REGULAR MEETING of the Board of Directors of the
Clean Power Alliance of Southern California
Thursday, December 1, 2022
2:00 p.m.
SPECIAL NOTICE: Pursuant to the Proclamation of the State of Emergency by Governor Newsom on March 4, 2020, AB 361, and enacting Resolutions, and as a response to mitigating the spread of COVID-19, the Board of Directors will conduct this meeting remotely.
Visit CPA’s YouTube Channel to view a Live Stream of the Meeting If the YouTube stream is not working, please use the zoom link. *There may be a streaming delay of up to 60 seconds. This is a view-only live stream.
To Participate in the Meeting:
https://us06web.zoom.us/j/84912360644
or
Dial: (346) 248-7799 Meeting ID: 849 1236 0644
PUBLIC COMMENT: Members of the public may submit their comments by one of the following options:
• Email Public Comment: Members of the public are encouraged to submit written comments on any agenda item to [email protected] up to four hours before the meeting. Written public comments will be announced at the meeting and become part of the meeting record. Public comments received in writing will not be read aloud at the meeting. • Provide Public Comment During the Meeting: Please notify staff via email at [email protected] at the beginning of the meeting but no later than immediately before the agenda item is called.
o You will be asked for your name and phone number (or other identifying information) similar to filling out a speaker card so that you can be called on when it is your turn to speak.
o You will be called upon during the comment section for the agenda item on which you wish to speak on. When it is your turn to speak, a staff member will unmute your phone or computer audio.
o You will be able to speak to the Board for the allotted amount of time. Please be advised that all public comments must otherwise comply with our Public Comment Policy. o Once you have spoken, or the allotted time has run out, you will be muted during the meeting.
If unable to connect by Zoom or phone and you wish to make a comment, you may submit written comments during the meeting via email to: [email protected].
While downloading the Zoom application may provide a better meeting experience, Zoom does not need to be installed on your computer to participate. After clicking the webinar link above, click “start from your browser.” Agenda Page 1
Clean Power Alliance Board of Directors Agenda Page 2 of 4 December 1, 2022
Meetings are accessible to people with disabilities. Individuals who need special assistance or a disability-related modification or accommodation to participate in this meeting, or who have a disability and wish to request an alternative format for the meeting materials, should contact the Clerk of the Board at least two (2) working days before the meeting at [email protected] or (323) 640-7664. Notification in advance of the meeting will enable us to make reasonable arrangements to ensure accessibility to this meeting and the materials related to it.
PUBLIC COMMENT POLICY: The General Public Comment item is reserved for persons wishing to address the Board on any Clean Power Alliance-related matters not on today’s agenda. Public comments on matters on today’s Consent Agenda and Regular Agenda shall be heard at the time the matter is called.
Comments on items on the Consent Agenda are consolidated into one public comment period. As with all public comment, members of the public who wish to address the Board are requested to complete a speaker’s slip and provide it to Clean Power Alliance staff at the beginning of the meeting but no later than immediately prior to the time an agenda item is called.
Each speaker is limited to two (2) minutes (in whole minute increments) per agenda item with a cumulative total of five 5 minutes to be allocated between the General Public Comment, the entire Consent Agenda, or individual items in the Regular Agenda. Please refer to Policy No. 8 – Public Comment for additional information.
CALL TO ORDER AND ROLL CALL
PLEDGE OF ALLEGIANCE
GENERAL PUBLIC COMMENT
CONSENT AGENDA
1. Adopt Resolution 22-12-043 Finding the Continuing Need to Meet by Teleconference Pursuant to Government Code Section 54953(e)
2. Approve Minutes from November 3, 2022, Board of Directors Meeting
3. Approve a Professional Services Agreement between CPA and MRW and Associates LLC with a Not-to-Exceed (NTE) amount of $60,000
4. Receive and File Quarter 3 Risk Management Team Report
5. Receive and File Fiscal Year Quarter 1 Financial Results
6. Receive and File Quarterly Communications Report (August – October 2022)
7. Receive and File 2023 Meeting Schedule
8. Receive and File Community Advisory Committee Monthly Report Agenda Page 2
Clean Power Alliance Board of Directors Agenda Page 3 of 4 December 1, 2022
REGULAR AGENDA
Public Hearing
9. Adopt Resolution 22-12-044 to Approve Addendum No. 4 to CPA’s Implementation Plan, Adding the Cities of Hermosa Beach, Monrovia, and Santa Paula as Members of Clean Power Alliance, and Authorize Staff to Submit Addendum No. 4 as Attached, or in a Substantially Similar Form, to the California Public Utilities Commission on or Before December 31, 2022
Action Items
10. Approve Three Long-Term Renewable Power Purchase Agreements and Authorize the Chief Executive Officer to Execute the Agreements:
a. 16-Year Second Amended and Restated PPA for 233 MW of Solar and 132 MW of Storage with Arlington Energy Center II, LLC
b. 20-Year PPA for 18 MW of Incremental Geothermal Resource with Geysers Power Company, LLC
c. 10.5-Year PPA for 100 MW of Existing Geothermal Resource with Geysers Power Company, LLC
11. Approve Two Renewable Power Purchase Agreements (PPA’s) with Pivot Energy and One Amendment to the PPA with Radiant BMT, LLC for Local Resources to Serve the Power Share Program and Authorize the Chief Executive Officer to Execute the Agreements
12. CPA Salary Grades, Development of Retention Incentives, Contract Amendments for Chief Executive Officer and General Counsel, Employee Handbook Updates and Revisions
a. Adopt Salary Grades for CPA Employees
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
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
e. Adopt Resolution 22-12-045 Modifying CPA’s Employee Handbook Agenda Page 3
Clean Power Alliance Board of Directors Agenda Page 4 of 4 December 1, 2022
MANAGEMENT REPORT
COMMITTEE CHAIR UPDATES
Director Deborah Klein Lopez, Chair, Legislative & Regulatory Committee Director Susan Santangelo, Chair, Finance Committee
Director Robert Parkhurst, Chair, Energy Planning & Resources Committee
BOARD MEMBER COMMENTS AND OUTGOING BOARD MEMBER RECOGNITION
REPORT FROM THE CHAIR
ADJOURN – DARK IN JANUARY 2023. NEXT REGULAR MEETING ON FEBRUARY 2, 2023
Public Records: Public records that relate to any item on the open session agenda for a regular Board Meeting are available for public inspection. Those records that are distributed less than 72 hours prior to the meeting are available for public inspection at the same time they are distributed to all, or a majority of, the members of the Board. Those documents are available for inspection online at www.cleanpoweralliance.org/agendas
Agenda Page 4
Staff Report – Agenda Item 1
To: Clean Power Alliance (CPA) Board of Directors
From: Nancy Whang, General Counsel
Gabriel Monzon, Clerk of the Board
Approved by: Ted Bardacke, Chief Executive Officer
Subject: Adopt Resolution 22-12-043 Finding the Continuing Need to Meet by Teleconference Pursuant to Government Code Section 54953(e) Date: December 1, 2022
RECOMMENDATION
Adopt Resolution No. 22-12-043 finding the continuing need to meet by teleconference pursuant to Government Code Section 54953(e).
BACKGROUND/DISCUSSION
On September 20, 2021, Governor Newsom signed AB 361 which allowed meetings to be held under modified teleconferencing rules if, during a proclaimed State of Emergency, the local agency finds by resolution that meeting in person would present imminent risks to the health or safety of attendees or if state or local officials have imposed or recommended measures to promote social distancing. Any such resolution is effective only for 30 days.
CPA In-Person Meetings in 2023
The State of Emergency declared by Gov. Newsom in 2020 allowed CPA to continue to meet under AB 361’s modified teleconferencing rules. However, on October 17, 2022, Gov. Newsom announced his intent to end the State of Emergency on February 28, 2023, which means that AB 361’s modified teleconferencing rules will no longer be authorized after that date.
Resolution 22-12-043 will expire on December 31, 2022. Accordingly, starting in January 2023, CPA will return to in-person meetings and will use the Brown Act teleconference Agenda Page 5
BOARD OF DIRECTORS ITEM 1
requirements beginning with the January Executive Committee and Standing Committee meetings.1
For Committee meetings, CPA can accommodate remote participation from any publicly accessible location where an agenda can be posted. For Board meetings, CPA will have a central location at its offices in Downtown Los Angeles, and four (4) remote locations in Torrance (South Bay COG offices), Whittier (City Hall), Calabasas (City Hall), and the City of Ventura (Ventura County Government Center).
ATTACHMENT
1. Resolution No. 22-12-043 finding the continuing need to meet by teleconference
1 There is no Board meeting scheduled in January 2023.
Agenda Page 6
BOARD OF DIRECTORS ITEM 1 – ATTACHMENT 1
RESOLUTION NO. 22-12-043
RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN
POWER ALLIANCE OF SOUTHERN CALIFORNIA FINDING
THE CONTINUING NEED TO MEET BY
TELECONFERENCE PURSUANT TO GOVERNMENT
CODE SECTION 54953(e)
THE BOARD OF DIRECTORS OF CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA HEREBY RESOLVES AS FOLLOWS:
WHEREAS, all meetings of the Board Of Directors, the Executive Committee, the Energy, Finance, and Legislative and Regulatory Committee (“Three Standing Committees”), and the Community Advisory Committee (“CAC”) of Clean Power Alliance Of Southern California (“CPA”) are subject to the Ralph M. Brown Act (Cal. Gov. Code §§54950 – 54963) (“Brown Act”); and
WHEREAS, Government Code section 54953(e) of the Brown Act makes provisions for remote teleconferencing participation in meetings by members of a legislative body, without compliance with the requirements of Government Code section 54953(b)(3), subject to the existence of certain conditions; and WHEREAS, on March 4, 2020, Governor Newsom declared a State of Emergency as a result of the COVID-19 pandemic; and
WHEREAS, such State of Emergency due to COVID-19 remains in effect; and WHEREAS, COVID-19 continues to threaten the health and lives of the public; and WHEREAS, COVID-19 the Omicron subvariants of COVID-19 remain a concern, and the Los Angeles County Department of Public Health recommends measures to promote social distancing, including recommendations to avoid prolonged exposure to crowded indoor spaces.
NOW, THEREFORE, BE IT DETERMINED, AFFIRMED, AND ORDERED BY
THE BOARD OF DIRECTORS OF THE CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA THAT:
IT IS DETERMINED, AFFIRMED, AND ORDERED that due to COVID-19, holding in-person meetings of the Board of Directors, Executive Committee, Three Standing Committees, and CAC of CPA will present imminent risk to the health and safety of attendees.
IT IS FURTHER DETERMINED, AFFIRMED, AND ORDERED that meetings of the Board of Directors, Executive Committee, Three Standing Committees, and CAC of CPA may continue to meet by teleconference in accordance with Government Code section 54953(e).
Agenda Page 7
BOARD OF DIRECTORS ITEM 1 – ATTACHMENT 1
IT IS FURTHER DETERMINED, AFFIRMED, AND ORDERED that this Resolution shall take effect immediately upon its adoption and shall be effective until the earlier of (1) 30 days from the date of adoption of this Resolution, or (2) such time the Board of Directors of the Clean Power Alliance of Southern California adopts a subsequent resolution in accordance with Government Code section 54953(e)(3) to extend the time during which the Board may continue to teleconference without compliance with paragraph (3) of subdivision (b) of section 54953, or (3) the Board of Directors of the Clean Power Alliance of Southern California adopts a Resolution rescinding this Resolution.
IT IS FURTHER DETERMINED, AFFIRMED, AND ORDERED that the approval of this Resolution is not a “project” under Section 21065 of the Public Resources Code and under California Environmental Quality Act (“CEQA”) Guidelines Sections 15378(a) and is exempt under CEQA Guidelines Section 15061(b)(3).
ADOPTED AND APPROVED this ____ day of __________ 2022.
____________________________
Julian Gold, Chair
ATTEST:
____________________________
Gabriela Monzon, Secretary
Agenda Page 8
BOARD OF DIRECTORS ITEM 2
MINUTES
REGULAR MEETING of the Board of Directors of the
Clean Power Alliance of Southern California
Thursday, November 3, 2022, 2:00 p.m.
The Board of Directors conducted this meeting remotely, pursuant to the Proclamation of the State of Emergency by Governor Newsom on March 4, 2020, AB 361, and enacting CPA Resolutions, and as a response to mitigating the spread of COVID-19.
Meeting videos are available on CPA’s YouTube Channel.
www.youtube.com@CPApublicmeetings
CALL TO ORDER & ROLL CALL
Chair Julian Gold called the meeting to order at 2:00 p.m. and Gabriela Monzon, Clerk of the Board, conducted roll call.
Roll Call
1 Agoura Hills Deborah Klein Lopez Director Remote
2 Alhambra Jeff Maloney Director Remote
3 Arcadia Sho Tay Director Remote
4 Beverly Hills Julian Gold Chair Remote
5 Calabasas Mary Sue Maurer Director Remote
6 Camarillo Susan Santangelo Director Remote
7 Carson Cedric L. Hicks, Sr. Alternate Remote
8 Claremont Corey Calaycay Director Remote
9 Culver City Daniel Lee Director Remote
10 Downey Donald La Plante Alternate Remote
11 Hawaiian Gardens Ramie L. Torres Alternate Remote
12 Hawthorne Alex Monteiro Director Remote
13 Los Angeles County Sheila Kuehl Vice Chair Remote
14 Malibu Absent
15 Manhattan Beach Hildy Stern Director Remote
16 Moorpark Absent
17 Ojai Absent
18 Oxnard Bert Perello Director Remote
Agenda Page 9
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November 3, 2022 Minutes
19 Paramount Director Absent
20 Redondo Beach Ted Semaan Alternate Remote
21 Rolling Hills Estates Steve Zuckerman Director Remote 22 Santa Monica Gleam Davis Director Remote
23 Sierra Madre Robert Parkhurst Director Remote
24 Simi Valley Ruth Luevanos Director Remote
25 South Pasadena Diana Mahmud Director Remote
26 Temple City Fernando Vizcarra Director Remote
27 Thousand Oaks Kevin McNamee Director Remote
28 City of Ventura Joe Yahner Alternate Remote
29 Ventura County Absent
30 West Hollywood Lindsey Horvath Director Remote
31 Westlake Village Ned Davis Director Remote
32 Whittier Vicki Smith Alternate Remote
All votes are unanimous unless otherwise stated.
PLEDGE OF ALLEGIANCE
Vice Chair Sheila Kuehl led the pledge of allegiance.
GENERAL PUBLIC COMMENT
There was no public comment.
CONSENT AGENDA
1. Adopt Resolution 22-10-042 Finding the Continuing Need to Meet by Teleconference Pursuant to Government Code Section 54953 (e)
2. Approve Minutes from October 6, 2022, Board of Directors Meeting
3. Approve Amended and Restated Joint Powers Agreement and Authorize the Chair of the Board of Directors to Execute the Agreement as Presented
4. Receive and File Community Advisory Committee Monthly Report Motion: Director Mahmud, South Pasadena
Second: Director Calaycay, Claremont
Vote: The consent agenda was approved by a roll call vote.
REGULAR AGENDA
Action Items
5. Initial Review of the 2023 Power Charge Indifference Adjustment (PCIA) and SCE Generation Rate Levels
Agenda Page 10
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November 3, 2022 Minutes
Matt Langer, Chief Operating Officer, provided a presentation on the 2023 PCIA and Southern California Edison’s (SCE) forecasted generation rates. CPA staff conducted an initial analysis of the impact on customer bills and the expected bill comparison based on the 2023 PCIA and SCE generation rates, which still need approval by the California Public Utilities Commission (CPUC). Mr. Langer reviewed the PCIA impacts, noting that the proposed 2023 PCIA will be negative, providing customers with a PCIA line-item credit of approximately ½ cent per kilowatt hour, and CPA customers will see bill reductions of about 2% in January 2023. SCE’s generation rates are forecast to increase by about 23% in 2023 which, combined with the decreased PCIA, will put all CPA rates (except streetlighting) below SCE rates.
In response to Director Perello’s question about undercollection, Mr. Langer specified that SCE sets its rates based on a forecast to cover costs; last year, SCE rates were too low and they did not collect enough money and will need to bill their customers the following year to cover the financial loss. In response to Director Parkhurst’s questions concerning the energy price forecast, Mr. Langer indicated that CPA sets their rates in time to adjust for high energy price periods and that CPA does not use benchmarks, but rather looks at forward prices across different time periods whereas SCE takes the average of market forward prices over a period of time and determines their rates. Director Torres inquired about the streetlighting rates, and Mr. Langer advised they will be 9-10% higher than SCE’s streetlighting rates in 2023. Director Stern asked if CPA’s streetlight rates were historically higher than SCE’s, and Mr. Langer confirmed that, and added that CPA’s streetlight rates are cost-based, whereas SCE’s subsidized streetlighting rates are partly based on settlements with cities, but the Board has decided not to use subsidized rates. Responding to Director Mahmud’s question, Mr. Langer identified that most of CPA’s customers were at a 4-9% premium to SCE in 2021.
In response to Chair Gold’s clarifying question about SCE’s undercollection, Mr.
Langer shared that SCE customers were paying back the 2021 undercollection of $700 million in 2022 and will be paying the 2022 undercollection of $850 million in 2023; the rate increment is attributable to a combination of the undercollection, the forward higher price of energy, and the significantly lower PCIA. Chair Gold noted that the undercollection alone would not have caused such a dramatic rate increase and Mr. Langer agreed, noting that if SCE’s rates would have reflected the new higher energy prices, they would not have had an undercollection once again.
6. Presentation on Fiscal Year 2021/2022 Financial Statements and Budget to Actual Report
David McNeil, Chief Financial Officer, announced that CPA received a clean audit opinion as a result of the independent audit; provided a presentation on the FY 2021-22 financial results. Mr. McNeil noted that CPA recorded strong financial results in FY 2021-22 and is in sound financial health. Mr. McNeil reviewed CPA’s balance sheet components and income statement, adding that the majority of CPA’s assets continue to be cash and accounts receivable. Mr. McNeil shared select financial indicators and summarized the budget to actual analysis, highlighting that CPA was within the budget for all budget line items. The exceedances in the interest and finance expenses and the amortization expense, resulting from new lease accounting standards, are offset by a reduction in Agenda Page 11
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November 3, 2022 Minutes
occupancy costs. For FY 2021-22, CPA increased its net position by $67 million (90%), increased days liquidity on hand from 44 to 61 days (39%) and paid its loan to L.A. County. Mr. McNeil also noted that operating expenses were 15% under budget, including staff costs, which were 12% under budget. Director Santangelo commented that the Finance Committee is very pleased with the clean audit and current financial standing, and the Committee had the opportunity to have an honest discussion with the auditors without staff present.
Director Parkhurst congratulated staff on a clean audit and inquired about the impacts on an investment credit grade rating. Mr. McNeil advised that CPA still needs to increase its liquidity on hand significantly to become an investment grade entity; CPA took steps to do that in the most recent rate setting process and staff has initiated discussions with Standard & Poor’s about obtaining an investment grade credit rating. Director Mahmud congratulated staff and asked several questions on the increase in capital assets, the California Independent System Operator (CAISO) collateral, and budgeted funds for customer programs. Staff clarified that the increase in capital assets relates to leasehold improvements primarily on office and computer equipment. Regarding collateral, the methodology for collateral posting requirements is the same for all CAISO participants, but the amount differs among the entities due to different factors, including credit limits and gaps between CAISO charges and credits. Lastly, staff indicated budgeted funds for customer programs were overestimated to ensure the funds were available and authorized if needed.
MANAGEMENT REPORT
Mr. Bardacke highlighted the list of awardees of Calpine grants in CPA’s territory.
Beginning in January 2023, events will be held twice a year with city managers to foster interest in additional programs, advance local sustainability objectives, and help city leadership obtain a better understanding of CPA’s role. Regarding expansion, Hermosa Beach, Santa Paula, and, most recently, the city of Monrovia voted unanimously to join CPA. Mr. Bardacke thanked Karen Schmidt, Director, Rates & Strategy, for all her hard work and Directors Parkhurst and Mahmud for their support in the city of Monrovia. Mr.
Bardacke shared that, although CPA is ahead of the budget for July and August, September’s heat event will most likely have an equalizing effect. Lastly, Mr. Bardacke noted that in June 2020, the Board approved a $4.25 million settlement between CPA and SCE in favor of CPA because of poor data and under unenrollment of customers by SCE.
According to the settlement, SCE agreed to ask the California Public Utilities Commission (CPUC) to give CPA a list of all eligible customers in CPA territory (all-territory list); the CPUC has granted permission and CPA has started to receive that all-territory list.
Approximately 5,000 accounts, mostly commercial, have been identified as actively being served by SCE, but never had the opportunity to opt-out of service by CPA. CPA will begin working with SCE on an enrollment plan with individualized outreach. Mr. Bardacke noted that this will impact the calculation of CPA’s participation rates by reducing them by a few percentage points.
Director Mahmud inquired whether there were other Community Choice Aggregations (CCAs) party to the settlement, and Mr. Bardacke indicated there are no other parties but other CCAs will now receive the all-territory list as a result of the CPUC ruling initiated by CPA; staff will ascertain if other CCAs are finding the same outcome with their all-territory lists. Responding to Director Mahmud’s question regarding enrollment omittance, Mr.
Agenda Page 12
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November 3, 2022 Minutes
Bardacke noted that staff will receive the all-territory list on a weekly basis and will monitor it effectively.
COMMITTEE CHAIR UPDATES
Director Lindsey Horvath, Chair of Legislative & Regulatory Committee, advised the Board Committee is working to build relationships with existing and newly elected leadership in Sacramento; and announced that this will be her last meeting on the CPA Board and thanked the Board for their hard work and leadership.
Director Susan Santangelo, Chair of Finance Committee, thanked Mr. McNeil and staff for their work.
Director Robert Parkhurst, Chair of Energy Planning & Resources Committee, advised the Board about two community solar projects in Pico Rivera; announced the launch of an RFO in December for Power Share projects; and announced that CPA’s Integrated Resources Plan (IRP) was recently filed. CPA is on track to have over 70% renewables in its portfolio in 2023, while SCE is at 34%; CPA’s IRP target is to hit 100% renewables by 2030, which is 15 years ahead of SB 100 requirements.
BOARD MEMBER COMMENTS
Director Monteiro thanked Director Horvath for her work in helping the City of Hawthorne achieve 100% Green. Vice Chair Kuehl thanked the Board Members for the collaborative way that the cities and counties have worked together, thanked Mr. Bardacke and Director Mahmud, and applauded Director Horvath’s work to bring important issues to the attention of legislators. Director Lee referenced roundtable infrastructure discussions; encouraged Board Members to advocate for projects that can directly benefit CPA’s member agencies in the upcoming round of infrastructure funding. Director Mahmud thanked Director Horvath for her participation and impact on CPA. Director Perello echoed comments of appreciation for Director Horvath and welcomed the City of Santa Paula.
REPORT FROM THE CHAIR
Chair Gold opined that if reliable delivery of electricity from SCE continues to be problematic, the Board should discuss what, if anything, CPA’s member agencies can do to demand reliable delivery of electricity. Chair Gold advised that former Mayor Villaraigosa is seeking ideas for spending on large regional projects, perhaps including grid resilience, infrastructure, and the use of recycling water. Chair Gold also offered words of support to those up for reelection.
ADJOURN
Chair Gold adjourned the meeting at 3:26 p.m.
Agenda Page 13
Staff Report – Agenda Item 3
To: Clean Power Alliance (CPA) Board of Directors
From: Karen Schmidt, Director, Rates and Strategy
Approved by: Ted Bardacke, Chief Executive Officer
Subject: MRW 2023 Rate Setting Professional Services Agreement Date: December 1, 2022
RECOMMENDATION
Approve the Professional Services Agreement (2023 Agreement) between CPA and MRW and Associates LLC (MRW) with a Not-to-Exceed (NTE) amount of $60,000.
BACKGROUND
Rate setting is a complex, technical, and nuanced effort CPA undertakes each year.
MRW has been CPA’s rates consultant since 2018 and has successfully helped CPA through the last four years of rate setting. MRW’s rate tools are specially designed for CPA and integrated with CPA’s processes, and MRW has deep knowledge of CPA’s rate design. MRW’s unique experience with CPA makes them specially qualified to provide guidance to CPA staff as rate setting activities are transitioned in-house over the course of the 2023 rate setting process.
CPA entered into a Services Agreement with MRW for 2022 rate setting services on March 3, 2022 with an NTE of $80,000 (2022 Agreement). Because the combined NTE of the 2022 Agreement and the 2023 Agreement would exceed the Chief Executive Officer’s signing authority of $125,000 within a 12-month period, staff is seeking Board approval of the 2023 Agreement.
Agenda Page 14
BOARD OF DIRECTORS ITEM 3
SCOPE OF WORK
The 2023 agreement includes six tasks. Task 1 includes training CPA’s recently hired Senior Advisor, Rates and Tariffs on the use of CPA rate models and tools and providing CPA with a complete set of rate setting tools, data sources, and documentation. Tasks 2- 5 include advising CPA staff on 2023 rate design and rate scenarios and reviewing 2023 rates and joint rate comparisons for quality assurance and control. Task 6 includes other as-needed consulting services.
FISCAL IMPACT
The proposed contract costs are included in the Board-approved FY 2022-2023 budget.
ATTACHMENT
1. MRW 2023 Rate Setting Professional Services Agreement Agenda Page 15
BOARD OF DIRECTORS ITEM 3 – ATTACHMENT 1
1 Clean Power Alliance of Southern California
This Professional Services Agreement (this “Agreement”), dated and effective as of December 2, 2022 (the “Effective Date”), is made by and between:
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA (“CPA”), and MRW & ASSOCIATES LLC (“Contractor”).
CPA and Contractor are sometimes collectively referred to herein as the “Parties” and each individually as a “Party.” In consideration of the terms of this Agreement, and for other good and valuable consideration, the Parties make the following acknowledgments and agreements:
RECITALS
WHEREAS, CPA may contract with a provider to support CPA’s 2023 ratemaking process;
WHEREAS, CPA selected Contractor because Contractor has the specialized expertise and experience to provide services related to CPA’s rate setting calculations and implementation, including the development of the Joint Rate Comparison for CPA, and offers CPA the Best Value;
WHEREAS, Contractor desires to provide these specified services to CPA; WHEREAS, the purpose of this Agreement is to set forth the terms and conditions upon which Contractor shall provide services to CPA; NOW, THEREFORE, it is agreed based on the consideration set forth below by the Parties to this Agreement as follows:
AGREEMENT
1. Definitions
a. The definition of “Confidential Information” is set forth in paragraph 10.b. of this Agreement.
b. “CPA Data” shall mean all data gathered or created by Contractor in the performance of the Services pursuant to this Agreement, including any customer or customer-related data.
c. “CPA Information” shall mean all confidential, proprietary, or sensitive information provided by CPA to Contractor in connection with this Agreement. d. “CPA Materials” shall mean all finished or unfinished content, writing and design of materials but not limited to messaging, design, personalization, or other materials, reports, plans, studies, documents and other writings prepared Agenda Page 16
BOARD OF DIRECTORS ITEM 3 – ATTACHMENT 1
2 by Contractor, its officers, employees and agents for CPA for the performance of, the purpose of, or in the course of implementing this Agreement. e. “CPA Product” includes collectively CPA Data, CPA Information, and CPA Materials.
f. “Services” shall mean the scope of work Contractor provides to CPA as specified in Exhibit A.
2. Exhibits and Attachments
The following exhibits and attachments are attached to this Agreement and incorporated into this Agreement by this reference:
Exhibit A – Scope of Work
Exhibit B –Reserved
Exhibit C – Compensation
Exhibit D – Reserved
Should a conflict arise between language in the body of this Agreement and any exhibit or attachment to this Agreement, the language in the body of this Agreement controls, followed by Exhibit A, B, C, and D in that order.
3. Services to be Performed by Contractor
In consideration of the payments set forth in this Agreement and in Exhibit C, Contractor shall perform services for CPA in accordance with the terms, conditions, and specifications set forth in this Agreement and in Exhibit A (“Services”).
4. Compensation
CPA agrees to compensate Contractor as specified in Exhibit C:
a. In consideration of the Services provided by Contractor in accordance with all terms, conditions and specifications set forth in this Agreement and Exhibit A, CPA shall make payment to Contractor on a time and materials basis and in the manner specified in Exhibit C.
b. Unless otherwise indicated in Exhibit C, Contractor shall invoice CPA monthly to [email protected] for all compensation related to Services performed during the previous month. Payments shall be due within fifteen (15) calendar days after the date the invoice is submitted to CPA at the specified email address. All payments must be made in U.S. dollars.
5. Term
Subject to compliance with all terms and conditions of this Agreement, the term of this Agreement shall be one (1) year from the Effective Date (“Initial Term”).
Agenda Page 17
BOARD OF DIRECTORS ITEM 3 – ATTACHMENT 1
3 6. Termination
a. Termination for Convenience. CPA may terminate the Agreement in accordance with this paragraph in whole, or from time to time in part, whenever CPA determines that termination is in CPA’s best interests. A termination for convenience, in part or in whole, shall take effect by CPA delivering to Contractor, at least thirty (30) calendar days prior to the effective date of the termination or prior to a Notice of Termination specifying the extent to which performance of the Services under the Agreement is terminated.
If the termination for convenience is partial, Contractor may submit to CPA a request in writing for equitable adjustment of price or prices specified in the Agreement relating to the portion of this Agreement which is not terminated. CPA may, but shall not be required to, agree on any such equitable adjustment.
Nothing contained herein shall limit the right of CPA and Contractor to agree upon amount or amounts to be paid to Contractor for completing the continued portion of the Agreement when the Agreement does not contain an established price for the continued portion. Nothing contained herein shall limit CPA’s rights and remedies at law.
b. Termination for Default. If Contractor fails to provide in any manner the Services required under this Agreement, otherwise fails to comply with the terms of this Agreement, or violates any ordinance, regulation or law which applies to its performance herein and such default continues uncured for thirty (30) calendar days after written notice is given to Contractor, CPA may terminate this Agreement by giving five (5) business days' written notice. If Contractor requires more than thirty (30) calendar days to cure, then CPA may, at its sole discretion, authorize additional time as may reasonably be required to effect such cure provided that Contractor diligently and continuously pursues such cure.
c. Termination for Lack of Third-Party Funding. CPA may terminate this Agreement if funding for this Agreement is reduced or eliminated by a third-party funding source. d. Effect of Termination. Upon the effective date of expiration or termination of this Agreement: (i) Contractor may immediately cease providing Services in its entirety or if a termination to a part of the Agreement, cease providing the Services that have been terminated; (ii) any and all payment obligations of CPA under this Agreement will become due immediately except any equitable adjustment pursuant to Paragraph 5(a); (iii) promptly transfer title and deliver to CPA all CPA Product or any work in progress pursuant to this Agreement; and (iv) each Party will promptly either return or destroy (as directed by the other Party) all Confidential Information of the other Party in its possession as well as any other materials or information of the other Party in its possession.
Upon such expiration or termination, and upon request of CPA, Contractor shall reasonably cooperate with CPA to ensure a prompt and efficient transfer of all data, documents and other materials to CPA in a manner such as to minimize the impact of expiration or termination on CPA’s customers.
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4 7. Contract Materials
CPA owns all right, title and interest in and to all CPA Materials and CPA Data. Upon the expiration of this Agreement, or in the event of termination, CPA Materials and all CPA Information, in whatever form and in any state of completion, shall remain the property of CPA and shall be promptly returned to CPA. Upon termination, Contractor may make and retain a copy of such Contract Materials if required by law or pursuant to the Contractor’s reasonable document retention or destruction policies.
8. Payments of Permits/Licenses
Contractor bears responsibility to obtain any license, permit, or approval required for it to provide the Services to be performed under this Agreement at Contractor’s own expense prior to commencement of the Services.
9. No Recourse against Constituent Members
CPA 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 the Joint Powers Agreement and is a public entity separate from its constituent members. CPA shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Contractor shall have no rights and shall not make any claims, take any actions or assert any remedies against any of CPA’s constituent members in connection with this Agreement.
10. Confidential Information
a. Duty to Maintain Confidentiality. Contractor agrees that Contractor will hold all Confidential Information in confidence, and will not divulge, disclose, or directly or indirectly use, copy, digest, or summarize, any Confidential Information unless necessary to comply with any applicable law, regulation, or in connection with any court or regulatory proceeding applicable in which case, any disclosure shall be subject to this paragraph, 10.c., and 10.d., below. b. Definition of “Confidential Information”. The following constitutes “Confidential Information,” whether oral or written: (a) the terms and conditions of, and proposals and negotiations related to, this Agreement, (b) information, in whatever form, that CPA shares with Contractor in the course and scope of this Agreement, or (c) information that either Contractor stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other.
Confidential Information shall not include: (l) information that is generally available to the public or in the public domain at the time of disclosure; (2) information that becomes publicly known other than through any breach of this Agreement by Contractor or its Representatives; (3) information which is subsequently lawfully and in good faith obtained by Contractor or its Representatives from a third party, as shown by documentation sufficient to establish the third party as the source of the Confidential Information; provided that the disclosure of such information by such third party is not known by Contractor or its Representatives to be in breach of a confidentiality agreement or other similar obligation of confidentiality; (4) information that Contractor or Agenda Page 19
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5 its Representatives develop independently without use of or reference to Confidential Information provided by Contractor; or (5) information that is approved for release in writing by Contractor.
c. California Public Records Act. The Parties acknowledge and agree that the Agreement including but not limited to any communication or information exchanged between the Parties, any deliverable, or work product 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 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. d. Third Party Request for Confidential Information. Upon request or demand of any third person or entity not a Party hereto pursuant to the California Public Records Act for production, inspection and/or copying of Confidential Information (“Requested Confidential Information”), CPA will as soon as practical notify Contractor in writing via email that such request has been made. CPA will be solely responsible for taking at its sole expense whatever legal steps are necessary to prevent release to the third party of the Confidential Information designated by Contractor. If Contractor takes no such action after receiving the foregoing notice from CPA, CPA 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 Contractor does take or attempt to take such action, Contractor agrees to indemnify and hold harmless CPA, its officers, directors, employees and agents (“CPA Indemnified Parties”), from any claims, liability, award of attorneys’ fees, or damages, and to defend any action, claim or lawsuit brought against any of CPA Indemnified Parties for Contractor’s attempt to prevent disclosure or CPA’s refusal to disclose any Confidential Information.
11. Insurance
All required insurance coverages shall be substantiated with a certificate of insurance and must be signed by the insurer or its representative evidencing such insurance to CPA within 10 business days after the Agreement is fully executed. The general liability policy shall be endorsed naming Clean Power Alliance of Southern California and its employees, officers and agents as additional insureds. The certificate(s) of insurance and required endorsement shall be furnished to CPA prior to commencement of work and maintained throughout the Term and any Renewal Term. Each certificate shall provide for thirty (30) days advance written notice to CPA of any cancellation or reduction in coverage. Said policies shall remain in force through the life of this Agreement and shall be payable on a per occurrence basis only, except those required by paragraph (d) below which may be provided on a claims-made basis consistent with the criteria noted therein.
Nothing herein shall be construed as a limitation on Contractor’s obligation under paragraph 6 of this Agreement to indemnify, defend, and hold CPA harmless from any and all liabilities arising from the Contractor’s negligence, recklessness or willful misconduct in the performance of this Agreement. CPA agrees to timely notify the Agenda Page 20
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6 Contractor of any negligence claim.
Failure to provide and maintain the insurance required by this Agreement will constitute a material breach of the Agreement. In addition to any other available remedies, CPA may suspend payment to the Contractor for any services provided during any time that insurance was not in effect and until such time as the Contractor provides adequate evidence that Contractor has obtained the required coverage. a. General Liability
The Contractor shall maintain a commercial general liability insurance policy in an amount of no less than one million ($1,000,000.00) with a two million dollar ($2,000,000.00) aggregate limit. CPA shall be named as an additional insured on the commercial general liability policy and the Certificate of Insurance shall include an additional endorsement page.
b. Auto Liability
Where the services to be provided under this Agreement involve or require the use of any type of vehicle by Contractor in order to perform said services, Contractor shall also provide comprehensive business or commercial automobile liability coverage including non-owned and hired automobile liability in the amount of one million dollars combined single limit ($1,000,000.00).
c. Workers’ Compensation
The Contractor acknowledges the State of California requires every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of the Labor Code. If Contractor has employees, a copy of the certificate evidencing such insurance or a copy of the Certificate of Consent to Self-Insure shall be provided to CPA prior to commencement of work. d. Professional Liability Insurance
Coverages required by this paragraph may be provided on a claims-made basis with a “Retroactive Date” either prior to the date of the Agreement or the beginning of the contract work. If the policy is on a claims-made basis, coverage must extend to a minimum of twelve (12) months beyond completion of contract work. If coverage is cancelled or non-renewed, and not replaced with another claims made policy form with a “retroactive date” prior to the Agreement effective date, the Contractor must purchase “extended reporting” coverage for a minimum of twelve (12) months after completion of contract work.
Contractor shall maintain a policy limit of not less than $1,000,000.00 per incident. If the deductible or self-insured retention amount exceeds $100,000.00, CPA may ask for evidence that Contractor has segregated amounts in a special insurance reserve fund or Contractor’s general insurance reserves are adequate to provide the necessary coverage and CPA may conclusively rely thereon.
Contractor shall be responsible for initiating, maintaining and supervising all safety precautions and programs in connection with the performance of the Agreement.
Contractor shall monitor the safety of the job site(s) during the project to comply with all applicable federal, state, and local laws, and to follow safe work practices.
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7 12. Indemnification
Contractor agrees to indemnify, defend, and hold harmless CPA, its employees, officers, and agents, from and against, and shall assume full responsibility for payment of all wages, state or federal payroll, social security, income or self-employment taxes, with respect to Contractor’s performance of this Agreement. Contractor further agrees to indemnify, and hold harmless CPA from and against any and all third- party claims, liabilities, penalties, forfeitures, suits, costs and expenses incident thereto (including costs of defense, settlement, and reasonable attorney’s fees), which CPA may hereafter incur, become responsible for, or pay out, as a result of death or bodily injuries to any person, destruction or physical damage to tangible property, or any violation of governmental laws, regulations or orders, to the extent caused by Contractor’s negligent acts, errors or omissions, or the negligent acts, errors or omissions of Contractor’s employees, agents, or subcontractors while in the performance of the terms and conditions of the Agreement, except for such loss or damage arising from the sole negligence or willful misconduct of CPA, elected and appointed officers, employees, agents and volunteers.
13. Independent Contractor
a. Contractor acknowledges that Contractor, its officers, employees, or agents will not be deemed to be an employee of CPA for any purpose whatsoever, including, but not limited to: (i) eligibility for inclusion in any retirement or pension plan that may be provided to employees of Contractor; (ii) sick pay; (iii) paid non-working holidays; (iv) paid vacations or personal leave days; (v) participation in any plan or program offering life, accident, or health insurance for employees of Contractor; (vi) participation in any medical reimbursement plan; or (vii) any other fringe benefit plan that may be provided for employees of Contractor.
b. Contractor declares that Contractor will comply with all federal, state, and local laws regarding registrations, authorizations, reports, business permits, and licenses that may be required to carry out the work to be performed under this Agreement. Contractor agrees to provide CPA with copies of any registrations or filings made in connection with the work to be performed under this Agreement.
14. Compliance with Applicable Laws
The Contractor shall comply with any and all applicable federal, state and local laws and resolutions affecting Services covered by this Agreement.
15. Nondiscriminatory Employment
Contractor and/or any permitted subcontractor, shall not unlawfully discriminate against any individual based on race, color, religion, nationality, sex, sexual orientation, age, protected veteran status, or condition of disability. Contractor and/or any permitted subcontractor understands and agrees that Contractor and/or any permitted subcontractor is bound by and will comply with the nondiscrimination mandates of all federal, state and local statutes, regulations and ordinances.
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8 16. Work Product.
All finished and unfinished reports, plans, studies, documents and other writings prepared by and for Contractor, its officers, employees and agents in the course of implementing this Agreement shall become the sole property of CPA upon payment to Contractor for such work. CPA shall have the exclusive right to use such materials in its sole discretion without further compensation to Contractor or to any other party. Contractor shall, at CPA’s expense, provide such reports, plans, studies, documents and writings to CPA or any party CPA may designate, upon written request. Contractor may keep file reference copies of all documents prepared for CPA.
17. Notices
Any notice, request, demand, or other communication required or permitted under this Agreement shall be deemed to be properly given when both: (1) transmitted via email to the email address listed below; and (2) sent to the physical address listed below by either being deposited in the United States mail, postage prepaid, or deposited for overnight delivery, charges prepaid, with an established overnight courier that provides a tracking number showing confirmation of receipt.
