Board of Directors of the
Clean Power Alliance of Southern California
Regular Meeting
Thursday, November 6, 2025
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
357 Van Ness Way, Suite 90
Torrance, CA 90501
Crowne Plaza Santo Domingo
Av. George Washington 218
Santo Domingo 10208, DO
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 Agenda Page 1
Consent Agenda, or individual items in the Regular Agenda. Please refer to Policy No. 8 – Public Comment for additional information.
NAVIGATING OUR AGENDA PACKETS: The meeting agenda packets are bookmarked PDFs, which display a list of agenda items to the left of the page and allow you to click to view specific items within the packet. If viewing in your browser, click the "document outline" button in the upper left corner of the screen.
If the PDF is downloaded, the bookmark panel (ribbon icon) appears on the left side of the screen.
ACCESSIBILITY: Meetings are accessible to people with disabilities. Individuals who need special assistance or a disability-related modification or accommodation to participate in this meeting, or who have a disability and wish to request an alternative format for the meeting materials, should contact the Clerk of the Board at least two (2) working days before the meeting at [email protected] or (213) 713- 5995. Notification in advance of the meeting, while not required, will enable us to make reasonable arrangements to ensure accessibility to this meeting and the materials related to it.
CALL TO ORDER AND PLEDGE OF ALLEGIANCE
ROLL CALL
GENERAL PUBLIC COMMENT
CONSENT AGENDA
1. Approve Minutes from September 26, 2025, Board of Directors Special Meeting
2. Approve Minutes from October 16, 2025, Board of Directors Meeting
3. Approve and Authorize: (A) the Chief Executive Officer to Execute the Capacity Bidding Program-Elect (CBP-E) Aggregator Agreement and Credit Application with Southern California Edison; and (B) CPA Staff to Perform Related and Necessary Actions to Serve as a CBP-E Aggregator
4. Receive and File Monthly Community Advisory Committee Report
REGULAR AGENDA
Information Item
5. Receive Presentation on Battery Energy Storage Safety Action Item
6. (A) Adopt Resolutions Nos. 25-11-093, 25-11-094, 25-11-095, and 25-11-096 Approving Parameters Under Which up to a Total of $4.5 Billion of Energy Prepayment Transactions can be Completed with Goldman Sachs (GS), JPMorgan (JPM), 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 to Make Payments to Service Providers for Issuance Costs from Prepay Bond Proceeds. The authorizations in each of the Resolutions shall terminate on June 30, 2027; and, Agenda Page 2
(B) Delegate Authority to the Chief Executive Officer to Select the Funding Recipient(s) for Prepay Transactions Completed with GS, JPM, or MS Information Items
7. Receive Presentation of CPA’s Audited Financial Results for Fiscal Year 2024- 2025 and Fiscal Year 2024-2025 Budget to Actual Report
8. Receive Presentation on 2026 Power Charge Indifference Adjustment and Rates Outlook
NOTICE OF PUBLIC HEARING ON DECEMBER 4, 2025 TO CONSIDER A
RESOLUTION TO APPROVE AN IMPLEMENTATION PLAN ADDENDUM ADDING
THE CITIES OF CUDAHY AND FILLMORE AND TO AUTHORIZE STAFF TO SUBMIT
AN ADDENDUM TO THE CALIFORNIA PUBLIC UTILITIES COMMISSION
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 – NEXT REGULAR MEETING DECEMBER 4, 2025
Public Records: Public records that relate to any item on the open session agenda for a regular Board Meeting are available for public inspection. Those records that are distributed less than 72 hours prior to the meeting are available for public inspection at the same time they are distributed to all, or a majority of, the members of the Board. 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 3
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 4
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 5
Staff Report – Agenda Item 1
To: Board of Directors
Subject: Approve Minutes from the September 26, 2025, Board of Directors Special Meeting
Date: November 6, 2025
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Agenda Page 6
Board of Directors Item 1
MINUTES
Board of Directors of the
Clean Power Alliance of Southern California
Special Meeting
Friday, September 26, 2025, 9:00 a.m.
South Park Center, USC Tower
1150 S. Olive Street
Los Angeles, CA 90015
I. ROLL CALL & OPENING REMARKS
Chair Klein Lopez and Ted Bardacke, CEO, provided opening remarks. Gabriela Monzon, Clerk of the Board, conducted roll call.
Roll Call
1 Agoura Hills Deborah Klein Lopez Chair Present
2 Alhambra Jeff Maloney Director Present
3 Arcadia Absent
4 Beverly Hills Craig Corman
Julian Gold
Director
Alternate Present
5 Calabasas Ed Albrecht Director Present
6 Camarillo Susan Santangelo Director Present
7 Carson Cedric Hicks
Reata Kulcsar
Director
Alternate Present
8 Claremont Corey Calaycay Director Present
9 Culver City Absent
10 Downey Absent
11 Hawaiian Gardens Absent
12 Hawthorne Alex Monteiro Director Present
13 Hermosa Beach Ray Jackson
Doug Krauss
Director
Alternate Present
14 La Cañada Flintridge Stephanie Fossan Director Present 15 Los Angeles County Rita Kampalath
Aaron Ordower
Alternate
Alternate Present
16 Lynwood Juan Muñoz-Guevara Director Present
17 Malibu Marianne Riggins Director Present
18 Manhattan Beach David Lesser Director Present
Agenda Page 7
Board of Directors Item 1
19 Monrovia Edward Belden Director Present
20 Moorpark Absent
21 Ojai Michelle Ellison Alternate Present
22 Oxnard Kathleen Mallory Alternate Present
23 Paramount Absent
24 Port Hueneme Laura Hernandez Director Present
25 Redondo Beach Brad Waller Director Present
26 Rolling Hills Estates Debby Stegura
Jeannie Naughton
Director
Alternate Present
27 Santa Monica Gleam Davis Alternate Present
28 Santa Paula Jenny Crosswhite Director Present
29 Sierra Madre Robert Parkhurst Director Present
30 Simi Valley Absent
31 South Pasadena Omari Ferguson
Diana Mahmud
Director
Alternate Present
32 Temple City Ed Chen Director Present
33 Thousand Oaks David Newman Director Present
34 City of Ventura Absent
35 Ventura County Vianey Lopez Vice Chair Present
36 West Hollywood Absent
37 Westlake Village Absent
38 Whittier Absent
II. GENERAL PUBLIC COMMENT
Jeff Bush provided public comment.
III. Study Session 1: Clean Energy Targets
Staff noted that it is evaluating whether to set a goal of providing 100% Greenhouse Gas (GHG)-free energy by 2035, a decade ahead of California mandates. Some of the considerations for doing this are cost, feasibility, and CPA’s portfolio composition. Recent policy changes have added uncertainty. Staff requested Board input on these considerations ahead of CPA’s Q1 2026 Integrated Resources Plan submission.
Board members encouraged staff to be as ambitious as possible in reducing the greenhouse gas footprint of CPA’s overall energy portfolio but generally endorsed a 100% Clean Energy by 2035 goal only if the organization could do so while keeping Lean Power less expensive than SCE’s base rate. Board members supported flexibility both in
Agenda Page 8
Board of Directors Item 1
determining the trajectory of the Lean Power product clean energy content based on market conditions and technological development and in determining the optimal balance of renewable and zero-carbon resources in the Lean and Clean Power products so that clean energy goals are met most affordably.
III. Study Session 2A and 2B: Asset Ownership: Power Ready and Transmission Staff reviewed the Power Ready program and the electricity transmission sector focusing on opportunities, risks, and considerations for potential asset ownership. Staff discussed exploring the transition of the Power Ready program from its current Power Purchase Agreement (PPA) model to one where CPA develops and owns behind-the-meter solar and battery storage systems for critical sites, as well as opportunities for CPA to own or lease transmission assets in partnership with the private sector. Staff requested feedback from the Board on Power Ready program enhancement, benefits and risks of asset ownership, and identify any due diligence and planning needed to guide future action.
Power Ready Feedback
Board members noted the difficulty of communicating the “value” of resiliency when that value was non-economic, recommended that comprehensive talking points about the program be developed to assist Board members in communicating about the program’s value to staff and fellow councilmembers, and suggested that CPA could be more flexible on contract terms than a private developer when negotiating project details with member agencies. Board members were generally supportive of CPA continuing to explore project ownership within the Power Ready program and provided a number of potential liability and contracting issues they wished to see addressed in that exploration process.
Transmission Feedback
Board members were generally supportive of CPA continuing to pursue this opportunity.
Board members underlined the need to effectively manage risks – particularly wildfire liability and the need to deliver value to CPA customers.
Board members recognized that in order to take advantage of this opportunity:
1. CCAs or California Counties would need to be granted explicit permission by the state legislature to own and finance transmission assets; or
2. CPA would have to facilitate the creation of a new Joint Powers Authority with the explicit permission to own and finance transmission assets; or
3. CPA would have to partner with an existing agency authorized to own and finance transmission.
Board members encouraged staff to pursue all three options simultaneously to see which pathway would be most viable.
IV. ADJOURN
Agenda Page 9
Staff Report – Agenda Item 2
To: Board of Directors
Subject: Approve Minutes from the October 16, 2025, Board of Directors Meeting
Date: November 6, 2025
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Agenda Page 10
Board of Directors Item 2
MINUTES
Board of Directors of the
Clean Power Alliance of Southern California
Regular Meeting
Thursday, October 16, 2025, 2:00 p.m.
Meeting videos are available on CPA's YouTube Channel.
http://www.youtube.com/@CPApublicmeetings
Board members participated from the following locations:
Calabasas City Hall
Council Conference Room
100 Civic Center Way
Calabasas, CA 91301
Clean Power Alliance
Diana Mahmud Board Room
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Simi Valley City Hall
City Manager’s Conference Room
2929 Tapo Canyon Road
Simi Valley, CA 93063
Ventura County Government Center
Point Mugu Conference Room, 4th Floor
Hall of Administration
800 South Victoria Avenue
Ventura, CA 93009
South Bay Cities Council of Governments
Conference Room
357 Van Ness Way, Suite 90
Torrance, CA 90501
Whittier City Hall
Admin Conference Room
13230 Penn Street
Whittier, CA 90602
Hawthorne City Hall
Administrative Office
4455 W. 126th Street
Hawthorne, CA 90250
Sheraton Waikiki Beach Resort
Waikiki Room
2255 Kalakaua Avenue
Honolulu, HI 96815
CALL TO ORDER & ROLL CALL
Chair Klein Lopez called the meeting to order at 2:03 p.m. and Gabriela Monzon, Clerk of the Board, conducted roll call.
PLEDGE OF ALLEGIANCE
Director Parkhurst led the Pledge of Allegiance.
Roll Call
1 Agoura Hills Deborah Klein Lopez Chair Present
2 Alhambra Jeff Maloney Director Remote
3 Arcadia Absent
4 Beverly Hills Julian Gold Alternate Present
5 Calabasas Ed Albrecht Director Remote
6 Camarillo Susan Santangelo Director Remote
Agenda Page 11
Board of Directors Item 2
7 Carson Cedric Hicks Director Remote
8 Claremont Corey Calaycay Director Present
9 Culver City Joe Susca Alternate Remote
10 Downey Absent
11 Hawaiian Gardens Ramie Torres Alternate Remote
12 Hawthorne Alex Monteiro Director Remote
13 Hermosa Beach Doug Krauss Alternate Remote
14 La Cañada Flintridge Stephanie Fossan Director Present 15 Los Angeles County Rita Kampalath Alternate Present
16 Lynwood Absent
17 Malibu Absent
18 Manhattan Beach Nina Tarnay Alternate Remote
19 Monrovia Edward Belden Director Present
20 Moorpark Absent
21 Ojai Michelle Ellison Alternate Remote
22 Oxnard Bert Perello Director Remote
23 Paramount Michelle Muller Alternate Remote
24 Port Hueneme Laura Hernandez Director Remote
25 Redondo Beach Brad Waller Director Present
26 Rolling Hills Estates Steve Zuckerman Alternate Remote 27 Santa Monica Gleam Davis Alternate Present
28 Santa Paula Absent
29 Sierra Madre Robert Parkhurst Director Present
30 Simi Valley Rocky Rhodes Director Remote
31 South Pasadena Omari Ferguson Director Present
32 Temple City Ed Chen Director Present
33 Thousand Oaks David Newman Director Remote
34 City of Ventura Ryyn Schumacher Director Remote
35 Ventura County Vianey Lopez Vice Chair Remote
Agenda Page 12
Board of Directors Item 2
36 West Hollywood Absent
37 Westlake Village Kristopher Galvez Alternate Remote
38 Whittier Mary Ann Pacheco Director Remote
All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
CONSENT AGENDA
1. Approve Minutes from the September 4, 2025, Board of Directors Meeting
2. A. Approve Professional Services Agreement with Municipal Capital Markets Group, Inc. with a Per-Transaction Fee of $281,500 and a Total Not-to-Exceed Amount of $1,126,000, to be Paid from Bond Proceeds, for Municipal Financial Advisory, Guaranteed Investment Contract Broker, and Qualified Independent Representative Services on One of More Future Energy Prepayment Bon Transactions; and,
B. Approve Legal Services Agreement with Chapman and Cutler, LLP with a Per-Transaction Fee of $175,000 for the First Two Completed Transactions and $125,000 for Every Completed Transaction thereafter and a Total Not-to-Exceed Amount of $600,000 for Prepay Legal Counsel Services on a One or More Future Energy Prepayment Bond Transactions
3. Approve and Authorize the Chief Executive Officer to Execute a One-Year Professional Services Agreement with Help Good LLC for Creative Services in a Not-to-Exceed Amount of $348,300 for the One-Year Initial Term and for Each of the Two Optional One-Year Renewal Terms for a Total Not-to-Exceed Amount of $1,044,900
4. Receive and File Monthly Bill Positions Report
5. Receive and File Monthly Community Advisory Committee Report Motion: Director Gold, Beverly Hills
Second: Director Hicks, Carson
Vote: The consent agenda was approved by roll call vote.
REGULAR AGENDA
6. Approve and Authorize the Chief Executive Officer to Execute Amendments to the Eleven Power Purchase Agreement Special Conditions with Coast Energy DevCo LLC for the Power Ready Program
Matt Langer, Chief Operating Officer, explained that the Power Ready program is a community benefit program offered to CPA’s member agencies to support their community critical sites by installing a clean energy backup source available during power outages. In February 2024, The Board approved the first round of the Power Ready multi-site Power Purchase Agreement (PPAs), with Coast Energy, for solar photovoltaic systems paired with battery energy storage (BESS) capacity collectively at 11 sites owned by 8 member agencies. The PPA for the Power Ready projects is a multi-site PPA containing a General Conditions PPA and 11 Special Conditions PPAs.
The projects encountered delays due to extended negotiation of Site Lease Agreements with member agencies. Since the PPAs were executed, financial
Agenda Page 13
Board of Directors Item 2
conditions changed significantly, including material and labor costs, which negatively affected the viability of the projects. To address the impacts of these delays and changes in conditions, CPA and Coast Energy have negotiated an agreement to amend the PPAs to ensure the projects remain viable. Mr. Langer described the progress and challenges of Round 1 projects and discussed the amendments. Mr. Langer closed the presentation by stating that staff is considering enhancements to the Power Ready Round 2 program, including the implications of direct asset ownership.
Director Gold asked about the 4.6% increase in cost, and staff responded that it would be included in the cost of energy during the life of the PPA and that it would be around $50,000/year. Staff noted that Round 2 of the program, if CPA were to directly own the assets, would have a dedicated, Board-approved budget. Director Gold recommended that CPA staff account for potential cost increases and put in place additional measures to ensure adherence to that budget. Staff expressed openness to that approach and noted that the Round 2 contract structure is designed to avoid the delays experienced in Round 1.
Director Ferguson asked for a breakdown of the sites and the capacity of each, in particular for, South Pasadena, so that this information can be incorporated into the city’s climate change response reporting. Director Galvez expressed support for the projected construction start dates but expressed some concern regarding communication with Coast Energy. Mr. Langer stated that John Spector, Program Manager for Resiliency and Grants is available to assist with concerns.
Motion: Director Parkhurst, Sierra Madre
Second: Director Ferguson, South Pasadena
Vote: Item 6 was approved by a roll call vote.
7. Receive Presentation on the Implementation of Base Services Charge by Southern California Edison
Ted Bardacke, Chief Executive Officer, provided background on Assembly Bill 205, which required the CPUC to establish an income-graduated fixed charge in residential rates, aiming to reduce bills for low-income ratepayers and improve the cost effectiveness of electrification. In May 2024, the CPUC directed the investor-owned utilities to implement a three-tiered monthly fixed charge, now called the Base Services Charge. The new charge will be combined with a $0.5-7 cent/kwh reduction in energy delivery rates but will not impact generation charges and will not change CPA-SCE bill comparisons.
While the charge is revenue-neutral for IOUs, it will have a varying impact for different types of customers. Low-income customers and customers with higher electricity usage should see a decrease in their monthly bills. Customers with lower usage will likely see a bill increase. CPA customers will begin seeing the Base Services Charge on bills starting November 2025. SCE notified customers about the upcoming change via mail or email in mid-August. CPA staff and customer representatives are prepared to handle customer inquiries. Mr. Bardacke reported that the CPUC is developing a working group to create additional income tiers to the BSC. This effort could take up to two years to yield a proposal.
Agenda Page 14
Board of Directors Item 2
Chair Klein Lopez remarked that efforts to address this charge in the legislature were unsuccessful, leaving this provision in place and leading to unintended consequences.
COMMITTEE CHAIR UPDATES
Director Santangelo, Chair of the Finance Committee, reported that CPA’s financial audit is underway. The Committee reviewed and recommended selection of contractors for future prepay transactions, as reflected in the consent agenda.
Director Parkhurst, Chair of the Energy Committee, reported that the Committee approved the 2025 Clean Energy and Reliability Shortlist and Waitlist
MANAGEMENT REPORT
Ted Bardacke, Chief Executive Officer, reported that the cities of Cudahy and Fillmore have voted in favor of joining CPA with service to start in 2027. The written report also includes a summary of the Board Retreat discussion and an end-of-session legislative update. The latter included important information about the Wildfire Insurance Fund and the Cap and Invest program. Mr. Bardacke congratulated the City of Carson for implementing CPA’s first Innovation Fund project. CPA has received 14 applications for the next round of Innovation Fund grants, exceeding the amount of funds available by three times.
BOARD MEMBER COMMENTS
Director Susca asked if the cities of Cudahy and Fillmore have chosen the default tier rate, and Mr. Bardacke responded they both deferred that decision, wanting to review the most up-to-date rate comparisons. Director Hernandez suggested staff use FEMA’s cost-benefit analysis model to help member agencies describe the value of resiliency related to the Power Ready program.
REPORT FROM THE CHAIR
Chair Klein Lopez thanked Directors for participating in the Board Retreat.
ADJOURN
Chair Klein Lopez adjourned the meeting at 3:08 p.m.
Agenda Page 15
Staff Report – Agenda Item 3
To: Board of Directors
From: Joanne O’Neill, Senior Director, Customer Programs Reviewed by: Matthew Langer, Chief Operating Officer
Francis Choi, Assistant General Counsel
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Capacity Bidding Program-Elect (CBP-E) Aggregator Agreement with Southern California Edison (SCE)
Date: November 6, 2025
RECOMMENDATION
Approve and authorize (A) the Chief Executive Officer (CEO) to execute the Capacity Bidding Program-Elect (CBP-E) Aggregator Agreement (CBP-E Agreement) and Credit Application with Southern California Edison (SCE), and (B) CPA staff to perform related and necessary actions to serve as a CBP-E aggregator.
BACKGROUND
Self-Generation Incentive Program (SGIP)
The statewide SGIP program provides incentives for the installation of distributed energy resources, including solar paired battery storage systems. Since June 2024, SGIP has required that customers enroll and participate in a Qualified Demand Response Program (QDP) for a 10-year period to receive an incentive. CPA applied to the CPUC to have several of its demand response programs recognized as QDPs, but the application was denied by the CPUC for technical reasons, even for programs that are almost exactly the same as those offered by SCE.
1 1 To date, the CPUC has refused to approve demand response programs from any CCA.
Agenda Page 16
Board of Directors Item 3
Recently, the CPUC issued a Proposed Decision, excluding certain low-income customers from the QDP requirement, while retaining the requirement for other residential and commercial customers and funding buckets.
Ability to access SGIP funds is critical for CPA’s customers, but many of CPA’s residential customers still have no pathway to participate in a QDP and, thus, cannot access SGIP incentives. Meanwhile, CPA’s Power Ready projects are expected to receive over $2 million in SGIP incentives and must comply with the QDP requirement once complete.
Additionally, CPA has received numerous questions and complaints from customers trying to access these incentives; as of September 23, 2025, 82 customers have elected to opt out of CPA service in order to participate in SCE's Critical Peak Pricing program, which is a QDP option that is only available to bundled customers.
Solar and Battery Access Program customers are also relying on SGIP funding but assuming the CPUC approves its Proposed Decision, they will be relieved from the QDP requirement.
In total, CPA estimates that between 500 and 600 of its customers are receiving or are eligible for SGIP rebates and therefore need to enroll in a QDP.
Capacity Bidding Program-Elect (CBP-E)
If a CPA customer wants to receive an SGIP incentive and they are subject to the QDP requirement, they must enroll in SCE’s CBP-E program or opt-out of CPA service. CBP-E is an SCE event-based demand response program that operates from May to October each year, which temporarily reduces energy usage in response to weather or system-related energy shortages and high energy prices. SCE enrolls aggregators who in turn enroll customers and aggregate their demand reduction capacity by dispatching their demand reduction resources when a demand response event is called. The aggregator takes on the responsibility of administration, event notification, dispatch, and performance. Any company or individual can become an aggregator if they are willing to accept SCE’s terms and conditions and meet the requirements of SCE’s tariff.
Agenda Page 17
Board of Directors Item 3
While this option for CPA customers does exist in theory, there are currently no residential aggregators serving CPA customers. There are existing CBP-E aggregators for commercial customers, but those aggregators charge the customer to enroll, effectively reducing their SGIP rebate by an estimated 5-15%.
DISCUSSION
Staff propose that CPA execute the necessary agreements with SCE and take actions to become a CBP-E aggregator in order to provide CPA residential and commercial customers with a pathway to receive and/or retain SGIP incentives. The CBP-E Agreement requires CPA, as an aggregator, to be responsible for enrolling and tracking customers, providing notifications of demand response events, ensuring compliance with the tariff and agreement with SCE, and managing any customer inquiries.
CPA does not intend to impose any costs or penalties for non-performance on participating customers (as other aggregators do), nor will it offer incentives for participation. As an aggregator, CPA is eligible for an average incentive of up to $2,600 per event based on performance and could be subject to an average penalty of up to $1,000 per event for non-performance. CPA will administer the program with a priority of avoiding penalties rather than earning incentives; any incentives earned would be used to offset program administration costs.
FISCAL IMPACT
There are no anticipated fiscal impacts for Fiscal Year 2025-2026. CPA will use existing staff to manage its CBP-E aggregation, and any incentives or penalties are expected to be de minimis due to the expected small size of the program and CPA’s administration approach.
ATTACHMENTS
1. Capacity Bidding Program-Elect Aggregator Agreement
2. Capacity Bidding Program Aggregator Credit Application Agenda Page 18
Southern California Edison Original Cal. PUC Sheet No. 88480-E* Rosemead, California (U 338-E) Cancelling Cal. PUC Sheet No.
Sheet 1
(To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 5321-E-A Michael Backstrom Date Submitted Oct 14, 2024 Decision Vice President Effective Jan 1, 2025
1C7 Resolution E-5321
CAPACITY BIDDING PROGRAM-ELECT AGGREGATOR AGREEMENT
Form 14-995
Agenda Page 19
2244 Walnut Grove Avenue
Rosemead, CA 91770
Form 14-995
Version 2024
1 CAPACITY BIDDING PROGRAM - ELECT AGGREGATOR AGREEMENT This Agreement (“Agreement”) for Aggregators Participating in the Capacity Bidding Program - Elect is made and entered into this ______ day of _________, 20__ (the “Effective Date”), by and between Southern California Edison Company (“SCE”), a corporation organized and existing under the laws of the State of California, and
_______________________________________________________(“Aggregator”), a ________________________________ organized and existing under the laws of the State of _________________________________________. SCE and Aggregator may be referred to herein as a “Party” and collectively as the “Parties.”
WHEREAS, the California Public Utilities Commission (“CPUC”) has authorized the Capacity Bidding Program - Elect (“CBP-E”), a capacity bidding program as set forth in SCE’s Schedule CBP-E, (“Schedule CBP-E”), which is attached hereto as Attachment A and incorporated herein by this reference, whereby SCE pays eligible Aggregators for participating in Schedule CBP-E; and WHEREAS, the CPUC has authorized the participation of Aggregators in Schedule CBP-E, and Aggregator desires to participate in SCE’s CBP-E subject to the applicable SCE tariff rules and Schedule CBP-E.
NOW, THEREFORE, in consideration of the mutual undertakings set forth below, the Parties agree as follows:
I. AGGREGATOR’S OBLIGATIONS
A. Subject to Schedule CBP-E. Aggregator’s status in SCE’s CBP-E shall be as an “Aggregator” under Schedule CBP-E. Aggregator shall be subject to all applicable tariff rules and regulations (which rules and regulations are hereby incorporated herein as an integral part of this Agreement), including, but not limited to, the rates, terms and conditions set forth in Schedule CBP-E, as such rules and regulations may be amended from time to time. If the CPUC approves any modification to Schedule CBP-E, any such modification shall be automatically incorporated herein without any further action by either party, and this Agreement will continue in full force and effect as to Schedule CBP-E as so modified, unless and until the Parties execute a new agreement, or unless and until SCE or Aggregator terminates this Agreement.
B. Aggregated Group. Aggregator shall group one or more customer service accounts, located within SCE’s service territory, for purposes of receiving service under Schedule CBP-E as an Aggregator. Such Aggregator shall receive payments or when applicable pay penalty charges, whereby it is the Aggregator who is served under Schedule CBP-E, not the individual customers of an Aggregator. Aggregator shall be solely responsible for having the appropriate contractual or other arrangements with each customer within an Aggregator’s group. SCE shall not be responsible for monitoring, auditing, reviewing or enforcing such arrangements. Aggregator acknowledges and agrees that it is the Aggregator, not the customer, who is subject to the terms and conditions of Schedule CBP-E and this Agreement.
C. Aggregator Service Establishment. Aggregator must satisfy the following requirements before Aggregator can provide Aggregator services in connection with Schedule CBP-E:
1. Aggregator must submit an executed copy of this Agreement.
2. Aggregator must satisfy SCE’s creditworthiness requirements as specified in Section V below.
D. Required Notices to Add Customer Service Accounts. Once Aggregator has entered into the appropriate contractual or other arrangements with a customer who participates in an Aggregator’s
Agenda Page 20
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2 group, Aggregator shall deliver to SCE a “Customer Authorization for Participation in Aggregated Demand Response Programs Form,” attached hereto as Attachment B, adding such customer’s service account(s) to one of Aggregator’s groups. Aggregator customers shall notify SCE that they wish to be removed from Aggregator’s groups by delivering to SCE an “Aggregator Remove Form,” attached hereto as Attachment C, removing such customer service account(s) from one of Aggregator’s groups. Aggregator and Customer, as applicable, shall deliver such Notices to SCE by email at the email address specified for SCE in Section XI or the CBP enrollment internet website.
Aggregator’s delivery of a “Customer Authorization for Participation in Aggregated Demand Response Programs Form” adding one or more customer service accounts to one of Aggregator’s groups shall be required before Aggregator can submit Capacity Nominations containing any part of the customer service account’s load or receive any payment for such Capacity Nomination.
E. Secure Customer Participation in Measurement and Evaluation Activities. Aggregator agrees, and shall cause each customer service account of an Aggregator’s group to agree in the appropriate contractual or other arrangement, to (i) allow the California Energy Commission and its authorized representatives reasonable access to customer’s facilities to conduct measurement and evaluation activities related to CBP-E; and (ii) participate in and complete all evaluation surveys received from SCE and/or the CEC related to CBP-E. Aggregator’s failure to secure these agreements from any of its customer service accounts may result in the termination of this Agreement and/or a determination by SCE that Aggregator is ineligible for service under Schedule CBP-E.
F. Timeliness and Due Diligence. Aggregator shall exercise due diligence in meeting its obligations and deadlines under Schedule CBP-E and this Agreement so as to facilitate customer participation through Aggregator in CBP-E.
G. Prohibited Resources. To ensure that all participants in an Aggregator’s portfolio are compliant with the Prohibited Resources policy described in Schedule CBP-E, Aggregators are responsible for:
1. Obtaining signed attestations from their newly enrolled non-residential customers or customers making changes to their current attestation, on Form 14-980. These Forms must be provided to SCE via the CBP enrollment internet website or other format acceptable to SCE. Participant’s signature for participating account(s) may be in an electronic format. Any changes to current customer attestations must be provided by the Aggregator to SCE, at a minimum on a monthly basis.
2. Agreeing, and causing each non-residential customer service account of an Aggregator’s group to agree in the appropriate contractual or other arrangement, that the customer will be required to comply with any data requests, site visits, or installation of data collection devices requested by the Verification Administrator or a designated entity related to the audit of Prohibited Resources;
3. Removing customers, using Form 14-933, from their portfolio within 30 days of being notified or becoming aware that the customer has violated the Prohibited Resources Policy and requirements;
4. Recording, updating, and de-rating their portfolio nominations by the sum of all non-residential customer’s Default Adjustment Value on a monthly basis;
5. Conducting outreach and notification of the Prohibited Resources policy to their customers, which includes developing metrics, targets and record keeping systems to assess the effectiveness of their customer outreach and notification efforts, as well as demonstrating compliance with the above to SCE upon request; and
6. Securely storing all non-residential participant attestation documentation and making it available to SCE upon request.
If an Aggregator does not remove noncompliant participants with an uncured Type I Violation or a Type II Violation, SCE will terminate this agreement.
