Technical Committee Meeting
Friday, December 1, 2023
10:00 A.M.
MCE Charles F. McGlashan Board Room, 1125 Tamalpais Avenue, San Rafael, CA 94901 MCE Mt. Diablo Room, 2300 Clayton Road, Suite 1150, Concord, CA 94920 Office of Contra Costa Supervisor John Gioia, 11780 San Pablo Ave., Suite D, El Cerrito, CA 94530
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Agenda Page 1 of 2
1. Roll Call/Quorum
2. Board Announcements (Discussion)
3. Public Open Time (Discussion)
4. Report from Chief Executive Officer (Discussion)
5. Consent Calendar (Discussion/Action)
C.1 Approval of 10.6.23 Meeting Minutes
C.2 Proposed Amended and Restated Power Purchase Agreement with Golden Fields Solar IV, LLC
C.3 Proposed Amended and Restated Power Purchase and Sale Agreement with G2 Energy, Ostrom Road LLC
Agenda Page 2 of 2
6. Proposed Energy Storage Service Agreement with Cormorant Energy Storage, LLC (Discussion/Action)
7. Fiscal 2023/24 Operating Fund Budget Update (Discussion)
8. Committee Matters & Staff Matters (Discussion)
9. Adjourn
The Technical Committee may discuss and/or take action on any or all of the items listed on the agenda irrespective of how the items are described.
This Committee may be attended by Board Members who do not serve on this Committee. In the event that a quorum of the entire Board is present, this Committee shall act as a Committee of the Whole. Any item acted upon by the Committee of the Whole will be considered advisory to the Board of Directors and require consideration and action by the Board of Directors at a noticed Board meeting before adoption or approval of the item.
DISABLED ACCOMMODATION: If you are a person with a disability which requires an accommodation or an alternative format, please call MCE at 1 (888) 632-3674 at least 72 hours before the meeting start time to ensure arrangements for accommodation.
DRAFT
MCE TECHNICAL COMMITTEE MEETING MINUTES
Friday, October 6, 2023
10:00 A.M.
Present: Alexis Fineman, Town of San Anselmo
Eduardo Martinez, City of Richmond
Devin Murphy, City of Pinole
Charles Palmares, City of Vallejo
Scott Perkins, City of San Ramon
Katie Rice, County of Marin
Absent: Gina Dawson, City of Lafayette
John Gioia, Contra Costa County
Staff
& Others: Jesica Brooks, Board Clerk
Darlene Jackson, Lead Board Clerk
Vicken Kasarjian, Chief Operating Officer
Justin Kudo, Senior Strategic Analysis and Rates Manager Tanya Lomas, Internal Operations Assistant
Alexandra McGee, Director of Strategic Initiatives
Ashley Muth, Internal Operations Coordinator
Zae Perrin, Director of Customer Operations
Daniel Settlemyer, Internal Operations Coordinator
Jamie Tuckey, Chief of Staff
Dawn Weisz, Chief Executive Officer
1. Roll Call
Chair Murphy called the regular Technical Committee meeting to order at 10:05 a.m. with quorum established by roll call.
2. Board Announcements (Discussion)
There were no announcements.
3. Public Open Time (Discussion)
Chair Murphy opened the public comment period and there were no comments.
4. Report from Chief Executive Officer (Discussion)
CEO Dawn Weisz introduced this item and addressed questions from Committee members.
5. Consent Calendar (Discussion/Action)
C.1 Approval of 6.2.23 Meeting Minutes
C.2 Amendments to Power Purchase Agreements with CES Electron Farm One, LLC
AI #05 C.1: Approval of 10.6.23 Meeting Minutes
DRAFT
C.3 Third Amended and Restated Scheduling Services Agreements with ZGlobal, Inc.
Chair Murphy opened the public comment period and there were no comments.
6. MCE Solar Billing Plan Tariff (Discussion/Action)
Justin Kudo, Senior Strategic Analysis and Rates Manager, and Zae Perrin, Director of Customer Operations, presented this item and addressed questions from Committee members.
Chair Murphy opened the public comment period and there were comments from member of the public, Howdy Goudey.
Action: It was M/S/C (Perkins/Martinez) that the Technical Committee approve the proposed Solar Billing Plan tariff included in Attachment A, as well as the proposed Export Rate methodology. Motion carried by unanimous roll call vote. (Absent: Directors Dawson and Gioia).
7. Update on MCE’s Green Hydrogen Activities (Discussion) Alexandra McGee, Director of Strategic Initiatives, presented this item and addressed questions from Committee members.
Chair Murphy opened the public comment period and there were comments from members of the public, Bob Miller and Howdy Goudey.
Action: No action required.
8. Committee Matters & Staff Matters (Discussion)
There were no comments.
9. Adjournment
Chair Murphy adjourned the meeting at 11:56 a.m. to the next scheduled Technical Committee Meeting on November 3, 2023.
Action: It was M/S/C (Perkins/Martinez) to approve Consent Calendar C.1-C.3.
Motion carried by unanimous roll call vote. (Absent: Directors Dawson and Gioia).
AI #05 C.1: Approval of 10.6.23 Meeting Minutes
DRAFT
___________________________________________
Devin Murphy, Chair
Attest:
___________________________________________
Dawn Weisz, Secretary
AI #05 C.1: Approval of 10.6.23 Meeting Minutes
December 1, 2023
TO: MCE Technical Committee
FROM: Paul Krebs, Power Procurement Manager
RE: Proposed Amended and Restated Power Purchase Agreement with Golden Fields Solar IV, LLC (Agenda Item #05 C.2)
ATTACHMENTS: Amended and Restated Renewable Power Purchase Agreement Between Marin Clean Energy and Golden Fields Solar IV, LLC Dear Technical Committee Members:
Summary:
MCE and Golden Fields Solar IV, LLC (“Golden Fields”) are parties to a Renewable Power Purchase Agreement (the “PPA”), executed February 4, 2022, for deliveries from a 100 megawatt (MW) solar project and a co-located 92 MW battery energy storage facility with a 4 hour duration located in Fresno, CA.
The project owner, Clearway, notified MCE that due to unprecedented, market wide challenges, a price adjustment to the PPA would be required to preserve the viability of the project. Through negotiations with Clearway, MCE staff worked to minimize the price increase while adding beneficial terms including the buyer right to charge the storage facility with grid energy which could increase ancillary service revenue for MCE.
The PPA was also updated with references to the latest California Public Utilities (“CPUC”) Mid-Term Reliability (“MTR”) decision D.23-02-040 to ensure that the project is fully compliant with current CPUC MTR rules and regulations.
The Golden Fields project is a valuable addition to MCE’s portfolio. As MCE’s second co-located solar + storage project, it will produce clean energy to charge the battery during the day and can discharge energy when MCE determines it is needed most. This serves as a hedge against MCE’s purchase from the market in the early morning and evening hours when prices tend to be the most volatile. In addition, this provides valuable resource adequacy (RA) and will help satisfy CPUC compliance obligations. By agreeing to this amendment, MCE would be preserving its rights to an important resource from a portfolio, compliance, and cost mitigation perspectives.
Fiscal Impacts:
The impact from the PPA price increase will not impact the FY 23/24 budget and will be accounted for in future energy budget line items starting in FY 25/26.
Recommendation:
Approve the attached Amended and Restated Renewable Power Purchase Agreement Between Marin Clean Energy and Golden Fields Solar IV, LLC.
MCE Draft 11/14/23
1 AMENDED AND RESTATED RENEWABLE POWER PURCHASE AGREEMENT
COVER SHEET
Seller: Golden Fields Solar IV, LLC, a Delaware limited liability company (“Seller”) Buyer: Marin Clean Energy, a California joint powers authority (“Buyer”) Description of Facility: A dedicated and separately metered 100 MW solar photovoltaic generating facility, along with a co-located and dedicated 92 MW/368 MWh battery energy storage facility, which is adjacent to a larger solar photovoltaic and energy storage facility being developed at the same Site, all located in Kern County, in the State of California, as further described in Exhibit A.
Milestones:
Milestone Date for
Completion
Evidence of Site Control Complete
CEC Precertification Obtained August 1, 2024
Documentation of Conditional Use Permit if required:
[X] CEQA, [ ] Cat Ex, [ ] Neg Dec, [ ] Mitigated Neg Dec, [X] EIR Complete Seller’s receipt of Phase I and Phase II Interconnection study results for Seller’s Interconnection Facilities Complete Executed Interconnection Agreement Complete
Expected Construction Start Date August 1, 2024
Deliverability Status Obtained April 1, 2025
Initial Synchronization October 15, 2024
Network Upgrades completed October 1, 2024
Expected Commercial Operation Date June 1, 2025
Delivery Term: The period for Product delivery will be for fifteen (15) Contract Years.
Expected Energy:
Contract Year Expected Energy (MWh)
1 2
3 4
5 6
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 2 7
8 9
10 11
12 13
14 15
Guaranteed Capacity: 100 MW
Storage Contract Capacity: 92 MW (4-hour)
Storage Contract Output: 368 MWh
Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency
Rate
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 Minimum Efficiency Rate:
RA Deficiency Amount Cap:
Month Cap ($/kW-month)
January
February
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 3 March
April
May
June
July
August
September
October
November
December
Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 15
The Storage Rate shall be:
Contract Year Storage Rate
1 – 15
Product:
☒ Generating Facility Energy
☒ Discharging Energy
☒ Green Attributes (Portfolio Content Category 1)
☒ Storage Capacity
☒ Capacity Attributes (select options below as applicable) ☐ Energy Only Status
☒ Deliverability Status: on and after the Commercial Operation Date ☒ Ancillary Services
Scheduling Coordinator: Buyer/Buyer Third Party
Development Security and Performance Security:
Development Security:
Performance Security:
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC i
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS.......................................................................................................... 1
1.1 Contract Definitions............................................................................................... 1
1.2 Rules of Interpretation ......................................................................................... 23 ARTICLE 2 TERM; CONDITIONS PRECEDENT................................................................... 24
2.1 Contract Term. ..................................................................................................... 24
2.2 Conditions Precedent to Delivery Term .............................................................. 24
2.3 Development; Construction; Progress Reports.................................................... 25
2.4 Remedial Action Plan .......................................................................................... 26
2.5 Intentionally Omitted........................................................................................... 26
2.6 Intentionally Omitted........................................................................................... 26
2.7 Ground-Mounted Solar Requirements for Pollinator-Friendly Habitats; Signage................................................................................................................. 26
2.8 CPUC Mid-Term Reliability Requirements........................................................ 27 ARTICLE 3 PURCHASE AND SALE....................................................................................... 28
3.1 Purchase and Sale of Product............................................................................... 28
3.2 Sale of Green Attributes....................................................................................... 28
3.3 Imbalance Energy. ............................................................................................... 28
3.4 Ownership of Renewable Energy Incentives....................................................... 28
3.5 Future Environmental Attributes. ........................................................................ 29
3.6 Test Energy. ......................................................................................................... 29
3.7 Capacity Attributes. ............................................................................................. 29
3.8 Resource Adequacy Failure ................................................................................. 30
3.9 CEC Certification and Verification. .................................................................... 30
3.10 California Renewables Portfolio Standard........................................................... 31
3.11 Change in Law. .................................................................................................... 31
3.12 Project Configuration........................................................................................... 33 ARTICLE 4 OBLIGATIONS AND DELIVERIES.................................................................... 33
4.1 Delivery................................................................................................................ 33
4.2 Title and Risk of Loss.......................................................................................... 33
4.3 Forecasting........................................................................................................... 34
4.4 Dispatch Down/Curtailment. ............................................................................... 35
4.5 Charging Energy Management ............................................................................ 36
4.6 Reduction in Delivery Obligation........................................................................ 38
4.7 Guaranteed Energy Production............................................................................ 39
4.8 Storage Availability ............................................................................................. 39
4.9 Storage Capacity Tests......................................................................................... 39
4.10 WREGIS .............................................................................................................. 40
4.11 Station Use........................................................................................................... 41
4.12 Interconnection Capacity ..................................................................................... 41 ARTICLE 5 TAXES.................................................................................................................... 41 AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC ii
5.1 Allocation of Taxes and Charges. ........................................................................ 41
5.2 Cooperation. ......................................................................................................... 42
5.3 Ownership. ........................................................................................................... 42 ARTICLE 6 MAINTENANCE OF THE FACILITY ................................................................. 42
6.1 Maintenance of the Facility. ................................................................................ 42
6.2 Maintenance of Health and Safety. ...................................................................... 42
6.3 Shared Facilities ................................................................................................... 42 ARTICLE 7 METERING ............................................................................................................ 43
7.1 Metering. .............................................................................................................. 43
7.2 Meter Verification. ............................................................................................... 43 ARTICLE 8 INVOICING AND PAYMENT; CREDIT ............................................................. 44
8.1 Invoicing. ............................................................................................................. 44
8.2 Payment. ............................................................................................................... 44
8.3 Books and Records. ............................................................................................. 44
8.4 Payment Adjustments; Billing Errors. ................................................................. 45
8.5 Billing Disputes. .................................................................................................. 45
8.6 Netting of Payments. ............................................................................................ 45
8.7 Seller’s Development Security. ........................................................................... 45
8.8 Seller’s Performance Security. ............................................................................. 46
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral ................ 46
8.10 Seller’s Financial Statements. .............................................................................. 47 ARTICLE 9 NOTICES ................................................................................................................ 47
9.1 Addresses for the Delivery of Notices ................................................................. 47
9.2 Acceptable Means of Delivering Notice .............................................................. 47 ARTICLE 10 FORCE MAJEURE .............................................................................................. 47
10.1 Definition ............................................................................................................. 47
10.2 No Liability If a Force Majeure Event Occurs .................................................... 48
10.3 Notice ................................................................................................................... 48
10.4 Termination Following Force Majeure Event ...................................................... 49 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ...................................................... 49
11.1 Events of Default ................................................................................................. 49
11.2 Remedies; Declaration of Early Termination Date. ............................................. 53
11.3 Termination Payment ........................................................................................... 53
11.4 Notice of Payment of Termination Payment ....................................................... 54
11.5 Disputes with Respect to Termination Payment .................................................. 54
11.6 Rights and Remedies Are Cumulative ................................................................. 54 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES .......... 54
12.1 No Consequential Damages. ................................................................................ 54
12.2 Waiver and Exclusion of Other Damages. ........................................................... 55 AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC iii
ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY ........................... 56
13.1 Seller’s Representations and Warranties. ............................................................ 56
13.2 Buyer’s Representations and Warranties ............................................................. 56
13.3 General Covenants ............................................................................................... 57
13.4 Prevailing Wage ................................................................................................... 58
13.5 Diversity Reporting. ............................................................................................. 58 ARTICLE 14 ASSIGNMENT ..................................................................................................... 58
14.1 General Prohibition on Assignments ................................................................... 58
14.2 Collateral Assignment .......................................................................................... 58
14.3 Permitted Assignment by Seller ........................................................................... 61
14.4 Buyer Limited Assignment. ................................................................................. 61 ARTICLE 15 DISPUTE RESOLUTION .................................................................................... 62
15.1 Governing Law. ................................................................................................... 62
15.2 Dispute Resolution. .............................................................................................. 62 ARTICLE 16 INDEMNIFICATION ........................................................................................... 63
16.1 Indemnification. ................................................................................................... 63
16.2 Claim Notice. ....................................................................................................... 63
16.3 Defense of Claims. ............................................................................................... 63
16.4 Rights and Remedies are Cumulative. ................................................................. 64 ARTICLE 17 INSURANCE ........................................................................................................ 64
17.1 Insurance .............................................................................................................. 64 ARTICLE 18 CONFIDENTIAL INFORMATION .................................................................... 65
18.1 Definition of Confidential Information ................................................................ 65
18.2 Duty to Maintain Confidentiality ......................................................................... 66
18.3 Irreparable Injury; Remedies ............................................................................... 66
18.4 Disclosure to Lenders, Etc. .................................................................................. 66
18.5 Press Releases ...................................................................................................... 66 ARTICLE 19 MISCELLANEOUS ............................................................................................. 67
19.1 Entire Agreement; Integration; Exhibits .............................................................. 67
19.2 Amendments ........................................................................................................ 67
19.3 No Waiver ............................................................................................................ 67
19.4 No Agency, Partnership, Joint Venture or Lease ................................................. 67
19.5 Severability .......................................................................................................... 67
19.6 Mobile-Sierra ....................................................................................................... 67
19.7 Counterparts ......................................................................................................... 68
19.8 Electronic Delivery .............................................................................................. 68
19.9 Binding Effect ...................................................................................................... 68
19.10 No Recourse to Members of Buyer ..................................................................... 68
19.11 Forward Contract ................................................................................................. 68 AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC iv
19.12 Further Assurances............................................................................................... 68 Exhibits:
Exhibit A Facility Description
Exhibit B Facility Construction and Commercial Operation Exhibit C Compensation
Exhibit D Scheduling Coordinator Responsibilities
Exhibit E Progress Reporting Form
Exhibit F-1 Form of Average Expected Energy Report
Exhibit F-2 Form of Monthly Delivery Forecast
Exhibit G Guaranteed Energy Production Damages Calculation Exhibit H Form of Commercial Operation Date Certificate Exhibit I-1 Form of Installed PV Capacity Certificate
Exhibit I-2 Form of Installed Battery Capacity Certificate Exhibit J Form of Construction Start Date Certificate
Exhibit K Form of Letter of Credit
Exhibit L Form of Guaranty
Exhibit M Form of Replacement RA Notice
Exhibit N Notices
Exhibit O Storage Capacity Tests
Exhibit P Storage Availability
Exhibit Q Operating Restrictions
Exhibit R Community Benefit
Exhibit S Diversity Reporting
Exhibit T Metering
Exhibit U Pollinator Scorecard
Exhibit V Limited Assignment Agreement
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC
AMENDED AND RESTATED RENEWABLE POWER PURCHASE AGREEMENT This Amended and Restated Renewable Power Purchase Agreement (“Agreement”) is entered into as of [__], 2023 (the “Effective Date”), between Buyer and Seller. Buyer and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties.” All capitalized terms used in this Agreement are used with the meanings ascribed to them in Article 1 to this Agreement.
RECITALS
WHEREAS, Seller intends to develop, design, permit, construct, own, control and operate the Facility;
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product;
WHEREAS, the Parties entered into that certain Renewable Power Purchase Agreement, dated as of February 4, 2022 (the “Original Effective Date”), as amended pursuant to that certain First Amendment to Renewable Power Purchase Agreement, dated as of July 21, 2022 (collectively, the “Original Agreement”); and
WHEREAS, the Parties desire to amend and restate the Original Agreement in its entirety.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties hereby agree to amend and restate the Original Agreement as follows:
ARTICLE 1
DEFINITIONS
1.1 Contract Definitions. The following terms, when used herein with initial capitalization, shall have the meanings set forth below:
“AC” means alternating current.
“Accepted Compliance Costs” has the meaning set forth in Section 3.11(d). “Adjusted Energy Production” has the meaning set forth in Exhibit G. “Affiliate” means, with respect to any Person, each Person that directly or indirectly controls, is controlled by, or is under common control with such designated Person. For purposes of this definition and the definition of “Permitted Transferee”, “control”, “controlled by”, and “under common control with”, as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 2 policies or operations of such Person. For purposes of this Agreement, Clearway Energy, Inc. shall be deemed to be an Affiliate of Seller.
“Agreement” has the meaning set forth in the Preamble and includes any Exhibits, schedules and any written supplements hereto, the Cover Sheet, and any designated collateral, credit support or similar arrangement between the Parties. “Ancillary Services” means all ancillary services, products and other attributes, if any, associated with the Facility.
“Approved Forecast Vendor” means (x) CAISO or (y) any other vendor reasonably acceptable to both Buyer and Seller for the purposes of providing or verifying the forecasts under Sections 4.3(c) and 4.3(d).
“Automated Dispatch System” or “ADS” has the meaning set forth in the CAISO Tariff. “Availability Adjustment” or “AA” has the meaning set forth in Exhibit P. “Available Generating Capacity” means the capacity of the Generating Facility, expressed in whole MWs, that is mechanically available to generate Energy. “Average Expected Energy Report” means the annual report delivered by Seller pursuant to Section 4.3(a).
“Bankrupt” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due.
“Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday in California. A Business Day begins at 8:00 a.m. and ends at 5:00 p.m. Pacific Prevailing Time for the Party sending a Notice, or payment, or performing a specified action. “Buyer” means Marin Clean Energy, a California joint powers authority. “Buyer Bid Curtailment” means any curtailment of the Facility arising out of or resulting from the manner in which Buyer bids, offers or schedules the Facility, the Energy or any Products, or in which Buyer fails to do so, including a situation where all of the following occurs:
(a) the CAISO provides notice, including through ADS, to a Party or the Scheduling Coordinator for the Facility, requiring the Party to deliver less Facility Energy from the Facility than the full amount of energy forecasted to be produced from the Facility for a period of time; and
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 3 (b) for the same time period as referenced in (a), the notice referenced in (a) results from the manner in which Buyer or the SC schedules or bids the Facility, Facility Energy or Ancillary Services, including where the Buyer or the SC for the Facility:
(i) did not submit a Self-Schedule or an Energy Supply Bid for the MW subject to the reduction; or
(ii) submitted an Energy Supply Bid and the CAISO notice referenced in (a) is solely a result of CAISO implementing the Energy Supply Bid; or (iii) submitted a Self-Schedule for less than the full amount of Facility Energy forecasted to be generated or discharged by or delivered from the Facility.
If the Facility is subject to a Planned Outage, Forced Facility Outage, Force Majeure Event or a Curtailment Period during the same time period as referenced in (a), then the calculation of Deemed Delivered Energy during such period shall not include any Facility Energy that was not generated or stored due to such Planned Outage, Forced Facility Outage, Force Majeure Event or Curtailment Period.
“Buyer Curtailment Order” means (i) the instruction from Buyer to Seller to reduce Facility Energy from the Facility by the amount, and for the period of time set forth in such instruction, for reasons unrelated to a Planned Outage, Forced Facility Outage, Force Majeure Event or Curtailment Order, (ii) a reduction of Facility Energy directed by CAISO during Settlement Intervals with a Negative LMP, (iii) a reduction of Facility Energy due to Buyer’s participation in the Ancillary Services market, or (iv) a reduction in Directly Delivered Generating Facility Energy due to Buyer’s issuance of Charging Notices or Discharging Notices in violation of the Operating Procedures.
“Buyer Curtailment Period” means the period of time, as measured using current Settlement Intervals, during which Seller reduces Facility Energy from the Facility pursuant to or as a result of (a) Buyer Bid Curtailment, (b) a Buyer Curtailment Order, or (c) Buyer’s Default; provided, that the duration of any Buyer Curtailment Period shall be inclusive of the time required for the Facility to ramp down and ramp up.
“Buyer’s Default” means a failure by Buyer (or its agents) to perform Buyer’s obligations hereunder, and includes an Event of Default of Buyer.
“Buyer’s WREGIS Account” has the meaning set forth in Section 4.10(a). “CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“CAISO Approved Meter” means a CAISO approved revenue quality meter or meters, CAISO approved data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, all Facility Energy delivered to the Delivery Point.
“CAISO Charges Invoice” has the meaning set forth in Exhibit D.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 4 “CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Operating Order” means “Operating Instruction” as defined in the CAISO Tariff.
“CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC.
“CAISO VER Forecast” means the forecast of output provided by CAISO pursuant to Section 4.8.2.1.2 and Appendix Q of the CAISO Tariff, as such provisions may be modified or amended from time to time.
“California Renewables Portfolio Standard” or “RPS” means the renewable energy program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. “Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of power that the Storage Facility can generate and deliver to the Delivery Point at a particular moment and that can be purchased and sold under CAISO market rules, or used for compliance purposes, including Resource Adequacy Benefits.
“Capacity Damages” has the meaning set forth in Exhibit B. “CEC” means the California Energy Commission, or any successor agency performing similar statutory functions.
“CEC Certification and Verification” means that the CEC has certified (or, with respect to periods before the date that is one hundred eighty (180) days following the Commercial Operation Date, that the CEC has pre-certified) that the Generating Facility is an Eligible Renewable Energy Resource for purposes of the California Renewables Portfolio Standard and that all Facility Energy delivered to the Delivery Point qualifies as generation from an Eligible Renewable Energy Resource.
“CEC Precertification” means that the CEC has issued a precertification for the Generating Facility indicating that the planned operations of the Generating Facility would comply with applicable CEC requirements for CEC Certification and Verification. “CEQA” means the California Environmental Quality Act.
“Change of Control” means any circumstance in which Ultimate Parent ceases to own, directly or indirectly through one or more intermediate entities, more than fifty percent (50%) of the outstanding equity interests in Seller or otherwise ceases to retain the ability to control the AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 5 decision making of Seller; provided that in calculating ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more intermediate entities shall not be counted towards Ultimate Parent’s ownership interest in Seller unless Ultimate Parent directly or indirectly owns more than fifty percent (50%) of the outstanding equity interests in each such intermediate entity; and (b) ownership interests in Seller owned directly or indirectly by any Lender (including any tax equity provider) shall be excluded from the total outstanding equity interests in Seller. “Charging Energy” means the as-available Generating Facility Energy or Energy from the CAISO Grid, less Electrical Losses, if any, delivered to the Storage Facility pursuant to a Charging Notice or in connection with a Storage Capacity Test. All Charging Energy shall be used solely to charge the Storage Facility.
“Charging Notice” means the operating instruction, and any subsequent updates, given by Buyer to Seller, directing the Storage Facility to charge at a specific MW rate to a specified Stored Energy Level, including in connection with a Storage Capacity Test, provided that any such operating instruction shall be in accordance with the Operating Procedures. For the avoidance of doubt, any Charging Notice shall not constitute a Buyer Bid Curtailment, Buyer Curtailment Order or Curtailment Order.
“Claim” has the meaning set forth in Section 16.2(a).
“COD Certificate” has the meaning set forth in Exhibit B. “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute, including the rules or regulations promulgated thereunder, in each case as in effect from time to time. References to sections of the Code shall be construed to also refer to any successor sections.
“Collateral Assignment Agreement” has the meaning set forth in Section 14.2. “Commercial Operation” has the meaning set forth in Exhibit B. “Commercial Operation Date” has the meaning set forth in Exhibit B. “Commercial Operation Delay Damages” means an amount equal to “Compliance Actions” has the meaning set forth in Section 3.11(b). “Compliance Expenditure Cap” has the meaning set forth in Section 3.11(b). “Confidential Information” has the meaning set forth in Section 18.1.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 6 “Construction Delay Damages” means an amount equal to
“Construction Start” has the meaning set forth in Exhibit B. “Construction Start Date” has the meaning set forth in Exhibit B. “Contract Capacity” means the sum of the Guaranteed Capacity and the Storage Contract Capacity.
“Contract Price” has the meaning set forth on the Cover Sheet and is each of the Renewable Rate and the Storage Rate.
“Contract Term” has the meaning set forth in Section 2.1(a). “Contract Year” means a period of twelve (12) consecutive months. The first Contract Year shall commence on the Commercial Operation Date and each subsequent Contract Year shall commence on the anniversary of the Commercial Operation Date. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third-party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace the Agreement; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating the Agreement. “Cover Sheet” means the cover sheet to this Agreement, which is incorporated into this Agreement.
“COVID-19” means the epidemic disease designated COVID-19 and the related virus designated SARS-CoV-2 and any mutations thereof, and the efforts of a Governmental Authority to combat or mitigate such disease.
“CPUC” means the California Public Utilities Commission or any successor agency performing similar statutory functions.
“CPUC System RA Penalty” means the penalties for “System Procurement Deficiency” adopted by the CPUC in its Decision 10-06-036, as may be updated or supplemented from time to time.
“Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third-party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P or Moody’s. If ratings by S&P and Moody’s are not equivalent, the lower rating shall apply.
“Curtailment Cap” is the yearly quantity per Contract Year, in MWh, equal to AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 7 “Curtailment Order” means any of the following:
(a) a curtailment ordered by CAISO, including through the ADS or a CAISO Operating Order, for the following reasons: (i) any System Emergency, or (ii) any warning of an anticipated System Emergency, or warning of an imminent condition or situation, which jeopardizes CAISO’s electric system integrity or the integrity of other systems to which CAISO is connected; (b) a curtailment ordered by the Participating Transmission Owner for reasons including, but not limited to, (i) any situation that affects normal function of the electric system including, but not limited to, any abnormal condition that requires action to prevent circumstances such as equipment damage, loss of load, or abnormal voltage conditions, or (ii) any warning, forecast or anticipation of conditions or situations that jeopardize the Participating Transmission Owner’s electric system integrity or the integrity of other systems to which the Participating Transmission Owner is connected;
(c) a curtailment ordered by CAISO or the Participating Transmission Owner due to scheduled or unscheduled maintenance on the Participating Transmission Owner’s transmission facilities that prevents (i) Buyer from receiving or (ii) Seller from delivering Facility Energy to the Delivery Point; or
(d) a curtailment in accordance with Seller’s obligations, or due to physical or operational limitations on the transfer of electric power, under its Interconnection Agreement with the Participating Transmission Owner or distribution operator. “Curtailment Period” means the period of time, as measured using current Settlement Intervals, during which generation from the Facility is reduced pursuant to a Curtailment Order; provided that the Curtailment Period shall be inclusive of the time required for the Facility to ramp down and ramp up.
“Damage Payment” means the dollar amount that equals the amount of the Development Security.
“Day-Ahead Forecast” has the meaning set forth in Section 4.3(c). “Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Day-Ahead Schedule” has the meaning set forth in the CAISO Tariff. “Dedicated Interconnection Capacity” has the meaning set forth in Section 4.12. “Deemed Delivered Energy” means the amount of Energy that the Generating Facility would have produced and delivered to the Storage Facility or the Delivery Point, but that is not produced by the Generating Facility during a Buyer Curtailment Period or Buyer’s unexcused failure to take delivery of the Product, which amount shall be calculated using an industry-standard methodology agreed to by Buyer and Seller that utilizes meteorological conditions on Site as input for the period of time during such curtailments or unexcused failure to take delivery of the Product. “Defaulting Party” has the meaning set forth in Section 11.1(a).
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 8 “Deficient Month” has the meaning set forth in Section 4.10(e). “Deliverability Status”
“Delivery Point” has the meaning set forth in Exhibit A. “Delivery Term” shall mean the period of Contract Years set forth on the Cover Sheet beginning on the Commercial Operation Date, unless terminated earlier in accordance with the terms and conditions of this Agreement.
“Development Cure Period” has the meaning set forth in Exhibit B. “Development Security” means (i) cash or (ii) a Letter of Credit in the amount set forth on the Cover Sheet.
“Directly Delivered Generating Facility Energy” means that portion of Generating Facility Energy that is delivered directly to the Delivery Point and is not Charging Energy or Discharging Energy.
“Discharging Energy” means all Energy delivered to the Delivery Point from the Storage Facility, as measured at the Storage Facility Metering Points by the Storage Facility Meter. For the avoidance of doubt, all Discharging Energy will have originally been delivered to the Storage Facility as Charging Energy.
“Discharging Notice” means the operating instruction, and any subsequent updates, given by Buyer to Seller, directing the Storage Facility to discharge Discharging Energy at a specific MW rate to a specified Stored Energy Level, provided that any such operating instruction or updates shall be in accordance with the Operating Procedures. For the avoidance of doubt, any Discharging Notice shall not constitute a Buyer Bid Curtailment, Buyer Curtailment Order or Curtailment Order.
“Disclosing Party” has the meaning set forth in Section 18.2. “Early Termination Date” has the meaning set forth in Section 11.2(a). “Effective Date” has the meaning set forth on the Preamble. “Efficiency Rate” means the measured round-trip efficiency rate of the Storage Facility, expressed as a percentage, calculated pursuant to a Storage Capacity Test in accordance with Exhibit O by dividing Energy Out by Energy In.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 9 “Electrical Losses” means all transmission or transformation losses between the Facility and the Delivery Point, including losses associated with (i) delivery of Directly Delivered Generating Facility Energy to the Delivery Point, (ii) delivery of Charging Energy to the Storage Facility, (iii) conversion of Charging Energy into Discharging Energy, and (iv) delivery of Discharging Energy to the Delivery Point.
“Eligible Renewable Energy Resource” has the meaning set forth in California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25741(a), as either code provision is amended or supplemented from time to time. “Energy” means electrical energy measured in MWh.
“Energy In” has the meaning set forth in Exhibit O.
“Energy Out” has the meaning set forth Exhibit O.
“Energy Supply Bid” has the meaning set forth in the CAISO Tariff. “Event of Default” has the meaning set forth in Section 11.1. “Excess MWh” has the meaning set forth in Exhibit C.
“Expected Commercial Operation Date” is the date set forth on the Cover Sheet by which Seller reasonably expects to achieve Commercial Operation. “Expected Construction Start Date” is the date set forth on the Cover Sheet by which Seller reasonably expects to achieve Construction Start. “Expected Energy” means the quantity of Energy that Seller expects to be able to deliver to Buyer as Directly Delivered Generating Facility Energy or to the Storage Facility as Charging Energy from the Generating Facility during each Contract Year in the quantity specified on the Cover Sheet.
“Facility” means the Generating Facility and the Storage Facility. “Facility Energy” means the sum of Directly Delivered Generating Facility Energy and Discharging Energy during any Settlement Interval or Settlement Period, net of Electrical Losses and Station Use, as measured by the Facility Meters.
“Facility Meters” means the Generating Facility Meter and Storage Facility Meter, which are CAISO Approved Meters and will measure all Facility Energy. Without limiting Seller’s obligation to deliver Facility Energy to the Delivery Point, each Facility Meter will be located, and Facility Energy will be measured, at the low voltage side of the main step up transformer and will be subject to adjustment in accordance with CAISO meter requirements and Prudent Operating Practices to account for Electrical Losses and Station Use, as it impacts delivered Energy. “FERC” means the Federal Energy Regulatory Commission.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 10 “Flexible Capacity” has the meaning set forth in the CAISO Tariff. “Flexible Resource Adequacy Benefits” means the attributes, however defined, of a resource that can be used to satisfy the flexible resource adequacy obligations of a load serving entity, including Flexible Capacity.
“Force Majeure Event” has the meaning set forth in Section 10.1(a). “Forced Facility Outage” means an unexpected failure of one or more components of the Facility or any outage on the Transmission System that prevents Seller from generating Energy or making Facility Energy available at the Delivery Point and that is not the result of a Force Majeure Event.
“Forecasting Penalty” means for each hour as to which Seller is required to provide a notification to Buyer as required in Section 4.3(e) and does not provide such notification and Buyer incurs a loss or penalty resulting from its scheduling activities in such hour with respect to Generating Facility Energy due to such failure of Seller to provide such notification, the product of (A) the absolute difference (if any) between (i) the expected Generating Facility Energy for such hour (which, for the avoidance of doubt, assumes no Charging Energy or Discharging Energy in such hour) set forth in the Monthly Delivery Forecast, and (ii) the actual Generating Facility Energy produced by the Generating Facility (absent any Charging Energy and Discharging Energy), multiplied by (B) the Real-Time Price (if greater than Zero Dollars ($0)) in such hour. “Form of Average Expected Energy Report” has the meaning set forth in Section 4.3(a). “Form of Monthly Delivery Forecast” has the meaning set forth in Section 4.3(b). “Future Environmental Attributes” shall mean any and all generation attributes other than Green Attributes or Renewable Energy Incentives under the RPS regulations or under any and all other international, federal, regional, state or other law, rule, regulation, bylaw, treaty or other intergovernmental compact, decision, administrative decision, program (including any voluntary compliance or membership program), competitive market or business method (including all credits, certificates, benefits, and emission measurements, reductions, offsets and allowances related thereto) that are attributable, now, or in the future, to the generation of electrical energy by the Facility. Future Environmental Attributes do not include investment tax credits or production tax credits associated with the construction or operation of the Facility, or other financial incentives in the form of credits, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation.
“Gains” means, with respect to the Non-Defaulting Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner, which economic benefit (if any) shall be deemed the gain (if any) to such Non-Defaulting Party represented by, (a) if Buyer is the Non-Defaulting Party, the positive difference between the present value of the payments required to be made during the remaining Contract Term of this Agreement and the present value of the payments that would be required to be made under any transaction(s) replacing this Agreement and (b) if Seller is the Non-Defaulting Party, the positive difference between the present value of the payments that would be required to be made under any AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 11 transaction(s) replacing this Agreement and the present value of the payments required to be made during the remaining Contract Term of this Agreement. Factors used in determining the economic benefit to a Party may include reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., NP-15), all of which should be calculated for the remaining Contract Term, and include the value of Green Attributes and Capacity Attributes. “Generating Facility” means the separately metered 100 MW portion of the solar photovoltaic generating facility described on the Cover Sheet and in Exhibit A, located at the Site and including mechanical equipment and associated facilities and equipment required to deliver (i) Generating Facility Energy to the Delivery Point, (ii) Charging Energy to the Storage Facility and (iii) Discharging Energy to the Delivery Point; provided, that the “Generating Facility” does not include the Storage Facility or the Shared Facilities. “Generating Facility Energy” means all Energy produced by the Generating Facility, as measured by the Generating Facility Meter after adjustment to exclude (a) all Electrical Losses, and (b) all Energy that serves Station Use or is stored in the Storage Facility to serve Station Use. “Generating Facility Meter” means the bi-directional revenue quality meter or meters (with a 0.3 accuracy class), along with a compatible data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Generating Facility Energy generated by the Generating Facility for the purpose of invoicing in accordance with Section 8.1. For clarity, the Facility will contain multiple measurement devices that will make up the Generating Facility Meter, and, unless otherwise indicated, references to the Generating Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together. “Governmental Authority” means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO; provided, however, that “Governmental Authority” shall not in any event include any Party. “Green Attributes” means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the generation from the Generating Facility and its displacement of conventional energy generation. Green Attributes include but are not limited to Renewable Energy Credits, as well as: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; (3) the reporting rights to these avoided emissions, such as Green Tag Reporting Rights. Green Tags are accumulated on a MWh basis and one Green Tag represents AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 12 the Green Attributes associated with one (1) MWh of Facility Energy. Green Attributes do not include (i) any energy, capacity, reliability or other power attributes from the Facility, (ii) production tax credits associated with the construction or operation of the Facility and other financial incentives in the form of credits, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular preexisting pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered or used by the Facility for compliance with local, state, or federal operating or air quality permits. “Green Tag Reporting Rights” means the right of a purchaser of renewable energy to report ownership of accumulated “green tags” in compliance with and to the extent permitted by applicable Law and include, without limitation, rights under Section 1605(b) of the Energy Policy Act of 1992, and any present or future federal, state or local certification program or emissions trading program, including pursuant to the WREGIS Operating Rules. “Guaranteed Capacity” means the amount of generating capacity of the Generating Facility, as measured in MW at the Delivery Point, set forth on the Cover Sheet, as may be adjusted pursuant to Exhibit B, Section 5.
“Guaranteed Commercial Operation Date” means the Expected Commercial Operation Date, as such date may be extended by the Development Cure Period. “Guaranteed Construction Start Date” means the Expected Construction Start Date, as such date may be extended by the Development Cure Period. “Guaranteed Efficiency Rate” means the guaranteed Efficiency Rate of the Storage Facility throughout the Delivery Term, as set forth on the Cover Sheet. “Guaranteed Energy Production” means an amount of Energy, as measured in MWh, equal to of the total Expected Energy (as set forth on the Cover Sheet) for the applicable Performance Measurement Period.
“Guaranteed RA Amount” means
“Guaranteed Storage Availability” has the meaning set forth in Section 4.8(a). “Guarantor” means, with respect to Seller, any Person that (a) Buyer does not already have any material credit exposure to under any other agreements, guarantees, or other arrangements at the time its Guaranty is issued, (b) is an Affiliate of Seller, or other third party reasonably acceptable to Buyer, (c) has a Credit Rating of BBB- or better from S&P or a Credit Rating of Baa3 or better from Moody’s or has a tangible net worth of at least (d) is incorporated or organized in a jurisdiction of the United States and is in good standing in such jurisdiction, and (e) executes and delivers a Guaranty for the benefit of Buyer.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 13 “Guaranty” means a guaranty from a Guarantor provided for the benefit of Buyer substantially in the form attached as Exhibit L or in such other form as is reasonably agreed to by the Parties.
“Imbalance Energy” means the amount of Energy, in any given Settlement Period or Settlement Interval, by which the amount of Facility Energy deviates from the amount of Scheduled Energy.
“Indemnifiable Loss(es)” has the meaning set forth in Section 16.1. “Indemnified Party” has the meaning set forth in Section 16.1. “Indemnifying Party” has the meaning set forth in Section 16.1. “Initial Synchronization” means the initial delivery of Facility Energy to the Delivery Point.
“Installed Battery Capacity” means the maximum dependable operating capability of the Storage Facility to discharge electric energy, as measured in MW at the Storage Facility Meter, that achieves Commercial Operation, adjusted for ambient conditions on the date of the performance test, and as evidenced by a certificate substantially in the form attached as Exhibit I-2 hereto. “Installed PV Capacity” means the actual generating capacity of the Generating Facility, as measured in MW at the Delivery Point, that achieves Commercial Operation, adjusted for ambient conditions on the date of the performance test, and as evidenced by a certificate substantially in the form attached as Exhibit I-1 hereto. “Interconnection Agreement” means the interconnection agreement entered into by Seller or an Affiliate pursuant to which the Facility will (a) be interconnected with the Transmission System and (b) will have capacity rights equal or greater than the amount of the Guaranteed Capacity, and pursuant to which Seller’s Interconnection Facilities and any other Interconnection Facilities will be constructed, operated and maintained during the Contract Term. “Interconnection Facilities” means the interconnection facilities, control and protective devices and metering facilities required to connect the Facility with the Transmission System in accordance with the Interconnection Agreement.
“Interest Rate” has the meaning set forth in Section 8.2. “Inter-SC Trade” or “IST” has the meaning set forth in the CAISO Tariff. “ITC” means the investment tax credit established pursuant to Section 48 of the Code. “Joint Powers Act” means the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.).
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 14 “Joint Powers Agreement” means that certain Joint Powers Agreement dated December 19, 2008, as amended from time to time, under which Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act. “Law” means any applicable law, statute, rule, regulation, decision, writ, order, decree or judgment, permit or any interpretation thereof, promulgated or issued by a Governmental Authority.
“Lender” means, collectively, any Person (i) providing senior or subordinated construction, interim, back leverage or long-term debt, equity or tax equity financing or refinancing for or in connection with the development, construction, purchase, installation or operation of the Facility, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including tax equity), public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or refinancing for the Facility or purchasing equity ownership interests of Seller or its Affiliates, and any trustee or agent or similar representative acting on their behalf, (ii) providing interest rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations, (iii) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Facility, or (iv) acting as issuing bank for any Letter(s) of Credit issued pursuant hereto or letters of credit in connection with the Facility. “Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank or a foreign bank with a U.S. branch with such bank having a Credit Rating of at least A- with an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s, in a form substantially similar to the letter of credit set forth in Exhibit K.
“Licensed Professional Engineer” means an independent, professional engineer (a) reasonably acceptable to Buyer, (b) who has been retained by, or for the benefit of, the Lenders, or (c) who (i) is licensed to practice engineering in the State of California, (ii) has training and experience in the power industry specific to the technology of the Facility, (iii) is licensed in an appropriate engineering discipline for the required certification being made, and (iv) unless otherwise approved by Buyer, is not a representative of a consultant, engineer, contractor, designer or other individual involved in the development of the Facility or of a manufacturer or supplier of any equipment installed at the Facility.
“Limited Assignee” has the meaning set forth in Section 14.4. “Local Capacity Area Resources” has the meaning set forth in the CAISO Tariff. “Local Capacity Area Resource Adequacy Benefits” means the attributes, however defined, of a Local Capacity Area Resource that can be used to satisfy the local resource adequacy obligations of a load serving entity, expressed in kW.
“Locational Marginal Price” or “LMP” has the meaning set forth in the CAISO Tariff.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 15 “Losses” means, with respect to any Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner. Factors used in determining economic loss to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term and must include the value of Green Attributes, Capacity Attributes, and Renewable Energy Incentives.
“Lost Output” has the meaning set forth in Section 4.7. “Milestones” means the development activities for significant permitting, interconnection, financing and construction milestones set forth on the Cover Sheet. “Minimum Efficiency Rate” means the percentage specified on the Cover Sheet. “Monthly Delivery Forecast” means the monthly forecast delivered by Seller pursuant to Section 4.3(b).
“Monthly Storage Availability” has the meaning set forth in Exhibit P. “Moody’s” means Moody’s Investors Service, Inc.
“MW” means megawatts in alternating current, unless expressly stated in terms of direct current.
“MWh” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“Negative LMP” means, in any Settlement Period or Settlement Interval, the LMP in the Real-Time Market at the Facility’s PNode is less than Zero Dollars ($0). “NERC” means the North American Electric Reliability Corporation or any successor entity performing similar functions.
“Net Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “Network Upgrades” has the meaning set forth in the CAISO Tariff. “Non-Defaulting Party” has the meaning set forth in Section 11.2. “Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or electronic messaging (email).
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 16 “Notice of Claim” has the meaning set forth in Section 16.2(a). “NP-15” means the Existing Zone Generation Trading Hub for Existing Zone region NP15 as set forth in the CAISO Tariff.
“On-Peak Hour” means any hour from hour-ending 0700 to hour-ending 2200 (i.e., 6:00 AM to 9:59 PM) on Monday through Saturday, Pacific Prevailing Time, excluding North American Electric Reliability Council (NERC) holidays.
“Operating Procedures” or “Operating Restrictions” means those rules, requirements, and procedures set forth on Exhibit Q.
“Original Agreement” has the meaning set forth in the Recitals. “Original Effective Date” has the meaning set forth in the Recitals. “Pacific Prevailing Time” means the prevailing standard time or daylight savings time, as applicable, in the Pacific time zone.
“Participating Transmission Owner” or “PTO” means an entity that owns, operates and maintains transmission or distribution lines and associated facilities or has entitlements to use certain transmission or distribution lines and associated facilities where the Facility is interconnected. For purposes of this Agreement, the Participating Transmission Owner is set forth in Exhibit A.
“Party” or “Parties” has the meaning set forth in the Preamble. “Performance Measurement Period” means each two (2) consecutive Contract Year period during the Delivery Term.
“Performance Security” means (i) cash, (ii) a Letter of Credit, or (iii) a Guaranty, in the amount set forth on the Cover Sheet.
“Permitted Transferee” means (i) any Affiliate of Seller or (ii) any entity that satisfies, or is controlled by another Person that satisfies, the following requirements:
(a) A tangible net worth of
or a Credit Rating of at least BBB- from S&P or Baa3 from Moody’s; and (b) At least of experience in the ownership and operations of power generation facilities similar to the Facility, or has retained a third-party with such experience to operate the Facility.
“Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 17 “Planned Outage” has the meaning set forth in Section 4.6(a). “PNode” has the meaning set forth in the CAISO Tariff.
“Portfolio Content Category” means PCC1, PCC2 or PCC3, as applicable. “Portfolio Content Category 1” or “PCC1” means any Renewable Energy Credit associated with the generation of electricity from an Eligible Renewable Energy Resource consisting of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(1), as may be amended from time to time or as further defined or supplemented by Law.
“Portfolio Content Category 2” or “PCC2” means any Renewable Energy Credit associated with the generation of electricity from an Eligible Renewable Energy Resource consisting of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(2), as may be amended from time to time or as further defined or supplemented by Law.
“Portfolio Content Category 3” or “PCC3” means any Renewable Energy Credit associated with the generation of electricity from an Eligible Renewable Energy Resource consisting of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(3), as may be amended from time to time or as further defined or supplemented by Law.
“Product” has the meaning set forth on the Cover Sheet. “Progress Report” means a progress report including the items set forth in Exhibit E. “Prudent Operating Practice” means (a) the applicable practices, methods and acts required by or consistent with applicable Laws and reliability criteria, and otherwise engaged in or approved by a significant portion of the electric utility industry during the relevant time period with respect to grid-interconnected, utility-scale generating facilities with integrated storage in the Western United States, or (b) any of the practices, methods and acts which, in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Prudent Operating Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to acceptable practices, methods or acts generally accepted in the industry with respect to grid-interconnected, utility-scale generating facilities with integrated storage in the Western United States. Prudent Operating Practice includes compliance with applicable Laws, applicable reliability criteria, and the criteria, rules and standards promulgated in the National Electric Safety Code and the National Electrical Code, as they may be amended or superseded from time to time, including the criteria, rules and standards of any successor organizations.
“PTC” means the production tax credit established pursuant to Section 45 of the Code.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 18 “Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “RA Deficiency Amount” means the liquidated damages payment that Seller shall pay to Buyer for an applicable RA Shortfall Month as calculated in accordance with Section 3.8(b). “RA Deficiency Amount Cap” means the cap, expressed in $/kW-month, on the payment of RA Deficiency Amount liquidated damages applicable in a given month, as specified on the Cover Sheet.
“RA Guarantee Date” means the Commercial Operation Date. “RA Shortfall Amount” means the difference, expressed in kW, of (i) the Guaranteed RA Amount for a given month minus (ii) the System Resource Adequacy Benefits of the Storage Facility for such month able to be shown on Buyer’s monthly or annual Supply Plan to the CAISO and CPUC and counted as System Resource Adequacy Benefits. “RA Shortfall Month” means the applicable calendar month following the RA Guarantee Date during which Seller fails to provide System Resource Adequacy Benefits in an amount equal to or greater than the Guaranteed RA Amount as required hereunder for purposes of calculating an RA Deficiency Amount under Section 3.8(b).
“Real-Time Forecast” means any Notice of any change to the Available Generating Capacity, Storage Capacity, or hourly expected Generating Facility Energy delivered by or on behalf of Seller pursuant to Section 4.3(d).