In the case of CPA, to:
Name/Title: Theodore Bardacke, Chief Executive Officer
Address: 801 S. Grand Ave., Suite 400, Los Angeles, CA 90017 Telephone: (213) 269-5890
Email: [email protected]
In the case of Contractor, to:
Name/Title: Mark Fulmer, President
Address: 1736 Franklin Street, 7th Floor
Oakland, CA 94612
Telephone: (510) 834-1999 x240
Email: [email protected]
18. Assignment
Neither this Agreement nor any of the Parties’ rights or obligations hereunder may be transferred or assigned without the prior written consent of the other Party. Subject to the preceding sentence, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.
19. Subcontracting
Contractor may not subcontract Services to be performed under this Agreement without the prior written consent of CPA. If the CPA’s written consent to a subcontract is not obtained, Contractor acknowledges and agrees that CPA will not be responsible for any fees or expenses claimed by such subcontractor.
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9 20. Retention of Records and Audit Provision
Contractor and any subcontractors authorized by the terms of this Agreement shall keep and maintain on a current basis full and complete documentation and accounting records, employees’ time sheets, and correspondence pertaining to this Agreement. Such records shall include, but not be limited to, documents supporting all income and all expenditures.
CPA shall have the right, during regular business hours, to review and audit all records relating to this Agreement during the Agreement period and for at least five (5) years from the date of the completion or termination of this Agreement. Any review or audit may be conducted on Contractor’s premises, or, at CPA’s option, Contractor shall provide all records within a maximum of fifteen (15) days upon receipt of written notice from CPA.
Contractor shall refund any monies erroneously charged. Contractor shall have an opportunity to review and respond to or refute any report or summary of audit findings and shall promptly refund any overpayments made by CPAbased on undisputed audit findings.
21. Conflict of Interest
a. No CPA employee whose position with the CPA enables such employee to influence the award of this Agreement or any competing Agreement, and no spouse or economic dependent of such employee, shall be employed in any capacity by the contractor or have any other direct or indirect financial interest in this Agreement. No officer or employee of the Contractor who may financially benefit from the performance of work hereunder shall in any way participate in the CPA’s approval, or ongoing evaluation, of such work, or in any way attempt to unlawfully influence the CPA’s approval or ongoing evaluation of such work.
b. The Contractor shall comply with all conflict of interest laws, ordinances, and regulations now in effect or hereafter to be enacted during the term of this Agreement. The Contractor warrants that it is not now aware of any facts that create a conflict of interest. If the Contractor hereafter becomes aware of any facts that might reasonably be expected to create a conflict of interest, it shall immediately make full written disclosure of such facts to CPA. Full written disclosure shall include, but is not limited to, identification of all persons implicated and a complete description of all relevant circumstances. Failure to comply with the provisions of this paragraph shall be a material breach of this Agreement.
22. Publicity
Contractor shall not issue a press release or any public statement regarding the Agreement, Services contemplated by this Agreement, or any other related transaction unless CPA has agreed in writing the contents of any such public statement.
23. Governing Law, Jurisdiction, and Venue
This Agreement shall be governed by, and construed in accordance with, the laws of the State of California. The Contractor agrees and consents to the exclusive jurisdiction of the courts of the State of California for all purposes regarding this Agreement and further agrees and consents that venue of any action brought hereunder shall be exclusively in Agenda Page 24
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10 the County of Los Angeles.
24. Amendments
None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Parties.
25. Severability
Should any provision of this Agreement be held invalid or unenforceable by a court of competent jurisdiction, such invalidity will not invalidate the whole of this Agreement, but rather, the remainder of the Agreement which can be given effect without the invalid provisions, will continue in full force and effect and will in no way be impaired or invalidated.
26. Complete Agreement
This Agreement constitutes the entire Agreement between the parties. No modification or amendment shall be valid unless made in writing and signed by each party. Failure of either party to enforce any provision or provisions of this Agreement will not waive any enforcement of any continuing breach of the same provision or provisions or any breach of any provision or provisions of this Agreement.
27. Counterparts
This Agreement may be executed in one or more counterparts, including facsimile(s), emails, or electronic signatures, each of which shall be deemed an original and all of which together will constitute one and the same instrument IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
MRW & Associates LLC Clean Power Alliance of Southern California ____________________________________ ____________________________________ By: Mark Fulmer By: Theodore Bardacke
Title: President Title: Chief Executive Officer
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Exhibit A – Scope of Work
PROJECT TASKS AND DELIVERABLES
Contractor shall support CPA’s 2023 ratemaking, as specified by CPA and at CPA’s discretion, by training and supporting CPA staff in conducting the rate setting process using tools and processes developed in previous CPA ratemakings.
Contractor must complete the tasks set forth below:
Task #1: CPA Staff Training
a. Contractor shall meet with CPA staff on a weekly basis to review and explain rate setting tools and processes, on a schedule to be mutually agreed upon by Contractor and CPA.
b. Contractor shall provide CPA staff with a complete set of rate setting tools, data sources, and documentation, including a finalized 2022 edition of the CPA Rates Handbook.
Deliverables for Task #1: Handoff of rate setting tools, data and Rates Handbook to CPA staff.
Task #2: Rate Scenario Calculations
a. Contractor shall provide guidance and support to CPA staff to prepare sets of detailed CPA rates reflecting different rate setting scenarios upon CPA request, and to provide the rates to CPA’s revenue forecaster to assess the financial impact to CPA of different rate setting approaches. b. Contractor shall review rate scenario calculations to ensure accuracy and quality control.
Deliverables for Task #2: Rate scenario calculations reviewed for accuracy and completeness as set forth above.
Task #3: 2023 Rate Setting Implementation
Contractor shall provide guidance and support to CPA staff to prepare final detailed rates for implementation, in the format directed by CPA’s data manager, once CPA has decided on a rate setting approach. The detailed rates shall include separate rate summary tables for review by CPA’s Board, rate summaries for posting to CPA’s website, and a rate spreadsheet for implementation by CPA’s billing system.
Deliverables for Task #3: Final 2023 rates reviewed for accuracy and completeness, including but not limited to rate summary tables for review by CPA’s Board, rate summaries for posting to CPA’s website, and a rate spreadsheet for implementation by CPA’s billing system.
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Task #4: Joint Rate Comparison (“JRC”) Updates
Contractor will provide guidance and support to CPA staff to produce JRCs both for mailing and posting to CPA’s website for its new rates, and for any Southern California Edison (“SCE”) rate changes in 2023. Contractor shall train CPA staff on the use and maintenance of the spreadsheet tool developed for this purpose.
Deliverables for Task #4: Final JRCs for mailing and posting to CPA’s website reviewed for accuracy and completeness, as set forth above, and handoff of JRC tool to CPA staff.
Task #5: Historical Rate Comparisons
Contractor shall train CPA staff in the use and maintenance of the tool developed to automate preparation of reports that analyze CPA and SCE rate trends historically.
Deliverables for Task #5: Historical rate comparison tool handed off to CPA staff.
Task #6: As-Needed Consulting
a. Contractor shall provide as-needed consulting services for matters related to rates, but outside of the specific scope of work identified in Tasks 1-5. b. The parties shall agree in advance when a request falls under Task 6.
Deliverable for Task #6: Completion of additional consulting services as set forth above.
SCHEDULE AND COORDINATION
Tasks 1-5 listed above will be undertaken in close coordination with CPA staff. Contractor will discuss initial findings and approaches assist in addressing any identified issues before work products or deliverables are finalized. CPA staff will provide timely direction, feedback, and input in developing the work product.
Existing timelines for CPA and SCE rate setting drive the schedule for the Scope of Work. The key events for CPA’s 2023 Rate Setting Process are listed below. Note: rows shaded in grey are milestones that inform the schedule, but do not indicate Scope of Work due dates. Dates are subject to change based on when SCE publishes rates and timing of CPA Board process.
Date Action
December 2022 Complete training and handoff of rate setting tools (Task 1) April 2023 Complete review of rate scenario analysis (Task 2) May 4, 2023 CPA’s Board of Directors adopts direction on 2023 rate setting approach
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May 2023 Complete review of final detailed rate scenario calculations (Task 3)
May 2023 Handoff of JRC and rate comparison tools (Tasks 4 and 5) June 1, 2023 CPA’s Board of Directors adopts 2023 rates for implementation Agenda Page 28
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Exhibit B – Intentionally Left Blank
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Exhibit C – Compensation
Contractor shall satisfactorily provide all the contemplated Services detailed in Exhibit A at the following hourly rates specified in the table below and in compliance with the terms and conditions of this Agreement.
Name Company/Subcontractor Hourly Rate
Mark Fulmer MRW & Associates, LLC $350
Mary Neal MRW & Associates, LLC $320
Benjamin Kern MRW & Associates, LLC $160
Any travel, administrative expenses, and materials (hereinafter, “Expenses”) will be billed in the amount incurred by Contractor for actual out-of-pocket cost, without any additional mark-up by Contractor. Any Expenses incurred shall be billed for the month in which the Expenses are incurred. Expense reports detailing all Expenses, along with receipts, shall be presented to CPA for reimbursement. All expenses must be approved by CPA in advance writing before they are incurred.
The Total Maximum Amount that CPA shall pay Contractor, including any subcontractor that the Contractor may retain, for all Services and Expenses to be provided under this Professional Services Agreement shall not exceed Sixty Thousand Dollars ($60,000) ("Not-to-Exceed" or "NTE").
Contractor shall satisfactorily perform and complete, in the judgement of CPA, all required Services in accordance with Exhibit A notwithstanding the fact that total payment from CPA shall not exceed the NTE.
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Exhibit D – Intentionally Left Blank
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Staff Report – Agenda Item 4
To: Clean Power Alliance (CPA) Board of Directors
From: Geoff Ihle, Director, Energy Market Risk Management Approved by: Ted Bardacke, Chief Executive Officer
David McNeil, Chief Financial Officer
Subject: 2022 Q3 Risk Management Team Report
Date: December 1, 2022
RECOMMENDATION
Receive and file.
ATTACHMENT
1. 2022 Q3 RMT Report
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Quarterly Report of Risk Management Team
July 1, 2022 through September 30, 2022 (Q3 2022)
I. Introduction
The Board of Directors of Clean Power Alliance (CPA) approved an Energy Risk Management Policy (ERMP) at its July 12, 2018 meeting, which provides the framework for conducting procurement activities in a manner that maximizes the probability of CPA meeting its portfolio, reliability, and financial goals. The ERMP was subsequently amended in July 2019, July 2020, July 2021, and July 2022.
The ERMP requires quarterly reporting to the Board on the activities, projected financial performance, and general market outlook facing CPA. The Risk Management Team (RMT)1 submits this report in accordance with this requirement. The RMT also reports on ERMP compliance monthly to both the Finance Committee and Energy Planning & Resources Committee.
II. Risk Management Team Activities
The RMT is responsible for implementing, maintaining, and overseeing compliance with the ERMP and for maintaining the Energy Risk Hedging Strategy. The primary goal of the RMT is to ensure that the procurement activities of CPA are executed within the guidelines of the ERMP and are consistent with Board directives. Several business practices are prescribed in the ERMP.
What follows is a summary of CPA’s compliance with these practices as outlined in the Policy.
A. ERMP Acknowledgement Form
It is the policy of CPA that all CPA Representatives participating in any activity or transaction within the scope of the ERMP shall sign on an annual basis or upon any revision, a statement acknowledging compliance with the ERMP. Execution of the ERMP Acknowledgement Form was completed by Board members, relevant CPA staff, and relevant consultants.
There are no existing or potential conflicts of interest to report. All business has been conducted consistent with applicable laws and regulations.
B. Transaction Types
The ERMP includes a list of approved transaction types. All products that have been purchased or sold by CPA during the current quarterly period represent an approved transaction type as listed in Appendix C of the ERMP.
1 The RMT is comprised of CPA’s Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, and Vice President of Power Supply.
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C. Counterparty Suitability
The ERMP requires that all counterparties with whom CPA transacts must be reviewed for creditworthiness and assigned a credit limit. A formal Counterparty Credit Protocol document that describes the method for evaluating counterparties and establishing a credit limit was developed by CPA’s Chief Financial Officer and CPA’s former scheduling coordinator, The Energy Authority (TEA). The Protocol was approved by the Chief Executive Officer, in consultation with the RMT, and enacted in Q1 2019.
Pursuant to the ERMP, no counterparty credit limit may exceed $50 million. Due to elevated forward power prices, during the quarter, several of CPA’s counterparties credit exposures continued to exceed their designated credit limits. CPA continues to manage these exposures through margining and other credit enhancement requests where contractually permitted. As anticipated in the Q2 2022 RMT report, CPA’s credit exposure to these counterparties shrunk significantly over the third quarter. It is expected to continue to shrink as these counterparties deliver energy to CPA through Q4 2022.
D. System of Record
As required by the ERMP, all transactions are being stored both in CPA’s systems as well as in CPA’s Scheduling Coordinator’s (currently Tenaska Power Services, or TPS) trading and risk management system. Similarly, all transaction approvals are being logged and stored on TPS’s servers, with information being made available to CPA staff via a secure web portal. The transaction record also includes the confirmation letters for each transaction. CPA is in the process of transitioning its transaction repository to an internal data warehouse, which will provide additional functionality and security features.
E. Position Tracking and Management Reporting
To manage risk, the ERMP requires the regular production of various reports. The status of each report required by policy follows:
• Financial Model Forecast: The financial model captures projected revenues and energy and operating costs and produces various financial reports and forecasts on an accrual basis. The model uses load forecast data produced by CPA, energy contract details from CPA’s Front Office and Middle Office systems, revenue projections from CPA’s revenue model2 and forward prices from the ICE Data Service and TPS. • Net Position Report: Short- and long-term net position reports are in production, managed directly by CPA procurement staff, and linked to TPS’s trade capture system or to CPA’s internal energy trading and risk management system (ETRM), currently in development.
The short-term net position report updates daily and incorporates the current weather outlook for the next 60 days to show net positions for the current and next months. The long-term net position report assumes normal weather and shows net positions through the balance of the current year and prompt four years.
• Counterparty Credit Exposure: CPA is adhering to the credit policies included in the ERMP, with the above-mentioned market price-induced exceedances being managed by 2 CPA’s revenue model is currently maintained by a third-party consultant, MRW. Plans are in place to transition that model to being maintained in-house.
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the RMT. CPA receives daily updates of counterparty credit exposures on both a notional and mark-to-market basis.
• Monthly Risk Analysis: The ERMP requires both stress testing of financial results, as well as probability-based assessments of future financial projections. CPA continues to implement and improve risk analysis tools to stress test financial results and validate potential hedging transactions. Recurring monthly risk analysis focuses is on the prompt 12 months, while specific studies extend through calendar 2024. • Quarterly Board Report: Subject of this report.
F. Delegation of Authority
All executed transactions during the current period have been approved consistent with the Delegation of Authority outlined in Section 5 of the ERMP.
G. Limit and Other Compliance Violations
The ERMP requires that transaction volumes should not be executed that exceed the requirements of meeting CPA’s load (energy and capacity), renewable and/or carbon free energy requirements. The ERMP designates specific prompt-year (PY) up to prompt 5-year hedge targets for different product types.
For energy, these targets are measured at the end of the quarter for the following prompt quarter, e.g., Q2 for prompt Q3. RMT reviewed the relevant quarterly hedge targets for 2022 and beyond and identified the following policy deviation:
Policy Deviation Required Action
Due to an update to the load forecast
(resulting in higher forecast energy usage)
and a delay in commercial online dates of two
projects under long term contract (resulting in
lower forecast supply), the Q2 and Q3 2023
periods did not meet the 85% Energy Risk
Hedging Strategy minimum.
The Q2 2023 deviation was resolved in
September 2022 as CPA acquired additional
hedges. Based on planned hedging
activities, the Q3 2023 deviation is expected
to be resolved by the end of December
2022.
H. Training
The ERMP acknowledges the importance of ongoing education as part of its risk management framework. Consistent with this, the ERMP outlines certain training requirements. All procurement and risk management staff, including the members of the RMT, were up to date on required training.
I. Hedging Strategy
With the exception of the deviation described in Section G, CPA is compliant with the hedging strategy provided in Appendix A of the ERMP.
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J. Financial Performance
CPA recorded net energy revenue (electricity revenue less cost of energy) of $4.7 million in Q1FY 2022-23. The results were 87% below budget and reflected the impact of an extreme heat event that occurred in early September 2022.
III. General Market Conditions
Pricing in Q3 2022 reflected summer temperature and load conditions, with elevated market prices compared to the previous quarter. Load was flat to forecast in July and August 2022, and higher than forecast in September 2022 as temperatures increased. Day Ahead energy market prices were higher than energy market forward prices used to set CPA 2022/2023 rates and budget.
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Staff Report – Agenda Item 5
To: Clean Power Alliance (CPA) Board of Directors
From: David McNeil, Chief Financial Officer
Approved by: Ted Bardacke, Chief Executive Officer
Subject: Receive and File Fiscal Year Q1 Financial Report Date: December 1, 2022
RECOMMENDATION
Receive and file.
ATTACHMENT
1. Q1 Financial Report
Agenda Page 37
2022 2021
Current assets
Cash and cash equivalents $ 98,830,346 $ 53,357,388
Accounts receivable, net of allowance 155,511,536 131,919,867 Accrued revenue 73,173,244 55,978,851
Other receivables 13,961,875 3,453,783
Prepaid expenses 10,512,598 3,580,033
Deposits 44,142,542 17,894,808
Restricted cash 2,400,000 3,614,700
Total current assets 398,532,141 269,799,430
Noncurrent assets
Capital assets, net of depreciation 709,857 608,858
Intangible - right-to-use lease asset 2,488,924 -
Deposits 88,876 88,875
Total noncurrent assets 3,287,657 697,733
Total assets $ 401,819,798 $ 270,497,163
Current liabilities
Accounts payable $ 2,989,330 $ 4,611,547
Accrued cost of electricity 196,468,151 127,308,417
Other accrued liabilities 4,068,916 2,020,200
User taxes and energy surcharges due to other governments 10,139,202 8,353,140 Loans payable to County of Los Angeles - 30,000,000
Security deposits from energy suppliers 259,675 5,769,400 Unearned program funds 3,930,813 2,005,420
Lease liability, current 363,658 -
Total current liabilities 218,219,746 180,068,125
Noncurrent liabilities
Bank Loan 40,000,000 -
Supplier security deposits 3,132,849 6,904,000
Deferred rent - 183,855
Lease liability, noncurrent 2,560,183 -
Total noncurrent liabilities 45,693,032 7,087,855
Total liabilities $ 263,912,778 $ 187,155,980
Investment in capital assets $ 274,939 $ 608,858
Restricted for collateral 2,400,000 3,614,700
Unrestricted 135,232,081 79,117,626
Total net position $ 137,907,020 $ 83,341,183
NET POSITION
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
STATEMENT OF NET POSITION
AS OF SEPTEMBER 30, 2022
ASSETS
LIABILITIES
Agenda Page 38
2022 2021
OPERATING REVENUES
Electricity sales, net 377,176,853 $ 297,566,657 $
Other revenue 361,189 225,638
Total operating revenues 377,538,042 297,792,295
OPERATING EXPENSES
Cost of electricity 372,887,614 281,724,860
Contract services 4,697,629 4,340,088
Staff compensation 2,791,386 2,004,434
General and administration 555,035 505,528
Total operating expenses 380,931,665 288,574,910
Operating income (loss) (3,393,623) 9,217,385
NONOPERATING REVENUES (EXPENSES)
Interest income 190,780 8,746
Interest and related expenses (125,492) (114,247)
Interest expense - lease (17,873) -
Total nonoperating revenues (expenses) 47,414 (105,501) CHANGE IN NET POSITION 9,111,884 (3,346,208)
Net position at beginning of period 141,253,228 74,207,784 Net position at end of period 137,907,020 $ 83,319,668 $
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
FOR YEARS ENDED SEPTEMBER 30, 2022
Agenda Page 39
2022 2021
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Net operating income (loss) $ (3,393,623) $ 9,217,385
Adjustments to reconcile operating income to net
cash provided (used) by operating activities
Depreciation expense 54,525 27,470
Amortization expense 95,727 -
Revenue adjusted for allowance for uncollectible accounts 5,495,854 4,696,311 (Increase) decrease in:
Accounts receivable (64,436,618) (48,392,277)
Other receivables (6,302,411) (1,040,730)
Accrued revenue (17,676,453) (79,787)
Prepaid expenses (4,374,194) 608,171
Deposits (18,027,012) (4,567,966)
Increase (decrease) in:
Accounts payable (1,536,984) (172,600)
Energy market settlements payable (8,623,026) (6,719,550) Accrued cost of electricity 121,461,970 45,869,635
Other accrued liabilities 1,631,290 295,746
User taxes due to other governments 4,112,844 3,024,040 Supplier security deposits (4,524,976) (37,789,000)
Unearned program funds 426,780 407,433
Net cash provided (used) by operating activities 4,383,694 (34,615,719)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Loan proceeds 60,000,000 30,000,000
Principal payments on loan (20,000,000) -
Interest and related expense payments (91,446) (81,492) Net cash provided (used) by non-capital
financing activities 39,908,554 29,918,508
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Payments to acquire capital assets (90,125) (146,415)
Payments on lease (for both principal and interest) (100,228) - Net cash provided (used) by capital and related financing activities (190,353) (146,415)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received 190,780 8,746
Net cash provided (used) by investing activities 190,780 8,746 Net change in cash and cash equivalents 44,292,675 (4,834,880) Cash and cash equivalents at beginning of period 56,937,672 61,806,968 Cash and cash equivalents at end of period $ 101,230,346 $ 56,972,088 Reconciliation to the Statement of Net Position
Cash and cash equivalents (unrestricted) $ 98,830,346 $ 53,357,388 Restricted cash 2,400,000 3,614,700
Cash and cash equivalents $ 101,230,346 $ 56,972,088
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
STATEMENT OF CASH FLOWS
FOR YEARS ENDED SEPTEMBER 30, 2022
Agenda Page 40
2022/23 YTD
Budget
2022/23 YTD
Actual
2022/23 YTD
Budget Variance
(Under) Over
2022/23 YTD
Actual /
Budget % 2022/23 Budget
2022/23
Remaining
Budget
2022/23
Remaining
Budget %
Operating revenues
Revenue - electricity, net $ 359,469,732 $ 377,176,853 $ 17,707,121 105% $ 1,110,780,980 $ 733,604,127 66% Other revenues 713,510 361,189 (352,321) 51% 2,742,000 2,380,811 87% Total operating revenues 360,183,242 377,538,042 17,354,800 105% 1,113,522,980 735,984,938 66% Energy costs
Energy procurement 324,031,365 372,887,614 48,856,250 115% 870,533,000 497,645,386 57% Total energy costs 324,031,365 372,887,614 48,856,250 115% 870,533,000 497,645,386 57% Operating revenues less energy costs 36,151,877 4,650,428 (31,501,450) 13% 242,989,980 238,339,553 98% Operating Expenditures
Staffing 3,217,190 2,791,386 (425,804) 87% 13,976,000 11,184,614 80% Technical services 363,750 288,281 (75,469) 79% 1,436,000 1,147,719 80% Legal services 356,060 168,409 (187,651) 47% 1,243,000 1,074,591 86% Other professional services 566,754 164,261 (402,494) 29% 1,902,000 1,737,739 91% Communications and outreach 506,995 210,779 (296,216) 42% 2,018,000 1,807,221 90% Mailers 727,045 440,314 (286,731) 61% 1,346,000 905,686 67% Billing data manager 2,602,735 2,601,884 (851) 100% 10,474,000 7,872,116 75% SCE services 528,990 480,000 (48,990) 91% 2,116,000 1,636,000 77% Customer programs 1,148,005 343,701 (804,304) 30% 4,663,000 4,319,299 93% General and administrations 1,450,980 555,035 (895,945) 38% 5,877,000 5,321,965 91% Total operating expenditures 11,468,504 8,044,050 (3,424,454) 70% 45,051,000 37,006,949 82% Operating income 24,683,373 (3,393,623) (28,076,996) -14% 197,938,981 201,332,603 102% Non-operating revenues (expenditures)Interest income 121,500 190,780 69,280 157% 486,000 295,220 61% Finance and interest expense (236,505) (143,365) 93,140 61% (562,000) (418,635) 74% Total non-operating revenues (expenditures) (115,005) 47,414 162,419 -41% (76,000) (123,414) Change in net position 24,568,368 (3,346,208) (27,914,577) 197,862,981 201,209,189 102% Other uses Capital outlay 56,125 90,125 34,000 161% 224,500 134,375 60% Depreciation and Amortization (157,020) (150,252) 6,768 96% (622,000) (471,748) 76% Total other uses (100,895) (60,127) 40,768 60% (397,500) (337,373) 85% Change in fund balance $ 24,669,263 $ (3,286,081) $ (27,955,344) -13% $ 198,260,481 $ 201,546,562
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
FOR YEAR ENDED SEPTEMBER 30, 2022
Agenda Page 41
Note Sep-21 Dec-21 Mar-22 Jun-22 Sep-22
1 Working Capital 89,731,305 107,892,204 111,423,404 147,468,653 180,312,395 2 Current Ratio 1.5 1.8 1.9 2.5 1.8
3 Days Sales Outstanding 40 39 39 41 38
4 Equity 83,341,183 101,176,027 105,176,451 141,253,228 137,907,020 5 Equity to Assets % 31% 42% 44% 56% 34%
6 Available Cash 53,357,388 67,450,194 85,085,627 54,537,672 98,830,346 7 Available Line of Credit 80,000,000 79,853,000 79,853,000 79,853,000 39,853,000 8 Total Liquidity 133,357,388 147,303,194 164,938,627 134,390,672 138,683,346 9 Days Liquidity on Hand (TTM) 60 67 75 61 57
10 Gross Margin 5% 8% 8% 11% 1%
11 Net Margin 3% 6% 5% 8% -1%
Percentage Change from Prior Quarter
Working Capital 12% 20% 3% 32% 22%
Current Ratio -4% 20% 6% 29% -26%
Days Sales Outstanding 0% -4% 1% 3% -8%
Equity 12% 21% 4% 34% -2%
Equity to Assets % -6% 35% 6% 27% -39%
Available Cash -8% 26% 26% -36% 81%
Available Line of Credit 117% 0% 0% 0% -50%
Total Liquidity 40% 10% 12% -19% 3%
Days Liquidity on Hand (TTM) 37% 12% 11% -18% -7%
Note Description Note Description
1 Current Assets less Current Liabilities 7 Total Line of Credit less Borrowing and Letters of Credit 2 Current Assets divided by Current Liabilities 8 Sum of Available Cash and Line of Credit 3 Accounts receivable divided by Sales divided by 365 9 Total Liquidity divided by trailing 12 month expenses divided by 365 4 Net Position plus Fiscal Stabilization Fund 10 Operating revenue less energy cost divided by operating revenue 5 Equity (Net Position + FSF) divided by Total Assets 11 Change in net position divided by operating revenue 6 Unrestricted cash and cash equivalents
Select Financial Indicators
-
25 50
75 100
125
150
175
Sep-21 Dec-21 Mar-22 Jun-22 Sep-22
($)
Millions
Fiscal Quarter
Financial Indicators
Working Capital Equity Total Liquidity
Agenda Page 42
CUSTOMERS
Summary of Financial Results
Definitions:
Accounts: Active Accounts represent customer accounts of active customers served by CPA per Calpine Invoice.
Participation Rate %: Participation Rate r8epresent active accounts divided by eligible CPA accounts YTD Sales Volume: Year to date sales volume represents the amount of energy (in gigawatt hours) sold to retail customers Revenues: Retail energy sales less allowance for doubtful accounts Cost of energy: Cost of energy includes direct costs incurred to serve CPA’s load Operating expenses: Operating expenditures include general, administrative, consulting, payroll and other costs required to fund operations Net operating income, also known as earnings before interest, depreciation and amortization (EBIDA), represents the difference between revenues and expenditures before depreciation expense, interest income and expense, and capital expenditures Cash and Cash Equivalents: Includes cash held as bank deposits.
Year to date (YTD): Represents the fiscal period beginning July 1, 2022 YTD
Sep
2022
Financial Dashboard
Note: Numbers may not sum up due to rounding.
Active Accounts
1,001,716
Participation Rate
96.04%
YTD Sales Volume
3,666 GWh
Sep Sales Volume
1,290 GWh
Agr
1%
Com-Lg
17%
Com-Sm
27%
Res
55%
118
250
378
1114
0 200
400
600
800
1000
1200
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
in 000,000's
Cumulative Revenue
Actual Budget
21 20
5 $243
0 50
100
150
200
250
300
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Net Energy Revenue
Actual Budget
0 20
40 60
80 100
120
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Cash & Cash Equivalents
Unrestricted Resctricted
CPA recorded an operating loss of $18.8 million in September 2022 which was $29.1 million less than the budgeted operating income of $10.3 million. For the year to date, CPA has recorded an operating loss of $3.4 million, $28.1 million less than the budgeted operating income of $24.7 million.
Year-to-date results were impacted by the following factors:
1. Revenue was $377.5 million or 5% higher than budgeted revenue as a result of warmer than normal temperatures and higher electricity use in CPA’s service area.
2. The cost of energy was $372.9 million or 15% higher than budgeted as a result of warmer than normal temperatures, most notably an extreme heat event in the western United States that lasted from in the first two weeks of the month, higher electricity use by CPA customers, higher prices in the California Independent System Operator (CAISO) administered markets and higher charges imposed by the CAISO to operate the grid. .
3. Operating costs were lower than budgeted primarily as a result of lower General and Administration and other services costs than budgeted and the non-utilization of contingencies.
On September 26, 2022, CPA drew $60 million on its $80 million credit facility with JP Morgan. CPA paid $20 million of the loan on September 29, 2022. The remaining loan balance was repaid in October 2022. As of September 30, 2022, CPA had total liquidity of $138 million consisting of $98.8 million in unrestricted cash and cash equivalents, and $39.853 million available on its bank line of credit, up from $133 million and $134 million of liquidity as of September 30, 2021 and June 30, 2022 respectively CPA is in sound financial health and compliance with its bank and other credit covenants.
Agenda Page 43
Staff Report – Agenda Item 6
To: Clean Power Alliance (CPA) Board of Directors
From: Cara Rene, Director, Communications & Marketing
Approved by: Ted Bardacke, Chief Executive Officer
Subject: Communications Report (August – October 2022)
Date: December 1, 2022
RECOMMENDATION
Receive and file.
ATTACHMENT
1. Quarterly Report
Agenda Page 44
Communications & Marketing
Community Engagement
Quarterly Update
August – October 2022
ITEM 6 - ATTACHMENT 1
Agenda Page 45
What we’re excited about
• Awarded more than $200K in funds to 10 regional nonprofits as part of the 2022 Community Benefits Grant program to foster local green initiatives. • Communicated with 100% Green Power communities about customer actions in response to this year’s change in preferred energy option: opt downs and opt outs collectively continue to reflect less than one percent of affected customers.
• Continued to grow our audiences on Instagram (295 new followers) and Twitter (437 new followers), enhancing CPA visibility and outreach. • Fully enrolled the Power Share program through a multilayered effort of direct mail, radio, social media, email, and community outreach. • Participated in regional events to engage the public: National Drive Electric Week, Clean Air Day, Alhambra Pumpkin Run, Hawthorne World Fest Celebration, and Los Angeles RiverFest.
• CPA staff participated on a panel for the Los Angeles Business Council’s Sustainability Summit moderated by LA Times reporter Sammy Roth. The event was included as part of the LA Times weekly Boiling Point newsletter. 2 Agenda Page 46
Default Rate Change Communications
3 CPA continued to communicate about the change to 100% Green Power through postcards, social media, web content and customer activity reports shared with our eight impacted communities.
Postcards
Notices sent to affected
customers in September and
October to announce the
change to 100% Green Power
Social media
Social media posts on Facebook,
Instagram, LinkedIn and Twitter
thanked communities for choosing
100% Green and let audiences
know of the environmental
benefits of renewable energy
Customer activity
reports
CPA provides periodic
customer activity
updates to city staff to
share consumer
actions related to the
change to 100% Green
Power. To date, opt
down and opt out
actions collectively
reflect less than one
percent of affected
customers.
Website
The ‘Our Green Cities’
webpage features
community-specific
information and
avenues for customers
to select another
option if they choose
Agenda Page 47
Earned Media Highlights
4 High performing media
outreach included:
Communities Choose 100%
Green Power: 40 mentions;
audience reach of 182M
Luna Battery Storage: 91
mentions; audience of 29M
Rooftop Solar Projects: 90
mentions; audience of 31M
Fervo Geothermal
Agreement: 29 mentions;
audience of 14M
Community Benefit Grant
Awardees: 89 mentions;
audience of 31M
CPA distributed six news releases and garnered nearly $5.6 million in earned media value.
Agenda Page 48
Community Engagement
5 Staying active in LA and Ventura
Counties
13 presentations with key stakeholders
including city councils, state elected
officials, community-based organizations
and neighborhood groups.
12 community events at street fairs,
climate awareness events, and community
celebrations allowed CPA staff and CAC
members to increase education about
CPA.
20 meetings with business associations
to share program participation and
relevant contracting opportunities.
Connecting with partner cities
Presented to the city councils of Paramount
and Arcadia to highlight key programs, rates,
and discuss issues impacting their communities.
Agenda Page 49
How CPA Fully Enrolled
the Power Share Program
6 OVERVIEW
The Power Share program
provides CPA income-qualified
customers in under-resourced
communities with 100%
renewable energy and a 20
percent discount.
• Low CPA and program awareness
• Must be enrolled as a
CARE/FERA customer or certify
that you are eligible
SOLUTIONS:
CHALLENGES
• Confusion about locating and
needing SCE account number
to register
Clear
communication
in three
languages
County and City
Endorsements
Simple customer
enrollment experience
Targeted marketing
and community outreach
GOAL
Enroll 6,300
DAC customers
Agenda Page 50
Power Share Success:
Marketing and Optimization Helped Enroll 6,300 Customers Direct mail/radio/brochures/fact sheets/paid social media/print media in critical languages
DIRECT MAIL EMAIL
COMMUNITY OUTREACH
RADIO + SOCIAL MEDIA
7 Agenda Page 51
Heat Wave 2022:
Grid Emergency Communications
Kept customers and partner communities updated and informed through multiple channels:
10 email communications to partner communities to provide the updated information and social media assets in critical languages to support communicating with constituents
42 social media posts across three platforms to share Flex Alerts and key information so customers could take action on energy savings 4 mass email communications to approx. 500K customers alerting consumers to imminent concerns with grid reliability and encouraging an immediate decrease in energy consumption to prevent outages Web banner alerts – updated CPA’s website homepage with timely Flex Alert information with links to CAISO’s website
7 energy saving events (in month of Sept)– alerted Power Response customers about the opportunity to reduce energy use
In September, California experienced an unprecedented weeklong heat wave that impacted communities across the state and imperiled electricity grid stability. CPA communicated throughout the heat event to inform customers about actions they could take to lessen demand on our electricity resources.
Agenda Page 52
8 9
LINKEDIN TWITTER INSTAGRAM FACEBOOK
Our Twitter page
attracted 437 new
followers and
averaged 6,800
impressions per day.
Best performing
tweet: Tweet
thanking Power
Response Smart
Home participants
had 5,572
impressions
Our LinkedIn page had
an 18% increase in
visitors with 1,485
individual page views,
in addition to 3,797
unique visitors.
Best performing post:
Join the Team
recruitment video
received 39,845
impressions and 231
clicks.
Our Facebook page
had a reach of
73,522 people - a
173.2% increase -
and had 56,882 paid
impressions, a
137.1% increase in
total audience.
Best performing
post: CPA Flex Alert
post reached 878
people.
Our Instagram page
added 295 new
followers and had a
96% increase in
accounts reached.
Best performing
post: Time of Use
video promoting
energy and cost
savings reached
10, 892 people
Social Media Highlights
Agenda Page 53
Website Performance
10 CPA’s website garnered 211,290 page views and reduced its bounce rate compared to prior quarters. Emails communicating about the September heat wave and energy saving programs helped boost website visits.
Agenda Page 54
• Launch revised public
documents webpage to improve
access to key documents
• External messaging about
new cities joining CPA
• Launch Voyager Scholarship
webpage featuring profiles of
future energy leaders
• Family holiday event in
Ventura County to engage the
public and grow brand
awareness
December
• Planning for customer enrollment in
new cities joining CPA
• City manager retreats to further
develop municipal relationships and
understanding of CPA
• Introductory meetings with new
state representatives
• Planning for CPA’s 5th anniversary
year
January
A Look Ahead
11 Agenda Page 55
Staff Report – Agenda Item 7
To: Clean Power Alliance (CPA) Board of Directors
From: Gabby Monzon, Clerk of the Board
Approved by: Ted Bardacke, Chief Executive Officer
Subject: 2023 Schedule of Meetings
Date: December 1, 2022
RECOMMENDATION
Receive and file the Board of Directors and Standing Committee meeting schedule for 2023.
SUMMARY
The 2023 Board of Directors and Standing Committees meeting schedule will follow CPA’s current monthly meeting cadence. In total, CPA is slated to hold 67 meetings in 2023 that are subject to the Brown Act:
• Board of Directors, 1st Thursday, 2:00 p.m.
• Executive Committee, 3rd Wednesday, 1:30 p.m.
• Legislative & Regulatory Committee, 4th Wednesday, 10:00 a.m. • Finance Committee, 4th Wednesday, 11:00 a.m.
• Energy Planning & Resources Committee, 4th Wednesday, 12:15 p.m. • Community Advisory Committee, 2nd Thursday, 1:00 p.m.
After the incorporation of new Board members at the beginning of 2023, CPA may consider changes to the days and/or times of the meetings.
ATTACHMENT
1. 2023 Meeting Schedule
Agenda Page 56
BOARD OF DIRECTORS ITEM 7 – ATTACHMENT 1
DRAFT
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
2023 MEETING SCHEDULE
This schedule is updated regularly. Please check our website at www.cleanpoweralliance.org to view the most up to date version.
Red Strikeout indicates cancelled meeting, and Red Font indicates new meeting date. Agendas are available at www.cleanpoweralliance.org/agendas at least 72 hours prior to the meeting. For questions, contact the Clerk of the Board at [email protected] or 213-713-5995. Last updated: 12/1/2022
STANDING MEETINGS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Board of Directors
2:00 PM, 1st Thursday Dark 2 2 6 4 1 6 Dark 7 5 2 7
Board Meeting
Locations
In-Person: Clean Power Alliance Office – Downtown LA
Remote: Ventura County Hall of Administration, City of Calabasas, City of Whittier, Torrance at South Bay Cities COG Executive Committee
1:30 PM, 3rd Wednesday 18 15 15 19 17 21 19 16 20 18 15 20 Meeting Locations
In-Person: Clean Power Alliance Office – Downtown LA
Remote: Ventura County Hall of Administration, City of Beverly Hills. May vary depending on composition of the Committee.
Legislative & Regulatory
Committee
10:00 AM, 4th Wednesday
25 22 22 26 24 28 26 23 27 25 22 Dark
Finance Committee
11:00 AM, 4th Wednesday 25 22 22 26 24 28 26 23 27 25 22 Dark Energy Planning &
Resources Committee
12:15 PM, 4th Wednesday
25 22 22 26 24 28 26 23 27 25 22 Dark
Meeting Locations
In-Person: Clean Power Alliance Office – Downtown LA
Remote: Varies, please refer to posted Meeting Agendas for locations.
Community Advisory
Committee
1:00 PM, 3rd Thursday
19 16 16 20 18 22 20 17 21 19 16 21
Meeting Locations
In-Person: Clean Power Alliance Office – Downtown LA
Remote: Ventura County Hall of Administration, City of Whittier Agenda Page 57
Staff Report – Agenda Item 8
To: Clean Power Alliance (CPA) Board of Directors
From: Christian Cruz, Community Outreach Manager
Approved by: Ted Bardacke, Chief Executive Officer
Subject: Community Advisory Committee (CAC) Report
Date: December 1, 2022
RECOMMENDATION
Receive and file.
MEETING REPORT
CAC 2022 Retreat
On Thursday, November 17th, the CPA held its annual retreat to give CAC members the opportunity to take a deep dive into issues of importance and discuss shared goals and perspectives. Focus topics included the following:
• Youth Education Initiative
• CPA Diversity, Equity, and Inclusion Plan
• CAC 2021-2022 Workplan Path Forward
This board report is dedicated to summarizing the retreat, the feedback that CAC provided, and next steps.