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3 H. Aggregator’s Responsibilities for Protecting Customer Privacy. If Aggregator processes customer information received from SCE or a collects information from a customer, the following shall apply:
1. The customer information collected by or made available to Aggregator is for the limited and specified purpose of the activities described in this Agreement. SCE has the right to take reasonable and appropriate steps (1) to ensure that Aggregator uses and Processes customer information in a manner consistent with SCE’s obligations under applicable privacy laws and (2) upon reasonable notice to Aggregator, to stop and remediate the unauthorized use of customer information;
2. Aggregator will promptly notify SCE if it can no longer meet its obligations under applicable privacy laws;
3. Aggregator will collect, receive and process customer information solely for the purpose of Aggregator’s performing the activities described in this Agreement;
4. Aggregator will not retain, use, or disclose customer information except as permitted by SCE and applicable privacy laws for any purpose (including any commercial purpose) other than the activities in the Agreement;
5. Aggregator will not sell or share customer information, including as the terms “sell” and “share” are defined under applicable privacy laws, including CCPA;
6. Aggregator may not combine customer information with “personal information” (as the term “personal information” is defined under applicable privacy laws) that Aggregator receives from, or on behalf of another source, or collects from its own interactions with a customer or household unless such combination is necessary to perform the activities described in this Agreement, and is allowed under this Agreement and applicable privacy law.
7. If SCE makes deidentified customer information available to Aggregator, or Aggregator otherwise obtains access to such information from or on behalf of SCE in connection with the activities described in this Agreement, Aggregator agrees to (1) take reasonable measures to ensure that the information cannot be associated with a customer or household, (2) publicly commit to maintain and use the information in deidentified form and not to attempt to reidentify the information except as permitted under applicable privacy laws, and (3) contractually obligate any further recipient to comply with this Section (H)(7);
8. Aggregator shall enable SCE to comply with customer requests made pursuant to applicable privacy laws; and
9. Aggregator agrees that SCE may monitor its compliance with this Section (H), including through manual reviews, automated scans, regular assessments, audits, or other technical and operational testing, at least once every twelve (12) months.
10. To the extent Aggregator is a “Contractor” (as the term “contractor is defined under the applicable privacy laws), by agreeing to this Agreement, Aggregator certifies that it understands the restrictions on processing the customer information set forth in Sections H(3)-(6) of this Agreement and agrees that it will comply with them.
Aggregator acknowledges that (1) “applicable privacy laws” as used in this Section H includes, but is not limited to, the California Consumer Privacy Act of 2018, California Civil Code Section 1798.100 – 1798.199, as amended, and (2) it understands its obligations and responsibilities under the California Consumer Privacy Act of 2018 as amended.
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4 I. Aggregator Use of Subcontractors and Agents. Aggregator shall be responsible for the acts and omissions of its subcontractors and agents as though the acts and omissions were the acts or omissions of the Aggregator.
II. GENERAL TERMS
A. Definitions. Except where explicitly defined herein, the capitalized terms used in this Agreement shall have the meanings set forth in Schedule CBP-E.
B. SCE Not Liable for Aggregator Service. SCE has no obligations to a customer with one or more service accounts participating in an Aggregator’s group in CBP-E. Such customer must look to Aggregator to carry out the responsibilities associated with Aggregator’s service.
C. Customer-Specific Usage or Meter Data. SCE will provide customer-specific usage or meter data to Aggregator, provided SCE has received written authorization from the customer to release such information to Aggregator, in the form attached hereto as Attachment B (“Authorization for Participation in Aggregated Demand Response Programs Form”). Aggregator agrees, and shall cause each customer service account of an Aggregator’s group to agree in the appropriate contractual or other arrangement, that Aggregators receiving such customer information will not further release the information to others without the customer’s explicit consent.
D. Customer Inquiries. Aggregator agrees, and shall cause each customer service account of an Aggregator’s group to agree in the appropriate contractual or other arrangement, that Customer inquiries concerning Aggregator’s services shall be directed to Aggregator.
III. LIMITATION OF LIABILITIES
SCE shall not be liable to the customer or Aggregator for any damages caused by SCE’s conduct in compliance with, or as permitted by Schedule CBP-E, other tariffs, this Agreement, and/or associated legal and regulatory requirements related to CBP-E.
SCE’s liability to Aggregator for any loss, cost, claim, injury, liability or expense, including reasonable attorneys’ fees, relating to or arising from any act or omission in SCE’s performance of this Agreement shall be limited to the amount of direct damage actually incurred. In no event shall SCE be liable to Aggregator for any indirect, special, consequential or punitive damages of any kind whatsoever, whether in contract, tort or strict liability.
SCE shall not be liable to any customer for any damages caused to the customer by any failure by Aggregator to comply with SCE’s tariffs, this Agreement, and/or associated legal and regulatory requirements related to Direct Access and Community Choice Aggregation Services.
The CPUC has initial jurisdiction to interpret, add, delete or modify any provision of Schedule CBP-E or this Agreement, and to resolve disputes regarding SCE’s performance of SCE’s obligations under Schedule CBP-E or other tariffs, or this Agreement.
SCE shall not be liable to the customer for any damages caused by Aggregator’s failure to perform any commitment to the customer.
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5 Aggregator is not SCE’s agent for any purpose. SCE shall not be liable to the customer for any damages resulting from any acts, omissions, or representations made by Aggregator in connection with soliciting customers for Aggregator’s services or performing any of its functions in CBP-E.
IV. INDEMNIFICATION
A. Indemnification of SCE. To the fullest extent permitted by law, Aggregator shall indemnify, defend and hold harmless SCE, and its parent company, subsidiaries, affiliates and their respective shareholders, officers, directors, employees, agents, representatives, successors and assigns (collectively, the “Indemnified Parties”), from and against any and all claims, actions, suits, proceedings, losses, liabilities, penalties, fines, damages, costs or expenses, including without limitation reasonable attorneys’ fees (a “Claim”), resulting from (a) any breach of the representations, warranties, covenants and obligations of Aggregator under this Agreement, (b) any act or omission of Aggregator, whether based upon Aggregator’s negligence, strict liability or otherwise, in connection with the performance of this Agreement, or any third party claims of any kind, whether based upon negligence, strict liability or otherwise, arising out of or connected in any way to Aggregator’s performance or nonperformance under this Agreement. This indemnification obligation shall not apply to the extent that such injury, loss or damage is caused by the willful misconduct of SCE or SCE’s sole negligence.
B. Defense of Claim. If any Claim is brought against the Indemnified Parties, Aggregator shall assume the defense of such Claim, with counsel reasonably acceptable to the Indemnified Parties, unless in the opinion of counsel for the Indemnified Parties a conflict of interest between the Indemnified Parties and Aggregator may exist with respect to such Claim. If a conflict precludes Aggregator from assuming the defense, then Aggregator shall reimburse the Indemnified Parties on a monthly basis for the Indemnified Parties’ defense costs through separate counsel of the Indemnified Parties’ choice. If Aggregator assumes the defense of the Indemnified Parties with acceptable counsel, the Indemnified Parties, at their sole option and expense, may participate in the defense with counsel of their own choice without relieving Aggregator of any of its obligations hereunder.
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6 V. CREDIT REQUIREMENTS
A. Credit Requirements. Regardless whether Aggregator is self-aggregating its service accounts or is a third-party aggregator of SCE customer accounts. Aggregator shall establish its creditworthiness through evaluations, deposits, or other security in the manner described below to cover Aggregator’s payment liabilities to customers incurred as a result of customers’ participation in an Aggregator’s group under the terms and conditions of Schedule CBP-E. Aggregators may not participate through nominations until Aggregator has established its creditworthiness according to the credit requirements of this Section V.
1. Credit Evaluation
Aggregator with a demonstrable current credit rating of Baa2 or higher from Moody’s or BBB or higher from Standard and Poor’s, Fitch, or Duff & Phelps, is deemed to be creditworthy unless SCE determines that a material change in the Aggregator’s creditworthiness has occurred. Aggregator shall complete a credit application including financial information reasonably necessary to establish credit. The creditworthiness evaluation may be conducted by an outside credit analysis agency, determined by SCE, with final credit approval granted by SCE. SCE will complete this evaluation within 10 business days of receiving the completed credit application. Credit reports will remain strictly confidential between the credit analysis agency and SCE. SCE may charge credit application processing fee, as approved by the CPUC, to offset the cost of determining the Aggregator’s creditworthiness.
2. Security Deposits
Aggregator may submit and maintain a cost-based security deposit in lieu of submitting to or being qualified under a creditworthiness evaluation. The amount of the security deposit required to establish credit will be $5,000 for each megawatt the Aggregator expects to nominate in its highest monthly nomination during the calendar year. If the Aggregator’s nominations are consistently higher than this initial estimate, SCE reserves the right to request an additional deposit equal to the difference between the initial deposit and the Aggregator’s highest nomination month. The initial value of the security deposit will be estimated by Aggregator to cover its expected nominations, and will be adjusted as necessary from time to time to meet the security requirements based on changes in Aggregator’s expected nominations. Security deposits may be in the form of:
a. A cash deposit, with interest earned at Federal Funds Effective Rate as defined in Section V.A.4.; or
b. An irrevocable, nontransferable standby Letter of Credit, acceptable to SCE in its discretion, provided by Aggregator from an issuer acceptable to SCE that is a United States bank or a United States branch of a foreign bank, and that has a Credit Rating of at least A- from Standard & Poor’s or A3 from Moody’s.
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7 3. Security Deposit Payment Timetable
Aggregator shall post a security deposit with SCE at least three days before Aggregator submits Capacity Nominations in accordance with Schedule CBP-E. Unless and until Aggregator’s security deposit is received, Aggregator shall not be entitled to submit Capacity Nominations in accordance with Schedule CBP-E or receive any payment for Recorded Reduced Capacity and Recorded Reduced Energy. Aggregator’s failure to timely post the required security deposit may result in the termination of this Agreement and/or a determination by SCE that Aggregator is ineligible to participate in CBP-E.
4. Interest on Cash Deposit
SCE will pay interest on cash deposits, calculated using the Federal Funds Effective Rate.
The Federal Funds Effective Rate is the annual interest rate posted opposite the caption “Federal Funds (effective),” as set forth in the weekly statistical release as H.15 (519), or any successor publication, published by the Board of Governors of the Federal Reserve System. Applicable interest commences on the date the deposit is received and earned interest will be calculated as the sum of the daily interest amounts for all calendar days in such Interest Period. The daily interest amount is to be determined as follows: (i) the amount of Cash held by SCE on that day; (ii) multiplied by the Federal Funds Effective Rate for that day, (iii) divided by 360. SCE will calculate and pay simple interest on cash deposits to Aggregator, concurrently with the return of such cash deposits in accordance with the terms and this Agreement.
5. Ongoing Maintenance of Credit
Aggregator shall promptly notify SCE of any material change in its credit rating or financial condition. Aggregator shall also furnish evidence of an acceptable credit rating or financial condition, as set forth above, upon SCE’s request. If SCE determines that Aggregator’s, or Aggregator’s guarantor’s, creditworthiness has materially changed, and Aggregator does not rectify or provide a security deposit commensurate with the change in creditworthiness, then SCE may terminate this Agreement pursuant to Section X below.
6. Additional Documents
Aggregator shall execute and deliver all documents and instruments (including, without limitation, security agreements and SCE financing statements) required to implement the provisions set forth above and to perfect any security interest granted to SCE.
VI. PAYMENT
A. Payment Terms. During the term of this Agreement, SCE shall make any payments (after deducting any penalties due to SCE) due to Aggregator pursuant to the terms and conditions of Schedule CBP-E. These payments will be made within sixty (60) calendar days following the end of each operating month, contingent upon the timely receipt of any information requested from the Aggregator. At time of payment, SCE will issue a bill credit, or a check payable to Aggregator and mailed to the following address:
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8 Name: ___________________________________
Attention: ___________________________________
Address 1: ___________________________________
Address 2: ___________________________________
City, State, Zip: ___________________________________
B. Disputed Bills or Charges. Aggregator agrees to resolve any disputed bills and/or charges in accordance with the “Resolution of Disputes” provision of Section XIII.D below.
VII. REPRESENTATIONS AND WARRANTIES
Each Party represents and warrants that it is and shall remain in compliance with all applicable laws.
Each Party represents and warrants that (a) it has the full power and authority to execute and deliver this Agreement and to perform its terms and conditions; (b) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate or other action by such Party; and this Agreement constitutes such Party’s legal, valid and binding obligation, enforceable against such Party in accordance with its terms.
With each submission of a “Authorization for Participation in Aggregated Demand Response Programs Form,” adding a customer service account, and until such time as Aggregator submits “Aggregator Remove Form“ for the removal of such customer from Aggregator’s representation, Aggregator represents and warrants that:
(a) Each customer participating in an Aggregator’s group has voluntarily elected to such participation;
(b) Aggregator has entered into the appropriate contractual or other arrangements with such customer whereby such customer has (i) authorized Aggregator to receive payments from and to pay penalty charges to SCE under the terms and conditions of Schedule CBP-E and (ii) agreed to the customer obligations described in this Agreement .
Aggregator further represents and warrants that it and its subcontractors will comply with applicable privacy laws including, but not limited to, the California Consumer Privacy Act of 2018, California Civil Code Section 1798.100 – 1798.199, as amended and provide at least the same level of privacy protections as required under those laws.
VIII. USE OF SCE NAME AND MARKS IN THIRD-PARTY MARKETING
MATERIALS
Any and all marketing materials designed or developed by Aggregator that references any SCE program will be subject to written approval from SCE Program Administration prior to any distribution, circulation or publication. Aggregator is responsible for all marketing activities to customers; however, SCE, in its sole discretion, may assist Aggregator with advertising or marketing to SCE’s customers. Neither Aggregator nor any of its subcontractors or independent contractors shall use SCE’s corporate name, trademark, trade name, logo, identity or any affiliation for any reason, without SCE’s prior written consent, which may be withheld by SCE in its sole discretion.
Upon termination of the Agreement, Aggregator shall immediately cease all use of SCE’s corporate name, trademark, trade name, logo, identity or any affiliation.
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9 IX. TERM
The term of this Agreement shall commence as of the Effective Date and shall continue in full force and effect until terminated pursuant to Section X below.
X. TERMINATION
A. Termination at CPUC Direction. SCE may terminate this Agreement upon fifteen (15) days written notice to Aggregator if the CPUC orders the termination of this Agreement or Schedule CBP-B. Termination for Default: Either Party may terminate this Agreement upon written notice to the other Party if the other Party breaches any material obligation under this Agreement and fails to cure such breach within thirty (30) days after receiving written notice of the breach. Upon termination of this Agreement, SCE will remove all customer service accounts in the Aggregator’s portfolio from the DR program.
C. Effect of Termination. Upon SCE’s issuance of a notice of termination of this Agreement for default by Aggregator, SCE shall have the right to solicit the self-aggregation in CBP-E of customers who had participated in an Aggregator’s group who are eligible to self-aggregate in CBP-E.
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10 XI. NOTICES
A. Mailing Address. Except for payments, which shall be made pursuant to Section VI above, any formal notice, request, or demand required or permitted under this Agreement shall be given in writing by SCE and Aggregator, and shall be (a) mailed by first-class mail, (b) mailed by registered, certified or other overnight mail, (c) delivered in hand, or (d) delivered by email, , to the other Party as indicated below, or to such other address as the parties may designate by written notice.
To Aggregator:
_________________________________
Phone: ___________________________
Email: ____________________________
To SCE:
_________________________________
Phone: ___________________________
Email: ____________________________
B. Notices. Notices delivered by hand or by email shall be deemed received when delivered.
Notices delivered by first class mail shall be deemed received forty-eight (48) hours (not including weekends and holidays) after deposit, postage prepaid, in the U.S. mail, or if certified, registered or overnight mailing is used, as acknowledged by the signed receipt of mailing.
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11 XII. CONFIDENTIALITY
A. Confidentiality. Aggregator shall not disclose any Confidential Information obtained pursuant to this Agreement to any third party, including any affiliates of Aggregator, without the express prior written consent of SCE. As used herein, the term “Confidential Information” means proprietary business, financial and commercial information pertaining to SCE, customer names and other information related to customers, including energy usage data (“Customer Information”), any trade secrets and any other information of a similar nature, whether or not reduced to writing or other tangible form. Confidential Information shall not include: (a) information known to Aggregator prior to obtaining the same from SCE; (b) information in the public domain at the time of disclosure by Aggregator; (c) information obtained by Aggregator from a third party who did not receive the same, directly or indirectly, from SCE; or (d) information approved for release by express prior written consent of an authorized representative of SCE.
B. Use of Confidential Information. Aggregator hereby agrees that it shall use the Confidential Information solely for the purpose of performing under this Agreement. Aggregator agrees to use a reasonable standard of care to prevent unauthorized use of disclosure of the Confidential Information which is at least the same degree of care Aggregator uses with respect to its own proprietary or confidential information.
C. Authorized Disclosure. Notwithstanding any other provisions of this Section XII, Aggregator may disclose any of the Confidential Information in the event, but only to the extent, that, based upon advice of counsel, Aggregator is required to do so by the disclosure requirements of any law, rule, regulation or any order, decree, subpoena or ruling or other similar process of any court, governmental agency or regulatory authority. Prior to making or permitting any such disclosure, Aggregator shall provide SCE with prompt written notice of any such requirement so that SCE (with Aggregator’s assistance if requested by SCE) may seek a protective order or other appropriate remedy.
D. Term. The confidentiality provisions set forth in this Section XII shall remain in full force and effect with respect to any Confidential Information until the date that is five (5) years after the date of SCE’s disclosure of such Confidential Information to Aggregator pursuant to this Agreement; provided that such confidentiality provisions shall remain in full force and effect with respect to any Customer Information in perpetuity.
E. Remedies. The Parties acknowledge that the Confidential Information is valuable and unique, and that damages would be an inadequate remedy for breach of this Section XII. The obligations of Aggregator are specifically enforceable. Accordingly, the Parties agree that in the event of a breach or threatened breach of this Section XII by Aggregator, SCE shall be entitled to seek an injunction preventing such breach, without the necessity of proving damages or posting any bond. Any such relief shall be in addition to, and not in lieu of, monetary damages or any other legal or equitable remedy available to SCE.
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12 XIII. MISCELLANEOUS
A. Assignment. This Agreement, and the rights and obligations granted and/or obtained by Aggregator hereunder, shall not be further transferred or assigned by Aggregator without the prior written consent of SCE. Any assignment in violation of this section shall be void.
B. Independent Contractor. Aggregator shall perform its obligations under this Agreement as an independent contractor, and no principal-agent or employer-employee relationship or joint venture or partnership shall be created with SCE.
C. Choice of Law. This Agreement shall be carried out and interpreted under the laws of the State of California, without regard to any conflict of law principles thereof. Except for matters and disputes with respect to which the CPUC is the proper venue for dispute resolution pursuant to applicable law or this Agreement, the federal and state courts located in Los Angeles, California shall constitute the sole proper venue for resolution of any matter or dispute hereunder. The Parties submit to the exclusive jurisdiction of such courts with respect to such matters and disputes.
D. Resolution of Disputes. Any dispute arising between the Parties relating to the interpretation of this Agreement or to the performance of a Party’s obligations hereunder shall be reduced to writing and referred to the Parties’ designated representative for resolution. The Parties shall be required to meet and confer in an effort to resolve any such dispute. Any dispute or need for interpretation arising out of this Agreement which cannot be resolved after discussion between the Parties shall be submitted to the CPUC for resolution.
E. Waiver. Any failure or delay by either Party to exercise any right, in whole or part, hereunder shall not be construed as a waiver of the right to exercise the same, or any other right, at any time thereafter.
F. Governmental Actions. This Agreement shall be subject to the continuing jurisdiction of the CPUC and all orders, rules, regulations, decisions or actions of any governmental entity (including a court) having jurisdiction over SCE or this Agreement. The Agreement is subject to such changes or modifications by the CPUC as it may direct from time to time in the exercise of its jurisdiction.
G. Entire Agreement; Amendments. This Agreement, including the Attachments listed below, sets forth the entire understanding of the Parties as to the subject matter hereof, and supersedes any prior discussions, offerings, representations or understanding (whether written or oral), and shall only be superseded by an instrument in writing executed by both Parties. This Agreement shall not be modified by course of performance, course of conduct or usage of trade.
Attachment A: Schedule CBP-E
Attachment B: Authorization for Participation in Aggregated Demand Response Programs Form
Attachment C: Aggregator Remove Form
H. Survival. Notwithstanding the expiration or termination of this Agreement, the Parties shall continue to be bound by all provisions of this Agreement which, by their nature, survive completion or termination, including but not limited to Sections I.H (Aggregator’s Responsibilities for Protecting Customer Privacy), III (Limitation of Liabilities), IV (Indemnification),VIII (Use of SCE Name and Marks in Third-Party Marketing Materials), XII (Confidentiality), XIII.C (Choice of Law), XIII.D (Resolution of Disputes).
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13 I. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
J. Headings. The headings contained in this Agreement are solely for the convenience of the Parties and shall not be used or relied upon in any manner in the construction or interpretation of this Agreement.
IN WITNESS WHEREOF, the authorized representatives of SCE and Aggregator have executed this Agreement as of the Effective Date.
SCE: AGGREGATOR:
SOUTHERN CALIFORNIA EDISON COMPANY ________________________________ By: By:
Signature: Signature:
Name: Name:
Title: Title:
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14 ATTACHMENT A
SCHEDULE CBP-E
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15 ATTACHMENT B
Authorization for Participation in Aggregated Demand Response Programs Form
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16 ATTACHMENT C
Aggregator Remove Form
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CAPACITY BIDDING PROGRAM
AGGREGATOR CREDIT APPLICATION
Section I: General Information - Aggregator
Entity Name: DBA:
Business Street Address:
City: State: Zip Code:
Mailing Street Address:
City: State: Zip Code:
Primary Phone Number: Alternate Phone Number:
Taxpayer ID Number: Social Security Number:
Type of Applicant Check One: Sole Proprietor General
Partnership
Limited
Partnership
Governmental Corporation
Principal
Owners/Officers:
Titles:
General Partners
Names:
Social Security
Numbers:
Section II: Credit Information - Aggregator
Does your entity have public debt? Yes No
Is your entity a publicly traded corporation? Yes No
Fiscal Year End (Month/Day):
Do you have a parent entity? If yes complete Sections III & IV Yes No Section III: General Information - Parent Entity
Individual Name/Business:
N
DBA:
Business Street Address:
City: State: Zip Code:
Mailing Street Address:
City: State: Zip Code:
Primary Phone Number: Alternate Phone Number:
Taxpayer ID Number: Social Security Number:
Type of Applicant Check One: Sole Proprietor General
Partnership
Limited
Partnership
Governmental Corporation
Principal
Owners/Officers:
Titles:
General Partners
Names:
Social Security
Numbers:
Section IV: Credit Information - Parent Entity
Does this entity have public debt? Yes No
Is this entity a publicly traded corporation? Yes No
Fiscal Year End (Month/Day):
Contact Name & Title (for Credit Concerns):
Contact Phone Number:
Signature: Phone Number:
Name (Printed): Date:
Title:
Version 1.1
2007.03.01
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Staff Report – Agenda Item 4
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: November 6, 2025
RECOMMENDATION
Receive and file.
MEETING REPORT
The Community Advisory Committee did not meet in October.
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Staff Report – Agenda Item 5
To: Board of Directors
From: Ted Bardacke, Chief Executive Officer
Subject: Battery Energy Storage Safety Presentation
Date: November 6, 2025
BACKGROUND
Grid-scale battery energy storage has expanded significantly in California over the past several years, growing from less than 1,000 Megawatts (MW) in 2020 to over 15,000 MW in 2025. Another 14,000 MW is expected to be online by 2028. CPA has contributed to this expansion, with 1,064 MW operational and 844 MW of additional capacity under contract and in development.
This expansion has had a significant and beneficial impact on the grid. There have been no Flex Alerts called for the past three years and both seasonal and hourly swings in energy prices have started to moderate. CPA has relied on its battery fleet to meet Resource Adequacy (RA) compliance obligations at increasingly stable prices while allowing it to integrate high levels of intermittent renewable energy onto the grid in a reliable way.1
With this increase in battery energy storage, there has been growing concerns about the safety of the technology. There have been 11 “thermal” (e.g. fire) incidents at battery storage facilities since 2021, including a high-profile one along the Monterrey Bay coast in Moss Landing earlier this year. Unrelated but newsworthy incidents involving vehicle 1 See this recent LA Times article for further background.
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Board of Directors Item 5
and home batteries during the Eaton and Palisades fires have played a part in raising the profile of the issue.
The technology, design, codes, and legislation regarding battery energy storage have all evolved in recent years in response to concerns and actual incidents. Major developments include:
• A shift to lithium iron phosphate (LFP) battery chemistry from previously used nickel manganese cobalt (NMC) chemistry. LFP batteries, while less efficient per square inch, are more stable and less prone to “thermal runaway”. • A move towards outdoor, metal container-based battery enclosures instead of indoor, building-based battery racks. Containers help prevent the spread of fire, should they occur.3
• National Fire Protection Association (NFPA) 855 battery fire standards that were first promulgated in 2020, have recently been updated and adopted by the State of California.
• The Governor signed SB 283 (Laird), which CPA supported. SB 283 provisions include: requiring "meet-and-confer" sessions with local fire authorities regarding design, potential fire risks, and emergency response plans before developers submit applications to their local authorities; enhanced pre-operational safety inspections by local fire departments and/or the State Fire Marshal; alignment between national NFPA 855 standards and California code; and directing the State Fire Marshal to consider building code provisions that would restrict the placement of energy storage systems to dedicated noncombustible buildings or outdoor installations.
Meanwhile, the benefits of siting battery facilities near load – efficiency, proximity to existing infrastructure, job creation, local tax revenue – is leading to an increased number of projects that are being proposed near population centers. CPA’s two shortlisted stand-3 The Moss Landing fire occurred in an indoor, building-based facility. Only 10 of California’s 214 utility-scale battery energy storage projects are located in buildings. None of CPA’s utility-scale battery projects are located in buildings.
Agenda Page 39
Board of Directors Item 5
alone battery energy storage proposals from the most recent Clean Energy and Reliability RFO are located in Los Angeles County. Concurrently, Ventura County passed a new battery energy storage zoning ordinance in early 2025, Los Angeles County is in the process of updating its regulations covering battery energy storage, and cities in both counties have project proposals before them.
To provide the Board with details from experts on the issue of battery energy storage safety, Scott Murtishaw, Executive Director of the California Energy Storage Association, and Assistant Chief Richard Stillwagon, Los Angeles County Fire Marshall will address the Board and be available to answer questions.
ATTACHMENTS
1. Speaker Bios
Agenda Page 40
Board of Directors Item 5
Speaker Bios
Scott Murtishaw is the Executive Director of the California Energy Storage Alliance.
Before joining CESA, he was a policy advisor at the Independent Energy Producers Association and the California Solar & Storage Association. He served as energy policy advisor to the President of the CPUC, where he played a key role in shaping the CPUC’s rate design, distributed energy resources, and climate policies. Earlier in his career, Scott authored studies on a wide variety of energy efficiency and climate policy topics as a researcher at the Lawrence Berkeley National Laboratory and served as a visiting researcher at the International Energy Agency.
Assistant Chief Richard Stillwagon heads up the Fire Protection Division of the Los Angeles County Fire Department and is Fire Marshall for Los Angeles County. In this role, he oversees adherence to fire codes and standards as well as incident investigations.
Assistance Chief Stillwagon has been a firefighter for more than 30 years, including 27 years with Los Angeles County.
Agenda Page 41
Staff Report – Agenda Item 6
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 $4.5 billion of Energy Prepayment Transactions
Date: November 6, 2025
RECOMMENDATION
(A) Adopt Resolutions Nos. 25-11-093, 25-11-094, 25-11-095, and 25-11-096 approving parameters under which up to a total of $4.5 billion of energy prepayment transactions can be completed with Goldman Sachs (GS), JPMorgan (JPM), 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. The authorizations in each of the Resolutions shall terminate on June 30, 2027. (B) Delegate authority to the Chief Executive Officer to select the Funding Recipient(s) for prepay transactions completed with GS, JPM, or MS.1 On October 23, 2025, the Executive Committee received an update on the proposed approach for future prepay transactions and provided its consensus support. On October 29, 2025, the Finance Committee recommended approval by the Board of the transaction approach and delegations described in Recommendations (A) and (B). 1 RBC’s parent company will serve as the Funding Recipient for prepay transactions completed with RBC.
Agenda Page 42
Board of Directors Item 6
BACKGROUND
In July 2024, the Board adopted Resolutions authorizing the issuance of up to $4.5 billion of energy prepay transactions on CPA’s behalf by CCCFA. CPA subsequently completed three prepay bond transactions consistent with the Board authority provided in July 2024.
The transactions resulted in an aggregate expected energy cost savings of $262 million:
• CPA’s third prepay bond transaction was completed in August 2024 in the par amount of $1,524 million. The transaction is expected to provide CPA with energy cost savings of $93 million over the initial eight-year period of the bond. • CPA’s fourth prepay bond transaction was completed in November 2024 in the par amount of $1,153 million. The transaction is expected to provide CPA with energy cost savings of $70 million over the initial eight-year period of the bond. • CPA’s fifth prepay bond transaction was completed in December 2024 in the par amount of $1,291 million. The transaction is expected to provide CPA with energy cost savings of $99 million over the initial eight-year period of the bond.
The three bonds issued in 2024 were additive to two prepay bond transactions completed by CPA in February and June of 2023. In aggregate, the five bond transactions are worth $5.925 billion and are providing CPA with average annual energy cost savings of approximately $45.3 million. Based on its existing portfolio of long-term renewable PPAs and assuming favorable market conditions, staff believe CPA can complete up to $4.5 billion of new prepay transactions before June 30, 2027.
Issuing prepay bonds requires the use of a conduit issuer. In July 2022, the Board voted for CPA to join the CCCFA, a California Joint Powers Authority and not-for-profit entity, as a Founding Member. Created in 2021, the sole purpose and reason for CCCFA’s formation was to serve as a conduit issuer for CCA energy prepay bonds. CCCFA has served as the conduit issue on all 24 prepay transactions completed by CCAs since fall 2021, offering a low-cost proven vehicle for issuing CCA prepay bonds.
