Agenda packet — Clean Power Alliance Board of Directors, July 11, 2024 (part 1 of 3)

Board of Directors of the
Clean Power Alliance of Southern California
Regular Meeting
Thursday, July 11, 2024
2:00 p.m.

Visit CPA’s YouTube Channel to view a Live Stream of the Meeting www.youtube.com/@CPApublicmeetings
*There may be a streaming delay of up to 90 seconds. This is a view-only live stream.

Clean Power Alliance
Diana Mahmud Board Room
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Members of the public may also participate in this meeting at the following locations:

Calabasas City Hall
Council Conference Room
100 Civic Center Way
Calabasas, CA 91301
Ventura County Government Center
Point Mugu Conference Room, 4th Floor
Hall of Administration
800 South Victoria Avenue
Ventura, CA 93009
Whittier City Hall
Admin Conference Room
13230 Penn Street
Whittier, CA 90602
South Bay Cities Council of Governments
Conference Room
2355 Crenshaw Blvd., Suite 125
Torrance, CA 90501
PUBLIC COMMENT: Members of the public may submit their comments by one of the following options:
• Email Public Comment: Members of the public are encouraged to submit written comments on any agenda item to [email protected] up to four hours before the meeting. Written public comments will be announced at the meeting and become part of the meeting record. Public comments received in writing will not be read aloud at the meeting. • Provide Public Comment During the Meeting: The General Public Comment item is reserved for persons wishing to address the Board on any Clean Power Alliance-related matters not on today’s agenda. Public comments on matters on today’s Consent Agenda and Regular Agenda shall be heard at the time the matter is called. Comments on items on the Consent Agenda are consolidated into one public comment period. Members of the public who wish to address the Board at CPA’s Office are requested to complete a comment card and provide it to staff. If you are attending from a remote location, please identify yourself to a CPA representative when your item is called. Each speaker is limited to two (2) minutes (in whole-minute increments) per agenda item with a cumulative total of five 5 minutes to be allocated between the General Public Comment, the entire Consent Agenda, or individual items in the Regular Agenda. Please refer to Policy No. 8 – Public Comment for additional information.

Agenda Page 1
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CALL TO ORDER AND PLEDGE OF ALLEGIANCE

ROLL CALL

GENERAL PUBLIC COMMENT

CONSENT AGENDA

1. Approve Minutes from the June 6, 2024 Board of Directors Meeting

2. Adopt Resolution 24-07-068 to Approve the Proposed Amendments to the Energy Risk Management Policy

3. Authorize the Chief Executive Officer to Execute Task Order No. 1 with GDS Associates, Inc for 2024 Clean Energy and Reliability RFO Technical Evaluation and Ongoing Contract Related Support Services for a Not-to-Exceed (NTE) Amount of $150,000

4. Approve the following Special Assessments with the California Community Choice Association (“CalCCA”):

A. A Special Assessment for Regulatory Engagement in Southern California Edison’s (“SCE”) General Rate Case Phase II with:
i. Keyes & Fox LLP (“K&F”) with an NTE amount of $81,920 for an Initial Term of August 1, 2024 to December 31, 2025; and, ii. NewGen Strategies & Solutions LLP (“NewGen”) with an NTE Amount of $57,680 with an Initial Term of August 1, 2024 to December 31, 2025;
B. An Update to the Special Assessment for 2022 SCE Energy Resource Recovery Account (“ERRA”) Compliance and 2024 SCE ERRA Forecast Proceedings Reallocating $20,000 of NewGen’s total NTE to Keyes & Fox; There is No Change to the Overall Special Assessment Total and No Additional Payment Needed

5. Approve and Authorize the Chief Executive Officer to Execute the Following Amendments to Renewable Power Purchase Agreements (PPAs) for Local Rooftop Solar Projects for the Power Share Program:

Agenda Page 2
A. Amendment No. 1 to the Renewable PPA with Pivot Energy PPA 27 LLC (Beverly); and,
B. Amendment No. 1 to the Renewable Power Purchase Agreement with Pivot Energy PPA 28 LLC (San Gabriel)

6. Approve and Authorize the Chief Executive Officer to Execute Amendment No. 2 for an Increase of $1.709 Million to the Professional Service Agreement with Bloom Ads Global Media Group for Fiscal Year 2024/25 for a Total NTE Amount of $2,059,000 for Paid Media

7. Approve a Statement of Work with Mercer, Inc for a Compensation Study Refresh and Benefits Market Data Study with a Total NTE Amount of $148,000

8. Approve a Professional Services Agreement with TRC Engineers, Inc. for Software Data and Systems Strategic Planning Services with a Total NTE Amount of $241,990

9. Receive and File Bill Positions July 2024 Monthly Report

10.Receive and File Monthly Community Advisory Committee Report

REGULAR AGENDA
Action Items

11.A. Adopt Resolutions Nos. 24-07-069, 24-07-070, and 24-07-071 Approving Parameters Under which up to a Total of Three Energy Prepayment Transactions can be Completed with Either Goldman Sachs, Morgan Stanley, or Royal Bank of Canada as CPA’s Underwriter & Prepaid Supplier; Authorizing and/or Approving Documents or “Form of” Documents Supporting the Prepay Transactions; and Directing California Community Choice Financing Authority to make Payments to Service Providers for Issuance Costs from Prepay Bond Proceeds; and, B. Delegate Authority to the Chief Executive Officer to Select the Funding Recipient(s) for Prepay Transactions Completed with Either Goldman Sachs or Morgan Stanley

COMMITTEE CHAIR UPDATES
Director Cedric Hicks, Chair, Legislative & Regulatory Committee Director Susan Santangelo, Chair, Finance Committee
Director Robert Parkhurst, Chair, Energy Planning & Resources Committee

MANAGEMENT REPORT

BOARD MEMBER COMMENTS

REPORT FROM THE CHAIR
ADJOURN – NO MEETING AUGUST 2024. NEXT REGULAR MEETING SEPTEMBER 5, 2024.

Public Records: Public records that relate to any item on the open session agenda for a regular Board Meeting are available for public inspection. Those records that are distributed less than 72 hours prior to the meeting are available for public inspection at the Agenda Page 3
same time they are distributed to all, or a majority of, the members of the Board. Public records are available for inspection at CPA’s Office at 801 S. Grand Ave., Suite 400, Los Angeles, CA 90017, or online at www.cleanpoweralliance.org/agendas.

Agenda Page 4
Commonly Used Acronyms
BESS Battery Energy Storage System
CAC Community Advisory Committee
CAISO California Independent System Operator
CALCCA California Community Choice Association
CalEVIP California Electric Vehicle Incentive Program
CARB California Air Resources Board
CARE California Alternate Rates for Energy (Low Income Discount Rate) CCA Community Choice Aggregation
CEC California Energy Commission
CPUC California Public Utilities Commission
DA Direct Access (Private Retail Energy Supplier)
DAC Disadvantaged Community (As Defined by Calenviroscreen 3.0) DER Distributed Energy Resources
DR Demand Response
ERMP Energy Risk Management Policy
ERRA Energy Resource Recovery Account (SCE Generation Rate Setting)
ESA Energy Storage Agreement
EVSE Electric Vehicle Supply Equipment (EV Charger)
FERA Family Electric Rate Assistance (Low Income Discount Rate) GHG Greenhouse Gas
IOU Investor Owned Utility
IRP Integrated Resource Plan
JPA Joint Powers Authority
Agenda Page 5
Commonly Used Acronyms
Kwh Kilowatt-Hour (A Measure of Energy Used in A One-Hour Period) Kw Kilowatt = 1,000 Watts (Watt = A Measure of Instantaneous Power) LSE Load Serving Entity
MB Medical Baseline (Discount Rate for Medical Equipment Needs) MW Megawatt = 1,000 Kilowatts
Mwh Megawatt-Hour = 1,000 Kilowatt-Hours
NEM Net Energy Metering (Usually for Customers with Solar) OAT Other Applicable Tariffs
PCIA Power Charge Indifference Adjustment (Can Be Called “Exit Fee”) PCC1 Renewable Energy Generated Inside California
PCC2 Renewable Energy Generated Outside California
PCC3 A REC from A Renewable Resource, Delivered Without Energy PCL Power Content Label
POU Publicly Owned or Municipal Utility
PPA Power Purchase Agreement
PSPS Public Safety Power Shutoff
PV Photovoltaic (Solar) Panels
RA Resource Adequacy
REC Renewable Energy Credit
RPS Renewables Portfolio Standard
T&D Transmission and Distribution
TOU Time Of Use (Used to Refer to Rates that Differ by Time Of Day) WECC Western Electricity Coordinating Council
Agenda Page 6
Staff Report – Agenda Item 1
To: Board of Directors
Subject: Approve Minutes from the June 6, 2024 Board of Directors Meeting Date: July 11, 2024

RECOMMENDATION
Approve.

ATTACHMENT

1. Minutes
Agenda Page 7
Board of Directors Item 1

MINUTES
Board of Directors of the
Clean Power Alliance of Southern California
Regular Meeting
Thursday, June 6, 2024, 2:00 p.m.

Meeting videos are available on CPA's YouTube Channel.
http://www.youtube.com/@CPApublicmeetings
Clean Power Alliance
Diana Mahmud Board Room
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Board members participated from the following locations:

Calabasas City Hall
Council Conference Room
100 Civic Center Way
Calabasas, CA 91301
Ventura County Government Center
Channel Islands Conference Room, 4th Floor
Hall of Administration
800 South Victoria Avenue
Ventura, CA 93009
Whittier City Hall
Admin Conference Room
13230 Penn Street
Whittier, CA 90602
South Bay Cities Council of Governments
Conference Room
2355 Crenshaw Blvd., Suite 125
Torrance, CA 90501
Courtyard Roseville Galleria Mall/Creekside Ridge Drive Conference Room
301 Creekside Ridge Court
Roseville, California 95678

CALL TO ORDER & ROLL CALL
Vice Chair Horvath called the meeting to order at 2:00 p.m. and Gabriela Monzon, Clerk of the Board, conducted roll call.

PLEDGE OF ALLEGIANCE
Director Calaycay led the pledge of allegiance.

Roll Call
1 Agoura Hills Deborah Klein Lopez Chair Absent
2 Alhambra Jeff Maloney Director Present
3 Arcadia Michael Cao Director Present
4 Beverly Hills Julian Gold Director Present
5 Calabasas Ed Albrecht Alternate Remote
6 Camarillo Susan Santangelo Director Remote
7 Carson Absent
Agenda Page 8
Board of Directors Item 1
8 Claremont Corey Calaycay Director Present
9 Culver City Yasmin-Imani
McMorrin Director Present
10 Downey Absent
11 Hawaiian Gardens Absent
12 Hawthorne Alex Monteiro Director Present
13 Hermosa Beach Justin Massey Director Present
14 Los Angeles County Lindsey Horvath Vice Chair Present 15 Malibu Absent
16 Manhattan Beach Absent
17 Monrovia Absent
18 Moorpark Renee Delgado Director Remote
19 Ojai Betsy Stix Director Remote
20 Oxnard Bert Perello Director Remote
21 Paramount Absent
22 Redondo Beach Absent
23 Rolling Hills Estates Debby Stegura Director Remote
24 Santa Monica Absent
25 Santa Paula Jenny Crosswhite Director Present
26 Sierra Madre Robert Parkhurst Director Remote
27 Simi Valley Rocky Rhodes Director Present
28 South Pasadena Diana Mahmud Alternate Present
29 Temple City Ed Chen Director Present
30 Thousand Oaks David Newman Director Remote
31 City of Ventura Liz Campos Director Remote
32 Ventura County Vianey Lopez Vice Chair Remote
33 West Hollywood John Erickson Director Present
34 Westlake Village Absent
35 Whittier Absent
All votes are unanimous unless otherwise stated.

Agenda Page 9
Board of Directors Item 1

GENERAL PUBLIC COMMENT
There was no public comment.

CLOSED SESSION

1. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Section 54956.9: 2
Nancy Whang, General Counsel, reported that the Board of Directors voted unanimously to approve the following settlement agreements:

1.1 A settlement agreement between CPA and Desert Quartzite to resolve a dispute between the parties with respect to certain rights and obligations under the Power Purchase Agreement.

1.2 A settlement agreement between CPA and Arlington Energy Center to resolve a dispute between the parties with respect to the obligations related to the battery storage component; CPA agrees to a one-time payment of $4,310,188.

CONSENT AGENDA

2. Approve Minutes from the May 2, 2024 Board of Directors Meeting

3. Adopt Resolution No. 24-06-063 Authorizing and Approving the Opening of an Investment Account with US Bank National Association to Invest Funds in Securities Permitted under CPA’s Investment Policy

4. Approve and Authorize the Chief Executive Officer to Execute the Following Agreements:

A. A One-Year Professional Services Agreement for Fiscal Year 2024/2025 with School of Thought for a Not-to-Exceed Amount of $1.01 Million for Creative Services to Support Enrollment of CPA Programs, Develop Marketing Strategy, and Grow CPA’s Brand Awareness, with an Option for One Year Renewals, up to A Maximum of Two Additional Years After the Initial One-Year Term
B. A One-Year Professional Services Agreement for Fiscal Year 2024/2025 with Pastilla, Inc. for a Not-to-Exceed Amount of $365,000 for Web Development, Web Maintenance and As-Needed Creative Services, with an Option for One Year Renewals, up to A Maximum of Two Additional Years After the Initial One-Year Term

5. Receive and File Fiscal Year Q3 Financial Report

6. Receive and File Calendar Year Q1 Risk Management Team Report

7. Receive and File Calendar Year Q2 Communications Report

8. Receive and File Calendar Year Q2 Power Ready Report

9. Receive and File Bill Positions June 2024 Monthly Report

10. Receive and File Monthly Community Advisory Committee Report Motion: Director Erickson, West Hollywood
Second: Director Parkhurst, Sierra Madre
Vote: The consent agenda was approved by a roll call vote with an abstention from Director Massey as to Item 2.

REGULAR AGENDA

11. Adopt Resolution No. 24-06-064 to Approve New Rates for Phase 1 & 2 Non-Residential Customers, Resolution No. 24-06-065 to Approve New Rates for Phase 3 & 5 Residential Customers, Resolution No. 24-06-066 to Approve New Rates for Phase 4 & 5 Non-Residential Customers, and Resolution No. 24-06-067 to Approve New Rates for All Phase 6 Customers. These Resolutions will implement new CPA rates effective on July Agenda Page 10
Board of Directors Item 1
1, 2024, according to the Fiscal Year 2024/25 Rates Approach Adopted by the Board of Directors on May 2, 2024
Ted Bardacke, Chief Executive Officer, stated that the Board provided direction on a rate approach at its last Board meeting. Staff developed rates using the Medium Reserve scenario.

In response to Director Crosswhite’s inquiry about the impact of TOU rates for EV charging, staff responded that customers who elect to go on CPA’s new TOU rate option for EV charging will have incentives to charge during the day when solar is more available, but they will will also have the standard rate option that incentivizes charging overnight. Director Massey asked for a summary of the cost adjustments from last year; staff responded that the rates reflect the rising cost of renewable energy and the Board’s target for reserve levels.

Motion: Director Gold, Beverly Hills
Second: Director Mahmud, South Pasadena
Vote: Item 11 was approved by a roll call vote

12. Approve the Proposed Fiscal Year 2024/2025 Budget as Recommended by the Finance Committee
David McNeil, Chief Financial Officer, presented a timeline of the budget process and budget highlights. Mr. McNeil provided details on operating expenses, noting increases in staffing, communications, and customer programs. The cost of energy also increased by 12%, reflecting increased costs of Resource Adequacy and Renewable Energy. CPA compares favorably with other CCAs of similar size. Finance Committee Chair Santangelo noted that the Committee fully supports the proposed budget and praised staff for progressing toward reserve goals and the DLOH target.

Responding to Director Erickson’s question about stipends for CPA Board members, staff explained that when CPA was formed, there was some sensitivity around creating another body that generated pay for its Board members, and stipends were therefore not pursued. Director Mahmud added that in its formative years, CPA’s Board leadership felt it was important to have Board members who were committed to the mission of the organization rather than seeking out regional boards that offered stipends. Regarding Director Mahmud’s question about SCE’s debt collection efforts, Mr. McNeil noted that commercial customer payments have returned to normal. SCE has explored various ways of collecting from residential customers and has resumed limited collection efforts.

CPA will engage in collection efforts only after a customer account has been closed with SCE. Director Massey asked about driving factors for the cost of renewable energy and why CPA’s operating expenses appear to be higher than other CCAs. Staff projects that renewables costs will increase for the next two years and then decrease; at the same time, CPA’s long-term contracts will come online and reduce renewable energy costs.

Regarding operating expenses, staff noted that because CPA is bigger that other CCAs it will have higher operating expenses and therefore percentages of revenue provide a more accurate comparison.

Motion: Director Monteiro, Hawthorne
Second: Director Mahmud, South Pasadena
Vote: Item 12 was approved by a roll call vote
Agenda Page 11
Board of Directors Item 1

13. Approve and Authorize the Chief Executive Officer to Execute a Professional Services Agreement with CLEAResult Consulting, Inc. to Support the Energy Advisor Program by Providing Customer-Facing Electrification Support Services to Residential and Small Business Customers in a 3-Year Initial Term with a Not-to-Exceed Amount of $2,194,003, with an Option for One Year Renewals, up to a Maximum of Two Additional Years after the First Initial Term
Xico Manarolla, Electrification Program Manager, presented details on the proposed professional service agreement with CLEAResult Consulting, Inc., which will provide technical support to help residential and small business customers evaluate potential upgrades, apply for rebates, and find local contractors to complete projects. The Energy Advisor program aims to address barriers to electrification, maximize CPA customer access to regional, state, and federal incentives, and connect customers to other CPA programs. The program will also seek customer feedback to improve service. Mr.

Manarolla described the competitive RFP process and stated that the company has experience running energy advisor programs and offers trained call center staff.

Vice Chair Horvath asked how the program would apply to renters and suggested staff conduct outreach to small businesses and utilize community-based organizations to communicate programs and services. Staff clarified that renters must engage their property managers or owners to make upgrades; rebates are available for centralized and wall-unit AC systems. Director Mahmud inquired about the launch date and contractual numbers for customer engagement. Staff stated the program would launch in early September 2024; the contract can be revisited if customer engagement numbers are higher than projected. Director Monteiro suggested partnerships with local agencies like the South Coast Air Quality Management District to reach more bilingual and elderly customers. In response to Director Crosswhite’s question about the recommendation/vetting of contractors, staff clarified that customers will be directed to a state-funded contractor database that lists highly-rated contractors who have completed technical training. Director Maloney expressed support for the program and outreach to non-English speaking customers. Director Gold suggested that member agencies coordinate outreach efforts with CPA to avoid duplicative outreach; staff should also track program participation by customer categories to ensure resources are fairly distributed.

Director Massey asked about the customer’s ability to benchmark project costs and requested details on how staff will track contractual obligations related to customer engagement. Staff explained that the vendor would provide benchmarking to customers using its market data; staff added that the contract includes fixed costs and hourly charges for specific tasks relating to customer engagement and has the flexibility to ensure the vendor meets contractual requirements. Director Massey agreed with Directors Gold and Monteiro about collaborating with other local agencies involved in clean energy and EV charging.

In response to Director Newman’s questions about contractor recommendations, Joanne O’Neill, Director of Customer Programs, stated that the Energy Advisor program will act as an unbiased third-party entity providing resources, including licensed contractors.

Customers may choose their own contractors.

Motion: Director Erickson, West Hollywood
Second: Director Mahmud, South Pasadena
Vote: Item 13 was approved by a roll call vote

14. Approve and Authorize the Chief Executive Officer to Execute the following Long-Term Power Purchase Agreements: (A) 20-Year Power Purchase Agreement with Solar Star Agenda Page 12
Board of Directors Item 1
3, LLC for a 24 MW Solar and 23 MW Battery Energy Storage System; (B) 20-Year Power Purchase Agreement with Solar Star 4, LLC for a 24 MW Solar and 23 MW Battery Energy Storage System
Director Parkhurst commented that this is CPA’s first contract with a subsidiary of Berkshire Hathaway and that it was made possible because of CPA’s credit rating.

Motion: Director Mahmud, South Pasadena
Second: Director Erickson, West Hollywood
Vote: Item 14 was approved by a roll call vote.

COMMITTEE CHAIR UPDATES
Finance Committee Chair Santangelo reported that CPA is showing a strong finish in the 3rd Quarter, contributing $126 million to the net position. CPA opened an investment account with U.S. Bank to lock-in yields and protect against declining interest rates.

Energy Committee Chair Parkhurst reported that the deadline to file CPA’s annual IRP has been extended a year. The 2024 Clean Energy and Reliability RFO launching this month aims to reduce exposure to short-term market volatility and create a more blended portfolio that still needs baseload resources.

MANAGEMENT REPORT
Mr. Bardacke discussed the Board Retreat; CPA has met its 2024 Resource Adequacy compliance; CPA is responsible for just under 10% of the 9,000 new megawatts of capacity that has been added to the California grid by the end of June. CPA will also be able to add between 1,500 to 3,000 new low-income customers to its Power Share program because of the successful resource contracting for that program.

BOARD MEMBER COMMENTS
None.

REPORT FROM THE CHAIR
None.

ADJOURN
Vice Chair Horvath adjourned the meeting at 4:14 p.m.

Agenda Page 13
Staff Report – Agenda Item 2
To: Board of Directors
From: Lyon Hardgrave, Director, Energy Risk Management
Approved By: Ted Bardacke, Chief Executive Officer
David McNeil, Chief Financial Officer
Subject: Energy Risk Management Policy (ERMP) Amendments Date: July 11, 2024

RECOMMENDATION
Adopt Resolution No. 24-07-068 (Attachment 1) to approve proposed ERMP amendments (Attachment 2).

The Energy Resources and Planning Committee (“Energy Committee”) recommended approval of the proposed amendments at its June 26, 2024 meeting.

BACKGROUND
The ERMP governs the framework by which the Board, staff, and consultants conduct power procurement and related business activities for CPA. Nearly all Load Serving Entities have a similar governing document. CPA’s ERMP is based on industry best practices and includes a description of the major risks CPA faces and measures to mitigate those risks, acceptable business practices, authorized transaction types, segregation of duties and delegations of authority, counterparty credit risk management procedures, and CPA’s Energy Risk Hedging Strategy, which sets the minimum and maximum energy product volumes CPA will procure to meet its mission, risk management objectives, and regulatory requirements.1
1 CPA’s ERMP is also aligned with the guidance and standards described in the California Community Choice Association’s Model Practices Guide, particularly Section 9.

Agenda Page 14
Board of Directors Item 2
An overarching goal of the ERMP and associated hedging strategy is to prudently manage CPA’s power supply costs so that it can offer stable and competitive customer rates within a dynamic commodity market. As such, the ERMP evolves as CPA develops further operational experience, its energy portfolio grows, additional risks emerge, and/or new market and regulatory conditions unfold.

The ERMP establishes a staff-level Risk Management Team2 (RMT). Pursuant to Section 8 of the ERMP, the Chief Executive Officer (CEO), in consultation with the RMT, is required to review the ERMP and associated procedures on an annual basis to determine if they should be amended, supplemented, or updated to account for changing business conditions, regulatory requirements or to make other administrative revisions. If ERMP amendments are warranted, they are reviewed by the Energy Committee and submitted to the Board for approval.

Following extensive research by staff and consultation with the Board, the ERMP was adopted by the Board in July 2018. The Board subsequently approved amendments to the ERMP in July of 2019, 2020, 2021, 2022, and 2023 pursuant to the process described in Section 8.

This year’s proposed amendments to the ERMP appear as a redline to the current ERMP (Attachment 2). The Energy Committee reviewed the redlined document and discussed a presentation summarizing the amendments to ERMP at its June 26, 2024 meeting. The proposed amendments reflect the recommendations of staff and incorporate refinements suggested by the Energy Committee.
2 The ERMP specifies that the RMT is comprised of the CEO, CFO, COO, and Vice President, Power Supply. The RMT meets at least weekly.

Agenda Page 15
Board of Directors Item 2

SUMMARY OF PROPOSED ERMP AMENDMENTS
There are six proposed amendments to the ERMP.

1. An increase in maximum hedging limits in Q2 four years or more into the future to account for seasonal weather variability and CPA’s growing portfolio of long-term energy contracts

2. A change to the calculation of Resource Adequacy hedging targets to account for the transition in 2025 of California’s Resource Adequacy compliance regime from monthly compliance requirements to hourly compliance requirements (also known as “Slice-Of-Day”)

3. Clarification of what constitutes a “Material Change” to a long-term Power Purchase Agreement (and therefore requires Board approval) versus minor, non-core, or administrative changes (minor change) that are delegated to the CEO, along with a new requirement for those minor changes to be reported monthly to the Board.

4. Removal of duplicative quarterly financial reporting to the Board, where currently the same information is presented in the same month in both the Quarterly Risk Management report and the Quarterly Financial Report.

5. Clarifying which credit terms apply to Short-Term transaction versus Long-Term Transactions.

6. Addition of a new requirement that a minimum of three RMT members are required for an RMT decision to become effective.

Items 2-6 are generally administrative in nature. Item 1 is an interim measure that lessens the risk of ERMP policy deviations over the next 12 months while staff evaluates whether more extensive changes to long-term hedging targets are necessary as CPA seeks to further increase its long-term procurement of renewable energy and energy storage.

Below is a more detailed description of the proposed amendments and staff’s rationale for proposing them.

Agenda Page 16
Board of Directors Item 2

1. Raising the maximum hedge limits for transactions in Q2 for years four or more in the future from 70% to 90%
a. Summary of proposed amendments
The proposed amendment to Appendix B, Section 4.1.1 of the ERMP raises the maximum hedge limits for the second calendar quarter (“Q2”) of every year from 2027 from 70% to 90%.
b. Discussion
The need to raise Q2 hedge limits arises from CPA's continued efforts to enter into long-term contracts for renewable energy, aligning with its objective to reduce exposure to the short-term renewable energy market. Q2 (April, May, June) has lower levels of electricity consumption by CPA customers compared to the first, third and fourth quarters of the year. Renewable generation from solar energy is also high in Q2 due in part to a greater number of daylight hours in Q2 compared to Q1 and Q4. Seet the table below for CPA’s projected load by quarter beginning in 2027.

Agenda Page 17
Board of Directors Item 2
Due to this combination of low electricity consumption and high solar energy production, CPA’s hedge position in December 2023 began to exceed the current maximum hedge limits for future years four and beyond when CPA added new long-term power purchase agreements (particularly the large SunZia wind project) into its hedge position,3 as reflected in the following diagram.
3 This policy deviation has been reported to the Finance and Energy Committees on a monthly basis and to the Board in the Quarterly RMT report.

Agenda Page 18
Board of Directors Item 2
The proposed amendment will address the aforementioned policy deviation and allow CPA’s current purchases to remain within the maximum hedge limits for Q2 periods in 2027 and beyond as illustrated in the following diagram.

Agenda Page 19
Board of Directors Item 2
Nearly all of the Q2 hedge length in years 2027 and beyond is from long term renewable energy power purchase agreements (PPAs) and CPA has curtailed buying short-term hedges that far into the future for Q2. CPA enters into long term renewable energy PPAs consistent with Board-approved evaluation criteria and makes long-term contracting decisions based on a holistic assessment of PPA benefits and risks. Risks include hedging a higher percentage of load in Q2 four and more years into the future. The proposed Q2 90% level of hedging is in tension with CPA’s prorata or “dollar cost averaging” approach to hedging and, viewed in isolation, CPA could be at a competitive disadvantage to SCE as a result of these higher hedge levels were SCE to take advantage of falling Q2 energy prices to reduce its retail generation rates as the delivery period nears.

However, this risk is offset by other benefits of long-term PPAs, including the “hedge” value of energy delivered in each hour, Resource Adequacy and Renewable Energy values, achieving regulatory compliance, and meeting CPA’s retail product content objectives. As part of its ongoing risk management and portfolio optimization efforts, staff are assessing options to address and mitigate the risks of higher Q2 hedging levels, including by selling Q2 energy hedges. The results of these portfolio optimization efforts may require future amendments to the ERMP.

2. Adjusting CPA’s Resource Adequacy purchasing and maximum hedge requirements
a. Summary of proposed amendments
The proposed amendment to Appendix B, Section 4.1.4 of the ERMP replaces monthly aggregate limits for Resource Adequacy Hedges with hourly limits, reflecting the regulatory transition to “Slice-Of-Day" Resource Adequacy requirements. There are three significant adjustments:

1. Monthly aggregate limits would be replaced by hourly limits in which each "Slice-Of-Day" must exceed Minimum Hedge Percentage.

Agenda Page 20
Board of Directors Item 2

2. Maximum Hedge Percentage Limit only applies to the RA Net Peak Hour (see discussion below).

3. Maximum hedge percentage for the prompt year is raised from 100% to 105% to accommodate volumetric uncertainty.
b. Discussion
Recent modifications to the Resource Adequacy (RA) program represent a significant shift in how load-serving entities (LSEs) must ensure grid reliability. The new hourly or "Slice-Of-Day" framework aims to provide a more granular and accurate reflection of resource availability and demand, thereby enhancing grid reliability.

Previously, RA requirements and Minimum and Maximum RA Hedge Limits were based on peak load forecasts for each month. The new "Slice-Of-Day" framework divides each month into daily 24-hour segments, requiring LSEs to procure RA for each hour to better match resource availability with demand patterns throughout the day. By requiring LSEs to procure RA on an hourly basis, the framework ensures that available RA capacity is more closely aligned with real-time demand patterns.

The existing CPA Resource Adequacy Hedge Limits are structured around the previous monthly RA program requirements. These policy limits are now outdated and need to be updated to align with the regulatory shift to the "Slice-Of-Day" framework. The proposed changes will reorient our hedge policy to match the revised regulatory structure.

Maximum Hedge Percentage Limit for RA Net Peak Hour: The Maximum Hedge Percentage Limit will apply to the RA Net Peak Hour rather the peak RA requirement in each month. The Resource Adequacy (RA) Net Peak Hour is defined as the specific hour of the calendar year during which the load-serving entity's (LSE's) resource adequacy under contract minus its RA requirement is at its smallest value measured in megawatts (MW). Essentially, it represents the hour when the availability of RA is at its lowest relative to CPA’s RA requirement.

Agenda Page 21
Board of Directors Item 2
Since RA compliance is measured against the RA Net Peak Hour, most hours will have RA above 100%. During the normal course of business CPA takes steps to minimize long positions in RA while still meeting its RA requirements.

Increase in Maximum Hedge Percentage for Prompt Year - The maximum hedge percentage for the prompt year is proposed to be raised from 100% to 105% to accommodate volumetric uncertainty. This adjustment provides a buffer to ensure that CPA can meet its RA obligations despite potential variations in RA requirements promulgated by the California Public Utilities Commission and potential delays in resource online dates that impact the availability of RA to meet CPA’s RA requirements. The primary risk of exceeding 100% of the maximum hedge percentage is that some RA may become a “stranded cost” that does not meet a regulatory requirement. CPA manages this risk by actively trading RA products to ensure its positions are optimized.

3. Clarifying the process for amending Board-approved long-term contracts a. Summary of proposed amendments
The proposed amendment to Section 5.1.3 of the ERMP revises the Delegation of Authority for Long-Term contracts, addressing the need for the General Counsel and the Power Supply team to have more clarity on what constitutes a Material Change to a contract versus a minor change that is already delegated to the CEO or COO in the ERMP (“Delegation of Authority”). New Board reporting requirements also accompany these clarifications.
b. Discussion
CPA staff currently administers over 40 Board-approved long-term Power Purchase Agreements or Energy Storage Agreements. Whether in pre-construction, under construction, or in operation, these complex agreements often require minor or administrative adjustments to keep projects on track or operating well.

The ERMP already contemplates this necessity and delegates authority to the CEO or COO to make minor contract changes, while Material Changes require Board approval.

Agenda Page 22
Board of Directors Item 2
In staff’s experience, the current ERMP lacks enough specificity to easily determine whether an amendment should be presented to the Board for approval or qualifies for the Delegation of Authority for minor changes. This ambiguity leads to inefficiencies and risks the CEO or COO inadvertently overstepping their delegated authority. In addition, the Board currently has no visibility into the minor contract amendments that are currently being executive under the Delegation of Authority. To clear up these issues, three categories of adjustments are being proposed:

1. More explicitly defining Material Changes: The nature of what constitutes a Material Change is more explicitly defined in the following way.

2. More explicitly defining minor, administrative or non-core changes: The ERMP already authorizes the CEO or COO to approve minor contract changes without requiring Board approval. The proposed ERMP amendment counterposes these minor changes against Material Changes and adds, for example, the types of guaranteed commercial operation date extensions that would be considered minor.

3. Monthly Reporting to the Board: The Chief Executive Officer will provide a monthly report to the Board on any agreements or amendments executed. This ensures that the Board remains informed about minor contract changes carried out under the CEO/COO Delegation of Authority.

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Board of Directors Item 2
All Material Changes to a contract, as currently defined in the ERMP, will continue to require Board approval. This maintains oversight and control over significant contract modifications that could impact the organization's operations or financial commitments.

4. Removal of Duplicative Financial Reporting
a. Summary of proposed amendments
The proposed amendment to Section 7 of the ERMP addresses the issue of duplicative financial reporting by striking the requirement that the Quarterly RMT Report include Quarterly financial results.
b. Discussion
Financial reporting is currently being duplicated in the Quarterly RMT Report and the Quarterly Financial Report. These two reports are submitted to the Board at the same meeting. This duplicative reporting is a legacy issue; at the time the ERMP was first approved, CPA did not produce Quarterly Financial Reports.

5. Clarifying the contracting and credit terms described in Section 6 apply to transactions other than long-term procurement described in Section 5.1.3 a. Summary of proposed amendments
The redline changes are shown here:
b. Discussion
The proposed amendments to Section 6 of the ERMP memorialize the distinction between Short-Term and Long-Term procurement processes, ensuring appropriate governance for each type of transaction. There are two proposed adjustments:

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Board of Directors Item 2

1. Distinction Between Short-Term and Long-Term Transactions: Section 6 is intended to govern short-term transactions, but currently, it refers only to "transactions" without distinguishing between short-term and long-term contracting processes. Long-term procurement is governed by a different set of criteria described in Section 5.1.3. This lack of distinction should be clarified to minimize staff confusion and misapplication of policies.

2. Clarification in Section 6 Preamble: The proposal includes clarifying the preamble to Section 6 with the following amendments:
i. Short-Term Procurement: Section 6 governs short-term procurement for system hedges, resource adequacy, and renewable and carbon-free energy. This ensures that short-term transactions are managed under appropriate guidelines specific to their nature.
ii. Long-Term Procurement: Section 5.1.3 governs long-term procurement, where CPA selects transactions based on board-approved evaluation criteria and contracts using board-approved power purchase agreements.

CPA’s credit risk in long-term transactions is mitigated by contract terms, including those specifying development and performance security. This distinction ensures that long-term transactions follow a rigorous and board-approved process, providing clarity and reducing the risk of misinterpretation.

The proposed changes are consistent with CPA’s current risk management practices.

6. Minimum Number of RMT Members
a. Summary of proposed amendments
The proposed amendment to Section 4.2 memorializes current practice in that a minimum of three (3) RMT members are required in order for an RMT action or approval to be effective.

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Board of Directors Item 2
b. Discussion
This amendment addresses an omission in the existing policy by specifying a required minimum number of RMT members needed to approve an action, ensuring that due to vacation or other absence, an action cannot be made by only one or two RMT members.

In an emergency situation that requires RMT action, the ERMP already specifies a process for naming an interim RMT member.

ERMP Acknowledgements
The ERMP requires CPA representatives, including the Board, participating in any activity or transaction within the scope of the ERMP to sign, on an annual basis or upon any revision, an acknowledgment of their responsibilities, duties, obligations, and compliance under the ERMP. In tandem with the amendment to the ERMP, staff will be asking the Board to complete their annual acknowledgment forms in July, which will be emailed to the Directors in a subsequent communication from the Clerk of the Board.

ATTACHMENTS

1. Resolution No. 24-07-068

2. Proposed ERMP Amendments (redline)

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RESO NO. 24-07-068
RESOLUTION NO. 24-07-068

RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN

POWER ALLIANCE OF SOUTHERN CALIFORNIA

ADOPTING AND APPROVING THE AMENDED ENERGY

RISK MANAGEMENT POLICY

THE BOARD OF DIRECTORS OF CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA HEREBY RESOLVES AS FOLLOWS:

WHEREAS, Clean Power Alliance of Southern California (formerly known as Los Angeles Community Choice Energy Authority) (“Clean Power Alliance” or “CPA”) was formed on June 27, 2017;
WHEREAS, on April 5, 2018, the CPA Board of Directors (“Board”) adopted Resolution 18-005 delegating authority to the Executive Director for certain activities related to power procurement;
WHEREAS, on July 12, 2018, the Board adopted Resolution 18-006 approving the Energy Risk Management Policy ("ERMP") which establishes a framework by which the Board, staff, and consultants conduct power procurement and related business activities that may impact the risk profile of CPA;
WHEREAS, the ERMP specifies that CPA will review the policy on an annual basis in order to determine if the ERMP should be amended, supplemented, or updated to account for changing business conditions and/or regulatory requirements; WHEREAS, since July 12, 2018, the Board has approved amendments to the ERMP on an annual basis to account for changing business or regulatory conditions as well as administrative adjustments; and,
WHEREAS, CPA has considered the prevailing business conditions and regulatory environment and determined that refinements or updates to certain functions or activities are necessary or beneficial.

NOW, THEREFORE, BE IT DETERMINED, AFFIRMED, AND ORDERED BY

THE BOARD OF DIRECTORS OF THE CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA that the attached ERMP, presented as Exhibit A, as amended therein, is hereby approved as of July 11, 2024;
IT IS FURTHER DETERMINED, AFFIRMED, AND ORDERED, any power procurement activity that falls outside the parameters of the ERMP, as amended herein, shall be brought to the Board for consideration;
IT IS FURTHER DETERMINED, AFFIRMED, AND ORDERED that any and all acts authorized pursuant to this Resolution and performed prior to the passage of this Resolution are hereby ratified and approved;

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RESO NO. 24-07-068
IT IS FURTHER DETERMINED, AFFIRMED, AND ORDERED that this Resolution shall be continuing and remain in full force and effect; and, IT IS FURTHER DETERMINED, AFFIRMED, AND ORDERED that the approval of the ERMP is not a “project” under Section 21065 of the Public Resources Code and under California Environmental Quality Act (“CEQA”) Guidelines Sections 15378(a) and is exempt under CEQA Guidelines Section 15061(b)(3).

ADOPTED AND APPROVED this 11th day of July 2024.
____________________________
Deborah Klein Lopez, Chair
ATTEST:
_________________________
Gabriela Monzon, Secretary

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RESO NO. 24-07-068

EXHIBIT A

ENERGY RISK MANAGEMENT POLICY
(see attached)

Agenda Page 29
Energy Risk
Management Policy
July 11,
20232024
Agenda Page 30
1 Table of Contents
Section 1: ENERGY RISK MANAGEMENT POLICY OVERVIEW ...............................................................................4

1.1 Background and Purpose ...........................................................................................................................4

1.2 Scope ..........................................................................................................................................................5

1.3 Energy Risk Management Objective ..........................................................................................................5

1.4 ERMP Administration .................................................................................................................................6 Section 2: GOALS AND RISK EXPOSURES .............................................................................................................7

2.1 ERMP Goals ................................................................................................................................................7

2.2 Risk Exposures ............................................................................................................................................7

2.2.1 Customer Opt-Out Risk .......................................................................................................................8

2.2.2 Market Risk .........................................................................................................................................8

2.2.3 Regulatory and Legislative Risk ...........................................................................................................9

2.2.4 Volumetric Risk ...................................................................................................................................9

2.2.5 Model Risk ...........................................................................................................................................9

2.2.6 Operational Risk ............................................................................................................................... 10

2.2.7 Counterparty Credit Risk .................................................................................................................. 10

2.2.8 Reputation Risk ................................................................................................................................ 10 Section 3: BUSINESS PRACTICES ....................................................................................................................... 11

3.1 General Conduct ..................................................................................................................................... 11

3.2 Trading for Personal Accounts ................................................................................................................ 11

3.3 Adherence to Statutory Requirements ................................................................................................... 11

3.4 Transaction Type ..................................................................................................................................... 12

3.4.1 Exceptions ........................................................................................................................................ 12

3.5 Counterparty Suitability .......................................................................................................................... 13

3.6 System of Record .................................................................................................................................... 13

3.7 Transaction Valuation ............................................................................................................................. 13

3.8 Stress Testing .......................................................................................................................................... 14

3.9 Trading Practices ..................................................................................................................................... 14

3.10 Training ............................................................................................................................................ 15 Agenda Page 31
2 Section 4: ORGANIZATIONAL STRUCTURE AND RESPONSIBILITIES .................................................................. 16

4.1 Board of Directors Responsibilities ......................................................................................................... 16

4.2 Risk Management Team ......................................................................................................................... 16

4.3 Segregation of Duties .............................................................................................................................. 17

4.3.1 Front Office ...................................................................................................................................... 17

4.3.2 Middle Office.................................................................................................................................... 18

4.3.3 Back Office ....................................................................................................................................... 18 Section 5: DELEGATION OF AUTHORITY ........................................................................................................... 20

5.1 Risk Limits................................................................................................................................................ 20

5.1.2 Delegation Authority ........................................................................................................................ 20

5.1.3 Long-Term Procurement .................................................................................................................. 20

5.1.4 Volume Limits .................................................................................................................................. 21

5.1.5 Locational Limits .............................................................................................................................. 22

5.1.6 CAISO Submission Limits .................................................................................................................. 22

5.2 Monitoring, Reporting and Instances of Exceeding Risk Limits .............................................................. 22 Section 6: CREDIT POLICY AND COUNTERPARTY SUITABILITY .......................................................................... 23

6.1 Master Enabling Agreements and Confirmations ................................................................................... 23

6.1.1 Exceptions ........................................................................................................................................ 23

6.2 Counterparty Suitability .......................................................................................................................... 23

6.3 Maximum Credit Limit ............................................................................................................................ 24

6.4 Credit Review Exceptions ........................................................................................................................ 24

6.5 Credit Limit and Monitoring .................................................................................................................... 24

6.6 CPA Credit Support ................................................................................................................................. 24 Section 7: POSITION TRACKING AND MANAGEMENT REPORTING .................................................................. 25 Section 8: ERMP REVISION PROCESS ................................................................................................................ 26

8.1 Acknowledgement of ERMP.................................................................................................................... 26

8.2 ERMP Interpretations ............................................................................................................................. 26 Appendix A: DEFINITIONS ................................................................................................................................ 27 Appendix B: ENERGY RISK HEDGING STRATEGY ............................................................................................... 30 Agenda Page 32
3 1.1 Introduction ............................................................................................................................................ 30

2.1 Governance ............................................................................................................................................. 30

3.1 Hedging Program Goals .......................................................................................................................... 30

4.1 Hedging Targets and Strategies .............................................................................................................. 31

5.1 Hedge Program Metrics .......................................................................................................................... 36

6.1 Reporting Requirements ......................................................................................................................... 36 Appendix C: AUTHORIZED TRANSACTION TYPES .............................................................................................. 37 Appendix D: NEW TRANSACTION TYPE APPROVAL FORM ............................................................................... 39 Appendix E: NOTICE OF CONFLICT OF INTEREST .............................................................................................. 40 Appendix F: CODE OF MARKETING AND TRADING PRACTICES ........................................................................ 41 See next page. ........................................................................................................................................... 41 Agenda Page 33
4 Section 1: ENERGY RISK MANAGEMENT POLICY OVERVIEW

1.1 Background and Purpose
The Clean Power Alliance of Southern California (CPA) is a Joint Powers Authority (JPA) administering a Community Choice Aggregation (CCA) program in Southern California. CPA service territory currently includes 32 jurisdictions – 30 cities and the unincorporated parts of Los Angeles and Ventura Counties.

CPA members presently include the following:

Counties:

Los Angeles
Ventura
Cities:

CPA service will expand to three additional communities – Hermosa Beach, Monrovia, and Santa Paula – in March 2024.

CCA, authorized in California under AB 117 and SB 790, allows local governments, including counties and cities, to purchase wholesale power supplies for resale to their residents and businesses as an alternative to electricity provided by an Investor Owned Utility (IOU). For CPA members, that IOU is Southern Agoura Hills HawthorneHawaiian Gardens Santa Monica
Alhambra Hermosa BeachHawthorne Santa PaulaSierra Madre Arcadia Manhattan Beach Sierra MadreSimi Valley
Beverly Hills Malibu Simi ValleySouth Pasadena
Calabasas Monrovia South Pasadena
CamarilloCalabasas Moorpark Temple City
CarsonCamarillo Ojai Thousand Oaks
ClaremontCarson Oxnard Ventura
Culver CityClaremont Paramount West Hollywood
DowneyCulver City Redondo Beach Westlake Village
Hawaiian GardensDowney Rolling Hills Estates Whittier
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5 California Edison (SCE). Electricity procured by CPA to serve customers is delivered over SCE’s transmission and distribution system.

CPA exists to serve its local government members, and the residences and businesses located within their respective communities. CPA’s specific objectives are to provide its customers with a reliable supply of electricity, at competitive electric rates, sourced from a generation portfolio with lower greenhouse gas (GHG) emissions and higher renewable content than the incumbent utility, SCE. CPA also has goals to be a catalyst for local economic development and give its member agencies greater choice in the energy procured for their residents.

To meet these commitments, CPA must procure electric power supplies and operate in the wholesale energy market which exposes CPA, and ultimately the customers that it serves, to various risks. The intent of the Energy Risk Management Policy (ERMP) is to provide CPA, and by extension its customers, with a framework to identify, monitor and manage risks associated with procuring power supplies and operating in wholesale energy markets.

The Energy Risk Management Policy (ERMP), including its appendices, establishes CPA’s Energy Risk Program.

1.2 Scope
Unless otherwise explicitly stated in the ERMP or other policies approved by the CPA Board of Directors (Board), the ERMP applies to all power procurement and related business activities that may impact the risk profile of CPA. The ERMP documents the framework by which CPA staff and consultants will:
 Identify and quantify risk
 Develop and execute procurement strategies
 Develop controls and oversight
 Monitor, measure and report on the effectiveness of the ERMP To ensure its successful operation, CPA has partnered with experienced consultants to provide power supply services. Specific to power procurement, CPA has partnered with a third-party Scheduling Coordinator that augments CPA’s internal Front (scheduling), Middle (monitoring) and Back (settlement) Office related activities as discussed at Section 4.3. The Scheduling Coordinator supporting CPA’s power procurement activities will adhere to and be governed by the ERMP in providing these services to CPA. In addition, the Scheduling Coordinator’s activities executed on CPA’s behalf will be governed by its own risk management policies and procedures, and prudent industry practices.

1.3 Energy Risk Management Objective
The objective of the ERMP is to provide a framework for conducting procurement activities that maximize the probability of CPA meeting the goals listed in Section 2.1.

Pursuant to the ERMP, CPA will identify and measure the magnitude of the risks to which it is exposed and that contribute to the potential for not meeting identified goals.

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6 1.4 ERMP Administration
The ERMP has been reviewed and approved by the Board. The Chief Executive Officer in consultation with the Risk Management Team (collectively, the “RMT”), as defined in Section 4.2, and the Board must approve amendments to the ERMP, except for appendices D, E, and F, which may be amended with approval of the Chief Executive Officer, in consultation with the RMT. The Chief Executive Officer must give notice to the Board of any amendment it makes to an appendix or a reference policy or procedure document.

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7 Section 2: GOALS AND RISK EXPOSURES

2.1 ERMP Goals
To help ensure its long-term success, CPA has outlined the following goals:
 Build a portfolio of resources with lower GHG emissions and higher renewable content than SCE;  Meet reliability requirements established by the State of California, and operate in a manner consistent with Prudent Utility Practice (defined as the practices generally accepted in the utility industry to ensure safe, reliable, compliant and expeditious operations);  Maintain competitive retail rates with SCE after adjusting for exit fees (currently the Power Charge Indifference Adjustment or PCIA) and Franchise Fees paid by CPA customers;  Emphasize during the initial years of operation the funding of financial reserves to meet the following long-term business objectives:
o Stabilize rates by dampening year-to-year variability in power supply costs; o EstablishMaintain an investment-grade credit rating to maximize the ability of CPA to engage in long-term acquisition or development of generation supplies consistent with ERMP goals; and
o Provide a source of equity capital for investment in generation.

The goals outlined above are incorporated into the financial models and metrics that are used to monitor and measure risk and ERMP success. It is important to note that the goals listed above are not intended to be a comprehensive list of goals for CPA. Rather, the above reflect the overarching goals critical to CPA’s long-term financial success and that will guide the ERMP.

2.2 Risk Exposures
For the purpose of the ERMP, risk exposure is assessed on all transactions (energy, environmental attributes, and capacity) as well as the risk exposure of open positions and the impacts of these uncertainties on CPA’s load obligations.

CPA faces a range of risks during launch and ongoing operation including:
 Customer opt-out risk
 Market risk
 Regulatory risk
 Volumetric risk
 Model risk
 Operational risk
 Counterparty credit risk
 Reputation risk
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8 2.2.1 Customer Opt-Out Risk
Customer opt-out risk may be realized by any condition or event that creates uncertainty within, or a diminution of, CPA’s customer base. Customer opt-out risk is manifested in two separate ways.

First, the ability of customers to return to bundled service from SCE creates uncertainty in CPA’s revenue stream, which is critical for funding ERMP goals and achieving the investment grade credit rating needed to successfully operate over the long-term.

Second, customer opt-out risk can potentially challenge the ability of CPA to prudently plan for, and cost-effectively implement, long-term resource commitments made on behalf of its member communities and the customers it serves.

CPA will manage customer opt-out risk through the following means:
 Implement a key accounts program and maintain strong relationships with the local community including elected leaders, stakeholders and all of the customers CPA serves;  Actively monitor and advocate for the interests of CPA and its customers in SCE ratemaking proceedings, California Public Utilities Commission (CPUC) proceedings that potentially affect exit fees paid by CPA customers, as well as all regulatory and legislative proceedings where an adverse outcome may challenge the ability of CPA to deliver on customer commitments;  Regularly monitor and report actual and projected financial results including probability-based and stress-tested financial results assuming a range of possible future outcomes with respect to:
o Future SCE generation and PCIA rates;
o Future market costs for energy, environmental attributes and capacity; and o Anticipated or threatened regulatory actions, when appropriate.  Adopt, implement and update, as needed, a formal Energy Risk Hedging Strategy (Appendix B) describing the strategy that CPA will follow for engaging in procurement activities; and  Evaluate expansion of CPA’s customers base through incorporation of other eligible communities into the CCA.

2.2.2 Market Risk
Market risk is the uncertainty of CPA’s financial performance due to variable commodity market prices (market price risk) and uncertain price relationships (basis risk). Variability in market prices creates uncertainty in CPA’s procurement costs, which has a direct impact on customer rates. CPA will manage market risk through:
 Regular measurement;
 Execution of approved procurement;
 Hedging and Congestion Revenue Right strategies; and
 Use of the Limit Structure set forth in the ERMP (see limits in Section 5.1.2 and Appendix B).

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9 2.2.3 Regulatory and Legislative Risk
CPA and other CCAs are subject to an evolving legal and regulatory landscape. Additionally, CCAs are in direct competition with California’s IOUs in supplying retail electricity and the IOUs face the risk of stranded investments in generating assets and power purchase agreements procured in the past to serve now departing CCA loads. The manner in which such stranded costs of these legacy power supplies are allocated to departing CCA loads is subject to change based on various proceedings at the CPUC. The outcome of such proceedings will directly affect the cost of power for CPA’s customers, as well as impact the rate competitiveness of CPA.

In addition to exit fees, potential regulatory and/or legislative changes could affect the ability of CPA to exercise local control over the manner and means of procuring power supplies to serve its customers.

CPA will manage regulatory and legislative risks by:
• Regularly monitor and analyze legislative and regulatory proceedings impacting CCAs; and  Actively participate in, and advocate for, the interests of CPA and its customers during regulatory and legislative proceedings.

2.2.4 Volumetric Risk
Volumetric risk reflects the potential uncertainty in the quantity of different power supply products (e.g., renewable energy, Carbon Free Energy and capacity) required to meet the needs of CPA customers. This uncertainty can lead to adverse financial outcomes, as well as create potential for CPA to fail to meet reliability or renewable energy compliance requirements established by the State of California and/or the CPA Board. Customer load is subject to fluctuation due to customer opt-outs or departures, temperature deviation from normal, unforeseen changes in the growth of behind the meter generation by CPA customers, unanticipated energy efficiency gains, new or improved technologies, as well as local, state and national economic conditions. CPA will manage volumetric risk by taking steps to:
 Implement robust short- and long-term load and generation supply forecast methodologies, including regular monitoring of forecast accuracy through time and refining such forecasts, including by incorporating CPA’s actual load data into forecasts as such data becomes available;  Account for volumetric uncertainty in load and/or generation supply in in the Energy Risk Hedging Strategy;
 Monitor trends in customer onsite generation, economic shifts, and other factors that affect electricity customer consumption and composition; and
 Proactively engage with customers in developing distributed energy resources and behind-the-meter generation and energy efficiency programs so as to better forecast changes in load.

2.2.5 Model Risk
Model risk has potential for an inaccurate or incomplete representation of CPA’s actual or forecast financial performance due to deficiencies in models and/or information systems used to capture all transactions. CPA will manage model risk by:

Agenda Page 39
10  RMT ratification of models used to forecast financial performance, net positions and/or measure risk;
 Ongoing review of model outputs;
 A requirement to record all procurement transactions in a single trade capture system; and  Ongoing update and improvement of models as additional information and expertise is acquired and industry best practices evolve.

2.2.6 Operational Risk
Operational risk is the uncertainty of CPA’s financial performance due to weaknesses in the quality, scope, content, or execution of human resources, technical resources, and/or operating procedures within CPA.

Operational risk can also be exacerbated by fraudulent actions by employees or third parties or inadequate or ineffective controls. CPA will manage operational risk through:
 The controls set forth in the ERMP;
 RMT oversight of procurement activity;
 Timely and effective reporting to the Chief Executive Officer in consultation with the RMT, and the Board;
 Implementation of a compliance training program for CPA staff;  Ongoing CPA and Scheduling Coordinator staff education/training and participation in industry forums; and
 Annual audits to test compliance with the ERMP.

2.2.7 Counterparty Credit Risk
Counterparty credit risk is the potential that a counterparty will fail to perform or meet its obligations in accordance with terms agreed to under contract. CPA’s exposure to counterparty credit risk is controlled by the limit controls set forth in the Credit Policy described in Section 6.

2.2.8 Reputation Risk
Reputation risk is the potential that CPA’s reputation is harmed, causing customers to opt-out of CPA service and migrate back to SCE. Reputational risk is also the potential that energy market participants view CPA as an untrustworthy business partner, thus reducing the pool of potential counterparties and/or having counterparties apply a CPA-specific risk premium to pricing. Reputational risk is managed through:
 Implementation of and adherence to the ERMP;
 Engaging in ethical, transparent and honest business practices during trading activities; and  Establishment and adherence to industry best practices including both those adopted by other CCAs, as well as those adopted by traditional municipal electric utilities.

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11 Section 3: BUSINESS PRACTICES

3.1 General Conduct
It is the policy of CPA that all Board members, staff, and consultants (collectively referred to “CPA Representatives”), adhere to standards of integrity, ethics, conflicts of interest, compliance with statutory law and regulations and other applicable CPA standards of personal conduct while employed by or affiliated with CPA. Towards this end, all persons performing marketing and trading functions on behalf of CPA shall be subject to, read, understand, and abide by the provisions contained in the CPA Code of Marketing and Trading Practices (see Appendix F).

3.2 Trading for Personal Accounts
All CPA Representatives participating in any transaction or activity within the coverage of the ERMP are required to comply with the CPA Conflict of Interest Code approved by the Fair Political Practices Commission and are obligated to give notice in writing to CPA of any legal, financial or personal interest such person has in any counterparty that seeks to do business with CPA, and to identify any real or potential conflict of interest such person has or may have with regard to any existing or potential contract or transaction with CPA, within 48-hours of becoming aware of the conflict of interest. Written notice should be submitted to the Chief Executive Officer substantially in the form of the letter notification shown in Appendix E. This written notice obligation shall be in addition to the regulations or requirements of the Fair Political Practices Commission (e.g., Statement of Economic Interests, Form 700) and any policy adopted by the CPA Board of Directors, including but not limited to the Vendor Communication Policy No. 2019-10.

Further, all persons are prohibited from personally participating in any transaction or similar activity that is within the coverage of the ERMP, or prohibited by California Government Code Section 1090, and that is directly or indirectly related to the trading of electricity and/or environmental attributes as a commodity.

If there is any doubt as to whether a prohibited condition exists, then it is the CPA Representative’s responsibility to discuss the possible prohibited condition with CPA General Counsel.

3.3 Adherence to Statutory Requirements
All CPA Representatives are required to comply with rules promulgated by the State of California, CPUC, California Energy Commission, Federal Energy Regulatory Commission (FERC), Commodity Futures Trading Commission (CFTC), and other regulatory agencies.

Congress, FERC and CFTC have enacted laws and regulations that prohibit, among other things, any action or course of conduct that actually or potentially operates as a fraud or deceit upon any person in connection with the purchase or sale of electric energy or transmission services. These laws also prohibit any person or entity from making any untrue statement of fact or omitting a material fact where the omission would make a statement misleading. Violation of these laws can lead to both civil and criminal actions against the individual involved, as well as CPA. The ERMP is intended to comply with these laws, regulations and rules and to avoid improper conduct on the part of anyone employed by CPA. These Agenda Page 41
12 procedures may be modified from time to time based on legal requirements, auditor recommendations, and other considerations.