“Real-Time Market” has the meaning set forth in the CAISO Tariff. “Real-Time Price” means the Resource-Specific Settlement Interval LMP as defined in the CAISO Tariff. If there is more than one applicable Real-Time Price for the same period of time, Real-Time Price shall mean the price associated with the smallest time interval. “Receiving Party” has the meaning set forth in Section 18.2. “Recurring Certificate Transfers” has the meaning set forth in Section 4.10(a). “Remedial Action Plan” has the meaning set forth in Section 2.4. “Renewable Energy Credit” has the meaning set forth in California Public Utilities Code Section 399.12(h), as may be amended from time to time or as further defined or supplemented by Law.
“Renewable Energy Incentives” means: (a) all federal, state, or local Tax credits or other Tax benefits associated with the construction, ownership, or production of electricity from the Facility (including credits under Sections 38, 45, 46 and 48 of the Code); (b) any federal, state, or local grants, subsidies or other like benefits relating in any way to the Facility; and (c) any other form of incentive relating in any way to the Facility that is not a Green Attribute or a Future Environmental Attribute.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 19 “Renewable Rate” has the meaning set forth on the Cover Sheet. “Replacement Green Attributes” has the meaning set forth in Exhibit G. “Replacement RA” means Resource Adequacy Benefits equivalent to those that would have been provided by the Storage Facility with respect to the applicable RA Shortfall Month, including, if applicable for such month, Flexible Resource Adequacy Benefits associated with the Storage Facility.
“Resource Adequacy Benefits” means the rights and privileges attached to the Storage Facility that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in any Resource Adequacy Rulings (subject to the Operating Restrictions set forth in Exhibit Q), and shall include System Resource Adequacy Benefits, Flexible Resource Adequacy Benefits and Local Capacity Area Resource Adequacy Benefits associated with the Storage Facility. “Resource Adequacy Rulings” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024 and any other existing or subsequent ruling or decision, or any other resource adequacy Law, however described, as such decisions, rulings, Laws, rules or regulations may be amended or modified from time-to-time throughout the Delivery Term.
“Resource ID” has the meaning set forth in the CAISO Tariff.
“S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of The McGraw-Hill Companies, Inc.).
“Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” and “Scheduling” have a corollary meaning.
“Scheduled Energy” means the Facility Energy that clears under the applicable CAISO market based on the final Day-Ahead Schedule, FMM Schedule (as defined in the CAISO Tariff), or any other financially binding Schedule, market instruction or dispatch for the Facility for a given period of time implemented in accordance with the CAISO Tariff. “Scheduling Coordinator” or “SC” means an entity certified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff for the purposes of undertaking the functions specified in “Responsibilities of a Scheduling Coordinator” of the CAISO Tariff, as amended from time to time. The Buyer or an agent of Buyer will be the Scheduling Coordinator for the Facility as set forth in the Cover Sheet.
“Security Interest” has the meaning set forth in Section 8.9.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 20 “Self-Schedule” has the meaning set forth in the CAISO Tariff. “Seller” has the meaning set forth on the Cover Sheet.
“Seller’s WREGIS Account” has the meaning set forth in Section 4.10(a). “Settlement Amount” means the Non-Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Party. If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be Zero Dollars ($0). The Settlement Amount does not include consequential, incidental, punitive, exemplary or indirect or business interruption damages. “Settlement Interval” has the meaning set forth in the CAISO Tariff. “Settlement Period” has the meaning set forth in the CAISO Tariff. “Shared Facilities” means the gen-tie lines, transformers, substations, or other equipment, permits, contract rights, and other assets and property (real or personal), in each case, as necessary to enable delivery of energy from the Facility (which is excluded from Shared Facilities) to the point of interconnection, including the Interconnection Agreement itself, that are used in common with third parties.
“Shared Facilities Agreements” has the meaning set forth in Section 6.3. “Site” means the real property on which the Facility is or will be located, as further described in Exhibit A, and as shall be updated by Seller at the time Seller provides an executed Construction Start Date certificate in the form of Exhibit J to Buyer. “Site Control” means that, for the Contract Term, Seller (or, prior to the Delivery Term, its Affiliate): (a) owns or has the option to purchase the Site; (b) is the lessee or has the option to lease the Site; or (c) is the holder of an easement or an option for an easement, right-of-way grant, or similar instrument with respect to the Site.
“Station Use” means:
(a) The Energy produced or discharged by the Facility that is used within the Facility to power the lights, motors, control systems and other electrical loads that are necessary for operation of the Facility, including Energy associated with battery cooling and other thermal management equipment; and
(b) The Energy produced or discharged by the Facility that is consumed within the Facility’s electric energy distribution system as losses. “Storage Capacity” means (a) the maximum dependable operating capability of the Storage Facility to discharge electric energy that can be sustained for four (4) consecutive hours (in MW) and (b) any other products that may be developed or evolve from time to time during the Contract Term that the Storage Facility is able to provide as the Facility is configured on the AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 21 Commercial Operation Date and that relate to the maximum dependable operating capability of the Storage Facility to discharge electric energy.
“Storage Capacity Test” or “SCT” means any test or retest of the capacity of the Storage Facility and/or Efficiency Rate conducted in accordance with the testing procedures, requirements and protocols set forth in Section 4.9 and Exhibit O.
“Storage Contract Capacity” means the total capacity (in MW) of the Storage Facility initially equal to the amount set forth on the Cover Sheet, as may be adjusted pursuant to (i) Exhibit B, Section 5 or (ii) Section 4.9 and Exhibit O to reflect the results of the most recently performed Storage Capacity Test.
“Storage Contract Output” means the product of the Storage Contract Capacity multiplied by four (4) hours, represented in MWh, initially equal to the amount set forth on the Cover Sheet.
“Storage Facility” means the 92 MW/368 MWh energy storage facility described on the Cover Sheet and in Exhibit A (including the operational requirements of the energy storage facility), located at the Site and including mechanical equipment and associated facilities and equipment required to deliver Storage Product (but excluding any Shared Facilities), and as such storage facility may be expanded or otherwise modified from time to time in accordance with the terms of this Agreement.
“Storage Facility Meter” means the bi-directional revenue quality meter or meters (with a 0.3 accuracy class), along with a compatible data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Charging Energy delivered to the Storage Facility Metering Points and the amount of Discharging Energy discharged from the Storage Facility at the Storage Facility Metering Points to the Delivery Point for the purpose of invoicing in accordance with Section 8.1. For clarity, the Facility will contain multiple measurement devices that will make up the Storage Facility Meter, and, unless otherwise indicated, references to the Storage Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together.
“Storage Facility Metering Points” means the locations of the Storage Facility Meters at the Site.
“Storage Product” means (a) Discharging Energy, (b) Capacity Attributes, if any, (c) Storage Capacity, and (d) Ancillary Services (as defined in the CAISO Tariff), if any, in each case arising from or relating to the Storage Facility.
“Storage Rate” has the meaning set forth on the Cover Sheet. “Stored Energy Level” means, at a particular time, the amount of electric energy in the Storage Facility available to be discharged as Discharging Energy, expressed in MWh. “Supplementary Storage Capacity Test Protocol” has the meaning set forth in Exhibit O.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 22 “Supply Plan” has the meaning set forth in the CAISO Tariff. “System Emergency” means any condition that requires, as determined and declared by CAISO or the PTO, automatic or immediate action to (i) prevent or limit harm to or loss of life or property, (ii) prevent loss of transmission facilities or generation supply in the immediate vicinity of the Facility, or (iii) to preserve Transmission System reliability. “System Resource Adequacy Benefits” means the attributes, however defined, of a resource that can be used to satisfy the resource adequacy obligations of a load serving entity, other than Flexible Resource Adequacy Benefits and Local Capacity Area Resource Adequacy Benefits, expressed in kW.
“Tax” or “Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Tax Credits” means the PTC, ITC and any other state, local or federal production tax credit, depreciation benefit, tax deduction or investment tax credit specific to the production of renewable energy or investments in renewable energy facilities or storage facilities. “Terminated Transaction” has the meaning set forth in Section 11.2(a). “Termination Payment” has the meaning set forth in Section 11.3. “Test Energy” means Facility Energy delivered (a) commencing on the later of (i) the first date that the CAISO informs Seller in writing that Seller may deliver Facility Energy to the CAISO and (ii) the first date that the PTO informs Seller in writing that Seller has conditional or temporary permission to parallel and (b) ending upon the occurrence of the Commercial Operation Date. “Test Energy Rate” has the meaning set forth in Section 3.6. “Transmission Provider” means any entity or entities transmitting or transporting the Facility Energy on behalf of Seller or Buyer to or from the Delivery Point. “Transmission System” means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service downstream from the Delivery Point.
“Ultimate Parent” means
“Variable Energy Resource” or “VER” has the meaning set forth in the CAISO Tariff. “WREGIS” means the Western Renewable Energy Generation Information System or any successor renewable energy tracking program.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 23 “WREGIS Certificate Deficit” has the meaning set forth in Section 4.10(e). “WREGIS Certificates” has the same meaning as “Certificate” as defined by WREGIS in the WREGIS Operating Rules and are designated as eligible for complying with the California Renewables Portfolio Standard.
“WREGIS Operating Rules” means those operating rules and requirements adopted by WREGIS as of January 4, 2021, as subsequently amended, supplemented or replaced (in whole or in part) from time to time.
1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Article, Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless otherwise specified;
(e) a reference to a document or agreement, including this Agreement means such document, agreement or this Agreement including any amendment or supplement to, or replacement, novation or modification of this Agreement, but disregarding any amendment, supplement, replacement, novation or modification made in breach of such document, agreement or this Agreement;
(f) a reference to a Person includes that Person’s successors and permitted assigns;
(g) the term “including” means “including without limitation” and any list of examples following such term shall in no way restrict or limit the generality of the work or provision in respect of which such examples are provided; (h) references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires; (i) in the event of a conflict, a mathematical formula or other precise description of a concept or a term shall prevail over words providing a more general description of a concept or a term;
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 24 (j) references to any amount of money shall mean a reference to the amount in United States Dollars;
(k) words, phrases or expressions not otherwise defined herein that (i) have a generally accepted meaning in Prudent Operating Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Operating Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings; and
(l) each Party acknowledges that it was represented by counsel in connection with this Agreement and that it or its counsel reviewed this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
ARTICLE 2
TERM; CONDITIONS PRECEDENT
2.1 Contract Term.
(a) The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect until the conclusion of the Delivery Term, subject to any early termination provisions and any contract term extension provisions set forth herein (“Contract Term”); provided, however, that subject to Buyer’s obligations in Section 3.6, Buyer’s obligations to pay for or accept any Product are subject to Seller’s completion of the conditions precedent pursuant to Section 2.2.
(b) Applicable provisions of this Agreement shall continue in effect after termination, including early termination, to the extent necessary to enforce or complete the duties, obligations or responsibilities of the Parties arising prior to termination. The confidentiality obligations of the Parties under Article 18 and all indemnity and audit rights shall remain in full force and effect for three (3) years following the termination of this Agreement.
2.2 Conditions Precedent to Delivery Term. The Delivery Term shall not commence until Seller completes each of the following conditions:
(a) Seller has delivered to Buyer (i) a completion certificate from a Licensed Professional Engineer substantially in the form of Exhibit H, (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I-1 setting forth the Installed PV Capacity on the Commercial Operation Date, and (iii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I-2 setting forth the Installed Battery Capacity on the Commercial Operation Date;
(b) A Participating Generator Agreement and a Meter Service Agreement between Seller and CAISO shall have been executed and delivered and be in full force and effect, and a copy of each such agreement delivered to Buyer;
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 25 (c) An Interconnection Agreement between Seller and the PTO shall have been executed and delivered and be in full force and effect and a copy of the Interconnection Agreement delivered to Buyer;
(d) All applicable regulatory authorizations, approvals and permits for the operation of the Facility have been obtained (or if not obtained, applied for and reasonably expected to be received within ninety (90) days) and all conditions thereof that are capable of being satisfied on the Commercial Operation Date have been satisfied and shall be in full force and effect;
(e) Seller has received CEC Precertification of the Generating Facility (and reasonably expects to receive final CEC Certification and Verification for the Generating Facility in no more than one hundred eighty (180) days from the Commercial Operation Date); (f) Seller (with the reasonable participation of Buyer) shall have completed (or, for items normally occurring after commercial operation of the Generating Facility, expects to timely complete) all applicable WREGIS registration requirements, including the completion and submittal of all applicable registration forms and supporting documentation, which may include applicable interconnection agreements, informational surveys related to the Generating Facility, QRE service agreement applications, and other appropriate documentation required to effect Generating Facility registration with WREGIS and to enable Renewable Energy Credit transfers related to the Generating Facility within the WREGIS system; (g) Seller has achieved Deliverability Status and provided documentation of same to Buyer;
(h) Seller has satisfied its requirements with the union labor requirements set forth in Section 13.4;
(i) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8; and
(j) Seller has paid Buyer or authorized Buyer to draw on the Development Security for all amounts owing under this Agreement, if any, including Construction Delay Damages and Commercial Operation Delay Damages.
2.3 Development; Construction; Progress Reports. Within fifteen (15) days after the close of (i) each calendar quarter from the first calendar quarter following the Effective Date until the Construction Start Date, and (ii) each calendar month from the first calendar month following the Construction Start Date until the Commercial Operation Date, Seller shall provide to Buyer a Progress Report and agree to regularly scheduled meetings between representatives of Buyer and Seller to review such reports and discuss Seller’s construction progress. The form of the Progress Report is set forth in Exhibit E. Seller shall also provide Buyer with any reasonable requested documentation (subject to confidentiality restrictions) directly related to the achievement of Milestones within ten (10) Business Days of receipt of such request by Seller. For the avoidance of doubt, Seller is solely responsible for the design and construction of the Facility, including the location of the Site, obtaining all permits and approvals to build the Facility, the Facility layout, and the selection and procurement of the equipment comprising the Facility.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 26 2.4 Remedial Action Plan. If Seller misses three (3) or more Milestones, or misses any one (1) by more than ninety (90) days, except as the result of Force Majeure Event or Buyer’s Default, Seller shall submit to Buyer, within ten (10) Business Days of either the third such missed Milestone or the end of the ninety (90) day period for any single uncompleted Milestone, a remedial action plan (“Remedial Action Plan”), which will describe in detail any delays (actual or anticipated) beyond the scheduled Milestone dates, including the cause of the delay (e.g., governmental approvals, financing, property acquisition, design activities, equipment procurement, project construction, interconnection, or any other factor), Seller’s detailed description of its proposed course of action to achieve the missed Milestones and all subsequent Milestones by the Guaranteed Commercial Operation Date; provided, that delivery of any Remedial Action Plan shall not relieve Seller of its obligation to provide Remedial Action Plans with respect to any subsequent Milestones and to achieve the Guaranteed Commercial Operation Date in accordance with the terms of this Agreement. Subject to the provisions of Exhibit B, so long as Seller complies with its obligations under this Section 2.4, Seller shall not be considered in default of its obligations under this Agreement solely as a result of missing any Milestone.
2.5 Intentionally Omitted.
2.6 Intentionally Omitted.
2.7 Ground-Mounted Solar Requirements for Pollinator-Friendly Habitats; Signage.
(a) If arable land is used for the Site, Seller shall provide a written narrative that describes the vegetation design and management plan for the Site, including landscape drawings and seed/plant listing. Seller shall use reasonable efforts to provide such narrative to Buyer no later than the Construction Start Date.
(i) In addition, within thirty (30) days of the Commercial Operation Date Seller shall submit to Buyer a pollinator-friendly solar scorecard (“Pollinator Scorecard”) in the form attached as Exhibit U. The Pollinator Scorecard includes language that deems planning for the implementation of pollinator-friendly habitat as acceptable. Not all planned activities need to be completed upon submission of the first Pollinator Scorecard, however, planning documentation must be provided with the first Pollinator Scorecard that details the upcoming activities. Seller shall use commercially reasonable efforts to achieve a score of 70 or above on each Pollinator Scorecard.
(ii) Seller shall complete installation of pollinator habitat within two (2) years of Commercial Operation and supply an updated Pollinator Scorecard to Buyer that reflects the habitat installed. Documentation of work performed relating to site preparation and seed installation will be provided to Buyer with the updated scorecard. (iii) Seller shall provide Buyer with an updated Pollinator Scorecard within sixty (60) days of the 5th, 10th, and 15th anniversary of Commercial Operation.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 27 (iv) Seller is strongly encouraged to consider, but is not required to implement, the following solar array design elements to encourage and support pollinator-friendly habitats and reduce maintenance costs:
(A) 36-inch minimum height above ground of the lowest edge of the solar panels;
(B) Burying conduits and wiring with homeruns tight to bottom of panels;
(C) Designing inter-row access/spacing to enable vegetation management; and
(D) Utilizing ‘BeeWhere’ registration if beehives are placed onsite.
Additional pollinator reference materials can be found at Pollinator Partnership at www.pollinator.org and EPRI at https://www.epri.com/#/pages/sa/pollinators?lang=en-US, including EPRI Overview of Pollinator-Friendly Solar Energy (December 2019). (b) Signage. Seller agrees to install and maintain permanent signage during the Delivery Term at the Site displaying Buyer’s logo, Seller’s logo, and the name of the Facility. The sign shall be located on property frontage with visibility to the most populous roadway, subject to any local ordinance restrictions. The sign shall be large enough to be visible from such roadway.
The materials shall be environmentally friendly, such as aluminum composite or wood, and shall not be made of acrylic or similar materials. No lighting is required. Buyer shall provide a design file for the sign. Location and final specifications for signage, including design, are subject to Buyer’s approval, not to be unreasonably withheld. Seller shall construct and maintain the sign at Seller’s sole expense, and Seller shall be responsible for obtaining any required permits or approvals. The sign shall be installed within thirty (30) days of the Commercial Operation Date.
2.8 CPUC Mid-Term Reliability Requirements. Seller acknowledges that Buyer intends to use this Agreement to comply with mandatory procurement obligations for incremental zero-emissions capacity pursuant to CPUC D.21-06-035, OP 6 and D.23-02-040. In accordance with such requirements, Seller represents that the Facility shall meet the following requirements, subject to the terms of this Agreement:
(a) The Facility shall emit zero-emissions;
(b) The Facility shall be comprised of a generation resource paired with storage; and
(c) The Facility shall be designed to be capable of delivering every day, year-round at least five (5) MWh of energy per every MW of claimed incremental capacity during the 5 p.m. to 10 p.m. period (the beginning of hour ending 1800 and the end of hour ending 2200), Pacific Time, provided that the daily plane-of-array irradiance is at least 5.2 kWh/m2 .
(d) In furtherance of Buyer’s compliance and reporting obligations related to the foregoing, and without limiting Seller’s obligations under any other provision of this AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 28 Agreement, Seller agrees to provide documentation reasonably requested by Buyer in connection with such compliance obligations, including but not limited to the following:
(i) Evidence of interconnection, site control, notice to proceed with construction, and other evidence of construction status and progress towards Commercial Operation;
(ii) Engineering assessments demonstrating that the Facility satisfies the foregoing requirements; and
(iii) Any other engineering assessments or contractual support required or requested by the CPUC pursuant to CPUC D.21-06-035 and D.23-02-040.
ARTICLE 3
PURCHASE AND SALE
3.1 Purchase and Sale of Product. Subject to the terms and conditions of this Agreement, during the Delivery Term, Seller shall supply and deliver to Buyer all the Product produced by or associated with the Facility, and Buyer will purchase all the Product produced by or associated with the Facility at the Contract Price and in accordance with Exhibit C. At its sole discretion, Buyer may during the Delivery Term re-sell or use for another purpose all or a portion of the Product, after title and risk of loss thereto has been transferred to Buyer, provided that no such re-sale or use shall relieve Buyer of any obligations hereunder. During the Delivery Term, Buyer will have exclusive rights to offer, bid, or otherwise submit the Product, or any component thereof, from the Facility after the Delivery Point for resale in the market, and retain and receive any and all related revenues. Subject to Buyer’s obligation to purchase Product in accordance with this Section 3.1 and Exhibit C, Buyer has no obligation to purchase from Seller any Product for which the associated Facility Energy is not or cannot be delivered to the Delivery Point as a result of an outage of the Facility, a Force Majeure Event affecting Buyer’s ability to receive the Product at the Delivery Point, or a Curtailment Order.
3.2 Sale of Green Attributes. During the Delivery Term, Seller shall sell and deliver to Buyer, and Buyer shall purchase from Seller, all Green Attributes attributable to the Generating Facility Energy generated and/or delivered by the Generating Facility.
3.3 Imbalance Energy. Buyer and Seller recognize that in any given Settlement Period there may be Imbalance Energy. To the extent there is any Imbalance Energy, any payments or charges related to such Imbalance Energy shall be for the account of Buyer.
3.4 Ownership of Renewable Energy Incentives. Seller shall have all right, title and interest in and to all Renewable Energy Incentives. Buyer acknowledges that any Renewable Energy Incentives belong to Seller. If any Renewable Energy Incentives, or values representing the same, are initially credited or paid to Buyer, Buyer shall cause such Renewable Energy Incentives or values relating to same to be assigned or transferred to Seller without delay. Buyer shall reasonably cooperate with Seller, at Seller’s sole expense, in Seller’s efforts to meet the requirements for any certification, registration, or reporting program relating to Renewable Energy Incentives.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 29 3.5 Future Environmental Attributes.
(a) The Parties acknowledge and agree that as of the Original Effective Date, environmental attributes sold under this Agreement are restricted to Green Attributes; however, Future Environmental Attributes may be created by a Governmental Authority through Laws enacted after the Original Effective Date. Subject to the final sentence of this Section 3.5(a) and Sections 3.5(b) and 3.11, in such event, Buyer shall bear all costs associated with the transfer, qualification, verification, registration and ongoing compliance for such Future Environmental Attributes, but there shall be no increase in the Contract Price. Upon Seller’s receipt of Notice from Buyer of Buyer’s intent to claim such Future Environmental Attributes, the Parties shall determine the necessary actions and additional costs associated with such Future Environmental Attributes. Seller shall have no obligation to alter the Facility unless the Parties have agreed on all necessary terms and conditions relating to such alteration and Buyer has agreed to reimburse Seller for all costs, losses, and liabilities associated with such alteration. (b) If Buyer elects to receive Future Environmental Attributes pursuant to Section 3.5(a), the Parties agree to negotiate in good faith with respect to the development of further agreements and documentation necessary to effectuate the transfer of such Future Environmental Attributes, including agreement with respect to (i) appropriate transfer, delivery and risk of loss mechanisms, and (ii) appropriate allocation of any additional costs to Buyer, as set forth above; provided, that the Parties acknowledge and agree that such terms are not intended to alter the other material terms of this Agreement.
3.6 Test Energy. No less than fourteen (14) days prior to the first day on which Test Energy is expected to be available from the Facility, Seller shall notify Buyer of the availability of the Test Energy. If and to the extent the Facility generates Test Energy, Seller shall sell and Buyer shall purchase from Seller all Test Energy and any associated Products on an as-available basis.
As compensation for such Test Energy and associated Product, Buyer shall remit to Seller all CAISO revenues arising from such Test Energy and associated Product (the “Test Energy Rate”).
For the avoidance of doubt, the conditions precedent in Section 2.2 are not applicable to the Parties’ obligations under this Section 3.6.
3.7 Capacity Attributes. Seller shall make all requests in the CAISO generator interconnection process necessary to achieve Deliverability Status. As between Buyer and Seller, Seller shall be responsible for the cost and installation of any Network Upgrades associated with obtaining such Deliverability Status. Seller’s obligations under this Section 3.7 are subject to the provisions of Section 3.11.
(a) Throughout the Delivery Term, Seller grants, pledges, assigns and otherwise commits to Buyer all the Capacity Attributes from the Storage Facility. (b) Throughout the Delivery Term, Seller shall use commercially reasonable efforts to maintain Deliverability Status for the Storage Facility from the CAISO and shall perform all actions necessary to ensure that the Storage Facility qualifies to provide Resource Adequacy Benefits to Seller. On and after the RA Guarantee Date and thereafter throughout the Delivery Term, and subject to Section 3.11, Seller hereby covenants and agrees to transfer all Resource Adequacy Benefits to Buyer from the Storage Facility.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 30 (c) For the duration of the Delivery Term, Seller shall take all commercially reasonable actions, including complying with all applicable registration and reporting requirements, and execute all documents or instruments necessary to enable Buyer to use all of the Capacity Attributes committed by Seller to Buyer pursuant to this Agreement.
3.8 Resource Adequacy Failure.
(a) RA Deficiency Determination. For each RA Shortfall Month, Seller shall pay to Buyer the RA Deficiency Amount as liquidated damages or provide Replacement RA, in each case, as the sole remedy for the Capacity Attributes Seller failed to convey to Buyer. (b) RA Deficiency Amount Calculation. Subject to Section 3.11, for each RA Shortfall Month, Seller shall pay to Buyer an amount (the “RA Deficiency Amount”) equal to the (c) Seller may, as an alternative to paying RA Deficiency Amounts, provide Replacement RA in an amount equal to all or a portion of the RA Shortfall Amount, provided that the Replacement RA capacity is communicated by Seller to Buyer with Replacement RA product information in a written notice substantially in the form of Exhibit M at least before the applicable CPUC Showing Month for the purpose of monthly RA reporting. (d)
3.9 CEC Certification and Verification. Subject to Section 3.11, Seller shall take all necessary steps including, but not limited to, making or supporting timely filings with the CEC to obtain and maintain CEC Certification and Verification for the Generating Facility throughout the Delivery Term, including compliance with all applicable requirements for certified facilities set forth in the current version of the RPS Eligibility Guidebook (or its successor). Seller shall obtain CEC Precertification by the Commercial Operation Date. Within thirty (30) days after the Commercial Operation Date, Seller shall apply with the CEC for final CEC Certification and Verification. Within one hundred eighty (180) days after the Commercial Operation Date, and subject to Section 3.11, Seller shall obtain and maintain throughout the remainder of the Delivery Term the final CEC Certification and Verification. Seller must promptly notify Buyer and the CEC of any changes to the information included in Seller’s application for CEC Certification and Verification for the Generating Facility.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 31 3.10 California Renewables Portfolio Standard.
(a) Eligibility. Seller, and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement that: (i) the Project qualifies and is certified by the CEC as an Eligible Renewable Energy Resource (“ERR”) as such term is defined in Public Utilities Code Section 399.12 or Section 399.16; and (ii) the Project’s output delivered to Buyer qualifies under the requirements of the California Renewables Portfolio Standard. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC 6] As used in this Section 3.10(a), “certified by the CEC” means the Generating Facility has received CEC Certification and Verification.
(b) Transfer of Renewable Energy Credits. Seller and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement the Renewable Energy Credits transferred to Buyer conform to the definition and attributes required for compliance with the California Renewables Portfolio Standard, as set forth in California Public Utilities Commission Decision 08-08-028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC REC-1]. (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].
3.11 Change in Law.
(a) The Parties acknowledge that an essential purpose of this Agreement is to provide renewable generation that meets the requirements of the California Renewables Portfolio Standard and Capacity Attributes to meet various compliance requirements, and that this Agreement is being used by Buyer to comply with mandatory procurement obligations of the CPUC, and that Governmental Authorities, including the CEC, CPUC, CAISO and WREGIS, may undertake actions from time to time to implement a change in Law. Seller agrees to use commercially reasonable efforts to cooperate with Buyer with respect to any subsequently requested changes, modifications, or amendments to this Agreement needed to satisfy requirements of Governmental Authorities associated with changes in Law, including changes, modifications, or amendments to this Agreement to: (i) amend the Agreement to reflect any mandatory contractual language required by Governmental Authorities, including changes to the definition of Green Attributes and Capacity Attributes or as may be required pursuant to CPUC D.21-06-035; (ii) require submission of any reports, data, or other information required by Governmental Authorities; (iii) provide additional documentation or information to respond to data requests from the CPUC or other Governmental Authorities; (iv) satisfy new compliance requirements of Governmental Authorities; or (v) take any other actions that may be requested by Buyer to assure that the Generating Facility is an Eligible Renewable Energy Resource under the AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 32 California Renewables Portfolio Standard; provided that Seller shall have no obligation to modify this Agreement, or take other actions not required under this Agreement, if such modifications or actions would materially adversely affect, or could reasonably be expected to have or result in a material adverse effect on, any of Seller’s rights, benefits, risks and/or obligations under this Agreement.
(b) If a change in Laws occurring after the Original Effective Date has increased Seller’s known or reasonably expected costs and expenses to comply with Seller’s obligations under this Agreement with respect to obtaining, maintaining, conveying or effectuating Buyer’s use of (as applicable) any Product (any action required to be taken by Seller to comply with such change in Law, a “Compliance Action”), then the Parties agree that the maximum aggregate amount of costs and expenses Seller shall be required to bear during the Delivery Term to comply with all such Compliance Actions shall be capped at (the “Compliance Expenditure
Cap”),
(c) If Seller reasonably anticipates the need to incur costs and expenses in excess of the Compliance Expenditure Cap in order to take any Compliance Action, Seller shall provide Notice to Buyer of such anticipated costs and expenses. (d) Buyer will have sixty (60) Days to evaluate such Notice (during which time period Seller shall not be obligated to take any Compliance Actions described in such Notice) and shall, within such time, either (1) agree to reimburse Seller for all of the costs and expenses that exceed the Compliance Expenditure Cap (such costs and expenses (including lost production, if any), the “Accepted Compliance Costs”), or (2) waive Seller’s obligation to take such Compliance Actions.
(e) If Buyer agrees to reimburse Seller for the Accepted Compliance Costs, Seller shall complete the Compliance Actions covered by such Accepted Compliance Costs as agreed upon by the Parties, provided that under no circumstances shall Seller be obligated to incur costs and expenses in excess of the Accepted Compliance Costs that have been agreed to be reimbursed by Buyer.
(f)
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 33 3.12 Project Configuration. In order to optimize the benefits of the Facility, Buyer and Seller each agree that if requested by the other Party, then Buyer and Seller will discuss in good faith potential reconfiguration of the Facility or Interconnection Facilities; provided that neither Party shall be obligated to agree to any changes under this Agreement, or to incur any unreimbursed expense in connection with such changes, except under terms mutually acceptable to both Parties as set forth in a written agreement.
ARTICLE 4
OBLIGATIONS AND DELIVERIES
4.1 Delivery.
(a) Energy. Subject to the provisions of this Agreement, commencing on the Commercial Operation Date through the end of the Contract Term, Seller shall supply and deliver the Product to Buyer at the Delivery Point, and Buyer shall take delivery of the Product at the Delivery Point in accordance with the terms of this Agreement. Except as otherwise provided herein, Seller will be responsible for paying or satisfying when due any costs or charges imposed in connection with the delivery of Facility Energy to the Delivery Point, including without limitation, Station Use, Electrical Losses, any costs associated with delivering the Charging Energy from the Generating Facility to the Storage Facility, and any operation and maintenance charges imposed by the Transmission Provider directly relating to the Facility’s operations. Buyer shall be responsible for all costs, charges and penalties, if any, imposed in connection with the delivery of Facility Energy at and after the Delivery Point, including without limitation transmission costs and transmission line losses and imbalance charges. Notwithstanding any of the foregoing to the contrary, Buyer shall assume all liability and reimburse Seller for any and all CAISO charges and penalties incurred by Seller as a result of Buyer’s actions or failures to comply with its obligations under this Agreement, including those resulting from a Buyer Curtailment Period. The Facility Energy will be scheduled to the CAISO by Buyer (or Buyer’s designated Scheduling Coordinator) in accordance with Exhibit D.
(b) Green Attributes. All Green Attributes associated with the Generating Facility during the Delivery Term are exclusively dedicated to and vested in Buyer. Seller represents and warrants that Seller holds the rights to all Green Attributes from the Generating Facility, and Seller agrees to convey and hereby conveys all such Green Attributes to Buyer as included in the delivery of the Product from the Generating Facility.
4.2 Title and Risk of Loss.
(a) Energy. Title to and risk of loss related to the Facility Energy, shall pass and transfer from Seller to Buyer at the Delivery Point. Seller warrants that all Product delivered to Buyer is free and clear of all liens, security interests, claims and encumbrances of any kind. (b) Green Attributes. Title to and risk of loss related to the Green Attributes shall pass and transfer from Seller to Buyer upon the transfer of such Green Attributes in accordance with WREGIS.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 34 4.3 Forecasting. Seller shall provide the forecasts described below at its sole expense and in a format reasonably acceptable to Buyer (or Buyer’s designee). Seller shall use reasonable efforts to provide forecasts that are accurate and, to the extent not inconsistent with the requirements of this Agreement, shall prepare such forecasts, or cause such forecasts to be prepared, in accordance with Prudent Operating Practices. (a) Annual Forecast of Energy. No less than forty-five (45) days before (i) the first day of the first Contract Year of the Delivery Term and (ii) the beginning of each calendar year for every subsequent Contract Year during the Delivery Term, Seller shall provide to Buyer and the SC (if applicable) a non-binding forecast of each month’s average-day expected Generating Facility Energy, by hour, for the following calendar year in a form substantially similar to the table found in Exhibit F-1 (“Form of Average Expected Energy Report”), or as reasonably requested by Buyer.
(b) Monthly Forecast of Energy and Available Generating Capacity. No less than thirty (30) days before the beginning of Commercial Operation, and thereafter ten (10) Business Days before the beginning of each month during the Delivery Term, Seller shall provide to Buyer and the SC (if applicable) a non-binding forecast of the hourly expected Generating Facility Energy for each day of the following month in a form substantially similar to the table found in Exhibit F-2 (“Form of Monthly Delivery Forecast”). (c) Day-Ahead Forecast. By 5:30 AM Pacific Prevailing Time on the Business Day immediately preceding the date of delivery, or as otherwise specified by Buyer consistent with Prudent Operating Practice, Seller shall provide Buyer or its Scheduling Coordinator with a non-binding forecast of the hourly expected Generating Facility Energy for each hour of the immediately succeeding day (“Day-Ahead Forecast”). A Day-Ahead Forecast provided in a day prior to any non-Business Day(s) shall include non-binding forecasts for the immediate day, each succeeding non-Business Day and the next Business Day. Each Day-Ahead Forecast shall clearly identify, for each hour, Seller’s best estimate of the hourly expected Generating Facility Energy.
These Day-Ahead Forecasts shall be sent to the Scheduling Coordinator. If Seller fails to provide Buyer or its Scheduling Coordinator with a Day-Ahead Forecast as required herein for any period, then for such unscheduled delivery period only Buyer shall rely on any real-time forecast or Buyer’s best estimate based on information reasonably available to Buyer. For the avoidance of doubt, receipt by the Scheduling Coordinator of a Day-Ahead Forecast in the form of the CAISO VER Forecast or a Day-Ahead Forecast from another Approved Forecast Vendor shall satisfy Seller’s obligations under this Section 4.3(c).
(d) Real-Time Forecasts. During the Delivery Term, Seller shall notify the Scheduling Coordinator of any changes from the Day-Ahead Forecast of one (1) MW or more in (i) Available Generating Capacity or (ii) Storage Capacity or (iii) hourly expected Generating Facility Energy, in each case, whether due to Forced Facility Outage, Force Majeure Event or other cause, as soon as reasonably possible, but no later than one (1) hour prior to the deadline for submitting Schedules to the CAISO in accordance with the rules for participation in the Real-Time Market. If the Available Generating Capacity, Storage Capacity, or hourly expected Generating Facility Energy changes by at least one (1) MW as of a time that is less than one (1) hour prior to the Real-Time Market deadline, but before such deadline, then Seller must notify Buyer or its Scheduling Coordinator as soon as reasonably possible. Such Real-Time Forecasts of Generating AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 35 Facility Energy shall be provided by an Approved Forecast Vendor and shall contain information regarding the beginning date and time of the event resulting in the change in Available Generating Capacity, Storage Capacity, or hourly expected Generating Facility Energy, as applicable, the expected end date and time of such event, and any other information required by the CAISO or reasonably requested by Buyer. With respect to any Forced Facility Outage, Seller shall use best efforts to notify Buyer or its Scheduling Coordinator of such outage within ten (10) minutes of the commencement of the Forced Facility Outage. Seller shall inform Buyer or its Scheduling Coordinator of any developments that will affect either the duration of such outage or the availability of the Facility during or after the end of such outage. These Real-Time Forecasts shall be communicated in a method acceptable to Buyer or its Scheduling Coordinator; provided that Buyer or its Scheduling Coordinator specifies the method no later than five (5) Business Days prior to the effective date of such requirement. In the event Buyer or its Scheduling Coordinator fails to provide Notice of an acceptable method for communications under this Section 4.3(d), then Seller shall send such communications by telephone and email to Buyer or its Scheduling Coordinator. For the avoidance of doubt, receipt by the Scheduling Coordinator of Real-Time Forecasts in the form of the CAISO VER Forecast or a Real-Time Forecast from another Approved Forecast Vendor shall satisfy Seller’s obligations under this Section 4.3(d). (e) Forced Facility Outages. Notwithstanding anything to the contrary herein, Seller shall notify the Scheduling Coordinator of Forced Facility Outages promptly but no later than the time periods required by the CAISO Tariff and the CAISO’s outage management rules and Seller shall keep the Scheduling Coordinator informed of any developments that will affect either the duration of the outage or the availability of the Facility during or after the end of the outage.
(f) Forecasting Penalties. Subject to a Force Majeure Event, in the event Seller does not provide the notification required in Section 4.3(e) and Buyer incurs a loss or penalty resulting from its scheduling activities with respect to Facility Energy due to the failure of Seller to provide such notification, Seller shall be responsible for a Forecasting Penalty. Settlement of Forecasting Penalties shall occur as set forth in Article 8 of this Agreement. (g) CAISO Tariff Requirements. Subject to the limitations expressly set forth in Section 3.11, to the extent such obligations are applicable to the Facility, Seller will comply with all applicable obligations for Variable Energy Resources under the CAISO Tariff and the Eligible Intermittent Resource Protocol, including providing appropriate operational data and meteorological data, and will fully cooperate with Buyer, Buyer’s SC, and CAISO, in providing all data, information, and authorizations required thereunder.
4.4 Dispatch Down/Curtailment.
(a) General. Seller agrees to reduce the amount of Facility Energy produced by the Facility and delivered to the Delivery Point, by the amount and for the period set forth in any Curtailment Order, Buyer Curtailment Order, or notice received from CAISO in respect of a Buyer Bid Curtailment, provided that Seller is not required to reduce such amount to the extent it is inconsistent with the limitations of the Facility set out in the Operating Restrictions.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 36 (b) Buyer Curtailment. Buyer shall have the right to order Seller to curtail deliveries of Facility Energy through Buyer Curtailment Orders, provided that Buyer shall pay Seller for all Deemed Delivered Energy associated with a Buyer Curtailment Period in excess of the Curtailment Cap at the Renewable Rate, in accordance with Exhibit C. (c) Failure to Comply. Subject to Section 4.4(a), if Seller fails to comply with a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order, then, for each MWh of Facility Energy that is delivered by the Facility to the Delivery Point in contradiction to the Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order, Seller shall pay Buyer for each such MWh at an amount equal to the sum of (A) + (B) + (C), where: (A) is the amount, if any, paid to Seller by Buyer for delivery of such excess MWh and, (B) is the sum, for all Settlement Intervals with a Negative LMP during the Buyer Curtailment Period or Curtailment Period, of the absolute value of the product of such excess MWh in each Settlement Interval and the Negative LMP for such Settlement Interval, and (C) is any penalties assessed to Buyer by the CAISO or other charges assessed by the CAISO resulting from Seller’s failure to comply with the Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order. (d) Seller Equipment Required for Curtailment Instruction Communications.
Subject to the last sentence of this Section 4.4(d), Seller shall acquire, install, and maintain such facilities, communications links and other equipment, and implement such protocols and practices, as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, to operate the Facility in accordance with this Agreement or a Governmental Authority, including to implement a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order in accordance with the then-current methodology used to transmit such instructions as it may change from time to time. If at any time during the Delivery Term Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with then-current methodologies, Seller shall take the steps necessary to become compliant as soon as reasonably possible. Seller shall be liable pursuant to Section 4.4(c) for failure to comply with a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order, during the time that Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with then-current methodologies. For the avoidance of doubt, a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order communication via such systems and facilities shall have the same force and effect on Seller as any other form of communication.
If Seller is directed by Buyer to install or implement facilities, communications links or other equipment, protocols or practices facilities pursuant to this Section 4.4(d) that are not otherwise required for the Facility pursuant to the CAISO Tariff, then the installation or implementation of such facilities, communications links or other equipment, protocols or practices facilities will be deemed Compliance Actions subject to the Compliance Expenditure Cap as set forth in Section
3.11. 4.5 Charging Energy Management.
(a) Upon receipt of a valid Charging Notice, but subject to Section 4.5(b), Seller shall take any and all action necessary to deliver the Charging Energy from the Generating Facility to the Storage Facility in order to deliver the Storage Product in accordance with the terms of this Agreement.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 37 (b) During the Delivery Term, Buyer will have the right to direct Seller to charge the Storage Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Charging Notices to Seller electronically, provided, that Buyer’s right to issue Charging Notices is subject to the requirements and limitations set forth in this Agreement, including the Operating Restrictions and the provisions of Section 4.5(a). Each Charging Notice issued in accordance with this Agreement will be effective unless and until Buyer modifies such Charging Notice by providing Seller with an updated Charging Notice. (c) Seller shall not charge the Storage Facility during the Delivery Term other than pursuant to a valid Charging Notice, or in connection with a Storage Capacity Test, or pursuant to a notice from CAISO, the PTO, Transmission Provider, or any other Governmental Authority or as provided in Section 4.4(a). If, during the Delivery Term, Seller (i) charges the Storage Facility to a Stored Energy Level greater than the Stored Energy Level provided for in the Charging Notice or (ii) charges the Storage Facility in violation of the first sentence of this Section 4.5(c), then (x) Seller shall be responsible for all energy costs associated with such charging of the Storage Facility, (y) Buyer shall not be required to pay for the charging of such energy (i.e., Charging Energy), and (z) Buyer shall be entitled to discharge such energy and entitled to all of the benefits (including Storage Product) associated with such discharge. (d) During the Delivery Term, Buyer will have the right to direct Seller to discharge the Storage Facility seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Discharging Notices to Seller electronically, and subject to the requirements and limitations set forth in this Agreement, including the Operating Procedures. Each Discharging Notice issued in accordance with this Agreement will be effective unless and until Buyer modifies such Discharging Notice by providing Seller with an updated Discharging Notice. (e) Notwithstanding anything in this Agreement to the contrary, during any Settlement Interval, Curtailment Orders, Buyer Curtailment Orders, and Buyer Bid Curtailments applicable to such Settlement Interval shall have priority over any Charging Notices and Discharging Notices applicable to such Settlement Interval, and Seller shall have no liability for violation of this Section 4.5 or any Charging Notice or Discharging Notice if and to the extent such violation is caused by Seller’s compliance with any Curtailment Order, Buyer Curtailment Order, Buyer Bid Curtailment or other instruction or direction from a Governmental Authority, the PTO or the Transmission Provider. Buyer shall have the right, but not the obligation, to provide Seller with updated Charging Notices and Discharging Notices during any Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order consistent with the Operating Procedures. (f)
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 38 (g)
4.6 Reduction in Delivery Obligation. For the avoidance of doubt, and in no way limiting Section 3.1 or Exhibit G:
(a) Facility Maintenance. Unless otherwise agreed, Seller shall provide Buyer with Notice of Planned Outages at least one hundred twenty (120) days prior, provided, that (i) no Notice is required for scheduled maintenance or any changes or extensions thereto which do not result in a shutdown of more than three percent (3%) of the Installed PV Capacity and three percent (3%) of the Installed Battery Capacity, and (ii) Seller may adjust the dates of any scheduled maintenance with fewer than one hundred and twenty (120) days’ prior Notice to Buyer so long as (X) Seller makes its request more than three (3) Business Days prior to the expected start date of such scheduled maintenance and (Y) the requested alternate date is reasonably acceptable to Buyer. To the extent notice is not already required under the terms hereof, Seller shall notify Buyer as soon as practicable of any extensions to scheduled maintenance and expected end dates thereof.
Subject to the foregoing, Seller shall be permitted to reduce deliveries of Product during any period of scheduled maintenance on the Facility that does not conflict with the availability requirements required pursuant to CPUC D.21-06-035, OP 6; provided that, between June 1st and September 30th, Seller shall not schedule non-emergency maintenance that reduces the Energy generation of the Facility by more than ten percent (10%) during daylight hours, unless (i) such outage is required to avoid damage to the Facility, (ii) such maintenance is necessary to maintain equipment warranties and cannot be scheduled outside the period of June 1st to September 30th, (iii) such outage is required in accordance with Prudent Operating Practices, (iv) the Parties agree otherwise in writing, or (v) such outage is required to perform a Storage Capacity Test or measurement of the Efficiency Rate, in each case, performed at Seller’s request (any of the scheduled maintenance permitted by this Section 4.6(a), a “Planned Outage”).
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 39 (b) Forced Facility Outage. Seller shall be permitted to reduce deliveries of Product during any Forced Facility Outage. Seller shall provide the Scheduling Coordinator with Notice and expected duration (if known) of any Forced Facility Outage. (c) System Emergencies and Other Interconnection Events. Seller shall be permitted to reduce deliveries of Product during any period of System Emergency, Buyer Curtailment Period or upon Notice of a Curtailment Order pursuant to the terms of this Agreement, the Interconnection Agreement or applicable tariff.
(d) Force Majeure Event. Seller shall be permitted to reduce deliveries of Product during any Force Majeure Event.
(e) Health and Safety. Seller shall be permitted to reduce deliveries of Product as necessary to maintain health and safety pursuant to Section 6.2.
4.7 Guaranteed Energy Production. Seller shall be required to deliver to Buyer no less than the Guaranteed Energy Production in each Performance Measurement Period. For purposes of determining whether Seller has achieved the Guaranteed Energy Production, Seller shall be deemed to have delivered to Buyer (1) any Deemed Delivered Energy and (2) Energy in the amount it could reasonably have delivered to Buyer but was prevented from delivering to Buyer by reason of any Force Majeure Events, System Emergency, Buyer’s Default or other failure to perform, and Curtailment Periods (“Lost Output”). If Seller fails to achieve the Guaranteed Energy Production amount in any Performance Measurement Period, Seller shall pay Buyer damages calculated in accordance with Exhibit G.
4.8 Storage Availability.
(a) During the Delivery Term, the Storage Facility shall maintain a Monthly Storage Availability during each month of no less than (the “Guaranteed Storage Availability”), which Monthly Storage Availability shall be calculated in accordance with Exhibit P.
(b) If the Monthly Storage Availability during any month is less than the Guaranteed Storage Availability, then Buyer’s payment for the Storage Product shall be calculated by reference to the Availability Adjustment (as determined in accordance with Exhibit P).
4.9 Storage Capacity Tests.
(a) Prior to the Commercial Operation Date, Seller shall schedule and complete a Storage Capacity Test in accordance with Exhibit O. Thereafter, Seller and Buyer shall have the right to run retests of the Storage Capacity Test in accordance with Exhibit O. (b) Buyer shall have the right to send one or more representative(s) to witness all Storage Capacity Tests. Such representative(s) shall not interfere with the Storage Capacity Tests. Buyer shall be responsible for all costs, expenses and fees payable or reimbursable to its representative(s) witnessing any Storage Capacity Test. Other than as may be agreed pursuant to Section 3.11, all other costs of any Storage Capacity Test shall be borne by Seller.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 40 (c) Following each Storage Capacity Test, Seller shall submit a testing report in accordance with Exhibit O. If the actual capacity or efficiency rate determined pursuant to a Storage Capacity Test varies from the then current Storage Capacity and/or Efficiency Rate, as applicable, then the actual capacity and/or efficiency rate, as applicable, determined pursuant to a Storage Capacity Test (up to, but not in excess of, the original Storage Contract Capacity set forth on the Cover Sheet, as such original Storage Contract Capacity on the Cover Sheet may have been adjusted (if at all) pursuant to Exhibit B) shall become the new Storage Capacity and/or Efficiency Rate, effective as of the first day of the month following the completion of the test, for all purposes under this Agreement, including compensation under Exhibit C.
4.10 WREGIS. Seller shall, at its sole expense, take all actions and execute all documents or instruments necessary to ensure that all WREGIS Certificates associated with all Renewable Energy Credits corresponding to all Generating Facility Energy purchased by Buyer hereunder are issued and tracked for purposes of satisfying the requirements of the California Renewables Portfolio Standard and transferred in a timely manner to Buyer for Buyer’s sole benefit. Seller shall transfer the Renewable Energy Credits to Buyer. Seller shall comply with all Laws, including the WREGIS Operating Rules, regarding the certification and transfer of such WREGIS Certificates to Buyer and Buyer shall be given sole title to all such WREGIS Certificates.
Seller shall be deemed to have satisfied the warranty in Section 3.10(c), provided that Seller fulfills its obligations under Sections 4.10(a) through (f) below. In addition:
(a) Prior to the Commercial Operation Date or as soon as reasonably possible thereafter, Seller shall register the Facility with WREGIS and establish an account with WREGIS (“Seller’s WREGIS Account”), which Seller shall maintain until the end of the Delivery Term.
Seller shall transfer the WREGIS Certificates using “Recurring Certificate Transfers” (as described in the WREGIS Operating Rules) from Seller’s WREGIS Account to the WREGIS account(s) of Buyer or the account(s) of a designee that Buyer identifies by Notice to Seller (“Buyer’s WREGIS Account”). Seller shall be responsible for all expenses associated with registering the Facility with WREGIS, establishing and maintaining Seller’s WREGIS Account, paying WREGIS Certificate issuance and transfer fees, and transferring WREGIS Certificates from Seller’s WREGIS Account to Buyer’s WREGIS Account. (b) Seller shall cause Recurring Certificate Transfers to occur on a monthly basis in accordance with the certification procedure established by the WREGIS Operating Rules.
Since WREGIS Certificates will only be created for whole MWh amounts of Facility Energy generated, any fractional MWh amounts (i.e., kWh) will be carried forward until sufficient generation is accumulated for the creation of a WREGIS Certificate. (c) Seller shall, at its sole expense, ensure that the WREGIS Certificates for a given calendar month correspond with the Facility Energy for such calendar month as evidenced by the Facility’s metered data.