As a Founding Member, CPA is represented on CCCFA’s Board of Directors; CPA CEO, Ted Bardacke, currently serves as CCCFA’s Board Chair. CCCFA adopts an annual Agenda Page 43
Board of Directors Item 6
budget covering operating expenses which are allocated equally to each member. The CCCFA JPA makes the following provisions to limit individual CCA Member liability:
• Pursuant to CCCFA’s Joint Powers Agreement, Section 2.01, no debt, liability, and obligation of CCCFA shall be a debt, liability any obligation of any Member. (Government Code 6508.1 authorizes this provision)
• The costs and expenses of each prepay transaction, including administrative costs of CCCFA relating to the prepay transaction, are allocated solely to the Member participating in such prepay transaction. CPA is not liable for any other Member’s prepay-related obligations.
DISCUSSION
2025 Prepay Bond Process
In October 2025, the Board approved service contracts with Municipal Capital Markets (MCM) and Chapman & Cutler (Chapman) to support the preparation of up to $4.5 billion of future CPA prepay transactions. Staff subsequently prepared transaction contracts with four prospective Underwriter & Prepaid Suppliers:
• GS (Underwriter) and J. Aron & Company (Prepaid Supplier) • JPM (Underwriter) and JPMorgan Ventures Energy Corporation (Prepaid Supplier)
• MS (Underwriter) and Morgan Stanley Capital Group (Prepaid Supplier) • RBC (Underwriter) and RBC Energy Prepay SPV (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 amount of bond proceeds over the same period. JPM has underwritten six gas prepay transactions in the past five years and recently added staff experienced in electric prepay transactions. Each of the four Underwriter & Prepaid Suppliers has completed one or more prepay transactions in the last twelve months. CPA views new entrants to the pool of qualified and experienced Underwriters & Prepaid Suppliers as a positive, offering a greater variety of credit counterparties and incentivizing greater competition.
Agenda Page 44
Board of Directors Item 6
It is estimated that each of the proposed energy prepayment transactions will save CPA between $5 million and $10 million annually in renewable energy procurement costs. The overall risks of prepay transactions are low and are generally confined to the loss of expected savings. Issuance cost risk, such as paying vendors and expenses, are approximately $330,000 and are limited to the unlikely event a transaction has already received a credit agency rating and/or a green bond certification and the bonds are marketed but not ultimately issued.
2 These risks are viewed by staff as reasonably low in
light of the significant financial savings that prepay bonds bring to CPA and its customers.
REQUESTED ACTION
The proposed Board Resolutions encompass the following approvals or authorizations relating to the execution of the future prepay transactions:
• Defines the parameters under which the prepay transactions can be completed; • Authorizes Staff to execute, or approve for distribution, documents and “form of” documents supporting the prepay transactions; 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 July 2024 to support its third, fourth, and fifth prepay transactions. Consistent with its approach in 2024, Staff are seeking authorization to issue up to a total of $4.5 billion of prepay energy bonds with any of the four named Underwriters & Prepaid Suppliers.
Authorizing multiple transactions with four Underwriters & Prepaid Suppliers for CPA’s next prepays is intended to:
• Enable CPA to transact expeditiously when market conditions are favorable; and 2 If the bond is issued, these costs are paid for out of bond savings.
Agenda Page 45
Board of Directors Item 6
• Ensure that CPA receives the best available pricing and terms from the most experienced and well-regarded Underwriters & Prepaid Suppliers in the market, thus maximizing renewable energy cost saving.
This approach allowed CPA to expeditiously complete three prepay transactions between August 2024 and December 2024 during a period of favorable market conditions and helped CPA achieve the highest average annual dollar savings among its CCA peer group.
In contrast with the Resolutions adopted by the Board in July 2024, the proposed Board Resolutions do not specify the number of prepay transactions that may be completed – only the total authorization limit of $4.5 billion. The Resolutions also add a time limit to the Board’s authorization, with the authorization expiring on June 30, 2027. The July 2024 Resolutions did not have an expiry date.
Prepay Transaction Parameters
Through the proposed Board Resolutions, the Board is being requested to define 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 $4.5 billion of prepay transactions in total (across all Underwriter & Prepaid Suppliers);
• That the aggregate bond principal of each prepay transaction will not exceed $1.5 billion. Proceeds will be applied to make the energy prepayment, to fund reserves, 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 Agenda Page 46
Board of Directors Item 6
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 the total cost of issuance (TCOI) shall not exceed 1.25% of the amount of bond proceeds.
• That the authority to complete any prepay bond transactions under the foregoing parameters terminates on June 30, 2027.
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, JPM, MS, and RBC:
• 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 to-be designated Prepaid Supplier governing the assignment of existing and future PPAs into the prepay project; 3
• Letter Agreement re: Limited Assignment Agreement – an agreement between CPA and to-be designated Prepaid Supplier to use the Form of Limited Assignment Agreement for future PPA assignments into the prepay project. For RBC, this 3 MS is proposing two Form of Limited Assignment Agreements (one with Prepay LLC and one with Morgan Stanley Capital Group) depending on the Funding Recipient selected by CPA staff.
Agenda Page 47
Board of Directors Item 6
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, to-be designated Prepaid Supplier and Prepay LLC, as applicable, and Custodian that creates a custody account for receipt of payments from that 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 is identical for all four 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:
• GS/JPM/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
Selection of Funding Recipient(s) for GS, JPM, or MS Transactions Staff recommend that the Board delegate authority to the CEO to select Funding Recipient(s) for transactions completed with GS, JPM, or MS in accordance with the parameters described in Board Resolution Nos. 25-11-093, 25-11-094, and 25-11-095.
Agenda Page 48
Board of Directors Item 6
The prepay structures utilized by GS, JPM, and MS allow CPA to elect to either use GS, JPM, or MS as a prepayment Funding Recipient or to use a third-party Funding Recipient, separate from GS, JPM, 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. Were CPA to elect to use a third-party Funding Recipient, J. Aron (GS), JPMorgan Ventures Energy Corporation (JPM), or MS Capital Group (MS) would serve as the Prepaid Supplier only. Should RBC be the underwriter and prepay supplier for a prepay bond, the RBC parent company will serve as the Funding Recipient.
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 $5 to $10 million on its energy costs as a result of each prepay transaction, with total savings of $15 to $30 million for the $4.5 billion of contemplated prepay transactions. The at-risk costs to CPA are approximately $330,000 per transaction in the event that no bond is issued after receiving a credit rating and being marketed as described in risk section above. None of the previous five CPA prepay bonds have faced this situation.
NEXT STEPS
If the Board adopts the recommended Resolutions, staff will finalize and execute documents with CCCFA, the Underwriters & Prepaid Suppliers, and service providers.
CPA staff will then submit the proposed prepay approach and transactions to the CCCFA Board for consideration at its upcoming November 13, 2025 meeting. Should the CCCFA Board provide approval, CPA staff anticipate that the prepay transactions would be executed between December 2025 and June 2027, providing additional cost savings to CPA as early as Fiscal Year 2026-27.
Agenda Page 49
Board of Directors Item 6
ATTACHMENTS
1. Presentation on Proposed Clean Energy Prepayment Transactions
2. Appendix A of the Preliminary Official Statement
3. Resolution No. 25-11-093
a. Clean Energy Purchase Contract (GS)
b. Operational Services Agreement (GS)
c. Memorandum of Understanding – CCCFA Prepay (GS)
d. Form of Limited Assignment Agreement (GS)
e. Letter Agreement re: Limited Assignment Agreements (GS) f. Consolidated, Amended and Restated PPA Custodial Agreement (GS)
4. Resolution No. 25-11-094
a. Clean Energy Purchase Contract (JPM)
b. Operational Services Agreement (JPM)
c. Memorandum of Understanding – CCCFA Prepay (JPM)
d. Form of Limited Assignment Agreement (JPM)
e. Letter Agreement re: Limited Assignment Agreements (JPM) f. PPA Custodial Agreement (JPM)
5. Resolution No. 25-11-095
a. Clean Energy Purchase Contract (MS)
b. Operational Services Agreement (MS)
c. Memorandum of Understanding – CCCFA Prepay (MS)
d. Form of Limited Assignment Agreement with MSCG (MS)
e. Form of Limited Assignment Agreement with Prepay LLC (MS) f. Letter Agreement re: Limited Assignment Agreements (MS) g. PPA Custodial Agreement (MS)
6. Resolution No. 25-11-096
a. Clean Energy Purchase Contract (RBC)
b. Operational Services Agreement (RBC)
c. Memorandum of Understanding – CCCFA Prepay (RBC)
d. Form of Limited Assignment Agreement (RBC)
e. PPA Custodial Agreement (RBC)
Agenda Page 50
Proposed Clean Energy Prepayment
Transactions
November 6, 2025
Agenda Page 51
Adopt Resolutions approving parameters under which up to $4.5 billion of transactions can be completed with Goldman Sachs (GS), Morgan Stanley (MS), Royal Bank of Canada (RBC), or JPMorgan (JPM) as CPA's Underwriter & Prepaid Supplier
Approve the delegation of authority to Staff to select the Funding Recipient(s) for prepayment transactions completed with GS, MS, and/or JPM.
Recommendation
2 Note: RBC’s parent company will serve as the Funding Recipient for any prepayment transactions completed with RBC and therefore does not need separate Funding Recipient authorization Agenda Page 52
Prepays are well-established financing mechanisms, grounded in US tax code, that allow CCAs and municipal utilities to leverage their status as issuers of tax-exempt debt to reduce energy costs (see slides 15-18 for an overview of prepay transactions) CPA completed five prepay transactions in 2023 and 2024, issuing $5.9 billion of prepay bonds leading to approximately $361 million of energy cost savings over the next eight years, an average annual savings of $45 million (see slides 19–23 for CPA prepay transaction summaries) On September 24, Staff provided the Finance Committee with an overview of CPA current contracts eligible for prepayment, previewed Staff’s recommendation to request approval for $4.5 billion of new prepay transactions, and a summary of providers needed to complete these transactions
On October 16, the Board approved service contracts with Municipal Capital Markets (MCM) and Chapman & Cutler (Chapman) to support the preparation and execution of up to four future CPA prepay transactions
On October 23, the Executive Committee provided input and support for CPA’s contracting approach for future prepays
On October 29, the Finance Committee recommended that the Board authorize Staff to execute up to $4.5 billion of prepay transactions and delegate authority to staff to select a funding recipient Background
3 Agenda Page 53
4 Consistent with the approach used in 2024, Staff are planning a two-step solicitation approach for future prepay transactions:
1.Staff is requesting the Board adopt four Resolutions enabling the completion of up to $4.5 billion of prepay transactions with any of four Underwriters & Prepaid Suppliers (described on slide 9) using Board-approved pro forma contracts and subject to certain transaction criteria
2.In advance of each prepay transaction, Staff will issue a solicitation for refreshed pricing from the four Underwriters & Prepaid Suppliers and identify the best partner with whom to transact (described on slide 8)
Authorizing multiple transactions and Underwriters & Prepaid Suppliers provides the following benefits:
Ensures that CPA receives best available pricing and terms from the most experienced and well-regarded Underwriters & Prepaid Suppliers in the market Provides flexibility to transact expeditiously when market conditions are favorable This two-step strategy delivered significant savings to CPA in 2024 (see next slide)
Recommended Approach for Upcoming Prepays
Agenda Page 54
5 Bond Series CCA Underwriter Transaction Date Par Amount ($M) Initial Period Savings ($M/yr) CCCFA 2021A MCE Goldman Sachs Nov-21 603 3.2
CCCFA 2021B SVCE/EBCE (Ava) Morgan Stanley Sep-21 1,235 4.2 CCCFA 2022A EBCE (Ava) Morgan Stanley Jun-22 931 4.8
CCCFA 2023A Pioneer CE Goldman Sachs Dec-22 460 2.4
CCCFA 2023B SVCE Morgan Stanley Jan-23 842 4.7
CCCFA 2023C CPA Goldman Sachs Feb-23 999 7.7
CCCFA 2023D CPA Goldman Sachs Jun-23 958 6.0
CCCFA 2023E EBCE (Ava) Morgan Stanley Aug-23 998 6.1
CCCFA 2023F 3CE Goldman Sachs Oct-23 648 5.0
CCCFA 2023G MCE Goldman Sachs Nov-23 1,038 6.8
CCCFA 2024A SVCE Morgan Stanley Jan-24 1,102 7.7
CCCFA 2024B CPA Goldman Sachs Aug-24 1,524 11.2
CCCFA 2024C PCE Goldman Sachs Sep-24 960 5.7
CCCFA 2024D CPA RBC Royal Bank Oct-24 1,153 8.9
CCCFA 2024E SJCP Morgan Stanley Nov-24 1,243 8.2
CCCFA 2024F SDCP Morgan Stanley Nov-24 1,001 6.7
CCCFA 2024G Sonoma Goldman Sachs Nov-24 776 6.3
CCCFA 2024H CPA Goldman Sachs Dec-24 1,291 11.5
CCCFA 2025A Valley CE Goldman Sachs Mar-25 493 3.4
CCCFA 2025B MCE Goldman Sachs Jun-25 1,063 6.3
CCCFA 2025D SDCP Morgan Stanley Jul-25 1,006 6.0
CCCFA 2025C Ava Morgan Stanley Sep-25 1,004 5.9
CCCFA 2025E Ava Goldman Sachs Oct-25 961 5.9
CCCFA 2025F SVCE Morgan Stanley Oct-25 844
CCCFA Total 23,131 144.5
CCA Prepay Bond Transactions (2021-2025)
CCAs issued
$23 billion of
prepay bonds
since 2021, of
which CPA
accounted for
25.6%
CPA completed
three prepay
transactions
between Aug
and Dec 2024
achieving the
highest
average annual
dollar savings
among its CCA
peer group
Agenda Page 55
6 Issuing bonds requires the use of a “conduit issuer.” CCCFA is a California Joint Powers Authority (JPA) and not-for-profit entity founded in 2021. Its sole purpose and reason for formation was to be a conduit issuer for CCA prepay bonds.
CCCFA served as the conduit issuer on all 24 prepay transactions completed by CCAs since fall 2021, offering a low-cost, proven vehicle for issuing CCA prepay bonds CPA joined CCCFA as one of five Founding Members in July 2022. Each Founding Member is represented on CCCFA’s Board by one Director. CPA CEO, Ted Bardacke, currently serves as its Board Chair.
Other CCAs are Associate Members, not represented on the Board but with the ability to use CCCFA as a conduit issuer
CCCFA adopts an annual budget covering operating expenses, which are allocated equally to each member. The JPA makes the following provisions to limit member liability:
Pursuant to CCCFA’s Joint Powers Agreement, Section 2.01, no debt, liability or obligation of CCCFA shall be a debt, liability or obligation of any Member. (Govt Code 6508.1 authorizes this provision) The costs and expenses of each prepay transaction, including administrative costs of CCCFA relating to the prepay transaction, are allocated solely to the Member(s) participating in such prepay transaction. CPA is not liable for any other Member’s prepay related obligations.
California Community Choice Financing Authority (CCCFA) Agenda Page 56
The need for renewable PPAs to be available
for assignment into prepay transactions
The legal prohibition of prepaying for an
annual volume of energy that exceeds CPA’s
annual load
The need to maintain some unassigned
renewable energy contracts to provide
portfolio planning flexibility
The need to have slightly more bond
authorization than available prepays to
accommodate interest rate fluctuations
Portfolio Planning Considerations
7 Prepaid PPAs
(Prepays 1-5)
PPAs available for
Future Prepays
Planning
Reserve
Total Long-Term RE PPAs
available for Prepays*
Estimated prepay
bond par value of
long-term RE PPAs
$6 billion
(55%)
~$4 billion
(35%)
~$1 billion
(10%)
~$11 billion
(100%)
* For planning purposes Staff have not considered additional long-term RE PPAs that would serve forecasted load growth.
Were CPA to enter into these PPAs, it would allow for additional prepay transactions not contemplated here.
Staff estimate CPA can complete up to $4.5 billion of prepay transactions in the next 18 months assuming favorable market conditions. This recommendation considers the following constraints:
Agenda Page 57
Selection of Underwriters & Prepaid Suppliers
8 In August 2025, Staff ran a solicitation process to identify qualified and experienced Underwriters & Prepaid Suppliers to structure and market energy prepayment transactions.
Staff received bids from:
Goldman Sachs (Underwriter) & J. Aron (Prepaid Supplier) Morgan Stanley (Underwriter) & Morgan Stanley Capital Group (Prepaid Supplier) RBC (Underwriter) & RBC Energy Prepay SPV (Prepaid Supplier) JPMorgan (Underwriter) & JPMorgan Ventures Energy Corporation (Prepaid Supplier) These banks are qualified and experienced providers capable of structuring and executing prepay transactions for CPA
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. The Board authorized transactions with these banks in July 2024.
JPM has underwritten six gas prepay transactions since 2020 and recently added staff experienced in electric prepay transactions; CPA views new entrants to the CA electric prepay market positively
Agenda Page 58
9 Board adoption of four Resolutions encompassing the following approvals or authorizations for each of the four 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 $4.5 billion of 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 Transactions must be completed no later than June 30, 2027
2. Execution of proposed CPA documents or document forms (described on Slide 11)
3. Direction to CCCFA to make payments out of bond proceeds to service providers for activities required to issue the prepay bonds
Summary of Recommended Board Action
Agenda Page 59
Resolutions approving the use of multiple
underwriters/suppliers
Approval of GS, MS, and RBC as Underwriters &
Prepaid Suppliers
Use of CCCFA as conduit issuer
Authorization of up to $4.5 billion of transactions
Sets a $1.5 billion size limit for each individual
prepay transaction
Establishes a minimum savings criteria
Sets a cap on Total Costs of Issuance
Authorizes use of “form of” prepay documents
18-month time limit on
authorization (2024 had no
time limit)
Removes limit on number
of prepay transactions up
to the $4.5 billion limit
(2024 specified a limit of
three transactions). Staff
expect to complete 3-6
transactions.
Addition of JPM as
approved Underwriter &
Prepaid Supplier
10 Comparison of Board Authorizations (Proposed 2025 vs 2024) What’s the Same
(Features identical to 2024 Approach)
What’s New
(Changes / Refinements)
Agenda Page 60
11 Each of the four Resolutions would authorize the execution or approval of the following documents and document forms with each of GS, JPM, 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 four 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 Summary of Prepaid Supplier Documents
Agenda Page 61
Adopt Resolutions approving parameters under which up to $4.5 billion of transactions can be completed with Goldman Sachs (GS), Morgan Stanley (MS), Royal Bank of Canada (RBC), or JPMorgan (JPM) as CPA's Underwriter & Prepaid Supplier
Approve the delegation of authority to Staff to select the Funding Recipient(s) for prepayment transactions completed with GS, MS, and/or JPM.
Recommendation
12 Note: RBC’s parent company will serve as the Funding Recipient for any prepayment transactions completed with RBC and therefore does not need separate Funding Recipient authorization Agenda Page 62
Questions?
Agenda Page 63
√ September 24 (Finance Committee) - Presented prepay portfolio overview; recommended Board approve service contracts with MCM and Chapman
√ October 16 (Board) - Approved service contracts with MCM, Chapman √ October 23 (Executive Committee) – Presented prepay plans; requested input √ October 29 (Finance Committee) – Recommended Board to approve additional prepay transactions as proposed
November 6 (Board) – Propose Resolutions authorizing Staff to execute up to $4.5 billion of prepay transactions with any of four Underwriters & Prepaid Suppliers given:
1. Utilization of an approved set of “Form of” contracts with each
2. Achievement of CPA’s minimum savings parameter
3. Time period for transaction execution and maximum bond issuance amount November 13 (CCCFA Board) - Propose Resolutions authorizing prepay transactions Board and Committee Timeline
14 Agenda Page 64
Prepay LLC
4 5
6 15
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)
The Bonds Prepaid Supplier
Issuer
(CCCFA)
Prepayment Transaction Diagram (with SPV)
Agenda Page 65
16 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 66
17 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
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18 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 68
19 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 69
20 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 70
21 California Community Choice Financing Authority (CCCFA) issued $1,524,180,000 of bonds on August 27, 2024. The bonds were issued at an average yield of 4.05%. The bonds received a “Green Bonds” designation from Kestrel Verifiers and were rated A1 by Moody’s.
Bonds were oversubscribed by 1.6x, attracting 38 bidders. Nearly all of bids came from major bonds and mutual funds, with the top 10 investors accounting for ~79% of bids. CPA’s name was known and well-regarded among investors.
CPA has assigned several PPAs into the prepay:
High Desert solar + storage (100 MW / 50 MW)
Arica solar + storage ( 93.5 MW / 71 MW)
SCE VAMO (annual quantity of 751,600 MWh, June 2025 – May 2026 only) Rexford solar + storage ( 300 MW / 240 MW, beginning June 2026) Golden Fields solar (40 MW, beginning June 2026)
Voyager wind (21.6 MW, beginning June 2026)
Solar Star 3 solar + storage (47 MW / 23 MW, beginning Q3 2026) During the initial period of the bonds (8.3 years), CPA will recognize energy cost savings of $93.0 million, or roughly $11.2 million annually CPA Prepay 3 – Transaction Summary
Agenda Page 71
22 California Community Choice Financing Authority (CCCFA) issued $1,152,995,000 of bonds on November 14, 2024. The bonds were issued at an average yield of 3.83%. The bonds received a “Green Bonds” designation from Kestrel Verifiers and were rated Aa1 by Moody’s.
Put bonds were oversubscribed by 1.1x, attracting 48 bidders, while there was an unsold serial bond balance of $37.2 million that was underwritten by RBC. Nearly all of bids came from major bonds and mutual funds, with the top 10 investors accounting for ~76% of bids.
CPA’s name was known and well-regarded among investors.
CPA has assigned two PPAs into the prepay:
Heber geothermal (14 MW)
Desert Quartzite solar + storage (300 MW / 150 MW)
During the initial period of the bonds (7.8 years), CPA will recognize energy cost savings of $70.0 million, or roughly $8.9 million annually CPA Prepay 4 – Transaction Summary
Agenda Page 72
23 California Community Choice Financing Authority (CCCFA) issued $1,290,750,000 of bonds on December 20, 2024. The bonds were issued at an average yield of 3.62%. The bonds received a “Green Bonds” designation from Kestrel Verifiers and were rated Aaa by Moody’s.
Bonds were oversubscribed by 2.8x, attracting 60 bidders. Nearly all of bids came from major bonds and mutual funds, with the top 10 investors accounting for ~62% of bids. CPA’s name was known and well-regarded among investors.
CPA has assigned one energy contract into the prepay:
SDCP PCC1 (average annual quantity of 840,750 MWh)
During the initial period of the bonds (8.6 years), CPA will recognize energy cost savings of $99.3 million, or roughly $11.5 million annually CPA Prepay 5 – Transaction Summary
Agenda Page 73
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 11,500 residential and commercial accounts in 2027 as it extends it service to two new member jurisdictions: Cudahy and Fillmore.
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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
La Cañada Flintridge Lynwood
Hermosa Beach Manhattan Beach
Malibu Monrovia
Moorpark Paramount
Port Hueneme 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 LA County Unincorporated Ventura County
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.
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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 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 53% residential and 47% commercial & industrial based on revenues.
Residential, small businesses, and medium businesses represent 85% 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.
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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 Lynwood
Moorpark
Paramount
Port Hueneme
Whittier
Unincorporated Los Angeles County*
100% Green Power
Agoura Hills Alhambra
Beverly Hills Calabasas
Camarillo Claremont
Culver City Hawthorne
Hermosa Beach La Canada Flintridge
Manhattan Beach Malibu
Ojai
Redondo Beach
Santa Monica
Sierra Madre
Thousand Oaks
West Hollywood
Unincorporated Los Angeles County
Monrovia
Oxnard
Rolling Hills Estates
Santa Paula
South Pasadena
Ventura
Unincorporated Ventura County
New Customers. In September 2025, the CPA Board of Directors authorized the offer of membership to two cities: Cudahy and Fillmore. The two cities subsequently adopted ordinances to join CPA's Joint Power Authority and, contingent on CPUC approval in Q1 of 2026, will begin receiving CPA service in 2027. CPA expects to enroll a total of approximately 11,500 customers from the two 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 * 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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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 opted 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 30-34% 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.
• In February 2025, CPA’s Board adopted interim rates for the period of March 1, 2025 through June 30, 2025. This interim rate adjustment was made following changes to SCE rates that became effective January 1, 2025, which had the net effect of increasing most CPA customer total bills by 9% relative to October 2024 levels. The FY2024/25 interim rate action returned targeted total bill comparisons to levels near the targets for residential and small/medium businesses previously approved by CPA’s Board in June 2024, as described below:
• 100% Green Power rate product targets a 6% total bill premium compared to SCE rates • Clean Power rate product targets a 1% total bill premium compared to SCE rates • Lean Power rate product targets a 0% total bill premium compared to SCE rates • In June 2025, CPA’s Board adopted rates for FY2025/26 consistent with the FY2025/26 Budget.
The FY2025/26 rates target the following total bill comparisons for residential and small/medium businesses:
• 100% Green Power rate product targets a 6% total bill premium compared to SCE rates Agenda Page 78
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• Clean Power rate product targets a 0% total bill premium compared to SCE rates • Lean Power rate product targets a 2% total bill discount compared to SCE rates 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 2024, CPA met 79.8% of its total retail sales with eligible RPS resources, above the 2024 RPS percentage target of 44%.
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 2025-2035.
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 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 Agenda Page 79
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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 1,064.5 MW of operating and dispatchable energy storage 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 Agenda Page 80
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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 Solar Star 3 Kern County, CA October 2026 23 / 92
Solar Star 4 Kern County, CA October 2026 23 / 92
Key Long Duration Fresno County, CA December 2026 75/600 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 2028 93 / 372
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.
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A-9
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, 2024 and June 30, 2025 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 $120,000,000. The agreement expires on March 31, 2026.
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RESOLUTION NO. 25-11-093
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. 25-11-093
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 separate clean energy prepayment transactions (each a “Prepayment Transaction”); WHEREAS, Clean Power Alliance has determined to authorize pursuant to this Resolution and accompanying Resolutions 25-11-094, 25-11-095, and 25-11-096 (each a “Prepayment Resolution” and collectively, the “Other Prepayment Resolutions”), 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 Prepayment Transactions totaling more than $4.5 billion in an aggregate principal amount of bonds 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 & Company LLC, a New York limited liability company (“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, 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, J. Aron, and acknowledged by the Issuer;
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RESO NO. 25-11-093
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 has also been submitted to this meeting a form of the following additional document 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. 25-11-093
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) the total principal amount of the aggregate Prepayment Transactions shall not exceed $4.5 billion;
(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) 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.
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
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RESO NO. 25-11-093
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 actions and approvals authorized in Sections 1-7, inclusive, of this Resolution shall terminate on June 30, 2027.
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 6th day of November 2025.
____________________________
Deborah Klein Lopez, Chair
ATTEST:
_________________________
Gabriela Monzon, Secretary
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RESO NO. 25-11-093
EXHIBIT A
CPA 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 [____], 2025
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-i-TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS ........................................................................................................2 Section 1.1 Defined Terms ................................................................................................2 Section 1.2 Definitions; Interpretation .............................................................................13 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 ..............................................................................14 ARTICLE III. SALE AND PURCHASE; PRICING ...............................................................14 Section 3.1 Sale and Purchase of Product ........................................................................14 Section 3.2 Payments .......................................................................................................14 Section 3.3 No Obligation to Take Base Quantities ........................................................14 Section 3.4 Annual Refund ..............................................................................................14 Section 3.5 Reset Period Remarketing .............................................................................15 ARTICLE IV. FAILURE TO SCHEDULE PRODUCT .........................................................16 Section 4.1 Issuer’s Failure to Schedule Base Quantity (Not Due to Force Majeure) ........................................................................................................16 Section 4.2 Project Participant’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 .........................................17 Section 4.4 Assigned Products .........................................................................................17 Section 4.5 Sole Remedies ...............................................................................................17 ARTICLE V. DELIVERY POINTS; SCHEDULING .............................................................17 Section 5.1 Delivery Points ..............................................................................................17 Section 5.2 Transmission and Scheduling .......................................................................18 Section 5.3 Title and Risk of Loss ...................................................................................18 Section 5.4 PCC1 Product and Long-Term PCC1 Product. ............................................18
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-ii-Section 5.5 Communications Protocol .............................................................................21 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 ...........................................................................................23 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 ...........................................................................................24 Section 7.3 Assistance with Sales to Third Parties ..........................................................24 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 ..............................................................................28 Section 8.4 Continuing Disclosure ..................................................................................28 ARTICLE IX. TAXES.................................................................................................................28 ARTICLE X. JURISDICTION; WAIVER OF JURY TRIAL ...............................................28 Section 10.1 Consent to Jurisdiction ..................................................................................28 Section 10.2 Waiver of Jury Trial ......................................................................................29 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 ...................................30 Section 12.1 Compliance with Laws .................................................................................30 Section 12.2 Contests .........................................................................................................30 Section 12.3 Defense of Agreement ..................................................................................30 ARTICLE XIII. ASSIGNMENT ................................................................................................30 ARTICLE XIV. PAYMENTS.....................................................................................................31 Section 14.1 Monthly Statements ......................................................................................31 Section 14.2 Payments .......................................................................................................32 Section 14.3 Payment of Disputed Amounts .....................................................................32 Section 14.4 Late Payment ................................................................................................33 Section 14.5 Audit; Adjustments .......................................................................................33 Section 14.6 Netting; No Set-Off.......................................................................................33 Section 14.7 Rate Covenant ...............................................................................................33 ARTICLE XV. [RESERVED] ....................................................................................................34 ARTICLE XVI. NOTICES .........................................................................................................34 ARTICLE XVII. DEFAULT; REMEDIES; TERMINATION ...............................................34 Section 17.1 Issuer Default ................................................................................................34 Section 17.2 Project Participant Default ............................................................................35 Section 17.3 Automatic Non-Default Termination Event .................................................36 Section 17.4 Remedies Upon Default ................................................................................36 Section 17.5 Termination of Master Power Supply Agreement ........................................37 Section 17.6 Limitation on Damages .................................................................................38 ARTICLE XVIII. MISCELLANEOUS .....................................................................................38 Section 18.1 Indemnification Procedure. ...........................................................................38 Section 18.2 Deliveries ......................................................................................................39 Section 18.3 Entirety; Amendments ..................................................................................39 Section 18.4 Governing Law .............................................................................................39 Section 18.5 Non-Waiver ...................................................................................................39 Section 18.6 Severability ...................................................................................................39
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-iv-Section 18.7 Exhibits .........................................................................................................40 Section 18.8 Winding Up Arrangements ...........................................................................40 Section 18.9 Relationship of Parties ..................................................................................40 Section 18.10 Immunity .......................................................................................................40 Section 18.11 Rates and Indices ..........................................................................................40 Section 18.12 Limitation of Liability ...................................................................................40 Section 18.13 Counterparts; Electronic Signatures .............................................................41 Section 18.14 Third Party Beneficiaries; Rights of Trustee ................................................41 Section 18.15 No Recourse to Members of Project Participant ...........................................41 Section 18.16 Waiver of Defenses .......................................................................................42 Section 18.17 Rate Changes ................................................................................................42 Exhibit A-1 — Base Quantities; Base Delivery Point; Commodity Reference Prices Exhibit A-2 — EPS Energy Period Monthly Projected Quantity Exhibit A-3 — Annual Quantity
Exhibit B — Notices
Exhibit C — Remarketing Termination Notice
Exhibit D — Federal Tax Certificate
Exhibit E — Forms of Project Participant’s Legal Opinions 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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-1-
CLEAN ENERGY PURCHASE CONTRACT
This Clean Energy Purchase Contract (this “Agreement”) is made and entered into as of [____], 2025 (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 (“Project Participant”).
