AGENDA
City of Carlsbad | City of Del Mar | City of Escondido | City of Oceanside | City of San Marcos | City of Solana Beach | City of Vista Board of Directors Regular Meeting Agenda
August 29, 2024, 2:00 p.m.
City of Oceanside, Council Chamber
300 North Coast Hwy, Oceanside CA 92054
Members of the public can observe the livestream of the meeting via Zoom by clicking:
https://us06web.zoom.us/j/81376410530
or telephonically by dialing:
(253) 215-8782
Meeting ID: 813 7641 0530
Members of the public can provide public comment in writing or orally in person as follows:
Written Comments: If you are unable to participate in person and you wish to make a comment, you may submit written comments prior to and during the meeting via email to:
[email protected]. All written comments will be posted online and become part of the meeting record. To ensure announcement of receipt of your written comments during the meeting, please submit all written comments by 12:00 p.m. prior to the commencement of the meeting. Public comments received in writing will not be read aloud at the meeting.
Oral Comments: Members of the public can address the Board on items on the agenda at the time the item is being addressed or during Public Comments for topics that are not listed on the agenda.
Speakers are limited to three (3) minutes each. In conformance with the Brown Act, no Board action can occur on items presented during Public Comment.
If you desire to speak during Public Comment, please fill out a speaker card and submit it to the Board Secretary. When you are called to speak, please come forward to the podium and state your name.
To address the Board regarding an item on the agenda, please fill out a speaker card and submit it to the Board Secretary before the Board Chair announces the item.
CALL TO ORDER
ROLL CALL
FLAG SALUTE
BOARD COMMENTS & ANNOUNCEMENTS
PUBLIC COMMENT
APPROVAL OF MINUTES
Minutes of the Regular Meeting held June 27, 2024
AGENDA
2 Clean Energy Alliance Board Meeting Agenda
August 29, 2024
Presentations
Consent Calendar
Item 1: Clean Energy Alliance Treasurer’s Report for May 2024 RECOMMENDATION:
Receive and file the Clean Energy Alliance Treasurer’s Report for May 2024.
Item 2: Consideration of Resolution No. 2024-011 Approving First Amended and Restated Clean Energy Alliance Wholesale Market Access Tariff Agreement with San Diego County Water Authority and Poseidon Resources (Channelside), LP RECOMMENDATION:
Adopt Resolution No. 2024-011 approving First Amended and Restated Clean Energy Alliance Wholesale Market Access Tariff Agreement with San Diego County Water Authority and Poseidon Resources (Channelside), LP and authorize the Chief Executive Officer to sign all documents, subject to General Counsel approval.
Item 3: Consideration of Resolution No. 2024-012 Approving Amendment No. 2 to Professional Services Agreement (PSA) with Maher Accountancy (“Maher”) RECOMMENDATION:
Adopt Resolution No. 2024-012 approving Amendment No. 2 with Maher for CCA Accounting Services, for an amount not to exceed $136,000, effective July 1, 2024, through June 30, 2025 and authorize the Chief Executive Officer to sign all documents, subject to General Counsel approval.
Item 4: Consideration of Resolution No. 2024-013 Approving Agreement with NRG for Congestion Revenue Rights Portfolio Management Services RECOMMENDATION:
Adopt Resolution No. 2024-013 approving an agreement with NRG for Congestion Revenue Rights Portfolio Management Services, for a term through December 31, 2027 and authorize the Chief Executive Officer to sign all documents, subject to General Counsel approval.
Item 5: Consideration of Resolution No. 2024-014 Approving Amendment No. 4 to Professional Services Agreement (PSA) with Hall Energy
RECOMMENDATION:
Adopt Resolution No. 2024-014 approving Amendment No. 4 with Hall Energy for Transactions Attorney Services, for a term through June 30, 2025, for an amount not to exceed $65,000 per fiscal year beginning FY 2023/24 and authorize the Chief Executive Officer to sign all documents, subject to General Counsel approval.
AGENDA
3 Clean Energy Alliance Board Meeting Agenda
August 29, 2024
Reports
Item 6: Clean Energy Alliance Chief Executive Officer Operational Report New Business
Item 7: Regulatory Update
RECOMMENDATION:
Receive the Regulatory update from Keyes and Fox.
Item 8: Power Charge Indifference Adjustment (PCIA) Review RECOMMENDATION:
Receive a presentation from Keyes and Fox on the Power Charge Indifference Adjustment (PCIA) of Clean Energy Alliance’s member agencies.
Item 9: Rancho Peñasquitos Power Purchase Agreement (PPA) RECOMMENDATION:
Adopt Resolution No. 2024-015 approving a 10-year PPA with the San Diego County Water Authority for the Rancho Peñasquitos hydrogenerator to serve the Channelside account, effective January 2025.
Item 10: Deer Creek Solar I, LLC Power Purchase Agreement (PPA) RECOMMENDATION:
Adopt Resolution No. 2024-016 approving a 15-Year Power Purchase Agreement with Deer Creek Solar I, LLC for solar renewable energy and storage capacity for an amount not to exceed $82,026,000 and authorize the Chief Executive Officer to execute all documents, subject to Transactions Attorney approval.
BOARD MEMBER REQUESTS FOR FUTURE AGENDA ITEMS
NEXT MEETING: Regular Board Meeting September 26, 2024, City of Oceanside, 300 North Coast Highway, Oceanside, CA 92054
If you are an individual with a disability and need a reasonable modification or accommodation pursuant to the Americans with Disabilities Act (“ADA”), please contact [email protected] prior to the meeting for assistance.
Clean Energy Alliance Board of Directors Regular Meeting Minutes June 27, 2024, 2 p.m.
City of Oceanside, Council Chamber
300North Coast Hwy,Oceanside CA 92054
CALL TO ORDER: Chair Druker called to order the Regular Meeting of the Clean Energy Alliance at 2 p.m.
ROLL CALL: Board Members: Becker, Bhat-Patel, Musgrove, Chair Druker.
Alternate Board Member: Joyce.
Vice Chair Melendez arrived at 2:03 p.m.
Board Member Garcia arrived to participate virtually at 2:33 p.m.
FLAG SALUTE: Alternate Board Member Joyce led the flag salute.
BOARD COMMENTS & ANNOUNCEMENTS: None.
PUBLIC COMMENT: None.
APPROVAL OF MINUTES:
Minutes of the Special Meeting held May 30, 2024
Motion by Board Member Musgrove seconded by Board Member Becker, to approve the minutes as presented. Motion carried, 5/0/2 (Melendez, Garcia – Absent).
Presentations
Consent Calendar
Item 1: Clean Energy Alliance Treasurer’s Report for April 2024 RECOMMENDATION:
Receive and file the Clean Energy Alliance Treasurer’s Report for April 2024.
Item 2: Consideration of Resolution No. 2024-008 approving a Professional Services Agreement (PSA) with Bayshore Consulting Group, Inc.
RECOMMENDATION:
Adopt Resolution No. 2024-008 approving a PSA with Bayshore Consulting Group, Inc. for CCA Operations Consultant Services for an amount not to exceed $200,000 effective July 1, 2024 through June 30, 2025.
Motion by Board Member Musgrove seconded by Board Member Becker, to approve the Consent Calendar.
Motion carried, 6/0/1 (Garcia – Absent).
Reports
Item 3: Clean Energy Alliance Chief Executive Officer Operational Report
CEO Greg Wade presented the report, providing an update on recent outreach efforts in response to the launch in the City of Oceanside and the City of Vista, as well as an update on the Solar Plus program.
CEA Board received report.
Public Hearing
Item 4: Consideration of Resolution 2024-009, Approving the Fiscal Year 2024-2025 Budget and Setting Rates for Clean Energy Alliance Effective November 1, 2024 RECOMMENDATION:
1) Conduct the Public Hearing: Open the Public Hearing, Receive Public Testimony, and Close the Public Hearing.
2) Adopt Resolution No. 2024-009, Setting Rates for Clean Energy Alliance Effective November 1, 2024, Implementing the Option 3 (Winter Rate Increase 30%; Summer Rate Increase 15%) Rate change; or Adopt Resolution No. 2024-009, Setting Rates for Clean Energy Alliance Effective November 1, 2024, Implementing the Option 4 (Winter Rate Increase 40%; Summer Rate Increase 10%) Rate Change.
3) Adopt Resolution No. 2024-010, approving the Fiscal Year 2024/2025 Budget, based on the Rate Change Option Adopted in Resolution No. 2024-009.
CEA Board held the Public Hearing, Motion by Alternate Board Member Joyce, seconded by Board Member Musgrove, to adopt Resolution No. 2024- 009 Setting Rates for Clean Energy Alliance Effective November 1, 2024, Implementing the Option 4 (Winter Rate Increase 40%; Summer Rate Increase 10%) Rate Change; and to adopt Resolution 2024-010 approving the Fiscal Year 2024/2025 Budget, based on the Rate Change Option Adopted in Resolution No. 2024-009, 7/0.
New Business
Item 5: Regulatory Update
RECOMMENDATION:
Receive the Regulatory update from Keyes and Fox.
Regulatory Attorney Tim Lindl provided the update.
CEA Board received report.
NEXT MEETING: Regular Board Meeting July 25, 2024, City of Oceanside, 300 North Coast Highway, Oceanside, CA 92054
BOARD MEMBER REQUESTS FOR FUTURE AGENDA ITEMS:
Board Member Musgrove requested that Keys and Fox provide a report on the Power Charge Indifference Adjustment (PCIA) for each member agency, Board Member Becker requested taking the GHG free allocation, Board Member Garcia requested a study on the potential for a credit rebate for the City of Escondido’s PCIA.
ADJOURN: Chair Druker adjourned the meeting at 2:52 p.m. _______________________________________
Kaylin McCauley
Board Secretary/Administrative Assistant
Staff Report
DATE: August 29, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Andy Stern, Interim Chief Financial Officer/Treasurer ITEM 1: Clean Energy Alliance Treasurer’s Report
RECOMMENDATION:
Receive and File Clean Energy Alliance (CEA) Interim Treasurer’s Report for May 2024.
BACKGROUND AND DISCUSSION:
This report provides the Board with the following financial information through May 31, 2024:
• Statement of Financial Position (Unaudited and preliminary) – Reports assets, liabilities, and financial position of the CEA as of May 31, 2024.
• Statement of Revenues, Expenses and Changes in Net Position (Unaudited and preliminary) for the twelve months ended May 31, 2024.
• Budget to Actuals Comparison Schedule (Unaudited and preliminary) – Reports actual revenues and expenditures compared to the annual amended budget as of May 31, 2024. • List of Payments Issued – Reports payments issued for May 2024.
As of May 31, 2024, liabilities represent invoices and estimated accruals for energy and services received but not yet paid. The noncurrent liabilities relate to debt with JPMorgan as well as amounts due to the member cities of Carlsbad, Del Mar and Solana Beach. CEA is currently making interest only payments on the debt from JPMorgan. The amounts due to the member agency were for start-up costs and services provided to CEA for the period December 2019 to June 2020.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
August 29, 2024
CEA Treasurer’s Report
ASSETS
Current assets
Cash and cash equivalents $ 3,454,651
Accounts receivable, net of allowance 15,679,086
Accrued revenue 7,552,138
Prepaid expenses 5,607,631
Deposits 770,000
Total current assets 33,063,506
Noncurrent assets
Restricted cash 187,000
Deposits 55,376
Total noncurrent assets 242,376
Total assets 33,305,882
LIABILITIES
Current liabilities
Accrued cost of electricity 26,905,034
Accounts payable 901,134
Other accrued liabilities 227,511
Interest payable 154,071
Total current liabilities 28,187,750
Noncurrent liabilities
Security deposits - energy suppliers 496,150
Revolving line of credit 21,950,000
Total noncurrent liabilities 22,446,150
Total liabilities 50,633,900
NET POSITION
Unrestricted (deficit) $ (17,328,018)
These financial statements do not contain note disclosures, have not been subjected to an audit or review or compilation engagement, and no assurance is provided on them.
CLEAN ENERGY ALLIANCE
STATEMENT OF NET POSITION
As of May 31, 2024
August 29, 2024
CEA Treasurer’s Report
OPERATING REVENUES
Electricity sales, net $ 164,499,932
OPERATING EXPENSES
Cost of electricity 168,996,777
Contract services 4,350,657
Staff compensation 609,751
Other operating expenses 373,788
Total operating expenses 174,330,973
Operating income (loss) (9,831,041)
NONOPERATING REVENUES (EXPENSES)
Interest income 212,658
Interest expense (1,257,351)
Nonoperating revenues (expenses), net (1,044,693)
CHANGE IN NET POSITION (10,875,734)
Net position at beginning of year (6,452,284)
Net position at end of period $ (17,328,018)
These financial statements do not contain note disclosures, have not been subjected to an audit or review or compilation engagement, and no assurance is provided on them.
CLEAN ENERGY ALLIANCE
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
Eleven Months ended May 31, 2024
August 29, 2024
CEA Treasurer’s Report
BUDGET TO ACTUALS COMPARISON SCHEDULE
At its June 2023, board meeting, the CEA Board approved the Fiscal Year (FY) 2023/24 budget approving $213,411,000 in total operating and nonoperating expenses. For the year-to-date, $177,032,000 has been expended. Revenues from electricity sales for the year-to-date reached $165,944,000. The overall change in available fund balance (ignoring loan proceeds) for the year-to-date was an decrease of $10,876,000.
The Budget to Actuals Comparison Schedules as of May 31, 2024, is shown on the next page.
August 29, 2024
CEA Treasurer’s Report
ANNUAL
BUDGET
YEAR-TO-DATE
ACTUAL
ANNUAL
BUDGET
VARIANCE
Operating Revenues
Energy Sales $ 230,915,000 165,943,594 $ 64,971,406
Operating Expenses
Power Supply 200,000,000 168,996,777 31,003,223
Data Manager / Call Center 2,500,000 2,036,620 463,380
Staffing/Consultants 3,000,000 925,271 2,074,729
Legal Services 467,500 395,459 72,041
Professional Services 1,448,885 1,278,954 169,931
Audit Services 10,000 23,421 (13,421)
Software & Licenses 15,000 42,662 (27,662)
Membership Dues 292,040 274,523 17,517
G&A (includes Bad Debt expense) 4,927,780 1,800,948 3,126,832 Total Operating Expenses 212,661,205 175,774,635 36,886,570 Operating Income (Loss) 18,253,795 (9,831,041) 28,084,836 Financing
Interest Income 50,000 212,658 (162,658)
Interest Expense (750,000) (1,257,351) 507,351
Net Interest Income (Expense) (700,000) (1,044,693) 344,693 $ 17,553,795 $ (10,875,734) $ 28,429,529
CLEAN ENERGY ALLIANCE
BUDGETARY COMPARISON SCHEDULE
Eleven Months ended May 31, 2024
Change in Net Position
These financial statements do not contain note disclosures, have not been subjected to an audit or review or compilation engagement, and no assurance is provided on them.
August 29, 2024
CEA Treasurer’s Report
LIST OF PAYMENTS ISSUED
The report on the following page provides the detail of payments issued by CEA for the month. All payments were within approved budget.
August 29, 2024
CEA Treasurer’s Report
Date Type Vendor Description Amount
05/01/2024Wire JPMorgan 19-Apr-2024 19-May-2024 36,619.03 05/01/2024ACH/CHECK FABICK, EMILY April 26 2024 - Expense reimbursement 100.00 05/01/2024ACH/CHECK FABICK, EMILY April 16 2024 - Expense reimbursement 469.82 05/01/2024ACH/CHECK FABICK, EMILY April 16 2024 - Expense reimbursement 945.36 05/01/2024ACH/CHECK Neyenesch Printers Printing 2,527.52 05/01/2024ACH/CHECK SDG&E(Service Fees) For services rNovember 1, 2023 to December 31, 2023. 65,594.00 05/01/2024ACH/CHECK Vista Chamber of Commerce Vista Magazine Advertising Summer 2024 Issue #2 of 2 445.00 05/01/2024ACH/CHECK Z| NEMS NEM Cash Out 5,469.45
05/03/2024Wire SAAVI ENERGY SOLUTIONS, LLC. Firm Resourre Adequacy - (August 2024) Prepayment 105,000.00 05/03/2024ACH/CHECK BURKE, WILLIAMS & SORENSEN, LLP FEES FOR PROFESSIONAL SERVICES THROUGH March 31, 2024 7,846.84 05/03/2024ACH/CHECK EMPOWER (401a) Employee Retirement - 05/03/2024 6,386.92 05/03/2024ACH/CHECK EMPOWER (457b) Employee Retirement Contribution - 05/05/2024 4,117.32 05/03/2024ACH/CHECK MCCAULEY, KAYLIN Expense Reimbursement - May 1, 2024 272.71 05/06/2024Wire THE ENERGY AUTHORITY April 2024 - CAISO Weekly Settlement 22,031.21 05/06/2024ACH/CHECK CALPINE ENERGY SOLUTIONS March 2024 Services - 182,175 Meters @ $0.85 179,848.75 05/06/2024ACH/CHECK River City Bank CC April 2024 Expenses 5,601.52 05/07/2024ACH/CHECK Evolution Affairs, LLC March 2024 - Professional Service 1,102.50 05/07/2024ACH/CHECK The Bayshore Consulting Group, Inc April 2024 - CCA Operations Consulting 8,662.50 05/08/2024ACH/CHECK Neyenesch Printers Printing 119.88
05/08/2024ACH/CHECK Neyenesch Printers Printing 3,116.71 05/09/2024ACH/CHECK USPS First-Class Mail and First-Class Package Service 17,340.25 05/10/2024ACH/CHECK HOWARD, ROB Jan 10, 2024 to Apr 18, 2024 2,743.90 05/10/2024ACH/CHECK PILLSBURY WINTHROP SHAW PITTMAN For Professional Services through March 31, 2024 2,432.50 05/10/2024ACH/CHECK SPECIAL DISTRICT RISK MANAGEMENT Coverage Month: June 2024 10,734.50 05/13/2024Wire THE ENERGY AUTHORITY April 2024 - CAISO Weekly Settlement 153,878.70 05/13/2024ACH/CHECK Tripepi, Smith & Associates, Inc. April 2024 - Communications and Marketing Service 13,498.19 05/13/2024ACH/CHECK Z| NEMS NEM Cash Out 255.13
05/14/2024Wire Pacific Gas & Electric July 2024 - RA Notional 400,000.00 05/14/2024ACH/CHECK MCGEE, KAITLIN Expense Reimbursement - Apr 4, 2024 to Apr 26, 2024 1,420.89 05/14/2024ACH/CHECK USPS First-Class Mail and First-Class Package Service 658.65 05/15/2024ACH/CHECK USPS First-Class Mail and First-Class Package Service 973.10 05/16/2024ACH/CHECK BRAUN BLAISING SMITH WYNNE March 2024 - General Matters and Joint CCA Costs 900.00 05/16/2024ACH/CHECK Maher Accountancy Accounting during the month of April 2024 9,500.00 05/16/2024ACH/CHECK State Compensation Insurance Fund Monthly - Worker’s Comp AUTOPAY 452.75 05/16/2024ACH/CHECK USPS First-Class Mail and First-Class Package Service 860.72 05/17/2024ACH/CHECK Evolution Affairs, LLC April 2024 - Professional Service 735.00 05/17/2024ACH/CHECK MAINSTREET OCEANSIDE, INC. Oceanside Farmers Market booth 4-4-24 165.00 05/17/2024ACH/CHECK Z| NEMS NEM Cash Out 95,766.75
05/20/2024Wire EDF TRADING NORTH AMERICA April 2024 - Capacity Purchase 706,500.00 05/20/2024Wire JPMorgan 19-Apr-2024 19-May-2024 68,733.36 05/20/2024Wire LEAPFROG POWER, INC. May 2024 RA 7,638.00 05/20/2024Wire MCE (MARIN CLEAN ENERGY) April 2024 South System RA Sale 165,000.00 05/20/2024Wire Orange County Power Authority April 2024 - System Flex -RA SWAP 5,000.00 05/20/2024Wire SDG&E April 2024 REC Sales - LT Bundled & Unbundled 2,055,786.70 05/20/2024Wire SDG&E Apr-24 Resource Adequacy Sales (MCAM) 122,503.68 05/20/2024Wire SEMPRA April 2024 - Capacity Purchases 1,139,000.00 Clean Energy Alliance
PAYMENTS ISSUED DURING MAY 2024
August 29, 2024
CEA Treasurer’s Report
05/20/2024Wire THE ENERGY AUTHORITY April 2024 - CAISO Weekly Settlement 244,230.78 05/20/2024ACH/CHECK CITY OF CARLSBAD Payment due to member cities 186,571.79 05/20/2024ACH/CHECK CITY OF DEL MAR Reimburse City of Del Mar 151,892.97 05/20/2024ACH/CHECK City of Solana Beach Payment to member cities 165,552.69 05/20/2024ACH/CHECK Nixon Peabody LLP FOR PROFESSIONAL SERVICES RENDERED through April 30, 2024 16,696.72 05/20/2024ACH/CHECK Tullett Prebon Americas Corp April 2024 - Broker Fees 90,000.00 05/22/2024ACH/CHECK Hall Energy Law PC March 2024 - Energy Procurement Counsel Services 10,140.00 05/22/2024ACH/CHECK Neyenesch Printers Printing 1,917.25 05/22/2024ACH/CHECK WADE, GREG May 2023 - Expense Reimbursement 198.93 05/22/2024ACH/CHECK Z| NEMS NEM Cash Out 469.12
05/23/2024ACH/CHECK EMPOWER (401a) Employee Retirement - 05/25/2024 6,386.92 05/23/2024ACH/CHECK EMPOWER (457b) Employee Retirement Contribution - 05/25/2024 4,117.32 05/23/2024ACH/CHECK Neyenesch Printers Printing 1,458.29 05/23/2024ACH/CHECK USPS First-Class Mail and First-Class Package Service 327.97 05/24/2024ACH/CHECK Keyes & Fox LLP April 2024 - Professional Services 21,878.00 05/28/2024Wire DYNASTY POWER Net balance for period of April 2024 - Environmental Attribute 255,925.00 05/28/2024Wire Powerex Transactions for the Period of May 2024 98,562.50 05/28/2024Wire Resi Station LLC Proxy Demand Response CEA Apr2024 3,780.00 05/28/2024Wire THE ENERGY AUTHORITY May 2024 - CAISO Weekly Settlement 340,912.56 05/28/2024ACH/CHECK Tripepi, Smith & Associates, Inc. April 2024 - Communications and Marketing Service 1,427.50 05/28/2024ACH/CHECK Tullett Prebon Americas Corp April 2024 - Broker Fees - RA purchases 4,000.00 05/29/2024ACH/CHECK Pacific Energy Advisors, Inc April 2024 - Technical Consulting Advisors 33,748.77 05/29/2024ACH/CHECK USPS First-Class Mail and First-Class Package Service 80.55 05/30/2024ACH/CHECK River City Bank CC April 2024 Expenses 348.11 05/30/2024ACH/CHECK THE ENERGY AUTHORITY April 2024 - Resource Management Monthly Fees 11,700.00 05/30/2024ACH/CHECK USPS First-Class Mail and First-Class Package Service 968.50 05/30/2024ACH/CHECK Z| NEMS NEM Cash Out 5,274.74
05/31/2024ACH/CHECK FABICK, EMILY May 23 2024 - Expense reimbursement 55.92 Total for Operating Account 7,097,377.71
05/23/2024 Lockbox Constellation Generation Company March 2024 - Power Purchase 235,174.60 05/23/2024 Lockbox MORGAN STANLEY CAPITAL GROUP 4,209,810.62 05/23/2024 Lockbox Shell Oil North America March 2023 - Energy Purchases 4,128,044.25 05/23/2024 Lockbox Tecolote Wind LLC April 2024 - Resource Adequacy Benefits 62,687.50 05/23/2024 Lockbox NRG Power transactions for FEB-2024 -MAR-2024 2,324,074.56 Total for Lockbox Account 10,959,791.53
Staff Report
DATE: August 29, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Gregory Wade, Chief Executive Officer
ITEM 2: Consider Adoption of Resolution No. 2024-011, Approving the First Amended and Restated Clean Energy Alliance Wholesale Market Access Tariff Agreement with San Diego County Water Authority and Poseidon Resources (Channelside), LP RECOMMENDATION:
Adopt Resolution No. 2024-011, approving the First Amended and Restated Clean Energy Alliance Wholesale Market Access Tariff Agreement with San Diego County Water Authority and Poseidon Resources (Channelside), LP and authorize the Chief Executive Officer to sign all documents, subject to General Counsel approval.
