AGREEMENT BETWEEN THE PENINSULA CLEAN ENERGY AUTHORITY AND
MAHER ACCOUNTANCY
This Agreement is entered into this 1
st day of July 2022, by and between the Peninsula Clean Energy Authority, a joint powers authority of the state of California, hereinafter called “PCEA” and Maher Accountancy (a California Corporation), hereinafter called “Contractor.” * * *
Whereas, pursuant to Section 6508 of the Joint Exercise of Powers Act, PCEA may contract with independent contractors for the furnishing of services to or for PCEA; and Whereas, it is necessary and desirable that Contractor be retained for the purpose of accounting management services.
Now, therefore, it is agreed by the parties to this Agreement as follows:
1. Exhibits and Attachments
The following exhibits and attachments are attached to this Agreement and incorporated into this Agreement by this reference:
Exhibit A—Services
Exhibit B—Payments and Rates
Services to be performed by Contractor
In consideration of the payments set forth in this Agreement and in Exhibit B, Contractor shall perform services for PCEA in accordance with the terms, conditions, and specifications set forth in this Agreement and in Exhibit A.
2. Payments
In consideration of the services provided by Contractor in accordance with all terms, conditions, and specifications set forth in this Agreement and in Exhibit A, PCEA shall make payment to Contractor based on the rates and in the manner specified in Exhibit B. PCEA reserves the right to withhold payment if PCEA determines that the quantity or quality of the work performed is unacceptable. In the event that the PCEA makes any advance payments, Contractor agrees to refund any amounts in excess of the amount owed by the PCEA at the time of contract termination or expiration.
3. Term
Subject to compliance with all terms and conditions, the term of this Agreement shall be from July 1, 2022, through June 30, 2023.
4. Termination; Availability of Funds
This Agreement may be terminated by Contractor or by the Chief Executive Officer of the Peninsula Clean Energy Authority or his/her designee at any time without a requirement of good cause upon thirty (30) days’ advance written notice to the other party. Subject to availability of funding, Contractor shall be entitled to receive payment for work/services provided prior to termination of the Agreement. Such payment shall be that prorated portion of the full payment determined by comparing the work/services actually completed to the work/services required by the Agreement. 172
PCEA may terminate this Agreement, or a portion of the services referenced in the Attachments and Exhibits based upon the unavailability of Federal, State, or PCEA funds by providing written notice to Contractor as soon as is reasonably possible after PCEA learns of said unavailability of outside funding.
5. Contract Materials
At the end of this Agreement, or in the event of termination, all finished or unfinished documents, data, studies, maps, photographs, reports, and other written materials (collectively referred to as “contract materials”) prepared by Contractor under this Agreement shall become the property of PCEA and shall be promptly delivered to PCEA. Upon termination, Contractor may make and retain a copy of such contract materials if permitted by law.
6. Relationship of Parties
Contractor agrees and understands that the work/services performed under this Agreement are performed as an independent contractor and not as an employee of PCEA and that neither Contractor nor its employees acquire any of the rights, privileges, powers, or advantages of PCEA employees.
7. Hold Harmless
a. General Hold Harmless
Contractor shall indemnify and save harmless PCEA and its officers, agents, employees, and servants from all claims, suits, or actions of every name, kind, and description resulting from this Agreement, the performance of any work or services required of Contractor under this Agreement, or payments made pursuant to this Agreement brought for, or on account of, any of the following:
(A) injuries to or death of any person, including Contractor or its employees/officers/agents; (B) damage to any property of any kind whatsoever and to whomsoever belonging; (C) any other loss or cost, however, Contractor’s obligation to indemnify and hold harmless pursuant to this section shall be limited to the extent Contractor has been found in a court of competent jurisdiction to be solely liable by reason of its own negligence or willful misconduct.
The duty of Contractor to indemnify and save harmless as set forth by this Section shall include the duty to defend as set forth in Section 2778 of the California Civil Code.
8. Assignability and Subcontracting
Contractor shall not assign this Agreement or any portion of it to a third party or subcontract with a third party to provide services required by Contractor under this Agreement without the prior written consent of PCEA. Any such assignment or subcontract without PCEA’s prior written consent shall give PCEA the right to automatically and immediately terminate this Agreement without penalty or advance notice.
9. Payment of Permits/Licenses
Contractor bears responsibility to obtain any license, permit, or approval required from any agency for work/services to be performed under this Agreement at Contractor’s own expense prior to commencement of said work/services. Failure to do so will result in forfeit of any right to compensation under this Agreement.
10. Insurance
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a. General Requirements
Contractor shall not commence work or be required to commence work under this Agreement unless and until all insurance required under this Section has been obtained and such insurance has been approved by PCEA, and Contractor shall use diligence to obtain such insurance and to obtain such approval.
Contractor shall furnish PCEA with certificates of insurance evidencing the required coverage, and there shall be a specific contractual liability endorsement extending Contractor’s coverage to include the contractual liability assumed by Contractor pursuant to this Agreement. These certificates shall specify or be endorsed to provide that thirty (30) days’ notice must be given, in writing, to PCEA of any pending change in the limits of liability or of any cancellation or modification of the policy. b. Workers’ Compensation and Employer’s Liability Insurance Contractor shall have in effect during the entire term of this Agreement workers’ compensation and employer’s liability insurance providing full statutory coverage. In signing this Agreement, Contractor certifies, as required by Section 1861 of the California Labor Code, that (a) it is aware of the provisions of Section 3700 of the California Labor Code, which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of the Labor Code, and (b) it will comply with such provisions before commencing the performance of work under this Agreement.
c. Liability Insurance
Contractor shall take out and maintain during the term of this Agreement such bodily injury liability and property damage liability insurance as shall protect Contractor and all of its employees/officers/agents while performing work covered by this Agreement from any and all claims for damages for bodily injury, including accidental death, as well as any and all claims for property damage which may arise from Contractor’s operations under this Agreement, whether such operations be by Contractor, any subcontractor, anyone directly or indirectly employed by either of them, or an agent of either of them.
Such insurance shall be combined single limit bodily injury and property damage for each occurrence and shall not be less than the amounts specified below:
☒ Comprehensive General Liability… $1,000,000
(Applies to all agreements)
☒ Motor Vehicle Liability Insurance… $1,000,000
(To be checked if motor vehicle used in performing services) ☐ Professional Liability………………. $1,000,000
(To be checked if Contractor is a licensed professional) PCEA and its officers, agents, employees, and servants shall be named as additional insured on any such policies of insurance, which shall also contain a provision that (a) the insurance afforded thereby to PCEA and its officers, agents, employees, and servants shall be primary insurance to the full limits of liability of the policy and (b) if the PCEA or its officers, agents, employees, and servants have other insurance against the loss covered by such a policy, such other insurance shall be excess insurance only. 174
In the event of the breach of any provision of this Section, or in the event any notice is received which indicates any required insurance coverage will be diminished or canceled, PCEA, at its option, may, notwithstanding any other provision of this Agreement to the contrary, immediately declare a material breach of this Agreement and suspend all further work and payment pursuant to this Agreement.
11. Compliance With Laws
All services to be performed by Contractor pursuant to this Agreement shall be performed in accordance with all applicable Federal, State, County, and municipal laws, ordinances, and regulations, including but not limited to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Federal Regulations promulgated thereunder, as amended (if applicable), the Business Associate requirements set forth in Attachment H (if attached), the Americans with Disabilities Act of 1990, as amended, and Section 504 of the Rehabilitation Act of 1973, which prohibits discrimination on the basis of disability in programs and activities receiving any Federal or County financial assistance. Such services shall also be performed in accordance with all applicable ordinances and regulations, including but not limited to appropriate licensure, certification regulations, provisions pertaining to confidentiality of records, and applicable quality assurance regulations. In the event of a conflict between the terms of this Agreement and any applicable State, Federal, County, or municipal law or regulation, the requirements of the applicable law or regulation will take precedence over the requirements set forth in this Agreement.
Contractor will timely and accurately complete, sign, and submit all necessary documentation of compliance.
12. Non-Discrimination and Other Requirements
a. General Non-discrimination
No person shall be denied any services provided pursuant to this Agreement (except as limited by the scope of services) on the grounds of race, color, national origin, ancestry, age, disability (physical or mental), sex, sexual orientation, gender identity, marital or domestic partner status, religion, political beliefs or affiliation, familial or parental status (including pregnancy), medical condition (cancer-related), military service, or genetic information.
b. Equal Employment Opportunity
Contractor shall ensure equal employment opportunity based on objective standards of recruitment, classification, selection, promotion, compensation, performance evaluation, and management relations for all employees under this Agreement. Contractor’s equal employment policies shall be made available to PCEA upon request.
c. Section 504 of the Rehabilitation Act of 1973
Contractor shall comply with Section 504 of the Rehabilitation Act of 1973, as amended, which provides that no otherwise qualified individual with a disability shall, solely by reason of a disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination in the performance of any services this Agreement. This Section applies only to contractors who are providing services to members of the public under this Agreement.
d. Compliance with County’s Equal Benefits Ordinance
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With respect to the provision of benefits to its employees, Contractor shall comply with Chapter 2.84 of the County Ordinance Code, which prohibits contractors from discriminating in the provision of employee benefits between an employee with a domestic partner and an employee with a spouse. In order to meet the requirements of Chapter 2.84, Contractor must certify which of the following statements is/are accurate:
☒ Contractor complies with Chapter 2.84 by offering the same benefits to its employees with spouses and its employees with domestic partners.
e. Discrimination Against Individuals with Disabilities The nondiscrimination requirements of 41 C.F.R. 60-741.5(a) are incorporated into this Agreement as if fully set forth here, and Contractor and any subcontractor shall abide by the requirements of 41 C.F.R. 60–741.5(a). This regulation prohibits discrimination against qualified individuals on the basis of disability and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities.
f. History of Discrimination
Contractor must check one of the two following options, and by executing this Agreement, Contractor certifies that the option selected is accurate:
☒ No finding of discrimination has been issued in the past 365 days against Contractor by the Equal Employment Opportunity Commission, Fair Employment and Housing Commission, or any other investigative entity.
g. Reporting; Violation of Non-discrimination Provisions Contractor shall report to the Chief Executive Officer of PCEA the filing in any court or with any administrative agency of any complaint or allegation of discrimination on any of the bases prohibited by this Section of the Agreement or Section 11, above. Such duty shall include reporting of the filing of any and all charges with the Equal Employment Opportunity Commission, the Fair Employment and Housing Commission, or any other entity charged with the investigation or adjudication of allegations covered by this subsection within 30 days of such filing, provided that within such 30 days such entity has not notified Contractor that such charges are dismissed or otherwise unfounded. Such notification shall include a general description of the circumstances involved and a general description of the kind of discrimination alleged (for example, gender-, sexual orientation-, religion-, or race-based discrimination).
Violation of the non-discrimination provisions of this Agreement shall be considered a breach of this Agreement and subject the Contractor to penalties, to be determined by the Chief Executive Officer, including but not limited to the following:
i. termination of this Agreement;
ii. disqualification of the Contractor from being considered for or being awarded a PCEA contract for a period of up to 3 years;
iii. liquidated damages of $2,500 per violation; and/or iv. imposition of other appropriate contractual and civil remedies and sanctions, as determined by the Chief Executive Officer.
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To effectuate the provisions of this Section, the Chief Executive Officer shall have the authority to offset all or any portion of the amount described in this Section against amounts due to Contractor under this Agreement or any other agreement between Contractor and PCEA.
13. Compliance with County Employee Jury Service Ordinance Contractor shall comply with Chapter 2.85 of the County’s Ordinance Code, which states that Contractor shall have and adhere to a written policy providing that its employees, to the extent they are full-time employees and live in San Mateo County, shall receive from the Contractor, on an annual basis, no fewer than five days of regular pay for jury service in San Mateo County, with jury pay being provided only for each day of actual jury service. The policy may provide that such employees deposit any fees received for such jury service with Contractor or that the Contractor may deduct from an employee’s regular pay the fees received for jury service in San Mateo County. By signing this Agreement, Contractor certifies that it has and adheres to a policy consistent with Chapter 2.85. For purposes of this Section, if Contractor has no employees in San Mateo County, it is sufficient for Contractor to provide the following written statement to County: “For purposes of San Mateo County’s jury service ordinance, Contractor certifies that it has no full-time employees who live in San Mateo County. To the extent that it hires any such employees during the term of its Agreement with San Mateo County, Contractor shall adopt a policy that complies with Chapter 2.85 of the County’s Ordinance Code.” The requirements of Chapter 2.85 do not apply if this Agreement’s total value listed Section 2, above, is less than one-hundred thousand dollars ($100,000), but Contractor acknowledges that Chapter 2.85’s requirements will apply if this Agreement is amended such that its total value meets or exceeds that threshold amount.
14. Retention of Records; Right to Monitor and Audit
(a) Contractor shall maintain all required records relating to services provided under this Agreement for three (3) years after PCEA makes final payment and all other pending matters are closed, and Contractor shall be subject to the examination and/or audit by PCEA, a Federal grantor agency, and the State of California.
(b) Contractor shall comply with all program and fiscal reporting requirements set forth by applicable Federal, State, and local agencies and as required by PCEA. (c) Contractor agrees upon reasonable notice to provide to PCEA, to any Federal or State department having monitoring or review authority, to PCEA’s authorized representative, and/or to any of their respective audit agencies access to and the right to examine all records and documents necessary to determine compliance with relevant Federal, State, and local statutes, rules, and regulations, to determine compliance with this Agreement, and to evaluate the quality, appropriateness, and timeliness of services performed.
15. Merger Clause; Amendments
This Agreement, including the Exhibits and Attachments attached to this Agreement and incorporated by reference, constitutes the sole Agreement of the parties to this Agreement and correctly states the rights, duties, and obligations of each party as of this document’s date. In the event that any term, condition, provision, requirement, or specification set forth in the body of this Agreement conflicts with or is inconsistent with any term, condition, provision, requirement, or specification in any Exhibit and/or Attachment to this Agreement, the provisions of the body of the Agreement shall prevail. Any prior agreement, promises, negotiations, or representations between the parties not expressly stated in this 177
document are not binding. All subsequent modifications or amendments shall be in writing and signed by the parties.
16. Controlling Law; Venue
The validity of this Agreement and of its terms, the rights and duties of the parties under this Agreement, the interpretation of this Agreement, the performance of this Agreement, and any other dispute of any nature arising out of this Agreement shall be governed by the laws of the State of California without regard to its choice of law or conflict of law rules. Any dispute arising out of this Agreement shall be venued either in the San Mateo County Superior Court or in the United States District Court for the Northern District of California.
17. Notices
Any notice, request, demand, or other communication required or permitted under this Agreement shall be deemed to be properly given when both: (1) transmitted via facsimile to the telephone number listed below or transmitted via email to the email address listed below; and (2) sent to the physical address listed below by either being deposited in the United States mail, postage prepaid, or deposited for overnight delivery, charges prepaid, with an established overnight courier that provides a tracking number showing confirmation of receipt.
In the case of PCEA, to:
Name/Title: Jan Pepper, Chief Executive Officer
Address: 2075 Woodside Road, Redwood City, CA 94061
Telephone: 650-260-0100
Email: [email protected]
In the case of Contractor, to:
Name/Title: Michael Maher, Vice President
Address: 1101 Fifth Ave, Ste 200, San Rafael, CA 94901
Telephone: 415-459-1249
Email: [email protected]
18. Electronic Signature
If both PCEA and Contractor wish to permit this Agreement and future documents relating to this Agreement to be digitally signed in accordance with California law, both boxes below must be checked.
Any party that agrees to allow digital signature of this Agreement may revoke such agreement at any time in relation to all future documents by providing notice pursuant to this Agreement.
For PCEA: ☒ If this box is checked by PCEA, PCEA consents to the use of electronic signatures in relation to this Agreement.
For Contractor: ☒ If this box is checked by Contractor, Contractor consents to the use of electronic signatures in relation to this Agreement.
19. No Recourse Against PCEA’s Member Agencies
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Contractor acknowledges and agrees that PCEA is a Joint Powers Authority, which is a public agency separate and distinct from its member agencies. All debts, liabilities, or obligations undertaken by PCEA in connection with this Agreement are undertaken solely by PCEA and are not debts, liabilities, or obligations of its member agencies. Contractor waives any recourse against PCEA’s member agencies. * * *
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In witness of and in agreement with this Agreement’s terms, the parties, by their duly authorized representatives, affix their respective signatures:
PENINSULA CLEAN ENERGY AUTHORITY
By:
CEO, Peninsula Clean Energy Authority
Date:
Maher Accountancy
Contractor’s Signature
Date:
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Exhibit A
In consideration of the payments set forth in Exhibit B, Contractor shall provide the following services:
The proposed contract term covers July 1, 2022 through June 30, 2023. In no event will the cost to PCE during the contract term exceed the maximum sum of $243,750.
Operational Assistance:
1. Assist in review of operating budget in collaboration with management and technical consultants.
2. Maintain the general ledger by:
a. Posting billings, accrued revenue, cash receipts, accounts payable, cash disbursements, payroll, accrued expenses, etc.
b. Prepare or maintain the following monthly analyses regarding general ledger account balances:
i. Reconciling to statements from PCE’s financial institution for cash activity and balances,
ii. Reconcile customer data manager reports of customer activity and AR, iii. Estimated user fees earned but not billed as of the end of the reporting period, iv. Schedule of depreciation of capital assets,
v. Aged schedule of accounts payable and
vi. Schedules of details regarding all remaining balance sheet accounts.
3. Manage accounts payable: Maher Accountancy utilizes a cloud-based accounts payable document management system to provide for documentation of management review, proper segregation of duties, and access to source data. We ensure that required authorization is documented and that account coding is correct. Your staff then authorizes the release of payment by an independent payment service in order to provide an additional safeguard.
4. Assist with compliance with fiscal provisions of service vendor contracts: Before submitting vendor invoices for management approval, Maher Accountancy verifies that a vendor invoice with contract provisions regarding time periods, rates and financial limits.
5. Monitor expenditure budget compliance: Before submitting vendor invoices for management approval, Maher Accountancy verifies that there is budget available and will make timely suggestions for any necessary budget amendments.
6. Provide periodic and year-to-date accrual basis financial statements with comparison to projections.
7. Provide modified accrual basis financial statements with comparison to budget. (Government agencies are accustomed to budgeting inflows and outflows of capital and debt items not included in accrual basis operating statements.)
8. Process payroll, including managing and reporting payroll taxes.
9. Filing annual informational returns (Forms 1099/1096).
10. Assist in the presentation of financial information to Finance Committee and answer questions from time to time, as needed.
11. Assist the treasury function.
12. Provide services to meet the requirements of applicable laws and regulations relating to the provisions of accounting services for PCE.
13. File various compliance reports for state and local agencies, such as user taxes, energy surcharges, and state controller reports.
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14. Monthly Portal
a. Provide access to unified web portal for professional services contract management and review. (unlimited PCE users) for a cost of $1,500 per month b. Provide granular security/access based on department. c. Maintain listing of open and recently closed contracts, documents and basic meta data as available from accounting system or Bill.com.
d. Track Actual spend against commitments and report on available balances. e. Maher will maintain the data, but ongoing accuracy will require cooperation from vendor relationship managers
i. PCE will timely provide Maher with contracts and contract amendments ii. PCE will review Maher’s input of the contract data into the portal 182
Exhibit B
In consideration of the services provided by Contractor described in Exhibit A and subject to the terms of the Agreement, PCEA shall pay Contractor based on the following fee schedule and terms:
Description of Service Frequency Fee
A. Operational Assistance Monthly $19,000
B. Assist with annual financial statement preparation as needed, including correspondence with independent
auditor
Annual $15,750
Reimbursable Expenses:
Administrative, overhead, secretarial time or overtime, word processing, photocopying, in house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses.
Bill payment fees for the cloud-based accounts payable system will be borne by the PCEA with no additional mark-up. Based on recent history, the fees related to this are not expected to exceed Five Thousand Dollars ($5,000) annually.
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PENINSULA CLEAN ENERGY AUTHORITY
JPA Board Correspondence
DATE: July 21, 2022
BOARD MEETING DATE: July 28, 2022
SPECIAL NOTICE/HEARING: None
VOTE REQUIRED: None
TO: Honorable Peninsula Clean Energy Authority (PCEA) Board of Directors FROM: Jan Pepper, Chief Executive Officer
SUBJECT: CEO Report
REPORT
Staff Updates
We have had successful recruitments for the following positions:
• Chief Financial Officer – Kristina Alagar Cordero will be joining us effective July 25 • Power Resources Manager – Jeffrey Wright will be joining us effective August 31 • Senior Renewable Energy Analyst – Moya Enright will be joining us on September 1 Recruitments
We are currently recruiting for the following open positions. The job descriptions can be found on the website:
Regulatory Compliance Analyst
Electric Vehicles Associate Programs Manager
Human Resources Manager
Director of Power Resources
Strategic Accounts Manager
Inflation Adjustment for PCE Staff
I want to share with the board an email sent to Staff on 7/14:
“We will be providing a 4.5% inflation adjustment to salary for all Peninsula Clean Energy employees who were employed as of January 1, 2022, and this adjustment will be effective starting July 1, 2022. This increase will be reflected starting with the 184
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paycheck covering the period July 1 to July 15. [Note: This has changed and will be reflected starting in the paycheck covering the period July 16 to July 31, but will be retroactive to July 1.] This is not a bonus nor a cost-of-living adjustment program that will be repeated every year. This is a one-time salary adjustment reflecting the extraordinary inflation that has occurred during this last year.
We have reviewed the inflation data for the last year. The Consumer Price Index (CPI) over the last year for the US for “all items” rose 9.1% over the last twelve months, the largest 12-month increase since November 1981. The CPI for “all items less food and energy” rose 5.9% over the last 12 months. Looking at the San Francisco Bay Area, the CPI for “all items” rose 6.8% over the last year. The index for “all items less food and energy” in the SF Bay Area increased 4.4% over the last year.
We have also surveyed other CCAs regarding whether they are providing inflation adjustments to their staff. Some other CCAs are also instituting cost-of-living-adjustments as well. In northern California these include VCE (5.0%), SJCE (4.5%), CPSF (5.25%), and EBCE (3.5%). The proposal of 4.5% for Peninsula is in the middle of what others are doing in northern California.”
I have discussed this increase with Rick DeGolia and Donna Colson, the PCE Board Chair and Vice Chair and they are in support of this inflation adjustment. Their support is based on the understanding that salary adjustments during each staff member’s annual performance evaluation during this year will be based solely on merit or promotion, without inclusion of additional inflation adjustments.
All-Staff In-Person Meeting
We held our second quarterly all-staff in-person on July 12 at an outside venue at Allied Arts in Menlo Park. It was wonderful to see everyone in person again! We spent time sharing updates from different teams. We then mixed up our staff into groups of six, with people from different teams in each group, to participate in a scenario planning exercise.
This exercise considered: 1) what driving forces could impact our industry in 2027; 2) how these could affect the world / US, California, and San Mateo County / Los Banos; 3) what kinds of market challenges and opportunities these present to Peninsula Clean Energy; and 4) what actions we could take now to prepare for such a scenario. This provided an opportunity for everyone to think broadly about our industry and our organization, as well as a chance to brainstorm with fellow staff members.
Update on the Wright Solar Storage Project
At the May 26, 2022 Peninsula Clean Energy Board meeting, you approved an amendment to the Wright Solar Power Purchase Agreement to add an 80 MW / 320 MWh battery storage system to this project. The 200 MW solar project started operating on January 2, 2020, with the storage project scheduled to start operation on December 31, 2023. After your approval, we sent this amendment to the counterparty, Wright Solar Park LLC, which is operated by Clenera, for them to execute this amendment.
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On July 13, I received a call from Jason Ellsworth, the CEO of Clenera, informing us that they would not be executing this amendment. These are the reasons why:
• The ultimate parent of Wright Solar Park LLC is KKR
• KKR has decided not to proceed with the Wright battery storage project • KKR is open to selling the Wright Solar project
• If sold, the buying party may be interested in adding battery storage to this project • While Clenera is interested in buying the project, there are foreign investment complexities associated with the Wright project that make that purchase unlikely • Clenera is exploring possibilities with other parties that might invest in the project, but unless it is sold to another party, the battery storage project cannot proceed.
Clearly we at Peninsula Clean Energy are extremely disappointed with this outcome and are hopeful that another party will purchase this project so that we can proceed with adding energy storage to this facility.
Presentations
We have started providing update presentations on what’s happening at Peninsula Clean Energy to various city councils:
• On June 21, I made a presentation to the Half Moon Bay City Council. • On July 25, I will be making a presentation to the Colma City Council.
On July 20, State Senator Josh Becker presented a framed resolution signed by Senator Becker and Assembly Members Mullin, Ting, and Berman, congratulating Peninsula Clean Energy on providing 5 years of electric generation service to San Mateo County. The presentation was made at County Center, and was attended by State Senator Becker, County Supervisors Dave Pine and Carole Groom, and myself.
Impact of COVID-19 on PCE Load
Attached to this report are summary graphs of the impact of COVID-19 on Peninsula Clean Energy’s load. The first graph, “Monthly Load”, shows the change in load on a monthly basis from July 2020 through June 2022. Monthly load is continuing to increase.
We saw a 2% decrease in Peninsula Clean Energy’s load in January-April 2022 compared to January-April 2021, however there was a 2% increase in PCE’s overall load in May 2022 compared to May 2021 followed by a 5% increase in PCE’s overall load in June 2022 compared to June 2021. Also continuing the same pattern as reported last month, the second graph, “Monthly Load Changes by Customer Class”, shows that industrial and residential load was lower in January-April 2022 compared to the same months in 2021. Industrial load continues to stay lower in May and June 2022 compared to May and June 2021. However residential load has started showing an increase in June 2022 compared to June 2021. Commercial load was higher in January-June 2022 compared to January-June 2021. The third graph, “Load Shapes (PCE)”, shows the change overall in our load on an hourly basis. June 2022 load was higher than the 186
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comparable 2020-2021 loads in all hours. Thank you to Mehdi Shahriari on our Power Resources team for compiling these graphs.
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Reach Codes
Below is the table showing the status of Reach Code adoption by Peninsula Clean Energy jurisdictions. There have been no changes since last month. 188
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Other Meetings and Events Attended by CEO
Attended weekly and monthly CalCCA Board and Executive Committee meetings.
Participated in SV5 (formerly called MAG5) meetings.
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PENINSULA CLEAN ENERGY AUTHORITY
JPA Board Correspondence
DATE: July 15, 2022
BOARD MEETING DATE: July 28, 2022
SPECIAL NOTICE/HEARING: None
VOTE REQUIRED: None
TO: Honorable Peninsula Clean Energy Authority Board of Directors FROM: Jan Pepper, CEO
Shayna Barnes, Operations Specialist
Kirsten Andrews-Schwind, Senior Manager of Community Relations SUBJECT: Diversity, Equity, Accessibility, and Inclusion (DEAI) Project Status Update BACKGROUND:
In July 2020, the Citizens Advisory Committee (CAC) formed an Equity Working Group with the primary task of “ensur[ing] equity is a priority across all working groups and built into PCE strategic priorities.” The CAC’s equity working group created a draft equity statement and brought the draft statement to Peninsula Clean Energy’s Board of Directors at their January 28, 2021 meeting. The draft equity statement is provided below:
In light of the community’s focus on anti-racism and the Black Lives Matter Movement following the death of George Floyd in May of 2020 and other continuing instances of systemic racism and institutional violence against black people, the Peninsula Clean Energy CAC Equity Working Group has worked over the past few months on a statement that would embody the commitment of the organization to ensure equity and inclusion in their work. The working group recognizes that there are many forms of discrimination that impact people from different backgrounds but the growing awareness of significant violence and discrimination against people of color (BIPOC) is our current focus, and we are committed to developing a framework that will eventually address discrimination in all its forms.
