Agenda packet — Central Coast Community Energy (3CE) Operations Board, February 25, 2026 (part 1 of 2)

Operations Board of Directors
Special Meeting
February 25, 2026
3:00 P.M.

Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940

REMOTE LOCATION VIA TELECONFERENCE
Any interested parties or community members may attend, and participate in, the meeting at the following addresses where Board members may also join the meeting from:

County of Santa Cruz
701 Ocean Street,
Fifth Floor Redwood Room
Santa Cruz, CA 95060
City of Santa Cruz
City Hall
City Manager’s Conference Room
809 Center Street, Room 10
Santa Cruz, CA 95060
City of Hollister
City Hall
375 5th St
Hollister, CA 95023
City of Watsonville
City Hall
City Manager’s Office
275 Main Street, Suite 400
Watsonville, CA 95076
County of San Luis Obispo
Government Building
1055 Monterey St., D430
San Luis Obispo, CA 93408
City of San Luis Obispo
City Hall
990 Palm Street, Council Chambers
San Luis Obispo, CA 93401
City of Morro Bay
City Hall
595 Harbor Street
Morro Bay, CA 93442
City of Atascadero
City Hall
6500 Palma Ave
Atascadero, CA 93422
City of Grover Beach
City Hall
154 South 8th Street
Grover Beach, CA 93433
City of Santa Maria
City Hall Conference Room
110 East Cook Street
Santa Maria, CA 93454
County of Santa Barbara
County Administration Building
105 East Anapamu Street,
BOS Conference Room, Fourth Floor
Santa Barbara, CA 93101
Public may participate through ZOOM. For ZOOM participation please join by computer audio at:
https://us02web.zoom.us/j/83507087702
Or join by phone:
+1 669 900 6833 or +1 669 219 2599
Enter this Webinar ID Number: 835 0708 7702 when prompted. Please note there is no Participant Code, you will press # again after the recording prompts you.

You will be placed in the meeting as an attendee. To make a public comment:
 If joined by computer, please press the button to raise your hand  If joined by phone, please push *9 on your keypad
If you have anything that you wish to be distributed to the Board, please provide 15 copies to a member of 3CE staff or the Board Clerk, who will distribute the information to the Board members and staff.

The public may comment on the consent agenda and matters not listed on the agenda but within the Board's jurisdiction at the opening of the meeting. The Board may not take action at this meeting on any item not listed on the Agenda other than to refer the matter to staff or set it for a future meeting. The public may comment on a specific item listed on this agenda when the Board considers that item.

Speakers are limited to 3 minutes each.

In addition, members of the public may request and receive copies without undue delay of any documents that are distributed to the Board, unless there is a specific exemption under the Public Records Act that prevents the disclosure of the record. (Cal. Gov’t Code Section 54957.5) In compliance with Government Code Section 54957.5, non-exempt writings that are distributed to a majority or all of the Board in advance of a meeting and that relate to an agenda item will be made available at 3CE’s offices located at 70 Garden Court, Suite 300, Monterey, CA 93940 during normal business hours and are also available on the 3CE website located at: https://pub-3ce.escribemeetings.com/ REASONABLE ACCOMMODATIONS: In compliance with the Americans with Disabilities Act, any individuals who desire to request a reasonable accommodation or modification to observe or participate in the meeting may make such a request by sending an email to: [email protected] Copies of documents may be made in alternative formats, upon request. Requests for accommodations should be made no later than two (2) business days prior to the meeting to allow time for 3CE to address the request.

DISCLOSURE OF CAMPAIGN CONTRIBUTIONS: Pursuant to Government Code section 84308, members of the Board are disqualified and not able to participate in any agenda item involving contracts (other than competitively bid, labor, or personal employment contracts), franchises, discretionary land use permits and other entitlements if the Board member received more than $250 in campaign contributions from the applicant or contractor, an agent of the applicant or contractor, or any financially interested participant who actively supports or opposes the decision on the agenda item since January 1, 2023. Members of the Board who have received, and applicants, contractors or their agents who have made, campaign contributions totaling more than $250 to a Board member during the proceeding or for 12 months after a final decision is rendered in that proceeding, are required to disclose that fact for the official record of the subject proceeding. Disclosures must include the amount of the campaign contribution and identify the recipient Board member and may be made either in writing to the Clerk of the Board prior to the subject hearing or by verbal disclosure at the time of the hearing.

Welcome & Roll Call
Corrections or Additions
The Clerk will announce agenda corrections or proposed additions of emergency, urgency, or continued items, which will be acted on by the Board as provided in Section 54954.2 of the California Government Code.

CLOSED SESSION

1. Conference with Legal Counsel Re Potential Initiation of Litigation -- Government Code Section 54956.9(d)(4): Two matters

2. Real Property Negotiations-Government Code Section 54956.8

1. Property: 20 Ryan Ranch Road, Suite 214, Monterey, CA

2. Negotiators:

1. MHE Criterion: Thor Wiles

2. 3CE: Robert M. Shaw; Chris Cook

3. Under negotiations: Price and Terms

CONSENT CALENDAR

3. Approve minutes from the January 14, 2026, meeting of the Operations Board of Directors

4. FY 2025-26 Energy Programs Update

5. CPUC Regulatory Update

6. Financial Report for the period of October 1, 2025, through November 30, 2025

7. Investment Performance Report for the period of October 1, 2025, through December 31, 2025

REGULAR AGENDA

8. CEO Report
a. Community Advisory Council Report
b. State Legislative Update

9. Adopt Resolution Nos. OB-2026-04 and OB-2026-05 approving and authorizing the CEO to execute:
(a) an Amendment to the Energy Storage Agreement (ESA) with MRP Pacifica Marketing II, LLC (MRP) for the Panoche Hybrid Project as well as any necessary ancillary documents to delay the Guaranteed Commercial Operation Date by 14 months for a new Guaranteed Commercial Operation Date of June 1, 2027, in an amount not to exceed $168,000,000; and, (b) an Amendment to the ESA with MRP for the Midway Hybrid Project as well as any necessary ancillary documents to delay the Guaranteed Commercial Operation Date by 14 months for a new Guaranteed Commercial Operation Date of June 1, 2027, in an amount not to exceed $368,000,000

10. Adopt Resolution No. OB-2026-06 approving and authorizing the CEO to execute an amendment to the power purchase agreement (PPA) with ORNI 50, LLC for the Mammoth Casa Diablo IV Geothermal Project as well as any necessary ancillary documents to extend the term five additional years to 2037 and to increase the Not-to-Exceed amount by $28,800,000 for a total term of fifteen years and a total not to exceed amount of $70,300,000 Adjournment
Operations Board of Directors
Regular Meeting
January 14, 2026
10:30 A.M.

Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940
County of Santa Cruz
701 Ocean Street,
Fifth Floor Redwood Room
Santa Cruz, CA 95060
City of Santa Cruz
City Hall
City Manager’s Conference Room
809 Center Street, Room 10
Santa Cruz, CA 95060
City of Hollister
City Hall
375 5th St
Hollister, CA 95023
City of San Luis Obispo
City Hall
990 Palm Street, Council Chambers
San Luis Obispo, CA 93401
City of Watsonville
City Hall
City Manager’s Office
275 Main Street, Suite 400
Watsonville, CA 95076
City of Morro Bay
City Hall
595 Harbor Street
Morro Bay, CA 93442
City of Santa Maria
City Hall
110 East Cook Street, Council Chambers
Santa Maria, CA 93454
County of Santa Barbara
County Administration Building
105 East Anapamu Street,
BOS Conference Room, Fourth Floor
Santa Barbara, CA 93101

MINUTES
The meeting was called to order at 10:32am with 12 members attending from 10 locations and a quorum established.

Directors Present: Headquarters: Bauman, Hunter (arrived at 10:35am), Long County of Santa Cruz: Benson (arrived at 10:33am), LaGoe City of Santa Cruz: Chair Huffaker
City of Watsonville: Vides (arrived at 10:40am)
City of Hollister: Pia
City of Morro Bay: Craig
City of San Luis Obispo: Bronson, Vice Chair Lewis
City of Santa Maria: Rowlands, Wolfe
County of Santa Barbara: Imhof, Miyasato
Directors Absent: Colio-Warren, De La Rosa, Mendez, Pontes

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The Chair called for corrections or additions to the agenda.

Clerk announced that there were no corrections or additions.

The Chair called for public comment on the Consent Calendar and items not listed on the agenda.

The following individual(s) addressed the Board:
 Becy Steinbruner
The Chair closed the public comment period.

CONSENT CALENDAR
MOTION: Moved by Director Miyasato, Seconded by Director Pia to approve the Consent Calendar.

ACTION: The Motion Carried with a roll call vote:14/0/5 AYES: Bauman, Benson, Craig, Hunter, Imhof, LaGoe, Long, Miyasato, Pia, Rowlands, Wolfe, Vice Chair Lewis, Chair Huffaker
NOES: None
ABSENT: Colio-Warren, De La Rosa, Mendez, Pontes, Vides

1. Approved minutes from the November 12, 2025 special meeting of the Operations Board

2. Approved minutes from the November 12, 2025 regular meeting of the Operations Board

3. Authorized the CEO to execute Amendment No. 3 to the Standard Services Agreement with CalPine Energy Solutions, LLC, to amend the scope of work to include Application Program Interfaces (APIs) with no change to the not-to-exceed amount or contract term

4. Approved Renewal of Commercial Lease with SGSK, LLC for the premises at 70 Garden Court, Suites 300, 201, 202 in Monterey, California to extend the term for an additional six months ending June 30, 2026

5. FY 2025-26 Energy Programs Update

6. CPUC Regulatory Update

7. Financial Report for the period of October 1, 2025, through October 31, 2025

REGULAR AGENDA

8. CEO Report
a. Large Load Regulatory Advocacy Update
b. CPUC 2026 ERRA Decisions for PG&E and SCE — Impacts to CCA Customers The Chair opened the public comment period.

The following individual(s) addressed the Board:
 Becy Steinbruner
The Chair closed the public comment period.

ACTION: Discussion Item; No Action Required

Page 2 of 340 ends

9. Adopted Resolution No. OB-2026-01 approving and authorizing the CEO to execute: (1) a Power Purchase Agreement ("PPA") as well as any necessary ancillary documents with Monterey Regional Waste Management District for a term of up to three years and in a total not to exceed amount of $5,040,000; and, (2) up to two amendments, which do not change the total not to exceed amount, subject to approval by the General Counsel
The Chair opened the public comment period.

The following individual(s) addressed the Board:
 Becy Steinbruner
The Chair closed the public comment period.