BACKGROUND AND DISCUSSION:
At its October 26, 2023 Regular Meeting, the Clean Energy Alliance (CEA) Board approved the Clean Energy Alliance Wholesale Market Access Tariff (WMAT) Agreement with San Diego County Water Authority (SDCWA) and Poseidon Resources (Channelside) LP for service to the Channelside account. As CEA staff has been working through the planning tasks for implementation of the WMAT Agreement and serving the Channelside account effective January 1, 2025, staff has identified amendments that are recommended to the Board for consideration. These amendments include:
• Correcting the Channelside address in the opening paragraph; • Updating Section 3. Key Contacts;
• Updating Attachment A, Section I.1 Customer Credit Support Obligations o Changes the cash reserve deposit from three highest months invoices to the lowest cumulative cash balance for the upcoming calendar year.
The proposed changes reflect a better understanding of the cash and credit needs related to serving the Channelside account.
FISCAL IMPACT:
The cash deposit provided by the SDCWA will ensure that CEA has sufficient resources to serve the Channelside account.
August 29, 2024
WMAT
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Office
ATTACHMENTS:
A. Resolution No. 2024-011, Approving First Amended and Restated Clean Energy Alliance Wholesale Market Access Tariff Agreement with San Diego County Water Authority and Poseidon Resources (Channelside) LP.
B. First Amended and Restated Clean Energy Alliance Wholesale Market Access Tariff Agreement with San Diego County Water Authority and Poseidon Resources (Channelside) LP.
CLEAN ENERGY ALLIANCE
RESOLUTION NO. 2024-011
A RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN ENERGY
ALLIANCE APPROVING FIRST AMENDED AND RESTATED CLEAN ENERGY
ALLIANCE MARKET ACCESS TARIFF AGREEMENT WITH SAN DIEGO
COUNTY WATER AUTHORITY AND POSEIDON RESOURCES
(CHANNELSIDE), LP
WHEREAS, Clean Energy Alliance (CEA) is a Joint Powers Authority, formed in November 2019, whose members cities include Carlsbad, Del Mar, Escondido, Oceanside, San Marcos, Solana Beach and Vista; and
WHEREAS, a the CEA Board of Directors approved the Wholesale Market Access Tariff (WMAT) Agreement with San Diego County Water Authority and Poseidon Resources (Channelside), LP at its regular board meeting October 25, 2023; and WHEREAS, through working on implementation of the WMAT Agreement, staff has identified amendments to the WMAT agreements.
NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the Clean Energy Alliance, as follows:
Section 1. The Board of Directors of Clean Energy Alliance hereby approves the First Amended and Restated Clean Energy Alliance Market Access Tariff Agreement with San Diego County Water Authority and Poseidon Resources (Channelside), LP.
Section 2. This Resolution shall take effect immediately upon approval.
Attachment A
CEA No. Resolution 2024-011
WMAT Amendment
2 The foregoing Resolution was passed and adopted this 29th day of August, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED:
________________________________________
David Druker, Board Chair
ATTEST:
____________________________
Kaylin McCauley, Board Secretary
1 FIRST AMENDED AND RESTATED CLEAN ENERGY ALLIANCE
WHOLESALE MARKET ACCESS TARIFF AGREEMENT
THIS FIRST AMENDED AND RESTATED CLEAN ENERGY ALLIANCE WHOLESALE MARKET ACCESS TARIFF AGREEMENT (“WMAT Agreement”), is entered into this XX of XXXXXXXXXXXX 2024, by and between CLEAN ENERGY ALLIANCE (“CEA”), an independent joint powers authority at 5857 Owens Ave, 3rd Floor, Carlsbad, CA 92008, POSEIDON RESOURCES (“Channelside”) LP, a Delaware limited partnership, at 4590 Carlsbad Blvd., Carlsbad, CA 92008 and SAN DIEGO COUNTY WATER AUTHORITY (“SDCWA”), a County Water Authority at 4677 Overland Ave, San Diego, CA 92123 (collectively “Parties”, individually a “Party”).
RECITALS:
A. CEA is an independent public agency duly organized under the provisions of the Joint Exercise of Powers Act of the State of California (Government Code Sections 6500 et seq.) (“Act”) with the power to conduct its business and enter into agreements.
B. CEA is the default energy provider for the City of Carlsbad.
C. Channelside has an active service account with San Diego Gas & Electric and has never been enrolled with CEA.
D. Pursuant to that certain Water Purchase Agreement dated December 20, 2012 (“WPA”) between Channelside and SDCWA, SDCWA has the sole authority and discretion to make decisions with respect to the Carlsbad Desalination Plant’s electricity supplier (“Channelside Account”) until the expiration of that WPA on December 20, 2045, at which time the Channelside Desalination Plant transfers to SDCWA.
E. The Parties agree that should this Wholesale Market Access Tariff Agreement (“WMAT Agreement”) create any obligations for Channelside that conflict with, or contravene contractual obligations set forth in the WPA between Channelside and SDCWA, the WPA will prevail and Channelside’s obligations will be limited thereto.
F. Dated November 28, 2023, CEA, Channelside and SDCWA entered into that certain Clean Energy Alliance Wholesale Market Access Tariff Agreement (“Original Agreement”) for the purpose of enrolling the Channelside Account in CEA pursuant to such Original Agreement. The Parties now desire to amend and restate the Original Agreement in its entirety and replace it with this WMAT Agreement.
NOW, THEREFORE, the Parties mutually agree as follows:
Attachment B
2 1. TERM
The term of this WMAT Agreement shall be established in the Positive Enrollment Agreement (Attachment B), which is fully incorporated herein.
2. WHOLESALE MARKET ACCESS TARIFF ENROLLMENT
Upon enrollment with CEA, CEA shall concurrently enroll the following Channelside Account in the Wholesale Market Access Tariff program:
Account Name: Poseidon Rsrcs (Channelside)
Account Address: 4590 Carlsbad Blvd A, Carlsbad, CA. 92008 SDG&E Account Service Number: 0099 1371 1911 9
CEA will provide electric generation procurement pursuant to the Wholesale Market Access Tariff Portfolio Management Terms of Service (Attachment A), which are fully incorporated herein.
3. KEY CONTACTS AND NOTICE
a. The WMAT requires close participation among the Parties. Key contacts related to the WMAT Portfolio Management are as follows:
Clean Energy Alliance
NAME: Gregory Wade, Chief Executive Officer
ADDRESS: 5857 Owens Ave., Suite 2023, Carlsbad, CA 92008 EMAIL: [email protected]
PHONE #: (760) 209-6177
Channelside Water Resources
NAME: Michelle Peters
ADDRESS: 4590 Carlsbad Blvd., Carlsbad, CA 92008
EMAIL: [email protected]
PHONE #: 702-606-8742
San Diego County Water Authority
NAME: Brent Fountain
ADDRESS: 4677 Overland Ave., San Diego, CA 92123
EMAIL: [email protected]
PHONE #: 858-522-6806
b. All notices, demands, requests or approvals to be given under this Agreement shall be given in writing to the key contacts at the addresses or email addresses provided above and conclusively shall be deemed served (i) when delivered personally, (ii) on the second business day after the deposit thereof in the United States Mail, postage prepaid, registered or certified, 3 (iii) on the second business day after the deposit thereof in the United States Mail, postage prepaid, with a copy delivered by email, or (iv) when delivered by email and receipt of the email by the recipient is acknowledged. Changes in addresses or email addresses or key contacts may be provided in the same manner as other notices.
4. LIMITATION OF LIABILITY
Except to the extent otherwise expressly set forth in this Agreement, no Party shall be liable to any other for any special, indirect, incidental or consequential damages, losses or expenses, including, without limitation, loss of use, business, good will or revenue or loss of profits, or damages from work stoppage or failure to deliver power, incurred by one another or any of their affiliates, subsidiaries or successors, regardless of whether such damages are caused by breach of contract, willful misconduct, negligent act or omission, or other wrongful act of any of them.
5. CHANNELSIDE AND SDCWA LIABILITY
Channelside and SDCWA are jointly and severally responsible for the payment of all costs, expenses, reimbursements, penalties, termination costs and all other payments under this Agreement and as set forth in Attachment A, including, without limitation, direct and indirect conventional energy hedge costs, CAISO charges, including Congestion Revenue Rights charges, direct and indirect Resource Adequacy (RA) costs, including penalties for non-compliance with RA contracting requirements and costs associated with any assignment of RA agreements, direct and indirect short-term renewable energy costs, direct and indirect costs associated with long-term renewable energy requirements, including any assignment of long-term renewable energy agreement, administrative costs, legal costs and technical consulting costs, and direct and indirect costs associated with opting-out or terminating this Agreement.
6. DRAFTING AMBIGUITIES
The Parties agree that they are aware that they have the right to be advised by counsel with respect to the negotiations, terms and conditions of this Agreement, and the decision of whether or not to seek advice of counsel with respect to this Agreement is a decision which is the sole responsibility of each Party. This Agreement shall not be construed in favor of or against either Party by reason of the extent to which each Party participated in the drafting of the Agreement.
7. ENTIRE CONTRACT; MODIFICATION
This Agreement, including its Exhibits, contains the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by all Parties. 4 8. COUNTERPARTS/ELECTRONIC SIGNATURE
This Agreement may be executed in counterparts, each of which shall constitute an original. This Agreement may be executed electronically with the same force and effect as an original ink signature.
9. SIGNATORIES
Each signatory and Party hereto hereby warrants and represents to each of the other Parties that he/she/it has legal authority and capacity and direction from its principal to enter into this Agreement, that all resolutions or other actions have been taken so as to enable he/she/it to enter into this Agreement and that he/she/it will indemnify and defend the other Parties should any such representations and warranties prove false.
IN WITNESS WHEREOF, the Parties to this WMAT Agreement through their duly authorized representatives have executed this WMAT Agreement as of the Effective Date.
SAN DIEGO COUNTY WATER AUTHORITY CLEAN ENERGY ALLIANCE, a Joint Powers Authority
By: _________________________ By: _________________________ Name: Dan Denham Name: Gregory Wade
Title: General Manager Title: Chief Executive Officer
APPROVED AS TO FORM: APPROVED AS TO FORM:
By: _________________________ By: _________________________ Name: Michael McDonnell Name: Johanna N. Canlas
Title: Assistant General Counsel Title: General Counsel Channelside Water Resouces ATTEST:
By: _________________________ By: _________________________ Name: Gregory Amaparano Name: Kaylin McCauley
Title: Interim Chief Executive Officer Title: Board Secretary 5 By: _________________________
Name: Michelle Peters
Title: Chief Operating Officer
6 ATTACHMENT A
WHOLESALE MARKET ACCESS TARIFF
PORTFOLIO MANAGEMENT TERMS OF SERVICE
Effective Date of WMAT Portfolio Establishment: January 1, 2024 WMAT Portfolio Name: Channelside Account WMAT Portfolio
1. DEFINITION OF TERMS
a. Channelside WMAT Rate: The per kWh rate that will be billed through the San Diego Gas & Electric bill that will be calculated pursuant to Section G of this agreement.
b. Credit Support: May take the form of cash or letters of credit to fulfill collateral or other credit requirements as determined by energy suppliers. c. Direct Costs: Direct Costs are defined as costs incurred that are directly related to the administration and management of the Channelside Wholesale Market Access Tariff Portfolio. Examples of these costs include, but are not limited to, contracted cost of energy, proportional cost of energy, legal costs, technical advisors and scheduling coordinator services.
d. Indirect Costs: Indirect Costs are defined as costs incurred by Clean Energy Alliance (“CEA”), that are not directly related to the administration and management of the Channelside Wholesale Market Access Tariff Portfolio, but which Channelside and San Diego County Water Authority (“SDCWA”) may receive a benefit from. Examples of these costs include, but are not limited to, administrative overhead.
e. Lockbox: CEA’s Secured Account Managed by River City Bank that provides credit support for secured creditors.
f. Long-Term Renewable Energy: Long-Term Renewable Energy is renewable energy procured through contracts of 10 years or more in duration or through ownership interests or ownership agreements for eligible renewable energy resources. g. Procurement Plan: Plan that details the mutually agreed upon actions to be taken by CEA and SDCWA to procure the power supply products including Conventional Energy Hedge, Resource Adequacy, Short-Term and Long-Term Renewable 7 Energy. The initial Procurement Plan will be finalized between the Parties by January 31, 2024, and will be reviewed and updated at least annually. h. Short-Term Renewable Energy: Renewable energy procured through contracts of less than 10 years.
A. TERMS RELATED TO CONVENTIONAL ENERGY HEDGE TRANSACTIONS CEA and SDCWA will work cooperatively to develop a conventional energy hedge strategy that will be used in developing a Procurement Plan for the Channelside Account WMAT Portfolio. The hedge strategy will be consistent with CEA’s adopted Energy Risk Management Policy (Exhibit 1), and other CEA compliance requirements, and minimize, to the extent commercially reasonable, market cost exposure to SDCWA and Channelside.
CEA will procure conventional energy hedges for the Channelside Account WMAT portfolio in accordance with the Procurement Plan. CEA will confer with SDCWA regarding planned energy hedge solicitations, offers and recommendations for transactions, and periodically report energy hedge positions relative to projected energy requirements.
If requested by SDCWA, CEA will use reasonable efforts to negotiate an assignment provision for Conventional Energy Hedge Agreements whereby such agreement(s) may be assigned to SDCWA should there be a desire to opt-out of CEA service prior to the end of said agreement(s). Such assignment provisions are subject to the consent of the energy supplier.
Direct and indirect conventional energy hedge costs will be reimbursed to CEA through the Channelside WMAT Rate, subject to an annual true-up, pursuant to Section G (CHANNELSIDE WMAT RATE SETTING) below.
B. TERMS RELATED TO CAISO CHARGES & CONGESTION REVENUE RIGHTS The Channelside Account WMAT Portfolio will include weekly California Independent System Operator (“CAISO”) charges attributable to the Channelside Account load, including weekly Congestion Revenue Rights (“CRR”) activity, which can be either a net charge or credit, and monthly CRR receipts. In order to distinguish and segregate out these transactions from CEA’s other customer activity, a separate Scheduling Coordinator Identification (“SCID”) will be established for the Channelside Account load. CEA will invoice Channelside monthly, by the 10th of each month for the prior month’s CAISO activity. The invoices will be due within 30 days. In the event there is a net credit, the credit will carry forward to offset charges invoiced the following month.
C. TERMS RELATED TO RESOURCE ADEQUACY TRANSACTIONS
8 The Channelside Account WMAT Portfolio will include Resource Adequacy (“RA”) costs attributable to the Channelside Account load. The California Public Utilities Commission (“CPUC”) adopted the RA policy Framework (Public Utilities Code section 380) in 2004 in order to ensure the reliability of electric service in California. CEA’s annual RA requirements are determined by the CPUC and includes three types: System, Local and Flexible. The local obligation is a three-year forward local obligation and CEA must meet 100% of its local obligation in the immediately following two years and 50% of the third year by October of each year. The obligation is based on a Year-Ahead Resource Adequacy (“YARA”) filing, submitted in April of each year. Beginning in April 2024, CEA will include the forecasted 2025 load for the Channelside account in its YARA.
SDCWA agrees to work with CEA to develop the load forecast upon which the RA obligation will be based. The RA requirements attributed to the Channelside Account will be calculated as follows: ((Channelside Account Forecasted Load included in YARA/Total Forecasted CEA Load) X total CEA RA Requirements) minus RA contracts dedicated to the Channelside Account WMAT Portfolio. CEA will work with SDCWA to develop a RA procurement strategy which will inform the development of the Resource Adequacy section of the Procurement Plan. CEA will make its best efforts to acquire the necessary RA to meet the RA requirements pursuant to the Procurement Plan and will confer with SDCWA with regards to RA status throughout the procurement processes. To the extent the Channelside Account WMAT Portfolio RA requirements are included in contracts for CEA’s other RA requirements, the Channelside Account WMAT Portfolio’s proportionate share percentage will be determined by dividing the Channelside Account Forecasted Load included in YARA by the Total Forecasted CEA Load in YARA.
To the extent that CEA has used reasonable efforts to meet its RA contracting requirements that includes the Channelside Account RA Requirements and is unable to meet the full obligation, and CEA is assessed a penalty for non-compliance, the Channelside Account WMAT Portfolio will be responsible for its proportionate share of the RA penalty, based on the same proportional share calculation detailed above.
CEA will work with SDCWA to develop the RA procurement strategy, however, SDCWA acknowledges that CEA is the entity with the RA compliance obligation and, therefore, has final decision-making authority over RA procurement.
If requested by SDCWA, CEA will use reasonable efforts to negotiate an assignment provision for Resource Adequacy Agreements whereby such agreement(s) may be assigned to SDCWA should there be a desire to opt-out of CEA service prior to the end of said agreement(s). Such assignment provisions are subject to the consent of the energy supplier.
Direct and indirect RA costs will be reimbursed to CEA through the Channelside WMAT Rate, subject to an annual true-up, pursuant to Section G (CHANNELSIDE WMAT RATE SETTING) below.
D. TERMS RELATED TO SHORT-TERM RENEWABLE ENERGY TRANSACTIONS 9 CEA must comply with the California Renewable Portfolio Standard (“RPS”) that is implemented, administered and enforced by the CPUC. The RPS program requires CEA, as an electric load serving entity, to procure 60% of its electricity portfolio from eligible renewable energy resources by 2030. The Channelside Account WMAT Portfolio will include short-term renewable energy supply products. The short-term renewable energy supply requirements will be determined by subtracting the long-term renewable energy requirements described in Section E from the total renewable energy requirements as determined by the CEA power supply selection on the Positive Enrollment Agreement. CEA and SDCWA will develop a Short-Term Renewable Energy procurement strategy that will be used to develop the Short-Term Renewable Energy section of the Procurement Plan. CEA will procure Short-Term Renewable Energy pursuant to the Procurement Plan.
In the event the Channelside Account WMAT short-term renewable energy requirements are included in a contract for CEA’s other short-term renewable energy requirements, the Channelside Account WMAT Portfolio’s proportionate share percentage will be determined by dividing the Channelside short-term renewable energy requirements (less short-term renewable energy contracts dedicated to the Channelside Account WMAT Portfolio) by the total CEA short-term energy requirements, with both the Channelside and CEA requirements being measured in kilowatt-hours (“kWh”). This calculated proportionate share will be included in the rate setting process pursuant to Section G (CHANNELSIDE WMAT RATE SETTING) below.
CEA will acquire the necessary short-term renewable energy supply through any combination of open solicitation, bilateral negotiations or sources provided through agreements with SDCWA.
CEA will work with SDCWA to develop the short-term renewable energy procurement strategy, however, SDCWA acknowledges that CEA is the entity with the short-term renewable energy compliance obligation and, therefore, has final decision-making authority over short-term renewable energy procurement.
The RPS requirements are broken down into Compliance Periods, with CEA’s compliance being determined after the end of each Compliance Period. These Compliance Periods are:
Compliance Period 5 – 2025 – 2027
Compliance Period 6 – 2028 – 2030
Compliance with the RPS requirements will not be determined by the CPUC until after the end of each Compliance Period. In the event that CEA is found non-compliant with the RPS requirements for short-term renewable energy in a Compliance Period during which CEA was providing service to the Channelside Account under this WMAT Agreement, SDCWA acknowledges that it will be responsible for its proportionate share of any penalty related to non-compliance irrespective of whether the Channelside Account is being served by CEA at the time the penalty is assessed. 10 If requested by SDCWA, CEA will use reasonable efforts to negotiate an assignment provision for Short-Term Renewable Energy Agreements whereby such agreement(s) may be assigned to SDCWA should there be a desire to opt-out of CEA service prior to the end of said agreement(s).
Such assignment provisions are subject to the consent of the energy supplier.
Direct and indirect short-term renewable energy costs will be reimbursed to CEA through the Channelside WMAT Rate, subject to a true-up, pursuant to Section G (CHANNELSIDE WMAT RATE SETTING) below.
E. TERMS RELATED TO LONG-TERM RENEWABLE ENERGY TRANSACTIONS CEA must comply with the CPUC’s requirement for long-term renewable energy supply procurement, currently set at 65% of the state-mandated RPS requirement for each compliance period. As defined by the CPUC, long-term renewable energy contracts are for terms of 10-years or more, including ownership interests. The Channelside WMAT Portfolio will incorporate the long-term procurement requirement based on its proportionate share of CEA’s total retail sales during each compliance period, with both the requirement and the retail sales being measured in kWh. CEA will acquire the necessary long-term renewable energy supply, through any combination of open solicitation, bilateral negotiations, participation in San Diego Gas & Electric Voluntary Allocation or Market offer processes or sources provided through agreements with SDCWA.
Should the Channelside Account WMAT long-term renewable energy requirements be included in a contract for CEA’s other long-term renewable energy requirements, the Channelside Account WMAT Portfolio’s proportionate share percentage will be determined by dividing the Channelside long-term renewable energy requirements (less long-term renewable energy contracts dedicated to the Channelside Account WMAT Portfolio) by the total CEA long-term renewable energy requirements for the period. CEA will track progress towards the long-term renewable energy requirements and report the results to SDCWA on an agreed upon periodic basis.
CEA will work with SDCWA to develop the long-term renewable energy procurement strategy, however, SDCWA acknowledges that CEA is the entity with the long-term renewable energy compliance obligation and, therefore, has final decision-making authority over long-term renewable energy procurement.
Compliance with the RPS requirements will not be determined by the CPUC until after the end of each Compliance Period, as described above in Section D. In the event that CEA is found non-compliant with the RPS requirements for long-term renewable energy in a Compliance Period during which CEA was providing service to the Channelside Account under this WMAT Agreement, SDCWA acknowledges that it will be responsible for its proportionate share of any 11 penalty related to non-compliance irrespective of whether the Channelside Account is being served by CEA at the time the penalty is assessed.
If requested by SDCWA, CEA will use reasonable efforts to negotiate an assignment provision for Long-Term Renewable Energy Agreements whereby such agreement(s) may be assigned to SDCWA should there be a desire to opt-out of CEA service prior to the end of said agreement(s).
Such assignment provisions are subject to the consent of the energy supplier.
Direct and indirect costs related to the long-term renewable energy contracts will be reimbursed to CEA through the Channelside WMAT Rate, subject to a true-up, pursuant to Section G (CHANNELSIDE WMAT RATE SETTING) below.
F. TERMS RELATED TO ADMINISTRATIVE OVERHEAD FEE AND DIRECT ADMINISTRATIVE COSTS
The Channelside Account will be responsible for its per kWh proportionate share of CEA’s Administrative costs, including reserve contributions, in addition to any direct costs of managing the Channelside Account WMAT portfolio. The proportionate share of CEA’s Administrative costs will be calculated as follows: (CEA total annual adopted budget + reserve contribution – power supply budget)/total load for the covered year = per kWh Administrative Cost Component. The resulting per kWh rate will be included in the Channelside WMAT Rate as part of the rate setting in Section G below.
Channelside will also be responsible for any direct costs of managing the Channelside Account WMAT Portfolio, including but not limited to legal costs and technical consulting costs, which will be billed to Channelside as direct costs are incurred on a monthly basis and due within 30 days of invoice receipt.
G. CHANNELSIDE WMAT RATE SETTING
The Channelside WMAT per kWh rate will be calculated annually in November of each year, to be effective the following January. The annual per kWh rate will be calculated with the following formula:
Total Conventional Energy Hedge contracts + (current price curve * open position) + Resource Adequacy Costs + Short-Term Renewable Energy Costs + Long-Term Renewable Energy Costs = Total Energy Costs.
Total Energy Costs/Projected annual energy usage = per kWh energy component 12 Per kWh Energy Component + per kWh Administrative Cost Component = Total per kWh rate.
CEA will track and report actual revenue and expenses as compared to anticipated revenue and expenses on a monthly basis and provide the report to SDCWA by the end of the following month.
The per kWh rate will be re-evaluated if the year-to-date variance of actual revenues vs expenditures compared to anticipated revenues vs expenditures exceeds 10%. CEA reserves the right to revise the rate, which will be effective the first day of the next calendar month.
H. OPT-OUT PROVISIONS
SDCWA and Channelside must provide a written opt-out notice to CEA pursuant to the Positive Enrollment Agreement, which establishes a minimum opt-out notice period as the term of the longest energy contract, excluding those to be assigned to SDCWA, or three years, whichever is longer. The opt-out effective date is the later of (a) 3 years, or (b) the date upon which all outstanding transactions have been settled and paid for, whether through delivery or through early termination and payment of any termination payments to suppliers and all amounts owed to CEA.
In the event that there are outstanding energy supply agreements with terms beyond the minimum 3-year opt-out notice period, and SDCWA and Channelside desire to opt-out within the 3-year minimum period, CEA will work with SDCWA to terminate, liquidate or assign the energy supply contracts. SDCWA will be responsible to cover any losses incurred in such termination, liquidation or assignment, including termination payments to suppliers and reasonable costs and expenses incurred by CEA, including consulting and legal fees, arising from the termination, liquidation or assignment of such contracts.
