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. THE
VALUE OF ANY TAX CREDITS, DETERMINED ON AN AFTER-TAX BASIS, LOST DUE TO BUYER’S DEFAULT (WHICH SELLER HAS NOT BEEN ABLE TO MITIGATE AFTER
USE OF REASONABLE EFFORTS) AND AMOUNTS DUE IN CONNECTION WITH THE
RECAPTURE OF ANY RENEWABLE ENERGY INCENTIVES, IF ANY, SHALL BE DEEMED TO BE DIRECT DAMAGES.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 4.7, 11.2 AND 11.3, AND AS PROVIDED
IN EXHIBIT B AND EXHIBIT G, 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.
Agenda Page 543
47 ARTICLE 13
REPRESENTATIONS AND WARRANTIES; AUTHORITY
13.1 Seller’s Representations and Warranties. As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability company, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and is qualified to conduct business in each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller.
(b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, 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 (i) will be located in and connected electrically to a circuit, load, or substation within Southern California Edison’s service territory, and (ii) will be located within an eligible DAC within five (5) miles of the DAC census tracts in which subscribing customers of Buyer reside.
(f) Neither Seller nor its Affiliates have received notice from or been advised by any existing or potential supplier or service provider that COVID-19 has caused, or is reasonably likely to cause, a delay in the construction of the Facility or the delivery of materials necessary to complete the Facility, in each case that would cause the Construction Start Date to be later than the Guaranteed Construction Start Date or the Commercial Operation Date to be later than the Guaranteed Commercial Operation Date.
(g) The Facility shall have a Community Sponsor during the Delivery Term.
Agenda Page 544
48 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, validly existing 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 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, including but not limited to community choice aggregation, the Joint Powers Act, competitive bidding, public notice, open meetings, election, referendum, or prior appropriation requirements, 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, (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.
(f) Buyer is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California.
(g) Buyer cannot assert sovereign immunity as a defense to the enforcement of its obligations under this Agreement.
Agenda Page 545
49 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 each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition;
(b) It shall maintain (or obtain from time to time as required) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and (c) It shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and in material compliance with any Law.
13.4 Workforce Development. The Parties acknowledge that in connection with Buyer’s renewable energy procurement efforts, including entering into this Agreement, Buyer is committed to creating community benefits, which includes engaging a skilled and trained workforce and targeted hires. Accordingly, prior to the Guaranteed Construction Start Date, Seller shall ensure that work performed in connection with construction of the Facility will be conducted using a project labor agreement, community workforce agreement, work site agreement, collective bargaining agreement, or similar agreement providing for terms and conditions of employment with applicable labor organizations, and Seller shall remain compliant with such agreement in accordance with the terms thereof.
ARTICLE 14
ASSIGNMENT
14.1 General Prohibition on Assignments. Except as provided below in this Article 14, neither Party may voluntarily assign this Agreement or its rights or obligations under this Agreement, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned, or delayed. Any Change of Control of Seller (whether voluntary or by operation of law) will be deemed an assignment and will require the prior written consent of Buyer, which consent shall not be unreasonably withheld, conditioned, or delayed; provided, a Change of Control of Seller shall not require Buyer’s consent if the assignee or transferee is a Permitted Transferee. Any assignment made without the required written consent or in violation of the conditions to assignment set out below shall be null and void. Seller shall be responsible for Buyer’s reasonable costs associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement by Seller, including without limitation reasonable attorneys’ fees.
14.2 Collateral Assignment. Subject to the provisions of this Section 14.2, Seller has the right to assign this Agreement as collateral for any financing or refinancing of the Facility. In connection with any financing or refinancing of the Facility by Seller, Buyer shall in good faith (i) work with Seller and Lender to execute a consent to collateral assignment of this Agreement substantially in the form attached hereto as Exhibit O (“Consent to Collateral Assignment”), and (ii) at Seller’s reasonable request, execute and deliver any customary estoppel certificates to this Agreement, or other similar documents in favor of Lender, in form and substance reasonably Agenda Page 546
50 satisfactory to Buyer; provided, Buyer shall not be required to agree to any terms or conditions which are reasonably expected to have a material adverse effect on Buyer and all reasonable attorney’s fees incurred by Buyer in connection therewith shall be borne by Seller.
14.3 Permitted Assignment by Seller. Seller may, without the prior written consent of Buyer, transfer or assign this Agreement to: (a) an Affiliate of Seller or (b) any Person succeeding to all or substantially all of the assets of Seller (whether voluntary or by operation of law), if, and only if:
(i) the assignee is a Permitted Transferee;
(ii) Seller has given Buyer Notice at least fifteen (15) Business Days before the date of such proposed assignment; and
(iii) Seller has provided Buyer a written agreement signed by the Person to which Seller wishes to assign its interests that (x) provides that such Person will assume all of Seller’s obligations and liabilities under this Agreement upon such transfer or assignment and (y) certifies that such Person meets the definition of a Permitted Transferee.
Notwithstanding the foregoing, any assignment by Seller, its successors or assigns under this Section 14.3 shall be of no force and effect unless and until such Notice and agreement by the assignee have been received and accepted by Buyer.
14.4 Shared Facilities; Portfolio Financing. Buyer agrees and acknowledges that Seller may elect to finance all or any portion of the Facility or the Interconnection Facilities or the Shared Facilities (1) utilizing tax equity investment, and/or (2) through a Portfolio Financing, which may include cross-collateralization or similar arrangements. In connection with any financing or refinancing of the Facility, the Interconnection Facilities or the Shared Facilities by Seller or any Portfolio Financing, Buyer, Seller, Portfolio Financing Entity (if any), and Lender shall execute and deliver such further consents, approvals and acknowledgments as may be reasonable and necessary to facilitate such transactions; provided, Buyer shall not be required to agree to any terms or conditions which are reasonably expected to have a material adverse effect on Buyer and all reasonable attorney’s fees incurred by Buyer in connection therewith shall be borne by Seller.
14.5 Buyer Financing Assignment. Seller agrees that Buyer may assign a portion of its rights and obligations under this Agreement to a Person in connection with a municipal prepayment financing transaction (“Buyer Assignee”) at any time upon not less than fifteen (15) Business Days’ notice by delivering Notice of such assignment, which Notice must include a proposed assignment agreement substantially in the form attached hereto as Exhibit L (“Buyer Assignment Agreement”); provided, at the time of such assignment, such Buyer Assignee has a Credit Rating equal to the higher of (a) Buyer’s Credit Rating at the time of such assignment (if applicable), (b) Baa3 from Moody’s and BBB- from S&P, and (c) as reasonably requested by Seller, Buyer Assignee shall provide Seller with information and documentation with respect to Buyer Assignee and the proposed municipal prepayment financing transaction. As reasonably requested by Buyer Assignee, Seller shall (i) provide Buyer Assignee with information and documentation with respect to Seller, including but not limited to account opening information, Agenda Page 547
51 information related to forecasted generation, Credit Rating, and compliance with anti-money laundering rules, the Dodd-Frank Act, the Commodity Exchange Act, the Patriot Act and similar rules, regulations, requirements and corresponding policies; and (ii) promptly execute such Buyer Assignment Agreement and implement such assignment as contemplated thereby, subject only to the countersignature of Buyer Assignee and Buyer and the requirements of this Section 14.5.
ARTICLE 15
DISPUTE RESOLUTION
15.1 Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of Law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. [STC 17, (Source: D.07-11-025, Attachment A.) D.08-04-009]
15.2 Dispute Resolution. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a Notice from either Party identifying such dispute, the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either thirty (30) days of initiating such discussions, or within forty (40) days after Notice of the dispute, either Party may seek any and all remedies available to it at law or in equity, subject to the limitations set forth in this Agreement.
15.3 Attorneys’ Fees. In any proceeding brought to enforce this Agreement or because of the breach by any Party of any covenant or condition herein contained, the prevailing Party shall be entitled to reasonable attorneys’ fees (including reasonably allocated fees of in-house counsel) in addition to court costs and any and all other costs recoverable in said action.
ARTICLE 16
INDEMNIFICATION
16.1 Indemnification.
(a) Each Party (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless the other Party and its Affiliates, directors, officers, employees and agents (collectively, the “Indemnified Party”) from and against all claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees) (i) for personal injury or death to Persons and damage to the property of any third party to the extent arising out of, resulting from, or caused by the negligent or willful misconduct of the Indemnifying Party, its Affiliates, its directors, officers, employees, or agents, or (ii) for third-party claims resulting from the Indemnifying Party’s breach (including inaccuracy of any representation of warranty made hereunder), performance or non-performance of its obligations under this Agreement. (b) Seller shall indemnify, defend and hold harmless Buyer and its Affiliates, directors, officers, employees from and against all claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees) in connection with any claims of infringement upon or violation of any trade secret, trademark, trade name, copyright, patent, or other intellectual Agenda Page 548
52 property rights of any third party by equipment, software, applications or programs (or any portion of same) used in connection with the Facility (an “IP Indemnity Claim”). (c) Nothing in this Section 16.1 shall enlarge or relieve Seller or Buyer of any liability to the other for any breach of this Agreement. Neither Party shall be indemnified for its damages resulting from its sole negligence, intentional acts or willful misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligation to pay claims consistent with the provisions of a valid insurance policy.
16.2 Claims. Promptly after receipt by a Party of any claim or Notice of the commencement of any action, administrative, or legal proceeding, or investigation as to which the indemnity provided for in this Article 16 may apply, the Indemnified Party shall notify the Indemnifying Party in writing of such fact. The Indemnifying Party shall assume the defense thereof with counsel designated by the Indemnifying Party and satisfactory to the Indemnified Party; provided, if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to, or inconsistent with, those available to the Indemnifying Party, the Indemnified Party shall have the right to select and be represented by separate counsel, at the Indemnifying Party’s expense, unless a liability insurer is willing to pay such costs. If the Indemnifying Party fails to assume the defense of a claim meriting indemnification, the Indemnified Party may at the expense of the Indemnifying Party contest, settle, or pay such claim; provided, settlement or full payment of any such claim may be made only following consent of the Indemnifying Party or, absent such consent, written opinion of the Indemnified Party’s counsel that such claim is meritorious or warrants settlement. Except as otherwise provided in this Article 16, in the event that a Party is obligated to indemnify and hold the other Party and its successors and assigns harmless under this Article 16, the amount owing to the Indemnified Party will be the amount of the Indemnified Party’s damages net of any insurance proceeds received by the Indemnified Party following a reasonable effort by the Indemnified Party to obtain such insurance proceeds.
ARTICLE 17
INSURANCE
17.1 Insurance.
(a) General Liability. At all times during the Contract Term, Seller shall maintain, or cause to be maintained, at its sole expense, (i) commercial general liability insurance, including products and completed operations and personal injury insurance, in a minimum amount of One Million Dollars ($1,000,000) per occurrence, and an annual aggregate of not less than One Million Dollars ($1,000,000), endorsed to provide contractual liability in said amount, specifically covering Seller’s obligations under this Agreement and including Buyer as an additional insured; and (ii) an umbrella insurance policy in a minimum limit of liability of One Million Dollars ($1,000,000). Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest provisions.
Agenda Page 549
53 (b) Employer’s Liability Insurance. At all times during the Contract Term during which Seller has employees, Seller shall maintain, or cause to be maintained, at its sole expense employers’ liability insurance of not less than One Million Dollars ($1,000,000.00) for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the One Million Dollar ($1,000,000) policy limit will apply to each employee. (c) Workers Compensation Insurance. At all times during the Contract Term during which Seller has employees, Seller shall maintain, or cause to be maintained, at its sole expense workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of Law.
(d) Business Auto Insurance. At all times during the Contract Term, Seller shall maintain, or cause to be maintained, at its sole expense business auto insurance for bodily injury and property damage with limits of One Million Dollars ($1,000,000) per occurrence. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement. (e) Construction All-Risk Insurance. During the construction of the Facility prior to the Commercial Operation Date, Seller shall maintain, or cause to be maintained, at its sole expense construction all-risk form property insurance covering the Facility during such construction periods, and naming Seller (and Lender if any) as the loss payee. (f) Subcontractor Insurance. At all times during the Contract Term during which Seller has subcontractors, Seller shall require its subcontractors to carry: (i) comprehensive general liability insurance with a combined single limit of coverage not less than One Million Dollars ($1,000,000); (ii) workers’ compensation insurance and employers’ liability coverage in accordance with applicable requirements of Law; and (iii) business auto insurance for bodily injury and property damage with limits of one million dollars ($1,000,000) per occurrence. All subcontractors shall name Seller as an additional insured to insurance carried pursuant to clauses (f)(i) and (f)(iii). All subcontractors shall provide a primary endorsement and a waiver of subrogation to Seller for the required coverage pursuant to this Section 17.1(f). (g) Evidence of Insurance. Seller shall deliver to Buyer certificates of insurance evidencing such coverage within ten (10) days after the obligation to maintain each type of insurance specified in Section 17.1(a) through (f) arises and upon annual renewal thereafter. Such certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of any material modification, cancellation or termination of coverage. Such insurance shall be primary coverage without right of contribution from any insurance of Buyer. Any other insurance maintained by Seller is for the exclusive benefit of Seller and shall not in any manner inure to the benefit of Buyer. The general liability, auto liability and worker’s compensation policies shall be endorsed with a waiver of subrogation in favor of Buyer for all work performed by Seller, its employees, agents and sub-contractors.
(h) Failure to Comply with Insurance Requirements. If Seller fails to comply with any of the provisions of this Article 17, such failure shall be a failure to perform a material covenant or obligation set forth in this Agreement and, as such, shall constitute an Event of Default pursuant to Section 11.1(a)(iii) after Notice thereof from Buyer and failure to cure according to Agenda Page 550
54 the timeframes set forth therein. With respect to the required general liability, umbrella liability and commercial automobile liability insurance, Seller shall provide a current, full and complete defense to Buyer, its subsidiaries and Affiliates, and their respective officers, directors, shareholders, agents, employees, assigns, and successors in interest, in response to a third-party claim in the same manner that an insurer would have, had the insurance been maintained in accordance with the terms and conditions set forth above. In addition, alleged violations of the provisions of this Article 17 means that Seller has the initial burden of proof regarding any legal justification for refusing or withholding coverage except that if any required insurance is no longer commercially available to Seller, then the failure to comply related thereto will not be an Event of Default hereunder and the Parties will meet and confer to discuss a suitable and mutually agreeable replacement or other alternative for such insurance.
ARTICLE 18
CONFIDENTIAL INFORMATION
18.1 Definition of Confidential Information. The following constitutes “Confidential Information,” whether oral or written which is delivered by Seller to Buyer or by Buyer to Seller including: (a) the terms and conditions of, and proposals and negotiations related to this Agreement, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement.
18.2 Duty to Maintain Confidentiality. The Party receiving Confidential Information (the “Receiving Party”) from the other Party (the “Disclosing Party”) shall not disclose Confidential Information to a third party (other than the Party’s employees, lenders, counsel, accountants, directors or advisors, or any such representatives of a Party’s Affiliates, who have a need to know such information and have agreed to keep such terms confidential) except in order to comply with any applicable Law, regulation, or any exchange, control area or independent system operator rule or in connection with any court or regulatory proceeding applicable to such Party or any of its Affiliates; provided, each Party shall, to the extent practicable, use reasonable efforts to prevent or limit the disclosure. The Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation. The Parties agree and acknowledge that nothing in this Section 18.2 prohibits a Party from disclosing any one or more of the commercial terms of a transaction (other than the name of the other Party unless otherwise agreed to in writing by the Parties) to any industry price source for the purpose of aggregating and reporting such information in the form of a published energy price index.
The Parties acknowledge and agree that the Agreement and any transactions entered into in connection herewith are subject to the requirements of the California Public Records Act (Government Code Section 6250 et seq.). In order to designate information as confidential, the Disclosing Party must clearly stamp and identify the specific portion of the material designated Agenda Page 551
55 with the word “Confidential.” The Parties agree not to over-designate material as Confidential Information. Over-designation includes stamping whole agreements, entire pages or series of pages as “Confidential” that clearly contain information that is not Confidential Information.
Upon request or demand of any third person or entity not a Party hereto to Buyer pursuant to the California Public Records Act for production, inspection and/or copying of Confidential Information (“Requested Confidential Information”), Buyer shall as soon as practical notify Seller in writing via email that such request has been made. Seller shall be solely responsible for taking at its sole expense whatever legal steps are necessary to prevent release of the Requested Confidential Information to the third party by Buyer. If Seller takes no such action after receiving the foregoing notice from Buyer, Buyer shall, at its discretion, be permitted to comply with the third party’s request or demand and is not required to defend against it. If Seller does take or attempt to take such action, Buyer shall provide timely and reasonable cooperation to Seller, if requested by Seller, and Seller agrees to indemnify and hold harmless Buyer, its officers, employees and agents (“Buyer’s Indemnified Parties”), from any claims, liability, award of attorneys’ fees, or damages, and to defend any action, claim or lawsuit brought against any of Buyer’s Indemnified Parties for Buyer’s refusal to disclose any Requested Confidential Information.
18.3 Irreparable Injury; Remedies. Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party, and expressly acknowledges that monetary damages would be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth herein. Accordingly, Receiving Party acknowledges that any such breach or threatened breach will cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of proving actual damages.
18.4 Further Permitted Disclosure. Notwithstanding anything to the contrary in this Article 18, Confidential Information may be disclosed by the Receiving Party to any of its agents, consultants, contractors, trustees, or actual or potential financing parties (including, in the case of Seller, its Lender(s)), so long as such Person to whom Confidential Information is disclosed agrees in writing to be bound by confidentiality provisions that are at least as restrictive as this Article 18 to the same extent as if it were a Party.
18.5 Press Releases. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such public statement.
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 Agenda Page 552
56 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 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, 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) and/or, to the extent set forth herein, any Lender and/or Indemnified Party.
19.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
19.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Changes proposed by a non-Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under applicable Law.
19.7 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
Agenda Page 553
57 19.8 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party.
19.9 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
19.10 No Recourse to Members of Buyer. Buyer is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or the employees, directors, officers, consultants or advisors of Buyer or its constituent members, in connection with this Agreement.
19.11 Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a “forward contract” within the meaning of the U.S. Bankruptcy Code, and Buyer and Seller are “forward contract merchants” within the meaning of the U.S. Bankruptcy Code. Each Party further agrees that, for all purposes of this Agreement, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any Bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. §366 or another provision of 11 U.S.C. § 101-1532.
19.12 Change in Electric Market Design. If a change in the CAISO Tariff renders this Agreement or any provisions hereof incapable of being performed or administered, then any Party may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to make this Agreement capable of being performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith. If Buyer and Seller are unable, within sixty (60) days after delivery of such request, to agree upon changes to this Agreement or to resolve issues relating to changes to this Agreement, then any Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Article 15. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, and (ii) all of the unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution.
19.13 Further Assurances. Each of the Parties hereto agrees 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.
Agenda Page 554
58 [Signatures on following page.]
Agenda Page 555
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
PIVOT ENERGY PPA 27 LLC, a Colorado
limited liability company
By:
Name:
Title:
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA, a California
joint powers authority
By:
Name:
Title:
Agenda Page 556
Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Site Name: Beverly – Extra Space Storage (ESS)
Site includes all or some of the following APNs: 8122-011-027 City: Pico Rivera
County: Los Angeles
Zip Code: 90660
Latitude and Longitude: 34.006757° -118.071777°
Facility Description: Rooftop 500kWdc / 400kWac Solar Photovoltaic Solar System Delivery Point: Point of Delivery at new SCE 12kV switch located on riser pole near existing utility pole #4425833E
PNode: To be assigned during CAISO NRI process
Transmission Provider: Southern California Edison
Additional Information: 9612 Beverly Boulevard, Pico Rivera, CA 90660 Agenda Page 557
Exhibit B - 1
EXHIBIT B
FACILITY CONSTRUCTION AND COMMERCIAL OPERATION
1. Construction of the Facility.
a. “Construction Start” will occur upon Seller’s acquisition of all applicable regulatory authorizations, approvals and permits for the construction of the Facility, and once Seller has engaged all contractors and ordered all essential equipment and supplies as, in each case, can reasonably be considered necessary so that physical construction of the Facility may begin and proceed to completion without foreseeable interruption of material duration, and has executed an engineering, procurement, and construction contract and issued thereunder a final notice to proceed that authorizes the contractor to mobilize to Site and begin physical construction (including, at a minimum, excavation for foundations or the installation or erection of improvements) at the Site. The date of Construction Start will be evidenced by and subject to Seller’s delivery to Buyer of a certificate substantially in the form attached as Exhibit J hereto, and the date certified therein shall be the “Construction Start Date.” Seller shall cause Construction Start to occur no later than the Guaranteed Construction Start Date. b. Seller may extend the Guaranteed Construction Start Date by paying Daily Delay Damages to Buyer for each day Seller desires to extend the Guaranteed Construction Start Date, not to exceed a total of one hundred twenty (120) days of extensions by such payment of Daily Delay Damages. On or before the date that is ten (10) days prior to the then-current Guaranteed Construction Start Date Seller shall provide Notice and payment to Buyer of the Daily Delay Damages for the number of days of extension to the Guaranteed Construction Start Date. If Seller achieves Construction Start prior to the Guaranteed Construction Start Date, as extended by the payment of Daily Delay Damages, Buyer shall refund to Seller the Daily Delay Damages for each day Seller achieves Construction Start prior to the Guaranteed Construction Start Date times the Daily Delay Damages, not to exceed the total amount of Daily Delay Damages paid by Seller pursuant to this Section 1(b). Additionally, if Seller achieves Commercial Operation on or before the Guaranteed Commercial Operation Date (not including any extensions to such date resulting from Seller’s payment of Commercial Operation Delay Damages, but as may be extended pursuant to a Development Cure Period), then Buyer shall refund to Seller all Daily Delay Damages paid by Seller and not previously refunded by Buyer.
2. Commercial Operation of the Facility. “Commercial Operation” means the condition existing when Seller has fulfilled all of the conditions precedent in Section 2.2 of the Agreement and provided Notice to Buyer substantially in the form of Exhibit H (the “COD Certificate”).
a. Seller shall cause Commercial Operation for the Facility to occur by the Guaranteed Commercial Operation Date. Seller shall notify Buyer that it intends to achieve Agenda Page 558
Exhibit B - 2
Commercial Operation at least sixty (60) days before the anticipated Commercial Operation Date.
b. Seller may extend the Guaranteed Commercial Operation Date by paying Commercial Operation Delay Damages to Buyer for each day Seller desires to extend the Guaranteed Commercial Operation Date, not to exceed a total of ninety (90) days of extensions by such payment of Commercial Operation Delay Damages. On or before the date that is ten (10) days prior to the then-current Guaranteed Commercial Operation Date Seller shall provide Notice and payment to Buyer of the Commercial Operation Delay Damages for the number of days of extension to the Guaranteed Commercial Operation Date. If Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date as extended by the payment of Commercial Operation Delay Damages, Buyer shall refund to Seller the Commercial Operation Delay Damages for each day Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date times the Commercial Operation Delay Damages, not to exceed the total amount of Commercial Operation Delay Damages paid by Seller pursuant to this Section 2(b).
3. Termination for Failure to Achieve Commercial Operation. If the Facility has not achieved Commercial Operation on or before the Guaranteed Commercial Operation Date (as may be extended hereunder), Buyer may elect to terminate this Agreement in accordance with Sections 11.1(b)(ii) and 11.2.
4. Extension of the Guaranteed Dates. The Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date shall, subject to Notice and documentation requirements set forth below, be automatically extended on a day-for-day basis (the “Development Cure Period”) for the duration of any and all delays arising out of the following circumstances to the extent the following circumstances are not the result of Seller’s failure to take all commercially reasonable actions to meet its requirements and deadlines:
a. Seller has not acquired the Material Permits by the Guaranteed Construction Start Date, despite the exercise of diligent and commercially reasonable efforts by Seller; or
b. a Force Majeure Event occurs; or
c. the Interconnection Facilities or Reliability Network Upgrades are not complete and ready for the Facility to connect and sell Product at the Delivery Point by the Guaranteed Commercial Operation Date, despite the exercise of diligent and commercially reasonable efforts by Seller; or
d. Buyer has not made all necessary arrangements to receive the Facility Energy at the Delivery Point by the Guaranteed Commercial Operation Date.
Notwithstanding anything in this Agreement to the contrary, the cumulative extensions granted under the Development Cure Period (other than the extensions granted pursuant to Agenda Page 559
Exhibit B - 3
clause 4(d) above) shall not exceed one hundred eighty (180) days, for any reason, including a Force Majeure Event, and the cumulative extensions granted to the Guaranteed Commercial Operation Date by the payment of Commercial Operation Delay Damages and any Development Cure Period(s) (other than the extensions granted pursuant to clause 4(d) above) shall not exceed two hundred seventy (270) days. Upon request from Buyer, Seller shall provide documentation demonstrating to Buyer’s reasonable satisfaction that the delays described above did not result from Seller’s actions or failure to take commercially reasonable actions.
5. Failure to Reach Guaranteed Capacity. If, at Commercial Operation, the Installed Capacity is less than one hundred percent (100%) of the Guaranteed Capacity, Seller shall have ninety (90) days after the Commercial Operation Date to install additional capacity and/or Network Upgrades such that the Installed Capacity is equal to (but not greater than) the Guaranteed Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit I hereto specifying the new Installed Capacity. If Seller fails to construct the Guaranteed Capacity by such date, Seller shall pay “Capacity Damages” to Buyer, in an amount equal to Two Hundred Fifty Dollars ($250) for each kW that the Guaranteed Capacity exceeds the Installed Capacity. Capacity Damages shall not be offset or reduced by the payment of Development Security, Performance Security, Delay Damages, or any other form of liquidated damages under this Agreement.
6. Buyer’s Right to Draw on Development Security. If Seller elects to extend the Guaranteed Construction Start Date pursuant to Section 1(b) of this Exhibit B and/or if Seller elects to extend the Guaranteed Commercial Operation Date pursuant to Section 2(b) of this Exhibit B, but Seller fails to timely pay any Daily Delay Damages or Commercial Operation Delay Damages, then Buyer may draw upon the Development Security to satisfy Seller’s payment obligation thereof and Seller shall be required to replenish the Development Security in an amount equal to Buyer’s draw.
Agenda Page 560
Exhibit C - 1
EXHIBIT C
[RESERVED]
Agenda Page 561
Exhibit D - 1
EXHIBIT D
SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Buyer as Scheduling Coordinator for the Facility. Upon Initial Synchronization of the Facility to the CAISO Grid, Buyer shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility for both the delivery and the receipt of Test Energy and the Product at the Delivery Point. At least thirty (30) days prior to the Initial Synchronization of the Facility to the CAISO Grid, (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 Initial Synchronization of the Facility to the CAISO Grid, 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 Initial Synchronization of the Facility to the CAISO Grid. On and after Initial Synchronization of the Facility to the CAISO Grid, 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 bids 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, real-time or other market basis that may develop after the Effective Date, 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 shall 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 by (in order of preference) telephonically or electronic mail to the personnel designated to receive such information.
(c) CAISO Costs and Revenues. Except as otherwise set forth below, Buyer (as Scheduling Coordinator for the Facility) shall be responsible for CAISO costs (including penalties, Imbalance Energy costs or revenues, and other charges) and shall be entitled to all CAISO revenues (including credits, Imbalance Energy revenues or costs, 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 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 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 Agenda Page 562
Exhibit D -2
penalties are imposed upon the Facility or to Buyer as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties shall be Seller’s responsibility. (d) CAISO Settlements. 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 shall 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 such 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. Seller shall provide the data to the CAISO (and to Buyer) that is required for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement. Neither Party shall change such data without the other Party’s prior written consent. (h) NERC Reliability Standards. Buyer (as Scheduling Coordinator) shall cooperate reasonably with Seller to the extent necessary to enable Seller to comply, and for Seller to demonstrate Seller’s compliance with, NERC reliability standards. This cooperation shall include the provision of information in Buyer’s possession that Buyer (as Scheduling Coordinator) has provided to the CAISO related to the Facility or actions taken by Buyer (as Scheduling Coordinator) related to Seller’s compliance with NERC reliability standards. (i) SQMD Reporting. If Seller elects to submit a SQMD Plan for the Facility, then for any time period covered by the CAISO-approved SQMD Plan(s), Seller shall provide or Agenda Page 563
Exhibit D -3
cause to be provided to Buyer (or Buyer’s designee including any Buyer Scheduling Coordinator) with respect to the Facility Meters, Settlement Quality Meter Data no more than six (6) Business Days after the relevant flow date. In connection with any SQMD Plan(s), as a Scheduling Coordinator Metered Entity (as defined in the CAISO Tariff), Buyer (as Scheduling Coordinator) shall reasonably cooperate with Seller in the SQMD Plan submission and approval process and perform the obligations required by the SQMD Plan or the CAISO applicable to Scheduling Coordinators with respect to submitting Settlement Quality Meter Data to the CAISO including without limitation submitting required affirmations and attestations (if any). Buyer (as Scheduling Coordinator) shall be responsible for submitting Settlement Quality Meter Data to the CAISO using the MRI-S System (or any alternate system designated by the CAISO) in accordance with the SQMD Plan(s) and the CAISO Tariff; provided, Seller shall indemnify Buyer against any costs or penalties imposed on Buyer as a result of Seller’s failure to provide or have provided Settlement Quality Meter Data consistent with the SQMD Plan(s) to Buyer (or Buyer’s designee including any Buyer Scheduling Coordinator), with respect to the Facility Meters and/or only the Storage Facility Meters, as applicable, within the timeframe required by this Section (i).
Agenda Page 564
Exhibit E - 1
EXHIBIT E
PROGRESS REPORTING FORM
Each Progress Report must include the following items:
1. Executive Summary.
2. Facility description.
3. Site plan of the Facility.
4. Description of any material planned changes to the Facility or the site.
5. Gantt chart schedule showing progress on achieving each of the Milestones.
6. Summary of activities during the previous calendar quarter or month, as applicable, including any OSHA labor hour reports.
7. Forecast of activities scheduled for the current calendar quarter.
8. Written description about the progress relative to Seller’s Milestones, including whether Seller has met or is on target to meet the Milestones.
9. List of issues that are reasonably likely to affect Seller’s Milestones.
10. A status report of start-up activities including a forecast of activities ongoing and after start-up, a report on Facility performance including performance projections for the next twelve (12) months.
11. Progress and schedule of all material agreements, contracts, permits (including Material Permits), approvals, technical studies, financing agreements and major equipment purchase orders showing the start dates, completion dates, and completion percentages.
12. Pictures, in sufficient quantity and of appropriate detail, in order to document construction and startup progress of the Facility, the interconnection into the Transmission System and all other interconnection utility services.
13. Workforce Development or Supplier Diversity Reporting (if applicable). Format to be provided by Buyer.
14. Any other documentation reasonably requested by Buyer.
Agenda Page 565
Exhibit F-2
EXHIBIT F-1
ANNUAL EXPECTED AVAILABLE FACILITY ENERGY
[MW 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 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.
Agenda Page 566
Exhibit F-2
EXHIBIT F-2
MONTHLY EXPECTED FACILITY ENERGY
[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 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.
Agenda Page 567
Exhibit G - 1
EXHIBIT G
GUARANTEED ENERGY PRODUCTION DAMAGES CALCULATION
In accordance with Section 4.7, if Seller fails to achieve the Guaranteed Energy Production during any Performance Measurement Period, a liquidated damages payment shall be due from Seller to Buyer, calculated as follows:
[(A – B) * (C – D)] – (E + F)
where:
A = the Guaranteed Energy Production amount for the Performance Measurement Period, in MWh
B = the Adjusted Energy Production amount for the Performance Measurement Period, in MWh
C = Replacement price for the Performance Measurement Period, in $/MWh, which is the sum of (a) the simple average of the Integrated Forward Market hourly price for all the hours in the Performance Measurement Period, as published by the CAISO, for the Existing Zone Generation Trading Hub (as defined in the CAISO Tariff) for the Delivery Point, plus (b) the market value of Replacement Green Attributes.
D = the Contract Price, in $/MWh
E = The amount of Energy Replacement Damages paid by Seller with respect to the immediately preceding Performance Measurement Period F = The product of (a) the amount of Replacement Product in MWhs delivered by Seller in the immediately preceding Contract Year and (b) the price which is (C – D)
“Adjusted Energy Production” shall mean the sum of the following: Facility Energy + Deemed Delivered Energy + Lost Output + Replacement Energy. “Replacement Energy” means electrical energy produced by a facility other than the Facility, that is provided by Seller to Buyer as Replacement Product, in an amount equal to the amount of Replacement Green Attributes provided by Seller as Replacement Product for the same Performance Measurement Period.
“Replacement Green Attributes” means Renewable Energy Credits of the same Portfolio Content Category (i.e., PCC1) as the Green Attributes portion of the Product and of the same year of production as the Renewable Energy Credits that would have been generated by the Facility.
Agenda Page 568
Exhibit G - 2
“Replacement Product” means (a) Replacement Energy, and (b) Replacement Green Attributes in an amount not to exceed ten percent (10%) of the Expected Energy for the previous Contract Year.
No payment shall be due if the calculation of (a) (A - B), (b) (C - D) or (c) [(A – B) * (C – D)] – (E + F), yields a negative number. In no event will Buyer owe any payment to Seller pursuant to this Exhibit G.
Within sixty (60) days after each Contract Year, Buyer shall send Seller Notice of the amount of damages owing, if any, which shall be payable to Buyer before the later of (a) thirty (30) days of such Notice and (b) ninety (90) days after each Performance Measurement Period; provided, the amount of damages owing shall be adjusted to account for Replacement Product, if any, delivered after each applicable Performance Measurement Period.
Agenda Page 569
Exhibit H - 1
EXHIBIT H
FORM OF COMMERCIAL OPERATION DATE CERTIFICATE
This certification (“Certification”) of Commercial Operation is delivered by _______ [licensed professional engineer] (“Engineer”) to Clean Power Alliance of Southern California, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated _______ (“Agreement”) by and between [Seller] and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
As of _______[DATE]_____, Engineer hereby certifies and represents to Buyer the following:
1. The Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.
2. Seller has installed equipment for the Facility with an Installed Capacity of no less than ninety-five percent (95%) of the Guaranteed Capacity.
3. Authorization to parallel the Facility was obtained by the Transmission Provider, [Name of Transmission Provider as appropriate] on___[DATE]____
4. The Transmission Provider has provided documentation supporting full unrestricted release for Commercial Operation by [Name of Transmission Provider as appropriate] on _______[DATE]_____.
5. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff on _______[DATE]_____.
6. Seller has segregated and separately metered Station Use to the extent reasonably possible in accordance with Prudent Operating Practice, and any such meter(s) have the same or greater level of accuracy as is required for CAISO certified meters used for settlement purposes.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Its:
Date:
Agenda Page 570
Exhibit I - 1
EXHIBIT I
FORM OF INSTALLED CAPACITY CERTIFICATE
This certification (“Certification”) of Installed Capacity is delivered by [licensed professional engineer] (“Engineer”) to Clean Power Alliance of Southern California, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated __________ (“Agreement”) by and between [SELLER ENTITY] and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
I hereby certify the following:
The installed nameplate capacity of the Facility is __ MW AC (“Installed Capacity”).
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Its:
Date:
Agenda Page 571
Exhibit J - 1
EXHIBIT J
FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of the Construction Start Date (“Certification”) is delivered by [SELLER ENTITY] (“Seller”) to Clean Power Alliance of Southern California, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated __________ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Seller hereby certifies and represents to Buyer the following:
(1) Construction Start (as defined in Exhibit B of the Agreement) has occurred, and a copy of the notice to proceed that Seller issued to its contractor as part of Construction Start is attached hereto.
(2) the Construction Start Date occurred on _____________ (the “Construction Start Date”); and
(3) the precise Site on which the Facility is located is, which must be within the boundaries of the previously identified Site:
_____________________________________________________________________ (such description shall amend the description of the Site in Exhibit A of the Agreement).
IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as of the ___ day of ________.
[SELLER ENTITY]
By:
Its:
Date:
Agenda Page 572
Exhibit K - 1
EXHIBIT K
FORM OF LETTER OF CREDIT
[Issuing Bank Letterhead and Address]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [XXXXXXX]
Date:
Bank Ref.:
Amount: US$[XXXXXXXX]
Beneficiary:
Clean Power Alliance of Southern California,
a California joint powers authority
801 S Grand, Suite 400
Los Angeles, CA 90017
Ladies and Gentlemen:
By the order of __________ (“Applicant”), we, [insert bank name and address] (“Issuer”) hereby issue our Irrevocable Standby Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) in favor of Clean Power Alliance of Southern California, a California joint powers authority (“Beneficiary”), 801 S Grand, Suite 400, Los Angeles, CA 90017, for an amount not to exceed the aggregate sum of U.S. $[XXXXXX] (United States Dollars [XXXXX] and 00/100) (the “Available Amount”), pursuant to that certain Renewable Power Purchase Agreement dated as of ______ and as amended (the “Agreement”) between Applicant and Beneficiary. This Letter of Credit shall become effective immediately and shall be of no further force or effect at 5:00 p.m., California time, on [Date] or, if such day is not a Business Day (as hereinafter defined), on the next Business Day (as may be extended pursuant to the terms of this Letter of Credit, the “Expiration Date”).
For the purposes hereof, “Business Day” shall mean any day on which commercial banks are not authorized or required to close in Los Angeles, California.
Funds under this Letter of Credit are available to Beneficiary by valid presentation on or before 5:00 p.m. California time, on or before the Expiration Date of a copy of this Letter of Credit No. [XXXXXXX] and all amendments accompanied by Beneficiary’s dated statement purportedly signed by Beneficiary’s duly authorized representative, in the form attached hereto as Exhibit A, containing one of the two alternative paragraphs set forth in paragraph 2 therein.
Any full or partial drawing hereunder may be requested by transmitting copies of the requisite documents as described above to the Issuer by facsimile at [facsimile number for draws] or such Agenda Page 573
Exhibit K - 2
other number as specified from time-to-time by the Issuer.
The facsimile transmittal shall be deemed delivered when received. Drawings made by facsimile transmittal are deemed to be the operative instrument without the need of originally signed documents.
Issuer hereby agrees that all drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Issuer before the Expiration Date. All correspondence and any drawings (other than those made by facsimile) hereunder are to be directed to [Issuer address/contact]. Issuer undertakes to make payment to Beneficiary under this Standby Letter of Credit within three (3) business days of receipt by Issuer of a properly presented Drawing Certificate. The Beneficiary shall receive payment from Issuer by wire transfer to the bank account of the Beneficiary designated in the Drawing Certificate.
Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance; provided, the Available Amount shall be reduced by the amount of each such drawing.
It is a condition of this Letter of Credit that it shall be deemed automatically extended without an amendment for a one year period (or, if such period ends on a day that is not a Business Day, until the next Business Day thereafter) beginning on the present Expiration Date hereof and upon each anniversary for such date (or, if such period ends on a day that is not a Business Day, until the next Business Day thereafter), unless at least one hundred twenty (120) days prior to any such Expiration Date Issuer has sent Beneficiary written notice by overnight courier service at the address provided below that Issuer elects not to extend this Letter of Credit, in which case it will expire on its then current Expiration Date. No presentation made under this Letter of Credit after such Expiration Date will be honored.
Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements, this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.
Except so far as otherwise stated, this Letter of Credit is subject to the International Standby Practices ISP98 (also known as ICC Publication No. 590), or revision currently in effect (the “ISP”). As to matters not covered by the ISP, the laws of the State of California, without regard to the principles of conflicts of laws thereunder, shall govern all matters with respect to this Letter of Credit.
Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available.
All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: Clean Power Alliance of Southern California, a California joint powers authority, Chief Financial Officer, 801 S Grand, Suite 400, Los Angeles, CA 90017. Only notices to Beneficiary meeting the requirements of this paragraph shall be Agenda Page 574
Exhibit K - 3
considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect.
[Bank Name]
___________________________
[Insert officer name]
[Insert officer title]
Agenda Page 575
Exhibit K - 4
EXHIBIT A
(DRAW REQUEST SHOULD BE ON BENEFICIARY’S LETTERHEAD)
Drawing Certificate
[Insert Bank Name and Address]
Ladies and Gentlemen:
The undersigned, a duly authorized representative of [ ], [ADDRESS], as beneficiary (the “Beneficiary”) of the Irrevocable Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) issued by [insert bank name] (the “Bank”) by order of __________ (the “Applicant”), hereby certifies to the Bank as follows:
1. Applicant and Beneficiary are party to that certain Renewable Power Purchase Agreement dated as of ___________, 20__ (the “Agreement”).
2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________ because a Seller Event of Default (as such term is defined in the Agreement) has occurred.
or
Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________, which equals the full available amount under the Letter of Credit, because Applicant is required to maintain the Letter of Credit in force and effect beyond the expiration date of the Letter of Credit but has failed to provide Beneficiary with a replacement Letter of Credit or other acceptable instrument within thirty (30) days prior to such expiration date.
3. The undersigned is a duly authorized representative of [ ] and is authorized to execute and deliver this Drawing Certificate on behalf of Beneficiary.
You are hereby directed to make payment of the requested amount to [ ] by wire transfer in immediately available funds to the following account:
[Specify account information]
[ ]
_______________________________
Name and Title of Authorized Representative
Date___________________________
Agenda Page 576
Exhibit L – 1
EXHIBIT L
FORM OF BUYER ASSIGNMENT AGREEMENT
This Buyer Assignment Agreement (this “Assignment Agreement” or “Agreement”) is entered into as of [______________] by and among [PPA Seller], a [______________] (“PPA Seller”), Clean Power Alliance of Southern California, a California joint powers authority (“PPA Buyer”), and [Financing Party] (“Financing Party”), and relates to that certain power purchase agreement (the “PPA”) between PPA Buyer and PPA Seller as described on Appendix 1.
In consideration of the premises above and the mutual covenants and agreements herein set forth, PPA Seller, PPA Buyer and Financing Party (the “Parties” hereto; each is a “Party”) agree as follows:
1. Limited Assignment and Delegation.
(a) PPA Buyer hereby assigns, transfers and conveys to Financing Party all right, title and interest in and to the rights of PPA Buyer under the PPA to receive delivery of the products described on Appendix 1 (the “Assigned Products”) during the Assignment Period (as defined in Appendix 1), as such rights may be limited or further described in the “Further Information” section on Appendix 1 (the “Assigned Product Rights”)[NOTE: Appendix 1 to provide for transfer of RECs.]. All Assigned Products shall be delivered pursuant to the terms and conditions of this Agreement during the Assignment Period as provided in Appendix 1. All other rights of PPA Buyer under the PPA are expressly reserved for PPA Buyer, including the right to receive any additional quantities of products beyond the limits set forth in Appendix 1. (b) PPA Buyer hereby delegates to Financing Party the obligation to pay for all Assigned Products that are actually delivered to Financing Party pursuant to the Assigned Product Rights during the Assignment Period (the “Delivered Product Payment Obligation” and together with the Assigned Product Rights, collectively the “Assigned Rights and Obligations”). All other obligations of PPA Buyer under the PPA are expressly retained by PPA Buyer. To the extent Financing Party fails to pay for any Assigned Products by the due date for payment set forth in the PPA, PPA Buyer agrees that it will remain responsible for such payment within five (5) Business Days (as defined in the PPA) of receiving notice of such non-payment from PPA Seller. (c) Financing Party hereby accepts and PPA Seller hereby consents and agrees to the assignment, transfer, conveyance and delegation described in clauses (a) and (b) above. (d) All scheduling of Assigned Products and other communications related to the PPA shall take place between PPA Buyer and PPA Seller pursuant to the terms of the PPA; provided, (i) title to Assigned Product will pass to Financing Party upon delivery by PPA Seller in accordance with the PPA; and (ii) PPA Buyer is hereby authorized by Financing Party to and shall act as Financing Party’s agent with regard to scheduling Assigned Product; (iii) PPA Buyer will provide copies to Financing Party of any Notice (as defined in the PPA) of a Force Majeure Event or Event of Default or default, breach or other occurrence that, if not cured within the applicable grace period, could result in an Event of Default contemporaneously upon delivery thereof to PPA Seller and promptly after receipt thereof from PPA Seller; (iv) PPA Buyer will provide copies to Financing Party of annual forecasts of Metered Energy and monthly forecasts of Available Capacity provided by PPA Seller pursuant to Sections 4.4(a) and (b) of the Agenda Page 577
Exhibit L – 2
PPA; (v) PPA Buyer will provide copies to Financing Party of all invoices and supporting data provided by PPA Seller pursuant to Section 8.1, provided that any payment adjustments or subsequent reconciliations occurring after the date that is ten (10) days prior to the payment due date for a monthly invoice, including pursuant to Section 8.4, will be resolved solely between PPA Buyer and PPA Seller and therefore PPA Buyer will not be obligated to deliver copies of any communications relating thereto to Financing Party; and (vi) PPA Buyer will provide copies to Financing Party of any other information reasonably requested by Financing Party relating to Assigned Products.
(e) PPA Seller acknowledges that (i) Financing Party intends to immediately transfer title to any Assigned Products received from PPA Seller through one or more intermediaries such that all Assigned Products will be re-delivered to PPA Buyer, and (ii) Financing Party has the right to purchase receivables due from PPA Buyer for any such Assigned Products. To the extent Financing Party purchases any such receivables due from PPA Buyer, Financing Party may transfer such receivables to PPA Seller and apply the face amount thereof as a reduction to any Delivered Product Payment Obligation. (f) Financing Party may not assign its rights nor delegate its duties under this Agreement, or any part of such rights or duties, without the written consent of PPA Seller.
2. Assignment Early Termination.
(a) The Assignment Period may be terminated early upon the occurrence of any of the following:
(1) delivery of a written notice of termination by either Financing Party or PPA Buyer to each of the other Parties hereto;
(2) delivery of a written notice of termination by PPA Seller to each of Financing Party and PPA Buyer following Financing Party’s failure to pay when due any amounts owed to PPA Seller in respect of any Delivered Product Payment Obligation and such failure continues for one (1) Business Day following receipt by Financing Party of written notice thereof;
(3) delivery of a written notice by PPA Seller if any of the events described in [NOTE: Insert reference to bankruptcy event of default in PPA.] occurs with respect to Financing Party; or
(4) delivery of a written notice by Financing Party if any of the events described in [NOTE: Insert reference to bankruptcy event of default in PPA.] occurs with respect to PPA Seller.
(b) The Assignment Period will end as of the date specified in the termination notice, which date shall not be earlier than the end of the last day of the calendar month in which such notice is delivered if termination is pursuant to clauses (a)(1) or (a)(2) above. All Assigned Rights and Obligations shall revert from Financing Party to PPA Buyer upon the early termination of the Assignment Period, provided that (i) Financing Party shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to Financing Party prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether Agenda Page 578
Exhibit L – 3
arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period
(c) The Assignment Period shall automatically terminate upon the expiration or early termination of the PPA. All Assigned Rights and Obligations shall revert from Financing Party to PPA Buyer upon the expiration of or early termination of the PPA, provided that (i) Financing Party shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to Financing Party prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period. (d) All Assigned Rights and Obligations shall revert from Financing Party to PPA Buyer upon the expiration of or early termination of the Assignment Period; provided, (i) Financing Party shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to Financing Party prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period.