Youth Education Initiative
Over the past year, the CAC has discussed the advancement of a Youth Education Initiative.
In the last several weeks, CAC members Cris Gutierrez and Dr. Irella Perez have been drafting a proposed Youth Education Initiative framework for consideration by the CAC. The CAC was provided an overview of the framework for feedback during the retreat on November 17th.
Agenda Page 58
BOARD OF DIRECTORS ITEM 8
The framework identified potential partnerships with organizations, such as Pando Days and Grades of Green, which provide opportunities to educate K-12 and college students about CPA, create regional youth ambassadors, and advance knowledge about renewable energy and future clean energy career opportunities.
Youth Education Initiative: Breakout Session
The CAC was divided into two groups to discuss goals and priorities for the initiative, CAC capacity for implementation, and deliverables/metrics to gauge success in the first year and beyond.
The CAC provided extensive feedback on how this initiative could be structured, such as:
• Work with students to educate communities about energy and ensure information about CCA’s is disseminated throughout CPA territory.
• Work with identified organizations to focus educational efforts on CCA’s and renewable energy within impacted communities and hard-to-reach populations. • Reconvene the CAC Youth Education Initiative Working Group, with a focus on establishing reasonable deliverables and metrics to gauge success over the next year and beyond.
• Identify statewide program and grant opportunities focused on youth education that the CAC committee could leverage to enhance this initiative.
The CAC will reconvene the Youth Initiative Working Group in the coming months to consider the feedback received at this retreat and develop a framework and path forward for consideration and approval.
CPA Diversity, Equity, and Inclusion (DEI) Plan
In the last year, CPA engaged Orange Grove Consulting (OGC) to conduct a DEI assessment and inclusive leadership training and to work with staff to enhance CPA’s DEI plan. In April 2022, OGC held listening sessions with CAC representatives. The feedback received from the CAC informed OGC’s assessment of CPA’s external DEI activities and their impacts on CPA customers and communities. During the retreat, CPA staff provided an overview of CPA’s updated DEI plan which includes a statement of CPA’s DEI mission and values and prioritized FY 2022/23 goals for each of CPA’s three DEI pillars:
Agenda Page 59
BOARD OF DIRECTORS ITEM 8
• Belonging - fostering a diverse workplace where people are valued, encouraged to bring their whole selves, and supported equitably.
• Community - investing in CPA communities to support a just and sustainable clean energy future.
• Equitable Business - supporting growth and opportunities for our communities holding a standard for strong, equitable business practices.
CAC members conveyed their support for CPA’s ongoing DEI efforts. They noted the importance of having clear metrics to ensure accountability for results; active ownership of the DEI plan by CPA staff; and active listening and collaboration with community partners and stakeholders to build trust and align DEI efforts with community needs and priorities. Staff will continue working with the CAC to incorporate relevant DEI objectives into the CAC Workplan.
CAC 2022-2023 Workplan
Beginning in June 2020, at the request of CAC members, staff conducted a series of three visioning sessions with the CAC Chair and Vice Chairs to set CAC priorities and expectations for 2020-2021. CAC members shared individual and regional perspectives reflecting the priorities of their respective communities, which informed the first adopted CAC workplan.
Since the adoption of the first CAC Workplan in 2020, the CAC has received a yearly update on workplan priorities, key accomplishments, and upcoming workplan implementation tasks during the annual CAC retreat. At the November 17th retreat, staff highlighted event participation by CAC members, outcomes from the CAC working groups on NEM 3.0 and Youth Education, and key deliverables in the coming months.
Beginning in June, staff will work with the CAC to update the 2022-2023 Workplan, with the expectation that the 2023-2024 Workplan will be adopted at a subsequent meeting.
ATTACHMENT
1. CAC Meeting Attendance
Agenda Page 60
BOARD OF DIRECTORS ITEM 8 – ATTACHMENT 1
Major Action Items and Presentations
January
CEO Update
Diversity, Equity, and Inclusion Plan Update
July
CEO Update
Chair/Vice Chair Elections
AB 205 Impacts
February
CEO Update
Net Energy Metering 3.0
CAC Final Draft Workplan
August – Dark
March
CEO Update
CPA Bill Positions
September
CEO Update
Vice Chair Election
April
CEO Update
2022/2023 Rates
2022/2023 Budget Priorities
October
Member Expansion
IRP Presentation
May
CEO Update
CPA Local Programs Update
November
Youth Initiative
DEI Update
CAC Workplan Update
June
CEO Update
Call for Officer Nominations
2022 Summer Reliability Landscape
Community Advisory Committee Attendance
2022
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov
East Ventura/West LA County
Angus Simmons ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Jennifer Burke ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ A
Debbie West A ✓ ✓ ✓ ✓ ✓ ✓ A ✓
San Gabriel Valley
Richard Tom ✓ ✓ ✓ ✓ ✓ ✓ A ✓ ✓
Kim Luu ✓ A A ✓ A ✓ A A A
West/Unincorporated Ventura County
Lucas Zucker A A A A ✓ ✓ ✓ ✓ ✓
Vern Novstrup A ✓ ✓ ✓ ✓ ✓ A ✓ ✓
South Bay
David Lesser ✓ ✓ ✓ ✓ ✓ A ✓ ✓ ✓
Emmitt Hayes A ✓ ✓ A A
Gateway Cities
Irella Perez ✓ ✓ ✓ A
Genaro Bugarin ✓ ✓ ✓ A ✓ ✓ ✓ ✓ ✓
Westside
Cris Gutierrez ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
David Haake ✓ ✓ A ✓ ✓ ✓ ✓ ✓ ✓
Unincorporated LA County
Neil Fromer ✓ ✓ ✓ ✓ ✓ A ✓ ✓ ✓
Kristie Hernandez ✓ ✓ ✓ ✓ A ✓ ✓
Agenda Page 61
Staff Report – Agenda Item 9
To: Clean Power Alliance (CPA) Board of Directors
From: Karen Schmidt, Director, Rates and Strategy
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Public Hearing: Consider Addendum No. 4 to the Implementation Plan and Adopt Resolution No. 22-012-044 to Approve Addendum No. 4 to the Clean Power Alliance Implementation Plan and to Authorize Staff to Submit Addendum to the California Public Utilities Commission
Date: December 1, 2022
RECOMMENDATION
Conduct a public hearing to consider adoption of Resolution No. 22-012-044 (Attachment 1) to approve Addendum No. 4 (Attachment 2) adding the cities of Hermosa Beach, Monrovia, and Santa Paula as members of Clean Power Alliance and to authorize staff to submit Addendum No. 4 as attached, or in a substantially similar form, to the California Public Utilities Commission on or before December 31, 2022.
BACKGROUND
Staff is presenting Addendum No. 4 to CPA’s Implementation Plan, a document required by the California Public Utilities Commission (CPUC) for CPA to provide energy service to new member communities. The Board adopted its original Implementation Plan on August 4, 2017, at which time the organization included three members: Los Angeles County, Rolling Hills Estates, and South Pasadena. On December 17, 2017, the Board adopted Implementation Plan Addendum No. 1, adding 21 additional cities, and on March 1, 2018, the Board adopted Addendum No. 2, adding 7 additional cities. On December 13, 2018, the Board adopted Implementation Plan Addendum No. 3, adding one additional city, bringing the total membership of CPA to its current 32 jurisdictions.
Agenda Page 62
BOARD OF DIRECTORS ITEM 9
The Board voted on September 1, 2022, to invite Hermosa Beach, Monrovia, and Santa Paula to join CPA. Hermosa Beach adopted its ordinance to join CPA on October 11, 2022; Santa Paula adopted its ordinance to join CPA on November 2, 2022; and Monrovia adopted its ordinance to join CPA on November 15, 2022. Pursuant to CPUC regulations, a resolution approving Addendum No. 4 must be adopted by the Board and filed with the CPUC by December 31, 2022 in order for CPA to begin serving load to customers in these cities in 2024. The three cities collectively will add approximately 38,400 customers and increase total load (kWh) by approximately 3.7%.
Addendum No. 4 updates CPA’s forecasted load, capacity requirements, Renewable Portfolio Standard (RPS) requirements, and operating results to reflect the anticipated impacts of the planned expansion to the new member agencies as well as the most recent historical energy use within CPA’s service territory. It sets March 2024 as the proposed implementation date when service to customers in the new member communities would begin.
Upon Board approval of Resolution 22-012-044, the new member agencies will sign CPA’s Joint Powers Agreement (JPA) in December 2022 and their signature pages will be added to the appendices of Addendum No. 4 prior to its submission to the CPUC. The new members will be officially admitted to the JPA after the CPUC’s certification of and issuance, if any, of findings on Addendum No. 4 to the Implementation Plan and the satisfaction of any other conditions that the Board may establish.
ATTACHMENTS
1. Resolution No. 22-012-044
2. Implementation Plan Addendum No. 4 (Link)
Agenda Page 63
BOARD OF DIRECTORS ITEM 9 – ATTACHMENT 1
RESOLUTION NO. 22-12-044
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
TO APPROVE IMPLEMENTATION PLAN ADDENDUM NO. 4
AND TO AUTHORIZE STAFF TO FILE THE ADDENDUM
WITH THE CALIFORNIA PUBLIC UTILITIES COMMISSION
THE BOARD OF DIRECTORS OF THE CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA DOES HEREBY FIND, RESOLVE, AND ORDER AS FOLLOWS:
WHEREAS, the 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, Public Utilities Code Section 366.2 requires that before commencing a community choice aggregation program, Clean Power Alliance first must prepare and adopt an Implementation Plan to be filed with the California Public Utilities Commission; WHEREAS, Public Utilities Code Section 366.2 requires any subsequent changes to the Implementation Plan be considered and adopted at a duly notice public hearing;
WHEREAS, the Clean Power Alliance Implementation Plan and Statement of Intent was considered and adopted by the Clean Power Alliance Board of Directors on August 4, 2017 at a duly noticed public hearing;
WHEREAS, the Clean Power Alliance Implementation Plan Addendum No. 1 was considered and adopted by the Clean Power Alliance Board of Directors on December 19, 2017 at a duly noticed public hearing;
WHEREAS, the Clean Power Alliance Implementation Plan Addendum No. 2 was considered and adopted by the Clean Power Alliance Board of Directors on March 1, 2018 at a duly noticed public hearing;
WHEREAS, the Clean Power Alliance Implementation Plan Addendum No. 3 was considered and adopted by the Clean Power Alliance Board of Directors on December 13, 2018 at a duly noticed public hearing; and, WHEREAS, the cities of Hermosa Beach, Monrovia, and Santa Paula (individually, “City”; collectively, “Cities”) requested to be considered for membership in CPA so that customers in those jurisdictions can begin receiving service from CPA in 2024;
WHEREAS, each City has considered and adopted an ordinance to join CPA; Agenda Page 64
BOARD OF DIRECTORS ITEM 9 – ATTACHMENT 1
WHEREAS, CPA desires to admit the Cities for membership; WHEREAS, the Clean Power Alliance of Southern California Implementation Plan Addendum No. 4 to authorize the Cities to join CPA was presented to the Clean Power Alliance Board of Directors at a duly noticed public hearing for its consideration and adoption.
NOW THEREFORE HAVING CONSIDERED ADDENDUM NO. 4 TO THE
IMPLEMENTATION PLAN AT A DULY NOTICED PUBLIC HEARING, BE IT
RESOLVED, BY THE BOARD OF DIRECTORS OF THE CLEAN POWER
ALLIANCE OF SOUTHERN CALIFORNIA:
1. Addendum No. 4 to the Implementation Plan of Clean Power Alliance is approved.
2. Authorization of Clean Power Alliance staff to submit implementation Plan Addendum No. 4, as presented, or in a substantially similar form, to the California Public Utilities Commission (CPUC) on or before December 31, 2022, is approved.
3. Each City shall be admitted as members of the Clean Power Alliance 30 days after both of the following occur: (a) the CPUC’s certification of and issuance, if any, of findings on Addendum No. 4 to the Implementation Plan and (b) the satisfaction of any other conditions that the Board may establish.
APPROVED AND ADOPTED this ____ day of ___________ 2022.
Julian Gold, Chair
ATTEST:
Gabriela Monzon, Secretary
Agenda Page 65
BOARD OF DIRECTORS ITEM 9 – ATTACHMENT 2
Clean Power Alliance Implementation Plan Addendum No. 4 To access this document, please click here.
Agenda Page 66
Staff Report – Agenda Item 10
To: Clean Power Alliance (CPA) Board of Directors
From: John McNamara, Director, Structured Contracts
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Renewable Power Purchase Agreements with Arlington Energy Center II, LLC and Geysers Power Company, LLC
Date: December 1, 2022
RECOMMENDATION
Approve three long-term Renewable Power Purchase Agreements and authorize the Chief Executive Officer to execute the agreements:
a. 16-year Second Amended and Restated PPA for 233 MW of solar and 132 MW of storage with Arlington Energy Center II, LLC (Arlington) b. 20-year PPA for 18 MW of incremental geothermal resource with Geysers Power Company, LLC (Geysers Incremental)
c. 10.5-year PPA for 100 MW of existing geothermal resource with Geysers Power Company, LLC (Geysers Existing)
BACKGROUND
Mid-Term Reliability Compliance
In June 2021, the CPUC issued its Decision Requiring Procurement to Address Mid-Term Reliability (2023-2026) (MTR Decision), which ordered CPA to procure a total of 679 MW of new reliable capacity between 2023-2026. This procurement is intended to address California’s need for new resources on the grid amid the planned retirement of fossil fuel resources and the Diablo Canyon nuclear power plant in the 2023-2026 timeframe. 1 1 The 5-year extension of the Diablo Canyon nuclear power plant does not change the CPUC Decision’s ordered procurement.
Agenda Page 67
BOARD OF DIRECTORS ITEM 10
CPA’s MTR-compliant procurement mandate limits CPA’s procurement to three different qualifying technologies:
1. Conventional renewables plus storage or standalone storage, which must come online by June 1, 2025, with interim requirements for June 1, 2023 and June 1, 2024.
2. Baseload2 renewables (e.g. geothermal or biomass), which must come online by June 1, 2026
3. Long-duration storage (8+ hours of duration), which must come online by June 1, 2026
In addition to the MTR compliance requirements, due to California’s shortage of Resource Adequacy (RA) resources and planned restructuring of the RA program to require hour-by-hour capacity contracts where baseload resources like geothermal will be important, CPA is also seeking strategic opportunities to procure resources that have high RA value.
A summary of the projects for which staff is seeking Board approval at today’s Board meeting is provided below:
Project Counterparty Type Size COD Term Compliance
Arlington NextEra Solar plus
Storage
233 MW
Solar / 132
MW Storage
12/1/2023 16 years
MTR
Conventional
Geysers
Incremental Calpine Geothermal 18 MW 6/1/2026 20 years MTR Baseload Geysers
Existing Calpine Geothermal 100 MW 6/1/2027 10.5 years Long-Term RA For all three PPAs, CPA retained Todd Larsen with Clean Energy Counsel to represent CPA and its interests in the negotiation. Mr. Larsen represented CPA in the prior amendments to the Arlington project. Mr. Larsen’s work was overseen by CPA’s General Counsel.
2 Baseload energy is energy that can be produced at an essentially constant rate and run continuously.
Agenda Page 68
BOARD OF DIRECTORS ITEM 10
ARLINGTON
Located near the City of Blythe within unincorporated Riverside County, CA, Arlington is a solar plus storage project developed by NextEra. The project is broken into four phases of which CPA is the buyer of all phases. In the first phase, 100 MW of solar came online on March 21, 2022. In the second phase, 132 MW of storage came online on August 21, 2022. In the third phase, 40 MW of solar will come online on June 1, 2023. In the fourth and final phase, subject to Board approval of the Amendment, 93 MW of solar will come online on December 1, 2023, making the full facility capacity 233 MW of solar and 132 MW of storage.
On June 28, 2019, the Board approved the original Arlington PPA for the output of a 233 MW solar photovoltaic facility to come online by October 1, 2022. On October 1, 2020, the Board approved a first amended and restated PPA to add a 132 MW storage facility to the solar facility.3 Due to significant impacts to the project’s construction schedule related to energy market challenges, including several supply chain disruptions, on July 7th, 2022, the Board approved an amendment which delayed the Commercial Operation Date to June 1, 2023 and reduced the overall facility size to 140 MW solar plus 120 MW storage, down from the original project size of 233 MW solar and 132 MW storage. This amendment also included a right of first offer (ROFO) on the remaining 93 MW solar and 12 MW storage originally contracted to CPA.
In September 2022, Arlington provided an offer to CPA for this capacity at a new price, and on September 28, 2022, the Energy Planning & Resources Committee approved staff to enter into negotiations with Arlington for this addition ROFO-based capacity.
A quantitative evaluation of the Arlington offer showed that it has a positive net present value, in other words, its forecasted revenues are greater than forecasted costs. The Arlington offer was also compared to offers in the PPA Refresh Process and was found 3 The PPA was further amended in June 2022 (First Amendment) to reflect a change to the management of meter data. This was a non-material, administrative amendment.
Agenda Page 69
BOARD OF DIRECTORS ITEM 10
to be the second-highest value offer. The offer was also compared to offers into the 2022 Midterm Reliability RFO and found to be competitive with current market pricing.
GEYSERS
To comply with the MTR Decision, CPA launched its 2021 Mid-term Reliability (MTR) Request for Offers (RFO) on September 29, 2021, with bids due on November 10, 2021.
CPA was able to successfully contract with one geothermal project from this RFO with the Board approval of the 33 MW Cape Station geothermal project on September 1, 2022.
Subsequently, CPA launched its 2022 MTR RFO on August 1, 2022, with bids due on September 9, 2022. No geothermal resources bid into this RFO.
On July 14, 2022, staff presented a time-sensitive bilateral opportunity4 to a Review Team consisting of members of the Energy Committee and senior staff to secure a 20-year Power Purchase Agreement (PPA) for an incremental 18 MW of capacity (Incremental Geysers) and a 10-year PPA for 100 MW of existing capacity (Existing Geysers) at the Geysers facility. The developer is Calpine. The Existing Geysers PPA capacity is part of the larger approximately 700 MW Geysers geothermal complex. Calpine intends to add 25 MW of incremental capacity at the complex, CPA will purchase 18 MW of the capacity in the Incremental Geysers PPA and another Community Choice Aggregator will purchase the remaining 7 MW of capacity.
On July 27, 2022, the Energy Committee approved staff proceeding with bilateral negotiations, consistent with the Review Team’s recommendation. Staff has completed negotiations and is presenting and requesting approval of two Geysers PPAs . A more detailed description of the Geysers contracts and evaluation criteria are included in Exhibit A.
4 Long-term bilateral awards are consistent with CPA’s Energy Risk Management Policy.
Agenda Page 70
BOARD OF DIRECTORS ITEM 10
RATIONALE
All three contracts presented for approval today are high value offers, will help meet CPA’s compliance requirements, and are very low risk from a development perspective, as described further below:
• Arlington’s incremental 93 MW of solar and 12 MW of storage are competitively priced compared to offers recently received in the 2022 MTR RFO. In addition, the incremental 12 MW of storage is already constructed and will contribute to CPA’s 2023 MTR capacity requirements.
• The Incremental Geysers project will contribute 18 MW towards CPA’s MTR compliance requirements for Baseload Renewable resources. Opportunities for new geothermal resources are constrained due to resource-dependent siting potential (most geothermal resource are located outside of CAISO) and lack of transmission capacity into CAISO. The Incremental Geysers project is low-risk given the already proven geothermal resource at The Geysers, existing generation and transmission infrastructure, Calpine’s development track record, and the project location within CAISO.
• The Existing Geysers capacity is not incremental and will not count towards CPA’s Midterm Reliability compliance requirements but will provide long-term renewable energy and baseload capacity and contribute to CPA’s future compliance requirements for Resource Adequacy.
ENVIRONMENTAL REVIEW
Arlington has already secured all necessary permits for the construction and operation of the facility. The Existing Geysers project has previously received all necessary approvals.
Calpine has completed CEQA review and obtained a Use Permit for the Incremental Geysers area where the new drilling activity and gathering system construction will take place.
Agenda Page 71
BOARD OF DIRECTORS ITEM 10
CPA would have no role, jurisdiction, or authority whatsoever with respect to CEQA review or project approval, if such review or approval were required for the Incremental Geysers projects.
ATTACHMENTS
1. Exhibit A: Project Description – Geysers
2. Mid-Term Reliability Renewable Power Purchase Agreement Presentation
3. Second Amended and Restated Renewable Power Purchase Agreement with Arlington Energy Center II, LLC
4. Renewable Power Purchase Agreement with Geysers Power Company, LLC 5 (Existing 100MW)
5. Renewable Power Purchase Agreement with Geysers Power Company, LLC 5 (Incremental 18MW)
5 Consistent with industry practice, portions of the agreement have been redacted to protect market sensitive information.
Agenda Page 72
BOARD OF DIRECTORS ITEM 10
EXHIBIT A: PROJECT DESCRIPTION - GEYSERS
Project Overview
Geysers is an existing plant located on 45 square miles along the Sonoma and Lake County border. It is the largest complex of geothermal power plants in the world. Naturally occurring steam field reservoirs below the earth's surface are harnessed by Geysers to generate renewable, geothermal energy. The Geysers complex is comprised of 13 power plants with a net generating capacity of about 725 MW. CPA has a Board-approved PPA for a 50 MW portion of this overall facility, which is already online and serving CPA’s customer demand.
The Existing Geysers PPA is for 100 MW with a contract start date of June 1, 2027. The project will deliver energy to CPA at CAISO’s NP-15 trading hub. Site control and permitting has been fully secured for the entirety of the proposed delivery term.
The Incremental Geysers PPA is for 18 MW. Geysers will begin delivering incremental capacity in the third quarter of 2024 with additional capacity coming online in phases until the full incremental capacity is delivered on June 1, 2026.
Under both the Existing and Incremental Geysers PPAs, CPA pays for the output of the geothermal energy generation of the project at a fixed-price rate per MWh with no escalation for the full term of the contract and CPA is entitled to all product attributes from that generation, including energy and renewable energy credits (RECs). CPA pays for the resource adequacy benefits at a fixed-price monthly rate per kW-month with no escalation for the full term of the contract.
Developer
Geysers is an indirect, wholly owned subsidiary of Calpine. Calpine is a full-service energy company that develops power generation, owns, and operates a fleet of natural gas and geothermal assets, and sells both wholesale and retail throughout the United States. Other customers of the Geysers facility include CleanPowerSF, Sonoma Clean Agenda Page 73
BOARD OF DIRECTORS ITEM 10
Power, Marin Clean Energy, Pioneer Community Energy, and Southern California Edison.
Calpine Energy Solutions, a separate subsidiary of Calpine, performs billing and call-center services for CPA.
Evaluation Criteria
CPA ranks projects for economic value based on the net present value (NPV) to CPA and on a High, Medium, Neutral, and Low scale in five other evaluation criteria categories (Development Score, Workforce Development, Environmental Stewardship, Benefits to Disadvantaged Communities, and Project Location). Below is the ranking assigned to this project in each of those categories.
Value
The Incremental Geysers PPA pricing reflects the scarcity of incremental geothermal resources available to meet the CPUC’s procurement order. The Incremental Geysers offer price was compared to a 30-year bilateral offer for incremental geothermal capacity in the Imperial Valley; the 30-year offer was more expensive and higher risk than the Incremental Geysers project.
The existing Geysers PPA pricing is in line with current market pricing for geothermal resources and the PPA has a positive value, in other words, its forecasted revenues are greater than forecasted costs.
A publicly available benchmark for geothermal pricing does not exist.
Development Score
The Existing Geysers project ranks High as it is an existing project and online, and therefore not subject to development or construction risks. The Incremental Geysers project also ranks High as it is an addition to an existing project, site control has been obtained and the new capacity will utilize existing interconnection and transmission infrastructure.
Agenda Page 74
BOARD OF DIRECTORS ITEM 10
Workforce Development
Both projects rank Medium. Calpine estimates that the Incremental Geysers project will create approximately 72 construction jobs. Calpine is pursuing a Project Labor Agreement for gathering systems construction. However, trade availability for geothermal well drilling, rare in California, is uncertain; union labor and/or prevailing wages will be offered on a trade-by-trade basis. The Existing Geysers project will not create any construction jobs, however, approximately 250 people are employed at the Geysers on a full-time basis and local residents fill the majority of the independent contract jobs, which average another 150 full time positions.
Environmental Stewardship
The project ranks High as its footprint is on a developed area. Additionally, the continued use of the area via the contract with CPA constitutes repurposing of already developed land. Further, Geysers utilizes wastewater from Lake County and the City of Santa Rosa to replenish and maintain pressure at the geothermal reservoir. The Incremental Geysers project also ranks High as it is not located in an environmental avoidance area and will be constructed on previously disturbed land.
Benefits to Disadvantaged Communities
Both projects rank Neutral as neither is located within a DAC and neither will have negative impacts to any DAC.
Project Location
Both projects rank Medium as each is located within California but not within Los Angeles or Ventura County.
Agenda Page 75
Item 10 – MTR PPAs
December 1, 2022
ITEM 10 – ATTACHMENT 2
Agenda Page 76
Summary
CPA is seeking Board approval of three long-term Renewable Power Purchase Agreements (PPAs) at today’s meeting:
Project Technology Capacity Commercial
Operation Date
Contract
Length Compliance
Arlington Solar +
Storage
93 MW for a total
of 233 MW Solar /
12 MW for a total
of 132 MW
Storage
12/1/2023 16 Years MTR
Conventional
Geysers
Incremental Geothermal 18 MW 6/1/2026 20 Years MTR Baseload Existing
Geysers Geothermal 100 MW 6/1/2027 10.5 Years Long-Term RA Agenda Page 77
Agenda
Background
Project Summary – Arlington
Project Summary - Geysers
Action Requested
Agenda Page 78
Background
4 Agenda Page 79
Reliability Needs
Since 2020, the California grid has experienced a shortage of reliable capacity, resulting in increased reliability events, high Resource Adequacy (RA) prices, and general RA scarcity In response to this shortage, in June 2021, the CPUC issued its Decision Requiring Procurement to Address Mid-Term Reliability (2023-2026) (CPUC Decision), which ordered CPA to procure a total of 679 MW of new reliable capacity between 2023-2026:
In addition, a significant restructuring of the RA program in underway at the CPUC to ensure the program appropriately addresses reliability in the context of decarbonized grids, which is expected to take effect in 2025
The three contracts discussed today will help CPA achieve its Mid-Term Reliability (MTR) compliance targets
Resource Type Incremental MW Online By
2023 2024 2025 2026
Reliable Capacity (General) 118 354 89
Baseload Renewables 59
Long-Duration Storage 59
Agenda Page 80
Project Overview -
Arlington
6 Agenda Page 81
Arlington is a 233 MW solar + 132 MW storage project in Blythe, CA, contracted with CPA In June 2019, the Board approved a PPA for 233 MW of solar with a commercial online date (COD) of October 1, 2022. In October 2020, Board approved an amended and restated PPA to add 133MW of storage to the existing solar.
Due to a number of industry wide challenges affecting the renewable energy industry (e.g., supply chain, rising financing costs and commodity prices), the Board approved an amendment to the PPA on July 7, 2022 (July Amendment), agreeing to reduce the project size to 140 MW solar and 120 MW storage, with a new online date of June 1, 2023
The July Amendment included a right of first offer (ROFO) on the remaining 93 MW solar and 12 MW storage originally contracted to CPA. Arlington provided an offer to CPA for this capacity at an updated price in September 2022
On September 28, 2022, the Energy Committee approved CPA proceeding with negotiations for the incremental 93 MW solar and 12 MW of storage capacity at Arlington 7 Background
Agenda Page 82
Recommendation
Staff recommends approval of the Second Amended and Restated Arlington PPA for 93 MW of solar and 12 MW of storage for an Arlington project total of 233 MW of solar and 132 MW of storage The 132 MW of storage is currently built; the full 233 MW of solar is scheduled to come online on 12/1/2023
Rationale
The incremental capacity will count towards CPA’s Midterm Reliability compliance in 2023 The quantitative evaluation of the Arlington offer shows a positive NPV and is priced competitively compared to offers that CPA received in its 2022 Mid-Term Reliability RFO The incremental capacity is highly de-risked compared to another new-build resource Agenda Page 83
Project Overview -
Geysers
9 Agenda Page 84
Background
In September 2021 and August 2022, CPA launched its 2021 and 2022 Midterm Reliability (MTR) RFOs to secure baseload/firm renewable energy to fill its compliance requirement Baseload offers into the 2021 MTR RFO were limited, and no geothermal resources bid into the 2022 MTR RFO Opportunities for new geothermal resources are limited due to resource-dependent siting potential (mostly outside of CAISO or out of state) and lack of transmission capacity into CAISO On July 14, 2022, staff presented an opportunity to a RFO Review Team consisting of members of the Energy Committee and senior staff to secure a 20-year PPA for an incremental 18 MW of capacity (Incremental Geysers) and a 10-year* PPA for 100 MW of existing capacity (Existing Geysers) at the Geysers Facility On July 27, 2022, the Energy Committee approved CPA entering negotiations with Calpine for the bilateral Geysers Incremental and Existing offers
CPA currently has a long-term PPA with 50 MW of the Geysers facility, which is operating and serving CPA’s load
*CPA agreed to extend the contract to 10.5 years to allow the contract to run to the end of the calendar year Agenda Page 85
Incremental Geysers
Criteria Rank
Development Score High
Workforce
Development Medium
Environmental
Stewardship High
Benefits to DACs Neutral
Project Location Medium
Project Overview
18 MW geothermal facility
Located at the Geysers geothermal complex in Sonoma and Lake Counties, CA
New build project with a September 1, 2026 online date
Developer: Geysers Power Company, LLC, an indirect wholly owned subsidiary of Calpine
This contract is pending approval from Calpine's board and is expected to be executed in January 2023
Rationale/Recommendation
Will count towards CPA’s Midterm Reliability Compliance for baseload renewables
Opportunities for new geothermal resources are scarce
Low-risk given Geysers’ prior track record of development at this location and existing generation and transmission infrastructure Recommendation: Staff recommends approval of the Incremental Geysers PPA
Evaluation Summary
Agenda Page 86
Existing Geysers
Criteria Rank
Development Score High
Workforce
Development Medium
Environmental
Stewardship High
Benefits to DACs Neutral
Project Location Medium
Project Overview
100 MW portion of the existing Geysers facility
Located at the Geysers geothermal complex in Sonoma and Lake Counties, CA
June 1, 2027 contract commencement date
Developer: Geysers Power Company, LLC, an indirect wholly owned subsidiary of Calpine
This contract is pending approval from Calpine's board and is expected to be executed in January 2023
Rationale/Recommendation
Will not count towards CPA’s Midterm Reliability Compliance but will provide long-term renewable energy and baseload capacity Will contribute to CPA’s future compliance requirements for RA and is expected to be highly valuable under the new RA framework Quantitative evaluation shows a positive NPV
Recommendation: Staff recommends approval of the Existing Geysers PPA
Evaluation Summary
Agenda Page 87
Action Requested
13 Agenda Page 88
Approval of the (1) Arlington Second Amended and Restated PPA, (2) Incremental Geysers PPA, and (3) Existing Geysers PPA
Action Requested
Agenda Page 89
RENEWABLE POWER PURCHASE AGREEMENT
COVER SHEET
Seller: Arlington Energy Center II, LLC
Buyer: Clean Power Alliance of Southern California, a California joint powers authority Description of Facility: A solar photovoltaic electric generating facility with a net nameplate capacity of 233 MW AC coupled with a lithium ion (Li-Ion) battery storage facility with a net nameplate capacity of 132 MW AC/528 MWh located near the City of Blythe within unincorporated Riverside County, California, as further described in Exhibit A.
Guaranteed Interim Commercial Operation Date has the meaning set forth in Exhibit B.
Guaranteed Storage Commercial Operation Date has the meaning set forth in Exhibit B.
Guaranteed Initial Full Commercial Operation Date has the meaning set forth in Exhibit B.
Guaranteed Full Commercial Operation Date has the meaning set forth in Exhibit B.
Milestones:
Milestone Expected Date for
Completion
Evidence of Site Control Complete
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ]Neg Dec, [ ]Mitigated Neg Dec,
[x]EIR
Complete
Seller’s receipt of Phase I and Phase II Interconnection study results for Seller’s Interconnection Facilities Complete Executed Interconnection Agreement Complete
Financial Close Complete
Expected Construction Start Date Complete
Initial Synchronization Complete
Network Upgrades completed (evidenced by delivery of
permission to parallel letter from the Transmission
Complete
ITEM 10 - ATTACHMENT 3
Agenda Page 90
Milestone Expected Date for
Completion
Provider)
Expected Interim Commercial Operation Date Complete
Expected Storage CAISO Commercial Operation (pursuant
to CAISO’s Commercial Operation for Markets) Complete
Expected Storage Commercial Operation Date Complete
Expected Initial Full Commercial Operation Date (for the Subject 40 MW PV)* June 1, 2023
Expected Full Commercial Operation Date (for the
Additional PV Capacity)* December 1, 2023
* Seller may elect to achieve Commercial Operation for the Subject 40 MW PV pursuant to the CAISO’s Commercial Operation for Markets methodology. Seller may also elect to achieve Commercial Operation, whether under the Agreement or the CAISO Tariff as applicable, for the Additional PV Capacity in two (2) separate MW quantities on two (2) separate dates pursuant to the CAISO’s Commercial Operation for Markets methodology for each of the Initial Full Commercial Operation Date and Full Commercial Operation Date.
Delivery Term: Sixteen (16) Contract Years, as further defined in Section 1.1.
Interim Facility - Expected Energy: An amount of MWh calculated from the table below as the sum of the Expected Energy in each month constituting the Interim Facility Contract Period, as may be adjusted as described in Section 4.7.
Month Expected Energy (MWh)
January 2022 17,372
February 2022 19,489
March 2022 27,300
April 2022 29,841
May 2022 33,329
June 2022 33,275
Agenda Page 91
July 2022 31,295
August 2022 29,875
September 2022 26,662
October 2022 23,600
November 2022 18,092
December 2022 15,765
January2023 16,586
February 2023 18,618
March 2023 26,395
April 2023 29,049
May 2023 32,515
June 2023 45,647
July 2023 42,844
August 2023 40,866
September 2023 36,545
October 2023 32,433
November 2023 24,631
Full Facility - Expected Energy:
Contract Year Expected Energy (MWh)
1 718,220
2 3
4 Agenda Page 92
Agenda Page 93
5 6
7 8
9 10
11 12
13 14
15 16
Contract Price
The Renewable Rate:
The Renewable Rate shall be the following for
the Interim Facility Contract Period:
Contract Year Renewable Rate
Interim Facility
Contract Period
/MWh (flat)
with no escalation
The Renewable Rate shall be the following
commencing on the Full Commercial
Operation Date:
Contract Year Renewable Rate
1 – 16 /MWh*
(flat) with no
escalation
Agenda Page 94
* Subject to possible adjustment in accordance with Section 5(a) of Exhibit B.
The Storage Rate:
Contract Year Storage Rate
Starting on the
Storage Commercial
Operation Date and
Contract Years 1 –
16 /kW-mo. (flat)
with no escalation
Product
PV Energy
Discharging 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
Installed Storage Capacity and Effective Storage Capacity Ancillary Services
Capacity Attributes (select options below as applicable) Energy Only Status
Full Capacity Deliverability Status
a) RA Guarantee Date: Interim Commercial Operation Date Scheduling Coordinator: Buyer
Security and Guarantor
Development Security: $60/kW of Guaranteed Full PV Capacity plus $90/kW of Guaranteed Storage Capacity
Performance Security: $60/kW of the lesser of Guaranteed Full PV Capacity and Installed PV Capacity plus $90/kW of the lesser of Guaranteed Storage Capacity and Installed Storage Capacity Guarantor: NextEra Energy Capital Holdings, Inc.
