4.10 Capacity Availability Notice. ............................................................................... 33
4.11 Outages. ............................................................................................................... 33 ARTICLE 5 TAXES, GOVERNMENTAL AND ENVIRONMENTAL COSTS .................... 34
5.1 Allocation of Taxes and Charges. ........................................................................ 34
5.2 Cooperation. ......................................................................................................... 35
5.3 Environmental Costs. ........................................................................................... 35 ARTICLE 6 MAINTENANCE AND REPAIR OF THE FACILITY ....................................... 35
6.1 Maintenance of the Facility. ................................................................................ 35
6.2 Maintenance of Health and Safety. ...................................................................... 36
6.3 Shared Facilities. .................................................................................................. 36 ARTICLE 7 METERING ........................................................................................................... 36
7.1 Metering. .............................................................................................................. 36 Agenda Page 285
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7.2 Meter Verification. ............................................................................................... 37 ARTICLE 8 INVOICING AND PAYMENT; CREDIT ............................................................ 37
8.1 Invoicing. ............................................................................................................. 37
8.2 Payment................................................................................................................ 38
8.3 Books and Records. ............................................................................................. 38
8.4 Payment Adjustments; Billing Errors. ................................................................. 38
8.5 Billing Disputes. .................................................................................................. 38
8.6 Netting of Payments. ............................................................................................ 39
8.7 Seller’s Development Security. ........................................................................... 39
8.8 Seller’s Performance Security.............................................................................. 39
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral ................ 39 ARTICLE 9 NOTICES .............................................................................................................. 40
9.1 Addresses for the Delivery of Notices ................................................................. 40
9.2 Acceptable Means of Delivering Notice .............................................................. 40 ARTICLE 10 FORCE MAJEURE ............................................................................................. 41
10.1 Definition ............................................................................................................. 41
10.2 No Liability If a Force Majeure Event Occurs .................................................... 42
10.3 Notice ................................................................................................................... 42
10.4 Termination Following Force Majeure Event or Development Cure Period ...... 42 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ..................................................... 43
11.1 Events of Default ................................................................................................. 43
11.2 Remedies; Declaration of Early Termination Date. ............................................. 45
11.3 Damage Payment; Termination Payment ............................................................ 46
11.4 Notice of Payment of Termination Payment or Damage Payment ...................... 47
11.5 Disputes With Respect to Termination Payment or Damage Payment ............... 48
11.6 Limitation on Seller’s Ability to Make or Agree to Third-Party Sales from the Facility after Early Termination Date. ........................................................... 48
11.7 Rights And Remedies Are Cumulative ................................................................ 48
11.8 Mitigation ............................................................................................................. 49 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES ........ 49
12.1 No Consequential Damages. ................................................................................ 49
12.2 Waiver and Exclusion of Other Damages. ........................................................... 49 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY .......................... 50
13.1 Seller’s Representations and Warranties. ............................................................ 50
13.2 Buyer’s Representations and Warranties. ............................................................ 51
13.3 General Covenants. .............................................................................................. 52
13.4 Workforce Development ...................................................................................... 52 ARTICLE 14 ASSIGNMENT.................................................................................................... 52
14.1 General Prohibition on Assignments ................................................................... 52
14.2 Collateral Assignment .......................................................................................... 53 Agenda Page 286
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14.3 Permitted Assignment by Seller........................................................................... 53
14.4 Shared Facilities; Portfolio Financing.. ............................................................... 53 ARTICLE 15 DISPUTE RESOLUTION ................................................................................... 53
15.1 Governing Law. ................................................................................................... 53
15.2 Dispute Resolution. .............................................................................................. 54
15.3 Attorneys’ Fees. ................................................................................................... 54
15.4 Venue. .................................................................................................................. 54 ARTICLE 16 INDEMNIFICATION ......................................................................................... 54
16.1 Indemnification. ................................................................................................... 54
16.2 Claims. ................................................................................................................. 55 ARTICLE 17 INSURANCE ...................................................................................................... 55
17.1 Insurance .............................................................................................................. 55 ARTICLE 18 CONFIDENTIAL INFORMATION ................................................................... 57
18.1 Definition of Confidential Information ................................................................ 57
18.2 Duty to Maintain Confidentiality ......................................................................... 57
18.3 Irreparable Injury; Remedies ............................................................................... 58
18.4 Further Permitted Disclosure ............................................................................... 58
18.5 Press Releases ...................................................................................................... 58 ARTICLE 19 MISCELLANEOUS ............................................................................................ 59
19.1 Entire Agreement; Integration; Exhibits .............................................................. 59
19.2 Amendments ........................................................................................................ 59
19.3 No Waiver ............................................................................................................ 59
19.4 No Agency, Partnership, Joint Venture or Lease ................................................. 59
19.5 Severability .......................................................................................................... 59
19.6 Mobile-Sierra ....................................................................................................... 59
19.7 Counterparts ......................................................................................................... 60
19.8 Electronic Delivery .............................................................................................. 60
19.9 Binding Effect ...................................................................................................... 60
19.10 No Recourse to Members of Buyer ..................................................................... 60
19.11 Forward Contract ................................................................................................. 60
19.12 Change in Electric Market Design ....................................................................... 60
19.13 Further Assurances............................................................................................... 61
19.14 Recordings ........................................................................................................... 61 Agenda Page 287
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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 Capacity Report Exhibit F-2 Form of Monthly Expected Available Storage Capability Report Exhibit G Form of Daily Availability Notice
Exhibit H Form of Commercial Operation Date Certificate Exhibit I Form of Capacity Test Certificate
Exhibit J Form of Construction Start Date Certificate
Exhibit K Form of Letter of Credit
Exhibit L [Intentionally Omitted]
Exhibit M Form of Replacement RA Notice
Exhibit N Notices
Exhibit O Capacity Tests
Exhibit P Annual Capacity Availability Calculation
Exhibit Q Operating Restrictions
Exhibit R Metering Diagram
Exhibit S Form of Consent to Collateral Assignment
Exhibit T CPM Adjustment Factors
Exhibit U Supply Chain Code of Conduct
Exhibit V Material Permits
Exhibit W Force Majeure Event and/or Development Cure Period Claim Form Exhibit X Select BESS Supply Agreement Terms
Agenda Page 288
ENERGY STORAGE AGREEMENT
This Energy Storage Agreement (“Agreement”) is entered into as of [_________] (the “Effective Date”), between Buyer and Seller. Buyer and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties.” All capitalized terms used in this Agreement are used with the meanings ascribed to them in Article 1 to this Agreement.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own or otherwise control, and operate the Facility; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product;
WHEREAS, Buyer intends to apply the Facility’s NQC toward Buyer’s clean energy mid-term reliability procurement obligations set forth in CPUC D.21-06-035 (as may be revised by further decisions “MTR Requirements”);
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 3.6(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.
Agenda Page 289
2 “Ancillary Services” means spinning reserve, non-spinning reserve, regulation up, regulation down, voltage support, and any other ancillary services that the Facility is capable of providing consistent with the Operating Restrictions set forth in Exhibit Q, as each is defined in the CAISO Tariff, and as listed in Exhibit Q, including any ancillary services added pursuant to Section 3.3.
“Annual Capacity Availability” has the meaning set forth in Exhibit P. “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.
“Auxiliary Use” means the Energy that is used (including Energy used during the charging or discharging of the Facility) within the Facility to power the motors, temperature control systems, control systems and other electrical loads that are integral to the charging or discharging of the Facility.
“Availability Notice” means Seller’s availability forecasts issued pursuant to Section 4.10 with respect to the Available Effective Capacity and Available Storage Capability, which shall include any updates from Seller with respect to Facility outages or availability as reported to CAISO (including as reported in OMS).
“Availability Standards” has the meaning set forth in the CAISO Tariff or such other similar term as modified and approved by FERC hereafter to be incorporated in the CAISO Tariff.
“Available Capacity” means the capacity of the Facility, expressed in whole MWs, that is mechanically available to charge and discharge Energy and provide Ancillary Services. “Available Effective Capacity” has the meaning in Exhibit P. “Available Storage Capability” has the meaning in Exhibit P. “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.
“Battery Charging Factor” means the percentage SOC of the Facility after the first five and one-half (5.5) hours of the charging phase of the applicable Capacity Test.
Agenda Page 290
3 “Battery Discharging Factor” means one (1) minus the percentage SOC of the Facility after the time period comprised of the first four (4) hours of the discharging phase of the applicable Capacity Test plus the time required for ramping the Facility from 0 MW to the maximum discharging level as limited by CAISO at the beginning of such discharging phase. “Bridge Capacity” has the meaning set forth in Section 3.4(e). “Bridge Capacity Contract Quantity” has the meaning set forth in Section 3.4(e)(i). “Bridge Capacity Delivery Period” has the meaning set forth in Section 3.4(e)(i). “Bridge Capacity Price” has the meaning set forth in Section 3.4(e)(v). “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 Default” means an Event of Default of Buyer.
“Buyer Dispatched Test” has the meaning in Section 4.4(c). “Buyer’s Indemnified Parties” has the meaning set forth in Section 18.2. “CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“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 for all Ancillary Services, PMAX, and PMIN associated with such storage units, that are applicable to the Facility.
“CAISO Charges Invoice” has the meaning set forth in Exhibit D. “CAISO Commercial Operation” has the same meaning as “Commercial Operation” as defined in the CAISO Tariff.
“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 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 Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including Agenda Page 291
4 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. “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 charge or discharge and deliver to the Delivery Point at a particular moment and that can be purchased, sold or conveyed under CAISO or CPUC market rules, including Resource Adequacy Benefits. “Capacity Availability Factor” has the meaning set forth in Exhibit C. “Capacity Availability Payment True-Up” has the meaning set forth in Exhibit C. “Capacity Availability Payment True-Up Amount” has the meaning set forth in Exhibit C.
“Capacity Damages” has the meaning set forth in Section 5 of Exhibit B. “Capacity Test” or “CT” means any test or retest of the Facility to establish the Installed Capacity, Effective Capacity, Efficiency Rate or any other test conducted pursuant to Exhibit O. “Change of Control” means, except in connection with public market transactions of equity interests or capital stock of Seller’s Ultimate Parent, any circumstance in which Ultimate Parent ceases to own, directly or indirectly through one or more intermediate entities, more than fifty percent (50%) of the outstanding equity interests in Seller; provided, in calculating ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more intermediate entities shall not be counted towards Ultimate Parent’s ownership interest in Seller unless Ultimate Parent directly or indirectly owns more than fifty percent (50%) of the outstanding equity interests in each such intermediate entity; and (b) ownership interests in Seller owned directly or indirectly by any Lender (including any tax equity provider) shall be excluded from the total outstanding equity interests in Seller. “Charging Energy” means the Energy delivered to the Delivery Point pursuant to a Charging Notice, as measured by the Facility Meter, as such meter readings are adjusted by the CAISO for any applicable Electrical Losses.
“Charging Notice” means the operating instruction, and any subsequent updates, given by Buyer, Buyer’s SC or the CAISO to Seller, directing the Facility to charge at a specific MW rate for a specified period of time or amount of MWh; provided, any such operating instruction shall be in accordance with the Operating Restrictions. Any instruction to charge the Facility pursuant to a Buyer Dispatched Test shall be considered a Charging Notice. “COD Certificate” has the meaning set forth in Exhibit B.
Agenda Page 292
5 “Commercial Operation” has the meaning set forth in Exhibit B. “Commercial Operation Capacity Test” means the Capacity Test conducted in connection with Commercial Operation of the Facility, including any additional Capacity Test for additional capacity installed after the Commercial Operation Date pursuant to Section 5 of Exhibit B.
“Commercial Operation Date” means the date Commercial Operation is achieved. “Commercial Operation Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) ninety (90). “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 Facility pursuant to this Agreement. “Compliance Actions” has the meaning set forth in Section 3.6(a). “Compliance Expenditure Cap” has the meaning set forth in Section 3.6. “Confidential Information” has the meaning set forth in Section 18.1. “Consent to Collateral Assignment” has the meaning set forth in Section 14.2. “Construction Start” has the meaning set forth in Exhibit B. “Construction Start Date” has the meaning set forth in Exhibit B. “Contract Term” has the meaning set forth in Section 2.1. “Contract Year” means a period of twelve (12) consecutive months. The first Contract Year shall commence on the Commercial Operation Date and each subsequent Contract Year shall commence on the anniversary of the Commercial Operation Date. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third-party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace the Agreement; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating the Agreement. “Cover Sheet” means the cover sheet to this Agreement, which is incorporated into this Agreement.
“COVID-19” means the epidemic disease designated COVID-19 and the related virus designated SARS-CoV-2 and any mutations thereof, and the efforts of a Governmental Authority to combat such disease.
“CPM Adjustment Factor” means, for any RA Shortfall Month, the percentage for the corresponding calendar month set forth in Exhibit T.
Agenda Page 293
6 “CPM Price” has the meaning set forth in Section 3.5(b). “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). “Curtailment Order” means any of the following:
(a) CAISO orders, directs, alerts, or provides notice to a Party to curtail deliveries of Facility Energy for the following reasons: (i) any System Emergency, or (ii) any warning of an anticipated System Emergency, or warning of an imminent condition or situation, which jeopardizes CAISO’s electric system integrity or the integrity of other systems to which CAISO is connected;
(b) a curtailment ordered by the 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. “Daily Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) one hundred twenty (120). “Damage Payment” means the amount to be paid by the Defaulting Party to the Non-Defaulting Party after a Terminated Transaction occurring prior to the Commercial Operation Date, in a dollar amount set forth in Section 11.3(a).
“Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Day-Ahead Schedule” has the meaning set forth in the CAISO Tariff. “Defaulting Party” has the meaning set forth in Section 11.1(a).
Agenda Page 294
7 “Delay Damages” means Daily Delay Damages and Commercial Operation Delay Damages.
“Delivery Point” has the meaning set forth in Exhibit A. “Delivery Term” shall mean the period of Contract Years set forth on the Cover Sheet beginning on the Commercial Operation Date, unless terminated earlier in accordance with the terms and conditions of this Agreement.
“Development Cure Period” has the meaning set forth in Exhibit B. “Development Security” means (a) cash or (b) a Letter of Credit in the amount specified for the Development Security on the Cover Sheet.
“Discharging Notice” means the operating instruction, and any subsequent updates, given by Buyer, Buyer’s SC or the CAISO to the Facility, directing the Facility to discharge Facility Energy at a specific MW rate for a specified period of time or to an amount of MWh. “Disclosing Party” has the meaning set forth in Section 18.2. “Dispatch Notice” means any Charging Notice, Discharging Notice and any subsequent updates thereto, given by the CAISO, Buyer or Buyer’s SC, to Seller, directing the Facility to charge or discharge Facility Energy at a specific MWh rate to a specified Stored Energy Level; provided, any such operating instruction or updates shall be in accordance with the Operating Restrictions. Dispatch Notices may be communicated electronically (i.e. through ADS, AGC or e-mail), or telephonically, in accordance with the procedures set forth in Section 4.7. Telephonic or other verbal communications shall be documented (either recorded by tape, electronically or in writing) and such recordings shall be made available to both Buyer and Seller upon request for settlement purposes.
“Early Termination Date” has the meaning set forth in Section 11.2(a). “Effective Capacity” means the lesser of (a) PMAX, and (b) maximum dependable operating capacity of the Facility to discharge Energy for four (4) hours of continuous discharge, as measured in MW at the Delivery Point (i.e., measured at the Facility Meter as such meter readings are adjusted for any applicable Electrical Losses to the Delivery Point pursuant to the CAISO Tariff) as determined pursuant to the most recent Capacity Test (including the Commercial Operation Capacity Test), and as evidenced by a certificate substantially in the form attached as Exhibit I hereto, in either case (a) or (b) up to but not in excess of (i) the Guaranteed Capacity (with respect to a Commercial Operation Capacity Test) or (ii) the Installed Capacity (with respect to any other Capacity Test).
“Effective Date” has the meaning set forth on the Preamble. “Effective Flexible Capacity” or “EFC” means the effective flexible capacity (in MWs) of the Facility pursuant to the counting conventions set forth in the Resource Adequacy Rulings and the CAISO Tariff, which such flexible capacity may be used to satisfy Flexible RAR.
Agenda Page 295
8 “Efficiency Rate” means the rate calculated as the quotient of (a) the sum of (i) Energy Out plus (ii) Idle Period Auxiliary Use for which Seller is required to reimburse Buyer, divided by (b) Energy In, pursuant to Exhibit O.
“Efficiency Rate Factor” has the meaning set forth in Exhibit C. “Electrical Losses” means all transmission or transformation losses (a) between the Delivery Point and the Facility associated with delivery of Charging Energy, (b) between the Facility and the Delivery Point associated with delivery of Facility Energy, and includes losses due to inverter and/or the power conversion system load, including during idle periods. “Emission Reduction Credits” or “ERCs” means emission reductions that have been authorized by a local air pollution control district pursuant to California Division 26 Air Resources; Health and Safety Code Sections 40709 and 40709.5, whereby a district has established a system by which all reductions in the emission of air contaminants that are to be used to offset certain future increases in the emission of air contaminants shall be banked prior to use to offset future increases in emissions.
“Energy” means AC electrical energy, measured in kilowatt-hours, megawatt-hours, or multiple units thereof.
“Energy In” has the meaning set forth in Exhibit O.
“Energy Management System” or “EMS” means the Facility’s energy management system.
“Energy Out” has the meaning set forth in Exhibit O.
“Environmental Costs” means costs incurred in connection with acquiring and maintaining all environmental permits and licenses for the Facility, and the Facility’s compliance with all applicable environmental laws, rules and regulations, including capital costs for pollution mitigation or installation of emissions control equipment required to permit or license the Facility, all operating and maintenance costs for operation of pollution mitigation or control equipment, costs of permit maintenance fees and emission fees as applicable, and the costs of all Emission Reduction Credits or Marketable Emission Trading Credits required by any applicable environmental laws, rules, regulations, and permits to operate, and costs associated with the disposal and clean-up of hazardous substances introduced to the Site, and the decontamination or remediation, on or off the Site, necessitated by the introduction of such hazardous substances on the Site.
“Event of Default” has the meaning set forth in Section 11.1. “Expected Commercial Operation Date” has the meaning set forth on the Cover Sheet. “Expected Construction Start Date” has the meaning set forth on the Cover Sheet. “Facility” means the energy storage facility described on the Cover Sheet and in Exhibit A, located at the Site and including mechanical equipment and associated facilities and equipment Agenda Page 296
9 required to deliver Product (but excluding any Shared Facilities), as such storage facility may be expanded or otherwise modified from time to time in accordance with the terms hereof. “Facility Energy” means the Energy delivered from the Facility to the Delivery Point during any Settlement Interval or Settlement Period, as measured at the Facility Metering Point by the Facility Meter, as such meter readings are adjusted for any applicable Electrical Losses and Station Use pursuant to the CAISO Tariff. All Facility Energy shall have originally been delivered to the Facility as Charging Energy.
“Facility Meter” means a CAISO-approved bi-directional revenue quality meter or meters (with a 0.3 accuracy class), CAISO-approved 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 Facility Metering Point and the amount of Facility Energy delivered to the Delivery Point for the purpose of invoicing in accordance with Section 8.1. The Facility may contain multiple measurement devices that will make up the Facility Meter, and, unless otherwise indicated, references to the Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together.
“FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“Financial Close” means Seller and/or one of its Affiliates has obtained debt and/or equity financing commitments from one or more Lenders sufficient to construct the Facility, including such financing commitments from Seller’s owner(s).
“Flexible Capacity” means, with respect to any particular Showing Month, the number of MWs of Product which are eligible to satisfy Flexible RAR. “Flexible RAR” means the flexible capacity requirements established for load-serving entities by the CAISO pursuant to the CAISO Tariff, the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority.
“Force Majeure Event” has the meaning set forth in Section 10.1. “Force Majeure Unavailability” has the meaning set forth in Exhibit C. “Full Capacity Deliverability Status” or “FCDS” has the meaning set forth in the CAISO Tariff.
“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 Agenda Page 297
10 markets, settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term, and include the value of Capacity Attributes.
“GHG Regulations” means Title 17, Division 3 (Air Resources), Chapter 1 (Air Resources Board), Subchapter 10 (Climate Change), Article 5 (Emissions Cap), Sections 95800 to 96023 of the California Code of Regulations, as amended or supplemented from time to time. “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.
“Greenhouse Gas” or “GHG” has the meaning set forth in the GHG Regulations or in any other applicable Laws.
“Guaranteed Capacity” means the maximum dependable operating capability of the Facility to discharge Energy, as measured in MW 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.
“Guaranteed Capacity Availability” has the meaning set forth in Section 4.3. “Guaranteed Commercial Operation Date” has the meaning on the Cover Sheet, as such date may be extended pursuant to Exhibit B.
“Guaranteed Construction Start Date” has the meaning on the Cover Sheet, as such date may be extended pursuant to Exhibit B.
“Guaranteed Efficiency Rate” means, for each Contract Year, the minimum guaranteed Efficiency Rate of the Facility for such Contract Year, as set forth on the Cover Sheet. “Idle Period Auxiliary Use” means Auxiliary Use consumed by the Facility during periods in which the Facility is not charging or discharging pursuant to a Charging Notice or Discharging Notice for which Seller does not pay retail rates to its retail electric utility provider. “Imbalance Energy” means the amount of Energy in MWh, in any given Settlement Period or Settlement Interval, by which the amount of Facility Energy or Charging Energy deviates from the amount of Scheduled Energy.
“Indemnified Party” has the meaning set forth in Section 16.1(a). “Indemnifying Party” has the meaning set forth in Section 16.1(a). “Initial Synchronization” means the commencement of Trial Operations (as defined in the CAISO Tariff).
Agenda Page 298
11 “Installed Capacity” means the lesser of (a) PMAX, and (b) maximum dependable operating capacity of the Facility to discharge Energy for four (4) hours of continuous discharge, as measured in MW at the Facility Meter Point by the Facility Meter as such meter readings are adjusted for any applicable Electrical Losses to the Delivery Point pursuant to the CAISO Tariff, that achieves Commercial Operation, as evidenced by a certificate substantially in the form attached as Exhibit I hereto, as such capacity may be adjusted pursuant to Section 5 of Exhibit B. “Inter-SC Trade” has the meaning set forth in the CAISO Tariff. “Interconnection Agreement” means the interconnection agreement entered into by Seller or an Affiliate 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 an instantaneous amount of Energy that is permitted to be delivered from the Facility to the Delivery Point under Seller’s Interconnection Agreement, in the amount of 40 MW.
“Interconnection Facilities” means the interconnection facilities, control and protective devices and metering facilities required to connect the Facility with the Transmission System in accordance with the Interconnection Agreement.
“Interest Rate” has the meaning set forth in Section 8.2. “Interim Deliverability Status” has the meaning set forth in the CAISO Tariff. “IP Indemnity Claim” has the meaning set forth in Section 16.1(a). “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.
“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 (a) 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 Agenda Page 299
12 operation of the Facility, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including tax equity), public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or refinancing for the Facility or purchasing equity ownership interests of Seller and/or its Affiliates, and any trustee or agent or similar representative acting on their behalf, (b) providing interest rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations and/or (c) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Facility. “Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank or a foreign bank with a U.S. branch with such bank having a Credit Rating of at least A- with an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s, in a form substantially similar to the letter of credit set forth in Exhibit K.
“Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the State of California. “Local Capacity Area Resource” has the meaning set forth in the CAISO Tariff. “Local RAR” means the local Resource Adequacy Requirements established for load-serving entities by the CAISO pursuant to the CAISO Tariff, the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority. “Local RAR” may also be known as local area reliability, local resource adequacy, local resource adequacy procurement requirements, or local capacity requirement in other regulatory proceedings or legislative actions. “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 Capacity Attributes. “Marketable Emission Trading Credits” means emissions trading credits or units pursuant to the requirements of California Division 26 Air Resources; Health & Safety Code Section 39616 and Section 40440.2 for market based incentive programs such as the South Coast Air Quality Management District’s Regional Clean Air Incentives Market, also known as RECLAIM, and allowances of sulfur dioxide trading credits as required under Title IV of the Federal Clean Air Act (42 U.S.C. § 7651b (a) to (f)).
“Material Permits” means all permits required for Seller to commence construction, as set forth on Exhibit V.
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13 “Milestones” means the significant permitting, interconnection, financing and construction milestones set forth on the Cover Sheet.
“Monthly Bridge Capacity Payment” has the meaning set forth in Section 3.4(e)(v). “Monthly Capacity Payment” means the payment required to be made by Buyer to Seller each month of the Delivery Term as compensation for the Product, as calculated in accordance with Exhibit C.