3. Notices. Any notice, demand, or request required or authorized by this Assignment Agreement to be given by one Party to another Party shall be delivered in accordance with Section [__] of the PPA and to the addresses of each of PPA Seller and PPA Buyer specified in the PPA. PPA Seller and PPA Buyer agree to notify Financing Party of any updates to such notice information. Notices to Financing Party shall be provided to the following address, as such address may be updated by Financing Party from time to time by notice to the other Parties:
Financing Party
_____________
_____________
Email: _____________
4. Miscellaneous. Sections [__] [Buyer’s Representations and Warranties]; Section [__] [Limitation of Liability and Exclusions of Warranties, Article [__] [Confidential Information], Sections [_] [Severability], [_] [Counterparts], [_] [Amendments] and [_] [No Agency, Partnership, Joint Venture or Lease, [__] [Mobile-Sierra], [__] [Facsimile or Electronic Delivery], and [__] Binding Effect] of the PPA are incorporated by reference into this Agreement, mutatis mutandis, as if fully set forth herein.
5. Governing Law, Jurisdiction, Waiver of Jury Trial
(a) Governing Law. This Assignment Agreement and the rights and duties of the parties under this assignment agreement will be governed by and construed, enforced and performed in accordance with the laws of the state of New York, without reference to any conflicts of laws provisions that would direct the application of another jurisdiction’s laws; provided, the authority of PPA Buyer to enter into and perform its obligations under this assignment agreement shall be determined in accordance with the laws of the State of California.
(b) Jurisdiction. Each party submits to the exclusive jurisdiction of (a) the courts Agenda Page 579
Exhibit L – 4
of the state of New York located in the Borough of Manhattan, (b) the federal courts of the United States of America for the Southern District of New York or (c) the federal courts of the United States of America in any other state.
(c) Waiver of Right to Trial by Jury. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to this assignment agreement.
[Remainder of Page Intentionally Blank]
Agenda Page 580
Exhibit L – 5
IN WITNESS WHEREOF, the Parties have executed this Assignment Agreement effective as of the date first set forth above.
PPA SELLER PPA BUYER
By: …………………………………….. By:
………………………………….
Name: Name:
Title: Title:
FINANCING PARTY
By: ………………………………………
Name:
Title:
Execution and delivery of the foregoing Assignment Agreement is hereby approved. [ISSUER]
By: …………………………………….
Name:
Title:
Agenda Page 581
Exhibit L - 6
Appendix 1
Assigned Rights and Obligations
PPA: The Power Purchase Agreement dated [___________] by and between PPA Buyer and PPA Seller.
“Assignment Period” means the period beginning on [___________] and extending until [___________]; provided, in no event shall the Assignment Period extend past the earlier of (i) the termination of the Assignment Period pursuant to Section 4 of the Assignment Agreement and (ii) the end of the delivery period under the PPA1
Assigned Product: [Describe and define]
Further Information: [Include, if any]2
Projected P99 Generation: The “Projected P99 Generation” is attached hereto on a monthly basis.
1 The Assignment Period must end no less than 18 months following the Assignment Period Start Date and no later than the end of the delivery period under the PPA.
2 To include transfer and settlement mechanics for RECs, as applicable.
Agenda Page 582
Exhibit M – 1
EXHIBIT M
[RESERVED]
Agenda Page 583
Exhibit N – 1
EXHIBIT N
NOTICES
PIVOT ENERGY PPA 27 LLC, a Colorado
limited liability company (“Seller”)
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA, a California
joint powers authority (“Buyer”)
All Notices: Legal
Street: 1750 15th Street, Suite 400
City: Denver, CO
Attn: Jackie Murphy, Chief Legal Officer
Phone: (888) 734-3033
Email: [email protected]
All Notices:
Street: 801 S Grand, Suite 400
City: Los Angeles, CA 90017
Attn: Chief Executive Officer
Phone: (213) 269-5870
E-mail: [email protected]
Reference Numbers:
Duns: NA
Federal Tax ID Number: TBD by Execution
Reference Numbers:
Duns:
Federal Tax ID Number:
Invoices: Accounting
Attn: Amy Nupen, Controller
Phone: (888) 734-3033
E-mail: [email protected]
Invoices:
Attn: CPA Settlements
Phone: (213) 269-5870
E-mail: [email protected]
Scheduling:
Attn: Angela Burke, Operations
Phone: (888) 734-3033
Email:[email protected]
Scheduling: TBD
Attn: Day Ahead Scheduling
Phone: (817) 303-1104
Email: [email protected]
Confirmations:
Attn: Angela Burke, Operations
Phone: (888) 734-3033
Email: [email protected]
Confirmations:
Attn: Vice President, Power Supply
Phone: (323) 640-7662
E-mail: [email protected]
Payments: Accounting
Attn: Amy Nupen, Controller
Phone: (888) 734-3033
E-mail: [email protected]
Payments:
Attn: Vice President, Power Supply
Phone: (323) 640-7662
E-mail: [email protected]
Wire Transfer:
BNK: TBD
ABA: TBD
ACCT: TBD
Wire Transfer:
BNK: River City Bank
ABA: 121133416
ACCT: XXXXXX8042
Agenda Page 584
Exhibit O – 1
EXHIBIT O
FORM OF CONSENT TO COLLATERAL ASSIGNMENT
This Consent to Collateral Assignment (this “Consent”) is entered into among (i) Clean Power Alliance of Southern California, a California joint powers authority (“CPA”), (ii) [Name of Seller], a [Legal Status of Seller] (the “Project Company”), and (iii) [Name of Collateral Agent], a [Legal Status of Collateral Agent], as Collateral Agent for the secured parties under the Financing Documents referred to below (such secured parties together with their successors permitted under this Consent in such capacity, the “Secured Parties”, and, such agent, together with its successors in such capacity, the “Collateral Agent”). CPA, Project Company and Collateral Agent are hereinafter sometimes referred to individually as a “Party” and jointly as the “Parties”. Capitalized terms used but not otherwise defined in this Consent shall have the meanings ascribed to them in the PPA (as defined below).
RECITALS
The Parties enter into this Consent with reference to the following facts:
A. Project Company and CPA have entered into that certain Renewable Power Purchase Agreement, dated as of [Date] [List all amendments as contemplated by Section 3.4] (“PPA”), pursuant to which Project Company will develop, construct, commission, test and operate the Storage Units (the “Project”) and sell the Product to CPA, and CPA will purchase the Product from Project Company;
B. As collateral for Project Company’s obligations under the PPA, Project Company has agreed to provide to CPA certain collateral, which may include Performance Security and Development Security and other collateral described in the PPA (collectively, the “PPA Collateral”);
C. Project Company has entered into that certain [Insert description of financing arrangements with Lender], dated as of[Date], among Project Company, the Lenders party thereto and the Collateral Agent (the “Financing Agreement”), pursuant to which, among other things, the Lenders have extended commitments to make loans to Project Company; D. As collateral security for Project Company’s obligations under the Financing Agreement and related agreements (collectively, the “Financing Documents”), Project Company has, among other things, assigned all of its right, title and interest in, to and under the PPA and Project’s Company’s owners have pledged their ownership interest in Project Company (collectively, the “Assigned Interest”) to the Collateral Agent pursuant to the Financing Documents; and
E. It is a requirement under the Financing Agreement and the PPA that CPA and the other Parties hereto shall have executed and delivered this Consent.
AGREEMENT
Agenda Page 585
Exhibit O - 2
In consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties hereto hereby agree as follows:
SECTION 1. CONSENT TO ASSIGNMENT, ETC.
1.1 Consent and Agreement.
CPA hereby acknowledges:
(a) Notice of and consents to the assignment as collateral security to Collateral Agent, for the benefit of the Secured Parties, of the Assigned Interest; and (b) The right (but not the obligation) of Collateral Agent in the exercise of its rights and remedies under the Financing Documents, to make all demands, give all notices, take all actions and exercise all rights of Project Company permitted under the PPA (subject to CPA’s rights and defenses under the PPA and the terms of this Consent) and accepts any such exercise; provided, insofar as the Collateral Agent exercises any such rights under the PPA or makes any claims with respect to payments or other obligations under the PPA, the terms and conditions of the PPA applicable to such exercise of rights or claims shall apply to Collateral Agent to the same extent as to Project Company.
1.2 Project Company’s Acknowledgement.
Each of Project Company and Collateral Agent hereby acknowledges and agrees that CPA is authorized to act in accordance with Collateral Agent’s instructions, and that CPA shall bear no liability to Project Company or Collateral Agent in connection therewith, including any liability for failing to act in accordance with Project Company’s instructions.
1.3 Right to Cure.
If Project Company defaults in the performance of any of its obligations under the PPA, or upon the occurrence or non-occurrence of any event or condition under the PPA which would immediately or with the passage of any applicable grace period or the giving of notice, or both, enable CPA to terminate or suspend its performance under the PPA (a “PPA Default”), CPA will not terminate or suspend its performance under the PPA until it first gives written notice of such PPA Default to Collateral Agent and affords Collateral Agent the right to cure such PPA Default within the applicable cure period under the PPA, which cure period shall run concurrently with that afforded Project Company under the PPA. In addition, if Collateral Agent gives CPA written notice prior to the expiration of the applicable cure period under the PPA of Collateral Agent’s intention to cure such PPA Default (which notice shall include a reasonable description of the time during which it anticipates to cure such PPA Default) and is diligently proceeding to cure such PPA Default, notwithstanding the applicable cure period under the PPA, Collateral Agent shall have a period of sixty (60) days (or, if such PPA Default is for failure by the Project Company to pay an amount to CPA which is due and payable under the PPA other than to provide PPA Collateral, thirty (30) days, or, if such PPA Default is for failure by Project Company to provide PPA Collateral, ten (10) Business Days) from the Collateral Agent’s receipt of the notice of such PPA Default from CPA to cure such PPA Default; provided, (a) if possession of the Project is Agenda Page 586
Exhibit O - 3
necessary to cure any such non-monetary PPA Default and Collateral Agent has commenced foreclosure proceedings within sixty (60) days after notice of the PPA Default and is diligently pursuing such foreclosure proceedings, Collateral Agent will be allowed a reasonable time, not to exceed one hundred eighty (180) days after the notice of the PPA Default, to complete such proceedings and cure such PPA Default, and (b) if Collateral Agent is prohibited from curing any such PPA Default by any process, stay or injunction issued by any Governmental Authority or pursuant to any bankruptcy or insolvency proceeding or other similar proceeding involving Project Company, then the time periods specified herein for curing a PPA Default shall be extended for the period of such prohibition, so long as Collateral Agent has diligently pursued removal of such process, stay or injunction. Collateral Agent shall provide CPA with reports concerning the status of efforts to cure a PPA Default upon CPA’s reasonable request.
1.4 Substitute Owner.
Subject to Section 1.7, the Parties agree that if Collateral Agent notifies (such notice, a “Financing Document Default Notice”) CPA that an event of default has occurred and is continuing under the Financing Documents (a “Financing Document Event of Default”) then, upon a judicial foreclosure sale, non-judicial foreclosure sale, deed in lieu of foreclosure or other transfer following a Financing Document Event of Default, Collateral Agent (or its designee) shall be substituted for Project Company (the “Substitute Owner”) under the PPA, and, subject to Sections
1.7(b) and 1.7(c) below, CPA and Substitute Owner will recognize each other as counterparties under the PPA and will continue to perform their respective obligations (including those obligations accruing to CPA and the Project Company prior to the existence of the Substitute Owner) under the PPA in favor of each other in accordance with the terms thereof; provided, before CPA is required to recognize the Substitute Owner, the Substitute Owner must have demonstrated to CPA’s reasonable satisfaction that the Substitute Owner has financial qualifications and operating experience [TBD] (a “Permitted Transferee”). For purposes of the foregoing, CPA shall be entitled to assume that any such purported exercise of rights by Collateral Agent that results in substitution of a Substitute Owner under the PPA is in accordance with the Financing Documents without independent investigation thereof but shall have the right to require that the Collateral Agent and its designee (if applicable) provide reasonable evidence demonstrating the same.
1.5 Replacement Agreements.
Subject to Section 1.7, if the PPA is terminated, rejected or otherwise invalidated as a result of any bankruptcy, insolvency, reorganization or similar proceeding affecting Project Company, its owner(s) or guarantor(s), and if Collateral Agent or its designee directly or indirectly takes possession of, or title to, the Project (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure) (“Replacement Owner”), CPA shall, and Collateral Agent shall cause Replacement Owner to, enter into a new agreement with one another for the balance of the obligations under the PPA remaining to be performed having terms substantially the same as the terms of the PPA with respect to the remaining Term (“Replacement PPA”); provided, before CPA is required to enter into a Replacement PPA, the Replacement Owner must have demonstrated to CPA’s reasonable satisfaction that the Replacement Owner satisfies the requirements of a Permitted Transferee. For purposes of the foregoing, CPA is entitled to assume that any such purported exercise of rights by Collateral Agent that results in a Replacement Owner is in accordance with the Financing Documents without independent investigation thereof but shall Agenda Page 587
Exhibit O - 4
have the right to require that the Collateral Agent and its designee (if applicable) provide reasonable evidence demonstrating the same. Notwithstanding the execution and delivery of a Replacement PPA, to the extent CPA is, or was otherwise prior to its termination as described in this Section 1.5, entitled under the PPA, CPA may suspend performance of its obligations under such Replacement PPA, unless and until all PPA Defaults of Project Company under the PPA or Replacement PPA have been cured.
1.6 Transfer.
Subject to Section 1.7, a Substitute Owner or a Replacement Owner may assign all of its interest in the Project and the PPA and a Replacement PPA to a natural person, corporation, trust, business trust, joint venture, joint stock company, association, company, limited liability company, partnership, Governmental Authority or other entity (a “Person”) to which the Project is transferred; provided, the proposed transferee shall have demonstrated to CPA’s reasonable satisfaction that such proposed transferee satisfies the requirements of a Permitted Transferee.
1.7 Assumption of Obligations.
(a) Transferee.
Any transferee under Section 1.6 shall expressly assume in a writing reasonably satisfactory to CPA all of the obligations of Project Company, Substitute Owner or Replacement Owner under the PPA or Replacement PPA, as applicable, including posting and collateral assignment of the PPA Collateral. Upon such assignment and the cure of any outstanding PPA Default, and payment of all other amounts due and payable to CPA in respect of the PPA or such Replacement PPA, the transferor shall be released from any further liability under the PPA or Replacement PPA, as applicable.
(b) Substitute Owner.
Subject to Section 1.7(c), any Substitute Owner pursuant to Section 1.4 shall be required to perform Project Company’s obligations under the PPA, including posting and collateral assignment of the PPA Collateral; provided, the obligations of such Substitute Owner shall be no more than those of Project Company under the PPA.
(c) No Liability.
CPA acknowledges and agrees that neither Collateral Agent nor any Secured Party shall have any liability or obligation under the PPA as a result of this Consent (except to the extent Collateral Agent or a Secured Party is a Substitute Owner or Replacement Owner) nor shall Collateral Agent or any other Secured Party be obligated or required to (i) perform any of Project Company’s obligations under the PPA, except as provided in Sections 1.7(a) and 1.7(b) and to the extent Collateral Agent or a Secured Party is a Substitute Owner or Replacement Owner, or (ii) take any action to collect or enforce any claim for payment assigned under the Financing Documents. If Collateral Agent becomes a Substitute Owner pursuant to Section 1.4 or enters into a Replacement PPA, Collateral Agent shall not have any personal liability to CPA under the PPA or Replacement PPA and the sole recourse of CPA in seeking enforcement of such obligations against Collateral Agent shall be to the aggregate interest of the Secured Parties in the Project; Agenda Page 588
Exhibit O - 5
provided, such limited recourse shall not limit CPA’s right to seek equitable or injunctive relief against Collateral Agent, or CPA’s rights with respect to any offset rights expressly allowed under the PPA, a Replacement PPA or the PPA Collateral.
1.8 Delivery of Notices.
CPA shall deliver to Collateral Agent, concurrently with the delivery thereof to Project Company, a copy of each notice, request or demand given by CPA to Project Company pursuant to the PPA relating to (a) a PPA Default by Project Company under the PPA, (b) any claim regarding Force Majeure by CPA under the PPA, (c) any notice of dispute under the PPA, (d) any notice of intent to terminate or any termination notice, and (e) any matter that would require the consent of Collateral Agent pursuant to Section 1.11 or any other provision of this Consent. Collateral Agent acknowledges that delivery of such notice, request and demand shall satisfy CPA’s obligation to give Collateral Agent a notice of PPA Default under Section 1.3. Collateral Agent shall deliver to CPA, concurrently with delivery thereof to Project Company, a copy of each notice, request or demand given by Collateral Agent to Project Company pursuant to the Financing Documents relating to a default by Project Company under the Financing Documents.
1.9 Confirmations.
CPA will, as and when reasonably requested by Collateral Agent from time to time, confirm in writing matters relating to the PPA (including the performance of same by Project Company); provided, such confirmation may be limited to matters of which CPA is aware as of the time the confirmation is given and such confirmations shall be without prejudice to any rights of CPA under the PPA as between CPA and Project Company.
1.10 Exclusivity of Dealings.
Except as provided in Sections 1.3, 1.4, 1.8, 1.9 and 2.1, unless and until CPA receives a Financing Document Default Notice, CPA shall deal exclusively with Project Company in connection with the performance of CPA’s obligations under the PPA. From and after such time as CPA receives a Financing Document Default Notice and until a Substitute Owner is substituted for Project Company pursuant to Section 1.4, a Replacement PPA is entered into or the PPA is transferred to a Person to whom the Project is transferred pursuant to Section 1.6, CPA shall, until Collateral Agent confirms to CPA in writing that all obligations under the Financing Documents are no longer outstanding, deal exclusively with Collateral Agent in connection with the performance of CPA’s obligations under the PPA, and CPA may irrevocably rely on instructions provided by Collateral Agent in accordance therewith to the exclusion of those provided by any other Person.
1.11 No Amendments.
To the extent permitted by Laws, CPA agrees that it will not, without the prior written consent of Collateral Agent (not to be unreasonably withheld, delayed or conditioned) (a) enter into any material supplement, restatement, novation, extension, amendment or modification of the PPA (b) terminate or suspend its performance under the PPA (except in accordance with Section 1.3) or (c) consent to or accept any termination or cancellation of the PPA by Project Company.
SECTION 2. PAYMENTS UNDER THE PPA
Agenda Page 589
Exhibit O - 6
2.1 Payments.
Unless and until CPA receives written notice to the contrary from Collateral Agent, CPA will make all payments to be made by it to Project Company under or by reason of the PPA directly to Project Company. CPA, Project Company, and Collateral Agent acknowledge that CPA will be deemed to be in compliance with the payment terms of the PPA to the extent that CPA makes payments in accordance with Collateral Agent’s instructions.
2.2 No Offset, Etc.
All payments required to be made by CPA under the PPA shall be made without any offset, recoupment, abatement, withholding, reduction or defense whatsoever, other than that expressly allowed by the terms of the PPA.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF CPA
CPA makes the following representations and warranties as of the date hereof in favor of Collateral Agent:
3.1 Organization.
CPA is a joint powers authority and community choice aggregator duly organized and validly existing 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 . CPA has all requisite power and authority, corporate and otherwise, to enter into and to perform its obligations hereunder and under the PPA, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby.
3.2 Authorization.
The execution, delivery and performance by CPA of this Consent and the PPA have been duly authorized by all necessary corporate or other action on the part of CPA and do not require any approval or consent of any holder (or any trustee for any holder) of any indebtedness or other obligation of CPA which, if not obtained, will prevent CPA from performing its obligations hereunder or under the PPA except approvals or consents which have previously been obtained and which are in full force and effect.
3.3 Execution and Delivery; Binding Agreements.
Each of this Consent and the PPA is in full force and effect, have been duly executed and delivered on behalf of CPA by the appropriate officers of CPA, and constitute the legal, valid and binding obligation of CPA, enforceable against CPA in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).
3.4 No Default or Amendment.
Agenda Page 590
Exhibit O - 7
Except as set forth in Schedule A attached hereto: (a) Neither CPA nor, to CPA’s actual knowledge, Project Company, is in default of any of its obligations under the PPA; (b) CPA and, to CPA’s actual knowledge, Project Company, has complied with all conditions precedent to the effectiveness of its obligations under the PPA; (c) to CPA’s actual knowledge, no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either CPA or Project Company to terminate or suspend its obligations under the PPA; and (d) the PPA has not been amended, modified or supplemented in any manner except as set forth herein and in the recitals hereto.
3.5 No Previous Assignments.
CPA has no notice of, and has not consented to, any previous assignment by Project Company of all or any part of its rights under the PPA, except as previously disclosed in writing and consented to by CPA.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PROJECT COMPANY Project Company makes the following representations and warranties as of the date hereof in favor of the Collateral Agent and CPA:
4.1 Organization.
Project Company is a [Legal Status of Seller] duly organized and validly existing under the laws of the state of its organization, and is duly qualified, authorized to do business and in good standing in every jurisdiction in which it owns or leases real property or in which the nature of its business requires it to be so qualified, except where the failure to so qualify would not have a material adverse effect on its financial condition, its ability to own its properties or its ability to transact its business. Project Company has all requisite power and authority, corporate and otherwise, to enter into and to perform its obligations hereunder and under the PPA, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby.
4.2 Authorization.
The execution, delivery and performance of this Consent by Project Company, and Project Company’s assignment of its right, title and interest in, to and under the PPA to the Collateral Agent pursuant to the Financing Documents, have been duly authorized by all necessary corporate or other action on the part of Project Company.
4.3 Execution and Delivery; Binding Agreement.
This Consent is in full force and effect, has been duly executed and delivered on behalf of Project Company by the appropriate officers of Project Company, and constitutes the legal, valid and binding obligation of Project Company, enforceable against Project Company in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).
Agenda Page 591
Exhibit O - 8
4.4 No Default or Amendment.
Except as set forth in Schedule B attached hereto: (a) neither Project Company nor, to Project Company’s actual knowledge, CPA, is in default of any of its obligations thereunder; (b) Project Company and, to Project Company’s actual knowledge, CPA, has complied with all conditions precedent to the effectiveness of its obligations under the PPA; (c) to Project Company’s actual knowledge, no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either CPA or Project Company to terminate or suspend its obligations under the PPA; and (d) the PPA has not been amended, modified or supplemented in any manner except as set forth herein and in the recitals hereto.
4.5 No Previous Assignments.
Project Company has not previously assigned all or any part of its rights under the PPA.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF COLLATERAL AGENT Collateral Agent makes the following representations and warranties as of the date hereof in favor of CPA and Project Company:
5.1 Authorization.
The execution, delivery and performance of this Consent by Collateral Agent have been duly authorized by all necessary corporate or other action on the part of Collateral Agent and Secured Parties.
5.2 Execution and Delivery; Binding Agreement.
This Consent is in full force and effect, has been duly executed and delivered on behalf of Collateral Agent by the appropriate officers of Collateral Agent, and constitutes the legal, valid and binding obligation of Collateral Agent as Collateral Agent for the Secured Parties, enforceable against Collateral Agent (and the Secured Parties to the extent applicable) in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).
SECTION 6. MISCALLANEOUS
6.1 Notices.
All notices and other communications hereunder shall be in writing, shall be deemed given upon receipt thereof by the Party or Parties to whom such notice is addressed, shall refer on their face to the PPA (although failure to so refer shall not render any such notice or communication ineffective), shall be sent by first class mail, by personal delivery or by a nationally recognized courier service, and shall be directed (a) if to CPA or Project Company, in accordance with [Notice Section of the PPA] of the PPA, (b) if to Collateral Agent, to [Collateral Agent Name], [Collateral Agent Address], Attn: [Collateral Agent Contact Information], Telephone: [___], Fax: [___], and Agenda Page 592
Exhibit O - 9
(c) to such other address or addressee as any such Party may designate by notice given pursuant hereto.
6.2 Governing Law; Submission to Jurisdiction.
(a) THIS CONSENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND
THIS CONSENT AND ALL MATTERS ARISING OUT OF THIS CONSENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF CALIFORNIA WITHOUT REGARD TO ANY CONFLICTS OF LAWS
PROVISIONS THEREOF THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.
(b) All disputes, claims or controversies arising out of, relating to, concerning or pertaining to the terms of this Consent shall be governed by the dispute resolution provisions of the PPA. Subject to the foregoing, any legal action or proceeding with respect to this Consent and any action for enforcement of any judgment in respect thereof may be brought in the courts of the State of California or of the United States of America for the Central District of California, and, by execution and delivery of this Consent, each Party hereby accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts and appellate courts from any appeal thereof. Each Party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to its notice address provided pursuant to Section 6.1 hereof. Each Party hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Consent brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing herein shall affect the right of any Party to serve process in any other manner permitted by law.
6.3 Headings Descriptive.
The headings of the several sections and subsections of this Consent are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Consent.
6.4 Severability.
In case any provision in or obligation under this Consent shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
6.5 Amendment, Waiver.
Neither this Consent nor any of the terms hereof may (a) be terminated, amended, supplemented or modified, except by an instrument in writing signed by CPA, Project Company and Collateral Agent or (b) waived, except by an instrument in writing signed by the waiving Party.
6.6 Termination.
Agenda Page 593
Exhibit O - 10
Each Party’s obligations hereunder are absolute and unconditional, and no Party has any right, and shall have no right, to terminate this Consent or to be released, relieved or discharged from any obligation or liability hereunder until CPA has been notified by Collateral Agent that all of the obligations under the Financing Documents shall have been satisfied in full (other than contingent indemnification obligations) or, with respect to the PPA or any Replacement PPA, its obligations under such PPA or Replacement PPA have been fully performed.
6.7 Successors and Assigns.
This Consent shall be binding upon each Party and its successors and assigns permitted under and in accordance with this Consent, and shall inure to the benefit of the other Parties and their respective successors and assignee permitted under and in accordance with this Consent. Each reference to a Person herein shall include such Person’s successors and assigns permitted under and in accordance with this Consent.
6.8 Further Assurances.
CPA hereby agrees to execute and deliver all such instruments and take all such action as may be necessary to effectuate fully the purposes of this Consent.
6.9 Waiver of Trial by Jury.
TO THE EXTENT PERMITTED BY APPLICABLE LAWS, THE PARTIES HEREBY
IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS CONSENT OR ANY MATTER ARISING HEREUNDER. EACH PARTY FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
6.10 Entire Agreement.
This Consent and any agreement, document or instrument attached hereto or referred to herein integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings in respect to the subject matter hereof. In the event of any conflict between the terms, conditions and provisions of this Consent and any such agreement, document or instrument, the terms, conditions and provisions of this Consent shall prevail.
6.11 Effective Date.
This Consent shall be deemed effective as of the date upon which the last Party executes this Consent.
6.12 Counterparts; Electronic Signatures.
This Consent may be executed in one or more counterparts, each of which will be deemed to be an original of this Consent and all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this Consent and of signature pages by Agenda Page 594
Exhibit O - 11
facsimile transmission, Portable Document Format (i.e., PDF), or by other electronic means shall constitute effective execution and delivery of this Consent as to the Parties and may be used in lieu of the original Consent for all purposes.
[Remainder of Page Left Intentionally Blank.]
Agenda Page 595
Exhibit O - 12
IN WITNESS WHEREOF, the Parties hereto have caused this Consent to be duly executed and delivered by their duly authorized officers on the dates indicated below their respective signatures.
Pivot Energy PPA 27 LLC, a Colorado limited
liability company.
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA,
a California joint powers authority.
By:
___________________________________
Tom Hunt
Authorized Representative
Date: ___________________________
By:
___________________________________
[Name]
[Title]
Date: ___________________________
TBD
[Legal Status of Collateral Agent].
By:
________________________________
[Name]
[Title]
Date: ___________________________
Agenda Page 596
Exhibit O - 13
SCHEDULE A
[Describe any disclosures relevant to representations and warranties made in Section 3.4] Agenda Page 597
Exhibit P – 1
EXHIBIT P
MATERIAL PERMITS
No. Permits
1 Building
2 Electrical
Agenda Page 598
Exhibit Q – 1
EXHIBIT Q
[RESERVED]
Agenda Page 599
Exhibit R – 1
EXHIBIT R
METERING DIAGRAM
To be determined during full engineering process and updated prior to COD Agenda Page 600
Exhibit S – 1
EXHIBIT S
SUPPLY CHAIN CODE OF CONDUCT
Buyer is committed to ensuring that the fundamental human rights of workers are protected, including addressing the potential risks of forced labor, child labor, servitude, human trafficking and slavery across our portfolio.
Our requirements and expectations for Seller’s supply chain are detailed below in our Supply Chain Code of Conduct (“Supply Chain Code”). Seller must comply with all applicable Laws and this Supply Chain Code, even when this Supply Chain Code exceeds the requirements of applicable Law.
These standards are derived from the United Nations Guiding Principles on Business and Human Rights, the Core Conventions of the International Labour Organization (“ILO”), including the ILO Declaration on Fundamental Principles and Rights at Work, the Solar Energy Industries Association Solar Industry Commitment to Environmental & Social Responsibility, and the Responsible Business Alliance Code of Conduct.
1. Freely Chosen Employment
Forced, bonded (including debt bondage) or indentured labor, involuntary or exploitative prison labor, slavery or trafficking of persons is not permitted. This includes transporting, harboring, recruiting, transferring, or receiving persons by means of threat, force, coercion, abduction or fraud for labor or services. There shall be no unreasonable restrictions on workers’ freedom of movement in the facility in addition to unreasonable restrictions on entering or exiting company provided facilities including, if applicable, workers’ dormitories or living quarters. All work must be voluntary, and workers shall be free to leave work at any time or terminate their employment without penalty if reasonable notice is given as per worker’s contract. Employers, agents, and sub-agents’ may not hold or otherwise destroy, conceal, or confiscate identity or immigration documents, such as government-issued identification, passports, or work permits. Employers can only hold documentation if such holdings are required by law. In this case, at no time should workers be denied access to their documents. Workers shall not be required to pay employers’ agents or sub-agents’ recruitment fees or other related fees for their employment. If any such fees are found to have been paid by workers, such fees shall be repaid to the worker.
2. Young Workers
Child labor is not to be used in any stage of manufacturing. The term “child” refers to any person under the age of 15, or under the age for completing compulsory education, or under the minimum age for employment in the country, whichever is greatest. Suppliers shall implement an appropriate mechanism to verify the age of workers. The use of legitimate workplace learning programs, which comply with all laws and regulations, is supported.
Workers under the age of 18 shall not perform work that is likely to jeopardize their health or safety, including night shifts and overtime. Suppliers shall ensure proper management of student workers through proper maintenance of student records, rigorous due diligence of educational partners, and protection of students’ rights in accordance with applicable Agenda Page 601
Exhibit S - 2
laws and regulations. Suppliers shall provide appropriate support and training to all student workers. In the absence of local law, the wage rate for student workers, interns, and apprentices shall be at least the same wage rate as other entry-level workers performing equal or similar tasks. If child labor is identified, assistance/remediation is provided.
3. Working Hours
Studies of business practices clearly link worker strain to reduced productivity, increased turnover, and increased injury and illness. Working hours are not to exceed the maximum set by local law. Further, a workweek should not be more than 60 hours per week, including overtime, except in emergency or unusual situations. All overtime must be voluntary.
Workers shall be allowed at least one day off every seven days.
4. Wages and Benefits
Compensation paid to workers shall comply with all applicable wage laws, including those relating to minimum wages, overtime hours and legally mandated benefits. In compliance with local laws, workers shall be compensated for overtime at pay rates greater than regular hourly rates. Deductions from wages as a disciplinary measure shall not be permitted. For each pay period, workers shall be provided with a timely and understandable wage statement that includes sufficient information to verify accurate compensation for work performed. All use of temporary, dispatch and outsourced labor will be within the limits of the local law.
5. Humane Treatment
There is to be no harsh or inhumane treatment including violence, gender-based violence, sexual harassment, sexual abuse, corporal punishment, mental or physical coercion, bullying, public shaming, or verbal abuse of workers; nor is there to be the threat of any such treatment. Disciplinary policies and procedures in support of these requirements shall be clearly defined and communicated to workers.
6. Non-Discrimination/Non-Harassment
Suppliers should be committed to a workplace free of harassment and unlawful discrimination. Companies shall not engage in discrimination or harassment based on race, color, age, gender, sexual orientation, gender identity and expression, ethnicity or national origin, disability, pregnancy, religion, political affiliation, union membership, covered veteran status, protected genetic information or marital status in hiring and employment practices such as wages, promotions, rewards, and access to training. Workers shall be provided with reasonable accommodation for religious practices. In addition, workers or potential workers should not be subjected to medical tests that could be used in a discriminatory way or otherwise in violation of applicable law. This was drafted in consideration of ILO Discrimination (Employment and Occupation) Convention (No.111).
7. Freedom of Association
In conformance with local law, Suppliers shall respect the right of all workers to form and join trade unions of their own choosing, to bargain collectively, and to engage in peaceful assembly as well as respect the right of workers to refrain from such activities. Workers and/or their representatives shall be able to openly communicate and share ideas and concerns with management regarding working conditions and management practices Agenda Page 602
Exhibit S - 3
without fear of discrimination, reprisal, intimidation, or harassment.
8. Restricted Jurisdictions
Supplier shall not manufacture or produce products in the Xinjiang Uyghur Autonomous Region of China, or knowingly procure goods and services mined, produced or manufactured in the same.
Agenda Page 603
EXECUTION VERSION
RENEWABLE POWER PURCHASE AGREEMENT
COVER SHEET
Seller: Pivot Energy PPA 28 LLC, a Colorado limited liability company Buyer: Clean Power Alliance of Southern California, a California joint powers authority Description of Facility: A 0.270 MW photovoltaic generating facility located on the roof of Extra Space Storage at 4344 San Gabriel River Pkwy, Pico Rivera, CA 90660 Milestones:
Milestone Expected Date for Completion
Evidence of Site Control September 3, 2021
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec,
[ ] EIR
N/A
Seller’s receipt of Phase I and Phase II Interconnection study results for Seller’s Interconnection Facilities
June 14, 2022
Executed Interconnection Agreement December 31, 2022
Financial Close
Expected Construction Start Date
Initial Synchronization December 7, 2023
Network Upgrades completed (evidenced by delivery of
permission to parallel letter from the Transmission
Provider)
December 7, 2023
Expected Date of CAISO Commercial Operation December 11, 2023 Expected Commercial Operation Date December 21, 2023
Delivery Term: Fifteen (15) Contract Years
Delivery Term Expected Energy:
ITEM 11 - ATTACHMENT 3
Agenda Page 604
Contract Year Expected Energy (MWh)
1 532.2
2 3
4 5
6 7
8 9
10 11
12 13
14 15
Guaranteed Capacity: 0.270 MW of total Facility capacity Guaranteed Construction Start Date: September 30, 2023
Guaranteed Commercial Operation Date December 31, 2023
Contract Price: The Contract Price shall be:
Contract Year Contract Price ($/MWh)
1 – 15 /MWh (flat) with no
escalation
Product:
Agenda Page 605
☒ Energy
☒ Green Attributes (if Renewable Energy Credit, please check the applicable box below):
☒ Portfolio Content Category 1
☐ Portfolio Content Category 2
☐ Portfolio Content Category 3
☐ Capacity Attributes
☐ Full Capacity Deliverability Status
Scheduling Coordinator: Buyer
Development Security: $60/kW of Guaranteed Capacity
Performance Security: $60/kW of Guaranteed Capacity
Agenda Page 606
TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS ................................................................................................. 1
1.1 Contract Definitions. .............................................................................................. 1
1.2 Rules of Interpretation. ........................................................................................ 18 ARTICLE 2 TERM; CONDITIONS PRECEDENT .......................................................... 20
2.1 Contract Term. ..................................................................................................... 20
2.2 Conditions Precedent ........................................................................................... 20
2.3 Progress Reports .................................................................................................. 21
2.4 Remedial Action Plan .......................................................................................... 22 ARTICLE 3 PURCHASE AND SALE .............................................................................. 22
3.1 Sale of Product. .................................................................................................... 22
3.2 Sale of Green Attributes. ...................................................................................... 23
3.3 Compensation. ..................................................................................................... 23
3.4 Imbalance Energy. ............................................................................................... 23
3.5 Ownership of Renewable Energy Incentives. ...................................................... 24
3.6 Future Environmental Attributes. ........................................................................ 24
3.7 Test Energy. ......................................................................................................... 24
3.10 CEC Certification and Verification. .................................................................... 25
3.11 Eligibility. ............................................................................................................ 25
3.12 California Renewables Portfolio Standard. .......................................................... 25
3.13 Compliance Expenditure Cap. ............................................................................. 25
3.14 Project Configuration. .......................................................................................... 26 ARTICLE 4 OBLIGATIONS AND DELIVERIES ........................................................... 26
4.1 Delivery................................................................................................................ 26
4.2 Title and Risk of Loss. ......................................................................................... 27
4.3 Scheduling Coordinator Responsibilities. ............................................................ 27
4.4 Forecasting. .......................................................................................................... 27
4.4 Dispatch Down/Curtailment ................................................................................ 29
4.5 Reduction in Delivery Obligation. ....................................................................... 30
4.6 Expected Energy and Guaranteed Energy Production. ........................................ 31
4.7 WREGIS .............................................................................................................. 31 ARTICLE 5 TAXES ........................................................................................................... 33
5.1 Allocation of Taxes and Charges. ........................................................................ 33
5.2 Cooperation. ......................................................................................................... 33 ARTICLE 6 MAINTENANCE OF THE FACILITY ........................................................ 33
6.1 Maintenance of the Facility. ................................................................................ 33
6.2 Maintenance of Health and Safety. ...................................................................... 33
6.3 Shared Facilities ................................................................................................... 34 Agenda Page 607
TABLE OF CONTENTS
(continued)
Page
ii
ARTICLE 7 METERING ................................................................................................... 34
7.1 Metering ............................................................................................................... 34
7.2 Meter Verification ................................................................................................ 34 ARTICLE 8 INVOICING AND PAYMENT; CREDIT .................................................... 35
8.1 Invoicing .............................................................................................................. 35
8.2 Payment................................................................................................................ 35
8.3 Books and Records .............................................................................................. 35
8.4 Payment Adjustments; Billing Errors .................................................................. 36
8.5 Billing Disputes ................................................................................................... 36
8.6 Netting of Payments ............................................................................................. 36
8.7 Seller’s Development Security ............................................................................ 36
8.8 Seller’s Performance Security .............................................................................. 37
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral ................ 37 ARTICLE 9 NOTICES ....................................................................................................... 38
9.1 Addresses for the Delivery of Notices ................................................................. 38
9.2 Acceptable Means of Delivering Notice .............................................................. 38 ARTICLE 10 FORCE MAJEURE ....................................................................................... 38
10.1 Definition ............................................................................................................. 38
10.2 No Liability If a Force Majeure Event Occurs .................................................... 39
10.3 Notice ................................................................................................................... 39
10.4 Termination Following Force Majeure Event ...................................................... 40 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ............................................... 40
11.1 Events of Default ................................................................................................. 40
11.2 Remedies; Declaration of Early Termination Date .............................................. 42
11.3 Termination Payment ........................................................................................... 43
11.4 Notice of Payment of Termination Payment or Damage Payment ...................... 44
11.5 Disputes With Respect to Termination Payment or Damage Payment ............... 44
11.6 Limitation on Seller’s Ability to Make or Agree to Third-Party Sales from the Facility after Early Termination Date ............................................................ 44
11.7 Rights And Remedies Are Cumulative ................................................................ 45
11.8 Mitigation ............................................................................................................. 45 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF
WARRANTIES ............................................................................................. 45
12.1 No Consequential Damages. ................................................................................ 45
12.2 Waiver and Exclusion of Other Damages. ........................................................... 45 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY .................... 47 Agenda Page 608
TABLE OF CONTENTS
(continued)
Page
iii
13.1 Seller’s Representations and Warranties ............................................................. 47
13.2 Buyer’s Representations and Warranties ............................................................. 48
13.3 General Covenants ............................................................................................... 49
13.4 Workforce Development ...................................................................................... 49 ARTICLE 14 ASSIGNMENT .............................................................................................. 49
14.1 General Prohibition on Assignments ................................................................... 49
14.2 Collateral Assignment .......................................................................................... 49
14.3 Permitted Assignment by Seller ........................................................................... 50
14.4 Shared Facilities; Portfolio Financing ................................................................. 50 ARTICLE 15 DISPUTE RESOLUTION ............................................................................. 51
15.1 Governing Law .................................................................................................... 51
15.2 Dispute Resolution ............................................................................................... 51
15.3 Attorneys’ Fees .................................................................................................... 51 ARTICLE 16 INDEMNIFICATION.................................................................................... 51
16.1 Indemnification .................................................................................................... 51
16.2 Claims. ................................................................................................................. 52 ARTICLE 17 INSURANCE ................................................................................................. 52
17.1 Insurance .............................................................................................................. 52 ARTICLE 18 CONFIDENTIAL INFORMATION ............................................................. 54
18.1 Definition of Confidential Information ................................................................ 54
18.2 Duty to Maintain Confidentiality ......................................................................... 54
18.3 Irreparable Injury; Remedies ............................................................................... 55
18.4 Permitted Disclosure ............................................................................................ 55
18.5 Public Statements ................................................................................................. 55 ARTICLE 19 MISCELLANEOUS ...................................................................................... 55
19.1 Entire Agreement; Integration; Exhibits .............................................................. 55
19.2 Amendments ........................................................................................................ 56
19.3 No Waiver ............................................................................................................ 56
19.4 No Agency, Partnership, Joint Venture or Lease ................................................. 56
19.5 Severability .......................................................................................................... 56
19.6 Mobile-Sierra ....................................................................................................... 56
19.7 Counterparts ......................................................................................................... 56
19.8 Facsimile or Electronic Delivery ......................................................................... 57
19.9 Binding Effect ...................................................................................................... 57
19.10 No Recourse to Members of Buyer ..................................................................... 57
19.11 Forward Contract ................................................................................................. 57 Agenda Page 609
TABLE OF CONTENTS
(continued)
Page
iv
19.12 Change in Electric Market Design ....................................................................... 57
19.13 Further Assurances............................................................................................... 57 Exhibits:
Exhibit A Facility Description
Exhibit B Facility Construction and Commercial Operation Exhibit C [Reserved]
Exhibit D Scheduling Coordinator Responsibilities
Exhibit E Progress Reporting Form
Exhibit F-1 Form of Annual Expected Available Facility Capacity Report Exhibit F-2 Form of Monthly Expected Facility Energy Report Exhibit G Guaranteed Energy Production Damages Calculation Exhibit H Form of Commercial Operation Date Certificate Exhibit I Form of Installed Capacity Certificate
Exhibit J Form of Construction Start Date Certificate
Exhibit K Form of Letter of Credit
Exhibit L Form of Buyer Assignment Agreement
Exhibit M [Reserved]
Exhibit N Notices
Exhibit O Form of Consent to Collateral Assignment
Exhibit P Material Permits
Exhibit Q [Reserved]
Exhibit R Metering Diagram
Exhibit S Supply Chain Code of Conduct
Agenda Page 610
RENEWABLE POWER PURCHASE AGREEMENT
This Renewable Power Purchase Agreement (“Agreement”) is entered into as of _________ (the “Effective Date”), between Buyer and Seller. Buyer and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties”. All capitalized terms used in this Agreement are used with the meanings ascribed to them in Article 1 to this Agreement.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate the Facility; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:
ARTICLE 1
DEFINITIONS
1.1 Contract Definitions. The following terms, when used herein with initial capitalization, shall have the meanings set forth below:
“AC” means alternating current.
“Accepted Compliance Costs” has the meaning set forth in Section 3.14(c). “Adjusted Energy Production” has the meaning set forth in Exhibit G. “Affiliate” means, with respect to any Person, each Person that directly or indirectly controls, is controlled by, or is under common control with such designated Person. For purposes of this definition and the definition of “Permitted Transferee”, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person. “Agreement” has the meaning set forth in the Preamble and includes the Cover Sheet and any Exhibits, schedules and any written supplements hereto. “Approval Application” has the meaning set forth in Section 2.1(c). “Approved Forecast Vendor” means (x) any of the CAISO or (y) any other vendor reasonably acceptable to both Buyer and Seller for the purposes of providing or verifying the forecasts under Section 4.4(d).
Agenda Page 611
2 “Availability Incentive Payments” has the meaning set forth in the CAISO Tariff. “Available Capacity” means the capacity of the Facility, expressed in whole MWs, that is available to generate Energy.
“Bankrupt” or “Bankruptcy” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due.
“Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday in California. A Business Day begins at 8:00 a.m. and ends at 5:00 p.m. local time for the Party sending a Notice, or payment, or performing a specified action. “Buyer” has the meaning set forth on the Cover Sheet.
“Buyer Assignee” has the meaning set forth in Section 14.5. “Buyer Assignment Agreement” has the meaning set forth in Section 14.5. “Buyer Bid Curtailment” means the occurrence of both of the following:
(a) the CAISO provides notice to a Party or the SC for the Facility, requiring the Party to deliver less Facility Energy than the full amount forecasted in accordance with Section 4.4 for a period of time; and
(b) for the same time period as referenced in (a), Buyer or the SC for the Facility did not submit a Self-Schedule for the MWhs subject to the reduction.
If the Facility is subject to a Planned Outage, Forced Facility Outage, Force Majeure Event and/or a Curtailment Period during the same time period as referenced in (a), then the calculation of Deemed Delivered Energy during such period shall not include any Facility Energy that was not generated due to such Planned Outage, Forced Facility Outage, Force Majeure Event or Curtailment Period.
“Buyer Curtailment Order” means the instruction from Buyer to Seller to reduce Facility Energy from the Facility by the amount, and for the period of time, set forth in such instruction for reasons unrelated to a Planned Outage, Forced Facility Outage, Force Majeure Event and/or Curtailment Order.
“Buyer Curtailment Period” means the period of time, as measured using relevant Settlement Intervals, during which Seller reduces Facility Energy from the Facility pursuant to or as a result of (a) a Buyer Bid Curtailment, (b) a Buyer Curtailment Order or (c) a Buyer Default, Agenda Page 612
3 in each case that directly causes Seller to be unable to deliver Facility Energy to the Delivery Point; provided, the duration of any Buyer Curtailment Period shall be inclusive of the time required for the Facility to ramp down and ramp up.
“Buyer Default” means an Event of Default of Buyer.
“Buyer’s Indemnified Parties” has the meaning set forth in Section 18.2. “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 Charges Invoice” has the meaning set forth in Exhibit D. “CAISO Commercial Operation” has the meaning of “Commercial Operation” set forth in the CAISO Tariff.
“CAISO Costs” means the debits, costs, penalties and interest that are directly assigned by the CAISO to the CAISO Resource ID for the Facility for, or attributable to, Scheduling or deliveries from the Facility under this Agreement in each applicable Settlement Interval. “CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Resource ID” has the same meaning as “Resource ID” as defined in the CAISO Tariff.
“CAISO Revenues” means the credits and other payments incurred or received by Seller, as the Facility’s Scheduling Coordinator, as a result of Scheduling or Facility Energy from the Facility delivered by Seller to any CAISO administered market, including costs and revenues associated with CAISO dispatches, for each applicable Settlement Interval. “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.
Agenda Page 613
4 “Capacity Damages” has the meaning set forth in Exhibit B. “CEC” means the California Energy Commission or its successor agency. “CEC Certification and Verification” means that the CEC has certified (or, with respect to periods before the date that is one hundred eighty (180) days following the Commercial Operation Date, that the CEC has pre-certified) 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.