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 [__] LLC, a Delaware limited liability company (“Prepay LLC”) (or Prepay LLC’s designee) and a wholly-owned subsidiary of The Goldman Sachs Group, Inc., pursuant to a Master Power Supply Agreement, dated as of [____], 2025 (the “Master Power Supply Agreement”), to meet a portion of the Product supply requirements of Project Participant through a discounted clean energy purchase product (the “Clean Energy Project”);
WHEREAS, Project Participant 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, Project Participant 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, Project Participant 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 Project Participant such supplies of Product under the terms and conditions set forth in this Agreement;
WHEREAS, concurrently herewith, Project Participant has assigned to J. Aron (as defined below) certain Assigned Rights and Obligations (as defined below), including the right to receive Assigned Products (as defined below), which Assigned Products 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 Project Participant hereunder; and
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-2-
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 Project Participant (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:
“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 Quantity” means, with respect to each Contract Year of the Delivery Period, the quantity (in MWh) of Assigned Product for such Contract Year as set forth on Exhibit A-3; provided that the Annual Quantity for any Contract Year shall be reduced by the aggregate amount of any quantities of Base Product required to be remarketed under this Agreement for any given Contract Year.
“Annual Refund” means the annual refund, if any, to be provided to the Project Participant and calculated pursuant to the procedures specified in Section 3.4. “APC Contract Price” means the Day-Ahead Average Price with respect to the Monthly Projected Quantities for any Assignment Period. “APC Party” has the meaning specified in Exhibit F.
“Applicable Project” has the meaning specified in Exhibit F.
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“Assignable Power Contract” has the meaning specified in Section 6.1. “Assigned Delivery Point” means, with respect to any Assigned Energy, the Assigned Delivery Point as set forth in the applicable Assignment Agreement 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 pursuant to any Assigned Rights and Obligations.
“Assigned PPA” means any power purchase agreement that is assigned pursuant to an Assignment Agreement in accordance with the terms of this Agreement. “Assigned Products” means, as applicable, PCC1 Product, Long-Term PCC1 Product, Assigned Energy, Assigned RECs and any other Product included in an Assignment Agreement, subject to the limitations for such other Product set forth in Exhibit F. “Assigned RECs” means any RECs associated with PCC1 Product or Long-Term PCC1 Product to be delivered to J. Aron 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 Project Participant, J. Aron and the APC Party, approved by Issuer, in the form attached hereto as Annex I to Exhibit F (with such changes thereto as may be mutually agreed upon by Project Participant, 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.
“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 to be 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
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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.
“Billing Statement” has the meaning specified in Section 14.1(b). “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 other 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 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.
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“Code” means the Internal Revenue Code of 1986, as amended. “Commercially Reasonable” or “Commercially Reasonable Efforts” means, with respect to any decision, purchase, sale or other action required to be made, attempted or taken by a Party under this Agreement, such decision or efforts as a reasonably prudent Person would make or undertake, as the case may be, for the protection of its own interest under the conditions affecting such decision, purchase, sale or other action. For the avoidance of doubt, the reasonableness of any action taken by a Party under this Agreement shall be determined at the time of such action, taking into account the facts, circumstances and competitive environment surrounding such 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, 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 the Monthly Projected Quantities and any Delivery Hour, (A) the Day-Ahead Average Price for such Delivery Hour at the Assigned Delivery Point less (B) the product of the Fixed Price for Monthly Projected Quantities multiplied by the Monthly Discount Percentage and (iii) with respect to Monthly Excess Quantities, the contract price then in effect under the applicable Assigned PPA for such Assigned Products. For the avoidance of doubt, the Contract Price for Assigned Energy is inclusive of any amounts due in respect of other Assigned Products. “Contract Year” means each period of 12 Months from [____] until [____] during the Delivery Period.
“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 Monthly Projected Quantities, the result of (i) (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; plus (ii) $[____]/MWh. As used in this definition, “Pricing Interval” means the unit of time for which CAISO establishes a separate price.
“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.
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“Delivering Entity” has the meaning specified in the Master Power Supply Agreement.
“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” means that certain Electricity Purchase, Sale and Service Agreement dated as of [____], 2025, by and between J. Aron and Prepay LLC, which provides for the delegation by Prepay LLC to J. Aron of Prepay LLC’s Product sale and delivery obligations under 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 Project Participant can contract for and purchase in compliance with EPS requirements that are applicable to Project Participant. “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 Project Participant in the form attached as Exhibit D.
“FERC” means the Federal Energy Regulatory Commission or any successor thereto.
“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
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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 Monthly Projected Quantities, 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 Project Participant’s markets; (ii) Project Participant’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 second 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.
“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.
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“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 Period” means the Assignment Period 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 Project Participant 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 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 pursuant to any Assigned Rights and Obligations.
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“LPT” means the local prevailing time then in effect in the State of California. “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. “Monthly Excess Quantity” means, for any Month, the amount, if any, by which the total quantity (in MWh) of Assigned Product delivered under an Assigned PPA in such Month exceeds the Monthly Projected Quantity for such Assigned PPA for such Month. “Monthly Projected Quantity” means, with respect to each Assigned PPA and each Month of the Assignment Period for each Assigned PPA, the quantity (in MWh) of Assigned Product for such Month as set forth on Exhibit A-2 for such Assigned PPA (as such Exhibit A-2 may be updated from time to time in accordance with Article VI). “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 pursuant to any Assigned Rights and Obligations.
“Person” means any individual, limited liability company, 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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“PPA Custodial Agreement” means that certain PPA Custodial Agreement, dated as of [____], 2025, by and among Project Participant, 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 Project Participant under this Agreement, together with Products that (i) Project Participant is obligated to take under a long-term agreement, which Products either have been purchased by Project Participant 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 in an Assignment Agreement, associated RECs or other products related to the foregoing; provided that the inclusion of any Product in an Assignment Agreement is subject to the limitation set forth in Exhibit F. “Project Participant” has the meaning specified in the preamble. “Project Participant Default” has the meaning specified in Section 17.2. “Project Participant’s Statement” has the meaning specified in Section 14.1(a). “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 Entity” has the meaning specified in the Master Power Supply Agreement.
“Remarketing Termination Deadline” means, for any Reset Period, the last date and time by which Project Participant may provide a Remarketing Termination 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 Project Participant, acting in a Commercially Reasonable manner, purchases at the applicable Delivery Point Replacement Product for such Shortfall Quantity, plus (i) costs reasonably incurred by Project Participant in purchasing Replacement Product, and (ii) additional transmission charges, if any, reasonably incurred by Project Participant to the applicable Delivery Point, or at Project Participant’s option, the market price at the Delivery Point for such Product not delivered as determined by Project Participant in a Commercially Reasonable manner.
The Replacement Price for any Shortfall Quantity shall not include any administrative or other internal costs incurred by Project Participant 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 Project Participant 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 Project Participant 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
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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, Project Participant and/or their designated representatives, including each Party’s Transmission Providers, if 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 Project Participant to or from the Delivery Point. “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. “Trustee” means U.S. Bank Trust Company, National Association, a national banking association, and its successors as trustee under the Trust Indenture. “Utility Revenues” means all income, rents, rates, fees, charges and other moneys derived from the ownership or operation of Project Participant’s electric system, including, without limiting the generality of the foregoing, (1) all income, rents, rates, fees, charges, or other moneys derived by the Project Participant 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 Project Participant’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 Project Participant’s electric system by or pursuant to law, (3) deferred revenues and moneys maintained in the Project Participant’s operating reserve fund and (4) such other income, charges, revenue or moneys maintained in reserves as the Project Participant may specify in a written order of the Project Participant 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 Project Participant; and (B) such other income, charges, revenue or moneys as the Project Participant may specify in a written order of the Project Participant filed with the Issuer, provided that such written order of the Project Participant confirms that, following the filing of such written order of the Project Participant, (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 Project Participant 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).
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“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.
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 Project Participant shall commence at the beginning of the Delivery Period and, except for any Reset Period for which a Remarketing Termination Notice is in effect as provided in Section 3.5(b) shall continue throughout the Delivery Period.
Section 2.2 Nature of Clean Energy Project. Project Participant acknowledges and agrees that Issuer will meet its obligations to provide Product to Project Participant under this Agreement exclusively through its purchase of Product from Prepay LLC or the Delivering Entity, as applicable, 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 Project Participant hereunder are subject to the condition precedent that Issuer shall have entered into the Master Power Supply Agreement and shall have issued the Bonds.
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Section 2.4 Pledge of this Agreement. Project Participant 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
Section 3.1 Sale and Purchase of Product. Issuer shall sell and deliver or cause to be delivered to Project Participant, and Project Participant 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 Monthly Projected Quantity delivered to J. Aron in each Month of the Delivery Period pursuant to the Assignment Agreements. The Parties acknowledge and agree that Issuer’s delivery obligation for (i) Assigned Products will be measured on an annual basis and (ii) Base Products will be measured on an Hourly basis as set forth in the terms of this Agreement.
Section 3.2 Payments.
(a) For each Month for which an EPS Energy Period is in effect at the start of such Month, Project Participant shall pay Issuer the Contract Price multiplied by the Monthly Projected Quantity actually delivered for such Month, provided that (x) Issuer shall owe a payment to Project Participant to the extent that the Contract Price for such Monthly Projected Quantity is negative and (y) Project Participant’s payment of the Project Participant Gross Amount (as defined in the PPA Custodial Agreement) to the PPA Custodian consistent with the terms of the PPA Custodial Agreement (x) shall satisfy Project Participant’s obligations hereunder with respect to Monthly Excess Quantities, and (y) any portion of such amount attributable to Monthly Excess Quantities shall be deemed to be paid by Project Participant 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.
(b) To the extent that Base Quantities are delivered hereunder in any Month, Project Participant shall pay Issuer the Contract Price multiplied by the Base Quantities actually delivered.
Section 3.3 No Obligation to Take Base Quantities. Notwithstanding anything to the contrary in this Agreement, Project Participant 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.
Section 3.4 Annual Refund. In addition to any Monthly Discount Percentage applied to Energy Scheduled hereunder, Issuer shall credit such Annual Refund to Project Participant as
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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 Project Participant 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 Project Participant, 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 Project Participant (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 Project Participant, 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) Project Participant 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 Project Participant’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 Project Participant 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 Project Participant 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 Project Participant 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 Available Discount Percentage set forth in the Reset Period Notice for such Reset
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Period (or any update thereof) sent to Project Participant 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 Project Participant actually purchases Replacement Product with respect to any Shortfall Quantity, then Issuer shall pay to Project Participant 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) Project Participant Obligation to Mitigate. Project Participant shall exercise Commercially Reasonable Efforts to mitigate Issuer’s damages paid by Issuer hereunder.
Section 4.2 Project Participant’s Failure to Schedule or Take Base Quantities (Not Due to Force Majeure). If, for any Delivery Hour during the Delivery Period, Project Participant 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 Project Participant shall remain obligated to pay Issuer the Contract Price for such Base Quantity. Issuer shall credit to Project Participant’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 Project Participants, 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) Project Participant 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 Products. Notwithstanding anything herein to the contrary, neither Project Participant nor Issuer shall have any liability or other obligation to one another for any failure to Schedule, take, or deliver Assigned Products.
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, Project Participant 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 Project Participant at the Primary Delivery Point shall be facilitated through submission of Inter-SC Trades, as defined in the CAISO Tariff (“ISTs”). Project Participant 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 Agreement. All other Assigned Products 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. Project Participant 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 Agreement.
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 Project Participant at the applicable Delivery Point.
The transfer of title and risk of loss for all Assigned Products 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 Products are 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 Project Participant for any such Claims relating to replacement costs, cover damages or similar liabilities that are payable to any Person because of Project Participant’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 Products.
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 Products are 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 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. As used above, “Seller” means “Issuer”, “Buyer” means “Project Participant”, and any other capitalized terms not otherwise defined herein shall have the meaning specified in the Assigned PPA. [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
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definition and attributes required for compliance with the California Renewables Portfolio Standard, as set forth in California Public Utilities Commission Decision 08-08-028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law.
As used above, “Seller” means “Issuer”, “Buyer” means “Project Participant”, and any other capitalized terms not otherwise defined herein shall have the meaning specified in the Assigned PPA. [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 “Project Participant”, 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 Products from the Applicable Project;
(ii) Issuer has not sold the Assigned Products or any REC or other attributes of the Assigned Products to be transferred to Project Participant to any other person or entity;
(iii) The Energy component of the Assigned Products produced by the Applicable Project and purchased by Issuer for resale to Project Participant hereunder is not being sold by Issuer back to the Applicable Project or APC Party;
(iv) Assigned Products to be purchased and sold pursuant to this Agreement has not been committed to another party;
(v) The Assigned Products are free and clear of all liens or other encumbrances;
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(vi) Issuer will deliver to Project Participant all Assigned Energy and associated RECs generated by the Applicable Project for PCC1 Product in compliance with the requirements set forth in California Public Utilities Code 399.16(b)(1) and the California RPS compliance requirements for Portfolio Content Category 1 as set forth in CPUC Decision 11-12-052, if applicable;
(vii) Issuer will deliver to Project Participant 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;
(viii) The Assigned Products supplied to Project Participant 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
(ix) Issuer will cooperate and work with Project Participant, 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 compliance with the California Long-Term Contracting Requirements, if applicable.
Issuer further represents and warrants to Project Participant that, to the extent that the PCC1 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 Project Participant in real time; and
(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.
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(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 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) Project Participant 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 Project Participant 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 Project Participant 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 Project Participant hereunder, provided that any associated Renewable Energy Credits and other Assigned Products are also delivered to Project Participant.
Section 5.7 Assigned Products. 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, Project Participant agrees to exercise Commercially Reasonable Efforts to assign the Initial Assigned Rights and Obligations to J. Aron.
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(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 Rights and Obligations, Project Participant shall exercise Commercially Reasonable Efforts and cooperate with J. Aron in good faith to assign a portion of Project Participant’srights and obligations (the “Assigned Rights and Obligations”) under one or more power purchase agreements (each such agreement, an “Assignable Power Contract”) pursuant to which Project Participant 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 Products 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 Project Participant hereunder, and, in such case, Project Participant 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 Project Participant’s prior written consent, with such consent not to be unreasonably withheld, provided, for the avoidance of doubt, that it shall be reasonable for Project Participant to withhold its consent based on the requirements of the EPS or other regulatory requirements;
(ii) Issuer and Project Participant 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
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(iv) during a J. Aron EPS Energy Period, if requested by J. Aron, Project Participant shall continue to exercise Commercially Reasonable Efforts and cooperate with J. Aron in good faith to assign Assigned Rights and Obligations to J. Aron under an Assignable Power Contract. (d) Amendments. Project Participant 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 Project Participant 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 Project Participant’s Base Quantities pursuant to the provisions of Exhibit C to the Master Power Supply Agreement, subject to the following:
(a) Project Participant’s and J. Aron’s obligations set forth in Section
6.1 shall continue to apply; and
(b) Project Participant 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 third 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) Project Participant makes a payment for such amounts to the applicable APC Party, Project Participant shall provide notice thereof to Issuer upon Project Participant’s payment to the applicable APC Party and Issuer shall make a payment to Project Participant in the amount of such non-payment.
ARTICLE VII.
USE OF PRODUCT
Section 7.1 Tax Exempt Status of the Bonds. Project Participant 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, Project Participant agrees that it will (a)
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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. Project Participant 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. Project Participant 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 Project Participant 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 Products less than the Annual Quantity is delivered hereunder in any Contract Year 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), then (b) Issuer is required under Section 3.3 to cause Base Quantities that otherwise would be delivered hereunder to be remarketed or (c) notwithstanding Project Participant’s compliance with Section 7.1, Project Participant does not require all or any portion of the Monthly Projected Quantity to meet its requirements for Energy that it is obligated to purchase under this Agreement as a result of (i) insufficient demand by Project Participant’s retail customers or (ii) a change in Law, Project Participant 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 the Delivering Entity, as permitted by the Master Power Supply Agreement, sell such portion of such Base Quantities or Monthly Projected Quantity (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 the Remarketing Entity makes such a sale under Exhibit C to the Master Power Supply Agreement, Issuer shall credit against the amount owed by Project Participant 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 Project Participant’s other obligations under this Article VII, Project Participant 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.
Project Participant agrees that it will provide such additional information, records and certificates as Issuer may reasonably request to confirm Project Participant’s compliance with this Section 7.4.
Section 7.5 Remediation.
(a) The Parties acknowledge that Project Participant 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
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Project Participant’s Product needs. To the extent Project Participant does so, Project Participant shall (a) exercise Commercially Reasonable Efforts to use any Disqualified Sale Proceeds of such remarketing to purchase Products (other than Priority Products) that Project Participant 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 Monthly Projected 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), Project Participant 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 Project Participant’s obligations under this Section 7.5(b), Project Participant shall deliver a remediation certificate to Issuer and the Remarketing Entity 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 (x) Monthly Excess Quantities shall be applied to remediate any such Ledger Entries and no remediation certificate shall be required with respect to purchases of Monthly Excess Quantities applied to remediate Ledger Entries, and (y) Monthly Excess Quantities applied to reduce Ledger Entries shall not credit toward the satisfaction of the Annual Quantity for the Contract Year in which such Monthly Excess Quantities are delivered. For Ledger Entries remediated under this Section 7.5(b) that have not otherwise been remediated by the Remarketing Entity pursuant to the remarketing provisions of the Master Power Supply Agreement, Issuer shall pay Project Participant 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 Project Participant provides a certificate under this Section 7.5(b) evidencing such remediation.
Section 7.6 Remediation; Ledger Entries; Redemption.
(a) Remediation. To track compliance with the requirements of Section 7.5(a), Project Participant 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 Project Participant to any Person in a transaction that does not comply with the Qualifying Use
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Requirements and (ii) have not been remediated by Project Participant 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”). Notwithstanding the foregoing, Purchaser shall not be required to provide such quarterly report for any quarter during which there are no Disqualified Sale Units and Disqualified Sale Proceeds.
(b) Ledger Entries. Issuer shall report such unremediated Disqualified Sale Proceeds and the associated Disqualified Sale Units to the Remarketing Entity for addition to the remarketing ledgers maintained by the Remarketing Entity 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. Notwithstanding the foregoing, Issuer shall not be required to provide such report for any quarter during which there are no Disqualified Sale Units and Disqualified Sale Proceeds. (c) Transfers to Trustee. Project Participant 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 Project Participant as the representing Party, Project Participant 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 Project Participant (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
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Products 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 Products 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. Project Participant agrees to provide to Issuer:
(a) such financial and operating information as may be requested by Issuer, including Project Participant’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 Project Participant 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 Project Participant to comply with such agreement, including without limitation the remedies of mandamus and specific performance.
ARTICLE IX.
TAXES
As between Issuer and Project Participant, 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 Products) delivered pursuant to this Agreement arising prior to the applicable Delivery Point and (ii) indemnify Project Participant and its Affiliates for any such taxes paid by Project Participant or its Affiliates. As between Issuer and Project Participant, Project Participant 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, Project Participant 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
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withdrawal of the then-current ratings assigned by such Rating Agencies to the Bonds; or (ii) written confirmation from each of the applicable Rating Agencies, that the assignee has an outstanding long-term senior, unsecured, unenhanced debt rating equivalent to or higher than the ratings assigned by the applicable Rating Agencies 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) Project Participant’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, Project Participant shall deliver to Issuer a statement (a “Project Participant’s Statement”) listing any amounts due to Project Participant 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, Issuer shall deliver a statement (a “Billing Statement”) to Project Participant indicating (i) the total amount due to Issuer for Product delivered in the prior Month, (ii) any other amounts due to Issuer or Project Participant in connection with this Agreement with respect to the prior Months, and (iii) the net amount due to Issuer or Project Participant; provided that invoicing for Monthly Excess Quantities shall occur under the PPA Custodial Agreement. (ii) For each Month of any Assignment Period, the Billing Statement prepared by Issuer shall assume that all Monthly Projected Quantities under each Assigned PPA were delivered for such Month. To the extent that a Billing Statement subsequently delivered under the PPA Custodial Agreement reflects that less than the Monthly Projected Quantities were actually delivered under any such Assigned PPA, then (A) the previously delivered Billing Statement shall be deemed to be updated in accordance with such Billing Statement; and (B) Issuer shall owe a resettlement payment to Project Participant in an amount equal to the resettlement payment owed by Prepay LLC to Issuer under [Section
14.1(b)(ii)] of the Master Power Supply Agreement. The Parties acknowledge and agree that J. Aron shall have a separate resettlement payment obligation with
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respect to the amounts described in the clause (B) 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 Project Participant, then Project Participant shall remit such amount to the Trustee for the benefit of the Issuer by wire transfer (pursuant to the Trustee’s instructions for amounts due under this Agreement, provided that amounts due from Project Participant with respect to Monthly Excess Quantities shall be paid pursuant to the terms of the PPA Custodial Agreement), 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 Project Participant by wire transfer (pursuant to Project Participant’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.
(b) No Duty to Estimate. If Project Participant fails to issue a Project Participant’s Statement with respect to any Month, Issuer shall not be required to estimate any amounts due to Project Participant for such Month, provided that Project Participant may include any such amount on subsequent Project Participant’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 Project Participant disputes any amounts included in a Billing Statement, Project Participant 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 Project Participant may have; provided, however, that Project Participant shall have the right, after payment, to dispute any amounts 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 Project Participant’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.
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Section 14.4 Late Payment. If Project Participant 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 Project Participant’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 Project Participant’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 Project Participant’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 Project Participant shall be made without set-off or counterclaim of any kind.
Section 14.7 Rate Covenant. Project Participant 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 Project Participant, in its discretion, may apply any legally available moneys to the payment of amounts due under this Agreement. Project Participant hereby 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 Project Participant to pay to Issuer all amounts payable under this Agreement and to pay all other amounts payable from the revenues of Project Participant’s electric system, and to maintain any reserves as required by the Project Participant’s reserve policy. Project
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Participant 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 Project Participant 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 Project Participant for the sale of electricity or the provision of transmission, distribution or other services to its customers. Project Participant 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, Project Participant in connection with its electric system, Project Participant 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:
(a) any representation or warranty made by Issuer in this Agreement shall prove to have been incorrect in any material respect when made; or
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(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 Project Participant Default. Each of the following events shall constitute a “Project Participant Default” under this Agreement:
(a) Project Participant fails to pay when due any amounts owed to Issuer pursuant to this Agreement and such failure continues for three Days following receipt by Project Participant of written notice thereof;
(b) Project Participant (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 Project Participant 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 Project Participant of written notice thereof; (d) Project Participant 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 Project Participant of notice thereof; or (e) Project Participant shall have failed to establish, maintain, or collect rates or charges adequate to provide Utility Revenues sufficient to enable Project Participant to pay all amounts due to Issuer under this Agreement in accordance with Section 14.7 (Rate Covenant), and
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such failure continues for more than 30 days following the earlier of receipt by Project Participant of notice thereof.
Section 17.3 Automatic Non-Default Termination Event. Project Participant’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 Project Participant 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) Project Participant shall exercise its right to terminate any Assignment Agreements in effect.
(ii) If at any time a Issuer Default or a Project Participant 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 Project Participant 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 Project Participant 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 Project Participant 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.
(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
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Project Participant Default, Issuer may suspend its performance hereunder and discontinue the supply of all or any portion of the Product otherwise to be delivered to Project Participant by it under this Agreement. If Issuer exercises its right to suspend performance under this Section
17.4(b), Project Participant 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 Project Participant of all amounts then due and payable under this Agreement and (ii) unless otherwise agreed by Issuer, payment in advance by Project Participant 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 Project Participant 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 Project Participant 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 clause (i) of 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 Project Participant under this Agreement shall terminate, and (iii) the obligation of Project Participant 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. Project Participant 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, and Project Participant’s obligation to purchase and receive deliveries under this Agreement shall terminate upon the termination of deliveries of Product to Issuer under the Master Power Supply Agreement and (iii) in either event described in clauses (i) or (ii), Project Participant shall exercise its right to terminate any Assignment Agreements in effect. Issuer shall provide notice to Project Participant of any early termination date of the Master Power Supply Agreement or any termination of deliveries of Product to Issuer under 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.
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Section 17.6 Limitation on Damages. THE PARTIES CONFIRM THAT THE
EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS 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
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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.
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, Project Participant 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, Project Participant shall deliver to Issuer opinions of counsel to Project Participant covering the matters set forth in the forms attached hereto as Exhibit E; and
(d) on the Bond Closing Date, Project Participant 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
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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.
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 Project Participant 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
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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.
Section 18.13 Counterparts; Electronic Signatures. 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. Each of the Parties agrees that the transaction consisting of this Agreement may be conducted by electronic means. Each Party agrees, and acknowledges that it is such Party’s intent, that if such Party signs this Agreement using an electronic signature, it is signing, adopting, and accepting this Agreement and that signing this Agreement using an electronic signature is the legal equivalent of having placed its handwritten signature on this Agreement on paper. Each Party acknowledges that it is being provided with an electronic or paper copy of this Agreement in a usable format.
Section 18.14 Third Party Beneficiaries; Rights of Trustee. Project Participant acknowledges and agrees that (a) Issuer will pledge and assign its rights, title and interest in this Agreement and the amounts payable by Project Participant 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 Project Participant’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 this Agreement relating to the Remarketing Entity, 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 Project Participant Default under Section 17.2(a), (i) Prepay LLC may, to the extent provided for in, and in accordance with Exhibit E to the Master Power Supply Agreement, take assignment from Issuer of receivables owed by Project Participant 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 Project Participant’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 Project Participant’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. Project Participant may rely on notices or other actions taken by Issuer or the Trustee and Project Participant 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 Project Participant. Project Participant 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. Project Participant shall
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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 Project Participant’s constituent members, or the employees, directors, officers, consultants or advisors or Project Participant 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 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 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
EPS ENERGY PERIOD MONTHLY PROJECTED QUANTITIES
[To be attached.]
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A-3
EXHIBIT A-3
ANNUAL QUANTITY
[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 PROJECT
PARTICIPANT: Clean Power Alliance of Southern California 801 South Grand Avenue, Suite 400
Los Angeles, CA 90017
Email: [email protected]
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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 [__] LLC
c/o J. Aron & Company LLC
200 West Street
New York, NY 10282
U.S. Bank Trust Company, National Association
2 Concourse Parkway, Suite 800
Atlanta, Georgia 30328
Attention: Mark Hallam
Email: [email protected]
To the Addressees:
The undersigned, duly authorized representative of Clean Power Alliance of Southern California (the “Project Participant”), is providing this notice (the “Remarketing Termination Notice”) pursuant to the Clean Energy Purchase Contract, dated as of [____], 2025 (the “Clean Energy Purchase Contract”), between California Community Choice Financing Authority and Project Participant. 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 Project Participant 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:
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 [____], 2025 (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 (“Project Participant”). 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 Project Participant 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 Project Participant’s use of Energy acquired pursuant to the Clean Energy Purchase Contract and certain funds and accounts of Project Participant will affect the Bonds’ qualification for such tax exemption.
NOW, THEREFORE, PROJECT PARTICIPANT HEREBY CERTIFIES AS FOLLOWS:
Project Participant 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 Project Participant is a load-serving entity providing electricity to customers within the boundaries of cities and/or counties that have elected to participate in Project Participant’s community choice aggregation program. For purposes of this Certificate, the term “service area” of the Project Participant means the boundaries of the cities and/or counties that have elected to participate in the Project Participant’s community choice aggregation program, as well as any other area recognized as the service area of the Project Participant under state or federal law.
Project Participant 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 Project Participant who are located within the service area of Project Participant is at least [____] MWh. Over the term of the Clean Energy Purchase Contract, the Project Participant expects the monthly average amount of Energy purchased (other than for resale) by customers of the Project Participant who are located within the service area of the Project Participant 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 Project Participant 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 Project Participant 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 Project Participant who are located within the service area of Project Participant 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 Project Participant who are located within the service area of Project Participant in any month in later calendar years.
The Project Participant 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 Project Participant 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, Project Participant 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 Project Participant’s rights and obligations under a power purchase agreement under which Project Participant 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.
Project Participant expects to pay for Energy acquired pursuant to the Clean Energy Purchase Contract solely from funds derived from its power distribution operations. Project Participant expects to use current net revenues of its to pay for current Energy acquisitions. Neither the Project Participant nor any person who is a related party to the Project Participant 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 Project Participant or any persons who are related Persons to Project Participant that are or were intended to be used for the purpose for which the Bonds were issued.
_______________, 2025
By: ________________________________
[Name]
[Title]
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EXHIBIT E
OPINIONS OF COUNSEL
California Community Choice Financing Authority
San Rafael, CA
Clean Power Alliance of Southern California
Los Angeles, CA
Aron Energy Prepay [__] LLC
New York, NY
Goldman Sachs & Co. LLC
New York, NY
U.S. Bank Trust Company, National Association
Atlanta, Georgia
Ladies and Gentlemen:
We have acted as counsel to Clean Power Alliance of Southern California (the “Project Participant”) in connection with the issuance by the California Community Choice Financing Authority (the “Issuer”) of its [Clean Energy Project Revenue Bonds, Series 2025] (the “Bonds”).