In the event of an investigation or inquiry by a regulatory agency, CPA will provide legal counsel to employees provided the subject of the investigation is within the employee’s course and scope of employment. However, CPA reserves the right to refrain from providing legal counsel if it reasonably appears to the CPA General Counsel and Chief Executive Officer that the employee was either not acting in good faith or was acting outside the course and scope of his or her employment.

CPA employees are prohibited from working for another power supplier, CCA or utility while they are simultaneously employed by CPA unless an exception is authorized by the Board.

3.4 Transaction Type
Authorized transaction types are listed in Appendix C. Each approved transaction type that is listed is included to either meet a mandatory procurement obligation required of all Load Serving Entities (LSE) serving retail loads in California; and/or alternatively, the approved product is needed for CPA to meet an identified ERMP goal. Major transaction types include:
 Resource Adequacy Capacity is a mandatory procurement obligation that ensures adequate generation supplies are available on a planning basis to reliably meet the requirements of electric consumers in the California Independent System Operator (CAISO) balance authority;  Portfolio Content Category 1 (PCC1) and Portfolio Content Category 2 (PCC2) renewable energy must be procured by CPA to comply with the state of California’s Renewable Portfolio Standard, as required by SB 350. CPA has made a voluntary decision to purchase incremental quantities of PCC1 and/or PCC2 renewable energy to exceed the renewable portfolio content of the incumbent utility;
 Carbon Free Energy is a voluntary purchase of specified source energy from large hydroelectric generation than enables CPA to provide its customers with electricity sourced from generators producing low GHG emissions so that member agencies can meet their climate action plans and CPA can contribute to combatting climate change;
 Physical Energy products are a voluntary purchase made by CPA to provide cost certainty and rate stability for customers; and
 The CAISO is the largest grid operator in the state of California and CPA members lie within its balancing area. CAISO operates Day-Ahead, Fifteen Minute and Real-Time Markets and other ancillary markets necessary for reliable operation of the grid. CPA is required to participate in CAISO markets. Acquisition of the CAISO products listed in Appendix C either result from mandatory participation in CAISO’s markets, or are useful for managing short-term market risks associated with CAISO’s markets.

The strategy for using and procuring the approved products is described in further detail in the Energy Risk Hedging Strategy.

3.4.1 Exceptions
New transaction types may provide CPA with additional flexibility and opportunity but may also introduce new risks. Therefore, transaction types not included in Appendix C must be approved by the RMT and the Agenda Page 42
13 Board prior to execution using the process defined below.

When seeking approval for a new transaction type, a New Transaction Type Approval Form, as shown in Appendix D, is to be drafted describing all significant elements of the proposed transaction. The proposal write-up will, at a minimum, include:
 A description of the benefit to CPA, including the purpose, function and expected impact on costs (i.e.; decrease costs, manage volatility, control variances, etc.);  Identification of the in-house and/or external expertise that will manage and support the new or non-standard transaction type;
 Assessment of the transaction’s risks, including any material legal, tax or regulatory issues;  How the exposures to the risks above will be managed by the Limit Structure;  Proposed valuation methodology (including pricing model, where appropriate);  Proposed reporting requirements, including any changes to existing procedures and system requirements necessary to support the new transaction type;  Proposed accounting methodology; and
 Proposed work flows/methodology (including systems).

It is the responsibility of the Middle Office to ensure that relevant departments have reviewed the proposed transaction type and that material issues are resolved prior to submittal to the Board for approval. If the transaction type is approved, Appendix C to the ERMP will be updated to reflect its addition.

3.5 Counterparty Suitability
All counterparties with whom CPA transacts must be reviewed for creditworthiness and assigned a Credit Limit as described in Section 6.

3.6 System of Record
Since information systems play a vital role for CPA’s trading and risk management abilities, CPA shall maintain and secure a System of Record. CPA’s transaction and contract data are also stored in its Scheduling Coordinator’s energy trading and risk management system.

CPA’s Technology and Data and Systems group supports the security, integrity, and recoverability of the System of Record. The Scheduling Coordinator has assigned a Database Administrator (DBA) that is charged with database security and maintenance for the Scheduling Coordinator’s transaction database.

For data recoverability, transaction data stored in the System of Record is replicated daily to ensure data redundancy and is backed-up via cloud-based applications.

All transaction records will be maintained in US dollars and will be separately recorded and categorized by type of transaction and other characteristics, in line with standard industry practice. This System of Record shall be auditable and audited as appropriate.

3.7 Transaction Valuation
Transaction valuation and mark-to-market (valuing of an asset based on its current market price) reporting of positions shall be based on independent, publicly available, market-observed prices (replacement costs) Agenda Page 43
14 whenever possible. In the event there are not market-observed prices, the value of CPA’s transactions shall follow a notional value calculation (the total nominal dollar value of a transaction over its full duration) or other methodology approved as part of the new product approval process.

All transactions and open positions will be valued daily.

3.8 Stress Testing
In addition to limiting and measuring risk using the methods described herein, stress testing shall also be used to examine performance of the CPA portfolio under potential adverse conditions. Stress testing is used to understand the potential variability in CPA’s projected procurement costs and resulting impacts on customer rates and CPA’s competitive positioning associated with low probability events. The Middle Office will perform stress-testing of the portfolio as directed by the RMT.

3.9 Trading Practices
As previously noted, CPA exists to serve its customers. The scope of its wholesale market operations is limited to that which is required to meet the power supply obligations of its customers consistent with ERMP goals. It is the expressed intent of the ERMP to prohibit wholesale market activities that result in procurement of any power supply product beyond that which is required to meet an identifiable need of CPA customers. The purchase or sale of any power supply product beyond what is reasonably anticipated to be needed to meet the requirements of CPA customers is a speculative transaction and is prohibited.

In the course of developing operating plans and conducting procurement activities, CPA recognizes that staff must employ reasonable expertise and judgment, and it is not the intent of the ERMP to restrain the legitimate application of analysis and market expertise in executing procurement strategies intended to minimize costs or maximize the value of generation within the constraints of the ERMP. If any questions arise as to whether a proposed transaction(s) constitutes speculation, the RMT shall review the transaction(s) to determine whether the transaction(s) would constitute speculation and shall document its findings. As used here, “speculation” means the act of trading an asset with the expectation of realizing financial gain resulting from a change in price in the asset being transacted.

Staff and consultants engaged in procurement activities will also observe the following practices:
 Persons shall conduct business in good faith and in accordance with all applicable laws, regulations, tariffs and rules;
 Persons shall not arrange or execute wash trades (i.e., offsetting transactions where no financial risk is taken);
 Persons shall not disseminate known false or misleading information or engage in transactions to exploit such information;
 Persons shall not game or otherwise interfere with the operation of a well-functioning competitive market;
 Persons shall not collude with other market participants; and  Persons shall immediately report any known or suspected violation of the ERMP.

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15 3.10 Training
CPA recognizes the importance of ongoing education to manage risk and to contribute to ERMP success.

Towards this end, CPA will observe the following practices:
 All employees executing procurement transactions on behalf of CPA must receive appropriate training in the attributes of each product type that they transact, how the product furthers the portfolio objectives of CPA, and how the risk profile of CPA is impacted by procurement of each product;
 All employees executing procurement activities shall complete required and available energy market compliance training as determined by the Chief Operating Officer once per calendar year and acknowledge receipt of said training in writing;
 The Human Resources Department shall maintain records of each employee’s training status.

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16 Section 4: ORGANIZATIONAL STRUCTURE AND RESPONSIBILITIES

4.1 Board of Directors Responsibilities
The Board has the responsibility to review and approve the ERMP. With this approval, the Board acknowledges responsibility for understanding the risks CPA is exposed to through its CCA activity and how the policies outlined in the ERMP help CPA manage the associated risks. The Board is also responsible to:
 Provide strategic direction to CPA;
 Consider transactions beyond authorities delegated to the Chief Executive Officer in consultation with the RMT;
 Consider changes to the Energy Risk Hedging Strategy (see Appendix B); and  Consider new transaction types not currently listed in the ERMP (see Appendix C).

4.2 Risk Management Team
The RMT is responsible for implementing, maintaining and overseeing compliance with the ERMP and for maintaining the Energy Risk Hedging Strategy. The members of the RMT consist of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, and the Vice President of Power Supply. A minimum of three (3) RMT members are required in order for an action or approval to be effective. In the event of any Vacancy, the RMT may (i) appoint interim RMT member(s) or (ii) operate the RMT with the remaining RMT member(s), until such time as the Vacancy is filled or the reason for the Vacancy no longer exists.

The primary goal of the RMT is to ensure that the procurement activities of CPA are executed within the guidelines of the ERMP and are consistent with Board directives. The RMT shall consider and propose changes to the ERMP when conditions dictate.

Pursuant to direction and delegation from the Board of Directors and the limitations specified by this ERMP, the Chief Executive Officer, in consultation with the RMT, maintains authority over procurement activities for CPA. This authority includes, but is not limited to, taking any or all actions necessary to ensure compliance with the ERMP.

The RMT responsibilities may include, but are not limited to:
 Maintain the Energy Risk Hedging Strategy and ensure that all procurement strategies and related protocols are consistent with the ERMP;
 Review financial and risk models and subsequent changes;  Establish counterparty Credit Limits;
 Review initial counterparty credit review models and methods for setting and monitoring Credit Limits and subsequent changes;
 Review reports as described in the ERMP;
 Meet to review actual and projected financial results and potential risks;  Keep apprised of any change in the environment in which CPA operates that has a material effect upon the risk profile of CPA;
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17  Review summaries of limit violations and recommend corrective actions, if necessary; and  Review the effectiveness of CPA’s energy risk measurement methods.

4.3 Segregation of Duties
CPA shall work to maintain a segregation of duties, also referred to as “separation of function,” to help manage and control the risks outlined in the ERMP. Individuals responsible for legally binding CPA to a transaction will not also perform confirmation or settlement functions without supplemental, transparent, and auditable controls. CPA also will leverage the organizational structure of the Scheduling Coordinator’s Middle and Back offices to help maintain a segregation of duties. The Front, Middle and Back Office responsibilities for CPA are described below.

4.3.1 Front Office
The Front Office is headed by the Vice President, Power Supply. The Front Office has overall responsibility for (1) managing all activities related to procuring and delivering resources needed to serve CPA load, (2) analyzing fundamentals affecting load and supply factors that determine CPA’s net position, and (3) transacting within the limits of the ERMP and associated policies to balance loads and resources and maximize the value of CPA assets through the exercise of approved optimization strategies. Other duties associated with these responsibilities include:
 Assist in the development and analysis of risk management hedging products and strategies, and bring recommendations to the RMT;
 Prepare a monthly operating plan for the prompt month (the month following the current month) that gives direction to the Day-Ahead and Real-Time Market trading and scheduling staff regarding the bidding and scheduling of CPA’s resource portfolio in the CAISO market;  Calculate and maintain the net forward positions (a forecast of the anticipated electric demands compared to existing resource commitments) of CPA for all power products (energy, renewable energy, Carbon Free Energy and Resource Adequacy Capacity);  Develop, price and negotiate hedging products;
 Oversee scheduling of load and resources into CAISO;
 Keep accurate records of all executed transactions;
 Manage and facilitate the transaction execution process for power supply transactions through coordination of the following activities:
o Notify Front Office personnel of any anticipated unique physical delivery or scheduling issues;
o Work with Middle Office personnel and legal counsel to establish a contract, evaluate counterparty creditworthiness and secure additional credit from the counterparty, if necessary;
o Work with Middle Office, as needed, to perform an analysis of the potential transaction to evaluate the effect on CPA’s portfolio risks;
o Notify Back Office of terms and conditions affecting settlement to ensure that the necessary settlement procedures are in place.

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18 4.3.2 Middle Office
The Middle Office functions are the responsibility of the Chief Financial Officer. The Middle Office provides market and credit risk oversight, has responsibility for development of risk management policies and procedures, monitors compliance with the same, and keeps management and the Board informed on risk management issues. CPA will maintain its Middle Office functions independent from the front and back office functions.

Middle Office responsibilities include the following:
 Create and ensure compliance with policies outlining standard procedures for conducting business;
 Oversee short-term and long-term load forecasting;
 Estimate and publish daily forward monthly power curves and weekly publish natural gas price curves for a minimum of the balance of the current year through the next calendar year;  Verify the net forward positions of CPA for all power products;  Ensure that CPA adheres to all risk policies and procedures;  Implement and enforce credit policies and limits;
 Confirm all transactions conform to commercial terms and alert Front Office to discrepancies;
 Ensure all trades have been entered into the System of Record as well as the Scheduling Coordinator’s transaction data management system;
 Ensure that all CAISO Day-Ahead, Fifteen Minute and Real-Time Market delivery volumes and prices are entered into a transaction database;
 Review models and methodologies and recommend RMT approval, as needed;  Mark unrealized and realized gains and losses associated with CPA hedge activity.  Development and maintain financial and energy risk management models as directed by the RMT  Develop and maintain load forecasting models and perform long term load forecasts as directed by RMT

4.3.3 Back Office
The Back Office functions are the responsibility of the Chief Financial Officer. It provides support with a wide range of administrative activities necessary to execute and settle transactions and to support the risk control efforts (e.g., transaction entry and/or checking, data collection, billing, etc.) consistent with the ERMP. Through its partnership with the Scheduling Coordinator, CPA will maintain its Back Office functions independent from the Front and Middle Office functions.

Back Office responsibilities include the following:
 Ensuring timely and accurate financial reporting;
 Maintaining a system of financial controls and business processes that control financial risk;  Maintaining the overall financial security of transactions undertaken on behalf of CPA; Agenda Page 48
19  Carrying out month-end checkout of all transactions each month; and  Validation and prompt payment of energy related invoices payable by CPA and resolving disputes with counterparties;
 Generation and prompt collection of energy related invoices payable by counterparties Agenda Page 49
20 Section 5: DELEGATION OF AUTHORITY

5.1 Risk Limits
The following limits apply to all CPA procurement activities. These limits are Board-approved and define the limits that CPA must operate within. The metrics and management of risk within these limits is further described in the Energy Risk Hedging Strategy.

5.1.2 Delegation Authority
Through its approval of the ERMP, the Board has delegated operations and oversight to the Chief Executive Officer, in consultation with the RMT, as outlined through the ERMP. Specifically, to facilitate daily operations of the CCA, the Board has delegated transaction execution authorities shown in the table below.

Table 5.1.2.*
Position Transaction Type Term
Limit
Maturity
Limit
Counterparty
Limit
Notional
Value Limit
(per
transaction)
Notional
Value
Limit
(annual)
Chief Executive
Officer in
consultation
with the RMT
Tolling Agreements 3 years 3 years
Pursuant to
Credit Policy
in Section 6
of this Policy
Within hedge limits
approved in the Energy
Risk Hedging Strategy in
Appendix B of this Policy
New Build 5 years 7 years
Any transactions
other than Tolling
Agreements or New
Build
10 years 10 years
*
See Appendix A for definitions of “Tolling Agreement,” Term Limit,” “Maturity Limit,” and “New Build.” For operational flexibility, the Chief Executive Officer will have the authority to delegate transaction execution authority to either the Chief Operating Officer, or Vice President, Power Supply, as needed. Any delegation will be documented in writing using the form in Appendix G.

For a transaction to be valid, it must conform to each of the limits specified in Table 5.1.2, above.

These limits will be applied to wholesale power procurement outside of transactions directly executed with the CAISO. These limits provide CPA the needed authority to manage risks as they arise. Transactions falling outside the delegations above require Board approval prior to execution.

Transactions with CAISO and CAISO administrative fees are excluded from this table. CAISO transactions are limited to those required for scheduling contracts in the CAISO market and for balancing CPA’s load and resources.

5.1.3 Long-Term Procurement
Long-term procurement, defined as transactions greater than the Limits specified in Table 5.1.2 will be subject to Board approval. Long-term contracts are procured through solicitations, bilateral negotiations, or regulatory proceedings, with oversight including shortlist approvals or procurement recommendations, Agenda Page 50
21 provided by the Energy Resources & Planning Committee of the Board.

All long-term contracts are evaluated using standard evaluation criteria, including economic value over the life of the contract and any additional evaluation criteria established by the Energy Resources & Planning Committee and consistent with Board policy directives. Proposals received in solicitations, including all pricing and other confidential submission information, are reviewed by an RFO Review Team comprised of the Chief Executive Officer, additional Staff members as determined by the Chief Executive Officer, and a subset of Board members serving on the Energy Resources and Planning Committee, unless otherwise determined appropriate by the Chief Executive Officer and General Counsel in consultation with the Board Chair and Chair of the Energy Resources and Planning Committee. Proposals, either from solicitations, bilateral negotiations, or regulatory proceedings, are evaluated by the Energy Resources & Planning Committee and approved for contract negotiations. Final awards are then presented for Board consideration in accordance with applicable law.1
Any amendments to a Board-approved long-term contract that make material changes to the terms of the contract including, but not limited to, changes to (a) price increase, (b) volume, change greater than 10%, project size, (c) capacity change greater than 10%, (d) extension of the guaranteed commercial operation date (i) greater than 3 months or (ii) when liquidated damages are not paid for the length of an extension up to 12 months, counterparty security requirements, or other amendments that would result in a downgrade of impact the evaluation criteria upon which a project was approved (collectively “Material Changes”) must be also approved the Board.

MinorAny changes that are not Material Changes are minor, non-core amendments, or additional agreements that are and administrative in nature, or arising from the counterparties effectuating theiror clarifying their understanding of the obligations related to the project under normal course of business(e.g.,, including but not limited to guaranteed commercial operation date extension of 3 months or less, or 12 months or less when liquidated damages are paid for the length of the extension, implementing project financing, consent to collateral assignment, assignments, changes to progress reporting forms, insurance obligations, or termination),, may be approved and executed by the Chief Executive Officer or Chief Operating Officer. The Chief Executive Officer will provide a monthly report to the Board on any agreements or amendments executed pursuant to this delegation.

All procurement executed under the delegation above must align with CPA’s underlying risk exposure (i.e., load requirements, locational and temporal) that is being hedged consistent with the Energy Risk Hedging Strategy. The RMT will consider risks associated with executed or planned long-term procurement within its evaluation of overall portfolio risk and procurement decision-making.

5.1.4 Volume Limits
Transactions should not be executed that exceed CPA’s energy, capacity, or renewable or Carbon Free Energy requirements. If there is an adjustment to CPA requirements resulting in the volume of existing transactions exceeding CPA’s requirements, the RMT will determine the most favorable strategy to 1 Awards will be presented without market sensitive information (i.e., pricing or other sensitive commercial terms) for Board consideration in accordance with applicable law.

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22 appropriately rebalance the portfolio.

An exception to the above limits may be made by the RMT if executing a transaction exceeding load will minimize costs or is necessary to ensure compliance. For example, procuring RA for the entire year could cause CPA to hold excess RA in certain months. Such a transaction would be acceptable if a lower cost alternative transaction or set of transactions that more closely matches monthly needs is unavailable.

5.1.5 Locational Limits
The delivery location for all transactions must support the requirements of CPA’s source or sink locations.

5.1.6 CAISO Submission Limits
CPA shall bid at least 80% of its forecast load requirements in the Day-Ahead Market and bids shall not exceed 100% of forecast load requirements.

CPA shall offer no more than 100% of the forecasted generation capability in the Day-Ahead Market. CPA shall follow CAISO protocols for all activity within CAISO.

5.2 Monitoring, Reporting and Instances of Exceeding Risk Limits The Middle Office is responsible for monitoring and reporting compliance with all limits within the ERMP.

If a limit or control is violated, the Middle Office will send notification to the trader responsible for the violation and the RMT. The RMT will discuss the cause and potential remediation of the exceedance to determine next steps for curing the exceedance.

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23 Section 6: CREDIT POLICY AND COUNTERPARTY SUITABILITY Prior to execution of any transaction other than for long term procurement transactions governed by Section 5.1.3, the Front Office will verify that CPA has executed a master agreement with the counterparty, that the counterparty has been evaluated for creditworthiness, and that an approved Credit Limit has been established. No transactions described in this section may be executed without first ensuring the transaction falls within the unutilized Credit Limit for the counterparty or has been approved on an exception basis by the Chief Financial Officer.

6.1 Master Enabling Agreements and Confirmations
Transactions are governed by master agreements, the forms of which must be prepared by CPA General Counsel and approved by the Board. No transactions may be executed without a fully executed master agreement being on file. Written confirmations of each transaction will contain standard commercial terms and provisions. Material modifications or additions to standard commercial terms in confirmations require approval by legal counsel. Modifications to standard credit terms in confirmations or enabling agreements require approval by CFO.

It is CPA’s policy to confirm all transactions in writing. All confirmations received from counterparties will be matched against trades in the System of Record. Any discrepancies between a confirmation and the System of Record may be handled by the Front Office representative that executed the transaction, or if necessary, a Middle Office representative will seek resolution with the counterparty. All confirmations will be kept on file.

6.1.1 Exceptions
It is standard industry practice to not provide written confirmation of certain short-term transactions with a term of one day or less. Additionally, CPA may agree with certain counterparties to alternative methods for confirming certain transactions. Transactions executed in a recorded telephone conversation or recorded instant message in which the offer and acceptance shall constitute the agreement of the parties must be confirmed in writing after-the-fact, with notice being provided to the counterparty within 72 hours.

6.2 Counterparty Suitability
All counterparties shall be evaluated for creditworthiness by the Middle Office prior to execution of any transaction and no less than annually thereafter. Additionally, counterparties shall be reviewed if a change has occurred, or is perceived to have occurred, in market conditions or in a company’s management or financial condition. This evaluation, including any recommended increase or decrease to a Credit Limit, shall be documented in writing and include all information supporting such evaluation in a credit file for the counterparty.

Counterparty Credit Limits, and credit and paymvacent terms will be recommended by the Middle Office for approval by the RMT consistent with CPA’s Credit Protocols. The Middle Office will undertake credit analysis that shall include, at a minimum, an evaluation of current audited financial statements or other supplementary data and consider factors such as:

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24  Liquidity
 Leverage (debt)
 Profitability
 Net worth
 Cash flow
 Proposed collateral and other contract terms
Counterparty’s senior unsecured or corporate credit rating will be obtained from one of the nationally recognized rating agencies (S&P, Moody’s, and/or Fitch) if available. Trade and banking references, and any other pertinent information, may also be used in the review process.

When establishing credit and payment terms, RMT will consider the Credit Limit of the counterparty, current exposure to the counterparty, the product type and tenor of existing and/or future transactions, notional value of proposed or future transactions with the counterparty and the availability/scarcity and commercial significance of the product being traded. A counterparty may choose to provide a guarantee from a third party, provided the third party satisfies the criteria for a Credit Limit as outlined herein.

6.3 Maximum Credit Limit
Each new counterparty Credit Limit or increase to an existing limit will be reviewed by the RMT. The maximum amount of any Credit Limit extended to a counterparty shall not exceed $50,000,000 unless approved in writing by the Board.

6.4 Credit Review Exceptions
Counterparties not subject to the above credit review criteria include those associated with Day-Ahead and current day purchases where risks associated with market movements are minimal.

6.5 Credit Limit and Monitoring
The Middle Office will monitor the current credit exposure for each counterparty with whom CPA transacts and include such information in the Current Counterparty Credit Risk Report. This report will be submitted to the RMT for review pursuant to the reporting requirements outlined in Section 7.

Current credit exposure isfletter is a measure of the known exposures and composed of two primary exposures –
(1) realized exposure, and (2) forward exposure. Realized exposure, a payable or receivable amount owed between counterparties, is a measurement of cash flow for billed and unbilled transactions. Forward exposure is a measure of current unrealized exposure and includes the measure of a counterparty’s incentive to fulfill contractual obligations. Forward exposure measures the risk associated with having a payment default or the need to replace a transaction in the event of delivery default.

6.6 CPA Credit Support
Counterparties may require CPA to post a form of credit support, such as cash or a letter of credit. The Middle Office will ensure that any CPA credit support requirements are evaluated and approved within the context of the overall transaction approval as specified herein.

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25 Section 7: POSITION TRACKING AND MANAGEMENT REPORTING A vital element in the ERMP is the regular identification, measurement and communication of risk. To effectively communicate risk, all risk management activities must be monitored on a frequent basis using risk measurement methodologies that quantify the risks associated with CPA’s procurement-related business activities and performance relative to identified goals.

Minimum reporting requirements are shown below. The reports outlined below will be presented to the RMT, except reports to the Board. Reports will be generated weekly unless otherwise noted.  Financial Model Forecast
Latest projected financial performance, marked to current market prices, and shown relative to CPA’s financial goals.
 Net Position Report
Latest forward net position report, by product type (energy, PCC1, PCC2, Carbon Free Energy and RA capacity) for the current and prompt year.
 Counterparty Credit Exposure
Current counterparty credit exposure compared against limits approved by CPA, as well as the limit assigned to CPA by the counterparty.
 Monthly Risk Analysis
Cash flow forecasting and stress testing of financial forecasts relative to financial goals. Gross margin at risk reporting. Additional discussion of the specific gross margin at risk reporting and its application is provided in the Energy Risk Hedging Strategy.  Monthly Transaction Reporting
The following transactions executed under the authority delegated in Section 5.1.2 will be reported monthly to the Board: (i) Any Tolling Agreement; (ii) any transaction with a Term greater than five years.
 Quarterly Board ReportReporting
Update on activities, projected financial performance, and general market outlook to be presented quarterly at Board meetings, communicated in a way to ensure CPA confidentiality and market sensitive data is not released.

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26 Section 8: ERMP REVISION PROCESS
The ERMP will evolve over time as market and business factors change. At least on an annual basis, the Chief Executive Officer, in consultation with the RMT, will review the ERMP and associated procedures to determine if they should be amended, supplemented, or updated to account for changing business conditions and/or regulatory requirements. If an amendment is warranted, the ERMP amendment will be submitted to the Board for approval. Changes to ERMP appendices may be approved and implemented by the Chief Executive Officer, in consultation with the RMT, with the exception of Appendices B and Cnew transaction types and changes to the Energy Risk Hedging Strategy, which also will require Board approval.

8.1 Acknowledgement of ERMP
All CPA Representatives participating in any activity or transaction within the scope of the ERMP or in the case of a consultant, an executive of the consultant or a delegated representative authorized to bind the consultant with regard to ERMP obligations shall sign, on an annual basis or upon any revision, a statement approved by the Chief Executive Officer, in consultation RMT, that such CPA Representative has:
 Read the ERMP;
 Understands the terms and agreements of said ERMP;
 Will comply with said ERMP;
 If an employee, understands that any violation of said ERMP shall subject the employee to discipline up to and including termination of employment;  If a consultant, understands that any violation of said ERMP may be grounds for consultant contract termination; and
 If a Board member, understands that any violation of said ERMP shall subject the Board member to action by the Board.

8.2 ERMP Interpretations
Questions about the interpretation of any matters of the ERMP should be referred to the Director, Energy Market Risk Management.

All legal matters stemming from the ERMP will be referred to CPA counsel.

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27 Appendix A: DEFINITIONS
Back Office: That part of a trading organization which handles transaction accounting, confirmations, management reporting, and working capital management.

CAISO: California Independent System Operator. CAISO operates a California bulk power transmission grid, administers the State’s wholesale electricity markets, and provides reliability planning and generation dispatch.

Calendar Quarter: A three-month period that commences on January 1, April 1, July 1 or October 1 and ends on March 31, June 30, September 30 or December 31, respectively.

Calendar Year: A 12-month period that commences on January 1 and ends on December 31.

Carbon Free Energy: Energy that is generated from a specific zero carbon emitting generating asset. It is commonly used to note energy from large hydroelectric or nuclear generation that while non-carbon emitting, is not an RPS-eligible generation source. Sometimes referred to as specified source energy.

CCA: Community Choice Aggregator. CCAs allow local government agencies such as cities and/or counties to purchase and/or develop generation supplies on behalf of their residents, businesses and municipal accounts.

CFTC: Commodity Futures Trading Commission. The CFTC is a U.S. federal agency that is responsible for regulating commodity futures and swap markets. Its goals include the promotion of competitive and efficient futures markets and the protection of investors and market participants against manipulation, abusive trade practices and fraud.

Congestion Revenue Right: A point-to-point financial instrument in the Day-Ahead Energy Market that entitles the holder to receive compensation for or requires the holder to pay certain congestion related transmission charges that arise when the transmission system is congested.

Credit Limit: The maximum amount of financial exposure one party is willing to extend to another.

Day-Ahead Market: The short-term forward market conducted by an Organized Market prior to the operating day. It is intended to efficiently allocate transmission capacity and facilitate purchases and sales of energy and scheduling of bilateral transactions.

FERC: Federal Energy Regulatory Commission. FERC is a federal agency that regulates the interstate transmission of electricity, natural gas and oil. FERC also reviews proposals to build liquefied natural gas terminals, interstate natural gas pipelines, as well as licenses hydroelectric generation projects.

Front Office: That part of a trading organization which solicits customer business, services existing customers, executes trades and ensures the physical delivery of commodities.

Franchise Fee: A franchise fee is a percentage of gross receipts that an IOU pays cities and counties for the right to use public streets to provide gas and electric service. The franchise fee surcharge is a percentage of the transmission (transportation) and generation costs to customers choosing to buy their energy from third parties. IOUs collect the surcharges and pass them through to cities and counties.

IOU: An Investor Owned Utility (IOU) is a business organization providing electrical and/or natural gas services to both retail and wholesale consumers and is managed as a private enterprise.

Limit Structure: A set of constraints that are intended to limit procurement activities.

Maturity Limit: The maximum time period between transaction execution date and the date of the final Agenda Page 57
28 delivery of the contracted product.

Middle Office: That part of a trading organization that measures and reports on market risks, develops risk management policies and monitors compliance with those policies, manages contract administration and credit, and keeps management and the Board informed on risk management issues.

New Build: The development and construction of a new generating or storage facility or an expansion, upgrade, or redevelopment of an existing facility where incremental capacity is offered.

PCIA: Power Cost Indifference Adjustment or successor. The PCIA is intended to compensate IOUs for their stranded costs when a bundled customer departs and begins taking generation services from a CCA.

Portfolio Content Category 1 (PCC1) Renewable Energy: Energy and bundled Renewable Energy Credits that is simultaneously procured from an RPS-Eligible Facility that is directly interconnected to the distribution or transmission grid within a California balancing authority area (CBA); or that is not directly interconnected to a CBA but is delivered to a CBA without substituting electricity from another source.

Portfolio Content Category 2 (PCC2) Renewable Energy: Energy and bundled Renewable Energy Credits that is simultaneously purchased from an RPS-Eligible Facility, but the energy is firmed and shaped with substitute electricity scheduled into a CBA within the same calendar year as the renewable energy is generated.

Portfolio Content Category 3 (PCC3) Renewable Energy: Renewable Energy Credits from RPS-eligible facilities that do not meet the definition of PCC1 or PCC2.

Prompt Quarter (PQ): The Calendar Quarter beginning immediately after the current Calendar Quarter.

PQ + n is the nth Calendar Quarter following Prompt Quarter.

Prompt Year (PY): The Calendar Year beginning immediately after the current Calendar Year.. PY + n is the nth Calendar Year following Prompt Year.

Real-Time Market: The real-time market is a spot market in which LSEs can buy power to meet the last few increments of demand not covered in their day ahead schedules, up to 75 minutes before the start of the trading hour.

Resource Adequacy Capacity: A capacity product whereby a Seller commits to a must offer obligation of its generator in the CAISO market and on behalf of a specified Load Serving Entity.

RPS-Eligible Facility: Defined under CA Public Utilities Code § 399.11 et seq. and CA Public Resources Code § 25740 et seq. as an electrical generating facility using technologies such as biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric generation of 30 megawatts or less, ocean wave, ocean thermal, or tidal current.

Settlement: Settlement is the process by which counterparties agree on the dollar value and quantity of a commodity exchanged between them during a particular time interval.

Stress testing: Stress testing is the process of simulating different financial outcomes to assess potential impacts on projected financial results. Stress testing typically evaluates the effect of negative events to help inform what actions may be taken to lessen the negative consequences should such an event occur.

System of Record (SOR): An information storage system that is the authoritative data source for a given data element or piece of information.

Term Limit: The total duration of the contract counted as the maximum time period between the beginning flow date of contracted product deliveries and the ending flow date of contracted product Agenda Page 58
29 deliveries, inclusive.

Tolling Agreement: An agreement between a power buyer and a power generator, under which the buyer supplies the fuel, either physically or financially, and receives an amount of power generated based on an assumed conversion rate at an agreed cost. Typically used for generation facilities powered by natural gas and excludes battery storage.

Vacancy: A vacancy exists in the case of death, incapacity, illness, an excused absence, family emergency, jury duty, religious observance, vacation, resignation or termination of employment from CPA, a material change in a member’s job duties or responsibilities, conflict of interest, or an unavoidable absence.

Agenda Page 59
30 Appendix B: ENERGY RISK HEDGING STRATEGY

1.1 Introduction
CPA is routinely exposed to commodity price risk and volume variability risk in the normal conduct of serving the power supply requirements of its customers.

This Energy Risk Hedging Strategy (ERHS) describes the strategy and framework that CPA will use to hedge the power supply requirements of its customers. Specific focus is on procurement of the following market-based products:
 Fixed Priced Energy
 Portfolio Content Category 1 Renewable Energy
 Portfolio Content Category 2 Renewable Energy
 Carbon Free Energy
 Resource Adequacy Capacity
In addition to market-based transactions entered into pursuant to this ERHS, CPA will also enter into longer-term power purchase agreements (PPAs) pursuant to statutory requirements (e.g., SB 350 mandate to, by 2021, procure a minimum of 65 percent of RPS requirements under a 10-year or longer power purchase agreement), as well as voluntary long-term resource acquisition decisions made independently by CPA pursuant to its Integrated Resource Plan or other approved Board-approved strategies. Long-term Power Purchase Agreements (PPAs) will count as hedges as described later in this ERHS.

2.1 Governance
This ERHS shall be updated, as necessary, from time to time and governed by the Energy Risk Management Policy (EMRPERMP) approved by the CPA Board of Directors.

3.1 Hedging Program Goals
The overall goal of the ERHS is to identify exposure to commodity prices, quantify the financial impact variability in commodity prices, load requirements and generation output may have on the ability of CPA to meet its financial program goals, and manage the associated risk.

The primary goals that guide this ERHS are:
 Acquire a portfolio of resources with lower greenhouse gas emissions and higher renewable content than SCE;
 Meet reliability requirements established by the state of California, and operate in a manner consistent with prudent utility practice;
 Maintain competitive retail rates with SCE after adjusting for exit fees (currently the Power Charge Indifference Adjustment or PCIA) and Franchise Fees paid by CPA customers;  Build financial reserves to ensure the CPA’s long-term financial objectives are achieved.

All hedging activities will be conducted to achieve results consistent with the above goals and to meet the Agenda Page 60
31 power supply requirements of CPA’s customers. Any transaction that cannot be directly linked to a requirement of serving CPA’s customers, or that serves to reduce risk is prohibited.

4.1Hedging Targets and Strategies

4.1.1 Fixed Price Energy
Fixed Price Energy purchases provideallow for suppliers to deliver energy – for which CPA will receive energy market revenues – to CPA at a fixed price. They are used to manage the electricity commodity price risk that the CPA faces as a Load Serving Entity. Specific to CPA’s customers, Fixed Price Energy hedges are used to provide cost certainty and rate stability.

CPA predominantly employs Fixed Price Block Energy contracts, which provide for suppliers to deliver a predetermined volume of energy at a constant delivery rate. As CPA enters into long- term, fixed price contracts for renewable and/or carbon-free energy, these will likewise hedge CPA’s market risk and, subsequently, reduce the required volume of Fixed Price Block Energy purchases.

When assessing its requirements for Fixed Price Energy, CPA will use an econometric model to forecast hourly energy requirements and monthly peak demand by customer load class. The model will use historical data to estimate relationships between energy consumption and economic, demographic and/or weather variables. The model will be refined through time as additional load and other data is acquired. CPA employs Fixed Price Block Energy contracts, which provide for suppliers to deliver a predetermined volume of energy at a constant delivery rate. As CPA enters into long- term, fixed price contracts for renewable and/or carbon-free energy, these will likewise hedge CPA’s market risk and, subsequently, reduce the required volume of Fixed Price Block Energy purchases. Long term contracting has the further effect of increasing the hedge percentage in the second calendar quarter of the year above the hedge percentage in other quarters because energy consumption is lowest in the second quarter. An aAdjustments to the Maximum Hedge percentage in the second quarter, as described in the following paragraph, addresses this dynamic.

CPA will observe the following schedule when hedging its Fixed Price Energy Requirements. for the first, third and fourth calendar quarters of each calendar year. The following schedule will also apply to the second calendar quarter, provided that 20% is added to the Maximum Hedge Percentage in prompt quarters +10-39, raising the limit from 70% to 90%. The Minimum and Maximum hedge %Hedge Percentage represent the Fixed Price Energy planned or under contract divided by forecasted load.

Quarter
Minimum
Hedge %
Maximum Hedge
%
Prompt Q (PQ) 85% 110%%*
PQ + 1 80% 110%%*
PQ + 2 74% 110%%*
PQ + 3 69% 110%%*
PQ + 4 63% 105%%*
PQ + 5 58% 99%
PQ + 6 52% 93%
Agenda Page 61
32 PQ + 7 47% 87%
PQ + 8 41% 82%
PQ + 9 36% 76%
PQ + 10 -– 39 (Q1) 30% 70%
PQ + 10 – 39 (Q2) 30% 90%
PQ + 10 – 39 (Q3) 30% 70%
PQ + 10 – 39 (Q4) 30% 70%
* Maximum hedge percentages allow for a planning margin to accommodate volumetric uncertainty associated with electric consumption and generation Energy hedging compliance will be measured within 5 days prior to the first day of each quarter (e.g., on a date between September 26th and September 30th , 20232024, CPA will have hedged 85 to 110 percent of its projected energy requirements for Q4 20232024 and 80 to 110 percent of requirements for Q1 20242025).

The minimum hedge level will be achieved by implementing a time-driven programmatic strategy. Time-driven programmatic hedges are executed at a predetermined rate pursuant to a time schedule and without regard for market conditions. The purpose of these hedging transactions is to achieve a reduction in variability in power supply costs by gradually increasing the amount of energy hedged as the actual date of consumption approaches. Time-driven strategies avoid the inherent impossibility of trying to consistently and accurately “time the market” to purchase energy at least cost when making hedging decisions. Additionally, a load serving entity the size of CPA needs to spread its procurement efforts over time to effectively manage the potential negative price impacts of procuring a large volume of energy, over a short period of time, in an illiquid market.

Hedging decisions to reach targets between the minimum and maximum hedge levels will be based on price-driven or opportunistic strategies. The purpose of price-driven or opportunistic strategies is to capitalize on market opportunities when conditions are favorable. CPA will base its decision to execute opportunistic hedges on the anticipated impact to projected power supply costs and the resulting reduction in risk.

Opportunistic hedges may be executed when energy price levels are favorable to lowering the cost of power relative to established program goals and financial projections; alternatively, opportunistic hedges can be executed in adverse market conditions relative to financial goals in order to reduce the potential negative impact of continued upward trending commodity prices relative to established goals.

In executing this ERHS, Fixed-Price Energy hedges may be modified, repositioned, sold or unwound for the purpose of maintaining hedge coverage that matches changes in forecast electric load. This includes the ability of the CPA to use liquid market products to hedge average loads over a defined time period and then later modify its hedges to more precisely match load.

4.1.2 Renewable Energy
In order to cost-effectively meet its GHG-reduction and renewable energy goals, CPA intends to meet a Agenda Page 62
33 growing share of its energy supply requirements with renewable energy, a large portion of which will be Product Content Category 1 (PCC1) renewable energy. PCC1 renewable energy is sourced from a renewable generator that is either directly interconnected to the California Independent System Operator (CAISO) or another California Balancing Authority or directly scheduled into CAISO without use of substitute energy. CPA shall diversify its renewable energy portfolio further by incorporating Portfolio Content Category 2 (PCC2) renewable energy purchases. PCC2 renewable energy is sourced from renewable generators located outside the state of California- where that generation is “firmed and shaped” for delivery into California. PCC2 purchases are typically less expensive and shorter in term than PCC1, so they provide a cost-effective and flexible method of augmenting CPA’s renewable energy purchases to meet renewable portfolio content commitments to customers. However, not all PCC2 renewable energy is emissions-free; therefore, CPA must assess the value of PCC2s against its respective emissions intensity. In addition, RPS compliance rules set minimum requirements for PCC1 and PCC2 as a percentage of the total RPS compliance portfolio, which CPA will abide by in its procurement of both products.

In order to manage price risk of long-term renewable energy, and to allow CPA to prudently and methodically build a portfolio of long-term assets, CPA intends to meet its renewable energy targets with a blend of short and long-term contracts. CPA intends to fully comply with long-term contracting requirements mandated by SB 350; therefore, executed and planned long-term renewable contracts will be reflected in CPA’s renewable energy positions.

CPA shall observe the following schedule while hedging its renewable energy requirements. This hedge schedule shall be measured within 5 days prior to the first day of each quarter for the Current Calendar Year, and within 5 days prior to December 1 of each year for the following ten Calendar Years.

Time Period Minimum Hedge % Maximum Hedge %
Current Calendar Year 90 110*
Prompt Calendar Year 80 110*
PY + 1 50 105
PY + 2 50 100
PY + 3 50 95
PY + 4 -– 9 50 95
* Maximum hedge percentages allow for a planning margin to accommodate volumetric uncertainty associated with electric consumption and generation * Maximum hedge percentages allow for a planning margin to accommodate volumetric uncertainty associated with electric consumption and generation

4.1.3Carbon Free Energy
In pursuit of its GHG-reduction objections, CPA shall augment its renewable energy purchases outlined above with energy purchases from carbon-free energy generating facilities, which are typically hydro-electric resources located in California that are too large to qualify as Eligible Renewable Resources (30 MW or greater) or located outside of California. Similar to PCC2 renewable energy contracts, carbon-free Agenda Page 63
34 energy purchases are typically short-term, most frequently one to three years in length.

CPA may have the opportunity to receive free carbon free allocations from SCE. Hedging activity should consider these allocations and expected allocations should be included in the hedging percentage.

CPA will observe the following schedule when hedging its Carbon-Free renewable energy requirements.

This hedge schedule shall be measured within 5 days prior to the first day of each quarter for the Current Calendar Year, and within 5 days prior to December 1 of each year for the following ten Calendar Years.

Time Period Minimum Hedge % Maximum Hedge %
Current Calendar Year 85 110*
Prompt Calendar Year 75 110*
PY + 1 50 110
PY + 2 25 100
PY + 3 0 75
PY + 4 -– 9 0 75
* Maximum hedge percentages allow for a planning margin to accommodate volumetric uncertainty associated with electric consumption and generation In setting the above targets, it is important to note that the purchase of Carbon Free Energy is a voluntary requirement set by the CPA Board to exceed SCE’s GHG emissions goals. In determining the total volume of Carbon Free Energy to be hedged, the CPA Board may elect to increase or reduce the total quantity of Carbon Free Energy included in CPA’s portfolio as it seeks to balance multiple program objectives, including financial goals such as targets for financial reserves and retail rates.

4.1.4 Resource Adequacy Capacity
As a Load-Serving Entity (LSE) in California, CPA is required to demonstrate both annually and monthly that it has secured sufficient energy capacity to provide for its share of California’s energy load; this capacity is referred to as Resource Adequacy (RA). Because CPA serves customers in SCE’s service territory, CPA has local RA requirements specific to the Los Angeles Basin and Big Creek/Ventura local areas, as well as generalCPA has RA requirements for Southern California (“South of Path 26 System”), a portion of which must be Flexible RA. Flexible RA requirements ensure resources are available on the grid to provide ancillary services such as ramping and regulation.

RA is typically transacted via contracts that vary in length, and it is currently bought and sold via a bilateral market, which not only provides cost-effective contracting opportunities but also proves at times to be fragmented and volatile. It is the goal of CPA to meet all RA requirements, including local, flex, and system products.

CPA will observe the following schedule when hedging its RA requirements. The hedge schedule shall be measured for the system RA product by monthfor the RA Net Peak Hour that CPA is required to procure within 5 days prior to December 1 of each year for the Prompt Calendar year and the nine subsequent calendar years. where the RA Net Peak Hour represents the hour of the calendar year in which the CPA’s hourly RA under contract minus its RA requirement is the smallest measured in MW.

Agenda Page 64
35 Time Period Minimum Hedge %
(applicable to all monthshours)
Maximum Hedge %
(applicable to peak monthRA Net
Peak Hour only)2
Prompt Calendar Year 90 100105*
PY + 1 50 95
PY + 2 35 90
PY + 3 35 80
PY + 4 -– 9 35 80
* Maximum hedge percentages allow for a planning margin to accommodate volumetric uncertainty associated with electric consumption and generation

4.1.5 Congestion Revenue Rights (CRRs)
As a CAISO market participant, CPA has congestion risk associated with serving its customer load. CPA manages congestion risks by preferring day ahead scheduling of energy delivered at SP-15, and by resource assessment and selection consistent with this Policy. Once energy is procured, CPA manages congestion risk through the prudent management of CRRs, which are financial instruments used to hedge against transmission congestion costs encountered in the CAISO day-ahead market. The RMT is responsible for overseeing the management of CRRs and CRR trading. The CRR portfolio will be managed by CPA's Front Office with support from CPA’s Scheduling Coordinator. CRRs are transacted to effectively manage portfolio congestion risk. Trading of CRRs for speculative purposes is not permitted. 2 Due to the variable nature of CPA’s monthly RA requirements, non-peak monthshours other than the RA Net Peak Hours may exceed the applicable Maximum Hedge %.

Agenda Page 65
36 5.1Hedge Program Metrics
The success of the Energy Risk Hedging Strategy will be measured by realizing power supply costs in line with the budgeted power supply costs used to set customer rates, as well as by reducing CPA’s exposure to commodity price risk.

Current projected power supply costs will be compared to budgeted power supply costs where budgeted costs will be based on the assumptions used at the time customer generation rates are set. Current power supply costs shall use all fixed priced contracts executed as of the date of the report. All open positions will be marked to market and compared to the budgeted power supply costs.

The Front and Middle Office will use a variety of industry standard metrics to evaluate open positions and potential hedge transactions. RMT will review these metrics when making price-driven or opportunistic hedging decisions to ensure that the transactions are consistent with the goals of the Energy Risk Hedging Strategy. These metrics will be updated and reported on a monthly basis.

6.1Reporting Requirements
The following reporting is required to manage the hedge program and to ensure its success:
 Net position report for each product
 Current projected power supply costs compared to budget  Gross margin at Risk
 GHG intensity
Agenda Page 66
37 Appendix C: AUTHORIZED TRANSACTION TYPES
All transaction types listed below must be executed within the limits set forth in the ERMP. Definitions for each product are provided in Appendix A.
 CAISO Market Products
o Day-Ahead Market Energy (Energy purchased from the CAISO Day-Ahead Market.) o Real-Time Market Energy (Energy purchased from the CAISO in the Real-Time Market) o Congestion Revenue Rights (A point-to-point financial instrument in the Day-Ahead Energy Market that entitles the holder to receive compensation for or requires the holder to pay certain congestion related transmission charges that arise when the transmission system is congested.)
o Convergence Bids (Financial positions, either demand or supply, taken in the Day-ahead Market and liquidated in the Real-Time Market.)
o Inter-Scheduling Coordinator Trades (A trade between two Scheduling Coordinators that is a settlement service that CAISO offers to parties of a bilateral contract as a means of offsetting CAISO settlement charges against bilateral contractual payment responsibilities.)  Physical Energy Products
o Short-Term Energy (Energy traded in the CAISO market or bilaterally for a duration less than one year.)
o Long-Term Energy (Energy traded in the CAISO market or bilaterally for a duration greater than one year.)
o Physical Over-the-Counter (OTC) Options (Call options that give the buyer the right, but not the obligation, to buy an underlying power product at agreed upon terms as detailed in a confirmation agreement; or put options that give the seller the right, but not the obligation, to sell an underlying power product at agreed upon terms as detailed in a confirmation letter.)  Resource Adequacy Capacity (A capacity product whereby a Seller commits to a must offer obligation of its generator in the CAISO market and on behalf of a specified Load Serving Entity.)  Import Capability Rights (Entitles an LSE to count Resource Adequacy products at a specified import location toward its Resource Adequacy Requirements.)  Physical Environmental Products
o PCC1, PCC2 and PCC3 Renewable Energy (see definition in Appendix A)3 o Carbon Free Energy (see definition in Appendix A)
o Air Resource Board Allowances (An allowance is a tradeable permit issued by the California Air Resource Board to emit one metric ton of a carbon dioxide equivalent greenhouse gas emission.)
 Financial Hedging Products
o Futures Contracts (A contract to buy or sell a commodity (electricity) at a predetermined price at a specified time in the future. Futures Contracts are standardized for quality and quantity to facilitate trading on a futures exchange (e.g., Intercontinental Exchange).) 3 Clean Power Alliance’s Joint Power’s Agreement discourages the purchase and use of PCC3 products. PCC3 products will only be acquired under exceptional circumstances requiring the use of this product to achieve the agency’s environmental and financial goals.

Agenda Page 67
38 o Swaps (Financial contracts in which one party agrees to pay a cash flow calculated by multiplying a fixed volume by a fixed price (fixed price payer) and the other party agrees to pay a cash flow calculated by multiplying the same fixed volume times a market reference index price (floating price payer). At settlement, the party owing the higher amount pays the net difference. Swaps are transacted in over-the-counter markets.) o Call and Put Options (Call options give the buyer the right, but not the obligation, to purchase energy or other instruments. Put options give the buyer the right, but not the obligation, to sell energy or other instruments.)
o Options on Swaps (Swaptions) (call options give the buyer the right, but not the obligation, to enter into a swap transaction as the fixed price payer. A put option gives the buyer the right, but not the obligation, to enter into a swap transaction as the floating priced payer.)  Transmission (The reservation and transmission of capacity and energy between two points on a transmission provider’s system.)
 Tolling Agreements An agreement between a power buyer and a power generator, under which the buyer supplies the fuel, either physically or financially, and receives an amount of power generated based on an assumed conversion rate at an agreed cost. Typically used for generation facilities powered by natural gas and excludes battery storage.

Agenda Page 68
39 Appendix D: NEW TRANSACTION TYPE APPROVAL FORM
New Transaction Type Approval Form
Prepared By:

Date:

New Transaction Type Name:

Business Rationale and Risk Assessment:
 Product description – including the purpose, function, expected impact on net revenues (i.e., increase, manage volatility, control variances, etc.) and/or benefit to CPA  Identification of the in-house or external expertise that will be relied upon to manage and support the new or non-standard transaction
 Assessment of the transaction’s risks, including any material legal, tax or regulatory issues  How the exposures to the risks above will be managed by the limit structure  Proposed valuation methodology (including pricing model, where appropriate)  Proposed reporting requirements, including any changes to existing procedures and system requirements necessary to support the new product
 Proposed accounting methodology
 Proposed Middle Office work flows/methodology, including systems  Brief description of the responsibilities of various departments within CPA who will have any manner of contact with the new or non-standard transaction Reviewed by:

Vice President, Power Supply Date
Chief Operating Officer Date
Chief Executive Officer Date
Agenda Page 69
Appendix E: NOTICE OF CONFLICT OF INTEREST
To: [insert title]
Declaration of Conflict of Interest
I understand that I am obligated to give notice in writing to Clean Power Alliance of any interest or relationship that I may have in any counterparty that seeks to do business with Clean Power Alliance, and to identify any real or potential conflict of interest such counterparty has or may have with regard to any existing or potential contract or transaction with Clean Power Alliance, within 48-hours of becoming aware of the conflict of interest.

I would like to declare the following existing/potential conflict of interest situation arising from the discharge of my duties concerning Clean Power Alliance activities covered by the scope of the ERMP:
a) Persons/companies with whom/which I have official dealings and/or private interests:
b) Brief description of my duties which involved the persons/companies mentioned in item a) above.

Position and Name:

Signature:

Date:

Agenda Page 70
Appendix F: CODE OF MARKETING AND TRADING PRACTICES
See next page.

Agenda Page 71
CPA Code of Marketing and Trading Practices, Version 1.1 (updated July 18, 2019)
Clean Power Alliance of
Southern California
Code of Marketing and Trading Practices
July 12, 2018
Definitions
Marketing and Trading Employee – Any employee, contractor, consultant, or agent of CPA who engages in procurement activity.

Scope of Code
This Code of Marketing and Trading Practices (the “Code”) applies to all CPA Marketing and Trading Employees.

Each person subject to this Code is required to read, understand, and abide by the provisions contained in this Code.

Purpose
In addition to demonstrating CPA’s commitment to ethical business practices, this Code is designed to ensure that CPA complies with its obligations under state and federal laws, rules and regulations promulgated by various governmental agencies, and applicable policies adopted by CPA. This Code defines and affirms the values and principles that CPA’s Marketing and Trading Employees must follow in conducting their business activities. The Code is intended to complement the other policies, procedures and processes of CPA and to guide traders and marketers as they negotiate transactions, arrange for transmission, and manage risk.

Compliance with the Code allows CPA to assure its counterparties, potential customers, regulators, and the public that its business activities are, and will continue to be, conducted with integrity and unlawful/unethical trading practices will not be tolerated.

Questions about compliance with industry and company regulations as well as with this Code should be referred to CPA’s General Counsel.

Policy
CPA’s Marketing and Trading Employees shall:

1. Conduct business in good faith and in accordance with all applicable laws, regulations, tariffs and rules.

2. Endeavor to always act in the best interests of CPA’s customers.

3. Not disseminate, cause to be disseminated or facilitate the dissemination of known false or misleading information, or engage in transactions in order to exploit known false or misleading information.

4. Engage only in transactions with legitimate business purposes.

5. Not knowingly arrange or execute wash trades.

6. Not engage in any activity with the intent to alter any market price or otherwise interfere with the normal operation of a well -functioning competitive market.

7. Not engage in price reporting or furnishing transaction prices to any entity that collects prices to be used in the calculation of a price index or for distribution to subscribers, without prior written approval of CPA’s General Counsel.

8. Not collude with other market participants to: (i) affect the price of any commodity; (ii) allocate territories, customers or products; or (iii) otherwise restrain competition.

Agenda Page 72
CPA Code of Marketing and Trading Practices, Version 1.1 (updated July 18, 2019)

9. Not engage in transactions for commodities or services without the intention of providing those specific commodities or services.

10. Not reserve service, attempt to reserve service, access information, or attempt to access information from any transmission service provider except through means available to all eligible customers.

11. Successfully complete yearly CPA compliance training.

12. Comply with requirements that trading and marketing activities are recorded and retained.

13. Cooperate with any audit or investigation into trading and marketing activities.

Duty to Report Violations and Non-Retaliation Clause
A Marketing and Trading Employee who believes that a violation of the Code has occurred is required to promptly notify CPA’s Chief Operating Officer. CPA shall make every effort to ensure the confidentiality of the reporting Marketing and Trading Employee. If the reporting Marketing and Trading Employee is a CPA employee, CPA shall not discharge, suspend, demote, harass, layoff, deny a promotion, or take any other retaliatory action against that employee solely as a result of the act of reporting a suspected violation of the code. This in no way affects CPA’s rights as an employer with respect to all other issues. CPA will monitor and follow up to ensure that employees who have reported alleged violations have not been subject to retaliation.

Disciplinary Action
Any failure to abide by this Code, including the Duty to Report Violations, will result in disciplinary action. All potential violations are handled on a case-by-case basis and will result in a full review by, at minimum, the following individuals: the CPA employee’s immediate supervisor and CPA’s General Counsel. Factors that are considered in setting the disciplinary action plan include but are not limited to: source of violation discovery (self-reported, peer-reported, reported by a third party, via internal procedures, or the result of an audit), intent (accidental or intentional), type and magnitude of risk that the CPA employee exposed CPA to (financial, reputation, etc.), and frequency of the violation (first offense or history of multiple offenses).The disciplinary actions taken may involve demotion, loss of compensation (suspension without pay), and termination of employment.

I have read CPA’s Code of Marketing and Trading Practices, understand its requirements, and agree to abide by its provisions.

Signature Printed Name Date
Agenda Page 73
CPA Code of Marketing and Trading Practices, Version 1.1 (updated July 18, 2019)
Appendix G: CEO SIGNING AUTHORITY DELEGATION FORM
Signing Authority Delegated To:

Effective Date:

Expiration Date:

Product:

CPA Buys/Sells
Delivery and Maturity Term:

Maximum Volume (per transaction):

Maximum Price:

Maximum Notional (cumulative):

CEO and RMT Reporting – specify
intended date of report, data to be
reported, and frequency (required):

Other Notes/Guidelines:

Chief Executive Officer approval signature:

Agenda Page 74
Staff Report – Agenda Item 3
To: Board of Directors
From: Lindsay Descagnia, Vice President, Power Supply
Approved by: Ted Bardacke, Chief Executive Officer
Subject: Task Order with GDS Associates, Inc. (GDS) for Technical Evaluation and Support Services for 2024 Clean Energy and Reliability RFO and Ongoing Contract Related Issues
Date: July 11, 2024

RECOMMENDATION
Authorize the Chief Executive Officer to execute Task Order No.1 with GDS for 2024 Clean Energy and Reliability RFO technical evaluation and ongoing contract related support services for a Not-To-Exceed (NTE) amount of $150,000.

BACKGROUND
On June 11, 2024, CPA launched a solicitation for long-term power purchase agreements, resource adequacy purchase agreements, and energy storage contracts (“2024 Clean Energy and Reliability RFO”) to procure long-term energy and energy storage resources.

Projects procured in the 2024 Clean Energy and Reliability RFO are intended to meet overall energy and Resource Adequacy portfolio needs and to comply with the California Public Utilities Commission (CPUC) procurement order for all load-serving entities to procure new reliability capacity including long-duration storage, baseload renewable energy1 and Renewable Portfolio Standard and Resource Adequacy compliance requirements. The 2024 Clean Energy and Reliability RFO process is estimated to be completed over a nine-month timeframe. Based on the responses received from previous RFOs and the project eligibility requirements from the CPUC order, CPA is anticipating a diverse set of responses to the 2024 Clean Energy and Reliability RFO from a variety of 1On June 24, 2021, the CPUC issued its Decision Requiring Procurement to Address Mid-Term Reliability (2023-2026), D.21-06- 035, which orders load serving entities, including CPA, to procure 11,500 MW of new capacity statewide to replace the capacity retiring from the Diablo Canyon Power Plant as well as several once-through-cooling (OTC) thermal power plants.

