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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ Golden Fields Solar IV, LLC Exhibit S - 1
EXHIBIT S
DIVERSITY REPORTING
AI #07_C.4_Att.: Amnd & Restd Renewable PPA w/ Golden Fields Solar IV, LLC Exhibit S - 2
AI #07_C.4_Att.: Amnd & Restd Renewable PPA w/ Golden Fields Solar IV, LLC Exhibit S - 3
AI #07_C.4_Att.: Amnd & Restd Renewable PPA w/ Golden Fields Solar IV, LLC Exhibit S - 4
AI #07_C.4_Att.: Amnd & Restd Renewable PPA w/ Golden Fields Solar IV, LLC Exhibit S - 5
AI #07_C.4_Att.: Amnd & Restd Renewable PPA w/ Golden Fields Solar IV, LLC Exhibit S - 6
AI #07_C.4_Att.: Amnd & Restd Renewable PPA w/ Golden Fields Solar IV, LLC Exhibit S - 7
AI #07_C.4_Att.: Amnd & Restd Renewable PPA w/ Golden Fields Solar IV, LLC Exhibit S - 8
AI #07_C.4_Att.: Amnd & Restd Renewable PPA w/ Golden Fields Solar IV, LLC Exhibit S - 9
AI #07_C.4_Att.: Amnd & Restd Renewable PPA w/ Golden Fields Solar IV, LLC Exhibit S - 10
AI #07_C.4_Att.: Amnd & Restd Renewable PPA w/ Golden Fields Solar IV, LLC Exhibit S - 11
AI #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ Golden Fields Solar IV, LLC Exhibit U - 1
EXHIBIT U
POLLINATOR SCORECARD
AI #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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 #07_C.4_Att.: Amnd & Restd Renewable PPA w/ 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
#07 C.5)
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 - 32 18058184.5 [10466-35]
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:
AI #07_C.5_Att.: Amended & Restated PPA & Sale Agreement w/G2 Energy, Ostrom Rd., LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 33 18058184.5 [10466-35]
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.
AI #07_C.5_Att.: Amended & Restated PPA & Sale Agreement w/G2 Energy, Ostrom Rd., LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 34 18058184.5 [10466-35]
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.
AI #07_C.5_Att.: Amended & Restated PPA & Sale Agreement w/G2 Energy, Ostrom Rd., LLC AMENDED AND RESTATED POWER PURCHASE AND SALE AGREEMENT - 35 18058184.5 [10466-35]
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 #07_C.5_Att.: Amended & Restated PPA & Sale Agreement w/G2 Energy, Ostrom Rd., 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 #07_C.5_Att.: Amended & Restated PPA & Sale Agreement w/G2 Energy, Ostrom Rd., 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 #07_C.5_Att.: Amended & Restated PPA & Sale Agreement w/G2 Energy, Ostrom Rd., LLC December 6, 2023
TO: MCE Board of Directors
FROM: Dave Garti, Community Development Manager
RE: 2023 Charles F. McGlashan Advocacy Award Nominations (Agenda Item #08)
ATTACHMENTS: List of Past Charles F. McGlashan Advocacy Award Recipients Dear Executive Committee Members:
Summary:
The Charles F. McGlashan Advocacy Award was established by MCE in 2011 to recognize individuals and organizations who have demonstrated passion, dedication, and leadership on behalf of MCE. The annual award also honors and commemorates the life and legacy of environmental leadership of founding MCE Chair Charles F.
McGlashan.
Recipients of the award are recognized with a ceremony held at a regular meeting of the MCE Board of Directors, typically in February. Recipients will also have their names inscribed on a plaque that shares past awardees and is displayed outside the Charles McGlashan Room at the MCE office in San Rafael. The recipient will also be recognized in MCE’s e-newsletter, online blog, and social media. 2023 Charles F. McGlashan Award Nominees:
● Chris Benz, Napa Climate NOW!
● Karen Madden, Marin School of Environmental Leadership (SEL) ● Tom White and Ruthie Levin, Eden Housing
Chris Benz with Napa Climate NOW!
Chris Benz is a Napa-based environmental advocate who cofounded Napa Climate NOW!, a nonprofit organization that champions local action to lower emissions and restore natural climate systems. Through her leadership with Napa Climate NOW!, Chris played an instrumental role in organizing the inaugural Napa Climate Summit in 2023. The Summit convened over 170 stakeholders including state and local elected officials, municipal staff, and community partners to accelerate climate action throughout Napa County. As part of the summit, MCE staff participated in a panel on available funding opportunities for climate action which led to productive connections with municipal staff.
Chris has been a vocal and active proponent of MCE. She regularly promotes the benefits of MCE service at municipal meetings, and consistently urges local elected officials to utilize MCE programs as a component of climate action planning in Napa County. Through the partnership between MCE and Napa Climate NOW!, Chris has organized six community events in the past year to foster climate action, including an electric vehicle showcase, a multifamily property owner resource fair, and Earth Day events. Through her tireless efforts, Chris has demonstrated how organizing at the local level can create meaningful partnerships to address the climate crisis.
Karen Madden with Marin School of Environmental Leadership Karen Madden serves as the Lead Teacher for the Marin School of Environmental Leadership, a seminar program at Terra Linda High School in San Rafael that focuses on developing future environmental leaders. In 2023, Karen partnered with MCE staff to develop a curriculum for ninth grade students focused on renewable energy. MCE staff served in a “Community Partner” role with Karen’s class and met on a bi-weekly basis with Karen and her students to develop a comprehensive, student led renewable energy outreach and engagement campaign.
As part of their final project, students from Karen’s ninth grade class:
• Presented to the City of San Rafael’s Sustainability Commission about key components of renewable energy generation,
• Developed an Instagram page with over 150 followers that contained top tips and tricks about making energy efficient choices,
• Held community tabling events at Green Change Marin’s annual Earth Day Fair in Mill Valley, and
• Attended Venetia Valley’s annual Spring carnival to distribute flyers and key information about MCE’s EV charging programs, Deep Green, and general information about community choice energy.
Under her leadership, Karen’s students encouraged their peers, parent network, and broader community to adopt renewable energy and build awareness of MCE.
Karen recognizes that young people are crucial change agents in addressing the climate crisis and empowered her students to be community minded and civically engaged over the course of the spring 2023 semester.
Tom White and Ruthie Levin with Eden Housing
Through the leadership of Tom White and Ruthie Levin, Eden Housing is currently in the process of electrifying a 91-unit multifamily property in Contra Costa County. Tom and Ruthie worked with MCE to participate in our Multifamily Energy Savings (MFES) and Low-Income Family and Tenants (LIFT) programs, as well as the Strategic Energy Management (SEM) program to ensure that the property saves both energy and money. Transition of gas appliances to electric options at multifamily housing sites allows greater use of MCE’s clean electricity generation to reduce the use of fossil fuels. The current work scope, which includes converting existing gas wall furnaces to electric appliances with space heating and cooling, will reduce greenhouse gas emissions while providing greater comfort to residents.
By utilizing SEM, MFES, and LIFT, Tom and Ruthie have demonstrated their commitment to long term solutions and behavioral changes to support energy resiliency in affordable housing. Eden Housing is consistently on the cutting edge of MCE programs, helping us to design and implement creative solutions that improve the customer experience.
Fiscal Impacts:
None.
Recommendation:
Select the 2023 recipient(s) of the Charles F. McGlashan Advocacy Award to be presented at a future meeting of the MCE Board of Directors.
Past Charles F. McGlashan Advocacy Award Recipients
2011 Barbara George, Women’s Energy Matters
2012 The Mainstreet Moms
2013 Lea Dutton of the San Anselmo Quality, Life Commission 2014 Doria Robinson, Urban Tilth
2015 Constance Beutel, Benicia’s Community Sustainability Commission 2016 Sustainable Napa County
2017 The El Cerrito Environmental Quality Committee
2018 Sustainable Lafayette
Resilient Neighborhoods
Verna Causby-Smith, EAH Affordable Housing
2019 Sustainable Rossmoor and the National Council for Jewish Women, Contra Costa Division
Gloria Castillo, Canal Alliance
2020 Deborah Elliott, County of Napa
Fairfax Climate Action Committee
Marin Center for Independent Living (MCIL), Disability Services Legal Center (DSLC), the Independent Living Resources of Solano and Contra Costa (ILRSCC), and Vi Ibarra, Developmental Disabilities Council of Contra Costa County
2021 Sustainable Contra Costa
2022 Matt Belasco, Pittsburg Unified School District
Sara Bellafronte, City of Pittsburg
Napa Green
AI #08_Att.: Past Charles F. McGlashan Advocacy Award Recipients December 6, 2023
TO: MCE Executive Committee
FROM: Jenna Tenney, Manager of Communications and Community Engagement
John Dalessi, Pacific Energy Advisors
RE: Revised MCE Implementation Plan to Include the City of Hercules (Agenda Item #10)
ATTACHMENT: Addendum No. 9 to the MCE Implementation Plan and Statement of Intent to the CPUC
Dear Executive Committee Members:
Summary:
On November 16, 2023, your Board approved Resolution No. 2023-12 Approving the City of Hercules as a Member of MCE. On February 8, 2017, the California Public Utilities Commission (CPUC) passed Resolution E-4907, which delays the timeline by which a new member jurisdiction may begin service with a community choice aggregator.
CPUC Resolution E-4907 also requires the submission of an Addendum to MCE’s Implementation Plan and Statement of Intent by the end of 2023 to start service in 2025. If the CPUC approves the addendum, customers in Hercules would be eligible for enrollment starting January 1, 2025. Staff would likely recommend enrollment in April 2025, in alignment with the timing of previous new community enrollments.
At the November Board meeting, your Board approved a draft version of Addendum No. 9 to the MCE Implementation Plan and Statement of Intent to the CPUC (Implementation Plan) adding the City of Hercules and authorizing the Executive Committee to approve the final version. Consistent with California Public Utilities Code § 366.2, Staff have completed the draft and now present the final Implementation plan for your approval.
Fiscal Impacts:
None to submit the Implementation Plan. All other fiscal impacts for the addition of the City of Hercules, which are expected to be limited due to the relatively small size of the customer base, have been reviewed at the November 16, 2023 meeting. Specific budgetary impacts would be reflected in FY 2025/26.
Recommendation:
Approve Addendum No. 9 to the MCE Implementation Plan and Statement of Intent and direct Staff to submit to the CPUC.
DRAFT
MARIN CLEAN ENERGY
ADDENDUM NO. 9 TO THE REVISED
COMMUNITY CHOICE AGGREGATION
IMPLEMENTATION PLAN AND
STATEMENT OF INTENT
TO ADDRESS MCE EXPANSION TO THE CITY
OF HERCULES
November 16, 2023
For copies of this document contact Marin Clean Energy in San Rafael, California or visit www.mcecleanenergy.org
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent i November 2023 – Addendum No. 9
Table of Contents
CHAPTER 1 – Introduction..................................................................................................................................... 2 CHAPTER 2 – Changes to Address MCE Expansion to the City of Hercules; ................................................ 5 Aggregation Process............................................................................................................................................. 7 Program Phase-In ................................................................................................................................................. 7 Sales Forecast......................................................................................................................................................... 9 Financial Plan ...................................................................................................................................................... 13 Expansion Addendum Appendices ................................................................................................................. 14 AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 2 November 2023 – Addendum No. 9
CHAPTER 1 – INTRODUCTION
The purpose of this document is to make certain revisions to the Marin Clean Energy Implementation Plan and Statement of Intent in order to address the expansion of Marin Clean Energy (“MCE”) to the City of Hercules. MCE is a public agency that was formed in December 2008 for purposes of implementing a community choice aggregation (“CCA”) program and other energy-related programs targeting significant greenhouse gas emissions (“GHG”) reductions. At that time, the Member Agencies of MCE included eight of the twelve municipalities located within the geographic boundaries of Marin County: the cities/towns of Belvedere, Fairfax, Mill Valley, San Anselmo, San Rafael, Sausalito and Tiburon and the County of Marin (together the “Members” or “Member Agencies”). In anticipation of CCA program implementation and in compliance with state law, MCE submitted the Marin Energy Authority Community Choice Aggregation Implementation Plan and Statement of Intent (“Implementation Plan”) to the California Public Utilities Commission (“CPUC” or “Commission”) on December 9, 2009.
Consistent with its expressed intent, MCE successfully launched the Marin Clean Energy CCA program (“MCE” or “Program”) on May 7, 2010 and has been serving customers since that time.
During the second half of 2011, four additional municipalities within Marin County, the cities of Novato and Larkspur and the towns of Ross and Corte Madera, joined MCE, and a revised Implementation Plan reflecting updates related to this expansion was filed with the CPUC on December 3, 2011.
Subsequently, the City of Richmond, located in Contra Costa County, joined MCE, and a revised Implementation Plan reflecting updates related to this expansion was filed with the CPUC on July 6, 2012.
A revision to MCE’s Implementation Plan was then filed with the Commission on November 6, 2012 to ensure compliance with Commission Decision 12-08-045, which was issued on August 31, 2012. In Decision 12-08-045, the Commission directed existing CCA programs to file revised Implementation Plans to conform to the privacy rules in Attachment B of the aforementioned Decision.
During 2015, the County of Napa and the Cities of Benicia, El Cerrito, and San Pablo joined MCE; service was extended to customers in unincorporated Napa County during February 2015 and to customers in Benicia, El Cerrito and San Pablo during May 2015. To address the anticipated effects of these expansions, MCE filed with the Commission a revision to its Implementation Plan on July 18, 2014 to address expansion to the County of Napa (the Commission subsequently certified this revision on September 15, 2014). Following the Commission’s certification of this revision, MCE submitted Addendum No. 1 to the Revised Community Choice Aggregation Implementation Plan and Statement of Intent to Address MCE Expansion to the City of San Pablo (“Addendum No. 1”) on September 25, 2014 (and the Commission subsequently certified Addendum No. 1 on October 29, 2014); and Addendum No. 2 to the Revised Community Choice Aggregation Implementation Plan and Statement of Intent to Address MCE Expansion to the City of Benicia (“Addendum No. 2”) on November 21, 2014 (the Commission subsequently certified AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 3 November 2023 – Addendum No. 9
Addendum No. 2 on December 1, 2014); and Addendum No. 3 to the Revised Community Choice Aggregation Implementation Plan and Statement of Intent to Address MCE Expansion to the City of El Cerrito (“Addendum No. 3”) on January 7, 2015 (the Commission subsequently certified Addendum No. 3 on January 16, 2015).
On April 21, 2016, MCE’s Board of Directors (the “Board” or “Governing Board”) unanimously adopted Resolution No. 2016-01, which approved the cities of American Canyon, Calistoga, Lafayette, Napa, St. Helena and Walnut Creek as well as the Town of Yountville as members of MCE. On this date, MCE’s Board also approved the related Addendum No. 4 to its Revised Community Choice Aggregation Implementation Plan and Statement of Intent (“Addendum No. 4”), which addressed expansion to such Communities. Addendum No. 4 was submitted to the Commission on April 22, 2016; Addendum No. 4 was certified by the Commission thereafter on May 6, 2016.
On July 20, 2017, MCE’s Board adopted Resolution No. 2017-06, which approved Contra Costa County (unincorporated areas); the cities of Concord, Martinez, Oakley, Pinole, Pittsburg and San Ramon; and the towns of Danville and Moraga as members of MCE. On this date, MCE’s Board also approved the related Addendum No. 5 to its Revised Community Choice Aggregation Implementation Plan and Statement of Intent (“Addendum No. 5”), which addressed expansion to such Communities. Addendum No. 5 was submitted to the Commission on September 25, 2017; Addendum No. 5 was certified by the Commission thereafter on December 21, 2017.
On October 18, 2018, MCE’s Board approved the membership request of Solano County (unincorporated areas) via Resolution No. 2018-12, which also approved the related Addendum No. 6 to MCE’s Revised Community Choice Aggregation Implementation Plan and Statement of Intent (“Addendum No. 6”), addressing service delivery within the unincorporated areas of Solano County. Addendum No. 6 was submitted to the Commission on November 20, 2018; Addendum No. 6 was certified by the Commission thereafter on February 19, 2019.
Following the aforementioned expansions, MCE’s Board approved the membership requests of the cities of Pleasant Hill and Vallejo on November 21, 2019 via Resolution No. 2019-05, which also approved the related Addendum No. 7 to MCE’s Revised Community Choice Aggregation Implementation Plan and Statement of Intent (“Addendum No. 7”), which addressed service delivery within the cities of Pleasant Hill and Vallejo. Addendum No. 7 was submitted to the Commission on December 6, 2019; Addendum No. 7 was certified by the Commission thereafter on March 9, 2020.
MCE’s Board approved the membership request of the City of Fairfield on November 19, 2020 via Resolution No. 2020-03 (attached hereto as Appendix A), and similarly approved this Addendum No. 8 to MCE’s Revised Community Choice Aggregation Implementation Plan and Statement of Intent (“Addendum No. 8”), which addresses service delivery within the City of Fairfield. Addendum No. 8 was submitted to the Commission on DATE; Addendum No. 8 was certified by the Commission thereafter on DATE.
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 4 November 2023 – Addendum No. 9
More recently, MCE’s Board approved the membership request of the City of Hercules on November 16, 2023 via Resolution No. 2023-12 (attached hereto as Appendix A), and similarly approved this Addendum No. 9 to MCE’s Revised Community Choice Aggregation Implementation Plan and Statement of Intent (“Addendum No. 9”), which addresses service delivery within the City of Hercules.
