF LIABILITY CONTAINED IN

THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF

CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.

FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE

REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR

MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.

TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE

LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT

OR IMPOSSIBLE TO DETERMINE, THAT OTHERWISE OBTAINING AN ADEQUATE

REMEDY IS INCONVENIENT, AND THAT THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. IT IS THE

INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES

AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR

CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY,

WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.

THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES AND THE

EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE REMEDY FOR THE

BREACH BY THE OTHER OF THE TERMS OF THIS AGREEMENT, AND EACH PARTY

40 WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE WITH RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.

ARTICLE 13
REPRESENTATIONS AND WARRANTIES; AUTHORITY

13.1 Seller’s Representations and Warranties. As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability company, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and is qualified to conduct business in the state of California and each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller. (b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement. The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary limited liability company action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Seller has, or will have prior to the Delivery Term, all necessary Governmental Approvals to perform its obligations hereunder.

13.2 Buyer’s Representations and Warranties. As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a joint powers authority, duly organized, validly existing and in good standing under the laws of California.
(b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under

41 this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, the documents of formation of Buyer or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Buyer is a party or by which any of its property is bound.
(d) This Agreement has been duly executed and delivered by Buyer. This Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Buyer has, or will have prior to the Delivery Term, all necessary Governmental Approvals to perform its obligations hereunder.

13.3 General Covenants. Each Party covenants that commencing on the Effective Date and continuing throughout the Contract Term:
(a) It shall continue to be duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation and to be qualified to conduct business in California and each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition;
(b) It shall maintain (or obtain from time to time as required) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and (c) It shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and in material compliance with any Law.

ARTICLE 14

ASSIGNMENT

14.1 General Prohibition on Assignments. Except as provided below, neither Party may voluntarily assign this Agreement or its rights or obligations under this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed. Any purported assignment made without required written consent, or in violation of the conditions to assignment set out below, shall be null and void.

14.2 Collateral Assignment. Subject to the provisions of this Section 14.2, Seller has the right to assign this Agreement as collateral for any financing or refinancing of the Facility or portion thereof. In connection with any financing or refinancing of the Facility, upon request of Seller, Buyer shall in good faith work with Seller and Financing Party to agree upon a consent to

42 collateral assignment of this Agreement (“Collateral Assignment Agreement”). The Collateral Assignment Agreement shall include the following provisions:
(a) Buyer shall give Notice of an Event of Default by Seller to the Person(s) to be specified by Financing Party in the Collateral Assignment Agreement, before exercising its right to terminate this Agreement as a result of such Event of Default; provided that such Notice shall be provided to Financing Party at the time such Notice is provided to Seller and the additional cure period of Financing Party agreed to in the Collateral Assignment Agreement shall not commence until Financing Party has received Notice of such Event of Default; (b) Following an Event of Default by Seller under this Agreement, Buyer may require Seller or Financing Party to provide to Buyer a report concerning:
(i) The status of efforts by Seller or Financing Party to develop a plan to cure the Event of Default;
(ii) Impediments to the cure plan or its development;
(iii) If a cure plan has been adopted, the status of the cure plan’s implementation (including any modifications to the plan as well as the expected timeframe within which any cure is expected to be implemented);
(iv) Any other information which Buyer may reasonably require related to the development, implementation and timetable of the cure plan; and (v) Seller or Financing Party must provide the report to Buyer within ten (10) Business Days after Notice from Buyer requesting the report. Buyer will have no further right to require the report with respect to a particular Event of Default after that Event of Default has been cured;
(c) Financing Party will have the right to cure an Event of Default on behalf of Seller, only if Financing Party sends a Notice to Buyer before the later of (i) the expiration of any cure period, and (ii) fifteen (15) Business Days after Financing Party’s receipt of Notice of such Event of Default from Buyer, indicating Financing Party’s intention to cure. Financing Party must remedy or cure the Event of Default within the cure period under this Agreement and any additional cure periods agreed in the Collateral Assignment Agreement, which shall not exceed a maximum of one hundred twenty (120) days (or one hundred eighty (180) days in the event of a bankruptcy of Seller, or any foreclosure or similar proceeding if required by Financing Party to cure any Event of Default);
(d) Financing Party will have the right to consent before any termination of this Agreement which does not arise out of an Event of Default; (e) Financing Party will receive prior Notice of and the right to approve material amendments to this Agreement, which approval will not be unreasonably withheld, delayed or conditioned;

43 (f) If Financing Party, directly or indirectly, takes possession of, or title to the Facility (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure), Financing Party or its designee must assume all of Seller’s obligations arising under this Agreement and all related agreements (subject to such limits on liability as are mutually agreed to by Seller, Buyer, and Financing Party as set forth in the Collateral Assignment Agreement); provided, before such assumption, if Buyer advises Financing Party that Buyer will require that Financing Party cure (or cause to be cured) any Event of Default existing as of the possession date which are capable of being cured in order to avoid the exercise by Buyer (in its sole discretion) of Buyer’s right to terminate this Agreement with respect to such Event of Default, then Financing Party at its option, and in its sole discretion, may elect to either:
(i) Cause such Event of Default to be cured (other than any Events of Default which relate to Seller’s bankruptcy or similar insolvency proceedings), or (ii) Not assume this Agreement;
(g) If Financing Party elects to sell or transfer the Facility (after Financing Party directly or indirectly, takes possession of, or title to the Facility), or sale of the Facility occurs through the actions of Financing Party (for example, a foreclosure sale where a third party is the buyer, or otherwise), then Financing Party shall cause the transferee or buyer to assume all of Seller’s obligations arising under this Agreement and all related agreements as a condition of the sale or transfer. Such sale or transfer may be made only to an entity that (i) meets the definition of Permitted Transferee and (ii) is an entity that Buyer is permitted to contract with under applicable Law; and
(h) Subject to Financing Party’s cure of any Events of Defaults under the Agreement in accordance with Section 14.2(f), if this Agreement is rejected in Seller’s bankruptcy or otherwise terminated in connection therewith, Financing Party shall have the right to elect within one hundred eighty (180) days after such rejection or termination, to cause Buyer to enter into a replacement agreement with Financing Party or its designee having the same terms as this Agreement for the remaining term thereof, provided that such designee shall (i) meet the definition of Permitted Transferee and (ii) be an entity that Buyer is permitted to contract with under applicable Law.
(i) In addition, Buyer agrees to otherwise cooperate in a timely manner with the due diligence efforts of any such Lender and to deliver reasonable and customary estoppel certificates to the extent requested or required by a Lender in connection with a financing or tax equity financing.

14.3 Buyer Limited Assignment. Buyer shall have the right to make a limited assignment in connection with a municipal prepayment transaction to an entity (“Limited Assignee”) that has, or provides a parent guaranty in form and substance reasonably acceptable to Seller from an entity with, an Investment Grade Credit Rating, of Buyer’s right to receive Product and Buyer’s obligation to make payments to the Seller. The limited assignment shall be expressly subject to the Limited Assignee’s timely payment of amounts due under this Agreement. Buyer shall pay Seller for any payments not timely made by the Limited Assignee, and Buyer shall remain obligated to perform all of its obligations under this Agreement notwithstanding the limited assignment. Any failure by the Limited Assignee to make payments to Seller when due hereunder

44 shall be a Buyer Event of Default if not cured within the applicable cure period specified herein.

Subject to the foregoing, Buyer may make such assignment upon not less than thirty (30) days’ advance Notice by delivering to Seller a written request for Seller’s consent to such assignment, which request must include a proposed assignment agreement in form and substance reasonably acceptable to Seller. Provided that Buyer delivers a proposed assignment agreement complying with the previous sentence, Seller agrees to (i) comply with Limited Assignee’s reasonable requests for know-your-customer and similar account opening information and documentation with respect to Seller, including but not limited to information related to forecasted generation, credit rating, and compliance with anti-money laundering rules, the Dodd-Frank Act, the Commodity Exchange Act, the Patriot Act and similar rules, regulations, requirements and corresponding policies; and (ii) promptly execute such assignment agreement and implement such assignment as contemplated thereby, subject only to the countersignature of Limited Assignee and Buyer.

ARTICLE 15

DISPUTE RESOLUTION

15.1 Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of Law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. The Parties agree that any suit, action or other legal proceeding by or against any Party (or its affiliates or designees) with respect to or arising out of this Agreement shall be brought in the federal courts of the United States or the courts of the State of California sitting in the County of Monterey, California.

15.2 Dispute Resolution. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a Notice from either Party identifying such dispute, the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either thirty (30) days of initiating such discussions, or within forty (40) days after Notice of the dispute, then either Party may seek any and all remedies available to it at law or in equity, subject to the limitations set forth in this Agreement.