MOTION: Moved by Director Vides, Seconded by Director Bronson to approve.

ACTION: The Motion Carried with a roll call vote: 15/0/4 AYES: Bauman, Benson, Craig, Hunter, Imhof, LaGoe, Long, Miyasato, Pia, Rowlands, , Vides, Wolfe, Vice Chair Lewis, Chair Huffaker
NOES: None
ABSENT: Colio-Warren, De La Rosa, Mendez, Pontes

10. Adopted Resolution No. OB-2026-02 approving and authorizing the CEO to execute Amendment No. 1 to the Power Purchase Agreement with IP Darden IV LLC, as well as any necessary ancillary documents, to:
(1) add five years to the delivery term for a total of 15 years; and (2) increase the not to exceed amount by $127,000,000 for a total not to exceed of $446,000,000 The Chair opened the public comment period.

The following individual(s) addressed the Board:
 Becy Steinbruner
The Chair closed the public comment period.

MOTION: Moved by Vice Chair Lewis, Seconded by Director Wolfe to approve.

11. Adopt Resolution No. OB-2026-03 to: (1) approve and authorize the CEO to execute a Power Purchase Agreement ("PPA") with Atlas Solar II, LLC, as well as any necessary ancillary documents for 100 MW of solar generation with a delivery term of fifteen years in an amount not to exceed $214,000,000; and, (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

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The Chair opened the public comment period.

The following individual(s) addressed the Board:
 Becy Steinbruner
The Chair closed the public comment period.

MOTION: Moved by Director Miyasato, Seconded by Director Hunter to approve.

Moved by Director Miyasato, Seconded by Director Hunter to approve.

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Staff Report Item 4
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Inaara Muhammad, Manager of Energy Programs SUBJECT: FY 2025-26 Energy Programs Update
DATE: February 25, 2026
RECOMMENDATION:

Receive an update on 3CE’s FY 2025-26 Energy Programs.

BACKGROUND:
3CE’s Energy Programs support 3CE’s mission by serving the Central Coast community with incentives to engage in electrification initiatives, strengthen the local economy, and reduce greenhouse gas emissions. The Energy Programs portfolio has undergone several iterations to improve community-wide accessibility and strengthen participation for priority communities. Currently, 3CE offers 10 programs and two pilots to support residential, commercial, and public agency electrification efforts in the transportation, building, and agricultural sectors.

DISCUSSION/ANALYSIS:

As part of 3CE’s commitment to customers, 3CE staff continually evaluate Energy Programs’ performance by tracking several key indicators and using this analysis to improve the impact of 3CE’s Energy Programs.

The first quarter of FY 2025-26 showed increased participation in 3CE's Energy Programs, largely due to federal funding decisions, and new member agencies engaging in electrification planning. To maximize programs’ accessibility to all customers, and to continue program administration through the end of the fiscal year, rebates have been adjusted for 3CE’s Electrify Your Ride and E-bus programs effective January 1. Furthermore, 3CE has introduced a new rebate type for bidirectional chargers, which allows 3CE to collect data relevant to the design of future energy optimization programs.

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The table below highlights the agency’s programs’ fiscal impact so far through mid-January 2026.

IMPACT FY 2025-26 (to date)
GHG reductions1 Over 2,128 MT CO2e
Load Shifted Over 3.7 MWh daily
Heat Pump Water Heater & HVAC Units 102 units
Induction Cooktops 2 units
All-Electric New Construction 43 units
E-Buses 7 E-buses
Electric Vehicles 474 EVs
EV Chargers 366 EV Chargers
Ag Equipment 2 rebates
Total Incentives Distributed $3.3 million
Table 1: Energy Programs Impact in FY 2025-26 (to date) 3CE’s Energy Programs Portfolio Analysis Update (Attachment 1) provides a detailed look at individual Energy Programs in FY 2025-26. The update shares a variety of program performance metrics, including customer participation, all-electric purchases and installations, reduced greenhouse gas emissions, and performance on equity (e.g., incentives and support for income-qualified customers). The update also describes strategic initiatives currently underway to enhance 3CE’s Energy Programs portfolio through pilots and new program offerings.

Below are several ongoing strategic initiatives across Energy Programs’ focus areas.

Transportation Electrification
Technical Assistance: On January 12th, 3CE published a Request for Proposals seeking a vendor to provide technical assistance for electric vehicle planning and EV charger development. The improved technical assistance service is planned to launch at the beginning of FY 2025-26 to support commercial, multifamily, and member agency customers in EV and EV charger planning and procurement.

Building Electrification
Electrify Your Home: 3CE is developing a virtual home assessments pilot to enhance the Electrify Your Home program. The pilot will provide residential customers with personalized reports on home energy use, electrification opportunities, and available rebates. Vendor contract negotiations are ongoing with a recommendation to the Operations Board anticipated in the third quarter of FY 2025-26.

1 Does not currently include estimated GHG reductions through 3CE’s Residential Battery Rebate Program.

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Agricultural Electrification
Ag Electrification Program: 3CE is actively reviewing its Ag Electrification Program in collaboration with the Community Advisory Council (CAC). At the February CAC meeting, 3CE staff presented findings from nine focus groups held in November and December, along with preliminary new program concepts, including additional rebates, technical assistance, and equipment demonstration events. These concepts will continue to be developed through a second round of focus groups to be held in March and April across 3CE’s service area.

Energy Optimization
Distributed Energy Resources Management System (DERMS) / Virtual Power Plant (VPP):
3CE staff are actively reviewing proposals for a vendor to provide a DERMS platform and related implementation services. The DERMS, which has a planned launch at the end of FY 2025-26, will serve as a core platform for 3CE’s VPP and Distributed Energy Resources (DER) pilots, and integrate various assets including thermostats, heat pumps, and battery systems.
3CE’s customer relationship management system, which was implemented last fiscal year, has enabled energy programs to remain open as 3CE transitions between fiscal years. 3CE’s website has been updated to communicate any changes to programs effective at the start of the fiscal year and calendar year.

FISCAL IMPACT:

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

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

ATTACHMENT(S):

1. 3CE Energy Programs Analysis Update

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3CE’s Energy Programs Update
This report provides updates on Central Coast Community Energy’s (3CE) Energy Programs and Pilots. 3CE continually tracks energy programs’ growing participation and impact in reducing greenhouse gas emissions and supporting the local economies in which 3CE customers live and work.

The table below highlights the agency’s programs’ impact through the start of Q2 2026.

IMPACT FY 2025-26 (to date)
GHG reductions1 Over 2,128 MT CO2e
Load Shifted Over 3.7 MWh daily
Heat Pump Water Heater & HVAC Units 102 units
Induction Cooktops 2 units
All-Electric New Construction 43 units
E-Buses 7 E-buses
Electric Vehicles 474 EVs
EV Chargers 366 EV Chargers
Ag Equipment 2 rebates
Total Incentives Distributed $3.3 million
3CE’s energy programs’ impact continues to increase, serving 3CE’s mission to support all customers in their transition to renewable resources, to drive GHG emissions reductions, and to promote local economic growth across the Central Coast. 1 Does not currently include estimated GHG reductions through 3CE’s Residential Battery Rebate Program.

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Transportation Electrification

1.Electrify Your Ride
Over 2,015 MTCO2e avoided thus far
Equal to 470 gas cars off the road for one year
Program Purpose & Overview
Electrify Your Ride (EYR) is 3CE’s flagship transportation program, intended to reduce GHG emissions and increase EV adoption by providing residential and commercial customers with rebates for EV purchases and EV charger installations. Program funds are available first come, first served. Enhanced incentives are available for CARE/FERA customers, or income-qualified participants. Technical assistance is available for multifamily and commercial customers planning EV charging projects.

Program Design Updates
Jan. 1st, 2026: To maximize programs’ accessibility for all customers and to continue program administration through the end of the fiscal year, rebates have been adjusted. 3CE has introduced a new rebate type for bidirectional chargers, which can help customers power their homes and shift energy use to less expensive times of the day by drawing power from their electric vehicle’s battery.

Over $26M in all-electric purchases
supported
Over 786 applications approved
across all 5 counties
Figure 1.1: % of applications across counties
1,158 EV, EV Charger, and Electrical
Upgrades supported this fiscal year
Figure 1.3: Rebates approved by incentive type
5 commercial and multi-family customers
receiving technical assistance
38% rebates to income-qualified customers
Figure 1.2: Incentive distribution to income-qualified
customers

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Transportation Electrification

2.Electric Bus (E-bus) Program
Over 49 mtCO2e avoided thus far
Program Purpose & Overview
3CE’s Electric Bus program enables public sector electrification by incentivizing all-electric buses throughout the 3CE service area. The program reduces GHG emissions and harmful pollutants from public transportation serving students, farmworkers, and community members. Program funds are available first come, first served, and can be assigned to a manufacturer. All funded E-buses must be domiciled and charged at 3CE-enrolled sites.

Program Design Updates:

January 1st, 2026: To maximize programs’ accessibility to all customers and to continue program administration through the end of the fiscal year, rebates have been adjusted to support two tiers of e-bus types.
2 school districts & 1 transit agency
supported cross two counties
7 all electric bus supported

86% of buses to a Title 1 school or
disadvantaged community (DAC)
Figure 2.1: % buses for DAC/Title 1 School, by county
$4M in all-electric
purchases enabled through
3CE’s E-Bus program
Figure 2.2: Rebates approved by e-bus type
1 0
6 0
1 2
3 4
5 6
7 Transit Bus Shuttle Van School Bus - Type
C/D

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Transportation Electrification

3.Plan, Charge, and Electrify Your Fleet
12 Member Agencies committed to zero-emission fleet planning and implementation
Program Purpose & Overview
3CE’s Fleet Electrification programs reduce GHG emissions from medium and heavy-duty fleets by providing Member Agencies with incentives and technical assistance for zero-emission fleet planning and implementation at 3CE-enrolled sites. Program funds are available first come, first served.

Incentive Offerings:
- PLAN: Plan Your Fleet (PYF) provides no-cost technical assistance including fleet replacement planning, project design and engineering, EV charging recommendations, and funding plans.
- CHARGE: Charge Your Fleet (CYF) provides rebates for Level 2 EV Chargers and Level 3 DC Fast Chargers purchase and installation.
- ELECTRIFY: Electrify Your Fleet (EYF) provides rebates for electric vehicle purchase or lease, covering light, medium, and heavy-duty vehicles, plus electric motorcycles.