The MCE program now provides electric generation service to approximately 585,000 customers, including a cross section of residential and commercial accounts. During its more than thirteen-year operating history, non-member municipalities have monitored MCE’s progress, evaluating the potential opportunity for membership, which would enable customer choice with respect to electric generation service. In response to such inquiries, MCE’s Board adopted Policy 007, which established a formal process and specific criteria for new member additions. In particular, this policy identifies several threshold requirements, including the specification that any prospective member evaluation demonstrate rate-related savings (based on prevailing market prices for requisite energy products at the time of each analysis) as well as environmental benefits (as measured by anticipated reductions in greenhouse gas emissions and increased renewable energy sales to CCA customers) before proceeding with expansion activities, including the filing of related revisions/addenda to this Implementation Plan. As MCE receives new membership requests, staff will follow the prescribed evaluative process of Policy 007 and will present related results at future public meetings. To the extent that membership evaluations demonstrate favorable results and any new community completes the process of joining MCE, this Implementation Plan will be revised through a related addendum, highlighting key impacts and consequences associated with the addition of such new community/communities.
In response to public interest and MCE’s successful operational track record, the City of Hercules requested MCE membership, consistent with MCE Policy 007, and adopted the requisite ordinance for joining MCE. As previously noted, MCE’s Board approved such membership request at a duly noticed public meeting on November 16, 2023 through the adoption of Resolution No. 2023-12.
This Addendum No. 9 describes MCE’s expansion plans to include the City of Hercules. MCE intends to enroll such customers in its CCA Program during the month of April 2025, consistent with the Commission’s requirements described in Resolution E-4907, which define relevant timing for Implementation Plan filing in advance of service commencement. According to the Commission, the Energy Division is required to receive and review a revised MCE implementation plan reflecting changes/consequences of additional members. With this in mind, MCE has reviewed its revised Implementation Plan, which was filed with the Commission on July 18, 2014, as well as previously filed and certified Addendums, and has identified certain information that requires updating to reflect the changes and consequences of adding the City of Hercules as well as other forecast modifications, which reflect the most recent historical electric energy use within MCE’s existing service territory. This Addendum No. 9 reflects pertinent changes that are expected to result from the new member addition as well as updated projections that are considerate of recent operations. This document format, including references to MCE’s AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 5 November 2023 – Addendum No. 9
most recent Implementation Plan revision (filed with the Commission on July 18, 2014 and certified by the Commission on September 15, 2014), which is incorporated by reference and attached hereto as Appendix D, addresses all requirements identified in Public Utilities Code Section 366.2(c)(4), including universal access, reliability, equitable treatment of all customer classes and any requirements established by state law or by the CPUC concerning aggregated service, while streamlining public review of pertinent changes related to MCE’s anticipated expansion.
CHAPTER 2 – CHANGES TO ADDRESS MCE EXPANSION TO THE CITY OF HERCULES As previously noted, this Addendum No. 9 addresses the anticipated impacts of MCE’s planned expansion to the City of Hercules, as well as other forecast modifications reflecting the most recent historical electric energy use within MCE’s existing service territory. As a result of this member addition, certain assumptions regarding MCE’s future operations have changed, including customer energy requirements, peak demand, renewable energy purchases, revenues, expenses and various other items. The following section highlights pertinent changes related to this planned expansion. To the extent that certain details related to membership expansion are not specifically discussed within this Addendum No. 9, MCE represents that such information shall remain unchanged relative to the July 18, 2014 Implementation Plan revision.
With regard to the defined terms Members and Member Agencies, the following Communities are now signatories to the MCE Joint Powers Agreement and represent MCE’s current membership:
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 6 November 2023 – Addendum No. 9
Member Agencies
City of American Canyon
City of Belvedere
City of Benicia
City of Calistoga
City of Concord
County of Contra Costa
Town of Corte Madera
Town of Danville
City of El Cerrito
Town of Fairfax
City of Fairfield
City of Hercules
City of Lafayette
City of Larkspur
County of Marin
City of Martinez
City of Mill Valley
Town of Moraga
City of Napa
County of Napa
City of Novato
City of Oakley
City of Pinole
City of Pittsburg
City of Pleasant Hill
City of Richmond
Town of Ross
Town of San Anselmo
City of Saint Helena
City of San Pablo
City of San Rafael
City of San Ramon
City of Sausalito
County of Solano
Town of Tiburon
City of Vallejo
City of Walnut Creek
Town of Yountville
Throughout this document, use of the terms Members and Member Agencies refer to the aforementioned Communities. To the extent that the discussion herein addresses the process of AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 7 November 2023 – Addendum No. 9
aggregation and MCE organization, each of these communities is now an MCE Member and the electric customers of such jurisdictions have been or will be offered CCA service consistent with the noted phase-in schedule.
Aggregation Process
MCE’s aggregation process was discussed in Chapter 2 of MCE’s July 18, 2014 Revised Implementation Plan. This first paragraph of Chapter 2 is replaced in its entirety with the following verbiage:
As previously noted, MCE successfully launched its CCA Program, MCE, on May 7, 2010 after meeting applicable statutory requirements and in consideration of planning elements described in its initial Implementation Plan. At this point in time, MCE plans to expand agency membership to include the City of Hercules. This community has requested MCE membership, and MCE’s Board of Directors subsequently approved this membership request at a duly noticed public meeting on November 16, 2023
Program Phase-In
Program phase-in was discussed in Chapter 5 of MCE’s July 18, 2014 Revised Implementation Plan. Chapter 5 is replaced in its entirety with the following verbiage:
MCE will continue to phase-in the customers of its CCA Program as communicated in this Implementation Plan. To date, nine complete phases have been successfully implemented. A tenth phase, which will commence in April 2025, will include service commencement to customers located within the City of Hercules, as reflected in the following table.
MCE Phase No. Status & Description of Phase Implementation Date
Phase 1:
8,500 Accounts
Complete: MCE Member (municipal) accounts & a
subset of residential, commercial and/or industrial
accounts, comprising approximately 20 percent of
total customer load within MCE’s original Member
Agencies.
May 7, 2010
Phase 2A:
6,100 Accounts
Complete: Additional commercial and residential
accounts, comprising approximately 20 percent of
total customer load within MCE’s original Member
Agencies (incremental addition to Phase 1).
August 2011
Phase 2B:
79,000 Accounts
Complete: Remaining accounts within Marin County. July 2012 Phase 3:
35,000 Accounts
Complete: Residential, commercial, agricultural, and
street lighting accounts within the City of Richmond.
July 2013
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 8 November 2023 – Addendum No. 9
MCE Phase No. Status & Description of Phase Implementation Date
Phase 4A:
14,000 Accounts
Complete: Residential, commercial, agricultural, and
street lighting accounts within the unincorporated
areas of Napa County, subject to economic and
operational constraints.
February 2015
Phase 4B:
30,000 Accounts
Complete: Residential, commercial, agricultural, and
street lighting accounts within the City of San Pablo,
the City of Benicia and the City of El Cerrito, subject to economic and operational constraints.
May 2015
Phase 5:
83,000 Accounts
Complete: Residential, commercial, agricultural, and
street lighting accounts within the Cities of American
Canyon, Calistoga, Lafayette, Napa, Saint Helena,
Walnut Creek and the Town of Yountville.
September 2016
Phase 6:
216,000 Accounts
Complete: Residential, commercial, agricultural, and
street lighting accounts within Contra Costa County
(unincorporated areas); the cities of Concord,
Martinez, Oakley, Pinole, Pittsburg and San Ramon;
and the towns of Danville and Moraga.
April 2018
Phase 7:
11,000 Accounts
Complete: Residential, commercial, agricultural, and
street lighting accounts within Solano County
(unincorporated areas).
April 2020
Phase 8:
58,000 Accounts
Complete: Residential, commercial, agricultural, and
street lighting accounts within the Cities of Pleasant
Hill and Vallejo
April 2021
Phase 9:
38,000 Accounts
Complete: Residential, commercial, agricultural, and
street lighting accounts within the City of Fairfield
April 2022
Phase 10:
~10,000
Pending Implementation Plan Certification:
Residential, commercial, agricultural, and street
lighting accounts within the City of Hercules
April 2025
(planned,
pending
Implementation
Plan
Certification)
This approach has provided MCE with the ability to start slow, addressing problems and unforeseen challenges associated with a small, manageable CCA program before offering service to successively larger groups of customers. Following completion of Phase 10 customer enrollments, MCE expects to serve a customer base of approximately 595,000 accounts. This approach has also allowed MCE and its energy suppliers to address all system requirements (billing, collections and payments) under a phase-in approach that was designed to minimize potential exposure to uncertainty and financial risk by “walking” (when serving relatively small AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 9 November 2023 – Addendum No. 9
account totals) prior to “running” (when serving much larger account totals). The Board may evaluate other phase-in options based on future market conditions, statutory requirements and regulatory considerations as well as other factors potentially affecting the integration of additional customer accounts.
Sales Forecast
With regard to MCE’s sales forecast, which is addressed in Chapter 6, Load Forecast and Resource Plan, MCE assumes that total annual retail sales will increase to approximately 5,600 GWh following Phase 10 expansion. The following tables have been updated to reflect the impacts of planned expansion to MCE’s new membership.
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 10 November 2023 – Addendum No. 9
Chapter 6, Resource Plan Overview
Chapter 6, Customer Forecast
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 MCE Demand (GWh)
Retail Demand -91 -187 -574 -1,116 -1,265 -1,712 -2,241 -2,901 -4,545 -5,543 -5,749 -5,729 -6,007 -6,158 -6,113 -6,185 -6,266 Distributed Generation 0 2 4 5 9 14 135 121 139 472 565 719 891 980 1,078 1,186 1,304 Energy Efficiency 0 0 0 0 1 3 3 5 7 10 16 19 26 45 60 75 90 EV Demand 0 0 0 0 0 0 -22 -29 -38 -75 -95 -357 -447 -536 -613 -683 -737 Losses and UFE -5 -11 -34 -67 -75 -102 -128 -168 -266 -308 -316 -321 -332 -340 -335 -336 -337 Total Demand -97 -197 -604 -1,177 -1,330 -1,797 -2,253 -2,973 -4,703 -5,444 -5,578 -5,669 -5,869 -6,009 -5,924 -5,943 -5,945 MCE Supply (GWh)
Renewable Resources
Generation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Power Purchase Contracts 23 50 291 566 652 927 1,165 1,631 2,582 3,148 3,234 3,284 3,409 3,602 3,737 3,985 4,220 Total Renewable Resources 23 50 291 566 652 927 1,165 1,631 2,582 3,148 3,234 3,284 3,409 3,602 3,737 3,985 4,220 Conventional/Hydro Resources
Generation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Power Purchase Contracts 74 147 314 611 678 870 1,088 1,342 2,121 2,296 2,344 2,385 2,460 2,407 2,186 1,958 1,725 Total Conventional/Hydro Resources 74 147 314 611 678 870 1,088 1,342 2,121 2,296 2,344 2,385 2,460 2,407 2,186 1,958 1,725 Total Supply 97 197 604 1,177 1,330 1,797 2,253 2,973 4,703 5,444 5,578 5,669 5,869 6,009 5,924 5,943 5,945 Energy Open Position (GWh) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2010 to 2026
(GWH)
Proposed Resource Plan
Marin Clean Energy
May-10 Aug-11 Jul-12 Jul-13 Feb-15 May-15 Sep-16 Apr-18 Apr-20 Apr-21 Apr-22 Apr-25 MCE Customers
Residential 7,354 12,503 77,345 106,510 120,204 145,874 225,128 421,325 430,493 485,540 522,629 537,793 Commercial & Industrial 579 1,114 9,913 13,098 15,316 17,884 27,274 44,708 46,226 50,627 54,085 54,607 Street Lighting & Traffic 138 141 443 748 1,014 1,156 1,866 3,670 3,973 4,470 4,741 5,268 Ag & Pumping - <15 113 109 1,467 1,467 1,700 2,051 3,274 3,292 3,314 3,249 Total 8,071 13,759 87,814 120,465 138,001 166,381 255,968 471,754 483,966 543,929 584,769 600,917 Enrolled Retail Service Accounts
Phase-In Period (End of Month)
Marin Clean Energy
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 MCE Customers
Residential 7,354 12,503 77,345 106,510 106,510 145,874 225,128 226,254 421,325 423,432 430,493 485,540 522,629 524,010 526,630 537,793 540,482 Commercial & Industrial 579 1,114 9,913 13,098 13,098 17,884 27,274 27,410 44,708 44,932 46,226 50,627 54,085 53,659 53,927 54,607 54,880 Street Lighting & Traffic 138 141 443 748 748 1,156 1,866 1,875 3,670 3,688 3,973 4,470 4,741 5,103 5,129 5,268 5,294 Ag & Pumping - <15 113 109 109 1,467 1,700 1,709 2,051 2,061 3,274 3,292 3,314 3,217 3,233 3,249 3,265 Total 8,071 13,759 87,814 120,465 120,465 166,381 255,968 257,248 471,754 474,113 483,966 543,929 584,769 585,989 588,919 600,918 603,922 2010 to 2026
Retail Service Accounts (End of Year)
Marin Clean Energy
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 11 November 2023 – Addendum No. 9
Chapter 6, Sales Forecast
Chapter 6, Capacity Requirements
Chapter 6, Renewables Portfolio Standards Energy Requirements
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 MCE Energy Requirements (GWh)
Retail Demand 91 187 574 1,116 1,265 1,712 2,241 2,901 4,545 5,543 5,749 5,729 6,007 6,158 6,113 6,185 6,266 Distributed Generation 0 -2 -4 -5 -9 -14 -135 -121 -139 -472 -565 -719 -891 -980 -1,078 -1,186 -1,304 Energy Efficiency 0 0 0 0 -1 -3 -3 -5 -7 -10 -16 -19 -26 -45 -60 -75 -90 EV Demand 0 0 0 0 0 0 22 29 38 75 95 357 447 536 613 683 737 Losses and UFE 5 11 34 67 75 102 128 168 266 308 316 321 332 340 335 336 337 Total Load Requirement 97 197 604 1,177 1,330 1,797 2,253 2,973 4,703 5,444 5,578 5,669 5,869 6,009 5,924 5,943 5,945 2010 to 2026
(GWH)
Energy Requirements
Marin Clean Energy
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Demand (MW)
Retail Demand 28 46 182 233 234 318 441 682 1,068 1,293 1,445 1,564 1,725 1,746 1,800 1,859 1,925 Distributed Generation - (1) (2) (3) (5) (8) (77) (81) (94) (337) (394) (483) (598) (658) (724) (796) (876) Energy Efficiency - - - - - - (1) (1) (2) (2) (16) (47) (47) (47) (47) (47) (47) EV Load - - - - - - 10 13 18 34 43 92 115 138 158 176 190 Losses and UFE 2 3 11 14 14 19 22 37 59 59 65 68 72 71 71 72 72 Total Net Peak Demand 30 47 191 244 243 328 396 650 1,050 1,048 1,143 1,194 1,267 1,250 1,259 1,263 1,264 Reserve Requirement (%) 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 16% 17% 17% 17% Capacity Reserve Requirement 4 7 29 37 36 49 59 97 157 157 171 179 190 200 214 215 215 Capacity Requirement Including Reserve 34 55 220 281 279 378 455 747 1,207 1,205 1,314 1,373 1,457 1,450 1,473 1,478 1,478 2010 to 2026
(MW)
Capacity Requirements
Marin Clean Energy
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 91,219 185,493 570,144 1,110,487 1,254,794 1,695,274 2,125,091 2,804,277 4,436,963 5,136,159 5,262,209 5,347,756 5,537,211 5,668,782 5,588,339 5,607,000 5,608,858 20% 20% 20% 20% 22% 23% 25% 27% 29% 31% 33% 36% 39% 41% 44% 47% 49% 18,244 37,099 114,029 222,097 272,290 394,999 531,273 757,155 1,286,719 1,592,209 1,736,529 1,914,497 2,131,826 2,341,207 2,458,869 2,618,469 2,765,167 RPS Procurement Quantity
Requirement (%)
Gross RPS Procurement
Quantity Requirement (MWh)
Total Retail Sales (MWh)
2010 to 2026
(MWH)
RPS Requirements
Marin Clean Energy
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 12 November 2023 – Addendum No. 9
Chapter 6, Energy Efficiency
Chapter 6, Distributed Generation
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 91,219 185,493 570,144 1,110,487 1,254,794 1,695,274 2,125,091 2,804,277 4,436,963 5,136,159 5,262,209 5,347,756 5,537,211 5,668,782 5,588,339 5,607,000 5,608,858 18,244 37,099 114,029 222,097 272,290 394,999 531,273 757,155 1,286,719 1,592,209 1,736,529 1,914,497 2,131,826 2,341,207 2,458,869 2,618,469 2,765,167 - - - - - - - - - - - 1,244,423 1,385,687 1,521,784 4,057,134 6,938,943 10,092,860 24,543 51,525 166,522 364,363 646,619 866,365 1,160,620 1,671,167 2,756,266 3,168,446 3,233,866 3,284,063 3,409,133 3,601,660 3,737,378 3,985,212 4,220,323 27% 28% 29% 33% 52% 51% 55% 60% 62% 62% 61% 61% 62% 64% 67% 71% 75% 6,299 14,426 52,493 142,266 374,329 471,366 629,347 914,012 1,469,547 1,576,237 1,497,337 1,369,566 1,277,306 1,260,453 1,278,509 1,366,743 1,455,156 24,543 26,982 114,997 197,841 282,256 219,746 294,255 510,547 1,085,099 412,180 65,420 50,197 125,069 192,527 135,718 247,834 235,112 Total Retail Sales (MWh)
Gross RPS Procurement
Quantity Requirement
65% L/T Requirement
(2021 Forward)
Program Renewable
Target (MWh)
Program Target
(% of Retail Sales)
Voluntary Margin of
Overprocurement (MWh)
Annual Increase (MWh)
2010 to 2026
(MWH)
RPS Requirements and Program Renewable Energy Targets
Marin Clean Energy
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 MCE Retail Demand 91 187 574 1,116 1,265 1,712 2,241 2,901 4,545 5,543 5,749 5,729 6,007 6,158 6,113 6,185 6,266 MCE Energy Efficiency Goal 0 0 0 0 -1 -3 -3 -5 -7 -10 -16 -19 -26 -45 -60 -75 -90 2010 to 2026
(GWH)
Energy Efficiency Savings Goals
Marin Clean Energy
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 DG Capacity - 1 2 3 5 8 77 81 94 337 394 483 598 658 724 796 876 2010 to 2026
(MW)
Distributed Generation Projections
Marin Clean Energy
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 13 November 2023 – Addendum No. 9
Financial Plan
With regard to MCE’s financial plan, which is addressed in Chapter 7, Financial Plan, MCE has updated its expected operating results, which now include projected impacts related to service expansion within the City of Hercules. The following table reflects updated operating projections in consideration of this planned expansion.
