20.2 Indemnity for Claims Arising Out of Construction. Lessee agrees to protect, defend (with counsel acceptable to City), hold harmless and indemnify City, its City Council, commissions, officers, agents, volunteers, and employees from and against any claim, injury, liability, loss, cost, penalties, forfeiture, and/or expense or damage arising out of work performed on the Property by Lessee or its contractors, consultants, agents or assigns, together with reasonable attorneys’ fees and all costs and expenses reasonably incurred by City in negotiating, settling, defending or otherwise protecting against such claims.
20.3 Hazardous Materials Indemnity.
Lessee shall protect, defend (with counsel acceptable to City), hold harmless, and indemnify the City, its City Council, commissions, officers, agents, volunteers, and employees from and against any and all claims, injuries, liabilities, costs, penalties, forfeitures, losses, and/or expenses or damages, including without limitation, diminution in value of the Property or Premises, damages for the loss or restriction on use of the rentable or usable space or of any amenity of the Property or Premises, damages arising from any adverse impact or marketing of the Property or Premises and sums paid in settlement of claims, response costs, cleanup costs, site assessment costs, attorneys’ fees, consultant and expert fees, judgments, administrative rulings or orders, fines, costs of death of or injury to any person, or damage to any property whatsoever (including, without limitation, groundwater, sewer systems, and atmosphere), arising from, caused, or resulting, either prior to or during the Lease Term, in whole or in part, directly or indirectly, by the presence or discharge in, on, under, or about the Property by Lessee, Lessee’s agents, employees, licensees, or invitees or at Lessee’s direction, of Hazardous Material, or by Lessee’s failure to comply with any law applicable to the use, storage or disposal of Hazardous Materials, whether knowingly or by strict liability. For purposes of the indemnity provided herein, any acts or omissions of Lessee or its employees, agents, customers, sublessees, assignees, contractors, or subcontractors of Lessee (whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable to Lessee.
Lessee’s indemnification obligations shall include, without limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary Hazardous Materials management plan, investigation, repairs, cleanup or detoxification or decontamination of the Property or Site, and the presence and implementation of any closure, remedial action or other required plans, and shall survive the expiration of or early termination of the Lease Term.
City shall protect, defend (with counsel acceptable to Lessee), hold harmless, and indemnify the Lessee, its officers, agents, and employees from and against any and all claims, injuries, liabilities, costs, penalties, forfeitures, losses, and/or expenses or damages, including without limitation, damages for the loss or restriction on use of the rentable or usable space or of any amenity of the Property or Premises, damages arising from any
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Exhibit N - 16
adverse impact or marketing of the Property or Premises and sums paid in settlement of claims, response costs, cleanup costs, site assessment costs, attorneys’ fees, consultant and expert fees, judgments, administrative rulings or orders, fines, costs of death of or injury to any person, or damage to any property whatsoever (including, without limitation, groundwater, sewer systems, and atmosphere), arising from, caused, or resulting, either prior to or during the Lease Term, in whole or in part, directly or indirectly, by the presence or discharge in, on, under, or about the Property by City of Hazardous Material, or by City’s failure to comply with any law applicable to the use, storage or disposal of Hazardous Materials, whether knowingly or by strict liability. For purposes of the indemnity provided herein, any acts or omissions of City (whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable to City. City’s indemnification obligations shall include, without limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary Hazardous Materials management plan, investigation, repairs, cleanup or detoxification or decontamination of the Property or Site, and the presence and implementation of any closure, remedial action or other required plans, and shall survive the expiration of or early termination of the Lease Term.
20.4 Waiver of Claims. Lessee waives any claims against City for injury to Lessee’s business or any loss of income therefrom, for damage to Lessee’s property, or for injury or death of any person in or about the Property, from any cause whatsoever, except to the extent caused by City’s active negligence or willful misconduct.
20.5 Notice. Each Party shall give the Other Party prompt written notice of any claim or liability indemnified against under this Lease.
ARTICLE 21
CASUALTY DAMAGE; FORCE MAJEURE.
21.1 Subject to section 21.2 below, if the Premises, or any building or structure within or upon which the Facility is installed (“Building”), is damaged by fire, flood, earthquake, tornado, or other casualty (collectively “Casualty”), to such extent that material restoration can, in City’s estimation, be reasonably completed within six (6) months of the date of the Casualty, this Lease shall not terminate. Provided that insurance proceeds are received by City to fully repair the damage (if City is insured) or if City allocates adequate funding to fully repair the damage, City shall proceed to rebuild and repair the Premises and Building diligently and in the manner determined by City (provided City shall make available to Lessee not less than the same area and access to sunlight as existed prior to the Casualty), except that City shall not be required to rebuild, repair or replace any part of the Facility.
If City chooses not to rebuild, repair or replace any part of the Facility, the Lease shall terminate, and City shall pay Lessee the applicable Termination Payment.
21.2 If all or a substantial part of the Premises or the Building is damaged any Casualty so as to render the use of the Premises unsuitable for the Permitted Use as determined by a qualified engineering consultant retained by Lessee and reasonably acceptable to the City, or if, in the City’s estimation, material restoration cannot be completed within six (6) months of the date of the casualty, then either Party may elect to terminate this Lease on not less than thirty (30) days’ prior notice to the other Party. If neither Party elects to terminate this Lease pursuant to the previous sentence, provided that insurance proceeds are received by City to fully repair the damage (if City is insured) or if City allocates adequate funding to fully repair the damage, City shall proceed to rebuild and repair the Premises and Building
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Exhibit N - 17
diligently and in the manner determined by City (provided City shall make available to Lessee not less than the same area and access to sunlight as existed prior to the Casualty), except that City shall not be required to rebuild, repair or replace any part of the Facility.
If City chooses not to rebuild, repair or replace any part of the Facility, the Lease shall terminate, and City shall pay Lessee the applicable Termination Payment.
21.3 Notwithstanding anything herein to the contrary, if the Premises or Building are damaged or destroyed and are not fully covered by the insurance proceeds received by City or if the holder of any indebtedness secured by a mortgage or deed of trust covering the Premises requires that the insurance proceeds be applied to such indebtedness or if the City does not allocate adequate funding to fully repair the damage, then in such cases, City shall have the right to terminate this Lease by delivering written notice of termination to Lessee within thirty (30) days after the date of notice to Lessor that said damage or destruction is not fully covered by insurance or such requirement is made by any such holder or adequate funding is not allocated, as the case may be, whereupon this Lease shall terminate. Upon termination pursuant to this section, City shall pay Lessee the applicable Termination Payment.
21.4 Waiver. This section 21.4 shall be Lessee’s sole and exclusive remedy in the event of damage or destruction to the Premises or the Building. As a material inducement to City entering into this Lease, Lessee hereby waives any rights it may have under sections 1932, 1933(4), 1941, or 1942 of the California Civil Code with respect to any destruction of the premises, City’s obligation for tenantability of the Premises and Lessee’s right to make repairs and deduct the expenses of such repairs, under any similar law, statute or ordinance now or hereafter in effect.
21.5 Force Majeure. Force Majeure shall excuse the performance by Lessee for a period equal to the prevention, delay, or stoppage.
ARTICLE 22
ASSIGNMENT AND SUBLETTING.
22.1 City’s Consent Required.
(a) No Assignment Without Consent.
(i) Except as provided below in this Article 22, Lessee shall neither assign this Lease, nor any interest therein, and shall neither sublet nor encumber the Premises or any part thereof, nor any right or privilege appurtenant thereto, nor allow or permit any other person(s) to occupy or use the Premises, or any portion thereof, without the prior written consent of City, which consent shall not be unreasonably withheld, conditioned or delayed; provided, Lessee may assign its rights and obligations hereunder without City’s prior consent to (i) any Affiliate of Lessee; (ii) any Person that results from a merger of, reorganization of, or consolidation with Lessee or Lessee’s Affiliate; (iii) any Person that acquires all or substantially all of the stock or assets of Lessee or Lessee’s Affiliate, provided that such person’s creditworthiness is equal to or greater than that of Lessee, as reasonably determined by the City; or (iv) as collateral to Lessee’s financing parties as set forth in Section 22.1(b)(ii),
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Exhibit N - 18
so long as Lessee provides written notice of such assignment to City within thirty (30) days of such assignment.
(ii) Any assignment, subletting, encumbrances, occupation, or use contrary to the provisions of this Lease shall be void and shall constitute breach of this Lease. City may assign any of its rights hereunder without notice to Lessee.
(iii) At City’s request, Lessee shall promptly deliver financial statements, information and other evidence satisfactory to City regarding any proposed assignment or change of control under this Article 22. (b) Consent.
(i) Any direct or indirect change of control of Lessee (whether voluntary or by operation of law) shall be deemed an assignment and shall be subject to the same consent conditions set forth in Section 22.1(a)(i). (ii) Subject to the provisions of this Section 22.1(b)(ii), Lessee shall be permitted to assign this Lease as collateral for any financing or refinancing of the Facility without the prior consent of the City. In connection with any financing or refinancing of the Facility by Lessee, City shall in good faith work with Lessee and Lessee’s financing party to execute a consent to collateral assignment of the Lease in a form substantially similar to the form of “Lender Consent and Agreement” attached hereto as Exhibit H.
(c) Reserved.
(d) Assignment.
(i) Written notification of any assignment or transfer of this Lease shall be given to the City or Lessee (as applicable).
(ii) This Lease shall be binding upon any permitted assignee or successor of Lessee.
(iii) Consent by City to one assignment, subletting, occupation or use by another person shall not be deemed to be consent to any subsequent assignment, subletting, occupation or use by another person. (iv) No assignment, subletting, or encumbrance by Lessee shall release it from or in any way alter any of Lessee’s obligations under this Lease.
22.2 Hazardous Materials. Without limiting City's authority to withhold its consent in other circumstances, it shall not be unreasonable for City to withhold its consent to an assignment or sublet to a proposed assignee or sublessee if:
(a) Any anticipated use of the Property by any proposed assignee or sublessee involves the generation or storage, use, treatment, disposal, or release of Hazardous Material in any manner or for any purpose, except, however, that the
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Exhibit N - 19
proposed assignee may install, operate, and maintain the Facility in accordance with the terms of this Lease;
(b) The proposed assignee or sublessees has been required by any prior landlord, lender, or governmental authority to take remedial action in connection with Hazardous Material contamination at a property, if the contamination resulted from such assignee or sublessee's action, omission or other use of the property in question; or,
(c) The proposed assignee or sublessee is subject to an enforcement order issued by any governmental authority in connection with the release, use, disposal or storage of a Hazardous Material.
22.3 No Release of Lessee. No subletting or assignment as approved by City shall release Lessee of Lessee’s obligation or alter the primary liability of Lessee to perform all obligations by Lessee hereunder. The acceptance of consideration by City from any other person shall not be deemed to be a waiver by City of any provision hereof. In the event of default by any assignee of Lessee or any successor of Lessee in the performance of any of the terms hereof, City may proceed directly against Lessee without the necessity of exhausting remedies against said assignee.
ARTICLE 23
EVENT OF DEFAULT; REMEDIES.
23.1 Event of Default. The occurrence of any one or more of the following events shall constitute a material default, or breach of this Lease by Lessee (“Lessee Event of Default”):
(a) Failure to Make Payments. Failure by Lessee to make any payment required to be made by Lessee hereunder, where such failure continues for a period of ten (10) business days after City provides Lessee with written notice thereof. (b) Failure to Satisfy Lease Obligations. Failure by Lessee to observe or perform any of the Representations and Warranties set forth in section 19 of this Lease or any of the material covenants, conditions or provisions of this Lease in any material respect where such failure shall continue for a period of thirty (30) days after City provides Lessee with written notice thereof; provided, however, that if the nature of Lessee’s failure is such that more than thirty (30) days are reasonably required for its cure, then a Lessee Event of Default shall not have occurred if Lessee demonstrates to City’s reasonable satisfaction that it has commenced such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. Notwithstanding the foregoing, a Lessee Event of Default shall not occur under this section 23.1(B) if the failure to observe or perform any of the Representations and Warranties set forth in section 19 of this Lease or any of the material covenants, conditions or provisions of this Lease in any material respect is caused by an error or omission of an administrative or operational nature.
(c) Assignment to Creditors: Debtor Status; Bankruptcy and Seizure.
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(i) Making, by Lessee, of any general arrangement or assignment for the benefit of creditors;
(ii) Becoming a “Debtor” as defined in 11 U.S.C. §101, as the same may be amended from time to time, (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days);
(iii) The appointment of a bankruptcy trustee or receiver to take possession of all or substantially all of Lessee’s assets located at or on the Premises or of Lessee’s interest in this Lease where possession is not restored to Lessee within thirty (30) days; or the attachment, execution or other judicial seizure of all or substantially all of Lessee’s assets located at or on the Premises, including the Facility, or of Lessee’s interest in this Lease, where such seizure is not discharged within thirty (30) days.
(d) Reserved.
(e) Reserved.
(f) Reserved.
23.2 Lessor Event of Default. The occurrence of any one or more of the following events shall constitute a material default, or breach of this Lease by City (“Lessor Event of Default”):
(a) Failure toMake Payments. Failure by City to make any payment required to be made by City hereunder, where such failure continues for a period of ten (10) business days after Lessee provides City with written notice thereof. (b) Failure to Satisfy Lease Obligations. Failure by Lessor to observe or perform any of the Representations and Warranties set forth in section 19 of this Lease or any of the material covenants, conditions or provisions of this Lease in any material respect where such failure shall continue for a period of thirty (30) days after Lessee provides Lessor with written notice thereof; provided, however, that if the nature of Lessor’s failure is such that more than thirty (30) days are reasonably required for its cure, then a Lessor Event of Default shall not have occurred if Lessor demonstrates to Lessee’s reasonable satisfaction that it has commenced such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. Notwithstanding the foregoing, a Lessor Event of Default shall not occur under this section 23.2(B) if the failure to observe or perform any of the Representations and Warranties set forth in section 19 of this Lease or any of the material covenants, conditions or provisions of this Lease in any material respect is caused by an error or omission of an administrative or operational nature.
(c) Assignment to Creditors: Debtor Status; Bankruptcy and Seizure. (i) Making, by Lessor, of any general arrangement or assignment for the benefit of creditors;
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Exhibit N - 21
(ii) Becoming a “Debtor” as defined in 11 U.S.C. §101, as the same may be amended from time to time, (unless, in the case of a petition filed against Lessor, the same is dismissed within sixty (60) days);
(iii) The appointment of a bankruptcy trustee or receiver to take possession of all or substantially all of Lessor’s assets located at or on the Premises or of Lessor’s interest in this Lease where possession is not restored to Lessor within thirty (30) days; or the attachment, execution or other judicial seizure of all or substantially all of Lessor’s assets located at or on the Property or of Lessor’s interest in this Lease, where such seizure is not discharged within thirty (30) days.
23.3 Lessee Remedies. In the event of any Lessor Event of Default under this Lease, Lessee shall have the right to terminate this Lease upon written notice to Lessor. In the event of an early termination pursuant to this Section 23.3, Lessor shall pay to Lessee, within thirty (30) days of such termination, the applicable Termination Payment.
23.4 Termination of PPA. Any termination of the PPA shall cause this Lease to automatically terminate upon such termination of the PPA, in which case neither Party shall have any liability to the other except for any such liabilities that may have accrued prior to such termination.
23.5 Remedies of City. In the event of any Lessee Event of Default, City may at any time thereafter, following any notice required by statute, and without limiting City in the exercise of any right or remedy which City may have by reason of such Event of Default or breach:
(a) Termination. Terminate Lessee’s right to possession of the Property by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Premises, but not the Facility, to City.
City shall not be required to pay any Termination Payment to Lessee. In such event, City shall be entitled to recover from Lessee all damages incurred by City by reason of the Event of Default or breach, including but not limited to:
(i) The cost of recovering possession of the Premises;
(ii) Expenses for disposing of the Facility;
(iii) Expenses of reletting, including necessary renovation and alteration of the Property and the Facility; and
(iv) Reasonable attorneys’ fees.
(b) Continue Lease. Maintain Lessee’s right to possession, in which case this Lease shall continue in effect whether or not Lessee shall have abandoned the Premises. In such event, City shall be entitled to enforce all of City's rights and remedies under this Lease, including the right to recover fees and payments as they become due hereunder.
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Exhibit N - 22
(c) Other Remedies. Pursue any other remedy now or hereafter available to City under the laws or judicial decisions of the State of California. City shall have all remedies provided by law and equity.
23.6 No Relief from Forfeiture After Event of Default. Lessee waives all rights of redemption or relief from forfeiture under California Code of Civil Procedure sections 1174 and 1179, and any other present or future law, in the event Lessee is evicted or City otherwise lawfully takes possession of the Property by reason of any Event of Default or breach of this Lease by Lessee.
23.7 Disposition of Abandoned Personal Property. If the Lessee fails to remove any personal property belonging to Lessee from the Property within ninety (90) days after of the expiration or termination of this Lease, such personal property shall at the option of City be deemed to have been transferred to City. City shall have the right to remove and to dispose of such personal property without liability to Lessee or to any person claiming under Lessee, and the City shall have no need to account for such personal property.
ARTICLE 24
INTEREST ON PAST-DUE OBLIGATIONS.
Except as expressly provided herein, any amount not paid when due shall bear interest at the lesser of ten percent (10%) per year or the maximum rate then allowable by law from the date due.
ARTICLE 25
HOLDING OVER.
If Lessee remains in possession of the Premises or any part thereof after the expiration of the Term, such occupancy shall be a tenancy from month-to-month with all the obligations of this Lease applicable to Lessee. Nothing contained in this Lease shall give to Lessee the right to occupy the Premises after the expiration of the term, or upon an earlier termination for breach.
ARTICLE 26
INSURANCE.
26.1 Lessee’s responsibility for the Premises pursuant to this Lease begins immediately upon the Effective Date. Lessee, at its sole cost and expense, and at no cost to City, shall purchase and maintain in full force and effect during the entire term of this Lease insurance coverage in amounts and in a form as set forth in Exhibit G (Insurance Requirements) attached hereto and incorporated herein by reference. Said policies shall be maintained with respect to Lessee’s employees, if any, and all vehicles operated on the Property. The policies shall include the required endorsements, certificates of insurance and coverage verifications as described in Exhibit G (Insurance Requirements).
26.2 Lessee shall deposit with the Lease Administrator, on or before the Effective Date of this Lease, certificates of insurance necessary to satisfy City that the insurance provisions of this Lease have been complied with, and to keep such insurance in effect and the certificates therefore on deposit with City during the entire term of this Lease. Should Lessee not provide evidence of such required coverage at least three (3) days prior to the expiration of
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Exhibit N - 23
any existing insurance coverage, City may purchase such insurance, on behalf of and at the expense of Lessee to provide six months of coverage.
26.3 The Lease Administrator shall notify Lessee in writing of changes in the insurance requirements. If Lessee does not deposit copies of acceptable insurance policies with City incorporating such changes within sixty (60) days of receipt of such notice, or in the event Lessee fails to maintain in effect any required insurance coverage, Lessee shall be in default under this lease without further notice to Lessee. Such failure shall constitute a material breach and shall be grounds for immediate termination of this Lease at the option of City.
26.4 The procuring of such required policy or policies of insurance shall not be construed to limit Lessee’s liability hereunder nor to fulfill the indemnification provision and requirements of this Lease. Notwithstanding the policy or policies of insurance, Lessee shall be obligated for the full and total amount of any damage, injury, or loss caused by or connected with this Lease or with use or occupancy of the Premises.
26.5 City Insurance. Upon Lessee’s request, City shall deliver to Lessee certificates of insurance evidencing the City’s insurance coverage for the Premises, which may be through self-insurance or risk pool. All such insurance maintained by City shall be for the exclusive benefit of City and Lessee shall have no right or interest therein.
ARTICLE 27
EMINENT DOMAIN.
27.1 If all of the Premises is condemned by a public entity in the lawful exercise of its power of eminent domain, this Lease shall cease. The date of such termination shall be the effective date of possession of the Premises by the condemning public entity.
27.2 If only a part of the Premises is condemned and the condemnation of that part does not substantially impair the capacity of the remainder to be used for the Permitted Uses, Lessee shall continue to be bound by the terms, covenants, and conditions of this Lease. If the condemnation of a part of the Premises substantially impairs the capacity of the remainder to be used for the Permitted Uses, Lessee may:
(a) Terminate this Lease and thereby be absolved of obligations under this Lease which have not accrued as of the date of possession by the condemning public entity; or
(b) Continue to occupy the remaining Premises and thereby continue to be bound by the terms, covenants and conditions of this Lease.
(c) Lessee shall provide City with written notice advising City of Lessee’s choice within thirty (30) days of possession of the part condemned by the condemning public entity.
27.3 City shall be entitled to and shall receive all compensation related to the condemnation, except that Lessee shall be entitled to:
(a) That portion of the compensation which represents the value for the remainder of the Lease term of any Lessee-constructed improvements taken by the condemning public entity, which amount shall not exceed the actual cost of
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Exhibit N - 24
such improvements reduced in proportion to the relationship of the remaining Lease term to the original Lease term, using a straight line approach; and (b) Any amount specifically designated as a moving allowance or as compensation for Lessee's personal property.
(c) Any applicable Termination Payment.
27.4 In the event of condemnation, Lessee shall have no claim under the Lease against the City for the value of any unexpired term of this Lease except as set forth in section 27.3.
ARTICLE 28
DISPUTE RESOLUTION.
28.1 Unless otherwise mutually agreed to, any controversies between Lessee and City regarding the construction or application of this Lease, and claims arising out of this Lease or its breach shall be submitted to mediation within thirty (30) days of the written request of one Party after the service of that request on the other Party.
28.2 The Parties may agree on one mediator. If they cannot agree on one mediator, the Party demanding mediation shall request the Superior Court of __________ County to appoint a mediator. The mediation meeting shall not exceed one day (eight (8) hours). The Parties may agree to extend the time allowed for mediation under this Lease.
28.3 The costs of mediation shall be borne by the Parties equally.
28.4 Mediation under this section is a condition precedent to filing an action in any court. In the event of litigation arising out of any dispute related to this Lease, the Parties shall each pay their respective attorney’s fees, expert witness costs and cost of suit, regardless of the outcome of the litigation.
ARTICLE 29
NON-LIABILITY OF OFFICIALS AND EMPLOYEES OF THE CITY.
No official or employee of City shall be personally liable for any default or liability under this agreement.
ARTICLE 30
NON-DISCRIMINATION.
Lessee covenants by and for itself, its successors, executors, administrators and assigns, and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons, on account or race, color, creed, religion, sex, sexual orientation, marital status, national origin, actual or perceived gender identity, ancestry or disability in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Premises.
ARTICLE 31
CONFLICT OF INTEREST.
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Exhibit N - 25
31.1 Lessee shall at all times avoid conflict of interest or appearance of conflict of interest in performance under this Lease. Lessee warrants and covenants that no official or employee of City nor any business entity in which any official or employee of City is interested:
(a) Has been employed or retained to solicit or aid in the procuring of this Lease; or
(b) Will be employed in the performance of this Lease without the divulgence of such fact to City.
31.2 In the event that City determines that the employment of any such official, employee or business entity is not compatible with such official’s or employee’s duties as an official or employee of City, Lessee upon request of City shall immediately terminate such employment.
31.3 Violation of this provision constitutes a serious breach of this Lease and City may terminate this Lease as a result of such violation.
ARTICLE 32
MEMORANDUM OF LEASE.
Following execution of this Lease, either Party, at its sole expense, shall be entitled to record the Memorandum of Lease in the form attached hereto as Exhibit I (Memorandum of Lease) in the official records of ________ County, which Memorandum shall be executed contemporaneously with this Lease. Upon termination or expiration of this Lease, Lessee shall execute and record a quitclaim deed as to its leasehold interest.
ARTICLE 33
ESTOPPEL CERTIFICATE; FINANCING.
33.1 Each Party shall, from time to time, upon at least thirty (30) days prior written notice from the other Party, execute, acknowledge and deliver to the requesting Party a written instrument, in form and substance reasonably acceptable to such requesting Party, certifying to such requesting Party, or any other Person specified by such requesting Party (including any financing party of Lessee): (i) that this Lease is unmodified and in full force and effect, or if there has been any modification, that the same is in full force and effect as so modified, and identifying any such modification, and the date to which charges under the Lease, if any, have been paid; (ii) whether or not to the knowledge of such Party there are then existing any offsets or defenses in favor of such Party against enforcement of any of the terms, covenants and conditions of this Lease and, if so, specifying the same and also whether or not to the knowledge of such Party the requesting Party has observed and performed all of the terms, covenants and conditions on its part to be observed and performed, and if not, specifying the same; and (iii) such other information as may be reasonably requested by the requesting Party.
33.2 Lessor agrees and acknowledges that Lessee may elect to finance all or any portion of the Facility, including by utilizing tax equity or cash equity investment and/or through a portfolio financing, which may include cross-collateralization or similar arrangements. In connection with any financing or refinancing of the Facility, Lessor shall execute and deliver such further consents, approvals and acknowledgments as may be reasonable and
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Exhibit N - 26
necessary to facilitate such transactions; provided, Lessor shall not be required to agree to any terms or conditions which are reasonably expected to have a material adverse effect on Lessor and all reasonable attorney’s fees incurred by Lessor in connection therewith shall be borne by Lessee.
ARTICLE 34
LIENS.
34.1 Lessee agrees at its sole cost and expense to keep the Premises and Facility free and clear of any and all claims, levies, liens, encumbrances, or attachments arising out of or related to charges by contractors, subcontractors and suppliers supplying goods or services to Lessee for work or services performed, materials or supplies furnished or obligations incurred by or on behalf of Lessee. Notwithstanding the Facility’s presence on the Premises, Lessee shall not directly or indirectly cause, create, incur, assume or suffer to exist any mortgage, pledge, lien (including mechanics’, labor or materialman’s lien), charge, security interest, encumbrance or claim (collectively, “Liens”) on or with respect to the Premises or any interest therein. Lessee also shall pay promptly before a fine or penalty may attach to the Premises any taxes, charges or fees of whatever type of any payments for which Lessee is responsible. Provided that Lessee complies with the preceding provisions of this Section 34.1, Lessee may grant or incur Liens on the Facility in connection with a financing permitted under Section 33.2.
34.2 If Lessee shall not, within ten (10) days following the imposition of any such Lien, cause the same to be released of record by payment or posting of a proper bond, City shall have, in addition to all other remedies provided herein and by law, the right, but not the obligation, to cause the same to be released by such means as City shall deem proper, including payment of the claim giving rise to such Lien. All sums paid by City on behalf of Lessee and all expenses incurred by City in connection therefor shall be payable to City by Lessee on demand with interest at the applicable interest rate.
34.3 The City shall not directly or indirectly cause, create, incur, assume or allow to exist any Lien on, affecting or with respect to the Facility (including any constituent element or component thereof) or any interest therein. The City shall immediately notify Lessee of the existence of any such Lien and shall promptly cause the same to be discharged and released of record without cost to Lessee. The City covenants and agrees to use commercially reasonable efforts to obtain a subordination, nondisturbance and attornment agreement, in form and substance reasonably satisfactory to Lessee, from each holder of any indebtedness secured by a mortgage or deed of trust covering the Premises during the Term.
ARTICLE 35
NOTICES.
35.1 All notices to the Parties shall, unless otherwise requested in writing, be sent as follows:
(a) To City:
[Name, address, phone, email]
(b) To Lessee:
[Name, address, phone, email]
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Exhibit N - 27
35.2 Any notice required or permitted to be given under this Lease must be in writing and may be given by personal delivery, certified mail, or overnight express delivery service. Notices shall be deemed communicated immediately if personally delivered. Notices shall be deemed communicated within forty-eight (48) hours after the time of mailing if mailed by certified mail, and within twenty-four (24) hours if mailed by express delivery service, excluding Saturdays, Sundays, and holidays. Any such notice shall be deemed sufficiently given if addressed to City or Lessee at the address specified above. Either Party may specify a different address for notice purposes or specify that a copy of any notice given to such Party be concurrently given to another person, by giving appropriate notice to the other Party.
ARTICLE 36
MISCELLANEOUS.
36.1 Time. Time shall be of the essence in this Lease.
36.2 Amendments. No alteration or variation of the terms of this Lease shall be valid unless made in writing and signed by the Parties to this Lease.
36.3 Surrender of Lease Not Merger. The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, shall not work a merger, and shall, at the option of City, terminate all or any existing subleases or subtenancies, or may, at the option of City, operate as an assignment of any and all such subleases or subtenancies.
36.4 Integrated Document. This Lease, including any Exhibits attached hereto, embodies the entire agreement between City and Lessee. No other understanding, agreements, conversations or otherwise, with any officer, agent or employee of City prior to execution of this Lease shall affect or modify any of the terms or obligations contained in any documents comprising this Lease. Any such verbal agreement shall be considered as unofficial information and in no way binding upon City. All agreements with City are subject to approval of the _______________[governing body] before City shall be bound thereby.
36.5 Waiver. Waiver by City of one or more conditions of performance, of an Event of Default, or of any breach of a condition under this Lease shall not be construed as a waiver of any other condition of performance or subsequent Events of Default or breaches. The subsequent acceptance by a Party of the performance of any obligation or duty by another Party shall not be deemed to be a waiver of any term or condition of this Lease. The exercise of any remedy, right, option or privilege hereunder by City shall not preclude City from exercising the same or any and all other remedies, rights, options and privileges hereunder and City’s failure to exercise any remedy, right, option or privilege at law or equity, or otherwise which City may have, shall not be construed as a waiver.
36.6 Severability. If any provision of this Lease is held to be illegal, invalid or unenforceable in full or in part, for any reason, then such provision shall be modified to the minimum extent necessary to make the provision legal, valid and enforceable, and the other provisions of this Lease shall not be affected thereby.
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Exhibit N - 28
36.7 No Construction Against Drafting Party. The Parties agree that this Lease shall be fairly interpreted in accordance with its terms without any strict construction in favor of or against any other Party.
36.8 Governing Law. This Lease shall be governed and construed in accordance with the statutes and laws of the State of California.
36.9 Venue. In the event that suit shall be brought by any Party to this Lease, the Parties agree that venue shall be exclusively vested in the state courts of the County of [_________].
36.10 Compliance with Laws. The Parties hereto shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local governments in the performance of their rights, duties and obligations under this Lease.
36.11 Counterparts. Any number of counterparts of this Lease may be executed and each shall have the same force and effect as the original.
36.12 No Third-Party Beneficiaries. Nothing in this Lease shall provide any benefit to any third party or entitle any third party to any claim, cause of action, remedy or right of any kind, it being the intent of the Parties that this Lease shall not be construed as a third-party beneficiary contract.
36.13 Survival. Any provision of this Lease that expressly or by implication comes into or remains in full force following the termination or expiration of this Lease, including, without limitation section 20 (Hold Harmless/Indemnification) shall survive termination or expiration of this lease.
[SIGNATURES ON NEXT PAGE]
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Exhibit N - 29
IN WITNESS WHEREOF, the Parties have executed this Lease as of the Effective Date.
CITY: LESSEE:
By: ______________________________ By:
______________________________
City Manager
ATTEST:
By: ______________________________
______________________________
City Clerk
APPROVED AS TO FORM:
By: ______________________________
City Attorney
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Exhibit N - 30
EXHIBIT A
DESCRIPTION OF THE PROPERTY
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Exhibit N - 31
EXHIBIT B
DESCRIPTION OF THE FACILITY
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Exhibit N - 32
EXHIBIT C
DEFINITIONS
1. “Access Property” means a non-exclusive right-of-way for vehicular and pedestrian ingress and egress to the Premises to the extent required by Lessee to install, maintain, operate, and remove the Facility, as mutually agreed upon by the Parties.
2. “Affiliate” of a specified Person means any Person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, such specified Person. As used in this definition of Affiliate, the term “control” of a specified Person including, with correlative meanings, the terms, “controlled by” and “under common control with,” means (a) the ownership, directly or indirectly, of more than 50% of the equity interest in a Person or (b) the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
3. “Business Day” means any day other than Saturday, Sunday, or dates the City is closed for a federal, California, or City holiday.
4. “Commercial Operation” means the Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.
5. “Commercial Operation Date” means the date on which Commercial Operation of the Facility begins as certified by Lessee in compliance with the PPA.
6. “Force Majeure” means (a) natural phenomena, such as storms, hurricanes, floods, lightening and earthquakes; (b) explosions or fires arising from lightening or other causes unrelated to the acts or omissions of the Lessee; (c) acts of war or public disorders, civil disturbances, riots, insurrection, sabotage, epidemic, terrorist acts, or rebellion; and (d) acts of God. Force Majeure shall not include equipment failures or acts or omissions of Lessee’s agents, suppliers or subcontractors, except to the extent such acts or omissions arise from Force Majeure. Changes in prices for electricity or solar or storage equipment shall not constitute Force Majeure. In the event any work performed by Lessee or Lessee’s contractors results in a strike, lockout, and/or labor dispute, such strike, lockout, and/or labor dispute shall not be considered Force Majeure.
7. “Facility” means the integrated system for the generation and storage of electricity from solar energy to be installed, maintained, and operated by Lessee at the Premises in accordance with the specifications set forth in Exhibit B (Description of Facility), consisting of, without limitation, photovoltaic panels, battery energy storage systems, and associated equipment including, without limitation, controls, meters, switches, connections, conduit, wires and connections, mounting substrates or supports, power inverters, metering and service equipment, and utility interconnections.
8. “Hazardous Materials” means any toxic or hazardous substance, material or waste or any pollutant or contaminant, or infectious or radioactive material, including but not limited to, those substances, materials, or wastes regulated now or in the future under any of the following statutes or regulations and any and all of those substances included within the definitions of "hazardous substances", "hazardous waste", "hazardous chemical substance or mixture", "imminently hazardous chemical substance or mixture," ''toxic substances,"
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Exhibit N - 33
"hazardous air pollutant", "toxic pollutant" or "solid waste" in the: CERCLA or Superfund as amended by SARA, 42 U.S.C. Sec. 9601 et seq., RCRA, 42 U.S.C. Sec. 6901 et seq., CWA., 33 U.S.C. Sec. 1251 et seq., CAA, 42 U.S.C. 78401 et seq., TSCA, 15 U.S.C. Sec. 2601 et seq., the Refuse Act of 1899, 33 U.S.C. Sec. 407, OSHA, 29 U.S.C. 651 et seq.; hazardous Materials Transportation Act, 49 U.S.C. Sec. 1801 et seq., USDOT Table (40 CFR Part 302 and amendments) or the EPA Table (40 CFR Part 302 and amendments), California Superfund, Cal. Health & Safety Code Sec. 25300 et seq., Cal. Hazardous Waste Control Act, Cal. Health & Safety Code section 25100 et seq., Porter-Cologne Act, Cal.
Water Code Sec. 13000 et seq., Hazardous Waste Disposal Land Use Law, Cal. Health & Safety Code Sec. 25220 et seq., Proposition 65, Cal. Health and Safety Code Sec. 25249.5 et seq., Hazardous Substances Underground Storage Tank Law, Cal. Health & Safety Code Sec. 25280 et seq., California Hazardous Substance Act, Cal. Health & Safety Code Sec. 28740 et seq., Air Resources Law, Cal. Health & Safety Code Sec. 39000 et seq., Hazardous Materials Release Response Plans and Inventory, Cal. Health & Safety Code Secs. 25500-25541, TCPA, Cal. Health and Safety Code Secs. 25208 et seq., and regulations promulgated pursuant to said laws or any replacement thereof, or as similar terms are defined in the federal, state and local laws, statutes, regulations, orders or rules; and any and all other substances, materials, and wastes which are, or in the future become, regulated under applicable local, state or federal law for the protection of health or the environment, or which are classified as hazardous or toxic substances, materials or wastes, pollutants or contaminants, as defined, listed or regulated by any federal, state or local law, regulation or order or by common law decision, including without limitation:
Trichloroethylene, tetrachloroethylene, perchloroethylene and other chlorinated solvents; any petroleum products or fractions thereof; Asbestos, Polychlorinated biphenyls; flammable explosives; urea formaldehyde; and radioactive materials and waste
9. “Lease Administrator” means, for City the City Manager or his/her designee and, for Lessee [_____].
10. “Permits” means all federal, state, and City permits, licenses, certificates, approvals, variances and other entitlements necessary for the installation and operation of the Facility.
11. “Person” means any natural person, sole proprietorship, corporation, partnership, limited partnership, joint venture, limited liability partnership, limited liability company, unlimited liability company, trust, unincorporated association, institution, governmental authority or any other entity.
12. “Prudent Industry Practices” means practices applied by a person seeking in good faith to perform its contractual obligations and in doing so and in the general conduct of its undertaking, exercising that degree of skill, diligence and prudence which would reasonably and ordinarily be expected from a skilled and experienced owner, developer or operator engaged in the same type of undertaking under the same or similar circumstances.
13. “Real Property Taxes” means:
A All taxes, assessments, levies and other charges, general and special, foreseen and unforeseen, now or hereafter imposed by any governmental or quasi-governmental authority or special district having the direct or indirect power to tax or levy assessments, which are levied or assessed against or with respect to:
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Exhibit N - 34
1. Value, occupancy, use or possession of the Premises and/or the Facility;
2. Any improvements, fixtures, equipment and other real or personal property of Lessee that are an integral part of the Premises; or,
3. Use of the Premises, Facility, public utilities, or energy within the Premises.
B “Real Property Taxes” shall also mean all charges, levies or fees imposed by reason of environmental regulation or other governmental control of the premises and/or the improvements, new or altered excise, transaction, sales, privilege, assessment, or other taxes or charges now or hereafter imposed upon City as a result of this Lease, and all costs and fees (including attorneys’ fees) incurred by City in contesting any real property taxes and in negotiating with public authorities as to any real property taxes affecting the Premises. If any real property taxes are based upon property or rents unrelated to the Premises and/or the Facility, then only that part of such tax that is fairly allocable to the Premises and/or the Facility, as determined by City, on the basis of the assessor's worksheets or other available information, shall be included within the meaning of the term “real property taxes.”
14. “Termination Payment” means an amount payable by Lessor to Lessee as of the applicable year of termination as set forth in the table in Exhibit K.
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Exhibit N - 35
EXHIBIT D
DESCRIPTION OF PREMISES
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Exhibit N - 36
EXHIBIT E
SECURITY MEASURES
1. [NTD: Use this version for non-rooftop systems] Lessee, at Lessee’s sole cost and expense, shall install and maintain security devices and establish security protocols to safeguard the Facility from unauthorized access, damage, vandalism, theft or accident and Lessee shall be responsible for any damage, vandalism, theft or accident resulting from its failure to secure the Facility.
2. [NTD: Use this version for rooftop systems] Lessor, at Lessor’s sole cost and expense, shall install and maintain security devices and establish security protocols to safeguard the Facility from unauthorized access, damage, vandalism, theft or accident and Lessor shall be responsible for any damage, vandalism, theft or accident resulting from its failure to secure the Facility. Lessee acknowledges that certain of the Building tenants below the roofline have rights to access the roof of the Building in order to install, replace, maintain and/or repair rooftop HVAC units, satellite dishes and/or antennas that service their leased premises. Lessor agrees to make reasonable efforts to work with such Building Lessees to establish protocols that include providing Lessee with advanced notice and establishing designated paths of travel on the roof during access by such Building tenants to install, replace, maintain and/or repair rooftop HVAC units, satellite dishes and/or antennas that service the Building.
3. [Additional site-specific access/security provisions]
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Exhibit N - 37
EXHIBIT F
WORK SCHEDULE
WORK SCHEDULE FOR FACILITY
Within ten (10) days of the issuance of a building permit to Lessee, Lessee shall provide City with an updated version of the Work Schedule for the Facility to be signed by both City and Lessee. The updated Work Schedule shall be substantially in the form of this Exhibit F, mutually agreeable to City and Lessee, shall identify with specificity the start and end dates of the Scheduled Construction Period and areas of the Property and/or Premises to which the City will lose or have limited access over the course of the Scheduled Construction Period. Such updated Work Schedule shall supersede this Work Schedule for Facilities.
Scheduled Construction Period: ____ weeks.
Description of Property Areas with Lost or Limited Access:________.
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Exhibit N - 38
EXHIBIT G
INSURANCE REQUIREMENTS
STANDARD INSURANCE REQUIREMENTS
Insurance Requirements for Lessee:
Lessee shall purchase and maintain the insurance policies set forth below on all of its operations under this Lease at its sole cost and expense. Insurance shall be in full force and effect commencing on the first day of the term of this Lease and such policies shall be maintained for the full term of this Lease. For purposes of the insurance policies required under this Lease, the term “City” shall include the duly elected or appointed council members, commissioners, officers, agents, employees and volunteers of the City of ______, California, individually or collectively.
Minimum Scope of Insurance
Coverage shall be at least as broad as:
1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001).
2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto).
3. Workers’ Compensation insurance as required by the State of California and Employer’s Liability Insurance.
4. Property insurance against all risks of loss to any tenant improvements or betterments, including the Facility.
The policy or policies of insurance maintained by Lessee shall provide the following limits and coverages:
POLICY MINIMUM LIMITS OF LIABILITY
1. Commercial General Liability $2,000,000 per each occurrence for bodily injury, personal injury and property damage
2. Automobile Liability (including Owned,
Hired, and Non-Owned Automobiles)
$2,000,000 Combined Single Limit
3. Workers’ Compensation
Employee Liability
Statutory
$1,000,000 per accident for bodily injury or
disease
4. Lessee’s Property Insurance (see below)
Agenda Page 280
Exhibit N - 39
Lessee shall procure and maintain property insurance coverage for:
1. the Facility, all trade fixtures and other items of Lessee’s property in, on, at, or about the Premises and the Building, installed by, for, or at the expense of Lessee;
2. all other improvements, betterments, alterations, and additions to the Premises made by, for, or at the expense of Lessee.