Program Design Updates
Oct. 1st, 2025: To streamline access and expand funding opportunities, 3CE has combined fiscal-year rebate caps for the Electrify Your Fleet and Charge Your Fleet programs. Member Agencies are eligible for up to $300k in total funding for the purchase or installation of electric vehicles, EV supply equipment, and associated infrastructure.
7 cities and
counties
Developing Fleet
Replacement
Plans
9 cities and
counties
Developing charging
infrastructure plans
and/or site designs
Over $256k in all-electric purchases and
installations supported
Figure 3.1: rebates distributed by incentive type
Cities and Counties engaged in zero-emission fleet
planning and implementation include…

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Transportation Electrification

4.EV Charger Asset Pilot
Nine Level 2 and two DC Fast Chargers planned across three pilot sites Program Purpose & Overview
3CE’s EV Charger Asset Pilot addresses the need for additional Electric Vehicle Supply Equipment (EVSE) and infrastructure across the 3CE service area through the deployment of a phased EV Charger asset ownership program. The pilot examines charger asset ownership as a potential step in advancing equitable transportation electrification solutions across 3CE’s service area. The pilot encompasses Level 2 and Level 3 DC Fast Charger design, construction, and operation across three categories: community resilience hubs, corridor charging, and EVSE at Member Agency sites.

Pilot Updates
Workplace Charging at 3CE’s San Luis Obispo Office: The EV chargers are operational and actively used by San Luis Obispo office staff. Employee access to charging began in September 2025. The project remains in ongoing pilot testing, with staff usage patterns and performance data being monitored to inform future workplace charging decisions.

Workplace Charging at 3CE’s Soquel Office: The EV chargers are fully operational and support day-to-day staff charging needs. Employee access began in November 2025. The project is in ongoing pilot testing, with utilization and operational performance being tracked to evaluate program outcomes.

Public Charging in Santa Maria: On October 21, the City of Santa Maria City Council approved the Site Lease License Agreement for 3CE’s Public EV Charger Asset Pilot. Following this approval, the project kicked off on December 10 and is moving into the construction phase.

The project includes Level 2 and DCFC EV charging stations located near the Santa Maria Public Library, with completion anticipated by Q3 of FY 2025–26.

Future Pilot Sites: 3CE staff are exploring additional pilot locations for EV charging in consideration of designing and implementing an EV Charging Master Plan. Additional sites will further inform 3CE’s examination of agency-managed infrastructure to expand access to EV charging throughout the Central Coast.
10 ports
across 6 Level
2 chargers
100% total
charger
uptime

3.42 t GHG
emissions avoided
Equivalent to planting 88
trees
50% increase
in staff EV
adoption

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Building Electrification

5.Electrify Your Home Program
Over 64 MT CO2e avoided, equal to over
8 homes’ energy use for one year
Program Purpose & Overview
3CE's Electrify Your Home Program (EYH) promotes residential building decarbonization by replacing fossil-fuel powered water heating, space heating and cooking equipment with high-efficiency electric and heat pump appliances for single family and multifamily properties.

Applications are open to contractors and homeowners with program funds available on a first come, first served basis.

Program Design Updates
October 1, 2025: The program’s next iteration relaunched in-house, and includes design enhancements developed in collaboration with the Community Advisory Council. These included expanded contractor eligibility, new eligible appliances, and a customer-focused application.

Moreover, bringing program administration in-house will leverage 3CE staff expertise to improve customer experience and streamline program operations
Figure 5.2: Income-qualified participants by county
8% of rebates distributed to income-qualified customers 118 rebates in fiscal year 2025-26
Figure 5.1: Rebates approved by incentive type
EYH supported over 18 unique, local installers across five counties to complete over $1M in all-electric and heat pump installations

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Building Electrification

6.New Construction Electrification Program
43 new, all-electric housing units built across 3CE’s service area Program Purpose & Overview
3CE’s New Construction Electrification Program (NCEP) reduces GHG emissions by incentivizing the development of all-electric housing in 3CE’s service area. NCEP provides housing developers incentives to build all-electric housing projects including water heating, space heating, and cooking appliances. Enhanced incentives are available for affordable housing projects and single-family disaster rebuilds. Program funds are available first come, first served.

Figure 6.1: all-electric housing units incentivized by county NCEP supported 4 local contractors
to build all-electric housing across
3CE’s service area
36 All-electric Affordable
Housing Units
5 1 1
Accessory Dwelling
Units
Disaster Rebuild Market Rate Housing

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Building Electrification

7.Reach Codes Program
Codes adopted by 3CE’s cities & counties are
anticipated to impact 310 permits per year
Program Purpose & Overview
3CE’s Reach Code program reduces GHG emissions from the built environment by providing technical assistance to 3CE Member Agency jurisdictions to adopt and codify “Reach Codes” that promote building electrification and EV infrastructure. Technical assistance includes customized code language development, staff presentations, board advocacy, and code enforcement tool creation.

Implemented reach codes update local building codes and ordinances for new residential and commercial construction, and major remodel projects, and align with the 2022 California statewide building code update.

Program Design Updates
3CE is closely monitoring impacts from recent legislative decisions and exploring available support opportunities.

CODE TYPE & IMPACT
Single Family Existing Buildings- Flexpath:

Flexible menu of energy efficiency, electrification, and electric readiness measures for major renovations
Single Family Existing Buildings- Air
Conditioning to Heat Pump:

Property owners follow energy efficiency measures or
install heat pump technology at time of replacement
3 Reach Codes in process,
adopted or codified across 2
cities
Figure 7.2: Types of Reach Codes pursued
Figure 7.1: # of codes by city
Cities and Counties engaged in reach code
planning and implementation include…

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Agricultural Electrification

1.Agricultural (Ag) Electrification Program

23.6 tCO2 avoided
Program Purpose & Overview
3CE’s Agricultural (Ag) Electrification program avoids GHG emissions associated with fossil fuel-powered agricultural equipment by incentivizing the purchase of all-electric equipment alternatives. The program provides rebates to 3CE customers in and/or supporting the agricultural industry for all-electric equipment purchases to support business operations. Enhanced incentives are available for small businesses and businesses that experienced loss/damage of equipment due to declared natural disasters. Customers are eligible for up to two rebates per fiscal year, and program funds are available first-come, first-served.

Program Design Updates
As part of its review of the Agricultural Electrification Program, 3CE staff hosted nine focus groups in November and December 2025. Agricultural stakeholders from across the service area shared feedback on barriers to electrification and identified opportunities for additional support, including enhanced rebates, technical assistance, and demonstration projects. Staff will present key takeaways and potential program improvements at the Community Advisory Council meeting in February.
100% of rebates to small businesses
3CE incentives leveraged for over $12,000 in all-electric purchases including… Figure 8.2: % rebates to small businesses by county

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Energy Optimization

2.Residential Battery Rebate Program
Over 3.7 MWh of load shifted daily
during peak hours across 3CE service area
Program Purpose & Overview
3CE’s Residential Battery Rebate Program achieves load shifting during peak hours through rebates for the purchase and installation of residential, behind-the-meter battery systems. The program helps solar and non-solar customers manage energy consumption, respond to price signals, and reduce demand during net peak hours. Program funds are available first-come, first-served.

Customers enrolled in NEM 2.0 who elect to transition to NBT early, CARE/FERA-enrolled customers, and customers designated as medical baseline are eligible for enhanced incentives.

Batteries must be programmed to discharge 50% of capacity daily between 4 p.m. and 9 p.m.

Program Design Updates
December 2025: Staff introduced Evergreen connect links, which allow all customers to connect their batteries to 3CE’s load shift tracking without waiting for a unique link. This new feature is intended to reduce application processing time and provide streamlined customer experience.

Figure 9.1: daily load shift during peak hours
144 applications across all five counties
Figure 9.2: % participation by county
18% of applications from CARE/FERA or
Medical Baseline enrolled customers
128 customers using scheduling
assistance
Over 35 local
contractors actively
installing battery systems
for 3CE customers

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Energy Optimization

10. Hourly Flex Pricing Pilot 1 & 2
Over 16,000 MWh annual load enrolled
Program Purpose & Overview
3CE’s Hourly Flex Pricing (HFP) Pilot offers customer savings and operational benefits to agricultural, residential, and commercial 3CE customers through real-time, dynamic price signals.

In partnership with PG&E, both Pilot 1 (agricultural) and Pilot 2 (commercial and residential) offer a variety of Automation Service Providers (ASPs) to help enrolled customers optimize load in response to hourly price signals. Expanded Pilot 1, implemented in partnership with Polaris Energy Services, also includes system reliability benefits for agricultural customers through incentivized equipment automation. HFP Pilots 1 and 2 are currently in their first year of implementation. 74% of annual load enrolled from
commercial meters
Figure 10.1: load enrolled by customer type
80 meters across all three customer
classes
Figure 10.2: pilot participation by customer type

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Staff Report Item 5
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Jerri Strickland, Director of Regulatory Affairs and Compliance SUBJECT: CPUC Regulatory Update
DATE: February 25, 2026
RECOMMENDATION:

This recommends the Operations Board receive the attached CPUC Regulatory Update.

DISCUSSION/ANALYSIS:

Please find attached 3CE’s Regulatory Update, providing the latest information on the following:
 Resource Adequacy (RA)
 Demand Flexibility
 Demand Response (DR)
 Integrated Resource Planning (IRP)
 Renewables Portfolio Standard (RPS)
 Provider of Last Resort (POLR) and Emergency Transition Planning  Interconnections
 PG&E Rule 30 Application for Transmission Service
 Improvements to Climate Credit
 Integrated Energy Policy Report (IEPR)
FISCAL IMPACT:

No financial impact by receiving this report.

CONCLUSION:

This is an informational item only.

ATTACHMENT(S):

Regulatory Update

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Operations Board Update
February 12, 2026

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Table of Contents
REGULATORY UPDATE .........................................................................................................................................................3 Resource Adequacy (RA).................................................................................................................................................3 Demand Flexibility..............................................................................................................................................................3 Demand Response (DR)....................................................................................................................................................4 Integrated Resource Planning (IRP)...........................................................................................................................4 Renewables Portfolio Standard (RPS)........................................................................................................................5 Provider of Last Resort (POLR) and Emergency Transition Planning..........................................................6 Interconnections .................................................................................................................................................................6 PG&E Rule 30 Application for Transmission Service...........................................................................................7 Improvements to the Climate Credit...........................................................................................................................7 Integrated Energy Policy Report (IEPR)....................................................................................................................8

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REGULATORY UPDATE
Resource Adequacy (RA) – R.25-10-003
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.