Chapter 7, CCA Program Operating Results
CATEGORY 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 I. REVENUES FROM OPERATIONS ($)
ELECTRIC SALES REVENUE 10,610,804 16,454,790 44,052,111 78,782,938 96,577,968 134,474,212 165,289,480 212,418,679 329,232,524 379,396,284 459,417,279 461,045,535 576,803,370 766,613,247 820,082,624 833,976,835 869,810,588 LESS UNCOLLECTIBLE ACCOUNTS (29,176) (140,371) (299,942) (540,077) (662,078) (921,934) (1,126,363) (1,442,225) (2,351,872) (2,642,638) (6,578,102) (6,165,288) (15,847,699) (21,545,823) (16,922,434) (17,206,925) (17,938,543) TOTAL REVENUES 10,581,628 16,314,419 43,752,169 78,242,861 95,915,890 133,552,278 164,163,116 210,976,455 326,880,652 376,753,646 452,839,177 454,880,247 560,955,671 745,067,424 803,160,190 816,769,910 851,872,045 II. COST OF OPERATIONS ($)
(A) ADMINISTRATIVE AND GENERAL (A&G)
STAFFING 321,117 430,659 1,077,759 1,386,303 1,825,000 2,710,500 4,728,650 6,151,600 6,920,156 7,571,804 10,918,118 12,643,711 14,826,470 16,597,853 13,917,602 14,335,130 14,765,184 CONTRACT SERVICES 1,035,333 848,063 3,131,840 4,457,964 4,572,751 4,838,757 6,326,457 7,370,528 9,017,602 9,244,578 11,040,677 15,404,604 10,544,475 11,273,052 17,106,672 17,535,437 17,860,044 IOU FEES (INCLUDING BILLING) 19,548 60,794 287,618 584,729 660,114 877,953 1,124,270 1,261,350 1,775,059 1,873,962 2,080,744 2,246,449 2,279,677 2,562,100 2,787,124 2,920,852 3,023,045 OTHER A&G 191,261 189,204 249,729 302,806 373,125 610,500 791,750 1,284,784 1,398,107 2,057,959 3,466,146 3,735,212 2,795,821 3,133,908 2,325,747 2,395,520 2,467,385 SUBTOTAL A&G 1,567,259 1,528,720 4,746,946 6,731,802 7,430,990 9,037,711 12,971,126 16,068,262 19,110,924 20,748,303 27,505,685 34,029,976 30,446,443 33,566,913 36,137,146 37,186,939 38,115,659 (B) COST OF ENERGY 7,418,662 11,881,494 35,805,704 68,624,319 84,358,061 118,264,445 144,457,641 190,345,081 264,842,182 297,178,130 382,216,527 420,577,364 542,017,581 552,282,880 691,035,929 743,125,503 773,930,119 (C) DEBT SERVICE 654,595 394,777 747,729 1,195,162 1,195,162 2,451,457 458,000 228,875 21,945 82,833 198,766 178,989 183,332 197,063 220,000 220,000 220,000 TOTAL COST OF OPERATION 9,640,516 13,804,991 41,300,380 76,551,283 92,984,212 129,753,613 157,886,767 206,642,218 283,975,051 318,009,266 409,920,978 454,786,329 572,647,356 586,046,856 727,393,075 780,532,441 812,265,778 CCA PROGRAM SURPLUS/(DEFICIT) 941,112 2,509,428 2,451,789 1,691,578 2,931,677 3,798,665 6,276,350 4,334,236 42,905,601 58,744,380 42,918,199 93,918 (11,691,685) 159,020,568 75,767,115 36,237,469 39,606,267 (January 2010 through December 2026)
Summary of CCA Program Phase-In
Marin Clean Energy
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 14 November 2023 – Addendum No. 9
Expansion Addendum Appendices
Appendix A: Marin Clean Energy Resolution 2023-12
Appendix B: Joint Powers Agreement
Appendix C: City of Hercules Ordinance
Appendix D: Marin Clean Energy Revised Implementation Plan and Statement of Intent (July 18, 2014) [to be added for submission]
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent Appendix A: Marin Clean Energy Resolution 2023-12
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent RESOLUTION NO. 2023-12
A RESOLUTION OF THE BOARD OF DIRECTORS OF MCE APPROVING THE CITY
OF HERCULES AS A MEMBER OF MCE
WHEREAS, on September 24, 2002, the Governor signed into law Assembly Bill 117 (Stat. 2002, Ch. 838; see California Public Utilities Code section 366.2; hereinafter referred to as the “Act”), which authorizes any California city or county, whose governing body so elects, to combine the electricity load of its residents and businesses in a community-wide electricity aggregation program known as Community Choice Aggregation (“CCA”); and,
WHEREAS, the Act expressly authorizes participation in a CCA program through a joint powers agency, and on December 19, 2008, Marin Clean Energy (“MCE”), (formerly the Marin Energy Authority) was established as a joint power authority pursuant to a Joint Powers Agreement, as amended from time to time (“MCE Joint Powers Agreement”); and,
WHEREAS, on February 2, 2010, the California Public Utilities Commission certified the “Implementation Plan” of MCE, confirming MCE’s compliance with the requirements of the Act; and,
WHEREAS, MCE members include the following communities: the County of Contra Costa, the County of Marin, the County of Napa, the County of Solano, the City of American Canyon, the City of Belvedere, the City of Benicia, the City of Calistoga, the City of Concord, the Town of Corte Madera, the Town of Danville, the City of El Cerrito, the City of Fairfield, the Town of Fairfax, the City of Lafayette, the City of Larkspur, the City of Martinez, the City of Mill Valley, the City of Moraga, the City of Napa, the City of Novato, the City of Oakley, the City of Pinole, the City of Pittsburg, the City of Pleasant Hill, the City of Richmond, the Town of Ross, the Town of San Anselmo, the City of San Pablo, the City of San Rafael, the City of San Ramon, the City of Sausalito, the City of St.
Helena, the Town of Tiburon, the City of Vallejo, the City of Walnut Creek, and the Town of Yountville; and
WHEREAS, requested membership in MCE was made by the City of Hercules, June 13, 2023; and,
WHEREAS, the ordinance approving membership in MCE was approved by the City of Hercules; and,
WHEREAS, the applicant analysis for the City of Hercules was completed in October 2023, and yielded a potentially positive result; NOW, THEREFORE, BE IT RESOLVED AND ORDERED, by the Board of Directors of MCE that the City of Hercules is approved as a member of MCE.
PASSED AND ADOPTED at a regular meeting of the MCE Board of Directors on the sixteenth day of November 2023 by the following vote:
DocuSign Envelope ID: 7ED8BC4A-A187-4CEC-AFD4-CDFEF474CD7C AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent
AYES NOES ABSTAIN ABSENT
County of Marin X
Contra Costa County X
County of Napa X
County of Solano X
City of American Canyon X
City of Belvedere X
City of Benicia X
City of Calistoga X
City of Concord X
Town of Corte Madera X
Town of Danville X
City of El Cerrito X
Town of Fairfax X
City of Fairfield X
City of Lafayette X
City of Larkspur X
City of Martinez X
City of Mill Valley X
Town of Moraga X
City of Napa X
City of Novato X
City of Oakley X
City of Pinole X
City of Pittsburg X
City of Pleasant Hill X
City of San Ramon X
City of Richmond X
Town of Ross X
Town of San Anselmo X
City of San Pablo X
City of San Rafael X
City of Sausalito X
City of St. Helena X
Town of Tiburon X
DocuSign Envelope ID: 7ED8BC4A-A187-4CEC-AFD4-CDFEF474CD7C AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent City of Vallejo X
City of Walnut Creek X
Town of Yountville X
________________________________________
SHANELLE SCALES-PRESTON, CHAIR
ATTEST:
____________________________________________
DAWN WEISZ, SECRETARY
DocuSign Envelope ID: 7ED8BC4A-A187-4CEC-AFD4-CDFEF474CD7C AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent Appendix B: Joint Powers Agreement
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent Marin Energy Authority
- Joint Powers Agreement -
Effective December 19, 2008
As amended by Amendment No. 1 dated December 3, 2009
As further amended by Amendment No. 2 dated March 4, 2010 As further amended by Amendment No. 3 dated May 6, 2010 As further amended by Amendment No. 4 dated December 1, 2011 As further amended by Amendment No. 5 dated July 5, 2012 As further amended by Amendment No. 6 dated September 5, 2013 As further amended by Amendment No. 7 dated December 5, 2013 As further amended by Amendment No. 8 dated September 4, 2014 As further amended by Amendment No. 9 dated December 4, 2014 As further amended by Amendment No. 10 dated April 21, 2016 As further amended by Amendment No. 11 dated May 19, 2016
As further amended by Amendment No. 12 dated July 20, 2017 As further amended by Amendment No. 13 dated October 18, 2018 As further amended by Amendment No. 14 dated November 21, 2019 As further amended by Amendment No. 15 dated November 19, 2020 As further amended by Amendment No. 16 dated November 16, 2023 Among the Following Parties:
City of American Canyon
City of Belvedere
City of Benicia
City of Calistoga
City of Concord
Town of Corte Madera
Town of Danville
City of El Cerrito
Town of Fairfax
City of Fairfield
City of Hercules
City of Lafayette
City of Larkspur
City of Martinez
Town of Moraga
City of Mill Valley
City of Napa
City of Novato
City of Oakley
City of Pinole
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent City of Pittsburg
City of Pleasant Hill
City of Richmond
Town of Ross
Town of San Anselmo
City of San Pablo
City of San Rafael
City of San Ramon
City of Sausalito
City of St. Helena
Town of Tiburon
City of Vallejo
City of Walnut Creek
Town of Yountville
County of Contra Costa
County of Marin
County of Napa
County of Solano
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent
MARIN ENERGY AUTHORITY
JOINT POWERS AGREEMENT
This Joint Powers Agreement (“Agreement”), effective as of December 19, 2008, is made and entered into pursuant to the provisions of Title 1, Division 7, Chapter 5, Article 1 (Section 6500 et seq.) of the California Government Code relating to the joint exercise of powers among the parties set forth in Exhibit B (“Parties”). The term “Parties” shall also include an incorporated municipality or county added to this Agreement in accordance with Section 3.1.
RECITALS
1. The Parties are either incorporated municipalities or counties sharing various powers under California law, including but not limited to the power to purchase, supply, and aggregate electricity for themselves and their inhabitants.
2. In 2006, the State Legislature adopted AB 32, the Global Warming Solutions Act, which mandates a reduction in greenhouse gas emissions in 2020 to 1990 levels.
The California Air Resources Board is promulgating regulations to implement AB 32 which will require local government to develop programs to reduce greenhouse emissions.
3. The purposes for the Initial Participants (as such term is defined in Section 2.2 below) entering into this Agreement include addressing climate change by reducing energy related greenhouse gas emissions and securing energy supply and price stability, energy efficiencies and local economic benefits. It is the intent of this Agreement to promote the development and use of a wide range of renewable energy sources and energy efficiency programs, including but not limited to solar and wind energy production.
4. The Parties desire to establish a separate public agency, known as the Marin Energy Authority (“Authority”), under the provisions of the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.) (“Act”) in order to collectively study, promote, develop, conduct, operate, and manage energy programs.
5. The Initial Participants have each adopted an ordinance electing to implement through the Authority Community Choice Aggregation, an electric service enterprise agency available to cities and counties pursuant to California Public Utilities Code Section 366.2 (“CCA Program”). The first priority of the Authority will be the consideration of those actions necessary to implement the CCA Program. Regardless of whether or not Program Agreement 1 is approved and the CCA Program becomes operational, the parties intend for the Authority to continue to study, promote, develop, conduct, operate and manage other energy programs.
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions hereinafter set forth, it is agreed by and among the Parties as follows:
ARTICLE 1
CONTRACT DOCUMENTS
1.1 Definitions. Capitalized terms used in the Agreement shall have the meanings specified in Exhibit A, unless the context requires otherwise.
1.2 Documents Included. This Agreement consists of this document and the following exhibits, all of which are hereby incorporated into this Agreement.
Exhibit A: Definitions
Exhibit B: List of the Parties
Exhibit C: Annual Energy Use
Exhibit D: Voting Shares
1.3 Revision of Exhibits. The Parties agree that Exhibits B, C and D to this Agreement describe certain administrative matters that may be revised upon the approval of the Board, without such revision constituting an amendment to this Agreement, as described in Section 8.4. The Authority shall provide written notice to the Parties of the revision of any such exhibit.
ARTICLE 2
FORMATION OF MARIN ENERGY AUTHORITY
2.1 Effective Date and Term. This Agreement shall become effective and Marin Energy Authority shall exist as a separate public agency on the date this Agreement is executed by at least two Initial Participants after the adoption of the ordinances required by Public Utilities Code Section 366.2(c)(10). The Authority shall provide notice to the Parties of the Effective Date. The Authority shall continue to exist, and this Agreement shall be effective, until this Agreement is terminated in accordance with Section 7.4, subject to the rights of the Parties to withdraw from the Authority.
2.2 Initial Participants. During the first 180 days after the Effective Date, all other Initial Participants may become a Party by executing this Agreement and delivering an executed copy of this Agreement and a copy of the adopted ordinance required by Public Utilities Code Section 366.2(c)(10) to the Authority.
Additional conditions, described in Section 3.1, may apply (i) to either an incorporated municipality or county desiring to become a Party and is not an Initial Participant and (ii) to Initial Participants that have not executed and delivered this Agreement within the time period described above.
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent
2.3 Formation. There is formed as of the Effective Date a public agency named the Marin Energy Authority. Pursuant to Sections 6506 and 6507 of the Act, the Authority is a public agency separate from the Parties. The debts, liabilities or obligations of the Authority shall not be debts, liabilities or obligations of the individual Parties unless the governing board of a Party agrees in writing to assume any of the debts, liabilities or obligations of the Authority. A Party who has not agreed to assume an Authority debt, liability or obligation shall not be responsible in any way for such debt, liability or obligation even if a majority of the Parties agree to assume the debt, liability or obligation of the Authority.
Notwithstanding Section 8.4 of this Agreement, this Section 2.3 may not be amended unless such amendment is approved by the governing board of each Party.
2.4 Purpose. The purpose of this Agreement is to establish an independent public agency in order to exercise powers common to each Party to study, promote, develop, conduct, operate, and manage energy and energy-related climate change programs, and to exercise all other powers necessary and incidental to accomplishing this purpose. Without limiting the generality of the foregoing, the Parties intend for this Agreement to be used as a contractual mechanism by which the Parties are authorized to participate as a group in the CCA Program, as further described in Section 5.1. The Parties intend that subsequent agreements shall define the terms and conditions associated with the actual implementation of the CCA Program and any other energy programs approved by the Authority.
2.5 Powers. The Authority shall have all powers common to the Parties and such additional powers accorded to it by law. The Authority is authorized, in its own name, to exercise all powers and do all acts necessary and proper to carry out the provisions of this Agreement and fulfill its purposes, including, but not limited to, each of the following:
2.5.1 make and enter into contracts;
2.5.2 employ agents and employees, including but not limited to an Executive Director;
2.5.3 acquire, contract, manage, maintain, and operate any buildings, works or improvements;
2.5.4 acquire by eminent domain, or otherwise, except as limited under Section 6508 of the Act, and to hold or dispose of any property;
2.5.5 lease any property;
2.5.6 sue and be sued in its own name;
2.5.7 incur debts, liabilities, and obligations, including but not limited to loans from private lending sources pursuant to its temporary borrowing powers such as Government Code Section 53850 et seq. and authority under the Act;
2.5.8 issue revenue bonds and other forms of indebtedness;
2.5.9 apply for, accept, and receive all licenses, permits, grants, loans or other aids from any federal, state or local public agency;
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent
2.5.10 submit documentation and notices, register, and comply with orders, tariffs and agreements for the establishment and implementation of the CCA Program and other energy programs;
2.5.11 adopt rules, regulations, policies, bylaws and procedures governing the operation of the Authority (“Operating Rules and Regulations”); and
2.5.12 make and enter into service agreements relating to the provision of services necessary to plan, implement, operate and administer the CCA Program and other energy programs, including the acquisition of electric power supply and the provision of retail and regulatory support services.
2.6 Limitation on Powers. As required by Government Code Section 6509, the power of the Authority is subject to the restrictions upon the manner of exercising power possessed by the County of Marin.
2.7 Compliance with Local Zoning and Building Laws. Notwithstanding any other provisions of this Agreement or state law, any facilities, buildings or structures located, constructed or caused to be constructed by the Authority within the territory of the Authority shall comply with the General Plan, zoning and building laws of the local jurisdiction within which the facilities, buildings or structures are constructed.