This opinion is rendered pursuant to Section [8(e)(16)(i)] of the Bond Purchase Contract, dated [____], 2025 (the “Bond Purchase Contract”), by and between Goldman Sachs & Co. LLC, as underwriter (the “Underwriter”) and the Issuer.
In rendering this opinion, we have examined executed copies of the following documents or, with respect to the form of Limited Assignment Agreement referenced in paragraph (d) below, an unexecuted copy in the form approved by the Board of Directors of the Project Participant pursuant to the Project Participant Resolution (collectively, the “Project Participant Documents”). (a) Resolution No. [____] adopted by the Board of Directors of the Project Participant on [____], 2025 (the “Project Participant Resolution”); (b) Clean Energy Purchase Contract between Project Participant and the Issuer (the “Clean Energy Purchase Contract”);
(c) Custodial Agreement by and among Project Participant, J. Aron & Company LLC, a New York limited liability company (“J. Aron”), Aron Energy Prepay [__] LLC, a Delaware limited liability company, and U.S. Bank Trust Company, National Association, as custodian; (d) Form of Limited Assignment Agreement, by and among Project Participant, the applicable seller under the power purchase agreement to which such assignment relates, and J.
Aron;
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(e) Letter Agreement between Project Participant and J. Aron regarding matters relating to Limited Assignment Agreements; and
(f) Clean Energy Project Operational Services Agreement relating to the Project, by and between Project Participant and the Issuer.
We have also reviewed copies of such records and other documents as we have deemed necessary and relevant for purposes of this opinion. In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity of all original documents submitted to us as copies.
As to factual matters, we have relied solely upon our review of the foregoing, the representations and warranties of the Project Participant contained in the Project Participant Documents, the Preliminary Official Statement, the Official Statement, the joint powers agreement of the Project Participant, and various certificates and other documents furnished to us by authorized officers of the Project Participant. In basing the opinions set forth in this letter on “our knowledge”, the words “our knowledge” signify that, in the course of our representation, no facts have come to our attention that would give us actual knowledge or actual notice that any such opinions or other matters are not accurate. Except as otherwise stated in this opinion, we have undertaken no investigation or verification of such matters.
We are of the opinion that:
1. The Project Participant is a joint powers authority created and existing under the laws of the State of California (the “State”), specifically the Joint Exercise of Powers Act, constituting Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the California Government Code, as amended and supplemented from time to time (the “Act”), and has full legal right, power and authority under the Act to (a) enter into, execute and deliver the Project Participant Documents, and (b) carry out and consummate the transactions contemplated by the Project Participant Documents.
2. By all necessary official action, the Project Participant has duly authorized all necessary action to be taken by it for (a) the adoption of the Project Participant Resolution, (b) the approval, execution and delivery of, and the performance by the Project Participant of the obligations on its part, contained in the Project Participant Documents, and (c) the consummation by it of all other transactions contemplated by the Preliminary Official Statement, the Official Statement and the Project Participant Documents.
3. The Project Participant Resolution was duly and validly adopted by the Project Participant in compliance with all applicable procedural requirements of the Project Participant and in compliance with the Act, and the Project Participant Resolution is in full force and effect and has not been amended.
4. The Project Participant Documents have been duly authorized, executed and delivered by the Project Participant, and constitute legal, valid and binding obligations of the Project Participant enforceable against the Project Participant in accordance with their respective terms, except to the extent limited by bankruptcy, insolvency, reorganization, moratorium or other
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similar laws and equitable principles of general application relating to or affecting the enforcement of creditors’ rights.
5. 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 the Project Participant of its obligations under the Project Participant Documents have been obtained.
6. The execution and delivery of the Project Participant Documents and compliance by the Project Participant with the provisions thereof, under the circumstances contemplated therein, will not conflict with or constitute on the part of the Project Participant a material breach of or a default under any agreement or instrument to which the Project Participant is a party, or violate any existing law, administrative regulation, court order, or consent decree to which the Project Participant is subject.
7. To our knowledge, the statements contained in the Preliminary Official Statement as of its date and in the Official Statement under the captions “INTRODUCTION – CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA,” “COMMUNITY CHOICE AGGREGATORS,” in the second paragraph under the caption “LITIGATION,” and in Appendix A – “THE PROJECT PARTICIPANT” are true and correct in all material respects and the statements under the caption “THE CLEAN ENERGY PURCHASE CONTRACT” fairly summarize the matters described therein in all material respects.
Notwithstanding anything to the contrary contained above, the foregoing opinion is expressly made subject to the following exceptions, qualifications, and assumptions:
(i) We express no opinion with respect to the validity or enforceability of any provisions of the Project Participant Documents or any other documents that may be read to require the Project Participant to indemnify any party. (ii) We express no opinion with respect to regulatory compliance by the Project Participant under any applicable law, including the California Public Utilities Code, as amended or supplemented from time to time, as determined by any governmental authority, including the California Public Utilities Commission, regarding the purchase of Energy (as defined in the Official Statement) by Project Participant under the Clean Energy Purchase Contract.
(iii) We express no opinion as to the enforceability of provisions waiving, directly or indirectly, expressly or impliedly, defenses to obligations or rights granted by law, where such waivers are prohibited by law or are against public policy. (iv) Our opinion as to enforceability is limited by standards of good faith, fair dealing, materiality, and reasonableness that may be applied by a court to the exercise of certain rights and remedies; limitations based on statutes or on public policy limiting a person’s right to waive the benefit of statutory provisions or of a common law right; and limitations releasing a party from or indemnifying a party against
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liability for its own wrongful or negligent act when such release or indemnification is contrary to public policy.
(v) Our opinion is limited to the matters stated herein and no opinion may be inferred or implied beyond the matters expressly stated herein. The opinions expressed in this letter are given solely for your use and benefit in connection with the transactions referred to herein and no other person may use or rely on this opinion letter, nor may it be used or relied upon in any other transaction which is not related to transactions referred to herein, without our prior express written consent. This opinion is provided to you as a legal opinion only and not as a warranty or guarantee with respect to the matter described herein or in the documents referred to herein. (vi) The scope of this opinion is limited to those issues and parties specifically considered herein and no further or more expansive opinion is implied or should be inferred from any opinion expressed herein. On such basis, any variation or difference in the facts upon which this opinion is based might affect our conclusions in an adverse manner and make them inaccurate.
This opinion is rendered solely for the use and benefit of the addressees and may not be relied upon other than in connection with the transactions contemplated by the Project Participant Documents, 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.
Respectfully submitted,
CHAPMAN AND CUTLER LLP
DAB:JC
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[INSERT CPA LETTERHEAD]
[_______ __], 202[_]
California Community Choice Financing Authority
San Rafael, California
[Underwriter]
[Underwriter’s Address]
Re: California Community Choice Financing Authority Clean Energy Project Revenue Bonds, Series 202[_][_] [(Green Bonds)]
Ladies and Gentlemen:
I am general counsel to Clean Power Alliance of Southern California (“CPA”). This opinion is being provided in connection with the issuance by the California Community Choice Financing Authority (the “Issuer”) of its Clean Energy Project Revenue Bonds, Series 202[_][_] [(Green Bonds)]. This opinion is rendered in connection with the Bond Purchase Contract, dated [_______ __], 202[_] (the “Bond Purchase Contract”), by and between [__________], as underwriter (the “Underwriter”) and the Issuer. Capitalized terms used herein shall have the meanings given to them in the Bond Purchase Contract.
In rendering this opinion, I have examined or reviewed copies of such records and other documents as I have deemed necessary and relevant for purposes of this opinion. In my examination, I have assumed the genuineness of all signatures, the authenticity of all documents submitted to me as originals, and the conformity of all original documents submitted to me as copies. In basing the opinion set forth in this letter on “my knowledge”, the words “my knowledge” signify that no facts have come to my attention that would give me actual knowledge or actual notice that such opinion is not accurate. Except as otherwise stated in this opinion, I have undertaken no investigation or verification of such matters.
The opinion or conclusions herein may be affected by actions taken or omitted or events occurring after the date hereof. I have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to my attention after the date hereof. Accordingly, this opinion is not intended to, and may not, be relied upon in connection with any such actions, events or matters. In reviewing the documents and matters referred to above, I have assumed the due and legal execution and delivery thereof by, and the validity against, any parties other than CPA. I have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in such documents. I have further assumed compliance with all covenants and agreements contained in such documents.
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Based upon and subject to the foregoing and in reliance thereon, as of the date hereof, to my knowledge, after due inquiry, there is no litigation, action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to my knowledge, threatened against CPA, affecting the existence of CPA or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the execution and delivery of the [Clean Energy Purchase Contract], or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of CPA or any authority for the execution and delivery of the [Clean Energy Purchase Contract], nor, to my knowledge, is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the [Clean Energy Purchase Contract].
I express no opinion as to any matter other than as expressly set forth above, and I express no opinion on the laws of any jurisdiction other than the State of California and the United States of America. I disclaim any obligation to update this letter.
Very truly yours,
_____________________
Nancy Whang
General Counsel
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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. [Reserved].
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, Project Participant, and Issuer have agreed on and executed an Assignment Agreement for such assignment in the form attached hereto as Annex I.
1.5. J. Aron, Project Participant, Issuer, and the applicable APC Party have agreed on and executed an Assignment Agreement for such assignment.
1.6. [Reserved].
2. Proposed Assignment. Project Participant 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 Project Participant.
2.2. A true and complete copy of the Assignable Power Contract under which such Assigned Rights and Obligations would arise.
2.3. [Reserved].
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. Monthly historical generation and meteorological data of the Applicable Project dating back to the commercial operation date.
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2 Following Issuer’s and J. Aron’s receipt of such information, Project Participant 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 Agreement, with the initial draft of such Assignment Agreement 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 Agreement is agreed to by the representative parties thereto, the applicable parties will execute such Assignment Agreement to be effective upon the assignment of the Assigned Rights and Obligations from Project Participant 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, Project Participant acknowledges that J. Aron will not be required to execute any Assignment Agreement, 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.
3. Assignment Agreement. In connection with each assignment, an “Assignment Agreement” 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 Project Participant, 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 Project Participant’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 “Monthly Projected Quantity” means, for each Month of an Assignment Period and each Assignment Agreement, a quantity of Energy agreed upon by J. Aron, Issuer and Project Participant, which Monthly Projected 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 Monthly Projected 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 Project Participant’s rights to receive Energy under the Assignable Power Contract even if such rights to receive Energy may exceed the Monthly Projected Quantity.
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3 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 any Assignment Period, the Base Quantity Reduction for each Delivery Hour of the relevant Assignment Period shall equal (i) the Monthly Projected Quantity for each such Delivery Hour (which will be determined by dividing the Monthly Projected Quantity for the applicable Month by the number of Delivery Hours in such Month), multiplied by (ii) the result of (A) the Fixed Price for the Monthly Projected Quantity 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 Monthly Projected Quantity for such Delivery Hour will be reduced to the closest whole MWh such that the Base Quantity is not reduced below zero.
3.5. The APC Contract Price under the relevant Assignment Agreement shall be the Day-Ahead Average Price, unless Issuer, Project Participant 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 Products included in the Assigned Rights and Obligations, which Assigned Products 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 Products, provided furthermore that Assigned Products may not in any case include capacity.
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1 ANNEX I
FORM OF LIMITED ASSIGNMENT AGREEMENT
NOTE: Project Participant may include the form included in this Annex I as an exhibit to any PPA executed by Project Participant 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:
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
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2 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 6.4] of the Clean Energy Purchase Contract, dated as of [____], 2025 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 during the Assignment Period (i) title to Assigned Products will pass from PPA Seller to J. Aron upon delivery by PPA Seller of Assigned Product in accordance with the PPA; (ii) PPA Buyer is hereby authorized by J. Aron and shall act as J. Aron’s agent with respect to scheduling Assigned Products; (iii) 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; (iv) 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; (v) 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 (vi) 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 ultimately 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
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3 Payment Obligation. Thereafter, PPA Seller shall be entitled to pursue collection on such PPA Buyer Receivables directly against PPA Buyer.
(f) 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 Products 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. (g) The Monthly Projected 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 or PPA Buyer 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 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
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4 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 Products 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 Products 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) a true, complete, and correct copy of the PPA is attached hereto as Appendix 3, (b) the PPA is in full force and effect; (c) 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 (d) 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, statement, invoice 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), [__] (Limitation on Damages), [__] (Counterparts), [__] (Amendments), [__] (No Agency, Partnership, Joint Venture or Lease), [__] (Mobile-Sierra), [__] (Electronic Delivery), [__] (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.
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5 (a) As between J. Aron and PPA Buyer, J. Aron and PPA Buyer 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 Assignment Agreement, and for the purposes of such incorporation, (i) J. Aron shall be deemed to be a Regulated Entity, (ii) PPA Buyer shall be deemed to be an Adhering Party, and (iii) this Assignment Agreement shall be deemed a Protocol Covered Agreement. In the event of any inconsistencies between this Assignment Agreement and the ISDA U.S. Stay Protocol, the ISDA U.S. Stay Protocol will prevail.
(b) As between J. Aron and PPA Seller:
(i) In the event that J. Aron becomes subject to a proceeding under (A) the Federal Deposit Insurance Act and the regulations promulgated thereunder or (B) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder (a “U.S. Special Resolution Regime”) the transfer from J. Aron of this Agreement, and any interest and obligation in or under, and any property securing, this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any interest and obligation in or under, and any property securing, this Agreement were governed by the laws of the United States or a state of the United States.
(ii) In the event that J. Aron or an Affiliate becomes subject to a proceeding under a U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§ 252.81,
47.2 or 382.1, as applicable (“Default Right”)) under this Agreement that may be exercised against J. Aron are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States. (iii) Notwithstanding anything to the contrary in this Agreement, J. Aron and PPA Seller expressly acknowledge and agree that:
(1) PPA Seller shall not be permitted to exercise any Default Right with respect to this Agreement or any Affiliate Credit Enhancement that is related, directly or indirectly, to an Affiliate of J. Aron becoming subject to receivership, insolvency, liquidation, resolution, or similar proceeding (an “Insolvency Proceeding”), except to the extent that the exercise of such Default Right would be permitted under the provisions of 12 C.F.R. 252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and (2) Nothing in this Agreement shall prohibit the transfer of any Affiliate Credit Enhancement, any interest or obligation in or under such Affiliate Credit Enhancement, or any property securing such Affiliate Credit Enhancement, to a transferee upon or following an Affiliate of J. Aron becoming subject to an Insolvency Proceeding, unless the transfer would result in PPA Seller being the beneficiary of such Affiliate Credit Enhancement in violation of any law applicable to PPA Seller.
(iv) If PPA Seller adheres to the ISDA U.S. Protocol, the terms of the ISDA U.S.
Protocol will supersede and replace the terms of this Section 6(b).
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6 (v) For purposes of this Section 6(b):
(1) “Affiliate” is defined in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); and
(2) “Credit Enhancement” means any credit enhancement or credit support arrangement in support of the obligations of J. Aron under or with respect to this Agreement, including any guarantee, collateral arrangement (including any pledge, charge, mortgage or other security interest in collateral or title transfer arrangement), trust or similar arrangement, letter of credit, transfer of margin or any similar arrangement.
7. Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a “forward contract” and that the Parties shall constitute “forward contract merchants” within the meaning of the United States Bankruptcy Code.
8. Costs and Expenses. The Parties will each pay their own costs and expenses (including legal fees) incurred in connection with this Agreement and as a result of the negotiation, preparation, and execution of this Agreement.
9. 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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7 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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8 Appendix 1
Assigned Rights and Obligations
PPA: “PPA” means that certain Power Purchase and Sale Agreement dated [____], by and between Clean Power Alliance of Southern California and [____], as amended from time to time. “APC Contract Price” means, for each month of the Assignment Period, the result of (i) (x) the sum of the Day-Ahead Market Prices for each Pricing Interval in such month, divided by (y) the number of Pricing Intervals in such month; plus (ii) $[____]/MWh. As used in this definition “Day-Ahead Market Price” means [____]. As used in this definition, “Pricing Interval” means the unit of time for which CAISO establishes a separate price. “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 Products: “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 PPA Buyer 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 Products delivered by PPA Seller to J. Aron shall be a sale made at wholesale, with J. Aron reselling all such Assigned Products.
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9 Appendix 2
Monthly Projected Quantity
[NOTE: To be set forth in a monthly volume schedule.]
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10 Appendix 3
Copy of Power Purchase Agreement
[To be attached.]
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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 [____], 2025 by and between Issuer and Project Participant.
1.3. “Delivery Scheduling Entity” means the Delivering Entity or a Person designated by the Delivering Entity, 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 [____], 2025 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 [__] 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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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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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. The Delivering Entity 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 the Delivering Entity and Issuer.
3.2 Assumption by Receipt Scheduling Entity. If any Delivery Scheduling Entity (other than the Delivering Entity) persistently fails to perform its obligations as contemplated under this Communications Protocol, the Receipt Scheduling Entity may, by notice to the Delivering Entity, require that the Delivering Entity 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
THE DELIVERING ENTITY
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
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G-4
Entity for such Delivery Point may deliver an operational nomination in 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 the Delivering Entity, the Receipt Scheduling Entities will use Commercially Reasonable Efforts to cooperate with the Delivery Scheduling Entity and the Delivering Entity to ensure that Delivery Scheduling Entity and the Delivering Entity 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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Attachment 1
Key Personnel
Delivering Entity Marketing Personnel:
Timothy Capuano
Sales and Trading
Telephone: (212) 357-2542
[email protected]
Delivering Entity 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 Delivering Entity Personnel:
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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Attachment 2
Remarketing Notice Form
Date: [_____________]
To: Delivering Entity 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 [____], 2025 by and between Aron Energy Prepay [__] 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 [____], 2025 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 Master Power Supply Agreement, Project Participant requests that the Delivering Entity 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 Master Power Supply Agreement, Project Participant requests that the Delivering Entity 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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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 [____], 2025 by and between Aron Energy Prepay [__] 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 [____], 2025 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 the Delivering Entity, 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
DELIVERING ENTITY:
(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:
Agenda Page 172
G-10
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 [____], 2025 by and between J. Aron Energy Prepay [__] 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 [____], 2025 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:
Name: ______________________________
Attention: ______________________________
Address: ______________________________
______________________________
Telephone: ______________________________
Fax: ______________________________]
[If delivered by the Delivering 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 the Delivering Entity]
By: _____________________________
Name: _____________________________
Title: _____________________________
Agenda Page 174
H-1
EXHIBIT H
PRICING AND OTHER TERMS
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, exclusive of any Annual Refund.
Agenda Page 175
I-1
EXHIBIT I
FORM OF CLOSING CERTIFICATE
CLOSING CERTIFICATE OF PROJECT PARTICIPANT
__________, 2025
Re: California Community Choice Financing Authority
[Clean Energy Project Revenue Bonds Series 2025]
The undersigned _____________________________ of Clean Power Alliance of Southern California (“Project Participant”) hereby certifies as follows in connection with the Clean Energy Purchase Contract dated as of [____], 2025 (the “Agreement”) between the Project Participant 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. Project Participant 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, Project Participant has duly authorized and approved the execution and delivery of, and the performance by Project Participant 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 Project Participant.
4. The authorization, execution and delivery of the Agreement and compliance with the provisions on Project Participant'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 Project Participant, (ii) any ruling, regulation, ordinance, judgment, order or decree to which Project Participant (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 Project Participant 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 Project Participant pursuant to any of the foregoing.
5 Project Participant 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
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I-2
instrument to which Project Participant is a party or to which Project Participant 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 Project Participant under any of the foregoing.
6. Payments to be made by Project Participant under the Agreement shall constitute operating expenses of Project Participant's power supply system payable solely from the revenues and other available funds of Project Participant'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 Project Participant in any court or administrative body which would (a) contest the right of the officials of Project Participant to hold and exercise their respective positions, (b) contest the due organization and valid existence of Project Participant, (c) contest the validity, due authorization and execution of the Agreement, or (d) attempt to limit, enjoin or otherwise restrict or prevent Project Participant from executing, delivering and performing the Agreement, nor to the knowledge of Project Participant 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 Project Participant of its obligations under the Agreement have been duly obtained.
9. The representations and warranties of Project Participant 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 Project Participant contained in the Preliminary Official Statement dated [____], 2025 and the Official Statement dated [____], 2025 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 Project Participant 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 Project Participant's knowledge, no event affecting Project Participant has occurred since the date of the Official Statement which should be disclosed therein in order to make the statements and information with respect to Project Participant 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.
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I-3
CLEAN POWER ALLIANCE OF SOUTHERN
CALIFORNIA
By
Name:
Title:
Agenda Page 178
CLEAN ENERGY PROJECT OPERATIONAL SERVICES AGREEMENT
This Clean Energy Project Operational Services Agreement (this “Agreement”) is made and entered into as of [________], 2025, 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 [________], 2025 (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 [_________], 2025 (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 [________], 2025 (as amended, restated, supplemented or otherwise modified from time to time, the “ESSA”) with J. Aron & Company LLC, a New York limited liability company; and
WHEREAS, CCCFA will finance the prepayment under the Prepaid Agreement and related costs by issuing its Clean Energy Project Revenue Bonds, Series 2025[__] (the “Bonds”) pursuant to a Trust Indenture, dated as of [_________], 2025 (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 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
Agenda Page 179
2 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, prior to the commencement of the Delivery Period, CPA will enter into one or more Assignment Agreements for the Initial Assignment Period and may from time to time enter into additional Assignment Agreements for future Assignment Periods 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 that 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 its Annual 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 re-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 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.
Agenda Page 180
3 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.
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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4 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: _______________________________
Agenda Page 182
MEMORANDUM OF UNDERSTANDING (“MOU”)
Date: , 2025
To: Garth Salisbury
Treasurer/Controller
California Community Choice Financing Authority
[email protected]
(415) 464-6037
From: Clean Power Alliance of Southern California
Re: California Community Choice Financing Authority Prepay Transaction on behalf of Clean Power Alliance of Southern California
Overview
The California Community Choice Financing Authority (“CCCFA”) seeks to procure a 30-year supply of energy from Aron Prepay [__] LLC, through the issuance of Clean Energy Project Revenue Bonds, Series 2025[__] (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: , 2025
Agenda Page 184
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. 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:
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 6.4] of the Clean Energy Purchase Contract, dated as of [____], 2025 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 during the Assignment Period (i) title to Assigned Products will pass from PPA Seller to J. Aron upon delivery by PPA
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Seller of Assigned Product in accordance with the PPA; (ii) PPA Buyer is hereby authorized by J. Aron and shall act as J. Aron’s agent with respect to scheduling Assigned Products; (iii) 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; (iv) 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; (v) 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 (vi) 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 ultimately 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) 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 Products 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. (g) The Monthly Projected 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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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 or PPA Buyer 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 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 Products 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 Products 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) a true, complete, and correct copy of the PPA is attached hereto as Appendix 3, (b) the PPA is in full force and effect; (c) 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 (d) 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, statement, invoice or request required or authorized by this Assignment Agreement to be given by one Party to another Party shall be delivered in accordance
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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), [__] (Limitation on Damages), [__] (Counterparts), [__] (Amendments), [__] (No Agency, Partnership, Joint Venture or Lease), [__] (Mobile-Sierra), [__] (Electronic Delivery), [__] (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.
(a) As between J. Aron and PPA Buyer, J. Aron and PPA Buyer 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 Assignment Agreement, and for the purposes of such incorporation, (i) J. Aron shall be deemed to be a Regulated Entity, (ii) PPA Buyer shall be deemed to be an Adhering Party, and (iii) this Assignment Agreement shall be deemed a Protocol Covered Agreement. In the event of any inconsistencies between this Assignment Agreement and the ISDA U.S. Stay Protocol, the ISDA U.S. Stay Protocol will prevail.
(b) As between J. Aron and PPA Seller:
(i) In the event that J. Aron becomes subject to a proceeding under (A) the Federal Deposit Insurance Act and the regulations promulgated thereunder or (B) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder (a “U.S. Special Resolution Regime”) the transfer from J. Aron of this Agreement, and any interest and obligation in or under, and any property securing, this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any interest and obligation in or under, and any property securing, this Agreement were governed by the laws of the United States or a state of the United States.
(ii) In the event that J. Aron or an Affiliate becomes subject to a proceeding under a U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§ 252.81,
47.2 or 382.1, as applicable (“Default Right”)) under this Agreement that may be exercised against J. Aron are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States. (iii) Notwithstanding anything to the contrary in this Agreement, J. Aron and PPA Seller expressly acknowledge and agree that:
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(1) PPA Seller shall not be permitted to exercise any Default Right with respect to this Agreement or any Affiliate Credit Enhancement that is related, directly or indirectly, to an Affiliate of J. Aron becoming subject to receivership, insolvency, liquidation, resolution, or similar proceeding (an “Insolvency Proceeding”), except to the extent that the exercise of such Default Right would be permitted under the provisions of 12 C.F.R. 252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and (2) Nothing in this Agreement shall prohibit the transfer of any Affiliate Credit Enhancement, any interest or obligation in or under such Affiliate Credit Enhancement, or any property securing such Affiliate Credit Enhancement, to a transferee upon or following an Affiliate of J. Aron becoming subject to an Insolvency Proceeding, unless the transfer would result in PPA Seller being the beneficiary of such Affiliate Credit Enhancement in violation of any law applicable to PPA Seller.
(iv) If PPA Seller adheres to the ISDA U.S. Protocol, the terms of the ISDA U.S.
Protocol will supersede and replace the terms of this Section 6(b). (v) For purposes of this Section 6(b):
(1) “Affiliate” is defined in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); and
(2) “Credit Enhancement” means any credit enhancement or credit support arrangement in support of the obligations of J. Aron under or with respect to this Agreement, including any guarantee, collateral arrangement (including any pledge, charge, mortgage or other security interest in collateral or title transfer arrangement), trust or similar arrangement, letter of credit, transfer of margin or any similar arrangement.
7. Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a “forward contract” and that the Parties shall constitute “forward contract merchants” within the meaning of the United States Bankruptcy Code.
8. Costs and Expenses. The Parties will each pay their own costs and expenses (including legal fees) incurred in connection with this Agreement and as a result of the negotiation, preparation, and execution of this Agreement.
9. 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.
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(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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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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Appendix 1
Assigned Rights and Obligations
PPA: “PPA” means that certain Power Purchase and Sale Agreement dated [____], by and between Clean Power Alliance of Southern California and [____], as amended from time to time. “APC Contract Price” means, for each month of the Assignment Period, the result of (i) (x) the sum of the Day-Ahead Market Prices for each Pricing Interval in such month, divided by (y) the number of Pricing Intervals in such month; plus (ii) $[____]/MWh. As used in this definition “Day-Ahead Market Price” means [____]. As used in this definition, “Pricing Interval” means the unit of time for which CAISO establishes a separate price. “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 Products: “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 PPA Buyer 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 Products delivered by PPA Seller to J. Aron shall be a sale made at wholesale, with J. Aron reselling all such Assigned Products.
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Appendix 2
Monthly Projected Quantity
[NOTE: To be set forth in a monthly volume schedule.]
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Appendix 3
Copy of Power Purchase Agreement
[To be attached.]
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LETTER AGREEMENT
[____], 2025
Clean Power Alliance of Southern California
801 South Grand Avenue, Suite 400
Los Angeles, CA 90017
Re: Prepay Limited Assignment Agreements
Ladies and Gentlemen:
This Letter Agreement (this “Letter Agreement”) confirms our mutual agreement with respect to the matters set forth below and relates to those certain Limited Assignment Agreements listed on Exhibit A (the “Assignment Agreements”, which definitions shall include any new Assignment Agreements identified by J. Aron’s delivery of an updated Exhibit A consistent with Section 2), with each of the PPA Sellers identified in Exhibit A (each, individually, a “PPA Seller” and collectively the “PPA Sellers”, and which definitions shall include any new PPA Seller identified by J. Aron’s delivery of an updated Exhibit A consistent with Section 2). Any capitalized term used in this Letter Agreement and not otherwise defined herein shall have the meaning assigned to such term in the Clean Energy Purchase Contract (defined below). In consideration of each party’s execution of the Assignment Agreements, as well as the premises above and the mutual covenants and agreements set forth herein, J. Aron & Company LLC (“J.
Aron”) and Clean Power Alliance of Southern California (“CPA” and together with J. Aron, collectively the “Parties”) agree as follows:
1. Assignment Early Termination. Each of the Parties agrees that it shall only exercise its right to deliver a written notice of termination of an Assignment Period under an Assignment Agreement consistent with the following:
(a) Either Party may deliver a notice of termination in the event of (i) the suspension, expiration, or termination of performance of a PPA by either CPA or the applicable PPA Seller; or (ii) the termination or suspension of deliveries for any reason other than force majeure under (A) that certain Clean Energy Purchase Contract (the “Clean Energy Purchase Contract”), dated as of [____], 2025 by and between CPA and California Community Choice Financing Authority (including, for the avoidance of doubt, due to the issuance of a valid “Remarketing Termination Notice” by CPA under the Clean Energy Purchase Contract) or (B) that certain Electricity Purchase, Sale and Service Agreement, dated as of [____], 2025 by and between J. Aron and Aron Energy Prepay [__] LLC (the “Electricity Sale and Service Agreement”); (b) CPA shall deliver a notice of termination contemporaneous with any assignment by CPA of its interest in the Clean Energy Purchase Contract, provided that J. Aron in any event shall be entitled to deliver a notice of termination to the extent CPA fails to do so in connection with the assignment of CPA’s interest under the Clean Energy Purchase Contract; (c) J. Aron may deliver a notice of termination if (i) PPA Seller delivers less than the Monthly Projected Quantity for any five months in the aggregate during a twelve month period,
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2 (ii) any event or circumstance occurs that would give either CPA or a PPA Seller the right to terminate or suspend performance under a PPA (regardless of whether CPA or the applicable PPA Seller exercises such right) or (iii) CPA requests remarketing of the Assigned Quantities under an Assigned PPA pursuant to the terms [Section 7.3(c)] of the Clean Energy Purchase Contract; (d) either Party may deliver a notice of termination to the extent that the Parties have mutually agreed upon an assignment of Replacement Assigned Rights and Obligations (as defined in the Clean Energy Purchase Contract) that will replace the Assigned Rights and Obligations under the applicable Assignment Agreement immediately following the termination thereof; and (e) either Party may deliver a notice of termination under the applicable Assignment Agreement to the extent that:
(i) any of the representations and warranties set forth in [Sections 5.4] of the Electricity Sale and Service Agreement and the Clean Energy Purchase Contract, respectively, ceases to be true with respect to an Assigned PPA; (ii) the Assigned Energy being delivered pursuant to an Assignment Agreement ceases to be EPS Compliant Energy; or
(iii) any Assigned Product that constituted PCC1 Product or Long-Term PCC1 Product while being delivered directly to CPA under an Assigned PPA ceases to qualify as PCC1 Product or Long-Term PCC1 Product when being redelivered through the Electricity Sale and Service Agreement, Master Power Supply Agreement and Clean Energy Purchase Contract.