“CEC Precertification” means that the CEC has issued a precertification for the Facility indicating that the planned operations of the Facility would comply with applicable CEC requirements for CEC Certification and Verification.
“Change of Control” means, except in connection with public market transactions of equity interests or capital stock of Seller’s Ultimate Parent, any circumstance in which Ultimate Parent ceases to own, directly or indirectly through one or more intermediate entities, more than fifty percent (50%) of the outstanding equity interests in Seller; provided, in calculating ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more intermediate entities shall not be counted towards Ultimate Parent’s ownership interest in Seller unless Ultimate Parent directly or indirectly owns more than fifty percent (50%) of the outstanding equity interests in each such intermediate entity; and (b) ownership interests in Seller owned directly or indirectly by any Lender (including any tax equity provider) shall be excluded from the total outstanding equity interests in Seller. “COD Certificate” has the meaning set forth in Exhibit B. “Commercial Operation” has the meaning set forth in Exhibit B. “Commercial Operation Date” means the date Commercial Operation is achieved. “Commercial Operation Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) ninety (90). “Community Sponsor” means a local non-profit community-based organization or local government entity that is located in Buyer’s service territory and sponsors the Facility on behalf of the residents of the community.
“Compliance Actions” has the meaning set forth in Section 3.14(a). “Compliance Expenditure Cap” has the meaning set forth in Section 3.14.
Agenda Page 614
5 “Concurrence Letter” means authorization from the Utility Distribution Company that the Facility may participate in Buyer’s Distributed Energy Resource Aggregation (as such term is defined in the CAISO Tariff).
“Confidential Information” has the meaning set forth in Section 18.1. “Construction Start” has the meaning set forth in Exhibit B. “Construction Start Date” has the meaning set forth in Exhibit B. “Contract Price” has the meaning set forth on the Cover Sheet; provided, if, prior to the Commercial Operation Date, there is a change in applicable Laws that increases the ITC rate applicable to the Facility, Seller shall provide Notice to Buyer of the effective date of such Law and the Contract Price shall be reduced by per MWh for each percentage point that the new ITC rate is above
“Contract Term” has the meaning set forth in Section 2.1. “Contract Year” means a period of twelve (12) consecutive months. The first Contract Year shall commence on the Commercial Operation Date and each subsequent Contract Year shall commence on the anniversary of the Commercial Operation Date. “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.
“COVID-19” means the epidemic disease designated COVID-19 and the related virus designated SARS-CoV-2 and any mutations thereof, and the efforts of a Governmental Authority to combat such disease.
“CPUC” means the California Public Utilities Commission, or successor entity. “CPUC Approval” means a final and non-appealable order, decision, or disposition of the CPUC, without conditions or modifications unacceptable to the Parties, or either of them, which approves this Agreement in its entirety, including payments to be made by Buyer, subject to CPUC review of Buyer’s administration of this Agreement. CPUC Approval will be deemed to have occurred on the date that a CPUC order, decision, or disposition containing such findings becomes final and non-appealable.
“Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then Agenda Page 615
6 assigned to such entity as an issuer rating by S&P or Moody’s. If ratings by S&P and Moody’s are not equivalent, the lower rating shall apply.
“Cure Plan” has the meaning set forth in Section 11.1(b)(iii). “Curtailed Energy” means the amount of energy expressed in MWh that the Facility would have produced and delivered to the Delivery Point, but that is not produced by the Facility and delivered to the Delivery Point during a Curtailment Period, which amount shall be equal to the Real-Time Forecast, expressed in MWh, applicable to the Curtailment Period, less the amount of Facility Energy delivered to the Delivery Point during the Curtailment Period; provided, if the Facility Energy is greater than the calculation of potential generation, then the Curtailed Energy shall be zero (0).
“Curtailment Order” means any of the following:
(a) CAISO orders, directs, alerts, or provides notice to a Party, including a CAISO Operating Order, 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, or (iii) in response to an Energy oversupply or potential Energy oversupply, and Buyer or the SC for the Facility submitted a Self-Schedule for the MWhs curtailed corresponding to the MWhs in the VER forecast for the Facility during the relevant time period;
(b) a curtailment ordered by the Transmission Provider 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 Transmission Provider’s electric system integrity or the integrity of other systems to which the Transmission Provider is connected; (c) a curtailment ordered by CAISO or the Transmission Provider due to a Transmission System Outage; or
(d) a curtailment in accordance with Seller’s obligations under its Interconnection Agreement with the Transmission Provider 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, the Curtailment Period shall be inclusive of the time required for the Facility to ramp down and ramp up.
“Daily Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) one hundred twenty (120). “Damage Payment” means the amount to be paid by the Defaulting Party to the Non-Defaulting Party after a Terminated Transaction occurring prior to the Commercial Operation Date, in a dollar amount as set forth in Section 11.3(a).
Agenda Page 616
7 “Day-Ahead Forecast” has the meaning set forth in Section 4.4(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. “Deemed Delivered Energy” means the amount of energy expressed in MWh that the Facility would have produced and delivered to the Delivery Point, but that is not produced by the Facility during a Buyer Curtailment Period, which amount shall be equal to the Real-Time Forecast, expressed in MWh, applicable to the Buyer Curtailment Period, as applicable, less the amount of Facility Energy delivered to the Delivery Point during the Buyer Curtailment Period, as applicable; provided, if the Facility Energy is greater than the calculation of potential generation, then the Deemed Delivered Energy shall be zero (0).
“Defaulting Party” has the meaning set forth in Section 11.1(a). “Deficient Month” has the meaning set forth in Section 4.8(e). “Delay Damages” means Daily Delay Damages and Commercial Operation Delay Damages.
“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 Commercial Operation Date, unless terminated earlier in accordance with the terms and conditions of this Agreement.
“Development Cure Period” has the meaning set forth in Exhibit B. “Development Security” means (i) cash, or (ii) a Letter of Credit in the amount set forth on the Cover Sheet.
“Disadvantaged Communities” or “DAC” has the meaning set forth in CPUC Decision 18-06-027 as communities that are defined in the CalEnviroScreen 4.0 (or any successor version) as among the top twenty-five percent (25%) of census tracts statewide, plus the census tracts in the highest five percent (5%) of CalEnviroScreen’s Pollution Burden that do not have an overall CalEnviroScreen score because of unreliable socioeconomic or health data. “Disclosing Party” has the meaning set forth in Section 18.2. “Early Termination Date” has the meaning set forth in Section 11.2. “Effective Date” has the meaning set forth on the Preamble. “Electrical Losses” means all transmission or transformation losses between the Facility and the Delivery Point.
Agenda Page 617
8 “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. “Energy” means electrical energy generated by the Facility, measured in kilowatt-hours or multiple units thereof.
“Energy Replacement Damages” has the meaning set forth in Section 4.7. “Event of Default” has the meaning set forth in Section 11.1. “Excess MWh” has the meaning set forth in Section 3.3(b). “Expected Commercial Operation Date” has the meaning set forth on the Cover Sheet. “Expected Construction Start Date” has the meaning set forth on the Cover Sheet. “Expected Energy” means the quantity of Energy that Seller expects to be able to deliver to Buyer from the Facility during each Contract Year in the quantity specified on the Cover Sheet. “Facility” means the solar photovoltaic generating facility described on the Cover Sheet and in Exhibit A, located at the Site and including mechanical equipment and associated facilities and equipment required to deliver Facility Energy to the Delivery Point. “Facility Energy” means the Energy during any Settlement Interval or Settlement Period, net of Electrical Losses and Station Use, as measured by the Facility Meter. “Facility Meter” means the CAISO approved revenue quality meter or meters (with a 0.3 accuracy class), along with a compatible data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Facility Energy delivered to the Facility Metering Point for the purpose of invoicing in accordance with Section 8.1. For clarity, the Facility may contain multiple measurement devices that will make up the Facility Meter, and, unless otherwise indicated, references to the Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together. “Facility Metering Point” means the location(s) of the Facility Meter(s) shown in Exhibit R.
“FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“Fifteen Minute Market” or “FMM” has the meaning set forth in the CAISO Tariff. “Financial Close” means Seller and/or one of its Affiliates has obtained debt and/or equity financing commitments from one or more Lenders sufficient to construct the Facility, including such financing commitments from Seller’s owner(s).
Agenda Page 618
9 “Force Majeure Event” has the meaning set forth in Section 10.1. “Forecasted Product” has the meaning set forth in Section 4.4(b). “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. “Forward Certificate Transfers” has the meaning set forth in Section 4.8(a). “Future Environmental Attributes” shall mean any and all Green Attributes that become recognized under applicable Law after the Effective Date (and not before the Effective Date), notwithstanding the last sentence of the definition of “Green Attributes” herein. Future Environmental Attributes do not include 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, with respect to any Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner. Factors used in determining the economic benefit to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term, and include the value of Green Attributes.
“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, “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 (including under the RPS regulations and/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)), 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 Agenda Page 619
10 determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; and (3) the reporting rights to such avoided emissions, such as Green Tag Reporting Rights. Green Attributes do not include (i) any energy, capacity, reliability or other power attributes from the Facility, (ii) 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, or (iii) emission reduction credits encumbered or used by the Facility for compliance with local, state, or federal operating and/or air quality permits. Green Attributes under the preceding definition are limited to Green Attributes that exist under applicable Law as of the Effective Date. “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. “Green Tags” means a unit accumulated on a MWh basis where one (1) represents the Green Attributes associated with one (1) MWh of Facility Energy. “Green-e Certified” means the Green Attributes provided to Buyer pursuant to this Agreement are certified under the Green-e Energy National Standard. “Green-e Energy National Standard” means the Green-e Renewable Energy Standard for Canada and the United States (formerly Green-e Energy National Standard) version 3.5, updated November 12, 2019, as may be further amended from time to time. “Guaranteed Capacity” means the generating capacity of the Facility, as measured in MW AC at the Delivery Point, that Seller commits to install pursuant to this Agreement, as set forth on the Cover Sheet.
“Guaranteed Commercial Operation Date” has the meaning set forth on the Cover Sheet, subject to extension pursuant to Exhibit B.
“Guaranteed Construction Start Date” has the meaning set forth on the Cover Sheet, subject to extension pursuant to Exhibit B.
“Guaranteed Energy Production” has the meaning set forth in Section 4.7. “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.
“Indemnified Party” has the meaning set forth in Section 16.1. “Indemnifying Party” has the meaning set forth in Section 16.1.
Agenda Page 620
11 “Initial Synchronization” means the commencement of Trial Operations (as defined in the CAISO Tariff).
“Installed Capacity” means the actual generating capacity of the Facility, as measured in MW AC at the Delivery Point, that achieves Commercial Operation, as evidenced by a certificate substantially in the form attached as Exhibit I hereto. “Inter-SC Trade” or “IST” has the meaning set forth in the CAISO Tariff. “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 constructed, operated and maintained during the Contract Term. “Interconnection Capacity Limit” means the maximum instantaneous amount of Energy that is permitted to be delivered to the Delivery Point under Seller’s Interconnection Agreement, in the amount of 0.300 MW.
“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. “IP Indemnity Claim” has the meaning set forth in Section 16.1(b). “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 June 27, 2017, as amended from time to time, under which Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act.
“kW” means kilowatt measured in alternating current, unless expressly stated in terms of direct current.
“kWh” means a kilowatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“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.
“Lender” means, collectively, any Person (i) providing development, senior or subordinated construction, interim, back leverage or long-term debt, equity or tax equity financing Agenda Page 621
12 or refinancing for or in connection with the development, construction, purchase, maintenance, installation or operation of the Facility, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including tax equity), public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or refinancing for the Facility or purchasing equity ownership interests of Seller and/or its Affiliates, and any trustee or agent or similar representative acting on their behalf, (ii) providing interest rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations and/or (iii) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Facility. “Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank or a foreign bank with a U.S. branch with such bank having a Credit Rating of at least A- with an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s, in a form substantially similar to the letter of credit set forth in Exhibit K.
“Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the State of California. “Locational Marginal Price” or “LMP” has the meaning set forth in the CAISO Tariff. “Losses” means, with respect to any Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner. Factors used in determining economic loss to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term and must include the value of Green Attributes and Renewable Energy Incentives. If Seller is the Non-Defaulting Party, the value of any Renewable Energy Incentives and Tax Credits, determined on an after-tax basis, lost due to Buyer’s Event of Default (which Seller has not been able to mitigate after use of reasonable efforts) and amounts due in connection with the recapture of any Renewable Energy Incentives and Tax Credits, if any, shall be included in the calculation of “Losses” which Seller may recover. “Lost Output” has the meaning set forth in Section 4.7. “Low-Income Community Bonus” has the meaning set forth in H.R. 5376 Section 13103. “Material Permits” means all permits required for Seller to commence construction, as set forth on Exhibit P.
“Milestones” means the development activities for significant permitting, interconnection, financing and construction milestones set forth on the Cover Sheet.
Agenda Page 622
13 “Monthly SQMD Charge” has the meaning set forth in Section 4.1. “Moody’s” means Moody’s Investors Service, Inc., or its successor. “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.
“Negative LMP” means, in any Settlement Period or Settlement Interval, whether in the Day-Ahead Market or Real-Time Market, the LMP at the Facility’s PNode is less than zero dollars ($0).
“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 electronic messaging (e-mail).
“Party” has the meaning set forth in the Preamble.
“Performance Measurement Period” means each two (2) consecutive Contract Years commencing with the first Contract Year so that the first Performance Measurement Period shall include Contract Years 1 and 2. Performance Measurement Periods shall overlap, so that if the first Performance Measurement Period is comprised of Contract Years 1 and 2, the second Performance Measurement Period shall be comprised of Contract Years 2 and 3, the third Performance Measurement Period shall be comprised of Contract Years 3 and 4, and so on. “Performance Security” means (i) cash or (ii) a Letter of Credit in the amount set forth on the Cover Sheet.
“Permitted Transferee” means (i) any Affiliate of Seller, or (ii) any entity that satisfies, or is controlled by another Person that satisfies, the following requirements:
(a) A tangible net worth of not less than one hundred fifty million dollars ($150,000,000) or a Credit Rating of at least BBB- from S&P, BBB- from Fitch, or Baa3 from Moody’s; and
(b) At least two (2) years of experience in the ownership and operations of power generation facilities similar to the Facility, or has retained a third-party with such experience to operate the Facility.
“Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, Agenda Page 623
14 incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“Planned Outage” means a period during which the Facility is either in whole or in part not capable of providing service due to planned maintenance that has been scheduled in advance in accordance with Section 4.6(a).
“PNode” has the meaning set forth in the CAISO Tariff.
“Portfolio” means the single portfolio of electrical energy generating or other assets and entities, including the Facility (or the interests of Seller or Seller’s Affiliates or the interests of their respective direct or indirect parent companies), that is pledged as collateral security in connection with a Portfolio Financing.
“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.
“Portfolio Content Category 2” or “PCC2” 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)(2), as may be amended from time to time or as further defined or supplemented by Law.
“Portfolio Content Category 3” or “PCC3” 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)(3), as may be amended from time to time or as further defined or supplemented by Law.
“Portfolio Financing” means any debt incurred by an Affiliate of Seller that is secured only by a Portfolio.
“Portfolio Financing Entity” means any Affiliate of Seller that incurs debt in connection with any Portfolio Financing.
“Product” has the meaning on the Cover Sheet.
“Production Tax Credit” or “PTC” means the production tax credit for wind-powered electric generating facilities described in Section 45 of the Internal Revenue Code of 1986, as it may be amended or supplemented from time to time.
“Progress Report” means a progress report including the items set forth in Exhibit E.
Agenda Page 624
15 “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 industry during the relevant time period with respect to distribution-interconnected rooftop solar generating facilities in the Western United States, or (b) any of the practices, methods and acts which, in the exercise of reasonable judgment 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 shall include compliance with applicable Laws, applicable reliability criteria, and the applicable 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.
“Real-Time Forecast” has the meaning set forth in Section 4.4(d). “Real-Time Market” has the meaning set forth in the CAISO Tariff. “Real-Time Price” means the Resource-Specific Settlement Interval LMP as defined in the CAISO Tariff. If there is more than one applicable Real-Time Price for the same period of time, Real-Time Price shall mean the price associated with the smallest time interval. “Receiving Party” has the meaning set forth in Section 18.2. “Reliability Network Upgrades” has the meaning set forth in the CAISO Tariff. “Remedial Action Plan” has the meaning set forth in Section 2.4. “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 way to the Facility, including a cash grant available under Section 1603 of Division B of the American Recovery and Reinvestment Act of 2009, in lieu of federal Tax credits or any similar or substitute payment available under subsequently enacted federal legislation; and (c) any other form of incentive relating in any way to the Facility that is not a Green Attribute or Future Environmental Attribute.
“Replacement Energy” has the meaning set forth in Exhibit G. “Replacement Green Attributes” has the meaning set forth in Exhibit G.
Agenda Page 625
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17 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.
“Site” means the real property on which the Facility is or will be located, as further described in Exhibit A, and as shall be updated by Seller at the time Seller provides an executed Construction Start Date certificate in the form of Exhibit J to Buyer; provided, any such update to the Site that includes real property that was not originally contained within the Site boundaries described in Exhibit A shall be subject to Buyer’s approval of such updates in its sole discretion. “Site Control” means that, for the Contract Term, Seller (or, prior to the Delivery Term, its Affiliate): (a) owns or has the option to purchase the Site; (b) is the lessee or has the option to lease 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.
“SP-15” means the Existing Zone Generation Trading Hub for Existing Zone region SP15 as set forth in the CAISO Tariff.
“SQMD Plan” has the meaning set forth in the CAISO Tariff. “SQMD Reporting” has the meaning set forth in Section 4.1. “Station Use” means the Energy (including Energy produced or discharged by the Facility) that is used within the Facility to power the lights, motors, temperature control systems, control systems and other electrical loads that are necessary for operation of the Facility. “Supply Chain Code” has the meaning in Exhibit S.
“System Emergency” means any condition that requires, as determined and declared by CAISO or the Transmission Provider, 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 and/or federal production tax credit, depreciation benefit, tax deduction and/or investment tax credit specific to the production of renewable energy and/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(b).
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18 “Test Energy” means Facility Energy delivered (a) commencing on the later of (i) the first date that the CAISO informs Seller in writing that Seller may deliver Facility Energy to the CAISO and (ii) the first date that the Transmission Provider informs Seller in writing that Seller has conditional or temporary permission to operate in parallel with the CAISO Grid, and (b) ending upon the occurrence of the Commercial Operation Date.
“Test Energy Rate” has the meaning set forth in Section 3.7. “Transmission Provider” means any entity that owns, operates and maintains transmission or distribution lines and associated facilities and/or has entitlements to use certain transmission or distribution lines and associated facilities for the purpose of transmitting or transporting the Facility Energy from the Delivery Point. “Transmission System” means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service downstream from the Delivery Point.
“Transmission System Outage” means an outage on the Transmission System, other than a System Emergency, that is not caused by Seller’s actions or inactions and that prevents Buyer or the CAISO (as applicable) from receiving System Energy onto the Transmission System. “Ultimate Parent” means Pivot Energy Development LLC, a Colorado limited liability company.
“Utility Distribution Company” means any entity that owns, operates and maintains distribution lines and associated facilities and/or has entitlements to use certain distribution lines and associated facilities for the purpose of transmitting or transporting the Facility Energy from the Delivery Point.
“Variable Energy Resource” or “VER” has the meaning set forth in the CAISO Tariff. “WECC” means the Western Electricity Coordinating Council or its successor. “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 May 1, 2018, 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:
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19 (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 shall mean 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 terms “include” and “including” mean “include or including (as applicable) 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; (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) the expression “and/or” when used as a conjunction shall connote “any or all of”;
(l) 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
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20 (m) 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 (“Contract Term”); provided, subject to Buyer’s obligations in Section
3.7, 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 shall remain in full force and effect for two (2) years following the termination of this Agreement, and all indemnity and audit rights shall remain in full force and effect for one (1) year following the termination of this Agreement. (c) Within one hundred eighty (180) days following Seller’s receipt of notification from Buyer that Seller was shortlisted by Buyer for negotiation of this Agreement, or such later timeframe as may be approved by the director of the CPUC Energy Division or his/her/their designee, Buyer will submit this Agreement to the CPUC via a Tier 2 advice letter seeking an order that, after issuance and the passage of time, would constitute a CPUC Approval (“Approval Application”). Seller agrees to cooperate with Buyer in preparing and filing the Approval Application and to actively support that application, as reasonably requested by Buyer.
If CPUC Approval of this Agreement is not obtained within one hundred eighty (180) days following the Effective Date, then either Party may terminate this Agreement upon written Notice to the other Party. Upon such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.1(b), and Buyer shall promptly return to Seller any Development Security then held by Buyer, less any amounts drawn in accordance with this Agreement.
2.2 Conditions Precedent. The Delivery Term shall not commence until Seller completes to Buyer’s reasonable satisfaction each of the following conditions:
(a) Seller shall have delivered to Buyer (i) a completion certificate from a Licensed Professional Engineer substantially in the form of Exhibit H and (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I setting forth the Installed Capacity on the Commercial Operation Date;
(b) A Meter Service Agreement between Seller and CAISO and a Concurrence Letter from the Utility Distribution Company shall have been executed and delivered and be in full Agenda Page 630
21 force and effect, and a copy of each such agreement delivered to Buyer, and the Installed Capacity under this Agreement and the Second Agreement total at least 500 kW; (c) An Interconnection Agreement between Seller and the Transmission Provider shall have been executed and delivered and be in full force and effect and a copy of the Interconnection Agreement delivered to Buyer;
(d) All applicable regulatory authorizations, approvals and permits for the operation of the Facility that are capable of being satisfied on the Commercial Operation Date have been obtained and all conditions thereof have been satisfied and shall be in full force and effect; (e) Seller has received CEC Precertification of the Facility (and reasonably expects to receive final CEC Certification and Verification for the Facility in no more than one hundred eighty (180) days after the Commercial Operation Date); (f) Seller (with the reasonable participation of Buyer) shall have completed all applicable WREGIS registration requirements, including 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;
(g) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8;
(h) Seller has taken all actions and executed all documents and instruments, required to authorize Buyer (or its designated agent) to act as Scheduling Coordinator under this Agreement, and Buyer (or its designated agent) is authorized to act as Scheduling Coordinator; (i) Seller has delivered to Buyer an officer’s certificate stating (i) that Seller has not utilized any equipment or resources in connection with the construction, commissioning or testing of the Facility in violation of Section 2.3(b), and (ii) the Tax Credit and applicable rate which Seller claims will apply for the Facility and/or the Facility Energy; and (j) Seller has paid Buyer for all amounts owing under this Agreement, if any, including Delay Damages.
2.3 Development; Construction; Progress Reports.
(a) Within fifteen (15) days after the close of (i) each calendar quarter from the first calendar quarter following the Effective Date until the Construction Start Date, and (ii) each calendar month from the first calendar month following the Construction Start Date until the Commercial Operation Date, Seller shall provide to Buyer a Progress Report and agree to regularly scheduled meetings between representatives of Buyer and Seller to review such reports and discuss Seller’s construction progress. The form of the Progress Report is set forth in Exhibit E. Seller shall also provide Buyer with any reasonably requested documentation (subject to confidentiality restrictions) directly related to the achievement of Milestones within ten (10) Business Days of Agenda Page 631
22 receipt of such request by Seller. Seller is solely responsible for the design and construction of the Facility, including the location of the Site, the Facility layout, and the selection and procurement of the equipment comprising the Facility.
(b) Seller shall ensure that all materials, products and components used in constructing, installing and operating the Facility throughout the Term shall be in compliance with the Supply Chain Code. Seller shall comprehensively implement due diligence procedures for its and its Affiliate’s suppliers, subcontractors and other participants in its supply chains, to comply with the Supply Chain Code. Seller shall notify Buyer as soon as it becomes aware of any breach, or potential breach, of its obligations under this Section 2.3(b). (c) Buyer shall have the right, at Buyer’s sole expense, to retain an independent auditor to audit Seller’s compliance with the requirements of Section 2.3(b).
2.4 Remedial Action Plan. If Seller misses a Milestone by more than thirty (30) days, except as the result of Force Majeure Event or Buyer Default, Seller shall submit to Buyer, within ten (10) Business Days of the end of such thirty (30)-day period following the Milestone completion date, a remedial action plan (“Remedial Action Plan”), which will describe in detail any delays (actual or anticipated) beyond the scheduled Milestone dates, including the cause of the delay (e.g., governmental approvals, financing, property acquisition, design activities, equipment procurement, project construction, interconnection, or any other factor), Seller’s detailed description of its proposed course of action to achieve the missed Milestones and all subsequent Milestones by the Guaranteed Commercial Operation Date; provided, delivery of any Remedial Action Plan shall not relieve Seller of its obligation to provide Remedial Action Plans with respect to any subsequent Milestones and to achieve the Guaranteed Commercial Operation Date in accordance with the terms of this Agreement. Subject to the provisions of Exhibit B, so long as Seller complies with its obligations under this Section 2.4, Seller shall not be considered in default of its obligations under this Agreement solely as a result of missing any Milestone.
2.5 Low-Income Community Bonus. Seller shall make commercially reasonable efforts to qualify for and receive the Low-Income Community Bonus. Seller shall give Notice to Buyer within five (5) Business Days of Seller’s receipt of notice from any Governmental Authority regarding the outcome of Seller’s request or application to receive such Low-Income Community Bonus. Buyer shall use commercially reasonable efforts to provide information reasonably requested by Seller in support of Seller’s obligations pursuant to this Section 2.5.
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 shall purchase all the Product produced by or associated with the Facility in accordance with Section 3.3, and Seller shall supply and deliver to Buyer all the Product produced by or associated with the Facility. At its sole discretion, Buyer may during the Delivery Term re-sell all or a portion of the Product; provided, no such resale shall relieve Buyer of any of its obligations under this Agreement. During the Delivery Term, Buyer shall have exclusive rights to offer, bid, or otherwise submit the Product, and/or any component Agenda Page 632
23 thereof, from the Facility after the Delivery Point for resale in the market, and retain and receive any and all related revenues.
3.2 Sale of Green Attributes. During the Delivery Term, Seller shall sell and deliver to Buyer, and Buyer shall purchase from Seller, all Green Attributes attributable to the Facility Energy generated by the Facility. Upon request of Buyer, Seller shall use commercially reasonable efforts to (a) submit and receive approval from the Center for Resource Solutions (or any successor that administers the Green-e Certification process), for the Green-e tracking attestations and (b) support Buyer’s efforts to qualify the Green Attributes transferred by Seller as Green-e Certified.
3.3 Compensation.
(a) During the Delivery Term, Buyer shall pay Seller the Contract Price for each MWh of Facility Energy, plus Deemed Delivered Energy, if any, up to one hundred fifteen percent (115%) of the Expected Energy for each Contract Year. If at any point in any Contract Year, the amount of Facility Energy plus Deemed Delivered Energy exceeds one hundred fifteen percent (115%) of the Expected Energy for such Contract Year, the price to be paid for additional Facility Energy and/or Deemed Delivered Energy shall be $0.00/MWh. (b) If during any Settlement Interval, Seller delivers Facility Energy in excess of the product of the Guaranteed Capacity and the duration of the Settlement Interval, expressed in hours (“Excess MWh”), then the price applicable to all such Excess MWh in such Settlement Interval shall be zero dollars ($0), and if there is a Negative LMP during such Settlement Interval, Seller shall pay to Buyer an amount equal to the absolute value of the Negative LMP times such Excess MWh.
(c) During the Delivery Term, Seller shall receive no compensation from Buyer for Curtailed Energy or Facility Energy that is delivered in violation of a Curtailment Order. (d) Tax Credits. The Parties agree that the neither the Contract Price nor the Test Energy Rate are subject to adjustment or amendment if Seller fails to receive any Tax Credits, or if any Tax Credits expire, are repealed or otherwise cease to apply to Seller or the Facility in whole or in part, or Seller or its investors are unable to benefit from any Tax Credits. Seller shall bear all risks, financial and otherwise, throughout the Contract Term, associated with Seller’s or the Facility’s eligibility to receive Tax Credits or to qualify for accelerated depreciation for Seller’s accounting, reporting or Tax purposes. The obligations of the Parties hereunder, including those obligations set forth herein regarding the purchase and price for and Seller’s obligation to deliver Facility Energy and Product, shall be effective regardless of whether construction of the Facility (or any portion thereof) or the sale of Facility Energy is eligible for, or receives Tax Credits during the Contract Term.
3.4 Imbalance Energy. Buyer and Seller recognize that in any given Settlement Period the amount of Facility Energy delivered from the Facility may deviate from the amount of Scheduled Energy, and that to the extent there are such deviations, any costs, liabilities or revenues from such imbalances shall be solely for the account of Buyer, except as expressly set forth in this Agreement.
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24 3.5 Ownership of Renewable Energy Incentives. Seller shall have all right, title and interest in and to all Renewable Energy Incentives. Buyer acknowledges that any Renewable Energy Incentives belong to Seller. If any Renewable Energy Incentives, or values representing the same, are initially credited or paid to Buyer, Buyer shall cause such Renewable Energy Incentives or values relating to same to be assigned or transferred to Seller without delay. Buyer shall reasonably cooperate with Seller, at Seller’s sole expense, in Seller’s efforts to meet the requirements for any certification, registration, or reporting program relating to Renewable Energy Incentives.
3.6 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, 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 3.6(a), and Section
3.6(b), in such event, Buyer shall bear all costs 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 3.6(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, the Parties acknowledge and agree that such terms are not intended to alter the other material terms of this Agreement.
3.7 Test Energy. No less than fourteen (14) days prior to the first day on which Test Energy is expected to be available from the Facility, Seller shall notify Buyer of the availability of the Test Energy. If and to the extent the Facility generates Test Energy, Seller shall sell and Buyer shall purchase from Seller all Test Energy and any associated Products from the Facility on an as-available basis for up to ninety (90) days from the first delivery of Test Energy. As compensation for such Test Energy and associated Product, Buyer shall pay Seller for each MWh of Test Energy an amount equal to (a) seventy percent (70%) of the Contract Price, and thereafter zero dollars ($0) per MWh (the “Test Energy Rate”). The conditions precedent in Section 2.2 are not applicable to the Parties’ obligations under this Section 3.7.
3.8 [Reserved].
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25 3.9 [Reserved].
3.10 [Reserved].
3.11 CEC Certification and Verification. Subject to Section 3.14, Seller shall take all necessary steps including, but not limited to, making or supporting timely filings with the CEC to obtain and 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). Seller shall obtain CEC Precertification by the Commercial Operation Date. Within thirty (30) days after the Commercial Operation Date, Seller shall apply with the CEC for final CEC Certification and Verification.
Within one hundred eighty (180) days after the Commercial Operation Date, Seller shall obtain and maintain throughout the remainder of the Delivery Term the final CEC Certification and Verification. Seller must promptly notify Buyer and the CEC of any changes to the information included in Seller’s application for CEC Certification and Verification for the Facility.
3.12 Eligibility. Subject to Section 3.13, Seller, and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement that: (i) the Facility qualifies and is certified by the CEC as an Eligible Renewable Energy Resource as such term is defined in Public Utilities Code Section 399.12 or Section 399.16; and (ii) the Facility’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. The term “commercially reasonable efforts” as used in this Section 3.11 means efforts consistent with and subject to Section 3.13.
3.13 California Renewables Portfolio Standard. Subject to Section 3.14, Seller shall also take all other actions necessary to ensure that the Energy produced from the Facility is tracked for purposes of satisfying the California Renewables Portfolio Standard requirements, as may be amended or supplemented by the CPUC or CEC from time to time.
3.14 Compliance Expenditure Cap. If a change in Law occurring after the Effective Date has increased Seller’s cost to comply with Seller’s obligations under this Agreement that are made subject to this Section 3.12, including with respect to obtaining, maintaining, conveying or effectuating Buyer’s use of Green Attributes, then the Parties agree that the maximum aggregate amount of costs and expenses Seller shall be required to bear during the Delivery Term to comply with all of such obligations shall be capped at Twenty-Five ($25) per kW of Guaranteed Capacity (“Compliance Expenditure Cap”).
(a) Any actions required for Seller to comply with its obligations set forth in the first paragraph above, the cost of which will be included in the Compliance Expenditure Cap, shall be referred to collectively as the “Compliance Actions.” (b) If Seller reasonably anticipates the need to incur out-of-pocket expenses in excess of the Compliance Expenditure Cap in order to take any Compliance Action Seller shall provide Notice to Buyer of such anticipated out-of-pocket expenses.
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26 (c) Buyer will have sixty (60) days to evaluate such Notice (during which time period Seller is not obligated to take any Compliance Actions described in the Notice) and shall, within such time, either (1) agree to reimburse Seller for all or some portion of the costs that exceed the Compliance Expenditure Cap (such Buyer-agreed upon costs, the “Accepted Compliance Costs”), or (2) waive Seller’s obligation to take such Compliance Actions, or any part thereof for which Buyer has not agreed to reimburse Seller. If Buyer does not respond to a Notice given by Seller under this Section 3.14 within sixty (60) days after Buyer’s receipt of same, Buyer shall be deemed to have waived its rights to require Seller to take the Compliance Actions that are the subject of the Notice, and Seller shall have no further obligation to take, and no liability for any failure to take, such Compliance Actions until such time as Buyer agrees to pay such Accepted Compliance Costs.
(d) If Buyer agrees to reimburse Seller for the Accepted Compliance Costs, then Seller shall take such Compliance Actions covered by the Accepted Compliance Costs as agreed upon by the Parties and Buyer shall reimburse Seller for Seller’s actual costs to effect the Compliance Actions, not to exceed the Accepted Compliance Costs, within sixty (60) days from the time that Buyer receives an invoice and documentation of such costs from Seller.
3.15 Project Configuration.
In order to optimize the benefits of the Facility, Buyer and Seller each agree that if requested by the other Party, then Buyer and Seller shall discuss in good faith potential reconfiguration of the Facility or Interconnection Facilities; provided, neither Party shall be obligated to agree to any changes under this Agreement, or to incur any expense in connection with such changes, except under terms mutually acceptable to both Parties as set forth in a written agreement.
ARTICLE 4
OBLIGATIONS AND DELIVERIES
4.1 Delivery.
(a) Energy. Subject to the provisions of this Agreement, commencing on the Commercial Operation Date 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 shall 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, any operation and maintenance charges imposed by the Transmission Provider directly relating to the Facility’s operations. Buyer shall be responsible for all costs, charges and penalties, if any, imposed in connection with the delivery of Facility Energy at and after the Delivery Point, including without limitation transmission costs and transmission line losses and imbalance charges. The Facility Energy will be scheduled with the CAISO by Buyer (or Buyer’s designated Scheduling Coordinator) in accordance with Exhibit D. In consideration of Buyer’s performance of its obligation to submit Settlement Quality Meter Data for the Facility to CAISO in accordance with Exhibit D (“SQMD Reporting”), Seller shall pay or cause to be paid to Buyer for each month for which Buyer provides SQMD Reporting for the Facility an amount equal to Seller’s share of Buyer’s cost of providing such service, which amount shall be equal to Five Hundred Dollars ($500) per CAISO Agenda Page 636
27 Resource ID for which Buyer submits Settlement Quality Meter Data (“Monthly SQMD Charge”). If the Parties mutually agree in their sole discretion to allow a third party selected by Seller to submit such Settlement Quality Meter Data to CAISO, then as of the later of (i) the date Seller provides Notice of such election to Buyer, and (ii) the effective date that any such change is approved by the CAISO (to the extent required), Buyer shall no longer provide any such SQMD Reporting and the Monthly SQMD Charge will terminate.
(b) Green Attributes. All Green Attributes associated with Test Energy and the Facility Energy during the Delivery Term are exclusively dedicated to and vested in Buyer. Seller represents and warrants that Seller holds the rights to all Green Attributes from the Facility, 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.
(c) Energy Products. If, at any time during the Contract Term, Buyer requests Seller to provide any new or different Energy related products that may become recognized from time to time in the CAISO market (including, for example, reactive power), and Seller is able to provide any such product from the Facility without material adverse effect (including for avoidance of doubt any obligation to incur more than de minimis costs or liabilities) on Seller or the Facility or Seller’s obligations or liabilities under this Agreement, then Seller shall use commercially reasonable efforts to coordinate with Buyer to provide such product. If provision of any such new product would have a material adverse effect (including for avoidance of doubt any obligation to incur more than de minimis costs or liabilities) on Seller or the Facility or Seller’s obligations or liabilities under this Agreement, then Seller shall be obligated to provide such product only if the Parties first execute an amendment to this Agreement with respect to such product that is mutually acceptable to both Parties. For avoidance of doubt, provision of new or different Energy related products that results in a reduction to the Energy output of the Facility shall be deemed a material adverse effect on Seller’s obligations or liabilities under this Agreement.
4.2 Title and Risk of Loss.
(a) 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. (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 [Reserved].
4.4 Forecasting. Seller shall provide the forecasts described below. Seller shall use commercially reasonable efforts to forecast accurately and to transmit such information in a format reasonably acceptable to Buyer (or Buyer’s designee).
(a) Annual Forecast of Energy. No less than forty-five (45) days before (i) the first day of the first Contract Year of the Delivery Term and (ii) the beginning of each calendar year for every subsequent Contract Year during the Delivery Term, Seller shall provide to Buyer Agenda Page 637
28 and Buyer’s SC (if applicable) a non-binding forecast of each month’s average-day expected Facility Energy, by hour, for the following calendar year in a form substantially similar to the table found in Exhibit F-1, or as reasonably requested by Buyer. (b) Monthly Forecast of Energy. No less than thirty (30) days before the beginning of Commercial Operation, and thereafter ten (10) Business Days before the beginning of each month during the Delivery Term, Seller shall provide to Buyer and Buyer’s SC (if applicable) a non-binding forecast of (i) the available capacity of the Facility, and (ii) the hourly Facility Energy for each day of the following month (items (i)-(ii) collectively referred to as the “Forecasted Product”) in a form substantially similar to Exhibit F-2 (the “Monthly 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 and Buyer’s SC (if applicable) with a non-binding forecast of the hourly expected Forecasted Product, in each case, for each hour of the immediately succeeding day (the “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 best estimate of the hourly expected Forecasted Product. If Seller fails to provide Buyer with a Day-Ahead Forecast as required herein for any period, then for such unscheduled delivery period only Buyer shall rely on any Real-Time Forecast or the Monthly Forecast or Buyer’s best estimate based on information reasonably available to Buyer. (d) Real-Time Forecast. During the Delivery Term, Seller shall notify Buyer of any changes from the Day-Ahead Forecast of an amount equivalent to at least the Installed Capacity (the “Real-Time Forecast”), in each case, whether due to Forced Facility Outage, Force Majeure Event or other cause, as soon as reasonably possible, but no later than one (1) hour prior to the deadline for submitting schedules to the CAISO in accordance with the rules for participation in the Real-Time Market. If the Forecasted Product changes by an amount equivalent to at least the Installed Capacity as of a time that is less than one (1) hour prior to the Real-Time Market deadline, but before such deadline, then Seller must notify Buyer as soon as reasonably possible.
Such Real-Time Forecasts of Facility Energy shall be provided by an Approved Forecast Vendor and shall contain information regarding the beginning date and time of the event resulting in the change in any Forecasted Product, as applicable, the expected end date and time of such event, and any other information required by the CAISO or reasonably requested by Buyer. With respect to any Forced Facility Outage, Seller shall use commercially reasonable efforts to notify Buyer of such outage within ten (10) minutes of the commencement of the Forced Facility Outage. Seller shall inform Buyer of any developments that are reasonably likely to affect either the duration of such outage or the availability of the Facility during or after the end of such outage. Such Real-Time Forecasts shall be communicated in a method acceptable to Buyer, provided that Buyer specifies the method no later than sixty (60) days prior to the effective date of such requirement.
In the event Buyer fails to provide Notice of an acceptable method for communications under this Section 4.4(d), then Seller shall send such communications by telephone and e-mail to Buyer. (e) Forced Facility Outages. Notwithstanding anything to the contrary herein, Seller shall promptly notify Buyer’s SC of Forced Facility Outages and Seller shall keep Buyer Agenda Page 638
29 informed of any developments that will affect either the duration of the outage or the availability of the Facility during or after the end of the Forced Facility Outage. (f) Forecasting Penalties. In the event Seller does not in a given hour provide the Real-Time forecast required in Section 4.4(d), and Buyer incurs a loss or penalty resulting from its scheduling activities with respect to Facility Energy during such hour, Seller shall be responsible for a “Forecasting Penalty” for each such hour equal to the product of (A) the absolute difference (if any) between (i) the expected Facility Energy for such hour set forth in the Monthly Forecast, and (ii) the actual Facility Energy, multiplied by (B) the absolute value of the Real-Time Price in such hour. Settlement of Forecasting Penalties shall occur as set forth in Article 8 of this Agreement.
(g) CAISO Tariff Requirements. Seller shall comply with all applicable obligations for Distributed Energy Resource Aggregations under the CAISO Tariff, including complying with CAISO dispatch and operating instructions and providing appropriate operational data, and will fully cooperate with Buyer, Buyer’s SC, and CAISO in providing all data, information, and authorizations required thereunder.
4.5 Dispatch Down/Curtailment.
(a) General. Seller agrees to reduce the amount of Facility Energy produced by the Facility, by the amount and for the period set forth in any Curtailment Order or Buyer Curtailment Order, or notice received from CAISO in respect of a Buyer Bid Curtailment. (b) Buyer Curtailment. Buyer shall have the right to order Seller to curtail deliveries of Facility Energy through Buyer Curtailment Orders; provided, Buyer shall compensate Seller for Deemed Delivered Energy in accordance with Section 3.3. (c) Failure to Comply. If Seller fails to comply with a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order, then, for each MWh of Facility Energy that is delivered by the Facility to the Delivery Point in excess of the Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order, Seller shall pay Buyer for each such MWh at an amount equal to the sum of (A) + (B) + (C), where: (A) is the amount, if any, paid to Seller by Buyer for delivery of such excess MWh, (B) is the sum, for all Settlement Intervals with a Negative LMP during the Buyer Curtailment Period or Curtailment Period, of the absolute value of the product of such excess MWh in each Settlement Interval and the Negative LMP for such Settlement Interval, and (C) is any penalties assessed by the CAISO or other charges assessed by the CAISO resulting from Seller’s failure to comply with the Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order.
(d) Seller Equipment Required for Operating Instruction Communications.
Seller shall acquire, install, and maintain such facilities, communications links and other equipment, and implement such protocols and practices, as necessary to respond to and follow operating instructions from the CAISO, including an electronic signal conveying real time and intra-day instructions, to operate the Facility as directed by Buyer from time to time in accordance with this Agreement and/or a Governmental Authority, including to implement a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order in accordance with the Agenda Page 639
30 methodologies applicable to the Facility and used to transmit such instructions. If at any time during the Delivery Term Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with methodologies applicable to the Facility and directed by Buyer, Seller shall take the steps necessary to become compliant as soon as commercially reasonably possible. Seller shall be liable pursuant to Section 4.5(c) for failure to comply with a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order, during the time that Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with applicable methodologies. A Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order communication via such systems and facilities shall have the same force and effect on Seller as any other form of communication.
4.6 Reduction in Energy Delivery Obligation. Without limiting Section 3.1 or Exhibit G:
(a) Facility Maintenance.
(i) Seller shall provide to Buyer written schedules for Planned Outages for each Contract Year no later than thirty (30) days prior to the first day of the applicable Contract Year. Buyer may provide comments no later than ten (10) days after receiving any such schedule, and Seller shall in good faith take into account any such comments. Seller shall deliver to Buyer the final updated schedule of Planned Outages no later than ten (10) days after receiving Buyer’s comments. Seller shall be permitted to reduce deliveries of Product during any period of such Planned Outages.
(ii) If reasonably required in accordance with Prudent Operating Practices, Seller may perform maintenance at a different time than maintenance scheduled pursuant to Section 4.6(a)(i).
(iii) Notwithstanding anything in this Agreement to the contrary, no Planned Outages of the Facility shall be scheduled or planned from each June 1 through October 31 during the Delivery Term, unless approved by Buyer in writing in its sole discretion. In the event that Seller has a previously Planned Outage that becomes coincident with a System Emergency, Seller shall make all reasonable efforts to reschedule such Planned Outage. (b) Forced Facility Outage. Seller shall be permitted to reduce deliveries of Product during any Forced Facility Outage. Seller shall provide Buyer with Notice and expected duration (if known) of any Forced Facility Outage.
(c) System Emergencies and other Interconnection Events. Seller shall be permitted to reduce deliveries of Product during any period of System Emergency, Transmission System Outage, Buyer Curtailment Period, or upon Notice of a Curtailment Order pursuant to the terms of this Agreement, the Interconnection Agreement or applicable tariff. (d) Force Majeure Event. Subject to Article 10, Seller shall be permitted to reduce deliveries of Product during any Force Majeure Event. (e) Health and Safety. Seller shall be permitted to reduce deliveries of Product as necessary to maintain health and safety pursuant to Section 6.2.
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31 4.7 Guaranteed Energy Production. During each Performance Measurement Period, Seller shall deliver to Buyer an amount of Facility Energy, not including any Excess MWh, equal to no less than the Guaranteed Energy Production (as defined below). “Guaranteed Energy Production” means an amount of Facility Energy, as measured in MWh, equal to one hundred sixty percent (160%) of the average annual Expected Energy for the two (2) Contract Years constituting such Performance Measurement Period. Seller shall be excused from achieving the Guaranteed Energy Production during any Performance Measurement Period only to the extent of any Buyer Default or other Buyer failure to perform that directly prevents Seller from being able to deliver Facility Energy to the Delivery Point. For purposes of determining whether Seller has achieved the Guaranteed Energy Production, Seller shall be deemed to have delivered to Buyer the sum of: (a) any Deemed Delivered Energy plus (b) Energy in the amount it could reasonably have delivered to Buyer but was prevented from delivering to Buyer by reason of any Force Majeure Events, System Emergency, Transmission System Outage, or Curtailment Periods (“Lost Output”). If Seller fails to achieve the Guaranteed Energy Production amount in any Performance Measurement Period, Seller shall pay Buyer damages calculated in accordance with Exhibit G (“Energy Replacement Damages”); provided, Seller may, as an alternative, provide Replacement Product (as defined in Exhibit G) delivered to Buyer at SP 15 EZ Gen Hub under a Day-Ahead Schedule as an IST within ninety (90) days after the conclusion of the applicable Performance Measurement Period in the event Seller fails to deliver the Guaranteed Energy Production during such Contract Years (i) upon a schedule reasonably acceptable to Buyer, (ii) provided that such deliveries do not impose additional costs upon Buyer for which Seller refuses to provide reimbursement, and (iii) not to exceed ten percent (10%) of the Expected Energy for the previous Contract Year.
4.8 WREGIS. Seller shall, at its sole expense, but subject to Section 3.14, 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 all 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. Seller shall be deemed to have satisfied the warranty in Section 4.8(g), provided that Seller fulfills its obligations under Sections
4.8(a) through (g) below. In addition:
(a) Prior to the Commercial Operation 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 “Forward 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.