ARTICLE 3
AUTHORITY PARTICIPATION
3.1 Addition of Parties. Subject to Section 2.2, relating to certain rights of Initial Participants, other incorporated municipalities and counties may become Parties upon (a) the adoption of a resolution by the governing body of such incorporated municipality or such county requesting that the incorporated municipality or county, as the case may be, become a member of the Authority, (b) the adoption, by an affirmative vote of the Board satisfying the requirements described in Section 4.9.1, of a resolution authorizing membership of the additional incorporated municipality or county, specifying the membership payment, if any, to be made by the additional incorporated municipality or county to reflect its pro rata share of organizational, planning and other pre-existing expenditures, and describing additional conditions, if any, associated with membership, (c) the adoption of an ordinance required by Public Utilities Code Section 366.2(c)(10) and execution of this Agreement and other necessary program agreements by the incorporated municipality or county, (d) payment of the membership payment, if any, and (e) satisfaction of any conditions established by the Board.
Notwithstanding the foregoing, in the event the Authority decides to not implement a CCA Program, the requirement that an additional party adopt the ordinance required by Public Utilities Code Section 366.2(c)(10) shall not apply.
Under such circumstance, the Board resolution authorizing membership of an additional incorporated municipality or county shall be adopted in accordance with the voting requirements of Section 4.10.
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent
3.2 Continuing Participation. The Parties acknowledge that membership in the Authority may change by the addition and/or withdrawal or termination of Parties.
The Parties agree to participate with such other Parties as may later be added, as described in Section 3.1. The Parties also agree that the withdrawal or termination of a Party shall not affect this Agreement or the remaining Parties’ continuing obligations under this Agreement.
ARTICLE 4
GOVERNANCE AND INTERNAL ORGANIZATION
4.1 Board of Directors. The governing body of the Authority shall be a Board of Directors (“Board”) consisting of one director for each Party appointed in accordance with Section 4.2.
4.2 Appointment and Removal of Directors. The Directors shall be appointed and may be removed as follows:
4.2.1 The governing body of each Party shall appoint and designate in writing one regular Director who shall be authorized to act for and on behalf of the Party on matters within the powers of the Authority. The governing body of each Party also shall appoint and designate in writing one alternate Director who may vote on matters when the regular Director is absent from a Board meeting. The person appointed and designated as the Director or the alternate Director shall be a member of the governing body of the Party. As an alternative to appointing its own Director and alternate Director, the governing body of any Party may elect to designate another Party within the same county (the “designated Party”) to represent it on the Board with the Director and alternate Director from the designated Party (the “consolidated Parties”). Notwithstanding any provision in this Agreement to the contrary, in the case of such an election by one or more Parties in the same county, the designated Party shall have the combined votes and voting shares of the consolidated Parties and shall vote on behalf of the consolidated Parties. The governing body of a Party may revoke its designation of another Party to vote on its behalf at any time. Neither an election by a Party to designate another Party to vote on its behalf or a revocation of this election shall be effective unless provided in a written notice to the Authority.
4.2.2 The Operating Rules and Regulations, to be developed and approved by the Board in accordance with Section 2.5.11, shall specify the reasons for and process associated with the removal of an individual Director for cause. Notwithstanding the foregoing, no Party shall be deprived of its right to seat a Director on the Board and any such Party for which its AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent Director and/or alternate Director has been removed may appoint a replacement.
4.3 Terms of Office. Each Director shall serve at the pleasure of the governing body of the Party that the Director represents, and may be removed as Director by such governing body at any time. If at any time a vacancy occurs on the Board, a replacement shall be appointed to fill the position of the previous Director in accordance with the provisions of Section 4.2 within 90 days of the date that such position becomes vacant.
4.4 Quorum. A majority of the Directors shall constitute a quorum, except that less than a quorum may adjourn from time to time in accordance with law.
4.5 Powers and Function of the Board. The Board shall conduct or authorize to be conducted all business and activities of the Authority, consistent with this Agreement, the Authority Documents, the Operating Rules and Regulations, and applicable law.
4.6 Executive Committee. The Board may establish an executive committee consisting of a smaller number of Directors. The Board may delegate to the executive committee such authority as the Board might otherwise exercise, subject to limitations placed on the Board’s authority to delegate certain essential functions, as described in the Operating Rules and Regulations. The Board may not delegate to the Executive Committee or any other committee its authority under Section 2.5.11 to adopt and amend the Operating Rules and Regulations.
4.7 Commissions, Boards and Committees. The Board may establish any advisory commissions, boards and committees as the Board deems appropriate to assist the Board in carrying out its functions and implementing the CCA Program, other energy programs and the provisions of this Agreement.
4.8 Director Compensation. Compensation for work performed by Directors on behalf of the Authority shall be borne by the Party that appointed the Director.
The Board, however, may adopt by resolution a policy relating to the reimbursement of expenses incurred by Directors.
4.9 Board Voting Related to the CCA Program.
4.9.1. To be effective, on all matters specifically related to the CCA Program, a vote of the Board shall consist of the following: (1) a majority of all Directors shall vote in the affirmative or such higher voting percentage expressly set forth in Sections 7.2 and 8.4 (the “percentage vote”) and (2) the corresponding voting shares (as described in Section 4.9.2 and Exhibit D) of all such Directors voting in the affirmative shall exceed 50%, or such other higher voting shares percentage expressly set forth in Sections
7.2 and 8.4 (the “percentage voting shares”), provided that, in instances in which such other higher voting share percentage would result in any one AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent Director having a voting share that equals or exceeds that which is necessary to disapprove the matter being voted on by the Board, at least one other Director shall be required to vote in the negative in order to disapprove such matter.
4.9.2. Unless otherwise stated herein, voting shares of the Directors shall be determined by combining the following: (1) an equal voting share for each Director determined in accordance with the formula detailed in Section
4.9.2.1, below; and (2) an additional voting share determined in accordance with the formula detailed in Section 4.9.2.2, below.
4.9.2.1 Pro Rata Voting Share. Each Director shall have an equal voting share as determined by the following formula: (1/total number of Directors) multiplied by 50, and
4.9.2.2 Annual Energy Use Voting Share. Each Director shall have an additional voting share as determined by the following formula:
(Annual Energy Use/Total Annual Energy) multiplied by 50, where (a) “Annual Energy Use” means, (i) with respect to the first 5 years following the Effective Date, the annual electricity usage, expressed in kilowatt hours (“kWhs”), within the Party’s respective jurisdiction and (ii) with respect to the period after the fifth anniversary of the Effective Date, the annual electricity usage, expressed in kWhs, of accounts within a Party’s respective jurisdiction, and any additional jurisdictions which they represent, that are served by the Authority and (b) “Total Annual Energy” means the sum of all Parties’ Annual Energy Use. The initial values for Annual Energy use are designated in Exhibit C, and shall be adjusted annually as soon as reasonably practicable after January 1, but no later than March 1 of each year
4.9.2.3 The voting shares are set forth in Exhibit D. Exhibit D may be updated to reflect revised annual energy use amounts and any changes in the parties to the Agreement without amending the Agreement provided that the Board is provided a copy of the updated Exhibit D.
4.10 Board Voting on General Administrative Matters and Programs Not Involving CCA. Except as otherwise provided by this Agreement or the Operating Rules and Regulations, each member shall have one vote on general administrative matters, including but not limited to the adoption and amendment of the Operating Rules and Regulations, and energy programs not involving CCA.
Action on these items shall be determined by a majority vote of the quorum present and voting on the item or such higher voting percentage expressly set forth in Sections 7.2 and 8.4.
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent
4.11 Board Voting on CCA Programs Not Involving CCA That Require Financial Contributions. The approval of any program or other activity not involving CCA that requires financial contributions by individual Parties shall be approved only by a majority vote of the full membership of the Board subject to the right of any Party who votes against the program or activity to opt-out of such program or activity pursuant to this section. The Board shall provide at least 45 days prior written notice to each Party before it considers the program or activity for adoption at a Board meeting. Such notice shall be provided to the governing body and the chief administrative officer, city manager or town manager of each Party.
The Board also shall provide written notice of such program or activity adoption to the above-described officials of each Party within 5 days after the Board adopts the program or activity. Any Party voting against the approval of a program or other activity of the Authority requiring financial contributions by individual Parties may elect to opt-out of participation in such program or activity by providing written notice of this election to the Board within 30 days after the program or activity is approved by the Board. Upon timely exercising its opt-out election, a Party shall not have any financial obligation or any liability whatsoever for the conduct or operation of such program or activity.
4.12 Meetings and Special Meetings of the Board. The Board shall hold at least four regular meetings per year, but the Board may provide for the holding of regular meetings at more frequent intervals. The date, hour and place of each regular meeting shall be fixed by resolution or ordinance of the Board. Regular meetings may be adjourned to another meeting time. Special meetings of the Board may be called in accordance with the provisions of California Government Code Section 54956. Directors may participate in meetings telephonically, with full voting rights, only to the extent permitted by law. All meetings of the Board shall be conducted in accordance with the provisions of the Ralph M. Brown Act (California Government Code Section 54950 et seq.).
4.13 Selection of Board Officers.
4.13.1 Chair and Vice Chair. The Directors shall select, from among themselves, a Chair, who shall be the presiding officer of all Board meetings, and a Vice Chair, who shall serve in the absence of the Chair.
The term of office of the Chair and Vice Chair shall continue for one year, but there shall be no limit on the number of terms held by either the Chair or Vice Chair. The office of either the Chair or Vice Chair shall be declared vacant and a new selection shall be made if: (a) the person serving dies, resigns, or the Party that the person represents removes the person as its representative on the Board or (b) the Party that he or she represents withdraws form the Authority pursuant to the provisions of this Agreement.
4.13.2 Secretary. The Board shall appoint a Secretary, who need not be a member of the Board, who shall be responsible for keeping the minutes of AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent all meetings of the Board and all other official records of the Authority.
4.13.3 Treasurer and Auditor. The Board shall appoint a qualified person to act as the Treasurer and a qualified person to act as the Auditor, neither of whom needs to be a member of the Board. If the Board so designates, and in accordance with the provisions of applicable law, a qualified person may hold both the office of Treasurer and the office of Auditor of the Authority. Unless otherwise exempted from such requirement, the Authority shall cause an independent audit to be made by a certified public accountant, or public accountant, in compliance with Section 6505 of the Act. The Treasurer shall act as the depositary of the Authority and have custody of all the money of the Authority, from whatever source, and as such, shall have all of the duties and responsibilities specified in Section 6505.5 of the Act. The Board may require the Treasurer and/or Auditor to file with the Authority an official bond in an amount to be fixed by the Board, and if so requested the Authority shall pay the cost of premiums associated with the bond. The Treasurer shall report directly to the Board and shall comply with the requirements of treasurers of incorporated municipalities. The Board may transfer the responsibilities of Treasurer to any person or entity as the law may provide at the time. The duties and obligations of the Treasurer are further specified in Article 6.
4.14 Administrative Services Provider. The Board may appoint one or more administrative services providers to serve as the Authority’s agent for planning, implementing, operating and administering the CCA Program, and any other program approved by the Board, in accordance with the provisions of a written agreement between the Authority and the appointed administrative services provider or providers that will be known as an Administrative Services Agreement. The Administrative Services Agreement shall set forth the terms and conditions by which the appointed administrative services provider shall perform or cause to be performed all tasks necessary for planning, implementing, operating and administering the CCA Program and other approved programs. The Administrative Services Agreement shall set forth the term of the Agreement and the circumstances under which the Administrative Services Agreement may be terminated by the Authority. This section shall not in any way be construed to limit the discretion of the Authority to hire its own employees to administer the CCA Program or any other program.
ARTICLE 5
IMPLEMENTATION ACTION AND AUTHORITY DOCUMENTS
5.1 Preliminary Implementation of the CCA Program.
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent
5.1.1 Enabling Ordinance. Except as otherwise provided by Section 3.1, prior to the execution of this Agreement, each Party shall adopt an ordinance in accordance with Public Utilities Code Section 366.2(c)(10) for the purpose of specifying that the Party intends to implement a CCA Program by and through its participation in the Authority.
5.1.2 Implementation Plan. The Authority shall cause to be prepared an Implementation Plan meeting the requirements of Public Utilities Code Section 366.2 and any applicable Public Utilities Commission regulations as soon after the Effective Date as reasonably practicable. The Implementation Plan shall not be filed with the Public Utilities Commission until it is approved by the Board in the manner provided by Section 4.9.
5.1.3 Effect of Vote On Required Implementation Action. In the event that two or more Parties vote to approve Program Agreement 1 or any earlier action required for the implementation of the CCA Program (“Required Implementation Action”), but such vote is insufficient to approve the Required Implementation Action under Section 4.9, the following will occur:
5.1.3.1 The Parties voting against the Required Implementation Action shall no longer be a Party to this Agreement and this Agreement shall be terminated, without further notice, with respect to each of the Parties voting against the
Required Implementation Action at the time this vote is final. The Board may take a provisional vote on a
Required Implementation Action in order to initially
determine the position of the Parties on the Required
Implementation Action. A vote, specifically stated in the record of the Board meeting to be a provisional vote, shall not be considered a final vote with the consequences
stated above. A Party who is terminated from this
Agreement pursuant to this section shall be considered the same as a Party that voluntarily withdrew from the
Agreement under Section 7.1.1.1.
5.1.3.2 After the termination of any Parties pursuant to Section
5.1.3.1, the remaining Parties to this Agreement shall be only the Parties who voted in favor of the Required
Implementation Action.
5.1.4 Termination of CCA Program. Nothing contained in this Article or this Agreement shall be construed to limit the discretion of the Authority to terminate the implementation or operation of the CCA Program at any AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent time in accordance with any applicable requirements of state law.
5.2 Authority Documents. The Parties acknowledge and agree that the affairs of the Authority will be implemented through various documents duly adopted by the Board through Board resolution, including but not necessarily limited to the Operating Rules and Regulations, the annual budget, and specified plans and policies defined as the Authority Documents by this Agreement. The Parties agree to abide by and comply with the terms and conditions of all such Authority Documents that may be adopted by the Board, subject to the Parties’ right to withdraw from the Authority as described in Article 7.
ARTICLE 6
FINANCIAL PROVISIONS
6.1 Fiscal Year. The Authority’s fiscal year shall be 12 months commencing April 1 and ending March 31. The fiscal year may be changed by Board resolution.
6.2 Depository.
6.2.1 All funds of the Authority shall be held in separate accounts in the name of the Authority and not commingled with funds of any Party or any other person or entity.
6.2.2 All funds of the Authority shall be strictly and separately accounted for, and regular reports shall be rendered of all receipts and disbursements, at least quarterly during the fiscal year. The books and records of the Authority shall be open to inspection by the Parties at all reasonable times.
The Board shall contract with a certified public accountant or public accountant to make an annual audit of the accounts and records of the Authority, which shall be conducted in accordance with the requirements of Section 6505 of the Act.
6.2.3 All expenditures shall be made in accordance with the approved budget and upon the approval of any officer so authorized by the Board in accordance with its Operating Rules and Regulations. The Treasurer shall draw checks or warrants or make payments by other means for claims or disbursements not within an applicable budget only upon the prior approval of the Board.
6.3 Budget and Recovery Costs.
6.3.1 Budget. The initial budget shall be approved by the Board. The Board may revise the budget from time to time through an Authority Document as may be reasonably necessary to address contingencies and unexpected AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent expenses. All subsequent budgets of the Authority shall be prepared and approved by the Board in accordance with the Operating Rules and Regulations.
6.3.2 County Funding of Initial Costs. The County of Marin shall fund the Initial Costs of the Authority in implementing the CCA Program in an amount not to exceed $500,000 unless a larger amount of funding is approved by the Board of Supervisors of the County. This funding shall be paid by the County at the times and in the amounts required by the Authority. In the event that the CCA Program becomes operational, these Initial Costs paid by the County of Marin shall be included in the customer charges for electric services as provided by Section 6.3.4 to the extent permitted by law, and the County of Marin shall be reimbursed from the payment of such charges by customers of the Authority. The Authority may establish a reasonable time period over which such costs are recovered. In the event that the CCA Program does not become operational, the County of Marin shall not be entitled to any reimbursement of the Initial Costs it has paid from the Authority or any Party.
6.3.3 CCA Program Costs. The Parties desire that, to the extent reasonably practicable, all costs incurred by the Authority that are directly or indirectly attributable to the provision of electric services under the CCA Program, including the establishment and maintenance of various reserve and performance funds, shall be recovered through charges to CCA customers receiving such electric services.
6.3.4 General Costs. Costs that are not directly or indirectly attributable to the provision of electric services under the CCA Program, as determined by the Board, shall be defined as general costs. General costs shall be shared among the Parties on such basis as the Board shall determine pursuant to an Authority Document.
6.3.5 Other Energy Program Costs. Costs that are directly or indirectly attributable to energy programs approved by the Authority other than the CCA Program shall be shared among the Parties on such basis as the Board shall determine pursuant to an Authority Document.
ARTICLE 7
WITHDRAWAL AND TERMINATION
7.1 Withdrawal.
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7.1.1 General.
7.1.1.1 Prior to the Authority’s execution of Program Agreement 1, any Party may withdraw its membership in the Authority by giving no less than 30 days advance written notice of its election to do so, which notice shall be given to the Authority and each Party. To permit consideration by the governing body of each Party, the Authority shall provide a copy of the proposed Program Agreement 1 to each Party at least 90 days prior to the consideration of such agreement by the Board.
7.1.1.2 Subsequent to the Authority’s execution of Program Agreement 1, a Party may withdraw its membership in the Authority, effective as of the beginning of the Authority’s fiscal year, by giving no less than 6 months advance written notice of its election to do so, which notice shall be given to the Authority and each Party, and upon such other conditions as may be prescribed in Program Agreement 1.
7.1.2 Amendment. Notwithstanding Section 7.1.1, a Party may withdraw its membership in the Authority following an amendment to this Agreement in the manner provided by Section 8.4.