Status
On December 12, the Commission issued a formal scope and schedule for the new RA proceeding. Track 1 will consider highest-priority refinements to the SOD program, including consideration of an hourly load obligation trading mechanism that 3CE has strongly supported due to its potential ratepayer affordability benefits. Track 1 will also consider changes to resource accreditation, including LDES and UCAP frameworks. 3CE worked with CalCCA to develop Track 1 proposals for RA program refinements, recommending changes to improve how data center load is considered in RA obligations and to widen the pool of resources that count for RA requirements.

Separately, the Energy Division will issue a report on transactability issues on February 6 to inform proposals related to hourly load obligation trading due February 20.

Next Steps
3CE attend workshops held on February 10 and 11, where parties will present their Track 1 proposals. Following this workshop, there will be another opportunity for parties to submit and present proposals specifically related to the issue of transactability. 3CE will review all Track 1 proposals and continue to advocate for modifications to the compliance program that balance grid reliability with affordability. Comments on all Track 1 proposals are due March 6, with a proposed decision scheduled for issuance in May.

Demand Flexibility – R.22-07-005
Issue
The CPUC opened the Demand Flexibility Proceeding in 2022 to update the Commission’s rate design principles in order to facilitate demand flexibility to improve reliability and advance the state’s climate and affordability goals.

The proceeding was composed of two tracks: Track A focused on the implementation of base services charges as mandated by AB 205, while Track B was dedicated to the development and expedited adoption of demand flexibility tariffs and dynamic pricing for large IOUs.

Status
On January 15, 2026, The Income Verification Process Working Group released its final report ordered by D.24-05- 028 in Track A of the proceeding. The group’s proposal suggests improvements to the income-graduated fixed charge, now known as the Base Services Charge, which restructures residential customer bills by shifting the recovery of some fixed costs into a line item on the delivery portion of the bill. The first iteration of the Base Services Charge established three tiers of charges based on income. Tier 1 for customers enrolled in the California Alternate Rates for Energy (CARE) program, Tier 2 for customers enrolled in the Family Electric Rate Assistance (FERA) program or who live in deed-restricted affordable housing, and Tier 3 for all other customers. The main objective of the working group’s report was to evaluate and suggest a feasible, cost-effective, and accurate means for subdividing the initial Tier 3 group of residential customers, to separate moderate-income customers from higher-income customers. The report recommends the Commission utilize U.S. Census Bureau Survey data to initially classify customers not enrolled in affordability programs into high- and moderate-income tiers based on census tract median income.

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Next Steps
The Base Services Charge was first implemented on Southern California Edison (SCE) customer’s bills in late 2025, while Pacific Gas and Electric (PG&E) customers will begin to receive bills featuring the charge starting in March of this year. The working group’s report was served on the Demand Flexibility service list, in R.22-07- 005, which is now closed. The Commission will continue to consider any changes to income-graduated fixed charges and the working group’s proposal in a successor Demand Flexibility rulemaking.

Demand Response (DR) – R.25-09-004
Issue
Demand response (DR) refers to programs and rate structures that encourage customers to adjust or reduce their electricity usage in response to price signals, grid conditions, or market incentives. By shifting consumption away from peak periods or reducing load during times of grid stress, DR helps maintain system reliability, reduce the need for costly peaking resources, and integrate higher levels of renewable generation. Well-designed DR programs also empower customers to take a more active role in managing their energy use while contributing to California’s clean energy transition and greenhouse gas reduction goals. On September 29, 2025, the Commission opened this proceeding to enhance demand response in California, along with a staff report proposing to update demand response guiding principles based on predictability, reliability, consistency, cost-effectiveness, and to support the State's energy and environmental goals.

Status
The Commission has yet to issue a scoping ruling; however, parties in the proceeding have been asked to respond to a staff proposal to extend the marketing funding for the Flex Alert Program in 2026. A Flex Alert is an appeal for Californians to voluntarily reduce their electricity use to help maintain a stable, reliable power grid. On January 20, CalCCA in coordination with 3CE submitted comments in response to the proposal which seeks to keep the current annual budget of $22 million and extend the current contract through 2026. Extending the current contract, as soon as possible, allows the marketing campaign to be in place to contribute to grid stability as demand for electricity is increasing in California. Given the effectiveness of the program, the comments support the extension of funding for 2026, but recommend the Commission initiate an analysis of the program’s annual spend to inform stakeholders of any future versions of the Flex Alert Marketing Program.

Next Steps
The Commission will issue a formal scope and schedule for the proceeding in Quarter 1 of 2026, based on party comments and recommendations presented at the prehearing conference on December 16, 2025. Key issues for 3CE include pursing systems and processes that support timely and consistent CCA access to customer data, ensuring CCA customers have equitable access to demand response resources, and ensuring new polices or programs do not encroach on CCA rate and program autonomy.

Integrated Resource Planning (IRP) – R.20-05-003; R.25-06-019 Issue
Integrated Resource Planning (IRP) is the CPUC’s greenhouse gas (GHG) reduction planning program. LSEs must submit IRPs every two years demonstrating that planned future procurement will produce GHG emissions below an assigned benchmark while contributing to a resource fleet that meets sector-wide GHG targets and maintaining grid reliability. Previous IRP cycles have produced three procurement mandates, which apply to 3CE and other CCAs. On April 18, the CPUC issued an Amended Scoping Memo stating its intent to address additional issues in the IRP proceeding, including implementation of Assembly Bill (AB) 1373 which allows the Commission to request that the Department of Water Resources (DWR) serve as a central procurement entity (CPE) for certain

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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
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.On January 14, the CPUC issued a proposed decision (PD) that, if adopted, would order the procurement of 2,000 MW by 2030 and 4,000 MW by 2032, with the requirement that only 50% of the capacity can be provided by storage resources. 3CE’s total share of this procurement is 175 MW; 58 by 2030 and 117 MW by 2032. The two tranches of procurement proposed is an improvement to the previous Ruling's recommendation for annual procurement requirements, and is responsive to CalCCA’s arguments developed in coordination with 3CE that annual requirements can cause market disruptions and burdensomely impact load serving entities. Overall, the PD generally maintains the same compliance and enforcement requirements as previous MTR orders but offers less compliance flexibility. 3CE will advocate for reasonable modifications to the procurement order in comments due February 3, given concerns that the proposed storage cap and lack of alternative compliance pathways may lead to the over-procurement of solar resources at a cost to ratepayers.

Separately, the Commission also issued a long-awaited Ruling that sets a new deadline of June 1, 2026, for individual Integrated Resource Plan submissions and provides information about the IRP requirements, including certain assumptions that 3CE must use as a starting point for its plan development. While some of the inputs and assumptions have not yet been finalized, the Ruling does establish the load forecasts and associated GHG emissions benchmarks that 3CE is required to use. 3CE will develop at least one conforming portfolio that achieves GHG emissions equal to or less than 3CE’s proportional share of the 25 million metric tons (MMT) by 2035 and 8 MMT by 2045 GHG target.

Next Steps
The Commission will vote on the proposed procurement order on February 26. The PD indicates that the Commission will continue its consideration of a long-term procurement program to replace ad hoc procurement orders. 3CE will continue to engage in the IRP proceedings and monitor for updates to its long-term procurement and planning requirements. 3CE’s next mid-term reliability procurement compliance filing deadline is June 1, concurent with the new IRP filing deadline.

Renewables Portfolio Standard (RPS) – R.24-01-017
Issue
The CPUC’s Renewables Portfolio Standard (RPS) proceeding monitors compliance by retail sellers, including CCAs, within California’s RPS program which requires that 60% of all electricity retail sales be served by renewable resources by 2030 and at least 65% of the procurement a retail seller counts toward the RPS requirements be from long-term contracts. The CPUC initiated a new rulemaking to continue implementation of the RPS program, including reviewing RPS procurement plans, providing tools for RPS analysis and reporting, assessing RPS compliance, and integrating new legislative mandates into the RPS program.

Status
On January 15, the Commission extended the deadline of the RPS proceeding by two years to January 25, 2028.

This will allow the current proceeding to include the review and approval of 2026 and 2027 RPS Procurement Plans, along with any other matters that arise related to the RPS program. Separately, on January 26, 3CE submitted its final 2025 RPS Procurement Plan. In response to a Commission Decision issued at the end of 2025, 3CE’s final plan contains additional information on its transportation electrification forecast and how it compares

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to the state’s forecast.

Next Steps
Having completed its 2025 RPS Procurement Plan, 3CE now awaits a Ruling that identify issues and set the schedule of review for 2026 RPS Procurement Plans.

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
On January 16, the Commission adopted a Decision that closes the POLR proceeding and sets guidelines for non-IOU LSEs to seek POLR status through an application process. The Decision contains an appendix of questions for any non-IOU LSE seeking POLR status to address in its application based on the criteria of SB 520, including questions on the services that will be provided, the capabilities of the entity, and the regulatory authority the Commission will have over the applicant.

Next Steps
Now that the POLR proceeding is closed, 3CE will monitor for any applications for POLR status submitted by non-IOU entities pursuant to the recent Decision. 3CE’s next FSR posting is due by July 1.

Interconnections – IPE 5.0
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 Interconnection Process Enhancements (IPE) 5.0 initiative, focused on modifications to recent interconnection reforms aiming to prioritize and accelerate the onboarding of viable projects capable of meeting near-term reliability needs and state policy objectives.

Status
On December 22, the CAISO posted a final proposal for the current IPE initiative, which includes a pathway to allow Energy-Only (EO) projects that have achieved commercial operations to seek deliverability provided they have a power purchase agreement with an LSE. Without deliverability, resources cannot provide Resource Adequacy (RA) capacity. This represents a positive shift from CAISO’s initial proposal, which declined to open a pathway for EO projects to seek and receive deliverability, resulting from 3CE’s advocacy through CalCCA that it is crucial to widen the pool of resources that can provide RA value. However, the CAISO indicates that the EO projects pursuing this path must submit a nonrefundable fee and will not receive TPD if they are behind a constraint. In addition to this change, the final proposal makes minor refinements to the interconnection reforms adopted by the previous IPE initiative. 3CE assisted CalCCA in the development of comments on the final proposal, recommending that the CAISO consider pathways for EO projects behind constraints to seek deliverability,

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particularly where projects have commitments with LSEs or are aligned with policy needs.

Next Steps
CAISO will present the IPE final proposal to its Board of Governors in March for approval. The next interconnection cluster window is anticipated to open in October. As with the prior cluster, 3CE will have the opportunity to participate in the CAISO’s reformed LSE scoring process. Through this process, 3CE can elect to allocate points to maximize the success of 3CE’s contracted and under-development projects and projects that align with the long-term needs and goals of the communities that 3CE serves.