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32 (b) Seller shall cause Forward 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) Due to the ninety (90) day delay in the creation of WREGIS Certificates relative to the timing of invoice payment under Section 8.2, Buyer shall make an invoice payment for a given month in accordance with Section 8.2 before the WREGIS Certificates for such month are formally transferred to Buyer in accordance with the WREGIS Operating Rules and this Section 4.8. Notwithstanding this delay, 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 by, or the result of any action or inaction of, Seller, then the amount of Facility Energy in the Deficient Month shall be reduced by three times (3x) the amount of the WREGIS Certificate Deficit for purposes of calculating Buyer’s payment to Seller under Article 8 and the Guaranteed Energy Production for the applicable Contract Year; provided, such adjustment shall not apply to the extent that Seller either (x) resolves the WREGIS Certificate Deficit within ninety (90) days after the Deficient Month or (y) provides Replacement Green Attributes (as defined in Exhibit G) within ninety (90) days after the Deficient Month (i) upon a schedule reasonably acceptable to Buyer and (ii) provided that such deliveries do not impose additional costs upon Buyer for which Seller refuses to provide reimbursement. 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. (g) Seller warrants that all necessary steps to allow the Renewable Energy Credits transferred to Buyer to be tracked in WREGIS will be taken prior to the first delivery under this Agreement. [STC REC-2, Non-modifiable. D.11-01-025] (h) 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 for compliance with the California Renewables Portfolio Standard, as set forth in CPUC Decision 08-08-028, and as may be modified Agenda Page 642
33 by subsequent decision of the CPUC 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, Non-modifiable. D.11-01- 025]
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 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 to evidence such exemption or exclusion within thirty (30) days after the date Buyer makes such claim. Buyer shall indemnify, defend, and hold Seller harmless from any liability with respect to Taxes for which Buyer is responsible hereunder and 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, 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, as between Seller and Buyer, be solely responsible for the operation and maintenance of the Facility and the delivery of the Product and 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 Buyer’s emergency contact identified on Exhibit N Notice of such condition. Such action may include disconnecting and removing all or a portion of the Facility, or suspending the supply of Facility Energy to the Delivery Point.
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34 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 and/or co-tenancy agreements to be entered into among Seller, the Transmission Provider, Seller’s Affiliates, and/or third parties pursuant to which certain Interconnection Facilities may be subject to joint ownership and shared maintenance and operation arrangements; provided, such agreements shall (i) permit Seller to perform or satisfy, and shall not purport to limit, its obligations hereunder, including by reserving interconnection capacity under the Interconnection Agreements equal to the Interconnection Capacity Limit for Buyer’s sole use, (ii) provide for separate metering of the Facility, (iii) provide that any other generating or energy storage facilities not included in the Facility but using Shared Facilities shall not be included within the Facility’s CAISO Resource ID, and (iv) provide that in the event of any discretionary allocation of curtailment of output from generating or energy storage facilities using the Shared Facilities shall not be allocated to the Facility more than its pro rata portion of the total capacity of all generating or energy storage facilities using the Shared Facilities. Seller shall not, and shall not permit any affiliate to, allocate to other parties a share of the total interconnection capacity under the Interconnection Agreements in excess of an amount equal to the total interconnection capacity under the Interconnection Agreements minus the Interconnection Capacity Limit.
ARTICLE 7
METERING
7.1 Metering. Seller shall measure the amount of Facility Energy using the Facility Meter. All Facility Meters will be programmed, operated and maintained pursuant to the applicable CAISO-approved SQMD Plan for the Facility, at Seller’s sole cost, throughout the period to which the SQMD Plan applies. Seller shall promptly provide to Buyer a copy of the CAISO-approved SQMD Plan and any modifications thereto and notice of any termination or withdrawal thereof.
Seller shall separately meter all Station Use. All meters will be operated pursuant to applicable CAISO-approved calculation methodologies and maintained as Seller’s cost. Buyer or its designated Scheduling Coordinator shall act as the Scheduling Coordinator Metered Entity for the Facility. Seller shall take commercially reasonable actions to assist Buyer or its designated SC in satisfying the requirements of the CAISO Tariff in connection with its role as the Scheduling Coordinator Metered Entity. Metering will be reasonably consistent with the Metering Diagram set forth as Exhibit R. 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 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. Seller and Buyer, or Buyer’s Scheduling Coordinator, shall cooperate to allow both Parties to retrieve the meter reads from the CAISO Market Results Interface – Settlements (MRI-S) application and 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 more frequently than annually 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. If a meter is inaccurate Agenda Page 644
35 by more than one percent (1%) and it is not known when the meter inaccuracy commenced (if such evidence exists such date will be used to adjust prior invoices), then the invoices covering the period of time since the last meter test shall be adjusted for the amount of the inaccuracy on the assumption that the inaccuracy persisted during one-half of such period; provided, that (a) such period may not exceed twelve (12) months and (b) such adjustments are accepted by CAISO and WREGIS.
ARTICLE 8
INVOICING AND PAYMENT; CREDIT
8.1 Invoicing. Seller shall make good faith efforts to deliver an invoice to Buyer for Product no later than the tenth (10th) day of each month for the previous calendar month. Each invoice shall: (a) reflect 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 Product in MWh delivered during the prior billing period, the amount of Product in MWh produced by the Facility as read by the CAISO Approved Meter, the calculation of Deemed Delivered Energy, and the amount of Replacement Product delivered during the preceding month; and (b) be in a format reasonably specified by Buyer, covering the Product provided in the preceding month determined in accordance with the applicable provisions of this Agreement. Seller shall provide Buyer with reasonable access to any records, including invoices or settlement data from CAISO, necessary to verify the accuracy of any invoices. The invoice for each month for which Buyer provides SQMD Reporting shall include a credit in the amount of the Monthly SQMD Charge owed by Seller to Buyer for such month.
8.2 Payment. Buyer shall make payment to Seller for Product (and any other amounts due) by wire transfer or ACH payment to the bank account provided on each monthly invoice.
Buyer shall pay undisputed invoice amounts by the later of (a) ten (10) Business Days after Buyer’s receipt of the invoice from Seller, and (b) the thirtieth (30th) day of the month after the operational month for which such invoice was rendered; provided, if such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on an annual Interest Rate equal to the 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 two (2) years or as otherwise required by Law. Upon fifteen (15) 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 Agenda Page 645
36 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, or there is determined to have been a meter inaccuracy sufficient to require a payment adjustment pursuant to Section 7.2.. If the required adjustment is in favor of Buyer, Buyer’s 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.
8.6 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including any related damages calculated pursuant to Exhibits B and G, interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.
8.7 Seller’s Development Security. To secure its obligations under this Agreement, Seller shall deliver the Development Security to Buyer within thirty (30) days after the Effective Date. Seller shall maintain the Development Security in full force and effect; provided, Seller has no obligation to replenish the Development Security after any draw or collection by Buyer to an amount in excess of the Seller Pre-COD Liability Cap. Upon the earlier of (i) Seller’s delivery of the Performance Security, or (ii) sixty (60) days after termination of this Agreement, Buyer shall Agenda Page 646
37 return the Development Security to Seller, plus any accrued interest, if any, if Development Security was posted as cash, less the amounts drawn in accordance with this Agreement. Seller may at its option exchange one permitted form of Development Security for another permitted form of Development Security.
8.8 Seller’s Performance Security. To secure its obligations under this Agreement, Seller shall deliver Performance Security to Buyer on or before the Commercial Operation Date.
Seller shall maintain the Performance Security in full force and effect, and Seller shall within ten (10) Business Days after any draw thereon replenish the Performance Security in the event Buyer collects or draws down any portion of the Performance Security for any reason permitted under this Agreement other than to satisfy a Termination Payment, until the following have occurred: (a) the Delivery Term has expired or terminated early; and (b) all payment obligations of Seller due and payable under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Performance Security plus accrued interest, if any, if such Performance Security is posted as cash. Seller may at its option exchange one permitted form of Performance Security for another permitted form of Performance Security.
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest (“Security Interest”) in, and lien on (and right to net against), and assignment of the Development Security, Performance Security, any other cash collateral and cash equivalent collateral posted pursuant to Sections 8.7 and 8.8 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s Security Interest in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.
Upon or any time after the occurrence of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Development Security or Performance Security, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.9):
(a) Exercise any of its rights and remedies with respect to the Development Security and Performance Security, including any such rights and remedies under Law then in effect;
(b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Development Security or Performance Security; and (c) Liquidate all Development Security or Performance Security (as applicable) then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.
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38 Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller’s obligations under this Agreement (Seller remains liable for any amounts owing to Buyer after such application), subject to Buyer’s obligation to return any surplus proceeds remaining after such obligations are satisfied in full.
8.10 Buyer Financial Statements. Buyer shall provide to Seller within one hundred eighty (180) days following the end of each fiscal year and upon Seller’s request annual audited financial statements of Buyer prepared in accordance with generally accepted accounting principles in the United States, consistently applied.
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 in Exhibit N 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 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) at the time indicated by the time stamp upon delivery and, if after 5 pm, on the next Business Day; 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 commercially 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 Agenda Page 648
39 reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance or noncompliance, a Force Majeure Event may include an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; 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 or changes in Law that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including an increase in component or compliance costs for any reason, including foreign or domestic tariffs, Buyer’s ability to buy Product at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under this Agreement); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above; (iv) a Curtailment Order; (v) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Facility, including the lack of wind, sun or other fuel source of an inherently intermittent nature, except to the extent such inability is caused by a Force Majeure Event; (vi) a strike, work stoppage or labor dispute limited only to any one or more of Seller, Seller’s Affiliates, Seller’s contractors, their subcontractors thereof or any other third party employed by Seller to work on the Facility; (vii) any equipment failure except if such equipment failure is caused by a Force Majeure Event; or (viii) any action or inaction by any third party, including Transmission Provider, that delays or prevents the approval, construction or placement in service of any Interconnection Facilities or Network Upgrades, except to the extent caused by a Force Majeure Event.
10.2 No Liability If a Force Majeure Event Occurs. Except as provided in Section 4 of Exhibit B, 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 commercially reasonable actions necessary to remove such inability with due speed and diligence.
Nothing herein shall be construed as permitting that Party to continue to fail to perform after said cause has been removed. The obligation to use due speed and diligence shall not be interpreted to require resolution of labor disputes by acceding to demands of the opposition when such course is inadvisable in the discretion of the Party having such difficulty. 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. The occurrence and continuation of a Force Majeure Event shall not suspend or excuse the obligation of a Party to make any payments due hereunder.
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 Agenda Page 649
40 cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party; provided, 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.
10.4 Termination Following Force Majeure Event or Development Cure Period. (a) If the cumulative extensions granted under the Development Cure Period (other than the extensions granted pursuant to clause 4(d) in Exhibit B) equal or exceed one hundred eighty (180) days, and Seller has demonstrated to Buyer’s reasonable satisfaction that such delays did not result from Seller’s actions or failure to take commercially reasonable actions, then Seller may terminate this Agreement upon written Notice to Buyer. Upon such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.1(b), and Buyer shall promptly return to Seller any Development Security then held by Buyer, less any amounts drawn in accordance with this Agreement. (b) If a Force Majeure Event has occurred after the Commercial Operation Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder in any material respect, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon Notice to the other Party. Upon any such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.1(b), and Buyer shall promptly return to Seller any Performance Security then held by Buyer, less any amounts drawn in accordance with this Agreement.
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)-day 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 except for failures related to the Adjusted Energy Production that do not trigger the provisions of Section 11.1(b)(iii), the exclusive remedies for which are set forth in Section 4.7) and such failure is not remedied within thirty (30) days after Notice thereof Agenda Page 650
41 (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;
(v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Article 14, if applicable; (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; or
(vii) such Party defaults under the Second Agreement, and after expiration of applicable notice and cure period under such Second Agreement, if any, the non-defaulting party under the Second Agreement terminates such Second Agreement. (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
(i) if at any time, Seller delivers or attempts to deliver Energy to the Delivery Point for sale under this Agreement that was not generated by the Facility, except for Replacement Product;
(ii) the failure by Seller to (A) achieve Construction Start on or before the Guaranteed Construction Start Date, as such date may be extended by Seller’s payment of Daily Delay Damages pursuant to Section 1(b) of Exhibit B and/or a Development Cure Period pursuant to Section 4 of Exhibit B, or (B) achieve Commercial Operation on or before the Guaranteed Commercial Operation Date, as such date may be extended by Seller’s payment of Commercial Operation Delay Damages pursuant to Section 2 of Exhibit B and/or a Development Cure Period pursuant to Section 4 of Exhibit B;
(iii) if, in any consecutive six (6) month period, the Adjusted Energy Production amount (calculated in accordance with Exhibit G) for such period is not at least ten percent (10%) of the 6-month pro rata amount of Expected Energy for such period adjusted for seasonality proportionately to the monthly forecast provided annually by Seller under Section
4.3(a), and Seller fails to (x) deliver to Buyer within ten (10) Business Days after Notice from Buyer a plan or report developed by Seller that describes the cause of the failure to meet the ten percent (10%) threshold and the actions that Seller has taken, is taking, or proposes to take in an effort to cure such condition along with the written confirmation of a Licensed Professional Engineer that such plan or report is in accordance with Prudent Operating Practices and capable of cure within a reasonable period of time, not to exceed one hundred eighty (180) days (“Cure Plan”) and (y) complete such Cure Plan in all material respects as set forth therein, including within the timeframe set forth therein;
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42 (iv) failure by Seller to satisfy the collateral requirements pursuant to Sections 8.7 or 8.8 within five (5) Business Days after Notice from Buyer, including the failure to replenish the Performance Security amount in accordance with this Agreement in the event Buyer draws against it for any reason other than to satisfy a Termination Payment; (v) with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer either (1) cash, or (2) a substitute Letter of Credit from a different issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in the amount required hereunder within ten (10) Business Days after Seller receives Notice of the occurrence of any of the following events:
(A) the issuer of the outstanding Letter of Credit shall fail to maintain a Credit Rating of at least A- by S&P or A3 by Moody’s; (B) the issuer of such Letter of Credit becomes Bankrupt; (C) the issuer of the outstanding Letter of Credit shall fail to comply with or perform its obligations under such Letter of Credit and such failure shall be continuing after the lapse of any applicable grace period permitted under such Letter of Credit;
(D) the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit; (E) the issuer of the outstanding Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit;
(F) such Letter of Credit fails or ceases to be in full force and effect at any time; or
(G) Seller shall fail to renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit and as provided in accordance with this Agreement, and in no event less than sixty (60) days prior to the expiration of the outstanding Letter of Credit.
(vi) if the officer’s certificate provided pursuant to Section 2.2(i) specifies that Seller will utilize PTC for financing the Facility.
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 Agenda Page 652
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44 be difficult or impossible to determine and that the damages set forth in this Section 11.3(a)(ii) are a reasonable approximation of Seller’s harm or loss.
(b) Termination Payment On or After the Commercial Operation Date. The payment owed by the Defaulting Party to the Non-Defaulting Party for a Terminated Transaction occurring after the Commercial Operation Date (“Termination Payment”) shall be the aggregate of all Settlement Amounts plus any and all other amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information.
The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages. Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (i) 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, (ii) the Termination Payment described in this Section
11.3(b) is a reasonable and appropriate approximation of such damages, and (iii) the Termination Payment described in this Section 11.3(b) 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 a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.
11.4 Notice of Payment of Termination Payment or Damage Payment. As soon as practicable after a Terminated Transaction, but in no event later than sixty (60) days after the Early Termination Date (or in the event of a termination pursuant to Section 11.3(a)(ii), ninety (90) days), Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Damage Payment or Termination Payment, as applicable, and whether the Termination Payment or Damage Payment, as applicable, 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 or Damage Payment, as applicable, 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 or Damage Payment. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment or Damage Payment, as applicable, 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 or Damage Payment, as applicable, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the Termination Payment or Damage Payment, as applicable, shall be determined in accordance with Article 15.
11.6 Limitation on Seller’s Ability to Make or Agree to Third-Party Sales from the Facility after Early Termination Date. If the Agreement is terminated by Buyer prior to the Commercial Operation Date due to Seller’s Event of Default, neither Seller nor Seller's Affiliates may sell, market or deliver any Product associated with or attributable to the Facility to a party Agenda Page 654
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46 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. THE
VALUE OF ANY TAX CREDITS, DETERMINED ON AN AFTER-TAX BASIS, LOST DUE TO BUYER’S DEFAULT (WHICH SELLER HAS NOT BEEN ABLE TO MITIGATE AFTER
USE OF REASONABLE EFFORTS) AND AMOUNTS DUE IN CONNECTION WITH THE
RECAPTURE OF ANY RENEWABLE ENERGY INCENTIVES, IF ANY, SHALL BE DEEMED TO BE DIRECT DAMAGES.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 4.7, 11.2 AND 11.3, AND AS PROVIDED
IN EXHIBIT B AND EXHIBIT G, 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.
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47 ARTICLE 13
REPRESENTATIONS AND WARRANTIES; AUTHORITY
13.1 Seller’s Representations and Warranties. As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability company, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and is qualified to conduct business in each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller.
(b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, 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 (i) will be located in and connected electrically to a circuit, load, or substation within Southern California Edison’s service territory, and (ii) will be located within an eligible DAC within five (5) miles of the DAC census tracts in which subscribing customers of Buyer reside.
(f) Neither Seller nor its Affiliates have received notice from or been advised by any existing or potential supplier or service provider that COVID-19 has caused, or is reasonably likely to cause, a delay in the construction of the Facility or the delivery of materials necessary to complete the Facility, in each case that would cause the Construction Start Date to be later than the Guaranteed Construction Start Date or the Commercial Operation Date to be later than the Guaranteed Commercial Operation Date.
(g) The Facility shall have a Community Sponsor during the Delivery Term.
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48 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, validly existing 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 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, including but not limited to community choice aggregation, the Joint Powers Act, competitive bidding, public notice, open meetings, election, referendum, or prior appropriation requirements, 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, (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.
(f) Buyer is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California.
(g) Buyer cannot assert sovereign immunity as a defense to the enforcement of its obligations under this Agreement.
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49 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 each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition;
(b) It shall maintain (or obtain from time to time as required) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and (c) It shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and in material compliance with any Law.
13.4 Workforce Development. The Parties acknowledge that in connection with Buyer’s renewable energy procurement efforts, including entering into this Agreement, Buyer is committed to creating community benefits, which includes engaging a skilled and trained workforce and targeted hires. Accordingly, prior to the Guaranteed Construction Start Date, Seller shall ensure that work performed in connection with construction of the Facility will be conducted using a project labor agreement, community workforce agreement, work site agreement, collective bargaining agreement, or similar agreement providing for terms and conditions of employment with applicable labor organizations, and Seller shall remain compliant with such agreement in accordance with the terms thereof.
ARTICLE 14
ASSIGNMENT
14.1 General Prohibition on Assignments. Except as provided below in this Article 14, neither Party may voluntarily assign this Agreement or its rights or obligations under this Agreement, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned, or delayed. Any Change of Control of Seller (whether voluntary or by operation of law) will be deemed an assignment and will require the prior written consent of Buyer, which consent shall not be unreasonably withheld, conditioned, or delayed; provided, a Change of Control of Seller shall not require Buyer’s consent if the assignee or transferee is a Permitted Transferee. Any assignment made without the required written consent or in violation of the conditions to assignment set out below shall be null and void. Seller shall be responsible for Buyer’s reasonable costs associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement by Seller, including without limitation reasonable attorneys’ fees.
14.2 Collateral Assignment. Subject to the provisions of this Section 14.2, Seller has the right to assign this Agreement as collateral for any financing or refinancing of the Facility. In connection with any financing or refinancing of the Facility by Seller, Buyer shall in good faith (i) work with Seller and Lender to execute a consent to collateral assignment of this Agreement substantially in the form attached hereto as Exhibit O (“Consent to Collateral Assignment”), and (ii) at Seller’s reasonable request, execute and deliver any customary estoppel certificates to this Agreement, or other similar documents in favor of Lender, in form and substance reasonably Agenda Page 659
50 satisfactory to Buyer; provided, Buyer shall not be required to agree to any terms or conditions which are reasonably expected to have a material adverse effect on Buyer and all reasonable attorney’s fees incurred by Buyer in connection therewith shall be borne by Seller.
14.3 Permitted Assignment by Seller. Seller may, without the prior written consent of Buyer, transfer or assign this Agreement to: (a) an Affiliate of Seller or (b) any Person succeeding to all or substantially all of the assets of Seller (whether voluntary or by operation of law), if, and only if:
(i) the assignee is a Permitted Transferee;
(ii) Seller has given Buyer Notice at least fifteen (15) Business Days before the date of such proposed assignment; and
(iii) Seller has provided Buyer a written agreement signed by the Person to which Seller wishes to assign its interests that (x) provides that such Person will assume all of Seller’s obligations and liabilities under this Agreement upon such transfer or assignment and (y) certifies that such Person meets the definition of a Permitted Transferee.
Notwithstanding the foregoing, any assignment by Seller, its successors or assigns under this Section 14.3 shall be of no force and effect unless and until such Notice and agreement by the assignee have been received and accepted by Buyer.
14.4 Shared Facilities; Portfolio Financing. Buyer agrees and acknowledges that Seller may elect to finance all or any portion of the Facility or the Interconnection Facilities or the Shared Facilities (1) utilizing tax equity investment, and/or (2) through a Portfolio Financing, which may include cross-collateralization or similar arrangements. In connection with any financing or refinancing of the Facility, the Interconnection Facilities or the Shared Facilities by Seller or any Portfolio Financing, Buyer, Seller, Portfolio Financing Entity (if any), and Lender shall execute and deliver such further consents, approvals and acknowledgments as may be reasonable and necessary to facilitate such transactions; provided, Buyer shall not be required to agree to any terms or conditions which are reasonably expected to have a material adverse effect on Buyer and all reasonable attorney’s fees incurred by Buyer in connection therewith shall be borne by Seller.
14.5 Buyer Financing Assignment. Seller agrees that Buyer may assign a portion of its rights and obligations under this Agreement to a Person in connection with a municipal prepayment financing transaction (“Buyer Assignee”) at any time upon not less than fifteen (15) Business Days’ notice by delivering Notice of such assignment, which Notice must include a proposed assignment agreement substantially in the form attached hereto as Exhibit L (“Buyer Assignment Agreement”); provided, at the time of such assignment, such Buyer Assignee has a Credit Rating equal to the higher of (a) Buyer’s Credit Rating at the time of such assignment (if applicable), (b) Baa3 from Moody’s and BBB- from S&P, and (c) as reasonably requested by Seller, Buyer Assignee shall provide Seller with information and documentation with respect to Buyer Assignee and the proposed municipal prepayment financing transaction. As reasonably requested by Buyer Assignee, Seller shall (i) provide Buyer Assignee with information and documentation with respect to Seller, including but not limited to account opening information, Agenda Page 660
51 information related to forecasted generation, Credit Rating, and compliance with anti-money laundering rules, the Dodd-Frank Act, the Commodity Exchange Act, the Patriot Act and similar rules, regulations, requirements and corresponding policies; and (ii) promptly execute such Buyer Assignment Agreement and implement such assignment as contemplated thereby, subject only to the countersignature of Buyer Assignee and Buyer and the requirements of this Section 14.5.
ARTICLE 15
DISPUTE RESOLUTION
15.1 Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of Law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. [STC 17, (Source: D.07-11-025, Attachment A.) D.08-04-009]
15.2 Dispute Resolution. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a Notice from either Party identifying such dispute, the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either thirty (30) days of initiating such discussions, or within forty (40) days after Notice of the dispute, either Party may seek any and all remedies available to it at law or in equity, subject to the limitations set forth in this Agreement.
15.3 Attorneys’ Fees. In any proceeding brought to enforce this Agreement or because of the breach by any Party of any covenant or condition herein contained, the prevailing Party shall be entitled to reasonable attorneys’ fees (including reasonably allocated fees of in-house counsel) in addition to court costs and any and all other costs recoverable in said action.
ARTICLE 16
INDEMNIFICATION
16.1 Indemnification.
(a) Each Party (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless the other Party and its Affiliates, directors, officers, employees and agents (collectively, the “Indemnified Party”) from and against all claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees) (i) for personal injury or death to Persons and damage to the property of any third party to the extent arising out of, resulting from, or caused by the negligent or willful misconduct of the Indemnifying Party, its Affiliates, its directors, officers, employees, or agents, or (ii) for third-party claims resulting from the Indemnifying Party’s breach (including inaccuracy of any representation of warranty made hereunder), performance or non-performance of its obligations under this Agreement. (b) Seller shall indemnify, defend and hold harmless Buyer and its Affiliates, directors, officers, employees from and against all claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees) in connection with any claims of infringement upon or violation of any trade secret, trademark, trade name, copyright, patent, or other intellectual Agenda Page 661
52 property rights of any third party by equipment, software, applications or programs (or any portion of same) used in connection with the Facility (an “IP Indemnity Claim”). (c) Nothing in this Section 16.1 shall enlarge or relieve Seller or Buyer of any liability to the other for any breach of this Agreement. Neither Party shall be indemnified for its damages resulting from its sole negligence, intentional acts or willful misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligation to pay claims consistent with the provisions of a valid insurance policy.
16.2 Claims. Promptly after receipt by a Party of any claim or Notice of the commencement of any action, administrative, or legal proceeding, or investigation as to which the indemnity provided for in this Article 16 may apply, the Indemnified Party shall notify the Indemnifying Party in writing of such fact. The Indemnifying Party shall assume the defense thereof with counsel designated by the Indemnifying Party and satisfactory to the Indemnified Party; provided, if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to, or inconsistent with, those available to the Indemnifying Party, the Indemnified Party shall have the right to select and be represented by separate counsel, at the Indemnifying Party’s expense, unless a liability insurer is willing to pay such costs. If the Indemnifying Party fails to assume the defense of a claim meriting indemnification, the Indemnified Party may at the expense of the Indemnifying Party contest, settle, or pay such claim; provided, settlement or full payment of any such claim may be made only following consent of the Indemnifying Party or, absent such consent, written opinion of the Indemnified Party’s counsel that such claim is meritorious or warrants settlement. Except as otherwise provided in this Article 16, in the event that a Party is obligated to indemnify and hold the other Party and its successors and assigns harmless under this Article 16, the amount owing to the Indemnified Party will be the amount of the Indemnified Party’s damages net of any insurance proceeds received by the Indemnified Party following a reasonable effort by the Indemnified Party to obtain such insurance proceeds.
ARTICLE 17
INSURANCE
17.1 Insurance.
(a) General Liability. At all times during the Contract Term, Seller shall maintain, or cause to be maintained, at its sole expense, (i) commercial general liability insurance, including products and completed operations and personal injury insurance, in a minimum amount of One Million Dollars ($1,000,000) per occurrence, and an annual aggregate of not less than One Million Dollars ($1,000,000), endorsed to provide contractual liability in said amount, specifically covering Seller’s obligations under this Agreement and including Buyer as an additional insured; and (ii) an umbrella insurance policy in a minimum limit of liability of One Million Dollars ($1,000,000). Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest provisions.
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53 (b) Employer’s Liability Insurance. At all times during the Contract Term during which Seller has employees, Seller shall maintain, or cause to be maintained, at its sole expense employers’ liability insurance of not less than One Million Dollars ($1,000,000.00) for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the One Million Dollar ($1,000,000) policy limit will apply to each employee. (c) Workers Compensation Insurance. At all times during the Contract Term during which Seller has employees, Seller shall maintain, or cause to be maintained, at its sole expense workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of Law.
(d) Business Auto Insurance. At all times during the Contract Term, Seller shall maintain, or cause to be maintained, at its sole expense business auto insurance for bodily injury and property damage with limits of One Million Dollars ($1,000,000) per occurrence. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement. (e) Construction All-Risk Insurance. During the construction of the Facility prior to the Commercial Operation Date, Seller shall maintain, or cause to be maintained, at its sole expense construction all-risk form property insurance covering the Facility during such construction periods, and naming Seller (and Lender if any) as the loss payee. (f) Subcontractor Insurance. At all times during the Contract Term during which Seller has subcontractors, Seller shall require its subcontractors to carry: (i) comprehensive general liability insurance with a combined single limit of coverage not less than One Million Dollars ($1,000,000); (ii) workers’ compensation insurance and employers’ liability coverage in accordance with applicable requirements of Law; and (iii) business auto insurance for bodily injury and property damage with limits of one million dollars ($1,000,000) per occurrence. All subcontractors shall name Seller as an additional insured to insurance carried pursuant to clauses (f)(i) and (f)(iii). All subcontractors shall provide a primary endorsement and a waiver of subrogation to Seller for the required coverage pursuant to this Section 17.1(f). (g) Evidence of Insurance. Seller shall deliver to Buyer certificates of insurance evidencing such coverage within ten (10) days after the obligation to maintain each type of insurance specified in Section 17.1(a) through (f) arises and upon annual renewal thereafter. Such certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of any material modification, cancellation or termination of coverage. Such insurance shall be primary coverage without right of contribution from any insurance of Buyer. Any other insurance maintained by Seller is for the exclusive benefit of Seller and shall not in any manner inure to the benefit of Buyer. The general liability, auto liability and worker’s compensation policies shall be endorsed with a waiver of subrogation in favor of Buyer for all work performed by Seller, its employees, agents and sub-contractors.
(h) Failure to Comply with Insurance Requirements. If Seller fails to comply with any of the provisions of this Article 17, such failure shall be a failure to perform a material covenant or obligation set forth in this Agreement and, as such, shall constitute an Event of Default pursuant to Section 11.1(a)(iii) after Notice thereof from Buyer and failure to cure according to Agenda Page 663
54 the timeframes set forth therein. With respect to the required general liability, umbrella liability and commercial automobile liability insurance, Seller shall provide a current, full and complete defense to Buyer, its subsidiaries and Affiliates, and their respective officers, directors, shareholders, agents, employees, assigns, and successors in interest, in response to a third-party claim in the same manner that an insurer would have, had the insurance been maintained in accordance with the terms and conditions set forth above. In addition, alleged violations of the provisions of this Article 17 means that Seller has the initial burden of proof regarding any legal justification for refusing or withholding coverage except that if any required insurance is no longer commercially available to Seller, then the failure to comply related thereto will not be an Event of Default hereunder and the Parties will meet and confer to discuss a suitable and mutually agreeable replacement or other alternative for such insurance.
ARTICLE 18
CONFIDENTIAL INFORMATION
18.1 Definition of Confidential Information. The following constitutes “Confidential Information,” whether oral or written which is delivered by Seller to Buyer or by Buyer to Seller including: (a) the terms and conditions of, and proposals and negotiations related to this Agreement, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement.
18.2 Duty to Maintain Confidentiality. The Party receiving Confidential Information (the “Receiving Party”) from the other Party (the “Disclosing Party”) shall not disclose Confidential Information to a third party (other than the Party’s employees, lenders, counsel, accountants, directors or advisors, or any such representatives of a Party’s Affiliates, who have a need to know such information and have agreed to keep such terms confidential) except in order to comply with any applicable Law, regulation, or any exchange, control area or independent system operator rule or in connection with any court or regulatory proceeding applicable to such Party or any of its Affiliates; provided, each Party shall, to the extent practicable, use reasonable efforts to prevent or limit the disclosure. The Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation. The Parties agree and acknowledge that nothing in this Section 18.2 prohibits a Party from disclosing any one or more of the commercial terms of a transaction (other than the name of the other Party unless otherwise agreed to in writing by the Parties) to any industry price source for the purpose of aggregating and reporting such information in the form of a published energy price index.
The Parties acknowledge and agree that the Agreement and any transactions entered into in connection herewith are subject to the requirements of the California Public Records Act (Government Code Section 6250 et seq.). In order to designate information as confidential, the Disclosing Party must clearly stamp and identify the specific portion of the material designated Agenda Page 664
55 with the word “Confidential.” The Parties agree not to over-designate material as Confidential Information. Over-designation includes stamping whole agreements, entire pages or series of pages as “Confidential” that clearly contain information that is not Confidential Information.
Upon request or demand of any third person or entity not a Party hereto to Buyer pursuant to the California Public Records Act for production, inspection and/or copying of Confidential Information (“Requested Confidential Information”), Buyer shall as soon as practical notify Seller in writing via email that such request has been made. Seller shall be solely responsible for taking at its sole expense whatever legal steps are necessary to prevent release of the Requested Confidential Information to the third party by Buyer. If Seller takes no such action after receiving the foregoing notice from Buyer, Buyer shall, at its discretion, be permitted to comply with the third party’s request or demand and is not required to defend against it. If Seller does take or attempt to take such action, Buyer shall provide timely and reasonable cooperation to Seller, if requested by Seller, and Seller agrees to indemnify and hold harmless Buyer, its officers, employees and agents (“Buyer’s Indemnified Parties”), from any claims, liability, award of attorneys’ fees, or damages, and to defend any action, claim or lawsuit brought against any of Buyer’s Indemnified Parties for Buyer’s refusal to disclose any Requested Confidential Information.
18.3 Irreparable Injury; Remedies. Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party, and expressly acknowledges that monetary damages would be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth herein. Accordingly, Receiving Party acknowledges that any such breach or threatened breach will cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of proving actual damages.
18.4 Further Permitted Disclosure. Notwithstanding anything to the contrary in this Article 18, Confidential Information may be disclosed by the Receiving Party to any of its agents, consultants, contractors, trustees, or actual or potential financing parties (including, in the case of Seller, its Lender(s)), so long as such Person to whom Confidential Information is disclosed agrees in writing to be bound by confidentiality provisions that are at least as restrictive as this Article 18 to the same extent as if it were a Party.
18.5 Press Releases. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such public statement.
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 Agenda Page 665
56 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 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, 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) and/or, to the extent set forth herein, any Lender and/or Indemnified Party.
19.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
19.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Changes proposed by a non-Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under applicable Law.
19.7 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
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57 19.8 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party.
19.9 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
19.10 No Recourse to Members of Buyer. Buyer is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or the employees, directors, officers, consultants or advisors of Buyer or its constituent members, in connection with this Agreement.
19.11 Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a “forward contract” within the meaning of the U.S. Bankruptcy Code, and Buyer and Seller are “forward contract merchants” within the meaning of the U.S. Bankruptcy Code. Each Party further agrees that, for all purposes of this Agreement, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any Bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. §366 or another provision of 11 U.S.C. § 101-1532.
19.12 Change in Electric Market Design. If a change in the CAISO Tariff renders this Agreement or any provisions hereof incapable of being performed or administered, then any Party may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to make this Agreement capable of being performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith. If Buyer and Seller are unable, within sixty (60) days after delivery of such request, to agree upon changes to this Agreement or to resolve issues relating to changes to this Agreement, then any Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Article 15. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, and (ii) all of the unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution.
19.13 Further Assurances. Each of the Parties hereto agrees 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.
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58 [Signatures on following page.]
Agenda Page 668
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
PIVOT ENERGY PPA 28 LLC, a Colorado
limited liability company
By:
Name:
Title:
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA, a California
joint powers authority
By:
Name:
Title:
Agenda Page 669
Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Site Name: San Gabriel – Extra Space Storage (ESS)
Site includes all or some of the following APNs: 8122-005-039 City: Pico Rivera
County: Los Angeles
Zip Code: 90660
Latitude and Longitude: 34.007679° -118.069805°
Facility Description: Rooftop 363kWdc / 270kWac Solar Photovoltaic Solar System Delivery Point: Point of Delivery at new SCE 12kV switch located on riser pole near existing utility pole #1011362E
PNode: To be assigned during CAISO NRI process
Transmission Provider: Southern California Edison
Additional Information: 4344 San Gabriel River Pkwy, Pico Rivera, CA 90660 Agenda Page 670
Exhibit B - 1
EXHIBIT B
FACILITY CONSTRUCTION AND COMMERCIAL OPERATION
1. Construction of the Facility.
a. “Construction Start” will occur upon Seller’s acquisition of all applicable regulatory authorizations, approvals and permits for the construction of the Facility, and once Seller has engaged all contractors and ordered all essential equipment and supplies as, in each case, can reasonably be considered necessary so that physical construction of the Facility may begin and proceed to completion without foreseeable interruption of material duration, and has executed an engineering, procurement, and construction contract and issued thereunder a final notice to proceed that authorizes the contractor to mobilize to Site and begin physical construction (including, at a minimum, excavation for foundations or the installation or erection of improvements) at the Site. The date of Construction Start will be evidenced by and subject to Seller’s delivery to Buyer of a certificate substantially in the form attached as Exhibit J hereto, and the date certified therein shall be the “Construction Start Date.” Seller shall cause Construction Start to occur no later than the Guaranteed Construction Start Date. b. Seller may extend the Guaranteed Construction Start Date by paying Daily Delay Damages to Buyer for each day Seller desires to extend the Guaranteed Construction Start Date, not to exceed a total of one hundred twenty (120) days of extensions by such payment of Daily Delay Damages. On or before the date that is ten (10) days prior to the then-current Guaranteed Construction Start Date Seller shall provide Notice and payment to Buyer of the Daily Delay Damages for the number of days of extension to the Guaranteed Construction Start Date. If Seller achieves Construction Start prior to the Guaranteed Construction Start Date, as extended by the payment of Daily Delay Damages, Buyer shall refund to Seller the Daily Delay Damages for each day Seller achieves Construction Start prior to the Guaranteed Construction Start Date times the Daily Delay Damages, not to exceed the total amount of Daily Delay Damages paid by Seller pursuant to this Section 1(b). Additionally, if Seller achieves Commercial Operation on or before the Guaranteed Commercial Operation Date (not including any extensions to such date resulting from Seller’s payment of Commercial Operation Delay Damages, but as may be extended pursuant to a Development Cure Period), then Buyer shall refund to Seller all Daily Delay Damages paid by Seller and not previously refunded by Buyer.
2. Commercial Operation of the Facility. “Commercial Operation” means the condition existing when Seller has fulfilled all of the conditions precedent in Section 2.2 of the Agreement and provided Notice to Buyer substantially in the form of Exhibit H (the “COD Certificate”).
a. Seller shall cause Commercial Operation for the Facility to occur by the Guaranteed Commercial Operation Date. Seller shall notify Buyer that it intends to achieve Agenda Page 671
Exhibit B - 2
Commercial Operation at least sixty (60) days before the anticipated Commercial Operation Date.
b. Seller may extend the Guaranteed Commercial Operation Date by paying Commercial Operation Delay Damages to Buyer for each day Seller desires to extend the Guaranteed Commercial Operation Date, not to exceed a total of ninety (90) days of extensions by such payment of Commercial Operation Delay Damages. On or before the date that is ten (10) days prior to the then-current Guaranteed Commercial Operation Date Seller shall provide Notice and payment to Buyer of the Commercial Operation Delay Damages for the number of days of extension to the Guaranteed Commercial Operation Date. If Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date as extended by the payment of Commercial Operation Delay Damages, Buyer shall refund to Seller the Commercial Operation Delay Damages for each day Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date times the Commercial Operation Delay Damages, not to exceed the total amount of Commercial Operation Delay Damages paid by Seller pursuant to this Section 2(b).
3. Termination for Failure to Achieve Commercial Operation. If the Facility has not achieved Commercial Operation on or before the Guaranteed Commercial Operation Date (as may be extended hereunder), Buyer may elect to terminate this Agreement in accordance with Sections 11.1(b)(ii) and 11.2.
4. Extension of the Guaranteed Dates. The Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date shall, subject to Notice and documentation requirements set forth below, be automatically extended on a day-for-day basis (the “Development Cure Period”) for the duration of any and all delays arising out of the following circumstances to the extent the following circumstances are not the result of Seller’s failure to take all commercially reasonable actions to meet its requirements and deadlines:
a. Seller has not acquired the Material Permits by the Guaranteed Construction Start Date, despite the exercise of diligent and commercially reasonable efforts by Seller; or
b. a Force Majeure Event occurs; or
c. the Interconnection Facilities or Reliability Network Upgrades are not complete and ready for the Facility to connect and sell Product at the Delivery Point by the Guaranteed Commercial Operation Date, despite the exercise of diligent and commercially reasonable efforts by Seller; or
d. Buyer has not made all necessary arrangements to receive the Facility Energy at the Delivery Point by the Guaranteed Commercial Operation Date.
Notwithstanding anything in this Agreement to the contrary, the cumulative extensions granted under the Development Cure Period (other than the extensions granted pursuant to Agenda Page 672
Exhibit B - 3
clause 4(d) above) shall not exceed one hundred eighty (180) days, for any reason, including a Force Majeure Event, and the cumulative extensions granted to the Guaranteed Commercial Operation Date by the payment of Commercial Operation Delay Damages and any Development Cure Period(s) (other than the extensions granted pursuant to clause 4(d) above) shall not exceed two hundred seventy (270) days. Upon request from Buyer, Seller shall provide documentation demonstrating to Buyer’s reasonable satisfaction that the delays described above did not result from Seller’s actions or failure to take commercially reasonable actions.
5. Failure to Reach Guaranteed Capacity. If, at Commercial Operation, the Installed Capacity is less than one hundred percent (100%) of the Guaranteed Capacity, Seller shall have ninety (90) days after the Commercial Operation Date to install additional capacity and/or Network Upgrades such that the Installed Capacity is equal to (but not greater than) the Guaranteed Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit I hereto specifying the new Installed Capacity. If Seller fails to construct the Guaranteed Capacity by such date, Seller shall pay “Capacity Damages” to Buyer, in an amount equal to Two Hundred Fifty Dollars ($250) for each kW that the Guaranteed Capacity exceeds the Installed Capacity. Capacity Damages shall not be offset or reduced by the payment of Development Security, Performance Security, Delay Damages, or any other form of liquidated damages under this Agreement.
6. Buyer’s Right to Draw on Development Security. If Seller elects to extend the Guaranteed Construction Start Date pursuant to Section 1(b) of this Exhibit B and/or if Seller elects to extend the Guaranteed Commercial Operation Date pursuant to Section 2(b) of this Exhibit B, but Seller fails to timely pay any Daily Delay Damages or Commercial Operation Delay Damages, then Buyer may draw upon the Development Security to satisfy Seller’s payment obligation thereof and Seller shall be required to replenish the Development Security in an amount equal to Buyer’s draw.
Agenda Page 673
Exhibit C - 1
EXHIBIT C
[RESERVED]
Agenda Page 674
Exhibit D - 1
EXHIBIT D
SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Buyer as Scheduling Coordinator for the Facility. Upon Initial Synchronization of the Facility to the CAISO Grid, Buyer shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility for both the delivery and the receipt of Test Energy and the Product at the Delivery Point. At least thirty (30) days prior to the Initial Synchronization of the Facility to the CAISO Grid, (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 Initial Synchronization of the Facility to the CAISO Grid, 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 Initial Synchronization of the Facility to the CAISO Grid. On and after Initial Synchronization of the Facility to the CAISO Grid, 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 bids 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, real-time or other market basis that may develop after the Effective Date, 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 shall 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 by (in order of preference) telephonically or electronic mail to the personnel designated to receive such information.
(c) CAISO Costs and Revenues. Except as otherwise set forth below, Buyer (as Scheduling Coordinator for the Facility) shall be responsible for CAISO costs (including penalties, Imbalance Energy costs or revenues, and other charges) and shall be entitled to all CAISO revenues (including credits, Imbalance Energy revenues or costs, 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 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 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 Agenda Page 675
Exhibit D -2
penalties are imposed upon the Facility or to Buyer as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties shall be Seller’s responsibility. (d) CAISO Settlements. 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 shall 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 such 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. Seller shall provide the data to the CAISO (and to Buyer) that is required for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement. Neither Party shall change such data without the other Party’s prior written consent. (h) NERC Reliability Standards. Buyer (as Scheduling Coordinator) shall cooperate reasonably with Seller to the extent necessary to enable Seller to comply, and for Seller to demonstrate Seller’s compliance with, NERC reliability standards. This cooperation shall include the provision of information in Buyer’s possession that Buyer (as Scheduling Coordinator) has provided to the CAISO related to the Facility or actions taken by Buyer (as Scheduling Coordinator) related to Seller’s compliance with NERC reliability standards. (i) SQMD Reporting. If Seller elects to submit a SQMD Plan for the Facility, then for any time period covered by the CAISO-approved SQMD Plan(s), Seller shall provide or Agenda Page 676
Exhibit D -3
cause to be provided to Buyer (or Buyer’s designee including any Buyer Scheduling Coordinator) with respect to the Facility Meters, Settlement Quality Meter Data no more than six (6) Business Days after the relevant flow date. In connection with any SQMD Plan(s), as a Scheduling Coordinator Metered Entity (as defined in the CAISO Tariff), Buyer (as Scheduling Coordinator) shall reasonably cooperate with Seller in the SQMD Plan submission and approval process and perform the obligations required by the SQMD Plan or the CAISO applicable to Scheduling Coordinators with respect to submitting Settlement Quality Meter Data to the CAISO including without limitation submitting required affirmations and attestations (if any). Buyer (as Scheduling Coordinator) shall be responsible for submitting Settlement Quality Meter Data to the CAISO using the MRI-S System (or any alternate system designated by the CAISO) in accordance with the SQMD Plan(s) and the CAISO Tariff; provided, Seller shall indemnify Buyer against any costs or penalties imposed on Buyer as a result of Seller’s failure to provide or have provided Settlement Quality Meter Data consistent with the SQMD Plan(s) to Buyer (or Buyer’s designee including any Buyer Scheduling Coordinator), with respect to the Facility Meters and/or only the Storage Facility Meters, as applicable, within the timeframe required by this Section (i).
Agenda Page 677
Exhibit E - 1
EXHIBIT E
PROGRESS REPORTING FORM
Each Progress Report must include the following items:
1. Executive Summary.
2. Facility description.
3. Site plan of the Facility.
4. Description of any material planned changes to the Facility or the site.
5. Gantt chart schedule showing progress on achieving each of the Milestones.
6. Summary of activities during the previous calendar quarter or month, as applicable, including any OSHA labor hour reports.
7. Forecast of activities scheduled for the current calendar quarter.
8. Written description about the progress relative to Seller’s Milestones, including whether Seller has met or is on target to meet the Milestones.
9. List of issues that are reasonably likely to affect Seller’s Milestones.
10. A status report of start-up activities including a forecast of activities ongoing and after start-up, a report on Facility performance including performance projections for the next twelve (12) months.
11. Progress and schedule of all material agreements, contracts, permits (including Material Permits), approvals, technical studies, financing agreements and major equipment purchase orders showing the start dates, completion dates, and completion percentages.
12. Pictures, in sufficient quantity and of appropriate detail, in order to document construction and startup progress of the Facility, the interconnection into the Transmission System and all other interconnection utility services.
13. Workforce Development or Supplier Diversity Reporting (if applicable). Format to be provided by Buyer.
14. Any other documentation reasonably requested by Buyer.
Agenda Page 678
Exhibit F-2
EXHIBIT F-1
ANNUAL EXPECTED AVAILABLE FACILITY ENERGY
[MW 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 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.
Agenda Page 679
Exhibit F-2
EXHIBIT F-2
MONTHLY EXPECTED FACILITY ENERGY
[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 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.
Agenda Page 680
Exhibit G - 1
EXHIBIT G
GUARANTEED ENERGY PRODUCTION DAMAGES CALCULATION
In accordance with Section 4.7, if Seller fails to achieve the Guaranteed Energy Production during any Performance Measurement Period, a liquidated damages payment shall be due from Seller to Buyer, calculated as follows:
[(A – B) * (C – D)] – (E + F)
where:
A = the Guaranteed Energy Production amount for the Performance Measurement Period, in MWh
B = the Adjusted Energy Production amount for the Performance Measurement Period, in MWh
C = Replacement price for the Performance Measurement Period, in $/MWh, which is the sum of (a) the simple average of the Integrated Forward Market hourly price for all the hours in the Performance Measurement Period, as published by the CAISO, for the Existing Zone Generation Trading Hub (as defined in the CAISO Tariff) for the Delivery Point, plus (b) the market value of Replacement Green Attributes.