7.1.3 Continuing Liability; Further Assurances. A Party that withdraws its membership in the Authority may be subject to certain continuing liabilities, as described in Section 7.3. The withdrawing Party and the Authority shall execute and deliver all further instruments and documents, and take any further action that may be reasonably necessary, as determined by the Board, to effectuate the orderly withdrawal of such Party from membership in the Authority. The Operating Rules and Regulations shall prescribe the rights if any of a withdrawn Party to continue to participate in those Board discussions and decisions affecting customers of the CCA Program that reside or do business within the jurisdiction of the Party.
7.2 Involuntary Termination of a Party. This Agreement may be terminated with respect to a Party for material non-compliance with provisions of this Agreement or the Authority Documents upon an affirmative vote of the Board in which the minimum percentage vote and percentage voting shares, as described in Section
4.9.1, shall be no less than 67%, excluding the vote and voting shares of the Party subject to possible termination. Prior to any vote to terminate this Agreement with respect to a Party, written notice of the proposed termination and the reason(s) for such termination shall be delivered to the Party whose termination is proposed at least 30 days prior to the regular Board meeting at which such matter shall first be discussed as an agenda item. The written notice of proposed termination shall specify the particular provisions of this Agreement or the Authority Documents that the Party has allegedly violated. The Party subject to possible termination AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent shall have the opportunity at the next regular Board meeting to respond to any reasons and allegations that may be cited as a basis for termination prior to a vote regarding termination. A Party that has had its membership in the Authority terminated may be subject to certain continuing liabilities, as described in Section
7.3. In the event that the Authority decides to not implement the CCA Program, the minimum percentage vote of 67% shall be conducted in accordance with Section 4.10 rather than Section 4.9.1.
7.3 Continuing Liability; Refund. Upon a withdrawal or involuntary termination of a Party, the Party shall remain responsible for any claims, demands, damages, or liabilities arising from the Party’s membership in the Authority through the date of its withdrawal or involuntary termination, it being agreed that the Party shall not be responsible for any claims, demands, damages, or liabilities arising after the date of the Party’s withdrawal or involuntary termination. In addition, such Party also shall be responsible for any costs or obligations associated with the Party’s participation in any program in accordance with the provisions of any agreements relating to such program provided such costs or obligations were incurred prior to the withdrawal of the Party. The Authority may withhold funds otherwise owing to the Party or may require the Party to deposit sufficient funds with the Authority, as reasonably determined by the Authority, to cover the Party’s liability for the costs described above. Any amount of the Party’s funds held on deposit with the Authority above that which is required to pay any liabilities or obligations shall be returned to the Party.
7.4 Mutual Termination. This Agreement may be terminated by mutual agreement of all the Parties; provided, however, the foregoing shall not be construed as limiting the rights of a Party to withdraw its membership in the Authority, and thus terminate this Agreement with respect to such withdrawing Party, as described in Section 7.1.
7.5 Disposition of Property upon Termination of Authority. Upon termination of this Agreement as to all Parties, any surplus money or assets in possession of the Authority for use under this Agreement, after payment of all liabilities, costs, expenses, and charges incurred under this Agreement and under any program documents, shall be returned to the then-existing Parties in proportion to the contributions made by each.
ARTICLE 8
MISCELLANEOUS PROVISIONS
8.1 Dispute Resolution. The Parties and the Authority shall make reasonable efforts to settle all disputes arising out of or in connection with this Agreement. Should AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent such efforts to settle a dispute, after reasonable efforts, fail, the dispute shall be settled by binding arbitration in accordance with policies and procedures established by the Board.
8.2 Liability of Directors, Officers, and Employees. The Directors, officers, and employees of the Authority shall use ordinary care and reasonable diligence in the exercise of their powers and in the performance of their duties pursuant to this Agreement. No current or former Director, officer, or employee will be responsible for any act or omission by another Director, officer, or employee. The Authority shall defend, indemnify and hold harmless the individual current and former Directors, officers, and employees for any acts or omissions in the scope of their employment or duties in the manner provided by Government Code Section 995 et seq. Nothing in this section shall be construed to limit the defenses available under the law, to the Parties, the Authority, or its Directors, officers, or employees.
8.3 Indemnification of Parties. The Authority shall acquire such insurance coverage as is necessary to protect the interests of the Authority, the Parties and the public.
The Authority shall defend, indemnify and hold harmless the Parties and each of their respective Board or Council members, officers, agents and employees, from any and all claims, losses, damages, costs, injuries and liabilities of every kind arising directly or indirectly from the conduct, activities, operations, acts, and omissions of the Authority under this Agreement.
8.4 Amendment of this Agreement. This Agreement may be amended by an affirmative vote of the Board in which the minimum percentage vote and percentage voting shares, as described in Section 4.9.1, shall be no less than 67%.
The Authority shall provide written notice to all Parties of amendments to this Agreement, including the effective date of such amendments. A Party shall be deemed to have withdrawn its membership in the Authority effective immediately upon the vote of the Board approving an amendment to this Agreement if the Director representing such Party has provided notice to the other Directors immediately preceding the Board’s vote of the Party’s intention to withdraw its membership in the Authority should the amendment be approved by the Board.
As described in Section 7.3, a Party that withdraws its membership in the Authority in accordance with the above-described procedure may be subject to continuing liabilities incurred prior to the Party’s withdrawal. In the event that the Authority decides to not implement the CCA Program, the minimum percentage vote of 67% shall be conducted in accordance with Section 4.10 rather than Section 4.9.1.
8.5 Assignment. Except as otherwise expressly provided in this Agreement, the rights and duties of the Parties may not be assigned or delegated without the advance written consent of all of the other Parties, and any attempt to assign or delegate such rights or duties in contravention of this Section 8.5 shall be null and void. This Agreement shall inure to the benefit of, and be binding upon, the AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent successors and assigns of the Parties. This Section 8.5 does not prohibit a Party from entering into an independent agreement with another agency, person, or entity regarding the financing of that Party’s contributions to the Authority, or the disposition of proceeds which that Party receives under this Agreement, so long as such independent agreement does not affect, or purport to affect, the rights and duties of the Authority or the Parties under this Agreement.
8.6 Severability. If one or more clauses, sentences, paragraphs or provisions of this Agreement shall be held to be unlawful, invalid or unenforceable, it is hereby agreed by the Parties, that the remainder of the Agreement shall not be affected thereby. Such clauses, sentences, paragraphs or provision shall be deemed reformed so as to be lawful, valid and enforced to the maximum extent possible.
8.7 Further Assurances. Each Party agrees to execute and deliver all further instruments and documents, and take any further action that may be reasonably necessary, to effectuate the purposes and intent of this Agreement.
8.8 Execution by Counterparts. This Agreement may be executed in any number of counterparts, and upon execution by all Parties, each executed counterpart shall have the same force and effect as an original instrument and as if all Parties had signed the same instrument. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon, and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more signature pages.
8.9 Parties to be Served Notice. Any notice authorized or required to be given pursuant to this Agreement shall be validly given if served in writing either personally, by deposit in the United States mail, first class postage prepaid with return receipt requested, or by a recognized courier service. Notices given (a) personally or by courier service shall be conclusively deemed received at the time of delivery and receipt and (b) by mail shall be conclusively deemed given 48 hours after the deposit thereof (excluding Saturdays, Sundays and holidays) if the sender receives the return receipt. All notices shall be addressed to the office of the clerk or secretary of the Authority or Party, as the case may be, or such other person designated in writing by the Authority or Party. Notices given to one Party shall be copied to all other Parties. Notices given to the Authority shall be copied to all Parties.
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent ARTICLE 9
SIGNATURE
IN WITNESS WHEREOF, the parties hereto have executed this Joint Powers Agreement establishing Marin Clean Energy (formerly, Marin Energy Authority) By: _______________________________
Name: _______________________________
Title: ________________________________
Date: ________________________________
Party: City of Hercules
DocuSign Envelope ID: 902EB467-96C5-47A7-8347-AEA7CA08DB86 Dante Hall
City Manager
10/20/2023
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent ARTICLE 9
SIGNATURE
IN WITNESS WHEREOF, the parties hereto have executed this Joint Powers Agreement establishing Marin Clean Energy (formerly, Marin Energy Authority) By:
Name:
Title:- - --="Ci"t'y-'--=M=:.=.:..a:=a.g:n: =cr:e.-_ _ _ _ _ _ Date:- - ----=-J=-u=ne::...1..:.2, =2.,,,'"0"'-1"'-9_ _ _ _ _ _ Party: City of Vallejo
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent Exhibit A
To the
Joint Powers Agreement
Marin Energy Authority
-Definitions-
“AB 117” means Assembly Bill 117 (Stat. 2002, ch. 838, codified at Public Utilities Code Section 366.2), which created CCA.
“Act” means the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.)
“Administrative Services Agreement” means an agreement or agreements entered into after the Effective Date by the Authority with an entity that will perform tasks necessary for planning, implementing, operating and administering the CCA Program or any other energy programs adopted by the Authority.
“Agreement” means this Joint Powers Agreement.
“Annual Energy Use” has the meaning given in Section 4.9.2.2. “Authority” means the Marin Energy Authority.
“Authority Document(s)” means document(s) duly adopted by the Board by resolution or motion implementing the powers, functions and activities of the Authority, including but not limited to the Operating Rules and Regulations, the annual budget, and plans and policies.
“Board” means the Board of Directors of the Authority.
“CCA” or “Community Choice Aggregation” means an electric service option available to cities and counties pursuant to Public Utilities Code Section 366.2. “CCA Program” means the Authority’s program relating to CCA that is principally described in Sections 2.4 and 5.1.
“Director” means a member of the Board of Directors representing a Party. “Effective Date” means the date on which this Agreement shall become effective and the Marin Energy Authority shall exist as a separate public agency, as further described in Section 2.1.
“Implementation Plan” means the plan generally described in Section 5.1.2 of this Agreement that is required under Public Utilities Code Section 366.2 to be filed with the AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent California Public Utilities Commission for the purpose of describing a proposed CCA Program.
“Initial Costs” means all costs incurred by the Authority relating to the establishment and initial operation of the Authority, such as the hiring of an Executive Director and any administrative staff, any required accounting, administrative, technical and legal services in support of the Authority’s initial activities or in support of the negotiation, preparation and approval of one or more Administrative Services Provider Agreements and Program Agreement 1. Administrative and operational costs incurred after the approval of Program Agreement 1 shall not be considered Initial Costs. “Initial Participants” means, for the purpose of this Agreement, the signatories to this JPA as of May 5, 2010 including City of Belvedere, Town of Fairfax, City of Mill Valley, Town of San Anselmo, City of San Rafael, City of Sausalito, Town of Tiburon and County of Marin.
“Operating Rules and Regulations” means the rules, regulations, policies, bylaws and procedures governing the operation of the Authority. “Parties” means, collectively, the signatories to this Agreement that have satisfied the conditions in Sections 2.2 or 3.2 such that it is considered a member of the Authority. “Party” means, singularly, a signatory to this Agreement that has satisfied the conditions in Sections 2.2 or 3.2 such that it is considered a member of the Authority. “Program Agreement 1” means the agreement that the Authority will enter into with an energy service provider that will provide the electricity to be distributed to customers participating in the CCA Program.
“Total Annual Energy” has the meaning given in Section 4.9.2.2.
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent Exhibit B
To the
Joint Powers Agreement
Marin Energy Authority
-List of the Parties-City of American Canyon
City of Belvedere
City of Benicia
City of Calistoga
City of Concord
Town of Corte Madera
Town of Danville
City of El Cerrito
Town of Fairfax
City of Fairfield
City of Hercules
City of Lafayette
City of Larkspur
City of Martinez
Town of Moraga
City of Mill Valley
City of Napa
City of Novato
City of Oakley
City of Pinole
City of Pittsburg
City of Pleasant Hill City
of Richmond Town of
Ross
Town of San Anselmo
City of San Pablo
City of San Rafael
City of San Ramon
City of Sausalito
St. Helena
Town of Tiburon
City of Vallejo
City of Walnut Creek
Town of Yountville
County of Contra Costa
County of Marin County
of Napa
County of Solano
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent Marin Clean Energy
- Annual Energy Use -
This Exhibit C is effective as of November 16, 2023.
MCE Member Community kWh (2022)
City of American Canyon 81,427,344
City of Belvedere 8,237,519
City of Benicia 94,928,828
City of Calistoga 28,672,196
City of Concord 464,522,261
Town of Corte Madera 40,679,971
County of Contra Costa 641,627,822
Town of Danville 154,016,934
City of El Cerrito 55,954,420
Town of Fairfax 17,441,179
City of Fairfield* 452,596,498
City of Hercules** 75,602,000
City of Lafayette 91,628,665
City of Larkspur 41,529,142
City of Martinez 144,050,725
City of Mill Valley 44,544,689
County of Marin 225,874,556
Town of Moraga 42,086,139
City of Napa 273,494,891
County of Napa 296,199,222
City of Novato 188,226,487
City of Oakley 111,135,099
City of Pinole 57,339,339
City of Pittsburg 232,985,737
City of Pleasant Hill 130,900,910
City of Richmond 387,473,558
Town of Ross 9,860,762
Town of San Anselmo 31,648,284
City of San Ramon 270,273,787
City of Saint Helena 44,870,258
City of San Pablo 63,297,704
City of San Rafael 206,521,192
City of Sausalito 30,635,006
County of Solano 177,643,279
Town of Tiburon 27,721,503
City of Vallejo 335,923,675
City of Walnut Creek 323,700,192
Town of Yountville 30,326,651
MCE Total Energy Use 5,935,598,420
*2020 usage data as provided by PG&E.
**2021/2022 usage data as provided by PG&E.
All other usage data reflects MCE customer billing records for 2022.
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent Marin Clean Energy
- Voting Shares -
This Exhibit D is effective as of November 16, 2023.
MCE Member Community kWh (2022) Section 4.9.2.1 Section 4.9.2.2 Voting Share City of American Canyon 81,427,344 1.32% 0.69% 2.00%
City of Belvedere 8,237,519 1.32% 0.07% 1.39%
City of Benicia 94,928,828 1.32% 0.80% 2.12%
City of Calistoga 28,672,196 1.32% 0.24% 1.56%
City of Concord 464,522,261 1.32% 3.91% 5.23%
Town of Corte Madera 40,679,971 1.32% 0.34% 1.66%
County of Contra Costa 641,627,822 1.32% 5.40% 6.72%
Town of Danville 154,016,934 1.32% 1.30% 2.61%
City of El Cerrito 55,954,420 1.32% 0.47% 1.79%
Town of Fairfax 17,441,179 1.32% 0.15% 1.46%
City of Fairfield* 452,596,498 1.32% 3.81% 5.13%
City of Hercules** 75,602,000 1.32% 0.64% 1.95%
City of Lafayette 91,628,665 1.32% 0.77% 2.09%
City of Larkspur 41,529,142 1.32% 0.35% 1.67%
City of Martinez 144,050,725 1.32% 1.21% 2.53%
City of Mill Valley 44,544,689 1.32% 0.38% 1.69%
County of Marin 225,874,556 1.32% 1.90% 3.22%
Town of Moraga 42,086,139 1.32% 0.35% 1.67%
City of Napa 273,494,891 1.32% 2.30% 3.62%
County of Napa 296,199,222 1.32% 2.50% 3.81%
City of Novato 188,226,487 1.32% 1.59% 2.90%
City of Oakley 111,135,099 1.32% 0.94% 2.25%
City of Pinole 57,339,339 1.32% 0.48% 1.80%
City of Pittsburg 232,985,737 1.32% 1.96% 3.28%
City of Pleasant Hill 130,900,910 1.32% 1.10% 2.42%
City of Richmond 387,473,558 1.32% 3.26% 4.58%
Town of Ross 9,860,762 1.32% 0.08% 1.40%
Town of San Anselmo 31,648,284 1.32% 0.27% 1.58%
City of San Ramon 270,273,787 1.32% 2.28% 3.59%
City of Saint Helena 44,870,258 1.32% 0.38% 1.69%
City of San Pablo 63,297,704 1.32% 0.53% 1.85%
City of San Rafael 206,521,192 1.32% 1.74% 3.06%
City of Sausalito 30,635,006 1.32% 0.26% 1.57%
County of Solano 177,643,279 1.32% 1.50% 2.81%
Town of Tiburon 27,721,503 1.32% 0.23% 1.55%
City of Vallejo 335,923,675 1.32% 2.83% 4.15%
City of Walnut Creek 323,700,192 1.32% 2.73% 4.04%
Town of Yountville 30,326,651 1.32% 0.26% 1.57%
MCE Total Energy Use 5,935,598,420 50.00% 50.00% 100.00% *2020 usage data as provided by PG&E.
**2021/2022 usage data as provided by PG&E.
All other usage data reflects MCE customer billing records for 2022.
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent Appendix C: City of Hercules Ordinance
AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent Ordinance No. 546
ORDINANCE NO. 546
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERCULES
APPROVING THE MARIN CLEAN ENERGY JOINT POWERS AGREEMENT AND
AUTHORIZING THE IMPLEMENTATION OF A COMMUNITY CHOICE
AGGREGATION PROGRAM.
.