Peninsula Clean Energy Citizens Advisory Committee Draft Statement on Equity and Inclusion
o Peninsula Clean Energy commits to making anti-racism top of mind during decision making.
o Will follow best practices in hiring, vendor selection and project selection o Will use a racial equity lens when developing the community impact report o Develop a means of tracking revenue and formulating a mechanism (qualitative and quantitative) that ensures accountability.
o Current board goals - 20% of programs funding going to low-income communities (working on definition)
o Pursue equity in energy generation and programs
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o Low-income households, as well as Black, Hispanic, and Native American households, pay a much larger share of their income on energy bills, straining budgets and putting them at heightened risk of utility shutoffs during the COVID-19 pandemic and recession (https://www.aceee.org/press-release/2020/09/report-low-income-households-communities-color-face-high-energy-burden) At the Board of Directors Meeting on January 28, 2021, the Board accepted the above draft equity statement and formed a Diversity, Equity, Accessibility, and Inclusion Subcommittee to build on the statement and create a DEAI organizational statement/policy and action plan for Peninsula Clean Energy. Board members on this subcommittee include Directors Donna Colson, Michael Smith, Sam Hindi, Carlos Romero, and Roderick Daus-Magbual.
Senate Bill 255 and Utility Supplier Diversity
In addition to the CAC Draft Statement on Equity and Inclusion serving as a catalyst for undertaking the DEAI work, Peninsula Clean Energy has new regulatory compliance reporting obligations regarding DEAI under Senate Bill (SB) 255 (Bradford). SB 255 is a bill signed by Governor Newsom in October 2019 that amended the Public Utilities Code Sections 366.2 and 8283 and brought Community Choice Aggregators into the California Public Utilities Commission’s (CPUC’s) Utility Supplier Diversity Program. The Utility Supplier Diversity Program’s framework and guidelines are laid out in the CPUC’s General Order (GO) 156. To comply with SB 255 and GO 156, CCAs like Peninsula Clean Energy must annually submit a detailed and verifiable plan for increasing procurement from small, local, and diverse business enterprises, and a report that details our activities supporting diverse business enterprises and the amount of our procurement spend going towards these businesses in the prior year. This program focuses on the positive downstream economic effects of including diverse suppliers in utilities’ supply chains. Compliance with SB 255 and GO 156 is another consideration that staff and the Board subcommittee contemplated when drafting the Request for Proposals and selecting the consultant team to carry out the DEAI work.
Selection of DEAI Consultant
To create the DEAI organizational statement/policy and action plan, Peninsula Clean Energy staff drafted a Request for Proposals (RFP) for DEAI consulting services under direction from the DEAI subcommittee to be released as a competitive solicitation. The Request for Proposals was released in early May 2021 with responses due in mid-June 2021. Staff received eight responses to this RFP and interviewed three top consultants with the Board subcommittee in early July. The Board subcommittee recommended that the consultant team from GCAP Services, Inc. be selected to carry out the DEAI work as they were the best fit for Peninsula Clean Energy’s range of needs, including regulatory compliance with SB 255 and GO 156. The full Peninsula Clean Energy Board approved the contract with GCAP Services, Inc. at the Board meeting on October 28, 2021.
DISCUSSION:
The DEAI work began in mid November 2021, with a kickoff meeting with the selected consultant, GCAP, on November 15, 2021. GCAP and Peninsula Clean Energy staff covered the following items in the kickoff meeting:
• Introductions
• Data Collection and Discovery Process
• Project Management Meetings/Calls Schedule
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• Project Schedule
Task 1 of the Scope of Work called for GCAP to conduct a regulatory review of General Order 156, Senate Bill 255, and Proposition 209 and to identify best practices to improve performance on required metrics. At the kickoff meeting, staff and the consultant team agreed that it made sense to conduct this regulatory review in conjunction with subsequent tasks on the project schedule (allowing us to proceed to other tasks before the regulatory review was complete). Staff also agreed to move the deliverable for Task 1 (brief report identifying organization-specific areas for improvement and recommendations, and best practices), to later in the project schedule so that the recommendations could be informed by the DEAI needs assessment phase of the project (the survey phase). With these considerations in mind, staff and the consultant team met on November 17, 2021 to start brainstorming a list of stakeholders to whom we would send the DEAI survey. The initial list of stakeholders was further built out by staff over the following month and a half and ultimately included the following groups:
• Staff, including consultants and prior staff
• Peninsula Clean Energy Board Members and Alternates
• Peninsula Clean Energy Citizens Advisory Committee Members • City Managers and City Sustainability Staff
• Outreach Grantees, Applicants, and Contractors
• Business Organizations, including Ethnic Chambers of Commerce • Trade Organizations
• Other key community stakeholders (including core social service agencies, other nonprofit organizations, county contacts)
In the first month of the project (mid-November to mid-December, 2021), GCAP started their review of Proposition 209, Senate Bill 255, and General Order 156. They also started their initial review of other Peninsula Clean Energy policies and documents that would be updated as part of Task 4 of the project. These documents include Peninsula Clean Energy’s Strategic Plan, Employee Handbook, and Policy #9 Ethical Vendor Standards, and Policy #10 Inclusive and Sustainable Workforce Policy. They also started drafting questions for the survey in Task 2, the organizational needs assessment phase of the project.
The majority of the second month of the project (mid-December to mid-January) was spent on development of the DEAI needs assessment survey. GCAP provided the initial draft of survey questions for internal and external stakeholders to Peninsula Clean Energy staff on January 4, 2022. Staff and the consultant team decided to have two survey types: internal (for staff, former staff, and contractors), and external (all other stakeholders). Peninsula Clean Energy staff conducted an internal review of the questions and provided comments to GCAP. GCAP and Peninsula Clean Energy then reviewed the survey questions and feedback together on January 7, 2022. Peninsula Clean Energy staff asked GCAP to add in more questions about environmental justice to the external-facing survey. Staff provided GCAP with the report Building a Just Energy Future: A Framework for Community Choice Aggregators to Power Equity and Democracy in California from the California Environmental Justice Alliance (CEJA) to use as a resource when coming up with questions that centered environmental justice, energy equity, and democracy.
In the third month of the project (mid-January to mid-February), Peninsula Clean Energy staff and the consultant team continued working on refining the survey questions. GCAP provided another draft of the survey questions that included assessment questions from the CEJA report mentioned above. Peninsula Clean Energy staff then added additional questions from this report.
The questions added from the CEJA report focused on the following five subject areas:
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1. Coordination with Local Community-Based Organizations (CBOs)
2. Accessible Information and Outreach
3. Community-Driven Local Program Design
4. Transparent Decision-Making
5. Local and State Accountability
Staff and the consultant team also started to prepare to meet with the DEAI subcommittee to review the survey. The team met with the Board DEAI subcommittee on January 27, 2022 to review the definitions of Diversity, Equity, Accessibility, and Inclusion, the survey questions, and survey stakeholder groups to be interviewed. At this meeting, the consultant team also reviewed the survey goals, objectives, design, format, and process. GCAP and Peninsula Clean Energy staff incorporated feedback from the Board subcommittee into the survey definitions and questions. Peninsula Clean Energy staff did two more reviews of the survey: one with GCAP on February 4, 2022, and one with just internal staff on February 8, 2022. GCAP incorporated final comments from staff and the survey went live on February 9, 2022. The survey was open until mid-March 2022.
After the survey closed, GCAP started analyzing the survey responses and drafting a survey report and appendices. There was a total of 34 submissions for the internal survey and 117 submissions for the external survey. The consultant team also started preparing for the second part of the needs assessment phase of the project: interview of key stakeholder groups.
Peninsula Clean Energy staff suggested several stakeholders to interview and then asked GCAP to suggest the remainder based off the open text responses to the survey. Ultimately, 13 stakeholders were chosen for interviews: 5 internal (staff and former staff) and 8 external (Board members, CAC members, program participants and outreach grantees). Stakeholders were interviewed in April and May 2022. GCAP provided a draft survey report to Peninsula Clean Energy staff in early May 2022 and presented the preliminary key findings from the survey to the Citizens Advisory Committee at their meeting on May 12, 2022. GCAP incorporated comments from both staff and the CAC into the final survey report and disaggregated the survey responses for each key finding by demographics at Peninsula Clean Energy’s staff suggestion. The final survey report and appendices were provided to the Board DEAI subcommittee on June 30, 2022 and the subcommittee met on July 7th, 2022. GCAP provided a project status update to the Board subcommittee at the July 7th meeting and Peninsula Clean Energy staff asked for any questions or comments from the Board subcommittee on the survey report, appendices, and key observations from the survey at that meeting. At that meeting, subcommittee members decided to have staff share the survey report and appendices with the full Board. The survey report and its 6 appendices are included as attachments to this memo. At the Board meeting on July 28th, the consultant team from GCAP will present a status update on the DEAI project and will be available for any questions Board members have on the survey report and its key observations.
With the needs assessment phase of the project complete, GCAP and the Peninsula Clean Energy project team are progressing to other tasks in the project schedule. GCAP has provided Peninsula Clean Energy staff with a first draft of their regulatory and legislative analysis of Proposition 209, Senate Bill 255, and General Order 156 as Task 1 of the project. This report will undergo an iterative review process with key Peninsula Clean Energy staff. GCAP has also started development of both the DEAI policy and action plan. Peninsula Clean Energy staff and GCAP are planning to hold 4 workshops during the month of August to get stakeholder feedback on the draft DEAI policy. The workshops are being planned to be held with the following groups:
1. Peninsula Clean Energy staff
2. Peninsula Clean Energy Board DEAI Subcommittee
3. Peninsula Clean Energy Board
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4. Citizens Advisory Committee and Community Based Organizations After feedback is received from these stakeholder groups, GCAP will edit the draft DEAI policy, and we will have the Peninsula Clean Energy Board approve the final policy at a future Board meeting. GCAP will also suggest updates to the organizational policies and documents mentioned above (strategic plan, employee handbook, policies #9 and #10) in addition to employee handbook attachments, family leave policy, standard contract, and solicitation documents. At the end of their engagement, GCAP will provide a final presentation to the Peninsula Clean Energy Board on the entire DEAI project.
ATTACHMENTS:
1. Peninsula Clean Energy DEAI Survey Report
2. Appendix A: External Survey Results
3. Appendix B: Internal Survey Results
4. Appendix C: Comparison of Internal to External Responses for similar multiple choice questions
5. Appendix D: Key Definitions
6. Appendix E: External Survey Open Format Answers
7. Appendix F: Internal Survey Open Format Answers
STRATEGIC PLAN:
The DEAI Initiative supports the Organizational Excellence pillar of the strategic plan to ensure organizational excellence by adhering to sustainable business practices and fostering a workplace culture of innovation, diversity, transparency, and integrity. This initiative seeks to support the following objectives and key tactics under this pillar:
Objective A: Culture and People: Foster a workplace culture that attracts and develops exceptional talent and values all people
• Key Tactic 3: Ensure that our recruitment processes are designed to attract high caliber and diverse applicants
Objective D: External Vendor Partners: Implement Vendor Policies that embrace diversity and inclusion and that optimize engagement results
• Key Tactic 1: Develop methods to ensure adherence to the organization’s Inclusive and Sustainable Workforce Policy
• Key Tactic 2: Develop methods to ensure adherence to the organization’s Ethical Vendor Standards Policy
This initiative also supports the Community Energy Programs pillar of the strategic plan to implement robust energy programs that reduce greenhouse gas emissions, align energy supply and demand, and provide benefits to community stakeholder groups. The DEAI initiative seeks to support the following objectives and key tactics under this pillar:
Objective B: Community Benefits: Deliver tangible benefits throughout our diverse communities • Key Tactic 1: Invest in programs that benefit underserved communities • Key Tactic 3: Support workforce development programs in the County 194
Prepared by
Diversity, Equity, Accessibility,
and Inclusion (DEAI)
June 2022
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Table of Contents
INTRODUCTION............................................................................................................................. 1 METHODOLOGY ............................................................................................................................ 2 How We Administered the Surveys ................................................................................................. 2 External Survey ................................................................................................................................. 2 Internal Survey .................................................................................................................................. 4 Survey Question Breakdown........................................................................................................ 5 Demographics................................................................................................................................ 6 External Stakeholders.......................................................................................................................... 6 Demographics..............................................................................................................................10 Internal Stakeholders ........................................................................................................................10 Key Observations.........................................................................................................................13 What is a Key Observation? .............................................................................................................13 Key Observations from the External Survey ................................................................................14 Key Demographic Observations: External Survey...................................................................14 Key Accessibility of Services Observations: External Survey................................................15 Key Peninsula Clean Energy DEAI Observations: External Survey......................................28 Key Observations from the Internal Survey.................................................................................32 Key Management Observations: Internal Survey....................................................................32 Key DEAI Observations: Internal Survey ...................................................................................35 Key Hiring Observations: Internal Survey.................................................................................38 Key Customer Accessibility Observations: Internal Survey ..................................................40 Key Procurement Observations: Internal Survey.....................................................................45 Key Psychological Safety Observations: Internal Survey ......................................................46 196
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Appendices
The appendices are attached as follows:
Appendix A: DEAI External Survey
Appendix B: DEAI Internal Survey
Appendix C: Internal vs. External Survey Responses
Appendix D: Definitions
Appendix E: External Survey Open Format Answers
Appendix F: Internal Survey Open Format Answers
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INTRODUCTION
The Peninsula Clean Energy (PCE) leadership team is committed to creating an organization that values and welcomes diversity, equity, accessibility, and inclusion (DEAI).
PCE has engaged GCAP Services, Inc. (GCAP) to help assess current policies, procedures, programs, and culture to identify opportunities for continuous improvement in their DEAI work practices for all employees and external stakeholders. Part of this assessment includes conducting a survey to better understand how PCE can become a more inclusive and accessible organization for employees, stakeholders, partners, and customers.
This report summarizes key observations identified from the survey effort which included input from both internal and external stakeholders. The survey analysis is one component in Task 2, Conduct DEAI Organizational Needs Assessment, to identify issues, opportunities, and gaps within the existing processes and procedures. The observations from the survey effort were used to tailor the 13 one-to-one interviews with representatives from stakeholder groups to delve deeper into the information identified in the surveys.
Upon completion of the organizational needs assessment tasks, an Equity Action Plan and organizational departmental goals, practices, and metrics will be developed, which will incorporate the observations and findings from the combined efforts of this survey, stakeholder interviews, and legislative and policy reviews. 198
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METHODOLOGY
How We Administered the Surveys
There were two (2) types of DEAI surveys administered: the survey of external stakeholders, and the survey of internal stakeholders. Both surveys were developed and administered using an online survey tool. The surveys were emailed to all stakeholders and were available online, in English. Surveys were able to be completed on both desktop and hand-held devices.
External Survey
The external survey was sent to 1,237 stakeholders. Survey invitations were sent to all stakeholders from February 9, 2022 through March 7, 2022 via Constant Contact.
Additional outreach to external stakeholders who clicked on the survey link but did not complete the survey was completed on March 14, 2022. In total, 117 responses were collected. The external survey response rate was 9.5%.
1.7%
0.9%
17.9%
6.0%
12.0%
41.9%
7.7%
17.9%
2.6% External Survey Stakeholders
Staff Member (2)
Contractor (1)
Board Member/Alternate (21)
CAC Member (7)
Grantee (14)
Program Participant (49)
Collaborator (9)
No Relationship (21)
Other (3)
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External survey stakeholders included the following:
1. Board Members
2. Citizens Advisory Committee (CAC) Members
3. City Managers and City Staff
4. Grantees
5. Program Participants
6. Contractors
7. Other Community Stakeholders
Stakeholder groups were selected based on their familiarity or interactions with PCE operations or programs with regards to diversity, equity, accessibility, and inclusion experiences and not delivery of energy services. The external survey included thirty-four (34) total questions. A response to all questions was required except for those with open format answers. Survey results were compiled by GCAP and are reported herein. 200
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Internal Survey
The internal survey was sent to 47 PCE employees and former employees. Survey invitations were sent to all stakeholders from February 9, 2022 through March 7, 2022. In total, 34 responses were collected. The internal survey response rate was 72.3%.
The internal survey included thirty-three (33) total questions. A response to all questions was required. Survey results were compiled by GCAP and are reported herein. Contact information is not included in this summary due to confidentiality.
85.3%
8.8%
2.9%
2.9%
Internal Survey Stakeholders
Staff Member (29)
Former Staff Member (3)
Contractor (1)
Prefer Not to Answer (1)
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Survey Question Breakdown
Survey questions were grouped into two (2) categories, with the first set of questions focusing on demographic questions and the remaining questions focusing on DEAI-related questions. The goal of the demographic questions was to help us understand PCE’s stakeholders in terms of ethnic background, gender identity, relationship to PCE, etc. The goal of the DEAI questions was to gain an understanding about how stakeholders perceive Peninsula Clean Energy’s existing practices, readiness, and culture.
Demographic Questions
Relationship to PCE
Languages spoken
Gender identity
Sexual identity
Disabilities, if any
DEAI Questions
Leadership
Employee and representative training
Hiring practices
Equitable career advancement opportunities (internal survey only) Employee training (internal survey only)
Workplace environment (internal survey only)
Procurement policies and practices
Accessibility of services and programs
Customer service
Community outreach
Facilitation of public input
Communication
Experiences with discrimination and inappropriate behavior 202
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Demographics
External Stakeholders
Based on responses to the demographic questions in the survey, the following is a representation of PCE’s external stakeholders.
1.7%
0.0%
0.9%
17.9%
6.0%
12.0%
41.9%
7.7%
17.9%
2.6%
0.0%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% Staff Member (2)
Former Staff Member
Contractor (1)
Board Member/Alternate (21)
CAC Member (7)
Grantee (14)
Program Participant (49)
Collaborator (9)
No Relationship (21)
Other (3)
Prefer Not to Answer
Stakeholder Relationship to Peninsula Clean Energy
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43%
57%
Percentage of Stakeholder Communities or Constituents that are Limited-English-speaking Households (Yes)
Yes No
18.8%
6.8%
6.8%
4.3%
18.8%
2.6%
6.0%
34.2%
11.1%
6.8%
5.1%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
Cantonese Chinese
Hindi
Japanese
Korean
Mandarin Chinese
Native American/Indigenous
Russian
Spanish
Tagalog/Filipino
Vietnamese
Other
Languages Spoken
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11.1%
6.8%
4.3%
6.8%
1.7%
1.7%
0.9%
4.3%
8.5%
8.5%
2.6%
3.4%
1.7%
1.7%
0.9%
55.6%
6.0%
5.1%
6.8%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Asian
Chinese
Filipino
Indian
Japanese
Korean
Vietnamese
Black or African American
Latino/Latina
Mexican
Central American
South American
Caribbean
Native American/Indigenous or Alaska Native
Southwest Asian/North African
White
Two or More Races
Other
Prefer Not to Answer
Stakeholder Racial or Ethnic Background
52.1%
41.9%
0.0%
0.0%
0.0%
1.7%
4.3%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Female
Male
Agender
Non-Binary
Transgender
Other
Prefer Not to Answer
Stakeholder Gender Identity
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1.7%
1.7%
2.6%
1.7%
1.7%
1.7%
82.1%
1.7%
11.1%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Asexual
Bisexual
Demisexual
Gay
Lesbian
Pansexual
Straight
Other
Prefer Not to Answer
Stakeholder Sexual Identity or Sexual Orientation
13.7%
80.3%
6.0%
Percentage of Stakeholders who Identify as a Person with a Disability or Accessibility Needs (Yes)
Yes No Prefer Not to Answer
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Demographics
Internal Stakeholders
Based on responses to the demographic questions in the survey, the following is a representation of PCE’s internal stakeholders.
85.3%
8.8%
2.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.9%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Staff Member (29)
Former Staff Member (3)
Contractor (1)
Board Member
Citizens Advisory Committee Member
Grantee
Program Participant
Collaborator
No Relationship
Other
Prefer Not to Answer (1)
Stakeholder Relationship to Peninsula Clean Energy
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14.7%
5.9%
2.9%
5.9%
2.9%
0.0%
0.0%
0.0%
2.9%
2.9%
2.9%
5.9%
0.0%
0.0%
0.0%
67.6%
8.8%
2.9%
8.8%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%
Asian
Chinese
Filipino
Indian
Japanese
Korean
Vietnamese
Black or African American
Latino/Latina
Mexican
Central American
South American
Caribbean
Native American/Indigenous or Alaska Native
Southwest Asian/North African
White
Two or More Races
Other
Prefer Not to Answer
Stakeholder Racial or Ethnic Background
47.1%
47.1%
0.0%
0.0%
0.0%
0.0%
5.9%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% Female
Male
Agender
Non-binary
Transgender
Other
Prefer Not to Answer
Stakeholder Gender Identity
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5.9%
8.8%
2.9%
5.9%
76.5%
0.0%
0.0%
2.9%
5.9%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Asexual
Bisexual
Demisexual
Gay
Heterosexual
Lesbian
Pansexual
Other
Prefer Not to Answer
Stakeholder Sexual Identity or Sexual Orientation
5.9%
91.2%
2.9%
Percentage of Stakeholders who Identify as a Person with a Disability or Accessibility Needs (Yes)
Yes No Prefer Not to Answer
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All survey questions and responses can be found in the appendices: Appendix A – External Survey and Appendix B – Internal Survey.
Key Observations
What is a Key Observation?
A key observation has the potential to be a key finding, and may have a significant impact on existing practices and policies. They may impact how PCE conducts outreach or how to communicate with external stakeholders. Based on the key observations gleaned from the surveys, interviews, and assessments, we will develop key findings. Key findings will help with the development of the Equity Action Plan as well as identify areas for training PCE employees and stakeholders. We determined key observations by applying the following methodologies.
Internal & External Key Observation Methodologies:
• Favorable Observation: At least 60% of respondents had an “agree” or “strongly agree” response.
• Area of Opportunity: At least 10% of respondents had a “disagree” or “strongly disagree” response.
In reviewing the survey responses, common themes were identified, and the observations were grouped under these themes for each of the survey groups, as shown in the table below.
External Internal
Demographics
Accessibility of Services
PCE’s DEAI
Management
DEAI
Hiring
Customer Access
Procurement
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Key Observations from the External Survey
Please note that the numbering of the key observations presented below is no indication of a hierarchy of importance. For example, Key Observation 1 is not more important than Key Observation 2, and so on.
Key Demographic Observations: External Survey
At 41.9%, a large number of responses came from
Program Participants. The next largest groups were
Board Members and survey takers who had no
relationship with PCE –each representing 17.9% of
survey takers.
43% served communities with limited English-speaking households.
Although Spanish was the most commonly spoken
language outside of English (making up 34.2% of
non-English languages), Cantonese Chinese and
Mandarin Chinese each made up 18.8% of non-English languages spoken, resulting in 37.6% combined.
Key Observation
1 Key Observation
2 Key Observation
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Key Accessibility of Services Observations: External Survey 33% feel PCE can make its electricity generation services more accessible to all persons. (Question 5).
Below is information about this response group:
NUMBER OF RESPONDERS: 38
Relationship with Peninsula Clean Energy
Staff Member 1
Contractor 1
Board Member/Alternate 7
Citizens Advisory Committee Member 3
Grantee 6
Program Participant 10
Collaborator 4
No Relationship 9
Other 1
Number of responders who serve communities
or constituents that are Limited-English-speaking households 25 Languages Spoken by Constituents
(Select all that apply)
Cantonese Chinese 11
Hindi 4
Japanese 5
Korean 3
Mandarin Chinese 12
Native American/Indigenous 2
Russian 4
Spanish 20
Tagalog/Filipino 8
Vietnamese 6
Other 4
Key Observation
4 Comments:
• I think it is necessary to
make clear the type of work
you do and how it impacts
the community as a whole.
(more publicity, more ads,
more literature in different
languages). There is still
confusion between the work
you do and PG&E
• Older people are not that
computer savvy… So more
ways of reaching our older
population would be good.
As for the programs rolled
out by PCE they are targeted
by race but not by disability.
And for that matter, I think
the projects favor certain
cities over others. Equity is
not just race it is socio
economic
• Reach out to more
customers who qualify for
CARE, medical baseline, or
other discounts to enroll
them in these programs
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Racial or Ethnic Background
(Select all that apply)
Asian 7 Mexican 4
Chinese 3 Central American 2
Filipino 4 South American 2
Indian 3 Caribbean 1
Japanese 1 White 13
Korean 1 Two or More Races 4
Black or African American 3 Other 2
Latino/Latina 5 Prefer Not to Answer 1
Gender Identity
(Select all that apply)
Female 18
Male 18
Other 1
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 1
Bisexual 1
Demisexual 1
Pansexual 1
Straight 31
Prefer Not to Answer 3
Persons with Disability or Accessibility Needs
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12.8% disagree or strongly disagree that Peninsula Clean Energy programs such as the HOME UPGRADE
PROGRAM, USED EV REBATE PROGRAM, E-BIKES FOR
EVERYONE, HEAT PUMP WATER HEATER REBATES, and
SOLAR and BATTERY REBATES are accessible to all its
customers. (Question 6). Of this 12.8%, 40% were Board
Members, and 73% served communities with Limited-English-speaking households.
Below is information about this response group:
NUMBER OF RESPONDERS: 15
Relationship with Peninsula Clean Energy
Board Member/Alternate 6
Citizens Advisory Committee Member 1
Grantee 1
Program Participant 3
Collaborator 1
No Relationship 2
Other 1
Number of responders who serve communities
or constituents that are Limited-English-speaking households 11 Languages Spoken by Constituents
(Select all that apply)
Cantonese Chinese 7 Russian 3
Hindi 4 Spanish 8
Japanese 3 Tagalog/Filipino 3
Korean 2 Vietnamese 3
Mandarin Chinese 5 Other 2
Native American/Indigenous 1
Key Observation
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Racial or Ethnic Background
(Select all that apply)
Asian 2 Central American 1
Chinese 2 South American 1
Filipino 1 Caribbean 2
Indian 1 Native American/
Indigenous or Alaska
Native
1 Japanese 1 Southwest Asian/North
African
1 Korean 1 White 9
Vietnamese 1 Two or More Races 1
Black or African American 1 Other 2
Latino/Latina 1 Prefer Not to Answer 2
Mexican 1
Gender Identity
(Select all that apply)
Female 5
Male 6
Other 1
Prefer Not to Answer 3
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 2
Bisexual 1
Demisexual 1
Gay 1
Lesbian 2
Pansexual 2
Straight 9
Prefer Not to Answer 4
Persons with Disability or Accessibility Needs
4 215
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When asked “How well has Peninsula Clean Energy
considered whether potential resources and programs
provide benefits to disadvantaged communities?” 10.3%
selected Not Very Well and Not Very Well at All.
(Question 20).