(d) Due to the delay in the creation of WREGIS Certificates relative to the timing of invoice payment under Section 8.2, Buyer shall make an invoice payment for a given month in accordance with Section 8.2 notwithstanding that the WREGIS Certificates for such month may not have been formally transferred to Buyer in accordance with the WREGIS AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 41 Operating Rules and this Section 4.10. Notwithstanding this delay, Buyer shall have all right and title to all such WREGIS Certificates upon payment to Seller in accordance with Section 8.2. (e) A “WREGIS Certificate Deficit” means any deficit or shortfall in WREGIS Certificates delivered to Buyer for a calendar month as compared to the Facility Energy for the same calendar month (“Deficient Month”) caused by an error or omission of Seller. If any WREGIS Certificate Deficit is caused, or the result of any action or inaction by Seller, and remains uncured following the later of (i) thirty (30) days after Notice from Buyer thereof or (ii) ninety (90) days after the Deficient Month, then the amount of Generating Facility Energy in the Deficient Month shall be reduced by the amount of the WREGIS Certificate Deficit for purposes of calculating Buyer’s payment to Seller under Article 8 and the Guaranteed Energy Production for the applicable Performance Measurement Period. If there is a shortfall of WREGIS Certificates caused solely by an error or omission of WREGIS, the Parties shall cooperate in good faith to cause WREGIS to correct its error or omission.
(f) Subject to Section 3.11, if WREGIS changes the WREGIS Operating Rules after the Original Effective Date or applies the WREGIS Operating Rules in a manner inconsistent with this Section 4.10 after the Original Effective Date, the Parties promptly shall modify this Section 4.10 as reasonably required to cause and enable Seller to transfer to Buyer’s WREGIS Account a quantity of WREGIS Certificates for each given calendar month that corresponds to the Facility Energy in the same calendar month.
4.11 Station Use. Seller will be responsible for procuring and paying for all necessary retail electricity required to operate the Facility. Energy generated and/or stored at the Facility may be used to provide Energy required for Station Use, provided that Seller reimburse or not invoice Buyer for any costs incurred by Buyer in connection with such Station Use and the associated Energy.
4.12 Interconnection Capacity. Seller shall ensure during the Test Energy period and throughout the Delivery Term that (a) the Facility will have and maintain interconnection capacity available or allocable to the Facility under the Interconnection Agreement that is no less than the Guaranteed Capacity and (b) Seller shall have sufficient interconnection capacity and rights under the Interconnection Agreement to interconnect the Facility with the CAISO Grid and to fulfill Seller’s obligations under this Agreement, including with respect to Resource Adequacy Benefits, and to allow Buyer to dispatch the Facility in accordance with the CAISO Tariff and as contemplated under this Agreement (collectively, the “Dedicated Interconnection Capacity”).
Buyer shall be entitled to all rights and benefits associated with the Dedicated Interconnection Capacity, including any associated deliverability rights. Seller shall be responsible for all costs of interconnecting the Facility to the Transmission System.
ARTICLE 5
TAXES
5.1 Allocation of Taxes and Charges. Seller shall pay or cause to be paid all Taxes on or with respect to the Facility or on or with respect to the sale and making available of Product to Buyer, that are imposed on Product prior to its delivery to Buyer at the time and place contemplated under this Agreement. Buyer shall pay or cause to be paid all Taxes on or with respect to the delivery to and purchase by Buyer of Product that are imposed on Product at and AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 42 after its delivery to Buyer at the time and place contemplated under this Agreement (other than withholding or other Taxes imposed on Seller’s income, revenue, receipts or employees), if any.
If a Party is required to remit or pay Taxes that are the other Party’s responsibility hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement from the other for such Taxes. In the event any sale of Product hereunder is exempt from or not subject to any particular Tax, Buyer shall provide Seller with all necessary documentation within thirty (30) days after the Effective Date or promptly upon request by Seller to evidence such exemption or exclusion. If Buyer does not provide such documentation, then Buyer shall indemnify, defend, and hold Seller harmless from any liability with respect to Taxes from which Buyer claims it is exempt.
5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, however, that neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefor from the other Party. All Energy delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Energy.
5.3 Ownership. Seller shall be the owner of the Facility for federal income tax purposes and, as such, Seller (or its Affiliates or Lenders) shall be entitled to all depreciation deductions associated with the Facility and to any and all Tax Credits or other tax benefits associated with the Facility, including any such tax credits or tax benefits under the Code and all Renewable Energy Incentives. The Parties intend this Agreement to be a “service contract” within the meaning of Section 7701(e)(3) of the Code. The Parties will not take the position on any tax return or in any other filings suggesting that it is anything other than a purchase of the Product from the Seller or that this agreement is anything other than a “service contract” within the meaning of Section 7701(e)(3) of the Code.
ARTICLE 6
MAINTENANCE OF THE FACILITY
6.1 Maintenance of the Facility. Seller shall comply with applicable Law and Prudent Operating Practice relating to the operation and maintenance of the Facility and the generation and sale of Product.
6.2 Maintenance of Health and Safety. Seller shall take reasonable safety precautions with respect to the operation, maintenance, repair and replacement of the Facility. If Seller becomes aware of any circumstances relating to the Facility that create an imminent risk of damage or injury to any Person or any Person’s property, Seller shall take prompt action to prevent such damage or injury. Such action may include, to the extent reasonably necessary, disconnecting and removing all or a portion of the Facility, or suspending the supply of Generating Facility Energy, Charging Energy, or Discharging Energy.
6.3 Shared Facilities. The Parties acknowledge and agree that certain of the Shared Facilities and Interconnection Facilities (including a transformer, substation and associated equipment and real property), and Seller’s rights and obligations under the Interconnection Agreement, may be subject to certain shared facilities or co-tenancy agreements (“Shared AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 43 Facilities Agreements”) to be entered into among Seller, the Participating Transmission Owner, Seller’s Affiliates, or third parties pursuant to which certain Interconnection Facilities may be subject to joint ownership and shared maintenance and operation arrangements; provided that such Shared Facilities Agreements (i) shall permit Seller to perform or satisfy, and shall not purport to limit, its obligations hereunder, including providing the Dedicated Interconnection Capacity, (ii) continue to provide for separate metering and a separate Resource ID for each of the Generating Facility and the Storage Facility, and (iii) shall not allow any Affiliate of Seller or third party to use the Dedicated Interconnection Capacity if such use would have an adverse impact on Buyer’s dispatch rights of the Facility. Seller shall hold Buyer harmless from any penalties, imbalance energy charges, or other costs or losses from CAISO or under the Agreement resulting from a third party’s use of the Dedicated Interconnection Capacity.
ARTICLE 7
METERING
7.1 Metering. Seller shall measure the amount of Facility Energy using the Facility Meters, which will be subject to adjustment in accordance with applicable CAISO meter requirements and Prudent Operating Practices, including to account for Electrical Losses and Station Use. Seller shall measure the Charging Energy and the Discharging Energy using the Storage Facility Meters. All meters will be operated pursuant to applicable CAISO-approved calculation methodologies and maintained as Seller’s cost. Subject to meeting any applicable CAISO requirements, the meters shall be programmed to adjust for all losses from the Facility to the Delivery Point in a manner subject to Buyer’s prior written approval, not to be unreasonably withheld. Metering shall be consistent with the requirements set forth in Exhibit T. Each meter shall be kept under seal, such seals to be broken only when the meters are to be tested, adjusted, modified or relocated. In the event Seller breaks a seal outside of normal testing, Seller shall notify Buyer as soon as practicable. In addition, Seller hereby agrees to provide all meter data to Buyer in a form reasonably acceptable to Buyer, and consents to Buyer obtaining from CAISO the CAISO meter data directly relating to the Facility and all inspection, testing and calibration data and reports. Seller and Buyer, or Buyer’s Scheduling Coordinator, shall cooperate to allow both Parties to retrieve the meter reads from the CAISO Operational Meter Analysis and Reporting (OMAR) web or directly from the CAISO meter(s) at the Facility. Seller shall obtain and maintain a single CAISO Resource ID dedicated exclusively to the Generating Facility and a single CAISO Resource ID dedicated exclusively to the Storage Facility. Seller shall not obtain additional CAISO Resource IDs for the Generating Facility, the Storage Facility, or the Facility without the prior written consent of Buyer, which shall not be unreasonably withheld. In addition, upon the reasonable request of Buyer, Seller shall obtain one or more additional CAISO Resource IDs, provided that any out-of-pocket costs associated with obtaining such additional CAISO Resource IDs incurred by Seller shall be reimbursed by Buyer.
7.2 Meter Verification. Annually, if Seller has reason to believe there may be a meter malfunction, or upon Buyer’s reasonable request, Seller shall test the meter. The tests shall be conducted by independent third parties qualified to conduct such tests. Buyer shall have a right to be present during such tests. If a meter is inaccurate it shall be promptly repaired or replaced.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 44 ARTICLE 8
INVOICING AND PAYMENT; CREDIT
8.1 Invoicing. The calendar month shall be the standard period for all payments under this Agreement (other than Termination Payments) and Seller shall make good faith efforts to deliver the first invoice to Buyer for the Product no later than ten (10) Business Days after the end of the calendar month in which the Commercial Operation Date occurs. Seller shall thereafter make good faith efforts to deliver an invoice to Buyer for Product no later than ten (10) Business Days after the end of the prior monthly delivery period. Each invoice shall reflect (a) records of metered data, including CAISO metering and transaction data sufficient to document and verify the amount of Product delivered by the Facility for any Settlement Period during the preceding month, including the amount of Generating Facility Energy produced by the Generating Facility as read by the Generating Facility Meter, the amount of Charging Energy produced by the Generating Facility as read by the Storage Facility Meter, the amount of Discharging Energy delivered from the Storage Facility as read by the Storage Facility Meter, the amount of Replacement RA delivered to Buyer (if any), the calculation of Generating Facility Energy, Deemed Delivered Energy and Adjusted Energy Production, and the Contract Price applicable to such Product in accordance with Exhibit C; (b) access to any records, including invoices or settlement data from the CAISO, necessary to verify the accuracy of any amount; and (c) be in a format reasonably specified by Buyer, covering the services provided in the preceding month determined in accordance with the applicable provisions of this Agreement. Buyer shall, and shall cause its Scheduling Coordinator to, provide Seller with all reasonable access (including, in real time, to the maximum extent reasonably possible) to any records, including invoices or settlement data from the CAISO, forecast data and other information, all as may be necessary from time to time for Seller to prepare and verify the accuracy of all invoices.
8.2 Payment. Buyer shall make payment to Seller for Product by wire transfer or ACH payment to the bank account provided on each monthly invoice. Buyer shall pay undisputed invoice amounts within twenty-five (25) days after receipt of the invoice, or the end of the prior monthly delivery period, whichever is later. If such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on the 3-Month Secured Overnight Financing Rate (SOFR) rate (or a successor rate mutually agreed to by the Parties) published on the date of the invoice in The Wall Street Journal, or, if The Wall Street Journal is not published on that day, the next succeeding date of publication, plus two percent (2%) (the “Interest Rate”). If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day.
8.3 Books and Records. To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least five (5) years or as otherwise required by Law. Upon five (5) Business Days’ Notice to the other Party, either Party shall be granted access to the accounting books and records within the possession or control of the other Party pertaining to all invoices generated pursuant to this Agreement. Seller acknowledges that in accordance with AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 45 California Government Code Section 8546.7, Seller may be subject to audit by the California State Auditor with regard to Seller’s performance of this Agreement because the compensation under this Agreement exceeds Ten Thousand Dollars ($10,000).
8.4 Payment Adjustments; Billing Errors. Payment adjustments shall be made if Buyer or Seller discovers there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section 8.5 or an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO; provided, however, that there shall be no adjustments to prior invoices based upon meter inaccuracies. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment.
If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.2, accruing from the date on which the adjusted amount should have been due.
8.5 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned via adjustments in accordance with Section 8.4. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.5 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.
8.6 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product and Deemed Delivered Energy during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including any related damages calculated pursuant to Exhibits B, G and P, interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.
8.7 Seller’s Development Security. To secure its obligations under this Agreement, Seller delivered the Development Security to Buyer within thirty (30) days of the Original Effective Date. Seller shall maintain the Development Security in full force and effec Upon the earlier of (i) Seller’s delivery of the Performance Security, or (ii) sixty AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 46 (60) days after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement. Provided that no Event of Default has occurred and is continuing with respect to Seller, Seller may replace Development Security or change the form of Development Security to another form of Development Security from time to time upon reasonable prior written notice to Buyer.
8.8 Seller’s Performance Security. To secure its obligations under this Agreement, Seller shall deliver Performance Security to Buyer on or before the Commercial Operation Date.
Seller shall maintain the Performance Security in full force and effect until the following have occurred: (A) the Delivery Term has expired or terminated early; and (B) all payment obligations of the Seller then due and payable under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Performance Security not allocated to invoiced but unpaid amounts pursuant to this Section 8.8. Provided that no Event of Default has occurred and is continuing with respect to Seller, Seller may replace Performance Security or change the form of Performance Security to another form of Performance Security from time to time upon reasonable prior written notice to Buyer.
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest (“Security Interest”) in, and lien on (and right to net against), and assignment of the Development Security, Performance Security, any other cash collateral and cash equivalent collateral posted pursuant to Sections 8.7 and 8.8 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s Security Interest in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.
Upon or any time after the occurrence of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Development Security or Performance Security, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.9):
(a) Exercise any of its rights and remedies with respect to the Development Security and Performance Security, including any such rights and remedies under Law then in effect;
(b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Development Security or Performance Security; and (c) Liquidate all Development Security or Performance Security (as applicable) then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 47 Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller’s obligations under this Agreement (Seller remains liable for any amounts owing to Buyer after such application), subject to Buyer’s obligation to return any surplus proceeds remaining after these obligations are satisfied in full.
8.10 Seller’s Financial Statements. In the event a Guaranty is provided as Performance Security in lieu of cash or a Letter of Credit, Seller shall provide to Buyer, or cause the Guarantor to provide to Buyer, unaudited quarterly and annual audited financial statements of the Guarantor (including a balance sheet and statements of income and cash flows), all prepared in accordance with generally accepted accounting principles in the United States, consistently applied.
ARTICLE 9
NOTICES
9.1 Addresses for the Delivery of Notices. Any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the address set forth on Exhibit N or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.
9.2 Acceptable Means of Delivering Notice. Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered as follows: (a) if sent by United States mail with proper first class postage prepaid, three (3) Business Days following the date of the postmark on the envelope in which such Notice was deposited in the United States mail; (b) if sent by a regularly scheduled overnight delivery carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees, the next Business Day after the same is delivered by the sending Party to such carrier; (c) if sent by electronic communication (including email or other electronic means), at the time indicated by the time stamp upon delivery; or (d) if delivered in person, upon receipt by the receiving Party.
Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch information or requests, may be sent by electronic communication and shall be considered delivered upon successful completion of such transmission. In addition, for any Notice sent pursuant to (a), (b) or (d) above, the Party sending such Notice shall send a courtesy copy by email to the email address provided on Exhibit N.
ARTICLE 10
FORCE MAJEURE
10.1 Definition.
(a) “Force Majeure Event” means any act or event that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance. (b) Without limiting the generality of the foregoing, except as set forth below, so long as an event otherwise satisfies the definition of a Force Majeure Event, a Force Majeure AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 48 Event may include an act of God or the elements, including flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; epidemic, including COVID-19; landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; or strikes or other labor difficulties caused or suffered by a Party or any third party. (c) Notwithstanding the foregoing, the term “Force Majeure Event” does not include (i) economic conditions that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including an increase in component costs for any reason, including foreign or domestic tariffs, Buyer’s ability to buy the Product, or any component thereof at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under the Agreement); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above that disables physical or electronic facilities necessary to transfer funds to the payee Party; (iv) a Curtailment Order except to the extent such event is caused by a Force Majeure Event; (v) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Generating Facility or the Storage Facility except to the extent such inability is caused by a Force Majeure Event; or (vi) any equipment failure except if such equipment failure is caused by a Force Majeure Event.
10.2 No Liability If a Force Majeure Event Occurs. Neither Seller nor Buyer shall be liable to the other Party in the event it is prevented from performing its obligations hereunder in whole or in part due to a Force Majeure Event. The Party rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take reasonable actions necessary to promptly remove such inability. Nothing herein shall be construed as permitting that Party to continue to fail to perform after said cause has been removed. Neither Party shall be considered in breach or default of this Agreement if and to the extent that any failure or delay in the Party’s performance of one or more of its obligations hereunder is caused by a Force Majeure Event. Notwithstanding the foregoing, the occurrence and continuation of a Force Majeure Event shall not (a) suspend or excuse the obligation of a Party to make any payments due hereunder, (b) suspend or excuse the obligation of Seller to achieve the Guaranteed Construction Start Date or the Guaranteed Commercial Operation Date beyond the extensions provided in Exhibit B, or (c) limit Buyer’s right to declare an Event of Default pursuant to Section 11.1(b)(ii) or (iv) and receive a Damage Payment upon exercise of Buyer’s remedies pursuant to Section 11.2.
10.3 Notice. In the event of any delay or nonperformance resulting from a Force Majeure Event, the Party suffering the Force Majeure Event shall (a) promptly notify the other Party in writing of the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance, and (b) promptly notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party; provided, however, that a Party’s failure to give timely Notice shall not affect such Party’s ability to assert that a Force Majeure Event has occurred unless the delay in giving Notice materially prejudices the other Party. The Parties acknowledge and agree that the extent and impact of COVID-19 on the Parties’ performance hereunder may not be immediately or readily AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 49 ascertainable, but that each Party shall promptly notify the other in accordance with this Section
10.3 once any impacts of COVID-19 result in any delay or nonperformance hereunder.
10.4 Termination Following Force Majeure Event. If a Force Majeure Event has occurred after the Commercial Operation Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon written Notice to the other Party; provided, however, that Seller shall be entitled to up to an additional six (6) additional months to remedy the Force Majeure Event if (a) Seller has been unable to remedy the Force Majeure Event within the original twelve (12) month period despite exercising diligent efforts and (b) Seller provides to Buyer prior to the expiration of the original twelve (12) month period (i) a detailed plan reasonably acceptable to an independent, professional engineer selected by Buyer, licensed in the State of California, that explains how Seller will restore the Facility, (ii) a certificate from a Licensed Professional Engineer attesting that the Facility could not reasonably have been restored to operational status within the original twelve (12) month period but is reasonably likely to be restored to operational status within the additional six (6) month period by Seller’s execution of the plan described in Section 10.4(b)(i), (iii) detailed monthly reports (due no later than the 15th day of each month) describing the progress of Seller’s efforts to remedy the Force Majeure Event during the prior month, and (iv) Seller continues to make reasonable progress in implementing the detailed plan provided to Buyer, or in otherwise resolving the Force Majeure Event. Upon any such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.1(b), and Buyer shall promptly return to Seller any Performance Security then held by Buyer, less any amounts drawn in accordance with this Agreement.
ARTICLE 11
DEFAULTS; REMEDIES; TERMINATION
11.1 Events of Default. An “Event of Default” shall mean, (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof (or such longer additional period, not to exceed an additional thirty (30) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) day period despite exercising commercially reasonable efforts); (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default set forth in this Section 11.1; and except for (1) failure to achieve Deliverability Status by the RA Guarantee Date, the exclusive remedies for which are set forth in Section 3.8, (2) failures related AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 50 to the Adjusted Energy Production that do not trigger the provisions of Sections 11.1(b)(v),
11.1(b)(vii) and 11.1(b)(viii), the exclusive remedies for which are set forth in Section 4.7; and (3) failures related to the Monthly Storage Availability that do not trigger the provisions of Section
11.1(b)(vi), the exclusive remedies for which are set forth in Section 4.8) and such failure is not remedied within thirty (30) days after Notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) day period despite exercising commercially reasonable efforts); (iv) such Party becomes Bankrupt;
(v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Article 14; or
(vi) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party. (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
(i) if at any time, Seller delivers or attempts to deliver electric energy to the Delivery Point for sale under this Agreement that was not generated or discharged by the Facility;
(ii) the failure by Seller to achieve Commercial Operation of the Guaranteed Commercial Operation Date;
(iii) if not remedied within ten (10) days after Notice thereof, the failure by Seller to deliver a Remedial Action Plan required under Section 2.4; (iv) the failure by Seller to achieve the Construction Start Date of the Guaranteed Construction Start Date;
(v) if, in any consecutive six (6) month period, the Adjusted Energy Production amount (calculated in accordance with Exhibit G) for such period is not at least ten percent (10%) of the Expected Energy amount for such period based on the most recent Average Expected Energy Report provided by Seller, and Seller fails to either (x) demonstrate to Buyer’s reasonable satisfaction, within ten (10) Business Days after Notice from Buyer, a legitimate reason for the failure to meet the ten percent (10%) minimum, or (y) deliver to Buyer within ten (10) Business Days after Notice from Buyer a plan or report developed by Seller that describes the cause of the failure to meet the ten percent (10%) and the actions that Seller has taken, is taking, or proposes to take in an effort to cure such condition along with the written confirmation of a Licensed Professional Engineer that such plan or report is in accordance with Prudent Operating Practices and capable of cure within a reasonable period of time, not to exceed one-hundred eighty (180) days;
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 51 (vi) if, in any two (2) consecutive Contract Years during the Delivery Term, the average Monthly Storage Availability is, in each Contract Year, (vii) if, beginning in the second Contract Year, the Adjusted Energy Production amount is not at least of the Expected Energy amount in any Contract Year;
(viii) if, in any two (2) consecutive Contract Years during the Delivery Term, the Adjusted Energy Production amount is not at least of the Expected Energy amount in each Contract Year;
(ix) if, Seller fails to maintain an average Efficiency Rate of at least over a rolling 18-month period;
(x) if, Seller fails to maintain a Storage Capacity equal to at least of the Storage Contract Capacity for more than three hundred sixty (360) days;
provided that, with respect to Sections 11.1(b)(v)-(x), there shall be no Event of Default by Seller if the reason that the Monthly Storage Availability, Adjusted Energy Production, Efficiency Rate or Storage Capacity was not at least equal to the percentages set forth in Sections
11.1(b)(v)-(x) is due to (x) major equipment failure that cannot be reasonably replaced and appropriately permitted within six (6) months, so long as such failure was not due to the negligence of Seller and Seller has taken reasonable actions necessary to cure such major equipment failure (including, but not limited to, placing an order for replacement equipment) or (y) a Force Majeure Event;
(xi) failure by Seller to satisfy the collateral requirements pursuant to Sections 8.7 or 8.8 after Notice and expiration of the cure periods set forth therein; (xii) with respect to any Guaranty provided for the benefit of Buyer, the failure by Seller to provide for the benefit of Buyer (1) cash, (2) a replacement Guaranty from a different Guarantor meeting the criteria set forth in the definition of Guarantor, or (3) a replacement Letter of Credit from an issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in the amount required hereunder within ten (10) Business Days after Seller receives Notice of the occurrence of any of the following events:
(A) if any representation or warranty made by the Guarantor in connection with this Agreement is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof; (B) the failure of the Guarantor to make any payment required or to perform any other material covenant or obligation in any Guaranty; AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 52 (C) the Guarantor becomes Bankrupt;
(D) the Guarantor shall fail to meet the criteria for an acceptable Guarantor as set forth in the definition of Guarantor;
(E) the failure of the Guaranty to be in full force and effect (other than in accordance with its terms) prior to the indefeasible satisfaction of all obligations of Seller hereunder; or
(F) the Guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of any Guaranty; or (xiii) with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer (1) cash, (2) a substitute Letter of Credit from a different issuer meeting the criteria set forth in the definition of Letter of Credit, or (3) a replacement Guaranty from a Guarantor meeting the criteria set forth in the definition of Guarantor, in each case, in the amount required hereunder within fifteen (15) Business Days after Seller receives Notice of the occurrence of any of the following events:
(A) the issuer of the outstanding Letter of Credit shall fail to maintain a Credit Rating of at least A- by S&P or A3 by Moody’s; (B) the issuer of such Letter of Credit becomes Bankrupt; (C) the issuer of the outstanding Letter of Credit shall fail to comply with or perform its obligations under such Letter of Credit and such failure shall be continuing after the lapse of any applicable grace period permitted under such Letter of Credit;
(D) the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit; (E) the issuer of the outstanding Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit;
(F) such Letter of Credit fails or ceases to be in full force and effect at any time; or
(G) Seller shall fail to renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit and as provided in accordance with this Agreement, and in no event less than forty-five (45) days prior to the expiration of the outstanding Letter of Credit.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 53 11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (“Non-Defaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“Early Termination Date”) that terminates this Agreement (the “Terminated Transaction”) and ends the Delivery Term effective as of the Early Termination Date;
(b) to accelerate all amounts owing between the Parties, and to collect as liquidated damages (i) the Damage Payment (in the case of an Event of Default by Seller occurring before the Commercial Operation Date, including an Event of Default under Section 11.1(b)(ii) or
11.1(b)(iv)) or (ii) the Termination Payment calculated in accordance with Section 11.3 below (in the case of any other Event of Default by either Party); (c) to withhold any payments due to the Defaulting Party under this Agreement; (d) to suspend performance; or
(e) to exercise any other right or remedy available at law or in equity, including specific performance or injunctive relief, except to the extent such remedies are expressly limited under this Agreement;
provided, that payment by the Defaulting Party of the Damage Payment or Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Party’s sole and exclusive remedy for any Terminated Transaction and the Event of Default related thereto.
11.3 Termination Payment. The Termination Payment (“Termination Payment”) for a Terminated Transaction shall be the aggregate of all Settlement Amounts plus any or all other amounts due to the Non-Defaulting Party (as of the Early Termination Date) minus any and all other amounts due from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information. The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages. Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (a) the actual damages that the Non-Defaulting Party would incur in connection with a Terminated Transaction would be difficult or impossible to predict with certainty, (b) the Damage Payment or Termination Payment described in Section 11.2 or this Section 11.3 (as applicable) is a reasonable and appropriate approximation of such damages, and (c) the Damage Payment or Termination Payment described in Section 11.2 or this Section 11.3 (as applicable) is the exclusive remedy of the Non-Defaulting Party in connection with a Terminated Transaction but shall not otherwise act to limit any of the Non-Defaulting Party’s rights or remedies if the Non-Defaulting AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 54 Party does not elect a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.
11.4 Notice of Payment of Termination Payment. As soon as practicable after a Terminated Transaction, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Damage Payment or Termination Payment and whether the Termination Payment is due to or from the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for such calculation.
The Termination Payment shall be made to or from the Non-Defaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.
11.5 Disputes with Respect to Termination Payment. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, the Defaulting Party shall, within five (5) Business Days of receipt of the Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the Termination Payment shall be determined in accordance with Article 15.
11.6 Rights and Remedies Are Cumulative. Except where an express and exclusive remedy or measure of damages is provided, the rights and remedies of a Party pursuant to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
ARTICLE 12
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.
12.1 No Consequential Damages. EXCEPT TO THE EXTENT PART OF AN
EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, OR PART OF AN ARTICLE 16 INDEMNITY CLAIM, OR INCLUDED IN A LIQUIDATED DAMAGES
CALCULATION, OR ARISING FROM FRAUD OR INTENTIONAL
MISREPRESENTATION, NEITHER PARTY SHALL BE LIABLE TO THE OTHER OR ITS
INDEMNIFIED PERSONS FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT, OR
CONSEQUENTIAL DAMAGES, OR LOSSES OR DAMAGES FOR LOST REVENUE OR
LOST PROFITS, WHETHER FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 55 TO DIRECT DAMAGES ONLY. ON AND BEFORE THE SIXTH ANNIVERSARY OF THE
COMMERCIAL OPERATION DATE, THE VALUE OF ANY TAX BENEFITS, DETERMINED ON AN AFTER-TAX BASIS, LOST DUE TO BUYER’S DEFAULT (WHICH
SELLER HAS NOT BEEN ABLE TO MITIGATE AFTER USE OF REASONABLE EFFORTS)
AND AMOUNTS DUE IN CONNECTION WITH THE RECAPTURE OF ANY RENEWABLE ENERGY INCENTIVES, IF ANY, SHALL BE DEEMED TO BE DIRECT DAMAGES.
12.2 Waiver and Exclusion of Other Damages. EXCEPT AS EXPRESSLY SET
FORTH HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND
MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF LIABILITY CONTAINED IN
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF
CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.
FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE
REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR
MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 3.8, 4.7, 4.8, 11.2 AND 11.3, AND AS
PROVIDED IN EXHIBIT B, EXHIBIT G, AND EXHIBIT P THE PARTIES ACKNOWLEDGE
THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT
OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT, AND THAT
THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. IT IS THE INTENT OF THE PARTIES THAT THE
LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES
BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING
THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.
THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES AND THE
EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE REMEDY FOR THE
BREACH BY THE OTHER OF THE TERMS OF THIS AGREEMENT, AND EACH PARTY
WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE WITH RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 56 ARTICLE 13
REPRESENTATIONS AND WARRANTIES; AUTHORITY
13.1 Seller’s Representations and Warranties. As of the Original Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability company, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and is qualified to conduct business in the state of California and each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller. (b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Seller’s performance under this Agreement. The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary limited liability company action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller. (c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) The Facility is located in the State of California. (f) Seller will be responsible for obtaining all permits necessary to construct and operate the Facility and Seller or an Affiliate will be the applicant on any CEQA documents. (g) Seller represents and warrants that it has not and will not knowingly utilize equipment or resources for the construction, operation or maintenance of the Facility that rely on work or services exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily (“Forced Labor”). The Parties acknowledge that pursuant to the business advisory jointly issued by the U.S. Departments of State, Treasury, Commerce and Homeland Security on July 1, 2020, equipment or resources sourced from the Xinjiang region of China are presumed to involve Forced Labor.
13.2 Buyer’s Representations and Warranties. As of the Original Effective Date, Buyer represents and warrants as follows:
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 57 (a) Buyer is a joint powers authority and a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations and orders of the California Public Utilities Commission, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All Persons making up the governing body of Buyer are the elected or appointed incumbents in their positions and hold their positions in good standing in accordance with the Joint Powers Agreement and other Law.
(b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, the documents of formation of Buyer or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Buyer is a party or by which any of its property is bound.
(d) This Agreement has been duly executed and delivered by Buyer. This Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Buyer warrants and covenants that with respect to its contractual obligations under this Agreement, it will not claim and affirmatively waives immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (1) suit, (2) jurisdiction of court (provided that such court is located within a venue permitted in law and under the Agreement), (3) relief by way of injunction, order for specific performance or recovery of property, (4) attachment of assets, or (5) execution or enforcement of any judgment; provided, however that nothing in this Agreement shall waive the obligations or rights set forth in the California Tort Claims Act (Government Code Section 810 et seq.). (f) Buyer is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California.
13.3 General Covenants. Each Party covenants that commencing on the Original Effective Date and continuing throughout the Contract Term:
(a) It shall continue to be duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and to be qualified to conduct business in AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 58 California and each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition;
(b) It shall maintain (or obtain from time to time as required) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and (c) It shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and in material compliance with any Law.
13.4 Prevailing Wage. Seller shall comply with all federal, state and local Laws, statutes, ordinances, rules and regulations, and the orders and decrees of any courts or administrative bodies or tribunals, including, without limitation employment discrimination laws and prevailing wage laws. Seller, through its contractors, is required to enter into project labor agreements with participating unions of similar scope and requirements as set forth under the terms of that certain Letter Agreement between Buyer and IBEW Local 302, dated June 20, 2017, and attached project labor agreement (collectively, the “PLA”). The PLA applies to “Covered Work” (as defined therein) for solar photovoltaic and associated energy storage projects for which Buyer is the power supply offtaker. As a condition precedent to commencement of the Delivery Term, Seller must certify that it complied with the foregoing union labor requirements, and be able to demonstrate, upon request, compliance with this requirement via copies of executed PLAs or similar agreements, a certified payroll system and such other documentation reasonably requested by Buyer, including pursuant to an audit. In addition, Seller shall undertake the community benefit activities set forth in Exhibit R.
13.5 Diversity Reporting. Seller agrees to, or cause its contractors to, complete the Supplier Diversity and Labor Practices questionnaire attached as Exhibit S, or a similar questionnaire, at the reasonable request of Buyer and to comply with similar regular reporting requirements related to diversity and labor practices from time to time.
ARTICLE 14
ASSIGNMENT
14.1 General Prohibition on Assignments. Except as provided in this Article 14, neither Party may voluntarily assign this Agreement or its rights or obligations under this Agreement, without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Except as provided in this Article 14, any Change of Control of Seller or direct or indirect change of control of Buyer (whether voluntary or by operation of law) will be deemed an assignment and will require the prior written consent of the other Party, which consent shall not be unreasonably withheld. Any assignment made in violation of the conditions to assignment set out in this Article 14 shall be null and void. Seller shall be responsible for Buyer’s reasonable costs associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement, including without limitation reasonable attorneys’ fees.
14.2 Collateral Assignment. Subject to the provisions of this Section 14.2, Seller has the right to assign this Agreement as collateral for any financing or refinancing of the Facility. In connection with any financing or refinancing of the Facility by Seller, Buyer shall in good faith AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 59 work with Seller and Lenders to agree upon a consent to collateral assignment of this Agreement (“Collateral Assignment Agreement”). Each Collateral Assignment Agreement must be in form and substance agreed to by Buyer, Seller and the applicable Lender, such agreement not to be unreasonably withheld. Buyer will not be subject to obligations under more than one Collateral Assignment Agreement at any time. Each Collateral Assignment Agreement must include, among others, the following provisions unless otherwise agreed to by Buyer, Seller and the applicable Lender:
(a) Buyer shall give notice of an Event of Default by Seller to the Person(s) to be specified by Lender in the Collateral Assignment Agreement before exercising its right to terminate this Agreement as a result of such Event of Default; provided that such notice shall be provided to Lender at the time such notice is provided to Seller and any additional cure period of Lender agreed to in the Collateral Assignment Agreement shall not commence until Lender has received notice of such Event of Default;
(b) Lender will have the right to cure an Event of Default on behalf of Seller if Lender sends a written notice to Buyer before the later of (i) the expiration of any cure period, and (ii) five (5) Business Days after Lender’s receipt of notice of such Event of Default from Buyer, indicating Lender’s intention to cure. Lender must remedy or cure such Event of Default within the cure period under this Agreement and any additional cure periods agreed in the Collateral Assignment Agreement up to a maximum of ninety (90) days (or, in the event of a bankruptcy of Seller or any foreclosure or similar proceeding if required by Lender to cure any Event of Default, an additional reasonable period of time to complete such proceedings and effect such cure not to exceed one hundred eighty (180) days without the written consent of Buyer, which consent shall not be unreasonably withheld), provided that if Lender is prohibited by any court order or bankruptcy or insolvency proceedings from curing the Event of Default or from commencing or prosecuting foreclosure proceedings, the foregoing time periods shall be extended by the period of such prohibition;
(c) Following an Event of Default by Seller under this Agreement, Buyer may require Seller (or Lender, if Lender has provided the notice set forth in subsection (b) above) to provide to Buyer a report concerning:
(i) The status of efforts by Seller or Lender to develop a plan to cure the Event of Default;
(ii) Impediments to the cure plan or its development;
(iii) If a cure plan has been adopted, the status of the cure plan’s implementation (including any modifications to the plan as well as the expected timeframe within which any cure is expected to be implemented); and
(iv) Any other information which Buyer may reasonably require related to the development, implementation and timetable of the cure plan.
Seller or Lender must provide the report to Buyer within ten (10) Business Days after Notice from Buyer requesting the report. Buyer will have no further right to require the report with respect to a particular Event of Default after that Event of Default has been cured; AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 60 (d) Lender will have the right to consent before any termination of this Agreement which does not arise out of an Event of Default; (e) Lender will receive prior notice of and the right to approve material amendments to this Agreement, which approval will not be unreasonably withheld, delayed or conditioned;
(f) If this Agreement is transferred to Lender pursuant to subsection (b) above, Lender must assume all of Seller’s obligations arising under this Agreement on and after the date of such assumption; provided, before such assumption, if Buyer advises Lender that Buyer will require that Lender cure (or cause to be cured) any Event of Default existing as of the transfer date in order to avoid the exercise by Buyer (in its sole discretion) of Buyer’s right to terminate this Agreement with respect to such Event of Default, then Lender at its option, and in its sole discretion, may elect to either:
(i) Cause such Event of Default to be cured (other than any Events of Default which relate to Seller’s bankruptcy or similar insolvency proceedings, to representations and warranties made by Seller or to Seller’s failure to perform obligations under other agreements, or which are otherwise personal to Seller), or
(ii) Not assume this Agreement.
(g) If Lender elects to transfer this Agreement, then Lender must cause the transferee to assume all of Seller’s obligations arising under this Agreement arising after the date of such assumption as a condition of the sale or transfer. Such sale or transfer may be made only to an entity that meets the definition of Permitted Transferee; (h) Subject to Lender’s cure of any Events of Defaults under the Agreement in accordance with Section 14.2(f), if (i) this Agreement is rejected in Seller’s Bankruptcy or otherwise terminated in connection therewith Lender or its designee shall have the right to elect within ninety (90) days after such rejection or termination, to enter into a replacement agreement with Buyer having substantially the same terms as this Agreement for the remaining term thereof, and, promptly after Lender’s written request, Buyer must enter into such replacement agreement with Lender or Lender’s designee, or (ii) if Lender or its designee, directly or indirectly, takes possession of, or title to, the Facility after any such rejection or termination of this Agreement, promptly after Buyer’s written request, Lender must itself or must cause its designee to promptly enter into a new agreement with Buyer having substantially the same terms as this Agreement for the remaining term thereof, provided that in the event a designee of Lender, directly or indirectly, takes possession of, or title to, the Facility (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure), if such designee is not an entity that meets the definition of Permitted Transferee then such designee shall be subject to the prior written approval of Buyer, such approval not to be unreasonably withheld; and
(i) The Parties shall negotiate any Collateral Assignment Agreement in good faith, including variations to the provisions set forth in this Section 14.2, and to the extent the Collateral Assignment Agreement executed by Buyer and Lender varies from such provisions, the terms of such Collateral Assignment Agreement shall be controlling. In addition, Buyer shall AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 61 cooperate with Seller or any Lender to execute or arrange for delivery of estoppels reasonably requested by Seller or Lender.
14.3 Permitted Assignment by Seller. Seller may, without the prior written consent of Buyer, transfer or assign this Agreement, including through a Change of Control, (x) to an Affiliate of Seller or (y)
14.4 Buyer Limited Assignment. Notwithstanding anything to the contrary, Buyer may make a limited assignment to an entity (“Limited Assignee”) that has or provides a parent guaranty, in form and substance reasonably acceptable to Seller, from an entity that has creditworthiness equal to or better than the creditworthiness of Buyer (measured as of the Original Effective Date) of Buyer’s right to receive Product (which shall not be for retail sale) and its obligation to make payments to Seller, which assignment shall be expressly subject to Limited Assignee’s timely payment of amounts due under this Agreement, at any time upon not less than thirty (30) days’ Notice by delivering a written request for such assignment, which request must include a proposed assignment agreement substantially in the form attached to this Agreement as Exhibit V, with the blanks in such form completed in Buyer’s sole discretion. Provided that Buyer AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 62 delivers a proposed assignment agreement complying with the previous sentence, Seller agrees to (i) comply with Limited Assignee’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 Limited Assignee and Buyer and Seller’s ability to make the representations and warranties contained therein. Limited Assignee and Buyer shall comply with all reasonable requests received by any Lender in connection with such limited assignment, including providing any requested acknowledgments in any Collateral Assignment Agreement.
ARTICLE 15
DISPUTE RESOLUTION
15.1 Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of Law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. [STC 17]. The Parties agree that any suit, action or other legal proceeding by or against any party (or its Affiliates or designees) with respect to or arising out of this Agreement shall be brought in the federal courts of the United States or the courts of the State of California sitting in San Francisco County, California.
15.2 Dispute Resolution. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a written Notice from either Party identifying such dispute, the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either thirty (30) days of initiating such discussions, or within forty (40) days after Notice of the dispute, the Parties shall submit the dispute to mediation prior to seeking any and all remedies available to it at Law in or equity. The Parties will cooperate in selecting a qualified neutral mediator selected from a panel of neutrals and in scheduling the time and place of the mediation as soon as reasonably possible, but in no event later than thirty (30) days after the request for mediation is made. The Parties agree to participate in the mediation in good faith and to share the costs of the mediation, including the mediator’s fee, equally, but such shared costs shall not include each Party’s own attorneys’ fees and costs, which shall be borne solely by such Party. If AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 63 the mediation is unsuccessful, then either Party may seek any and all remedies available to it at law or in equity, subject to the limitations set forth in this Agreement.
ARTICLE 16
INDEMNIFICATION
16.1 Indemnification. Each Party (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless the other Party and its Affiliates, directors, officers, attorneys, employees, representatives and agents (collectively, the “Indemnified Party”) from and against all third-party claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees and expert witness fees), howsoever described, to the extent arising out of, resulting from, or caused by (i) a violation of applicable Laws, (ii) negligent or tortious acts, errors, or omissions or (iii) intentional acts or willful misconduct in each case by or of the Indemnifying Party, its Affiliates, directors, officers, employees, or agents, excepting only such claims, demands, losses, liabilities, penalties and expenses to the extent solely caused by the willful misconduct or gross negligence of a member of the Indemnified Party (collectively, “Indemnifiable Losses”).
16.2 Claim Notice.
(a) Notice of Claim. Subject to the terms of this Agreement and upon obtaining knowledge of an Indemnifiable Loss for which it is entitled to indemnity under this Article 16, the Indemnified Party will promptly provide Notice to the Indemnifying Party in writing of any damage, claim, loss, liability or expense which Indemnified Party has determined has given or could give rise to an Indemnifiable Loss under Section 16.1 (“Claim”). The Notice is referred to as a “Notice of Claim.” A Notice of Claim will specify, in reasonable detail, the facts known to the Indemnified Party regarding the Indemnifiable Loss. (b) Failure to Provide Notice. A failure to give timely Notice or to include any specified information in any Notice as provided in this Section 16.2 will not affect the rights or obligations of any Party hereunder except and only to the extent that, as a result of such failure, any Party which was entitled to receive such Notice was deprived of its right to recover any payment under its applicable insurance coverage or was otherwise materially damaged as a direct result of such failure and, provided further, the Indemnifying Party is not obligated to indemnify the Indemnified Party for the increased amount of any Indemnifiable Loss which would otherwise have been payable to the extent that the increase resulted from the failure to deliver timely a Notice of Claim.
16.3 Defense of Claims. If, within ten (10) days after giving a Notice of Claim regarding a Claim to the Indemnifying Party pursuant to Section 16.2(a), the Indemnified Party receives Notice from such Indemnifying Party that the Indemnifying Party has elected to assume the defense of such Claim, the Indemnifying Party will not be liable for any legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof; provided, however, that if the Indemnifying Party fails to take reasonable steps necessary to defend diligently such Claim within ten (10) days after receiving Notice from the Indemnified Party that the Indemnified Party believes the Indemnifying Party has failed to take such steps, or if the Indemnifying Party has not undertaken fully to indemnify the Indemnified Party in respect of all Indemnifiable Losses relating to the matter, the Indemnified Party may assume its own defense, AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 64 and the Indemnifying Party will be liable for all reasonable costs or expenses, including attorneys’ fees, paid or incurred in connection therewith. Without the prior written consent of the Indemnified Party, the Indemnifying Party will not enter into any settlement of any Claim which would lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder; provided, however, that the Indemnifying Party may accept any settlement without the consent of the Indemnified Party if such settlement provides a full release to the Indemnified Party and no requirement that the Indemnified Party acknowledge fault or culpability. If a firm offer is made to settle a Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder and the Indemnifying Party desires to accept and agrees to such offer, the Indemnifying Party will give Notice to the Indemnified Party to that effect. If the Indemnified Party fails to consent to such firm offer within ten (10) calendar days after its receipt of such Notice, the Indemnified Party may continue to contest or defend such Claim and, in such event, the maximum liability of the Indemnifying Party to such Claim will be the amount of such settlement offer, plus reasonable costs and expenses paid or incurred by the Indemnified Party up to the date of such Notice.
16.4 Rights and Remedies are Cumulative. Except for express remedies already provided in this Agreement, the rights and remedies of a Party pursuant to this Article 16 are cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
ARTICLE 17
INSURANCE
17.1 Insurance.
(a) General Liability. Seller shall maintain, or cause to be maintained at its sole expense, (i) commercial general liability insurance, including products and completed operations and personal injury insurance, in a minimum amount of Two Million Dollars ($2,000,000) per occurrence, and an annual aggregate of not less than Five Million Dollars ($5,000,000), specifically covering Seller’s obligations under this Agreement and including Buyer as an additional insured; and (ii) an umbrella insurance policy in a minimum limit of liability of Five Million Dollars ($5,000,000). Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest provisions.
(b) Employer’s Liability Insurance. Employers’ Liability insurance shall not be less than One Million Dollars ($1,000,000) for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the One Million Dollar ($1,000,000) policy limit will apply to each employee.
(c) Workers Compensation Insurance. Seller, if it has employees, shall also maintain at all times during the Contract Term workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of California Law. (d) Business Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with limits of One AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 65 Million Dollars ($1,000,000) per occurrence. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement.
(e) Construction All-Risk Insurance. Seller shall maintain or cause to be maintained during the construction of the Generating Facility prior to the Commercial Operation Date, construction all-risk form property insurance covering the Facility during such construction periods, and naming the Seller (and Lender if any) as the loss payee. (f) Contractor’s Pollution Liability. Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date, Pollution Legal Liability Insurance in the amount of Two Million Dollars ($2,000,000) per occurrence and in the aggregate, naming Seller (and Lender if any) as additional named insured. (g) Contractor Insurance. Seller shall require the contractor under its engineering, procurement, and construction contract for the Facility to carry (i) comprehensive general liability insurance with a combined single limit of coverage not less than One Million Dollars ($1,000,000); (ii) workers’ compensation insurance and employers’ liability coverage in accordance with applicable requirements of Law; and (iii) business auto insurance for bodily injury and property damage with limits of One Million Dollars ($1,000,000) per occurrence. The contractor shall name Seller as an additional insured to insurance carried pursuant to clauses (g)(i) and (g)(iii). The contractor shall provide a primary endorsement and a waiver of subrogation to Seller for the required coverage pursuant to this Section 17.1(g). (h) Evidence of Insurance. Within thirty (30) days after execution of the Agreement and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such coverage. These certificates shall specify that Buyer shall be given at least ten (10) days prior Notice by Seller in the event of any material modification, cancellation or termination of coverage. Such insurance shall be primary coverage without right of contribution from any insurance of Buyer.
ARTICLE 18
CONFIDENTIAL INFORMATION
18.1 Definition of Confidential Information. “Confidential Information” means information, whether oral or written, that is delivered by Seller to Buyer or by Buyer to Seller, including (a) pricing and other commercially-sensitive or proprietary information provided to Buyer in connection with the terms and conditions of, and proposals and negotiations related to, this Agreement, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement. Notwithstanding the foregoing, AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 66 the Parties acknowledge and agree that Buyer intends to make publicly available a version of this Agreement with certain commercially sensitive provisions removed or redacted. The Parties agree to work in good faith to agree on the scope of such redactions and Buyer’s public disclosure of this Agreement, redacted as agreed between the Parties, shall be in accordance with the requirements of Law and this Article 18.
18.2 Duty to Maintain Confidentiality. Confidential Information will retain its character as Confidential Information but may be disclosed by the recipient (the “Receiving Party”) if and to the extent such disclosure is required (a) to be made by any requirements of Law, (b) pursuant to an order of a court or (c) in order to enforce this Agreement. If the Receiving Party becomes legally compelled (by interrogatories, requests for information or documents, subpoenas, summons, civil investigative demands, or similar processes or otherwise in connection with any litigation or to comply with any applicable Law, order, regulation, ruling, regulatory request, accounting disclosure rule or standard or any exchange, control area or independent system operator request or rule) to disclose any Confidential Information of the disclosing Party (the “Disclosing Party”), Receiving Party shall provide Disclosing Party with prompt notice so that Disclosing Party, at its sole expense, may seek an appropriate protective order or other appropriate remedy. If the Disclosing Party takes no such action after receiving the foregoing notice from the Receiving Party, the Receiving Party is not required to defend against such request and shall be permitted to disclose such Confidential Information of the Disclosing Party, with no liability for any damages that arise from such disclosure. Each Party hereto acknowledges and agrees that information and documentation provided in connection with this Agreement may be subject to the California Public Records Act (Government Code Section 6250 et seq.). The provisions of this Article 18 shall survive and shall continue to be binding upon the Parties for period of one (1) year following the date of termination of this Agreement.
18.3 Irreparable Injury; Remedies. Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party, and expressly acknowledges that monetary damages would be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth herein. Accordingly, Receiving Party acknowledges that any such breach or threatened breach will cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of proving actual damages.
18.4 Disclosure to Lenders, Etc. Notwithstanding anything to the contrary in this Article 18, Confidential Information may be disclosed by Seller to any actual or potential Lender or investor or any of its Affiliates, and Seller’s actual or potential agents, consultants, contractors, or trustees, or by Buyer to any actual or potential Limited Assignee, so long as the Person to whom Confidential Information is disclosed either is bound by similarly restrictive confidentiality obligations as those contained in this Agreement, or agrees in writing to be bound by the confidentiality provisions of this Article 18 to the same extent as if it were a Party.
18.5 Press Releases. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have consented upon the contents of any such public statement. A Party’s consent shall not be AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 67 unreasonably withheld, conditioned or delayed.
ARTICLE 19
MISCELLANEOUS
19.1 Entire Agreement; Integration; Exhibits. This Agreement, together with the Cover Sheet and Exhibits attached hereto constitutes the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. The headings used herein are for convenience and reference purposes only. In the event of a conflict between the provisions of this Agreement and those of the Cover Sheet or any Exhibit, the provisions of first the Cover Sheet, and then this Agreement shall prevail, and such Exhibit shall be corrected accordingly. This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof.