15.3 Arbitration. In the event of a dispute under Section 19.13, or upon the agreement of both Parties, any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, shall be determined by final, non-appealable binding arbitration in San Francisco, California before three (3) arbitrators.

The arbitration shall be administered by Judicial Arbitration and Mediation Services, Inc. (“JAMS”) pursuant to its Comprehensive Arbitration Rules and Procedures. Within fifteen (15) days after the commencement of arbitration, each of Buyer and Seller shall select one person to act as arbitrator, and the two so-selected arbitrators shall select a third arbitrator (the “chairperson”) within thirty (30) days of the commencement of the arbitration. If either Seller or Buyer is unable or fails to select one person to act as arbitrator, such arbitrator shall be appointed by JAMS. If the Seller and Buyer-selected arbitrators are unable or fail to agree upon a chairperson, the chairperson shall be appointed by JAMS. The chairperson shall be a person who has experience in renewable energy-related transactions, and none of the arbitrators shall have

45 been previously employed by any Party or have any direct pecuniary interest in any Party or the subject matter of the arbitration, unless such conflict is expressly acknowledged and waived in writing by all of the Parties. The Parties shall maintain the confidential nature of the arbitration proceeding and any award, including any hearing(s), except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as necessary in connection with a court application for a preliminary remedy, a judicial challenge to an award or its enforcement, or unless otherwise required by law or judicial decision. Any arbitration proceedings, decision or award rendered hereunder and the validity, effect and interpretation of this arbitration provision shall be governed by the Federal Arbitration Act. The arbitrator(s) shall have no authority to award consequential, treble, exemplary, or punitive damages of any type or kind regardless of whether such damages may be available under any law or right, with the Parties hereby affirmatively waiving their rights, if any, to recover or claim such damages. The responsibility for compensation and expenses of the three arbitrators and all other expenses charged by JAMS shall be equally split by Buyer and Seller. Notwithstanding the foregoing provisions of this Section 15.3, any costs incurred by a Party in seeking judicial enforcement of any written decision of the arbitrators shall be chargeable to and borne exclusively by the Party against whom such court order is obtained.

The award shall be final and binding on the Parties and judgment upon any award may be entered in any court of competent jurisdiction.

ARTICLE 16

INDEMNIFICATION

16.1 Indemnity. Each Party (the “Indemnifying Party”) agrees to defend, indemnify and hold harmless the other Party, its directors, officers, agents, attorneys, consultants, employees and representatives (the “Indemnified Party”) from and against all third party claims, demands, losses, liabilities, penalties, and expenses, including reasonable attorneys’ and expert witness fees (collectively, “Indemnifiable Losses”) for (a) personal injury or death to Persons, (b) damage to the property of any third party, (c) any fines or penalties imposed by any Governmental Authority, and (d) the loss or failure to deliver Resource Adequacy Benefits or other Capacity Attributes in each of the cases of clauses (a) through (d) resulting from (i) Buyer’s failure to meet its obligations set forth in Section 4.7, or (ii) arising out of or relating to or in any way connected with the Indemnifying Party’s or its Affiliates’ breach of this Agreement, negligence or willful misconduct.

Nothing in this Section 16.1 shall enlarge or relieve Seller or Buyer of any liability to the other for any breach of this Agreement. Neither Party shall be indemnified for its damages to the extent resulting from its negligence, intentional acts or willful misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligation to pay claims consistent with the provisions of a valid insurance policy.

16.2 Notice of Claim. Subject to the terms of this Agreement and upon obtaining knowledge of an Indemnifiable Loss for which it is entitled to indemnity under this Article 16, the Indemnified Party will promptly provide Notice to the Indemnifying Party in writing of any damage, claim, loss, liability or expense which the Indemnified Party has determined has given or could give rise to an Indemnifiable Loss under Section 16.1 (“Claim”). The Notice is referred to as a “Notice of Claim.” A Notice of Claim will specify, in reasonable detail, the facts known to the Indemnified Party regarding the Indemnifiable Loss.

16.3 Failure to Provide Notice. A failure to give timely Notice or to include any

47 insurance policy in a minimum limit of liability Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest provisions. (b) Employer’s Liability Insurance. Employers’ Liability insurance shall not be less than for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the policy limit will apply to each employee.
(c) Workers Compensation Insurance. Seller, if it has employees, shall also maintain at all times during the Contract Term workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of California Law. (d) Business Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with limits of each accident. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement.
(e) Evidence of Insurance. Within sixty (60) days after execution of the Agreement and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such coverage. These certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of cancellation or termination of coverage except for ten (10) days for non-payment of premium. General liability insurance and business auto insurance shall be primary coverage without right of contribution from any insurance of Buyer. Any other insurance maintained by Seller is for the exclusive benefit of Seller and shall not in any manner inure to the benefit of Buyer.

ARTICLE 18

CONFIDENTIAL INFORMATION

18.1 Definition of Confidential Information. The following constitutes “Confidential Information,” whether oral or written which is delivered by Seller to Buyer or by Buyer to Seller including: (a) the terms and conditions of, and proposals and negotiations related to, this Agreement, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement.

18.2 Duty to Maintain Confidentiality. Confidential Information will retain its character as Confidential Information but may be disclosed by the recipient (the “Receiving Party”) if and to the extent such disclosure is required (a) to be made by any requirements of Law,

48 (b) pursuant to an order of a court or (c) in order to enforce this Agreement. If the Receiving Party becomes legally compelled (by interrogatories, requests for information or documents, subpoenas, summons, civil investigative demands, or similar processes or otherwise in connection with any litigation or to comply with any Law, order, regulation, ruling, regulatory request, accounting disclosure rule or standard or any exchange, control area or independent system operator rule) to disclose any Confidential Information of the disclosing Party (the “Disclosing Party”), Receiving Party shall provide Disclosing Party with prompt Notice so that Disclosing Party, at its sole expense, may seek an appropriate protective order or other appropriate remedy. If the Disclosing Party takes no such action after receiving the foregoing Notice from the Receiving Party, the Receiving Party is not required to defend against such request and shall be permitted to disclose such Confidential Information of the Disclosing Party, with no liability for any damages that arise from such disclosure. The provisions of this Article 18 shall survive and shall continue to be binding upon the Parties for period of one (1) year following the date of termination of this Agreement. Each Party hereto acknowledges and agrees that information and documentation provided in connection with this Agreement may be subject to the California Public Records Act (Government Code Section 7920 et seq.).

18.3 Irreparable Injury; Remedies. Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party, and expressly acknowledges that monetary damages would be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth herein. Accordingly, Receiving Party acknowledges that any such breach or threatened breach will cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Disclosing Party will be entitled to seek injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of proving actual damages.

18.4 Disclosure to Financing Parties, Etc.. Notwithstanding anything to the contrary in this Article 18, Confidential Information may be disclosed by Seller to any actual or potential Financing Party or any of its Affiliates, and Seller’s actual or potential agents, advisors, actual or potential investors, consultants, contractors, or trustees, so long as the Person (other than a Person that has an ethical duty to Seller) to whom Confidential Information is disclosed agrees in writing to be bound by confidentiality provisions no less stringent than those in this Article 18 (subject to customary survival terms). Seller shall provide Notice to Buyer of any disclosure of Confidential Information pursuant to this Section 18.4, including the identity of the party receiving such Confidential Information.

18.5 Press Releases. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such public statement. A Party’s consent shall not be unreasonably withheld, conditioned or delayed.

ARTICLE 19

MISCELLANEOUS

19.1 Entire Agreement; Integration; Exhibits. This Agreement, together with the Cover Sheet and Exhibits attached hereto constitutes the entire agreement and understanding

49 between Seller and Buyer with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. The headings used herein are for convenience and reference purposes only. In the event of a conflict between the provisions of this Agreement and those of the Cover Sheet or any Exhibit, the provisions of first the Cover Sheet, and then this Agreement shall prevail, and such Exhibit shall be corrected accordingly.

19.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, that, for the avoidance of doubt, this Agreement may not be amended by electronic mail communications.

19.3 No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.

19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) or, to the extent set forth herein, any Financing Party or Indemnified Party.

19.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.

19.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Changes proposed by a non-Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under applicable Law.

19.7 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.

50 19.8 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution and electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party, and, if delivery is made by electronic format, the executing Party shall promptly deliver, via overnight delivery, a complete original counterpart that it has executed to the other Party, but this Agreement shall be binding on and enforceable against the executing Party whether or not it delivers such original counterpart.

19.9 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

19.10 No Recourse to Members of Buyer. Buyer is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or advisors, contractors, consultants or employees of Buyer or Buyer’s constituent members, in connection with this Agreement.