Lessee's property insurance must fulfill the following requirements:
1. it must be written on the broadest available “all risk” policy form or an equivalent form acceptable to City.
2. for no less than ninety percent (90%) of the full replacement cost (new without deduction for depreciation) of the covered items and property;
3. the amounts of coverage must meet any coinsurance requirements of the policy or policies; and
4. it must name the City as a loss payee.
Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Lessee shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses.
Notice
Each certificate of insurance must state that the coverage afforded by the policy or policies will not be reduced, cancelled or allowed to expire without at least thirty (30) days prior written notice to City unless due to nonpayment of premiums, in which case ten (10) day’s prior written notice must be given to City.
Waiver of Subrogation
Each required policy must include an endorsement providing that the carrier will waive any right of subrogation it may have against City.
Required Endorsements
The CGL policy and automobile liability policy must include the following specific endorsements:
1. The City, including its Council, officials, officers, employees, agents, volunteers and consultants (collectively, “Additional Insured”) must be named as an additional insured for all liability arising out of the operations by or on behalf of the named insured, and the policy must protect the
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Exhibit N - 40
Additional Insured against any and all liability for personal injury, death or property damage or destruction arising directly or indirectly out of activities performed by or on behalf of Lessee; products and completed operations of the Lessee; premises owned, occupied or used by the Lessee; or automobiles owned, leased, hired or borrowed by the Lessee. The additional insured endorsement must be provided using ISO form CG 20 10 11 85 or an equivalent form approved by the City.
2. The inclusion of more than one insured will not operate to impair the rights of one insured against another, and the coverages afforded will apply as though separate policies have been issued to each insured.
3. The insurance provided is primary and no insurance held or owned by City may be called upon to contribute to a loss.
Acceptability of Insurers
All insurance policies shall be issued by California-admitted carriers having current A.M. Best's ratings of no lower than A-:VII.
Increased City Insurance
Lessee agrees to promptly pay to City, upon demand, the amount of any increase in the rate of insurance on the Premises or on any other part of the Property that results by reason of Lessee’s act(s) or Lessee’s permitting certain activities to take place.
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Exhibit N - 41
EXHIBIT H
FORM OF LENDER CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this "Consent"), dated as of ____________________, 2022 is entered into by and among the CITY OF ___________, a California chartered municipal corporation (the "City"), and ___________ a _____________________ corporation (the "Lender)," by its agent, _________________________________(the "Administrative Agent"), and _________________________, a __________________________ corporation (the "Borrower") (collectively, the "Parties"). Unless otherwise defined, all capitalized terms have the meaning given in the Contract (as hereinafter defined).
RECITALS
A Borrower intends to develop, construct, install, test, own, operate, and use an electric generating and storage facility located in the City of ________ in the State of California, known as the _______________________________ Project (the “Project”).
B In order to partially finance the development, construction, installation, testing, operation and use of the Project, Borrower has entered into that certain financing agreement dated as of_ (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Financing Agreement"), among Borrower, the financial institutions from time to time parties thereto (collectively, the "Lenders") , and Administrative Agent for the Lenders, pursuant to which, among other things, Lenders have extended commitments to make loans and other financial accommodations to, and for the benefit of, Borrower.
C The City and Borrower have entered into that certain Lease Agreement, dated as of ________________________ (attached hereto and incorporated herein by reference, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the "Lease").
D Pursuant to a security agreement executed by Borrower and Administrative Agent for the Lenders (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Security Agreement''), Borrower has agreed, among other things, to assign, as collateral security for its obligations under the Financing Agreement and related documents (collectively, the "Financing Documents"), all of its right, title and interest in, to and under the Le a s e to Administrative Agent for the benefit of itself, the Lenders and each other entity or person providing collateral security under the Financing Documents.
E It is a requirement under the Financing Agreement that the Parties hereto execute this Consent.
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Exhibit N - 42
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties agree, as follows:
A CONSENT TO ASSIGNMENT. The City acknowledges the assignment referred to in Recital E above, consents to an assignment of the Lease pursuant thereto, and agrees with Administrative Agent, as follows:
1. Administrative Agent shall be entitled (but not obligated) to exercise all rights and to cure any defaults of Borrower under the Lease, as the case may be, subject to applicable notice and cure periods provided in the Lease. Upon receipt of notice from Administrative Agent, the City agrees to accept such exercise and cure by Administrative Agent if timely made by Administrative Agent under the Lease, as the case may be, and this Consent. Upon receipt of Administrative Agent's written instructions and to the extent allowed by law, the City agrees to make directly to such account as Administrative Agent may direct the City, in writing, from time to time, any and all payments to be made by the City to Borrower under the Lease, as the case may be, from and after the City's receipt of such instructions, and Borrower consents to any such action. The City shall not incur any liability to Borrower under the Lease or this Consent for directing such payments to Administrative Agent in accordance with this subsection (a).
2. The City will not, without the prior written consent of Administrative Agent (such consent not to be unreasonably withheld), (i) cancel or terminate the Lease, or consent to or accept any cancellation, termination or suspension thereof by Borrower, except as provided in the Lease and in accordance with subparagraph l(c) hereof, (ii) sell, assign or otherwise dispose (by operation of law or otherwise) of any part of its interest in the Lease, except as provided in the Lease, or (iii) amend or modify the Lease in any manner materially adverse to the interest of the Lenders in the Lease as collateral security under the Security Agreement.
3. The City agrees to deliver duplicates or copies of all notices of default delivered by the City under or pursuant to the Lease to Administrative Agent in accordance with the notice provisions of this Consent. The City shall deliver any such notices concurrently with delivery of the notice to Borrower under the Lease. To the extent that a cure period is provided under the Lease, Administrative Agent shall have the same period of time to cure the breach or default that Borrower is entitled to under the Lease, except that if the City does not deliver the default notice to Administrative Agent concurrently with delivery of the notice to Borrower under the Lease, then as to Administrative Agent, the applicable cure period under the Lease shall begin on the date on which the notice is given to Administrative Agent. If possession of the Project is necessary to cure such breach or default, and Administrative Agent or its designee(s) or
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Exhibit N - 43
assignee(s) declare Borrower in default and commence foreclosure proceedings, Administrative Agent or its designee(s) or assignee(s) will be allowed a reasonable period to complete such proceedings so long as Administrative Agent or its designee(s) continue to perform any monetary obligations under the Lease, as the case may be. The City consents to the transfer of Borrower's interest under the Lease to the Lenders or Administrative Agent or their designee(s) or assignee(s) or any of them or a purchaser or grantee at a foreclosure sale by judicial or nonjudicial foreclosure and sale or by a conveyance by Borrower in lieu of foreclosure and agrees that upon such foreclosure, sale or conveyance, the City shall recognize the Lenders or Administrative Agent or their designee(s) or assignee(s) or any of them or other purchaser or grantee as the applicable party under the Lease (provided that such Lenders or Administrative Agent or their designee(s) or assignee(s) or purchaser or grantee assume the obligations of Borrower under the Lease, including, without limitation, satisfaction and compliance with all credit provisions of the Lease, if any, and provided further that such Lenders or Administrative Agent or their designee(s) or assignee(s) or purchaser or grantee has a creditworthiness equal to or better than Borrower, as reasonably determined by City).
4. In the event that the Lease is rejected by a trustee or debtor-in-possession in any bankruptcy or insolvency proceeding, and if, within forty-five (45) days after such rejection, Administrative Agent shall so request, the City will execute and deliver to Administrative Agent a new lease, which lease shall be on the same terms and conditions as the original Lease for the remaining term of the original Lease before giving effect to such rejection, and which shall require Administrative Agent to cure any defaults then existing under the original Lease. Notwithstanding the foregoing, any new lease will be subject to all regulatory approvals required by law. The City will use good faith efforts to promptly obtain any necessary regulatory approvals.
5. In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) elect to perform Borrower's obligations under the Lease, succeed to Borrower's interest under the Lease, or enter into a new lease as provided in subparagraph l(d) above, the recourse of the City against Administrative Agent, Lenders or their designee(s) and assignee(s) shall be limited to such Parties' interests in the Project, and the credit support required under the lease, if any.
6. In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) succeed to Borrower's interest under the Lease, Administrative Agent, the Lenders or their designee(s) or assignee(s) shall cure any then-existing payment and performance defaults under the Lease, except any performance defaults of Borrower itself, which by their nature are not susceptible of being cured. Administrative Agent, the Lenders and their designee(s) or assignee(s) shall have the right to assign all or a pro rata interest in the Lease to a person or entity to whom Borrower's interest in the Project is transferred, provided such transferee assumes the obligations of Borrower under the Lease and has a creditworthiness equal to or better
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Exhibit N - 44
than Borrower, as reasonably determined by the City. Upon such assignment, Administrative Agent and the Lenders and their designee(s) or assignee(s) (including their agents and employees) shall be released from any further liability thereunder accruing from and after the date of such assignment, to the extent of the interest assigned.
B REPRESENTATIONS AND WARRANTIES. The City hereby represents and warrants that as of the date of this Consent:
1. It (i) is duly formed and validly existing under the laws of the State of California, and (ii) has all requisite power and authority to enter into and to perform its obligations hereunder and under the Lease, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby;
2. the execution, delivery and performance of this Consent and the Lease have been duly authorized by all necessary action on its part and do not require any approvals, material filings with, or consents of any entity or person which have not previously been obtained or made;
3. each of this Consent and the Lease is in full force and effect;
4. each of this Consent and the Lease has been duly executed and delivered on its behalf and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law);
5. there is no litigation, arbitration, investigation or other proceeding pending for which the City has received service of process or, to the City's actual knowledge, threatened against the City relating solely to this Consent, the Lease and the transactions contemplated hereby and thereby;
6. the execution, delivery and performance by it of this Consent and the Lease, and the consummation of the transactions contemplated hereby, will not result in any violation of, breach of or default under any term of any material contract or material agreement to which it is a party or by which it or its property is bound, or of any material requirements of law presently in effect having applicability to it, the violation, breach or default of which could have a material adverse effect on its ability to perform its obligations under this Consent;
7. neither the City nor, to the City's actual knowledge, any other party to the Lease, is in default of any of its obligations thereunder; and
8. to the City's actual knowledge, (i) no event or condition exists which would either immediately or with the passage of any applicable grace
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Exhibit N - 45
period or giving of notice, or both, enable either the City or Borrower to terminate or suspend its obligations under the Lease.
Each of the representations and warranties set forth herein shall survive the execution and delivery of this Consent and the consummation of the transactions contemplated hereby.
C NOTICES. All notices required or permitted hereunder shall be given, in writing, and shall be effective (a) upon receipt if hand delivered, (b) upon telephonic verification of receipt if sent by facsimile and (c) if otherwise delivered, upon the earlier of receipt or three (3) Business Days after being sent registered or certified mail, return receipt requested, with proper postage affixed thereto, or by private courier or delivery service with charges prepaid, and addressed as specified below:
If to the City:
Name:
Address:
City, State, Zip Code
Telephone No.:
Fax No.:
Attention:
If to Administrative Agent:
Name:
Address:
City, State, Zip Code
Telephone No.:
Fax No.:
Attention:
If to Borrower:
Name:
Address:
City, State, Zip Code
Telephone No.:
Fax No.:
Attention:
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Exhibit N - 46
Any party shall have the right to change its address for notice hereunder to any other location within the United States by giving thirty (30) days written notice to the other parties in the manner set forth above.
D ASSIGNMENT, TERMINATION, AMENDMENT. This Consent shall be binding upon and benefit the successors and assigns of the Parties hereto and their respective successors, transferees and assigns (including without limitation, any entity that refinances all or any portion of the obligations under the Financing Agreement). The City agrees (a) to confirm such continuing obligation, in writing, upon the reasonable request of (and at the expense of) Borrower, Administrative Agent, the Lenders or any of their respective successors, transferees or assigns, and (b) to cause any successor-in-interest to the City with respect to its interest in the Lease to assume, in writing and in form and substance reasonably satisfactory to Administrative Agent, the obligations of City hereunder. Any purported assignment or transfer of the Lease not in conjunction with the written instrument of assumption contemplated by the foregoing clause (b) shall be null and void. No termination, amendment, or variation of any provisions of this Consent shall be effective unless in writing and signed by the parties hereto. No waiver of any provisions of this Consent shall be effective unless in writing and signed by the party waiving any of its rights hereunder.
E GOVERNING LAW. This Consent shall be governed by the laws of the State of California applicable to contracts made and to be performed in California. The federal courts or the state courts located in California shall have exclusive jurisdiction to resolve any disputes with respect to this Consent with the City, Assignor, and the Lender or Lenders irrevocably consenting to the jurisdiction thereof for any actions, suits, or proceedings arising out of or relating to this Consent.
F COUNTERPARTS. This Consent may be executed in one or more duplicate counterparts, and when executed and delivered by all the parties listed below, shall constitute a single binding agreement.
G SEVERABILITY. In case any provision of this Consent, or the obligations of any of the Parties hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions, or the obligations of the other Parties hereto, shall not in any way be affected or impaired thereby.
H ACKNOWLEDGMENTS BY BORROWER. Borrower, by its execution hereof, acknowledges and agrees that neither the execution of this Consent, the performance by the City of any of the obligations of the City hereunder, the exercise of any of the rights of the City hereunder, or the acceptance by the City of performance of the Lease by any party other than Borrower shall (I) release Borrower from any obligation of Borrower under the Lease, (2) constitute a consent by the City to, or impute knowledge to the City of, any specific terms or conditions of the Financing Agreement, the Security Agreement or any of the other Financing Documents, or (3) except as expressly set forth in this Consent, constitute a waiver by the City of any of its rights under the Lease. Borrower and Administrative Agent acknowledge hereby for the benefit of City that none of the Financing Agreement, the Security Agreement, the Financing Documents or any
Agenda Page 288
Exhibit N - 47
other documents executed in connection therewith alter, amend, modify, or impair (or purport to alter, amend, modify, or impair) any provisions of the Lease.
CITY OF_________________________ ADMINISTRATIVE AGENT
APPROVED AS TO FORM _________________________________
___________________________ BORROWER
City Attorney
_________________________________
APPROVED
___________________________
City Manager
Agenda Page 289
Exhibit N - 48
EXHIBIT I
MEMORANDUM OF LEASE
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
[Agency and address]
MEMORANDUM OF LEASE
This memorandum of Lease (Memorandum") is entered into as of this __________day of __________________, 20__, by and between _____________, a ______________ (“Lessor”) and ______________, a Delaware limited liability company (“Lessee”), with respect to that certain Lease Agreement dated ___________________, 20___ (“Lease), between Lessor and Lessee.
Pursuant to the Lease, Lessor leases to Lessee and Lessee leases from Lessor a portion of each of the property known as ____________ located in the City of _______, County of ________, California, for the purpose of installing constructing, operating and maintaining a solar powered electric generating and storage facility (the “Facility”) to be owned, maintained and operated by Lessee, all subject to the terms and conditions more fully set forth in the Lease.
The Lease shall commence on _________________________ and shall end on the date that is twenty (20) years after the commencement of the commercial operation date of the Facility plus a ninety (90) day removal period. Pursuant to section XX of the Lease, Lessor has the right to purchase the Facility at the expiration of the Lease term.
This Memorandum is solely for recording purposes and shall not be construed to alter, modify, amend or supplement the Lease, of which this is a memorandum.
Lessor and Lessee desire to have this Memorandum recorded in the Official Records of _________ County, California, in order to put interested parties on notice of the Lease.
In Witness Whereof, the parties hereto have executed this Memorandum on the day and year first written above.
LESSOR:
{INSERT NAME OF LESSOR},
a
By: ________________________________
Its: ________________________________
ATTEST:
By: ________________________________
City Clerk
APPROVED AS TO FORM:
By: ________________________________
City Attorney
LESSEE:
{INSERT NAME OF LESSEE}
a
Agenda Page 290
Exhibit N - 49
By: ________________________________
Its: ________________________________
Agenda Page 291
Exhibit N - 50
STATE OF CALIFORNIA
COUNTY OF __________________ )
On ______________________, before me, _____________________________, a notary public in and for said County, personally appeared ________________________________who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Agenda Page 292
Exhibit N - 51
EXHIBIT J
ROOF REPAIR/REPLACEMENT
[NTD: Applicable only for rooftop solar systems identified as requiring roof replacements.]
1. Engineering Review; Approvals. Lessor shall, at no out-of-pocket cost to Lessor, reasonably cooperate with Lessee’s effort to (a) obtain a structural analysis, at Lessee’s sole cost and expense from a structural engineer and selected by Lessee and properly licensed in the State of California (the “Engineering Review”), confirming whether the building on which the Facility will be installed (the “Building”) will support the Permitted Use, and identifying any necessary or recommended repairs to any portion of the Premises or the Building necessary or appropriate in connection with installation, siting and operation of the Facility at the Premises, and (b) obtain and maintain any permitting authority’s required permits or approvals in connection therewith (“Approvals”). A copy of the Engineering Review shall be delivered to Lessor promptly following Lessee’s receipt thereof. Except as may be required by applicable Law, Lessor shall make commercially reasonable efforts not to materially interfere with the Permitted Use or Lessee’s ability to obtain the Engineering Review or to obtain and maintain the Approvals.
2. Roof Repairs/Replacement. Lessee shall determine, based on the Engineering Review, the scope of repairs and/or replacements to the Building necessary to permit installation, siting and operation of the Facility in accordance with Lessee’s standards (the “Roof Work”).
Lessee shall contract for and cause performance of the Roof Work at Lessee’s sole cost and expense, subject to Lessor’s prior approval of the plans and specifications for such Roof Work, which approval shall not be unreasonably delayed, withheld or conditioned.
Any Roof Work shall utilize the materials described in Exhibit J-1 hereto. Lessor shall enter into a contract for the Roof Work with a roof contractor that is properly licensed in the State of California, insured in accordance with the requirements of this Lease. Upon completion of the Roof Work, the same shall become a part of the Premises and shall be the real property of Lessor, subject to the terms and conditions of this Lease.
3. Lessor Reimbursement for Roof Work. In the event of an early termination of the Lease (except due to a Lessee Event of Default), Lessor shall reimburse Lessee for an amount equal to the product of (a) Lessee’s cost with respect to the Roof Work, multiplied by (b) a fraction, the numerator of which equals the difference of twenty (20) minus the number of years since the Facility achieved Commercial Operation (as defined in the PPA) as of the early termination date of this Lease, and the denominator of which is twenty (20).
4. Lessee’s Maintenance Obligations. Lessee shall obtain a warranty that meets or exceeds the requirements set forth in Exhibit J-2 attached hereto covering the Roof Work (the “Roof Warranty”) naming Lessor as beneficiary thereof. Lessee shall provide a copy of the Roof Warranty to Lessor promptly following completion of the Roof Work. Lessor and Lessee shall comply with the Roof Warranty and perform all work in and on the Premises in accordance with the Roof Warranty, and shall not take or omit to take any action that would affect or invalidate the Roof Warranty. During the Term, Lessee will maintain the Facility in good operating condition and repair, including the area of the roof beneath the Facility (except as set forth in Section 5 of this Exhibit J). If there is any water damage, including mildew or mold related to said water damage, to the Building during the Term that is caused by Lessee’s cleaning, repair, replacement, removal, improvement, enhancement,
Agenda Page 293
Exhibit N - 52
relocation, installation, or alteration of the Facility, then Lessee shall, at its sole cost, repair the roof and such water damage, mildew or mold as necessary (x) to return the roof membrane to a watertight condition; and (ii) to return any damaged element of the Building or contents therein to the condition it was in prior to the water damage.
5. Lessor’s Maintenance Obligations.
(a) During the Term, except for those items that are the express obligation of Lessee set forth in Section 4 of this Exhibit J, Lessor shall maintain in good operating condition and repair, the Building and the Premises, including structural elements of the Building (including the roof) and the Premises. Lessor shall use commercially reasonable efforts to make repairs to the Building during the period from October through April in order to eliminate any material interference with the Permitted Use. Lessor shall maintain the roof membrane, gutters, scuppers, and downspouts in accordance with the Roof Warranty so that the Roof Warranty will not be voided by any such repairs or maintenance.
(b) During the Term, Lessor shall not allow trees or other plants to overgrow if such overgrowth would cause two percent (2%) or greater shading of the Solar Facility’s solar modules, as measured by industry standard shade analysis tools and practices.
If Lessor fails to regularly maintain surrounding trees and other plants in accordance with the foregoing, Lessor shall pay such costs to Lessee within thirty (30) days of receipt by Lessor of an invoice therefore.
Agenda Page 294
Exhibit N - 53
EXHIBIT J-1
ROOF REPLACEMENT MATERIAL REQUIREMENTS
Agenda Page 295
EXHIBIT J-2
ROOF WARRANTY REQUIREMENTS
GAF WellRoof® Diamond Pledge™ NDL (No Dollar Limit) Roof Guarantee with WellRoof® Extension for a 20-year term (exclusive of extension) of roof warranty coverage.
Agenda Page 296
Agenda Page 297
Exhibit N - 56
EXHIBIT K
TERMINATION PAYMENT
The Termination Payment with respect to the Facility under the Lease shall be calculated in accordance with the following:
Early
Termination
Occurs in Year:
Termination
Payment if PPA
Storage Rate is
$ per kW-mo.
Termination
Payment if PPA
Storage Rate is
$ per kW-mo.
Termination
Payment if PPA
Storage Rate is
$ per kW-mo.
Termination
Payment if PPA
Storage Rate is
$ per kW-mo.
1* $[_____] $[_____] $[_____] $[_____]
2 $[_____] $[_____] $[_____] $[_____]
3 $[_____] $[_____] $[_____] $[_____]
4 $[_____] $[_____] $[_____] $[_____]
5 $[_____] $[_____] $[_____] $[_____]
6 $[_____] $[_____] $[_____] $[_____]
7 $[_____] $[_____] $[_____] $[_____]
8 $[_____] $[_____] $[_____] $[_____]
9 $[_____] $[_____] $[_____] $[_____]
10 $[_____] $[_____] $[_____] $[_____]
11 $[_____] $[_____] $[_____] $[_____]
12 $[_____] $[_____] $[_____] $[_____]
13 $[_____] $[_____] $[_____] $[_____]
14 $[_____] $[_____] $[_____] $[_____]
15 $[_____] $[_____] $[_____] $[_____]
16 $[_____] $[_____] $[_____] $[_____]
17 $[_____] $[_____] $[_____] $[_____]
18 $[_____] $[_____] $[_____] $[_____]
19 $[_____] $[_____] $[_____] $[_____]
20 $[_____] $[_____] $[_____] $[_____]
At Expiration (the end of the Initial Term), the Termination Payment shall be zero (0). *Includes early termination prior to the Commercial Operation Date.
Agenda Page 298
Exhibit O - 1
EXHIBIT O
FORM OF SURETY BOND
PAYMENT DEMAND BOND
[Seller Name], a corporation organized under the laws of [State] (the “Principal”), and [Surety Company Name], a corporation organized under the laws of [State] (the “Surety”), are held and firmly bound unto Clean Power Alliance of Southern California, a California joint powers authority (the “Obligee”), in the sum of [Bond Amount] U.S. dollars ($[Bond Amount]) (the “Bond Amount”), for the payment of which sum, well and truly to be made, the Principal and the Surety bind themselves, their heirs, executors, administrators, successors, and assigns, jointly and severally, firmly to the Obligee by this Payment Demand Bond (the “Bond”).
WHEREAS, the Principal and the Obligee have entered into that certain Renewable Power Purchase Agreement (as may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms; hereinafter, the “Agreement”), dated [Effective Date], which requires the Principal to provide the Obligee with a Bond to ensure the Principal’s performance of its obligations to payment of all of Principal’s suppliers, contractors and subcontractors who provided materials or services in connection with achieving Commercial Operation of the Facility (the “Obligations”). All capitalized terms used but not defined in this Bond shall have the definitions provided in the Agreement, which is hereby referred to and made a part hereof as fully and to the same extent as if attached hereto.
NOW, THEREFORE, the conditions of this Bond are such that if the Principal shall perform all of its Obligations under the Agreement in accordance with its terms and conditions prior to its achievement of Commercial Operation, then the Surety’s obligations under this Bond shall be null and void; otherwise, this Bond shall remain in full force and effect in accordance with its terms and conditions.
PROVIDED, HOWEVER, this Bond is executed by the Principal and Surety and accepted by the Obligee subject to the following terms and conditions:
1. This Bond shall be valid starting on [Effective Date] (the “Start Date”) and shall automatically renew on a year-to-year basis on the anniversary of the Start Date (the “Anniversary Date”), unless the Surety provides written notice to the Principal and the Obligee of its intent to cancel this Bond at least ninety (90) days before the next Anniversary Date. The Principal shall have sixty (60) days after the Obligee’s receipt of such written notice from the Surety (the “Notice Period”) to provide the Obligee with a replacement Surety Bond in an amount and form permitted under the Agreement. If the Principal provides such replacement Surety Bond by the final day of the Notice Period, the Obligee shall provide written notice thereof to the Surety, and upon effectiveness of such replacement Surety Bond, shall acknowledge in writing the cancelation of this Bond as of the Anniversary Date.
2. Should the Principal fail to provide replacement Surety Bond in accordance with the Agreement by the final day of the Notice Period, the Obligee may make a written demand to the Surety for payment (“Demand”) of the Bond Amount to the Obligee, or such lesser amount in the sole discretion of the Obligee, and said sum shall be paid in accordance with this Bond.
Agenda Page 299
Exhibit O - 2
3. Provided all Obligations of the Principal have been met, the Surety’s liability shall cease upon payment of all of Principal’s suppliers, contractors and subcontractors who provided materials or services in connection with achieving Commercial Operation of the Facility, and the Bond shall be promptly returned to the Principal.
4. No claim, action, suit or proceeding, except as herein set forth, shall be had or maintained against the Surety on this Bond unless the same be brought or instituted and process served upon the Surety within twenty-four (24) months following the expiration or cancellation of this Bond in accordance with its terms.
5. This Bond cannot be assigned by the Principal or the Surety without the prior express written consent of the Obligee.
6. This Bond is governed by and to be construed according to the laws of the State of California, without giving effect to any choice or conflict of law rules or provisions thereof which may direct the application of the laws or rules of another jurisdiction.
7. Multiple Demands by the Obligee are permitted under this Bond; provided, the Surety’s liability under this Bond shall not exceed the Bond Amount.
8. Notices and Demands provided under this Bond may be sent to a party by courier, certified mail, registered mail, electronic mail or similar communications facility, to its respective address set forth below and is deemed to have been received by the party to whom it is sent at the time of its delivery if personally delivered, or on the business day following its receipt if mailed by courier, certified mail or registered mail, or on the business day following its successful transmittal if sent by electronic mail.
If to the Surety:
[Surety Address]
If to the Obligee:
Clean Power Alliance of Southern California,
a California joint powers authority
801 S Grand, Suite 400
Los Angeles, CA 90017
If to the Principal:
[Principal Address]
9. Within five (5) Business Days of the Surety’s receipt of a Demand from the Obligee, the Surety shall pay to the Obligee the amount of such Demand. The Obligee’s Demand to the Surety of the amount due from the Principal to the Obligee under the Agreement shall be absolute proof of the existence and extent of the liability of the Principal and the Surety to the Obligee hereunder. The Surety will honor the Demand without inquiring whether the Obligee has a right, as between the Principal and the Obligee, to make such demand and without recognizing any claims or objections of the Principal. The Surety hereby waives and agrees not to assert any right to require the Obligee to make demand on or to proceed against the Principal or any other person, party or security before delivering a Demand
Agenda Page 300
Exhibit O - 3
under this Bond. The obligation of the Surety to pay amounts hereunder is absolute and unconditional and the Surety hereby waives all legal and equitable defenses that may be available to the Surety in respect of its obligation to pay the Bond Amount, in whole or in part, upon receipt of a Demand. Without limiting the generality of the foregoing, the Surety shall not assert as a defense or grounds for not paying the Bond Amount, in whole or in part, pursuant to such Demand that:
a. such condition has not occurred;
b. the amount set out in the Demand is not appropriate, warranted or otherwise not in accordance with the Agreement;
c. the Obligee is in default under the Agreement; or
d. any other fact or circumstance excuses payment.
10. The Surety represents and warrants to the Obligee that:
a. The Surety has the legal power to execute and deliver this Bond and to perform in accordance with its terms. All necessary actions have been taken to authorize the execution and delivery of this Bond and performance in accordance with its terms.
This Bond is a legal, valid, and binding obligation of the Surety. b. There is no action or proceeding pending or, to the Surety’s knowledge, threatened before any court, arbitrator, or governmental agency that may materially adversely affect the Surety’s ability to perform its obligations under this Bond. c. There is no fact that the Surety has not disclosed in writing to the Obligee of which the Surety is aware or which the Surety can reasonably foresee that would materially adversely affect the Surety or the ability of the Surety to perform its obligations under this Bond.
11. The Surety’s liability under this Bond shall not be discharged, released or affected by:
a. any arrangements made between the Obligee and the Principal; b. any dispute between the Surety and the Principal;
c. the taking or receiving of security by the Obligee from the Principal; d. any alteration, change, addition, modification, or variation, in the Principal’s obligations under the Agreement;
e. the exercise by the Obligee of any of the rights or powers reserved to it under the Agreement or available at law or equity;
f. any forbearance to exercise any such rights or powers whether as to payment, time, performance or otherwise (whether or not any arrangement, alteration or forbearance is made with the Surety's knowledge or consent);
Agenda Page 301
Exhibit O - 4
g. the ability of the Surety to perfect any lien or security interest on any asset or property of the Principal or any other person, or to realize upon any such collateral or other credit support;
h. the Surety’s ability to obtain indemnification from the Principal or any other person; or
i. any other circumstances which might otherwise constitute a legal or equitable discharge or defense for the Surety.
12. Payments hereunder shall be made by the Surety to the Obligee (a) by wire transfer in U.S. dollars of immediately available funds in the amount of such payment in accordance with the Obligee’s instructions set forth in the Demand and (b) without any deduction, recoupment, diminution, set-off, counterclaim, defenses or withholding (other than deduction or withholding of tax required by law, which shall be permitted), and the Surety expressly waives any such right, claim or defense.
13. The Principal shall pay all commissions and charges for this Bond. The Principal’s failure to pay any such commissions or charges shall not (i) be grounds for termination of this Bond, or (ii) hinder, delay, or otherwise excuse the Surety’s obligations hereunder.
14. The Surety shall pay upon Demand, up to the Bond Amount, all costs incurred by the Obligee in the enforcement of this Bond, including expenses and reasonable attorney fees.
15. Should any provision of this Bond be determined by a court of competent jurisdiction to be unenforceable, all of the other provisions shall remain effective and enforceable.
IN WITNESS WHEREOF this Bond has been duly SIGNED, SEALED AND DELIVERED this, ________ day of ______,_______.
ATTEST___________________________ BY_______________________________ Principal
ATTEST ___________________________ BY_______________________________ Attorney-in-Fact
Seal
Agenda Page 302
CPA 2023 POWER READY PROGRAM
RENEWABLE ENERGY + STORAGE PRO FORMA PPA SPECIAL CONDITIONS
RENEWABLE POWER PURCHASE AGREEMENT
SPECIAL CONDITIONS
This Special Conditions (“Special Conditions”) is entered into as of _________ (the “Effective Date”), between Buyer and Seller.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate one or more Facilities; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in the Agreement, the Product from each Facility; and WHEREAS, the Parties acknowledged that certain Renewable Power Purchase Agreement General Terms and Conditions dated as of ____________ (“General Conditions”), which are incorporated by reference as set forth herein;
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:
1. Incorporation of General Conditions. The General Conditions are incorporated herein as if set forth in their entirety. Any capitalized terms not otherwise defined herein shall have the meaning given to them in the General Conditions.
2. Schedules. The following Schedules comprise the remainder of the Special Conditions:
Schedule 1 Key Commercial Terms
Schedule 2 Description of the Site and Facility
Schedule 3 Emergency Energy Services
Schedule 4 Bill Optimization Services
Schedule 5 Material Permits
Schedule 6 Buyer Termination Payment Amount
Schedule 7 Metering Diagram
Schedule 8 Revised PPA Provisions for Alternate Guaranteed Storage Capacity
Agenda Page 303
2 3. Alternate Storage Capacity Provisions. Buyer shall have the right, in its sole discretion, by providing Notice to Seller that it elects to increase the Guaranteed Storage Capacity to the Alternate Guaranteed Storage Capacity in accordance with this Section 3. Commencing on the date that is sixty (60) days following the Effective Date, the Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date shall be extended on a day-for-day basis each day on which such Notice from Buyer is pending. Upon delivery of a Notice confirming that Buyer elects to increase the Guaranteed Storage Capacity, the revised Agreement provisions set forth in Schedule 8 shall immediately go into effect.
[Signatures on following page]
Agenda Page 304
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
Coast Energy DevCo, LLC, a Delaware LLC
By:
Name: Blair Herbert
Title: Authorized Signer
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA, a California joint powers authority
By:
Name: Theodore Bardacke
Title: Chief Executive Officer
Agenda Page 305
Schedule 1 – 1
SCHEDULE 1
KEY COMMERCIAL TERMS
Milestones:
Milestone Expected Date for
Completion
Execution of Lease 5/6/2024
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec,
[x] EIR
Not Applicable
Interconnection Approval 9/20/2024
Executed Interconnection Agreement 10/6/2025
Financial Close 2/6/2024
Expected Construction Start Date 11/4/2024
Receipt of permission to operate in parallel with the
Distribution System from the Utility Provider 10/6/2025 Expected Commercial Operation Date 10/6/2025
Delivery Term Expected Energy:
Contract Year Expected Energy (MWh)
1 268.80
2 267.46
3 266.12
4 264.79
5 263.46
6 262.15
Agenda Page 306
Schedule 1 – 2
7 260.84
8 259.53
9 258.23
10 256.94
11 255.66
12 254.38
13 253.11
14 251.84
15 250.58
16 249.33
17 248.08
18 246.84
19 245.61
20 244.38
Guaranteed Capacity: 267.8 kW of total Facility capacity Guaranteed Storage Capacity: 117 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Demand Response Capacity: 17 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Guaranteed PV Capacity: 150.8 kW of Installed PV Capacity Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
1 2
3 Agenda Page 307
Schedule 1 – 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 Guaranteed Construction Start Date: 11/4/2024
Guaranteed Commercial Operation Date: 10/6/2025
Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 20 /MWh (flat)
with no escalation
Agenda Page 308
Schedule 1 – 4
The Storage Rate shall be:
Contract Year Storage Rate
1 – 20 /kW-mo. (flat)
with no escalation
Seller’s Assumed Tax Credits: As of the Effective Date, Seller intends to finance the Facility using the ITC at thirty percent (30%) and/or the PTC at $0.028/kWh.
Product
☒ PV Energy
☒ Discharging Energy
☒ Green Attributes (if Renewable Energy Credit, please check the applicable box below):
☒ Portfolio Content Category 1
☐ Portfolio Content Category 2
☐ Portfolio Content Category 3
☒ Installed Storage Capacity and Effective Storage Capacity ☒ Energy Services
☒ Capacity Attributes (if applicable)
Roof Repairs or Replacement: 35,000 sq.ft. roof repair for an estimated cost to Seller of $14,780.00.
Security Amounts:
Development Security: $90/kW of Guaranteed PV Capacity plus $105/kW of Guaranteed Storage Capacity
Performance Security: $90/kW of Installed PV Capacity plus $105/kW of Installed Storage Capacity
Bond Requirements:
Payment Bond: Buyer shall have the right, in its sole discretion, to provide Notice to Seller prior to the Commercial Operation Date requiring Seller to provide a payment Surety Bond in an amount not less than four million dollars ($4,000,000) to secure Seller’s payment obligation to its suppliers, contractors and subcontractors who provide materials or services in connection with achieving Commercial Operation. Buyer shall reimburse Seller’s actual documented costs to provide such Payment Bond within ten (10) Business Days after Seller provides an invoice to Buyer for such costs, together with supporting documentation reasonably acceptable to Buyer (including at least three quotes from Surety Bond issuers for such Payment Bond), such amount not to exceed five hundred ten thousand dollars ($510,000). Seller shall be solely responsible for any costs in connection with providing the Payment Bond in excess of such maximum reimbursable amount.
Agenda Page 309
Agenda Page 310
Exhibit S - 2
Site Diagram:
Agenda Page 311
Schedule 3 – 1
SCHEDULE 3
EMERGENCY ENERGY SERVICES
1. Seller shall at all times other than during a Blackout Event maintain a minimum stored energy level equal to 117 kWh (“Critical Energy Reserve”). In the event that Seller has advance notice of a potential or planned Blackout Event, Seller shall use commercially reasonable efforts to charge the Storage Facility to 100% SOC prior to the commencement of the Blackout Event.
2. Seller shall deliver Facility Energy to supply the Critical Load upon the occurrence of any Blackout Event (the “Emergency Energy Services”). If (a) the Blackout Event lasts longer than the time it take for Seller to deliver the Critical Energy Reserve and (b) the Storage Facility has additional stored Energy, Seller shall continue to deliver Discharging Energy until the earlier of (w) the SOC reaches zero percent (0%), (x) the Blackout Event ends, or (y) the Critical Load is zero (0) kWh.
“Critical Load” means the amount of Site Load on the Designated Circuit(s) (defined below). “Designated Circuit(s)” means the following circuits at the Site Host premises:
Panel Circuit(s) Description
Lighting
Receptacle
Miscellaneous
Lighting
Receptacle
Receptacle
Air Conditioning-11 (Supply Fan
Only)
provided, prior to the Construction Start Date, Buyer shall have the right, by providing Notice to Seller, to modify the Designated Circuit(s); provided further, in no event shall the Critical Energy Reserve be modified.
“Blackout Event Performance Factor” shall be calculated as the sum of (a) the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the Stored Energy Level at the commencement of Blackout Event divided by (ii) the Critical Energy Reserve, plus (b) if the Storage Facility did not discharge one hundred percent (100%) of the Stored Energy Level at the Agenda Page 312
Schedule 3 - 2
commencement of Blackout Event and the Storage Facility failed to discharge during the entire duration of the Blackout Event (except to the extent such failure was the result of the Storage Facility protection equipment disconnecting the Storage Facility from the Critical Load due to the Critical Load exceeding PMax), the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the total amount of Discharging Energy delivered to the Delivery Point during the Blackout Event divided by (ii) the Stored Energy Level at the commencement of Blackout Event; provided, in no event will the Blackout Event Performance Factor exceed one (1). “PMax” means the maximum operating power level (expressed in kW) of the Storage Facility measured at the Delivery Point.
3. Seller shall provide to Buyer and Site Host a web-based customer portal with read-only access to a forecast, updated no less frequently than once per day, of an hourly forecast of the Facility Energy and Storage Capacity availability for the following day.
4. Seller shall use commercially reasonable efforts to implement Site Host’s input into the manner in which Seller provides the Emergency Energy Services.
Agenda Page 313
Schedule 4 – 1
SCHEDULE 4
BILL OPTIMIZATION SERVICES
1. Seller shall give first priority to operating the Facility to maintain at all times the ability to provide the Emergency Energy Services, and Seller shall give second priority to operating the Facility to maximize the amount of cost savings associated with the Site Host’s monthly bill from the Utility Provider (including the portion(s) of such bills attributable to charges related to Buyer’s services, products and programs) (the “Bill Optimization Services”). Bill Optimization Services shall consist of the following:
(a) Demand Charge Reduction. Delivery of Facility Energy during predicted Site Load peaks to reduce the Site Load and associated demand charges assessed by the Utility Provider;
(b) Time of Use Shifting. Operation of the Facility to maximize delivery of Facility Energy during periods when the retail electricity $/kWh rates applicable to the Site Host are the highest; and
(c) Net Energy Metering. Operation of the Facility to maximize the cost savings derived from the Site Host’s participation in any net energy metering program available.
2. Minimum Guaranteed Cost Savings. Subject to any applicable Adjustments in accordance with Section 4 of this Schedule 4, in each Contract Year the total Cost Savings from the Bill Optimization Services provided in such Contract Year shall not be less than the following amounts (the “Minimum Guaranteed Cost Savings”):
Term Year: Estimated Annual Savings
1 2
3 4
5 6
7 8
Agenda Page 314
Schedule 4 - 2
9 10
11 12
13 14
15 16
17 18
19 20
3. Calculation of Cost Savings: For each Billing Period, Seller shall calculate the difference (the “Cost Savings”) between (a) the electrical energy costs and demand charges that would have been charged by the Utility Provider if the Facility had not been in operation during such Billing Period, and (b) the actual electrical energy costs (net of any net metering or other similar credits or benefits accruing to Site Host as a result of the operation of the Facility) and demand charges. Cost Savings shall be calculated by Seller using data from the Facility Meter, the Utility Provider retail meters with respect to the Site Load, and/or the tariffed rates applicable to the Site Load. Buyer shall, as reasonably requested by Seller, provide (or reasonably cooperate with Seller to enable Seller to obtain) electrical energy use and cost information, demand charges, net energy metering credits and all other information relevant to the calculation of Cost Savings and other amounts under this Agreement.