Agenda Page 75
technologies and with highly complex offer structures.

New renewable energy and energy storage projects are facing increasing challenges in connecting to electricity grid in California and throughout the West. As a result, as part of the 2024 RFO evaluation process, CPA needs to independently assess a project’s likelihood of achieving interconnection in a timely fashion. In addition, some projects for which CPA has already signed contracts are experiencing interconnection challenges and CPA is in need of independent advice in responding to developer claims and requests for assistance.

As such, in support of CPA’s 2024 Clean Energy and Reliability RFO and the need for technical and engineering support for the management and administration of existing Power Purchase Agreements within CPA’s portfolio, staff issued a Task Order Solicitation to acquire technical consulting services for three tasks: (1) Technical evaluation of selected RFO offers, (2) Technical evaluation and screening of selected RFO offers with early-stage development in CAISO’s Queue Cluster 15, and (3) Support services for ongoing contract related issues outside of the 2024 Clean Energy and Reliability RFO.

Selection Process
The Task Order Solicitation was sent to all of CPA’s pre-qualified providers and there were two respondents. GDS was selected because it offered to provide services in all the tasks being solicited and offered the Best Value to CPA. GDS is an energy consulting firm offering specialized technical knowledge of the regional transmission system and all stages of renewable energy and storage project development.

The fees for the primary task of evaluating projects submitted into the 2024 Clean Energy and Reliability RFO will not exceed $117,500. The Task Order authorizes additional services in the event that CPA needs analysis of additional alternative proposals, bilateral offers or ad-hoc technical support for contract related issues. If CPA chooses to utilize these optional services, the amount these fees have a not-to-exceed amount of $32,500 for a total contract not-to-exceed amount of $150,000.

Board of Directors Item 3
Agenda Page 76

FISCAL IMPACT
Expenditures associated with the proposed Task Order were included in the Board-approved FY 2024/25 Budget.

ATTACHMENT

1. GDS Task Order No.1
Board of Directors Item 3
Agenda Page 77
A-2
EXHIBIT E-1

MASTER AGREEMENT TASK ORDER
(Time and Materials Basis)
GDS ASSOCIATES, INC.
(“Contractor”)
Task Order No. 1 CPA Master Agreement No. 2024-04-09
Project Title:

Technical Evaluation Services for 2024 Clean Energy &
Reliability RFO and Support Services for Ongoing
Contract Related Issues
Period of Performance: July 12, 2024, through July 11, 2025 CPA Project Director: Theodore Bardacke
CPA Task Order
Manager: Lindsay Descagnia

1. GENERAL

1.1.Contractor shall satisfactorily perform all the tasks and provide all the Services detailed in the Task Order attached hereto as Exhibit C1-A, on a time and materials basis, in compliance with the terms and conditions of Contractor’s Master Agreement.

2. PERSONNEL

2.1.Contractor shall provide the below-listed personnel whose labor rates are as shown:

Name Skill Category Hourly Rate
Garrett Cole Vice President $370
Don Tretheway Director, Markets & Regulatory Policy $370 Claudiu Cadar Director, Transmission Planning & Policy $350 Perry Servedio Senior Project Manager $350
Matt Smith Senior Project Manager $350
Justin Hey Project Manager $310
Rachel Risley Project Engineer $285
Mike Castelhano Project Consultant $285
Ed Kiolbasa Analyst $205

3. PAYMENT

3.1.The Total Maximum Amount that CPA shall pay Contractor for all Services to be provided under this Task Order is shown below:

Agenda Page 78
A-2
Task Description Maximum
Amount*
Task #1: Fast-Track Technical Evaluation of up to three (3) QC 14 (or earlier) Projects, with a Not-to-Exceed (“NTE”) amount of $12,500 per project
$37,500
Task #1: Technical Evaluation of up to ten (10) QC 14 (or earlier) Projects, with an NTE amount of $80,000 (or less if the projects are less than 5 in total; See Section 3.2)
$80,000
Task #2: Preliminary Screening Evaluation of up to Forty (40) QC 15 Projects, with an NTE amount of $25,000
Task #3: Support Services for Ongoing Contract Related Issues $32,500
Total Maximum Amount: $150,000
* Note: At CPA’s discretion and direction, unspent budget can be reallocated between Tasks.

3.2.The NTE for the Task #1 Technical Evaluation Services set forth in Section 3.1 above shall be determined based upon the number of projects reviewed, as set forth in the table below. The NTE will be established at the outset of the work based on the initial number of projects requested for review by CPA.

Total Number of
Requested Projects
NTE Amount for Task #1
Technical Evaluation Services
0-4 $50,000
5-10 $80,000

3.3.Contractor shall invoice CPA only for hours actually worked, in accordance with the terms and conditions of Contractor’s Master Agreement. Contractor shall be responsible for limiting the number of hours worked by Contractor personnel under this TASK ORDER, not to exceed the Total Maximum Amount in Section

3.1, above.

3.4.Contractor shall satisfactorily perform and complete all required Services detailed in the Task Order attached hereto as Exhibit C1-A notwithstanding the fact that total payment from CPA shall not exceed the Total Maximum Amount.

3.5.Contractor shall submit all invoices under this Task Order to:

Clean Power Alliance
Attn: Accounts Payable
801 S. Grand Ave, Ste. 400
Los Angeles, CA 90017
Email: [email protected]

4. SERVICES

Agenda Page 79
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4.1.In accordance with Master Agreement Section 2, Contractor may not be paid for any task, deliverable, service, or other work that is not specified in this Task Order, and/or that utilizes personnel not specified in this Task Order, and/or that exceeds the Total Maximum Amount of this Task Order, and/or that goes beyond the expiration date of this Task Order.

4.2.ALL TERMS OF THE MASTER AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT. THE TERMS OF THE MASTER AGREEMENT SHALL

GOVERN AND TAKE PRECEDENCE OVER ANY CONFLICTING TERMS
AND/OR CONDITIONS IN THIS TASK ORDER. NEITHER THE RATES NOR

ANY OTHER SPECIFICATIONS IN THIS TASK ORDER ARE VALID OR

BINDING IF THEY DO NOT COMPLY WITH THE TERMS AND CONDITIONS OF THE MASTER AGREEMENT.

4.3.Contractor’s signature on this Task Order document confirms Contractor’s awareness of the terms and conditions of the Master Agreement and specifically with the provisions of Section 2 of the Master Agreement, which establish that Contractor shall not be entitled to any compensation whatsoever for any task, deliverable, service, or other work:

4.3.1. That is not specified in this Task Order, and/or

4.3.2. That utilizes personnel not specified in this Task Order, and/or

4.3.3. That exceeds the Total Maximum Amount of this Task Order, and/or

4.3.4. That goes beyond the expiration date of this Task Order.

REGARDLESS OF ANY ORAL PROMISE MADE TO CONTRACTOR BY ANY CLEAN POWER ALLIANCE PERSONNEL WHATSOEVER.

GDS ASSOCIATES, INC. CLEAN POWER ALLIANCE
By: By:

Name: Name:

Title: Title:

Date: Date:

Agenda Page 80
A-2
EXHIBIT E1-A
GDS ASSOCIATES, INC.

TASK ORDER DESCRIPTION

PROJECT TASKS AND DELIVERABLES
Contractor shall be responsible for providing technical evaluation of proposals submitted to CPA’s 2024 Clean Energy and Reliability RFO (the “RFO”) for long-term clean energy, storage, Resource Adequacy (RA) and dispatchable thermal energy contracts.

Contractor must account for the following tasks and all tasks must be completed according to the timelines set forth below:

Task #1: Technical Evaluation of Projects, Including Fast Track Projects.

1. Interconnection:

1.1.Review all project specific documentation including but not limited to Phase 1 & 2 studies, executed interconnection agreements, utility work plans, etc.

1.2.Provide feedback on schedule, scope, budget, viability, etc.

1.3.For projects that do not have an executed interconnection agreement (IA), provide an opinion on the prospect for eventually receiving an IA.

1.4.Provide analysis on the effect of the Transmission Planning Process (TPP), in-progress upgrades and expected planning that may benefit or harm the project in the future.

1.5.Assign risk score of low, medium and high for this category and provide reasoning for score.

2. Deliverability:

2.1.Review projects with Full Capacity Deliverability Status (FCDS) for irregularities or red flags.

2.2.Review projects without FCDS to determine the chances for achieving deliverability status, including what factors would be needed to achieve FCDS.

2.3.Assign risk score of low, medium and high for this category and provide reasoning for score.

3. Congestion Analysis.

3.1.Nodal level review related to area load and generation using both historical pricing and forward curves.

3.2.Impact of current projects, in-queue projects and TPP.

Agenda Page 81
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3.3.Assign risk score of low, medium and high for this category and provide reasoning for score.

4. Project Feasibility.

4.1.High level assessment/red flag analysis of the following categories:

4.1.1. Zoning.

4.1.2. Permitting.

4.1.3. Proposed technology.

4.1.4. Development timeline.

4.1.5. Site plan and single-line diagrams.

4.2.Assign risk score of low, medium and high for this category and provide reasoning for score.

Task #1 Deliverables:

1. Contractor shall deliver a comprehensive report on each individual project addressing the four primary categories outlined in Task 1.

2. Report should include a risk level rating for each item in each category, with sufficient detail and citation to support the stated conclusion.

Task #2: Preliminary Screening Evaluation of up to Forty (40) QC 15 Projects

1. Upon publication by CAISO of the updated Constraint Mapping with TPD Allocated, currently planned for August 2024, Contractor shall review the identified point of interconnection for QC 15 projects to determine if the project’s interconnection request will be subject to the scoring criteria to determine if eligible to be studied by CAISO.

Task #2: Deliverables:

1. Contractor shall deliver a report which includes a table that identifies for each project the if it is subject to the scoring criteria, the available TPD, and limiting area deliverability constraint(s).

Task #3: Support Services for Ongoing Contract Related Issues

1. Provide technical evaluation of individual RFO offer variants or bilateral offer variants for approximately 10 offers that may have variations to standard RFO protocol terms

Agenda Page 82
A-2
or variants to the original bilateral offer received. For example, variations on project sizing, Commercial Operation Date (COD) or term length.

2. Provide power engineering and consulting services focused on validation of project capabilities as outlined in PPAs on an ad hoc basis, assessment/reconciliation of metering issues, general engineering, and CAISO process support, and include, but are not limited to, the following

2.1.Metering:

2.1.1. Provide consultation on ongoing metering issues and support in technical reviews and discussions.

2.1.2. Review claims, advise on realistic timelines and offer solutions to resolve potential disputes related to station use, meter configurations and meter data.

2.1.3. Advise whether CPA contract requirements such as station use are consistent with typical battery energy storage facility capabilities.

2.2. Telemetry and Energy Management System (EMS) Data Review:

2.2.1. Review proposed telemetry and EMS data points to be sent from CPA’s battery energy storage counterparties to CPA and its scheduling coordinator prior to commercial operation.

2.2.2. After commercial operation, analyze telemetry and EMS data to confirm whether it satisfies CPA’s contract requirements for data to calculate battery energy storage megawatt (MW) and megawatt hour (MWh) availability.

2.3.Document Review:

2.3.1. Review PPAs and associated exhibits and contract language related to testing protocols, metering schemes, operating restrictions, etc. for completeness and feasibility.

2.3.2. Review PPA settlement language and formulas, including storage capacity availability calculations for reasonableness and provide feedback on potential solutions to improve language or inputs required for accurate settlement of contracts.

2.3.3. Review pre-COD metering and loss calculations, testing related to the CAISO New Resource Implementation (NRI) process.

2.3.4. Review single line diagrams, line loss protocols, and other documents for PPA compliance, as directed by CPA.

2.4.Capacity Tests:

2.4.1. Review and, if absolutely necessary, witness capacity tests on-site and associated data as directed by CPA and advise CPA on interpretation of results.

Agenda Page 83
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2.4.2. Work with CPA on documentation and instructions for how to internally review results of tests.

2.4.3. If necessary, visit sites and provide write-ups upon request.

2.5.As-Needed Consulting:

2.5.1. Provide other engineering and consulting services as directed by CPA.

Task #3 Deliverables:

1. Evaluation of one-off offer variants as compared to the original offer and any changes to items in the Task 1 deliverables.

2. Advise on metering issues.

2. Review battery energy storage telemetry/EMS data.

3. Provide technical document and diagram review.

4. Review and, if necessary, witness facility tests and review test reports.

5. Other services related to the engineering and operation of new build resources, as directed by CPA.

Agenda Page 84
Staff Report – Agenda Item 4
To: Board of Directors
From: Francis Choi, Assistant General Counsel
Approved By: Ted Bardacke, Chief Executive Officer
Nancy Whang, General Counsel
Subject: CalCCA Special Assessment for NewGen Strategies & Solutions LLC and Keyes & Fox LLP in Connection with Southern California Edison’s General Rate Case Phase II
Date: July 11, 2024

RECOMMENDATION
Approve the following Special Assessments with the California Community Choice Association (“CalCCA”):

A. A Special Assessment for Regulatory Engagement in Southern California Edison’s (“SCE”) General Rate Case Phase II with:
i. Keyes & Fox LLP (“K&F”) with an NTE amount of $81,920 for an Initial Term of August 1, 2024 to December 31, 2025; and, ii. NewGen Strategies & Solutions LLP (“NewGen”) with an NTE Amount of $57,680 with an Initial Term of August 1, 2024 to December 31, 2025;
B. An Update to the Special Assessment for 2022 SCE Energy Resource Recovery Account (“ERRA”) Compliance and 2024 SCE ERRA
Forecast Proceedings Reallocating $20,000 of NewGen’s total NTE to Keyes & Fox; There is No Change to the Overall Special Assessment Total and No Additional Payment Needed.

Agenda Page 85
Board of Directors Item 4

BACKGROUND/DISCUSSION
A. CalCCA Special Assessments
CPA and four other CCAs operating in SCE territory (California Choice Energy Authority, Central Coast Community Energy, Desert Community Energy, and Orange County Power Authority) (“Joint CCAs”) frequently enter into joint representation agreements with cost sharing arrangements in order to retain services provided by K&F for legal and NewGen for technical and rate analysis support. Because of the complexity of the cost sharing arrangement, the Joint CCAs and the vendors asked CalCCA for administrative assistance wherein the vendors bill CalCCA directly for the expenses, and then CalCCA bills each CCA based on the cost share arrangement.

These charges (referred to herein as “Special Assessments”) are additional to the normal membership dues that each CCA already pays CalCCA. CalCCA does not charge any mark-up or administrative fees to provide this service.

B. SCE GRC Phase II
On March 29, 2024, SCE filed its 2025 GRC Phase II application. The GRC Phase II is the proceeding in which SCE establishes its marginal costs, revenue allocation between rate groups/classes, and rate design. The outcome of GRC Phase II could impact SCE’s and CPA’s bill presentation and the competitiveness of CPA’s rates as compared to SCE.

The GRC Phase II also application proposes residential and non-residential rates, including potential changes to large industrial or commercial rates, time-of-use and electric vehicle (“EV”) rates, and a vehicle-to-grid proposal to provide credits for EV exports. Phase II is the appropriate proceeding to advocate for bill presentation changes for both bundled and unbundled customers.

The Joint CCAs desire to engage in the GRC Phase II proceeding in order to advocate for a balanced rate design – one that contains CCA input – and for changes in billing presentation.

Agenda Page 86
Board of Directors Item 4
The Joint CCAs, through CalCCA, intend to engage K&F and NewGen to support this effort GRC Phase II effort.1
Accordingly, staff is seeking approval of a CalCCA Special Assessment, attached hereto as Attachment 1, that will include the following:

1. Authorization for K&F to provide legal services in relation to regulatory engagement in GRC Phase II with an NTE amount of $81,920 for an expected term of August 1, 2024 to December 31, 2025.

2. Authorization for NewGen to provide technical and rate analysis services in relation to GRC Phase II with an NTE amount of $57,680 for an expected term of August 1, 2024 to December 31, 2025.

CalCCA will provide administrative assistance in billing each CCA’s share of the cost.

C. 2022 SCE ERRA Compliance and 2024 ERRA Forecast Special Assessment On October 5, 2023, the Board approved a special assessment to engage K&F and NewGen to support the Joint CCAs in SCE’s 2022 SCE ERRA Compliance and the 2024 ERRA Forecast Proceedings. CPA’s portion of the special assessment was $118,440 for K&F and $94,200 for NewGen.

On June 24, 2024, CalCCA informed CPA that NewGen has a contract balance of $28,935 while K&F had a contract balance of -$1,740. To complete both proceedings, NewGen estimated that NewGen will need an additional $4,000 of their remaining balance and K&F indicated that K&F will need an additional $20,000. CalCCA asked for CPA’s approval to reallocate $20,000 of NewGen’s balance to K&F. CalCCA noted that it does not constitute an increase in the special assessment or a payment of any kind.

Staff requests authorization to reallocate $20,000 of NewGen’s balance to K&F. 1 CPA has competitively solicited direct professional services and legal services agreements with (i) NewGen and (ii) K&F on multiple occasions. The rates being proposed by NewGen and K&F are substantially similar to the rates that both previously proposed to CPA.

Agenda Page 87
Board of Directors Item 4
D. Summary Table of CPA’s Engagement of K&F and NewGen’s Engagement A summary of the Board-approved engagements with K&F and NewGen from 2023 to the present is provided in the table below:

Description Expected
Term
NTE Status
K&F Engagements
CPA Direct Legal Services– Board approved
Agreement2
11/1/23 to
10/31/26
$380,000 Ongoing
SCE 2022 ERRA Compliance and 2024
ERRA Forecast – CalCCA Special
Assessment
4/1/23 to
6/30/24
$73,440 Ongoing
SCE 2025 GRC Phase I – CalCCA Special
Assessment3
8/1/23 to
12/31/24
$68,000 Ongoing.4
SCE 2023 ERRA Compliance and 2025
ERRA Forecast – CalCCA Special
Assessment5
4/4/23 to
6/30/25
$76,380 Both ERRA
engagements are
ongoing
2 On November 1, 2023, the Board approved the Legal Services Agreement with a total NTE of $380,000 for power purchase agreement, general energy procurement support, and regulatory support services.

The regulatory support services provided by K&F under this LSA is for any work that is not covered by CalCCA; for example, for support in transportation electrification proceedings, review and analysis of SCE’s Green Tariff Shared Renewables programs, and other proceedings. 3 CPA was originally assessed $45,000 under the CalCCA Special Assessment for SCE GRC Phase I.

This amount was increased (as authorized by the Board of Directors on April 3, 2024) by $22,500 for a total assessment of $67,500. GRC Phase I reviews SCE’s requested revenue requirement and certain fees and accounts. Under this engagement, K&F advocated for reduced CCA service fees and equal treatment of bundled and unbundled customers that experience billing errors, amongst other issues. 4 Opening Briefs to be filed on July 8, 2024, with a final CPUC decision expected in Q4 2024. 5 On April 3, 2024, CPA’s Board of Directors approved a CalCCA Special Assessment to authorize K&F and NewGen to provide services related to regulatory advocacy in connection with SCE’s Energy Resource Recovery Account 2023 Compliance and 2025 Forecast. The 2023 ERRA Compliance application requests approval of SCE’s power expenses, contract administration, and memorandum accounts, amongst other items. CalCCA has protested SCE’s 2023 ERRA Compliance and a prehearing conference has been scheduled for July 19, 2024. The 2025 ERRA Forecast proceeding will determine the Power Charge Indifference Adjustment for 2025, amongst other issues that could impact CPA customers. CalCCA has protested SCE’s application and no schedule for the proceeding has been issued.

Agenda Page 88
Board of Directors Item 4
Description Expected
Term
NTE Status
NewGen Engagements
CPA Professional Services Agreement 5/13/20 to
5/12/23
$129,360 Complete
SCE 2022 ERRA Compliance and 2024
ERRA Forecast - CalCCA Special
Assessment
4/1/23 to
6/30/24
$73,500 Ongoing
CPA Professional Services Agreement
(Review of SCE Green Tariff Shared
Renewables program and other regulatory
support services)6
4/5/24 to
4/4/25
$25,000 Ongoing
SCE 2025 GRC Phase I – Cal CCA Special
Assessment7
8/1/23 to
12/31/24
$27,450 Ongoing8
SCE 2023 ERRA Compliance and 2025
ERRA Forecast – CalCCA Special
Assessment
4/4/23 to
6/30/25
$79,881 Both ERRA
engagements are
ongoing
The amounts that are proposed to be paid to K&F and NewGen through these Special Assessment will exceed the CEO’s signing authority of $125,000 per vendor in a 12- month period. Therefore, CPA staff seeks the Board’s approval of the Special Assessment by CalCCA to allow CPA to engage in this regulatory proceeding.

FISCAL IMPACT
Proposed NTE amounts of $81,920 for K&F and $57,680 for NewGen under the Special Assessment are included in the Fiscal Year (“FY”) 2024/25 Board-approved Budget. 6 On April 3, 2024, CPA’s Board of Directors approved a Professional Services Agreement with NewGen to provide technical analysis of SCE’s ratemaking methodology for its Green Tariff Shared Renewables (“GTSR”) program, other operational aspects of GTSR, and other regulatory support services. The proceeding reviewing GTSR remains open.
7 CPA was originally assessed $20,700 under the CalCCA Special Assessment for SCE GRC Phase I.

This amount was increased (as authorized by the Board of Directors on April 3, 2024) by $6,750 for a total assessment of $27,450.
8 Opening Briefs to be filed on July 8, 2024, with a final CPUC decision expected in Q4 2024.

Agenda Page 89
Board of Directors Item 4
There is no change to the total NTE amount to the Special Assessment for the 2022 ERRA Compliance and 2024 ERRA Forecast and no additional payment is required.

ATTACHMENT

1. CalCCA Special Assessment for Keyes & Fox and NewGen.

Agenda Page 90
California Community Choice Association
2300 Clayton Road, Suite 1150, Concord, CA 94520 | [email protected] | cal-cca.org California Community Choice Association
Operational Member Special Assessment Funding
(August 1, 2024 – December 31, 2025)
Clean Power Alliance
Dear Director Bardacke,
The Directors of California Choice Energy Authority, Clean Power Alliance, Central Coast Community Energy, Orange County Power Authority, and Desert Community Energy expressed interest in having CalCCA manage the Southern California Edison 2025 General Rate Case Phase II proceeding on behalf of the five CCAs as a Special Assessment outside of the typical annual Operational Membership dues.

As outlined below, the overall cost for the Keyes & Fox and NewGen contracts to support this work is $218,125. Applying the proportional rate of funding as provided by the five participating CCAs, this will result in a total special assessment cost of $139,600 for your CCA during the projected 17-month term of the contracts (August 1, 2024 – December 31, 2025). Knowing these contracts are estimated, CalCCA will perform budget reconciliations as needed to either issue increased funding amendments or a partial refund of unspent funding.

SCE CCAs
% of Special
Assessment Budget
Keyes & Fox
Contract (August
1, 2024 –
December 31,
2025)
NewGen
Contract
(August 1, 2024
– December 31,
2025)
Total Special
Assessment
Quarterly
Invoice Amount
(17 months, 6
Invoices)
$90,125 $128,000 $218,125
CPA 64% $57,680 $81,920 $139,600 $23,266.67
OCPA 15% $13,519 $19,200 $32,719 $5,453.13
CalChoice 14% $12,618 $17,920 $30,538 $5,089.58
3CE 4% $3,605 $5,120 $8,725 $1,454.17
DCE 3% $2,704 $3,840 $6,544 $1,090.63
100.00% $90,125 $128,000 $218,125 $36,354.17
Six quarterly payment invoices in the amount of $23,266.67 will be sent on the first of the month prior to the start of the Fiscal Year Quarter (September, December, March, and June) from the CalCCA QuickBooks system to your contact(s) on file. Payments are due 30 days after receipt of the invoice, before the Fiscal Year Quarter starts.

Agenda Page 91
Please contact me with any questions. We truly appreciate your contribution to the work of CalCCA and look forward to our success ahead.

Thank you,
Martha Serianz
California Community Choice Association
510-290-4187
[email protected]

Agenda Page 92
Staff Report – Agenda Item 5
To: Board of Directors
From: John McNamara, Director, Structured Contracts
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Amendments to the Pivot Energy PPA 27 and 28 Power Share Renewable Power Purchase Agreements
Date: July 11, 2024

RECOMMENDATION
Approve and Authorize the Chief Executive Officer to Execute the Following Amendments to Renewable Power Purchase Agreements (PPAs) for Local Rooftop Solar Projects for the Power Share Program:

A. Amendment No.1 to the Renewable PPA with Pivot Energy PPA 27 LLC (Beverly); and,
B. Amendment No. 1 to the Renewable Power Purchase Agreement with Pivot Energy PPA 28 LLC (San Gabriel)

BACKGROUND
CPA's Power Share program promotes the development of renewable generation in and for underserved communities. The Power Share program includes the Community Solar Green Tariff (CSGT) program which is a California Public Utility Commission (CPUC) program that provides enrolled customers with 100% renewable energy and a 20% bill discount. Under the CSGT program, enrolled customers receive 100% renewable energy from a project located within a disadvantaged community (DAC) in Southern California Edison territory that is also within five miles of the census tract in which the customer resides. Above market procurement costs associated with Power Share resources and the 20% customer bill discount are reimbursed to CPA by the CPUC.

Agenda Page 93
Board of Directors Item 5
CPA and project developer, Pivot Energy, entered into two 15-year Renewable Power Purchase Agreements (PPAs) for (i) a 0.40 MW rooftop solar PV facility, Beverly, and (ii) a 0.27 MW rooftop solar PV facility, San Gabriel, that were approved by the Board on December 1, 2022.

The Pivot projects are almost complete but have experienced significant project execution delays due to delays in SCE’s interconnection timeline and a halt in construction after the projects’ Engineering Procurement and Construction (EPC) contractor declared bankruptcy. Pivot has already claimed the Development Cure Delay Days for which they are eligible under the PPAs and paid for the maximum extension to the Guaranteed Commercial Operation Date (GCOD) that the PPAs allows for. Therefore, the PPAs will terminate unless there is an extension to the GCOD. The amendments proposed allow the Seller (e.g. Pivot) to pay daily damages for additional days in order to extend the projects’ GCOD and therefore avoid contract termination.

SUMMARY OF PROPOSED AMENDMENTS
The proposed amendments to the PPAs extend the GCOD by increasing the amount that Pivot can pay in Commercial Operation Delay Damages to CPA from 90 days (which Pivot has already paid) to a total of 289 days, or up to an additional 199 days. This will allow Pivot the additional time needed to complete the project by the new expected Commercial Operation Date (COD) of December 31, 2024. Under the amendments, Pivot will pay CPA $266.67 per day for Beverly and $180 per day for San Gabriel ($0.67 per kilowatt)1
for each additional day beyond the existing GCOD of June 15, 2024 that the projects take to achieve the COD. If the projects fail to achieve COD by the Expected COD of December 31, 2024, the parties may mutually agree to further extend that timeline upon payment of additional Delay Damages.

The Amendment also increases the maximum exposure Pivot is liable for if it fails to achieve COD to the exact amount of Commercial Operation Delay Damages paid for 289 days of delay. If the parties mutually agree to allow for additional payment of Commercial 1 These daily Commercial Operation Delay Damages amounts are already established in the existing contract.

Agenda Page 94
Board of Directors Item 5
Operation Delay Damages beyond the 289-day period, the maximum amount will be increased by the day-for-day amount paid to CPA for Commercial Operation Delay Damages required to achieve COD.

Because the CSGT program is regulated by the CPUC and the CPUC is reimbursing CPA for above-market and other program costs, CPA is typically required to submit PPA amendments for subsequent approval by the CPUC. However, the CPUC has confirmed that additional approval is not required for this amendment because it does not include an increase to the PPA contract price and the project continues to comply with program eligibility requirements.

RATIONALE
The amendments to the PPAs will enable the projects to come online and provide renewable energy to CPA’s CSGT customers under the Power Share program. CPA will be compensated for the delays to the CODs under the PPAs.

ATTACHMENTS

1. Amendment to the Renewable Purchase Agreement with Pivot Energy PPA 27 LLC

2. Amendment to the Renewable Purchase Agreement with Pivot Energy PPA 28 LLC

Agenda Page 95
1 AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT
This Amendment No. 1 (the “First Amendment”) to the Agreement (as defined below), is dated as of July [XX], 2024 (the “First Amendment Effective Date”), between Clean Power Alliance of Southern California, a California joint powers authority (“Buyer”), and Pivot Energy PPA 27 LLC, a Delaware limited liability company (“Seller”). Seller and Buyer are each a “Party” and together the “Parties”.

Capitalized terms used and not defined in this First Amendment have the respective meanings assigned to them in the Agreement (as defined below).

RECITALS
A. The Parties entered into that certain Renewable Power Purchase Agreement, dated as of December 2, 2022 (as may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Agreement”). The Agreement contains a Guaranteed Commercial Operation Date of December 31, 2023.

B. Seller delivered a Development Cure Period Claim Form to Buyer on December 11, 2023, claiming the Interconnection Facilities were not complete and ready for the Facility to connect and sell Product at the Delivery Point and seeking to extend the Guaranteed Commercial Operation Date to March 17, 2024 (“Development Cure Period Claim”). Buyer issued a notice to Seller on December 20, 2023, agreeing to Seller’s Development Cure Period Claim.

C. On March 8, 2024, Seller paid $24,000 in Commercial Operation Delay Damages to extend the Guaranteed Commercial Operation date by ninety (90) days to June 15, 2024.

D. Notwithstanding the extension of the Guaranteed Commercial Operation Date to June 15, 2024, Seller has informed Buyer that Seller is unlikely to complete interconnection on or prior to June 15, 2024, and Seller has requested to amend the Agreement so that Seller may pay Commercial Operation Delay Damages for more than ninety (90) days, as currently allowed in the agreement, to allow Seller to further extend the Guaranteed Commercial Operation Date through the payment of Commercial Operation Delay Damages up through December 31, 2024 so that Seller can complete interconnection.

E. The Parties now intend to amend the Agreement as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Amendments to the Agreement.
(a) In the Guaranteed Commercial Operation Date section of the Cover Sheet, the phrase “December 31, 2023,” is deleted and replaced with “June 15, 2024”. (b) In the Milestones table on the Cover Sheet, the dates for the following Milestones are replaced with the dates indicated below:

Milestone Expected Date for
Completion
Evidence of Site Control Complete
Agenda Page 96
2 CONFIDENTIAL
Milestone Expected Date for
Completion
Documentation of Conditional Use Permit if required:

Agenda Page 97
3 Damages and Commercial Operation Delay Damages owed or paid by Seller pursuant to this Agreement, provided that in no event shall the sum of (A) and (B) exceed a total equal to seventy-seven thousand sixty-seven dollars and sixty-three cents ($77,067.63), unless the Parties mutually agree to extend the Guaranteed Commercial Operation Date beyond December 31, 2024 in accordance with Section 2(b) of Exhibit B, and that this Section 11.9 does not limit Seller’s obligations or liabilities under Section 11.6
(g) Section 2(b) of Exhibit B is deleted and replaced with the following:
“Seller may extend the Guaranteed Commercial Operation Date up through December 31, 2024 by paying Commercial Operation Delay Damages to Buyer for each day Seller desires to extend the Guaranteed Commercial Operation Date; provided, Buyer and Seller may each, in their absolute discretion, agree to extend such December 31, 2024 date to allow Seller to continue to pay Commercial Operation Delay Damages to extend the Guaranteed Commercial Operation Date past December 31, 2024, notwithstanding Section 11.9. 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.”
(h) Section 4 of Exhibit B (Extension of the Guaranteed Dates) is deleted in its entirety.

3. Development Cure Period Claims. Seller represents and warrants as of the First Amendment Effective Date that Seller shall have no further right to claim a Development Cure Period to extend the Guaranteed Commercial Operation Date beyond June 15, 2024.

4. Limited Effect. Except as expressly provided in this First Amendment, all of the terms and provisions of the Agreement are and will remain in full force and effect and are hereby ratified and confirmed by the Parties. Without limiting the generality of the foregoing, the amendments contained herein will not be construed as an amendment to or waiver of any other provision of the Agreement or as a waiver of or consent to any further or future action on the part of either Party that would require the waiver or consent of the other Party. On and after the First Amendment Effective Date, each reference in the Agreement to “this Agreement,” “the Agreement,” “hereunder,” “hereof,” “herein” or words of like import will mean and be a reference to the Agreement as amended by this First Amendment.

5. Miscellaneous.
(a) This First Amendment is governed by and construed in accordance with, the laws of the State of California, without regard to the conflict of laws provisions of such State. (b) This First Amendment shall inure to the benefit of and be binding upon each of the Parties and each of their respective successors and permitted assigns. (c) The headings in this First Amendment are for reference only and do not affect the Agenda Page 98
4 interpretation of this First Amendment.
(d) This First Amendment may be executed in counterparts, each of which is deemed an original, but all of which constitutes one and the same agreement. Delivery of an executed counterpart of this First Amendment electronically or by facsimile shall be effective as delivery of an original executed counterpart of this First Amendment.
(e) This First Amendment constitutes the sole and entire agreement between the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.
(f) Each Party shall pay its own costs and expenses in connection with this First Amendment (including the fees and expenses of its advisors, accounts and legal counsel). [Signature Page Follows]
Agenda Page 99
5 IN WITNESS WHEREOF, the Parties have executed this First Amendment effective as of the First Amendment Effective Date written above.
“SELLER:”
PIVOT ENERGY PPA 27 LLC
By:

Printed Name: Tom Hunt
Title: Chief Executive Officer
“BUYER:”

CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
By:

Printed Name: Ted Bardacke
Title: Chief Executive Officer
Agenda Page 100
1 AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT
This Amendment No. 1 (the “First Amendment”) to the Agreement (as defined below), is dated as of July [XX], 2024 (the “First Amendment Effective Date”), between Clean Power Alliance of Southern California, a California joint powers authority (“Buyer”), and Pivot Energy PPA 28 LLC, a Delaware limited liability company (“Seller”). Seller and Buyer are each a “Party” and together the “Parties”.

Capitalized terms used and not defined in this First Amendment have the respective meanings assigned to them in the Agreement (as defined below).

C. On March 8, 2024, Seller paid $16,200 in Commercial Operation Delay Damages to extend the Guaranteed Commercial Operation date by ninety (90) days to June 15, 2024.

E. The Parties now intend to amend the Agreement as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Milestone Expected Date for
Completion
Evidence of Site Control Complete
Agenda Page 101
2 Milestone Expected Date for
Completion
Documentation of Conditional Use Permit if required:

CEQA [ X] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec, [x] EIR
N/A
Seller’s receipt of Phase I and Phase II Interconnection study results for Seller’s Interconnection Facilities Complete Executed Interconnection Agreement Complete
Financial Close Complete
Expected Construction Start Date Complete
Initial Synchronization December 17, 2024
Network Upgrades completed (evidenced by delivery of
permission to parallel letter from the Transmission
Provider)
December 17, 2024
Expected Date of CAISO Commercial Operation December 21, 2024 Expected Commercial Operation Date December 31, 2024
(c) The following defined terms are added to the definitions in Section 1.1 in alphabetic order. “First Amendment” means the first amendment to this Agreement executed by the Parties as of the First Amendment Effective Date.
“First Amendment Effective Date” means the date assigned such meaning in the First Amendment.
(d) The definition of “Commercial Operation Delay Damages” in Section 1.1 is deleted and replaced with:
“Commercial Operation Delay Damages” means an amount equal to one hundred eighty dollars ($180.00) per day.”
(e) Section 10.4(a) is deleted in its entirety.
(f) Section 11.9 shall be replaced in its entirety as follows:
“Seller Pre-COD Liability Limitations. Notwithstanding any other provision of this Agreement, Seller’s aggregate liability under or arising out of a termination of this Agreement prior to the Commercial Operation Date shall be limited to the sum of (A) the Development Security and (B) the total amount of all Daily Delay Agenda Page 102
3 Damages and Commercial Operation Delay Damages owed or paid by Seller pursuant to this Agreement, provided that in no event shall the sum of (A) and (B) exceed a total equal to fifty-two thousand twenty dollars ($52,020.00), unless the Parties mutually agree to extend the Guaranteed Commercial Operation Date beyond December 31, 2024 in accordance with Section 2(b) of Exhibit B, and that this Section 11.9 does not limit Seller’s obligations or liabilities under Section 11.6. (g) Section 2(b) of Exhibit B is deleted and replaced with the following:
“Seller may extend the Guaranteed Commercial Operation Date up through December 31, 2024 by paying Commercial Operation Delay Damages to Buyer for each day Seller desires to extend the Guaranteed Commercial Operation Date; provided, Buyer and Seller may each, in their absolute discretion, agree to extend such December 31, 2024 date to allow Seller to continue to pay Commercial Operation Delay Damages to extend the Guaranteed Commercial Operation Date past December 31, 2024, notwithstanding Section 11.9. 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.”
(h) Section 4 of Exhibit B (Extension of the Guaranteed Dates) is deleted in its entirety.

Agenda Page 103
4 (d) This First Amendment may be executed in counterparts, each of which is deemed an original, but all of which constitutes one and the same agreement. Delivery of an executed counterpart of this First Amendment electronically or by facsimile shall be effective as delivery of an original executed counterpart of this First Amendment.
(e) This First Amendment constitutes the sole and entire agreement between the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.
(f) Each Party shall pay its own costs and expenses in connection with this First Amendment (including the fees and expenses of its advisors, accounts and legal counsel). [Signature Page Follows]
Agenda Page 104
5 IN WITNESS WHEREOF, the Parties have executed this First Amendment effective as of the First Amendment Effective Date written above.
“SELLER:”
PIVOT ENERGY PPA 28 LLC
By:

Printed Name: Tom Hunt
Title: Chief Executive Officer
“BUYER:”

CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
By:

Printed Name: Ted Bardacke
Title: Chief Executive Officer
Agenda Page 105
Staff Report – Agenda Item 6
To: Board of Directors
From: Cara Rene, Directors of Communications and Marketing Approved By: Ted Bardacke, Chief Executive Officer
Subject: Amendment to the agreement with Bloom Ads Global Media Group for an increase of $1.709 million for paid media
Date: July 11, 2024

RECOMMENDATION
Approve and authorize the Chief Executive Officer to execute Amendment No. 2 for an increase of $1.709 million to the professional service agreement (PSA) with Bloom Ads Global Media Group for FY2024/25 for a total Not to Exceed (NTE) amount of $2,059,000 for paid media.

The amendment to the contract with Bloom will fund paid media to support customer enrollment in CPA programs and increase brand awareness, as well as extend the contract term to be congruent with CPA’s fiscal year cycle.

BACKGROUND
In October of 2023 and as result of a competitive RFP process, the CPA Board authorized entering into a one-year contract with Bloom Ads Global Media Group for a not-to-exceed (NTE) amount of $250,000 for media buying, research and planning to support program marketing, customer recruitment, and growth of CPA’s brand awareness. In April 2024, the Board approved a $100,000 increase in the contract amount increase to allow for the addition of TV streaming into our media buying mix. That $350,000 has now been expended.

Agenda Page 106
Board of Directors Item 6
In June 2024, the Board approved the FY2024/25 budget, which included $1.919 million in paid advertising. To implement the majority of the paid advertising in the FY24/25 budget, staff is requesting an amendment to Bloom’s contract to increase the contract amount by $1.709 million. The proposed amendment also extends the contract term with Bloom to June 30, 2025, thus aligning the Bloom media buying contract with CPA’s fiscal year cycle.

The requested amendment does not alter the scope of the duties outlined in the contract but provides for increased media buying due to the growth of CPA, particularly in customer programs. CPA’s work with Bloom Media continues to gain momentum in reaching our brand awareness and program enrollment goals, particularly in growth of website traffic and preliminary program enrollments. Bloom’s advanced digital dashboard provides CPA with real-time data, enabling timely optimizations to maximize our media spend. Bloom’s strategic placements and deep relationships are expected to boost CPA's brand awareness in the communities we serve and have garnered CPA added value, such as free static banners and additional radio placements.

DISCUSSION
CPA is the number one green power provider in the United States, but our current brand awareness does not echo that distinction. As CPA continues to grow its position and its customer programs portfolio, the need for increased paid media grows as well.

During this fiscal year, CPA will:
• Launch a new brand campaign to heighten awareness and understanding of CPA • Launch a new program campaign to educate customers on all CPA offerings • Launch the Energy Advisor program
• Launch the Managed EV Charging program
• Launch the LMI Solar + Storage program
• Continue to grow enrollment in the new Sun Storage Rebate program • Continue to grow enrollment in all pathways of the Power Response program

Agenda Page 107
Board of Directors Item 6
Paid media is a key tactic to help customers learn more about CPA and participate in the programs designed to support them.

FISCAL IMPACT
Funds for the proposed contract amendment are included in the Board-approved FY2024/25 Budget.

ATTACHMENT

1. Amended PSA with Bloom Ads Global Media Group

Agenda Page 108

AMENDMENT NUMBER TWO TO

BLOOM ADS GLOBAL MEDIA GROUP

PROFESSIONAL SERVICES AGREEMENT
This Amendment Number Two (“AMENDMENT TWO”) to the Professional Services Agreement is made by and between Clean Power Alliance of Southern California (“CPA”) and Bloom Ads Global Media Group (“CONTRACTOR”) on July 11, 2024. CPA and CONTRACTOR may individually be referred to herein as a “Party,” or collectively as the “Parties.”

RECITALS
WHEREAS, a Professional Services Agreement (“AGREEMENT”) was executed on October 5, 2023, between CPA and CONTRACTOR to provide professional services for paid media services;
WHEREAS, on April 4, 2024, CPA and CONTRACTOR executed Amendment Number One (“AMENDMENT ONE”) in order to update the compensation set forth in Exhibit C;
WHEREAS, CPA desires to amend the AGREEMENT in order to update the Term and the compensation set forth in Exhibit C;
WHEREAS, CONTRACTOR has the competence and expertise to provide the professional services, described above; and,
WHEREAS, CONTRACTOR desires to continue providing and performing these professional services.

NOW, THEREFORE, it is mutually agreed by and between the Parties hereto to amend the AGREEMENT as follows:

1. Section 5, Term. Section 5 of the AGREEMENT shall be deleted in its entirety and replaced with the following:
“Subject to compliance with all terms and conditions of this Agreement, the term of this Agreement shall commence on the Effective Date and continue until June 30, 2025 (“Initial Term”). At the end of the Initial Term, the Parties may renew this Agreement for two successive one (1) year terms for a maximum of two additional years (each, a “Renewal Term”), unless either Party provides ninety (90) days prior written notice of its intent not to renew the term of the Agreement (“Renewal Notice”).

2. Exhibit C of the AGREEMENT is deleted in its entirety and replaced with Exhibit C (Compensation), attached hereto.

3. Except as specifically amended hereby, all other terms and conditions of the AGREEMENT shall remain in full force and effect.

Agenda Page 109
IN WITNESS WHEREOF, the parties hereto have caused this AMENDMENT TWO to be executed as of the date first above written.

CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
By
______________________________________
Theodore Bardacke
Chief Executive Officer
CONTRACTOR: Bloom Ads Global Media Group
_______________________________________
By
Kathe Bloom
President/CEO

Agenda Page 110
A-2
Exhibit C – Compensation
Contractor shall satisfactorily provide all the contemplated Services detailed in Exhibit A at the fixed price per deliverable specified in the table below and in compliance with the terms and conditions of this Agreement.

Contract (Task) Item Estimated Due Date Not to Exceed
Amount
Task 1:

Research and Planning
Completed Strategic
Media Plan by December
31, 2023
$17,000
Task 2:

Media Buying
(Includes hard costs of media)
Ongoing over the
duration of the
Agreement
$1,982,000
Task 3:

Partnerships
(Includes talent fees and associated
sponsorship direct costs)
Ongoing over the
duration of the
Agreement
$55,000
Task 4:

Ad Tagging, Trafficking, and Serving
Ongoing over the
duration of the
Agreement
$5,000
Task 5:

Dashboard and Reporting
Ongoing over the
duration of the
Agreement
Included
Expenses, if approved in advance, in writing, by CPA $0 TOTAL Program Costs $2,059,000
All hard media costs, talent fees, and associated sponsorship direct costs as set forth in Task 2 and Task 3 above will be billed in the amount incurred by Contractor for actual out-of-pocket cost (hereinafter, “Media Fees”), with a maximum additional mark-up by Contractor of fifteen percent (15%) of the gross Media Fees. Any Media Fees incurred shall be billed for the month in which the Media Fees are incurred. Reports detailing all Media Fees, along with receipts, shall be presented to CPA. All Media Fees must be approved by CPA in advance writing before they are incurred.

Any travel, administrative expenses, and materials (hereinafter, “Expenses”) will be billed in the amount incurred by Contractor for actual out-of-pocket cost, without any additional mark-up by Contractor. Any Expenses incurred shall be billed for the month in which the Expenses are incurred. Expense reports detailing all Expenses, along with receipts, shall be presented to CPA for reimbursement. All expenses must be approved by CPA in advance writing before they are incurred.

Agenda Page 111
A-2
The Total Maximum Amount that CPA shall pay Contractor, including any subcontractor that the Contractor may retain, for all Services and Expenses to be provided under this Professional Services Agreement shall not exceed Two Million Fifty-Nine Thousand Dollars ($2,059,000) ("Not-to-Exceed" or "NTE") during the Initial Term and for any authorized Renewal Term.

Contractor shall satisfactorily perform and complete, in the judgement of CPA, all required Services in accordance with Exhibit A notwithstanding the fact that total payment from CPA shall not exceed the NTE.

Agenda Page 112
Staff Report – Agenda Item 7
To: Board of Directors
From: Dr. Monique Edwards-Greer, Chief Administrative Officer Approved By: Ted Bardacke, Chief Executive Officer
Subject: Statement of Work (SOW) with Mercer (US), Inc. for Bi-Annual Compensation and Benefits Market Data Study
Date: July 11, 2024

RECOMMENDATION
Approve a Statement of Work (SOW) with Mercer (US), Inc. for a compensation and benefits market data study with a total Not-To-Exceed (NTE) amount of $148,000.

BACKGROUND/DISCUSSION
During budget discussions in early 2020, the Board expressed a desire to see CPA establish structured salary ranges for CPA employees based on objective data. As a result, in October 2020, CPA entered into an agreement with Mercer with an original statement of work (SOW) to conduct a salary and benefits benchmark study to examine the competitiveness of CPA’s compensation and benefits against a range of industries and public sector entities1. The focus of the study was on CPA’s competitive positioning in the areas of base salary, total cash compensation, and benefits. Compensation data was utilized from four market perspectives with whom CPA primarily competes for talent and employee retention: energy/utilities, general industry, public sector, and CCAs. This study was used to establish CPA’s first salary grades and update some benefit offerings.

This original agreement and SOW was entered into under the CEO’s contract signing authority.
1 For cost sharing purposes, three other CCAs joined in this SOW.

Agenda Page 113
Board of Directors Item 7
In 2022, the CEO authorized another SOW under the original agreement with Mercer to conduct an update of the salary and benefits benchmark study. The results of this study were used in the modification of salary grades the Board approved in December 2022, to make simultaneous modifications to the benefits portions of CPA’s Board-approved Employee Handbook and assist with the development of CPA’s Retention Incentive Program, which was approved in September 2023.

To have guidance on how to remain competitive in attracting and retaining high quality employees, CPA is following best practice by seeking to refresh its salary and benefits benchmarking study every two years to provide guidance as to whether future adjustments to Board-approved salary grades and benefits are advisable and/or warranted.

Statement of Work Overview
To continue the cadence of bi-annual updates while leveraging the existing datasets that Mercer has compiled and its understanding of CPA’s compensation and benefits philosophy and structure, CPA staff is seeking a new SOW with Mercer to (a) to conduct a compensation study refresh and obtain benefits market data to examine the competitiveness of CPA’s compensation and benefits in today’s market, and (b) to conduct a job architecture review. Unlike the two previous SOWs with Mercer, the cost of the proposed 2024 SOW exceeds the CEO’s $125,000 contract signing authority.

The proposed SOW (Attachment 1) includes tasks such as job architecture review, compensation benchmarking, salary range updates, and benefits market data. The job architecture review will ensure that career tracks and career levels are maintained to support career advancement for staff. Compensation benchmarking utilizes market data to support and/or update salary ranges for specific CPA positions, comparing actual job descriptions with market data for similar positions. Salary range updates enable CPA to ensure pay decisions are consistent and equitable throughout the organization while also recognizing that many CPA employees are highly specialized and have broad responsibility for multiple functional areas rather than managing large numbers of people.

Agenda Page 114
Board of Directors Item 7
Salary ranges also link career paths and pay opportunities for current and future employees. Benefits market data provides information regarding market practice/prevalence for several benefits such as paid family leave, education benefits, healthcare savings account, retirement, flexible work schedules, specialized insurance, and leave benefits.

FISCAL IMPACT
Proposed FY 2024/25 contract costs of $148,000 are included in the FY 2024/25 board approved Budget.

ATTACHMENT

1. Proposed Statement of Work (SOW) with Mercer (US), Inc.

Agenda Page 115

welcome to brighter
Joe Ziomek
Partner
633 W. Fifth Street, Suite 1200
Los Angeles, CA 90071, USA
T +1 213 346 2218
[email protected]
www.mercer.com
A business of Marsh McLennan
Ted Bardacke, Chief Executive Officer
Dr. Monique Edwards-Greer, Chief Administrative Officer Clean Power Alliance
801 S. Grand Ave., Ste 400
Los Angeles, CA 90017
June 20, 2024
Subject: Statement of Work (“SOW”) – 2024 Compensation Study Refresh and Benefits Market Data Dear Ted and Monique:

The objective of this Statement of Work (“SOW”) is to confirm the scope of our work for Clean Power Alliance (“CPA”) and the compensation for this project. This SOW is subject to the terms and conditions contained in an engagement letter with us and/or our Affiliate(s) which will be prepared should you decide to engage Mercer for this project. All capitalized terms not defined in this SOW shall have the meanings ascribed to them in that engagement letter.

Project Details

1. Project name: 2024 Compensation Study Refresh and Benefits Market Data

2. Description of Mercer responsibilities: Mercer will partner with CPA to refresh our previous compensation studies. See “Services to be Provided” for further detail.

3. Description of client responsibilities: Respond to all requests for scheduling and information in a timely and accurate manner and attend calls/meetings as requested.

4. Period of time over which work will be performed: Based on our experience with similar engagements, this work can typically be completed in approximately three months, although the time frame may be shorter or longer depending on your required time to complete worksteps, gain internal feedback/buy-in, etc. We will begin the project upon the receipt of this signed SOW and Engagement Letter. This SOW will remain in effect through March 31, 2025 for administrative purposes.

5. Compensation/fees: See “Fee Structure” section below.

Services to be Provided
Job Architecture Review
• Review current usage of job architecture including career tracks, career levels, families and subfamilies

Agenda Page 116

Page 2 ends

June 21, 2024
Ted Bardacke and Dr. Monique Edwards-Greer
Clean Power Alliance
• Understanding that CPA is considering separating its Professional/Technical career stream into two separate tracks, we will provide support in building out a separate leveling guide.

This will include defining and clarifying the difference between the two tracks. • Assist with assigning jobs currently on the P/T track to either the Professional or Technical track going forward
• Discuss impact on benchmarking methodology or other rewards programs Compensation Benchmarking
• Confirm list of jobs to be included in benchmarking exercise. We have provided pricing options for 35, 45 or 60 jobs.
• Document and refresh (as needed) benchmark methodology, to specify items such as competitive marketplace and the surveys to be used, market scopes, premiums and discounts, geographic adjustments
─ We will focus on four market perspectives: Energy/Utilities sector, General Industry, Public Sector and CCAs (data from the 2023/24 CCA custom survey will be used) • Complete compensation benchmarking (base, STI target, TCC actual). Data will be sourced from the Mercer survey library
• Complete gap analysis to reflect market pricing results by segment/function or job level • Review findings from analysis with Clean Power Alliance project team and, if desired, leadership team/other stakeholders
Salary Range Updates
• Discuss strategy for compensation of employees located outside of the Los Angeles area and/or outside of California. We will begin discussing this on a call, but may integrate our conclusions into an updated or revised salary structure (see following work steps) • Using completed benchmarking outputs, update salary structure ranges that are aligned with market
• Update the Excel file created in 2020 and revised in 2022 in order to assist with compensation administration using the revised salary structure. Includes:
─ Grading of jobs in alignment with market
─ Assignment of employees to salary ranges
─ Calculation of costs associated with the new structure ─ The tool will also allow CPA to grade jobs that were not benchmarked

Agenda Page 117

Page 3 ends

June 21, 2024
Ted Bardacke and Dr. Monique Edwards-Greer
Clean Power Alliance
Benefits Market Data
• Provide market practice / prevalence for several specific fringe benefits: paid family leave, education benefits, healthcare savings account, retirement, flexible work schedule, specialized insurance, and leave
• We will provide the closest available market comparison (e.g. Utilities, General Industry, etc.) but this will be dependent upon data availability. Mercer does capture all of these items in our various databases so we anticipate being able to report market practice for all or nearly all items.

Board and Leadership Meetings
• Optionally, we can participate in meetings with CPA leadership and/or the Board of Directors to present results, help gain buy-in and/or support requests for approval Fee Structure
Our total compensation for the services will be professional fees as summarized in the table below.

Component Fees
Job Architecture Review $12,000 - $15,000
Compensation Benchmarking (Four Market
Perspectives)
35 jobs: $46,000 - $51,000
45 jobs: $54,000 - $63,000
60 jobs: $64,000 - $79,000
Salary Range Updates $20,000 - $32,000
High end would include the development of salary structure alternative(s) for employees outside of LA / CA.

Benefits Market Data $9,000 - $12,000
Leadership and Board Meetings $3,000 - $5,000 per meeting If this SOW is signed and the project is kicked off by June 30, 2024, Mercer will offer a fee reduction of

7.5%.

In addition to such compensation, we also bill for necessary travel and other expenses related to the services requested. However, we anticipate these expenses to be minimal.

Subcontractors
We may need to utilize various subcontractors (“Subcontractors”) in the course of our provision of the Services to assist us in such tasks as printing and mailing, development of interactive tools, graphic design, etc. You consent to our use of the Subcontractors and further acknowledge and agree that we may provide such Subcontractors with your Confidential Information, including Work, on a confidential and a need to know basis for the purposes contemplated by this SOW.

Agenda Page 118

Page 4 ends

June 21, 2024
Ted Bardacke and Dr. Monique Edwards-Greer
Clean Power Alliance
Notwithstanding anything to the contrary in the engagement letter, when providing Services to Client pursuant to this SOW, we may involve Affiliates, from time to time, to assist in the performance of such Services.

We appreciate your business and look forward to working with you on this engagement. Please acknowledge your agreement to the terms contained herein by signing below.

Mercer (US) Inc.

Name: Date: June 21, 2024
(Signature)
Joe Ziomek
Title:
(Please Print Name)
Partner

ACCEPTED AND AGREED
Clean Power Alliance
Name: Date:
(Signature)
Title:
(Please Print Name)

Agenda Page 119
Staff Report – Agenda Item 8
To: Board of Directors
From: Dr. Monique Edwards-Greer, Chief Administrative Officer Approved By: Ted Bardacke, Chief Executive Officer
Subject: Professional Service Agreement with TRC Engineers, Inc. for Data and Systems strategic planning services
Date: July 11, 2024

RECOMMENDATION
Approve a Professional Services Agreement with TRC Engineers, Inc. (”TRC”) for software Data and Systems strategic planning services with a total Not-To-Exceed amount of $241,990.

BACKGROUND/DISCUSSION
In 2020, with the help of a consulting firm, CPA created an early roadmap for its Data and Systems strategy that has provided high-level guidance for the development of CPA’s IT infrastructure and dataflow within the organization and with key external partners and vendors.

With data complexity increasing and new tools available, CPA is now looking to develop a strategic plan and update its roadmap for Data and Systems that addresses data governance, data architecture, technology and systems (including, but not limited to analytics, Energy Trading and Risk Management, Enterprise Resource Planning, Customer Relationship Management), cybersecurity, and processes.

Agenda Page 120
Board of Directors Item 8
Selection Process
In April 2024, CPA released a Request for Proposal (“RFP”) for Data and Systems Strategic Planning Services to provide consulting services for the development of a refreshed strategic plan and roadmap for CPA’s data and systems. Two RFP proposals were received, and TRC was shortlisted to be interviewed. TRC’s proposal and interview responses demonstrated a) a clear understanding of and expertise in the scope outlined in the RFP, b) a history of successful engagements developing technology strategic plans related to data management and data governance, and c) the lowest price and Best Value for CPA.

CPA staff elected not to shortlist and interview the remaining Proposer, Domain Experts Corporation (DEC) due to concerns with the quality of the Proposal and its proposed data modeling framework, which required the purchase of licenses and encouraged a long-term partnership with the Proposer which does not align with CPA’s needs.

On June 27, 2024, CPA received a protest from DEC alleging errors in the evaluation, noncompliance with the RFP, and requesting cancellation of the RFP (“Protest”). CPA reviewed the Protest and has denied the Protest because the evaluation of the proposals and conduct of CPA staff was consistent with the RFP.

Contract Overview
The proposed contract with TRC has a Not-To-Exceed (NTE) amount of $241,990 and will include tasks such as a current assessment of CPA’s data and technology state, an updated Data and Systems strategic plan to develop future state recommendations, and the development of a detailed roadmap for implementing the Data and Systems strategic plan that includes timing, dependencies, and necessary action plans.

FISCAL IMPACT
The proposed contract costs of $241,990 are included in the FY 2024/25 board approved Budget.