19.11 Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a “forward contract” within the meaning of the U.S. Bankruptcy Code, and Buyer and Seller are “forward contract merchants” within the meaning of the U.S. Bankruptcy Code. Each Party further agrees that, for all purposes of this Agreement, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. §366 or another provision of 11 U.S.C. § 101-1532.

19.12 Further Assurances. Seller agrees to use commercially reasonable efforts to cooperate with respect to any future changes to this Agreement needed to satisfy requirements of Governmental Authorities associated with changes in law to maximize benefits to Buyer, including: (i) modification of the description of Capacity Attributes as may be required, including updating the Agreement to reflect any mandatory contractual language required by Governmental Authorities; or (ii) submission of any reports, data, or other information required by Governmental Authorities; provided that Seller shall have no obligation to modify this Agreement, or take other actions not required under this Agreement, if such modifications or actions would materially adversely affect, or could reasonably be expected to have or result in a material adverse effect on, any of Seller's rights, benefits, risks and/or obligations under this Agreement. Each of the Parties hereto agree to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement.

19.13 Change in Electric Market Design. If a change in the CAISO Tariff renders this Agreement or any provisions hereof incapable of being performed or administered, then either Party may request that the other Party enter into negotiations to make the minimum changes to this

51 Agreement necessary to make this Agreement capable of being performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith, provided, however that Seller shall have no obligation to agree to any amendment that results in an unreimbursed reduction of forecast revenue Seller expects to generate under this Agreement. If Buyer and Seller are unable, within sixty (60) days after delivery of such request, to agree upon changes to this Agreement or to resolve issues relating to changes to this Agreement, then any Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Section 15.3. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, and (ii) all of the unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.

MRP PACIFICA MARKETING III LLC,
a Delaware limited liability company

CENTRAL COAST COMMUNITY
ENERGY, a California joint powers
authority
By:

Name:

Title:

By:

Name:

Title:

MRP PACIFICA MARKETING III LLC,
a Delaware limited liability company
Approved as to form:

By:

Name:

Title:

By:

Name:

Title:

Exhibit B - 3
Owner to operate the BESS Resource is parallel with the Transmission System. g. The PTO has provided documentation supporting Commercial Operation. h. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff.

Exhibit C - 1

EXHIBIT C

HEAT RATE AND EFFICIENCY GUARANTY
Thermal Resource Heat Rate Guaranty
Heat Rate Testing: The heat rate (“Heat Rate”) of the Thermal Resource shall be determined by performing thermal performance testing generally in accordance with the American Society of Mechanical Engineers’ Standard PTC 22 and Prudent Industry Practice. The Heat Rate will be first tested no later than thirty (30) days prior to the System RA Start Date and thereafter, the Heat Rate will be tested annually upon Buyer’s request. In addition, Buyer shall have the right to require a test or retest of the Heat Rate at any time upon no less than ten (10) Business Days prior written Notice to Seller if Buyer reasonably believes that the current Heat Rate has varied materially from the results of the most recent Heat Rate test. All costs or revenues associated with any Heat Rate test shall be borne by, or accrue to, Buyer, as applicable.

Heat Rate Liquidated Damages: In the event the Heat Rate is higher than the Guaranteed Heat Rate, Seller will pay to Buyer, as liquidated damages and not a penalty, the sum of (a) Buyer’s average cost of purchasing additional natural gas during the period since the last Heat Rate Test to power the Thermal Resource as compared with the quantity that would have been purchased had the Heat Rate equaled the Guaranteed Heat Rate and (ii) the incremental costs associated with the distribution of such additional natural gas from the Gas Utility Receipt Point to the Thermal Resource during the period since the last Heat Rate Test. For each monthly period after any Heat Rate test demonstrating a Heat Rate higher than the Guaranteed Heat Rate, Heat Rate Liquidated Damages shall be calculated and paid on a monthly basis, and shall be reflected as a credit on the monthly invoice in accordance with Section 8.7.

BESS Resource Efficiency Guaranty
Efficiency Guaranty Testing:

The “Efficiency” of the BESS Resource shall be calculated as follows:

𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 =
MWh delivered + Stored Energy𝑒𝑒𝑒𝑒𝑒𝑒
MWh received + Stored Energystart
Where:
(i) MWhdelivered = all measured and recorded Discharge Energy delivered from the BESS Resource at the Metering Point for the Facility during the Measurement Period.
(ii) MWhreceived = all measured and recorded Charging Energy received during charging of the BESS Resource at the Metering Point for the Facility during the Measurement Period.

Exhibit D - 1

EXHIBIT D

FORM OF LETTER OF CREDIT
[Issuing Bank Letterhead and Address]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [XXXXXXX]
Date:

Bank Ref.:

Amount: US$[XXXXXXXX]
Expiration Date:

Beneficiary:
[________]
[________]
Attn: [________]
Ladies and Gentlemen:

By the order of [________________] (“Applicant”), we, [insert bank name and address] (“Issuer”) hereby issue our Irrevocable Standby Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) in favor of [__________], a [________] (“Beneficiary”), for an amount not to exceed the aggregate sum of U.S. $[XXXXXX] (United States Dollars [XXXXX] and 00/100), pursuant to that certain Dispatchable Energy and Energy Storage Agreement dated as of ______, as amended from time to time, between Applicant and Beneficiary (the “Agreement”). This Letter of Credit shall become effective immediately and shall expire on [Insert Date] which is one year after the issue date of this Letter of Credit, or any expiration date extended in accordance with the terms hereof (the “Expiration Date”).

Funds under this Letter of Credit are available to Beneficiary by valid presentation on or before the Expiration Date of a dated statement purportedly signed by your duly authorized representative, in the form attached hereto as Exhibit A, containing one of the two alternative paragraphs set forth in paragraph 2 therein, referencing our Letter of Credit No. [XXXXXXX] (“Drawing Certificate”).

The Drawing Certificate may be presented by (a) physical delivery, (b) as a PDF attachment to an e-mail to [bank email address] or (c) facsimile to [bank fax number] confirmed by [e-mail to [bank email address]]. Transmittal by facsimile or email shall be deemed delivered when received.

The original of this Letter of Credit (and all amendments, if any) is not required to be presented in connection with any presentment of a Drawing Certificate by Beneficiary hereunder in order to receive payment.

We hereby agree with the Beneficiary that all documents presented under and in compliance with

Exhibit D - 2
the terms of this Letter of Credit will be duly honored upon presentation to the Issuer on or before the Expiration Date. All payments made under this Letter of Credit shall be made with Issuer’s own immediately available funds by means of wire transfer in immediately available United States dollars to Beneficiary’s account as indicated by Beneficiary in its Drawing Certificate or in a communication accompanying its Drawing Certificate.

Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance.

It is a condition of this Letter of Credit that the Expiration Date shall be deemed automatically extended without an amendment for a one year period beginning on the present Expiration Date hereof and upon each anniversary for such date, unless at least one hundred twenty (120) days prior to any such Expiration Date we have sent to you written notice by overnight courier service that we elect not to extend this Letter of Credit, in which case it will expire on the date on the then current Expiration Date, or such later date as may be specified in such notice. No presentation made under this Letter of Credit after such Expiration Date (as may be extended in such notice) will be honored.

This Letter of Credit is issued subject to the rules of the ‘International Standby Practices 1998’, International Chamber of Commerce Publication No. 590 (“ISP98”) and, as to matters not addressed by ISP98, shall be governed and construed in accordance with the laws of state of California.

Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements (other than as set forth in the immediately prior paragraph), this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.

Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available.

All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: [________], Attn: [________], [Insert Address]. Only notices to Beneficiary meeting the requirements of this paragraph shall be considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect.
[Bank Name]
___________________
[Insert officer name]
[Insert officer title]

Exhibit D - 3
Exhibit A
Drawing Certificate
(DRAW REQUEST SHOULD BE ON BENEFICIARY’S LETTERHEAD)
[Insert Bank Name and Address]
Ladies and Gentlemen:

The undersigned, a duly authorized representative of [_________], a [________], [Insert Address], as beneficiary (the “Beneficiary”) of the Irrevocable Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) issued by [insert bank name] (the “Bank”) by order of [_________], a [________] (the “Applicant”), hereby certifies to the Bank as follows:

1. Applicant and Beneficiary are party to that certain Dispatchable Energy and Energy Storage Agreement dated as of ___________, 20__ (the “Agreement”).

2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________ because a Buyer Default (as such term is defined in the Agreement) has occurred or other occasion provided for in the Agreement where Beneficiary is authorized to draw on the Letter of Credit has occurred.