4. Adjustments. To the extent Seller’s ability or cost to provide the Bill Optimization Services is affected by any of the following (collectively, the “Adjustment Events”), during some or all of a Contract Year, the Minimum Guaranteed Cost Savings (each, an “Adjustment”) shall be subject to a reasonable reduction in accordance with this Section 4 to maintain the balance of the bargain of this Agreement:
(a) A Disruption Period;
(b) A Force Majeure Event;
Agenda Page 315
Schedule 4 - 3
(c) Any material adverse change in the applicable Utility Provider tariff or rate structure, including but not limited to changes in the hours, rates, and calculation methodologies employed by the Utility Provider with respect to the Site Load; (d) Any material deviation in the characteristics of the Site Load compared to the actual Site Load electricity use data for the period between [start date of historical load data] and [end date of historical load data], not resulting from the Facility operations or Seller’s acts or omissions, including as a result of any onsite generation at the Site other than the Facility; (e) Any breach by Buyer of Section 3.1, 3.2 or 3.3 of this Agreement; (f) Any breach by Seller’s landlord of section 7.1(a) (Ingress & Egress), 7.1(b) (Access to Sunlight) that does not constitute Compensated Lost Energy, or Section 12.4(b) of the lease agreement with Seller;
(g) The occurrence of any Compensated Lost Energy; or
(h) A Blackout Event and/or preparing for a Blackout Event pursuant to Section 2 of Schedule 3 of this Special Conditions (for example, by not leaving the Storage Facility with sufficient stored Energy to reduce the peak site load and thus the demand charges in the applicable month).
The Parties shall work together in good faith to determine the amount of the Adjustment.
Seller shall provide Notice to Buyer of any Adjustment Event, including (x) the facts and circumstances giving rise to such Adjustment Event, (y) a statement of the amount of the Adjustment which Seller proposes, and (z) a detailed explanation of, and rationale for, its calculation methodology, annotated work papers and source data. If Buyer disagrees in good faith with such Adjustment amount as calculated by Seller, Buyer may provide Notice to Seller of such disagreement within forty-five (45) days after its receipt of such Notice from Seller. If Buyer does not dispute the proposed amount of such Adjustment within forty-five (45) days after its receipt of such Notice from Seller, Buyer will be deemed to have accepted such Adjustment. If the Parties after good-faith effort are unable to agree on the Adjustment amount within ten (10) Business Days after Seller receives Notice of Buyer’s disagreement with Seller’s proposed Adjustment amount, the Parties shall promptly refer the dispute to an independent expert reasonably agreed to by the Parties. The independent expert, acting as arbitrator, shall finally determine the technical matter at issue in accordance with the provisions of this Agreement and shall issue its written final decision to both Parties within thirty (30) days after the date on which the matter is submitted to it. The final decision of such independent expert shall be binding with respect to the Adjustment. The costs of the determination, including fees and expenses of the independent expert, shall be borne by the Party the independent expert deems is in the wrong. Any Adjustment pursuant to this Section 4 shall apply only to the Contract Year(s) in which such Adjustment Event is applicable.
5. Bill Optimization Services Review. Seller shall review the Bill Optimization Services strategies, assumptions and practices at least annually, and at any time upon Buyer’s reasonable request, to determine if adjustments are appropriate to improve the amount of Cost Savings. Seller shall not make material modifications to its Bill Optimization Services without
Agenda Page 316
Schedule 4 - 4
Buyer’s prior approval, which approval shall not be unreasonably withheld, conditioned or delayed.
Agenda Page 317
Schedule 5 – 1
SCHEDULE 5
MATERIAL PERMITS
No. Permits
1 N/A
2 N/A
Agenda Page 318
Agenda Page 319
Schedule 7 – 1
SCHEDULE 7
METERING DIAGRAM
Agenda Page 320
Agenda Page 321
Agenda Page 322
Schedule 8 – 3
10 11
12 13
14 15
16 17
18 19
20 Agenda Page 323
CPA 2023 POWER READY PROGRAM
RENEWABLE ENERGY + STORAGE PRO FORMA PPA SPECIAL CONDITIONS
RENEWABLE POWER PURCHASE AGREEMENT
SPECIAL CONDITIONS
This Special Conditions (“Special Conditions”) is entered into as of _________ (the “Effective Date”), between Buyer and Seller.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate one or more Facilities; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in the Agreement, the Product from each Facility; and WHEREAS, the Parties acknowledged that certain Renewable Power Purchase Agreement General Terms and Conditions dated as of ____________ (“General Conditions”), which are incorporated by reference as set forth herein;
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:
1. Incorporation of General Conditions. The General Conditions are incorporated herein as if set forth in their entirety. Any capitalized terms not otherwise defined herein shall have the meaning given to them in the General Conditions.
2. Schedules. The following Schedules comprise the remainder of the Special Conditions:
Schedule 1 Key Commercial Terms
Schedule 2 Description of the Site and Facility
Schedule 3 Emergency Energy Services
Schedule 4 Bill Optimization Services
Schedule 5 Material Permits
Schedule 6 Buyer Termination Payment Amount
Schedule 7 Metering Diagram
[Signatures on following page]
Agenda Page 324
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
Coast Energy DevCo, LLC, a Delaware LLC
By:
Name: Blair Herbert
Title: Authorized Signer
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA, a California joint powers authority
By:
Name: Theodore Bardacke
Title: Chief Executive Officer
Agenda Page 325
Schedule 1 – 1
SCHEDULE 1
KEY COMMERCIAL TERMS
Milestones:
Milestone Expected Date for
Completion
Execution of Lease 5/6/2024
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec,
[x] EIR
Not Applicable
Interconnection Approval 6/20/2024
Executed Interconnection Agreement 8/6/2025
Financial Close 2/6/2024
Expected Construction Start Date 11/4/2024
Receipt of permission to operate in parallel with the
Distribution System from the Utility Provider 8/6/2025
Expected Commercial Operation Date 8/6/2025
Delivery Term Expected Energy:
Contract Year Expected Energy (MWh)
1 164.30
2 163.48
3 162.66
4 161.85
5 161.04
6 160.23
Agenda Page 326
Schedule 1 – 2
7 159.43
8 158.64
9 157.84
10 157.05
11 156.27
12 155.49
13 154.71
14 153.94
15 153.17
16 152.40
17 151.64
18 150.88
19 150.12
20 149.37
Guaranteed Capacity: 201.65 kW of total Facility capacity Guaranteed Storage Capacity: 117 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Demand Response Capacity: 50 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Guaranteed PV Capacity: 84.65 kW of Installed PV Capacity Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
1 2
3 Agenda Page 327
Schedule 1 – 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 Guaranteed Construction Start Date: 11/4/2024
Guaranteed Commercial Operation Date: 8/6/2025
Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 20 (flat) with no
escalation
Agenda Page 328
Schedule 1 – 4
The Storage Rate shall be:
Contract Year Storage Rate
1 – 20 /kW-mo. (flat)
with no escalation
Seller’s Assumed Tax Credits: As of the Effective Date, Seller intends to finance the Facility using the ITC at thirty percent (30%) and/or the PTC at $0.028/kWh.
Product
☒ PV Energy
☒ Discharging Energy
☒ Green Attributes (if Renewable Energy Credit, please check the applicable box below):
☒ Portfolio Content Category 1
☐ Portfolio Content Category 2
☐ Portfolio Content Category 3
☒ Installed Storage Capacity and Effective Storage Capacity ☒ Energy Services
☒ Capacity Attributes (if applicable)
Roof Repairs or Replacement: Not Applicable
Security Amounts:
Development Security: $90/kW of Guaranteed PV Capacity plus $105/kW of Guaranteed Storage Capacity
Performance Security: $90/kW of Installed PV Capacity plus $105/kW of Installed Storage Capacity
Bond Requirements:
Payment Bond: Buyer shall have the right, in its sole discretion, to provide Notice to Seller prior to the Commercial Operation Date requiring Seller to provide a payment Surety Bond in an amount not less than four million dollars ($4,000,000) to secure Seller’s payment obligation to its suppliers, contractors and subcontractors who provide materials or services in connection with achieving Commercial Operation. Buyer shall reimburse Seller’s actual documented costs to provide such Payment Bond within ten (10) Business Days after Seller provides an invoice to Buyer for such costs, together with supporting documentation reasonably acceptable to Buyer (including at least three quotes from Surety Bond issuers for such Payment Bond), such amount not to exceed five hundred ten thousand dollars ($510,000). Seller shall be solely responsible for any costs in connection with providing the Payment Bond in excess of such maximum reimbursable amount.
Agenda Page 329
Agenda Page 330
Exhibit S - 2
Site Diagram:
Agenda Page 331
Schedule 3 – 1
SCHEDULE 3
EMERGENCY ENERGY SERVICES
1. Seller shall at all times other than during a Blackout Event maintain a minimum stored energy level equal to 117 kWh (“Critical Energy Reserve”). In the event that Seller has advance notice of a potential or planned Blackout Event, Seller shall use commercially reasonable efforts to charge the Storage Facility to 100% SOC prior to the commencement of the Blackout Event.
2. Seller shall deliver Facility Energy to supply the Critical Load upon the occurrence of any Blackout Event (the “Emergency Energy Services”). If (a) the Blackout Event lasts longer than the time it take for Seller to deliver the Critical Energy Reserve and (b) the Storage Facility has additional stored Energy, Seller shall continue to deliver Discharging Energy until the earlier of (w) the SOC reaches zero percent (0%), (x) the Blackout Event ends, or (y) the Critical Load is zero (0) kWh.
“Critical Load” means the amount of Site Load on the Designated Circuit(s) (defined below). “Designated Circuit(s)” means the following circuits at the Site Host premises:
Panel Circuit(s) Description
Stage Outlet
MPR Outlet
MPR Outlet
MPR Outlet
Data Rack Outlet
Data Rack Outlet
Exterior Lighting
Exterior Lighting
Exterior Lighting
Exterior Lighting
Vending Lounge Outlets
Vending Lounge Outlets
Agenda Page 332
Schedule 3 - 2
Vending Lounge Outlets
Vending Lounge Outlets
Refrigerator
Freezer
MPR Lighting
MPR Lighting
Vending Lounge Lighting
Mens, Womens, Toilet Lighting
Lobby Lighting
provided, prior to the Construction Start Date, Buyer shall have the right, by providing Notice to Seller, to modify the Designated Circuit(s); provided further, in no event shall the Critical Energy Reserve be modified.
“Blackout Event Performance Factor” shall be calculated as the sum of (a) the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the Stored Energy Level at the commencement of Blackout Event divided by (ii) the Critical Energy Reserve, plus (b) if the Storage Facility did not discharge one hundred percent (100%) of the Stored Energy Level at the commencement of Blackout Event and the Storage Facility failed to discharge during the entire duration of the Blackout Event (except to the extent such failure was the result of the Storage Facility protection equipment disconnecting the Storage Facility from the Critical Load due to the Critical Load exceeding PMax), the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the total amount of Discharging Energy delivered to the Delivery Point during the Blackout Event divided by (ii) the Stored Energy Level at the commencement of Blackout Event; provided, in no event will the Blackout Event Performance Factor exceed one (1). “PMax” means the maximum operating power level (expressed in kW) of the Storage Facility measured at the Delivery Point.
3. Seller shall provide to Buyer and Site Host a web-based customer portal with read-only access to a forecast, updated no less frequently than once per day, of an hourly forecast of the Facility Energy and Storage Capacity availability for the following day.
4. Seller shall use commercially reasonable efforts to implement Site Host’s input into the manner in which Seller provides the Emergency Energy Services.
Agenda Page 333
Agenda Page 334
Schedule 4 - 2
9 10
11 12
13 14
15 16
17 18
19 20
3. Calculation of Cost Savings: For each Billing Period, Seller shall calculate the difference (the “Cost Savings”) between (a) the electrical energy costs and demand charges that would have been charged by the Utility Provider if the Facility had not been in operation during such Billing Period, and (b) the actual electrical energy costs (net of any net metering or other similar credits or benefits accruing to Site Host as a result of the operation of the Facility) and demand charges. Cost Savings shall be calculated by Seller using data from the Facility Meter, the Utility Provider retail meters with respect to the Site Load, and/or the tariffed rates applicable to the Site Load. Buyer shall, as reasonably requested by Seller, provide (or reasonably cooperate with Seller to enable Seller to obtain) electrical energy use and cost information, demand charges, net energy metering credits and all other information relevant to the calculation of Cost Savings and other amounts under this Agreement.
4. Adjustments. To the extent Seller’s ability or cost to provide the Bill Optimization Services is affected by any of the following (collectively, the “Adjustment Events”), during some or all of a Contract Year, the Minimum Guaranteed Cost Savings (each, an “Adjustment”) shall be subject to a reasonable reduction in accordance with this Section 4 to maintain the balance of the bargain of this Agreement:
(a) A Disruption Period;
(b) A Force Majeure Event;
Agenda Page 335
Schedule 4 - 3
(c) Any material adverse change in the applicable Utility Provider tariff or rate structure, including but not limited to changes in the hours, rates, and calculation methodologies employed by the Utility Provider with respect to the Site Load; (d) Any material deviation in the characteristics of the Site Load compared to the actual Site Load electricity use data for the period between [start date of historical load data] and [end date of historical load data], not resulting from the Facility operations or Seller’s acts or omissions, including as a result of any onsite generation at the Site other than the Facility; (e) Any breach by Buyer of Section 3.1, 3.2 or 3.3 of this Agreement; (f) Any breach by Seller’s landlord of section 7.1(a) (Ingress & Egress), 7.1(b) (Access to Sunlight) that does not constitute Compensated Lost Energy, or Section 12.4(b) of the lease agreement with Seller;
(g) The occurrence of any Compensated Lost Energy; or
(h) A Blackout Event and/or preparing for a Blackout Event pursuant to Section 2 of Schedule 3 of this Special Conditions (for example, by not leaving the Storage Facility with sufficient stored Energy to reduce the peak site load and thus the demand charges in the applicable month).
The Parties shall work together in good faith to determine the amount of the Adjustment.
Seller shall provide Notice to Buyer of any Adjustment Event, including (x) the facts and circumstances giving rise to such Adjustment Event, (y) a statement of the amount of the Adjustment which Seller proposes, and (z) a detailed explanation of, and rationale for, its calculation methodology, annotated work papers and source data. If Buyer disagrees in good faith with such Adjustment amount as calculated by Seller, Buyer may provide Notice to Seller of such disagreement within forty-five (45) days after its receipt of such Notice from Seller. If Buyer does not dispute the proposed amount of such Adjustment within forty-five (45) days after its receipt of such Notice from Seller, Buyer will be deemed to have accepted such Adjustment. If the Parties after good-faith effort are unable to agree on the Adjustment amount within ten (10) Business Days after Seller receives Notice of Buyer’s disagreement with Seller’s proposed Adjustment amount, the Parties shall promptly refer the dispute to an independent expert reasonably agreed to by the Parties. The independent expert, acting as arbitrator, shall finally determine the technical matter at issue in accordance with the provisions of this Agreement and shall issue its written final decision to both Parties within thirty (30) days after the date on which the matter is submitted to it. The final decision of such independent expert shall be binding with respect to the Adjustment. The costs of the determination, including fees and expenses of the independent expert, shall be borne by the Party the independent expert deems is in the wrong. Any Adjustment pursuant to this Section 4 shall apply only to the Contract Year(s) in which such Adjustment Event is applicable.
5. Bill Optimization Services Review. Seller shall review the Bill Optimization Services strategies, assumptions and practices at least annually, and at any time upon Buyer’s reasonable request, to determine if adjustments are appropriate to improve the amount of Cost Savings. Seller shall not make material modifications to its Bill Optimization Services without
Agenda Page 336
Schedule 4 - 4
Buyer’s prior approval, which approval shall not be unreasonably withheld, conditioned or delayed.
Agenda Page 337
Schedule 5 – 1
SCHEDULE 5
MATERIAL PERMITS
No. Permits
1 N/A
2 N/A
Agenda Page 338
Schedule 6 – 1
SCHEDULE 6
BUYER TERMINATION PAYMENT AMOUNT
The Termination Payment shall be calculated in accordance with the following:
Early
Termination
Occurs in
Year:
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if
Storage Rate is
per kW-mo.
1* $1,440,417 $1,440,417 $1,440,417 $1,440,417
2 $1,364,675 $1,365,335 $1,366,654 $1,367,314
3 $1,201,994 $1,203,416 $1,206,261 $1,207,683
4 $1,087,730 $1,079,703 $1,063,648 $1,055,620
5 $1,077,567 $1,069,629 $1,053,753 $1,045,815
6 $1,066,030 $1,058,189 $1,042,507 $1,034,666
7 $1,053,002 $1,045,266 $1,029,794 $1,022,057
8 $1,038,576 $1,030,951 $1,015,702 $1,008,077
9 $1,022,193 $1,014,690 $999,685 $992,182
10 $1,003,908 $996,537 $981,794 $974,423
11 $983,561 $976,331 $961,873 $954,644
12 $960,883 $953,806 $939,652 $932,575
13 $943,333 $936,422 $922,599 $915,688
14 $915,980 $909,248 $895,784 $889,051
15 $885,799 $879,260 $866,182 $859,643
16 $852,734 $846,402 $833,739 $827,408
17 $816,185 $810,079 $797,867 $791,761
18 $776,045 $770,182 $758,457 $752,594
19 $732,017 $726,417 $715,218 $709,618
20 $683,925 $678,608 $667,974 $662,657
At the end of the Delivery Term, the Termination Payment amount shall be deemed to be zero (0). *Includes Early Termination prior to the Commercial Operation Date.
Agenda Page 339
Schedule 7 – 1
SCHEDULE 7
METERING DIAGRAM
Agenda Page 340
CPA 2023 POWER READY PROGRAM
RENEWABLE ENERGY + STORAGE PRO FORMA PPA SPECIAL CONDITIONS
RENEWABLE POWER PURCHASE AGREEMENT
SPECIAL CONDITIONS
This Special Conditions (“Special Conditions”) is entered into as of _________ (the “Effective Date”), between Buyer and Seller.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate one or more Facilities; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in the Agreement, the Product from each Facility; and WHEREAS, the Parties acknowledged that certain Renewable Power Purchase Agreement General Terms and Conditions dated as of ____________ (“General Conditions”), which are incorporated by reference as set forth herein;
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:
1. Incorporation of General Conditions. The General Conditions are incorporated herein as if set forth in their entirety. Any capitalized terms not otherwise defined herein shall have the meaning given to them in the General Conditions.
2. Schedules. The following Schedules comprise the remainder of the Special Conditions:
Schedule 1 Key Commercial Terms
Schedule 2 Description of the Site and Facility
Schedule 3 Emergency Energy Services
Schedule 4 Bill Optimization Services
Schedule 5 Material Permits
Schedule 6 Buyer Termination Payment Amount
Schedule 7 Metering Diagram
[Signatures on following page]
Agenda Page 341
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
Coast Energy DevCo, LLC, a Delaware LLC
By:
Name: Blair Herbert
Title: Authorized Signer
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA, a California joint powers authority
By:
Name: Theodore Bardacke
Title: Chief Executive Officer
Agenda Page 342
Schedule 1 – 1
SCHEDULE 1
KEY COMMERCIAL TERMS
Milestones:
Milestone Expected Date for
Completion
Execution of Lease 5/6/2024
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec,
[x] EIR
Not Applicable
Interconnection Approval 6/20/2024
Executed Interconnection Agreement 8/6/2025
Financial Close 2/6/2024
Expected Construction Start Date 11/4/2024
Receipt of permission to operate in parallel with the
Distribution System from the Utility Provider 8/6/2025
Expected Commercial Operation Date 8/6/2025
Delivery Term Expected Energy:
Contract Year Expected Energy (MWh)
1 113.90
2 113.33
3 112.76
4 112.20
5 111.64
6 111.08
Agenda Page 343
Schedule 1 – 2
7 110.53
8 109.97
9 109.42
10 108.88
11 108.33
12 107.79
13 107.25
14 106.71
15 106.18
16 105.65
17 105.12
18 104.60
19 104.07
20 103.55
Guaranteed Capacity: 175.2 kW of total Facility capacity Guaranteed Storage Capacity: 117 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Demand Response Capacity: 50 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Guaranteed PV Capacity: 58.2 kW of Installed PV Capacity Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
1 2
3 Agenda Page 344
Schedule 1 – 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 Guaranteed Construction Start Date: 11/4/2024
Guaranteed Commercial Operation Date: 8/6/2025
Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 20 /MWh (flat)
with no escalation
Agenda Page 345
Schedule 1 – 4
The Storage Rate shall be:
Contract Year Storage Rate
1 – 20 /kW-mo. (flat)
with no escalation
Seller’s Assumed Tax Credits: As of the Effective Date, Seller intends to finance the Facility using the ITC at thirty percent (30%) and/or the PTC at $0.028/kWh.
Product
☒ PV Energy
☒ Discharging Energy
☒ Green Attributes (if Renewable Energy Credit, please check the applicable box below):
☒ Portfolio Content Category 1
☐ Portfolio Content Category 2
☐ Portfolio Content Category 3
☒ Installed Storage Capacity and Effective Storage Capacity ☒ Energy Services
☒ Capacity Attributes (if applicable)
Roof Repairs or Replacement: 20,000 sq.ft. roof repair for an estimated cost to Seller of $464,980.00.
Security Amounts:
Development Security: $90/kW of Guaranteed PV Capacity plus $105/kW of Guaranteed Storage Capacity
Performance Security: $90/kW of Installed PV Capacity plus $105/kW of Installed Storage Capacity
Bond Requirements:
Payment Bond: Buyer shall have the right, in its sole discretion, to provide Notice to Seller prior to the Commercial Operation Date requiring Seller to provide a payment Surety Bond in an amount not less than four million dollars ($4,000,000) to secure Seller’s payment obligation to its suppliers, contractors and subcontractors who provide materials or services in connection with achieving Commercial Operation. Buyer shall reimburse Seller’s actual documented costs to provide such Payment Bond within ten (10) Business Days after Seller provides an invoice to Buyer for such costs, together with supporting documentation reasonably acceptable to Buyer (including at least three quotes from Surety Bond issuers for such Payment Bond), such amount not to exceed five hundred ten thousand dollars ($510,000). Seller shall be solely responsible for any costs in connection with providing the Payment Bond in excess of such maximum reimbursable amount.
Agenda Page 346
Agenda Page 347
Exhibit S - 2
Site Diagram:
Agenda Page 348
Schedule 3 – 1
SCHEDULE 3
EMERGENCY ENERGY SERVICES
1. Seller shall at all times other than during a Blackout Event maintain a minimum stored energy level equal to117 kWh (“Critical Energy Reserve”). In the event that Seller has advance notice of a potential or planned Blackout Event, Seller shall use commercially reasonable efforts to charge the Storage Facility to 100% SOC prior to the commencement of the Blackout Event.
2. Seller shall deliver Facility Energy to supply the Critical Load upon the occurrence of any Blackout Event (the “Emergency Energy Services”). If (a) the Blackout Event lasts longer than the time it take for Seller to deliver the Critical Energy Reserve and (b) the Storage Facility has additional stored Energy, Seller shall continue to deliver Discharging Energy until the earlier of (w) the SOC reaches zero percent (0%), (x) the Blackout Event ends, or (y) the Critical Load is zero (0) kWh.
“Critical Load” means the amount of Site Load on the Designated Circuit(s) (defined below). “Designated Circuit(s)” means the following circuits at the Site Host premises:
Panel Circuit(s) Description
Lighting (Circulation Desk)
Miscellaneous (Computers)
Lighting (Conference room)
Lighting (MTG)
Lighting (Toilet)
Miscellaneous (Computers)
Miscellaneous (IT)
provided, prior to the Construction Start Date, Buyer shall have the right, by providing Notice to Seller, to modify the Designated Circuit(s); provided further, in no event shall the Critical Energy Reserve be modified.
“Blackout Event Performance Factor” shall be calculated as the sum of (a) the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the Stored Energy Level at the commencement of Blackout Event divided by (ii) the Critical Energy Reserve, plus (b) if the Storage Facility did not discharge one hundred percent (100%) of the Stored Energy Level at the commencement of Blackout Event and the Storage Facility failed to discharge during the entire Agenda Page 349
Schedule 3 - 2
duration of the Blackout Event (except to the extent such failure was the result of the Storage Facility protection equipment disconnecting the Storage Facility from the Critical Load due to the Critical Load exceeding PMax), the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the total amount of Discharging Energy delivered to the Delivery Point during the Blackout Event divided by (ii) the Stored Energy Level at the commencement of Blackout Event; provided, in no event will the Blackout Event Performance Factor exceed one (1). “PMax” means the maximum operating power level (expressed in kW) of the Storage Facility measured at the Delivery Point.
3. Seller shall provide to Buyer and Site Host a web-based customer portal with read-only access to a forecast, updated no less frequently than once per day, of an hourly forecast of the Facility Energy and Storage Capacity availability for the following day.
4. Seller shall use commercially reasonable efforts to implement Site Host’s input into the manner in which Seller provides the Emergency Energy Services.
Agenda Page 350
Schedule 4 – 1
SCHEDULE 4
BILL OPTIMIZATION SERVICES
1. Seller shall give first priority to operating the Facility to maintain at all times the ability to provide the Emergency Energy Services, and Seller shall give second priority to operating the Facility to maximize the amount of cost savings associated with the Site Host’s monthly bill from the Utility Provider (including the portion(s) of such bills attributable to charges related to Buyer’s services, products and programs) (the “Bill Optimization Services”). Bill Optimization Services shall consist of the following:
(a) Demand Charge Reduction. Delivery of Facility Energy during predicted Site Load peaks to reduce the Site Load and associated demand charges assessed by the Utility Provider;
(b) Time of Use Shifting. Operation of the Facility to maximize delivery of Facility Energy during periods when the retail electricity $/kWh rates applicable to the Site Host are the highest; and
(c) Net Energy Metering. Operation of the Facility to maximize the cost savings derived from the Site Host’s participation in any net energy metering program available.
2. Minimum Guaranteed Cost Savings. Subject to any applicable Adjustments in accordance with Section 4 of this Schedule 4, in each Contract Year the total Cost Savings from the Bill Optimization Services provided in such Contract Year shall not be less than the following amounts (the “Minimum Guaranteed Cost Savings”):
Term Year: Estimated Annual Savings
1 2
3 4
5 6
7 8
Agenda Page 351
Schedule 4 - 2
9 10
11 12
13 14
15 16
17 18
19 20
3. Calculation of Cost Savings: For each Billing Period, Seller shall calculate the difference (the “Cost Savings”) between (a) the electrical energy costs and demand charges that would have been charged by the Utility Provider if the Facility had not been in operation during such Billing Period, and (b) the actual electrical energy costs (net of any net metering or other similar credits or benefits accruing to Site Host as a result of the operation of the Facility) and demand charges. Cost Savings shall be calculated by Seller using data from the Facility Meter, the Utility Provider retail meters with respect to the Site Load, and/or the tariffed rates applicable to the Site Load. Buyer shall, as reasonably requested by Seller, provide (or reasonably cooperate with Seller to enable Seller to obtain) electrical energy use and cost information, demand charges, net energy metering credits and all other information relevant to the calculation of Cost Savings and other amounts under this Agreement.
4. Adjustments. To the extent Seller’s ability or cost to provide the Bill Optimization Services is affected by any of the following (collectively, the “Adjustment Events”), during some or all of a Contract Year, the Minimum Guaranteed Cost Savings (each, an “Adjustment”) shall be subject to a reasonable reduction in accordance with this Section 4 to maintain the balance of the bargain of this Agreement:
(a) A Disruption Period;
(b) A Force Majeure Event;
Agenda Page 352
Schedule 4 - 3
(c) Any material adverse change in the applicable Utility Provider tariff or rate structure, including but not limited to changes in the hours, rates, and calculation methodologies employed by the Utility Provider with respect to the Site Load; (d) Any material deviation in the characteristics of the Site Load compared to the actual Site Load electricity use data for the period between [start date of historical load data] and [end date of historical load data], not resulting from the Facility operations or Seller’s acts or omissions, including as a result of any onsite generation at the Site other than the Facility; (e) Any breach by Buyer of Section 3.1, 3.2 or 3.3 of this Agreement; (f) Any breach by Seller’s landlord of section 7.1(a) (Ingress & Egress), 7.1(b) (Access to Sunlight) that does not constitute Compensated Lost Energy, or Section 12.4(b) of the lease agreement with Seller;
(g) The occurrence of any Compensated Lost Energy; or
(h) A Blackout Event and/or preparing for a Blackout Event pursuant to Section 2 of Schedule 3 of this Special Conditions (for example, by not leaving the Storage Facility with sufficient stored Energy to reduce the peak site load and thus the demand charges in the applicable month).
The Parties shall work together in good faith to determine the amount of the Adjustment.
Seller shall provide Notice to Buyer of any Adjustment Event, including (x) the facts and circumstances giving rise to such Adjustment Event, (y) a statement of the amount of the Adjustment which Seller proposes, and (z) a detailed explanation of, and rationale for, its calculation methodology, annotated work papers and source data. If Buyer disagrees in good faith with such Adjustment amount as calculated by Seller, Buyer may provide Notice to Seller of such disagreement within forty-five (45) days after its receipt of such Notice from Seller. If Buyer does not dispute the proposed amount of such Adjustment within forty-five (45) days after its receipt of such Notice from Seller, Buyer will be deemed to have accepted such Adjustment. If the Parties after good-faith effort are unable to agree on the Adjustment amount within ten (10) Business Days after Seller receives Notice of Buyer’s disagreement with Seller’s proposed Adjustment amount, the Parties shall promptly refer the dispute to an independent expert reasonably agreed to by the Parties. The independent expert, acting as arbitrator, shall finally determine the technical matter at issue in accordance with the provisions of this Agreement and shall issue its written final decision to both Parties within thirty (30) days after the date on which the matter is submitted to it. The final decision of such independent expert shall be binding with respect to the Adjustment. The costs of the determination, including fees and expenses of the independent expert, shall be borne by the Party the independent expert deems is in the wrong. Any Adjustment pursuant to this Section 4 shall apply only to the Contract Year(s) in which such Adjustment Event is applicable.
5. Bill Optimization Services Review. Seller shall review the Bill Optimization Services strategies, assumptions and practices at least annually, and at any time upon Buyer’s reasonable request, to determine if adjustments are appropriate to improve the amount of Cost Savings. Seller shall not make material modifications to its Bill Optimization Services without
Agenda Page 353
Schedule 4 - 4
Buyer’s prior approval, which approval shall not be unreasonably withheld, conditioned or delayed.
Agenda Page 354
Schedule 5 – 1
SCHEDULE 5
MATERIAL PERMITS
No. Permits
1 N/A
2 N/A
Agenda Page 355
Schedule 6 – 1
SCHEDULE 6
BUYER TERMINATION PAYMENT AMOUNT
The Termination Payment shall be calculated in accordance with the following:
Early
Termination
Occurs in
Year:
Termination Payment
if Storage Rate is
per kW-mo.
Termination Payment
if Storage Rate is
per kW-mo.
Termination Payment
if Storage Rate is
per kW-mo.
Termination Payment
if Storage Rate is
per kW-mo.
1* $1,985,066 $1,985,066 $1,985,066 $1,985,066
2 $1,893,566 $1,894,225 $1,895,545 $1,896,205
3 $1,715,023 $1,716,445 $1,719,290 $1,720,712
4 $1,533,974 $1,536,206 $1,540,669 $1,542,900
5 $1,350,258 $1,353,349 $1,359,530 $1,362,621
6 $1,163,705 $1,167,708 $1,175,714 $1,179,717
7 $1,118,071 $1,123,043 $1,132,986 $1,137,957
8 $1,069,229 $1,075,229 $1,087,228 $1,093,228
9 $1,016,975 $1,024,066 $1,038,249 $1,045,341
10 $961,093 $969,343 $985,844 $994,095
11 $901,354 $910,835 $929,797 $939,278
12 $837,314 $848,101 $869,676 $880,463
13 $807,338 $800,427 $810,686 $822,860
14 $782,669 $775,937 $762,472 $756,007
15 $755,582 $749,043 $735,965 $729,426
16 $726,031 $719,699 $707,036 $700,705
17 $693,505 $687,399 $675,187 $669,081
18 $657,915 $652,052 $640,327 $634,464
19 $619,008 $613,408 $602,208 $596,609
20 $576,634 $571,317 $560,683 $555,366
At the end of the Delivery Term, the Termination Payment amount shall be deemed to be zero (0). *Includes Early Termination prior to the Commercial Operation Date.
Agenda Page 356
Schedule 7 – 1
SCHEDULE 7
METERING DIAGRAM
Agenda Page 357
CPA 2023 POWER READY PROGRAM
RENEWABLE ENERGY + STORAGE PRO FORMA PPA SPECIAL CONDITIONS
RENEWABLE POWER PURCHASE AGREEMENT
SPECIAL CONDITIONS
This Special Conditions (“Special Conditions”) is entered into as of _________ (the “Effective Date”), between Buyer and Seller.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate one or more Facilities; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in the Agreement, the Product from each Facility; and WHEREAS, the Parties acknowledged that certain Renewable Power Purchase Agreement General Terms and Conditions dated as of ____________ (“General Conditions”), which are incorporated by reference as set forth herein;
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:
1. Incorporation of General Conditions. The General Conditions are incorporated herein as if set forth in their entirety. Any capitalized terms not otherwise defined herein shall have the meaning given to them in the General Conditions.
2. Schedules. The following Schedules comprise the remainder of the Special Conditions:
Schedule 1 Key Commercial Terms
Schedule 2 Description of the Site and Facility
Schedule 3 Emergency Energy Services
Schedule 4 Bill Optimization Services
Schedule 5 Material Permits
Schedule 6 Buyer Termination Payment Amount
Schedule 7 Metering Diagram
[Signatures on following page]
Agenda Page 358
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
Coast Energy DevCo, LLC, a Delaware LLC
By:
Name: Blair Herbert
Title: Authorized Person
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA, a California joint powers authority
By:
Name: Theodore Bardacke
Title: Chief Executive Officer
Agenda Page 359
Schedule 1 – 1
SCHEDULE 1
KEY COMMERCIAL TERMS
Milestones:
Milestone Expected Date for
Completion
Execution of Lease 5/6/2024
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec,
[x] EIR
Not Applicable
Interconnection Approval 6/20/2024
Executed Interconnection Agreement 8/6/2025
Financial Close 2/6/2024
Expected Construction Start Date 11/4/2024
Receipt of permission to operate in parallel with the
Distribution System from the Utility Provider 8/6/2025
Expected Commercial Operation Date 8/6/2025
Delivery Term Expected Energy:
Contract Year Expected Energy (MWh)
1 127.30
2 126.66
3 126.03
4 125.40
5 124.77
6 124.15
Agenda Page 360
Schedule 1 – 2
7 123.53
8 122.91
9 122.30
10 121.68
11 121.08
12 120.47
13 119.87
14 119.27
15 118.67
16 118.08
17 117.49
18 116.90
19 116.32
20 115.74
Guaranteed Capacity: 124.63 kW of total Facility capacity Guaranteed Storage Capacity: 58.5 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Demand Response Capacity: 25 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Guaranteed PV Capacity: 66.13 kW of Installed PV Capacity Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
1 2
3 Agenda Page 361
Schedule 1 – 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 Guaranteed Construction Start Date: 11/4/2024
Guaranteed Commercial Operation Date: 8/6/2025
Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 20 /MWh (flat)
with no escalation
Agenda Page 362
Schedule 1 – 4
The Storage Rate shall be:
Contract Year Storage Rate
1 – 20 /kW-mo. (flat)
with no escalation
Seller’s Assumed Tax Credits: As of the Effective Date, Seller intends to finance the Facility using the ITC at thirty percent (30%) and/or the PTC at $0.028/kWh.
Product
☒ PV Energy
☒ Discharging Energy
☒ Green Attributes (if Renewable Energy Credit, please check the applicable box below):
☒ Portfolio Content Category 1
☐ Portfolio Content Category 2
☐ Portfolio Content Category 3
☒ Installed Storage Capacity and Effective Storage Capacity ☒ Energy Services
☒ Capacity Attributes (if applicable)
Roof Repairs or Replacement: 12,000 sq.ft. roof repair for an estimated cost to Seller of $269,780.00.
Security Amounts:
Development Security: $90/kW of Guaranteed PV Capacity plus $105/kW of Guaranteed Storage Capacity
Performance Security: $90/kW of Installed PV Capacity plus $105/kW of Installed Storage Capacity
Bond Requirements:
Payment Bond: Buyer shall have the right, in its sole discretion, to provide Notice to Seller prior to the Commercial Operation Date requiring Seller to provide a payment Surety Bond in an amount not less than four million dollars ($4,000,000) to secure Seller’s payment obligation to its suppliers, contractors and subcontractors who provide materials or services in connection with achieving Commercial Operation. Buyer shall reimburse Seller’s actual documented costs to provide such Payment Bond within ten (10) Business Days after Seller provides an invoice to Buyer for such costs, together with supporting documentation reasonably acceptable to Buyer (including at least three quotes from Surety Bond issuers for such Payment Bond), such amount not to exceed five hundred ten thousand dollars ($510,000). Seller shall be solely responsible for any costs in connection with providing the Payment Bond in excess of such maximum reimbursable amount.
Agenda Page 363
Agenda Page 364
Exhibit S - 2
Site Diagram:
Agenda Page 365
Schedule 3 – 1
SCHEDULE 3
EMERGENCY ENERGY SERVICES
1. Seller shall at all times other than during a Blackout Event maintain a minimum stored energy level equal to 58.5 kWh (“Critical Energy Reserve”). In the event that Seller has advance notice of a potential or planned Blackout Event, Seller shall use commercially reasonable efforts to charge the Storage Facility to 100% SOC prior to the commencement of the Blackout Event.
2. Seller shall deliver Facility Energy to supply the Critical Load upon the occurrence of any Blackout Event (the “Emergency Energy Services”). If (a) the Blackout Event lasts longer than the time it take for Seller to deliver the Critical Energy Reserve and (b) the Storage Facility has additional stored Energy, Seller shall continue to deliver Discharging Energy until the earlier of (w) the SOC reaches zero percent (0%), (x) the Blackout Event ends, or (y) the Critical Load is zero (0) kWh.
“Critical Load” means the amount of Site Load on the Designated Circuit(s) (defined below). “Designated Circuit(s)” means the following circuits at the Site Host premises:
Panel Circuit(s) Description
Lighting (Internal Controls)
Lighting (Meeting Room,
Staff Room, Adult, Entry,
Corridoor)
Reception (Floorbox)
Miscellaneous (IT)
Reception (Rack)
Lighting (Control)
provided, prior to the Construction Start Date, Buyer shall have the right, by providing Notice to Seller, to modify the Designated Circuit(s); provided further, in no event shall the Critical Energy Reserve be modified.
“Blackout Event Performance Factor” shall be calculated as the sum of (a) the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the Stored Energy Level at the commencement of Blackout Event divided by (ii) the Critical Energy Reserve, plus (b) if the Storage Facility did not discharge one hundred percent (100%) of the Stored Energy Level at the Agenda Page 366
Schedule 3 - 2
commencement of Blackout Event and the Storage Facility failed to discharge during the entire duration of the Blackout Event (except to the extent such failure was the result of the Storage Facility protection equipment disconnecting the Storage Facility from the Critical Load due to the Critical Load exceeding PMax), the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the total amount of Discharging Energy delivered to the Delivery Point during the Blackout Event divided by (ii) the Stored Energy Level at the commencement of Blackout Event; provided, in no event will the Blackout Event Performance Factor exceed one (1). “PMax” means the maximum operating power level (expressed in kW) of the Storage Facility measured at the Delivery Point.
3. Seller shall provide to Buyer and Site Host a web-based customer portal with read-only access to a forecast, updated no less frequently than once per day, of an hourly forecast of the Facility Energy and Storage Capacity availability for the following day.
4. Seller shall use commercially reasonable efforts to implement Site Host’s input into the manner in which Seller provides the Emergency Energy Services.
Agenda Page 367
Schedule 4 – 1
SCHEDULE 4
BILL OPTIMIZATION SERVICES
1. Seller shall give first priority to operating the Facility to maintain at all times the ability to provide the Emergency Energy Services, and Seller shall give second priority to operating the Facility to maximize the amount of cost savings associated with the Site Host’s monthly bill from the Utility Provider (including the portion(s) of such bills attributable to charges related to Buyer’s services, products and programs) (the “Bill Optimization Services”). Bill Optimization Services shall consist of the following:
(a) Demand Charge Reduction. Delivery of Facility Energy during predicted Site Load peaks to reduce the Site Load and associated demand charges assessed by the Utility Provider;
(b) Time of Use Shifting. Operation of the Facility to maximize delivery of Facility Energy during periods when the retail electricity $/kWh rates applicable to the Site Host are the highest; and
(c) Net Energy Metering. Operation of the Facility to maximize the cost savings derived from the Site Host’s participation in any net energy metering program available.
2. Minimum Guaranteed Cost Savings. Subject to any applicable Adjustments in accordance with Section 4 of this Schedule 4, in each Contract Year the total Cost Savings from the Bill Optimization Services provided in such Contract Year shall not be less than the following amounts (the “Minimum Guaranteed Cost Savings”):
Term Year: Estimated Annual Savings
1 2
3 4
5 6
7 8
Agenda Page 368
Schedule 4 - 2
9 10
11 12
13 14
15 16
17 18
19 20
3. Calculation of Cost Savings: For each Billing Period, Seller shall calculate the difference (the “Cost Savings”) between (a) the electrical energy costs and demand charges that would have been charged by the Utility Provider if the Facility had not been in operation during such Billing Period, and (b) the actual electrical energy costs (net of any net metering or other similar credits or benefits accruing to Site Host as a result of the operation of the Facility) and demand charges. Cost Savings shall be calculated by Seller using data from the Facility Meter, the Utility Provider retail meters with respect to the Site Load, and/or the tariffed rates applicable to the Site Load. Buyer shall, as reasonably requested by Seller, provide (or reasonably cooperate with Seller to enable Seller to obtain) electrical energy use and cost information, demand charges, net energy metering credits and all other information relevant to the calculation of Cost Savings and other amounts under this Agreement.