“Monthly Forecast” has the meaning set forth in Section 4.10(a). “Moody’s” means Moody’s Investors Service, Inc., or its successor. “MTR Requirements” has the meaning set forth in the Recitals. “MW” means megawatts in alternating current, unless expressly stated in terms of direct current.
“MWh” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“NERC” means the North American Electric Reliability Corporation or any successor entity.
“Net Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “Network Upgrades” has the meaning set forth in the CAISO Tariff. “Non-Defaulting Party” has the meaning set forth in Section 11.2. “Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or electronic messaging (e-mail).
“Operating Restrictions” means those restrictions, rules, requirements, and procedures set forth in Exhibit Q.
“Outage Schedule” has the meaning set forth in Section 4.11(a)(i). “Party” has the meaning set forth in the Preamble.
“Performance Guarantees” has the meaning set forth in Section 4.3(b). “Performance Security” means (i) cash or (ii) a Letter of Credit, in the amount specified for the Performance Security set forth on the Cover Sheet.
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14 “Permitted Transferee” means (i) any Affiliate of Seller or (ii) any entity that satisfies, or is controlled by another Person that satisfies, the following requirements:
(a) A tangible net worth of not less than one hundred fifty million dollars ($150,000,000) or a Credit Rating of at least BBB- from S&P, BBB- from Fitch, or Baa3 from Moody’s; and
(b) Either (i) has at least two (2) years of experience in the ownership and operations of energy storage facilities similar to the Facility, or has retained a third-party with such experience to operate the Facility, or (ii) has confirmed in writing to Buyer that an Affiliate of Terra-Gen, LLC will continue to operate the Facility following the Change of Control involving such Permitted Transferee.
“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 4.11(a).
“PMAX” means the applicable CAISO-certified maximum operating level of the Facility. “PMIN” means the applicable CAISO-certified minimum operating level of the 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 Financing” means any debt incurred by an Affiliate of Seller that is secured only by a Portfolio.
“Portfolio Financing Entity” means any Affiliate of Seller that incurs debt in connection with any Portfolio Financing.
“Product” has the meaning set forth on the Cover Sheet. “Progress Report” means a progress report including the items set forth in Exhibit E. “Project” has the meaning set forth in Section 3.4(e).
“Project Portfolio” has the meaning set forth in Section 3.4(e).
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15 “Prudent Operating Practice” means (a) the applicable practices, methods and acts required by or consistent with applicable Laws and reliability criteria, and otherwise engaged in or approved by a significant portion of the electric industry during the relevant time period with respect to grid-interconnected, utility-scale energy storage facilities in the Western United States, and (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 energy storage facilities in the Western United States. Prudent Operating Practice shall include compliance with applicable Laws, applicable safety and 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.
“Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “RA Compliance Showing” means the (a) Local RAR compliance or advisory showings (or similar or successor showings), (b) RAR compliance or advisory showings (or similar or successor showings), and (c) Flexible RAR compliance or advisory showings (or similar successor showings), in each case, an entity is required to make to the CAISO pursuant to the CAISO Tariff, to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the Resource Adequacy Rulings, or to any Governmental Authority. “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 3.5(b). “RA Guarantee Date” means the Commercial Operation Date; provided, if the Bridge Capacity Delivery Period is extended to include the Showing Months of January 2025 and (if applicable) February 2025 as set forth in Section 2.2(f), then the RA Guarantee Date will be the first day of the first Showing Month after the end of the Bridge Capacity Delivery Period. “RA Shortfall Month” means, for purposes of calculating an RA Deficiency Amount under Section 3.5(b), any Showing Month, commencing with the Showing Month that includes the RA Guarantee Date, during which the Net Qualifying Capacity of the Facility for such Showing Month plus any Replacement RA (if applicable) that was included in a Supply Plan for the Showing Month for Buyer 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 first day of the first Showing Month for which the Facility has a non-zero Net Qualifying Capacity, if applicable). “Real-Time Market” has the meaning set forth in the CAISO Tariff. “Receiving Party” has the meaning set forth in Section 18.2. “Reliability Network Upgrades” has the meaning set forth in the CAISO Tariff. “Remedial Action Plan” has the meaning set forth in Section 2.4.
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16 “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 Flexible Capacity, and any local, zonal or otherwise locational attributes associated with the Facility.
“Resource Adequacy Requirements” or “RAR” means the resource adequacy requirements applicable to an entity as established by the CAISO pursuant to the CAISO Tariff, by the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority.
“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, 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, 20-01-004, 20-03-016, 20-06-002, 20-06-028, 20-12- 006 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. “S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of S&P Global Inc.) or its successor.
“SCADA Systems” means the supervisory control and data acquisition systems to be installed by Seller as part of the Facility, including those system components that enable Seller to receive ADS and AGC instructions from the CAISO or similar instructions from Buyer’s SC. “Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” and “Scheduling” have a corollary meaning.
“Scheduled Energy” means the Charging Energy or 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 Agenda Page 304
17 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. “Seller” has the meaning set forth on the Cover Sheet.
“Seller Initiated Test” has the meaning set forth in Section 4.4(c). “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. “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.
“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, 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 (a) the Stored Energy Level relative to (b) the Effective Capacity multiplied by four (4) hours, expressed as a percentage. “SP-15” means the Existing Zone Generation Trading Hub for Existing Zone region SP15 as set forth in the CAISO Tariff.
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18 “Station Use” means, in addition to all Auxiliary Use, the Energy (including Energy produced or discharged by the Facility) that is used within the Facility to power the lights, motors, temperature control systems, control systems and other electrical loads that are necessary for operation of the Facility (other than Auxiliary Use).
“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 Facility available to be discharged as Facility Energy, expressed in MWh. “Supplementary Capacity Test Protocol” has the meaning set forth in Exhibit O. “Supply Chain Code” has the meaning in Exhibit U.
“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 state, local and/or federal production tax credit, depreciation benefit, tax deduction and/or investment tax credit specific to the production of clean or renewable energy and/or investments in clean or renewable energy facilities or battery storage facilities.
“Terminated Transaction” has the meaning set forth in Section 11.2(a). “Termination Payment” has the meaning set forth in Section 11.3. “Total YTD Calculation Intervals” has the meaning set forth in Exhibit P. “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.
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19 “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 Terra-Gen, LLC, a Delaware limited liability company. “Unavailable Calculation Interval” has the meaning set forth in Exhibit P. “Unplanned Outage” means a period during which the Facility is unavailable to provide some or all of the Product due to the need to maintain or repair a component thereof, which period is not a Planned Outage.
1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Article, 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; Agenda Page 307
20 (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.
(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, 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, which Buyer shall, if submitted by Seller within five (5) Business Days of the expected Commercial Operation Date, review and either accept or provide Notice stating in reasonably detail the basis for Buyer’s rejection thereof within five (5) Business Days of receipt thereof, and the Delivery Term shall commence as of the date that such conditions were satisfied, even if Buyer’s Notice accepting such satisfaction is delivered after such date:
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21 (a) Seller shall have delivered to Buyer (i) a completion certificate from a Licensed Professional Engineer substantially in the form of Exhibit H and (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I setting forth the Installed Capacity on the Commercial Operation Date;
(b) A 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 Facility have been obtained and all conditions thereof that are capable of being satisfied on the Commercial Operation Date have been satisfied and shall be in full force and effect;
(e) Seller has obtained CAISO Certification for the Facility; (f) The Facility is providing Resource Adequacy Benefits for the month in which Delivery Term commences; provided, if Seller achieves CAISO Commercial Operation in the period between November 1, 2024 and December 31, 2024, inclusive, then this Section 2.2(f) shall not be applicable if Seller otherwise satisfies all conditions in this Section 2.2 and provides Notice of the Commercial Operation Date occurring during the period between January 1, 2025 and February 28, 2025, but Seller shall provide Bridge Capacity for the months of January and (if the Facility is not providing Resource Adequacy Benefits for February) February; (g) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8;
(h) Seller has taken all actions and executed all documents and instruments, required to authorize Buyer (or its designated agent) to act as Scheduling Coordinator under this Agreement and to fully enable the Facility to be Scheduled by Buyer, and Buyer (or its designated agent) is authorized to act as Scheduling Coordinator (unless Buyer (or its designated agent) is not authorized to act as Scheduling Coordinator or the Facility is not fully enabled to be Scheduled by Buyer due to any act or omission of Buyer (or its designated agent)); (i) Seller has delivered to Buyer an officer’s certificate stating that Seller has used commercially reasonable efforts to comply with the Supply Chain Code and the requirements of Section 2.3(c); and
(j) Seller has paid Buyer for all amounts owing under this Agreement as of the Commercial Operation Date, if any, including Delay Damages.
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22 2.3 Development; Construction; Progress Reports.
(a) Within fifteen (15) days after the close of (i) each calendar quarter from the first calendar quarter following the Effective Date until the Construction Start Date, and (ii) each calendar month from the first calendar month following the Construction Start Date until the Commercial Operation Date, Seller shall provide to Buyer a Progress Report and agree to regularly scheduled meetings between representatives of Buyer and Seller to review such reports and discuss Seller’s construction progress. The form of the Progress Report is set forth in Exhibit E. Seller shall also provide Buyer with any reasonably requested documentation (subject to confidentiality restrictions) directly related to the achievement of Milestones within ten (10) Business Days of receipt of such request by Seller. Seller is solely responsible for the design and construction of the Facility, including the location of the Site, the Facility layout, and the selection and procurement of the equipment comprising the Facility.
(b) Seller shall promptly provide information and documentation reasonably requested by Buyer that is available to Seller and not already separately available to Buyer and which Buyer reasonably deems necessary or advisable to satisfy any CPUC requests or requirements in connection with the MTR Requirements, including (i) evidence of Site Control, (ii) a copy of Seller’s final notice to proceed authorizing its EPC contractor to commence construction of the Facility at the Site, and (iii) similar information related to the Bridge Capacity. (c) Seller shall use commercially reasonable efforts to comply with the Supply Chain Code with respect to all materials, products, components, and labor used in constructing, installing and operating the Facility throughout the Term. Seller shall use commercially reasonable efforts to include in its contracts with contractors and suppliers for the Facility (other than contracts executed prior to the Effective Date, except with respect to any purchase or supply agreement for the battery energy storage system) provisions requiring such contractors and suppliers to use commercially reasonable efforts to comply with the Supply Chain Code. Seller shall use commercially reasonable efforts to implement due diligence procedures for its and its Affiliate’s suppliers, subcontractors and other participants in its supply chains. If (i) the purchase or supply agreement(s) for the battery energy storage systems included in the Facility includes terms that are substantially similar to the terms set forth in Exhibit X and (ii) Seller uses commercially reasonable efforts to enforce such terms, then Seller will be deemed to have complied with its obligations under this Section 2.3(c) with respect to such battery energy storage systems. Seller shall notify Buyer as soon as it becomes aware of any breach of its obligations under this Section 2.3(c). (d) Buyer shall have the right, at Buyer’s sole expense, to retain an independent auditor to audit Seller’s compliance with the requirements of Section 2.3(c).
2.4 Remedial Action Plan. If Seller misses a Milestone by more than thirty (30) days, except as the result of Force Majeure Event or Buyer Default, Seller shall submit to Buyer, within ten (10) Business Days of the end of such thirty (30)-day period following the Milestone completion date, a remedial action plan (“Remedial Action Plan”), which will describe in detail any delays (actual or anticipated) beyond the scheduled Milestone dates, including the cause of the delay (e.g., governmental approvals, financing, property acquisition, design activities, equipment procurement, project construction, interconnection, or any other factor), Seller’s detailed description of its proposed course of action to achieve the missed Milestones and all subsequent Agenda Page 310
23 Milestones by the Guaranteed Commercial Operation Date; provided, delivery of any Remedial Action Plan shall not relieve Seller of its obligation to provide Remedial Action Plans with respect to any subsequent Milestones and to achieve the Guaranteed Commercial Operation Date in accordance with the terms of this Agreement. Subject to the provisions of Exhibit B, so long as Seller complies with its obligations under this Section 2.4, Seller shall not be considered in default of its obligations under this Agreement solely as a result of missing any Milestone.
2.5 Pre-Commercial Operation Actions. The Parties agree that, in order for Buyer to dispatch the Facility for its Commercial Operation Date, the Parties will have to perform certain of their Delivery Term obligations in advance of the Commercial Operation Date, including, without limitation, Seller’s delivery of an Availability Notice for the Commercial Operation Date, and delivery of a Dispatch Notice and nominating and scheduling the Facility for the Commercial Operation Date, in advance of the Commercial Operation Date. The Parties shall cooperate with each other in order for Buyer to be able to dispatch the Facility for the Commercial Operation Date. Seller shall give Buyer at least forty-five (45) days’ Notice before the Commercial Operation Date.
ARTICLE 3
PURCHASE AND SALE
3.1 Product. Subject to the terms and conditions of this Agreement, during the Delivery Term, Buyer shall have the exclusive right to the Installed Capacity and Effective Capacity, as applicable, and all Product associated therewith, including the exclusive right to use, market or sell the Product and the right to all revenues generated from the use, resale or remarketing of the Product. Seller shall operate the Facility and make available, charge and discharge, deliver, and sell the Product therefrom to Buyer, when and as the Facility is available, subject to the terms and conditions of this Agreement, including the Operating Restrictions. Seller represents and warrants that it will deliver the Product to Buyer free and clear of all liens, security interests, claims and encumbrances. Seller shall not substitute or purchase any energy storage capacity, Energy, Ancillary Services or Capacity Attributes from any other energy storage resource or the market for delivery hereunder except as otherwise provided herein, nor shall Seller sell, assign or otherwise transfer any Product, or any portion thereof, to any third party other than to Buyer or CAISO pursuant to this Agreement or as otherwise required by Law.
3.2 Facility Energy. Except for Facility Energy resulting from a Seller Initiated Test, Seller commits to make available the Facility Energy to Buyer, and Buyer shall have the exclusive rights to all Facility Energy, subject to the Operating Restrictions. Title to and risk of loss related to the Facility Energy shall pass and transfer from Seller to Buyer at the Delivery Point.
3.3 Ancillary Services. Buyer shall have the exclusive rights to all Ancillary Services, with characteristics and quantities determined in accordance with the CAISO Tariff.
Notwithstanding anything to the contrary herein, Seller is permitted to provide voltage support to the Transmission Provider in accordance with the Interconnection Agreement. Upon a request by Buyer, the Parties shall negotiate in good faith to modify the terms of this Agreement for the Agenda Page 311
24 Facility to be able to provide Black Start (as defined in the CAISO Tariff) or any other Ancillary Services not listed Exhibit Q.
3.4 Capacity Attributes. Seller shall diligently pursue Full Capacity Deliverability Status for the Guaranteed Capacity in the CAISO generator interconnection process. As between Buyer and Seller, Seller shall be responsible for the cost and installation of any Network Upgrades associated with obtaining such Full Capacity Deliverability Status. (a) Throughout the Delivery Term, Seller grants, pledges, assigns and otherwise commits to Buyer all the Capacity Attributes from the Facility. As of the Effective Date, Seller anticipates that the Facility will be qualified by the CAISO to provide to Buyer the amount and category of Flexible Capacity identified as the Anticipated Flexible Capacity on the Cover Sheet, but the Parties acknowledge and agree that the actual amount and category of Flexible Capacity available from the Facility may change over time and Seller does not guarantee the Facility will provide any particular amount or category of Flexible Capacity. (b) Throughout the Delivery Term and subject to Section 3.6, Seller shall use commercially reasonable efforts to maintain eligibility for Full Capacity Deliverability Status or Interim Deliverability Status for the Facility from the CAISO and shall perform all actions necessary to ensure that the Facility qualifies to provide Resource Adequacy Benefits, including Flexible Capacity, to Buyer. Throughout the Delivery Term, and subject to Section 3.6, Seller hereby covenants and agrees to transfer all Resource Adequacy Benefits to Buyer. (c) For the duration of the Delivery Term, and subject to Section 3.6, Seller shall take all commercially reasonable actions, including complying with all applicable registration and reporting requirements, and execute all documents or instruments necessary to enable Buyer to use all of the Capacity Attributes committed by Seller to Buyer pursuant to this Agreement. (d) If Seller anticipates that it will have any RA Deficiency Amounts in a Showing Month, Seller may provide Replacement RA up to the amount of (X) the Qualifying Capacity of the Facility with respect to such Showing Month, minus (Y) the expected Net Qualifying Capacity of the Facility with respect to such Showing Month, provided that (a) the amount of Replacement RA in any Contract Year shall not to exceed twenty-five percent (25%) of the annual total amount of Resource Adequacy Benefits expected to be provided by the Facility, and (b) any intended Replacement RA is communicated by Seller to Buyer in a Notice substantially in the form of Exhibit M at least fifty (50) Business Days before the applicable Showing Month for the purpose of including in Buyer’s RA Compliance Showing for such Showing Month. (e) In addition to the Parties’ rights and obligations hereunder with respect to the Product, Seller shall sell and deliver, and Buyer shall purchase and receive, “system” Resource Adequacy Benefits (“Bridge Capacity”) from one or more Resource Adequacy Resources other than the Facility (each, a “Project” and, collectively, the “Project Portfolio”) in accordance with the following terms and conditions:
(i) For each Showing Month in the time period commencing with the Showing Month of June 2024 through and including the Showing Month of December 2024 (the “Bridge Capacity Delivery Period”), Seller will sell and deliver to Buyer, and Buyer will Agenda Page 312
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26 3.5 Resource Adequacy Failure.
(a) RA Deficiency Determination. 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 3.5(b), as the sole and exclusive remedy for the Capacity Attributes that Seller failed to convey to Buyer.
(b) RA Deficiency Amount Calculation. For each RA Shortfall Month, the “RA Deficiency Amount” shall be equal to the product of (i) the difference, expressed in kW, of (A) the Qualifying Capacity of the Facility (or, if Seller has not obtained certification from the CAISO of the Facility’s Qualifying Capacity, the amount of Qualifying Capacity the Facility would reasonably be estimated to qualify for, based on the CPUC-adopted qualifying capacity methodologies then in effect) for such RA Shortfall Month, minus (B) (I) the Net Qualifying Capacity of the Facility for such RA Shortfall Month, plus (II) any Replacement RA that was included in the Showing Month for Buyer (or, if Seller does not have a Net Qualifying Capacity for the Facility and did not provide any Replacement RA that was shown in a Showing Month for Buyer (other than due to Buyer’s action or inaction), the Net Qualifying Capacity shall be deemed to be zero (0) MW), multiplied by (ii) the product of (X) the CPM Soft Offer Cap (or its successor) for such RA Shortfall Month, multiplied by (Y) the CPM Adjustment Factor for such RA Shortfall Month (“CPM Price”).
3.6 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 with respect to obtaining, maintaining, conveying or effectuating Buyer’s use of Capacity Attributes, then the Parties agree that the maximum aggregate amount of costs and expenses Seller shall be required to bear during the Contract 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 3.6(c) 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 Agenda Page 314
27 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.
3.7 Facility Configuration. In order to optimize the benefits of the Facility, Buyer and Seller each agree that if requested by the other Party, then Buyer and Seller shall discuss in good faith potential reconfiguration of the Facility or Interconnection Facilities; provided, neither Party shall be obligated to agree to any changes under this Agreement, or to incur any expense in connection with such changes, except under terms mutually acceptable to both Parties as set forth in a written agreement.
ARTICLE 4
OBLIGATIONS AND DELIVERIES
4.1 Delivery. Subject to the provisions of this Agreement, commencing on the Commercial Operation Date through the end of the Contract Term, Seller shall supply and deliver the Product to Buyer at the Delivery Point, and Buyer shall take delivery of the Product at the Delivery Point in accordance with the terms of this Agreement. Seller shall be responsible for paying or satisfying when due any costs or charges imposed in connection with the delivery of Facility Energy to the Delivery Point, including any operation and maintenance charges imposed on Seller by the Transmission Provider directly relating to the Facility’s operations. Buyer shall be responsible for all costs, charges and penalties (except as otherwise set forth in this Agreement), if any, imposed in connection with (a) the delivery of Charging Energy to the Delivery Point (including the cost of Charging Energy itself) and (b) the acceptance and transmission of Facility Energy at and after the Delivery Point, including without limitation transmission costs and transmission line losses with regard to (a) and (b). The Facility Energy will be scheduled with the CAISO by Buyer (or Buyer’s designated Scheduling Coordinator) in accordance with Exhibit D.
4.2 Station Use. Notwithstanding anything to the contrary in this Agreement, the Parties acknowledge (i) during charging and discharging of the Facility pursuant to a Charging Notice or Discharging Notice, Auxiliary Use may be served by Charging Energy or Facility Energy, (ii) Seller is responsible for providing or obtaining all Energy to serve Station Use (including paying the cost of any Energy from the local utility to serve Station Use) except for Auxiliary Use during periods of charging or discharging pursuant to a Charging Notice or Discharging Notice, (iii) the supply of Auxiliary Use from the Facility shall not be deemed a violation of this Agreement, including Sections 4.9(c), (d), and (f), and (iv) Seller shall pay Buyer for all Idle Period Auxiliary Use in the manner contemplated by paragraph (a) of Exhibit C.
Notwithstanding anything to the contrary in this Agreement, Seller may use the Facility to self-supply Auxiliary Use; provided, if any Energy provided by Buyer (i.e. originally delivered as Charging Energy) is used by Seller for Station Use (including Idle Period Auxiliary Use) and such use violates any CAISO rules, other applicable Laws or any applicable utility tariff, Seller (i) shall be solely responsible for (and shall reimburse Buyer, as applicable) any and all costs, penalties and Agenda Page 315
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29 (a) Capacity Tests. Prior to the Commercial Operation Date, Seller shall schedule and complete a Commercial Operation Capacity Test in accordance with Exhibit O.
Thereafter, Seller and Buyer shall have the right to run additional Capacity Tests in accordance with Exhibit O.
(i) Buyer shall have the right to send one or more representative(s) to witness all Capacity Tests.
(ii) Following each Capacity Test, Seller shall submit a testing report in accordance with Exhibit O. If the actual capacity or efficiency rate determined pursuant to a Capacity Test varies from the then-current Effective Capacity or Efficiency Rate, as applicable, then the actual capacity or efficiency rate, as applicable, determined pursuant to such Capacity Test shall become the new Effective Capacity and/or Efficiency Rate, as applicable, at the beginning of the day following the completion of the test for all purposes under this Agreement until a revised Effective Capacity and/or Efficiency Rate, as applicable, is determined pursuant to a subsequent Capacity Test.
(b) Additional Testing. Seller shall, at times and for durations reasonably agreed to by Buyer, conduct necessary testing to ensure the Facility is functioning properly and the Facility is able to respond to Dispatch Notices.
(c) Buyer or Seller Initiated Tests. Any testing of the Facility requested by Buyer after the Commercial Operation Capacity Tests and all required annual tests pursuant to Section B of Exhibit O shall be deemed Buyer-instructed dispatches of the Facility (“Buyer Dispatched Test”). Any test of the Facility that is not a Buyer Dispatched Test (including all tests conducted prior to Commercial Operation, any Commercial Operation Capacity Tests, any Capacity Test conducted if the Effective Capacity immediately prior to such Capacity Test is below seventy percent (70%) of the Installed Capacity, any test required by CAISO (including any test required to obtain or maintain CAISO Certification), and other Seller-requested discretionary tests or dispatches, at times and for durations reasonably agreed to by Buyer, that Seller deems necessary for purposes of reliably operating or maintaining the Facility or for re-performing a required test within a reasonable number of days of the initial required test (considering the circumstances that led to the need for a retest)) shall be deemed a “Seller Initiated Test”. (i) For any Seller Initiated Test other than a Capacity Test required by Exhibit O for which there is a stated notice requirement, Seller shall notify Buyer no later than twenty-four (24) hours prior thereto (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practices).
(ii) No Dispatch Notices shall be issued during any Seller Initiated Test or Buyer Dispatched Test except as reasonably requested by Seller or Buyer to implement the applicable test. Periods during which Buyer Dispatched Tests render the Facility (or any portion thereof, as applicable) unavailable shall be deemed periods during which the Facility is fully available for purposes of calculating the Annual Storage Capacity Availability. The Facility will be deemed unavailable during any Seller Initiated Test, unless such Seller Initiated Test is performed during a period in which Buyer has agreed in its sole discretion in writing that (A) it Agenda Page 317
30 does not intend to dispatch the Facility and (B) it will deem the Facility available notwithstanding Seller is conducting such Seller Initiated Test during such period. (d) If Buyer or Buyer’s SC receives notice from CAISO of a required test for any Ancillary Services, Buyer or Buyer’s SC must provide Seller telephonic Notice of such test and any related information provided by CAISO within two (2) minutes after receipt of such notice from CAISO and Seller may provide written confirmation to Buyer and Buyer’s SC of such telephonic Notice, and such written confirmation from Seller shall be deemed correct unless Buyer or Buyer’s SC disputes such written confirmation within two (2) Business Days of receipt thereof.