Agenda Page 95
TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS ........................................................................................................ 1
1.1 Contract Definitions............................................................................................. 1
1.2 Rules of Interpretation ...................................................................................... 28 ARTICLE 2 TERM; CONDITIONS PRECEDENT.................................................................. 29
2.1 Contract Term. ................................................................................................... 29
2.2 Conditions Precedent to Commencement of the Delivery Term. .................. 30
2.3 Conditions Precedent to Storage Commercial Operation. ............................. 31
2.4 Additional Conditions Precedent to Full Commercial Operation. ................ 31
2.5 Development; Construction; Progress Reports............................................... 32
2.6 Remedial Action Plan ........................................................................................ 32
2.7 Additional Conditions Precedent to Initial Full Commercial Operation. ........................................................................................................... 33 ARTICLE 3 PURCHASE AND SALE ...................................................................................... 33
3.1 Purchase and Sale of Product ........................................................................... 33
3.2 Sale of Green Attributes. ................................................................................... 34
3.3 Imbalance Energy. ............................................................................................. 34
3.4 Ownership of Renewable Energy Incentives. .................................................. 34
3.5 Future Environmental Attributes. ................................................................... 34
3.6 Test Energy. ........................................................................................................ 35
3.7 Capacity Attributes. ........................................................................................... 35
3.8 Resource Adequacy Failure. ............................................................................. 35
3.9 CEC Certification and Verification. ................................................................ 36
3.10 Eligibility. ............................................................................................................ 37
3.11 California Renewables Portfolio Standard. ..................................................... 37
3.12 Compliance Expenditure Cap. .......................................................................... 37
3.13 Project Configuration ........................................................................................ 38 ARTICLE 4 OBLIGATIONS AND DELIVERIES ................................................................... 38
4.1 Delivery. .............................................................................................................. 38
4.2 Title and Risk of Loss. ....................................................................................... 39
4.3 Forecasting.......................................................................................................... 39
4.4 Dispatch Down/Curtailment. ............................................................................ 41
4.5 Energy Management. ......................................................................................... 41
4.6 Reduction in Energy Delivery Obligation........................................................ 43
4.7 Guaranteed Energy Production........................................................................ 44
4.8 Storage Facility Availability; Ancillary Services. ........................................... 45
4.9 Storage Facility Testing. .................................................................................... 45
4.10 WREGIS ............................................................................................................. 47
4.11 Financial Statements. ......................................................................................... 48 ARTICLE 5 TAXES .................................................................................................................. 49
5.1 Allocation of Taxes and Charges. ..................................................................... 49
5.2 Cooperation. ....................................................................................................... 49 Agenda Page 96
ii
ARTICLE 6 MAINTENANCE OF THE FACILITY ................................................................ 49
6.1 Maintenance of the Facility. .............................................................................. 49
6.2 Maintenance of Health and Safety. .................................................................. 49
6.3 Shared Facilities. ................................................................................................ 49 ARTICLE 7 METERING ........................................................................................................... 50
7.1 Metering. ............................................................................................................. 50
7.2 Meter Verification. ............................................................................................. 50 ARTICLE 8 INVOICING AND PAYMENT; CREDIT ............................................................ 51
8.1 Invoicing.............................................................................................................. 51
8.2 Payment. ............................................................................................................. 51
8.3 Books and Records. ............................................................................................ 51
8.4 Payment Adjustments; Billing Errors. ............................................................ 52
8.5 Billing Disputes................................................................................................... 52
8.6 Netting of Payments. .......................................................................................... 52
8.7 Seller’s Development Security. ......................................................................... 52
8.8 Seller’s Performance Security. ......................................................................... 53
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral ....... 53
8.10 Buyer’s Financial Statements. ........................................................................... 54
8.11 Buyer’s Financial Covenants. ........................................................................... 54 ARTICLE 9 NOTICES .............................................................................................................. 56
9.1 Addresses for the Delivery of Notices............................................................... 56
9.2 Acceptable Means of Delivering Notice ........................................................... 56 ARTICLE 10 FORCE MAJEURE ............................................................................................. 56
10.1 Definition. ........................................................................................................... 56
10.2 No Liability If a Force Majeure Event Occurs ............................................... 57
10.3 Notice ................................................................................................................... 57
10.4 Termination Following Force Majeure Event or Development Cure Period. ................................................................................................................. 57
10.5 Right of First Refusal......................................................................................... 58 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ..................................................... 59
11.1 Events of Default ................................................................................................ 59
11.2 Remedies; Declaration of Early Termination Date. ....................................... 62
11.3 Damage and Termination Payments ................................................................ 62
11.4 Notice of Payment of Termination Payment or Damage Payment ............... 64
11.5 Disputes With Respect to Termination Payment or Damage Payment ........ 64
11.6 Intentionally Omitted. ....................................................................................... 64
11.7 Rights And Remedies Are Cumulative ............................................................ 65
11.8 Mitigation............................................................................................................ 65 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES ........ 65
12.1 No Consequential Damages. .............................................................................. 65 Agenda Page 97
iii
12.2 Waiver and Exclusion of Other Damages. ....................................................... 65 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY .......................... 66
13.1 Seller’s Representations and Warranties. ....................................................... 66
13.2 Buyer’s Representations and Warranties. ....................................................... 67
13.3 General Covenants. ............................................................................................ 68
13.4 Workforce Development. .................................................................................. 68
13.5 Community Benefits Funding. .......................................................................... 68 ARTICLE 14 ASSIGNMENT.................................................................................................... 68
14.1 General Prohibition on Assignments. .............................................................. 68
14.2 Collateral Assignment ....................................................................................... 69
14.3 Permitted Assignment by Seller. ...................................................................... 69
14.4 Shared Facilities; Portfolio Financing. ............................................................ 70
14.5 Buyer Financing Assignment. ........................................................................... 70
14.6 Permitted Transfer by Seller ............................................................................ 70 ARTICLE 15 DISPUTE RESOLUTION ................................................................................... 70
15.1 Governing Law. .................................................................................................. 70
15.2 Dispute Resolution. ............................................................................................ 70
15.3 Attorneys’ Fees. .................................................................................................. 71 ARTICLE 16 INDEMNIFICATION ......................................................................................... 71
16.1 Indemnification. ................................................................................................. 71
16.2 Claims.................................................................................................................. 71 ARTICLE 17 INSURANCE ...................................................................................................... 72
17.1 Insurance. ........................................................................................................... 72 ARTICLE 18 CONFIDENTIAL INFORMATION ................................................................... 73
18.1 Definition of Confidential Information. ........................................................... 73
18.2 Duty to Maintain Confidentiality. .................................................................... 74
18.3 Irreparable Injury; Remedies. .......................................................................... 74
18.4 Further Permitted Disclosure. .......................................................................... 75
18.5 Press Releases ..................................................................................................... 75 ARTICLE 19 MISCELLANEOUS ............................................................................................ 75
19.1 Entire Agreement; Integration; Exhibits......................................................... 75
19.2 Amendments. ...................................................................................................... 75
19.3 No Waiver. .......................................................................................................... 75
19.4 No Agency, Partnership, Joint Venture or Lease. .......................................... 75
19.5 Severability. ........................................................................................................ 76
19.6 Mobile-Sierra...................................................................................................... 76
19.7 Counterparts. ..................................................................................................... 76
19.8 Electronic Delivery............................................................................................. 76
19.9 Binding Effect. .................................................................................................... 76
19.10 No Recourse to Members of Buyer................................................................... 76 Agenda Page 98
iv
19.11 Forward Contract. ............................................................................................. 76
19.12 Change in Electric Market Design. .................................................................. 77
19.13 Further Assurances. ........................................................................................... 77 Exhibits:
Exhibit A Facility Description
Exhibit B Facility Construction and Commercial Operation Exhibit C Compensation
Exhibit D Scheduling Coordinator Responsibilities
Exhibit E Progress Reporting Form
Exhibit F-1 Form of Monthly Expected Available Generating Facility Capacity Report Exhibit F-2 Form of Monthly Expected Generating Facility Energy Report Exhibit F-3 Form of Monthly Expected Available Effective Storage Capacity Report Exhibit F-4 Form of Monthly Expected Available Storage Capability Report Exhibit G Guaranteed Energy Production Damages Calculation Exhibit H Form of Interim, Storage, Initial Full, and Full Commercial Operation Date Certificates
Exhibit I-1 Form of Installed Capacity Certificate
Exhibit I-2 Form of Effective Storage Capacity Certificate Exhibit J Form of Construction Start Date Certificate
Exhibit K Form of Letter of Credit
Exhibit L Form of Guaranty
Exhibit M Form of Replacement RA Notice
Exhibit N Notices
Exhibit O Storage Capacity Tests
Exhibit P Annual Storage Capacity Availability Calculation Exhibit Q Operating Restrictions
Exhibit R Metering Diagram
Exhibit S Form of Collateral Assignment Agreement
Exhibit T Intentionally Omitted
Exhibit U Form of Buyer Limited Assignment Agreement
Exhibit V GFCOD Development Cure Period Claims
Exhibit W Force Majeure Event and/or Development Cure Period Claim Form Agenda Page 99
SECOND AMENDED AND RESTATED
RENEWABLE POWER PURCHASE AGREEMENT
This Second Amended and Restated Renewable Power Purchase Agreement (“Agreement”) is entered into as of _________, 2022 (the “Execution Date”) and effective as of October 2, 2020 (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, the Parties entered into that certain Power Purchase and Sale Agreement dated as of July 1, 2019 (the “Original PPA”), that certain Amended and Restated Renewable Power Purchase Agreement dated as of October 2, 2020 (the “First A&R PPA”), that certain First Amendment to Renewable Power Purchase Agreement dated as of June 15, 2022 (the “First Amendment”), that certain Second Amendment to Power Purchase Agreement dated as of July 8, 2022 (the “Second Amendment”), and that certain Third Amendment to Power Purchase Agreement dated as of October 31, 2022 (the “Third Amendment”, and together with the Original PPA, the First A&R PPA, the First Amendment, and the Second Amendment, the “Prior PPA”), pursuant to which Seller agreed to sell, and Buyer agreed to purchase, on the terms and conditions set forth in the Prior PPA, the Product (as defined in the Prior PPA); WHEREAS, Interim Commercial Operation was achieved and the Delivery Term commenced on March 21, 2022, Storage CAISO Commercial Operation was achieved on August 15, 2022, and Storage Commercial Operation was achieved on August 21, 2022; WHEREAS, the Parties desire to amend and restate the Prior PPA in accordance with the terms of the transaction as set forth in this Agreement; 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
DEFINITIONSA
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 3.12. “Additional PV Capacity” means the last 93 MW AC portion of the Full Facility (i.e., the portion of the Full Facility comprised of the last 141 – 233 MW AC).
Agenda Page 100
2 “Adjusted Energy Production” has the meaning set forth in Exhibit G. “Adjusted Facility Energy” means, for the applicable period, the sum of (a) the total Facility Energy for such period, plus (b) the result of subtracting (i) the total Discharging Energy for such period from (ii) the total Discharging Energy for such period divided by the Storage Facility Loss Factor.
“Additional Facility” has the meaning set forth in Section 4.4(b). “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.
Notwithstanding the foregoing, with respect to Seller, Affiliate shall include NextEra Energy Operating Partners, LP and NextEra Energy Partners, LP, and their respective direct or indirect Affiliate subsidiaries.
“After-Tax Basis” means, with respect to any payment received, or deemed to have been received, by any Person, the amount of such payment (the “Base Payment”), supplemented by a further payment (the “Additional Payment”) to such Person so that the sum of the Base Payment plus the Additional Payment will be equal to the Base Payment, after deduction of the amount of all taxes required to be paid by such Person in respect of the receipt or accrual of the Base Payment and the Additional Payment (taking into account any current or previous credits or deductions arising from the underlying event giving rise to the payment, the Base Payment and the Additional Payment). Such calculations shall be made on the assumption that the recipient is subject to Federal income taxation at the statutory rate applicable to corporations under subchapter C of the Internal Revenue Code of 1986, as amended, and subject to the highest state and local income tax rate then in effect for corporations in the states in which the Person is subject to taxation during the applicable fiscal year, and shall take into account the deductibility, if applicable (for Federal income tax purposes), of state and local income taxes.
“Agreement” has the meaning set forth in the Preamble and includes any Exhibits, schedules and any written supplements hereto, the Cover Sheet, and any designated collateral, credit support or similar arrangement between the Parties. “Ancillary Services” means spinning reserve, non-spinning reserve, regulation up, regulation down, black start, voltage support, and any other ancillary services that the Facility is capable of providing consistent with the Operating Restrictions, as each is defined in the CAISO Tariff.
Agenda Page 101
3 “Annual Storage Capacity Availability” has the meaning set forth in Exhibit P. “Approved Forecast Vendor” means (x) any of CAISO or (y) any other vendor reasonably acceptable to both Buyer and Seller for the purposes of providing or verifying the forecasts under Section 4.3(d).
“Automated Dispatch System” or “ADS” has the meaning set forth in the CAISO Tariff. “Automatic Generation Control” or “AGC” has the meaning set forth in the CAISO Tariff.
“Availability Notice” means the portion of the Forecasted Product with respect to the Storage Facility.
“Available Generating Capacity” means the capacity of the Generating Facility, expressed in whole MWs, that is mechanically available to generate Energy. “Bankrupt” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due. “Battery Charging Factor” means the percentage SOC of the Storage Facility after the first five (5) hours of the charging phase of the applicable Storage Capacity Test. “Battery Discharging Factor” means one (1) minus the percentage SOC of the Storage Facility after the first four (4) hours of the discharging phase of the applicable Storage Capacity Test.
“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 Bid Curtailment” means the occurrence of all of the following:
(a) the CAISO provides notice to a Party or the Scheduling Coordinator for the Facility, requiring the Party to deliver less Facility Energy from the Facility than the full amount of Energy forecasted in accordance with Section 4.3 to be produced from the Facility for a period of time; and
(b) for the same time period as referenced in (a), the notice referenced in (a) results from Buyer or the SC for the Facility:
Agenda Page 102
4 (i) not having submitted a Self-Schedule or an Energy Supply Bid for the MW subject to the reduction; or
(ii) having submitted an Energy Supply Bid and the MW subject to the reduction were not awarded a schedule in connection with such Energy Supply Bid; or (iii) having submitted a Self-Schedule for less than the full amount of Facility Energy forecasted to be generated by or delivered from the Facility.
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 or stored 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 current Settlement Intervals, during which Seller reduces Facility Energy from the Facility pursuant to or as a result of (a) Buyer Bid Curtailment or (b) a Buyer Curtailment Order; provided, that 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 Dispatched Test” has the meaning in Section 4.9(c). “Buyer’s Indemnified Parties” has the meaning set forth in Section 18.2. “Buyer’s WREGIS Account” has the meaning set forth in Section 4.10(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 metering plan including a SQMD Plan, 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 Energy (adjusted for Electrical Losses), Charging Energy, and Discharging Energy.
“CAISO Certification” means the certification and testing requirements for a storage unit set forth in the CAISO Tariff that are applicable to the Facility, including certification and testing Agenda Page 103
5 for all Ancillary Services, PMAX, and PMIN associated with such storage units, that are applicable to the Facility.
“CAISO COM COD Approval” means the approval email or other documentation sent by CAISO approving the commercial operation of constructed, installed, and tested phases of megawatts under CAISO’s COM process, which may take the form of an email from CAISO Resource Implementation Management System (RIMS) titled similar to “Notification of Commercial Operation (COD)” or “Notification of Commercial Operation for Markets (COM)”. “CAISO Dispatch” means any Charging Notice or Discharging Notice given by the CAISO to the Facility, whether through ADS, AGC or any successor communication protocol, communicating an Ancillary Service Award (as defined in the CAISO Tariff) or directing the Storage Facility to charge or discharge at a specific MW rate for a specified period of time or amount of MWh.
“CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Resource ID” has the meaning set forth in the CAISO Tariff. “CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time to time and approved by FERC.
“Calculation Interval” has the meaning set forth in Exhibit P. “California Renewables Portfolio Standard” or “RPS” means the renewable energy program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. “Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of power that the Facility can generate and deliver to the Delivery Point at a particular moment and that can be purchased and sold under CAISO market rules, including Resource Adequacy Benefits. “Capacity Availability Factor” has the meaning set forth in Exhibit C. “Capacity Damages” means, collectively, Storage Capacity Damages and PV Capacity Damages.
“Capacity Test” means the Commercial Operation Storage Capacity Test, Storage Capacity Test, or any other test conducted pursuant to Exhibit O. “CEC” means the California Energy Commission or its successor agency.
Agenda Page 104
6 “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 Interim Commercial Operation Date, Initial Full Commercial Operation Date, or the Full Commercial Operation Date, as applicable, that the CEC has pre-certified) that the Generating 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 that in calculating ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more intermediate entities shall not be counted towards Ultimate Parent’s ownership interest in Seller unless Ultimate Parent directly or indirectly owns 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. “Charging Energy” means the as-available Energy produced by the Generating Facility, less transformation and transmission losses, if any, delivered to the Storage Facility pursuant to a Charging Notice. All Charging Energy shall be used solely to charge the Storage Facility, and all Charging Energy shall be generated solely by the Generating Facility. “Charging Notice” means the operating instruction, and any subsequent updates, given by Buyer’s SC or the CAISO to the Facility, directing the Storage Facility to charge at a specific MW rate for a specified period of time or amount of MWh; provided, (a) any such operating instruction shall be in accordance with the Operating Restrictions, and (b) if, during a period when the Storage Facility is instructed by Buyer’s SC or the CAISO to be charging, the actual power output level of the Generating Facility is less than the power level set forth in an applicable “Charging Notice”, such “Charging Notice” shall be deemed to be automatically adjusted to be equal to the actual power level of the Generating Facility. For the avoidance of doubt, (i) any Buyer Dispatched Test shall be considered a Charging Notice, and (ii) any Charging Notice shall not constitute a Buyer Bid Curtailment, Buyer Curtailment Order or Curtailment Order. “COD Certificate” has the meaning set forth in Exhibit B. “Commercial Operation” has the meaning set forth in Exhibit B. “Commercial Operation Delay Damages” means an amount equal to (a) for the Interim Commercial Operation Date, five hundred dollars ($500) per day for each MW of Delayed Agenda Page 105
7 Capacity, (b) for the Initial Full Commercial Operation Date and for the Full Commercial Operation Date, one thousand dollars ($1000) per day for each MW of Delayed Capacity, and (c) for the Storage Commercial Operation Date, one thousand dollars ($1500) per day for each MW of Delayed Capacity.
“Commercial Operation for Markets” or “COM” has the meaning provided to it in the ‘CAISO’s Business Practice Manual for Generator Management’ revised May 5, 2022, as the same may be amended or modified from time to time.
“Commercial Operation Storage Capacity Test” means the Storage Capacity Test conducted in connection with Commercial Operation of the Storage Facility, including any additional Storage Capacity Test for additional Storage Facility capacity installed after the Commercial Operation Date pursuant to Section 5 of Exhibit B. “Communications Protocols” means certain Operating Restrictions developed by the Parties pursuant to Exhibit Q that involve procedures and protocols regarding communication with respect to the operation of the Storage Facility pursuant to this Agreement. “Compliance Actions” has the meaning set forth in Section 3.12. “Compliance Expenditure Cap” has the meaning set forth in Section 3.12. “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. For clarity, the Contract Price is each of the Renewable Rate and the Storage Rate. “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 Full Commercial Operation Date and each subsequent Contract Year shall commence on the anniversary of the Full 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 or financed 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.
Agenda Page 106
8 “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.
“CPM Price” has the meaning set forth in Section 3.5(b). “CPUC” means the California Public Utilities Commission, or successor entity. “Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by Fitch, S&P or Moody’s. “Cure Plan” has the meaning set forth in Section 11.1(b)(iii). “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, (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 Generating 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.
To the extent permitted by CAISO, Buyer shall use commercially reasonable efforts to deliver Charging Energy to the Storage Facility during such Curtailment Order. “Curtailment Period” means the period of time, as measured using current Settlement Intervals, during which Seller reduces generation from the Generating Facility pursuant to a Curtailment Order; provided that the Curtailment Period shall be inclusive of the time required for the Facility to ramp down and ramp up.
Agenda Page 107
9 “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 Full Commercial Operation Date, in a dollar amount equal to the Development Security amount required hereunder. For avoidance of doubt, any Delay Damages paid by Seller to Buyer under Exhibit B shall not be subtracted from the Damage Payment amount.
“Day-Ahead Forecast” has the meaning set forth in Section 4.3(c). “Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Day-Ahead Schedule” has the meaning set forth in the CAISO Tariff. “Deemed Delivered Energy” means the amount of Energy expressed in MWh that the Generating Facility would have produced and delivered to the Storage Facility or the Delivery Point, but that is not produced by the Generating Facility during a Buyer Curtailment Period or Buyer Default or other Buyer failure to perform that directly prevents Seller from being able to deliver Facility Energy to the Delivery Point, which amount shall be equal to the Real-Time Forecast (of the hourly expected Energy produced by the Generating Facility) provided pursuant to Section 4.3(d) for the period of time during the Buyer Curtailment Period (or other relevant period), less the amount of Energy delivered to the Storage Facility or the Delivery Point during the Buyer Curtailment Period (or other relevant period); provided that, if the applicable difference is negative, the Deemed Delivered Energy shall be zero (0). If the LMP for the Facility’s PNode during such Settlement Interval was less than zero, Deemed Delivered Energy shall be reduced in any Settlement Interval by the amount of any Charging Energy that was not able to be delivered to the Storage Facility during such Settlement Interval due to the unavailability of the Storage Facility due to a Forced Facility Outage.
“Defaulting Party” has the meaning set forth in Section 11.1(a). “Deficient Month” has the meaning set forth in Section 4.10(e). “Delay Damages” means Daily Delay Damages and Commercial Operation Delay Damages.
“Delayed Capacity” means the positive difference between (a) the Guaranteed Interim PV Capacity, the Guaranteed Storage Capacity, the Guaranteed Initial Full PV Capacity, or the Guaranteed Full PV Capacity, as applicable, and (b) the current Installed PV Capacity at the time of the Interim Commercial Operation Date, Installed Storage Capacity at the time of the Storage Commercial Operation Date, Installed PV Capacity at the time of the Initial Full Commercial Operation Date, and Installed PV Capacity at the time of the Full Commercial Operation Date, as applicable.
“Delivery Point” has the meaning set forth in Exhibit A.
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10 “Delivery Term” shall commence on the Interim Commercial Operation Date and continue through the period of Contract Years set forth on the Cover Sheet following the Full 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 (a) cash or (b) a Letter of Credit in the amount set forth on the Cover Sheet.
“Discharging Energy” means all Energy delivered to the Delivery Point from the Storage Facility, net of the Electrical Losses and Station Use, as measured at the Storage Facility Metering Points by the Storage Facility Meter. For the avoidance of doubt, all Discharging Energy will have originally been delivered to the Storage Facility as Charging Energy. “Disclosing Party” has the meaning set forth in Section 18.2. “Discharging Notice” means the operating instruction, and any subsequent updates, given by Buyer’s SC or the CAISO to the Facility, directing the Storage Facility to discharge Discharging Energy at a specific MW rate for a specified period of time or amount of MWh; provided; (a) any such operating instruction or updates shall be in accordance with the Operating Restrictions, and (b) if, during a period when the Storage Facility is instructed by Buyer’s SC or the CAISO to be discharging, the sum of PV Energy and Discharging Energy would exceed the Interconnection Capacity Limit, such “Discharging Notice” shall be deemed to be automatically adjusted to reduce the amount of Discharging Energy so that the total Facility Energy does not exceed the Interconnection Capacity Limit, until such time as Buyer’s SC or the CAISO issues a further modified Discharging Notice. For the avoidance of doubt, any Discharging Notice shall not constitute a Buyer Bid Curtailment, Buyer Curtailment Order or Curtailment Order. “Early Termination Date” has the meaning set forth in Section 11.2(a). “Effective Date” has the meaning set forth on the Preamble. “Effective FCDS Date” means the date identified in Seller’s Notice to Buyer (along with a Full Capacity Deliverability Status Finding from CAISO) as the date that the Facility has attained Full Capacity Deliverability Status.
“Effective Storage Capacity” means the lesser of (a) PMAX, and (b) the maximum dependable operating capacity of the Storage Facility to discharge electric energy for four (4) hours of continuous discharge, as measured in MW AC at the Delivery Point pursuant to a Capacity Test (including the Commercial Operation Capacity Test), as evidenced by a certificate substantially in the form attached as Exhibit I-2 hereto, in either case (a) or (b) up to but not in excess of (i) the Guaranteed Storage Capacity (with respect to a Commercial Operation Capacity Test) or (ii) the Installed Storage Capacity (with respect to any other Storage Capacity Test).
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11 “Efficiency Rate” means the rate of conversion of the Charging Energy into Discharging Energy, as calculated pursuant to a Storage Capacity Test by dividing Energy Out by Energy In. “Electrical Losses” means all transmission or transformation losses between the Facility and the Delivery Point, including losses associated with (a) Energy, which shall include delivery of PV Energy to the Delivery Point and Charging Energy, and (b) delivery of Discharging Energy to the Delivery Point.
“Eligible Intermittent Resource Protocol” or “EIRP” has the meaning set forth in the CAISO Tariff or a successor CAISO program for intermittent resources. “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 Generating Facility, measured in kilowatt-hours or multiple units thereof. Energy shall include without limitation, reactive power and any other electrical energy products that may be developed or evolve from time to time during the Contract Term.
“Energy In” has the meaning set forth in Section III.A(5) of Exhibit O. “Energy Management System” or “EMS” means the Facility’s energy management system.
“Energy Out” has the meaning set forth in Section III.A(10) of Exhibit O. “Energy Supply Bid” has the meaning set forth in the CAISO Tariff. “Event of Default” has the meaning set forth in Section 11.1. “Execution Date” has the meaning set forth on the Preamble. “Exercise Period” has the meaning set forth in Section 10.5(b) “Excess MWh” has the meaning set forth in Exhibit C.
“Expected Interim 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 Generating Facility during the Interim Facility Contract Period and each Contract Year (assuming no Charging Energy or Discharging Energy in such Contract Year), which for each Contract Year is the quantity specified on the Cover Sheet, which amount shall be Agenda Page 110
12 adjusted proportionately to the reduction from Guaranteed Full PV Capacity to Installed PV Capacity, if applicable.
“Expected FCDS Date” means the date set forth in the Milestones Section of the Cover Sheet which is the date the Facility is expected to achieve Full Capacity Deliverability Status. “Expected Full Commercial Operation Date” has the meaning set forth on the Cover Sheet.
“Expected Initial Full Commercial Operation Date” has the meaning set forth on the Cover Sheet.
“Facility” means the Generating Facility and the Storage Facility. “Facility Energy” means the sum of PV Energy and Discharging Energy during any Settlement Interval or Settlement Period, net of Electrical Losses and Station Use, as measured by the Facility Meter; provided, in no event shall the Facility Energy in any month exceed the sum of PV Energy and Discharging Energy reported by Seller for such month pursuant to the SMQD Plan, if applicable.
“Facility Meter” means the meter that will measure all Facility Energy. Without limiting Seller’s obligation to deliver Facility Energy to the Delivery Point, the Facility Meter will be located, and Facility Energy will be measured, at the high voltage side of the main step up transformer and will be subject to adjustment to measure Facility Energy at the Delivery Point consistent with CAISO meter requirements and Prudent Operating Practices to account for Electrical Losses.
“FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“Financial Close” means Seller and/or one of its Affiliates on Seller’s behalf has obtained approval from its operating committee to commit capital sufficient for the full construction of the Facility and Seller has delivered to Buyer documentation reasonably satisfactory to Buyer evidencing the foregoing.
“Fitch” means Fitch Ratings Ltd., or its successor.
“First A&R PPA” has the meaning set forth in the Recitals. “First Amendment” has the meaning set forth in the Recitals. “Force Majeure Event” has the meaning set forth in Section 10.1. “Forced Facility Outage” means an unexpected failure of one or more components of the Facility that prevents Seller from generating some or all Energy or making some or all Facility Energy available at the Delivery Point and that is not the result of a Force Majeure Event. “Forecasted Product” has the meaning set forth in Section 4.3(b).
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13 “Forward Certificate Transfers” has the meaning set forth in Section 4.10(a). “Full Capacity Deliverability Status” or “FCDS” has the meaning set forth in the CAISO Tariff.
“Full Capacity Deliverability Status Finding” means a written confirmation from the CAISO that the Facility is eligible for Full Capacity Deliverability Status. “Full COD Certificate” has the meaning set forth in Exhibit B. “Full Commercial Operation” has the meaning set forth in Exhibit B. “Full Commercial Operation Date” has the meaning set forth in Exhibit B. “Full Facility” means the 233 MW AC 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 photovoltaic Energy to the Delivery Point. “Future Environmental Attributes” shall mean any and all generation attributes (other than Green Attributes or Renewable Energy Incentives) 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) that are attributable, now, or in the future, to the generation of electrical energy by the Facility. 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 and Capacity Attributes.
“Generating Facility” means the solar photovoltaic generating facility described on the Cover Sheet and in Exhibit A, located at the Site and including mechanical equipment and associated facilities and equipment required to deliver (i) PV Energy to the Delivery Point, and (ii) Charging Energy to the Storage Facility; provided, that the “Generating Facility” does not include the Storage Facility or the Shared Facilities.
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14 “GFCOD Development Cure Period Claims” are identified in Exhibit V. “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, attributable to the generation from the Facility and its displacement of conventional energy generation. Green Attributes include but are not limited to Renewable Energy Credits, as well as: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; (3) the reporting rights to such avoided emissions, such as Green Tag Reporting Rights. Green Tags are accumulated on a MWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Facility Energy. Green Attributes do not include (i) any energy, capacity, reliability or other power attributes from the Facility, (ii) Tax 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 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 Certification” or “Green-e Certified” means the Green Attributes provided to Buyer pursuant to this Agreement are certified under the Green-e Energy National Standard by Buyer after delivery by Seller of such Green Attributes to Buyer. “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 3.4, updated November 12, 2019, as may be further amended from time to time. “Green-e Tracking Attestation” means that certain Green-e Energy Attestation Form, as described in the Green-e Energy National Standard.
“Guaranteed Capacity” means the sum of (x) the Guaranteed Full PV Capacity and (y) the Guaranteed Storage Capacity.
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15 “Guaranteed Construction Start Date” means the Expected Construction Start Date, as such date may be extended pursuant to Exhibit B.
“Guaranteed Efficiency Rate” means the minimum guaranteed Efficiency Rate of the Facility throughout the Delivery Term, as set forth on the Cover Sheet. “Guaranteed Energy Production” has the meaning set forth in Section 4.7(d). “Guaranteed Interim Commercial Operation Date” has the meaning set forth in Exhibit B.
“Guaranteed Full Commercial Operation Date” or “GFCOD” has the meaning set forth in Exhibit B.
“Guaranteed Initial Full Commercial Operation Date” has the meaning set forth in Exhibit B.
“Guaranteed Storage Commercial Operation Date” has the meaning set forth in Exhibit B.
“Guaranteed Interim PV Capacity” means the interim 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 Full PV Capacity” means the generating capacity of the Generating 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 Initial Full PV Capacity” means the generating capacity of the Generating Facility, as measured in MW AC at the Delivery Point, that Seller commits to install by the Guaranteed Initial Full Commercial Operation Date.
“Guaranteed Storage Availability” has the meaning set forth in Section 4.8. “Guaranteed Storage Capacity” means the maximum dependable operating capability of the Storage Facility to discharge electric Energy, as measured in MW AC at the Delivery Point for four (4) hours of continuous discharge, that Seller commits to install pursuant to this Agreement as set forth on the Cover Sheet.
“Guarantor” means, with respect to Seller, any Person that (a) is an Affiliate of Seller, or other third party reasonably acceptable to Buyer, (b) has a Credit Rating of BBB- or better from S&P or Fitch, or a Credit Rating of Baa3 or better from Moody’s, (c) is incorporated or organized in a jurisdiction of the United States and is in good standing in such jurisdiction, and (d) executes and delivers a Guaranty for the benefit of Buyer. If ratings by S&P, Moody’s and Fitch are not equivalent, the lowest rating shall apply.
“Guaranty” means a guaranty from a Guarantor provided for the benefit of Buyer substantially in the form attached as Exhibit L, or as reasonably acceptable to Buyer.
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16 “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. “Initial Full COD Certificate” has the meaning set forth in Exhibit B. “Initial Full Commercial Operation” has the meaning set forth in Exhibit B. “Initial Full Commercial Operation Date” has the meaning set forth in Exhibit B. “Initial Full Facility” means the portion of the Full Facility comprised of the initial Installed Capacity of one hundred (100) MW AC as of the Interim Commercial Operation Date plus the Subject 40 MW PV (i.e., the portion of the Full Facility comprising up to 140 MW AC of the Guaranteed Initial Full PV Capacity).
“Initial Synchronization” means the initial delivery of Facility Energy to the Delivery Point.
“Installed Capacity” means the sum of (x) the Installed PV Capacity and (y) the Installed Storage Capacity.
“Installed PV Capacity” means the actual generating capacity of the Generating Facility, as measured in MW AC at the Delivery Point, that achieves Interim Commercial Operation, Initial Full Commercial Operation, or Full Commercial Operation, as applicable, as evidenced by a certificate substantially in the form attached as Exhibit I-1 hereto. “Installed Storage Capacity” means the lesser of (a) PMAX, and (b) maximum dependable operating capacity of the Storage Facility to discharge electric energy for four (4) hours of continuous discharge, 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-1 hereto, as such capacity may be adjusted pursuant to Section 5 of Exhibit B. “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 can be delivered to the Delivery Point, in the amount of 269 MW.
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17 “Interconnection Facilities” means the interconnection facilities, control and protective devices and metering facilities required to connect the Facility with the Transmission System in accordance with the Interconnection Agreement.
“Interest Rate” has the meaning set forth in Section 8.2. “Interim COD Certificate” has the meaning set forth in Exhibit B. “Interim Commercial Operation” has the meaning set forth in Exhibit B. “Interim Commercial Operation Date” has the meaning set forth in Exhibit B. “Interim Deliverability Status” has the meaning set forth in the CAISO Tariff. “Interim Facility” means the initial one hundred (100) MW AC portion of the Full Facility.
“Interim Facility Contract Period” means the period of time commencing on the Interim Commercial Operation Date and continuing until the occurrence of the Full Commercial Operation Date.
“Interim Guaranteed Energy Production” has the meaning set forth in Section 4.7(c). “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.
“ITC Recapture Period” means the period beginning on the Effective Date and ending five (5) years and three (3) months after the Storage Commercial Operation Date. “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.
“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 senior or subordinated construction, interim, back leverage or long-term debt, equity or tax equity financing or refinancing for or in connection with the development, construction, purchase, installation or operation of the Facility, whether that financing or refinancing takes the form of private debt Agenda Page 116
18 (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- from S&P or A3 from Moody’s, in a form substantially similar to the letter of credit set forth in Exhibit K. If ratings by S&P and Moody’s are not equivalent, the lower rating shall apply.
“Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the State of California. “Local Capacity Area Resources” has the meaning set forth in the CAISO Tariff. “Locational Marginal Price” or “LMP” has the meaning set forth in the CAISO Tariff. “Losses” means, 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, Capacity Attributes, and Renewable Energy Incentives.
“Lost Output” has the meaning set forth in Section 4.7. “Master Data File” has the meaning set forth in the CAISO Tariff. “Milestones” means the development activities for significant permitting, interconnection, financing and construction milestones set forth on the Cover Sheet. “Monthly Capacity Payment” means the payment required to be made by Buyer to Seller each month of the Delivery Term as compensation for the Effective Storage Capacity and Capacity Attributes associated with the Storage Facility, as calculated in accordance with Exhibit C. “Monthly Forecast” has the meaning set forth in Section 4.3(b). “Monthly SQMD Charge” has the meaning set forth in Section 4.1(a).
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19 “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.
“NEER” means NextEra Energy Resources, LLC.
“Negative LMP” means, in any Settlement Period or Settlement Interval, the LMP at the Facility’s PNode is less than zero dollars ($0).
“Net Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “Network Upgrades” has the meaning set forth in the CAISO Tariff. “Non-Buyer Dispatch” means a dispatch by Seller pursuant to a Seller Initiated Test. “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).
“Operating Restrictions” means those rules, requirements, and procedures set forth on Exhibit Q.
“Original PPA” has the meaning in the Recitals.
“Party” has the meaning set forth in the Preamble.
“Performance Measurement Period” means each two (2) full Contract Year period beginning on the Full Commercial Operation Date.
“Performance Security” means (i) cash, (ii) a Letter of Credit or (iii) a Guaranty, in the amount set forth on the Cover Sheet.
“Permitted Transfer” means each of the following transactions:
(a) Transactions among Affiliates of Seller, including any corporate reorganization, merger, combination or similar transaction or transfer of assets or ownership interests involving Seller or its Affiliates; provided (i)(A) Ultimate Parent retains the authority, directly or indirectly, to control Seller (or if applicable, the surviving entity), or (B) a wholly-owned, indirect subsidiary of Ultimate Parent operates the Facility, and (ii) if Seller is not the surviving entity, the transferee (A) executes and delivers to Buyer a written agreement under which the transferee assumes in writing all of Seller’s duties and obligations under this Agreement and otherwise agrees to be bound by all of the terms and conditions of this Agreement, and (B) meets the Seller Security requirements;
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20 (b) A Change of Control of Ultimate Parent;
(c) Any change of economic and voting rights triggered in Seller’s organization documents arising from the financing of the Facility and that does not result in the transfer of ownership, economic or voting rights in any entity that had no such rights immediately prior to the change;
(d) The direct or indirect transfer of shares of, or equity interests in, Seller to a Lender; or
(e) A transfer of the Facility packaged with any of the following: (i) all or substantially all of the assets of NEER or Ultimate Parent; (ii) all or substantially all of NEER’s or Ultimate Parent’s renewable energy generation portfolio; or (iii) all or substantially all of NEER’s or Ultimate Parent’s solar generation and/or energy storage portfolio; provided, that in the case of each of (i), (ii) and (iii): (A) the transferee (1) executes and delivers to Buyer a written agreement under which the transferee assumes in writing all of Seller’s duties and obligations under this Agreement and otherwise agrees to be bound by all of the terms and conditions of this Agreement, and (2) meets the Seller Security requirements; and (B) the entity that operates the Facility following such transfer is (or contracts with) a qualified operator. “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; provided that if ratings by S&P, Moody’s and Fitch are not equivalent, the lowest rating shall apply; and
(b) At least two (2) years of experience in the ownership and operations of power generation and energy storage facilities similar to the Facility, or has retained a third-party with such experience to operate the Facility.
Notwithstanding the foregoing, with respect to Seller, Permitted Transferee shall include NextEra Energy Operating Partners, LP and NextEra Energy Partners, LP, and their respective direct or indirect subsidiaries.
“Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“Planned 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).
“PMAX” means the applicable CAISO-certified maximum operating level of the Storage Facility.
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21 “PMIN” means the applicable CAISO-certified minimum operating level of the Storage Facility.
“PNode” has the meaning set forth in the CAISO Tariff.
“Portfolio” means the single portfolio of electrical energy generating, energy storage, 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 tax equity or debt transaction entered into 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.
“Prior PPA” has the meaning in the Recitals.
“Product” has the meaning set forth on the Cover Sheet. “Progress Report” means a progress report including the items set forth in Exhibit E. “Prudent Operating Practice” means (a) the applicable practices, methods and acts required by or consistent with applicable Laws and reliability criteria, and otherwise engaged in or approved by a significant portion of the electric utility industry during the relevant time period with respect to grid-interconnected, utility-scale generating facilities with integrated energy storage 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, Agenda Page 120
22 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 with integrated energy storage 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.
“PTC” means the production tax credit established pursuant to Section 45 of the United States Internal Revenue Code of 1986, as such Law may be amended or superseded. “PTC Rate” means the then-current rate of the PTC (per MWh) on an After-Tax Basis as set forth in applicable Internal Revenue Service guidance. “PV Capacity Damages” has the meaning set forth in Section 5 of Exhibit B. “PV Energy” means that portion of Energy that is delivered directly from the Generating Facility to the Delivery Point and is not Discharging Energy. “Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “RA Deficiency Amount” means the liquidated damages payment that Seller shall pay to Buyer for an applicable RA Shortfall Month as calculated in accordance with Section 3.8(b). “RA Guarantee Date” means the date set forth in the deliverability Section of the Cover Sheet which is the date the Facility is expected to achieve Full Capacity Deliverability Status. “RA Shortfall Month” means, for purposes of calculating an RA Deficiency Amount under Section 3.8(b), any month, commencing on the RA Guarantee Date, during which the Net Qualifying Capacity of the Facility for such month was less than the Qualifying Capacity of the Facility for such month (including any month during the period between the RA Guarantee Date and the Effective FCDS Date, if applicable).
“Real-Time Forecast” has the meaning set forth in Section 4.3(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.
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23 “Remedial Action Plan” has the meaning set forth in Section 2.6. “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 a Future Environmental Attribute.
“Renewable Rate” has the meaning set forth on the Cover Sheet. “Replacement Energy” has the meaning set forth in Exhibit G. “Replacement Green Attributes” has the meaning set forth in Exhibit G. “Replacement Product” has the meaning set forth in Exhibit G. “Replacement RA” means Resource Adequacy Benefits, if any, equivalent to those that would have been provided by the Facility with respect to the applicable month in which a RA Deficiency Amount is due to Buyer, and located within SP 15 TAC Area and, to the extent that the Facility would have qualified as a Local Capacity Area Resource for such month, described as a Local Capacity Area Resource.
“Requested Confidential Information” has the meaning set forth in Section 18.2. “Resource Adequacy Benefits” means the rights and privileges attached to the Facility that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in any Resource Adequacy Rulings and shall include any local, zonal or otherwise locational attributes associated with the Facility.
“Resource Adequacy Rulings” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024 and any other existing or subsequent ruling or decision, or any other resource adequacy laws, rules or regulations enacted, adopted or promulgated by any applicable Governmental Authority, however described, as such decisions, rulings, Laws, rules or regulations may be amended or modified from time-to-time throughout the Contract Term.
“ROFR Offer” has the meaning set forth in Section 10.5(a). “RPS Energy” has the meaning set forth in Section 3.10(b).
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24 “S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of S&P Global Inc.) or its successor.
“Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” has a corollary meaning.
“Scheduled Energy” means the Facility Energy that clears under the applicable CAISO market based on the final Day-Ahead Schedule, FMM Schedule (as defined in the CAISO Tariff), and/or any other financially binding Schedule, market instruction or dispatch for the Facility for a given period of time implemented in accordance with the CAISO Tariff. “Scheduling Coordinator” or “SC” means an entity certified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff for the purposes of undertaking the functions specified in “Responsibilities of a Scheduling Coordinator,” of the CAISO Tariff, as amended from time to time.
“Second Amendment” has the meaning set forth in the Recitals. “Second Amendment Effective Date” means July 8, 2022.
“Security Interest” has the meaning set forth in Section 8.9. “Self-Schedule” has the meaning set forth in the CAISO Tariff. “Seller” has the meaning set forth on the Cover Sheet.
“Seller Initiated Test” has the meaning set forth in Section 4.9(c). “Seller’s WREGIS Account” has the meaning set forth in Section 4.10(a). “Settlement Amount” means the Non-Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Party. If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be zero dollars ($0). The Settlement Amount does not include consequential, incidental, punitive, exemplary or indirect or business interruption damages. “Settlement Interval” has the meaning set forth in the CAISO Tariff. “Settlement Period” has the meaning set forth in the CAISO Tariff. “Settlement Quality Meter Data” has the meaning set forth in the CAISO Tariff. “Shared Facilities” means the gen-tie lines, transformers, substations, or other equipment, permits, contract rights, and other assets and property (real or personal), in each case, as necessary to enable delivery of energy from the Facility (which is excluded from Shared Facilities) to the point of interconnection, including the Interconnection Agreement itself, that are used in common with third parties.
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25 “Showing Month” shall be the calendar month of the Delivery Term that is the subject of the RA Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the CAISO Tariff. For illustrative purposes only, pursuant to the CAISO Tariff and Resource Adequacy Rulings in effect as of the Effective Date, the monthly RA Compliance Showing made in June is for the Showing Month of August.
“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, that 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.
“SOC” or “State of Charge” means the level of charge of the Storage Facility relative to its maximum capacity.
“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(a). “Station Use” means:
(a) The Energy produced or discharged by the Facility (and not otherwise included in the Efficiency Rate) that is used within the Facility to power information technology, telecommunications, lights, motors, temperature control systems, facility control systems and other electrical loads that are necessary for operation of the Facility; and (b) The Energy produced or discharged by the Facility that is consumed within the Facility’s electric energy distribution system as losses. “Storage Capability” has the meaning in Exhibit P.
“Storage Capacity Availability Payment True-Up” has the meaning set forth in Exhibit C.
“Storage Capacity Availability Payment True-Up Amount” has the meaning set forth in Exhibit C.
“Storage Capacity Damages” has the meaning set forth in Section 5 of Exhibit B.
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26 “Storage Capacity Test” means any test or retest of the Storage Facility to establish the Installed Storage Capacity, Effective Storage Capacity and/or Efficiency Rate, conducted in accordance with the testing procedures, requirements and protocols set forth in Section 4.9 and Exhibit O.