ATTACHMENT

Agenda Page 121
Board of Directors Item 8

1. Proposed Professional Service Agreement with TRC Engineers, Inc.

Agenda Page 122
1 Clean Power Alliance of Southern California
This Professional Services Agreement (this “Agreement”), dated and effective as of July 12, 2024 (the “Effective Date”), is made by and between:

CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA (“CPA”), and TRC ENGINEERS, INC. (“Contractor”).

CPA and Contractor are sometimes collectively referred to herein as the “Parties” and each individually as a “Party.” In consideration of the terms of this Agreement, and for other good and valuable consideration, the Parties make the following acknowledgments and agreements:

RECITALS
WHEREAS, CPA may contract with a provider for consulting services for the development of a refreshed strategic plan and roadmap for CPA’s data and systems; WHEREAS, CPA conducted a Request for Proposal (“RFP”) and CPA selected Contractor because Contractor has the expertise and experience to provide the specified services to CPA and offered CPA the Best Value;
WHEREAS, Contractor desires to provide these specified services to CPA; WHEREAS, the purpose of this Agreement is to set forth the terms and conditions upon which Contractor shall provide services to CPA; NOW, THEREFORE, it is agreed based on the consideration set forth below by the Parties to this Agreement as follows:

AGREEMENT

1. Definitions
a. The definition of “Confidential Information” is set forth in paragraph 10.b. of this Agreement.
b. “CPA Data” shall mean all data gathered or created by Contractor in the performance of the Services pursuant to this Agreement, including any customer or customer-related data.
c. “CPA Information” shall mean all confidential, proprietary, or sensitive information provided by CPA to Contractor in connection with this Agreement. d. “CPA Materials” shall mean all finished or unfinished content, writing and design of materials but not limited to messaging, design, personalization, or other materials, reports, plans, studies, documents and other writings prepared by Contractor, its officers, employees and agents for CPA for the performance of, the purpose of, or in the course of implementing this Agreement.

Agenda Page 123
2 e. “CPA Product” includes collectively CPA Data, CPA Information, and CPA Materials.
f. “Services” shall mean the scope of work Contractor provides to CPA as specified in Exhibit A.

2. Exhibits and Attachments
The following exhibits and attachments are attached to this Agreement and incorporated into this Agreement by this reference:

Exhibit A – Scope of Work
Exhibit B – Reserved
Exhibit C – Compensation
Exhibit D – Reserved
Should a conflict arise between language in the body of this Agreement and any exhibit or attachment to this Agreement, the language in the body of this Agreement controls, followed by Exhibit A, B, C, and D in that order.

3. Services to be Performed by Contractor
In consideration of the payments set forth in this Agreement and in Exhibit C, Contractor shall perform services for CPA in accordance with the terms, conditions, and specifications set forth in this Agreement and in Exhibit A (“Services”).

4. Compensation
CPA agrees to compensate Contractor as specified in Exhibit C:
a. In consideration of the Services provided by Contractor in accordance with all terms, conditions and specifications set forth in this Agreement and Exhibit A, CPA shall make payment to Contractor on a fixed fee basis and in the manner specified in Exhibit C.
b. Unless otherwise indicated in Exhibit C, Contractor shall invoice CPA monthly to [email protected] for all compensation related to Services performed during the previous month. Payments shall be due within fifteen (15) calendar days after the date the invoice is submitted to CPA at the specified email address. All payments must be made in U.S. dollars. If CPA fails to pay undisputed amounts when due, then Contractor may, upon fifteen (15) days’ written notice to CPA, suspend performance of the Services until Contractor receives payment of all undisputed amounts due.

5. Term
Subject to compliance with all terms and conditions of this Agreement, the term of this Agreement shall be six (6) months from the Effective Date (“Initial Term”).

Agenda Page 124
3 6. Termination
a. Termination for Convenience. CPA may terminate the Agreement in accordance with this paragraph in whole, or from time to time in part, whenever CPA determines that termination is in CPA’s best interests. A termination for convenience, in part or in whole, shall take effect by CPA delivering to Contractor, at least thirty (30) calendar days prior to the effective date of the termination or prior to a Notice of Termination specifying the extent to which performance of the Services under the Agreement is terminated.

If the termination for convenience is partial, Contractor may submit to CPA a request in writing for equitable adjustment of price or prices specified in the Agreement relating to the portion of this Agreement which is not terminated. CPA may, but shall not be required to, agree on any such equitable adjustment.

Nothing contained herein shall limit the right of CPA and Contractor to agree upon amount or amounts to be paid to Contractor for completing the continued portion of the Agreement when the Agreement does not contain an established price for the continued portion. Nothing contained herein shall limit CPA’s rights and remedies at law.
b. Termination for Default. If Contractor fails to provide in any manner the Services required under this Agreement, otherwise fails to comply with the terms of this Agreement, or violates any ordinance, regulation or law which applies to its performance herein and such default continues uncured for thirty (30) calendar days after written notice is given to Contractor, CPA may terminate this Agreement by giving five (5) business days' written notice. If Contractor requires more than thirty (30) calendar days to cure, then CPA may, at its sole discretion, authorize additional time as may reasonably be required to effect such cure provided that Contractor diligently and continuously pursues such cure.
c. Termination for Lack of Third-Party Funding. CPA may terminate this Agreement if funding for this Agreement is reduced or eliminated by a third-party funding source. d. Effect of Termination. Upon the effective date of expiration or termination of this Agreement: (i) Contractor may immediately cease providing Services in its entirety or if a termination to a part of the Agreement, cease providing the Services that have been terminated; (ii) any and all payment obligations of CPA under this Agreement will become due immediately except any equitable adjustment pursuant to Paragraph 5(a); (iii) promptly transfer title and deliver to CPA all CPA Product or any work in progress pursuant to this Agreement; and (iv) each Party will promptly either return or destroy (as directed by the other Party) all Confidential Information of the other Party in its possession as well as any other materials or information of the other Party in its possession.

Upon such expiration or termination, and upon request of CPA, Contractor shall reasonably cooperate with CPA to ensure a prompt and efficient transfer of all data, documents and other materials to CPA in a manner such as to minimize the impact of expiration or termination on CPA’s customers.

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4 7. Contract Materials
CPA owns all right, title and interest in and to all CPA Materials and CPA Data. Upon the expiration of this Agreement, or in the event of termination, CPA Materials and all CPA Information, in whatever form and in any state of completion, shall remain the property of CPA and shall be promptly returned to CPA. Upon termination, Contractor may make and retain a copy of such CPA Materials if required by law or pursuant to the Contractor’s reasonable document retention or destruction policies.

8. Payments of Permits/Licenses
Contractor bears responsibility to obtain any license, permit, or approval required for it to provide the Services to be performed under this Agreement at Contractor’s own expense prior to commencement of the Services.

9. No Recourse against Constituent Members
CPA is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to the Joint Powers Agreement and is a public entity separate from its constituent members. CPA shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Contractor shall have no rights and shall not make any claims, take any actions or assert any remedies against any of CPA’s constituent members in connection with this Agreement.

10. Confidential Information
a. Duty to Maintain Confidentiality. Contractor agrees that Contractor will hold all Confidential Information in confidence, and will not divulge, disclose, or directly or indirectly use, copy, digest, or summarize, any Confidential Information unless necessary to comply with any applicable law, regulation, or in connection with any court or regulatory proceeding applicable in which case, any disclosure shall be subject to this paragraph, 10.c., and 10.d., below. b. Definition of “Confidential Information”. The following constitutes “Confidential Information,” whether oral or written: (a) the terms and conditions of, and proposals and negotiations related to, this Agreement, (b) information, in whatever form, that CPA shares with Contractor in the course and scope of this Agreement, or (c) information that either Contractor stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other.

Confidential Information shall not include: (l) information that is generally available to the public or in the public domain at the time of disclosure; (2) information that becomes publicly known other than through any breach of this Agreement by Contractor or its Representatives; (3) information which is subsequently lawfully and in good faith obtained by Contractor or its Representatives from a third party, as shown by documentation sufficient to establish the third party as the source of the Confidential Information; provided that the disclosure of such information by such third party is not known by Contractor or its Representatives to be in breach of a confidentiality agreement or other similar obligation of confidentiality; (4) information that Contractor or

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5 its Representatives develop independently without use of or reference to Confidential Information provided by Contractor; or (5) information that is approved for release in writing by Contractor.
c. California Public Records Act. The Parties acknowledge and agree that the Agreement including but not limited to any communication or information exchanged between the Parties, any deliverable, or work product are subject to the requirements of the California Public Records Act (Government Code Section 6250 et seq.). In order to designate information as confidential, the Disclosing Party must clearly stamp and identify the specific portion of the material designated with the word “Confidential.” The Parties agree not to over-designate material as Confidential Information. Over-designation includes stamping whole agreements, entire pages or series of pages as “Confidential” that clearly contain information that is not Confidential Information. d. Third Party Request for Confidential Information. Upon request or demand of any third person or entity not a Party hereto pursuant to the California Public Records Act for production, inspection and/or copying of Confidential Information (“Requested Confidential Information”), CPA will as soon as practical notify Contractor in writing via email that such request has been made. CPA will be solely responsible for taking at its sole expense whatever legal steps are necessary to prevent release to the third party of the Confidential Information designated by Contractor. If Contractor takes no such action after receiving the foregoing notice from CPA, CPA shall, at its discretion, be permitted to comply with the third party’s request or demand and is not required to defend against it. If Contractor does take or attempt to take such action, Contractor agrees to indemnify and hold harmless CPA, its officers, directors, and employees (“CPA Indemnified Parties”), from any claims, award of reasonable attorneys’ fees, or damages, and to defend any action, claim or lawsuit brought against any of CPA Indemnified Parties for Contractor’s attempt to prevent disclosure or CPA’s refusal to disclose any Confidential Information.

11. Insurance
All required insurance coverages shall be substantiated with a certificate of insurance and must be signed by the insurer or its representative evidencing such insurance to CPA within 10 business days after the Agreement is fully executed. The general liability policy shall be endorsed naming Clean Power Alliance of Southern California and its employees, and officers as additional insureds using ISO endorsement form CG 20 10 12 19. The certificate(s) of insurance and required endorsement shall be furnished to CPA prior to commencement of work and maintained throughout the Term and any Renewal Term.

Each certificate shall provide for thirty (30) days advance written notice to CPA of any cancellation or reduction in coverage below the required limits herein. Said policies shall remain in force through the life of this Agreement and shall be payable on a per occurrence basis only, except those required by paragraph (d) below which may be provided on a claims-made basis consistent with the criteria noted therein.

Nothing herein shall be construed as a limitation on Contractor’s obligation under paragraph 12 of this Agreement to indemnify, defend, and hold CPA harmless from any and all liabilities arising from the Contractor’s negligence, recklessness or willful

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6 misconduct to the extent caused by Contractor in the performance of this Agreement. CPA agrees to timely notify the Contractor of any negligence claim.

Failure to provide and maintain the insurance required by this Agreement will constitute a material breach of the Agreement. In addition to any other available remedies, CPA may suspend payment to the Contractor for any services provided during any time that insurance was not in effect and until such time as the Contractor provides adequate evidence that Contractor has obtained the required coverage. a. General Liability
The Contractor shall maintain a commercial general liability insurance policy in an amount of one million ($1,000,000.00) with a two million dollar ($2,000,000.00) aggregate limit.

CPA shall be named as an additional insured on the commercial general liability policy and the Certificate of Insurance shall include an additional endorsement page. b. Auto Liability
Where the services to be provided under this Agreement involve or require the use of any type of vehicle by Contractor in order to perform said services, Contractor shall also provide comprehensive business or commercial automobile liability coverage including non-owned and hired automobile liability in the amount of one million dollars combined single limit ($1,000,000.00).
c. Workers’ Compensation
The Contractor acknowledges the State of California requires every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of the Labor Code. If Contractor has employees, a copy of the certificate evidencing such insurance or a copy of the Certificate of Consent to Self-Insure shall be provided to CPA prior to commencement of work. d. Professional Liability Insurance
Coverages required by this paragraph may be provided on a claims-made basis with a “Retroactive Date” either prior to the date of the Agreement or the beginning of the contract work. If the policy is on a claims-made basis, coverage must extend twelve (12) months beyond completion of contract work. If coverage is cancelled or non-renewed, and not replaced with another claims made policy form with a “retroactive date” prior to the Agreement effective date, the Contractor must purchase “extended reporting” coverage for twelve (12) months after completion of contract work. Contractor shall maintain a policy limit of $1,000,000.00 per claim. If the deductible or self-insured retention amount exceeds $100,000.00, CPA may ask for evidence that Contractor has segregated amounts in a special insurance reserve fund or Contractor’s general insurance reserves are adequate to provide the necessary coverage and CPA may conclusively rely thereon.

Contractor shall be responsible for initiating, maintaining and supervising all safety precautions and programs in connection with the performance of the Agreement.

Contractor shall monitor the safety of the job site(s) during the project to comply with all applicable federal, state, and local laws, and to follow safe work practices.

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7 12. Indemnification
Contractor agrees to indemnify, defend, and hold harmless CPA Indemnified Parties from and against, and shall assume full responsibility for payment of all wages, state or federal payroll, social security, income or self-employment taxes, with respect to Contractor’s performance of this Agreement. Contractor further agrees to indemnify, and hold harmless CPA from and against any and all third- party claims, penalties, forfeitures, suits, costs and expenses incident thereto (including costs of defense, settlement, and reasonable attorney’s fees), which CPA may hereafter incur, become responsible for, or pay out, arising out of death or bodily injuries to any person, destruction or physical damage to tangible property (excluding damages for loss of use), or any violation of governmental laws, regulations or orders, to the extent caused by Contractor’s negligent acts, errors or omissions, or the negligent acts, errors or omissions of Contractor’s employees, agents, or subcontractors while in the performance of the terms and conditions of the Agreement, except for such loss or damage arising from the negligence or willful misconduct of CPA, elected and appointed officers, employees, agents and volunteers. If Contractor and any CPA Indemnified Party and/or any third parties are concurrently negligent or otherwise at fault or strictly liable without fault, then Contractor shall indemnify Indemnitees only for the percentage of the losses corresponding to Contractor’s proportion of negligence.

13. Independent Contractor
a. Contractor acknowledges that Contractor, its officers, employees, or agents will not be deemed to be an employee of CPA for any purpose whatsoever, including, but not limited to: (i) eligibility for inclusion in any retirement or pension plan that may be provided to employees of Contractor; (ii) sick pay; (iii) paid non-working holidays; (iv) paid vacations or personal leave days; (v) participation in any plan or program offering life, accident, or health insurance for employees of Contractor; (vi) participation in any medical reimbursement plan; or (vii) any other fringe benefit plan that may be provided for employees of Contractor.
b. Contractor declares that Contractor will comply with all federal, state, and local laws regarding registrations, authorizations, reports, business permits, and licenses that may be required to carry out the work to be performed under this Agreement. Contractor agrees to provide CPA with copies of any registrations or filings made in connection with the work to be performed under this Agreement.

14. Compliance with Applicable Laws
Contractor shall comply with any and all applicable federal, state and local laws and resolutions affecting Services covered by this Agreement.

15. Nondiscriminatory Employment
Contractor and/or any permitted subcontractor, shall not unlawfully discriminate against any individual based on race, color, religion, nationality, sex, sexual orientation, age, protected veteran status, or condition of disability. Contractor and/or any permitted subcontractor understands and agrees that Contractor and/or any permitted subcontractor is bound by and will comply with the nondiscrimination mandates of all

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8 federal, state and local statutes, regulations and ordinances.

16. Work Product.

Provided CPA is in compliance with its payment obligations herein, all finished and unfinished reports, plans, studies, documents and other writings prepared by and for Contractor, its officers, employees and agents in the course of implementing this Agreement shall become the sole property of CPA upon payment to Contractor for such work. CPA shall have the exclusive right to use such materials in its sole discretion without further compensation to Contractor or to any other party. Contractor shall, at CPA’s expense, provide such reports, plans, studies, documents and writings to CPA or any party CPA may designate, upon written request. Contractor may keep file reference copies of all documents prepared for CPA.

17. Notices
Any notice, request, demand, or other communication required or permitted under this Agreement shall be deemed to be properly given when both: (1) transmitted via email to the email address listed below; and (2) sent to the physical address listed below by either being deposited in the United States mail, postage prepaid, or deposited for overnight delivery, charges prepaid, with an established overnight courier that provides a tracking number showing confirmation of receipt.

In the case of CPA, to:

Name/Title: Theodore Bardacke, Chief Executive Officer
Address: 801 S. Grand Ave., Suite 400, Los Angeles, CA 90017 Telephone: (213) 376-4850
Email: [email protected]
In the case of Contractor, to:

Name/Title:Joe Tellez, Sr. Director of Digital Cloud Strategy & Business Development
Address: 21 Griffin Road North Windsor, CT 06095
Telephone: (978) 970-5600
Email: [email protected]
With copy to: [email protected]

18. Assignment
Neither this Agreement nor any of the Parties’ rights or obligations hereunder may be transferred or assigned without the prior written consent of the other Party. Subject to the preceding sentence, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

19. Subcontracting
Contractor may not subcontract Services to be performed under this Agreement without the prior written consent of CPA. If the CPA’s written consent to a subcontract is not

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9 obtained, Contractor acknowledges and agrees that CPA will not be responsible for any fees or expenses claimed by such subcontractor.

20. Retention of Records and Audit Provision
Contractor and any subcontractors authorized by the terms of this Agreement shall keep and maintain on a current basis full and complete documentation and accounting records, employees’ time sheets, and correspondence pertaining to this Agreement. Such records shall include, but not be limited to, documents supporting all income and all expenditures.

CPA shall have the right, during regular business hours, to review and audit all records relating to this Agreement during the Agreement period and for at least five (5) years from the date of the completion or termination of this Agreement. Any review or audit may be conducted after reasonable advance written notice, during normal working hours and at Contractor’s designated office, or, at CPA’s option, Contractor shall use reasonable efforts to provide all reasonably requested records within a maximum of fifteen (15) days upon receipt of written notice from CPA. Contractor shall refund any monies erroneously charged. Contractor shall have an opportunity to review and respond to or refute any report or summary of audit findings and shall promptly refund any overpayments made by CPA based on undisputed audit findings.

21. Conflict of Interest
a. No CPA employee whose position with the CPA enables such employee to influence the award of this Agreement or any competing Agreement, and no spouse or economic dependent of such employee, shall be employed in any capacity by the contractor or have any other direct or indirect financial interest in this Agreement. No officer or employee of the Contractor who may financially benefit from the performance of work hereunder shall in any way participate in the CPA’s approval, or ongoing evaluation, of such work, or in any way attempt to unlawfully influence the CPA’s approval or ongoing evaluation of such work.
b. Contractor shall comply with all conflict of interest laws, ordinances, and regulations now in effect or hereafter to be enacted during the term of this Agreement. The Contractor warrants that it is not now aware of any facts that create a conflict of interest. If the Contractor hereafter becomes aware of any facts that might reasonably be expected to create a conflict of interest, it shall immediately make full written disclosure of such facts to CPA. Full written disclosure shall include, but is not limited to, identification of all persons implicated and a complete description of all relevant circumstances. Failure to comply with the provisions of this paragraph shall be a material breach of this Agreement.

22. Publicity
Contractor shall not issue a press release or any public statement regarding the Agreement, Services contemplated by this Agreement, or any other related transaction unless CPA has agreed in writing the contents of any such public statement.

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10 23. Governing Law, Jurisdiction, and Venue
This Agreement shall be governed by, and construed in accordance with, the laws of the State of California. The Contractor agrees and consents to the exclusive jurisdiction of the courts of the State of California for all purposes regarding this Agreement and further agrees and consents that venue of any action brought hereunder shall be exclusively in the County of Los Angeles.

24. Amendments
None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Parties.

25. Severability
Should any provision of this Agreement be held invalid or unenforceable by a court of competent jurisdiction, such invalidity will not invalidate the whole of this Agreement, but rather, the remainder of the Agreement which can be given effect without the invalid provisions, will continue in full force and effect and will in no way be impaired or invalidated.

26. Complete Agreement
This Agreement constitutes the entire Agreement between the parties. No modification or amendment shall be valid unless made in writing and signed by each party. Failure of either party to enforce any provision or provisions of this Agreement will not waive any enforcement of any continuing breach of the same provision or provisions or any breach of any provision or provisions of this Agreement.

27. Counterparts
This Agreement may be executed in one or more counterparts, including facsimile(s), emails, or electronic signatures, each of which shall be deemed an original and all of which together will constitute one and the same instrument.

28. Limitation of Liability
Notwithstanding anything to the contrary in this Agreement, Contractor and CPA waive any and all claims against each other for incidental, consequential, special, multiple, and punitive damages arising out of or relating to this Agreement, regardless of whether such damages were foreseeable and whether or not the culpable Party was advised of the possibility of such damages. This mutual waiver includes, but is not limited to, rental expenses, loss of use, loss of production, loss of income, loss of anticipated profit, loss of financing, loss of business, and loss of reputation. This mutual waiver is applicable, without limitation, to all consequential damages due to either Party’s breach or termination of the Agreement. Additionally, Contractor’s total aggregate liability to CPA under this Agreement on all claims of any kind arising out of or in any way related to Contractor’s work or this Agreement, from any cause or causes whatsoever, including, but not limited to, negligence, errors, omissions, strict liability, indemnity, or breach of contract, is limited to the four times (4x) the total amount paid to Contractor under this Agreement; provided however that nothing contained herein shall limit CPA’s right to indemnity, defense, or hold harmless as

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11 specified in this paragraph 12 or to claim or collect under any insurance coverage specified in paragraph 11 up to the full amount of coverage required herein.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.

TRC Engineers, Inc. Clean Power Alliance of Southern California ____________________________________ ____________________________________ By: By: Theodore Bardacke
Title: Title: Chief Executive Officer

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Exhibit A – Scope of Work

PROJECT TASKS AND DELIVERABLES
Contractor shall be responsible for providing a full range of consulting services for the development of a refreshed strategic plan and roadmap for CPA’s data and systems.

Contractor will be responsible for leading the strategic planning process in close consultation with CPA’s Data & Systems team and developing a strategic plan that will guide the CPA’s decision-making on data management and systems development for the three (3) year horizon of 2025 – 2028.

The strategic plan will provide a robust framework for leveraging technology to achieve strategic objectives, organizational goals, enhance operational efficiencies and promote innovation.

Focus areas of the strategic plan shall include digital transformation, cloud infrastructure modernization and integrations, strategic alignment, governance and risk management, measurement and reporting, and focus on end user experience. The strategic plan shall also provide CPA needs assessments and recommendations around new enterprise applications, such as an ERP or financial management application.

Contractor must account for the following tasks and all tasks must be completed according to the timelines set forth below:

Task #1: Current State Assessment

1. Provide a current state assessment of CPA’s data maturity and current technology state related to:

1.1.Data governance.

1.2.Data architecture.

1.3.Technology-related policies and procedures.

1.4.CPA licensed or developed software and systems, including but not limited to, Energy Trading and Rick Management platform custom built on AWS, Adapt2 Settlements software, Quickbooks, Bill.com invoice management and payment system, Plexos, Salesforce CRM, etc.

1.5.Analytical tools and databases including but not limited to AWS, Snowflake, Sigma, Tableau, and Databricks.

1.6.Tools, software and databases that support the following commercial activities: rate setting and tariff database management, load forecasting and analytics, budgeting, accounting, accounts payable and invoice processing and settlements, financial forecasting, energy position management and analytics, electric resource optimization including grid scale battery storage optimization, energy market and credit risk management, integrated resource planning, customer billing and service management, etc.

1.7.Third party-controlled data sources, software and systems relied upon by CPA including but not limited to customer billing data hosted by CPA’s data

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manager Calpine Energy Services, an ETRM, battery storage optimization software and risk management and analytics software hosted by CPA’s scheduling coordinator, Tenaska Energy Services and data provided by the California Independent Systems Operator.

1.8.Cybersecurity and compliance.

1.9.People.

1.10. Process.

2. Initiate kickoff and mobilization.

2.1.Confirm program governance and develop a detailed project plan that includes guidance for managing scope, schedule, budget, risks, issues, stakeholder list, and engagement communication plans.

2.2.Issue data requests to help Contractor’s team better understand the uniqueness of the operating environments impacting CPA’s corporate, customer, and operational systems. Examples include, but are not limited to, application inventory, systems integration landscape, customer programs, energy loads, market conditions, and other internal strategy-related documentation.

2.3.Establish appropriate tools and processes (digital or otherwise) to support collaboration and teaming.

2.4.Conduct a project kick-off meeting to introduce Contractor’s team to the larger CPA steering team expected to participate in the pre-planning phase.

Contractor will coordinate with CPA to host the initial kick-off meeting with key stakeholders to ensure program drivers and expectations alignment.

2.5.Contractor will host periodic check-ins with key CPA staff to discuss progress, successes, and address challenges as they appear

3. Conduct discovery workshops and current statement assessment.

3.1.Discovery workshops will be the primary tool to gather information from CPA’s respective teams and Subject Matter Experts (“SMEs”). In addition, these workshops represent an opportunity to help communicate the project’s objectives and engage the broader CPA organization. Agendas will be developed and distributed before the workshop. Functional and technical domain areas for the workshops include, but are not limited to:

3.1.1. Application portfolio and technology infrastructure ecosystems.

3.1.2. Enterprise architecture and cloud services.

3.1.3. Analytics and data management.

3.1.4. Customer operations and CX.

3.1.5. Meter data operations.

3.1.6. Market operations/energy scheduling and trading.

3.1.7. Distributed energy resource management.

3.1.8. Cybersecurity, compliance and governance.

3.2.Data request review: Review the data request results and incorporate them into workshop materials. Contractor’s team will familiarize themselves with the data provided.

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3.3.Prepare for and conduct the domain workshops: Leveraging industry experience and a deep understanding of current and target states, Contractor will facilitate workshops that are intended to serve as a comparative analysis and opportunity assessment on industry trends and best practices with particular emphasis on Community Choice Aggregators.

These workshops also fill in gaps in the documentation provided on current state, identify the “to-be” state, and review the opportunities identified by the CPA.

3.4.Prepare the initial strategic plan: Capture the point-of-view or current and to-be states generated from the domain workshops. In addition, Contractor will incorporate an analysis on CPA’s collective strengths, opportunities, and potential risks on the three-year strategic planning horizon.

Task #1 Deliverables:

1. Current state overview and assessment section in the Data & Systems Strategic Plan, including time for CPA review and approval of iterations if necessary.

2. Provide an assessment of CPA’s current state Identifying current state strengths, weaknesses, and opportunities.

3. Workshop presentations: Presentations will be in an MS PowerPoint format that assists the team in conducting the various workshops. In addition, any notes and other documentation created in the workshop will be provided.

Timeline for Task #1:

1. Project plan, workshop/interview schedules, and workshop agendas shall be completed by July 19, 2024.

2. Workshop presentations, initial report with current state assessment and SWOT assessment shall be completed by August 15, 2024.

Task #2: Update Data & Systems Strategic Plan (Technology Roadmap)

1. Contractor shall build upon the Task 1 activities and CPA’s 2020 Data and Systems Strategic Plan to develop future state recommendations for data and systems at CPA that address the following pieces within a three-year horizon of 2025 - 2028:

1.1.Data governance, including ensuring adherence to records retention requirements.

1.2.Data integrations across applications application programming interfaces (APIs).

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1.3.Technology-related policies and procedures that CPA should consider adopting (e.g., technology acceptable usage policy).

1.4.Technology architecture planning, including:

1.4.1. Data architecture.

1.4.2. Cloud architecture.

1.4.3. Life-cycle management practices (strengthen data inventory).

1.5.Technology cost optimization, including cloud cost management and license management.

1.6.Data analytics platform, including Tableau, and advanced features such as embedded analytics and self-service analytics.

1.7.Recommendations around managed IT services, such as Help Desk, cloud infrastructure, security services, and network services.

1.8.Technology and systems including but not limited to analytics, ETRM, ERP, and CRM (use enterprise services).

1.8.1. Adoption of DevOps practices, including research, development, testing, and deployment iteratively and continuously.

1.9.Security, including:

1.9.1. Cybersecurity.

1.9.2. Compliance.

1.9.3. Intrusion detection system.

1.9.4. Data encryption in transit and at rest.

1.9.5. Disaster recovery planning.

1.9.6. Incident response planning.

1.9.7. Enterprise security features included in Office 365 ecosystem.

1.9.8. Data backup.

1.10. Cloud management on AWS:

1.10.1. Security.

1.10.2. Infrastructure as a service.

1.10.3. Networking.

1.10.4. Cost optimization.

1.11. People (provide ongoing assessment of staffing needs and effective technology delivery across hybrid and remote working engagements).

1.12. Application of machine learning and artificial intelligence (AI) to transform data and operations.

2. Develop technology objectives: Objectives will be influenced by various components (customers’ expectations, operational improvement plans, load growth and market forces, any regulatory constraints and requirements, state, and regional renewables, etc.).

3. Assess organizational impacts: Evaluate the regulatory, financial, corporate, and customer environment in which the organization operates to determine the potential impacts.

4. Develop and align overall strategy: A compendium of the various components into an overall Data and Systems strategy document, which will be reviewed

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iteratively with leadership to confirm alignment with overall corporate strategies and goals.

5. Gain alignment on initial project list: Develop and disseminate an initial strawman list of technology projects and approaches for review that will serve as an inventory of potential components which other entities have implemented or considered as part of their customer experience and digital grid transformation efforts with emphasis on promoting data driven outcomes.

6. Develop an initial prioritization: Develop a high-level feasibility and potential value analysis for this list, while considering their alignment with the overall strategy developed during this phase.

Task #2 Deliverables:

1. Data & Systems Strategic Plan, including time for CPA review and approval of iterations if necessary.

Timeline for Task #2:

1. Final Data & Systems Strategic Plan delivered by November 15, 2024.

Task #3: Data & Systems Roadmap

1. Develop a detailed roadmap for implementing the Data & Systems Strategic Plan that includes timing, dependencies, and necessary action plans within the three (3) year horizon of 2025 - 2028.

1.1.The primary element will be high-level plan and schedule for the implementation of IT components identified in Task #1.

1.2.The roadmap will include discrete projects, programs, logical groupings, or phases that incorporate the prioritized components, the recommended order in which they should be executed, the constraints to be considered, and high-level cost estimates for each project (including internal and external costs).

1.3.Additional detail will be developed for each grouping to understand timing constraints and dependencies (e.g.: technology procurement lead times, implementation timing, systems integration requirements, etc.). As part of this phase, Contractor will revisit the initial goals, objectives, and overall strategy developed in Task #2 to incorporate any required updates.

2. To conclude the project, Contractor will work collaboratively with CPA to achieve alignment across the various stakeholder groups as well as deliver a final presentation (or series of presentations, if necessary) to the broader stakeholder group. The final presentation(s) will be the start of on-going communication effort regarding the program, the progress of the various projects, and achievement of

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goals and performance measurements.

Task #3 Deliverables:

1. Data & Systems Roadmap, including time for CPA review and approval of iterations if necessary.

2. Executive Summary Presentation: PowerPoint document that summarizes the project and findings for executives.

Timeline for Task #3:

1. Final Data & Systems Roadmap delivered by December 13, 2024.

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Exhibit B – [Intentionally Left Blank]

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Exhibit C – Compensation
Contractor shall satisfactorily provide all the contemplated Services detailed in Exhibit A at the fixed price per deliverable specified in the table below and in compliance with the terms and conditions of this Agreement.

Contract (Task) Item Estimated Due Date
Not to Exceed
Amount
Task 1:

Current State Assessment August 15, 2024 $60,600
Task 2:

Update Data & Systems Strategic Plan
(Technology Roadmap)
November 15, 2024 $136,200
Task 3:

Data & Systems Roadmap December 13, 2024 $45,100
Expenses, if approved in advance, in writing, by CPA $0 TOTAL Program Costs $241,990
Any travel, administrative expenses, and materials (hereinafter, “Expenses”) will be billed in the amount incurred by Contractor for actual out-of-pocket cost, without any additional mark-up by Contractor. Any Expenses incurred shall be billed for the month in which the Expenses are incurred. Expense reports detailing all Expenses, along with receipts, shall be presented to CPA for reimbursement. All expenses must be approved by CPA in advance writing before they are incurred.

The Total Maximum Amount that CPA shall pay Contractor, including any subcontractor that the Contractor may retain, for all Services and Expenses to be provided under this Professional Services Agreement shall not exceed Two Hundred Forty-One Thousand Nine Hundred Ninety Dollars ($241,990) ("Not-to-Exceed" or "NTE").

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Exhibit D – [Intentionally Left Blank]

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Staff Report – Agenda Item 9
To: Board of Directors
From: Gina Goodhill, Senior Director, Government Affairs Approved By: Ted Bardacke, Chief Executive Officer
Subject: Receive and File July 2024 Bill Positions Report Date: July 11, 2024

RECOMMENDATION
Receive and file.

ATTACHMENT

1. 2024 Legislative & Regulatory Policy Platform

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Board of Directors Item 9
Bill Number &
Author
Title & Summary Status CPA Position Alignment with
CPA Policy
Platform
Notes
SB 59
Senator Nancy Skinner
Battery electric vehicles:
bidirectional capability
Would allow the California Air
Resources Board (CARB),
the California Energy
Commission (CEC) and the
CPUC to require any class of
electric vehicles (EV) to be
bidirectionally capable if the
capability would be
compellingly beneficial to the
EV operator and the electric
grid.

Re-referred to
Assembly
Committee on
Utilities and
Energy
6/18/24
This bill was a
recent gut and
amend; while it's
currently in the
Assembly, it will
still need to come
back to the
Senate for
concurrence.

Support 2f, 3a, 3b CPA is actively
researching vehicle-to-grid integration
(VGI) and the
potential benefits and
opportunities for
CPA. Bidirectional
EV batteries are a
critical part of VGI.

AB 2083
Assemblymember Marc
Berman
Industrial Heat
Electrification Roadmap
Would require the CEC to
assess the potential for
achieving an 85 percent
reduction below 1990 levels in
Read second
time and
amended. Re-referred to
Senate
Committee on
Support 2f Industrial emissions
make up 23 percent
of GHG emissions in
California, and
decarbonizing this
sector will be crucial
to meeting the

Agenda Page 144
Board of Directors Item 9
emissions from industrial heat
application processes by
January 1, 2045, and require
the CEC to evaluate
opportunities to increase
electrification of industrial heat
processes.

Environmental
Quality
6/20/24
State’s 2045 GHG
emission goals.

SB 1221
Senator Dave Min
Gas corporations: priority
neighborhood
decarbonization zones
Would create a
Neighborhood
Decarbonization Zone Pilot
Project that would enable
gas corporations to stop
providing gas service within
designated areas. In doing
this, it would unintentionally
allow the CPUC to review
CCAs rates and undermines
CCAs ratemaking authority.

In Assembly. Re-referred to
Committee on
Utilities and
Energy
6/20/24
Oppose Unless
Amended
1a, 1d While CPA supports
the bill’s goal to
establish a process
to identify and
implement
pilot projects to prune
the natural gas
system, the current
draft of the bill
threatens CCA
autonomy and
ratemaking authority.

CPA is working with
the sponsor and
other CCAs to amend
this language.

AB 1176
Assemblymember Rick
Zbur
General plans: Local
Electrification Planning Act
In Senate.

Hearing set in
Committee on
Support 3b, 3c, 3e, 3f, 5d This bill directs cities
and counties to plan
for the increased

Agenda Page 145
Board of Directors Item 9
Requires a city or county to
prepare and adopt a local
plan that identifies
opportunities to expand EV
charging and helps key
constituencies access zero-emissions technologies.

Energy, Utilities,
and
Communications.

Hearing
cancelled at
request of author.
6/24/24
levels of building and
vehicle electrification
that will be needed to
meet the state’s
climate goals.

SB 1130
Senator Steven Bradford
Electricity: Family Electric
Rate Assistance: reports
Expands eligibility for the
Family Electric Rate
Assistance (FERA) utility bill
discount program to
households with fewer than
three members and requires
new reporting by the IOUs.

In Assembly.

Referred to
Appropriations
Committee.
6/20/24
Support 5a Currently, only 12%
of low-income
customers eligible for
FERA are registered
in SCE’s territory, in
contrast to very high
penetration rates for
the CARE program.

This bill could help
increase the
penetration rate for
FERA, which would
help reduce
electricity bills for
low-income
customers who don’t
meet the CARE
customer income
thresholds.

Agenda Page 146
Board of Directors Item 9
AB 2779
Assemblymember Cottie
Petrie-Norris
Independent System
Operator: transmission
planning
Directs CAISO to report to
the Legislature and CPUC on
the use of new grid
enhancing technologies
(GETs). GETs encompass a
suite of technologies that can
be used to maximize the
transfer of electricity across
existing transmission lines.

In Senate.

Ordered to third
reading.
6/18/24
Support 2e This bill could
support efforts to
expand the capacity
of transmission
systems at a lower
cost to ratepayers
AB 2329
Assemblymember Al
Muratsuchi
Energy: California
Affordable Decarbonization
Authority
Creates the Climate Equity
Trust Fund, and the
California Affordable
Decarbonization Authority to
oversee the Trust Fund, to
promote affordable electricity
rates and direct benefits to
electricity customers.

In Assembly.

Held in
Appropriations
Committee
5/16/24
Support 3b, 5d Originally envisioned
in a 2022 bill, this bill
would create a
separate source of
funding for energy
and electrification
outside of ratepayer
rates and could be
used as a vehicle to
curb the ongoing
increase in electricity
bills, particularly on
the delivery side of
the bill.

Agenda Page 147
Board of Directors Item 9
AB 817
Assemblymember Blanca
Pacheco
Open meetings:
teleconferencing:
subsidiary body
Allows, until January 2026, a
subsidiary body of a local
agency to teleconference
without meeting all the
teleconferencing
requirements of the Brown
Act.

In Senate. Failed
passage in Local
Government
Committee
6/05/24
Support 1d, 5d A subsidiary body is
one that does not
have decision-making authority.

CPA’s Community
Advisory Committee
would qualify as a
subsidiary body
under this bill
AB 1852
Assemblymember Blanca
Pacheco (Principal
coauthor Senator
Anthony Portantino)
Joint powers agencies:

Clean Power Alliance of
Southern California:
meetings
Authorizes CPA to continue
its practice of allowing
alternate board members
who are not elected officials
to participate in closed
session meetings when the
primary board member is
unavailable.

Chaptered by
Secretary of
State – Chapter
24, Statutes of
2024.
6/26/24
Sponsor 1d CPA sponsored
similar legislation in
2019 (SB 355;
Portantino), which
authorized CPA to
adopt a policy to
allow alternate board
members who are
not elected officials to
participate in closed
session meetings if
the primary board
member is
unavailable. The bill
was chaptered into
law in 2019 and
sunsets on January

Agenda Page 148
Board of Directors Item 9
1, 2025. This bill will
allow CPA to extend
that practice until
January 1, 2030.

Agenda Page 149
2024 Legislative and Regulatory Policy Platform
Overview and Purpose
The Clean Power Alliance (CPA) Legislative and Regulatory Policy Platform (Platform) serves as a guide to the CPA Board of Directors and CPA staff in their advocacy efforts and engagement on policy matters of interest to CPA. The Platform allows both members of the CPA Board of Directors and CPA staff to pursue actions at the regional, state and federal legislative and regulatory levels in a consistent manner and with the understanding that they are pursuing actions in the best interest of the organization and its mission, its member agencies, and its customers.

The Platform provides direction to CPA staff on positions that should be taken on regulatory matters and legislative bill proposals. The Platform also provides guidance to the Chief Executive Officer on positions that should be taken on legislative and regulatory matters that come before the California Community Choice Association (CalCCA) Board of Directors.

CPA staff report to the Board monthly on all positions taken on legislative bills. For bills that fall outside the scope of this platform; bills that are likely to attract high-profile supporters and detractors, including bills that would modify the California Environmental Quality Act (CEQA); bills that would raise taxes; or bills that would knowingly put CPA at odds with positions that its member agencies have taken, CPA staff will seek approval of a proposed position to the Legislative & Regulatory Committee and Board of Directors before taking a position.

Policy Principles
The Legislative and Regulatory Policy Platform is centered around five basic principles:

1. Protecting CPA’s local control and competitive position, especially as it relates to rates, finances, power procurement and expansion of its service territory.

2. Pursing power resource planning and procurement that promotes the growth in renewable energy capacity at the local level and reduce fossil fuel dependency, with the goal of combating climate change.

3. Developing and administering customer programs that encourage clean energy adoption by CPA customers.

4. Ensuring fair access to data, particularly as it relates to energy usage, billing, and information needed to develop and administer customer programs.

5. Supporting CPA’s ability to set electric rates and offer programmatic services that are affordable and inclusive for all.

These principles are incorporated throughout the below platform.

Agenda Page 150
Policy Platform

1. Affordability and Local Control
a. Fair rates and cost allocation: CPA will pursue administrative and legislative initiatives that will ensure that non-bypassable charges for CPA customers, including any income-graduated fixed charges, are assessed fairly compared to unbundled customers and that CPA’s customers are not unnecessarily burdened by non-bypassable charges compared to unbundled customers. b. Finances: CPA will pursue administrative and legislative initiatives to ensure that CPA is eligible to apply and receive funding made available to the electricity sector for decarbonization, reliability, and affordability purposes, and that CPA’s financial health are not disparately impacted by new regulations.
c. CCA Expansion: CPA will pursue administrative and legislative initiatives to protect CPA’s ability to expand its service to new member agencies. d. Local Control: CPA will pursue administrative and legislative initiatives to protect CPA Board’s authority over CPA’s procurement, rate-setting, governance, and customer program development activities.

2. Power Resources Planning and Procurement
a. Resource Adequacy and Reliability: CPA will pursue administrative and legislative initiatives that will enable CPA to secure capacity resources to meet its reliability obligations, such as initiatives that evaluate the supply of capacity resources available to load serving entities (LSEs), determine the appropriate market mechanisms for LSEs to procure capacity resources, and develop a durable policy framework that encourages all LSEs to construct their fair share of new capacity resources to maintain grid reliability while pursuing decarbonization efforts. b. Carbon-Free Resources: CPA will pursue administrative and legislative initiatives that will maximize CPA’s ability to procure carbon-free resources to meet or exceed the needs of CPA’s three product offerings and its long-term carbon-free procurement goal as required by SB 100 and other statutory or regulatory obligations. c. Renewable Resources: CPA will pursue administrative and legislative initiatives that will maximize CPA’s ability to procure eligible Renewable Portfolio Standard (RPS) resources to meet the needs of CPA’s three product offerings and its long-term RPS procurement goal as required by SB 100 and other statutory or regulatory obligations.
d. Integrated Resource Plan: CPA will pursue administrative and legislative initiatives that will maximize CPA’s ability to plan and procure resources to meet various environmental and reliability goals set by state laws and by its Board of Directors, while offering affordable products and programs to serve its customers, including disadvantaged communities.
e. Transmission: CPA will pursue administrative and legislative initiatives that will expedite new transmission infrastructure needed to meet California’s climate goals, as well as initiatives that will provide CPA adequate access to transmission capacity to maximize its procurement of RPS-eligible or carbon-free resources that meet various statutory and regulatory requirements.
f. Research & Development: CPA will pursue administrative and legislative initiatives that support the research and development of new energy resources that can be procured to meet the reliability and decarbonization goals set by the State and its Board of Directors.

Agenda Page 151
g. Grid Reliability: CPA will pursue administrative and legislative initiatives that support the expansion of a regional grid that improves reliability; accelerates decarbonization; improves transmission planning; reduces costs for ratepayer and load serving entities; maintains California’s ability to set, meet and implement its own climate goals; and protects clean energy jobs within the State.

3. Customer Programs
a. Demand Response, Demand Flexibility and Energy Efficiency: CPA will pursue administrative and legislative initiatives that will enable CPA to pursue demand response programs and opportunities for its customers.
b. Zero-emission vehicles: CPA will pursue administrative and legislative initiatives to promote electrification of the transportation sector in response to state and federal goals aimed at increasing the usage of zero emission vehicles. c. Building decarbonization: CPA will pursue administrative and legislative initiatives that support the ability of CPA to promote statewide building decarbonization, primarily through electrification.
d. Local Grid Management and Resiliency: CPA will pursue administrative and legislative initiatives that supports the ability of CPA and its member agencies to offer local grid management and resiliency solutions to increase local reliability and adaptability that could protect against power outages and extreme heat. e. Distributed Energy Resources: CPA will pursue administrative and legislative initiatives that support the ability of CPA to offer and utilize distributed energy resources as part of its reliability, resiliency and community engagement strategies. f. Research and Development: CPA will pursue administrative and legislative initiatives that support the ability of CPA to explore new opportunities related to behind the meter clean energy resources.

4. Data Access
a. Timely and Accurate Access to Customer Data: CPA will pursue administrative and legislative initiatives that will enable CPA to obtain timely and accurate access to its customers’ data to improve billing accuracy and inform the development and implementation of customer programs.
b. Fair Fees for Data Management Services: CPA will pursue administrative and legislative initiatives to ensure that the fees due to Southern California Edison for data access and management are fairly assessed based on data needs and potential technological improvements.

5. Diversity, Equity, Inclusion
a. Customer Protection: CPA will pursue administrative and legislative initiatives that support the protection of all ratepayers, particularly environmental and social justice communities in CPA’s service territory.
b. Supplier Diversity: CPA will pursue administrative and legislative initiatives that supports supplier diversity in CPA’s contracting activities and through women-owned, minority-owned, disabled-veteran-owned, and lesbian, gay, bisexual, and/or transgender owned business enterprises.
c. Workforce Development: CPA will pursue administrative and legislative initiatives that support workforce development with a focus on new stable, well-paying local jobs, and participation in a just transition to a low-carbon economy.

Agenda Page 152
d. Energy Equity: CPA will pursue administrative and legislative initiatives that supports increased access to clean energy technologies, clean energy and contracting jobs, and clean energy opportunities for environmental and social justice communities in CPA’s service territory.
e. Access to the Electrical Grid: CPA will pursue administrative and legislative initiatives that support reducing timelines in interconnection and service extensions for new construction, critical services, renewable energy, building decarbonization, and other projects in CPA’s service territory.

Agenda Page 153
Staff Report – Agenda Item 10
To: Board of Directors
From: Christian Cruz, Senior Community Outreach Manager Approved by: Ted Bardacke, Chief Executive Officer
Subject: Community Advisory Committee (CAC) Report
Date: July 11, 2024

RECOMMENDATION
Receive and file.

MEETING REPORT

ENERGY ADVISOR PROGRAM UPDATE
In June, the CAC received an update on CPA’s Energy Advisor Program. In 2023, staff engaged the Board, Community Advisory Committee, City Managers, and community-based organizations to update the 2020 Local Programs for a Clean Energy Future. The need for the Energy Advisor program emerged from those conversations to address barriers to electrification and maximize CPA customers’ access to regional, state, and federal incentives. The program will provide the following resources:
• Contractor guidance
• Local, state, and federal rebate resources
• Electrification plans
• On-call and online technical support
• Virtual energy assessments
In addition, the CAC was provided with a timeline for the program's marketing and outreach plan. The CAC recommended that staff continue to provide the committee with information on CPA’s program to share within their regions. Staff will also provide the CAC with community kits, education materials, and social media resources via the CPA CAC portal.

Agenda Page 154
Board of Directors Item 10

MANAGED CHARGING PROGRAM UPDATE
In June, the CAC also received a presentation on CPA’s Managed Charging Program.

CPA has launched a Request for Proposals (RFP) to develop and implement a managed electric vehicle (EV) charging program for CPA residential customers. CPA is looking to strategically shift the load associated with EV charging from peak times, lowering costs for both CPA and our participating customers. Program goals include:
• Broad Eligibility: Use telematics to allow customers to enroll their compatible battery electric vehicle (BEV) or plug-in hybrid electric vehicle (PHEV), in addition to supporting electric vehicle supply equipment (EVSE). • Enroll & Retain Drivers: Successfully enroll at least 6,600 customers annually into the Program. Maintain high levels of program retention (90%+). • Optimize Charging Load: Encourage daily load management optimizations, charging at off-peak times to lower costs, effective reduction of residential customer peaks, and staggered charging across identified intervals. • Effective Incentive Structure: Create an incentive structure that includes a one-time enrollment incentive and seasonal participation incentive that promotes enrollment and ongoing participation.
• Customer Satisfaction: Ensure high customer satisfaction.

The CAC requested that staff bring back this item to provide feedback on CPA’s outreach plan and implementation approach once an implementor has been selected.

ATTACHMENT

1. CAC Meeting Attendance
Agenda Page 155
Board of Directors Item 10
Action Items and Presentations
January
Legislative Update/2024 Policy Platform
February
Renewable Energy (RE) Supply and CPA Product Content
March
Sun Storage Rebate Program
Rates Outlook 2024/2025
April
Cancelled
May
FY 2024/25 Budget
FY 2024/25 Rates
June
Energy Advisor Program
Managed Charging Program
Community Advisory Committee Attendance
2024
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov
East Ventura/West LA County
Angus Simmons ✓ ✓ A ✓ ✓
Vacant X ✓ ✓
Debbie West A ✓ A ✓ ✓
San Gabriel Valley
Richard Tom ✓ A A A A
Vacant
West/Unincorporated Ventura County
Sofia Magallon ✓ ✓
Daniel Mora ✓ ✓ ✓ A
South Bay
Court Casady ✓ ✓ ✓ ✓ A
Diane Wallace ✓ ✓ ✓ ✓ ✓
Gateway Cities
Vacant A ✓ ✓
Genaro Bugarin ✓ A ✓ ✓ ✓
Westside
Cris Gutierrez ✓ A ✓ ✓ ✓
David Haake A ✓ ✓ ✓ ✓
Unincorporated LA County
Neil Fromer ✓ ✓ A ✓ ✓
Vacant
✓ - Attended A – Absent X – Medical/Personal Leave
Agenda Page 156
Staff Report – Agenda Item 11
To: Board of Directors
From: Kate Freeman, Strategic Finance Manager
David McNeil, Chief Financial Officer
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Board Resolutions authorizing execution of up to three Energy Prepayment Transactions
Date: July 11, 2024

RECOMMENDATION
(a) Adopt Resolutions Nos. 24-07-069, 24-07-070, and 24-07-071 approving parameters under which up to a total of three energy prepayment transactions can be completed with either Goldman Sachs (GS), Morgan Stanley (MS), or Royal Bank of Canada (RBC) as CPA’s Underwriter & Prepaid Supplier; authorizing and/or approving documents or “form of” documents supporting the prepay transactions; and directing California Community Choice Financing Authority (CCCFA) to make payments to service providers for issuance costs from prepay bond proceeds.
(b) Delegate authority to the Chief Executive Officer to select the Funding Recipient(s) for prepay transactions completed with either GS or MS.

On June 26, 2024, the Finance Committee received an update from Staff on the proposed prepay transactions and recommended approval by the Board of the contracting approach and delegations described in Recommendations (a) and (b).

Agenda Page 157
Board of Directors Item 11

BACKGROUND/DISCUSSION
In July 2022, the Board adopted Resolution No. 22-07-037 authorizing CPA to join the CCCFA JPA. CCCFA was established for the purpose of assisting its member Community Choice Aggregators (CCAs) in financing or refinancing energy prepayments by issuing tax-advantaged bonds on the members’ behalf, reducing their power purchase costs.

Since its inception in 2021, CCCFA has facilitated the completion of eleven prepay bond transactions in the total amount of $9.8 billion on behalf of its members. CPA’s CEO currently serves as Chair of CCCFA’s Board of Directors.

In October 2022, the Board authorized the issuance of CPA’s first prepay bond; the bond was subsequently issued in February 2023 in the amount of $998.78 million and will provide energy cost savings of $66.5 million to CPA over the initial eight-year period of the bonds. In April 2023, the Board authorized the issuance of CPA’s second prepay bond; the bond was subsequently issued in June 2023 in the amount of $958.29 million and will provide energy cost savings of $32.4 million to CPA over the initial five-year period of the bond.

Through June 2024, CPA has realized savings of approximately $11.5 million in renewable energy costs from its first two prepay transactions. 2024 Prepay Bond Process
In May 2024, the Board approved service contracts with Municipal Capital Markets (MCM) and Chapman & Cutler (Chapman) to support the preparation of one to three additional CPA prepay transactions. Staff subsequently prepared transaction contracts with three prospective Underwriter & Prepaid Suppliers:
• GS (Underwriter) and J. Aron & Company (Prepaid Supplier) • MS (Underwriter) and Morgan Stanley Capital Group (Prepaid Supplier) • RBC (Underwriter and Prepaid Supplier)

GS, MS, and RBC are the top three issuers of prepay bonds in the past five years and are collectively responsible for over 80% of all prepay bond issuances measured by the

Agenda Page 158
Board of Directors Item 11
amount of bond proceeds over the same period. Each of the three Underwriter & Prepaid Suppliers has completed one or more prepay transactions since the beginning of 2024.

On June 26, 2024, the Finance Committee received an update from Staff on the proposed prepay transactions and recommend approval by the Board of the contracting approach and delegations described in Recommendations (a) and (b).

It is estimated that each of the proposed energy prepayment transactions will save CPA between $2 million and $5 million annually in energy procurement costs. The risks of prepay transactions are viewed by staff as reasonably low in light of their financial benefits to CPA.

REQUESTED ACTION
The proposed Board Resolution encompasses the following approvals or authorizations relating to the execution of the prepay transaction:
• Defines the parameters under which the prepay transaction can be completed; • Authorizes staff to execute, or approve for distribution, documents and “form of” documents supporting the prepay transaction; and
• Directs CCCFA to make payments out of bond proceeds to services providers for activities required to issue the prepay bonds.

The proposed Board Resolutions are substantially similar to the Resolutions approved by the Board in October 2022 and April 2023 to support each of the first two prepay transactions. However, in CPA’s prior prepay transactions, staff sought authorization to issue one bond with one predefined Underwriter & Prepaid Supplier (GS). For the current contemplated prepay transactions, Staff are instead seeking authorization to issue up to a total of three bonds with any of the three named Underwriters & Prepaid Suppliers.

Authorizing multiple transactions with three Underwriters & Prepaid Suppliers for CPA’s next prepays is intended to:
• Enable CPA to rapidly transact based on favorable market conditions

Agenda Page 159
Board of Directors Item 11
• Ensure that CPA receives the best available pricing and terms from the most experienced and well-regarded Underwriters & Prepaid Suppliers in the market.

Prepay Transaction Parameters
Through the proposed Board Resolutions, CPA defines the parameters which must be satisfied to execute a prepay transaction. Those parameters are:
• That the prepay bonds will be limited obligations of CCCFA, not obligations of CPA;
• That CPA will complete no more than three prepay transactions in total (across all Underwriter & Prepaid Suppliers);
• That the aggregate bond principal of each prepay transaction will not exceed $1.5 billion.1 Proceeds will be applied to make the energy prepayment, to fund reserves as required, and to pay costs of issuance of the Bonds. This parameter defines the upper bound of the size of each prepay transaction and specifies the uses of proceeds. The final size of each transaction will be determined at the initial pricing date of the bonds in response to market conditions;
• That the “Monthly Discount” and “Minimum Discount” as provided for in the Clean Energy Purchase Contracts shall be at least 5% of the fixed cash flows or equivalent $ per MWh. This establishes the minimum cost savings to CPA at the initial issuance and reset dates of the bonds. CPA retains the right to not enter into a new prepayment transaction or to exit an existing prepayment transaction if the minimum savings is not achieved.
• That CCCFA’s total cost of issuance (TCOI) shall not exceed 1.25% of the amount of bond proceeds.

Prepay Documents
Each of the Resolutions authorizes staff to execute, or approve for release, the following documents and document forms supporting prepay transactions with each of GS, MS, and RBC:
1 The combination of limits on number of bonds (three) and maximum amount of each bond ($1.5 million) means that the maximum total bond proceeds for which authorization is being requested is $4.5 billion.

Agenda Page 160
Board of Directors Item 11
• Clean Energy Purchase Contract – a 30-year agreement between CPA and CCCFA under which CPA purchases assigned discounted energy from CCCFA; • Operational Services Agreement – an agreement between CPA and CCCFA permitting CPA to control various actions of CCCFA relating to prepay project operations;
• Memorandum of Understanding (CCCFA) – an agreement between CPA and CCCFA under which CPA agrees to indemnify CCCFA against certain ratings agency and green bond certification fees payable by CCCFA in the event the prepay financing is unsuccessful.
• Form of Limited Assignment Agreement – a “form of” agreement between CPA, PPA Seller(s), and [Prepaid Supplier] governing the assignment of existing and future PPAs into the prepay project;
• Letter Agreement re: Limited Assignment Agreement – an agreement between CPA and [Prepaid Supplier] to use the Form of Limited Assignment Agreement for future PPA assignments into the prepay project. For RBC, this document is included as Exhibit F of the Clean Energy Purchase Agreement rather than as a separate document.
• PPA Custodial Agreement – an agreement between CPA, CCCFA, [Prepaid Supplier], [Prepay LLC, as applicable], and Custodian that creates a custody account for receipt of payments from [Prepaid Supplier] and CPA to settle monthly PPA Seller invoices; and
• Appendix A of the Preliminary Official Statement – Provides descriptive, operating, and financial information regarding CPA which is used for marketing the bonds to an investor audience. This document will be identical for all three Resolutions.

Compensation to Service Providers
The proposed Resolutions direct CCCFA to make payments to service providers for activities required to issue the prepay bonds. In the event of a successful bond issuance, compensation to these providers for bond issuance (the TCOI) will be paid out of bond proceeds (i.e., not from CPA) and shall not exceed 1.25% of bond proceeds. The service providers and their roles in the issuance of the prepay bonds are:

Agenda Page 161
Board of Directors Item 11
• GS/MS/RBC – bond underwriting services
• Orrick, Herrington & Sutcliffe – tax and bond counsel services • Chapman – prepay counsel services to CPA
• MCM – municipal financial advisory, GIC brokerage, and QIR services to CPA • Moody’s – bond rating services
• Second Party Opinion Provider [to be determined by CPA] – green bond certification
• U.S. Bank National Association – trustee and custodial services • Trustee’s Counsel – trustee counsel retained by trustee to provide legal services • Other parties TBD – accountancy services and miscellaneous In the unlikely event that a prepay bond transaction cannot be completed, but the transaction has already received a credit agency rating and/or a green bond certification:
• CPA will make direct payment to Moody’s (total cost for each transaction’s rating is estimated to be $300,000), and/or
• CPA will make a direct payment to Second Party Opinion Provider [to be determined by CPA] (total cost estimated to be $30,000).