Below is information about this response group:
NUMBER OF RESPONDERS: 12
Relationship with Peninsula Clean Energy
Board Member/Alternate 2
Citizens Advisory Committee Member 1
Program Participant 4
No Relationship 5
Number of responders who serve communities or
constituents that are Limited-English-speaking
households
5 Languages Spoken by Constituents
(Select all that apply)
Cantonese Chinese 2
Hindi 1
Mandarin Chinese 1
Spanish 4
Other 1
Racial or Ethnic Background
(Select all that apply)
Asian 2 Caribbean 1
Chinese 2 Native American/ Indigenous
or Alaska Native
1 Latino/Latina 3 White 4
Mexican 1 Two or More Races 1
Central American 1 Prefer Not to Answer 1
Key Observation
6 Comments:
• Would be nice to have a
dashboard with metrics
and progress
•We can always do better.
I applaud efforts already
made in this regard. PCE
has grown exponentially
and there are growing
pains. I think the
organization has been
moved effectively from an
administrative and
technical perspective very
well, but we have not
spent time or money to
truly address things from
the bottom up. By that I
mean we need to gather
more input from the
communities we serve on
what messages resonate
with them, what makes
them use us as a provider,
what we can do better
• I don't think multi-dwelling housing has been
fully considered, nor has
mobile home living
216
DEAI Survey Report
PCE DEAI SURVEY REPORT | 20
Gender Identity
(Select all that apply)
Female 2
Male 8
Agender 0
Non-Binary 0
Other 1
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 1
Demisexual 1
Gay 1
Lesbian 1
Pansexual 1
Straight 6
Prefer Not to Answer 2
Persons with Disability or Accessibility Needs
4 217
DEAI Survey Report
PCE DEAI SURVEY REPORT | 21
When asked “How well does Peninsula Clean Energy
ensure that the design of its programs and services is
community driven and meets the needs identified by its
communities?” 11.1% selected Not Very Well and Not
Very Well at All. (Question 21).
Below is information about this response group:
NUMBER OF RESPONDERS: 13
Relationship with Peninsula Clean Energy
Board Member/Alternate 2
Citizens Advisory Committee Member 1
Program Participant 5
No Relationship 5
Number of responders who serve communities or
constituents that are Limited-English-speaking
households
6 Languages Spoken by Constituents
(Select all that apply)
Cantonese Chinese 2
Mandarin Chinese 2
Spanish 4
Tagalog/Filipino 2
Vietnamese 1
Other 1
Comments:
• The CAC has been a
driver of some programs
and that has been positive
because they represent
the communities, but not
all communities. For
example, in discussing
reach codes with low-income housing providers
they have expressed
concern about shut-offs
making their tenants
vulnerable without hot
water, cooking options and
heat. That can be
addressed with battery
storage, but they do not
understand the option or
how to comprehensively
develop a solution.
• I think solar and EVs are
associated with high
income communities but I
think the needs are
different for low income
communities and I don’t
know if the leg work has
been done to really
understand those needs.
Key Observation
7 218
DEAI Survey Report
PCE DEAI SURVEY REPORT | 22
Racial or Ethnic Background
(Select all that apply)
Asian 5
Chinese 3
Filipino 1
Korean 1
Latino/Latina 2
Mexican 1
Caribbean 1
Native American/Indigenous or Alaska Native 1
White 3
Prefer Not to Answer 1
Gender Identity
(Select all that apply)
Female 1
Male 10
Other 1
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 1
Bisexual 0
Demisexual 1
Gay 1
Lesbian 0
Pansexual 1
Straight 8
Other 0
Prefer Not to Answer 2
14 Persons with Disability or Accessibility Needs
3 219
DEAI Survey Report
PCE DEAI SURVEY REPORT | 23
62.4% of external stakeholders surveyed feel
Electricity generation services are accessible to all.
(Question 4).
Below is information about this response group:
NUMBER OF RESPONDERS: 73
Relationship with Peninsula Clean Energy
Staff Member 2
Board Member/Alternate 15
Citizens Advisory Committee Member 4
Grantee 9
Program Participant 34
Collaborator 4
No Relationship 8
Other 2
Number of responders who serve communities or
constituents that are Limited-English-speaking
households
27 Languages Spoken by Constituents
(Select all that apply)
Cantonese Chinese 11
Hindi 3
Japanese 3
Korean 1
Mandarin Chinese 14
Native American/Indigenous 1
Russian 4
Spanish 22
Tagalog/Filipino 6
Vietnamese 3
Other 2
Key Observation
8 220
DEAI Survey Report
PCE DEAI SURVEY REPORT | 24
Racial or Ethnic Background
(Select all that apply)
Asian 6
Chinese 5
Filipino 3
Indian 7
Korean 1
Black or African American 2
Latino/Latina 3
Mexican 6
Central American 1
South American 1
White 42
Two or More Races 5
Other 3
Prefer Not to Answer 6
Gender Identity
(Select all that apply)
Female 40
Male 31
Prefer Not to Answer 2
Sexual Identity or Sexual Orientation
(Select all that apply)
Demisexual 1
Straight 62
Other 1
Prefer Not to Answer 9
Persons with Disability or Accessibility Needs
8 221
DEAI Survey Report
PCE DEAI SURVEY REPORT | 25
63.3% of external stakeholders surveyed feel PCE
takes steps to make services inviting and safe.
(Question 10).
Below is information about this response group:
NUMBER OF RESPONDERS: 74
Relationship with Peninsula Clean Energy
Staff Member 2
Board Member/Alternate 13
Citizens Advisory Committee Member 6
Grantee 9
Program Participant 32
Collaborator 7
No Relationship 11
Other 1
Number of responders who serve communities or
constituents that are Limited-English-speaking
households
33 Languages Spoken by Constituents
(Select all that apply)
Cantonese Chinese 13
Hindi 5
Japanese 5
Korean 4
Mandarin Chinese 17
Native American/Indigenous 3
Russian 7
Spanish 28
Tagalog/Filipino 8
Vietnamese 6
Other 4
Key Observation
9 222
DEAI Survey Report
PCE DEAI SURVEY REPORT | 26
Racial or Ethnic Background
(Select all that apply)
Asian 8
Chinese 7
Filipino 4
Indian 5
Japanese 1
Korean 2
Vietnamese 1
Black or African American 5
Latino/Latina 7
Mexican 7
Central American 3
South American 3
Caribbean 1
Native American/Indigenous or Alaska Native 1
Southwest Asian/North African 1
White 44
Two or More Races 7
Other 3
Prefer Not to Answer 3
Gender Identity
(Select all that apply)
Female 42
Male 30
Prefer Not to Answer 2
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 1
Bisexual 2
Demisexual 2
Gay 1
Lesbian 1
Pansexual 1
Straight 66
Prefer Not to Answer 5
223
DEAI Survey Report
PCE DEAI SURVEY REPORT | 27
Persons with Disability or Accessibility Needs
10 224
DEAI Survey Report
PCE DEAI SURVEY REPORT | 28
Key Peninsula Clean Energy DEAI Observations: External Survey When asked “To what extent do Peninsula Clean
Energy staff and representatives reflect the diversity
of the communities it serves?” 12% selected Not Very
Well and Not Very Well at All. (Question 24).
Below is information about this response group:
NUMBER OF RESPONDERS: 14
Relationship with Peninsula Clean Energy
Staff Member 1
Board Member/Alternate 6
Citizens Advisory Committee Member 3
Program Participant 2
No Relationship 2
Number of responders who serve communities or
constituents that are Limited-English-speaking
households
7 Languages Spoken by Constituents
(Select all that apply)
Cantonese Chinese 5
Hindi 2
Japanese 2
Korean 1
Mandarin Chinese 5
Native American/Indigenous 1
Russian 2
Spanish 6
Tagalog/Filipino 4
Vietnamese 3
Other 2
Key Observation
10 Comments:
• Given that our workforce
is a very technical one that
requires higher education
and specific backgrounds, I
think we are fairly well
represented with women,
and some racial diversity.
It is difficult to estimate
the LBGTQ diversity. We
could do a better job of
making sure we push for
diversity in candidates and
understand our hiring
practices to make sure
there is no implicit bias!
• The population in Los
Banos is very different
demographically from that
of the peninsula. It will
take time for the board
and staff to reflect that
disparity.
• …frankly we live in an
ageist society, are older
people represented in the
work force?
225
DEAI Survey Report
PCE DEAI SURVEY REPORT | 29
Racial or Ethnic Background
(Select all that apply)
Asian 2
Chinese 1
Filipino 1
Black or African American 1
Latino/Latina 2
Mexican 2
Caribbean 1
Native American/Indigenous or Alaska Native 1
White 4
Two or More Races 1
Other 1
Gender Identity
(Select all that apply)
Female 6
Male 7
Other 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Demisexual 1
Pansexual 1
Straight 11
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs
4 226
DEAI Survey Report
PCE DEAI SURVEY REPORT | 30
When asked “To what extent does Peninsula Clean
Energy provide clear and transparent information,
assessments, and reporting on the topics of greatest
interest to the communities it serves?” 10.2%
selected Not Very Well and Not Very Well at All.
(Question 25).
Below is information about this response group:
NUMBER OF RESPONDERS: 12
Relationship with Peninsula Clean Energy
Board Member/Alternate 2
Citizens Advisory Committee Member 1
Grantee 2
Program Participant 5
No Relationship 3
Number of responders who serve communities or
constituents that are Limited-English-speaking
households
4 Languages Spoken by Constituents
(Select all that apply)
Cantonese Chinese 1
Mandarin Chinese 2
Spanish 2
Other 2
Racial or Ethnic Background
(Select all that apply)
Asian 1
Caribbean 1
White 8
Other 1
Prefer Not to Answer 1
Key Observation
11 Comments:
• …We could do a better
job of coordinating and
communicating all the
various programs that are
even beyond ours but
would benefit GHG
reduction. Examples
include offerings for multi-family electrification and
upgrades offered by other
agencies. We could also
have a better dashboard
on our website to allow
users to quickly see our
impact and the meeting of
our strategic goals.
• Before I joined the CAC I
had no idea I was a PCE
customer
• A lot of energy topics are
technical. Talk more about
the innovative PCE energy
sources. Target a broad
base with messaging that
resonates with words and
topics that are important
to customers when
thinking about energy.
227
DEAI Survey Report
PCE DEAI SURVEY REPORT | 31
Gender Identity
(Select all that apply)
Female 6
Male 5
Other 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 1
Gay 1
Pansexual 1
Straight 7
Other 1
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs
3 228
DEAI Survey Report
PCE DEAI SURVEY REPORT | 32
Key Observations from the Internal Survey
Key Management Observations: Internal Survey
61.7% agree or strongly agree that Peninsula Clean
Energy Leadership (Board, and staff who are at
Director-level and above) understands that diversity
is critical to our future success. (Question 1).
Below is information about this response group:
NUMBER OF RESPONDERS: 21
Relationship with Peninsula Clean Energy
Staff Member 19
Former Staff Member 1
Contractor 1
Racial or Ethnic Background
Persons of Color 12
White 16
Prefer Not to Answer 2
Gender Identity
Female 11
Male 9
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
Asexual 1
Bisexual 2
Demisexual 1
Gay 1
Heterosexual 18
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs
1 Key Observation
1 229
DEAI Survey Report
PCE DEAI SURVEY REPORT | 33
76.4% agree or strongly agree that Peninsula Clean
Energy Leadership provides opportunities for them
to grow and advance in their career and at Peninsula
Clean Energy regardless of their background.
(Question 7).
Below is information about this response group:
NUMBER OF RESPONDERS: 26
Relationship with Peninsula Clean Energy
Staff Member 23
Former Staff Member 2
Contractor 1
Racial or Ethnic Background
(Select all that apply)
Persons of Color 14
White 20
Prefer Not to Answer 2
Gender Identity
(Select all that apply)
Female 12
Male 13
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 1
Bisexual 2
Demisexual 1
Gay 2
Heterosexual 22
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs
2 Key Observation
2 230
DEAI Survey Report
PCE DEAI SURVEY REPORT | 34
14.7% disagree or strongly disagree that Peninsula
Clean Energy celebrates and encourages diverse
perspectives. (Question 6).
Below is information about this response group:
NUMBER OF RESPONDERS: 5
Relationship with Peninsula Clean Energy
Staff Member 3
Former Staff Member 1
Prefer Not to Answer 1
Racial or Ethnic Background
(Select all that apply)
Persons of Color 2
White 2
Prefer Not to Answer 1
Gender Identity
(Select all that apply)
Female 1
Male 3
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Heterosexual 3
Other 1
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs
0 Key Observation
3 Comments:
• Not sure what is meant
by celebrate, but
perspectives and ideas are
heard and respected from
all employees.
• The organization could
be better at cultivating
inclusive input for decision
making processes on major
decisions (ex: territory
expansion)
• When communicating to
our community, most of
our messages resonate
with homeowners
(solar+storage, electric
vehicles). Even though we
are doing work with
renters, that does not
seem to be prioritized.
•PCE is certainly an
organization that respects
individuals and their
differences, but I haven't
seen much done in the
way to celebrate those
differences or to educate
us all on the cultural,
sexual orientation, or
lifestyle differences…
231
DEAI Survey Report
PCE DEAI SURVEY REPORT | 35
Key DEAI Observations: Internal Survey
73.5% agree or strongly agree that people from all
backgrounds and with a range of identities have
equitable opportunities to advance their careers at
Peninsula Clean Energy. (Question 8).
NUMBER OF RESPONDERS: 25
Relationship with Peninsula Clean Energy
Staff Member 22
Former Staff Member 2
Contractor 1
Racial or Ethnic Background
(Select all that apply)
Persons of Color 14
White 19
Prefer Not to Answer 2
Gender Identity
(Select all that apply)
Female 12
Male 12
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 1
Bisexual 2
Demisexual 1
Gay 2
Heterosexual 21
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs
2 Key Observation
4 232
DEAI Survey Report
PCE DEAI SURVEY REPORT | 36
73.5% agree or strongly agree that they feel
Peninsula Clean Energy takes steps to make the
workplace inviting, safe, and welcoming. (Question
16).
Below is information about this response group:
NUMBER OF RESPONDERS: 25
Relationship with Peninsula Clean Energy
Staff Member 22
Former Staff Member 2
Contractor 1
Racial or Ethnic Background
(Select all that apply)
Asian 15
White 18
Prefer Not to Answer 2
Gender Identity
(Select all that apply)
Female 11
Male 13
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Bisexual 1
Gay 2
Heterosexual 21
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs
1 Key Observation
5 233
DEAI Survey Report
PCE DEAI SURVEY REPORT | 37
76.5% agree or strongly agree that they feel
comfortable discussing their social and cultural
background in the workplace. (Question 20).
Below is information about this response group:
NUMBER OF RESPONDERS: 26
Relationship with Peninsula Clean Energy
Staff Member 22
Former Staff Member 3
Contractor 1
Racial or Ethnic Background
(Select all that apply)
Persons of Color 16
White 18
Prefer Not to Answer 1
Gender Identity
(Select all that apply)
Female 13
Male 13
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 2
Bisexual 3
Demisexual 1
Gay 2
Heterosexual 21
Persons with Disability or Accessibility Needs
1 Key Observation
6 234
DEAI Survey Report
PCE DEAI SURVEY REPORT | 38
Key Hiring Observations: Internal Survey
26.4% disagree or strongly disagree that Peninsula
Clean Energy does a good job sourcing and hiring
candidates from underrepresented communities.
(Question 4).
Below is information about this response group:
NUMBER OF RESPONDERS: 9
Relationship with Peninsula Clean Energy
Staff Member 6
Former Staff Member 2
Prefer Not to Answer 1
Racial or Ethnic Background
(Select all that apply)
Persons of Color 4
White 4
Prefer Not to Answer 1
Gender Identity
(Select all that apply)
Female 4
Male 4
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 2
Bisexual 1
Demisexual 1
Gay 1
Heterosexual 5
Other 1
Prefer Not to Answer 1
Key Observation
7 235
DEAI Survey Report
PCE DEAI SURVEY REPORT | 39
Persons with Disability or Accessibility Needs
1 236
DEAI Survey Report
PCE DEAI SURVEY REPORT | 40
Key Customer Accessibility Observations: Internal Survey
70.6% agree or strongly agree that Peninsula Clean
Energy customer service is accessible to all its
customers. (Question 13).
Below is information about this response group:
NUMBER OF RESPONDERS: 24
Relationship with Peninsula Clean Energy
Staff Member 20
Former Staff Member 3
Contractor 1
Racial or Ethnic Background
(Select all that apply)
Persons of Color 13
White 18
Prefer Not to Answer 1
Gender Identity
(Select all that apply)
Female 11
Male 12
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 1
Bisexual 2
Demisexual 1
Gay 2
Heterosexual 20
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs
2 Key Observation
8 Comments:
• Stop hiding staff contact
information. Staff contact
information should be
published on the website.
If the board can publish
contact information on the
website, so should staff.
• Make sure that customer
service is available for
those that may not have a
computer or internet
access.
• Maybe hire more bi-lingual folks? I know
Calpine has multi-lingual
staff members for the call
center, so that's great.
• Test how smooth the
experience is of interacting
with our call center when
you need a translator.
237
DEAI Survey Report
PCE DEAI SURVEY REPORT | 41
88.2% agree or strongly agree that Peninsula Clean
Energy electricity generation services are accessible
to all its customers. (Question 9).
Below is information about this response group:
NUMBER OF RESPONDERS: 30
Relationship with Peninsula Clean Energy
Staff Member 26
Former Staff Member 3
Contractor 1
Racial or Ethnic Background
(Select all that apply)
Persons of Color 16
White 21
Prefer Not to Answer 2
Gender Identity
(Select all that apply)
Female 15
Male 14
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 1
Bisexual 3
Demisexual 1
Gay 2
Heterosexual 24
Other 1
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs
2 Key Observation
9 238
DEAI Survey Report
PCE DEAI SURVEY REPORT | 42
26.5% disagree or strongly disagree that Peninsula
Clean Energy employees are trained to serve a
diverse customer base. (Question 2).
Below is information about this response group:
NUMBER OF RESPONDERS: 9
Relationship with Peninsula Clean Energy
Staff Member 7
Former Staff Member 1
Prefer Not to Answer 1
Racial or Ethnic Background
(Select all that apply)
South American 3
White 6
Prefer Not to Answer 1
Gender Identity
(Select all that apply)
Female 4
Male 4
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 2
Bisexual 2
Demisexual 1
Gay 1
Heterosexual 4
Other 1
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs: 0
Key Observation
10 239
DEAI Survey Report
PCE DEAI SURVEY REPORT | 43
32.4% think Peninsula Clean Energy can make its
electricity generation services more accessible to all
persons. (Question 10).
Below is information about this response group:
NUMBER OF RESPONDERS: 11
Relationship with Peninsula Clean Energy
Staff Member 9
Former Staff Member 1
Prefer Not to Answer 1
Racial or Ethnic Background
(Select all that apply)
Persons of Color 10
White 7
Prefer Not to Answer 1
Gender Identity
(Select all that apply)
Female 4
Male 6
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 1
Gay 1
Heterosexual 7
Other 1
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs
0 Key Observation
11 Comments:
• Increased investment of
funds, communication,
education, and outreach to
disadvantaged communities,
specifically communities of
color with ethnic minorities,
is needed…Minority and
disadvantaged communities
are either ignored or receive
only token attention
because they are not as
visible, not as vocal, not as
politically engaged or
powerful, and are therefore
not viewed as important
• Since all our customers are
opted-in by default, I would
think we could make it more
accessible only if we
continue to be a more
affordable option than PG&E
• A more separate rate
structure could prevent
customers from thinking PCE
is causing their bill increases
240
DEAI Survey Report
PCE DEAI SURVEY REPORT | 44
29.4% disagree or strongly disagree that Peninsula
Clean Energy programs such as the HOME UPGRADE
PROGRAM, USED EV REBATE PROGRAM, E-BIKES
FOR EVERYONE, HEAT PUMP WATER HEATER
REBATES, and SOLAR and BATTERY REBATES are
accessible to all its customers. (Question 11).
Below is information about this response group:
NUMBER OF RESPONDERS: 10
Relationship with Peninsula Clean Energy
Staff Member 6
Former Staff Member 3
Prefer Not to Answer 1
Racial or Ethnic Background
(Select all that apply)
Persons of Color 4
White 5
Prefer Not to Answer 1
Gender Identity
(Select all that apply)
Female 5
Male 4
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Bisexual 1
Gay 1
Heterosexual 6
Other 1
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs
0 Key Observation
12 Comments:
• Most of these programs
are only targeted at low-income folks, so they are
not accessible to everyone.
However, that's not a bad
thing because being
accessible to low-income
folks is great. I think
naming the "e-bikes for
everyone" program that
way was really dumb
because it's quite literally
not "for everyone" and
only for a small portion of
the County
• Programs are designed in
a technical vacuum that
does not consult with
customers or community
groups. Design our
programs by first talking
with our community
stakeholders, especially
about the proposed
program's value and
accessibility for
underserved communities
241
DEAI Survey Report
PCE DEAI SURVEY REPORT | 45
Key Procurement Observations: Internal Survey
Less than half (41.1%) agree or strongly agree that
Peninsula Clean Energy supports and promotes
diversity in its procurement policies and practices.
11.7% disagree or strongly disagree that Peninsula
Clean Energy supports and promotes diversity in its
procurement policies and practices. (Question 3).
Below is information about this response group:
NUMBER OF RESPONDERS: 14
Relationship with Peninsula Clean Energy
Staff Member 13
Contractor 1
Racial or Ethnic Background
(Select all that apply)
Persons of Color 8
White 11
Prefer Not to Answer 1
Gender Identity
(Select all that apply)
Female 6
Male 8
Sexual Identity or Sexual Orientation
(Select all that apply)
Bisexual 1
Gay 1
Heterosexual 12
Persons with Disability or Accessibility Needs
1 Key Observation
13 242
DEAI Survey Report
PCE DEAI SURVEY REPORT | 46
Key Psychological Safety Observations: Internal Survey
67.6% agree or strongly agree that on their team
they are able to have discussions on
difficult/uncomfortable topics. (Question 25).
Below is information about this response group:
NUMBER OF RESPONDERS: 23
Relationship with Peninsula Clean Energy
Staff Member 19
Former Staff Member 3
Contractor 1
Racial or Ethnic Background
(Select all that apply)
Persons of Color 12
White 17
Prefer Not to Answer 2
Gender Identity
(Select all that apply)
Female 9
Male 13
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Asexual 1
Bisexual 2
Demisexual 1
Gay 2
Heterosexual 19
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs
1 Key Observation
14 Comments:
• I have been a part of a few
uncomfortable topics, and
both sides were able to share
their opinions and reach a
compromise. It seemed like a
fair discussion
• My team is rather open
about our opinions and able to
discuss them in a deliberative
manner.
• I think we certainly could,
although generally I hesitate
to do so. That said I'm more
comfortable at PCE than I have
ever been at any other
employer
243
DEAI Survey Report
PCE DEAI SURVEY REPORT | 47
20% have experienced unwelcomed comments or
conduct at Peninsula Clean Energy that they felt were
offensive, embarrassing, or hurtful. (Question 22).
Below is information about this response group:
NUMBER OF RESPONDERS: 7
Relationship with Peninsula Clean Energy
Staff Member 4
Former Staff Member 2
Prefer Not to Answer 1
Racial or Ethnic Background
(Select all that apply)
Persons of Color 2
White 4
Prefer Not to Answer 1
Gender Identity
(Select all that apply)
Female 1
Male 5
Prefer Not to Answer 1
Sexual Identity or Sexual Orientation
(Select all that apply)
Gay 1
Heterosexual 4
Other 1
Prefer Not to Answer 1
Persons with Disability or Accessibility Needs
0 Key Observation
15 Comments:
• Very rarely. But when it
does happen, it's
inappropriate jokes from
one of the male staff that
make meetings awkward
• I heard someone use the
phrase "off the
reservation" in a debrief
session after RFP
interviews
• I did not experience this
directly, but I have
witnesses it happening to
other staff firsthand from
Leadership
• Not directed at me or
anyone in particular, but
there was a recent
comment on an all-staff
meeting discussing a
future in-person all-staff
meeting and a joke was
made that we'd be able to
see who put on weight
since the last time we
were in the office. Strikes
me as inappropriate
244
DEAI Survey Report
PCE DEAI SURVEY REPORT | 48
11.8% disagree or strongly disagree that they feel
comfortable talking about issues of racism on their
team. (Question 26).
Below is information about this response group:
NUMBER OF RESPONDERS: 4
Relationship with Peninsula Clean Energy
Staff Member 3
Prefer Not to Answer 1
Racial or Ethnic Background
(Select all that apply)
Persons of Color 1
White 1
Prefer Not to Answer 2
Gender Identity
(Select all that apply)
Female 1
Male 1
Prefer Not to Answer 2
Sexual Identity or Sexual Orientation
(Select all that apply)
Heterosexual 1
Other 1
Prefer Not to Answer 2
Persons with Disability or Accessibility Needs
0 Key Observation
16 245
Appendix A – DEAI External Survey
PCE DEAI SURVEY REPORT | APPENDIX A | 1
External Survey Results – Information about our Stakeholders During the first portion of the survey, Stakeholders were asked about themselves, including their relationship with PCE, ethnic background, race, and gender. Responses are below.
1.7%
0.0%
0.9%
17.9%
6.0%
12.0%
41.9%
7.7%
17.9%
2.6%
0.0%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% Staff Member
Former Staff Member
Contractor
Board Member/Alternate
Citizens Advisory Committee Member
Grantee
Program Participant
Collaborator
No Relationship
Other
Prefer Not to Answer
1. How would you characterize your relationship with
Peninsula Clean Energy? Select all that apply.
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43%
57%
2. Do you serve communities or constituents that are
Limited-English-speaking households where no one 14
years old or older speaks English or does not speak English very well?
Yes No
18.8%
6.8%
6.8%
4.3%
18.8%
2.6%
6.0%
34.2%
11.1%
6.8%
5.1%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
Cantonese Chinese
Hindi
Japanese
Korean
Mandarin Chinese
Native American/Indigenous
Russian
Spanish
Tagalog/Filipino
Vietnamese
Other
If yes, please select all that apply.
247
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11.1%
6.8%
4.3%
6.8%
1.7%
1.7%
0.9%
4.3%
8.5%
8.5%
2.6%
3.4%
1.7%
1.7%
0.9%
55.6%
6.0%
5.1%
6.8%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Asian
Chinese
Filipino
Indian
Japanese
Korean
Vietnamese
Black or African American
Latino/Latina
Mexican
Central American
South American
Caribbean
Native American/Indigenous or Alaska Native
Southwest Asian/North African
White
Two or More Races
Other
Prefer Not to Answer
3. Please identify your racial or ethnic background. Select all that apply.
248
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52.1%
41.9%
0.0%
0.0%
0.0%
1.7%
4.3%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Female
Male
Agender
Non-Binary
Transgender
Other
Prefer Not to Answer
4. How do you describe your gender identity? Select all that apply.
1.7%
1.7%
2.6%
1.7%
1.7%
1.7%
82.1%
1.7%
11.1%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Asexual
Bisexual
Demisexual
Gay
Lesbian
Pansexual
Straight
Other
Prefer Not to Answer
5. How do you like to describe your sexual identity or
sexual orientation? Select all that apply.