SDCWA will be responsible for all CAISO charges that are assessed to the Channelside Account WMAT Portfolio SCID after opt-out, which may continue for several years in accordance with the CAISO tariff. Upon settlement of all costs, charges, and expenses, CEA shall return to Channelside the balance of the cash deposit required by Attachment A, Section I, Item 1.
I. CUSTOMER CREDIT SUPPORT OBLIGATIONS
1. Channelside will be required to post and maintain with CEA a cash deposit equal to the lowest cumulative negative cash balance rounded up to the nearest million dollar level for the Channelside Account based on the monthly cash flow projection for the coming calendar year. For example, if the lowest cumulative negative cash balance projection is $5.4 million, the cash deposit would be rounded up to $6.0 million. The 13 cash deposit is to be posted by December 15 of each year for the following calendar year. The cash flow will be tracked and updated monthly, with a copy provided to Channelside and SDCWA. If the rounded cumulative balance is projected to be more than 10% below the prior estimate, Channelside will post the difference within 10 work days of CEA providing Channelside and SDCWA with written notice. The cash flow projection for each calendar year will be updated by October 1 of the preceeding year. If the projection for the following year’s lowest cumulative negative cash balance is higher than the current year, CEA will return the excess amount to Channelside by December 31 of the current calendar year. Upon opt-out, CEA shall return the balance of the cash deposit to Channelside pursuant to Section H. Opt-Out Provisions.
2. Energy, RA and related contractual obligations require credit support. Credit support is determined by the seller and can take the form of cash collateral or letter of credit.
Alternatively, it may also take the form of a guarantee from Channelside for payment.
CEA will use reasonable efforts to minimize collateral requirements for the Channelside Account WMAT Portfolio through the use of CEA’s Lockbox. However, to the extent that credit support is required for the Channelside Account WMAT Portfolio beyond the Lockbox, Channelside shall be responsible for providing any required credit support for such transactions and ensuring that CEA’s other customers are not adversely affected by any additional credit requirements arising from transactions involving the Channelside Account WMAT Portfolio. 14 ATTACHMENT B
CLEAN ENERGY ALLIANCE
POSITIVE ENROLLMENT AGREEMENT
DATE: November 28, 2023___
SDG&E SERVICE ACCOUNT NAME: Poseidon Rsrcs (Channelside) SDG&E SERVICE ACCOUNT NUMBER: _0099 1371 1911 9
ENROLLMENT MONTH/YEAR: _January 2025_____________
CEA POWER SUPPLY: _X Clean Impact ______ Clean Impact Plus ______ Green Impact MINIMUM OPT-OUT NOTICE PERIOD: _Pursuant to Wholesale Market Access Tariff Agreement, Attachment A WMAT Portfolio Management Terms of Service Section H OPT-OUT PROVISIONS________ The Minimum Opt-Out Notice Period will take into account the longest-term energy contract, but no less than three years to ensure accommodation with the Year-Ahead Resource Adequacy process.
SDG&E POWER CHARGE INDIFFERENCE ADJUSTMENT (PCIA) VINTAGE: __2024________ PCIA Vintage is based on the enrollment date per SDG&E Rate Schedule CCA-CRS.
The undersigned is an authorized representative of the account listed above and agrees to enroll the account with Clean Energy Alliance effective on the account meter read date in the month of the Enrollment Date above.
_____________________________________________
NAME: Michelle Peters
TITLE: Director of Operations
DATE SIGNED
Acceptance by Clean Energy Alliance
_____________________________________________
NAME: Gregory Wade
TITLE: Chief Executive Officer
DATE SIGNED:
Staff Report
DATE: August 29, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Andrew Stern, Chief Financial Officer
ITEM 3: Consider Adoption of Resolution No. 2024-012 Approving Amendment No. 2 to the Agreement with Maher Accountancy for CEA Accounting Services for an amount not to exceed $136,000 and extending the term to be effective July 1, 2024, through June 30, 2025.
RECOMMENDATION:
Adopt Resolution No. 2024-012 approving Amendment No. 2 with Maher Accountancy (“Maher”) for CEA Accounting Services, for an amount not to exceed $136,000, effective July 1, 2024, through June 30, 2025 and authorizing the Chief Executive Officer to sign all documents, subject to General Counsel approval.
BACKGROUND AND DISCUSSION:
Maher has served as Clean Energy Alliance’s (CEA’s) outside accounting services provider starting on March 1, 2022. The services provided include accounts payable, payroll, accounts receivable, monthly general ledger accounting, processing Net Energy Metering (NEM) checks, providing monthly treasury reports and GAAP-compliant compiled financial statements including balance sheet, income statement and cash flows. In addition, Maher also manages the annual financial audit by coordinating with CEA’s selected independent auditor. Other services include the filing of various government reports and payroll tax returns. Maher has deep experience as it also provides similar accounting support services to a number of other California-based CCAs.
The initial contract with Maher covered the period from March 1, 2022, through February 28, 2023. The agreement was subsequently amended to extend through June 2024 at a fee of $9,500 per month plus a one-time fee of $10,000 for annual audit support services. The new agreement provides for a monthly fee of $10,500 plus a similar fee of $10,000 for annual support services. Staff feels that the increased amount is appropriate given that the services, especially payroll support, have increased since the prior year.
Maher’s services have been invaluable. The current agreement with Maher expired on June 30, 2024.
Maher has been providing services under the prior agreement without an amendment to extend the term since that date. A new extension would allow those services to continue.
August 29, 2024
Maher Accountancy
FISCAL IMPACT:
Funds for the Fiscal Year (FY) 24/25 agreement have been assumed in the CEA financial pro forma and are included in the proposed FY 24/25 Budget.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Office
ATTACHMENTS:
A. Resolution No. 2024-012, approving Amendment #2 between Clean Energy Alliance and Maher Accountancy for CCA Accounting Services
B. Amendment No. 2 between Clean Energy Alliance and Maher Accountancy CCA for CCA Accounting Services
CLEAN ENERGY ALLIANCE
RESOLUTION NO. 2024-012
A RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN ENERGY ALLIANCE APPROVING AMENDMENT NO. 2 TO EXTEND THE AGREEMENT WITH MAHER
ACCOUNTANCY FOR ONE YEAR FOR CCA ACCOUNTING SERVICES AND AUTHORIZING
THE CHIEF EXECUTIVE OFFICER TO EXECUTE THE AGREEMENT IN AN AMOUNT NOT TO EXCEED $136,000
WHEREAS, Clean Energy Alliance (CEA) is a joint powers authority established on November 4, 2019, and organized under the Joint Exercise of Powers Act (Government Code Section 6500 et seq.); and
WHEREAS, Maher Accountancy has provided accounting services to CEA since March 1, 2022; and
WHEREAS, Maher Accountancy’s services are needed on a continuing basis to provide general accounting services including accounts payable, payroll, and financial statement preparation; and
WHEREAS, Staff believes that Maher Accountancy’s fees are fair and reasonable.
NOW, THEREFORE, BE IT RESOLVED the Board of Directors of Clean Energy Alliance hereby finds, determines and resolves as follows:
Section 1. The foregoing recitals are true and correct and incorporated fully herein.
Section 2. Amendment No. 2 with Maher Accountancy for CCA Accounting Services effective July 1, 2024 through June 30, 2025 is hereby approved.
Section 3. The Chief Executive Officer is hereby authorized and directed to execute Amendment No. 2 with Maher Accountancy for an amount not to exceed $136,000 in a form substantially similar to that presented to the Board of Directors on August 29, 2024, with any changes subject to General Counsel approval.
Section 4. The Chief Executive Officer is hereby authorized and directed to execute such other documents and take such other and further actions as may be necessary and proper to accomplish the purposes of this resolution.
Attachment A
CEA No. Resolution 2024-012
Maher Amendment
The foregoing Resolution was passed and adopted this 29th day of August, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED:
________________________________________
David Druker, Chair
ATTEST:
_____________________________
Kaylin McCauley, Board Secretary
Amendment No. 2 to
Agreement Between Clean Energy Alliance and
Maher Accountancy for Financial Accounting Services
Effective July 1, 2024
Pursuant to the approval by the Clean Energy Alliance Board of Directors at its meeting on August 29, 2024, the Agreement between Clean Energy Alliance (CEA) and Maher Accountancy dated March 1, 2022 is amended as follows:
Section 1. TERM is amended to reflect termination on June 30, 2025.
Section 3. Compensation to Consultant is amended to reflect total amount not to exceed $136,000 per year.
Exhibit C. Compensation is amended to reflect Monthly Financial Operations Assistance to be $10,500 per month.
All other provisions of the original Agreement dated June 30, 2022, shall remain in full force and effect.
CLEAN ENERGY ALLIANCE MAHER ACCOUNTANCY
________________________________ ______________________________ Gregory Wade Michael Maher
Chief Executive Officer
________________________________ ______________________________ Date Date
APPROVED AS TO FORM
________________________________
Johanna Canlas
General Counsel
Attachment B
Staff Report
DATE: August 29, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Gregory Wade, Chief Executive Officer
ITEM 4: Consider Adoption of Resolution No. 2024-013 Approving an Agreement with NRG for Congestion Revenue Rights Services, for a term through December 31, 2027.
RECOMMENDATION:
Adopt Resolution No. 2024-013 approving an Agreement with NRG for Congestion Revenue Rights Services, for a term through December 31, 2027, and authorizing the Chief Executive Officer to sign all documents, subject to General Counsel approval.
BACKGROUND:
As a Load Serving Entity (LSE), Clean Energy Alliance (CEA) participates in the California Independent System Operator (CAISO) Congestion Revenue Right (CRR) Program. CRRs are financial instruments made available to LSEs through allocation and auction processes to offset congestion costs that occur in the day-ahead energy market. CRR settlements can result in a financial gain or loss.
Management of CEA’s CRR portfolio was included in the scope of work of the Scheduling Coordinator Services agreement with The Energy Authority (TEA) which became effective on January 21, 2021.
Payment for the CRR portfolio management services is included in the TEA flat monthly service fee.
In an effort to realize an increased revenue potential, CEA completed an informal Request for Proposal (RFP) process, requesting offers to provide CRR portfolio management services with fees based on a percentage of revenue, with no fees due if the portfolio realizes a net loss for the year.
CEA received three offers, and upon evaluation of these offers, staff recommend awarding this professional services agreement to NRG.
FISCAL IMPACT:
Fees will be paid only from any revenue generated through the CRR program.
August 29, 2024
CRR Portfolio Management Services
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Office
ATTACHMENTS
A. Resolution No. 2024-013, approving an agreement with NRG for Congestion Revenue Rights Services
B. Agreement with NRG for Congestion Revenue Rights Services
CLEAN ENERGY ALLIANCE
RESOLUTION NO. 2024-013
A RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN ENERGY
ALLIANCE APPROVING AGREEMENT WITH NRG FOR CONGESTION
REVENUE RIGHTS SERVICES
WHEREAS, Clean Energy Alliance (CEA) is a Joint Powers Authority, formed in November 2019, whose members cities include Carlsbad, Del Mar, Escondido, Oceanside, San Marcos, Solana Beach and Vista; and
WHEREAS, as a load serving entity, CEA participates in the California Independent Services Operator Congestion Revenue Rights (CRR) program; and WHEREAS, management of the CRR portfolio requires the services of an industry expert; and
WHEREAS, CEA selected NRG to perform these services through an informal Request for Proposal process.
NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the Clean Energy Alliance, as follows:
Section 1. The Board of Directors of Clean Energy Alliance hereby approves agreement with NRG for Congestion Revenue Rights Services, for a term through December 31, 2027.
Section 2. This Resolution shall take effect immediately upon approval.
The foregoing Resolution was passed and adopted this 29th day of August, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED:
________________________________________
David Druker, Board Chair
ATTEST:
____________________________
Kaylin McCauley, Board Secretary
Attachment A
4879-8432-4820 v1
33084795v1
Congestion Revenue Rights (CRR) Services Agreement
This Congestion Revenue Rights (CRR) Services Agreement together with any exhibits or attachments hereto (this “Agreement”) is entered into as of the last dated signature on the signature page hereto (“Effective Date”) and is between NRG Business Marketing LLC, a Delaware limited liability company (“NRG”) and Clean Energy Alliance, a California joint powers authority (“Customer”). NRG and Customer are sometimes referred to herein individually as a “Party” or together as the “Parties.”
1. Nature of Service.
a. The Parties hereby agree that NRG will provide professional services related to Customer’s CAISO CRR allocations during the Term as outlined herein. During the Term, Customer shall not authorize or designate any other party to undertake any activity related to the management of its CAISO CRR allocation or the management of its CAISO CRR portal and shall not revoke NRG’s authorization to act as Customer’s CAISO CRR service provider, except as provided herein.
b. As soon as practicable following the Effective Date, NRG and Customer shall take such action to provide NRG with access to Customer’s CRR account and to authorize NRG to act as the CRR Limited Agent.
c. All liabilities created for the benefit, burden or account of Customer pursuant to NRG’s performance of the Services in accordance with the terms and conditions of this Agreement shall be the liabilities of Customer.
d. Except to the extent expressly authorized under this Agreement for NRG’s services as CRR Limited Agent in connection with the Services, no Party shall be an agent, partner, joint venturer, or legal representative of any other Party for any purpose whatsoever, and no Party is authorized to assume or create any obligation, liability, or responsibility, expressed or implied, on behalf of or in the name of any other Party or to bind any other Party to any third party in any manner whatsoever. The relationship of the Parties is that of an independent contractor. Customer and NRG intend that the relationship between them created by this Agreement is that of an independent contractor. The manner and means of conducting the work are under the control of NRG as an independent contractor and in pursuit of NRG’s independent calling, except to the extent that they are limited by statute, rule or regulation or the express terms of this Agreement. NRG has and shall retain the right to exercise full control Attachment B
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2 and supervision of all persons assisting NRG in the performance of the services required by this Agreement, Customer only being concerned with the finished results of the work being performed. Any provision of this Agreement that appears to give Customer a measure of control over the details of the Services shall be deemed to mean that NRG shall follow the provisions hereof in order to accomplish the desires of Customer. Except as expressly stated in this Agreement, neither of the Parties shall have any separate obligations or duties, including without limitation any fiduciary duties or other implied duties. Customer hereby agrees that it is sophisticated and capable of assessing whether to enter into and maintain the relationship formed by this Agreement, as well as the risks of its participation in the CAISO market.
e. No civil service status or other right of employment will be acquired by virtue of NRG's services. None of the benefits provided by Customer to its employees, including but not limited to, employer-paid payroll taxes, Social Security, retirement benefits, health benefits, unemployment insurance, workers’ compensation plans, vacation and sick leave, nor any other benefits are available from Customer to NRG, its employees or agents. Deductions shall not be made for any state or federal taxes, FICA payments, or other purposes normally associated with an employer-employee
relationship from any fees due NRG. Payments of the above items, if required, are the responsibility of NRG. It is the intent of the Parties that neither NRG nor its officers, employees or agents are to be considered employees of Customer, whether “common law” or otherwise, and NRG shall indemnify, defend and hold Customer harmless from any such obligations related to its officers, employees and agents.
2. Term; Initial Term; Renewal Terms.
This Agreement shall become effective on the Effective Date, but the provision of Services by NRG shall commence on the Commencement Date, and shall remain in effect until December 31, 2027 (“Initial Term”), unless otherwise terminated as provided herein. After expiration of the Initial Term, unless either Party has given the other Party notice prior to August 1, 2026 that it does not wish to renew this Agreement at the end of the Initial Term, this Agreement shall renew automatically for successive one-year renewal terms (“Renewal Term(s)”); provided, however, that either Party may elect not to renew this Agreement for any successive Renewal Term by providing the other Party notice of such election prior to August 1 of the current Renewal Term. The Initial Term and any Renewal Term(s) shall be collectively referred to herein as the “Term.”
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3 Upon the termination of this Agreement for any reason, the Parties will take all actions necessary to terminate and to transfer the designation of NRG as CRR Limited Agent to Customer or Customer’s designee.
Furthermore, upon any such termination, NRG shall be entitled to cancel, terminate and withdraw any and all letters of credit or other credit support provided by NRG pursuant to Section 8.b. of this Agreement, and Customer shall take all actions as necessary to cancel, terminate and withdraw such credit support (and cause such credit support to be returned to NRG).
3. Definitions.
As used herein, unless the context clearly indicates otherwise, the following terms shall have the meaning set forth below. Defined terms used but not defined in this Agreement shall have the meanings set forth in the CAISO Documents.
“Affected Party” is as defined in Section 9, Compliance with Law. “Affiliates” means with respect to any person or entity, (a) any other Person directly or indirectly controlling, controlled by or under common control with such Person, (b) any other Person under the joint control, directly or indirectly of such Person, and (c) any officer, director or employee of any other Person described in subsection (a) or (b) of this paragraph, provided that with respect to NRG, Affiliate shall not include any entity not organized or existing under the jurisdiction of Canada or the United States or a political subdivision thereof, except with respect to Customer’s indemnification obligations hereunder and the calculation of Third Party Charges. “Assessments” means fines, penalties, fees or other charges, however described, assessed against a Party by the CPUC, CEC, CAISO or other regulatory entity.
“Business Day” means any day on which Federal Reserve member banks in California are open for business.
“CAISO” means the California Independent System Operator Corporation or its successor in function.
“CAISO Documents” means the CAISO Tariff, CAISO Protocols, and CAISO Business Practice Manuals.
“CAISO Protocols” shall have the same meaning as contained in the Master Definitions Supplement to the CAISO Tariff.
“CAISO CRR Revenues” means the revenue received by Customer from CRR Auctions and the Day-Ahead Settlement of CRRs (CAISO Charge Code 6700 and 6798), excluding those revenues deriving from CRRs transferred through the CAISO load migration process or attained prior to the Initial Term.
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4 “CAISO Settlements Data” means prices, volumes, and charges related to the settlement of CRRs.
“CAISO Tariff” means the Fifth Replacement FERC Electric Tariff (as amended, restated, replaced, supplemented or otherwise modified from time to time) of the CAISO.
“CEC” means the California Energy Commission.
"Change in Law” is as defined in Section 13, Regulatory Change “Commencement Date” means August 29, 2024.
“Confidential Information” is as defined in Section 17, Confidentiality. “CRR” means Congestion Revenue Right as defined in the CAISO Tariff.
“CRR Allocation” is the process of allocating CRRs to Load Serving Entities as defined in the CAISO Tariff.
“CRR Auction” is the process of allowing CRR holders to bid for CRRs as defined in the CAISO Tariff.
“CRR Limited Agent” means NRG acting as Company’s limited agent at CAISO, such agency to be solely for the purpose of providing services relating to Customer’s CRR positions, and in all other cases the relationship of Customer, on the one hand, with NRG, on the other hand, as set forth in this Agreement is one of independent contractors.
“DAM” is the Day-Ahead Market as defined in the CAISO Tariff. “Defaulting Party” is as defined in Section 11, Event of Default. “Disclosing Party” is as defined in Section 17, Confidentiality. “Due Date” means the 20th of the Month (or, in the event that such date is not a Business Day, the next occurring Business Day) following the Month in which Services were rendered or CAISO CRR
Revenues were received.
“Event of Default” is as defined in Section 11, Event of Default. “Fee(s)” means the amounts Customer will pay for the Services described herein.
“FERC” means the Federal Energy Regulatory Commission.
“Force Majeure” means physical or governmental causes that are beyond the control of the Party affected which, by exercise of due diligence, such Party could not reasonably have been expected to avoid and which, by exercise of due diligence, it has been unable to overcome. No Party, however, shall be relieved of liability for failure of performance hereunder based on Force Majeure if such failure is due to causes arising out of its own negligence or due to removable
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5 or remediable causes within its control, which it fails to remove or remedy within a reasonable time period. A Party claiming Force Majeure must exercise due diligence to overcome the Force Majeure event. Either Party rendered unable to fulfill any of its obligations under this Agreement by reason of Force Majeure shall give prompt notice of such fact to the other Party and shall exercise due diligence to remove such inability with all reasonable dispatch; provided, however, if an event of Force Majeure exists for thirty (30) consecutive days or longer, then either Party may terminate this Agreement. Notwithstanding the above, an event of Force Majeure does not relieve a Party of any of its obligations under the CAISO Tariff and this Agreement that the Party can reasonably perform during the Force Majeure event and does not excuse a Party from its obligations to make payments or of any consequences of non-performance, including payment obligations for non-performance, arising pursuant to CAISO Tariff and this Agreement.
“Governing Rules” means the CAISO Requirements and any other applicable law, tariff, regulation, rules and/or directives of CAISO, CPUC, CEC, NERC, FERC, OSHA, EPA, ARB, any other Regulatory Agency or any successors thereto, and as amended by such bodies from time to time. The Parties hereby agree to abide by all Governing Rules and should there be a conflict between such rules and this Agreement, such rules shall govern.
“Initial Term” is as defined in Section 2, Term; Initial Term; Renewal Terms.
“Interest Rate” means 5% per annum.
“Invoices” is as defined in Section 7, Invoices and Payments. “Month” means calendar month.
“MEQ” means Monthly CRR Eligible Quantity as defined in the CAISO Tariff.
“NERC” means the North American Electric Reliability Corporation. “NRG CAISO Representatives” means NRG’s Representative
identified to Customer in a writing as the endorsed users in the CAISO Access and Identity Management (AIM) system.
“Non-Defaulting Party” is as defined in Section 12, Rights of the Non-Defaulting Party. “Pass-Through Costs” means all costs as defined in Section 13, Regulatory Change.
“Person” means any individual, partnership, corporation, association, business, trust, limited liability company, governmental authority or other legal entity.
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6 “Receiving Party” is as defined in Section 17, Confidentiality. “Regulatory Agency” means any agency, regulatory body, or governmental entity with the authority over the transactions contemplated herein.
“Renewal Term(s)” is as defined in Section 2, “Term; Initial Term; Renewal Terms”.
“Representatives” means each Parties' and its affiliates’ respective directors, officers, employees and agents, including, without limitation, attorneys, accountants, partners, and consultants. “Responsible Party” is as defined in Section 9, Compliance with Law. “SEQ” means Seasonal CRR Eligible Quantity as defined in the CAISO Tariff.
“Scheduling Coordinator” shall have the same meaning as contained in the Master Definitions Supplement to the CAISO Tariff. “Schedule Coordinator ID Code” or “SCID” shall have the same meaning as contained in the Master Definitions Supplement to the CAISO Tariff.
“Services” is as defined in Section 4, Services.
“Term” is as defined in Section 2, “Term; Initial Term; Renewal Terms”.
4. Services.
Beginning as of the Commencement Date and during the Term, NRG shall perform the following services as outlined below (collectively, the “Services”) under this Agreement in accordance with the Governing Rules and applicable law:
a. Initial Setup: NRG shall endorse NRG CAISO Representatives in the CAISO’s Access and Identity Management module.
b. CRR Forecast and Historical Load Submissions: If the Customer timely provides the CRR forecasts and historical load submissions in accordance with Section 5(b), NRG will upload forecast and historical hourly load files in XML format to the CAISO CRR portal as required by the CAISO during the corresponding load submission window.
c. CRR Allocations: NRG will assess CRR allocation limits (MEQs/SEQs) and will analyze CAISO system conditions to create a request for a portfolio of CRRs in the monthly and annual allocation processes. NRG will submit its recommendations to Customer for input, prior to submitting a request for CRRs to CAISO. d. CRR Auctions: To monetize Customer’s allocation of CRRs, NRG will assess CRR intrinsic value to create economic offers for the
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7 applicable CRR auction and submit those offers to Customer for approval. Once the offer(s) are approved by Customer or if NRG does not receive any objections from Customer by 11:00 a.m. PPT on the date of the applicable CRR auction deadlines, NRG will offer the CRRs into the applicable CRR auctions. Customer understands that any CRRs that do not clear an auction will automatically be settled by CAISO against day-ahead congestion.
e. Settlement and Reporting: NRG will provide a quarterly report to Customer detailing CAISO settlements data, including, the CRRs allocated, the auction revenue, and the DAM settlement revenue. f. Governing Rule Changes: NRG shall use commercially reasonable efforts to communicate to Customer any CAISO directives and Governing Rule changes materially affecting CRRs of which NRG becomes aware.
g. Discrepancies: NRG shall use reasonable efforts to identify and resolve discrepancies between revenues reported by NRG to Customer and revenues reported on the CAISO settlement
statements. Fee(s) due to NRG will be based on the CAISO settlement statement values and will be resettled as may be required from time to time due to, without limitation, changes to calculations or settlements by CAISO.
h. Performance: Provided (i) Customer either approves or does not object to and cause NRG to change the recommendations of NRG set forth in Sections 4(c) and 4(d) and (ii) there has been no material Change in Law related to CRRs that negatively impacts CRR pricing for the respective calendar year during the Term, for each calendar year during the Term, if the aggregate net CAISO CRR Revenue received by Customer from the CAISO (excluding those revenues and charges (a) deriving from CRRs transferred through the CAISO load migration process or attained prior to the Initial Term or (b) that result from any act or omission of Customer that was not directed by NRG pursuant to the Services) is negative, then NRG will pay Customer the difference between such negative aggregate net CAISO CRR Revenue and zero, thereby ensuring that Customer sustains no net losses of CAISO CRR Revenues on a calendar year basis. Such payment, if any, shall be paid on or before the Due Date in the month of January following the calendar year.