(f) Project Participant may, in its sole discretion, deliver a notice of termination of an Assignment Agreement if J. Aron fails to pay when due any amounts owed under such Assignment Agreement and such failure continues for five Business Days following receipt by J. Aron of written notice thereof, with respect to which the Assignment Early Termination Date shall occur upon the date set forth in a written notice of such election delivered by Project Participant.
For the avoidance of doubt, each of the Parties agrees that it shall not terminate an Assignment Agreement pursuant to the at will termination provision thereof except in the circumstances set forth immediately above. The at will termination provision referenced in the immediately preceding sentence (x) is set forth in [Section 2(a)(1)] of the form of Assignment Agreement attached to the Clean Energy Purchase Contract (y) shall refer to any such provision forth in an Assignment Agreement entered into by the Parties consistent with the terms of the Clean Energy Purchase Contract and the Electricity Sale and Service Agreement.
2. Exhibit A. Promptly following execution of the Assignment Agreements with respect to the Initial Assigned Rights and Obligations, J. Aron shall deliver an Exhibit A that lists such Assignment Agreements. J. Aron shall deliver an updated Exhibit A to this Agreement to reflect any changes to the information set forth therein in connection with the termination, expiration or replacement of an Assignment Agreement consistent with the terms of the Clean Energy Purchase Contract.
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3 3. Representations, Warranties and Covenants.
(a) CPA agrees that it shall provide a true, complete, and correct copy to J. Aron of any PPA to be assigned pursuant to an Assignment Agreement. (b) Each Party represents to the other:
(i) Status. It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing.
(ii) Powers. It has the power to execute, deliver and perform its obligations under this Letter Agreement, and any other documentation to which it is a party relating to this Letter Agreement, and it has taken all necessary action to authorize such execution, delivery and performance.
(iii)No Violation or Conflict. Such execution, delivery and performance of this Letter Agreement and the consummation of the transactions contemplated hereby and thereby, including the incurrence by such Party of its obligations under this Letter Agreement, will not result in any violation of, or conflict with; (i) any term of any material contract or agreement applicable to it; (ii) any of its charter, bylaws, or other constitutional documents; (iii) any determination or award of any arbitrator applicable to it or (iv) any license, permit, franchise, judgment, writ, injunction or regulation, decree, order, charter, law, ordinance, rule or regulation of any government agency, applicable to it or any of its assets or properties or to any obligations incurred by it or by which it or any of its assets or properties or obligations are bound or affected, and shall not 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.
(iv)Consents. All consents, approvals, orders or authorizations of; registrations, declarations, filings or giving of notice to; obtaining of any licenses or permits from; or taking of any other action with respect to, any Person or Government Agency, that are required to have been obtained or made by such Party with respect to this Letter Agreement and the transactions contemplated hereby, including the due authorization of such Party and its governing body and 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, have been obtained and are in full force and effect and all conditions of any such consents have been complied with.
(v) Obligations Binding. Its obligations under this Agreement constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)).
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4 (vi)Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into this Agreement and as to whether this Agreement are appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other Parties as investment advice or as a recommendation to enter into this Agreement; it being understood that information and explanations related to the terms and conditions of this Agreement shall not be considered investment advice or a recommendation to enter into this Agreement. It is entering into this Agreement as a bona-fide, arm’s-length transaction involving the mutual exchange of consideration and, once executed by the applicable parties, considers this Agreement to be legally enforceable contracts. No communication (written or oral) received from any of the other Parties shall be deemed to be an assurance or guarantee as to the expected results of this Agreement. (vii) Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of this Agreement and the Assignment Agreement. It is also capable of assuming, and assumes, the risks of this Agreement.
(viii) Status of Parties. Neither of Parties is acting as a fiduciary for or an adviser to the other in respect of this Agreement.
4. Counterparts. This Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile or electronic transmission), each of which will be deemed an original.
5. Costs and Expenses. The Parties will each pay their own costs and expenses (including legal fees) incurred in connection with this Agreement and as a result of the negotiation, preparation, and execution of this Agreement.
6. Amendments. No amendment, modification, or waiver in respect of this Agreement will be effective unless in writing (including a writing evidenced by a facsimile or electronic transmission) and executed by each of the Parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system.
7. Notices. Any notice, demand, statement or request required or authorized by this Agreement to be given by one Party to another shall be in writing, except as otherwise expressly provided herein. It shall be sent by email transmission, courier, or personal delivery (including overnight delivery service) to each of the notice recipients and addresses for each of the other Parties designated in Exhibit B hereto. 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 written 10 days’ prior written notice to the other 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.
The Parties may mutually agree in writing at any time to deliver notices, demands or requests
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5 through alternate or additional methods. Notwithstanding the foregoing, any Party may at any time notify the other Parties 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 such time shall be ineffective.
8. Governing Law, Jurisdiction, Waiver of Jury Trial
(a) Governing Law. This Letter Agreement and the rights and duties of the parties under this Letter Agreement will be governed by and construed, enforced and performed in accordance with the laws of the State of New York, without reference to any conflicts of laws provisions that would direct the application of another jurisdiction’s laws; provided, however, that the authority of CPA to enter into and perform its obligations under this Letter Agreement shall be determined in accordance with the laws of the State of California. (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 Letter Agreement.
[Signature Pages to Follow]
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Signature Page to Letter Agreement
Very truly yours,
J. ARON
J. ARON & COMPANY LLC
By:
Name:
Title:
ACKNOWLEDGED, ACCEPTED AND AGREED TO as of the date first set forth above:
CPA
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
By:
Name:
Title:
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Exhibit A
Assignment Agreements
[To come.]
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Exhibit B
Notice Information
[To come.]
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PPA CUSTODIAL AGREEMENT
This PPA Custodial Agreement (this “Agreement”) is made and entered into as of [____], 2025, by and among Clean Power Alliance of Southern California, a California joint powers authority (“Project Participant”), J. Aron & Company LLC, a New York limited liability company (“J. Aron”), 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) (defined below) (the “Issuer”) and U.S. Bank Trust Company, National Association, a national banking association (the “Custodian” and together with Project Participant, J. Aron and Issuer, the “Parties”, and each individually, a “Party”).
RECITALS:
WHEREAS, in connection with the issuance of one or more series of bonds by Issuer, J.
Aron, Issuer and Project Participant will enter into Assignment Agreements (the “Assignment Agreements”, which definition shall include any new Assignment Agreement identified by J.
Aron’s delivery of an updated Exhibit A consistent with Section 3(c)) with the sellers under certain power purchase agreements (each, individually, a “PPA Seller” and collectively the “PPA Sellers”, which definitions shall include any new PPA Seller identified by J. Aron’s delivery of an updated Exhibit A consistent with Section 3(c)), pursuant to which Project Participant will partially certain of its rights and obligations under certain existing power purchase agreements (“Assigned PPAs”) to J. Aron for redelivery under the Prepay Contract Chains; and WHEREAS, the Parties propose to enter into this Agreement in order to administer payments to be received by the sellers under the Assigned PPAs (each, individually, a “PPA Seller” and collectively the “PPA Sellers”, and which definitions shall include any new PPA Seller identified by J. Aron’s delivery of an updated Exhibit A consistent with Section 3(c) of this Agreement) for each of the Prepay Contract Chains identified in Exhibit C as updated from time to time in accordance with Section 3(c) of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
Section 1. Defined Terms; Interpretation.
(a) Any capitalized term used herein and not otherwise defined herein (including in the recitals) shall have the meaning assigned to such term in the Clean Energy Purchase Contracts.
The following additional 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:
“Affiliate” means, with respect to any person, any entity which is a direct or indirect parent or subsidiary of such person or which directly or indirectly (i) owns or controls such person, (ii) is owned or controlled by such person, or (iii) is under common ownership or control with such person. 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
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2 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. “Assigned Product Price” has the meaning specified in Exhibit A, as may be updated from time to time consistent with the terms hereof. “Clean Energy Purchase Contracts” means each of the Clean Energy Purchase Contracts by and between Project Participant and Issuer as set forth in Exhibit C to this Agreement, which Exhibit C may be updated from time to time in accordance with Section 3(b). “Electricity Sale and Service Agreements” means each of the Electricity Purchase, Sale and Service Agreements by and between J. Aron and the buyer thereunder as set forth in Exhibit C to this Agreement, which Exhibit C may be updated from time to time in accordance with Section 3(b).
“Issuer Negative Pricing Payment Amount” means the positive difference, if any, for any Month of an Assignment Period between (a) amounts due from Issuer to Project Participant under [Section 3.2(a)] of a Clean Energy Purchase Contract with respect to negatively priced Assigned Products and (b) amounts due from Project Participant to Issuer under [Section 3.2(a)] of a Clean Energy Purchase Contract with respect to positively priced Assigned Products. “J. Aron Fixed Payment” means, in respect of each Assigned PPA and each Month in an Assignment Period thereunder, the amount set forth for such Assigned PPA and Month on Exhibit B hereto; provided that there shall be two J. Aron Fixed Payments for each Month of the Assignment Period with respect to any Assigned PPA that includes separate Monthly Projected Quantities for Energy and storage Products. Notwithstanding the foregoing, there shall be no J.
Aron Fixed Payment for an Assignment Agreement that provides for payment by J. Aron to the relevant PPA Seller of a floating price for Assigned Products delivered during the Assignment Period.
“J. Aron Prepay Payment” means, in respect of each Monthly PPA Invoice, an amount determined by Project Participant as (a) with respect to any Assigned PPA that has a J.
Aron Fixed Payment, the J. Aron Fixed Payment for the relevant Month and Assigned PPA and (b) with respect to any Assigned PPA that does not have a J. Aron Fixed Payment, the Monthly Projected Quantity for the relevant Assigned PPA for the relevant Month multiplied by the Assigned Product Price; provided that the J. Aron Prepay Payment shall be reduced by (i) the face amount of any Receivable (as defined in the Electricity Sale and Service Agreement) that is delivered by J. Aron to the Custodian pursuant to Section 4(f) and (ii) any Provisional Payment Fee Amount; provided further that (x) the J. Aron Prepay Payment will be determined without regard to any PPA Seller Payment Obligation and (y) there shall be two J. Aron Prepay Payments for each Month of the Assignment Period with respect to any Assigned PPA that includes separate Monthly Projected Quantities for Energy and storage Products. “Master Power Supply Agreements” means each of the Master Power Supply Agreements by and between Issuer and the seller thereunder, as set forth in Exhibit C to this Agreement, which Exhibit C may be updated from time to time in accordance with Section 3(b).
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3 “Monthly Excess Quantity” means, with respect to an Assigned PPA for any Month, an amount equal to the positive difference, if any, between (i) the quantity of Assigned Products actually delivered during such Month under such Assigned PPA, and (B) the Monthly Projected Quantities under such Assigned PPA for such Month. “Monthly PPA Payment” means, in respect of any Monthly PPA Invoice, an amount determined by Project Participant as the total amount to be withdrawn from the Assigned PPA Payments Account by the Custodian and paid to the relevant PPA Seller in respect of such Monthly PPA Invoice, which shall equal the total net amount due to such PPA Seller in respect of such Monthly PPA Invoice and shall consist of the following components:
(a) The J. Aron Prepay Payment(s), which shall be deemed to be paid to the relevant PPA Seller on behalf of J. Aron in respect of Assigned Products; and (b) the Project Participant Net Payment.
“PPA Seller Payment Obligation” means, in respect of any Monthly PPA Invoice, an amount determined by Project Participant as the total amount owed by the relevant PPA Seller as reflected in such Monthly PPA Invoice, including any amounts that have been netted or set-off against amounts owed to such PPA Seller; provided, for clarity, that the PPA Seller Payment Obligation shall be deemed to be paid to Project Participant and credited against the Project Participant Gross Payment thereby resulting in the Project Participant Net Payment required to be made by Project Participant hereunder.
“PPA Shortfall Lookback Summary” means, in respect of any Monthly PPA Invoice, a list that sets forth the following:
(i) which Months, if any, the relevant PPA Seller delivered less than the Monthly Projected Quantity in the preceding 12 Months (any such Month, a “Lookback Shortfall Month”) under the applicable Assigned PPA and whether such under-deliveries were a result of Force Majeure (as defined in the relevant Assigned PPA); (ii) the percentage of the Monthly Projected Quantity actually delivered under the applicable Assigned PPA for each such Lookback Shortfall Month; and (iii) an indication of whether a Provisional Payment Fee (as defined in the relevant Master Power Supply Agreement) is in effect consistent with the terms of Exhibit C of the relevant Master Power Supply Agreement.
“Prepay Contract Chain” means, with respect to each bond issuance by Issuer detailed in Exhibit C, the Master Power Supply Agreement, Electricity Sale and Service Agreement and Clean Energy Purchase Contract relating thereto. As used herein, Prepay Contract Chains shall be limited to contract chains entered into in connection with bond issuances by Issuer for a prepayment to an Affiliate of J. Aron pursuant to a Master Power Supply Agreement between Issuer and an Affiliate of J. Aron that provides for the delivery of an Annual Quantity as defined and further set forth in such Master Power Supply Agreement.
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4 “Project Participant Gross Payment” means, in respect of any Monthly PPA Invoice, an amount determined by Project Participant as the positive result, if any, of (a) all amounts owed to the relevant PPA Seller in respect of such Monthly PPA Invoice (determined without respect to the PPA Seller Payment Obligation), less (b) the J. Aron Prepay Payment(s); provided, for clarity, that the Project Participant Gross Payment (i) shall be deemed to be paid to the relevant PPA Seller on behalf of J. Aron to the extent it relates to any Monthly Excess Quantities, and (ii) otherwise shall be deemed to be paid to the relevant PPA Seller on behalf of Project Participant.
“Project Participant Net Payment” means, in respect of any Monthly PPA Invoice, an amount determined by Project Participant as the positive result, if any, of (a) the Project Participant Gross Payment, less (b) the PPA Seller Payment Obligation. “Project Participant Reimbursement Amount” means, in respect of any Monthly PPA Invoice that reflects that a quantity of Product less than the Monthly Projected Quantity was delivered in such Month under the relevant Assigned PPA, an amount equal to (i) the product of (x) the portion of the Monthly Projected Quantity actually delivered under the relevant Assigned PPA, multiplied by (y) the result of the applicable Assigned Product Price, minus (ii) any Provisional Payment Fee Amount.
“Provisional Payment Fee” has the meaning specified in each of the Master Power Supply Agreements.
“Provisional Payment Fee Amount” means, in respect of any Monthly Projected Quantity remarketed in any Month under the remarketing provisions of the relevant Master Power Supply Agreement, an amount equal to the product of (a) the Monthly Projected Quantity so remarketed in such Month, multiplied by (b) any Provisional Payment Fee applicable under relevant Master Power Supply Agreement.
(b) 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.
Section 2. Appointment of Custodian. Project Participant, J. Aron and Issuer hereby appoint U.S. Bank Trust Company, National Association, as the Custodian under this Agreement, with such rights and obligations as are specifically set forth herein. The Custodian hereby accepts such appointment under the terms and conditions set forth herein.
Section 3. Payment Instructions to Custodian; Assigned PPA Exhibits. (a) Monthly Statements. No later than five Business Days following receipt of an invoice from a PPA Seller in respect of any Month in an Assignment Period (a “Monthly PPA Invoice”), Project Participant shall deliver a statement (the “Monthly Statement”) showing each of the following (based on the information provided by the relevant PPA Seller in the Monthly
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5 PPA Invoice) to each of the Parties hereto and the seller under the Master Power Supply Agreement for the Prepay Contract Chain to which such Assigned PPA is assigned:
(i) the J. Aron Prepay Payment(s);
(ii) the Project Participant Reimbursement Amount;
(iii) the Project Participant Gross Payment;
(iv) the PPA Seller Payment Obligation;
(v) the Project Participant Net Payment;
(vi) the Monthly PPA Payment;
(vii) the Provisional Payment Fee Amount;
(viii) the “Monthly PPA Invoice Payment Date”, which shall be the last Business Day on which payment on such Monthly PPA Invoice may be made before any incremental interest arises thereon or any default or breach arises under the relevant Assigned PPA; (ix) the “Custodial Agreement Payment Date,” which shall be one Business Day preceding the Monthly PPA Invoice Payment Date;
(x) the PPA Shortfall Lookback Summary;
(xi) the Issuer Negative Payment Amount, if any;
provided furthermore that Project Participant shall deliver an updated Monthly Statement within seven days following agreement by Project Participant and any PPA Seller to an adjustment to a Monthly PPA Invoice to the extent that such adjustment is agreed upon prior to the date that is 10 days prior to the Monthly PPA Invoice Date. In addition to the foregoing, the Parties acknowledge and agree that (i) Monthly PPA Invoices may not be received each month, (ii) a Monthly Invoice may apply to deliveries under the applicable Assigned PPA for a period of more than one month, (iii) Project Participant shall not be required to prepare a Monthly Statement for any Month in which no Monthly PPA Invoice is received, and (iv) any adjustments agreed upon with respect to a Monthly PPA Invoice after the date specified in the first sentence of this provision shall be resolved solely between Project Participant and the relevant PPA Seller as provided in the Assignment Agreements. The Parties agree to exercise commercially reasonable efforts to implement a test billing period for a period of at least two Months prior to the effectiveness of any Assignment Agreement.
(b) Monthly Statement Verification. J. Aron shall notify Project Participant and each other Party promptly, but in no event more than three (3) Business Days, following Project Participant’s delivery of a Monthly Statement if J. Aron believes any information included on such Monthly Statement is incorrect. Following receipt and verification of the information included in any such notice from J. Aron, Project Participant shall, to the extent appropriate and in consultation with J. Aron, issue a corrected Monthly Statement to all Parties. J. Aron and each other Party
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6 hereto acknowledges and agrees that (i) Project Participant is calculating the Monthly Statement only for convenience of the Parties, (ii) the purpose of this Agreement is solely to determine amounts to be paid by Project Participant and J. Aron under separate contracts, and (iii) none of Project Participant, J. Aron nor any other Party hereto will have any liability whatsoever with respect to any action taken or omitted by it under this Agreement (but without prejudice to an express payment obligation arising under another contract), including as a result of any failure by Project Participant to timely or properly calculate any amount to be included in a Monthly Statement. Without limiting the foregoing, J. Aron acknowledges that it will have an opportunity to review and comment on each calculation and date included in a Monthly Statement (and shall be aware if such Monthly Statement has not been timely delivered) and Project Participant will not be responsible in any way for any damages, costs, liabilities, loss of use or any other claims related to an insufficient or late payment under an Assigned PPA as a result of any deficiencies in any Monthly Statement.
(c) Exhibits.
(i) Exhibit A to this Agreement sets forth certain information regarding the Assigned PPAs as of the date hereof, including the Assignment Periods for each Assigned PPA, the Monthly Projected Quantities, the PPA Sellers thereunder and the payment instructions for payments to the PPA Sellers. Exhibit B to this Agreement sets forth the J.
Aron Fixed Payments with respect to each of the Assigned PPAs. J. Aron shall deliver an updated Exhibit A or Exhibit B, as applicable, to each of the other Parties hereto to reflect any changes to the information set forth therein, including in connection with the execution of a new Prepay Contract Chain in connection with a bond issuance by Issuer. (ii) Exhibit C to this Agreement sets forth certain information regarding the Prepay Contract Chains in effect as of the date hereof. J. Aron shall deliver an updated Exhibit C to each of the other Parties hereto to reflect any changes to the information set forth therein, including due to the execution of a new Prepay Contract Chain in connection with a bond issuance by Issuer.
(d) Remediation of Remarketing Proceeds with Project Participant’s Purchases of Monthly Excess Quantities. The Parties acknowledge and agree that Project Participant’s purchase of Monthly Excess Quantities shall be applied to the remediation of remarketing proceeds, if any, under the Master Power Supply Agreements in accordance with the terms thereof, provided that for the avoidance of doubt Monthly Excess Quantities may only be applied to a remediate remarketing proceeds from a remarketing that that occurred [either in or prior to the Month in which such Monthly Excess Quantities were purchased].
Section 4. Assigned PPA Payments Account.
(a) Payments. With respect to certain payments required to be made by J. Aron and Project Participant to the PPA Sellers under the Assigned PPAs, there is hereby established the custodial account detailed below (the “Assigned PPA Payments Account”), and all payments made
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7 by J. Aron and Project Participant hereunder shall be wired to such Assigned PPA Payments Account:
[____]
[____]
[____]
[____]
(b) J. Aron Payments. J. Aron shall pay the J. Aron Prepay Payment(s) into the Assigned PPA Payments Account, in respect of each Monthly Statement on the relevant Custodial Agreement Payment Date set forth in such statement. To the extent that (i) a Project Participant Reimbursement Amount is due with respect to an Assigned PPA and (ii) J. Aron pays some portion of the J. Aron Prepay Payment(s) for such Assigned PPA but less than the total amount of the J.
Aron Prepay Payment(s) due, J. Aron’s partial payment shall be applied first to the J. Aron Prepay Payment(s). In addition, the Custodian agrees to promptly notify Project Participant if it does not receive the J. Aron Prepay Payment from J. Aron on the Custodial Agreement Payment Date, and in such case Project Participant may elect in its sole discretion to make the J. Aron Prepay Payment to the Custodian for the purpose of satisfying the Monthly PPA Payment (in which case Project Participant will have a reimbursement claim against Issuer under [Section 6.4] of the applicable Clean Energy Purchase Contract).
(c) Project Participant Payments. Project Participant shall pay the Project Participant Net Payment into the Assigned PPA Payments Account in respect of each Monthly Statement on the relevant Custodial Agreement Payment Date set forth in such statement. For each Month, if any, of an Assignment Period for which there is an Issuer Negative Pricing Payment Amount, Project Participant shall make payment of such amount into the Assigned PPA Payments Account on the Custodial Agreement Payment Date; provided that, notwithstanding the foregoing, Project Participant shall have no payment obligation hereunder with respect to an Issuer Negative Pricing Payment Amount to the extent that J. Aron receives such amount from the PPA Seller pursuant to the terms of the applicable Assignment Agreement.
(d) Application of Payments. The Custodian shall withdraw and apply amounts received under this Section 4 as follows:
(i) any J. Aron Prepay Payment received from J. Aron (including any payment by Project Participant on J. Aron’s behalf pursuant to the last sentence of Section 4(b)) and any Project Participant Net Payment received from Project Participant shall be applied to the payment of the Monthly PPA Payment to each PPA Seller in respect of each Monthly Statement on the relevant Monthly PPA Invoice Payment Date pursuant to the payment instructions set forth on Exhibit A; provided that if amounts on deposit in the Assigned PPA Payment Account are insufficient to pay the entire Monthly PPA Payment on such date, the Custodian shall (i) withdraw and pay to such PPA Seller the entire remaining balance of the Assigned PPA Payment Accounts, as determined and directed by Project Participant, and (ii) notify such PPA Seller of the amounts received for such Month from each of J. Aron and Project Participant consistent with such PPA Seller’s contact information provided in Exhibit A; provided furthermore that, if the J. Aron Prepay Payment for any Month exceeds the Monthly PPA Payment, then the excess of the J. Aron
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8 Prepay Payment over the Monthly PPA Payment shall be remitted to Project Participant on the relevant Monthly PPA Invoice Payment Date pursuant to Project Participant’s payment instructions set forth on Exhibit C;
(ii) any Project Participant Reimbursement Amount received from J. Aron shall be remitted to Project Participant on the relevant Monthly PPA Invoice Payment Date pursuant to Project Participant’s payment instructions set forth on Exhibit C; and (iii) for any Month in an Assignment Period for which an Issuer Negative Pricing Payment Amount is due from Project Participant, the Custodian shall, after application of amounts on deposit in the Assigned PPA Payments Account pursuant to clause (i) or (ii) above, as applicable, withdraw amounts on deposit in the Assigned PPA Payments Account to make payment of the Issuer Negative Pricing Payment Amount to J.
Aron.
(e) Amounts Held in Trust. Amounts deposited in the Assigned PPA Payments Account shall be held in trust for the benefit of Project Participant until applied as set forth in Section 4(d) and Section 12, as applicable, and there is hereby granted to Project Participant a lien on and security interest in the Assigned PPA Payments Account pending such application. The Custodian shall not be required to comply with any orders, demands, or other instructions from Project Participant with respect to the Assigned PPA Payments Account, including, without limitation, items presented for payment, or any order or instruction directing the disposition of funds or other assets held in or credited to the Assigned PPA Payments Account, and Project Participant agrees that prior to the termination of this Agreement in accordance with the terms hereof, it shall have no right to direct the disposition of funds or other assets held in or credited to the Assigned PPA Payments Account, or to withdraw or otherwise obtain funds or other assets held in or credited to the Assigned PPA Payments Account, whether by order or instruction to the Custodian or otherwise.
(f) Transfer of Receivables. With respect to each Monthly Statement, to the extent J.
Aron has purchased Receivables (as defined in the Electricity Sale and Service Agreement) for amounts owed by Project Participant for the Month to which such Monthly Statement relates, J.
Aron may, at its option, (i) notify the Custodian that it intends to transfer all or any portion of such Receivables to the applicable PPA Seller, and (ii) reduce the J. Aron Prepay Payment by the face amount of such Receivables to be transferred. To the extent J. Aron has notified the Custodian of its intent to transfer any such Receivables, J. Aron shall cause such Receivables to be transferred to the relevant PPA Seller not later than the relevant Custodial Agreement Payment Date.
Section 5. Custodian; Fees.
(a) Limitation on Liability. The Custodian shall have (i) no liability under any agreement other than this Agreement and (ii) no duty to inquire as to the provisions of any agreement other than this Agreement and the Assigned PPAs. The Custodian may rely upon and shall not be liable for acting or refraining from acting upon any written notice, document, instruction or request furnished to it hereunder in accordance with the terms hereof and believed by it to be genuine and to have been signed or presented by the proper Party or Parties. The Custodian shall be under no duty to inquire into or investigate the validity, accuracy or content of
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9 any such document, notice, instruction or request. The Custodian shall have no duty to solicit or compel any payments which may be due to it, or to take any action to compel J. Aron or Project Participant to make the deposits required under Section 4. The Custodian shall not be liable for any action taken or omitted by it in good faith, or for the application of funds by or other actions or omissions of other persons, except to the extent that a court of competent jurisdiction determines that the Custodian’s gross negligence or willful misconduct was the primary cause of any loss to any other Party hereto. In connection with the execution of any of its powers or the performance of any of its duties hereunder, the Custodian may consult with counsel, accountants and other skilled persons selected and retained by it. The Custodian shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other skilled persons, provided the Custodian exercised due care and good faith in the selection of such person. The permissive rights and powers of the Custodian to take actions enumerated under this Agreement shall not be construed as duties. In the event that the Custodian shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands from any Party hereto which, in its opinion, conflict with any of the provisions of this Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall be to keep safely all property held in escrow until it shall be directed otherwise in writing by all of the other Parties hereto or by a final order or judgment of a court of competent jurisdiction. The Custodian may interplead all of the assets held hereunder into a court of competent jurisdiction or may seek a declaratory judgment with respect to certain circumstances, and thereafter be fully relieved from any and all liability or obligation with respect to such interpleaded assets or any action or non-action based on such declaratory judgment. Anything in this Agreement to the contrary notwithstanding, in no event shall the Custodian be liable for special, indirect, incidental, punitive, or consequential damages, losses or penalties of any kind whatsoever (including but not limited to lost profits), regardless of the form of action. The Custodian may engage and act through agents and attorneys and shall not be liable for the misconduct or negligence of any such agent or attorney appointed with due care. The Custodian shall be responsible only for funds actually received by it for deposit into the Assigned PPA Payments Account, and the Custodian shall not be obliged to advance or risk its own funds to make any payments required hereunder. The Custodian shall have only those duties expressly set forth in this Agreement and no implied duties shall be read into this Agreement against the Custodian. The Parties hereto acknowledge and agree that the Custodian is not a fiduciary by virtue of accepting and carrying out its obligations under this Agreement and has not accepted any fiduciary duties, responsibilities or liabilities with respect to its services hereunder. The Custodian shall not be responsible for the perfection of any security interest granted hereunder. The Custodian shall not be obliged to invest or pay interest on funds held hereunder.
(b) Custodian Fee. The Issuer agrees to (i) pay the Custodian reasonable compensation for the services to be rendered hereunder, which compensation shall be $[____] per bond series for each year that this Agreement is in effect, and (ii) pay or reimburse the Custodian upon request for all expenses, disbursements and advances, including reasonable attorney’s fees and expenses, incurred or made by it in connection with the preparation, execution, performance, delivery, modification and termination of this Agreement. The parties hereto acknowledge that this provision shall survive the resignation or removal of the Custodian or the termination of this Agreement.
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10 Section 6. Succession. The Custodian may resign and be discharged from its duties or obligations hereunder by giving not less than 45 days’ advance notice in writing of such resignation to the other Parties hereto specifying a date when such resignation shall take effect; and such resignation shall take effect upon the day specified in such notice unless a successor shall not have been appointed by the other Parties hereto on such date, in which event such resignation shall not take effect until a successor is appointed. The other Parties hereto shall use their commercially reasonable efforts to make such appointment in a timely fashion, provided that any custodian appointed in succession to the Custodian shall be a bank or trust company organized under the laws of any state or a national banking association and shall have capital stock, surplus and undivided earnings aggregating at least $50,000,000 and shall be a bank with trust powers or trust company willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Agreement. Any corporation or association into which the Custodian may be merged or converted or with which it may be consolidated, or any corporation or association to which all or substantially all of the Custodian’s corporate trust line of business may be transferred, shall be the Custodian under this Agreement without further act. Notwithstanding the foregoing, if no appointment of a successor Custodian shall be made pursuant to the foregoing provisions of this Section 6 within 45 days after the Custodian has given written notice to the other Parties of its resignation as provided in this Section 6, the Custodian may, in its sole discretion, apply to any court of competent jurisdiction to appoint a successor Custodian. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Custodian.