19.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, that, for the avoidance of doubt, this Agreement may not be amended by electronic mail communications.
19.3 No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) or, to the extent set forth herein, any Lender.
19.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
19.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC 68 absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956), and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Changes proposed by a non-Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under applicable Law.
19.7 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
19.8 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution and electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party, and, if delivery is made by electronic format, the executing Party shall promptly deliver, via overnight delivery, a complete original counterpart that it has executed to the other Party, but this Agreement shall be binding on and enforceable against the executing Party whether or not it delivers such original counterpart.
19.9 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
19.10 No Recourse to Members of Buyer. Buyer is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or the employees, directors, officers, consultants or advisors or Buyer or its constituent members, in connection with this Agreement.
19.11 Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a “forward contract” within the meaning of the U.S. Bankruptcy Code, and Buyer and Seller are “forward contract merchants” within the meaning of the U.S. Bankruptcy Code. Each Party further agrees that, for all purposes of this Agreement, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. §366 or another provision of 11 U.S.C. § 101-1532.
19.12 Further Assurances. Each of the Parties hereto agree to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
GOLDEN FIELDS SOLAR IV, LLC,
a Delaware limited liability company
By:
Name:
Title:
MARIN CLEAN ENERGY, a California
joint powers authority
By:
Name:
Title:
Approved as to form:
By:
Name:
Title:
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Site Name: Rosamond South Project
Site includes all or some of the following APNs: See attached Schedule 1. This Agreement is specific to the Site and Seller may change the location of the Site only upon Buyer’s prior written consent, which consent is in Buyer’s sole discretion. Seller shall maintain Site Control throughout the Contract Term and shall provide Buyer with prompt Notice of any change in the status of Seller’s Site Control.
County: Kern County
CEQA Lead Agency: Kern County
Type of Generating Facility: Solar photovoltaic electricity generating facility Type of Storage Facility: A lithium-ion battery energy storage system which is capable of receiving Charging Energy from the Generating Facility and in the form of grid energy; provided, that the Storage Facility shall not receive Charging Energy from any source other than the Generating Facility without the prior written agreement of both Parties, which will not be unreasonably withheld, conditioned or delayed.
Guaranteed Capacity: See definition in Section 1.1.
Storage Contract Capacity: See definition in Section 1.1.
Maximum Facility Output: 100 MW
Maximum Charging Capacity: 92 MW
Maximum Discharging Capacity: 92 MW
Maximum Storage Level: 368 MWh
Operating Restrictions of Storage Facility: See Exhibit Q Interconnection Point: SCE Whirlwind 230 kV
Delivery Point: the Facility Pnode on the CAISO Grid.
PNode: The PNode designated by CAISO for each of the Generating Facility and Storage Facility at the Whirlwind 230 kV substation.
Participating Transmission Owner: Southern California Edison AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit A - 2
Schedule 1
List of APNs
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC
Exhibit B - 1
EXHIBIT B
FACILITY CONSTRUCTION AND COMMERCIAL OPERATION
1. Construction of the Facility.
a. “Construction Start” will occur upon satisfaction of the following: (i) Seller has acquired the applicable regulatory authorizations, approvals and permits required for the commencement of construction of the Facility, (ii) Seller has engaged all contractors and ordered all essential equipment and supplies as, in each case, can reasonably be considered necessary so that physical construction of the Facility may begin and proceed to completion without foreseeable interruption of material duration, and (iii) Seller has executed an engineering, procurement, and construction contract and issued thereunder a full notice to proceed that authorizes the contractor to mobilize to Site and begin physical construction of the Facility at the Site. The date of Construction Start will be evidenced by and subject to Seller’s delivery to Buyer of a certificate substantially in the form attached as Exhibit J hereto, and the date certified therein shall be the “Construction Start Date.” The Seller shall use commercially reasonable efforts to cause Construction Start to occur no later than the Guaranteed Construction Start Date. b. If Construction Start is not achieved by the Guaranteed Construction Start Date, Seller shall pay Construction Delay Damages to Buyer for each day for which Construction Start has not begun after the Guaranteed Construction Start Date.
Construction Delay Damages shall be payable to Buyer by Seller until Seller reaches Construction Start of the Facility. Buyer shall invoice Seller for Construction Delay Damages, if any, accrued during the prior month and, within ten (10) Business Days following Seller’s receipt of such invoice, Seller shall pay Buyer the amount of the Construction Delay Damages set forth in such invoice.
Construction Delay Damages shall be refundable to Seller pursuant to Section 2 b. of this Exhibit B. The Parties agree that Buyer’s receipt of Construction Delay Damages shall be Buyer’s sole and exclusive remedy for Seller’s unexcused delay in achieving the Construction Start Date on or before the Guaranteed Construction Start Date, but shall (x) not be construed as Buyer’s declaration that an Event of Default has occurred under any provision of Section 11.1 and (y) not limit Buyer’s right to declare an Event of Default pursuant to Section 11.1(b)(ii) or 11.1(b)(iv) and receive a Damage Payment upon exercise of Buyer’s default right pursuant to Section 11.2.
2. Commercial Operation of the Facility. “Commercial Operation” means the condition existing when (i) Seller has fulfilled all of the conditions precedent in Section 2.2 of the Agreement and provided Notice from a Licensed Professional Engineer to Buyer substantially in the form of Exhibit H (the “COD Certificate”) and (ii) Seller has notified Buyer in writing that it has provided the required documentation to Buyer and met the conditions for achieving Commercial Operation. The “Commercial Operation Date” shall be the later of (x) ,
or (y) the date on which Commercial Operation is achieved.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit B - 2
a. Seller shall use commercially reasonable efforts to cause Commercial Operation for the Facility to occur by the Guaranteed Commercial Operation Date. Seller shall notify Buyer that it intends to achieve Commercial Operation at least
b. If Seller achieves Commercial Operation for the Facility by the Guaranteed Commercial Operation Date, all Construction Delay Damages paid by Seller shall be refunded to Seller. Seller shall include a request for refund of such Construction Delay Damages with the first invoice to Buyer after Commercial Operation. c. If Seller does not achieve Commercial Operation by the Guaranteed Commercial Operation Date, Seller shall pay Commercial Operation Delay Damages to Buyer for each day after the Guaranteed Commercial Operation Date until the Commercial Operation Date.
but shall (x) not be
construed as Buyer’s declaration that an Event of Default has occurred under any provision of Section 11.1 and (y) not limit Buyer’s right to receive a Damage Payment upon exercise of Buyer’s remedies pursuant to Section 11.2.
3. Termination for Failure to Achieve Commercial Operation. If the Facility has not achieved Commercial Operation after the Guaranteed Commercial Operation Date, Buyer may elect to terminate this Agreement in accordance with Sections 11.1(b)(ii) and 11.2.
4. Extension of the Guaranteed Dates. The Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date shall, subject to notice and documentation requirements set forth below, be automatically extended on a day-for-day basis (the “Development Cure Period”) for the duration of any and all delays arising out of the following circumstances:
a. a Force Majeure Event occurs, including a Force Majeure Event that delays Seller from acquiring all material permits, consents, licenses, approvals or authorizations from any Governmental Authority required for Seller to own, construction, interconnect, operate or maintain the Facility; or
b.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit B - 3
Notwithstanding anything in this Agreement to the contrary, the cumulative extensions granted under Section 4(a) and 4(b) of this Exhibit B under the Development Cure Period shall not exceed , for any reason, including a Force Majeure Event. Notwithstanding the foregoing, no extension under the Development Cure Period shall be given if (i) the delay was the result of Seller’s failure to take all commercially reasonable actions to meet its requirements and deadlines, (ii) Seller failed to provide requested documentation as provided below, or (iii) Seller failed to provide written notice to Buyer as required in the next sentence. Seller shall provide prompt written notice to Buyer of a delay, but in no case more than after Seller became aware of an actual delay affecting the Facility, except that in the case of a delay occurring within of the Expected Commercial Operation Date, or after such date, Seller must provide written notice within seven (7) Business Days of Seller becoming aware of such delay. As used in the preceding sentence, “actual delay” does not include Seller’s receipt of generic notices of potential delays. Upon request from Buyer, Seller shall promptly provide documentation demonstrating to Buyer’s reasonable satisfaction that the delays described above did not result from Seller’s actions or failure to take reasonable actions.
5. Failure to Reach Guaranteed Capacity or Storage Contract Capacity. a. Guaranteed Capacity. If, at Commercial Operation, the Installed PV Capacity is less than one hundred percent (100%) of the Guaranteed Capacity, Seller shall have after the Commercial Operation Date to install
additional capacity or Network Upgrades such that the Installed PV Capacity is equal to (but not greater than) the Guaranteed Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit I-1 hereto specifying the new Installed PV Capacity. If Seller fails to construct the Guaranteed Capacity by such date, Seller shall pay “Capacity Damages” to Buyer, in an amount equal to for each MW
that the Guaranteed Capacity exceeds the Installed PV Capacity, and the Guaranteed Capacity and other applicable portions of the Agreement shall be adjusted accordingly.
b. Storage Contract Capacity. If, at Commercial Operation, the Installed Battery Capacity is less than one hundred percent (100%) of the Storage Contract Capacity, Seller shall have after the Commercial Operation
Date to install additional capacity or Network Upgrades such that the Installed Battery Capacity is equal to (but not greater than) one hundred percent (100%) of the Storage Contract Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit I-2 hereto specifying the new Installed Battery Capacity. If Seller fails to construct the Storage Contract Capacity by such date, Seller shall pay Capacity Damages to Buyer, in an amount equal to for each MW that the Storage Contract
Capacity exceeds the Installed Battery Capacity, and the Storage Contract Capacity and other applicable portions of the Agreement shall be adjusted accordingly.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC
Exhibit C - 1
EXHIBIT C
COMPENSATION
Buyer shall compensate Seller for the Product in accordance with this Exhibit C. (a) Renewable Rate. Buyer shall pay Seller the Renewable Rate for each MWh of Generating Facility Energy plus the amount of Deemed Delivered Energy above the Curtailment Cap, if any, up to .
(b) Excess Contract Year Deliveries Over If, at any point in any Contract Year, the amount of Generating Facility Energy plus the amount of Deemed Delivered Energy above the Curtailment Cap exceeds of the Expected Energy for such Contract Year, the price to be paid for additional Generating Facility Energy or Deemed Delivered Energy shall be equal to the lesser of (a)
(c) Excess Settlement Interval Deliveries. If during any Settlement Interval, Seller delivers Product amounts, as measured by the amount of Facility Energy, in excess of the product of the Guaranteed Capacity and the duration of the Settlement Interval, expressed in hours (“Excess MWh”), then the price applicable to all such Excess MWh in such Settlement Interval shall be Zero Dollars ($0), and if there is a Negative LMP during such Settlement Interval, Seller shall pay to Buyer an amount equal to the absolute value of the Negative LMP times such Excess MWh.
(d) Curtailment Payments. Seller shall receive no compensation from Buyer for (i) Generating Facility Energy or Deemed Delivered Energy during any Curtailment Period and (ii) Deemed Delivered Energy in amounts below the Curtailment Cap. Buyer shall pay for Deemed Delivered Energy above the Curtailment Cap in accordance with paragraphs (a) and (b) of this Exhibit C.
(e) Storage Rate. All Storage Product shall be paid on a monthly basis in an amount equal to (i)
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit C - 2
(f) Liquidated Damages for Failure to Achieve Guaranteed Efficiency Rate. If during any month during the Delivery Term, the Efficiency Rate applicable to such month is less than the Guaranteed Efficiency Rate but greater than the Minimum Efficiency Rate, Seller shall owe liquidated damages to Buyer, which damages shall be calculated by (g) Test Energy. Test Energy is compensated in accordance with Section 3.6. (h) Tax Credits. The Parties agree that neither the Renewable Rate, the Storage Rate nor the Test Energy Rate are subject to adjustment or amendment if Seller fails to receive any Tax Credits, or if any Tax Credits expire, are repealed or otherwise cease to apply to Seller or the Facility in whole or in part, or Seller or its investors are unable to benefit from any Tax Credits.
Except as provided in Section 12.1, Seller shall bear all risks, financial and otherwise, throughout the Contract Term, associated with Seller’s or the Facility’s eligibility to receive Tax Credits or to qualify for accelerated depreciation for Seller’s accounting, reporting or Tax purposes. The obligations of the Parties hereunder, including those obligations set forth herein regarding the purchase and price for and Seller’s obligation to deliver Facility Energy and Product, shall be effective regardless of whether the sale of Facility Energy is eligible for, or receives Tax Credits during the Contract Term. As of the Effective Date, Seller assumes the Facility qualifies for an ITC at an “energy percentage” of To the extent the Facility qualifies for an ITC at an “energy percentage” of greater than Seller shall use commercially reasonable efforts to monetize such increased amount and, if successful, shall attribute of the net impact to the development margin realized by Seller's parent company to Buyer (provided further that Seller shall not be obligated to refinance the Project in order to obtain such benefit). Seller shall provide Buyer with reasonably detailed written documentation of how such amounts were calculated and provide an officer’s certificate attesting to the accuracy of the amounts presented. To the extent Seller is successful in monetizing such excess amount, the Parties shall work in good faith to amend this Agreement or enter into such other agreements to effectuate the foregoing.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit D - 1
EXHIBIT D
SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Buyer as Scheduling Coordinator for the Facility. Upon Initial Synchronization of the Facility to the CAISO Grid, Buyer (or its designated qualified third party) shall be the Scheduling Coordinator and provide Scheduling Coordinator services with the CAISO for the Facility for both the delivery and the receipt of Test Energy and the Product at the Delivery Point.
At least thirty (30) days prior to the Initial Synchronization of the Facility to the CAISO Grid, (i) Seller shall take all actions and execute and deliver to Buyer and the CAISO all documents necessary to authorize or designate Buyer (or Buyer’s designee) as the Scheduling Coordinator for the Facility effective as of the Initial Synchronization of the Facility to the CAISO Grid, and (ii) Buyer shall, and shall cause its designee to, take all actions and execute and deliver to Seller and the CAISO all documents necessary to authorize or designate Buyer or its designee as the Scheduling Coordinator for the Facility effective as of the Initial Synchronization of the Facility to the CAISO Grid. On and after Initial Synchronization of the Facility to the CAISO Grid, Seller shall not authorize or designate any other party to act as the Facility’s Scheduling Coordinator, nor shall Seller perform for its own benefit the duties of Scheduling Coordinator, and Seller shall not revoke Buyer’s authorization to act as the Facility’s Scheduling Coordinator unless agreed to by Buyer. Buyer (as the Facility’s SC) shall submit Schedules to the CAISO in accordance with this Agreement and the applicable CAISO Tariff, protocols and Scheduling practices for Product on a day-ahead, hour-ahead, fifteen-minute market or real time basis, as determined by Buyer. Buyer shall cause its Scheduling Coordinator to reasonably cooperate with Seller during the testing and commissioning of the Facility prior to the Commercial Operation Date. (b) Notices. Buyer (as the Facility’s SC) shall provide Seller with access to a web-based system through which Seller shall submit to Buyer (as the Facility’s SC) and the CAISO all notices and updates required under the CAISO Tariff regarding the Facility’s status, including, but not limited to, all outage requests, forced outages, forced outage reports, clearance requests, or must offer waiver forms. Seller will cooperate with Buyer to provide such notices and updates. If the web-based system is not available, Seller shall promptly submit such information to the personnel designated to receive such information for Buyer (as the Facility’s SC) and the CAISO (i) telephonically for real-time outages (i.e., outages that occur after the CAISO Day-Ahead Market has closed for the operating day) and (ii) by electronic mail for all other outages, notices and updates.
(c) CAISO Costs and Revenues. Except as otherwise set forth below, Buyer (as Scheduling Coordinator for the Facility) shall be responsible for CAISO costs (including penalties, Imbalance Energy costs, and other charges) and shall be entitled to all CAISO revenues (including credits, Imbalance Energy revenues, and other payments), including revenues associated with CAISO dispatches, bid cost recovery, Inter-SC Trade credits, or other credits in respect of the Product Scheduled or delivered from the Facility. Seller shall be responsible for all CAISO penalties imposed on Buyer resulting from any failure by Seller to abide by the CAISO Tariff requirements imposed on it as Facility owner (but not in connection with obligations of Buyer hereunder) or the outage notification requirements set forth in this Agreement (except to the extent such non-compliance is caused by Buyer’s failure to perform its duties as Scheduling Coordinator for the Facility). The Parties agree that any Availability Incentive Payments (as defined in the AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit D - 2
CAISO Tariff) are for the benefit of the Seller and for Seller’s account and that any Non-Availability Charges (as defined in the CAISO Tariff) are the responsibility of the Seller and for Seller’s account except to the extent such Non-Availability Charges are caused by Buyer’s (as Scheduling Coordinator) failure to perform its must-offer requirements under Section 40.6 of the CAISO Tariff or caused by Buyer’s other actions (as Scheduling Coordinator) in which case such Non-Availability Charges shall be the responsibility of Buyer and for Buyer’s account. In addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling requirements imposed on it as Facility owner (but not in connection with obligations of Buyer hereunder), outage reporting, or generator operation, and any such sanctions or penalties are imposed upon the Facility or to Buyer as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties shall be the Seller’s responsibility. (d) CAISO Settlements. Buyer (as the Facility’s SC) shall be responsible for all settlement functions with the CAISO related to the Facility. Buyer shall render a separate invoice to Seller for any CAISO payments, charges or penalties (“CAISO Charges Invoice”) for which Seller is responsible under this Agreement. CAISO Charges Invoices shall be rendered after settlement information becomes available from the CAISO that identifies any CAISO charges.
Notwithstanding the foregoing, Seller acknowledges that the CAISO will issue additional invoices reflecting CAISO adjustments to such CAISO charges. Buyer will review, validate, and if requested by Seller under paragraph (e) below, dispute any charges that are the responsibility of Seller in a timely manner and consistent with Buyer’s existing settlement processes for charges that are Buyer’s responsibilities. Subject to Seller’s right to dispute and to have Buyer pursue the dispute of any such invoices, Seller shall pay the amount of CAISO Charges Invoices within ten (10) Business Days of Seller’s receipt of the CAISO Charges Invoice. If Seller fails to pay such CAISO Charges Invoice within that period, Buyer may net or offset any amounts owing to it for these CAISO Charges Invoices against any future amounts it may owe to Seller under this Agreement. The obligations under this Section with respect to payment of CAISO Charges Invoices shall survive the expiration or termination of this Agreement. (e) Dispute Costs. Buyer (as the Facility’s SC) may be required to dispute CAISO settlements in respect of the Facility. Buyer agrees to pay costs and expenses (including reasonable attorneys’ fees) associated with its involvement with such CAISO disputes, except to the extent they relate to CAISO charges payable by Seller under this Agreement with respect to the Facility. (f) Terminating Buyer’s Designation as Scheduling Coordinator. At least thirty (30) days prior to expiration of this Agreement or as soon as reasonably practicable upon an earlier termination of this Agreement, the Parties will take all actions necessary to terminate the designation of Buyer as Scheduling Coordinator for the Facility as of 11:59 p.m. on such expiration date.
(g) Master Data File and Resource Data Template. Seller shall provide the data to the CAISO (and to Buyer) that is required for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement. Neither Party shall change such data without the other Party’s prior written consent. (h) NERC Reliability Standards. Buyer (as Scheduling Coordinator) shall cooperate AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit D - 3
reasonably with Seller to the extent necessary to enable Seller to comply, and for Seller to demonstrate Seller’s compliance with, NERC reliability standards. This cooperation shall include the provision of information in Buyer’s possession that Buyer (as Scheduling Coordinator) has provided to the CAISO related to the Facility or actions taken by Buyer (as Scheduling Coordinator) related to Seller’s compliance with NERC reliability standards.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit E - 1
EXHIBIT E
PROGRESS REPORTING FORM
Each Progress Report must include the following items:
1. Executive Summary.
2. Facility description.
3. Site plan of the Facility.
4. Description of any material planned changes to the Facility or the Site.
5. Gantt chart schedule showing progress on achieving each of the Milestones.
6. Summary of activities during the previous calendar quarter or month, as applicable, including any OSHA labor hour reports.
7. Forecast of activities scheduled for the current calendar quarter.
8. Written description about the progress relative to Seller’s Milestones, including whether Seller has met or is on target to meet the Milestones.
9. List of issues that are likely to potentially affect Seller’s Milestones.
10. A status report of start-up activities including a forecast of activities ongoing and after start-up, a report on Facility performance including performance projections for the next twelve (12) months.
11. Prevailing wage reports as required by Law.
12. Progress and schedule of all major agreements, contracts, permits, approvals, technical studies, financing agreements and major equipment purchase orders showing the start dates, completion dates, and completion percentages.
13. Pictures, in sufficient quantity and of appropriate detail, in order to document construction and startup progress of the Facility, the interconnection into the Transmission System and all other interconnection utility services.
14. Any other documentation reasonably requested by Buyer.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit F-1 - 1
EXHIBIT F-1
FORM OF AVERAGE EXPECTED ENERGY REPORT
Average Expected Energy (in MWh)
1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
The foregoing table is provided for informational purposes only, and it shall not constitute, or be deemed to constitute, an obligation of any of the Parties to this Agreement.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit F-2 - 1
EXHIBIT F-2
FORM OF MONTHLY DELIVERY FORECAST
Day
HE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit G - 1
EXHIBIT G
GUARANTEED ENERGY PRODUCTION DAMAGES CALCULATION
In accordance with Section 4.7, if Seller fails to achieve the Guaranteed Energy Production during any Performance Measurement Period, a liquidated damages payment shall be due from Seller to Buyer, calculated as follows:
[(A – B) * (C – D)]
where:
A = the Guaranteed Energy Production amount for the Performance Measurement Period, in MWh
B = the Adjusted Energy Production amount for the Performance Measurement Period, in MWh
C = Replacement price for the Contract Year, in $/MWh, which is the sum of (a) the weighted average of the Integrated Forward Market hourly price for all the Reference Hours in the Performance Measurement Period, as published by the CAISO, for the Existing Zone Generation Trading Hub (as defined in the CAISO Tariff) for the Delivery Point weighted by hourly and monthly volumes in the most recently delivered Average Expected Energy Report, plus (b) the lesser of (x) $50.00/MWh and (y) the market value of Replacement Green Attributes, as reasonably determined by Buyer.
D = the Renewable Rate
“Adjusted Energy Production” shall mean the sum of the following: Generating Facility Energy + Deemed Delivered Energy + Lost Output.
“Lost Output” has the meaning given in Section 4.7 of the Agreement. “Reference Hour” means any hour from hour-ending 0700 to hour-ending 2200 (i.e., 7:00 AM to 9:59 PM) on Monday through Sunday, Pacific Prevailing Time, excluding North American Electric Reliability Council (NERC) holidays.
“Replacement Green Attributes” means Renewable Energy Credits of the same Portfolio Content Category (i.e., PCC1) as the Green Attributes portion of the Product and of the same timeframe for retirement as the Renewable Energy Credits that would have been generated by the Generating Facility during the Performance Measurement Period for which the Replacement Green Attributes are being provided.
No payment shall be due if the calculation of (A - B) or (C - D) yields a negative number.
Buyer will send Seller Notice of the amount of damages owing, if any, which amount shall be payable to Buyer within thirty (30) days from the date of such Notice.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC
Exhibit H - 1
EXHIBIT H
FORM OF COMMERCIAL OPERATION DATE CERTIFICATE
This certification (“Certification”) of Commercial Operation is delivered by [licensed professional engineer] (“Engineer”) to Marin Clean Energy, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Amended and Restated Renewable Power Purchase Agreement dated ___________ (“Agreement”) by and between Golden Fields Solar IV, LLC, a Delaware limited liability company, and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
As of [Date], Engineer hereby certifies and represents to Buyer the following:
1. The Generating Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.
2. Seller has installed equipment for the Generating Facility with a nameplate capacity of no less than of the Guaranteed Capacity.
3. Seller has installed equipment for the Storage Facility with a nameplate capacity of no less than of the Storage Contract Capacity.
4. Seller has commissioned all equipment in accordance with its respective manufacturer’s specifications.
5. The Generating Facility’s testing included a performance test demonstrating peak electrical output of no less than of the Guaranteed Capacity for the Generating Facility at the Delivery Point, as adjusted for ambient conditions on the date of the Facility testing, and such peak electrical output, as adjusted, was [peak output in MW].
6. The Storage Facility is fully capable of charging, storing and discharging energy up to no less than of the Storage Contract Capacity and receiving instructions to charge, store and discharge energy, all within the operational constraints and subject to the applicable Operating Restrictions.
7. The Facility is designed to be capable of delivering every day, year-round at least MWh of energy per every MW of claimed incremental capacity during the 5 p.m. to 10 p.m. period (the beginning of hour ending 1800 and the end of hour ending 2200), Pacific Time, provided that the daily plane-of-array irradiance is at least .
8. Authorization to parallel the Facility was obtained by the Participating Transmission Owner, [Name of Participating Transmission Owner as appropriate] on [Date].
9. If applicable, the Participating Transmission Owner has provided documentation supporting full unrestricted release for Commercial Operation by [Name of Participating Transmission Owner as appropriate] on [Date].
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit H - 2
10. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff on [Date].
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit I-1 - 1
EXHIBIT I-1
FORM OF INSTALLED PV CAPACITY CERTIFICATE
This certification (“Certification”) of Installed PV Capacity is delivered by [LICENSED PROFESSIONAL ENGINEER] (“Engineer”) to Marin Clean Energy, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Amended and Restated Renewable Power Purchase Agreement dated [DATE] (“Agreement”) by and between Golden Fields Solar IV, LLC, a Delaware limited liability company, and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
I hereby certify the performance test for the Generating Facility demonstrated peak electrical output of __ MW AC at the Delivery Point, as adjusted for ambient conditions on the date of the performance test (“Installed PV Capacity”).
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit I-2 - 1
EXHIBIT I-2
FORM OF INSTALLED BATTERY CAPACITY CERTIFICATE
This certification (“Certification”) of Installed Battery Capacity is delivered by [licensed professional engineer] (“Engineer”) to Marin Clean Energy, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Amended and Restated Renewable Power Purchase Agreement dated [DATE] (“Agreement”) by and between Golden Fields Solar IV, LLC, a Delaware limited liability company, and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
I hereby certify the Storage Capacity Test demonstrated a maximum dependable operating capability that can be sustained for four (4) consecutive hours to discharge electric energy of __ MW AC to the Delivery Point, in accordance with the testing procedures, requirements and protocols set forth in Section 4.9 and Exhibit O (the “Installed Battery Capacity”).
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit J - 1
EXHIBIT J
FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of Construction Start Date (“Certification”) is delivered by Golden Fields Solar IV, LLC, a Delaware limited liability company (“Seller”) to Marin Clean Energy, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Amended and Restated Renewable Power Purchase Agreement dated __________ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Seller hereby certifies and represents to Buyer the following:
1. Construction Start (as defined in Exhibit B of the Agreement) has occurred, and a copy of the full notice to proceed that Seller issued to its contractor as part of Construction Start is attached hereto.
2. the precise Site on which the Facility is located is, which must include some or all of the previously identified APNs (such description shall amend the description of the Site in Exhibit A): ______________________________________________________________.
IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller this ________ day of _____________, 20__.
GOLDEN FIELDS SOLAR IV, LLC
a Delaware limited liability company,
By:
Printed Name:
Title:
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit K - 1
EXHIBIT K
FORM OF LETTER OF CREDIT
[Issuing Bank Letterhead and Address]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [XXXXXXX]
Date:
Bank Ref.:
Amount: US$[XXXXXXXX]
Expiry Date:
APPLICANT DETAILS TO BE PROVIDED
Beneficiary:
Marin Clean Energy
1125 Tamalpais Avenue
San Rafael, CA 94901
Attn: Director of Finance
Ladies and Gentlemen:
By the order of __________ (“Applicant”), we, [insert bank name and address] (“Issuer”) hereby issue our Irrevocable Standby Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) in favor of Marin Clean Energy, a California joint powers authority (“Beneficiary”), for an amount not to exceed the aggregate sum of U.S. $[XXXXXX] (United States Dollars [XXXXX] and 00/100), pursuant to that certain Amended and Restated Renewable Power Purchase Agreement dated as of [Date of Contract / Agreement should be in the past or on the date of issuance. In case of future contract date the Letter of Credit text will be adjusted to reflect this change] and as amended (the “Agreement”) between Applicant and Beneficiary. This Letter of Credit shall become effective immediately and shall expire on [XXXXXX] which is one year after the issue date of this Letter of Credit, or any expiration date extended in accordance with the terms hereof (the “Expiration Date”).
Funds under this Letter of Credit are available to Beneficiary by presentation on or before the Expiration Date of a dated statement purportedly signed by your duly authorized representative, in the form attached hereto as Exhibit A, containing one of the two alternative paragraphs set forth in paragraph 2 therein, referencing our Letter of Credit No. [XXXXXXX] (“Drawing Certificate”).
The Drawing Certificate may be presented by (a) physical delivery, or (b) facsimile to [bank fax number [XXX-XXX-XXXX]] confirmed by [email to [bank email address]] (if presented by fax it must be followed up by a phone call to us at [XXXXXX] or [XXXXXX] to confirm receipt) AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit K - 2
with the originals to follow via courier. The drawing will be effective upon our receipt of the original documents at the above noted address.
The original of this Letter of Credit (and all amendments, if any) is not required to be presented in connection with any presentment of a Drawing Certificate by Beneficiary hereunder in order to receive payment.
We hereby agree with the Beneficiary that documents presented under and in compliance with the terms of this Letter of Credit will be duly honored upon presentation to the Issuer on or before the Expiration Date. All payments made under this Letter of Credit shall be made with Issuer’s own immediately available funds by means of wire transfer in immediately available United States dollars to Beneficiary’s account as indicated by Beneficiary in its Drawing Certificate or in a communication accompanying its Drawing Certificate.
Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance.
It is a condition of this Letter of Credit that the Expiration Date shall be deemed automatically extended without an amendment for a one year period beginning on the present Expiration Date hereof and upon each anniversary for such date, unless at least one hundred twenty (120) days prior to any such Expiration Date we have sent to you written notice by registered mail or overnight courier service that we elect not to extend this Letter of Credit, in which case it will expire on the date specified in such notice. No presentation made under this Letter of Credit after such Expiration Date will be honored.
Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements, this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.
This Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (2007 Revision) International Chamber of Commerce Publication No. 600 (the “UCP”), except to the extent that the terms hereof are inconsistent with the provisions of the UCP, including but not limited to Articles 14(b) and 36 of the UCP, in which case the terms of this Letter of Credit shall govern. In the event of an act of God, riot, civil commotion, insurrection, war or any other cause beyond Issuer’s control (as defined in Article 36 of the UCP) that interrupts Issuer’s business and causes the place for presentation of the Letter of Credit to be closed for business on the last day for presentation, the Expiration Date of the Letter of Credit will be automatically extended without amendment to a date thirty (30) calendar days after the place for presentation reopens for business.
Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available.
All notices to Beneficiary shall be in writing and are required to be sent by email to [email protected] and followed up by certified letter, overnight courier, or delivered in person to: Marin Clean Energy, Attn: Chief Financial Officer, 1125 Tamalpais Avenue San Rafael, CA 94901. Only notices to Beneficiary meeting the requirements of this paragraph shall AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit K - 3
be considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect.
[Bank Name]
___________________________
[Insert officer name]
[Insert officer title]
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit K - 4
Exhibit A: (DRAW REQUEST SHOULD BE ON BENEFICIARY’S LETTERHEAD) Drawing Certificate
[Insert Bank Name and Address]
Ladies and Gentlemen:
The undersigned, a duly authorized representative of Marin Clean Energy, a California joint powers authority, as beneficiary (the “Beneficiary”) of the Irrevocable Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) issued by [insert bank name] (the “Bank”) by order of __________ (the “Applicant”), hereby certifies to the Bank as follows:
1. Applicant and Beneficiary are party to that certain Amended and Restated Renewable Power Purchase Agreement dated as of ___________, 20__ (the “Agreement”).
2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________ because a Seller Event of Default (as such term is defined in the Agreement) or other occasion provided for in the Agreement where Beneficiary is authorized to draw on the letter of credit has occurred.
OR
Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________, which equals the full available amount under the Letter of Credit, because Applicant is required to maintain the Letter of Credit in force and effect beyond the expiration date of the Letter of Credit but has failed to provide Beneficiary with a replacement Letter of Credit or other acceptable instrument within forty-five (45) days prior to such expiration date.
3. The undersigned is a duly authorized representative of Marin Clean Energy, a California joint powers authority and is authorized to execute and deliver this Drawing Certificate on behalf of Beneficiary.
You are hereby directed to make payment of the requested amount to Marin Clean Energy, a California joint powers authority by wire transfer in immediately available funds to the following account:
[Specify account information]
Marin Clean Energy
_______________________________
Name and Title of Authorized Representative
Date___________________________
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit L - 1
EXHIBIT L
FORM OF GUARANTY
This Guaranty (this “Guaranty”) is entered into as of [_____] (the “Effective Date”) by and between [_____], a [______] (“Guarantor”), and Marin Clean Energy, a California joint powers authority (together with its successors and permitted assigns, “Buyer”).
Recitals
A. Buyer and Golden Fields Solar IV, LLC, a Delaware limited liability company (“Seller”), entered into that certain Amended and Restated Renewable Power Purchase Agreement (as amended, restated or otherwise modified from time to time, the “PPA”) dated as of [____], 20___.
B. Guarantor is entering into this Guaranty as Performance Security to secure Seller’s obligations under the PPA, as required by Section 8.8 of the PPA.
C. It is in the best interest of Guarantor to execute this Guaranty inasmuch as Guarantor will derive substantial direct and indirect benefits from the execution and delivery of the PPA.
D. Initially capitalized terms used but not defined herein have the meaning set forth in the PPA.
Agreement
1. Guaranty. For value received, Guarantor does hereby unconditionally, absolutely and irrevocably guarantee, as primary obligor and not as a surety, to Buyer the full, complete and prompt payment by Seller of any and all amounts and payment obligations now or hereafter owing from Seller to Buyer under the PPA, including, without limitation, compensation for penalties, the Termination Payment, indemnification payments or other damages, as and when required pursuant to the terms of the PPA (the “Guaranteed Amount”), provided, that Guarantor’s aggregate liability under or arising out of this Guaranty shall not exceed ________ Dollars ($___________).
The Parties understand and agree that any payment by Guarantor or Seller of any portion of the Guaranteed Amount shall thereafter reduce Guarantor’s maximum aggregate liability hereunder on a dollar-for-dollar basis. This Guaranty is an irrevocable, absolute, unconditional and continuing guarantee of the full and punctual payment and performance, and not of collection, of the Guaranteed Amount and, except as otherwise expressly addressed herein, is in no way conditioned upon any requirement that Buyer first attempt to collect the payment of the Guaranteed Amount from Seller, any other guarantor of the Guaranteed Amount or any other Person or entity or resort to any other means of obtaining payment of the Guaranteed Amount. In the event Seller shall fail to duly, completely or punctually pay any Guaranteed Amount as required pursuant to the PPA, Guarantor shall promptly pay such amount as required herein.
2. Demand Notice. For avoidance of doubt, a payment shall be due for purposes of this Guaranty only when and if a payment is due and payable by Seller to Buyer under the terms and conditions of the Agreement. If Seller fails to pay any Guaranteed Amount as required pursuant to the PPA for five (5) Business Days following Seller’s receipt of Buyer’s written notice of such failure (the “Demand Notice”), then Buyer may elect to exercise its rights under this Guaranty AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit L - 2
and may make a demand upon Guarantor (a “Payment Demand”) for such unpaid Guaranteed Amount. A Payment Demand shall be in writing and shall reasonably specify in what manner and what amount Seller has failed to pay and an explanation of why such payment is due and owing, with a specific statement that Buyer is requesting that Guarantor pay under this Guaranty.
Guarantor shall, within five (5) Business Days following its receipt of the Payment Demand, pay the Guaranteed Amount to Buyer.
3. Scope and Duration of Guaranty. This Guaranty applies only to the Guaranteed Amount.
This Guaranty shall continue in full force and effect from the Effective Date until the earlier of the following: (x) all Guaranteed Amounts have been paid in full (whether directly or indirectly through set-off or netting of amounts owed by Buyer to Seller), (y) replacement Performance Security is provided in an amount and form required by the terms of the PPA, or (z) one hundred eighty (180) days after the early termination of the PPA or expiration of the PPA by its terms.
Further, this Guaranty (a) shall remain in full force and effect without regard to, and shall not be affected or impaired by any invalidity, irregularity or unenforceability in whole or in part of this Guaranty, and (b) subject to the preceding sentence, shall be discharged only by complete performance of the undertakings herein. Without limiting the generality of the foregoing, the obligations of the Guarantor hereunder shall not be released, discharged, or otherwise affected and this Guaranty shall not be invalidated or impaired or otherwise affected for the following reasons:
(i) the extension of time for the payment of any Guaranteed Amount, or (ii) any amendment, modification or other alteration of the PPA, or (iii) any indemnity agreement Seller may have from any party, or (iv) any insurance that may be available to cover any loss, except to the extent insurance proceeds are used to satisfy the Guaranteed Amount, or
(v) any voluntary or involuntary liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting, Seller or any of its assets, including but not limited to any rejection or other discharge of Seller’s obligations under the PPA imposed by any court, trustee or custodian or any similar official or imposed by any law, statue or regulation, in each such event in any such proceeding, or
(vi) the release, modification, waiver or failure to pursue or seek relief with respect to any other guaranty, pledge or security device whatsoever, or (vii) any payment to Buyer by Seller that Buyer subsequently returns to Seller pursuant to court order in any bankruptcy or other debtor-relief proceeding, or (viii) those defenses based upon (A) the legal incapacity or lack of power or authority of any Person, including Seller and any representative of Seller to enter into the PPA or perform its obligations thereunder, (B) lack of due execution, delivery, validity or enforceability, including of the PPA, or (C) Seller’s inability to pay any Guaranteed Amount or perform its obligations under the PPA, or
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit L - 3
(ix) any other event or circumstance that may now or hereafter constitute a defense to payment of the Guaranteed Amount, including, without limitation, statute of frauds and accord and satisfaction;
provided that, subject to Guarantor’s payment of a Guaranteed Amount in accordance with Paragraph 2, Guarantor reserves the right to assert for itself in a subsequent proceeding any defenses, setoffs or counterclaims that Seller is or may be entitled to assert against Buyer (except for such defenses, setoffs or counterclaims that may be asserted by Seller with respect to the PPA, but that are expressly waived under any provision of this Guaranty).
4. Waivers by Guarantor. Guarantor hereby unconditionally waives as a condition precedent to the performance of its obligations hereunder, with the exception of the requirements in Paragraph 2, (a) notice of acceptance, presentment or protest with respect to the Guaranteed Amounts and this Guaranty, (b) notice of any action taken or omitted to be taken by Buyer in reliance hereon, (c) any requirement that Buyer exhaust any right, power or remedy or proceed against Seller under the PPA, and (d) any event, occurrence or other circumstance which might otherwise constitute a legal or equitable discharge of a surety. Without limiting the generality of the foregoing waiver of surety defenses, it is agreed that the occurrence of any one or more of the following shall not affect the liability of Guarantor hereunder:
(i) at any time or from time to time, without notice to Guarantor, the time for payment of any Guaranteed Amount shall be extended, or such performance or compliance shall be waived; (ii) the obligation to pay any Guaranteed Amount shall be modified, supplemented or amended in any respect in accordance with the terms of the PPA; (iii) subject to Paragraph 9, any (a) sale, transfer or consolidation of Seller into or with any other entity, (b) sale of substantial assets by, or restructuring of the corporate existence of, Seller or (c) change in ownership of any membership interests of, or other ownership interests in, Seller; or
(iv) the failure by Buyer or any other Person to create, preserve, validate, perfect or protect any security interest granted to, or in favor of, Buyer or any Person.
5. Subrogation. Notwithstanding any payments that may be made hereunder by the Guarantor, Guarantor hereby agrees that until the earlier of payment in full of all Guaranteed Amounts or expiration of the Guaranty in accordance with Paragraph 3, it shall not be entitled to, nor shall it seek to, exercise any right or remedy arising by reason of its payment of any Guaranteed Amount under this Guaranty, whether by subrogation or otherwise, against Seller or seek contribution or reimbursement of such payments from Seller.
6. Representations and Warranties. Guarantor hereby represents and warrants that (a) it has all necessary and appropriate [limited liability company][corporate] powers and authority and the legal right to execute and deliver, and perform its obligations under, this Guaranty, (b) this Guaranty constitutes its legal, valid and binding obligations enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting enforcement of creditors’ rights or general principles of equity, (c) the execution, delivery and performance of this Guaranty does not and will not contravene Guarantor’s AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit L - 4
organizational documents, any applicable Law or any contractual provisions binding on or affecting Guarantor, (d) there are no actions, suits or proceedings pending before any court, governmental agency or arbitrator, or, to the knowledge of the Guarantor, threatened, against or affecting Guarantor or any of its properties or revenues which may, in any one case or in the aggregate, adversely affect the ability of Guarantor to enter into or perform its obligations under this Guaranty, and (e) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority, and no consent of any other Person (including, any stockholder or creditor of the Guarantor), that has not heretofore been obtained is required in connection with the execution, delivery, performance, validity or enforceability of this Guaranty by Guarantor.
7. Notices. Notices under this Guaranty shall be deemed received if sent to the address specified below: (i) on the day received if served by overnight express delivery, and (ii) four Business Days after mailing if sent by certified, first class mail, return receipt requested. If transmitted by facsimile, such notice shall be deemed received when the confirmation of transmission thereof is received by the party giving the notice. Any party may change its address or facsimile to which notice is given hereunder by providing notice of the same in accordance with this Paragraph 7.
If delivered to Buyer, to it at [____]
Attn: [____]
Fax: [____]
If delivered to Guarantor, to it at [____]
Attn: [____]
Fax: [____]
8. Governing Law and Forum Selection. This Guaranty shall be governed by, and interpreted and construed in accordance with, the laws of the United States and the State of California, excluding choice of law rules. The Parties agree that any suit, action or other legal proceeding by or against any party (or its affiliates or designees) with respect to or arising out of this Guaranty shall be brought in the federal courts of the United States or the courts of the State of California sitting in the City and County of San Francisco, California.
9. Miscellaneous. This Guaranty shall be binding upon Guarantor and its successors and assigns and shall inure to the benefit of Buyer and its successors and permitted assigns pursuant to the PPA. No provision of this Guaranty may be amended or waived except by a written instrument executed by Guarantor and Buyer. This Guaranty is not assignable by Guarantor without the prior written consent of Buyer. No provision of this Guaranty confers, nor is any provision intended to confer, upon any third party (other than Buyer’s successors and permitted assigns) any benefit or right enforceable at the option of that third party. This Guaranty embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements and understandings of the parties hereto, verbal or written, relating to the subject matter hereof. If any provision of this Guaranty is determined to be illegal or AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit L - 5
unenforceable (i) such provision shall be deemed restated in accordance with applicable Laws to reflect, as nearly as possible, the original intention of the parties hereto and (ii) such determination shall not affect any other provision of this Guaranty and all other provisions shall remain in full force and effect. This Guaranty may be executed in any number of separate counterparts, each of which when so executed shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Guaranty may be executed and delivered by electronic means with the same force and effect as if the same was a fully executed and delivered original manual counterpart.
[Signature on next page]
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit L - 6
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly executed and delivered by its duly authorized representative on the date first above written.
GUARANTOR:
[_______]
By:______________________________
Printed Name:__________________
Title:____________________________
BUYER:
[_______]
By:______________________________
Printed Name:__________________
Title:____________________________
By:______________________________
Printed Name:__________________
Title:____________________________
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit M - 1
EXHIBIT M
FORM OF REPLACEMENT RA NOTICE
This Replacement RA Notice (this “Notice”) is delivered by Golden Fields Solar IV, LLC, a Delaware limited liability company (“Seller”) to Marin Clean Energy, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Amended and Restated Renewable Power Purchase Agreement dated __________ (“Agreement”) by and between Seller and Buyer.
All capitalized terms used in this Notice but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Pursuant to Section 3.8(b) of the Agreement, Seller hereby provides the below Replacement RA product information:
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit M - 2
GOLDEN FIELDS SOLAR IV, LLC
a Delaware limited liability company
By:
Printed Name:
Title:
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC
Exhibit N - 1
EXHIBIT N
NOTICES
Golden Fields Solar IV, LLC (“Seller”) Marin Clean Energy (“Buyer”) All Notices:
Street: 4900 Scottsdale Road, Suite 5000
c/o Solar Asset Management LLC
City: Scottsdale, AZ 85251
Attn: VP Asset Management
Phone: 480-424-1240
Email: [email protected]
With a copy to:
Street: 5790 Fleet Street, Suite 200
City: Carlsbad, CA 92008
Attn: General Counsel
Phone: 760-710-2187
Email: [email protected]
All Notices:
Marin Clean Energy
1125 Tamalpais Avenue
San Rafael, CA 94901
Attn: Contract Administration
Phone: (415) 464-6010
Email: [email protected]
Reference Numbers:
Duns:
Federal Tax ID Number:
Reference Numbers:
Duns:
Federal Tax ID Number:
Invoices:
Attn: VP Asset Management
Phone: 480-424-1240
Email: [email protected]
Invoices:
Attn: Power Settlements and Analytics
Phone: (415) 464-6683
Email: [email protected]
Scheduling:
Attn: VP Asset Management
Phone: 480-424-1240
Email: [email protected]
Scheduling:
Attn: ZGlobal
Phone: (916) 458-4080
Email: [email protected]
Confirmations:
Attn: VP Asset Management
Phone: 480-424-1240
Email: [email protected]
Confirmations:
Attn: Director of Power Resources
Phone: (415) 464-6685
Email: [email protected]
Payments:
Attn: VP Asset Management
Phone: 480-424-1240
Email: [email protected]
Payments:
Attn: Power Settlements and Analytics
Phone: (415) 464-6683
Email: [email protected]
Wire Transfer: Wire Transfer:
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit N - 2
Golden Fields Solar IV, LLC (“Seller”) Marin Clean Energy (“Buyer”) With additional Notices of an Event of
Default to:
Attn: VP Asset Management
Phone: 480-424-1240
Email: [email protected]
With additional Notices of an Event of
Default to:
Hall Energy Law PC
Attn: Stephen Hall
Phone: (503) 313-0755
Email: [email protected]
Emergency Contact:
Attn: VP Asset Management
Phone: 480-424-1240
Email: [email protected]
Emergency Contact:
Attn:
Phone:
E-mail:
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit O - 1
EXHIBIT O
STORAGE CAPACITY TESTS
Storage Capacity Test Notice and Frequency
A. Commercial Operation Date Storage Capacity Test. Upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall schedule and complete a Storage Capacity Test prior to the Commercial Operation Date. Such initial Storage Capacity Test shall be performed in accordance with this Exhibit O and shall establish the initial Storage Contract Capacity hereunder based on the actual capacity of the Storage Facility determined by such Storage Capacity Test.
B. Subsequent Storage Capacity Tests. Following the Commercial Operation Date, but not more than twice per Contract Year, upon no less than ten (10) Business Days prior Notice to Seller, Buyer shall have the right to require Seller to schedule and complete a Storage Capacity Test. In addition, Buyer shall have the right to require a retest of the Storage Capacity Test at any time upon no less than five (5) Business Days prior written Notice to Seller if Buyer provides data with such Notice reasonably indicating that the Storage Capacity has varied materially from the results of the most recent Storage Capacity Test. Seller shall have the right to run a retest of any Storage Capacity Test upon five (5) Business Days’ prior written Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practice). Following the Commercial Operation Date, but not more than twice per Contract Year, upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall have the right to schedule and complete a Storage Capacity Test. In addition, Seller shall have the right to schedule and complete a retest of the Storage Capacity Test at any time upon no less than five (5) Business Days prior written Notice to Buyer if Seller provides data with such Notice reasonably indicating that the Storage Capacity or Efficiency Rate has varied materially from the results of the most recent Storage Capacity Test.
C. Test Results and Re-Setting of Storage Contract Capacity and Efficiency Rate.
In accordance with Section 4.9(c) of the Agreement, Part II.J, and Part II.K. below, the actualstorage capacity and efficiency rate determined pursuant to the most recent Storage Capacity Test (up to, but not in excess of, the Storage Contract Capacity) shall become the new Storage Capacity and Efficiency Rate, effective as of the first day of the month following the completion of the test, for calculating the monthly payment for the Storage Product and all other purposes under this Agreement.
Storage Capacity Test Procedures
PART I. GENERAL.
Each Storage Capacity Test (including the initial Storage Capacity Test and all re-performances thereof) shall be conducted in accordance with Prudent Operating Practices and the provisions of this Exhibit O. For ease of reference, a Storage Capacity Test is sometimes referred to in this Exhibit O as a “SCT”. Buyer or its representative may be present for the SCT and may, for informational purposes only, use its own metering equipment (at Buyer’s sole cost).
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit O - 2
PART II. REQUIREMENTS APPLICABLE TO ALL STORAGE CAPACITY TESTS AND EFFICIENCY TESTS.
A. Purpose of Test. Each SCT shall:
(1) Determine an updated Storage Capacity;
(2) Determine the amount of Energy required to fully charge the Storage Facility;
(3) Determine the Storage Facility charge ramp rate;
(4) Determine the Storage Facility discharge ramp rate; and (5) Determine an updated Efficiency Rate.
B. Test Elements. Each SCT shall include the following test elements:
• Electrical output at Maximum Discharging Capacity (as defined in Exhibit A) at the Storage Facility Meter and concurrently at the Generating Facility Meter (MW);
• Electrical input at Maximum Charging Capacity (as defined in Exhibit A) at the Storage Facility Meter (MW);
• Amount of time between the Storage Facility’s electrical output going from 0 to Maximum Discharging Capacity;
• Amount of time between the Storage Facility’s electrical input going from 0 to Maximum Charging Capacity; and
• Amount of energy required to go from Minimum Storage Level to the Maximum Storage Level charging at a rate equal to the Maximum Charging Capacity.