OR
Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________, which equals the full available amount under the Letter of Credit, because Applicant is required to maintain the Letter of Credit in force and effect beyond the Expiration Date of the Letter of Credit but has failed to provide Beneficiary with a replacement Letter of Credit or other acceptable instrument within thirty (30) days prior to such Expiration Date.

3. The undersigned is a duly authorized representative of [_________] and is authorized to execute and deliver this Drawing Certificate on behalf of Beneficiary.

You are hereby directed to make payment of the requested amount to [_________] by wire transfer in immediately available funds to the following account:
[Specify account information]
[_________]
_______________________________
Name and Title of Authorized Representative
Date___________________________

Exhibit E - 1

EXHIBIT E

STORAGE AVAILABILITY

1. Monthly Storage Availability
(a) Calculation of Monthly Storage Availability. Seller shall calculate the “Monthly Storage Availability” in a given month using the formula set forth below:

Monthly Storage Availability (%) = 𝐴𝐴𝐴𝐴 𝐴𝐴𝐴𝐴𝐴𝐴 𝑆𝑆𝑆𝑆𝑆𝑆 𝐶𝐶 𝐶𝐶 𝐶𝐶𝐶𝐶 𝐶𝐶 𝑆𝑆𝑆𝑆𝑆𝑆 𝐶𝐶 𝐶𝐶 𝐶𝐶 𝐶𝐶 𝐶𝐶𝐶𝐶 𝐶𝐶
where:

Average Storage Capacity = ∑𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻𝐻 𝐴𝐴𝐴𝐴𝐴𝐴 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝐶𝐶 𝐶𝐶 𝐶𝐶𝐶𝐶 𝐶𝐶 𝐻𝐻 𝐻𝐻 𝐻𝐻
Where:

Hours = All hours in the month
Available Capacity = for each hour of the month, the lesser of the Storage Contract Capacity and:
(i) the Storage Capacity minus any BESS Resource capacity Seller reports to CAISO as being Unavailable for such hour as recorded in OMS as of the applicable deadline for
submitting bids into the Day-Ahead Market (except as
provided below); plus
(ii) any capacity from the BESS Resource that is Unavailable for such hour due to Force Majeure Events, System
Emergencies, acts or omissions of Buyer or Planned Outages within the parameters set forth in Exhibit I (collectively, “Excused Events”), as recorded in OMS.

If the BESS Resource is Unavailable for less than a full hour, the Available Capacity shall be the average capacity that was Available during that hour.

If the BESS Resource or any component thereof was previously deemed Unavailable for an hour or part of an hour and Seller provides an update to OMS indicating the BESS Resource is Available for that hour or part of an hour prior to the deadline for submitting bids into the Real-Time Market, the BESS Resource will be deemed to be Available to the extent recorded in OMS.

2. Storage Availability Adjustment Factor
The applicable “Storage Availability Adjustment Factor” or “SAAF” is calculated as follows:

Exhibit E - 2
(i) For Months between the Energy Start Date and the Commercial Operation Date, SAAF =
(ii) If the Monthly Storage Availability is greater than or equal to the Guaranteed Storage Availability, then:

SAAF = 100%
(iii) If the Monthly Storage Availability is less than the Guaranteed Storage Availability, then:

SAAF =

Exhibit F - 1

EXHIBIT F

STORAGE CAPACITY TESTS
The “Storage Capacity Test” shall be performed by Seller by maintaining Discharging Energy from the BESS Resource for one (1) hour and the “Effective Discharge Capacity” in megawatts (MW) shall be determined as the quotient of the aggregate quantity of Discharging Energy (MWh) at the end of the one (1) hour test period, as measured at the Delivery Point for the BESS Resource, divided by one (1); provided, however, that the Effective Discharge Capacity cannot exceed the Storage Capacity set forth in Exhibit A (“Capacity Limit”).

Within the first quarter of each Contract Year, upon no less than five (5) Business Days’ prior notice to Buyer, Seller shall schedule and complete a Storage Capacity Test (the “Annual Storage Capacity Test”) In addition, Buyer shall have the right to require a retest of the Storage Capacity Test at any time upon five (5) Days prior Notice to Seller if Buyer reasonably believes that the Effective Storage Capacity or the Effective Discharge Capacity has varied materially from the results of the most recent tests. Seller shall have the right to run up to three (3) retests of the Storage Capacity Test at any time upon five (5) days prior Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Practices). Except for establishing the Storage Capacity for purposes of achieving Commercial Operation, Seller may demonstrate the Effective Storage Capacity or the Effective Discharge Capacity by reference to operational data from a meter at the Delivery Point for the BESS Resource in lieu of conducting a Storage Capacity Test. For the avoidance of doubt, the Annual Storage Capacity Test may not result in an Effective Discharge Capacity greater than the Capacity Limit.

No later than five (5) Days following any Storage Capacity Test, Seller shall submit a testing report detailing results and findings of the test. The report shall include meter readings from the Delivery Point for the BESS Resource and plant log sheets verifying the operating conditions and output of the Facility. The actual capacity determined pursuant to a Storage Capacity Test shall become the new Energy Contract Quantity at the beginning of the day following the completion of the test for all purposes under this Agreement.

Exhibit G - 2
MRP Pacifica Marketing III LLC Central Coast Community Energy With additional Notices of an Event of
Default to:

Attn: General Counsel
Phone:

Email: [email protected]
Additional notices of an Event of Default to:

Clean Energy Counsel
Attn: Todd Larsen
Email: [email protected]
With additional Notices of an Event of Default or
Force Majeure Event to:

Central Coast Community Energy
Attn: General Counsel
Phone:

Email: [email protected]
With a copy to:

Hall Energy Law PC
Attn: Stephen Hall
Phone:

Email: [email protected]
Emergency Contact:

Attn: CalPeak Power LLC
Phone:

Email: calpeak [email protected]
Emergency Contact:

Attn: Director of Power Supply Resources
Phone:

Email: [email protected]

Exhibit J - 2
(i) If the Monthly RA Availability is greater than or equal to the Guaranteed RA Availability, then:

RAAAF = 100%
(ii) If the Monthly RA Availability is less than the Guaranteed RA Availability, then:

RAAAF =

Exhibit K - 1

EXHIBIT K
[RESERVED]

Exhibit L - 2
[LICENSED PROFESSIONAL ENGINEER]
By:

Printed Name:

Title:

Exhibit M - 1

EXHIBIT M

FORM OF INSTALLED CAPACITY CERTIFICATE
This certification (“Certification”) of Installed Capacity is delivered by [LICENSED PROFESSIONAL ENGINEER] (“Engineer”) to Central Coast Community Energy, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Dispatchable Energy and Energy Storage Agreement dated _________ by and between MRP Pacifica Marketing III LLC (“Seller”) and Buyer (“Agreement”). All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

I hereby certify the following:

The Storage Capacity Test demonstrated a maximum dependable operating capability that can be sustained for one hour to discharge electric energy of __ MW AC to the Delivery Point for the BESS Resource, in accordance with the testing procedures, requirements and protocols set forth in Section 4.11 and Exhibit F (the “Installed Capacity”).

EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:

Printed Name:

Title:

Exhibit N - 1

EXHIBIT N

SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Seller as Scheduling Coordinator for the Facility. During the Delivery Term, Seller shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility for the delivery of the Product at the Delivery Point and for the purposes of conducting Storage Capacity Tests. As directed by Buyer, Seller (as the Facility’s SC) shall submit Schedules and Supply Plans to the CAISO in accordance with this Agreement and the applicable CAISO Tariff, protocols and Scheduling practices for Product, including on a day-ahead, hour-ahead, fifteen-minute market or real time basis. (b) Notices. Seller (as the Facility’s SC) shall use a web-based system through which Seller shall submit to CAISO all notices and updates required under the CAISO Tariff regarding the Facility’s status, including, but not limited to, all outage requests, forced outages, forced outage reports, clearance requests, or must offer waiver forms. Seller will cooperate with Buyer to provide Buyer access to such notices and updates. If the web-based system is not available, Seller shall promptly submit such information to Buyer and the CAISO (in order of preference) telephonically, by electronic mail, transmission to the personnel designated to receive such information. (c) CAISO Costs and Revenues. Except during a Storage Capacity Test or as otherwise set forth below, Buyer shall be responsible for CAISO costs (including penalties, Imbalance Energy costs, and other charges) and shall be entitled to all CAISO revenues (including credits, Imbalance Energy revenues, and other payments), including revenues associated with CAISO dispatches, bid cost recovery, or other credits in respect of the Product Scheduled or delivered from the Facility, provided, that Seller shall be responsible for CAISO costs (including penalties, Imbalance Energy costs, and other charges) to the extent such CAISO costs are due to Seller’s failure to schedule the Charging Energy, Discharging Energy or Dispatchable Energy or submit Supply Plans in accordance with Buyer’s instructions and the requirements of this Agreement.