5. Customer Obligations.
a. Initial Setup: Customer will grant NRG users access to the CAISO’s Congestion Revenue Rights and Market Results Interface - Settlements modules for the sole purpose of managing Customer’s CRR related activities.
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8 b. CRR Forecast and Historical Load Submissions: Customer will provide NRG with hourly forecast and historical load data as required by the CAISO as part of the CRR Allocation process. This data will be provided at least twenty-four (24) hours prior to the applicable monthly or annual load submittal window. Customer will promptly resolve any issues related to variances between load data submissions to the CAISO and the CEC in accordance with the CAISO Documents. To the extent the hourly forecast and historical load data is not timely provided, NRG will not make the CRR forecast and historical load submissions.
6. Fees.
Customer shall pay to NRG a Fee, which shall constitute full and complete compensation for the Services, in the amount of of the CAISO CRR Revenues received by Customer for
each month during the Term excluding those revenues and charges deriving from CRRs transferred through the CAISO load migration process or attained prior to the Initial Term. Such payments are to be made pursuant to the provisions of Section 7, Invoices and Payments.
7. Invoices and Payments.
a. Invoices: By the tenth (10th) calendar day of the Month (or, in the event that such date is not a Business Day, the next occurring Business Day) following the Month in which CAISO CRR Revenues were received by Customer, NRG shall provide an invoice to Customer setting forth amounts due hereunder (“Invoice”), the Invoice from NRG shall provide sufficient detail substantiating such amount(s) due, including as applicable, CAISO Revenues received by Customer. No later than the Due Date, Customer will pay to NRG the net amount of the Invoice, in accordance with the Wiring Instructions as set forth in Section 7.b. Each Invoice shall include the Due Date.
b. Wiring Instructions: Each Party will pay amounts due by it per the wiring instructions found in Exhibit A (the “Wiring Instructions”).
Each Party will promptly notify the other of changes to the Wiring Instructions.
c. Late Payment: Interest shall accrue on amounts past due at the Interest Rate as calculated daily from the Due Date until payment in full is received.
d. Billing Disputes: In the event either Party, in good faith, disputes any Invoice, the disputing Party must provide the other Party with notice of the disputed amounts, together with a statement of the particulars of the dispute (including calculations showing the errors or
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9 inaccuracies claimed), and payment of the undisputed portion of the Invoice. Upon resolution of the dispute, any required payment or refund shall be made within three (3) Business Days of such resolution along with interest accrued at the Interest Rate from and including the due date to but excluding the date paid. If it is subsequently determined that a Party has overpaid or underpaid amounts actually due, the other Party shall remit the applicable refund or payment due within five (5) days after determination of such overpayment or payment due, together with interest on the refund, accrued at the Interest Rate from the date payment was received.
Any dispute or adjustment with respect to an Invoice is waived unless the Party issuing the Invoice is notified in accordance with this Section 7(d) within thirty-six (36) Months after the Invoice is rendered or any specific adjustment to the Invoice is made, including any Invoice issued because of any CAISO settlement or resettlement.
8. Credit Assurances; CAISO Credit Support.
a. Notwithstanding anything in any other agreement among the Parties to the contrary, neither Party shall be required to post collateral, credit assurance or other security to the other Party for this particular Agreement or its respective performance hereunder.
b. CAISO Credit Support. In connection with the performance of Services, subject to the terms of this Section 8.b., NRG shall cause one or more letters of credit to be posted with the CAISO for the benefit of Customer in order to satisfy the CAISO credit support requirements associated with Customer’s CRR positions. Customer hereby agrees to promptly transfer to NRG any amounts paid to it by CAISO in connection with the application of, or return of any credit support that NRG causes to be posted to the CAISO on Customer’s behalf. Notwithstanding the foregoing, in no event shall NRG be required to post credit support to the CAISO on behalf of Customer if such credit support amounts would cause NRG to exceed any credit limits imposed internally or by the issuers of such letters of credit, and in no event shall NRG be required to post credit support to the CAISO in excess of an aggregate sum of
. For the avoidance of doubt, by agreeing to post
credit to support on behalf of Customer to the CAISO, NRG is not acting as, or undertaking any obligations as guarantor or credit support provider to Customer, and Customer agrees to take any action reasonably requested by NRG to assure the CAISO or any other third party of the limited nature of NRG’s obligations set forth in this Section 8.b.
9. Compliance with Law.
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10 NRG and Customer shall at all times comply with the Governing Rules and all applicable laws. In the event that actions or omissions of one Party (“Responsible Party”) cause the other Party (“Affected Party”) to (A) be non-compliant with the Governing Rules or applicable laws, or (B) have assessed or brought against the Affected Party any Assessments, then in addition to any other rights or remedies hereunder, the Affected Party shall have the right to: (i) without duplication of any amounts indemnifiable pursuant to Section 10 below, charge the Responsible Party, and the Responsible Party shall be required to pay, for the costs of such Assessments; and (ii) without limitation to the foregoing, provide notice to the Responsible Party describing the cause of the Assessment and demanding cure of same, failing cure of which the Affected Party may terminate this Agreement.
Notwithstanding the foregoing or Section 10 below, NRG shall not be liable for any Assessments arising from, or relating to, any act or omission of Customer that was not directed by NRG pursuant to the Services.
10. Indemnification and Limitation of Liability.
a. Customer hereby agrees to release, indemnify and hold harmless NRG, its Affiliates, and their respective shareholders, members, directors, officers, employees and agents from and against any penalties, damages, losses, charges, claims, demands, suits, proceedings, costs and expenses (including reasonable attorneys’ fees) of a third party to the extent arising out of (i) any breach by Customer or its Representatives of Customer’s obligations hereunder, or (ii) subject to Section 9 above, violation of any Governing Rules or applicable law by Customer or its
Representatives, except to the extent caused by NRG or its Representatives.
b. NRG hereby agrees to release, indemnify, defend and hold harmless Customer and its respective directors, officers, employees and agents from and against any penalties, damages, losses, charges, claims, demands, suits, proceedings, costs and expenses (including reasonable attorneys’ fees) of a third party to the extent arising out of (i) any breach by NRG or its Representatives of NRG’s obligations hereunder, or (ii) subject to Section 9 above, violation of any Governing Rules or applicable law by NRG or its Representatives, except to the extent caused by Customer or its Representatives. c. Customer agrees to indemnify and hold harmless NRG and its Affiliates for any fees, costs, expenses or other amounts that NRG or any Affiliate incurs in connection with the provision of credit support to the CAISO pursuant to Section 8.b. of this Agreement or with respect to any credit support obligations of Customer to the
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11 CAISO, including, without limitation, the face value of all such letters of credit and any fees or penalties that NRG (or its Affiliate) incurs in connection with any drawdown of such letters of credit. d. EXCEPT WITH RESPECT TO THIRD PARTY CLAIMS FOR WHICH
A PARTY HAS AN OBLIGATION TO INDEMNIFY OR DEFEND
UNDER SECTION 10(a), 10(b) or 10(c), NO PARTY SHALL BE
LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE,
SPECIAL, EXEMPLARY OR INDIRECT DAMAGES, OR LOST
PROFITS. The Parties further agree that the waivers and disclaimers of liability, indemnities, releases from liability, and limitations on liability expressed herein shall survive termination or expiration of this Agreement, and shall apply at all times, whether in contract, equity, tort or otherwise, regardless of the fault, negligence (in whole or in part), strict liability, breach of contract or breach of warranty of the Party whose liabilities are limited, and shall extend to the members, shareholders, partners, principals, Affiliates, directors, officers and employees, agents and related or affiliated entities of such Party, and their shareholders, partners, principals, Affiliates, directors, officers and employees.
11. Event of Default.
A Party shall be deemed in default (“Defaulting Party”) under this Agreement upon the occurrence of any one or more of the following events (each an “Event of Default”):
a. The failure by a Party to make a timely payment of any amount due to the other Party under this Agreement or any other agreement between the Parties, if such failure is not remedied within five (5) Business Days after written notice;
b. the failure by a Party to perform any other material provision of this Agreement, which failure is not excused by the terms of this Agreement and which does not constitute a separate Event of Default, if such failure is not remedied within thirty (30) days after written notice;
c. the appointment (voluntary or involuntary) of a receiver or liquidator or trustee of such Party or of any of the property of such Party by order of a court of competent jurisdiction; or
d. the filing of a petition or consent seeking relief in a proceeding under any of the provisions of federal or state bankruptcy or insolvency laws, as any such laws now exist or as those laws may be amended, or the filing of any answer admitting the material allegations of a petition filed against it in such proceeding; the general assignment by a Party for the benefit of its creditors; or the admission by a Party
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12 in writing (or fails to deny in writing the existence) of its inability to pay its debts generally as they become due.
12. Rights of Non-Defaulting Party.
When an Event of Default occurs, the Party not in default (“Non-Defaulting Party”) shall have the right to take any one or more of the following actions:
a. upon the occurrence of an Event of Default specified above, to terminate this Agreement upon written notice to the Defaulting Party, which termination shall be effective immediately;
b. upon the occurrence of an Event of Default to suspend performance (other than payment and indemnification obligations) upon written notice to the Defaulting Party;
c. upon the occurrence of an Event of Default of Customer, withdraw or terminate any credit support posted with the CAISO pursuant to Section 8.b. of this Agreement; or
d. to (i) pursue collection of actual damages, (ii) to seek any other remedy at law or in equity (except to the extent limited or waived herein), and/or (iii) to pursue any other remedy provided under this Agreement.
In addition, upon a termination due to an Event of Default, the Non-Defaulting Party may accelerate all amounts owing between the Parties, including, without limitation, Fee(s), under this Agreement, the costs and expenses incurred in connection with the issuance of any letter of credit pursuant to Section 8.b. of this Agreement and at the option of the Non-Defaulting Party, net, offset and set-off amounts owed by the Non-Defaulting Party against amounts owed by the Defaulting Party to the Non-Defaulting Party or its Affiliates (whether or not arising under this Agreement, matured or contingent and irrespective of the currency, place of payment or place of booking of the obligation). To the extent that any such amounts are so net, offset or set-off, those amounts will be discharged promptly and in all respects. Any termination payment shall be due within two (2) Business Days after such notice.
13. Regulatory Change.
If any laws, orders or regulations are passed, modified, implemented or interpreted by judicial or regulatory order, administrative proceeding, or legislative enactment, including but not limited to rules or regulations promulgated pursuant to the Dodd-Frank Act, CAISO market rules, FERC or NERC rules and regulations (collectively, “Change in Law”), which increase the cost for NRG to perform its obligations herein, then NRG may pass through and invoice such increase to Customer without
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13 mark-up or margin as “Pass-Through Costs”; provided, however, that such costs may only be charged on a prospective basis from the time of such increase. NRG will, to the extent such costs are sufficiently known in advance, use commercially reasonably efforts to provide Customer with at least thirty (30) days’ prior written notice to Customer of such Pass-Through Costs and will, in any event, provide Customer with written notice as soon as practicable.
14. Governing Law and Venue.
This Agreement shall be governed by and construed in accordance with the laws of California, without regard to any choice of law rules or principles that would result in the application of the laws of a different jurisdiction. Initial venue for any action shall be in the Superior Court located in San Diego County, California.
15. Parties, Assignment.
Except as expressly provided in this Section 15, the rights under this Agreement shall not be assignable or transferable nor the duties delegable by either Party without prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed; and nothing in this Agreement, express or implied, is intended to confer upon any person or entity, other than the Parties hereto, permitted successors-in-interest and permitted assignees, any rights or remedies under or by reason of this Agreement unless so stated to the contrary in this Agreement. Notwithstanding the foregoing, either Party may, without the consent of the other Party (and without relieving itself from liability hereunder): (a) transfer, sell, pledge, encumber or assign this Agreement or the accounts, revenues or proceeds hereof in connection with any financing or other financial arrangements by or for its own benefit; (b) transfer or assign this Agreement to an Affiliate of such Party if such Affiliate’s technical ability to perform hereunder is not materially different than that of such Party; or (c) transfer or assign this Agreement to any person or entity succeeding to all or substantially all of the assets of such Party; provided, however, that in each such case, any such assignee (other than an assignee in a transaction referred to in clause (a) above or to an Affiliate of NRG) shall agree in writing to be bound by the terms and conditions hereof. Any assignment in violation of the above requirements shall be null and void.
16. Notices and Correspondence:
Unless as otherwise provided in this Agreement, any notices given under this Agreement must be in writing, and personally delivered, or sent by certified or registered mail (return receipt requested), or email in
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14 the forms referenced below, and shall be deemed given and effective when delivered by hand or upon:
a. First receipt as evidenced by written record of delivery or delivery attempt in the case of personal delivery, certified or registered mail; or
b. the Business Day on the date such notice was sent by email, with confirmation of receipt of such transmission, provided that such receipt occurred on or before 1:00 p.m. Pacific Time of such Business Day and if received after 1:00 p.m. Pacific Time then notice shall be deemed effective upon the next Business Day.
NRG Business Marketing LLC Clean Energy Alliance
Attn: Jay Robertson
910 Louisiana St.
Houston, TX, 77002
Phone: 281-800-6369
[email protected]
With a copy to:
Attn: Contract Administration
804 Carnegie Center
Princeton, NJ 08540
Phone: 609-524-4543
Facsimile: 609-52404549
Email: [email protected]
Attn: Gregory Wade, CEO
5857 Owens Ave, Suite 2023
Carlsbad, CA 92008
Email:
[email protected]
With additional Notices of an Event
of Default to:
Attn: Contract Administration
804 Carnegie Center
Princeton, NJ 08540
Phone: 609-524-4543
Facsimile: 609-52404549
Email: [email protected]
Attn: Johanna Canlas, General
Counsel
Phone: (619) 814-5813
Email: [email protected]
With a copy to:
Hall Energy Law PC
Attn: Stephen Hall
Phone: (503) 313-0755
Email: [email protected]
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15 Any Party may change its address to which notice is to be given hereunder by providing notice of the same in accordance with the notice requirements set forth above.
17. Confidentiality.
a. Each Party agrees that as to any information which is proprietary or confidential (the “Confidential Information”), as designated or marked as such or, with respect to third party information, is protected by applicable law, or is reasonably apparent to be intended as such and agreed by the Parties to be confidential (including, but not limited to CRR Forecasts, Historical Load Submissions, NRG assessment of CRR allocation limits, CRR path selections recommended and/or chosen by NRG, CAISO CRR limits and
CAISO CRR result files), and provided by a Party (the “Disclosing Party”) to the other Party (the “Receiving Party”), except as provided below, the Receiving Party shall not disclose the Confidential Information to anyone or use the Confidential Information for any purpose independent of the fulfillment of this Agreement or the Services contemplated herein; provided that Confidential Information shall not include information which: (i) is or becomes generally available to the public other than as a result of a disclosure by the Receiving Party in breach of this Agreement; (ii) was available to the Receiving Party on a non-confidential basis prior to its disclosure by the Disclosing Party; (iii) is developed independently by the Receiving Party; (iv) becomes available to the Receiving Party on a non-confidential basis from a Person other than the Disclosing Party; or (v) is communicated to a third party with the express prior written consent of the Disclosing Party, provided that in the case of sub-items (ii) and (iv), the source of such Confidential Information was not known by the Receiving Party to be bound by a confidentiality agreement or other legal obligation of confidentiality to the Disclosing Party with respect to such Confidential Information. b. The Receiving Party agrees (i) except as required by applicable law, to keep the Confidential Information confidential and not to disclose or reveal any of the Confidential Information to any person other than those persons who need to know the Confidential Information in connection with this Agreement and (ii) not to use, and to ensure its Representatives do not use, the Confidential Information for any purpose other than in connection with this Agreement. The Receiving Party will inform its Representatives of the confidential nature of the Confidential Information, shall instruct its Representatives to keep such Information confidential in accordance with the terms of this Agreement, and shall be responsible for any unauthorized disclosure or improper use thereof by its
Representatives.
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16 c. Confidential Information may be disclosed by the Receiving Party if and to the extent such disclosure is required (i) to be made by any requirement of applicable law, including but not limited to the California Public Records Act (Government Code 7200 et seq.) and the Brown Act (Government Code Section 54950 et seq.), (ii) pursuant to an order of a court or (iii) in order to enforce this Agreement or its rights hereunder. Notwithstanding the foregoing, the Parties may also disclose Confidential Information as necessary to perform the Services and other obligations under this Agreement. d. In the event that the Receiving Party is required by applicable law or a governmental authority to disclose any of the Confidential Information, the Receiving Party shall, to the extent practical and permitted by applicable law, provide the Disclosing Party with prompt notice of such request or requirement in order to enable the Disclosing Party to: (i) seek an appropriate protective order or other remedy; (ii) consult with the Receiving Party with respect to the Disclosing Party taking steps to resist or narrow the scope of such request or legal process; or (iii) waive compliance, in whole or in part, with the confidentiality provisions of this Agreement. In any such event, the Receiving Party shall use commercially reasonable efforts to ensure that all of the Confidential Information that is so disclosed shall be accorded confidential treatment and shall furnish only that portion of the Confidential Information that is legally required to be disclosed. This provisions of Section 17(a)-(d) shall survive the termination of this Agreement for a period of two (2) years from the expiration or termination of this Agreement.
e. Notwithstanding any provision on confidentiality, restriction on use or other provision in this Agreement, Customer acknowledges and agrees that (i) information and data arising from, or relating Customer’s CRR allocation (“CRR Information”) may be comingled with other information and data, in or with respect to, NRG, its Affiliates or any other Person or load-serving entity for which NRG or its Affiliates are providing services or that are engaged in market activity, including, without limitation, information and data arising from, or relating to CRRs (collectively, “NRG Information”), (ii) NRG and its Affiliates may use CRR Information in the course of any of their activities in CAISO’s market or transaction for their own account or the account, load or generation of another Person for which either is providing services or is engaged in market activity, (iii) NRG and its Affiliates shall not be required to give priority or special consideration to the CRR Information when managing or engaging in any market activity for its own account, or the account or market activity of another Person and (iv) NRG and its Affiliates shall have no obligation to provide to Customer and its Affiliates any NRG Information (whether or not such NRG Information may be included in, or form a part of, CRR Information).
4879-8432-4820 v1
17 18. Non-Exclusive Relationship.
a. NRG or its Affiliates may transact with other Persons, including the Affiliates of Customer and their shareholders or members, and may also be parties to, own, engage in, and possess interests in, other agreements, assets, businesses, activities, ventures, enterprises, transactions and investments of any and every type and description (together the “Activities”), independently or with others, that may be in competition with Customer or its Affiliates, with no duty or obligation (express, implied, fiduciary or otherwise) to (i) refrain from engaging in such Activities, (ii) offer the right to participate in such Activities to Customer, its Affiliates, members, shareholders or subsidiaries, or (iii) account to, or to share the results or profits of such Activities with, Customer, its Affiliates, members, shareholders or subsidiaries, and any doctrines of non-competition, “company opportunity” or similar doctrines are hereby expressly disclaimed. b. Customer acknowledges and agrees that NRG and its Affiliates (i) are active participants in the commodities and derivatives markets and may, from time to time, transact with counterparties or pursue trading or hedging strategies in connection with its business that are related or unrelated to this Agreement, and that such transactions or trading or hedging strategies may be in competition with, or different from those Customer or its Affiliates are pursuing directly or indirectly in this Agreement or otherwise, (ii) have no fiduciary or trust duties or obligations of any nature with respect to Customer or its Affiliates in performing its obligations under this Agreement, (iii) may bid, offer, enter into transactions or otherwise buy or sell for its own account or the account of others products, commodities or derivatives and do so on terms or at prices or costs that are more favorable than the prices or costs charged or assessed on Customer or its Affiliates directly or indirectly pursuant to this Agreement, or (iv) provide CRR or other services for Persons other than Customer, including for their own account, and engage in other transactions, including trading or selling products, commodities and derivatives. Nothing in this Agreement is to be construed to prevent NRG or its Affiliates in any way from managing CRRs for a third-party, purchasing, selling or otherwise transacting in any product, commodity or derivative for its or their own account or for the account of others, whether prior to, simultaneously with, or subsequent to the performance of this Agreement or a transaction with Customer or its Affiliates. Nothing in this Agreement will be construed to limit NRG’s operations in any geographic region or to require that NRG favor the interests of Customer over the interests of NRG, its Affiliates or any other Person.
19. Representations and Warranties.
Except as otherwise specifically stated below, each Party represents and warrants to the other Party that:
4879-8432-4820 v1
18 a. it is duly organized, validly existing and in good standing under the laws of the jurisdiction under which it is organized, and is authorized to do business in the State of California;
b. it has the full power and authority to enter into this Agreement and perform all of the specified obligations, representations, warranties, and covenants under this Agreement;
c. the execution, delivery and performance of this Agreement have been duly authorized by all requisite action of its governing body; d. it has obtained, or will obtain prior to beginning performance under this Agreement, all licenses, registrations, certifications, permits, and other authorizations and has taken, or will take prior to beginning performance under this Agreement, all actions required by applicable laws or governmental regulations except licenses, registrations, certifications, permits, or other authorizations that do not materially affect performance under this Agreement;
e. it is not in violation of any laws, ordinances, or governmental rules, regulations, or orders of any governmental authority or arbitration board materially affecting performance of this Agreement and to which it is subject;
f. it is neither bankrupt nor has reason to believe that there is any reasonable likelihood of becoming bankrupt in the foreseeable future;
g. it is solely responsible for keeping itself informed of, and understanding its respective responsibilities under the Governing Rules.
The Parties acknowledge and affirm that the foregoing representations, warranties, and covenants are continuing in nature throughout the term of this Agreement.
20. Insurance.
a. General Requirements. On or before the Commencement Date, NRG shall furnish Customer with certificates showing the type, amount, class of operations covered, effective dates and dates of expiration of insurance coverage in compliance with the requirements listed in Exhibit "B," which is attached hereto and incorporated herein by this reference.
Such insurance and certificates, which do not limit NRG’s indemnification obligations under this Agreement, shall also contain substantially the following statement: "Should any of the above insurance covered by this certificate be canceled or non-renewed before the expiration date thereof, the insurer affording coverage or NRG or it’s insurance broker shall provide thirty (30) days’ advance written notice to the Customer by certified mail or electronic mail, Attention: General
4879-8432-4820 v1
19 Counsel. Ten (10) days advance written notice for cancellation due to non-payment of premium shall be provided by the insurer to the Customer, NRG and its insurance broker in the same manner." NRG shall maintain in force at all times during the performance of this Agreement all appropriate coverage of insurance required by this Agreement with an insurance company that is reasonably acceptable to Customer and licensed to do insurance business in the State of California. Endorsements naming the Customer as additional insured shall be submitted with the insurance certificates. All endorsements shall be on forms reasonably approved by Customer. NRG shall provide certified copies of required insurance policies, which shall include the declaration pages, a schedule of forms listing all policy endorsements, and all policy forms, upon Customer’s request.
b. Subrogation Waiver. NRG agrees that in the event of loss due to any of the perils for which it has agreed to carry commercial general and automotive liability insurance, NRG shall look solely to its insurance for recovery. NRG hereby grants to Customer, on behalf of any insurer providing commercial general and automotive liability insurance to either NRG or Customer with respect to the services of NRG herein, a waiver of any right to subrogation that any such insurer of NRG may acquire against Customer by virtue of the payment of any loss under such insurance.
c. Primary and Non-contributory. The commercial general liability, including any excess or umbrella policies being used to meet the required limits of insurance, and automobile liability policies shall contain, or be endorsed to contain, a provision that such policies are primary and non-contributory to any insurance that may be carried by the Customer or its members, as reflected in an endorsement at least as broad as CG 20 01 04 13, which shall be submitted to the Customer.