C. Parameters. During each SCT, the following parameters shall be measured and recorded simultaneously for the Storage Facility, at ten (10) minute intervals:
(1) Time;
(2) Net electrical energy output to the Storage Facility Meters (kWh) (i.e., to each measurement device making up the Storage Facility Meter); (3) Net electrical energy input from the Storage Facility Meters (kWh) (i.e., from each measurement device making up the Storage Facility Meter); and (4) Stored Energy Level (MWh).
D. Site Conditions. During each SCT, the following conditions at the Site shall be AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit O - 3
measured and recorded simultaneously at thirty (30) minute intervals:
(1) Relative humidity (%);
(2) Barometric pressure (inches Hg) near the horizontal centerline of the Storage Facility; and
(3) Ambient air temperature (°F).
E. Test Showing. Each SCT must demonstrate that the Storage Facility:
(1) successfully started;
(2) operated for at least four (4) consecutive hours at Maximum Discharging Capacity (as defined in Exhibit A);
(3) operated for at least four (4) consecutive hours at Maximum Charging Capacity (as defined in Exhibit A);
(4) has a Storage Capacity of an amount that is, at least, equal to the Maximum Storage Level (as defined in Exhibit A); and
(5) is able to deliver Discharging Energy as measured by the Storage Facility Meter for four (4) consecutive hours at a rate equal to the Maximum Discharging Capacity.
F. Test Conditions.
(i) General. At all times during a SCT, the Storage Facility shall be operated in compliance with Prudent Operating Practices and all operating protocols recommended, required or established by the manufacturer for operation at Maximum Discharging Capacity and Maximum Charging Capacity (as each is defined in Exhibit A).
(ii) Abnormal Conditions. If abnormal operating conditions that prevent the recordation of any required parameter occur during a SCT (including a level of irradiance that does not permit the Generating Facility to produce sufficient Charging Energy), Seller may postpone or reschedule all or part of such SCT in accordance with Part II.G below.
(iii) Instrumentation and Metering. Seller shall provide all instrumentation, metering and data collection equipment required to perform the SCT. The instrumentation, metering and data collection equipment electrical meters shall be calibrated in accordance with Prudent Operating Practice.
G. Incomplete Test. If any SCT is not completed in accordance herewith, Buyer may in its sole discretion: (i) accept the results up to the time the SCT stopped; (ii) require that the portion of the SCT not completed, be completed within a reasonable AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit O - 4
specified time period; or (iii) require that the SCT be entirely repeated.
Notwithstanding the above, if Seller is unable to complete a SCT due to a Force Majeure Event or the actions or inactions of Buyer or the CAISO or the PTO or the Transmission Provider, Seller shall be permitted to reconduct such SCT on dates and at times reasonably acceptable to the Parties.
H. Final Report. Within fifteen (15) Business Days after the completion of any SCT, Seller shall prepare and submit to Buyer a written report of the results of the SCT, which report shall include:
(1) a record of the personnel present during the SCT that served in an operating, testing, monitoring or other such participatory role;
(2) the measured data for each parameter set forth in Part II.B through D, including copies of the raw data taken during the test; (3) the level of Storage Capacity, Energy In, Energy Out, Efficiency Rate, Maximum Charging Capacity, the current charge and discharge ramp rate, and Stored Energy Level determined by the SCT, including supporting calculations; and
(4) Seller’s statement of either Seller’s acceptance of the SCT or Seller’s rejection of the SCT results and reason(s) therefor.
Within ten (10) Business Days after receipt of such report, Buyer shall notify Seller in writing of either Buyer’s acceptance of the SCT results or Buyer’s rejection of the SCT and reason(s) therefor.
If either Party rejects the results of any SCT, such SCT shall be repeated in accordance with Part II.G.
I. Supplementary Storage Capacity Test Protocol. No later than sixty (60) days prior to commencing Facility construction, Seller shall deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) an updated supplement to this Exhibit O with additional and supplementary details, procedures and requirements applicable to Storage Capacity Tests based on the then current design of the Facility (“Supplementary Storage Capacity Test Protocol”). Thereafter, from time to time, Seller may deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) any Seller recommended updates to the then current Supplementary Storage Capacity Test Protocol. The initial Supplementary Storage Capacity Test Protocol (and each update thereto), once approved by Buyer, shall be deemed an amendment to this Exhibit O.
J. Adjustment to Storage Capacity. The total amount of Discharging Energy delivered to the Storage Facility Meter (expressed in MWh AC) during each of the first four (4) hours of discharge (up to, but not in excess of, the product of (i) the original Storage Contract Capacity set forth on the Cover Sheet, as such original Storage AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit O - 5
Contract Capacity on the Cover Sheet may have been adjusted (if at all) under this Agreement, multiplied by (ii) 4 hours) shall be divided by four (4) hours to determine the Storage Capacity, which shall be expressed in MW AC, and shall be the new Storage Capacity in accordance with Section 4.9(c) of the Agreement.
K. Adjustment to Efficiency Rate. The total amount of Energy Out divided by the total amount of Energy In, measured at the Storage Facility Meter, and expressed as a percentage, shall be the new Efficiency Rate in accordance with Section 4.9(c) of the Agreement.
L. Following the initial Storage Capacity Test conducted prior to the Commercial Operation Date, upon request of Seller, Buyer shall consider in good faith an alternate methodology for conducting a Storage Capacity Test by reference to the operational data reflecting the net output of the Storage Facility from the point of interconnection. Upon Seller’s request, Seller and Buyer shall work in good faith to establish a mutually acceptable methodology for demonstrating the Storage Capacity and Efficiency Rate through such operational data. If Buyer and Seller mutually agree in writing on an alternate methodology, such alternate methodology shall become the Storage Capacity Test used to establish the Storage Capacity and Efficiency Rate for all purposes of this Agreement, including compensation under Exhibit C.
PART III - INITIAL SUPPLEMENTARY STORAGE CAPACITY TEST PROTOCOL A. Initial Supplementary Storage Capacity Test Protocol The initial Supplementary Storage Capacity Test Protocol outlined below shall not be binding on the Parties until delivery of the Supplementary Storage Capacity Test Protocol in accordance with Part II.I above and is included for the convenience of the Parties.
• Procedure:
(1) System Starting State: The Storage Facility shall be balanced using OEM procedures as appropriate and will be in the on-line state at the Minimum Storage Level.
(2) Record the initial value of the Storage Facility State-of-Charge (“SOC”). (3) Charge the Storage Facility at the maximum charging level until the battery reaches the maximum SOC allowed at that rate. Continue charging the Storage Facility at the fixed maximum battery voltage (CV charging). Stop the Storage Facility charge routine when the battery has reached the desired SOC, not to exceed six hours of charging (unless there is insufficient Energy generation from the Generating Facility to charge the Storage Facility, in which case, such six hour limitation shall not be applicable).
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit O - 6
(4) Record and store the AC energy charged to the Storage Facility as measured at the Storage Facility Meter (“Energy In”). All separately metered Storage Facility Station Use and Electrical Losses to the Delivery Point shall be excluded from the measurement of Energy In.
(5) Following an agreed-upon rest period, command a real power discharge that results in an AC power output of the Storage Facility’s maximum discharging level and maintain the discharging state until the earlier of (a) the Facility has discharged at the maximum discharging level for four (4) consecutive hours, (b) the Storage Facility has reached the Minimum Storage Level, or (c) the sustained discharging level is at least 2% less than the maximum discharging level.
(6) Record and store the AC Energy discharged (in MWh) as measured at the Storage Facility Meter. Such data point shall be used for purposes of calculation of the Storage Capacity.
(7) Record and store the AC Energy discharged (in MWh) as measured at the Storage Facility Meter. Such data point shall be used for purposes of calculation of the Efficiency Rate.
(8) If the Storage Facility has not reached the Minimum Storage Level pursuant to Part III.A.5, continue discharging the Storage Facility until it reaches the Minimum Storage Level.
(9) Record and store the AC Energy discharged (in MWh) as measured at the Storage Facility Meter. “Energy Out” means that total AC Energy discharged (in MWh) as measured at the Storage Facility Meter from the commencement of discharging pursuant to Part III.A.5 until the Storage Facility has reached the Minimum Storage Level pursuant to either Part III.A.5 or Part III.A.8, as applicable. All separately metered Storage Facility Station Use and Electrical Losses to the Delivery Point shall be excluded from the measurement of Energy Out.
• Test Results
(1) The resulting Efficiency Rate is calculated as Energy Out/Energy In. (2) The resulting Storage Capacity measurement is the sum of the total Discharging Energy at the Storage Facility Meter divided by four (4) hours.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC
Exhibit P - 1
EXHIBIT P
STORAGE AVAILABILITY
Monthly Storage Availability
(a) Calculation of Monthly Storage Availability. Seller shall calculate the “Monthly Storage Availability” in a given month using the formula set forth below:
Monthly Storage Availability (%) =
[MNTHHRSm - UNAVAILHRSm ]
MNTHHRSm
where:
m = relevant month “m” in which availability is calculated; MNTHHRSm is the total number of On-Peak Hours for the month; UNAVAILHRSm, is the total number of On-Peak Hours in the month during which the Storage Facility was unavailable to deliver Storage Product (as such unavailability is pro rated for any Storage Contract Capacity that is available to deliver Storage Product at any given time) for any reason other than the occurrence of any of the following (each, an “Excused Event”): a Force Majeure Event, Buyer Bid Curtailment, Buyer Curtailment Orders, Curtailment Orders, System Emergencies, limitations contained in the Operating Restrictions set forth in Exhibit Q, a Storage Capacity Test or measurement of the Efficiency Rate, in each case, performed at Buyer’s request, or a Planned Outage of the Storage Facility not to exceed To be clear, hours of unavailability caused by any Excused Event will not be included in UNAVAILHRSm for such month. Any other event that results in unavailability of the Storage Facility for less than a full hour will count as an equivalent percentage of the applicable hour(s) for this calculation.
If the Storage Facility or any component thereof was previously deemed unavailable for an hour or part of an hour, and Seller provides a revised Notice indicating the Storage Facility is available for that hour or part of an hour by 5:00 a.m. of the morning Buyer schedules or bids the Storage Facility in the Day-Ahead Market, the Storage Facility will be deemed to be available to the extent set forth in the revised Notice.
If the Storage Facility or any component thereof was previously deemed unavailable for an hour or part of an hour and Seller provides a revised Notice indicating the Storage Facility is available for that hour or part of an hour at least sixty (60) minutes prior to the time the Buyer is required to schedule or bid the Storage Facility in the Real-Time Market, and the Storage Facility is dispatched in the Real-Time Market, the Storage Facility will be deemed to be available to the extent set forth in the revised Notice.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit P - 2
Availability Adjustment
The applicable “Availability Adjustment” or “AA” is calculated as follows:
(i) If the Monthly Storage Availability is greater than or equal to the Guaranteed Storage Availability, then:
AA = 100%
(ii) If the Monthly Storage Availability is less than the Guaranteed Storage Availability, but greater than or equal to then:
(iii) If the Monthly Storage Availability is less than then:
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC
Exhibit Q - 1
EXHIBIT Q
OPERATING RESTRICTIONS
Maximum Storage Level: 368 MWh
Minimum Storage Level: 0 MWh
Maximum Charging Capacity: 92 MW
Minimum Charging Capacity: 0.01 MW
Maximum Discharging Capacity: 92 MW
Minimum Discharging Capacity: 0.01 MW
Maximum State of Charge (SOC)
during Charging:
100%
Minimum State of Charge (SOC)
during Discharging:
0%
Ramp Rate:
Annual Cycles: Maximum of 365 Full Cycle Equivalents per Contract Year with no monthly cap.
Daily Dispatch Limits: Charging: 2 per day
Discharging: 2 per day
Partial Charging/Discharging: No limits beyond the
operational conditions specified.
Maximum Time at Minimum
Storage Level (after Discharging
to Minimum State of Charge):
Other Operating Limits: 1. Storage Facility to be charged only from the Generating Facility prior to the Commercial
Operation Date.
2. Storage Facility may be charged with Energy from
the CAISO Grid after the Commercial Operation
Date pursuant to the terms of Section 4.5(f).
3. All manual dispatch commands by the Buyer or
Buyer’s SC must use the supplied energy
management system.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit Q - 2
Seller and Buyer agree that Charging Notices and Discharging Notices shall be deemed modified to the extent necessary to comply with the Operating Restrictions.
The following capitalized terms have the meanings ascribed to them below in this Exhibit Q:
“Full Cycle” means a quantity of Discharging Energy (in MWh) has been discharged from the Storage Facility equal to the Storage Contract Output.
“Full Cycle Equivalent” means either (a) a Full Cycle or (b) the sum of more than one Partial Cycles that equal the Discharging Energy in one Full Cycle. “Partial Cycle” means a quantity of Discharging Energy (in MWh) has been discharged from the Storage Facility that is less than one hundred percent (100%) of the Storage Contract Output.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit R - 1
EXHIBIT R
COMMUNITY BENEFIT
Buyer is a not-for-profit public agency whose core mission includes local investment in the communities that it serves. Seller pledges to contribute to various community benefit initiatives that
directly benefit stakeholders in Buyer’s service territory. Seller agrees to make this payment of after the Commercial Operation
Date. Such funds will be utilized for community benefit initiatives only, which may include programs focused on housing, education, workforce training, and environmental stewardship/habitat improvement. Seller will consult with Buyer to identify community benefit initiatives that are of mutual interest.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit S - 1
EXHIBIT S
DIVERSITY REPORTING
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit S - 2
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit S - 3
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit S - 4
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit S - 5
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit S - 6
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit S - 7
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit S - 8
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit S - 9
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit S - 10
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit S - 11
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit T - 1
EXHIBIT T
METERING
Seller may add meters or move meters to different locations based on final design of the Facility so long as the Storage Facility is AC coupled, the metering provisions of this Agreement and the Interconnection Agreement can be complied with, such changes are consistent with the requirements of the CAISO Tariff, including the ability of the Facility to maintain a separate CAISO Resource IDs for the Generating Facility and the Storage Facility, and such metering changes do not affect the measurement or calculation of Generating Facility Energy, Facility Energy, Charging Energy, Discharging Energy, Electrical Losses and Station Use as required under this Agreement. Subject to the foregoing requirements, any such changes shall not be deemed to be inconsistent with this Exhibit T.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit U - 1
EXHIBIT U
POLLINATOR SCORECARD
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit V - 1
EXHIBIT V
FORM OF LIMITED ASSIGNMENT AGREEMENT
This Limited Assignment Agreement (this “Assignment Agreement” or “Agreement”) is entered into as of [______________] by and among Golden Fields Solar IV, LLC, a Delaware limited liability company (“PPA Seller”), Marin Clean Energy, a California joint powers authority (“PPA Buyer”), and [Limited Assignee], a [______________] (“Limited Assignee”), and relates to that certain Amended and Restated Renewable Power Purchase Agreement (the “PPA”) between PPA Buyer and PPA Seller as described on Appendix 1.
In consideration of the premises above and the mutual covenants and agreements herein set forth, PPA Seller, PPA Buyer and Limited Assignee (the “Parties” hereto; each is a “Party”) agree as follows:
1. Limited Assignment and Delegation.
(a) PPA Buyer hereby assigns, transfers and conveys to Limited Assignee 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 other rights of PPA Buyer under the PPA are expressly reserved for PPA Buyer, including the right to receive any additional quantities of products beyond the limits set forth in Appendix 1.
(b) PPA Buyer hereby delegates to Limited Assignee the obligation to pay for all Assigned Products that are actually delivered to Limited Assignee 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 (A) PPA Seller will only be obligated to deliver a single consolidated invoice during the Assignment Period (with a copy to Limited Assignee consistent with Section 1(d) hereof), and (B) Limited Assignee and PPA Buyer’s respective payments during the Assignment Period shall be administered by a custodian who will transfer to PPA Seller on each payment due date the amounts paid by Limited Assignee and PPA Buyer with respect to each invoice (and it is anticipated that the custodian will consolidate the amounts received from Limited Assignee and PPA Buyer and make a single wire transfer to PPA Seller with respect to each invoice).To the extent Limited Assignee fails to pay the Delivered Product Payment Obligation by the due date for payment set forth in the PPA (without regard to any additional cure period provided in Section 11.1(a)(i) of the PPA), notwithstanding anything in this Agreement to the contrary, PPA Buyer agrees that it remains responsible for such payment and that it will be an Event of Default pursuant to Section 11.1(a)(i) if PPA Buyer does not make AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit V - 2
such payment within five (5) Business Days (as defined in the PPA) of receiving notice of such non-payment from PPA Seller. Notwithstanding the administration of payment obligations by a custodian, PPA Buyer and Limited Assignee shall be liable for their respective payment obligations in accordance with the terms and conditions of the PPA and this Agreement, including for any failure to receive payment from such custodian by the applicable payment due date.
(c) Limited Assignee 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 between PPA Buyer and PPA Seller pursuant to the terms of the PPA; provided that (i) title to Assigned Product will pass to Limited Assignee upon delivery by PPA Seller in accordance with the PPA; (ii) PPA Buyer is hereby authorized by Limited Assignee to and shall act as Limited Assignee’s agent with regard to scheduling Assigned Product; (iii) PPA Buyer will provide copies to Limited Assignee of any Notice (as defined in the PPA) of a Force Majeure Event or Event of Default or default, breach or other occurrence that, if not cured within the applicable grace period, could result in an Event of Default, contemporaneously upon delivery thereof to PPA Seller and promptly after receipt thereof from PPA Seller; (iv) at Limited Assignee’s request, PPA Seller will provide copies to Limited Assignee of annual forecasts and monthly forecasts of Generating Facility Energy provided pursuant to Sections 4.3(a) and (b) of the PPA; (v) at Limited Assignee’s request, PPA Seller will provide copies to Limited Assignee of all invoices and supporting data provided to PPA Buyer pursuant to Section 8.1 of the PPA, provided that any payment adjustments or subsequent reconciliations occurring after the date that is 10 days prior to the payment due date for a monthly invoice, including pursuant to Section 8.4 of the PPA, 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 Limited Assignee; and (vi) PPA Buyer and PPA Seller, as applicable, will provide copies to Limited Assignee of any other information reasonably requested by Limited Assignee relating to Assigned Products. (e) PPA Seller acknowledges that (i) Limited Assignee intends to immediately transfer title to any Assigned Products received from PPA Seller through one or more intermediaries such that all Assigned Products will be re-delivered to PPA Buyer, and (ii) Limited Assignee has the right to purchase from such intermediaries’ receivables due from PPA Buyer for any such Assigned Products. To the extent Limited Assignee purchases from such intermediaries any such receivables due from PPA Buyer, Limited Assignee may transfer such receivables to PPA Seller and apply the face amount thereof as a reduction to any Delivered Product Payment Obligation.
(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 Product to CAISO, including where PPA Buyer is acting as Scheduling Coordinator for the Facility (as defined in the PPA) and through scheduling of ISTs. Nothing in this Agreement modifies or amends any rights or obligations of PPA Buyer and PPA Seller AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit V - 3
under the PPA with respect to CAISO revenues and costs. As used in this clause (f), 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.
2. Assignment Early Termination.
(a) The Assignment Period may be terminated early upon the occurrence of any of the following:
(1) delivery of a written notice of termination by either Limited Assignee or PPA Buyer to each of the other Parties hereto;
(2) delivery of a written notice of termination by PPA Seller to each of Limited Assignee and PPA Buyer following Limited Assignee’s failure to pay when due any amounts owed to PPA Seller in respect of any Delivered Product Payment Obligation and such failure continues for one (1) Business Day (as defined in the PPA) following receipt by Limited Assignee of written notice thereof; (3) delivery of a written notice by PPA Seller if any of the events described in Section
11.1(a)(iv) of the PPA occurs with respect to Limited Assignee (or any entity providing a parent guaranty on behalf of Limited Assignee); or (4) delivery of a written notice by Limited Assignee if any of the events described in Section 11.1(a)(iv) of the PPA occurs with respect to PPA Seller. (b) The Assignment Period will end as of the date specified in the termination notice, 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 clauses (a)(1) or (a)(2) above. (c) All Assigned Rights and Obligations shall revert from Limited Assignee to PPA Buyer upon the expiration of or early termination of the Assignment Period, provided that (i) Limited Assignee shall remain responsible for the Delivered Product Payment Obligation with respect to any Assigned Product delivered to Limited Assignee 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.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit V - 4
3. Representations and Warranties. The PPA Seller and the PPA Buyer represent and warrant to Limited Assignee that (a) the PPA is in full force and effect; (b) no event or circumstance exists (or would exist with the passage of time or the giving of notice) that would give either of them the right to terminate the PPA or suspend performance thereunder; and (c) all of its obligations under the PPA required to be performed on or before the Assignment Period start date have been fulfilled.
4. Notices. Any notice, demand, or request required or authorized by this Assignment Agreement to be given by one Party to another Party shall be delivered in accordance with Article 9 of the PPA and to the addresses of each of PPA Seller and PPA Buyer specified in the PPA. PPA Seller and PPA Buyer agree to notify Limited Assignee of any updates to such notice information.
Notices to Limited Assignee shall be provided to the following address, as such address may be updated by Limited Assignee from time to time by notice to the other Parties:
[Limited Assignee]
5. Miscellaneous. Article 12 (Limitation of Liability and Exclusion of Warranties), Sections
13.2(e) and (f) (Buyer’s Representations and Warranties), Article 18 (Confidential Information), Sections 19.2 (Amendments), 19.4 (No Agency, Partnership, Joint Venture or Lease), 19.5 (Severability), 19.6 (Mobile-Sierra), 19.7 (Counterparts), 19.8 (Electronic Delivery), 19.9 (Binding Effect) and 19.10 (No Recourse to Members of Buyer) of the PPA are incorporated by reference into this Agreement, mutatis mutandis, as if fully set forth herein.
6. U.S. Resolution Stay Provisions. The Parties hereby confirm that they are adherents to the ISDA 2018 U.S. Resolution Stay Protocol (“ISDA U.S. Stay Protocol”), the terms of the ISDA U.S. Stay Protocol are incorporated into and form a part of this Agreement, and for the purposes of such incorporation, (i) Limited Assignee shall be deemed to be a Regulated Entity, (ii) each of PPA Buyer and PPA Seller shall be deemed to be an Adhering Party, and (iii) this Agreement shall be deemed a Protocol Covered Agreement. In the event of any inconsistencies between this Agreement and the ISDA U.S. Stay Protocol, the ISDA U.S. Stay Protocol will prevail.
7. Governing Law, Jurisdiction, Waiver of Jury Trial.
(a) Governing Law. This Assignment Agreement and the rights and duties of the Parties under this Assignment Agreement will be governed by and construed, enforced and performed in accordance with the laws of the State of California, without reference to any conflicts of laws provisions that would direct the application of another jurisdiction’s laws.
(b) Jurisdiction. Each Party submits to the exclusive jurisdiction of the federal courts of the United States of America for the Northern District of California sitting in the city and county of San Francisco.
(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.
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit V - 5
IN WITNESS WHEREOF, the Parties have executed this Assignment Agreement effective as of the date first set forth above.
GOLDEN FIELDS SOLAR IV, LLC MARIN CLEAN ENERGY
By: …………………………………….. By: ………………………………….
Name: Name:
Title: Title:
[LIMITED ASSIGNEE]
By: ………………………………………
Name:
Title:
Execution and delivery of the foregoing Assignment Agreement is hereby approved. [ISSUER]
By: …………………………………….
Name:
Title:
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC Exhibit V - 6
Appendix 1
Assigned Rights and Obligations
PPA: The Amended and Restated Renewable Power Purchase Agreement, dated [___________], by and between Marin Clean Energy and Golden Fields Solar IV, LLC, a Delaware limited liability company.
“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 4 of the Assignment Agreement and (ii) the end of the Delivery Term under the PPA. [The Assignment Period must end no less than 18 months following the Assignment Period Start Date and no later than the end of the Delivery Term under the PPA.]
Assigned Product: [Describe and define]
Further Information: [Include, if any] [To include transfer and settlement mechanics for RECs, as applicable.]
AI #05 C.2: Amended and Restated Renewable PPA Between MCE and Golden Fields Solar IV, LLC December 1, 2023
TO: MCE Technical Committee
FROM: Bill Pascoe, Senior Power Procurement Manager
RE: Proposed Amended and Restated Power Purchase and Sale Agreement with G2 Energy, Ostrom Road LLC (Agenda Item
#05 C.3)
ATTACHMENT: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC
Dear Technical Committee Members:
Summary:
MCE and G2 Energy, Ostrom Road LLC are parties to a power purchase and sale agreement (“PPA” or “Ostrom”), executed December 3, 2010, for deliveries from a 1.6 megawatt (“MW”) landfill gas facility located in Wheatland, California.
The Ostrom landfill gas facility consists of two engines, 1.6 MW each. MCE buys the output from one engine and Silicon Valley Power (SVP) buys the output from the second engine. SVP schedules the entire resource into the marketplace, including MCE’s share, and receives CAISO revenue. MCE bills SVP for the CAISO revenue associated with its engine. SVP's contract with G2 Energy ends in January 2024 and G2 Energy presented a proposal for MCE to buy the output from the second 1.6 MW engine.
The Ostrom facility is valuable to MCE’s portfolio because it provides baseload1 power as well as Resource Adequacy. G2 Energy’s offer for the output from the second 1.6 MW engine is in line with other recent offers for baseload power that MCE has contracted for. While this is a relatively small facility, the addition of the second engine also gives MCE complete control over scheduling the facility and simplifies administration of the agreement.
1 Baseload power plants provide consistent round the clock power that doesn’t typically vary from hour to hour.
Fiscal Impacts:
The PPA price is competitive with similar projects for baseload that were submitted during Open Season and other ad hoc offers. MCE would benefit from the fixed cost of the bundled energy and RA. Initial costs would be accounted for in the Fiscal Year 2023/24 budget and future costs would be accounted for starting in Fiscal Year 2024/25.
Recommendation:
Approve the Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC.
AMENDED AND RESTATED
POWER PURCHASE AND SALE AGREEMENT
MARIN CLEAN ENERGY
AND
G2 ENERGY, OSTROM ROAD LLC
Dated ___________, 2023
AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC Table of Contents - i
TABLE OF CONTENTS
ARTICLE I INCORPORATION OF PREAMBLE AND RECITALS;
DEFINITIONS ..................................................................................................2 Section 1.01 INCORPORATION OF PREAMBLE AND RECITALS .......................... 2 Section 1.02 DEFINITIONS ............................................................................................ 2 ARTICLE II TERM; CONDITIONS PRECEDENT ................................................................2 Section 2.01 TERM ......................................................................................................... 2 Section 2.02 NEW GENERATION FACILITY ............................................................. 2 Section 2.03 MILESTONES ............................................................................................ 3 Section 2.04 CONDITIONS PRECEDENT .................................................................... 3 Section 2.05 FAILURE TO COMPLETE THE CONDITIONS PRECEDENT ............. 4 Section 2.06 STATUS OF MILESTONES AND CONDITIONS PRECEDENT .......... 4 ARTICLE III OPERATIONAL COVENANTS .........................................................................5 Section 3.01 DEDICATION OF OUTPUT ..................................................................... 5 Section 3.02 INSURANCE .............................................................................................. 5 Section 3.03 MCE’S ACCESS RIGHTS ......................................................................... 5 Section 3.04 OPERATING STANDARDS ..................................................................... 5 Section 3.05 AVERAGE AVAILABILITY .................................................................... 5 Section 3.06 ENVIRONMENTAL ATTRIBUTES ........................................................ 6 Section 3.07 LIMITATIONS ON SELLER’S AND SELLER’S AFFILIATES’
ABILITY TO MAKE OR AGREE TO THIRD PARTY SALES
FROM THE FACILITY AFTER CERTAIN TERMINATIONS
OF THIS AGREEMENT ............................................................................ 6 ARTICLE IV PURCHASE AND SALE OF NET ELECTRICAL OUTPUT;
FORCE MAJEURE; RESOURCE ADEQUACY .........................................7 Section 4.01 PURCHASE AND SALE OF NET ELECTRICAL OUTPUT; TRANSMISSION ....................................................................................... 7 Section 4.02 SCHEDULING COORDINATOR SERVICES ......................................... 7 Section 4.03 FORCE MAJEURE .................................................................................... 7 Section 4.04 RESOURCE ADEQUACY ........................................................................ 8 ARTICLE V ENERGY SCHEDULE; SCHEDULED OUTAGES; EMERGENCIES ..........8 Section 5.01 ENERGY SCHEDULE .............................................................................. 8 Section 5.02 SCHEDULED OUTAGES ......................................................................... 9 Section 5.03 CAISO, PG&E AND/OR MCE SYSTEM EMERGENCY ....................... 9 Section 5.04 BUYER CURTAILMENT ......................................................................... 9 Section 5.05 MINIMUM OPERATING LEVELS ........................................................ 10 ARTICLE VI CONTRACT PRICE; GOVERNMENTAL CHARGES ................................10 Section 6.01 CONTRACT PRICE ................................................................................. 10 AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC Table of Contents - ii
Section 6.02 RENEWABLE ENERGY ASSUMPTION .............................................. 10 Section 6.03 CHARGES ................................................................................................ 10 ARTICLE VII METERING .......................................................................................................10 Section 7.01 METERING .............................................................................................. 10 Section 7.02 CAISO STANDARDS.............................................................................. 10 Section 7.03 TESTING AND CALIBRATION ............................................................ 11 Section 7.04 INACCURATE METERS ........................................................................ 11 ARTICLE VIII BILLING ...........................................................................................................11 Section 8.01 BILLING PERIOD ................................................................................... 11 Section 8.02 TIMELINESS OF PAYMENT ................................................................. 11 Section 8.03 DISPUTES AND ADJUSTMENTS ......................................................... 11 ARTICLE IX EVENTS OF DEFAULT ....................................................................................12 Section 9.01 EVENTS OF DEFAULT .......................................................................... 12 Section 9.02 SUSPENSION OF PERFORMANCE; TERMINATION ........................ 13 ARTICLE X TERMINATION ...................................................................................................13 Section 10.01 TERMINATION ....................................................................................... 13 Section 10.02 NOTICE OF TERMINATION ................................................................. 13 Section 10.03 CLOSE-OUT ............................................................................................ 14 ARTICLE XI REPRESENTATIONS, WARRANTIES & COVENANTS............................14 Section 11.01 REPRESENTATIONS AND WARRANTIES......................................... 14 Section 11.02 RENEWABLE ENERGY ......................................................................... 14 Section 11.03 RENEWABLE ENERGY ......................................................................... 15 ARTICLE XII INDEMNIFICATION .......................................................................................15 Section 12.01 GENERAL INDEMNITY ........................................................................ 15 Section 12.02 VIOLATION OF GOVERNMENTAL APPROVALS ............................ 15 ARTICLE XIII SELLER’S GUARANTY REQUIREMENTS ..............................................15 Section 13.01 DAMAGES ............................................................................................... 15 ARTICLE XIV MISCELLANEOUS .........................................................................................16 Section 14.01 CONFIDENTIALITY............................................................................... 16 Section 14.02 EXCLUSIVITY ........................................................................................ 16 Section 14.03 OPTION TO PURCHASE ........................................................................ 16 Section 14.04 TITLE AND RISK OF LOSS ................................................................... 17 Section 14.05 DISPUTE RESOLUTION ........................................................................ 17 Section 14.06 ASSIGNMENT ......................................................................................... 18 Section 14.07 FINANCING............................................................................................. 18 Section 14.08 GOVERNING LAW; VENUE ................................................................. 19 Section 14.09 NOTICES .................................................................................................. 19 AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC Table of Contents - iii
Section 14.10 AUDIT ...................................................................................................... 20 Section 14.11 JOINT EFFORT........................................................................................ 21 Section 14.12 RELATIONSHIP OF THE PARTIES ...................................................... 21 Section 14.13 NO THIRD PARTY BENEFICIARY ...................................................... 21 Section 14.14 NO RECOURSE AGAINST CONSTITUENT MEMBERS OF BUYER ..................................................................................................... 21 Section 14.15 COUNTERPARTS ................................................................................... 21 Section 14.16 ENTIRE AGREEMENT ........................................................................... 21 EXHIBIT A - DEFINITIONS ...................................................................................................... 23 EXHIBIT B - DEFINITION OF ACTIVITY ............................................................................... 28 EXHIBIT C - DEVELOPER AND PERMITTING INFORMATION ........................................ 30 EXHIBIT D - TERM .................................................................................................................... 31 EXHIBIT E - CONTRACT PRICE .............................................................................................. 32 EXHIBIT F - INSURANCE COVERAGE REQUIREMENTS .................................................. 34 AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 1 18058184.5 [10466-35]
AMENDED AND RESTATED
POWER PURCHASE AND SALE AGREEMENT
by and between
Marin Clean Energy
and
G2 Energy, Ostrom Road LLC
PREAMBLE
This Amended and Restated Power Purchase and Sale Agreement (the “Agreement”) is made and entered into this ___ day of _______ 2023 (the “Signing Date”), by and between Marin Clean Energy, a California joint powers authority (f.k.a. Marin Energy Authority) (“MCE” or “Buyer”) and G2 Energy, Ostrom Road LLC, a Georgia limited liability company (“Seller”). MCE and Seller may be referred to individually as a “Party,” or collectively as the “Parties.” Capitalized terms in this Agreement shall have the meanings set forth in Exhibit A.
RECITALS
WHEREAS,
A. MCE and Seller are parties to a Power Purchase and Sale Agreement dated December 3, 2010, as amended by (i) a first Letter Agreement dated January 27, 2011, (ii) a second Letter Agreement dated June 18, 2012, (iii) a third Letter Agreement dated June 18, 2012, and (iv) a Third Amendment of Power Purchase Agreement dated July 31, 2017 (collectively, the “Original PPA”);
B. In the Original PPA, the Seller is incorrectly identified as “G2 Energy (Ostrom Road) LLC,” a Georgia limited liability company, but is in fact and has at all times been G2 Energy, Ostrom Road, LLC, a Georgia limited liability company, the Seller under the Original PPA and this Agreement.
C. The Parties wish to amend and restate the Original PPA to incorporate the prior four amendments into one document and to add a second engine to the facility contemplated by the Original PPA. The facility, as modified by the addition of the second engine, is more fully described in Exhibit B (the “Facility”). Both engines will be fueled exclusively with Landfill Gas. The Facility is located in Wheatland, California; D. Seller has represented to MCE that the Facility is operational and able to deliver power on January 2, 2024 (the “Effective Date”);
E. MCE is interested in adding competitively priced renewable energy to its portfolio of power purchases;
F. Seller desires to sell, and MCE desires to purchase, on the terms set forth in this Agreement, the net output of energy from the Facility, and all of the CEC Certified Electricity (as that term is defined herein) related to the generation of such energy; and AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 2 18058184.5 [10466-35]
G. MCE and Seller desire to enter into this Agreement to confirm the specific terms and conditions of the purchase and sale of Net Electrical Output and Installed Capacity (as such terms are defined herein) from the Facility.
Now, therefore, the Parties agree as follows:
ARTICLE I
INCORPORATION OF PREAMBLE AND RECITALS; DEFINITIONS
Section 1.01 INCORPORATION OF PREAMBLE AND RECITALS
The Parties to this Agreement agree and attest to the truth and accuracy of the provisions contained in the Preamble and Recitals set forth above. The provisions of the Preamble and Recitals are hereby incorporated and made a part of this Agreement by this reference. The Parties agree that this Agreement has been entered into, at least in part, in consideration of the provisions contained in the Preamble and Recitals, as well as the provisions contained in the balance of this Agreement.
Section 1.02 DEFINITIONS
Definitions of the terms used in this Agreement are those found in Exhibit A attached hereto and incorporated herein.
ARTICLE II
TERM; CONDITIONS PRECEDENT
Section 2.01 TERM
The Term of this Agreement is set forth in Exhibit D. This Agreement governs the transactions contemplated by this Agreement on an after the Effective Date until the end of the Term. The Parties, intending to be bound by this Agreement, have entered into this Agreement as of the Signing Date. However, the Parties agree that the Original PPA remains in effect in accordance with its terms with respect to periods before the Effective Date and, without limiting the generality of the foregoing, shall govern the settlement of transactions occurring before the Effective Date.
Section 2.02 NEW GENERATION FACILITY
Upon execution of the Power Purchase Agreement with MCE, Seller will commence development activity at the Ostrom Road Landfill Gas Project. Seller will order the CAT 3520 engine for May 30, 2011 delivery. Seller will subsequently purchase all other major equipment items after construction financing is secured. The Interconnection Agreement will then be executed and the Interconnection construction will begin. Any certifications, registrations or additional agreements needed with the CAISO and PG&E will then be secured. Site preparation will begin in anticipation for arrival of the major components. Upon arrival of the major equipment components on site, the construction of the Facility will commence. Testing and Commissioning will be the last steps prior to Commercial Operations. Seller’s schedule and milestones are set forth in Section 2.03(a).
AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 3 18058184.5 [10466-35]
Section 2.03 MILESTONES
(a) Milestones to be met
Seller shall meet the following milestones (the “Milestones”) on or before the dates set forth below:
Air Permit Application filed June 1, 2009
Electrical Interconnection Application filed July 1, 2009 Receipt of all permits necessary to commence
construction
September 17, 2010
Power Purchase Agreement executed December 31, 2010
Site ready for construction, including receipt of any
and all necessary zoning approvals, easements and
rights of way
December 31, 2010
Engineering, Procurement and Construction Contract
executed
January 31, 2011
CAT 3520 engine ordered January 31, 2011
Site Lease January 31, 2011
Close of construction financing February 28, 2011
Electrical Interconnection Agreement Executed March 15, 2011 Construction begins April 1, 2011
Receipt of major equipment on site May 1, 2011
Electrical interconnection completed July 31, 2011
(b) Reporting on Milestones
Seller shall provide MCE with monthly reports on progress on the Milestones on or before the 30th of each month until the completion of all Milestones.
Section 2.04 CONDITIONS PRECEDENT
MCE shall have no obligation whatsoever to purchase the Net Electrical Output from the Facility under this Agreement until Seller completes to the MCE’s reasonable satisfaction each of the following conditions (the “Conditions Precedent”):
(a) All Facility systems necessary for continuous operation and metering are tested and certified;
AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 4 18058184.5 [10466-35]
(b) All applicable agreements between Seller and the California Independent System Operator (the “CAISO”) are signed and a copy delivered to the MCE at the address in this Agreement, including a Participating Generator Agreement, a Meter Service Agreement, and a Letter of Intent;
(c) All applicable agreements between Seller and PG&E are signed and a copy delivered to the MCE at the address in this Agreement, including an interconnection facilities agreement between Seller and PG&E (and CAISO, if necessary) which allows interconnection of the Facility to the PG&E distribution system at Seller’s Interconnection point in Wheatland (the “Interconnection Facilities Agreement”); (d) All applicable agreements between Seller and Norcal Waste Systems are signed and a copy delivered to MCE at the address in this Agreement, including a Landfill Gas Rights Agreement and a Site Agreement reasonably acceptable to MCE; (e) The electrical interconnection facilities of Seller have demonstrated the ability to accept the full-load output of the Facility;
(f) All applicable regulatory authorizations, approvals and permits for the continuous operation of the Facility (“Governmental Approvals”) are obtained; (g) Seller will have the Facility Certified as an “Eligible Renewable Energy Resource” as defined in Section 399.12(a) of the California Public Utilities Code (2003). Prior to the Date of Operation, Seller shall also assist MCE in completing all applicable registration requirements of the Western Renewable Energy Generation Information System (WREGIS), including the completion and submittal of all applicable registration forms and supporting documentation, which may include applicable interconnection agreements, informational surveys related to the Facility and other appropriate documentation required to effect Facility registration with WREGIS. Seller shall also take all other actions necessary to ensure that the energy produced from the Facility is tracked for purposes of satisfying the California Renewables Portfolio Standard requirements, as may be amended or supplemented by the CPUC or CEC from time to time; and (h) Seller successfully completes an initial Facility performance test, using industry accepted testing procedures, which demonstrates peak facility electrical output of no less than 80 percent of the Installed Capacity.
Section 2.05 FAILURE TO COMPLETE THE CONDITIONS PRECEDENT If Seller fails to complete the Conditions Precedent in Section 2.04(a)-(g) by August 31, 2013, or the Conditions Precedent in Section 2.04(h) by the Date of Operation, then MCE shall have the right, in its sole discretion, to terminate this Agreement, and neither Party shall have any further liability hereunder.
Section 2.06 STATUS OF MILESTONES AND CONDITIONS PRECEDENT The Parties acknowledge and agree that, as of the Signing Date, the Milestones and Conditions Precedent set forth in this Article II have been satisfied. Seller covenants, represents and warrants AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 5 18058184.5 [10466-35]
to MCE that the Facility is in Commercial Operation on the Signing Date and will remain in Commercial Operation as of the Effective Date and thereafter.
ARTICLE III
OPERATIONAL COVENANTS
Section 3.01 DEDICATION OF OUTPUT
Throughout the Term of this Agreement, Seller agrees that all of the Net Electrical Output and Installed Capacity from the Facility shall be sold exclusively to MCE, together with all Environmental Attributes associated with this electrical output, and Installed Capacity, but excluding Excluded Products. All electricity sold under this Agreement will be Qualified Renewable and certification for such electricity will be maintained with WREGIS by Seller.
Section 3.02 INSURANCE
Throughout the Term of this Agreement, Seller shall maintain insurance in amounts and with carriers as attached to Exhibit F of this Agreement.
Section 3.03 MCE’S ACCESS RIGHTS
With reasonable prior notice, MCE shall have the right of access, at its expense, to visit the Facility at reasonable hours for any purpose reasonably connected with this Agreement; provided that such visits shall not materially interfere with the operations of the Facility.
Section 3.04 OPERATING STANDARDS
Throughout the Term of this Agreement, Seller shall operate the Facility in accordance with all applicable CAISO agreements, tariffs and standards, all applicable PG&E agreements and standards, and all Governmental Approvals. Further, Seller shall operate and maintain the Facility:
(a) In accordance with generally accepted industry practices; (b) Consistent with prevailing customs and procedures of similar facilities; and (c) In accordance with all applicable laws.
Section 3.05 AVERAGE AVAILABILITY
Throughout the Term of this Agreement, Seller shall use commercially reasonable efforts to maintain the Facility in an “available” state such that the average availability of each engine included in the Facility, calculated on an annual basis, is greater than or equal to seventy percent (70%). Such an annual availability calculation shall exclude any period during the prior twelve (12) months in which:
(a) The parties’ obligations were suspended due to a Force Majeure; (b) A scheduled or unscheduled outage occurred;
AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 6 18058184.5 [10466-35]
(c) There is a lack of production or delivery of landfill gas, and/or (d) There is a Utility curtailment.
Section 3.06 ENVIRONMENTAL ATTRIBUTES
Throughout the Term of this Agreement, Seller shall provide and convey all Environmental Attributes from the Project associated with electrical generation to MCE as part of the Product being delivered. Seller shall hold the rights to all Environmental Attributes from the Project associated with electrical generation, excluding Excluded Products, and shall not sell such Environmental Attributes to any other party while this Agreement is in effect. Seller shall convey all such Environmental Attributes, excluding Excluded Products, to MCE as included in the delivery of the Product from the Project. Seller shall provide and convey all Installed Capacity from the Project associated with electrical generation to MCE as part of the product being delivered. Seller shall ensure the Renewable Energy Credits transferred to MCE under this Agreement are tracked in WREGIS and transferred on a monthly basis on the invoice payment date to MCE through WREGIS for purposes of satisfying MCE’s renewable energy goals, objectives and reporting obligations associated with the California Renewables Portfolio Standard program, as may be amended or supplemented by the CPUC or CEC from time to time.
Section 3.07 LIMITATIONS ON SELLER’S AND SELLER’S AFFILIATES’
ABILITY TO MAKE OR AGREE TO THIRD PARTY SALES FROM THE FACILITY
AFTER CERTAIN TERMINATIONS OF THIS AGREEMENT
If Seller terminates this Agreement, as provided in Section 10.01(c), or if Buyer terminates this Agreement as provided in Section 10.01(c) or (d), neither Seller nor Seller’s Affiliates may sell, or enter into a contract to sell, CEC Certified Electricity or Environmental Attributes, generated by, associated with or attributable to the facility installed at the Premises to a party other than Buyer for a period of three (3) years following the effective date of such termination (the “Restricted Period”).
This prohibition on contracting and sale will not apply if, before entering into such contract or making a sale to a party other than Buyer, Seller or Seller’s Affiliate provides Buyer with a written offer to sell CEC Certified Electricity and Environmental Attributes to Buyer at the Contract Price and on other terms and conditions materially similar to the terms and conditions contained in this Agreement and Buyer fails to accept such offer within sixty (60) days after Buyer’s receipt thereof.
Neither Seller nor Seller’s Affiliates may sell or transfer the Facility, or any part thereof, or land rights or interests in the Premises (including the Interconnection Queue Position) during the Restricted Period so long as the limitations contained in this Section 3.07 apply, unless the transferee agrees to be bound by the terms set forth in this Section 3.07 pursuant to a written agreement approved by Buyer. Upon termination of this Agreement pursuant to the Sections referenced in the first paragraph of this Section 3.07, Seller shall deliver a Notice of Buyer’s Rights in respect of the Premises that Buyer may record giving notice of Buyer’s rights under this Section 3.07.
Seller shall indemnify and hold Buyer harmless from all benefits lost and other damages sustained by Buyer as a result of any breach of the covenants contained within this Section 3.07.
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ARTICLE IV
PURCHASE AND SALE OF NET ELECTRICAL OUTPUT; FORCE MAJEURE;
RESOURCE ADEQUACY
Section 4.01 PURCHASE AND SALE OF NET ELECTRICAL OUTPUT;
TRANSMISSION
Throughout the Term of this Agreement, Seller shall sell and deliver to MCE at the Delivery Point, and MCE shall purchase, receive at the Delivery Point, and pay for, the net electrical output which shall include all CEC Certified Electricity, but not Excluded Products, of the Facility, as measured by the CAISO meter at the Delivery Point (the “Net Electrical Output”); provided, however, that MCE’s obligation to purchase, receive and pay for Net Electrical Output at the Delivery Point shall not exceed an aggregate cap of 28,032 MWh per calendar year (i.e., 1.6 MW x 8760 possible operating hours x two (2) engines).
(a) Seller shall arrange and be responsible for all costs, and all associated requirements of CAISO, PG&E and/or any other applicable transmission provider or control area operator to deliver the Net Electrical Output up to the Delivery Point, including all costs associated with metering and telemetry.
(b) MCE shall arrange and be responsible for paying for the costs from the Delivery Point to the MCE system, including transmission service, transmission congestion costs, and all associated requirements of CAISO, PG&E and/or any other applicable transmission provider or control area operator to schedule and receive the Net Electrical Output at and from the Delivery Point, including any transmission losses from the Delivery Point and any CAISO imbalance charges (including, but not limited to, energy charges) assessed based on imbalances between scheduled output and actual output.
Section 4.02 SCHEDULING COORDINATOR SERVICES
Throughout the Term of this Agreement, MCE shall provide (or cause to be provided), at its own expense, Scheduling Coordinator services for the Facility. Seller agrees to sign and deliver any documentation necessary to:
(a) designate MCE or its designee as Scheduling Coordinator for the Facility; and (b) allow MCE or designee to perform its various Scheduling Coordinator duties including, but not limited to, scheduling Facility output in accordance with CAISO’s tariff.
MCE reserves the right to substitute another entity as Scheduling Coordinator for the Facility upon reasonable advance notice to Seller.
Section 4.03 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. The Claiming Party shall remedy the Force Majeure with all reasonable dispatch. The non-Claiming Party shall not be required to AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 8 18058184.5 [10466-35]
perform or resume performance of its obligations to the Claiming Party corresponding to the obligations of the Claiming Party affected by Force Majeure.
Section 4.04 RESOURCE ADEQUACY
The parties acknowledge that the Facility has qualified for Resource Adequacy and will remain qualified for Resource Adequacy as of the Effective Date. MCE is entitled to any and all Resource Adequacy attributes from the Facility, and the parties shall cooperate and take such steps as may be reasonably required to document and confirm MCE’s receipt of Resource Adequacy attributes under this Agreement.
ARTICLE V
ENERGY SCHEDULE; SCHEDULED OUTAGES; EMERGENCIES
Section 5.01 ENERGY SCHEDULE
Seller will deliver energy on a ratable basis. Seller will coordinate maintenance and overhaul activities with MCE schedulers. Buyer agrees that Seller must perform Planned Maintenance Outages at the Project. Seller shall establish a schedule of Planned Maintenance Outages with due regard for (i) the manufacturer’s recommended maintenance procedures, (ii) Good Industry Practice, (iii) the provisions of this Agreement, (iv) the actual dispatch of the Project and (v) the generating unit’s point in the maintenance cycle. Seller shall submit to Buyer upon the Effective Date and then subsequently by November 1st of each calendar year a good faith estimate of a schedule for Planned Maintenance outages during the next calendar year (“Outage Schedule”).
Within ten (10) business days after its receipt of the Outage Schedule, MCE shall notify Seller in writing of any reasonable request for changes to the Outage Schedule. If MCE fails to provide such notice within the prescribed period, MCE shall be deemed to have approved the Outage Schedule. If MCE requests changes to the Outage Schedule, it shall suggest alternative dates in writing to Seller. If Seller can accommodate such alternate dates within accepted electrical practices, such alternate dates shall be accepted. Seller may make reasonable requests to change the approved Outage Schedule. If MCE can accommodate such alternate dates, or if the alternate dates are imposed on Seller by CAISO and/or PG&E under any rights CAISO or PG&E may have, such dates shall be accepted. Seller shall have the right to make reasonable adjustments to the schedule of Planned Maintenance Outages and shall provide at least forty-five (45) Days written notice to Buyer prior to any adjustments, provided that if Seller is not able to provide at least forty-five (45) Days prior notice, it will provide such notice at the earliest possible opportunity. With respect to the Net Electrical Output to be sold under this Agreement the following Scheduling Protocol will apply:
(a) Seller agrees to provide the MCE with sufficient data to support an accurate and unbiased forecast. This forecast shall be provided three (3) workdays before the end of each month.