“Storage COD Certificate” has the meaning set forth in Exhibit B. “Storage Commercial Operation” has the meaning set forth in Exhibit B. “Storage Commercial Operation Date” has the meaning set forth in Exhibit B. “Storage Cure Plan” has the meaning set forth in Section 11.1(b)(iv). “Storage Facility” means the energy storage facility described on the Cover Sheet and in Exhibit A (including the operational requirements of the energy storage facility), located at the Site and including mechanical equipment and associated facilities and equipment required to deliver Storage Product (but excluding any Shared Facilities), and as such storage facility may be expanded or otherwise modified from time to time in accordance with the terms hereof. “Storage Facility Loss Factor” shall be the greater of (i) the Guaranteed Efficiency Rate set forth on the Cover Sheet, or (ii) the percentage calculated by dividing Discharging Energy in the applicable month of the Delivery Term by Charging Energy in the same month of the Delivery Term.
“Storage Facility Meter” means the bi-directional revenue quality meter or meters (with a 0.3 accuracy class), along with a compatible data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Charging Energy delivered to the Storage Facility Metering Points and the amount of Discharging Energy discharged from the Storage Facility at the Storage Facility Metering Points to the Delivery Point for the purpose of invoicing in accordance with Section 8.1. For clarity, the Facility will contain multiple measurement devices that will make up the Storage Facility Meter, and, unless otherwise indicated, references to the Storage Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together.
“Storage Facility Metering Points” means the locations of the Storage Facility Meters shown on Exhibit R.
“Storage Product” means (a) Discharging Energy, (b) Capacity Attributes, if any, (c) Effective Storage Capacity, and (d) Ancillary Services, if any, in each case arising from or relating to the Storage Facility.
“Storage Rate” has the meaning set forth on the Cover Sheet. “Stored Energy Level” means, at a particular time, the amount of electric Energy in the Storage Facility available to be discharged as Discharging Energy, expressed in MWh.
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27 “Subject 40 MW PV” means the forty (40) MW AC of the Facility, which is in addition to the initial Installed Capacity of one hundred (100) MW AC as of the Interim Commercial Operation Date (i.e., the portion of the Full Facility comprised of the initial 101 – 140 MW AC of the Guaranteed Initial Full PV Capacity).
“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 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). “Test Energy” means with respect to (1) the Interim Facility, 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 Interim Commercial Operation Date; (2) the Initial Full Facility, 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 from the Subject 40 MW PV 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 for the Subject 40 MW PV and (b) ending upon the occurrence of the Initial Full Commercial Operation Date, and (3) the Full Facility, 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 from the Full Facility 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 for the Full Facility and (b) ending upon the occurrence of the Full Commercial Operation Date, as applicable. “Test Energy Rate” has the meaning set forth in Section 3.6. “Third Amendment” has the meaning set forth in the Recitals. “Third Party Offer” has the meaning set forth in Section 10.5(a).
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28 “Third Party Transaction” has the meaning set forth in Section 10.4. “Total YTD Calculation Settlement Intervals” has the meaning set forth in Exhibit C. “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 Facility Energy onto the Transmission System. “Ultimate Parent” means NextEra Energy, Inc., a Delaware corporation. “Unavailable Calculation Interval” has the meaning set forth in Exhibit P. “Variable Energy Resource” or “VER” has the meaning set forth in the CAISO Tariff. “WREGIS” means the Western Renewable Energy Generation Information System or any successor renewable energy tracking program.
“WREGIS Certificate Deficit” has the meaning set forth in Section 4.10(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:
(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; Agenda Page 127
29 (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
(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.
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30 (a) The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect until the conclusion of the Delivery Term, subject to any early termination provisions set forth herein (“Contract Term”); provided, however, that subject to Buyer’s obligations in Section 3.6, 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 for the Interim Facility, Section 2.3 for the Storage Facility, Section 2.4 for the Full Facility, and Section 2.7 for the Initial Full Facility.
(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.
2.2 Conditions Precedent to Commencement of the Delivery Term. 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 for Interim Commercial Operation and (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I-1 setting forth the Installed Capacity on the Interim Commercial Operation Date; (b) A Participating Generator Agreement and a Meter Service Agreement between Seller and CAISO shall have been executed and delivered and be in full force and effect, and a copy of each such agreement delivered to Buyer;
(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 Interim Facility have been obtained and all conditions thereof have been satisfied and shall be in full force and effect;
(e) Seller has obtained CAISO Certification for the Interim Facility; (f) Seller has received CEC Precertification of the Interim Facility (and reasonably expects to receive final CEC Certification and Verification for the Interim Facility in no more than one hundred eighty (180) days from the Interim Commercial Operation Date); (g) 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 Interim Facility, QRE service agreements, and other appropriate documentation required to effect Interim Facility registration Agenda Page 129
31 with WREGIS and to enable Renewable Energy Credit transfers related to the Interim Facility within the WREGIS system;
(h) Seller has delivered the Performance Security for the Guaranteed Capacity of the Interim Facility to Buyer in accordance with Section 8.8; and (i) Seller has paid Buyer for all amounts owing under this Agreement, if any, including Delay Damages.
2.3 Conditions Precedent to Storage Commercial Operation. Seller shall achieve Storage Commercial Operation upon completion, to Buyer’s reasonable satisfaction, of 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 for Storage Commercial Operation and (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I-2 setting forth the Installed Capacity on the Storage Commercial Operation Date; (b) All applicable regulatory authorizations, approvals and permits for the operation of the Storage Facility have been obtained and all conditions thereof have been satisfied and shall be in full force and effect;
(c) Seller has obtained CAISO Certification for the Storage Facility; (d) Seller has delivered the Performance Security for the Guaranteed Capacity of the Storage Facility to Buyer in accordance with Section 8.8; (e) Seller has paid Buyer for all amounts owing under this Agreement, if any, including Delay Damages; and
(f) Seller shall have achieved Interim Commercial Operation for Installed PV Capacity of not less than 100 MW, unless reduced in accordance with Section 5(a) of Exhibit B.
2.4 Additional Conditions Precedent to Full Commercial Operation. (a) Seller shall have delivered to Buyer (i) a completion certificate from a Licensed Professional Engineer substantially in the form of Exhibit H for Full Commercial Operation and (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I-1 setting forth the Installed Capacity on the Full Commercial Operation Date; (b) All applicable regulatory authorizations, approvals and permits for the operation of the Additional PV Capacity have been obtained and all conditions thereof have been satisfied and shall be in full force and effect;
(c) Seller has obtained CAISO COM COD Approval for the Additional PV Capacity;
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32 (d) Seller has received CEC Precertification of the Additional PV Capacity(and reasonably expects to receive final CEC Certification and Verification for the Full Facility in no more than one hundred eighty (180) days from the Full Commercial Operation Date); (e) 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 Additional PV Capacity, QRE service agreements, and other appropriate documentation required to effect Facility registration with WREGIS and to enable Renewable Energy Credit transfers related to the Additional PV Capacity within the WREGIS system, and shall reasonably have assisted Buyer to complete any other requirements to enable Buyer to use the Product toward fulfilling its RPS requirements; (f) Seller has delivered the Performance Security for the Guaranteed Capacity of the Additional PV Capacity to Buyer in accordance with Section 8.8; and (g) Seller has paid Buyer for all amounts owing under this Agreement, if any, including Delay Damages.
2.5 Development; Construction; Progress Reports. 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 Full 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 receipt of such request by Seller. For the avoidance of doubt, 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.
2.6 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 Interim Commercial Operation Date, Guaranteed Initial Full Commercial Operation Date, Guaranteed Full Commercial Operation Date, or the Guaranteed Storage Commercial Operation Date, as applicable; provided, that 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 Interim Commercial Operation Date, the Guaranteed Initial Full Commercial Operation Date, the Guaranteed Full Commercial Operation Date, and the Guaranteed Storage Commercial Operation Date in accordance with the Agenda Page 131
33 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.
2.7 Additional Conditions Precedent to Initial Full Commercial Operation. (a) Seller shall have delivered to Buyer (i) a completion certificate from a Licensed Professional Engineer substantially in the form of Exhibit H for Initial Full Commercial Operation and (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I-1 setting forth the Installed Capacity on the Initial Full Commercial Operation Date;
(b) All applicable regulatory authorizations, approvals and permits for the operation of the Subject 40 MW PV have been obtained and all conditions thereof have been satisfied and shall be in full force and effect;
(c) Seller has obtained CAISO COM COD Approval for the Subject 40 MW PV;
(d) Seller has received CEC Precertification of the Subject 40 MW PV (and reasonably expects to receive final CEC Certification and Verification for the Subject 40 MW PV in no more than one hundred eighty (180) days from the Initial Full Commercial Operation Date);
(e) 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 Subject 40 MW PV, QRE service agreements, and other appropriate documentation required to effect Facility registration with WREGIS and to enable Renewable Energy Credit transfers related to the Subject 40 MW PV within the WREGIS system, and shall reasonably have assisted Buyer to complete any other requirements to enable Buyer to use the Product toward fulfilling its RPS requirements;
(f) Seller has delivered the Performance Security for the Guaranteed Capacity of the Subject 40 MW PV to Buyer in accordance with Section 8.8; and (g) Seller has paid Buyer for all amounts owing under this Agreement, if any, including Delay Damages.
ARTICLE 3
PURCHASE AND SALE
3.1 Purchase and Sale of Product. Subject to the terms and conditions of this Agreement, during the Delivery Term, Buyer will purchase all the Product produced by or Agenda Page 132
34 associated with the Facility at the Contract Price and in accordance with Exhibit C, and Seller shall supply and deliver to Buyer all the Product produced by or associated with the Facility. At its sole discretion, Buyer may during the Delivery Term re-sell or use for another purpose all or a portion of the Product, provided that no such re-sale or use shall relieve Buyer of any obligations hereunder. During the Delivery Term, Buyer will have exclusive rights to offer, bid, or otherwise submit the Product, and/or any Capacity Attributes thereof, from the Facility after the Delivery Point for resale in the market, and retain and receive any and all related revenues. Subject to Buyer’s obligation to purchase Capacity Attributes and Storage Product in accordance with this Section 3.1 and Exhibit C, Buyer has no obligation to purchase from Seller any Product for which the associated Facility Energy is not or cannot be delivered to the Delivery Point as a result of an outage of the Facility, a Force Majeure Event, or a Curtailment Order.
3.2 Sale of Green Attributes. During the Delivery Term, Seller shall sell and deliver to Buyer, and Buyer shall purchase 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 Attestation and (b) support Buyer’s efforts to qualify the Green Attributes transferred by Seller as Green-e Certified.
3.3 Imbalance Energy. Buyer and Seller recognize that in any given Settlement Period the amount of Facility Energy may deviate from the amount of energy scheduled with the CAISO.
To the extent there are such deviations, any costs or revenues from such imbalances shall be solely for the account of Buyer.
3.4 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.
3.5 Future Environmental Attributes.
(a) The Parties acknowledge and agree that as of the Effective Date, environmental attributes sold under this Agreement are restricted to Green Attributes; however, Future Environmental Attributes may be created by a Governmental Authority through Laws enacted after the Effective Date. Subject to the final sentence of this Section 3.5(a), and Sections
3.5(b) and 3.12, 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 Agenda Page 133
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37 remainder of the Delivery Term the final CEC Certification and Verification for the Full Facility.
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.
3.10 Eligibility.
(a) Seller, and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement that: (i) the Project qualifies and is certified by the CEC as an Eligible Renewable Energy Resource (“ERR”) as such term is defined in Public Utilities Code Section 399.12 or Section 399.16; and (ii) the Project’s output delivered to Buyer qualifies under the requirements of the California Renewables Portfolio Standard. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. (b) “Project” as used in Section 3.10(a) means the Generating Facility and the phrase “the Project’s output” means all Facility Energy delivered at the Delivery Point, net of storage losses if required by Law (“RPS Energy”).
3.11 California Renewables Portfolio Standard. Subject to Section 3.12, Seller shall also take all other actions necessary to ensure that the Energy produced from the Generating 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.
3.12 Compliance Expenditure Cap. If a change in Laws occurring after the Effective Date has increased Seller’s cost to comply with Seller’s obligations under this Agreement with respect to obtaining, maintaining, conveying or effectuating Buyer’s use of Green Attributes and Capacity Attributes (as applicable), 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 Thousand Dollars ($25,000) per MW 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. (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 3.12 within sixty (60) days after Buyer’s receipt of same, Buyer shall be Agenda Page 136
38 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.
3.13 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 will discuss in good faith potential reconfiguration of the Facility or Interconnection Facilities, including the use of grid energy to provide Charging Energy; provided that 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 Interim 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 will be responsible for paying or satisfying when due any costs or charges imposed in connection with the delivery of Facility Energy to the Delivery Point, and 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 to 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, or only the Storage Facility, as applicable, 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 an amount equal to Seller’s share of Buyer’s cost of providing such service, which amount shall be Five Hundred Dollars ($500) per CAISO Resource ID for which Buyer submits Settlement Quality Meter Data (“Monthly SQMD Charge”). If (a) Seller elects to withdraw its SQMD Plan for the Facility, or the Storage Facility, as applicable, and as a result Buyer no longer has an obligation to submit Settlement Quality Meter Data for the Facility, or the Storage Facility, as applicable, to CAISO in accordance with Exhibit D, or (b) 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 Agenda Page 137
39 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.
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 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 Interim Facility Contract Period and (ii) the beginning of each calendar year for every subsequent Contract Year during the Delivery Term, Seller shall provide to Buyer and the SC (if applicable) a non-binding forecast of each month’s average-day expected 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 and Available Capacity. No less than thirty (30) days before the first day on which Test Energy is expected to be available from the Facility, and thereafter ten (10) Business Days before the beginning of each month during the Delivery Term, Seller shall provide to Buyer and the SC (if applicable) a non-binding forecast of the hourly expected (i) available capacity of the Generating Facility, (ii) Energy produced by the Generating Facility, (iii) available Effective Storage Capacity, and (iv) available Storage Capability (items (i) - (iv) collectively referred to as the “Forecasted Product”), for each day of the following month in a form substantially similar to Exhibits F-1, F-2, F-3 and F-4, as applicable (“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 with a non-binding forecast of the hourly expected Forecasted Product, in each case, for each hour of the immediately succeeding day (“Day-Ahead Forecast”). A Day-Ahead Forecast provided in a day prior to any non-Business Day(s) shall include non-binding forecasts for the immediate day, each succeeding non-Business Day and the next Business Day. Each Day-Ahead Forecast shall clearly identify, for each hour, Seller’s best estimate of the hourly expected Forecasted Product. Such Day-Ahead Forecasts shall Agenda Page 138
40 be sent to Buyer’s on-duty Scheduling Coordinator. 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 Forecasts. During the Delivery Term, Seller shall notify Buyer of any changes from the Day-Ahead Forecast of one (1) MW or more in the hourly expected Forecasted Product (“Real-Time Forecast”) that directly result from a Forced Facility Outage or Force Majeure, 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 at least one (1) MW 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 Energy produced by the Generating Facility 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 4.3(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 on-duty Scheduling Coordinator of Forced Facility Outages and Seller shall keep Buyer 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 outage. (f) Forecasting Penalties. In the event Seller does not in a given hour provide the forecast required in Section 4.3(d) and Buyer incurs a loss or penalty resulting from its scheduling activities with respect to Facility Energy during such hour, due to Seller’s failure to provide such forecast, 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 Energy produced by the Generating Facility for such hour (which, for the avoidance of doubt, assumes no Charging Energy or Discharging Energy in such hour) set forth in the Day-Ahead Forecast, and (ii) the actual Energy produced by the Generating Facility (absent any Charging Energy and Discharging 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 will comply with all applicable obligations for Variable Energy Resources under the CAISO Tariff and the Eligible Intermittent Resource Protocol, including providing appropriate operational data and meteorological data, and will fully cooperate with Buyer, Buyer’s SC, and CAISO, in providing all data, information, and authorizations required thereunder.
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41 4.4 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, Buyer Curtailment Order, or notice received from CAISO in respect of a Buyer Bid Curtailment; provided, Seller is not required to reduce such amount to the extent it is inconsistent with the limitations of the Facility set out in the Operating Restrictions.
(b) Buyer Curtailment. Buyer shall have the right to order Seller to curtail deliveries of Facility Energy through Buyer Curtailment Orders, provided that Buyer shall pay Seller for all Deemed Delivered Energy associated with a Buyer Curtailment Period: (1) at the Renewable Rate with respect to the Interim Facility; and (2) at the Renewable Rate plus the PTC Rate with respect to the Subject 40 MW PV and the Additional PV Capacity (together, the “Additional Facility”).
(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 contradiction to 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 and, (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 Curtailment 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 and follow instructions, including an electronic signal conveying real time and intra-day instructions, to operate the Facility as directed by the Buyer 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 then-current methodology used to transmit such instructions as it may change from time to time. If at any time during the Delivery Term Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with then-current methodologies, Seller shall take the steps necessary to become compliant as soon as commercially reasonably possible. Seller shall be liable pursuant to Section
4.4(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 then-current methodologies. For the avoidance of doubt, 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.
4.5 Energy Management.
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42 (a) Upon receipt of a valid Charging Notice, Seller shall take any and all action necessary to deliver the Charging Energy to the Storage Facility in order to deliver the Storage Product in accordance with the terms of this Agreement, including maintenance, repair or replacement of equipment in Seller’s possession or control used to deliver the Charging Energy from the Generating Facility to the Storage Facility.
(b) Buyer will have the right to charge the Storage Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Charging Notices to Seller electronically; provided, Buyer’s right to issue Charging Notices is subject to the requirements and limitations set forth in this Agreement, including the Operating Restrictions and the provisions of Section 4.5(a). Each Charging Notice issued in accordance with this Agreement will be effective unless and until Buyer’s SC or the CAISO modifies such Charging Notice by providing the Facility with an updated Charging Notice. (c) Seller shall not charge the Storage Facility during the Delivery Term other than pursuant to a valid Charging Notice, or in connection with a Storage Capacity Test, or pursuant to a notice from CAISO, the Transmission Provider, or any other Governmental Authority. If, during the Contract Term, Seller (a) charges the Storage Facility to a Stored Energy Level greater than the Stored Energy Level provided for in the Charging Notice, (b) charges the Storage Facility in violation of the first sentence of this Section 4.5(c), or (c) charges the Storage Facility in connection with maintenance of the Storage Facility or to achieve any Operating Restrictions (which charging shall not be a violation of the first sentence of this Section 4.5(c)), then (x) Seller shall be responsible for all energy costs associated with such charging of the Storage Facility, (y) Buyer shall not be required to pay for the charging of such energy (i.e., Charging Energy), and (z) Buyer shall be entitled to discharge such energy and entitled to all of the benefits (including Storage Product) associated with such discharge. (d) Seller shall not discharge the Storage Facility during the Delivery Term other than pursuant to a valid Discharging Notice, or in connection with a Storage Capacity Test, or pursuant to a notice from CAISO, the Transmission Provider, or any other Governmental Authority. Buyer will have the right to discharge the Storage Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Discharging Notices to Seller electronically, and subject to the requirements and limitations set forth in this Agreement, including the Operating Restrictions. Each Discharging Notice issued in accordance with this Agreement will be effective unless and until Buyer’s SC or the CAISO modifies such Discharging Notice by providing the Facility with an updated Discharging Notice. (e) Notwithstanding anything in this Agreement to the contrary, during any Settlement Interval, Curtailment Orders, Buyer Curtailment Orders, and Buyer Bid Curtailments applicable to such Settlement Interval shall have priority over any Charging Notices or Discharging Notices applicable to such Settlement Interval, and Seller shall have no liability for violation of this Section 4.5 or any Charging Notice or Discharging Notice if and to the extent such violation is caused by Seller’s compliance with any Curtailment Order, Buyer Curtailment Order, Buyer Bid Curtailment or other instruction or direction from a Governmental Authority or the Transmission Provider. Buyer shall have the right, but not the obligation, to provide Seller with updated Charging Notices and Discharging Notices during any Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order consistent with the Operating Restrictions.
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43 (f) If Seller or any third party charges, discharges or otherwise uses the Storage Facility other than as permitted hereunder, it shall be a breach by Seller and Seller shall hold Buyer harmless from and indemnify Buyer against all actual costs or losses associated therewith, and be responsible to Buyer for any damages arising therefrom and, if Seller fails to implement procedures reasonably acceptable to Buyer to prevent any further occurrences of the same, then it shall be an Event of Default under Article 11.
(g) CAISO Dispatches. During the Delivery Term, CAISO Dispatches shall have priority over any Charging Notice or Discharging Notice issued by Buyer’s SC, and Seller shall have no liability for violation of this Section 4.5 or any Charging Notices or Discharging Notice if and to the extent such violation is caused by Seller’s compliance with any CAISO Dispatch. During any time interval during the Delivery Term in which the Storage Facility is capable of responding to a CAISO Dispatch, but the Storage Facility deviates from a CAISO Dispatch, Seller shall be responsible for all CAISO charges and penalties resulting from such deviation. To the extent the Storage Facility is unable to respond to ADS signals during any Calculation Interval, then as an exclusive remedy, such Calculation Interval shall be deemed an Unavailable Calculation Interval for purposes of calculating the YTD Annual Capacity Availability.
4.6 Reduction in Energy Delivery Obligation. For the avoidance of doubt, and in no way limiting Section 3.1 or Exhibit G:
(a) Facility Maintenance. Seller will provide to Buyer written schedules for Planned Outages for the Interim Facility Contract Period and for each Contract Year no later than thirty (30) days prior to the first day of the Interim Facility Contract Period and applicable Contract Year. Buyer may provide comments no later than ten (10) days after receiving any such schedule, and Seller will in good faith take into account any such comments. Seller will 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 change any Planned Outages within the current Contract Year if such changes are required to comply with Prudent Operating Practices, or by providing at least sixty (60) days’ notice, in both cases subject to consent by Buyer not to be unreasonably withheld, conditioned or delayed. Seller shall be permitted to reduce deliveries of Product during any period of such Planned Outages. Notwithstanding anything in this Agreement to the contrary, no 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.
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44 (d) Force Majeure Event. 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.
Notwithstanding anything in this Section 4.6 to the contrary, any such reductions in Product deliveries shall not excuse (i) the Storage Facility’s unavailability for purposes of calculating the Annual Storage Capacity Availability, or (ii) in the case of Sections 4.6(a), (b) and (e), Seller’s obligation to deliver Capacity Attributes.
4.7 Guaranteed Energy Production.
(a) During the Delivery Term, Seller shall deliver to Buyer an amount of Adjusted Facility Energy equal to no less than (i) the Interim Guaranteed Energy Production (as defined below) in the Interim Performance Measurement Period and (ii) the Guaranteed Energy Production in each Performance Measurement Period.
(b) Seller shall be excused from achieving the Interim Guaranteed Energy Production during the Interim Performance Measurement Period and the Guaranteed Energy Production during any Performance Measurement Period only to the extent of any Force Majeure Events, System Emergency, Transmission System Outage, Buyer Default or other Buyer failure to perform that directly prevents Seller from being able to deliver Facility Energy to the Delivery Point, and Curtailment Periods or Buyer Curtailment Periods. For purposes of determining whether Seller has achieved the Interim Guaranteed Energy Production or the Guaranteed Energy Production, as applicable, Seller shall be deemed to have delivered to Buyer the Product in the amount equal to the sum of: (1) any Deemed Delivered Energy plus (2) 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”) plus (3) the amount of undelivered Energy during such Interim Performance Measurement Period or Performance Measurement Period, as applicable, with respect to which Seller has already (A) paid liquidated damages or (B) provided Replacement Product in accordance with this Section 4.7(b) and Exhibit G. If Seller fails to achieve the (i) Interim Guaranteed Energy Production during the Interim Performance Measurement Period or (ii) the Guaranteed Energy Production amount in any Performance Measurement Period, Seller shall pay Buyer damages calculated in accordance with Exhibit G; provided that 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 Interim Guaranteed Energy Production or 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. (c) “Interim Guaranteed Energy Production” means an amount of Adjusted Facility Energy, as measured in MWh, equal to seventy (70%) of the total aggregate amount of Expected Energy for the Interim Facility Contract Period as such Expected Energy is shown on the Cover Sheet. The amount may be adjusted, upward or downward, to the extent that the Interim Agenda Page 143
45 Facility Contract Period includes a partial month. For example, if the Interim Facility Contract Period begins on January 1, 2022 and ends on September 15, 2022, the Interim Guaranteed Energy Production shall be the sum of the Expected Energy for January through August, and 15/30ths of the Expected Energy for September.
(d) “Guaranteed Energy Production” means an amount of Adjusted Facility Energy, as measured in MWh, equal to one hundred sixty percent (160%) of the average annual Expected Energy for the Performance Measurement Period.
4.8 Storage Facility Availability; Ancillary Services.
(a) During the Delivery Term, the Storage Facility shall maintain an Annual Storage Capacity Availability during each Contract Year of no less than percent ( ) (the “Guaranteed Storage Availability”), which Annual Storage Capacity Availability shall be calculated in accordance with Exhibit P.
(b) During the Delivery Term, the Storage Facility shall maintain an Efficiency Rate of no less than Guaranteed Efficiency Rate. Buyer’s sole remedy for an Efficiency Rate that is less than the Guaranteed Efficiency Rate is established in the definitions of the Storage Facility Loss Factor and Adjusted Facility Energy as applied in Section (a) of Exhibit C. (c) Buyer’s remedies for Seller’s failure to achieve the Guaranteed Storage Availability are (i) the adjustment of Seller’s payment for the Product by application of the Capacity Availability Factor (as set forth in Exhibit C), and (ii) in the case of a Seller Event of Default as set forth in Section 11.1(b)(iii), the applicable remedies set forth in Article 11. (d) Seller shall operate and maintain the Storage Facility throughout the Contract Term so as to be able to provide the Ancillary Services in accordance with the specifications set forth in the Operating Restrictions and the Storage Facility’s CAISO Certification associated with the Installed Storage Capacity. To the extent the Storage Facility is unable to provide Ancillary Services for any reason not excused hereunder during any Calculation Interval that is not otherwise deemed an Unavailable Calculation Interval, then as exclusive remedies, the Storage Capability for such Calculation Interval shall be deemed reduced for purposes of calculating the YTD Annual Capacity Availability to the extent of such inability or failure multiplied by fifty percent (50%).
4.9 Storage Facility Testing.
(a) Storage Capacity Tests. Prior to the Storage Commercial Operation Date, Seller shall schedule and complete a Commercial Operation Storage Capacity Test in accordance with Exhibit O. Thereafter, Seller and Buyer shall have the right to run additional Storage Capacity Tests in accordance with Exhibit O.
(i) Buyer shall have the right to send one or more representative(s) to witness all Storage Capacity Tests.
(ii) Following each Storage Capacity Test, Seller shall submit a testing report in accordance with Exhibit O. If the actual capacity or efficiency determined pursuant to a Agenda Page 144
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47 Buyer, its authorized agents, employees, and inspectors, during any such access. (iii) Except as set forth in Sections 4.9(d)(i) and (ii), all other costs of any testing of the Storage Facility shall be borne by Seller.
4.10 WREGIS. Seller shall, at its sole expense, but subject to Section 3.12, take all actions and execute all documents or instruments necessary to ensure that all WREGIS Certificates associated with all Renewable Energy Credits corresponding to all Facility Energy are issued and tracked for purposes of satisfying the requirements of the California Renewables Portfolio Standard and transferred in a timely manner to Buyer for Buyer’s sole benefit. Seller shall transfer the Renewable Energy Credits to Buyer. Seller shall comply with all Laws, including the WREGIS Operating Rules, regarding the certification and transfer of such WREGIS Certificates to Buyer and Buyer shall be given sole title to all such WREGIS Certificates. Seller shall be deemed to have satisfied the warranty in Section 4.10(g), provided that Seller fulfills its obligations under Sections
4.10(a) through (g) below. In addition:
(a) Prior to the Interim Commercial Operation Date, Seller shall register the Interim 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.
(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 4.10. 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 Agenda Page 146
48 WREGIS Certificate Deficit is caused by, or the result of any action or inaction of, Seller, then the amount of Adjusted Facility Energy in the Deficient Month shall be reduced by three times the amount of the WREGIS Certificate Deficit for purposes of calculating Buyer’s payment to Seller under Article 8, the Interim Guaranteed Energy Production for the Interim Facility Contract Period and the Guaranteed Energy Production for the applicable Contract Year; provided, however, that 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 4.10, 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 4.10 after the Effective Date, the Parties promptly shall modify this Section 4.10 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 the Western Renewable Energy Generation Information System will be taken prior to the first delivery under the contract. (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 California Public Utilities Commission Decision 08-08-028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law.
4.11 Financial Statements. If requested by Buyer, and not publicly available on Ultimate Parent’s website, Seller shall deliver within one hundred twenty (120) days following the end of each fiscal year of Ultimate Parent: (i) a copy of Ultimate Parent’s annual report or 10K report, and (ii) within sixty (60) days after the end of each of its first three fiscal quarters of each fiscal year, a copy of such Ultimate Parent’s quarterly report containing unaudited consolidated financial statements for such fiscal quarter, in each case unless otherwise publicly available. If any such statements shall not be available on a timely basis due to a delay in preparation or certification, such delay shall not be an Event of Default so long as Seller diligently pursues the preparation, certification and delivery of the statements.
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49 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. If Buyer does not provide such documentation, then Buyer shall indemnify, defend, and hold Seller harmless from any liability with respect to Taxes from which Buyer claims it is exempt.
5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, however, that neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefor from the other Party. All Product delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Product.
ARTICLE 6
MAINTENANCE OF THE FACILITY
6.1 Maintenance of the Facility. Seller shall comply with Law and Prudent 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.
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 that such agreements (i) shall Agenda Page 148
50 permit Seller to perform or satisfy, and shall not purport to limit, its obligations hereunder and (ii) provide for separate metering of the Facility.
ARTICLE 7
METERING
7.1 Metering. Seller shall measure the amount of Facility Energy using the Facility Meter. Seller shall have separate CAISO Approved Meters and CAISO Resource IDs for each of the Interim Facility, Additional Facility and Storage Facility. Seller shall measure the Charging Energy and the Discharging Energy using the Storage Facility Meters. Seller shall separately meter all Station Use. All CAISO Approved Meters will be operated pursuant to applicable CAISO-approved calculation methodologies and maintained as Seller’s cost. If Seller elects to submit a SQMD Plan for the Facility, or only the Storage Facility, as applicable, then all Facility Meters, or all Storage Facility Meters, as applicable, will be programmed, operated and maintained pursuant to the applicable CAISO-approved SQMD Plan for the Facility, or only the Storage Facility, as applicable, at Seller’s sole cost, throughout the period to which the SQMD Plan applies.
Seller shall promptly provide to Buyer a copy of any CAISO-approved SQMD Plan and any modifications thereto and notice of any termination or withdrawal thereof. Subject to meeting any applicable CAISO requirements, the meters shall be programmed to adjust for all losses from such meter to the Delivery Point in a manner subject to Buyer’s prior written approval, not to be unreasonably withheld. Metering will be consistent with the Metering Diagram set forth as Exhibit R, as may be revised to be consistent with any CAISO-approved SQMD Plan. 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, to the extent such meter data and related meters are not the subject of a CAISO approved SQMD Plan for the Facility, or only the Storage Facility, as applicable. 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) web and/or directly from the CAISO meter(s) at the Facility, to the extent such meter data and related meters are not the subject of a CAISO-approved SQMD Plan for the Facility, or only the Storage Facility, as applicable.
7.2 Meter Verification. Annually, if Seller has reason to believe there may be a meter malfunction, or upon Buyer’s reasonable request, Seller shall test the meter. The tests shall be conducted by independent third parties qualified to conduct such tests. Buyer shall be notified seven (7) days in advance of such tests and have a right to be present during such tests. If a meter is inaccurate it shall be promptly repaired or replaced. If a meter is inaccurate 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.
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51 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 (i) 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 PV Energy as read by the Facility Meter, the amount of Charging Energy charged by the Storage Facility and the amount of Discharging Energy delivered from the Storage Facility, in each case, as read by the Storage Facility Meter, the amount of Replacement RA and Replacement Product delivered to Buyer (if any), the calculation of Adjusted Facility Energy, Deemed Delivered Energy and Adjusted Energy Production, and the Contract Price (and the PTC Rate for Deemed Delivered Energy with respect to the Subject 40 MW and the Additional PV Capacity) applicable to such Product in accordance with Exhibit C, and (ii) data showing a calculation of the Capacity Payment and other relevant data for the prior 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. Buyer shall, and shall cause its Scheduling Coordinator to, provide Seller with all reasonable access (including, in real time, to the maximum extent reasonably possible) to any records, including invoices or settlement data from the CAISO, forecast data and other information, all as may be necessary from time to time for Seller to prepare and verify the accuracy of all invoices. 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.
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52 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. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.2, accruing from the date on which the adjusted amount should have been due.
8.5 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned via adjustments in accordance with Section 8.4. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.5 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.
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 P, 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; provided, Seller shall deliver the Development Security pertaining to the Additional PV Capacity in the amount of $5,580,000 within thirty (30) days after the Execution Date. Seller shall maintain the Development Security in full force and effect. Upon Seller’s delivery of the Performance Security for Interim Commercial Operation, Buyer shall return the Guaranteed Capacity portion of the Development Security for Interim Commercial Operation to Seller, less the amounts drawn in accordance with this Agreement. Upon Seller’s delivery of the Performance Security for Storage Commercial Operation, Buyer shall return the Guaranteed Capacity portion of the Development Security for Storage Commercial Operation to Seller, less the amounts drawn Agenda Page 151
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57 (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 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 describing the particulars of the occurrence in substantially the form set forth in Exhibit W, and (b) notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party; provided, however, that a Party’s failure to give timely Notice shall not affect such Party’s ability to assert that a Force Majeure Event has occurred unless the delay in giving Notice materially prejudices the other Party.
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 one hundred eighty Agenda Page 156
58 (180) days for the Guaranteed Interim Commercial Operation Date, sixty (60) days for the Guaranteed Storage Commercial Operation Date, sixty (60) days for the Guaranteed Initial Full Commercial Operation Date, or sixty (60) days for the Guaranteed Full Commercial Operation Date, and Seller has demonstrated to Buyer’s reasonable satisfaction that the delays described above 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 Full Commercial Operation Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then either Party may terminate this Agreement upon written Notice to the other Party with respect to the Facility experiencing the Force Majeure Event; provided that, in the case of Seller as the Party electing to terminate this Agreement, for a period of two (2) years from the date of the termination of this Agreement, Seller shall not, and shall cause its Affiliates and any successors or assign to not, following such termination directly or indirectly enter into any agreement or consummate any transaction relating to the sale of Facility Energy with any Person other than Buyer (a “Third Party Transaction”) except in compliance with the terms and conditions of Section 10.5. 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 this Section 10.4, and Buyer shall promptly return to Seller any Development Security or Performance Security then held by Buyer, less any amounts drawn in accordance with this Agreement.
10.5 Right of First Refusal.
(a) Following a termination by Seller under Section 10.4, if Seller receives a bona fide written offer for a Third Party Transaction that Seller desires to accept (each, a “Third Party Offer”), Seller shall immediately notify Buyer in writing (the “Offer Notice”) of, subject to any confidentiality obligations that may apply to Seller, the identity of all proposed parties to such Third Party Transaction and the material financial and other terms and conditions of such Third Party Offer (the “Material Terms”). Each Offer Notice shall constitute an offer by Seller to enter into an agreement with Buyer on the same Material Terms of such Third Party Offer (the “ROFR Offer”).
(b) At any time prior to the expiration of the forty-five (45) day period following Buyer's receipt of the Offer Notice (the “Exercise Period”), Buyer may accept the ROFR Offer by delivery to Seller of a letter of intent containing the Material Terms and any standard and customary conditions applicable to a transaction of this nature, executed by Buyer; provided, however, that Buyer is not required to accept any non-financial terms or conditions contained in any Material Terms that cannot be fulfilled by Buyer as readily as by any other Person (e.g., an agreement conditioned upon the services of a particular individual or the supply of goods or services exclusively under the control of such third party offeror).
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59 (c) If, by the expiration of the Exercise Period, Buyer has not accepted the ROFR Offer, and provided that Seller has complied with all of the provisions of this Section
10.5, at any time following the expiration of the Exercise Period, Seller may consummate the Third Party Transaction with the counterparty identified in the applicable Offer Notice, on Material Terms that are the same or more favorable to Seller as the Material Terms set forth in the Offer Notice. If such Third Party Transaction is not consummated, the terms and conditions of this Section 10.5 will again apply and Seller shall not enter into any Third Party Transaction without affording Buyer the right of first refusal on the terms and conditions of this Section 10.5.
ARTICLE 11
DEFAULTS; REMEDIES; TERMINATION
11.1 Events of Default. An “Event of Default” shall mean, (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) days period despite exercising commercially reasonable efforts); (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default set forth in this Section 11.1; and except for (A) failure to provide Capacity Attributes, the exclusive remedies for which are set forth in Section 3.8, (B) 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; (C) failures related to the Annual Storage Capacity Availability that do not trigger the provisions of Section 11.1(b)(iv), the exclusive remedies for which are set forth in Section 4.8) and such failure is not remedied within thirty (30) days after Notice thereof (or such longer additional period, not to exceed an additional ninety (90) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) days period despite exercising commercially reasonable efforts); and (D) failures related to the timely provision of Settlement Quality Meter Data consistent with the SQMD Plan, the exclusive remedies for which are set forth in the last sentence of Exhibit D, Section (ix); (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; or (vi) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such Agenda Page 158
60 consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party; (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
(i) if at any time, Seller delivers or attempts to deliver electric energy to the Delivery Point for sale under this Agreement that was not generated or discharged by the Facility, except for Replacement Product;
(ii) the failure by Seller to achieve (A) Interim Commercial Operation on or before the Guaranteed Interim Commercial Operation Date, (B) Storage Commercial Operation on or before the Guaranteed Storage Commercial Operation Date, (C) Initial Full Commercial Operation on or before the Guaranteed Initial Full Commercial Operation Date, or (D) Full Commercial Operation on or before the Guaranteed Full Commercial Operation Date, except as each 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, 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; (iv) if, in any Contract Year, the Annual Storage Capacity Availability multiplied by the Effective Storage Capacity of the applicable period is not at least seventy percent (70%) multiplied by the Installed Storage Capacity, 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 such seventy percent (70%) multiplied by the Installed Storage Capacity 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 (“Storage Cure Plan”) and (y) complete such Storage Cure Plan in all material respects as set forth therein, including within the timeframe set forth therein;
(v) 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; Agenda Page 159
61 (vi) with respect to any Guaranty provided for the benefit of Buyer, the failure by Seller to provide for the benefit of Buyer either (1) cash or (2) a replacement Letter of Credit from an 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) if any representation or warranty made by the Guarantor in connection with this Agreement 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; (B) the failure of the Guarantor to make any payment required or to perform any other material covenant or obligation in any Guaranty; (C) the Guarantor becomes Bankrupt;
(D) the Guarantor shall fail to meet the criteria for an acceptable Guarantor as set forth in the definition of Guarantor;
(E) the failure of the Guaranty to be in full force and effect (other than in accordance with its terms) prior to the indefeasible satisfaction of all obligations of Seller hereunder; or
(F) the Guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of any Guaranty; (vii) 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 Fitch or A3 by Moody’s, provided that if ratings by S&P, Moody’s and Fitch are not equivalent, the lowest rating shall apply;
(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; Agenda Page 160
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64 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, 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 prior to the Full 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 other than Buyer for a period of two (2) years following such Early Termination Date, unless prior to selling, marketing or delivering such Product, or entering into the agreement to sell, market or deliver such Product to a party other than Buyer, Seller or Seller’s Affiliates provide Buyer with a written offer to sell the Product on terms and conditions materially similar to the terms and conditions contained in this Agreement (including price) and Buyer fails to accept such offer within forty-five (45) days of Buyer’s receipt thereof.
Seller shall indemnify and hold Buyer harmless from all benefits lost and other damages sustained by Buyer as a result of any breach by Seller of its covenants contained within this Section 11.6.
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65 11.8 Rights And Remedies Are Cumulative. Except where liquidated damages are provided as the exclusive remedy, the rights and remedies of a Party pursuant to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
11.9 Mitigation. Any Non-Defaulting Party shall be obligated to use commercially reasonable efforts to mitigate its Costs, Losses and damages resulting from any Event of Default of the other Party under this Agreement.
ARTICLE 12
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.