4. Adjustments. To the extent Seller’s ability or cost to provide the Bill Optimization Services is affected by any of the following (collectively, the “Adjustment Events”), during some or all of a Contract Year, the Minimum Guaranteed Cost Savings (each, an “Adjustment”) shall be subject to a reasonable reduction in accordance with this Section 4 to maintain the balance of the bargain of this Agreement:
(a) A Disruption Period;
(b) A Force Majeure Event;
Agenda Page 369
Schedule 4 - 3
(c) Any material adverse change in the applicable Utility Provider tariff or rate structure, including but not limited to changes in the hours, rates, and calculation methodologies employed by the Utility Provider with respect to the Site Load; (d) Any material deviation in the characteristics of the Site Load compared to the actual Site Load electricity use data for the period between [start date of historical load data] and [end date of historical load data], not resulting from the Facility operations or Seller’s acts or omissions, including as a result of any onsite generation at the Site other than the Facility; (e) Any breach by Buyer of Section 3.1, 3.2 or 3.3 of this Agreement; (f) Any breach by Seller’s landlord of section 7.1(a) (Ingress & Egress), 7.1(b) (Access to Sunlight) that does not constitute Compensated Lost Energy, or Section 12.4(b) of the lease agreement with Seller;
(g) The occurrence of any Compensated Lost Energy; or
(h) A Blackout Event and/or preparing for a Blackout Event pursuant to Section 2 of Schedule 3 of this Special Conditions (for example, by not leaving the Storage Facility with sufficient stored Energy to reduce the peak site load and thus the demand charges in the applicable month).
The Parties shall work together in good faith to determine the amount of the Adjustment.
Seller shall provide Notice to Buyer of any Adjustment Event, including (x) the facts and circumstances giving rise to such Adjustment Event, (y) a statement of the amount of the Adjustment which Seller proposes, and (z) a detailed explanation of, and rationale for, its calculation methodology, annotated work papers and source data. If Buyer disagrees in good faith with such Adjustment amount as calculated by Seller, Buyer may provide Notice to Seller of such disagreement within forty-five (45) days after its receipt of such Notice from Seller. If Buyer does not dispute the proposed amount of such Adjustment within forty-five (45) days after its receipt of such Notice from Seller, Buyer will be deemed to have accepted such Adjustment. If the Parties after good-faith effort are unable to agree on the Adjustment amount within ten (10) Business Days after Seller receives Notice of Buyer’s disagreement with Seller’s proposed Adjustment amount, the Parties shall promptly refer the dispute to an independent expert reasonably agreed to by the Parties. The independent expert, acting as arbitrator, shall finally determine the technical matter at issue in accordance with the provisions of this Agreement and shall issue its written final decision to both Parties within thirty (30) days after the date on which the matter is submitted to it. The final decision of such independent expert shall be binding with respect to the Adjustment. The costs of the determination, including fees and expenses of the independent expert, shall be borne by the Party the independent expert deems is in the wrong. Any Adjustment pursuant to this Section 4 shall apply only to the Contract Year(s) in which such Adjustment Event is applicable.
5. Bill Optimization Services Review. Seller shall review the Bill Optimization Services strategies, assumptions and practices at least annually, and at any time upon Buyer’s reasonable request, to determine if adjustments are appropriate to improve the amount of Cost Savings. Seller shall not make material modifications to its Bill Optimization Services without
Agenda Page 370
Schedule 4 - 4
Buyer’s prior approval, which approval shall not be unreasonably withheld, conditioned or delayed.
Agenda Page 371
Schedule 5 – 1
SCHEDULE 5
MATERIAL PERMITS
No. Permits
1 N/A
2 N/A
Agenda Page 372
Schedule 6 – 1
SCHEDULE 6
BUYER TERMINATION PAYMENT AMOUNT
The Termination Payment shall be calculated in accordance with the following:
Early
Termination
Occurs in
Year:
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
1* $1,507,312 $1,507,312 $1,507,312 $1,507,312
2 $1,440,084 $1,440,414 $1,441,074 $1,441,404
3 $1,311,379 $1,312,090 $1,313,513 $1,314,224
4 $1,180,845 $1,181,960 $1,184,192 $1,185,308
5 $1,048,361 $1,049,907 $1,052,997 $1,054,543
6 $913,803 $915,805 $919,808 $921,810
7 $882,816 $885,302 $890,273 $892,759
8 $849,478 $852,478 $858,477 $861,477
9 $813,638 $817,184 $824,275 $827,821
10 $775,136 $779,261 $787,512 $791,637
11 $733,802 $738,542 $748,023 $752,764
12 $689,225 $694,619 $705,406 $710,800
13 $647,407 $653,494 $665,668 $671,756
14 $596,544 $603,368 $617,015 $623,838
15 $556,236 $552,967 $564,871 $572,476
16 $536,293 $533,128 $526,796 $523,630
17 $514,132 $511,079 $504,973 $501,920
18 $489,682 $486,750 $480,888 $477,956
19 $462,751 $459,951 $456,062 $455,762
20 $455,449 $453,973 $456,062 $455,762
At the end of the Delivery Term, the Termination Payment amount shall be deemed to be zero (0). *Includes Early Termination prior to the Commercial Operation Date.
Agenda Page 373
Agenda Page 374
CPA 2023 POWER READY PROGRAM
RENEWABLE ENERGY + STORAGE PRO FORMA PPA SPECIAL CONDITIONS
RENEWABLE POWER PURCHASE AGREEMENT
SPECIAL CONDITIONS
This Special Conditions (“Special Conditions”) is entered into as of _________ (the “Effective Date”), between Buyer and Seller.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate one or more Facilities; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in the Agreement, the Product from each Facility; and WHEREAS, the Parties acknowledged that certain Renewable Power Purchase Agreement General Terms and Conditions dated as of ____________ (“General Conditions”), which are incorporated by reference as set forth herein;
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:
1. Incorporation of General Conditions. The General Conditions are incorporated herein as if set forth in their entirety. Any capitalized terms not otherwise defined herein shall have the meaning given to them in the General Conditions.
2. Schedules. The following Schedules comprise the remainder of the Special Conditions:
Schedule 1 Key Commercial Terms
Schedule 2 Description of the Site and Facility
Schedule 3 Emergency Energy Services
Schedule 4 Bill Optimization Services
Schedule 5 Material Permits
Schedule 6 Buyer Termination Payment Amount
Schedule 7 Metering Diagram
[Signatures on following page]
Agenda Page 375
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
Coast Energy DevCo, LLC, a Delaware LLC
By:
Name: Blair Herbert
Title: Authorized Signer
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA, a California joint powers authority
By:
Name: Theodore Bardacke
Title: Chief Executive Officer
Agenda Page 376
Schedule 1 – 1
SCHEDULE 1
KEY COMMERCIAL TERMS
Milestones:
Milestone Expected Date for
Completion
Execution of Lease 5/6/2024
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec,
[x] EIR
Not Applicable
Interconnection Approval 6/20/2024
Executed Interconnection Agreement 8/6/2025
Financial Close 2/6/2024
Expected Construction Start Date 11/4/2024
Receipt of permission to operate in parallel with the
Distribution System from the Utility Provider 8/6/2025
Expected Commercial Operation Date 8/6/2025
Delivery Term Expected Energy:
Contract Year Expected Energy (MWh)
1 53.24
2 52.97
3 52.71
4 52.45
5 52.18
6 51.92
Agenda Page 377
Schedule 1 – 2
7 51.66
8 51.40
9 51.15
10 50.89
11 50.64
12 50.38
13 50.13
14 49.88
15 49.63
16 49.38
17 49.14
18 48.89
19 48.65
20 48.40
Guaranteed Capacity: 87.6 kW of total Facility capacity Guaranteed Storage Capacity: 58.5 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Demand Response Capacity: 25 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Guaranteed PV Capacity: 29.1 kW of Installed PV Capacity Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
1 2
3 Agenda Page 378
Schedule 1 – 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 Guaranteed Construction Start Date: 11/4/2024
Guaranteed Commercial Operation Date: 8/6/2025
Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 20 /MWh (flat)
with no escalation
Agenda Page 379
Schedule 1 – 4
The Storage Rate shall be:
Contract Year Storage Rate
1 – 20 /kW-mo. (flat)
with no escalation
Seller’s Assumed Tax Credits: As of the Effective Date, Seller intends to finance the Facility using the ITC at thirty percent (30%) and/or the PTC at $0.028/kWh.
Product
☒ PV Energy
☒ Discharging Energy
☒ Green Attributes (if Renewable Energy Credit, please check the applicable box below):
☒ Portfolio Content Category 1
☐ Portfolio Content Category 2
☐ Portfolio Content Category 3
☒ Installed Storage Capacity and Effective Storage Capacity ☒ Energy Services
☒ Capacity Attributes (if applicable)
Roof Repairs or Replacement: 10,000 sq.ft. roof repair for an estimated cost to Seller of $156,960.00.
Security Amounts:
Development Security: $90/kW of Guaranteed PV Capacity plus $105/kW of Guaranteed Storage Capacity
Performance Security: $90/kW of Installed PV Capacity plus $105/kW of Installed Storage Capacity
Bond Requirements:
Payment Bond: Buyer shall have the right, in its sole discretion, to provide Notice to Seller prior to the Commercial Operation Date requiring Seller to provide a payment Surety Bond in an amount not less than four million dollars ($4,000,000) to secure Seller’s payment obligation to its suppliers, contractors and subcontractors who provide materials or services in connection with achieving Commercial Operation. Buyer shall reimburse Seller’s actual documented costs to provide such Payment Bond within ten (10) Business Days after Seller provides an invoice to Buyer for such costs, together with supporting documentation reasonably acceptable to Buyer (including at least three quotes from Surety Bond issuers for such Payment Bond), such amount not to exceed five hundred ten thousand dollars ($510,000). Seller shall be solely responsible for any costs in connection with providing the Payment Bond in excess of such maximum reimbursable amount.
Agenda Page 380
Agenda Page 381
Exhibit S - 2
Site Diagram:
Agenda Page 382
Schedule 3 – 1
SCHEDULE 3
EMERGENCY ENERGY SERVICES
1. Seller shall at all times other than during a Blackout Event maintain a minimum stored energy level equal to 58.5 kWh (“Critical Energy Reserve”). In the event that Seller has advance notice of a potential or planned Blackout Event, Seller shall use commercially reasonable efforts to charge the Storage Facility to 100% SOC prior to the commencement of the Blackout Event.
2. Seller shall deliver Facility Energy to supply the Critical Load upon the occurrence of any Blackout Event (the “Emergency Energy Services”). If (a) the Blackout Event lasts longer than the time it take for Seller to deliver the Critical Energy Reserve and (b) the Storage Facility has additional stored Energy, Seller shall continue to deliver Discharging Energy until the earlier of (w) the SOC reaches zero percent (0%), (x) the Blackout Event ends, or (y) the Critical Load is zero (0) kWh.
“Critical Load” means the amount of Site Load on the Designated Circuit(s) (defined below). “Designated Circuit(s)” means the following circuits at the Site Host premises:
Panel Circuit(s) Description
Lighting
Miscellaneous (Refrigerator,
Freezer)
Lighting
Reception
Reception
Lighting
Reception (Barbara’s Office)
provided, prior to the Construction Start Date, Buyer shall have the right, by providing Notice to Seller, to modify the Designated Circuit(s); provided further, in no event shall the Critical Energy Reserve be modified.
“Blackout Event Performance Factor” shall be calculated as the sum of (a) the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the Stored Energy Level at the commencement of Blackout Event divided by (ii) the Critical Energy Reserve, plus (b) if the Storage Facility did not discharge one hundred percent (100%) of the Stored Energy Level at the Agenda Page 383
Schedule 3 - 2
commencement of Blackout Event and the Storage Facility failed to discharge during the entire duration of the Blackout Event (except to the extent such failure was the result of the Storage Facility protection equipment disconnecting the Storage Facility from the Critical Load due to the Critical Load exceeding PMax), the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the total amount of Discharging Energy delivered to the Delivery Point during the Blackout Event divided by (ii) the Stored Energy Level at the commencement of Blackout Event; provided, in no event will the Blackout Event Performance Factor exceed one (1). “PMax” means the maximum operating power level (expressed in kW) of the Storage Facility measured at the Delivery Point.
3. Seller shall provide to Buyer and Site Host a web-based customer portal with read-only access to a forecast, updated no less frequently than once per day, of an hourly forecast of the Facility Energy and Storage Capacity availability for the following day.
4. Seller shall use commercially reasonable efforts to implement Site Host’s input into the manner in which Seller provides the Emergency Energy Services.
Agenda Page 384
Schedule 4 – 1
SCHEDULE 4
BILL OPTIMIZATION SERVICES
1. Seller shall give first priority to operating the Facility to maintain at all times the ability to provide the Emergency Energy Services, and Seller shall give second priority to operating the Facility to maximize the amount of cost savings associated with the Site Host’s monthly bill from the Utility Provider (including the portion(s) of such bills attributable to charges related to Buyer’s services, products and programs) (the “Bill Optimization Services”). Bill Optimization Services shall consist of the following:
(a) Demand Charge Reduction. Delivery of Facility Energy during predicted Site Load peaks to reduce the Site Load and associated demand charges assessed by the Utility Provider;
(b) Time of Use Shifting. Operation of the Facility to maximize delivery of Facility Energy during periods when the retail electricity $/kWh rates applicable to the Site Host are the highest; and
(c) Net Energy Metering. Operation of the Facility to maximize the cost savings derived from the Site Host’s participation in any net energy metering program available.
2. Minimum Guaranteed Cost Savings. Subject to any applicable Adjustments in accordance with Section 4 of this Schedule 4, in each Contract Year the total Cost Savings from the Bill Optimization Services provided in such Contract Year shall not be less than the following amounts (the “Minimum Guaranteed Cost Savings”):
Term Year: Estimated Annual Savings
1 2
3 4
5 6
7 8
Agenda Page 385
Schedule 4 - 2
9 10
11 12
13 14
15 16
17 18
19 20
3. Calculation of Cost Savings: For each Billing Period, Seller shall calculate the difference (the “Cost Savings”) between (a) the electrical energy costs and demand charges that would have been charged by the Utility Provider if the Facility had not been in operation during such Billing Period, and (b) the actual electrical energy costs (net of any net metering or other similar credits or benefits accruing to Site Host as a result of the operation of the Facility) and demand charges. Cost Savings shall be calculated by Seller using data from the Facility Meter, the Utility Provider retail meters with respect to the Site Load, and/or the tariffed rates applicable to the Site Load. Buyer shall, as reasonably requested by Seller, provide (or reasonably cooperate with Seller to enable Seller to obtain) electrical energy use and cost information, demand charges, net energy metering credits and all other information relevant to the calculation of Cost Savings and other amounts under this Agreement.
4. Adjustments. To the extent Seller’s ability or cost to provide the Bill Optimization Services is affected by any of the following (collectively, the “Adjustment Events”), during some or all of a Contract Year, the Minimum Guaranteed Cost Savings (each, an “Adjustment”) shall be subject to a reasonable reduction in accordance with this Section 4 to maintain the balance of the bargain of this Agreement:
(a) A Disruption Period;
(b) A Force Majeure Event;
Agenda Page 386
Schedule 4 - 3
(c) Any material adverse change in the applicable Utility Provider tariff or rate structure, including but not limited to changes in the hours, rates, and calculation methodologies employed by the Utility Provider with respect to the Site Load; (d) Any material deviation in the characteristics of the Site Load compared to the actual Site Load electricity use data for the period between [start date of historical load data] and [end date of historical load data], not resulting from the Facility operations or Seller’s acts or omissions, including as a result of any onsite generation at the Site other than the Facility; (e) Any breach by Buyer of Section 3.1, 3.2 or 3.3 of this Agreement; (f) Any breach by Seller’s landlord of section 7.1(a) (Ingress & Egress), 7.1(b) (Access to Sunlight) that does not constitute Compensated Lost Energy, or Section 12.4(b) of the lease agreement with Seller;
(g) The occurrence of any Compensated Lost Energy; or
(h) A Blackout Event and/or preparing for a Blackout Event pursuant to Section 2 of Schedule 3 of this Special Conditions (for example, by not leaving the Storage Facility with sufficient stored Energy to reduce the peak site load and thus the demand charges in the applicable month).
The Parties shall work together in good faith to determine the amount of the Adjustment.
Seller shall provide Notice to Buyer of any Adjustment Event, including (x) the facts and circumstances giving rise to such Adjustment Event, (y) a statement of the amount of the Adjustment which Seller proposes, and (z) a detailed explanation of, and rationale for, its calculation methodology, annotated work papers and source data. If Buyer disagrees in good faith with such Adjustment amount as calculated by Seller, Buyer may provide Notice to Seller of such disagreement within forty-five (45) days after its receipt of such Notice from Seller. If Buyer does not dispute the proposed amount of such Adjustment within forty-five (45) days after its receipt of such Notice from Seller, Buyer will be deemed to have accepted such Adjustment. If the Parties after good-faith effort are unable to agree on the Adjustment amount within ten (10) Business Days after Seller receives Notice of Buyer’s disagreement with Seller’s proposed Adjustment amount, the Parties shall promptly refer the dispute to an independent expert reasonably agreed to by the Parties. The independent expert, acting as arbitrator, shall finally determine the technical matter at issue in accordance with the provisions of this Agreement and shall issue its written final decision to both Parties within thirty (30) days after the date on which the matter is submitted to it. The final decision of such independent expert shall be binding with respect to the Adjustment. The costs of the determination, including fees and expenses of the independent expert, shall be borne by the Party the independent expert deems is in the wrong. Any Adjustment pursuant to this Section 4 shall apply only to the Contract Year(s) in which such Adjustment Event is applicable.
5. Bill Optimization Services Review. Seller shall review the Bill Optimization Services strategies, assumptions and practices at least annually, and at any time upon Buyer’s reasonable request, to determine if adjustments are appropriate to improve the amount of Cost Savings. Seller shall not make material modifications to its Bill Optimization Services without
Agenda Page 387
Schedule 4 - 4
Buyer’s prior approval, which approval shall not be unreasonably withheld, conditioned or delayed.
Agenda Page 388
Schedule 5 – 1
SCHEDULE 5
MATERIAL PERMITS
No. Permits
1 N/A
2 N/A
Agenda Page 389
Schedule 6 – 1
SCHEDULE 6
BUYER TERMINATION PAYMENT AMOUNT
The Termination Payment shall be calculated in accordance with the following:
Early
Terminatio
n Occurs in
Year:
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
1* $1,291,657 $1,291,657 $1,291,657 $1,291,657
2 $1,232,082 $1,232,412 $1,233,072 $1,233,402
3 $1,130,514 $1,131,226 $1,132,648 $1,133,359
4 $1,027,703 $1,028,819 $1,031,051 $1,032,166
5 $923,570 $925,115 $928,206 $929,751
6 $818,029 $820,031 $824,034 $826,035
7 $795,203 $797,689 $802,661 $805,146
8 $770,787 $773,787 $779,786 $782,786
9 $744,679 $748,225 $755,316 $758,862
10 $716,773 $720,898 $729,149 $733,274
11 $686,955 $691,696 $701,177 $705,917
12 $655,005 $660,398 $671,186 $676,580
13 $623,518 $629,606 $641,780 $647,867
14 $587,257 $594,080 $607,727 $614,551
15 $548,555 $556,161 $571,371 $578,976
16 $515,008 $515,696 $532,566 $541,001
17 $515,008 $513,825 $513,723 $515,008
18 $515,008 $513,825 $513,723 $515,008
19 $515,008 $513,825 $513,723 $515,008
20 $515,008 $513,825 $513,723 $515,008
At the end of the Delivery Term, the Termination Payment amount shall be deemed to be zero (0). *Includes Early Termination prior to the Commercial Operation Date.
Agenda Page 390
Agenda Page 391
CPA 2023 POWER READY PROGRAM
RENEWABLE ENERGY + STORAGE PRO FORMA PPA SPECIAL CONDITIONS
RENEWABLE POWER PURCHASE AGREEMENT
SPECIAL CONDITIONS
This Special Conditions (“Special Conditions”) is entered into as of _________ (the “Effective Date”), between Buyer and Seller.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate one or more Facilities; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in the Agreement, the Product from each Facility; and WHEREAS, the Parties acknowledged that certain Renewable Power Purchase Agreement General Terms and Conditions dated as of ____________ (“General Conditions”), which are incorporated by reference as set forth herein;
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:
1. Incorporation of General Conditions. The General Conditions are incorporated herein as if set forth in their entirety. Any capitalized terms not otherwise defined herein shall have the meaning given to them in the General Conditions.
2. Schedules. The following Schedules comprise the remainder of the Special Conditions:
Schedule 1 Key Commercial Terms
Schedule 2 Description of the Site and Facility
Schedule 3 Emergency Energy Services
Schedule 4 Bill Optimization Services
Schedule 5 Material Permits
Schedule 6 Buyer Termination Payment Amount
Schedule 7 Metering Diagram
[Signatures on following page]
Agenda Page 392
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
Coast Energy DevCo, LLC, a Delaware LLC
By:
Name: Blair Herbert
Title: Authorized Signer
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA, a California joint powers authority
By:
Name: Theodore Bardacke
Title: Chief Executive Officer
Agenda Page 393
Schedule 1 – 1
SCHEDULE 1
KEY COMMERCIAL TERMS
Milestones:
Milestone Expected Date for
Completion
Execution of Lease 5/6/2024
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec,
[x] EIR
Not Applicable
Interconnection Approval 6/20/2024
Executed Interconnection Agreement 8/6/2025
Financial Close 2/6/2024
Expected Construction Start Date 11/4/2024
Receipt of permission to operate in parallel with the
Distribution System from the Utility Provider 8/6/2025
Expected Commercial Operation Date 8/6/2025
Delivery Term Expected Energy:
Contract Year Expected Energy (MWh)
1 311.70
2 310.14
3 308.59
4 307.05
5 305.51
6 303.99
Agenda Page 394
Schedule 1 – 2
7 302.47
8 300.95
9 299.45
10 297.95
11 296.46
12 294.98
13 293.50
14 292.04
15 290.58
16 289.12
17 287.68
18 286.24
19 284.81
20 283.38
Guaranteed Capacity: 336.86 kW of total Facility capacity Guaranteed Storage Capacity: 175.5 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Demand Response Capacity: 75 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Guaranteed PV Capacity: 161.36 kW of Installed PV Capacity Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
1 2
3 Agenda Page 395
Schedule 1 – 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 Guaranteed Construction Start Date: 11/4/2024
Guaranteed Commercial Operation Date: 8/6/2025
Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 20 /MWh (flat)
with no escalation
Agenda Page 396
Schedule 1 – 4
The Storage Rate shall be:
Contract Year Storage Rate
1 – 20 /kW-mo. (flat)
with no escalation
Seller’s Assumed Tax Credits: As of the Effective Date, Seller intends to finance the Facility using the ITC at thirty percent (30%) and/or the PTC at $0.028/kWh.
Product
☒ PV Energy
☒ Discharging Energy
☒ Green Attributes (if Renewable Energy Credit, please check the applicable box below):
☒ Portfolio Content Category 1
☐ Portfolio Content Category 2
☐ Portfolio Content Category 3
☒ Installed Storage Capacity and Effective Storage Capacity ☒ Energy Services
☒ Capacity Attributes (if applicable)
Roof Repairs or Replacement: Not Applicable
Security Amounts:
Development Security: $90/kW of Guaranteed PV Capacity plus $105/kW of Guaranteed Storage Capacity
Performance Security: $90/kW of Installed PV Capacity plus $105/kW of Installed Storage Capacity
Bond Requirements:
Payment Bond: Buyer shall have the right, in its sole discretion, to provide Notice to Seller prior to the Commercial Operation Date requiring Seller to provide a payment Surety Bond in an amount not less than four million dollars ($4,000,000) to secure Seller’s payment obligation to its suppliers, contractors and subcontractors who provide materials or services in connection with achieving Commercial Operation. Buyer shall reimburse Seller’s actual documented costs to provide such Payment Bond within ten (10) Business Days after Seller provides an invoice to Buyer for such costs, together with supporting documentation reasonably acceptable to Buyer (including at least three quotes from Surety Bond issuers for such Payment Bond), such amount not to exceed five hundred ten thousand dollars ($510,000). Seller shall be solely responsible for any costs in connection with providing the Payment Bond in excess of such maximum reimbursable amount.
Agenda Page 397
Agenda Page 398
Exhibit S - 2
Site Diagram:
Agenda Page 399
Agenda Page 400
Schedule 3 - 2
provided, prior to the Construction Start Date, Buyer shall have the right, by providing Notice to Seller, to modify the Designated Circuit(s); provided further, in no event shall the Critical Energy Reserve be modified.
“Blackout Event Performance Factor” shall be calculated as the sum of (a) the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the Stored Energy Level at the commencement of Blackout Event divided by (ii) the Critical Energy Reserve, plus (b) if the Storage Facility did not discharge one hundred percent (100%) of the Stored Energy Level at the commencement of Blackout Event and the Storage Facility failed to discharge during the entire duration of the Blackout Event (except to the extent such failure was the result of the Storage Facility protection equipment disconnecting the Storage Facility from the Critical Load due to the Critical Load exceeding PMax), the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the total amount of Discharging Energy delivered to the Delivery Point during the Blackout Event divided by (ii) the Stored Energy Level at the commencement of Blackout Event; provided, in no event will the Blackout Event Performance Factor exceed one (1). “PMax” means the maximum operating power level (expressed in kW) of the Storage Facility measured at the Delivery Point.
3. Seller shall provide to Buyer and Site Host a web-based customer portal with read-only access to a forecast, updated no less frequently than once per day, of an hourly forecast of the Facility Energy and Storage Capacity availability for the following day.
4. Seller shall use commercially reasonable efforts to implement Site Host’s input into the manner in which Seller provides the Emergency Energy Services.
Agenda Page 401
Schedule 4 – 1
SCHEDULE 4
BILL OPTIMIZATION SERVICES
1. Seller shall give first priority to operating the Facility to maintain at all times the ability to provide the Emergency Energy Services, and Seller shall give second priority to operating the Facility to maximize the amount of cost savings associated with the Site Host’s monthly bill from the Utility Provider (including the portion(s) of such bills attributable to charges related to Buyer’s services, products and programs) (the “Bill Optimization Services”). Bill Optimization Services shall consist of the following:
(a) Demand Charge Reduction. Delivery of Facility Energy during predicted Site Load peaks to reduce the Site Load and associated demand charges assessed by the Utility Provider;
(b) Time of Use Shifting. Operation of the Facility to maximize delivery of Facility Energy during periods when the retail electricity $/kWh rates applicable to the Site Host are the highest; and
(c) Net Energy Metering. Operation of the Facility to maximize the cost savings derived from the Site Host’s participation in any net energy metering program available.
2. Minimum Guaranteed Cost Savings. Subject to any applicable Adjustments in accordance with Section 4 of this Schedule 4, in each Contract Year the total Cost Savings from the Bill Optimization Services provided in such Contract Year shall not be less than the following amounts (the “Minimum Guaranteed Cost Savings”):
Term Year: Estimated Annual Savings
1 2
3 4
5 6
7 8
Agenda Page 402
Schedule 4 - 2
9 10
11 12
13 14
15 16
17 18
19 20
3. Calculation of Cost Savings: For each Billing Period, Seller shall calculate the difference (the “Cost Savings”) between (a) the electrical energy costs and demand charges that would have been charged by the Utility Provider if the Facility had not been in operation during such Billing Period, and (b) the actual electrical energy costs (net of any net metering or other similar credits or benefits accruing to Site Host as a result of the operation of the Facility) and demand charges. Cost Savings shall be calculated by Seller using data from the Facility Meter, the Utility Provider retail meters with respect to the Site Load, and/or the tariffed rates applicable to the Site Load. Buyer shall, as reasonably requested by Seller, provide (or reasonably cooperate with Seller to enable Seller to obtain) electrical energy use and cost information, demand charges, net energy metering credits and all other information relevant to the calculation of Cost Savings and other amounts under this Agreement.
4. Adjustments. To the extent Seller’s ability or cost to provide the Bill Optimization Services is affected by any of the following (collectively, the “Adjustment Events”), during some or all of a Contract Year, the Minimum Guaranteed Cost Savings (each, an “Adjustment”) shall be subject to a reasonable reduction in accordance with this Section 4 to maintain the balance of the bargain of this Agreement:
(a) A Disruption Period;
(b) A Force Majeure Event;
Agenda Page 403
Schedule 4 - 3
(c) Any material adverse change in the applicable Utility Provider tariff or rate structure, including but not limited to changes in the hours, rates, and calculation methodologies employed by the Utility Provider with respect to the Site Load; (d) Any material deviation in the characteristics of the Site Load compared to the actual Site Load electricity use data for the period between [start date of historical load data] and [end date of historical load data], not resulting from the Facility operations or Seller’s acts or omissions, including as a result of any onsite generation at the Site other than the Facility; (e) Any breach by Buyer of Section 3.1, 3.2 or 3.3 of this Agreement; (f) Any breach by Seller’s landlord of section 7.1(a) (Ingress & Egress), 7.1(b) (Access to Sunlight) that does not constitute Compensated Lost Energy, or Section 12.4(b) of the lease agreement with Seller;
(g) The occurrence of any Compensated Lost Energy; or
(h) A Blackout Event and/or preparing for a Blackout Event pursuant to Section 2 of Schedule 3 of this Special Conditions (for example, by not leaving the Storage Facility with sufficient stored Energy to reduce the peak site load and thus the demand charges in the applicable month).
The Parties shall work together in good faith to determine the amount of the Adjustment.
Seller shall provide Notice to Buyer of any Adjustment Event, including (x) the facts and circumstances giving rise to such Adjustment Event, (y) a statement of the amount of the Adjustment which Seller proposes, and (z) a detailed explanation of, and rationale for, its calculation methodology, annotated work papers and source data. If Buyer disagrees in good faith with such Adjustment amount as calculated by Seller, Buyer may provide Notice to Seller of such disagreement within forty-five (45) days after its receipt of such Notice from Seller. If Buyer does not dispute the proposed amount of such Adjustment within forty-five (45) days after its receipt of such Notice from Seller, Buyer will be deemed to have accepted such Adjustment. If the Parties after good-faith effort are unable to agree on the Adjustment amount within ten (10) Business Days after Seller receives Notice of Buyer’s disagreement with Seller’s proposed Adjustment amount, the Parties shall promptly refer the dispute to an independent expert reasonably agreed to by the Parties. The independent expert, acting as arbitrator, shall finally determine the technical matter at issue in accordance with the provisions of this Agreement and shall issue its written final decision to both Parties within thirty (30) days after the date on which the matter is submitted to it. The final decision of such independent expert shall be binding with respect to the Adjustment. The costs of the determination, including fees and expenses of the independent expert, shall be borne by the Party the independent expert deems is in the wrong. Any Adjustment pursuant to this Section 4 shall apply only to the Contract Year(s) in which such Adjustment Event is applicable.
5. Bill Optimization Services Review. Seller shall review the Bill Optimization Services strategies, assumptions and practices at least annually, and at any time upon Buyer’s reasonable request, to determine if adjustments are appropriate to improve the amount of Cost Savings. Seller shall not make material modifications to its Bill Optimization Services without
Agenda Page 404
Schedule 4 - 4
Buyer’s prior approval, which approval shall not be unreasonably withheld, conditioned or delayed.
Agenda Page 405
Schedule 5 – 1
SCHEDULE 5
MATERIAL PERMITS
No. Permits
1 N/A
2 N/A
Agenda Page 406
Schedule 6 – 1
SCHEDULE 6
BUYER TERMINATION PAYMENT AMOUNT
The Termination Payment shall be calculated in accordance with the following:
Early
Termination
Occurs in
Year:
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
1* $2,047,308 $2,047,308 $2,047,308 $2,047,308
2 $1,917,165 $1,918,155 $1,920,134 $1,921,124
3 $1,842,169 $1,830,005 $1,805,678 $1,793,515
4 $1,829,884 $1,817,842 $1,793,760 $1,781,719
5 $1,815,183 $1,803,276 $1,779,463 $1,767,556
6 $1,798,244 $1,786,483 $1,762,960 $1,751,199
7 $1,778,874 $1,767,270 $1,744,061 $1,732,457
8 $1,757,234 $1,745,796 $1,722,922 $1,711,484
9 $1,732,385 $1,721,130 $1,698,621 $1,687,367
10 $1,704,426 $1,693,369 $1,671,255 $1,660,198
11 $1,673,093 $1,662,249 $1,640,562 $1,629,718
12 $1,637,881 $1,627,265 $1,606,034 $1,595,419
13 $1,613,131 $1,602,764 $1,582,030 $1,571,663
14 $1,570,398 $1,560,299 $1,540,102 $1,530,004
15 $1,523,031 $1,513,223 $1,493,606 $1,483,798
16 $1,470,954 $1,461,457 $1,442,463 $1,432,965
17 $1,413,153 $1,403,994 $1,385,675 $1,376,516
18 $1,349,461 $1,340,667 $1,323,079 $1,314,285
19 $1,279,392 $1,270,992 $1,254,193 $1,245,793
20 $1,202,669 $1,194,693 $1,178,742 $1,170,767
At the end of the Delivery Term, the Termination Payment amount shall be deemed to be zero (0). *Includes Early Termination prior to the Commercial Operation Date.
Agenda Page 407
Agenda Page 408
CPA 2023 POWER READY PROGRAM
RENEWABLE ENERGY + STORAGE PRO FORMA PPA SPECIAL CONDITIONS
RENEWABLE POWER PURCHASE AGREEMENT
SPECIAL CONDITIONS
This Special Conditions (“Special Conditions”) is entered into as of _________ (the “Effective Date”), between Buyer and Seller.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate one or more Facilities; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in the Agreement, the Product from each Facility; and WHEREAS, the Parties acknowledged that certain Renewable Power Purchase Agreement General Terms and Conditions dated as of ____________ (“General Conditions”), which are incorporated by reference as set forth herein;
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:
1. Incorporation of General Conditions. The General Conditions are incorporated herein as if set forth in their entirety. Any capitalized terms not otherwise defined herein shall have the meaning given to them in the General Conditions.
2. Schedules. The following Schedules comprise the remainder of the Special Conditions:
Schedule 1 Key Commercial Terms
Schedule 2 Description of the Site and Facility
Schedule 3 Emergency Energy Services
Schedule 4 Bill Optimization Services
Schedule 5 Material Permits
Schedule 6 Buyer Termination Payment Amount
Schedule 7 Metering Diagram
[Signatures on following page]
Agenda Page 409
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
Coast Energy DevCo, LLC, a Delaware LLC
By:
Name: Blair Herbert
Title: Authorized Signer
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA, a California joint powers authority
By:
Name: Theodore Bardacke
Title: Chief Executive Officer
Agenda Page 410
Schedule 1 – 1
SCHEDULE 1
KEY COMMERCIAL TERMS
Milestones:
Milestone Expected Date for
Completion
Execution of Lease 5/6/2024
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec,
[x] EIR
Not Applicable
Interconnection Approval 6/20/2024
Executed Interconnection Agreement 8/6/2025
Financial Close 2/6/2024
Expected Construction Start Date 11/4/2024
Receipt of permission to operate in parallel with the Distribution System from the Utility Provider 8/6/2025
Expected Commercial Operation Date 8/6/2025
Delivery Term Expected Energy:
Contract Year Expected Energy (MWh)
1 221.60
2 220.49
3 219.39
4 218.29
5 217.20
6 216.12
Agenda Page 411
Schedule 1 – 2
7 215.03
8 213.96
9 212.89
10 211.83
11 210.77
12 209.71
13 208.66
14 207.62
15 206.58
16 205.55
17 204.52
18 203.50
19 202.48
20 201.47
Guaranteed Capacity: 243.97 kW of total Facility capacity Guaranteed Storage Capacity: 117 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Demand Response Capacity: 50 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Guaranteed PV Capacity: 126.97 kW of Installed PV Capacity Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
1 2
3 Agenda Page 412
Schedule 1 – 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 Guaranteed Construction Start Date: 11/4/2024
Guaranteed Commercial Operation Date: 8/6/2025
Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 20 /MWh (flat) with
no escalation
Agenda Page 413
Schedule 1 – 4
The Storage Rate shall be:
Contract Year Storage Rate
1 – 20 /kW-mo. (flat)
with no escalation
Seller’s Assumed Tax Credits: As of the Effective Date, Seller intends to finance the Facility using the ITC at thirty percent (30%) and/or the PTC at $0.028/kWh.
Product
☒ PV Energy
☒ Discharging Energy
☒ Green Attributes (if Renewable Energy Credit, please check the applicable box below):
☒ Portfolio Content Category 1
☐ Portfolio Content Category 2
☐ Portfolio Content Category 3
☒ Installed Storage Capacity and Effective Storage Capacity ☒ Energy Services
☒ Capacity Attributes (if applicable)
Roof Repairs or Replacement: 25,000 sq.ft. roof repair for an estimated cost to Seller of $328,590.00.
Security Amounts:
Development Security: $90/kW of Guaranteed PV Capacity plus $105/kW of Guaranteed Storage Capacity
Performance Security: $90/kW of Installed PV Capacity plus $105/kW of Installed Storage Capacity
Bond Requirements:
Payment Bond: Buyer shall have the right, in its sole discretion, to provide Notice to Seller prior to the Commercial Operation Date requiring Seller to provide a payment Surety Bond in an amount not less than four million dollars ($4,000,000) to secure Seller’s payment obligation to its suppliers, contractors and subcontractors who provide materials or services in connection with achieving Commercial Operation. Buyer shall reimburse Seller’s actual documented costs to provide such Payment Bond within ten (10) Business Days after Seller provides an invoice to Buyer for such costs, together with supporting documentation reasonably acceptable to Buyer (including at least three quotes from Surety Bond issuers for such Payment Bond), such amount not to exceed five hundred ten thousand dollars ($510,000). Seller shall be solely responsible for any costs in connection with providing the Payment Bond in excess of such maximum reimbursable amount.
Agenda Page 414
Agenda Page 415
Exhibit S - 2
Site Diagram:
Agenda Page 416
Schedule 3 – 1
SCHEDULE 3
EMERGENCY ENERGY SERVICES
1. Seller shall at all times other than during a Blackout Event maintain a minimum stored energy level equal to 117 kWh (“Critical Energy Reserve”). In the event that Seller has advance notice of a potential or planned Blackout Event, Seller shall use commercially reasonable efforts to charge the Storage Facility to 100% SOC prior to the commencement of the Blackout Event.
2. Seller shall deliver Facility Energy to supply the Critical Load upon the occurrence of any Blackout Event (the “Emergency Energy Services”). If (a) the Blackout Event lasts longer than the time it take for Seller to deliver the Critical Energy Reserve and (b) the Storage Facility has additional stored Energy, Seller shall continue to deliver Discharging Energy until the earlier of (w) the SOC reaches zero percent (0%), (x) the Blackout Event ends, or (y) the Critical Load is zero (0) kWh.
“Critical Load” means the amount of Site Load on the Designated Circuit(s) (defined below). “Designated Circuit(s)” means the following circuits at the Site Host premises:
Panel Circuit(s) Description
Lighting (EOC)
Receptacle (EOC)
Miscellaneous (COMPRM)
Miscellaneous (UPS)
Miscellaneous (DOOR)
Miscellaneous (911)
Lighting
Miscellaneous (IT)
Miscellaneous (911)
Lighting
Receptacle
Agenda Page 417
Schedule 3 - 2
Miscellaneous (TC)
Miscellaneous (FA)
Miscellaneous (EM)
Miscellaneous (Computer)
Miscellaneous (911 EQ)
Miscellaneous (911 EQ)
Receptacle (IT)
provided, prior to the Construction Start Date, Buyer shall have the right, by providing Notice to Seller, to modify the Designated Circuit(s); provided further, in no event shall the Critical Energy Reserve be modified.
“Blackout Event Performance Factor” shall be calculated as the sum of (a) the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the Stored Energy Level at the commencement of Blackout Event divided by (ii) the Critical Energy Reserve, plus (b) if the Storage Facility did not discharge one hundred percent (100%) of the Stored Energy Level at the commencement of Blackout Event and the Storage Facility failed to discharge during the entire duration of the Blackout Event (except to the extent such failure was the result of the Storage Facility protection equipment disconnecting the Storage Facility from the Critical Load due to the Critical Load exceeding PMax), the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the total amount of Discharging Energy delivered to the Delivery Point during the Blackout Event divided by (ii) the Stored Energy Level at the commencement of Blackout Event; provided, in no event will the Blackout Event Performance Factor exceed one (1). “PMax” means the maximum operating power level (expressed in kW) of the Storage Facility measured at the Delivery Point.
3. Seller shall provide to Buyer and Site Host a web-based customer portal with read-only access to a forecast, updated no less frequently than once per day, of an hourly forecast of the Facility Energy and Storage Capacity availability for the following day.
4. Seller shall use commercially reasonable efforts to implement Site Host’s input into the manner in which Seller provides the Emergency Energy Services.
Agenda Page 418
Schedule 4 – 1
SCHEDULE 4
BILL OPTIMIZATION SERVICES
1. Seller shall give first priority to operating the Facility to maintain at all times the ability to provide the Emergency Energy Services, and Seller shall give second priority to operating the Facility to maximize the amount of cost savings associated with the Site Host’s monthly bill from the Utility Provider (including the portion(s) of such bills attributable to charges related to Buyer’s services, products and programs) (the “Bill Optimization Services”). Bill Optimization Services shall consist of the following:
(a) Demand Charge Reduction. Delivery of Facility Energy during predicted Site Load peaks to reduce the Site Load and associated demand charges assessed by the Utility Provider;
(b) Time of Use Shifting. Operation of the Facility to maximize delivery of Facility Energy during periods when the retail electricity $/kWh rates applicable to the Site Host are the highest; and
(c) Net Energy Metering. Operation of the Facility to maximize the cost savings derived from the Site Host’s participation in any net energy metering program available.