Section 7. Reimbursement. J. Aron and Project Participant agree, jointly and severally (subject to the second proviso of this Section 7), to reimburse the Custodian and its directors, officers, agents and employees for any and all loss, liability or expense (including the fees and expenses of in-house or outside counsel and experts and their staffs and all expense of document location, duplication and shipment) arising out of or in connection with (a) its acting as the Custodian under this Agreement, except to the extent that such loss, liability or expense is finally adjudicated to have been caused primarily by the gross negligence or willful misconduct of the Custodian or such director, officer, agent or employee seeking reimbursement, or (b) its following any instructions or other directions from J. Aron or Project Participant, except to the extent that its following any such instruction or direction is expressly forbidden by the terms hereof; provided, however, that any amounts due under this Section 7 shall not duplicate any other amounts due under this Agreement, including without limitation amounts due under Section 13 hereof; provided further, however, that, notwithstanding the joint and several nature of the obligations under this Section 7, any amounts due under clause (b) of this sentence resulting from instructions or directions that are not expressly provided for in this Agreement and are given to the Custodian by only one Party shall be the sole obligation of such Party. The Parties hereto acknowledge that this provision shall survive the resignation or removal of the Custodian or the termination of this Agreement.
Section 8. Taxpayer Identification Numbers; Tax Matters. J. Aron and Project Participant represent that that their correct taxpayer identification numbers assigned by the Internal Revenue Service or any other taxing authority is set forth on the signature page hereof. Any tax returns or reports required to be prepared and filed in connection with the Assigned PPA Payments Account will be prepared and filed by Project Participant, and the Custodian shall have no responsibility for the preparation and/or filing of any tax return with respect to any income earned
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11 on the Assigned PPA Payments Account. In addition, any tax or other payments required to be made pursuant to such tax return or filing shall be paid by Project Participant. The Custodian shall have no responsibility for making such payment unless directed to do so by the appropriate authorized Party and fully indemnified to the Custodian’s satisfaction.
Section 9. Notices. Any notice, demand, statement or request required or authorized by this Agreement to be given by one Party to another Party shall be in writing and shall either be sent by email transmission or other Electronic Means (defined below), courier, or personal delivery (including overnight delivery service) to each of the notice recipients and addresses specified in Exhibit C for the receiving Party. Any such notice, demand, or request shall be deemed to be given (i) when delivered by email transmission or other Electronic Means (defined below), 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 C. 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, a Party may at any time notify the others 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.
The Custodian shall have the right to accept and act upon directions given pursuant to this Agreement, or any other document reasonably relating to the bonds and delivered using Electronic Means (defined below); provided, however, that each party giving directions to the Custodian hereunder shall provide to the Trustee under the Trust Indenture an incumbency certificate listing persons with the authority to provide such directions (each an “Authorized Officer”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended whenever a person is to be added or deleted from the listing. If a party elects to give the Custodian directions using Electronic Means and the Custodian in its discretion elects to act upon such directions, the Custodian’s understanding of such directions shall be deemed controlling. The parties understand and agree that the Custodian cannot determine the identity of the actual sender of such directions and that the Custodian shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided by a party to the Custodian have been sent by such Authorized Officer. Each party shall be responsible for ensuring that only Authorized Officers transmit such directions to the Custodian and that all Authorized Officers treat applicable user and authorization codes, passwords and/or authentication keys issued by the Custodian as confidential and with extreme care. The Custodian shall not be liable for any losses, costs or expenses arising directly or indirectly from the Custodian’s reliance upon and compliance with such directions notwithstanding that such directions conflict or are inconsistent with a subsequent written direction. Each party agrees: (i) to assume all risks arising out of the use of Electronic Means to submit directions to the Custodian, including without limitation the risk of the Custodian acting on unauthorized directions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting directions to the Custodian and that there may be more secure methods of transmitting directions; (iii) that the security procedures (if any) to be followed in connection with its transmission of directions provide to it a commercially reasonable degree of protection in light of its particular
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12 needs and circumstances; and (iv) to notify the Custodian immediately upon learning of any compromise or unauthorized use of the security procedures.
As used herein, “Electronic Means” shall mean e-mail transmission or other similar electronic means of communication providing evidence of transmission, S.W.I.F.T, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys, facsimile transmission, including a telephone communication confirmed by any other method set forth in this definition, or another method or system specified by a Responsible Officer of the Custodian as available for use in connection with the Custodian’s services hereunder.
Section 10. Miscellaneous.
(a) Amendments. The provisions of this Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing signed by all of the Parties hereto. (b) Assignments. Neither this Agreement nor any right or interest hereunder may be assigned in whole or in part by any Party, except as provided in Section 5, without the prior written consent of the other Parties.
(c) 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 New York, without regard to any conflicts of law principle that would direct the application of the laws another jurisdiction; provided that the authority of each of the Issuer and Project Participant to enter into and perform its obligations under this Agreement shall be determined in accordance with the laws of the State of California. (d) Jurisdiction. Each Party hereto irrevocably waives any objection on the grounds of venue, forum non-conveniens or any similar grounds and irrevocably consents to service of process by mail or in any other manner permitted by applicable law and consents to the exclusive jurisdiction of (A) the courts of the State of New York located in the Borough of Manhattan, (B) the federal courts of the United States of America for the Southern District of New York or (C) the federal courts of the United States of America in any other state. The Parties further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement.
(e) Force Majeure. No Party to this Agreement shall be liable to any other Party hereto for losses due to, or if it is unable to perform its obligations under the terms of this Agreement because of, acts of God, fire, war, terrorism, epidemic, pandemic, floods, strikes, electrical outages, equipment or transmission failure, or other causes reasonably beyond its control; provided that a party affected by any such event shall exercise commercially reasonable efforts to resume performance as quickly as possible.
(f) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. All signatures of the Parties to this Agreement may be transmitted by facsimile or by digital pdf transmission, and such facsimile or pdf will, for all purposes, be deemed to be the original signature of such Party whose signature it reproduces, and will be binding upon such Party.
The Parties agree that the electronic signature of a Party to this Agreement, including all
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13 acknowledgements, authorizations, directions, waivers and consents thereto (or any amendment or supplement thereto) shall be as valid as an original signature of such Party and shall be effective to bind such Party to this Agreement. The Parties agree that any electronically signed document (including this Agreement) shall be deemed (i) to be written” or “in writing,” (ii) to have been signed, and (iii) to constitute a record established and maintained in the ordinary course of business and an original written record when printed from electronic files. For purposes hereof, “electronic signature” means a manually signed original signature that is then transmitted by electronic means; “transmitted by electronic means” means sent in the form of a facsimile or sent via the Internet as a pdf (portable document format) or other replicating image attached to an e-mail message; and, “electronically signed document” means a document transmitted by electronic means and containing, or to which there is affixed, an electronic signature. Paper copies or “printouts”, if introduced as evidence in any judicial, arbitral, mediation or administrative proceeding, will be admissible as between the Parties to the same extent and under the same conditions as other original business records created and maintained in documentary form. Neither Party shall contest the admissibility of true and accurate copies of electronically signed documents on the basis of the best evidence rule or as not satisfying the business records exception to the hearsay rule. (g) No Obligation to Invest. The Custodian shall not be under any obligation to invest or pay interest on amounts held in the Assigned PPA Payments Account from time to time. (h) Limited Duties. Issuer shall have only such duties under this Agreement as are expressly set forth herein as duties on its part to be performed, and no implied duties shall be read into this Agreement against Issuer.
(i) Allocation of Payments. Nothing in this Agreement is intended to create any liabilities between the Issuer, J. Aron and Project Participant. This Agreement is intended solely to allocate payments that are actually made by J. Aron and Project Participant in respect of amounts owed for physically settled energy under the Assigned PPAs and the Clean Energy Purchase Contracts.
Section 11. Compliance with Court Orders. In the event that any amount held by the Custodian hereunder shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or entered by any court affecting the property deposited under this Agreement, the Custodian is hereby expressly authorized, in its sole discretion, to obey and comply with all writs, orders or decrees so entered or issued, which it is advised by legal counsel of its own choosing are binding upon it, whether with or without jurisdiction, and in the event that the Custodian obeys or complies with any such writ, order or decree it shall not be liable to any of the Parties hereto or to any other person, firm or corporation, by reason of such compliance notwithstanding that such writ, order or decree may be subsequently reversed, modified, annulled, set aside or vacated.
Section 12. Term; Winding Up. This Agreement will expire concurrently with the receipt of written notice from Project Participant, with a copy to the other Parties, that the Clean Energy Purchase Contracts have terminated in accordance with their terms. Following the Custodian’s payment of any Monthly PPA Payments due in respect of the final month of commodity deliveries prior to such a termination, any remaining balance in the Assigned PPA Payments Account shall be paid to Project Participant.
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14 Section 13. Indemnification. J. Aron and Project Participant, jointly and severally, agree to protect, indemnify, defend and hold harmless, the Custodian, and affiliates, and each person who controls the Custodian (and each of their respective directors, officers, agents and employees) from and against all claims, losses, liabilities, actions, suits, costs, judgments and expenses (including court costs and reasonable attorneys’ fees) arising from its acting as Custodian hereunder (including, for the avoidance of doubt, any costs, expenses and reasonable attorneys’ fees incurred in enforcing any payment obligation of an indemnifying Party), except for any claim, damage or loss resulting from the gross negligence or willful misconduct of the Custodian; provided, however, that any amounts due under this Section 13 shall not duplicate any other amounts due under this Agreement, including without limitation amounts due under Section 7 hereof. The obligations of this Section 13 shall survive any resignation or removal of the Custodian and the termination of this Agreement. In addition, notwithstanding anything herein to the contrary, the Custodian and Issuer shall have all of the rights (including the indemnification rights), benefits, privileges and immunities under this Agreement as are granted to Issuer and the Trustee under the Trust Indenture, all of which are incorporated, mutatis mutandis, into this Agreement.
Section 14. Limitation of Liability. Notwithstanding anything to the contrary herein, all obligations of the Issuer under this Agreement, including without limitation all obligations to make payments of any kind whatsoever, are special, limited obligations of the Issuer, payable solely from the 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). The 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 the Issuer nor the taxing power of the State of California or any political subdivision thereof is pledged to payments pursuant to this Agreement. The 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.
Section 15. Patriot Act. J. Aron and Project Participant acknowledge that the Custodian is subject to federal laws, including the Customer Identification Program (“CIP”) requirements under the USA PATRIOT Act and its implementing regulations, pursuant to which the Custodian must obtain, verify and record information that allows the Custodian to identify J. Aron and Project Participant. Accordingly, prior to opening the Assigned PPA Payments Account described in Section 3 of this Agreement, the Custodian will ask J. Aron and Project Participant to provide certain information including but not limited to name, physical address, tax identification number and other information that will help the Custodian identify and verify J. Aron’s and Project Participant’s identities, such as organizational documents, certificate of good standing, license to do business, or other pertinent identifying information. J. Aron and Project Participant agree that the Custodian cannot open any account hereunder unless and until the Custodian verifies J. Aron’s and Project Participant’s identities in accordance with its CIP.
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15 [Signature Pages Follow]
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Signature Page to PPA Custodial Agreement
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed and delivered by their respective duly authorized officers as of the date first written above.
CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA
By:___________________________________
Name: _____________________________
Title: ______________________________
Taxpayer ID Number:_________________
J. ARON & COMPANY LLC
By:___________________________________
Name: _____________________________
Title: ______________________________
Taxpayer ID Number:_________________
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION
By:___________________________________
Name: _____________________________
Title: ______________________________
CALIFORNIA COMMUNITY CHOICE
FINANCING AUTHORITY
By:___________________________________
Name: _____________________________
Title: ______________________________
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EXHIBIT A
ASSIGNED PPAS
[To come.]
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EXHIBIT B
J. ARON FIXED PAYMENTS
[To be attached.]
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EXHIBIT C
PREPAY CONTRACT CHAINS AND RELATED NOTICE AND PAYMENT
INFORMATION
[To come.]
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RESO NO. 25-11-094
RESOLUTION NO. 25-11-094
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
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bonds to assist community choice aggregators, including Clean Power Alliance, in financing the acquisition of supplies of clean energy;
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 separate clean energy prepayment transactions (each a “Prepayment Transaction”); WHEREAS, Clean Power Alliance has determined to authorize pursuant to this Resolution and accompanying Resolutions 25-11-093, 25-11-095, and 25-11-096 (each a “Prepayment Resolution” and collectively, the “Other Prepayment Resolutions”), 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 Prepayment Transactions totaling more than $4.5 billion in an aggregate principal amount of bonds 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 (each a “Prepaid Seller”) owned by J.P Morgan Ventures Energy Corporation, a Delaware corporation (“JPMVEC”) 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, JPMVEC, the Issuer, and a custodial bank agreed to by the Issuer and Clean Power Alliance;
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3. Form of Limited Assignment Agreement, by and among Clean Power Alliance, the counterparty to the power purchase agreements described therein, and JPMVEC;
4. Letter Agreement between Clean Power Alliance and JPMVEC 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 has also been submitted to this meeting a form of the following additional document 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
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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 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) the total principal amount of the aggregate Prepayment Transactions shall not exceed $4.5 billion;
(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) 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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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 actions and approvals authorized in Sections 1-7, inclusive, of this Resolution shall terminate on June 30, 2027.
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 6th day of November 2025.
____________________________
Deborah Klein Lopez, Chair
ATTEST:
_________________________
Gabriela Monzon, Secretary
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EXHIBIT A
CPA 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 [●], 2025
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TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS ....................................................................................................2 Section 1.1 Defined Terms ................................................................................................2 Section 1.2 Definitions; Interpretation .............................................................................12 ARTICLE II. DELIVERY PERIOD; CLEAN ENERGY PROJECT; CONDITION PRECEDENT ....................................................................................................12 Section 2.1 Delivery Period .............................................................................................12 Section 2.2 Clean Energy Project ....................................................................................12 Section 2.3 Condition Precedent ......................................................................................13 ARTICLE III. ASSIGNMENT OF POWER PURCHASE AGREEMENTS ..........................13 Section 3.1 Assignments Generally .................................................................................13 Section 3.2 Adjustments to Hourly Quantities of Base Energy .......................................13 Section 3.3 JPMVEC Procurement of EPS Compliant Energy .......................................14 Section 3.4 Failure to Obtain EPS Compliant Energy .....................................................14 Section 3.5 JPMVEC Consent to Amendments ...............................................................14 ARTICLE IV. SALE AND PURCHASE; PRICING ...............................................................15 Section 4.1 Sale and Purchase of Product ........................................................................15 Section 4.2 Project Participant Payments ........................................................................15 Section 4.3 No Obligation to Take Base Energy .............................................................15 Section 4.4 Annual Refund ..............................................................................................15 Section 4.5 Reset Period Remarketing .............................................................................16 ARTICLE V. FAILURE TO SCHEDULE;ASSIGNED DELIVERED QUANTITY SHORTFALLS .................................................................................................16 Section 5.1 Assigned Product ..........................................................................................17 Section 5.2 Tracking of Assigned Delivered Quantities ..................................................17 ARTICLE VI. DELIVERY POINTS; SCHEDULING ............................................................17 Section 6.1 Delivery Points ..............................................................................................17 Section 6.2 Transmission and Scheduling .......................................................................17
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Section 6.3 Title and Risk of Loss ...................................................................................18 Section 6.4 Scheduling and Transmission .......................................................................18 Section 6.5 Deliveries within CAISO or another Balancing Authority ...........................18 Section 6.6 Assigned Products .........................................................................................18 ARTICLE VII. USE OF PRODUCT .........................................................................................18 Section 7.1 Tax Exempt Status of the Bonds ...................................................................18 Section 7.2 Priority Products ...........................................................................................19 Section 7.3 Assistance with Sales to Third Parties ..........................................................19 Section 7.4 Qualifying Use ..............................................................................................19 Section 7.5 Remediation ..................................................................................................19 Section 7.6 Remediation; Ledger Entries; Redemption ...................................................20 ARTICLE VIII. REPRESENTATIONS AND WARRANTIES; ADDITIONAL COVENANTS ..................................................................................................21 Section 8.1 Representations and Warranties ....................................................................21 Section 8.2 Representations and Warranties regarding PCC1 Product and Long-Term PCC1 Product ....................................................................................22 Section 8.3 Warranty of Title...........................................................................................24 Section 8.4 Disclaimer of Warranties ..............................................................................24 Section 8.5 Continuing Disclosure ..................................................................................24 ARTICLE IX. TAXES ..............................................................................................................25 ARTICLE X. JURISDICTION; WAIVER OF JURY TRIAL ................................................25 Section 10.1 Consent to Jurisdiction ..................................................................................25 Section 10.2 Waiver of Jury Trial ......................................................................................25 ARTICLE XI. FORCE MAJEURE ..........................................................................................26 Section 11.1 Applicability of Force Majeure .....................................................................26 Section 11.2 Settlement of Labor Disputes ........................................................................26 ARTICLE XII. GOVERNMENTAL RULES AND REGULATIONS .....................................26 Section 12.1 Compliance with Laws .................................................................................26 Section 12.2 Contests .........................................................................................................26 Section 12.3 Defense of Agreement ..................................................................................27
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ARTICLE XIII. ASSIGNMENT OF THIS AGREEMENT .......................................................27 ARTICLE XIV. PAYMENTS .....................................................................................................27 Section 14.1 Monthly Statements ......................................................................................27 Section 14.2 Payments .......................................................................................................28 Section 14.3 Payment of Disputed Amounts .....................................................................29 Section 14.4 Late Payment ................................................................................................29 Section 14.5 Audit; Adjustments .......................................................................................29 Section 14.6 Netting; No Set-Off.......................................................................................29 Section 14.7 Rate Covenant ...............................................................................................30 ARTICLE XV. NOTICES ..........................................................................................................30 ARTICLE XVI. DEFAULT; REMEDIES; TERMINATION ....................................................30 Section 16.1 Issuer Default ................................................................................................31 Section 16.2 Project Participant Default ............................................................................31 Section 16.3 Remedies Upon Default ................................................................................32 Section 16.4 Termination of Prepaid Agreement ..............................................................33 Section 16.5 Limitation on Damages .................................................................................33 ARTICLE XVII. MISCELLANEOUS .........................................................................................34 Section 17.1 Indemnification Procedure ............................................................................34 Section 17.2 Deliveries ......................................................................................................34 Section 17.3 Entirety; Amendments ..................................................................................34 Section 17.4 Governing Law .............................................................................................35 Section 17.5 Non-Waiver ...................................................................................................35 Section 17.6 Severability ...................................................................................................35 Section 17.7 Exhibits .........................................................................................................35 Section 17.8 Winding Up Arrangements ...........................................................................35 Section 17.9 Relationship of Parties ..................................................................................35 Section 17.10 Immunity .......................................................................................................35 Section 17.11 Rates and Indices ..........................................................................................35 Section 17.12 Limitation of Liability ...................................................................................36 Section 17.13 Counterparts ..................................................................................................36 Section 17.14 Third Party Beneficiaries; Rights of Trustee ................................................36 Section 17.15 No Recourse to Members of Project Participant ...........................................37
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Section 17.16 Waiver of Defenses .......................................................................................37 Section 17.17 Rate Changes ................................................................................................37 Exhibit A-1 — Primary Delivery Point; Hourly Quantities of Base Energy Exhibit A-2 — Monthly Reference Quantities of Assigned Energy Exhibit A-3 — Annual Quantities
Exhibit B — Notices
Exhibit C — Remarketing Election Notice
Exhibit D — Federal Tax Certificate
Exhibit E — Project Participant’s Legal Opinions
Exhibit F — Assignment of Assignable PPAs
Exhibit G — Pricing and Other Terms
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CLEAN ENERGY PURCHASE CONTRACT
This Clean Energy Purchase Contract (this “Agreement”) is made and entered into this [●]th day of [●], 2025 (the “Execution Date”), by and between California Community Choice Financing Authority (the “Issuer”) and Clean Power Alliance of Southern California (“Project Participant”).
W I T N E S S E T H:
WHEREAS, Issuer is 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) (the “Joint Powers Act”); and
WHEREAS, pursuant to the authority provided under the Joint Powers Act, the Issuer has planned and developed a project to acquire long-term Energy supplies from Pierpont Energy Prepay 9, LLC (“Prepay LLC”) pursuant to a Prepaid Energy Purchase and Sale Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Prepaid Agreement”) to meet a portion of the Energy supply requirements of Project Participant through a clean energy prepayment project (the “Clean Energy Project”); and WHEREAS, Project Participant is a joint powers authority organized pursuant to the provisions of the Joint Powers Act and a community choice aggregator pursuant to the provisions of Section 366.2 of the California Public Utilities Code, with authority to sell electricity to retail electric consumers within its service area; and
WHEREAS, Project Participant desires to purchase a portion of its Energy requirements from Issuer under the terms and conditions set forth in this Agreement and Issuer is agreeable to selling to Project Participant such supplies of Energy under the terms and conditions set forth in this Agreement; and
WHEREAS, Issuer will finance the prepayment under the Prepaid Agreement and the other costs of the Clean Energy Project by issuing the Series 2025[●] Bonds, and as a condition precedent to the effectiveness of the Parties’ obligations under this Agreement, the Issuer shall have entered into the Prepaid Agreement and shall have issued the Series 2025[●] Bonds.
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, Issuer and Project Participant (each a “Party” and collectively the “Parties”) agree as follows:
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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 G. “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” means this Clean Energy Purchase Contract and shall include all exhibits, recitals and attachments referenced herein and attached hereto. “Alternate Delivery Point” has the meaning specified in Section 6.1(a). “Annual Quantity” means, for each Contract Year of the Delivery Period, the quantity (in MWh) of Assigned Product for such Contract Year as set forth on Exhibit A-3; provided that the Annual Quantity required to be delivered during a Contract Year shall be reduced by the aggregate amount of Base Energy remarketed during such Contract Year. “Annual Refund” means the annual refund, if any, to be provided to the Project Participant as described in Section 4.4.
“Applicable Project” means the applicable project to which an Assigned PPA applies.
“Applicable Rating Agencies” means, at any given time, each Rating Agency then rating the Bonds. “
“Assignable PPA” means a power purchase agreement pursuant to which Project Participant is purchasing EPS Compliant Energy and related Product that meets the requirements for assignment set forth in Exhibit F.
“Assigned Delivered Quantity” means, for any Month and each Assigned PPA, the quantity of Assigned Energy (in MWh) actually delivered during such Month under the Assigned PPA, inclusive of any Assigned Product included in the Assigned Energy so delivered. “Assigned Delivered Quantity Excess” has the meaning specified in Section 5.2.
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“Assigned Delivered Quantity Shortfall” has the meaning specified in Section 5.2. “Assigned Delivered Quantity Shortfall Tracking Account” has the meaning specified in Section 5.2.
“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” has the meaning specified in the applicable Assignment Agreement; provided that any Assigned Energy shall be EPS Compliant Energy as set forth in Exhibit F to this Agreement.
“Assigned PAYGO Quantities” means any Assigned Delivered Quantities under this Agreement in a Contract Year in excess of the Annual Quantity for such Contract Year. “Assigned PPA” means an Assignable PPA that is assigned pursuant to an Assignment Agreement in accordance with the terms of this Agreement. “Assigned PPA Contract Price” means the contract price (in $/MWh) payable by Project Participant under an Assigned PPA.
“Assigned PPA Counterparty” means the seller under an Assigned PPA. “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 RECs” means any RECs associated with PCC1 Product or Long-Term PCC1 Product to be delivered to JPMVEC or any successor thereto pursuant to any Assigned Rights and Obligations.
“Assigned Rights and Obligations” means the rights and obligations assigned by Project Participant to JPMVEC under and pursuant to, and subject to the limitations set forth in, an Assignment Agreement.
“Assignment Agreement” means, with respect to the Initial Assigned Rights and Obligations, each Initial Assignment Agreement, and for any additional or replacement Assigned Rights and Obligations, a limited assignment agreement among Project Participant, JPMVEC and the Assigned PPA Counterparty, 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 Project Participant, JPMVEC, the Assigned PPA Counterparty and Issuer, each in its sole discretion). “Assignment Period” means the period specified as the Assignment Period in the applicable Assignment Schedule, subject in either case to earlier termination of the applicable Assignment Agreement pursuant to the terms thereof.
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“Assignment Schedule” means, with respect to each Assigned PPA, a schedule of terms related to such assignment in the form attached as Annex I to Exhibit F to this Agreement, including the Assigned Product, Assigned Delivery Point, Assigned PPA Contract Price and Assignment Period for such Assigned PPA, and including updated Exhibits A-1 and A-2 to this Agreement.
“Available Discount” has the meaning specified in the Re-Pricing Agreement. For the avoidance of doubt, the “Available Discount” under the Re-Pricing Agreement includes the Monthly Discount, as well as additional discount 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 6.1(a). “Base Energy” means Firm (LD) Energy delivered to the Base Delivery Point. “Bond Closing Date” means the date on which Bonds are first issued pursuant to the Trust Indenture.
“Bonds” means the Series 2025[●] Bonds and any additional series of 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 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’
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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. “Contract Price” means (a) with respect to the Monthly Reference Quantities, the Day-Ahead Average Price minus the Monthly Discount; and (b) with respect to Monthly Excess Quantities or Assigned PAYGO Quantities, the Day-Ahead Average Price. “Contract Quantity” means (i) with respect to Assigned Energy, the Annual Quantity of Assigned Energy for each Contract Year of the Delivery Period; and (ii) with respect to Base Energy, the Hourly Quantity of Base Energy set forth in Exhibit A-1 for each Month of the Delivery Period, as such Exhibit A-1 shall be updated from time to time in accordance with Section 3.2(b).
“Contract Year” means each twelve-month period beginning on the first Day of January and ending on the last Day of December.
“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 (a) the sum of the Day-Ahead Market Prices for each Pricing Interval in a Month divided by (b) the number of Pricing Intervals in such Month, where “Pricing Interval” means the unit of time for which CAISO establishes a separate price. “Day-Ahead Market Price” means The Day Ahead Market or Locational Marginal Price for the Base Delivery Point for each applicable hour as published by CAISO, or as such price may be corrected or revised from time to time by such independent system operator or other entity in accordance with its rules.
“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” means each Hour commencing at 00:00 (PPT) on the first day of the Delivery Period, and each Hour thereafter during the Delivery Period.
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“Delivery Period” has the meaning specified in Exhibit G. “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(a). “Disqualified Sale Units” has the meaning specified in Section 7.6(a). “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.
“Enterprise” means the current operations of Project Participant related to the procurement of electric power for its customers from third parties, trading of Energy in the normal course of business, wholesale purchases and sales of Energy, Energy related programs including demand management, transportation and building electrification and energy efficiency, and related services and incentives to its customers, and shall include all contractual rights to distribution, metering and billing services, energy procurement, scheduling and coordination, transmission capacity, and fuel supply of Project Participant for the purchase, generation, transmission or distribution of electric power, and facilities, properties and structures of Project Participant, wherever located.
“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 Project Participant can contract for and purchase in compliance with EPS requirements that are applicable to Project Participant. “EPS Energy Period” means any Assignment Period or Prepay LLC EPS Energy Period.
“Execution Date” has the meaning specified in the preamble. “Federal Tax Certificate” means the executed Federal Tax Certificate delivered by Project Participant in the form attached as Exhibit D.
“FERC” means the Federal Energy Regulatory Commission or any successor thereto.
“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.
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“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. 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 Project Participant’s markets; (ii) Project Participant’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. Notwithstanding the foregoing or anything to the contrary herein, (I) any invocation of Force Majeure by Prepay LLC under the Prepaid Agreement shall constitute Force Majeure in respect of Issuer hereunder; (II) to the extent that (x) an Assigned PPA Counterparty fails to deliver any Assigned Energy and claims force majeure with respect to such failure to deliver or (y) an Assigned PPA Counterparty otherwise is unable to deliver any portion of the Annual Quantity due to an event that would be considered Force Majeure under this Agreement if it affected Issuer directly, then such event shall be deemed to constitute Force Majeure in respect of Issuer hereunder; and (III) to the extent that an Assignment Agreement is terminated early, such termination shall constitute Force Majeure with respect to Issuer until the earliest of (A) the commencement of an “Assignment Period” under a replacement Assignment Agreement, (B) the commencement of the delivery of EPS Compliant Energy procured by Prepay LLC consistent with the Prepaid Agreement or (C) the end of the second 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.
“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.
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“Hourly Quantity” means, with respect to each Delivery Hour during the Delivery Period, the quantity (in MWh) of Base Energy set forth on Exhibit A-1 for the Month in which such Delivery Hour occurs (as such Exhibit A-1 may be updated from time to time in accordance with Section 3.2(b)).
“Initial Assigned PPA” means each Assigned PPA referenced in the related Initial Assignment Agreement.
“Initial Assigned Rights and Obligations” means the Assigned Rights and Obligations assigned to JPMVEC under each of the Initial Assignment Agreements. “Initial Assignment Agreement(s)” means, unless otherwise agreed between the Project Participant and the Seller, (a) the Limited Assignment Agreement to be entered into prior to the Delivery Date among [●], a [●], JPMVEC and Project Participant and (b) the Limited Assignment Agreement to be entered into prior to the Delivery Date among [●], a [●], JPMVEC and Project Participant.
“Initial Reset Period” has the meaning specified in Exhibit G. “Issuer” has the meaning specified in the preamble.
“Issuer Default” has the meaning specified in Section 16.1. “ISTs” has the meaning specified in Section 6.1(a).
“Joint Powers Act” has the meaning set forth in the Recitals to this Agreement. “Joint Powers Agreement” means that certain Amended and Restated Joint Powers Agreement dated November 3, 2022, as amended from time to time, under which Project Participant is organized as a Joint Powers Authority in accordance with the Joint Powers Act. “JPMVEC” means J.P. Morgan Ventures Energy Corporation, a Delaware corporation.
“JPMVEC DPPA” means the Delivered Product Payment Amount as defined in the PPA Custodial Agreement.