249
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13.7%
80.3%
6.0%
6. Do you identify as a person with a disability or accessibility needs? Yes No Prefer Not to Answer
250
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External Survey Results – DEAI Questions
23.9%
30.8%
6.0% 5.1%
0.0%
34.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
1. Peninsula Clean Energy Leadership (Board, and staff who are at Director-level and above) understands that diversity is critical to Peninsula Clean Energy's future success. 251
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BREAKDOWN OF THOSE WHO DISAGREE
20.0%
20.0%
40.0%
20.0%
Racial / Ethnic Background
Chinese Caribbean White Other (not listed above): ______________
16.7%
33.3%
50.0%
Relationship to PCE
Citizens Advisory Committee Member Program Participant
No Relationship
252
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15.4%
26.5%
6.8% 6.8%
0.9%
43.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
3. Peninsula Clean Energy supports and promotes diversity in its procurement policies and practices.
12.0%
19.7%
11.1%
6.0%
0.0%
51.3%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
2. Peninsula Clean Energy employees and representatives are properly trained to serve a diverse customer base.
253
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33%
4%
63%
5. Can Peninsula Clean Energy make its electricity generation services more accessible to all persons?
Yes No Not Sure
30.8% 31.6%
8.5%
3.4% 1.7%
23.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
4. Peninsula Clean Energy electricity generation services are accessible to all its customers.
254
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18.8%
30.8%
21.4%
6.8% 6.0%
16.2%
0.0%
10.0%
20.0%
30.0%
40.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
6. Peninsula Clean Energy programs such as the HOME
UPGRADE PROGRAM, USED EV REBATE PROGRAM, E-BIKES
FOR EVERYONE, HEAT PUMP WATER HEATER REBATES, and
SOLAR and BATTERY REBATES are accessible to all its
customers.
22.2%
27.4%
9.4%
2.6% 0.9%
37.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
8. Peninsula Clean Energy customer service is accessible to all its customers
255
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2.6%
92.3%
5.1%
11. Have you experienced any discrimination (i.e., unfair, negative, or adverse treatment) at Peninsula Clean Energy based on one or more aspects of your background or identity (e.g., gender, age, ethnicity, sexual orientation, etc.)?
Yes No Not Sure
19.7%
43.6%
13.7%
1.7% 0.0%
21.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly Disagree Don't Know
10. Peninsula Clean Energy takes steps to make their services inviting, safe, and welcoming.
256
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14.5%
30.8%
12.0%
6.8%
1.7%
34.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
15. I feel comfortable talking about issues of racism with Peninsula Clean Energy staff and representative
3%
93%
4%
12. Have you experienced any unwelcomed comments or
conduct at Peninsula Clean Energy that you felt was
offensive, embarrassing, or hurtful (e.g., inappropriate jokes, slurs, rumors, hurtful gossip, isolating behaviors)?
Yes No Not Sure
257
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BREAKDOWN OF THOSE WHO DISAGREE WITH QUESTION #15
11.1%
11.1%
44.4%
11.1%
11.1%
11.1%
Racial / Ethnic Background
Asian Chinese White
Two or more races Other (not listed above): Prefer not to answer 258
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1.7%
5.1%
22.2% 21.4%
5.1%
44.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Not Well at All Not Very Well Well Very Well Extremely Well Not Sure
18. How well does Peninsula Clean Energy's outreach use appropriate methods and resources to engage its community, ensuring information is accessible, transparent, and responsive to all residents?
3.4% 3.4%
17.9% 15.4%
6.8%
53.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Not Well at All Not Very Well Well Very Well Extremely Well Not Sure
17. How well has Peninsula Clean Energy identified and
coordinated with relevant Community Based Organizations (CBOs) to facilitate community input and outreach,
including ensuring long term relationships and valuing their time and resources?
259
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4.3%
0.0%
11.1% 12.8%
6.0%
65.8%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Not Well at All Not Very Well Well Very Well Extremely Well Not Sure
19. How well has Peninsula Clean Energy ensured that the input obtained in outreach is used in decision-making?
4.3% 6.0%
15.4% 15.4%
8.5%
50.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Not Well at All Not Very Well Well Very Well Extremely Well Not Sure
20. How well has Peninsula Clean Energy considered
whether potential resources and programs provide benefits to disadvantaged communities?
260
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3.4% 0.9%
12.0% 14.5% 10.3%
59.0%
0.0%
20.0%
40.0%
60.0%
80.0%
Not Well at All Not Very Well Well Very Well Extremely Well Not Sure
22. How well does Peninsula Clean Energy support well-paying jobs, workforce development, and economic development opportunities in its industry through its
procurement and programs spending?
3.4%
7.7%
21.4%
11.1% 8.5%
47.9%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Not Well at All Not Very Well Well Very Well Extremely Well Not Sure
21. How well does Peninsula Clean Energy ensure that the design of its programs and services is community driven and meets the needs identified by its communities?
261
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2.6% 5.1% 8.5% 12.0% 6.8%
65.0%
0.0%
20.0%
40.0%
60.0%
80.0%
Not Well at All Not Very Well Well Very Well Extremely Well Not Sure
23. How well has Peninsula Clean Energy taken steps to
eliminate cultural, language and accessibility barriers in opportunities for public input in decision making
processes?
2.6%
9.4%
14.5% 12.8%
4.3%
56.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Not Well at All Not Very Well Well Very Well Extremely Well Not Sure
24. To what extent do Peninsula Clean Energy staff and
representatives reflect the diversity of the communities it serves
262
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2.6% 2.6%
10.3%
15.4% 12.8%
56.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Not Well at All Not Very Well Well Very Well Extremely Well Not Sure
26. How do Peninsula Clean Energy equity-oriented
programs compare with other utilities?
3.4%
6.8%
25.6%
12.8% 11.1%
40.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Not Well at All Not Very Well Well Very Well Extremely Well Not Sure
25. To what extent does Peninsula Clean Energy provide clear and transparent information, assessments, and reporting on the topics of greatest interest to the communities it serves? 263
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Internal Survey Results – Information about our Staff
85.3%
8.8%
2.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.9%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Staff Member
Former Staff Member
Contractor
Board Member
Citizens Advisory Committee Member
Grantee
Program Participant
Collaborator
No Relationship
Other
Prefer Not to Answer
1. How would you characterize your relationship with
Peninsula Clean Energy? Select all that apply.
264
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14.7%
5.9%
2.9%
5.9%
2.9%
0.0%
0.0%
0.0%
2.9%
2.9%
2.9%
5.9%
0.0%
0.0%
0.0%
67.6%
8.8%
2.9%
8.8%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%
Asian
Chinese
Filipino
Indian
Japanese
Korean
Vietnamese
Black or African American
Latino/Latina
Mexican
Central American
South American
Caribbean
Native American/Indigenous or Alaska Native
Southwest Asian/North African
White
Two or More Races
Other
Prefer Not to Answer
2. Please identify your racial or ethnic background. Select all that apply.
265
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47.1%
47.1%
0.0%
0.0%
0.0%
0.0%
5.9%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% Female
Male
Agender
Non-binary
Transgender
Other
Prefer Not to Answer
3. How do you describe your gender identity? Select all that apply. (Gender identity describes a person's internal sense of gender, whether as a man, a woman, or something
beyond the gender binary.)
5.9%
8.8%
2.9%
5.9%
76.5%
0.0%
0.0%
2.9%
5.9%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Asexual
Bisexual
Demisexual
Gay
Heterosexual
Lesbian
Pansexual
Other
Prefer Not to Answer
4. How do you like to describe your sexual identity or
sexual orientation? Select all that apply. (This describes a person's physical, romantic, or emotional attraction to other people in the world.)
266
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5.9%
91.2%
2.9%
5. Do you identify as a person with a disability or
accessibility needs?
Yes No Prefer Not to Answer
267
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Internal Survey Results – DEAI Questions
23.5%
38.2%
23.5%
5.9% 2.9% 5.9%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
1. Peninsula Clean Energy Leadership (Board, and staff who are at Director-level and above) understands that diversity is critical to our future success.
8.8%
29.4%
32.4%
20.6%
5.9%
2.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
2. Peninsula Clean Energy employees are trained to serve a diverse customer base.
268
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17.6%
23.5%
26.5%
8.8%
2.9%
20.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
3. Peninsula Clean Energy supports and promotes diversity in its procurement policies and practices.
8.8%
17.6%
29.4%
23.5%
2.9%
17.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
4. Peninsula Clean Energy does a good job sourcing and
hiring candidates from underrepresented communities.
269
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11.8%
29.4%
32.4%
5.9%
8.8%
11.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
6. Peninsula Clean Energy celebrates and encourages
diverse perspectives.
38.2% 38.2%
5.9% 8.8% 8.8%
0.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
7. Peninsula Clean Energy Leadership (Board, and staff who are at Director-level and above) provides opportunities for me to grow and advance in my career and at Peninsula
Clean Energy regardless of my background.
270
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38.2% 35.3%
14.7%
2.9% 5.9% 2.9%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
8. People from all backgrounds and with a range of
identities have equitable opportunities to advance their careers at Peninsula Clean Energy.
64.7%
23.5%
2.9% 0.0% 2.9% 5.9%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
9. Peninsula Clean Energy electricity generation services are accessible to all its customers.
271
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32.4%
20.6%
47.1%
10. Can Peninsula Clean Energy make its electricity
generation services more accessible to all persons?
Yes No Not Sure
5.9%
23.5%
29.4%
20.6%
8.8% 11.8%
0.0%
10.0%
20.0%
30.0%
40.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
11. Peninsula Clean Energy programs such as the HOME
UPGRADE PROGRAM, USED EV REBATE PROGRAM, E-BIKES
FOR EVERYONE, HEAT PUMP WATER HEATER REBATES, and
SOLAR and BATTERY REBATES are accessible to all its
customers.
272
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38.2%
32.4%
8.8%
0.0%
2.9%
17.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
13. Peninsula Clean Energy customer service is accessible to all its customers.
38.2%
32.4%
29.4%
15. Do employee training programs promote inclusivity?
Yes No Not Sure
273
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35.3%
38.2%
14.7%
2.9%
5.9%
2.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
16. I feel Peninsula Clean Energy takes steps to make the workplace inviting, safe, and welcoming.
2.9%
14.7%
2.9% 5.9% 2.9%
70.6%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
17. Peninsula Clean Energy takes appropriate action in
response to incidents of harassment or discrimination.
274
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20.6%
38.2%
20.6%
8.8% 8.8%
2.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
18. Peninsula Clean Energy encourages me to voice my
opinion, even when it differs from the group's opinion.
26.5%
50.0%
14.7%
0.0%
5.9% 2.9%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
20. I feel comfortable discussing my social and cultural background in the workplace.
275
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6%
85%
9%
21. Have you experienced any discrimination (i.e., unfair, negative, or adverse treatment) at Peninsula Clean Energy based on one or more aspects of your background or
identity (e.g., gender, age, ethnicity, sexual orientation, etc.)?
Yes No Not Sure
276
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20%
71%
9%
22. Have you experienced any unwelcomed comments or
conduct at Peninsula Clean Energy that you felt was
offensive, embarrassing, or hurtful (e.g., inappropriate jokes, slurs, rumors, hurtful gossip, isolating behaviors)? Yes
No
Not Sure
23.5%
32.4%
29.4%
2.9%
5.9% 5.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
24. I feel comfortable communicating concerns safely
within Peninsula Clean Energy.
277
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17.6%
50.0%
11.8%
2.9% 5.9%
11.8%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
25. On my team we are able to have discussions on
difficult/uncomfortable topics.
14.7% 14.7%
44.1%
5.9% 5.9%
14.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Strongly Agree Agree Somewhat Agree Disagree Strongly
Disagree
Don't Know
26. I feel comfortable talking about issues of racism on my team.
278
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26.5%
73.5%
28. Would you like to be contacted to provide any
additional information not included in this survey?
Yes No
279
Appendix C – Internal vs. External Survey Responses
PCE DEIA SURVEY REPORT | APPENDIX C | 1
PCE Leadership (Board, and staff who are at Director-level understands that diversity is critical to our future success. (Q1 Internal, Q1 External) Response Internal External
Agree-Strongly Agree 61.7% 54.7%
Somewhat Agree 23.5% 6.0%
Disagree-Strongly Disagree 8.8% 5.1%
Don’t know 5.9% 34.1%
PCE Staff trained to serve diverse customer base. (Q2 Internal, Q2 External) Response Internal External
Agree-Strongly Agree 38.2% 31.7%
Somewhat Agree 32.4% 11.1%
Disagree-Strongly Disagree 26.5% 6.0%
Don’t know 2.9% 51.3%
PCE supports & promotes diversity in its procurement policies and practices. (Q3 Internal, Q3 External)
Response Internal External
Agree-Strongly Agree 41.1% 41.9%
Somewhat Agree 26.5% 6.8%
Disagree-Strongly Disagree 11.7% 7.7%
Don’t know 20.6% 43.6%
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Appendix C – Internal vs. External Survey Responses
PCE DEIA SURVEY REPORT | APPENDIX C | 2
PCE’s electrical generation services are accessible to all customers. (Q9 Internal, Q4 External)
Response Internal External
Agree-Strongly Agree 88.2% 62.4%
Somewhat Agree 2.9% 8.5%
Disagree-Strongly Disagree 2.9% 5.1%
Don’t know 5.9% 23.9%
Can PCE make its electrical generation services more accessible to all persons? (Q10 Internal, Q5 External) Note: this question not asked for programs or customer service areas.
Response Internal External
Yes 32% 33%
No 20.6% 4%
Not sure 47.1% 63%
PCE Energy programs such as the Home Upgrade program, Used EV Rebate Program, E-bikes for everyone, Heat Pump Water Heater Rebates, and Solar and Battery Rebates are accessible to all its customers. (Q11 Internal, Q6 External) Response Internal External
Agree-Strongly Agree 29.4% 49.6%
Somewhat Agree 29.4% 21.4%
Disagree-Strongly Disagree 29.4% 12.8%
Don’t know 11.8% 16.2%
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PCE customer service is accessible to all its customers. (Q13 Internal, Q8 External) Response Internal External
Agree-Strongly Agree 70.6% 49.6%
Somewhat Agree 8.8% 9.4%
Disagree-Strongly Disagree 2.9% 3.5%
Don’t know 17.6% 37.6%
Have you experienced any discrimination (i.e., unfair, negative, or adverse treatment) at Peninsula Clean Energy based on one or more aspects of your background or identify (e.g., gender, age, ethnicity, sexual orientation, etc.)? (Q21 Internal, Q11 External)
Response Internal External
Yes 6% 2.6%
No 85% 92.3%
Not sure 9% 5.1%
Have you experienced any unwelcomed comments or conduct at Peninsula Clean Energy that you felt was offensive, embarrassing, or hurtful (e.g., inappropriate jokes, slurs, rumors, hurtful gossip, isolating behaviors)? (Q22 Internal, Q12 External)
Response Internal External
Yes 20% 3%
No 71% 93%
Not sure 9% 4%
282
Appendix D – Definitions
PCE DEIA SURVEY REPORT | APPENDIX D | 1
The GCAP team collaborated with the Peninsula Clean Energy project team and the Subcommittee to develop tailored definitions for diversity, equity, accessibility, and inclusion as well as other key terms used in the survey. The following definitions were provided to those taking the survey.
Social Equity Terms
Accessibility
Accessibility means including people with physical and mental disabilities in both its customer base and workforce. Accessibility also means having systems and programs accessible to all individuals regardless of their socioeconomic status, digital access or language.
Disadvantaged Communities
Disadvantaged communities refer to the areas throughout California which most suffer from a combination of economic, health, and environmental burdens. These burdens include poverty, high unemployment, air and water pollution, presence of hazardous wastes as well as high incidence of asthma and heart disease. Disadvantaged communities do not have to pertain to a particular census tract, but could include smaller subcommunities like renters and students and families of Title 1 Schools, etc.
Diversity
Diversity is the presence of differences in people within a community, school or other organization that may include race, gender, religion, sexual orientation, ethnicity, nationality, socioeconomic status, language, (dis)ability, age, or religious commitment. An intersectional approach to diversity goes beyond merely counting different kinds of representation in a group, but also recognizes differences in power dynamics between different identities, and how to equitably include and empower individuals from different backgrounds to participate within groups, decision making processes, and social justice movements.
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Equity
Equity acknowledges historical factors that created oppressive societal structures and recognizes that we do not all start from the same place and must make adjustments to imbalances by providing power or resources to historically oppressed groups and persons. Equity promotes justice, impartiality, and fairness within the procedures, processes, and distribution of resources by institutions or systems.
Inclusion
Inclusion outcomes are met when you, your institution, and your program are genuinely inviting to all. It is based on the degree to which diverse individuals can participate fully in the decision-making processes and development opportunities within an organization or group thus empowering them.
Gender & Sexuality Terms
Agender
Literally translated as “without gender”. Means genderless or lacking gender; gender neutral meant in the sense of being neither man or woman yet still having a gender.
Asexual
Asexual is an umbrella term that encompasses a broad spectrum of sexual orientations. It may range from people who experience no sexual or romantic attraction to anyone while others may experience varying degrees of sexual or romantic attraction to people.
Bisexual
A person who feels attraction toward their own gender and other genders or toward anyone regardless of their gender.
Gay
Men who feel romantic and sexual attraction to other men.
Heterosexual/Straight
A person who typically only feels sexual attraction toward a person from the opposite gender.
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Lesbian
Women who feel romantic and sexual attraction to other women.
Non-binary
Any gender identity which does not fit the male and female binary spectrum.
Pansexual
Similar to bisexual. Pansexual refers to people who feel attraction toward people of all genders and sexes.
Transgender
Umbrella term for anyone whose internal experience of gender does not match the sex they were assigned at birth.
285
Appendix E – DEAI External Survey Open Format Answers
Disclaimer: Comments deemed inappropriate, not constructive, or breached confidentiality have been removed.
PCE DEAI SURVEY REPORT | APPENDIX E | 1
Key Observation 1. At 41.9%, a large number of responses came from Program Participants. The next largest groups were Board Members and survey takers who had no
relationship with PCE – each representing 17.9% of survey takers.
• No open format comment option on survey
Key Observation 2. 43% served communities with limited
English-speaking households.
• No open format comment option on survey
Key Observation 3. Although Spanish was the most
commonly spoken language outside of English (making up
34.2% of non-English languages), Cantonese Chinese and
Mandarin Chinese each made up 18.8% of non-English
languages spoken, resulting in 37.6% combined.
• No open format comment option on survey
Key
Observation
1 Key
Observation
2 Key
Observation
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Key Observation 4. 33% feel PCE can make its electricity generation services more accessible to all persons. (Question 5)
Expand Outreach:
• Expand outreach to all underrepresented communities.
• We can always do better in making our services more accessible in this changing and complex energy environment. Sometimes we may not even understand the best ways to increase accessibility and need to do better community outreach to understand how we can improve.
• I mean probably. There are always unused avenues available to promote anything.
• Target communities that are not necessary plugged in to what PCE has to offer, whether due to lack of digital access (internet), language barrier as just two examples.
• PCE's service shall benefit everyone in its jurisdiction, so it is very important to take the diversity into account.
• I think it is necessary to make clear the type of work you do and how it impacts the community as a whole. (More publicity, more ads, more literature in different languages). There is still confusion between the work you do and PG&E. • Older people are not well that computer savvy. EG my Mom at age 94 is still full mental capacity except trying to do things on a computer and forget about a smart phone. And with COVID we can't even have in person explanations. So, more ways of reaching our older population would be good. As for the programs rolled out by PCE they are targeted by race but not by disability. And for that matter, I think the projects favor certain cities over others. Equity is not just race it is socio economic.
• Better communication and outreach are needed.
Key
Observation
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Rebates, Incentives, Discounts:
• Provide additional rebates and incentive information in different languages. I am not sure if this is done which is why I clicked "not sure." • PCE is the default provider so what more can they do? At the same time, it is always possible to make electricity less expensive to selected customers who have financial difficulty and thereby increase "accessibility" or equality of access. • Free electric vehicles to all persons.
• If there is an added cost, then it would be helpful to adjust for those households that are low or extremely low income.
• Develop microgrids in all new developments starting with low income. • Reach out to more customers who qualify for CARE, medical baseline, or other discounts to enroll them in these programs.
• Not affordable by everyone.
• We have universal electrical service in San Mateo County. So, it’s accessible. Is it affordable? I’m not sure what levels of subsidy are available from PCE to low-income homeowners.
Vendors:
• Need to have a better control over the selected vendors, especially for the promotional or discount areas.
Homeless Population:
• Involvement with second units and homeless population.
Environmental:
• Not sure if it is a question of making electricity generation services more accessible since all San Mateo County customers were defaulted to PCE, so I think it is already accessed by all SMC residents, but I think most SMC residents are unaware that this took place, and unaware of PCE. I think the opportunity is to develop strategic programs to look at environmental justice and equity, and to incorporate this lens into every aspect of PCE, every program, hiring, vendors, workforce, CAC etc.
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• Aiding more locally generated clean energy and micro grids that provide whole neighborhoods made up of all economic and diverse populations.
Other:
• I found Peninsula Clean Energy to be an awesome resource. I am beyond grateful for all of the staff and the mission and vision of this organization. • By donating to charitable donations or through work force development and education scholarships for those who do not have the means to these. • I have full confidence on the staff’s dedication to make it happen. • Anyone in PCE territory has access but the locations could change • In my experience with the services provided by Peninsula Clean Energy, it seems that it is balanced, fair, and recognizes the diversity in the community. • Defaulting to PCE was the right answer. Most people were fine with that, and I suspect that many people aren't particularly aware, unless they look closely at their bills.
• I assume that PCE is the default provider unless a customer opts out. • I think that they are available to anyone who lives or works in San Mateo County and Los Banos. I don't think that there is any discrimination. PCE will serve anyone who pays for the service.
• Getting the word out.
• I believe it because it has been established as the clean energy producer and is working with PG&E as well as many community partners.
• Expect that a geographic and distribution arrangement issue, combined with energy sourcing/generation capacity.
• Everyone is automatically enrolled, but more work needs to be done to educate all community members about its purpose and spillover benefits. • Not sure about question. Are you asking if PCE should give incentives for more people to get solar or whether Peninsula clean energy helps people sign up for their program to use clean energy?
• We could certainly consider future expansion of the area served by PCE. 289
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Key Observation 5. 12.8% disagree or strongly disagree that Peninsula Clean Energy programs such as the HOME
UPGRADE PROGRAM, USED EV REBATE PROGRAM, E-BIKES
FOR EVERYONE, HEAT PUMP WATER HEATER REBATES, and
SOLAR and BATTERY REBATES are accessible to all its
customers. (Question 6). Of this 12.8%, 40% were Board
Members, and 73% served communities with Limited-English-speaking households. • No open format comment option on survey
Key Observation 6. When asked “How well has Peninsula
Clean Energy considered whether potential resources and programs provide benefits to disadvantaged communities?”
10.3% selected Not Very Well and Not Very Well at All.
(Question 20)
Needs Improvement:
• Would be nice to have a dashboard with metrics and progress. • Its efforts focus on certain group, to the detriment of other groups. It feels like there is a hierarchy of groups deemed "in need" based on false narratives and superficial broad stereotyping that fails to target those truly in-need or underserved.
• We can always do better. I applaud efforts already made in this regard. PCE has grown exponentially and there are growing pains. I think the organization has been moved effectively from an administrative and technical perspective very well, but we have not spent time or money to truly address things from the bottom up. By that I mean we need to gather more input from the communities we serve on what messages resonate with them, what makes them use us as a provider, what we can do better.
Key
Observation
5 Key
Observation
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PCE DEAI SURVEY REPORT | APPENDIX E | 6
• Some things we do like provide rebates to DAC ratepayers have pretty clear benefits, but many programs are hard to assess in terms of direct reduction of greenhouse gas emissions. Every program should be analyzed in terms of GHG reduction, scale, and economic impacts (supplementing energy bills for example may assist people during Covid but is unlikely to reduce GHG). It is hard to understand the impacts until we pilot these programs and quantify the impacts. • I don’t know what happens behind the scenes, I just know that it is not affecting the lives of many folks on the ground (i.e., rebates).
• I don't think multi-dwelling housing has been fully considered, nor has mobile home living.
• Not given any free EVs in my neighborhood.
• I am unclear if this is part of the program evaluation process. • But the problem is in how one defines disadvantaged communities. People who are house rich and may be going hungry because they are fixed income and cash poor and not considered in Calenviroscreen or other ways of measuring disadvantaged communities. So, the basic tools to me are not fair. • It looks like they target poorer zip codes, but unfortunately, I live in 94025. • Again, proper initial communication with proper flow up. • Why can't we just ask about all communities...I think some programs are not based on better pricing to all customers. Some aren't related to more efficient use of energy. Lower costs benefit all, especially the economic disadvantaged ... could save and pass the benefit onto customers. e.g., Why is it pushing for "reach" which is an "over-reach" by the state. Many of these proposal are higher costs to residents and limit personal choice. This doesn't help economically disadvantaged or others.
Favorable Comments:
• I heard they help with installing ramps and other needed equipment in homes which is great!
• It hasn’t been a primary focus and I am grateful we are embarking on this effort. • We think the reroof program led to other energy efficiency programs. • EV charging and access to EV vehicles programs were provided by PCE. • Extremely well from everything I see on the board and on the website. 291
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PCE DEAI SURVEY REPORT | APPENDIX E | 7
• The board assesses every program in light of how it benefits and reaches out to PCE's DACs.
• Board and staff discuss this at length.
• The fact that PCE has reached out to a diverse group of partners is important to us. I would assume this is the intention. Outcomes are what would tell us whether the disadvantaged communities feel they can benefit and/or are observation they can enter into a contemplative state.
• Again, good programs that the end-users may not know a lot about because they're not early adopters. However, if they knew about the cost savings, etc., they would pursue things more directly.
Key Observation 7. When asked “How well does Peninsula
Clean Energy ensure that the design of its programs and services is community driven and meets the needs identified by its communities?” 11.1% selected Not Very Well and Not Very Well at All. (Question 21)
Favorable Comments:
• PCE designs projects that are all about people's daily needs such as HOME
UPGRADE PROGRAM, USED EV REBATE PROGRAM, E-BIKES FOR EVERYONE, HEAT PUMP WATER HEATER REBATES, and SOLAR and BATTERY REBATES. As media partner, we found the positive feedback from our audience. • The CAC and Board are involved in reviewing and helping to assess all of PCE's programs and services.
• Much of the design of the program was made before we actually became contractors. Community partners being selected opens it up to incorporate cultural approaches within natural community networks.
Key
Observation
7 292
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PCE DEAI SURVEY REPORT | APPENDIX E | 8
Needs Improvement/Suggestions Provided:
• The CAC has been a driver of some programs and that has been positive because they represent the communities, but not all communities. For example, in discussing reach codes (that move to complete electrification) with low-income housing providers they have expressed concern about shut offs making their tenants vulnerable without hot water, cooking options and heat. That can be addressed with battery storage, but they do not understand the option or how to comprehensively develop a solution.
• No one has put forth programs that include my demographic. • I think solar and EVs are associated with high income communities, but I think the needs are different for low income communities and I Don’t Know if the leg work has been done to really understand those needs.
• Most programs are focused on the channel.
• Need to provide much more resilience for low-income communities and people of color to public safety power shutdowns and extreme heat blackouts. • I watched PCE spent some big dollars as my city put spending and hiring on hold due to covid impacts on city budget. Money spent on advertising when it has what 94% of the market. So, I felt this was disrespectful of cities. PCE like PGE have a revenue stream that is driven by need, people must use some electricity, some gas, but people don't have to go to hotels which provides TOT to many cities. So, when PCE kept spending money while cities hurt is really at best inconsiderate.