The at-risk costs to CPA are approximately $330,000 per transaction if the bond transaction is not successfully completed. As with CPA’s previous prepay transactions, staff view the risks as acceptable.

Selection of Funding Recipient(s) for GS or MS Transactions Staff recommend that the Board delegate authority to the CEO to select Funding Recipient(s) for transactions completed with GS or MS in accordance with the parameters described Board Resolution Nos. 24-07-069 and 24-07-070. The GS and MS prepay structures allow CPA to elect to either use GS or MS as a prepayment Funding Recipient or to use a third-party Funding Recipient, separate from GS or MS. The flexibility to use a third-party Funding Recipient may enhance CPA savings by helping ensure the participation of a Funding Recipient: i) whose credit is in demand from investors, ii) has appetite for funding at the tenor CPA prefers, and/or iii) can generate the desired savings.

Agenda Page 162
Board of Directors Item 11
Were CPA to elect to use a third-party Funding Recipient, J. Aron (GS) or MS Capital Group (MS) would serve as the Prepaid Supplier only.

FISCAL IMPACT
Upon the successful closing of each prepay bond transaction, the TCOI will be paid by CCCFA out of bond proceeds and not by CPA. Accordingly, there will be no fiscal impact to CPA’s operating expense budget. CPA conservatively estimates annual savings of $2 to $5 million on its energy costs as a result of each prepay transaction, with total savings of $6 to $15 million for the three contemplated prepay transactions. The at-risk costs to CPA are approximately $330,000 per transaction if no bond is issued as described in Compensation to Service Providers section above.

NEXT STEPS
Following adoption of the Resolutions, staff will continue to work with CCCFA, the Underwriters & Prepaid Suppliers, and service providers to finalize and execute prepay documents. Staff anticipates the prepay transactions will be executed in the second half of 2024 and/or the first quarter of 2025 following approval by CCCFA’s Board of Directors.

ATTACHMENTS

1. Presentation on Proposed Clean Energy Prepayment Transactions

2. Appendix A of the Preliminary Official Statement

3. Resolution No. 24-07-069

4. Clean Energy Purchase Contract (GS)

5. Operational Services Agreement (GS)

6. Memorandum of Understanding – CCCFA Prepay (GS)

7. Form of Limited Assignment Agreement (GS)

8. Letter Agreement re: Limited Assignment Agreements (GS)

9. Consolidated, Amended and Restated PPA Custodial Agreement (GS)

10. Resolution No. 24-07-070

11. Clean Energy Purchase Contract (MS)

12. Operational Services Agreement (MS)

13. Memorandum of Understanding – CCCFA Prepay (MS)

14. Form of Limited Assignment Agreement (MS)

15. Letter Agreement re: Limited Assignment Agreements (MS)

Agenda Page 163
Board of Directors Item 11

16. PPA Custodial Agreement (MS)

17. Resolution No. 24-07-071

18. Clean Energy Purchase Contract (RBC)

19. Operational Services Agreement (RBC)

20. Memorandum of Understanding – CCCFA Prepay (RBC)

21. Form of Limited Assignment Agreement (RBC)

22. PPA Custodial Agreement (RBC)

Agenda Page 164
July 11, 2024
Proposed Clean Energy Prepayment
Transactions
Agenda Page 165
2 Recommendation
Adopt Resolutions approving parameters under which up to a total of three prepayment transactions can be completed with either Goldman Sachs (GS), Morgan Stanley (MS), or Royal Bank of Canada (RBC) as CPA's Underwriter & Prepaid Supplier
Approve the delegation of authority to the CEO to select the Funding Recipient(s) for prepayment transactions completed with GS or MS. RBC will serve as the Funding Recipient for any prepayment transactions completed with RBC.

Agenda Page 166
3 Background
Prepays are well-established financing mechanisms, grounded in the US tax code, that allow municipal utilities and CCAs to leverage their status as issuers of tax-exempt debt to reduce energy costs
Since Fall 2021, eleven prepayment transactions totaling over $9.8 billion have been completed by CCAs through the California Community Choice Financing Authority (CCCFA)
CPA executed its first two prepay bond transactions with GS and its subsidiary J. Aron in February and June 2023. The transactions will reduce CPA’s renewable energy costs by approximately $98 million over an eight-year period; CPA has realized approximately $11.5 million of the energy cost savings to date (through June 2024).

In May 2024, the Board approved contracts with Municipal Capital Markets and Chapman & Cutler to support the preparation of 1-3 additional CPA prepay transactions. Staff subsequently prepared contracts with three prospective Underwriter & Prepaid Suppliers.

Agenda Page 167
4 Proposed Approach for Prepays 3, 4 & 5
Staff are requesting the Board adopt three Resolutions enabling the completion of up to three prepay transactions with either of the following Underwriters & Prepaid Suppliers:

GS (Underwriter) & J. Aron (Prepaid Supplier)
MS (Underwriter) & Morgan Stanley Capital Group (Prepaid Supplier) RBC (Underwriter & Prepaid Supplier)
For prepays 1-2, Staff sought authorization to issue one bond transaction with one Underwriter & Prepaid Supplier (GS). Authorizing multiple transactions with three Underwriters & Prepaid Suppliers for CPA's next prepays is intended to:

Enable CPA to rapidly transact based on favorable market conditions Ensure that CPA receives best available pricing and terms from the most experienced and well-regarded Underwriters & Prepaid Suppliers in the market
GS, MS, and RBC are the top three issuers of prepay bonds in the past five years, and are collectively responsible for >80% of all prepay issuances over the period Staff estimate that each of the proposed prepay transactions will reduce CPA’s annual energy procurement costs by $2 - $5 million
As with CPA’s previous prepay transactions, Staff view the risks as acceptable In the event of an unsuccessful transaction, CPA’s liability is limited to the potential payment of a bond rating agency and green bond fees should an issuance fail to occur Agenda Page 168
5 Proposed Approach for Prepays 3, 4 & 5
Staff are requesting authority to complete up
to three prepay transactions of up to $1.5
billion each, with a total amount across all
transactions not to exceed $4.5 billion
Staff estimate CPA’s assignable portfolio of
long-term PPAs achieving COD by 12/31/26
is able to support ~$4.5 billion in prepay
transactions depending on market conditions
The Prepaid Suppliers permit CPA to prepay its
short-term energy purchases, allowing us to price
deals using LT PPAs up to 2-3 years in advance of
COD and start receiving energy cost savings sooner
Three CCCFA prepay bond issuances have
exceeded $1 billion in size
Series 2021B (for EBCE/SVCE): $1.235B
Series 2023G (for MCE): $1.038B
Series 2024A (for SVCE): $1.102B
A $1.5 billion maximum size per bond gives
CPA flexibility to capitalize on favorable
market conditions
Est. Prepayment Par Amount ($B) of CPA
Long-Term PPAs by Online Date
Agenda Page 169
6 Summary of Proposed Board Action
Staff request the Board adopt three Resolutions which encompass the following approvals or authorizations for each of the three Underwriters & Prepay Suppliers:

1. Define the parameters which must be satisfied in order to execute prepay transactions Bonds will be limited obligations of CCCFA, not obligations of CPA CPA will complete no more than three prepay transactions in total (across all prepaid suppliers) Aggregate bond principal of each prepay transaction will not exceed $1.5 billion The "Monthly Discount" and "Minimum Discount" (i.e., CPA's cost savings) as provided for in the Clean Energy Purchase Contracts will be at least 5% of fixed cash flows or equivalent $ per MWh.

CCCFA's total cost of issuance (TCOI) shall not exceed 1.25% of the amount of bond proceeds

2. Execution of proposed CPA documents or document forms (described on Slide 7)

3. Direction to CCCFA to make payments out of bond proceeds to service providers for activities required to issue the prepay bonds
These Resolutions are substantially similar to those approved by the Board to support CPA's first two prepay transactions
Agenda Page 170
7 Summary of Prepaid Supplier Documents
Each of the three Resolutions would authorize the execution or approval of the following documents and document forms with each of GS, MS, and RBC:

1. Clean Energy Purchase Contract – Agreement between CPA and CCCFA to purchase assigned discounted electricity

2. Operational Services Agreement – Agreement between CPA and CCCFA permitting CPA to control various actions of CCCFA relating to project operations

3. Memorandum of Understanding with CCCFA – CPA agrees to indemnify CCCFA for rating agency and green bond certification fees in the event the prepay bonds are not issued

4. Form of Limited Assignment Agreement – Form of agreement between CPA, PPA Sellers, and [Prepaid Supplier] governing the assignment of existing and future PPAs

5. Letter Agreement re: Limited Assignment Agreement1
– CPA and [Prepaid Supplier] agree to use
the Form of Limited Assignment Agreement for future PPA assignments

6. PPA Custodial Agreement – Provides for creation of a custody account for receipt of payments from [Prepaid Supplier] and CPA to settle monthly PPA Seller invoices

7. Appendix A of Preliminary Official Statement – Provides descriptive, operating, and financial information regarding CPA; used for marketing the Bonds (will be identical for all three Resolutions) 1 For RBC, the Letter Agreement re: LAA is included as Exhibit F of the Clean Energy Purchase Contract rather than as a separate document Agenda Page 171
8 Recommendation
Adopt Resolutions approving parameters under which up to a total of three prepayment transactions can be completed with either Goldman Sachs (GS), Morgan Stanley (MS), or Royal Bank of Canada (RBC) as CPA's Underwriter & Prepaid Supplier
Approve the delegation of authority to the CEO to select the Funding Recipient(s) for prepayment transactions completed with GS or MS. RBC will serve as the Funding Recipient for any prepayment transactions completed with RBC.

Agenda Page 172
Appendix
Agenda Page 173
Prepay LLC
4 5
6 10
Initial Issuance and Cash Flows

1. Debt Issuance – CCCFA issues the prepay bonds

2. Prepayment – CCCFA remits net bond proceeds to [Prepay LLC] in return for 30 years of assigned electricity deliveries

3. Unsecured Loan – [Prepay LLC] loans net bond proceeds to [Prepaid Supplier Parent Bank] or another Funding
Recipient. The Funding Recipient makes fixed monthly
payments to [Prepay LLC] equal to expected assigned
electricity multiplied by the PPA price of an assigned
energy project
Monthly Cash / Energy Flows

4. Assigned PPAs – CPA assigns certain rights and obligations as a Buyer on existing PPAs to [Prepaid Supplier]; [Prepaid Supplier] makes monthly payments to PPA Sellers for
assigned delivered energy

5. Electricity Supply – [Prepay LLC] enters into a long-term agreement to purchase electricity from J. Aron to match assigned electricity quantities/terms

6. Project Participant – CCCFA sells CPA all assigned electricity delivered by [Prepay LLC] at the discounted prepay price [Prepay LLC]/CPA is able to solicit bids
from third-party Funding Recipients and
may select a non-[Parent Bank] party if
they offer greater savings to CPA
Funding Recipient
(Prepaid Supplier Parent
Bank or 3rd party)
Project
Participant
(CPA)
Prepaid
Supplier The Bonds
Issuer
(CCCFA)
Prepayment Transaction Diagram (with SPV)
Agenda Page 174
11 CPA prepay transaction will involve the sale of tax-exempt bonds to bond holders by CCCFA(1) CCCFA remits the net bond proceeds to a special purpose entity, [Prepay LLC], in return for a 30-year supply of electricity pursuant to the Master Power Supply Agreement (MPSA) The creation of [Prepay LLC] provides transparency and market level savings for the initial period of the prepay (5-10 years) as well as at each subsequent interest rate reset which is estimated to occur each 5-10 years over the bond term. Without [Prepay LLC], prepay transaction terminates if [Prepaid Supplier Parent Bank] (Parent Bank) cannot offer minimum savings at reset. [Prepay LLC] lends the net bond proceeds to [Parent Bank] under an unsecured term loan agreement (the Funding Agreement). [Parent Bank] makes monthly payments to [Prepay LLC] sufficient to allow it to meet its payment obligations under the Electricity Purchase Sale & Service Agreement (EPSSA; see below). [Parent Bank] issues a guaranty to back obligations of [Prepay LLC] under the MPSA(2).
[Prepaid Supplier] and [Prepay LLC] enter into the EPSSA under which [Prepay LLC] purchases electricity + related products from [Prepaid Supplier] for delivery to CCCFA. [Prepaid Supplier] equitizes [Prepay LLC] through the Subordinated Term Loan Agreement. (1)CPA does not issue the bonds. Bond proceeds do not flow to CPA or to renewable energy project developers/owners. CPA has no obligation to repay the bonds.
(2)The bonds carry the credit rating of [Parent Bank] or selected 3rd Party Transaction Summary – Prepay Bond Issuance (with SPV)
Agenda Page 175
12 CPA assigns certain rights and obligations under its existing PPAs to [Prepaid Supplier] via LAAs Under the LAAs, PPA Sellers will deliver assigned renewable energy to [Prepaid Supplier] and [Prepaid Supplier] assumes the obligation to pay the PPA Sellers for the assigned energy Title to the renewable energy passes instantaneously from PPA Seller to [Prepaid Supplier] to [Prepay LLC] to CCCFA to CPA at the energy delivery point CPA retains other rights and unassigned payment obligations under the PPAs CPA and CCCFA enter the Clean Energy Purchase Contract (CEPC) under which CPA purchases assigned electricity + related products from CCCFA at a discounted price. This is the source of CPA’s savings.

CCCFA uses CPA’s payments to service debt owed to bond holders.

CPA is responsible for assigning sufficient electricity into the prepay transaction via the LAAs If an LAA terminates or expires, CPA will designate another PPA Seller for the term of the CEPC PPA Sellers continue to provide a single monthly invoice for energy and related costs. Monthly payment obligations to PPA Sellers are split between CPA and [Prepaid Supplier] as follows:
[Prepaid Supplier] sells assigned energy to [Prepay LLC] under the EPSSA, [Prepay LLC] sells energy to CCCFA under the MPSA, and CCCFA sells energy to CPA under the CEPC [Prepaid Supplier] pays the PPA Seller for assigned energy at the PPA price. CPA pays the PPA Seller for any unassigned obligations under the PPA.

Settlement of payments are set forth in the PPA Custodial Agreement.

Transaction Summary – PPA Assignments and Settlement
Agenda Page 176
13 California Community Choice Financing Authority (CCCFA) (Bond Issuer) Issues bond; uses bond proceeds to pay [Prepay LLC] in exchange for a 30-year supply of energy Delivers energy to CPA in exchange for prepay energy payments under the CEPC Pays Bond Investors
[Parent Bank] or selected 3rd Party (Funding Recipient) Receives term loan from [Prepay LLC] for amount of bond proceeds Makes monthly payments to [Prepay LLC] allowing it to meet obligations to [Prepaid Supplier] under the EPSSA [Prepaid Supplier] / [Prepay LLC] (Prepaid Supplier)
CPA assigns one or more existing PPAs to [Prepaid Supplier], which assumes the PPA obligations of the “buyer” [Prepaid Supplier] delivers energy to [Prepay LLC] under the EPSSA; [Prepay LLC] delivers energy to CCCFA under the MPSA
[Prepaid Supplier] makes monthly payments to PPA Seller via Custodial Account for assigned energy CPA (Project Participant / Purchaser)
Makes fixed monthly payments to CCCFA / Bond Trustee for prepaid energy Makes monthly payments to PPA Seller via Custodial Account for non-prepaid energy, unassigned obligations PPA Sellers
Receive monthly cash flows from Custodial Account for energy assigned to [Prepaid Supplier] + non-prepaid energy and unassigned obligations
Service Providers
Municipal Financial Advisor, Bond and Tax Counsel, CPA Prepay Legal Counsel, Prepay Bond Underwriters Support the structuring and issuance of a prepay Bond
Prepayment Transaction – Entities (with SPV)
Agenda Page 177
14 California Community Choice Financing Authority (CCCFA) issued $998,780,000 of bonds on February 15, 2023. The bonds were issued at an average yield of 4.60%. The bonds received a “Green Bonds” designation from Kestrel Verifiers and were rated Baa1 by Moody’s.

Bonds were oversubscribed by 1.6x, attracting 34 bidders. Roughly 2/3 of bids came from major bonds and mutual funds. CPA’s name was known and well-regarded among investors.

CPA has assigned three PPAs into the prepay:

Geysers geothermal (50 MW)
Arlington solar + storage (233 MW / 132 MW)
Resurgence solar + storage (48 MW / 40 MW)
During the initial eight-year period of the bonds, CPA will recognize energy cost savings of $66.5 million, or roughly $7.8 million annually CPA Prepay 1 – Transaction Summary
Agenda Page 178
15 California Community Choice Financing Authority (CCCFA) issued $958,290,000 of bonds on June 7, 2023. The bonds were issued at an average yield of 4.62%. The bonds received a “Green Bonds” designation from Kestrel Verifiers and were rated A2 by Moody’s.

Bonds were undersubscribed by 0.93x, attracting 22 bidders. Nearly all of bids came from major bonds and mutual funds, with the top 10 investors accounting for ~88% of bids. CPA’s name was known and well-regarded among investors.

CPA has assigned four PPAs into the prepay:

White Hills / Mohave wind (300 MW)
Daggett 2 solar + storage (65 MW / 52 MW)
Daggett 3 solar + storage (123 MW / 61.5 MW)
Estrella solar + storage (56 MW / 28 MW)
During the initial five-year period of the bonds, CPA will recognize energy cost savings of $32.4 million, or roughly $6.5 million annually CPA Prepay 2 – Transaction Summary
Agenda Page 179

APPENDIX A

THE PROJECT PARTICIPANT

CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
General
Clean Power Alliance of Southern California (“CPA”) is a joint powers authority organized and existing pursuant to the Joint Exercise of Powers Act (constituting Chapter 5 of Division 7 of Title 1 (commencing with Section 6500), as amended or supplemented from time to time) (the “Joint Powers Act”), as a “community choice aggregator” (“CCA”) as defined in Section 331.1 of the Public Utilities Code of the State of California, as amended (the “Public Utilities Code”). For a general description of “community choice aggregators” in California, see the section “COMMUNITY CHOICE AGGREGATORS” in this Official Statement.

The parties to CPA’s Joint Powers Agreement (described below) consist of local governments whose governing bodies elect to join CPA. Pursuant to the Public Utilities Code, when new parties join CPA, all electricity customers in its jurisdiction, with the exception of customers served under California’s Direct Access Program, automatically become default customers of CPA for electric generation, provided that customers are given the option to “opt out”.

Formation and History of CPA
General. CPA, formerly known as Los Angeles Community Choice Energy, was created in 2017 pursuant to a Joint Powers Agreement, as amended, by and among the cities and counties participating in CPA and named therein. CPA was established to study, promote, develop, conduct, operate and manage energy programs in Southern California. Governed by a Board of Directors made up of elected officials from each of its local member communities, CPA has the authority to set rates for the services it furnishes, incur indebtedness, and issue bonds or other obligations. CPA acquires electricity from commercial suppliers and delivers it through existing physical infrastructure and equipment managed by the California Independent System Operator (“CAISO”) and Southern California Edison (“SCE”).

Commencement of Service and Expansion. CPA began operations in February 2018 by serving approximately 1,800 municipal accounts. In June 2018, it enrolled approximately 28,000 municipal and commercial accounts. CPA enrolled approximately 900,000 residential customer accounts in February 2019, approximately 70,000 commercial accounts in May 2019, approximately 4,500 residential and commercial accounts in June 2020, and approximately 36,500 residential and commercial accounts in March 2024. CPA is now the third-largest electricity provider in California and the largest supplier of 100% renewable energy in the nation. CPA expects to enroll approximately 33,000 residential and commercial accounts in October 2025 as it extends service to three new member jurisdictions.

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Service Area
Communities Served by CPA. CPA currently serves the following communities in Los Angeles and Ventura counties as well as the unincorporated areas of Los Angeles and Ventura counties:

Agoura Hills Arcadia
Alhambra Beverly Hills
Calabasas Camarillo
Carson Claremont
Culver City Downey
Hawaiian Gardens Hawthorne
Hermosa Beach Manhattan Beach
Malibu Monrovia
Moorpark Paramount
Ojai Oxnard
Redondo Beach Rolling Hills Estates
Santa Monica Santa Paula
Sierra Madre Simi Valley
South Pasadena Temple City
Whittier Thousand Oaks
West Hollywood Westlake Village
Ventura Unincorporated Los Angeles County
Unincorporated Ventura County
Service Area Map. The service area of CPA is shown on the map below:

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Governance and Management
Board of Directors. CPA is governed by its Board of Directors. Each community that has elected to join CPA appoints a representative to the Board of Directors, who must be a member of the governing body of the local community (i.e., City Council or Board of Supervisors). Members of the Board of Directors serve at the pleasure of their respective communities’ governing body. Meetings of the full Board of Directors are scheduled every month. The Executive Committee, Community Advisory Committee, Energy Planning & Resources Committee, Finance Committee, and Legislative & Regulatory Committee, with members from the Board of Directors, review and report to the Board on various matters. An active and well-informed Board of Directors ensures that CPA’s energy procurement, risk management, rate setting and programmatic activities are aligned with its mission.

Management.

Ted Bardacke; Chief Executive Officer. Mr. Bardacke works with the Board of Directors and CPA’s experienced staff to develop and implement CPA’s strategy to rapidly decarbonize Southern California’s electricity system, provide customer choice and competitive rates, and deliver customer programs that benefit the CPA community.

Prior to CPA, he worked for Los Angeles Mayor Eric Garcetti, where he was Director of Infrastructure for the City of Los Angeles and Deputy Director of the Mayor’s Sustainability Office. Prior to that, Mr. Bardacke worked in the Green Urbanism Program at Global Green USA, and in the 1990s served as a foreign correspondent for the Financial Times of London, based in Mexico City and Bangkok.

Mr. Bardacke holds degrees from Wesleyan University and the Graduate School of Architecture at Columbia University and taught at UCLA’s Luskin School of Public Affairs for 10 years. He currently serves as Vice President of the California Community Choice Association (“CalCCA”). Founded in 2016, CalCCA’s mission is to create a legislative and regulatory environment that supports the development and long-term sustainability of locally run CCAs in California. Mr. Bardacke is also a Board Member of CCCFA.

David McNeil, Chief Financial Officer. Mr. McNeil oversees CPA’s financial and risk management operations. Prior to joining CPA, he served as Manager of Finance for Marin Clean Energy (“MCE”), where he led the effort to arrange for MCE to receive an investment grade credit rating (Baa2) from Moody’s, the first CCA in the country to have achieved a credit rating. Mr. McNeil has 20 years of experience in financial oversight, credit management, strategic planning and risk management, is a Chartered Financial Analyst charter holder and earned a Bachelor of Arts, History from Queen’s University, Kingston.

Matthew Langer, Chief Operating Officer. Mr. Langer is Chief Operating Officer for CPA, leading internal operations, strategy, regulatory affairs, and power procurement. He has broad renewable energy and utility experience, including deep expertise in renewable energy project development, contracting, and operations. Mr. Langer spent nine years at Southern California Edison where he held roles in energy procurement, corporate strategy, transmission and distribution, and customer service. Mr. Langer earned an MBA from the University of Southern California Marshall School of Business and his bachelor’s in Management from Tulane University.

Nancy Whang, General Counsel. Mrs. Whang serves as the General Counsel for CPA. Prior to joining CPA, Mrs. Whang was a partner at Manatt, Phelps & Phillips, LLP, where she was a member of the Government & Regulatory Practice Group. While at Manatt, Mrs. Whang worked on a range of matters from energy and government contracts to health & safety and environmental issues. Mrs. Whang’s prior

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experience also includes two years at the Southern California Gas Company where she worked on the general rate case, risk and safety issues, and operations-related matters. Mrs. Whang is dedicated to public service having served on the Central Area Commission for the City of Los Angeles, and as a Board Member of the Korean American Coalition, and Asian Americans Advancing Justice. Mrs. Whang holds a law degree from UCLA School of Law and received her bachelor’s from Smith College.

Customers
General. CPA provides energy to approximately one million residential, commercial, and industrial accounts serving over 3 million residents and businesses in its service area. The current mix of CPA’s customer base is approximately 48% residential and 52% commercial & industrial based on load served and approximately 49% residential and 51% commercial & industrial based on revenues.

Residential and small and medium businesses represent 77% of CPA’s load. The largest industrial customers, receiving energy at the sub-transmission level, represent 2% of CPA’s load.

Customer Energy Choices. CPA’s goal is to provide customers with competitively priced and affordable electricity with high renewable energy content and low greenhouse gas emissions. CPA currently offers its customers three electricity rate products to choose from: “Lean Power”, “Clean Power” and “100% Green Power”. Lean Power service provides 40% clean energy content, Clean Power service provides 50% clean energy content (including 25% renewable energy content), and 100% Green Power service provides 100% renewable energy content.

Customer Enrollment. Communities served by CPA elect to be enrolled in Lean Power, Clean Power or 100% Green Power service. The communities currently enrolled in Lean Power, Clean Power and 100% Green Power are set forth below:

Lean Power Clean Power
Arcadia Carson
Simi Valley Downey
Temple City Hawaiian Gardens
Westlake Village Moorpark
Paramount
Whittier
Unincorporated Los Angeles County*
100% Green Power
Agoura Hills Alhambra
Beverly Hills Calabasas
Camarillo Claremont
Culver City Hawthorne
Hermosa Beach Malibu
Manhattan Beach Monrovia
Ojai
Redondo Beach
Santa Monica
Sierra Madre
Thousand Oaks
West Hollywood
Unincorporated Los Angeles County
Oxnard
Rolling Hills Estates
Santa Paula
South Pasadena
Ventura
Unincorporated Ventura County
* The preferred rate option for residential CARE customers in unincorporated Los Angeles County will switch from Clean to 100% Green starting in 2027

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New Customers. In October 2023, the CPA Board of Directors authorized the offer of membership to three cities: La Cañada Flintridge, Lynwood, and Port Hueneme. The three cities subsequently adopted ordinances to join CPA's Joint Power Authority and will begin receiving CPA service in October 2025.

CPA expects to enroll a total of approximately 33,000 customers from the three new member jurisdictions.

Customer Election to Opt-out of CPA Service. Customers can “opt-out” of CPA service and receive service from SCE, prior to initial enrollment in CPA or at any time after CPA becomes their energy provider. There is no charge for a customer to opt-out of CPA service. Customers that elect to opt-out during an enrollment period return to service with SCE commencing with the next billing period.

Customers that elect to opt-out after an enrollment period must either wait for six months during which time they continue to receive service from CPA or receive service from SCE for six months at a floating market rate referred to as Transitional Bundled Pricing. Most large customers that opt-out and return to service with SCE outside an enrollment period will elect to continue receiving service from CPA for the six-month waiting period to avoid exposure to market prices.

Cumulative Opt-Out Rate and Customer Retention. Since the completion of CPA’s major enrollment activities at the end of 2019, its customer participation rate (count of enrolled customers/count of eligible customers) has consistently been over 90%. The vast majority of opt-outs occur prior to and during enrollment periods. Customers moving into an existing CPA service area are automatically enrolled in CPA service which has contributed to an increase in participation rates and a consistent number of active customers over the past several years. Management believes that the most price sensitive customers, and customers who prefer to receive service from SCE for a variety of reasons, have already opt-outed out of service with CPA.

Service Rates
General. Rates for CPA energy service are determined by its Board of Directors and are not regulated by the California Public Utilities Commission (“CPUC”). A customer’s total cost of electric service is determined by CPA’s charges for energy and SCE charges for transmission, distribution and other non-by-passable charges. Additionally, CPA’s customers pay a Power Charge Indifference Adjustment (“PCIA”) rate which can vary annually based upon a number of market factors including benchmarks for regional energy costs, resource adequacy, the year in which their community joined CPA and other considerations. These charges, inclusive of the PCIA, establish the all-in cost of service to CPA’s customers. At current rates, CPA’s charges for energy plus the PCIA represents on average approximately 38-42% of a residential customer’s total bill, depending on renewable energy product selection.

Determination of Rates for Electricity. The rates for CPA’s Lean Power, Clean Power, and 100% Green Power products are designed to ensure revenue sufficiency while providing customers with stable rates that are competitive with those offered by SCE. Pursuant to the terms of the Clean Energy Purchase Contract, CPA covenants that it will establish, maintain, and set rates and charges so as to provide revenues sufficient to enable it to pay any and all amounts payable from the revenues of its operations and to maintain any reserves as required by CPA’s reserve policies. CPA further covenants and agrees that it shall not pledge or encumber its revenues through a gross revenue pledge or in any other way which creates a prior or superior obligation to its obligation to make payments under the Clean Energy Purchase Contract.

Current and Historical Rate Information. CPA rates are designed to cover the costs of energy, resource adequacy, and operating costs, fund customer programs, and meet CPA’s reserve and liquidity goals described in its Reserve Policy.

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On June 1, 2023, CPA adopted residential and small/medium business rates* for FY2023/24 based on CPA’s cost of service and reserve targets such that for most customers†:
• CPA Lean rates were targeted to be at a 2% discount compared to SCE’s rates effective March 1, 2023 on a total bill basis
• CPA Clean rates were targeted to be at a 1% discount to SCE’s rates effective March 1, 2023 on a total bill basis
• CPA 100% Green Power rates were targeted to be at a 3% premium to SCE’s rates effective March 1, 2023 on a total bill basis
On June 6, 2024, CPA adopted new rates for FY2024/25 based on CPA’s cost of service and reserve targets, such that for most customers:
• CPA Lean rates were targeted to be at a 1% discount compared to SCE’s rates effective June 1, 2024 on a total bill basis
• CPA Clean rates were targeted to be at parity with SCE’s rates effective June 1, 2024 on a total bill basis
• CPA 100% Green rates were targeted to be at a 5% premium to SCE’s rates effective June 1, 2024 on a total bill basis
Effects of COVID 19 on CPA Operations and Finances
Remote Operations. In response to the pandemic, CPA moved to a “remote work environment” in March 2020 with no disruption in services to our customers. CPA began phasing in a return to in-person work conditions in 2021 and has maintained a hybrid in-person/remote work policy through the present.

Effects on Energy Load. Pandemic-related load reductions in the small and medium commercial sectors were offset by increases to residential usage, with no net reduction in overall load during the period.

Payment Delinquencies and Bad Debt Reserves. CPA accounts receivable are billed and collected by SCE. During the pandemic CPA experienced an increase in past due accounts receivable resulting from the recession and a moratorium on disconnections and late payment fees required by the CPUC.

Management monitor accounts receivable closely and adjust Bad Debt Reserves in response to the aging of receivables, market events and other factors. Management believe that bad debt reserves are conservatively estimated and, at the time of estimate, are the best estimate of customer non-payment.

Financial Assistance. In 2020-2021, CPA provided $2 million in immediate COVID-19 bill credits to approximately 77,000 residential and small business customers. In 2021, CPA instituted a rate freeze for CARE (low-income) customers keeping their rates at 2020 levels. That rate freeze was later extended until September 30, 2022.

CPA customers received additional financial assistance from the state of California. The State Budget Act of 2021 created and funded the California Arrearage Payment Program (“CAPP”) to provide *
Small/medium business rates include all non-residential accounts on the following rate schedules: TOU-GS-1, TOU-GS-2, TOU-EV, TC, and WTR. In Rolling Hills Estates, South Pasadena, and unincorporated Los Angeles County (Phase 1 & 2), small/medium business rates also include non-residential accounts on TOU-PA, LS, and AL rate schedules. †
Comparisons are total bill comparisons based on representative 2018 PCIA vintage rate schedules, average customer usage and load profiles for the specified rate classes, and SCE rates as of June 1, 2024. Individual customer comparisons vary by specific rate schedule and customer usage.

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financial assistance to active and inactive residential and commercial customer accounts reflecting delinquent balances incurred during the COVID-19 pandemic relief period (March 4, 2020 through June 15, 2021). CPA customers received $15.8 million in financial assistance through the 2021 CAPP, for which payment was applied to customer accounts in early 2022. The State Budget Act of 2022 appropriated additional funds for CAPP and extended the eligibility period to cover electric bills for active residential customers issued between March 4, 2020 and December 31, 2021. CPA’s active residential customers received $10 million in financial assistance through the 2022 CAPP, for which payment will be applied to customer accounts in early 2023.

California Renewable Portfolio Standards and Other Regulations General. Community choice aggregators such as CPA are “load-serving entities” (“LSEs”) and as such are required to comply with California’s Renewable Portfolio Standard (“RPS”), Resource Adequacy (“RA”) requirements and Power Source Disclosure requirements described below.

Renewable Portfolio Standard. California’s RPS requires LSEs to supply their retail sales with minimum quantities of eligible renewable energy. Senate Bill 100 directs all LSEs to procure 60% of their portfolios from RPS-eligible resources by 2030, and 100% of their retail sales from zero-carbon resources (or eligible renewable resources) by 2045. CPA has exceeded the annual RPS regulatory minimum requirements each year since its inception. In 2022, CPA met 70% of its total retail sales with eligible RPS resources, above the 2022 RPS percentage target of 38.5%.

Resource Adequacy. RA, a California program jointly administered by the CPUC, the California Energy Commission (“CEC”) and the CAISO, establishes RA obligations applicable to all LSEs within the CPUC’s jurisdiction, including investor-owned utilities (IOUs), energy service providers (ESPs), and CCAs. The goals of the RA Program are to provide sufficient resources to the CAISO to ensure the safe and reliable operation of the grid in real time and to provide appropriate incentives for the siting and construction of new resources needed for reliability in the future. CPA has a strong track record of meeting its RA obligations and expects to meet its future RA obligations through its Energy Risk Management Policy to the extent supply is available in the bilateral markets.

Power Source Disclosure. California law requires LSEs to disclose the types of power resources used to supply retail sales. This mandate, known as the Power Source Disclosure Program (“PSDP”), is a consumer information program managed by the CEC on an annual basis. A key output of the PSDP is the Power Content Label (“PCL”). The PCL is an LSE-specific document that shows the breakdown of power resource types for each of the LSE’s energy products used to serve retail load, as well as a breakdown of resource types for the overall California grid. The PCL is distributed to customers each summer.

Energy Demand
Long-term Load Forecast. CPA’s long-term load forecast is a 10-year projection of electricity that will be consumed by CPA’s customers. CPA’s long-term load forecast considers the number and types of customers that CPA expects to serve, historical electricity use patterns, temperature and other weather conditions, as well as trends in energy efficiency, behind-the-meter, rooftop solar and electric vehicle adoption, appliance electrification and other factors. The forecast is stated in terms of retail and in wholesale load, which includes an estimate of electricity losses in the distribution system.

The table below shows CPA’s long-term retail and wholesale load forecast for 2024-2033. 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Gross Retail Load (GWh) 10,819 11,088 11,647 11,757 12,030 12,227 12,532 12,826 13,208 13,514 Gross Wholesale Load (GWh) 11,501 11,787 12,383 12,500 12,790 13,000 13,324 13,636 14,042 14,368

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Sources of Energy
Energy Purchases. During the normal course of business, CPA purchases electrical power from numerous suppliers. Electricity costs include the cost of energy and capacity arising from bilateral contracts with energy suppliers as well as wholesale sales and generation credits, and load and other charges arising from CPA’s participation in the CAISO’s centralized market. The cost of electricity and capacity is recognized as “Cost of electricity” in the Statements of Revenues, Expenses and Changes in Net Position.

To comply with the State of California’s RPS and other product content targets, CPA acquires RPS eligible renewable energy evidenced by Renewable Energy Certificates (“RECs”) recognized by the Western Renewable Energy Generation Information System (“WREGIS”). CPA obtains RECs with the intent to retire them and does not sell or build surpluses of RECs with a profit motive. CPA purchases capacity commitments from qualifying generators to comply with the RA Program. CPA is in compliance with external mandates and self-imposed benchmarks.

Energy Load and Supply Risk Management. Volumetric risk reflects the potential uncertainty in the quantity of different power supply products (e.g., renewable energy, Carbon Free Energy and capacity) required to meet the needs of CPA customers. This uncertainty can lead to adverse financial outcomes, as well as create potential for CPA to fail to meet reliability or renewable energy compliance requirements established by the State of California and/or the CPA Board. Customer load is subject to fluctuation due to customer opt-outs or departures, temperature deviation from normal, unforeseen changes in the growth of behind the meter generation by CPA customers, unanticipated energy efficiency gains, new or improved technologies, as well as local, state and national economic conditions. CPA manages volumetric risk by taking steps to:
• Implement robust short- and long-term load and generation supply forecast methodologies, including regular monitoring of forecast accuracy through time and refining such forecasts, including by incorporating CPA’s actual load data into forecasts as such data becomes available;
• Account for volumetric uncertainty in load and/or generation supply in the Energy Risk Hedging Strategy;
• Monitor trends in customer onsite generation, economic shifts, and other factors that affect electricity customer consumption and composition; and
• Proactively engage with customers in developing distributed energy resources and behind-the- meter generation and energy efficiency programs so as to better forecast changes in load.

Procurement. CPA procures energy and RA consistent with its Energy Risk Management Policy.

Procurement is conducted through market-based transactions for products including Fixed Price Energy, Portfolio Content Category 1 (“PCC1”) Renewable Energy, PCC2 Renewable Energy, Carbon Free Energy, and RA Capacity, as well as through longer-term power purchase agreements (“PPAs”) entered into pursuant to statutory requirements as well as voluntary long-term resource acquisition decisions made independently by CPA pursuant to its Integrated Resource Plan or other Board-approved strategies. Short-term procurement is conducted through participation in the CAISO and in bilateral markets. CPA may use a variety of methods to procure long-term contracts, including competitive solicitations, bilaterally negotiated agreements, or regulatory proceedings, with oversight including shortlist approvals or procurement recommendations, provided by the Energy Resources & Planning Committee of the Board.

Long-term procurement (contract terms greater than five years) is subject to Board approval.

Planning for Extreme Weather Events. CPA’s hedging polices allow for hedging in excess of expected load during seasons and at times of the day when extreme weather events tend to occur. As described in the next section, CPA currently has 634.5 MW of operating and dispatchable energy storage

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assets that can be charged during periods of lower electricity use and discharged when temperatures and usage reach extreme levels. Additional storage assets under contract are expected to come online in the coming years. CPA’s residential customers were defaulted onto Time of Use rates in early 2022. Time of Use rates incentivize customers to reduce electricity use when usage and prices are highest. CPA also administers a demand response program (Power Response) and actively supports the CAISO and other state efforts to encourage customers to reduce electricity consumption during extreme heat events.

Further descriptions of CPA’s policies and procedures addressing energy procurement and risk management can be found on the CPA website at https://www.cleanpoweralliance.org. The reference to this website address is presented herein for informational purposes only, and information on such website is not incorporated by reference to this Official Statement.

Energy Storage
General. CPA has entered into long-term Energy Storage Agreements (ESAs) for the following resources:

Project Name Location
Actual / Anticipated
COD
Energy Storage Capacity
(MW / MWh)
Sanborn Kern County, CA November 2021 100 / 400
High Desert San Bernardino County, CA December 2021 50 / 200 Luna Storage Los Angeles County, CA August 2022 100 / 400 Arlington Energy
Center II Riverside County, CA August 2022 132 / 528
Resurgence Solar II San Bernardino County, CA September 2023 40 / 160 Daggett Solar Power 3 San Bernardino County, CA November 2023 61.5 / 246 Daggett Solar Power 2 San Bernardino County, CA December 2023 52 / 208 Estrella Los Angeles County, CA December 2023 28 / 112
Arica Solar Riverside County, CA April 2024 71 / 284
Rexford Tulare County, CA December 2024 240 / 960
Sagebrush Kern County, CA January 2025 40 / 160
Desert Quartzite Riverside County, CA March 2025 150 / 600 Chalan Kern County, CA June 2025 25 / 100
Solar Star 3 Kern County, CA July 2025 23 / 92
Solar Star 4 Kern County, CA August 2025 23 / 92
Desert Sands II Riverside County, CA June 2027 140 / 560 Key Fresno County, CA June 2027 190 / 760
Drifter Ventura County, CA June 2027 300 / 1,200
Denali San Joaquin County, CA December 2027 93 / 372

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The storage capacity procured under these contracts will allow CPA to store energy during off-peak hours while prices are low and discharge it during evening super peak hours while prices are high.

Dispatchable storage assets are expected to offset wholesale costs to serve load during the evening super peak, significantly reducing CPA’s exposure to energy price risk during these hours. ESAs also provide CPA with the opportunity to earn revenue from the sale of ancillary services to the CAISO.

Cyber Security
CPA carries cyber risk insurance coverage against liabilities resulting from potential cyber security events in the aggregate amount of $2 million.

Financial Information
Revenues from Energy Sales and Operating Expenses. CPA derives its operating revenues primarily from energy sales to its customers. Operating revenues increased over the past five years as a result of retail rate increases and enrollment of new communities. Operating expenses, which are comprised primarily of energy procurement costs, increased primarily due to increased market prices and the enrollment of new communities.

Other Sources of Revenue. CPA receives revenue from sources other than retail customer sales including funding from the CPUC to support the Power Share program and from various other sources.

Financial Statements. For financial information related to CPA, see the annual audited financial statements of CPA for the fiscal years ended June 30, 2023 and June 30, 2022 attached to this Official Statement as APPENDIX B.

Deposit Accounts. CPA maintains its cash in both interest-bearing and non-interest-bearing demand and term deposit accounts at River City Bank of Sacramento, California. CPA’s deposits with River City Bank are subject to California Government Code Section 16521 which requires that River City Bank collateralize public funds in excess of the Federal Deposit Insurance Corporation limit of $250,000 by 110%. CPA monitors its risk exposure to River City Bank on an ongoing basis. CPA’s Investment Policy permits the investment of funds in depository accounts, certificates of deposit, the Local Agency Investment Fund program operated by the California State Treasury, the California Asset Management Program administered by PFM Asset Management LLC, United States Treasury obligations, Federal Agency Securities, commercial paper, money market funds and FDIC insured placement service deposits.

Other Liquidity Sources. In September 2021, CPA entered into a revolving credit agreement with JPMorgan Chase Bank to provide working capital and letters of credit. The available credit line under this agreement is $160,000,000. The agreement expires on March 31, 2025.

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RESO NO. 24-07-069
RESOLUTION NO. 24-07-069

RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN

POWER ALLIANCE OF SOUTHERN CALIFORNIA (CLEAN

POWER ALLIANCE) AUTHORIZING THE EXECUTION AND

DELIVERY OF CLEAN ENERGY PURCHASE CONTRACTS AND

CERTAIN OTHER DOCUMENTS IN CONNECTION WITH THE

ISSUANCE OF CALIFORNIA COMMUNITY CHOICE FINANCING

AUTHORITY (CCCFA) CLEAN ENERGY PROJECT REVENUE
BONDS; AND CERTAIN OTHER ACTIONS REQUIRED TO

ENSURE THE REDUCTION IN THE COSTS OF RENEWABLE

ENERGY THEREWITH

THE BOARD OF DIRECTORS OF CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA DOES HEREBY FIND, RESOLVE, AND ORDER AS FOLLOWS:

WHEREAS, Clean Power Alliance of Southern California (“Clean Power Alliance” or “CPA”) was formed on June 27, 2017, under the provisions of the Joint Exercise Powers Act of the State of California, Government Code section 6500 et seq. (the “JPA Law”);
WHEREAS, Clean Power Alliance is duly organized, validly existing, and in good standing under and by virtue of the laws of the State of California, is duly authorized to transact business, having obtained all necessary filings, governmental licenses and approvals in the State of California, and has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage;
WHEREAS, Clean Power Alliance maintains an office at 801 S. Grand Ave., Suite 400, Los Angeles, CA 90017, and this is the principal office at which it keeps its books and records;
WHEREAS, Clean Power Alliance is a community choice aggregator (as defined in Section 331.1 of the Public Utilities Code of the State of California (the “Public Utilities Code”), and is a public agency (as defined in the JPA Law) that has implemented a CCA program pursuant to Section 366.2 of the Public Utilities Code, and possesses the power to purchase and sell electric energy and enter into related contracts for such purposes; WHEREAS, Clean Power Alliance, acting pursuant to the JPA Law, may enter into a joint exercise of powers agreement with one or more other public agencies pursuant to which such contracting parties may jointly exercise any power common to them and, pursuant to Government Code Section 6588, to exercise certain additional powers; WHEREAS, pursuant to the provisions of the JPA Law, Clean Power Alliance and certain other California community choice aggregators entered into a joint powers agreement (the “Joint Powers Agreement”) pursuant to which the CCCFA (the “Issuer”) was organized for the purpose, among other things, of entering into contracts and issuing bonds to assist community choice aggregators, including Clean Power Alliance, in financing the acquisition of supplies of clean energy;

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RESO NO. 24-07-069
WHEREAS, the Issuer is authorized by its Joint Powers Agreement to acquire supplies of clean energy and to issue revenue bonds to finance the cost of acquisition of such supplies, and is vested with all powers necessary to accomplish the purposes for which it was created;
WHEREAS, Clean Power Alliance has determined that it is desirable to acquire a long-term supply of clean energy from the Issuer pursuant to up to three separate clean energy prepayment transactions (each a “Prepayment Transaction”); WHEREAS, Clean Power Alliance has determined to authorize pursuant to this Resolution and accompanying Resolutions 24-07-070 and 24-07-071 (each a “Prepayment Resolution”), the undertaking of any or all such Prepayment Transactions with the Prepaid Seller(s) identified in the applicable Prepayment Resolution, but in no event shall Clean Power Alliance be authorized to complete more than three Prepayment Transactions in total pursuant to the authorization provided for in all such Prepayment Resolutions;
WHEREAS, in connection with the foregoing, Clean Power Alliance is requesting the Issuer to agree to purchase on a prepaid basis certain quantities of clean energy from one or more Delaware limited liability companies own by J. Aron (each a “Prepaid Seller”) and to sell such clean energy to Clean Power Alliance, as contemplated herein (each a “Project”);
WHEREAS, Clean Power Alliance is requesting that the Issuer finance the costs of each Project with the proceeds of its clean energy project revenue bonds, each with a Series designation determined by the Issuer based on the timing and sequence of issuance (the “Bonds”);
WHEREAS, Clean Power Alliance has determined to authorize the representatives of Clean Power Alliance to take all necessary action to accomplish the purchase of clean energy from the Issuer and to assist the Issuer in the issuance, sale and delivery of the Bonds; and
WHEREAS, there have been submitted to this meeting for approval forms of the following agreements to which Clean Power Alliance is a party (collectively, the “CPA Documents”):

1. Clean Energy Purchase Contract between Clean Power Alliance and the Issuer;

2. Consolidated, Amended and Restated PPA Custodial Agreement by and among Clean Power Alliance, J. Aron & Company LLC, a New York limited liability company (“J. Aron”), the Issuer, and a custodial bank agreed to by the Issuer and Clean Power Alliance;

3. Form of Limited Assignment Agreement, by and among Clean Power Alliance, the counterparty to the power purchase agreements described therein, and J. Aron;

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RESO NO. 24-07-069

4. Letter Agreement between Clean Power Alliance and J. Aron regarding matters relating to Limited Assignment Agreements;

5. Operational Services Agreement relating to the Project, by and between Clean Power Alliance and the Issuer; and

6. Memorandum of Understanding between Clean Power Alliance and the Issuer indemnifying Issuer against certain ratings fees.

WHEREAS, there have also been submitted to this meeting forms of the following additional documents relating to the Project:

1. Appendix A to the Preliminary Official Statement to be used in connection with the offering and sale of the Bonds (together with the CPA Documents, the “Project Documents”);

NOW, THEREFORE, IT IS HEREBY DETERMINED, AFFIRMED, AND
ORDERED BY THE BOARD OF DIRECTORS OF THE CLEAN POWER ALLIANCE as follows:

Section 1. AUTHORIZED REPRESENTATIVES. The following named individuals are the authorized representatives of Clean Power Alliance with the respective titles specified below (collectively referred to as “Authorized Representatives” and individually referred to as an “Authorized Representative”):

NAMES TITLES
Deborah Klein Lopez Chair of the Board
Ted Bardacke Chief Executive Officer
David McNeil Chief Financial Officer
Matthew Langer Chief Operating Officer
Nancy Whang General Counsel
Section 2. CPA Documents. The proposed forms of the CPA Documents, attached hereto as Exhibit A, are hereby approved. The form of Limited Assignment Agreement may be used, in a substantially similar form, for assignments of the initial or any additional Clean Power Alliance power purchase agreements, as needed to maintain the transactions approved hereby, and any such Limited Assignment Agreements shall be included in the CPA Documents are hereby approved. Subject to the parameters set forth in Section 5 of this Resolution, any Authorized Representative is hereby authorized and directed, for and on behalf of Clean Power Alliance, to execute and deliver the CPA Documents in substantially similar form, with such changes and insertions therein as the Authorized Representatives executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 3. Appendix A to the Preliminary Official Statement. Appendix A to the Preliminary Official Statement is hereby approved. Any Authorized Representative is hereby authorized and directed, for and on behalf of Clean Power Alliance, to execute and deliver a certificate as to the information regarding Clean Power Alliance contained in such Appendix A, with such changes and insertions therein as the Authorized

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RESO NO. 24-07-069
Representative approving the same may deem necessary or appropriate. Clean Power Alliance hereby authorizes the inclusion of such Appendix A in the Preliminary Official Statement and the final Official Statement, in each case with such changes as may be approved as aforesaid.

Section 4. Actions Authorized. The Authorized Representatives, each acting alone, are hereby authorized and directed, for and in the name and on behalf of Clean Power Alliance, to execute and deliver any and all documents, including, without limitation, any tax certificate relating to its expected use of the energy to be purchased by it from each Project, any continuing disclosure certificate or similar agreement required for the offering or sale of the Bonds, and any and all closing certificates to be executed in connection with the issuance of the Bonds and to take any and all actions which may be necessary or advisable, in their discretion, to effectuate the actions which Clean Power Alliance has approved in this Resolution, for the issuance, sale and delivery of the Bonds, and to consummate by Clean Power Alliance the transactions contemplated by the Clean Energy Purchase Contract for each Project. Documents approved hereby and the other Project Documents presented to the Board herewith, including any subsequent amendments, waivers or consents entered into or given under or in accordance with such documents.

Section 5. Transaction Parameters. The approvals provided for herein shall be subject to the following parameters:
(a) the Bonds will not be obligations of Clean Power Alliance, but will be limited obligations of the Issuer payable solely from the revenues and other amounts pledged thereto, including amounts payable by Clean Power Alliance under the Clean Energy Purchase Contract;
(b) no more than three total Prepayment Transactions will be completed on behalf of Clean Power Alliance pursuant to the authorizations granted by this Resolution and the other Prepayment Resolutions;
(c) with respect to each Prepayment Transaction, the aggregate principal amount of the related Series of Bonds shall not exceed $1,500,000,000; (d) the "Monthly Discount" and "Minimum Discount" as provided for in the Clean Energy Purchase Contract for each Project shall be at least 5% of the fixed cash flows or equivalent $ per MWh; and
(e) CCCFA total cost of issuance including all underwriting, legal and consultant fees for each Project will not exceed 1.25% of the amount of the proceeds of the Bonds issued by CCCFA with respect to such Project.

Section 6. Execution and delivery of the CPA Documents by an Authorized Representative shall be conclusive evidence that the parameters set forth in Section 5 have been met, and all actions heretofore taken by the Authorized Representatives with respect to the issuance of the Bonds are hereby ratified, confirmed, and approved.

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RESO NO. 24-07-069
Section 7. If Section 5 and Section 6 listed herein have been met, an Authorized Representative may direct CCCFA to make payments to vendors that provided professional services to CPA to complete the CPA Documents and ultimately the issuance of the Bonds with respect to each Project. These professional services include legal counsel, bond counsel, tax counsel, municipal financial advisor, swap advisor, trustee and trustee counsel, underwriter of the bonds, underwriter’s counsel, and any other vendor required to complete the issuance of the Bonds. Payment to these vendors is considered a cost of issuance and will be paid by CCCFA out of the proceeds of the sale of the Bonds.

IT IS HEREBY FURTHER DETERMINED AND ORDERED that the Authorized Representatives are duly elected, appointed, or employed by or for Clean Power Alliance, as the case may be. This Resolution now stands of record on the books of Clean Power Alliance, is in full force and effect, and has not been modified or revoked in any manner whatsoever.

IT IS HEREBY FURTHER DETERMINED AND ORDERED that any and all acts authorized pursuant to this Resolution and performed prior to the passage of this Resolution are hereby ratified and approved.

IT IS HEREBY FURTHER DETERMINED AND ORDERED that this Resolution shall take effect upon its passage, shall be continuing and shall remain in full force and effect unless and until expressly revoked by further resolution of the Board of Directors.

ADOPTED AND APPROVED this ____ day of __________ 2024.
____________________________
Deborah Klein Lopez, Chair
ATTEST:
_________________________
Gabriela Monzon, Secretary

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RESO NO. 24-07-069

EXHIBIT A
CPA Documents
(see attached)

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RESO NO. 24-07-069

EXHIBIT B
Additional Project Documents
(see attached)

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CLEAN ENERGY PURCHASE CONTRACT
between

CALIFORNIA COMMUNITY CHOICE FINANCING AUTHORITY
and

CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
Dated as of [_____], 2024

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-i-TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS ........................................................................................................2 Section 1.1 Defined Terms ................................................................................................2 Section 1.2 Definitions; Interpretation.............................................................................12 ARTICLE II. DELIVERY PERIOD; NATURE OF CLEAN ENERGY PROJECT; CONDITION PRECEDENT ........................................................................13 Section 2.1 Delivery Period .............................................................................................13 Section 2.2 Nature of Clean Energy Project ....................................................................13 Section 2.3 Condition Precedent......................................................................................13 Section 2.4 Pledge of this Agreement..............................................................................13 ARTICLE III. SALE AND PURCHASE; PRICING...............................................................13 Section 3.1 Sale and Purchase of Product........................................................................13 Section 3.2 Payments.......................................................................................................13 Section 3.3 Limited Obligation to Take Base Quantities ................................................14 Section 3.4 Annual Refund..............................................................................................14 Section 3.5 Reset Period Remarketing.............................................................................14 ARTICLE IV. FAILURE TO SCHEDULE PRODUCT .........................................................15 Section 4.1 Issuer’s Failure to Schedule Base Quantity (Not Due to Force Majeure)........................................................................................................15 Section 4.2 Purchaser’s Failure to Schedule or Take Base Quantities (Not Due to Force Majeure)..............................................................................................16 Section 4.3 Failure to Deliver or Take Due to Force Majeure.........................................16 Section 4.4 Assigned Product ..........................................................................................16 Section 4.5 Sole Remedies...............................................................................................16 ARTICLE V. DELIVERY POINTS; SCHEDULING .............................................................17 Section 5.1 Delivery Points..............................................................................................17 Section 5.2 Transmission and Scheduling .......................................................................17 Section 5.3 Title and Risk of Loss...................................................................................17 Section 5.4 PCC1 Product and.........................................................................................18

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-ii-Section 5.5 Communications Protocol.............................................................................20 Section 5.6 Deliveries within CAISO or another Balancing Authority...........................21 Section 5.7 Assigned Products.........................................................................................21 ARTICLE VI. ASSIGNMENT OF POWER PURCHASE AGREEMENTS........................21 Section 6.1 Assignments Generally .................................................................................21 Section 6.2 Failure to Obtain ...........................................................................................22 Section 6.3 Adjustments to Base Quantities....................................................................23 Section 6.4 J. Aron Non-Payment to APC Party. ............................................................23 ARTICLE VII. USE OF PRODUCT .........................................................................................23 Section 7.1 Tax Exempt Status of the Bonds...................................................................23 Section 7.2 Priority Products ...........................................................................................23 Section 7.3 Assistance with Sales to Third Parties..........................................................23 Section 7.4 Qualifying Use..............................................................................................24 Section 7.5 Remediation ..................................................................................................24 Section 7.6 Remediation; Ledger Entries; Redemption...................................................25 ARTICLE VIII. REPRESENTATIONS AND WARRANTIES; ADDITIONAL COVENANTS ................................................................................................26 Section 8.1 Representations and Warranties of Issuer.....................................................26 Section 8.2 Warranty of Title...........................................................................................27 Section 8.3 Disclaimer of Warranties ..............................................................................27 Section 8.4 Continuing Disclosure ..................................................................................27 ARTICLE IX. TAXES ................................................................................................................27 ARTICLE X. JURISDICTION; WAIVER OF JURY TRIAL ...............................................28 Section 10.1 Consent to Jurisdiction..................................................................................28 Section 10.2 Waiver of Jury Trial......................................................................................28 ARTICLE XI. FORCE MAJEURE ...........................................................................................29 Section 11.1 Applicability of Force Majeure.....................................................................29 Section 11.2 Settlement of Labor Disputes........................................................................29

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-iii-ARTICLE XII. GOVERNMENTAL RULES AND REGULATIONS...................................29 Section 12.1 Compliance with Laws .................................................................................29 Section 12.2 Contests.........................................................................................................29 Section 12.3 Defense of Agreement ..................................................................................30 ARTICLE XIII. ASSIGNMENT................................................................................................30 ARTICLE XIV. PAYMENTS ....................................................................................................30 Section 14.1 Monthly Statements ......................................................................................30 Section 14.2 Payments.......................................................................................................31 Section 14.3 Payment of Disputed Amounts .....................................................................32 Section 14.4 Late Payment ................................................................................................32 Section 14.5 Audit; Adjustments .......................................................................................32 Section 14.6 Netting; No Set-Off.......................................................................................33 Section 14.7 Rate Covenant...............................................................................................33 ARTICLE XV. [RESERVED] ....................................................................................................33 ARTICLE XVI. NOTICES.........................................................................................................33 ARTICLE XVII. DEFAULT; REMEDIES; TERMINATION...............................................34 Section 17.1 Issuer Default................................................................................................34 Section 17.2 Purchaser Default..........................................................................................34 Section 17.4 Remedies Upon Default................................................................................35 Section 17.5 Termination of Master Power Supply Agreement........................................37 Section 17.6 Limitation on Damages.................................................................................37 ARTICLE XVIII. MISCELLANEOUS.....................................................................................38 Section 18.1 Indemnification Procedure............................................................................38 Section 18.2 Deliveries ......................................................................................................38 Section 18.3 Entirety; Amendments ..................................................................................38 Section 18.4 Governing Law .............................................................................................39 Section 18.5 Non-Waiver...................................................................................................39 Section 18.6 Severability ...................................................................................................39 Section 18.7 Exhibits .........................................................................................................39

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-iv-Section 18.8 Winding Up Arrangements...........................................................................39 Section 18.9 Relationship of Parties ..................................................................................39 Section 18.10 Immunity.......................................................................................................39 Section 18.11 Rates and Indices ..........................................................................................40 Section 18.12 Limitation of Liability...................................................................................40 Section 18.13 Counterparts..................................................................................................40 Section 18.14 Third Party Beneficiaries; Rights of Trustee ................................................40 Section 18.15 No Recourse to Members of Purchaser ........................................................41 Section 18.16 Waiver of Defenses.......................................................................................41 Section 18.17 Rate Changes ................................................................................................41 Exhibit A-1 — Base Quantities; Base Delivery Point; Commodity Reference Prices Exhibit A-2 — Assigned Rights and Obligations
Exhibit B — Notices
Exhibit C — Remarketing Termination Notice
Exhibit D — Federal Tax Certificate
Exhibit E — Purchaser’s Legal Opinion
Exhibit F — Assignment of Assignable Power Contracts
Exhibit G — Communications Protocol
Exhibit H — Pricing and Other Terms
Exhibit I — Closing Certificate

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CLEAN ENERGY PURCHASE CONTRACT
This Clean Energy Purchase Contract (this “Agreement”) is made and entered into as of [_____], 2024 (the “Execution Date”), by and between California Community Choice Financing Authority, a joint powers authority and a public entity of the State of California established pursuant to the provisions of the Joint Exercise of Powers Act (Article 1, Chapter 5, Division 7, Title 1, Section 6500 et seq. of the California Government Code, as amended) (“Issuer”) and Clean Power Alliance of Southern California, a California joint powers authority (“Purchaser”).