WHEREAS, the City of Hercules has been actively investigating options to provide electric services to constituents within its service area with the intent of promoting use of renewable energy and competitive retail choice and reducing -energy-related greenhouse gas emissions ; and
WHEREAS, Assembly Bill (AB) 117 (Stat. 2002, ch. 838; see California Public Utilities Code section 366.2 et seq.; hereinafter referred to as the "Act") authorizes any California city or county, whose governing body so elects, to combine the electricity load of its residents and businesses in a community-wide electricity aggregation program known as Community Choice Aggregation ("CCA"); and
WHEREAS, AB 32 was signed into law in 2006 establishing the goal of reducing the State's greenhouse gas emissions to 1990 levels by 2020; and
WHEREAS, the Act expressly authorizes participation in a CCA program through a joint powers agency, and to this end, the City of Hercules has been evaluating a CCA program through Marin Clean Energy ("MCE"), established as a joint powers authority pursuant to California Government Code § 6500 et seq; and
WHEREAS, on February 2, 2010, the California Public Utilities Commission certified the Implementation Plan of MCE, confirming MCE's compliance with the requirements of the Act; and
WHEREAS, electricity in Hercules is generated and provided by Pacific Gas and Electric (PG&E) and there is not currently an alternative provider in the City. PG&E is currently working to add more renewable energy to its power mix under California's renewable portfolio standard and offered 48 percent renewable energy in 2021; and
WHEREAS, the City of Hercules is committed to the development of renewable energy generation and energy efficiency improvements,reduction of greenhouse gases, and protection of the environment and fully supports MCE's current electricity procurement plan, which targets more than 60 percent renewable energy content; and
WHEREAS, the City of Hercules finds it important that its residents, businesses, and public facilities have alternative choices to energy procurement beyond PG&E; and WHEREAS, the City of Hercules finds that joining MCE will offer Hercules customers choice DocuSign Envelope ID: B19319E3-68E6-4AA7-9BBC-CF8D4222080A AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent Ordinance No. 546
in their power provider and will help the City meet the State goal set out in AB 32; and WHEREAS, in order to become a member of MCE, the MCE Joint Powers Agreement requires the City to adopt an ordinance electing to implement a CCA program within its jurisdiction by and through its participation in MCE; and
WHEREAS, MCE will govern and operate the CCA program on behalf of the City. The City 's participation in MCE will include membership on the Board of Directors as provided in the Joint Powers Agreement; and
WHEREAS, MCE will enter into agreements with electric power suppliers and other services providers and, based on these agreements, MCE plans to provide power to residents and businesses at rates that are competitive with those of the incumbent utility; and WHEREAS, California Public Utilities Code § 366.2 allows customers the right to opt out of the MCE CCA program and continue to receive service from PG&E. Customers who desire to continue to receive service from PG&E will be able to do so at any time; and WHEREAS, on May 9, 2023, the City Council held a public meeting at which time interested persons had an opportunity to testify either in support or in opposition to implementation of the MCE CCA program within the City.
NOW, THEREFORE, the City Council of the City of Hercules does ordain as follows:
SECTION 1. CEQA. This ordinance is exempt from the requirements of the California Environmental Quality Act ("CEQA") pursuant to State CEQA Guidelines, as it is not a "project" and has no potential to result in a direct or reasonably foreseeable indirect physical change to the environment because it involves an organizational activity of a local government. 14 Cal.
Code Regs. § 15378(a). The ordinance is expressly exempt from CEQA because it is an organizational or administrative activity of governments that will not result in direct or indirect physical change in the environment. 14 Cal. Code Regs. § 15378(b)(5). The ordinance is also exempt from CEQA because it is merely a change in organization of local agencies. 14 Cal.
Code Regs. § 15320. Further, the ordinance is exempt from CEQA because there is no possibility that the ordinance or its implementation, which would only result in the formation of a governmental organization, would have a significant negative effect on the environment. 14 Cal.
Code Regs. § 15061(b)(3).
SECTION 2. AUTHORIZATION TO IMPLEMENT A COMMUNITY CHOICE AGGREGATION PROGRAM. Based upon the foregoing, the City hereby elects to implement a CCA program within the jurisdiction of the City by participating in the MCE CCA program, as described in the MCE Joint Powers Agreement (Exhibit 1), and authorizes the City Manager, or designee, to execute the Joint Powers Agreement.
SECTION 3. SEVERABILITY. If any section, subsection, sentence, clause, phrase or portion of this ordinance is held for any reason to be invalid or unconstitutional by a decision of any DocuSign Envelope ID: B19319E3-68E6-4AA7-9BBC-CF8D4222080A AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent Ordinance No. 546
court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have adopted this ordinance and each section, subsection, clause, phrase or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared invalid or unconstitutional.
SECTION 4. EFFECTIVE DATE. This ordinance shall take effect 30 days after its adoption.
Within fifteen days after the passage of this ordinance, the City Clerk shall cause it or a summary of it to be posted in the three places designated by resolution of the City Council.
The foregoing ordinance was introduced at a regular meeting of the City Council of the City of Hercules held on the 9th day of May, 2023.
ADOPTED and ordered posted at a meeting of the City Council of the City of Hercules, held on the 23rd day of May, 2023, by the following vote of the Council:
AYES: Council Members: Tiffany Grimsley, Chris Kelley, Dion Bailey and Mayor Walker - Griffin
NOES: Vice Mayor Dan Romero
ABSTAIN: NONE
ABSENT: NONE
Alexander Walker-Griffin, Mayor
ATTEST:
Eibleis Melendez, City Clerk
DocuSign Envelope ID: B19319E3-68E6-4AA7-9BBC-CF8D4222080A AI #10_Att.: Addendum No. 9 to the MCE I-Plan & Statement of Intent 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 #12)
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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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 #12_Att. A: Energy Storage Agrmnt 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.
13.2 Buyer’s Representations and Warranties. As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a joint powers authority and a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations and orders of the California Public Utilities Commission, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All Persons making up the governing body of Buyer are the elected or appointed incumbents in their positions and hold their positions in good standing in accordance with the Joint Powers Agreement and other Law.
(b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, including but not limited to community choice aggregation, the Joint Powers Act, competitive bidding, public notice, open meetings, election, referendum, or prior appropriation requirements, the documents of formation of Buyer or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Buyer is a party or by which any of its property is bound.
(d) This Agreement has been duly executed and delivered by Buyer. This Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Buyer warrants and covenants that with respect to its contractual obligations under this Agreement, it will not claim 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 limited within a venue permitted in law and under this 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 AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC 46 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 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 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, approvals and permits necessary for the operation of the Facility and for Seller 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. To the extent applicable to the Facility, 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 shall enter into one or more project labor agreements for construction of the Facility. As a condition precedent to commencement of the Delivery Term, Seller must certify that it complied with the foregoing requirements, and be able to demonstrate, upon request, compliance with this requirement via copies of executed project labor agreements, or similar agreements, a certified payroll system and such other documentation reasonably requested by Buyer, including pursuant to an audit.
13.5 Diversity Reporting. As applicable to the Facility, Seller agrees to complete the Supplier Diversity and Labor Practices questionnaire available at https://forms.gle/4VahoVD3h7pvE4dF6, as may be updated from time to time, or a similar questionnaire, at the reasonable request of Buyer and to comply with similar reasonable regular reporting requirements related to diversity and labor practices from time to time. A current example of the Supplier Diversity and Labor Practices questionnaire is attached as Exhibit T.
13.6 Other Seller Commitments. Seller shall perform the additional Seller commitments as set forth in Exhibit S.
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 AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC 47 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; provided, a Change of Control of Seller shall not require Buyer’s consent and shall not be subject to Sections 14.2 or 14.3 if the assignee or transferee is a Permitted Transferee. Any assignment made in violation of the conditions to assignment set out in this Article 14 shall be null and void. Buyer shall have no obligation to provide any consent, or enter into any agreement, that materially and adversely affects any of Buyer’s rights, benefits, risks or obligations under this Agreement. The assigning Party shall pay the other Party’s reasonable costs associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement by the assigning Party, 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 such financing or refinancing of the Facility, Buyer shall in good faith 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; provided, neither Buyer’s consent nor execution of a Collateral Assignment Agreement shall be required for Seller to assign this Agreement pursuant to this Section 14.2 . 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;
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC 48 (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; (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 AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC 49 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.
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. 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 authorized members of the Parties’ senior management shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve the dispute arising hereunder within thirty (30) days of initiating such discussions, the Parties shall submit the dispute to meditation prior to seeking any and all remedies available at Law or in equity.
ARTICLE 16
INDEMNIFICATION
16.1 Mutual Indemnity.
(a) Each Party (the “Indemnifying Party”) agrees to defend, indemnify and hold harmless, the other Party, its Affiliates, directors, officers, agents, attorneys, employees and representatives (each an “Indemnified Party” and collectively, the “Indemnified Group”) from and against all claims, demands, losses, liabilities, penalties, and expenses, including reasonable attorneys’ and expert witness fees, for personal injury or death to Persons and damage to the property of any third party to the extent arising out of, resulting from, or caused by the following:
(i) the negligent act or omission, recklessness or willful misconduct of the Indemnifying Party, its AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC 50 Affiliates, its directors, officers, employees, agents, subcontractors, and anyone directly or indirectly employed by either the Indemnifying Party or any of its subcontractors or anyone that they control; (ii) any infringement of the patent rights, copyright, trade secret, trade name, trademark, service mark or any other proprietary right of any person(s) caused by the Indemnifying Party’s sale or use of the Product, deliverables or other items provided by the Indemnifying Party pursuant to the requirements of this Agreement, or (iii) any breach of this Agreement by the Indemnifying Party (collectively, “Indemnifiable Losses”). (b) The Indemnifying Party’s indemnity obligations apply to the maximum extent allowed by Law, subject to limitations on consequential and similar damages set forth in Article 12 herein, and includes defending the Indemnified Party. Upon the Indemnified Party’s written request, the Indemnifying Party, at its own expense, must defend any suit or action that is subject to the Indemnifying Party’s indemnity obligations. (c) Nothing in this Article 16 shall enlarge or relieve Seller or Buyer of any liability to the other for any breach of this Agreement. Neither Party shall be indemnified for its damages resulting from its sole negligence, intentional acts, or willful misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligations to pay claims consistent with the provisions of a valid insurance policy.
16.2 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 Notify 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 Indemnified Party regarding the Indemnifiable Loss.
16.3 Failure to Provide Notice. A failure to give timely Notice or to include any specified information in any Notice as provided in this Section 16.3 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, Indemnifying Party is not obligated to indemnify any member of the Indemnified Group 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.
16.4 Defense of Claims. If, within ten (10) Business Days after giving a Notice of Claim regarding a Claim to Indemnifying Party pursuant to Section 16.2, Indemnified Party receives Notice from Indemnifying Party that Indemnifying Party has elected to assume the defense of such Claim, Indemnifying Party will not be liable for any legal expenses subsequently incurred by Indemnified Party in connection with the defense thereof; provided, however, that if Indemnifying Party fails to take reasonable steps necessary to defend diligently such Claim within ten (10) Business Days after receiving Notice from Indemnified Party that Indemnified Party believes Indemnifying Party has failed to take such steps, or if Indemnifying Party has not undertaken fully to indemnify Indemnified Party in respect of all Indemnifiable Losses relating to the matter, AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC 51 Indemnified Party may assume its own defense, and 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 Indemnified Party, 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 Indemnified Party for which Indemnified Party is not entitled to indemnification hereunder; provided, however, Indemnifying Party may accept any settlement without the consent of Indemnified Party if such settlement provides a full release to Indemnified Party and no requirement that 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 Indemnified Party for which Indemnified Party is not entitled to indemnification hereunder and Indemnifying Party desires to accept and agrees to such offer, Indemnifying Party will give Notice to Indemnified Party to that effect. If Indemnified Party fails to consent to such firm offer within ten (10) calendar days after its receipt of such Notice, Indemnified Party may continue to contest or defend such Claim and, in such event, the maximum liability of Indemnifying Party to such Claim will be the amount of such settlement offer, plus reasonable costs and expenses paid or incurred by Indemnified Party up to the date of such Notice.
16.5 Subrogation of Rights. Upon making any indemnity payment, Indemnifying Party will, to the extent of such indemnity payment, be subrogated to all rights of Indemnified Party against any third Party in respect of the Indemnifiable Loss to which the indemnity payment relates; provided that until Indemnified Party recovers full payment of its Indemnifiable Loss, any and all claims of Indemnifying Party against any such third Party on account of said indemnity payment are hereby made expressly subordinated and subjected in right of payment to Indemnified Party’s rights against such third Party. Without limiting the generality or effect of any other provision hereof, Buyer and Seller shall execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation and subordination rights.
16.6 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 sudden and accidental pollution coverage, products and completed operations and bodily injury insurance, with a minimum amount of Two Million Dollars ($2,000,000) per occurrence, and a general aggregate of not less than Five Million Dollars ($5,000,000), and to provide contractual liability in said amount, covering Seller’s insurable obligations under this Agreement and including Buyer as an additional insured but only to the extent of the liabilities assumed hereunder by Seller; and (ii) an umbrella/excess insurance policy in a minimum amount of liability of Ten Million Dollars ($10,000,000) each occurrence and in the aggregate. Defense costs shall be provided as an additional benefit and not included with the limits of liability. Such insurance shall contain standard cross-liability and severability of AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC 52 interest (separation of insureds clause) provisions. Insurance may be evidenced through primary and excess policies.
(b) Employer’s Liability Insurance. Employers’ Liability insurance shall be One Million Dollars ($1,000,000.00) for bodily injury by accident-each accident. With regard to bodily injury by disease, the One Million Dollar ($1,000,000) disease policy limit and One Million Dollar ($1,000,000) disease-each employee will apply.
(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 Million Dollars ($1,000,000) each accident. 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 this Agreement.
(e) Builders All-Risk Insurance. Seller shall maintain or cause to be maintained during the construction of the Facility Builder’s 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 liability insurance in the amount of Two Million Dollars ($2,000,000) per occurrence and in the aggregate, naming the Seller (and Lender if any) as additional insured. (g) Subcontractor Insurance. Seller shall require its EPC contractor(s) to carry the same types of insurance as Seller. All EPC contractor(s) shall include Seller as an additional insured to (i) commercial general liability insurance; (ii) workers’ compensation insurance and employers’ liability coverage; and (iii) business auto insurance for bodily injury and property damage. All EPC contractor(s) 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. Prior to the Effective Date and upon annual renewal of required insurance coverage thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such coverage as is required to be in effect at the times specified above. These certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of cancellation of coverage, except ten (10) days for non-payment of premium. General Liability and Business Auto insurance shall be primary coverage without right of contribution from any insurance of Buyer. Umbrella/Excess insurance shall be non-contributory. Any other insurance maintained by Seller is for the exclusive benefit of Seller and shall not in any manner inure to the benefit of Buyer.
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC 53 ARTICLE 18
CONFIDENTIAL INFORMATION
18.1 Definition of Confidential Information. The following constitutes “Confidential Information,” whether oral or written which is delivered by Seller to Buyer or by Buyer to Seller including: (a) the pricing and other commercially sensitive terms and conditions of, and proposals and negotiations related to, this Agreement, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other.
Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement.
18.2 Duty to Maintain Confidentiality. 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 applicable Law or regulation, (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 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 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. The Parties acknowledge and agree that this Agreement, and information and documentation provided in connection with this Agreement, including Confidential Information, may be subject to the California Public Records Act (Government Code Section 7920 et seq.), and Buyer shall incur no liability arising out of any disclosure of such information or documentation provided in connection with this Agreement, including Confidential Information, that is subject to public disclosure under the California Public Records Act.
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 in this Article 18. 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 Article 18 or the continuation of any such breach, without the necessity of proving actual damages.
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC 54 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 and Seller’s Affiliates’ actual or potential accountants, advisors, agents, consultants, contractors, directors, employees, or trustees, so long as the Person to whom Confidential Information is disclosed agrees in writing to be bound by confidentiality provisions no less stringent than those of this Article 18.
18.5 Press Releases. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such public statement. For the purposes of this Section and to the extent the information is not prohibited by law from disclosure, press release does not include records released by Buyer, including annual comprehensive financial reports; memorandums or reports to Buyer’s board of directors; documentation submitted to regulatory agencies; disclosures related to public financings; and production of records required by subpoena, court order, or under the California Public Records Act (Government Code Section 7920 et seq.).
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 Party 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 and/or, to the AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC 55 extent set forth herein, any Lender) and/or Indemnified Party.
19.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
19.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Changes proposed by a non-Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under applicable law.
19.7 Counterparts; Electronic Signatures. 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. The Parties may rely on electronic or scanned signatures as originals.
19.8 Electronic Delivery. Delivery of an executed signature page of this Agreement by electronic format (including portable document format (.pdf)) shall be the same as delivery of an original executed signature page.
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 No Recourse to Shareholders. Seller and, if applicable, the Guarantor (to the extent set forth in the applicable Guaranty), shall solely be responsible for all debts, obligations and liabilities of Seller accruing and arising out of this Agreement. Except for a Guarantor (to the extent set forth in the applicable Guaranty) if Seller provides a Guaranty to Buyer, no owners (direct or indirect) or Affiliates of Seller, subcontractors of Seller, or any of the respective AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC 56 directors, officers, employees or agents of the foregoing, shall have any liability or responsibility for, relating to or in connection with Seller’s failure to perform or faulty performance of any term, covenant, condition or provision of this Agreement or any other failure, breach (including breach of any duty or standard of conduct) or other act or omission of Seller arising out of or in connection with this Agreement. In pursuing any remedy for any such failure to perform, faulty performance or other failure, breach or other act or omission of Seller, Buyer shall have no rights and shall not make any claims, take any actions or assert any remedies against any Person other than Seller and, if applicable, Guarantor, nor against any assets other than the assets of Seller and, if applicable, Guarantor (solely to the extent set forth in the applicable Guaranty).
19.12 Forward Contract. The Parties intend 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.
19.13 Service Contract. The Parties acknowledge and agree that this Agreement is intended to constitute a “service contract” within the meaning of Section 7701(e) of the Internal Revenue Code of 1986, as amended from time to time.
19.14 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.