• Efforts are made towards this goal regularly. Can be improved. • "I caveat this in that some programs seem to be driven by what optically looks good from a PC perspective but gets away from focus on rate payers. (NOTE:
I've focused on rate payers because their interests seem to get lost ... or not even mentioned ... in the discussions)"
• Program planning is an iterative process and community identified priorities can shift, regular engagement and cocreation of programs should be integrated into PCE's mission and regular operating procedures.
• Much more to explore. Again, we need to explore what our customer's needs are from the bottom up. Survey!!!
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PCE DEAI SURVEY REPORT | APPENDIX E | 9
• Again, average performance. Residents are still reluctant generally to access "government" support for these things. Working with many diverse spokespersons who are well-loved and respected is always going to go further. • "Need to promote: 1) continue to promote solar but more aggressively, 2) follow up with vendors and customers for additional programs such as water heater conversion from gas to electric, with solar installation, 3) elective car and stove, and 4) customers home energy efficiency- check the before if they pursued to help low-income community"
Key Observation 8. 62.4% of external stakeholders surveyed feel Electricity generation services are accessible to all. (Question 4)
• No open format comment option on survey
Key Observation 9. 63.3% of external stakeholders surveyed feel PCE takes steps to make services inviting and safe. (Question 10)
• No open format comment option on survey
Key Observation 10. When asked “To what extent do
Peninsula Clean Energy staff and representatives reflect the diversity of the communities it serves?” 12% selected Not Very Well and Not Very Well at All. (Question 24)
Key
Observation
8 Key
Observation
9 Key
Observation
10 294
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PCE DEAI SURVEY REPORT | APPENDIX E | 10
Favorable:
• I have seen diversified booths pre-pandemic.
• PCE's staff and representatives are very nice and efficient, they did the positive communication with stakeholders in diverse community and gave them the promotional materials with their own languages and timely response for their needs.
• I think that all significant populations in the county are represented in PCE staff.
Needs Improvement:
• Given that our workforce is a very technical one that requires higher education and specific backgrounds, I think we are fairly well represented with women, and some racial diversity. It is difficult to estimate the LBGTQ diversity. We could do a better job of making sure we push for diversity in candidates and understand our hiring practices to make sure there is no implicit bias! • I do not have access to staff demographics however most of my interactions are with white people. There are many women (yeah!) but not too many people of color. Caveat: I do not know all of the staff and representatives. • PCE board, staff and CAC seems to skew to over represent white, wealthy people. • Could use more people of color in their representation. • But let’s be honest, how would I know, we've been on Zoom for years, not going to the office way down in Woodside/RC, so how would I know. And frankly we live in an ageist society, are older people represented in the workforce? Who knows?
• I do not see African American nor disabled. Generally, in most places personnel is pretty young and smart but don't have the experiences. • As we grow, I anticipate this will improve. Again, we are still a young organization and need to reach out to be more inclusive.
• Could have more diversity in the staff and representation from areas like East Menlo.
• More can be done. The reflection of the "average" SMC resident is clear, but not the diverse community groups.
• The population in Los Banos is very different demographically from that of the peninsula. It will take time for the board and staff to reflect that disparity. 295
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PCE DEAI SURVEY REPORT | APPENDIX E | 11
Key Observation 11. When asked “To what extent does
Peninsula Clean Energy provide clear and transparent
information, assessments, and reporting on the topics of greatest interest to the communities it serves?” 10.2%
selected Not Very Well and Not Very Well at All. (Question 25) Please explain your answer to Question 25:
• Again, our work is technical, so some of our output would have a narrow audience by its nature. We could do a better job of coordinating and communicating all the various programs that are even beyond ours but would benefit GHG reduction. Examples include offerings for multi-family electrification and upgrades offered by other agencies. We could also have a better dashboard on our website to allow users to quickly see our impact and the meeting of our strategic goals.
• It would be useful to have a forum for conversations. • Like I said before they answer all questions.
• Still haven't received my electric bicycle & EV.
• Before I joined the CAC, I had no idea I was a PCE customer. • As a city representative, I would like to get access to more reports (high-level) about energy trends for residential and commercial customers. • To the extent required PCE provides information in a clear and transparent process.
• PCE will let every grantee share the promotion result at bi-monthly meeting.
They will give a comment. They monitored the result of digital promotion of the grantees via the checking links.
• I think that clear assessments and reporting would be good to work on. • Has been hard to find correct facts. I am afraid now that most of my answers really were for BayRen.
Key
Observation
11 296
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PCE DEAI SURVEY REPORT | APPENDIX E | 12
• My city hasn't had the time or bandwidth to advertise to our residents what PCE does or is doing. And I don't feel the need to push out PCE programs if none or very few of our residents qualify. PCE has relatively speaking a huge staff compared to my small city's staff and we are responsible for so many more services. So, if I knew my residents would benefit then maybe I would push the news out more. PCE has a budget for this, we do not.
• Clear programs that are relevant.
• We have not had much of this from my vantage point. We're too busy getting the work done.
• A lot of energy topics are technical. Talk more about the innovative PCE energy sources. Target a broad base with messaging that resonates with words and topics that are important to customers when thinking about energy. People don't trust PG&E. Why can't we push "ENERGY YOU CAN TRUST" or "INVESTING IN YOUR FUTURE WITH PCE", or "CLEAN UP YOUR ACT WITH PCE", or "I INVEST IN MY KIDS FUTURE WITH PCE" or "I CARE ABOUT RESPONSIBLE ENERGY SO I SIGNED UP WITH PCE" or "FLIP THE SWITCH TO PCE".
• Disadvantaged communities need PCE to reach them better. Early adopters are accessing programs at higher numbers than diverse community members. • Through newsletters and media.
• Again, a communication barrier exists between PCE and the community. 297
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PCE DEAI SURVEY REPORT | APPENDIX F| 1
Key Observation 1. 61.7% agree or strongly agree that
Peninsula Clean Energy Leadership (Board, and staff who are at Director-level and above) understands that diversity is critical to our future success. (Question 1)
• No open format comment option on survey
Key Observation 2. 76.4% agree or strongly agree that
Peninsula Clean Energy Leadership provides opportunities for them to grow and advance in their career and at Peninsula Clean Energy regardless of their background. (Question 7) • No open format comment option on survey
Key Observation 3. 14.7% disagree or strongly disagree that Peninsula Clean Energy celebrates and encourages diverse perspectives. (Question 6)
Agree:
• We try to do this through our recruitment for our Citizens Advisory Committee and we specifically reach out to community-based organizations that represent diverse communities.
• My impression is that management is very solicitous of staff input and opinions. • I think so mostly they do. Could get better alignment on diversity and overall organization goals.
Key
Observation
1 Key
Observation
2 Key
Observation
3 298
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PCE DEAI SURVEY REPORT | APPENDIX F| 2
• I feel like my perspectives are heard.
• For example, I've witnessed someone communicating unpopular viewpoints to staff and staff willing to look at the issues from the angle of that presenter and acknowledging that person as having a valid perspective and giving that person unwavering patience and time.
• Peninsula Clean Energy celebrates and encourages diverse perspectives. Our grant program through marketing is just one example.
• Not sure what is meant by celebrate, but perspectives and ideas are heard and respected from all employees.
• I don't know what it would look like to celebrate diverse perspectives in practice. I feel that to the extent that PCE staff is diverse, I feel that all of our opinions and perspectives are valued.
• I see folks from various background when on a Zoom call. • Company is open to input and perspectives from all people, including staff, citizens advisory committee, board, members of the public. At board meetings for example public input is always asked for and graciously received. • I feel very accepted and am able to offer a variety of opinions and perspectives and feel comfortable being a woman in this company.
Disagree:
• PCE actively discourages diverse perspectives. The board and execs make decisions without staff input, while minimizing or ignoring concerns from the public and certain board members. PCE execs instruct staff not to comment or ask questions at board meetings, and they deride comments and concerns from certain board members. Staff who dare to ask questions or voice opinions or concerns are disciplined. Any suggestion that certain groups be included opens you up to ridicule and retaliation.
• The organization could be better at cultivating inclusive input for decision making processes on major decisions (ex: territory expansion). • There could be more opportunities for leadership to solicit feedback, especially anonymously.
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PCE DEAI SURVEY REPORT | APPENDIX F| 3
• PCE's executive leadership is extremely sensitive to hearing other perspectives and often tries to hide decision making so that other opinions are not discussed.
Many important decisions were made when I was an employee that the rest of the company disagreed with and had issues with, and only after the decisions were made did those issues come to light. Even after employee surveys showed that the only issue with the company was executive decision making - the CEO flat-out ignored it.
• Several C-Suite and Director-level staff perpetuate a culture of dismissive arrogance. Expressing new perspectives is not encouraged. It is a struggle to be heard, even on mission-critical points. Employees are pigeon-holed into worthy of being listened to or not, based on how "technical" your background is. The organizational culture is very top-down, the supervisor is always right, and only directors are asked to offer ideas. The organization misses out on fully leveraging its talent.
• Perspectives are really not discussed in regard to diversity.
Neutral:
• Generally, pretty neutral. I wouldn't say PCE "celebrates" diversity or has pride in describing ourselves as a diverse workplace.
• This is very broad. Diverse perspectives on what? Energy-related topics? Or more like personal opinions on hot button topics?
• When communicating to our community, most of our messages resonate with homeowners (solar+storage, electric vehicles). Even though we are doing work with renters, that does not seem to be prioritized.
• I haven't experienced anything where I feel that diverse perspectives were celebrated by PCE. I do think that within my team diversity is applauded, but I don’t think I feel that on an organizational basis.
• It's hard to say when we're not in person but at least the slack chat is tolerant of diverse viewpoints. I don't see any online bullying on slack. • I feel fairly comfortable speaking my mind and sharing my perspective within my team. I struggle with imposter syndrome in regard to participating in conversations at the larger organization level. People are just so experienced and knowledgeable! I feel like some staff and senior leadership values experience over all else.
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• PCE is certainly an organization that respects individuals and their differences, but I haven't seen much done in the way to celebrate those differences or to educate us all on the cultural, sexual orientation, or lifestyle differences within our organization.
• I don't think that our org actively indicates that they value diverse perspectives, so it's hard to address this.
• In my experience, the only ways I saw Peninsula Clean Energy celebrating was through community outreach. Though I feel that was only because of the support from the Senior Outreach Manager and the Marketing Director. • I don't think this is discouraged, but do not think it is specifically encouraged. • Open to staff ideas and opinions.
• We actively try to recruit folks from diverse community sectors on the CAC and seek partnerships with local CBO's serving diverse communities. • Hard to answer as I feel like there are limited opportunities that I hear of directly for input from people outside of PCE, except for Board and CAC meetings. • My sense is that diverse perspectives are sufficiently encouraged for people to feel comfortable, and I have in the past felt comfortable, but I am unsure that others also share that perspective, so I hesitate to answer "strongly agree." Key Observation 4. 73.5% agree or strongly agree that people from all backgrounds and with a range of identities have equitable opportunities to advance their careers at Peninsula Clean Energy. (Question 8)
• No open format comment option on survey
Key Observation 5. 73.5% agree or strongly agree that they feel Peninsula Clean Energy takes steps to make the workplace inviting, safe, and welcoming. (Question 16)
• No open format comment option on survey
Key
Observation
4 Key
Observation
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Key Observation 6. 76.5% agree or strongly agree that they feel comfortable discussing their social and cultural
background in the workplace. (Question 20).
• No open format comment option on survey
Key Observation 7. 26.4% disagree or strongly disagree that Peninsula Clean Energy does a good job sourcing and hiring candidates from underrepresented communities. (Question 4). • No open format comment option on survey
Key Observation 8. 70.6% agree or strongly agree that
Peninsula Clean Energy customer service is accessible to all its customers. (Question 13).
• No open format comment option on survey
Note: Question 13 did not have a comment section. However, Question 14 had an open format comment section that asked a similar question to Q13.
Q13 was a agree/disagree statement: PCE customer service is accessible to all its customers.
Q14: What can PCE do to MAKE its customer service MORE accessible to all persons? Please Explain.
Key
Observation
6 Key
Observation
7 Key
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Contact Information/Access/Call Centers:
• Stop hiding staff contact information. Staff contact information should be published on the website. If the board can publish contact information on the website, so should staff. As a public agency, why is PCE hiding? PCE execs prefer not to engage with members of the public, as if it's beneath them. • Continue to audit call center interactions, especially of customers that call the call center to opt out so we can see why and if it is an issue with our service. • Customer service is available in multiple modes - website and phone. It is not accessible for walk-ins but that's because the office is currently closed. • The only enhancement I could see would be to have live agents available during evening and weekend hrs... but we get so few calls currently during those times that I don't think it would be a good investment.
• Make sure that customer service is available for those that may not have a computer or internet access.
Language:
• Support enhancing capacity of call center to serve customers in multiple languages.
• I am not aware of anything additional that needs to be done. Perhaps there are some languages used in our service area for which our materials are not available.
• Maybe hire more bi-lingual folks? I know Calpine has multi-lingual staff members for the call center, so that's great. Also, so much of the business is done online that it's not very accessible to folks that don't have computers or aren't tech-savvy. That's a really hard one to address, though, in this "day and age". • As described above, we translate our communications through a range of different language to make the information about our organization as accessible as possible. Beyond that, continuing to partner with champions within our community to be liaisons or brand ambassadors for our organization will help further enhance our communities' awareness and access to our services. • Peninsula Clean Energy's customer service has always been great. It is accessible to all customers and Peninsula Clean Energy has made an effort to provide this in the common languages spoken in the area.
• Different formats for communication, languages?
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• Supporting multiple languages.
• Test how smooth the experience is of interacting with our call center when you need a translator. Recruit speakers of languages other than English to call our call center as a customer to check if the translators offer a good customer experience. • People can call or email. If they do not speak English, I suspect that there may be barriers (e.g., delays) in Observation a service rep who speaks their language. I don't know for sure.
• I think customer service is easy for anyone to reach with a call center. I would hope translation services exist in the call center already, but if not, that would be an added benefit.
Miscellaneous:
• I'm not sure. We have a phone number and email - that's how most companies provide contact info.
• I think it is already accessible to all, though it is a different matter if everyone uses it or now. Customer awareness of PCE is not that high. • I'm not familiar with our customer service offerings. • If any problems, they should be reviewed for potential action. • Some customers may find it easier to have in-person interactions, although that is more of a pandemic-induced issue.
• I'm not that informed in this realm - I know many people don't know about Peninsula Clean Energy yet and are not aware of who to call. • Again, I suspect the biggest issue is simply raising brand awareness and communicating to customers that we are here.
Key Observation 9. 88.2% agree or strongly agree that Peninsula Clean Energy electricity generation services are accessible to all its customers. (Question 9)
• No open format comment option on survey
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Key Observation 10. 26.5% disagree or strongly disagree that Peninsula Clean Energy employees are trained to serve a diverse customer base. (Question 2)
• No open format comment option on survey
Key Observation 11. 32.4% think Peninsula Clean Energy can make its electricity generation services more accessible to all persons. (Question 10)
Yes:
• Increased investment of funds, communication, education, and outreach to disadvantaged communities, specifically communities of color with ethnic minorities, is needed. Wealthy white communities already have considerable advantages. Minority and disadvantaged communities are either ignored or receive only token attention because they are not as visible, not as vocal, not as politically engaged or powerful, and are therefore not viewed as important. • Probably? But it's pretty easy already since customers are auto-enrolled. I suspect you can always streamline/make more intuitive/offer more support for older people navigating the website and any required processes. • More programs for low-income customers to help ease energy burden • Peninsula Clean Energy could provide a new rate structure which allows for 0% bill savings versus PG&E and invests the extra percentage in programs or rate structures specifically for disadvantaged or low-income customers. • Not sure if there are ways to make informed opt-up and opt-out decisions more accessible to people of all mental and physical abilities.
Key
Observation
10 Key
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• Since all our customers are opted-in by default, I would think we could make it more accessible only if we continue to be a more affordable option than PG&E. If we can lower our rates, that would make it easier for lower income community to afford it... we could consider a CARE type of rate to match PG&E's current CARE rate.
• For most customers, signing up for PCE services isn't hard, since we are the default, but presumably we can do more to make generation more affordable particularly for low-income customers. That said, staff and board have been interested in addressing these issues.
• A more separate rate structure could prevent customers from thinking PCE is causing their bill increases.
No:
• I work for PCE and don't know what this question is getting at. "Electricity generation services" are a mostly invisible service that we provide, and customers expect to just work. We're mostly only noticeable to customers currently when they pay their bill. I think we can do more in terms of how our customers interface with us, but don't see how electrical generation is a part of that. • It's a universal service.
• Not sure because all customers are opted in to PCE by default, so doesn't that make it accessible to all persons by default? Customers have to actively opt out of using PCE's electricity and choose to use PG&E.
• Anyone can get our electricity. Cost of power is a big issue statewide. Peninsula Clean Energy works to get customers signed up for discount programs like CARE/FERA/DAC GT and works through community-based organizations to do so.
• It's already accessible to all.
• I think that by having PCE as an opt-out program it is automatically accessible to all.
• I don't feel like there's much room for improvement here. • The cost of our generation services is universally offered to all customers. The rates do depend on customers class (residential, commercial, industrial, etc.), but 306
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within a customer class (e.g., residential) the rates are equally accessible.
Additionally, we have lower-incomes discounts to our generation service. We communicate about our service through numerous languages beyond English to help educate our community about our organization and what it does. • Customers within PCE territory are automatically enrolled into the PCE service. • Peninsula Clean Energy electricity generation is available to almost everyone in the County.
• No, because it is already accessible and offered to 100% of the residents and business in the county. Everyone who lives in the county can access PCEs electricity generation services by not opting out. So, I don't see how it could make its services more accessible because it is accessible to everyone who lives here.
Miscellaneous:
• I am not familiar with this area of operations.
• Not aware of a problem in this area.
• Question is unclear - by "services" do you mean electricity or clean energy programs? Electricity is available to all, but certain programs are not. I think PCE does a decent job at targeting programs to low-income folks, though. • I don't know the definition of "all persons".... the CCAs are supposed to serve all persons in their service territory, so there is a physical boundary already. • Through constant education demos.
• We could offer more discounts and credits to customers who are struggling to pay their bills.
• The service is automatically available to everyone...so not sure how to make it 'more' available.
• Not sure how, as the default electricity provider for SMC and LB, we could make it more accessible. Depends, if the "accessible" means the service is available to all customers, or perhaps we provide greater education/tools that are accessible to a wider range of folks to inform them about our generation services, how to reduce bills, comparing rate schedules, etc.
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Key Observation 12. 29.4% disagree or strongly disagree that Peninsula Clean Energy programs such as the HOME UPGRADE
PROGRAM, USED EV REBATE PROGRAM, E-BIKES FOR
EVERYONE, HEAT PUMP WATER HEATER REBATES, and SOLAR
and BATTERY REBATES are accessible to all its customers. (Question 11)
Note: Q11 did not have a comment section. However, Q12 was a follow-up question to Q11.
12. What can Peninsula Clean Energy do to make its programs more accessible to all persons? Please explain.
Marketing/Outreach/Advertising:
• Enable broader participation at all levels. Remove barriers to entry in minority communities and disadvantaged communities. More outreach and advertising to communities of color, with invitations to participate in programs and invitations to provide feedback. PCE execs act like they have all the answers and outside input is not welcome.
• I think that it is possible to further engage communities on the programs PCE offers. Knowledge is power and if many don’t know who PCE is, they likely won’t know the programs and benefits that we offer. Perhaps partnering with community-based organizations, an increase in social media content around the programs offered, in a way that makes it engaging to the audience. • Possibly translation.
• Most of these programs are only targeted at low-income folks, so they are not accessible to everyone. However, that's not a bad thing because being accessible to low-income folks is great. I think naming the "e-bikes for everyone" program that way was really dumb because it's quite literally not "for everyone" and only for a small portion of the County. So maybe instead make programs available to all but have a percentage that has to be allocated to low-income? Key
Observation
12 308
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• We try to work with organizations within our community to provide better outreach and education about the programmatic opportunities that we provide.
While I think we're doing well there, we can probably do more. We try to design out programs through a frame of accessibility and equity, but I think we need to continue to be mindful and deliberate about this.
• Continuously find ways to improve outreach of these programs. • Longer campaigns on high traffic channels teasing campaign before launch. • Programs are designed in a technical vacuum that does not consult with customers or community groups. Design our programs by first talking with our community stakeholders, especially about the proposed program's value and accessibility for underserved communities. When creating a program that excludes renters, create a similar program that benefits renters. Ensure non-English speakers can fully participate in all steps of program outreach and enrollment, at least in Spanish and Chinese.
• More education and outreach about the programs to homeowners, and both landlords and tenants.
• We've made progressive changes to programs over time to respond to customer needs and to try and make them more inclusive and available. For the HPWH program one request I see often is for us to approve self-installs.... which as long as it's permitted seems like a reasonable request to expand access. The solar program is only available to customers who work with SunRun...would like to see more partners.
• More awareness of the programs, especially L/MI components, would enable broader accessibility. Common issue with incentive programs.
Currently Accessible:
• Certain programs that are earlier the process (e.g., home upgrades) are just for low-income homeowners. so many are equity focused, but still for folks who own their home in the Bay Area, which is different segment than renters. In general, I think our programs are very accessible to the community. • Some programs listed are expressly intended as income qualified (Home Upgrade, e-bikes).
• Do more of what we do now: get the word out in a cluttered media environment. 309
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Income:
• Some of these programs are not widely accessible by design. For example, the home upgrade and E-bikes for Everyone programs are income qualified. The HPWH rebate program still requires a pretty significant investment on the part of the customer. So, many customers still cannot afford to take advantage of it. One of our biggest equity issues (as is the case across the state and nation) has to do with income inequality. This is a huge problem but not confined to Peninsula Clean Energy.
• I believe a number of these programs are limited to persons who are income qualified.
• Overall, I feel Peninsula Clean Energy programs are not accessible to all people.
Peninsula Clean Energy has purposefully avoided providing programs for certain income levels. As a governmental agency, I think it is unfair that more program offerings aren't available for a range of incomes.
• Some of these programs like the home upgrade program are only accessible to low-income customers, so it is not a true statement that programs are accessible to all customers. Since accessibility as defined above includes socioeconomic status, some of these programs like solar and battery rebates wouldn't be accessible to someone without the economic means to pay the costs beyond the rebates.
• Technically accessible to all customers, but does it require customers to be low-income? If regardless of income, and first-come-first-served, wouldn't this skew towards customers who can readily afford or are going to do it anyways? Would something like a sliding scale for amount of rebate related to income be better? I don't know too much about the details of the programs.
• Work with San Mateo County to increase homeownership rate among lower income individuals, and to encourage slower growth in rent prices in the community.
• Direct Peninsula Clean Energy funding towards programs for low-income community... EV charging for multifamily, higher rebates with income qualification for other programs. Partner with non-profit such as Grid Alternatives...
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Enrollment/Eligibility:
• Make it easier for people to enroll in programs. Currently our processes for low-income families are quite onerous and time intensive. 2) intentionally create programs that can benefit renters. We talk about programs that benefit homeowners, but we don’t really talk about how we can directly help renters • Some of these have specific eligibility requirements so they cannot be accessible to all.
• Facilitate offline application processes with CBOs to ensure we are reaching underserved populations. Have an "affirmative action" program and prioritize these populations in the application process.
• More programs for renters and engagement with landlords & apartment owners. • Ensure a clear application process is widely known and available for those without access to internet/computers.
Key Observation 13. Less than half (41.1%) agree or strongly agree that Peninsula Clean Energy supports and promotes diversity in its procurement policies and practices. 11.7% disagree or strongly disagree that Peninsula Clean Energy supports and promotes diversity in its procurement policies and practices. (Question 3)
• No open format comment option on survey
Key Observation 14. 67.6% agree or strongly agree that on their team they are able to have discussions on
difficult/uncomfortable topics. (Question 25)
Key
Observation
14 Key
Observation
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Yes:
• My boss fosters good dialogue.
• I have been a part of a few uncomfortable topics, and both sides were able to share their opinions and reach a compromise. It seemed like a fair discussion. • I feel like my team is pretty open to discussing a wide range of topics. We haven't had to have too many difficult topics arise that we have had to discuss. • We talk about social equity in a surface-level way, but I do not know that it always motivates action.
• Agree.
• When people on our team have lost people who are close to them, we've been able to talk about it with them and comfort them.
• Open discussions.
• Tough conversations are sometimes part of work and PCE has been supportive here.
• The specific team I was on created the culture to have those discussions. That did not apply broadly for the organization.
• We have had, and they get uncomfortable.
• My direct manager was great about discussing difficult/uncomfortable topics, but that was because we had a great relationship and thought similarly on things. • I try to make myself available to discuss any topics that my staff wishes to discuss.
I also encourage open and two-way dialogue as much as possible and try to make my schedule flexible to accommodate my staff’s individual constraints. • I think our team has such discussions.
• We can have debates or discuss opposing viewpoints.
• I feel like I've been direct with my team in regard to being open to feedback and that I want to hear if they are having struggles.... I do hope they know I'm sincere about that.
• My team is rather open about our opinions and able to discuss them in a deliberative manner.
• I assume we could have those conversations; however they have not been a priority in the past.
• I think we certainly could, although generally I hesitate to do so. That said I'm more comfortable at PCE than I have ever been at any other employer. 312
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No:
• Attempts to ask certain questions or bring up certain topics are shut down. Staff are trained on a daily basis to stay in line, not to make waves, and not voice concerns. The abuse and intimidation wear down even the strongest people.
Certain non-favorite staff members are targeted and excluded from participation in meetings where their perspectives might bring different outcomes or assist with decision making. Others are harassed and intimidated into submission and silence.
• Certain discussions of management approach and decision-making are routinely discouraged, especially in relation to delegation or strategic considerations such as the financial impact of our 24/7 renewable goal. Frequently topics for senior staff meetings are discouraged unless they've first been vetted by the CEO. • We don’t have that many uncomfortable topics, a lot of those topics seem to be swept under the rug.
• My team does not discuss difficult or uncomfortable topics.
Neutral:
• I would think so, but don't know because we haven't had any discussions on difficult or uncomfortable topics.
• We have not had any such conversations.
• I'm not sure we've had any discussions on difficult/uncomfortable topics. • I think people in workplaces, for the most part, are not open communicating sensitive topics anyway, which I think is the right thing to do. We are here to get work done, not debating. Ha!
• I hope this is true.
Mixed:
• Team members were supportive, some more than others.
• Uncomfortable topics that are not discussed are: how much everyone is paid, salary ranges for different levels, expected salary increases based on performance ratings. These are not discussed. I am not aware of other difficult/uncomfortable topics that may be on the minds of my fellow staff members. 313
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Key Observation 15. 20% have experienced unwelcomed
comments or conduct at Peninsula Clean Energy that they felt were offensive, embarrassing, or hurtful. (Question 22).
Yes:
• Very rarely. But when it does happen, it's inappropriate jokes from one of the male staff that make meetings awkward.
• I heard someone use the phrase "off the reservation" in a debrief session after RFP interviews.
• I did not experience this directly, but I have witnesses it happening to other staff firsthand from Leadership.
• For our in-person meeting in March, it was joked several times that we will finally be able to see how tall everyone is. Not necessarily hurtful unless certain people are sensitive about their height.
• Not directed at me or anyone in particular, but there was a recent comment on an all-staff meeting discussing a future in-person all-staff meeting and a joke was made that we'd be able to see who put on weight since the last time we were in the office. Strikes me as inappropriate.