4.5 Testing Costs and Revenues.
(a) For all Buyer Dispatched Tests, Buyer shall be responsible for all Charging Energy and shall be entitled to all CAISO revenues associated with a Facility dispatch during a Buyer Dispatched Test. For all Seller Initiated Tests, (1) Seller shall reimburse Buyer the amount of Buyer’s payment of the Charging Energy for such Seller Initiated Test, and (2) Seller shall be entitled to all CAISO revenues associated with the discharge of such Energy. Buyer shall pay to Seller, in the month following Buyer’s receipt of such CAISO revenues and otherwise in accordance with Exhibit C, all applicable CAISO revenues received by Buyer or Buyer’s SC and associated with the discharge Energy associated with such Seller Initiated Test. (b) Buyer shall be responsible for all costs, expenses and fees payable or reimbursable to its representative(s) witnessing any Facility test. (c) Except as set forth in Sections 4.5(a) and (b), all other costs of any testing of the Facility shall be borne by Seller.
4.6 Facility Operations.
(a) Seller shall operate the Facility in accordance with Prudent Operating Practices.
(b) Seller shall operate the Facility to automatically follow Automatic Generation Control such that the Facility can receive continuous instruction on a 4-second basis. (c) Seller shall maintain a daily operations log for the Facility which shall include but not be limited to information on Energy charging and discharging, electricity consumption and efficiency (if applicable), availability, outages, changes in operating status, inspections and any other significant events related to the operation of the Facility. Information maintained pursuant to this Section 4.6(c) shall be provided to Buyer within fifteen (15) days of Buyer’s request.
(d) Seller shall maintain accurate records with respect to all Capacity Tests. (e) Seller shall maintain and make available to Buyer records, including logbooks, demonstrating that the Facility is operated in accordance with Prudent Operating Practices. Seller shall comply with all reporting requirements and permit on-site audits, investigations, tests and inspections permitted or required under any Prudent Operating Practices.
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31 4.7 Dispatch Notices. Buyer will have the right to dispatch the Facility seven days per week and 24 hours per day (including holidays), by causing Dispatch Notices to be issued, subject to Facility availability and the requirements and limitations set forth in this Agreement, including the Operating Restrictions. Subject to Facility availability and the requirements and limitations set forth in this Agreement, including the Operating Restrictions, each Dispatch Notice will be effective unless and until such Dispatch Notice is modified by the CAISO, Buyer or Buyer’s SC.
If an electronic submittal is not possible for reasons beyond Buyer’s control, Dispatch Notices may be provided (in order of preference) telephonically or by electronic mail to Seller’s personnel designated to receive such communications, as provided by Seller in writing. In addition to any other requirements set forth or referred to in this Agreement, all Dispatch Notices will be made in accordance with Market Notice Timelines as specified in the CAISO Tariff. If Buyer or Buyer’s SC provides any operational instruction telephonically to Seller, Seller may provide written confirmation of such instruction to Buyer and Buyer’s SC, and such written confirmation from Seller shall be deemed correct unless Buyer or Buyer’s SC disputes such written confirmation within two (2) Business Days of receipt thereof.
4.8 [Intentionally Omitted]
4.9 Energy Management.
(a) Charging Generally. Upon receipt of a valid Charging Notice, Seller shall take any and all action necessary to accept the Charging Energy from Buyer at the Delivery Point and to deliver the Charging Energy from the Delivery Point to the Facility in order to provide the 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 Delivery Point to the Facility. Except as otherwise expressly set forth in this Agreement, Buyer shall be responsible for paying all CAISO costs and charges associated with Charging Energy.
(b) Charging Notices. Buyer shall have the right to charge the Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by causing Charging Notices to be issued, subject to availability of the Facility and the requirements and limitations set forth in this Agreement, including the Operating Restrictions. Subject to availability of the Facility and the requirements and limitations set forth in this Agreement, including the Operating Restrictions, each Charging Notice issued in accordance with this Agreement will be effective unless and until Buyer, Buyer’s SC or CAISO modifies such Charging Notice by providing Seller with an updated Charging Notice.
(c) No Unauthorized Charging. Seller shall not charge the Facility during the Delivery Term other than pursuant to a valid Charging Notice (it being understood that Seller may adjust a Charging Notice to the extent necessary to maintain compliance with the Operating Restrictions), or in connection with a Seller Initiated Test (including Facility maintenance or a Capacity Test), or pursuant to a notice from CAISO, the Transmission Provider, or any other Governmental Authority. If, during the Delivery Term, Seller charges the Facility (i) to a Stored Energy Level greater than the Stored Energy Level provided for in a Charging Notice, or (ii) in violation of the first sentence of this Section 4.9(c), then (x) Seller shall pay Buyer the cost of such Energy associated with such charging of the Facility, and (y) Buyer shall be entitled to discharge Agenda Page 319
32 such Energy and entitled to all of the CAISO revenues and other benefits (including Product) associated with such discharge.
(d) No Unauthorized Discharging. Seller shall not discharge the Facility during the Delivery Term other than pursuant to a valid Discharging Notice (it being understood that Seller may adjust a Discharging Notice to the extent necessary to maintain compliance with the Operating Restrictions), or in connection with a Seller Initiated Test (including Facility maintenance or a Capacity Test), or pursuant to a notice from the Transmission Provider or Governmental Authority. Buyer shall have the right to discharge the Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by causing Discharging Notices to be issued, subject to the requirements and limitations set forth in this Agreement. Each Discharging Notice issued in accordance with this Agreement will be effective unless and until Buyer’s SC or the CAISO modifies such Discharging Notice by providing Seller with an updated Discharging Notice.
(e) Unauthorized Charges and Discharges. If Seller or any third party charges, discharges or otherwise uses the 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 the failure to implement such proceduresshall be an Event of Default under Article 11.
(f) CAISO Dispatches. During the Delivery Term, CAISO Dispatches shall have priority over any Charging Notice or Discharging Notice issued by Buyer or Buyer’s SC, and Seller shall have no liability for violation of this Section 4.9 or any Charging Notices or Discharging Notice and the Facility will be deemed available for all purposes hereunder 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 Facility is capable of responding to a CAISO Dispatch, but the Facility deviates from a CAISO Dispatch, Seller shall be responsible for all CAISO charges and penalties (including Imbalance Energy charges) resulting from such deviation (in addition to, but without duplication of, any Buyer remedy related to overcharging of the Facility as set forth in Section 4.9(c)).
(g) Pre-Commercial Operation Date Period, etc. Prior to CAISO Commercial Operation, (i) Buyer shall have no rights to issue or cause to be issued Charging Notices or Discharging Notices, (ii) Seller or its designated SC shall be the Scheduling Coordinator for the Facility and Seller shall have exclusive rights to charge and discharge the Facility, (iii) Buyer and Buyer’s SC shall reasonably coordinate and cooperate with Seller with respect to Facility testing (including for Test Energy), and (iv) all CAISO costs, revenues, penalties and other amounts owing to or paid by CAISO in respect of the Facility testing shall be for Seller’s account. Upon CAISO Commercial Operation, Buyer or its designated SC shall be the Scheduling Coordinator for the Facility, and Buyer shall have exclusive rights to issue or cause to be issued Charging Notices or Discharging Notices and all CAISO costs, revenues, penalties and other amounts owing to or paid by CAISO in respect of the Facility operations shall be for Buyer’s account. For the period from CAISO Commercial Operation until the Commercial Operation Date, Buyer shall pay to Seller fifty percent (50%) of the Monthly Capacity Payment, pro-rated on a daily basis.
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33 (h) Curtailments. Notwithstanding anything in this Agreement to the contrary, during any Settlement Interval, Curtailment Orders applicable to such Settlement Interval shall have priority over any Dispatch Notices applicable to such Settlement Interval, and Seller shall have no liability for violation of this Section 4.9 or any Dispatch Notice and the Facility will be deemed available for all purposes hereunder if and to the extent such violation is caused by Seller’s compliance with any Curtailment Order 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 Dispatch Notices during any Curtailment Order, subject to availability of the Facility and the requirements and limitations set forth in this Agreement, including the Operating Restrictions.
4.10 Capacity Availability Notice.
(a) No less than thirty (30) days before the beginning of Commercial Operation, and thereafter ten (10) Business Days before the beginning of each month during the Delivery Term, Seller shall provide to Buyer and the SC (if applicable) a non-binding forecast of the hourly expected Available Capacity, and (ii) Available Storage Capability, for each day of the following month in a form substantially similar to Exhibits F-1 and F-2, as applicable (“Monthly Forecast”). (b) During the Delivery Term, no later than two (2) Business Days before each schedule day for the Day-Ahead Market in accordance with WECC scheduling practices, Seller shall provide Buyer and the SC (if applicable) with an hourly schedule of the Available Capacity that the Facility is expected to have for each hour of such schedule day (including, in each case, as such availability may be adjusted as required by the CAISO Tariff for reporting to CAISO) (the “Availability Notice”). Seller shall provide Availability Notices (including updated Availability Notices) using the form attached in Exhibit G, or other form as reasonably requested by Buyer, by (in order of preference) electronic mail or telephonically to Buyer personnel or its Scheduling Coordinator designated to receive such communications.
(c) Seller shall notify Buyer and the SC (if applicable) as soon as practicable with an updated Monthly Forecast and Availability Notice, as applicable, if the Available Capacity of the Facility (including, in each case, as such availability may be adjusted as required by the CAISO Tariff for reporting to CAISO) changes or is expected to change after Buyer’s receipt of a Monthly Forecast or Availability Notice. Seller shall accommodate Buyer’s reasonable requests for changes in the time of delivery of Availability Notices.
4.11 Outages.
(a) Planned Outages.
(i) No later than January 15, April 15, July 15 and October 15 of each Contract Year, and at least sixty (60) days prior to the Guaranteed Commercial Operation Date, Seller shall submit to Buyer Seller’s schedule of proposed Planned Outages (“Outage Schedule”) for the following twelve (12)-month period in a form reasonably agreed to by Buyer. Within twenty (20) Business Days after its receipt of an Outage Schedule, Buyer shall give Notice to Seller of any reasonable request for changes to the Outage Schedule, and Seller shall, consistent with Prudent Operating Practices, accommodate Buyer’s requests regarding the timing of any Planned Agenda Page 321
34 Outage. Seller may propose changes to any previously scheduled Planned Outage at least fifteen (15) days prior to such Planned Outage. Buyer shall review each such change and shall advise Seller within three (3) days of Buyer’s receipt thereof, in Buyer’s sole discretion but consistent with Prudent Operating Practices, whether such change is acceptable or Buyer may propose alternate dates for the requested scheduled maintenance. Seller shall cooperate with Buyer to arrange and coordinate all Planned Outages with the CAISO. Seller shall communicate to Buyer all changes to a Planned Outage and estimated time of return of the Facility as soon as practicable after the condition causing the change becomes known to Seller. (ii) If reasonably required in accordance with Prudent Operating Practices, Seller may perform maintenance at a different time than maintenance scheduled pursuant to Section 4.11(a)(i). Seller shall provide Notice to Buyer within the time period determined by the CAISO for the Facility, as a Resource Adequacy Resource that is subject to the Availability Standards, to qualify for an “Approved Maintenance Outage” under the CAISO Tariff (or such shorter period as may be reasonably acceptable to Buyer based on the likelihood of dispatch by Buyer), and Seller shall limit maintenance repairs performed pursuant to this Section
4.11(a)(ii) to periods when Buyer does not reasonably believe the Facility will be dispatched. (b) No Planned Outages During Summer Months. Except as scheduled by the Parties under Section 4.11(a)(ii), no outages 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. (c) Notice of Unplanned Outages. Seller shall notify Buyer by telephoning Buyer’s Scheduling Coordinator no later than ten (10) minutes following the occurrence of an Unplanned Outage, or if Seller has knowledge that an Unplanned Outage will occur, within twenty (20) minutes of determining that such Unplanned Outage will occur. Seller shall relay outage information to Buyer as required by the CAISO Tariff within twenty (20) minutes of the Unplanned Outage. Seller shall communicate to Buyer the estimated time of return of the Facility as soon as practical after Seller has knowledge thereof. (d) Inspection. In the event of an Unplanned Outage, Buyer shall have the option to inspect the Facility and all records relating thereto on any Business Day and at a reasonable time and Seller shall reasonably cooperate with Buyer during any such inspection.
Buyer shall comply with Seller’s safety and security rules and instructions during any inspection, and shall not interfere with work on or operation of the Facility. (e) Reports of Outages. Seller shall promptly prepare and provide to Buyer, all reports of Unplanned Outages or Planned Outages that Buyer may reasonably require for the purpose of enabling Buyer to comply with CAISO requirements or any applicable Laws.
ARTICLE 5
TAXES, GOVERNMENTAL AND ENVIRONMENTAL COSTS
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 Agenda Page 322
35 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 Charging Energy and the delivery to and purchase by Buyer of Product that are imposed on Product at and after its delivery to Buyer at the time and place contemplated under this Agreement (other than withholding or other Taxes imposed on Seller’s income, revenue, receipts or employees). If a Party is required to remit or pay Taxes that are the other Party’s responsibility hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement from the other for such Taxes. In the event any sale of Product hereunder is exempt from or not subject to any particular Tax, Buyer shall provide Seller with all necessary documentation to evidence such exemption or exclusion within thirty (30) days after the date Buyer makes such claim. Buyer shall indemnify, defend, and hold Seller harmless from any liability with respect to Taxes for which Buyer is responsible hereunder and from which Buyer claims it is exempt.
5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefor from the other Party. All Product delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Product.
5.3 Environmental Costs. Seller shall be solely responsible for the following, excluding, however, environmental related costs, taxes, charges, or fees of any type arising out of or related to Charging Energy or Facility Energy where such costs are assessed or arise at, or on the grid side of, the Delivery Point, all of which costs shall (as between Seller and Buyer) be the sole responsibility of Buyer:
(a) All Environmental Costs;
(b) All taxes, charges or fees imposed on the Facility or Seller by a Governmental Authority for Greenhouse Gas emitted by or attributable to the Facility during the Delivery Term;
(c) Seller’s obligations listed under “Compliance Obligation” in the GHG Regulations, and
(d) All other costs associated with the implementation and regulation of Greenhouse Gas emissions (whether in accordance with the California Global Warming Solutions Act of 2006, Assembly Bill 32 (2006) and the regulations promulgated thereunder, including the GHG Regulations, or any other federal, state or local legislation to offset or reduce any Greenhouse Gas emissions implemented and regulated by a Governmental Authority) with respect to the Facility and/or Seller.
ARTICLE 6
MAINTENANCE AND REPAIR OF THE FACILITY
6.1 Maintenance of the Facility.
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36 (a) Seller shall, as between Seller and Buyer, be solely responsible for the operation and maintenance of the Facility and the delivery of the Product, and shall comply with applicable Law and Prudent Operating Practices relating to the operation and maintenance of the Facility. Seller shall maintain and deliver maintenance and repair records of the Facility to Buyer’s scheduling representative upon request.
(b) Seller shall promptly make all necessary repairs to the Facility, and any portion thereof, and take all actions necessary in order to provide the Product to Buyer in accordance with the terms of this Agreement (and, at a minimum, the Performance Guarantees).
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 in 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 and the Interconnection Agreement may be subject to joint ownership and shared maintenance and operation arrangements; provided, such agreements shall (i) permit Seller to perform or satisfy, and shall not purport to limit, Seller’s obligations hereunder, (ii) provide for separate metering of the Facility, (iii) shall not reduce the interconnection capacity under the Interconnection Agreement available for the Facility’s priority use below the Interconnection Capacity Limit, (iv) provide that any other generating or energy storage facilities not included in the Facility but using Shared Facilities shall not be included within the Facility’s CAISO Resource ID, and (v) provide that in the event of any curtailment of output from generating or energy storage facilities using the Shared Facilities that is not specific to one or more CAISO Resource IDs, the Facility shall not be allocated more than its pro rata portion of the curtailment instruction based on its pro rata allocation of the Shared Facilities capacity prior to such curtailment or reduction. Seller shall not, and shall not permit any affiliate to, allocate to other parties a share of the total interconnection capacity under the Interconnection Agreements in excess of an amount equal to the total interconnection capacity under the Interconnection Agreements minus the Interconnection Capacity Limit.
ARTICLE 7
METERING
7.1 Metering.
(a) Seller shall measure the amount of Charging Energy and Facility Energy using the Facility Meter, which will be subject to adjustment in accordance with applicable CAISO meter requirements and Prudent Operating Practices, including to account for Electrical Losses.
Seller shall separately meter all Station Use and all Auxiliary Use. The Facility Meter will be Agenda Page 324
37 operated pursuant to applicable CAISO-approved calculation methodologies and maintained as Seller’s cost. Each meter shall be kept under seal, such seals to be broken only when the Facility 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 Facility Meter data to Buyer in a form reasonably acceptable to Buyer, and consents to Buyer obtaining from CAISO the CAISO meter data directly relating to the Facility and all inspection, testing and calibration data and reports. Seller and Buyer shall cooperate, and Buyer shall cause its SC to 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. (b) Section 7.1(a) is based on the Parties’ mutual understanding as of the Effective Date that (i) the CAISO requires the Facility Meter to be programmed for Electrical Losses as set forth in the definition of Electrical Losses in this Agreement and (ii) the automatic adjustments to Charging Notices and Discharging Notices as set forth in the definitions of Charging Notice and Discharging Notice in this Agreement will not result in Seller violating, or incurring any costs, penalties or charges under the CAISO Tariff. If any of the foregoing mutual understandings in (i) or (ii) between the Parties become incorrect during the Delivery Term, the Parties shall cooperate in good faith to make any amendments and modifications to the Facility and this Agreement as are reasonably necessary to conform this Agreement to the CAISO Tariff and avoid, to the maximum extent practicable, any CAISO charges, costs or penalties that may be imposed on either Party due to non-conformance with the CAISO Tariff, such agreement not to be unreasonably delayed, conditioned or withheld.
7.2 Meter Verification. Annually, if Seller has reason to believe there may be a Facility Meter malfunction, or upon Buyer’s reasonable request, Seller shall test the Facility 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 Facility 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 Facility 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 Facility Meter test shall be adjusted for the amount of the inaccuracy on the assumption that the inaccuracy persisted during one-half of such period if such adjustments are accepted by CAISO; provided, such period may not exceed twelve (12) months.
ARTICLE 8
INVOICING AND PAYMENT; CREDIT
8.1 Invoicing. Seller shall use commercially reasonable 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 Charging Energy, Station Use, Idle Period Auxiliary Use for which Seller owes reimbursement to Buyer, Facility Energy, and the amount of Bridge Capacity or Replacement RA delivered to Buyer (if any) and (ii) data showing a calculation of the Monthly Capacity Payment, Monthly Bridge Capacity Payment, and other relevant data for the prior month; and (b) be in a format reasonably specified Agenda Page 325
38 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.
8.2 Payment. Buyer shall make payment to Seller of Monthly Capacity Payments for Product (and any other amounts due) by wire transfer or ACH payment to the bank account provided on each monthly invoice. Buyer shall pay undisputed invoice amounts by the later of (a) ten (10) Business Days after Buyer’s receipt of the invoice from Seller, and (b) the thirtieth (30th) day of the month after the operational month for which such invoice was rendered; provided, if such due date falls on a weekend or legal holiday, such due date shall be the next Business Day.
Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on an annual Interest Rate equal to the prime rate published on the date of the invoice in The Wall Street Journal (or, if The Wall Street Journal is not published on that day, the next succeeding date of publication), plus two percent (2%) (the “Interest Rate”). If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day.
8.3 Books and Records. To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least two (2) years or as otherwise required by Law. Upon fifteen (15) days’ Notice to the other Party, either Party shall be granted reasonable access to the accounting books and records within the possession or control of the other Party pertaining to all invoices generated pursuant to this Agreement. Seller acknowledges that in accordance with California Government Code Section 8546.7, Seller may be subject to audit by the California State Auditor with regard to Seller’s performance of this Agreement because the compensation under this Agreement exceeds $10,000.
8.4 Payment Adjustments; Billing Errors. Payment adjustments shall be made if Buyer or Seller discovers there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section 8.5 or an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO, or there is determined to have been a meter inaccuracy sufficient to require a payment adjustment. 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 Agenda Page 326
39 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. Seller shall maintain the Development Security in full force and effect until Buyer is required to return such Development Security hereunder. Upon the earlier of (a) Seller’s delivery of the Performance Security, or (b) sixty (60) days after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement.
8.8 Seller’s Performance Security. To secure its obligations under this Agreement, Seller shall deliver Performance Security to Buyer on or before the Commercial Operation Date.
Seller shall maintain the Performance Security in full force and effect, and Seller shall within ten (10) Business Days after any draw thereon replenish the Performance Security in the event Buyer collects or draws down any portion of the Performance Security for any reason permitted under this Agreement other than to satisfy a Termination Payment, until the following have occurred: (a) the Delivery Term has expired or terminated early; and (b) all payment obligations of Seller due and payable under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Performance Security.
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest (“Security Interest”) in, and lien on (and right to net against), and assignment of the Development Security, Performance Security, any other cash collateral and cash equivalent collateral posted pursuant to Sections 8.7 Agenda Page 327
40 and 8.8 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s Security Interest in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.
Upon or any time after the occurrence of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Development Security or Performance Security, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.9):
(a) Exercise any of its rights and remedies with respect to the Development Security and Performance Security, including any such rights and remedies under Law then in effect;
(b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Development Security or Performance Security; and (c) Liquidate all Development Security or Performance Security (as applicable) then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.
Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller’s obligations under this Agreement (Seller remains liable for any amounts owing to Buyer after such application), subject to Buyer’s obligation to return any surplus proceeds remaining after such obligations are satisfied in full.
ARTICLE 9
NOTICES
9.1 Addresses for the Delivery of Notices. Any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the address set forth in Exhibit N or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.
9.2 Acceptable Means of Delivering Notice. Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered as follows: (a) if sent by United States mail with proper first class postage prepaid, three (3) Business Days following the date of the postmark on the envelope in which such Notice was deposited in the United States mail; (b) if sent by a regularly scheduled overnight delivery carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees, the next Business Day after the same is delivered by the sending Party to such carrier; (c) if sent by electronic communication (including electronic mail or other electronic means) at the time indicated by the time stamp upon delivery and, if after 5 pm, on the next Business Day; or (d) if delivered in person, upon receipt by the receiving Party. Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch information or requests, may be sent by electronic Agenda Page 328
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42 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 order to claim a Force Majeure Event, the claiming Party, within fourteen (14) days after becoming aware of a reasonable likelihood of an impact on the Claiming Party’s performance hereunder following the initial occurrence of the claimed Force Majeure Event, must give the other Party Notice describing the particulars of the occurrence in substantially the form set forth in Exhibit W, (b) provide timely evidence reasonably sufficient to establish that the occurrence constitutes Force Majeure as defined in this Agreement, and (c) 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.
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) plus the payment of Commercial Operation Delay Damages equal or exceed two hundred seventy (270) days, and Seller has demonstrated to Buyer’s reasonable satisfaction that Seller’s failure to achieve COD by the Guaranteed Commercial Operation Date (as extended) was the result of delays that would have otherwise entitled to Seller to two hundred seventy (270) days of Development Cure Period delays but for the one hundred eighty (180)-day limitation, then Seller may terminate this Agreement upon Notice to Buyer. Upon any such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.1(b), and Buyer shall promptly return to Seller any Development Security then held by Buyer plus the full amount of Commercial Operation Delay Damages paid by Seller, less any amounts drawn in accordance with this Agreement. If the cause of the delays that would have otherwise entitled to Seller to more than one hundred eighty (180) days of Development Cure Period delays but for the one hundred eighty (180)-day limitation ends prior to two-hundred seventy (270) days of delays and Seller has paid Commercial Operation Delay Damages for the number of days in excess of the one hundred eighty (180)-day limitation, then Buyer shall have the right, in its sole discretion, to either (i) extend the Guaranteed Commercial Operation Date beyond the date on which the cause of the Development Cure Period delays ends by the number of days of Commercial Operation Delay Damages paid by Agenda Page 330
43 Seller, or (ii) to terminate this Agreement without liability of either Party to the other and return to Seller any Development Security then held by Buyer plus the full amount of Commercial Operation Delay Damages paid by Seller, less any amounts drawn in accordance with this Agreement.