At a minimum, monthly forecasts will be hourly kilowatt (kW) values by weekday, Saturday, and Sunday/Holiday.
(b) Hourly modifications to active schedules. Unless otherwise mutually agreed, either Buyer or Seller may make changes to active schedules by providing such changes to the other party with a minimum of 4 hours’ notice before the active hour to be changed. Changes to AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 9 18058184.5 [10466-35]
active schedules are limited to two (2) changes per day, excluding unscheduled outages or forced power reductions, unless otherwise agreed to between the parties. One request for a schedule change. All such changes must be made during the regular daytime hours the facility operator is on site unless otherwise agreed by the Parties. (c) MCE’s designated Power Traders/Schedulers are to be notified of all unplanned generation outages and forced power reductions immediately by phone, fax or email. (d) MCE, as part of its Scheduling Coordinator services, will use the forecasts, which are relevant to the Facility as the Facility’s “Energy Schedule” for the CAISO Day-Ahead and/or Hour-Ahead markets.
Section 5.02 SCHEDULED OUTAGES
(a) Seller will make its Installed Capacity available to MCE, except as necessary to comply with manufacturer’s recommendations for maintenance. If an outage is required, Seller will inform the MCE immediately and file required reports within 24 hours. Seller will use reasonable commercial efforts to deliver energy on a ratable basis. Seller will coordinate maintenance and overhaul activities with MCE schedulers. (b) Seller shall notify MCE of any outage not previously scheduled as soon as practicable after the condition becomes known to Seller. Changes, additions or modifications will be processed as planned and/or forced outages pursuant to CAISO and/or PG&E protocols and timelines. At a minimum, Seller shall follow all CAISO and/or PG&E outage coordination protocols.
Section 5.03 CAISO, PG&E AND/OR MCE SYSTEM EMERGENCY
In the event of a System Emergency and if requested to do so, Seller shall reduce the Facility’s output until the System Emergency is declared over or is otherwise resolved.
Section 5.04 BUYER CURTAILMENT
(a) For any hour when the Facility’s active schedule is changed at the request of Buyer pursuant to Section 5.01(b), the number of MWh that the Facility would otherwise have produced but for the active schedule change shall be “Deemed Delivered Energy.” Deemed Delivered Energy is calculated as the difference between: (a) Buyer’s MWh share of the actual Net Electrical Output from the Facility; and (b) Buyer’s average hourly MWh share of Net Electrical Output from the previous three (3) calendar months. For the avoidance of doubt, Deemed Delivered Energy shall not include any reduction in the Facility’s production that occurs as the result of any Seller-requested change to the active schedule, scheduled or unscheduled maintenance, or Force Majeure. (b) Buyer will compensate Seller for all Deemed Delivered Energy at the Contract Price. Seller shall identify any and all Deemed Delivered Energy as a separate line item on its monthly invoices to Buyer.
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Section 5.05 MINIMUM OPERATING LEVELS
The parties acknowledge that the units must operate at a combined minimum operating level of 1,200 kW to meet air quality standards and minimum fuel flows.
ARTICLE VI
CONTRACT PRICE; GOVERNMENTAL CHARGES
Section 6.01 CONTRACT PRICE
The contract price for Facility capacity and all Net Electrical Output metered and delivered under this Agreement is set forth in Exhibit E.
Section 6.02 RENEWABLE ENERGY ASSUMPTION
Seller expects to generate approximately 28,032 megawatt hours of renewable energy annually from the Facility. However, Seller’s actual generation hereunder may vary from said amounts.
MCE’s obligation to receive and pay for Net Electrical Output is subject to the cap set forth in Section 4.01.
Section 6.03 CHARGES
Seller shall pay or cause to be paid all taxes imposed by any government authority (“Governmental Charges”) on or with respect to the Net Electrical Output arising prior to the Delivery Point. MCE shall pay or cause to be paid all Governmental Charges on or with respect to the Net Electrical Output at and from the Delivery Point (other than ad valorem, franchise or income taxes which are related to the sale of the electricity and are, therefore, the responsibility of Seller). In the event Seller is required by law or regulation to remit or pay Governmental Charges which are MCE’s responsibility hereunder, MCE shall promptly reimburse Seller for such Governmental Charges.
If MCE is required by law or regulation to remit or pay Governmental Charges which are Seller’s responsibility hereunder, MCE may deduct the amount of any such Governmental Charges from the sums due to Seller under this Agreement. Nothing shall obligate or cause a Party to pay or be liable to pay any Governmental Charges for which it is exempt under the law.
ARTICLE VII
METERING
Section 7.01 METERING
All Net Electrical Output from the Facility shall be metered on a real-time basis at the Delivery Point. Seller shall include a copy of such meter information in each monthly invoice. All meters and equipment used for the measurement of output shall be provided, owned, maintained, inspected, tested and read by Seller, at no cost to MCE.
Section 7.02 CAISO STANDARDS
Seller shall comply with all CAISO agreements, tariffs and standards applicable to metering. To facilitate the monthly settlement processes, Seller shall authorize MCE, as part of its Scheduling AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 11 18058184.5 [10466-35]
Coordinator services, to view the Facility’s CAISO on-line meter data by identifying MCE as an authorized user with “read only” privileges on Schedule 1 of Seller’s Meter Service Agreement.
Section 7.03 TESTING AND CALIBRATION
Seller shall perform (or cause to be performed), at its expense, annual testing and calibration of the electric meters in accordance with generally accepted electrical practices and CAISO agreements, tariffs and standards. Seller shall give MCE reasonable advance notice of any inspection, testing or calibration of the electric meters. MCE shall have the right to have a representative or designee present at such inspection, test or calibration of the electric meters.
Section 7.04 INACCURATE METERS
If any of the electric meters are inaccurate, Seller shall promptly cause such electric meter(s) to be corrected in accordance with generally accepted electrical practices and CAISO agreements, tariffs and standards; provided that neither Party shall be entitled to a Contract Price adjustment hereunder for any previous period of inaccurate meter readings; and provided further that Seller shall bear any and all costs, fines or penalties imposed by CAISO as a result of the inaccurate meters.
ARTICLE VIII
BILLING
Section 8.01 BILLING PERIOD
The calendar month shall be the standard period for all payments under this Agreement. As soon as practicable after the end of each month, each Party will render to the other Party an invoice for the payment obligations, if any, incurred hereunder during the preceding month.
Section 8.02 TIMELINESS OF PAYMENT
All invoices under this Agreement shall be due and payable in accordance with each Party’s invoice instructions on or before the later of the 20th day of the month in which the invoice is received, or the 10th day after receipt of the invoice or, if such day is not a business day, then on the next business day. Each Party will make payments by electronic funds transfer, or by other mutually agreeable method(s), to the account designated by the other Party. Any amounts not paid by the due date will be deemed delinquent and will accrue interest at the rate equal to the prime lending rate as may from time to time be published in The Wall Street Journal under “Money Rates” on such day (or, if not published on such day, on the most recent preceding day on which published), plus two percent (2%) (the “Interest Rate”), such interest to be calculated from and including the due date to but excluding the date the delinquent amount is paid in full.
Section 8.03 DISPUTES AND ADJUSTMENTS
A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice, rendered under this Agreement or adjust any invoice for any arithmetic or computational error within six (6) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 12 18058184.5 [10466-35]
payment of the undisputed portion of the invoice shall be made when due (and subject to late charges in the same manner as if there had not been any dispute), along with notice of the objection given to the other Party. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within four (4) business days of such resolution along with interest accrued at the Interest Rate from and including the due date to but excluding the date paid. Any dispute with respect to an invoice is waived unless the other Party is notified in accordance with this Section 8.03 within six (6) months after the invoice is rendered or any specific adjustment to the invoice is made. If an invoice is not rendered within six (6) months after the close of the month during which electricity is delivered, the right to payment for such performance is waived.
ARTICLE IX
EVENTS OF DEFAULT
Section 9.01 EVENTS OF DEFAULT
An “Event of Default” shall mean, with respect to a Party (the “Defaulting Party”), the occurrence of any of the following:
(a) The failure to make, when due, any payment required pursuant to this Agreement if such failure is not remedied within thirty (30) days after receipt of written notice from the other Party;
(b) The failure to perform any other covenant or obligation set forth in this Agreement, if such failure is not remedied within ninety (90) days after receipt of written notice from MCE; (c) [Reserved];
(d) The failure of Seller to maintain the Facility’s certification as an Eligible Renewable Energy Resource;
(e) Any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated; (f) Such Party becomes bankrupt or the initiation of an involuntary proceeding against a Party under bankruptcy or insolvency laws, which involuntary proceeding remains undismissed for sixty (60) consecutive days; or
(g) Such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other Party.
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Section 9.02 SUSPENSION OF PERFORMANCE; TERMINATION
Notwithstanding any other provision of this Agreement, if an Event of Default shall have occurred and be continuing, the Party not in default (the “Non-Defaulting Party”), upon written notice to the Defaulting Party, shall have the right, in its sole discretion, to:
(a) suspend performance under this Agreement, or terminate this Agreement; (b) exercise any remedy available at law or in equity; and/or (c) If the Event of Default is the failure of Seller to maintain the Facility’s certification as an Eligible Renewable Energy Resource, as described in Section 2.04(g), the nondefaulting party may request a good faith negotiation to rebalance the benefits and values of the Agreement.
ARTICLE X
TERMINATION
Section 10.01 TERMINATION
This Agreement shall continue for the Term unless earlier terminated as follows:
(a) By the mutual written agreement of the Parties;
(b) [Reserved];
(c) By either Party, in the event a Force Majeure event continues for twelve (12) consecutive months at any time during the Term;
(d) By MCE, at its sole option, if the average availability of either engine included in the Facility, calculated on an annual basis, is less than seventy percent (70%). Such an annual availability calculation shall exclude any period during the prior twelve (12) months in which: (i) the parties’ obligations were suspended due to Force Majeure, (ii) a scheduled or unscheduled outage occurred, and/or (iii) there is a utility curtailment; or (e) By the Non-Defaulting Party, in connection with an ongoing Event of Default.
Section 10.02 NOTICE OF TERMINATION
Any such termination hereunder shall be effected by delivery of a written “Notice of Termination” specifying the basis therefore and the date upon which termination becomes effective. Except as set forth in Section 2.05, the termination date shall occur no later than forty- five (45) days from the date of delivery of the Notice of Termination. Thereafter, each Party will render to the other Party a final invoice for the payment obligations, if any, incurred up to the termination date.
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Section 10.03 CLOSE-OUT
After receipt of a Notice of Termination, the receiving Party shall, in good faith and to the best of its ability, do all things necessary and proper to ensure the efficient, proper close-out of the terminated Agreement.
ARTICLE XI
REPRESENTATIONS, WARRANTIES & COVENANTS
Section 11.01 REPRESENTATIONS AND WARRANTIES
As of the Effective Date, each Party represents and warrants to the other Party that:
(a) It is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation;
(b) The execution, delivery and performance of this Agreement are within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it;
(c) This Agreement and each other document executed and delivered in accordance with this Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms; subject to any equitable defenses; (d) It is not bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it, which would result in it being or becoming bankrupt; (e) There is not pending or, to its knowledge, threatened against it or any of its Affiliates any legal proceedings that could materially adversely affect its ability to perform its obligations under this Agreement;
(f) Execution of this Agreement, and performance of the obligations hereunder, shall not, by the delivery of notice or the lapse of time or both, constitute a default under any agreement to which the Party making this representation is a party; and (g) It is acting for its own account, has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate or proper for it based upon its own judgment, is not relying upon the advice or recommendations of the other Party in so doing, and is capable of assessing the merits of and understanding, and understands and accepts, the terms, conditions and risks of this Agreement. (h) Seller represents and warrants that the information set forth on Exhibit C is true and correct.
Section 11.02 RENEWABLE ENERGY
Seller covenants that during the Term of this Agreement the Facility will qualify as an “Eligible Renewable Energy Resource” as defined in Section 399.12(a) of the California Public Utilities AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 15 18058184.5 [10466-35]
Code (2003) and that the CEC Certified Net Electrical Output, including the Environmental Attributes, and Installed Capacity, but excluding Excluded Products of the Facility, will be available for the MCE’s exclusive use and benefit.
Section 11.03 RENEWABLE ENERGY
Seller represents and warrants that Seller holds the rights to all Environmental Attributes from the Project associated with CEC Certified electrical generation, excluding Excluded Products, and has not sold and will never sell such Environmental Attributes to any other party while this Agreement is in effect.
ARTICLE XII
INDEMNIFICATION
Section 12.01 GENERAL INDEMNITY
Seller agrees to investigate, defend, indemnify and hold MCE harmless from and against any and all loss, damage, liability, claims, demands, detriments, costs, charges and expense (including attorney’s fees) and causes of action of whatsoever character which MCE may incur, sustain or be subjected to on account of Seller’s use of the Premises or the Facility, or on account of loss or damage to property or loss of use thereof, including damage caused by the discharge, release, disposal or dispersal of any hazardous material, pollutant, irritant, contaminant or hazardous substance, or for bodily injury to or death of any persons (including, but not limited to employees, subcontractors, agents and invitees of each Party hereto) arising out of or in any way connected with the work to be performed or occupancy, operation, maintenance, enjoyment or use of the Premises or Facility by Seller under this Agreement and arising from any cause whatsoever, to the extent that such is not in conflict with California Civil Code Section 2782.
Section 12.02 VIOLATION OF GOVERNMENTAL APPROVALS
In addition to the obligations set forth in Section 13.01 below, Seller also agrees to investigate, defend, indemnify and hold MCE harmless from and against any and all loss, damage, liability, claims, demands, detriments, costs, charges and expense (including attorney’s fees) and causes of action of whatsoever character, including response, remedial or inspection costs and expenses, made or brought against MCE by any federal, state or local agency, or federal or state court, with jurisdiction over the Premises, arising out of or based upon (a) Seller’s violation of any Governmental Approvals, to the extent that such is not in conflict with California Civil Code Section 2782.
ARTICLE XIII
SELLER’S GUARANTY REQUIREMENTS
Section 13.01 DAMAGES
Seller agrees to deliver to MCE a guaranty in favor of MCE under the terms of which Seller’s guarantor unconditionally guarantees the full and prompt performance of Seller under this Agreement throughout the Term, including payment of any amount owed by Seller to MCE under this Agreement. Such guaranty from Seller’s guarantor shall be in the form of cash (subject to a AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 16 18058184.5 [10466-35]
deposit account control agreement in favor of MCE) or a letter of credit reasonably approved by MCE, and shall be executed and be delivered to MCE by Seller’s guarantor no later than February 9, 2011. The liability of Seller’s guarantor under such guaranty shall not exceed in the aggregate with respect to all such guaranteed obligations. If no Event of Default has occurred for a continuous five years following the Date of Operation, such guaranty may be reduced to , and subsequently reduced to zero (0) on the tenth anniversary of Project’s commercial operation.
The Parties agree that, as of the Signing Date and the Effective Date, the guaranty is zero (0).
For all claims, causes of action and damages the Parties shall be entitled to the recovery of actual damages allowed by law unless otherwise limited by the Agreement. Neither the enumeration of Events of Default in Article IX and Article X, nor the termination of this Agreement by a non-defaulting Party pursuant to Article X, shall limit the right of a non-defaulting Party to rights and remedies available at law, including, but not limited to, claims for breach of contract or failure to perform by the other Party and for direct damages incurred by the non-defaulting Party as a result of the termination of this Agreement.
Except as set forth in Section 3.01, Seller shall not be liable to Buyer for failure to provide any specific amount of Output hereunder.
ARTICLE XIV
MISCELLANEOUS
Section 14.01 CONFIDENTIALITY
The Parties hereto acknowledge that MCE is a local agency and subject to provisions of the California Public Records Act (Cal. Government Codes section 6250 and following). In the event that Seller contends that any information disclosed or required to be disclosed by Seller pursuant to this Agreement is confidential, Seller shall clearly identify such documents as such before transmitting the same to MCE. In the event that any claim or action is filed against MCE pursuant to the Public Records Act seeking the disclosure of any records or documents provided by Seller which were marked confidential hereunder, MCE shall notify Seller in writing of such fact and Seller shall thereupon defend, save harmless and indemnify MCE from all costs and expense in connection with said claim or litigation, including attorney's fees, and agrees to abide by the final decision of a court of competent jurisdiction in connection therewith.
Section 14.02 EXCLUSIVITY
At no time shall Seller sell or otherwise dispose of the Net Electrical Output and Installed Capacity, including the associated Environmental Attributes, but excluding Excluded products, to any third party.
Section 14.03 OPTION TO PURCHASE
If at any time during the term of this Agreement the Installed Capacity is increased due to the installation of additional units or capacity upgrade of existing units, MCE shall have the exclusive right to purchase any such additional Net Electrical Output and Installed Capacity at the Delivery Point from the Facility at the then existing market price or another such price offered to Seller by a counterparty. Such right shall expire if MCE does not give Seller notice of its election to purchase AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 17 18058184.5 [10466-35]
said additional electricity within sixty (60) days after receipt of written notice from Seller regarding the additional Installed Capacity and the date the electricity will be available from the Facility. Seller may at any time upgrade the Facility’s capacity to serve parasitic loads.
Section 14.04 TITLE AND RISK OF LOSS
Title to and risk of loss related to the electricity shall transfer from Seller to MCE at the Delivery Point. Seller warrants that any Net Electrical Output, including the Environmental Attributes, and Installed Capacity delivered to the MCE shall be 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.
Section 14.05 DISPUTE RESOLUTION
If any controversy shall arise between Seller and MCE with respect to any matters set forth in this Agreement, and which the Parties cannot then resolve, shall be subject to the following administrative remedy prior to any litigation occurring between the Parties:
(a) Both Parties shall attempt to resolve any controversy, claim, problem or dispute arising out of, or related to, this Agreement through good faith consultation in the ordinary course of business. In the event that any problem or dispute is not resolved, either Party may upon written notice to the other request that the matter be referred to senior management officials within each respective organization with express authority to resolve the problem or issue.
Such representatives shall meet or confer at least once in good faith, to negotiate a mutually acceptable resolution within ten (10) business days of such written notice. If the Parties cannot reach a mutually agreeable resolution, then the dispute or issue shall be submitted to non-binding mediation within thirty (30) Days of the written request of one Party after the service of that request on the other Party (“Request for Mediation”). (b) Within twenty (20) Days or less of the written Request for Mediation, the Parties shall agree on one mediator. If they cannot agree on one mediator within such twenty-Day period, then within three (3) Days each Party shall list the names of three (3) potential mediators affiliated with the Judicial Arbitration and Mediation Service (“JAMS”) and shall supply them to the other party. The party demanding the mediation shall merge the names of all the potential mediators into a single list, not indicating which party submitted the name. Within five (5) Days of the exchange of lists of names of three (3) potential mediators by each party, the Parties shall jointly sign a letter directed to office of JAMS which serves Marin County, requesting that JAMS appoint a mediator from the enclosed list. If a party refuses or fails to submit three (3) names within the three-Day period to the party preparing the letter, then the letter shall be sent on the 5th Day without input from the Party failing to submit names. The mediation meeting shall not exceed one Day (8 hours). The Parties may agree to extend the time allowed for mediation under this Agreement.
(c) The costs of mediation shall be borne by the Parties equally.
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(d) If, during any dispute between the Parties, a demand is made by Seller for documents under the Public Records Act, MCE shall have reciprocal rights to demand documents from Seller.
(e) Mediation under this Section 14.05 is a condition precedent to a Party filing an action in any court, unless that party has made demand for mediation and the other Party has failed or refused to engage in mediation. In the event of litigation arising out of any dispute related to this Agreement, the prevailing party as determined by the court shall be entitled to an order for its reasonable attorneys’ fees and costs, including reasonable expert witness costs and cost of suit against the non-prevailing party. Alternatively, the court in its sole discretion may also determine that neither Party is the prevailing party, and that each Party shall bear its own attorneys’ fees and costs or that the costs of the litigation shall in such case be borne equally by the Parties.
(f) Unless otherwise agreed in writing, the Parties shall continue to perform their respective obligations under this Agreement during the pendency of any proceeding by the parties in accordance with this Section 14.05. This Section 14.05 shall survive the termination of this Agreement.
Section 14.06 ASSIGNMENT
The rights and obligations of this Agreement may not be assigned by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed.
Buyer may furthermore use any agent it so designates for scheduling and billing purposes, so long as Buyer remains responsible for all of its obligations under this Agreement. Any purported assignment of this Agreement in the absence of the required consent, shall be void. Any direct or indirect change of control of Seller (whether voluntary or by operation of law) will be deemed an assignment and will require the prior written consent of Buyer, which consent shall not be unreasonably withheld or delayed; provided, however that no such consent or approval shall be required for a direct or indirect change of control of Seller involving a change of ownership or control, directly or indirectly, of twenty percent (20%) or less of the outstanding equity interests in Seller. In addition, Seller shall provide Buyer notice of any direct change of control of five percent (5%) or more of the outstanding equity interests in Seller (whether voluntary or by operation of law).
Section 14.07 FINANCING
Notwithstanding Section 14.06, Seller may collaterally assign its rights under this Agreement to Lenders as collateral security in connection with any financing of the purchase or operation of the Plant, provided that such Lender(s) or its designee agree(s) in writing that upon assuming any of Seller’s prospective rights under this Agreement, such Lender also shall be bound by all of Seller’s prospective obligations under this Agreement. Notwithstanding any such assignment, Seller's obligations under this Agreement shall continue in their entirety in full force and effect and Seller shall remain fully liable for all of its obligations under or relating to this Agreement. Each such collateral assignment and any purchaser or transferee shall be subject to MCE’s rights and defenses hereunder and under applicable law. Seller shall provide prior written notice to MCE at least seven (7) days prior to any such collateral assignment.
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In order to facilitate the obtaining of financing of the Plant, MCE shall execute, upon request and its review and approval, a commercially reasonable consent to assignment, with respect to a collateral assignment hereof to Lenders in connection with the documentation of the financing or refinancing for the Plant. Any assignment in violation of this Agreement shall be void, ab initio.
MCE shall consider in good faith any amendments to this Agreement proposed by Seller which relate to financing of the Plant or other amendments requested by Seller in order to receive or maintain financing from Lenders.
Section 14.08 GOVERNING LAW; VENUE
This Agreement shall be governed by, construed under and enforced in accordance with the laws of the State of California. The venue for any court action brought pursuant to this Agreement shall be Marin County.
Section 14.09 NOTICES
All notices necessary to be given under the terms of this Agreement, except as herein otherwise provided, shall be in writing and shall be communicated by prepaid mail or facsimile addressed to the respective Party at the address below or to such other address as respectively designated hereafter in writing from time to time:
All notices to the Parties shall, unless otherwise requested in writing, be sent to MCE addressed as follows:
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If notice is sent via facsimile, a signed, hard copy of the material shall also be mailed. The workday the facsimile was sent shall control the date notice was deemed given if there is a facsimile machine generated document on the date of transmission. A facsimile transmitted after 1:00 p.m. on a Friday shall be deemed to have been transmitted on the following Monday.
Section 14.10 AUDIT
Each Party has the right, at its sole expense and during normal working hours, to examine the records of the other Party to the extent reasonably necessary to verify the accuracy of any statement, charge or computation made pursuant to this Agreement. If requested, a Party shall provide to the other Party statements evidencing the quantity of electricity delivered at the Delivery Point. If any such examination reveals any inaccuracy in any statement, the necessary adjustments in such statement and the payments thereof will be made promptly and shall bear interest calculated at the Interest Rate from the date the overpayment or underpayment was made until paid; provided, however, that no adjustment for any statement or payment will be made unless objection to the accuracy thereof was made prior to the lapse of six (6) months from the rendition thereof, and thereafter any objection shall be deemed waived.
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Section 14.11 JOINT EFFORT
The Parties acknowledge and agree that each Party and its counsel have read this Agreement in its entirety, fully understand it, and accept its terms and conditions. Accordingly, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party is not applicable and therefore shall not be employed in the interpretation of this Agreement or any amendment of it.
Section 14.12 RELATIONSHIP OF THE PARTIES
Nothing herein is intended to create or is to be construed as creating a joint venture, partnership, agency or other entity. The rights and obligations of the Parties shall be independent of one another and shall be limited to those expressly set forth herein.
Section 14.13 NO THIRD PARTY BENEFICIARY
The Parties mutually agree that this Agreement is for their sole benefit and is not intended by them to be, in part or in whole, for the benefit of any third party.
Section 14.14 NO RECOURSE AGAINST CONSTITUENT MEMBERS OF BUYER
MCE is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to the Joint Powers Agreement and is a public entity separate from its constituent members. MCE shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement.
Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of MCE’s constituent members in connection with this Agreement.
Section 14.15 COUNTERPARTS
This Agreement may be executed in any number of counterparts, and upon execution by the Parties, each executed counterpart shall have the same force and effect as an original instrument and as if the Parties had signed the same instrument.
Section 14.16 ENTIRE AGREEMENT
This Agreement, when executed and delivered, shall constitute one, single integrated agreement and set forth the entire agreement by and between the Parties and supersedes any prior understandings, agreements or representations by or between the Parties. In the event of a conflict or an inconsistency between this Agreement and any Exhibits hereto, the terms of this Agreement shall control.
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The Parties acknowledge and accept the terms and conditions of this Agreement as evidenced by the following signatures of their duly authorized representatives. It is the intent of the Parties that this Agreement shall become operative on the Effective Date set forth above.
MCE or BUYER:
MARIN CLEAN ENERGY,
a California joint powers authority
f.k.a. Marin Energy Authority
By:
MCE [Title]
By:
MCE [Title]
Telephone:
Facsimile:
APPROVED AS TO FORM:
By:
MCE Attorney
SELLER:
G2 ENERGY, OSTROM ROAD LLC,
a Georgia limited liability company
By: G2 Participation, LLC, a Delaware limited
liability company, Managing Member
By:
Peter Wachtell, Manager
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AMENDED AND RESTATED
POWER PURCHASE AND SALE AGREEMENT
by and between
MCE
and
G2 ENERGY, OSTROM ROAD LLC
EXHIBIT A - DEFINITIONS
The following terms shall have the following meaning for purposes of this Agreement.
1. “Affiliate” means, with respect to a Party, any entity that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with such Party.
For purposes of this Agreement, “control” means the direct or indirect ownership of fifty-one percent (51%) or more of the outstanding capital stock or other equity interests having ordinary voting power.
2. “Agreement” has the meaning set forth in the Preamble.
3. “CAISO” means the California Independent System Operator, or its successor.
4. “CEC” means the California Energy Commission, or its successor.
5. “CEC Certified Electricity” means the electricity that meets California's Renewable Portfolio Standard (RPS). The electricity will continue to qualify as an eligible renewable as long as it continues to meet the requirements laid out in the CEC's Renewable Portfolio Standard Eligibility Guidebook (March 2007) as may be amended from time to time and any applicable successor thereto. Included in the definition of CEC Certified Electricity are the following:
Renewable Energy Certificates (RECs): (As defined in the California Energy Commission Renewables Portfolio Standard Eligibility Guidebook, Second Edition, March 2007).
RECs represent renewable and environmental attributes associated with the energy production. Public Utilities Code Section 399.12, Subdivision (g) (1), defines a REC for California RPS purposes to mean a certificate of proof, issued through the accounting system established by the Energy Commission under Public Utilities Code Section 399.13, that one unit of electricity was generated and delivered by an eligible renewable energy resource.
6. “Commercial Operation” has the meaning that the condition of the Facility whereupon it (a) is certified by Seller to be complete in accordance with manufacturers’ recommendations except for punch list items, (b) has passed the performance test set forth in Section 2.04(h) while synchronized with the CAISO transmission system, and (c) been certified as eligible renewable by the CEC.
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7. “Commercial Operation Date” or “Date of Operation” has the meaning of the date upon which Commercial Operations first occurs.
8. “Conditions Precedent” has the meaning set forth in Section 2.04.
9. “Contract Price” has the meaning set forth in Exhibit E.
10. “CPUC” means the California Public Utilities Commission, or its successor.
11. “Data Processing Gateway” means a CAISO approved device that will allow the Facility to securely establish telemetry with CAISO’s SCADA interface.
12. “Defaulting Party” has the meaning set forth in Section 9.01.
13. “Delivery Point” means the interconnection point between the Facility and the PG&E distribution system located at the Facility.
14. “Delivery Term” means the period commencing on the Date of Operation and terminating on the date of contract termination.
15. “Effective Date” has the meaning set forth in the Recitals.
16. “Environmental Attributes” means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the generation from the Project, and its displacement of conventional Energy generation. Environmental Attributes include but are not limited to:
a) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; b) any avoided emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; c) the reporting rights to these avoided emissions such as Green Tag Reporting Rights and Renewable Energy Credits.
Green Tag Reporting Rights are the right of a Green Tag Purchaser to report the ownership of accumulated Green Tags in compliance with federal or state law, if applicable, and to a federal or state agency or any other party at the Green Tag Purchaser’s discretion, and include without limitation those Green Tag Reporting Rights accruing under Section 1605(b) of The Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program. Green Tags are accumulated on a MWh basis and one Green Tag represents the Environmental Attributes associated with one (1) MWh of Energy.
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Environmental Attributes do not include:
a) any energy, capacity, reliability or other power attributes from the Project, b) production tax credits associated with the construction or operation of the Project and other financial incentives in the form of credits, reductions, or allowances associated with the project that are applicable to a state or federal income taxation obligation,
c) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular preexisting pollutants or the promotion of local environmental benefits, or d) emission reduction credits encumbered or used by the Project for compliance with local, state, or federal operating and/or air quality permits. If the Project is a biomass or landfill gas facility and Seller receives any tradable Environmental Attributes based on the greenhouse gas reduction benefits or other emission offsets attributed to its fuel usage, it shall provide Buyer with sufficient Environmental Attributes to ensure that there are zero net emissions associated with the production of electricity from the Project.”
17. “Event of Default” has the meaning set forth in Section 9.01.
18. “Excluded Products” means every existing or potential electrical and environmental attribute, except those defined under CEC Certified Electricity above, including any available excess negative CO2 air emissions credits, and those environmental attributes that come from the avoidance of flared methane or other benefits not related to the generation of electricity at this Facility.
19. “Facility” has the meaning set forth in the Recitals.
20. “FERC” means the Federal Energy Regulatory Commission or any successor government agency.
21. “Force Majeure” means any cause or event beyond the reasonable control of the affected Party which was not foreseeable as of the date of this Agreement and not due to the fault or negligence of the Party affected, and which could not have been avoided by due diligence and use of reasonable efforts, including but not limited to: (a) acts of God, such as extreme weather conditions, droughts, floods, earthquakes; (b) fires, explosions, accidents that could not have been prevented by acting in accordance with generally accepted electrical practices; (c) war (declared or undeclared), riots, insurrection, rebellion, acts of the public enemy, acts of vandalism, terrorism and/or sabotage, blockades, embargoes, industry-wide strikes; (d) changes in governmental approvals or the conditions imposed thereunder or the failure to renew such governmental approvals not due to the failure of the affected Party to timely submit applications; (e) failures in the CAISO Grid; (f) delays by PG&E to complete interconnection construction of the Facility; and (g) lack of production or delivery of landfill gas as a result of circumstances beyond the diligent control of the Parties. Notwithstanding anything to the contrary in the foregoing, (a) lack AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 26 18058184.5 [10466-35]
of finances, (b) economic conditions that render a Party’s performance of the Agreement at the Contract Price unprofitable or otherwise uneconomic, or (c) mechanical breakdown, electrical breakdown, or failure of any machinery or equipment of all or part of the Facility due to operation or maintenance of such machinery or equipment in a manner that is inconsistent with generally accepted electrical practices shall not constitute Force Majeure.
22. “Governmental Approvals” has the meaning set forth in Section 2.04(f).
23. “Installed Capacity” means the gross generating capability of the Facility, to produce energy that may be counted toward a Resource Adequacy requirement or any other measure by the CPUC, the CAISO, the FERC, or any other entity invested with the authority under federal or state law, to require Buyer to procure, or to procure at Buyer’s expense, Resource Adequacy or other such products.
24. “Interconnection Facilities Agreement” means an agreement between Seller and PG&E (and CAISO, if necessary) which allows the Facility to interconnect to the PG&E transmission system.
25. “Interest Rate” has the meaning set forth in Section 8.02.
26. “JAMS” has the meaning set forth in Section 14.05(b).
27. “Landfill Gas Rights Agreement” means that certain Landfill Gas Sale and Purchase Agreement by and between Seller and Norcal Waste Systems dated as of May 30, 2007.
28. “Letter of Intent” means a letter agreement between Seller and CAISO in which Seller agrees to become a participating resource.
29. “MCE” or “Buyer” has the meaning set forth in the Preamble.
30. “Meter Service Agreement” means a contract between Seller and CAISO that delineates the terms and conditions for operations and the participation in CAISO’s markets, including requirements for metering and telemetry.
31. “Milestones” are those construction deadlines defined in Section 2.03(a).
32. “Net Electrical Output” has the meaning set forth in Section 4.01.
33. “Non-Defaulting Party” has the meaning set forth in Section 9.02.
34. “Notice of Commercial Operation” means a binding notice sent from Seller to Buyer pursuant to Paragraph 1 of Exhibit D hereto. Such notice shall be sent in accordance with Section 14.09 and shall contain: (i) the revised Proposed Commercial Operation Date which (x) is to occur no earlier than four months from the date of such notice and (y) is a date prior to August 31, 2011, and (ii) a revised Outage Schedule reflecting such revised Proposed Commercial Operation Date.
35. “Notice of Termination” has the meaning set forth in Section 10.02.
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36. “Outage Schedule” has the meaning set forth in Section 5.01.
37. “Norcal Waste Systems” means Norcal Waste Systems Ostrom Road Landfill Inc., owner of the Ostrom Road site its landfill gas rights.
38. “Project” is an alternate name for the Facility.
39. “Proposed Commercial Operation Date” has the meaning set forth in the Recitals, as may be modified pursuant to Paragraph 1 of Exhibit D hereto.
40. “Participating Generator Agreement” means a contract between Seller and CAISO that delineates the terms and conditions for operations and the participation in CAISO’s markets, including requirements for scheduling and operations.
41. “Party” or “Parties” has the meaning set forth in the Preamble.
42. “PG&E” means Pacific Gas and Electric Company, or its successor.
43. “Premises” has the meaning set forth in Appendix C.
44. “Qualifying Energy” has the meaning of Electricity generated from Landfill Gas (LFG) in this Facility and purchased by MCE including capacity and all the CEC Certified Electricity associated with the power generated from Facility
45. “Request for Mediation” has the meaning set forth in Section 14.05(a).
46. “Seller” has the meaning set forth in the Preamble.
47. “Signing Date” has the meaning set forth in the Preamble.
48. “Site Agreement” means the Site Lease between Seller and Recology.
49. “System Emergency” means conditions beyond the normal control of the CAISO, PG&E and/or MCE that affect the ability of transmission lines and associated facilities to function normally, including any abnormal system condition which requires immediate manual or automatic action to prevent loss of load, equipment damage, or tripping of system elements which might result in cascading outages or to restore system operation to meet the minimum operating reliability criteria.
50. “Term” has the meaning set forth in Exhibit D.
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AMENDED AND RESTATED
POWER PURCHASE AND SALE AGREEMENT
by and between
MCE
and
G2 ENERGY, OSTROM ROAD LLC
EXHIBIT B - DEFINITION OF ACTIVITY
Facility:
1. Engine No. 1: A 1.95 MW CAT 3520 engine with serial number LGS001871 ;
provided, however, that Seller is obligated to sell to MCE, and MCE is obligated to receive and pay for, only 14,016 MWh (1.6 MW x 365 x 24) per calendar year from Engine No. 1.
2. Engine No. 2: A 1.6 MW CAT 3520 with the serial number GZJ00605.2 Seller has designed and constructed a power plant within the landfill site that will minimize the flaring of gas. Seller represents and warrants to MCE that the power plant achieved Commercial Operation before the Effective Date. The two engines included in the plant will be fired exclusively with landfill gas. The plant includes:
• A tie-in to the existing gas collection system,
• A means of cleaning the gas,
• One Caterpillar low emission engine-generator.
• Utility-grade switchgear for connecting to the PG&E distribution system.
After the gas is converted to electricity, a dedicated line is used to deliver the electricity to the utility. Interconnection includes metering equipment necessary to monitor sales and system protection equipment with emergency shutdown capability to prevent either party from damaging the other's equipment, or operations, or injuring personnel.
The electrical output from the electrical switchgear in the generator set enclosure is connected to the low side of a 4160V to utility voltage pad mounted transformer. The high side of this transformer is then connected to the utility grid on a pole.
Engine 1 and Engine 2 each have separate production meters that measure output, and the meter for Engine No. 1 will be used to determine when the 14,016 MWh annual cap described above for Engine No. 1 has been reached.
1 Engine No. 1 was subject to the Original PPA. The Original PPA initially contemplated a 1.6 MW engine, but a major mechanical failure occurred and that engine was replaced with a 1.95 MW faceplate engine. 2 Engine No. 2 is the additional engine contemplated by this Agreement and is now included in the Facility.
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AMENDED AND RESTATED
POWER PURCHASE AND SALE AGREEMENT
by and between
MCE
and
G2 ENERGY, OSTROM ROAD LLC
EXHIBIT C - DEVELOPER AND PERMITTING INFORMATION
Developers’ Record: Seller is a Renewable Energy Developer that has successfully completed five projects in California, Florida, Idaho and Texas over the past four years.
Permitting Process: Seller has retained a qualified company to manage all permitting in this process. The company is an engineering and construction firm specializing in solid waste management and environmental services.
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AMENDED AND RESTATED
POWER PURCHASE AND SALE AGREEMENT
by and between
MCE
and
G2 ENERGY, OSTROM ROAD LLC
EXHIBIT D - TERM
1. Term. Unless terminated earlier as provided herein, the term of this Agreement shall commence on the Effective Date and shall terminate at 2400 hours PST on the date of contract termination. Term will be 18 years from September 1, 2013.
If Seller has a continuing Gas Rights Agreement and intends to operate the facility for two years beyond the Initial Term of this Agreement, Buyer has the right, but not the obligation, to extend the term for an additional two years to be declared no later than one year prior to the end of the Initial Term, and at the contract price specified in Exhibit E.
If Seller has a continuing Gas Rights Agreement and intends to operate the facility for five years beyond the Initial Term of this Agreement, Buyer has the right, but not the obligation, to extend the term for an additional five (5) years beyond to be declared no later than one year prior to the end of the Initial Term. Such an extension will occur at the then-prevailing Market Price, as mutually agreed upon by the parties to this Agreement.
2. Notice to Seller. As noted in Section 14.01 above, MCE is a public agency subject to the requirements of the California Public Records Act (Cal. Government Code section 6250 et seq.).
Upon request or demand of any third person or entity not a party to this Agreement (“Requestor”) for production, inspection and/or copying of information contained in this Exhibit D, MCE as soon practical but within three (3) days of receipt of the request, shall notify Seller that such request has been made, by telephone call, letter sent via facsimile and/or by US Mail to the address and facsimile number listed in Section 14.09 of this Agreement. After notifying Seller, MCE shall be permitted to comply with the Requestor’s demand.
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AMENDED AND RESTATED
POWER PURCHASE AND SALE AGREEMENT
by and between
MCE
and
G2 ENERGY, OSTROM ROAD LLC
EXHIBIT E - CONTRACT PRICE
1. Contract Price. Commencing on the Effective Date, the contract price for Net Electrical Output under this Agreement shall be as set forth in Section 1(a) below for each year noted (the “Contract Price”). The Contract Price is a blended price derived from the following prices for each engine:
For Engine 1 in an amount up to and not to exceed 14,016 MWh in any annual period:
Contract Year Calendar Year Price (US
Dollars)/MWh
11 2024
12 2025
13 2026
14 2027
15 2028
16 2029
17 2030
18 2031
For Engine 2 in an amount up to and not to exceed 14,016 MWh in any annual period:
Contract Year Calendar Year Price (US
Dollars)/MWh
11 2024
12 2025
13 2026
14 2027
15 2028
16 2029
17 2030
18 2031
a) “All In” Energy Annual Pricing when combining the exported power of both Engine 1 and Engine 2:
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Contract Year Calendar Year Engine No. 1
Price (US
Dollars)/MWh
Engine No. 2
Price (US
Dollars)/MWh
Contract Price
(US Dollars) for
Net Electrical
Output/MWh
11 2024
12 2025
13 2026
14 2027
15 2028
16 2029
17 2030
18 2031
b) Production Data. Throughout the Term of this Agreement, Seller shall provide to MCE, on a quarterly basis, monthly production data for each generator located on the Premises.
2. Notice to Seller. As noted in Section 14.01 above, MCE is a public agency subject to the requirements of the California Public Records Act (Cal. Government Code section 6250 et seq.).
Upon request or demand of any third person or entity not a party to this Agreement (“Requestor”) for production, inspection and/or copying of information contained in this Exhibit E, MCE as soon practical but within three (3) days of receipt of the request, shall notify Seller that such request has been made, by telephone call, letter sent via facsimile and/or by US Mail to the address and facsimile number listed in Section 14.09 of this Agreement. After notifying Seller, MCE shall be permitted to comply with the Requestor’s demand.
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AMENDED AND RESTATED
POWER PURCHASE AND SALE AGREEMENT
by and between
MCE
and
G2 ENERGY, OSTROM ROAD LLC
EXHIBIT F - INSURANCE COVERAGE REQUIREMENTS
Without limiting the Contractor’s indemnification of the MCE, and prior to commencing any of the Services required under this Agreement, the Contractor shall purchase and maintain in full force and effect, at its sole cost and expense, the following insurance policies with at least the indicated coverages, provisions and endorsements:
A. COMMERCIAL GENERAL LIABILITY INSURANCE
1. Commercial General Liability Insurance policy which provides coverage at least as broad as Insurance Services Office form CG 00 01. Policy limits are subject to review, but shall in no event be less than, the following:
$2,000,000 Each occurrence
$2,000,000 General aggregate
$2,000,000 Products/Completed Operations aggregate
$2,000,000 Personal Injury
2. Exact structure and layering of the coverage shall be left to the discretion of Contractor; however, any excess or umbrella policies used to meet the required limits shall be at least as broad as the underlying coverage and shall otherwise follow form.
3. The following provisions shall apply to the Commercial Liability policy as well as any umbrella policy maintained by the Contractor to comply with the insurance requirements of this Agreement:
a. Coverage shall be on a “pay on behalf” basis with defense costs payable in addition to policy limits;
b. There shall be no cross liability exclusion which precludes coverage for claims or suits by one insured against another; and
c. Coverage shall apply separately to each insured against whom a claim is made or a suit is brought, except with respect to the limits of liability.
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B. BUSINESS AUTOMOBILE LIABILITY INSURANCE
Business automobile liability insurance policy which provides coverage at least as broad as ISO form CA 00 01 with policy limits a minimum limit of not less than one million dollars ($1,000,000) each accident using, or providing coverage at least as broad as, Insurance Services Office form CA 00 01. Liability coverage shall apply to all owned, non-owned and hired autos.
In the event that the Work being performed under this Agreement involves transporting of hazardous or regulated substances, hazardous or regulated wastes and/or hazardous or regulated materials, Contractor and/or its subcontractors involved in such activities shall provide coverage with a limit of two million dollars ($2,000,000) per accident covering transportation of such materials by the addition to the Business Auto Coverage Policy of Environmental Impairment Endorsement MCS90 or Insurance Services Office endorsement form CA 99 48, which amends the pollution exclusion in the standard Business Automobile Policy to cover pollutants that are in or upon, being transported or towed by, being loaded onto, or being unloaded from a covered auto.
C. WORKERS’ COMPENSATION
1. Workers’ Compensation Insurance Policy as required by statute and employer’s liability with limits of at least one million dollars ($1,000,000) policy limit Bodily Injury by disease, one million dollars ($1,000,000) each accident/Bodily Injury and one million dollars ($1,000,000) each employee Bodily Injury by disease.
2. The indemnification and hold harmless obligations of Contractor included in this Agreement shall not be limited in any way by any limitation on the amount or type of damage, compensation or benefit payable by or for Contractor or any subcontractor under any Workers’ Compensation Act(s), Disability Benefits Act(s) or other employee benefits act(s).
3. This policy must include a Waiver of Subrogation in favor of MCE, its Board of Directors, commissions, officers, employees, volunteers and agents.
D. COMPLIANCE WITH REQUIREMENTS
All of the following clauses and/or endorsements, or similar provisions, must be part of each commercial general liability policy, and each umbrella or excess policy.
1. Additional Insureds. MCE, its Board of Directors, commissions, officers, employees, volunteers and agents are hereby added as additional insureds in respect to liability arising out of Contractor’s work for MCE, using Insurance Services Office (ISO) Endorsement CG 20 10 11 85 or the combination of CG 20 10 03 97 and CG 20 37 10 01, or its equivalent.
2. Primary and non-contributing. Each insurance policy provided by Contractor shall contain language or be endorsed to contain wording making it primary insurance as respects to, and not requiring contribution from, any other insurance which the Indemnities may possess, including any self-insurance or self-insured retention they may have. Any other insurance Indemnities may possess shall be considered AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 36 18058184.5 [10466-35]
excess insurance only and shall not be called upon to contribute with Contractor’s insurance. If such “primary and non- contributing” coverage is included in the text.
E. ADDITIONAL RELATED PROVISIONS
Contractor and MCE agree as follows:
1. Contractor agrees to ensure that subcontractors, and any other party involved with the Services who is brought onto or involved in the performance of the Services by Contractor, provide the same minimum insurance coverage required of Contractor, except as with respect to limits. Contractor agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this Agreement. Contractor agrees that upon request by MCE, all agreements with, and insurance compliance documents provided by, such subcontractors and others engaged in the project will be submitted to MCE for review.
2. Contractor agrees to be responsible for ensuring that no contract used by any party involved in any way with the project reserves the right to charge MCE or Contractor for the cost of additional insurance coverage required by this Agreement. Any such provisions are to be deleted with reference to MCE. It is not the intent of MCE to reimburse any third party for the cost of complying with these requirements. There shall be no recourse against MCE for payment of premiums or other amounts with respect thereto.
3. The MCE reserves the right to withhold payments from the Contractor in the event of material noncompliance with the insurance requirements set forth in this Agreement.
F. EVIDENCE OF COVERAGE
Prior to commencement of any Services under this Agreement, Contractor, and each and every subcontractor (of every tier) shall, at its sole cost and expense, purchase and maintain not less than the minimum insurance coverage with the endorsements and deductibles indicated in this Agreement. Such insurance coverage shall be maintained with insurers, and under forms of policies, satisfactory to MCE and as described in this Agreement.
Contractor shall file with the MCE all certificates and endorsements for the required insurance policies for MCE’s approval as to adequacy of the insurance protection.
G. EVIDENCE OF COMPLIANCE
Contractor or its insurance broker shall provide the required proof of insurance compliance, consisting of Insurance Services Office (ISO) endorsement forms or their equivalent and the ACORD form 25-S certificate of insurance (or its equivalent), evidencing all required coverage shall be delivered to MCE, or its representative as set forth below, at or prior to execution of this Agreement. Upon MCE’s request, Contractor shall submit to MCE copies of the actual insurance policies or renewals or replacements. Unless otherwise required by AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 37 18058184.5 [10466-35]
the terms of this Agreement, all certificates, endorsements, coverage verifications and other items required to be delivered to MCE pursuant to this Agreement shall be mailed to:
H. QUALIFYING INSURERS
All of the insurance companies providing insurance for Contractor shall have, and provide written proof of, an A. M. Best rating of at least A minus 6 (A- VI) or shall be an insurance company of equal financial stability that is approved by the MCE or its insurance compliance representatives.
AI #05 C.3: Amended and Restated Power Purchase and Sale Agreement between MCE and G2 Energy, Ostrom Road LLC December 1, 2023
TO: MCE Technical Committee
FROM: Paul Krebs, Power Procurement Manager
RE: Proposed Energy Storage Service Agreement with Cormorant Energy Storage, LLC (Agenda Item #06)
ATTACHMENT: A. Energy Storage Agreement with Cormorant Energy Storage, LLC
B. Cormorant Overview Presentation
Dear Board Members:
Background:
MCE’s 2023 Open Season procurement process had three primary goals:
1. Meet Integrated Resource Planning (IRP) targets for renewable energy and energy storage.
2. Add Resource Adequacy (RA) supply to MCE’s portfolio.
3. Add resources to fulfill the Mid Term Reliability (MTR) obligations as outlined in the California Public Utilities Commission (CPUC) decisions D.21-06-035 and D.23-02-040.
As a result of the solicitation, staff received an offer from Cormorant Energy Storage, LLC (“Cormorant”) for a new stand-alone battery energy storage system (“BESS”) that will come online in 2026. The proposed facility would satisfy MCE’s MTR procurement obligation for 2026.
Summary:
The Cormorant project is being developed by Arevon Energy (“Arevon”) and will be sited in San Mateo County. The project is at a mature stage in the development process with an executed interconnection agreement, full site control and a well-defined plan to acquire all relevant permits.
The attached Energy Storage Service Agreement (“ESSA”) agreement outlines the terms for the guaranteed delivery of 130 megawatts (MW) and 4 hours of storage capacity as well as MCE’s rights to the associated energy, Resource Adequacy (“RA”) and Ancillary Services products. In addition to contributing to MCE’s MTR compliance obligation, the contract would be a valuable addition to MCE’s RA portfolio.
Rationale:
The ESSA is a good fit for MCE’s portfolio based on the following considerations:
• The BESS project can be charged during low price, low demand periods and dispatched in high price, high demand periods.
• RA capacity delivered by the facility would complement MCE’s existing portfolio of resources.
• The project type, size, specifications, and commercial operation date fit the requirements detailed in the CPUC MTR mandated procurement order. • The project is being developed and will be operated by an experienced team.