No:
• I have not.
• I have not experienced unwelcome comments or conduct at Peninsula Clean Energy.
• Colleagues were great and open minded.
• I have never experienced this.
• I have not experienced any unwelcome comments or conduct at PCE. • In my experience, staff are respectful and professional. • I have not experienced all of this.
• Never experienced any sort of unwelcomed comments.
Key
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• Have not. Very professional environment.
• I have no such experience.
• I have not experienced any unwelcome comments or conduct. • I have not experienced any offensive behaviors at Peninsula Clean Energy. • Nothing I have seen.
• Haven't experienced it.
Neutral:
• There used to be a pervasive culture of gossip. I didn’t feel those comments personally, but it was quite visible. Two things changed 1) most of those people are no longer working at the company 2) we are all working remotely. I would say this is not an issue anymore.
Key Observation 16. 11.8% disagree or strongly disagree that they feel comfortable talking about issues of racism on their team. (Question 26)
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Observation
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Item No. 11
PENINSULA CLEAN ENERGY AUTHORITY
JPA Board Correspondence
DATE: July 15, 2022
BOARD MEETING DATE: July 28, 2022
SPECIAL NOTICE/HEARING: None
VOTE REQUIRED: Majority Present
TO: Honorable Peninsula Clean Energy Authority Board of Directors FROM: Jan Pepper, Chief Executive Officer, Peninsula Clean Energy Authority Chelsea Keys, Senior Manager, Power Resources
SUBJECT: California Community Power (CC Power) Geothermal Power Purchase Agreements
RECOMMENDATION:
Resolution Delegating Authority to the Chief Executive Officer to Execute Necessary Agreements with California Community Power and Participating Community Choice Aggregators for Renewable Resources from Ormat Nevada Inc. and Open Mountain Energy, LLC as follows:
1. Ormat Nevada Inc. (Ormat) - Portfolio of Geothermal Projects a. Project Participation Share Agreement (PPSA) between Peninsula Clean Energy Authority, CC Power and participating community choice aggregators (Attachment 1)
b. Power Purchase Agreement (PPA) - Buyer Liability Pass Through Agreement (BLPTA) between Peninsula Clean Energy Authority, CC Power and Ormat Nevada Inc. (Attachment 2)
c. Expected Participation Share of 17.1% or 10.94 MW with quantity not to exceed 21.38 MW
d. Delivery term of 20 years starting on or about June 1, 2024 e. Dollar authority not to exceed $405,000,000
2. Open Mountain Energy LLC., (OME) - Fish Lake Geothermal a. Project Participation Share Agreement (PPSA) between Peninsula Clean Energy Authority, CC Power and participating community choice aggregators (Attachment 3)
b. Power Purchase Agreement (PPA) - Buyer Liability Pass Through Agreement 316
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(BLPTA) between Peninsula Clean Energy Authority, CC Power and OME (Attachment 4)
c. Expected Participation Share of 17.8% or 2.31 MW
d. Delivery term of 20 years starting on or about April 1, 2024 e. Dollar authority not to exceed $41,000,000
BACKGROUND:
The board set a goal for Peninsula Clean Energy to procure 100% of its energy supply from renewable energy by 2025. One set of technologies that will help Peninsula Clean Energy to meet this goal is geothermal renewable resources. Geothermal produces electricity in all hours of the day, with some seasonal variability but otherwise steady 24x7 generation. Peninsula Clean Energy’s participation in these projects is helping to bring online new geothermal resources to serve its customers as well as other California community choice customers.
CPUC MTR Procurement Mandate
Through the 2020 Integrated Resource Planning (IRP) proceeding, the California Public Utilities Commission (CPUC) identified the need for additional clean energy resources and capacity including firm and/or baseload clean resources, and storage resources, to enable grid integration of a large fleet of intermittent resources to meet California’s greenhouse gas emission reduction goals and to replace several methane gas once-through-cooling (OTC) power plants that are scheduled to be shut down, and the Diablo Canyon Nuclear Power Plant (DCNPP) slated to retire between in 2024 and 2025.
Subsequently, on June 24, 2021, the California Public Utilities Commission (CPUC) adopted D.21-06-035. This decision is commonly known as the mid-term reliability (MTR Order) procurement mandate. It directs load serving entities (LSEs) to collectively procure 11,500 MW1 of new resources between 2023 to 2026 to meet mid-term grid reliability needs. The decision requires that contracts have a term of at least 10 years and that resources be zero-emission or eligible under the California renewable portfolio standard (RPS). Specific category requirements were assigned to 4,500 MW of the requirement.
Procurement Category 2023 2024 2025 2026 Total
Zero-emissions
generation, generation
paired with storage, or
demand response
resources2
- - 2,500 - 2,500
1 Requirement measured as net qualifying capacity (NQC) rather than nameplate capacity. The CPUC issued a report identifying what percent of a technology’s nameplate capacity would count toward this requirement. This means that each LSE’s nameplate capacity is higher than the requirement identified in the decision.
2 Zero-emissions resources required to replace Diablo Canyon must be procured by 2025 but may occur in any of the years 2023-2025; therefore, the columns do not add to the total. 317
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Firm zero-emitting
resources
- - - 1,000 1,000
Long-duration storage
resources
- - - 1,000 1,000
Remaining New
Capacity Required
- - 7,000
Total Annual Net
Qualifying Capacity
(NQC) Requirements
2,000 6,000 1,500 2,000 11,500
One of the categories of the MTR Order identified a need of 1,000 MW of new incremental capacity from Firm Clean Resources (FCR) delivered from geothermal and/or biomass resources with an online date by August 2026.
Peninsula Clean Energy’s share of the MTR Order is 19 MW NQC which is determined based on load ratio share of the CPUC’s jurisdictional load and equivalent to roughly 23 MW of nameplate capacity.
Formation of CC Power
In 2020, a group of CCAs came together to discuss forming a joint powers authority (JPA) called California Community Power (CC Power) to leverage their combined buying power to provide cost effective joint services, programs, and procurement of energy resources and products. In January 2021, Peninsula Clean Energy’s Board voted for Peninsula Clean Energy to become a member of CC Power. The other CCAs that are members of CC Power include MCE, 3CE, SVCE, SJCE, RCEA, VCE, SCP, EBCE, and CPSF.
On January 18, 2022, the PCE Board approved participation in the first CC Power Agreement with Tumbleweed Energy Storage LLC to meet Peninsula Clean Energy’s 19 MW long duration storage requirement set forth in D.21-06-035.
Joint CCA Request for Information and Offers
In October 2021, CC Power issued the Firm Clean Energy Resources RFO to seek resources that meet the requirements set forth in D.21-06-035 to procure new resources with at least 80% capacity factor that must not be subject to use limitations or be weather dependent with a requirement to achieve commercial operation before or in 2026.
Offers were due on December 13, 2021 and CC Power received 6 offers for 16 projects, of the 6 offers 5 were from projects located in Nevada. In collaboration with staff from the participating CCAs, these projects were evaluated and scored based on value to the CCAs, development status, transmission feasibility, ability to meet resource adequacy requirements, project development experience, as well as compliance with workforce policy and environmental impact. Two developers were shortlisted, one project from OME and the portfolio of new geothermal projects from Ormat. These projects met the 318
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requirements of D.21-06-035, provided the best economics at the least cost, demonstrated satisfactory development experience, and complied with workforce and environmental policies. The remaining four projects that were not shortlisted were either expensive with poor economics and/or had high transmission risk which means there was potential that the CCAs may not receive Resource Adequacy. There are a limited number of new geothermal, biomass, and biogas resources that qualify in meeting the FCR requirements so CC Power began negotiations with the two shortlisted projects right away.
On May 31, 2022, CC Power Board of Directors, with Peninsula Clean Energy as a voting member, unanimously approved Resolutions to delegate authority to CC Power General Manager to execute the two PPAs, one with ORGP LLC (Ormat) and one with Fish Lake Geothermal LLC. The PPAs will become effective once all eight participating CCAs obtain their governing approvals to execute the associated Project Participation Share Agreements, which define the allocations each CCA will receive from both PPAs.
Overview of Projects
1. Ormat Geothermal Portfolio
Project Name ORGP LLC (Ormat Geothermal Portfolio)
Developer Ormat Nevada, Inc. (Ormat)
Technology Geothermal
Capacity Total between 64 to 125 MWs
PCE’s expected share: 10.94 -21.38 MW
Commercial Operation Date Varies but expect 6/1/2024, 20 years Location Nevada and Imperial Valley, CA
Price Fixed $/MWh, no escalation
Ormat will provide the project participants with a portfolio of new geothermal projects located primarily in Nevada with one project expected in Imperial Valley, California. The precise capacity per project is not known yet as the projects are still under development.
At a minimum, the portfolio will provide 64 MW and will not exceed 125 MW. As projects become further in their development, project participants will be given the opportunity to elect projects to the portfolio if they meet the contract requirements. Ormat will provide notice to CC Power when they want to propose a project be added to the contract which will include the construction and commercial operation timeline for that project. All projects must satisfy RPS PCC1 and for the project to be eligible for Resource Adequacy (RA) the participants will need to obtain necessary import capability rights to qualify the capacity as imported RA into CAISO. In the event Peninsula Clean Energy or other participants are unable to obtain import allocation rights for a specific project, the participants may decline that project from being added to the portfolio. Declining a project, for this reason, may limit the total available capacity that Ormat can add to the portfolio, which is the primary reason for the capacity not being fixed, rather the min and max range allows the total contracted capacity to be between 64 – 125 MW. Projects may come online between June 1, 2024 and December 31, 2026, unless both parties 319
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agree to extend it or the CPUC extends the FCR procurement decline in D.21-06-035 to a date later than December 31, 2026. The Ormat geothermal projects will deliver enough energy to meet approximately 1.9 – 3.6% of Peninsula Clean Energy's annual energy needs.
Developer
Ormat is a leading geothermal company, which owns, operates, designs, manufactures and sells geothermal power plants primarily based on the Ormat Energy Converter – a power generation unit that converts low-, medium- and high-temperature heat into electricity. Ormat has engineered, manufactured, and constructed power plants totaling over 3,000 MW of gross capacity and currently owns a generating portfolio of 1,100 MW (net), spread globally in the United States (California, Nevada, Oregon, Idaho and Hawaii), Guatemala, Guadeloupe, Kenya and Indonesia. In March, Peninsula Clean Energy executed a 15-year Power Purchase Agreement with Second Imperial Geothermal Company, a 26 MW geothermal resource being developed by Ormat which is located in Imperial County, CA.
Environmental Review
Peninsula Clean Energy staff worked with several environmental non-profits to develop a system for evaluating the environmental impact of projects for our RFOs and we carried this into the FCR RFO. Specifically, we asked each bidder to provide a geospatial footprint of their project. During the evaluation period, staff studied the geospatial footprint of the project to evaluate whether the project is located in a restricted or high conflict area for renewable energy development. These areas include but are not limited to:
• Protected areas at the federal, state, regional, local level (e.g. County-designated conservation areas, BLM Areas of Critical Environmental Concern, critical habitat for listed species, national, state, county parks, etc.). • Identified and mapped important habitat and habitat linkages, especially for threatened and endangered species (either state or federally listed).
Further, projects that are located in areas designated for renewable energy development or in areas that are not suitable for other developmental activities, such as EPA re-power sites, receive positive environmental scores.
For this project, the analysis showed that this project will not impact any federal, state, local or other conservation designations or planning effort. Additionally, the project is not located in an area not suitable for renewable energy development as identified by the Renewable Energy Transmission Initiative (RETI)3
Workforce Requirements
For Nevada projects, all construction work shall comply with either a) the Nevada prevailing wage requirements, or b) the developer may apply for the State of Nevada Renewable Energy Tax Abatement (RETA)4 program under the Nevada Governor’s Office of Energy. The RETA program requires a construction workforce no less than 3 RETI: https://reti.databasin.org/ 4 RETA: https://energy.nv.gov/Programs/Renewable_Energy_Tax_Abatements/ 320
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50% of Nevada residents, who are paid no less than 175% of statewide average annual wages5 and receive health insurance satisfying RETA regulations. The developer is required to certify that it has complied with Nevada prevailing wage or RETA requirements. CC Power can request an audit of the US DOL Wage and Hour Division Forms WH 347 to validate compliance.
For California projects, all construction work shall either a) comply with the California prevailing wage requirements or b) ensure that any new construction work for the facility contracted by the developer is under a Project Labor Agreement.
2. Fish Lake Geothermal
Project Name Fish Lake Geothermal LLC
Developer Open Mountain Energy (OME)
Technology Geothermal
Capacity Total 13 MWs
PCE’s expected share: 2.31 MW
Commercial Operation Date 4/1/2024, 20 years
Location Nevada
Price Fixed $/MWh, no escalation
The OME Fish Lake Geothermal project is 13 MW of new capacity located in Esmeralda County, Nevada. The project will meet RPS PCC1 requirements and provide RA, provided Peninsula Clean Energy obtains the import capability rights which are required by CAISO to count the capacity as RA. Peninsula Clean Energy is obligated to take its allocation of the agreement regardless of whether it is able to obtain the necessary import capability to receive RA. However, per the agreement, OME may deliver to an alternate location if import capability can’t be acquired from the preferred location so there is a better probability to secure the import capability by having two options.
Peninsula Clean Energy’s expected share from Fish Lake Geothermal is 2.31 MW of capacity and will deliver enough energy to meet approximately 0.5% of Peninsula Clean Energy's annual energy needs.
Developer
Open Mountain Energy combines its geothermal and project development expertise with their parent company, Kaishan Energy Group, in power plant technologies and manufacturing to form a cutting-edge industry leading vertically integrated geothermal energy company. Kaishan Energy Group has over 150 MW of operating geothermal projects globally utilizing similar technology.
Environmental Review
Peninsula Clean Energy staff worked with several environmental non-profits to develop a system for evaluating the environmental impact of projects for our RFOs and we carried this into the FCR RFO. Specifically, we asked each bidder to provide a geospatial 5 https://energy.nv.gov/uploadedFiles/energynvgov/content/Programs/Nevada%20Statewide%20Average%20Wage %20for%20Green%20Industry%20Abatements%202020(1).pdf
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footprint of their project. During the evaluation period, staff studied the geospatial footprint of the project to evaluate whether the project is located in a restricted or high conflict area for renewable energy development. These areas include but are not limited to:
• Protected areas at the federal, state, regional, local level (e.g. County-designated conservation areas, BLM Areas of Critical Environmental Concern, critical habitat for listed species, national, state, county parks, etc.). • Identified and mapped important habitat and habitat linkages, especially for threatened and endangered species (either state or federally listed).
Further, projects that are located in areas designated for renewable energy development or in areas that are not suitable for other developmental activities, such as EPA re-power sites, receive positive environmental scores.
For this project, the analysis showed that this project will not impact any federal, state, local or other conservation designations or planning effort. Additionally, the project is not located in an area not suitable for renewable energy development as identified by the Renewable Energy Transmission Initiative (RETI)6
Workforce Requirements
Similar to Ormat’s requirements for Nevada projects above, all construction work shall comply with either a) the Nevada prevailing wage requirements, or b) the developer may apply for the State of Nevada Renewable Energy Tax Abatement (RETA)7 program under the Nevada Governor’s Office of Energy. The RETA program requires a construction workforce no less than 50% Nevada residents, who are paid no less than 175% of statewide average annual wages8 and receive health insurance satisfying RETA regulations. The developer is required to certify that it has complied with Nevada prevailing wage or RETA requirements. CC Power can request an audit of the US DOL Wage and Hour Division Forms WH 347 to validate compliance.
Participating CCAs
Eight of the CC Power CCAs are participating in this contract. The CCAs and their shares of the project are identified in the table below. The project’s capacity was allocated to the CCAs based on their obligation under the CPUC MTR procurement mandate.
CCA
Nameplate
Capacity
Obligation
MW
Ormat
Entitlement
Share
Ormat
Allocation
Minimum
MW
Ormat
Allocation
Maximum
MW
Fish Lake
Entitlement
Share
Fish Lake
Allocation
MW
3CE 24.0 17.9% 11.46 22.38 18.6% 2.42
6 RETI: https://reti.databasin.org/ 7 RETA: https://energy.nv.gov/Programs/Renewable_Energy_Tax_Abatements/ 8 https://energy.nv.gov/uploadedFiles/energynvgov/content/Programs/Nevada%20Statewide%20Average%20Wage %20for%20Green%20Industry%20Abatements%202020(1).pdf
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CPSF 18.7 13.9% 8.90 17.38 14.5% 1.89
PCE 23.0 17.1% 10.94 21.38 17.8% 2.31
RCEA 3.6 3.2% 2.05 4.00 2.8% 0.36
SJCE 26.0 19.6% 12.54 24.50 17.4% 2.26
SVCE 18.0 13.4% 8.58 16.75 14.0% 1.82
SCPA 15.1 11.2% 7.17 14.00 11.7% 1.52
VCE 4.8 3.7% 2.37 4.63 3.2% 0.42
Total 133.3 100.0% 64.00 125.00 100.0% 13.00
For Peninsula Clean Energy, we receive between 10.94 – 21.38 MW of capacity from the Ormat agreement and 2.31 MW from Fish Lake Geothermal which leaves Peninsula Clean Energy potentially 9.74 MW short of meeting its 23 MW FCR nameplate requirement or with 0.69 MW in excess of its requirement, as shown in the table below.
PCE Remaining
Obligation w/ Ormat
Min MW
PCE Remaining
Obligation w/ Ormat
Max MW
9.74 -0.69
Contract Structure
CC Power will enter into the Power Purchase Agreement (PPA) directly with both project companies, Ormat Nevada, Inc and Fish Lake Geothermal LLC. This agreement covers standard terms, including, among others, timelines for construction and commercial operations, payment timelines, Seller security requirements, default provisions, operating parameters and guarantees and operations and maintenance requirements.
Peninsula Clean Energy will execute the following agreements:
• Project Participation Share Agreement (PPSA): This agreement will be executed by CC Power and each of the participating CCAs. This agreement conveys the project benefits (energy, resource adequacy, ancillary services) from CC Power to each of the CCAs. It also details payment timelines from each CCA to CC Power and covers terms and procedures if a CCA does not make payments when due and if a CCA needs to be removed from the contract for non-performance. Under this agreement, each CCA commits to a 25% “step-up” obligation. If one of the participating CCAs defaults and is removed from the agreement, each CCA commits to take additional capacity up to 25% of its initial share. Under this agreement, each CCA also commits to pre-pay three months of expected project payments. This provides a cushion to CC Power to allow it to make payments to the project developer on a timely basis.
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• Buyer Liability Pass Through Agreement (BLPTA): This agreement will be executed by Peninsula Clean Energy, CC Power and with each project company, Ormat Nevada, Inc and Fish Lake Geothermal LLC. The form of this agreement is an appendix to the PPA. This agreement is a guaranty by Peninsula Clean Energy of its share of payment obligations under the PPA.
DISCUSSION:
Peninsula Clean Energy’s expected share of the combined geothermal projects is between 13.26 MW and 23.69 MW, meeting a minimum of 57% (leaving 9.74 MW remaining) or up to 102% (0.69 MW in excess) of the FCR mandate assigned to Peninsula Clean Energy.
Staff is asking the Board to approve up to 21.38 MW from Ormat Geothermal Portfolio and 2.31 MW from Fish Lake Geothermal, a combined 23.69 MW of nameplate capacity.
Each of the participating CCAs is asking its Board for cushion to allow them to proceed with this project in case there are changes in share allocation due to any CCA not receiving their Board’s approval. This will also cover situations where there is a step-up event. We do not anticipate any CCA to not receive approval, but this will avoid the need to go back to each of the CCA Boards for re-approval, which could cause CC Power to miss the 90-day requirement for securing approval under the PPSA.
The Strategic Plan approved by the Board in 2020 set Peninsula Clean Energy’s Priority One to “design a power portfolio that is sourced by 100% renewable energy by 2025 that aligns supply and consumer demand on a 24x7 basis”. FCR will play a key role in meeting Peninsula Clean Energy’s goals for time-coincident renewable energy.
FISCAL IMPACT:
The fiscal impact of Peninsula Clean Energy’s share of the Ormat Geothermal Portfolio will not exceed $405 million over the 20-year term of the agreement.
The fiscal impact of Peninsula Clean Energy’s share of the Fish Lake Geothermal will not exceed $41 million over the 20-year term of the agreement.
STRATEGIC PLAN:
The Ormat Geothermal Portfolio and Fish Lake geothermal projects support the following objectives in Peninsula Clean Energy’s strategic plan:
• Priority 1: Design a power portfolio that is sourced by 100% renewable energy by 2025 that aligns supply and consumer demand on a 24/7 basis • Power Resources Goal 1: Secure sufficient, low-cost, clean sources of electricity that achieve Peninsula Clean Energy's priorities while ensuring reliability and meeting regulatory mandates
ATTACHMENTS:
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Ormat Nevada Inc. (Ormat) Portfolio of Geothermal Project Agreements • Project Participation Share Agreement – Attachment 1
• Ormat Power Purchase Agreement (Redacted Version) – Attachment 2 o Buyer Liability Pass Through Agreement (Appendix L PPA) Fish Lake Geothermal Project Agreements
• Project Participation Share Agreement – Attachment 3
• Fish Lake Power Purchase Agreement (Redacted Version) – Attachment 4 o Buyer Liability Pass Through Agreement (Exhibit L PPA) 325
RESOLUTION NO. _____________
PENINSULA CLEAN ENERGY AUTHORITY, COUNTY OF SAN MATEO, STATE OF
CALIFORNIA
* * * * * *
RESOLUTION DELEGATING AUTHORITY TO THE CHIEF EXECUTIVE OFFICER TO
EXECUTE NECESSARY AGREEMENTS WITH CALIFORNIA COMMUNITY POWER
AND PARTICIPATING COMMUNITY CHOICE AGGREGATORS FOR RENEWABLE RESOURCES FROM ORMAT NEVADA INC. AND OPEN MOUNTAIN ENERGY, LLC RESOLVED, by the Peninsula Clean Energy Authority of the County of San Mateo, State of California, that
WHEREAS, the Peninsula Clean Energy Authority (“Peninsula Clean Energy”) was formed on February 29, 2016; and
WHEREAS, launch of service for Phase I occurred in October 2016, and launch of service for Phase II occurred in April 2017; and
WHEREAS, Peninsula Clean Energy is purchasing energy, renewable energy, carbon-free energy, resource adequacy and related products and services (the “Products”) to supply to its customers; and
WHEREAS, Peninsula Clean Energy is a member of the California Community Power (CC Power) joint powers authority; and
WHEREAS, Peninsula Clean Energy has regulatory obligations to procure firm clean resources (FCR); and
326
WHEREAS, Peninsula Clean Energy, in coordination with the other members of CC Power, conducted a request for offers for FCR projects and engaged in negotiations with Ormat for a portfolio of geothermal projects and Open Mountain Energy for the Fish Lake geothermal project; and
WHEREAS, consistent with its mission of reducing greenhouse gas emissions by expanding access to sustainable and affordable energy solutions, Peninsula Clean Energy seeks to execute agreements to effectuate its purchase of its share of energy from the geothermal projects based on the project’s desirable offering of products, pricing, and terms; and
WHEREAS, the geothermal projects will contribute toward the Board’s goal for Peninsula Clean Energy to procure 100% of its energy supply from renewable energy by providing renewable energy for a term of 20 years, with the Fish Lake project starting on or about April 1, 2024 and the Ormat portfolio will begin on or about June 1, 2024; and
WHEREAS, the geothermal projects will contribute to Peninsula Clean Energy’s regulatory requirement to procure FCR; and
WHEREAS, staff is presenting to the Board for its review the Power Purchase Agreements, Buyer Liability Pass Through Agreements, and Project Participation Share Agreements, reference to which should be made for further particulars; and WHEREAS, the Board wishes to delegate to the Chief Executive Officer authority to execute the Buyer Liability Pass Through Agreements, and Project Participation 327
Share Agreements and any other ancillary documents required for said purchase of energy storage from the project.