2. Minimum Guaranteed Cost Savings. Subject to any applicable Adjustments in accordance with Section 4 of this Schedule 4, in each Contract Year the total Cost Savings from the Bill Optimization Services provided in such Contract Year shall not be less than the following amounts (the “Minimum Guaranteed Cost Savings”):
Term Year: Estimated Annual Savings
1 2
3 4
5 6
7 8
Agenda Page 419
Schedule 4 - 2
9 10
11 12
13 14
15 16
17 18
19 20
3. Calculation of Cost Savings: For each Billing Period, Seller shall calculate the difference (the “Cost Savings”) between (a) the electrical energy costs and demand charges that would have been charged by the Utility Provider if the Facility had not been in operation during such Billing Period, and (b) the actual electrical energy costs (net of any net metering or other similar credits or benefits accruing to Site Host as a result of the operation of the Facility) and demand charges. Cost Savings shall be calculated by Seller using data from the Facility Meter, the Utility Provider retail meters with respect to the Site Load, and/or the tariffed rates applicable to the Site Load. Buyer shall, as reasonably requested by Seller, provide (or reasonably cooperate with Seller to enable Seller to obtain) electrical energy use and cost information, demand charges, net energy metering credits and all other information relevant to the calculation of Cost Savings and other amounts under this Agreement.
4. Adjustments. To the extent Seller’s ability or cost to provide the Bill Optimization Services is affected by any of the following (collectively, the “Adjustment Events”), during some or all of a Contract Year, the Minimum Guaranteed Cost Savings (each, an “Adjustment”) shall be subject to a reasonable reduction in accordance with this Section 4 to maintain the balance of the bargain of this Agreement:
(a) A Disruption Period;
(b) A Force Majeure Event;
Agenda Page 420
Schedule 4 - 3
(c) Any material adverse change in the applicable Utility Provider tariff or rate structure, including but not limited to changes in the hours, rates, and calculation methodologies employed by the Utility Provider with respect to the Site Load; (d) Any material deviation in the characteristics of the Site Load compared to the actual Site Load electricity use data for the period between [start date of historical load data] and [end date of historical load data], not resulting from the Facility operations or Seller’s acts or omissions, including as a result of any onsite generation at the Site other than the Facility; (e) Any breach by Buyer of Section 3.1, 3.2 or 3.3 of this Agreement; (f) Any breach by Seller’s landlord of section 7.1(a) (Ingress & Egress), 7.1(b) (Access to Sunlight) that does not constitute Compensated Lost Energy, or Section 12.4(b) of the lease agreement with Seller;
(g) The occurrence of any Compensated Lost Energy; or
(h) A Blackout Event and/or preparing for a Blackout Event pursuant to Section 2 of Schedule 3 of this Special Conditions (for example, by not leaving the Storage Facility with sufficient stored Energy to reduce the peak site load and thus the demand charges in the applicable month).
The Parties shall work together in good faith to determine the amount of the Adjustment.
Seller shall provide Notice to Buyer of any Adjustment Event, including (x) the facts and circumstances giving rise to such Adjustment Event, (y) a statement of the amount of the Adjustment which Seller proposes, and (z) a detailed explanation of, and rationale for, its calculation methodology, annotated work papers and source data. If Buyer disagrees in good faith with such Adjustment amount as calculated by Seller, Buyer may provide Notice to Seller of such disagreement within forty-five (45) days after its receipt of such Notice from Seller. If Buyer does not dispute the proposed amount of such Adjustment within forty-five (45) days after its receipt of such Notice from Seller, Buyer will be deemed to have accepted such Adjustment. If the Parties after good-faith effort are unable to agree on the Adjustment amount within ten (10) Business Days after Seller receives Notice of Buyer’s disagreement with Seller’s proposed Adjustment amount, the Parties shall promptly refer the dispute to an independent expert reasonably agreed to by the Parties. The independent expert, acting as arbitrator, shall finally determine the technical matter at issue in accordance with the provisions of this Agreement and shall issue its written final decision to both Parties within thirty (30) days after the date on which the matter is submitted to it. The final decision of such independent expert shall be binding with respect to the Adjustment. The costs of the determination, including fees and expenses of the independent expert, shall be borne by the Party the independent expert deems is in the wrong. Any Adjustment pursuant to this Section 4 shall apply only to the Contract Year(s) in which such Adjustment Event is applicable.
5. Bill Optimization Services Review. Seller shall review the Bill Optimization Services strategies, assumptions and practices at least annually, and at any time upon Buyer’s reasonable request, to determine if adjustments are appropriate to improve the amount of Cost Savings. Seller shall not make material modifications to its Bill Optimization Services without
Agenda Page 421
Schedule 4 - 4
Buyer’s prior approval, which approval shall not be unreasonably withheld, conditioned or delayed.
Agenda Page 422
Schedule 5 – 1
SCHEDULE 5
MATERIAL PERMITS
No. Permits
1 N/A
2 N/A
Agenda Page 423
Agenda Page 424
Schedule 7 – 1
SCHEDULE 7
METERING DIAGRAM
Agenda Page 425
CPA 2023 POWER READY PROGRAM
RENEWABLE ENERGY + STORAGE PRO FORMA PPA SPECIAL CONDITIONS
RENEWABLE POWER PURCHASE AGREEMENT
SPECIAL CONDITIONS
This Special Conditions (“Special Conditions”) is entered into as of _________ (the “Effective Date”), between Buyer and Seller.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate one or more Facilities; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in the Agreement, the Product from each Facility; and WHEREAS, the Parties acknowledged that certain Renewable Power Purchase Agreement General Terms and Conditions dated as of ____________ (“General Conditions”), which are incorporated by reference as set forth herein;
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:
1. Incorporation of General Conditions. The General Conditions are incorporated herein as if set forth in their entirety. Any capitalized terms not otherwise defined herein shall have the meaning given to them in the General Conditions.
2. Schedules. The following Schedules comprise the remainder of the Special Conditions:
Schedule 1 Key Commercial Terms
Schedule 2 Description of the Site and Facility
Schedule 3 Emergency Energy Services
Schedule 4 Bill Optimization Services
Schedule 5 Material Permits
Schedule 6 Buyer Termination Payment Amount
Schedule 7 Metering Diagram
[Signatures on following page]
Agenda Page 426
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
Coast Energy DevCo, LLC, a Delaware LLC
By:
Name: Blair Herbert
Title: Authorized Signer
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA, a California joint powers authority
By:
Name: Theodore Bardacke
Title: Chief Executive Officer
Agenda Page 427
Schedule 1 – 1
SCHEDULE 1
KEY COMMERCIAL TERMS
Milestones:
Milestone Expected Date for
Completion
Execution of Lease 5/6/2024
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec,
[x] EIR
Not Applicable
Interconnection Approval 6/20/2024
Executed Interconnection Agreement 8/6/2025
Financial Close 2/6/2024
Expected Construction Start Date 11/4/2024
Receipt of permission to operate in parallel with the
Distribution System from the Utility Provider 8/6/2025
Expected Commercial Operation Date 8/6/2025
Delivery Term Expected Energy:
Contract Year Expected Energy (MWh)
1 412.20
2 410.14
3 408.09
4 406.05
5 404.02
6 402.00
Agenda Page 428
Schedule 1 – 2
7 399.99
8 397.99
9 396.00
10 394.02
11 392.05
12 390.09
13 388.14
14 386.20
15 384.27
16 382.34
17 380.43
18 378.53
19 376.64
20 374.75
Guaranteed Capacity: 387.12 kW of total Facility capacity Guaranteed Storage Capacity: 175.5 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Demand Response Capacity: 8 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Guaranteed PV Capacity: 211.62 kW of Installed PV Capacity Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
1 2
3 Agenda Page 429
Schedule 1 – 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 Guaranteed Construction Start Date: 11/4/2024
Guaranteed Commercial Operation Date: 8/6/2025
Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 20 /MWh (flat)
with no escalation
Agenda Page 430
Schedule 1 – 4
The Storage Rate shall be:
Contract Year Storage Rate
1 – 20 /kW-mo. (flat)
with no escalation
Seller’s Assumed Tax Credits: As of the Effective Date, Seller intends to finance the Facility using the ITC at thirty percent (30%) and/or the PTC at $0.028/kWh.
Product
☒ PV Energy
☒ Discharging Energy
☒ Green Attributes (if Renewable Energy Credit, please check the applicable box below):
☒ Portfolio Content Category 1
☐ Portfolio Content Category 2
☐ Portfolio Content Category 3
☒ Installed Storage Capacity and Effective Storage Capacity ☒ Energy Services
☒ Capacity Attributes (if applicable)
Roof Repairs or Replacement: Not Applicable
Security Amounts:
Development Security: $90/kW of Guaranteed PV Capacity plus $105/kW of Guaranteed Storage Capacity
Performance Security: $90/kW of Installed PV Capacity plus $105/kW of Installed Storage Capacity
Bond Requirements:
Payment Bond: Buyer shall have the right, in its sole discretion, to provide Notice to Seller prior to the Commercial Operation Date requiring Seller to provide a payment Surety Bond in an amount not less than four million dollars ($4,000,000) to secure Seller’s payment obligation to its suppliers, contractors and subcontractors who provide materials or services in connection with achieving Commercial Operation. Buyer shall reimburse Seller’s actual documented costs to provide such Payment Bond within ten (10) Business Days after Seller provides an invoice to Buyer for such costs, together with supporting documentation reasonably acceptable to Buyer (including at least three quotes from Surety Bond issuers for such Payment Bond), such amount not to exceed five hundred ten thousand dollars ($510,000). Seller shall be solely responsible for any costs in connection with providing the Payment Bond in excess of such maximum reimbursable amount.
Agenda Page 431
Agenda Page 432
Exhibit S - 2
Site Diagram:
Agenda Page 433
Schedule 3 – 1
SCHEDULE 3
EMERGENCY ENERGY SERVICES
1. Seller shall at all times other than during a Blackout Event maintain a minimum stored energy level equal to 175.5 kWh (“Critical Energy Reserve”). In the event that Seller has advance notice of a potential or planned Blackout Event, Seller shall use commercially reasonable efforts to charge the Storage Facility to 100% SOC prior to the commencement of the Blackout Event.
2. Seller shall deliver Facility Energy to supply the Critical Load upon the occurrence of any Blackout Event (the “Emergency Energy Services”). If (a) the Blackout Event lasts longer than the time it take for Seller to deliver the Critical Energy Reserve and (b) the Storage Facility has additional stored Energy, Seller shall continue to deliver Discharging Energy until the earlier of (w) the SOC reaches zero percent (0%), (x) the Blackout Event ends, or (y) the Critical Load is zero (0) kWh.
“Critical Load” means the amount of Site Load on the Designated Circuit(s) (defined below). “Designated Circuit(s)” means the following circuits at the Site Host premises:
Panel Circuit(s) Description
Miscellaneous (IT)
HVAC (AC)
Miscellaneous (AV
Room/Phone)
Lighting
Receptacle
Lighting
Receptable
Lighting
Receptable
Agenda Page 434
Schedule 3 - 2
Lighting
Miscellaneous (Door)
Receptable
Miscellaneous (Kitchen,
GD, Refrigerator)
Lighting
Receptable
(Dispatch/Phone)
Receptable
(Computer/Server)
provided, prior to the Construction Start Date, Buyer shall have the right, by providing Notice to Seller, to modify the Designated Circuit(s); provided further, in no event shall the Critical Energy Reserve be modified.
“Blackout Event Performance Factor” shall be calculated as the sum of (a) the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the Stored Energy Level at the commencement of Blackout Event divided by (ii) the Critical Energy Reserve, plus (b) if the Storage Facility did not discharge one hundred percent (100%) of the Stored Energy Level at the commencement of Blackout Event and the Storage Facility failed to discharge during the entire duration of the Blackout Event (except to the extent such failure was the result of the Storage Facility protection equipment disconnecting the Storage Facility from the Critical Load due to the Critical Load exceeding PMax), the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the total amount of Discharging Energy delivered to the Delivery Point during the Blackout Event divided by (ii) the Stored Energy Level at the commencement of Blackout Event; provided, in no event will the Blackout Event Performance Factor exceed one (1). “PMax” means the maximum operating power level (expressed in kW) of the Storage Facility measured at the Delivery Point.
3. Seller shall provide to Buyer and Site Host a web-based customer portal with read-only access to a forecast, updated no less frequently than once per day, of an hourly forecast of the Facility Energy and Storage Capacity availability for the following day.
4. Seller shall use commercially reasonable efforts to implement Site Host’s input into the manner in which Seller provides the Emergency Energy Services.
Agenda Page 435
Schedule 4 – 1
SCHEDULE 4
BILL OPTIMIZATION SERVICES
1. Seller shall give first priority to operating the Facility to maintain at all times the ability to provide the Emergency Energy Services, and Seller shall give second priority to operating the Facility to maximize the amount of cost savings associated with the Site Host’s monthly bill from the Utility Provider (including the portion(s) of such bills attributable to charges related to Buyer’s services, products and programs) (the “Bill Optimization Services”). Bill Optimization Services shall consist of the following:
(a) Demand Charge Reduction. Delivery of Facility Energy during predicted Site Load peaks to reduce the Site Load and associated demand charges assessed by the Utility Provider;
(b) Time of Use Shifting. Operation of the Facility to maximize delivery of Facility Energy during periods when the retail electricity $/kWh rates applicable to the Site Host are the highest; and
(c) Net Energy Metering. Operation of the Facility to maximize the cost savings derived from the Site Host’s participation in any net energy metering program available.
2. Minimum Guaranteed Cost Savings. Subject to any applicable Adjustments in accordance with Section 4 of this Schedule 4, in each Contract Year the total Cost Savings from the Bill Optimization Services provided in such Contract Year shall not be less than the following amounts (the “Minimum Guaranteed Cost Savings”):
Term Year: Estimated Annual Savings
1 2
3 4
5 6
7 8
Agenda Page 436
Schedule 4 - 2
9 10
11 12
13 14
15 16
17 18
19 20
3. Calculation of Cost Savings: For each Billing Period, Seller shall calculate the difference (the “Cost Savings”) between (a) the electrical energy costs and demand charges that would have been charged by the Utility Provider if the Facility had not been in operation during such Billing Period, and (b) the actual electrical energy costs (net of any net metering or other similar credits or benefits accruing to Site Host as a result of the operation of the Facility) and demand charges. Cost Savings shall be calculated by Seller using data from the Facility Meter, the Utility Provider retail meters with respect to the Site Load, and/or the tariffed rates applicable to the Site Load. Buyer shall, as reasonably requested by Seller, provide (or reasonably cooperate with Seller to enable Seller to obtain) electrical energy use and cost information, demand charges, net energy metering credits and all other information relevant to the calculation of Cost Savings and other amounts under this Agreement.
4. Adjustments. To the extent Seller’s ability or cost to provide the Bill Optimization Services is affected by any of the following (collectively, the “Adjustment Events”), during some or all of a Contract Year, the Minimum Guaranteed Cost Savings (each, an “Adjustment”) shall be subject to a reasonable reduction in accordance with this Section 4 to maintain the balance of the bargain of this Agreement:
(a) A Disruption Period;
(b) A Force Majeure Event;
Agenda Page 437
Schedule 4 - 3
(c) Any material adverse change in the applicable Utility Provider tariff or rate structure, including but not limited to changes in the hours, rates, and calculation methodologies employed by the Utility Provider with respect to the Site Load; (d) Any material deviation in the characteristics of the Site Load compared to the actual Site Load electricity use data for the period between [start date of historical load data] and [end date of historical load data], not resulting from the Facility operations or Seller’s acts or omissions, including as a result of any onsite generation at the Site other than the Facility; (e) Any breach by Buyer of Section 3.1, 3.2 or 3.3 of this Agreement; (f) Any breach by Seller’s landlord of section 7.1(a) (Ingress & Egress), 7.1(b) (Access to Sunlight) that does not constitute Compensated Lost Energy, or Section 12.4(b) of the lease agreement with Seller;
(g) The occurrence of any Compensated Lost Energy; or
(h) A Blackout Event and/or preparing for a Blackout Event pursuant to Section 2 of Schedule 3 of this Special Conditions (for example, by not leaving the Storage Facility with sufficient stored Energy to reduce the peak site load and thus the demand charges in the applicable month).
The Parties shall work together in good faith to determine the amount of the Adjustment.
Seller shall provide Notice to Buyer of any Adjustment Event, including (x) the facts and circumstances giving rise to such Adjustment Event, (y) a statement of the amount of the Adjustment which Seller proposes, and (z) a detailed explanation of, and rationale for, its calculation methodology, annotated work papers and source data. If Buyer disagrees in good faith with such Adjustment amount as calculated by Seller, Buyer may provide Notice to Seller of such disagreement within forty-five (45) days after its receipt of such Notice from Seller. If Buyer does not dispute the proposed amount of such Adjustment within forty-five (45) days after its receipt of such Notice from Seller, Buyer will be deemed to have accepted such Adjustment. If the Parties after good-faith effort are unable to agree on the Adjustment amount within ten (10) Business Days after Seller receives Notice of Buyer’s disagreement with Seller’s proposed Adjustment amount, the Parties shall promptly refer the dispute to an independent expert reasonably agreed to by the Parties. The independent expert, acting as arbitrator, shall finally determine the technical matter at issue in accordance with the provisions of this Agreement and shall issue its written final decision to both Parties within thirty (30) days after the date on which the matter is submitted to it. The final decision of such independent expert shall be binding with respect to the Adjustment. The costs of the determination, including fees and expenses of the independent expert, shall be borne by the Party the independent expert deems is in the wrong. Any Adjustment pursuant to this Section 4 shall apply only to the Contract Year(s) in which such Adjustment Event is applicable.
5. Bill Optimization Services Review. Seller shall review the Bill Optimization Services strategies, assumptions and practices at least annually, and at any time upon Buyer’s reasonable request, to determine if adjustments are appropriate to improve the amount of Cost Savings. Seller shall not make material modifications to its Bill Optimization Services without
Agenda Page 438
Schedule 4 - 4
Buyer’s prior approval, which approval shall not be unreasonably withheld, conditioned or delayed.
Agenda Page 439
Schedule 5 – 1
SCHEDULE 5
MATERIAL PERMITS
No. Permits
1 N/A
2 N/A
Agenda Page 440
Schedule 6 – 1
SCHEDULE 6
BUYER TERMINATION PAYMENT AMOUNT
The Termination Payment shall be calculated in accordance with the following:
Early
Terminatio
n Occurs in
Year:
Termination
Payment if
Storage Rate is
per kW-mo.
Termination
Payment if
Storage Rate is
per kW-mo.
Termination
Payment if
Storage Rate is
per kW-mo.
Termination
Payment if
Storage Rate is
per kW-mo.
1* $2,958,895 $2,958,895 $2,958,895 $2,958,895
2 $2,801,394 $2,802,384 $2,804,363 $2,805,353
3 $2,477,430 $2,479,564 $2,483,830 $2,485,963
4 $2,146,586 $2,149,933 $2,156,628 $2,159,975
5 $2,107,852 $2,095,945 $2,072,132 $2,060,225
6 $2,090,263 $2,078,501 $2,054,979 $2,043,217
7 $2,069,841 $2,058,237 $2,035,028 $2,023,423
8 $2,046,772 $2,035,335 $2,012,460 $2,001,023
9 $2,019,960 $2,008,706 $1,986,197 $1,974,943
10 $1,989,518 $1,978,461 $1,956,348 $1,945,291
11 $1,955,135 $1,944,291 $1,922,604 $1,911,760
12 $1,916,137 $1,905,522 $1,884,291 $1,873,675
13 $1,891,469 $1,881,102 $1,860,368 $1,850,001
14 $1,843,824 $1,833,725 $1,813,529 $1,803,430
15 $1,790,759 $1,780,951 $1,761,334 $1,751,525
16 $1,732,184 $1,722,687 $1,703,692 $1,694,195
17 $1,666,905 $1,657,746 $1,639,428 $1,630,268
18 $1,594,728 $1,585,934 $1,568,346 $1,559,552
19 $1,515,077 $1,506,677 $1,489,878 $1,481,478
20 $1,427,632 $1,419,657 $1,403,706 $1,395,730
At the end of the Delivery Term, the Termination Payment amount shall be deemed to be zero (0). *Includes Early Termination prior to the Commercial Operation Date.
Agenda Page 441
Agenda Page 442
CPA 2023 POWER READY PROGRAM
RENEWABLE ENERGY + STORAGE PRO FORMA PPA SPECIAL CONDITIONS
RENEWABLE POWER PURCHASE AGREEMENT
SPECIAL CONDITIONS
This Special Conditions (“Special Conditions”) is entered into as of _________ (the “Effective Date”), between Buyer and Seller.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate one or more Facilities; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in the Agreement, the Product from each Facility; and WHEREAS, the Parties acknowledged that certain Renewable Power Purchase Agreement General Terms and Conditions dated as of ____________ (“General Conditions”), which are incorporated by reference as set forth herein;
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:
1. Incorporation of General Conditions. The General Conditions are incorporated herein as if set forth in their entirety. Any capitalized terms not otherwise defined herein shall have the meaning given to them in the General Conditions.
2. Schedules. The following Schedules comprise the remainder of the Special Conditions:
Schedule 1 Key Commercial Terms
Schedule 2 Description of the Site and Facility
Schedule 3 Emergency Energy Services
Schedule 4 Bill Optimization Services
Schedule 5 Material Permits
Schedule 6 Buyer Termination Payment Amount
Schedule 7 Metering Diagram
[Signatures on following page]
Agenda Page 443
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
Coast Energy DevCo, LLC, a Delaware LLC
By:
Name: Blair Herbert
Title: Authorized Signer
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA, a California joint powers authority
By:
Name: Theodore Bardacke
Title: Chief Executive Officer
Agenda Page 444
Schedule 1 – 1
SCHEDULE 1
KEY COMMERCIAL TERMS
Milestones:
Milestone Expected Date for
Completion
Execution of Lease 5/6/2024
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec,
[x] EIR
Not Applicable
Interconnection Approval 6/20/2024
Executed Interconnection Agreement 8/6/2025
Financial Close 2/6/2024
Expected Construction Start Date 11/4/2024
Receipt of permission to operate in parallel with the
Distribution System from the Utility Provider 8/6/2025
Expected Commercial Operation Date 8/6/2025
Delivery Term Expected Energy:
Contract Year Expected Energy (MWh)
1 98.19
2 97.70
3 97.21
4 96.72
5 96.24
6 95.76
Agenda Page 445
Agenda Page 446
Schedule 1 – 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 Guaranteed Construction Start Date: 11/4/2024
Guaranteed Commercial Operation Date: 8/6/2025
Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 20 MWh (flat)
with no escalation
Agenda Page 447
Schedule 1 – 4
The Storage Rate shall be:
Contract Year Storage Rate
1 – 20 /kW-mo. (flat)
with no escalation
Seller’s Assumed Tax Credits: As of the Effective Date, Seller intends to finance the Facility using the ITC at thirty percent (30%) and/or the PTC at $0.028/kWh.
Product
☒ PV Energy
☒ Discharging Energy
☒ Green Attributes (if Renewable Energy Credit, please check the applicable box below):
☒ Portfolio Content Category 1
☐ Portfolio Content Category 2
☐ Portfolio Content Category 3
☒ Installed Storage Capacity and Effective Storage Capacity ☒ Energy Services
☒ Capacity Attributes (if applicable)
Roof Repairs or Replacement: 12,000 sq.ft. roof repair for an estimated cost to Seller of $157,960.00.
Security Amounts:
Development Security: $90/kW of Guaranteed PV Capacity plus $105/kW of Guaranteed Storage Capacity
Performance Security: $90/kW of Installed PV Capacity plus $105/kW of Installed Storage Capacity
Bond Requirements:
Payment Bond: Buyer shall have the right, in its sole discretion, to provide Notice to Seller prior to the Commercial Operation Date requiring Seller to provide a payment Surety Bond in an amount not less than four million dollars ($4,000,000) to secure Seller’s payment obligation to its suppliers, contractors and subcontractors who provide materials or services in connection with achieving Commercial Operation. Buyer shall reimburse Seller’s actual documented costs to provide such Payment Bond within ten (10) Business Days after Seller provides an invoice to Buyer for such costs, together with supporting documentation reasonably acceptable to Buyer (including at least three quotes from Surety Bond issuers for such Payment Bond), such amount not to exceed five hundred ten thousand dollars ($510,000). Seller shall be solely responsible for any costs in connection with providing the Payment Bond in excess of such maximum reimbursable amount.
Agenda Page 448
Agenda Page 449
Exhibit S - 2
Site Diagram:
Agenda Page 450
Schedule 3 – 1
SCHEDULE 3
EMERGENCY ENERGY SERVICES
1. Seller shall at all times other than during a Blackout Event maintain a minimum stored energy level equal to 58.5 kWh (“Critical Energy Reserve”). In the event that Seller has advance notice of a potential or planned Blackout Event, Seller shall use commercially reasonable efforts to charge the Storage Facility to 100% SOC prior to the commencement of the Blackout Event.
2. Seller shall deliver Facility Energy to supply the Critical Load upon the occurrence of any Blackout Event (the “Emergency Energy Services”). If (a) the Blackout Event lasts longer than the time it take for Seller to deliver the Critical Energy Reserve and (b) the Storage Facility has additional stored Energy, Seller shall continue to deliver Discharging Energy until the earlier of (w) the SOC reaches zero percent (0%), (x) the Blackout Event ends, or (y) the Critical Load is zero (0) kWh.
“Critical Load” means the amount of Site Load on the Designated Circuit(s) (defined below). “Designated Circuit(s)” means the following circuits at the Site Host premises:
Panel Circuit(s) Description
Lighting
HVAC
Miscellaneous (Computer)
Miscellaneous (Sprinkler)
Miscellaneous (Door)
Miscellaneous (Refrigerator)
Receptacle
provided, prior to the Construction Start Date, Buyer shall have the right, by providing Notice to Seller, to modify the Designated Circuit(s); provided further, in no event shall the Critical Energy Reserve be modified.
“Blackout Event Performance Factor” shall be calculated as the sum of (a) the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the Stored Energy Level at the commencement of Blackout Event divided by (ii) the Critical Energy Reserve, plus (b) if the Storage Facility did not discharge one hundred percent (100%) of the Stored Energy Level at the commencement of Blackout Event and the Storage Facility failed to discharge during the entire Agenda Page 451
Schedule 3 - 2
duration of the Blackout Event (except to the extent such failure was the result of the Storage Facility protection equipment disconnecting the Storage Facility from the Critical Load due to the Critical Load exceeding PMax), the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the total amount of Discharging Energy delivered to the Delivery Point during the Blackout Event divided by (ii) the Stored Energy Level at the commencement of Blackout Event; provided, in no event will the Blackout Event Performance Factor exceed one (1). “PMax” means the maximum operating power level (expressed in kW) of the Storage Facility measured at the Delivery Point.
3. Seller shall provide to Buyer and Site Host a web-based customer portal with read-only access to a forecast, updated no less frequently than once per day, of an hourly forecast of the Facility Energy and Storage Capacity availability for the following day.
4. Seller shall use commercially reasonable efforts to implement Site Host’s input into the manner in which Seller provides the Emergency Energy Services.
Agenda Page 452
Schedule 4 – 1
SCHEDULE 4
BILL OPTIMIZATION SERVICES
1. Seller shall give first priority to operating the Facility to maintain at all times the ability to provide the Emergency Energy Services, and Seller shall give second priority to operating the Facility to maximize the amount of cost savings associated with the Site Host’s monthly bill from the Utility Provider (including the portion(s) of such bills attributable to charges related to Buyer’s services, products and programs) (the “Bill Optimization Services”). Bill Optimization Services shall consist of the following:
(a) Demand Charge Reduction. Delivery of Facility Energy during predicted Site Load peaks to reduce the Site Load and associated demand charges assessed by the Utility Provider;
(b) Time of Use Shifting. Operation of the Facility to maximize delivery of Facility Energy during periods when the retail electricity $/kWh rates applicable to the Site Host are the highest; and
(c) Net Energy Metering. Operation of the Facility to maximize the cost savings derived from the Site Host’s participation in any net energy metering program available.
2. Minimum Guaranteed Cost Savings. Subject to any applicable Adjustments in accordance with Section 4 of this Schedule 4, in each Contract Year the total Cost Savings from the Bill Optimization Services provided in such Contract Year shall not be less than the following amounts (the “Minimum Guaranteed Cost Savings”):
Term Year: Estimated Annual Savings
1 2
3 4
5 6
7 8
Agenda Page 453
Schedule 4 - 2
9 10
11 12
13 14
15 16
17 18
19 20
3. Calculation of Cost Savings: For each Billing Period, Seller shall calculate the difference (the “Cost Savings”) between (a) the electrical energy costs and demand charges that would have been charged by the Utility Provider if the Facility had not been in operation during such Billing Period, and (b) the actual electrical energy costs (net of any net metering or other similar credits or benefits accruing to Site Host as a result of the operation of the Facility) and demand charges. Cost Savings shall be calculated by Seller using data from the Facility Meter, the Utility Provider retail meters with respect to the Site Load, and/or the tariffed rates applicable to the Site Load. Buyer shall, as reasonably requested by Seller, provide (or reasonably cooperate with Seller to enable Seller to obtain) electrical energy use and cost information, demand charges, net energy metering credits and all other information relevant to the calculation of Cost Savings and other amounts under this Agreement.
4. Adjustments. To the extent Seller’s ability or cost to provide the Bill Optimization Services is affected by any of the following (collectively, the “Adjustment Events”), during some or all of a Contract Year, the Minimum Guaranteed Cost Savings (each, an “Adjustment”) shall be subject to a reasonable reduction in accordance with this Section 4 to maintain the balance of the bargain of this Agreement:
(a) A Disruption Period;
(b) A Force Majeure Event;
Agenda Page 454
Schedule 4 - 3
(c) Any material adverse change in the applicable Utility Provider tariff or rate structure, including but not limited to changes in the hours, rates, and calculation methodologies employed by the Utility Provider with respect to the Site Load; (d) Any material deviation in the characteristics of the Site Load compared to the actual Site Load electricity use data for the period between [start date of historical load data] and [end date of historical load data], not resulting from the Facility operations or Seller’s acts or omissions, including as a result of any onsite generation at the Site other than the Facility; (e) Any breach by Buyer of Section 3.1, 3.2 or 3.3 of this Agreement; (f) Any breach by Seller’s landlord of section 7.1(a) (Ingress & Egress), 7.1(b) (Access to Sunlight) that does not constitute Compensated Lost Energy, or Section 12.4(b) of the lease agreement with Seller;
(g) The occurrence of any Compensated Lost Energy; or
(h) A Blackout Event and/or preparing for a Blackout Event pursuant to Section 2 of Schedule 3 of this Special Conditions (for example, by not leaving the Storage Facility with sufficient stored Energy to reduce the peak site load and thus the demand charges in the applicable month).
The Parties shall work together in good faith to determine the amount of the Adjustment.
Seller shall provide Notice to Buyer of any Adjustment Event, including (x) the facts and circumstances giving rise to such Adjustment Event, (y) a statement of the amount of the Adjustment which Seller proposes, and (z) a detailed explanation of, and rationale for, its calculation methodology, annotated work papers and source data. If Buyer disagrees in good faith with such Adjustment amount as calculated by Seller, Buyer may provide Notice to Seller of such disagreement within forty-five (45) days after its receipt of such Notice from Seller. If Buyer does not dispute the proposed amount of such Adjustment within forty-five (45) days after its receipt of such Notice from Seller, Buyer will be deemed to have accepted such Adjustment. If the Parties after good-faith effort are unable to agree on the Adjustment amount within ten (10) Business Days after Seller receives Notice of Buyer’s disagreement with Seller’s proposed Adjustment amount, the Parties shall promptly refer the dispute to an independent expert reasonably agreed to by the Parties. The independent expert, acting as arbitrator, shall finally determine the technical matter at issue in accordance with the provisions of this Agreement and shall issue its written final decision to both Parties within thirty (30) days after the date on which the matter is submitted to it. The final decision of such independent expert shall be binding with respect to the Adjustment. The costs of the determination, including fees and expenses of the independent expert, shall be borne by the Party the independent expert deems is in the wrong. Any Adjustment pursuant to this Section 4 shall apply only to the Contract Year(s) in which such Adjustment Event is applicable.
5. Bill Optimization Services Review. Seller shall review the Bill Optimization Services strategies, assumptions and practices at least annually, and at any time upon Buyer’s reasonable request, to determine if adjustments are appropriate to improve the amount of Cost Savings. Seller shall not make material modifications to its Bill Optimization Services without
Agenda Page 455
Schedule 4 - 4
Buyer’s prior approval, which approval shall not be unreasonably withheld, conditioned or delayed.
Agenda Page 456
Schedule 5 – 1
SCHEDULE 5
MATERIAL PERMITS
No. Permits
1 N/A
2 N/A
Agenda Page 457
Schedule 6 – 1
SCHEDULE 6
BUYER TERMINATION PAYMENT AMOUNT
The Termination Payment shall be calculated in accordance with the following:
Early
Termination
Occurs in
Year:
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
1* $1,319,607 $1,319,607 $1,319,607 $1,319,607
2 $1,260,552 $1,260,882 $1,261,541 $1,261,871
3 $1,148,054 $1,148,765 $1,150,187 $1,150,898
4 $1,033,965 $1,035,081 $1,037,313 $1,038,428
5 $918,183 $919,728 $922,819 $924,364
6 $800,597 $802,599 $806,602 $808,603
7 $772,895 $775,381 $780,352 $782,838
8 $743,151 $746,151 $752,151 $755,151
9 $711,237 $714,782 $721,874 $725,420
10 $677,012 $681,137 $689,387 $693,513
11 $640,330 $645,070 $654,551 $659,292
12 $600,824 $606,218 $617,006 $622,399
13 $564,027 $570,114 $582,288 $588,375
14 $519,090 $525,913 $539,560 $546,384
15 $473,953 $478,616 $493,827 $501,432
16 $455,815 $452,649 $446,318 $453,332
17 $435,745 $432,691 $426,585 $423,532
18 $413,677 $410,746 $407,083 $407,083
19 $407,083 $407,083 $407,083 $407,083
20 $407,083 $407,083 $407,083 $407,083
At the end of the Delivery Term, the Termination Payment amount shall be deemed to be zero (0). *Includes Early Termination prior to the Commercial Operation Date.
Agenda Page 458
Schedule 7 – 1
SCHEDULE 7
METERING DIAGRAM
Agenda Page 459
CPA 2023 POWER READY PROGRAM
RENEWABLE ENERGY + STORAGE PRO FORMA PPA SPECIAL CONDITIONS
RENEWABLE POWER PURCHASE AGREEMENT
SPECIAL CONDITIONS
This Special Conditions (“Special Conditions”) is entered into as of _________ (the “Effective Date”), between Buyer and Seller.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate one or more Facilities; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in the Agreement, the Product from each Facility; and WHEREAS, the Parties acknowledged that certain Renewable Power Purchase Agreement General Terms and Conditions dated as of ____________ (“General Conditions”), which are incorporated by reference as set forth herein;
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:
1. Incorporation of General Conditions. The General Conditions are incorporated herein as if set forth in their entirety. Any capitalized terms not otherwise defined herein shall have the meaning given to them in the General Conditions.
2. Schedules. The following Schedules comprise the remainder of the Special Conditions:
Schedule 1 Key Commercial Terms
Schedule 2 Description of the Site and Facility
Schedule 3 Emergency Energy Services
Schedule 4 Bill Optimization Services
Schedule 5 Material Permits
Schedule 6 Buyer Termination Payment Amount
Schedule 7 Metering Diagram
[Signatures on following page]
Agenda Page 460
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
Coast Energy DevCo, LLC, a Delaware LLC
By:
Name: Blair Herbert
Title: Authorized Signer
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA, a California joint powers authority
By:
Name: Theodore Bardacke
Title: Chief Executive Officer
Agenda Page 461
Schedule 1 – 1
SCHEDULE 1
KEY COMMERCIAL TERMS
Milestones:
Milestone Expected Date for
Completion
Execution of Lease 5/6/2024
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec,
[x] EIR
Not Applicable
Interconnection Approval 6/20/2024
Executed Interconnection Agreement 8/6/2025
Financial Close 2/6/2024
Expected Construction Start Date 11/4/2024
Receipt of permission to operate in parallel with the
Distribution System from the Utility Provider 8/6/2025
Expected Commercial Operation Date 8/6/2025
Delivery Term Expected Energy:
Contract Year Expected Energy (MWh)
1 90.96
2 90.51
3 90.05
4 89.60
5 89.15
6 88.71
Agenda Page 462
Schedule 1 – 2
7 88.27
8 87.82
9 87.38
10 86.95
11 86.51
12 86.08
13 85.65
14 85.22
15 84.80
16 84.37
17 83.95
18 83.53
19 83.11
20 82.70
Guaranteed Capacity: 111.41 kW of total Facility capacity Guaranteed Storage Capacity: 58.5 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Demand Response Capacity: 25 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Guaranteed PV Capacity: 52.91 kW of Installed PV Capacity Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
1 2
3 Agenda Page 463
Schedule 1 – 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 Guaranteed Construction Start Date: 11/4/2024
Guaranteed Commercial Operation Date: 8/6/2025
Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 20 /MWh (flat)
with no escalation
Agenda Page 464
Schedule 1 – 4
The Storage Rate shall be:
Contract Year Storage Rate
1 – 20 /kW-mo. (flat)
with no escalation
Seller’s Assumed Tax Credits: As of the Effective Date, Seller intends to finance the Facility using the ITC at thirty percent (30%) and/or the PTC at $0.028/kWh.
Product
☒ PV Energy
☒ Discharging Energy
☒ Green Attributes (if Renewable Energy Credit, please check the applicable box below):
☒ Portfolio Content Category 1
☐ Portfolio Content Category 2
☐ Portfolio Content Category 3
☒ Installed Storage Capacity and Effective Storage Capacity ☒ Energy Services
☒ Capacity Attributes (if applicable)
Roof Repairs or Replacement: Not Applicable
Security Amounts:
Development Security: $90/kW of Guaranteed PV Capacity plus $105/kW of Guaranteed Storage Capacity
Performance Security: $90/kW of Installed PV Capacity plus $105/kW of Installed Storage Capacity
Bond Requirements:
Payment Bond: Buyer shall have the right, in its sole discretion, to provide Notice to Seller prior to the Commercial Operation Date requiring Seller to provide a payment Surety Bond in an amount not less than four million dollars ($4,000,000) to secure Seller’s payment obligation to its suppliers, contractors and subcontractors who provide materials or services in connection with achieving Commercial Operation. Buyer shall reimburse Seller’s actual documented costs to provide such Payment Bond within ten (10) Business Days after Seller provides an invoice to Buyer for such costs, together with supporting documentation reasonably acceptable to Buyer (including at least three quotes from Surety Bond issuers for such Payment Bond), such amount not to exceed five hundred ten thousand dollars ($510,000). Seller shall be solely responsible for any costs in connection with providing the Payment Bond in excess of such maximum reimbursable amount.
Agenda Page 465
Agenda Page 466
Exhibit S - 2
Site Diagram:
Agenda Page 467
Schedule 3 – 1
SCHEDULE 3
EMERGENCY ENERGY SERVICES
1. Seller shall at all times other than during a Blackout Event maintain a minimum stored energy level equal to 58.5 kWh (“Critical Energy Reserve”). In the event that Seller has advance notice of a potential or planned Blackout Event, Seller shall use commercially reasonable efforts to charge the Storage Facility to 100% SOC prior to the commencement of the Blackout Event.
2. Seller shall deliver Facility Energy to supply the Critical Load upon the occurrence of any Blackout Event (the “Emergency Energy Services”). If (a) the Blackout Event lasts longer than the time it take for Seller to deliver the Critical Energy Reserve and (b) the Storage Facility has additional stored Energy, Seller shall continue to deliver Discharging Energy until the earlier of (w) the SOC reaches zero percent (0%), (x) the Blackout Event ends, or (y) the Critical Load is zero (0) kWh.
“Critical Load” means the amount of Site Load on the Designated Circuit(s) (defined below). “Designated Circuit(s)” means the following circuits at the Site Host premises:
Panel Circuit(s) Description
Lighting
Receptacle
Miscellaneous (Apparatus
Bay)
Miscellaneous (Refrigerator)
provided, prior to the Construction Start Date, Buyer shall have the right, by providing Notice to Seller, to modify the Designated Circuit(s); provided further, in no event shall the Critical Energy Reserve be modified.
“Blackout Event Performance Factor” shall be calculated as the sum of (a) the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the Stored Energy Level at the commencement of Blackout Event divided by (ii) the Critical Energy Reserve, plus (b) if the Storage Facility did not discharge one hundred percent (100%) of the Stored Energy Level at the commencement of Blackout Event and the Storage Facility failed to discharge during the entire duration of the Blackout Event (except to the extent such failure was the result of the Storage Facility protection equipment disconnecting the Storage Facility from the Critical Load due to the Critical Load exceeding PMax), the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the total amount of Discharging Energy delivered to the Delivery Point during the Agenda Page 468
Schedule 3 - 2
Blackout Event divided by (ii) the Stored Energy Level at the commencement of Blackout Event; provided, in no event will the Blackout Event Performance Factor exceed one (1). “PMax” means the maximum operating power level (expressed in kW) of the Storage Facility measured at the Delivery Point.
3. Seller shall provide to Buyer and Site Host a web-based customer portal with read-only access to a forecast, updated no less frequently than once per day, of an hourly forecast of the Facility Energy and Storage Capacity availability for the following day.
4. Seller shall use commercially reasonable efforts to implement Site Host’s input into the manner in which Seller provides the Emergency Energy Services.