[Signatures on following page]
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
CORMORANT ENERGY STORAGE,
LLC, a Delaware limited liability company
By:
Name:
Title:
Date:
CORMORANT ENERGY STORAGE,
LLC, a Delaware limited liability company
By:
Name:
Title:
Date:
MARIN CLEAN ENERGY, a California
joint powers authority
By:
Name:
Title:
Date:
MARIN CLEAN ENERGY, a California
joint powers authority
By:
Name:
Title:
Date:
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Site Name: Cormorant Battery Energy Storage Facility
Site includes all or some of the following APNs: 005-050-020 County: San Mateo County
Type of Facility: Battery Energy Storage
Energy Management Software: The Facility shall include communication systems and automatic generation control (AGC) interface to operate the Facility as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, directed by Buyer in accordance with the Agreement and/or the CAISO, including through ADS.
Seller must provide remotely operable, 2-4 second timestamps, data historian (6 months of on-site storage and 24 months of cloud storage), SCADA/AGC communication and operability with the Facility controller and offtaker, and include the following applications/modes:
• Dynamic Voltage Support
• Shifting
• Regulation
• Flexible Ramp
• Spinning Reserve
To the extent not already provided above, Seller must be able to provide telemetry and other data to Buyer and Buyer’s SC in an electronic format compatible with bid optimization software used by Buyer and Buyer’s SC for input into bid optimization software.
Operating Characteristics of Facility:
Maximum Stored Energy Level at COD (MWh): 520 MWh
Minimum Stored Energy Level at COD (MWh): 0 MWh
Maximum Charging Capacity at COD: 130 MW
Maximum Discharging Capacity at COD: 130 MW
Operating Restrictions of Facility: See Exhibit Q
Storage Contract Capacity: See definition in Section 1.1 Maximum Output: 520 MWh
Delivery Point: Facility PNode
Facility Meter Locations: See Exhibit R
Metering Arrangement: CAISO Metered Entity
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit A - 2
Facility Interconnection Point: The Facility shall interconnect to the PG&E Martin 115 kV Substation
Facility PNode: the PNode assigned to the Facility by the CAISO, which shall be located at the PG&E Martin 115 kV Substation.
Participating Transmission Owner: Pacific Gas and Electric Company (“PG&E”) AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit B - 1
EXHIBIT B
FACILITY CONSTRUCTION AND COMMERCIAL OPERATION
1. Facility Construction.
(a) “Construction Start” will occur once 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.” Seller shall cause Construction Start to occur no later than the Guaranteed Construction Start Date.
(b) The “Guaranteed Construction Start Date” means the Expected Construction Start Date as such date may be extended by the Development Cure Period (defined below). (c) If Seller fails to achieve Construction Start on or before the Guaranteed Construction Start Date,
Construction Delay
Damages shall be paid to Buyer in arrears on a monthly basis. 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 Construction Delay Damages set forth in such invoice. If Seller fails to pay the Construction Delay Damages within ten (10) Business Days of receipt of Buyer’s invoice, Buyer shall be entitled to deduct such Construction Delay Damages from the Development Security. 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, 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)(i) 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 Seller has fulfilled all of the conditions precedent in Section 2.2 of the Agreement and provided Notice to Buyer substantially in the form of Exhibit H (the “COD Certificate”). The “Commercial Operation Date” shall be the later of (x)
, or (y) the date on which Commercial Operation is achieved. (a) Seller shall cause Commercial Operation for the Facility to occur by the Expected Commercial Operation Date (as such date may be extended by the Development Cure Period (defined below), the “Guaranteed Commercial Operation Date”). Seller shall notify Buyer that it intends to achieve Commercial Operation at least sixty (60) days before the anticipated Commercial Operation Date.
(b) If Seller achieves Commercial Operation by the Guaranteed Commercial Operation Date, all Construction Delay Damages paid by Seller shall be promptly refunded to Seller. Seller AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC
Exhibit B - 2
shall include a request for refund of the 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, as it may be extended as provided herein, Seller shall pay COD 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 declare an Event of Default pursuant to Section 11.1(b)(ii) and receive a Damage Payment upon exercise of Buyer’s default right pursuant to Section 11.2.
3. Termination for Failure to Achieve Commercial Operation. If the Facility has not achieved Commercial Operation within 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 each, subject to notice and documentation requirements set forth below, be extended on a day-for-day basis for each day of delay due to a Force Majeure Event, delays caused by Buyer,
(the “Development Cure Period”). The Development Cure Period, including for a Force Majeure Event, shall be no longer than on a cumulative basis, except to the extent due to a Buyer delay. No extension shall be given under the Development Cure Period (a) if the delay was due to Seller’s failure to take commercially reasonable actions to meet its requirements and deadlines, (b) with respect to delays caused by a Force Majeure Event Seller does not satisfy the requirements of a Force Majeure Event, including the notice and documentation requirements under Section 10.3, or (c) Seller does not provide notice and documentation as required below. Seller shall provide written notice to Buyer of a delay other than a Force Majeure Event promptly, but in no case more than thirty (30) days after Seller became aware of such delay and its effects on the Guaranteed Construction Start Date and/or the Guaranteed Commercial Operation Date, except that in the case of a delay occurring within sixty (60) days of the Expected Commercial Operation Date, or after such date, Seller must provide written notice within ten (10) Business Days of Seller becoming aware of such delay. Upon request from Buyer, Seller shall provide documentation demonstrating to Buyer’s reasonable AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC
Exhibit B - 3
satisfaction that the delays described above did not result from Seller’s actions or failure to take commercially reasonable actions.
5. Failure to Reach 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 (i) install additional capacity or Network Upgrades, or take any other steps that are not inconsistent with Seller’s obligations under this Agreement, such that the Installed Battery Capacity is equal to (but not greater than) one hundred percent (100%) of the Storage Contract Capacity, and (ii) provide to Buyer a new certificate substantially in the form attached as Exhibit I 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 AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit C - 1
EXHIBIT C
COMPENSATION
Buyer shall compensate Seller for the Product in accordance with this Exhibit C. (a) Storage Rate. All Product shall be paid on a monthly basis at the Storage Rate (b) Availability Adjustment and Availability Adjustment Payment. (c) Liquidated Damages for Failure to Achieve Guaranteed Efficiency Rate. If for 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 AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC
Exhibit C - 2
(d) Tax Credits. The Parties agree that the Storage Rate is not subject to adjustment or amendment if Seller fails to receive any Tax Credits, or if any Tax Credits expire, are repealed or otherwise cease to apply to Seller or the Facility in whole or in part, or Seller or its investors are unable to benefit from any Tax Credits. Seller shall bear all risks, financial and otherwise, throughout the Contract Term, associated with Seller’s or the Facility’s eligibility to receive Tax Credits or to qualify for accelerated depreciation for Seller’s accounting, reporting or Tax purposes. The obligations of the Parties hereunder, including those obligations set forth herein regarding the purchase and price for and Seller’s obligation to deliver Product, shall be effective regardless of whether the sale of Product is eligible for, or receives Tax Credits during the Contract Term.
(e) New Tax Benefits. Notwithstanding paragraph (d) of this Exhibit C, (f) Test Product.
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage 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 shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility for both the delivery and the receipt of Charging Energy 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 or upon termination of this Agreement. Buyer (as the Facility’s SC) shall submit Schedules to the CAISO in accordance with this Agreement (including the Operating Restrictions) 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 (except as set forth in Section 4.13). Buyer shall cause its Scheduling Coordinator to reasonably cooperate with Seller prior to the Commercial Operation Date in accordance with Section 4.13. (b) Notices. Buyer (as the Facility’s SC) shall provide Seller with access to a web-based system through which Seller shall submit to Buyer and the CAISO all notices and updates required under the CAISO Tariff regarding the Facility’s status, including, but not limited to, all outage requests, forced outages, forced outage reports, clearance requests, or must offer waiver forms. Seller 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 Buyer (in order of preference) telephonically, by electronic mail, transmission to the personnel designated to receive such information.
(c) CAISO Costs and Revenues. Except as otherwise set forth below and in Section
4.13 with respect to Test Product, Buyer (as Scheduling Coordinator for the Facility) shall be financially responsible for such services and shall pay for CAISO costs (including for Charging Energy, 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 Discharging Energy, 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 assume all liability and reimburse Buyer for any and all CAISO costs, charges or sanctions (i) incurred by Buyer because of Seller’s failure to perform its obligations under this Agreement, (ii) incurred by Buyer because of any Facility outages for which notice has not been provided as required hereunder, or (iii) to the extent arising as a result of Seller’s failure to comply with a valid Charging Notice or valid Discharging Notice that complies with the requirements of this AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit D - 2
Agreement, if such failure results in incremental costs to Buyer (in each case, except to the extent such CAISO costs, charges or sanctions arise out of Buyer’s failure to perform its duties as Scheduling Coordinator for the Facility unless such failure is caused by Seller’s failure to perform its obligations under this Agreement). Any Availability Incentive Payments (as defined in the CAISO Tariff) are for the benefit of Seller and for Seller’s account, and 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 arise out of Buyer’s failure to perform its duties as Scheduling Coordinator for the Facility unless such failure is caused by Seller’s failure to perform its obligations under this Agreement). In addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling, outage reporting, or energy storage facility operation, and any such sanctions or penalties are imposed upon the Facility or upon Buyer as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or any CAISO directive, including Curtailment Orders, Charging Notices and Discharging Notices that complies with the requirements of this Agreement, or to otherwise perform in accordance with this Agreement, including with respect to the outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties shall be Seller’s responsibility (in each case, except to the extent such sanctions or penalties arise out of Buyer’s failure to perform its duties as Scheduling Coordinator for the Facility unless such failure is caused by Seller’s failure to perform its obligations under this Agreement). (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 in respect of performance prior to the expiration or termination of this Agreement shall survive the expiration or termination of this Agreement. (e) Dispute Costs. Buyer (as the Facility’s SC) may be required by Seller to dispute CAISO settlements in respect of the Facility. Seller agrees to pay Buyer’s costs and expenses (including reasonable attorneys’ fees) associated with its involvement with such CAISO disputes to the extent they relate to CAISO charges payable by Seller with respect to the Facility that Seller has directed Buyer to dispute, except to the extent such dispute arises from Buyer’s failure to perform its duties as Scheduling Coordinator unless such failure is caused by Seller’s failure to perform its obligations under this Agreement.
(f) Terminating Buyer’s Designation as Scheduling Coordinator. At least thirty (30) AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit D - 3
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 File and Resource Data Template. Seller shall provide the data to the CAISO (and to Buyer) that is required for the CAISO’s Master 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. At least once per Contract Year, Seller shall review and confirm that the data provided for the CAISO’s Master File and Resource Data Template (or successor data systems) for this Facility remains consistent with the actual operating characteristics of the Facility and update such data as appropriate. (h) NERC Reliability Standards. Buyer (as Scheduling Coordinator) shall cooperate reasonably with Seller to the extent necessary to enable Seller to comply, and for Seller to demonstrate Seller’s compliance with, NERC reliability standards. This cooperation shall include the provision of information in Buyer’s possession that Buyer (as Scheduling Coordinator) has provided to the CAISO related to the Facility or actions taken by Buyer (as Scheduling Coordinator) related to Seller’s compliance with NERC reliability standards.
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage 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 and all major agreements, contracts, permits, approvals, technical studies, financing agreements and major equipment purchase orders showing the start dates, completion dates, and completion percentages.
6. Summary of activities during the previous calendar quarter or month, as applicable, including any OSHA labor hour reports.
7. Forecast of activities scheduled for the current calendar quarter or month as applicable.
8. Written description about the progress relative to Seller’s Milestones, including whether Seller has met or is on target to meet the Milestones. If Seller has missed any Milestones, a detailed description of Seller’s corrective actions to achieve the missed Milestones and all subsequent Milestones by the Guaranteed Commercial Operation Date.
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 availability projections for the next twelve (12) months.
11. The utilization of union labor by Seller’s principal EPC contractor.
12. Pictures, in sufficient quantity and of appropriate detail, in order to document construction and startup progress of the Facility, the interconnection into the Transmission System and all other interconnection utility services.
13. Any other documentation reasonably requested by Buyer.
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit F - 1
EXHIBIT F
FORM OF MONTHLY FORECAST
Storage Capacity, MW Per Hour – [Insert Month]
1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 Day
1 Day
2 Day
3 Day
4 Day
5 [insert additional rows for each day in the month]
Day
29 Day
30 Day
31 AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit G - 1
EXHIBIT G
[RESERVED]
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage 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 Energy Storage Service Agreement dated [Date] by and between Cormorant Energy Storage, LLC (“Seller”) and Buyer (“Agreement”). All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
As of [Date], Engineer hereby certifies and represents to Buyer the following:
1. The Facility is fully operational, and interconnected and synchronized with the Transmission System in accordance with the Interconnection Agreement.
2. Seller has installed equipment for the Facility with a nameplate capacity of no less than of the Storage Contract Capacity.
3. Seller has commissioned all Facility equipment in accordance with its respective manufacturer’s specifications.
4. Seller has demonstrated functionality of the Facility’s communication systems and automatic generation control (AGC) interface to operate the Facility as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, directed by the Buyer in accordance with the Agreement and/or the CAISO, including through ADS.
5. The 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.
6. Authorization to parallel the Facility was obtained from the Participating Transmission Owner.
7. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff, as applicable.
8. Seller has caused the Facility to be included in the Full Network Model (as defined in the CAISO Tariff) and has the ability to offer Bids into the CAISO Day-Ahead Market and Real-Time Market.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit H - 2
By:
Printed Name:
Title:
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit I - 1
EXHIBIT I
FORM OF INSTALLED CAPACITY CERTIFICATE
This certification (“Certification”) of Installed 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 Energy Storage Service Agreement dated [Date] by and between Cormorant Energy Storage, LLC (“Seller”) and Buyer (“Agreement”). 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 following:
The Storage Capacity Test demonstrated a maximum operating capability that can be sustained for four (4) consecutive hours to discharge electric energy of __ MWAC 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 #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit J - 1
EXHIBIT J
FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of Construction Start Date (“Certification”) is delivered by Cormorant Energy Storage, LLC (“Seller”) to Marin Clean Energy, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated [Date] by and between Seller and Buyer (“Agreement”). All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Seller hereby certifies and represents to Buyer the following:
1. Construction Start (as defined in Exhibit B of the Agreement) has occurred, and a copy of the notice to proceed that Seller issued to its contractor as part of Construction Start is attached hereto;
2. the Construction Start Date occurred on _____________ (the “Construction Start Date”); and
3. the precise Site on which the Facility is located is, which must be within the boundaries of the previously identified Site: _________________________________________ (such description shall amend the description of the Site in Exhibit A of the Agreement).
IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as of the ___ day of ________.
[SELLER ENTITY]
By:
Printed Name:
Title:
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage 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]
Expiration Date:___________
Beneficiary:
Marin Clean Energy
1125 Tamalpais Avenue
San Rafael, CA 94901
Attn: Chief Financial Officer
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 Energy Storage Service Agreement dated as of ______ and as amended (the “Agreement”) between Applicant and Beneficiary. This Letter of Credit shall become effective immediately and shall expire on [Insert Date] 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 valid 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, (b) as a PDF attachment to an email to [bank email address] or (c) facsimile to [bank fax number] confirmed by [email to [bank email address]]. Transmittal by facsimile or email shall be deemed delivered when received.
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.
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit K - 2
We hereby agree with the Beneficiary that all documents presented under and in compliance with the terms of this Letter of Credit, that such drafts 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 overnight courier service that we elect not to extend this Letter of Credit, in which case it will expire on such Expiration Date, or such later date as may be specified in such notice. No presentation made under this Letter of Credit after such Expiration Date (or such later date, if applicable) 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 issued subject to the rules of the ‘International Standby Practices 1998’, International Chamber of Commerce Publication No. 590 (“ISP98”) and, as to matters not addressed by ISP98, shall be governed and construed in accordance with the laws of state of California.
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 delivered (a) via email to [email protected] and (b) followed up by certified letter, overnight courier, or delivered in person to: Attn: Chief Financial Officer, Marin Clean Energy, 1125 Tamalpais Avenue, San Rafael, CA 94901. Only notices to Beneficiary meeting the requirements of this paragraph shall be considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect. [Bank Name]
___________________________
[Insert officer name]
[Insert officer title]
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit K - 3
Exhibit A: Drawing Certificate
(DRAW REQUEST SHOULD BE ON BENEFICIARY’S LETTERHEAD)
[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 Energy Storage Service Agreement dated as of ___________, 20__ (the “Agreement”).
2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________ because a Seller Event of Default (as such term is defined in the Agreement) has occurred or 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 thirty (30) days prior to such Expiration Date.
3. The undersigned is a duly authorized representative of Marin Clean Energy 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 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 #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit L - 1
EXHIBIT L
FORM OF GUARANTY
This Guaranty (this “Guaranty”) is entered into as of [_____] (the “Effective Date”) by and between [Entity name, state of formation, type of entity] (“Guarantor”), and Marin Clean Energy (together with its successors and permitted assigns, “Buyer”).
Recitals
A. Buyer and Cormorant Energy Storage, LLC (“Seller”), entered into that certain Energy Storage Service Agreement (as amended, restated or otherwise modified from time to time, the “ESSA”) dated as of [____], 20__.
B. Guarantor is entering into this Guaranty as Performance Security to secure Seller’s obligations under the ESSA, as required by Section 8.8 of the ESSA.
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 ESSA.