D = the Contract Price, in $/MWh
E = The amount of Energy Replacement Damages paid by Seller with respect to the immediately preceding Performance Measurement Period F = The product of (a) the amount of Replacement Product in MWhs delivered by Seller in the immediately preceding Contract Year and (b) the price which is (C – D)
“Adjusted Energy Production” shall mean the sum of the following: Facility Energy + Deemed Delivered Energy + Lost Output + Replacement Energy. “Replacement Energy” means electrical energy produced by a facility other than the Facility, that is provided by Seller to Buyer as Replacement Product, in an amount equal to the amount of Replacement Green Attributes provided by Seller as Replacement Product for the same Performance Measurement Period.
“Replacement Green Attributes” means Renewable Energy Credits of the same Portfolio Content Category (i.e., PCC1) as the Green Attributes portion of the Product and of the same year of production as the Renewable Energy Credits that would have been generated by the Facility.
Agenda Page 681
Exhibit G - 2
“Replacement Product” means (a) Replacement Energy, and (b) Replacement Green Attributes in an amount not to exceed ten percent (10%) of the Expected Energy for the previous Contract Year.
No payment shall be due if the calculation of (a) (A - B), (b) (C - D) or (c) [(A – B) * (C – D)] – (E + F), yields a negative number. In no event will Buyer owe any payment to Seller pursuant to this Exhibit G.
Within sixty (60) days after each Contract Year, Buyer shall send Seller Notice of the amount of damages owing, if any, which shall be payable to Buyer before the later of (a) thirty (30) days of such Notice and (b) ninety (90) days after each Performance Measurement Period; provided, the amount of damages owing shall be adjusted to account for Replacement Product, if any, delivered after each applicable Performance Measurement Period.
Agenda Page 682
Exhibit H - 1
EXHIBIT H
FORM OF COMMERCIAL OPERATION DATE CERTIFICATE
This certification (“Certification”) of Commercial Operation is delivered by _______ [licensed professional engineer] (“Engineer”) to Clean Power Alliance of Southern California, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated _______ (“Agreement”) by and between [Seller] and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
As of _______[DATE]_____, Engineer hereby certifies and represents to Buyer the following:
1. The Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.
2. Seller has installed equipment for the Facility with an Installed Capacity of no less than ninety-five percent (95%) of the Guaranteed Capacity.
3. Authorization to parallel the Facility was obtained by the Transmission Provider, [Name of Transmission Provider as appropriate] on___[DATE]____
4. The Transmission Provider has provided documentation supporting full unrestricted release for Commercial Operation by [Name of Transmission Provider as appropriate] on _______[DATE]_____.
5. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff on _______[DATE]_____.
6. Seller has segregated and separately metered Station Use to the extent reasonably possible in accordance with Prudent Operating Practice, and any such meter(s) have the same or greater level of accuracy as is required for CAISO certified meters used for settlement purposes.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Its:
Date:
Agenda Page 683
Exhibit I - 1
EXHIBIT I
FORM OF INSTALLED CAPACITY CERTIFICATE
This certification (“Certification”) of Installed Capacity is delivered by [licensed professional engineer] (“Engineer”) to Clean Power Alliance of Southern California, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated __________ (“Agreement”) by and between [SELLER ENTITY] and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
I hereby certify the following:
The installed nameplate capacity of the Facility is __ MW AC (“Installed Capacity”).
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Its:
Date:
Agenda Page 684
Exhibit J - 1
EXHIBIT J
FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of the Construction Start Date (“Certification”) is delivered by [SELLER ENTITY] (“Seller”) to Clean Power Alliance of Southern California, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated __________ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Seller hereby certifies and represents to Buyer the following:
(1) Construction Start (as defined in Exhibit B of the Agreement) has occurred, and a copy of the notice to proceed that Seller issued to its contractor as part of Construction Start is attached hereto.
(2) the Construction Start Date occurred on _____________ (the “Construction Start Date”); and
(3) the precise Site on which the Facility is located is, which must be within the boundaries of the previously identified Site:
_____________________________________________________________________ (such description shall amend the description of the Site in Exhibit A of the Agreement).
IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as of the ___ day of ________.
[SELLER ENTITY]
By:
Its:
Date:
Agenda Page 685
Exhibit K - 1
EXHIBIT K
FORM OF LETTER OF CREDIT
[Issuing Bank Letterhead and Address]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [XXXXXXX]
Date:
Bank Ref.:
Amount: US$[XXXXXXXX]
Beneficiary:
Clean Power Alliance of Southern California,
a California joint powers authority
801 S Grand, Suite 400
Los Angeles, CA 90017
Ladies and Gentlemen:
By the order of __________ (“Applicant”), we, [insert bank name and address] (“Issuer”) hereby issue our Irrevocable Standby Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) in favor of Clean Power Alliance of Southern California, a California joint powers authority (“Beneficiary”), 801 S Grand, Suite 400, Los Angeles, CA 90017, for an amount not to exceed the aggregate sum of U.S. $[XXXXXX] (United States Dollars [XXXXX] and 00/100) (the “Available Amount”), pursuant to that certain Renewable Power Purchase Agreement dated as of ______ and as amended (the “Agreement”) between Applicant and Beneficiary. This Letter of Credit shall become effective immediately and shall be of no further force or effect at 5:00 p.m., California time, on [Date] or, if such day is not a Business Day (as hereinafter defined), on the next Business Day (as may be extended pursuant to the terms of this Letter of Credit, the “Expiration Date”).
For the purposes hereof, “Business Day” shall mean any day on which commercial banks are not authorized or required to close in Los Angeles, California.
Funds under this Letter of Credit are available to Beneficiary by valid presentation on or before 5:00 p.m. California time, on or before the Expiration Date of a copy of this Letter of Credit No. [XXXXXXX] and all amendments accompanied by Beneficiary’s dated statement purportedly signed by Beneficiary’s duly authorized representative, in the form attached hereto as Exhibit A, containing one of the two alternative paragraphs set forth in paragraph 2 therein.
Any full or partial drawing hereunder may be requested by transmitting copies of the requisite documents as described above to the Issuer by facsimile at [facsimile number for draws] or such Agenda Page 686
Exhibit K - 2
other number as specified from time-to-time by the Issuer.
The facsimile transmittal shall be deemed delivered when received. Drawings made by facsimile transmittal are deemed to be the operative instrument without the need of originally signed documents.
Issuer hereby agrees that all drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Issuer before the Expiration Date. All correspondence and any drawings (other than those made by facsimile) hereunder are to be directed to [Issuer address/contact]. Issuer undertakes to make payment to Beneficiary under this Standby Letter of Credit within three (3) business days of receipt by Issuer of a properly presented Drawing Certificate. The Beneficiary shall receive payment from Issuer by wire transfer to the bank account of the Beneficiary designated in the Drawing Certificate.
Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance; provided, the Available Amount shall be reduced by the amount of each such drawing.
It is a condition of this Letter of Credit that it shall be deemed automatically extended without an amendment for a one year period (or, if such period ends on a day that is not a Business Day, until the next Business Day thereafter) beginning on the present Expiration Date hereof and upon each anniversary for such date (or, if such period ends on a day that is not a Business Day, until the next Business Day thereafter), unless at least one hundred twenty (120) days prior to any such Expiration Date Issuer has sent Beneficiary written notice by overnight courier service at the address provided below that Issuer elects not to extend this Letter of Credit, in which case it will expire on its then current Expiration Date. No presentation made under this Letter of Credit after such Expiration Date will be honored.
Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements, this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.
Except so far as otherwise stated, this Letter of Credit is subject to the International Standby Practices ISP98 (also known as ICC Publication No. 590), or revision currently in effect (the “ISP”). As to matters not covered by the ISP, the laws of the State of California, without regard to the principles of conflicts of laws thereunder, shall govern all matters with respect to this Letter of Credit.
Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available.
All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: Clean Power Alliance of Southern California, a California joint powers authority, Chief Financial Officer, 801 S Grand, Suite 400, Los Angeles, CA 90017. Only notices to Beneficiary meeting the requirements of this paragraph shall be Agenda Page 687
Exhibit K - 3
considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect.
[Bank Name]
___________________________
[Insert officer name]
[Insert officer title]
Agenda Page 688
Exhibit K - 4
EXHIBIT A
(DRAW REQUEST SHOULD BE ON BENEFICIARY’S LETTERHEAD)
Drawing Certificate
[Insert Bank Name and Address]
Ladies and Gentlemen:
The undersigned, a duly authorized representative of [ ], [ADDRESS], as beneficiary (the “Beneficiary”) of the Irrevocable Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) issued by [insert bank name] (the “Bank”) by order of __________ (the “Applicant”), hereby certifies to the Bank as follows:
1. Applicant and Beneficiary are party to that certain Renewable Power Purchase Agreement dated as of ___________, 20__ (the “Agreement”).
2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________ because a Seller Event of Default (as such term is defined in the Agreement) has occurred.
or
Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________, which equals the full available amount under the Letter of Credit, because Applicant is required to maintain the Letter of Credit in force and effect beyond the expiration date of the Letter of Credit but has failed to provide Beneficiary with a replacement Letter of Credit or other acceptable instrument within thirty (30) days prior to such expiration date.
3. The undersigned is a duly authorized representative of [ ] and is authorized to execute and deliver this Drawing Certificate on behalf of Beneficiary.
You are hereby directed to make payment of the requested amount to [ ] by wire transfer in immediately available funds to the following account:
[Specify account information]
[ ]
_______________________________
Name and Title of Authorized Representative
Date___________________________
Agenda Page 689
Exhibit L – 1
EXHIBIT L
FORM OF BUYER ASSIGNMENT AGREEMENT
This Buyer Assignment Agreement (this “Assignment Agreement” or “Agreement”) is entered into as of [______________] by and among [PPA Seller], a [______________] (“PPA Seller”), Clean Power Alliance of Southern California, a California joint powers authority (“PPA Buyer”), and [Financing Party] (“Financing Party”), and relates to that certain power purchase agreement (the “PPA”) between PPA Buyer and PPA Seller as described on Appendix 1.
In consideration of the premises above and the mutual covenants and agreements herein set forth, PPA Seller, PPA Buyer and Financing Party (the “Parties” hereto; each is a “Party”) agree as follows:
1. Limited Assignment and Delegation.
(a) PPA Buyer hereby assigns, transfers and conveys to Financing Party all right, title and interest in and to the rights of PPA Buyer under the PPA to receive delivery of the products described on Appendix 1 (the “Assigned Products”) during the Assignment Period (as defined in Appendix 1), as such rights may be limited or further described in the “Further Information” section on Appendix 1 (the “Assigned Product Rights”)[NOTE: Appendix 1 to provide for transfer of RECs.]. All Assigned Products shall be delivered pursuant to the terms and conditions of this Agreement during the Assignment Period as provided in Appendix 1. All other rights of PPA Buyer under the PPA are expressly reserved for PPA Buyer, including the right to receive any additional quantities of products beyond the limits set forth in Appendix 1. (b) PPA Buyer hereby delegates to Financing Party the obligation to pay for all Assigned Products that are actually delivered to Financing Party pursuant to the Assigned Product Rights during the Assignment Period (the “Delivered Product Payment Obligation” and together with the Assigned Product Rights, collectively the “Assigned Rights and Obligations”). All other obligations of PPA Buyer under the PPA are expressly retained by PPA Buyer. To the extent Financing Party fails to pay for any Assigned Products by the due date for payment set forth in the PPA, PPA Buyer agrees that it will remain responsible for such payment within five (5) Business Days (as defined in the PPA) of receiving notice of such non-payment from PPA Seller. (c) Financing Party hereby accepts and PPA Seller hereby consents and agrees to the assignment, transfer, conveyance and delegation described in clauses (a) and (b) above. (d) All scheduling of Assigned Products and other communications related to the PPA shall take place between PPA Buyer and PPA Seller pursuant to the terms of the PPA; provided, (i) title to Assigned Product will pass to Financing Party upon delivery by PPA Seller in accordance with the PPA; and (ii) PPA Buyer is hereby authorized by Financing Party to and shall act as Financing Party’s agent with regard to scheduling Assigned Product; (iii) PPA Buyer will provide copies to Financing Party of any Notice (as defined in the PPA) of a Force Majeure Event or Event of Default or default, breach or other occurrence that, if not cured within the applicable grace period, could result in an Event of Default contemporaneously upon delivery thereof to PPA Seller and promptly after receipt thereof from PPA Seller; (iv) PPA Buyer will provide copies to Financing Party of annual forecasts of Metered Energy and monthly forecasts of Available Capacity provided by PPA Seller pursuant to Sections 4.4(a) and (b) of the Agenda Page 690
Exhibit L – 2
PPA; (v) PPA Buyer will provide copies to Financing Party of all invoices and supporting data provided by PPA Seller pursuant to Section 8.1, provided that any payment adjustments or subsequent reconciliations occurring after the date that is ten (10) days prior to the payment due date for a monthly invoice, including pursuant to Section 8.4, will be resolved solely between PPA Buyer and PPA Seller and therefore PPA Buyer will not be obligated to deliver copies of any communications relating thereto to Financing Party; and (vi) PPA Buyer will provide copies to Financing Party of any other information reasonably requested by Financing Party relating to Assigned Products.
(e) PPA Seller acknowledges that (i) Financing Party intends to immediately transfer title to any Assigned Products received from PPA Seller through one or more intermediaries such that all Assigned Products will be re-delivered to PPA Buyer, and (ii) Financing Party has the right to purchase receivables due from PPA Buyer for any such Assigned Products. To the extent Financing Party purchases any such receivables due from PPA Buyer, Financing Party may transfer such receivables to PPA Seller and apply the face amount thereof as a reduction to any Delivered Product Payment Obligation. (f) Financing Party may not assign its rights nor delegate its duties under this Agreement, or any part of such rights or duties, without the written consent of PPA Seller.
2. Assignment Early Termination.
(a) The Assignment Period may be terminated early upon the occurrence of any of the following:
(1) delivery of a written notice of termination by either Financing Party or PPA Buyer to each of the other Parties hereto;
(2) delivery of a written notice of termination by PPA Seller to each of Financing Party and PPA Buyer following Financing Party’s failure to pay when due any amounts owed to PPA Seller in respect of any Delivered Product Payment Obligation and such failure continues for one (1) Business Day following receipt by Financing Party of written notice thereof;
(3) delivery of a written notice by PPA Seller if any of the events described in [NOTE: Insert reference to bankruptcy event of default in PPA.] occurs with respect to Financing Party; or
(4) delivery of a written notice by Financing Party if any of the events described in [NOTE: Insert reference to bankruptcy event of default in PPA.] occurs with respect to PPA Seller.
(b) The Assignment Period will end as of the date specified in the termination notice, which date shall not be earlier than the end of the last day of the calendar month in which such notice is delivered if termination is pursuant to clauses (a)(1) or (a)(2) above. All Assigned Rights and Obligations shall revert from Financing Party to PPA Buyer upon the early termination of the Assignment Period, provided that (i) Financing Party shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to Financing Party prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether Agenda Page 691
Exhibit L – 3
arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period
(c) The Assignment Period shall automatically terminate upon the expiration or early termination of the PPA. All Assigned Rights and Obligations shall revert from Financing Party to PPA Buyer upon the expiration of or early termination of the PPA, provided that (i) Financing Party shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to Financing Party prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period. (d) All Assigned Rights and Obligations shall revert from Financing Party to PPA Buyer upon the expiration of or early termination of the Assignment Period; provided, (i) Financing Party shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to Financing Party prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period.
3. Notices. Any notice, demand, or request required or authorized by this Assignment Agreement to be given by one Party to another Party shall be delivered in accordance with Section [__] of the PPA and to the addresses of each of PPA Seller and PPA Buyer specified in the PPA. PPA Seller and PPA Buyer agree to notify Financing Party of any updates to such notice information. Notices to Financing Party shall be provided to the following address, as such address may be updated by Financing Party from time to time by notice to the other Parties:
Financing Party
_____________
_____________
Email: _____________
4. Miscellaneous. Sections [__] [Buyer’s Representations and Warranties]; Section [__] [Limitation of Liability and Exclusions of Warranties, Article [__] [Confidential Information], Sections [_] [Severability], [_] [Counterparts], [_] [Amendments] and [_] [No Agency, Partnership, Joint Venture or Lease, [__] [Mobile-Sierra], [__] [Facsimile or Electronic Delivery], and [__] Binding Effect] of the PPA are incorporated by reference into this Agreement, mutatis mutandis, as if fully set forth herein.
5. Governing Law, Jurisdiction, Waiver of Jury Trial
(a) Governing Law. This Assignment Agreement and the rights and duties of the parties under this assignment agreement will be governed by and construed, enforced and performed in accordance with the laws of the state of New York, without reference to any conflicts of laws provisions that would direct the application of another jurisdiction’s laws; provided, the authority of PPA Buyer to enter into and perform its obligations under this assignment agreement shall be determined in accordance with the laws of the State of California.
(b) Jurisdiction. Each party submits to the exclusive jurisdiction of (a) the courts Agenda Page 692
Exhibit L – 4
of the state of New York located in the Borough of Manhattan, (b) the federal courts of the United States of America for the Southern District of New York or (c) the federal courts of the United States of America in any other state.
(c) Waiver of Right to Trial by Jury. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to this assignment agreement.
[Remainder of Page Intentionally Blank]
Agenda Page 693
Exhibit L – 5
IN WITNESS WHEREOF, the Parties have executed this Assignment Agreement effective as of the date first set forth above.
PPA SELLER PPA BUYER
By: …………………………………….. By:
………………………………….
Name: Name:
Title: Title:
FINANCING PARTY
By: ………………………………………
Name:
Title:
Execution and delivery of the foregoing Assignment Agreement is hereby approved. [ISSUER]
By: …………………………………….
Name:
Title:
Agenda Page 694
Exhibit L - 6
Appendix 1
Assigned Rights and Obligations
PPA: The Power Purchase Agreement dated [___________] by and between PPA Buyer and PPA Seller.
“Assignment Period” means the period beginning on [___________] and extending until [___________]; provided, in no event shall the Assignment Period extend past the earlier of (i) the termination of the Assignment Period pursuant to Section 4 of the Assignment Agreement and (ii) the end of the delivery period under the PPA1
Assigned Product: [Describe and define]
Further Information: [Include, if any]2
Projected P99 Generation: The “Projected P99 Generation” is attached hereto on a monthly basis.
1 The Assignment Period must end no less than 18 months following the Assignment Period Start Date and no later than the end of the delivery period under the PPA.
2 To include transfer and settlement mechanics for RECs, as applicable.
Agenda Page 695
Exhibit M – 1
EXHIBIT M
[RESERVED]
Agenda Page 696
Exhibit N – 1
EXHIBIT N
NOTICES
PIVOT ENERGY PPA 28 LLC, a Colorado
limited liability company (“Seller”)
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA, a California
joint powers authority (“Buyer”)
All Notices: Legal
Street: 1750 15th Street, Suite 400
City: Denver, CO
Attn: Jackie Murphy, Chief Legal Officer
Phone: (888) 734-3033
Email: [email protected]
All Notices:
Street: 801 S Grand, Suite 400
City: Los Angeles, CA 90017
Attn: Chief Executive Officer
Phone: (213) 269-5870
E-mail: [email protected]
Reference Numbers:
Duns: NA
Federal Tax ID Number: TBD by Execution
Reference Numbers:
Duns:
Federal Tax ID Number:
Invoices: Accounting
Attn: Amy Nupen, Controller
Phone: (888) 734-3033
E-mail: [email protected]
Invoices:
Attn: CPA Settlements
Phone: (213) 269-5870
E-mail: [email protected]
Scheduling:
Attn: Angela Burke, Operations
Phone: (888) 734-3033
Email:
[email protected]
et
Scheduling: TBD
Attn: Day Ahead Scheduling
Phone: (817) 303-1104
Email: [email protected]
Confirmations:
Attn: Angela Burke, Operations
Phone: (888) 734-3033
Email: [email protected]
Confirmations:
Attn: Vice President, Power Supply
Phone: (323) 640-7662
E-mail: [email protected]
Payments: Accounting
Attn: Amy Nupen, Controller
Phone: (888) 734-3033
E-mail: [email protected]
Payments:
Attn: Vice President, Power Supply
Phone: (323) 640-7662
E-mail: [email protected]
Wire Transfer:
BNK: TBD
ABA: TBD
ACCT: TBD
Wire Transfer:
BNK: River City Bank
ABA: 121133416
ACCT: XXXXXX8042
Agenda Page 697
Exhibit O – 1
EXHIBIT O
FORM OF CONSENT TO COLLATERAL ASSIGNMENT
This Consent to Collateral Assignment (this “Consent”) is entered into among (i) Clean Power Alliance of Southern California, a California joint powers authority (“CPA”), (ii) [Name of Seller], a [Legal Status of Seller] (the “Project Company”), and (iii) [Name of Collateral Agent], a [Legal Status of Collateral Agent], as Collateral Agent for the secured parties under the Financing Documents referred to below (such secured parties together with their successors permitted under this Consent in such capacity, the “Secured Parties”, and, such agent, together with its successors in such capacity, the “Collateral Agent”). CPA, Project Company and Collateral Agent are hereinafter sometimes referred to individually as a “Party” and jointly as the “Parties”. Capitalized terms used but not otherwise defined in this Consent shall have the meanings ascribed to them in the PPA (as defined below).
RECITALS
The Parties enter into this Consent with reference to the following facts:
A. Project Company and CPA have entered into that certain Renewable Power Purchase Agreement, dated as of [Date] [List all amendments as contemplated by Section 3.4] (“PPA”), pursuant to which Project Company will develop, construct, commission, test and operate the Storage Units (the “Project”) and sell the Product to CPA, and CPA will purchase the Product from Project Company;
B. As collateral for Project Company’s obligations under the PPA, Project Company has agreed to provide to CPA certain collateral, which may include Performance Security and Development Security and other collateral described in the PPA (collectively, the “PPA Collateral”);
C. Project Company has entered into that certain [Insert description of financing arrangements with Lender], dated as of [Date], among Project Company, the Lenders party thereto and the Collateral Agent (the “Financing Agreement”), pursuant to which, among other things, the Lenders have extended commitments to make loans to Project Company; D. As collateral security for Project Company’s obligations under the Financing Agreement and related agreements (collectively, the “Financing Documents”), Project Company has, among other things, assigned all of its right, title and interest in, to and under the PPA and Project’s Company’s owners have pledged their ownership interest in Project Company (collectively, the “Assigned Interest”) to the Collateral Agent pursuant to the Financing Documents; and
E. It is a requirement under the Financing Agreement and the PPA that CPA and the other Parties hereto shall have executed and delivered this Consent.
AGREEMENT
Agenda Page 698
Exhibit O - 2
In consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties hereto hereby agree as follows:
SECTION 1. CONSENT TO ASSIGNMENT, ETC.
1.1 Consent and Agreement.
CPA hereby acknowledges:
(a) Notice of and consents to the assignment as collateral security to Collateral Agent, for the benefit of the Secured Parties, of the Assigned Interest; and (b) The right (but not the obligation) of Collateral Agent in the exercise of its rights and remedies under the Financing Documents, to make all demands, give all notices, take all actions and exercise all rights of Project Company permitted under the PPA (subject to CPA’s rights and defenses under the PPA and the terms of this Consent) and accepts any such exercise; provided, insofar as the Collateral Agent exercises any such rights under the PPA or makes any claims with respect to payments or other obligations under the PPA, the terms and conditions of the PPA applicable to such exercise of rights or claims shall apply to Collateral Agent to the same extent as to Project Company.
1.2 Project Company’s Acknowledgement.
Each of Project Company and Collateral Agent hereby acknowledges and agrees that CPA is authorized to act in accordance with Collateral Agent’s instructions, and that CPA shall bear no liability to Project Company or Collateral Agent in connection therewith, including any liability for failing to act in accordance with Project Company’s instructions.
1.3 Right to Cure.
If Project Company defaults in the performance of any of its obligations under the PPA, or upon the occurrence or non-occurrence of any event or condition under the PPA which would immediately or with the passage of any applicable grace period or the giving of notice, or both, enable CPA to terminate or suspend its performance under the PPA (a “PPA Default”), CPA will not terminate or suspend its performance under the PPA until it first gives written notice of such PPA Default to Collateral Agent and affords Collateral Agent the right to cure such PPA Default within the applicable cure period under the PPA, which cure period shall run concurrently with that afforded Project Company under the PPA. In addition, if Collateral Agent gives CPA written notice prior to the expiration of the applicable cure period under the PPA of Collateral Agent’s intention to cure such PPA Default (which notice shall include a reasonable description of the time during which it anticipates to cure such PPA Default) and is diligently proceeding to cure such PPA Default, notwithstanding the applicable cure period under the PPA, Collateral Agent shall have a period of sixty (60) days (or, if such PPA Default is for failure by the Project Company to pay an amount to CPA which is due and payable under the PPA other than to provide PPA Collateral, thirty (30) days, or, if such PPA Default is for failure by Project Company to provide PPA Collateral, ten (10) Business Days) from the Collateral Agent’s receipt of the notice of such PPA Default from CPA to cure such PPA Default; provided, (a) if possession of the Project is Agenda Page 699
Exhibit O - 3
necessary to cure any such non-monetary PPA Default and Collateral Agent has commenced foreclosure proceedings within sixty (60) days after notice of the PPA Default and is diligently pursuing such foreclosure proceedings, Collateral Agent will be allowed a reasonable time, not to exceed one hundred eighty (180) days after the notice of the PPA Default, to complete such proceedings and cure such PPA Default, and (b) if Collateral Agent is prohibited from curing any such PPA Default by any process, stay or injunction issued by any Governmental Authority or pursuant to any bankruptcy or insolvency proceeding or other similar proceeding involving Project Company, then the time periods specified herein for curing a PPA Default shall be extended for the period of such prohibition, so long as Collateral Agent has diligently pursued removal of such process, stay or injunction. Collateral Agent shall provide CPA with reports concerning the status of efforts to cure a PPA Default upon CPA’s reasonable request.
1.4 Substitute Owner.
Subject to Section 1.7, the Parties agree that if Collateral Agent notifies (such notice, a “Financing Document Default Notice”) CPA that an event of default has occurred and is continuing under the Financing Documents (a “Financing Document Event of Default”) then, upon a judicial foreclosure sale, non-judicial foreclosure sale, deed in lieu of foreclosure or other transfer following a Financing Document Event of Default, Collateral Agent (or its designee) shall be substituted for Project Company (the “Substitute Owner”) under the PPA, and, subject to Sections
1.7(b) and 1.7(c) below, CPA and Substitute Owner will recognize each other as counterparties under the PPA and will continue to perform their respective obligations (including those obligations accruing to CPA and the Project Company prior to the existence of the Substitute Owner) under the PPA in favor of each other in accordance with the terms thereof; provided, before CPA is required to recognize the Substitute Owner, the Substitute Owner must have demonstrated to CPA’s reasonable satisfaction that the Substitute Owner has financial qualifications and operating experience [TBD] (a “Permitted Transferee”). For purposes of the foregoing, CPA shall be entitled to assume that any such purported exercise of rights by Collateral Agent that results in substitution of a Substitute Owner under the PPA is in accordance with the Financing Documents without independent investigation thereof but shall have the right to require that the Collateral Agent and its designee (if applicable) provide reasonable evidence demonstrating the same.
1.5 Replacement Agreements.
Subject to Section 1.7, if the PPA is terminated, rejected or otherwise invalidated as a result of any bankruptcy, insolvency, reorganization or similar proceeding affecting Project Company, its owner(s) or guarantor(s), and if Collateral Agent or its designee directly or indirectly takes possession of, or title to, the Project (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure) (“Replacement Owner”), CPA shall, and Collateral Agent shall cause Replacement Owner to, enter into a new agreement with one another for the balance of the obligations under the PPA remaining to be performed having terms substantially the same as the terms of the PPA with respect to the remaining Term (“Replacement PPA”); provided, before CPA is required to enter into a Replacement PPA, the Replacement Owner must have demonstrated to CPA’s reasonable satisfaction that the Replacement Owner satisfies the requirements of a Permitted Transferee. For purposes of the foregoing, CPA is entitled to assume that any such purported exercise of rights by Collateral Agent that results in a Replacement Owner is in accordance with the Financing Documents without independent investigation thereof but shall Agenda Page 700
Exhibit O - 4
have the right to require that the Collateral Agent and its designee (if applicable) provide reasonable evidence demonstrating the same. Notwithstanding the execution and delivery of a Replacement PPA, to the extent CPA is, or was otherwise prior to its termination as described in this Section 1.5, entitled under the PPA, CPA may suspend performance of its obligations under such Replacement PPA, unless and until all PPA Defaults of Project Company under the PPA or Replacement PPA have been cured.
1.6 Transfer.
Subject to Section 1.7, a Substitute Owner or a Replacement Owner may assign all of its interest in the Project and the PPA and a Replacement PPA to a natural person, corporation, trust, business trust, joint venture, joint stock company, association, company, limited liability company, partnership, Governmental Authority or other entity (a “Person”) to which the Project is transferred; provided, the proposed transferee shall have demonstrated to CPA’s reasonable satisfaction that such proposed transferee satisfies the requirements of a Permitted Transferee.
1.7 Assumption of Obligations.
(a) Transferee.
Any transferee under Section 1.6 shall expressly assume in a writing reasonably satisfactory to CPA all of the obligations of Project Company, Substitute Owner or Replacement Owner under the PPA or Replacement PPA, as applicable, including posting and collateral assignment of the PPA Collateral. Upon such assignment and the cure of any outstanding PPA Default, and payment of all other amounts due and payable to CPA in respect of the PPA or such Replacement PPA, the transferor shall be released from any further liability under the PPA or Replacement PPA, as applicable.
(b) Substitute Owner.
Subject to Section 1.7(c), any Substitute Owner pursuant to Section 1.4 shall be required to perform Project Company’s obligations under the PPA, including posting and collateral assignment of the PPA Collateral; provided, the obligations of such Substitute Owner shall be no more than those of Project Company under the PPA.
(c) No Liability.
CPA acknowledges and agrees that neither Collateral Agent nor any Secured Party shall have any liability or obligation under the PPA as a result of this Consent (except to the extent Collateral Agent or a Secured Party is a Substitute Owner or Replacement Owner) nor shall Collateral Agent or any other Secured Party be obligated or required to (i) perform any of Project Company’s obligations under the PPA, except as provided in Sections 1.7(a) and 1.7(b) and to the extent Collateral Agent or a Secured Party is a Substitute Owner or Replacement Owner, or (ii) take any action to collect or enforce any claim for payment assigned under the Financing Documents. If Collateral Agent becomes a Substitute Owner pursuant to Section 1.4 or enters into a Replacement PPA, Collateral Agent shall not have any personal liability to CPA under the PPA or Replacement PPA and the sole recourse of CPA in seeking enforcement of such obligations against Collateral Agent shall be to the aggregate interest of the Secured Parties in the Project; Agenda Page 701
Exhibit O - 5
provided, such limited recourse shall not limit CPA’s right to seek equitable or injunctive relief against Collateral Agent, or CPA’s rights with respect to any offset rights expressly allowed under the PPA, a Replacement PPA or the PPA Collateral.
1.8 Delivery of Notices.
CPA shall deliver to Collateral Agent, concurrently with the delivery thereof to Project Company, a copy of each notice, request or demand given by CPA to Project Company pursuant to the PPA relating to (a) a PPA Default by Project Company under the PPA, (b) any claim regarding Force Majeure by CPA under the PPA, (c) any notice of dispute under the PPA, (d) any notice of intent to terminate or any termination notice, and (e) any matter that would require the consent of Collateral Agent pursuant to Section 1.11 or any other provision of this Consent. Collateral Agent acknowledges that delivery of such notice, request and demand shall satisfy CPA’s obligation to give Collateral Agent a notice of PPA Default under Section 1.3. Collateral Agent shall deliver to CPA, concurrently with delivery thereof to Project Company, a copy of each notice, request or demand given by Collateral Agent to Project Company pursuant to the Financing Documents relating to a default by Project Company under the Financing Documents.
1.9 Confirmations.
CPA will, as and when reasonably requested by Collateral Agent from time to time, confirm in writing matters relating to the PPA (including the performance of same by Project Company); provided, such confirmation may be limited to matters of which CPA is aware as of the time the confirmation is given and such confirmations shall be without prejudice to any rights of CPA under the PPA as between CPA and Project Company.
1.10 Exclusivity of Dealings.
Except as provided in Sections 1.3, 1.4, 1.8, 1.9 and 2.1, unless and until CPA receives a Financing Document Default Notice, CPA shall deal exclusively with Project Company in connection with the performance of CPA’s obligations under the PPA. From and after such time as CPA receives a Financing Document Default Notice and until a Substitute Owner is substituted for Project Company pursuant to Section 1.4, a Replacement PPA is entered into or the PPA is transferred to a Person to whom the Project is transferred pursuant to Section 1.6, CPA shall, until Collateral Agent confirms to CPA in writing that all obligations under the Financing Documents are no longer outstanding, deal exclusively with Collateral Agent in connection with the performance of CPA’s obligations under the PPA, and CPA may irrevocably rely on instructions provided by Collateral Agent in accordance therewith to the exclusion of those provided by any other Person.
1.11 No Amendments.
To the extent permitted by Laws, CPA agrees that it will not, without the prior written consent of Collateral Agent (not to be unreasonably withheld, delayed or conditioned) (a) enter into any material supplement, restatement, novation, extension, amendment or modification of the PPA (b) terminate or suspend its performance under the PPA (except in accordance with Section 1.3) or (c) consent to or accept any termination or cancellation of the PPA by Project Company.
SECTION 2. PAYMENTS UNDER THE PPA
Agenda Page 702
Exhibit O - 6
2.1 Payments.
Unless and until CPA receives written notice to the contrary from Collateral Agent, CPA will make all payments to be made by it to Project Company under or by reason of the PPA directly to Project Company. CPA, Project Company, and Collateral Agent acknowledge that CPA will be deemed to be in compliance with the payment terms of the PPA to the extent that CPA makes payments in accordance with Collateral Agent’s instructions.
2.2 No Offset, Etc.
All payments required to be made by CPA under the PPA shall be made without any offset, recoupment, abatement, withholding, reduction or defense whatsoever, other than that expressly allowed by the terms of the PPA.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF CPA
CPA makes the following representations and warranties as of the date hereof in favor of Collateral Agent:
3.1 Organization.
CPA is a joint powers authority and community choice aggregator duly organized and validly existing 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 . CPA has all requisite power and authority, corporate and otherwise, to enter into and to perform its obligations hereunder and under the PPA, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby.
3.2 Authorization.
The execution, delivery and performance by CPA of this Consent and the PPA have been duly authorized by all necessary corporate or other action on the part of CPA and do not require any approval or consent of any holder (or any trustee for any holder) of any indebtedness or other obligation of CPA which, if not obtained, will prevent CPA from performing its obligations hereunder or under the PPA except approvals or consents which have previously been obtained and which are in full force and effect.
3.3 Execution and Delivery; Binding Agreements.
Each of this Consent and the PPA is in full force and effect, have been duly executed and delivered on behalf of CPA by the appropriate officers of CPA, and constitute the legal, valid and binding obligation of CPA, enforceable against CPA in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).
3.4 No Default or Amendment.
Agenda Page 703
Exhibit O - 7
Except as set forth in Schedule A attached hereto: (a) Neither CPA nor, to CPA’s actual knowledge, Project Company, is in default of any of its obligations under the PPA; (b) CPA and, to CPA’s actual knowledge, Project Company, has complied with all conditions precedent to the effectiveness of its obligations under the PPA; (c) to CPA’s actual knowledge, no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either CPA or Project Company to terminate or suspend its obligations under the PPA; and (d) the PPA has not been amended, modified or supplemented in any manner except as set forth herein and in the recitals hereto.
3.5 No Previous Assignments.
CPA has no notice of, and has not consented to, any previous assignment by Project Company of all or any part of its rights under the PPA, except as previously disclosed in writing and consented to by CPA.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PROJECT COMPANY Project Company makes the following representations and warranties as of the date hereof in favor of the Collateral Agent and CPA:
4.1 Organization.
Project Company is a [Legal Status of Seller] duly organized and validly existing under the laws of the state of its organization, and is duly qualified, authorized to do business and in good standing in every jurisdiction in which it owns or leases real property or in which the nature of its business requires it to be so qualified, except where the failure to so qualify would not have a material adverse effect on its financial condition, its ability to own its properties or its ability to transact its business. Project Company has all requisite power and authority, corporate and otherwise, to enter into and to perform its obligations hereunder and under the PPA, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby.
4.2 Authorization.
The execution, delivery and performance of this Consent by Project Company, and Project Company’s assignment of its right, title and interest in, to and under the PPA to the Collateral Agent pursuant to the Financing Documents, have been duly authorized by all necessary corporate or other action on the part of Project Company.
4.3 Execution and Delivery; Binding Agreement.
This Consent is in full force and effect, has been duly executed and delivered on behalf of Project Company by the appropriate officers of Project Company, and constitutes the legal, valid and binding obligation of Project Company, enforceable against Project Company in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).
Agenda Page 704
Exhibit O - 8
4.4 No Default or Amendment.
Except as set forth in Schedule B attached hereto: (a) neither Project Company nor, to Project Company’s actual knowledge, CPA, is in default of any of its obligations thereunder; (b) Project Company and, to Project Company’s actual knowledge, CPA, has complied with all conditions precedent to the effectiveness of its obligations under the PPA; (c) to Project Company’s actual knowledge, no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either CPA or Project Company to terminate or suspend its obligations under the PPA; and (d) the PPA has not been amended, modified or supplemented in any manner except as set forth herein and in the recitals hereto.
4.5 No Previous Assignments.
Project Company has not previously assigned all or any part of its rights under the PPA.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF COLLATERAL AGENT Collateral Agent makes the following representations and warranties as of the date hereof in favor of CPA and Project Company:
5.1 Authorization.
The execution, delivery and performance of this Consent by Collateral Agent have been duly authorized by all necessary corporate or other action on the part of Collateral Agent and Secured Parties.
5.2 Execution and Delivery; Binding Agreement.
This Consent is in full force and effect, has been duly executed and delivered on behalf of Collateral Agent by the appropriate officers of Collateral Agent, and constitutes the legal, valid and binding obligation of Collateral Agent as Collateral Agent for the Secured Parties, enforceable against Collateral Agent (and the Secured Parties to the extent applicable) in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).
SECTION 6. MISCALLANEOUS
6.1 Notices.
All notices and other communications hereunder shall be in writing, shall be deemed given upon receipt thereof by the Party or Parties to whom such notice is addressed, shall refer on their face to the PPA (although failure to so refer shall not render any such notice or communication ineffective), shall be sent by first class mail, by personal delivery or by a nationally recognized courier service, and shall be directed (a) if to CPA or Project Company, in accordance with [Notice Section of the PPA] of the PPA, (b) if to Collateral Agent, to [Collateral Agent Name], [Collateral Agent Address], Attn: [Collateral Agent Contact Information], Telephone: [___], Fax: [___], and Agenda Page 705
Exhibit O - 9
(c) to such other address or addressee as any such Party may designate by notice given pursuant hereto.
6.2 Governing Law; Submission to Jurisdiction.
(a) THIS CONSENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND
THIS CONSENT AND ALL MATTERS ARISING OUT OF THIS CONSENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF CALIFORNIA WITHOUT REGARD TO ANY CONFLICTS OF LAWS
PROVISIONS THEREOF THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.
(b) All disputes, claims or controversies arising out of, relating to, concerning or pertaining to the terms of this Consent shall be governed by the dispute resolution provisions of the PPA. Subject to the foregoing, any legal action or proceeding with respect to this Consent and any action for enforcement of any judgment in respect thereof may be brought in the courts of the State of California or of the United States of America for the Central District of California, and, by execution and delivery of this Consent, each Party hereby accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts and appellate courts from any appeal thereof. Each Party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to its notice address provided pursuant to Section 6.1 hereof. Each Party hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Consent brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing herein shall affect the right of any Party to serve process in any other manner permitted by law.
6.3 Headings Descriptive.
The headings of the several sections and subsections of this Consent are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Consent.
6.4 Severability.
In case any provision in or obligation under this Consent shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
6.5 Amendment, Waiver.
Neither this Consent nor any of the terms hereof may (a) be terminated, amended, supplemented or modified, except by an instrument in writing signed by CPA, Project Company and Collateral Agent or (b) waived, except by an instrument in writing signed by the waiving Party.
6.6 Termination.
Agenda Page 706
Exhibit O - 10
Each Party’s obligations hereunder are absolute and unconditional, and no Party has any right, and shall have no right, to terminate this Consent or to be released, relieved or discharged from any obligation or liability hereunder until CPA has been notified by Collateral Agent that all of the obligations under the Financing Documents shall have been satisfied in full (other than contingent indemnification obligations) or, with respect to the PPA or any Replacement PPA, its obligations under such PPA or Replacement PPA have been fully performed.
6.7 Successors and Assigns.
This Consent shall be binding upon each Party and its successors and assigns permitted under and in accordance with this Consent, and shall inure to the benefit of the other Parties and their respective successors and assignee permitted under and in accordance with this Consent. Each reference to a Person herein shall include such Person’s successors and assigns permitted under and in accordance with this Consent.
6.8 Further Assurances.
CPA hereby agrees to execute and deliver all such instruments and take all such action as may be necessary to effectuate fully the purposes of this Consent.
6.9 Waiver of Trial by Jury.
TO THE EXTENT PERMITTED BY APPLICABLE LAWS, THE PARTIES HEREBY
IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS CONSENT OR ANY MATTER ARISING HEREUNDER. EACH PARTY FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
6.10 Entire Agreement.
This Consent and any agreement, document or instrument attached hereto or referred to herein integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings in respect to the subject matter hereof. In the event of any conflict between the terms, conditions and provisions of this Consent and any such agreement, document or instrument, the terms, conditions and provisions of this Consent shall prevail.
6.11 Effective Date.
This Consent shall be deemed effective as of the date upon which the last Party executes this Consent.
6.12 Counterparts; Electronic Signatures.
This Consent may be executed in one or more counterparts, each of which will be deemed to be an original of this Consent and all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this Consent and of signature pages by Agenda Page 707
Exhibit O - 11
facsimile transmission, Portable Document Format (i.e., PDF), or by other electronic means shall constitute effective execution and delivery of this Consent as to the Parties and may be used in lieu of the original Consent for all purposes.
[Remainder of Page Left Intentionally Blank.]
Agenda Page 708
Exhibit O - 12
IN WITNESS WHEREOF, the Parties hereto have caused this Consent to be duly executed and delivered by their duly authorized officers on the dates indicated below their respective signatures.
Pivot Energy PPA 28 LLC, a Colorado limited
liability company
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA,
a California joint powers authority.
By:
___________________________________
Tom Hunt
Authorized Representative
Date: ___________________________
By:
___________________________________
[Name]
[Title]
Date: ___________________________
TBD
[Legal Status of Collateral Agent].
By:
________________________________
[Name]
[Title]
Date: ___________________________
Agenda Page 709
Exhibit O - 13
SCHEDULE A
[Describe any disclosures relevant to representations and warranties made in Section 3.4] Agenda Page 710
Exhibit P – 1
EXHIBIT P
MATERIAL PERMITS
No. Permits
1 Building
2 Electrical
Agenda Page 711
Exhibit Q – 1
EXHIBIT Q
[RESERVED]
Agenda Page 712
Exhibit R – 1
EXHIBIT R
METERING DIAGRAM
To be determined during full engineering process and updated prior to COD Agenda Page 713
Exhibit S – 1
EXHIBIT S
SUPPLY CHAIN CODE OF CONDUCT
Buyer is committed to ensuring that the fundamental human rights of workers are protected, including addressing the potential risks of forced labor, child labor, servitude, human trafficking and slavery across our portfolio.
Our requirements and expectations for Seller’s supply chain are detailed below in our Supply Chain Code of Conduct (“Supply Chain Code”). Seller must comply with all applicable Laws and this Supply Chain Code, even when this Supply Chain Code exceeds the requirements of applicable Law.
These standards are derived from the United Nations Guiding Principles on Business and Human Rights, the Core Conventions of the International Labour Organization (“ILO”), including the ILO Declaration on Fundamental Principles and Rights at Work, the Solar Energy Industries Association Solar Industry Commitment to Environmental & Social Responsibility, and the Responsible Business Alliance Code of Conduct.
1. Freely Chosen Employment
Forced, bonded (including debt bondage) or indentured labor, involuntary or exploitative prison labor, slavery or trafficking of persons is not permitted. This includes transporting, harboring, recruiting, transferring, or receiving persons by means of threat, force, coercion, abduction or fraud for labor or services. There shall be no unreasonable restrictions on workers’ freedom of movement in the facility in addition to unreasonable restrictions on entering or exiting company provided facilities including, if applicable, workers’ dormitories or living quarters. All work must be voluntary, and workers shall be free to leave work at any time or terminate their employment without penalty if reasonable notice is given as per worker’s contract. Employers, agents, and sub-agents’ may not hold or otherwise destroy, conceal, or confiscate identity or immigration documents, such as government-issued identification, passports, or work permits. Employers can only hold documentation if such holdings are required by law. In this case, at no time should workers be denied access to their documents. Workers shall not be required to pay employers’ agents or sub-agents’ recruitment fees or other related fees for their employment. If any such fees are found to have been paid by workers, such fees shall be repaid to the worker.
2. Young Workers
Child labor is not to be used in any stage of manufacturing. The term “child” refers to any person under the age of 15, or under the age for completing compulsory education, or under the minimum age for employment in the country, whichever is greatest. Suppliers shall implement an appropriate mechanism to verify the age of workers. The use of legitimate workplace learning programs, which comply with all laws and regulations, is supported.
Workers under the age of 18 shall not perform work that is likely to jeopardize their health or safety, including night shifts and overtime. Suppliers shall ensure proper management of student workers through proper maintenance of student records, rigorous due diligence of educational partners, and protection of students’ rights in accordance with applicable Agenda Page 714
Exhibit S - 2
laws and regulations. Suppliers shall provide appropriate support and training to all student workers. In the absence of local law, the wage rate for student workers, interns, and apprentices shall be at least the same wage rate as other entry-level workers performing equal or similar tasks. If child labor is identified, assistance/remediation is provided.
3. Working Hours
Studies of business practices clearly link worker strain to reduced productivity, increased turnover, and increased injury and illness. Working hours are not to exceed the maximum set by local law. Further, a workweek should not be more than 60 hours per week, including overtime, except in emergency or unusual situations. All overtime must be voluntary.
Workers shall be allowed at least one day off every seven days.
4. Wages and Benefits
Compensation paid to workers shall comply with all applicable wage laws, including those relating to minimum wages, overtime hours and legally mandated benefits. In compliance with local laws, workers shall be compensated for overtime at pay rates greater than regular hourly rates. Deductions from wages as a disciplinary measure shall not be permitted. For each pay period, workers shall be provided with a timely and understandable wage statement that includes sufficient information to verify accurate compensation for work performed. All use of temporary, dispatch and outsourced labor will be within the limits of the local law.
5. Humane Treatment
There is to be no harsh or inhumane treatment including violence, gender-based violence, sexual harassment, sexual abuse, corporal punishment, mental or physical coercion, bullying, public shaming, or verbal abuse of workers; nor is there to be the threat of any such treatment. Disciplinary policies and procedures in support of these requirements shall be clearly defined and communicated to workers.