(b) If a Force Majeure Event has occurred after the Commercial Operation Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder in any material respect, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon Notice to the other Party. Upon any such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section
2.1(b), and Buyer shall promptly return to Seller any Performance Security then held by Buyer, less any amounts drawn in accordance with this Agreement.
ARTICLE 11
DEFAULTS; REMEDIES; TERMINATION
11.1 Events of Default. An “Event of Default” shall mean, (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30)-day period despite exercising commercially reasonable efforts); (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default set forth in this Section 11.1; and except for (A) failure to provide Capacity Attributes, the exclusive remedies for which are set forth in Section 3.5, (B) failure to provide Ancillary Services, the exclusive remedies for which are set forth in Section 4.3(d), Exhibit C, and Exhibit P, and (C) failures related to the Annual Capacity Availability that do not trigger the provisions of Section
11.1(b)(iii), the exclusive remedies for which are set forth in Exhibit C and Exhibit P, and (D) failures related to the Efficiency Rate, the exclusive remedies for which are set forth in Exhibit C) 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)-day period despite exercising commercially reasonable efforts);
(iv) such Party becomes Bankrupt;
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45 replenish the Performance Security amount in accordance with this Agreement in the event Buyer draws against it for any reason other than to satisfy a Termination Payment; (v) with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer either (1) cash, or (2) a Letter of Credit from a different issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in the amount required hereunder within ten (10) Business Days after Seller receives Notice of the occurrence of any of the following events:
(A) the issuer of the outstanding Letter of Credit shall fail to maintain a Credit Rating of at least A- by S&P or A3 by Moody’s; (B) the issuer of such Letter of Credit becomes Bankrupt; (C) the issuer of the outstanding Letter of Credit shall fail to comply with or perform its obligations under such Letter of Credit and such failure shall be continuing after the lapse of any applicable grace period permitted under such Letter of Credit; (D) the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit; (E) the issuer of the outstanding Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit; (F) such Letter of Credit fails or ceases to be in full force and effect at any time; or
(G) Seller shall fail to renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit and as provided in accordance with this Agreement, and in no event less than sixty (60) days prior to the expiration of the outstanding Letter of Credit.
11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (“Non-Defaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“Early Termination Date”) that terminates this Agreement (the “Terminated Transaction”) and ends the Delivery Term effective as of the Early Termination Date;
(b) to accelerate all amounts owing between the Parties, and to collect as liquidated damages (i) the Damage Payment, or (ii) the Termination Payment, as applicable, in each case calculated in accordance with Section 11.3 below; (c) to withhold any payments due to the Defaulting Party under this Agreement; Agenda Page 333
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49 11.8 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
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 3.4, 3.5, 11.2 AND 11.3, AND AS Agenda Page 337
50 PROVIDED IN EXHIBIT B, EXHIBIT C, 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 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 Agenda Page 338
51 terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) The Facility is located in the State of California. (f) Neither Seller nor its Affiliates has been notified by any existing or anticipated supplier or service provider, that the disease designated COVID-19 or the related virus designated SARS-CoV-2 have caused or are reasonably likely to cause a delay in the construction of the Facility or the delivery of materials necessary to complete the Facility, in each case that would cause the Construction Start Date to be later than the Guaranteed Construction Start Date or the Commercial Operation Date to be later than the Guaranteed Commercial Operation Date.
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.
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52 (e) Buyer warrants and covenants that with respect to its contractual obligations under this Agreement, it will not claim immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (1) suit, (2) jurisdiction of court, (3) relief by way of injunction, order for specific performance or recovery of property, (4) attachment of assets, or (5) execution or enforcement of any judgment.
(f) Buyer is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California.
(g) Buyer cannot assert sovereign immunity as a defense to the enforcement of its obligations under this Agreement.
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 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.
ARTICLE 14
ASSIGNMENT
14.1 General Prohibition on Assignments. Except as provided below in this Article 14, neither Party may voluntarily assign this Agreement or its rights or obligations under this Agreement, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed. Any Change of Control of Seller (whether voluntary or by operation of law) will be deemed an assignment and will require the prior written consent of Buyer, which consent shall not be unreasonably withheld, conditioned or delayed; provided, a Change of Control of Seller shall not require Buyer’s consent and will not be subject to Section 14.2 or Section 14.3 if the assignee or transferee is a Permitted Transferee. Any assignment made without the required written consent, or in violation of the conditions to Agenda Page 340
53 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, Buyer shall in good faith work with Seller and Lender to execute a consent to collateral assignment of this Agreement substantially in the form attached hereto as Exhibit S and with such changes as may be reasonably requested by Lender (“Consent to Collateral Assignment”).
14.3 Permitted Assignment by Seller. Seller may, without the prior written consent of Buyer, transfer or assign this Agreement to: (a) an Affiliate of Seller or (b) any Person succeeding to all or substantially all of the assets of Seller (whether voluntary or by operation of law); if, and only if:
(a) the assignee is a Permitted Transferee;
(b) Seller has given Buyer Notice at least fifteen (15) Business Days before the date of such proposed assignment; and
(c) Seller has provided Buyer a written agreement signed by the Person to which Seller wishes to assign its interests that (x) provides that such Person will assume all of Seller’s obligations and liabilities under this Agreement upon such transfer or assignment and (y) certifies that such Person meets the definition of a Permitted Transferee.
Notwithstanding the foregoing, any assignment by Seller, its successors or assigns under this Section 14.3 shall be of no force and effect unless and until such Notice and agreement by the assignee have been received and accepted by Buyer.
14.4 Shared Facilities; Portfolio Financing. Without limiting the foregoing, Buyer agrees and acknowledges that Seller may elect to finance all or any portion of the Facility or the Interconnection Facilities or the Shared Facilities (1) utilizing tax equity or cash equity investment, and/or (2) through a Portfolio Financing, which may include cross-collateralization or similar arrangements. In connection with any financing or refinancing of the Facility, the Interconnection Facilities or the Shared Facilities by Seller or any Portfolio Financing, Buyer, Seller, Portfolio Financing Entity (if any), and Lender shall execute and deliver such further consents, approvals and acknowledgments as may be reasonable and necessary to facilitate such transactions; provided, Buyer shall not be required to agree to any terms or conditions which are reasonably expected to have a material adverse effect on Buyer and all reasonable attorney’s fees incurred by Buyer in connection therewith shall be borne by Seller.
ARTICLE 15
DISPUTE RESOLUTION
15.1 Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the Agenda Page 341
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55 16.2 Claims. Promptly after receipt by a Party of any claim or Notice of the commencement of any action, administrative, or legal proceeding, or investigation as to which the indemnity provided for in this Article 16 may apply, the Indemnified Party shall notify the Indemnifying Party in writing of such fact. The Indemnifying Party shall assume the defense thereof with counsel designated by the Indemnifying Party and satisfactory to the Indemnified Party, provided, if the defendants in any such action include both the Indemnified Party and the Indemnifying Party, then the Indemnified Party may employ counsel at its own expense with respect to any claims or demands asserted or sought to be collected against it; provided further, if counsel is employed due to a conflict of interest or because the Indemnifying Party does not assume control of the defense, the Indemnifying Party will bear the expense of this counsel, unless a liability insurer is willing to pay such costs. If the Indemnifying Party fails to assume the defense of a claim meriting indemnification, the Indemnified Party may at the expense of the Indemnifying Party contest, settle, or pay such claim; provided, settlement or full payment of any such claim may be made only following consent of the Indemnifying Party or, absent such consent, written opinion of the Indemnified Party’s counsel that such claim is meritorious or warrants settlement.
Except as otherwise provided in this Article 16, in the event that a Party is obligated to indemnify and hold the other Party and its successors and assigns harmless under this Article 16, the amount owing to the Indemnified Party will be the amount of the Indemnified Party’s damages net of any insurance proceeds received by the Indemnified Party following a reasonable effort by the Indemnified Party to obtain such insurance proceeds.
ARTICLE 17
INSURANCE
17.1 Insurance.
(a) General Liability. Seller shall provide and maintain, at its sole expense, the following types and minimum limits of insurance with a carrier rated “A- VII” or higher by A.M.
Best’s Key Rating Guide: (i) commercial general liability insurance, including products and completed operations, personal injury, and contractual liability insurance, in a minimum amount of One Million Dollars ($1,000,000) per occurrence, and an annual aggregate of not less than Two Million Dollars ($2,000,000), and including Buyer as an additional insured to the extent of liabilities assumed under this Agreement; and (ii) an umbrella 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 per policy terms and conditions. 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.
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56 (d) Business Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with limits of One Million Dollars ($1,000,000) per occurrence. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement.
(e) Construction All-Risk Insurance. Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date, construction all-risk form property insurance covering the Facility during such construction periods, and naming Seller (and Lender if any) as the loss payee. (f) Property Damage Insurance. Seller shall maintain or cause to be maintained during the Delivery Term, property damage insurance with a policy limit equal to the full replacement cost of the Facility or maximum foreseeable loss limit consistent with Prudent Industry Practices on a per occurrence basis. Sub-limits for natural catastrophe perils are acceptable as are sub-limits which are regularly applied per Prudent Industry Practices. (g) Pollution Liability Insurance. Seller shall maintain or cause to be maintained during the Contract Term, pollution liability insurance in an amount not less than Two Million Dollars ($2,000,000) each occurrence covering losses involving hazardous material(s) and caused by pollution incidents or conditions that arise from any subcontractor’s performance or lack of performance of work under this Agreement, or might be required by federal, state, regional, municipal, and local laws, including coverage for bodily injury, sickness, disease, mental anguish or shock sustained by any person, including death, property damage including the resulting loss of use thereof, clean-up costs, and the loss of use of tangible property that has not been physically damaged or destroyed, and defense costs. If such coverage is on a “claims made” policy form, any applicable “retroactive date” shall be no later than the Effective Date and shall be maintained for at least two (2) years beyond the termination of this Agreement, to allow for a reasonable extended reporting period. Such requirement may be satisfied under GL & Umbrella insurance. (h) Subcontractor Insurance. Seller shall require all of its subcontractors to carry: (i) comprehensive general liability insurance with a combined single limit of coverage not less than One Million Dollars ($1,000,000); (ii) workers’ compensation insurance and employers’ liability coverage in accordance with applicable requirements of Law; and (iii) business auto insurance for bodily injury and property damage with limits of one million dollars ($1,000,000) per occurrence and request additional insured status on a primary and non-contributory basis and waivers of subrogation. However, Seller may permit any such Subcontractor to obtain and maintain insurance coverages terms that are customary for subcontractors providing work of the type and scope to be provided and are consistent with Prudent Industry Practices. (i) Evidence of Insurance. No later than (i) ten (10) days after the Effective Date with respect to the coverage described in this Section 17.1, except for the coverage described in clauses (e), (f), and (g), (ii) the Construction Start Date with respect to the coverage described in clauses (e), and (g) of this Section 17.1, and (iii) the Commercial Operation Date with respect to the coverage described in clause (f) of this Section 17.1, 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 Agenda Page 344
57 of any cancellation or termination of coverage. All insurance required herein shall be primary coverage without right of contribution from any insurance of Buyer, and such policies shall be endorsed with a waiver of subrogation in favor of Buyer for all work performed by Seller and its employees and any subrogation rights which may pass to Seller’s insurance carriers for the payment of any claims. 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. (j) 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 provide insurance in accordance with the terms and conditions above. With respect to the required general liability, umbrella liability and commercial automobile liability insurance, Seller shall provide a current, full and complete defense to Buyer, its subsidiaries and Affiliates, and their respective officers, directors, shareholders, agents, employees, assigns, and successors in interest, in response to a third-party claim in the same manner that an insurer would have, had the insurance been maintained in accordance with the terms and conditions set forth above. In addition, alleged violations of the provisions of this Article 17 means that Seller has the initial burden of proof regarding any legal justification for refusing or withholding coverage 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.
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, investors, 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 Agenda Page 345
58 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 shall as soon as practical notify Seller in writing via email that such request has been made. Seller shall be solely responsible for taking at its sole expense whatever legal steps are necessary to prevent release of the Requested Confidential Information to the third party by Buyer. If Seller takes no such action after receiving the foregoing notice from Buyer, Buyer shall, at its discretion, be permitted to comply with the third party’s request or demand and is not required to defend against it. If Seller does take or attempt to take such action, Buyer shall provide timely and reasonable cooperation to Seller, if requested by Seller, and Seller agrees to indemnify and hold harmless Buyer, its officers, employees and agents (“Buyer’s Indemnified Parties”), from any claims, liability, award of attorneys’ fees, or damages, and to defend any action, claim or lawsuit brought against any of Buyer’s Indemnified Parties for Buyer’s refusal to disclose any Requested Confidential Information.
18.3 Irreparable Injury; Remedies. Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party, and expressly acknowledges that monetary damages would be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth herein. Accordingly, Receiving Party acknowledges that any such breach or threatened breach will cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of proving actual damages.
18.4 Further Permitted Disclosure. Notwithstanding anything to the contrary in this Article 18, Confidential Information may be disclosed by the Receiving Party to any of its agents, consultants, contractors, trustees, or actual or potential financing parties (including, in the case of Seller, its Lender(s)), so long as such Person to whom Confidential Information is disclosed agrees in writing to be bound by confidentiality provisions that are at least as restrictive as this Article 18 to the same extent as if it were a Party.
18.5 Press Releases. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed Agenda Page 346
59 upon the contents of any such press release.
ARTICLE 19
MISCELLANEOUS
19.1 Entire Agreement; Integration; Exhibits. This Agreement, together with the Cover Sheet and Exhibits attached hereto constitutes the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. The headings used herein are for convenience and reference purposes only. This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof.
19.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, this Agreement may not be amended by electronic mail communications.
19.3 No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) and/or, to the extent set forth herein, any Lender and/or Indemnified Party.
19.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
19.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S.
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60 348 (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.
19.9 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
19.10 No Recourse to Members of Buyer. Buyer is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or the employees, directors, officers, consultants or advisors of Buyer or its constituent members, in connection with this Agreement.
19.11 Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a “forward contract” within the meaning of the U.S. Bankruptcy Code, and Buyer and Seller are “forward contract merchants” within the meaning of the U.S. Bankruptcy Code. Each Party further agrees that, for all purposes of this Agreement, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any Bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. §366 or another provision of 11 U.S.C. § 101-1532.
19.12 Change in Electric Market Design. If a change in the CAISO Tariff renders this Agreement or any provisions hereof incapable of being performed or administered, then any Party may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to make this Agreement capable of being performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith. If Buyer and Seller are unable, within sixty (60) days after delivery of such request, to agree upon changes to this Agreement or to resolve issues relating to changes to this Agreement, then any Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Article 15. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, and (ii) all of the unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution.
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61 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.
19.14 Recordings. Unless a Party expressly objects to a recording at the beginning of a telephone conversation, each Party consents to the creation of an electronic recording of all telephone conversations between the Parties to this Agreement related to the scheduling of any Product, and that any such recordings will be retained in confidence, secured from improper access, and may be submitted in evidence in any proceeding or action relating to this Agreement, subject to the confidentiality provisions of Article 18. Each Party waives any further notice of such monitoring or recording and agrees to notify its officers and employees of such monitoring or recording and to obtain any necessary consent of such officers and employees. Failure of a Party either to provide such notification or obtain such consent shall not in any way limit the use of the recordings pursuant to this Agreement.
[Signatures on following page]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
SAGEBRUSH ESS IIB, LLC
By:
Name:
Title:
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA, a California
joint powers authority
By:
Name:
Title:
Agenda Page 350
Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Site Name: Sagebrush II
Site includes all or some of the following APNs: 237-031-04 and 237-031-38 City: Mojave
County: Kern
Zip Code: 93501
Latitude and Longitude: 35° 2'31.78"N and 118°15'48.37"W Facility Description: A 40 MWAC / 160 MWh battery energy storage facility located in Kern County, in the State of California, and subject to reduction in size as described in Exhibit B.
Delivery Point: Southern California Edison Company’s Vincent Substation Facility Meter: See Exhibit R
P-node: The PNode designated by CAISO for the Facility at the Southern California Edison Company’s Vincent Substation
Transmission Provider: Southern California Edison Company Agenda Page 351
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, engagement of all applicable contractors, and ordering of all essential equipment and supplies as, in each case, can reasonably be considered necessary so that physical construction of the Facility may begin and proceed to completion without foreseeable interruption of material duration, and Seller’s execution of an engineering, procurement, and construction contract and issuance thereunder of 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 the Construction Start Date to occur no later than the Guaranteed Construction Start Date. (b) Seller may extend the Guaranteed Construction Start Date by paying Daily Delay Damages to Buyer for each day Seller desires to extend the Guaranteed Construction Start Date, not to exceed a total of one hundred twenty (120) days of extensions by such payment of Daily Delay Damages. On or before the date that is ten (10) days prior to the then-current Guaranteed Construction Start Date Seller shall provide notice and payment to Buyer of the Daily Delay Damages for the number of days of extension to the Guaranteed Construction Start Date. This process shall apply to the original Guaranteed Construction Start Date extension period and any subsequent extensions via payment of Daily Delay Damages. If Seller achieves Construction Start prior to the Guaranteed Construction Start Date as extended by the payment of Daily Delay Damages, Buyer shall refund to Seller the Daily Delay Damages for each day Seller achieves Construction Start prior to the Guaranteed Construction Start Date times the Daily Delay Damages, not to exceed the total amount of Daily Delay Damages paid by Seller pursuant to this Section 1(b) of Exhibit B. If Seller achieves Commercial Operation on or before the Guaranteed Commercial Operation Date (not including any extensions to such date resulting from Seller’s payment of Commercial Operation Delay Damages, but as may be extended pursuant to a Development Cure Period and/or the Bridge Capacity Delivery Period), then Buyer shall refund to Seller all Daily Delay Damages paid by Seller, which amounts will be included in the first invoice delivered hereunder after the Commercial Operation Date.
2. Commercial Operation of the Facility. “Commercial Operation” means the condition existing when Seller has fulfilled all of the conditions precedent in Section 2.2 of the Agreement and provided Notice to Buyer substantially in the form of Exhibit H (the “COD Certificate”).
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Exhibit B - 3
will be Buyer’s sole and exclusive remedy in connection with Seller’s termination of the Agreement pursuant to this Section 3 of Exhibit B.
4. Extension of the Guaranteed Dates. The Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date shall, subject to notice and documentation requirements set forth below, be extended on a day-for-day basis (the “Development Cure Period”) for the duration of any and all delays arising out of the following circumstances to the extent (i) the following circumstances are not the result of Seller’s failure to take all commercially reasonable actions to meet its requirements and deadlines, and (ii) such delays could not be mitigated by Seller using commercially reasonable efforts to overcome the delays (provided, if any of the following circumstances occur concurrently, such guaranteed date(s) shall only be extended one (1) per concurrent day of delay):
(a) Seller has not acquired the Material Permits by the date that is thirty (30) days following the Expected Construction Start Date, despite the exercise of diligent and commercially reasonable efforts by Seller; or
(b) a Force Majeure Event occurs; or
(c) the Interconnection Facilities or Reliability Network Upgrades are not complete and ready for the Facility to connect and sell Product at the Delivery Point by the date that is thirty (30) days prior to the Guaranteed Commercial Operation Date, despite the exercise of diligent and commercially reasonable efforts by Seller; or (d) Buyer has not made all necessary arrangements to deliver Charging Energy at the Delivery Point and receive the Facility Energy at the Delivery Point by the Guaranteed Commercial Operation Date.
Seller shall submit any claim for Development Cure Period delays within (x) ten (10) Business Days of the applicable milestone in the case of (a), (c) or (d) above, and (y) fourteen (14) days after becoming aware of a reasonable likelihood of an impact on Seller’s performance hereunder following the initial occurrence of the claimed Force Majeure Event in the case of (b) above, in substantially the form set forth in Exhibit W.
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 one hundred eighty (180) days, for any reason, including a Force Majeure Event, and the cumulative extensions granted to the Guaranteed Commercial Operation Date by the payment of Commercial Operation Delay Damages and any Development Cure Period(s) (other than the extensions granted pursuant to clause 4(d) above) shall not exceed two hundred seventy (270) days. Upon request from Buyer, Seller shall provide documentation demonstrating to Buyer’s reasonable satisfaction that the delays described above did not result from Seller’s actions or failure to take commercially reasonable actions.
5. Failure to Reach Guaranteed Capacity. If, at Commercial Operation, the Installed Capacity is less than one hundred percent (100%) of the Guaranteed Capacity, Seller shall have ninety (90) days after the Commercial Operation Date to install additional capacity Agenda Page 354
Exhibit B - 4
and/or Network Upgrades such that the Installed Capacity is equal to (but not greater than) the Guaranteed Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit I hereto specifying the new Installed Capacity. If Seller fails to construct the Guaranteed Capacity by such date, Seller shall pay “Capacity Damages” to Buyer, in an amount equal to for each
MW that the Guaranteed Capacity exceeds the Installed Capacity, and the Guaranteed Capacity, Exhibit Q and other applicable portions of the Agreement shall be adjusted accordingly. Capacity Damages shall not be offset or reduced by the posting of Development Security, Performance Assurance, or the payment of 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.
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Exhibit C - 1
EXHIBIT C
COMPENSATION
(a) Monthly Compensation. Each month of the Delivery Term (and pro-rated for the first and last month of the Delivery Term if the Delivery Term does not start on the first day of a calendar month), Buyer shall pay Seller a Monthly Capacity Payment equal to (i) the Storage Rate x Effective Capacity x Efficiency Rate Factor, minus (ii) an amount equal to the Monthly Average Cost of Charging Energy, multiplied by the total number of MWhs of Idle Period Auxiliary Use in such month, divided by the Efficiency Rate. Such payment constitutes the entirety of the amount due to Seller from Buyer for the Product. If the Effective Capacity is adjusted pursuant to a Capacity Test other than the first day of a calendar month, payment shall be calculated separately for each portion of the month in which the different Effective Capacity is applicable. “Monthly Average Cost of Charging Energy” means, for each month of the Delivery Term, an amount equal to the Charging Energy-weighted average Real-Time Market Locational Marginal Price at the Delivery Point.
“Efficiency Rate Factor” means:
(i) If the Efficiency Rate is greater than or equal to the Guaranteed Efficiency Rate, then:
Efficiency Rate Factor = 100%
(ii) If the Efficiency Rate is less than the Guaranteed Efficiency Rate, but greater than or equal to %, then:
Efficiency Rate Factor = 100% - [(Guaranteed Efficiency Rate – Efficiency Rate) x .5]
(iii) If the Efficiency Rate is less than %, then:
Efficiency Rate Factor = 0
(b) Capacity Availability Payment True-Up. Each month during the Delivery Term, Buyer shall calculate the year-to-date (YTD) Annual Capacity Availability for the applicable Contract Year in accordance with Exhibit P. If (i) such YTD Annual Capacity Availability is less than ninety percent (90%), or (ii) the final Annual Capacity Availability for the applicable Contract Year is less than the Guaranteed Capacity Availability, Buyer shall (1) withhold the Capacity Availability Payment True-Up Amount from the next Monthly Capacity Payment(s) (the “Capacity Availability Payment True-Up”), and (2) provide Seller with a written statement of the calculation of the YTD Annual Capacity Availability and the Capacity Availability Payment True-Up Amount; provided, if the Capacity Availability Payment True-Up Amount is a negative number for any month prior to the final year-end Capacity Availability Payment True-Up calculation, Buyer shall not be obligated to reimburse Seller any previously withheld Capacity Availability Payment True-Up Amount, except as set forth in the following sentence. If Buyer withholds any Capacity Availability Payment True-Up Amount pursuant to subsection (b)(i) Agenda Page 356
Exhibit C - 2
above, and if the final year-end Capacity Availability Payment True-Up Amount is a negative number, Buyer shall pay to Seller the absolute value of such amount together with the next Monthly Capacity Payment due to Seller.
“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 Capacity Availability Payment True-Up Amounts previously withheld by Buyer in the applicable Contract Year.