Seller shall be responsible for all CAISO penalties resulting from any failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement except to the extent resulting from compliance with Buyer’s instructions. The Parties agree that any Availability Incentive Payments (as defined in the CAISO Tariff) are for the benefit of the Seller and for Seller’s account and that any Non-Availability Charges (as defined in the CAISO Tariff) are the responsibility of the Seller and for Seller’s account. Buyer shall use reasonable efforts to avoid submitting bids that cause Seller to incur Non-Availability Charges. In addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling, outage reporting, or generator operation, and any such sanctions or penalties are imposed upon the Facility or to Seller as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or the outage notification or other requirements set forth in this Agreement or the SC Agreement, the cost of the sanctions or penalties shall be the Seller’s responsibility.

Subject to the foregoing, Seller shall pass through to Buyer all CAISO costs and revenues associated with the Facility, which shall be reflected as a credit on the monthly invoices provided to Buyer in accordance with the invoicing and payment provisions of Article 8, including the netting provisions of Section 8.7.
(d) CAISO Settlements. Seller (as the Facility’s SC) shall be responsible for all

Exhibit N - 2
settlement functions with the CAISO related to the Facility. (e) Dispute Costs. Seller (as the Facility’s SC) may be required to dispute CAISO settlements in respect of the Facility. If Buyer has directed Seller to dispute a CAISO settlement, Buyer agrees to pay Seller’s costs and expenses (including reasonable attorneys’ fees) associated with its involvement with such CAISO disputes to the extent they relate to CAISO charges payable by Buyer with respect to the Facility.
(f) Master Data File and Resource Data Template. Seller shall provide the data to the CAISO (and to Buyer) that is required for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement. Neither Party shall change such data without the other Party’s prior written consent. (g) NERC Reliability Standards. Seller (as Scheduling Coordinator) shall comply with NERC reliability standards.
(h) Audit Right. Buyer has the right, at its sole expense, during normal working hours, and after reasonable Notice, to examine the records of Seller to the extent reasonably necessary to verify the accuracy of any statements, charges, revenues, or costs passed through to Buyer in accordance with Seller or the SC providing Scheduling Coordinator services under this Agreement including the costs to procure any natural gas or Substitute Capacity on behalf of Buyer. If such examination reveals any material inaccuracy in any statement, the necessary adjustments shall be made promptly.

Exhibit O - 1

EXHIBIT O

GAS HEDGING TRANSACTION
On a daily basis, Buyer may request that Seller provide quotes to purchase natural gas at a fixed price for a specified volume and period of time (the “Fixed Price Gas”). Any such request from Buyer shall be in writing and shall specify the proposed “Start Date”, “End Date”, and requested fuel quantity for the Hedging Transaction. Unless otherwise agreed to by Seller, the request may be to fix the price for natural gas no earlier than the following day and for no more than thirty-six (36) months. Following receipt of such request, Seller shall promptly, but in any event within one (1) Trading Day (as defined below), deliver to Buyer a quote for the Fixed Price Gas to be used during the requested period of time along with an “Acceptance Deadline” by which the quote must be accepted; provided, Seller shall use commercially reasonable efforts to provide Buyer at least thirty (30) minutes to accept a quote. The quote will represent Seller’s commercially reasonable efforts to secure the Fixed Price Gas and may include any credit charges, scheduling costs, or other adjustments to the market price based on verifiable costs to the Seller. Seller will deliver the quote via email in the following form:

Acceptance Deadline:

Start Date:

End Date:

MMBtu per Day:

Total MMBtu:

Price per MMBtu:

The foregoing represents an offer to secure Fixed Price Gas as used under that certain Dispatchable Energy and Energy Storage Agreement by and between Central Coast Community Energy and MRP Pacifica Marketing III LLC dated as of _____________.

Neither Party has any obligation with respect to this offer until and unless Buyer accepts such offer in writing prior to the Acceptance Deadline in the form set forth in Exhibit P (a “Fixed Price Gas Order”). This offer expires without further action if it is not accepted in writing prior to the Acceptance Deadline.

If Buyer accepts the offer by delivering a Fixed Price Gas Order to Seller prior to the offer’s expiration, then the Fixed Price Gas Order will be used to calculate amounts owed by Buyer for natural gas under this Agreement for the specified term and volume. If the offer expires, Buyer may request that Seller provide a new quote during the same Trading Day and Seller will use reasonable commercial efforts to provide a new quote within that Trading Day.

As used in this Exhibit, “Trading Day” means Monday through Friday, excluding Federal Banking Holidays for transactions in the U.S. starting at 8:00 a.m. Pacific Prevailing Time and ending at 5:00 p.m. Pacific Prevailing Time.

Exhibit P - 1

EXHIBIT P
FORM OF “FIXED PRICE GAS ORDER”
This FIXED PRICE GAS ORDER (“Order”), is delivered by Central Coast Community Energy, a California joint powers authority to MRP Pacifica Marketing III LLC in accordance with the terms of that certain Dispatchable Energy and Energy Storage Agreement by and between Central Coast Community Energy, as Buyer, and MRP Pacifica Marketing III LLC, as Seller, dated as of ____________ (the “Agreement”). All capitalized terms used in this Order but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

Pursuant to Section 4.6(c) of the Agreement, Buyer accepts Seller’s offer to purchase Fixed Price Gas as follows:

Seller’s Acceptance Deadline:

Date/Time of Buyer’s Acceptance:

Start Date:

End Date:

MMBtu per Day:

Total MMBtu:

Price per MMBtu:

Buyer has caused this Order to be duly executed and delivered by a duly authorized representative on the date written below.
[BUYER]
By: __________________________
Name: __________________________
Title: __________________________
Date: __________________________

Staff Report Item 13
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Leo Kim, Director of Power Supply
SUBJECT: (1) Authorize the CEO to execute a Power Purchase Agreement with IP Darden IV LLC, for up to 93.01 MW of Solar Renewable Energy and 91.48 of BESS Capacity, in a form substantially similar to the attached, as well as any necessary ancillary documents, with a delivery term of 10 years and expected Commercial Operations Date of June 1, 2028, in an amount not to exceed $319,000,000. (2) Authorize the CEO to execute up to two (2) amendments, that do not change the total not to exceed contract amount, subject to approval by the General Counsel
DATE: August 13, 2025
RECOMMENDATION:

It is recommended that the Operations Board (1) authorize the CEO to execute a Power Purchase Agreement with IP Darden IV LLC, for up to 93.01 MW of Solar Renewable Energy and 91.48 of BESS Capacity, in a form substantially similar to the attached, as well as any necessary ancillary documents, with a delivery term of 10 years and expected Commercial Operations Date of June 1, 2028, in an amount not to exceed $319,000,000. (2) Authorize the CEO to execute up to two (2) amendments, that do not change the total not to exceed contract amount, subject to approval by the General Counsel BACKGROUND:
3CE launched a request for offers (“RFO”) in April 2025 targeting procurement of renewable energy and storage resources to help meet internal goals, reduce greenhouse gas emissions, and meet reliability requirements.

DISCUSSION:

Staff evaluated projects based on quantitative and qualitative criteria, resulting in the selection of the Darden Clean Energy project. Project selection considered several factors that include an evaluation of the developer’s ability to perform, a quantitative and qualitative evaluation of the project, inclusive of 3CE’s Project Selection Methodology, adopted in June 2023.

Approval of the Darden Solar plus Storage Project provides 3CE with a resource that contributes to 3CE’s 100% clean and renewable strategy, meet statewide RPS and Resource Adequacy requirements. Due to the size and complex nature of the project, the configuration is still being finalized. The PPA recognizes this and allows Darden to increase the capacity of solar PV to 93.01 MW by August 31, 2025, which would provide even more clean energy for 3CE’s customers.

Approval of the Darden Solar plus Storage Project provides 3CE with a resource that contributes 5% to 3CE’s 100% clean and renewable strategy and meets statewide RPS and Resource Adequacy requirements.
3CE is one of eight off takers to the Darden Clean Energy Project. Once completed, it will total 1,150 MW of Solar PV and 1,150 MW of energy storage with a 4-hour discharge duration, using a lithium iron phosphate (LFG) battery chemistry in outdoor containerized units. This project will be the largest energy storage facility in the world.