6. Non-Discrimination/Non-Harassment
Suppliers should be committed to a workplace free of harassment and unlawful discrimination. Companies shall not engage in discrimination or harassment based on race, color, age, gender, sexual orientation, gender identity and expression, ethnicity or national origin, disability, pregnancy, religion, political affiliation, union membership, covered veteran status, protected genetic information or marital status in hiring and employment practices such as wages, promotions, rewards, and access to training. Workers shall be provided with reasonable accommodation for religious practices. In addition, workers or potential workers should not be subjected to medical tests that could be used in a discriminatory way or otherwise in violation of applicable law. This was drafted in consideration of ILO Discrimination (Employment and Occupation) Convention (No.111).
7. Freedom of Association
In conformance with local law, Suppliers shall respect the right of all workers to form and join trade unions of their own choosing, to bargain collectively, and to engage in peaceful assembly as well as respect the right of workers to refrain from such activities. Workers and/or their representatives shall be able to openly communicate and share ideas and concerns with management regarding working conditions and management practices Agenda Page 715
Exhibit S - 3
without fear of discrimination, reprisal, intimidation, or harassment.
8. Restricted Jurisdictions
Supplier shall not manufacture or produce products in the Xinjiang Uyghur Autonomous Region of China, or knowingly procure goods and services mined, produced or manufactured in the same.
Agenda Page 716
1 AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT
This Amendment No. 1 (the “Amendment”) to the Agreement (as defined below), is dated as of [_____], 2022 (the “Amendment Effective Date”), between Clean Power Alliance of Southern California, a California joint powers authority (“Buyer”), and Radiant BMT, LLC, a California limited liability company (“Seller”). Seller and Buyer are each a “Party” and together the “Parties”.
RECITALS
A. The Parties entered into that certain Renewable Power Purchase Agreement, dated as of September 3, 2021 (as may be further amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Agreement”).
B. Seller has provided notice of facts or circumstances resulting in both cost increases and delays to the Milestone schedule, including delays in achieving Construction Start on or before the Guaranteed Construction Start Date and delays in achieving Commercial Operation on or before the Guaranteed Commercial Operation Date (“GCOD”).
C. The Parties intend to resolve all matters with respect to both project costs and milestone delays by entering into this Amendment, on the terms set forth herein.
D. This Amendment is subject to approval by the California Public Utilities Commission (“CPUC”).
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Definitions. Capitalized terms used and not defined in this Amendment have the respective meanings assigned to them in the Agreement.
2. Amendments to the Agreement.
(a) In the Guaranteed Construction Start Date section of the Cover Sheet, the date “8/1/23” is deleted and replaced with “8/1/24”.
(b) In the Guaranteed Commercial Operation Date section of the Cover Sheet, the date “12/31/23” is deleted and replaced with “12/31/24”.
(c) In the Milestones table on the Cover Sheet, the dates for the following Milestones are replaced with the dates indicated below:
ITEM 11 - ATTACHMENT 4
Agenda Page 717
2 Milestone Expected Date for
Completion
Expected Construction Start Date
Initial Synchronization 11/15/24
Expected Date of CAISO Commercial Operation 12/1/24
Expected Commercial Operation Date 12/31/24
(d) The Contract Price table on the Cover Sheet is replaced in its entirety with the following table:
Contract Year Contract Price ($/MWh)
1 – 15 /MWh (flat) with no
escalation
3. Condition Precedent to Amendment Effectiveness. Within ninety (90) days following the Amendment Effective Date, Buyer will submit this Amendment to the CPUC via an advice letter seeking CPUC Approval. “CPUC Approval” means a final and non-appealable order, decision, or disposition of the CPUC, without conditions or modifications unacceptable to the Parties, or either of them, which approves this Amendment in its entirety. CPUC Approval will be deemed to have occurred on the date that a CPUC order, decision, or disposition containing such findings becomes final and non-appealable. Seller agrees to actively support the advice letter, as reasonably requested by Buyer. If CPUC Approval of this Amendment is not obtained within one hundred eighty (180) days following the Amendment Effective Date, then this Amendment shall have no force or effect.
4. Limited Effect. Except as expressly provided in this Amendment, (a) all of the terms and provisions of the Agreement are and will remain in full force and effect and are hereby ratified and confirmed by the Parties, and (b) this Amendment will have no force and effect unless and until CPUC Approval is obtained. Without limiting the generality of the foregoing, the amendments contained herein will not be construed as an amendment to or waiver of any other provision of the Agreement or as a waiver of or consent to any further or future action on the part of either Party that would require the waiver or consent of the other Party. On and after the date of CPUC Approval, each reference in the Agreement to “this Agreement,” “the Agreement,” “hereunder,” “hereof,” “herein” or words of like import will mean and be a reference to the Agreement as amended by this Amendment.
5. Miscellaneous.
(a) This Amendment is governed by and construed in accordance with, the laws of the State of California, without regard to the conflict of laws provisions of such State.
Agenda Page 718
3 (b) This Amendment shall inure to the benefit of and be binding upon each of the Parties and each of their respective successors and permitted assigns. (c) The headings in this Amendment are for reference only and do not affect the interpretation of this Amendment.
(d) This Amendment may be executed in counterparts, each of which is deemed an original, but all of which constitutes one and the same agreement. Delivery of an executed counterpart of this Amendment electronically or by facsimile shall be effective as delivery of an original executed counterpart of this Amendment. (e) This Amendment constitutes the sole and entire agreement between the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.
(f) Each Party shall pay its own costs and expenses in connection with this Amendment (including the fees and expenses of its advisors, accounts and legal counsel). [Signature Page Follows]
Agenda Page 719
4 IN WITNESS WHEREOF, the Parties have executed this Amendment effective as of the date first written above.
“SELLER:”
Radiant BMT, LLC
By:
Printed Name: Todd Thorner
Title: Manager
“BUYER:”
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
By:
Printed Name: Ted Bardacke
Title: Chief Executive Officer
Agenda Page 720
Staff Report – Agenda Item 12
To: Clean Power Alliance (CPA) Board of Directors
From: Dr. Monique Edwards-Greer, Chief Administrative Officer Subject: CPA Salary Grades, Development of Retention Incentives, Contract Amendments for Chief Executive Officer and General Counsel, Employee Handbook Updates and Revisions
Date: December 1, 2022
RECOMMENDATION
In accordance with direction provided by the CPA Executive Committee, the following actions are recommended:
a. Adopt Salary Grades for CPA Employees, as contained in Attachment 1 b. Direct Staff to Develop Options for a Retention Incentive Program for Board Consideration in 2023
c. Approve and Authorize the Board Chair to Execute the Amended and Restated Employment Agreement with the Chief Executive Officer at a base annual salary of $450,000 with the terms as specified in Attachment 2 d. Approve and Authorize the Board Chair to Execute the Amended and Restated Employment Agreement with the General Counsel at a base annual salary of $413,919 with the terms as specified in Attachment 3
e. Adopt Resolution 22-12-045 (Attachment 4) modifying CPA’s Employee Handbook as specified in Attachment 5
BACKGROUND
CPA is an organization that delivers high levels of renewable energy and impactful programs at competitive rates by managing more than $1 billion in annual revenue and associated market risk, being nimble in an energy industry that is rapidly changing and subject to a complex political and regulatory environment, and by working with over 150 million rows of data in numerous large datasets generated by over one million customer Agenda Page 721
BOARD OF DIRECTORS ITEM 12
accounts monthly. It does this with a relatively small staff of specialized professionals; staffing costs in the current year, including benefits, are budgeted to be approximately
1.3% of total revenue. CPA also does not carry any long-term pension or defined-benefit retirement obligations.
To attract and retain staff, CPA mostly competes with the private sector. In addition to overall labor market pressures, a more recent nationwide push to accelerate the clean energy transition has significantly increased the competition for the specialized expertise which CPA has and seeks to retain and attract. While staff turnover trends are moving in the right direction – in 2022 CPA was able to hire 2.2 people for every departure compared to 1.9 people for every departure in 2021 – achieving the appropriate level of staffing remains a challenge.
This challenge is particularly acute at the middle and senior levels of the organization. In 2022, four staff at the Director level or above – including Natasha Keefer, VP of Power Supply – have departed for the private sector. Meanwhile, the organization has key operational positions at the Manager level and above that go unfilled for months, many times without CPA even being able to establish suitable candidate pools.
CPA’s salaries and benefits have not been comprehensively updated since September of 2019 (Benefits/Employee Handbook) and March of 2021 (Salary Grades, using 2020 market comparison data). CPA re-contracted with Mercer, a leading Human Resources and Compensation consultant, to benchmark its current salaries and Salary Grades against those in the market in which it competes for talent.1 The following two charts summarize the findings of the benchmarking effort. Broadly they show that CPA is barely competing for talent when compared against general industry and falling below the 50th percentile compared to total cash compensation (TCC) in the 1 In 2020, CPA contracted with Mercer and 3 other CCA’s to establish job architecture, do compensation and benefits benchmarking, and establish Salary Grades. The salary and benefits benchmarking study examined the competitiveness of CPA’s compensation and benefits against a range of industries and public sector entities. The focus of the study was on CPA’s competitive positioning in the areas of base salary, total cash compensation (TCC), and benefits. Compensation data was utilized from industry areas where CPA competes for talent and employee retention.
For the benefits portion of the study, a value comparison of all benefits was conducted in the areas of retirement/savings, health/group, paid leave, and life insurance and disability. Mercer also assisted CPA with designing a job architecture to define career streams, levels, and job families that differentiate types of careers, levels of accountability, and map employees to the new job architecture. Results of this engagement were presented to the CPA Board of Directors in March of 2021 in conjunction with Board approval of 2021 Salary Grades.
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BOARD OF DIRECTORS ITEM 12
Utilities/Energy sector. At the management level CPA is now below the 25th percentile in TCC.
In consultation with CPA’s Executive Committee and advised by Mercer, a package of recommendations is being presented to the Board for consideration. The package is designed to help with retention and recruitment, update policies and procedures to align with legal changes and the new realities of the post-Covid labor market, and engage in Agenda Page 723
BOARD OF DIRECTORS ITEM 12
additional study to consider whether additional enhancements in the area of retention are warranted.
2023 SALARY GRADES
CPA contracted with Mercer to establish the Board-approved 2021 salary grades and earlier this year re-engaged with Mercer to examine the competitiveness of CPA’s compensation and benefits. Compensation data from Mercer-published salary survey sources were utilized from two distinct categories with whom CPA competes for talent and employee retention: general industry and energy/utilities. The focus of the study was on CPA’s competitive positioning in the areas of total cash compensation (TCC).2 Mercer benchmarked 27 CPA positions and compared CPA’s pay to market data. The market data is customized not only to CPA’s size and location, but also to each employee’s role. To align CPA salary grades for market competitiveness, Mercer recommended the proposed 2023 Salary Grades. The new grades incorporate two years of COLA (6.0% awarded in 2022 and the projected 7.5% in 2023) and a 2.6% market adjustment factor that was calculated by comparing CPA salaries to Mercer’s extensive salary database. Additionally, Mercer recommended aligning executive position salary ranges (grades 115-117) based on TCC, like is done for all other salary grades.3 Since retention of key management personnel is of prime importance at this time, Mercer indicated that resetting Executive salaries to at least the midpoint of their salary grades on January 1, 2023, which would occur in lieu of the scheduled COLA for these positions, was the best immediate course of action.
2 TCC = base salary plus short-term incentives. 3 In 2021, Salary Grades 115 – 117 were set using just base salary, not TCC.
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BOARD OF DIRECTORS ITEM 12
RETENTION INCENTIVE DEVELOPMENT
Although a full benefits valuation analysis was not completed by Mercer this year, Mercer’s 2020 study data showed that CPA had a competitive benefits package overall, except when compared to public sector organizations that often have large benefit packages – mostly defined benefit retirement plans – to make up for their lack of incentive pay. CPA has neither a defined benefit retirement plan nor an incentive pay plan. This puts CPA at a disadvantage in retaining employees, particularly in this competitive labor market. Staff is prepared to work with Mercer to develop Retention Incentive options for the Board to consider next year. Examples of Retention Incentives could range from incentive pay that would be available after a certain period of tenure at CPA to student loan forgiveness or other educational benefits that are particularly suited for CPA’s millennial-dominated employee base.
CONTRACT AMENDEMENTS FOR CEO AND GENERAL COUNSEL
Two of CPA’s top employees, the CEO and General Counsel, have direct 5-year contracts with the Board that were executed in November of 2021. Both of them had strong performance reviews by the Executive Committee last month and have played a key role in overall organizational success.
Inflationary and market pressures, as well as a move towards looking at TCC when benchmarking management salary levels within the CCA sector, have resulted in the CEO’s salary falling towards the bottom of CCA CEO salaries, in line with CCAs that are either one-fourth the size or in start-up mode rather than with peer organizations. The proposed contract amendment would bring CPA’s CEO salary back into the top third of Agenda Page 725
BOARD OF DIRECTORS ITEM 12
the CCA CEO list, commiserate with the size, influence, and managerial responsibility at CPA. See the comparison chart below.
The General Counsel’s current contract was structured to gradually bring her salary into line with the market over the course of a five-year period. The proposed amendment to her contract is designed to align with changing market conditions and to avoid her falling behind her peers within CPA.
UPDATES AND REVISIONS TO EMPLOYEE HANDBOOK
Updates and revisions to the Employee Handbook are being proposed for three primary purposes: (1) to revise benefits related to vacation and parental leave that recognize the longevity of some CPA employees and affirm CPA’s status as a family-friendly employer and; (2) to ensure compliance with current laws and laws effective January, to clarify certain administrative procedures, and to promote consistency with language.
CCA CEO Total Cash Compensation
(as of Jan 2023)
Annual Revenue
(FY 21/22)
East Bay Community Energy $500,000
($425,000 base, $50,000 retention,
~$25,000 other cash benefits)
$555 million
Silicon Valley Clean Energy $457,000
($425,000 base, ~$32,000 other
cash benefits)
$243 million
(FY20/21)
MCE
(Formerly Marin Clean Energy)
$425,130 $487 million
Central Coast Community Energy $425,000 $288 million
(FY 20/21)
Peninsula Clean Energy $425,000 $238 million
Clean Power Alliance $397,000* $867 million
Sonoma Clean Power $395,000 $187 million
(FY 20/21)
San Diego Community Power $375,000 N/A
(Start Up)
*Assumes 7.5% COLA on Jan 1, 2023 per current contract
Agenda Page 726
BOARD OF DIRECTORS ITEM 12
Vacation and Parental Leave Changes Summary
Key proposed changes to CPA’s vacation policy include:
• An administrative change to combine current vacation (80 hours) and PTO (40 hours) awards in the first year of employment into a single program • Award 40 additional hours upon beginning the year of the employee’s 2nd, 4th, and 6th years of service
• Cap vacation accrual at 2x the annual award amount, up from the current 1.5x • Introduce a limited vacation cash-out program of up to 80 hours annually, provided that cash-out does not reduce overall vacation balance to below 120 hours.
The vacation accrual cap plus limited cash-out proposal attempts to balance CPA’s operational needs with the desire that employees take their vacation to rejuvenate and avoid burnout, while also limiting the fiscal impact to CPA of staff accumulating large vacation balances.
Key proposed changes to CPA’s parental leave policy include:
• Providing up to 12 weeks of fully Paid Parental Leave, up from the current 8 weeks. Employees will no longer be required to apply for State Disability and/or Paid Family Leave (“PFL”) wage replacement benefits during an employee’s PFL to access CPA benefits
• Employees may still apply for PFL benefits after the initial 12 weeks and take unpaid leave, or use other CPA leave benefits to cover the difference between PFL benefits and their full salary.
• Eligibility criteria will add fostering a child to the eligibility criteria for Paid Parental Leave.
Compliance with Current/Future Legal Requirements and Administrative Clarifications Key proposed changes in this category include:
• Updating titles (CEO, Director of Human Resources/People & Culture) • Acknowledgment of remote work/telecommuting
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BOARD OF DIRECTORS ITEM 12
• Clarifying decision-making/appeal process with regards to discipline and potential termination to remove CEO from having to rule on all appeals • Definition of “Essential Duties” that employees are required to complete during the December 25 – January 1 period when the office is closed • Formal incorporation of a new federal holiday (e.g., Juneteenth) • Additional language required for CA harassment policies • Allowing Sick and Bereavement leave for a “designated person” (does not have to be blood-related)
• Modification of language for legally required meal and rest periods • Modifications to reflect recent amendments to the California Family Rights Act (CFRA) and to highlight distinctions between CFRA and FMLA • Inclusion of required and recommended language in the lactation break section.
FISCAL IMPACT
The proposed action on salary grades and contract amendments would increase salary costs for the current fiscal year by approximately $270,000 and is within the FY 22/23 staffing budget. FY 22/23 staffing costs are lower than budget due in part to slower than expected hiring and staff turnover. This proposed action would increase annualized staffing costs by approximately $550,000, or 3.5% of the expected FY 23/24 staffing budget.
The fiscal impact of the proposed action to change the vacation accrual maximum from
1.5x the annual vacation allocation to 2x the annual allocation is unknown. At the upper bound, in the unlikely event that all staff were to accumulate an additional 0.5x of the annual allocation by not taking vacation, CPA would potentially accrue up to an additional $575,000 of vacation expense based on currently budgeted staffing levels.
The vacation expense associated with vacation days that would be currently eligible for cash-out has already been accrued and cash-outs, were they to occur, would not result in an additional expense to CPA. The future, "steady state" amount of cash-outs will be dependent on employee choice from year-to-year and will be incorporated into future staffing budgets once the steady state can be determined.
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BOARD OF DIRECTORS ITEM 12
ATTACHMENTS
1. Salary Grades for CPA Employees
2. Amended CEO Employment Contract (Redline)
3. Amended General Counsel Employment Contract (Redline)
4. Resolution 22-12-045 Approving Modifications to CPA’s Employee Handbook and Benefits
5. December 2022 Employee Handbook (Redline)
Agenda Page 729
ITEM 12 – ATTACHMENT 1
Agenda Page 730
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BOARD OF DIRECTORS ITEM 12 – ATTACHMENT 2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT – CLEAN POWER
ALLIANCE
EXECUTIVE DIRECTOR CHIEF EXECUTIVE OFFICER THEODORE
BARDACKE
THIS EMPLOYMENT AGREEMENT (“Employment Agreement”) is entered into by and between the Clean Power Alliance of Southern California, also known as “CPA” and Theodore Bardacke, an individual (“Employee”). CPA and Employee are sometimes collectively referred to herein as the “Parties.” This Agreement is effective as of January 1, 2022 (“Effective Date”).
RECITALS
This Employment Agreement is entered into based on the following facts, understandings, and intentions of the Parties:
A. CPA is a Community Choice Aggregation Program (“CCA Program”) established pursuant to California Public Utilities Code Section 366.2(c)(12) with 32 member counties and cities (“Member Agencies”). These Member Agencies are signatories to the Clean Power Alliance of Southern California Joint Powers Agreement (the “JPA Agreement”) which serves as the operative document in the implementation, administration, and operation of the CCA Program.
B. Section 5.5 of the JPA Agreement provides that the CPA Board of Directors (“Board”) shall appoint an Executive Director Chief Executive Officer for the CPA, who shall be responsible for the day-to-day operation and management of the CPA and the CCA Program and provides for the exercise of powers and authority by the Executive Director Chief Executive Officer. C. Employee possesses the skill, experience, ability, background, and knowledge to continue to perform the duties and services provided by this Agreement as the Executive Director Chief Executive Officer of CPA.
D. CPA desires to extend Employee’s term of employment on the terms and conditions provided by this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals and mutual promises and conditions in this Agreement, it is agreed as follows:
1. Duties, Authority, and Title of the Executive DirectorChief Executive Officer. CPA shall employ Employee as the Executive Director Chief Executive Officer of CPA, with the full power and authority to perform all of the duties and authority of the Executive DirectorChief Executive Officer, as provided in the JPA Agreement, and as authorized or delegated by the Board from time to time. The Executive Director will be referred to as CPA’s “Chief Executive Officer” and may utilize this title for all purposes related to the performance of Employee’s duties.
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BOARD OF DIRECTORS ITEM 12 – ATTACHMENT 2
2. Term. Unless earlier terminated as provided for in this Agreement, the term of this Agreement shall be for five (5) years, commencing on the Effective Date (the “Term”).
3. Compensation. Starting on the Effective Date, CPA shall pay Employee an annual base salary of $369,600 and starting on January 1, 2023, CPA shall pay Employee an annual base salary of $450,000 paid on CPA’s normal paydays, subject to legally permissible or required deductions. Employee’s salary is compensation for all hours worked and for all services under this Agreement. Employee shall be exempt from overtime pay provisions of California law (if any) and federal law.
4. Salary Adjustments. Employee’s salary shall be adjusted annually to reflect cost of living increases offered to all CPA employees and any future compensation incentives that may be authorized by the Board of Directors. provided that any increase to Employee’s salary shall not be less than 3% for each calendar year during the Term. 5. Benefits. During the Term of this Agreement, Employee shall be entitled to all benefits offered to CPA employees, including but not limited to vacation, group insurance plans, incentive or retirement programs, paid time off, sick leave, and expense reimbursement.
Employee acknowledges that CPA may establish additional benefit programs or the benefits offered to CPA employees may be modifyied, reduced, or eliminated any benefit plan or program at the discretion of the Board, in accordance with applicable law.
Employee shall accrue vacation leave at the rate of 160 hours (4 weeks) each year. Except as otherwise provided in this Agreement, vacation time shall be subject to any CPA vacation policy applicable to employees generally.
6. Expenses. Throughout the Term, and subject to the availability of funds, CPA shall reimburse Employee for budgeted and reasonable out-of-pocket expenses incurred in connection with CPA’s business, including reasonable expenses for travel, food, and lodging while away from home, subject to such policies as CPA may from time-to-time reasonably establish for its employees. Additionally, Employee shall be entitled to reimbursement for Board-approved or budgeted for, continuing education expenses, attendance at conventions, conferences, or membership in professional organizations.
7. Annual Performance Evaluation. The Board shall conduct an Annual Performance Review of the Executive DirectorChief Executive Officer. This review will be completed prior to the end of each 12 months of the Term of the Agreement. The Annual Performance Review will include both an evaluation of the Executive Director’s Chief Executive Officer’s performance during the prior 12 months and the setting of priorities and goals for the upcoming 12 months.
8. Restrictions on Outside Business Activities and Conflicts. Throughout the Term, Employee shall devote Employee’s full energies, interest, abilities, and productive time to the performance of the Agreement and shall not, without approval of the Executive Committee of the Board, tender to other entities or individual’s services of any kind for compensation or engage in any business activity. In addition, Employee shall not engage in any activity, for compensation or otherwise, that would interfere or conflict with the performance of Employee’s duties under this Agreement, including activities that may reasonably be expected to conflict with Employee’s duties. Without limitation to the foregoing, a conflict includes, but is not limited to, a conflict of interest under the Agenda Page 732
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BOARD OF DIRECTORS ITEM 12 – ATTACHMENT 2
California Political Reform Act, Government Code Section 1090, or other state or federal laws.
9. Termination of Agreement.
a. Termination by CPA. Employee is employed at the pleasure of the Board and is thus an at-will employee. The Board may terminate this Agreement and the employment relationship at any time with or without cause, and with or without prior notice.
b. Termination on Resignation. Employee may terminate the Agreement by giving CPA at least sixty (60) days (or more if practical) prior written notice. CPA may accelerate the effective date of resignation to any date after the receipt of written notice or, upon request, may reduce the notice period, at its discretion. c. Termination on Death. If Employee dies during the term of this Agreement, this Agreement shall be terminated on the date of Employee’s death. All warrants or checks for accrued salary, accrued vacation, or other benefits or items shall be released to the person designated in writing by Employee pursuant to Government Code Section 53245 or, if no designation is made, to Employee’s estate.
10. Severance. CPA shall pay Employee for all services through the effective date of termination. Employee shall have no right to any additional compensation or payment, except as provided below and except for any accrued and vested benefits. a. If CPA terminates this Agreement (thereby terminating Employee’s employment) without cause, CPA shall pay (a) Employee a lump sum severance benefit equal to six (6) months of Employee’s then-applicable base salary; and (b) for three (3) months of an executive recruiter or placement services of the Employee’s choosing.
b. If CPA terminates this Agreement (thereby terminating Employee’s employment) with cause, Employee shall not be entitled to any severance or executive recruiter or placement services. As used in this Agreement, cause shall mean termination due to:
i. A conviction, plea bargain, judgment, or adverse determination by any court, the State Attorney General, a grand jury, or the California Fair Political Practices Commission involving any felony, intentional tort, crime of moral turpitude, or violation of any statute or law constituting misconduct in office, misuse of public funds, or conflict of interest;
ii. Conviction of a felony;
iii. Conviction of a misdemeanor arising out of Employee’s duties under this Agreement and involving a willful or intentional violation of law; iv. Willful abandonment of duties;
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BOARD OF DIRECTORS ITEM 12 – ATTACHMENT 2
v. A pattern of repeated, willful, and intentional failure to carry out materially significant and legally constituted policy decisions of the Board made by the Board as a body or persistent and willful violation of properly established rules and procedures; and vi. Any other action or inaction by Employee that materially and substantially harms CPA’s interests, materially and substantially impedes or disrupts the performance of CPA, or that is detrimental to employee safety or public safety.
c. If Employee terminates this Agreement (thereby terminating Employee’s employment), Employee shall not be entitled to any severance or executive recruiter or placement services.
d. Any other term of this Agreement notwithstanding, the maximum severance that Employee may receive under this Agreement shall not exceed the limitations provided in Government Code Sections 53260 - 53264, or other applicable law. Further, in the event Employee is convicted of a crime involving an abuse of office or position, Employee shall reimburse the CPA for any paid leave or cash settlement (including severance), as provided by Government Code Sections 53243 - 53243.4.
11. Reimbursement to CPA required. The following limitations apply to CPA’s obligation to Employee pursuant to paragraph 10 above:
a. Paid Leave. Pursuant to Cal. Government Code Section 53243, in the event the Employee is placed on paid leave pending an investigation, Employee shall reimburse CPA if Employee is subsequently convicted of a crime of moral turpitude or that constitutes “abuse of office or position,” as that is defined by Government Code Section 53242.4;
b. Legal Defense. Pursuant to Government Code Section 53243.1, in the event CPA pays for Employee’s legal criminal defense, Employee shall fully reimburse such funds to CPA if Employee is subsequently convicted of a crime of moral turpitude that constitutes “abuse of office or position;”
c. Severance. Pursuant to Government Code Section 53243. 2, if this Agreement is terminated, any cash settlement related to the termination that Employee may receive from CPA, including any severance paid under Paragraph 10 must be fully reimbursed to CPA if Employee is subsequently convicted of a crime of moral turpitude or that constitutes “abuse of office or position.”
12. Miscellaneous Provisions.
a. Integration. Subject to all applicable Government Code Sections, this Agreement contains the entire agreement between the Parties and supersedes all prior oral and written agreements, understandings, commitments, and Agenda Page 734
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BOARD OF DIRECTORS ITEM 12 – ATTACHMENT 2
practices between the Parties before the date of this Agreement. No amendments to this Agreement may be made except in writing signed by the Parties.
b. Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of the Agreement shall nevertheless remain in full force and effect. If any provision is held invalid or unenforceable with respect to particular circumstances it shall nevertheless remain in full force and effect in all other circumstances.
c. Notices. Any notices required or permitted under this Agreement must be in writing and shall be deemed effective on the earlier of personal delivery (including personal delivery by facsimile or similar means intended to provide actual delivery on the same day) or the third day following mailing by first class mail to the recipient. Notice to CPA shall be addressed to the Secretary of the Board at the CPAs then principal place of business. Notice to Employee shall be addressed to Employee’s home address, as then shown in CPA’s files. d. Agreement is Binding. This Agreement shall be binding upon and inure to the benefit of CPA, its successors and assigns, and shall be binding upon Employee, Employee’s administrators, executors, legatees, heirs, and assigns.
e. Waiver. The failure of either Party to insist on strict compliance with any of the terms, covenants, or conditions of this Agreement by the other Party shall not be deemed a waiver of that term, covenant, or condition, nor a waiver or relinquishment of any right or power.
IN WITNESS WHEREOF, the Parties have executed this Agreement.
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
By
Julian Gold, Board Chair Date
By __________________________________
Theodore Bardacke
_____________________
Date
APPROVED AS TO FORM:
By
Nancy Whang, General Counsel
Agenda Page 735
BOARD OF DIRECTORS ITEM 12 – ATTACHMENT 3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT - CLEAN POWER
ALLIANCE
GENERAL COUNSEL NANCY WHANG
THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into by and between the Clean Power Alliance of Southern California, also known as “CPA” and Nancy Whang, an individual (“Employee”). CPA and Employee are sometimes collectively referred to herein as the “Parties” and individually as “Party”. This Agreement is effective as of January 1, 2022 (“Effective Date”).
RECITALS
This Employment Agreement is entered into based on the following facts, understandings, and intentions of the Parties:
A. CPA is a Community Choice Aggregation Program (“CCA Program”) established pursuant to California Public Utilities Code Section 366.2(c)(12) with 32 member counties and cities (“Member Agencies”). These Member Agencies are signatories to the Clean Power Alliance of Southern California Joint Powers Agreement (the “JPA Agreement”) which serves as the operative document in the implementation, administration, and operation of the CCA Program.
B. Section 4.4 of the JPA Agreement authorize the Board to retain legal counsel and Article III, Section 7 of the Board-adopted Bylaws designate the General Counsel as the attorney for and legal advisor to the Board and CPA.
C. Employee possesses the skill, experience, ability, background, and knowledge to perform the duties and services provided by this Agreement as the General Counsel of CPA.
E. CPA desires to extend Employee’s term of employment on the terms and conditions provided by this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals and mutual promises and conditions in this Agreement, it is agreed as follows:
1. Duties and Authority of the General Counsel. CPA shall employ Employee as the General Counsel of CPA with the full power and authority to perform general legal services to the CPA. Employee will perform and carry out in a good and professional manner, the duties and responsibilities of the position of General Counsel, as specified in the Bylaws and as otherwise directed by the CPA Board of Directors (“Board”).
In performance of duties, Employee will devote time, ability, and attention equivalent to the professional effort necessary to fulfill Employee’s duties. Employee’s duties will Agenda Page 736
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require flexibility in work hours and location of work, including attendance at Board or committee meetings.
Employee shall perform the duties required hereunder in accordance with all local, state, and federal laws applicable to CPA operations.
2. Term. Unless earlier terminated as provided for in this Agreement, the term of this Agreement shall be for five (5) years, commencing on the Effective Date (the “Term”).
3. Compensation. Commencing on the Effective Date, CPA shall pay Employee an annual base salary of $287,500 and starting on January 1, 2023, CPA shall pay Employee an annual base salary of $413,919 paid on CPA’s normal paydays, subject to legally permissible or required deductions. Employee’s salary is compensation for all hours worked and for all services under this Agreement. Employee shall be exempt from overtime pay provisions of California law (if any) and federal law. Starting on January 1, 2023, Employee’s base salary (a) shall be increased by 5% each calendar year; and (b) shall be adjusted to reflect general cost of living adjustments, if any, that are offered to CPA employees and any future compensation incentives that may be authorized by the Board of Directors. 4. Benefits. During the Term of this Agreement, Employee shall be entitled to all benefits offered to CPA employees, including but not limited to group insurance plans, incentive or retirement programs, vacation, paid time off, sick leave, and expense reimbursement. CPA may establish additional benefit programs and may modify, reduce, or eliminate any benefit plan or program in its discretion, in accordance with applicable law.
In addition, during the Term and subject to the availability of funds, CPA shall pay or reimburse Employee for the following:
a. Professional Organizations. For reasonable, and necessary membership dues in professional organizations, including the California State Bar. b. Continuing Education Expenses. For budgeted and reasonable expenses incurred for continuing education expenses, including attendance at conventions and conferences where continuing education credits are offered. c. Software Access. Access to software services at the level necessary for the completion of legal research and duties.
5. Evaluation of Performance. The Executive Committee of the Board shall conduct an Annual Performance Review of the General Counsel. This review will be completed prior to the end of each 12 months of the Term of the Agreement. The Annual Performance Review will include both an evaluation of the General Counsel’s performance during the prior 12 months and the setting of priorities and goals for the upcoming 12 months. In conjunction with the Annual Performance Review, the Executive Committee may award Employee a merit increase in an amount not to exceed 3% of Employee’s base salary.
6. Restrictions on Outside Business Activities and Conflicts. Throughout the Term, Employee shall devote Employee’s full energies, interest, abilities, and productive time to the performance of the Agreement and shall not, without CPA’s prior written consent, tender to other entities or individual’s services of any kind for compensation or engage in any other business activity. In addition, Employee shall not engage in any activity, for compensation or otherwise, that would interfere or conflict with the performance of Employee’s duties under Agenda Page 737
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this Agreement, including activities that may reasonably be expected to conflict with the General Counsel duties. Employee shall comply with the laws of the State of California regarding conflicts of interest, including but not limited to Government Code section 1090, the Political Reform Act, or other state or federal laws.
7. Termination of Agreement.
d. Termination by CPA. Employee is employed at the pleasure of the Board and is thus an at-will employee. The Board may terminate this Agreement and the employment relationship at any time with or without cause, and with or without prior notice.
e. Termination on Resignation. Employee may terminate the Agreement by giving CPA at least sixty (60) days (or more if possible) prior written notice. CPA may accelerate the effective date of resignation to any date after the receipt of written notice or, upon request, may reduce the notice period, at its discretion. f. Termination on Death. If Employee dies during the term of this Agreement, this Agreement shall be terminated on the date of Employee’s death. All warrants or checks for accrued salary, accrued vacation or other items shall be released to the person designated in writing by Employee pursuant to Government Code Section 53245 or, if no designation is made, to Employee’s estate.
8. Severance. CPA shall pay Employee for all services through the effective date of termination.
Employee shall have no right to any additional compensation or payment, except as provided below and except for any accrued and vested benefits applicable to all CPA employees generally. g. If CPA terminates this Agreement (thereby terminating Employee’s employment) without cause, CPA shall (i) pay Employee a lump sum severance benefit equal to six (6) months of Employee’s then applicable base salary; and (ii) pay the premiums for Employee’s health coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA) for one (1) calendar year following termination or until Employee secures full-time employment with a new employer offering health coverage, whichever is sooner. In the event of the latter, Employee shall notify CPA within 30 days of any such full-time employment.
h. If CPA terminates this Agreement (thereby terminating Employee’s employment) with cause, Employee shall not be entitled to any severance. As used in this Agreement, cause shall mean termination due to:
i. A conviction, plea bargain, judgment, or adverse determination by any court, the State Attorney General, a grand jury, or the California Fair Political Practices Commission involving any felony, intentional tort, crime of moral turpitude, or violation of any statute or law constituting misconduct in office, misuse of public funds, or conflict of interest; ii. Conviction of a felony;
iii. Conviction of a misdemeanor arising out of Employee’s duties under this Agreement and involving a willful or intentional violation of law; Agenda Page 738
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iv. Willful abandonment of duties;
v. A pattern of repeated, willful, and intentional failure to carry out materially significant and legally constituted policy decisions of the Board made by the Board as a body or persistent and willful violation of properly established rules and procedures; and
vi. Any other action or inaction by Employee that materially and substantially harms CPA’s interests, materially and substantially impedes or disrupts the performance of CPA, or that is detrimental to employee safety or public safety.
i. If Employee terminates this Agreement (thereby terminating Employee’s employment), Employee shall not be entitled to any severance. j. Any other term of this Agreement notwithstanding, the maximum severance that Employee may receive under this Agreement shall not exceed the limitations provided in Government Code Sections 53260 - 53264, or other applicable law.
Further, in the event Employee is convicted of a crime involving an abuse of office or position, Employee shall reimburse the CPA for any paid leave or cash settlement (including severance), as provided by Government Code Sections 53243 - 53243.4.
9. Reimbursement to CPA required.
The following limitations apply to CPA’s obligation to Employee pursuant to paragraph 8 above:
k. Paid Leave. Pursuant to Government Code Section 53243, in the event the Employee is placed on paid leave pending an investigation, Employee shall reimburse CPA if Employee is subsequently convicted of a crime of moral turpitude or that constitutes “abuse of office or position,” as that is defined by Government Code Section 53242.4;
l. Legal Defense. Pursuant to Government Code Section 53243.1, in the event CPA pays for Employee’s legal criminal defense, Employee shall fully reimburse such funds to CPA if Employee is subsequently convicted of a crime of moral turpitude that constitutes “abuse of office or position;”
m. Severance. Pursuant to Government Code Section 53243.2, if this Agreement is terminated, any cash settlement related to the termination that Employee may receive from CPA, including any severance paid under Paragraph 8 must be fully reimbursed to CPA if Employee is subsequently convicted of a crime of moral turpitude or that constitutes “abuse of office or position.”
10. Miscellaneous Provisions.
n. Integration. Subject to all applicable Government code sections, this Agreement contains the entire agreement between the Parties and supersedes all prior oral and written agreements, understandings, commitments, and practices between the Parties before the date of this Agreement. No amendments to this Agreement may be made except in writing signed by the Parties.
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o. Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of the Agreement shall nevertheless remain in full force and effect. If any provision is held invalid or unenforceable with respect to particular circumstances it shall nevertheless remain in full force and effect in all other circumstances.
p. Notices. Any notices required or permitted under this Agreement must be in writing and shall be deemed effective on the earlier of personal delivery (including personal delivery by facsimile or similar means intended to provide actual delivery on the same day) or the third day following mailing by first class mail to the recipient. Notice to CPA shall be addressed to the Secretary of the Board at the CPA’s then principal place of business. Notice to Employee shall be addressed to Employee’s home address, as then shown in CPA’s files.
q. Agreement is Binding. This Agreement shall be binding upon and inure to the benefit of CPA, its successors, and assigns, and shall be binding upon Employee, Employee’s administrators, executors, legatees, heirs, and assigns. r. Waiver. The failure of either Party to insist on strict compliance with any of the terms, covenants, or conditions of this Agreement by the other Party shall not be deemed a waiver of that term, covenant, or condition, nor a waiver or relinquishment of any right or power.
IN WITNESS WHEREOF, the Parties have executed this Agreement.
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
By Date
Julian Gold, Board Chair
By Date_______________
Nancy Whang
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BOARD OF DIRECTORS ITEM 12 – ATTACHMENT 4
RESOLUTION NO. 22-12-045
RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN POWER ALLIANCE
OF SOUTHERN CALIFORNIA TO APPROVE MODIFICATIONS TO THE CPA
EMPLOYEE HANDBOOK
THE BOARD OF DIRECTORS OF CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA HEREBY RESOLVES AS FOLLOWS:
WHEREAS, Clean Power Alliance of Southern California (formerly known as Los Angeles Community Choice Energy Authority) (“Clean Power Alliance” or “CPA”) was formed on June 27, 2017;
WHEREAS, on August 16, 2018, the Board of Directors (“Board”) adopted and approved Resolution 18-012 approving the original version of the Employee Handbook and on September 5, 2019, adopted and approved Resolution 19-09-017 approving revisions to the Employee Handbook;
WHEREAS, the Employee Handbook is one representation of CPA’s desire to be a leader in fair and equitable treatment of employees, to foster an open, collaborative, and dynamic working environment, and to recognize the valuable resource that CPA staff represent;
WHEREAS, the Employee Handbook serves as a guide and provides information about working conditions, benefits, practices, and other policies regarding employment with CPA. The Employee Handbook does not cover all issues regarding employment, and is not intended to be a binding contract; WHEREAS, the Board intends and desires to have the Employee Handbook reviewed from time to time and to supplement, amend, or rescind any policies or portion of the Employee Handbook as is necessary or beneficial to CPA; WHEREAS, a revision of the Employee Handbook is now necessary and beneficial to reflect CPA’s current and anticipated operational situation; and, WHEREAS, the revised Employee Handbook has been presented to the Board and attached to the December 1, 2022 Board Agenda.
NOW, THEREFORE, BE IT RESOLVED, BY THE BOARD OF DIRECTORS OF THE CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA that the revised Employee Handbook, as presented to the Board or in a substantially similar form, is hereby approved effective December 1, 2022, and a copy will be distributed to each CPA employee and any future employees upon hire.
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IT IS FURTHER DETERMINED, AFFIRMED, AND ORDERED that any and all acts authorized pursuant to this Resolution and performed prior to the passage of this Resolution are hereby ratified and approved;
APPROVED AND ADOPTED this ____ day of __________ 2022.
Julian Gold, Chair
ATTEST:
Gabriela Monzon, Secretary
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CLEAN POWER ALLIANCE
OF SOUTHERN CALIFORNIA
EMPLOYEE HANDBOOK
September 2019December 2022
ITEM 12 - ATTACHMENT 5
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Welcome to Clean Power Alliance of Southern California
Dear CPA Employee:
Congratulations on your employment with Clean Power Alliance of Southern California (CPA)! We at CPA share great pride and passion in the work we do, and we’re glad you’re joining us to help advance our mission for the benefit of our customers, our environment, and our communities.
As an employee of CPA, you are our most valuable resource. With your talent and abilities, as well as those of the rest of our team, we plan to continue fostering an open, cooperative and dynamic environment. It is our hope that you find CPA a rewarding place to work.
Information regarding the procedures, practices, policies and benefits of CPA are contained within this handbook and we encourage you to review carefully and become familiar with them. CPA’s policies may change from time to time, and employees are expected to comply with the most current provisions.
If you would like further information or have questions about any of the information outlined in this handbook, please feel free to reach out to me or your Supervisor to discuss.
On behalf of the CPACPA Board of Directors and staff, I extend a warm welcome to our team!
Sincerely,
Ted Bardacke
Executive DirectorChief Executive Officer
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This Handbook supersedes any prior versions of handbooks. If it contains policies or procedures that are inconsistent with other statements of policy or procedure, those in the Handbook will govern unless expressly stated otherwise. The Handbook is not all-inclusive but is intended to provide general information to assist you in the performance of your duties. It is intended to comply with all applicable federal, state, and local laws, which may change from time to time. If any provision of the Handbook conflicts with such laws, the Company CPA will follow applicable law.
The Company CPA may revise, interpret, delete, or add to any policies, procedures, work rules or benefits stated in this Handbook or in any other document at any time, in its sole discretion (other than the at-will policy specified herein). As such, the policies (other than the at-will policy specified herein), procedures and benefits summarized in the Handbook will be reviewed and revised from time to time. If the Handbook does not address a particular policy or procedure, the CompanyCPA reserves the right to modify the Handbook in the future or provide separate policies and procedures. Written changes to this Handbook will be distributed or posted after they are made. Your input into the review process is important to us, and we encourage you to discuss your any thoughts or questions about the Handbook with Human Resources.
This Handbook contains only guidelines and does not create, and may not be used as evidence of, a contract or guarantee of employment for any definite length of time or as a guarantee or contract for any benefits or working conditions. Rather, all employees are at-will, meaning the employee or the Company CPA may terminate the employment relationship for any reason, at any time, with or without cause or prior notice, unless a written agreement signed by the Chief Executive Officer provides otherwise. Please note the Company CPA also may change the terms and conditions of your employment at any time (other than the at-will policy specified herein), with or without cause and with or without prior notice, all in accordance with applicable law.
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TABLE OF CONTENTS
Section 1: Background Page 5
Section 2: Introduction & General Provisions Page 5
Section 3: Employment Status Page 13
Section 4: Employment Policies & Procedures Page 17
Section 5: Office Hours & Timekeeping Page 20
Section 6: Leave Page 24
Section 7: Employment Records Page 39
Section 8: General Workplace Rules Page 41
Section 9: License, Memberships, Training & Conferences Page 44 Section 10: Pay Page 46
Section 11: Employee Conduct Page 46
Section 12: Employee Benefits Page 50
Section 13: Layoff / Separation from Employment Page 51 Section 14: Salary Disclosure Page 52
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SECTION 1: CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
BACKGROUND
The Clean Power Alliance of Southern California (“CPA”) was formed in 2017 as a Jjoint Ppowers Aauthority (JPA), administering a Community Choice Aggregation (“CCA”) in Southern California. The CPACPA is governed by the Board of Directors (“Board”) with voting membership consisting of elected officials, and their alternates, from the member agencies who make up the JPA.
A CCA, authorized in California under AB 117 and SB 790, allows local governments, including counties and cities, to purchase wholesale power supplies for resale to their residents and businesses as an alternative to electricity provided by an Investor Owned Utility, which for CPA members is Southern California Edison (“SCE”). Electricity procured to serve customers continues to be delivered over SCE’s transmission and distribution system.
CPA exists to serve the residential and non-residential customers ces and businesses located within its member communities. CPA’s specific objectives are to provide its customers with a reliable supply of electricity, at competitive electric rates, sourced from a generation portfolio with lower greenhouse gas emissions and higher renewable content than the incumbent utility.
SECTION 2: INTRODUCTION & GENERAL PROVISIONS
A. Introduction. This Employee Handbook (“Handbook”) is intended to serve as a guide to many questions employees may have about their employment with the CPACPA. It is not intended to cover all issues regarding employment, and it is not intended to be a binding contract.
A.B. At-Will Employment. CPA employees are generally employed on an at-will basis.
Employment at-will means that the employment relationship may be Terminated with or without cause and with or without advance notice at any time by the employee or the CPACPA. Nothing in this Handbook shall limit the right to Terminate at-will employment.
No person manager, supervisor or employee of the CPACPA has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will terms except for . Only the Executive Director Chief Executive Officer of the CPACPA. Any has the authority to make any such agreement shall only be binding , which is binding only if it is in writing and signed by the Executive Director Chief Executive Officer.
B.C. Applicability to Employees with Separate Agreements. Except where there is an express conflict in terms, the provisions of this Handbook shall apply to each employee who holds a separate employment agreement with the CPACPA. In the event of such a conflict in terms, the terms of the separate employment agreement will control.
C.D.Employee Responsibility. This Handbook is designed to acquaint employees with the CPACPA and provide information about working conditions, employee benefits, and other employment policies. Employees are required to read, understand, and comply with all provisions of this Handbook.
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D.E. Amendment and Revision of Handbook. No employee handbook can anticipate every circumstance or question about policy. The need may arise, and the CPACPA reserves the right to revise, supplement, or rescind any policies or portion of the Handbook from time to time as it deems appropriate, in its sole and absolute discretion. Employees will be notified of changes to the Handbook as they occur. The only recognized revisions of these policies are those that are issued in writing by the Executive DirectorChief Executive Officer and if revisions are material or non-administrative, , with approval of the Board as appropriate.
E.F.Distribution of Handbook. A copy of this Handbook will be distributed to each CPA employee. Newly hired employees will receive a copy upon hire. An employee with questions about provisions in this Handbook may direct them to the Human Resources managerDirector, Human Resources.
F. Prior Policies. The terms and provisions of this Handbook adopted on September 5, 2019 December 1, 2022 by Resolution of the Board supersedes the prior Handbook adopted on July 10, 2018September 5, 2019 by Resolution. However, in no event shall this Handbook supersede any other prior resolution, policy, rule or regulation that has been adopted by the CPACPA’s Board of Directors.
G. Changes to the Law. When any local, state, or federal ordinance, regulation, or law that is incorporated in the Handbook or upon which the Handbook relies is amended through legislative action or is deemed to have been amended by judicial decision, the Handbook shall be deemed amended in conformance with those amendments.