Any insurance or self-insurance maintained by the Customer, its members or their respective officers, officials, employees, or representatives shall be excess of NRG’s insurance and shall not contribute with it.
d. Reserved.
e. Additional Insured. Customer, its members, and their respective, officers, officials, and employees shall be named as additional insureds under all insurance coverages, except any professional liability insurance, required by this Agreement. The naming of an additional insured shall not affect any recovery to which such additional insured would be entitled under this policy if not named as such additional insured. An additional insured named herein shall not be held liable for any premium, deductible portion of any loss, or expense of any nature on this policy or any extension thereof. Any other insurance held by an
4879-8432-4820 v1
20 additional insured shall not be required to contribute anything toward any loss or expense covered by the insurance provided by this policy. f. Self-Insured Retentions. Any self-insured retentions are the responsibility of NRG.
g. Sufficiency of Insurance. The insurance limits required by Customer are not represented as being sufficient to protect NRG. NRG is advised to confer with NRG's insurance broker to determine adequate coverage for NRG.
h. Maximum Coverage and Limits. It shall be a requirement under this Agreement that any available insurance proceeds broader than or in excess of the specified minimum Insurance coverage requirements and/or limits shall be available to the additional insureds. Furthermore, the requirements for coverage and limits shall be the minimum coverage and limits specified in this Agreement, or the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured, whichever is greater.
i. Special Risks or Circumstances. Customer reserves the right to reasonably modify these requirements, including limits, based on the nature of risk, prior experience, insurer, coverage, or other special circumstances, however any premiums associated with such requests shall be reimbursed to NRG by Customer.
21. No Recourse Against Constituent Members of Customer.
Customer is organized as a Joint Powers Customer in accordance with the Joint Powers Act of the State of California (Government Code Sections 6500 et seq.) pursuant to a Joint Powers Agreement dated November 4, 2019, as amended from time to time, and is a public entity separate from its constituent members. Customer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Contractor shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Customer’s constituent members in connection with this Agreement.
22. Relationship of the Parties.
This Agreement shall not be deemed to create any relationship of the parties as partners or joint venturers, or agents (except, such agency as required for NRG to perform as CRR Limited Agent) and the rights and obligations of the Parties shall be limited to those set forth in this Agreement.
23. Waiver.
4879-8432-4820 v1
21 No waiver by either Party of any default by the other Party under this Agreement shall operate as a waiver of any future default, whether of a like or different character or nature. No delay or failure by either Party in enforcing any part of this Agreement shall be deemed a waiver of any of the Party’s rights or remedies.
24. Severability.
The various provisions of this Agreement are severable. The invalidity, illegality or unenforceability of any portion or provision shall not affect the validity, legality or enforceability of any other portion or provision of this Agreement.
25. Entire Agreement.
This Agreement and the Exhibits hereto contain the entire understanding of the Parties with respect to the subject matter contained herein. There are no promises, covenants or understandings other than those expressly set forth herein. This Agreement may only be amended by a written instrument executed by both Parties.
26. Counterparts/Electronic Signatures.
This Agreement may be executed in one or more counterparts and each executed counterpart shall be considered an original, provided that such counterpart is delivered to the other Party by mail, courier or email, all of which together shall constitute one and the same Agreement. This Agreement may be executed by an electronic or facsimile signature with the same force and effect as original ink signatures.
27. Survival of Terms.
Any obligation in this Agreement which by its nature should survive the termination of this Agreement shall so survive, including without limitation, the indemnification, limitation of liability and confidentiality provisions hereof.
[Signature page follows.]
4879-8432-4820 v1
22 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
NRG Business Marketing LLC Clean Energy Alliance
By: _____________________________ By:
__________________________
Print Name: _____________________ Print Name: Gregory Wade Title:___________________________ Title: Chief Executive Officer Date:___________________________ Date:_____________________
APPROVED AS TO FORM:
By:
__________________________
Johanna N. Canlas,
General Counsel
4879-8432-4820 v1
Exhibit B
Insurance Requirements and Proof of Insurance
NRG shall maintain the following minimum insurance coverage during the Term:
A. COVERAGE:
(1) Workers' Compensation:
Statutory coverage as required by the State of California and providing, at minimum, $1,000,000.00 employers’ liability coverage.
(2) Liability:
Commercial general liability (“CGL”) coverage with minimum limits of $2,000,000 per occurrence and $2,000,000 aggregate for bodily injury and property damage, including ongoing and completed operations. ISO occurrence Form CG 0001 or equivalent is required. If limits apply separately to this Agreement (CG 25 03 or 25 04), the general aggregate limit shall not apply. There shall be no modification of the CGL limiting the scope of coverage for either insured vs. insured claims or contractual liability. If NRG or subcontractor maintains higher limits than the limits shown above, Customer shall be entitled to coverage for the higher limits maintained by NRG and their subcontractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the Customer. Any excess or umbrella policies being used to meet the required limits of insurance must meet the same qualifications as NRG’s primary policy.
(3) Automotive:
Commercial Automobile Liability Insurance for all of NRG’s automobiles including owned, hired and non-owned automobiles, automobile insurance written on an ISO form CA 00 01 12 90 or a later version of this form or an equivalent form providing coverage at least as broad for bodily injury and property damage for a combined single limit no less than $1,000,000.00 per occurrence. Insurance certificate shall reflect coverage for any automobile (any auto).
(4) Professional Liability
Professional liability insurance that includes coverage for the professional acts, errors and omissions of NRG in the amount of at least $1,000,000 per claim and $2,000,000 annual aggregate. NRG shall ensure both that (1) the policy retroactive date is on or before the date of commencement of the services; and (2) the policy will be maintained in force for a period of three years after substantial completion of the services or termination of 4879-8432-4820 v1
this Agreement, whichever occurs last. NRG agrees that for the time period defined above, there will be no changes or endorsements to the policy that increase Customer’s exposure to loss. All defense costs shall be outside the limits of the policy. If NRG maintains higher limits than the limits shown above, Customer shall be entitled to coverage for the higher limits maintained by NRG. Any available proceeds in excess of the specified minimum limits of insurance and coverage shall be available to Customer.
(5) Cyber Liability
NRG maintain Cyber Liability with a limit of $2,000,000 per occurrence or claim and $2,000,000 annual aggregate. Coverage shall be sufficiently broad to respond to the duties and obligations as are undertaken by NRG in this Agreement and shall include claims involving infringement of intellectual property, infringement of copyright, trademark, trade dress, invasion of privacy violations, information theft, damage to or destruction of electronic information, release of private information, alteration of electronic information, extortion and network security. The policy shall provide coverage for breach response costs as well as regulatory fines and penalties as well as credit monitoring expenses with limits sufficient to respond to such obligations. All defense costs shall be outside the limits of the policy.
Staff Report
DATE: August 29, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Gregory Wade, Chief Executive Officer
ITEM 5: Consider Adoption of Resolution No. 2024-014 Approving Amendment No. 4 to the Agreement with Hall Energy Law for Transactions Attorney Services, for a term through June 30, 2025.
RECOMMENDATION:
Adopt Resolution No. 2024-014 approving Amendment No. 4 to the Agreement with Hall Energy Law for Transactions Attorney Services, for a term through June 30, 2025, for an amount not to exceed $65,000 per fiscal year beginning FY 2023/24 and authorizing the Chief Executive Officer to sign all documents, subject to General Counsel approval.
BACKGROUND AND DISCUSSION:
The Clean Energy Alliance (CEA) Board approved the original Agreement with Hall Energy Law at its regular meeting on April 16, 2020. Hall Energy Law has been meeting expectations as it provides energy transactions attorney services. Staff recommends amending the current agreement to extend the term through June 30, 2025, at an amount to exceed $65,000 per year.
FISCAL IMPACT:
Funds for energy transactions services are included in the adopted budget.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Office
ATTACHMENTS:
A. Resolution No. 2024-014, approving Amendment No. 4 to Agreement with Hall Energy Law for Transactions Attorney Services
B. Amendment No. 4 to Agreement with Hall Energy Law for Transactions Attorney Services
CLEAN ENERGY ALLIANCE
RESOLUTION NO. 2024-014
A RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN ENERGY
ALLIANCE APPROVING AMENDMENT NO. 4 TO HALL ENERGY LAW
AGREEMENT
WHEREAS, Clean Energy Alliance (CEA) is a Joint Powers Authority, formed in November 2019, whose members cities include Carlsbad, Del Mar, Escondido, Oceanside, San Marcos, Solana Beach and Vista; and
WHEREAS, as a load serving entity, CEA requires the services of an energy transactions attorney; and
WHEREAS, the CEA Board of Directors approved an initial agreement with Hall Energy Law at its regular meeting April 16, 2020; and
WHEREAS, the Board desires to extend the agreement through June 30, 2025, for an amount not to exceed $65,000 per year, beginning Fiscal Year 2023/24.
NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the Clean Energy Alliance, as follows:
Section 1. The Board of Directors of Clean Energy Alliance hereby approves Amendment No. 4 to the professional services agreement with Hall Energy Law through June 30,2025, for an amount not to exceed $65,000 per year, beginning Fiscal Year 2023/24.
Section 2. This Resolution shall take effect immediately upon approval.
The foregoing Resolution was passed and adopted this 29th day of August, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED:
________________________________________
David Druker, Board Chair
ATTEST:
___________________________
Kaylin McCauley, Board Secretary
Attachment A
4860-9762-0417 v1
Amendment No. 4 to
Agreement Between the Clean Energy Alliance and
Hall Energy Law for Legal Services in Connection with Energy Procurement Dated April 24, 2020
The Agreement between Clean Energy Alliance (CEA) and Hall Energy Law dated April 24, 2020 is amended as follows:
The TERM is amended to reflect that the Agreement will expire on June 30, 2025.
Section 2. Fees and Hourly Rates is amended to reflect a total not to exceed amount of $65,000 per year beginning in fiscal year 2023-2024.
All other provisions of the original Agreement dated April 24, 2020 shall remain in full force and effect.
CLEAN ENERGY ALLIANCE HALL ENERGY LAW
________________________________ ______________________________ Gregory Wade Stephen Hall
Chief Executive Officer Principal
________________________________ ______________________________ Date Date
APPROVED AS TO FORM
________________________________
Johanna Canlas
General Counsel
Attachment B
Staff Report
DATE: August 29, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Gregory Wade, Chief Executive Officer
ITEM 6: Clean Energy Alliance Chief Executive Officer Operational and Administrative Report RECOMMENDATION:
Receive and File the Chief Executive Officer Operational and Administrative Report.
BACKGROUND AND DISCUSSION:
This report provides an update to the Clean Energy Alliance (CEA) Board regarding operational and administrative activity.
OPERATIONAL UPDATE
Oceanside & Vista May 2024 Enrollment
CEA continues to enroll remaining Net Energy Metering (NEM) customers in Oceanside and Vista on a monthly basis. On average, CEA is enrolling approximately 1,800 NEM customers each month.
Following each monthly enrollment, CEA continues to receive calls, opt out, and opt-up requests from Oceanside and Vista residents and businesses.
The statistics as of July 31, 2024, are as follows:
City # of Eligible
Customers
# of Opt-Downs to
50%
Renewable
# of Opt-Ups
to 100%
Renewable
# of Opt-OutsParticipation
Rate
Oceanside 66,774 161 62 3,152 95.1%
Vista 35,945 66 260 1,266 96.4%
TOTAL 102, 719 227 322 4,418 95.5%
Equitable Building Decarbonization Grant
On July 27, 2023, the CEA Board of Directors (Board) approved CEA’s participation in the Southern California Coalition (SCC) for the California Energy Commission (CEC) Equitable Building Decarbonization (EBD) Program Grant and authorized the Chief Executive Officer to submit a commitment letter. The SCC, led by the County of Los Angeles through the Southern California Regional Energy Network, submitted an application on June 28, 2024, to administer EBD funds and a direct install program in Southern California.
August 29, 2024
CEO Admin Report
It is with great excitement that we can report that the CEC has selected the SCC as the recipient of the $328.7M EBD grant.
This grant opportunity was designed to advance equity within vulnerable communities by assisting residential customers to reduce greenhouse gas emissions from their homes and advance energy equity.
The program will encourage resilience to extreme heat, indoor air-quality improvements, energy affordability, grid reliability, and local workforce opportunities.
The SCC is split into 7 regions, LA Gateway Cities, LA San Gabriel Valley, LA Ports & South Bay, Orange, Inland Empire San Bernardino, Inland Empire Riverside, Imperial, South San Diego and North San Diego.
Within each region, the SCC has identified local community outreach and energy partners to drive participation and address key barriers to program success. The SCC also identified communities in each region with the highest need on which to focus initially and provide a rapid start to the program. In CEA’s territory, the Escondido Creek community will have a rapid start as this community faces a high risk of floods and manufactured homes in the area that are at high risk of damage from wildfires.
In the coming weeks, the SCC will work closely with the CEC on award administration, a revised budget, and program launch planning activities. The SCC leadership team will simultaneously begin launching the program implementation preparation activities required before launching the program. Those tasks include meetings with partners, reviewing tasks, reviewing materials, and getting partner feedback before implementation. The SCC will be holding a meeting with all participants including CEA in September. Staff remains engaged in the process and will provide the Board with an update as information becomes available.
San Diego Regional Energy Network
In January 2024, San Diego Community Power (SDCP) and the County of San Diego applied for approval from the California Public Utilities Commission (CPUC) for the formation of a new Regional Energy Network (REN). On August 1, 2024, the CPUC voted to approve the San Diego Regional Energy Network (SDREN). The SDREN will offer a portfolio of energy efficiency programs to customers across San Diego County, including CEA customers. These programs will be designed to improve energy affordability, access to participation, maximize existing funding, create career pathways in clean energy, and improve health through building electrification.
Over the last six months, CEA staff has participated as a member of the SDREN Inaugural Advisory Committee. The SDREN Advisory Committee is made up of community-based organizations and local governments to advise on outreach and enrollment, provide feedback on program evaluation, and recommend program improvements. CEA staff will continue to work with SDCP and the County to further develop and implement programs through the SDREN.
Quarterly Member City Meetings
CEA staff launched a new quarterly meeting with CEA’s member city staff members focused on sustainability and climate action plans. These new quarterly meetings are intended to increase collaboration across cities, seek feedback on energy program development, and provide periodical operational updates. Staff held the first quarterly meeting on August 19, 2024, and provided an overview of CEA operations, available programs and sought marketing and event opportunity recommendations.
August 29, 2024
CEO Admin Report
CEA in the Community
To provide opportunities for the communities we serve to meet with CEA staff and have their questions answered, staff continues to attend several in-person community events and give presentations.
CEA has been busy with many of these scheduled outreach efforts. Recent events and presentations that CEA participated in:
DATE DESCRIPTION
June 25, 2024 Oceanside City Council Presentation
July 11, 2024 San Diego County Farm Bureau, Board Meeting July 17, 2024 Escondido City Council Presentation
July 31, 2024 Oceanside Pacific Kiwanis Breakfast
August 1, 2024 Oceanside Chamber of Commerce, Emerging Issues Forum August 9, 2024 MiraCosta College LIFE Group
August 15, 2024 Special Districts San Diego Chapter Dinner Upcoming events that CEA will be participating in:
DATE DESCRIPTION
August 29, 2024 VMW HOA Meeting
September 6, 2024 Heroes of Oceanside and Camp Pendleton September 11, 2024 Solana Beach City Council Presentation September 18, 2024 Solana Beach Climate Action Commission Presentation September 29, 2024 City of Vista Cyclovia
October 9, 2024 CPUC Small and Diverse Business Expo
October 30, 2024 CAISO Stakeholder Symposium
Call Center Activity and Participation Statistics
The following chart reflects customer activity through July 31, 2024. 844
609
530
403
311
465
804
1213
666
1171
723
963
0 200
400
600
800
1000
1200
1400
Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Total Calls Calls Connected to Agents
August 29, 2024
CEO Admin Report
Call volumes to CEA’s Call Center increased 33% from June to July 2024, which is to be expected following final enrollment letters and the transition to summer rates, both of which occurred in June. The most common call topics for all customers (commercial and residential) were related to Billing inquiries, General Information and Net Energy Metering.
The total number of calls received, response times and call duration through July 31, 2024, were as follows:
Monthly Summary – July 31, 2024
Stats by Month Jul Jun May Apr Total
Total Calls 963 723 1171 666 21,333
Total Calls Connected to Agents 935 710 1115 647 20,852 Average Seconds to Answer 0:00:42 0:00:26 0:00:50 0:00:35 Average Call Duration 0:11:31 0:11:26 0:10:57 0:10:37
The following chart reflects enrollments in CEA’s power supply products by City as of August 20, 2024:
Member City Clean Impact – 50%
Renewable
Clean Impact Plus -
75% Carbon Free
Green Impact – 100%
Renewable
Carlsbad 158 49,534 211
Del Mar 5 2,776 68
Escondido 131 53,389 63
Oceanside 158 61,351 60
San Marcos 118 34,787 61
Solana Beach 14 6,907 157
Vista 66 33,149 258
TOTAL ACCOUNTS 650 241,893 878
Risk Oversight Committee
Pursuant to CEA’s Energy Risk Management Policy, the Risk Oversight Committee met on June 6, 2024.
The Committee again reviewed CEA’s proposed Fiscal Year (FY) 2024/2025 Budget as well as current energy market prices, CEA load forecast and their impact to CEA’s 5-year budgetary outlook. Recent procurement activity, current portfolio positions and future procurement targets, and portfolio market to market and counterparty exposure was also discussed. The next regular meeting of the Committee is scheduled for September 5, 2024.
Contracts $50,000 - $100,000 entered into by Chief Executive Officer
VENDOR DESCRIPTION AMOUNT
Andy Stern, CFO Chief Financial Officer Consultant Services NTE $81,900 Evolution Affairs, LLC CCA Strategic Support Services NTE $100,000 August 29, 2024
CEO Admin Report
FISCAL IMPACT:
There is no fiscal impact with this action.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
ATTACHMENTS:
None.
Staff Report
DATE: August 29, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Gregory Wade, Chief Executive Officer
ITEM 7: Receive Regulatory Update from Keyes & Fox
RECOMMENDATION:
Receive the Regulatory Update from Keyes & Fox.
BACKGROUND AND DISCUSSION:
Clean Energy Alliance contracts with Keyes and Fox for Regulatory Advocacy related activities. Each month Keyes and Fox provides an update to the CEA Board on key items of interest.
FISCAL IMPACT:
There is no fiscal impact from this action.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
ATTACHMENTS:
A. Keyes & Fox Regulatory Report
1 Clean Energy Alliance
Regulatory Monitoring Report
To: Clean Energy Alliance (CEA) Board of Directors
From:
Tim Lindl, Partner, Keyes & Fox LLP
Jacob Schlesinger, Partner, Keyes & Fox LLP
Jason Hoyle, Principal Analyst, EQ Research, LLC
Subject: Monthly Regulatory Memo
Date: August 16, 2024
Keyes & Fox LLP and EQ Research LLC are pleased to provide CEA’s Board of Directors with this informational memo describing recent developments in key California regulatory and compliance-related updates from the California Public Utilities Commission (CPUC). Additional information is available in CEA’s Digest of Regulatory Updates.
SDG&E 2025 ERRA Forecast (A.24-05-010)
• On August 14, the Assigned Commissioner issued a Scoping Memo and Ruling for SDG&E’s 2025 ERRA Forecast. Notably, after review of parties’ briefs on the issues of whether changes to the PCIA framework such as an alternative proposal for SDG&E's Resource Adequacy (RA) market price benchmark (MPB), changes to the RA MPB calculation due to the slice-of-day framework, or changes to cost recovery relating to utility-owned generation (UOG) are outside the scope of this proceeding, the Assigned Commissioner determined that “changes to the RA MPB calculation and cost recovery of UOG are outside the scope of this proceeding.”
• An evidentiary hearing is set for September 27, opening briefs are due October 4, SDG&E’s October Update filing is expected on October 14, and a proposed decision is expected in late November followed by a final decision before the end of the year.
Resource Adequacy/Slice-of-Day Framework (R.23-10-011)
• On June 26, the Commission issued D.24-06-004 which addresses resource adequacy (RA) requirements under the new slice-of-day (SOD) framework that will be implemented starting with the upcoming 2025 RA year. The Decision maintains the 17% planning reserve margin (PRM) across all months for the 2025 RA year rather than adjusting the PRM for individual months or seasons, but changes to the reserve margin are being considered in Track 2.
• The Decision also provides an extended cure period for June-September month-ahead RA deficiencies, significantly reducing potential penalties. The RA benefits of the Diablo Canyon Power Plant will be proportionally allocated to all LSEs through the Cost Adjustment Mechanism. • Comments on Track 2 proposals were filed on August 9 and reply comments are due August 23. Many parties’ opening comments addressed issues related to the PRM. Regarding adoption of a monthly or seasonal PRM and changes to the PRM level, CalCCA recommended that the Commission have stable tools and methodologies prior to implementing such changes.
Integrated Resource Planning (R.20-05-003)
• On July 19, the CPUC issued a Proposed Decision (PD) that makes an initial need determination under which the CPUC may request that the Department of Water Resources procure electricity from diverse long lead-time resources on behalf of customers of all LSEs. This initial need determination totals up to 10.6 GW of nameplate capacity of the following emerging technologies: up to 7.6 GW of offshore wind, up to 1 GW of enhanced geothermal systems, up to 1 GW of multi-day long-duration energy storage (LDES), and up to 1 GW of LDES with a discharge period of at least 12 hours. The Proposed Decision is scheduled to be heard at the August 22 Commission meeting.
Attachment A
2 • On August 9, the CPUC issued a Proposed Decision (PD) allowing the temporary use of bridge resources for up to three years from the June 1, 2025 compliance deadline as an alternative compliance mechanism for LSEs to meet the Diablo Canyon replacement resource category procurement requirement in D.21-06-035.
For reference, this relates to an LSE procurement requirement established in D.21-06-035 under which LSEs must acquire 2,500 MW of incremental zero-emitting capacity online by June 1, 2025, along with an energy component (i.e., generation or storage-paired generation), to support reliability after the planned closure of Diablo Canyon. Comments on the PD are due August 29, reply comments are due September 3, and the PD may be adopted by the CPUC, at earliest, at its September 12 meeting.
Staff Report
DATE: August 29, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Gregory Wade, Chief Executive Officer
ITEM 8: Power Charge Indifference Adjustment (PCIA) Review RECOMMENDATION:
Receive a presentation from Keyes and Fox on the Power Charge Indifference Adjustment (PCIA) for each of Clean Energy Alliance’s member agencies.
BACKGROUND AND DISCUSSION:
At the June 27, 2024 Regular Board of Directors Meeting, Board Member Musgrove requested more information on how long Clean Energy Alliance (CEA) customers would be subject to the PCIA. The PCIA obligation stems from two components. The first is the vintage assigned to each municipality’s customers, which is based on when those customers departed SDG&E’s bundled service for CEA service, and the obligations associated with each vintage. The second is based on when that obligation ends, more specifically, the expiration date for contracts the utility has with third-party-owned generators and the end of a utility-owned generator’s useful life.
Keyes & Fox and NewGen have assembled data projecting a significant drop in the PCIA obligation starting in the mid-2030s through the early 2040s. However, the analysis also shows the outstanding question still being addressed in SDG&E Phase I General Rate Case: establishing an end date for departed customers’ obligations to pay for utility-owned generation. In addition, the CPUC may authorize more procurement by the utilities, which could apply to CEA customers that leave SDG&E’s service in future years. Keyes & Fox and NewGen will provide a presentation on the PCIA and be available to answer questions during the Board Meeting on August 29, 2024.
FISCAL IMPACT:
There is no fiscal impact from this action.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
ATTACHMENTS:
None.
Staff Report
DATE: August 29, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Gregory Wade, Chief Executive Officer
ITEM 9: Consider Adoption of Resolution No. 2024-015 Approving a 10-Year Power Purchase Agreement (PPA) with San Diego County Water Authority and Authorizing Execution of the PPA
RECOMMENDATION:
That the Board of Directors (Board) adopt Resolution No. 2024-015 approving the Rancho Peñasquitos Power Purchase Agreement (PPA) with San Diego County Water Authority for an expected total amount of $4,500,000 and authorize the Chief Executive Officer to sign all documents, subject to Transactions Attorney approval.
BACKGROUND AND DISCUSSION:
At its October 26, 2023 Regular Meeting, the Clean Energy Alliance (CEA) Board approved the CEA Wholesale Market Access Tariff (WMAT) Agreement with San Diego County Water Authority (SDCWA) and Poseidon Resources (Channelside) LP, for service to the Channelside account. CEA staff has been working through planning and implementation of the WMAT Agreement to begin serving the Channelside account effective January 1, 2025.