“Capacity Availability Factor” means:
(i) If the YTD Annual Capacity Availability times the Effective Capacity is equal to or greater than the Guaranteed Capacity Availability times the Effective Capacity, then:
Capacity Availability Factor = 0
(ii) If the YTD Annual Capacity Availability times the Effective Capacity is less than the Guaranteed Capacity Availability times the Effective Capacity, but the product of (A) (I) YTD Annual Capacity Availability plus (II) Force Majeure Unavailability, times (B) the Effective Capacity is greater than or equal to seventy percent (70%) of the Installed Capacity, then:
Capacity Availability Factor = Guaranteed Capacity Availability – YTD Annual Capacity Availability
(iii) If the product of (A) (I) YTD Annual Capacity Availability plus (II) Force Majeure Unavailability, times (B) the Effective Capacity is less than seventy percent (70%) of the Installed Capacity, then:
Capacity Availability Factor = (Guaranteed Capacity Availability – YTD Annual Capacity Availability) * 1.5 – (Force Majeure Unavailability * 0.5) “Force Majeure Unavailability” means Total YTD Unavailable Calculation Intervals that resulted from a Force Majeure Event for which Seller is the claiming party, divided by the Total YTD Calculation Intervals. provided, if the result of any of the calculations in clauses (ii) or (iii) above is greater than 1.0, then the Capacity Availability Factor will be deemed to be equal to 1.0. (c) Tax Credits. The Parties agree that the Storage Rate is not 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 Agenda Page 357
Exhibit C - 3
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 358
Exhibit D - 1
EXHIBIT D
SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Buyer as Scheduling Coordinator for the Facility. Upon CAISO Commercial Operation, 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 (as applicable) of Charging Energy, Facility Energy and the Product at the Delivery Point. At least thirty (30) days prior to CAISO Commercial Operation, (i) Seller shall take all actions and execute and deliver to Buyer and the CAISO all documents necessary to authorize or designate Buyer or its designated SC as the Scheduling Coordinator for the Facility effective as of CAISO Commercial Operation, and (ii) Buyer shall, and shall cause its designated SC to, take all actions and execute and deliver to Seller and the CAISO all documents necessary to authorize or designate Buyer or its designated SC as the Scheduling Coordinator for the Facility effective as of CAISO Commercial Operation. The Parties acknowledge that they will need to provide the CAISO a fixed date for the transition of the Scheduling Coordinator for the Facility and that the actual date on which CAISO Commercial Operation occurs may be later than the date on which Buyer or its designated SC becomes recognized by CAISO as the Scheduling Coordinator for the Facility. The Parties will cooperate reasonably to minimize any such period and to coordinate CAISO scheduling for the Facility during such period, and Buyer will pass through to Seller all CAISO settlements relating to the Facility with respect to the period prior to CAISO Commercial Operation promptly after Buyer or its designee receives such settlements from the CAISO. On and after CAISO Commercial Operation, 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 for the Facility, and, except as otherwise set forth herein, Seller shall not revoke Buyer’s authorization to act as the Facility’s Scheduling Coordinator unless agreed to by Buyer. Buyer (as the Facility’s SC) shall submit bids to the CAISO in accordance with this Agreement and the applicable CAISO Tariff, protocols and Scheduling practices for Product on a day-ahead, hour-ahead, fifteen-minute market, real time or other market basis that may develop after the Effective Date, as determined by Buyer.
(b) Notices. Buyer (as the Facility’s SC) shall provide Seller with access to a web-based system through which Seller shall submit to Buyer and the CAISO all notices and updates required under the CAISO Tariff regarding the Facility’s status, including, but not limited to, all outage requests, forced outages, forced outage reports, clearance requests, or must offer waiver forms. Seller shall cooperate with Buyer to provide such notices and updates. If the web-based system is not available, Seller shall promptly submit such information to Buyer and the CAISO (in order of preference) telephonically or electronic mail to the personnel designated to receive such information.
(c) CAISO Costs and Revenues. Except as otherwise set forth below, Buyer (as Scheduling Coordinator for the Facility) shall be responsible for CAISO costs (including penalties and other charges) and shall be entitled to all CAISO revenues (including credits, Imbalance Energy revenues, and other payments), including revenues associated with CAISO dispatches, bid cost recovery, Inter-SC Trade credits, or other credits in respect of the Product Scheduled or delivered from the Delivery Point and Charging Energy delivered to the Facility. Seller shall be responsible for all CAISO costs and penalties (including costs associated with Imbalance Energy) Agenda Page 359
Exhibit D - 2
resulting from any deviations from Charging Notices or Discharging Notices or otherwise charging or discharging the Facility when not subject to a Charging Notice or Discharging Notice, or any failure by Seller to abide by the CAISO Tariff, the terms of this Agreement 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). Buyer or its designated SC shall make commercially reasonable efforts to cooperate with Seller to allow Seller to make Resource Adequacy substitutions with respect to such outages as permitted by the CAISO Tariff. 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 (except to the extent any Non-Availability Charges are incurred due to Buyer’s failure to perform its duties as Scheduling Coordinator for the Facility). In addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling, outage reporting, or generator operation, and any such sanctions or penalties are imposed upon the Facility or to Buyer as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties shall be Seller’s responsibility.
(d) CAISO Settlements. Buyer (as the Facility’s SC) shall be responsible for all settlement functions with the CAISO related to the Facility on and after CAISO Commercial Operation. Buyer shall render a separate invoice to Seller for any CAISO payments, charges or penalties (“CAISO Charges Invoice”) for which Seller is responsible under this Agreement.
CAISO Charges Invoices shall be rendered after settlement information becomes available from the CAISO that identifies any CAISO charges. Notwithstanding the foregoing, Seller acknowledges that the CAISO will issue additional invoices reflecting CAISO adjustments to such CAISO charges. Buyer shall review, validate, and if requested by Seller under paragraph (e) below, dispute any charges that are the responsibility of Seller in a timely manner and consistent with Buyer’s existing settlement processes for charges that are Buyer’s responsibilities. Subject to Seller’s right to dispute and to have Buyer pursue the dispute of any such invoices, Seller shall pay the amount of CAISO Charges Invoices within ten (10) Business Days of Seller’s receipt of the CAISO Charges Invoice. If Seller fails to pay such CAISO Charges Invoice within that period, Buyer may net or offset any amounts owing to it for such CAISO Charges Invoices against any future amounts it may owe to Seller under this Agreement. The obligations under this Section (d) of Exhibit D with respect to payment of CAISO Charges Invoices in respect of performance prior to the expiration or termination of this Agreement shall survive the expiration or termination of this Agreement.
(e) Dispute Costs. Buyer (as the Facility’s SC) may be required by Seller to dispute CAISO settlements in respect of the Facility. Seller agrees to pay Buyer’s reasonable 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, except to the extent such dispute arises from Buyer’s failure to perform its duties as Scheduling Coordinator for the Facility. (f) Terminating Buyer’s Designation as Scheduling Coordinator. At least thirty (30) days prior to expiration of this Agreement or as soon as reasonably practicable upon an earlier termination of this Agreement, the Parties will take all actions necessary to terminate the Agenda Page 360
Exhibit D - 3
designation of Buyer as Scheduling Coordinator for the Facility as of 11:59 p.m. on such expiration date.
(g) Master Data File and Resource Data Template. Seller shall provide the data to the CAISO (and to Buyer) that is required for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement. Neither Party shall change such data without the other Party’s prior written consent. (h) NERC Reliability Standards. Buyer (as Scheduling Coordinator) shall cooperate reasonably with Seller to the extent necessary to enable Seller to comply, and for Seller to demonstrate Seller’s compliance with, NERC reliability standards. This cooperation shall include the provision of information in Buyer’s possession that Buyer (as Scheduling Coordinator) has provided to the CAISO related to the Facility or actions taken by Buyer (as Scheduling Coordinator) related to Seller’s compliance with NERC reliability standards.
Agenda Page 361
Exhibit E - 1
EXHIBIT E
PROGRESS REPORTING FORM
Each Progress Report must include the following items:
1. Executive Summary.
2. Facility description.
3. Site plan of the Facility.
4. Description of any material planned changes to the Facility or the Site.
5. Gantt chart schedule showing progress on achieving each of the Milestones.
6. Summary of activities during the previous calendar quarter or month, as applicable, including any OSHA labor hour reports.
7. Forecast of activities scheduled for the current calendar quarter.
8. Written description about the progress relative to Seller’s Milestones, including whether Seller has met or is on target to meet the Milestones.
9. List of issues that are reasonably likely to affect Seller’s Milestones.
10. A status report of start-up activities including a forecast of activities ongoing and after start-up, a report on Facility performance including performance projections for the next twelve (12) months.
11. Progress and schedule of all material agreements, contracts, permits (including Material Permits), approvals, technical studies, financing agreements and major equipment purchase orders showing the start dates, completion dates, and completion percentages.
12. Pictures, in sufficient quantity and of appropriate detail, in order to document construction and startup progress of the Facility, the interconnection into the Transmission System and all other interconnection utility services.
13. Workforce Development or Supplier Diversity Reporting (if applicable). Format to be provided by Buyer.
14. Any other documentation reasonably requested by Buyer.
Agenda Page 362
Exhibit F - 1
EXHIBIT F-1
FORM OF MONTHLY EXPECTED AVAILABLE CAPACITY REPORT
[Available 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 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 363
Exhibit D - 2
EXHIBIT F-2
FORM OF MONTHLY EXPECTED AVAILABLE STORAGE CAPABILITY REPORT [Stored Energy 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 364
Exhibit G - 1
EXHIBIT G
FORM OF DAILY AVAILABILITY NOTICE
Trading Day:
Station: Issued By:
Unit: Issued At:
Unit 100% Available No Restrictions:
Hour Ending Available Capacity Available Storage
Capability
Comments
(MW) (MWh)
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
0:00
Comments:
Agenda Page 365
Exhibit H - 1
EXHIBIT H
FORM OF COMMERCIAL OPERATION DATE CERTIFICATE
This certification (“Certification”) of Commercial Operation is delivered by _______[licensed professional engineer] (“Engineer”) to Clean Power Alliance of Southern California, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Energy Storage Agreement dated _______ (“Agreement”) by and between [Seller] and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
As of _______[DATE]_____, Engineer hereby certifies and represents to Buyer the following:
1. The Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.
2. The Facility’s Installed Capacity is no less than ninety-five percent (95%) of the Guaranteed Capacity and the Facility is capable of charging, storing and discharging Energy, all within the operational constraints and subject to the applicable Operating Restrictions.
3. Authorization to parallel the Facility was obtained by the Transmission Provider, [Name of Transmission Provider as appropriate] on___[DATE]____.
4. The Transmission Provider has provided documentation supporting full unrestricted release of the Facility for Commercial Operation by [Name of Transmission Provider as appropriate] on _______[DATE]_____.
5. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff on _______[DATE]_____.
6. Seller has segregated and separately metered Station Use to the extent reasonably possible in accordance with Prudent Operating Practice, and any such meter(s) have the same or greater level of accuracy as is required for CAISO certified meters used for settlement purposes.
7. The Facility and its meters have been designed and installed in a manner such that all Energy used for Auxiliary Use and Station Use within the Facility is separately metered.
8. The total rated power of the Facility inverters is at least equal to the Installed Capacity (MW) charging and discharging at 45°C ambient air temperature.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Agenda Page 366
Exhibit H - 2
Its:
Date:
Agenda Page 367
Exhibit I - 1
EXHIBIT I
FORM OF CAPACITY TEST CERTIFICATE
This certification (“Certification”) of Capacity Test results 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 Energy Storage 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 that a Capacity Test conducted on [Date] demonstrated (i) an [Installed or Effective] Capacity of __ MW to the Delivery Point at four (4) hours of continuous discharge, (ii) a Battery Charging Factor of __%, and (iii) a Battery Discharging Factor of __%, all 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 368
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 Energy Storage Agreement dated __________ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Seller hereby certifies and represents to Buyer the following:
(1) Construction Start (as defined in Exhibit B of the Agreement) has occurred, and a copy of the notice to proceed that Seller issued to its contractor as part of Construction Start is attached hereto.
(2) the Construction Start Date occurred on _____________ (the “Construction Start Date”); and
(3) the precise Site on which the Facility is located is, which must be within the boundaries of the previously identified Site:
_____________________________________________________________________ (such description shall amend the description of the Site in Exhibit A of the Agreement).
IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as of the ___ day of ________.
[SELLER ENTITY]
By:
Its:
Date:
Agenda Page 369
Exhibit K - 1
EXHIBIT K
FORM OF LETTER OF CREDIT
[Issuing Bank Letterhead and Address]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [XXXXXXX]
Date:
Bank Ref.:
Amount: US$[XXXXXXXX]
Beneficiary:
Clean Power Alliance of Southern California,
a California joint powers authority
801 S Grand, Suite 400
Los Angeles, CA 90017
Ladies and Gentlemen:
By the order of __________ (“Applicant”), we, [insert bank name and address] (“Issuer”) hereby issue our Irrevocable Standby Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) in favor of Clean Power Alliance of Southern California, a California joint powers authority (“Beneficiary”), 801 S Grand, Suite 400, Los Angeles, CA 90017, for an amount not to exceed the aggregate sum of U.S. $[XXXXXX] (United States Dollars [XXXXX] and 00/100) (the “Available Amount”), pursuant to that certain Energy Storage Agreement dated as of ______ and as amended (the “Agreement”) between Applicant and Beneficiary. This Letter of Credit shall become effective immediately and shall be of no further force or effect at 5:00 p.m., California time, on [Date] or, if such day is not a Business Day (as hereinafter defined), on the next Business Day (as may be extended pursuant to the terms of this Letter of Credit, the “Expiration Date”).
For the purposes hereof, “Business Day” shall mean any day on which commercial banks are not authorized or required to close in Los Angeles, California.
Funds under this Letter of Credit are available to Beneficiary by valid presentation on or before 5:00 p.m. California time, on or before the Expiration Date of a copy of this Letter of Credit No. [XXXXXXX] and all amendments accompanied by Beneficiary’s dated statement purportedly signed by Beneficiary’s duly authorized representative, in the form attached hereto as Exhibit A, containing one of the two alternative paragraphs set forth in paragraph 2 therein.
Any full or partial drawing hereunder may be requested by transmitting copies of the requisite documents as described above to the Issuer by facsimile at [facsimile number for draws] or such other number as specified from time-to-time by the Issuer.
Agenda Page 370
The facsimile transmittal shall be deemed delivered when received. Drawings made by facsimile transmittal are deemed to be the operative instrument without the need of originally signed documents.
Issuer hereby agrees that all drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Issuer before the Expiration Date. All correspondence and any drawings (other than those made by facsimile) hereunder are to be directed to [Issuer address/contact]. Issuer undertakes to make payment to Beneficiary under this Standby Letter of Credit within three (3) business days of receipt by Issuer of a properly presented Drawing Certificate. The Beneficiary shall receive payment from Issuer by wire transfer to the bank account of the Beneficiary designated in the Drawing Certificate.
Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance; provided, the Available Amount shall be reduced by the amount of each such drawing.
It is a condition of this Letter of Credit that it shall be deemed automatically extended without an amendment for a one year period (or, if such period ends on a day that is not a Business Day, until the next Business Day thereafter) beginning on the present Expiration Date hereof and upon each anniversary for such date (or, if such period ends on a day that is not a Business Day, until the next Business Day thereafter), unless at least one hundred twenty (120) days prior to any such Expiration Date Issuer has sent Beneficiary written notice by overnight courier service at the address provided below that Issuer elects not to extend this Letter of Credit, in which case it will expire on its then current Expiration Date. No presentation made under this Letter of Credit after such Expiration Date will be honored.
Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements, this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.
Except so far as otherwise stated, this Letter of Credit is subject to the International Standby Practices ISP98 (also known as ICC Publication No. 590), or revision currently in effect (the “ISP”). As to matters not covered by the ISP, the laws of the State of California, without regard to the principles of conflicts of laws thereunder, shall govern all matters with respect to this Letter of Credit.
Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available.
All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: Clean Power Alliance of Southern California, a California joint powers authority, Chief Financial Officer, 801 S Grand, Suite 400, Los Angeles, CA 90017. Only notices to Beneficiary meeting the requirements of this paragraph shall be 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 371
[Bank Name]
___________________________
[Insert officer name]
[Insert officer title]
Agenda Page 372
EXHIBIT A
(DRAW REQUEST SHOULD BE ON BENEFICIARY’S LETTERHEAD)
Drawing Certificate
[Insert Bank Name and Address]
Ladies and Gentlemen:
The undersigned, a duly authorized representative of [ ], [ADDRESS], as beneficiary (the “Beneficiary”) of the Irrevocable Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) issued by [insert bank name] (the “Bank”) by order of __________ (the “Applicant”), hereby certifies to the Bank as follows:
1. Applicant and Beneficiary are party to that certain Energy Storage Agreement dated as of ___________, 20__ (the “Agreement”).
2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________ because a 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 373
Exhibit L - 1
EXHIBIT L
[INTENTIONALLY OMITTED]
Agenda Page 374
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 Energy Storage 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 3.5 of the Agreement, Seller hereby provides the below Replacement RA product information:
Agenda Page 375
Exhibit M - 2
[SELLER ENTITY]
By:
Its:
Date:
Agenda Page 376
Exhibit N - 1
EXHIBIT N
NOTICES
SAGEBRUSH ESS IIB, LLC
(“Seller”)
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA, a California
joint powers authority (“Buyer”)
All Notices:
Street: 437 Madison Avenue, 22nd Floor,
Suite A
City: New York, NY 10022
Attn: Contracts Administrator
Phone: (646) 829-3900
Email: [email protected]
With Copy to
Attn: Jeff Cast
Phone: (646) 829-3909
Email: [email protected]
All Notices:
Street: 801 S Grand, Suite 400
City: Los Angeles, CA 90017
Attn: Chief Executive Officer
Phone: (213) 269-5870
E-mail: [email protected]
Reference Numbers: To be provided.
Duns:
Federal Tax ID Number:
Reference Numbers:
Duns:
Federal Tax ID Number:
Invoices:
Attn: Accounts Payable
Phone: (646) 829-3912
E-mail: [email protected]
Invoices:
Attn: CPA Settlements
Phone: (213) 269-5870
E-mail: [email protected]
Scheduling:
Attn: Naomi Brown
Phone: (661) 428-1130
Email: [email protected]
Scheduling:
Attn: Day Ahead Scheduling
Phone: (817) 303-1104
Email: [email protected]
Confirmations:
Attn: Naomi Brown
Phone: (661) 428-1130
Email: [email protected]
Confirmations:
Attn: Vice President, Power Supply
Email:[email protected]
g
Payments:
Attn: Carrie Lackey, VP Treasurer
Phone: (646) 829-3922
E-mail: [email protected]
Payments:
Attn: Vice President, Power Supply
E-mail: [email protected]
Agenda Page 377
Exhibit N - 2
SAGEBRUSH ESS IIB, LLC
(“Seller”)
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA, a California
joint powers authority (“Buyer”)
Wire Transfer: To be provided.
BNK:
ABA:
ACCT:
Wire Transfer:
BNK: River City Bank
ABA: 121133416
ACCT: XXXXXX8042
Agenda Page 378
Agenda Page 379
Exhibit O - 2
purposes only, use its own metering equipment (at Buyer’s sole cost).
B. Conditions Prior to Testing.
(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 the 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 RTU and Seller’s EMS interface and the ability to record SCADA System data.
(3) Commissioning Checklist. Commissioning shall be successfully completed per manufacturer guidance on all applicable 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. 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 Capacity or 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 SOC 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 SOC reaches 100%, not to exceed five and one-half (5.5) hours of total charging time.
B. Parameters. During each CT, the following parameters shall be measured and recorded simultaneously for the Facility, at two (2) second intervals:
(1) Time;
(2) The amount of Facility Energy;
(3) The amount of Charging Energy;
Agenda Page 380
Exhibit O - 3
(4) The amount of Station Use;
(5) 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); 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 until SOC reaches at least 90% pursuant to A(2) above;
(4) Amount of time between the Facility’s electrical output going from 0 to the maximum sustained discharging level registered during the CT (for purposes of calculating the ramp rate);
(5) Amount of time between the Facility’s electrical input going from 0 to the maximum sustained charging level registered during the CT (for purposes of calculating the ramp rate);
(6) Amount of Charging Energy to go from 0% SOC to 100% SOC; (7) Amount of Facility Energy to go from 100% SOC to 0% SOC. (8) Amount of Charging Energy (as reported under Section II.D(6) above) (such result, “Energy In”);
(9) Amount of Facility Energy (as reported under Section II.D(7) above) (such result, “Energy Out”).
E. Test Conditions.
(1) General. At all times during a CT, the 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 Facility.
Agenda Page 381
Exhibit O - 4
(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.
(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 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 within a reasonable specified time period. 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 the completed Capacity Test Certificate, together with 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.
Seller’s CT report and any submitted Capacity Test Certificate shall be deemed invalid if not delivered to Buyer within (5) Business Days after the completion of any CT. 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 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 Agenda Page 382
Exhibit O - 5
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.
I. Adjustment to Effective Capacity and Efficiency Rate. The Effective 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 time period comprised of (x) the first four (4) hours of discharge, plus (y) the time required for ramping the Facility from 0 MW to the maximum discharging level as limited by CAISO (up to, but not in excess of, the product of (i) (a) the Guaranteed Capacity (in the case of a Commercial Operation Capacity Test, including under Section 5 of Exhibit B) or (b) the Installed Capacity (in the case of any other Capacity Test), multiplied by (ii) four (4) hours) shall be divided by four (4) hours to determine the Effective Capacity, which shall be expressed in MW, and shall be the new Effective Capacity in accordance with Section 4.4(a)(ii) of the Agreement.
(2) The quotient of (x) total amount of Energy Out (as reported under Section II.D(9) above), plus the total amount of Idle Period Auxiliary Use for which Seller is required to reimburse Buyer during the Capacity Test, divided by (y) the total amount of Energy In (as reported under Section II.D(8) above), and expressed as a percentage, shall be recorded as the Efficiency Rate, and shall be used for the calculation of the Efficiency Rate Factor in Exhibit C until updated pursuant to a subsequent Capacity Test.
PART III. INITIAL SUPPLEMENTARY CAPACITY TEST PROTOCOL.
A. Effective Capacity Test
• Procedure:
(1) System Starting State: The Facility will be in the on-line state at 0% SOC. (2) Record the initial value of the SOC.
(3) Command a real power charge that results in an AC power of Facility’s maximum charging level, and continue charging until the earlier of (a) the Facility has reached 100% SOC or (b) five and one-half (5.5) hours have elapsed since the Facility commenced charging.
(4) Record and store the SOC after the earlier of (a) the Facility has reached 100% SOC or (b) five and one-half (5.5) hours of continuous charging.
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Exhibit O - 6
Such data point shall be used for purposes of calculation of the Battery Charging Factor.
(5) Record and store the Charging Energy.
(6) Following a one (1) hour rest period, command a real power discharge that results in an AC power output of the 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 Facility has reached 0% SOC, or (c) the sustained discharging level is at least 2% less than the maximum discharging level. (7) Record and store the SOC after four (4) hours of continuous discharging.
Such data point shall be used for purposes of calculation of the Battery Discharging Factor. If the Facility SOC remains above zero percent (0%) after discharging at a rate at or above the Guaranteed Capacity (or at or above the Installed Capacity after a Commercial Operation Capacity Test) for four (4) consecutive hours pursuant to Part III.A.6(a), the SOC will be deemed 0% for the purposes of calculating the Battery Discharging Factor. (8) Record and store the Facility Energy. Such data point shall be used for purposes of calculation of the Effective Capacity.
(9) If the Facility has not reached 0% SOC pursuant to Section III.A.6, continue discharging the Facility until it reaches a 0% SOC. Record and store the additional Facility Energy, if applicable.
(10) Record and store the Facility Energy (in MWh) as measured at the Facility Meter, if applicable.
• Test Results
(1) The resulting Effective Capacity measurement is the sum of the total Facility Energy at the Facility Meter divided by four (4) hours.
B. AGC Discharge Test
• Purpose: This test will demonstrate the AGC discharge capability to achieve the Facility’s maximum discharging level within 1 second, not including any time required to comply with CAISO-imposed ramp rate limitations.
• 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 Facility active power level at the Facility Meter.
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Exhibit O - 7
(2) Command the Facility to follow a simulated CAISO RIG signal of Pmax at .95 power factor for ten (10) minutes.
(3) Record and store the 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
• Purpose: This test will demonstrate the AGC charge capability to achieve the Facility’s full charging level within 1 second, not including any time required to comply with CAISO-imposed ramp rate limitations.
• 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 Facility active power level at the Facility Meter. (2) Command the Facility to follow a simulated CAISO RIG signal of -Pmax at .95 power factor for ten (10) minutes.
(3) Record and store the 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.
D. Reactive Power Production Test
• Purpose: This test will demonstrate the reactive power production capability of the Facility.