Arevon has a track record of successfully delivering projects to load serving entities including Central Coast Community Energy, San Diego Community Power, Los Angeles Department of Water & Power, Pacific Gas & Electric and Sothern California Edison.
Additional Information:
About Arevon Energy
• Headquartered in Scottsdale, Arizona with 205 full-time employees. • Formed by Capital Dynamics’ Clean Energy Infrastructure business as an asset management service provider in 2017. Arevon Energy, Inc. was created in 2021 as a combination of Capital Dynamics’ Clean Infrastructure Team and Arevon Asset Management.
• Backed by CalSTRS, the United States’ second-largest public pension fund, APG, a Dutch pension fund, and a wholly owned subsidiary of the Abu Dhabi Investment Authority.
• Arevon's global fleet of PV Solar and Onshore Wind assets exceeds 6,500 MW (enough energy to power approximately 2.3 million homes), representing over $9 billion in invested capital. Arevon operates the 2nd largest portfolio of solar assets in North America, with over 3,500 MW of commercially operating generation and battery storage assets.
Contract Overview
• Project: 130 MW, 4-hour duration lithium-ion BESS
• Products under proposed contract: Energy, RA, Ancillary Services • Price: Fixed with no escalation for the Delivery Term • Project location: San Mateo County, California
• Guaranteed commercial operation date: June 1, 2026
• Contract term: 15 contract years
• Credit: No credit or collateral obligations for MCE
• Union labor requirement: Union contractors would be required for all on-site construction trades
• Community Benefit Package: Up to $500,000 to be spent at MCE’s discretion on a package of community benefits that could include apprenticeships, scholarships, food programs, open space preservation, parks, etc.
Fiscal Impacts:
There would be no impact on the Fiscal Year 2023/24 budget. Incremental costs would be accounted for starting in FY 2026/27.
Recommendation:
Authorize execution of the Energy Storage Service Agreement with Cormorant Energy Storage, LLC for the purchase of all products associated with the project including energy, RA, and Ancillary Services.
EXECUTION VERSION
1 ENERGY STORAGE SERVICE AGREEMENT
COVER SHEET
Seller: Cormorant Energy Storage, LLC (“Seller”)
Buyer: Marin Clean Energy, a California joint powers authority (“Buyer”) Description of Facility: A 130 MW/520 MWh battery energy storage facility located in San Mateo County, in the State of California, as further described in Exhibit A (the “Facility”), and subject to reduction in capacity pursuant to Paragraph 5 in Exhibit B.
Milestones:
Milestone Date for Completion
Evidence of Site Control Completed
Executed Interconnection Agreement Completed
Obtain Federal and State Discretionary Permits 10/1/2024 Network Upgrades Completed 3/31/2026
Procure Major Equipment 3/31/2025
Expected Construction Start Date 10/31/2025
Initial Synchronization 1/31/2026
Expected Commercial Operation Date 6/1/2026
Full Capacity Deliverability Status Obtained Completed
Delivery Term: The period for Product delivery will be for fifteen (15) Contract Years.
Storage Contract Capacity: 130 MW for four (4) hour discharge Storage Contract Output: 520 MWh
Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency
Rate
1 2
3 4
5 6
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 2 7
8 9
10 11
12 13
14 15
Minimum Efficiency Rate:
Contract Price
The Storage Rate shall be:
Contract Year Storage Rate
1 – 15
Delivery Point: the PNode assigned to the Facility by the CAISO, which shall be located at the PG&E Martin 115 kV Substation
Product:
☑ Discharging Energy
☑ Storage Capacity
☑ Capacity Attributes (select options below as applicable) ☐ Energy Only Status
☑ Full Capacity Deliverability Status
☑ Ancillary Services
Scheduling Coordinator: Buyer or Buyer’s agent
Development Security and Performance Security
Development Security:
Performance Security:
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC
TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS........................................................................................................... 1
1.1 CONTRACT DEFINITIONS.................................................................................................. 1
1.2 RULES OF INTERPRETATION ........................................................................................... 16 ARTICLE 2 TERM; CONDITIONS PRECEDENT.................................................................... 17
2.1 CONTRACT TERM........................................................................................................... 17
2.2 CONDITIONS PRECEDENT ............................................................................................... 18
2.3 DEVELOPMENT; CONSTRUCTION; PROGRESS REPORTS.................................................. 19
2.4 REMEDIAL ACTION PLAN............................................................................................... 19 ARTICLE 3 PURCHASE AND SALE........................................................................................ 19
3.1 PURCHASE AND SALE OF PRODUCT................................................................................ 19
3.2 CAPACITY ATTRIBUTES ................................................................................................. 20
3.3 RESOURCE ADEQUACY FAILURE.................................................................................... 20
3.4 CPUC MID-TERM RELIABILITY REQUIREMENTS........................................................... 21
3.5 COMPLIANCE EXPENDITURE CAP................................................................................... 22 ARTICLE 4 OBLIGATIONS AND DELIVERIES..................................................................... 23
4.1 DELIVERY ...................................................................................................................... 23
4.2 TITLE AND RISK OF LOSS ............................................................................................... 23
4.3 FORECASTING ................................................................................................................ 23
4.4 DISPATCH DOWN/CURTAILMENT................................................................................... 25
4.5 CHARGING ENERGY MANAGEMENT............................................................................... 25
4.6 REDUCTION IN DELIVERY OBLIGATION ......................................................................... 27
4.7 [RESERVED]................................................................................................................... 27
4.8 STORAGE AVAILABILITY................................................................................................ 27
4.9 STORAGE CAPACITY TESTS............................................................................................ 28
4.10 INTERCONNECTION CAPACITY ....................................................................................... 28
4.11 STATION USE ................................................................................................................. 28
4.12 FACILITY OPERATIONS AND MAINTENANCE .................................................................. 28
4.13 PRE-COMMERCIAL OPERATION DATE PERIOD ............................................................... 29 ARTICLE 5 TAXES..................................................................................................................... 29
5.1 ALLOCATION OF TAXES AND CHARGES. ........................................................................ 29
5.2 COOPERATION................................................................................................................ 29 ARTICLE 6 MAINTENANCE OF THE FACILITY .................................................................. 30
6.1 MAINTENANCE OF THE FACILITY. .................................................................................. 30
6.2 MAINTENANCE OF HEALTH AND SAFETY....................................................................... 30
6.3 SHARED FACILITIES ....................................................................................................... 30 ARTICLE 7 METERING............................................................................................................. 30
7.1 METERING. .................................................................................................................... 30
7.2 METER VERIFICATION. .................................................................................................. 31 ARTICLE 8 INVOICING AND PAYMENT; CREDIT.............................................................. 31 AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC ii
8.1 INVOICING. ..................................................................................................................... 31
8.2 PAYMENT. ...................................................................................................................... 31
8.3 BOOKS AND RECORDS. ................................................................................................... 32
8.4 PAYMENT ADJUSTMENTS; BILLING ERRORS. ................................................................. 32
8.5 BILLING DISPUTES. ........................................................................................................ 32
8.6 NETTING OF PAYMENTS. ................................................................................................ 33
8.7 SELLER’S DEVELOPMENT SECURITY. ............................................................................. 33
8.8 SELLER’S PERFORMANCE SECURITY. ............................................................................. 33
8.9 FIRST PRIORITY SECURITY INTEREST IN CASH OR CASH EQUIVALENT COLLATERAL .... 34
8.10 SELLER FINANCIAL STATEMENTS. ................................................................................. 34 ARTICLE 9 NOTICES ................................................................................................................. 35
9.1 ADDRESSES FOR THE DELIVERY OF NOTICES ................................................................. 35
9.2 ACCEPTABLE MEANS OF DELIVERING NOTICE .............................................................. 35 ARTICLE 10 FORCE MAJEURE ............................................................................................... 35
10.1 DEFINITION .................................................................................................................... 35
10.2 NO LIABILITY IF A FORCE MAJEURE EVENT OCCURS .................................................... 36
10.3 NOTICE .......................................................................................................................... 36
10.4 TERMINATION FOLLOWING FORCE MAJEURE EVENT ..................................................... 37 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ....................................................... 37
11.1 EVENTS OF DEFAULT ..................................................................................................... 37
11.2 REMEDIES; DECLARATION OF EARLY TERMINATION DATE. .......................................... 40
11.3 TERMINATION PAYMENT ............................................................................................... 40
11.4 NOTICE OF PAYMENT OF TERMINATION PAYMENT ........................................................ 41
11.5 DISPUTES WITH RESPECT TO TERMINATION PAYMENT .................................................. 41
11.6 RIGHTS AND REMEDIES ARE CUMULATIVE ................................................................... 41
11.7 SELLER PRE-COD LIABILITY LIMITATIONS ................................................................... 41
11.8 SELLER POST-TERMINATION OBLIGATIONS ................................................................... 41 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES ........... 42
12.1 NO CONSEQUENTIAL DAMAGES. .................................................................................... 42
12.2 WAIVER AND EXCLUSION OF OTHER DAMAGES. ........................................................... 43 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY ............................ 44
13.1 SELLER’S REPRESENTATIONS AND WARRANTIES. .......................................................... 44
13.2 BUYER’S REPRESENTATIONS AND WARRANTIES ........................................................... 45
13.3 GENERAL COVENANTS ................................................................................................... 46
13.4 PREVAILING WAGE ........................................................................................................ 46
13.5 DIVERSITY REPORTING. ................................................................................................. 46
13.6 OTHER SELLER COMMITMENTS ..................................................................................... 46 ARTICLE 14 ASSIGNMENT ...................................................................................................... 46
14.1 GENERAL PROHIBITION ON ASSIGNMENTS ..................................................................... 46
14.2 COLLATERAL ASSIGNMENT ........................................................................................... 47 AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC iii
ARTICLE 15 DISPUTE RESOLUTION..................................................................................... 49
15.1 GOVERNING LAW........................................................................................................... 49
15.2 DISPUTE RESOLUTION.................................................................................................... 49 ARTICLE 16 INDEMNIFICATION............................................................................................ 49
16.1 MUTUAL INDEMNITY ..................................................................................................... 49
16.2 NOTICE OF CLAIM.......................................................................................................... 50
16.3 FAILURE TO PROVIDE NOTICE........................................................................................ 50
16.4 DEFENSE OF CLAIMS...................................................................................................... 50
16.5 SUBROGATION OF RIGHTS.............................................................................................. 51
16.6 RIGHTS AND REMEDIES ARE CUMULATIVE .................................................................... 51 ARTICLE 17 INSURANCE......................................................................................................... 51
17.1 INSURANCE .................................................................................................................... 51 ARTICLE 18 CONFIDENTIAL INFORMATION ..................................................................... 53
18.1 DEFINITION OF CONFIDENTIAL INFORMATION ............................................................... 53
18.2 DUTY TO MAINTAIN CONFIDENTIALITY......................................................................... 53
18.3 IRREPARABLE INJURY; REMEDIES.................................................................................. 53
18.4 DISCLOSURE TO LENDERS, ETC...................................................................................... 54
18.5 PRESS RELEASES............................................................................................................ 54 ARTICLE 19 MISCELLANEOUS .............................................................................................. 54
19.1 ENTIRE AGREEMENT; INTEGRATION; EXHIBITS ............................................................. 54
19.2 AMENDMENTS................................................................................................................ 54
19.3 NO WAIVER ................................................................................................................... 54
19.4 NO AGENCY, PARTNERSHIP, JOINT VENTURE OR LEASE................................................ 54
19.5 SEVERABILITY ............................................................................................................... 55
19.6 MOBILE-SIERRA............................................................................................................. 55
19.7 COUNTERPARTS; ELECTRONIC SIGNATURES. ................................................................. 55
19.8 ELECTRONIC DELIVERY ................................................................................................. 55
19.9 BINDING EFFECT............................................................................................................ 55
19.10 NO RECOURSE TO MEMBERS OF BUYER. ....................................................................... 55
19.11 NO RECOURSE TO SHAREHOLDERS. ............................................................................... 55
19.12 FORWARD CONTRACT.................................................................................................... 56
19.13 SERVICE CONTRACT ...................................................................................................... 56
19.14 FURTHER ASSURANCES.................................................................................................. 56 AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC iv
Exhibits:
Exhibit A Facility Description
Exhibit B Facility Construction and Commercial Operation Exhibit C Compensation
Exhibit D Scheduling Coordinator Responsibilities
Exhibit E Progress Reporting Form
Exhibit F Form of Monthly Forecast
Exhibit G [Reserved]
Exhibit H Form of Commercial Operation Date Certificate Exhibit I Form of Installed Capacity Certificate
Exhibit J Form of Construction Start Date Certificate
Exhibit K Form of Letter of Credit
Exhibit L Form of Guaranty
Exhibit M Form of Replacement RA Notice
Exhibit N Notices
Exhibit O Storage Capacity Tests
Exhibit P Storage Facility Availability
Exhibit Q Operating Restrictions
Exhibit R Metering Diagram
Exhibit S Other Seller Commitments
Exhibit T Diversity Reporting
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC
ENERGY STORAGE SERVICE AGREEMENT
This Energy Storage Service Agreement (“Agreement”) is entered into as of the last dated signature on the signature page hereto (the “Effective Date”), between Buyer and Seller. Buyer and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties.” All capitalized terms used in this Agreement are used with the meanings ascribed to them in Article 1 to this Agreement.
RECITALS
WHEREAS, Seller intends to develop, design, permit, construct, own, and operate the Facility; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:
ARTICLE 1
DEFINITIONS
1.1 Contract Definitions. The following terms, when used herein with initial capitalization, shall have the meanings set forth below:
“AC” means alternating current.
“Accepted Compliance Costs” has the meaning set forth in Section 3.5(d). “Affiliate” means, with respect to any Person, each Person that directly or indirectly controls, is controlled by, or is under common control with such designated Person. For purposes of this definition and the definition of “Permitted Transferee”, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person. “Agreement” has the meaning set forth in the Preamble and includes any Exhibits, schedules and any written supplements hereto, and the Cover Sheet. “Ancillary Services” means those Ancillary Services (as defined in the CAISO Tariff) set forth in Section 4.5(f).
“Approved Maintenance Hours” means one hundred seventy six (176) hours per Contract Year of Planned Outages for Facility maintenance scheduled in accordance with Section
4.6(a).
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 2 “Automated Dispatch System” or “ADS” has the meaning set forth in the CAISO Tariff. “Availability Adjustment” has the meaning set forth in Exhibit C. “Availability Adjustment Payment” has the meaning set forth in Exhibit C. “Bankrupt” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due. “Baseline Tax Credit Percentage” has the meaning set forth in Exhibit C. “Bid” has the meaning set forth in the CAISO Tariff.
“Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday in California. A Business Day begins at 8:00 a.m. and ends at 5:00 p.m. local time for the Party sending a Notice, or payment, or performing a specified action. “Buyer” means Marin Clean Energy, a California joint powers authority. “Buyer Default” means an Event of Default of Buyer.
“CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“CAISO Approved Meter” means a CAISO approved revenue quality meter or meters, metering scheme, CAISO approved data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time Charging Energy and Discharging Energy. “CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Metered Entity” has the meaning set forth in the CAISO Tariff. “CAISO Operating Order” means the Operating Instruction or Dispatch Instruction as defined in the CAISO Tariff.
“CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures (as such term in defined in Appendix A to the CAISO Tariff), including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC; provided that if there is a conflict between the BPMs, the CAISO Operating AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 3 Agreement or the Operating Procedures (as such term in defined in Appendix A to the CAISO Tariff), on the one hand, and the CAISO Tariff, on the other hand, the CAISO Tariff will control. “Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the ability of the Facility to charge, discharge and deliver to the Delivery Point energy, at a particular moment, and that can be purchased, sold and/or conveyed under CAISO or CPUC market rules, including Resource Adequacy Benefits. “Capacity Damages” has the meaning set forth in Section 5 of Exhibit B. “Change of Control” means, except in connection with public market transactions of equity interests or capital stock of Seller’s Ultimate Parent, any circumstance in which Ultimate Parent ceases to own, directly or indirectly through one or more intermediate entities, more than fifty percent (50%) of the outstanding equity interests in Seller; provided that in calculating ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more intermediate entities shall not be counted towards Ultimate Parent’s ownership interest in Seller unless Ultimate Parent directly or indirectly owns more than fifty percent (50%) of the outstanding equity interests in each such intermediate entity; and (b) ownership interests in Seller owned directly or indirectly by any Lender (including any cash equity or tax equity provider) or assignee or transferee thereof shall be excluded from the total outstanding equity interests in Seller.
“Charging Energy” means the energy delivered to the Facility pursuant to a Charging Notice as measured by the Facility Meter in accordance with CAISO metering requirements and Prudent Operating Practices, as such meter readings are adjusted pursuant to CAISO requirements for any applicable Electrical Losses.
“Charging Notice” means the operating instruction, and any subsequent updates, given by Buyer, Buyer’s SC or the CAISO to Seller, directing the Facility to charge with Charging Energy at a specific MW rate to a specified Stored Energy Level, provided that any such operating instruction shall be in accordance with the Operating Restrictions. For the avoidance of doubt, any Buyer request to initiate a Storage Capacity Test consistent with Section 4.9 shall not be considered a Charging Notice.
“Claim” has the meaning set forth in Section 16.2.
“COD Certificate” has the meaning set forth in Exhibit B. “COD Delay Damages” means an amount equal to
“Collateral Assignment Agreement” has the meaning set forth in Section 14.2. “Commercial Operation” has the meaning set forth in Exhibit B.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 4 “Commercial Operation Date” or “COD” has the meaning set forth in Exhibit B. “Compliance Actions” has the meaning set forth in Section 3.5(b). “Compliance Costs” has the meaning set forth in Section 3.5(a). “Compliance Expenditure Cap” has the meaning set forth in Section 3.5(a). “Confidential Information” has the meaning set forth in Section 18.1. “Construction Delay Damages” means an amount equal to
“Construction Start” has the meaning set forth in Exhibit B. “Construction Start Date” has the meaning set forth in Exhibit B. “Contract Price” has the meaning set forth on the Cover Sheet. For clarity, the Contract Price is the Storage Rate.
“Contract Term” has the meaning set forth in Section 2.1(a). “Contract Year” means a period of twelve (12) consecutive months. The first Contract Year shall commence on the Commercial Operation Date and the last Contract Year shall end at midnight at the end of the day prior to the anniversary of the Commercial Operation Date. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third-party transaction costs and expenses reasonably incurred by such Non-Defaulting Party either in terminating any arrangement pursuant to which it has hedged or financed its obligations or entering into new arrangements which replace this Agreement; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating this Agreement.
“Cover Sheet” means the cover sheet to this Agreement, which is incorporated into this Agreement.
“CPUC” means the California Public Utilities Commission or any successor agency performing similar statutory functions.
“Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P, Fitch or Moody’s. “Curtailment Order” means any of the following:
(a) CAISO orders, directs, alerts, or provides notice to a Party, including a CAISO Operating Order, to curtail deliveries of Charging Energy or Discharging Energy for the following reasons: (i) any System Emergency, or (ii) any warning of an anticipated System Emergency, or AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 5 warning of an imminent condition or situation, which jeopardizes CAISO’s electric system integrity or the integrity of other systems to which CAISO is connected; (b) a curtailment ordered by the Participating Transmission Owner for reasons including, but not limited to, (i) any situation that affects normal function of the electric system including, but not limited to, any abnormal condition that requires action to prevent circumstances such as equipment damage, loss of load, or abnormal voltage conditions, or (ii) any warning, forecast or anticipation of conditions or situations that jeopardize the Participating Transmission Owner’s electric system integrity or the integrity of other systems to which the Participating Transmission Owner is connected;
(c) a curtailment ordered by CAISO or the Participating Transmission Owner due to scheduled or unscheduled maintenance on the Participating Transmission Owner’s transmission facilities that prevents (i) Buyer from receiving Discharging Energy at the Delivery Point or (ii) Seller from receiving Charging Energy at, and/or delivering Discharging Energy to, the Delivery Point;
(d) any emergency or other electrical system condition that reasonably prevents (i) Buyer from receiving Discharging Energy at the Delivery Point or (ii) Seller from receiving Charging Energy at, and/or delivering Discharging Energy to, the Delivery Point, in each case consistent with the Operating Restrictions and Prudent Operating Practice; or (e) a curtailment in accordance with the obligations applicable to the Facility under the Interconnection Agreement with the Participating Transmission Owner or distribution operator. “Curtailment Period” means the period of time, as measured using current Settlement Intervals, during which Seller reduces generation from the Facility pursuant to a Curtailment Order.
“Damage Payment” means the dollar amount equal to the amount of the Development Security set forth on the Cover Sheet.
“Day-Ahead Forecast” has the meaning set forth in Section 4.3(b). “Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Day-Ahead Schedule” has the meaning set forth in the CAISO Tariff. “Defaulting Party” has the meaning set forth in Section 11.1(a). “Delivery Point” has the meaning set forth in Exhibit A. “Delivery Term” has the meaning set forth on the Cover Sheet. “Development Cure Period” has the meaning set forth in Exhibit B. “Development Security” means (i) cash or (ii) a Letter of Credit in the amount set forth for the Development Security on the Cover Sheet.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 6 “Discharging Energy” means the energy delivered from the Facility to the Delivery Point, net of Station Use, as measured by the Facility Meter in accordance with CAISO metering requirements and Prudent Operating Practices, as such meter readings are adjusted pursuant to CAISO requirements for any applicable Electrical Losses. For the avoidance of doubt, all Discharging Energy will have originally been delivered to the Facility as Charging Energy. “Discharging Notice” means the operating instruction, and any subsequent updates, given by Buyer to Seller, directing the Facility to discharge Discharging Energy at a specific MW rate to a specified Stored Energy Level, provided that any such operating instruction or updates shall be in accordance with the Operating Restrictions. For the avoidance of doubt, any Discharging Notice shall not constitute a Curtailment Order.
“Early Termination Date” has the meaning set forth in Section 11.2(a). “Effective Date” has the meaning set forth on the Preamble. “Efficiency Rate” means the measured round-trip efficiency rate of the Facility, expressed as a percentage, calculated pursuant to a Storage Capacity Test in accordance with Exhibit O. “Electrical Losses” means all transmission or transformation losses (a) between the Delivery Point and the Facility Meter for the receipt of Charging Energy and (b) between the Facility Meter and the Delivery Point for the delivery of Discharging Energy, each calculated in accordance with CAISO approved methodologies applicable to revenue metering. “Event of Default” has the meaning set forth in Section 11.1. “Executed Interconnection Agreement Milestone” means the date for completion of execution of the Interconnection Agreement by Seller (or Seller’s Affiliate) and the PTO as set forth on the Cover Sheet.
“Expected Commercial Operation Date” is the date set forth on the Cover Sheet by which Seller reasonably expects to achieve Commercial Operation. “Expected Construction Start Date” is the date set forth on the Cover Sheet by which Seller reasonably expects to achieve Construction Start. “Facility” means the energy storage facility described on the Cover Sheet and in Exhibit A (including the operational requirements of the energy storage facility), located at the Site and including mechanical equipment and associated facilities and equipment required to deliver Product (but excluding any Shared Facilities), and as such storage facility may be expanded or otherwise modified from time to time in accordance with the terms of this Agreement. “Facility Meter” means the bi-directional revenue quality meter or meters (with a 0.3 accuracy class) as shown in Exhibit R, along with a compatible data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Charging Energy delivered to the Facility Metering Point and the amount of Discharging Energy delivered to the Delivery Point.
For clarity, the Facility may contain multiple measurement devices that will make up the Facility AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 7 Meter, including the CAISO Approved Meter, and, unless otherwise indicated, references to the Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together.
“Facility Metering Point” means the location of the Facility Meter, as shown in Exhibit R.
“FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“Financed Tax Credit Percentage” has the meaning set forth in Exhibit C. “Fitch” means Fitch Ratings Ltd., or its successor.
“Force Majeure Event” has the meaning set forth in Section 10.1. “Forced Facility Outage” means an unexpected failure of one or more components of the Facility that prevents Seller from receiving Charging Energy or making Discharging Energy available at the Delivery Point and that is not the result of a Force Majeure Event. “Full Capacity Deliverability Status” has the meaning as such term is defined in the CAISO Tariff.
“Full Capacity Deliverability Status Finding” means a written confirmation from the CAISO that the Facility is eligible for Full Capacity Deliverability Status. “Gains” means, with respect to the Non-Defaulting Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner. Factors used in determining the economic benefit to a Non-Defaulting Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term, and include the value of Capacity Attributes.
“Governmental Authority” means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO; provided, however, that “Governmental Authority” shall not in any event include any Party. “Guaranteed Commercial Operation Date” or “Guaranteed COD” has the meaning set forth in Exhibit B.
“Guaranteed Construction Start Date” has the meaning set forth in Exhibit B.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 8 “Guaranteed Efficiency Rate” means the guaranteed Efficiency Rate of the Facility throughout the Delivery Term, as set forth on the Cover Sheet. “Guaranteed RA Amount” means the Qualifying Capacity of the Facility. “Guaranteed Storage Availability” has the meaning set forth in Section 4.8. “Guarantor” means, with respect to Seller, (a) an Affiliate of Seller with a tangible net worth of or (b) any Person reasonably
acceptable to Buyer, that (i) a tangible net worth of
(ii) is incorporated or organized in a jurisdiction of the United States and is in good standing in such jurisdiction, and (iii) executes and delivers a Guaranty for the benefit of Buyer.
“Guaranty” means a guaranty from a Guarantor provided for the benefit of Buyer substantially in the form attached as Exhibit L.
“Imbalance Energy” means the amount of energy in MWh, in any given Settlement Period or Settlement Interval, by which the amounts of Charging Energy or Discharging Energy deviates from the amount of Scheduled Energy.
“Indemnifiable Loss(es)” has the meaning set forth in Section 16.1(a). “Initial Synchronization” means the initial delivery of Discharging Energy to the Delivery Point.
“Installed Battery Capacity” means the maximum dependable operating capability of the Facility to discharge electric energy, not to exceed the Storage Contract Capacity set forth on the Cover Sheet, as measured in MWAC at the Delivery Point, that achieves Commercial Operation, as determined pursuant to the Storage Capacity Test undertaken in connection with delivery of Exhibit I and as adjusted for ambient conditions on the date of such Storage Capacity Test, and as evidenced by a certificate substantially in the form attached as Exhibit I hereto; provided that if the results of such Storage Capacity Test exceed the amount set forth as the Storage Contract Capacity on the Cover Sheet of this Agreement, then the Installed Battery Capacity shall be equal to the amount set forth as the Storage Contract Capacity on the Cover Sheet of this Agreement. “Interconnection Agreement” means that certain Large Generator Interconnection Agreement dated as of December 28, 2021, as amended, associated with CAISO Queue position 1552, by and among Cormorant Energy Storage, LLC, the CAISO, and Pacific Gas and Electric Company, pursuant to which the Facility will be interconnected with the Transmission System, and pursuant to which the Interconnection Facilities will be constructed, operated and maintained during the Contract Term.
“Interconnection Facilities” means the interconnection facilities, control and protective devices and metering facilities required to connect the Facility with the Transmission System in accordance with the Interconnection Agreement.
“Interconnection Point” has the meaning set forth in Exhibit A.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 9 “Interest Rate” has the meaning set forth in Section 8.2. “Interim Deliverability Status” has the meaning set forth in the CAISO Tariff. “Inter-SC Trade” or “IST” has the meaning set forth in the CAISO Tariff. “ITC” means the investment tax credit established pursuant to Section 48 of the United States Internal Revenue Code of 1986.
“Joint Powers Act” means the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.).
“Joint Powers Agreement” means that certain Joint Powers Agreement dated December 19, 2008, as amended from time to time, under which Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act.
“Law” means any applicable law, statute, rule, regulation, decision, writ, order, decree or judgment, permit or any interpretation thereof, promulgated or issued by a Governmental Authority.
“Lender” means, collectively, any Person (i) providing senior or subordinated construction, interim, back leverage or long-term debt, equity or tax equity financing or refinancing for or in connection with the development, construction, purchase, installation or operation of the Facility, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including tax equity), public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any Person directly or indirectly providing financing or refinancing for the Facility or purchasing equity ownership interests of Seller and/or Seller’s Affiliates, and any trustee or agent or similar representative acting on their behalf, (ii) providing Interest Rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations, and/or (iii) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Facility. “Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank or the U.S. branch of a foreign bank, which such bank having assets of , and with such bank having a Credit Rating of at least A- from S&P or A3 from Moody’s, in a form substantially similar to the letter of credit set forth in Exhibit K. To the extent Seller’s preferred standby letter of credit issuer requests reasonable changes to the form of Exhibit K, Buyer shall consider such requested changes in good faith. “Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the State of California. “Local Capacity Area Resources” has the meaning set forth in the CAISO Tariff. “Locational Marginal Price” or “LMP” has the meaning set forth in the CAISO Tariff.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 10 “Losses” means, with respect to the Non-Defaulting Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner.
Factors used in determining economic loss to a Non-Defaulting Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term, as applicable, and must include the value of Capacity Attributes. “Master File” has the meaning set forth in the CAISO Tariff. “Maximum Charging Capacity” has the meaning set forth in Exhibit A. “Maximum Discharging Capacity” has the meaning set forth in Exhibit A. “Maximum State of Charge” has the meaning set forth in Exhibit Q. “Milestones” means the development activities for significant permitting, interconnection, financing and construction milestones set forth on the Cover Sheet. “Minimum Efficiency Rate” has the meaning set forth on the Cover Sheet. “Minimum State of Charge” has the meaning set forth in Exhibit Q. “Monthly Forecast” has the meaning set forth in Section 4.3(a). “Moody’s” means Moody’s Investors Service, Inc., or its successors. “MW” means megawatts in alternating current, unless expressly stated in terms of direct current.
“MWh” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“Negative LMP” means, in any Settlement Period or Settlement Interval, the LMP in Real-Time Market at the Facility’s PNode is less than Zero dollars ($0). “NERC” means the North American Electric Reliability Corporation or any successor entity performing similar functions.
“Net Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “Network Upgrades” has the meaning set forth in the CAISO Tariff. “Non-Defaulting Party” has the meaning set forth in Section 11.2.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 11 “Notice” shall, unless otherwise specified in this Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or electronic messaging (email).
“Notice of Claim” has the meaning set forth in Section 16.2. “On-Peak Hour” means any hour from hour-ending 0700 to hour-ending 2200 (i.e., 6:00 AM to 9:59 PM) on Monday through Saturday, Pacific Prevailing Time, excluding North American Electric Reliability Council (NERC) holidays.
“Operating Restrictions” means those rules, requirements, and procedures set forth on Exhibit Q.
“Pacific Prevailing Time” means the prevailing standard time or daylight savings time, as applicable, in the Pacific time zone.
“Participating Transmission Owner” or “PTO” means an entity that owns, operates and maintains transmission or distribution lines and associated facilities or has entitlements to use certain transmission or distribution lines and associated facilities where the Facility is interconnected. For purposes of this Agreement, the Participating Transmission Owner is set forth in Exhibit A.
“Party” or “Parties” has the meaning set forth in the Preamble. “Performance Security” means (i) cash or (ii) a Letter of Credit or (iii) a Guaranty in the amount set forth for the Performance Security on the Cover Sheet. “Permitted Transferee” means (i) any Affiliate of Seller or (ii) an entity that satisfies, or is controlled by another Person that satisfies, the following requirements:
(a) A tangible net worth of
or a Credit Rating of at least BBB- from S&P, BBB- from Fitch, or Baa3 from Moody’s; and
(b) Has at least of experience in the ownership and operations of storage facilities similar to the Facility, or has retained a third-party with such operations experience to operate the Facility.
“Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“Planned Outage” has the meaning set forth in Section 4.6(a). “PNode” has the meaning set forth in the CAISO Tariff.
“Product” has the meaning set forth on the Cover Sheet.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 12 “Production Tax Credits” or “PTCs” means production tax credit under Section 45 of the Internal Revenue Code as in effect from time-to-time throughout the Delivery Term or any successor or other provision providing for a federal tax credit determined by reference to storage of energy resources for which Seller, as the owner of the Facility, is eligible. “Progress Report” means a progress report including the items set forth in Exhibit E. “Prudent Operating Practice” means (a) the applicable practices, methods and acts required by or consistent with applicable Laws and reliability criteria, and otherwise engaged in or approved by a significant portion of the electric utility industry during the relevant time period with respect to grid-interconnected, utility-scale energy storage facilities in the Western United States, and (b) any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Prudent Operating Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to acceptable practices, methods or acts generally accepted in the industry with respect to grid-interconnected, utility-scale energy storage facilities in the Western United States. Prudent Operating Practice includes compliance with applicable Laws, applicable reliability criteria, and the criteria, rules and standards promulgated in the National Electric Safety Code and the National Electrical Code, as they may be amended or superseded from time to time, including the criteria, rules and standards of any successor organizations.
“Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “RA Deficiency Amount” means the liquidated damages payment that Seller shall pay to Buyer for an applicable RA Shortfall Month as calculated in accordance with Section 3.3(b). “RA Plan” means each of (a) Buyer’s monthly or annual “Resource Adequacy Plan” (as defined in the CAISO Tariff) filed with the CAISO, and (b) Buyer’s monthly or annual resource adequacy plans filed with the CPUC.
“RA Shortfall” has the meaning set forth in Section 3.3(b). “RA Shortfall Month” means, for purposes of calculating an RA Deficiency Amount under Section 3.3(b), any month during the Delivery Term during which there is an RA Shortfall. “Real-Time Forecast” means any Notice of any change to the Storage Capacity delivered by or on behalf of Seller pursuant to Section 4.3(c).
“Real-Time Market” has the meaning set forth in the CAISO Tariff. “Real-Time Price” means the Resource-Specific Settlement Interval LMP as defined in the CAISO Tariff. If there is more than one applicable Real-Time Price for the same period of time, Real-Time Price shall mean the price associated with the smallest time interval. “Remedial Action Plan” has the meaning in Section 2.4.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 13 “Replacement RA” means Resource Adequacy Benefits, if any, equivalent to those that would have been provided by the Facility with respect to the applicable Showing Month, including, as applicable, any Local Capacity Area Resources, Resource Category and Flexible Capacity Category, and any successor criteria applicable to the Facility, unless Buyer consents to accept Replacement RA from another facility that provides non-equivalent Resource Adequacy Benefits; provided that any Replacement RA capacity must be communicated by Seller to Buyer with Replacement RA product information in a Notice to Buyer no later than the Notification Deadline. “Resource Adequacy Benefits” means the rights and privileges attached to the Facility that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in any Resource Adequacy Rulings and includes any local, zonal or otherwise locational attributes associated with the Facility, in addition to flex attributes associated with the Facility. “Resource Adequacy Rulings” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024 and any other existing or subsequent ruling or decision, or any other resource adequacy Law, however described, as such decisions, rulings or Laws may be amended or modified from time-to-time throughout the Delivery Term. “S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of S&P Global Inc.) or its successor.
“Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” has a corollary meaning.
“Scheduled Energy” means the Charging Energy schedule or Discharging Energy schedule, as applicable, that clears under the applicable CAISO market based on the final Day-Ahead Schedule, FMM Schedule (as defined in the CAISO Tariff), and/or any other financially binding Schedule, market instruction or CAISO dispatch for the Facility for a given period of time implemented in accordance with the CAISO Tariff.
“Scheduling Coordinator” or “SC” means an entity certified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff for the purposes of undertaking the functions specified in “Responsibilities of a Scheduling Coordinator,” of the CAISO Tariff, as amended from time to time.
“Security Interest” has the meaning set forth in Section 8.8. “Seller” has the meaning set forth on the Cover Sheet.
“Seller Termination Payment” has the meaning set forth in Section 11.9. “Settlement Amount” means the Non-Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Party. If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be zero dollars ($0). The Settlement Amount does not include consequential, incidental, punitive, exemplary or indirect or business interruption damages; provided, that the Parties agree that the AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 14 value of Capacity Attributes are direct damages to be accounted for as specified in the definitions of Losses and Gains.
“Settlement Interval” has the meaning set forth in the CAISO Tariff. “Settlement Period” has the meaning set forth in the CAISO Tariff. “Shared Facilities” means the gen-tie lines, transformers, substations, or other equipment, permits, contract rights, and other assets and property (real or personal), in each case, as necessary to enable delivery of energy from the Facility (which is excluded from Shared Facilities) to the point of interconnection, including the Interconnection Agreement itself, if applicable, that are used in common with third parties or by Seller for electric generation or energy storage facilities owned by Seller other than the Facility.
“Showing Month” means the calendar month of the Delivery Term that is the subject of the applicable compliance showing, as set forth in the Resource Adequacy Rulings and outlined in the CAISO Tariff. For illustrative purposes only, pursuant to the CAISO Tariff and Resource Adequacy Rulings in effect as of the Effective Date, the monthly compliance showing made in June is for the Showing Month of August.
“Site” means the real property on which the Facility is or will be located, as further described in Exhibit A, and as may be updated by Seller to identify the precise Site on which the Facility is located, which must be with the boundaries of the previously identified in Exhibit A, at the time Seller provides an executed Construction Start Date certificate in the form of Exhibit J to Buyer.
“Site Control” means that Seller or a Seller Affiliate: (a) owns or has the option to purchase the Site, including through an ownership interest in an Affiliate that owns the Site; (b) is the lessee or has the option to lease the Site; or (c) is the holder of an easement or an option for an easement, right-of-way grant, or similar instrument with respect to the Site. “SP-15” means the Existing Zone Generation Trading Hub for Existing Zone region SP-15 as set forth in the CAISO Tariff. “Station Use” means energy that is consumed (and not stored for resale) within the Facility for purposes other than for supporting a resale of energy back to the wholesale markets, which includes energy consumed to power information technology, lighting, ventilation, and safety systems, (or as otherwise defined as retail loads by the retail energy provider) except during periods in which the Facility is charging or discharging pursuant to a Charging Notice or Discharging Notice.
“Storage Capacity” means (a) the maximum dependable operating capability of the Facility to discharge electric energy that can be sustained for four (4) consecutive hours and (b) any other products that may be developed or evolve from time to time during the Contract Term that the Facility is able to provide in accordance with the Operating Restrictions as the Facility is configured on the Commercial Operation Date and that relate to the maximum dependable operating capability of the Facility to discharge electric energy.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 15 “Storage Capacity Test” means any test or retest of the Storage Contract Capacity of the Facility and/or Efficiency Rate conducted in accordance with the testing procedures, requirements and protocols set forth in Section 4.9 and Exhibit O.
“Storage Contract Capacity” means the total capacity (in MWAC) of the Facility initially equal to the amount set forth on the Cover Sheet, as the same may be adjusted from time to time pursuant to Section 5 of Exhibit B or Section 4.9 and Exhibit O to reflect the results of the most recently performed Storage Capacity Test; provided that if the results of the most recently performed Storage Capacity Test exceed the amount set forth as the Storage Contract Capacity on the Cover Sheet of this Agreement, then the Storage Contract Capacity shall be equal to the amount set forth as the Storage Contract Capacity on the Cover Sheet of this Agreement. “Storage Contract Output” means the maximum Stored Energy Level (in MWh-AC) of the Facility available to be used by Buyer pursuant to this Agreement, initially equal to the amount set forth on the Cover Sheet, as the same may be adjusted from time to time pursuant to Section 5(a) of Exhibit B or Section 4.9 and Exhibit O to reflect the results of the most recently performed Storage Capacity Test; provided that if the results of the most recently performed Storage Capacity Test exceed the amount set forth as the Storage Contract Output on the Cover Sheet of this Agreement, then the Storage Contract Output shall be equal to the amount set forth as the Storage Contract Output on the Cover Sheet of this Agreement.
“Storage Rate” has the meaning set forth on the Cover Sheet. “Stored Energy Level” means, at a particular time, the amount of electric energy in the Facility available to be discharged as Discharging Energy, expressed in MWh. “System Emergency” means any condition that requires, as determined and declared by CAISO or the PTO, automatic or immediate action to (i) prevent or limit harm to or loss of life or property, (ii) prevent loss of transmission facilities or generation supply in the immediate vicinity of the Facility, or (iii) to preserve Transmission System reliability. “Tax” or “Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Tax Credits” means PTCs, ITCs and any other state, local or federal tax credit, depreciation benefit, amortization, deduction, expense, exemption, preferential rate, and/or tax benefit or incentive associated with the operation of, construction, investments in or ownership of the Facility or any part thereof, including any cash payment or grant. “Terminated Transaction” has the meaning set forth in Section 11.2(a). “Termination Payment” has the meaning set forth in Section 11.3.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 16 “Test Product” means Product delivered (i) commencing on the later of (a) the first date that the CAISO informs Seller in writing that Seller may deliver any Product to the CAISO and (b) the first date that the Transmission Provider informs Seller in writing that Seller has conditional or temporary permission to operate in parallel with the CAISO Grid, and (ii) ending upon the occurrence of the Commercial Operation Date.
“Transformer Failure” means a failure of all or part of the Facility’s generator step-up transformer(s) that results in Seller being unable to receive Charging Energy or deliver Discharging Energy provided such transformer is maintained by Seller in accordance with Prudent Operating Practices.
“Transmission Provider” means any entity or entities transmitting or transporting the Charging Energy and Discharging Energy on behalf of Seller or Buyer to or from the Delivery Point.
“Transmission System” means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service within the CAISO Grid from the Delivery Point.
“Ultimate Parent” means
1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Article, Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless otherwise specified;
(e) a reference to a document or agreement, including this Agreement means such document, agreement or this Agreement including any amendment or supplement to, or replacement, novation or modification of this Agreement, but disregarding any amendment, supplement, replacement, novation or modification made in breach of such document, agreement or this Agreement;
(f) a reference to a Person includes that Person’s successors and permitted assigns;
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 17 (g) the term “including” means “including without limitation” and any list of examples following such term shall in no way restrict or limit the generality of the work or provision in respect of which such examples are provided; (h) references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires; (i) in the event of a conflict, a mathematical formula or other precise description of a concept or a term shall prevail over words providing a more general description of a concept or a term;
(j) references to any amount of money shall mean a reference to the amount in United States Dollars;
(k) the expression “and/or” when used as a conjunction shall connote “any or all of”;
(l) words, phrases or expressions not otherwise defined herein that (i) have a generally accepted meaning in Prudent Operating Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Operating Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings; and
(m) each Party acknowledges that it was represented by counsel in connection with this Agreement and that it or its counsel reviewed this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
ARTICLE 2
TERM; CONDITIONS PRECEDENT
2.1 Contract Term.
(a) The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect until the conclusion of the Delivery Term, subject to any early termination provisions set forth herein (“Contract Term”); provided, however, Buyer’s obligations to pay for or accept any Product are subject to Seller’s completion of the conditions precedent pursuant to Section 2.2.
(b) Applicable provisions of this Agreement shall continue in effect after termination, including early termination, to the extent necessary to enforce or complete the duties, obligations or responsibilities of the Parties arising prior to termination. The confidentiality obligations of the Parties under Article 18 and all indemnity and audit rights shall remain in full force and effect for two (2) years following the termination of this Agreement.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 18 2.2 Conditions Precedent.
(a) The Delivery Term shall not commence until Seller completes each of the following conditions:
(i) Seller has delivered to Buyer (i) a completed Commercial Operation Date Certificate from a Licensed Professional Engineer substantially in the form of Exhibit H and (ii) a completed certificate from a Licensed Professional Engineer substantially in the form of Exhibit I setting forth the Installed Battery Capacity on the Commercial Operation Date; (ii) A Participating Generator Agreement and a Meter Service Agreement between Seller and CAISO shall have been executed and delivered and be in full force and effect, and a copy of each such agreement delivered to Buyer; (iii) An Interconnection Agreement between Seller (or Seller’s Affiliate) and the PTO shall have been executed and delivered and be in full force and effect and a copy of the Interconnection Agreement delivered to Buyer;
(iv) Copies of executed agreements demonstrating Site Control shall have been delivered to Buyer; provided Seller will be permitted to redact any confidential information contained therein;
(v) Insurance requirements for the Facility pursuant to Article 17 have been met, with evidence provided in writing to Buyer;
(vi) All applicable regulatory authorizations, approvals and permits required for operation of the Facility have been obtained (or if not obtained, applied for and reasonably expected to be received within ninety (90) days) and all conditions thereof that are capable of being satisfied on the Commercial Operation Date have been satisfied and shall be in full force and effect, and Seller has delivered to Buyer an attestation certificate from an officer of Seller certifying to the satisfaction of this condition; (vii) Seller has certified in writing to Buyer that Seller has complied with the prevailing wage and project labor agreement requirements set forth in Section 13.4, and provided reasonably requested documentation demonstrating such compliance; (viii) Seller has achieved Full Capacity Deliverability Status for the Facility and provided Buyer a copy of the CAISO’s Full Capacity Deliverability Status Finding for the Facility;
(ix) Seller has certified in writing to Buyer that Seller has satisfied the other Seller commitments set forth in Exhibit S, and provided reasonably requested documentation demonstrating such compliance;
(x) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8; and
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 19 (xi) Seller has paid Buyer for all undisputed amounts owing under this Agreement, if any, including Construction Delay Damages and COD Delay Damages.
2.3 Development; Construction; Progress Reports. Within fifteen (15) days after the close of (i) each calendar quarter from the first calendar quarter following the Effective Date until the Expected Construction Start Date, and (ii) each calendar month from the first calendar month following the Expected Construction Start Date until the Commercial Operation Date, Seller shall provide a Progress Report to Buyer in the form set forth in Exhibit E. Seller agrees to regularly scheduled meetings between representatives of Buyer and Seller to review the Progress Reports and discuss Seller’s construction progress. Seller shall also provide Buyer with any reasonable requested documentation (subject to confidentiality restrictions) directly related to the achievement of Milestones within ten (10) Business Days of receipt of such request from Buyer.
For the avoidance of doubt, as between Seller and Buyer, Seller is solely responsible for the design and construction of the Facility, including the location of the Site, obtaining all permits and approvals to build the Facility, the Facility layout, and the selection and procurement of the equipment comprising the Facility.
2.4 Remedial Action Plan. If Seller (a) misses the Guaranteed Construction Start Date, (b) misses three (3) or more Milestones (other than the Guaranteed Construction Start Date), or (c) misses any one (1) Milestone (other than the Guaranteed Construction Start Date) by more than ninety (90) days, Seller shall submit to Buyer, within ten (10) Business Days of such missed Milestone completion date (or within ten (10) Business Days of the 90th day after such missed Milestone completion date, as applicable), a remedial action plan (“Remedial Action Plan”), which will describe in detail any delays (actual or anticipated) beyond the scheduled Milestone dates, including the cause of the delay, if known (e.g., governmental approvals, financing, property acquisition, design activities, equipment procurement, project construction, interconnection, or any other factor), Seller’s detailed description of its proposed course of action to achieve the missed Milestones and all subsequent Milestones by the Guaranteed Commercial Operation Date; provided, that delivery of any Remedial Action Plan shall not relieve Seller of its obligation to provide a Remedial Action Plan with respect to any subsequent Milestones in accordance with this Section 2.4. Subject to the provisions of Exhibit B, so long as Seller complies with its obligations under this Section 2.4, Seller shall not be considered in default of its obligations under this Agreement solely as a result of missing any Milestone.
ARTICLE 3
PURCHASE AND SALE
3.1 Purchase and Sale of Product. Subject to the terms and conditions of this Agreement, during the Delivery Term, Buyer will purchase all of the Product produced by or associated with the Facility at the Contract Price and in accordance with Exhibit C, and Seller shall supply and deliver to Buyer all of the Product produced by or associated with the Facility. At its sole discretion, Buyer may during the Delivery Term resell or use for another purpose all or a portion of the Product, provided that no such resale or use shall relieve Buyer of any obligations hereunder or modify any of Seller’s obligations hereunder. During the Delivery Term, Buyer will have exclusive rights to offer, bid, or otherwise submit the Product, or any component thereof, from the Facility after the Delivery Point for resale into the market or to any third party, and retain and receive any and all related revenues.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 20 3.2 Capacity Attributes. Seller shall have obtained Full Capacity Deliverability Status by the Commercial Operation Date. Seller shall maintain either Full Capacity Deliverability Status or Interim Deliverability Status at all times during the Delivery Term, subject to Section 3.2(b) below. As between Buyer and Seller, Seller shall be responsible for the cost and installation of any Network Upgrades associated with obtaining such Full Capacity Deliverability Status. (a) Throughout the Delivery Term, Seller grants, pledges, assigns and otherwise commits to Buyer all the Capacity Attributes from the Facility. (b) Throughout the Delivery Term and subject to Section 3.5, Seller shall use commercially reasonable efforts to maintain Full Capacity Deliverability Status or Interim Deliverability Status for the Facility from the CAISO and shall perform all actions necessary to ensure that the Facility qualifies to provide Resource Adequacy Benefits to Seller. Throughout the Delivery Term, Seller hereby covenants and agrees to transfer all Resource Adequacy Benefits to Buyer.
(c) For the duration of the Delivery Term, Seller shall take all commercially reasonable administrative actions, including complying with all applicable registration and reporting requirements, and executing all documents or instruments necessary to enable Buyer to use all of the Capacity Attributes committed by Seller to Buyer pursuant to this Agreement.
3.3 Resource Adequacy Failure.
(a) RA Deficiency Determination. For each RA Shortfall Month, Seller shall pay to Buyer the RA Deficiency Amount as liquidated damages or provide Replacement RA, in either case, as the sole and exclusive remedy for the Capacity Attributes Seller failed to convey to Buyer.