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
After an unexpected suspension of the Rule 30 procedural schedule, the Commission issued a Ruling that determines additional record development is necessary before a decision can be made on PG&E’s application. The Ruling requests party feedback on several questions related to cost causation, financing, apportionment of facility costs, and refund processes.

Next Steps
After an additional round of testimony limited to the financing/cost questions posed by the Commission, parties will have an opportunity to submit reply briefs on all issues relevant to the Rule 30 application on April 24. 3CE will continue to engage in the proceeding through CalCCA to advocate for data transparency and equitable customer treatment.

Improvements to the Climate Credit – R.25-07-013
Issue
The California Cap-and-Trade program requires power plants, fuel providers, and large industrial facilities that emit greenhouse gases (GHGs) to retire allowances to cover their emissions. The sale of these allowances is used to benefit Californian ratepayers by funding the California Climate Credit, a twice-per-year lump-sum bill credit automatically provided to all bundled and unbundled residential electric customers. On July 28, 2025, the Commission initiated a rulemaking to consider ways to improve the effectiveness of the Climate Credit in support of customer affordability. The preliminary scope of the rulemaking includes potential modifications to customer eligibility criteria, distribution timing, and customer outreach related to the Climate Credit.

Status
On January 20, 2026, the California Air Resources Board (CARB) held a public hearing to consider proposed amendments to the regulation for the California Cap on GHG emissions and market-based compliance mechanisms. Staff put forth a number of amendments to the Cap-and-Invest regulation including the removal of regulations prohibiting utilities from distributing the Climate Credit in such a way that higher usage results in ratepayers’ receipt of more funds. Currently, the Climate Credit is issued as an equal, flat-rate amount for all residential customers within a specific utility. Prohibition on volumetric allocation was established to preserve the

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carbon price signal that is included in electricity rates, but proponents of a return based on usage have argued that such an amendment would aid electrification efforts and customer affordability. The Commission could now issue a scoping memo in the Climate Credit proceeding that includes this potential change in how the Credit is distributed to customers.

Next Steps
The Commission will issue a formal scope and schedule for the proceeding, including the timeline for when a decision impacting the Climate Credit will be expected. 3CE will continue working with CalCCA to participate in the proceeding.

Integrated Energy Policy Report (IEPR) – 25-IEPR-03
Issue
The Integrated Energy Policy Report (IEPR) is the California Energy Commission’s (CEC) biannual report, with an update every other year, to forecast energy demand and make other considerations on the State’s energy policies and goals. The IEPR forecast is a key input in the electric system planning and is used by the CPUC to inform procurement obligations for LSEs. The report is developed through a collaborative process where the CEC hosts a series of workshops and solicits stakeholder feedback.

Status
On January 21, the CEC voted to adopt the 2025 demand forecast, including a planning forecast that informs resource adequacy (RA) requirements for load-serving entities and a local reliability forecast used to evaluate the need for transmission and system upgrades. In response to CalCCA’s advocacy, done in collaboration with 3CE, the CEC decided not to include the novel “Known Loads” category in any forecast used to set RA requirements, agreeing with concerns related to the uncertainty of this new category and the need for refinements to accurately estimate loads associated with energization requests at the distribution level.

Next Steps
3CE will attend the next Demand Analysis Working Group, held by the CEC to review forms related to the 2025 IEPR with LSEs.

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Staff Report Item 6
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Juan Lopez, Director of Finance
SUBJECT: Financial Report for the period of October 1, 2025, through November 30, 2025 DATE: February 25, 2026
RECOMMENDATION:

Receive a financial report for the period October 1, 2025, through November 30, 2025.

SUMMARY:

During the two months of the new fiscal year ending on November 30, 2025, operating revenues amounted to $105.5 million, and operating expenses totaled $95.2 million for a net operating income of $10.3 million. Net non-operating revenue of $1.6 million, driven by interest and investment returns, resulted in a total increase in net position of $11.9 million for the month.

Year-to-date operating revenue is $10.2 million, primarily due to a positive revenue performance in multiple customer classes. Non-operating revenue from investment returns from assets held in operating and investment accounts, and interest on collateral exceeded the budget with a variance of $0.1 million due to higher-than-anticipated investment yields. Year-to-date total revenue (operating & non-operating revenue) is $10.3 million higher than the budget, a positive variance of 11.0%.

Year-to-date operating expenditures excluding capital outlay are $14.0 million below budget, a variance of 13.0%. This variance is primarily attributable to lower-than-anticipated energy costs, which came in $12.6 million under budget. The variances reflect a convergence of factors, including lower market prices, the timing of invoicing for attributes such as Renewable Energy Credits (RECs), and higher-than-planned revenue from congestion revenue rights. These variances are expected to level out over the fiscal year as 3CE fulfills its energy obligations, including resource adequacy (RA) and renewable energy credits (RECs).

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Non-energy operating costs were $1.4 million below budget due to lower-than-planned costs for contracted services, staff vacancies, and energy programs. The capital outlay exceeded the budget by $0.2 million due to ongoing work to finalize electric vehicle charging at the 3CE Santa Cruz office. Non-energy operating costs are projected to level out over the fiscal year as participation in energy programs and capital projects continues to progress. Year-to-date total expenditures, including capital outlay, are $13.8 million lower than the budget, a favorable variance of 13.0%.

The net position at the end of November 30, 2025, totaled $274.6 million, an increase of $11.9 million from last fiscal year. The increase is primarily due to a reduction in the accrued cost of electricity and accounts payable, offset by a decrease in accounts receivable, other accrued revenue, and other receivables. Cash, cash equivalents, and investments totaled $231.6 million, an $8.7 million increase from the start of the fiscal year. The positive variance in liquidity was primarily attributed to the increase in cash from operating revenue.

FISCAL IMPACT:

There is no financial impact associated with receiving this report.

ATTACHMENT(S):

1. November 30, 2025 Financial Report

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Compiled Financial Statements 1
Compiled Budgetary Comparison Schedule 6
Budget Variance Commentary 8
Investment Summary 9
Accounts Receivable Aging Summary 10
Table of Contents

FINANCIAL REPORT
Fiscal Year to Date
As of November 30, 2025

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1 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
Central Coast Community Energy
Management is responsible for the accompanying financial statements of Central Coast Community Energy (a California Joint Powers Authority) which comprise the statement of net position as of November 30, 2025, and the related statement of revenues, expenses, and changes in net position, and the statement of cash flows for the two months then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements.

Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.

Central Coast Community Energy’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.

We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
January 7, 2026
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com

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Current assets
Cash and cash equivalents - unrestricted 127,532,290 $
Cash - restricted 2,957,701
Accounts receivable, net of allowance 46,270,618
Accrued revenue 36,737,956
Other receivables 1,458,378
Investments 94,065,524
Prepaid expenses 610,779
Deposits 28,563,660
Loan receivable 196,118
Total current assets 338,393,024
Noncurrent assets
Investments 10,010,750
Deposits 36,204
Loan receivable 1,037,262
Capital assets, net of depreciation and amortization 6,712,477 Total noncurrent assets 17,796,693
Total assets 356,189,717
Current liabilities
Accrued cost of electricity 62,901,147
Accounts payable 1,210,277
Other accrued liabilities 3,398,885
User taxes and energy surcharges due to other governments 1,796,131 Security deposits - energy suppliers 2,376,000
Lease liability 356,082
Total current liabilities 72,038,522
Noncurrent liabilities
Security deposits - energy suppliers 9,113,324
Lease liability 429,502
Total noncurrent liabilities 9,542,826
Total liabilities 81,581,348
Net investment in capital assets 5,726,332
Restricted for security collateral 2,957,701
Unrestricted 265,924,336
Total net position 274,608,369 $

NET POSITION
As of November 30, 2025

STATEMENT OF NET POSITION

CENTRAL COAST COMMUNITY ENERGY
ASSETS

LIABILITIES

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OPERATING REVENUES
Electricity sales, net 105,440,995 $
Other income 14,082
Total operating revenues 105,455,077

OPERATING EXPENSES
Cost of electricity 88,292,707
Contract services 2,066,134
Staff compensation 2,118,751
Program incentives 2,027,737
Other operating expenses 551,373
Depreciation and amortization 108,084
Total operating expenses 95,164,786
Operating income (loss) 10,290,291

NONOPERATING REVENUES (EXPENSES)
Investment income 1,630,880
Interest expense (6,207)
Nonoperating revenues (expenses) 1,624,673
CHANGE IN NET POSITION 11,914,964
Net position at beginning of period 262,693,405
Net position at end of period 274,608,369 $
Two Months Ended November 30, 2025

AND CHANGES IN NET POSITION

STATEMENT OF REVENUES, EXPENSES

CENTRAL COAST COMMUNITY ENERGY

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CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 127,076,505 $
Receipts from wholesale sales and other operating revenue 4,244,046 Receipts of deposits and collateral 2,506,980
Payments to suppliers for electricity (107,977,046)
Payments for other goods and services (3,368,274)
Payments of deposits and collateral (5,734,796)
Payments for program incentives (2,504,926)
Payments for staff compensation (1,895,027)
Payments of taxes and energy surcharges to other governments (2,265,962) Net cash provided by operating activities 10,081,500

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments of lease (62,314)
Purchases of capital assets (207,388)
Net cash provided (used) by capital and related financing activities (269,702)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 1,178,804
Proceeds from sales and maturities of investments 16,970,000 Loan principal received 96,699
Investment purchases (14,721,949)
Net cash provided (used) by investing activities 3,523,554 Net change in cash and cash equivalents 13,335,352
Cash and cash equivalents at beginning of year 117,154,639 Cash and cash equivalents at end of period 130,489,991 $ Reconciliation to the Statement of Net Position
Cash and cash equivalents - unrestricted 127,532,290 $
Cash - restricted 2,957,701
Cash and cash equivalents 130,489,991 $
Change in fair value of investments 614,869 $
Change in interest income receivable (162,793) $

NONCASH CAPITAL FINANCING ACTIVITIES
Capital acquisitions included in accounts payable
and other liabilities 200,561 $
Two Months Ended November 30, 2025

STATEMENT OF CASH FLOWS

CENTRAL COAST COMMUNITY ENERGY

NONCASH INVESTING ACTIVITES

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Operating income (loss) 10,290,291 $
Adjustments to reconcile operating income (loss) to net cash provided by operating activities
Depreciation and amortization expense 108,084
(Increase) decrease in:

Accounts receivable, net of allowance 16,191,974
Accrued revenue 3,606,353
Other receivables 2,496,482
Prepaid expenses (156,499)
Deposits (3,227,816)
Increase (decrease) in:

Accrued cost of electricity (17,836,817)
Accounts payable (2,271,167)
Other accrued liabilities 1,309,395
User taxes and energy surcharges due to other governments (428,780) Net cash provided by operating activities 10,081,500 $

CENTRAL COAST COMMUNITY ENERGY
STATEMENT OF CASH FLOWS (continued)
Two Months Ended November 30, 2025

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET

CASH PROVIDED BY OPERATING ACTIVITIES

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1 ACCOUNTANTS’ COMPILATION REPORT

Board of Directors
Central Coast Community Energy
Management is responsible for the accompanying special purpose budgetary comparison schedule of Central Coast Community Energy (a California Joint Powers Authority) for the two months ended November 30, 2025, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.