As proposed, this PPA recognizes market uncertainty introduced by evolving federal legislation and executive actions and contains a provision for a potential increase in the storage contract price under specific conditions and only to the extent required to maintain project viability. Staff negotiated a risk-sharing provision with the developer, Intersect Power, specific terms of which are confidential and implementation of which will be verified by an independent evaluator, who will certify to 3CE the expected cost increases are justified. The cost-sharing measure contemplates a cap above which 3CE would not be required to pay and protections that, should the storage price increase result in an inviable project, 3CE would retain a share of the project’s multi-million-dollar Development Security. The not to exceed amount associated with this contract reflects this potential for an increase to the storage price cap, but staff do not expect any storage price increase to meet or exceed the cap price.

Developer
Intersect Power, LLC is a renewable energy and energy storage developer in North America, founded in 2016, with about 2,200 MW of solar PV and 2,400 MW of energy storage operating in California and Texas.

Overview of the Project
Counterparty IP Darden IV LLC
Parent Company Intersect Power, LLC
Product As-available Solar PV PCC1 renewable energy plus Battery Energy Storage System (BESS) including Energy, Resource Adequacy and Renewable Energy Credits.

Delivery Term 10 years
June 1, 2028 through May 31, 2038
Project Name Darden Clean Energy
Contract Capacity 91.48 MW Solar PV plus

94.38 MW Battery Energy Storage System (BESS)
4‐hour Discharge Duration
Total Project size is 1,150 MW PV+ 1,150 MW BESS with a total of 8 off takers
Location Cantua Creek, Fresno County, California
Percentage of Retail
Load Served
~5%
The RFO solicitation and shortlisting 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.

Contribution to 3CE’s Mission and Goals
This project will move 3CE 5% closer to meeting its 100% clean and renewable by 2030 procurement strategy, provide valuable PCC1 RECs (Renewable Energy Certificates) and RA (Resource Adequacy) benefits to meet regulatory requirements, along with providing cost-effective energy at a fixed price.

Low Med High

3CE’s ranking is High.

Workforce Development
Intersect Energy has committed to paying local prevailing wages as the project approaches the construction phase. The developer estimates around 1600 jobs will be created during construction and 14 permanent jobs once operations begin for the larger 1,150 MW project. They are targeting 100% of the workforce to come from local hires. 3CE’s ranking is High.

Innovation
3CE is one of eight off takers to the Darden Clean Energy Project and will total 1,150 MW of Solar PV and 1,150 MW of energy storage. This project, once completed, will be the largest energy storage facility in the world. In June 2025, the CEC approved it under a new fast-track permitting program (AB205). Gov. Gavin Newsom lauded the news in a press release, writing that the state is “moving faster than ever before” to build up clean energy.
3CE’s ranking is High.

Location
The Darden IV project is in Fresno County and will be grid-tied to the CAISO balancing authority. 3CE’s ranking is Medium.

Environmental Stewardship
In general, Intersect Power is a participant in the United Nation Global Compact, committed to preserving the planet for future generations. For the specific site in Fresno, Intersect is committed to mitigating any impact as they go through the CEQA process, which is still underway. The energy storage system will consist of the Tesla Megapack 2XL, using the less dense (and less susceptible to thermal heat High
High
High
Med

events) lithium iron phosphate (LFG) chemistry in outdoor, containerized units, with the latest thermal management system and controls.
3CE’s ranking is Medium.

Benefits Accrued to Underserved Communities
Intersect Power has developed the Darden Clean Energy Project's Community Benefits Plan, with a commitment to invest a large amount of money to Fresno County, focusing on education and economic opportunity, transportation, air quality, housing, and healthy foods. Since early 2024, Intersect has conducted multi-lingual outreach to the nearby community, along with proactive engagement with various community-based organizations, such as the Leadership Counsel for Justice and Accountability, Rural Communities Rising and the Central California Environmental Justice Network. 3CE’s ranking is High.

FISCAL IMPACT:

The fiscal impact of the proposed PPA for qualified renewable energy from the Darden IV Solar + Storage project will not exceed $319,000,000 over the term of the PPA.

CONCLUSION:

Approval of the Darden IV Solar + Storage project will meet about 5% 3CE’s load and provide renewable energy plus resource adequacy benefits.

ATTCHMENT(S):

1. PPA between IP Darden IV LLC and 3CE (Redacted)
Med
High

ii

5.2 Cooperation. ......................................................................................................... 44 ARTICLE 6 MAINTENANCE OF THE FACILITY ................................................................ 44

6.1 Maintenance of the Facility. ................................................................................ 44

6.2 Maintenance of Health and Safety. ...................................................................... 45

6.3 Shared Facilities ................................................................................................... 45 ARTICLE 7 METERING ........................................................................................................... 45

7.1 Metering. .............................................................................................................. 45

7.2 Meter Verification. ............................................................................................... 46

7.3 Scheduling Coordinator Metered Entity .............................................................. 46 ARTICLE 8 INVOICING AND PAYMENT; CREDIT ............................................................ 46

8.1 Invoicing. ............................................................................................................. 46

8.2 Payment................................................................................................................ 47

8.3 Books and Records. ............................................................................................. 47

8.4 Payment Adjustments; Billing Errors. ................................................................. 47

8.5 Billing Disputes. .................................................................................................. 47

8.6 Netting of Payments. ............................................................................................ 48

8.7 Seller’s Development Security. ........................................................................... 48

8.8 Seller’s Performance Security.............................................................................. 48

8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral ................ 49

8.10 Seller’s Financial Statements ............................................................................... 49

8.11 Buyer Financial Statements ................................................................................. 49 ARTICLE 9 NOTICES .............................................................................................................. 50

9.1 Addresses for the Delivery of Notices ................................................................. 50

9.2 Acceptable Means of Delivering Notice .............................................................. 50 ARTICLE 10 FORCE MAJEURE ............................................................................................. 50

10.1 Definition ............................................................................................................. 50

10.2 No Liability If a Force Majeure Event Occurs .................................................... 51

10.3 Notice ................................................................................................................... 51

10.4 Termination Following Force Majeure Event...................................................... 52 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ..................................................... 52

11.1 Events of Default ................................................................................................. 52

11.2 Remedies; Declaration of Early Termination Date. ............................................. 55

11.3 Termination Payment ........................................................................................... 55

11.4 Notice of Payment of Termination Payment ....................................................... 56

11.5 Disputes with Respect to Termination Payment .................................................. 56

11.6 Rights and Remedies Are Cumulative ................................................................. 56 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES ........ 57

12.1 No Consequential Damages. ................................................................................ 57

12.2 Waiver and Exclusion of Other Damages ............................................................ 57

iii
ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY .......................... 58

13.1 Seller’s Representations and Warranties ............................................................. 58

13.2 Seller’s Covenants ............................................................................................... 59

13.3 Buyer’s Representations and Warranties ............................................................. 59

13.4 General Covenants ............................................................................................... 60

13.4 Prevailing Wage. .................................................................................................. 60 ARTICLE 14 ASSIGNMENT.................................................................................................... 61

14.1 General Prohibition on Assignments ................................................................... 61

14.2 Collateral Assignment .......................................................................................... 61

14.3 Permitted Assignment by Seller........................................................................... 63

14.4 Buyer Limited Assignment. ................................................................................. 64 ARTICLE 15 DISPUTE RESOLUTION ................................................................................... 64

15.1 Governing Law. ................................................................................................... 64

15.2 Dispute Resolution. .............................................................................................. 65 ARTICLE 16 INDEMNIFICATION ......................................................................................... 65

16.1 Indemnification .................................................................................................... 65

16.2 Claim Notice ........................................................................................................ 65

16.3 Defense of Claims ................................................................................................ 66

16.4 Subrogation of Rights. ......................................................................................... 66

16.5 Rights and Remedies are Cumulative. ................................................................. 66 ARTICLE 17 INSURANCE ...................................................................................................... 67

17.1 Insurance .............................................................................................................. 67 ARTICLE 18 CONFIDENTIAL INFORMATION ................................................................... 68

18.1 Definition of Confidential Information ................................................................ 68

18.2 Duty to Maintain Confidentiality ......................................................................... 68

18.3 Irreparable Injury; Remedies ............................................................................... 69

18.4 Permitted Disclosure ............................................................................................ 69

18.5 Press Releases ...................................................................................................... 69 ARTICLE 19 MISCELLANEOUS ............................................................................................ 70

19.1 Entire Agreement; Integration; Exhibits .............................................................. 70

19.2 Amendments ........................................................................................................ 70

19.3 No Waiver ............................................................................................................ 70

19.4 No Agency, Partnership, Joint Venture or Lease ................................................. 70

19.5 Severability .......................................................................................................... 70

19.6 Mobile-Sierra ....................................................................................................... 70

19.7 Counterparts; Electronic Signatures .................................................................... 71

19.8 Electronic Delivery .............................................................................................. 71