SDCWA owns and operates a 4.1 MW hydropower facility in Rancho Peñasquitos which has the capacity to provide renewable electricity and Renewable Energy Certificates (RECs) that CEA can use to serve the Channelside load and to meet Renewable Portfolio Standards (RPS) regulatory requirements. CEA and SDCWA have negotiated a PPA for CEA to purchase all power and RECs from the project for the next ten (10) years. This project and contract would be assigned to the WMAT Channelside account, allowing the SDCWA’s project to serve the Channelside load. Key terms from the contract are:
• 10-year delivery term starting January 1, 2025, with the possibility for extension under mutual agreement of the parties;
• $25/MWh fixed price for energy and RECs;
• Anticipated to generate up to 18,000 MWh per year;
• Performance and security requirements are limited compared to other PPAs – performance is highly dependent on water conditions year to year, making firm commitments difficult; • Flexibility for parties to mutually agree to amend or terminate the PPA early (for instance, if Channelside is no longer served by CEA);
• Scheduling management will be provided by CEA’s Scheduling Coordinator.
August 29, 2024
Rancho Peñasquitos PPA
All costs and benefits of the PPA will be assigned to the Channelside account – aligning supply incentives with the resulting cost to the same end user.
FISCAL IMPACT:
There is no fiscal impact to CEA as all costs and benefits of the Rancho Peñasquitos Hydropower project and PPA will be allocated to SDCWA’s Channelside account.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Office
ATTACHMENTS:
A. Resolution No. 2024-015, approving a 10-Year Power Purchase Agreement (PPA) with San Diego County Water Authority and Authorizing Execution of the PPA B. Rancho Peñasquitos Power Purchase Agreement
Attachment A
4853-6228-7832 v1
CLEAN ENERGY ALLIANCE
RESOLUTION NO. 2024-015
A RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN ENERGY ALLIANCE
APPROVING A TEN-YEAR AGREEMENT WITH SAN DIEGO COUNTY WATER AUTHORITY FOR THE PURCHASE OF POWER FROM THE RANCHO PEÑASQUITOS
HYDROPOWER FACILITY AND AUTHORIZING THE CHIEF EXECUTIVE OFFICER TO
EXECUTE THE AGREEMENT
WHEREAS, Clean Energy Alliance (CEA) is a joint powers authority established on November 4, 2019, and organized under the Joint Exercise of Powers Act (Government Code Section 6500 et seq.); and
WHEREAS, at its October 26, 2023 regular meeting, the Clean Energy Alliance (CEA) Board approved the CEA Wholesale Market Access Tariff (WMAT) Agreement with San Diego County Water Authority (SDCWA) and Poseidon Resources (Channelside) LP, for service to the Channelside account and CEA staff has been working through planning and implementation of the WMAT Agreement to begin serving the Channelside account effective January 1, 2025; and WHEREAS, SDCWA owns and operates a 4.1 MW hydropower facility in Rancho Peñasquitos that has the capacity to provide renewable electricity and Renewable Energy Certificates (RECs) that CEA can use to serve the Channelside load and to meet Renewable Portfolio Standards (RPS) regulatory requirements; and
WHEREAS, CEA and SDCWA have negotiated a Power Purchase Agreement (PPA) for CEA to purchase all power and RECs from the Rancho Peñasquitos Hydropower project for the next ten (10) years; and
WHEREAS, there is no fiscal impact to CEA of entering into the PPA as all costs and benefits of the Rancho Peñasquitos Hydropower project and PPA will be allocated to SDCWA’s Channelside account.
NOW, THEREFORE, BE IT RESOLVED the Board of Directors of Clean Energy Alliance hereby finds, determines and resolves as follows:
Section 1. The foregoing recitals are true and correct and incorporated fully herein.
Section 2. A ten-year PPA with SDCWA for the purchase of all power from the Rancho Peñasquitos Hydropower project is hereby approved.
Section 3. The Chief Executive Officer is hereby authorized and directed to execute a PPA with SDCWA in a form substantially similar to that presented to the Board of Directors on August 22, 2024, with any changes subject to General Counsel approval.
CEA No. Resolution 2024-015
Rancho Peñasquitos PPA
4853-6228-7832 v1
Section 4. The Chief Executive Officer is hereby authorized and directed to execute such other documents and take such other and further actions as may be necessary and proper to accomplish the purposes of this resolution.
The foregoing Resolution was passed and adopted this 29th day of August, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED:
________________________________________
David Druker, Chair
ATTEST:
_____________________________
Kaylin McCauley, Board Secretary
1 POWER PURCHASE AGREEMENT
COVER SHEET
Seller: San Diego County Water Authority, a county water authority Buyer: Clean Energy Alliance, a California joint powers authority Description of Facility: Rancho Peñasquitos Pressure Control & Hydroelectric Facility located in San Diego County, California with a generating capacity of approximately 4.1 MW Delivery Term Start Date: January 1, 2025
Delivery Term: Ten (10) Contract Years
Expected Energy:
Contract Year Expected Energy (MWh)
1 18,000
2 18,000
3 18,000
4 18,000
5 18,000
6 18,000
7 18,000
8 18,000
9 18,000
10 18,000
Guaranteed Capacity: 4.1 MW
Contract Capacity: 4.1 MW
Contract Price: The Contract Price of the Product shall be:
Contract Year Contract Price
1-10 $25/MWh (with no escalator
or de-escalator)
Product:
Facility Energy
Green Attributes (Portfolio Content Category 1) associated with Facility Energy Capacity Attributes
Ancillary Services
Scheduling Coordinator: Buyer /Buyer Third Party
Attachment B
TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS ........................................................................................................... 1
1.1 CONTRACT DEFINITIONS. ................................................................................................. 1
1.2 RULES OF INTERPRETATION. .......................................................................................... 11 ARTICLE 2 TERM; CONDITIONS PRECEDENT .................................................................... 12
2.1 CONTRACT TERM. .......................................................................................................... 12
2.2 CONDITIONS PRECEDENT ............................................................................................... 12 ARTICLE 3 PURCHASE AND SALE ........................................................................................ 13
3.1 PURCHASE AND SALE OF PRODUCT. ............................................................................... 13
3.2 SALE OF GREEN ATTRIBUTES. ........................................................................................ 13
3.3 IMBALANCE ENERGY. .................................................................................................... 13
3.4 RESERVED. ..................................................................................................................... 13
3.5 FUTURE ENVIRONMENTAL ATTRIBUTES. ....................................................................... 13
3.6 RESERVED. ..................................................................................................................... 14
3.7 RESERVED. ..................................................................................................................... 14
3.8 RESERVED ...................................................................................................................... 14
3.9 CEC CERTIFICATION AND VERIFICATION. ..................................................................... 14
3.10 RESERVED. ..................................................................................................................... 14
3.11 NON-MODIFIABLE STANDARD TERMS AND CONDITIONS. .............................................. 14 ARTICLE 4 OBLIGATIONS AND DELIVERIES ..................................................................... 15
4.1 DELIVERY. ..................................................................................................................... 15
4.2 TITLE AND RISK OF LOSS. .............................................................................................. 15
4.3 FORECASTING ................................................................................................................ 16
4.4 RESERVED. ..................................................................................................................... 16
4.5 RESERVED. ..................................................................................................................... 16
4.6 REDUCTION IN DELIVERY OBLIGATION. ........................................................................ 16
4.7 RESERVED. ..................................................................................................................... 17
4.8 WREGIS. ...................................................................................................................... 17 ARTICLE 5 TAXES ..................................................................................................................... 18
5.1 ALLOCATION OF TAXES AND CHARGES. ........................................................................ 18
5.2 COOPERATION. ............................................................................................................... 19 ARTICLE 6 MAINTENANCE OF THE FACILITY .................................................................. 19
6.1 MAINTENANCE OF THE FACILITY. .................................................................................. 19
6.2 MAINTENANCE OF HEALTH AND SAFETY. ...................................................................... 19
6.3 SHARED FACILITIES. ...................................................................................................... 19 ARTICLE 7 METERING ............................................................................................................. 19
7.1 METERING. .................................................................................................................... 19
7.2 METER VERIFICATION. .................................................................................................. 20 ARTICLE 8 INVOICING AND PAYMENT; CREDIT .............................................................. 20 ii
8.1 INVOICING...................................................................................................................... 20
8.2 PAYMENT....................................................................................................................... 20
8.3 BOOKS AND RECORDS.................................................................................................... 20
8.4 PAYMENT ADJUSTMENTS; BILLING ERRORS. ................................................................. 21
8.5 BILLING DISPUTES. ........................................................................................................ 21 ARTICLE 9 NOTICES................................................................................................................. 21
9.1 ADDRESSES FOR THE DELIVERY OF NOTICES ................................................................. 21
9.2 ACCEPTABLE MEANS OF DELIVERING NOTICE. ............................................................. 21 ARTICLE 10 FORCE MAJEURE ............................................................................................... 22
10.1 DEFINITION.................................................................................................................... 22
10.2 NO LIABILITY IF A FORCE MAJEURE EVENT OCCURS .................................................... 23
10.3 NOTICE. ......................................................................................................................... 23 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ....................................................... 23
11.1 EVENTS OF DEFAULT ..................................................................................................... 23
11.2 REMEDIES; DECLARATION OF EARLY TERMINATION DATE. .......................................... 24
11.3 TERMINATION PAYMENT. .............................................................................................. 24
11.4 NOTICE OF PAYMENT OF TERMINATION PAYMENT. ....................................................... 25
11.5 DISPUTES WITH RESPECT TO TERMINATION PAYMENT.................................................. 25
11.6 RIGHTS AND REMEDIES ARE CUMULATIVE ................................................................... 25 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES........... 25
12.1 NO CONSEQUENTIAL DAMAGES..................................................................................... 25
12.2 WAIVER AND EXCLUSION OF OTHER DAMAGES. ........................................................... 26 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY ............................ 26
13.1 SELLER’S REPRESENTATIONS AND WARRANTIES........................................................... 26
13.2 BUYER’S REPRESENTATIONS AND WARRANTIES ........................................................... 27
13.3 GENERAL COVENANTS................................................................................................... 28 ARTICLE 14 ASSIGNMENT...................................................................................................... 29
14.1 GENERAL PROHIBITION ON ASSIGNMENTS..................................................................... 29 ARTICLE 15 DISPUTE RESOLUTION ..................................................................................... 29
15.1 VENUE. .......................................................................................................................... 29
15.2 DISPUTE RESOLUTION.................................................................................................... 29 ARTICLE 16 RESERVED........................................................................................................... 29 ARTICLE 17 RESERVED........................................................................................................... 29 ARTICLE 18 CONFIDENTIAL INFORMATION ..................................................................... 29
18.1 DEFINITION OF CONFIDENTIAL INFORMATION. .............................................................. 29
18.2 DUTY TO MAINTAIN CONFIDENTIALITY......................................................................... 30
18.3 IRREPARABLE INJURY; REMEDIES.................................................................................. 30 ARTICLE 19 MISCELLANEOUS .............................................................................................. 30 iii
19.1 ENTIRE AGREEMENT; INTEGRATION; EXHIBITS. ............................................................ 30
19.2 AMENDMENTS................................................................................................................ 31
19.3 NO WAIVER. .................................................................................................................. 31
19.4 NO AGENCY, PARTNERSHIP, JOINT VENTURE OR LEASE................................................ 31
19.5 SEVERABILITY. .............................................................................................................. 31
19.6 MOBILE-SIERRA............................................................................................................. 31
19.7 COUNTERPARTS; ELECTRONIC SIGNATURES. ................................................................. 31
19.8 BINDING EFFECT............................................................................................................ 31
19.9 NO RECOURSE TO MEMBERS OF BUYER......................................................................... 32
19.10 FORWARD CONTRACT. .................................................................................................. 32
19.11 FURTHER ASSURANCES ................................................................................................. 32 iv
Exhibits:
Exhibit A Facility Description
Exhibit B Reserved
Exhibit C Compensation
Exhibit D Scheduling Coordinator Responsibilities
Exhibit E Operating Restrictions
Exhibit F-1 Form of Average Expected Energy Report
Exhibit F-2 Form of Monthly Available Capacity Report
Exhibit G Notices
Exhibit H Metering Diagram
1 POWER PURCHASE AGREEMENT
This Power Purchase Agreement (“Agreement”) is entered into as of the last dated signature on the signature page hereto (the “Effective Date”), between Buyer and Seller. Buyer and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties.” All capitalized terms used in this Agreement are used with the meanings ascribed to them in Article 1 to this Agreement.
RECITALS
WHEREAS, Seller owns and operates the Facility; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:
ARTICLE 1
DEFINITIONS
1.1 Contract Definitions. The following terms, when used herein with initial capitalization, shall have the meanings set forth below:
“AC” means alternating current.
“Agreement” has the meaning set forth in the Preamble and includes any Exhibits, schedules and any written supplements hereto, and the Cover Sheet. “Ancillary Services” means all ancillary services, products and other attributes, if any, associated with the Contract Capacity of the Facility.
“Available Generating Capacity” means the capacity of the Facility, expressed in whole MWs, that is mechanically available to generate Energy. “Bankrupt” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due. “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday in California. A Business Day begins at 8:00 a.m. and ends at 5:00 p.m. Pacific Standard Time (PST) for the Party sending a Notice, or payment, or performing a specified action. 2 “Buyer” means Clean Energy Alliance, a California joint powers authority. “Buyer’s WREGIS Account” has the meaning set forth in Section 4.8(a). “CAISO” means the California Independent System Operator Corporation, or any successor entity performing similar functions.
“CAISO Approved Meter” means a CAISO approved revenue quality meter or meters, CAISO approved data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, all Facility Energy delivered to the Delivery Point.
“CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Operating Order” means the “operating order” defined in Section 37.2.1.1 of the CAISO Tariff.
“CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC.
“California Renewables Portfolio Standard” or “RPS” means the renewable energy program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. “Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of power associated with the Contract Capacity that the Facility can generate and deliver to the Delivery Point at a particular moment and that can be purchased and sold under CAISO market rules, including Resource Adequacy Benefits.
“CEC” means the California Energy Commission, or any successor agency performing similar statutory functions.
“CEC Certification and Verification” means that the CEC has certified that the Facility is an Eligible Renewable Energy Resource for purposes of the California Renewables Portfolio Standard and that all Facility Energy delivered to the Delivery Point qualifies as generation from an Eligible Renewable Energy Resource.
“Confidential Information” has the meaning set forth in Section 18.1. “Contract Capacity” means the amount of generating capacity of the Facility, as measured in MW at the Delivery Point, set forth on the Cover Sheet. 3 “Contract Price” has the meaning set forth on the Cover Sheet. “Contract Term” has the meaning set forth in Section 2.1(a). “Contract Year” means a period of twelve (12) consecutive months, with the first Contract Year beginning on the Delivery Term Start Date and the last Contract Year ending at midnight at the end of the day prior to the anniversary of the Delivery Term 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.
“CPUC” means the California Public Utilities Commission or any successor agency performing similar statutory functions.
“Curtailment Order” means any of the following:
(a) CAISO orders, directs, alerts, or provides notice to a Party, including a CAISO Operating Order, that such Party is required to curtail deliveries of Facility Energy for the following reasons: (i) any System Emergency, or (ii) any warning of an anticipated System Emergency, or warning of an imminent condition or situation, which jeopardizes CAISO’s electric system integrity or the integrity of other systems to which CAISO is connected; (b) a curtailment ordered by the Participating Transmission Owner for reasons including, but not limited to, (i) any situation that affects normal function of the electric system including, but not limited to, any abnormal condition that requires action to prevent circumstances such as equipment damage, loss of load, or abnormal voltage conditions, or (ii) any warning, forecast or anticipation of conditions or situations that jeopardize the Participating Transmission Owner’s electric system integrity or the integrity of other systems to which the Participating Transmission Owner is connected;
(c) a curtailment ordered by CAISO or the Participating Transmission Owner due to scheduled or unscheduled maintenance on the Participating Transmission Owner’s transmission facilities that prevents (i) Buyer from receiving or (ii) Seller from delivering Facility Energy to the Delivery Point; or
(d) a curtailment in accordance with Seller’s obligations under its Interconnection Agreement with the Participating Transmission Owner or distribution operator. “Curtailment Period” means the period of time, as measured using current Settlement Intervals, during which Seller reduces generation from the Facility pursuant to a Curtailment Order; provided that the Curtailment Period shall be inclusive of the time required for the Facility to ramp down and ramp up.
4 “Day-Ahead Forecast” has the meaning set forth in Section 4.3(c). “Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Day-Ahead Schedule” has the meaning set forth in the CAISO Tariff. “Defaulting Party” has the meaning set forth in Section 11.1(a). “Deficient Month” has the meaning set forth in Section 4.8(e). “Delivery Term” has the meaning set forth on the Cover Sheet. “Facility Energy” the Energy generated by the Facility, net of Electrical Losses and Station Use and delivered to the Delivery Point, as measured by the Facility Meter. “Delivery Point” has the meaning set forth in Exhibit A. “Delivery Term” shall mean the period of Contract Years set forth on the Cover Sheet beginning on the Delivery Term Start Date, unless terminated earlier in accordance with the terms and conditions of this Agreement.
“Disclosing Party” has the meaning set forth in Section 18.2. “Early Termination Date” has the meaning set forth in Section 11.2(a). “Effective Date” has the meaning set forth on the Preamble. “Electrical Losses” means all transmission or transformation losses or gains between the Facility and the Delivery Point, including losses or gains associated with delivery of Facility Energy to the Delivery Point.
“Eligible Renewable Energy Resource” has the meaning set forth in California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25741(a), as either code provision is amended or supplemented from time to time. “Event of Default” has the meaning set forth in Section 11.1. “Expected Energy” means the quantity of Facility Energy attributable to the Contract Capacity that Seller expects to be able to deliver from the Facility during each Contract Year in the quantity specified on the Cover Sheet.
“Facility” means the hydroelectric generating facility described on the Cover Sheet and in Exhibit A, located at the Site and including mechanical equipment and associated facilities and equipment required to deliver Energy to the Delivery Point. “Facility Energy” means the energy, net of Electrical Losses and Station Use, that is delivered to the Delivery Point and measured by the Facility Meter in accordance with CAISO metering requirements and Prudent Operating Practices.
5 “Facility Meter” means the CAISO Approved Meter that will measure all electric energy generated by the Facility and delivered to the Delivery Point. Facility Energy will be subject to adjustment in accordance with CAISO meter requirements and Prudent Operating Practices to account for Electrical Losses and Station Use.
“FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“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 that prevents Seller from generating Energy or making Facility Energy available at the Delivery Point and that is not the result of a Force Majeure Event. “Full Capacity Deliverability Status” has the meaning set forth in the CAISO Tariff. “Future Environmental Attributes” shall mean any and all emissions, air quality or other environmental attributes other than Green Attributes or Renewable Energy Incentives under the RPS regulations or under any and all other international, federal, regional, state or other law, rule, regulation, bylaw, treaty or other intergovernmental compact, decision, administrative decision, program (including any voluntary compliance or membership program), competitive market or business method (including all credits, certificates, benefits, and emission measurements, reductions, offsets and allowances related thereto) that are attributable, now, or in the future, to the generation of electrical energy by the Facility and its displacement of conventional energy generation. Future Environmental Attributes do not include (i) any energy, capacity, reliability or other power attributes from the Facility, or (ii) investment tax credits or production tax credits associated with the construction or operation of the Facility, or other financial incentives in the form of credits, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation.
“Gains” means the economic benefit, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term. “Governmental Authority” means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO; provided, however, that “Governmental Authority” shall not in any event include any Party. “Green Attributes” means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the generation from the Facility and its displacement of conventional energy generation. Green Attributes include but are not limited to Renewable Energy Credits, as well as: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by 6 trapping heat in the atmosphere; (3) the reporting rights to these avoided emissions, such as Green Tag Reporting Rights. Green Tags are accumulated on a MWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Energy. Green Attributes do not include (i) any energy, capacity, reliability or other power attributes from the Facility, (ii) production tax credits associated with the construction or operation of the Facility and other financial incentives in the form of credits, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular preexisting pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered or used by the Facility for compliance with local, state, or federal operating or air quality permits.
“Green Tag Reporting Rights” means the right of a purchaser of renewable energy to report ownership of accumulated “green tags” in compliance with and to the extent permitted by applicable Law and include, without limitation, rights under Section 1605(b) of the Energy Policy Act of 1992, and any present or future federal, state or local certification program or emissions trading program, including pursuant to the WREGIS Operating Rules. “Guaranteed Capacity” has the meaning set forth on the Cover Sheet. “Imbalance Energy” means the amount of energy in MWh, in any given Settlement Period or Settlement Interval, by which the amount of Facility Energy deviates from the amount of Scheduled Energy.
“Interconnection Agreement” means the interconnection agreement entered into by Seller pursuant to which the Facility will be interconnected with the Transmission System, and pursuant to which Seller’s Interconnection Facilities and any other Interconnection Facilities will be operated and maintained during the Contract Term.
“Interconnection Facilities” means the interconnection facilities, control and protective devices and metering facilities required to connect the Facility with the Transmission System in accordance with the Interconnection Agreement.
“Interest Rate” has the meaning set forth in Section 8.2. “Inter-SC Trade” or “IST” has the meaning set forth in the CAISO Tariff. “ITC” means the investment tax credit established pursuant to Section 48 of the United States Internal Revenue Code of 1986.
“Joint Powers Act” means the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.).
“Joint Powers Agreement” means that certain Joint Powers Agreement dated November 4, 2019, as amended and restated from time to time, under which Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act. 7 “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.
“Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the State of California. “Local Capacity Area” has the meaning set forth in the CAISO Tariff. “Local Capacity Area Resources” has the meaning set forth in the CAISO Tariff. “Locational Marginal Price” or “LMP” has the meaning set forth in the CAISO Tariff. “Losses” means the economic loss, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term.
“Master File” has the meaning set forth in the CAISO Tariff. “Meter Service Agreement” means the agreement between Seller and CAISO to establish meter services for the collection and transfer of meter data by CAISO. “Monthly Delivery Forecast” has the meaning set forth in Section 4.3(b). “MW” means megawatts in alternating current, unless expressly stated in terms of direct current.
“MWh” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“NERC” means the North American Electric Reliability Corporation or any successor entity performing similar functions.
“Network Upgrades” has the meaning set forth in the CAISO Tariff. “Non-Defaulting Party” has the meaning set forth in Section 11.2. “Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or email with acknowledged receipt or copy by another acceptable delivery method. “Operating Restrictions” means those rules, requirements, and procedures set forth on Exhibit E.
“Participating Transmission Owner” or “PTO” means an entity that owns, operates and maintains transmission or distribution lines and associated facilities or has entitlements to use certain transmission or distribution lines and associated facilities where the Facility is interconnected. For purposes of this Agreement, the Participating Transmission Owner is set forth in Exhibit A.
8 “Party” or “Parties” has the meaning set forth in the Preamble. “Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“PNode” has the meaning set forth in the CAISO Tariff.
“Portfolio Content Category” means PCC1, PCC2 or PCC3, as applicable. “Portfolio Content Category 1” or “PCC1” means any Renewable Energy Credit associated with the generation of electricity from an Eligible Renewable Energy Resource consisting of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(1), as may be amended from time to time or as further defined or supplemented by Law.
“Product” has the meaning set forth on the Cover Sheet. “Prudent Operating 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 and independent power producer industry during the relevant time period with respect to grid-interconnected, utility-scale hydroelectric generating facilities in the Western United States, or (b) any of the practices, methods and acts which, in the exercise of reasonable judgement 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 Operating 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 in the Western United States.
Prudent Operating 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. “PTC” means the production tax credit established pursuant to Section 45 of the United States Internal Revenue Code of 1986.
“Recurring Certificate Transfers” has the meaning set forth in Section 4.8(a). “Renewable Energy Credit” has the meaning set forth in California Public Utilities Code Section 399.12(h), as may be amended from time to time or as further defined or supplemented by Law.
“Renewable Energy Incentives” means: (a) all federal, state, or local Tax credits or other Tax benefits associated with the construction, ownership, or production of electricity from the Facility (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 9 way to the Facility; and (c) any other form of incentive relating in any way to the Facility that is not a Green Attribute or a Future Environmental Attribute. “Resource Adequacy Benefits” means the rights and privileges attached to the Facility 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 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 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.
“Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” has a corollary meaning.
“Scheduled Energy” means the Facility Energy that clears under the applicable CAISO market based on the final Day-Ahead Schedule, FMM Schedule (as defined in the CAISO Tariff), or any other financially binding Schedule, market instruction or dispatch for the Facility for a given period of time implemented in accordance with the CAISO Tariff. “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.
“Self-Schedule” has the meaning set forth in the CAISO Tariff. “Seller” has the meaning set forth on the Cover Sheet.