NOW, THEREFORE, IT IS HEREBY DETERMINED AND ORDERED that the Board delegates authority to the Chief Executive Officer to:
Approve Resolution Delegating Authority to Chief Executive Officer to execute on behalf of Peninsula Clean Energy as a member of California Community Power (CC Power) the agreements for renewable geothermal resources as follows:
1. Ormat Nevada Inc. (Ormat) - Portfolio of Geothermal Projects a. Project Participation Share Agreement (PPSA) between Peninsula Clean Energy Authority, CC Power and participating community choice aggregators (Attachment 1)
b. Power Purchase Agreement (PPA) - Buyer Liability Pass Through Agreement (BLPTA) between Peninsula Clean Energy Authority, CC Power and Ormat Nevada Inc. (Attachment 2)
c. Expected Participation Share of 17.1% or 10.94 MW with quantity not to exceed 21.38 MW
d. Delivery term of 20 years starting on or about June 1, 2024 e. Dollar authority not to exceed $405,000,000
2. Open Mountain Energy LLC., (OME) - Fish Lake Geothermal a. Project Participation Share Agreement (PPSA) between Peninsula Clean Energy Authority, CC Power and participating community choice aggregators (Attachment 3)
b. Power Purchase Agreement (PPA) - Buyer Liability Pass Through Agreement (BLPTA) between Peninsula Clean Energy Authority, CC Power and OME (Attachment 4)
c. Expected Participation Share of 17.8% or 2.31 MW
d. Delivery term of 20 years starting on or about April 1, 2024 e. Dollar authority not to exceed $41,000,000
* * * * * *
328
ORGP LLP GEOTHERMAL PORTFOLIO
PROJECT PARTICIPATION SHARE AGREEMENT
among
CENTRAL COAST COMMUNITY ENERGY
and
CITY AND COUNTY OF SAN FRANCISCO, ACTING BY AND THROUGH ITS
PUBLIC UTILITIES COMMISSION CLEANPOWERSF
and
PENINSULA CLEAN ENERGY
and
REDWOOD COAST ENERGY AUTHORITY
and
CITY OF SAN JOSÉ, ADMINISTRATOR OF SAN JOSÉ CLEAN ENERGY and
SILICON VALLEY CLEAN ENERGY
and
SONOMA CLEAN POWER
and
VALLEY CLEAN ENERGY
and
CALIFORNIA COMMUNITY POWER
Attachment B to Resolution 22-05-04
329
TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS....................................................................................................... 2
1.1. Definitions.............................................................................................................. 2
1.2. Rules of Interpretation ......................................................................................... 13 ARTICLE 2 EFFECTIVE DATE AND TERM...................................................................... 14
2.1. Term..................................................................................................................... 14 ARTICLE 3 AGREEMENT..................................................................................................... 14
3.1. Transaction........................................................................................................... 14
3.2. RPS Compliance. ................................................................................................. 15 ARTICLE 4 ENTITLEMENT SHARE................................................................................... 15
4.1. Initial Entitlement Share ...................................................................................... 15
4.2. Change of Entitlement Share. .............................................................................. 15
4.3. Reduction of Entitlement Share to Zero .............................................................. 15 ARTICLE 5 OBLIGATIONS OF CCP; ROLE OF CCP BOARD AND CCP MANAGER .................................................................................................. 16
5.1. Obligations of CCP.............................................................................................. 16
5.2. Role of CCP Board. ............................................................................................. 19
5.3. Role of CCP Manager.......................................................................................... 21 ARTICLE 6 PROJECT COMMITTEE.................................................................................. 22
6.1. Establishment and Authorization of the Project Committee................................ 22
6.2. Project Committee Membership .......................................................................... 22
6.1. Project Committee Operations, Meetings, and Voting ........................................ 22
6.2. Project Committee Responsibilities..................................................................... 22
6.3. Subcommittees..................................................................................................... 26
6.4. Representative’s Expenses................................................................................... 26
6.5. Inaction by Committee......................................................................................... 26
6.6. Delegation ............................................................................................................ 26 ARTICLE 7 [RESERVED]....................................................................................................... 26 ARTICLE 8 OPERATING ACCOUNT.................................................................................. 26
8.1. Calculation of Estimated Monthly Project Cost. ................................................. 26
8.2. Operating Account............................................................................................... 26 ARTICLE 9 BILLING.............................................................................................................. 27
9.1. Monthly Costs...................................................................................................... 27
9.2. Billing Statements................................................................................................ 27
9.3. Disputed Monthly Billing Statement ................................................................... 27
9.4. Payment Adjustments; Billing Errors.................................................................. 28
9.5. Payment of Invoice Amount ................................................................................ 28 330
ii
9.6. Withdrawal of Invoice Amount from Operating Account................................... 28
9.7. Late Payments...................................................................................................... 28 ARTICLE 10 UNCONDITIONAL PAYMENT OBLIGATIONS;
AUTHORIZATIONS; CONFLICTS; LITIGATION.............................. 29
10.1. Unconditional Payment Obligation...................................................................... 29
10.2. Authorizations...................................................................................................... 29
10.3. Conflicts............................................................................................................... 29
10.4. Litigation.............................................................................................................. 29
10.5. San José Clean Energy......................................................................................... 29
10.6. Clean Power San Francisco ................................................................................. 30 ARTICLE 11 PROJECT SPECIFIC MATTERS AND PROJECT
PARTICIPANTS’ RIGHTS AND OBLIGATIONS UNDER THE
PPA................................................................................................................ 30
11.1. CCP Rights and Obligations under the PPA........................................................ 30
11.2. Obligations of CCP and Project Participants to Maximize the Economic and Compliance Value of the Project. ................................................................. 31 ARTICLE 12 NONPERFORMANCE AND PAYMENT DEFAULT.................................. 31
12.1. Nonperformance by Project Participants ............................................................. 31
12.2. Payment Default................................................................................................... 32
12.3. Payment Default Notice....................................................................................... 32
12.4. Cured Payment Default........................................................................................ 32
12.5. Suspension of Project Participant’s Project Revenue Rights............................... 32
12.6. Termination and Disposal of Project Participant’s Project Rights ...................... 33
12.7. Step-Up Invoices.................................................................................................. 33
12.8. Step-Up Allocation of Project Participant’s Project Rights................................. 34
12.9. Elimination or Reduction of Payment Obligations.............................................. 36 ARTICLE 13 LIABILITY ........................................................................................................ 37
13.1. Project Participants’ Obligations Several ............................................................ 37
13.2. No Liability of CCP or Project Participants, Their Directors, Officers, Etc.; CCP, The Project Participants’ and CCP Manager’s Directors, Officers, Employees Not Individually Liable ...................................................... 37
13.3. Extent of Exculpation; Enforcement of Rights.................................................... 37
13.4. No General Liability of CCP ............................................................................... 37
13.5. Indemnification .................................................................................................... 38 ARTICLE 14 NOTICES ........................................................................................................... 38
14.1. Addresses for the Delivery of Notices................................................................. 38
14.2. Acceptable Means of Delivering Notice.............................................................. 38 ARTICLE 15 ASSIGNMENT .................................................................................................. 38
15.1. General Prohibition on Assignments ................................................................... 38 ARTICLE 16 GOVERNING LAW AND DISPUTE RESOLUTION.................................. 39 331
iii
16.1. Governing Law .................................................................................................... 39
16.2. Dispute Resolution............................................................................................... 39 ARTICLE 17 MISCELLANEOUS .......................................................................................... 39
17.1. Entire Agreement; Integration; Exhibits.............................................................. 39
17.2. Amendments ........................................................................................................ 39
17.3. No Waiver............................................................................................................ 39
17.4. Severability .......................................................................................................... 39
17.5. Counterparts......................................................................................................... 40
17.6. Electronic Delivery .............................................................................................. 40
17.7. Binding Effect...................................................................................................... 40
17.8. Forward Contract ................................................................................................. 40
17.9. City of San Francisco Standard Provisions.......................................................... 40
17.10. City of San José Standard Provisions. ................................................................. 42
17.11. Further Assurances............................................................................................... 43 EXHIBIT A NOTICES............................................................................................................. A-1
EXHIBIT B SCHEDULE OF PROJECT PARTICIPANT ENTITLEMENT SHARES AND STEP-UP ALLOCATION CAPS ............................................................... B-1
EXHIBIT C PROCEDURE FOR VOLUNTARY REDUCTION OF PROJECT
PARTICIPANT’S ENTITLEMENT SHARE...................................................... C-1 EXHIBIT D PROJECT COMMITTEE OPERATIONS, MEETINGS, AND VOTING......... D-1 332
1 ORGP LLP GEOTHERMAL PORTFOLIO
PROJECT PARTICIPATION SHARE AGREEMENT
PREAMBLE
This Project Participation Share Agreement (“Agreement”) is entered into as of _________ (the “Effective Date”), by and among Central Coast Clean Energy, a California joint powers authority, the City and County of San Francisco acting by and through its Public Utilities Commission, CleanPowerSF, Peninsula Clean Energy, a California joint powers authority, Redwood Coast Energy Authority, a California joint powers authority, City of San José, a California municipality, Silicon Valley Clean Energy, a California joint powers authority, Sonoma Clean Power, a California joint powers authority, and Valley Clean Energy, a California joint powers authority (each individually a “Project Participant” and collectively referred to as the “Project Participants”) and California Community Power (“CCP”), a California joint powers authority.
CCP and the Project Participants 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 CCP is a Joint Powers Authority, was formed for the purpose of developing, acquiring, constructing, owning, managing, contracting for, engaging in, or financing electric energy generation and storage projects, and for other purposes; and WHEREAS, the Project Participants have participated with CCP in the negotiation of an agreement for purchase of the electric output of a portfolio of geothermal powered electric generating plants (the “Project” as described in Section 3.1 of the PPA), and CCP is to enter into a Renewable Power Purchase Agreement (“PPA”), which is incorporated herein by this reference, with ORGP LLC, a Delaware limited liability company (“Project Developer”), providing for purchase of the electric output, and associated rights, benefits, and credits from the Project on behalf of the Project Participants.
WHEREAS, pursuant to this Agreement, CCP shall cause to deliver to each Project Participant the Project Participant’s associated share of the electric output and associated rights, benefits, and credits of the Project.
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:
333
2 ARTICLE 1
DEFINITIONS
1.1. 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 8.6(c) of the PPA. “Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in Control of, is under Control by, or is under common Control with such Person. “Agreement” has the meaning set forth in the Preamble and any Exhibits, schedules, and any written supplements hereto.
“Amended Annual Budget” means the budget approved by the Project Committee and adopted by the CCP Board pursuant to Section 5.1(c) of this Agreement. “Ancillary Services” means all ancillary services, products and other attributes, if any, associated with the installed capacity of the Project.
“Annual Budget” means the budget approved by the Project Committee and adopted by the CCP Board pursuant to Section 5.1(c) of this Agreement. “Authorized Representative” has the meaning set forth in Section 1.1 of the PPA. “Bankrupt” or “Bankruptcy” means, with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due.
“Billing Statement” has the meaning set forth in Section 9.2 of this Agreement. “Buyer Liability Pass Through Agreement” or “BLPTA” means, for each Project Participant, the form set forth in Appendix L of the PPA, as executed by such Project Participant, countersigned by CCP, and delivered to the Project Developer. “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. 334
3 “CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“CAISO Balancing Authority Area” has the meaning set forth in the CAISO Tariff. “CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including the rules, protocols, procedures, and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC.
“California Renewables Portfolio Standard” or “RPS” means the renewables portfolio standard program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time, and as administered by the CEC as set forth in CEC RPS Eligibility Guidebook (9th Ed.), as may be subsequently modified by the CEC, and the CPUC as set forth in CPUC Decision (“D.”) 08-08-028, D.08-04-009, D.10-03-021, D.11-01-025, D.11-12-020, D.11-12-052, D.12-06-038, D.13-11-024, D.14-12-023, D.17-06-026, and D.19-02-007, and as may be modified by subsequent decisions of the CPUC or by subsequent legislation and regulations promulgated with respect thereto.
“Capital Improvements” means any unit of property, property right, land or land right which is a replacement, repair, addition, improvement or betterment to the Project or any transmission facilities relating to, or for the benefit of, the Project, the betterment of land or land rights or the enlargement or betterment of any such unit of property constituting a part of the Project or related transmission facilities which is (i) consistent with Prudent Utility Practices and determined necessary and/or desirable by the CCP Board or (ii) required by any governmental agency having jurisdiction over the Project.
“CCP Board” means the Board of Directors of California Community Power. “CCP Manager” means the General Manager of California Community Power. “CEC” means the California Energy Commission, or any successor agency performing similar statutory functions.
“Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of power that the Project can generate or deliver to the Delivery Point at a particular moment and that can be purchased,sold, or conveyed under CAISO or CPUC market rules, including Resource Adequacy Benefits. “Capacity Buydown Damages” means any liquidated damages paid by the Project Developer to CCP pursuant to Section 3.7(a) of the PPA. 335
4 “CEQA” means the California Environmental Quality Act, as amended or supplemented from time to time.
“Chairperson” has the meaning set forth in Exhibit D.
“Change of Control” has the meaning set forth in Section 1.1 of the PPA. “Compliance Costs” has the meaning set forth in Section 8.6(c) of the PPA. “Commercial Operation” has the meaning set forth in Section 1.1 of the PPA. “Commercial Operation Date” or “COD” has the meaning set forth in Section 1.1 of the PPA.
“Community Choice Aggregator” has the meaning set forth in California Public Utilities Code § 331.1.
“Confidential Information” has the meaning set forth in Section 14.21(a) of the PPA. “Control” means (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. “Construction Start” has the meaning set forth in Section 1.1 of the PPA. “Contract Price” has the meaning set forth on the Cover Sheet of the PPA. “Contract Year” means (a) the period beginning on the Commercial Operation Date of the first Facility to achieve Commercial Operation, as determined pursuant to Section 3.5 of the PPA, and ending on December 31st of that year, and (b) each succeeding period of twelve (12) consecutive months following the period described in the preceding clause (a) until the end of the Delivery Term; provided that, unless the Commercial Operation Date for the last Facility to achieve Commercial Operation occurs on January 1st of any Contract Year, the last Contract Year will be shorter than twelve (12) months..
“Costs” means, with respect to a Project Participant assuming all or a portion of a Defaulting Project Participant’s Entitlement Share pursuant to the process set forth in Section
12.8(b) or 12.8(c), brokerage fees, commissions and other similar third-party transaction costs and expenses reasonably incurred by such Project Participant in terminating any arrangement pursuant to which it has hedged its obligations; and all reasonable attorneys’ fees and expenses incurred by the Project Participant in connection with the Step-Up Allocation. “CPUC” means the California Public Utilities Commission, or successor entity. “Cured Payment Default” means a Payment Default that has been cured in accordance with Section 12.4 of this Agreement.
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5 “Damage Payment” has the meaning set forth in Section 1.1 of the PPA. “Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Day-Ahead Schedule” has the meaning set forth in the CAISO Tariff. “Default” has the meaning set forth in Section 13.1 of the PPA. “Defaulting Project Participant” has the meaning set forth in Section 12.1. “Delay Damages” has the meaning set forth in Section 3.7(a) of the PPA. “Delivered Energy” has the meaning set forth in Section 1.1 of the PPA. “Delivery Term” has the meaning set forth in Section 2.2 of the PPA. “Delivery Term Security” has the meaning set forth in Section 5.9(b) of the PPA. “Designated Fund” has the meaning set forth in Section 10.5. “Effective Date” has the meaning set forth in the Preamble. “Electric Metering Devices” has the meaning set forth in Section 1.1 of the PPA. “Eligible Renewable Energy Resource” has the meaning set forth in California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25741(a), as either code provision is amended or supplemented from time to time. “Energy” means electrical energy, measured in kilowatt-hours or Megawatt-hours or multiple units thereof.
“Energy Management System” or “EMS” means the Project’s energy management system.
“Entitlement Share” means the percentage entitlement of each Project Participant as set forth in Exhibit B of this Agreement (entitled “Schedule of Project Participant Entitlement Shares and Step-Up Allocation Caps”) attributable to each such Project Participant, as may be amended pursuant to Section 4.2 or 12.8.
“Entitlement Share Reduction Amount” has the meaning set forth in Exhibit C. “Entitlement Share Reduction Compensation Amount” has the meaning set forth in Exhibit C.
“Entitlement Share Reduction Notice” has the meaning set forth in Exhibit C. “Estimated Monthly Project Cost” has the meaning set forth in Section 8.1. “Facility” has the meaning set forth in Section 1.1 of the PPA. 337
6 “Facility Energy” has the meaning set forth in Section 1.1 of the PPA. “FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“Force Majeure” has the meaning set forth in Section 14.6 of the PPA. “Gains” means, with respect to a Project Participant assuming all or a portion of a Defaulting Project Participant’s Entitlement Share pursuant to the process set forth in Section
12.8(b) or 12.8(c), an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from such Step-Up Allocation for the remaining Delivery Term of the PPA, determined in a commercially reasonable manner. Factors used in determining the economic benefit to such Project Participant may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of such Project Participant, 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., NP-15), all of which should be calculated for the remaining Delivery Term, and include the value of Green Attributes and Capacity Attributes.
“GHG Regulations” means Title 17, Division 3 (Air Resources), Chapter 1 (Air Resources Board), Subchapter 10 (Climate Change), Article 5 (Emissions Cap), Sections 95800 to 96023 of the California Code of Regulations, as amended or supplemented from time to time. “Governmental Authority” means any federal, state, provincial, local, or municipal government, any political subdivision thereof or any other governmental, congressional, or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO; provided, “Governmental Authority” shall not in any event include any Party, except to the extent that the Party is acting solely in its governmental capacity.
“Green Attributes” means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the generation from each Facility, or, as applicable, from any facility that generates Replacement Energy, and, in each case, its displacement of conventional energy generation. Green Attributes include but are not limited to Renewable Energy Credits, as well as: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; (3) the reporting rights to these avoided emissions, such as Green Tag Reporting Rights. Green Tags are accumulated on a MWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Delivered Energy. Green Attributes do not include (i) any energy, capacity, reliability or other power attributes from each Facility, (ii) production tax credits associated with the construction or operation of each Facility and other financial incentives 338
7 in the form of credits, reductions, or allowances associated with each Facility that are applicable to a state or federal income taxation obligation, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular preexisting pollutants or the promotion of local environmental benefits, (iv) emission reduction credits encumbered or used by each Facility for compliance with local, state, or federal operating or air quality permits, or (v) “portfolio energy credits” as defined in Nevada Revised Statutes Section 704.7803 associated with the Parasitic Load of any Facility. “Green Tag Reporting Rights” means the right of a purchaser of renewable energy to report ownership of accumulated “green tags” in compliance with and to the extent permitted by applicable law and include, without limitation, rights under Section 1605(b) of the Energy Policy Act of 1992, and any present or future federal, state or local certification program or emissions trading program, including pursuant to the WREGIS Operating Rules. “Greenhouse Gas” or “GHG” has the meaning set forth in the GHG Regulations or in any other applicable Laws.
“Indemnifying Party” has the meaning set forth in Section 13.5. “Interest Rate” has the meaning set forth in Section 11.3 of the PPA. “Invoice Amount” has the meaning set forth in Section 9.2. “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 January 29, 2021, as amended from time to time, under which CCP is organized as a Joint Powers Authority in accordance with the Joint Powers Act.
“kWh” means a kilowatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“Late Payment Notice” means a notice issued by CCP to a Project Participant pursuant to Section 9.7.
“Late Payment Charge” has the meaning set forth in Section 9.7. “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.
“Letter(s) of Credit” has the meaning set forth in Section 1.1 the PPA. “Losses” means, with respect to a Project Participant assuming all or a portion of a Defaulting Project Participant’s Entitlement Share pursuant to the process set forth in Section 339
8 12.8(b) or 12.8(c), an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from such Step-Up Allocation for the remaining Delivery Term of the PPA, determined in a commercially reasonable manner. Factors used in determining economic loss to such Project Participant may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Project Participant, 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., NP-15), all of which should be calculated for the remaining Delivery Term of the PPA and must include the value of Green Attributes and Capacity Attributes.
“Month” means a calendar month.
“Monthly Costs” has the meaning set forth in Section 9.1. “Monthly Payment” means the payment required to be made by CCP to Project Developer each month of the Delivery Term as compensation for the Product, as calculated in accordance with Section 11.2 of the PPA and Appendix A of the PPA. “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 Strike Price” has the meaning set forth in Section 1.1 of the PPA. “NERC” means the North American Electric Reliability Corporation. “Net Qualifying Capacity” or “NQC” has the meaning set forth in the CAISO Tariff. “Non-Defaulting Project Participant” has the meaning set forth in Section 12.1. “Normal Vote” has the meaning set forth in Exhibit D.
“Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or electronic messaging (e-mail).
“Operating Account” means an account established by CCP for each Project Participant pursuant to Section 8.2.
“Operating Cost” means the share of the Annual Budget or Amended Annual Budget attributable to the applicable Month for a Billing Statement plus any Accepted Compliance Costs approved by the CCP Board pursuant to Section 5.2(a)(xiii). “Party” has the meaning set forth in the Preamble.
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9 “Payment Default” has the meaning set forth in Section 12.2. “Payment Default Termination Deadline” has the meaning set forth in Section 12.6. “Parasitic Load” has the meaning set forth in Section 1.1 of the PPA. “Permitted Transferee” has the meaning set forth in Section 1.1 of the PPA. “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.
“Power Purchase Agreement” or “PPA” means the agreement between CCP and Project Developer for the purchase of the electric output of the Project, executed on _________________. “PPA Defaulting Party” means a “Defaulting Party” as defined in in Section 13.1 of the PPA.
“PPA Non-Defaulting Party” means a “Non-Defaulting Party” as defined in Section 13.3 of the PPA.
“PMAX” means the applicable CAISO-certified maximum operating level of the Facility. “PMIN” means the applicable CAISO-certified minimum operating level of the Facility. “PNode” has the meaning set forth in the CAISO Tariff.
“Product” has the meaning set forth in Section 3.1
“Progress Report” means a progress report including the items set forth in Appendix O of the PPA.
“Project” has the meaning set forth in Section 1.1 of the PPA. “Project Committee” means the committee established in accordance with Section 6.1. “Project Development Security” has the meaning set forth in Section 5.9(a) of the PPA. “Project Developer” means ORGP LLC or assignee as permitted under the PPA. “Project Participants” means those entities executing this Agreement, as identified in the Preamble, together in each case with each entity’s successors or assigns. “Project Revenue Rights” means all rights of a Project Participant under this Agreement to any revenue associated with the Facility Energy, Capacity Attributes, Ancillary Services, or Green Attributes associated with the Project.
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10 “Project Rights” means all rights and privileges of a Project Participant under this Agreement, including but not limited to its Entitlement Share, its right to receive the Product from the Project, and its right to vote on Project Committee matters. “Project Rights and Obligations” means the Project Participants’ Project Rights and obligations under the terms of this Agreement.
“Proposed Entitlement Share Reduction Compensation Amount” has the meaning set forth in Exhibit C.
“Proposed Facility” has the meaning set forth in Section 3.1 of the PPA. “Prudent Operating Practice” means (a) the applicable practices, methods and acts required by or consistent with applicable Laws and reliability criteria, and otherwise engaged in or approved by a significant portion of the electric industry during the relevant time period with respect to grid-interconnected, utility-scale generating 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 generating facilities in the Western United States. Prudent Operating Practice shall include compliance with applicable Laws, applicable safety and reliability criteria, and the applicable criteria, rules and standards promulgated in the National Electric Safety Code and the National Electrical Code, as they may be amended or superseded from time to time, including the criteria, rules, and standards of any successor organizations.
“Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “RA Compliance Showing” means the RAR compliance or advisory showings (or similar or successor showings) that an entity is required to make to the CAISO pursuant to the CAISO Tariff, to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the Resource Adequacy Rulings, or to any Governmental Authority. “RA Deficiency Amount” has the meaning set forth in Section 1.1 of the PPA. “RA Shortfall Month” has the meaning set forth in Section 1.1 of the PPA. “Real-Time Market” has the meaning set forth in the CAISO Tariff. “REC” or “Renewable Energy Credit” means a certificate of proof associated with the generation of electricity from an Eligible Renewable Energy Resource, which certificate is issued through the accounting system established by the CEC pursuant to California Public Utilities Code Section 399.25 and satisfies the requirements of California Public Utilities Code Section 399.12(h), evidencing that one (1) MWh of energy was generated and delivered from such Eligible Renewable Energy Resource. Such certificate is a tradable environmental commodity (also known as a “green tag”) for which the owner of the REC can prove that it has purchased renewable energy. 342
11 “Reliability Network Upgrades” has the meaning set forth in the CAISO Tariff. “Replacement Energy” has the meaning set forth in Section 9.2 of the PPA. “Replacement RA” has the meaning set forth in Section 1.1 of the PPA. “Resource Adequacy Benefits” means the rights and privileges attached to a Facility that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in any Resource Adequacy Rulings and includes local, zonal or otherwise locational attributes associated with a Facility (if any).
“Resource Adequacy Requirements” or “RAR” means the resource adequacy requirements applicable to an entity as established by the CAISO pursuant to the CAISO Tariff, by the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority.
“Resource Adequacy Resource” has the meaning used in Resource Adequacy Rulings. “Resource Adequacy Rulings” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024, 14-06-050, 15-06-063, 16-06-045, 17-06-027, 18-06-030, 18- 06-031, 19-02-022, 19-06-026, 19-10-021, 20-01-004, 20-03-016, 20-06-002, 20-06-031, 20-06- 028, 20-12-006, 21-06-035 and any other existing or subsequent ruling or decision, or any other resource adequacy laws, rules or regulations enacted, adopted or promulgated by any applicable Governmental Authority, however described, as such decisions, rulings, Laws, rules or regulations may be amended or modified from time-to-time.
“Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” has a corollary meaning.
“Scheduled Energy” has the meaning set forth in Section 1.1 of the PPA. “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.
“Settlement Interval” has the meaning set forth in the CAISO Tariff. “Settlement Period” has the meaning set forth in the CAISO Tariff. “Showing Month” means the calendar month of the Delivery Term, commencing with the Showing Month that contains the RA Guarantee Date, that is the subject of the RA Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the CAISO Tariff. For illustrative purposes only, pursuant to the CAISO Tariff and Resource Adequacy Rulings in effect as of the Effective Date, the monthly RA Compliance Showing made in June is for the Showing Month of August.
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12 “Site” has the meaning set forth in Section 1.1 of the PPA. “Step-Up Allocation Cap” has the meaning set forth in Section 12.8(a). “Step-Up Invoice” means an invoice sent to a Non-Defaulting Project Participant as a result of a Defaulting Project Participant’s Payment Default, which invoice shall separately identify any amount owed with respect to the monthly Billing Statement of the Defaulting Project Participant, as the case may be, pursuant to Section 12.7. “Step-Up Invoice Amount” has the meaning set forth in Section 12.7. “Step-Up Invoice Amount Cap” has the meaning set forth in Section 12.7. “Step-Up Reserve Account” has the meaning set forth in Section 12.7(a)(i). “System Emergency” has the meaning set forth in Section 1.1 of the PPA. “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 Delivery 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. “Termination Payment” has the meaning set forth in Section 1.1 of the PPA. “Transmission Provider” has the meaning set forth in Section 1.1 of the PPA. “Transmission System” means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service downstream from the Delivery Point.
“Unanimous Vote” has the meaning set forth in Exhibit D. “Uncontrollable Forces” means any Force Majeure event and any cause beyond the control of any Party, which by the exercise of due diligence such Party is unable to prevent or overcome, including but not limited to, failure or refusal of any other Person to comply with then existing contracts, an act of God, fire, flood, explosion, earthquake, strike, sabotage, epidemic or pandemic (excluding impacts of the disease designated COVID-19 or the related virus designated SARS-CoV-2 impacts actually known by the Party claiming the event of Force Majeure as of the Effective Date), an act of the public enemy (including terrorism), civil or military authority including court orders, injunctions and orders of governmental agencies with proper jurisdiction or the failure of such agencies to act, insurrection or riot, an act of the elements, failure of equipment, a failure of any governmental entity to issue a requested order, licenseor permit, inability of any Party or any Person engaged in work on the Project to obtain or ship materials or equipment because of the effect of similar causes on suppliers or carriers. Notwithstanding the foregoing, Uncontrollable Forces as defined herein shall also include events of Force Majeure pursuant to the PPA, as defined therein.
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13 1.2. Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Article, Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless otherwise specified;
(e) a reference to a document or agreement, including this Agreement shall mean such document, agreement or this Agreement including any amendment or supplement to, or replacement, novation, or modification of this Agreement, but disregarding any amendment, supplement, replacement, novation or modification made in breach of such document, agreement or this Agreement;
(f) a reference to a Person includes that Person’s successors and permitted assigns;
(g) the terms “include” and “including” mean “include or including (as applicable) without limitation” and any list of examples following such term shall in no way restrict or limit the generality of the word or provision in respect of which such examples are provided;
(h) references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified, or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires; (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 345
14 Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings;
(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; and
(n) in the event of any conflict or inconsistency between the terms of this Agreement and the terms of the PPA, the terms and provisions of this Agreement shall control.
ARTICLE 2
EFFECTIVE DATE AND TERM
2.1. Term.
(a) The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect until the occurrence of all of the following: (i) the termination of the PPA and (ii) the termination of the Buyer Liability Pass Through Agreement for all the Project Participants, and (iii) all Parties have met their obligations under this Agreement (“Term”). (b) Applicable provisions of this Agreement shall continue in effect after termination to the extent necessary to enforce or complete the duties, obligations or responsibilities of the Parties arising prior to termination. All indemnity and audit rights shall remain in full force and effect for three (3) years following the termination of this Agreement.
ARTICLE 3
AGREEMENT
3.1. Transaction. Subject to the terms and conditions of this Agreement, the Project Participants authorize CCP to purchase all Facility Energy, Capacity Attributes, Ancillary Services, and Green Attributes associated with the Project, any Replacement RA, or Replacement Energy provided pursuant to the PPA (collectively the “Product”), on behalf of the Project Participants. CCP shall cause Project Developer to deliver each Project Participant’s Entitlement Share of the Product to such Project Participant, including but not limited to (i) any revenue associated with the Facility Energy, Capacity Attributes, Ancillary Services, or Green Attributes associated with the Project, and (ii) the Capacity Attributes and Green Attributes associated with the Project or otherwise provided to CCP pursuant to the PPA. To the extent that any Facility Energy, Capacity Attributes, Ancillary Services, or Green Attributes associated with the Project, any Replacement RA, or Replacement Energy are delivered to CCP, then CCP shall transfer each Project Participant’s Entitlement Share of such Facility Energy, Capacity Attributes, Ancillary Services, or Green Attributes to the Project Participants. CCP shall cause all Facility Energy and associated Green Attributes delivered to the Project Participants by the Project Developer, and shall deliver to the Project Participants all Facility Energy and associated Green Attributes that CCP receives from the Project Developer, on a fully bundled basis in order to meet the requirements of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(1). CCP shall administer the PPA and oversee the operation of the Project. CCP shall not sell, assign, or otherwise transfer any Product, or any portion thereof, to any third party 346
15 other than to the Project Participants, unless authorized by the Project Participants pursuant to this Agreement.