Agenda Page 469
Schedule 4 – 1
SCHEDULE 4
BILL OPTIMIZATION SERVICES
1. Seller shall give first priority to operating the Facility to maintain at all times the ability to provide the Emergency Energy Services, and Seller shall give second priority to operating the Facility to maximize the amount of cost savings associated with the Site Host’s monthly bill from the Utility Provider (including the portion(s) of such bills attributable to charges related to Buyer’s services, products and programs) (the “Bill Optimization Services”). Bill Optimization Services shall consist of the following:
(a) Demand Charge Reduction. Delivery of Facility Energy during predicted Site Load peaks to reduce the Site Load and associated demand charges assessed by the Utility Provider;
(b) Time of Use Shifting. Operation of the Facility to maximize delivery of Facility Energy during periods when the retail electricity $/kWh rates applicable to the Site Host are the highest; and
(c) Net Energy Metering. Operation of the Facility to maximize the cost savings derived from the Site Host’s participation in any net energy metering program available.
2. Minimum Guaranteed Cost Savings. Subject to any applicable Adjustments in accordance with Section 4 of this Schedule 4, in each Contract Year the total Cost Savings from the Bill Optimization Services provided in such Contract Year shall not be less than the following amounts (the “Minimum Guaranteed Cost Savings”):
Term Year: Estimated Annual Savings
1 2
3 4
5 6
7 8
Agenda Page 470
Schedule 4 - 2
9 10
11 12
13 14
15 16
17 18
19 20
3. Calculation of Cost Savings: For each Billing Period, Seller shall calculate the difference (the “Cost Savings”) between (a) the electrical energy costs and demand charges that would have been charged by the Utility Provider if the Facility had not been in operation during such Billing Period, and (b) the actual electrical energy costs (net of any net metering or other similar credits or benefits accruing to Site Host as a result of the operation of the Facility) and demand charges. Cost Savings shall be calculated by Seller using data from the Facility Meter, the Utility Provider retail meters with respect to the Site Load, and/or the tariffed rates applicable to the Site Load. Buyer shall, as reasonably requested by Seller, provide (or reasonably cooperate with Seller to enable Seller to obtain) electrical energy use and cost information, demand charges, net energy metering credits and all other information relevant to the calculation of Cost Savings and other amounts under this Agreement.
4. Adjustments. To the extent Seller’s ability or cost to provide the Bill Optimization Services is affected by any of the following (collectively, the “Adjustment Events”), during some or all of a Contract Year, the Minimum Guaranteed Cost Savings (each, an “Adjustment”) shall be subject to a reasonable reduction in accordance with this Section 4 to maintain the balance of the bargain of this Agreement:
(a) A Disruption Period;
(b) A Force Majeure Event;
Agenda Page 471
Schedule 4 - 3
(c) Any material adverse change in the applicable Utility Provider tariff or rate structure, including but not limited to changes in the hours, rates, and calculation methodologies employed by the Utility Provider with respect to the Site Load; (d) Any material deviation in the characteristics of the Site Load compared to the actual Site Load electricity use data for the period between [start date of historical load data] and [end date of historical load data], not resulting from the Facility operations or Seller’s acts or omissions, including as a result of any onsite generation at the Site other than the Facility; (e) Any breach by Buyer of Section 3.1, 3.2 or 3.3 of this Agreement; (f) Any breach by Seller’s landlord of section 7.1(a) (Ingress & Egress), 7.1(b) (Access to Sunlight) that does not constitute Compensated Lost Energy, or Section 12.4(b) of the lease agreement with Seller;
(g) The occurrence of any Compensated Lost Energy; or
(h) A Blackout Event and/or preparing for a Blackout Event pursuant to Section 2 of Schedule 3 of this Special Conditions (for example, by not leaving the Storage Facility with sufficient stored Energy to reduce the peak site load and thus the demand charges in the applicable month).
The Parties shall work together in good faith to determine the amount of the Adjustment.
Seller shall provide Notice to Buyer of any Adjustment Event, including (x) the facts and circumstances giving rise to such Adjustment Event, (y) a statement of the amount of the Adjustment which Seller proposes, and (z) a detailed explanation of, and rationale for, its calculation methodology, annotated work papers and source data. If Buyer disagrees in good faith with such Adjustment amount as calculated by Seller, Buyer may provide Notice to Seller of such disagreement within forty-five (45) days after its receipt of such Notice from Seller. If Buyer does not dispute the proposed amount of such Adjustment within forty-five (45) days after its receipt of such Notice from Seller, Buyer will be deemed to have accepted such Adjustment. If the Parties after good-faith effort are unable to agree on the Adjustment amount within ten (10) Business Days after Seller receives Notice of Buyer’s disagreement with Seller’s proposed Adjustment amount, the Parties shall promptly refer the dispute to an independent expert reasonably agreed to by the Parties. The independent expert, acting as arbitrator, shall finally determine the technical matter at issue in accordance with the provisions of this Agreement and shall issue its written final decision to both Parties within thirty (30) days after the date on which the matter is submitted to it. The final decision of such independent expert shall be binding with respect to the Adjustment. The costs of the determination, including fees and expenses of the independent expert, shall be borne by the Party the independent expert deems is in the wrong. Any Adjustment pursuant to this Section 4 shall apply only to the Contract Year(s) in which such Adjustment Event is applicable.
5. Bill Optimization Services Review. Seller shall review the Bill Optimization Services strategies, assumptions and practices at least annually, and at any time upon Buyer’s reasonable request, to determine if adjustments are appropriate to improve the amount of Cost Savings. Seller shall not make material modifications to its Bill Optimization Services without
Agenda Page 472
Schedule 4 - 4
Buyer’s prior approval, which approval shall not be unreasonably withheld, conditioned or delayed.
Agenda Page 473
Schedule 5 – 1
SCHEDULE 5
MATERIAL PERMITS
No. Permits
1 N/A
2 N/A
Agenda Page 474
Schedule 6 – 1
SCHEDULE 6
BUYER TERMINATION PAYMENT AMOUNT
The Termination Payment shall be calculated in accordance with the following:
Early
Termination
Occurs in
Year:
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
1* $1,101,464 $1,101,464 $1,101,464 $1,101,464
2 $1,053,213 $1,053,543 $1,054,202 $1,054,532
3 $953,371 $954,082 $955,504 $956,215
4 $851,986 $853,102 $855,333 $856,449
5 $748,958 $750,504 $753,594 $755,140
6 $644,183 $646,184 $650,187 $652,189
7 $617,128 $619,614 $624,585 $627,071
8 $588,094 $591,094 $597,094 $600,094
9 $556,956 $560,501 $567,593 $571,139
10 $523,577 $527,703 $535,953 $540,079
11 $503,953 $500,338 $502,039 $506,780
12 $491,474 $487,936 $480,859 $477,320
13 $482,407 $478,952 $472,040 $468,585
14 $467,415 $464,049 $457,317 $453,951
15 $450,873 $447,604 $441,065 $437,796
16 $432,745 $429,579 $423,247 $420,082
17 $412,714 $409,661 $403,555 $400,502
18 $390,717 $387,785 $381,923 $378,991
19 $366,590 $363,790 $358,190 $355,390
20 $340,229 $337,570 $332,253 $329,595
At the end of the Delivery Term, the Termination Payment amount shall be deemed to be zero (0). *Includes Early Termination prior to the Commercial Operation Date.
Agenda Page 475
Agenda Page 476
CPA 2023 POWER READY PROGRAM
RENEWABLE ENERGY + STORAGE PRO FORMA PPA SPECIAL CONDITIONS
RENEWABLE POWER PURCHASE AGREEMENT
SPECIAL CONDITIONS
This Special Conditions (“Special Conditions”) is entered into as of _________ (the “Effective Date”), between Buyer and Seller.
RECITALS
WHEREAS, Seller intends to develop, design, construct, own, and operate one or more Facilities; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in the Agreement, the Product from each Facility; and WHEREAS, the Parties acknowledged that certain Renewable Power Purchase Agreement General Terms and Conditions dated as of ____________ (“General Conditions”), which are incorporated by reference as set forth herein;
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:
1. Incorporation of General Conditions. The General Conditions are incorporated herein as if set forth in their entirety. Any capitalized terms not otherwise defined herein shall have the meaning given to them in the General Conditions.
2. Schedules. The following Schedules comprise the remainder of the Special Conditions:
Schedule 1 Key Commercial Terms
Schedule 2 Description of the Site and Facility
Schedule 3 Emergency Energy Services
Schedule 4 Bill Optimization Services
Schedule 5 Material Permits
Schedule 6 Buyer Termination Payment Amount
Schedule 7 Metering Diagram
Schedule 8 Revised PPA Provisions for Alternate Guaranteed Storage Capacity
Agenda Page 477
2 3. Alternate Storage Capacity Provisions. Buyer shall have the right, in its sole discretion, to increase the Guaranteed Storage Capacity to the Alternate Guaranteed Storage Capacity in accordance with this Section 3 by providing Notice to Seller. Commencing on the date that is sixty (60) days following the Effective Date, the Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date shall be extended on a day-for-day basis each day on which such Notice from Buyer is pending. Upon delivery of a Notice confirming that Buyer elects to increase the Guaranteed Storage Capacity, the revised Agreement provisions set forth in Schedule 8 shall immediately go into effect. [Signatures on following page]
Agenda Page 478
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
[SELLER]
By:
Name:
Title:
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA, a California joint powers authority
By:
Name: Theodore Bardacke
Title: Chief Executive Officer
Agenda Page 479
Schedule 1 – 1
SCHEDULE 1
KEY COMMERCIAL TERMS
Milestones:
Milestone Expected Date for
Completion
Execution of Lease 5/6/2024
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec,
[x] EIR
Not Applicable
Interconnection Approval 9/20/2024
Executed Interconnection Agreement 10/6/2025
Financial Close 2/6/2024
Expected Construction Start Date 10/7/2024
Receipt of permission to operate in parallel with the
Distribution System from the Utility Provider 10/6/2025 Expected Commercial Operation Date 10/6/2025
Delivery Term Expected Energy:
Contract Year Expected Energy (MWh)
1 270.90
2 269.55
3 268.20
4 266.86
5 265.52
6 264.19
Agenda Page 480
Schedule 1 – 2
7 262.87
8 261.56
9 260.25
10 258.95
11 257.66
12 256.37
13 255.09
14 253.81
15 252.54
16 251.28
17 250.02
18 248.77
19 247.53
20 246.29
Guaranteed Capacity: 267.8 kW of total Facility capacity Guaranteed Storage Capacity: 117 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Demand Response Capacity: 17 kW of Installed Storage Capacity at four (4) hours of continuous discharge
Guaranteed PV Capacity: 150.8 kW of Installed PV Capacity Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
1 2
3 Agenda Page 481
Schedule 1 – 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 Guaranteed Construction Start Date: 11/4/2024
Guaranteed Commercial Operation Date: 10/6/2025
Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 20 /MWh (flat)
with no escalation
Agenda Page 482
Schedule 1 – 4
The Storage Rate shall be:
Contract Year Storage Rate
1 – 20 /kW-mo. (flat)
with no escalation
Seller’s Assumed Tax Credits: As of the Effective Date, Seller intends to finance the Facility using the ITC at thirty percent (30%) and/or the PTC at $0.028/kWh.
Product
☒ PV Energy
☒ Discharging Energy
☒ Green Attributes (if Renewable Energy Credit, please check the applicable box below):
☒ Portfolio Content Category 1
☐ Portfolio Content Category 2
☐ Portfolio Content Category 3
☒ Installed Storage Capacity and Effective Storage Capacity ☒ Energy Services
☒ Capacity Attributes (if applicable)
Roof Repairs or Replacement: 35,000 sq.ft. roof replacement for an estimated cost to Seller of $789,980.00.
Security Amounts:
Development Security: $90/kW of Guaranteed PV Capacity plus $105/kW of Guaranteed Storage Capacity
Performance Security: $90/kW of Installed PV Capacity plus $105/kW of Installed Storage Capacity
Bond Requirements:
Payment Bond: Buyer shall have the right, in its sole discretion, to provide Notice to Seller prior to the Commercial Operation Date requiring Seller to provide a payment Surety Bond in an amount not less than four million dollars ($4,000,000) to secure Seller’s payment obligation to its suppliers, contractors and subcontractors who provide materials or services in connection with achieving Commercial Operation. Buyer shall reimburse Seller’s actual documented costs to provide such Payment Bond within ten (10) Business Days after Seller provides an invoice to Buyer for such costs, together with supporting documentation reasonably acceptable to Buyer (including at least three quotes from Surety Bond issuers for such Payment Bond), such amount not to exceed five hundred ten thousand dollars ($510,000). Seller shall be solely responsible for any costs in connection with providing the Payment Bond in excess of such maximum reimbursable amount.
Agenda Page 483
Agenda Page 484
Exhibit S - 2
Site Diagram:
Agenda Page 485
Schedule 3 – 1
SCHEDULE 3
EMERGENCY ENERGY SERVICES
1. Seller shall at all times other than during a Blackout Event maintain a minimum stored energy level equal to 117 kWh (“Critical Energy Reserve”). In the event that Seller has advance notice of a potential or planned Blackout Event, Seller shall use commercially reasonable efforts to charge the Storage Facility to 100% SOC prior to the commencement of the Blackout Event.
2. Seller shall deliver Facility Energy to supply the Critical Load upon the occurrence of any Blackout Event (the “Emergency Energy Services”). If (a) the Blackout Event lasts longer than the time it take for Seller to deliver the Critical Energy Reserve and (b) the Storage Facility has additional stored Energy, Seller shall continue to deliver Discharging Energy until the earlier of (w) the SOC reaches zero percent (0%), (x) the Blackout Event ends, or (y) the Critical Load is zero (0) kWh.
“Critical Load” means the amount of Site Load on the Designated Circuit(s) (defined below). “Designated Circuit(s)” means the following circuits at the Site Host premises:
Panel Circuit(s) Description
[TBD] [TBD] [TBD]
provided, prior to the Construction Start Date, Buyer shall have the right, by providing Notice to Seller, to modify the Designated Circuit(s); provided further, in no event shall the Critical Energy Reserve be modified.
“Blackout Event Performance Factor” shall be calculated as the sum of (a) the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the Stored Energy Level at the commencement of Blackout Event divided by (ii) the Critical Energy Reserve, plus (b) if the Storage Facility did not discharge one hundred percent (100%) of the Stored Energy Level at the
Agenda Page 486
Schedule 3 - 2
commencement of Blackout Event and the Storage Facility failed to discharge during the entire duration of the Blackout Event (except to the extent such failure was the result of the Storage Facility protection equipment disconnecting the Storage Facility from the Critical Load due to the Critical Load exceeding PMax), the quotient (expressed as a decimal, but in no event less than zero (0)) of (i) the total amount of Discharging Energy delivered to the Delivery Point during the Blackout Event divided by (ii) the Stored Energy Level at the commencement of Blackout Event; provided, in no event will the Blackout Event Performance Factor exceed one (1). “PMax” means the maximum operating power level (expressed in kW) of the Storage Facility measured at the Delivery Point.
3. Seller shall provide to Buyer and Site Host a web-based customer portal with read-only access to a forecast, updated no less frequently than once per day, of an hourly forecast of the Facility Energy and Storage Capacity availability for the following day.
4. Seller shall use commercially reasonable efforts to implement Site Host’s input into the manner in which Seller provides the Emergency Energy Services.
Agenda Page 487
Schedule 4 – 1
SCHEDULE 4
BILL OPTIMIZATION SERVICES
1. Seller shall give first priority to operating the Facility to maintain at all times the ability to provide the Emergency Energy Services, and Seller shall give second priority to operating the Facility to maximize the amount of cost savings associated with the Site Host’s monthly bill from the Utility Provider (including the portion(s) of such bills attributable to charges related to Buyer’s services, products and programs) (the “Bill Optimization Services”). Bill Optimization Services shall consist of the following:
(a) Demand Charge Reduction. Delivery of Facility Energy during predicted Site Load peaks to reduce the Site Load and associated demand charges assessed by the Utility Provider;
(b) Time of Use Shifting. Operation of the Facility to maximize delivery of Facility Energy during periods when the retail electricity $/kWh rates applicable to the Site Host are the highest; and
(c) Net Energy Metering. Operation of the Facility to maximize the cost savings derived from the Site Host’s participation in any net energy metering program available.
2. Minimum Guaranteed Cost Savings. Subject to any applicable Adjustments in accordance with Section 4 of this Schedule 4, in each Contract Year the total Cost Savings from the Bill Optimization Services provided in such Contract Year shall not be less than the following amounts (the “Minimum Guaranteed Cost Savings”):
Term Year: Estimated Annual Savings
1 2
3 4
5 6
7 8
Agenda Page 488
Schedule 4 - 2
9 10
11 12
13 14
15 16
17 18
19 20
3. Calculation of Cost Savings: For each Billing Period, Seller shall calculate the difference (the “Cost Savings”) between (a) the electrical energy costs and demand charges that would have been charged by the Utility Provider if the Facility had not been in operation during such Billing Period, and (b) the actual electrical energy costs (net of any net metering or other similar credits or benefits accruing to Site Host as a result of the operation of the Facility) and demand charges. Cost Savings shall be calculated by Seller using data from the Facility Meter, the Utility Provider retail meters with respect to the Site Load, and/or the tariffed rates applicable to the Site Load. Buyer shall, as reasonably requested by Seller, provide (or reasonably cooperate with Seller to enable Seller to obtain) electrical energy use and cost information, demand charges, net energy metering credits and all other information relevant to the calculation of Cost Savings and other amounts under this Agreement.
4. Adjustments. To the extent Seller’s ability or cost to provide the Bill Optimization Services is affected by any of the following (collectively, the “Adjustment Events”), during some or all of a Contract Year, the Minimum Guaranteed Cost Savings (each, an “Adjustment”) shall be subject to a reasonable reduction in accordance with this Section 4 to maintain the balance of the bargain of this Agreement:
(a) A Disruption Period;
(b) A Force Majeure Event;
Agenda Page 489
Schedule 4 - 3
(c) Any material adverse change in the applicable Utility Provider tariff or rate structure, including but not limited to changes in the hours, rates, and calculation methodologies employed by the Utility Provider with respect to the Site Load; (d) Any material deviation in the characteristics of the Site Load compared to the actual Site Load electricity use data for the period between [start date of historical load data] and [end date of historical load data], not resulting from the Facility operations or Seller’s acts or omissions, including as a result of any onsite generation at the Site other than the Facility; (e) Any breach by Buyer of Section 3.1, 3.2 or 3.3 of this Agreement; (f) Any breach by Seller’s landlord of section 7.1(a) (Ingress & Egress), 7.1(b) (Access to Sunlight) that does not constitute Compensated Lost Energy, or Section 12.4(b) of the lease agreement with Seller;
(g) The occurrence of any Compensated Lost Energy; or
(h) A Blackout Event and/or preparing for a Blackout Event pursuant to Section 2 of Schedule 3 of this Special Conditions (for example, by not leaving the Storage Facility with sufficient stored Energy to reduce the peak site load and thus the demand charges in the applicable month).
The Parties shall work together in good faith to determine the amount of the Adjustment.
Seller shall provide Notice to Buyer of any Adjustment Event, including (x) the facts and circumstances giving rise to such Adjustment Event, (y) a statement of the amount of the Adjustment which Seller proposes, and (z) a detailed explanation of, and rationale for, its calculation methodology, annotated work papers and source data. If Buyer disagrees in good faith with such Adjustment amount as calculated by Seller, Buyer may provide Notice to Seller of such disagreement within forty-five (45) days after its receipt of such Notice from Seller. If Buyer does not dispute the proposed amount of such Adjustment within forty-five (45) days after its receipt of such Notice from Seller, Buyer will be deemed to have accepted such Adjustment. If the Parties after good-faith effort are unable to agree on the Adjustment amount within ten (10) Business Days after Seller receives Notice of Buyer’s disagreement with Seller’s proposed Adjustment amount, the Parties shall promptly refer the dispute to an independent expert reasonably agreed to by the Parties. The independent expert, acting as arbitrator, shall finally determine the technical matter at issue in accordance with the provisions of this Agreement and shall issue its written final decision to both Parties within thirty (30) days after the date on which the matter is submitted to it. The final decision of such independent expert shall be binding with respect to the Adjustment. The costs of the determination, including fees and expenses of the independent expert, shall be borne by the Party the independent expert deems is in the wrong. Any Adjustment pursuant to this Section 4 shall apply only to the Contract Year(s) in which such Adjustment Event is applicable.
5. Bill Optimization Services Review. Seller shall review the Bill Optimization Services strategies, assumptions and practices at least annually, and at any time upon Buyer’s reasonable request, to determine if adjustments are appropriate to improve the amount of Cost Savings. Seller shall not make material modifications to its Bill Optimization Services without
Agenda Page 490
Schedule 4 - 4
Buyer’s prior approval, which approval shall not be unreasonably withheld, conditioned or delayed.
Agenda Page 491
Schedule 5 – 1
SCHEDULE 5
MATERIAL PERMITS
No. Permits
1 N/A
2 N/A
Agenda Page 492
Schedule 6 – 1
SCHEDULE 6
BUYER TERMINATION PAYMENT AMOUNT
The Termination Payment shall be calculated in accordance with the following:
Early
Termination
Occurs in
Year:
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
Termination
Payment if Storage
Rate is per
kW-mo.
1* $3,210,921 $3,210,921 $3,842,431 $3,842,431
2 $3,063,064 $3,063,724 $3,630,099 $3,631,509
3 $2,787,810 $2,789,232 $3,259,981 $3,263,020
4 $2,508,801 $2,511,033 $2,883,092 $2,887,860
5 $2,225,795 $2,228,886 $2,499,001 $2,505,605
6 $1,938,531 $1,942,534 $2,107,251 $2,115,805
7 $1,875,368 $1,880,340 $1,986,031 $1,992,551
8 $1,807,381 $1,813,381 $1,958,766 $1,942,473
9 $1,734,260 $1,741,351 $1,927,951 $1,911,919
10 $1,655,674 $1,663,925 $1,893,704 $1,877,953
11 $1,571,274 $1,580,755 $1,855,736 $1,840,289
12 $1,480,168 $1,490,956 $1,813,591 $1,798,469
13 $1,396,078 $1,408,253 $1,780,507 $1,765,739
14 $1,292,142 $1,305,789 $1,729,908 $1,715,522
15 $1,180,763 $1,195,973 $1,674,213 $1,660,241
16 $1,134,761 $1,128,430 $1,613,340 $1,599,811
17 $1,091,183 $1,085,077 $1,546,181 $1,533,133
18 $1,043,027 $1,037,164 $1,472,556 $1,460,029
19 $989,911 $984,311 $1,391,935 $1,379,970
20 $982,395 $979,054 $1,304,017 $1,292,656
At the end of the Delivery Term, the Termination Payment amount shall be deemed to be zero (0). *Includes Early Termination prior to the Commercial Operation Date.
Agenda Page 493
Agenda Page 494
Agenda Page 495
Schedule 8 – 2
4. The table of Designated Circuits in Section 2 of Schedule 3 of the Special Conditions is replaced with the following:
Panel Circuit(s) Description
[TBD] [TBD] [TBD]
5. The table of Minimum Guaranteed Cost Savings in Section 2 of Schedule 4 of the Special Conditions is replaced with the following:
Term Year: Estimated Annual Savings
1 2
3 4
5 6
7 8
9 10
11 12
Agenda Page 496
Schedule 8 – 3
13 14
15 16
17 18
19 20
Agenda Page 497
Staff Report – Agenda Item 8
To: Board of Directors
From: John McNamara, Director, Structured Contracts
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Approve and Authorize Chief Executive Offer to Execute Energy Storage Agreements with ESCA-PLD-CPA1, LLC and Ranger
Energy Storage, LLC
Date: February 1, 2024
RECOMMENDATION
Approve and authorize the Chief Executive Officer to execute the following long-term Energy Storage Agreements:
A. 20-Year Energy Storage Agreement with ESCA-PLD-CPA1, LLC (Prologis Energy) for the 300 MW Drifter project
B. 15-Year Energy Storage Agreement with Ranger Energy Storage, LLC (esVolta) for the 60 MW Ranger project
BACKGROUND
2023 Clean Energy and Reliability RFO
CPA launched its 2023 Clean Energy and Reliability Request for Offers (RFO) on June 9, 2023, with bids due on July 19. The goal of the solicitation was to fill a larger portion of CPA’s portfolio needs with long-term contracts and to reduce the need to procure products such as Resource Adequacy (RA) and renewable energy in short-term markets, which are often volatile.
The RFO sought offers in five product categories:
1. Renewable Portfolio Standard (RPS) Generation Only
Agenda Page 498
Board of Directors Item 8
2. RPS Generation + Storage
3. Standalone Storage
4. Resource Adequacy (RA) Only
5. Natural Gas Tolls
CPA received a robust response to the RFO from 128 conforming offers. On September 18, 2023, a review team consisting of four Board members from the Energy Committee as well as senior staff consisting of the Chief Executive Officer, Chief Operating Officer, and Vice President, Power Supply met to analyze the submitted projects. These review team members evaluated confidential terms and conditions, including pricing, and selected a shortlist of projects to recommend to the Energy Committee. On September 27, 2023, the Energy Committee reviewed and approved the recommended shortlist, authorizing staff to proceed with power purchase agreement (PPA) negotiations. The Drifter and Ranger projects were on the shortlist that the Energy Committee approved.
Per CPA’s Energy Risk Management Policy, any new build power purchase transaction with greater than a 5-year term or 7-year maturity limit is required to be approved by the Board.
CPA retained Kevin Fox with Keyes and Fox and Todd Larsen with Clean Energy Counsel to represent CPA and its interests in the negotiation of the Energy Storage Agreements for the Drifter and Ranger projects, respectively. The work of Mr. Larsen and Mr. Fox was overseen by CPA’s General Counsel.
OVERVIEW OF PROJECTS
Project Technology Capacity
(MW) Online Date Term Developer
Drifter Four-hour Standalone
Storage 300 MW 6/1/2027 20 Prologis
Ranger Four-hour Standalone
Storage 60 MW 6/1/2026 15 esVolta
The projects are described in detail in the attached Project Description.
Agenda Page 499
Board of Directors Item 8
RATIONALE
The Drifter and Ranger projects will help CPA meet its long-term RA obligations and reduce its need to procure RA in unstable short-term markets.
To develop RA procurement targets in the 2023 Clean Energy RFO, staff estimated the volume of RA needed to have 90% of its RA portfolio under long-term contracts online by 2029. The resulting procurement targets are summarized in the table below. 2023 Clean Energy and Reliability RFO Resource Adequacy Procurement Targets
Procurement Year 2023 2024 2025 2026
COD Year 2026 2027 2028 2029
Procurement need
(MW) 400 400 400 400
Percent of RA
portfolio 75% 80% 85% 90%
The execution of these two agreements will provide 360 MW of RA MW between 2026 and 2027. Additional agreements providing RA are on the 2023 RFO shortlist. Staff may bring these additional agreements to the Board for approval in the future.
ENVIRONMENTAL REVIEW
The project developers of Drifter (Prologis) and Ranger (esVolta) are each responsible for acquiring necessary California Environmental Quality Act (CEQA) review and permits with relevant lead agencies. Drifter is working to secure the necessary permits and CEQA approval with the City of Moorpark. Ranger is working to secure the necessary permits and CEQA approval with the County of Los Angeles.
CPA has no role, jurisdiction, or authority whatsoever with respect to permit review or project approval for the Drifter and Ranger projects.
Agenda Page 500
Board of Directors Item 8
ATTACHMENTS
1) Project Description A: Drifter
2) Project Description B: Ranger
3) Energy Storage Agreement with Prologis (Drifter)
4) Energy Storage Agreement with esVolta (Ranger)
5) Energy Storage Agreements Presentation
Agenda Page 501
Board of Directors Item 8
PROJECT DESCRIPTION A: DRIFTER
Project Overview
Drifter Energy Storage is part of a larger light industrial development proposed for a parcel of land in the City of Moorpark next to a large SCE substation. The energy storage portion of the development is a 500 MW / 2,000 MWh, lithium-ion battery storage facility. The commercial operation date for the battery storage portion of the development is June 1, 2027.
Under the proposed agreement, CPA would contract for 300 MW of project’s 500 MW total capacity. CPA pays a fixed price per kW-month, with no escalation for the full term of the contract (20 years). CPA is entitled to all product attributes from the facility, including energy, ancillary services, and resource adequacy.
The project has completed its Phase 1 Interconnection Study and is seeking to acquire Full Capacity Deliverability Status (FCDS) from the California Independent System Operator (CAISO) in the 2024 allocation cycle. If the project does not obtain FCDS from CAISO, then either the project Seller or CPA may terminate the agreement without penalty to CPA.
Developer
Prologis is a global leader in logistics real estate with a 1 billion square foot worldwide portfolio. Prologis’ Global Energy team has developed over 400 MW of generating capacity across 12 countries and is developing a $200 million portfolio of front of the meter battery storage projects in Texas. CPA has 11 contracts for 11.89 MW of rooftop solar under development with Prologis as part of CPA’s Power Share program.
Evaluation Criteria
CPA ranks projects for economic value based on the net present value (NPV) to CPA and on a High, Medium, Neutral, and Low scale in five other evaluation criteria categories (Development Score, Workforce Development, Environmental Stewardship, Benefits to Disadvantaged Communities, and Project Location). Below is the ranking assigned to this
Agenda Page 502
Board of Directors Item 8
project in each of those categories.
Value
The Drifter offer fell within the first quartile (Q1) of offer submissions ranked by NPV in the RFO and was the eighth highest-ranked stand-alone energy storage offer.
Development Score
The project ranks Medium as it is in the early stage of development and Prologis is yet to obtain land use permits for the project. All land for the project is under contract and the project expects to execute its Interconnection Agreement in June 2024. Acquisition of a Conditional Use Permit is targeted for the second half of 2025.
Workforce Development
The project ranks High as construction for the project will use a Project Labor Agreement and Prologis has committed to prevailing wage and targeted hire commitments. It is estimated the project will create up to 100 new construction jobs and 6 new permanent jobs.
Environmental Stewardship
The project ranks Neutral as it is located on land that was previously utilized for agricultural purposes but does not provide additional societal, environmental, health, economic, or water saving benefits beyond the local air quality and greenhouse gas reduction benefits of charging during periods of low greenhouse gas intensity and Drifter
Agenda Page 503
Board of Directors Item 8
discharging during periods of high greenhouse gas intensity and high usage of natural gas peaker plant.
Benefits to Disadvantaged Communities
The project ranks Neutral as it is not located within a Disadvantaged Community (DAC) and does not demonstrate DAC benefits.
Project Location
The project ranks High because it is located within Ventura County.
Agenda Page 504
Board of Directors Item 8
PROJECT DESCRIPTION B: Ranger
Project Overview
Ranger is a proposed 60 MW / 240 MWh lithium-ion battery storage facility located in the unincorporated community of Castaic in Los Angeles County. The commercial operation date is June 1, 2026.
Under the proposed agreement, CPA pays a fixed price per kW-month, with no escalation for the full term of the contract (15 years). CPA is entitled to all product attributes from the facility, including energy, ancillary services, and resource adequacy.
The project has completed its Phase 1 Interconnection Study and is seeking to acquire Full Capacity Deliverability Status (FCDS) from the California Independent System Operator (CAISO) in the 2024 allocation cycle. If the project does not obtain FCDS from CAISO, then either the project Seller or CPA may terminate the agreement without penalty to CPA.
Developer
esVolta is an established developer with experience in developing, constructing, and operating utility-scale energy standalone storage projects across North America. esVolta currently has approximately 1,600 MW of utility-scale projects in its portfolio.
Evaluation Criteria
CPA ranks projects for economic value based on the net present value (NPV) to CPA and on a High, Medium, Neutral, and Low scale in five other evaluation criteria categories (Development Score, Workforce Development, Environmental Stewardship, Benefits to Disadvantaged Communities, and Project Location). Below is the ranking assigned to this project in each of those categories.
Value
The Ranger offer fell within the first quartile (Q1) of offer submissions ranked by NPV and was the ninth highest-ranked stand-alone energy storage offer in the RFO.
Agenda Page 505
Board of Directors Item 8
Development Score
The project ranks High as it is in late-stage development and substantially de-risked. All land for the project is under contract.
Workforce Development
The project ranks High as construction for the project will use a project labor agreement.
The developer estimates this project will create up to 38 new construction jobs.
Environmental Stewardship
The project ranks High as it will be constructed on already disturbed commercial land adjacent to a highway that was previously designated by the landowner for the construction of a gas station.
Benefits to Disadvantaged Communities
The project ranks Medium as it is not located within a Disadvantaged Community (DAC) but does intend to target nearby DACs when hiring.
Project Location
The project ranks High as it is located within Los Angeles County.
Ranger
Agenda Page 506
ENERGY STORAGE AGREEMENT
COVER SHEET
Seller: ESCA-PLD-CPA1, LLC
Buyer: Clean Power Alliance of Southern California, a California joint powers authority Description of Facility: A 300 MW / 1,200 MWh standalone lithium-ion battery storage project Milestones:
Milestone Expected Date for
Completion
Evidence of Site Control Complete
Documentation of Conditional Use Permit if required:
CEQA [ ] Cat Ex, [ ]Neg Dec, [ ]Mitigated Neg Dec,
[x]EIR
10/01/2025
Seller’s receipt of Phase I and Phase II Interconnection study results for Seller’s Interconnection Facilities 01/31/2024 Executed Interconnection Agreement
Financial Close
Expected Construction Start Date
Initial Synchronization 03/01/2027
Network Upgrades completed (evidenced by delivery of
permission to parallel letter from the Transmission
Provider)
02/01/2027
Expected Date of CAISO Commercial Operation 04/01/2027
Expected Commercial Operation Date 06/01/2027
Delivery Term: Twenty (20) Contract Years
Guaranteed Capacity: Three hundred (300) MW of Installed Capacity at four (4) hours of continuous discharge
Agenda Page 507
Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
Guaranteed Construction Start Date: September 1, 2026
Guaranteed Commercial Operation Date: June 1, 2027
Agenda Page 508
Storage Rate:
Contract Year Storage Rate
1 – 20 kW-mo. (flat)
with no escalation
Seller’s Assumed ITC: As of the Effective Date, Seller intends to qualify for and utilize the ITC at thirty percent (30%).
Product:
☒ Facility Energy
☒ Installed Capacity and Effective Capacity
☒ Ancillary Services
☒ Capacity Attributes
Anticipated Flexible Capacity: Amount: 300 MW
Scheduling Coordinator: Buyer
Security Amount:
Development Security: $105/kW of Guaranteed Capacity
Performance Security: $105/kW of Installed Capacity
Agenda Page 509
TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS ........................................................................................................ 1
1.1 Contract Definitions ............................................................................................... 1
1.2 Rules of Interpretation ......................................................................................... 20 ARTICLE 2 TERM; CONDITIONS PRECEDENT.................................................................. 21
2.1 Contract Term. ..................................................................................................... 21
2.2 Conditions Precedent ........................................................................................... 21
2.3 Development; Construction; Progress Reports .................................................... 22
2.4 Remedial Action Plan .......................................................................................... 23
2.5 Pre-Commercial Operation Actions ..................................................................... 23
2.6 Termination for Interconnection Costs/Delay ..................................................... 23 ARTICLE 3 PURCHASE AND SALE ...................................................................................... 24
3.1 Product ................................................................................................................. 24
3.2 Facility Energy ..................................................................................................... 25
3.3 Ancillary Services. ............................................................................................... 25
3.4 Capacity Attributes. ............................................................................................. 25
3.5 Resource Adequacy Failure. ................................................................................ 26
3.6 Compliance Expenditure Cap. ............................................................................. 26
3.7 Facility Configuration .......................................................................................... 27 ARTICLE 4 OBLIGATIONS AND DELIVERIES ................................................................... 27
4.1 Delivery................................................................................................................ 27
4.2 Station Use ........................................................................................................... 27
4.3 Performance Guarantees; Ancillary Services ...................................................... 28
4.4 Facility Testing. ................................................................................................... 29
4.5 Testing Costs and Revenues. ............................................................................... 30
4.6 Facility Operations. .............................................................................................. 30
4.7 Dispatch Notices .................................................................................................. 31
4.8 [Intentionally Omitted] ........................................................................................ 31
4.9 Energy Management. ........................................................................................... 31
4.10 Capacity Availability Notice. ............................................................................... 33
4.11 Outages. ............................................................................................................... 33 ARTICLE 5 TAXES, GOVERNMENTAL AND ENVIRONMENTAL COSTS .................... 35
5.1 Allocation of Taxes and Charges. ........................................................................ 35
5.2 Cooperation. ......................................................................................................... 35
5.3 Environmental Costs. ........................................................................................... 35 ARTICLE 6 MAINTENANCE AND REPAIR OF THE FACILITY ....................................... 36
6.1 Maintenance of the Facility. ................................................................................ 36
6.2 Maintenance of Health and Safety. ...................................................................... 36
6.3 Shared Facilities. .................................................................................................. 36 ARTICLE 7 METERING ........................................................................................................... 37
Agenda Page 510
ii
7.1 Metering. .............................................................................................................. 37
7.2 Meter Verification. ............................................................................................... 37 ARTICLE 8 INVOICING AND PAYMENT; CREDIT ............................................................ 38
8.1 Invoicing. ............................................................................................................. 38
8.2 Payment................................................................................................................ 38
8.3 Books and Records. ............................................................................................. 38
8.4 Payment Adjustments; Billing Errors. ................................................................. 38
8.5 Billing Disputes. .................................................................................................. 39
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 ................ 40 ARTICLE 9 NOTICES .............................................................................................................. 40
9.1 Addresses for the Delivery of Notices ................................................................. 40
9.2 Acceptable Means of Delivering Notice .............................................................. 41 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 ............... 47
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 ............................................................................................................. 48
11.9 Seller Pre COD Liability Limitation .................................................................... 48 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
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iii
14.1 General Prohibition on Assignments ................................................................... 52
14.2 Collateral Assignment .......................................................................................... 53
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. .............................................................................................. 53
15.3 Attorneys’ Fees. ................................................................................................... 54
15.4 Venue. .................................................................................................................. 54 ARTICLE 16 INDEMNIFICATION ......................................................................................... 54
16.1 Indemnification. ................................................................................................... 54
16.2 Claims. ................................................................................................................. 54 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 ............................................................................................ 58
19.1 Entire Agreement; Integration; Exhibits .............................................................. 58
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 ......................................................................................................... 59
19.8 Electronic Delivery .............................................................................................. 59
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 Service Contract ................................................................................................... 60
19.14 Further Assurances............................................................................................... 60
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iv
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 [Reserved.]
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
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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, 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 is entering into the Agreement with the intention that the Facility’s NQC will be counted 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); 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.
Notwithstanding the foregoing, the term “Affiliate,” when used with respect to Seller shall not include any direct or indirect tax equity investor.
“Agreement” has the meaning set forth in the Preamble and includes the Cover Sheet and any Exhibits, schedules and any written supplements hereto.
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2 “Ancillary Services” means ancillary services that the that the Facility is capable of providing consistent with the Operating Restrictions, including spinning reserve, non-spinning reserve, regulation up, and regulation down, as each is defined in the CAISO Tariff, and any additional Ancillary Services added in accordance with Section 3.3. “Annual Capacity Availability” has the meaning set forth in Exhibit P. “Anticipated Flexible Capacity” means the amount and category of Flexible Capacity identified on the Cover Sheet which Seller anticipates as of the Effective Date that the Facility will be qualified by the CAISO to provide to Buyer.
“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 quotient (expressed as a decimal) of (a) the Charging Energy after reaching 100% SOC or the first five (5) hours of the charging phase of the
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3 applicable Capacity Test, as applicable, divided by (b) the Installed Capacity x four (4) hours MWh, not to exceed one (1).
“Battery Discharging Factor” means the quotient (expressed as a decimal) of (a) the Facility Energy after the first four (4) hours of the discharging phase of the applicable Capacity Test, divided by (b) the Installed Capacity x four (4) hours MWh, not to exceed one (1). “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 a failure by Buyer or its agents to perform Buyer’s obligations hereunder and includes 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 meaning of “Commercial Operation” set forth 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-Penalized Shortfall” has the meaning set forth in Section 3.5(b)(iii). “CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC.
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4 “Calculation Interval” or “C.I.” 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 Attributes are measured in MW and shall exclude Energy, Green Attributes, and Incentives now or in the future associated with the construction, ownership or operation of the Facility.
“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 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 directly or indirectly providing financing or refinancing for the Facility or purchasing equity ownerships interests of Seller or its Affiliates, any trustee or agent or similar representative acting on their behalf) or assignee or transferee thereof shall be excluded from the total outstanding equity interests in Seller.
“Charging Energy” means all Energy delivered to the Delivery Point pursuant to a Charging Notice, as measured by the Facility Meter.
“Charging Notice” means the operating instruction, and any subsequent updates, given by 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 and further provided that, if, during a period when the Facility is instructed by Buyer’s SC, CAISO, the PTO or any other Governmental Authority to be charging, such “Charging Notice” shall be deemed to be automatically adjusted to be equal to such
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5 instruction. 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 Section 2 of Exhibit B. “Commercial Operation” has the meaning set forth in Section 2 of 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. “Construction Start” has the meaning set forth in Section 1(a) of Exhibit B. “Construction Start Date” has the meaning set forth in Section 1(a) of 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.
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6 “CPM Adjustment Factor” means, for any RA Shortfall Month, the percentage for the corresponding calendar month set forth in Exhibit T.
“CPM Price” has the meaning set forth in Section 3.5(b)(i). “CPM Soft Offer Cap” has the meaning set forth in the CAISO Tariff. “CPUC” means the California Public Utilities Commission, or successor entity. “CPUC-Penalized Shortfall” has the meaning set forth in Section 3.5(b)(ii). “CPUC System RA Penalty” means the penalties for “System Procurement Deficiency” adopted by the CPUC in its Decision 10-06-036, as may be updated or supplemented from time to time.