• 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 an agreed-upon predefined reactive power profile. • Procedure:
(1) Record the Facility reactive power level at the Facility Meter. (2) Command the Facility to follow twenty (20) MVAR for ten (10) minutes. (3) Record and store the Facility reactive power response. • System end state: The Facility will be in the on-line state and at a commanded reactive power level of 0 MVAR.
Agenda Page 385
Exhibit O - 8
E. Reactive Power Consumption Test
• Purpose: This test will demonstrate the reactive power consumption capability of the facility.
• 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 an agreed-upon predefined reactive power profile.
• Procedure:
(1) Record the Facility reactive power level at the Facility Meter. (2) Command the Facility to follow negative twenty (-20) MVAR for ten (10) minutes.
(3) Record and store the Facility reactive power response.
System end state: The Facility will be in the on-line state and at a commanded reactive power level of 0 MVAR.
Agenda Page 386
Exhibit P - 1
EXHIBIT P
ANNUAL CAPACITY AVAILABILITY CALCULATION
(a) Following the end of each calendar month during the Delivery Term Buyer shall calculate the year-to-date (YTD) “Annual Capacity Availability” for the current Contract Year using the formula set forth below:
Annual Capacity Availability (%) = 1 –
Unavailable Calculation Intervals
Total YTD Calculation Intervals
“Calculation Interval” or “C.I.” means each successive five-minute interval, but excluding all such intervals which by the express terms of the Agreement are disregarded or excluded.
“Unavailable Calculation Intervals” means the sum of year-to-date unavailable Calculation Intervals for the applicable Contract Year, where for each Calculation Interval:
“A” is the “Available Effective Capacity”, which shall be calculated as the sum of the available capacity of each of the system inverters, in MW AC, expected from all system inverters to (considering the conditions of the Facility in total) receive Charging Energy from and deliver Facility Energy to the Delivery Point, in such Calculation Interval (based on normal operating conditions pursuant to the manufacturer’s guidelines), but “A” shall never exceed the Effective Capacity.
“B” is the “Available Storage Capability”, which shall be calculated as the sum of the following (taking into account the SOC at the time of calculation and the Operating Restrictions): (i) the energy throughput capability (in MWhs) in the applicable Calculation Interval that the Facility is available to be charged (calculated as the available battery capability (in MWh) to receive Charging Energy from the Delivery Point 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 Facility is available to be discharged to the Delivery Point (calculated as the available battery capability (in MWh) to delivery Facility Energy to the Delivery Point in the applicable Calculation Interval x the Battery Discharging Factor). In calculating Available Storage Capability, the “available battery charging capability” and “available battery discharging capability” are calculated Unavailable
Calculation Interval = 1 C.I. x ( 1 – the lesser of:
A
or
B
Effective ) CapacityEffective
Capacity x 4 hrs
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Exhibit P - 2
as the product of (1) the count of available system cells in such Calculation Interval, multiplied by (2) the capability, in MWh, expected from each such system cell (based on normal operating conditions pursuant to the manufacturer’s guidelines) that are able (considering the conditions of the Facility in total) to receive Charging Energy from and deliver Facility Energy to the Delivery Point, but Available Storage Capability shall never exceed the Effective Capacity x four (4) hours.
“Total YTD Calculation Intervals” means, for each applicable Contract Year, the total number of Calculation Intervals year-to-date up through and including the month for which the Annual Storage Capacity Availability is being calculated. (b) The Available Effective Capacity and Available Storage Capability in the above calculations shall be the lower of (i) such amounts reported by Seller’s real-time EMS data feed to Buyer for the Facility for such Calculation Interval, and (ii) Seller’s most recent Availability Notice (as updated pursuant to Section 4.10). Except as otherwise expressly provided in this Agreement, the calculations of Available Effective Capacity and Available Storage Capability in the foregoing sentence shall be based solely on the availability of the Facility to charge or discharge Energy between the Facility and the Delivery Point, as applicable (excluding for reasons at the high-voltage side of the Delivery Point or beyond). Any Calculation Interval in which the Facility fails to maintain connectivity to the CAISO such that it cannot receive ADS or AGC signals shall be deemed an Unavailable Calculation Interval; provided, such Calculation Interval shall not be deemed an Unavailable Calculation Interval if the Facility loses connectivity to the CAISO due to reasons at the high-voltage side of the Delivery Point or beyond, including any failure of CAISO, Buyer, or Buyer’s SC facilities, systems, communications links or other equipment. (c) If the total rated power of the Facility inverters as measured to the Delivery Point is less than the Installed Capacity (measured in MW) for both charging and discharging at less than or equal to 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 when the ambient air temperature exceeds 45°C.
Agenda Page 388
Agenda Page 389
Agenda Page 390
Exhibit R - 1
EXHIBIT R
METERING DIAGRAM
Main Step-up
Transformer
Energy Storage
MW
To 230 kV Interconnection Point – SCE
Vincent substation
Facility Meter/
CAISO Meter
Other
projects
CAISO
Meters
34.5 kV Substation Collection Bus
Main Step-up
Transformers
Other Projects
Other
projects
Facility
MV Transformers/
Inverters
Agenda Page 391
Exhibit S - 1
EXHIBIT S
FORM OF CONSENT TO COLLATERAL ASSIGNMENT
This Consent to Collateral Assignment (this “Consent”) is entered into among (i) Clean Power Alliance of Southern California, a California joint powersauthority (“CPA”), (ii) [Name of Seller], a [Legal Status of Seller] (the “Project Company”), and (iii) [Name of Collateral Agent], a [Legal Status of Collateral Agent], as Collateral Agent for the secured parties under the Financing Documents referred to below (such secured parties together with their successors permitted under this Consent in such capacity, the “Secured Parties”, and, such agent, together with its successors in such capacity, the “Collateral Agent”). CPA, Project Company and Collateral Agent are hereinafter sometimes referred to individually as a “Party” and jointly as the “Parties”.
Capitalized terms used but not otherwise defined in this Consent shall have the meanings ascribed to them in the ESA (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 Energy Storage Agreement, dated as of [Date] [List all amendments as contemplated by Section 3.4] (“ESA”), pursuant to which Project Company will develop, construct, commission, test and operate the Storage Units (the “Project”) and sell the Product to CPA, and CPA will purchase the Product from Project Company;
B. As collateral for Project Company’s obligations under the ESA, Project Company has agreed to provide to CPA certain collateral, which may include Performance Security and Development Security and other collateral described in the ESA (collectively, the “ESA 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 ESA 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 ESA 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 hereto hereby agree as follows:
Agenda Page 392
Exhibit S – 2
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 ESA (subject to CPA’s rights and defenses under the ESA and the terms of this Consent) and accepts any such exercise; provided, insofar as the Collateral Agent exercises any such rights under the ESA or makes any claims with respect to payments or other obligations under the ESA, the terms and conditions of the ESA applicable to such exercise of rights or claims shall apply to Collateral Agent to the same extent as to Project Company.
1.2 Project Company’s Acknowledgement.
Each of Project Company and Collateral Agent hereby acknowledges and agrees that CPA is authorized to act in accordance with Collateral Agent’s instructions, and that CPA shall bear no liability to Project Company or Collateral Agent in connection therewith, including any liability for failing to act in accordance with Project Company’s instructions.
1.3 Right to Cure.
If Project Company defaults in the performance of any of its obligations under the ESA, or upon the occurrence or non-occurrence of any event or condition under the ESA 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 ESA (a “ESA Default”), CPA will not terminate or suspend its performance under the ESA until it first gives written notice of such ESA Default to Collateral Agent and affords Collateral Agent the right to cure such ESA Default within the applicable cure period under the ESA, which cure period shall run concurrently with that afforded Project Company under the ESA. In addition, if Collateral Agent gives CPA written notice prior to the expiration of the applicable cure period under the ESA of Collateral Agent’s intention to cure such ESA Default (which notice shall include a reasonable description of the time during which it anticipates to cure such ESA Default) and is diligently proceeding to cure such ESA Default, notwithstanding the applicable cure period under the ESA, Collateral Agent shall have a period of sixty (60) days (or, if such ESA Default is for failure by the Project Company to pay an amount to CPA which is due and payable under the ESA other than to provide ESA Collateral, thirty (30) days, or, if such ESA Default is for failure by Project Company to provide ESA Collateral, ten (10) Business Days) from the Collateral Agent’s receipt of the notice of such ESA Default from CPA to cure such ESA Default; provided, (a) if possession of the Project is necessary to cure any such non-monetary ESA Default and Collateral Agent has commenced foreclosure proceedings within sixty (60) days after notice of the ESA Default and is diligently pursuing such foreclosure proceedings, Collateral Agent will be allowed a reasonable time, not to exceed one hundred eighty (180) days after the notice of the ESA Default, to complete such Agenda Page 393
Exhibit S – 3
proceedings and cure such ESA Default, and (b) if Collateral Agent is prohibited from curing any such ESA 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 ESA 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 ESA Default upon CPA’s reasonable request.
1.4 Substitute Owner.
Subject to Section 1.7, the Parties agree that if Collateral Agent notifies (such notice, a “Financing Document Default Notice”) CPA that an event of default has occurred and is continuing under the Financing Documents (a “Financing Document Event of Default”) then, upon a judicial foreclosure sale, non-judicial foreclosure sale, deed in lieu of foreclosure or other transfer following a Financing Document Event of Default, Collateral Agent (or its designee) shall be substituted for Project Company (the “Substitute Owner”) under the ESA, and, subject to Sections
1.7(b) and 1.7(c) below, CPA and Substitute Owner will recognize each other as counterparties under the ESA 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 ESA 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 be 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 ESA 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 ESA is terminated, rejected or otherwise invalidated as a result of any bankruptcy, insolvency, reorganization or similar proceeding affecting Project Company, its owner(s) or guarantor(s), and if Collateral Agent or its designee directly or indirectly takes possession of, or title to, the Project (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure) (“Replacement Owner”), CPA shall, and Collateral Agent shall cause Replacement Owner to, enter into a new agreement with one another for the balance of the obligations under the ESA remaining to be performed having terms substantially the same as the terms of the ESA with respect to the remaining Contract Term (“Replacement ESA”); provided, before CPA is required to enter into a Replacement ESA, 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 ESA, to the extent CPA is, or was otherwise prior to its termination as described in this Section 1.5, entitled under the ESA, CPA may suspend performance of its obligations under such Replacement ESA, unless and until all ESA Defaults of Project Company under the ESA or Agenda Page 394
Exhibit S – 4
Replacement ESA have been cured.
1.6 Transfer.
Subject to Section 1.7, a Substitute Owner or a Replacement Owner may assign all of its interest in the Project and the ESA and a Replacement ESA to a natural person, corporation, trust, business trust, joint venture, joint stock company, association, company, limited liability company, partnership, Governmental Authority or other entity (a “Person”) to which the Project is transferred; provided, the proposed transferee shall have demonstrated to CPA’s reasonable satisfaction that such proposed transferee satisfies the requirements of a Permitted Transferee.
1.7 Assumption of Obligations.
(a) Transferee.
Any transferee under Section 1.6 shall expressly assume in a writing reasonably satisfactory to CPA all of the obligations of Project Company, Substitute Owner or Replacement Owner under the ESA or Replacement ESA, as applicable, including posting and collateral assignment of the ESA Collateral. Upon such assignment and the cure of any outstanding ESA Default, and payment of all other amounts due and payable to CPA in respect of the ESA or such Replacement ESA, the transferor shall be released from any further liability under the ESA or Replacement ESA, 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 ESA, including posting and collateral assignment of the ESA Collateral; provided, the obligations of such Substitute Owner shall be no more than those of Project Company under the ESA.
(c) No Liability.
CPA acknowledges and agrees that neither Collateral Agent nor any Secured Party shall have any liability or obligation under the ESAas 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 ESA, 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 ESA, Collateral Agent shall not have any personal liability to CPA under the ESA or Replacement ESA and the sole recourse of CPA in seeking enforcement of such obligations against Collateral Agent shall be to the aggregate interest of the Secured Parties in the Project; 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 ESA, a Replacement ESA or the ESA Collateral.
1.8 Delivery of Notices.
Agenda Page 395
Exhibit S – 5
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 ESA relating to (a) a ESA Default by Project Company under the ESA, (b) any claim regarding Force Majeure by CPA under the ESA, (c) any notice of dispute under the ESA, (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 ESA 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 ESA (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 ESA 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 ESA. 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 ESA is entered into or the ESA is transferred to a Person to whom the Project is transferred pursuant to Section 1.6, CPA shall, until Collateral Agent confirms to CPA in writing that all obligations under the Financing Documents are no longer outstanding, deal exclusively with Collateral Agent in connection with the performance of CPA’s obligations under the ESA, 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 ESA (b) terminate or suspend its performance under the ESA (except in accordance with Section 1.3) or (c) consent to or accept any termination or cancellation of the ESA by Project Company.
SECTION 2. PAYMENTS UNDER THE ESA
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 ESA directly to Project Company. CPA, Project Company, and Collateral Agent acknowledge that CPA will be deemed Agenda Page 396
Exhibit S – 6
to be in compliance with the payment terms of the ESA to the extent that CPA makes payments in accordance with Collateral Agent’s instructions.
2.2 No Offset, Etc.
All payments required to be made by CPA under the ESA shall be made without any offset, recoupment, abatement, withholding, reduction or defense whatsoever, other than that expressly allowed by the terms of the ESA.
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 underthe ESA, 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 ESA 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 ESA 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 ESA 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 ESA; (b) CPA and, to CPA’s actual knowledge, Project Company, has complied with all conditions precedent to the effectiveness of its obligations under the ESA; (c) to CPA’s actual knowledge, no event or Agenda Page 397
Exhibit S – 7
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 ESA; and (d) the ESA 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 ESA, except as previously disclosed in writing and consented to by CPA.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PROJECT COMPANY Project Company makes the following representations and warranties as of the date hereof in favor of the Collateral Agent and CPA:
4.1 Organization.
Project Company is a [Legal Status of Seller] duly organized and validly existing under the laws of the state of its organization, and is duly qualified, authorized to do business and in good standing in every jurisdiction in which it owns or leases real property or in which the nature of its business requires it to be so qualified, except where the failure to so qualify would not have a material adverse effect on its financial condition, its ability to own its properties or its ability to transact its business. Project Company has all requisite power and authority, corporate and otherwise, to enter into and to perform its obligations hereunder and under the ESA, 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 ESA 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.
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 Agenda Page 398
Exhibit S – 8
Company and, to Project Company’s actual knowledge, CPA, has complied with all conditions precedent to the effectiveness of its obligations under the ESA; (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 ESA; and (d) the ESA 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 ESA.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF COLLATERAL AGENT Collateral Agent makes the following representations and warranties as of the date hereof in favor of CPA and Project Company:
5.1 Authorization.
The execution, delivery and performance of this Consent by Collateral Agent have been duly authorized by all necessary corporate or other action on the part of Collateral Agent and Secured Parties.
5.2 Execution and Delivery; Binding Agreement.
This Consent is in full force and effect, has been duly executed and delivered on behalf of Collateral Agent by the appropriate officers of Collateral Agent, and constitutes the legal, valid and binding obligation of Collateral Agent as Collateral Agent for the Secured Parties, enforceable against Collateral Agent (and the Secured Parties to the extent applicable) in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting the enforcement of creditors’ rights generally and (b) general equitable principles (whether considered in a proceeding in equity or at law).
SECTION 6. MICPALLANEOUS
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 ESA (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 ESA] of the ESA, (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.
Agenda Page 399
Exhibit S – 9
(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 ESA. Subject to the foregoing, any legal action or proceeding with respect to this Consent and any action for enforcement of any judgment in respect thereof may be brought in the courts of the State of California or of the United States of America for the Central District of California, and, by execution and delivery of this Consent, each Party hereby accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts and appellate courts from any appeal thereof. Each Party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to its notice address provided pursuant to Section 6.1 hereof. Each Party hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Consent brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing herein shall affect the right of any Party to serve process in any other manner permitted by law.
6.3 Headings Descriptive.
The headings of the several sections and subsections of this Consent are insertedfor 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 ESA or any Replacement ESA, its obligations Agenda Page 400
Exhibit S – 10
under such ESA or Replacement ESA have been fully performed.
6.7 Successors and Assigns.
This Consent shall be binding upon each Party and its successors and assigns permitted under and in accordance with this Consent, and shall inure to the benefit of the other Parties and their respective successors and assignee permitted under and in accordance with this Consent. Each reference to a Person herein shall include such Person’s successors and assigns permitted under and in accordance with this Consent.
6.8 Further Assurances.
CPA hereby agrees to execute and deliver all such instruments and take all such action as may be necessary to effectuate fully the purposes of this Consent.
6.9 Waiver of Trial by Jury.
TO THE EXTENT PERMITTED BY APPLICABLE LAWS, THE PARTIES HEREBY
IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS CONSENT OR ANY MATTER ARISING HEREUNDER. EACH PARTY FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
6.10 Entire Agreement.
This Consent and any agreement, document or instrument attached hereto or referred to herein integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings in respect to the subject matter hereof. In the event of any conflict between the terms, conditions and provisions of this Consent and any such agreement, document or instrument, the terms, conditions and provisions of this Consent shall prevail.
6.11 Effective Date.
This Consent shall be deemed effective as of the date upon which the last Party executes this Consent.
6.12 Counterparts; Electronic Signatures.
This Consent may be executed in one or more counterparts, each of which will be deemed to be an original of this Consent and all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this Consent and of signature pages by 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.
Agenda Page 401
Exhibit S – 11
[Remainder of Page Left Intentionally Blank.]
Agenda Page 402
Exhibit S – 12
IN WITNESS WHEREOF, the Parties hereto have caused this Consent to be duly executed and delivered by their duly authorized officers on the dates indicated below their respective signatures. [NAME OF PROJECT COMPANY],
[Legal Status of Project 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: ___________________________
Agenda Page 403
Exhibit S – 13
SCHEDULE A
[Describe any disclosures relevant to representations and warranties made in Section 3.4] Agenda Page 404
Exhibit S – 14
SCHEDULE B
[Describe any disclosures relevant to representations and warranties made in Section 4.4] Agenda Page 405
Exhibit T - 1
EXHIBIT T
CPM Adjustment Factors
Month Multiplier
January 50%
February 50%
March 50%
April 50%
May 100%
June 100%
July 250%
August 250%
September 250%
October 100%
November 50%
December 50%
Agenda Page 406
Exhibit U - 1
EXHIBIT U
Supply Chain Code of Conduct
Buyer is committed to ensuring that the fundamental human rights of workers are protected, including addressing the potential risks of forced labor, child labor, servitude, human trafficking and slavery across our portfolio.
Our requirements and expectations for Seller’s supply chain are detailed below in our Supply Chain Code of Conduct (“Supply Chain Code”). Seller must comply with all applicable Laws and this Supply Chain Code, even when this Supply Chain Code exceeds the requirements of applicable Law.
These standards are derived from the United Nations Guiding Principles on Business and Human Rights, the Core Conventions of the International Labour Organization (“ILO”), including the ILO Declaration on Fundamental Principles and Rights at Work, the Solar Energy Industries Association Solar Industry Commitment to Environmental & Social Responsibility, and the Responsible Business Alliance Code of Conduct.
1. Freely Chosen Employment
Forced, bonded (including debt bondage) or indentured labor, involuntary or exploitative prison labor, slavery or trafficking of persons is not permitted. This includes transporting, harboring, recruiting, transferring, or receiving persons by means of threat, force, coercion, abduction or fraud for labor or services. There shall be no unreasonable restrictions on workers’ freedom of movement in the facility in addition to unreasonable restrictions on entering or exiting company provided facilities including, if applicable, workers’ dormitories or living quarters. All work must be voluntary, and workers shall be free to leave work at any time or terminate their employment without penalty if reasonable notice is given as per worker’s contract. Employers, agents, and sub-agents’ may not hold or otherwise destroy, conceal, or confiscate identity or immigration documents, such as government-issued identification, passports, or work permits. Employers can only hold documentation if such holdings are required by law. In this case, at no time should workers be denied access to their documents. Workers shall not be required to pay employers’ agents or sub-agents’ recruitment fees or other related fees for their employment. If any such fees are found to have been paid by workers, such fees shall be repaid to the worker.
2. Young Workers
Child labor is not to be used in any stage of manufacturing. The term “child” refers to any person under the age of 15, or under the age for completing compulsory education, or under the minimum age for employment in the country, whichever is greatest. Suppliers shall implement an appropriate mechanism to verify the age of workers. The use of legitimate workplace learning programs, which comply with all laws and regulations, is supported.
Workers under the age of 18 shall not perform work that is likely to jeopardize their health or safety, including night shifts and overtime. Suppliers shall ensure proper management of student workers through proper maintenance of student records, rigorous due diligence of educational partners, and protection of students’ rights in accordance with applicable laws and regulations. Suppliers shall provide appropriate support and training to all student Agenda Page 407
Exhibit U - 2
workers. In the absence of local law, the wage rate for student workers, interns, and apprentices shall be at least the same wage rate as other entry-level workers performing equal or similar tasks. If child labor is identified, assistance/remediation is provided. Seller has a policy that it does not employ workers under the age of 18.
3. Working Hours
Studies of business practices clearly link worker strain to reduced productivity, increased turnover, and increased injury and illness. Working hours are not to exceed the maximum set by federal and state laws. Further, a workweek should not be more than 60 hours per week, including overtime, all overtime must be voluntary, and workers shall be allowed at least one day off every seven days, in each case, except in emergency or unusual situations.
4. Wages and Benefits
Compensation paid to workers shall comply with all applicable wage laws, including those relating to minimum wages, overtime hours and legally mandated benefits. In compliance with federal and state laws, workers shall be compensated for overtime at pay rates greater than regular hourly rates. Deductions from wages as a disciplinary measure shall not be permitted. For each pay period, workers shall be provided with a timely and understandable wage statement that includes sufficient information to verify accurate compensation for work performed. All use of temporary, dispatch and outsourced labor will be within the limits of the local law.
5. Humane Treatment
There is to be no harsh or inhumane treatment including violence, gender-based violence, sexual harassment, sexual abuse, corporal punishment, mental or physical coercion, bullying, public shaming, or verbal abuse of workers; nor is there to be the threat of any such treatment. Disciplinary policies and procedures in support of these requirements shall be clearly defined and communicated to workers.
6. Non-Discrimination/Non-Harassment
Suppliers should be committed to a workplace free of harassment and unlawful discrimination. Suppliers should not engage in discrimination or harassment based on race, color, age, gender, sexual orientation, gender identity and expression, ethnicity or national origin, disability, pregnancy, religion, political affiliation, union membership, covered veteran status, protected genetic information or marital status in hiring and employment practices such as wages, promotions, rewards, and access to training. Workers shall be provided with reasonable accommodation for religious practices. In addition, workers or potential workers should not be subjected to medical tests that could be used in a discriminatory way or otherwise in violation of applicable law. This was drafted in consideration of ILO Discrimination (Employment and Occupation) Convention (No.111).
7. Freedom of Association
In conformance with local law, Suppliers shall respect the right of all workers to form and join trade unions of their own choosing, to bargain collectively, and to engage in peaceful assembly as well as respect the right of workers to refrain from such activities. Workers and/or their representatives shall be able to openly communicate and share ideas and concerns with management regarding working conditions and management practices Agenda Page 408
Exhibit U - 3
without fear of discrimination, reprisal, intimidation, or harassment.
8. Restricted Jurisdictions
Supplier shall not manufacture or produce products in the Xinjiang Uyghur Autonomous Region of China, or knowingly procure goods and services mined, produced or manufactured in the same.
Agenda Page 409
Agenda Page 410
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 Agenda Page 411
Exhibit W - 2
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.
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 GANTT 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 412
Exhibit X - 1
EXHIBIT X
SELECT BESS SUPPLY AGREEMENT TERMS
No Forced Labor. Supplier shall ensure that no equipment or resources used or incorporated into the Products or otherwise supplied to the Project is derived from forced labor or child labor as defined by applicable Laws. Furthermore, notwithstanding Section 2.1 or Article 12, Supplier shall not be excused from delays in the performance of its Work or additional costs suffered as a result of complying with any Laws of the United States applicable to the use of forced labor or child labor, enacted or implemented at any time, including any restrictions on the importation of equipment into the United States under such Laws.