12.1 No Consequential Damages. EXCEPT TO THE EXTENT PART OF (A) AN
EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, (B) AN IP INDEMNITY CLAIM, (C) AN ARTICLE 16 INDEMNITY CLAIM, (D) INCLUDED IN A LIQUIDATED DAMAGES CALCULATION, OR (E) RESULTING FROM A PARTY’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT, NEITHER PARTY SHALL BE LIABLE TO
THE OTHER OR ITS INDEMNIFIED PERSONS FOR ANY SPECIAL, PUNITIVE,
EXEMPLARY, INDIRECT, OR CONSEQUENTIAL DAMAGES, OR LOSSES OR
DAMAGES FOR LOST REVENUE OR LOST PROFITS, WHETHER FORESEEABLE OR
NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT, BY STATUTE, IN TORT OR CONTRACT.
12.2 Waiver and Exclusion of Other Damages. EXCEPT AS EXPRESSLY SET
FORTH HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND
MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF LIABILITY CONTAINED IN
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF
CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.
FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE
REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR
MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.
IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY. 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 Agenda Page 164
66 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 3.8, 4.7, 4.8, 11.2 AND 11.3, AND AS
PROVIDED IN EXHIBIT B, EXHIBIT G, AND EXHIBIT P, THE PARTIES ACKNOWLEDGE
THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT
OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT, AND THAT
THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. IT IS THE INTENT OF THE PARTIES THAT THE
LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES
BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING
THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.
THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES AND THE
EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE REMEDY FOR THE
BREACH BY THE OTHER OF THE TERMS OF THIS AGREEMENT, AND EACH PARTY
WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE WITH RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.
ARTICLE 13
REPRESENTATIONS AND WARRANTIES; AUTHORITY
13.1 Seller’s Representations and Warranties. As of the Effective Date, Seller represents and warrants as follows:
(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 Agenda Page 165
67 of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) The Facility is located in the State of California.
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 Agenda Page 166
68 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.
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 shall remain compliant with such agreement in accordance with the terms thereof.
13.5 Community Benefits Funding. Seller shall, on or before October 6, 2022, pay to Buyer five hundred thousand dollars ($500,000) for Buyer to use for community benefits as determined by Buyer in its sole discretion, which payment Seller timely made.
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, however, that 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 Agenda Page 167
69 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 work with Seller and Lender to agree upon a consent to collateral assignment of this Agreement in substantially the form attached as Exhibit S (“Collateral Assignment Agreement”).
14.3 Permitted Assignment by Seller.
(a) 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. (b) Notwithstanding anything to the contrary in Sections 14.1 and 14.3(a), Seller may, without the prior written consent of Buyer, transfer or assign this Agreement to (1) NextEra Energy Operating Partners, LP or (2) NextEra Energy Partners, LP; if, and only if:
(i) (x) A wholly-owned indirect subsidiary of Ultimate Parent or NextEra Energy Resources, LLC or a Permitted Transferee under clause (ii) of the definition continues to operate the Facility and (y) there is no material adverse effect on the ability of Seller’s Guarantor to perform under the Performance Security;
(ii) Seller has given Buyer Notice at least fifteen (15) Business Days before the date of such proposed transfer or assignment; and (iii) Seller has provided Buyer a written agreement signed by the Person to which Seller wishes to transfer or 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 by Buyer.
Agenda Page 168
Agenda Page 169
71 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) 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 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, however, that 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 Agenda Page 170
72 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 that 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. 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 Ten Million Dollars ($10,000,000) per occurrence, and an annual aggregate of not less than Ten Million Dollars ($10,000,000), 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 or excess insurance policy in a minimum limit of liability of Ten Million Dollars ($10,000,000). 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. (b) Employer’s Liability Insurance. Employers’ Liability insurance shall not be 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. Seller, if it has employees, shall also maintain at all times during the Contract Term workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of Law. (d) Business Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with a combined single limit 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) Builder’s All-Risk Insurance. Seller shall maintain or cause to be maintained during the construction of the Interim Facility and the Full Facility prior to the Full Commercial Operation Date, builder’s all-risk insurance covering the Facility during such construction periods.
Agenda Page 171
73 (f) Subcontractor Insurance. Seller shall require all of its subcontractors to carry: (i) commercial 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 include 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. Within ten (10) days after execution of the Agreement and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such coverage. 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. (h) Failure to Comply with Insurance Requirements. If Seller fails to comply with any of the provisions of this Article 17, Seller, among other things and without restricting Buyer’s remedies under the Law or otherwise, shall, at its own cost and expense, act as an insurer and self-insure in accordance with the terms and conditions above. With respect to the required general liability, umbrella or excess liability and business 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 and Seller shall face the same liability and damages as an insurer for wrongfully refusing or withholding coverage in accordance with the laws of California.
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.
Agenda Page 172
74 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 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 will as soon as practical notify Seller in writing via email that such request has been made. Seller will 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. Except as provided in Section 18.2, 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 Agenda Page 173
75 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 (including the Prior PPA), which are of no further force or effect, except for that certain Letter Agreement between the Parties dated as of November __, 2022, which remains in full force and effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. The headings used herein are for convenience and reference purposes only. In the event of a conflict between the provisions of this Agreement and those of the Cover Sheet or any Exhibit, the provisions of first the Cover Sheet, and then this Agreement shall prevail, and such Exhibit shall be corrected accordingly. This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof.
19.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, that, for the avoidance of doubt, this Agreement may not be amended by electronic mail communications.
19.3 No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) and/or, to the extent set forth herein, any Lender and/or Indemnified Party.
Agenda Page 174
76 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.
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, and, if delivery is made by electronic format, the executing Party shall promptly deliver, via overnight delivery, a complete original counterpart that it has executed to the other Party, but this Agreement shall be binding on and enforceable against the executing Party whether or not it delivers such original counterpart.
19.9 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
19.10 No Recourse to Members of Buyer. Buyer is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or 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 Agenda Page 175
77 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.
[Signatures on following page]
Agenda Page 176
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
ARLINGTON ENERGY CENTER II, LLC, a
Delaware limited liability company
By:
Name:
Title:
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA, a California
joint powers authority
By:
Name:
Title:
Agenda Page 177
Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Site Name: Arlington Energy Center II
Site includes all or some of the following APNs: 812-130-009, 812-130-012, 812-120-002, County: Riverside, CA
Zip Code: 92225
Latitude and Longitude: 33.6552; -114.7503
Facility Description: A solar photovoltaic electric generating facility with a net nameplate capacity of 233 MW AC coupled with a lithium ion (Li-Ion) battery storage facility with a net nameplate capacity of 132 MW AC / 528 MWh located near the City of Blythe within unincorporated Riverside County, California. Seller may install additional inverter capacity to account for production and delivery losses.
Site Diagram
Agenda Page 178
2 Delivery Point: PNode
Facility Meter: See Exhibit R
Storage Facility Meter Locations: See Exhibit R
P-node: To be established prior to the Interim Commercial Operation Date at the Colorado River Substation 220kV bus. Seller shall promptly notify Buyer following the establishment of the PNode.
Participating Transmission Owner: Southern California Edison Additional Information: None
Agenda Page 179
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 primary contractors and ordered all major 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 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. If Construction Start is not achieved by the Guaranteed Construction Start Date, Seller may extend the Guaranteed Construction Start Date by paying Daily Delay Damages to Buyer for each day for which Construction Start has not begun after 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 tenth (10th) day of each month, Buyer shall invoice Seller for Daily Delay Damages, if any, accrued during the prior month and, within ten (10) Business Days following Seller’s receipt of such invoice, Seller shall pay Buyer the amount of the Daily Delay Damages set forth in such invoice. If Seller achieves Interim Commercial Operation on or before the Guaranteed Interim 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 applicable to the Interim Facility prior to such date. If Seller achieves Storage Commercial Operation on or before the Guaranteed Storage 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 applicable to the Interim Facility prior to such date. If Seller achieves Full Commercial Operation on or before the Guaranteed Full 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.
Agenda Page 180
Agenda Page 181
Exhibit B - 3
c. “Initial Full Commercial Operation” means the condition existing when Seller has fulfilled all of the conditions precedent in Section 2.7 of the Agreement and provided Notice to Buyer substantially in the form of Exhibit H (the “Initial Full COD Certificate”), and the date Initial Full Commercial Operation occurs, the “Initial Full Commercial Operation Date”.
i. Seller shall cause the Initial Full Commercial Operation for the Facility to occur by the Expected Initial Full Commercial Operation Date (as such date may be extended by the Development Cure Period (defined below), the “Guaranteed Initial Full Commercial Operation Date”). Seller shall notify Buyer that it intends to achieve Initial Full Commercial Operation at least sixty (60) days before the anticipated Initial Full Commercial Operation Date.
ii. If Seller does not achieve Initial Full Commercial Operation by the Guaranteed Initial Full Commercial Operation Date, Seller may extend the Guaranteed Initial Full Commercial Operation Date by paying Commercial Operation Delay Damages to Buyer for each day after the Guaranteed Initial Full Commercial Operation Date until the Initial Full Commercial Operation Date, not to exceed a total of sixty (60) days of extensions by such payment of Initial Full Commercial Operation Delay Damages. On or before the tenth (10th) day of each month, Buyer shall invoice Seller for Commercial Operation Delay Damages, if any, accrued during the prior month.
d. “Full Commercial Operation” means the condition existing when Seller has fulfilled all of the conditions precedent in Section 2.4 of the Agreement and provided Notice to Buyer substantially in the form of Exhibit H (the “Full COD Certificate”), and the date Full Commercial Operation occurs, the “Full Commercial Operation Date”.
i. Seller shall cause the Full Commercial Operation for the Facility to occur by the Expected Full Commercial Operation Date (as such date may be extended by the Development Cure Period (defined below), the “Guaranteed Full Commercial Operation Date”). Seller shall notify Buyer that it intends to achieve Full Commercial Operation at least sixty (60) days before the anticipated Full Commercial Operation Date. ii. If Seller does not achieve Full Commercial Operation by the Guaranteed Full Commercial Operation Date, Seller may extend the Guaranteed Full Commercial Operation Date by paying Commercial Operation Delay Damages to Buyer for each day after the Guaranteed Full Commercial Operation Date until the Full Commercial Operation Date, not to exceed a total of sixty (60) days of extensions by such payment of Full Commercial Operation Delay Damages. On or before the tenth (10th) day of each month, Buyer shall invoice Seller for Commercial Operation Delay Damages, if any, accrued during the prior month.
Agenda Page 182
Agenda Page 183
Exhibit B - 5
d. Buyer has not made all necessary arrangements to receive the Facility Energy at the Delivery Point by the Guaranteed Interim Commercial Operation Date, the Guaranteed Storage Commercial Operation Date, the Guaranteed Initial Full Commercial Operation Date, or the Guaranteed Full Commercial Operation Date, as applicable.
Notwithstanding anything in this Agreement to the contrary, the cumulative extensions granted under the Development Cure Period (other than the extensions granted pursuant to clause 4(d) above) shall not exceed sixty (60) days for the Guaranteed Storage Commercial Operation Date, sixty (60) days for the Initial Full Commercial Operation Date, or sixty (60) days for the Guaranteed Full Commercial Operation Date, for any reason, including a Force Majeure Event.
The cumulative extensions granted to the Guaranteed Storage 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 one hundred fifty (150) days for the Guaranteed Storage Commercial Operation Date, one hundred fifty (150) days for the Guaranteed Initial Full Commercial Operation Date, or one hundred fifty (150) days for the Guaranteed Full Commercial Operation Date regardless of reason. 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.
As of the Second Amendment Effective Date, all of the GFCOD Development Cure Period Claims were resolved by Second Amendment. Seller acknowledges and agrees that no additional day-for-day extensions of the GFCOD will be granted with respect to any GFCOD Development Cure Period Claims identified in Exhibit V occurring prior to the Second Amendment Effective Date.
As of the Second Amendment Effective Date, neither Seller nor any of its Affiliates were aware of any past or existing facts or circumstances that were reasonably likely to be a basis for any additional claims of Development Cure Period extensions to the GFCOD, other than as expressly excluded in Exhibit V.
5. Failure to Reach Guaranteed Interim/Initial Full/Full PV Capacity or Guaranteed Storage Capacity.
a. Guaranteed Interim/Full PV Capacity. If, at Interim Commercial Operation, Initial Full Commercial Operation, or Full Commercial Operation, as applicable, the Installed PV Capacity is less than one hundred percent (100%) of the Guaranteed Interim PV Capacity, or the Guaranteed Full PV Capacity, Seller shall have ninety (90) days after the Interim Commercial Operation Date, Initial Full Commercial Operation Date, or the Full Commercial Operation Date, as applicable, to install additional capacity and/or Network Upgrades such that the Installed PV Capacity is equal to (but not greater than) the Guaranteed Interim PV Capacity, the Guaranteed Initial Full PV Capacity, or the Guaranteed Full PV Capacity, as applicable, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit I-1 hereto specifying the new Installed PV Capacity. If Seller fails to construct the Guaranteed Interim PV Capacity, Guaranteed Initial Full PV Capacity, or Guaranteed Full PV Capacity, as applicable, by such date, Seller shall pay “PV Capacity Damages” to Buyer, in an amount equal to Two Agenda Page 184
Exhibit B - 6
Hundred Fifty Thousand Dollars ($250,000) for each MW that the Guaranteed Interim PV Capacity, Guaranteed Initial Full PV Capacity, or Guaranteed Full PV Capacity, as applicable, exceeds the Installed PV Capacity, and the applicable portions of the Agreement (including a pro rata reduction of the Renewable Rate to account for the blended rate of the shortfall in the Installed PV Capacity) shall be adjusted accordingly consistent with the Installed PV Capacity. b. Guaranteed Storage Capacity. If, at Storage Commercial Operation, the Installed Storage Capacity is less than one hundred percent (100%) of the Guaranteed Storage Capacity, Seller shall have ninety (90) days after the Storage Commercial Operation Date to install additional capacity and/or Network Upgrades such that the Installed Storage Capacity is equal to (but not greater than) one hundred percent (100%) of the Guaranteed Storage Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit I-1 hereto specifying the new Installed Storage Capacity. If Seller fails to construct the Guaranteed Storage Capacity by such date, Seller shall pay “Storage Capacity Damages” to Buyer, in an amount equal to Two Hundred Fifty Thousand Dollars ($250,000) for each MW at four hours of continuous discharge that the Guaranteed Storage Capacity exceeds the Installed Storage Capacity, and the applicable portions of the Agreement shall be adjusted accordingly consistent with the Installed Storage 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 fails to timely pay any Daily Delay Damages or Commercial Operation Delay Damages, Buyer may draw upon the Development Security to satisfy Seller’s payment obligation thereof.
Agenda Page 185
Exhibit C - 1
EXHIBIT C
COMPENSATION
Buyer shall compensate Seller for the Product in accordance with this Exhibit C. (a) Renewable Rate; PTC Rate. Buyer shall pay Seller up to one hundred fifteen percent (115%) of the Expected Energy for each year of the Interim Facility Contract Period and each Contract Year the following amounts: (i) the Renewable Rate for each MWh of Adjusted Facility Energy; (ii) the Renewable Rate for each MWh of Deemed Delivered Energy from the Interim Facility; and (iii) the sum of the Renewable Rate plus the PTC Rate for each MWh of Deemed Delivered Energy from the Additional Facility.
(b) Excess Contract Year Deliveries Over 115%. Notwithstanding the foregoing, if, at any point in any year of the Interim Facility Contract Period or Contract Year, the amount of Adjusted 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 Deemed Delivered Energy shall be $0.00/MWh.
(c) Excess Settlement Interval Deliveries. If during any Settlement Interval, Seller delivers Product amounts, as measured by the amount of Facility Energy, in excess of the product of the Interconnection Capacity Limit 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.
(d) Monthly Capacity Payment.
(i) Commencing on the Storage Commercial Operation Date and for each applicable month of the Delivery Term (and pro-rated for the first month in which Storage Commercial Operation is achieved and the last month of the Delivery Term if Storage Commercial Operation does not start on the first day of a calendar month), Buyer shall pay Seller a Monthly Capacity Payment equal to the Storage Rate x Effective Storage Capacity. Such payment constitutes the entirety of the amount due to Seller from Buyer for the Storage Product. If the Effective Storage Capacity is adjusted pursuant to a Storage Capacity Test other than the first day of calendar month, payment shall be calculated separately for each portion of the month in which the different Effective Storage is applicable.
(ii) Storage Capacity Availability Payment True-Up. Each month during the Delivery Term, Buyer shall calculate the year-to-date (YTD) Annual Capacity Availability in accordance with Exhibit P. If (A) such YTD Annual Capacity Availability is less than ninety percent (90%), or (B) the final Annual Capacity Availability is less than the Guaranteed Storage Availability, Buyer shall (1) withhold the Storage Capacity Availability Payment True-Up Amount from the next Monthly Capacity Payment(s) (the “Storage Capacity Availability Payment True-Up”), and (2) provide Seller with a written statement of the calculation of the YTD Annual Capacity Availability and the Storage Capacity Availability Payment True-Up Amount; provided, if the Storage Capacity Availability Payment True-Up Amount is a negative number for any month Agenda Page 186
Exhibit C - 2
36370680v5
prior to the final year-end Storage Capacity Availability Payment True-Up calculation, Buyer shall not be obligated to reimburse Seller any previously withheld Storage Capacity Availability Payment True-Up Amount, except as set forth in the following sentence. If Buyer withholds any Storage Capacity Availability Payment True-Up Amount pursuant to subsection (d)(ii)(A) above, and if the final year-end Storage Capacity Availability Payment True-Up Amount is a negative number, Buyer shall pay to Seller the positive value of such amount together with the next Monthly Capacity Payment due to Seller.
“Storage Capacity Availability Payment True-Up Amount” means an amount equal to A x B - C, where:
A = The sum of the year-to-date Monthly Capacity Payments B = The Capacity Availability Factor
C = The sum of any Storage Capacity Availability Payment True-Up Amounts previously withheld by Buyer in the applicable Contract Year. “Capacity Availability Factor” means:
(A) If (i) the YTD Annual Capacity Availability multiplied by the Effective Storage Capacity is greater than or equal to (ii) the Guaranteed Storage Availability times the Effective Storage Capacity, then:
Capacity Availability Factor = 0
(B) If (i) the YTD Annual Capacity Availability multiplied by the Effective Storage Capacity is less than (ii) the Guaranteed Storage Availability times the Effective Storage Capacity, but greater than or equal to seventy percent (70%) of the Installed Storage Capacity, then:
Capacity Availability Factor = Guaranteed Storage Availability – YTD Annual Capacity Availability
(C) If (i) the YTD Annual Capacity Availability multiplied by the Effective Storage Capacity is less than (ii) seventy percent (70%) of the Installed Storage Capacity, then:
Capacity Availability Factor = (Guaranteed Storage Availability – YTD Annual Capacity Availability) * 1.5
provided that, if the result of any of the calculations in clauses (A) through (C) above is greater than 1.0, then the Capacity Availability Factor shall be deemed to be equal to 1.0. (e) Test Energy. Test Energy is compensated in accordance with Section 3.6.
Agenda Page 187
Exhibit C - 3
36370680v5
(f) Tax Credits. The Parties agree that the neither the Renewable Rate, the Storage Rate 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.
Agenda Page 188
Exhibit D - 1
EXHIBIT D
SCHEDULING COORDINATOR RESPONSIBILITIES
Scheduling Coordinator Responsibilities.
(i) 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.
(ii) Notices. Buyer (as the Facility’s SC) shall provide Seller with access to a web-based system through which Seller shall submit to Buyer and the CAISO all notices and updates required under the CAISO Tariff regarding the Facility’s status, including, but not limited to, all outage requests, forced outages, forced outage reports, clearance requests, or must offer waiver forms. Seller will cooperate with Buyer to provide such notices and updates. If the web-based system is not available, Seller shall promptly submit such information to Buyer and the CAISO by (in order of preference) telephonically or electronic mail to the personnel designated to receive such information.
(iii) 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 Agenda Page 189
Exhibit D - 2
addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling, outage reporting, or generator operation, and any such sanctions or penalties are imposed upon the Facility or to Buyer as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties shall be Seller’s responsibility. (iv) 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 will review, validate, and if requested by Seller under paragraph (e) below, dispute any charges that are the responsibility of Seller in a timely manner and consistent with Buyer’s existing settlement processes for charges that are Buyer’s responsibilities. Subject to Seller’s right to dispute and to have Buyer pursue the dispute of any such invoices, Seller shall pay the amount of CAISO Charges Invoices within ten (10) Business Days of Seller’s receipt of the CAISO Charges Invoice. If Seller fails to pay such CAISO Charges Invoice within that period, Buyer may net or offset any amounts owing to it for 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. (v) 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.
(vi) 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.
(vii) 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. (viii) 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.
Agenda Page 190
Exhibit D - 3
(ix) SQMD Reporting. If Seller elects to submit a SQMD Plan for the Facility, or only the Storage Facility, as applicable, then for any time period covered by the CAISO-approved SQMD Plan, Seller shall provide or cause to be provided to Buyer (or Buyer’s designee including any Buyer Scheduling Coordinator) with respect to the Facility Meters, or only the Storage Facility Meters, as applicable, Settlement Quality Meter Data no later than six (6) Business Days after the relevant flow date. In connection with any SQMD Plan or designation of the Facility, or only the Storage Facility, as applicable, 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 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 to Buyer (or Buyer’s designee including any Buyer Scheduling Coordinator), with respect to the Facility Meters, or only the Storage Facility Meters, as applicable, within the timeframe required by this Section (ix).
Agenda Page 191
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 major agreements, contracts, 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 192
Exhibit F-1 EXHIBIT F-1 MONTHLY EXPECTED AVAILABLE GENERATING FACILITY CAPACITY [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 193
Exhibit F-2 EXHIBIT F-2 MONTHLY EXPECTED GENERATING 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 194
Exhibit F-3 EXHIBIT F-3 MONTHLY EXPECTED AVAILABLE EFFECTIVE STORAGE CAPACITY [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 195
Exhibit F-4 EXHIBIT F-4 MONTHLY AVAILABLE STORAGE CAPABILITY [MWh Per Hour] – [Insert Month] 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 Day 1 Day 2 Day 3 Day 4 Day 5 [insert additional rows for each day in the month] Day 29 Day 30 Day 31 The foregoing table is provided for informational purposes only, and it shall not constitute, or be deemed to constitute, an obligation of any of the Parties to this Agreement.
Agenda Page 196
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)]
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 Renewable Rate, in $/MWh
“Adjusted Energy Production” shall mean the sum of the following: Adjusted Facility Energy + Deemed Delivered Energy + Lost Output + Replacement Energy. “Replacement Energy” means 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 during the Performance Measurement Period for which the Replacement Green Attributes are being provided, that are provided by Seller to Buyer as Replacement Product, in an amount not to exceed A – E, where E = Facility Energy + Deemed Delivered Energy + Lost Output. “Replacement Product” means (a) Replacement Energy, and (b) Replacement Green Attributes.
No payment shall be due if the calculation of (A - B) or (C - D) yields a negative number.
Agenda Page 197
Exhibit G - 2
Within sixty (60) days after each Contract Year, Buyer will 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 that the amount of damages owing shall be adjusted to account for Replacement Product, if any, delivered after each applicable Performance Measurement Period.
Agenda Page 198
Exhibit H - 1
EXHIBIT H
FORM OF INTERIM, STORAGE, INITIAL FULL, AND FULL COMMERCIAL
OPERATION DATE CERTIFICATE
This certification (“Certification”) of [Interim][Storage][Initial Full][Full] 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 [Interim] [Storage] [Initial Full] [Full] Generating Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.
2. Seller has installed equipment for the Generating Facility with an Installed PV Capacity of no less than ninety-five percent (95%) of the [Guaranteed Interim PV Capacity] [Guaranteed Initial Full PV Capacity] [Guaranteed Full PV Capacity].
3. Seller has installed equipment for the Storage Facility with an Installed Storage Capacity of no less than ninety-five percent (95%) of the [Guaranteed Storage Capacity].
4. Authorization to parallel the [Interim] Facility was obtained by the Transmission Provider, [Name of Transmission Provider as appropriate] on___[DATE]____.
5. The Transmission Provider has provided documentation supporting full unrestricted release for [Interim][Storage][Initial Full][Full] Commercial Operation by [Name of Transmission Provider as appropriate] on _______[DATE]_____.
6. The CAISO has provided notification supporting [Interim][Storage][Initial Full][Full] Commercial Operation, which may be provided in the form of CAISO COM COD Approval, in accordance with the CAISO Tariff on _______[DATE]_____.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Its:
Date:
Agenda Page 199
Exhibit I-1
EXHIBIT I-1
FORM OF INSTALLED CAPACITY CERTIFICATE
This certification (“Certification”) of Installed Capacity and related characteristics of the Facility 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:
(a) The installed nameplate capacity of the Generating Facility is __ MW AC (“Installed PV Capacity”);
(b) The Commercial Operation Storage Capacity Test demonstrated a maximum dependable operating capability to discharge electric energy of __ MW AC to the Delivery Point at four (4) hours of continuous discharge, in accordance with the testing procedures, requirements and protocols set forth in Section 4.9 and Exhibit O (the “Installed Storage Capacity”);
(c) The sum of (a) and (b) is __ MW AC and shall be the “Installed Capacity”; and
(d) The Commercial Operation Storage Capacity Test demonstrated an Efficiency Rate of __%, (ii) a Battery Charging Factor of __%, and (iii) a Battery Discharging Factor of __%, each in accordance with the testing procedures, requirements and protocols set forth in Section 4.9 and Exhibit O.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Its:
Date:
Agenda Page 200
Exhibit I-2
EXHIBIT I-2
FORM OF EFFECTIVE STORAGE CAPACITY CERTIFICATE
This certification (“Certification”) of Effective Storage Capacity and related characteristics of the Facility 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:
(a) The Storage Capacity Test demonstrated a maximum dependable operating capability to discharge electric energy of __ MW AC to the Delivery Point at four (4) hours of continuous discharge, in accordance with the testing procedures, requirements and protocols set forth in Section 4.9 and Exhibit O of the Agreement (the “Effective Storage Capacity”); and (b) The Storage Capacity Test demonstrated (i) an Efficiency Rate of __%, (ii) a Battery Charging Factor of __%, and (iii) a Battery Discharging Factor of __%, each in accordance with the testing procedures, requirements and protocols set forth in Section 4.9 and Exhibit O.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Its:
Date:
Agenda Page 201
Exhibit J - 1
EXHIBIT J
FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of 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).
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 202
Exhibit K - 3
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 NextEra Energy Capital Holdings, Inc. on behalf of [name of NextEra project company], 700 Universe Blvd, Juno Beach, Florida 33408 (“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”), 555 West 5th Street, 35th Floor, Los Angeles, CA 90013, 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 officer, 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 other number as specified from time-to-time by the Issuer.
Agenda Page 203
Exhibit K - 2
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 Request.
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, 555 West 5th Street, 35th Floor, Los Angeles, CA 90013. Only notices to Beneficiary meeting the requirements of this paragraph shall be considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect.
Agenda Page 204
Exhibit K - 2
[Bank Name]
___________________________
[Insert officer name]
[Insert officer title]
Agenda Page 205
Exhibit K - 2
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 officer 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 206
Exhibit L - 1
EXHIBIT L
FORM OF GUARANTY
This Guaranty (this “Guaranty”) is entered into as of [_____] (the “Effective Date”) by and between NextEra Energy Capital Holdings, Inc., a Delaware corporation (“Guarantor”), and Clean Power Alliance of Southern California, a California joint powers authority (together with its successors and permitted assigns, “Buyer”).
Recitals
A. Buyer and [SELLER ENTITY], a Delaware limited liability company (“Seller”), entered into that certain Renewable Power Purchase Agreement (as amended, restated or otherwise modified from time to time, the “PPA”) dated as of [____], 2020.
B. Guarantor is entering into this Guaranty as Performance Security to secure Seller’s obligations under the PPA, as required by Section 8.8 of the PPA.
C. It is in the best interest of Guarantor to execute this Guaranty inasmuch as Guarantor will derive substantial direct and indirect benefits from the execution and delivery of the PPA.
D. Initially capitalized terms used but not defined herein have the meaning set forth in the PPA.
Agreement
1. Guaranty. For value received, and subject to the terms and conditions hereof, Guarantor does hereby unconditionally, absolutely and irrevocably guarantee, as primary obligor and not as a surety, to Buyer the prompt payment by Seller of any and all amounts and payment obligations now or hereafter owing from Seller to Buyer under the PPA, including, without limitation, compensation for penalties, the Termination Payment, indemnification payments or other damages, as and when required pursuant to the terms of the PPA (the “Guaranteed Amount”), provided, that Guarantor’s aggregate liability under or arising out of this Guaranty shall not exceed ________ Dollars ($___________). The Parties understand and agree that any payment by Guarantor or Seller of any portion of the Guaranteed Amount shall thereafter reduce Guarantor’s maximum aggregate liability hereunder on a dollar-for-dollar basis. This Guaranty is an irrevocable, absolute, unconditional and continuing guarantee of the full and punctual payment, and not of collection, of the Guaranteed Amount and, except as otherwise expressly addressed herein, is in no way conditioned upon any requirement that Buyer first attempt to collect the payment of the Guaranteed Amount from Seller, any other guarantor of the Guaranteed Amount or any other Person or entity or resort to any other means of obtaining payment of the Guaranteed Amount. In the event Seller shall fail to duly, completely or punctually pay any Guaranteed Amount as required pursuant to the PPA, Guarantor shall promptly pay such amount as required herein.
2. Demand Notice. For avoidance of doubt, a payment shall be due for purposes of this Guaranty only when and if a payment is due and payable by Seller to Buyer under the terms and conditions of the Agreement. If Seller fails to pay any Guaranteed Amount as required pursuant to Agenda Page 207
Exhibit L - 2
the PPA for five (5) Business Days following Seller’s receipt of Buyer’s written notice of such failure (the “Demand Notice”), then Buyer may elect to exercise its rights under this Guaranty and may make a demand upon Guarantor (a “Payment Demand”) for such unpaid Guaranteed Amount. A Payment Demand shall be in writing and shall reasonably specify in what manner and what amount Seller has failed to pay and an explanation of why such payment is due and owing, with a specific statement that Buyer is requesting that Guarantor pay under this Guaranty.
Guarantor shall, within five (5) Business Days following its receipt of the Payment Demand, pay the Guaranteed Amount to Buyer.
3. Scope and Duration of Guaranty. This Guaranty applies only to the Guaranteed Amount.
This Guaranty shall continue in full force and effect from the Effective Date until the earlier of the following: (x) all Guaranteed Amounts have been paid in full (whether directly or indirectly through set-off or netting of amounts owed by Buyer to Seller), and the Delivery Term has expired or terminated early, (y) the date that is twelve (12) months after the last day of the Delivery Term, or (z) replacement Performance Security is provided in an amount and form required by the terms of the PPA. Further, this Guaranty (a) shall remain in full force and effect without regard to, and shall not be affected or impaired by any invalidity, irregularity or unenforceability in whole or in part of this Guaranty, and (b) subject to the preceding sentence, shall be discharged only by complete performance of the undertakings herein. Without limiting the generality of the foregoing, the obligations of the Guarantor hereunder shall not be released, discharged, or otherwise affected and this Guaranty shall not be invalidated or impaired or otherwise affected for the following reasons:
(i) the extension of time for the payment of any Guaranteed Amount, or (ii) any amendment, modification or other alteration of the PPA, or (iii) any indemnity agreement Seller may have from any party, or (iv) any insurance that may be available to cover any loss, except to the extent insurance proceeds are used to satisfy the Guaranteed Amount, or
(v) any voluntary or involuntary liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting, Seller or any of its assets, including but not limited to any rejection or other discharge of Seller’s obligations under the PPA imposed by any court, trustee or custodian or any similar official or imposed by any law, statue or regulation, in each such event in any such proceeding, or
(vi) the release, modification, waiver or failure to pursue or seek relief with respect to any other guaranty, pledge or security device whatsoever, or (vii) any payment to Buyer by Seller that Buyer subsequently returns to Seller pursuant to court order in any bankruptcy or other debtor-relief proceeding, or (viii) those defenses based upon (A) the legal incapacity or lack of power or authority of any Person, including Seller and any representative of Seller to enter into the PPA or perform its obligations thereunder, (B) lack of due execution, delivery, validity or enforceability, including of Agenda Page 208
Exhibit L - 3
the PPA, or (C) Seller’s inability to pay any Guaranteed Amount or perform its obligations under the PPA, or
(ix) any other event or circumstance that may now or hereafter constitute a defense to payment of the Guaranteed Amount, including, without limitation, statute of frauds and accord and satisfaction;
provided that Guarantor reserves the right to assert for itself any defenses, setoffs or counterclaims that Seller is or may be entitled to assert against Buyer (except for such defenses, setoffs or counterclaims that are expressly waived under any provision of this Guaranty) in a subsequent action for recoupment, restitution, or reimbursement.
4. Waivers by Guarantor. Guarantor hereby unconditionally waives as a condition precedent to the performance of its obligations hereunder, with the exception of the requirements in Paragraph 2, (a) notice of acceptance, presentment or protest with respect to the Guaranteed Amounts and this Guaranty, (b) notice of any action taken or omitted to be taken by Buyer in reliance hereon, (c) any requirement that Buyer exhaust any right, power or remedy or proceed against Seller under the PPA, and (d) any event, occurrence or other circumstance which might otherwise constitute a legal or equitable discharge of a surety. Without limiting the generality of the foregoing waiver of surety defenses, it is agreed that the occurrence of any one or more of the following shall not affect the liability of Guarantor hereunder:
(i) at any time or from time to time, without notice to Guarantor, the time for payment of any Guaranteed Amount shall be extended, or such performance or compliance shall be waived; (ii) the obligation to pay any Guaranteed Amount shall be modified, supplemented or amended in any respect in accordance with the terms of the PPA; (iii) subject to Section 10, any (a) sale, transfer or consolidation of Seller into or with any other entity, (b) sale of substantial assets by, or restructuring of the corporate existence of, Seller or (c) change in ownership of any membership interests of, or other ownership interests in, Seller; or
(iv) the failure by Buyer or any other Person to create, preserve, validate, perfect or protect any security interest granted to, or in favor of, Buyer or any Person.
5. Subrogation. Notwithstanding any payments that may be made hereunder by the Guarantor, Guarantor hereby agrees that until the earlier of payment in full of all Guaranteed Amounts or expiration of the Guaranty in accordance with Section 3, it shall not be entitled to, nor shall it seek to, exercise any right or remedy arising by reason of its payment of any Guaranteed Amount under this Guaranty, whether by subrogation or otherwise, against Seller or seek contribution or reimbursement of such payments from Seller.
6. Representations and Warranties. Guarantor hereby represents and warrants that (a) it has all necessary and appropriate corporate or limited liability company powers and authority and the legal right to execute and deliver, and perform its obligations under, this Guaranty, (b) this Guaranty constitutes its legal, valid and binding obligations enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium and Agenda Page 209
Exhibit L - 4
other similar laws affecting enforcement of creditors’ rights or general principles of equity, (c) the execution, delivery and performance of this Guaranty does not and will not contravene Guarantor’s organizational documents, any applicable Law or any contractual provisions binding on or affecting Guarantor, which would invalidate or materially impair Guarantor’s ability to perform its obligations under this Guaranty, (d) except as disclosed in reports filed with the Securities and Exchange Commission by Guarantor’s parent, NextEra Energy, Inc., there are no actions, suits or proceedings pending before any court, governmental agency or arbitrator, or, to the knowledge of the Guarantor, threatened, against or affecting Guarantor or any of its properties or revenues which may, in any one case or in the aggregate, adversely affect the ability of Guarantor to enter into or perform its obligations under this Guaranty, and (e) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority, and no consent of any other Person (including, any stockholder or creditor of the Guarantor), that has not heretofore been obtained is required in connection with the execution, delivery, performance, validity or enforceability of this Guaranty by Guarantor.
7. Notices. Notices under this Guaranty shall be deemed received if sent to the address specified below: (i) on the day received if served by overnight express delivery, and (ii) four Business Days after mailing if sent by certified, first class mail, return receipt requested. Any party may change its address to which notice is given hereunder by providing notice of the same in accordance with this Paragraph 8.
If delivered to Buyer, to it at [____]
Attn: [____]
If delivered to Guarantor, to it at [____]
Attn: [____]
8. Governing Law and Forum Selection. This Guaranty shall be governed by, and interpreted and construed in accordance with, the laws of the United States and the State of New York, excluding choice of law rules (other than Section 5-1401 and 5-1402 of the New York General Obligations Law), provided that, notwithstanding the foregoing, in no event shall such governing law prevent Buyer from complying with any obligations or from exercising any joint powers authority arising under the laws of the State of California. The Parties agree that any suit, action or other legal proceeding by or against any party (or its affiliates or designees) with respect to or arising out of this Guaranty shall be brought in the federal courts of the United States or the courts of the State of California sitting in the City and County of Los Angeles, California.
9. Miscellaneous. This Guaranty shall be binding upon Guarantor and its successors and assigns and shall inure to the benefit of Buyer and its successors and permitted assigns pursuant to the PPA. No provision of this Guaranty may be amended or waived except by a written instrument executed by Guarantor and Buyer. This Guaranty is not assignable by Guarantor without the prior written consent of Buyer, which consent shall not be unreasonably withheld. This Guaranty is not assignable by Buyer without the prior written consent of Guarantor, which consent shall not be unreasonably withheld, except to the extent that the PPA is assigned in accordance with the terms Agenda Page 210
Exhibit L - 5
thereof. No provision of this Guaranty confers, nor is any provision intended to confer, upon any third party (other than Buyer’s successors and permitted assigns) any benefit or right enforceable at the option of that third party. This Guaranty embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements and understandings of the parties hereto, verbal or written, relating to the subject matter hereof. If any provision of this Guaranty is determined to be illegal or unenforceable (i) such provision shall be deemed restated in accordance with applicable Laws to reflect, as nearly as possible, the original intention of the parties hereto and (ii) such determination shall not affect any other provision of this Guaranty and all other provisions shall remain in full force and effect. This Guaranty may be executed in any number of separate counterparts, each of which when so executed shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Guaranty may be executed and delivered by electronic means with the same force and effect as if the same was a fully executed and delivered original manual counterpart.
10. WAIVER OF JURY TRIAL; JUDICIAL REFERENCE.
(a) JURY WAIVER. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. (b) JUDICIAL REFERENCE. IN THE EVENT ANY LEGAL PROCEEDING IS
FILED IN A FEDERAL COURT OF THE STATE OF CALIFORNIA, OR, TO THE EXTENT
SUCH FEDERAL COURT LACKS SUBJECT MATTER JURISDICTION, IN A STATE COURT OF THE STATE OF CALIFORNIA (THE “COURT”) BY OR AGAINST ANY PARTY HERETO
IN CONNECTION WITH ANY CONTROVERSY, DISPUTE OR CLAIM DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) (EACH, A “CLAIM”) AND THE WAIVER SET FORTH IN THE
PRECEDING PARAGRAPH IS NOT ENFORCEABLE IN SUCH ACTION OR PROCEEDING, THE PARTIES HERETO AGREE AS FOLLOWS:
(i) ANY CLAIM (INCLUDING BUT NOT LIMITED TO ALL DISCOVERY AND
LAW AND MOTION MATTERS, PRETRIAL MOTIONS, TRIAL MATTERS
AND POST-TRIAL MOTIONS) WILL BE DETERMINED BY A GENERAL
REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1. THE PARTIES INTEND THIS GENERAL REFERENCE AGREEMENT
TO BE SPECIFICALLY ENFORCEABLE IN ACCORDANCE WITH
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638.
Agenda Page 211
Exhibit L - 6
(ii) UPON THE WRITTEN REQUEST OF ANY PARTY, THE PARTIES SHALL
SELECT A SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR JUSTICE. IF THE PARTIES DO NOT AGREE UPON A REFEREE WITHIN TEN (10) DAYS OF SUCH WRITTEN REQUEST, THEN, ANY PARTY MAY
REQUEST THE COURT TO APPOINT A REFEREE PURSUANT TO
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 640(B).
(iii) THE PARTIES RECOGNIZE AND AGREE THAT ALL CLAIMS RESOLVED IN
A GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL BE
DECIDED BY A REFEREE AND NOT BY A JURY.
[Signature on next page]
Agenda Page 212
Exhibit L - 7
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly executed and delivered by its duly authorized representative on the date first above written.
GUARANTOR:
NEXTERA ENERGY CAPITAL HOLDINGS,
INC.