“Seller’s WREGIS Account” has the meaning set forth in Section 4.8(a). “Settlement Amount” means the Non-Defaulting Party’s Costs. The Settlement Amount does not include Gains, Losses, consequential, incidental, punitive, exemplary or indirect or business interruption damages.
“Settlement Interval” has the meaning set forth in the CAISO Tariff. “Settlement Period” has the meaning set forth in the CAISO Tariff. “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.
10 “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.
“Site” means the real property on which the Facility is located, as further described in Exhibit A.
“Site Control” means that Seller: (a) owns the Site; (b) is the lessee of the Site; or (c) is the holder of an easement or an option for an easement, right-of-way grant, or similar instrument with respect to the Site.
“Station Use” means:
(a) The Energy produced by the Facility that is used within the Facility to power the lights, motors, control systems and other electrical loads that are necessary for operation of the Facility; and
(b) The Energy produced by the Facility that is consumed within the Facility’s electric energy distribution system as losses.
“System Emergency” means any condition that requires, as determined and declared by CAISO or the PTO, automatic or immediate action to (i) prevent or limit harm to or loss of life or property, (ii) prevent loss of transmission facilities or generation supply in the immediate vicinity of the Facility, or (iii) to preserve Transmission System reliability. “Tax” or “Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Tax Credits” means the PTC, ITC and any other state, local or federal production tax credit, depreciation benefit, tax deduction or investment tax credit specific to the production of renewable energy or investments in renewable energy facilities. “Terminated Transaction” has the meaning set forth in Section 11.2(a). “Termination Payment” has the meaning set forth in Section 11.3. “Transmission Provider” means any entity or entities transmitting or transporting the Facility Energy on behalf of Seller or Buyer to or from the Delivery Point. “Transmission System” means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service within the CAISO grid from the Delivery Point.
11 “Variable Energy Resource” or “VER” has the meaning set forth in the CAISO Tariff. “WREGIS” means the Western Renewable Energy Generation Information System or any successor renewable energy tracking program.
“WREGIS Certificate Deficit” has the meaning set forth in Section 4.8(e). “WREGIS Certificates” has the same meaning as “Certificate” as defined by WREGIS in the WREGIS Operating Rules and are designated as eligible for complying with the California Renewables Portfolio Standard.
“WREGIS Operating Rules” means those operating rules and requirements adopted by WREGIS as of October 2022, as subsequently amended, supplemented or replaced (in whole or in part) from time to time.
1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless otherwise specified;
(e) a reference to a document or agreement, including this Agreement means such document, agreement or this Agreement including any amendment or supplement to, or replacement, novation or modification of this Agreement, but disregarding any amendment, 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 word 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; 12 (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 Operating Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Operating 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.
ARTICLE 2
TERM; CONDITIONS PRECEDENT
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 set forth herein (“Contract Term”); provided, that Buyer’s obligations to pay for or accept any Product are subject to Seller’s completion of the conditions precedent pursuant to Section 2.2.
(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 shall remain in full force and effect for four (4) years following the termination of this Agreement. (c) Either Party may terminate this Agreement upon ninety (90) days’ prior Notice to the other Party; provided, however, that such termination shall not affect or excuse the performance of either Party of their respective obligations arising prior to such termination and, provided further, that this Agreement and any other documents executed and delivered hereunder shall remain in effect until both Parties have fulfilled all of their obligations arising prior to such termination. Upon any such termination, neither Party shall have any liability to the other Party, save and except to the extent arising from obligations arising prior to such termination and those obligations specified in Section 2.1(b).
2.2 Conditions Precedent. Buyer’s obligations to pay for or accept any Product are subject to Seller’s completion, or Buyer’s written waiver, of each of the following conditions:
13 (a) A Participating Generator Agreement and a Meter Service Agreement 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;
(b) All required regulatory authorizations, approvals and permits for the operation of the Facility have been obtained and shall be in full force and effect; (c) Seller has received CEC Certification and Verification for the Facility; and (d) Seller shall have completed all applicable WREGIS registration requirements under WREGIS rules, including (as applicable) the completion and submittal of all applicable registration forms and supporting documentation, which may include applicable interconnection agreements, informational surveys related to the Facility, QRE service agreements, and other appropriate documentation required to effect Facility registration with WREGIS and to enable Renewable Energy Credit transfers related to the Facility within the WREGIS system.
ARTICLE 3
PURCHASE AND SALE
3.1 Purchase and Sale of Product. Subject to the terms and conditions of this Agreement, during the Delivery Term, Buyer will purchase and receive all the Product produced by or associated with the Facility at the Contract Price and in accordance with Exhibit C, and Seller shall supply and deliver to Buyer all the Product produced by or associated with the Facility (net of applicable losses). At its sole discretion, Buyer may during the Delivery Term re-sell or use for another purpose all or a portion of the Product, provided that no such re-sale or use shall relieve Buyer of any obligations hereunder. During the Delivery Term, subject to and without limiting Seller’s right to retain CAISO revenues as described in Exhibit D, Buyer will have exclusive rights to offer, bid, or otherwise submit the Product, or any component thereof, purchased hereunder from the Facility after the Delivery Point for resale into the market or to any third party, and retain and receive any and all related revenues. Buyer has no obligation to purchase from Seller any Product for which the associated Facility Energy is not or cannot be delivered to the Delivery Point as a result of an outage of the Facility, a Force Majeure Event, or a Curtailment Order.
3.2 Sale of Green Attributes. During the Delivery Term, Seller shall sell and deliver to Buyer, and Buyer shall purchase and receive from Seller, all Green Attributes attributable to the Facility Energy generated by the Facility.
3.3 Imbalance Energy. Buyer and Seller recognize that in any given Settlement Period there may be Imbalance Energy. To the extent there is any Imbalance Energy, any payments or charges related to such Imbalance Energy shall be for the account of Seller.
3.4 Reserved.
3.5 Future Environmental Attributes.
(a) The Parties acknowledge and agree that as of the Effective Date, environmental attributes sold under this Agreement are restricted to Green Attributes; however, 14 Future Environmental Attributes may be created by a Governmental Authority through Laws enacted after the Effective Date. Subject to the final sentence of this Section 3.5(a), and Section
3.5(b), in such event, Buyer shall bear all costs and risks associated with the transfer, qualification, verification, registration and ongoing compliance for such Future Environmental Attributes, but there shall be no increase in the Contract Price. Upon Seller’s receipt of Notice from Buyer of Buyer’s intent to claim such Future Environmental Attributes, the Parties shall determine the necessary actions and additional costs associated with such Future Environmental Attributes.
Seller shall have no obligation to alter the Facility or the operation of the Facility unless the Parties have agreed on all necessary terms and conditions relating to such alteration or change in operation and Buyer has agreed to reimburse Seller for all costs, losses, and liabilities associated with such alteration or change in operation.
(b) If Buyer elects to receive Future Environmental Attributes pursuant to Section 3.5(a), the Parties agree to negotiate in good faith with respect to the development of further agreements and documentation necessary to effectuate the transfer of such Future Environmental Attributes, including agreement with respect to (i) appropriate transfer, delivery and risk of loss mechanisms, and (ii) appropriate allocation of any additional costs to Buyer, as set forth above; provided, that the Parties acknowledge and agree that such terms are not intended to alter the other material terms of this Agreement.
3.6 Reserved.
3.7 Reserved.
3.8 Reserved.
3.9 CEC Certification and Verification. Seller shall take all necessary steps including, but not limited to, making or supporting timely filings with the CEC to maintain CEC Certification and Verification for the Facility throughout the Delivery Term, including compliance with all applicable requirements for certified facilities set forth in the current version of the RPS Eligibility Guidebook (or its successor).
3.10 Reserved.
3.11 Non-Modifiable Standard Terms and Conditions.
(a) Eligibility: Seller, and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement that: (i) the Project qualifies and is certified by the CEC as an Eligible Renewable Energy Resource (“ERR”) as such term is defined in Public Utilities Code Section 399.12 or Section 399.16; and (ii) the Project’s output delivered to Buyer qualifies under the requirements of the California Renewables Portfolio Standard. To the extent a Change in Law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC 6]. (b) Transfer of Renewable Energy Credits: Seller and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement the Renewable Energy Credits transferred to Buyer conform to the definition and attributes required 15 for compliance with the California Renewables Portfolio Standard, as set forth in California Public Utilities Commission Decision 08-08-028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC REC-1]. (c) Tracking of RECs in WREGIS: Seller warrants that all necessary steps to allow the Renewable Energy Credits transferred to Buyer to be tracked in the Western Renewable Energy Generation Information System will be taken prior to the first delivery under the contract. [STC REC-2].
(d) Applicable Law: 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. [STC 17].
ARTICLE 4
OBLIGATIONS AND DELIVERIES
4.1 Delivery.
(a) Energy. Subject to the provisions of this Agreement, commencing on the Delivery Term Start Date and through the end of the Contract Term, Seller shall supply and deliver the Product to Buyer at the Delivery Point, and Buyer shall take delivery of the Product at the Delivery Point in accordance with the terms of this Agreement. Seller will be responsible for paying or satisfying when due any costs or charges imposed in connection with the delivery of Facility Energy to the Delivery Point, including without limitation, Station Use, Electrical Losses, and any operation and maintenance charges imposed on Seller by the Transmission Provider directly relating to the Facility’s operations. The Facility Energy will be scheduled to the CAISO by Buyer (or Buyer’s designated Scheduling Coordinator) in accordance with Exhibit D. (b) Green Attributes. All Green Attributes associated with the Facility Energy during the Delivery Term are exclusively dedicated to and will be conveyed to Buyer. Seller represents and warrants that Seller holds the rights to all Green Attributes associated with the Facility Energy, and Seller agrees to convey and hereby conveys all such Green Attributes to Buyer as included in the delivery of the Product from the Facility.
4.2 Title and Risk of Loss.
(a) Facility Energy. Title to and risk of loss related to the Facility Energy, shall pass and transfer from Seller to Buyer at the Delivery Point. Seller warrants that all Product delivered to Buyer is free and clear of all liens, security interests, claims and encumbrances of any kind.
16 (b) Green Attributes. Title to and risk of loss related to the Green Attributes shall pass and transfer from Seller to Buyer upon the transfer of such Green Attributes in accordance with WREGIS.
4.3 Forecasting. Seller shall provide the forecasts described below at its sole expense and in a format reasonably acceptable to Buyer (or Buyer’s designee). Seller shall use reasonable efforts to provide forecasts that are accurate and, to the extent not inconsistent with the requirements of this Agreement, shall prepare such forecasts, or cause such forecasts to be prepared, in accordance with Prudent Operating Practices. (a) Annual Forecast of Facility Energy. No less than forty-five (45) days before (i) the first day of the first Contract Year of the Delivery Term and (ii) at the beginning of each calendar year for every subsequent Contract Year during the Delivery Term, Seller shall provide to Buyer and Buyer’s SC a non-binding forecast of each month’s total expected Facility Energy for the following calendar year.
(b) Monthly Forecast of Facility Energy and Available Generating Capacity.
No less than thirty (30) days before the Delivery Term Start Date, and thereafter ten (10) Business Days before the beginning of each month during the Delivery Term, Seller shall provide to Buyer and the SC (if applicable) a non-binding forecast of the hourly expected Facility Energy, Available Generating Capacity for each day of the following month in a form substantially similar to the table found in Exhibit F-2 (“Monthly Delivery Forecast”). (c) Day-Ahead Forecast. By 5:30 AM Pacific Prevailing Time on the Business Day immediately preceding the date of delivery, or as otherwise specified by Buyer consistent with Prudent Operating Practice, Seller shall provide Buyer with a non-binding forecast of (i) Available Generating Capacity and (ii) hourly expected Facility Energy, in each case, for each hour of the immediately succeeding day (“Day-Ahead Forecast”). A Day-Ahead Forecast provided in a day prior to any non-Business Day(s) shall include non-binding forecasts for the immediate day, each succeeding non-Business Day and the next Business Day. Each Day-Ahead Forecast shall clearly identify, for each hour, Seller’s non-binding best estimate of (i) the Available Generating Capacity and (ii) the hourly expected Facility Energy. (d) CAISO Tariff Requirements. Seller will comply with all applicable requirements of the CAISO Tariff, including all applicable obligations for Variable Energy Resources under the CAISO Tariff and the Eligible Intermittent Resource Protocol, including providing appropriate operational data and meteorological data.
4.4 Reserved.
4.5 Reserved.
4.6 Reduction in Delivery Obligation.
(a) Facility Maintenance. Seller shall provide to Buyer written schedules for scheduled maintenance for the Facility for each Contract Year no later than thirty (30) days prior to the first day of the applicable Contract Year.
17 (b) Forced Facility Outage. Seller shall be permitted to stop or 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) Water Operations. Seller shall be permitted to stop or reduce deliveries of Product based on water system needs. Seller has represented and disclosed to Buyer that the project generates the Product only when sufficient water resources are available to operate the Facility, and that sufficient water resources are frequently not available or are available in reduced quantities such that maximum Facility Energy is not regularly achieved. Seller makes no warranty or guarantee as to the frequency or quantity of Product, other than the maximums and capacities as stated herein.
(d) System Emergencies and other Interconnection Events. Seller shall be permitted to stop or reduce deliveries of Product during any period of System Emergency, or upon Notice of a Curtailment Order pursuant to the terms of this Agreement, the Interconnection Agreement or applicable tariff.
(e) Force Majeure Event. Seller shall be permitted to stop or reduce deliveries of Product during any Force Majeure Event.
(f) Buyer Event of Default. Seller shall be permitted to stop or reduce deliveries of Product during any period of Buyer Event of Default. (g) Health and Safety. Seller shall be permitted to stop or reduce deliveries of Product as necessary to maintain health and safety pursuant to Section 6.2.
4.7 Reserved.
4.8 WREGIS. Seller shall take all actions and execute all documents or instruments necessary to ensure that all WREGIS Certificates associated with all Renewable Energy Credits corresponding to all Facility Energy are issued and tracked for purposes of satisfying the requirements of the California Renewables Portfolio Standard and transferred in a timely manner to Buyer for Buyer’s sole benefit. Seller shall transfer the Renewable Energy Credits to Buyer.
Seller shall comply with all Laws, including the WREGIS Operating Rules, regarding the certification and transfer of such WREGIS Certificates to Buyer and Buyer shall be given sole title to all such WREGIS Certificates. In addition:
(a) Prior to the Delivery Term Start Date, Seller shall register the Facility with WREGIS and establish an account with WREGIS (“Seller’s WREGIS Account”), which Seller shall maintain until the end of the Delivery Term. Seller shall transfer the WREGIS Certificates using “Recurring Certificate Transfers” (as described in the WREGIS Operating Rules) from Seller’s WREGIS Account to the WREGIS account(s) of Buyer or the account(s) of a designee that Buyer identifies by Notice to Seller (“Buyer’s WREGIS Account”). Seller shall be responsible for all expenses associated with registering the Facility with WREGIS, establishing and maintaining Seller’s WREGIS Account, paying WREGIS Certificate issuance and transfer fees, and transferring WREGIS Certificates from Seller’s WREGIS Account to Buyer’s WREGIS Account.
18 (b) Seller shall cause Recurring Certificate Transfers to occur on a monthly basis in accordance with the certification procedure established by the WREGIS Operating Rules.
Since WREGIS Certificates will only be created for whole MWh amounts of Facility Energy generated, any fractional MWh amounts (i.e., kWh) will be carried forward until sufficient generation is accumulated for the creation of a WREGIS Certificate. (c) Seller shall, at its sole expense, ensure that the WREGIS Certificates for a given calendar month correspond with the Facility Energy for such calendar month as evidenced by the Facility’s metered data.
(d) Buyer shall have all right and title to all such WREGIS Certificates upon payment to Seller in accordance with Section 8.2.
(e) A “WREGIS Certificate Deficit” means any deficit or shortfall in WREGIS Certificates delivered to Buyer for a calendar month as compared to the Facility Energy for the same calendar month (“Deficient Month”) caused by an error or omission of Seller. If any WREGIS Certificate Deficit is caused, or the result of any action or inaction by Seller, then the amount of Facility Energy in the Deficient Month shall be reduced by the amount of the WREGIS Certificate Deficit for purposes of calculating Buyer’s payment to Seller under Article 8; provided, however, that such adjustment shall not apply to the extent that Seller resolves the WREGIS Certificate Deficit within ninety (90) days after the Deficient Month. Without limiting Seller’s obligations under this Section 4.8, if a WREGIS Certificate Deficit is caused solely by an error or omission of WREGIS, the Parties shall cooperate in good faith to cause WREGIS to correct its error or omission.
(f) If WREGIS changes the WREGIS Operating Rules after the Effective Date or applies the WREGIS Operating Rules in a manner inconsistent with this Section 4.8 after the Effective Date, the Parties promptly shall modify this Section 4.8 as reasonably required to cause and enable Seller to transfer to Buyer’s WREGIS Account a quantity of WREGIS Certificates for each given calendar month that corresponds to the Facility Energy in the same calendar month.
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 19 documentation, then Buyer shall indemnify, defend, and hold Seller harmless from any liability with respect to Taxes from which Buyer claims it is exempt.
5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, however, that neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefor from the other Party. All Product delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Product.
ARTICLE 6
MAINTENANCE OF THE FACILITY
6.1 Maintenance of the Facility. Seller shall comply with Law and Prudent Operating Practice relating to the operation and maintenance of the Facility and 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, reasonable 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 Facility Energy to Buyer.
6.3 Shared Facilities. The Parties acknowledge and agree that certain of the Shared Facilities and Interconnection Facilities, and Seller’s rights and obligations under the Interconnection Agreement, may be subject to certain shared facilities or co-tenancy agreements to be entered into among Seller, the Participating Transmission Owner, or third parties pursuant to which certain Interconnection Facilities may be subject to joint ownership and shared maintenance and operation arrangements; provided that such agreements (i) shall permit Seller to perform or satisfy, and shall not purport to limit, its obligations hereunder and (ii) provide for separate metering of the Facility.
ARTICLE 7
METERING
7.1 Metering. Seller shall measure the amount of Facility Energy using the Facility Meter. All meters will be operated pursuant to applicable CAISO-approved calculation methodologies and maintained at Seller’s cost. Subject to meeting any applicable CAISO requirements, the Facility Meter shall be programmed to adjust for Electrical Losses and Station Use from the Facility to the Delivery Point in a manner subject to Buyer’s prior written approval, not to be unreasonably withheld. Metering will be consistent with the Metering Diagram to be set forth as Exhibit H. Each meter shall be kept under seal, such seals to be broken only when the meters are to be tested, adjusted, modified or relocated. In the event Seller breaks a seal, Seller 20 shall notify Buyer as soon as practicable. In addition, Seller hereby agrees to provide all meter data to Buyer in a form reasonably acceptable to Buyer, and consents to Buyer obtaining from CAISO the CAISO meter data directly relating to the Facility and all inspection, testing and calibration data and reports. Buyer shall, or shall cause its Scheduling Coordinator to, cooperate to allow Seller the ability to retrieve the meter reads from the CAISO Operational Meter Analysis and Reporting (OMAR) web or directly from the CAISO meter(s) at the Facility.
7.2 Meter Verification. Annually, if Seller has reason to believe there may be a meter malfunction, or upon Buyer’s reasonable request, Seller shall test the 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. If a meter is inaccurate it shall be promptly repaired or replaced.
ARTICLE 8
INVOICING AND PAYMENT; CREDIT
8.1 Invoicing. Seller shall make good faith efforts to deliver an invoice to Buyer for Product within ten (10) days after the end of the prior monthly billing period. Each invoice shall reflect (a) records of metered data, including CAISO metering and transaction data sufficient to document and verify the amount of Product delivered by the Facility for any Settlement Period during the preceding month, including the amount of Facility Energy produced by the Facility as read by the Facility Meter, the calculation of Facility Energy, and the Contract Price; (b) access to any records, including invoices or settlement data from the CAISO, necessary to verify the accuracy of any amount; and (c) be in a format reasonably specified by Buyer, covering the services provided in the preceding month determined in accordance with the applicable provisions of this Agreement. Buyer shall, and shall cause its Scheduling Coordinator to, provide Seller with all reasonable access (including, in real time, to the maximum extent reasonably possible) to any records, including invoices or settlement data from the CAISO, forecast data and other information, all as may be necessary from time to time for Seller to prepare and verify the accuracy of all invoices.
8.2 Payment. Buyer shall make payment to Seller for Product by wire transfer or ACH payment to the bank account provided on each monthly invoice. Payment for undisputed invoice amounts shall be due to the applicable Party twenty (20) Business Days from the invoice date.
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 be calculated based on the annualized prime rate 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.
8.3 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 four (4) years or as otherwise required by Law. Upon 21 ten (10) Business Days’ Notice to the other Party, either Party shall be granted reasonable 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. Seller acknowledges that in accordance with California Government Code Section 8546.7, Seller may be subject to audit by the California State Auditor with regard to Seller’s performance of this Agreement because the compensation under this Agreement exceeds $10,000.
8.4 Payment Adjustments; Billing Errors. Payment adjustments shall be made if Buyer or Seller discovers there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section 8.5 or an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO; provided, however, that except to the extent recognized by and resulting in an adjustment by CAISO, there shall be no adjustments to prior invoices based upon meter inaccuracies. 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 8.2, accruing from the date on which the adjusted amount should have been due.
8.5 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 8.4. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.5 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.
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 as 22 follows: (a) if sent by United States mail with proper first class postage prepaid, three (3) Business Days following the date of the postmark on the envelope in which such Notice was deposited in the United States mail; (b) if sent by a regularly scheduled overnight delivery carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees, the next Business Day after the same is delivered by the sending Party to such carrier; (c) if sent by electronic communication (including electronic mail or other electronic means) and if concurrently with the transmittal of such electronic communication the sending Party provides a copy of such electronic Notice by hand delivery or express courier, or if receipt is acknowledged by the other Party, at the time indicated by the time stamp upon delivery; or (d) if delivered in person, upon receipt by the receiving Party. Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch information or requests, may be sent by electronic communication and shall be considered delivered upon successful completion of such transmission.
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 a change in water conditions or operational restrictions that limits Facility operations or causes the Facility to no longer be capable of generating energy; an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; epidemic; landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; 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 electric energy 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 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 23 as described above that disables physical or electronic facilities necessary to transfer funds to the payee Party; or (iv) a Curtailment Order, unless caused by a Force Majeure Event.
10.2 No Liability If a Force Majeure Event Occurs. Neither Seller nor Buyer shall be liable to the other Party in the event it is prevented from performing its obligations hereunder in whole or in part due to a Force Majeure Event. The Party rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take reasonable actions necessary to remove such inability. Nothing herein shall be construed as permitting that Party to continue to fail to perform after said cause has been removed. Neither Party shall be considered in breach or default of this Agreement if and to the extent that any failure or delay in the Party’s performance of one or more of its obligations hereunder is caused by a Force Majeure Event.
10.3 Notice. In the event of any delay or nonperformance resulting from a Force Majeure Event, the Party suffering the Force Majeure Event shall (a) as soon as practicable notify the other Party in writing of the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance, and (b) 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; provided, however, that a Party’s failure to give timely Notice shall not affect such Party’s ability to assert that a Force Majeure Event has occurred unless the delay in giving Notice materially prejudices the other Party.
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 (or such longer additional period, not to exceed an additional sixty (60) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) days period despite exercising commercially reasonable efforts); (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 (or such longer additional period, not to exceed an additional ninety (90) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) days period despite exercising commercially reasonable efforts);
(iv) such Party becomes Bankrupt;
24 (v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Section 14.1; or
(vi) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party. (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
(i) if at any time during the Delivery Term, Seller delivers or attempts to deliver electric energy to the Delivery Point for sale under this Agreement that was not generated by the Facility; and
(ii) the failure by Seller to begin deliveries of Facility Energy within sixty (60) days after the Delivery Term Start Date.
11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (“Non-Defaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“Early Termination Date”) that terminates this Agreement (the “Terminated Transaction”) and ends the Delivery Term effective as of the Early Termination Date;
(b) to accelerate all amounts owing between the Parties, and to collect as liquidated damages the Termination Payment calculated in accordance with Section 11.3 below; (c) to withhold any payments due to the Defaulting Party under this Agreement; (d) to suspend performance; or
(e) to exercise any other right or remedy available at law or in equity, including specific performance or injunctive relief, except to the extent such remedies are expressly limited under this Agreement;
provided, that payment by the Defaulting Party of the Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Party’s sole and exclusive remedy for any Terminated Transaction and the Event of Default related thereto.