Sourcing Locations. Supplier shall ensure that the Products (including any equipment or resources used or incorporated into such Products) identified in the table below shall be sourced exclusively from the corresponding location(s), respectively, shown below:
Product Category Location of Production
Cabinet body Jiangsu, Guangdong province (China)
HVAC Beijing, Jiangsu, Guangdong (China)
Plate/sheet Guangdong province (China)
Transformer Guangdong, Anhui province (China)
PCBA Guangdong province (China)
Cable/wire Guangdong, Jiangsu province (China)
Electronic device USA, Japan, Malaysia, China
(Shanghai, Guangdong, Fujian
province)
Electrical components
France, Germany, India, Japan,
China (Taiwan, Fujian province,
Guangdong province, Anhui
province)
Other
USA, France, Germany, India
Japan, Malaysia, China (Jiangsu,
Taiwan, Guangdong, Beijing,
Anhui, Fujian province)
“Laws” means all laws, statutes, treaties, ordinances, codes, judgments, decrees, directives, guidelines, policies, injunctions, writs, orders (including the Bulk Power System Order), rules, regulations, interpretations, licenses, permits and other approvals with, from or of any Governmental Authority having jurisdiction over the Products, the Project Site, the Delivery Point, the Project and this Agreement and each other document, instrument and agreement delivered hereunder or in connection herewith, including those relating to health, safety, the environment, forced labor, slavery and child labor (including the United Kingdom’s Modern Slavery Act of 2015) in each case as the same may be enacted, implemented, modified, amended or repealed from time to time.
Agenda Page 413
Staff Report – Agenda Item 9
To: Board of Directors
From: Joanne O’Neill, Director, Customer Programs
Approved by: Ted Bardacke, Chief Executive Officer
Subject: Workforce Development Phase 2 Funding Allocations Date: July 6, 2023
RECOMMEND
Approve Recommended Workforce Development Phase 2 Funding Allocations as follows:
Program/Partner Funding
LACI: Project Management Training Course $100,000
VCEJATC: Energy Storage Trainer $11,490
LAETI: Energy Storage Trainers $37,840
Voyager Scholarships $105,000
Recommended Phase 2 Total $254,330
ATTACHMENT
1. Presentation on Workforce Development
Agenda Page 414
Item 9
Workforce
Development
Phase 2 Funding
Agenda Page 415
Action Requested:
Approve Workforce Development
Phase 2 Funding Allocations
2 Agenda Page 416
Agenda
Background
Review Phase 1 funding recipients and outcomes
Recommendations for Phase 2 funding
3 Agenda Page 417
Current Workforce Funding Sources
Voyager Wind PPA (Terra-Gen)
• In 2019 the Board approved the Voyager PPA which
included $150,000 contribution from the developer to be distributed in scholarships over four years
• $1,000 scholarships for students provided to 7 community colleges with workforce development, renewable energy,
engineering and environmental pathways programs
White Hills Wind PPA (NextEra)
• In 2019 the Board approved the PPA which included $1
million contribution from the developer for local workforce development activities over four years
• First round of funding released in 2022 to 3 organizations 4 Agenda Page 418
CPA’s Workforce Development Efforts
5 In 2019, the Board approved the Voyager Wind PPA which created the fund for the Voyager Scholarship program for target Community Colleges o The Community Advisory Committee (CAC) collaborated with CPA staff to develop and establish a framework for scholarship distribution
In December 2020, the Board directed staff to seek out program investments using funding from the White Hills Wind PPA that:
o “Green” existing jobs by providing training and resources that will give workers skills necessary to facilitate building and transportation electrification o Support union apprenticeship programs, clean energy rapid trainings, and certificate programs for both union and non-union pathways In November 2021, the Board approved Phase 1 of Clean Energy Workforce Development Investment Plan to direct the funding from the White Hills Wind PPA Agenda Page 419
Phase 1 Funding Outcomes
6 Funding PartnerFundingSubject Status Expected
Outcomes Outcomes To Date
Los Angeles
Cleantech Incubator
(LACI)
$50,000Microgrid Maintenance Training Complete • 40 participants • 30 graduates
• 20 internships
• 35 participants
• 26 graduates
• 15 internships
Ventura County
Electrical Joint
Apprenticeship
Training Committee
(VCEJATC)
$123,000Cybersecurity Apprenticeship Training
for Smart Buildings and Smart Cities
Training ongoing
with CPA-funded
equipment
• 3-5 year
equipment
service life
• 71+ apprentices
• Training in process
Los Angeles Electrical
Training Institute
(LAETI)
$225,500Cybersecurity Apprenticeship Training
for Smart Buildings and Smart Cities
Training ongoing
with CPA-funded
equipment
• 3-5 year
equipment
service life
• 129+ apprentices
• Training in process
Community Colleges
in Los Angeles and
Ventura Counties
$150,000$1,000 Scholarships to students in
community colleges (started in 2019)
47% of
scholarships
distributed
• 150 scholarships • 70 distributed
• 80 to be distributed
in 2023 and 2024
Total$548,500
Agenda Page 420
Outcomes: LACI Training & Students
7 Agenda Page 421
Outcomes: ETI Classroom Materials
Funding includes support for 17 electrical
training boards
Provide hands-on learning for 200+
apprentices over 3 years
8 Agenda Page 422
Outcome: Voyager Scholarship Recipients
9 Connie Ortiz
"As a disabled veteran, single mom of
four kids, any little bit helps. Thank you,
thank you, thank you. This will help me
pursue my career as an electrician."
Melissa Mejia
"… thanks to the generosity of donors
like yourselves, I have been put in a
position to inspire not only my younger
siblings, but those in my community …
to know that anything is truly possible
of they set their minds to it."
Agenda Page 423
Phase 2 Funding
Recommendations
Agenda Page 424
Met with existing
partners to
understand
opportunities and
needs of their
organizations
Performed
outreach to
additional
organizations and
potential
partners
Prioritized funding
based on fit with
Board & CPA
goals
Reviewed Board
approach and
funding
recommendations
with CAC
Phase 2 Funding Approach
Goals:
• Continue to invest in workforce development and skills training under the Board’s framework of “greening” existing jobs via apprenticeship programs, rapid trainings, and certificate programs.
• Strengthen partnerships with entities that have demonstrated success, while pursuing additional local support opportunities.
Agenda Page 425
Los Angeles Cleantech Incubator (LACI)
12 Project Management Training Course: Participants will gain skills to manage EV charger maintenance projects
Entry-level training, internships afterward
Covers general EV charging topics, terminology
Pipeline for startups and electrical contractors to manage EVinfrastructure projects
30 participant cohort
Stipends for participating in course and for internships Benefits
LACI has a Jobs Pipeline Manager to assist with finding jobs and internships
Ability for CPA to influence curriculum
Curriculum development will support future cohorts
LACI Funding Breakout
Tasks Cost
Trainer Contractor $50,000
Participant/Intern Stipends $50,000
How CPA Funding Will Be Used
CPA funding will cover 100% of Technical Bootcamp
Trainer costs
CPA will cover roughly 50% of stipend needs for
Project Management Training Course participants
o Approx. $1,667 per student
Agenda Page 426
IBEW - Ventura County and Los Angeles
County Electrical Training Institutes (ETIs)
13 Microgrid Training Programs: Energy Storage & Microgrid & Certification programs (ESAMTAC). An advanced 5th-year IBEW apprenticeship curriculum developed by UC Davis Proto Gen Inc. Taught by VCEJATC and LAETI.
Proposed funding for Energy Storage Trainers: classroom equipment for apprentices to practice wiring battery systems Alleviates logjams for time on few existing storage trainers Currently 3-4 students can work at each station at a time Requested by both ETIs
Lower Phase 2 Funding
The grand total of Phase 2 funding is $49,330 - smaller amount than previous funding. It recognizes the ETI's good work, but also deployment challenges over the last year.
Only one Energy Storage Trainer set requested by VCEJATC Phase 2 Energy Storage Trainer Costs
Material Type Cost per
Unit
VCEJAT
C Units
LAETI
Units
Trojan System
Lab Kit $5,090 1 6
Charging Station $900 1 2
Wet Cell Pack $5,500 1 1
Total $11,490 $37,840
Agenda Page 427
Voyager Scholarships
14 Voyager Scholarships: CPA will distribute scholarship funding to current seven community colleges in CPA’s service territory with workforce development, renewable energy, engineering and environmental pathways programs
Prepares students for jobs in green economy
o Graduates of community college or trade school can outearn peers who attend 4-year university (LA Times: The Most Lucrative Majors?) $105,000 for 105 scholarships
o Approximately 1/3 to Ventura, 2/3 to LA County
CPA to investigate expanding program to other community colleges pending Phase 2 outcomes
Shift in Funding
Phase 1 funded by Voyager Wind PPA
Phase 2 will utilizeMohave wind PPA
funding
Community Colleges
Antelope Valley College Rio Hondo College Oxnard College East Los Angeles College Ventura College Moorpark College Compton College
Agenda Page 428
Phase 2 Funding Proposal Summary
15 Program/Partner Description Funding Funding Breakout Expected Outcomes Start Date LACI: Project
Management
Training Course
• Skills to manage EVSE maintenance
• Workers transitioning from oil and gas
industry encouraged to apply
$100,000 Training
Contractor: $50,000
Stipends: $50,000
• 30 participants
• Placement
in internships
Oct 2 –
Nov 9,
2023
VCEJATC: Energy
Storage Trainer
• Funding to purchase one Energy Storage
Trainer for classroom learning on battery
systems
• Advanced course for 5th year apprentices
$11,490 1 Trojan System Lab kit
1 charging station
1 wet cell pack
• 5-year service life
• 89 apprentices
December
2023
LAETI: Energy
Storage Trainers
• Funding to purchase multiple Energy Storage
Trainers for classroom learning on battery
systems
• Advanced course for 5th year apprentices
$37,840 6 Trojan System Lab kits
2 charging stations
1 wet cell pack
• 5-year service life
• 200+ apprentices
December
2023
Voyager
Scholarships
• Funding to support students at
seven community colleges in LA and
Ventura
• Financial aid for scholars in energy-focused
careers
$105,000 $1,000/scholarship • 105 scholarships Fall/
Spring
2023/
2024
Proposed Phase 2 Total $254,330
Remaining Funding $347,170
Additional Opportunities: CPA is exploring additional new partnership opportunities in Ventura County for a Phase 2b Agenda Page 429
Next Steps
Approve Phase 2 Funding
Allocations
CPA will execute MOUs with
recipients (funding levels within
CEO signing authority)
MOUs will include metrics and
tracking mechanisms to evaluate
success
Seek out additional Ventura
County opportunities for Phase 2b
16 VCEJATC Graduating Class Summer 2023
Agenda Page 430
Action Requested:
Approve Workforce Development
Phase 2 Funding Allocations
17 Agenda Page 431
Staff Report – Agenda Item 10
To: Board of Directors
From: Joanne O’Neill, Director, Customer Programs
Approved by: Ted Bardacke, Chief Executive Officer
Subject: Local Programs Action Plan
Date: July 6, 2023
Staff will provide a presentation on the item.
ATTACHMENTS
1. Presentation
2. Local Programs Action Plan
Agenda Page 432
Local Programs Action Plan
July 6, 2023
Agenda Page 433
Agenda – Information Item Only
2 Mid-cycle review process background
Local Programs for a Clean Energy Future Action Plan
Next steps
Questions
Agenda Page 434
Mid-Cycle Review Process
Background
Agenda Page 435
Local Programs for a Clean Energy Future
4 Board adopted in 2020, the Plan sets a 5-year vision for programs, focused on 3 pillars:
Resilience & Grid
Management
Building & Transportation
Electrification
Local Procurement
Agenda Page 436
Why a mid-cycle update is
valuable:
5 Plan was published in 2020 setting a 5-
year vision for programs, focused on 3
pillars
CPA’s resources have expanded allowing
additional investment in programs
Changes to the policy and technology
landscape offer opportunity to evaluate
and grow priority programs
Evaluate opportunities to leverage state
and federal funding to expand programs
and for CPA to serve as a platform to
help customers access these new funding
sources
Agenda Page 437
Mid-Cycle
Approach
Build upon existing Plan through
creation of separate “Action Plans”
that expand and refine approaches
under each Program Pillar
Action Plans:
• Articulate any course
adjustments
• Define new or changing
programmatic approaches within existing pillars
• Provide high level
implementation strategies through 2025
Agenda Page 438
Key Stakeholders
Internal CPA
CPA Member Agencies
Community
7 Marketing & Communications
Government Affairs
Regulatory Affairs
Strategic Accounts
Customer Care & Data Systems
Rates & Strategy
Power Supply
Finance
People & Culture
City Managers and City Staff (Member
Agency Programs)
Executive Committee
Board of Directors
Community Advisory Committee
Community Based Organizations
Customers (through Strategic Accounts &
customer research)
Load analysis of customer usage to identify
scale of opportunities
Agenda Page 439
Action Plan Overview
Agenda Page 440
Action Plan Purpose
9 Action Plan is a supplementary document to the Local Programs for a Clean Energy Future plan
Focuses on new programmatic areas of pursuit, existing plan priorities will continue and/or evolve
Follows existing strategic approach of offering programs that are incremental or address gaps in programs already available to CPA customers from others (ie. SCE) Does not alter current program offerings that are on-going, although highlights key areas for improvements
Agenda Page 441
Cross Cutting Program
Implementation
Phase Program Target Audience Timeline Included in ‘23-24 Budget New Program Local Government
Sustainability Assistance
Program: Menu
Member agencies Begin
recruitment
Q1 2024
Incentives and
technical
assistance
Local Government
Sustainability Assistance
Program: Grants
Member agencies Issue first
funding
opportunity
Q1/Q2 2024
Incentives and
technical
assistance
Agenda Page 442
Resilience & Grid Management
Implementation
Phase Program Target Audience Timeline Included in ‘23- 24 Budget
Program
Continuation
Power Ready (cohort 1)
No cost clean energy back-up
systems for critical facilities
Member agencies
11 sites
On-going Technical
assistance (project
funding part of
power supply
costs)
Power Response
Automated and behavioral
demand response program
Residential, commercial,
and public
1,210 participants &
1.38 MW enrolled
On-going Incentives and
technical
assistance
Expansion /
Improvement
Power Ready Program (cohort 2) Municipal and community
buildings
Begin
recruiting
cohort 2 in late
2023
Technical
assistance
Adjust/redesign current rate-based
approach to incentivize large
customers to reduce usage during
market or grid events
Commercial and public New approach
ready for
launch by
summer 2025
No
Agenda Page 443
Electrification
Implementation
Phase Program Target Audience Timeline Included in ‘23-24 Budget Program
Continuation
EV Charger Rebates – CalEVIP
(applications close 7/31/23)
Incentives for EV charging
infrastructure
Multifamily, commercial,
and public
60 connectors complete
/ 653 reserved
On-going Incentives
Reach Code Program for Building
and Transportation Electrification
Technical and stakeholder
engagement support
Member agencies
Program launch
underway
On-going Incentives and
technical
assistance
Workforce training & development
Training, equipment &
scholarships
CPA territory residents
130 students to-date
Phase 2
launch late
2023
Training funding
and participant
stipends
New Program Customer Energy Advisor Residential and small commercial
RFP in early
2024
Technical
assistance
EV charging infrastructure technical
assistance & incentives
Multifamily and small to
medium businesses in
DACs
RFP in early
2024
Incentives and
technical
assistance
Agenda Page 444
Local Procurement
Implementation
Phase Program Target Audience Timeline Included in ‘23-24 Budget Program
Continuation
Power Share (DAC-GT)
20% bill discounts for 100%
clean & local solar in DACs
Residential
6 projects contracted
5,970 customers
On-going CPUC funded
Community Solar (CSGT)
20% bill discounts for 100%
clean & local solar
Residential
2 projects contracted
Enrollment to start ?
On-going CPUC funded
New Program Incentives to support solar + storage
adoption
Residential Phase 1 Jan
2024 / Phase 2
RFP in Q1
2024
Incentives (P1)
Technical
assistance (P2)
Pursue partnership to deliver virtual
power plant (VPP)
Residential Prepare RFO in
2024
Technical
assistance
Agenda Page 445
Next Steps
Agenda Page 446
Next Steps
15 Issue RFPs for
vendors to
support program
delivery
Launch new
programs
Begin process
for development
of next 5-year
plan in 2024
Agenda Page 447
Questions
Agenda Page 448
2023-2025
Local Programs for a
Clean Energy Future
Action Plan
Agenda Page 449
Contents
Local Programs for a Clean Energy Future
Background
Mid-Cycle Plan Refresh
Customer Composition
Resilience and Grid Management
1. Expand Power Ready Program
2. Rate-Based Approach to Incentivize
Customers to Reduce Usage During Events
Building and Transportation Electrification
3. Customer Energy Advisor
4. EV Charging Infrastructure Technical
Assistance and Incentives for Hard-to-Reach Customers
Local Procurement
5. Incentives to Support Solar + Storage Adoption
6. Pursue Partnership to Deliver Virtual Power Plant
Cross Cutting Programs
7. Local Government Sustainability Assistance Program
3 3
5 6
8 8
9 10
10 11
11 12
12 13
14 14
Agenda Page 450
Local Programs for a
Clean Energy Future
Background
The Clean Power Alliance Board of Directors approved the Local Programs for a Clean Energy Future Plan (Plan) in June of 2020. This Plan charts a strategic vision for customer programs, including products, services, and financial incentives, undertaken by CPA to invest in its communities and to support its customers in co-managing their relationship with the energy system. These programs can bring local benefits such as customer cost savings, economic and workforce development, improved air quality and public health, and more resilient communities.
The Plan identified seven programs that fall into three categories: Resilience and Grid Management, Electrification, and Local Procurement. These three categories are also referred to as CPA’s “Program Pillars”. All of these programs have been launched and are in various stages of implementation.
2023–2025 Local Programs Action Plan | Page 3
Agenda Page 451
Resilience and Grid Management
1. Clean Back Up for Essential Facilities: Installation of clean energy generation and storage at essential community facilities. This program is called Power Ready.
2. Demand Response: Partnering with customers to utilize demand response, reliability, and/ or resiliency. This program is called Power Response.
3. Peak Management Pricing: Incentives for commercial and public agency customers to reduce their energy consumption during periods of grid stress, elevated wholesale energy prices, and high greenhouse gas (GHG) emissions.
Electrification
4. Public Electric Vehicle (EV) Charging: Incentives for publicly accessible electric vehicle chargers. CPA currently offers EV charging incentives in partnership with California Energy Commission through the California Electric Vehicle Infrastructure Project (CALeVIP).
5. Building Electrification Codes: Technical assistance and incentives for cities and counties to develop local building codes to encourage the electrification and decarbonization of the building sector.
Local Procurement
6. Community Solar: Development of small-scale local generation projects in disadvantaged communities (DAC) that provide bill discounts of 20% to neighboring residents.
7. 100% Green Discount: Bill discount of 20% to low-income customers for renewable energy generated in disadvantaged communities. This program is called Power Share.
In addition to the these seven programs, CPA also launched a Workforce Development Program that has provided a Microgrid Maintenance training program through the Los Angeles Cleantech Incubator, and funding for two upcoming Western Electrical Cybersecurity Apprenticeship Trainings for Smart Buildings & Smart Cities through the Los Angeles Electrical Training Institute and the Ventura County Joint Apprenticeship Training Committee, both managed by the International Brotherhood of Electrical Workers (IBEW). 2023–2025 Local Programs Action Plan | Page 4
Agenda Page 452
Mid-Cycle Plan Refresh
As the Plan laid out a 5-year vision for customer programs, this current mid-point mark has served as an opportunity to perform a mid-term review. In addition to being at the mid-point of the Plan timeline, there have also been changes to the policy and technology landscape that offer an opportunity to evaluate and grow our priority programs.
This review does not change the existing Plan, built through over a year of research, development, and outreach, but rather builds upon the Plan through the creation of a separate “Action Plan” that expands and refines the approaches for the next several years under the existing Program Pillars. Additionally, given the evolving nature of the market this Action Plan expands the Plan to include “Cross Cutting Programs” that address a combination of Program Pillars to deliver benefits to our customers and communities.
During the mid-cycle review, CPA considered the performance of its existing programs and past pilots to inform areas to continue, expand, or add. This process also included evaluation of external funding opportunities. CPA is tracking regional, state, and federal funding opportunities that align with its Program Pillars. As discussed in the individual sections of the Action Plan, CPA will pursue, either independently or with local partners, external funding opportunities that align with these program priorities and will serve to accelerate or expand the reach of its programs.
Stakeholder Engagement
To create the Action Plan, CPA solicited feedback from internal stakeholders, City Managers and Sustainability Staff, Community Based Organizations (CBOs), the Community Advisory Committee, and its Board of Directors. It also incorporated customer input through customer surveys, load profile analysis, and input from the Strategic Accounts team within CPA. Finally, the Action Plan was informed by benchmarking and evaluating best practices from other CCAs, program administrators, and organizations across California and the nation.
Program Prioritization
During the mid-cycle refresh process many programmatic ideas and solutions were identified and considered. Of these ideas, CPA staff selected seven concepts that they felt best continued to advance the priorities established in the original Plan. These were selected based on a qualitative assessment to prioritize the top ideas and ultimately develop the recommendations in the Action Plan below. The criteria used are as follows:
• Program impacts measured in kWh, kW, GHG, or customer cost savings and the anticipated total cost to administer.
2023–2025 Local Programs Action Plan | Page 5
Agenda Page 453
• Goal alignment with the CPA mission and Local Programs for a Clean Energy Future plan. • Whether the offer expands access and engagement throughout our customer base, particularly underserved communities.
• Differentiated value, i.e. whether it brings unique value versus what others are offering in the region.
Customer Centric Design
CPA’s service territory has a unique diversity of customers, communities, and climate zones which are important to consider when designing programs and outreach approaches. Part of CPA’s evaluation in developing this Action Plan included consideration for the customer composition within its service territory to ensure it focuses resources to provide the most value to CPA customers. Additionally, CPA evaluated where there were gaps in state or regional program offerings or where existing programs did not fully address the barriers to adoption by CPA
customers.
CPA serves
approximately 1
million residential and
business customer
accounts across 32
communities in Los
Angeles and Ventura
counties, with three
more cities starting
service in 2024. The
majority, 88%, of
CPA customers are
residential, with 20%
of those residential
customers receiving
California Alternative
Rates for Energy (CARE) and/or Family Electric Rate Assistance (FERA). CPA focused specifically on equity and ensuring traditionally hard-to-reach and low-income customers are a target audience for CPA programs. As a result, many programs discussed in the Action Plan are designed to specifically target residential customers and those on CARE or FERA.
Additionally, focusing on local governments was seen as an opportunity to amplify local leadership and to serve the broader community.
VENTURA COUNTY
Downey
Whittier
Sierra
Madre
Arcadia Claremont
Temple City
Alhambra
South
Pasadena
Paramount
Malibu Santa
Monica
Culver
City
Hawthorne
Manhattan
Beach
Redondo
Beach
Rolling Hills
Estates
Carson
Beverly
Hills
West
Hollywood
Simi Valley
Oxnard Camarillo
Moorpark
Thousand
Oaks
Agoura
Hills
Calabasas
Ventura
Hawaiian
Gardens
Westlake
Village
Ojai
LOS ANGELES COUNTY
The Communities
We Serve
2023–2025 Local Programs Action Plan | Page 6
Agenda Page 454
Local Programs for a
Clean Energy Future
ACTION PLANS
2023-2025
Agenda Page 455
Resilience and Grid
Management
In addition to continuing and improving upon existing offerings, such as Power Response and the first cohort of projects under Power Ready, CPA plans to expand its resilience and grid management efforts. These new program approaches take into account best practices and respond to changes and trends in the energy market.
1. Expand Power Ready Program
OBJECTIVE
Provide clean energy resiliency to municipal
and community sites that serve a critical
need in order to preserve those critical
functions during an outage and by offering
an alternative to diesel generators, reducing
emissions and improving local air quality.
APPROACH
Develop an additional cohort of participants
to broaden the reach of the program. CPA
will also seek external funding to expand the number of Power Ready sites and increase the community resiliency benefits the program can provide. There is an increased focus on funding resiliency projects from both federal and state funding sources that align with CPA’s Power Ready program approach. CPA will track and apply for this funding to support expansion of the program to include other existing community-serving locations such as schools, libraries, community centers, youth and/or senior centers, cultural centers, workforce development and training facilities, and foodbanks. CPA will work with participants to engage their communities during the projects to maximize the resiliency benefits.
TIMELINE
Recruitment for the next cohort to expand the Power Ready program is targeted and budgeted for in the 2023-2024 fiscal year.
TARGET AUDIENCE
This program is currently available to
member agencies but will be expanded
to other public agency and/or community
gathering locations that could serve as
resiliency centers.