W I T N E S S E T H:

WHEREAS, Issuer has planned and developed a project to acquire long-term supplies of Product from Aron Energy Prepay 41 LLC, a Delaware limited liability company (“Prepay LLC”) and a wholly-owned subsidiary of The Goldman Sachs Group, Inc., pursuant to a Master Power Supply Agreement, dated as of [_____], 2024 (the “Master Power Supply Agreement”), to meet a portion of the Product supply requirements of Purchaser through a discounted clean energy purchase product (the “Clean Energy Project”); WHEREAS, Purchaser desires to enter into an agreement with Issuer for the purchase of Product acquired by the Issuer under the Clean Energy Project; WHEREAS, Issuer will finance its payment for Product under, and the other costs of, the Clean Energy Project by issuing Bonds;
WHEREAS, Purchaser is a joint powers authority and a 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 for the transmission, distribution, sale, and delivery of Product to retail electric consumers within its service area;
WHEREAS, Purchaser is agreeable to purchasing a portion of its Product requirements from Issuer under the terms and conditions set forth in this Agreement and Issuer is agreeable to selling to Purchaser such supplies of Product under the terms and conditions set forth in this Agreement;
WHEREAS, concurrently herewith, Purchaser has assigned to J. Aron (as defined below) certain Assigned Rights and Obligations (as defined below), including the right to receive Assigned Product (as defined below), which Assigned Product will be resold to Prepay LLC under the Electricity Sale and Service Agreement, then resold to Issuer under the Master Power Supply Agreement and then resold to Purchaser hereunder; and

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WHEREAS, as a condition precedent to the effectiveness of the Parties’ obligations under this Agreement, Issuer shall have entered into the Master Power Supply Agreement and shall have issued the Bonds.

NOW, THEREFORE, in consideration of the premises above and the mutual covenants and agreements herein set forth, Issuer and Purchaser (the “Parties” hereto; each is a “Party”) agree as follows:

ARTICLE I.

DEFINITIONS
Section 1.1 Defined Terms. The following terms, when used in this Agreement (including the preamble or recitals to this Agreement) and identified by the capitalization of the first letter thereof, have the respective meanings set forth below, unless the context otherwise requires:
“Administrative Fee” means the amount per MWh specified as such in Exhibit H. “Affiliate” means, with respect to either Party, any entity which is a direct or indirect parent or subsidiary of such Party or which directly or indirectly (i) owns or controls such Party, (ii) is owned or controlled by such Party, or (iii) is under common ownership or control with such Party. For purposes of this definition, “control” of an entity means the power, directly or indirectly, either to (a) vote 50% or more of the securities having ordinary voting power for the election of directors or Persons performing similar functions or (b) direct or cause the direction of the management and policies, whether by contract or otherwise. “Agreement” has the meaning specified in the preamble and shall include exhibits, recitals and attachments referenced herein and attached hereto. “Alternate Delivery Point” has the meaning specified in Section 5.1(a). “Annual Refund” means the annual refund, if any, to be provided to the Purchaser and calculated pursuant to the procedures specified in Section 3.4. “APC Contract Price” means (i) the fixed prices specified in Exhibit A-2 as of the date hereof with respect to the Initial Assigned Rights and Obligations and (ii) the Day-Ahead Average Price with respect to any Assignment Period outside of the Initial Assignment Periods. “APC Party” has the meaning specified in Exhibit F.
“Applicable Project” has the meaning specified in Exhibit F. “Assignable Power Contract” has the meaning specified in Section 6.1.

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“Assigned Delivery Point” means, with respect to any Assigned Energy, the Assigned Delivery Point as set forth in the applicable Assignment Schedule for such Assigned Energy.
“Assigned Energy” means any Energy, including Energy associated with PCC1 Product and Long-Term PCC1 Product, to be delivered to J. Aron or any successor thereto pursuant to any Assigned Rights and Obligations.
“Assigned PAYGO Product” means, for any Month with respect to an Assigned PPA, the amount, if any, by which the total quantity of Assigned Product delivered under such Assigned PPA in such Month exceeds the Assigned Prepay Quantity for such Assigned PPA for such Month.
“Assigned PPA” means any power purchase agreement that is assigned pursuant to an Assignment Agreement in accordance with the terms of this Agreement. “Assigned Prepay Quantity” has the meaning specified in Exhibit F. “Assigned Prepay Value” means, for any Month and each Assignment Schedule, the Assigned Prepay Quantity for such Month multiplied by the applicable APC Contract Price. “Assigned Product” means, as applicable, PCC1 Product, Long-Term PCC1 Product, Assigned Energy, Assigned RECs and any other Product included on an Assignment Schedule, subject to the limitations for such other Product set forth in Exhibit F. “Assigned Quantity” means, with respect to each Assigned PPA and each Month during the Assignment Period therefor, the quantity of Assigned Energy delivered pursuant to such Assigned PPA consistent with the terms of the applicable Assigned Rights and Obligations in connection with the Assigned Product during such Month. “Assigned RECs” means any RECs associated with PCC1 Product or Long-Term PCC1 Product to be delivered to J. Aron or any successor thereto pursuant to any Assigned Rights and Obligations.
“Assigned Rights and Obligations” has the meaning specified in Section 6.1. “Assignment Agreement” means, for any Assigned Rights and Obligations, an agreement among Purchaser, J. Aron and the APC Party, approved by Issuer, in the form attached hereto as Annex II to Exhibit F (with such changes thereto as may be mutually agreed upon by Purchaser, J. Aron, the APC Party, and Issuer, each in its sole discretion). “Assignment Period” for any Assigned Rights and Obligations has the meaning specified in the applicable Assignment Agreement.
“Assignment Schedule” has the meaning specified in Exhibit F.

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“Automatic Non-Default Termination Event” has the meaning specified in Section

17.3. “Available Discount Percentage” has the meaning specified in the Re-Pricing Agreement. For the avoidance of doubt, the “Available Discount Percentage” under the Re-Pricing Agreement includes the Monthly Discount Percentage, as well as additional discounting expected to be made available through the Annual Refund.
“Balancing Authority” has the meaning specified in the CAISO Tariff. “Base Delivery Point” has the meaning specified in Section 5.1(a). “Base Product” means Firm (LD) Energy delivered to the Base Delivery Point. “Base Quantity” means, with respect to each Delivery Hour during the Delivery Period, the Base Unadjusted Quantity for such Delivery Hour less the Base Quantity Reduction for such Delivery Hour, each as set forth on Exhibit A-1, as Exhibit A-1 may be revised pursuant to Article VI.
“Base Quantity Reduction” means, with respect to each Delivery Hour during the Delivery Period, the “Base Quantity Reduction” of Base Product (in MWh) set forth for such Delivery Hour on Exhibit A-1, as Exhibit A-1 may be revised pursuant to Article VI. “Base Unadjusted Quantity” means, with respect to each Delivery Hour during the Delivery Period, the “Base Unadjusted Quantity” (in MWh) set forth for such Delivery Hour on Exhibit A-1.
“Bond Closing Date” means the date on which Bonds are first issued pursuant to the Trust Indenture.
“Bonds” means the bonds issued pursuant to the Trust Indenture. “Business Day” means any day other than (i) a Saturday or Sunday, (ii) a Federal Reserve Bank Holiday, (iii) any other day on which commercial banks generally in either New York, New York or the State of California are authorized or required by Law to close, or (iv) any day excluded from “Business Day” as therein defined, pursuant to the Trust Indenture. “CAISO” means California Independent System Operator or its successor. “CAISO Tariff” means CAISO’s FERC-approved tariff, as modified, amended or supplemented from time to time
“Calculation Agent” has the meaning specified in the Re-Pricing Agreement. “California Long-Term Contracting Requirements” means the long-term contracting requirement set forth in the Clean Energy and Pollution Reduction Act of 2015 (SB 350), California Public Utilities Code Section 399.13(b), and CPUC Decision 17-06-026 and

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CPUC Decision 18-05-026, as may be modified by subsequent decision of the California Public Utilities Commission or by other Law.
“CEC” means California’s State Energy Resources Conservation and Development Commission, also known as the California Energy Commission, and any successor agency thereto. “Claiming Party” has the meaning specified in Section 11.1. “Claims” means all claims or actions, threatened or filed, that directly or indirectly relate to the indemnities provided herein, and the resulting losses, damages, expenses, attorneys’ fees, experts’ fees, and court costs, whether incurred by settlement or otherwise, and whether such claims or actions are threatened or filed prior to or after the termination of this Agreement. “Clean Energy Project” has the meaning specified in the recitals. “Code” means the Internal Revenue Code of 1986, as amended. “Commercially Reasonable” or “Commercially Reasonable Efforts” means, with respect to any purchase or sale or other action required to be made, attempted or taken by a Party under this Agreement, such efforts as a reasonably prudent Person would undertake for the protection of its own interest under the conditions affecting such purchase or sale or other action, including without limitation, the amount of notice of the need to take such action, the duration and type of the purchase or sale or other action, the competitive environment in which such purchase or sale or other action occurs, and the risk to the Party required to take such action. “Commodity Reference Price” means either (i) the Day-Ahead Market Price, or (ii) the Real-Time Market Price, as applicable.
“Contract Price” means (i) with respect to the Base Product and any Delivery Hour, (A) the Day-Ahead Market Price for such Delivery Hour at the Base Delivery Point less (B) the product of the Fixed Price for Base Quantities multiplied by the Monthly Discount Percentage, (ii) with respect to Assigned Prepay Quantities during the Initial Assignment Periods, (A) the applicable APC Contract Price(s) multiplied by (B) the result of 100% less the Monthly Discount Percentage, (iii) with respect to Assigned Prepay Quantities outside of the Initial Assignment Periods, (A) the APC Contract Price less (B) the product of the Fixed Price for Assigned Prepay Quantities outside of the Initial Assignment Periods multiplied by the Monthly Discount Percentage, and (iv) with respect to Assigned PAYGO Product, the APC Contract Price(s). “Day” means each period of 24 consecutive Hours commencing at the Hour ending at 01:00 (LPT) through the Hour ending at 24:00 (LPT).
“Day-Ahead Average Price” means, for any Assigned Products after the Initial Assignment Periods, (x) the sum of the Day-Ahead Market Prices for each Pricing Interval in a Month divided by (y) the number of Pricing Intervals in such Month. As used in this definition, “Pricing Interval” means the unit of time for which CAISO establishes a separate price.

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“Day-Ahead Market Price” has the meaning specified on Exhibit A-1 for the Primary Delivery Point.
“Default Rate” means, as of any date of determination, the lesser of (a) the sum of (i) the rate of interest per annum quoted in The Wall Street Journal (Eastern Edition) under the “Money Rates” section as the “Prime Rate” for such date of determination, plus (ii) one percent per annum, or (b) if a lower maximum rate is imposed by applicable Law, such maximum lawful rate.
“Delivery Hour” has the meaning specified in Exhibit A-1. “Delivery Period” has the meaning specified in Exhibit H. “Delivery Point” means the Base Delivery Point or an Assigned Delivery Point, as applicable.
“Disqualified Sale Proceeds” has the meaning specified in Section 7.6. “Disqualified Sale Units” has the meaning specified in Section 7.6. “Electricity Sale and Service Agreement” has the meaning specified in the Master Power Supply Agreement.
“Eligible Renewable Energy Resource” has the meaning set forth in California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25741(a), as either code provision is amended or supplemented from time to time. “Energy” means three-phase, 60-cycle alternating current electric energy, expressed in megawatt hours.
“EPS” means California’s Emissions Performance Standards, as set forth in Sections 8340 and 8341 of the California Public Utilities Code, as implemented and amended from time to time, and any successor Law.
“EPS Compliant Energy” means Energy that Purchaser can contract for and purchase in compliance with EPS requirements that are applicable to Purchaser. “EPS Energy Period” means any Assignment Period or J. Aron EPS Energy Period. “Execution Date” has the meaning specified in the preamble. “Federal Tax Certificate” means the executed Federal Tax Certificate delivered by Purchaser in the form attached as Exhibit D.
“FERC” means the Federal Energy Regulatory Commission or any successor thereto.

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“Firm (LD)” means, with respect to a Party’s obligation to sell and deliver or purchase and receive, that such Party’s liability for the failure to meet such obligation shall only be excused to the extent that, and for the period during which, such performance is prevented by Force Majeure, and that in the absence of Force Majeure, the Party to which performance of such obligation is owed shall be entitled to receive from the Party which failed to deliver/receive an amount determined pursuant to Article IV.
“Fixed Price” means $[____]/MWh with respect to Base Quantities and $[____]/MWh with respect to Assigned Prepay Quantities outside of the Initial Assignment Periods, which are the fixed prices under the Buyer Swap (as defined in the Master Power Supply Agreement).
“Force Majeure” means an event or circumstance which prevents one Party from performing its obligations under this Agreement, which event or circumstance was not anticipated as of the date this Agreement was executed, which is not within the reasonable control of, or the result of the negligence of, the Claiming Party, and which, by the exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided; provided that, for the avoidance of doubt, the declaration of “Force Majeure” by an APC Party under a PPA (as defined in an Assignment Agreement) shall constitute Force Majeure hereunder. Force Majeure shall include, provided the criteria in the first sentence are met, riot, insurrection, war, labor dispute, natural disaster, vandalism, terrorism, sabotage. Force Majeure shall not be based on (i) the loss of Purchaser’s markets; (ii) Purchaser’s inability economically to use or resell the Product purchased hereunder; (iii) the delay, loss or failure of Issuer’s supply; or (iv) Issuer’s ability to sell the Product at a higher price. Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment by a Transmission Provider unless (x) such Party has contracted for firm transmission with a Transmission Provider for the Product to be delivered to or received at the applicable Delivery Point and (y) such curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the Transmission Provider’s tariff; provided, however, that existence of the foregoing factors shall not be sufficient to conclusively or presumptively prove the existence of a Force Majeure absent a showing of other facts and circumstances which in the aggregate with such factors establish that a Force Majeure as defined in the first sentence hereof has occurred. Force Majeure invoked by Prepay LLC under the Master Power Supply Agreement shall constitute Force Majeure in respect of Issuer hereunder to the extent the conditions set forth above have been satisfied with respect to Prepay LLC. Notwithstanding the foregoing or anything to the contrary herein, to the extent that an Assignment Agreement is terminated early, such termination shall constitute Force Majeure with respect to Issuer hereunder until the earlier of (I) the commencement of an “Assignment Period” under a replacement Assignment Agreement, (II) the commencement of a J. Aron EPS Energy Period or (III) the end of the first Month following the Month in which such early termination occurs. “Government Agency” means the United States of America, any state thereof, any municipality, or any local jurisdiction, or any political subdivision of any of the foregoing, including, but not limited to, courts, administrative bodies, departments, commissions, boards, bureaus, agencies, or instrumentalities.

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“Governmental Approval” means any authorization, consent, approval, license, ruling, permit, exemption, variance, order, judgment, registration, filing, giving of notice to, decree, declaration of or regulation by any Government Agency relating to the valid execution, delivery or performance of this Agreement or the consummation of any of the transactions contemplated hereby.
“Hour” means the 60-minute period commencing at 00:00 (LPT) on first Day of the Delivery Period and ending at 01:00 (LPT) on the first Day of the Delivery Period, and each 60-minute interval thereafter.
“Initial Assigned Rights and Obligations” means the Assigned Rights and Obligations set forth in Exhibit A-2 hereto as of the date hereof. “Initial Assignment Periods” means the Assignment Periods for the Initial Assigned Rights and Obligations specified in Exhibit A-2 hereto as of the date hereof. “Initial Reset Period” has the meaning specified in Exhibit H. “Interest Rate Period” has the meaning specified in the Trust Indenture. “Issuer” has the meaning specified in the preamble.
“Issuer Default” has the meaning specified in Section 17.1. “ISTs” has the meaning specified in Section 5.1(a).
“J. Aron” means J. Aron & Company LLC, a New York limited liability company, and its permitted successors and assigns under an Assignment Agreement. “J. Aron EPS Energy Period” has the meaning specified in Section 6.1(c). “J. Aron Fixed Payment” has the meaning specified in the PPA Custodial Agreement.
“J. Aron Prepay Payment” has the meaning specified in the PPA Custodial Agreement.
“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 December 19, 2008, as amended from time to time, under which Purchaser is organized as a Joint Powers Authority in accordance with the Joint Powers Act. “Law” means any statute, law, rule or regulation or any written judicial or administrative decision, ruling or interpretation with respect thereto or thereof having the effect of

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the foregoing enacted, promulgated, or issued by a Government Agency whether in effect as of the Execution Date or at any time during the term of this Agreement. “Long-Term PCC1 Product” means bundled renewable energy and RECs meeting the requirements of Portfolio Content Category 1, and the California Long-Term Contracting Requirements, to be delivered to J. Aron or any successor thereto pursuant to any Assigned Rights and Obligations.
“LPT” means the local prevailing time then in effect in the State of California. “Mandatory Purchase Date” has the meaning specified in the Trust Indenture. “Master Power Supply Agreement” has the meaning specified in the recitals. “Minimum Discount Percentage” has the meaning specified in Exhibit H. “Month” means a period beginning on the first Day of a calendar month and ending immediately prior to the commencement of the first Day of the next calendar month. “Monthly Discount Percentage” has the meaning specified in Exhibit H. “Municipal Utility” means any Person that (i) is a “governmental person” as defined in the implementing regulations under Section 141 of the Code and any successor provision, (ii) owns either or both a gas distribution utility or an electric distribution utility (or provides natural gas or electricity at wholesale to, or that is sold to entities that provide natural gas or electricity at wholesale to, governmental Persons that own such utilities), and (iii) agrees in writing to use the gas or electricity purchased by it (or cause such gas or electricity to be used) for a qualifying use as defined in U.S. Treas. Reg. § 1.148-1(e)(2)(iii). “MWh” means megawatt-hour.
“Non-Priority Products” means any Products that are not Priority Products. “Party” has the meaning specified in the preamble.
“PCC1 Product” means bundled renewable energy and RECs meeting the requirements of Portfolio Content Category 1 to be delivered to J. Aron or any successor thereto pursuant to any Assigned Rights and Obligations.
“Person” means any individual, corporation, partnership, joint venture, trust, unincorporated organization, or Government Agency.
“Portfolio Content Category 1” or “PCC1” means any Renewable Energy Credit associated with the generation of electricity from an Eligible Renewable Energy Resource consisting of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(1), as may be amended from time to time or as further defined or supplemented by Law.

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“Potential Remarketing Termination Event” has the meaning specified in Section

3.5(b).
“PPA Custodial Agreement” means that certain Consolidated, Amended and Restated PPA Custodial Agreement, dated as of the Bond Closing Date, by and among Purchaser, Issuer, J. Aron and the PPA Custodian.
“PPA Custodian” means U.S. Bank Trust Company, National Association, a national banking association.
“Prepay LLC” has the meaning stated in the recitals.
“Primary Delivery Point” has the meaning specified in Section 5.1(a). “Priority Products” means the Base Quantity and Assigned Products to be purchased by Purchaser under this Agreement, together with Products that (i) Purchaser is obligated to take under a long-term agreement, which Products either have been purchased by Purchaser or a joint action agency pursuant to a long-term prepaid power purchase agreement using the proceeds of bonds, notes, or other obligations, the interest on which is excluded from income for federal income tax purposes, or (ii) with respect to Energy, Energy that is generated using capacity that was constructed using the proceeds of bonds, notes, or other obligations, the interest on which is excluded from income for federal income tax purposes (provided that, for the avoidance of doubt, Priority Products shall not include Energy that is generated using capacity that was wholly or partially financed through the monetization of renewable tax credits, whether such monetization is accomplished through a tax equity investment or otherwise, or that is generated from federally owned and operated hydroelectric facilities, including through the United States Army Corps of Engineers and the United States Bureau of Reclamation, and marketed by the Bonneville Power Administration or the Western Area Power Administration). “Product” means Energy and, to the extent included on an Assignment Schedule, associated RECs or other products related to the foregoing; provided that the inclusion of any Product on an Assignment Schedule is subject to the limitation set forth in Exhibit F. “Purchaser” has the meaning specified in the preamble.
“Purchaser Default” has the meaning specified in Section 17.2. “Qualifying Use Requirements” means, with respect to any Product delivered under this Agreement, such Product is used (i) for a “qualifying use” as defined in U.S. Treas.

Reg. § 1.148-1(e)(2)(iii), (ii) in a manner that will not result in any “private business use” within the meaning of Section 141 of the Code, and (iii) in a manner that is consistent with the Federal Tax Certificate attached as Exhibit D.
“Re-Pricing Agreement” means the Re-Pricing Agreement, dated as of the Bond Closing Date (as defined in the Master Power Supply Agreement), by and between Prepay LLC and Issuer.

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“Real-Time Market Price” has the meaning specified on Exhibit A-1 for each Delivery Point.
“Remarketing Termination Deadline” means, for any Reset Period, the last date and time by which Purchaser may provide a Remarketing Election Notice, which shall be 4:00 p.m.

LPT on the 10th day of the Month (or, if such day is not a Business Day, the next succeeding Business Day) prior to the first delivery Month of a Reset Period. “Remarketing Termination Notice” has the meaning specified in Section 3.5(b). “Renewable Energy Credit” or “REC” has the meaning specified for “Renewable Energy Credit” in California Public Utilities Code Section 399.12(h), as may be amended from time to time or as further defined or supplemented by Law. “Replacement Assigned Rights and Obligations” means any Assigned Rights and Obligations other than the Initial Assigned Rights and Obligations. “Replacement Price” means, with respect to any Shortfall Quantity of Base Quantities, the price at which Purchaser, acting in a Commercially Reasonable manner, purchases at the applicable Delivery Point Replacement Product for such Shortfall Quantity, plus (i) costs reasonably incurred by Purchaser in purchasing Replacement Product, and (ii) additional transmission charges, if any, reasonably incurred by Purchaser to the applicable Delivery Point, or at Purchaser’s option, the market price at the Delivery Point for such Product not delivered as determined by Purchaser in a Commercially Reasonable manner. The Replacement Price for any Shortfall Quantity shall not include any administrative or other internal costs incurred by Purchaser and shall be limited to a price that is Commercially Reasonable with respect to the timing and manner of purchase. In no event shall the Replacement Price include any penalties, ratcheted demand or similar charges, nor shall Purchaser be required to utilize or change its utilization of its owned or controlled assets or market positions to minimize Issuer’s liability. “Replacement Product” means any Energy purchased by Purchaser to replace any Shortfall Quantity at the Delivery Point where such Shortfall Quantity occurred; provided that such Energy is purchased for delivery in the Delivery Hour to which such Shortfall Quantity relates.
“Reset Period” means each “Reset Period” under the Re-Pricing Agreement. “Reset Period Notice” has the meaning specified in Section 3.5(a). “RPS Law” means the California Renewable Energy Resources Act, including the California Renewables Portfolio Standard Program, Article 16 of Chapter 2.3, Division 1 of the California Public Utilities Code, as implemented and amended from time to time, and any successor Law.
“Schedule”, “Scheduled” or “Scheduling” means the actions of Issuer, Purchaser and/or their designated representatives, including each Party’s Transmission Providers, if

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applicable, of notifying, requesting and confirming to each other the quantity and type of Product to be delivered during any given portion of the Delivery Period at a specified Delivery Point. “Shortfall Quantity” has the meaning specified in Section 4.1(a). “Transmission Provider” means any entity or entities transmitting or transporting the Product on behalf of Issuer or Purchaser to or from the Delivery Point. “Trustee” means U.S. Bank Trust Company, National Association, a national banking association, and its successors as trustee under the Trust Indenture. “Trust Indenture” means (i) the Trust Indenture to be entered into prior to the commencement of the Delivery Period between Issuer and the Trustee, and (ii) any trust indenture entered into in connection with the commencement of any Interest Rate Period after the initial Interest Rate Period between Issuer and the Trustee containing substantially the same terms as the indenture described in clause (i) and which is intended to replace the indenture described in clause (i) as of the commencement of such Interest Rate Period. “Utility Revenues” means all income, rents, rates, fees, charges and other moneys derived from the ownership or operation of Purchaser’s electric system, including, without limiting the generality of the foregoing, (1) all income, rents, rates, fees, charges, or other moneys derived by the Purchaser from the sale, furnishing and supplying of the electric capacity or energy or other services, facilities, and commodities sold, furnished or supplied through the facilities of or in the conduct or operation of the business of the Purchaser’s electric system, (2) the earnings on and income derived from the investment of such income, rents, rates, fees, charges, or other moneys to the extent that the use of such earnings and income is limited to Purchaser’s electric system by or pursuant to law, (3) deferred revenues and moneys maintained in the Purchaser’s operating reserve fund and (4) such other income, charges, revenue or moneys maintained in reserves as the Purchaser may specify in a written order of the Purchaser filed with the Issuer, but excluding (A) in all cases customers’ deposits or any other deposits or advances subject to refund until such deposits or advances have become the property of the Purchaser; and (B) such other income, charges, revenue or moneys as the Purchaser may specify in a written order of the Purchaser filed with the Issuer, provided that such written order of the Purchaser confirms that, following the filing of such written order of the Purchaser, (i) the requirements of Section 14.7 shall be satisfied; and (ii) the income, charges, revenue or moneys specified in such written order of the Purchaser shall be accounted for separately from the “Utility Revenues” as defined herein “Voided Remarketing Termination Notice” has the meaning specified in Section

3.5(b).
“Western EIM” has the meaning ascribed to “Energy Imbalance Market (EIM)” under the CAISO Tariff.
“WREGIS” means the Western Renewable Energy Generation Information System or its successor.

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Section 1.2 Definitions; Interpretation. References to “Articles,” “Sections,” “Schedules” and “Exhibits” shall be to Articles, Sections, Schedules and Exhibits, as the case may be, of this Agreement unless otherwise specifically provided. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. The use herein of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest scope of such general statement, term or matter.

Except where expressly provided otherwise, any reference herein to any agreement or document includes all amendments, supplements or restatements to and of such agreement or document as may occur from time to time in accordance with its terms and the terms hereof, and any reference to a party to any such agreement includes all successors and assigns of such party thereunder permitted by the terms hereof and thereof.

ARTICLE II.

DELIVERY PERIOD; NATURE OF CLEAN ENERGY PROJECT; CONDITION

PRECEDENT
Section 2.1 Delivery Period. Subject to Section 2.3, delivery of Product by Issuer to Purchaser shall commence at the beginning of the Delivery Period and shall continue throughout the Delivery Period.

Section 2.2 Nature of Clean Energy Project. Purchaser acknowledges and agrees that Issuer will meet its obligations to provide Product to Purchaser under this Agreement exclusively through its purchase of Product from Prepay LLC pursuant to the Master Power Supply Agreement and that Issuer is financing its purchase of such supplies through the issuance of the Bonds.

Section 2.3 Condition Precedent. Notwithstanding anything to the contrary herein, commencement of deliveries and the rights and obligations of Issuer and Purchaser hereunder are subject to the condition precedent that Issuer shall have entered into the Master Power Supply Agreement and shall have issued the Bonds.

Section 2.4 Pledge of this Agreement. Purchaser acknowledges and agrees that Issuer will pledge its right, title and interest under this Agreement and the revenues to be received under this Agreement to secure Issuer’s obligations under the Trust Indenture.

ARTICLE III.

SALE AND PURCHASE; PRICING

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Section 3.1 Sale and Purchase of Product. Issuer shall sell and deliver or cause to be delivered to Purchaser, and Purchaser shall purchase and receive from Issuer, the applicable Product in the quantities and at the times and subject to the terms and conditions set forth in this Agreement. The quantities of Product to be sold and purchased and delivered and received pursuant to the terms and conditions set forth in this Agreement shall be equal to (a) the Base Quantity, if any, for each Delivery Hour and (b) the Assigned Quantity delivered to J. Aron in each Month of the Delivery Period pursuant to the Assignment Agreements.

Section 3.2 Payments.
(a) For each Month for which an EPS Energy Period is in effect at the start of such Month:
(i) Purchaser shall pay Issuer the Contract Price multiplied by the Assigned Prepay Quantities actually delivered for such Month, provided that Issuer shall owe a payment to Purchaser to the extent that the Contract Price for Assigned Prepay Quantities is negative; and
(ii) Pursuant to the terms of the PPA Custodial Agreement, Purchaser shall owe a separate CPA Gross Payment for each Assigned PPA consistent with the terms of the PPA Custodial Agreement, and, upon satisfying its obligations under the PPA Custodial Agreement in respect of such amount (after taking into consideration any PPA Seller Payment Obligation (as such term is defined in the PPA Custodial Agreement) credited to CPA in respect thereof), any portion of such amount attributable to Assigned PAYGO Product shall be deemed to be paid by Purchaser to the applicable APC Party on behalf of J. Aron and shall satisfy the obligations of the respective parties under each of the Electricity Sale and Service Agreement, the Master Power Supply Agreement, this Agreement and the applicable Assignment Agreement for such Assigned PAYGO Product.
(b) To the extent that Base Quantities are delivered hereunder in any Month, Purchaser shall pay Issuer the Contract Price multiplied by the Base Quantities actually delivered. (c) The Contract Price for Assigned Energy is inclusive of any amounts due in respect of other Assigned Products.

Section 3.3 Limited Obligation to Take Base Quantities. Notwithstanding anything to the contrary in this Agreement, Purchaser shall not be required to purchase and receive any Base Quantities hereunder, and Issuer, with respect to any Base Quantities that otherwise would be delivered hereunder, shall cause Prepay LLC to remarket such Base Quantities pursuant to the provisions of Exhibit C to the Master Power Supply Agreement.

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Section 3.4 Annual Refund. In addition to any Monthly Discount Percentage applied to Energy Scheduled hereunder, Issuer shall credit such Annual Refund to Purchaser as may be available for distribution by Issuer pursuant to Section 5.12 of the Trust Indenture, subject to the provisions of this Section 3.4. Such Annual Refund, if any, shall be credited to the next amount due from Purchaser following the release of funds for such purpose to Issuer under the terms of the Trust Indenture. In determining the amount of such Annual Refund, if any, to be credited to Purchaser, Issuer may reserve such funds (i) as may be required under the terms of the Trust Indenture or (ii) with the prior written consent of Purchaser (a) to fund or maintain the Minimum Discount Percentage for any future Reset Period, (b) to fund or maintain any rate stabilization or working capital reserve, (c) to reserve or account for unfunded liabilities and expenses or (d) for other costs of the Clean Energy Project.

Section 3.5 Reset Period Remarketing.
(a) Reset Period Notice. For each Reset Period, Issuer shall provide to Purchaser, at least ten (10) days prior to the Remarketing Termination Deadline, written notice (a “Reset Period Notice”) setting forth (i) the duration of such Reset Period, (ii) the estimated Available Discount Percentage for such Reset Period, and (iii) the applicable Remarketing Termination Deadline. Issuer may thereafter update such notice at any time prior to the Remarketing Termination Deadline, provided that Issuer may extend the Remarketing Termination Deadline only to the extent consented to in writing by J. Aron. (b) Remarketing Termination. If the Reset Period Notice (or any update thereto) for any Reset Period indicates that the estimated Available Discount Percentage specified in such notice is not at least equal to the Minimum Discount Percentage for such Reset Period, then: (i) a “Potential Remarketing Termination Event” shall be deemed to exist, and (ii) Purchaser may, not later than the Remarketing Termination Deadline, issue a written notice in the form attached hereto as Exhibit C (a “Remarketing Termination Notice”) to Issuer, Prepay LLC and the Trustee electing for this Agreement and the Assignment Agreements to be terminated; provided, however, if Issuer and Prepay LLC are able to achieve an actual Available Discount Percentage, as finally determined under the Re-Pricing Agreement, that is equal to or greater than the Minimum Discount Percentage, then Purchaser’s Remarketing Termination Notice shall be void (any such notice, a “Voided Remarketing Termination Notice”) and this Agreement shall remain in full force and effect for such Reset Period. If Purchaser issues a valid Remarketing Termination Notice (other than a Voided Remarketing Termination Notice) in accordance with this Section 3.5(b), the Delivery Period hereunder shall terminate as of the end of the then-current Reset Period (i.e., as of the end of the Reset Period preceding the Reset Period for which Purchaser issues a valid Remarketing Termination Notice other than a Voided Remarketing Termination Notice). (c) Final Determination of Available Discount Percentage. The Parties acknowledge and agree that the final Available Discount Percentage for any Reset Period following the Initial Reset Period will be determined on the Re-Pricing Date (as defined in the Re-Pricing Agreement) for such Reset Period, and that such Available Discount Percentage may differ from the estimate or estimates of such Available Discount Percentage last provided to Purchaser prior to the Remarketing Termination Deadline for such Reset Period; provided that the Available Discount Percentage for any Reset Period will not be less than the lower of (i) the last estimated

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Available Discount Percentage set forth in the Reset Period Notice for such Reset Period (or any update thereof) sent to Purchaser by Issuer and (ii) the Minimum Discount Percentage for Reset Period.

ARTICLE IV.

FAILURE TO SCHEDULE PRODUCT
Section 4.1 Issuer’s Failure to Schedule Base Quantity (Not Due to Force Majeure). (a) Shortfall Quantity. If, for any Delivery Hour during the Delivery Period, Issuer breaches its obligation to Schedule or deliver all or any portion of the Base Quantity, after giving effect to reductions for Assigned Energy at any Delivery Point pursuant to the terms of this Agreement, then the portion of the Base Quantity that Issuer failed to Schedule or deliver shall be a “Shortfall Quantity”.
(b) Issuer Cover Damage Payments. To the extent Purchaser actually purchases Replacement Product with respect to any Shortfall Quantity, then Issuer shall pay to Purchaser the result determined by the following formula:

P = Q x (RP - CP + AF)
Where:

P = The amount payable by Issuer under this Section 4.1(b); Q = The quantity of Replacement Product purchased;
RP = The Replacement Price;
CP = The Contract Price that would have applied to such Product; and AF = The Administrative Fee.
(c) Purchaser Obligation to Mitigate. Purchaser shall exercise Commercially Reasonable Efforts to mitigate Issuer’s damages paid by Issuer hereunder.

Section 4.2 Purchaser’s Failure to Schedule or Take Base Quantities (Not Due to Force Majeure). If, for any Delivery Hour during the Delivery Period, Purchaser breaches its obligation to Schedule or take all or any portion of the Base Quantity at any Delivery Point pursuant to the terms of this Agreement, then Purchaser shall remain obligated to pay Issuer the Contract Price for such Base Quantity. Issuer shall credit to Purchaser’s account any net revenues Issuer may receive from Prepay LLC under the Master Power Supply Agreement in connection with the ultimate sale of any such Product by Prepay LLC to Municipal Utilities or, if necessary, other purchasers, up to the Contract Price.

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Section 4.3 Failure to Deliver or Take Due to Force Majeure. If with respect to all or any portion of Base Quantities or Assigned Prepay Quantities:
(a) Purchaser fails to take or fails to deliver all or any portion of the such quantities at any Delivery Point pursuant to the terms of this Agreement; and (b) such failure is due to Force Majeure claimed by either Party, then the Parties shall have no payment obligations with respect to such quantities hereunder.

Section 4.4 Assigned Product. Notwithstanding anything herein to the contrary, neither Purchaser nor Issuer shall have any liability or other obligation to one another for any failure to Schedule, take, or deliver Assigned Product.

Section 4.5 Sole Remedies. Except with respect to the termination of this Agreement pursuant to Article XVII, the remedies set forth in this Article IV shall be each Party’s sole and exclusive remedies for any failure by the other Party to Schedule, deliver or take Product, as applicable, pursuant to this Agreement.

ARTICLE V.

DELIVERY POINTS; SCHEDULING
Section 5.1 Delivery Points.
(a) Base Delivery Points. All Base Product delivered under this Agreement shall be Scheduled for delivery and receipt at (i) the Delivery Point set forth in Exhibit A-1 (the “Primary Delivery Point”) or (ii) any other point (an “Alternate Delivery Point”) that has been mutually agreed by Issuer, Purchaser and Prepay LLC (the Primary Delivery Point or, to the extent specified, any Alternate Delivery Point being the “Base Delivery Point”). Delivery of Energy to Purchaser at the Primary Delivery Point shall be facilitated through submission of Inter-SC Trades, as defined in the CAISO Tariff (“ISTs”). Purchaser shall designate a scheduling coordinator in the CAISO market for this purpose as specified in Exhibit G. (b) Alternate Base Market Prices. The Day-Ahead Market Price and Real-Time Market Price for each Alternate Delivery Point, as applicable, shall be the price mutually agreed and identified by the Parties, or if no such price is identified for such Alternate Delivery Point, the Day-Ahead Market Price and Real-Time Market Price, as applicable, specified on Exhibit A-1 for the Primary Delivery Point from which quantities are being shifted to such Alternate Delivery Point.
(c) Assigned Energy Delivery Points. Assigned Energy delivered under this Agreement shall be Scheduled for delivery and receipt at the applicable Assigned Delivery Point specified in the applicable Assignment Schedule. All other Assigned Product shall be delivered consistent with the terms of the applicable Assignment Agreement

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Section 5.2 Transmission and Scheduling. Issuer shall Schedule or arrange for Scheduling services with CAISO in accordance with the CAISO Tariff, to deliver the Base Product to the Base Delivery Point. Purchaser shall Schedule or arrange for Scheduling services with CAISO in accordance with CAISO Tariff, to receive the Base Product at the Base Delivery Point.

If Prepay LLC Schedules or arranges for Scheduling services, to deliver Base Product to the Base Delivery Point, then Issuer’s obligations under this Section shall be relieved pro tanto. Scheduling of Assigned Energy shall be in accordance with the applicable Assignment Schedule.

Section 5.3 Title and Risk of Loss. Title to and risk of loss of the Product delivered under this Agreement shall pass from Issuer to Purchaser at the applicable Delivery Point. The transfer of title and risk of loss for all Assigned Product shall be in accordance with the applicable Assignment Agreement; provided that all Assignment Agreements shall provide for the transfer of Renewable Energy Credits in accordance with WREGIS. Subject to Section 18.1, each Party shall indemnify, defend and hold harmless the other Party from and against any Claims made by a third party arising from or out of any event, circumstance, act or incident related to the Product delivered hereunder first occurring or existing during the period when control and title to Base Product or Assigned Product is vested in the indemnifying Party as provided in this Section; provided that, notwithstanding the foregoing, (a) Issuer shall have no obligations to indemnify, defend or hold harmless Purchaser for any such Claims relating to replacement costs, cover damages or similar liabilities that are payable to any Person because of Purchaser’s failure to deliver any Product to such Person and (b) no obligation to indemnify, defend or hold harmless shall supplant or control the provisions of this Agreement relating to Force Majeure. Notwithstanding anything to the contrary herein, no Party shall have any obligations to indemnify, defend or hold harmless the other Party in respect of any Claims relating to any Assigned Product.

Section 5.4 PCC1 Product and Long-Term PCC1 Product. Notwithstanding any other provision of this Agreement to the contrary, to the extent that any Assigned Product is PCC1 Product or Long-Term PCC1 Product, the following provisions apply:
(a) Eligibility. Seller, and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement that: (i) the Project qualifies and is certified by the CEC as an Eligible Renewable Energy Resource (“ERR”) as such term is defined in Public Utilities Code Section 399.12 or Section 399.16; and (ii) the Project’s output delivered to Buyer qualifies under the requirements of the California Renewables Portfolio Standard. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC 6, Non-Modifiable. (Source: D.07-11-025, Attachment A.) D.08-04-009].
(b) Transfer of Renewable Energy Credits. Seller and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement the Renewable Energy Credits transferred to Buyer conform to the definition and attributes required for compliance with the California Renewables Portfolio Standard, as set forth in California Public Utilities Commission Decision

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08-08-028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC REC-1, Non-modifiable. D.11-01-025].
(c) Tracking of RECs in WREGIS. Seller warrants that all necessary steps to allow the Renewable Energy Credits transferred to Buyer to be tracked in the Western Renewable Energy Generation Information System will be taken prior to the first delivery under the contract. [STC REC-2, Non-modifiable. D.11-01- 025]. With respect to Sections 5.4(a) through (c), “Seller” means “Issuer”, Buyer means “Purchaser”, and any other capitalized terms not otherwise defined therein shall have the meaning specified in the Assigned PPA.
(d) 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, Non-Modifiable. (Source: D.07-11- 025, Attachment A) D.08-04-009]
(e) Issuer Representations and Warranties.

Issuer represents and warrants:
(i) Issuer has the right to sell the Assigned Product from the Applicable Project;
(ii) Issuer has not sold the Assigned Product or any REC or other attributes of the Assigned Product to be transferred to Purchaser to any other person or entity;
(iii) The Energy component of the Assigned Product produced by the Applicable Project and purchased by Issuer for resale to Purchaser hereunder is not being sold by Issuer back to the Applicable Project or APC Party;
(iv) Assigned Product to be purchased and sold pursuant to this Agreement has not been committed to another party;
(v) The Assigned Product is free and clear of all liens or other encumbrances;
(vi) Issuer will deliver to Purchaser all Assigned Energy and associated RECs generated by the Applicable Project for Long-Term PCC1 Product in compliance with the California Long-Term Contracting Requirements, if applicable;

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(vii) The Assigned Product supplied to Purchaser under this Agreement that is Long-Term PCC1 Product will be sourced solely from Applicable Projects that have an Assignment Period of ten years or more in length, or otherwise in compliance with the California Long Term Contracting Requirements; and
(viii) Issuer will cooperate and work with Purchaser, the CEC, and/or the CPUC to provide any documentation required by the CPUC or CEC to support the Product’s classification as a Portfolio Content Category 1 Product as set forth in California Public Utilities Code Section 399.16(b)(1) or, if applicable, or compliance with the California Long-Term Contracting Requirements.

Issuer further represents and warrants to Purchaser that, to the extent that the Product sold by Issuer is a resale of part or all of a contract between Issuer and one or more third parties, Issuer represents, warrants and covenants that the resale complies with the following conditions in (i) through (iv) below during the Assignment Period and throughout the generation period:
(i) The original upstream third-party contract(s) meets the criteria of California Public Utilities Code Section 399.16(b)(1);
(ii) This Agreement transfers only electricity and RECs that have not yet been generated prior to the Assignment Period;
(iii) The electricity transferred by this Agreement is transferred to Purchaser in real time; and
(iv) If the Applicable Project has an agreement to dynamically transfer electricity to a California balancing authority, the transactions implemented under this Agreement are not contrary to any condition imposed by a balancing authority participating in the dynamic transfer arrangement.
(f) Subsequent Changes in Law. In the event that the qualifications or requirements of the RPS program, PCC1 Product or the California Long-Term Contracting Requirements change, Issuer shall take commercially reasonable actions to meet the amended qualifications or requirements of the RPS Law, PCC1 Product or the California Long-Term Contracting Requirements but will not be required to incur any unreimbursed costs to comply with the RPS Law, PCC1 or the California Long- Term Contracting Requirements, collectively. (g) Limitations. Notwithstanding anything to the contrary in this Agreement, the Parties acknowledge and agree as follows:
(i) Issuer has relied exclusively upon the representations and warranties of each respective APC Party set forth in the Assigned PPAs in

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making the representations and warranties set forth in this Section 5.4 and has not performed any independent investigation with respect thereto; (ii) J. Aron has agreed pursuant to the Electricity Sale and Service Agreement to terminate the applicable Assignment Period in the event that any representation or warranty in this Section 5.4 proves to be incorrect in any respect; and
(iii) Purchaser agrees that its sole recourse for any breach of the provisions of this Section 5.4 shall be the termination of the applicable Assignment Period and Purchaser shall have no other recourse against Issuer or remedies under this Agreement.

Section 5.5 Communications Protocol. With respect to the Scheduling and delivery of Base Quantities, Issuer and Purchaser shall comply with the communications protocol set forth in Exhibit G. Scheduling and transmission of Assigned Energy shall be in accordance with the applicable Assignment Agreement pursuant to which the Project Participant shall act as scheduling agent for each of J. Aron, Prepay LLC and Issuer.

Section 5.6 Deliveries within CAISO or another Balancing Authority. The Parties acknowledge that Energy delivered by Issuer at a Delivery Point within CAISO or another Balancing Authority (including a Balancing Authority operating within the Western EIM) will be delivered in accordance with the CAISO Tariff and rules of the Balancing Authority as applicable.

Scheduling such Energy in accordance with the requirements of the applicable Product into the applicable Balancing Authority shall constitute delivery of such Product to Purchaser hereunder, provided that any associated Renewable Energy Credits and other Assigned Product are also delivered to Purchaser.

Section 5.7 Assigned Products. Notwithstanding anything to the contrary herein, except as provided in Section 6.3, Issuer shall have no liability under this Article V with respect to any Assigned Products.

ARTICLE VI.

ASSIGNMENT OF POWER PURCHASE AGREEMENTS
Section 6.1 Assignments Generally.
(a) Initial Assigned Rights and Obligations. Prior to the commencement of the Delivery Period, Purchaser agrees to exercise Commercially Reasonable Efforts to assign the Initial Assigned Rights and Obligations to J. Aron. (b) Assignments of Replacement Assigned Rights and Obligations.

Commencing (i) one year prior to the expiration of any EPS Energy Period or (ii) otherwise immediately upon the early termination or anticipated early termination of a EPS Energy Period or a failure to assign any portion of the Initial Assigned

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Rights and Obligations, Purchaser shall exercise Commercially Reasonable Efforts and cooperate with J. Aron in good faith to assign a portion of Purchaser’s rights and obligations (the “Assigned Rights and Obligations”) under one or more power purchase agreements (each such agreement, an “Assignable Power Contract”) pursuant to which Purchaser is purchasing EPS Compliant Energy, RECs and other products that may be assigned pursuant to Exhibit F. The Parties recognize that, in the case of such an assignment, J. Aron will be obligated to sell and deliver Assigned Product it receives under all Assigned Rights and Obligations to Prepay LLC under the terms of the Electricity Sale and Service Agreement, and Prepay LLC will be obligated to deliver such Product to Issuer under the terms of the Master Power Supply Agreement. To be effective hereunder, any assignment of Replacement Assigned Rights and Obligations must be proposed, agreed and consented to in accordance with Exhibit F and the Master Power Supply Agreement.
(c) J. Aron Procurement of EPS Compliant Energy. Under certain circumstances specified in Section 6.1(c) of the Electricity Sale and Service Agreement, J. Aron is obligated to exercise Commercially Reasonable Efforts to obtain EPS Compliant Energy for ultimate redelivery to Purchaser hereunder, and, in such case, Purchaser shall cooperate in good faith with J. Aron in connection therewith, provided that:
(i) J. Aron’s procurement of any such EPS Compliant Energy for ultimate redelivery hereunder shall be subject to Purchaser’s prior written consent, with such consent not to be unreasonably withheld, provided, for the avoidance of doubt, that it shall be reasonable for Purchaser to withhold its consent based on the requirements of the EPS or other regulatory requirements;
(ii) Issuer and Purchaser shall act in good faith and in a Commercially Reasonable manner to negotiate appropriate amendments to this Agreement to facilitate the delivery of such EPS Compliant Energy, including with respect to the Delivery Point, consequences of failing to deliver or receive and scheduling matters;
(iii) the period of delivery for any such EPS Compliant Energy (any such period, a “J. Aron EPS Energy Period”) shall not exceed the length, as applicable, of (A) the then-current Reset Period if such EPS Compliant Energy is obtained for delivery for the remainder of a Reset Period and (B) the length of the next succeeding Reset Period if such EPS Compliant Energy is obtained for delivery commencing in such succeeding Reset Period; and
(iv) during a J. Aron EPS Energy Period, if requested by J. Aron, Purchaser shall continue to exercise Commercially Reasonable Efforts and

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cooperate with J. Aron in good faith to assign Assigned Rights and Obligations to J. Aron under an Assignable Power Contract. (d) Amendments. Purchaser and Issuer agree to seek the written consent of J. Aron prior to any amendment to this Article VI or Exhibit F hereto.

Section 6.2 Failure to Obtain EPS Compliant Energy. To the extent an EPS Energy Period terminates or expires and Purchaser and J. Aron have been unable to obtain EPS Compliant Energy for delivery hereunder pursuant to the provisions of Section 6.1, then, until EPS Compliant Energy is obtained for delivery hereunder, Prepay LLC shall remarket Purchaser’s Base Quantities pursuant to the provisions of Exhibit C to the Master Power Supply Agreement, subject to the following:
(a) Purchaser’s and J. Aron’s obligations set forth in Section 6.1 shall continue to apply; and
(b) Purchaser shall not make any new commitment to purchase Priority Products during such a remarketing.

Section 6.3 Adjustments to Base Quantities. The Base Quantity Reductions set forth on Exhibit A-1 hereto have been calculated as described in Exhibit F hereto. Effective upon the first day of the second1 Month following the early termination of an EPS Energy Period for any reason, Issuer shall revise Exhibits A-1 and A-2 to (a) update the Base Quantity Reductions as provided in Exhibit F to the extent a subsequent EPS Energy Period will commence on such date or (b) reverse such Base Quantity Reductions associated with the EPS Energy Period that terminated for all remaining Hours in the Delivery Period to the extent a replacement EPS Energy Period will not commence on such date. In the case of any other commencement of a subsequent EPS Energy Period, Issuer shall revise (i) the Base Quantity Reductions in Exhibit A-1 as provided by Exhibit F hereto and (ii) Exhibit A-2 to reflect the details for such EPS Energy Period.

Section 6.4 J. Aron Non-Payment to APC Party. To the extent that (a) J. Aron fails to pay when due any J. Aron Prepay Payment and (b) Purchaser makes a payment for such amounts to the applicable APC Party, Purchaser shall provide notice thereof to Issuer upon Purchaser’s payment to the applicable APC Party and Issuer shall make a payment to Purchaser in the amount of such non-payment.
1 NTD: Updated to refer to the second month given that Force Majeure will be deemed to occur until the end of the first month following the early termination of an Assignment Agreement.

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ARTICLE VII.

USE OF PRODUCT
Section 7.1 Tax Exempt Status of the Bonds. Purchaser acknowledges that the Bonds will be issued with the intention that the interest thereon will be exempt from federal taxes under Section 103 of the Code. Accordingly, Purchaser agrees that it will (a) provide such information with respect to its community choice aggregation program as may be requested by Issuer in order to establish the tax-exempt status of the Bonds, and (b) act in accordance with such written instructions as Issuer may provide from time to time in order to maintain the tax-exempt status of the Bonds. Purchaser further agrees that it will not at any time take any action, or fail to take any action, that, if taken or omitted, respectively, would adversely affect the tax-exempt status of the Bonds.

Section 7.2 Priority Products. Purchaser agrees to purchase and receive the Products to be delivered under this Agreement (a) in priority over and in preference to all other Products available to Purchaser that are not Priority Products; and (b) on at least a pari passu and non-discriminatory basis with other Priority Products.

Section 7.3 Assistance with Sales to Third Parties. If (a) (i) a quantity of Assigned Product less than the Assigned Prepay Quantity is delivered hereunder in any Month during an Assignment Period for any reason other than Force Majeure or (ii) an Assigned PPA FM Remarketing Event has occurred and is in effect (as defined in Exhibit F to the Master Power Supply Agreement), (b) Issuer is required under Section 3.3 to cause Base Quantities that otherwise would be delivered hereunder to be remarketed or (c) notwithstanding Purchaser’s compliance with Section 7.1, Purchaser does not require all or any portion of the Assigned Prepay Quantity to meet its requirements for Energy that it is obligated to purchase under this Agreement as a result of (i) insufficient demand by Purchaser’s retail customers or (ii) a change in Law, Purchaser may, with reasonable notice issued in the form of a remarketing notice in accordance with Exhibit G, request (and, in the case of clauses (a) and (b), shall be deemed to request) that Prepay LLC, as permitted by the Master Power Supply Agreement, sell such portion of such Base Quantities or Assigned Product (I) to another Municipal Utility, or (II) if necessary, to another purchaser. Any remarketing notice issued under clause (c)(ii) above shall constitute a Structural Remarketing Notice (as defined in the Master Power Supply Agreement) and shall be subject to the requirements set forth in the Master Power Supply Agreement. If Prepay LLC makes such a sale under Exhibit C to the Master Power Supply Agreement, Issuer shall credit against the amount owed by Purchaser to Issuer hereunder the amount received by Issuer from Prepay LLC for such sales less all reasonable costs and expenses directly incurred by Issuer, including but not limited to remarketing administrative charges paid by it to Prepay LLC under the Master Power Supply Agreement, but in no event shall the amount of such credit be more than the Contract Price for the Energy so sold.

Section 7.4 Qualifying Use. Without limiting Purchaser’s other obligations under this Article VII, Purchaser agrees that, subject to Section 7.5, it will use all of the Product purchased under this Agreement in compliance with the Qualifying Use Requirements. Purchaser agrees that

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it will provide such additional information, records and certificates as Issuer may reasonably request to confirm Purchaser’s compliance with this Section 7.4.

Section 7.5 Remediation.
(a) The Parties acknowledge that Purchaser may at times inadvertently remarket Products received hereunder in a manner that does not comply with Qualifying Use Requirements due to daily and hourly fluctuations in Purchaser’s Product needs. To the extent Purchaser does so, Purchaser shall (a) exercise Commercially Reasonable Efforts to use any Disqualified Sale Proceeds of such remarketing to purchase Products (other than Priority Products) that Purchaser then uses in compliance with the Qualifying Use Requirements and (b) reserve funds in an amount equal to any Disqualified Sale Proceeds until such Disqualified Sale Proceeds are remediated or transferred to the Trustee pursuant to Section 7.6(b) below.
(b) To the extent that all or any portion of Assigned Quantities or Base Quantities are remarketed under Section 3.3 or under Section 7.3, as applicable, and any such remarketing results in a Ledger Entry (as defined in the Master Power Supply Agreement), Purchaser agrees that it shall (i) exercise Commercially Reasonable Efforts to use an amount equivalent to the remarketing proceeds associated with such any such Ledger Entry to purchase Non-Priority Products and use such Non-Priority Products in compliance with the Qualifying Use Requirements in order to remediate such Ledger Entries; and (ii) apply its purchases of Non-Priority Products to remediate any such proceeds under the Master Power Supply Agreement prior to remediating such proceeds under any other contract that provides for the purchase of Priority Products. To track compliance with Purchaser’s obligations under this Section 7.5(b), Purchaser shall deliver a remediation certificate to Issuer and Prepay LLC by the tenth day of the Month subsequent to any relevant Non-Priority Products purchases (which may include purchases of Energy from CAISO to the extent such Energy is used in compliance with the Qualifying Use Requirements); provided that the Parties acknowledge and agree that any purchases of Assigned PAYGO Products (commencing with purchases of Assigned PAYGO Products in the Month in which any such Ledger Entry occurs) shall be applied to remediate any such Ledger Entries and no remediation certificate shall be required with respect to purchases of Assigned PAYGO Products. For Ledger Entries remediated under this Section 7.5(b) that have not otherwise been remediated by Prepay LLC pursuant to the remarketing provisions of the Master Power Supply Agreement, Issuer shall pay Purchaser any portion of the Monthly Discount Percentage associated with such Ledger Entries that is available under the Trust Indenture on or before the last Business Day of the Month in which Purchaser provides a certificate under this Section 7.5(b) evidencing such remediation.

Section 7.6 Remediation; Ledger Entries; Redemption.