(b) RA Deficiency Amount Calculation. For each RA Shortfall Month occurring after the Commercial Operation Date, Seller shall pay to Buyer an amount (the “RA Deficiency Amount”) equal to
provided that Seller may, as an alternative to
paying RA Deficiency Amounts, provide Replacement RA in amounts up to the RA Shortfall, provided that any Replacement RA capacity is communicated by Seller to Buyer with Replacement RA product information in a written notice substantially in the form of Exhibit M at least seventy-five (75) days before the applicable CPUC Showing Month. In addition, if the CPUC requires Replacement RA to be provided by an incremental resource for purposes of CPUC Decision 21-06-035 in order for Buyer’s purchase of the Product to comply with the requirements of CPUC Decision 21-06-035 and D.23-02-040, then the Replacement RA must also be provided by an incremental resource, including any sub-category attributes of D.21-06-035, to the extent required, if such sub-categories are contracted for under this Agreement. “Replacement Price” AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 21 means (a) the price at which Buyer, acting in a commercially reasonable manner, purchases a replacement for the Capacity Attributes not delivered by Seller, plus costs reasonably incurred by Buyer in purchasing such replacement Capacity Attributes, or at Buyer’s option, (b) the market price for such replacement Capacity Attributes not delivered as determined by Buyer in a commercially reasonable manner; provided, however, Buyer shall not be required to utilize or change its utilization of its owned or controlled assets or market positions to minimize Seller’s liability.
3.4 CPUC Mid-Term Reliability Requirements.
(a) The Parties acknowledge that Buyer intends to apply this Agreement to satisfy a portion of its obligations to procure capacity to meet mid-term reliability requirements specified by the CPUC in CPUC Decision 21-06-035 and D.23-02-040. Seller represents and warrants to Buyer that:
(i) As of the Effective Date, the Facility is not on the baseline list of resources published by the CPUC on August 24, 2021, which, as of the Effective Date, is available at: https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/integrated-resource-plan-and-long-term-procurement-plan-irp-ltpp/d2106035_baseline_gen_list.xlsx; (ii) The Product shall include the exclusive right to claim the Capacity Attributes of the Facility up to an amount not greater than the Storage Contract Capacity as an incremental resource for purposes of CPUC Decision 21-06-035 and D.23-02-040; (iii) Seller has not and will not sell, assign or transfer the right to claim procurement of the Capacity Attributes of the Facility in an amount equal to the Storage Contract Capacity as an incremental resource for purposes of CPUC Decision 21-06-035 and D.23-02-040 during the Delivery Term to any other person or entity; and (iv) Seller will provide additional information and documentation to Buyer upon Buyer’s reasonable request to enable Buyer to demonstrate that the Facility meets the procurement mandates set forth in CPUC Decision 21-06-035 and D.23-02-040, and Seller will cooperate with Buyer to identify, gather and provide the requested information to the CPUC. (b) Buyer as of the Effective Date is required to demonstrate procurement progress to the CPUC through the Commercial Operation Date, and in connection with such obligation, Buyer is obligated to provide certain documentation to the CPUC for this Facility, including copies of the execution version of this Agreement, the execution version of the Interconnection Agreement, land leases, title deed or other documentation demonstrating Site Control, information regarding Facility development timelines, copies of notices to proceed with construction and similar evidence of Construction Start and Commercial Operation.
Notwithstanding Article 18 (Confidentiality), except to the extent that the CPUC no longer requires submission of such documentation, Seller hereby authorizes Buyer to submit this and similar documentation to the CPUC as may be required by the CPUC in connection with satisfying Buyer’s compliance obligations for the Facility under this Agreement; provided that Buyer shall use reasonable efforts to obtain from the CPUC confidential treatment for all information that AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 22 qualifies as Confidential Information under this Agreement and is eligible for confidential or protective treatment under the CPUC’s rules, orders, and decisions on confidential or protected information. Buyer’s reasonable efforts shall include the following: designating such Confidential Information as “confidential” and “protected materials” (or similar designations) under the CPUC’s orders and decisions governing the protection of confidential information submitted by load serving entities including as set forth in CPUC D.20-12-044 page 13; and either filing motion(s) to file under seal or submitting supporting declarations attesting to such designations when required by such orders and decisions.
3.5 Compliance Expenditure Cap.
(a) Notwithstanding anything to the contrary herein, if a change of law occurs after the Effective Date that (i) affects the Product’s eligibility to qualify for or maintain Resource Adequacy Benefits, or (ii) would reasonably be expected to cause Seller to incur costs to comply with Seller’s obligations under this Agreement with respect to obtaining, maintaining, conveying or effectuating Buyer’s use of the Capacity Attributes or Ancillary Services to be provided to Buyer hereunder that Seller would reasonably be expected to avoid incurring in the absence of such obligations, then Seller shall use commercially reasonable efforts to comply with such change of law as necessary to maintain the Product eligibility or comply with the obligations described above, subject to the following sentence. Notwithstanding anything to the contrary, the Parties agree that the maximum out-of-pocket costs and expenses (“Compliance Costs”) Seller shall be required to bear during the term of this Agreement to comply with all of such obligations shall be capped (the “Compliance Expenditure Cap”).
Seller’s internal administrative costs associated with obtaining, maintaining, conveying or effectuating, Buyer’s use of (as applicable) any Product are excluded from the Compliance Expenditure Cap.
(b) Any actions required for Seller to comply with its obligations set forth in the immediately preceding paragraph, the Compliance Costs of which will be included in the Compliance Expenditure Cap, shall be referred to collectively as the “Compliance Actions.” (c) If Seller reasonably anticipates the need to incur Compliance Costs in excess of the Compliance Expenditure Cap in order to take any Compliance Action Seller shall provide Notice to Buyer of such anticipated Compliance Costs. (d) Buyer will have sixty (60) days to evaluate such Notice (during which time period Seller is not obligated to take any Compliance Actions described in the Notice) and shall, within such time, either (1) agree to reimburse Seller for all or some portion of the Compliance Costs that exceed the Compliance Expenditure Cap (such Buyer-agreed upon costs, the “Accepted Compliance Costs”), or (2) waive Seller’s obligation to take such Compliance Actions, or any part thereof for which Buyer has not agreed to reimburse Seller. (e) If Buyer agrees to reimburse Seller for the Accepted Compliance Costs, then Seller shall take such Compliance Actions covered by the Accepted Compliance Costs as agreed upon by the Parties and Buyer shall reimburse Seller for Seller’s actual costs to effect the Compliance Actions, not to exceed the Accepted Compliance Costs, within sixty (60) days from the time that Buyer receives an invoice and documentation of such costs from Seller.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 23 (f) If Buyer does not pay the Compliance Costs in excess of the Compliance Expenditure Cap, or if it is not possible for Seller to achieve compliance with a change in law through the payment or incurrence of costs, then in each case (i) Seller shall be excused from the corresponding Compliance Actions under this Agreement, (ii) Buyer shall continue to pay Seller under this Agreement without any reduction in revenues that otherwise would result from the change in law, and (iii) with respect to Resource Adequacy Benefits, the Guaranteed RA Amount shall be adjusted downward to reflect the effect of the change in law. If Buyer does not respond to a Notice given by Seller under this Section 3.5 within sixty (60) days after Buyer’s receipt of same, Seller shall not be obligated to undertake such Compliance Actions for the remainder of the Contract Term; provided that Buyer may subsequently request, no more often than once per Contract Year, that Seller provide an updated Notice to Buyer of the anticipated Compliance Costs to undertake the previously waived Compliance Actions, and upon such request from Buyer, the Parties shall repeat the process set forth in this Section 3.5 with respect to such Compliance Actions.
ARTICLE 4
OBLIGATIONS AND DELIVERIES
4.1 Delivery. Subject to the provisions of this Agreement, commencing on the first day of the Delivery Term through the end of the Contract Term, Seller shall supply and deliver the Product to Buyer at the Delivery Point, and Buyer shall take delivery of the Product at the Delivery Point in accordance with the terms of this Agreement. Seller will be responsible for paying or satisfying when due any costs or charges imposed in connection with the delivery of the Product to the Delivery Point (excluding the cost of Charging Energy itself), including without limitation, Station Use, Electrical Losses, any costs associated with delivering the Charging Energy from the Delivery Point to the Facility, and any operation and maintenance charges imposed on Seller by the Transmission Provider directly relating to the Facility’s operations. Buyer shall be responsible for all costs, charges and penalties, if any, imposed in connection with (a) the delivery of Charging Energy to the Delivery Point (including the cost of Charging Energy itself) and (b) the acceptance and transmission of Discharging Energy at and after the Delivery Point, including without limitation transmission costs and transmission line losses with respect to clauses (a) and (b) and imbalance charges. The Charging Energy and Discharging Energy will be scheduled to the CAISO by Buyer (or Buyer’s designated Scheduling Coordinator) in accordance with Exhibit D.
4.2 Title and Risk of Loss. Title to and risk of loss related to the Discharging Energy shall pass and transfer from Seller to Buyer at the Delivery Point. Seller warrants that all Product delivered to Buyer at the Delivery Point is free and clear of all liens, security interests, claims and encumbrances of any kind, except to the extent arising from any Charging Energy delivered to the Delivery Point by Buyer.
4.3 Forecasting. Seller shall provide the forecasts described below at its sole expense and in a format reasonably acceptable to Buyer (or Buyer’s designee). Seller shall use reasonable efforts to provide forecasts that are accurate and, to the extent not inconsistent with the requirements of this Agreement, shall prepare such forecasts, or cause such forecasts to be prepared, in accordance with Prudent Operating Practices.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 24 (a) Forecast of Storage Capacity. No less than thirty (30) days before the Commercial Operation Date, and thereafter ten (10) Business Days before the beginning of each month during the Delivery Term, Seller shall provide to Buyer and Buyer’s SC (if applicable) a non-binding forecast of the hourly expected Storage Capacity for each day of the following month in a form substantially similar to the table found in Exhibit F (“Monthly Forecast”). In addition, no less than sixty (60) days before the beginning of each Contract Year, commencing with the first full Contract Year following the Commercial Operation Date, Seller shall provide to Buyer and Buyer’s SC (if applicable) a non-binding forecast of the expected Storage Capacity for each month of the following Contract Year.
(b) Day-Ahead Forecast. By 5:30 AM Pacific Prevailing Time on the Business Day immediately preceding the date of delivery, or as otherwise specified by Buyer consistent with Prudent Operating Practice, Seller shall provide Buyer and Buyer’s SC (if applicable) with a non-binding forecast of Storage Capacity for each hour of the immediately succeeding day (“Day-Ahead Forecast”). A Day-Ahead Forecast provided in a day prior to any non-Business Day(s) shall include non-binding forecasts for the immediate day, each succeeding non-Business Day and the next Business Day. Each Day-Ahead Forecast shall clearly identify, for each hour, Seller’s best estimate of the Storage Capacity for each hour of each applicable day. Except as otherwise agreed, Seller shall provide the Day-Ahead Forecast in the form of a CSV file or other mutually agreed file format delivered to Buyer’s SC and Buyer’s File Transfer Protocol (FTP) site as set forth in Exhibit N. If Seller fails to provide a Day-Ahead Forecast as required herein for any period, then for such unscheduled delivery period only Buyer and the SC (if applicable) shall rely on any Real-Time Forecast provided in accordance with Section 4.3(c) or the Monthly Forecast or Buyer’s best estimate based on information reasonably available to Buyer. (c) Real-Time Forecasts. During the Delivery Term, Seller shall notify Buyer and Buyer’s SC (if applicable) of any changes from the Day-Ahead Forecast of one (1) MW or more in Storage Capacity, whether due to Forced Facility Outage, Force Majeure Event or other cause, as soon as reasonably possible, but no later than one (1) hour prior to the deadline for submitting Schedules to the CAISO in accordance with the rules for participation in the Real-Time Market. If the Storage Capacity changes by at least one (1) MW as of a time that is less than one (1) hour prior to the Real-Time Market deadline, but before such deadline, then Seller must notify Buyer as soon as reasonably possible. Such Real-Time Forecasts shall contain information regarding the beginning date and time of the event resulting in the change in Storage Capacity, the expected end date and time of such event, and any other information required by the CAISO or reasonably requested by Buyer. These Real-Time Forecasts shall be communicated in a method reasonably acceptable to Buyer and the SC (if applicable); provided that Buyer or its SC specifies the method no later than five (5) Business Days prior to the effective date of such requirement. In the event Buyer fails to provide Notice of an acceptable method for communications under this Section 4.3(c), then Seller shall send such communications by telephone and email to Buyer and the SC (if applicable).
(d) Forced Facility Outages. Notwithstanding anything to the contrary herein, Seller shall notify the SC of Forced Facility Outages promptly but no later than the time periods required by the CAISO Tariff and the CAISO’s outage management rules and Seller shall keep the SC informed of any developments that will affect either the duration of the outage or the availability of the Facility during or after the end of the outage.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 25 (e) CAISO Tariff Requirements. Seller shall comply with all applicable CAISO Tariff requirements, procedures, protocols, rules and testing as necessary for Buyer to submit Bids for the electric energy charged and discharged by the Facility.
4.4 Dispatch Down/Curtailment.
(a) General. Seller agrees to reduce the amount of Discharging Energy produced by the Facility, by the amount and for the period set forth in any Curtailment Order; provided that Seller is not required to reduce such amount to the extent such reduction or any such Curtailment Order is inconsistent with the limitations of the Facility set out in the Operating Restrictions.
(b) Reserved.
(c) Failure to Comply. If Seller fails to comply with a Curtailment Order, then, for each MWh of Discharging Energy that is delivered by the Facility to the Delivery Point in contradiction of the Curtailment Order, Seller shall pay Buyer for each such MWh at an amount equal to
(d) Seller Equipment Required for Curtailment Instruction Communications.
Seller shall acquire, install, and maintain such facilities, communications links and other equipment, and implement such protocols and practices, as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, to operate the Facility as reasonably directed by the Buyer in accordance with this Agreement or a Governmental Authority, including to implement a Curtailment Order in accordance with the then-current methodology used to transmit such instructions as it may change from time to time. Subject to Section 3.5, (i) if at any time during the Delivery Term Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with then-current methodologies, Seller shall take the steps necessary to become compliant as soon as reasonably possible, and (ii) Seller shall be liable pursuant to Section 4.4(c) for failure to comply with a Curtailment Order during the time that Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with then-current methodologies. For the avoidance of doubt, a Curtailment Order communication via such systems and facilities shall have the same force and effect on Seller as any other form of communication.
4.5 Charging Energy Management.
(a) Upon receipt of a valid Charging Notice, Seller shall take any and all actions necessary to deliver the Charging Energy to the Facility from the Delivery Point in accordance with the terms of this Agreement (including the Operating Restrictions), including maintenance, repair or replacement of equipment in Seller’s possession or control used to deliver Charging Energy from the Delivery Point to the Facility. Except as otherwise expressly set forth in this AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 26 Agreement, Buyer shall be responsible for paying all costs and charges of delivering the Charging Energy to the Delivery Point, including all CAISO costs and charges associated with Charging Energy.
(b) Buyer will have the right to charge the Facility seven (7) days per week and twenty-four (24) hours per day (including holidays) during the Delivery Term, by providing Charging Notices to Seller electronically, provided, that Buyer’s right to issue Charging Notices is subject to Prudent Operating Practice, availability of the Facility, and the requirements and limitations set forth in this Agreement, including the Operating Restrictions and the provisions of Section 4.5(a). Each valid Charging Notice issued in accordance with this Agreement will be effective unless and until Buyer. Buyer’s SC or the CAISO modifies such Charging Notice by providing Seller with an updated valid Charging Notice. (c) Seller shall not charge the Facility during the Delivery Term other than pursuant to a valid Charging Notice (it being understood that Seller may adjust a Charging Notice to the extent necessary to maintain compliance with the Operating Restrictions), or in connection with a Storage Capacity Test, or pursuant to a notice from CAISO, the PTO, Transmission Provider, or any other Governmental Authority. If, during the Contract Term, Seller (a) charges the Facility to a Stored Energy Level greater than the Stored Energy Level provided for in the Charging Notice or (b) charges the Facility in violation of the first sentence of this Section 4.5(c), then (x) Seller shall be responsible for all energy costs associated with such charging of the Facility, (y) Buyer shall not be required to pay for the charging of such energy (i.e., Charging Energy), and (z) Buyer shall be entitled to discharge such energy and entitled to all of the benefits (including Product) associated with such discharge.
(d) Buyer will have the right to discharge the Facility seven (7) days per week and twenty-four (24) hours per day (including holidays) during the Delivery Term, by providing Discharging Notices to Seller electronically, provided, that Buyer’s right to issue Discharging Notices is subject to Prudent Operating Practice, availability of the Facility, and the requirements and limitations set forth in this Agreement, including the Operating Restrictions. Each valid Discharging Notice issued in accordance with this Agreement will be effective unless and until Buyer, Buyer’s SC or the CAISO modifies such Discharging Notice by providing Seller with an updated valid Discharging Notice.
(e) Notwithstanding anything in this Agreement to the contrary, during any Settlement Interval, CAISO Operating Orders and Curtailment Orders applicable to such Settlement Interval shall have priority over any Charging Notices and Discharging Notices applicable to such Settlement Interval, and Seller shall have no liability for violation of this Section 4.5 or any Charging Notice or Discharging Notice if and to the extent such violation is caused by Seller’s compliance with any CAISO Operating Order, Curtailment Order or other instruction or direction from a Governmental Authority or the PTO or the Transmission Provider.
Buyer shall have the right, but not the obligation, to provide Seller with updated Charging Notices and Discharging Notices during any CAISO Operating Order or Curtailment Order, subject to Prudent Operating Practice, availability of the Facility, and the requirements and limitations set forth in this Agreement, including the Operating Restrictions.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 27 (f) The Product will include the full suite of Ancillary Services that the Facility is physically capable of providing subject to the Operating Restrictions and without modification of the Facility, and Seller will dispatch the Facility in response to signals from the Buyer or Buyer’s Scheduling Coordinator, subject to Prudent Operating Practice, availability of the Facility, and the requirements and limitations set forth in this Agreement, including the Operating Restrictions.
4.6 Reduction in Delivery Obligation.
(a) Facility Maintenance. Between June 1st and September 30th, Seller shall not schedule non-emergency maintenance that reduces the storage capability of the Facility by more than ten percent (10%), unless (i) such outage is required to avoid damage to the Facility, (ii) such maintenance is necessary to maintain equipment warranties and cannot be scheduled outside the period of June 1st to September 30th, (iii) such outage is required in accordance with Prudent Operating Practices, or (iv) the Parties agree otherwise in writing (each scheduled maintenance permitted under this clause (a) and each of the foregoing outages described in foregoing clauses (a)(i) – (a)(iv), a “Planned Outage”). To the extent notice is not already required under the terms hereof, Seller shall notify Buyer as soon as practicable of any extensions to scheduled maintenance and expected end dates thereof.
(b) Forced Facility Outage. Seller shall be permitted to reduce deliveries of Product during any Forced Facility Outage. Seller shall provide Buyer with Notice and expected duration (if known) of any Forced Facility Outage.
(c) System Emergencies and other Interconnection Events. Seller shall be permitted to reduce deliveries of Product during any period of System Emergency, or upon Notice of a Curtailment Order pursuant to the terms of this Agreement, the Interconnection Agreement or applicable tariff.
(d) Force Majeure Event. Seller shall be permitted to reduce deliveries of Product during any Force Majeure Event.
(e) Health and Safety. Seller shall be permitted to reduce deliveries of Product as necessary to maintain health and safety pursuant to Section 6.2.
4.7 [Reserved].
4.8 Storage Availability.
(a)
(b)
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 28 4.9 Storage Capacity Tests.
(a) Prior to the Commercial Operation Date, Seller shall schedule and complete a Storage Capacity Test in accordance with Exhibit O. Thereafter, Seller and Buyer shall have the right to run additional Storage Capacity Tests in accordance with Exhibit O. (b) Buyer shall have the right to send one or more representative(s) to witness all Storage Capacity Tests. Buyer shall be responsible for all costs, expenses and fees payable or reimbursable to its representative(s) witnessing any Storage Capacity Test. Except as otherwise specified in Exhibit O, all other costs or revenues associated with any Storage Capacity Test shall be borne by, or accrue to, Seller, as applicable.
(c) Following each Storage Capacity Test, Seller shall submit a testing report in accordance with Exhibit O. The Storage Contract Capacity and Efficiency Rate determined pursuant to a Storage Capacity Test shall become the new Storage Contract Capacity and/or Efficiency Rate, at the beginning of the day following the completion of the test for all purposes under this Agreement, including compensation under Exhibit C.
4.10 Interconnection Capacity. Seller shall ensure that throughout the Delivery Term (a) the Facility will have an Interconnection Agreement providing for interconnection capacity available or allocable to the Facility that is no less than the then-effective Storage Contract Capacity and (b) Seller shall have sufficient interconnection capacity and rights under such Interconnection Agreement to interconnect the Facility with the CAISO-Controlled Grid, to fulfill Seller’s obligations under this Agreement, including with respect to Resource Adequacy Benefits, and to allow Buyer’s dispatch rights of the Facility to be fully reflected in the CAISO’s market optimization and not result in CAISO market awards that are not physically feasible (collectively, the “Dedicated Interconnection Capacity”). Seller shall hold Buyer harmless from any penalties, Imbalance Energy charges, or other costs from CAISO or under the Agreement resulting from Seller’s inability to provide, or any third party use of, the Dedicated Interconnection Capacity.
4.11 Station Use. Seller shall be responsible for providing all energy to serve Station Use (including paying the cost of any energy procured to serve Station Use) and all Station Use will be provided in accordance with applicable law, including in accordance with the applicable tariff of the local utility providing retail service to the Site. Seller shall indemnify and hold harmless Buyer from any and all costs, penalties, charges or other adverse consequences that result from energy supplied for Station Use by any means other than retail service from the applicable utility. Notwithstanding the foregoing, the Parties acknowledge and agree that (a) energy supplied from Charging Energy or Discharging Energy during periods in which the Facility is charging or discharging pursuant to a Charging Notice or Discharging Notice or as described in clause (c) below shall not be considered Station Use, (b) Station Use may be supplied over the same circuit as Charging Energy and Discharging Energy, and (c) during periods in which the Facility is not charging or discharging pursuant to a Charging Notice or Discharging Notice, the Facility may provide energy to serve thermal regulation load and transformer and inverter losses, including to the extent that such loads may otherwise be considered Station Use.
4.12 Facility Operations and Maintenance. Buyer shall at all times during the AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 29 Delivery Term retain the right to issue dispatch instructions for the Facility and be responsible for dispatching and coordinating charging of the Facility, in each case through the issuance of Charging Notices and Discharging Notices. Seller shall at all times during the Delivery Term retain operational control of the Facility and all other aspects of operation and maintenance of the Facility in accordance with Prudent Operating Practice and applicable Law and adhering to all operational data, interconnection and telemetry requirements applicable to the Facility.
4.13 Pre-Commercial Operation Date Period. Prior to Commercial Operation, (i) Buyer and Buyer’s SC shall have no rights to issue or cause to be issued Charging Notices or Discharging Notices except pursuant to Seller direction, (ii) Seller shall have exclusive rights to charge and discharge the Facility by providing such direction to Buyer or Buyer’s SC, (iii) Buyer and Buyer’s SC shall reasonably coordinate and cooperate with Seller’s directions with respect to the bidding and scheduling of the Facility (including for Test Product), and (iv) all CAISO costs, revenues, penalties and other amounts owing to or paid by CAISO in respect of the Facility, including without limitation for the Test Product, shall be for Seller’s account. For the avoidance of doubt, the conditions precedent in Section 2.2 are not applicable to the Parties’ obligations under this Section 4.13.
ARTICLE 5
TAXES
5.1 Allocation of Taxes and Charges. Seller shall pay or cause to be paid all Taxes on or with respect to the Facility or on or with respect to the sale and making available of Product to Buyer, that are imposed on Product prior to its delivery to Buyer at the time and place contemplated under this Agreement (other than withholding or other Taxes imposed on Buyer’s income, revenue, receipts or employees). Buyer shall pay or cause to be paid all Taxes on or with respect to the delivery to and purchase by Buyer of Product that are imposed on Product at and after its delivery to Buyer at the time and place contemplated under this Agreement (other than withholding or other Taxes imposed on Seller’s income, revenue, receipts or employees), if any, or on or with respect to Charging Energy prior to its delivery to Seller. If a Party is required to remit or pay Taxes that are the other Party’s responsibility hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement from the other for such Taxes. In the event any sale of Product hereunder is exempt from or not subject to any particular Tax, Buyer shall provide Seller with all necessary documentation within thirty (30) days after the Effective Date to evidence such exemption or exclusion. If Buyer does not provide such documentation, then Buyer shall indemnify, defend, and hold Seller harmless from any liability with respect to Taxes from which Buyer claims it is exempt.
5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, however, that neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefor from the other Party. All Product delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Product.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 30 ARTICLE 6
MAINTENANCE OF THE FACILITY
6.1 Maintenance of the Facility. Seller shall comply with Law and Prudent Operating Practice relating to the operation and maintenance of the Facility and the generation and sale of Product.
6.2 Maintenance of Health and Safety. Seller shall take reasonable safety precautions with respect to the operation, maintenance, repair and replacement of the Facility. If Seller becomes aware of any circumstances relating to the Facility that create an imminent risk of damage or injury to any Person or any Person’s property, Seller shall take prompt, reasonable action to prevent such damage or injury and shall give Notice to Buyer’s emergency contact identified on Exhibit N of such condition. Such action may include, to the extent reasonably necessary, disconnecting and removing all or a portion of the Facility, or suspending the supply of energy or Discharging Energy to Buyer.
6.3 Shared Facilities. The Parties acknowledge and agree that certain of the Shared Facilities and Interconnection Facilities, and Seller’s rights and obligations under the Interconnection Agreement, may be subject to certain shared facilities or co-tenancy agreements to be entered into among Seller, the Participating Transmission Owner, the Transmission Provider, Seller’s Affiliates, or third parties pursuant to which certain Interconnection Facilities may be subject to joint ownership and shared maintenance and operation arrangements; provided that such agreements shall permit Seller to perform or satisfy, and shall not purport to limit, its obligations hereunder.
ARTICLE 7
METERING
7.1 Metering. Seller shall measure the amount of Charging Energy and Discharging Energy using the Facility Meter; all of which will be subject to adjustment in accordance with applicable CAISO meter requirements and Prudent Operating Practices, including to account for Electrical Losses and Station Use. All meters will be operated pursuant to applicable CAISO-approved calculation methodologies and maintained as Seller’s cost. Subject to meeting any applicable CAISO requirements, the meters shall be programmed to adjust for Electrical Losses and Station Use in a manner subject to Buyer’s prior written approval, not to be unreasonably withheld. Seller shall obtain and maintain a single CAISO resource ID dedicated exclusively to the Facility. Seller shall not obtain additional CAISO resource IDs for the Facility without the prior written consent of Buyer, which shall not be unreasonably withheld. Metering will be consistent with the Metering Diagram set forth as Exhibit R, a final version of which shall be provided to Buyer at least thirty (30) days before the Commercial Operation Date. Each meter shall be kept under seal, such seals to be broken only when the meters are to be tested, adjusted, modified or relocated. In the event Seller breaks a seal, Seller shall notify Buyer as soon as practicable. In addition, Seller hereby agrees to provide all meter data to Buyer in a form reasonably acceptable to Buyer, and consents to Buyer obtaining from CAISO the CAISO meter data directly relating to the Facility and all inspection, testing and calibration data and reports.
Seller and Buyer shall cooperate to allow both Parties to retrieve the meter reads from the CAISO Market Results Interface – Settlements (MRI-S) (or its successor) or directly from the CAISO AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 31 meter(s) at the Facility.
7.2 Meter Verification. Annually, if Seller has reason to believe there may be a meter malfunction, or upon Buyer’s reasonable request, Seller shall test the meter. The tests shall be conducted by independent third parties qualified to conduct such tests. Buyer shall be notified seven (7) days in advance of such tests and have a right to be present during such tests. If a meter is inaccurate it shall be promptly repaired or replaced.
ARTICLE 8
INVOICING AND PAYMENT; CREDIT
8.1 Invoicing. Seller shall make good faith efforts to deliver an invoice to Buyer for Product within ten (10) days after the end of each month of the Delivery Term. Each invoice shall include (a) records of metered data, including CAISO metering and transaction data sufficient to document and verify the amount of Product delivered by the Facility for any Settlement Period during the preceding month, including the amount of Charging Energy charged by the Facility and the amount of Discharging Energy delivered from the Facility to the Delivery Point, in each case, as read by the Facility Meter, the amount of Replacement RA delivered to Buyer (if any), (b) the Contract Price applicable to such Product, and all adjustments to Seller’s monthly payment made in accordance with the Agreement, including Section 3.3(b) and Exhibit C. Upon request of Buyer, Seller shall provide access to any records, including invoices or settlement data from the CAISO, reasonably necessary to verify the accuracy of any amount. The invoice shall be in a format reasonably specified by Buyer, covering the services provided in the preceding month determined in accordance with the applicable provisions of this Agreement. Buyer shall, and shall cause its Scheduling Coordinator to, provide Seller with all reasonable access (including, in real time, to the maximum extent reasonably possible) to any records, including invoices or settlement data from the CAISO, forecast data and other information, all as may be necessary from time to time for Seller to prepare and verify the accuracy of all invoices; provided, however, that the Parties acknowledge and agree that if the CAISO metering and transaction data showing the amount of Product delivered by the Facility for any Settlement Period during the prior month is not available or final at the time each monthly invoice is delivered pursuant to this Section 8.1 and that the monthly invoice will be based on such data as are available at the time. When (i) CAISO metering and transaction data showing the amount of Product delivered by the Facility for each Settlement Period during the applicable month, including the amount of Charging Energy and the amount of Discharging Energy, in each case as read by the Facility Meter, and (ii) the amount of Replacement RA delivered to Buyer (if any), become available, Seller will true up such invoices to reflect any differences between Seller’s records and the data received from CAISO, and an appropriate credit or charge will be added to the invoice delivered by Seller for the following month.
8.2 Payment. Buyer shall make payment to Seller for Product (and any other amounts due) by wire transfer or ACH payment to the bank account designated by Seller in Exhibit N, which may be updated by Seller by Notice hereunder; provided, however, that changes to the invoices, payment, and wire transfer information set forth in Exhibit N must include contact information for an authorized person who is available by telephone to verify the authenticity of such requested changes. Buyer shall pay undisputed invoice amounts within thirty (30) days after receipt of the invoice; provided, if such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date will be considered late and will AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 32 bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on the prime rate published on the date of the invoice in The Wall Street Journal, or, if The Wall Street Journal is not published on that day, the next succeeding date of publication, plus two percent (2%) (the “Interest Rate”). If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day.
8.3 Books and Records. To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least two (2) years or as otherwise required by Law. Upon ten (10) Business Days’ Notice to the other Party, either Party shall be granted reasonable access to the accounting books and records within the possession or control of the other Party pertaining to all invoices generated pursuant to this Agreement. Seller acknowledges that in accordance with California Government Code Section 8546.7, Seller may be subject to audit by the California State Auditor with regard to Seller’s performance of this Agreement because the compensation under this Agreement exceeds Ten Thousand Dollars ($10,000).
8.4 Payment Adjustments; Billing Errors. Payment adjustments shall be made if Buyer or Seller discovers there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section 8.5, or an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.2, accruing from the date on which the adjusted amount should have been due.
8.5 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned via adjustments in accordance with Section 8.4. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.5 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 33 8.6 Netting of Payments. Unless otherwise mutually agreed, the Parties shall discharge mutual debts and payment obligations due and owing to each other on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including any related damages calculated pursuant to Exhibits B and P, interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.
8.7 Seller’s Development Security. To secure its obligations under this Agreement, Seller shall deliver the Development Security to Buyer within thirty (30) days of the Effective Date. Seller shall maintain the Development Security in full force and effect. Within five (5) Business Days following any draw by Buyer on the Development Security in accordance with the terms of this Agreement, including for payment of Construction Delay Damages or COD Delay Damages, Seller shall replenish the amount drawn such that the Development Security is restored to the amount specified on the Cover Sheet; provided that, in accordance with Section 11.7, Seller’s total replenishment obligation for the Development Security after the initial posting is limited to an amount equal to the initial amount of the Development Security. Upon the earlier of (i) Seller’s delivery of the Performance Security (which may include Seller’s election to apply all or a portion of the Development Security towards the Performance Security pursuant to Section 8.8), or (ii) sixty (60) days after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement and/or held and applied towards the Performance Security, and Seller’s obligation to maintain the Development Security shall cease. If the Development Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the minimum Credit Rating specified in the definition of Letter of Credit, (ii) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the Commercial Operation Date, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit in the amount of the Development Security and that otherwise meets the requirements set forth in the definition of Development Security.
8.8 Seller’s Performance Security. To secure its obligations under this Agreement, Seller shall deliver Performance Security to Buyer on or before the Commercial Operation Date.
Seller may elect to apply all or a portion of the Development Security posted in accordance with Section 8.7 towards the Performance Security required to be posted pursuant to this Section 8.8.
If the Performance Security is not in the form of cash or Letter of Credit, it shall be substantially in the form of Guaranty set forth in Exhibit L. Seller shall maintain the Performance Security in full force and effect until the following have occurred: (i) the Delivery Term has expired or terminated early; and (ii) all payment obligations of the Seller then due and payable under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Performance Security. Within five (5) Business Days after any draw by Buyer on the Performance Security, Seller shall replenish the amount drawn from the Performance Security so that such Performance Security is restored to the amount specified on the Cover Sheet; provided, that Seller’s obligation to replenish the Performance Security after the initial posting is limited to a total replenishment amount equal to
; provided, further, that notwithstanding any provision herein to the contrary, such AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 34 limitation on replenishment is not intended to and shall not be deemed to limit Seller’s liability for a Termination Payment. If the Performance Security is a Letter of Credit and the issuer of such Letter of Credit (A) fails to maintain the minimum Credit Rating set forth in the definition of Letter of Credit, (B) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the end of the Delivery Term, or (C) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Performance Security. Seller may at its option exchange one permitted form of Development Security or Performance Security for another permitted form of Development Security or Performance Security, as applicable.
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest (“Security Interest”) in, and lien on (and right to net against), and assignment of the Development Security, Performance Security, to the extent provided in the form of cash, and any other cash collateral and cash equivalent collateral posted pursuant to Sections 8.7 and 8.8 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s Security Interest in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.
Upon or any time after the occurrence and continuation of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Development Security or Performance Security, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.9):
(a) Exercise any of its rights and remedies with respect to the Development Security and Performance Security, including any such rights and remedies under Law then in effect;
(b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Development Security or Performance Security; and (c) Liquidate all Development Security or Performance Security (as applicable) then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.
Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller’s obligations under this Agreement (Seller remains liable for any amounts owing to Buyer after such application), subject to Buyer’s obligation to return any surplus proceeds remaining after these obligations are satisfied in full.
8.10 Seller Financial Statements. In the event a Guaranty is provided as Performance Security in lieu of cash or a Letter of Credit, Seller shall provide to Buyer, or cause the Guarantor to provide to Buyer, unaudited quarterly and annual audited financial statements of the Guarantor’s AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 35 ultimate parent (including a balance sheet and statements of income and cash flows), all prepared in accordance with generally accepted accounting principles in the United States, consistently applied.
ARTICLE 9
NOTICES
9.1 Addresses for the Delivery of Notices. Except as provided in Exhibit D, any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the address set forth on Exhibit N or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.
9.2 Acceptable Means of Delivering Notice. Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered as follows: (a) if sent by United States mail with proper first class postage prepaid, three (3) Business Days following the date of the postmark on the envelope in which such Notice was deposited in the United States mail; (b) if sent by a regularly scheduled overnight delivery carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees, the next Business Day after the same is delivered by the sending Party to such carrier; (c) if sent by electronic communication (including electronic mail or other electronic means), at the time indicated by the time stamp upon delivery without any bounce back or rejection, and if after 5 p.m.
Pacific Prevailing Time, on the next Business Day; or (d) if delivered in person, upon receipt by the receiving Party. Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch information or requests, may be sent by electronic communication and shall be considered delivered upon successful completion of such transmission.
ARTICLE 10
FORCE MAJEURE
10.1 Definition.
(a) “Force Majeure Event” means any act or event occurring after the Effective Date that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement, if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance.
(b) Without limiting the generality of the foregoing, so long as the following events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance or noncompliance, a Force Majeure Event may include an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; epidemic, or pandemic (including the impacts of the disease designated COVID-19 or the related virus designated SARS-CoV-2, except for impacts arising prior to the Effective Date); quarantine; landslide; mudslide; AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 36 sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; detention of equipment comprising the Facility by the United States Customs and Border Patrol, unless such equipment was detained due to violation of Law; or strikes or other labor difficulties caused or suffered by a Party or any third party, except as set forth below.
(c) Notwithstanding the foregoing, the term “Force Majeure Event” does not include (i) economic conditions that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including an increase in component costs for any reason, including foreign or domestic tariffs, Buyer’s ability to buy the Product at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under this Agreement); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above that disables physical or electronic facilities necessary to transfer funds to the payee party; (iv) a Curtailment Order or Curtailment Period, except to the extent such Curtailment Order or Curtailment Period is caused by a Force Majeure Event; (v) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Facility except to the extent such inability is caused by a Force Majeure Event; (vi) a strike, work stoppage or labor dispute limited only to any one or more of Seller, Seller’s Affiliates, Seller’s contractors, their subcontractors thereof or any other third party employed by Seller to work on the Facility, or (vii) any equipment failure except if such equipment failure is caused by a Force Majeure Event.
10.2 No Liability If a Force Majeure Event Occurs. Neither Seller nor Buyer shall be liable to the other Party in the event it is prevented from performing its obligations hereunder in whole or in part due to a Force Majeure Event. The Party rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take reasonable actions necessary to remove such inability. Nothing herein shall be construed as permitting that Party to continue to fail to perform after said cause has been removed. Neither Party shall be considered in breach or default of this Agreement if and to the extent that any failure or delay in the Party’s performance of one or more of its obligations hereunder is caused by a Force Majeure Event. Notwithstanding the foregoing, the occurrence and continuation of a Force Majeure Event shall not (a) suspend or excuse the obligation of a Party to make any payments due hereunder, (b) suspend or excuse the obligation of Seller to achieve the Guaranteed Construction Start Date, or Guaranteed Commercial Operation Date beyond the extensions provided in Exhibit B, or (c) limit Buyer’s right to declare an Event of Default pursuant to Section 11.1(b)(i) or Section 11.1(b)(ii) and receive a Damage Payment upon exercise of Buyer’s default rights pursuant to Section 11.2.
10.3 Notice. Within five (5) Business Days of becoming aware of the commencement of a delay or failure in performance due to a Force Majeure Event, the claiming Party shall provide the other Party with oral notice of the Force Majeure Event, and within two (2) weeks of becoming aware of the commencement of a delay or failure in performance due to a Force Majeure Event the claiming Party shall provide the other Party with notice in the form of a letter describing in detail the particulars of the occurrence giving rise to the Force Majeure Event claim, including the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 37 interruption in performance. Failure of the claiming Party to provide written notice as required in the preceding sentence constitutes a waiver of a Force Majeure Event claim for all periods prior to the non-claiming Party’s receipt of such written notice. The claiming Party shall promptly notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party. The suspension of performance due to a claim of a Force Majeure Event must be of no greater scope and of no longer duration than is required by the Force Majeure Event.
10.4 Termination Following Force Majeure Event. If a Force Majeure Event has occurred after the Commercial Operation Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon written Notice to the other Party. Upon any such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.1(b), and Buyer shall promptly return to Seller any Performance Security then held by Buyer, less any amounts drawn in accordance with this Agreement.
ARTICLE 11
DEFAULTS; REMEDIES; TERMINATION
11.1 Events of Default. An “Event of Default” shall mean, (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) day period despite exercising commercially reasonable efforts); (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default set forth in this Section 11.1; and except for (1) failure to provide Capacity Attributes, the exclusive remedies for which are set forth in Section 3.3, (2)
the exclusive remedies for
which are set forth in Section 4.8 and Exhibit C, and (3) failures related to the Efficiency Rate that do not trigger the provisions of Section 11.1(b)(iv), the exclusive remedies for which are set forth in Exhibit C, and (4) failures related to the Storage Contract Capacity that do not trigger the provisions of Section 11.1(b)(v), the exclusive remedies for which are set forth in Exhibit C), and such failure is not remedied within thirty (30) days after Notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if the Defaulting Party is unable to remedy such AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 38 default within such initial thirty (30) day period despite exercising commercially reasonable efforts);
(iv) such Party becomes Bankrupt;
(v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Article 14; or
(vi) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party. (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
(i) The failure of Seller to achieve Construction Start after the Guaranteed Construction Start Date;
(ii) The failure of Seller to achieve Commercial Operation after the Guaranteed Commercial Operation Date;
(iii) if, in any two consecutive Contract Years,
(iv) if, Seller fails to maintain the Minimum Efficiency Rate over any rolling 12-month period during the Delivery Term;
(v) if, Seller fails to maintain a Storage Contract Capacity (as determined pursuant to Exhibit O) equal to
(vi) if not remedied within ten (10) Business Days after Notice thereof, the failure by Seller to deliver a Remedial Action Plan required under Section 2.4; (vii) failure by Seller to satisfy the collateral requirements pursuant to Sections 8.7 or 8.8 within five (5) Business Days after Notice thereof from Buyer, and expiration of the cure periods set forth therein, with respect to the Development Security or Performance Security amount in accordance with this Agreement in the event Buyer draws against either for any reason other than to satisfy a Damage Payment, or a Termination Payment, as applicable; (viii) with respect to any Guaranty provided for the benefit of Buyer, the failure by Seller to provide for the benefit of Buyer either (1) cash, (2) a replacement Guaranty AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 39 from a different Guarantor meeting the criteria set forth in the definition of Guarantor, or (3) a replacement Letter of Credit from an issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in the amount required hereunder within ten (10) Business Days after Seller receives Notice of the occurrence of any of the following events:
(A) if any representation or warranty made by the Guarantor in connection with this Agreement is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof; (B) the failure of the Guarantor to make any payment required or to perform any other material covenant or obligation in any Guaranty; (C) the Guarantor becomes Bankrupt;
(D) the Guarantor shall fail to meet the criteria for an acceptable Guarantor as set forth in the definition of Guarantor;
(E) the failure of the Guaranty to be in full force and effect (other than in accordance with its terms) prior to the indefeasible satisfaction of all obligations of Seller hereunder; or
(F) the Guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of any Guaranty; or (ix) with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer either (1) cash, or (2) a substitute Letter of Credit from a different issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in the amount required hereunder within ten (10) Business Days after Seller receives Notice of the occurrence of any of the following events:
(A) the issuer of the outstanding Letter of Credit shall fail to maintain a Credit Rating of at least A- by S&P or A3 by Moody’s; (B) the issuer of such Letter of Credit becomes Bankrupt; (C) the issuer of the outstanding Letter of Credit shall fail to comply with or perform its obligations under such Letter of Credit and such failure shall be continuing after the lapse of any applicable grace period permitted under such Letter of Credit;
(D) the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit; (E) the issuer of the outstanding Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit;
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 40 (F) such Letter of Credit fails or ceases to be in full force and effect at any time; or
(G) Seller shall fail to renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit and as provided in accordance with this Agreement, and in no event less than sixty (60) days prior to the expiration of the outstanding Letter of Credit.
11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (“Non-Defaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“Early Termination Date”) that terminates this Agreement (the “Terminated Transaction”) and ends the Delivery Term effective as of the Early Termination Date;
(b) to accelerate all amounts owing between the Parties, and to collect as liquidated damages (i) the Damage Payment (in the case of an Event of Default by Seller occurring before the Commercial Operation Date, including an Event of Default under Section 11.1(b)(i) Section 11.1(b)(ii)), or (ii) the Termination Payment calculated in accordance with Section 11.3 below (in the case of any other Event of Default by either Party); (c) to withhold any payments due to the Defaulting Party under this Agreement; (d) to suspend performance; or
(e) to exercise any other right or remedy available at law or in equity, including specific performance or injunctive relief, except to the extent such remedies are expressly limited under this Agreement;
provided, that payment by the Defaulting Party of the Damage Payment or Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Party’s sole and exclusive remedy for the Terminated Transaction and the Event of Default related thereto.
11.3 Termination Payment. The termination payment (“Termination Payment”) for the Terminated Transaction shall be the aggregate of all Settlement Amounts plus any or all other amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information. Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (a) the actual damages that the Non-Defaulting Party would incur in connection with the Terminated Transaction would be AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 41 difficult or impossible to predict with certainty, (b) the Damage Payment or Termination Payment described in Section 11.2 or this Section 11.3 (as applicable) is a reasonable and appropriate approximation of such damages, and (c) the Damage Payment or Termination Payment described in Section 11.2 or this Section 11.3 (as applicable) is the exclusive remedy of the Non-Defaulting Party in connection with the Terminated Transaction but shall not otherwise act to limit any of the Non-Defaulting Party’s rights or remedies if the Non-Defaulting Party does not elect a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.
11.4 Notice of Payment of Termination Payment. As soon as practicable after a Terminated Transaction, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Damage Payment or Termination Payment and whether, in the case of a Termination Payment, the Termination Payment is due to or from the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for such calculation. The Termination Payment shall be made to or from the Non-Defaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.
11.5 Disputes With Respect to Termination Payment. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, the Defaulting Party shall, within five (5) Business Days of receipt of the Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the Termination Payment shall be determined in accordance with Article 15.
11.6 Rights And Remedies Are Cumulative. Except where an express and exclusive remedy or measure of liquidated damages is provided, the rights and remedies of a Party pursuant to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
11.7 Seller Pre-COD Liability Limitations. Subject to Seller’s compliance with Section 11.8 and notwithstanding anything to the contrary herein, prior to the Commercial Operation Date, Seller’s aggregate liability for any breaches of this Agreement by Seller or Events of Default of Seller other than arising due to fraud, misrepresentation, or willful misconduct shall be limited to an amount equal to
11.8 Seller Post-Termination Obligations. If this Agreement is terminated due to a Seller Event of Default, Seller shall not enter into any agreement to sell any Product from the Facility within three (3) years after the effective date of such termination without first having provided written notice to Buyer of an offer to purchase such Product (a “ROFO Offer”). Buyer shall have thirty (30) days to consider and respond to such ROFO Offer. If Buyer provides notice to Seller accepting the ROFO Offer within thirty (30) days, then the Parties shall negotiate in good faith to enter into a binding agreement for purchase and sale of Product in accordance with the price and non-price commercial terms of the ROFO Offer and otherwise substantially in the form of this Agreement. If the Parties fail to enter into a binding agreement within ninety (90) days of AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 42 Buyer’s acceptance of the ROFO Offer, then Seller shall have the right to enter into any other agreement for the purchase and sale of Product with one or more third parties within the next one hundred eighty (180) days, so long as the prices under such agreement are equal to or greater than the respective prices under the ROFO Offer. If Seller does not enter into such agreement within such one hundred eighty (180) day period, then Seller shall be required again to first provide a ROFO Offer to Buyer, and comply with the related obligations under this provision, with respect to any agreement to sell any Product from the Facility that Seller enters into within two (2) years after Buyer’s termination of this Agreement due to a Seller Event of Default.
ARTICLE 12
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.
12.1 No Consequential Damages. EXCEPT TO THE EXTENT PART OF AN
EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, OR PART OF AN ARTICLE 16 INDEMNITY CLAIM, OR INCLUDED IN A LIQUIDATED DAMAGES CALCULATION,
OR ARISING FROM FRAUD OR INTENTIONAL MISREPRESENTATION, NEITHER
PARTY SHALL BE LIABLE TO THE OTHER OR ITS INDEMNIFIED PERSONS FOR ANY
SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT, OR CONSEQUENTIAL DAMAGES, OR
LOSSES OR DAMAGES FOR LOST REVENUE OR LOST PROFITS, WHETHER
FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT, BY STATUTE, IN TORT OR CONTRACT.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 43 12.2 Waiver and Exclusion of Other Damages. EXCEPT AS EXPRESSLY SET
FORTH HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND
MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF LIABILITY CONTAINED IN
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF
CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.
FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE
REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR
MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.
IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY. THE
VALUE OF ANY TAX CREDITS, DETERMINED ON AN AFTER-TAX BASIS, LOST DUE TO BUYER’S DEFAULT AND AMOUNTS DUE IN CONNECTION WITH THE
RECAPTURE OF ANY TAX CREDITS OR OTHER TAX BENEFITS, IF ANY, SHALL BE DEEMED TO BE DIRECT DAMAGES.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 3.3, 4.8, 11.2, 11.3 AND AS PROVIDED IN
EXHIBIT B, EXHIBIT C, AND EXHIBIT P, THE PARTIES ACKNOWLEDGE THAT THE
DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT OTHERWISE
OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT, AND THAT THE
LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. IT IS THE INTENT OF THE PARTIES THAT THE
LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES
BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING
THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.
THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES AND THE
EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE REMEDY FOR THE
BREACH BY THE OTHER OF THE TERMS OF THIS AGREEMENT, AND EACH PARTY
WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE WITH RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.
AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 44 ARTICLE 13
REPRESENTATIONS AND WARRANTIES; AUTHORITY
13.1 Seller’s Representations and Warranties. As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability company, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and is qualified to conduct business in the state of California and each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller. (b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Seller’s performance under this Agreement. The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary limited liability company action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller. (c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Seller shall comply with all applicable federal, state and local laws, statutes, ordinances, rules and regulations, and the orders and decrees of any courts or administrative bodies or tribunals, including, without limitation those related to non-discrimination, non-preference and conflict of interest.
(f) Seller shall maintain Site Control throughout the Delivery Term. (g) Seller shall obtain any and all applicable permits and approvals, including without limitation, environmental clearance under the California Environmental Quality Act (“CEQA”) or other environmental law, from the local jurisdiction where the Facility will be constructed. Seller acknowledges that Buyer is purchasing the Product under this Agreement and does not intend to be the lead agency for the Facility. (h) Seller represents and warrants that it has not and will not knowingly utilize equipment or resources for the construction, operation or maintenance of the Facility that rely on AI #06 Att. A: Energy Storage Agreement with Cormorant Energy Storage, LLC 45 work or services exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily (“Forced Labor”). The Parties acknowledge that pursuant to the business advisory jointly issued by the U.S. Departments of State, Treasury, Commerce and Homeland Security on July 1, 2020, equipment or resources sourced from the Xinjiang region of China are presumed to involve Forced Labor.