19.9 Binding Effect ...................................................................................................... 71

19.10 No Recourse to Members of Buyer ..................................................................... 71

19.11 Forward Contract; Service Contract .................................................................... 71

iv

19.12 Change in Electric Market Design ....................................................................... 71

19.13 Further Assurances............................................................................................... 72 Exhibits:

Exhibit A Facility Description
Exhibit B Facility Construction and Commercial Operation Exhibit C Compensation
Exhibit D Scheduling Coordinator Responsibilities
Exhibit E Progress Reporting Form
Exhibit F-1 Form of Average Expected Energy Report
Exhibit F-2 Form of Monthly Delivery Forecast
Exhibit G Guaranteed Energy Production Damages Calculation Exhibit H Form of Commercial Operation Date Certificate Exhibit I-1 Form of Installed PV Capacity Certificate
Exhibit I-2 Form of Installed Battery Capacity Certificate Exhibit J Form of Construction Start Date Certificate
Exhibit K Form of Letter of Credit
Exhibit L Form of Guaranty
Exhibit M Form of Replacement RA Notice
Exhibit N Notices
Exhibit O Storage Capacity Tests
Exhibit P Storage Availability
Exhibit Q Operating Restrictions
Exhibit R Metering
Exhibit S Limited Assignment Agreement
Exhibit T Other Seller Commitments

3 “Baseline RA Deficiency Amount Cap” has the meaning set forth in Section 3.8(b). “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 for the Party sending a Notice, or payment, or performing a specified action. “Buyer” has the meaning set forth on the Cover Sheet.
“Buyer Bid Curtailment” means any curtailment of the Generating Facility arising out of or resulting from the manner in which Buyer or Buyer’s SC bids, offers or schedules the Generating Facility, the Energy or any Products, or in which Buyer or Buyer’s SC fails to do so, including a situation where all of the following occurs:
(a) the CAISO provides notice, including through ADS, to a Party or the Scheduling Coordinator for the Generating Facility, requiring the Party or the Scheduling Coordinator to deliver less Generating Facility Energy from the Generating Facility than the full amount of energy forecasted to be produced from the Facility for a period of time; and (b) for the same time period as referenced in (a), the notice referenced in (a) results from the manner in which Buyer or the SC schedules or bids the Generating Facility, Generating Facility Energy or Ancillary Services, including where the Buyer or the SC for the Facility:
(i) did not submit a Self-Schedule or an Energy Supply Bid for the MW subject to the reduction; or
(ii) submitted an Energy Supply Bid and the CAISO notice referenced in (a) is solely a result of CAISO implementing the Energy Supply Bid; or (iii) submitted a Self-Schedule for less than the full amount of Generating Facility Energy forecasted to be generated by the Generating Facility.

If the Generating Facility is subject to a Planned Outage, Forced Facility Outage, Force Majeure Event, or a Curtailment Period, during the same time period as referenced in (a), then the calculation of Deemed Delivered Energy in respect of such period shall not include any Generating Facility Energy that was not generated due to such Planned Outage, Forced Facility Outage, Force Majeure Event, or Curtailment Period.
“Buyer Curtailment Order” means the instruction from Buyer or Buyer’s SC to Seller to reduce Generating Facility Energy from the Facility by the amount, and for the period of time set forth in such instruction, which instruction shall be consistent with the Operating Restrictions, for reasons unrelated to a Planned Outage, Forced Facility Outage, Force Majeure Event affecting the Facility or Curtailment Order.
“Buyer Curtailment Period” means the period of time, as measured using current Settlement Intervals, during which Seller reduces Generating Facility Energy from the Generating Facility pursuant to or as a result of (a) Buyer Bid Curtailment, (b) a Buyer Curtailment Order, or (c) Buyer’s Default; provided, that the duration of any Buyer Curtailment Period shall be inclusive of the time required for the Generating Facility to ramp down and ramp up.

4 “Buyer’s Default” means a failure by Buyer (or its agents) to perform Buyer’s obligations hereunder, and includes an Event of Default of Buyer.
“Buyer’s WREGIS Account” has the meaning set forth in Section 4.10(a). “CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“CAISO Charges Invoice” has the meaning set forth in Exhibit D. “CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Operating Order” means “Operating Instruction” as defined in the CAISO Tariff.
“CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, 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.
“California Renewables Portfolio Standard” or “RPS” means the renewable energy program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. “Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of power that the Facility can generate, charge, discharge and deliver to the Delivery Point at a particular moment and that can be purchased, sold or conveyed under CAISO or CPUC market rules, or used for compliance purposes, including Resource Adequacy Benefits.
“Capacity Damages” has the meaning set forth in Exhibit B. “CEC” means the California Energy Commission, or any successor agency performing similar statutory functions.
“CEC Certification and Verification” means that the CEC has certified (or, with respect to periods before the date that is one hundred eighty (180) days following the Commercial Operation Date, that the CEC has pre-certified, as such date may be extended pursuant to Section

3.9) that the Generating Facility is an Eligible Renewable Energy Resource for purposes of the California Renewables Portfolio Standard and that all Generating Facility Energy delivered to the Delivery Point qualifies as generation from an Eligible Renewable Energy Resource. “CEC Precertification” means that the CEC has issued a precertification for the Generating Facility indicating that the planned operations of the Generating Facility would comply with applicable CEC requirements for CEC Certification and Verification.

5 “CEQA” means the California Environmental Quality Act. “Change in Law” means the enactment, adoption, promulgation, modification, suspension, repeal, or judicial determination, after the Effective Date, by any Governmental Authority of any Law, including a change in interpretation or enforcement of any existing Law. “Change of Control” means, except in connection with public market transactions of equity interests or capital stock of Seller’s Ultimate Parent, any circumstance in which Ultimate Parent ceases to own, directly or indirectly through one or more intermediate entities, at least fifty percent (50%) of the outstanding equity interests in Seller or otherwise ceases to retain the ability to control the decision making of Seller; provided that in calculating ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more intermediate entities shall not be counted towards Ultimate Parent’s ownership interest in Seller unless Ultimate Parent directly or indirectly owns at least fifty percent (50%) of the outstanding equity interests in each such intermediate entity; and (b) ownership interests in Seller owned directly or indirectly by any Lender (including any cash equity or tax equity provider) or permitted assignee or transferee thereof shall be excluded from the total outstanding equity interests in Seller.
“Charging Energy” means all Grid Energy delivered to the Storage Facility, as measured at the Storage Facility Metering Points by the Storage Facility Meter. “Charging Notice” means the operating instruction, and any subsequent updates, given by Buyer to Seller, instructing the Storage Facility to charge at a specific MW rate to a specified Stored Energy Level, including in connection with a Storage Capacity Test, provided that any such operating instruction shall be in accordance with the Operating Procedures and the CAISO Tariff.

For the avoidance of doubt, (i) any instruction to charge the Storage Facility pursuant to a Buyer Dispatched Test shall be considered a Charging Notice, and (ii) any Charging Notice shall not constitute a Buyer Bid Curtailment, Buyer Curtailment Order or Curtailment Order. “Claim” has the meaning set forth in Section 16.2(a).
“COD Certificate” has the meaning set forth in Exhibit B. “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute, including the rules or regulations promulgated thereunder, in each case as in effect from time to time. References to sections of the Code shall be construed to also refer to any successor sections.
“Collateral Assignment Agreement” has the meaning set forth in Section 14.2. “Commercial Operation” has the meaning set forth in Exhibit B. “Commercial Operation Date” has the meaning set forth in Exhibit B.