By:______________________________
Printed Name:__________________
Title:____________________________
BUYER:
[_______]
By:______________________________
Printed Name:__________________
Title:____________________________
By:______________________________
Printed Name:__________________
Title:____________________________
Agenda Page 213
Exhibit M - 1
EXHIBIT M
FORM OF REPLACEMENT RA NOTICE
This Replacement RA Notice (this “Notice”) 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 Notice but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Pursuant to Section [3.6] [3.8(b)] of the Agreement, Seller hereby provides the below Replacement RA product information:
Agenda Page 214
Exhibit M - 2
[SELLER ENTITY]
By:
Its:
Date:
Agenda Page 215
Exhibit N - 1
36370680v5
EXHIBIT N
NOTICES
ARLINGTON ENERGY CENTER II, LLC,
a Delaware limited liability company
(“Seller”)
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA, a California
joint powers authority (“Buyer”)
All Notices:
Street: 700 Universe Blvd
City: Juno Beach, FL 33408
Attn: Business Management
Phone: (561) 691-3062
Facsimile: (561) 304-5161
Email: [email protected]
All Notices:
Street: 801 S Grand, Suite 400
City: Los Angeles, CA 90017
Attn: Chief Executive Officer
Phone: (213) 269-5870
Email: [email protected]
Reference Numbers:
Duns:
Federal Tax ID Number:
Reference Numbers:
Duns:
Federal Tax ID Number:
Invoices:
Attn: Business Management
Phone: (561) 691-3062
Facsimile: (561) 304-5161
E-mail: [email protected]
Invoices:
Attn: Vice President, Power Supply
Phone: (213) 269-5870
E-mail: [email protected]
Scheduling:
Attn:
Phone:
Facsimile:
Email:
Scheduling:
Attn: Operations 24/7 Desk
Phone: (817) 462-1509
Email: [email protected]
Confirmations:
Attn:
Phone:
Facsimile:
Email:
Confirmations:
Attn: Vice President, Power Supply
Phone: (213) 269-5870
Email: [email protected]
Payments:
Attn: Business Management
Phone: (561) 691-3062
Facsimile: (561) 304-5161
E-mail: [email protected]
Payments:
Attn: Vice President, Power Supply
Phone: (213) 269-5870
E-mail: [email protected]
Wire Transfer: Previously provided by Seller
to Buyer.
BNK: [TBD]
ABA: [TBD]
ACCT: [TBD]
Wire Transfer:
BNK: River City Bank
ABA: 121-133-416
ACCT: XXXXXX8042
Agenda Page 216
Exhibit N - 2
ARLINGTON ENERGY CENTER II, LLC,
a Delaware limited liability company
(“Seller”)
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA, a California
joint powers authority (“Buyer”)
Emergency Contact:
Attn: Renewable Operations Control Center
(ROCC)
(24-hour coverage):
Phone: (561) 694-3636
Toll Free: (866) 375-3737
Fax: (561) 694-3615
Agenda Page 217
Exhibit O - 1
EXHIBIT O
STORAGE CAPACITY TESTS
Storage Capacity Test Notice and Frequency
A. Commercial Operation Storage Capacity Test(s). Upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall schedule and complete a Commercial Operation Storage Capacity Test prior to the Commercial Operation Date. Such initial Commercial Operation Storage Capacity Test (and any subsequent Commercial Operation Storage Capacity Test permitted in accordance with Exhibit B) shall be performed in accordance with this Exhibit O and shall establish the Installed Storage Capacity and initial Efficiency Rate hereunder based on the actual capacity and capabilities of the Storage Facility determined by such Commercial Operation Storage Capacity Test(s).
B. Subsequent Storage Capacity Tests. Following the Commercial Operation Storage Capacity Test(s), at least fifteen (15) days in advance of the start of each Contract Year, upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall schedule and complete a Storage Capacity Test. In addition, Buyer shall have the right to require a retest of the Capacity Test at any time upon no less than five (5) Business Days prior written Notice to Seller if Buyer provides data with such Notice reasonably indicating that the then-current Effective Storage Capacity or Efficiency Rate have varied materially from the results of the most recent prior Capacity Test. Seller shall have the right to run a retest of any Storage Capacity Test at any time upon five (5) Business Days’ prior written Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practice).
C. Test Results and Re-Setting of Effective Storage Capacity and Efficiency Rate. No later than five (5) days following any Capacity Test, Seller shall submit a testing report detailing results and findings of the test. The report shall include Facility Meter readings and plant log sheets verifying the operating conditions and output of the Storage Facility. In accordance with Section
4.9(a)(ii) of the Agreement and Part II(I) below, after the Commercial Operation Storage Capacity Test(s), the Effective Storage Capacity (up to, but not in excess of, the Installed Capacity) and Efficiency Rate determined pursuant to such Storage Capacity Test shall become the new Effective Storage Capacity and Efficiency Rate at the beginning of the day following the completion of the test for calculating the Contract Price and all other purposes under this Agreement.
Capacity Test Procedures
PART I. GENERAL.
(1) Each Capacity Test shall be conducted in accordance with Prudent Operating Practices, the Operating Restrictions, and the provisions of this Exhibit O. For ease of reference, a Capacity Test is sometimes referred to in this Exhibit O as a “CT”.
Buyer or its representative may be present for the CT and may, for informational purposes only, use its own metering equipment (at Buyer’s sole cost). (2) Conditions Prior to Testing.
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Exhibit O - 2
(1) EMS Functionality. The EMS shall be successfully configured to receive data from the Battery Management System (BMS), exchange DNP3 data with the Buyer SCADA device, and transfer data to the database server for the calculation, recording and archiving of data points. (2) Communications. The Remote Terminal Unit (RTU) testing should be successfully completed prior to any testing. The interface between Buyer’s RTU and the Facility SCADA system should be fully tested and functional prior to starting any testing, including verification of the data transmission pathway between the Buyer’s RTU and Seller’s EMS interface and the ability to record SCADA data.
(3) Commissioning Checklist. Commissioning shall be successfully completed per manufacturer guidance on all installed Facility equipment, including verification that all controls, set points, and instruments of the EMS are configured.
PART II. REQUIREMENTS APPLICABLE TO ALL CAPACITY TESTS.
A. Test Elements. Each CT shall include at least the following individual test elements, which must be conducted in the order prescribed in Part III of this Exhibit O, unless the Parties mutually agree to deviations therefrom. For the avoidance of doubt, the Parties acknowledge and agree that should Seller fall short of demonstrating one or more of the Test Elements as specified below, the Test will still be deemed “complete,” and any adjustments necessary to the Effective Storage Capacity or to the Efficiency Rate resulting from such Test, if applicable, will be made in accordance with this Exhibit O.
(1) Electrical output at maximum discharging level (MW) for four (4) continuous hours; and
(2) Electrical input at maximum charging level at the Facility Meter (MW), as sustained until the Stored Energy Level reaches at least 90%, continued by the electrical input at a rate up to the maximum charging level at the Facility Meter (MW), as sustained until the Stored Energy Level reaches 100%, not to exceed five (5) hours of total charging time.
B. Parameters. During each CT, the following parameters shall be measured and recorded simultaneously for the Storage Facility, at two (2) second intervals:
(1) Time;
(2) Net electrical energy output to the Facility Meters (kWh) (i.e., to each measurement device making up the Facility Meter);
(3) Net electrical energy input from the Facility Meters (kWh) (i.e., from each measurement device making up the Facility Meter);
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Exhibit O - 3
(4) Stored Energy Level (MWh).
C. Site Conditions. During each CT, the following conditions at the Site shall be measured and recorded simultaneously at thirty (30) minute intervals:
(1) Relative humidity (%);
(2) Barometric pressure (inches Hg) near the horizontal centerline of the Storage Facility; and
(3) Ambient air temperature (°F).
D. Test Showing. Each CT shall record and report the following datapoints:
(1) That the CT successfully started;
(2) The maximum sustained discharging level for four (4) consecutive hours pursuant to A(1) above;
(3) The maximum sustained charging level for four (4) consecutive hours pursuant to A(2) above;
(4) Amount of time between the Storage Facility’s electrical output going from 0 to the maximum sustained discharging level registered during the Test (for purposes of calculating the Ramp Rate);
(5) Amount of time between the Storage Facility’s electrical input going from 0 to the maximum sustained charging level registered during the Test (for purposes of calculating the Ramp Rate);
(6) Amount of Charging Energy, registered at the Storage Facility Meter, to go from 0% Stored Energy Level to 100% Stored Energy Level; (7) Amount of Discharging Energy, registered at the Storage Facility Meter, to go from 100% Stored Energy Level to 0% Stored Energy Level.
E. Test Conditions.
(1) General. At all times during a CT, the Storage Facility shall be operated in compliance with Prudent Operating Practices, the Operating Restrictions, and all operating protocols recommended, required or established by the manufacturer for the Storage Facility.
(2) Abnormal Conditions. If abnormal operating conditions that prevent the testing or recordation of any required parameter occur during a CT, Seller may postpone or reschedule all or part of such CT in accordance with Part II.F below.
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Exhibit O - 4
(3) Instrumentation and Metering. Seller shall provide all instrumentation, metering and data collection equipment required to perform the CT. The instrumentation, metering and data collection equipment electrical meters shall be calibrated in accordance with Prudent Operating Practice and, as applicable, the CAISO Tariff.
F. Incomplete Test. If any CT is not completed in accordance herewith, Buyer may in its sole discretion: (i) accept the results up to the time the CT stopped without any modification to the Effective Storage Capacity or Efficiency Rate pursuant to Section I below; (ii) require that the portion of the CT not completed, be completed within a reasonable specified time period; or (iii) require that the CT be entirely repeated. Notwithstanding the above, if Seller is unable to complete a CT due to a Force Majeure Event or the actions or inactions of Buyer or the CAISO or the Transmission Provider, Seller shall be permitted to reconduct such CT on dates and at times reasonably acceptable to the Parties.
G. Test Report. Within five (5) Business Days after the completion of any CT, Seller shall prepare and submit to Buyer a written report of the results of the CT, which report shall include:
(1) A record of the personnel present during the CT that served in an operating, testing, monitoring or other such participatory role; (2) The measured and calculated data for each parameter set forth in Part II.A through D, including copies of the raw data taken during the test; and (3) Seller’s statement of either Seller’s acceptance of the CT or Seller’s rejection of the CT results and reason(s) therefor.
Within five (5) Business Days after receipt of such report, Buyer shall notify Seller in writing of either Buyer’s acceptance of the CT results or Buyer’s rejection of the CT and reason(s) therefor.
If either Party rejects the results of any CT, such CT shall be repeated in accordance with Part II.F.
H. Supplementary Capacity Test Protocol. No later than sixty (60) days prior to commencing Storage Facility construction, Seller shall deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) a supplement to this Exhibit O with additional and supplementary details, procedures and requirements applicable to Capacity Tests based on the then-current design of the Storage Facility (“Supplementary Capacity Test Protocol”). Thereafter, from time to time, Seller may deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) any Seller recommended updates to the then-current Supplementary Capacity Test Protocol. The initial Supplementary Capacity Test Protocol (and each update thereto), once approved by Buyer, shall be deemed an amendment to this Exhibit O.
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Exhibit O - 5
I. Adjustment to Effective Storage Capacity and Efficiency Rate. The Effective Storage Capacity and Efficiency Rate shall be updated as follows:
(1) The total amount of Facility Energy delivered to the Delivery Point (expressed in MWh AC) during the first four (4) hours of discharge (up to, but not in excess of, the product of (i) (a) the Guaranteed Storage Capacity (in the case of a Commercial Operation Storage Capacity Test, including under Section 5 of Exhibit B) or (b) the Installed Storage Capacity (in the case of any other Storage Capacity Test), multiplied by (ii) four (4) hours) shall be divided by four (4) hours to determine the Effective Storage Capacity, which shall be expressed in MW AC, and shall be the new Effective Storage Capacity in accordance with Section 4.9(a)(ii) of the Agreement.
PART III. INITIAL SUPPLEMENTARY CAPACITY TEST PROTOCOL.
A. Effective Storage Capacity and Efficiency Rate Test
Procedure:
(1) System Starting State: The Storage Facility will be in the on-line state at 0% SOC.
(2) Record the initial value of the Storage Facility SOC. (3) Command a real power charge that results in an AC power of Storage Facility’s maximum charging level, and continue charging until the earlier of (a) the Storage Facility has reached 100% SOC or (b) five (5) hours have lapsed since the Storage Facility commenced charging. (4) Record and store the Storage Facility SOC after the earlier of (a) the Storage Facility has reached 100% SOC or (b) five (5) hours of continuous charging. Such data point shall be used for purposes of calculation of the Battery Charging Factor.
(5) Record and store the AC energy charged to the Storage Facility as measured at the Storage Facility Meter (“Energy In”).
(6) Following an agreed-upon rest period, command a real power discharge that results in an AC power output of the Storage Facility’s maximum discharging level and maintain the discharging state until the earlier of (a) the Facility has discharged at the maximum discharging level for four (4) consecutive hours, (b) the Storage Facility has reached 0% SOC, or (c) the sustained discharging level is at least 2% less than the maximum discharging level.
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Exhibit O - 6
(7) Record and store the Storage Facility SOC after four (4) hours of continuous discharging. Such data point shall be used for purposes of calculation of the Battery Discharging Factor.
(8) Record and store the AC Energy discharged (in MWh) as measured at the Facility Meter. Such data point shall be used for purposes of calculation the Effective Storage Capacity.
(9) If the Storage Facility has not reached 0% SOC pursuant to Section III.A.6, continue discharging the Storage Facility until it reaches a 0% SOC.
(10) Record and store the Discharging Energy as measured at the Storage Facility Meter for determining the Effective Storage Capacity. “Energy Out” means that total AC Energy discharged (in MWh) as measured at the Storage Facility Meter from the commencement of discharging pursuant to Section III.A.5 until the Storage Facility has reached a 0% SOC pursuant to either Section III.A.6 or Section III.A.9, as applicable.
Test Results
(1) The resulting Efficiency Rate is calculated as Energy Out/Energy In, with Energy Out/Energy In measured at the Storage Facility Meter. (2) The resulting Effective Storage Capacity measurement is the sum of the total Discharging Energy at the Storage Facility Meter divided by four (4) hours.
B. AGC Discharge Test
Purpose: This test will demonstrate the AGC discharge capability to achieve the Storage Facility’s maximum discharging level within 1 second.
System starting state: The Facility will be in the on-line state at 50% SOC and at an initial active power level of 0 MW and reactive power level of 0 MVAR. The EMS will be configured to follow a predefined agreed-upon active power profile.
Procedure:
(1) Record the Storage Facility active power level at the Facility Meter. (2) Command the Storage Facility to follow a simulated CAISO RIG signal of 100 MW for ten (10) minutes.
(3) Record and store the Storage Facility active power response (in seconds).
System end state: The Facility will be in the on-line state and at a commanded active power level of 0 MW.
C. AGC Charge Test
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Exhibit O - 7
Purpose: This test will demonstrate the AGC charge capability to achieve the Storage Facility’s full charging level within 1 second.
System starting state: The Facility will be in the on-line state at 50% SOC and at an initial active power level of 0 MW and reactive power level of 0 MVAR. The Facility control system will be configured to follow a predefined agreed-upon active power profile.
Procedure:
(1) Record the Storage Facility active power level at the Facility Meter. (2) Command the Storage Facility to follow a simulated CAISO RIG signal of -100 MW for ten (10) minutes.
(3) Record and store the Storage Facility active power response (in seconds).
System end state: The Storage Facility will be in the on-line state and at a commanded active power level of 0 MW.
D. Reactive Power Production Test
Purpose: This test will demonstrate the reactive power production capability of the Storage Facility.
System starting state: The Storage Facility will be in the on-line state at 50% SOC and at an initial active power level of 0 MW and reactive power level of 0 MVAR. The EMS will be configured to follow an agreed-upon predefined reactive power profile.
Procedure:
(1) Record the Storage Facility reactive power level at the Facility Meter. (2) Command the Storage Facility to follow 50 MVAR for ten (10) minutes. (3) Record and store the Storage Facility reactive power response.
System end state: The Storage Facility will be in the on-line state and at a commanded reactive power level of 0 MVAR.
E. Reactive Power Consumption Test
Purpose: This test will demonstrate the reactive power consumption capability of the Storage Facility.
System starting state: The Storage Facility will be in the on-line state at 50% SOC and at an initial active power level of 0 MW and reactive power level of 0 MVAR. The Storage Facility control system will be configured to follow an agreed-upon predefined reactive power profile.
Procedure:
(1) Record the Storage Facility reactive power level at the Facility Meter.
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Exhibit O - 8
(2) Command the Storage Facility to follow -50 MVAR for ten (10) minutes. (3) Record and store the Storage Facility reactive power response.
System end state: The Storage Facility will be in the on-line state and at a commanded reactive power level of 0 MVAR.
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Exhibit P - 1
EXHIBIT P
ANNUAL STORAGE CAPACITY AVAILABILITY CALCULATION
(a) Commencing on the Storage Commercial Operation Date and for each applicable month of the Delivery Term Buyer shall calculate the year-to-date (YTD) “Annual Storage Capacity Availability” using the formula set forth below:
Annual Storage Capacity Availability (%) = 1 –
Unavailable Calculation Intervals
Total YTD Calculation Intervals
“Calculation Interval” or “C.I.” means each successive five-minute interval. “Unavailable Calculation Intervals” means the sum of year-to-date unavailable Calculation Intervals, where for each Calculation Interval:
A = the lesser of (i) available PMAX and (ii) available Effective Storage Capacity “Storage Capability” means the sum of (i) the energy throughput capability in MWhs in the applicable Calculation Interval that the Storage Facility is available to be charged (calculated as the available battery charging capability (in MWh) in the applicable Calculation Interval x the Battery Charging Factor) and (ii) the energy throughput capability in MWhs in the applicable Calculation Interval that the Storage Facility is available to be discharged (calculated as the available battery discharging charging capability (in MWh) in the applicable Calculation Interval x the Battery Discharging Factor).
During the period from the Storage Commercial Operation Date until the Full Commercial Operation Date, in all Calculation Intervals between 4:00 p.m. and 9:00 p.m., the Storage Capability shall be modified to be the lesser of the above definition and the sum of the PV Energy and Charging Energy produced by the Facility prior to 4:00 p.m. in such day multiplied by the Efficiency Rate.
“Total YTD Calculation Intervals” means the total Calculation Intervals year-to-date in Unavailable
Calculation Interval = 1 C.I. x (
1 – the lesser of:
A
or
Storage
Capability
(MWh)
Effective ) Storage
Capacity
Effective Storage
Capacity x 4 hrs
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Exhibit P - 2
the applicable calendar year (commencing upon the Commercial Operation Date). (b) The available PMAX, Effective Storage Capacity and Storage Capability in the above calculations shall be the lower of the amounts reported by (i) Seller’s real-time EMS data feed to Buyer for the Storage Facility, and (ii) Seller’s most recent Availability Notice (as updated pursuant to Section 4.10), provided that any such revised Availability Notice indicating the Storage Facility is available for the applicable Calculation Interval is submitted by Seller (a) by 5:00 a.m. of the morning Buyer schedules or bids the Storage Facility in the Day-Ahead Market, or (b) at least sixty (60) minutes prior to the time the Buyer is required to schedule or bid the Storage Facility in the Real-Time Market. Except as otherwise provided in this Agreement, the calculations of available PMAX and Storage Capability in the foregoing sentence shall be based solely on the availability of the Storage Facility to charge or discharge Energy, as applicable (excluding for reasons at the high-voltage side of the Delivery Point or beyond.) For avoidance of doubt, any Calculation Interval in which the Storage Facility fails to maintain connectivity to the CAISO such that it cannot receive ADS signals shall be deemed an Unavailable Calculation Interval. (c) If the total rated power of the Storage Facility inverters is less than the Installed Storage Capacity divided by 0.95 charging and divided by 0.95 discharging expressed in kVA at 45°C, then Buyer shall have the right, in its reasonable discretion, to apply an ambient air temperature availability derate to the applicable Calculation Interval.
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Exhibit Q - 2
2)
a) Beginning at Storage Commercial Operation, this annual average State of Charge will be communicated by a tag in the Real Time SCADA Points List. 3) Dispatch Communications Protocols and SCADA
a) Storage Facility Dispatch
i) Ancillary Services
(1) Ancillary Services dispatch will occur based on communications from CAISO to the Storage Facility Remote Intelligent Gateway (RIG). ii) Energy
(1) Buyer’s Scheduling Coordinator will provide Seller access to CAISO Automated Dispatch System (ADS) to obtain dispatch operating target (DOT) MW setpoint and instruction time.
b) Real-Time SCADA
i) The Real-Time SCADA points list, a representation of which is provided in Exhibit 1, will be provided from the Seller to the Buyer’s Scheduling Coordinator via Remote Terminal Unit (RTU) connection.
ii) Seller will provide and maintain CAISO real time telemetry from the Storage Facility.
III. STORAGE AND GENERATING FACILITY SCHEDULING AND
NOTIFICATIONS
1) Storage Facility Scheduling
a) Buyer will be responsible for scheduling of the Storage Facility by delivering Charging Notices and Discharging Notices to the Seller in accordance with the Agreement, including Exhibit D.
2) Forecasting of the Generating System and the Storage System a) Seller will provide to Buyer the (i) Annual Forecast of Energy and (ii) Monthly Forecast of Energy and Availability Capacity in accordance with Agreement Sections
4.3(a) and 4.3(b) by email.
b) Seller will provide to Buyer’s Scheduling Coordinator the Day-Ahead Forecast in accordance with Agreement Sections 4.3(c) via email.
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Exhibit Q - 2
Exhibit 2: Representative Buyer’s Scheduling Coordinator Outage Template Agenda Page 233
Exhibit R - 1
EXHIBIT R
METERING DIAGRAM
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Exhibit S – 1
EXHIBIT S
FORM OF COLLATERAL ASSIGNMENT AGREEMENT
FORM OF CONSENT TO COLLATERAL ASSIGNMENT AGREEMENT
This Consent to Collateral Assignment Agreement (this “Consent”) is entered into among (i) Clean Power Alliance of Southern California, a California joint powers authority (“CPA”), (ii) Arlington Energy Center II, LLC, a Delaware limited liability company (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 Facility 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
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 Agenda Page 235
Exhibit S – 2
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, following the occurrence of a default by Project Company under the PPA, CPA is authorized to act in accordance with Collateral Agent’s instructions and the terms of this Agreement, and that, other than arising due to the negligence or willful misconduct of CPA, 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 ninety (90) 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, that, such additional cure period for the Collateral Agent shall commence on the later of (1) the end of the Project Company’s cure period under the PPA and (2) the date the Collateral Agent receives notice of the PPA Default; provided, further, (a) if possession of the Facility is 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 Agenda Page 236
Exhibit S – 3
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 CPA (such notice, a “Financing Document Default Notice”) 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 meets the qualifications of a Permitted Transferee under the PPA (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 Facility (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 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 Agenda Page 237
Exhibit S – 4
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 Facility 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 Facility 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 curing defaults, 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 Facility; 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 Agenda Page 238
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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 Facility 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
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. [Collateral Agent may specific account information]
2.2 No Offset, Etc.
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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.
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.
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Exhibit S – 7
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 limited liability company 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).
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:
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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. MISCELLANEOUS
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 (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 Agenda Page 242
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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.
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 Agenda Page 243
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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 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.]
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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.
ARLINGTON ENERGY CENTER II,
LLC,
a Delaware limited liability company.
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA,
a California joint powers authority.
By:
[Name]
[Title]
Date:
By:
[Name]
[Title]
Date:
[NAME OF COLLATERAL AGENT],
[Legal Status of Collateral Agent].
By:
[Name]
[Title]
Date:
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Exhibit S – 12
SCHEDULE A
[Describe any disclosures relevant to representations and warranties made in Section 3.4] Agenda Page 246
Exhibit T – 1
EXHIBIT T
INTENTIONALLY OMITTED
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Exhibit U – 1
EXHIBIT U
FORM OF LIMITED ASSIGNMENT AGREEMENT
LIMITED ASSIGNMENT AGREEMENT
This Limited Assignment Agreement (this “Assignment Agreement” or “Agreement”) is entered into as of [ ], 2022 the “Limited Assignment Agreement Effective Date”) by and among Arlington Energy Center II, LLC, a Delaware limited liability company (“PPA Seller”), Clean Power Alliance of Southern California, a California joint powers authority (“PPA Buyer”), and J. Aron & Company LLC, a New York limited liability company (“Financing Party”), and relates to that certain PPA defined in Appendix 1 hereto. Unless the context otherwise specifies or requires, capitalized terms used but not defined in this Agreement have the meanings set forth in the PPA.
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 Assigned Product (as defined in Appendix 1) during the Assignment Period (as defined in Appendix 1), as such rights may be limited or further described in the “Further Information” section in Appendix 1 (the “Assigned Product Rights”). All other rights of PPA Buyer under the PPA are expressly reserved for PPA Buyer. b) PPA Buyer hereby delegates to Financing Party the obligation to pay for all Assigned Product that is 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, including without limitation obligations with respect to the provision of PPA Buyer financial statements, Buyer Credit Notices, and Buyer Credit Support, and payment for any Product which is not included in the Assigned Product and any other amounts owed under the PPA. To the extent Financing Party fails to pay for any Assigned Product by the due date for payment set forth in the PPA, PPA Buyer remains responsible for such payment, and it will be a Buyer Event of Default pursuant to PPA Section 11.1(a)(i) if PPA Buyer does not make such payment within five (5) Business Days of receiving notice of such non-payment from PPA Seller. c) Financing Party hereby accepts and agrees, and PPA Seller hereby consents, to the assignment, transfer, conveyance and delegation described in clauses (a) and (b) above.
d) All scheduling of Assigned Product and other communications related to the PPA shall take place between PPA Buyer and PPA Seller pursuant to the terms of the PPA; provided that during the Assignment Period (i) title to Assigned Product will pass from PPA Seller to Financing Party upon delivery by PPA Seller of Assigned Product in accordance with the PPA; (ii) PPA Buyer is hereby authorized by Financing Party Agenda Page 248
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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 and PPA Seller will forward to Financing Party copies of annual forecasts of Energy provided pursuant to Section 4.3(a) of the PPA and monthly forecasts of available capacity of the Generating Facility provided pursuant to Section 4.3(b) of the PPA; (v) PPA Buyer and PPA Seller will forward copies to Financing Party of all invoices provided to PPA Buyer pursuant to Section 8.1, provided that any payment adjustments or subsequent reconciliations occurring after the date that is 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 Seller will not be obligated to deliver copies of any communications relating thereto to Financing Party.
PPA Buyer shall promptly reimburse PPA Seller for any additional costs or expenses reasonably and actually incurred by PPA Seller as a result of this subsection (d). e) PPA Seller acknowledges that (i) PPA Buyer and Financing Party have advised PPA Seller that Financing Party intends to immediately transfer title to any Assigned Product received from PPA Seller through one or more intermediaries such that all Assigned Product 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; provided, however, that (A) at no time shall PPA Seller be required to pay Financing Party for any amounts by which any such receivables exceed any Delivered Product Payment Obligation, (B) any such application by Financing Party shall not affect any amounts due and owing under the PPA, including under any invoice, and (C) at all times, PPA Buyer remains liable to PPA Seller for all amounts due and owing under the PPA, including the total gross amount due to PPA Seller under each invoice. f) At least three (3) Business Days before the commencement of the Assignment Period, The Goldman Sachs Group, Inc. (the “Guarantor”) will issue, in favor of PPA Seller, a guaranty of Financing Party’s payment obligations under this Assignment Agreement substantially in the form of Appendix 2 attached hereto (the “Guaranty”). PPA Seller may draw upon, apply, or make demand under the Guaranty to recover any unpaid amounts due from Financing Party and not timely paid as set forth herein; provided, however, that PPA Seller’s rights under the Guaranty and this subsection (f) shall not reduce or affect PPA Buyer’s obligation to render payments when due under the PPA or extend any deadlines in the PPA. g) Notwithstanding anything to the contrary herein, nothing in this Agreement modifies or amends any rights or obligations of PPA Buyer and PPA Seller under the PPA, including with respect to CAISO revenues and costs.
h) Notwithstanding anything to the contrary in this Assignment Agreement including without limitation the immediately preceding Section 1(g) (with respect to the phrase “nothing in this Agreement modifies or amends any rights or obligations of PPA Buyer and PPA Seller under the PPA”) and Section 6(i) hereof, the Parties hereby agree that if (1) the assignment, transfer or conveyance of the Assigned Product pursuant to this Assignment Agreement, or (2) PPA Seller’s performance of any Agenda Page 249
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obligation under this Assignment Agreement, including without limitation if PPA Seller makes any change to the recipient of the WREGIS Certificates as directed by Financing Party and PPA Buyer pursuant to Appendix 1 hereof, fails to meet any requirements of the PPA, then PPA Seller shall not be deemed to be in breach of any obligation in the PPA, including without limitation any representation or warranty therein.
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 payment is not made by Financing Party within three (3) Business Days following receipt by Financing Party and PPA Buyer of written notice thereof; (3) delivery of a written notice by PPA Seller if any of the events described in the definition of Bankrupt in the PPA occurs with respect to Financing Party; (4) delivery of a written notice by Financing Party if any of the events described in the definition of Bankrupt in the PPA occurs with respect to PPA Seller; (5) failure of the Guaranty provided by the Guarantor to PPA Seller hereunder to be in full force and effect (other than in accordance with its terms) prior to the indefeasible satisfaction of all obligations of Financing Party hereunder or if the Guarantor provides notice of termination of the Guaranty or otherwise repudiates, disaffirms, disclaims, or rejects, in whole or in part, or challenges the validity of the Guaranty; or
(6) neither Financing Party nor the Guarantor maintains a Credit Rating equal to or greater than Baa3 from Moody’s and BBB- from S&P, and if ratings by S&P and Moody’s are not equivalent, the lower rating shall apply (a “Required Credit Rating”). b) The Assignment Period will end at the end of the last delivery hour on the date specified in the termination notice provided pursuant to Section 2(a), 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 clause (a)(1) or (a)(2) above. All Assigned Rights and Obligations shall revert from Financing Party to PPA Buyer upon the expiration or 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 arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period.
c) The Assignment Period will automatically terminate upon the expiration or early termination of the PPA. All Assigned Rights and Obligations shall revert from Agenda Page 250
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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.
3. Representations and Warranties. The PPA Seller and the PPA Buyer represent and warrant to Financing Party, as of the Assignment Agreement Effective Date, that (a) the PPA is in full force and effect; and (b) no event or circumstance exists (or would exist with the passage of time or the giving of notice) that would give either of them the right to terminate the PPA or suspend performance thereunder. Financing Party represents and warrants to PPA Seller, as of the Assignment Agreement Effective Date, that the Guarantor has a Required Credit Rating.
4. 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 Article 9 of the PPA and to the addresses of each of PPA Seller and PPA Buyer specified in the PPA. PPA Buyer agrees to notify Financing Party of any updates to such notice information, including any updates provided by PPA Seller to PPA Buyer. 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 Notice Information to be added by Financing Party]
5. Costs and Expenses. Each Party will pay its own costs and expenses (including legal fees) incurred in connection with this Assignment Agreement and as a result of the negotiation, preparation, and execution of this Assignment Agreement; provided, however, Buyer shall reimburse Seller for all out-of-pocket expenses reasonably incurred by Seller in excess of five thousand dollars ($5,000) but not to exceed a total reimbursement of ten thousand dollars ($10,000) for the term of this Assignment Agreement; provided further prior to any such reimbursement, Seller shall send Buyer an accounting of the out-of-pocket expenses reasonably incurred within 30 days following the end of each quarter in a calendar year.
6. Miscellaneous. Section 13.2 (Buyer’s Representations and Warranties), Article 18 (Confidential Information), Sections 19.5 (Severability), 19.7 (Counterparts), 19.2 (Amendments), 19.4 (No Agency, Partnership, Joint Venture or Lease), 19.6 (Mobile-Sierra),
19.8 (Electronic Delivery), 19.9 (Binding Effect) and 19.10 (No Recourse to Members of Buyer) of the PPA are incorporated by reference into this Agreement, mutatis mutandis, as if fully set forth herein. For avoidance of doubt, and notwithstanding anything to the contrary in this Assignment Agreement: (i) except to the limited extent specified in Section 1(h) of this Assignment Agreement, nothing in this Assignment Agreement shall modify any provision of the PPA; (ii) PPA Buyer remains obligated to perform all its obligations under the PPA notwithstanding the limited assignment under this Assignment Agreement (including without limitation any such obligations not timely performed by Financing Party under this Assignment Agreement), and any failure by Financing Party to make payments to PPA Seller as provided in this Assignment Agreement when due under the PPA shall be a Buyer Event of Default under the PPA if not cured within the applicable cure period specified in Section 11.1(a)(i) of the PPA; (iii) this Assignment Agreement shall not purport to convey or otherwise allege any right of PPA Buyer or Financing Party to make any prepayment to Seller under the PPA or to file or impose any lien on the Facility; and (iv) neither Financing Party nor PPA Buyer shall make any assignment of its rights or delegation of its obligations under this Assignment Agenda Page 251
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Agreement without the prior written consent of PPA Seller, which it may withhold in its sole discretion.
7. U.S. Resolution Stay Provisions. If each of the Parties hereto have not adhered to the ISDA 2018 U.S. Resolution Stay Protocol, as published by the International Swaps and Derivatives Association, Inc. as of July 31, 2018 (the “ISDA U.S. QFC Protocol”), the terms of the ISDA U.S. QFC Protocol shall be incorporated into and form a part of this Assignment Agreement. For purposes of incorporating the ISDA U.S. QFC Protocol, each Party shall be deemed to have the same status as “Regulated Entity” and/or “Adhering Party” (as such terms are defined therein) applicable to it under the ISDA U.S. QFC Protocol and this Assignment Agreement shall be deemed to be a “Protocol Covered Agreement” (as defined therein).
8. 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 California, without regard to principles of conflicts of law provisions that would direct the application of another jurisdiction’s laws.
b) Jurisdiction. Each Party submits to the exclusive jurisdiction of the federal courts of the United States, or the courts of the State of California, sitting in the City and County of Los Angeles, California.
c) Waiver of Right to Trial by Jury. TO THE EXTENT PERMITTED BY LAW,
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 252
Exhibit U – 6
IN WITNESS WHEREOF, the Parties have executed this Assignment Agreement effective as of the date first set forth above.
ARLINGTON ENERGY CENTER II, LLC
a Delaware limited liability company
By:
Name:
Title:
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA,
By:
Name:
Title:
J. ARON & COMPANY LLC
By:
Name:
Title:
Execution and delivery of the foregoing Assignment Agreement is hereby approved.
CALIFORNIA COMMUNITY CHOICE FINANCING AUTHORITY
By:
Name:
Title:
Agenda Page 253
Exhibit U – 7
Appendix 1
Assigned Rights and Obligations
“PPA” means that certain Second Amended and Restated Renewable Power Purchase Agreement dated [ ], 2022, by and between Clean Power Alliance of Southern California, a California joint powers authority, and Arlington Energy Center II, LLC, a Delaware limited liability company, as amended from time to time.
“Assignment Period” means the period beginning on [ ] and extending until [ ], provided that in no event shall the Assignment Period extend past the earlier of (i) the termination of the Assignment Period pursuant to Section 2 of the Assignment Agreement and (ii) the end of the Delivery Term under the PPA; provided that applicable provisions of this Agreement shall continue in effect after termination of the Assignment Period to the extent necessary to enforce or complete, duties, obligations or responsibilities of the Parties arising prior to the termination.
Assigned Product: PV Energy and Green Attributes (PCC1 RECs).
Further Information: PPA Seller shall transfer the WREGIS Certificates pursuant to Section
4.10 of the PPA, provided that the transferee of such WREGIS Certificates may be changed from time to time in accordance with the written instructions of both Financing Party and PPA Buyer upon twenty (20) Business Days’ notice, which change shall be effective as of the first day of the next calendar month after such notice period has expired, unless otherwise agreed. All Assigned Product delivered by PPA Seller to Financing Party shall be a sale made at wholesale, with Financing Party reselling all such Assigned Product.
Agenda Page 254
Exhibit U – 8
Appendix 2
Form of Guaranty
, 2022
NAME
ADDRESS
Attention:
Ladies and Gentlemen:
For value received, [ ] (the “Guarantor”), a corporation duly organized under the laws of the State of [ ], hereby unconditionally guarantees the prompt and complete payment when due, whether by acceleration or otherwise, of all obligations and liabilities, whether now in existence or hereafter arising, of [ ], a subsidiary of the Guarantor and a [ ] duly organized under the laws of the [ ] (the “Company”), to COUNTERPARTY NAME (the “Counterparty”) arising out of or under the Limited Assignment Agreement among the Company, the Counterparty and Clean Power Alliance of Southern California dated as of [ ], 2022. This Guaranty is one of payment and not of collection.
The Guarantor hereby waives notice of acceptance of this Guaranty and notice of any obligation or liability to which it may apply, and waives presentment, demand for payment, protest, notice of dishonor or non-payment of any such obligation or liability, suit or the taking of other action by Counterparty against, and any other notice to, the Company, the Guarantor or others.
Counterparty may at any time and from time to time without notice to or consent of the Guarantor and without impairing or releasing the obligations of the Guarantor hereunder: (1) agree with the Company to make any change in the terms of any obligation or liability of the Company to Counterparty, (2) take or fail to take any action of any kind in respect of any security for any obligation or liability of the Company to Counterparty, (3) exercise or refrain from exercising any rights against the Company or others, or (4) compromise or subordinate any obligation or liability of the Company to Counterparty including any security therefor. Any other suretyship defenses are hereby waived by the Guarantor.
This Guaranty shall continue in full force and effect until the opening of business on the fifth business day after Counterparty receives written notice of termination from the Guarantor. It is understood and agreed, however, that notwithstanding any such termination this Guaranty shall continue in full force and effect with respect to the obligations and liabilities set forth above which shall have been incurred prior to such termination.
The Guarantor further agrees that this Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the guaranteed obligations, or interest thereon is rescinded or must otherwise be restored or returned by the Counterparty upon the bankruptcy, insolvency, dissolution or reorganization of the Company. No failure on the part of the Counterparty to exercise, and no delay in exercising, Agenda Page 255
Exhibit U – 9
any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Counterparty of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power.
No term or provision of this Guaranty shall be amended, modified, altered, waived or supplemented except in a writing signed by Guarantor and Counterparty.
The Guarantor hereby represents as follows:
(a) The Guarantor is duly organized, validly existing, and in good standing under the laws of the State of [ ] and has full power and authority to execute and deliver this Guaranty.
(b) The execution and delivery of this Guaranty have been and remain duly authorized by all necessary action and do not contravene any provision of the Guarantor's certificate of incorporation or by-laws, as amended to date, or any law, regulation, decree, order, judgment, resolution or any contractual restriction binding on the Guarantor or its assets that could affect, in a materially adverse manner, the ability of the Guarantor to perform any of its obligations hereunder.
(c) All consents, licenses, clearances, authorizations, and approvals of, and registration and declarations with, any governmental or regulatory authority necessary for the due execution and delivery of this Guaranty have been obtained and remain in full force and effect and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental or regulatory authority is required in connection with the execution or delivery of this Guaranty.
This Guaranty constitutes the legal, valid, and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with all of its terms and conditions (subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally). The enforceability of the Guarantor’s obligations is also subject to the effect of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
The Guarantor may not assign its rights nor delegate its obligations under this Guaranty, in whole or in part, without prior written consent of the Counterparty, and any purported assignment or delegation absent such consent is void, except for (i) an assignment and delegation of all of the Guarantor’s rights and obligations hereunder in whatever form the Guarantor determines may be appropriate to a partnership, corporation, trust or other organization in whatever form that succeeds to all or substantially all of the Guarantor’s assets and business and that assumes such obligations by contract, operation of law or otherwise, and the Guarantor may transfer this Guaranty or any interest or obligation of the Guarantor in or under this Guaranty, or any property securing this Guaranty, to another entity as transferee as part of the resolution, restructuring or reorganization of the Guarantor upon or following the Guarantor becoming subject to a receivership, insolvency, liquidation, resolution or similar proceeding. Upon any such delegation and assumption or transfer of obligations, the Guarantor shall be relieved of and fully Agenda Page 256
Exhibit U – 10
discharged from all obligations hereunder, whether such obligations arose before or after such delegation and assumption or transfer.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
GUARANTOR AGREES TO THE EXCLUSIVE JURISDICTION OF COURTS
LOCATED IN THE STATE OF NEW YORK, UNITED STATES OF AMERICA, OVER ANY DISPUTES ARISING UNDER OR RELATING TO THIS GUARANTY.