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(a) Remediation. To track compliance with the requirements of Section 7.5(a), Purchaser will provide a quarterly report to Issuer (delivered not later than the 15th day of each April, July, October and January until the end of the Delivery Period) showing the following: the total quantity of proceeds from sales of Products received hereunder that (i) were sold by Purchaser to any Person in a transaction that does not comply with the Qualifying Use Requirements and (ii) have not been remediated by Purchaser by applying such proceeds to purchase Products that are used in compliance with the Qualifying Use Requirements (the quantities of Product producing such proceeds, “Disqualified Sale Units” and such proceeds received, “Disqualified Sale Proceeds”).
(b) Ledger Entries. Issuer shall report such unremediated Disqualified Sale Proceeds and the associated Disqualified Sale Units to Prepay LLC for addition to the remarketing ledgers maintained by Prepay LLC under the Master Power Supply Agreement, with the ledger entries to be dated as of the end of the first month of the relevant quarter. (c) Transfers to Trustee. Purchaser shall transfer (to the extent such unremediated Disqualified Sales Proceeds and associated Disqualified Sale Units remain reflected on the remarketing ledger described under Section 7.6(b) at the time such transfer is required by this Section 7.6(c)) any such unremediated Disqualified Sale Proceeds and any other required funds (i.e., all additional funds necessary for redemption of the Bonds referred to in this Section

7.6(c)) to the Trustee at least 95 days prior to the second anniversary of the date on which such unremediated Disqualified Sale Proceeds and the associated Disqualified Sale Units were first reflected on the remarketing ledgers in accordance with Section 7.6(b), with such funds to be deposited in the Debt Service Account (as defined in the Trust Indenture) and applied to the redemption of Bonds as directed by Issuer and approved by Special Tax Counsel (as defined in the Trust Indenture) as preserving the tax-exempt status of the Bonds.

ARTICLE VIII.

REPRESENTATIONS AND WARRANTIES; ADDITIONAL COVENANTS
Section 8.1 Representations and Warranties of Issuer. As a material inducement to entering into this Agreement, each Party, with respect to itself, hereby represents and warrants to the other Party as of the Execution Date as follows:
(a) in the case of Issuer as the representing Party, Issuer is a joint powers authority, duly organized and validly existing under the Laws of the State of California, (b) in the case of Purchaser as the representing Party, Purchaser is a public agency of the State of California, duly organized and validly existing under the Laws of the State of California;
(c) it has all requisite power and authority, corporate or otherwise, to own its material properties, carry on its material business as now being conducted, enter into, deliver and to perform its obligations under this Agreement and to carry out the terms and conditions hereof and the transactions contemplated hereby;

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(d) there is no litigation, action, suit, proceeding with service of process accomplished with respect to such Party or investigation pending or, to the best of such Party’s knowledge, threatened, in each case before or by any Government Agency and, in each case, which could reasonably be anticipated to materially and adversely affect such Party’s ability to perform its obligations under this Agreement or that questions the validity, binding effect or enforceability hereof, any action taken or to be taken by such Party pursuant hereto, or any of the transactions contemplated hereby;
(e) the execution, delivery and performance of this Agreement by such Party have been duly authorized by all necessary action on the part of such Party and its governing body and do not require any approval or consent of any security holder of such Party or any holder (or any trustee for any holder) of any indebtedness or other obligation of such Party; (f) this Agreement has been duly executed and delivered on behalf of such Party by an appropriate officer or authorized Person of such Party and constitutes the legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms, as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights generally and by general principles of equity; (g) the execution, delivery and performance of this Agreement by such Party shall not violate any provision of any Law, order, writ, judgment, decree or other legal or regulatory determination applicable to it;
(h) the execution, delivery and performance by such Party of this Agreement, and the consummation of the transactions contemplated hereby, including the incurrence by such Party of its financial obligations under this Agreement, shall not result in any violation of any term of any material contract or agreement applicable to it, or any of its charter or bylaws or of any license, permit, franchise, judgment, writ, injunction or regulation, decree, order, charter, Law, ordinance, rule or regulation applicable to it or any of its properties or to any obligations incurred by it or by which it or any of its properties or obligations are bound or affected, or of any determination or award of any arbitrator applicable to it, and shall not conflict with, or cause a breach of, or default under, any such term or result in the creation of any lien upon any of its properties or assets, except with respect to Issuer, the lien of the Trust Indenture; (i) to the best of the knowledge and belief of such Party, no Governmental Approval is required in connection with the valid authorization, execution, delivery and performance by such Party of this Agreement or the consummation of any of the transactions contemplated hereby other than those Governmental Approvals that have been obtained; and (j) it enters this Agreement as a bona-fide, arms-length transaction involving the mutual exchange of consideration and, once executed by both Parties, considers this Agreement a legally enforceable contract.

Section 8.2 Warranty of Title. Issuer warrants that it will deliver to Purchaser (a) all Base Product free and clear of all liens, security interests, claims and encumbrances or any interest therein or thereto by any Person arising prior to the Delivery Point, and (b) all Assigned Product

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free and clear of all liens, security interests, claims and encumbrances or any interest therein or thereto by any Person that are imposed on such Assigned Product solely as a result of Issuer’s or Prepay LLC’s actions.

Section 8.3 Disclaimer of Warranties. EXCEPT FOR THE WARRANTIES EXPRESSLY MADE BY ISSUER IN THIS Article VIII, ISSUER HEREBY DISCLAIMS ALL

WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

Section 8.4 Continuing Disclosure. Purchaser agrees to provide to Issuer: (a) such financial and operating information as may be requested by Issuer, including Purchaser’s most recent audited financial statements, for use in Issuer’s offering documents for the Bonds; and (b) annual updates to such information and statements to enable Issuer to comply with its undertakings to enable the underwriters of the offerings of the Bonds to comply with the continuing disclosure provisions of Rule 15(c)2-12 of the United States Securities and Exchange Commission. Failure by Purchaser to comply with its agreement to provide such annual updates shall not be a default under this Agreement, but any such failure shall entitle Issuer or an owner of the Bonds to take such actions and to initiate such proceedings as may be necessary and appropriate to cause Purchaser to comply with such agreement, including without limitation the remedies of mandamus and specific performance.

ARTICLE IX.

TAXES
As between Issuer and Purchaser, Issuer shall (i) be responsible for and pay or cause to be paid all ad valorem, excise, severance, production and other taxes assessed with respect to Product (other than any Assigned Product) delivered pursuant to this Agreement arising prior to the applicable Delivery Point and (ii) indemnify Purchaser and its Affiliates for any such taxes paid by Purchaser or its Affiliates. As between Issuer and Purchaser, Purchaser shall (i) be responsible for all taxes with respect to Product received pursuant to this Agreement assessed at or from the applicable Delivery Point, and (ii) indemnify Issuer and its Affiliates for any such taxes paid by Issuer or its Affiliates. Nothing shall obligate or cause a Party to pay or be liable for any tax for which it is exempt under Law.

ARTICLE X.

JURISDICTION; WAIVER OF JURY TRIAL
Section 10.1 Consent to Jurisdiction. ALL JUDICIAL PROCEEDINGS BROUGHT

AGAINST EITHER PARTY ARISING OUT OF OR RELATING HERETO SHALL BE

BROUGHT EXCLUSIVELY IN (A) THE COURTS OF THE STATE OF CALIFORNIA

LOCATED IN THE CITY OF LOS ANGELES, (B) THE FEDERAL COURTS OF THE

UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF CALIFORNIA SITTING IN THE COUNTY OF LOS ANGELES. BY EXECUTING AND DELIVERING THIS

AGREEMENT, EACH PARTY AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH

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PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED

MAIL, RETURN RECEIPT REQUESTED, TO THE PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH Article XVI; AND AGREES THAT SERVICE AS PROVIDED

ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE PARTY IN

ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.

Section 10.2 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, EACH

OF THE PARTIES HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY

TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING UNDER THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT

AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING

CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY ACKNOWLEDGES THAT

THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS

RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING

INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. 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. THIS WAIVER IS

IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN

WRITING (OTHER THAN BY MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS Section 10.2 AND EXECUTED BY EACH OF THE PARTIES), AND THIS WAIVER

SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY A COURT.

ARTICLE XI.

FORCE MAJEURE
Section 11.1 Applicability of Force Majeure. To the extent either Party is prevented by Force Majeure from carrying out, in whole or part, its obligations under this Agreement and such Party (the “Claiming Party”) gives notice and details of the Force Majeure to the other Party as soon as practicable, then the Claiming Party shall be excused from the performance of its obligations with respect to this Agreement (other than the obligation to make payments then due or becoming due with respect to performance prior to the Force Majeure). The Claiming Party shall remedy the Force Majeure with all reasonable dispatch. For the duration of the Claiming Party’s non-performance (and only for such period), the non-Claiming Party shall not be required to perform or resume performance of its obligations to the Claiming Party corresponding to the obligations of the Claiming Party excused by Force Majeure.

Section 11.2 Settlement of Labor Disputes. Notwithstanding anything to the contrary herein, the Parties agree that the settlement of strikes, lockouts or other industrial disturbances

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shall be within the sole discretion of the Party experiencing such disturbance, and the failure of a Party to settle such strikes, lockouts or other industrial disturbances shall not prevent the existence of Force Majeure or of reasonable dispatch to remedy the same.

ARTICLE XII.

GOVERNMENTAL RULES AND REGULATIONS
Section 12.1 Compliance with Laws. This Agreement shall be subject to all present and future Laws of any Government Agency having jurisdiction over this Agreement or the transactions to be undertaken hereunder, and neither Party has knowingly undertaken or will knowingly undertake or knowingly cause to be undertaken any activity that would conflict with such Laws; provided, however, that nothing herein shall be construed to restrict or limit either Party’s right to object to or contest any such Law, or its application to this Agreement or the transactions undertaken hereunder, and neither acquiescence therein or compliance therewith for any period of time shall be construed as a waiver of such right.

Section 12.2 Contests. Excluding all matters involving a contractual dispute between the Parties, no Party shall contest, cause to be contested or in any way actively support the contest of the equity, fairness, reasonableness or lawfulness of any terms or conditions set forth or established pursuant to this Agreement, as those terms or conditions may be at issue before any Government Agency in any proceeding, if the successful result of such contest would be to preclude or excuse the performance by either Party of this Agreement or any provision hereunder.

Section 12.3 Defense of Agreement. Excluding all matters involving a contractual dispute between the Parties, each Party shall hereafter exercise Commercially Reasonable Efforts to defend and support this Agreement before any Government Agency in any proceeding, if the substance, validity or enforceability of all or any part of this Agreement is hereafter directly challenged or if any proposed changes in regulatory practices or procedures would have the effect of making this Agreement invalid or unenforceable or would subject either Party to any greater or different regulation or jurisdiction that materially affects the rights or obligations of the Parties under this Agreement.

ARTICLE XIII.

ASSIGNMENT
The terms and provisions of this Agreement shall extend to and be binding upon the Parties and their respective successors, assigns, and legal representatives; provided, however, that, subject to Section 18.14, neither Party may assign this Agreement or its rights and interests, in whole or in part, under this Agreement without the prior written consent of the other Party; provided furthermore that, for the avoidance of doubt, any applicable Assignment Agreement shall terminate concurrent with the assignment of this Agreement. Prior to assigning this Agreement, Purchaser shall deliver to Issuer written confirmation from each Rating Agency (as defined in the Trust Indenture) then rating the Bonds, provided that such agency has rated and continues to rate the Bonds, that the assignment will not result in a reduction, qualification, or withdrawal of the

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then-current ratings assigned by such Rating Agency to the Bonds. Whenever an assignment or a transfer of a Party’s interest in this Agreement is requested to be made with the written consent of the other Party, the assigning or transferring Party’s assignee or transferee shall expressly assume, in writing, the duties and obligations under this Agreement of the assigning or transferring Party.

Upon the agreement of a Party to any such assignment or transfer, the assigning or transferring Party shall furnish or cause to be furnished to the other Party a true and correct copy of such assignment or transfer and assumption of duties and obligations ARTICLE XIV.

PAYMENTS
Section 14.1 Monthly Statements.
(a) Purchaser’s Statements. No later than the 5th day of each Month during the Delivery Period (excluding the first Month of the Delivery Period) and the first Month following the end of the Delivery Period, Purchaser shall deliver to Issuer a statement (a “Purchaser’s Statement”) listing (i) in respect of the prior Month, if Base Quantities were required to be delivered in such Month and there is a Shortfall Quantity for such Month, the Replacement Price applicable to such Shortfall Quantity, and (ii) any other amounts due to Purchaser in connection with this Agreement with respect to prior Months.
(b) Billing Statements.
(i) No later than the 20th day of each Month during the Delivery Period (excluding the first Month of the Delivery Period) and the first Month following the end of the Delivery Period (the “Billing Date”), Issuer shall deliver a statement (a “Billing Statement”) to Purchaser indicating (i) the total amount due to Issuer for Product delivered in the prior Month, (ii) any other amounts due to Issuer or Purchaser in connection with this Agreement with respect to the prior Months, and (iii) the net amount due to Issuer or Purchaser; provided that Prepay LLC’s delivery of a Billing Statement to Issuer and Purchaser pursuant to and as defined in the Master Power Supply Agreement shall be deemed to satisfy Issuer’s obligation to deliver a Billing Statement hereunder; provided furthermore that invoicing for all Assigned PAYGO Products shall occur under the PPA Custodial Agreement. (ii) If a Monthly Statement (as defined in the PPA Custodial Agreement) for an Assigned PPA has not been delivered by the 15th day of the Month following deliveries, Issuer shall provisionally prepare or cause to be prepared a Billing Statement for this Agreement that assumes all of the Assigned Prepay Quantities were delivered under the applicable Assigned PPA for such Month. In such case, to the extent that a Monthly Statement subsequently delivered under the PPA Custodial Agreement reflects that less than the Assigned Prepay Quantities were actually delivered under any such Assigned PPA, then (A) the previously delivered Billing Statement shall be deemed to be updated in accordance

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with such Monthly Statement, (B) Prepay LLC shall be deemed under the remarketing provisions of the Master Power Supply Agreement to remarket and purchase such undelivered portion of the Assigned Prepay Quantities for its own account resulting in a Ledger Entry (as defined in the Master Power Supply Agreement) and (C) Issuer shall owe a resettlement payment to Purchaser in an amount equal to the product of (x) the applicable APC Contract Price multiplied by (y) the portion of the Assigned Prepay Quantities not delivered in such Month. The Parties acknowledge and agree that J. Aron shall have a separate resettlement payment obligation with respect to the amounts described in the clause (C) of the preceding sentence under the Electricity Sale and Service Agreement, and J. Aron’s payment of the J. Aron Resettlement Payment as defined in and pursuant to the PPA Custodial Agreement shall satisfy the corresponding obligations of the respective parties under each of the Electricity Sale and Service Agreement, the Master Power Supply Agreement and this Agreement.
(c) Supporting Documentation. Upon request by either Party, the other Party shall deliver such supporting documentation of the foregoing statements and information described in this Section 14.1 as such requesting Party may reasonably request.

Section 14.2 Payments.
(a) Payments Due. If the Billing Statement indicates an amount due from Purchaser, then Purchaser shall remit such amount to Issuer by wire transfer (pursuant to the Trustee’s instructions), in immediately available funds, on or before the 23rd day of the Month following the most recent Month to which such Billing Statement relates, or if such day is not a Business Day, the preceding Business Day. If the Billing Statement indicates an amount due from Issuer, then Issuer shall remit such amount to Purchaser by wire transfer (pursuant to Purchaser’s instructions), in immediately available funds, on or before the 28th day of the Month following the most recent Month to which such Billing Statement relates, or if such day is not a Business Day, the following Business Day. Notwithstanding the foregoing, payments due from Purchaser for Assigned PAYGO Product shall be satisfied by Purchaser’s compliance with Section 3.2(a)(ii) in respect of such Assigned PAYGO Product.
(b) No Duty to Estimate. If Purchaser fails to issue a Purchaser’s Statement with respect to any Month, Issuer shall not be required to estimate any amounts due to Purchaser for such Month, provided that Purchaser may include any such amount on subsequent Purchaser’s Statements issued within the next sixty (60) days. The sixty (60)-day deadline in this subsection (b) replaces the two (2) year deadline in Section 14.5 with respect to any claim by any non-delivering Party of inaccuracy in any estimated invoice issued or payment made pursuant to this subsection (b).

Section 14.3 Payment of Disputed Amounts. If Purchaser disputes any amounts included in a Billing Statement, Purchaser shall (except in the case of manifest error) nonetheless pay any amount required by the Billing Statement in accordance with Section 14.2 without regard to any right of set-off, counterclaim, recoupment or other defenses to payment that Purchaser may have; provided, however, that Purchaser shall have the right, after payment, to dispute any amounts

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included in a Billing Statement or otherwise used to calculate payments due under this Agreement pursuant to Section 14.5. If Issuer disputes any amounts included in the Purchaser’s Statement, Issuer may withhold payment to the extent of the disputed amount; provided, however, that interest shall be due at the Default Rate for any withheld amount later found to have been properly due.

Section 14.4 Late Payment. If Purchaser fails to remit within one Business Day the full amount payable when due, interest on the unpaid portion shall accrue from the date due until the date of payment at the Default Rate.

Section 14.5 Audit; Adjustments.
(a) Right to Audit. A Party shall have the right, at its own expense, upon reasonable notice to the other Party and at reasonable times, to examine and audit and to obtain copies of the relevant portion of the books, records, and telephone recordings of the other Party to the extent reasonably necessary, but only to such extent, to verify the accuracy of any statement, charge, payment, or computation made under this Agreement. This right to examine, audit, and obtain copies shall not be available with respect to proprietary information not directly relevant to transactions under this Agreement.
(b) Deadline for Objections. Each Purchaser’s Statement and each Billing Statement shall be conclusively presumed final and accurate and all associated claims for under-or overpayments shall be deemed waived unless such Purchaser’s Statement or Billing Statement is objected to in writing, with adequate explanation and/or documentation, within two (2) years after the applicable Month of Product delivery.
(c) Payment of Adjustments. All retroactive adjustments shall be paid in full by the Party owing payment within 30 days of notice and substantiation of such inaccuracy. If the Parties are unable to agree upon any retroactive adjustments requested by either Party within the time period specified in Section 14.5(b), then either Party may pursue any remedies available with respect to such adjustments at law or in equity. Retroactive adjustments for payments made based on an incorrect Purchaser’s Statement or Billing Statement shall bear interest at the Default Rate from the date such payment was made.

Section 14.6 Netting; No Set-Off. The Parties shall net all amounts due and owing, including any past due amounts (which, for the avoidance of doubt, shall include any accrued interest), arising under this Agreement such that the Party owing the greater amount shall make a single payment of the net amount to the other Party in accordance with this Article XIV.

Notwithstanding the foregoing, no Party shall be entitled to net any amounts that are in dispute and payment for all amounts set forth in a Billing Statement provided to Purchaser shall be made without set-off or counterclaim of any kind.

Section 14.7 Rate Covenant. Purchaser agrees to make payments it is required to make under this Agreement from Utility Revenues, and only from such Utility Revenues, and as a charge against such Utility Revenues, as an operating expense of its electric system and a cost of purchased Product; provided, however, that Purchaser, in its discretion, may apply any legally available moneys to the payment of amounts due under this Agreement. Purchaser hereby

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covenants and agrees that it will establish, maintain, and set rates and charges for its electric system so as to provide Utility Revenues sufficient, together with all available electric system revenues, to enable Purchaser to pay to Issuer all amounts payable under this Agreement and to pay all other amounts payable from the revenues of Purchaser’s electric system, and to maintain any reserves as required by the Purchaser’s reserve policy. Purchaser further covenants and agrees that it shall not furnish or supply electric services free of charge to any person, firm, corporation association, or other entity, public or private, except any such service free of charge that Purchaser is supplying on the date hereof or such free service as required by order of the CPUC or the State of California, and that it shall promptly enforce the payment of any and all accounts owing to Purchaser for the sale of electricity or the provision of transmission, distribution or other services to its customers.

Purchaser further covenants and agrees that in any future bond issue, certificate of participation issue, interest rate swap agreement, commodity swap agreement or any other financing or financial transaction undertaken by, or on behalf of, Purchaser in connection with its electric system, Purchaser shall not pledge or encumber the Utility Revenues through a gross revenue pledge or in any other way which creates a prior or superior obligation to its obligation to make payments under this Agreement.

ARTICLE XV.
[RESERVED]
ARTICLE XVI.

NOTICES
Any notice, demand, statement, or request required or authorized by this Agreement to be given by one Party to the other Party (or to any third party) shall be in writing and shall either be sent by email transmission, courier, or personal delivery (including overnight delivery service) to each of the notice recipients and addresses specified in Exhibit B for the receiving Party. Any such notice, demand, or request shall be deemed to be given (i) when delivered by email transmission, or (ii) when actually received if delivered by courier or personal delivery (including overnight delivery service). Each Party shall have the right, upon 10 days’ prior written notice to the other Party, to change its list of notice recipients and addresses in Exhibit B. The Parties may mutually agree in writing at any time to deliver notices, demands or requests through alternate or additional methods, such as electronic mail. Notwithstanding the foregoing, either Party may at any time notify the other that any notice, demand, statement, or request to it must be provided by email transmission for a specified period of time or until further notice, and any communications delivered by means other than email transmission during the specified period of time shall be ineffective.

ARTICLE XVII.

DEFAULT; REMEDIES; TERMINATION
Section 17.1 Issuer Default. Each of the following events shall constitute a “Issuer Default” under this Agreement:

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(a) any representation or warranty made by Issuer in this Agreement shall prove to have been incorrect in any material respect when made; or (b) Issuer shall have failed to perform, observe, or comply with any covenant, agreement or term contained in this Agreement, and such failure continues for more than thirty (30) days following receipt by Issuer of written notice thereof.

Section 17.2 Purchaser Default. Each of the following events shall constitute a “Purchaser Default” under this Agreement:
(a) Purchaser fails to pay when due any amounts owed to Issuer pursuant to this Agreement and such failure continues for three Days following receipt by Purchaser of written notice thereof;
(b) Purchaser (i) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (ii) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (iii) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (iv) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency Law or other similar Law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained, in each case within 30 days of the institution or presentation thereof; (v) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (vi) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all of its assets; (vii) has a secured party take possession of all or substantially all of its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its of assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; (viii) causes or is subject to any event with respect to it which, under the applicable Laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (i) through (vii); or (ix) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; (c) any representation or warranty made by Purchaser in this Agreement proves to have been incorrect in any material respect when made, and such default is not remedied within thirty (30) days after receipt by Purchaser of written notice thereof; (d) Purchaser shall have failed to perform, observe or comply with any material covenant, agreement or term contained in this Agreement, and such failure continues for more than 30 days following the earlier of receipt by Purchaser of notice thereof; or

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(e) Purchaser shall have failed to establish, maintain, or collect rates or charges adequate to provide Utility Revenues sufficient to enable Purchaser to pay all amounts due to Issuer under this Agreement in accordance with Section 14.7 (Rate Covenant), and such failure continues for more than 30 days following the earlier of receipt by Purchaser of notice thereof.

Section 17.3 Automatic Non-Default Termination Event. Purchaser’s issuance of a valid Remarketing Termination Notice (other than a Voided Remarketing Termination Notice) in accordance with Section 3.5(b) shall constitute an “Automatic Non-Default Termination Event” under this Agreement.

Section 17.4 Remedies Upon Default.
(a) Termination.
(i) If an Automatic Non-Default Termination Event occurs, then (A) the Delivery Period shall end as of the end of then-current Reset Period (i.e., as of the end of the Reset Period preceding the Reset Period for which Purchaser issues a valid Remarketing Termination Notice other than a Voided Remarketing Termination Notice), (B) this Agreement shall terminate upon payment by the Parties’ of any outstanding amounts due under this Agreement and (C) Purchaser shall exercise its right to terminate any Assignment Agreements in effect.
(ii) If at any time a Issuer Default or a Purchaser Default has occurred and is continuing, then the non-defaulting Party may do any or all of the following (i) by notice to the defaulting Party specifying the relevant Issuer Default or Purchaser Default, as applicable, terminate this Agreement effective as of a day not earlier than the day such notice is deemed given under Article XVI and/or (ii) declare all amounts due to the non-defaulting Party under this Agreement or any part thereof immediately due and payable, and the same shall thereupon become immediately due and payable, without notice, demand, presentment, notice of dishonor, notice of intent to demand, protest or other formalities of any kind, all of which are hereby expressly waived by the defaulting Party; provided, however, this Agreement shall automatically terminate and all amounts due to the non-defaulting Party hereunder shall immediately become due and payable as of the time immediately preceding the institution of the relevant proceeding or the presentation of the relevant petition giving rise to a Purchaser Default specified in Section 17.2(b)(iv) or, to the extent analogous thereto, Section

17.2(b)(viii). In addition, during the existence of an Issuer Default or a Purchaser Default, as applicable, the non-defaulting Party may exercise all other rights and remedies available to it at Law or in equity, including without limitation mandamus, injunction and action for specific performance, to enforce any covenant, agreement or term of this Agreement.

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(b) Additional Remedies. In addition to the remedies set forth in Section

17.4(a) (and without limiting any other provisions of this Agreement), during the existence of any Purchaser Default, Issuer may suspend its performance hereunder and discontinue the supply of all or any portion of the Product otherwise to be delivered to Purchaser by it under this Agreement. If Issuer exercises its right to suspend performance under this Section 17.4(b), Purchaser shall remain fully liable for payment of all amounts in default and shall not be relieved of any of its payment obligations under this Agreement. Deliveries of Product may only be reinstated, at a time to be determined by Issuer, upon (i) payment in full by Purchaser of all amounts then due and payable under this Agreement and (ii) unless otherwise agreed by Issuer, payment in advance by Purchaser at the beginning of each Month of amounts estimated by Issuer to be due to Issuer for the future delivery of Product under this Agreement for such Month. Issuer may continue to require payment in advance from Purchaser after the reinstatement of Issuer’s supply services under this Agreement for such period of time as Issuer in its sole discretion may determine is appropriate. In addition, and without limiting any other provisions of or remedies available under this Agreement, if Purchaser fails to accept from Issuer any Product tendered for delivery under this Agreement, Issuer shall have the right to sell such Product to third parties on any terms that Issuer, in its sole discretion, determines are appropriate.
(c) Effect of Early Termination. As of the effectiveness of any termination date in accordance with Section 17.4(a), (i) the Delivery Period shall end, (ii) the obligation of Issuer to make any further sales and deliveries of Product to Purchaser under this Agreement shall terminate, and (iii) the obligation of Purchaser to purchase and receive deliveries of Product from Issuer under this Agreement will terminate. Neither this Agreement nor the Delivery Period may be terminated for any reason except as specified in this Article XVII. Without prejudice to any payment obligation in respect of periods prior to termination, no payments will be due from either Party in respect of periods occurring after the effective termination date of this Agreement.

Section 17.5 Termination of Master Power Supply Agreement. Purchaser acknowledges and agrees that (i) in the event the Master Power Supply Agreement terminates prior to the end of the primary term of this Agreement, this Agreement shall terminate on the effective date of early termination of the Master Power Supply Agreement (which date shall be the last date upon which deliveries are required thereunder, subject to all winding up arrangements), (ii) Issuer’s obligation to deliver Product under this Agreement shall terminate upon the termination of deliveries of Product to Issuer under the Master Power Supply Agreement and (iii) Purchaser shall exercise its right to terminate any Assignment Agreements in effect. Issuer shall provide notice to Purchaser of any early termination date of the Master Power Supply Agreement. The Parties recognize and agree that, in the event that the Master Power Supply Agreement terminates because of a Failed Remarketing (as defined in the Trust Indenture) of the Bonds that occurs in the first Month of a Reset Period, Issuer shall deliver Product under this Agreement for the remainder of such first Month, and, notwithstanding anything in this Agreement to the contrary, no Monthly Discount Percentage or Annual Refunds shall be associated with such deliveries and the Contract Price shall be adjusted accordingly.

Section 17.6 Limitation on Damages. THE PARTIES CONFIRM THAT THE

EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS

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AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY

PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS

HEREIN 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. NEITHER PARTY SHALL BE

LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR INDIRECT

DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY

STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION, OR OTHERWISE. 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 WITHOUT LIMITATION

THE NEGLIGENCE OF EITHER PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES

REQUIRED TO BE PAID UNDER THIS AGREEMENT ARE LIQUIDATED, THE PARTIES

ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO

DETERMINE, OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT,

AND THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS. IN DETERMINING THE APPROPRIATE MEASURE OF

DAMAGES THAT WOULD MAKE THE PARTIES WHOLE, THE PARTIES HAVE

THOROUGHLY CONSIDERED, INTER ALIA, THE UNCERTAINTY OF FLUCTUATIONS

IN PRODUCT PRICES, THE ABILITY AND INTENTION OF THE PARTIES TO HEDGE

SUCH FLUCTUATIONS, THE BARGAINED-FOR ALLOCATION OF RISK, THE

KNOWLEDGE, SOPHISTICATION AND EQUAL BARGAINING POWER OF THE

PARTIES, THE ARMS-LENGTH NATURE OF THE NEGOTIATIONS, THE SPECIAL

CIRCUMSTANCES OF THIS TRANSACTION, THE ACCOUNTING AND TAX

TREATMENT OF THE TRANSACTION BY THE PARTIES, AND THE ENTERING INTO OF

OTHER TRANSACTIONS IN RELIANCE ON THE ENFORCEABILITY OF THE LIQUIDATED DAMAGES PROVISIONS CONTAINED HEREIN.

ARTICLE XVIII.

MISCELLANEOUS
Section 18.1 Indemnification Procedure. With respect to each indemnification included in this Agreement, the indemnity is given to the fullest extent permitted by applicable Law and the following provisions shall be applicable. The indemnified Party shall promptly notify the indemnifying Party in writing of any Claim and the indemnifying Party shall have the right to assume its investigation and defense, including employment of counsel, and shall be obligated to pay related court costs, attorneys’ fees and experts’ fees and to post any appeals bonds; provided, however, that the indemnified Party shall have the right to employ at its expense separate counsel and participate in the defense of any Claim. The indemnifying Party shall not be liable for any settlement of a Claim without its express written consent thereto. In order to prevent double recovery, the indemnified Party shall reimburse the indemnifying Party for payments or costs incurred in respect of an indemnity with the proceeds of any judgment, insurance, bond, surety or other recovery made by the indemnified Party with respect to a covered event.

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Section 18.2 Deliveries. Contemporaneously with this Agreement (unless otherwise specified),
(a) each Party shall deliver to the other Party evidence reasonably satisfactory to it of (i) such Party’s authority to execute, deliver and perform its obligations under this Agreement and (ii) the appropriate individuals who are authorized to sign this Agreement on behalf of such Party;
(b) on the Bond Closing Date, Purchaser shall deliver to Issuer a fully executed Federal Tax Certificate in substantially the form attached hereto as Exhibit D; (c) on the Bond Closing Date, Purchaser shall deliver to Issuer an opinion or opinions of counsel to Purchaser covering the matters set forth in the form attached hereto as Exhibit E; and
(d) on the Bond Closing Date, Purchaser shall deliver to Issuer a Closing Certificate in substantially the form set forth hereto as Exhibit I.

Section 18.3 Entirety; Amendments. This Agreement, including the exhibits and attachments hereto, constitutes the entire agreement between the Parties and supersedes all prior discussions and agreements between the Parties with respect to the subject matter hereof. There are no prior or contemporaneous agreements or representations affecting the same subject matter other than those expressed herein. Except for any matters that, in accordance with the express provisions of this Agreement, may be resolved by oral agreement between the Parties, no amendment, modification, supplement, or change hereto shall be enforceable unless reduced to writing and executed by both Parties.

Section 18.4 Governing Law. THIS AGREEMENT AND THE RIGHTS AND DUTIES

OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY AND

CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF

THE STATE OF CALIFORNIA, WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLE THAT WOULD DIRECT THE APPLICATION OF ANOTHER JURISDICTION’S LAW.

Section 18.5 Non-Waiver. No waiver of any breach of any of the terms of this Agreement shall be effective unless such waiver is in writing and signed by the Party against whom such waiver is claimed. No waiver of any breach or breaches shall be deemed a waiver of any other subsequent breach.

Section 18.6 Severability. If any provision of this Agreement, or the application thereof, shall for any reason be invalid or unenforceable, then to the extent of such invalidity or unenforceability, the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected thereby, but rather shall be enforced to the maximum extent permissible under applicable Law, so long as the economic and legal substance of the transactions contemplated hereby is not affected in any materially adverse manner as to either Party.

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Section 18.7 Exhibits. Any and all Exhibits and attachments referenced in this Agreement are hereby incorporated herein by reference and shall be deemed to be an integral part hereof.

Section 18.8 Winding Up Arrangements. All indemnity and confidentiality obligations, audit rights, and other provisions specifically providing for survival shall survive the expiration or termination of this Agreement. The expiration or termination of this Agreement shall not relieve either Party of (a) any unfulfilled obligation or undischarged liability of such Party on the date of such termination or (b) the consequences of any breach or default of any warranty or covenant contained in this Agreement. All obligations and liabilities described in the preceding sentence of this Section 18.8, and applicable provisions of this Agreement creating or relating to such obligations and liabilities, shall survive such expiration or termination.

Section 18.9 Relationship of Parties. The Parties shall not be deemed to be in a relationship of partners or joint venturers by virtue of this Agreement, nor shall either Party be an agent, representative, trustee or fiduciary of the other. Neither Party shall have any authority to bind the other to any agreement. This Agreement is intended to secure and provide for the services of each Party as an independent contractor.

Section 18.10 Immunity. Each Party represents and covenants to and agrees with the other Party that it is not entitled to and shall not assert the defense of sovereign immunity with respect to its obligations or any Claims under this Agreement.

Section 18.11 Rates and Indices. If the source of any publication used to determine the index or other price used in the Contract Price should cease to publish the relevant prices or should cease to be published entirely, an alternative index or other price will be used based on the determinations made by Issuer and Prepay LLC under Section 18.11 of the Master Power Supply Agreement. Issuer shall provide Purchaser the opportunity to provide its recommendations and other input to Issuer for Issuer’s use in the process for selecting such alternative index or other price under Section 18.11 of the Master Power Supply Agreement.

Section 18.12 Limitation of Liability. Notwithstanding anything to the contrary herein, all obligations of Issuer under this Agreement, including without limitation all obligations to make payments of any kind whatsoever, are special, limited obligations of Issuer payable solely from Trust Estate (as such term is defined in the Trust Indenture) as and to the extent provided in the Trust Indenture, including with respect to Operating Expenses (as such term is defined in the Trust Indenture). Issuer shall not be required to advance any moneys derived from any source other than the Revenues (as such term is defined in the Trust Indenture) and other assets pledged under the Trust Indenture for any of the purposes in this Agreement mentioned. Neither the faith and credit of Issuer nor the taxing power of the State of California or any political subdivision thereof is pledged to payments pursuant to this Agreement. Issuer shall not be directly, indirectly, contingently or otherwise liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reasons of or in connection with this Agreement, except solely to the extent Revenues (as such term is defined in the Trust Indenture) are received for the payment thereof and may be applied therefor pursuant to the terms of the Trust Indenture.

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Section 18.13 Counterparts. This Agreement may be executed and acknowledged in multiple counterparts and by the Parties in separate counterparts, each of which shall be an original and all of which shall be and constitute one and the same instrument.

Section 18.14 Third Party Beneficiaries; Rights of Trustee. Purchaser acknowledges and agrees that (a) Issuer will pledge and assign its rights, title and interest in this Agreement and the amounts payable by Purchaser under this Agreement to secure Issuer’s obligations under the Trust Indenture, (b) the Trustee shall be a third-party beneficiary of this Agreement with the right to enforce Issuer’s rights and Purchaser’s obligations under this Agreement, (c) J. Aron shall be a third-party beneficiary of this Agreement with the right to enforce the provisions of Section 3.5, Article VI and Exhibit F of this Agreement, (d) the Trustee or any receiver appointed under the Trust Indenture shall have the right to perform all obligations of Issuer under this Agreement, and (e) in the event of any Purchaser Default under Section 17.2(a), (i) Prepay LLC may, to the extent provided for in, and in accordance with, the Receivables Purchase Exhibit to the Master Power Supply Agreement, take assignment from Issuer of receivables owed by Purchaser to Issuer under this Agreement, and Prepay LLC or any third party transferee who purchases and takes assignment of such receivables from Prepay LLC shall thereafter have all rights of collection with respect to such receivables (provided that, if at any time an insurance provider agrees to insure Purchaser’s payment obligations hereunder, then such insurance provider shall have the same rights under this Section 18.14 as Prepay LLC), and (ii) if such receivables are not so assigned, the Swap Counterparty or Swap Counterparties (as defined in the Trust Indenture) shall have the right to pursue collection of such receivables to the extent any non-payment by Issuer to any Swap Counterparty was caused by Purchaser’s payment default. Pursuant to the terms of the Trust Indenture, Issuer has irrevocably appointed the Trustee as its agent to issue notices and, as directed under the Trust Indenture, to take any other actions that Issuer is required or permitted to take under this Agreement. Purchaser may rely on notices or other actions taken by Issuer or the Trustee and Purchaser has the right to exclusively rely on any notices delivered by the Trustee, regardless of any conflicting notices that it may receive from Issuer.

Section 18.15 No Recourse to Members of Purchaser. Purchaser 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. Purchaser shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Issuer shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Purchaser’s constituent members, or the employees, directors, officers, consultants or advisors or Purchaser or its constituent members, in connection with this Agreement.

Section 18.16 Waiver of Defenses. Each Party waives all rights to set-off, counterclaim, recoupment and any other defenses that might otherwise be available to it with regard to its obligations pursuant to the terms of this Agreement.

Section 18.17 Rate Changes.
(a) Standard of Review. Absent the agreement of the Parties to the proposed change, the standard of review for changes to any rate, charge, classification, term or condition of

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this Agreement, whether proposed by a Party (to the extent that any waiver in Section 18.17(b) below is unenforceable or ineffective as to such Party), a non-party or FERC acting sua sponte, shall solely be the “public interest” application of the “just and reasonable” 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) and clarified by Morgan Stanley Capital Group Inc. v. Public Util. Dist. No. 1 of Snohomish, 554 U.S. 527 (2008). (b) Waiver. In addition, and notwithstanding Section 18.17(a), to the fullest extent permitted by applicable Law, each Party, for itself and its successors and assigns, hereby expressly and irrevocably waives any rights it can or may have, now or in the future, whether under Section 205 and/or 206 of the Federal Power Act or otherwise, to seek to obtain from FERC by any means, directly or indirectly (through complaint, investigation or otherwise), and each hereby covenants and agrees not at any time to seek to so obtain, an order from FERC changing any section of this Agreement specifying the rate, charge, classification, or other term or condition agreed to by the Parties, it being the express intent of the Parties that, to the fullest extent permitted by applicable Law, neither Party shall unilaterally seek to obtain from FERC any relief changing the rate, charge, classification, or other term or condition of this Agreement, notwithstanding any subsequent changes in applicable Law or market conditions that may occur. In the event it were to be determined that applicable Law precludes the Parties from waiving their rights to seek changes from FERC to their market-based power sales contracts (including entering into covenants not to do so) then this Section 18.17(b) shall not apply, provided that, consistent with Section

18.17(a), neither Party shall seek any such changes except solely under the “public interest” application of the “just and reasonable” standard of review and otherwise as set forth in Section

18.17(a).

IN WITNESS WHEREOF, the Parties have caused this Clean Energy Purchase Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first above written.
[Separate Signature Page(s) Attached]

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Signature Page to the Clean Energy Purchase Contract

CALIFORNIA COMMUNITY CHOICE FINANCING AUTHORITY
By:____________________________________
Name:______________________________
Title:_______________________________

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Signature Page to the Clean Energy Purchase Contract

CLEAN POWER ALLIANCE OF SOUTHERN

CALIFORNIA
By:____________________________________
Name:______________________________
Title:_______________________________

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A-1
EXHIBIT A-1
BASE QUANTITIES; BASE DELIVERY POINTS; COMMODITY REFERENCE PRICES [To be attached.]

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A-2
EXHIBIT A-2

ASSIGNED RIGHTS AND OBLIGATIONS
[To be attached.]

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B-1

EXHIBIT B

NOTICES
IF TO ISSUER: California Community Choice Financing Authority 1125 Tamalpais Avenue
San Rafael, CA 94901
Email: [email protected] and [email protected]
IF TO PURCHASER: Clean Power Alliance of Southern California 801 South Grand Avenue, Suite 400
Los Angeles, CA 90017
Email: [email protected]

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C-1

EXHIBIT C

REMARKETING TERMINATION NOTICE
California Community Choice Financing Authority
1125 Tamalpais Avenue
San Rafael, CA 94901
Email: [email protected] and [email protected]
Aron Energy Prepay 41 LLC
c/o J. Aron & Company LLC
200 West Street
New York, NY 10282
U.S. Bank Trust Company, National Association
1349 W. Peachtree Street, Suite 1050
Atlanta, Georgia 30309
Attention: Mark Hallam
Telephone: (404) 898-2463
Email: [email protected]
To the Addressees:

The undersigned, duly authorized representative of Clean Power Alliance of Southern California (the "Purchaser"), is providing this notice (the “Remarketing Termination Notice”) pursuant to the Clean Energy Purchase Contract, dated as of [_____], 2024 (the “Clean Energy Purchase Contract”), between California Community Choice Financing Authority and Purchaser.

Capitalized terms used herein shall have the meanings set forth in the Clean Energy Purchase Contract.

Pursuant to Section 3.5(b) of the Clean Energy Purchase Contract, the Purchaser has elected to terminate this Agreement unless Issuer and Prepay LLC are able to achieve an Available Discount Percentage equal to or greater than the Minimum Discount Percentage.

Given this [___] day of [_________], 20[__].

CLEAN POWER ALLIANCE OF

SOUTHERN CALIFORNIA
By: _____________________
Printed Name:

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Title:

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EXHIBIT D

FORM OF FEDERAL TAX CERTIFICATE
This Federal Tax Certificate is executed in connection with the Clean Energy Purchase Contract dated as of [_____], 2024 (the “Clean Energy Purchase Contract”), by and between the California Community Choice Financing Authority (“Issuer”) and Clean Power Alliance of Southern California, a California joint powers authority (“Purchaser”). Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Clean Energy Purchase Contract, in the Tax Certificate and Agreement, or in the Trust Indenture.

WHEREAS Purchaser acknowledges that Issuer is issuing the Bonds to fund the prepayment price under the Master Power Supply Agreement; and WHEREAS the Bonds are intended to qualify for tax exemption under Section 103 of the Internal Revenue Code of 1986, as amended; and
WHEREAS Purchaser’s use of Energy acquired pursuant to the Clean Energy Purchase Contract and certain funds and accounts of Purchaser will affect the Bonds’ qualification for such tax exemption.

NOW, THEREFORE, POWER PURCHASER HEREBY CERTIFIES AS FOLLOWS:

Purchaser is a joint powers authority and a community choice aggregator created and existing pursuant to the provisions of California law, organized under the laws of the State of California. As a community choice aggregator, the Purchaser is a load-serving entity providing electricity to customers within the boundaries of cities and/or counties that have elected to participate in Purchaser’s community choice aggregation program. For purposes of this Certificate, the term “service area” of the Purchaser means the boundaries of the cities and/or counties that have elected to participate in the Purchaser’s community choice aggregation program, as well as any other area recognized as the service area of the Purchaser under state or federal law.

Purchaser will resell all of the Energy acquired pursuant to the Clean Energy Purchase Contract to its retail Energy customers within its service area, with retail sales in all cases being made pursuant to regularly established and generally applicable tariffs.

From January 2019 to [____], the monthly average amount of Energy purchased (other than for resale) by customers of Purchaser who are located within the service area of Purchaser is at least [____] MWh. Over the term of the Clean Energy Purchase Contract, the Purchaser expects the monthly average amount of Energy purchased (other than for resale) by customers of the Purchaser who are located within the service area of the Purchaser to be at least [____] MWh. The maximum monthly amount of Energy in any month being acquired pursuant to the Clean Energy Purchase Contract is [____] MWh.

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The Purchaser has existing rights to acquire other energy (including rights to capacity to generate electricity, whether owned, leased or otherwise contracted for) over the term of the Clean Energy Purchase Contract. Over the term of the Clean Energy Purchase Contract, the sum of (a) the amount of Energy being acquired pursuant to the Clean Energy Purchase Contract in any month, and (b) the amount of Energy that Purchaser otherwise has a right to acquire (including rights to capacity to generate electricity, whether owned, leased or otherwise contracted for) for such month does not exceed (i) [____]% of the monthly amount of Energy expected to be purchased (other than for resale) by customers of Purchaser who are located within the service area of Purchaser in any month in calendar year [____], and (ii) does not exceed [____]% of the monthly amount of Energy expected to be purchased (other than for resale) by customers of Purchaser who are located within the service area of Purchaser in any month in later calendar years.

The Purchaser has assigned certain rights and obligations under power purchase agreements to J. Aron that, in addition to rights to Energy, include rights to capacity based on battery storage (the “Storage”) that will be charged from Energy produced at the same facilities and acquired pursuant to that same power purchase agreements. The Purchaser certifies that it will exercise its rights pursuant to such power purchase agreements to ensure that such Storage will only be charged from Energy produced at such facilities and acquired pursuant to such power purchase agreements.

In the event of the expiration or termination of an EPS Energy Period, Purchaser agrees to comply with its obligations in the Clean Energy Purchase Contract, including but not limited to its obligations to (a) exercise Commercially Reasonable Efforts to assign a portion of Purchaser’s rights and obligations under a power purchase agreement under which Purchaser is purchasing EPS Compliant Energy to J. Aron pursuant to an Assignment Agreement and (b) cooperate in good faith with Issuer and J. Aron with respect to any proposed assignments.

Purchaser expects to pay for Energy acquired pursuant to the Clean Energy Purchase Contract solely from funds derived from its power distribution operations. Purchaser expects to use current net revenues of its to pay for current Energy acquisitions. Neither the Purchaser nor any person who is a related party to the Purchaser will hold any funds or accounts in which monies are invested and which are reasonably expected to be used to pay for Energy acquired more than one year after such monies are set aside. No portion of the proceeds of the Bonds will be used directly or indirectly to replace funds of Purchaser or any persons who are related Persons to Purchaser that are or were intended to be used for the purpose for which the Bonds were issued. _______________, 2024
By: ________________________________
[Name]
[Title]

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EXHIBIT E

OPINION OF COUNSEL
California Community Choice Financing Authority
San Rafael, CA
Aron Energy Prepay 41 LLC
New York, NY
Goldman Sachs & Co. LLC
New York, NY
U.S. Bank Trust Company, National Association
Atlanta, Georgia
[Commodity Swap Counterparty]
[____]
Re: Power Supply Contract between Clean Power Alliance of Southern California and California Community Choice Financing Authority dated as of [_____], 2024 Ladies and Gentlemen:

We are Counsel to Clean Power Alliance of Southern California (“Purchaser”). Purchaser is a Purchaser in the Energy Project undertaken by California Community Choice Financing Authority (“Issuer”). We are furnishing this opinion to you in connection with the Power Supply Contract between Issuer and Purchaser dated as of [_____], 2024 (the “Supply Contract”).

Unless otherwise specified herein, all terms used but not defined in this opinion shall have the same meaning as is ascribed to them in the Supply Contract.

In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the following:
(a) The Constitution and laws of the State of California (the “State”) including, as applicable, acts, ordinances, certificates, articles, charters, bylaws, and agreements pursuant to which Purchaser was created and by which it is governed; (b) Resolution No. [__], duly adopted by Purchaser on [___________] (the “Resolution”) and certified as true and correct by certificate and seal, authorizing Purchaser to execute and deliver the Supply Contract;
(c) A copy of the Supply Contract executed by Purchaser; and

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(d) All outstanding instruments relating to bonds, notes, or other indebtedness of or relating to Purchaser and Purchaser's CCA System (as defined in the Supply Contract).

We have also examined and relied upon originals or copies, certified or otherwise authenticated to our satisfaction, of such records, documents, certificates, and other instruments, and made such investigations of law, as in our judgment we have deemed necessary or appropriate to enable us to render the opinions expressed below.

Based upon the foregoing, we are of the opinion that:

1. Purchaser is a joint powers authority of the State, duly organized and validly existing as a community choice aggregator under the laws of the State, and has the power and authority to own its properties, to carry on its business as now being conducted, and to enter into and to perform its obligations under the Agreement.

2. The execution, delivery, and performance by Purchaser of the Supply Contract have been duly authorized by the governing body of Purchaser and do not and will not require, subsequent to the execution of the Supply Contract by Purchaser, any consent or approval of the governing body or any officers of Purchaser.

3. The Supply Contract is the legal, valid, and binding obligation of Purchaser, enforceable in accordance with its terms, except as such enforceability may be subject to (i) the exercise of judicial discretion in accordance with general principles of equity and (ii) bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights heretofore or hereafter enacted, to the extent constitutionally applicable.

4. No approval, consent or authorization of any governmental or public agency, authority, commission or person, or, to our knowledge, of any holder of any outstanding bonds or other indebtedness of Purchaser, is required with respect to the execution, delivery and performance by Purchaser of the Supply Contract or Purchaser's participation in the transactions contemplated thereby other than those approvals, consents and/or authorizations that have already been obtained.

5. The authorization, execution and delivery of the Supply Contract and compliance with the provisions thereof (a) will not conflict with or constitute a breach of, or default under, (i) any instrument relating to the organization, existence or operation of Purchaser, (ii) any ruling, regulation, ordinance, judgment, order or decree to which Purchaser (or any of its officers in their respective capacities as such) is subject or (iii) any provision of the laws of the State relating to Purchaser and its affairs, and (b) to our knowledge will not result in, or require the creation or imposition of, any lien on any of the properties or revenues of Purchaser pursuant to any of the foregoing.

6. Purchaser is not in breach of or default under any applicable constitutional provision or any law or administrative regulation of the State or the United States or any applicable judgment or decree or, to our knowledge, any loan or other agreement, resolution, indenture, bond,

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note, resolution, agreement or other instrument to which Purchaser is a party or to which Purchaser or any of its property or assets is otherwise subject, and to our knowledge no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument.

7. Payments to be made by Purchaser under the Supply Contract shall constitute operating expenses of Purchaser's CCA System payable solely from the revenues and other available funds of Purchaser's CCA System as a cost of purchased electricity. The application of the revenues and other available funds of Purchaser's CCA System to make such payments is not subject to any prior lien, encumbrance or other restriction.

8. As of the date of this opinion, to the best of our knowledge after due inquiry, there is no pending or threatened action or proceeding at law or in equity or by any court, government agency, public board or body affecting or questioning the existence of Purchaser or the titles of its officers to their respective offices or affecting or questioning the legality, validity, or enforceability of this Supply Contract nor to our knowledge is there any basis therefor.

This opinion is rendered solely for the use and benefit of the addressees listed above in connection with the Supply Contract and may not be relied upon other than in connection with the transactions contemplated by the Supply Contract, or by any other person or entity for any purpose whatsoever, nor may this opinion be quoted in whole or in part or otherwise referred to in any document or delivered to any other person or entity, without the prior written consent of the undersigned.

Very truly yours,

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1 EXHIBIT F

ASSIGNMENT OF ASSIGNABLE POWER CONTRACTS

1. General Requirements. Assigned Rights and Obligations under an Assignable Power Contract may only be assigned under this Exhibit F if the following requirements are satisfied or waived by J. Aron and Issuer:

1.1. The seller under such Assignable Power Contract (the “APC Party”) either (i) has a long-term senior unsecured credit rating that is “Baa3” or higher from Moody’s Investor’s Service, Inc. (or any successor to its credit rating service operation), “BBB-” or higher from Standard & Poor’s Global Ratings (or any successor to its credit rating service operation) or “BBB-” or higher from Fitch Ratings, Inc. (or any successor to its credit rating service operation), (ii) provides credit support that is reasonably satisfactory to J. Aron or (iii) otherwise provides evidence of its creditworthiness that is reasonably satisfactory to J. Aron (which, for the avoidance of doubt, may include credit support provided by such APC Party to Purchaser).

1.2. The APC Party satisfies J. Aron’s internal requirements as they relate to “know your customer” rules, policies and procedures, anti-money laundering rules and regulations, Dodd-Frank Act, Commodity Exchange Act, Patriot Act and similar rules, regulations, requirements and corresponding policies.

1.3. The APC Party is organized in the United States and in a jurisdiction that does not present adverse tax consequences to J. Aron or Issuer in connection with such proposed assignment.

1.4. J. Aron, Purchaser, and Issuer have agreed on and executed an Assignment Schedule for such assignment.

1.5. J. Aron, Purchaser, Issuer, and the applicable APC Party have agreed on and executed an Assignment Agreement for such assignment.

1.6. If the Assignable Power Contract is unit-contingent or for an as-generated Product, then:

1.6.1. J. Aron has determined with a high degree of certainty that the Applicable Project will be able to generate the Assigned Prepay Value in each Month during the proposed Assignment Period.

1.6.2. The Applicable Project (as defined below) has generated the Assigned Prepay Value (as defined below) in each Month since commencing commercial operation.

2. Proposed Assignment. Purchaser may propose an assignment of Assigned Rights and Obligations under Article VI of the Clean Energy Purchase Contract by delivering the following items to Issuer and to J. Aron:

2.1. A written notice of the proposed assignment signed by Purchaser.

2.2. A true and complete copy of the Assignable Power Contract under which such Assigned Rights and Obligations would arise.

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2 2.3. Evidence reasonably satisfactory to Issuer and J. Aron that all authorizations, consents, approvals, licenses, rulings, permits, exemptions, variances, orders, judgments, decrees, declarations of or regulations by any Government Agency necessary in connection with the transactions contemplated by the Assignable Power Contract and the assignment of the Assignable Power Contract to J. Aron have been obtained and are in full force and effect. Such evidence may be provided by a closing certificate with appropriate back-up materials.

2.4. Such additional information as Issuer and J. Aron may reasonably request regarding the Assignable Power Contract and the APC Party.

2.5. If the Assignable Power Contract is unit-contingent or for an as-generated Product, then:

2.5.1. A description and information of the applicable project to which the Assignable Power Contract applies (the “Applicable Project”), including but not limited to information on the location, interconnection(s), and operating and compliance history of Applicable Project.

2.5.2. Either (i) a report from a nationally recognized consultant in the energy industry that is reasonably acceptable to Issuer and J. Aron showing the “P99” forecasted generation (“P99 Generation”) and “P50” forecasted generation (“P50 Generation”) of the Applicable Project for the entire Assignment Period, as the terms P99 and P50 are commonly used in the renewable energy industry or (ii) monthly historical generation and meteorological data of the Applicable Project dating back to the commercial operation date.

Following Issuer’s and J. Aron’s receipt of such information, Purchaser and Issuer will and J.

Aron has agreed in the Electricity Sale and Service Agreement to (i) negotiate in good faith with one another and exercise Commercially Reasonable Efforts to agree upon an Assignment Schedule, with the initial draft of such Assignment Schedule to be developed by J. Aron, and (ii) negotiate in good faith with one another and the APC Party regarding an Assignment Agreement, in each case related to the proposed assignment. If such Assignment Schedule and Assignment Agreement are agreed to by the representative parties thereto, the applicable parties will execute such Assignment Agreement and Assignment Schedule to be effective upon the assignment of the Assigned Rights and Obligations from Purchaser to J. Aron pursuant to the Assignment Agreement. J. Aron will act in good faith in considering proposed assignments that meet the criteria set forth in this Exhibit F, in accordance with the provisions set forth in the Electricity Sale and Service Agreement. For the avoidance of doubt, Purchaser acknowledges that J. Aron will not be required to execute any Assignment Agreement or Assignment Schedule, or otherwise accept any Assigned Rights and Obligations unless the APC Party (i) satisfies J. Aron’s internal requirements as they relate to “know your customer” rules, policies and procedures, anti-money laundering rules and regulations, Dodd-Frank Act, Commodity Exchange Act, Patriot Act and similar rules, regulations, requirements and corresponding policies, (ii) is organized in the United States, and (iii) satisfies all other requirements in Section 1 of this Exhibit F.

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3 3. Assignment Schedule. In connection with each assignment, an “Assignment Schedule” will be prepared in the form attached hereto as Annex I (with such changes as agreed by the Parties in their sole discretion), must be executed by Purchaser, Issuer and J. Aron, and must include each of the following:

3.1. The term of such Assigned Rights and Obligations (an “Assignment Period”) shall have the meaning specified in each applicable Assignment Agreement and shall (i) end not later than (a) the end of the delivery period under the Assignable Power Contract and (b) the end of the Delivery Period under this Agreement, (ii) not commence any earlier than sixty (60) days after Purchaser’s original notice under Section 2.1 above, and (iii) have a primary term that is not less than 18 Months in duration (provided, for the avoidance of doubt, the primary term references the term of the applicable Assignment Period and not the term of the Assignable Power Contract).

3.2. If the Assignable Power Contract is unit-contingent or for an as-generated product, then a description of the Applicable Project.

3.3. The “Assigned Prepay Quantity” means, for each Month of an Assignment Period and each Assignment Agreement, a quantity of Energy agreed upon by J. Aron, Issuer and Purchaser, which Assigned Prepay Quantity, if the Assignable Power Contract is unit contingent or for an as-generated Product, shall not exceed an amount that J. Aron has determined with a high degree of certainty that the Applicable Project will be able to generate in each Month during the Assignment Period; provided that the Assigned Prepay Quantity for each Month may not exceed the limit expressed in the proviso to Section 3.4 below. For the avoidance of doubt, the Assigned Rights and Obligations will include all of Purchaser’s rights to receive Energy under the Assignable Power Contract even if such rights to receive Energy may exceed the Assigned Prepay Quantity.