The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of the Authority.

Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.

We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
January 7, 2026
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com

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

REVENUES AND OTHER SOURCES
Electricity sales, net $ 50,908,476 $ 46,546,481 $ 4,361,995 9% $ 105,440,995 $ 95,255,248 $ 10,185,747 11% $ 578,022,716 $ 472,581,721 Interest and investment returns 629,558 758,333 (128,775) -17% 1,630,880 1,516,666 114,214 8% 9,100,000 7,469,120 Other income 9,246 6,250 2,996 48% 14,082 12,500 1,582 13% 75,000 60,918 Total revenues and other sources 51,547,280 47,311,064 4,236,216 9% 107,085,957 96,784,414 10,301,543 11% 587,197,716 480,111,759

EXPENDITURES AND OTHER USES
Current Expenditures
Cost of energy 41,884,899 46,665,946 4,781,047 10% 88,439,111 101,022,921 12,583,810 12% 534,776,256 446,337,145 Salaries and benefits 1,128,130 1,116,399 (11,731) -1% 2,118,751 2,323,368 204,617 9% 14,260,774 12,142,023 Services and supplies 2,598,678 2,866,327 267,649 9% 4,561,154 5,759,288 1,198,134 21% 38,160,686 33,599,532 Capital outlay 194,200 100,000 (94,200) -94% 361,326 200,000 (161,326) -81% 1,200,000 838,674 Total current expenditures 45,805,907 50,748,672 4,942,765 10% 95,480,342 109,305,577 13,825,235 13% 588,397,716 492,917,374 Surplus (deficit) 5,741,373 $ (3,437,608) $ 9,178,981 $ 11,605,615 $ (12,521,163) $ 24,126,778 $ (1,200,000) $ (12,805,615) $ Favorable variances represent revenues exceeding budget or expenditures below budget.

Annual

CENTRAL COAST COMMUNITY ENERGY

BUDGETARY COMPARISON SCHEDULE
Current Month and Two Months Ended November 30, 2025
Month
Variance
Favorable
(unfavorable)
Year-To-Date
Variance
Favorable
(unfavorable)

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Budget Item
YTD Variance -
Favorable
(Unfavorable) Comment
Electric Sales Revenue, net 10.7% Sales revenue includes revenues actually billed to customers as well as estimated customer usage during the reporting period that is not yet billed.

Cost of Energy 12.5% Variances in this category are typically due to (1) timing difference between projected and actual REC deliveries, (2) variance from actual to anticipated market prices, and (3) variance from actual to expected volume used by customers. Cost of energy includes scheduling coordinator fees for budget purposes only.

Salaries and Benefits 8.8% Staffing expenses are under budget due to the timing of new hires.

Services and Supplies 20.8% This category includes accounting, IT, technical and other consultants.

Budget Commentary for significant items

CENTRAL COAST COMMUNITY ENERGY
October 1, 2025 through November 30, 2025

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Return of Investments YTD Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

CASH AND CASH EQUIVALENTS
River City Bank / Chase / West Coast
Community Bank - Money Market and
other Interest Earning Accounts
Funds Invested - Average Balance $ 99,293,298 96,624,568 $ Gains/Losses/Interest $ 331,876 652,441 $ 320,565 $
Average APY 4.12% 3.87%

INVESTMENTS
Schwab/Fidelity
Funds Invested - Average Balance $ 131,499,666 131,114,341 $ Gains/Losses/Interest $ 574,669.46 863,845 289,175.13
Average APY 5.26% 2.64%

CENTRAL COAST COMMUNITY ENERGY
Investment Summary
October 1, 2025 through November 30, 2025

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Current 0 - 30 Days 31 - 60 Days 61 - 90 Days > 91 Days A/R Balance $ 13,480,834 22,060,792 $ 3,132,040 $ 1,351,147 $ 6,245,805 $ 46,270,618 $

CENTRAL COAST COMMUNITY ENERGY
Summary of Accounts Receivable, Net of Bad Debt Allowance As of November 30, 2025

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Staff Report Item 7
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Thomas White, Accountant
SUBJECT: Investment Performance Report for the period of October 1, 2025, through December 31, 2025
DATE: February 25, 2026
RECOMMENDATION:
3CE investment performance report for the period of October 1, 2025, through December 30, 2025.

BACKGROUND:

As of December 31, 2025, Central Coast Community Energy held $243.5 million across its operating and investment accounts. The agency’s investment strategy remains conservative and compliant with the Investment Policy and the California Government Code, prioritizing liquidity, preservation of capital, and a passive investment approach. The portfolio's structure is designed to support day-to-day operating needs, meet collateral calls, and maintain reserves for strategic and rate stabilization purposes.

In the fourth quarter of FY 2024-25, 3CE established a new account with West Coast Community Bank to further diversify its financial holdings for the specific purpose of holding capital funds. The selection of a local banking partner within 3CE’s service area supports community investment while providing a secure vehicle to hold funds designated for capital outlay from the Capital Infrastructure Reserve.

DISCUSSION/ANALYSIS:
3CE ended the quarter on December 31, 2025, with investment holdings that aligned with the Investment Policy and a strategy of maintaining sufficient cash to meet operating costs, including counterparty collateral calls. The strategy consists of holding three different classes of funds: cash to meet ongoing operating costs, liquidity reserves to meet collateral calls, capital acquisition, and unforeseen costs, and short-term investments to meet reserves, including the strategic reserve and

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energy rate stabilization funds. As of December 31, 2025, 3CE held $243.5 million in operating and investment accounts. The table below lists the cash and investment balances by account type.

Cash and Investment Mix Holdings by Institution
Account Type Institution Balance Investment Mix
Operating
River City Bank $82,715,642
cash (sweep) - $74.8M
money market - $3.9M
cash (operating) - $4.0M
LOC money market - $3.0M
Chase $14,359,240 cash (held for collateral)
West Coast Community Bank $14,674,560 money market
Investment
Schwab $65,229,011
Treasuries - $61.2M
cash (sweep) - $0.0M
money market - $4.0M
Fidelity $66,551,063 Treasuries - $56.4M
money market - $10.2M
Total $243,529,516
3CE employs a conservative, passive investment strategy in which fixed-income securities—primarily U.S. Treasury notes and bills—are held to maturity, allowing the agency to realize coupon income and discounts over time. As of December 31, 2025, 3CE managed $131.8 million in investments across its Schwab and Fidelity brokerage accounts. During the first quarter, Treasury yields averaged between

3.50% and 4.38%. Treasuries with maturities under one year represented approximately 91% of total holdings, while two longer-term Treasuries, each valued at $5.0 million, mature in the second and third quarters of 2027. All investments are rated high-grade or better, consistent with 3CE’s prudent investment policy.
3CE’s investment mix aligns with the Investment Policy and California Government Code. As of December 31, 2025, 3CE held $90.2 million in cash and cash equivalents, $117.5 million in U.S.

Treasuries, and $35.8 million in money market funds. Aside from money market funds, all other investment types do not have state investment limits. The State code limits money market funds to 20% of the portfolio. 3CE is within the State limit at 14.7%.

Cash and Investment Mix Holdings
Type Market Value
% of
Portfolio
Permitted by
CA Government Code
Cash and cash equivalents $90,193,043 37.0% 100%
Money Market Funds $35,787,340 14.7% 20%
U.S. Treasuries $117,549,133 48.3% 100%
Total $243,529,516 100.0%

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The FY 2025-26 Adopted Budget, with appropriations of $588.4 million, included estimated investment revenues of $9.1 million. In the first quarter, investment earnings from operating and investment accounts netted $2.6 million, $1.2 million from interest on cash and money market accounts, and $1.2 million from short-term investments, mostly from Treasuries. Interest earned on 3CE collateral held by counterparties totaled $0.2 million. This first-quarter investment revenue is higher than the $2.3 million estimated in the recommended budget, attributed to more favorable investment returns.

As of December 31, 2025, 3CE has 151 days of cash on hand. This is based on the total cash and equivalents of $243.5 million divided by an average daily expense of $1.6 million. Total operating expenses for FY 2025-26, less depreciation, are $588.4 million.

FISCAL IMPACT:

There is no fiscal impact to receiving this report.

CONCLUSION:
3CE continues to proactively diversify its financial institutional partnerships, including the recent addition of an operating account with West Coast Community Bank. The agency strategically deploys cash and short-term investments to capture favorable yields while maintaining sufficient liquidity to meet operating expenses and collateral requirements.

ATTACHMENT(S):

None.

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Staff Report Item 8
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
SUBJECT: CEO Report
DATE: February 25, 2026

COMMUNITY ADVISORY COUNCIL REPORT
3CE's Community Advisory Council (CAC) held its regular meeting on Wednesday, February 4th. During the meeting, 3CE staff presented findings from fiscal year (FY) 2024-25’s advertising and communications campaign as well as plans for FY 2025-26. Key highlights for FY 2024-25 included launching three advertising campaigns to support enrollment in unincorporated San Luis Obispo County and Atascadero and promoting Energy Programs participation. These efforts successfully met enrollment goals and increased program participation, with 3CE’s digital advertising performance exceeding industry benchmarks for engagement and click-through rates. For FY 2025-26, 3CE will continue combining paid and unpaid marketing strategies to raise awareness of the agency and its services.

The CAC also received a presentation on findings from nine community focus groups held in November and December concerning barriers and opportunities for electrification in the agricultural industry. The presentation included a preliminary improved program concept for 3CE’s Agricultural Electrification Program, with elements such as additional rebates, technical assistance, and equipment demonstration days. The improved program concept will continue to be developed with feedback from a second round of focus groups to be held in March and April across 3CE's service area.