2023–2025 Local Programs Action Plan | Page 8
Agenda Page 456
2. Rate-Based Approach to Incentivize Customers to
Reduce Usage During Energy Savings Events
OBJECTIVE
Leverage customer load shifting as an emergency grid resource during periods where energy costs are high or there is strain on the grid due to high demand. Customers who are able to significantly shift load and provide this
resource will benefit from incentives or lower
prices the rest of the year.
APPROACH
Evaluate the current Peak Management
Pricing rate and program structure, including why there is low enrollment, and propose a redesigned approach to increase customer participation. The redesigned rate or alternative approach will provide price signals to large commercial and public sector customers to drive shifts in their behavior. This could include incentives, increased or decreased rates during certain periods, real-time or dynamic pricing signals, and feedback to deliver the desired results. This will consider how a CPA rate or approach would be distinct from any rates available to customers through SCE.
TIMELINE
Evaluation of new and alternative approaches will begin in 2024 with a goal to launch any new product prior to summer 2025.
TARGET AUDIENCE
This program would be available to
commercial and public sector customers.
2023–2025 Local Programs Action Plan | Page 9
Agenda Page 457
Electrification
CPA will continue to administer its Reach Code Program for Building and Transportation Electrification and the CALeVIP Southern California and South Central Coast Incentive Projects in partnership with the California Energy Commission. The CALeVIP offering is in the process of ramping down, with final project completions due in early 2025. CPA will also continue to partner with local workforce training and development agencies to build a workforce to support these types of activities. Given the growing importance and opportunities around electrification, CPA will expand its offering to address key barriers to adoptions amongst its customers.
3. Customer Energy Advisor
OBJECTIVE
Provide a concierge service to our customers
to enable them to advance energy efficiency
and electrification projects with less
confusion and effort, maximizing their ability
to leverage regional, state, and federal funding opportunities.
APPROACH
Electrifying and increasing the efficiency of existing buildings can be challenging to navigate for customers. The Customer Energy Advisor would serve as a neutral third party to assist customers in identifying the right types of measures to pursue, referring qualified contractors, reviewing bids, and connecting the customer with financing and incentives offered through numerous local and statewide programs. CPA may also include additional customer incentives to offset the costs of electrification measures or infrastructure, such as electrical panel upgrades.
TIMELINE
This program has been budgeted in the 2023-2024 fiscal year budget. Staff anticipate designing and administering a Request for Proposal (RFP) for implementation services in early 2024. Additional customer incentives have not yet been budgeted.
TARGET AUDIENCE
This service would be available for
residential and small business customers.
2023–2025 Local Programs Action Plan | Page 10
Agenda Page 458
4. EV Charging Infrastructure Technical Assistance
and Incentives for Hard-to-Reach Customers
OBJECTIVE
Increase availability of EV charging
infrastructure to traditionally hard-to-reach customer segments by alleviating key barriers such as technical knowledge,
expertise, and funding. Increasing the
availability of EV charging in multifamily
dwellings and within disadvantaged
communities will enable broader adoption of electric vehicles.
APPROACH
This program would provide technical assistance to multifamily building owners, and to owners of small and medium business in disadvantaged communities. The technical assistance would evaluate the feasibility of on-site EV charging and provide recommendations on the preferred configurations to minimize electric infrastructure upgrades. This would include connecting customers with installers, available funding, and financing to enable the project. The program will also consider offering incentives or direct installation of chargers for these customers to help offset the cost of EV infrastructure. CPA will pursue Low Carbon Fuel Standard (LCFS) credits to fund incentives for this customer segment to complement the technical assistance services. Additionally, there would be a focus on enrolling these participants in Power Response or other time-of-use optimization approaches.
TIMELINE
This program has been budgeted in the 2023-2024 fiscal year budget. CPA plans to leverage LCFS credits as an additional funding source to support incentives. Staff anticipate designing and administering a RFP for implementation services in early 2024.
TARGET AUDIENCE
This program will target multifamily
properties across CPA’s service territory
as well as small and medium businesses
within disadvantaged communities.
2023–2025 Local Programs Action Plan | Page 11
Agenda Page 459
Local Procurement
Enabling behind-the-meter and front-of-the-meter local energy projects is critical to advancing our clean energy goals. CPA will continue to offer the California Public Utilities Commission (CPUC) funded Disadvantage Communities Green Tariff (DAC-GT) and Community Solar Community Solar Green Tariff (CSGT) offering. These programs provide residential customers with 100% clean energy and an additional 20% bill discount for eligible residents. CPA will continue to advocate for community solar program expansion at the CPUC to increase the number of customers it serves. CPA will continue to expand its programs in this category, with a focus on expanding behind-the-meter offerings that empower customers to adopt solar and storage technologies.
5. Incentives to Support Solar + Storage Adoption
OBJECTIVE
Provide a simple pathway to encourage new and existing solar customers to pair their systems with battery storage. This will provide customers with bill savings under new net energy metering (NEM) tariffs and provide the region with increased grid resources.
APPROACH
CPA will evaluate the best approach to increase behind-the-meter solar and storage, or stand-alone storage that can be utilized as a grid management and emergency response assets.
This program is designed to work in conjunction with the new NEM tariff to advance storage paired solar systems by providing an upfront incentive for the purchase and installation of battery storage (phase 1). Additionally, CPA will evaluate how to increase adoption of battery storage with low income and medical baseline customers (phase 2). Phase 2 may include direct installation opportunities that could leverage private capital or partnerships to improve the value proposition. Additionally, CPA will evaluate financing opportunities for customers to offset the cost of the battery and to incentivize customers to enroll in demand response (DR) programs and/ or allow management of a portion of their battery as a grid resource.
TIMELINE
Staff anticipate designing and launching
in two phases, the first of which will be
available by early 2024 and the second stage
which will include an RFP in early 2024.
Phase 1 of this program has been budgeted
in the 2023-2024 fiscal year budget.
TARGET AUDIENCE
This program will focus primarily on
residential customers but will also explore
how to best serve residential customers
in multifamily buildings and commercial
customers in the future.
2023–2025 Local Programs Action Plan | Page 12
Agenda Page 460
6. Pursue Partnership to Deliver
Virtual Power Plant
OBJECTIVE
Leverage behind-the-meter resources for
demand reduction during grid emergencies
and/or to allow for ongoing grid management
in support of CPA’s power procurement
efforts. By tapping into the market to identify, procure, and manage these potential resources, CPA can create a virtual power plant that would be leveraged during grid strain which would concurrently support customers to adopt clean energy technologies and strengthen their ability to manage and control their energy usage.
APPROACH
CPA will evaluate the best approach to procuring distributed energy resources through a Request for Offer (RFO) process that can be deployed to manage peak usage and high-priced hours and can improve reliability and deliver cost savings. There are numerous manufacturers, installers, and service providers that have existing, or the ability to quickly build, networks of customer resources that can be deployed to meet these needs. This would operate in parallel to the Power Response program but could offer access to resources beyond what that program is built to deliver.
This program pathway also aligns with numerous potential funding sources, such as emergency reliability statewide funding that could accelerate or amplify CPA’s efforts.
TIMELINE
CPA has budgeted support from a technical consultant to provide recommendations on its approach in the 2023-2024 budget, with a goal to launch a solicitation in 2024.
TARGET AUDIENCE
This offer will target aggregators of
behind-the-meter resources sited at CPA
customer locations.
2023–2025 Local Programs Action Plan | Page 13
Agenda Page 461
Cross Cutting
Programs
New as part of this Action Plan, Cross Cutting Programs would focus on areas that cross over between multiple Program Pillars. These efforts, by design, allow for focus in resilience and grid management, building and transportation electrification, and local procurement and strive to encourage adoption of projects and technologies that accomplish multiple goals.
7. Local Government
Sustainability Assistance Program
OBJECTIVE
Accelerate adoption of member agencies’ sustainability and climate goals through technical assistance and financial support. CPA will streamline this support by procuring technical resources and incentivizing equipment to advance key areas that align with its Program Pillars. This program will also provide support for local governments to pursue other regional, state, and federal funding to complement CPA funds and maximize the opportunities.
APPROACH
The program combines two optional
participation pathways. First, a menu of
scalable options, such as municipal fleet
electrification, building electrification,
and EV charging at city or county sites,
which would be available to each member
agency. Second, a grant opportunity for unique projects related to resilience and grid management, electrification, and/or local procurement. CPA will also support member agencies in understanding and obtaining funding from other local, state, and federal funding opportunities. A program of this type was contemplated in the current Plan but was not initially selected due to financial and administrative constraints.
TIMELINE
This program is under development with a target launch in early 2024 and has been budgeted in the 2023-2024 fiscal year budget.
TARGET AUDIENCE
This program will be available to CPA
member agencies for implementation in
their facilities and operations.
2023–2025 Local Programs Action Plan | Page 14
Agenda Page 462
Management Report
To: Board of Directors
From: Ted Bardacke, Chief Executive Officer
Subject: Management Report
Date: July 6, 2023
Resource Adequacy Compliance and Potential CPA Expansion Recent CPA procurement activities and a June 29 decision by the California Public Utilities Commission (CPUC) have the potential to impact future expansion of CPA’s service territory to other communities – beyond the three cities where CPA will expand in 2024.
Currently three cities – La Canada Flintridge, Lynwood, and Port Hueneme – have expressed formal interest in joining CPA by the end of 2023, with service starting as early as 2025. And in an effort to show “zero tolerance” for Resource Adequacy non-compliance by CCAs, the CPUC has decided that CCAs who are deficient in Resource Adequacy compliance filings beginning with September 2023 will be barred from filing expansion plans for two calendar years following any Resource Adequacy compliance deficiencies.
Through the dedicated efforts of CPA’s procurement team, CPA has a very high likelihood of meeting its Resource Adequacy compliance obligations for 2023,1 despite having been short in its initial 2023 Year Ahead filing, which was due at the end of October 2022. With thousands of megawatts of new resources coming online and old resources retiring in California ahead of each summer, the supply of available Resource Adequacy can change significantly between the due date of a Year Ahead filing and the due date for each monthly filing.
1 CPA is awaiting a new resource to come on-line and receive CAISO registration by mid-July in order to include it in monthly compliance filing for September 2023.
Agenda Page 463
Board of Directors Management Report
As it stands under the new CPUC decision, if CPA is able to meet its 2024 Year Ahead filing (due end of October 2023), it will have the ability to file to expand by the end of this calendar year for service launch to new communities in 2025. If CPA misses the 2024 year ahead filing but then cures that deficiency in the individual months of 2024, and also complies with the Year Ahead 2025 filing due at in October 2024, then it could file an expansion plan at the end of 2024 for service launch to new communities in 2026.
Staff is currently confirming our understanding of the implications of the new CPUC decision, assessing the likelihood of adhering to some or all of the compliance deadlines given market dynamics, discussing regulatory strategies with other CCAs, and will be doing outreach to our interested cities to develop near and long-term strategy options in this area.
Launch of Power Response Home
Earlier this month CPA launched Power Response Home, a simple demand response program that is particularly suited for customers who traditionally have been underserved by the energy industry. Part of the Power Response family of programs, Power Response Home pays residential customers to reduce energy usage during times when energy is expensive without the need to install any special equipment or turn over control over their thermostat for automatic monitoring and adjustments.
Participants in Power Response Home simply get a text message or email announcing an energy saving event and then manually reduce their energy use with thermostat adjustments, turning off lights, delaying running of appliances, or unplugging devices not in use. Customers will get a bill credit of $2 per kWh saved and customers on low-income CARE or FERA rates or located within disadvantaged communities get an additional $20 incentive payment for signing up.
This program can help renters whose property owners won’t install new equipment because they would not receive the savings and/or low-income customers who can’t afford technology upgrades even if they are going to pay back in the long run. While open to all, CPA’s marketing of this program is particularly targeting those types of customers.
Agenda Page 464
Board of Directors Management Report
Monthly Financial Performance
In April 2023, the first month of implementation CPA’s 3-month interim rate increase, CPA recorded an operating gain of $35.3 million, slightly less than the budgeted operating gain of $37.5 million due to slightly higher than expected wholesale market electricity prices.
With this positive monthly result, CPA has now recorded an operating gain of $656,000 for the fiscal year to date, $5.4 million more than the budgeted loss of $4.7 million. The monthly financial dashboard is provided as Attachment 1 to this report. CPA remains on track to contribute over $80 million to the net position consistent with the FY 2022/23 Amended Budget.
Customer Participation Rate and Opt Actions
As of June 26, 2023, CPA’s overall participation rate was 93%, unchanged from the previous month. CPA had 1,005,237 active customers, down 910 customers since the end of May. Opt-out levels for the month – 282 accounts through the fourth week of June – are down from May and lower than historical norms during the second quarter of the year. New accounts (“move-ins”) were lower than closed accounts (“move-outs”) by 1,009 customers in June, typical for the month but significantly higher than May; this seasonal difference is largely responsible for the monthly decline in active customers. Participation rates and active accounts by jurisdiction are provided in Attachment 2 of this report.
Customer Service Center Performance
Incoming calls to CPA’s Customer Service Center during June were steady compared to the previous month and slightly lower than typical months in the second quarter of the year. Through June 27, CPA received 1,281 calls compared to 1,638 calls in May and an average of 1,795 calls per month in the second quarter of previous years. 98% of calls were answered within 45 seconds, down from 99% in the previous month, and the average wait time was 7 seconds, up one second from the previous month.
Contracts Executed Under the Chief Executive Officer’s Authority A list of non-energy contracts executed under the CEO’s signing authority is provided in Attachment 3. The list includes all open contracts as well as all contracts, open or completed, executed in the past 12 months.
Agenda Page 465
Board of Directors Management Report
ATTACHMENTS
1. Monthly Financial Dashboard – April 2023
2. Participation Rates by Jurisdiction
3. Non-Energy Contracts Executed under CEO’s Authority
Agenda Page 466
CUSTOMERS
Summary of Financial Results
Definitions:
Accounts: Active Accounts represents customer accounts of active customers served by CPA per Calpine Invoice.
Participation Rate %: Participation Rate represents 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 represents the difference between revenues and expenditures before interest income and expense, and capital expenditures
Cash and Cash Equivalents: Includes bank accounts and marketable securities with maturities of less than 90 days.
Year to date (YTD): Represents the fiscal period beginning July 1, 2022 YTD
Apr
2023
Financial Dashboard
Note: Numbers may not sum up due to rounding.
Active Accounts
1,005,110
Participation Rate
93.1%
YTD Sales Volume
9,332 GWh
Apr Sales Volume
797 GWh
in $000,000's Actual Budget Variance % Actual Budget Variance % Operating Revenues 98.5 97.0 1.5 2% 948.2 942.9 5.2 1%
Cost of Energy 60.3 55.8 4.5 8% 919.3 910.1 9.3 1%
Revenues Less Energy Cost 38.2 41.2 -3.0 -7% 28.8 32.9 -4.1 -12% Operating Expenses 2.9 3.7 -0.8 -21% 28.1 37.6 -9.4 -25% Operating Income 35.3 37.5 -2.2 -6% 0.7 -4.7 5.4 114%
Apr Year-to-Date
Agr/Oth
2% Com-Lg
22%
Com-Sm
31%
Res
45%
In April 2023 CPA recorded an operating gain of $35.3 million, $2.2 million less than the budgeted operating gain of $37.5 million provided in the FY 2022/23 Amended Budget. April results were positively impacted by a retail electricity rate increase that went into effect on April 1, 2023, offset by energy costs that were slightly higher than budgeted. For the fiscal year to date (YTD), CPA recorded an operating gain of $656,000, $5.4 million more than the budgeted loss of $4.7 million.
YTD revenue and cost of energy is in line with the Amended Budget. YTD results have been positively impacted by the April 1 rate increase. YTD results were negatively impacted by the September 2022 heat wave, gas and energy price shocks in December 2022 and January 2023, higher than budgeted renewable energy costs, prior period costs recorded in the current fiscal year, and an accrued but yet to be assessed Resource Adequacy compliance penalty. Operating costs were 25% below budget for the YTD primarily as a result of lower spending on administrative and other service costs and the non-utilization of contingencies.
As of April 30, 2023, CPA had $63.9 million in unrestricted cash and cash equivalents and $79.853 million available in its bank line of credit. In June 2023, CPA and JP Morgan executed an amendment to CPA’s credit agreement, increasing the line of credit from $80 million to $160 million and extending the term of the agreement to March 31, 2024.
CPA is in sound financial health and in compliance with its bank and other credit covenants. CPA remains on track to contribute $84 million to the net position in FY 2022/23 consistent with the FY 2022/23 Amended Budget.
Agenda Page 467
Preferred Energy Option Participation %
100% Green 93.0%
Clean 94.3%
Lean 92.6%
Total 93.1%
OVERALL CUSTOMER STATUS REPORT
June 26, 2023
PARTICIPATION BY CITY AND COUNTY
Preferred Energy Option Active Accounts Participation % Lean % Clean % 100% Green % Agoura Hills 100% Green 8,094 88.3% 2.3% 0.4% 97.3%
Alhambra Clean 33,994 95.4% 1.5% 98.3% 0.2%
Arcadia Lean 22,544 95.3% 99.8% 0.1% 0.1%
Beverly Hills 100% Green 18,594 97.2% 1.8% 0.1% 98.1%
Calabasas 100% Green 9,730 93.8% 2.1% 0.3% 97.7%
Camarillo 100% Green 28,368 89.9% 1.2% 0.1% 98.7%
Carson Clean 29,352 95.9% 1.3% 98.5% 0.2%
Claremont 100% Green 12,658 91.5% 2.8% 0.3% 97.0%
Culver City 100% Green 19,163 95.0% 4.0% 1.1% 94.9%
Downey Clean 36,725 95.0% 1.6% 98.3% 0.1%
Hawaiian Gardens Clean 3,625 95.4% 1.1% 98.7% 0.3%
Hawthorne 100% Green 28,412 97.1% 0.4% 1.4% 98.2%
Los Angeles County 100% Green 299,114 94.7% 1.9% 36.9% 61.2% Malibu 100% Green 6,985 95.0% 2.9% 0.4% 96.7%
Manhattan Beach 100% Green 15,435 95.7% 2.8% 0.2% 97.0% Moorpark Clean 11,395 85.7% 3.1% 96.4% 0.6%
Ojai 100% Green 3,515 89.5% 6.0% 1.2% 92.8%
Oxnard 100% Green 55,354 92.5% 4.0% 0.9% 95.1%
Paramount Lean 15,798 96.7% 96.5% 2.6% 0.9%
Redondo Beach 100% Green 33,198 96.1% 1.9% 0.1% 98.0%
Rolling Hills Estates 100% Green 3,501 91.8% 7.2% 1.6% 91.2% Santa Monica 100% Green 54,451 94.2% 3.4% 0.8% 95.9%
Sierra Madre 100% Green 4,952 92.1% 5.6% 1.6% 92.8%
Simi Valley Lean 43,266 89.4% 99.7% 0.1% 0.2%
South Pasadena 100% Green 11,639 95.1% 3.8% 0.7% 95.5%
Temple City Lean 12,554 95.7% 99.8% 0.1% 0.2%
Thousand Oaks 100% Green 44,390 83.3% 8.0% 1.6% 90.5%
Ventura 100% Green 43,803 88.8% 4.8% 1.6% 93.6%
Ventura County 100% Green 33,331 86.6% 6.4% 1.4% 92.2%
West Hollywood 100% Green 26,462 96.8% 2.4% 0.4% 97.2%
Westlake Village Lean 3,738 88.3% 99.5% 0.1% 0.5%
Whittier Clean 31,187 94.0% 1.9% 98.0% 0.2%
Total 1,005,327 93.1%
Energy Option Active Accounts Participation %
100% Green 624,450 62.1%
Clean 258,382 25.7%
Lean 122,495 12.2%
Total 1,005,327 100.0%
OVERALL PARTICIPATION BY ENERGY OPTION
Agenda Page 468
Vendor Purpose Month NTE Amount Status Notes
Snowflake Inc.
Cloud-Native Elastic Data Warehouse
Service June 2023 $25,000 Active
Baker Tilly Financial audit services June 2023 $50,000 Active Renewal IHS Market Subscription for CAISO forecasts June 2023 $17,000 Active Renewal Fraser Marketing contract (final renewal) June 2023 ($83,297) Active 14% decrease to Board approved NTE upon renewal
Swanson Martin Bell Legal Services Agreement (general liability) May 2023 $75,000 Active LinkedIn Subscription for recruiting platform April 2023 $20,250 Active Lattice
Renewal for Performance management
software April 2023 $9,000 Active
AN Catering Fifth anniversary lunch venue April 2023 $17,444 Completed Polsinelli, LLP
Legal Service Agreement (Employment,
Compliance, General Legal Support related
to Commercial Liability, Risk, and
Mitigation issues)
April 2023 $75,000 Active Renewal
Chapman & Cutler, LLP Legal Services (CPA's Credit Agreement) April 2023 $55,000 Active Renewal Salesforce
Additional licesnses for Stakeholder
Relationship Management application
subscription
April 2023 $723 Active
Accuweather Weather forecasting March 2023 $10,176 Active goodpr. Event planning services March 2023 $16,000 Active Shute, Mihaly & Weinberger, LLP
Legal Service Agreement (Regulatory,
Administrative, Environmental, Energy
Procurement, Public Contracting, Public
Entity Governance Laws, Issues and/or
Proceedings)
March 2023 $65,000 Active Renewal
Davis Wright Tremaine Legal services (regulatory) March 2023 $125,000 Active Renewal Ntooitive Website development March 2023 $20,000 Active Municipal Capital Markets GIC brokerage services February 2023 $38,900 Active Amendment for GIC brokerage services - paid out of Energy Prepay Bond proceeds
Clear Language Company Minute transciption for board meetings January 2023 $20,000 Active Renewal Mercer Retention incentive program development January 2023 $50,000 Active SBCCOG Satellite Board meeting venue January 2023 $50/hr Active Wrike Project management software January 2023 $5,814 Active Ironclad Contract lifecycle management platform January 2023 $16,000 Active PrimeGov Board and committee meeting agenda
management software December 2022 $16,000 Active Renewal DERNetSoft, Inc. Business customer engagement reporting tool December 2022 $53,000 Active
Ion Objects, Inc. IT consulting December 2022 $4,000 Completed Amendment for updated project scope Clean Power Alliance
Non-energy contracts executed under Chief Executive Officer authority Rolling 12 months -- Open contracts shown in Bold
Agenda Page 469
Vendor Purpose Month NTE Amount Status Notes
Clean Power Alliance
Non-energy contracts executed under Chief Executive Officer authority Rolling 12 months -- Open contracts shown in Bold
AiQueous, LLC Salesforce implementation December 2022 $7,395 Completed Amendment to update scope for project completion
ZGlobal Engineering services December 2022 $50,000 Active Pinnacle Advocacy Lobbying services December 2022 $66,652 Active Omni Government Relations Lobbying services December 2022 $82,492 Active Museum of Ventura County Event space rental for City Manager Lunch December 2022 $825 Completed S&P Credit assessment December 2022 $37,500 Active
Meltwater Media analytics and monitoring services November 2022 $13,750 Active Cision Media/PR wire distribution services November 2022 $2,240 Active Sigma Data analytics tool October 2022 $13,000 Active
Language Line Translation services October 2022 $50,000 Active Langan GIS services October 2022 $78,500 Active Second renewal term Mercer Compensation and benefits study refresh September 2022 $75,000 Completed Pickit Digital asset library September 2022 $2,900 Active Salesforce Stakeholder Relationship Management
application subscription August 2022 $15,300 Active
Oscar Associates Recruiting Services August 2022 N/A Active Amendment to reduce placement fees to
25% of starting salary of exclusively
referred candidate
Burke, Williams, Sorenson, LLP
Legal Services Agreement (Brown Act,
public entity governance issues and other
legal services)
July 2022 $100,000 Active Renewal
Hall Energy Law PC Energy Procurement Counsel July 2022 $125,000 Active Renewal Helpmates Temporary staffing services July 2022 N/A Active Adobe Inc. AdobeSign Secure Electronic Signature
Service June 2022 $3,200 Active Renewal
OpenPath New Office Keycard Access Control
System January 2021 $1,500 Active
Crown Castle Fiber LLC New Office Dedicated Internet Access Service September 2020 $ 18,600 Active
NextLevel Internet, Inc. New Office High Speed Internet Service September 2020 $ 6,936 Active Windstream Services, LLC New Office Telephone Service September 2020 $ 14,095 Active Zero Outages New Office Security, Firewall, & Wi-Fi
Service September 2020 $ 7,608 Active
Agenda Page 470