In the event the Guarantor becomes subject to a proceeding under the Federal Deposit Insurance Act or Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together, the "U.S. Special Resolution Regimes"), the transfer of this Guaranty, and any interest and obligation in or under, and any property securing, this Guaranty, from the Guarantor will be effective to the same extent as the transfer would be effective under such U.S. Special Resolution Regime if this Guaranty, and any interest and obligation in or under this Guaranty, were governed by the laws of the United States or a state of the United States.
In the event the Company or the Guarantor, or any of their affiliates, becomes subject to a U.S. Special Resolution Regime, default rights against the Company or the Guarantor with respect to this Guaranty are permitted to be exercised to no greater extent than such default rights could be exercised under such U.S. Special Resolution Regime if this Guaranty was governed by the laws of the United States or a state of the United States.
Very truly yours,
[ ]
By:
Authorized Officer
Agenda Page 257
Agenda Page 258
Exhibit W – 1
EXHIBIT W
Force Majeure and/or Development Cure Period Claim Form Instructions
A. Please review Article 10 and Exhibit B (if applicable) of the Power Purchase Agreement prior to filling out the form.
B. Fill out the form completely and return to your assigned Contract Manager at CPA.
Seller: [Name] Project: [Name]
Current Guaranteed Construction Start Date: [Date]
New Guaranteed Construction Start Date (if Seller’s claims are validated in full): [Date] Guaranteed Commercial Operation Date: [Date]
New Guaranteed Commercial Operation Date (if Seller’s claims are validated in full): [Date]
1. Please describe the claimed Force Majeure Event or other event giving rise to the claimed Development Cure Period delay(s) (the “Claimed Event”), including its cause, date of commencement and date it ended or is anticipated to end.
2. Please specify the extent of the delay or prevented performance caused by the Claimed Event, including the relief claimed thereby. Describe how the claimed relief was calculated/determined, accounting for individual developments causing such delay or prevented performance.
3. With respect to a Claimed Event other than a Force Majeure Event, please describe the commercially reasonable efforts taken by Seller to prevent such event.
4. Please describe the commercially reasonable efforts taken to mitigate the delays or nonperformance caused by the Claimed Event and specify how such efforts reduced the delay days or nonperformance that would otherwise have occurred absent such mitigation.
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Exhibit W – 2
5. Please attach supporting documentation, including without limitation:
Force Majeure notices or other correspondence received from suppliers and/or contractors that describe the basis for and extent of the Claimed Event.
Documentation, contracts, and/or correspondence with suppliers and/or contractors evidencing the claiming Party’s mitigation efforts.
Project schedule and/or GANNT charts that demonstrate the effect of the Claimed Event on the Guaranteed commercial Operation Date.
By signing this Claim form, I attest and affirm that I am authorized to sign this form on behalf of the Seller, that I have reviewed this Claim, including any attached documentation, and that the facts and statements made in this Claim are true and correct to the best of my knowledge.
Signed:
Name:
Title:
Date:
Agenda Page 260
RENEWABLE POWER PURCHASE AGREEMENT
COVER SHEET
Seller: Geysers Power Company, LLC, a Delaware limited liability company Buyer: Clean Power Alliance of Southern California, a California joint powers authority Description of Facility: As set forth in Exhibit A.
Guaranteed Commencement Date: 6/1/2027
Delivery Term: Eleven (11) Contract Years
Delivery Point: CAISO Grid (with financial settlement at NP-15 EZ Gen Hub) Contract Quantity: 100 MW
Designated RA Capacity: 100 MW (subject to adjustment pursuant to Section 3.5) Delivery Term Expected Energy:
Contract Year Expected Energy (MWh)
1 876,000
2 876,000
3 876,000
4 876,000
5 876,000
6 876,000
7 876,000
8 876,000
9 876,000
10 876,000
11 511,000
Renewable Rate:
Contract Year Contract Price
($/MWh)
1 – 11 /MWh
Capacity Rate:
ITEM 10 - ATTACHMENT 4
Agenda Page 261
Contract Year Contract Price
($/kW-mo.)
1 – 11 kW-month
Monthly RA Capacity Payment: Capacity Rate x Designated RA Capacity x 1,000 = month.
Product: The Product includes each of the following categories, all as associated with or attributable to the Contract Quantity throughout the Delivery Term.
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
Scheduling Coordinator: Seller or its designee
Performance Security:
Event Security Amount Timing for Posting
At all applicable times that Seller is
Investment Grade:
No later than one (1) year after
the Effective Date
If and when Seller falls below
Investment Grade:
Within ten (10) Business Days
of the applicable downgrade
event.
Agenda Page 262
TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS ........................................................................................................... 1
1.1 Contract Definitions. ............................................................................................... 1
1.2 Rules of Interpretation. ......................................................................................... 16 ARTICLE 2 TERM; CONDITIONS PRECEDENT .................................................................... 17
2.1 Contract Term. ...................................................................................................... 17
2.2 Conditions Precedent ............................................................................................ 17 ARTICLE 3 PURCHASE AND SALE ........................................................................................ 17
3.1 Purchase and Sale of Product ................................................................................ 17
3.2 Compensation for Energy and Green Attributes ................................................... 18
3.3 Compensation for Capacity Attributes.................................................................. 18
3.4 Future Environmental Attributes .......................................................................... 18
3.5 Sale of Capacity Attributes ................................................................................... 19
3.6 Replacement RA and Resource Adequacy Failure. .............................................. 20
3.7 CEC Certification and Verification ...................................................................... 20
3.8 Eligibility .............................................................................................................. 20
3.9 California Renewables Portfolio Standard ............................................................ 21
3.10 Compliance Expenditure Cap ............................................................................... 21 ARTICLE 4 OBLIGATIONS AND DELIVERIES ..................................................................... 22
4.1 Delivery................................................................................................................. 22
4.2 Scheduling Coordinator Responsibilities. ............................................................. 22
4.3 Forecasting ............................................................................................................ 23
4.4 Curtailment ........................................................................................................... 23
4.5 Reduction in Energy Delivery Obligation ............................................................ 23
4.6 Guaranteed Energy Production ............................................................................. 24
4.7 WREGIS ............................................................................................................... 24 ARTICLE 5 TAXES ..................................................................................................................... 26
5.1 Allocation of Taxes and Charges .......................................................................... 26
5.2 Cooperation. .......................................................................................................... 26 ARTICLE 6 MAINTENANCE OF THE FACILITY .................................................................. 26
6.1 Maintenance of the Facility. ................................................................................. 26
6.2 Maintenance of Health and Safety ........................................................................ 26 ARTICLE 7 METERING ............................................................................................................. 27
7.1 Metering ................................................................................................................ 27
7.2 Meter Verification ................................................................................................. 27 Agenda Page 263
TABLE OF CONTENTS
(continued)
Page
ii
ARTICLE 8 INVOICING AND PAYMENT; CREDIT .............................................................. 27
8.1 Invoicing ............................................................................................................... 27
8.2 Payment................................................................................................................. 27
8.3 Books and Records ............................................................................................... 28
8.4 Payment Adjustments; Billing Errors ................................................................... 28
8.5 Billing Disputes .................................................................................................... 28
8.6 Netting of Payments .............................................................................................. 29
8.7 [Intentionally Omitted] ......................................................................................... 29
8.8 Seller’s Performance Security............................................................................... 29
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral ................. 29 ARTICLE 9 NOTICES ................................................................................................................. 30
9.1 Addresses for the Delivery of Notices .................................................................. 30
9.2 Acceptable Means of Delivering Notice ............................................................... 30 ARTICLE 10 FORCE MAJEURE ............................................................................................... 30
10.1 Definition. ............................................................................................................. 30
10.2 No Liability If a Force Majeure Event Occurs ..................................................... 31
10.3 Notice .................................................................................................................... 32
10.4 Termination Following Force Majeure Event....................................................... 32 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ....................................................... 32
11.1 Events of Default .................................................................................................. 32
11.2 Remedies; Declaration of Early Termination Date ............................................... 34
11.3 Termination Payment ............................................................................................ 35
11.4 Notice of Payment of Termination Payment ........................................................ 35
11.5 Disputes With Respect to Termination Payment .................................................. 35
11.6 Limitation on Seller’s Ability to Make or Agree to Third-Party Sales from the Facility after Early Termination Date ............................................................. 35
11.7 Rights And Remedies Are Cumulative ................................................................. 36
11.8 Mitigation .............................................................................................................. 36 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES........... 36
12.1 No Consequential Damages .................................................................................. 36
12.2 Waiver and Exclusion of Other Damages ............................................................. 36 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY ............................ 37
13.1 Seller’s Representations and Warranties .............................................................. 37
13.2 Buyer’s Representations and Warranties. ............................................................. 38
13.3 General Covenants ................................................................................................ 39 Agenda Page 264
TABLE OF CONTENTS
(continued)
Page
iii
ARTICLE 14 ASSIGNMENT ...................................................................................................... 40
14.1 General Prohibition on Assignments .................................................................... 40
14.2 Collateral Assignment ........................................................................................... 40
14.3 Permitted Assignment by Seller............................................................................ 40
14.4 Buyer Financing Assignment. ............................................................................... 40 ARTICLE 15 DISPUTE RESOLUTION ..................................................................................... 41
15.1 Governing Law ..................................................................................................... 41
15.2 Dispute Resolution ................................................................................................ 41
15.3 Attorneys’ Fees ..................................................................................................... 41 ARTICLE 16 INDEMNIFICATION ............................................................................................ 41
16.1 Indemnification. .................................................................................................... 41
16.2 Claims ................................................................................................................... 42
16.3 Indemnities for Failure to Deliver Designated RA Capacity ................................ 42 ARTICLE 17 INSURANCE ......................................................................................................... 43
17.1 Insurance. .............................................................................................................. 43 ARTICLE 18 CONFIDENTIAL INFORMATION ..................................................................... 44
18.1 Definition of Confidential Information ................................................................. 44
18.2 Duty to Maintain Confidentiality .......................................................................... 44
18.3 Irreparable Injury; Remedies ................................................................................ 45
18.4 Further Permitted Disclosure ................................................................................ 45
18.5 Press Releases ....................................................................................................... 45 ARTICLE 19 MISCELLANEOUS .............................................................................................. 45
19.1 Entire Agreement; Integration; Exhibits ............................................................... 45
19.2 Amendments ......................................................................................................... 46
19.3 No Waiver ............................................................................................................. 46
19.4 No Agency, Partnership, Joint Venture or Lease .................................................. 46
19.5 Severability ........................................................................................................... 46
19.6 Mobile-Sierra ........................................................................................................ 46
19.7 Counterparts .......................................................................................................... 46
19.8 Electronic Delivery ............................................................................................... 47
19.9 Binding Effect ....................................................................................................... 47
19.10 No Recourse to Members of Buyer ...................................................................... 47
19.11 Forward Contract. ................................................................................................. 47
19.12 Change in Electric Market Design ........................................................................ 47
19.13 Further Assurances................................................................................................ 48 Agenda Page 265
TABLE OF CONTENTS
(continued)
Page
iv
Exhibits:
Exhibit A Description of the Facility
Exhibit B Average Expected Energy
Exhibit C Guaranteed Energy Production Damages Calculation Exhibit D Form of Assignment Agreement
Exhibit E Form of Letter of Credit
Exhibit F Form of Replacement RA Notice
Exhibit G Notices
Exhibit H Form of Consent to Collateral Assignment
Exhibit I CPM Adjustment Factors
Agenda Page 266
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 owns and operates the Facility; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:
ARTICLE 1
DEFINITIONS
1.1 Contract Definitions. The following terms, when used herein with initial capitalization, shall have the meanings set forth below:
“AC” means alternating current.
“Accepted Compliance Costs” has the meaning set forth in Section 3.10. “Adjusted Energy Production” has the meaning set forth in Exhibit C. “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. “Assignment Agreement” has the meaning set forth in Section 14.4. “Availability Incentive Payments” has the meaning set forth in the CAISO Tariff.
Agenda Page 267
2 “Average Day-Ahead Market LMP” shall mean for any given day, an amount that is equal to the average of each of the 24-hourly Day-Ahead Locational Marginal Prices for the NP15 EZ Gen Hub, as posted and updated by the CAISO.
“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 14.4. “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 4.7(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 produced by the Facility.
“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 Period. “CAISO Grid” has the same meaning as “CAISO Controlled Grid” 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 Facility Energy delivered by Seller to any CAISO-administered market, including costs and revenues associated with CAISO dispatches, for each applicable Settlement Period.
Agenda Page 268
3 “CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC.
“California Renewables Portfolio Standard” or “RPS” means the renewable energy program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. “Capacity Attributes” means any and all of the following:
(a) any current or future defined characteristics, certificates, tags, credits, ancillary service attributes, or accounting constructs, including any accounting construct counted toward any Resource Adequacy Requirements, attributed to or associated with the amount of power that the Facility can generate and deliver to the Delivery Point under this Agreement at a particular moment and that can be purchased, sold or conveyed under CAISO or CPUC market rules; (b) resource adequacy attributes, as may be identified from time to time by the CPUC, CAISO, or other Governmental Authority having jurisdiction, that can be counted toward RAR;
(c) resource adequacy attributes or other locational attributes for the Facility related to a Local Capacity Area, as may be identified from time to time by the CPUC, CAISO or other Governmental Authority having jurisdiction, associated with the physical location or point of electrical interconnection of the Facility within the CAISO-Controlled Grid, that can be counted toward a Local RAR; and
(d) flexible capacity resource adequacy attributes for the Facility, including, without limitation, the amount of EFC as may be identified from time to time by the CPUC, CAISO, or other Governmental Authority having jurisdiction, that can be counted toward Flexible RAR; “Capacity Rate” has the meaning set forth on the Cover Sheet. “CEC” means the California Energy Commission or its successor agency. “CEC Certification and Verification” means that the CEC has certified that the Facility is an Eligible Renewable Energy Resource for purposes of the California Renewables Portfolio Standard and that all Facility Energy delivered to the Delivery Point qualifies as generation from an Eligible Renewable Energy Resource.
“Commencement Date” has the meaning set forth in Section 2.2. “Compliance Actions” has the meaning set forth in Section 3.10. “Compliance Expenditure Cap” has the meaning set forth in Section 3.10.
Agenda Page 269
4 “Confidential Information” has the meaning set forth in Section 18.1. “Contract Quantity” means the amount of Product (in MWs) set forth on the Cover Sheet, which Seller has committed to deliver to the Delivery Point on behalf of Buyer pursuant to this Agreement.
“Contract Price” has the meaning set forth on the Cover Sheet. “Contract Term” has the meaning set forth in Section 2.1. “Contract Year” means a period of twelve (12) consecutive months; provided, the final Contract Year shall end December 31, 2037 regardless of the first day of such Contract Year (i.e. the final Contract Year will be seven (7) months if the Commencement Date occurs on June 1)S.
The first Contract Year shall commence on the Commencement Date and each subsequent Contract Year shall commence on the anniversary of the Commencement Date. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third -party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace the Agreement; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating the Agreement. “Cover Sheet” means the cover sheet to this Agreement, which is incorporated into this Agreement.
“CPM Adjustment Factor” means, for any RA Shortfall Month, the percentage for the corresponding calendar month set forth in Exhibit I.
“CPM Price” has the meaning set forth in Section 3.6(c). “CPM Soft Offer Cap” has the meaning set forth in the CAISO Tariff. “CPUC” means the California Public Utilities Commission, or successor entity. “Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P or Moody’s. If ratings by S&P and Moody’s are not equivalent, the lower rating shall apply.
“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 to satisfy the Contract Quantity, but that was not produced and delivered to the Delivery Point because of a Curtailment Order. “Curtailment Order” means any of the following:
Agenda Page 270
5 (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 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. “Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Defaulting Party” has the meaning set forth in Section 11.1(a). “Deficient Month” has the meaning set forth in Section 4.7(e). “Delivery Point” has the meaning set forth in the Cover Sheet. “Delivery Term” shall mean the period of Contract Years set forth on the Cover Sheet beginning on the Commencement Date, unless terminated earlier in accordance with the terms and conditions of this Agreement.
“Designated RA Capacity” shall be equal to, with respect to any particular Showing Month of the Delivery Period, the Contract Quantity of Product for such Showing Month, including the amount of Contract Quantity that Seller has elected to provide as Replacement RA.
The Designated RA Capacity shall be subject to adjustment for Force Majeure Events or Curtailment Orders as further detailed in Section 3.5.
“Disclosing Party” has the meaning set forth in Section 18.2. “Early Termination Date” has the meaning set forth in Section 11.2.
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6 “Effective Date” has the meaning set forth on the Preamble. “Effective Flexible Capacity” or “EFC” means the flexible capacity of a resource that can be counted towards an LSE’s Flexible Capacity Requirement obligation, as identified from time to time by the Tariff, the Resource Adequacy Rulings, or other Governmental Authority having jurisdiction.
“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 shall include any other electrical energy products that may be developed or evolve from time to time during the Contract Term, including reactive power. “Energy Replacement Damages” has the meaning set forth in Section 4.6. “Event of Default” has the meaning set forth in Section 11.1. “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 one or more of the geothermal generating facilities described on the Cover Sheet and in Exhibit A, from which the Contract Quantity will be delivered. “Facility Energy” means the Energy generated and metered from the Facility with associated Green Attributes that is scheduled and delivered to the Delivery Point on Buyer’s behalf, not to exceed 100 MWh AC in any hour.
“Facility Meter” means the CAISO Approved Meter that will measure all Facility Energy.
Without limiting Seller’s obligation to deliver Facility Energy to the Delivery Point, the Facility Meter will be located, and Facility Energy will be measured, at the high voltage side of the main step-up transformer.
“FCR Attributes” means, with respect to a Unit, the pro rata share of FCR attributes associated with the Designated RA Capacity that can be counted toward an LSE’s FCR, as they are identified from time to time by the Resource Adequacy Rulings, the Tariff, or other Governmental Authority having jurisdiction that can be counted toward FCR and are consistent with the operational limitations and physical characteristics of such Unit. For example, if Seller designates a Unit which has an overall Unit NQC of 200 MW and Unit EFC of 200 MW, Seller’s allocation of FCR Attributes associated with the 100 MW Contract Quantity shall be 50% of the Unit EFC (50/100). If a regulatory change pursuant to Section 19.12 causes the same Unit with a 200 MW Unit NQC to eligible for only 100 MW of Unit EFC, then Buyer’s allocation of FCR Attributes would be reduced on a pro rata basis to 50 MW (i.e. 50% of the Unit’s 100 MW of Unit EFC).
“FCR Showings” means the FCR compliance showings (or similar or successor showings) an LSE is required to make to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) Agenda Page 272
7 pursuant to the Resource Adequacy Rulings and the Tariff, or to an LRA having jurisdiction over the LSE.
“FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“Force Majeure Event” has the meaning set forth in Section 10.1. “Forced Facility Outage” means an unexpected failure of one or more components of the Facility that prevents Seller from generating Energy or making Facility Energy available at the Delivery Point and that is not the result of a Force Majeure Event. “Forward Certificate Transfers” has the meaning set forth in Section 4.7(a). “Full Capacity Deliverability Status” or “FCDS” has the meaning set forth in the CAISO Tariff.
“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 (i) Tax Credits associated with the construction or operation of the Facility, (ii) tax benefits, credits or offsets associated with the development of a federal carbon tax, or (iii) any 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., NP-15), all of which should be calculated for the remaining Contract Term, and include the value of Green Attributes and Capacity 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 Agenda Page 273
8 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 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. “Guaranteed Energy Production” has the meaning set forth in Section 4.6. “Indemnified Party” has the meaning set forth in Section 16.1. “Indemnifying Party” has the meaning set forth in Section 16.1. “Inter-SC Trade” has the meaning set forth in the CAISO Tariff. “Interconnection Agreement” means the interconnection agreements 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 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.
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9 “Investment Grade” means, with respect to Seller, a credit rating of BBB- or higher, and a stable or positive rating outlook status, from the Kroll Bond Rating Agency (Kroll). “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.
“kWh” means a kilowatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“LAR” means local area reliability, which is any program of localized resource adequacy requirements established for jurisdictional LSEs by the CPUC pursuant to the Resource Adequacy Rulings or as implemented in the Tariff. LAR may also be known as local resource adequacy, local RAR, or local capacity requirement in other regulatory proceedings or legislative actions. “LAR Attributes” means, with respect to a Unit, any and all resource adequacy attributes (or other locational attributes related to system reliability), as they are identified as of the Effective Date by the Resource Adequacy Rulings, CAISO, or other Governmental Authority having jurisdiction, associated with the physical location or point of electrical interconnection of the Unit within the CAISO Control Area, that can be counted toward LAR and are consistent with the operational limitations and physical characteristics of such Unit, but exclusive of any RAR Attributes which are not associated with where in the CAISO Control Area the Unit is physically located or electrically interconnected.
“LAR Showings” means the LAR compliance showings (or similar or successor showings) an LSE is required to make to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the Resource Adequacy Rulings, or to an LRA having jurisdiction over the LSE.
“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 senior or subordinated construction, interim, back leverage or long-term debt, equity or tax equity financing or refinancing for or in connection with the development, construction, purchase, installation or operation of the Facility, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including tax equity), public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or Agenda Page 275
10 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 E.
“Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the State of California. “Local Capacity Area Resources” has the meaning set forth in the CAISO Tariff. “Locational Marginal Price” or “LMP” has the meaning set forth in the CAISO Tariff. “Losses” means, 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., NP-15), all of which should be calculated for the remaining Contract Term and must include the value of Green Attributes, Capacity Attributes.
“Lost Output” has the meaning set forth in Section 4.6. “LRA” has the meaning set forth in the Tariff.
“LSE” means load serving entity.
“Milestones” means the development activities for significant permitting, interconnection, financing and construction milestones set forth on the Cover Sheet. “Monthly RA Capacity Payment” has the meaning set forth in the Cover Sheet. “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.
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11 “MWh” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“Net Qualifying Capacity” 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).
“Notification Deadline” means fifteen (15) Business Days before the relevant deadlines for the corresponding RAR Showings, LAR Showings and/or FCR Showings for the applicable Showing Month.
“NP-15” means the Existing Zone Generation Trading Hub for Existing Zone region NP15 as set forth in the CAISO Tariff.
“Party” has the meaning set forth in the Preamble.
“Performance Measurement Period” means each Contract Year. “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 (on a consolidated basis with its Affiliates) 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 (failing such operations experience) 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, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“Portfolio Content Category 1” or “PCC1” means any Renewable Energy Credit associated with the generation of electricity from an Eligible Renewable Energy Resource consisting of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(1), as may be amended from time to time or as further defined or supplemented by Law. “Product” has the meaning set forth on the Cover Sheet.
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12 “Prudent Operating Practices” 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 grid-interconnected, utility-scale geothermal 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.
“RA Capacity” means the qualifying and deliverable capacity of a Facility for RAR and LAR purposes for the Delivery Term, as determined by the CAISO, or other Governmental Authority authorized to make such determination under Applicable Laws. “RA Deficiency Amount” means the liquidated damages payment that Seller shall pay to Buyer for an applicable RA Shortfall Month as calculated in accordance with Section 3.6(c). “RA Guarantee Date” means the Guaranteed Commencement Date. “RA Shortfall Month” means, for purposes of calculating an RA Deficiency Amount under Section 3.6(c), any month during the Delivery Term during which the Designated RA Capacity included in the Showing Month for Buyer was less than the Contract Quantity of the Facility for such month.
“RAR” or “Resource Adequacy Requirements” means the resource adequacy requirements, exclusive of LAR and FCR, established for LSEs by the CPUC pursuant to the Resource Adequacy Rulings, by the CAISO under the Tariff, or by an LRA or other Governmental Authority having jurisdiction.
“RAR Showings” means the RAR compliance showings (or similar or successor showings) an LSE is required to make to the CPUC (and/or, to the extent authorized by the CPUC, to the CAISO), pursuant to the Tariff or Resource Adequacy Rulings, or to an LRA having jurisdiction.
“RAR Attributes” means, with respect to a Unit, any and all resource adequacy attributes, as they are identified as of the Effective Date by the Tariff, the Resource Adequacy Rulings, LRA, or any Governmental Authority having jurisdiction, that can be counted toward RAR and are consistent with the operational limitations and physical characteristics of such Unit, exclusive of any LAR Attributes or FCR Attributes.
“Real-Time Market” has the meaning set forth in the CAISO Tariff.
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13 “Receiving Party” has the meaning set forth in Section 18.2. “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 Rate” has the meaning set forth in the Cover Sheet. “Replacement Energy” has the meaning set forth in Exhibit C. “Replacement Green Attributes” has the meaning set forth in Exhibit C. “Replacement Product” has the meaning set forth in Exhibit C. “Replacement RA” means Capacity Attributes sufficient to meet Buyer’s RAR Showing, and LAR Showing and FCR Showing, if applicable, in the RA Shortfall Month. “Replacement Unit” means a generating unit(s) meeting the requirements specified in Section 3.6(a).
“Requested Confidential Information” has the meaning set forth in Section 18.2. “Requested Party’s Indemnified Parties” has the meaning set forth in Section 18.2. “Resource Adequacy Resource” shall have the meaning used in Resource Adequacy Rulings.
“Resource Adequacy Rulings” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024, 14-06-050, 15-06-063, 16-06-045, 17-06-027, 18- 06-030, 18-06-031, 19-02-022, 19-06-026, 19-10-021, 20-06-002, 20-06-028, and any other existing or subsequent ruling or decision, or any other resource adequacy laws, rules or regulations enacted, adopted or promulgated by any applicable LRA or Governmental Authority, however described, as such decisions, rulings, Laws, rules or regulations may be amended or modified from time-to-time throughout the Contract Term.
“S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of S&P Global Inc.) or its successor.
“Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” has a corollary meaning.
“Scheduling Coordinator” or “SC” means an entity certified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff for the purposes of undertaking the functions specified in “Responsibilities of a Scheduling Coordinator,” of the CAISO Tariff, as amended from time to time.
“Security Interest” has the meaning set forth in Section 8.9.
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14 “Seller” has the meaning set forth on the Cover Sheet. “Seller’s WREGIS Account” has the meaning set forth in Section 4.7(a). “Settlement Amount” means the Non-Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Party. If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be zero dollars ($0). The Settlement Amount does not include consequential, incidental, punitive, exemplary or indirect or business interruption damages. “Settlement Period” means for all CAISO transactions, the period beginning at the first hour of a 24-hour period and ending at the last hour of a 24-hour period. “Settlement Point” has the same meaning as Delivery Point, set forth in Exhibit A. “Showing Month” shall be the calendar month of the Delivery Term that is the subject of the RA Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the CAISO Tariff. For illustrative purposes only, pursuant to the CAISO Tariff and Resource Adequacy Rulings in effect as of the Effective Date, the monthly RA Compliance Showing made in June is for the Showing Month of August.
“Sites” means the real property on which the Facility is or will be located. “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 Sites; (b) is the lessee or has the option to lease the Sites; 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 Sites.
“Supply Plan” means the supply plans, or similar or successor filings, that each Scheduling Coordinator representing RA Capacity submits to the CAISO, LRA, or other Governmental Authority, pursuant to Applicable Laws, in order for that RA Capacity to count for its RAR Attributes, LAR Attributes, and/or FCR Attributes.
“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.
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15 “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. “Termination Payment” has the meaning set forth in Section 11.3. “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 on the Transmission System. “Transmission System” means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service downstream from the Facility’s point(s) of interconnection.
“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. “Unit” or “Units” shall mean the generation assets described in Article 3 hereof (including any Replacement Units), from which Product is provided by Seller to the Delivery Point on behalf of Buyer.
“Unit EFC” means the Effective Flexible Capacity set by the CAISO for the applicable Unit. To the extent the CAISO creates new categories of flexible capacity during the term of this Agreement and a Unit can count toward such new categories of flexible capacity while operating consistent with the operational limitation and physical characteristics of such Unit, any and all such new categories of flexible capacity shall be deemed to be part of the Effective Flexible Capacity of that Unit.
“Unit NQC” means the Net Qualifying Capacity set by the CAISO for the applicable Unit.
If the CAISO adjusts the Net Qualifying Capacity of a Unit after the Effective Date, then for the period in which the adjustment is effective, the Unit NQC shall be deemed the lesser of (i) the Unit NQC as of the Effective Date, and (ii) the CAISO-adjusted Net Qualifying Capacity. “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 4.7(e).
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16 “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:
(b) 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; (c) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (d) 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; (e) 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;
(f) 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;
(g) a reference to a Person includes that Person’s successors and permitted assigns;
(h) 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;
(i) 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; (j) 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;
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17 (k) references to any amount of money shall mean a reference to the amount in United States Dollars;
(l) the expression “and/or” when used as a conjunction shall connote “any or all of”;
(m) 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
(n) 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, 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.
2.2 Conditions Precedent. The Delivery Term shall not commence until Seller completes to Buyer’s reasonable satisfaction each of the following conditions, and the Commencement Date shall be the date of the last of the following items to occur:
(a) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8; and
(b) Seller has paid Buyer for all amounts owing under this Agreement, if any.
ARTICLE 3
PURCHASE AND SALE
3.1 Purchase and Sale of Product. The Product includes all Facility Energy associated with the Contract Quantity throughout the Delivery Term, together with all associated Green Agenda Page 283
18 Attributes and Capacity Attributes (as further described in Section 3.5). For each hour of the month, Seller shall Schedule to Buyer in the Day-Ahead Market an amount of Energy equal to the forecasted Facility Energy at NP-15 using an Inter-SC Trade. 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 Contract Quantity, and Seller shall supply and deliver to the Delivery Point on behalf of Buyer all the Product produced by or associated with the Contract Quantity. At its sole discretion, Buyer may during the Delivery Term re-sell or use for another purpose all or a portion of the Product; provided, no such resale or use shall relieve Buyer of any of its obligations under this Agreement. Buyer has no obligation to pay Seller for any Green Attributes for which the associated Facility Energy is not or cannot be delivered to the Delivery Point as a result of an outage of the Facility, a Force Majeure Event, or Curtailment.
3.2 Compensation for Energy and Green Attributes. During the Delivery Term, for each MWh of Facility Energy (including Green Attributes) delivered to the Delivery Point on behalf of Buyer, Buyer shall pay Seller the difference of (A) the Renewable Rate, minus (B) the Average Day-Ahead Market LMP; provided, if the foregoing calculation in a given month results in a negative value, then Seller shall pay Buyer the absolute value of such result (which payment may be applied as a credit to Buyer on Seller’s monthly invoice).
3.3 Compensation for Capacity Attributes. During the Delivery Term, Buyer shall make the Monthly RA Capacity Payment to Seller, in arrears, after the applicable Showing Month, in accordance with Article 8; provided, any RA Deficiency Amount for the applicable Showing Month owed pursuant to Section 3.6 shall be applied as a credit to Buyer against the Monthly RA Capacity Payment otherwise owing.
3.4 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. Any such Future Environmental Attributes shall be limited to only those environmental attributes relating to the Contract Quantity that Buyer will receive under this Agreement. Subject to the final sentence of this Section 3.4(a), and Sections 3.4(b) and 3.10,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 Renewable Rate or Capacity Rate. 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 3.4(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 Agenda Page 284
19 and risk of loss mechanisms, and (ii) appropriate allocation of any additional costs, 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.
3.5 Sale of Capacity Attributes.
(a) During the Delivery Term, Seller shall dedicate and convey the Designated RA Capacity to the Delivery Point on behalf of the Buyer. The Designated RA Capacity does not confer to Buyer any right to the electrical output from the Facility, other than the right to include the capacity associated with the Designated RA Capacity associated with the Contract Quantity in RAR Showings, LAR Showings, and FCR Showings, as applicable, and any other capacity or resource adequacy markets or proceedings as specified in this Agreement. Specifically, no energy or ancillary services associated with the Facility is required to be made available to Buyer as part of this Agreement and Buyer shall not be responsible for compensating Seller for Seller’s commitments to the CAISO required in connection with the Designated RA Capacity. Seller retains the right to sell pursuant to the CAISO Tariff any RA Capacity from any Unit within the Facility that is in excess of Seller’s Contract Quantity and any RAR Attributes, LAR Attributes or FCR Attributes not otherwise transferred, conveyed, or sold to the Delivery Point on behalf of Buyer.
(b) Seller shall deliver to the Delivery Point the Capacity Attributes from the Facility in the amount of the applicable Contract Quantity; provided, if, and to the extent that, (i) Units are not available to provide the full amount of the Contract Quantity, and (ii) Seller has given Buyer notice on or before the Notification Deadline, then Seller may provide Replacement RA pursuant to Section 3.6(a) hereof. To the extent that Seller is prevented from delivering Capacity Attributes from the Facility due to a Force Majeure Event or Curtailment Order, Seller shall have the option, but no obligation, to provide Replacement RA; provided, if Seller decides not to provide Replacement RA in such a circumstance, the Designated RA Capacity shall be adjusted downward by an equivalent amount for purposes of determining the applicable Monthly RA Capacity Payment.
(c) Seller represents, warrants and covenants to Buyer that:
(i) Prior to the Commencement Date, Seller has reserved, and has not otherwise used, granted, pledged, assigned or otherwise committed a sufficient amount of the generating capacity of the Facility to provide the Contract Quantity to meet the Resource Adequacy Requirements of, and to confer Capacity Attributes on, Buyer for use during the Delivery Term; and
(ii) Throughout the Delivery Term, Seller will reserve, and will not otherwise use, grant, pledge, assign or otherwise commit a sufficient amount of the generating capacity of the Facility to provide the Contract Quantity to meet the Capacity Attributes of, and to confer Capacity Attributes on, Buyer, free and clear of any claims on such Capacity Attributes by any other entity.
(d) Subject to Section 3.10, if the CAISO, LRA, or other Governmental Authority, defines new or re-defines existing local areas such that there is a change in the quantity Agenda Page 285
20 or characteristics of the LAR Attributes provided by the Facility, then such change will not result in a change in obligations or payments made pursuant to this Agreement.
3.6 Replacement RA and Resource Adequacy Failure.
(a) Replacement RA. If Seller anticipates that it will have any RA Deficiency Amounts in a Showing Month, then Seller may, at no cost to Buyer, provide Buyer with Capacity Attributes from one or more generating units that are capable of providing Replacement RA (“Replacement Units”), with the total amount of Product and Replacement RA provided to Buyer from the Unit and the Replacement Units, respectively, not to exceed an amount equal to the Contract Quantity for the applicable Showing Month; provided, in each case Seller shall notify Buyer of its intent (i) not to provide or (ii) to provide Replacement RA and identify Replacement Units meeting the above requirements no later than the Notification Deadline. Replacement Units shall be capable of delivering Replacement RA that can be applied by Buyer to satisfy its RAR.
Any Replacement RA shall be communicated by Seller to Buyer with product information in a Notice substantially in the form of Exhibit F. If Seller notifies Buyer in writing as to the particular Replacement Units and such Units meet the requirements of this Section 3.6, then such Replacement Units shall be automatically deemed a Unit for purposes of this Agreement for that Showing Month.
(b) RA Deficiency Determination. Notwithstanding Seller’s obligations set forth in Section 3.5 or anything to the contrary herein, for each RA Shortfall Month Seller shall pay to Buyer the RA Deficiency Amount as liquidated damages and/or provide Replacement RA, as set forth in Section 3.6(a), as the sole remedy for the Capacity Attributes that Seller failed to convey to Buyer except as set forth in Section 16.3; provided, in the event of a change of Law implementing an unforced capacity (UCAP) standard applicable to Seller, Section 19.12 shall apply.
(c) RA Deficiency Amount Calculation. For each RA Shortfall Month, Seller shall pay to Buyer the RA Deficiency Amount. The “RA Deficiency Amount” is equal to the product of the difference, expressed in kW, of (i) the Designated RA Capacity, minus (ii) the amount of Capacity Attributes delivered in such Showing Month, multiplied by the CPM Price.
The “CPM Price” is an amount equal to (i) the CPM Soft Offer Cap (or its successor), times (ii) the applicable CPM Adjustment Factor for the applicable RA Shortfall Month; provided, if the CAISO begins using a shaped or weighted price for purposes of setting the CPM Soft Offer Cap, the Parties shall thereafter use the full amount of the CPM Soft Offer Cap (without applying the CPM Adjustment Factor) as the CPM Price for all RA Shortfall Months.
3.7 CEC Certification and Verification. Subject to Section 3.10, Seller shall take all necessary steps including, but not limited to, making or supporting timely filings with the CEC to maintain CEC Certification and Verification for the Facility throughout the Delivery Term, including compliance with all applicable requirements for certified facilities set forth in the current version of the RPS Eligibility Guidebook (or its successor).
3.8 Eligibility. Subject to Section 3.10, 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 Agenda Page 286
21 defined in Public Utilities Code Section 399.12 or Section 399.16; and (ii) the Facility’s output delivered to the Delivery Point on behalf of 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 (and Buyer’s payment obligations hereunder for Product shall not be reduced) if Seller has used commercially reasonable efforts to comply with such change in Law. The term “commercially reasonable efforts” as used in this Section 3.8 means efforts consistent with and subject to Section 3.10.
3.9 California Renewables Portfolio Standard. Subject to Section 3.10, 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.
3.10 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 3.10, including with respect to obtaining, maintaining, conveying or effectuating Buyer’s use of Green Attributes and Capacity Attributes (as applicable), 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 Thousand Dollars ($25,000) per MW of Contract Quantity (“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. (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 3.10 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 (as may be revised and updated by Seller in its reasonable discretion). (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 Agenda Page 287
22 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.
ARTICLE 4
OBLIGATIONS AND DELIVERIES
4.1 Delivery.
(a) Energy. Subject to the provisions of this Agreement, commencing on the Commencement Date through the end of the Contract Term, Seller (or Seller’s designated Scheduling Coordinator) shall Schedule and deliver the Facility Energy to the Delivery Point on behalf of Buyer in accordance with all applicable CAISO requirements. 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. 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. All Green Attributes associated with the Product during the Delivery Term are exclusively dedicated to and vested in Buyer. Seller represents and warrants that Seller holds the rights to all such Green Attributes associated with the Contract Quantity 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. 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.
(c) Capacity Attributes. Seller shall dedicate and convey any and all Capacity Attributes associated with or attributable to the Designated RA Capacity throughout the Delivery Term to Buyer and Buyer shall be given sole title to all such Capacity Attributes in order for Buyer to meet its resource adequacy obligations under any Resource Adequacy Rulings.
4.2 Scheduling Coordinator Responsibilities.
(a) Seller to be Scheduling Coordinator. During the Delivery Term, Seller shall act as Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO to Schedule and deliver the Product to the Delivery Point on behalf of Buyer. Each Party shall perform all scheduling and transmission activities in compliance with (i) the CAISO Tariff, (ii) WECC scheduling practices, and (iii) Prudent Operating Practice.
The Parties agree to communicate and cooperate as necessary in order to address any scheduling or settlement issues as they may arise, and to work together in good faith to resolve them in a manner consistent with the terms of the Agreement.
(b) Delivery of Designated RA Capacity.
(i) Seller shall, on a timely basis, submit, or cause the Unit’s Scheduling Coordinator to submit, Supply Plans to identify and confirm the Designated RA Capacity provided to Buyer for each Showing Month so that the total amount of Designated RA Agenda Page 288
23 Capacity identified and confirmed for such Showing Month equals the Designated RA Capacity, unless specifically requested not to do so by the Buyer. (ii) Seller shall cause the Unit’s Scheduling Coordinator to submit written notification to Buyer, no later than fifteen (15) Business Days before the applicable RAR Showings, LAR Showings and/or FCR Showings deadlines for each Showing Month, that Buyer will be credited with the Designated RA Capacity for such Showing Month in the Unit’s Scheduling Coordinator Supply Plan so that the Designated RA Capacity credited equals the Designated RA Capacity for such Showing Month.
(c) CAISO Costs and CAISO Revenues. As the Scheduling Coordinator for the Facility, Seller shall be responsible for all CAISO Costs and shall be entitled to all CAISO Revenues; provided, any net costs or charges assessed by the CAISO which are due to a Buyer Default shall be Buyer’s responsibility. The Parties agree that any Availability Incentive Payments are for the benefit of Seller and for Seller’s account and that any Non-Availability Charges or other CAISO charges associated with the Facility not providing sufficient Resource Adequacy capacity 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, the cost of such sanctions or penalties arising from the scheduling, outage reporting, or generator operation of the Facility shall be Seller’s responsibility. (d) Future Changes to Scheduling Protocols. During the Delivery Term, the Parties agree to discuss in good faith requested changes by either Party to the CAISO scheduling procedures set forth in this Agreement.