3.4. The reduction in Base Quantity for each Delivery Hour during an Assignment Period after giving effect to an Assignment Agreement (each, a “Base Quantity Reduction”) shall be calculated in accordance with this Section 3.4. For the Initial Assignment Periods, the Base Quantity Reductions have been calculated as follows: the Base Quantity Reduction for each Delivery Hour of the Initial Assignment Periods equal (i) the Assigned Prepay Quantity for each such Delivery Hour (which will be determined by dividing the Assigned Prepay Quantity for the applicable Month by the number of Delivery Hours in such Month), multiplied by (ii) the result of (A) the APC Contract Price applicable for such Hour, divided by (B) the [NOTE: To list the result of the following formula as determined at pricing: Front End Fixed Price for Base Quantities + (Active Swap Fee – Standby Swap Fee).]. For any Assignment Period other than the Initial Assignment Periods, the Base Quantity Reduction for each Delivery Hour of the relevant Assignment Period shall equal (i) the Assigned Prepay Quantity for each such Delivery Hour (which will be determined by dividing the Assigned Prepay Quantity for the applicable Month by the number of Delivery Hours in such Month), multiplied by (ii) the result of (A) Fixed Price for Assigned Prepay Quantities outside of the Initial Assignment Periods divided by (B) the Fixed Price for Base Quantities; provided that if the Base Quantity Reduction for any Delivery Hour would result in a Base Quantity of less than zero, then the Assigned Prepay Quantity for such Delivery Hour will be reduced to the closest whole MWh such that the Base Quantity is not reduced below zero.

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4 3.5. Except for the Assignment Agreements for the Initial Assignment Periods, the APC Contract Price under the relevant Assignment Agreement shall be the Day-Ahead Average Price, unless Issuer, Purchaser and J. Aron agree to appropriate changes to the relevant documents to accommodate a different price.

3.6. The Assigned Delivery Point for all Assigned Energy.

3.7. The Assigned Product included in the Assigned Rights and Obligations, which Assigned Product may not include any Product other than (a) Energy, (b) associated RECs, and (c) other product included within the sale of Energy and not separately delivered from Energy, provided that the APC Contract Price must be inclusive of any amounts due in respect of all Assigned Product, provided furthermore that Assigned Product may not in any case include capacity.

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5 ASSIGNMENT SCHEDULE
Assigned Product: [____]
Assigned Delivery Point: [____]
Assigned Prepay Quantity: As set forth in Appendix 2; provided that (i) all Assigned Products shall be delivered pursuant to the Limited Assignment Agreement during the Assignment Period as provided in Appendix 1 and (ii) the Assigned Prepay Quantity is defined for the convenience of PPA Buyer and J. Aron and shall have no impact on the obligations of the Parties under the Limited Assignment Agreement.

APC Contract Price: $[____]
Assignment Period: [____]

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1 FORM OF LIMITED ASSIGNMENT AGREEMENT
NOTE: Purchaser may include the form included in this Annex II as an exhibit to any PPA executed by Purchaser and include the following or similar language in the PPA: “[Seller] agrees that [Buyer] may assign a portion of its rights and obligations under this Agreement to J. Aron & Company LLC (“J. Aron”) at any time upon not less than [___] days’ notice by delivering a written request for such assignment, which request must include a proposed assignment agreement in the form attached hereto as [Exhibit ___], with the blanks in such form completed in [Buyer’s] sole discretion. Provided that [Buyer] delivers a proposed assignment agreement complying with the previous sentence, [Seller] agrees to (i) comply with J. Aron’s reasonable requests for know-your-customer and similar account opening information and documentation with respect to [Seller], including but not limited to information related to forecasted generation, credit rating, and compliance with anti-money laundering rules, the Dodd-Frank Act, the Commodity Exchange Act, the Patriot Act and similar rules, regulations, requirements and corresponding policies; and (ii) promptly execute such assignment agreement and implement such assignment as contemplated thereby, subject only to the countersignature of J. Aron and Company, LLC and [Buyer].”

LIMITED ASSIGNMENT AGREEMENT
This Limited Assignment Agreement (this “Assignment Agreement” or “Agreement”) is entered into as of [____], by and among [____], a [____] (“PPA Seller”), Clean Power Alliance of Southern California, a California joint powers authority (“PPA Buyer”), and J.

Aron & Company LLC, a New York limited liability company (“J. Aron”), and relates to that certain power purchase agreement (the “PPA”) between PPA Buyer and PPA Seller as described on Appendix 1. Unless the context otherwise specifies or requires, capitalized terms used but not defined in this Agreement have the meanings set forth in the PPA.

In consideration of the premises above and the mutual covenants and agreements herein set forth, PPA Seller, PPA Buyer and J. Aron (the “Parties” hereto; each is a “Party”) agree as follows:

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2 consistent with Section 10 hereof). To the extent J. Aron fails to pay the Delivered Product Payment Obligation by the due date for payment set forth in the PPA, notwithstanding anything in this Agreement to the contrary, PPA Buyer agrees that it shall have the option to make such payment and that it will be an Event of Default pursuant to Section [__] if PPA Buyer does not make such payment within five (5) Business Days of receiving Notice of such non-payment from PPA Seller, in which case PPA Buyer will exercise its reimbursement claim pursuant to Section 6.5 of the Clean Energy Purchase Contract, dated as of [____], by and between PPA Buyer and California Community Choice Financing Authority (the “Clean Energy Purchase Contract”).
(c) J. Aron hereby accepts and PPA Seller hereby consents and agrees to the assignment, transfer, conveyance and delegation described in clauses (a) and (b) above. (d) All scheduling of Assigned Products and other communications related to the PPA shall take place pursuant to the terms of the PPA; provided that (i) title to Assigned Product will pass from PPA Seller to J. Aron upon delivery by PPA Seller of Assigned Product in accordance with the PPA; (ii) PPA Buyer will provide copies to J. Aron of any Notice of a Force Majeure Event or Event of Default or default, breach or other occurrence that, if not cured within the applicable grace period, could result in an Event of Default contemporaneously upon delivery thereof to PPA Seller and promptly after receipt thereof from PPA Seller; (iii) PPA Seller will provide copies to J. Aron of annual forecasts of Energy and monthly forecasts of available capacity and Energy provided pursuant to Section [__] of the PPA; (iv) PPA Seller will provide copies to J. Aron of all invoices and supporting data provided to PPA Buyer pursuant to Section [__], provided that any payment adjustments or subsequent reconciliations occurring after the date that is 10 days prior to the payment due date for a monthly invoice, including pursuant to Section [__], will be resolved solely between PPA Buyer and PPA Seller and therefore PPA Seller will not be obligated to deliver copies of any communications relating thereto to J. Aron; and (v) PPA Buyer and PPA Seller, as applicable, will provide copies to J. Aron of any other information reasonably requested by J. Aron relating to Assigned Products.
(e) PPA Seller acknowledges that (i) J. Aron intends to immediately transfer title to any Assigned Products received from PPA Seller through one or more intermediaries such that all Assigned Products will be re-delivered to PPA Buyer; and (ii) in the event that PPA Buyer fails to pay the relevant intermediary entity for any such Assigned Products, the receivables owed by PPA Buyer for such Assigned Products (“PPA Buyer Receivables”) may be transferred to J. Aron. To the extent any such PPA Buyer Receivables are transferred to J. Aron, J. Aron may transfer such PPA Buyer Receivables to PPA Seller and apply the face amount thereof as a reduction to any Delivered Product Payment Obligation. Thereafter, PPA Seller shall be entitled to pursue collection on such PPA Buyer Receivables directly against PPA Buyer. (f) On or before the commencement of the Assignment Period, The Goldman Sachs Group (“Guarantor”), Inc. will issue, in favor of PPA Seller, a guaranty of J. Aron’s payment obligations under this Assignment Agreement substantially in the form of Appendix 3 attached hereto (“Guaranty”).
(g) Notwithstanding any other provision of this Agreement, PPA Buyer shall be entitled to retain for its own account all CAISO revenues associated with delivery of the Assigned Product to CAISO, including where PPA Buyer is acting as Scheduling Coordinator for the Facility (as defined in the PPA) and through scheduling of ISTs. Nothing in this

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3 Agreement modifies or amends any rights or obligations of PPA Buyer and PPA Seller under the PPA with respect to CAISO revenues and costs. As used in this clause (g), the following terms have the meanings specified below.
“CAISO” means California Independent System Operator or its successor. “CAISO Tariff” means CAISO’s Federal Energy Regulatory Commission approved tariff, as modified, amended or supplemented from time to time. “Inter-SC Trade” or “IST” has the meaning set forth in the CAISO Tariff. “Scheduling Coordinator” 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.
(h) The Assigned Prepay Quantity set forth in Appendix 2 relates to obligations by and between J. Aron and PPA Buyer and has no impact on PPA Seller’s rights and obligations under the PPA.

2. Assignment Early Termination.
(a) The Assignment Period may be terminated early upon the occurrence of any of the following:
(1) delivery of a written notice of termination specifying a termination date by either J. Aron or PPA Buyer to each of the other Parties;
(2) delivery of a written notice of termination specifying a termination date by PPA Seller to each of J. Aron and PPA Buyer following J. Aron’s failure to pay when due any amounts owed to PPA Seller in respect of any Delivered Product Payment Obligation and such payment is not made by J. Aron within five (5) business days following receipt by J. Aron and PPA Buyer of written notice; (3) delivery of a written notice by PPA Seller if any of the events described in the definition of Bankrupt in the PPA occurs with respect to J. Aron; or (4) delivery of a written notice by J. Aron if any of the events described in in the definition of Bankrupt in the PPA occurs with respect to PPA Seller. (b) The Assignment Period will end at the end of last delivery hour on the date specified in the termination notice provided pursuant to Section 2(a), which date shall not be earlier than the end of the last day of the calendar month in which such notice is delivered if termination is pursuant to clause 2(a)(1) or 2(a)(2) above. All Assigned Rights and Obligations shall revert from J. Aron to PPA Buyer upon the early termination of the Assignment Period, provided that (i) J. Aron shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to J. Aron prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period (c) The Assignment Period will automatically terminate upon the expiration or early termination of the PPA. All Assigned Rights and Obligations shall revert from J. Aron to PPA Buyer upon the expiration of or early termination of the PPA, provided that

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4 (i) J. Aron shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to J. Aron prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period.
(d) The Assignment Period will automatically terminate upon delivery by Guarantor of a notice of termination of the Guaranty. All Assigned Rights and Obligations shall revert from J. Aron to PPA Buyer upon the termination of the Assignment Period, provided that (i) J. Aron shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to J. Aron prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period.

3. Representations and Warranties. The PPA Seller and the PPA Buyer represent and warrant to J. Aron that (a) the PPA is in full force and effect; (b) no event or circumstance exists (or would exist with the passage of time or the giving of notice) that would give either of them the right to terminate the PPA or suspend performance thereunder; and (c) all of its obligations under the PPA required to be performed on or before the Assignment Period Start Date have been fulfilled.

4. Notices. Any notice, demand, or request required or authorized by this Assignment Agreement to be given by one Party to another Party shall be delivered in accordance with Article [__] of the PPA and to the addresses of each of PPA Seller and PPA Buyer specified in the PPA. PPA Buyer agrees to notify J. Aron of any updates to such notice information, including any updates provided by PPA Seller to PPA Buyer. Notices to J. Aron shall be provided to the following address, as such address may be updated by J. Aron from time to time by notice to the other Parties:

J. Aron & Company LLC
200 West Street
New York, New York 10282-2198
Email: [email protected]

5. Miscellaneous. Section [__] (Buyer’s Representations and Warranties), Article [__] (Confidential Information), Sections [__] (Severability), [__] (Counterparts), [__] (Amendments), [__] (No Agency, Partnership, Joint Venture or Lease), [__] (Mobile-Sierra), [__] (Electronic Delivery), Section [__] (Binding Effect) and [__] (No Recourse to Members of Buyer) of the PPA are incorporated by reference into this Agreement, mutatis mutandis, as if fully set forth herein.

6. U.S. Resolution Stay Provisions. The Parties hereby confirm that they are adherents to the ISDA 2018 U.S. Resolution Stay Protocol (“ISDA U.S. Stay Protocol”), the terms of the ISDA U.S. Stay Protocol are incorporated into and form a part of this Agreement, and for the purposes of such incorporation, (i) J. Aron shall be deemed to be a Regulated Entity, (ii) each of PPA Buyer and PPA Seller shall be deemed to be an Adhering Party, and (iii) this Agreement shall be deemed a Protocol Covered Agreement. In the event of any inconsistencies between this Agreement and the ISDA U.S. Stay Protocol, the ISDA U.S. Stay Protocol will prevail.

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5 7. Governing Law, Jurisdiction, Waiver of Jury Trial. (a) Governing Law. This Assignment Agreement and the rights and duties of the parties under this Assignment Agreement will be governed by and construed, enforced and performed in accordance with the laws of the State of California, without reference to any conflicts of laws provisions that would direct the application of another jurisdiction’s laws.
(b) Jurisdiction. Each party submits to the exclusive jurisdiction of the federal courts of the United States of America for the Southern District of California sitting in the city and county of Los Angeles.
(c) Waiver of Right to Trial by Jury. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to this assignment agreement.
[Remainder of Page Intentionally Blank]

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6 IN WITNESS WHEREOF, the Parties have executed this Assignment Agreement effective as of the date first set forth above.
[PPA SELLER]
By:

Name:

Title:

CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
By:

Name:

Title:

J. ARON & COMPANY LLC
By:

Name:

Title:

Execution and delivery of the foregoing Assignment Agreement is hereby approved.

CALIFORNIA COMMUNITY CHOICE FINANCING AUTHORITY
By:

Name:

Title:

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7 Appendix 1
Assigned Rights and Obligations
PPA: “PPA” means that certain Power Purchase and Sale Agreement dated [____], by and between Clean Power Alliance and [____], as amended from time to time. “Assignment Period” means the period beginning on [___________] and extending until [___________], provided that in no event shall the Assignment Period extend past the earlier of (i) the termination of the Assignment Period pursuant to Section 2 of the Assignment Agreement and (ii) the end of the Delivery Term under the PPA; provided that applicable provisions of this Agreement shall continue in effect after termination of the Assignment Period to the extent necessary to enforce or complete, duties, obligations or responsibilities of the Parties arising prior to the termination.

Assigned Product: “Assigned Products” include [____].

Further Information: PPA Seller shall continue to transfer the WREGIS Certificates associated with all Renewable Energy Credits corresponding to all Facility Energy under the PPA pursuant to Section [__] of the PPA, provided that the transferee of such WREGIS Certificates may be changed from time to time in accordance with the written instructions of both J. Aron and Clean Power Alliance upon twenty (20) Business Days’ notice, which change shall be effective as of the first day of the next calendar month, unless otherwise agreed. All Assigned Product delivered by PPA Seller to J. Aron shall be a sale made at wholesale, with J. Aron reselling all such Assigned Product.

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8 Appendix 2
Assigned Prepay Quantity
[NOTE: To be set forth in a monthly volume schedule.]

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10 Appendix 3
Form of GSG Guaranty
[Date]
NAME

ADDRESS
Attention:

Ladies and Gentlemen:

For value received, The Goldman Sachs Group, Inc. (the “Guarantor”), a corporation duly organized under the laws of the State of Delaware, hereby unconditionally guarantees the prompt and complete payment when due, whether by acceleration or otherwise, of all obligations and liabilities, whether now in existence or hereafter arising, of J. Aron & Company LLC, a subsidiary of the Guarantor and a limited liability company duly organized under the laws of the State of New York (the “Company”), to COUNTERPARTY NAME (the “Counterparty”) arising out of or under the Limited Assignment Agreement among the Company, the Counterparty and Clean Power Alliance dated as of [____]. This Guaranty is one of payment and not of collection.

The Guarantor hereby waives notice of acceptance of this Guaranty and notice of any obligation or liability to which it may apply, and waives presentment, demand for payment, protest, notice of dishonor or non-payment of any such obligation or liability, suit or the taking of other action by Counterparty against, and any other notice to, the Company, the Guarantor or others.

Counterparty may at any time and from time to time without notice to or consent of the Guarantor and without impairing or releasing the obligations of the Guarantor hereunder:
(1) agree with the Company to make any change in the terms of any obligation or liability of the Company to Counterparty, (2) take or fail to take any action of any kind in respect of any security for any obligation or liability of the Company to Counterparty, (3) exercise or refrain from exercising any rights against the Company or others, or (4) compromise or subordinate any obligation or liability of the Company to Counterparty including any security therefor. Any other suretyship defenses are hereby waived by the Guarantor.

This Guaranty shall continue in full force and effect until the opening of business on the fifth business day after Counterparty receives written notice of termination from the Guarantor. It is understood and agreed, however, that notwithstanding any such termination this Guaranty shall continue in full force and effect with respect to the obligations and liabilities set forth above which shall have been incurred prior to such termination.

The Guarantor may not assign its rights nor delegate its obligations under this Guaranty, in whole or in part, without prior written consent of the Counterparty, and any purported

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11 assignment or delegation absent such consent is void, except for (i) an assignment and delegation of all of the Guarantor’s rights and obligations hereunder in whatever form the Guarantor determines may be appropriate to a partnership, corporation, trust or other organization in whatever form that succeeds to all or substantially all of the Guarantor’s assets and business and that assumes such obligations by contract, operation of law or otherwise, and (ii) the Guarantor may transfer this Guaranty or any interest or obligation of the Guarantor in or under this Guaranty, or any property securing this Guaranty, to another entity as transferee as part of the resolution, restructuring or reorganization of the Guarantor upon or following the Guarantor becoming subject to a receivership, insolvency, liquidation, resolution or similar proceeding. Upon any such delegation and assumption or transfer of obligations, the Guarantor shall be relieved of and fully discharged from all obligations hereunder, whether such obligations arose before or after such delegation and assumption or transfer.

THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN

ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.

GUARANTOR AGREES TO THE EXCLUSIVE JURISDICTION OF COURTS

LOCATED IN THE STATE OF NEW YORK, UNITED STATES OF AMERICA, OVER ANY DISPUTES ARISING UNDER OR RELATING TO THIS GUARANTY.

In the event the Guarantor becomes subject to a proceeding under the Federal Deposit Insurance Act or Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together, the "U.S. Special Resolution Regimes"), the transfer of this Guaranty, and any interest and obligation in or under, and any property securing, this Guaranty, from the Guarantor will be effective to the same extent as the transfer would be effective under such U.S. Special Resolution Regime if this Guaranty, and any interest and obligation in or under this Guaranty, were governed by the laws of the United States or a state of the United States. In the event the Company or the Guarantor, or any of their affiliates, becomes subject to a U.S. Special Resolution Regime, default rights against the Company or the Guarantor with respect to this Guaranty are permitted to be exercised to no greater extent than such default rights could be exercised under such U.S. Special Resolution Regime if this Guaranty was governed by the laws of the United States or a state of the United States.

Very truly yours,
THE GOLDMAN SACHS GROUP, INC.

By: _______
Authorized Officer

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G-1

EXHIBIT G

COMMUNICATIONS PROTOCOL FOR BASE QUANTITIES
This Exhibit G (“Communications Protocol”) addresses the Scheduling of Base Quantities to be delivered and received at the Base Delivery Point. It is intended to be attached to both the Master Power Supply Agreement and the Clean Energy Purchase Contract, each as defined below.

1. ADDITIONAL DEFINED TERMS
In addition to the terms defined in Article I of this Agreement, the following terms used in this Communications Protocol shall have the following meanings:

1.1. “Agreement” means (i) when this Communications Protocol is attached to the Master Power Supply Agreement, the Master Power Supply Agreement and (ii) when this Communications Protocol is attached to the Clean Energy Purchase Contract, the Clean Energy Purchase Contract.

1.2. “Clean Energy Purchase Contract” means that certain Clean Energy Purchase Contract dated as of [_____], 2024 by and between Issuer and Project Participant.

1.3. “Delivery Scheduling Entity” means Prepay LLC or a Person designated by Prepay LLC, as set forth in Attachment 4 hereto or in a subsequent written notice to Issuer and the Project Participant.

1.4. “Issuer” means California Community Choice Financing Authority, a joint powers authority and a public entity of the State of California established pursuant to the provisions of the Joint Exercise of Powers Act (Article 1, Chapter 5, Division 7, Title 1, Section 6500 et seq. of the California Government Code, as amended).

1.5. “Master Power Supply Agreement” means that certain Master Power Supply Agreement dated as of [_____], 2024 by and between Prepay LLC and Issuer that is specified as relating to the Clean Energy Purchase Contract with Project Participant.

1.6. “Operational Nomination” has the meaning specified in Section 4.1.1.

1.7. “Prepay LLC” means Aron Energy Prepay 41 LLC, a Delaware limited liability company.

1.8. “Project Participant” means Clean Power Alliance of Southern California, a California joint powers authority.

1.9. “Receipt Scheduling Entity” for any Delivery Point means the Project Participant, unless the Clean Energy Purchase Contract has been suspended or terminated, in which case the

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G-2
Receipt Scheduling Entity will be Issuer or a Person designated by Issuer for such Delivery Point in accordance with this Communications Protocol.

1.10. “Relevant Contract” means the Master Power Supply Agreement and the Clean Energy Purchase Contract.

1.11. “Relevant Party” means Issuer, Prepay LLC or the Project Participant.

1.12. “Relevant Third Party” means any Person that is (i) a Transmission Provider that will or is intended to transport Product to be delivered or received under the Agreement, (ii) an independent system operator or control area that coordinates the Scheduling of Product at the Base Delivery Point, (iii) Scheduling receipt of Product by Issuer or for the account of Issuer to the extent such Product has been delivered to Issuer or for the account of Issuer under the Master Power Supply Agreement, and (iv) delivering Product to Issuer or for the account of Issuer to the extent such Product is intended to be re-delivered ultimately to the Project Participant or for the account of the Project Participant under the Clean Energy Purchase Contract.

1.13. “Scheduling Entities” means the Receipt Scheduling Entity and the Delivery Scheduling Entity.

2. AGREEMENTS OF RELEVANT PARTIES
Each Relevant Party that is a party to Relevant Contract to which this Communications Protocol is attached acknowledges that this Communications Protocol sets forth certain obligations that may be delegated to other Relevant Parties that are not parties to such Relevant Contracts. In connection therewith:

2.1 Reliance on Scheduling Entity. Each Relevant Party shall be entitled to rely exclusively on any communications or directions given by a Delivery Scheduling Entity or Receipt Scheduling Entity, in each case to the extent such communications are permitted hereunder.

2.2 Performance of Communications Protocol. Each Relevant Party to a Relevant Contract shall cause its counterparty to each other Relevant Contract to comply with the provisions of this Communications Protocol as the provisions apply to such counterparty to the extent required to perform the obligations of the Relevant Party under the Relevant Contract.

2.3 Third Party Beneficiaries. To the extent this Communications Protocol purports to give any Relevant Party (a “Beneficiary”) rights vis-à-vis any other Relevant Party (a “Burdened Party”) with whom such Beneficiary does not have privity under a Relevant Contract, such Beneficiary shall be deemed to be a third party beneficiary of each Relevant Contract to which the Burdened Party is a party to the

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G-3
extent necessary or convenient to enforce the obligations of the Burdened Party under this Communications Protocol.

2.4 Amendment of Relevant Contracts. No Relevant Party shall amend, waive or otherwise modify any provision of any Relevant Contract to which it is a party without the consent of each other Relevant Party whose rights or obligations would be materially and adversely affected by such amendment, waiver or modification as it relates to this Communications Protocol.

2.5 Amendment of Communications Protocol. No Relevant Party shall amend any provision of this Communications Protocol in a Relevant Contract without the consent of each other Relevant Party.

2.6 Waiver of Communications Protocol. No Relevant Party shall waive any provision of this Communications Protocol in a Relevant Contract without the consent of each other Relevant Party whose rights or obligations would be materially and adversely affected by such waiver.
3 DESIGNATION AND REPLACEMENT OF SCHEDULING ENTITIES

3.1 Designation of Delivery Scheduling Entity. Prepay LLC may designate a new Delivery Scheduling Entity upon thirty (30) days written notice to Issuer substantially in the form of Attachment 4. Any Scheduling Entity designated in accordance with this Section 3.1 shall commence service at the beginning of a Month, unless mutually agreed in writing between Prepay LLC and Issuer.

3.2 Assumption by Receipt Scheduling Entity. If any Delivery Scheduling Entity (other than Prepay LLC) persistently fails to perform its obligations as contemplated under this Communications Protocol, the Receipt Scheduling Entity may, by notice to Prepay LLC, require that Prepay LLC deal directly with the Receipt Scheduling Entity until a new Delivery Scheduling Entity is designated in accordance with this Section 3.1.

3.3 Scheduling Coordinator. Project Participant shall designate a scheduling coordinator for the purposes of accepting Base Product delivery at the Base Delivery Point through the scheduling of ISTs.
4 INFORMATION EXCHANGE AND COMMUNICATION BETWEEN ISSUER AND

PREPAY LLC

4.1 Communication of Operational Nomination Details.

4.1.1 Not later than three Days prior to each Day during which Base Product is required to be delivered under the Agreement, the Receipt Scheduling Entity for such Delivery Point may deliver an operational nomination in

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G-4
writing (the “Operational Nomination”) indicating any inability of a Project Participant to receive all of its Base Quantities during such Day, which Operational Nomination shall be without prejudice to any party’s rights under the Relevant Contracts for failure to receive Base Quantities. If no changes to Base Quantities are so submitted, the Operational Nomination shall be deemed to nominate the full Base Quantities required to be delivered on a Day.

4.1.2 Not later than three Days prior to each Day during which Base Product is required to be delivered under the Agreement, the Delivery Scheduling Entity for such Delivery Point may revise the Operational Nomination to indicate any inability of Prepay LLC to deliver all Base Quantities during such Day, which revised Operational Nomination shall be without prejudice to any party’s rights under the Relevant Contracts for failure to deliver Base Quantities.

4.2 Event-specific Communications.

4.2.1 Remarketing Notices issued by Issuer under the Master Power Supply Agreement shall be substantially in the form of Attachment 2 hereto. Any such notices to remarket must be delivered directly to Prepay LLC and the Delivery Scheduling Entity.

4.2.2 Each Scheduling Entity shall notify Prepay LLC, Issuer and the Project Participant as soon as practicable in the event of: (i) any deficiencies in Scheduling related to such Scheduling Entity; (ii) any deficiencies in Scheduling related to the other such Scheduling Entity; and (iii) any issues with Relevant Third Parties that that would reasonably be expected to create issues related to Product Scheduling under the Relevant Contract. 5 ACCESS AND INFORMATION

5.1 Verification of Product Scheduled. In addition to the delivery of and access to the records and data required pursuant to the Agreement, each Relevant Party agrees to provide relevant records from itself and other Relevant Third Parties necessary to document and verify Product Scheduled within and after the Month as needed to facilitate the Relevant Contracts.

5.2 View Rights. To the extent requested by a Delivery Scheduling Entity or Prepay LLC, the Receipt Scheduling Entities will use Commercially Reasonable Efforts to cooperate with the Delivery Scheduling Entity and Prepay LLC to ensure that Delivery Scheduling Entity and Prepay LLC has sufficient agency view rights from each such Scheduling Entity to allow Prepay LLC to view Base Product Scheduling at the Base Delivery Point.

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G-5
6 NOTICES
Any notice, demand, request or other communication required or authorized by this Communications Protocol to be given by one Relevant Party to another Relevant Party shall be in writing, except as otherwise expressly provided herein. It shall either be sent by facsimile (with receipt confirmed by telephone and electronic transmittal receipt), courier, or personally delivered (including overnight delivery service) to the representative of the other Relevant Party designated in Attachment 1 hereto. Any such notice, demand, or request shall be deemed to be given (i) when sent by facsimile confirmed by telephone and electronic transmittal receipt or (ii) when actually received if delivered by courier or personal delivery (including overnight delivery service).

Each Relevant Party shall have the right, upon written notice to the other Relevant Parties, to change its address at any time, and to designate that copies of all such notices be directed to another Person at another address.
7 NO IMPACT ON CONTRACTUAL OBLIGATIONS
Except as expressly set forth herein or in an applicable Relevant Contract, nothing in this Communications Protocol nor any Relevant Party’s actions or inactions hereunder shall have any impact on any Relevant Party’s rights or obligations under the Relevant Contracts.
8 ATTACHMENTS
Attachment 1 - Key Personnel
Attachment 2 - Remarketing Notice Form
Attachment 3 - Designation of Alternate Base Delivery Points Form Attachment 4 - Designation of Scheduling Entities Form

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G-6
Attachment 1
Key Personnel
Prepay LLC Marketing Personnel:

Kenan Arkan
Sales and Trading
Telephone: (212) 357-2542
[email protected]
Prepay LLC Scheduling Personnel:

Scheduling Team
Email: [email protected]
Direct Phone: (212) 902-8148
Fax: 212.493.9847
Carly Norlander
ICE Chat: cnorlander1
Email: [email protected]
Direct Phone: (403) 233-9299
Fax: (212) 493-9847
Other Prepay LLC Personnel:

Eric Hudson
Telephone: (212) 855-0880
[email protected]
Patricia Hazel
Telephone: (212) 855-0880
[email protected]
Andres E. Aguila
Telephone: (212) 855-6008
Fax: (212) 291-2124
[email protected]
Issuer Personnel:
[email protected] and [email protected]
Project Participant Personnel:
[email protected]

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G-7
Attachment 2
Remarketing Notice Form
Date: [_____________]
To: Prepay LLC Scheduling
From: Project Participant Scheduling
This notice is being delivered pursuant to that certain Master Power Supply Agreement (the “Master Power Supply Agreement”) dated as of [_____], 2024 by and between Aron Energy Prepay 41 LLC (“Prepay LLC”) and California Community Choice Financing Authority, a joint powers authority and a public entity of the State of California established pursuant to the provisions of the Joint Exercise of Powers Act (Article 1, Chapter 5, Division 7, Title 1, Section 6500 et seq. of the California Government Code, as amended) (“Issuer”) and relates to the Clean Energy Purchase Contract (the “Clean Energy Purchase Contract”) dated as of [_____], 2024 by and between Issuer and Clean Power Alliance of Southern California (“Project Participant”).

Capitalized terms not defined herein are defined in the Master Power Supply Agreement.

Check the box to indicate type of Remarketing Notice (The numbers of the Primary (“P”) and Alternate (“A”) Delivery Points below correspond to those same Primary Delivery Points and Alternate Delivery Points set forth in Exhibit A-1 of the Agreement, or as may be designated by the Parties from time to time):
 Monthly Remarketing Notice:

Month(s) for which remarketing is requested: _____________________, 20__ through _______________________, 20__.

Pursuant to Section 3(b) of Exhibit C of the Clean Energy Purchase Contract, Project Participant requests that Prepay LLC remarket in such Month(s) the following Base Quantities of Product required to be delivered at the following Delivery Points:

Delivery Point (P/A, #) MWh/ Hour for each Hour in the Month  Daily Remarketing Notice:

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Hours for which remarketing is requested: _____________________, 20__ through _______________________, 20__.

Pursuant to Section 3(c) of Exhibit C of the Clean Energy Purchase Contract, Project Participant requests that Prepay LLC remarket for such Hours the following Base Quantities of Product required to be delivered at the following Delivery Point:

Delivery Point (P/A, #) MWh/Hour
Submitted by Project Participant:

CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
By:_____________________
Name:

Title:

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G-9
Attachment 3
Designation of Alternate Base Delivery Points Form
This designation is delivered pursuant to that certain Master Power Supply Agreement (the “Master Power Supply Agreement”) dated as of [_____], 2024 by and between Aron Energy Prepay 41 LLC (“Prepay LLC”) and California Community Choice Financing Authority, a joint powers authority and a public entity of the State of California established pursuant to the provisions of the Joint Exercise of Powers Act (Article 1, Chapter 5, Division 7, Title 1, Section 6500 et seq. of the California Government Code, as amended) (“Issuer”) and the Clean Energy Purchase Contract (the “Clean Energy Purchase Contract”) dated as of [_____], 2024 by and between Issuer and Clean Power Alliance of Southern California (“Project Participant”). Capitalized terms not defined herein are defined in the Master Power Supply Agreement and the Clean Energy Purchase Contract. [Project Participant and/or Issuer] hereby proposes the following Alternate Delivery Points for deliveries of Energy that would otherwise be made at the specified Primary Delivery Point:

ALTERNATE

DELIVERY POINT

PRIMARY

DELIVERY POINT

AFFECTED

COMMODITY

REFERENCE PRICE

PRICING POINT

ADDITIONAL

RESTRICTIONS
1 [e.g.
2 Vol. Limit:____
3 Time Limit:]___
(etc.)
Unless otherwise agreed among Prepay LLC, Issuer and Project Participant, an Alternate Delivery Point shall utilize the same Commodity Reference Price as the Primary Delivery Point it replaces or otherwise affects. Project Participant is not required to agree or accept this designation (or any change to the Commodity Reference Price) if it is being submitted by Issuer pursuant to the Master Power Supply Agreement only.

AGREED AND

ACCEPTED BY PREPAY
LLC:
(if required) AGREED TO

AND ACCEPTED BY

PROJECT
PARTICIPANT:
(if required) AGREED TO

AND ACCEPTED BY
ISSUER:

By:

Name:

Title:

By:

Name:

Title:

By:

Name:

Title:

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Attachment 4
Designation of Scheduling Entities Form
This designation is being delivered pursuant to that certain Master Power Supply Agreement (the “Master Power Supply Agreement”) dated as of [_____], 2024 by and between J. Aron Energy Prepay 41 LLC (“Prepay LLC”) and California Community Choice Financing Authority, a joint powers authority and a public entity of the State of California established pursuant to the provisions of the Joint Exercise of Powers Act (Article 1, Chapter 5, Division 7, Title 1, Section 6500 et seq. of the California Government Code, as amended) (“Issuer”) and relates to the Clean Energy Purchase Contract (the “Clean Energy Purchase Contract”) dated as of [_____], 2024 by and between Issuer and Clean Power Alliance of Southern California (“Project Participant”).

Capitalized terms not defined herein are defined in the Master Power Supply Agreement and Clean Energy Purchase Contract.
[If delivered by Project Participant:

Receipt Scheduling Entity:

Delivery Point: ________________________
Effective Date(s) of Service of Receipt Scheduling Entity (full Months only):
________________, ______ to ________________, ______, if applicable Notice Information for Receipt Scheduling Entity:

Delivery Scheduling Entity:

Delivery Point: ________________________
Effective Date(s) of Service of Delivery Scheduling Entity (full Months only):
________________, ______ to ________________, ______, if applicable

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G-11
Notice Information for Delivery Scheduling Entity:

Name: ______________________________
Attention: ______________________________
Address: ______________________________
______________________________
Telephone: ______________________________
Fax: ______________________________]
Submitted by:
[Project Participant or Prepay LLC]
By: _____________________________
Name: _____________________________
Title: _____________________________

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H-1

EXHIBIT H

PRICING AND OTHER TERMS
Administrative Fee: $0.50 perMWh
Delivery Period: The period beginning on and including [____] and ending at the end of the Day before [____]; provided that the Delivery Period shall end immediately upon termination of deliveries of Product under the Master Power Supply Agreement pursuant to Article XVII thereof or early termination of the Clean Energy Purchase Contract pursuant to Article XVII hereof.

Initial Reset Period: The period beginning at the beginning of the Day on [____] and ending at the end of the last Day of the Month preceding the last Month of the Initial Interest Rate Period (as defined in the Trust Indenture).

Minimum Discount
Percentage:

An Available Discount Percentage as determined under the Re-Pricing Agreement of [___]%.

Monthly Discount Percentage: For each Month of the Initial Reset Period, [____]%, and for each Month of any other Reset Period, the percentage
determined by the Calculation Agent as defined in and
pursuant to the Re-Pricing Agreement, exclusive of any
Annual Refund.

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EXHIBIT I

FORM OF CLOSING CERTIFICATE

CLOSING CERTIFICATE OF PURCHASER
__________, 2024
Re: California Community Choice Financing Authority
[Clean Energy Project Revenue Bonds]
The undersigned _____________________________ of Clean Power Alliance of Southern California (“Purchaser”) hereby certifies as follows in connection with the Power Supply Contract dated as of __________, 2024 (the “Agreement”) between the Purchaser and California Community Choice Financing Authority (“Issuer”) and the issuance and sale by Issuer of the above-referenced bonds (the “Bonds”) (capitalized terms used and not defined herein shall have the meanings given to them in the Agreement):

1. Purchaser is a joint powers authority, duly organized and validly existing and in good standing under the laws of the State of California (the “State”), and has the corporate power and authority to enter into and perform its obligations under the Agreement.

2. By all necessary official action on its part, Purchaser has duly authorized and approved the execution and delivery of, and the performance by Purchaser of the obligations on its part contained in, the Agreement, and such authorization and approval has not been amended, supplemented, rescinded or modified in any respect since the date thereof.

3. The Agreement constitutes the legal, valid and binding obligation of Purchaser.

4. The authorization, execution and delivery of the Agreement and compliance with the provisions on Purchaser's part contained therein (a) will not conflict with or constitute a breach of or default under (i) any instrument relating to the organization, existence or operation of Purchaser, (ii) any ruling, regulation, ordinance, judgment, order or decree to which Purchaser (or any of its officers in their respective capacities as such) is subject, or (iii) any provision of the laws of the State relating to Purchaser and its affairs, and (b) will not result in, or require the creation or imposition of, any lien on any of the properties or revenues of Purchaser pursuant to any of the foregoing.

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5 Purchaser is not in breach of or default under any applicable constitutional provision, law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which Purchaser is a party or to which Purchaser or any of its property or assets are subject, and no event has occurred and is continuing which constitutes, or with the passage of time or the giving of notice, or both, would constitute, a default or event of default by Purchaser under any of the foregoing.

6. Payments to be made by Purchaser under the Agreement shall constitute operating expenses of Purchaser's power supply system payable solely from the revenues and other available funds of Purchaser's power supply system as a cost of purchased electricity.

7. No litigation, proceeding or tax challenge is pending or, to its knowledge, threatened, against Purchaser in any court or administrative body which would (a) contest the right of the officials of Purchaser to hold and exercise their respective positions, (b) contest the due organization and valid existence of Purchaser, (c) contest the validity, due authorization and execution of the Agreement, or (d) attempt to limit, enjoin or otherwise restrict or prevent Purchaser from executing, delivering and performing the Agreement, nor to the knowledge of Purchaser is there any basis therefor.

8. All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by Purchaser of its obligations under the Agreement have been duly obtained.

9. The representations and warranties of Purchaser contained in the Agreement were true, complete and correct on and as of the date thereof and are true, complete and correct on and as of the date hereof.

10. The statements and information with respect to Purchaser contained in the Preliminary Official Statement dated [____], 2024 and the Official Statement dated [_____], 2024 with respect to the Bonds, including Appendix A thereto (together, the “Official Statement”), fairly and accurately describe and summarize the financial and operating position of Purchaser for the periods shown therein, and such statements and information did not as of the respective dates of the Official Statement and do not as of the date hereof contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make such statements and information, in the light of the circumstances under which they were made, not misleading.

11. To Purchaser's knowledge, no event affecting Purchaser has occurred since the date of the Official Statement which should be disclosed therein in order to make the statements and

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I-1
information with respect to Purchaser contained therein, in light of the circumstances under which they were made, not misleading in any material respect.

IN WITNESS WHEREOF the undersigned has executed this Certificate on and as of the date first written above.

CLEAN POWER ALLIANCE OF SOUTHERN

CALIFORNIA
By
Name:

Title:

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1 CLEAN ENERGY PROJECT OPERATIONAL SERVICES AGREEMENT
This Clean Energy Project Operational Services Agreement (this “Agreement”) is made and entered into as of [________], 2024, by and between California Community Choice Financing Authority (“CCCFA”) and Clean Power Alliance of Southern California (“CPA”) with respect to the Clean Energy Project (defined below). CCCFA and CPA may be referred to individually herein as a “Party” and collectively as the “Parties”.

W I T N E S S E T H:

WHEREAS, CPA is a “community choice aggregator” under the Public Utilities Code of the State of California, as amended; and
WHEREAS, CCCFA is a joint exercise of powers authority under and pursuant to the Joint Exercise of Powers Act, constituted as Chapter 5 of Division 7 of Title 1 of the California Government Code, being Section 6500 and following, as amended (the “Joint Powers Act”), and pursuant to the Joint Powers Act a Joint Powers Agreement by and among the Members of CCCFA named therein, including CPA (as the same may be amended or supplemented from time to time in accordance with its terms, the “Joint Powers Agreement”); and
WHEREAS, CCCFA’s purpose is to assist its Members, including CPA, by undertaking the financing or refinancing of energy prepayments that can be financed with tax advantaged bonds and other obligations on behalf of one or more of the Members by, among other things, issuing or incurring bonds and entering into related contracts with Members; and
WHEREAS, CCCFA and CPA are entering into a Clean Energy Purchase Contract, dated as of [________], 2024 (as amended, restated, supplemented or otherwise modified from time to time, the “Clean Energy Purchase Contract”), pursuant to which CCCFA has agreed to supply Energy to CPA under the terms set forth therein; and
WHEREAS, in order to provide such Energy to CPA under the Clean Energy Purchase Contract, CCCFA is entering into a Master Power Supply Agreement, dated as of [_________], 2024 (as amended, restated, supplemented or otherwise modified from time to time, the “Prepaid Agreement”), between CCCFA, as buyer, and Aron Energy Prepay [__] LLC, a Delaware limited liability company, as seller (the “Prepaid Seller”), under which it will make a prepayment to the Prepaid Seller for the purchase and delivery of such Energy; and
WHEREAS, in order to meet its obligations under the Prepaid Agreement, Prepaid Seller will enter into an Electricity Purchase, Sale and Service Agreement, dated as of [________], 2024 (as amended, restated, supplemented or otherwise modified from time to time, the “ESSA”) with J. Aron & Company LLC, a New York limited liability company (“J. Aron”); and WHEREAS, the Issuer will finance the prepayment under the Prepaid Agreement and related costs by issuing its Clean Energy Project Revenue Bonds, Series 2024[__] (the “Bonds”) pursuant to a Trust Indenture, dated as of [_________], 2024 (as amended, restated, supplemented or otherwise modified from time to time, the “Trust Indenture”), between CCCFA and [__________], as trustee (together with any successor or replacement trustee under the Trust Indenture, the “Trustee”); and

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2 WHEREAS, the issuance of the Bonds by CCCFA and related undertakings of CCCFA under the Trust Indenture, the acquisition and sale of Energy and related undertakings of CCCFA under the Prepaid Agreement and the Clean Energy Purchase Contract, and the sale to CPA of such Energy and related undertakings of CPA under the Clean Energy Purchase Contract are referred to herein as the “Clean Energy Project”; and
WHEREAS, the Parties are entering into this Agreement in order to provide for the administration of certain operational matters relating to the Clean Energy Project; NOW, THEREFORE, in consideration of the premises and mutual covenants set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Section 1. Defined Terms. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Trust Indenture, the Clean Energy Purchase Contract or the Prepaid Agreement, as applicable.

Section 2. Assignment Agreements. As contemplated by the ESSA, the Prepaid Agreement and the Clean Energy Purchase Contract, CPA will enter into the Initial Assignment Agreements and may from time to time enter into additional Assignment Agreements to provide for the assignment of Assigned Product for delivery to CCCFA under the Prepaid Agreement and to CPA under the Clean Energy Purchase Contract. With respect to any Assignment Agreement, the Parties acknowledge and agree as follows:
(a) as of the date of this Agreement, CPA has entered into the Initial Assignment Agreements specified in the Clean Energy Purchase Contract; (b) subject to the terms of the applicable Assignment Letter Agreement, CPA may from time to time enter into additional Assignment Agreements with respect to all or a portion of the Base Quantities specified in the Clean Energy Purchase Contract; and (c) CPA shall determine in its sole discretion when and if any Assignment Agreement is entered into (subject to the consent requirements under the Clean Energy Purchase Contract) or terminated (subject to the terms of the Assignment Letter Agreement) and the underlying power purchase agreement and portion of the Base Quantities to which such Assignment Agreement relates.

Section 3. Scheduling and Delivery of Assigned Energy. Assigned Energy and any other Assigned Product delivered to CCCFA under the Prepaid Agreement shall be Scheduled by CPA for delivery to CCCFA under the Prepaid Agreement and for delivery to CPA under the Clean Energy Purchase Contract, and CCCFA shall have no responsibility for (a) any Scheduling or other operational requirements necessary for the delivery of Assigned Energy to CPA’s Assigned Delivery Point and the transfer of other Assigned Product to CPA, or (b) any accounting for under-deliveries or over-deliveries or other record-keeping requirements with respect to any Assigned Energy and other Assigned Product, all of which shall be the sole responsibility of CPA.

Section 4. Qualified Use; Remarketing of Base Quantities. Any Base Quantities required to be delivered by the Prepaid Seller are required to be remarketed by the Prepaid Seller pursuant to the Prepaid Agreement. CPA shall be responsible for any notices or other communications required from

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3 CCCFA in connection with such remarketing, as well as communications required for the Scheduling and delivery of Base Quantities under the communications protocol set forth in Exhibit G to the Prepaid Agreement and any other operational requirements related to the delivery and remarketing of Base Quantities under the Prepaid Agreement. CPA will account for any Base Quantities subsequently remarketed, including accounting for any remediation of any such remarketing sales as may be required pursuant to the Qualifying Use Requirements and the terms of the Clean Energy Purchase Contract. CPA agrees to provide to CCCFA any information reasonably requested by it in order to comply with any reporting or record-keeping requirements related to such delivery and remarketing of Base Quantities, including such information relating to compliance with the Qualifying Use Requirements, as may be required pursuant to the Prepaid Agreement or the Trust Indenture.

Section 5. Directions, Consents and Waivers. CCCFA may be requested or required from time to time to provide certain directions, consents, or waivers under the terms of the Prepaid Agreement, the Trust Indenture and the Re-pricing Agreement. Provided no event of default has occurred and is continuing with respect to CPA under the Clean Energy Purchase Contract, such direction, consent or waiver shall only be provided by CCCFA in accordance with written instructions provided by CPA.

Section 6. Re-pricing Information. CCCFA shall provide, or cause Prepaid Seller to provide, to CPA such information as is required to be provided by Prepaid Seller to CCCFA in accordance the Re-pricing Agreement at such times as are required under the Re-pricing Agreement. Provided no event of default has occurred and is continuing with respect to CPA under the Clean Energy Purchase Contract, any direction, consent or waiver requested or required to be provided by CCCFA under the Re-pricing Agreement shall only be provided by CCCFA in accordance with written instructions provided by CPA.

Section 7. Project Administration Fee; Reimbursement and Refund of Operating Expenses. (a) Under the Trust Indenture, Operating Expenses relating to the Clean Energy Project are to be paid from amounts deposited annually in the Administrative Fee Fund, which amount shall be equal to $[______] in the aggregate for each annual period ending on [________] 1 of each year (the “Administrative Fee”). If at any time the amount on deposit in the Administration Fee Fund is not sufficient to pay all such Operating Expenses as the same become due, CPA agrees to pay to the Trustee such amounts as are necessary to pay such Operating Expenses upon receipt of notice of the amount due from the Trustee or CCCFA.
(b) As soon as practicable following the end of each annual period referred to in paragraph (a), CCCFA agrees to reconcile the amounts received in respect of the Project Administration Fee for such annual period with the Operating Expenses paid or accrued for such period. In the event that, following each such reconciliation, it is determined that the amounts received in respect of the Project Administration Fee during the applicable annual period exceed Operating Expenses paid or accrued for such period, CCCFA will provide written notice thereof to CPA and include the amount of such excess in its Annual Refund to CPA under the Clean Energy Purchase Contract.

Section 8. Notices. Notices and other information to be provided by a Party to the other Party under this Agreement shall be provided in accordance with Article XVI of the Clean Energy Purchase Contract.

Section 9. Governing Law. This Agreement and the obligations of the Parties hereunder shall be governed by and determined in accordance with the laws of the State of California.

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4 Section 10. Counterparts. This Agreement may be executed and acknowledged in multiple counterparts and by the Parties in separate counterparts, each of which shall be an original and all of which shall be and constitute one and the same instrument.

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5 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first above written.

CALIFORNIA COMMUNITY CHOICE FINANCING

AUTHORITY
By: ________________________________
Name: ______________________________
Title: _______________________________

CLEAN POWER ALLIANCE OF SOUTHERN

CALIFORNIA
By: ________________________________
Name: ______________________________
Title: _______________________________

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MEMORANDUM OF UNDERSTANDING (“MOU”)
Date: , 2024
To: Garth Salisbury
Treasurer/Controller
California Community Choice Financing Authority
[email protected]
(415) 464-6037
From: Clean Power Alliance
Re: California Community Choice Financing Authority Prepay Transaction on behalf of Clean Power Alliance
Overview
The California Community Choice Financing Agency (“CCCFA” or the “Issuer”) seeks to procure a 30-year supply of energy from Aron Prepay [__] LLC, through the issuance of Clean Energy Project Revenue Bonds (the "Bonds") issued by CCCFA. CCCFA will sell all the Prepaid Energy acquired from this transaction to Clean Power Alliance of Southern California (the “Project Participant”).

Rating Agency Fees and Green Bond Opinion Fee
Rating Agency Fees and expenses (“Rating Agency Fees”) are paid from the proceeds of the Bonds. However, unlike most of the other fees associated with the issuance of the Bonds, payment of the Rating Agency Fees is not contingent upon the issuance of the Bonds.

In the event the Bonds are not issued, and there remains a Rating Agency Fee payable to Moody’s Investors Service (the “Rating Agency” or “Moody’s”), the Project Participant agrees that it will be liable for the costs and make direct payment to Moody’s for such fees.

In the event a Green Bond Second Opinion is obtained, and the Bonds are not issued, the fee payable to the Green Bond Second Opinion provider (the “Green Bond Fees”) shall be incurred by the Project Participant and in such event, to the extent the Green Bond Fees were already paid by CCCFA, the Project Participant agrees to reimburse CCCFA.

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Sincerely,

CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
By:

David McNeil
Chief Financial Officer

ACCEPTED AND AGREED

CALIFORNIA COMMUNITY CHOICE FINANCING AUTHORITY
By:

Garth Salisbury
Treasurer/Controller
Date: , 2024

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FORM OF ASSIGNMENT SCHEDULE
Assigned Product: [____]
Assigned Delivery Point: [____]
Assigned Prepay Quantity: As set forth in Appendix 2; provided that (i) all Assigned Products shall be delivered pursuant to the Limited Assignment Agreement during the Assignment Period as provided in Appendix 1 and (ii) the Assigned Prepay Quantity is defined for the convenience of PPA Buyer and J. Aron and shall have no impact on the obligations of the Parties under the Limited Assignment Agreement.

APC Contract Price: $[____]/MWh
Assignment Period: [____]

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1 FORM OF LIMITED ASSIGNMENT AGREEMENT
This Limited Assignment Agreement (this “Assignment Agreement” or “Agreement”) is entered into as of [____], by and among [____], a [____] (“PPA Seller”), Clean Power Alliance of Southern California, a California joint powers authority (“PPA Buyer”), and J.

In consideration of the premises above and the mutual covenants and agreements herein set forth, PPA Seller, PPA Buyer and J. Aron (the “Parties” hereto; each is a “Party”) agree as follows:

1. Limited Assignment and Delegation.
(a) PPA Buyer hereby assigns, transfers and conveys to J. Aron all right, title and interest in and to the rights of PPA Buyer under the PPA to receive delivery of the products described on Appendix 1 (the “Assigned Products”) during the Assignment Period (as defined in Appendix 1), as such rights may be limited or further described in the “Further Information” section on Appendix 1 (the “Assigned Product Rights”). All Assigned Products shall be delivered pursuant to the terms and conditions of this Agreement during the Assignment Period as provided in Appendix 1. All other rights of PPA Buyer under the PPA are expressly reserved for PPA Buyer. (b) PPA Buyer hereby delegates to J. Aron the obligation to pay the APC Contract Price for all Assigned Products that are actually delivered to J. Aron pursuant to the Assigned Product Rights during the Assignment Period (the “Delivered Product Payment Obligation” and together with the Assigned Product Rights, collectively the “Assigned Rights and Obligations”); provided that (i) all other obligations of PPA Buyer under the PPA are expressly retained by PPA Buyer and PPA Buyer shall be solely responsible for any amounts due to PPA Seller that are not directly related to Assigned Products; and (ii) the Parties acknowledge and agree that PPA Seller will only be obligated to deliver a single consolidated invoice during the Assignment Period (with a copy to J. Aron consistent with Section 10 hereof). To the extent J. Aron fails to pay the Delivered Product Payment Obligation by the due date for payment set forth in the PPA, notwithstanding anything in this Agreement to the contrary, PPA Buyer agrees that it shall have the option to make such payment and that it will be an Event of Default pursuant to Section [__] if PPA Buyer does not make such payment within five (5) Business Days of receiving Notice of such non-payment from PPA Seller, in which case PPA Buyer will exercise its reimbursement claim pursuant to Section 6.5 of the Clean Energy Purchase Contract, dated as of [____], by and between PPA Buyer and California Community Choice Financing Authority (the “Clean Energy Purchase Contract”).
(c) J. Aron hereby accepts and PPA Seller hereby consents and agrees to the assignment, transfer, conveyance and delegation described in clauses (a) and (b) above. (d) All scheduling of Assigned Products and other communications related to the PPA shall take place pursuant to the terms of the PPA; provided that (i) title to Assigned Product will pass from PPA Seller to J. Aron upon delivery by PPA Seller of Assigned Product in accordance with the PPA; (ii) PPA Buyer will provide copies to J. Aron of any Notice of a Force Majeure Event or Event of Default or default, breach or other occurrence

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2 that, if not cured within the applicable grace period, could result in an Event of Default contemporaneously upon delivery thereof to PPA Seller and promptly after receipt thereof from PPA Seller; (iii) PPA Seller will provide copies to J. Aron of annual forecasts of Energy and monthly forecasts of available capacity and Energy provided pursuant to Section [__] of the PPA; (iv) PPA Seller will provide copies to J. Aron of all invoices and supporting data provided to PPA Buyer pursuant to Section [__], provided that any payment adjustments or subsequent reconciliations occurring after the date that is 10 days prior to the payment due date for a monthly invoice, including pursuant to Section [__], will be resolved solely between PPA Buyer and PPA Seller and therefore PPA Seller will not be obligated to deliver copies of any communications relating thereto to J. Aron; and (v) PPA Buyer and PPA Seller, as applicable, will provide copies to J. Aron of any other information reasonably requested by J. Aron relating to Assigned Products.
(e) PPA Seller acknowledges that (i) J. Aron intends to immediately transfer title to any Assigned Products received from PPA Seller through one or more intermediaries such that all Assigned Products will be re-delivered to PPA Buyer; and (ii) in the event that PPA Buyer fails to pay the relevant intermediary entity for any such Assigned Products, the receivables owed by PPA Buyer for such Assigned Products (“PPA Buyer Receivables”) may be transferred to J. Aron. To the extent any such PPA Buyer Receivables are transferred to J. Aron, J. Aron may transfer such PPA Buyer Receivables to PPA Seller and apply the face amount thereof as a reduction to any Delivered Product Payment Obligation. Thereafter, PPA Seller shall be entitled to pursue collection on such PPA Buyer Receivables directly against PPA Buyer. (f) On or before the commencement of the Assignment Period, The Goldman Sachs Group (“Guarantor”), Inc. will issue, in favor of PPA Seller, a guaranty of J. Aron’s payment obligations under this Assignment Agreement substantially in the form of Appendix 3 attached hereto (“Guaranty”).
(g) Notwithstanding any other provision of this Agreement, PPA Buyer shall be entitled to retain for its own account all CAISO revenues associated with delivery of the Assigned Product to CAISO, including where PPA Buyer is acting as Scheduling Coordinator for the Facility (as defined in the PPA) and through scheduling of ISTs. Nothing in this Agreement modifies or amends any rights or obligations of PPA Buyer and PPA Seller under the PPA with respect to CAISO revenues and costs. As used in this clause (g), the following terms have the meanings specified below.
“CAISO” means California Independent System Operator or its successor. “CAISO Tariff” means CAISO’s Federal Energy Regulatory Commission approved tariff, as modified, amended or supplemented from time to time. “Inter-SC Trade” or “IST” has the meaning set forth in the CAISO Tariff. “Scheduling Coordinator” 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.
(h) The Assigned Prepay Quantity set forth in Appendix 2 relates to obligations by and between J. Aron and PPA Buyer and has no impact on PPA Seller’s rights and obligations under the PPA.

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3 2. Assignment Early Termination.
(a) The Assignment Period may be terminated early upon the occurrence of any of the following:
(1) delivery of a written notice of termination specifying a termination date by either J. Aron or PPA Buyer to each of the other Parties;
(2) delivery of a written notice of termination specifying a termination date by PPA Seller to each of J. Aron and PPA Buyer following J. Aron’s failure to pay when due any amounts owed to PPA Seller in respect of any Delivered Product Payment Obligation and such payment is not made by J. Aron within five (5) business days following receipt by J. Aron and PPA Buyer of written notice; (3) delivery of a written notice by PPA Seller if any of the events described in the definition of Bankrupt in the PPA occurs with respect to J. Aron; or (4) delivery of a written notice by J. Aron if any of the events described in in the definition of Bankrupt in the PPA occurs with respect to PPA Seller. (b) The Assignment Period will end at the end of last delivery hour on the date specified in the termination notice provided pursuant to Section 2(a), which date shall not be earlier than the end of the last day of the calendar month in which such notice is delivered if termination is pursuant to clause 2(a)(1) or 2(a)(2) above. All Assigned Rights and Obligations shall revert from J. Aron to PPA Buyer upon the early termination of the Assignment Period, provided that (i) J. Aron shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to J. Aron prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period (c) The Assignment Period will automatically terminate upon the expiration or early termination of the PPA. All Assigned Rights and Obligations shall revert from J. Aron to PPA Buyer upon the expiration of or early termination of the PPA, provided that (i) J. Aron shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to J. Aron prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period.
(d) The Assignment Period will automatically terminate upon delivery by Guarantor of a notice of termination of the Guaranty. All Assigned Rights and Obligations shall revert from J. Aron to PPA Buyer upon the termination of the Assignment Period, provided that (i) J. Aron shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to J. Aron prior to the end of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall not affect the expiration or early termination of the Assignment Period.

Clean Power Alliance Board of DirectorsJuly 11, 2024

Clean Power Alliance Board of Directors
July 11, 2024