Finally, the CAC received an evaluation report on 3CE's Energy Programs for FY 2024-25, along with an update on Energy Programs for first quarter of FY 2025-26. FY 2024-25 showed strong progress: equity projects rose to 42% of incentives (from 36%), CO2e avoidance increased 63% to 6,042 MT, and 3CE’s battery rebate program shifted 2.3 MWh of daily load. FY 2025-26 initiatives include relaunching Electrify Your Home with improved design, reviewing 3CE’s Agricultural Electrification program, piloting a Virtual Power Plant, and creating a comprehensive electrification technical assistance offering. Based on the report's findings and recommendations, staff will develop a long-term strategic plan for Energy Programs with stakeholder input. The final report will be presented at the June Operations Board meeting.

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STATE LEGISLATIVE UPDATE
3CE joined fellow Community Choice Aggregators (CCAs) at CalCCA’s Lobby Day, held February 4, 2026.

The event followed productive internal discussions, which had resulted, by the end of December 2025, in a finalized, coordinated CCA legislative strategy. The alignment and advanced preparation contributed to a successful and effective day of advocacy in Sacramento earlier this month. 3CE’s Policy Board Chair, Mayor Fred Keeley, led a delegation of five 3CE staff members in 17 meetings with state elected officials, their staff, and leadership from key policy committees.

Following Lobby Day and continued engagement, authors have been secured for two key bill proposals:

1. Assembly Bill 1761, authored by Assemblymember Chris Rogers, would require public disclosure of any data provided by an investor-owned utility (IOU) or the California Public Utilities Commission (CPUC) that is used in the formulation of the Power Charge Indifference Adjustment (PCIA) or other cost recovery mechanisms. This is essential for 3CE to assess the management of IOU legacy resources and the fairness of regulatory charges imposed on utility ratepayers.

2. Senate Bill 1138 - Resource Adequacy (RA) Transactability bill, authored by Senator Padilla, would allow CCAs and other load-serving entities to trade RA on an hourly basis, consistent with the requirement to demonstrate sufficient capacity for every hour of the day. This added flexibility would reduce costs. 3CE has experienced years in which RA expenses have constituted one-third of total procurement costs. A bill number has not yet been assigned.

ATTACHMENT(S):

1. Contracts under $200k

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CCCE Contracts < $200k
Vendor Total Engagement Amount From To Service Scope Remarks 1 A.G. Davi, LTD. 194,421 $ 1/1/2026 6/30/2026 3CE Monterey Office renewal agreement to extend the lease for a six month period with inital monthly
Fixed Rent $32,403.51

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Staff Report Item 9
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Leo Kim, Director of Power Supply
SUBJECT: Adopt Resolution Nos. OB-2026-04 and OB-2026-05 approving and authorizing the CEO to execute:
(a) an Amendment to the Energy Storage Agreement (ESA) with MRP Pacifica Marketing II, LLC (MRP) for the Panoche Hybrid Project as well as any necessary ancillary documents to delay the Guaranteed Commercial Operation Date by 14 months for a new Guaranteed Commercial Operation Date of June 1, 2027, in an amount not to exceed $168,000,000; and,
(b) an Amendment to the ESA with MRP for the Midway Hybrid Project as well as any necessary ancillary documents to delay the Guaranteed Commercial Operation Date by 14 months for a new Guaranteed Commercial Operation Date of June 1, 2027, in an amount not to exceed $368,000,000 DATE: February 25, 2026
RECOMMENDATION:

Staff recommends the Operations Board adopt Resolution Nos. OB-2026-04 and OB-2026-05 approving and authorizing the CEO to execute:
(a) an Amendment to the Energy Storage Agreement (ESA) with MRP Pacifica Marketing II, LLC (MRP or Seller) for the Panoche Hybrid Project as well as any necessary ancillary documents to delay the Guaranteed Commercial Operation Date by 14 months for a new Guaranteed Commercial Operation Date of June 1, 2027, in an amount not to exceed $168,000,000; and, (b) an Amendment to the ESA with MRP for the Midway Hybrid Project as well as any necessary ancillary documents to delay the Guaranteed Commercial Operation Date by 14 months for a new Guaranteed Commercial Operation Date of June 1, 2027, in an amount not to exceed $368,000,000 BACKGROUND:

In January 2024, the Operations Board originally approved two separate ESAs with MRP in January 2024. The first ESA was for the Panoche Hybrid project, which included dispatch control over a 52 MW hybrid natural gas plant plus 57 MW 1-hour battery storage project for a term of 15 years and a

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commercial operating date of January 2026. The second, for the Midway Hybrid project, provided dispatch control over a 120 MW hybrid natural gas plant plus a 120 MW 1-hour battery storage project for a term of 15 years and a commercial operation date of January 2026. Both projects are in Fresno County.

Both projects are important components of 3CE’s Resource Adequacy (RA) strategy which includes gaining control over dispatchable resources, hedging RA obligations over a longer tenor, and exploring innovative storage opportunities.

DISCUSSION/ANALYSIS:

Amending the ESAs for both projects secures long-term, high-value, RA resources while supporting the innovative repurposing of the existing interconnection at two natural gas peaker facilities.

In November of 2025, MRP notified 3CE that the battery portion of both projects were experiencing permitting delays. MRP represents that the projects have received their Conditional Use Permits, started construction, and are on schedule for BESS commercial operation by June 2027.

To facilitate the delivery of the BESS portion of the projects, staff negotiated a later BESS commercial operation date, a price reduction, and other commercial terms that provide 3CE’s customers additional operational value while meeting statewide RA requirements while reducing existing greenhouse gas (GHG) emissions.

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Developer
Middle River Power (“MRP”). MRP owns and manages about 2,000 MW of generating capacity in California and 4,000 MW outside of California. This agreement is one of four separate ESAs for innovative hybrid natural gas peaker and BESS projects.

Overview of the Project
Counterparty MRP Pacifica Marketing LLC
Project Name Panoche Hybrid Midway Hybrid
Product
Existing Natural Gas Peaker Power Plants with new construction Battery Energy Storage Systems (BESS), providing Resource Adequacy (RA) benefits and dispatchable energy
Delivery Term
15 years
January 1, 2026 – December 31, 2040
BESS COD June 1, 2027
Contract Capacity
52 MW Natural Gas Simple Cycle
Turbine
57 MW 1-hour discharge duration
Lithium-Ion Battery Energy Storage
System (BESS)
120 MW Natural Gas Simple Cycle
Turbine
120 MW 1-hour discharge duration
Lithium-Ion Battery Energy Storage
System (BESS)
% of 3CE RA Obligation 5% 13%
Location Firebaugh, Fresno County
Not to Exceed Amount $168,000,000 $368,000,000
FISCAL IMPACT:

The fiscal impact of the proposed amendment for the hybrid BESS project will provide approximately $8 million ($2.5 million Panoche / $5.5 million Midway) in value over the existing ESAs.

CONCLUSION:

Approval of the amendment of the Panoche and Midway Hybrid BESS projects will meet about 18%

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3CE’s RA obligation and provide GHG reductions plus resource adequacy benefits and provide additional value to 3CE’s customers.

ATTACHMENT(S):

1. Resolution No OB-2026-04 of Approving and Authorizing CEO to Amend the Panoche ESA

2. Resolution No OB-2026-05 of Approving and Authorizing CEO to Amend the Midway ESA

3. Proposed Amendment to Panoche ESA (Redacted)

4. Proposed Amendment to Midway ESA (Redacted)

5. Panoche ESA between MRP and 3CE (Redacted)

6. Midway ESA between MRP and 3CE (Redacted)

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RESOLUTION NO. OB-2026-04

A RESOLUTION OF THE CENTRAL COAST COMMUNITY ENERGY OPERATIONS BOARD OF

DIRECTORS APPROVING AND AUTHORIZING THE CHIEF EXECUTIVE OFFICER TO AMEND

THE ENERGY STORAGE AGREEMETN WITH MRP PACIFICA MARKETING II LLC FOR THE

PANOCHE HYBRID PROJECT TO DELAY THE GUARANTEED COMMERCIAL OPERATION DATE TO JUNE 1, 2027.

WHEREAS, Central Coast Community Energy (3CE) is a Joint Powers Authority (JPA) established and operated pursuant to California Government Code sections 6500 et seq. to study, promote, develop, conduct, operate, and manage energy programs in the California Central Coast region of Santa Cruz, Monterey, San Benito, Santa Barbara, and San Luis Obispo Counties; and WHEREAS, pursuant to California Public Utilities Code Section 366.2, a community choice aggregator is solely responsible for all generation procurement activities on behalf its customers, and must offer the opportunity to purchase electricity to all residential customers within its jurisdiction; and
WHEREAS, 3CE is purchasing Resource Adequacy, and related products and services (the “Products”) to supply for a public purpose, to provide power portfolio benefits and maintain price certainty for its customers across the Central Coast; and WHEREAS, MRP Pacifica Marketing II LLC (MRP) represents that despite initial delays, the battery energy storage component of the Panoche Hybrid project has received its conditional use permit and has started construction; and
WHEREAS, 3CE has engaged in negotiations and seeks to amend the Dispatchable Energy and Energy Storage Agreements with MRP Pacifica Marketing II LLC, to delay the Guaranteed Commercial Operation Date of the Battery Energy Storage System for the Panoche Hybrid project from April 1, 2026 to June 1, 2027, based on project’s desirable attributes, pricing, and terms; and WHEREAS, the Panoche Hybrid Project will contribute toward the regulatory requirements set forth by the California Public Utilities Commission to ensure greater reliability for the California grid, to serve 3CE customers’ electrical needs, and reduce greenhouse gas emissions; and WHEREAS, the Operations Board approves and authorizes the Chief Executive Officer to execute the proposed First Amendment to the Panoche Hybrid project ESA to extend the guaranteed commercial operation date of the BESS component of the project to June 1, 2027; and WHEREAS, the Board’s authorization to the Chief Executive Officer to execute the Agreement is contingent on MRP’s agreement to terms consistent with those presented to the Operations Board.

NOW, THEREFORE, IT IS HEREBY DETERMINED AND ORDERED that the Operations Board of Directors approves and authorizes the Chief Executive Officer to execute the First Amendment to the ESA with MRP Pacifica Marketing II, LLC inclusive of terms consistent with those presented, in a form approved by the General Counsel with a guaranteed commercial operation date of June 1, 2027 and for a delivery term of up to fifteen years, in an amount not to exceed $168,000,000 for the Panoche Hybrid BESS project

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PASSED AND ADOPTED this 25th Day of February 2026, by the following vote:

AYES:

NOES:

ABSENT:
__________________________________
Chair, Matt Huffaker
Attest:
__________________________________
Board Clerk, Heather Vowell

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RESOLUTION NO. OB-2026-05

A RESOLUTION OF THE CENTRAL COAST COMMUNITY ENERGY OPERATIONS BOARD OF

DIRECTORS APPROVING AND AUTHORIZING THE CHIEF EXECUTIVE OFFICER TO AMEND

THE ENERGY STORAGE AGREEMETN WITH MRP PACIFICA MARKETING II LLC FOR THE

MIDWAY HYBRID PROJECT TO DELAY THE GUARANTEED COMMERCIAL OPERATION DATE TO JUNE 1, 2027.