“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, (ii) any warning of an anticipated System Emergency, or warning of an imminent condition or situation, which jeopardizes CAISO’s electric system integrity or the integrity of other systems to which CAISO is connected, or (iii) in response to an Energy oversupply or potential Energy oversupply, and Buyer or the SC for the Facility submitted a Self-Schedule for the MWhs curtailed during the relevant time period;
(b) a curtailment ordered by the Transmission Provider for reasons including, but not limited to, (i) any situation that affects normal function of the electric system including, but not limited to, any abnormal condition that requires action to prevent circumstances such as equipment damage, loss of load, or abnormal voltage conditions, or (ii) any warning, forecast or anticipation of conditions or situations that jeopardize the Transmission Provider’s electric system integrity or the integrity of other systems to which the Transmission Provider is connected; (c) a curtailment ordered by CAISO or the Transmission Provider due to a Transmission System Outage; or
(d) a curtailment in accordance with Seller’s obligations under its Interconnection Agreement with the Transmission Provider or distribution operator. “Daily Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) one hundred twenty (120).
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7 “Damage Payment” means the amount to be paid by the Defaulting Party to the Non-Defaulting Party after a Terminated Transaction, as applicable, 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. “Deemed Delivered RA” means the amount of Net Qualifying Capacity expressed in MW that the Facility would have delivered to the Delivery Point, but for (i) Buyer Default or (ii) a Force Majeure Event.
“Defaulting Party” has the meaning set forth in Section 11.1(a). “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 Section 4 of 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’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; provided, that if, during a period when the Facility is instructed by Buyer’s SC, CAISO, the PTO or any other Governmental Authority to be discharging, such “Discharging Notice” shall be deemed to be automatically adjusted to be equal to such instruction. “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 may be documented (either recorded by tape, electronically or in writing) without further notification to, or consent being required from, either Party with respect to such Party being recorded by the other, including by Buyer’s designated Scheduling Coordinator.
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8 “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 and adjusted for Electrical Losses to the Delivery Point) 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. “Efficiency Rate” means the rate calculated as the quotient of (a) the sum of (i) Facility Energy plus (ii) Idle Period Auxiliary Use for which Seller is required to reimburse Buyer, if applicable, divided by (b) Energy In, based on actual Facility operations for each applicable month. “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, and (b) between the Facility and the Delivery Point associated with delivery of Facility Energy. “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 electrical energy, measured in kilowatt-hours, megawatt-hours, or multiple units thereof.
“Energy In” means the total Energy (in MWh) delivered by Buyer to the Facility pursuant to a Charging Notice as measured at the Facility Meter (without adjusting for Electrical Losses or Station Use).
“Energy Management System” or “EMS” means the Facility’s energy management system.
“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,
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9 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 but excluding any such costs, charges and fees associated with Charging Energy. “Estimated Placed-In-Service Date” has the meaning set forth in Section 2.6. “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 required to deliver Product (but excluding any Interconnection Facilities (other than Seller’s Interconnection Facilities), Network Upgrades and 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 all Energy delivered to the Delivery Point from the Facility pursuant to a Discharging Notice, as measured by the Facility Meter, net of Electrical Losses and Station Use. 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 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. “FCDS Deficiency Notice” has the meaning set forth in Section 2.6. “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.
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10 “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 markets, settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term, and include the value of Green Attributes and Capacity Attributes.
“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(a). “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.
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11 “Guaranteed Efficiency Rate” means the minimum guaranteed Efficiency Rate of the Facility in each Contract Year of the Delivery Term, 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 any given Settlement Period or Settlement Interval, by which the amount of Facility Energy or Charging Energy deviates from the amount of Scheduled Energy.
“Incentives” means: (a) all federal, state, or local Tax credits or other Tax benefits associated with the construction, ownership, or production of electricity from the Facility (including credits under Sections 38, 45, 46 and 48 of the Internal Revenue Code of 1986, as amended); (b) any federal, state, or local grants, subsidies or other like benefits relating in any way to the Facility; and (c) any other form of incentive relating in any way to the Facility that is not a an environmental attribute.
“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).
“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 Delivery Point by the Facility Meter and adjusted for Electrical Losses to the Delivery Point, 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 the maximum instantaneous amount of Energy that is permitted to be delivered to the Delivery Point under Seller’s Interconnection Agreement, in the amount of five hundred (500) MW.
“Interconnection Delay Notice” has the meaning set forth in Section 2.6. “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.
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12 “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(b). “ITC” means the investment tax credit established pursuant to Section 48 of the United States Internal Revenue Code of 1986.
“Joint Powers Act” means the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.).
“Joint Powers Agreement” means that certain Joint Powers Agreement dated June 27, 2017, as amended from time to time, under which Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act.
“kW” means kilowatts in alternating current, unless expressly stated in terms of direct current.
“kWh” means a kilowatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“Law” means any applicable law, statute, rule, regulation, decision, writ, order, decree or judgment, permit or any interpretation thereof, promulgated or issued by a Governmental Authority.
“Lender” means, collectively, any Person (a) providing senior or subordinated construction, interim, back leverage or long-term debt, equity or tax equity, tax credit or cash equity financing or refinancing for or in connection with the development, construction, purchase, installation or operation of the Facility, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including tax equity), public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or 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.
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13 “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 Green Attributes, Incentives (calculated on an after-tax basis), and Capacity Attributes and the Parties agree that Seller’s lost revenue under this Agreement resulting from a Buyer Event of Default are direct damages and may be included in Seller’s determination of its Losses. “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.
“Milestones” means the significant permitting, interconnection, financing and construction milestones set forth on the Cover Sheet.
“Monthly Capacity Payment” means the payment required to be made by Buyer to Seller each month of the Delivery Term as compensation for the 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. “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.
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14 “NERC” means the North American Electric Reliability Corporation or any successor entity.
“Net Qualifying Capacity” or “NQC” 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 on the Cover Sheet.
“Permitted Transferee” means (i) any Affiliate of Seller or (ii) any entity that satisfies, or is controlled by another Person that satisfies, the following requirements:
(a) A tangible net worth of not less than one hundred fifty million dollars ($150,000,000) or a Credit Rating of at least BBB- from S&P, BBB- from Fitch, or Baa3 from Moody’s; and
(b) At least two (2) years of experience in the ownership and operations of energy storage facilities similar to the Facility, or has retained a third-party with such experience to operate the Facility.
“Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, 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.
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15 “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. “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 as calculated in accordance with Section 3.5(b). “RA Guarantee Date” means the Commercial Operation Date. “RA Plan” has the meaning set forth for “Resource Adequacy Plan” in the CAISO Tariff
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16 with respect to Buyer’s monthly or annual RA Compliance Showings. “RA Shortfall” means, for a given Showing Month, the difference, expressed in kW, of (a) the Facility’s Qualifying Capacity minus (b) the sum of (i) the portion of the Net Qualifying Capacity of the Facility for such month which is able to be shown on Buyer’s monthly or annual RA Plan to the CAISO and CPUC, plus (ii) Replacement RA provided by Seller with respect to an expected shortfall in Resource Adequacy Benefits of the Facility for such Showing Month, if applicable, plus (iii) Deemed Delivered RA for such month. “RA Shortfall Month” means, for purposes of calculating an RA Deficiency Amount under Section 3.5(b), any month shown on an RA Plan, commencing with the RA Plan for the Showing Month that includes the RA Guarantee Date (including any month during the period between the RA Guarantee Date and the first day of the first Showing Month for Buyer which actually includes the Facility’s Resource Adequacy Benefits or any Replacement RA, if applicable), for which there is an RA Shortfall.
“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. “Replacement RA” means resource adequacy benefits equivalent to Resource Adequacy Benefits (including satisfying the same Slice of Day and related characteristics) that would have been provided by the Facility with respect to the applicable month in which a RA Deficiency Amount is due to Buyer, that is connected to the CAISO Grid and is under the operational control of the CAISO, and, except as otherwise provided in this Agreement, 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, unless Buyer consents to accept Replacement RA from another facility that provides non-equivalent Resource Adequacy Benefits. “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.
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17 “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, 20-06- 031, 20-12-006, 21-06-029, 21-07-014, 22-03-034, 22-06-050, 22-12-028, 22-08-039, 23-04-010 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 standard 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 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. “Self-Schedule” has the meaning set forth in the CAISO Tariff. “Seller” has the meaning set forth on the Cover Sheet.
“Seller Initiated Test” has the meaning set forth in Section 4.4(c). “Seller Pre-COD Liability Cap” has the meaning set forth in Section 11.9. “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; provided that the Parties agree that Seller’s
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18 lost revenue under this Agreement and Incentives (calculated on an after-tax basis) resulting from a Buyer Event of Default may be included in the determination of Losses. “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.
An updated Site description provided by Seller pursuant to this definition shall be automatically incorporated as the new Exhibit A upon its receipt by Buyer unless Buyer’s approval is required, then it shall be incorporated automatically as the new Exhibit A upon Buyer’s approval. “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. The “SOC” shall represent the range of Stored Energy Level reserved exclusively for Buyer’s use; provided, Seller may represent such range anywhere within the actual available capability of the Facility. “SOD” or “Slice of Day” has the meaning set forth in the Resource Adequacy Rulings. “SP-15” means the Existing Zone Generation Trading Hub for Existing Zone region SP15 as set forth in the CAISO Tariff.
“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.
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19 “Storage Rate” has the meaning set forth on the Cover Sheet; provided, if the officer’s certificate provided by Seller pursuant to Section 2.2(i) states that the ITC rate for the Facility is higher than Seller’s assumed ITC rate as set forth on the Cover Sheet, the Storage Rate shall be reduced by per kW-mo. for each one (1) percentage point that the claimed ITC rate is above thirty percent (30%).
“Stored Energy Level” means, at a particular time, the amount of Energy in the Facility available to be discharged to the Delivery Point 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 (a) 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, or (b) a “System Emergency” or equivalent term, as defined by CAISO or the PTO. “Tax” or “Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Terminated Transaction” has the meaning set forth in Section 11.2(a). “Termination Payment” has the meaning set forth in Section 11.3(b). “Total YTD Calculation Intervals” has the meaning set forth in Exhibit P. “Transformer Failure” means failure of all or part of the main power transformer that results in the Facility being unable to generate and/or deliver Facility Energy during such failure, and such failure was not caused by Seller and could not have been avoided through the exercise of Prudent Operating Practice.
“Transmission Provider” means any entity that owns, operates and maintains transmission or distribution lines and associated facilities and/or has entitlements to use certain transmission or distribution lines and associated facilities for the purpose of transmitting or transporting the Facility Energy from the Delivery Point. “Transmission System” means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service downstream from the Delivery Point.
“Transmission System Outage” means an outage on the Transmission System, other than a System Emergency, that is not caused by Seller’s actions or inactions and that either prevents (i)
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20 Buyer or the CAISO (as applicable) from receiving Facility Energy onto the Transmission System or (ii) Seller from delivering Facility Energy to the Delivery Point. “Ultimate Parent” means Prologis, Inc., a Maryland corporation. “Unavailable Calculation Interval(s)” 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 of the Facility, 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;
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21 (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:
(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
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22 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 (or Seller’s Affiliate) 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;The Facility is providing Resource Adequacy Benefits for the month in which Delivery Term commences. (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;
(i) Seller has delivered to Buyer an officer’s certificate stating (i) that Seller has not utilized any equipment or resources in connection with the construction, commissioning or testing of the Facility in violation of Section 2.3(b), and (ii) the ITC rate which Seller claims will apply for the Facility; and
(j) Seller has paid Buyer for all amounts owing under this Agreement, if any, including Delay Damages.
2.3 Development; Construction; Progress Reports.
(a) Within fifteen (15) days after the close of (i) each calendar quarter from the first calendar quarter following the Effective Date until the Construction Start Date, and (ii) each calendar month from the first calendar month following the Construction Start Date until the Commercial Operation Date, Seller shall provide to Buyer a Progress Report and agree to regularly scheduled meetings between representatives of Buyer and Seller to review such reports and discuss Seller’s construction progress. The form of the Progress Report is set forth in Exhibit E. Seller shall also provide Buyer with any reasonably requested documentation (subject to confidentiality restrictions) directly related to the achievement of Milestones within ten (10) Business Days of 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.
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25 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.
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. The Facility will be designed to enable it to provide the Ancillary Services described in Part D of Exhibit Q.
Upon a request by Buyer, the Parties shall negotiate in good faith to modify the terms of this Agreement for the Facility to be able to provide Black Start (as defined in the CAISO Tariff) or any other Ancillary Services not listed in Exhibit Q, provided the Facility is capable of providing such additional Ancillary Service consistent with the Operating Restrictions and without Seller incurring more than de minimus additional administrative costs associated therewith.
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. (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 in the amount of the expected RA Shortfall with respect to such Showing Month, provided that 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
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26 RA Compliance Showing for such Showing Month. Unless Buyer is reselling Resource Adequacy Benefits from the Facility to a central procurement entity, Buyer will not include the Net Qualifying Capacity of the Facility in its Supply Plan as a Local Capacity Area Resource and in such event, Replacement RA delivered by Seller is not required to be described as a Local Capacity Area Resource.
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, as set forth in Section 3.5(b), as the sole remedy for the Capacity Attributes that Seller failed to convey to Buyer. (b) RA Deficiency Amount Calculation. The “RA Deficiency Amount” shall equal the sum of:
(i) The (i) the RA Shortfall, multiplied by (ii) the product of (X) the CPM Soft Offer Cap (or its successor), and (Y) the CPM Adjustment Factor applicable to such RA Shortfall Month (“CPM Price”), plus
(ii) For any portion of the RA Shortfall for which Buyer incurs a CPUC System RA Penalty (“CPUC-Penalized Shortfall”), Seller’s pro rata share of the amount of such CPUC System RA Penalty for such month actually incurred by Buyer (which shall be zero (0) if Buyer does not incur any CPUC System RA Penalty), plus
(iii) For any portion of the RA Shortfall for which Buyer incurs CAISO costs, charges or penalties associated with such shortfall (“CAISO-Penalized Shortfall”) Seller’s pro rata share of the amount of such CAISO costs, charges or penalties associated with the RA Shortfall for such month actually incurred by Buyer (which shall be zero (0) if Buyer does not incur any CAISO costs, charges or penalties associated with the RA Shortfall).
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 Delivery Term to comply with all of such obligations shall be capped at Twenty-Five Thousand Dollars ($25,000) per MW of Guaranteed Capacity (“Compliance Expenditure Cap”).
(a) Any actions required for Seller to comply with its obligations set forth in the first paragraph above, the cost of which will be included in the Compliance Expenditure Cap, shall be referred to collectively as the “Compliance Actions” provided Compliance Actions shall not include increasing the Storage Capacity beyond the Guaranteed Capacity prior to the Commercial Operation Date or the Installed Capacity on and after the Commercial Operation Date. (b) If Seller reasonably anticipates the need to incur out-of-pocket expenses in excess of the Compliance Expenditure Cap in order to take any Compliance Action, Seller shall provide Notice to Buyer of such anticipated out-of-pocket expenses.
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27 (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 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 retains all rights to the Facility and to use and dispose of Product before and after the Delivery Term. 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 by the Transmission Provider directly relating to the Facility’s operations. Except as otherwise set forth in this Agreement, Buyer shall be responsible for all costs, charges and penalties, if any, imposed in connection with: (a) the delivery of Charging Energy to the Delivery Point (including the cost of the 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
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28 (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 shall not be deemed a violation of this Agreement, including Sections 4.9(c), (d), and (f), and (iv) Seller shall procure Energy necessary to serve all Idle Period Auxiliary Use through retail service established with the local utility. If any Energy provided by Buyer (i.e. originally delivered as Charging Energy) is used by Seller for Idle Period Auxiliary Use, then Seller shall (A) be solely responsible for (and shall reimburse Buyer, as applicable) any and all costs, penalties and charges resulting therefrom, (B) pay to Buyer an amount equal to the monthly average cost of Charging Energy times the total number of MWhs reasonably determined to have been used to serve Idle Period Auxiliary Load (including any amount of Charging Energy used to serve Idle Period Auxiliary Load that is lost to round-trip efficiency losses, if any), and (C) if such usage was inconsistent with any CAISO rules, other applicable Laws or any applicable utility tariff, shall take such actions as may be necessary to comply with such CAISO rules, other applicable Laws or applicable utility tariff).
4.3 Performance Guarantees; Ancillary Services.
(a) During the Delivery Term, the Facility shall maintain an Annual Capacity Availability during each Contract Year of no less than ninety-eight percent (98%) (the “Guaranteed Capacity Availability”), which Annual Capacity Availability shall be calculated in accordance with Exhibit P.
(b) During the Delivery Term, the Facility shall maintain an Efficiency Rate of no less than Guaranteed Efficiency Rate. The Guaranteed Capacity Availability and Guaranteed Efficiency Rate are collectively the “Performance Guarantees”. (c) Buyer’s exclusive remedies for Seller’s failure to achieve the Performance Guarantees are (i) the Monthly Capacity Payment adjustment and/or Capacity Availability Payment True-Up, as applicable, as set forth in Exhibit C, and (ii) in the case of a Seller Event of Default as set forth in Section 11.1(b)(iii) with respect to the Guaranteed Capacity Availability, the applicable remedies set forth in Article 11.
(d) Seller shall operate and maintain the Facility throughout the Delivery Term so as to be able to provide the Ancillary Services in accordance with the specifications set forth in the Facility’s CAISO Certification associated with the Effective Capacity and consistent with the Operating Restrictions (subject to any changes required by Law or CAISO requirements). To the extent the Facility is unable to provide Ancillary Services for any reason not excused hereunder during any Calculation Interval that is not otherwise deemed an Unavailable Calculation Interval (including by reason of failing an Ancillary Services certification test), then as exclusive remedies the Availability Storage Capability for such Calculation Interval shall be deemed reduced for purposes of calculating the YTD Annual Capacity Availability to the extent of such inability or failure multiplied by fifty percent (50%), and Seller shall reimburse Buyer for any CAISO charges or penalties arising from the failure to provide such Ancillary Services. (e) Upon Buyer’s reasonable request, Seller shall submit the Facility for additional CAISO Certification so that the Facility may provide additional Ancillary Services that the Facility is, at the relevant time, actually physically capable of providing consistent with the definition of Ancillary Services herein and consistent with the Operating Restrictions, provided
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29 that Buyer has agreed to reimburse Seller for any material costs Seller incurs in connection with conducting such additional CAISO Certification.
4.4 Facility Testing.
(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. Buyer shall (i) comply with all Seller health and safety policies and procedures and instructions while present at the Site, and (ii) shall conduct itself in a manner that will not unreasonably interfere with the operation of the Facility or other activities of Seller and its subcontractors on the Site. Buyer acknowledges that it will be escorted at all times while on the Site.
(ii) Following each Capacity Test, Seller shall submit a testing report in accordance with Exhibit O. If the actual capacity determined pursuant to a Capacity Test varies from the then-current Effective Capacity, as applicable, then the actual capacity determined pursuant to such Capacity Test shall become the new Effective Capacity, at the beginning of the day following the completion of the test for all purposes under this Agreement. (iii) It is acknowledged that Seller shall have the right and option in its sole discretion to install Facility capacity in excess of the Guaranteed Capacity; provided, for all purposes of this Agreement the amount of Installed Capacity and Effective Storage Capacity shall never be deemed to exceed the Guaranteed Capacity, and (for the avoidance of doubt) (A) Buyer shall have no rights to instruct Seller to charge or discharge the Facility at an instantaneous rate (in MW) in excess of the lesser of the Guaranteed Capacity, the Installed Capacity or the Effective Storage Capacity, (B) Buyer shall have no obligation to dispatch such excess capacity on behalf of Seller, or to make payment to Seller for such excess capacity, and (C) for purposes of calculating the Guaranteed Capacity Availability of the Facility, the unavailability of such excess capacity will not be considered in such calculations.
(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
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30 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 Storage Facility (or any portion thereof, as applicable) unavailable shall be excluded for purposes of calculating the Annual Storage Capacity Availability. The Facility will be deemed unavailable during any Seller Initiated Test, and Buyer shall not dispatch or otherwise schedule the Facility during such Seller Initiated Test.
4.5 Testing Costs and Revenues.
(a) For all Buyer Dispatched Tests, Buyer shall direct only Charging Energy to be used to charge the Facility and Buyer 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 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(b) shall be provided to Buyer within fifteen (15) days of Buyer’s request.
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31 (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.
4.7 Dispatch Notices. Buyer shall have the right to dispatch the Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Dispatch Notices, subject to the requirements and limitations set forth in this Agreement, including the Operating Restrictions and the CAISO Tariff. Subject to 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.
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 deliver the Charging Energy from the Delivery Point to the Facility in order to deliver the Storage Product in accordance with the terms of this Agreement, including maintenance, repair or replacement of equipment in Seller’s possession or control used to deliver the Charging Energy from the 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 will 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 the requirements and limitations set forth in this Agreement, including compliance with the Operating Restrictions and the CAISO Tariff. Each Charging Notice issued in accordance with this Agreement will be effective unless and until 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 the Transmission Provider or 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 such Energy and entitled to all of the CAISO revenues and other benefits (including Product) associated with such discharge.
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32 (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 Storage 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, including compliance with the Operating Restrictions and the CAISO Tariff. 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 or as expressly addressed in Section 4.9(f), 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 procedures shall 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’s SC, and Seller shall have no liability for violation of this Section 4.9 or any Charging Notices or Discharging Notice if and to the extent such violation is caused by Seller’s compliance with any CAISO Dispatch. To the extent the Facility is unable to respond to ADS signals during any Calculation Interval, then as an exclusive remedy, such Calculation Interval shall be deemed an Unavailable Calculation Interval for purposes of calculating the YTD Annual Storage Capacity Availability. (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 shall have exclusive rights to charge and discharge the Facility (provided, Seller shall only charge and discharge the Facility in connection with installation, commissioning and testing of 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.
(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 if and to the extent such
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33 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 consistent with the operational procedures.
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) immediately 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 Outage. Seller may propose changes to any previously Planned Outage 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
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34 Outage and estimated time of return of the Facility as soon as practicable after the condition causing the change becomes known to Seller. Buyer cannot issue Charging Notices or Discharging Notices to the extent inconsistent with the Planned Outages of the Facility. (ii) If (i) reasonably required in accordance with Prudent Operating Practices, (ii) such outage is required to avoid damage to the Facility, (iii) such maintenance is necessary to maintain equipment warranties and cannot be scheduled outside the months of June through October, or (iv) the Parties agree otherwise in writing, 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) 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.Notice of Unplanned Outages Seller shall notify Buyer by telephoning Buyer’s Scheduling Coordinator no later than ten (10) minutes following knowledge of 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 request that Seller inspect the Facility during such Unplanned Outage and Buyer may be present at such inspection and Buyer may inspect 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 (i) comply with all Seller health and safety policies and procedures and instructions while present at the Site, and (ii) shall conduct itself in a manner that will not unreasonably interfere with the operation of the Facility or other activities of Seller and its subcontractors on the Site. Buyer acknowledges that it will be escorted at all times while on the Site.
(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.
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36 ARTICLE 6
MAINTENANCE AND REPAIR OF THE FACILITY
6.1 Maintenance of the Facility.
(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 use commercially reasonable efforts to 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 may be subject to joint ownership and shared maintenance and operation arrangements; provided, such agreements shall (i) permit Seller to perform or satisfy, and shall not purport to limit, its obligations hereunder, including maintaining Shared Facility capacity equal to the Interconnection Capacity Limit for Buyer’s sole use, (ii) provide for separate metering of the Facility, (iii) provide that any other generating or energy storage facilities not included in the Facility but using Shared Facilities shall not be included within the Facility’s CAISO Resource ID, and (iv) provide that in the event of any curtailment that is not specific to one or more CAISO Resource IDs of output from generating or energy storage facilities using the Shared Facilities shall not be allocated to the Facility more than its pro rata portion of the total capacity of all generating or energy storage facilities using the Shared Facilities. Seller shall not, and shall not permit any Affiliate to, allocate to other parties a share of the total interconnection capacity under the Interconnection Agreements in excess of an amount equal to the total interconnection capacity under the Interconnection Agreements minus the Interconnection Capacity Limit.
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37 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 Idle Period Auxiliary Use. The Facility Meter will be 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 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.
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38 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 to the extent available and other 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, Facility Energy, Station Use, Idle Period Auxiliary Use for which Seller owes reimbursement to Buyer, Energy In, and Replacement RA delivered to Buyer (if any) and (ii) data showing a calculation of the Monthly Capacity Payment and other relevant data for the prior month; and (b) be in a format reasonably specified by Buyer, covering the Product provided in the preceding month determined in accordance with the applicable provisions of this Agreement. Buyer shall, and shall cause its Scheduling Coordinator to, provide Seller with all reasonable access (including, in real time, to the maximum extent reasonably possible) to any records, including invoices or settlement data from the CAISO, forecast data and other information, all as may be necessary from time to time for Seller to prepare and verify the accuracy of all invoices.
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 ten thousand dollars ($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
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39 otherwise disputed under Section 8.5 or an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO, or there is determined to have been a meter inaccuracy sufficient to require a payment adjustment. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.2, accruing from the date on which the adjusted amount should have been due.
8.5 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned via adjustments in accordance with Section 8.4. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.5 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.
8.6 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other under this Agreement 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 in the amount set forth in the Cover Sheet within thirty (30) days after the Effective Date. Seller shall maintain the Development Security in full force and effect. 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 in the amount set forth in the Cover Sheet 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
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40 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, and indemnification payments or other damages, in each case of a determined amount, 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 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 and continuation 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 to the extent of damages or other amounts owed by Seller to Buyer hereunder.
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
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42 component or compliance costs for any reason, including foreign or domestic tariffs, Buyer’s ability to buy Product at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under this Agreement); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above; (iv) a Curtailment Order unless caused by a Force Majeure Event; (v) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Facility, including the lack of wind, sun or other fuel source of an inherently intermittent nature, except to the extent such inability is caused by a Force Majeure Event; (vi) a strike, work stoppage or labor dispute limited only to any one or more of Seller, Seller’s Affiliates, Seller’s contractors, their subcontractors thereof or any other third party employed by Seller to work on the Facility; (vii) any equipment failure except if such equipment failure is caused by a Force Majeure Event; or (viii) any action or inaction by any third party, including Transmission Provider, that delays or prevents the approval, construction or placement in service of any Interconnection Facilities or Network Upgrades, except to the extent caused by a Force Majeure Event.
10.2 No Liability If a Force Majeure Event Occurs. Except as provided in Section 4 of Exhibit B, neither Seller nor Buyer shall be liable to the other Party in the event it is prevented from performing its obligations hereunder in whole or in part due to a Force Majeure Event. The Party rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take reasonable actions necessary to remove such inability with due speed and diligence. Nothing herein shall be construed as permitting that Party to continue to fail to perform after said cause has been removed. The obligation to use due speed and diligence shall not be interpreted to require resolution of labor disputes by acceding to demands of the opposition when such course is inadvisable in the discretion of the Party having such difficulty. Neither Party shall be considered in breach or default of this Agreement if and to the extent that any failure or delay in the Party’s performance of one or more of its obligations hereunder is caused by a Force Majeure Event. The occurrence and continuation of a Force Majeure Event shall not suspend or excuse the obligation of a Party to make any payments due hereunder.
10.3 Notice. In order to claim a Force Majeure Event, the claiming Party, within fourteen (14) days after 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
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43 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 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.
(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, and (B) 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 such failure 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); (iv) such Party becomes Bankrupt;
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44 (v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Article 14, if applicable; or (vi) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party; (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
(i) if at any time, Seller delivers or attempts to deliver Energy to the Delivery Point for sale under this Agreement that was not discharged by the Facility; (ii) the failure by Seller to (A) achieve Construction Start on or before the Guaranteed Construction Start Date as such date may be extended by Seller’s payment of Daily Delay Damages pursuant to Section 1(b) of Exhibit B and/or a Development Cure Period pursuant to Section 4 of Exhibit B, or (B) achieve Commercial Operation on or before the Guaranteed Commercial Operation Date, as such date may be extended by Seller’s payment of Commercial Operation Delay Damages pursuant to Section 2 of Exhibit B and/or a Development Cure Period pursuant to Section 4 of Exhibit B;
(iii) if, in any Contract Year, the year-to-date Annual Capacity Availability multiplied by the Effective Capacity for the applicable period is not equal to at least seventy percent (70%) multiplied by the Installed Capacity, and Seller fails to (x) deliver to Buyer within ten (10) Business Days after Notice from Buyer a plan or report developed by Seller that describes the cause of the failure to meet such seventy percent (70%) multiplied by the Installed Capacity threshold, and the actions that Seller has taken, is taking, or proposes to take in an effort to cure such condition along with the written confirmation of a Licensed Professional Engineer that such plan or report is in accordance with Prudent Operating Practices and capable of cure within a reasonable period of time, not to exceed (A) one hundred eighty (180) days (“Cure Plan”) or (B) if such failure is caused by a Transformer Failure that cannot be cured pursuant to a Cure Plan within one hundred eighty (180) days, not to exceed three hundred sixty-five (365) days, so long as Seller commences a Cure Plan within such one hundred eighty (180) day period and thereafter diligently pursues such Cure Plan to completion, and (y) complete such Cure Plan in all material respects as set forth therein, including within the applicable timeframe set forth therein; (iv) failure by Seller to satisfy the collateral requirements pursuant to Sections 8.7 or 8.8 within ten (10) Business Days after Notice from Buyer, including the failure to replenish the Performance Security amount in accordance with this Agreement in the event Buyer draws against it for any reason other than to satisfy a Termination Payment; (v) with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer either (1) cash, or (2) a Letter of Credit from a different issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in
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45 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; (d) to suspend performance; and
(e) to exercise any other right or remedy available at law or in equity, including specific performance or injunctive relief, except to the extent such remedies are expressly limited under this Agreement;
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48 Damage Payment, as applicable, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the Termination Payment or Damage Payment, as applicable, shall be determined in accordance with Article 15.
11.6 Limitation on Seller’s Ability to Make or Agree to Third-Party Sales from the Facility after Early Termination Date. If the Agreement is terminated prior to the Commercial Operation Date for any reason except due to Buyer’s Event of Default or pursuant to Section 2.6(d), neither Seller nor Seller’s Affiliates may sell, market or deliver any Product associated with or attributable to the Facility to a party other than Buyer for a period of two (2) years following the date of such early termination, unless prior to selling, marketing or delivering such Product, or entering into the agreement to sell, market or deliver such Product to a party other than Buyer, Seller or Seller’s Affiliates provide Buyer with a written offer to sell the Product on terms and conditions materially similar to the terms and conditions contained in this Agreement (including price, except that Seller will be permitted to adjust the price to account for documented and reasonable costs and lost or changed Incentives resulting from a Force Majeure Event), and Buyer fails to accept such offer within forty-five (45) days of Buyer’s receipt thereof.
Neither Seller nor Seller’s Affiliates may sell or transfer the Facility, or any part thereof, or land rights or interests in the Site (including the interconnection queue position of the Facility) for the purpose of developing and operating a storage facility at the Site so long as the limitations contained in this Section 11.6 apply, unless the transferee agrees to be bound by the terms set forth in this Section 11.6 pursuant to a written agreement approved by Buyer in its reasonable discretion.
For the avoidance of Doubt, Seller shall be permitted to sell or transfer the land rights or interests in the Site for any other reason without any restriction hereunder.
Seller shall indemnify and hold Buyer harmless from all benefits lost and other damages sustained by Buyer as a result of any breach by Seller of its covenants contained within this Section 11.6.
11.7 Rights And Remedies Are Cumulative. Except where liquidated damages or other remedy are explicitly provided as the exclusive remedy, the rights and remedies of a Party pursuant to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
11.8 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.
11.9 Seller Pre COD Liability Limitation. Notwithstanding anything in this Agreement to the contrary, unless and until the Facility has achieved Commercial Operation, Seller’s aggregate liability under this Agreement for any and all reasons, including liability for payment of Daily Delay Damages, Commercial Operation Delay Damages and the Damage Payment, shall not exceed three hundred percent (300%) of the amount of the Development Security (“Seller Pre-COD Liability Cap”).
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49 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 INCENTIVES, DETERMINED ON AN AFTER-TAX BASIS, LOST DUE TO BUYER’S DEFAULT (WHICH SELLER HAS NOT BEEN ABLE TO MITIGATE AFTER
USE OF COMMERCIALLY REASONABLE EFFORTS) AND AMOUNTS DUE IN
CONNECTION WITH THE RECAPTURE OF ANY INCENTIVES, IF ANY, DETERMINED ON AN AFTER-TAX BASIS, SHALL BE DEEMED TO BE DIRECT DAMAGES.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 3.5, 11.2 AND 11.3, AND AS 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
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50 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 Delaware limited liability company, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and is qualified to conduct business in each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller. (b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Seller’s performance under this Agreement. The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary limited liability company action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller. (c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) The Facility will be located in the State of California.
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51 (f) Neither Seller nor its Affiliates have received notice from or been advised by any existing or potential supplier or service provider that COVID-19 has caused, or is reasonably likely to cause, a delay in the construction of the Facility or the delivery of materials necessary to complete the Facility, in each case that would cause the Construction Start Date to be later than the Guaranteed Construction Start Date or the Commercial Operation Date to be later than the Guaranteed Commercial Operation Date.
13.2 Buyer’s Representations and Warranties. As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a joint powers authority and a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the state of California and the rules, regulations and orders of the California Public Utilities Commission, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All Persons making up the governing body of Buyer are the elected or appointed incumbents in their positions and hold their positions in good standing in accordance with the Joint Powers Agreement and other Law.
(b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, including but not limited to community choice aggregation, the Joint Powers Act, competitive bidding, public notice, open meetings, election, referendum, or prior appropriation requirements, the documents of formation of Buyer or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Buyer is a party or by which any of its property is bound.
(d) This Agreement has been duly executed and delivered by Buyer. This Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Buyer warrants and covenants that with respect to its contractual obligations under this Agreement, it will not claim and affirmatively waives 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.
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52 (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. Seller shall provide documentation reasonably satisfactory to Buyer demonstrating Seller’s compliance with the requirements of this Section 13.4.
ARTICLE 14
ASSIGNMENT
14.1 General Prohibition on Assignments. Except as provided below in this Article 14, neither Party may voluntarily assign this Agreement or its rights or obligations under this Agreement, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed. Any Change of Control of Seller (whether voluntary or by operation of law) will be deemed an assignment and will require the prior written consent of Buyer, which consent shall not be unreasonably withheld, conditioned or delayed; provided, a Change of Control of Seller shall not require Buyer’s consent if the assignee or transferee is a Permitted Transferee. Any assignment made without the required written consent, or in violation of the conditions to assignment set out below, shall be null and void. Seller shall be responsible for Buyer’s reasonable costs associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement by Seller, including without limitation reasonable attorneys’ fees.
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53 14.2 Collateral Assignment. Subject to the provisions of this Section 14.2, Seller has the right to assign this Agreement as collateral for any financing or refinancing of the Facility. In connection with any financing or refinancing of the Facility by Seller, Buyer shall in good faith work with Seller and Lender to execute a consent to collateral assignment of this Agreement substantially in the form attached hereto as Exhibit S (“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) in the case of (b) only, 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. 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 state of California, without regard to principles of conflicts of Law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. [STC – 17]
15.2 Dispute Resolution. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a Notice from either Party identifying such dispute,
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54 the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either forty-five (45) days of initiating such discussions, or within sixty (60) days after Notice of the dispute, either Party may seek any and all remedies available to it at law or in equity, subject to the limitations set forth in this Agreement.
15.3 Attorneys’ Fees. In any proceeding brought to enforce this Agreement or because of the breach by any Party of any covenant or condition herein contained, each Party shall bear its own respective costs, expenses and attorneys’ fees in connection with said action.
15.4 Venue. In the event of any legal action to enforce or interpret this Agreement, the sole and exclusive venue shall be a court of competent jurisdiction located in Los Angeles County, California, and the Parties hereto agree to and do hereby submit to the jurisdiction of such court, and waive any claim or defense that such forum is not convenient or proper.
ARTICLE 16
INDEMNIFICATION
16.1 Indemnification.
(a) Each Party (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless the other Party and its Affiliates, directors, officers, employees and agents (collectively, the “Indemnified Party”) from and against all third party claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees) (i) for personal injury or death to Persons and damage to the property of any third party to the extent arising out of, resulting from, or caused by the negligent or willful misconduct of the Indemnifying Party, its Affiliates, its directors, officers, employees, or agents, or (ii) for third-party claims resulting from the Indemnifying Party’s breach (including inaccuracy of any representation of warranty made hereunder), performance or non-performance of its obligations under this Agreement. (b) Seller shall indemnify, defend and hold harmless Buyer and its Affiliates, directors, officers, employees from and against all claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees) in connection with any claims of infringement upon or violation of any trade secret, trademark, trade name, copyright, patent, or other intellectual property rights of any third party by equipment, software, applications or programs (or any portion of same) used in connection with the Facility (an “IP Indemnity Claim”). (c) Nothing in this Section 16.1 shall enlarge or relieve Seller or Buyer of any liability to the other for any breach of this Agreement. Neither Party shall be indemnified for its damages resulting from its sole negligence, intentional acts or willful misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligation to pay claims consistent with the provisions of a valid insurance policy.
16.2 Claims. Promptly after receipt by a Party of any claim or Notice of the commencement of any action, administrative, or legal proceeding, or investigation as to which the indemnity provided for in this Article 16 may apply, the Indemnified Party shall notify the Indemnifying Party in writing of such fact. The Indemnifying Party shall assume the defense thereof with counsel designated by the Indemnifying Party and satisfactory to the Indemnified
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55 Party, provided, if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to, or inconsistent with, those available to the Indemnifying Party, the Indemnified Party shall have the right to select and be represented by separate counsel, at the Indemnifying Party’s expense, unless a liability insurer is willing to pay such costs. If the Indemnifying Party fails to assume the defense of a claim meriting indemnification, the Indemnified Party may at the expense of the Indemnifying Party contest, settle, or pay such claim; provided, settlement or full payment of any such claim may be made only following consent of the Indemnifying Party or, absent such consent, written opinion of the Indemnified Party’s counsel that such claim is meritorious or warrants settlement. Except as otherwise provided in this Article 16, in the event that a Party is obligated to indemnify and hold the other Party and its successors and assigns harmless under this Article 16, the amount owing to the Indemnified Party will be the amount of the Indemnified Party’s damages net of any insurance proceeds received by the Indemnified Party following a reasonable effort by the Indemnified Party to obtain such insurance proceeds.
ARTICLE 17
INSURANCE
17.1 Insurance.
(a) General Liability. 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 and personal injury insurance, in a minimum amount of One Million Dollars ($1,000,000) per occurrence, and an annual aggregate of not less than Two Million Dollars ($2,000,000), endorsed to provide contractual liability in said amount, specifically covering Seller’s obligations under this Agreement and including Buyer as an additional insured; and (ii) an umbrella insurance policy in a minimum limit of liability of Ten Million Dollars ($10,000,000).
Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest provisions.
(b) Employer’s Liability Insurance. Employers’ Liability insurance shall not be less than One Million Dollars ($1,000,000.00) for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the One Million Dollar ($1,000,000) policy limit will apply to each employee.
(c) Workers Compensation Insurance. Seller, if it has employees, shall also maintain at all times during the Contract Term workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of Law. (d) Business Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with 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.
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56 (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 of not less than the full replacement cost of the Facility on a per occurrence basis. (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.
(h) Subcontractor Insurance. Seller shall require all of its material subcontractors to carry: (i) comprehensive general liability insurance with a combined single limit of coverage not less than One Million Dollars ($1,000,000); (ii) workers’ compensation insurance and employers’ liability coverage in accordance with applicable requirements of Law; and (iii) business auto insurance for bodily injury and property damage with limits of one million dollars ($1,000,000) per occurrence. All subcontractors shall name Seller as an additional insured to insurance carried pursuant to clauses (h)(i) and (h)(iii). All subcontractors shall provide a primary endorsement and a waiver of subrogation to Seller for the required coverage pursuant to this Section 17.1(h).
(i) Evidence of Insurance. Within ten (10) days after execution of the Agreement and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such coverage. Such certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of any material modification, cancellation or termination of coverage. 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, its employees, agents and subcontractors 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, provide insurance in accordance with the terms and conditions above. With respect to the required general liability,
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57 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.
ARTICLE 18
CONFIDENTIAL INFORMATION
18.1 Definition of Confidential Information. The following constitutes “Confidential Information,” whether oral or written which is delivered by Seller to Buyer or by Buyer to Seller including: (a) the terms and conditions of, and proposals and negotiations related to, this Agreement, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement.
18.2 Duty to Maintain Confidentiality. The Party receiving Confidential Information (the “Receiving Party”) from the other Party (the “Disclosing Party”) shall not disclose Confidential Information to a third party (other than the Party’s employees, lenders, counsel, accountants, directors or advisors, or any such representatives of a Party’s Affiliates, who have a need to know such information and have agreed to keep such terms confidential) except in order to comply with any applicable Law, regulation, or any exchange, control area or independent system operator rule or in connection with any court or regulatory proceeding applicable to such Party or any of its Affiliates; provided, each Party shall, to the extent practicable, use reasonable efforts to prevent or limit the disclosure. The Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation. The Parties agree and acknowledge that nothing in this Section 18.2 prohibits a Party from disclosing any one or more of the commercial terms of a transaction (other than the name of the other Party unless otherwise agreed to in writing by the Parties) to any industry price source for the purpose of aggregating and reporting such information in the form of a published energy price index.
The Parties acknowledge and agree that the Agreement and any transactions entered into in connection herewith are subject to the requirements of the California Public Records Act (Government Code Section 6250 et seq.). In order to designate information as confidential, the Disclosing Party must clearly stamp and identify the specific portion of the material designated 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
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58 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, counsel, contractors, trustees, or actual or potential financing parties (including, in the case of Seller, its Lender(s) and potential Lender(s) that have a bona fide need to know), 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 or, with respect to counsel, is otherwise bound by a duty of confidentiality with respect to such Confidential Information.