H. Severability. If any section, subsection, sentence, clause, or phrase of the Handbook is found to be illegal by a court of competent jurisdiction, such findings shall not affect the validity of the remaining portions of the Handbook.
Definitions
A. Applicant. A person who has applied for employment with CPA.
B. Chief Administrative Officer. The A person holding the title of Chief Administrative Officer (CAO) of the CPACPA or the Chief Executive Officer’s designee performing the CAO responsibilities.
C. Chief Executive Officer. The Chief Executive Officer of CPA or the Chief Executive Officer’s designee, which shall be the Chief Administrative Officer.
B.D. Close relatives. Husband, wife, father, mother, father-in-law, mother-in law, grandfather, grandmother, son, son-in-law, daughter, daughter-in law, uncle, aunt, nephew, niece, brother, sister, brother-in-law, sister, sister-in-law, step relatives and cousins.
C.E. Date of Hire. The date that an employee was originally hired by the CPACPA. An employee’s date of hire does not change except through termination, layoff, resignation, or retirement.
D.F. Day or Days. Calendar day(s) unless otherwise stated.
E.G. Demotion. The movement of an employee from one position to another position having a lower maximum rate of pay.
H. Director, Human Resources. The Director, Human Resources or a person designated to perform the responsibilities related to human resources is also commonly referred to as Director, People and Culture of the CPA at CPA. In the absence of a staff member who has been assigned the responsibilities of Director, Human Resources, the CAO Chief Agenda Page 748
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Administrative Officer or in the CAO’s absence, the Chief Executive Officer’s designee shall act in that capacity.
F.I. Discipline. The punishment practice or counseling of an employee by written reprimand, demotion, suspension, reduction of pay, termination, or other punitive measures.
G. Executive Director. The Executive Director of the CPACPA or the Executive Director’s designee, which designation shall be in writing by the Executive Director.
H.J.Exempt Employees. Employees whose duties and responsibilities allow them to be “exempt” from overtime pay provisions as provided by the Fair Labor Standards Act (“FLSA”) and any applicable state wage and hour laws. Exempt employees include those who qualify for the executive, administrative or professional exemptions under California law.
I.K.Full-Time Employee. A regular, budgeted position in which an employee of the CPACPA is regularly scheduled to work at least 40 hours per workweek. Employees in full-time positions are eligible for CPA’s benefit package, subject to terms, conditions, and limitations of each benefit program, plus legally mandated benefits, such as worker’s compensation, and paid sick leave.
J. Human Resources Manager. The Human Resources manager of the CPA. In the absence of a staff member who has been assigned the responsibilities of a Human Resources manager the Executive Director shall act in that capacity.
K.L.Interns. Employees gaining supervised practical experience in a professional field. Interns are not eligible for any benefits listed in this Handbook, whether compensated or not, unless otherwise required by law.
L.M. Layoff. The separation of employees from the active work force due to organizational changes, lack of work or funds or to abolishment of a position by the CPACPA Board.
M.N. Non-Exempt Employees. An individual who is not exempt from the overtime provisions of the FLSA, California Labor Code, and Industrial Wage Orders and is, therefore, entitled to overtime pay for all hours worked beyond 40 in a workweek or eight (8) in a work day. Nonexempt employees may be paid on a salary, hourly or other basis.
N.O.Part-time Employee. A regular, budgeted position requiring an employee to work a usual schedule of less than 40 hours per workweek. Employees in part-time positions receive legally mandated benefits and may be eligible for some benefits where expressly specified in this Handbook.
O.P. Introductory Period. All new and rehired employees work in an “introductory” status for the first three (3) months after their date of hire. This Introductory Period gives the Supervisor the opportunity to determine the ability with which the employee performs the employee’s job.
It also provides the employee with the opportunity to decide if the employee is satisfied with the position. CPA reserves the right to extend the duration of the Introductory Period when such an extension is determined appropriate in CPA’s sole and absolute discretion. Either CPA or the employee can terminate the employment relationship at any time during or after the Introductory Period, with or without cause and without any advance notice.
P. Promotion. The movement of an employee from one position to another position with a higher maximum rate of pay.
Q. Reduction in Pay. A temporary or permanent lowering of an employee’s rate of pay.
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R. Rejected/Rejection. The termination by CPA of a new employee who has not successfully completed the Introductory Period for a position.
S. Resignation. The voluntary termination of employment by an employee.
T. Supervisor. The individual to whom an employee directly reportsdesignated as the administrative head of the relevant department of the employee within CPA.
Typically, this individual will conduct the Introductory and Performance reviews.
U. Suspension. The temporary separation from service of an employee, without pay, for disciplinary purposes.
V. Temporary Employee. An employee hired with the understanding that their employment will not continue beyond a stated date or beyond completion of a specified project or projects. Temporary employees will generally not be employed for more than six (6) months. Temporary employees are not eligible for benefits covered in this employee handbook, other than those required by law or as stipulated in writing by the Executive DirectorChief Executive Officer. An employee will not change from temporary to any other employee status or classification simply because of the length of time spent as a temporary employee. The status of a temporary employee may change only if the employee is notified of the change in writing by Human Resources.
W. Termination/Terminate. The permanent separation of an employee from employment with the CPACPA, with or without cause.
X. Vacancy. A position that is unfilled but has been included in the current budget.
Equal Employment Opportunity
1. Equal Employment Opportunity. The CPACPA is an equal employment opportunity employer and will consider all qualified applicants for employment or advancement opportunities without regard to race, religion, creed, color, sex, sexual orientation, actual or perceived gender, gender identity, gender expression, national origin, ancestry, citizenship status, uniformed service member status, marital or domestic partner status, pregnancy or pregnancy-related condition, age, medical condition, genetic information, family medical history, physical disability, mental or intellectual disability, political activity, or perception that an individual has any of these protected characteristics, or because of association with an individual in a protected category or any other consideration made unlawful by federal, state, or local laws. Employment-related decisions will be based on merit, qualifications, and abilities. Equal employment opportunity will be extended to all persons in all aspects of the employer-employee relationship, including recruitment, hiring, training, promotion, transfer, discipline, layoff and termination.
2. Disabled Applicants and Employees. CPA has a commitment to ensure equal opportunities for disabled applicants and employees. Every reasonable effort will be made to provide an accessible work environment for such employees and applicants. Employment practices (e.g., hiring, training, testing, transfer, promotion, compensation, benefits, and discharge) will not discriminate unlawfully against disabled applicants or employees. CPA provides employment-related reasonable accommodations to qualified individual with disabilities within the meaning of the California Fair Employment and Housing Act (“FEHA”) and the Americans with Disabilities Act (“ADA”).
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1. Request for accommodation. An applicant or employee who desires a reasonable accommodation in order to perform essential job functions shall submit a written request to the Human Resources managerDirector, Human Resources identifying in reasonable detail: a) the job-related functions at issue; and b) the desired accommodation(s).
Reasonable accommodation may include, but is not limited to job restructuring, reassignment to a vacant position for which the employee is qualified and making facilities accessible.
2. Reasonable documentation of disability. Following receipt of the request, a Human Resources managerDirector, Human Resources may require additional information, such as reasonable documentation of the existence of a disability or additional explanation as to the effect of the disability on the individual’s ability to perform the essential job functions, but will not require disclosure of diagnosis or genetic history.
3. Interactive process. The CPACPA will engage in the interactive process, as defined by the FEHA and ADA, to determine whether an applicant or employee is able to perform the essential job functions of the position. During this process, CPA will examine potential reasonable accommodations that will make it possible for the employee or applicant to so perform. Such interactive process may include meeting(s) with the employee or applicant, the CPACPA, and, if requested by CPA, the employee or applicant’s health care provider.
4. Case-by-case determination. The CPACPA shall determine, in its sole discretion, whether reasonable accommodations(s) can be made, and the type of reasonable accommodations(s) to provide. The CPACPA will not provide an accommodation that would pose an undue hardship upon it or that is not required by law. The CPACPA will inform the employee or applicant of any decisions made under this section in writing.
Proof of Right to Work
A. Under federal law, all new employees must complete INS Form I-9 and produce original documentation establishing their identity and right to work in the United States. New hires may establish their identity and right to work by:
1. Providing documentation that singularly establishes both their identity and employment authorization (identified “List A” documents on the INS Form I-9), or
2. Providing documentation that separately establishes their identity (“List B” documents on the INS Form I-9) and their employment authorization (“List C” documents on the INS Form I-9).
B. Documentation must be produced prior to or on day of commencement of employment with the CPACPA. Required documentation must be presented to the Human Resources managerDirector, Human Resources, who will be responsible for processing the documents.
C. Employees who are re-hired must provide proper documentation if the prior INS Form I-9 has expired or is about to expire. Authorization documents will be copied and placed with the employee’s INS Form I-9 in a file separate from the employee’s personnel file.
Code of Ethics and Conflicts of Interest
A. Code of Ethics. Employees have an obligation to conduct their work responsibilities within guidelines that prohibit actual or potential conflicts of interest. An employee shall contact the Agenda Page 751
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General Counsel or General Counsel designee with a question regarding the existence of an actual or potential conflict of interest. This Code of Ethics is not intended to supersede or invalidate any statute, resolution, ordinance, or regulation.
1. Applicability. This Code of Ethics shall apply to all employees.
2. Substantive requirements.
a. All employees shall uphold the Constitution of the United States and the Constitution of the State of California.
b. All employees shall comply with all applicable provisions of California law governing public employees and officials, particularly the California Political Reform Act and its provisions on gifts and conflicts of interest. c. No employee shall engage in any activity which results in any of the following:
(i) Use of time, facilities, equipment, supplies, or other resources of the CPACPA for the private advantage or gain for oneself or another; (ii) Use of official information that is not available to the general public for private advantage or gain for oneself or another; and
(iii) Use of the authority of their position with the CPACPA to discourage, restrain, or interfere with any person who chooses to report potential violations of any law or regulation.
d. No employee shall directly or indirectly accept:
(i) Private advantage, remuneration, or reward for oneself or another as a result of the prestige or influence of the office, employment, or appointment the employee holds with the CPACPA;
(ii) Financial consideration from any source other than the CPACPA for the performance of the employee’s official duties; or
(iii) Employment from private interests, when such employment is incompatible with the proper discharge of their official duties or may result in a conflict of interest.
e. No employee shall give special treatment or consideration to any individual or group beyond that available to any other individual or group. f. No employee shall discriminate against or harass a citizen or co-worker on the basis of race, religion, creed, color, sex, sexual orientation, actual or perceived gender, gender identity, gender expression, national origin, ancestry, citizenship status, uniformed service member status, marital or domestic partner status, pregnancy or pregnancy-related condition, age, medical condition, genetic information, family medical history, physical disability, mental or intellectual disability, political activity, or perception that an individual has any of these protected characteristics, or because of association with an individual in a protected category or any other consideration made unlawful by federal, state, or local laws.
g. All employees shall conduct themselves in a courteous and respectful manner at all times during the performance of their duties.
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h. All employees shall complete mandatory Harassment Prevention Training.
3. Enforcement. Any employee found to be in violation of this Code of Ethics shall be subjected to appropriate Discipline.
Outside Employment, Enterprise, or Activity. No employee may engage in any outside employment, enterprise, or activity that is inconsistent, incompatible, in conflict with, or adverse to the employee’s employment or the employee’s ability to perform the employee’s duties and responsibilities, including performance of overtime work and emergency duties, or any other aspect of CPA operations. Employees are required to make requests for approval for outside employment in writing by completing a required Outside Employment Approval Request form and submitting it to their Supervisor. The form must include all outside employment in which an employee is already engaged or in which they intend to engage, so that CPA may assess whether such outside employment conflicts with the employee’s CPA employment. Regardless of the assessment, all Outside Employment Approval Request forms shall be maintained in the employee’s personnel file.
1. An employee’s outside employment, enterprise, or activity will be prohibited when any of the following are present:
a. It involves the receipt or acceptance by the employee of any money or other consideration from anyone other than the CPACPA for the performance of an act which the employee would be required or expected to render in the regular course or hours of the employee’s employment with the CPACPA or as part of the employee’s duties as an CPA employee;
b.It involves the use for private gain or advantage of CPA time, facilities, equipment and/or supplies; or the badge, prestige, or influence of the employee’s CPA employment;
c. It involves the performance of an act, in other than the employee’s capacity as a CPA employee, which may later be subject directly or indirectly to the control, inspection, review, audit, or enforcement of any other officer or employee of the CPACPA; or
d.It involves time or scheduling demands as would render performance of the employee’s duties as a CPA employee less efficient.
2. Conflict determination. When a request for approval of outside employment is submitted to the Supervisor, they shall determine whether the employee’s outside employment conflicts with the performance of the employee’s duties and shall advise the employee of that determination in writing.
3. Appeal of conflict determination. An employee may appeal the conflict decision to the Executive DirectorChief Executive Officer within fourteen (14) Days from the employee’s receipt of the conflict determination by filing a written appeal with the Executive DirectorChief Executive Officer. The employee shall specify the grounds on which the employee challenges the conflict decision and shall attach all relevant documentary evidence to the appeal. The Executive DirectorChief Executive Officer shall schedule a meeting with the employee to discuss the decision. The Executive DirectorChief Executive Officer shall issue a written decision to the employee within Agenda Page 753
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fourteen (14) Days from the date of the meeting. The decision of the Executive DirectorChief Executive Officer shall be final.
4. Disciplinary action. Any employee who fails to act upon notice of a conflict of interest or who fails to file an Outside Employment Request may be subject to disciplinary action up to and including termination.
C. Contracts and Conflicts of Interest. No CPA employee can be financially interested in any contract made by the employee in the employee’s official capacity, or by any board of which the employee is a member.
1. An actual or potential conflict of interest occurs when an employee can influence a decision that may result in a personal gain for that employee or for a member of their immediate family as a result of the CPACPA’s decisions and/or business dealings. For the purposes of this Handbook, immediate family includes persons related by blood or marriage or, whose relationship with the employee is similar to that of persons who are related by blood or marriage.
2. No presumption of conflict is created by the mere existence of a relationship with outside firms. However, if an employee has any influence on transactions involving purchases, contracts, or leases, it is imperative that the employee discloses to employee’s Supervisor as soon as possible the existence of any actual or potential conflict of interest so that safeguards can be established to protect all parties.
3. AB 1234 Ethics training is required for all CPA employees within thirty (30) Days of hire and every two (2) years thereafter. Upon completion of training, a copy of the certificate of completion must be provided to the Human Resources managerDirector, Human Resources. On-line training is offered at www.fpcc.ca.gov. However, other courses may be available. See the Human Resources managerDirector, Human Resources for other options.
4. CPA employees required to complete California Fair Political Practices Commission Form 700 (Statement of Economic Interests) will be designated by the Fair Political Practices Commission (“FPPC”) adopted Conflict of Interest Code for the CPACPA.
D. Conduct During the Workday. During the workday, employees are expected to devote their full time in the performance of their assigned duties. Any approved outside work, part-time job, hobbies, or personal business must be performed during off duty hours. Off duty hours include unpaid lunch break periodslegally-required meal and rest periods, but do not include other rest or break periods during which the employee continues to receive pay.
E. Political Activity. Employees may not engage in political activity during working hours or while on CPA property.
F. Solicitations of Political Contributions. No employee may knowingly, directly or indirectly, solicit a political contribution during working hours, on CPA premises or using CPA property, equipment, or email. For purposes of this section, “contribution” means a payment, a forgiveness of a loan, a payment of a loan by a third party, or an enforceable promise to make a payment except to the extent that full and adequate consideration is received, unless it is clear from the surrounding circumstances that it is not made for political purposes.
G. Reporting Suspected Misconduct
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1.Reporting to CPA. The CPACPA encourages all employees and interested third parties to
report alleged misconduct to the Human Resources managerDirector, Human Resources, or to a third party designated by CPA to intake complaints, to ensure that all allegations are thoroughly investigated, and suitable action(s) are taken where appropriate. Corrective action, up to and including termination, will be taken where warranted for employees.
2. External reporting. Reports regarding suspected waste, fraud, and abuse may be directed to a third party designated by CPA to intake complaints, which may be anonymous or to the Public Integrity Division of the Los Angeles County District Attorney’s Office, 320 West Temple Street, Room 766, Los Angeles, California 90012, (213) 974-6501.
3. Confidentiality and anonymous complaints. Reports made to or about the CPACPA regarding suspected misconduct will be treated as confidential information, to the extent possible, and can be communicated anonymously. However, it is important that the reporting individual understand and be aware of the following:
a. The CPACPA discourages the use of anonymous complaints because anonymity in the complaint procedure may compromise the CPACPA’s ability to complete a thorough investigation.
b. Should the CPACPA learn of the complaining party’s identity, the CPACPA cannot guarantee that the complaining party’s identity will remain confidential where the CPACPA determines that disclosure of information is necessary to complete the investigation.
4. Protection against retaliation.
a. Any employee who makes a complaint under this policy or otherwise engages in “whistleblowing” (through internal reporting or reports made to government agencies) is protected against adverse employment actions for raising allegations of misconduct. An employee is protected even if the allegations prove to be incorrect or unsubstantiated when made in good faith.
b. Employees who participate or assist in an investigation will also be protected.
SECTION 3: EMPLOYMENT STATUS
Introductory Periods
A. Objective of Introductory Period. The Introductory Period shall be regarded as a part of the selection process and shall be used for closely observing the employee’s work, to determine if the employee can successfully perform the assigned duties of the employee’s position and the CPACPA’s rules and policies, and to help ensure the employee effectively adjusts to the employee’s position.
B. Introductory Period. All Full-Time and Part-Time Employee positions shall be subject to an Introductory Period of three (3) months, unless the employee is notified in writing of an extension in accordance with section C of this Section 3.
C. Extension of Introductory Period. Written notice shall be provided as soon as reasonably possible to the employee if an Introductory Period is to be extended. The Introductory Period, Agenda Page 755
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upon approval of the Human Resources managerDirector, Human Resources may be extended by the Executive DirectorChief Executive Officer up to a maximum of six (6) months, before expiration of the initial three (3) month period. In addition, the use of any leave of absence in excess of fifteen (15) days shall cause the employee’s Introductory Period to be extended automatically by the length of the leave(s) of absence. Advance written notice that the Introductory Period is being extended and the length of the extension shall be provided to the employee.
D. Rejection of Employee on Introductory Period. During the initial Introductory Period, an employee may be terminated at any time, with or without cause, and with or without advance notice. Notification of Rejection will be served on the employee. The employee will have no right of appeal of the employee’s failure to complete the Introductory Period or of the decision to terminate employment.
E. At-Will Employment. By completing the Introductory Period, an at-will employee is not guaranteed continued employment for any term. The employee will continue to be employed at-will, such that the employment relationship may be Terminated with or without cause and with or without advance notice at any time by the employee or the CPACPA.
Background Checks
Although CPA does not provide, accept or consider applications for employment on a discriminatory basis, it reserves the right to condition all offers of employment on the successful clearance of a background check administered by an independent third-party service. Background clearance shall include satisfactory evidence of identity and legal eligibility to work in the United States. Any falsification of material information provided by any candidate for employment (or omission of material information) may result in a denial of an offer of employment or, if the employee has already been hired, immediate termination of employment.
Performance Evaluations
A. In General
1. The provisions in this section regarding performance evaluations are intended to provide a formal opportunity to discuss job tasks, identify and correct weaknesses, encourage and recognize strengths, discuss positive, purposeful approaches for meeting goals, and develop new goals. However, employees and their Supervisors are strongly encouraged to discuss job performance and goals on an informal, day-to-day basis throughout the year.
2. The performance evaluation may be used to promote or identify training or to institute an performance improvement plan for an employee or as a basis for disciplinary action. However, a performance evaluation is not, itself, disciplinary in nature. Only job-related factors shall be used to evaluate an employee’s work performance.
Supervisors are responsible for the timely evaluation of employees in their departments, and, if applicable, they may solicit the assistance of lower and higher-level Supervisors in the preparation of the performance evaluation.
B. Timing
1. Introductory evaluations.
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a. Before expiration of an Introductory Period, the Supervisor will have a discussionreview with the employee covering on their work performance (“Introductory Evaluation”). Upon such discussion, a written evaluation will be provided to the employee and signed by both the employee and the Supervisor.
b. An employee may refuse to sign the written evaluation and file a response letter with the Human Resources managerDirector, Human Resources within fivetwo (52) business days of receiving the written evaluation. c. Within tenfive (105) business days, the Supervisor will review the response letter and determine whether to adjust the Introductory Evaluation. d. An employee may file a response letter to the Director of Human Resources within three (3) business days. The response letter will be forwarded to the supervisor of the Supervisor preparing the Introductory Evaluation. The Supervisor’s supervisor Executive DirectorSupervisor above the Supervisor and/or Human Resources shall make the final determination as to whether each Introductory employee has successfully completed the Introductory Period or has been Rejected from employment. As set forth above, completion of the Introductory Period does not impact an employee’s at-will status.
2. Performance Evaluations. CPA encourages an open dialogue between an employee and the employee’s Supervisor on an informal, regular basis. This interaction increases job satisfaction for the employee and CPA. Formal performance evaluations will be conducted at least annually or with more frequency dependent on the length of service, job position, past performance, change in job duties, or recurring performance problemsconcerns.
a. Performance evaluations will first consist of a meeting with the employee’s Supervisor. A standard template evaluation form and meeting format will be used. Following the meeting, a formal written evaluation will be prepared by the Supervisor.
b. After the review of the performance evaluation, the employee will be asked to sign the evaluation report to acknowledge that it has been presented to employee and discussed with employee and Supervisor, and that employee is aware of its contents.
c. Employee may decide to not sign the performance evaluation and file a response letter with the Human Resources managerDirector, Human Resources within fivethree two (523) business days of receiving the performance evaluation.
d. Within tenfive (105) business days, the Executive Directorsupervisor of the Supervisor performing the evaluation above the Supervisor and/or Human Resources will review the response letter and determine whether to adjust the performance evaluation. The decision of the Executive DirectorSupervisor’s supervisor above the Supervisor and/or Human shallResources shall be final.
C. Relation to Merit Salary Increases. Merit-based pay adjustments may be awarded by the CPACPA as part of the formal performance evaluation process and in accordance with its salary administration guidelines to recognize employee performance. However, the decision to award such an adjustment is not guaranteed and is instead dependent upon numerous factors, Agenda Page 757
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including the inclusion of funding for such adjustments in the CPACPA Board-approved annual budget, as well as an employee’s performance evaluation.
D. Maintenance of Performance Evaluation. When a performance evaluation is recorded in the personnel file of an employee, a copy of such evaluation, together with any attachment relating thereto, shall be given to the employee. The content of each employee evaluation report is confidential and will not be discussed with or by any person except the employee being evaluated, the employee’s Supervisor, the Human Resources ManagerDirector, Human Resources, and/or the Executive DirectorChief Executive Officer.
Disciplinary Action
Employees are expected to meet acceptable standards of conduct. Satisfaction of these standards not only promotes productivity and efficiency, but also helps to ensure that all employees will enjoy a pleasant and cooperative work environment. CPA views compliance with these commonsense rules to be an important responsibility of every employee.
Consequently, violation of these rules may lead to disciplinary action up to and including termination.
As explained elsewhere in this handbook, employment will continue only at the mutual consent of the employee and the employer. Employment is therefore terminable at will, at any time, either by the employee or by CPA, with or without cause or advance notice.
Accordingly, CPA does not adhere to any formal system of discipline. Nevertheless, where CPA determines it to be appropriate in the exercise of its discretion, it may attempt to give an employee a prior written or oral warning and an opportunity to improve or correct an issue of misconduct before termination.
It is impossible to identify every type of possible misconduct, infraction, or performance problem that can result in discipline. The following is therefore simply a partial, non-exhaustive list of types of conduct that may result in disciplinary action, up to and including the possibility of immediate termination.
1. Unexcused and/or repeated tardiness or absenteeism.
2. Mishandling, misappropriation or unauthorized removal or possession of the funds and/or property of CPA and/or any co-worker.
3. Violation of any CPA policy, including policies, described in this handbook, as revised from time to time.
4. Gambling on CPA property or while on duty.
5. Possessing or bringing dangerous or unauthorized materials on CPA property (e.g., guns, knives, or other weapons, hazardous materials or illegal/controlled narcotics or substances).
6. Falsifying or destroying any CPA records, including timekeeping records.
7. Engaging in rude or discourteous conduct toward others.
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8. Smoking in any form through the use of tobacco products or “vaping” with e-cigarettes in restricted areas on CPA property. Smoking during working hours is permitted outside of the building on rest breaks and meal periods.
9. Reporting to or being at work while under the influence of alcohol or unlawful drugs or possessing drugs while on CPA’s premises or while on duty or operating a vehicle or potentially dangerous CPA equipment.
10. Falsifying or making erroneous entries or material omissions on an employment application or other CPA record.
SECTION 4: EMPLOYMENT POLICIES & PROCEDURES
Problem Resolution
A. If an employee has a complaint or question about the employee’s job duties, working conditions, or treatment the employee is receiving, the employee is encouraged to take the following steps to address employee’s concerns:
1. Bring the situation to the attention of employee’s Supervisor or the Human Resources managerDirector, Human Resources who will then investigate and provide a solution or explanation.
2. If the problem remains unresolved, the employee may present it in writing to the Executive DirectorChief Executive Officer who will work towards a resolution.
B. This procedure may not result in every problem being resolved to the employee’s satisfaction.
However, CPA values the employee’s input and the employee should feel free to raise issues of concern, in good faith, without fear of retaliation.
Policy Prohibiting Harassment, Discrimination, and Retaliation CPA is committed to providing a work environment that is free of discrimination. In keeping with this commitment, CPA requires all employees to complete mandatory Harassment Prevention training. Additionally, CPA maintains a strict policy prohibiting all forms of unlawful harassment, discrimination, and retaliation, including sexual harassment and harassment based on race, color, religion, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, military and veteran status, sexual orientation, or any other characteristic protected by state or federal law. This policy applies to all employees and prohibits harassment of employees in the workplace by any person, including nonemployees, such as vendors, independent contractors, and third parties doing business with CPA or with whom an employee comes into contact. Furthermore, this policy prohibits unlawful harassment in any form, including verbal, physical and visual harassment. It also prohibits retaliation of any kind against individuals who file complaints in good faith or who assist or participate in an investigation.
Sexual harassment includes, but is not limited to, making unwanted sexual advances and requests for sexual favors where either (1) submission to such conduct is made an explicit or implicit term or condition of employment; (2) submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individuals; or (3) such conduct has the purpose or effect of substantially interfering with an individual’s work performance or creating an intimidating, hostile or offensive working environment.
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Individuals who violate this policy are subject to Discipline up to and including the possibility of immediate termination.
Unlawful sexual harassment may take many forms, including:
Verbal conduct, such as epithets, derogatory comments, slurs, or unwanted sexual advances, invitations or comments.
Visual conduct, such as derogatory posters, cartoons, drawings or gestures. Physical conduct, such as assault, blocking normal movement, or interference with work directed at an employee because of the employee’s sex or other protected characteristic.
Threats and demands to submit to sexual requests in order to keep one’s job or avoid some other loss and offers of job benefits in return for sexual favors. Retaliation for having reported unlawful harassment.
Any employee or other person who believes they have been harassed by a co-worker, Supervisor, manager, agent, of CPA or a nonemployee should promptly report the facts of the incident(s) and the names of the individuals involved to the employee’s Supervisor, the Human Resources managerDirector, Human Resources or to a third party designated by CPA to intake complaints, which may be anonymous. It is the responsibility of each employee, independent contractor or other person to immediately report any violation or suspected violation of this policy to one or more of the individuals identified above.
Supervisors should immediately report any incidents of alleged harassment to the Human Resources managerDirector, Human Resources. The Human Resources managerDirector, Human Resources will promptly investigate all such claims and take appropriate corrective action, including appropriate options for remedial actions and resolutions, such as possible disciplinary action, when it is warranted. A complaint will be designated as confidential, to the extent possible, but cannot be kept completely confidential. It will lead to a fair, impartial, thorough and timely investigation by qualified individuals, documentation and tracking for reasonable progress and timely closure based on the evidence collected.
Employees should feel free to report claims and participate in any investigation without fear of retaliation of any kind. Employees will not be subject to retaliation for registering a complaint of unlawful harassment, retaliation or discrimination.
If any employee has questions concerning this policy, please feel free to contact the Director, Human Resources manager.
Employees should also be aware that the Federal Equal Employment Opportunity Commission (“EEOC”) and various state agencies (e.g., in California, the California Civil Rights Department) investigate and prosecute complaints of prohibited harassment, discrimination and retaliation in employment. If you think you have been harassed or discriminated against or that you have been retaliated against for resisting, complaining or participating in an investigation, you may file a complaint with the appropriate agency. The nearest EEOC office can be found by visiting the agency website at https://www.eeoc.gov/. Individual sites may also have agency websites that can be found online (e.g., in California, visit https://calcivilrights.ca.gov/), otherwise, the EEOC will have regional offices to serve your area.
Consensual Romantic Relationships between Employees
A. General. Consensual romantic or sexual relationships between CPA employees can lead to misunderstandings, complaints of favoritism, adverse effects on employee morale, and possible Agenda Page 760
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claims of sexual harassment during or after termination of the relationship. As a result, such relationships present existing or potential conflicts that adversely affect efficient operation of the CPACPA. Relationships that present an actual conflict under this section are therefore prohibited.
1. Application. This section shall apply to all CPA employees, regardless of gender or sexual orientation, who have a romantic or sexual relationship with another CPA employee.
2. Definition of Conflict. For purposes of this section, a conflict exists if business issues of supervision, safety, security, and/or morale would be impacted by a romantic or sexual relationship between two employees or between an employee and Intern.
3. Duty to Report. If a romantic or sexual relationship exists between employees and, in particular, between a Supervisor and a subordinate, the more senior employee/Supervisor shall promptly disclose the relationship to the Executive DirectorChief Executive Officer and request a determination as to whether the relationship presents a conflict. The disclosure must identify the names and positions of both employees. An employee’s failure to comply with this section shall be grounds for Discipline up to and including Termination.
4. Determination by the Executive DirectorChief Executive Officer. Within five (5) business days, the Executive DirectorChief Executive Officer shall issue a written determination as to whether the relationship presents a conflict and is thereby prohibited. The Executive DirectorChief Executive Officer, in consultation with a Human Resources managerDirector, Human Resources, shall have sole discretion in making the determination.
5. Resolution of Conflicts. Subject to limitations imposed by applicable provisions of this section, the Executive DirectorChief Executive Officer will attempt in good faith to work with the Supervisor and the other employee to consider options to eliminate the conflict, including removing the Supervisor’s authority that created the conflict, reassignment, transfer or voluntary demotion of the Supervisor, or where the Executive DirectorChief Executive Officer determines that modification of a Supervisor’s assignment is not feasible, reassignment, transfer or voluntary demotion of a non-supervisory employee. The Executive DirectorChief Executive Officer retains discretion to determine how the conflict shall be resolved, including potential resignation or termination.
6. Prohibited On-duty Conduct. All CPA employees are prohibited from engaging in intimate, physical, or other conduct in furtherance of a romantic or sexual relationship with another CPA employee or any other person at work locations or at any time during work hours. Moreover, upon termination of a sexual or romantic relationship with another CPA employee, employees are prohibited from engaging in behavior that adversely affects the working conditions of any CPA employee. In general, all employees are expected to observe appropriate standards of workplace conduct in their interactions with other CPA employees.
7. Complaints. Employees who believe that they have been adversely affected by romantic or sexual relationships between CPA employees should address their concerns to their Supervisor or the Human Resources managerDirector, Human Resources.
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8. CPA desires to avoid misunderstandings, complaints of favoritism, claims of sexual harassment, and employee dissension that may result from personal or social relationships amongst employees. Therefore, if an employee becomes involved in a romantic relationship with another employee that employee should disclose that relationship to the employee’s Supervisor or to the Director, Human Services manager.
This information will be kept as confidential as possible. For purposes of this provision, a “romantic relationship” will be interpreted broadly. CPA reserves the right to take necessary and appropriate action to resolve any potential conflict of interest arising out of a romantic relationship between or among employees. Depending on the facts of the situation, such action may include reassignment or termination of one or both employees involved.
Media Contact
CPA has established protocols and procedures for dealing with inquiries from outside sources, including any representative of the press or media. The only individuals authorized to communicate with any outside source, including any press or media representative, is the Executive DirectorChief Executive Officer and/or the Executive DirectorChief Executive Officer’s designee.
Employees must refrain from answering any questions or providing any information, in written or verbal form, to any representative of the press or media. This includes both on and off the record statements. Violations of this policy are extremely serious and may result in disciplinary action, including the possibility of immediate termination.
Employment of Close Relatives
The employment of close relatives in the same area of an organization may cause conflicts of interest and appearances of impropriety. In addition, personal conflicts may impact the working relationship of the parties. Although CPA does not prohibit the hiring of close relatives of existing employees, CPA is committed to monitoring situations in which close relatives work in the same area. In the event of an actual or potential problem, CPA’s response may include reassignment or termination of one or both individuals involved. CPA reserves the right to apply this policy to situations where there is a conflict or the potential for conflict because of the relationship between employees, even if no direct reporting relationship or authority is involved. In these situations, CPA will reassign one of the employees within 60 days.
Any exceptions to this policy must be approved by the department director and HRemployee’s supervisor and Director, Human Resources. Written justification for the exception must be submitted to HRDirector, Human Resources prior to any employment decisions.
SECTION 5: OFFICE HOURS & TIMEKEEPING
Hours of Work
A. Full-Time employees are generally required to provide adequate office coverage during office hours. The office is open Monday -– Friday, 8:30 a.m. to 5:30 p.m. (Pacific time). Work schedules will be determined by the employee’s Supervisor. Full-Time employees shall work a standard work schedule, eight (8) hours per day, exclusive of their one-hour meal period.
However, because of the nature of CPA’s work, Exempt Employees may be required to work evenings and occasional weekends depending on various factors, such as workloads, operational efficiency, and staffing needs. In such cases, flexible work schedules will be Agenda Page 762
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approved by the Executive DirectorChief Executive Officer or the employee’s Supervisor, taking into consideration the employee’s work demands. CPA reserves the right to assign employees to jobs other than their usual assignments when required.
B. Staffing needs and operational demands may necessitate variations in starting and ending times, as well as variations in the total hours that may be scheduled each day and week.
C. Part-time employees will be advised in writing of their expected schedule prior to beginning work and must report to work promptly. Any modifications to Part-Time employees’ daily hours will be documented in writing.
D. Meal Periods and Rest Breaks
CPA provides meal and rest breaks in accordance with applicable state and federal law.
California eEmployees are authorized to and permitted to take a 10-minute paid rest break for every four hours worked, or major fraction thereof.
Whenever practicable, Nnon-Eexempt employees should take their rest breaks near the middle of each four-hour work period. Employees may not accumulate rest breaks or use rest breaks as a basis for starting work late, leaving work early, or extending a meal period.
Employees will be relieved of all of their duties during rest breaks but may not leave the work premises during a rest break. Because rest breaks are paid, employees should not clock out for them. CPA will not retaliate against any employee who reports that their supervisor or manager caused them to miss or take a late rest break.
CPA also provides and makes available an unpaid meal period of at least 30 minutes to Nnon-exempt Eemployees in California who work more than five (5) hours in a workday (the “First Meal Break”). CPA provides a second unpaid meal period of at least 30 minutes to employees who work more than 10 hours in a workday (the “Second Meal Break”). Employees may only waive their First Meal Break if they work no more than six (6) hours and elect in writing to waive the First Meal Break or have signed a Meal Break Waiver Form. Employees may only waive their Second Meal Break if they work no moreless than 12 hours total, they have taken their First Meal Break, and elect in writing to waive the Second Meal Break or have signed a Meal Break Waiver Form. Unless waived, Eemployees must begin their First Meal Break before the end of their fifth hour of work (at or before four hours and 59 minutes (4:59) after starting work). Unless waived, employees must begin their Second Meal Break before the end of their tenth hour of work (at or before nine hours and 59 minutes (9:59) after starting work).
CPA does not pay nNon-Eexempt employees for their First or Second Meal Break, and, consequently, employees must record the start and stop times of their First and Second Meal Breaks using the appropriate time-recording procedure. Meal periods cannot be taken at the beginning or end of shifts. First and Second Meal Breaks cannot be less than 30 minutes in duration. Employees are not allowed to perform any work during their meal breaks and may not work “off the clock.” Employees will be relieved of all of their duties during meal periods and are allowed to leave the building. To the extent any tasks must be completed during an employee’s required 30-minute meal break, the employee must designate a coworker to complete any such task or, alternatively, may choose to have no appointments scheduled that would interfere with the taking of a meal break.
If for any reason an employee is not provided a meal period or rest break in accordance with this policy, or if an employee is in any way discouraged or impeded from taking their meal period or rest break or from taking the full amount of time allotted to them, the employee should immediately notify Human Resources.
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Timekeeping
A. Time records, including time sheets, represent legal documents that are used to accurately record working time and to compensate employees properly. Accurately recording time worked is the responsibility of every employee. Federal and state laws require the employer to keep an accurate record of hours worked in order to calculate employee pay and benefits. Hours worked include all time spent on the job performing assigned duties.
1. All employees must submit signed or electronically approved bi-monthly timesheets showing hours worked each day. Timesheets must be submitted three (3) business day prior to the end of each pay period.
2. An employee’s tampering, altering, or falsifying time records may result in disciplinary action, up to and including termination. Under no circumstances shall a Supervisor or employee submit a time sheet on behalf of another employee or perform work off the clock.
3. It is the employee’s responsibility to submit the employee’s time record to certify the accuracy of all time recorded. In doing so, the employee shall attest that the time and hours recorded accurately and fully identify all time worked during the pay period, whether authorized or unauthorized, and that all meal periods to which the employee is entitled have been provided. If all meal periods have not been provided, employees will be required to report to [their Supervisor] and document the reason for the missed meal period.
B. Supervisors will review and approve the time record for each employee before submitting it for payroll processing. In support of that obligation, Supervisors are responsible for monitoring each employee under their direct supervision.
C. Time sheets shall be retained as required under CPA’s record retention policies and as required by California law.
D. Lactation Breaks
1. In accordance with California and federal law, employees who wish to express breast milk while at work may request the opportunity to do so. Efforts will be made to accommodate eligible employees by allowing them to express breast milk in a private area. Where an employee has a private office, it may be used for that purpose.
Employees can exercise this privilege during their regular rest periods when possible.
If it is not possible to exercise this privilege during a regular rest period, employees can arrange with their Supervisor to take additional time or express breast milk at a different time. The time will be paid when employees use their regular rest periods to express breast milk.
2. For purposes of this policy, a “private area” is a place other than a bathroom that is near the employee’s work area and that is shielded from view and free from intrusion by other Employees and the public and preferably with a lock. Such space will meet the requirements of state law, including having a surface to place a breast pump and personal items, a place to sit, access to electricity, a sink with running water, and a refrigerator for storing breast milk.
3. Human Resources managerDirector, Human Resources will consider input from the affected employee but retains sole discretion in identifying a “private area” on a case-by-case basis.
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4. An employee may request an accommodation for lactation breaks by submitting a lactation accommodation request form to their Supervisor. The Supervisor must respond to the employee’s accommodation request in writing on the same lactation accommodation request form submitted by the employee indicating the approval or denial of the break request. The completed request form must be returned to the employee and a copy sent to Human Resources. CPA reserves the right to deny, in writing, an employee’s request for lactation break if the additional break time will seriously disrupt operations.
3.5.Employees have the right to file a complaint with the California Labor Commissioner for any violation of rights provided under California law regarding lactation accommodations.
E. Overtime
CPA provides compensation for all overtime worked by Nnon-Eexempt employees in accordance with applicable state and federal law. For California Non-Exempt employees, aAll hours worked in excess of eight (8) hours in one workday or forty (40) hours in one (1) work week will be treated as overtime. Compensation for hours worked in excess of eight (8) hours in a workday and the first eight (8) hours on the seventh (7th) consecutive workday will be compensated at one and one-half times (1.5) the employee’s regular rate of pay.
Compensation for hours worked in excess of twelve (12) hours in a workday and in excess of eight (8) hours on the seventh (7th) consecutive workday, will be paid at double the regular rate of pay.
For the purposes of calculating overtime, CPA holidays and vacation/PTO days are not counted as “time worked” and CPA’s workweek is Sunday 12:00 a.m. through Saturday 11:59 p.m. Any employee who is eligible to receive holiday pay and who works on a holiday observed by CPA shall be paid at their regular rate of pay for any work performed consistent with the relevant state and federal law. Regular overtime rules apply for hours worked on holidays observed by CPA.
All overtime must be approved by the employee’s immediate supervisor or the Human Resources ManagerDirector, Human Resources. Failure to obtain overtime approval in advance may result in disciplinary action.
Exempt employees may have to work hours beyond their normal schedules, as work demand requires. No overtime compensation will be paid to exempt employees. Rather, Eexempt employees are paid a pre-determined salary that is intended to fully compensate them for all hours worked. As a general rule, an Eexempt employee’s gross salary is not subject to pay changes due to actual number of hours worked in a pay period. However, when an Eexempt employee has exhausted all accrued vacation/PTO and misses additional full days off work for personal reasons, deductions will be made consistent with all applicable state and federal laws.
F. Holidays
Regular Full-Time Position employees will receive the following paid holidays:
New Year’s Day (January 1)
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Martin Luther King, Jr. Day (third Monday in January) President’s Day (third Monday in February)
Cesar Chavez Day (March 31)
Memorial Day (last Monday in May)
Juneteenth (June 19)
Independence Day (July 4)
Labor Day (first Monday in September)
Veteran’s Day (November 11)
Thanksgiving (fourth Thursday in November)
Day after Thanksgiving
Christmas Eve (December 24)
Christmas (December 25)
New Year’s Eve (December 31)
CPA’s office is closed December 25 through January 1. Exempt employees can complete essential duties remotely with no charge to their vacation time but non-exempt employees should not be performing any work without pay. Essential duties may include but are not limited to checking and responding to email, completing required tasks, (e.g., work necessary to meet a legal or regulatory deadline), and responding to urgent issues that may arise. During this time, the employees committed to performing essential duties will not be required to use their vacation time off, as addressed in Section 6. Employees that do not want to perform essential duties must be approved to take time off leave during this time. Employees on a hybrid work schedule will not be required to report to the office.
If a holiday falls on a Saturday or Sunday, it will be observed on the preceding Friday or the following Monday. Holiday observance will be announced in advance.
SECTION 6: LEAVE
Vacation
A. Vacation time off with pay is available to eligible employees to provide opportunities for rest, relaxation, and personal pursuits. Employees are encouraged to use their available vacation each year, in accordance with this section. Vacation time may be used in minimum increments of one (1) hour.
B. Full-Time Position employees accrue vacation leave at the rate ofare eligible for up to 80 hours (2 weeks)for 120 hours of vacation annually upon beginning of employment. Full-time employees are eligible for additional vacation award upon the beginning of the employee’s years of service as noted below,. with allocation of vacation timewhich shall be prorated according to an employee’s’ start date through the end of the fiscal year. Vacation time shall be accrued per pay period on a pro-rata basis. Upon the completion of three (3) continuous years of service, employees will be grantedbe eligible for an additional 40 hours (1 week) of vacation leave annually. The Executive DirectorChief Executive Officer, in the Executive Agenda Page 766
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DirectorChief Executive Officer’s sole discretion, may grant thisan additional third week40 hours immediately upon hire for the purposes of recruitment. 2 nd year 40 additional hours
4 th year 40 additional hours
6 th year 40 additional hours
The Chief Executive Officer may grant an additional 40 hours immediately upon hire for the purposes of recruitment in lieu of the 2nd year increase in number of awarded hours.
Employee may accrue have a vacation balance up to a limit of 1.5two (2) times the annual accrualallotment. Once employee reaches the maximum accrual limit the employee will not accrue receive any additional vacation time until the accrued balance falls below the maximum limit. “Cash-out” of vacation leave is not permitted. An annual cash out of up to 80 hours is permitted. CPA will designate certain times of the year when the cash-out option can be exercised. Annual vacation balances may not fall below 120 hours as a result of an employee exercising the cash-out option.
B.C.
Full vacation balances are available at the beginning of each fiscal year of employment, with allocation of vacation time prorated according to employees’ start dates. Vacation time shall be accrued per pay period on a pro-rata basis. If employment terminates, employees will be required to pay back any vacation time that was used but not accrued during the fiscal year through a deduction in the employee’s final paycheck. When an employee chooses to take vacation in advance of being accrued, the employee consents to having the used, but not accrued, vacation pay deducted from their final paycheck.
C.D. Employees may only request vacation time up to the available balance in their vacation bank.
If an employee has a zero balance in their vacation bank, time off must be preapproved by the Human Resources Manager and shall be unpaid.
D.E. Employees do not accrueare not eligible for receiving additional vacation time while they are on an unpaid leave of absence.
E.F.Employees must obtain the written approval of their Supervisor before commencing their vacation. Approval should be requested at least two (2) weeks in advance of the date the vacation is expected to begin. Although efforts will be made to accommodate an employee’s request to take vacation at the time requested, Supervisors must consider the needs of CPA when evaluating requests. CPA reserves the right to decline an employee’s request to take a vacation at a particular time if it would be disruptive or inconvenient to CPA to grant the request.
F.G.Where two (2) or more employees file timely requests to take vacation during the same period and CPA is unable to grant each request, CPA will ordinarily grant the request of the employee with the longest period of service unless business reasons exist to deviate from that standard.
G.H. Employees shall be compensated for their remaining accrued vacation leave balance upon separation from employment.
Paid Sick Leave
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A. In General
1. CPA complies with the requirements of all state and local paid sick leaves. Although this paid sick leave policy is intended to comply with the requirements of all state and local paid sick leave laws, some jurisdictions may have specific requirements not outlined in this policy. Please contact Human Resources with questions regarding your eligibility and entitlement to paid sick leave.
1.2.Sick leave may be used for an absence due to illness or injury sustained by the employee, or an immediate family member residing with the employeethe following reasons: (1) diagnosis, care or treatment of an existing health condition for an employee or covered family member (as defined below); (2) preventive care for an employee or an employee’s covered family member; or (3) for certain, specified purposes when the employee is a victim of domestic violence, sexual assault or stalking. Sick leave may be used in minimum increments of one (1) hour.
3. For purposes of paid sick leave, a covered family member includes children (biological, adopted, or foster child; stepchild; legal ward of the child of a worker standing in loco parentis to the child); parents; grandchildren; grandparents; spouses; registered domestic partners; parents of a domestic partner; siblings; any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship; and a “designated person” (a person identified by the employee at the time the employee requests paid sick leave, and limited to one designated person per 12-month period).
2.4.All Full-Time Position employees shall be entitled to sick leave in the amount of one day per month, a total of 96 hours annually, prorated and credited accrued each pay period. This benefit will be interpreted and applied consistent with the minimum requirements of California law requiring paid sick leave.
3.5.All Part-Time Position employees anticipated to work more than 30 calendar days shall accrue paid sick leave benefits at the rate of one hour for each 30 hours worked. Accrued sick leave will be carried over each year but will be capped at 48 72 hours.
4.6.Sick leave will accrue during any paid leave of absence, but not during an unpaid leave of absence. If an employee uses all accrued sick leave, but needs additional time off from work, the additional time may be allowed but the leave will be unpaid.
5.7.Unused Ssick leave has no cash value uponwill not be paid out at separation from employment. Employees who are rehired within one (1) year of separation from employment may be eligible for reinstatement of previously accrued and unused paid sick leave.