D. Initially capitalized terms used but not defined herein have the meaning set forth in the ESSA.
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 ESSA, including, without limitation, compensation for penalties, the Termination Payment, indemnification payments or other damages, as and when required pursuant to the terms of the ESSA (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 ESSA, 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 ESSA for five (5) Business Days following Seller’s receipt of Buyer’s written notice of such AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit L - 2
failure (the “Demand Notice”), then Buyer may elect to exercise its rights under this Guaranty 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), or (y) replacement Performance Security is provided in an amount and form required by the terms of the ESSA. 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 ESSA, 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 ESSA 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 ESSA or perform its obligations thereunder, (B) lack of due execution, delivery, validity or enforceability, including of the ESSA, or (C) Seller’s inability to pay any Guaranteed Amount or perform its obligations under the ESSA, or
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage 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 ESSA, 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 ESSA, 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 ESSA; (iii) subject to Section 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 Section 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 #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage 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 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 ESSA. 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 #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage 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 #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage 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:____________________________
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit M - 1
EXHIBIT M
FORM OF REPLACEMENT RA NOTICE
This Replacement RA Notice (this “Notice”) is delivered by Cormorant Energy Storage, LLC (“Seller”) to Marin Clean Energy, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Energy Storage Service Agreement dated [Date] by and between Seller and Buyer (“Agreement”). 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 3.3(b) of the Agreement, Seller hereby provides the below Replacement RA product information:
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit M - 2
[SELLER ENTITY]
By:
Its:
Date:
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit N - 1
EXHIBIT N
NOTICES
Cormorant Energy Storage, LLC Marin Clean Energy
All Notices:
Street: 8800 N. Gainey Center Dr. Suite 100
City: Scottsdale, AZ 85258
Attn: General Counsel
Phone: 480-653-8450
Email: [email protected] and
[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: N/A
Federal Tax ID Number:
Reference Numbers:
Duns:
Federal Tax ID Number:
Invoices:
Attn: Settlements
Phone: 480-653-8452
Email: [email protected]
Invoices:
Attn: Power Settlements and Analytics
Phone: (415) 464-6683
Email: [email protected]
Scheduling:
Attn: Asset Management
Phone: 480-653-8452
Email: [email protected]
Scheduling:
Attn: ZGlobal
Phone: (916) 458-4080
Email: [email protected]
Confirmations:
Attn: Asset Management
Phone: 480-653-8452
Email: [email protected]
Confirmations:
Attn: Director of Power Resources
Phone: (415) 464-6685
Email: [email protected]
Payments:
Attn: Settlements
Phone: 480-653-8452
Email: [email protected]
Payments:
Attn: Power Settlements and Analytics
Phone: (415) 464-6683
Email: [email protected]
Wire Transfer: Wire Transfer:
Credit and Collections:
Attn: Settlements
Phone: 480-653-8452
Email: [email protected]
Credit and Collections:
Attn: Chief Financial Officer
Phone: (415) 464-6037
Email: [email protected]
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit N - 2
Cormorant Energy Storage, LLC Marin Clean Energy
With additional Notices of an Event of
Default to:
Attn: Justin Johnson, COO
Phone: 480-653-8450
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]
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage 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 Facility determined by such Storage Capacity Test.
B. Subsequent Storage Capacity Tests. Following the Commercial Operation Date, once each Contract Year Seller will perform a Storage Capacity Test and will give Buyer ten (10) Business Days prior Notice of such test. No more than twice per Contract Year, 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 test or retest of the Storage Capacity Test at any time upon no less than ten (10) 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 ten (10) Business Days’ prior written Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practice).
C. Test Results and Re-Setting of Storage Capacity and Efficiency Rate. No later than five (5) Business Days following any Storage Capacity Test, Seller shall submit a testing report detailing results and findings of the test. The report shall include Facility Meter readings and timestamped data from the site historian verifying the operating conditions and output of the Facility. In accordance with Section 4.9(c) of the Agreement and Part II(I) below, the actual Efficiency Rate and storage capacity 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 Contract Capacity and Efficiency Rate at the beginning of the day following the completion of the test for calculating the Storage Rate 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, the provisions of this Exhibit O, and, to the extent not inconsistent with the foregoing, the operating protocols recommended, required or established by the manufacturer of the Facility. 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). For the avoidance of doubt, a Storage Capacity Test cannot be performed while the Facility is experiencing an outage.
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit O - 2
PART II. REQUIREMENTS APPLICABLE TO ALL STORAGE CAPACITY TESTS.
A. Purpose of Test. Each SCT shall:
(1) Determine an updated Storage Contract Capacity;
(2) Determine the amount of energy required to fully charge the Facility; (3) Determine the Facility charge ramp rate;
(4) Determine the Facility discharge ramp rate;
(5) Determine an updated Efficiency Rate.
B. Test Elements. Each SCT shall include the following test elements:
• The measurement of charging energy at a sustained rate of the Maximum Charging Capacity exclusive of Station Use and Electrical Losses, as measured by the Facility Meter or other mutually agreed meter, that is required to charge the Facility from the Minimum State of Charge up to the Maximum State of Charge at a Stored Energy Level not to exceed the Storage Contract Output on the Cover Sheet (MWh) (“Energy In”); • The measurement of discharging energy at a sustained rate of the Maximum Discharging Capacity exclusive of Station Use and Electrical Losses, as measured by the Facility Meter or other mutually agreed meter, that is discharged from the Facility to the Delivery Point starting from the Maximum State of Charge until the Stored Energy Level reaches zero MWh as indicated by the Facility’s energy management system (“Energy Out”); • Electrical output at Maximum Discharging Capacity (as defined in Exhibit A) at the Facility Meter (MW);
• Electrical input at Maximum Charging Capacity (as defined in Exhibit A) at the Facility Meter (MW);
• Amount of time between the Facility’s electrical output going from zero percent (0%) to ninety-eight percent (98%) of Maximum Discharging Capacity; and
• Amount of time between the Facility’s electrical input going from zero percent (0%) to ninety-eight percent (98%) of Maximum Charging Capacity.
C. Parameters. During each SCT, the following parameters shall be measured and recorded simultaneously for the Facility, at ten (10) minute intervals:
(1) time (minutes);
(2) charging energy (MWh);
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit O - 3
(3) discharging energy (MWh);
(4) Stored Energy Level (MWh).
D. Site Conditions. During each SCT, the following conditions at the Site shall be measured and recorded simultaneously at thirty (30) minute intervals:
(1) Relative humidity (%);
(2) Barometric pressure (inches Hg); and
(3) Ambient air temperature (°F).
E. Test Conditions.
(i) General. At all times during a SCT, the 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, 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.
F. 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 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.
G. 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.A through C, including copies of the raw data taken during the test; (3) the level of Storage Contract Capacity, Energy In, Energy Out, Efficiency Rate, Maximum Charging Capacity, the current charge and discharge ramp AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit O - 4
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.
H. 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.
I. Adjustment to Storage Contract Capacity. The total amount of Energy Out (as reported in Part II.B above) 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 Contract Capacity on the Cover Sheet may have been adjusted (if at all) under this Agreement, multiplied by (ii) four (4) hours, shall be divided by four (4) hours to determine the Storage Contract Capacity, which shall be expressed in MWAC, and shall be the new Storage Contract Capacity in accordance with Section 4.9(c) of the Agreement until updated pursuant to a subsequent Storage Capacity Test.
J. Adjustment to Efficiency Rate. The total amount of Energy Out (as reported in Part II.B above) divided by the total amount of Energy In (as reported in Part II.B above) and expressed as a percentage, shall be the new Efficiency Rate, and shall be used for the calculation of liquidated damages (if any) under Exhibit C until updated pursuant to a subsequent Storage Capacity Test.
Part III. SUPPLEMENTARY STORAGE CAPACITY TEST PROTCOL
A. Conditions Precedent to SCT
• Control System Functionality: The Facility control system shall be successfully configured to receive data from the battery system, exchange distributed AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit O - 5
network protocol 3 data with the Buyer SCADA device, and transfer data to the site data historian for the calculation, recording and archiving of data points. • Communications: Remote Terminal Unit (RTU) testing should be successfully completed prior to SCT. The interface between Buyer’s RTU and the Facility SCADA system should be fully tested and functional prior to starting testing.
This includes verification of data transmission pathway between the Buyer’s RTU and Seller’s control system interface and the ability to record SCADA data.
• Commissioning Checklist: Commissioning checklist shall be successfully completed on all installed facility equipment, including verification that all controls, set points, and instruments of the control system are configured. • The following Commercial Operation tests will be repeated annually:
• PMAX Capacity Test
• Round-Trip Efficiency and Energy Test
B. PMAX Capacity Test
1. Purpose: This test will demonstrate the PMAX and will hold the Facility’s maximum operating level (MW), up to the Storage Contract Capacity, for up to five (5) minutes (“Qualified Power Capacity”).
2. Procedure:
(i) System starting state: The Facility will be in the on-line state with each battery subsystem at 100% usable state of charge (SOC) and at an initial active power level of 0 MW and reactive power level of 0 MVAR.
(ii) Record the Facility active power level at the Facility Meter. (iii) Command the Facility to follow a signal equal to the Facility’s maximum operating level for five (5) minutes.
(iv) Record and store the Facility active power response. Measurements will be made at the point of interconnection (POI) and by the control system with a recording in the Facility historian.
(v) System end state: The Facility will be in the on-line state and at a commanded active power level of 0 MW.
Pass/Fail Criteria
The Facility active power response and the commanded level shall be within ±2% as measured by the sum of values at the POI. The time to full output shall be 4 seconds or AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit O - 6
less. The hold period of such active power value shall be five (5) minutes and recorded in the control system historian.
Passed Failed Date:
Test Performed by:
Test Witnessed by:
Notes/Test Conditions:
________________________________________________________________________ ________________________________________________________________________ C Round-Trip Efficiency and Energy Test
1. The following test demonstrates the updated Efficiency Rate and amount of energy required to fully discharge the Facility (Energy Out). i. The Efficiency Rate is calculated by dividing the Energy Out (as reported in Part II.B above) by the Energy In (as reported in Part II.B above).
2. Procedure:
i. System Starting State: The Facility will be in the on-line state at the Minimum State of Charge.
ii. Record the initial value of the SOC.
iii. Command a real power charge that results in an AC power at the Facility’s Maximum Charging Capacity and continue charging until the earlier of (a) the Facility has reached the Maximum State of Charge or (b) six (6) hours have elapsed since the Facility commenced charging.
iv. Record and store the SOC after the earlier of (a) the Facility has reached Maximum State of Charge or (b) six (6) hours of continuous charging.
v. Record and store the amount of charging energy, measured at the Facility Meter, to go from Minimum State of Charge to Maximum State of Charge. Such data point shall be used for purposes of calculating Energy In.
vi. Following a manufacturer recommended rest period, command a real power charge until the Facility has reached Maximum State of Charge. Then, command a real power discharge that results in an AC power output at the Facility’s Maximum Discharging Capacity and maintain the discharging state until the earlier of (a) the Facility has reached Minimum State of Charge, or (b) four (4) consecutive hours. The Parties acknowledge that the duration of the discharge AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit O - 7
at the Maximum Discharging Capacity may be less than four (4) hours due to degradation.
vii. Record and store the SOC after four (4) hours of continuous discharge.
viii. Record and store the discharging energy as measured at the Facility Meter. Such data point shall be used for purposes of calculating Energy Out.
ix. If the Facility has not reached Minimum State of Charge, continue discharging the Facility until it reaches Minimum State of Charge.
Pass/Fail Criteria
The measured Efficiency Rate is greater than or equal to the Guaranteed Efficiency Rate. The Energy Out at the Commercial Operation Date Storage Capacity Test is greater than or equal to the Storage Contract Output, but may be lower than the Storage Contract Output in subsequent Storage Capacity Tests
Passed Failed Date:
Test Performed by:
Test Witnessed by:
Notes/Test Conditions:
________________________________________________________________________ ________________________________________________________________________ AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit P - 1
EXHIBIT P
STORAGE FACILITY AVAILABILITY
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC
Exhibit P - 2
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit Q - 1
EXHIBIT Q
OPERATING RESTRICTIONS
The Parties will develop and finalize the Operating Restrictions prior to the Commercial Operation Date, provided that the Operating Restrictions (i) may not be materially more restrictive of the operation of the Facility than as set forth below, unless agreed to by Buyer in writing, (ii) will, at a minimum, include the rules, requirements and procedures set forth in this Exhibit Q, (iii) will include protocols and parameters for Seller’s operation of the Facility in the absence of Charging Notices, Discharging Notices or other similar instructions from Buyer relating to the use of the Facility, and (iv) may include Facility Scheduling, Operating Restrictions and communications protocols.
Maximum Stored Energy Level: 520 MWh at COD; Storage Contract Output thereafter
Minimum Stored Energy Level: 0 MWh
Maximum Charging Capacity: -130 MW
Minimum Charging Capacity: 1 MW
Maximum Discharging Capacity: 130 MW
Minimum Discharging Capacity: 1 MW
Maximum State of Charge (SOC): 100%
Minimum State of Charge (SOC): 0%
Ramp Rate Range: Discharging: 0 MW/minute to 999
MW/minute
Charging: 0 MW/minute to -999 MW/minute
Annual Cycles: Equal to the Storage Contract Capacity for such Contract Year multiplied by the product
of (i) four (4) hours and (ii) three hundred
sixty-five (365)
Daily Dispatch Limits: Equal to the Storage Contract Capacity for such day multiplied by four (4) hours
Maximum Time at Minimum Stored
Energy Level:
No limit on Maximum Time at Minimum
Stored Energy Level when grid power is
available to the Facility
Grid Charging of Facility: Yes
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit Q - 2
Other Operating Limits: Seller is obligated to provide voltage support under the Interconnection Agreement.
Temperature Derates: Maximum Charging Capacity and Maximum Discharging Capacity set forth above are
based on operating temperature range of -
30°C to 50°C (-22F to 122F). The Facility
cannot operate outside of the operating
temperature range.
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit R - 1
EXHIBIT R
METERING DIAGRAM
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC
Exhibit S - 1
EXHIBIT S
OTHER SELLER COMMITMENTS
to be paid to Buyer with sixty (60) days of the
Commercial Operation Date and used for community benefits (apprenticeships, scholarships, food programs, school programs, open space preservation, parks, etc.) or, subject to the further agreement of Buyer and Seller prior to such date, a community benefits package with a value of (which may include apprenticeships, scholarships,
food programs, school programs, open space preservation, parks, etc., or other similar program(s) providing community benefits) intended to make a tangible impact on the community.
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit T - 1
EXHIBIT T
DIVERSITY REPORTING
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit T - 2
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit T - 3
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit T - 4
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit T - 5
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC Exhibit T - 6
AI #12_Att. A: Energy Storage Agrmnt with Cormorant Energy Storage LLC 1 MCE Technical Committee| December 1, 2023
Energy Storage Service Agreement with
Cormorant Energy Storage, LLC
AI #12_Att. B: Cormorant Overview Presentation
Overview of
Today’s Presentation
2 • Open Season Overview
• Cormorant Energy Storage, LLC – Project Overview
• Recommendation
• Q/A
AI #12_Att. B: Cormorant Overview Presentation
Open Season
2023 Overview
3 • Goals
– Meet Integrated Resource Planning (IRP) targets for renewable energy and energy storage
– Add Resource Adequacy (RA) supply to the portfolio
– 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 • Product Types
– Renewable Product Content Category 1 energy (PCC1)
– Paired & stand-alone energy storage
AI #12_Att. B: Cormorant Overview Presentation
The Path to MTR Compliance
4 Bucket Requirements MCE’s
Obligation Online Date Eligible Resource Types Resources for MCE's Compliance Generic • Resource Adequacy (RA) 353 MW
Part 1 - 8/23
Part 2 - 6/24
Part 3 - 6/26
Part 4 - 6/27
• PV+ 4 Hour Storage
• Stand-Alone Storage
• Wind
• Geo or Biomass
• Long-Term Imports
• Daggett - 8/23
• Humidor - 4/24
• Cormorant (Arevon)- 6/26
• Corby (NextEra) - 6/27
DCPP
Replacement
(5 Hour)
• Zero emissions or RPS
• 5MWh / 1 MW (HE18 - HE22) 72 MW 6/1/25
• PV + Storage
• Geo/Bio/Landfill Gas
• Demand Response
• Golden Fields - 6/25
Long Duration
Storage
(8 Hour)
• 8 Hours - full capacity
discharge 29 MW 6/1/28 • Stand-Alone Storage • Key (NextEra) - 4/27 Clean-Firm
(Geo/Bio)
• Firm
• 80 % capacity factor
• Not weather dep or use
limited
• Zero emissions or RPS
29 MW 6/1/28 • Geothermal
• Biomass/Landfill Gas
• Humboldt House - 6/25
• Geysers - 6/25
AI #12_Att. B: Cormorant Overview Presentation
Project Overview
5 • Stand-alone battery
energy storage project
located in San Mateo
County, CA
• 130 MW / 4-hour
discharge capacity
• Owned and operated by
Arevon Energy
Fifth Standard Energy Storage
Fresno County, CA
AI #12_Att. B: Cormorant Overview Presentation
• Full-toll contract
includes energy, RA
capacity and ancillary
services
• Online date: 6/1/2026
• 15-year term
• No credit/collateral
obligations for MCE
6 Need new map
AI #12_Att. B: Cormorant Overview Presentation
Notable
Terms &
Conditions
• Financial incentives for
performance
• Union labor requirement
• Security deposit to ensure
milestones are met
• Seller would make a one-time
contribution of up to $500,000 to
community benefit initiatives
• RA delivery guarantee
• Fixed price over the contract term
with no annual escalation
7 AI #12_Att. B: Cormorant Overview Presentation
Recommendation
8 Approve:
Energy Storage Service Agreement between
MCE and Cormorant Energy Storage, LLC
Rationale:
• The project type, size, specifications and commercial operation date fit the requirements detailed in the CPUC MTR mandated procurement order. • Project is at a mature stage of development and will be constructed by a sophisticated counterparty with a successful track record. • Full toll battery project provides additional benefits including portfolio balancing and flexibility for hourly accounting.
• Procuring now provides certainty in an uncertain market for resource adequacy.
AI #12_Att. B: Cormorant Overview Presentation
Thank You!
Paul Krebs
Power Procurement Manager
[email protected]
9 AI #12_Att. B: Cormorant Overview Presentation