18.5 Press Releases. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such public statement.
ARTICLE 19
MISCELLANEOUS
19.1 Entire Agreement; Integration; Exhibits. This Agreement, together with the Cover Sheet and Exhibits attached hereto constitutes the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. The headings used herein are for convenience and reference purposes only. In the event of a conflict between the provisions of this Agreement and those of the Cover Sheet or any Exhibit, the provisions of first the Cover Sheet, and then this Agreement shall prevail, and such Exhibit
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59 shall be corrected accordingly. This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof.
19.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, this Agreement may not be amended by electronic mail communications.
19.3 No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) and/or, to the extent set forth herein, any Lender and/or Indemnified Party.
19.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
19.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Changes proposed by a non-Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under applicable Law.
19.7 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
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.
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60 19.9 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
19.10 No Recourse to Members of Buyer. Buyer is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or the employees, directors, officers, consultants or advisors of Buyer or its constituent members, in connection with this Agreement.
19.11 Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a “forward contract” within the meaning of the U.S. Bankruptcy Code, and Buyer and Seller are “forward contract merchants” within the meaning of the U.S. Bankruptcy Code. Each Party further agrees that, for all purposes of this Agreement, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any Bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. §366 or another provision of 11 U.S.C. § 101-1532.
19.12 Change in Electric Market Design.. If a change in the CAISO Tariff renders this Agreement or any provisions hereof incapable of being performed or administered, then any Party may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to make this Agreement capable of being performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith. If Buyer and Seller are unable, within sixty (60) days after delivery of such request, to agree upon changes to this Agreement or to resolve issues relating to changes to this Agreement, then any Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Article 15. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, and (ii) all of the unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution.
19.13 Service Contract. The Parties intend this Agreement to be a “service contract” within the meaning of Section 7701(e) of the Internal Revenue Code of 1986, as amended.
19.14 Further Assurances. Each of the Parties hereto agrees to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement.
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61 [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.
ESCA-PLD-CPA1, LLC
By:
Name:
Title:
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA, a California
joint powers authority
By:
Name:
Title:
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Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Site Name: Drifter Energy Storage
Site includes all or some of the following APNs: 5110200275, 5110200155, 5110200145, 5110200130
City: Moorpark, CA
County: Ventura
Zip Code: 93021
Latitude and Longitude:
Facility Description: A 300 MW / 1,200 MWh standalone lithium-ion battery storage project, as represented in the site diagram below:
Delivery Point: SCE Moorpark substation 220 kV bus
Facility Meter: Refer to Exhibit R
PNode: To be determined
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2 Transmission Provider: Southern California Edison
Additional Information: N/A
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Exhibit B - 1
EXHIBIT B
FACILITY CONSTRUCTION AND COMMERCIAL OPERATION
1. Construction of the Facility.
(a) “Construction Start” will occur upon Seller’s acquisition of all applicable regulatory authorizations, approvals and permits for the construction of the Facility, and once Seller has engaged all contractors, and ordered all essential equipment and supplies as, in each case, can reasonably be considered necessary so that physical construction of the Facility may begin and proceed to completion without foreseeable interruption of material duration, and has executed an engineering, procurement, and construction contract and issued thereunder a final notice to proceed that authorizes the contractor to mobilize to Site and begin physical construction (including, at a minimum, excavation for foundations or the installation or erection of improvements) at the Site. The date of Construction Start will be evidenced by and subject to Seller’s delivery to Buyer of a certificate substantially in the form attached as Exhibit J hereto, and the date certified therein shall be the “Construction Start Date.” Seller shall cause Construction Start to occur no later than the Guaranteed Construction Start Date. (b) Seller may extend the Guaranteed Construction Start Date by paying Daily Delay Damages to Buyer for each day Seller desires to extend the Guaranteed Construction Start Date, not to exceed a total of one hundred twenty (120) days of extensions by such payment of Daily Delay Damages. On or before the date that is ten (10) days prior to the then-current Guaranteed Construction Start Date Seller shall provide notice and payment to Buyer of the Daily Delay Damages for the number of days of extension to the Guaranteed Construction Start Date. If Seller achieves Construction Start prior to the Guaranteed Construction Start Date, as extended by the payment of Daily Delay Damages, Buyer shall refund to Seller the Daily Delay Damages for each day Seller achieves Construction Start prior to the Guaranteed Construction Start Date times the Daily Delay Damages, not to exceed the total amount of Daily Delay Damages paid by Seller pursuant to this Section 1(b). Additionally, if Seller achieves Commercial Operation on or before the Guaranteed Commercial Operation Date (not including any extensions to such date resulting from Seller’s payment of Commercial Operation Delay Damages, but as may be extended pursuant to a Development Cure Period), then Buyer shall refund to Seller all Daily Delay Damages paid by Seller and not previously refunded by Buyer.
2. Commercial Operation of the Facility. “Commercial Operation” means the condition existing when Seller has fulfilled all of the conditions precedent in Section 2.2 of the Agreement and provided Notice to Buyer substantially in the form of Exhibit H (the “COD Certificate”).
(a) Seller shall cause Commercial Operation for the Facility to occur by the Guaranteed Commercial Operation Date. Seller shall notify Buyer that it intends to achieve
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Exhibit B - 2
Commercial Operation at least sixty (60) days before the anticipated Commercial Operation Date.
(b) Seller may extend the Guaranteed Commercial Operation Date by paying Commercial Operation Delay Damages to Buyer for each day Seller desires to extend the Guaranteed Commercial Operation Date, not to exceed a total of ninety (90) days of extensions by such payment of Commercial Operation Delay Damages. On or before the date that is ten (10) days prior to the then-current Guaranteed Commercial Operation Date Seller shall provide Notice and payment to Buyer of the Commercial Operation Delay Damages for the number of days of extension to the Guaranteed Commercial Operation Date. If Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date as extended by the payment of Commercial Operation Delay Damages, Buyer shall refund to Seller the Commercial Operation Delay Damages for each day Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date times the Commercial Operation Delay Damages, not to exceed the total amount of Commercial Operation Delay Damages paid by Seller pursuant to this Section 2(b).
3. Termination for Failure to Achieve Commercial Operation. If the Facility has not achieved Commercial Operation on or before the Guaranteed Commercial Operation Date (as may be extended hereunder), Buyer may elect to terminate this Agreement in accordance with Sections 11.1(b)(ii) and 11.2.
4. Extension of the Guaranteed Dates. The Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date shall, subject to notice and documentation requirements set forth below, be 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, (ii) such delays could not be mitigated by Seller using commercially reasonable efforts to overcome the delays, and (iii) such delays do not run concurrently:
(a) Seller has not acquired the Material Permits by the Guaranteed Construction Start Date, despite the exercise of diligent and commercially reasonable efforts by Seller; or
(b) a Force Majeure Event occurs; or
(c) the Interconnection Facilities or Reliability Network Upgrades are not complete and ready for the Facility to connect and sell Product at the Delivery Point by the Guaranteed Commercial Operation Date, despite the exercise of diligent and commercially reasonable efforts by Seller; or
(d) Buyer has not made all necessary arrangements to deliver Charging Energy to, and receive the Facility Energy at, the Delivery Point by the Guaranteed Commercial Operation Date.
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Exhibit B - 3
Seller shall submit any claim for Development Cure Period delays within (x) three (3) Business Days of the applicable milestone in the case of (a), (c) or (d) above, and (y) fourteen (14) days after 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 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 Five Hundred Thousand Dollars ($500,000) for each MW that the Guaranteed Capacity exceeds the Installed Capacity, and the Guaranteed Capacity and other applicable portions of the Agreement shall be adjusted accordingly. Capacity Damages shall not be offset or reduced by the payment of Development Security, Performance Security, Delay Damages, or any other form of liquidated damages under this Agreement.
Agenda Page 580
Exhibit C - 1
EXHIBIT C
COMPENSATION
(a) Monthly Compensation.
(i) 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 the Storage Rate x 1000 x Effective Capacity x Efficiency Rate Factor. 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. “Efficiency Rate Factor” means:
(A) If the Efficiency Rate is greater than or equal to the Guaranteed Efficiency Rate, then:
Efficiency Rate Factor = 100%
(B) If the Efficiency Rate is less than the Guaranteed Efficiency Rate, but greater than or equal to 75%, then:
Efficiency Rate Factor = 100% - [(Guaranteed Efficiency Rate – Efficiency Rate) x .5]
(C) If the Efficiency Rate is less than 75%, then:
Efficiency Rate Factor = 0
(ii) 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 (A) such YTD Annual Capacity Availability is less than ninety percent (90%), or (B) the final Annual Capacity Availability 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 this subsection (a)(ii) above, and if the final year-end Capacity Availability Payment True-Up Amount is a negative number, Buyer shall pay to Seller the positive value of such amount together with the next Monthly Capacity Payment due to Seller.
Agenda Page 581
Exhibit C - 2
“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 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 [(i) YTD Annual Capacity Availability plus (ii) Force Majeure Unavailability], times (iii) 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. (b) Tax Incentives. The Parties agree that the Storage Rate is not subject to adjustment or amendment if Seller fails to receive any Incentives, or if any Incentives expire, are repealed or otherwise cease to apply to Seller or the Facility in whole or in part, or Seller or its investors are unable to benefit from any Incentives. Seller shall bear all risks, financial and otherwise, throughout the Contract Term, associated with Seller’s or the Facility’s eligibility to receive Incentives or to qualify for accelerated depreciation for Seller’s accounting, reporting or Tax purposes except as otherwise expressly provided herein in the definitions of “Losses”, “Settlement Amount”, Sections 11.3 and 11.6 and Article 12. Seller shall have exclusive rights to all Incentive obligations of the Parties hereunder, including those obligations set forth herein regarding the
Agenda Page 582
Exhibit C - 3
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 Incentives during the Contract Term.
Agenda Page 583
Exhibit D - 1
EXHIBIT D
SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Buyer as Scheduling Coordinator for the Facility. Upon Initial Synchronization of the Facility to the CAISO Grid, Buyer shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility for both the delivery and the receipt of Charging Energy, Facility Energy and the Product at the Delivery Point. At least thirty (30) days prior to the Initial Synchronization of the Facility to the CAISO Grid, (i) Seller shall take all actions and execute and deliver to Buyer and the CAISO all documents necessary to authorize or designate Buyer (or Buyer’s designee) as the Scheduling Coordinator for the Facility effective as of the Initial Synchronization of the Facility to the CAISO Grid, and (ii) Buyer shall, and shall cause its designee to, take all actions and execute and deliver to Seller and the CAISO all documents necessary to authorize or designate Buyer or its designee as the Scheduling Coordinator for the Facility effective as of the Initial Synchronization of the Facility to the CAISO Grid. On and after Initial Synchronization of the Facility to the CAISO Grid, Seller shall not authorize or designate any other party to act as the Facility’s Scheduling Coordinator, nor shall Seller perform for its own benefit the duties of Scheduling Coordinator, and Seller shall not revoke Buyer’s authorization to act as the Facility’s Scheduling Coordinator unless agreed to by Buyer. Buyer (as the Facility’s SC) shall submit bids to the CAISO in accordance with this Agreement and the applicable CAISO Tariff, protocols and Scheduling practices for Product on a day-ahead, hour-ahead, fifteen-minute market, real time or other market basis that may develop after the Effective Date, as determined by Buyer. Buyer (or its SC) shall comply with all applicable CAISO Tariff requirements, procedures, protocols, rules and testing as applicable to Buyer as the Scheduling Coordinator for the Facility.
(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 Facility. In addition to any Buyer remedy related to overcharging of the Facility as set forth in Section 4.9(c), Seller shall be responsible for all CAISO costs and penalties (including associated with Imbalance Energy costs) resulting from (i) 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, any deviations from such CAISO Dispatch, (ii) charging or discharging the Facility when not subject to a Charging Notice or Discharging Notice, or (iii) any failure by Seller to abide by the CAISO Tariff, the terms of this Agreement or the
Agenda Page 584
Exhibit C - 2
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 in compliance with this Agreement and the CAISO Tariff). For the avoidance of doubt, any CAISO costs or penalties that are assessed (y) as a result of a change in the bidding or scheduling of the Facility between CAISO’s Day Ahead Market and CAISO’s fifteen minute or real-time market or (z) resulting from an infeasible CAISO dispatch instruction shall be Buyer’s responsibility. 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. 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. Buyer shall render a separate invoice to Seller for any CAISO payments, charges or penalties (“CAISO Charges Invoice”) for which Seller is responsible under this Agreement. CAISO Charges Invoices shall be rendered after settlement information becomes available from the CAISO that identifies any CAISO charges.
Notwithstanding the foregoing, Seller acknowledges that the CAISO will issue additional invoices reflecting CAISO adjustments to such CAISO charges. Buyer shall review, validate, and if requested by Seller under paragraph (e) below, dispute any charges that are the responsibility of Seller in a timely manner and consistent with Buyer’s existing settlement processes for charges that are Buyer’s responsibilities. Subject to Seller’s right to dispute and to have Buyer pursue the dispute of any such invoices, Seller shall pay the amount of CAISO Charges Invoices within ten (10) Business Days of Seller’s receipt of the CAISO Charges Invoice. If Seller fails to pay such CAISO Charges Invoice within that period, Buyer may net or offset any amounts owing to it for such CAISO Charges Invoices against any future amounts it may owe to Seller under this Agreement. The obligations under this Section with respect to payment of CAISO Charges Invoices shall survive the expiration or termination of this Agreement. (e) Dispute Costs. Buyer (as the Facility’s SC) may be required by Seller to dispute CAISO settlements in respect of the Facility. Seller agrees to pay Buyer’s costs and expenses (including reasonable attorneys’ fees) associated with its involvement with such CAISO disputes to the extent they relate to CAISO charges payable by Seller with respect to the Facility that Seller has directed Buyer to dispute.
(f) Terminating Buyer’s Designation as Scheduling Coordinator. At least thirty (30) days prior to expiration of this Agreement or as soon as reasonably practicable upon an earlier termination of this Agreement, the Parties will take all actions necessary to terminate the designation of Buyer as Scheduling Coordinator for the Facility as of 11:59 p.m. on such expiration date.
Agenda Page 585
Exhibit C - 3
(g) Master Data File and Resource Data Template. Seller shall provide the data to Buyer that is required for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement and Buyer (as SC) shall promptly provide such data to CAISO. Neither Party shall change such data without the other Party’s prior written consent. At least once per Contract Year, Seller shall review and confirm that the data provided for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for this Facility remains consistent with the actual operating characteristics of the Facility and provide information to Buyer for Buyer to update such data with CAISO as appropriate and Buyer (as SC) shall promptly provide any such updates to CAISO. (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 586
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 or month, as applicable.
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.
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Exhibit F - 1
EXHIBIT F-1
FORM OF MONTHLY EXPECTED AVAILABLE CAPACITY REPORT
[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 588
Exhibit C - 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 589
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 590
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 ESCA-PLD-CPA1, LLC (“Seller”) and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
As of _______[DATE]_____, Engineer hereby certifies and represents to Buyer the following:
1. The Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.
2. Seller has installed equipment for the Facility with an Installed Capacity of no less than ninety-five percent (95%) of the Guaranteed Capacity.
3. 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.
4. Authorization to parallel the Facility was obtained by the Transmission Provider, [Name of Transmission Provider as appropriate] on___[DATE]____.
5. The Transmission Provider has provided documentation supporting full unrestricted release of the Facility for Commercial Operation by [Name of Transmission Provider as appropriate] on _______[DATE]_____.
6. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff on _______[DATE]_____.
7. 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.
8. The Facility and its meters have been designed and installed in a manner such that all Energy used for Idle Period Auxiliary Use within the Facility is metered in conformance with the local utility’s requirements.
9. The total rated power of the Facility inverters associated with the Installed Capacity as measured to the Delivery Point is at least [____] MW charging and [____] MW discharging at 45°C ambient air temperature.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
Agenda Page 591
Exhibit H - 2
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Its:
Date:
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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 ESCA-PLD-CPA1, LLC (“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.
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 593
Exhibit J - 1
EXHIBIT J
FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of Construction Start Date (“Certification”) is delivered by ESCA-PLD-CPA1, LLC (“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 ________.
ESCA-PLD-CPA1, LLC
By:
Its:
Date:
Agenda Page 594
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., New York 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 New York, NY.
Funds under this Letter of Credit are available to Beneficiary by complying presentation on or before 5:00 p.m. New York time, on or before the Expiration Date of a copy of this Letter of Credit No. [XXXXXXX] and all amendments, if any, 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 (“Drawing Certificate”).
Any full or partial drawing hereunder may be requested by transmitting copies of the requisite documents as described above to the Issuer by courier or facsimile at [facsimile number for draws]
Agenda Page 595
or such other number as specified from time-to-time by the Issuer.
The facsimile transmittal shall be deemed delivered when received. Drawings made by facsimile transmittal are deemed to be the operative instrument without the need of originally signed documents.
Issuer hereby agrees that all presentations made under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Issuer on or before the Expiration Date.
All correspondence and any drawings (other than those made by facsimile) hereunder are to be directed to [Issuer address/contact]. Issuer undertakes to make payment to Beneficiary under this Standby Letter of Credit within three (3) business days of receipt by Issuer of a properly presented Drawing Certificate. The Beneficiary shall receive payment from Issuer by wire transfer to the bank account of the Beneficiary designated in the Drawing Certificate.
Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance; provided, the Available Amount shall be reduced by the amount of each such drawing.
It is a condition of this Letter of Credit that it shall be deemed automatically extended without an amendment for a one year period (or, if such period ends on a day that is not a Business Day, until the next Business Day thereafter) beginning on the present Expiration Date hereof and upon each anniversary for such date (or, if such period ends on a day that is not a Business Day, until the next Business Day thereafter), unless at least one hundred twenty (120) days prior to any such Expiration Date Issuer has sent Beneficiary written notice by overnight courier service at the address provided below that Issuer elects not to extend this Letter of Credit, in which case it will expire on its then current Expiration Date. No presentation made under this Letter of Credit after such Expiration Date will be honored.
Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements, this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.
Except so far as otherwise stated, this Letter of Credit is subject to the International Standby Practices ISP98 (also known as ICC Publication No. 590), or revision currently in effect (the “ISP”). As to matters not covered by the ISP, the laws of the State of California, without regard to the principles of conflicts of laws thereunder, shall govern all matters with respect to this Letter of Credit.
Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available.
All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: Clean Power Alliance of Southern California, a California joint powers authority, Chief Financial Officer, 801 S Grand, Suite 400, Los Angeles, CA 90017. Only notices to Beneficiary meeting the requirements of this paragraph shall be
Agenda Page 596
considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect.
[Bank Name]
___________________________
[Insert officer name]
[Insert officer title]
Agenda Page 597
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 598
Exhibit K - 5
EXHIBIT L
[RESERVED.]
Agenda Page 599
Exhibit M - 1
EXHIBIT M
FORM OF REPLACEMENT RA NOTICE
This Replacement RA Notice (this “Notice”) is delivered by ESCA-PLD-CPA1, LLC (“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 600
Exhibit M - 2
ESCA-PLD-CPA1, LLC
By:
Its:
Date:
Agenda Page 601
Exhibit N - 1
EXHIBIT N
NOTICES
ESCA-PLD-CPA1, LLC
(“Seller”)
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA, a California
joint powers authority (“Buyer”)
All Notices:
Street: 1800 Wazee Street, Suite 500
City: Denver CO 80202
Attn: Prologis Asset Management
Phone: 303-567-5034
Facsimile:
Email: [email protected]
All Notices:
Street: 801 S Grand, Suite 400
City: Los Angeles CA, 90017
Attn: Chief Executive Officer
Phone: (213) 269-5870
Email: [email protected]
Reference Numbers:
Duns:
Federal Tax ID Number:
Reference Numbers:
Duns:
Federal Tax ID Number:
Invoices:
Attn: Prologis Asset Management
Phone: 303-567-5034
Facsimile:
E-mail: [email protected]
Invoices:
Attn: Vice President, Power Supply
Phone: (213) 280-4011
E-mail: [email protected]
Scheduling:
Attn:
Phone:
Facsimile:
Email: [email protected]
Scheduling:
Attn: Operations 24/7 Desk
Phone: (817) 462-1509
Email: [email protected]
Confirmations:
Attn:
Phone:
Facsimile:
Email:
Confirmations:
Attn: Vice President, Power Supply
Phone: (213) 280-4011
Email: [email protected]
Email CC:
[email protected]
Payments:
Attn:
Phone:
Facsimile:
E-mail:
Payments:
Attn: Vice President, Power Supply
Phone: (213) 280-4011
E-mail: [email protected]
Wire Transfer:
BNK:
ABA:
ACCT:
Wire Transfer:
BNK: River City Bank
ABA: 121133416
ACCT:XXXXXX7557
Agenda Page 602
Exhibit N - 2
ESCA-PLD-CPA1, LLC
(“Seller”)
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA, a California
joint powers authority (“Buyer”)
All Notices:
Street: 1800 Wazee Street, Suite 500
City: Denver CO 80202
Attn: Prologis Asset Management
Phone: 303-567-5034
Facsimile:
Email: [email protected]
All Notices:
Street:
City:
Attn:
Phone:
Email:
Reference Numbers:
Duns:
Federal Tax ID Number:
Reference Numbers:
Duns:
Federal Tax ID Number:
Invoices:
Attn:
Phone:
Facsimile:
E-mail:
Invoices:
Attn:
Phone:
E-mail:
Agenda Page 603
Exhibit O - 1
EXHIBIT O
CAPACITY TESTS
Capacity Test Notice and Frequency
A. Commercial Operation Capacity Test(s). Upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall schedule and complete a Commercial Operation Capacity Test prior to the Commercial Operation Date. Such initial Commercial Operation Capacity Test (and any subsequent Commercial Operation Capacity Test permitted in accordance with Exhibit B) shall be performed in accordance with this Exhibit O and shall establish the Installed Capacity hereunder based on the actual capacity and capabilities of the Facility determined by such Commercial Operation Capacity Test(s).
B. Subsequent Capacity Tests. Following the Commercial Operation Capacity Test(s), at least fifteen (15) days in advance of the start of each Contract Year, upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall schedule and complete a Capacity Test. In addition, Buyer shall have the right to require a retest of the Capacity Test at any time upon no less than five (5) Business Days prior Notice to Seller if Buyer provides data with such Notice reasonably indicating that the then-current Effective Capacity has varied materially from the results of the most recent prior Capacity Test. Seller shall have the right to run a retest of any Capacity Test at any time upon five (5) Business Days’ prior Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practice).
C. Test Results and Re-Setting of Effective Capacity. No later than five (5) days following any Capacity Test, Seller shall submit a testing report detailing results and findings of the test. The report shall include Facility Meter readings and plant log sheets verifying the operating conditions and output of the Facility. In accordance with Section 4.4(a)(ii) of the Agreement and Part II(I) below, after the Commercial Operation Capacity Test(s), the Effective Capacity (up to, but not in excess of, the Installed Capacity) determined pursuant to such Capacity Test shall become the new Effective Capacity at the beginning of the day following the completion of the test for calculating the Monthly Capacity Payment and all other purposes under this Agreement.
Capacity Test Procedures
PART I. GENERAL.
A. Each Capacity Test shall be conducted in accordance with Prudent Operating Practices, the Operating Restrictions, and the provisions of this Exhibit O. For ease of reference, a Capacity Test is sometimes referred to in this Exhibit O as a “CT”.
Buyer or its representative may be present for the CT and may, for informational purposes only, use its own metering equipment (at Buyer’s sole cost).
B. Conditions Prior to Testing.
Agenda Page 604
Exhibit O - 2
(1) EMS Functionality. The EMS shall be successfully configured to receive data from the Battery Management System (BMS), exchange DNP3 data with the Buyer SCADA device, and transfer data to the database server for the calculation, recording and archiving of data points. (2) Communications. The Remote Terminal Unit (RTU) testing should be successfully completed prior to any testing. The interface between the RTU and the 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 resulting from such Test, if applicable, will be made in accordance with this Exhibit O. (1) Electrical output at the lesser of maximum discharging level (MW) and Guaranteed Storage Capacity 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 (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;
(4) The amount of Station Use;
(5) Stored Energy Level (MWh).
Agenda Page 605
Exhibit O - 3
C. Site Conditions. During each CT, the following conditions at the Site shall be measured and recorded simultaneously at thirty (30) minute intervals:
(1) Relative humidity (%);
(2) Barometric pressure (inches Hg) near the horizontal centerline of the Facility; and
(3) Ambient air temperature (°F).
D. Test Showing. Each CT shall record and report the following datapoints:
(1) That the CT successfully started;
(2) The maximum sustained discharging level for four (4) consecutive hours pursuant to A(1) above;
(3) The maximum sustained charging level for four (4) consecutive hours pursuant to A(2) above;
(4) Amount of time between the 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.
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.
(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
Agenda Page 606
Exhibit O - 4
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 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 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. The Effective Capacity shall be updated as
Agenda Page 607
Exhibit O - 5
follows:
(1) The total amount of Facility Energy delivered to the Delivery Point (expressed in MWh AC) during the first four (4) hours of discharge (up to, but not in excess of, the product of (i) (a) the Guaranteed 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.
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 (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 (5) hours of continuous charging. Such data point shall be used for purposes of calculation of the Battery Charging Factor. (5) Record and store the Charging Energy.
(6) Following an agreed-upon rest period, command a real power discharge that results in an AC power output of the lesser of (i) the Storage Facility’s maximum discharging level and (ii) the Guaranteed Storage Capacity, and maintain the discharging state until the earlier of (a) the Facility has discharged at the maximum discharging level for four (4) consecutive hours, (b) the Storage Facility has reached 0% SOC, or (c) the sustained discharging level is at least 2% less than the lesser of (i) the maximum discharging level and (ii) the Guaranteed Storage Capacity. (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)
Agenda Page 608
Exhibit O - 6
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 as measured at the Facility Meter. 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.
• 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.
• 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. (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.
• 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.
Agenda Page 609
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.
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 150 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.
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 -150 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 610
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 Interval(s)” 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, in MW, 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): (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 as the product of Unavailable
Calculation Interval = 1 C.I. x ( 1 – the lesser of:
A
or
B
Effective ) CapacityEffective
Capacity x 4 hrs
Agenda Page 611
Exhibit P - 2
(1) the count of available battery racks in such Calculation Interval, multiplied by (2) the capability, in MWh, expected from each such battery rack (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 Storage Facility for such Calculation Interval, such that Available Effective Capacity is calculated as the product of (A) the count of available system inverters, multiplied by (B) the capacity, in MW AC, expected from each system inverter under normal operating conditions pursuant to the manufacturer’s guidelines, and available Storage Capability is likewise calculated as the product of (C) the count of available battery racks, multiplied by (D) the capability, in MWh, expected from each battery rack under normal operating conditions pursuant to the manufacturer’s guidelines, and (ii) Seller’s most recent Availability Notice (as updated pursuant to Section 4.3), which, with respect to the Available Effective Capacity, shall be calculated as the average of the “Gen Max” and “Load Max” (or equivalent successor terms which may be used by the SC or CAISO from time to time) amounts reported in Seller’s Availability Notice and recorded in OMS for such Calculation Interval, and with respect to the Available Storage Capability, shall be calculated as “Max Energy” minus “Min Energy” (or equivalent successor terms which may be used by the SC or CAISO from time to time) amounts reported in Seller’s Availability Notice and recorded in OMS for such Calculation Interval and for which calculation the Battery Charging Factor and Batter Discharging Factor shall not be applied, provided that any such revised Availability Notice indicating an increase in the Storage Facility’s availability for the applicable Calculation Interval is submitted by Seller at least sixty (60) minutes prior to the time the Buyer is required to schedule or bid the Storage Facility in the Real-Time Market. Except as otherwise 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 Storage Facility to charge or discharge Energy between the Storage 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 Storage Facility fails to maintain connectivity to the CAISO such that it cannot receive ADS or AGC signals shall be deemed an Unavailable Calculation Interval.
(c) If the total rated power of the Facility inverters associated with the Installed Capacity as measured to the Delivery Point is less than 300 MW charging and 300 MW discharging at 45°C, then Buyer shall have the right, in its reasonable discretion, to apply an ambient air temperature availability derate to the applicable Calculation Interval.
Agenda Page 612
Agenda Page 613
Agenda Page 614
Exhibit R - 1
EXHIBIT R
METERING DIAGRAM
Agenda Page 615
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, 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 Renewable Power Purchase 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 Facility and sell the Product to CPA, and CPA will purchase the Product from Project Company;
B. As collateral for Project Company’s obligations under the 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] [[Name of Borrower, if not Project Company], a [Legal Status of Borrower] and an Affiliate of Project Company (“Borrower”)] has entered into that certain [Insert description of financing arrangements with Lender], dated as of [Date], among [Project Company] [Borrower], 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] [Borrower]; D. As collateral security for [Project Company] [Borrower]’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
Agenda Page 616
Exhibit S – 2
Parties hereto hereby agree as follows:
SECTION 1. CONSENT TO ASSIGNMENT, ETC.
1.1 Consent and Agreement.
CPA hereby acknowledges:
(a) Notice of and consents to the assignment as collateral security to Collateral Agent, for the benefit of the Secured Parties, of the Assigned Interest; and (b) The right (but not the obligation) of Collateral Agent in the exercise of its rights and remedies under the Financing Documents, to make all demands, give all notices, take all actions and exercise all rights of Project Company permitted under the 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 (“Default Notice”) and, if Collateral Agent sends a written notice (“Collateral Agent Cure Notice”) to Contracting Party within ten (10) days of Collateral Agent’s receipt of the Default Notice indicating Collateral Agent’s intention to cure, affords Collateral Agent or its successor(s), assignee(s), or designee(s) (each of whom shall be subject to the requirements of Section 1.4 of this Consent) 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 later to occur of (x) the Collateral Agent’s receipt of the notice of such ESA Default from CPA and (y) the expiration of the cure period available to the Project Company under the ESA, to cure such ESA Default; provided, (a) if possession of the Facility is necessary to cure any such non-monetary ESA Default and Collateral Agent has commenced foreclosure proceedings within sixty (60) days after the later to occur of (x) the Collateral Agent’s receipt of the notice of the ESA Default from CPA and (y) the expiration of the cure period available to the Project Company under the ESA and
Agenda Page 617
Exhibit S – 3
is diligently pursuing such foreclosure proceedings, Collateral Agent will be allowed a reasonable time, not to exceed one hundred eighty (180) days after the later to occur of (x) the Collateral Agent’s receipt of the notice of the ESA Default from CPA and (y) the expiration of the cure period available to the Project Company under the ESA, to complete such 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.
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 any Substitute Owner other than Collateral Agent, the Substitute Owner must have demonstrated to CPA’s reasonable satisfaction that the Substitute Owner has financial qualifications and operating experience a Permitted Transferee, as defined in the Agreement. 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.
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 Facility (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure) (Collateral Agent or such designee, a “Replacement Owner”), CPA shall, at the election of such Replacement Owner, enter into a new agreement with such Replacement Owner 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, unless the Replacement Owner is Collateral Agent, 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.
Agenda Page 618
Exhibit S – 4
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 Replacement ESA have been cured (other than any such ESA Defaults that are specific to the Project Company and not curable by the Replacement Owner).
1.6 Transfer.
Subject to Section 1.7, a Substitute Owner or a Replacement Owner may assign all of its interest in the Facility and the 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 Facility is transferred; provided, the proposed transferee is a Permitted Transferee.
1.7 Assumption of Obligations.
(a) Transferee.
Any transferee under Section 1.6 shall expressly execute and deliver to CPA a writing in which the transferee (i) expressly assume 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, (ii) expressly agrees to be bound by the terms of the ESA to the same extent the Project Company is thereunder, and (cc) agrees it is subject to CPA’s rights and defenses under the ESA and applicable law. Upon such assignment and the cure of any outstanding ESA Default except for any such ESA Default that is personal to the transferor and not curable by the transferee, 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
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Exhibit S – 5
sole recourse of CPA in seeking enforcement of such obligations against Collateral Agent shall be to the aggregate interest of the Secured Parties in the Facility; provided, such limited recourse shall not limit CPA’s right to seek equitable or injunctive relief against Collateral Agent, or CPA’s rights with respect to any offset rights expressly allowed under the ESA, a Replacement ESA or the ESA Collateral.
1.8 Delivery of Notices.
CPA shall deliver to Collateral Agent, concurrently with the delivery thereof to Project Company, a copy of each notice, request or demand given by CPA to Project Company pursuant to the ESA relating to (a) a ESA Default by Project Company under the ESA, (b) any claim regarding a Force Majeure Event 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 Facility is transferred pursuant to Section 1.6, CPA shall, until Collateral Agent confirms to CPA in writing that all obligations under the Financing Documents are no longer outstanding, deal exclusively with Collateral Agent in connection with the performance of CPA’s obligations under the 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.
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Exhibit S – 6
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 to the following account: [______], or to such other address or account as Collateral Agent may specify to CPA from time to time. CPA, Project Company, and Collateral Agent acknowledge that CPA will be deemed 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, has 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
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Exhibit S – 7
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 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.
This Consent is in full force and effect, has been duly executed and delivered on behalf of Project Company by the appropriate officers of Project Company, and constitutes the legal, valid and binding obligation of Project Company, enforceable against Project Company in accordance with its terms, except as the enforceability thereof may be limited by (a) bankruptcy, insolvency,
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Exhibit S – 8
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 under the PPA; (b) Project Company and, to Project Company’s actual knowledge, CPA, has complied with all conditions precedent to the effectiveness of its obligations under the 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. MISCEALLANEOUS
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
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Exhibit S – 9
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.
(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
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Exhibit S – 10
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 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.
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Exhibit S – 11
6.12 Counterparts; Electronic Signatures.
This Consent may be executed in one or more counterparts, each of which will be deemed to be an original of this Consent and all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this Consent and of signature pages by facsimile transmission, Portable Document Format (i.e., PDF), or by other electronic means shall constitute effective execution and delivery of this Consent as to the Parties and may be used in lieu of the original Consent for all purposes.
[Remainder of Page Left Intentionally Blank.]
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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 627
Exhibit S – 13
SCHEDULE A
[Describe any disclosures relevant to representations and warranties made in Section 3.4]
Agenda Page 628
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 629
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
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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.
3. Working Hours
Studies of business practices clearly link worker strain to reduced productivity, increased turnover, and increased injury and illness. Working hours are not to exceed the maximum set by local law. Further, a workweek should not be more than 60 hours per week, including overtime, except in emergency or unusual situations. All overtime must be voluntary.
Workers shall be allowed at least one day off every seven days.
4. Wages and Benefits
Compensation paid to workers shall comply with all applicable wage laws, including those relating to minimum wages, overtime hours and legally mandated benefits. In compliance with local laws, workers shall be compensated for overtime at pay rates greater than regular hourly rates. Deductions from wages as a disciplinary measure shall not be permitted. For each pay period, workers shall be provided with a timely and understandable wage statement that includes sufficient information to verify accurate compensation for work performed. All use of temporary, dispatch and outsourced labor will be within the limits of the local law.
5. Humane Treatment
There is to be no harsh or inhumane treatment including violence, gender-based violence, sexual harassment, sexual abuse, corporal punishment, mental or physical coercion, bullying, public shaming, or verbal abuse of workers; nor is there to be the threat of any such treatment. Disciplinary policies and procedures in support of these requirements shall be clearly defined and communicated to workers.
6. Non-Discrimination/Non-Harassment
Suppliers should be committed to a workplace free of harassment and unlawful discrimination. Companies shall not engage in discrimination or harassment based on race, color, age, gender, sexual orientation, gender identity and expression, ethnicity or national origin, disability, pregnancy, religion, political affiliation, union membership, covered veteran status, protected genetic information or marital status in hiring and employment practices such as wages, promotions, rewards, and access to training. Workers shall be provided with reasonable accommodation for religious practices. In addition, workers or potential workers should not be subjected to medical tests that could be used in a discriminatory way or otherwise in violation of applicable law. This was drafted in consideration of ILO Discrimination (Employment and Occupation) Convention (No.111).
7. Freedom of Association
In conformance with local law, Suppliers shall respect the right of all workers to form and join trade unions of their own choosing, to bargain collectively, and to engage in peaceful assembly as well as respect the right of workers to refrain from such activities. Workers and/or their representatives shall be able to openly communicate and share ideas and concerns with management regarding working conditions and management practices without fear of discrimination, reprisal, intimidation, or harassment.
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Exhibit U - 3
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 632
Exhibit V - 1
EXHIBIT V
MATERIAL PERMITS
No. Permits
1 City of Moorpark Development Agreement Amendment
2 City of Moorpark Conditional Use Permit
3 Caltrans Encroachment Permit
Agenda Page 633
Exhibit W - 1
EXHIBIT W
Force Majeure and/or Development Cure Period Claim Form Instructions
A. Please review Article 10 and Exhibit B (if applicable) of the Power Purchase Agreement prior to filling out the form.
B. Fill out the form completely and return to your assigned Contract Manager at CPA.
Seller: [Name] Project: [Name]
Current Guaranteed Construction Start Date: [Date]
New Guaranteed Construction Start Date (if Seller’s claims are validated in full): [Date] Guaranteed Commercial Operation Date: [Date]
New Guaranteed Commercial Operation Date (if Seller’s claims are validated in full): [Date]
1. Please describe the claimed Force Majeure Event or other event giving rise to the claimed Development Cure Period delay(s) (the “Claimed Event”), including its cause, date of commencement and date it ended or is anticipated to end.
2. Please specify the extent of the delay or prevented performance caused by the Claimed Event, including the relief claimed thereby. Describe how the claimed relief was calculated/determined, accounting for individual developments causing such delay or prevented performance.
3. With respect to a Claimed Event other than a Force Majeure Event, please describe the commercially reasonable efforts taken by Seller to prevent such event.
4. Please describe the commercially reasonable efforts taken to mitigate the delays or nonperformance caused by the Claimed Event and specify how such efforts reduced the delay days or nonperformance that would otherwise have occurred absent such mitigation.
Agenda Page 634
Exhibit W - 2
5. Please attach supporting documentation, including without limitation:
• Force Majeure notices or other correspondence received from suppliers and/or contractors that describe the basis for and extent of the Claimed Event. • Documentation, contracts, and/or correspondence with suppliers and/or contractors evidencing the claiming Party’s mitigation efforts.
• Project schedule and/or GANNT charts that demonstrate the effect of the Claimed Event on the Guaranteed commercial Operation Date.
By signing this Claim form, I attest and affirm that I am authorized to sign this form on behalf of the Seller, that I have reviewed this Claim, including any attached documentation, and that the facts and statements made in this Claim are true and correct to the best of my knowledge.
Signed:
Name:
Title:
Date:
Agenda Page 635
ENERGY STORAGE AGREEMENT
COVER SHEET
Seller: Ranger Energy Storage, LLC
Buyer: Clean Power Alliance of Southern California, a California joint powers authority Description of Facility: A 60 MW Battery Energy Storage Facility in Los Angeles County, California
Milestones:
Milestone Expected Date for
Completion
1. Evidence of Site Control Complete
2. Seller’s receipt of Phase I and Phase II Interconnection study results for Seller’s Interconnection Facilities
Phase I – Complete
Phase II – January
31, 2024
3. Executed Interconnection Agreement October 1, 2024
4. Financial Close February 1, 2025
5. Expected Construction Start Date
6. Initial Synchronization December 1, 2025
7. Network Upgrades completed (evidenced by delivery of permission to parallel letter from the Transmission Provider) March 1, 2026
8. Expected Date of CAISO Commercial Operation March 1, 2026
9. Expected Commercial Operation Date June 1, 2026
Delivery Term: Fifteen (15) Contract Years
Guaranteed Capacity: 60 MW of Installed Capacity at four (4) hours of continuous discharge Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
Agenda Page 636
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 Guaranteed Construction Start Date: February 1, 2025 Guaranteed Commercial Operation Date: June 1, 2026
Storage Rate:
Contract Year Storage Rate
1 – 15 /kW-mo. (flat)
with no escalation
Seller’s Assumed Tax Credits: As of the Effective Date, Seller intends to qualify for and utilize the ITC at thirty percent (30%).
Product:
☒ Facility Energy
☒ Installed Capacity and Effective Capacity
Agenda Page 637
☒ Ancillary Services
☒ Capacity Attributes
Anticipated Flexible Capacity: Amount: 60 (MW)
Scheduling Coordinator: Buyer
Security Amount:
Development Security: $105/kW of Guaranteed Capacity
Performance Security: $105/kW of Installed Capacity
Agenda Page 638
TABLE OF CONTENTS
i
ARTICLE 1 DEFINITIONS ........................................................................................................ 1
1.1 Contract Definitions............................................................................................... 1
1.2 Rules of Interpretation ......................................................................................... 19 ARTICLE 2 TERM; CONDITIONS PRECEDENT.................................................................. 20
2.1 Contract Term. ..................................................................................................... 20
2.2 Conditions Precedent ........................................................................................... 20
2.3 Development; Construction; Progress Reports .................................................... 21
2.4 Remedial Action Plan .......................................................................................... 22
2.5 Pre-Commercial Operation Actions ..................................................................... 22 ARTICLE 3 PURCHASE AND SALE ...................................................................................... 22
3.1 Product ................................................................................................................. 22
3.2 Facility Energy ..................................................................................................... 23
3.3 Ancillary Services ................................................................................................ 23
3.4 Capacity Attributes. ............................................................................................. 23
3.5 Resource Adequacy Failure. ................................................................................ 24
3.6 Compliance Expenditure Cap. ............................................................................. 24
3.7 Facility Configuration .......................................................................................... 25 ARTICLE 4 OBLIGATIONS AND DELIVERIES ................................................................... 25
4.1 Delivery................................................................................................................ 25
4.2 Station Use ........................................................................................................... 26
4.3 Performance Guarantees; Ancillary Services ...................................................... 26