11.3 Termination Payment. The termination payment (“Termination Payment”) for a Terminated Transaction shall be the aggregate of all Settlement Amounts 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, 25 a Settlement Amount for the Terminated Transaction as of the Early Termination Date. The Settlement Amount shall not include Gains, Losses, 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 a Terminated Transaction would be difficult or impossible to predict with certainty, (b) the Termination Payment described in this Section 11.3 is a reasonable and appropriate approximation of such damages, and (c) the Termination Payment described in this Section 11.3 is the exclusive remedy of the Non-Defaulting Party in connection with a 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 the Termination Payment (as applicable) 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 a Terminated Transaction, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Termination Payment 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 liquidated 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.
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 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, BY STATUTE, IN TORT OR CONTRACT.
26 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. IF NO
REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 4.8, 11.2 AND 11.3, 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
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:
27 (a) Seller is 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. Seller was formed according to the County Water Authority Act (1943) which authorizes Seller to, among other things, generate and sell hydroelectricity to any entity engaged in the sale of electricity at retail or wholesale.
(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, except where such failure does not have a material adverse effect on Seller’s performance under 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) The Facility is located in the State of California. (f) As between Buyer and Seller, Seller will be responsible for obtaining all permits necessary to operate and maintain the Facility.
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 and a validly existing community choice aggregator, duly organized, and in good standing under the laws of the State of California and the rules, regulations and orders of the California Public Utilities Commission, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All Persons making up the governing body of Buyer are the elected or appointed incumbents in their positions and hold their positions in good standing in accordance with the Joint Powers Agreement and other Law. (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 this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly 28 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 warrants and covenants that with respect to its contractual obligations under this Agreement, it will not claim immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (1) suit, (2) jurisdiction of court (provided that such court is located within a venue permitted in law and under the Agreement), (3) relief by way of injunction, order for specific performance or recovery of property, (4) attachment of assets, or (5) execution or enforcement of any judgment; provided, however that nothing in this Agreement shall waive the obligations or rights set forth in the California Tort Claims Act (Government Code Section 810 et seq.).
(f) Buyer is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California.
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, approvals, and permits 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. 29 ARTICLE 14
ASSIGNMENT
14.1 General Prohibition on Assignments. Neither Party may voluntarily assign this Agreement or its rights or obligations under this Agreement, without the prior written consent of the other Party, such consent not to be unreasonably withheld. Any assignment made without required written consent, or in violation of the conditions to assignment set out below, shall be null and void.
ARTICLE 15
DISPUTE RESOLUTION
15.1 Venue. 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 San Diego County, California.
15.2 Dispute Resolution. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a written 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, the Parties shall submit the dispute to mediation prior to seeking any and all remedies available to it at Law in or equity. The Parties will cooperate in selecting a qualified neutral mediator selected from a panel of neutrals and in scheduling the time and place of the mediation as soon as reasonably possible, but in no event later than thirty (30) days after the request for mediation is made. The Parties agree to participate in the mediation in good faith and to share the costs of the mediation, including the mediator’s fee, equally, but such shared costs shall not include each Party’s own attorneys’ fees and costs, which shall be borne solely by such Party. If the mediation is unsuccessful, 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.
ARTICLE 16
RESERVED
ARTICLE 17
RESERVED
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 30 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, (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 applicable law, order, regulation, ruling, regulatory request, accounting disclosure rule or standard or any exchange, control area or independent system operator request or 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. 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 in this Article 18. 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 obtain injunctive relief against the threatened breach of this Article 18 or the continuation of any such breach, without the necessity of proving actual damages.
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 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. This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other 31 Party as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof.
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 Lender 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; Electronic Signatures. 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. The Parties may rely on electronic or scanned signatures as originals. Delivery of an executed signature page of this Agreement by email delivery of a PDF image shall be the same as delivery of an original executed signature page.
19.8 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns. 32 19.9 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 the employees, directors, officers, consultants or advisors or Buyer or its constituent members, in connection with this Agreement.
19.10 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.
19.11 Further Assurances. 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.
[Signatures on following page]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
SAN DIEGO COUNTY WATER
AUTHORITY, a county water authority
By:
Name: Dan Denham
Title: General Manager
Date:
CLEAN ENERGY ALLIANCE, a
California joint powers authority
By:
Name: Gregory Wade
Title: Chief Executive Officer
Date:
Approved as to form:
By:
Name: Michael McDonnell
Title: Assistant General Counsel
Approved as to form:
By:
Name: Johanna N. Canlas
Title: General Counsel
Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Site Name: Rancho Peñasquitos
Site includes all or some of the following APNs: 3180212300 County: San Diego
Type of Facility: Hydroelectric Facility
Operating Characteristics of Facility:
Contract Capacity: 4.1 MW
Total Facility Capacity: 4.1 MW (net, at the Delivery Point) Interconnection Point: Chicarita Substation
Delivery Point: the PNode designated by the CAISO for the Facility Participating Transmission Owner: San Diego Gas & Electric Company Exhibit B - 1
EXHIBIT B
RESERVED
Exhibit C - 1
EXHIBIT C
COMPENSATION
Buyer shall compensate Seller for the Product in accordance with this Exhibit C. (a) Facility Energy. For each MWh of Facility Energy in each Settlement Period, Buyer shall pay Seller the Contract Price.
Exhibit D - 1
EXHIBIT D
SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Buyer as Scheduling Coordinator for the Facility. At least thirty (30) days prior to the Delivery Term Start Date, (i) Seller shall take all actions and execute and deliver to Buyer and the CAISO all documents necessary to authorize or designate Buyer (or Buyer’s designee) as the Scheduling Coordinator for the Facility effective as of the Delivery Term Start Date, and (ii) Buyer shall, and shall cause its designee to, take all actions and execute and deliver to Seller and the CAISO all documents necessary to authorize or designate Buyer or its designee as the Scheduling Coordinator for the Facility effective as of the Delivery Term Start Date. On and after the Delivery Term Start Date, Seller shall not authorize or designate any other party to act as the Facility’s Scheduling Coordinator, nor shall Seller perform for its own benefit the duties of Scheduling Coordinator, and Seller shall not revoke Buyer’s authorization to act as the Facility’s Scheduling Coordinator unless agreed to by Buyer. Buyer (as the Facility’s SC) shall submit Schedules to the CAISO in accordance with this Agreement and the applicable CAISO Tariff, protocols and Scheduling practices for Product on a day-ahead, hour-ahead, fifteen-minute market or real time basis, as determined by Buyer.
(b) Notices. Buyer (as the Facility’s SC) shall provide Seller with access to a web-based system through which Seller shall submit to Buyer and the 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 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 as otherwise set forth below, as of the Delivery Term Start Date, Seller 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, Inter-SC Trade credits, or other credits in respect of the Product Scheduled or delivered from the Facility. 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 such non-compliance is caused by Buyer’s unexcused failure to perform its duties as Scheduling Coordinator for the Facility). The Parties agree that any Availability Incentive Payments (as defined in the CAISO Tariff) are for the benefit of 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. 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 Buyer as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or any CAISO directive, including Curtailment Orders, or to perform in accordance with this Agreement, including with respect to the outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties shall be Seller’s responsibility.
Exhibit D - 2
(d) CAISO Settlements. As of the Delivery Term Start Date, Buyer (as the Facility’s SC) shall be responsible for all settlement functions with the CAISO related to the Facility. Buyer shall render a separate invoice to Seller for any CAISO payments, charges or penalties (“CAISO Charges Invoice”) for which Seller is responsible under this Agreement.
CAISO Charges Invoices shall be rendered after settlement information becomes available from the CAISO that identifies any CAISO charges. Notwithstanding the foregoing, Seller acknowledges that the CAISO will issue additional invoices reflecting CAISO adjustments to such CAISO charges. Buyer will review, validate, and if requested by Seller under paragraph (e) below, dispute any charges that are the responsibility of Seller in a timely manner and consistent with Buyer’s existing settlement processes for charges that are Buyer’s responsibilities. Subject to Seller’s right to dispute and to have Buyer pursue the dispute of any such invoices, Seller shall pay the amount of CAISO Charges Invoices within ten (10) Business Days of Seller’s receipt of the CAISO Charges Invoice. If Seller fails to pay such CAISO Charges Invoice within that period, Buyer may net or offset any amounts owing to it for these CAISO Charges Invoices against any future amounts it may owe to Seller under this Agreement. The obligations under this Section with respect to payment of CAISO Charges Invoices shall survive the expiration or termination of this Agreement.
(e) Dispute Costs. Buyer (as the Facility’s SC) may be required by Seller to dispute CAISO settlements in respect of the Facility. Seller agrees to pay Buyer’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 Seller with respect to the Facility that Seller has directed Buyer to dispute.
(f) Terminating Buyer’s Designation as Scheduling Coordinator. At least thirty (30) days prior to expiration of this Agreement or as soon as reasonably practicable upon an earlier termination of this Agreement, the Parties will take all actions necessary to terminate the designation of Buyer as Scheduling Coordinator for the Facility as of 11:59 p.m. on such expiration date.
(g) Master Data File and Resource Data Template; Master Resource Database.
The Parties will collaborate to comply with the applicable deadlines for filing and updating the information for the Facility in the CAISO Master Data File and Resource Data Template and the CPUC Master Resource Database. Seller shall provide the data 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 at least ten (10) Business Days before the deadline for submission to CAISO and Buyer (as SC) shall promptly provide such data to CAISO. Seller shall provide the data that is required for the CPUC’s Master Resource Database for the Facility consistent with this Agreement to Buyer for review and approval at least ten (10) Business Days before the deadline for submission of such to the CPUC. Neither Party shall change such CAISO or CPUC data without the other Party’s prior written consent. At least once per Contract Year, Seller shall review and confirm that the data provided for the CAISO’s Master Data File and Resource Data Template (or successor data systems) and CPUC’s Master Resource Database for this Facility remains consistent with the actual operating characteristics of the Facility and provide such information to Buyer for review at least ten (10) Business Days prior to submission to the CAISO or CPUC as applicable.
Exhibit E - 1
EXHIBIT E
OPERATING RESTRICTIONS
• Nameplate capacity of the Project: 4.1 MW
• Minimum capacity: 2.3 MW
• Ramp rate: .015 MW/minute
Exhibit F-1 - 1
EXHIBIT F-1
AVERAGE EXPECTED ENERGY
[Average Expected Energy, MWh Per Hour]
1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
The foregoing table is provided for informational purposes only, and it shall not constitute, or be deemed to constitute, an obligation of any of the Parties to this Agreement.
Exhibit F-2 - 1
EXHIBIT F-2
AVAILABLE CAPACITY
[Available Generating Capacity, MWh Per Hour] – [Insert Month] 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 Day 1
Day 2
Day 3
Day 4
Day 5
[insert additional rows for each day in the month]
Day
29 Day
30 Day
31 The foregoing table is provided for informational purposes only, and it shall not constitute, or be deemed to constitute, an obligation of any of the Parties to this Agreement.
Exhibit G - 1
EXHIBIT G
NOTICES
San Diego County Water Authority Clean Energy Alliance
All Notices:
San Diego County Water Authority
4677 Overland Avenue
San Diego, CA 92123
Attn: Neena Kuzmich, Director of
Engineering
Phone: 858-522-6815
Email: [email protected]
All Notices:
Clean Energy Alliance
5857 Owens Ave, Suite 2023
Carlsbad, CA 92008
Attn: Gregory Wade, CEO
Phone: (760) 209-6177
Email: [email protected]
Reference Numbers:
Duns: 084241033
Federal Tax ID Number: 95-6002767
Reference Numbers:
Duns: 117585162
Federal Tax ID Number: 84-3839142
Invoices:
Attn: Engineering Contracts
Phone: 858-522-6804
Email: [email protected]
Invoices:
Attn: Accounts Payable
Phone: (760) 209-6177
Email: [email protected];
[email protected]
Scheduling:
Attn: Duty Operator
Phone: 760-233-3291
Email: [email protected]
Scheduling:
Attn: Jaclyn Harr, The Energy Authority
Phone: (408) 306-0432
Email: [email protected]
Confirmations:
Attn: Brent Fountain
Phone: 858-522-6806
Email: [email protected]
Confirmations:
Attn: Gregory Wade, CEO
Phone: (760) 209-6177
Email: [email protected]
Payments:
Attn: Engineering Contracts
Phone: 858-522-6804
E-mail: [email protected]
Payments:
Attn: Andy Stern, Chief Financial Officer
Phone: (760) 209-6177
Email: [email protected]
Wire Transfer:
BNK: Wells Fargo Bank
ABA:
ACCT:
Wire Transfer:
BNK: River City
Bank ABA:
ACCT:
Exhibit G - 2
San Diego County Water Authority Clean Energy Alliance
With additional Notices of an Event of
Default to:
Attn: David Edwards, General Counsel
Phone: 858-522-6791
E-mail: [email protected]
With additional Notices of an Event of Default to:
Attn: Johanna, Canlas General Counsel
Phone: (619) 814-5813
Email: [email protected]
with a copy to:
Hall Energy Law PC
Attn: Stephen Hall
Phone: (503) 313-0755
Email: [email protected]
Exhibit H - 1
EXHIBIT H
METERING DIAGRAM
Exhibit H - 2
Staff Report
DATE: August 29, 2024
TO: Clean Energy Alliance Board of Directors
FROM: Gregory Wade, Chief Executive Officer
ITEM 10: Consider Adoption of Resolution No. 2024-016 Approving of 15-Year Power Purchase Agreement (PPA) with Deer Creek Solar I, LLC and Authorizing Execution of the PPA RECOMMENDATION:
That the Clean Energy Alliance (CEA) Board of Directors (Board) Adopt Resolution No. 2024-016 approving a 15-Year Power Purchase Agreement (PPA) with Deer Creek Solar I, LLC for solar renewable energy and storage capacity for an amount not to exceed $82,026,000 and authorizing the Chief Executive Officer to execute all applicable documents, subject to Transactions Attorney approval, if the final PPA terms are consistent with the commercial term sheet.
BACKGROUND AND DISCUSSION:
California Public Utilities Commission (CPUC) Decisions 21-06-035 and 23-02-040 (Decisions) require all load serving entities, including community choice aggregators, to procure additional resources to ensure sufficient resources are available for reliability as older non-renewable resources (Diablo Canyon, among others) are retired. These decisions are commonly and collectively referred to as a load serving entity’s Midterm Reliability (MTR) requirement. These Decisions require:
• Incremental project capacity to be brought online on or earlier than each year from 2023 to 2028;
• Resources are available for a term of at least ten (10) years; • Resources must be non-fossil fueled;
• Resources must be new build baseload renewable energy and long-duration storage, in addition to short-duration battery storage.
Pursuant to these Decisions, Clean Energy Alliance (CEA) joined with California Choice Energy Authority in issuing a joint solicitation in January 2024. The solicitation garnered 41 offers representing 28 projects.
The responses were further refined based on price, location, and eligibility to arrive at a shortlist.
One of the shortlisted projects is a project proposed by Deer Creek Solar I, LLC. The project meets the procurement requirements as established by the CPUC MTR Procurement requirements. The terms of the proposed agreement are for a period of fifteen (15) years, to begin delivering energy on April 1, 2026, for a total amount not to exceed $82,026,000.
CEA has an executed term sheet and exclusivity agreement with Deer Creek Solar I, LLC. Staff recommends the Board adopt Resolution No. 2024-016 and authorize the Chief Executive Officer to execute the final agreement, subject to CEA’s Transactions Attorney approval.
FISCAL IMPACT:
The costs related to this project are within the financial pro-forma.
Submitted for Board consideration:
___________________________________
Gregory Wade
Chief Executive Officer
ATTACHMENTS:
A. Resolution No. 2024-016, approving of 15-Year Power Purchase Agreement (PPA) with Deer Creek Solar I, LLC and Authorizing Execution of the PPA
B. Redacted Term Sheet for Power Purchase Agreement with Deer Creek Solar I, LLC Attachment A
4853-5999-5352 v1
CLEAN ENERGY ALLIANCE
RESOLUTION NO. 2024-016
A RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN ENERGY ALLIANCE
APPROVING A FIFTEEN-YEAR POWER PURCHASE AGREEMENT WITH DEER CREEK
SOLAR I, LLC AND AUTHORIZING THE CHIEF EXECUTIVE OFFICER TO EXECUTE THE AGREEMENT IN AN AMOUNT NOT TO EXCEED $82,026,000
WHEREAS, Clean Energy Alliance (CEA) is a joint powers authority established on November 4, 2019, and organized under the Joint Exercise of Powers Act (Government Code Section 6500 et seq.); and
WHEREAS, California Public Utilities Commission (CPUC) Decisions 21-06-035 and 23-02- 040 require all load serving entities, including community choice aggregators, to procure additional resources to ensure sufficient resources are available for reliability as older non-renewable resources (Diablo Canyon, among others), which decisions are commonly and collectively referred to as a load serving entity’s Midterm Reliability requirement; and WHEREAS, CEA joined with California Choice Energy Authority in issuing a joint solicitation in January 2024 for proposals to meet those agencies Midterm Reliability requirements, which solicitation garnered 41 offers representing 28 projects, and a shortlist was generated therefrom based on price, location, and eligibility; and
WHEREAS, one of the shortlisted projects is a project proposed by Deer Creek Solar I, LLC, which meets the procurement requirements as established by the CPUC Midterm Reliability Procurement requirement.
NOW, THEREFORE, BE IT RESOLVED the Board of Directors of Clean Energy Alliance hereby finds, determines and resolves as follows:
Section 1. The foregoing recitals are true and correct and incorporated fully herein.
Section 2. A fifteen-year Power Purchase Agreement (PPA) with Deer Creek Solar I, LLC to begin delivering April 1, 2026, for a total amount not to exceed $82,026,000, is hereby approved.
Section 3. The Chief Executive Officer is hereby authorized and directed to execute a PPA with Deer Creek Solar I, LLC consistent with the term sheet presented to the Board of Directors on August 22, 2024 in a form acceptable to CEA’s transactional counsel.
Section 4. The Chief Executive Officer is hereby authorized and directed to execute such other documents and take such other and further actions as may be necessary and proper to accomplish the purposes of this resolution.
CEA No. Resolution 2024-016
Deer Creek PPA
4853-5999-5352 v1
The foregoing Resolution was passed and adopted this 29th day of August, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED:
________________________________________
David Druker, Chair
ATTEST:
_____________________________
Kaylin McCauley, Board Secretary
Attachment B
5 (i) Seller has installed equipment for the Generating Facility with a nameplate capacity of no less than ninety-five percent (95%) of the Guaranteed Capacity.
(ii) Seller has installed equipment for the Storage Facility with a nameplate capacity of no less than ninety-five percent (95%) of the Storage Contract Capacity.
(iii) The Generating Facility’s testing included a performance test demonstrating peak electrical output of no less than ninety-five percent (95%) of the Guaranteed Capacity for the Generating Facility at the Delivery Point, as adjusted for ambient conditions on the date of the Facility testing.
(iv) The Storage Facility is fully capable of charging, storing and discharging energy up to no less than ninety-five percent (95%) of the Storage Contract Capacity and receiving instructions to charge, store and discharge energy, all within the operational constraints and subject to the applicable Operating Restrictions.
(v) The Generating Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.
(vi) Seller has demonstrated functionality of the Facility’s communication systems and automatic generation control (AGC) interface to operate the Facility as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, directed by the Buyer in accordance with the PPA and/or the CAISO. (vii) Seller has commissioned all equipment in accordance with its respective manufacturer’s specifications.
(viii) Authorization to parallel the Facility was obtained from the Participating Transmission Owner.
(ix) Seller has provided Buyer with a copy of written notice from the CAISO supporting Commercial Operation, in accordance with the CAISO Tariff.
(x) Seller has provided Buyer with a copy of written notice from the CAISO that the Facility has achieved Full Capacity Deliverability Status.
(xi) Seller shall have caused the Facility to be included in the Full Network Model and has the ability to offer Bids into the CAISO Day-Ahead and Real-Time markets in respect of the Facility.
(xii) All applicable permits and government approvals required for the operation of the Facility have been obtained.
(xiii) Seller has provided copies of all documentation required to be provided as a condition precedent to commencement of the Delivery Term, e.g., Interconnection Agreement, proof of insurance, satisfaction of other Seller commitments, etc.
(xiv) Seller has delivered the Performance Security to Buyer.
17 “ ” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC. “ ” or “RPS” means the renewable energy program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. “ ” shall have the meaning as mutually agreed upon by the Parties in the PPA. “ ” means the sum of the Guaranteed Capacity and the Storage Contract Capacity. “ ” means the amount of Energy expressed in MWh that the Generating Facility would have produced and delivered to the Storage Facility or at the Generating Facility Meter, but that is not produced by the Generating Facility during a Buyer Curtailment Period, which amount shall be equal to the Real-Time Forecast (of the hourly expected Energy) provided pursuant to the PPA for the period of time during the Buyer Curtailment Period (or other relevant period), less the amount of Energy delivered to the Storage Facility or at the Generating Facility Meter during the Buyer Curtailment Period (or other relevant period); provided that, if the applicable difference is negative, the Deemed Delivered Energy shall be zero (0). If the LMP for the Facility’s PNode during such Settlement Interval was less than zero, Deemed Delivered Energy shall be reduced in any Settlement Interval by the amount of any Charging Energy that was not able to be delivered to the Storage Facility during such Settlement Interval due to the unavailability of the Storage Facility due to a Forced Facility Outage. “ ” means renewable energy credits, guarantees of origin, generation certificates and any other attributes, aspects, characteristics, certificates, claims, credits, benefits, reductions, offsets, or allowances of an environmental or other nature that are created, granted or otherwise arising from the Facility’s generation of electricity from a renewable energy resource. Environmental Attributes include those currently existing at the time of execution or created during the Term under local, state, regional, federal, or international Law or treaty. “Environmental Attributes” do not include (a) any tax credits or tax incentives under applicable law or (b) direct third-party subsidies, filed rates, or feed-in tariffs for generation of electricity by the Facility. “ ” means the occurrence of (i) any Force Majeure; (ii) Buyer’s failure to perform; or, (iii) any NERC, CAISO or PTO related outage. “ Outages” means Excused Events and Planned Outages.
19 “ ” Test Energy is that energy delivered to the grid, either directly from the Facility or indirectly from the Storage Facility, prior to the Commercial Operation Date.
2. Sheet
2.1 . This Term Sheet is intended to
provide an overview of the Proposed Transaction and is not intended to constitute a binding contract or an offer to enter into a PPA with respect to the Proposed Transaction and does not obligate any Party to enter into the Proposed Transaction or execute any agreement, including the PPA, in connection with the Proposed Transaction. Neither Buyer nor Seller will be deemed to have agreed to the PPA and will not be bound by any term thereof, unless and until authorized representatives of both Buyer and Seller execute final definitive documents, enforceable in accordance with their terms.
2.2 . In connection with this Term Sheet, Respondent shall execute that certain Exclusive Negotiating Agreement (“ ”) with Buyer and provide a Shortlist Deposit (as defined in such agreement) to Buyer in accordance with the requirements of the Exclusivity Agreement. The Shortlist Deposit will be returned in accordance with, and subject to, the terms of the Exclusivity Agreement.
2.3 . Each Party will pay its own costs and expenses (whether internal or out-of-pocket, and whether for legal, financial, technical or other consultants, or other purposes) in connection with the Term Sheet and any definitive agreements.
2.4 . Respondent represents and warrants that the Renewable Rate and the Storage Rate set forth above are not subject to any other conditions, adjustments, requirements or assumptions that are not expressly set forth in this Term Sheet.
2.5 . This Term Sheet will terminate upon the earlier of (a) execution of the PPA or (b) expiration of the Exclusivity Period (as defined in the Exclusivity Agreement), as such Exclusivity Period may be extended pursuant to the Exclusivity Agreement.
2.6 . This Term Sheet is governed by, and construed in accordance with, the laws of the State of California.
2.7 Counterparts . This Term Sheet may be executed electronically and in counterparts, each of which will be enforceable against the Parties actually executing such counterparts, and all of which together will constitute one instrument. The Parties may rely on electronic or scanned signatures as originals. Delivery of an executed signature page of this Term Sheet as a PDF attachment to an email shall be the same as delivery of an original executed signature page.
2.8 . This Term Sheet supersedes all prior communications and agreements, oral or written, between the Parties regarding the subject matter herein contemplated.
2.9 . This Term Sheet will be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. No Party will assign, pledge or otherwise transfer this 20 Term Sheet or any right or obligation under this Term Sheet without first obtaining the other Parties’ prior written consent.
2.10 . IN NO EVENT SHALL ANY PARTY, ITS AFFILIATES AND/OR
REPRESENTATIVES BE LIABLE FOR ANY LOST OR PROSPECTIVE PROFITS OR ANY
OTHER CONSEQUENTIAL, INCIDENTAL, SPECIAL, PUNITIVE, INDIRECT OR EXEMPLARY DAMAGES UNDER OR IN RESPECT TO THIS TERM SHEET. [Signatures appear on the following page.]