6.8.Employees may only take sick leave up to the available balance in their sick leave bank. If an employee has a zero balance in their sick leave bank, time off must be preapproved by the Human Resources ManagerDirector, Human Resources and shall be unpaid.
B. Reporting Absence Because of Illness or Injury
Any employee who is unable to report to work due to an illness or injury must notify the employee’s Supervisor or other designated person by telephone or other means of communication prior to the scheduled reporting time for work on the first day of absence unless emergency conditions make it not practicable under the circumstances to do so, as determined by the responsible Supervisor, in which case notice must be provided as soon as practicable. The Supervisor should also be contacted Agenda Page 768
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each additional day of absence for absences lasting three (3) or fewer consecutive days. Should an employee’s absence extend beyond three (3) consecutive workdays for medical illness or injury, a doctor’s release must be obtained and given to the Supervisor as soon as possible and prior to the employee’s return to work. The Supervisor must provide the doctor’s release to the Human Resources managerDirector, Human Resources and the release must be placed in the employee’s personnel file.
C. Absenteeism and Sick Pay
Employees should not automatically assume that absenteeism is permissible merely because they have enough sick pay benefits available to cover all or a portion of their time off. CPA may determine that absenteeism is excessive if, based on all the facts and circumstances it is found disruptive to CPA, co-workers, or the public. Each case must be evaluated based on the surrounding facts and circumstances by the Executive DirectorChief Executive Officer or the Executive DirectorChief Executive Officer’s designee. Absenteeism that is determined to be excessive may lead to disciplinary action up to and including the possibility of immediate termination.
Personal Time Off
In addition to vacation, 40 hours of personal time off (PTO) is available to all Eexempt employees after completion of the employee’s Introductory Period. Full PTO balances are available at the beginning of each fiscal year of employment, with allocation of PTO time prorated according to employees’ start dates.
All PTO must be preapproved by and prescheduled with the employee’s Supervisor and may be taken in hourly increments. Approval for all scheduled time away is subject to applicable workloads.
Unused PTO time may not be carriedwill carry over from one fiscal year to the next.
Employees will not be able to “sell” or “cash-out” unused PTO hours. If you terminate your employment or if you are terminated, you will be paid for all unused PTO time.
Pregnancy Disability Leave
A. Eligibility: Under the California Fair Employment and Housing Act (“FEHA”), employees who are disabled by pregnancy, childbirth or related medical conditions are eligible to take a pregnancy disability leave (“PDL”) and to request reasonable accommodation. Employees who are affected by pregnancy or a related medical condition are also eligible to transfer to a less strenuous or hazardous position or to less strenuous or hazardous duties, if such a transfer is medically advisable.
B. Leave Entitlement: Employees will be eligible to take unpaid Pregnancy Disability Leave (“PDL”) is unpaid for any period or periods of actual disability caused by an employee’s pregnancy, childbirth or related medical conditions for up to four (4) months (the working days an employee normally would work in one-third of a year or 17.33 weeks) per pregnancy. The employee will be returned to the same job when the employee is no longer disabled by pregnancy or, in certain instances, to a comparable job. For a Ffull-Ttime Eemployee who works 40 hours per week, “four Agenda Page 769
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months” is 693 hours of leave entitlement based on 40 hours per week times 17.33 weeks. However, a pregnancy-disabled employee who exhausts the employee’s four (4) months of PDL may also be entitled to additional leave under the FEHA, as a reasonable accommodation for a disability.
C. Usage: PDL does not need to be taken in one continuous period of time but can be taken on an as-needed basis. Time off needed for prenatal care, severe morning sickness, doctor-ordered bed rest, childbirth, and recovery from childbirth would all be covered by PDL. At the employee’s option, the employee can use any accrued vacation or other accrued time off as part of the employee’s PDL before taking the remainder of the employee’s leave as unpaid leave. CPA may require that the employee use up any available sick leave during the employee’s leave. The employee may also be eligible for state disability insurance for the unpaid portion of the employee’s leave.
D. Benefits: CPA will maintain and pay for group health benefits during the employee’s PDL as if the employee was actively working during the leave, up to a maximum of four months within a 12- month period (commencing on the date the PDL begins). If employees take their full PDL and their full California Family Rights Act (“CFRA”) leave for baby bonding, CPA will maintain health coverage for up to seven months (see below for more details on CFRA).
Family Medical Leave Act and California Family Rights Act A. Permissible Purposes of FMLA/CFRA: An eligible employee may request a family and medical leave of up to 12 weeks for any of the following reasonsThe federal Family and Medical Leave Act (“FMLA”) and the California Family Rights Act (“CFRA”) provide eligible employees the opportunity to take unpaid, job-protected leave for certain specified reasons. FMLA and/or CFRA leave may be taken for any of the following reasons:
(1) the birth of the employee’s child;
(2) the placement of a child with the employee in connection with an adoption or foster care;
(3) to care for a family member (employee’s spouse, parent, registered domestic partner (CFRA only), child or registered domestic partner’s child, grandparent (CFRA only), grandchild (CFRA only) or sibling (CFRA only)) or “designated person” (CFRA only, and defined as “any individual related by blood or whose association with the employee is the equivalent of a family relationship”) child, parent, domestic partner, or spouse who has a serious health condition;
(4) due to a serious health condition that prevents the employee from performing one or more of the essential functions of the employee’s position; or (5) because of a qualifying exigency arising out of the fact that the spouse, son, daughter, or parent of the employee is on active duty, or has been notified of an impending call to active duty status, in support of a contingency operationas defined under FMLA/CFRA arising from the “covered active duty” as a member of the military reserves, National Guard or Armed Forces of a spouse, registered domestic partner (CFRA only), child, child of a registered domestic partner (CFRA only), or parent.
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(6) Military caregiver leave for a service member with a serious health condition who is the employee’s spouse, domestic partner, child, parent or next of kin.
Incapacity due to pregnancy, prenatal medical care or childbirth is FMLA covered leave but does not count toward CRA leave. Please see the Pregnancy Disability Leave policy for further information on this type of leave.
An eligible employee who is the spouse, son, daughter, parent, or next of kin of a covered servicemember who is recovering from a serious illness or injury sustained in the line of duty on active duty may request a leave of up to 26 weeks in a single 12-month period to care for the servicemember.
To the maximum extent permitted by law, any leave of absence that is granted to an employee under this policy or any other policy for a purpose specified above shall be credited against the applicable 12-week or 26-week limit contained in this policy.
B. Length of Leave: If the reason for leave is common to both FMLA and CFRA, and, therefore, running concurrently, the maximum amount of FMLA/CFRA leave will be 12 workweeks in any 12-month period (with the exception of military caregiver leave). If the reason for leave is not common to both FMLA and CFRA and, therefore, not running concurrently, then an eligible employee may be entitled to additional leave under applicable law.
When the reason for leave is bonding leave or family care leave under FMLA and both spouses work for CPA and are eligible for leave under this policy, the spouses will be limited to a total of 12 workweeks off between he two (2) of them under FMLA. However, CPA will not limit the employees’ entitlement to CFRA for any qualifying reason.
The maximum amount of FMLA leave for an employee wishing to take military caregiver leave will be a combined leave total of 26 workweeks in a single 12-month period, which begins on the date of the employee’s first use of such leave and ends 12 months after that date.
C. Eligible Employees: An employee’s eligibility is determined from the date the Family Medical Leave Act (“FMLA”) and/or the California Family Rights Act of 1992 (“CFRA”)FMLA and/or CFRA leave is scheduled to begin, not the date of notice. An employee can request FMLA and/or CFRA leave before meeting the eligibility requirement as long as eligibility is met by the first day of leave. Under FMLA and CFRA an eligible employee is one who meets the following criteria:
1. Has completed an aggregate of 12 months of CPA service in the preceding seven (7) years, which need not be consecutive; and
2. Has worked at least 1,250 hours during the 12-month period immediately preceding the first day of leave; and.
2.3.Currently works at a location where there are at least 50 employees within 75 mils (FMLA only).
C. Identifying the 12-Month Period: CPA measures the period of 12 months in which leave is taken beginning with the first day of the employee uses FMLA and/or CFRA leave and starts their “leave year” if the employee is taking leave on a continuous basis. In cases of intermittent leave, the “leave year” is established by the certification date, even if the employee does not immediately have FMLA and/or CFRA absences. In addition, FMLA/CFRA leave for the birth or placement of a child for adoption or foster care must be concluded within 12 months of the child’s birth or placement.
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D. Notification Responsibilities: When leave is foreseeable (e.g. expected date of birth or planned medical treatment), the employee must provide notice at least thirty (30) days’ notice before FMLA and/or CFRA leave is to begin. If thirty (30) days’ notice is not possible, due to lack of knowledge or an emergency, notice must be given as soon as possible absent extenuating circumstances.
An employee must consult with that employee’s Supervisor and make a reasonable effort to schedule the leave to not unduly disrupt the CPACPA’s operation when planning intermittent leave for medical treatment for the employee or the employee’s family member. Employees are expected to consult with their Supervisor prior to the scheduling of treatment in order to work out a schedule which best suits the needs of both the department and the employee. If an employee neglects to consult with the Supervisor, the Supervisor may initiate discussions with the employee and require the employee to attempt to make such arrangements.
It is the Human Resources managerDirector, Human Resources’s responsibility to designate FMLA and/or CFRA leave. However, it is the employee’s obligation to provide the Human Resources managerDirector, Human Resources with sufficient information to allow the Human Resources managerDirector, Human Resources to make the designation.
D. FMLA/CFRA Leave Entitlement: The FMLA and CFRA allow an eligible employee to take a maximum of 12 workweeks of unpaid leave in one 12-month period for one or more FMLA and/or CFRA qualifying reasons. The 12-month period begins with the first day the employee uses FMLA and/or CFRA leave and starts their “leave year” if the employee is taking leave on a continuous basis. In cases of intermittent leave, the “leave year” is established by the certification date even if the employee does not immediately have FMLA and/or CFRA absences. Each time an employee takes FMLA and/or CFRA leave, it is subtracted from an employee’s leave entitlement of 12 workweeks. If more than one qualifying reason for leave occurs within the leave year, the employee is only entitled to a total of 12 workweeks for all FMLA and/or CFRA qualifying reasons. FMLA runs concurrently with PDL, but CFRA leave does not. CFRA leave begins when PDL ends. This means that an eligible employee can take additional leave under CFRA for baby bonding once the employee exhausts the entitlement to PDL.
CFRA covers care of a newborn and placement of a child for adoption or foster care.
E. Certification by Health Care Provider: If an employee requests a leave due to a serious health condition of the employee or a family member, the employee must support the request with a certification issued by the health care provider of the individual with the serious health condition. The certification should include the following information:
(1) the date, if known, on which the serious health condition commenced; (2) the probable duration of the condition;
(3) an estimate of the amount of time that the health care provider believes that the employee needs to care for the individual requiring the care; and (4) a statement that the serious health condition warrants participation of a family member to provide care during a period of treatment or supervision of the individual requiring care (if applicable).
If an employee requests intermittent leave for planned medical treatment, the certification should specify the dates on which such treatment is expected to be given and the duration of such treatment. If the time estimated by the health care provider under (3) above expires, the employee must submit a recertification if the employee desires additional leave. In addition, Agenda Page 772
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extensions will not be granted that cause the total period of the leave to exceed the applicable 12-week or 26-week limitation identified above.
F. Employee Status: Employees will retain their employee status during the period of a family and medical leave. Moreover, their absence shall not be considered a break in service for purposes of determining their longevity or seniority. Once an employee returns from a leave, the employee will be credited with all seniority and service accrued before the leave of absence began. However, the employee will not accrue seniority during the leave.
G. Reemployment Privileges: Except where the law authorizes a different result, an employee who complies with the provisions of this policy will be guaranteed reemployment upon expiration of an approved leave, provided that the total period of the leave does not exceed 12 weeks or, in the case of a leave to care for a covered servicemember, 26 weeks. The employee will be reemployed in the same or an equivalent position as that which the employee occupied when the leave beganUpon returning from FMLA/CFRA leave, employees will typically be restored to their original position or to an equivalent position with equivalent pay, benefits and other employment terms and conditions. An employee who takes a leave of absence because of an employee’s own serious health condition must provide a medical certification verifying that the employee is able to return to work in the same manner as employees who return to work from other types of medical leave. If an employee fails to return to work immediately after the period of the approved leave expires, the employee will be considered to have voluntarily separated from CPA.as scheduled after FMLA/CFRA leave or if an employee exceeds the 12-week FMLA/CFRA entitlement, the employee will be subject to CPA’s other applicable leave of absence, accommodation and attendance policies. This may result in termination if the employee has no other CPA-approved leave available that applies to the continued absence.
Likewise, following the conclusion of the FMLA/CFRA leave, CPA’s obligation to maintain the employee’s group health plan benefits ends (subject to any applicable COBRA rights).
Other State Family Medical Leaves (Non-California Employees) In addition to FMLA, CPA complies with the requirements of all state family and medical leave laws. If you are an employee outside of California, please contact Human Resources with questions regarding your entitlement to family and medical leave under state law.
Paid Parental Leave
In an effort to give parents additional flexibility and time to bond with a new child, CPA will provide up to eight (8)twelve (12) weeks of fully Paid Parental Leave to eligible employees at their regular rate of pay in connection with the birth of an employee’s child or the placement of an adopted or foster child within an employee’s home. Paid Parental leave is not designed to work in conjunction withcoordinate with California’s State Disability and/or Paid Family Leave (“PFL”) benefits. The employee should not apply for State Disability and/or PFL wage replacement benefits during an employee’s Paid Parental Leave.
A. Eligibility
To be eligible under this policy, the employee must have been employed by CPA for at least six months successfully completed their introductory evaluation period, and meet one of the following criteria:
Have given birth to a child; or
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Be a spouse or committed partner of a woman who has given birth to a child either as the intended mother or via surrogate; or
Have adopted or fostered or are fostering a child or been placed with a foster child who is 17 years old or younger; but this does not apply to the adoption of a stepchild by a stepparent.
Parental Leave described in this policy shall be available for a 12-month period following the birth or , adoption, or fostering of a child. Employees may extend the 812-week paid leave period by taking unpaid time off or by using accrued vacation. Employees may elect to apply for State Disability and/or PFL wage replacement benefits after the 12-week paid leave period expires and may elect to supplement offset the payments received under these programs bywith using vacation to receive 100% of the employee’s salary. ; however, tThe fact of multiple births, or adoptions, or foster placements does not increase the length of Parental Leave. This leave runs concurrently to FMLA and/or CFRA leave as applicable, as well as any other applicable state family medical leave.
B. Coordination With State Disability and/or Paid Family Leave OverpaymentsBenefits The employee must apply for and upon receipt ofState Disability and/or PFL wage replacement benefits, as applicable, during an employee’s leave, the State of California will provide the employee with a portion of the employee’s base wagesPaid Parental Leave. During Paid Parental Leave, CPA will pay 100% of the employee’s salary for up to eight (8) weeks; however, this pay may coordinate with California State Disability and/or PFL benefits, as applicable. CPA will pay the remaining portion of the employee’s base wages, so that the employee will receive 100% of the employee’s salary during that 8-week period. CPA will issue the employee paychecks and/or direct deposits for the full amount of the employee’s wages as part of the regularly scheduled payroll during the employee’s leave period. However, if the employee has been awarded PFL wage replacement benefits, the wages CPA will pay in full during the Parental Leave period will result in an overpayment. To resolve any overpayment(s) created by receipt of PFL benefits, employees must remit copies of all statements for PFL benefits received from the State to CPA within thirty (30) days of receipt. CPA will deduct the amount of the overpayment from the employees next paycheck.
C. Leave Notice
Employees shall notify the Human Resources managerDirector, Human Resources of the need for Parental Leave and include the estimated timing and duration of such leave at least sixty (60) calendar days in advance of the need for leave, where practical. If the need for leave under this policy is not foreseeable, employees must give notice of the leave to their Supervisor as soon as practical.
Bereavement Leave
A. All employees shall be entitled to three (3) days paid leave and an additional two (2) days of unpaid leave in the event of a death in the immediate
Familyof a qualifying family member of the employee. The immediate family shall be defined asQualifying family members include:
1. Parents
2. Siblings/siblings-in-law
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3. Grandparents
4. Mother-In-Law/Father-In-LawParents-in-law
5. Spouse or registered domestic partner
6. Children
6.7. Grandchildren
7.8. Any other person whose association with the employee is similar to “immediate family,” with advance approval of the Executive DirectorChief Executive Officer or Human Resources managerDirector, Human Resources.,
B. The five (5) days do not need to be taken consecutively; they can be intermittent. However, the employee must complete the bereavement leave within three (3) months of the family member’s date of death.
C. An employee must provide reasonable notice to the employee’s Supervisor of the intent to use bereavement leave.
D. CPA may require that the employee provide documentation of the death of the family member, including a death certificate, published obituary, or written verification of death, burial, or memorial services. The documentation, if requested, must be provided within 30 days of the first day of bereavement leave. The request for leave and any related documentation will be maintained as confidential, and only disclosed as required by law.
EC. Employees may use available sick or vacation leave for bereavement purposes in addition to the paid leave provided under this section.
Jury Duty and Witness Leave
A. CPA encourages employees to fulfill their civic responsibilities by serving jury duty when required or to be a witness in a legal proceeding. Full-Ttime and Part-Ttime Eemployees may request paid jury duty leave. For Non-Exempt employees, jury duty pay will be calculated on the employee’s regular pay rate times the number of hours the employee would otherwise have worked on the day of absence. It is the policy of CPA to pay a maximum of 40 hours for jury duty service. However, should it be deemed necessary to serve beyond the maximum number of paid days, the employee should notify the Executive DirectorDirector, Human Resources in advance who may exercise the option of extending the number of paid hours. For Non-Exempt employees, jury duty pay will be calculated on the employee’s regular pay rate times the number of hours the employee would otherwise have worked on the day of absence.
Exempt employees will also receive full pay while serving up to five (5) days of jury duty, however, should that time extend further, Exempt employees’ salaries will not be docked reduced for jury duty, except for weeks in which they perform no work for CPA.
B. Employees must show the jury duty or witness summons/subpoena to their Supervisor as soon as possible so that the Supervisor may plan to accommodate the employee’s absence. The employee is expected to report for work whenever the court schedule permits. Upon completion of such service, the employee must furnish a Certificate to CPA from the court showing dates served and amount of compensation paid. Failure to provide CPA with a certificate from the court will be treated as an unpaid absence from work. Employees may retain any mileage allowance or other fee paid by the court for jury services.
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C. Either CPA or the employee may request that the court excuse an employee from jury duty if, in CPA’s judgment, the employee’s absence would create serious operational difficulties.
Workers’ Compensation
In accordance with state law, CPA provides insurance coverage for employees in case of a work-related injury. CPA or its insurance carrier may not be liable for the payment of workers’ compensation benefits for any injury which arises out of an employee’s voluntary participation in any off-duty recreational, social, or athletic activity that is not part of the employee’s work-related duties. To ensure that employee receives any workers’ compensation benefits to which employee may be entitled, employee will need to:
1. Immediately report any work-related injury to employee’s Supervisor.
2. Seek medical treatment and follow-up care if required.
3. Complete a written Employee’s Claim Form (DWC Form 1) and return it to employee’s Supervisor.
4. Provide CPA with certification from employee’s health care provider regarding the need for workers’ compensation disability leave and/or the employee’s ability to return to work from the leave.
Other Leave
A. Family School Partnership Leave
In accordance with Labor Code Section 230.7, upon reasonable advance written notice to an employee’s Supervisor, an employee who is the parent or guardian of a pupil may take time off to appear in the school of that pupil pursuant to a request made under Education Code Section 48900.1.
B. Family School Partnership Leave (School or Day-Care Related Activities)
1. In accordance with Labor Code Section 230.8, upon reasonable advance written notice to an employee’s Supervisor, an employee who is the parent, guardian, or grandparent of a child who is in kindergarten, grades one through twelve, inclusive, or attending a licensed day care facility, is entitled to take unpaid leave to participate in activities of that child’s school or licensed day care facility.
2. Employees are eligible for forty 40 hours of unpaid leave per year for family school leave and may not exceed eight (8) hours in any calendar month. The total amount of leave is per employee and is not conditioned on the number of children, grandchildren, or wards that the employee may have. Upon return to work, the employee must provide the employee’s Supervisor with reasonable written evidence that the employee participated in the school or day care activity at a specific date and time.
3. Any employee who takes family school leave must use any available vacation or other appropriate paid leave for the period of the absence. However, if an Exempt Employee does not have paid leave benefits available to cover some or all of the period of the absence, the employee’s salary shall not be affected.
C. Domestic Violence/Sexual Assault/Serious or Violent Crime Leave Agenda Page 776
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1. Leave for Victims of Domestic Violence of Sexual Assault a. In accordance with Labor Code Sections 230(c) and 230.1, and upon reasonable advance written notice to the Human Resources managerDirector, Human Resources if feasible, an employee who is the victim of domestic violence or sexual assault may take time off to obtain a temporary restraining order, a restraining order, or other injunctive relief from court to help ensure the health, safety, or welfare of the employee or employee’s child; for the employee to seek medical attention for injuries caused by domestic violence or sexual assault; for the employee to obtain services from a domestic violence shelter, program, or rape crisis center as a result of domestic violence or sexual assault; for the employee to obtain psychological counseling related to an experience of domestic violence or sexual assault; or for the employee to participate in safety planning and take other actions to increase safety from future domestic violence or sexual assault, including temporary or permanent relocation.
b. If advance notice is not feasible, within a reasonable period following return to work, the employee must submit certification to the Human Resources managerDirector, Human Resources in the form of one of the following: a police report indicating that the employee was a victim of domestic violence or sexual assault; a court order protecting or separating the employee from the perpetrator of an act of domestic violence or sexual assault, or other evidence from the court or prosecuting attorney that the employee has appeared in court; or documentation from a medical professional, domestic violence advocate or advocate for victims of sexual assault, health care provider, or counselor that the employee was undergoing treatment for physical or mental injuries or abuse resulting in victimization from an act of domestic violence or sexual assault. c. An employee absent under this Handbook may elect to take any accrued paid leaves that are otherwise available to the employee.
2. Leave to Attend Court Proceedings for Victims of Serious or Violent Crime a. In accordance with Labor Code Section 230.2, upon reasonable advance written notice to Human Resources of a scheduled proceeding, if feasible, an employee who is the victim of, or is related to a victim of, or is the registered domestic partner of a victim of a serious or violent crime, may take unpaid time off to attend a court proceeding related to that crime. The employee must be the parent, child, spouse, registered domestic partner, child of a registered domestic partner, stepchild, brother, stepbrother, sister, stepsister, stepmother, or stepfather of the victim.
b. If advance notice is not feasible, within a reasonable period following return to work, the employee must submit certification to the Human Resources managerDirector, Human Resources evidencing the judicial proceeding from one of the following entitles: the court or government agency setting the hearing; the district attorney or prosecuting attorney’s office; or the victim/witness office that is advocating on behalf of the victim.
c. An employee absent under this Handbook may elect to take any accrued paid leaves that are otherwise available to the employee.
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a. In accordance with Labor Code Section 230(b), an employee who is a victim of a crime, may take time off to appear in court to comply with a subpoena or other court order as a witness in any judicial proceeding.
b. An employee absent under this section may elect to take any accrued paid leaves that are otherwise available to the employee.
D. Leave for Volunteer Firefighters, Reserve Police Officers and Emergency Rescue Personnel
1. Leave for Emergency Duty: In accordance with Labor Code Section 230.3, an employee may take time off to perform emergency duty as a volunteer firefighter, reserve police officer, or emergency rescue personnel.
2. Leave for Training: In accordance with Labor Code Section 230.4, an employee who is a volunteer firefighter, reserve police officer, or emergency rescue personnel may take up to 14 days of unpaid leave per calendar year for the purpose of engaging in fire or law enforcement training.
E. Civil Air Patrol Leave
Employees who volunteer as part of the California Wing of the civilian auxiliary of the United States Air Force (known as “Civil Air Patrol”) may be entitled to an unpaid leave of absence to respond to certain emergency situations. Eligible employees may take up to 10 days per calendar year of unpaid Civil Air Patrol Leave to respond to an emergency operational mission of the California Wing of the Civil Air Patrol. Leave is limited to three (3) days on any one occasion but may be extended if authorized by the government entity that called for the mission and if CPA agrees. This leave is not applicable to employees who are required to respond to emergency operational missions as a first responder or disaster services worker for a local, state or federal agency.
To be eligible for leave under this policy, the employee must have been employed by CPA for at least 90 days immediately preceding commencement of the leave. An employee is required to provide CPA with as much notice as possible of the intended leave dates. CPA may require an employee to submit certification from the Civil Air Patrol to verify his or her eligibility.
During this leave, employees may elect to substitute vacation benefits if available. Upon expiration of this leave, an employee is entitled to reinstatement to the same or an equivalent position, consistent with applicable law.
F. Military & Military Spousal Leave
Military Leave shall be provided as set forth in the applicable California and federal law. An employee entitled to military leave shall give the employee’s Supervisor, in consultation with Human Resources, an opportunity within the limits of military regulations to determine when such leave shall be taken. Prior to taking military leave, an employee, when possible, shall present a copy of the employee’s military orders to the employee’s Supervisor. The Supervisor shall advise Human Resources of the military orders immediately. Copies of the military orders shall be provided to the Human Resources managerDirector, Human Resources and placed in the employees personnel file.
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An employee whose spouse or registered domestic partner is deployed for active military service during a period of military conflict is permitted unpaid time off up to ten (10) days to spend with the spouse or registered domestic partner when that spouse or partner is on leave from such deployment. Employees requesting leave must notify their Supervisor of their intention to take time off within two (2) business days of receiving official notice that the employee’s spouse or domestic partner will be on leave from military deployment.
F. Organ and Bone Marrow Donation Leave
Employees who have been employed at least ninety (90) days may request a paid leave of absence of up to thirty (30) business days in a one-year period to donate an organ to another person, or up to five (5) business days in a one-year period to donate bone marrow. An additional unpaid leave of up to 30 business days in a one-year period may be granted to an employee donating an organ.
The one-year period is 12 consecutive months measured from the date the employee’s leave begins. Employees must support the request for leave with written verification that the organ or bone marrow donation is required by medical necessity. Employees must use earned sick or vacation leave benefits during the leave of absence. CPA may require an employee taking bone marrow leave to use up to five (5) days of accrued sick or vacation days for this leave, and an employee taking organ donation leave to use up to two (2) weeks of accrued sick or vacation days for this leave.
G. Voting Leave
Employees who are unable to vote during non-work hours may arrange in advance to take up to two (2) hours off, with pay, to vote in a public election. In order to qualify, employees must obtain advance approval from their Supervisor.
H. Alcohol and Drug Rehabilitation Leave
CPA will make reasonable accommodations by providing unpaid time off for any employee who voluntarily enters and participates in a drug or alcohol rehabilitation program, if it does not impose an undue hardship. Employees may use accrued sick leave during this period. CPA may also allow employees to use accrued vacation leave or other paid time off. The duration of the time off is tied to the duration of the program.
This type of time off may also be covered by the Family and Medical Leave Act (FMLA) or the California Family Rights Act (CFRA) if the employee is otherwise eligible and has a serious health condition. If so, CPA will follow the approval and medical certification process under FMLA/CFRA and inform the employee that the time off is designated as FMLA/CFRA time. The two leave obligations may run concurrently.
CPA will make reasonable efforts to maintain the confidentiality of the employee’s treatment to the extent possible. The Company CPA is not obligated to continue to employ any person whose performance of essential job duties is impaired because of drug, alcohol or marijuana use.
Additionally, employees who are given the opportunity to seek treatment and/or rehabilitation, but fail to successfully overcome their dependency, will not automatically be reemployed or given a second opportunity to seek treatment and/or rehabilitation. This policy on treatment and rehabilitation is not intended to affect the CPACPA’s treatment of employees who violate the Agenda Page 779
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regulations described previously. Rather, rehabilitation is an option for an employee who acknowledges a chemical dependency and voluntarily seeks treatment to end that dependency.
I. Literacy Education Assistance
CPA will make reasonable accommodations by providing unpaid time off for any employee in an adult literacy education program, if it does not impose an undue hardship. CPA will comply with the Employee Literacy Education Assistance Act and reasonably accommodate an employee who reveals a literacy problem and requests assistance to enroll in an adult literacy education program.
CPA requires that employees provide proof of enrollment in an adult literacy education program and will take reasonable steps to keep the employee’s literacy problem confidential. CPA may also allow employees to use accrued vacation leave.
J. Other Leave Policies (Outside of California)
Employees working in states outside of California may be eligible for additional leave benefits.
Please see Human Resources for additional information.
Personal Leaves of Absence Without Pay
A. Request for a Personal Leave of Absence Without Pay. When an employee has exhausted all the employee’s paid leaves, the employee may request a leave of absence without pay in accordance with this Section. The employee must submit a written request to the employee’s Supervisor for a leave of absence without pay, along with any supporting documentation. The Supervisor must forward the request, along with any supporting documentation to Human Resources managerDirector, Human Resources for consideration by the Executive DirectorChief Executive Officer.
B. Authority to Grant a Personal Leave of Absence Without Pay. The Executive DirectorChief Executive Officer may grant a regular or probationary employee leave of absence without pay for a period not to exceed three (3) months. After three months, the leave of absence may be extended by an additional three (3) months if the employee submits a further written request, along with supporting documentation, that is authorized by the Executive DirectorChief Executive Officer. The approval or rejection of the Executive DirectorChief Executive Officer will be in writing and may be communicated by Human Resources on behalf of the Executive DirectorChief Executive Officer. An employee may not be granted more than six months of a leave of absence without pay.
C. Return from Personal Leave of Absence Without Pay. Upon expiration of a regularly approved leave, the employee will be reinstated in the position held at the time leave was granted, provided such position continues to exist. An employee on leave who fails to report to duty promptly at its expiration will be subject to disciplinary action for being on an unauthorized absence. An employee who is absent for medical reasons may be required to demonstrate fitness for duty in accordance with the CPACPA’s fitness for duty policy.
D. Mandatory Exhaustion of Paid Leaves. If an employee is requesting a leave of absence for medical reasons, the employee is required to first fully exhaust all the employee’s paid leaves in order to be eligible to receive a leave of absence without pay. If an employee is requesting a leave of absence for personal reasons, the employee is required to fully exhaust all the employee’s paid leaves, except sick leave, in order to be eligible to receive a leave of absence without pay.
Punctuality and Unauthorized Absences
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A. Punctual and regular attendance is an essential responsibility of each employee at CPA.
Employees are expected to report to work as scheduled, on time and prepared to start working.
Employees are also expected to remain at work for their entire work schedule. Late arrival, early departure or other absences from scheduled hours are disruptive and must be avoided.
Excessive tardiness and/or absenteeism will result in disciplinary action, up to and including termination. This policy does not apply to absences covered by the FMLA, CFRA or leave provided as a reasonable accommodation under the Americans with Disabilities Act (“ADA”) or any other form of approved or protected leave.
A.B. When an employee has been absent without authorization from work for more than three (3) workdays, and in the opinion of the Supervisor the employee has abandoned the employee’s position, the Supervisor shall notify the Human Resources managerDirector, Human Resources. The Human Resources managerDirector, Human Resources shall notify the employee that the CPACPA has determined the employee has abandoned the employee’s position and that the employee has seven (7) working days upon receipt of the notice to contact the CPACPA regarding the employee’s intent to return to work. The notice shall also advise the employee that failure to contact the CPACPA within the seven-day period shall be deemed an automatic Resignation effective on the eighth day. Such notice shall be in writing and sent by certified mail or personal service to the last address listed in the employee’s personnel records.
B.C. Abandonment of position may include, but is not limited to:
1. Where an employee fails to return to the employee’s position upon conclusion of any authorized leave of absence;
2. Where an employee fails to properly notify by telephone or in writing the employee’s immediate Supervisor of absence due to sickness or injury;
3. Where an employee fails to appear for work without notification or express agreement between the Supervisor and the employee as to the use of any leave time set forth in this Handbook;
4. Where an employee fails to keep the employee’s immediate Supervisor reasonably apprised of disability status; or
5. Where an employee fails to respond within seven (7) business days to the notice of abandonment of position.
C. Abandonment of position shall constitute a Resignation from CPA service.
SECTION 7: EMPLOYMENT RECORDS
Access to Personnel Files and Payroll Records
A. General provisions
1. CPA maintains a personnel file on each employee. The personnel file may include such information as the employee’s job application, resume, records of training, documentation of performance appraisals and salary increases, and other employment records.
2. Personnel files are the property of CPA and shall be maintained by the employer in strict confidence. Access to the information contained therein is restricted, except as permitted by law. Only Supervisors and management personnel of the CPACPA who Agenda Page 781
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have express authorization from the Executive DirectorChief Executive Officer and a legitimate reason to review information in a file can do so without being subject to the procedures set forth in this Section.
3. As provided by law, letters of reference, recruitment files, and reports regarding ongoing investigations concerning a current or former employee shall be excluded from the provisions of this Section. In addition, names of all non-supervisory employees shall be redacted from records to be provided under this Section.
B. Inspection of a Current or Former Employee’s Personnel File
1. A current or former employee wishing to inspect the employee’s personnel file or payroll records must submit a written request to the Human Resources managerDirector, Human Resources. Proof of identity will be required to inspect personnel or payroll records for the employee’s file. The Human Resources managerDirector, Human Resources shall issue a written notice setting a date for the inspection of said records within thirty (30) days of receipt of the request, to take place during normal business hours. With the requesting person’s written consent, the date for inspection may be extended on one occasion by up to five (5) Days. If the requesting person is a former employee who was terminated for violation of CPA’s policy or law involving harassment or workplace violence, CPA shall have discretion to mail a copy of the personnel file at the CPACPA’s expense instead of scheduling an in-person inspection.
2. A current employee may inspect the employee’s records at the place the employee reports to work or may instead consent to inspect the employee’s personnel file in the Human Resources managerDirector, Human Resources’s office without loss of compensation. Inspection by former employees and authorized representatives shall take place with the Human Resources managerDirector, Human Resources unless otherwise mutually agreed in writing by the CPACPA and may require additional reasonable proof of identity.
3. A Human Resources managerDirector, Human Resources or other authorized employee must be present throughout the inspection. No personnel files or contents of personnel files shall be removed from the place of inspection without advance written authorization from the Executive DirectorChief Executive Officer.
C. Obtaining Copies of a Current or Former Employee’s Personnel File
1. A current or former employee wishing to obtain copies of documents or other materials in the employee’s personnel file in person or by mail must submit a written request to the Human Resources managerDirector, Human Resources along with reasonable proof of identity. A current or former employee who seeks to authorize another person to obtain copies of the employee’s personnel file must provide a satisfactory written authorization along with the written request. Reasonable proof of identity may be required at the time of in-person pick up of requested documents.
2. The Human Resources managerDirector, Human Resources shall issue a written notice setting a date on which the requested copies may be picked up in person during the normal business hours of the CPACPA and identifying the cost of reproduction that must be paid to the CPACPA at the time of pick up. The date for in-person pick up of the documents shall be no more than thirty (30) days after receipt of the request in Human Resources. With the requesting person’s written consent, that date may be extended on one (1) occasion by up to five (5) calendar days. If the requesting person Agenda Page 782
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is a former employee who was terminated for violation of CPA Handbook or law involving harassment or workplace violence, the Human Resources managerDirector, Human Resources shall have discretion to mail a copy of the personnel file at the expense of the CPACPA instead of scheduling an in- person pick up.
3. If the requesting person chooses delivery by mail instead of in-person pick up, the notice provided by Human Resources managerDirector, Human Resources shall also identify the additional actual postage expenses for which the requesting person must reimburse CPA prior to receipt of the copies.
D. Obtaining Copies of a Current or Former Employee’s Payroll Records A current or former employee, by oral or written request, may request to receive and/or review a copy of their wage statements. Such request will be fulfilled by CPA within a reasonable period of time, but no later than 21 days of the request. Employees requesting copies will be charged the actual cost of reproduction.
Personnel Data Changes
It is the responsibility of each employee to promptly notify CPA of any changes in personnel data. Employees must ensure that personal mailing addresses, telephone numbers, number and names of dependents, individuals to be contacted in the event of an emergency, educational accomplishments, and other pertinent information, are always accurate and current.
Employment Verification and References
It is the CPACPA policy that the Executive DirectorChief Executive Officer or the Human Resources managerDirector, Human Resources are authorized to respond to requests for verification of employment from financial institutions, etc. No other Supervisor or employee is authorized to provide employment verification for current or former employees.
The CPACPA relies upon the accuracy of information contained in the data presented throughout the hiring and employment process. Any misrepresentations, falsifications, or material omissions in any of this information or data may result in exclusion of the individual from further consideration for employment or, if the individual has been hired, Termination of employment.
To help to ensure that individuals who join CPA are well qualified and have a strong potential to be productive and successful, it shall be the policy of the CPACPA to check employment references of prospective employees.
Additionally, CPA will provide references upon written request concerning any present or past employment at CPA. Human Resources may respond with confirmation of dates of employment and position held. If authorized by the employee in writing, CPA will also provide information on the amount of salary or wages earned by the employee. All responses from CPA will be made in writing.
SECTION 8: GENERAL WORKPLACE RULES
Safety
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rules and to exercise caution in all their work activities. Employees are strongly encouraged to immediately report any unsafe conditions to their Supervisor. Employees at all levels of the organization are expected to correct unsafe conditions within their control as promptly as possible.
Employees who violate safety standards, who cause hazardous or dangerous situations, or who fail to report, or where appropriate, remedy such situations, may be subject to disciplinary action, up to and including Termination of employment.
All accidents that result in injury must be reported to the appropriate Supervisor, regardless of how insignificant the injury may appear. Such reports are necessary to comply with laws and initiate insurance and workers compensation benefits procedures, where applicable.
Business Use of Personal Vehicles
A. In general, employees may be required to use their private vehicles to carry out their regular job responsibilities. For this use, employees must comply with California law. Such employees are subject to the provisions of this Section.
B. Use of Cell Phones While Driving
1. Cell phone use should be avoided whenever it might create an unsafe driving situation. In accordance with California law, it is against the CPACPA’s policy to use a handheld cellular phone while operating a motor vehicle. Employees making or receiving cell phone calls while driving are required to use a hands-free device.
2. In accordance with California law, text-based communication while driving is prohibited. Specifically, writing, sending, or reading text-based communication including text messaging, instant messaging, and e-mail, on a wireless device or cell phone while driving is prohibited.
3. Failure to follow the provisions of this Handbook, or any policy, may result in disciplinary action, up to and including termination.
C. Driving Responsibilities.
Individuals who seek or hold positions that involve driving on CPA business are in roles for which CPA may have direct or indirect legal responsibility. CPA is committed to making certain that employees who have driving responsibilities do not place CPA, employees, or members of the general public at risk.
In keeping with this policy, CPA requires that employees with driving responsibilities maintain safe driving records as a condition of employment and continued employment. Individuals who fail to maintain such driving records may become unsuitable for their positions. In such cases, CPA reserves the right to discipline or terminate employees with driving responsibilities whose driving records become unsatisfactory, in the sole discretion of CPA.
In order to verify an individual’s driving status, CPA may require the employees or job applicants to furnish all or portions of their driving record from the Department of Motor Vehicles or may ask them to sign any necessary authorizations that are required or appropriate to request records directly from the Department of Motor Vehicles. Subject to any limitations imposed by state or federal law, individuals must cooperate fully with any request for records or request for an authorization to seek such records from an appropriate agency or entity.
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CPA Property and Equipment
A. Use of Property and Property Issued in General
1. Employees are prohibited from being on CPA property or using its facilities or property while not on duty, or for personal use at any time.
2. Work equipment, tools, and materials are provided by the CPACPA to its employees for the sole purpose of performing work-related tasks. Work tools are the property of the CPACPA, and it is the responsibility of the employee to use and maintain them appropriately. Deliberate carelessness or misuse of CPA’s property, or use without authorization, will not be tolerated and may result in disciplinary action being taken against the employee, up to and including Ttermination. Lost or misplaced property that has been issued to an employee must be reported immediately to the employee’s Supervisor.
3. CPA will issue laptops and business cell phones to employees upon request by the employee and approved by the Supervisor and Human Resources managerDirector, Human Resources.
a. Employees who use cell phones, whether personal or CPA-issued, are expected to confine the use of any personal calls in a way that should not disrupt others, occur during meetings, or interrupt work processes.
b. Employees who use electronic devices to conduct company business should be mindful that the CPACPA is a public agency and as such is subject to public records requests. Communications related to the conducting of public business using a personal device or account may result in employee’s device/account information being subject to public disclosure.
4. Upon Resignation or the Termination of employment, or at any other time the CPACPA so requests, employees are required to return all items and property issued to them.
5. To the extent permitted by law, the CPACPA reserves the right to charge employees the replacement value of any lost, misplaced, stolen, or deliberately or carelessly damaged CPA property.
B. Cybersecurity
The policy of CPA is to ensure that all information existing in a computerized form is properly safeguarded and that the automated processing involved in the collection, creation, manipulation, storage, retrieval, transmission, and display of information is similarly protected, both in a manner appropriate to the value of the information to the facility and its potential for unauthorized access, destruction, disclosure, or modification.
Any unauthorized acts against CPA’s Communications Systems may result in disciplinary action, up to and including dismissal. Each employee, therefore, must adhere strictly to the specific security measures and internal controls that are established for safeguarding the integrity and validity of a very valuable CPA asset.
CPA Communications Systems hardware, and any data collected, downloaded, and/or created or CPA Communications Systems described above are the exclusive property of CPA and may not be copied, shared, accessed, or transmitted to any outside party without prior written management approval or used for any purpose not directly related to the business of CPA.
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Employees should not use a password, access a file, or retrieve any stored communication without authorization. Private information should not be kept on electronic communications systems. Any unauthorized access or use of CPA’s computer or other communication systems is strictly prohibited.
C. Electronic Systems and Privacy
Storage areas, work areas, the contents of electronic and conventional files, other CPA documents, file cabinets, credenzas, computer systems and software, office telephones, cellular telephones, any and all electronically issued technology, modems, facsimile machines, copy and scanner machines, tools, equipment, desks, voice mail, and electronic mail are the property of CPA, and need to be maintained according to CPA rules and regulations.
To safeguard and protect the proprietary, confidential and business-sensitive information of CPA, and to ensure that the use of all electronic systems and equipment is consistent with CPA’s legitimate business interests, authorized representatives of CPA may monitor the use of such systems from time to time without notice, which may include printing and reading materials, files on the system, list servers, and equipment.
Employees should be aware that e-mail messages, like CPA correspondence, and any and all messages sent electronically may be read by other CPA employees and outsiders under certain circumstances. While it is impossible to list all of the circumstances, some examples are the following: (1) during system maintenance of the e-mail system, (2) when CPA has business needs to access the employee’s mailbox, (3) when CPA receives a legal request that requires disclosure of e-mail messages, or (4) when CPA has reason to believe the employee is using e-mail in violation of CPA adopted policies or this Handbook. Employees shall use a designated CPA email account for all work-related email communication and should have no expectation of privacy. Employees should assume that their CPA email account may be accessed, forwarded, read or heard by someone other than the intended recipient, even if marked as “private.”.
Telecommuting
Telecommuting allows employees to work at home, on the road or in a satellite location for all or part of their workweek. CPA considers telecommuting to be a viable, flexible work option when both the employee and the job are suited to such an arrangement. Most CPA employees have the option of telecommuting. Telecommuting is not an entitlement and it in no way changes the terms and conditions of employment with CPA. CPA reserves the right to modify or terminate these options at any time. All work options (including changes) must be approved by an employee’s supervisor and/or Human Resources in writing. Please contact Human Resources for additional information.
SECTION 9: LICENSE, MEMBERSHIPS, TRAINING & CONFERENCES The CPACPA encourages the continued development of its professional, technical and managerial employees through participation in organizations that are directly relevant to the primary business of the agency. It also recognizes the value of business publications in keeping employees informed of advances and trends in their specific career discipline and areas of responsibility.
A. Licenses/Memberships. The CPACPA will sponsor memberships and professional licenses where they are likely to be used in the employee’s performance of their duties subject to availability of funds and approval of the Executive DirectorChief Executive Officer.
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B. Conferences/Training. Employees may request attendance at professional conferences or training which will benefit the CPACPA and enhance the performance of the employee’s job responsibilities. Participation should be for the benefit of the CPACPA and directly related to the job requirements of the employee. All efforts should be made to attend a conference/training which is offered locally or on-line. Training or conference attendance must be approved in advance by the Executive DirectorChief Executive Officer. If a Certificate of Completion is provided, a copy must be provided to Human Resources managerDirector, Human Resources. All mandatory training required by the CPACPA including but not limited to AB 1234 training, sexual harassment, and workplace violence prevention will be provided by or through the CPACPA.
C. Travel. Travel for official company business is an important part of the CPACPA. All trips outside of the greater Los Angeles and Ventura metropolitan area will be made with approval of the Supervisor. Employees are expected to exercise good financial judgment when traveling.
GSA rates are provided via hyperlink (https://www.gsa.gov/travel/plan-book/per-diem-rates) to the travel request form to ensure employees are aware of acceptable expenses.
A request for travel must be completed and approved by the Executive DirectorChief Executive Officer prior to the travel. Unapproved travel expenses may not be reimbursed.
Airfare should be booked at coach/economy class or the lowest fare available. Ground transportation arrangements should be at reduced rates where available and in all cases at reasonable prices. Employees are expected to use less costly ground transportation where it exists (i.e. public transportation if feasible, shared airport shuttles, standard cabs). Should a rental car be necessary, employees are required to rent compact vehicles unless there is a justification for a higher size. Any travel exceeding the requirement of this section must be justified and approved by the employee’s Supervisor.
Meal expenses incurred by an employee for CPA business purposes will be reimbursed at the current per diem rates published by the Internal Revenue Service. Employees shall retain original receipts for actual expenses, which may be subject to an inspection and/or audit by the Human Resources ManagerDirector, Human Resources for a one-year period. Employees will not be reimbursed for alcohol purchase, or meal and lodging expenses in excess of Internal Revenue Service per diem rates except as approved by the Human Resources ManagerDirector, Human Resources in consultation with the Executive DirectorChief Executive Officer.
Employees should submit their completed expense report along with required receipts within two weeks after completion of travel. Reports that do not include required receipts will be denied reimbursement.
D. Miscellaneous Expenses
1. Expenses incurred for CPA business purposes, including, but not limited to small office supply or equipment purchases are reimbursable, with the approval of the Executive DirectorChief Executive Officer or the Executive DirectorChief Executive Officer’s designee where the expense is reasonable and necessary and supported by an expense reimbursement form including explanations and receipts. a. Requests for reimbursement for miscellaneous expenses should be submitted monthly or when the total expenses total $50 or greater, whichever comes sooner.
2. Local meal expenses
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a. Local meal expenses out of the office should be claimed infrequently and must be justified in terms of CPA benefit and are permitted only when authorized by the Executive DirectorChief Executive Officer.
b. A written request to host an in-office meeting with food and attended by non-CPA personnel must be approved in advance by the Executive DirectorChief Executive Officer or the Executive DirectorChief Executive Officer’s designee and must include a list of expected attendees.
c. In the event an CPA hosted meeting with food is provided, the request for reimbursement must verify the following:
That CPA business was discussed at the meeting;
That at least one (1) attendee was non-CPA personnel; and The names and titles of the actual attendees.