WHEREAS, Central Coast Community Energy (3CE) is a Joint Powers Authority (JPA) established and operated pursuant to California Government Code sections 6500 et seq. to study, promote, develop, conduct, operate, and manage energy programs in the California Central Coast region of Santa Cruz, Monterey, San Benito, Santa Barbara, and San Luis Obispo Counties; and WHEREAS, pursuant to California Public Utilities Code Section 366.2, a community choice aggregator is solely responsible for all generation procurement activities on behalf its customers, and must offer the opportunity to purchase electricity to all residential customers within its jurisdiction; and
WHEREAS, 3CE is purchasing Resource Adequacy, and related products and services (the “Products”) to supply for a public purpose, to provide power portfolio benefits and maintain price certainty for its customers across the Central Coast; and WHEREAS, MRP Pacifica Marketing II LLC (MRP) represents that despite initial delays, the battery energy storage component of the Midway Hybrid project has received its conditional use permit and has started construction; and
WHEREAS, 3CE has engaged in negotiations and seeks to amend the Dispatchable Energy and Energy Storage Agreements with MRP Pacifica Marketing II LLC, to delay the Guaranteed Commercial Operation Date of the Battery Energy Storage System for the Midway Hybrid project from April 1, 2026 to June 1, 2027, based on project’s desirable attributes, pricing, and terms; and WHEREAS, the Midway Hybrid Project will contribute toward the regulatory requirements set forth by the California Public Utilities Commission to ensure greater reliability for the California grid, to serve 3CE customers’ electrical needs, and reduce greenhouse gas emissions; and WHEREAS, the Operations Board approves and authorizes the Chief Executive Officer to execute the proposed First Amendment to the Midway Hybrid project ESA to extend the guaranteed commercial operation date of the BESS component of the project to June 1, 2027; and WHEREAS, the Board’s authorization to the Chief Executive Officer to execute the Agreement is contingent on MRP’s agreement to terms consistent with those presented to the Operations Board.

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PASSED AND ADOPTED this 25th Day of February 2026, by the following vote:

AYES:

NOES:

ABSENT:
__________________________________
Chair, Matt
Huffaker
Attest:
__________________________________
Board Clerk, Heather Vowell

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Execution Version

FIRST AMENDMENT TO DISPATCHABLE ENERGY AND

ENERGY STORAGE AGREEMENT
(PANOCHE)
This First Amendment to Dispatchable Energy and Energy Storage Agreement (the “Amendment”) is entered into by and between MRP Pacifica Marketing II LLC, a Delaware limited liability company (“Seller”) and Central Coast Community Energy, a California joint powers authority (“Buyer”) as of the Amendment Execution Date (as defined below). Buyer and Seller are referred to herein individually as a “Party” and collectively as the “Parties”. All capitalized terms used but not otherwise defined in this Amendment shall have the meanings set forth in the Agreement (as defined below). The rules of interpretation set forth in the Agreement shall also apply to the interpretation of this Amendment.

RECITALS
WHEREAS, Seller and Buyer previously entered into that certain Dispatchable Energy and Energy Storage Agreement dated as of February 8, 2024 for the purchase and sale of Product from the Facility (the “Agreement”);
WHEREAS, Seller has experienced delays in developing the BESS Resource due to permitting issues; and
WHEREAS, the Parties wish to amend the Agreement in accordance with Section 19.2 of the Agreement, as set forth below.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

AGREEMENT
SECTION I: AMENDMENTS TO THE AGREEMENT

1. The Cover Sheet of the Agreement is amended as follows:
(a) The following new items are added to the first table on the Cover Sheet:
(b) The Energy Reservation Price on the first table on the Cover Sheet is deleted in its entirety and replaced with the following:

Energy Reservation Price:
(c) The Milestone table is replaced in its entirety as follows:

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5 Phone: (831) 641-7203
Email: [email protected]
Payments:

Attn: Chief Financial Officer
Phone: (831) 641-7210
Email: [email protected]
Wire Transfer:

Bank: River City Bank
ABA: 121133416
Account: 9981454362
Credit and Collections:

Attn: Chief Financial Officer
Phone: (831) 641-7210
Email: [email protected]
With additional Notices of an Event of Default to:

Central Coast Community Energy
Attn: General Counsel
Phone: (831) 595-7743
Email: [email protected]
and to:

Attn: Deputy General Counsel
Phone: (831) 215-1740
Email: [email protected]
and to:

Attn: Energy Contracts and Compliance Manager
Email: [email protected]
With a copy to:

Hall Energy Law PC
Attn: Stephen Hall
Phone: (503) 313-0755
Email: [email protected]
Emergency Contact:

Attn: Director of Power Supply Resources
Phone: (805) 803-1016
Email: [email protected]
SECTION II: NO OTHER MODIFICATIONS
Except as otherwise expressly modified hereby, the Agreement remains in full force and effect. If there is a conflict between the terms of the Agreement and the terms of this Amendment, the terms of this Amendment shall control. From and after the Amendment Execution Date, all references in the Agreement (including all Exhibits thereto) to the “Agreement” shall be understood to mean the Agreement as amended by this Amendment.

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6 SECTION III: MISCELLANEOUS

1. Governing Law; Dispute Resolution, Confidentiality, Survival. This Amendment shall be governed by the governing law provisions in the Agreement. The Parties agree to comply with the dispute resolution provisions in the Agreement with respect to any dispute relating to this Amendment. The Parties agree that the confidentiality provisions in the Agreement shall apply to the treatment of this Amendment as Confidential Information thereunder. The provisions of this Amendment which by their nature should survive expiration, cancellation or other termination of the Agreement shall survive such expiration, cancellation or other termination.

2. Headings. Headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

3. Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Counterparts shall be delivered by electronic mail (including .pdf or any electronic signature complying with the federal ESIGN Act of 2000, California’s Uniform Electronic Transactions Act (Cal. Civ. Code Section 1633.1, et seq.) or other applicable law) and any other counterpart so delivered shall have the same legal effect as an original.

4. Any Amendments or Modifications. This Amendment may only be amended or otherwise modified in writing signed by each of the Parties.

5. Notices. Any notice required to be given under the terms of this Amendment shall be given in accordance with the Agreement.

6. Entire Agreement. This Amendment constitutes the entire agreement between the Parties relating to the subject matter hereof and shall supersede all other prior or contemporaneous understandings or agreements, both written and oral, between the Parties relating to the subject matter hereof.
[signatures appear on the following page]

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IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their duly authorized representatives, as of the latest date set forth in the signature blocks below (“Amendment Execution Date”). By signing this Amendment, the representatives of the Parties warrant that they have the requisite authority to bind their respective principals.

MRP Pacifica Marketing II LLC,
a Delaware limited liability company
By:

Name:

Title:

Date:

By:

Name:

Title:

Central Coast Community Energy,
a California joint powers authority
By:

Name:

Title:

Date:

Approved as to form:

By:

Name:

Title:

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Execution Version

FIRST AMENDMENT TO DISPATCHABLE ENERGY AND

ENERGY STORAGE AGREEMENT
(MIDWAY)
This First Amendment to Dispatchable Energy and Energy Storage Agreement (the “Amendment”) is entered into by and between MRP Pacifica Marketing II LLC, a Delaware limited liability company (“Seller”) and Central Coast Community Energy, a California joint powers authority (“Buyer”) as of the Amendment Execution Date (as defined below). Buyer and Seller are referred to herein individually as a “Party” and collectively as the “Parties”. All capitalized terms used but not otherwise defined in this Amendment shall have the meanings set forth in the Agreement (as defined below). The rules of interpretation set forth in the Agreement shall also apply to the interpretation of this Amendment.

AGREEMENT
SECTION I: AMENDMENTS TO THE AGREEMENT

Energy Reservation Price:
(c) The Milestone table is replaced in its entirety as follows:

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5 Phone: (831) 641-7203
Email: [email protected]
Payments:

Attn: Chief Financial Officer
Phone: (831) 641-7210
Email: [email protected]
Wire Transfer:

Bank: River City Bank
ABA: 121133416
Account: 9981454362
Credit and Collections:

Attn: Chief Financial Officer
Phone: (831) 641-7210
Email: [email protected]
With additional Notices of an Event of Default to:

Central Coast Community Energy
Attn: General Counsel
Phone: (831) 595-7743
Email: [email protected]
and to:

Attn: Deputy General Counsel
Phone: (831) 215-1740
Email: [email protected]
and to:

Attn: Energy Contracts and Compliance Manager
Email: [email protected]
With a copy to:

Hall Energy Law PC
Attn: Stephen Hall
Phone: (503) 313-0755
Email: [email protected]
Emergency Contact:

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6 SECTION III: MISCELLANEOUS

2. Headings. Headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

3. Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

4. Any Amendments or Modifications. This Amendment may only be amended or otherwise modified in writing signed by each of the Parties.

5. Notices. Any notice required to be given under the terms of this Amendment shall be given in accordance with the Agreement.

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MRP Pacifica Marketing II LLC,
a Delaware limited liability company
By:

Name:

Title:

Date:

By:

Name:

Title:

Central Coast Community Energy,
a California joint powers authority
By:

Name:

Title:

Date:

Approved as to form:

By:

Name:

Title:

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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

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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

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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

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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

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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.

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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

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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;

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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

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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;

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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

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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.

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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

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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

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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.

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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

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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

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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

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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

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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.

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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

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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

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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.

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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

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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.

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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

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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

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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.

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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

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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

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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

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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;

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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

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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

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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

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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,

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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

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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.

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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

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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.

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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:

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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.

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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.

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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

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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]

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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___________________________

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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:

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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 =

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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.

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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]

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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 =

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Exhibit K - 1

EXHIBIT K
[RESERVED]

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Exhibit L - 2
[LICENSED PROFESSIONAL ENGINEER]
By:

Printed Name:

Title:

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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:

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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

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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.

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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.

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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: __________________________

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Central Coast Community Energy (3CE) Operations BoardFebruary 25, 2026

Central Coast Community Energy (3CE) Operations Board
February 25, 2026