“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 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 JPMVEC 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.
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[“Mandatory Purchase Date” has the meaning specified in the Trust Indenture.] “Minimum Discount” has the meaning specified in Exhibit G. “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” means the discount per MWh specified in Exhibit G, as the same may be revised for each Reset Period.
“Monthly Excess Quantity” means, for any Month, the amount, if any, by which the total quantity (in MWh) of Assigned Product delivered hereunder in such Month exceeds the Monthly Reference Quantity for such Month.
“Monthly Reference Quantity” means, with respect to each Month of the Delivery Period, the quantity (in MWh) of Assigned Product for such Month as set forth on Exhibit A-2 (as such Exhibit A-2 may be updated from time to time in accordance with Section 3.2(b)). “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. “PCC1 Product” means bundled renewable energy and RECs meeting the requirements of Portfolio Content Category 1 to be delivered to JPMVEC 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.
“Potential Remarketing Event” has the meaning specified in Section 4.5(b). “PPA Custodial Agreement” means that certain Custodial Agreement, dated as of the date hereof, by and among Project Participant, JPMVEC and the PPA Custodian.
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“PPA Custodian” means U.S. Bank Trust Company, National Association, and any successor under the PPA Custodial Agreement.
“Prepaid Agreement” has the meaning specified in the recitals. “Prepay LLC” means Pierpont Energy Prepay 9, LLC., a Delaware limited liability company.
“Prepay LLC EPS Energy Period” means any period during which Prepay LLC is delivering EPS Compliant Energy to the Issuer for sale to Project Participant hereunder as set forth in Section 3.3.
“Primary Delivery Point” has the meaning specified in Section 6.1(a). “Priority Products” means the Contract Quantity to be purchased by Project Participant under this Agreement, together with Products that (i) Project Participant is obligated to take under a long-term agreement, which Products either have been purchased by Project Participant 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, capacity or other products related to the foregoing; provided that the inclusion of any Product on an Assignment Schedule is subject to the limitations set forth in Exhibit F. “Project Participant” has the meaning specified in the preamble. “Project Participant Monthly Statement” has the meaning set forth in the PPA Custodial Agreement.
“Project Participant Default” has the meaning specified in Section 16.2. “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 the date of this Agreement, by and between Prepay LLC and Issuer.
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“Remarketing Election Deadline” means, for any Reset Period, the last date and time by which the Project Participant may provide a Remarketing Election Notice as set forth in the applicable Reset Period Notice.
“Remarketing Election Notice” has the meaning specified in Section 4.5(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. “Reset Period” means each “Reset Period” under the Re-Pricing Agreement. “Reset Period Notice” has the meaning specified in Section 4.5(a). “Retained Payment Amount” has the meaning set forth in the PPA Custodial Agreement.
“Revenues” means, for any period, all revenues and charges received and accrued by Project Participant for Energy and other Product and other services, facilities and commodities sold, furnished, or supplied by Project Participant from the Enterprise, together with income, earnings and profits therefrom.
“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.
“Series 2025[●] Bonds” means the Issuer’s Clean Energy Project Revenue Bonds, Series 2025[●].
“Schedule”, “Scheduled” or “Scheduling” means the actions of Issuer, Project Participant and/or their designated representatives, including each Party’s Transmission Providers, if 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. “Transmission Provider” means any entity or entities transmitting or transporting the Product on behalf of Issuer or Project Participant to or from the Delivery Point. “Trustee” means U.S. Bank Trust Company, National Association, and any successor as trustee under the Trust Indenture.
“Trust Indenture” means the Trust Indenture to be entered into prior to the commencement of the Delivery Period between Issuer and the Trustee, as supplemented, amended or amended and restated from time to time in accordance with its terms. “Voided Remarketing Election Notice” has the meaning specified in Section 4.5(b).
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“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.
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; CLEAN ENERGY PROJECT; CONDITION PRECEDENT Section 2.1 Delivery Period. Subject to the conditions precedent set forth in Section
2.3, delivery of Product by Issuer to Project Participant shall commence at the beginning of the Delivery Period and, subject to the delivery of a Remarketing Election Notice as provided in Section 4.5(b), shall continue throughout the Delivery Period.
Section 2.2 Clean Energy Project. Project Participant acknowledges and agrees that Issuer will meet its obligations to provide Product to Project Participant under this Agreement exclusively through its purchase of Product from Prepay LLC pursuant to the Prepaid Agreement and that Issuer is financing its purchase of such supplies through the issuance of the Bonds.
Concurrently with the execution of this Agreement, Project Participant has assigned to JPMVEC certain Assigned Rights and Obligations, including the right to receive Assigned Product, which Assigned Product will be delivered by JPMVEC to Prepay LLC under the Energy Sale and Service Agreement, immediately delivered by Prepay LLC to Issuer under the Prepaid Agreement, and then resold by Issuer to Project Participant hereunder. During the Delivery Period, Project Participant expects to assign to JPMVEC certain additional or replacement Assigned Rights and Obligations, including the right to receive Assigned Product, in accordance with Article III of this Agreement, which Assigned Product will be delivered by JPMVEC to Prepay LLC under the Energy Sale and Service Agreement, immediately delivered by Prepay LLC to Issuer under the Prepaid Agreement, and then resold by Issuer to Project Participant hereunder. Project Participant
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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.
Section 2.3 Condition Precedent. Notwithstanding anything to the contrary herein, commencement of deliveries and the rights and obligations of Issuer and Project Participant hereunder are subject to the condition precedent that Issuer shall have entered into the Prepaid Agreement and shall have issued the Bonds.
ARTICLE III.
ASSIGNMENT OF POWER PURCHASE AGREEMENTS
Section 3.1 Assignments Generally.
(a) Initial Assigned Rights and Obligations. Prior to the commencement of the Delivery Period under this Agreement, Project Participant will execute the Initial Assignment Agreement(s) and assign to JPMVEC thereunder the Initial Assigned Rights and Obligations. (b) Additional 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 any EPS Energy Period, Project Participant shall exercise Commercially Reasonable Efforts and cooperate with JPMVEC in good faith to assign to JPMVEC certain of Project Participant’s rights and obligations under one or more Assignable PPAs pursuant to which Project Participant is purchasing EPS Compliant Energy, RECs and other products that may be assigned pursuant to the terms set forth in Exhibit F. The Parties recognize that, in the case of such an assignment, JPMVEC will be obligated to sell and deliver Assigned Product it receives under all Assigned Rights and Obligations to Prepay LLC under the Energy Sale and Service Agreement, and that Prepay LLC will delivery all such Assigned Product to Issuer under the terms of the Prepaid Agreement. To be effective hereunder, any such assignment of Assigned Rights and Obligations under an Assignable PPA must be proposed, agreed and consented to in accordance with the Prepaid Agreement and consented to by JPMVEC.
Section 3.2 Adjustments to Hourly Quantities of Base Energy. (a) Initial Assigned Rights and Obligations. The Hourly Quantities of Base Energy and Monthly Reference Quantities of Assigned Energy set forth on Exhibits A-1 and A-2 hereto have been calculated to reflect the Initial Assigned Rights and Obligations. (b) Additional Assigned Rights and Obligations. To the extent that an EPS Energy Period terminates or expires and Assigned Energy is not available for delivery immediately following (i) the end of the period for which Force Majeure is deemed to occur in the event of an early termination or (ii) the expiration of an EPS Energy Period, the Parties shall update (i) Exhibit A-1 to reflect an increase in the Hourly Quantities of Base Energy and (ii) Exhibit A-2 to reflect a decrease in the Monthly Reference Quantities of Assigned Energy, in each case, in an amount equal to the Assigned Energy associated with the EPS Energy Period that terminated or expired.
In the case of any other commencement of a subsequent EPS Energy Period, the Parties shall update (i) Exhibit A-1 to reflect a decrease in the Hourly Quantities of Base Energy and (ii) Exhibit
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A-2 to reflect an increase in the Monthly Reference Quantities of Assigned Energy, in each case to reflect the details for such EPS Energy Period.
Section 3.3 Prepay LLC Procurement of EPS Compliant Energy. Under the circumstances described in Section 6.3 of the Prepaid Agreement, Prepay LLC is obligated to exercise Commercially Reasonable Efforts to obtain EPS Compliant Energy for ultimate redelivery to Project Participant hereunder, and, in such case, Project Participant shall cooperate in good faith with Prepay LLC in connection therewith, provided that:
(a) Prepay LLC’s procurement of any such EPS Compliant Energy for ultimate redelivery hereunder shall be subject to Project Participant’s prior written consent, with such consent not to be unreasonably withheld, provided that it shall be reasonable for Project Participant to withhold its consent based on the requirements of the EPS or other regulatory requirements; (b) Issuer and Project Participant 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; (c) the period of delivery for any such EPS Compliant Energy shall not exceed the length, as applicable, of (i) the then-current Reset Period if such EPS Compliant Energy is obtained for delivery for the remainder of a Reset Period and (ii) the length of the next succeeding Reset Period if such EPS Compliant Energy is obtained for delivery commencing at the beginning of such Reset Period; and
(d) during a Prepay LLC EPS Energy Period, if requested by Prepay LLC or JPMVEC, Project Participant shall continue to exercise Commercially Reasonable Efforts and cooperate with Prepay LLC and JPMVEC in good faith to assign Assigned Rights and Obligations to JPMVEC under an Assignable PPA.
Section 3.4 Failure to Obtain EPS Compliant Energy. To the extent an EPS Energy Period terminates or expires and Project Participant and Prepay LLC have been unable to obtain EPS Compliant Energy for delivery hereunder pursuant to the provisions of Article III then, until EPS Compliant Energy is obtained for delivery hereunder, Prepay LLC shall remarket the Contract Quantity of Base Energy pursuant to the provisions of Exhibit C to the Prepaid Agreement, subject to the following:
(a) Project Participant’s and Prepay LLC’s obligations set forth in Section
3.1(b) shall continue to apply; and
(b) Project Participant shall not make any new commitment to purchase Priority Products during such a remarketing.
Section 3.5 JPMVEC Consent to Amendments. Project Participant and Issuer agree to obtain the written consent of JPMVEC prior to any amendment to this Article III or Exhibit F hereto.
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Section 3.6 JPMVEC Failure to Pay PPA Seller. To the extent that (a) JPMVEC fails to pay when due any JPMVEC DPPA and (b) Purchaser makes a payment for such amounts to the applicable Assigned PPA Counterparty, Purchaser shall provide notice thereof to Issuer upon Purchaser’s payment to the applicable Assigned PPA Counterparty and Issuer shall make a payment to Purchaser in the amount of such non-payment.
ARTICLE IV.
SALE AND PURCHASE; PRICING
Section 4.1 Sale and Purchase of Product. Issuer agrees to sell and deliver or cause to be delivered to Project Participant, and Project Participant agrees to purchase and take or cause to be taken from Issuer, in each case, on a Firm (LD) basis, the Contract Quantity of Energy pursuant to the terms and conditions set forth in this Agreement. The Parties acknowledge and agree that Issuer’s delivery obligation for (i) Assigned Products will be measured on an annual basis and (ii) Base Energy will be measured on an Hourly basis, as reflected in the definition of Contract Quantity and further set forth in the terms of this Agreement. The Project Participant also agrees to purchase from Issuer the Monthly Excess Quantities and Assigned PAYGO Quantities on the terms set forth herein.
Section 4.2 Project Participant Payments.
(a) For each MWh of Assigned Product delivered to Project Participant, Project Participant shall pay Issuer the applicable Contract Price; provided that (i) Issuer shall owe a payment to Project Participant to the extent that the Contract Price for Energy delivered is negative and (ii) Project Participant’s payment of the Retained Payment Amount to the PPA Custodian consistent with the terms of the PPA Custodial Agreement shall satisfy Project Participant’s obligations hereunder with respect to Monthly Excess Quantities and Assigned PAYGO Quantities. Payments shall be made in accordance with each Billing Statement provided pursuant to Section 14.1.
(b) The Contract Price for Assigned Energy is inclusive of any amounts due in respect of other Assigned Products.
Section 4.3 No Obligation to Take Base Energy. Notwithstanding anything to the contrary in this Agreement, Project Participant shall not be required to purchase and receive any Base Energy hereunder, and Issuer, with respect to any Base Energy that otherwise would be delivered hereunder, shall cause Prepay LLC to remarket such Base Energy pursuant to the provisions of Exhibit C to the Prepaid Agreement.
Section 4.4 Annual Refund. In addition to any Monthly Discount applied to Energy Scheduled hereunder, Issuer shall credit to Project Participant amounts as may be available for distribution by Issuer pursuant to Section 15.15(b) of the Trust Indenture, subject to the provisions of this Section 4.4. Such Annual Refund, if any, shall be credited to the next amount due from Project Participant 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 Project Participant, Issuer may reserve such funds (i) as may be required under the terms of the Trust
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Indenture or (ii) with the prior written consent of Project Participant (a) to fund or maintain the Minimum Discount 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 4.5 Reset Period Remarketing.
(a) Reset Period Notice. For each Reset Period, Issuer shall provide to Project Participant, at least ten (10) days prior to the Remarketing Election Deadline, written notice (a “Reset Period Notice”) setting forth (i) the duration of such Reset Period, (ii) the estimated Available Discount for such Reset Period, and (iii) the applicable Remarketing Election Deadline.
Issuer may thereafter update such notice at any time prior to the Remarketing Election Deadline and in any such update may extend the Remarketing Election Deadline in its sole discretion. (b) Remarketing Election. If the Reset Period Notice (or any update thereto) for any Reset Period indicates that the estimated Available Discount specified in such notice is not at least equal to the Minimum Discount for such Reset Period, then: (i) a “Potential Remarketing Event” shall be deemed to exist, and (ii) Project Participant may, not later than the Remarketing Election Deadline, issue a written notice in the form attached hereto as Exhibit C (a “Remarketing Election Notice”) to Issuer, Prepay LLC and the Trustee electing for the Assignment Agreements to be terminated and all Base Energy with respect to the Remaining Term to be remarketed; provided, however, if the actual Available Discount, as finally determined under the Re-Pricing Agreement, is equal to or greater than the Minimum Discount, then Issuer may, in its sole discretion, elect by written notice (a “Voided Remarketing Election Notice”) to Project Participant to treat such Remarketing Election Notice as void. If Project Participant issues a valid Remarketing Election Notice (other than a Voided Remarketing Election Notice) in accordance with this Section 4.5(b) for any Reset Period, then the Delivery Period shall terminate as of the end of the last Delivery Hour of the last Delivery Month of the Reset Period then in effect, and this Agreement shall terminate as of the last day of such Reset Period (subject only to the winding up arrangements described in Section 17.8).
(c) Final Determination of Available Discount. The Parties acknowledge and agree that the final Available Discount 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 may differ from the estimate or estimates of such Available Discount last provided to Project Participant prior to the Remarketing Election Deadline for such Reset Period; provided that the Available Discount for any Reset Period will not be less than the lower of (i) the last estimated Available Discount set forth in the Reset Period Notice for such Reset Period (or any update thereof) sent to Project Participant by Issuer and (ii) the Minimum Discount for such Reset Period.
ARTICLE V.
FAILURE TO SCHEDULE; ASSIGNED DELIVERED QUANTITY SHORTFALLS
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Section 5.1 Assigned Product. Notwithstanding anything herein to the contrary, neither Project Participant nor Issuer shall have any liability or other obligation to one another for any failure to Schedule, take, or deliver Assigned Product.
Section 5.2 Tracking of Assigned Delivered Quantities. Project Participant and Issuer acknowledge that the Assigned Delivered Quantity for any Month may differ from the Monthly Reference Quantity for such Month. If the Billing Statement for any Month indicates that the Assigned Delivered Quantity in such Month was less than the Monthly Reference Quantity for such Month, then the excess of such Monthly Reference Quantity over such Assigned Delivered Quantity (such excess, an “Assigned Delivered Quantity Shortfall”) shall be added as a positive number to the balance of a notional tracking account maintained by Prepay LLC under the Prepaid Agreement (or by JPMVEC on behalf of Prepay LLC under the Energy Sale and Service Agreement) (the “Assigned Delivered Quantity Shortfall Tracking Account”). Amounts shown on the Assigned Delivered Quantity Shortfall Tracking Account will be reduced in any future Month during the same Contract Year by the sale and delivery of any Assigned Delivered Quantity during any such Month in excess of the Monthly Reference Quantity for such Month (the “Assigned Delivered Quantity Excess”). Any positive balance remaining in the Assigned Delivered Quantity Shortfall Tracking Account at the end of a Contract Year shall be deemed remarketed in accordance with Section 5 of Exhibit C to the Prepaid Agreement.
ARTICLE VI.
DELIVERY POINTS; SCHEDULING
Section 6.1 Delivery Points.
(a) Base Delivery Points. All Base Energy 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, Project Participant 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 Project Participant at the Primary Delivery Point shall be facilitated through submission of Inter-SC Trades, as defined in the CAISO Tariff (“ISTs”). Project Participant shall designate a scheduling coordinator in the CAISO market for this purpose as specified in Exhibit [--]. (b) Alternate Base Market Prices. The Commodity Reference Price for any Alternate Delivery Point shall be mutually agreed and identified by the Parties, or if no such price is identified for such Alternate Delivery Point, the Day-Ahead Average Price 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 Section 6.2 Transmission and Scheduling. Issuer shall Schedule or arrange for Scheduling services with CAISO in accordance with the CAISO Tariff, to deliver the Base Energy
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to the Base Delivery Point. Project Participant shall Schedule or arrange for Scheduling services with CAISO in accordance with CAISO Tariff, to receive the Base Energy at the Base Delivery Point. If Prepay LLC Schedules or arranges for Scheduling services, to deliver Base Energy 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 6.3 Title and Risk of Loss. Title to and risk of loss of the Product delivered under this Agreement shall pass from Issuer to Project Participant 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 17.1, 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 Energy 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 Project Participant for any such Claims relating to replacement costs, cover damages or similar liabilities that are payable to any Person because of Project Participant’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 6.4 Scheduling and Transmission. Scheduling and transmission of Assigned Energy shall be in accordance with the applicable Assignment Agreement pursuant to which Project Participant shall act as scheduling agent for each of JPMVEC, Prepay LLC and Issuer.
Section 6.5 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 Project Participant hereunder, provided that any associated Renewable Energy Credits and other Assigned Product are also delivered to Project Participant.
Section 6.6 Assigned Products. Notwithstanding anything to the contrary herein, except as provided in Section 4.2, Issuer shall have no liability under this Article VI with respect to any Assigned Products.
ARTICLE VII.
USE OF PRODUCT
Section 7.1 Tax Exempt Status of the Bonds. Project Participant 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, Project Participant agrees that it will (a) provide
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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. Project Participant 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. Project Participant agrees to purchase and receive the Contract Quantity to be delivered under this Agreement (a) in priority over and in preference to all other Products available to Project Participant 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, notwithstanding Project Participant’s compliance with Section 7.1, Project Participant does not require all or any portion of the Contract Quantity to meet its requirements for Energy for any Hour that it is obligated to purchase under this Agreement as a result of (i) insufficient demand by Project Participant’s retail customers or (ii) a change in Law, Project Participant may, with reasonable notice issued in the form of a remarketing notice in accordance with Exhibit C, request that Prepay LLC, as permitted by the Prepaid Agreement, sell such portion of such Contract Quantity to another Municipal Utility. Any remarketing notice issued under clause (ii) above shall constitute a Structural Remarketing Notice (as defined in the Prepaid Agreement) and shall be subject to the requirements set forth in the Prepaid Agreement. If Prepay LLC makes such a sale under Exhibit C to the Prepaid Agreement, Issuer shall credit against the amount owed by Project Participant 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 Prepaid 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 Project Participant’s other obligations under this Article VII, Project Participant 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.
Project Participant agrees that it will provide such additional information, records and certificates as Issuer may reasonably request to confirm Project Participant’s compliance with this Section 7.4.
Section 7.5 Remediation.
(a) The Parties acknowledge that Project Participant 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 Project Participant’s Product needs. To the extent Project Participant does so, Project Participant shall (a) exercise Commercially Reasonable Efforts to use any Disqualified Sale Proceeds of such remarketing to purchase Products (other than Priority Products) that Project Participant 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.
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(b) To the extent Base Energy is remarketed under Section 4.3 and any such remarketing results in a Ledger Entry (as defined in the Prepaid Agreement), Project Participant agrees that it shall (i) exercise Commercially Reasonable Efforts to use an amount equivalent to the remarketing proceeds associated with 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 Prepaid Agreement prior to remediating such proceeds under any other contract that provides for the purchase of Priority Products. To track compliance with Project Participant’s obligations under this Section 7.5(b), Project Participant 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).
Section 7.6 Remediation; Ledger Entries; Redemption.
(a) Remediation. To track compliance with the requirements of Section 7.5(a), Project Participant 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 Project Participant to any Person in a transaction that does not comply with the Qualifying Use Requirements and (ii) have not been remediated by Project Participant 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”). Notwithstanding the foregoing, Project Participant shall not be required to provide such quarterly report for any quarter during which there are no Disqualified Sale Units and 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 Prepaid Agreement, with the ledger entries to be dated as of the end of the first month of the relevant quarter. Notwithstanding the foregoing, Issuer shall not be required to provide such report for any quarter during which there are no Disqualified Sale Units and Disqualified Sale Proceeds.
(c) Transfers to Trustee. Project Participant shall transfer (to the extent such un-remediated 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 un-remediated 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 un-remediated 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 Fund (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.
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ARTICLE VIII.
REPRESENTATIONS AND WARRANTIES; ADDITIONAL COVENANTS
Section 8.1 Representations and Warranties. 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 pursuant to the provisions of Title 1, Division 7, Chapter 5, Article 1 (Section 6500 et seq.) of the California Government Code and validly existing under the Laws of the State of California;
(b) in the case of Project Participant as the representing Party, Project Participant is a joint powers authority organized pursuant to the provisions of Title 1, Division 7, Chapter 5, Article 1 (Section 6500 et seq.) of the California Government Code and a community choice aggregator pursuant to the provisions of Section 366.2 of the California Public Utilities Code, 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;
(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;
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(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 Representations and Warranties regarding PCC1 Product and Long-Term PCC1 Product. To the extent that any Assigned Product is PCC1 Product or Long-Term PCC1 Product, the following provisions apply:
(a) Eligibility. Issuer, and, if applicable, its successors, represents and warrants that throughout the Assignment Period with respect to the applicable Assigned PPA that: (i) the Applicable 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 Applicable 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 the applicable Assignment Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Issuer has used commercially reasonable efforts to comply with such change in law.
(b) Transfer of Renewable Energy Credits. Issuer and, if applicable, its successors, represents and warrants that throughout the Assignment Period with respect to the applicable Assigned PPA the renewable energy credits transferred to Project Participant conform to the definition and attributes required for compliance with the California Renewables Portfolio Standard, as set forth in California Public Utilities Commission Decision 08-08-028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of the applicable Assignment Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Issuer has used commercially reasonable efforts to comply with such change in law.
(c) Tracking of RECs in WREGIS. Issuer warrants that all necessary steps to allow the Renewable Energy Credits transferred to Project Participant to be tracked in WREGIS
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will be taken prior to the first delivery of Assigned Energy under this Agreement from the applicable Assigned PPA.
(d) 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 Project Participant to any other Person;
(iii) the Energy component of the Assigned Product produced by the Applicable Project and purchased by Issuer for resale to Project Participant hereunder is not being sold by Issuer back to the Applicable Project or the Assigned PPA Seller; (iv) Assigned Energy and Assigned RECs to be purchased and sold pursuant to this Agreement are not committed to another party; (v) The Assigned Product is free and clear of all liens or other encumbrances;
(vi) Issuer will deliver to Project Participant 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; (vii) The Assigned Product supplied to Project Participant 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 Project Participant, 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.
(e) Issuer Further Issuer Representations. Issuer further represents and warrants to Project Participant 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, 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;
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(iii) The electricity transferred by this Agreement is transferred to Project Participant 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 Assigned PPA Counterparty set forth in the Assigned PPAs in making the representations and warranties set forth in this Section 8.2 and has not performed any independent investigation with respect thereto; and
(ii) Project Participant agrees that its sole recourse for any breach of the provisions of this Section 8.2 shall be the termination of the applicable Assignment Period and Project Participant shall have no other recourse against Issuer or remedies under this Agreement for any such breach.
Section 8.3 Warranty of Title. Issuer warrants that it will deliver to Project Participant (a) all Base Energy (to the extent it is obligated to deliver Base Energy to Project Participant) 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 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 8.4 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 8.5 Continuing Disclosure. Project Participant agrees to provide to Issuer:
(a) such financial and operating information as may be requested by Issuer, including Project Participant’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 Project Participant 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
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owner of the Bonds to take such actions and to initiate such proceedings as may be necessary and appropriate to cause Project Participant to comply with such agreement, including without limitation the remedies of mandamus and specific performance.
ARTICLE IX.
TAXES
As between Issuer and Project Participant, 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 Project Participant and its Affiliates for any such taxes paid by Project Participant or its Affiliates. As between Issuer and Project Participant, Project Participant 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
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
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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 mitigate 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 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
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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 OF THIS AGREEMENT
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 17.14, 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. Prior to assigning this Agreement, Project Participant shall deliver to Issuer written confirmation from each Rating Agency (as defined in the Trust Indenture), provided that such agency has rated and continues to rate the Bonds, (i) that the assignment will not result in a reduction, qualification, or withdrawal of the then-current ratings assigned by such Rating Agency to the Bonds or (ii) written confirmation from each of the Applicable Rating Agencies, that the assignee has an outstanding long-term senior, unsecured, unenhanced debt rating equivalent to or higher than the ratings assigned by the Applicable Rating Agencies 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) Project Participant’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, Project Participant shall deliver to Issuer a statement (a “Project Participant’s Statement”) listing (i) any Assigned Delivered Quantity Shortfalls for such
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Month, and (ii) any amounts due to Project Participant in connection with this Agreement with respect to the prior Months.
(b) Issuer 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 Project Participant indicating (A) the total amount due to Issuer for Product delivered in the prior Month, (B) any other amounts due to Issuer or Project Participant in connection with this Agreement with respect to the prior Months, (C) the net amount due to Issuer or Project Participant and (D) the Assigned Delivered Quantity Shortfall Tracking Account balance, if any; provided that invoicing for all Monthly Excess Quantities or Assigned PAYGO Quantities shall occur under the PPA Custodial Agreement. (ii) If a Project Participant Monthly Statement 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 Monthly Reference Quantities were delivered under the applicable Assigned PPA for such Month, and any subsequent resettlements required with respect thereto shall occur under the PPA Custodial Agreement.
(iii) Notwithstanding the foregoing, the Parties agree that Prepay LLC’s delivery of a Billing Statement (as defined in the Prepaid Agreement) to Issuer and Project Participant pursuant to Section 14.1(b) of the Prepaid Agreement shall be deemed to satisfy Issuer’s obligation to deliver a Billing Statement pursuant to this Section 14.1(b). (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 Project Participant, then Project Participant shall remit such amount to the Trustee for the benefit of the 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 Project Participant by wire transfer (pursuant to Project Participant’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. (b) No Duty to Estimate. If Project Participant fails to issue a Project Participant’s Statement with respect to any Month, Issuer shall not be required to estimate any amounts due to Project Participant for such Month, provided that Project Participant may include any such amount on subsequent Project Participant’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
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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 Project Participant disputes any amounts included in a Billing Statement, Project Participant 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 Project Participant may have; provided, however, that Project Participant shall have the right, after payment, to dispute any amounts 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 Project Participant’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 Project Participant 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 Project Participant’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 Project Participant’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 Project Participant’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
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and payment for all amounts set forth in a Billing Statement provided to Project Participant shall be made without set-off or counterclaim of any kind.
Section 14.7 Rate Covenant. Project Participant agrees to make payments it is required to make under this Agreement from Revenues, as a charge against such Revenues, as an operating expense of its Enterprise and a cost of purchased Product; provided, however, that Project Participant, in its discretion, may apply any legally available moneys to the payment of amounts due under this Agreement. Project Participant hereby covenants and agrees that it will establish, maintain, and set rates and charges for its Enterprise so as to provide Revenues sufficient to enable Project Participant to pay to Issuer all amounts payable under this Agreement and to pay all other amounts payable from the Revenues of the Enterprise, and to maintain any reserves as required by the Project Participant’s reserve policy. Project Participant further covenants and agrees that it shall not furnish or supply Energy or related services free of charge to any person, firm, corporation association, or other entity, public or private, except any such service free of charge that Project Participant 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 Project Participant for the sale of Energy or the provision of other services to its customers. Project Participant 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, Project Participant in connection with its Enterprise, Project Participant shall not pledge or encumber the 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.
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 XVI.
DEFAULT; REMEDIES; TERMINATION
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Section 16.1 Issuer Default. Each of the following events shall constitute a “Issuer Default” under this Agreement:
(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 16.2 Project Participant Default. Each of the following events shall constitute a “Project Participant Default” under this Agreement:
(a) Project Participant fails to pay when due any amounts owed to Issuer pursuant to this Agreement and such failure continues for three Days following receipt by Project Participant of written notice thereof;
(b) Project Participant (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 Project Participant 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 Project Participant of written notice thereof; (d) Project Participant 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 Project Participant of notice thereof; or
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(e) Project Participant shall have failed to establish, maintain, or collect rates or charges adequate to provide Revenues sufficient to enable Project Participant to pay all amounts due to Issuer under this Agreement, as set forth in Section 14.7, and such failure continues for more than 30 days following the earlier of receipt by Project Participant of notice thereof.
Section 16.3 Remedies Upon Default.
(a) Termination. If at any time a Issuer Default or a Project Participant 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 Project Participant Default, as applicable, terminate this Agreement effective as of a day not earlier than the day such notice is deemed given under Article XV 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 Project Participant Default specified in Section 16.2(b(iv) or, to the extent analogous thereto, Section 16.2(b)(viii).
In addition, during the existence of an Issuer Default or a Project Participant 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. (b) Additional Remedies. In addition to the remedies set forth in Section
16.3(a) (and without limiting any other provisions of this Agreement), during the existence of any Project Participant Default, Issuer may suspend its performance hereunder and discontinue the supply of all or any portion of the Product otherwise to be delivered to Project Participant by it under this Agreement. If Issuer exercises its right to suspend performance under this Section