6 “Commercial Operation Delay Damages” means a daily amount equal to “Compliance Actions” has the meaning set forth in Section 3.11(b). “Compliance Expenditure Cap” has the meaning set forth in Section 3.11(b). “Confidential Information” has the meaning set forth in Section 18.1. “Construction Delay Damages” means a daily amount equal to

“Construction Start” has the meaning set forth in Exhibit B. “Construction Start Date” has the meaning set forth in Exhibit B. “Contract Capacity” means the sum of the Guaranteed Capacity and the Storage Contract Capacity.
“Contract Price” has the meaning set forth on the Cover Sheet and is each of the Renewable Rate and the Storage Rate.
“Contract Term” has the meaning set forth in Section 2.1(a). “Contract Year” means a period of twelve (12) consecutive months. The first Contract Year shall commence on the Commercial Operation Date and each subsequent Contract Year shall commence on the anniversary of the Commercial Operation Date. The last Contract Year shall end at midnight at the end of the day prior to the anniversary of the Commercial Operation Date. “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 Non-Defaulting Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace the Agreement; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating this Agreement.
“Cover Sheet” means the cover sheet to this Agreement, which is incorporated into this Agreement.
“CPUC” means the California Public Utilities Commission or any successor agency performing similar statutory functions.
“CPUC REC Compliance Penalty” means the then-applicable CPUC penalty per MWh of shortfall owed by Buyer for its failure to procure long-term RECs. “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 any third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then

9 “Discharging Energy” means all Energy delivered to the Delivery Point from the Storage Facility, as measured by the Storage Facility Meter.
“Discharging Notice” means the operating instruction, and any subsequent updates, given by Buyer to Seller, instructing the Storage Facility to discharge Discharging Energy at a specific MW rate to a specified Stored Energy Level, provided that [(a) any such operating instruction or updates shall be in accordance with the Operating Procedures and the CAISO Tariff, and (b) if, during a period when the Storage Facility is so instructed to be discharging, the Facility Energy delivered to the Delivery Point would exceed the Dedicated Interconnection Capacity, such “Discharging Notice” shall be deemed to be automatically adjusted to reduce the amount of Discharging Energy so that the Facility Energy delivered to the Delivery Point does not exceed the Dedicated Interconnection Capacity, until such time as Buyer issues a further modified Discharging Notice. For the avoidance of doubt, any Discharging Notice shall not constitute a Buyer Bid Curtailment, Buyer Curtailment Order or Curtailment Order. Any instruction to discharge the Storage Facility pursuant to a Buyer Dispatched Test shall be considered a Discharging Notice.
“Disclosing Party” has the meaning set forth in Section 18.2. “Early Termination Date” has the meaning set forth in Section 11.2(a). “Effective Date” has the meaning set forth on the Preamble. “Efficiency Rate” means the measured round-trip efficiency rate of the Storage Facility, expressed as a percentage, calculated pursuant to a Storage Capacity Test in accordance with Exhibit O by dividing Energy Out by Energy In.
“EIRP Forecast” means the current CAISO forecast for intermittent resources using relevant Generating Facility availability, weather, historical and other pertinent data for the applicable period of time.
“Eligible Intermittent Resource Protocol” or “EIRP” has the meaning set forth in the CAISO Tariff or a successor CAISO program for intermittent resources. “Electrical Losses” means, subject to meeting any applicable CAISO requirements, including, as applicable, all transmission or transformation losses between the Facility and the Delivery Point, including losses associated with (i) delivery of Generating Facility Energy to the Delivery Point, (ii) delivery of Charging Energy to the Storage Facility, (iii) for all purposes other than the calculation of Generating Facility Energy, conversion of Charging Energy into Discharging Energy, and (iv) delivery of Discharging Energy to the Delivery Point. If any amounts included within the definitions of “Electrical Losses” and “Station Use” hereunder are duplicative, then for all relevant calculations hereunder it is intended that such amounts shall not be double counted or otherwise duplicated.
“Eligible Renewable Energy Resource” has the meaning set forth in California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25741(a), as either code provision is amended or supplemented from time to time.

10 “Energy” means electrical energy measured in MWh.
“Energy In” has the meaning set forth in Exhibit O.
“Energy Out” has the meaning set forth Exhibit O.
“Energy Supply Bid” has the meaning set forth in the CAISO Tariff. “Event of Default” has the meaning set forth in Section 11.1. “Excess MWh” has the meaning set forth in Exhibit C.
“Excused Event” has the meaning set forth in Exhibit P. “Expected Commercial Operation Date” is the date set forth on the Cover Sheet by which Seller reasonably expects to achieve Commercial Operation. “Expected Construction Start Date” is the date set forth on the Cover Sheet by which Seller reasonably expects to achieve Construction Start. “Expected Energy” means the quantity of Expected Energy specified on the Cover Sheet that Seller expects to be able to deliver to Buyer as Generating Facility Energy during each Contract Year.
“Facility” means the Generating Facility and the Storage Facility. “Facility Energy” means the sum of Generating Facility Energy and Discharging Energy from the Storage Facility during any Settlement Interval or Settlement Period, net of Electrical Losses and Station Use, as measured by the Facility meter, which will be adjusted in accordance with CAISO meter requirements to account for Electrical Losses and Station Use. If any adjustments for Electrical Losses and Station Use included within the definitions of “Generating Facility Energy” and “Facility Energy” hereunder are duplicative, then for all relevant calculations hereunder it is intended that such amounts shall not be double counted or otherwise duplicated. “FERC” means the Federal Energy Regulatory Commission.
“Flexible Capacity” has the meaning set forth in the CAISO Tariff. “Flexible Resource Adequacy Benefits” means the attributes, however defined, of a resource that can be used to satisfy the flexible resource adequacy obligations of a load serving entity, including Flexible Capacity.
“Force Majeure Event” has the meaning set forth in Section 10.1(a). “Forced Facility Outage” means an unexpected failure of one or more components of the Facility or any outage on the Transmission System that prevents Seller from generating Energy, receiving Charging Energy, or making Facility Energy available at the Delivery Point and that is not the result of a Force Majeure Event.

12 “Generating Facility” means the solar photovoltaic generating facility described on the Cover Sheet and in Exhibit A, located at the Site and including mechanical equipment and associated facilities and equipment required to deliver Generating Facility Energy to the Delivery Point; provided, that the “Generating Facility” does not include the Storage Facility or the Shared Facilities.
“Generating Facility Energy” means, in any Settlement Interval or Settlement Period, the energy generated by the Generating Facility, net of Electrical Losses and Station Use, as measured by the Generating Facility Meter, which shall be adjusted to the extent necessary to account for Electrical Losses and Station Use, in accordance with the requirements of CAISO and Prudent Operating Practices, including WREGIS.
“Generating Facility Meter” means the CAISO-approved bi-directional revenue quality meter or meters (with a 0.3 accuracy class), along with a compatible data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Generating Facility Energy generated by the Generating Facility for the purpose of invoicing in accordance with Section 8.1.

For clarity, the Facility may contain multiple measurement devices that will make up the Generating Facility Meter, and, unless otherwise indicated, references to the Generating Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together.
“Governmental Authority” means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other 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 and CPUC; provided, however, that “Governmental Authority” shall not in any event include any Party. “Green Attributes” means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the generation of electricity from the Generating Facility and its displacement of conventional energy generation. Green Attributes include but are not limited to Renewable Energy Credits, as well as: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; and (3) the reporting rights to these avoided emissions, such as Green Tag Reporting Rights. Green Tags are accumulated on a MWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Facility Energy. Green Attributes do not include (i) any energy, capacity, reliability or other power attributes from the Facility, (ii) Tax Benefits associated with the construction or operation of the Facility and other financial incentives in the form of credits, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation, or any Renewable Energy Incentives, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular preexisting pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits

14 “Guaranty” means a guaranty from a Guarantor provided for the benefit of Buyer substantially in the form attached as Exhibit L or in such other form as is reasonably agreed to by the Parties.
“Imbalance Energy” means the amount of Energy, in any given Settlement Period or Settlement Interval, by which the amount of Facility Energy deviates from the amount of Scheduled Energy.
“Indemnifiable Loss(es)” has the meaning set forth in Section 16.1. “Indemnified Party” has the meaning set forth in Section 16.1. “Indemnifying Party” has the meaning set forth in Section 16.1. “Independent Evaluator” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer licensed in the State of California. “Initial Synchronization” means the initial delivery of Generating Facility Energy or Discharging Energy, as applicable, to the Delivery Point. “Installed Battery Capacity” means the maximum dependable operating capability of the Storage Facility to discharge electric energy, as measured in MW at the Storage Facility Meter, that achieves Commercial Operation, adjusted for Ambient Conditions on the date of the performance test, and as evidenced by a certificate substantially in the form attached as Exhibit I-2 hereto. “Installed PV Capacity” means the actual generating capacity of the Generating Facility, as measured in MW at the Delivery Point, that achieves Commercial Operation, adjusted for Ambient Conditions on the date of the performance test, and as evidenced by a certificate substantially in the form attached as Exhibit I-1 hereto. “Interconnection Agreement” means the interconnection agreement entered into by Seller or an Affiliate of Seller pursuant to which the Facility will (a) be interconnected with the Transmission System and (b) will have capacity rights equal or greater than the amount of the Contract Capacity, and pursuant to which Seller’s Interconnection Facilities and any other Interconnection Facilities will be constructed, operated and maintained during the Contract Term. “Interconnection Conditions” mean (a) the completion of the 500 kV Harlan switching station; (b) the installation of two (2) series capacitors at the Harlan switching station; and (c) the installation of a 500 kV shunt reactor at the Midway substation. “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 8.2. “Interim Deliverability Status” has the meaning set forth in the CAISO Tariff.