3.2. RPS Compliance.
(a) CCP represents and warrants that:
(i) the Product and any Replacement Energy purchased by CCP on behalf of the Project Participants consists of Energy and Green Attributes only from Eligible Renewable Energy Resources of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(1);
(ii) the Energy and Green Attributes that are delivered to Project Participants by Project Developer, or delivered to Project Participants by CCP to the extent Project Developer delivers Energy and Green Attributes to CCP, consists only of Energy and Green Attributes that have not yet been generated prior to the commencement of the term of the PPA or the Effective Date of this Agreement;
(iii) the Energy that is delivered to Project Participants by Project Developer, or delivered to Project Participants by CCP to the extent Project Developer delivers Energy to CCP, shall be transferred to each Project Participant in real time; and (b) If the PPA includes an agreement to dynamically transfer electricity to a California balancing authority, then any transactions implemented under this Agreement are not contrary to any condition imposed by a balancing authority participating in the dynamic transfer arrangement.
ARTICLE 4
ENTITLEMENT SHARE
4.1. Initial Entitlement Share. Each Project Participant’s initial Entitlement Share as of the Effective Date shall be set forth in Column B of the Table provided in Exhibit B of this Agreement (entitled “Schedule of Project Participant Entitlement Shares and Step-Up Allocation Caps”). Any revisions to the Entitlement Share specified in Exhibit B pursuant to Section 4.2. or Section 12.8 shall be considered an element of the administration of this Agreement and shall not require the consent of the Parties hereto.
4.2. Change of Entitlement Share.
(a) Any Project Participant may reduce its Entitlement Share of the Project pursuant to the process set forth in Exhibit C.
(b) Upon each occurrence of CCP accepting a Proposed Facility pursuant to Section 3.1 of the PPA, the CCP Board may consider and approve a change to the Entitlement Shares of the Project Participants.
4.3. Reduction of Entitlement Share to Zero. If any Project Participant’s Entitlement Share is reduced to zero through any process specified in Exhibit C, such Project Participant shall 347
16 remain a Party to this Agreement and shall be subject to all rights, obligations, and liabilities of this Agreement, including but not limited to any liabilities for Monthly Payments, Damage Payment, or Termination Payment, as applicable, and any other damage payments or reimbursement amounts under the PPA.
ARTICLE 5
OBLIGATIONS OF CCP; ROLE OF CCP BOARD AND CCP MANAGER
5.1. Obligations of CCP.
(a) CCP shall take such commercially reasonable actions or implement such commercially reasonable measures as may be necessary or desirable for the utilization, maintenance, or preservation of the rights and interests of the Project Participants in the Project including, if appropriate, such enforcement actions or other measures as the Project Committee or CCP Board deems to be in the Project Participants’ best interests. To the extent not inconsistent with the PPA or other applicable agreements, CCP may also be authorized by the Project Participants to assume responsibilities for planning, designing, financing, developing, acquiring, insuring, contracting for, administering, operating, and maintaining the Project to effectuate the conveyance of the Product to Project Participants in accordance with Project Participants’ Entitlement Shares.
(b) To the extent such services are available and can be carried forth in accordance with the PPA, CCP shall also provide such other services, as approved by the Project Committee or CCP Board, as may be deemed necessary to secure the benefits and/or satisfy the obligations associated with the PPA.
(c) Adoption of Annual Budget. The Annual Budget and any amendments to the Annual Budget shall be prepared and approved in accordance with this Section 5.1(c). (i) The CCP Manager will prepare and submit to the Project Committee a proposed Annual Budget at least ninety (90) days prior to the beginning of each Contract Year during the term of this Agreement. The proposed Annual Budget shall be based on the prior Contract Year’s actual costs and shall include reasonable estimates of the costs CCP expects to incur during the applicable Contract Year in association with the administration of the PPA, including the cost of insurance coverages that are determined to be attributable to the Project by action of the CCP Board. Upon approval of the proposed Annual Budget by a Normal Vote of the Project Committee, the CCP Manager shall present the proposed Annual Budget to the CCP Board.
The CCP Board shall adopt the Annual Budget no later than thirty (30) days prior to the beginning of such Contract Year and shall cause copies of such adopted Annual Budget to be delivered to each Project Participant.
(ii) At any time after the adoption of the Annual Budget for a Contract Year, the CCP Manager may prepare and submit to the Project Committee a proposed Amended Annual Budget for and applicable to the remainder of such Contract Year. The proposal shall (A) explain why an amendment to the Annual Budget is needed, (B) compare estimated costs against actual costs, and (C) describe the events that triggered the need for additional funding. Upon approval of the proposed Amended Annual Budget by a Normal Vote of the Project Committee, 348
17 the CCP Manager shall present the proposed Amended Annual Budget to the CCP Board. Upon adoption of the Amended Annual Budget by the CCP Board, such Amended Annual Budget shall apply to the remainder of the Contract Year and the CCP Board shall cause copies of such adopted Amended Annual Budget to be delivered to each Project Participant. (iii) Reports. CCP will prepare and issue to Project Participants the following reports each quarter of a year during the Term:
(A) Financial and operating statement relating to the Project. (B) Variance report comparing the costs in the Annual Budget versus actual costs, and the status of other cost-related issues with respect to the Project. (d) Records and Accounts. CCP will keep, or cause to be kept, accurate records and accounts of the Project as well as of the operations relating to the Project, all in a manner similar to accepted accounting methodologies associated with similar projects. All transactions of CCP relating to the Project with respect to each Contract Year shall be subject to an annual audit.
Each Project Participant shall have the right at its own expense to examine and copy the records and accounts referred to above on reasonable notice during regular business hours. (e) Information Sharing. Upon CCP’s request, each Project Participant agrees to coordinate with CCP to provide such information, documentation, and certifications that are reasonably necessary for the design, financing, refinancing, development, operation, administration, maintenance, and ongoing activities of the Project, including information required to respond to requests for such information from any federal, state, or local regulatory body or other authority.
(f) Consultants and Advisors Available. CCP shall make available to the Project Committee all consultants and advisors, including financial advisors and legal counsel that are retained by CCP, and such consultants, counsel and advisors shall be authorized to consult with and advise the Project Committee on Project matters. CCP agrees to waive any conflicts of interest or any other applicable professional standards or rules as required by consultants, counsel, and advisors to advise the Project Committee on Project matters. (g) Deposit of Insurance Proceeds. CCP shall promptly deposit any insurance proceeds received by CCP from any insurance obtained pursuant to this Agreement or otherwise associated with the Project into the Operating Accounts of the Project Participants based on each Project Participants’ Entitlement Shares.
(h) Liquidated and Other Damages. Any amounts paid to CCP, or applied against payments otherwise due by CCP pursuant to the PPA or each Project Participant’s respective BLPTA, by the Project Developer shall be deposited on a pro rata share, based on each Project Participant’s Entitlement Share into each Project Participant’s Operating Account.
Liquidated damages include, but are not limited to Delay Damages, RA Deficiency Amount, Capacity Buydown Damages, Shortfall Liquidated Damages, Damage Payment, and Termination Payment.
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18 (i) Green Attributes. CCP shall take such actions or implement such measures as may be necessary to facilitate the transfer of Green Attributes from the Project Developer to the Project Participants.
(j) Resale of Product. Any Project Participant may direct CCP to remarket such Project Participant’s Entitlement Share of the Product, or such Project Participant’s Entitlement Share of any part of the Product. If CCP incurs any expenses associated with the remarketing activities pursuant to this Section 5.1(j), then CCP shall include the total amount of such expenses as a Monthly Cost on the Project Participant’s next Billing Statement. Prior to offering the Project Participant’s Entitlement Share of the Product, or the Project Participant’s Entitlement Share of any part of the Product to any third party, CCP shall first offer the Product or portion of the Product to the other Project Participants. The amount of compensation paid to the selling Project Participant shall be negotiated and agreed to between the selling Project Participant and the purchasing Project Participant or third party. Any payments for any resold Product pursuant to this Section 5.1(j) shall be transmitted directly from the purchasing Project Participant or purchasing third party to the reselling Project Participant. Any such resale to a third party shall not convey any rights or authority over the operation of the Project, and the Project Participant shall not make a representation to the third party that the resale conveys any rights or authority over the operation of the Project.
(k) Uncontrollable Forces. CCP shall not be required to provide, and CCP shall not be liable for failure to provide, the Product, Replacement RA, or other service under this Agreement when such failure, or the cessation or curtailment of, or interference with, the service is caused by Uncontrollable Forces or by the failure of the Project Developer, or its successors or assigns, to obtain any required governmental permits, licenses, or approvals to acquire, administer, or operate the Project; provided, however, that the Project Participants shall not thereby be relieved of their obligations to make payments under this Agreement except to the extent CCP is so relieved pursuant to the PPA, and provided further that CCP shall pursue all applicable remedies against the Project Developer under the PPA and distribute any remedies obtained pursuant to Section 5.1(h).
(l) Insurance. Within one hundred and eighty days (180) of the Effective Date of this Agreement, CCP shall secure and maintain, during the Term, insurance coverage as follows:
(i) Commercial General Liability. CCP shall maintain, or cause to be maintained, commercial general liability insurance, including products and completed operations and personal injury insurance, in a minimum amount of One Million Dollars ($1,000,000) per occurrence, and an annual aggregate of not less than Two Million Dollars ($2,000,000), endorsed to provide contractual liability in said amount, specifically covering CCP’s obligations under this Agreement and including each Project Participant as an additional insured. (ii) Employer’s Liability Insurance. CCP, if it has employees, shall maintain Employers’ Liability insurance with limits of not less than One Million Dollars ($1,000,000.00) for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the One Million Dollar ($1,000,000) policy limit will apply to each employee. 350
19 (iii) Workers’ Compensation Insurance. CCP, if it has employees, shall also maintain at all times during the Term workers’ compensation and employers’ liability insurance coverage in accordance with statutory amounts, with employer’s liability limits of not less than One Million Dollars ($1,000,000.00) for each accident, injury, or illness; and include a blanket waiver of subrogation.
(iv) Business Auto Insurance. CCP shall maintain at all times during the Term business auto insurance for bodily injury and property damage with limits of One Million Dollars ($1,000,000) per occurrence. Such insurance shall cover liability arising out of CCP’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement and shall name each Project Participant as an additional insured and contain standard cross-liability and severability of interest provisions. (v) Public Entity Liability Insurance. CCP shall maintain public entity liability insurance, including public officials’ liability insurance, public entity reimbursement insurance, and employment practices liability insurance in an amount not less than One Million Dollars ($1,000,000) per claim, and an annual aggregate of not less than One Million Dollars ($1,000,000) and CCP shall maintain such coverage for at least two (2) years from the termination of this Agreement.
(m) Evidence of Insurance. Within ten (10) days after the deadline for securing insurance coverage specified in Section 5.1(l), and upon annual renewal thereafter, CCP shall deliver to each Project Participant certificates of insurance evidencing such coverage with insurers with ratings comparable to A-VII or higher, and that are authorized to do business in the State of California, in a form evidencing all coverages set forth above. Such certificates shall specify that each Project Participant shall be given at least thirty (30) days prior Notice by CCP in the event of cancellation or termination of coverage. Such insurance shall be primary coverage without right of contribution from any insurance of each Project Participant. Any other insurance maintained by CCP not associated with this Agreement is for the exclusive benefit of CCP and shall not in any manner inure to the benefit of Project Participants. The general liability, auto liability and worker’s compensation policies shall be endorsed with a waiver of subrogation in favor of each Project Participant for all work performed by CCP, its employees, agents and sub-contractors.
5.2. Role of CCP Board.
(a) The rights and obligations of CCP under the PPA shall be subject to the ultimate control at all times of the CCP Board. The CCP Board, shall have, in addition to the duties and responsibilities set forth elsewhere in this Agreement, the following duties and responsibilities, among others:
(i) Dispute Resolution. The CCP Board shall review, discuss and attempt to resolve any disputes among CCP, any of the Project Participants, and the Project Developer relating to the Project, the operation and management of the Project, and CCP’s rights and interests in the Project.
(ii) PPA. The CCP Board shall have the authority to review, modify, and approve, as appropriate, all amendments, modifications, and supplements to the PPA. 351
20 (iii) Capital Improvements. The CCP Board shall review, modify, and approve, if appropriate, all Capital Improvements undertaken with respect to the Project and all financing arrangements for such Capital Improvements. The CCP Board shall approve those budgets or other provisions for the payments associated with the Project and the financing for any development associated with the Project.
(iv) Committees. The CCP Board shall exercise such review, direction, or oversight as may be appropriate with respect to the Project Committee and any other committees established pursuant to this Agreement.
(v) Budgeting. Upon the submission of a proposed Annual Budget or proposed Amended Annual Budget, approved by a Normal Vote of the Project Committee, the CCP Board shall review, modify, and approve each Annual Budget and Amended Annual Budget in accordance with Section 5.1(c) of this Agreement.
(vi) Early Termination of PPA. The CCP Board shall review, modify, and approve the recommendations of the Project Committee, made pursuant to Section 6.4(b)(ii) of this Agreement, as to an early termination of the PPA pursuant to Section 13.3 of the PPA. (vii) Assignment by Project Developer. The CCP Board shall review, modify, and approve the recommendations of the Project Committee, made pursuant to Section
6.4(b)(iii) of this Agreement, as to any assignment by Project Developer pursuant to Section 14.7. (viii) Buyer Financing Assignment. The CCP Board shall review, modify, and approve the recommendations of the Project Committee, made pursuant to Section 6.4(b)(iv) of this Agreement, as to an assignment by CCP to a financing entity. (ix) Change of Control. The CCP Board shall review, modify, and approve the recommendations of the Project Committee, made pursuant to Section 6.4(b)(v) of this Agreement, as to any Change of Control requiring CCP’s consent, as specified in Section 14.7 of the PPA.
(x) Supervening Authority of the Board. The CCP Board has complete and plenary supervening power and authority to act upon any matter which is capable of being acted upon by the Project Committee or which is specified as being within the authority of the Project Committee pursuant to the provisions of this Agreement. (xi) Other Matters. The CCP Board is authorized to perform such other functions and duties, including oversight of those matters and responsibilities addressed by the Project Committee or CCP Manager as may be provided for under this Agreement and under the PPA, or as may otherwise be appropriate.
(xii) Periodic Audits. The CCP Board or the Project Committee may arrange for the annual audit by certified accountants, selected by the CCP Board and experienced in electric generation or electric utility accounting, of the books and accounting records of CCP, the Project Developer to the extent authorized under the PPA, and any other counterparty under any agreement to the extent allowable, and such audit shall be completed and submitted to the CCP Board as soon as reasonably practicable after the close of the Contract Year. CCP shall 352
21 promptly furnish to the Project Participant copies of all audits. No more frequently than once every calendar year, each Project Participant may, at its sole cost and expense, audit, or cause to be audited the books and cost records of CCP, and/or the Project Developer to the extent authorized under the PPA.
(xiii) Compliance Expenditures. The CCP Board shall review, modify, and approve the recommendations of the Project Committee, made pursuant to Section 6.4(b)(vi) of this Agreement, as to Compliance Costs as specified in Section 8.6(c) of the PPA. If the CCP Board authorizes CCP to agree to reimburse Project Developer for Accepted Compliance Costs, then such amount shall be added to the amount of Operating Costs included in the Monthly Cost calculation for the subsequent month.
(b) Pursuant to Section 5.06 of the Joint Powers Agreement, this Agreement modifies the voting rules of the CCP Board for purposes of approving or acting on any matter identified in this Agreement, as follows:
(i) Quorum. A quorum shall consist of a majority of the CCP Board members that represent Project Participants.
(ii) Voting. Each CCP Board member that represents a Project Participant shall have one vote for any matter identified in this Agreement. Any CCP Board member representing a CCP member that is not a Project Participant shall abstain from voting on any matter identified in this Agreement. A vote of the majority of the CCP Board members representing Project Participants that are in attendance shall be sufficient to constitute action, provided a quorum is established and maintained.
5.3. Role of CCP Manager.
(a) In addition to the duties and responsibilities set forth elsewhere in this Agreement, the CCP Manager is delegated the following authorities and responsibilities:
(i) Request for Tax Documentation. Respond to any requests for tax-related documentation by the Project Developer. (ii) Request for Financial Statements. Provide the Project Developer with Financial Statements as may be required by the PPA. (iii) Request for Information by Project Participant. Respond to any request by a Project Participant for information or documents that are reasonably available to allow the Project Participant to respond to requests for such information from any federal, state, or local regulatory body or other authority.
(iv) Coordinate Response to a Request for Confidential Information.
Upon a request or demand by any third person that is not a Party to the PPA or a Project Participant, for Confidential Information as described in Section 14.21 of the PPA, the CCP Manager shall notify the Project Developer and coordinate the response of CCP and Project Participants. 353
22 (v) Invoices. The CCP Manager shall review each invoice submitted by Project Developer and shall request such other data necessary to support the review of such invoices.
ARTICLE 6
PROJECT COMMITTEE
6.1. Establishment and Authorization of the Project Committee. The Project Committee is hereby established and duly authorized to act on behalf of the Project Participants as provided for in this Section 6 for the purpose of (a) providing coordination among, and information to, the Project Participants and CCP, (b) making any recommendations to the CCP Board regarding the administration of the Project, and (c) execution of the Project Committee responsibilities set forth in Section 6.4.
6.2. Project Committee Membership. The Project Committee shall consist of one representative from each Project Participant. The CCP Manager shall be a non-voting member of the Project Committee. Within thirty (30) days after the Effective Date, each Project Participant shall provide notice to each other of such Project Participant’s representative on the Project Committee. Alternate representatives may be appointed by similar written notice to act on the Project Committee, or on any subcommittee established by the Project Committee, in the absence of the regular representative. An alternate representative may attend all meetings of the Project Committee but may vote only if the representative for whom they serve as alternate for is absent.
No Project Participant’s representative shall exercise any greater authority than permitted by the Project Participant which they represent.
6.1. Project Committee Operations, Meetings, and Voting. Project Committee operations, meetings, and voting shall be in accordance with the procedures and requirements specified in Exhibit D.
6.2. Project Committee Responsibilities. The Project Committee shall have the following responsibilities:
(a) General Responsibilities of the Project Committee.
(i) Provide a liaison between CCP and the Project Participants with respect to the ongoing administration of the Project.
(ii) Exercise general supervision over any subcommittee established pursuant to Section 6.5.
(iii) Oversee, as appropriate, the completion of any Project design, feasibility, or planning studies or activities.
(iv) Review, discuss, and attempt to resolve any disputes among the Project Participants relating to this Agreement or the PPA. 354
23 (v) Perform such other functions and duties as may be provided for under this Agreement, the PPA, or as may otherwise be appropriate or beneficial to the Project or the Project Participants.
(b) Recommendations to the CCP Board by a Normal Vote.
(i) Budgeting. Review, modify, and approve by a Normal Vote each proposed Annual Budget and proposed Amended Annual Budget for submission to the CCP Board for final approval.
(ii) Early Termination of PPA. Review, modify, and approve by a Normal Vote a recommendation to the CCP Board regarding an early termination of the PPA pursuant to Section 13.3 of the PPA.
(iii) Assignment by Project Developer. Review, modify, and approve by a Normal Vote a recommendation to the CCP Board regarding any assignment by Project Developer pursuant to Section 14.7 of the PPA.
(iv) Buyer Financing Assignment. Review, modify, and approve by a Normal Vote a recommendation to the CCP Board regarding an assignment by CCP to a financing entity.
(v) Change of Control. Review, modify, and approve by a Normal Vote a recommendation to the CCP Board regarding any Change of Control requiring CCP’s consent, as specified in Section 14.7 of the PPA.
(vi) Compliance Expenditures. Review, modify, and approve by a Normal Vote a recommendation to the CCP Board regarding Compliance Expenditures, as specified in Section 8.6(c) of the PPA.
(c) Actions Delegated to the Project Committee by this Agreement Subject to a Unanimous Vote.
(i) Project Design. Review, modify, and approve by a Unanimous Vote any recommendations to the Project Developer on the design of the Project. (ii) [Reserved.]
(iii) Default. Direct CCP to exercise its rights under the PPA if a Default has occurred under Section 13.1 of the PPA.
(d) Actions Delegated to the Project Committee by this Agreement Subject to a Normal Vote.
(i) Make recommendations to the CCP Manager, the CCP Board, the Project Participants or to the Project Developer, as appropriate, with respect to the development, operation, and ongoing administration of the Project.
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24 (ii) Review, develop, and, if appropriate, modify and approve rules, procedures, and protocols for the administration of the Project, including rules, procedures, and protocols for the management of the costs of the Project and the scheduling, handling, tagging, dispatching, and crediting of the Product, the handling and crediting of Green Attributes associated with the Project and the control and use of the Project. (iii) Review, develop, and, if appropriate, modify rules, procedures, and protocols for the monitoring, inspection, and the exercise of due diligence activities relating to the operation of the Project.
(iv) Review, and, if appropriate, modify or otherwise act upon, the form or content of any written statistical, administrative, or operational reports, Project-related data and technical information, Project reliability data, transmission information, forecasting, scheduling, dispatching, tagging, parking, firming, exchanging, balancing, movement, or other delivery information, and similar information and records, or matters pertaining to the Project which are furnished to the Project Committee by the CCP Manager, the Project Developer, experts, consultants or others.
(v) Review, formulate, and, if appropriate, modify, or otherwise act upon, practices and procedures to be followed by Project Participants for, among other things, the production, scheduling, tagging, transmission, delivery, firming, balancing, exchanging, crediting, tracking, monitoring, remarketing, sale, or disposition of the Product, including the control and use of the Project.
(vi) Review and act upon any matters involving any arrangements and instruments entered into by the Project Developer or any affiliate thereof to, among other things, secure certain performance requirements, including, but not limited to, the PPA, the Development Security or the Delivery Term Security and any other letter of credit delivered to, or for the benefit of, CCP by the Project Developer and take such actions or make such recommendations as may be appropriate or desirable in connection therewith.
(vii) Review, and, if appropriate, recommend, modify, or approve policies or programs formulated by CCP or Project Developer for determining or estimating the values, quantities, volumes, or costs of the Product from the Project. (viii) Review, and where appropriate, recommend the implementation of metering technologies and methodologies appropriate for the delivery, accounting for, transferring and crediting of the Product to the Point of Delivery (directly or through the Project). (ix) Review, to the extent permitted by this Agreement, the PPA, or any other relevant agreement relating to the Project, modify and approve or disapprove the specifications, vendors’ proposals, bid evaluations, or any other matters with respect to the Project. (x) Reserved.
(xi) Review and approve the submission of the written
acknowledgement of the Commercial Operation Date in accordance with Section 3.5 of the PPA. 356
25 (xii) Review and approve the return of the Project Development Security to Project Developer in accordance with Section 5.9(c) of the PPA. (xiii) Review and approve the return of any unused Delivery Term Security to Project Developer in accordance with Section 5.9(d) of the PPA. (xiv) Review Progress Reports provided by Project Developer to CCP pursuant to Section 3.6 of the PPA and participate in any associated regularly scheduled meetings with Project Developer to discuss construction progress. (xv) Direct CCP to collect any liquidated damages owed by Project Developer to CCP under the PPA, and to the extent authorized by PPA, draw upon the Project Development Security or Delivery Term Security.
(xvi) Review invoices received by CCP from the Project Developer and, if appropriate, direct CCP to dispute an invoice pursuant to Section 11.3 of the PPA. (xvii) Review and confirm that Project Developer has achieved the milestones identified in Appendix I of the PPA.
(xviii) Direct CCP change the Negative LMP Strike Price in pursuant to Appendix A of the PPA.
(xix) Direct CCP to take such actions or implement such measures as may be necessary to facilitate the transfer of Green Attributes from the Project Developer to the Project Participants.
(xx) Direct CCP to give Notice to Project Developer of an election to purchase Energy in excess of Maximum Generation pursuant to Section 3.10 of the PPA (xxi) Direct CCP to demand payment and collect damages pursuant to Section 3.11 of the PPA.
(xxii) Direct CCP to withhold funds from Project Developer pursuant to Section 6.1(c) of the PPA.
(xxiii) Direct CCP to designate an authorized representative pursuant to Section 14.1 of the PPA.
(xxiv) Within three hundred and sixty-five (365) days of the Effective Date, adopt procedures for all Project Participants to acquire additional import capability rights or other similar rights for each Proposed Facility, and a process for directing CCP to accept or reject each Proposed Facility based on the acquisition of such import capability rights or other similar rights, as specified in Section 3.1 of the PPA. Such procedures may be amended, modified, or supplemented at any time by a subsequent Normal Vote by the Project Committee. (xxv) Direct CCP to either accept or reject the Notice of Revised Net Capacity, as specified in Section 3.9 and 6.1 of the PPA. 357
26 6.3. Subcommittees. The CCP Manager may establish as needed subcommittees including, but not limited to, auditing, legal, financial, engineering, mechanical, weather, geologic, diurnal, barometric, meteorological, operating, insurance, governmental relations, environmental, and public information subcommittees. The authority, membership, and duties of any subcommittee shall be established by the CCP Manager; provided, however, such authority, membership or duties shall not conflict with the provisions of the PPA or this Agreement.
6.4. Representative’s Expenses. Any expenses incurred by any representative of any Project Participant or group of Project Participants serving on the Project Committee or any other committee in connection with their duties on such committee shall be the responsibility of the Project Participant which they represent and shall not be an expense payable under this Agreement.
6.5. Inaction by Committee. It is recognized by CCP and Project Participants that if the Project Committee is unable or fails to agree with respect to any matter or dispute which it is authorized to determine, resolve, approve, disapprove or otherwise act upon after a reasonable opportunity to do so, or within the time specified herein or in the PPA, then CCP may take such commercially reasonable action as CCP determines is necessary for its timely performance under any requirement pursuant to the PPA or this Agreement, pending the resolution of any such inability or failure to agree, but nothing herein shall be construed to allow CCP to act in violation of the express terms of the PPA or this Agreement.
6.6. Delegation. To secure the effective cooperation and interchange of information in a timely manner in connection with various administrative, technical, and other matters which may arise from time to time in connection with administration of the PPA, in appropriate cases, duties and responsibilities of the CCP Board or the Project Committee, as the case may be under this Section 6, may be delegated to the CCP Manager by the CCP Board upon notice to the Project Participants.
ARTICLE 7
[RESERVED]
ARTICLE 8
OPERATING ACCOUNT
8.1. Calculation of Estimated Monthly Project Cost.
(a) No later than one hundred and eighty (180) days after the Effective Date, the CCP Manager shall present to the Project Committee a proposed Estimated Monthly Project Cost, which shall be equal to the single highest forecasted Monthly Cost over the first Contract Year. The Project Committee shall review, and, if appropriate, recommend, modify, or approve through a Normal Vote, the proposed Estimated Monthly Project Cost.
8.2. Operating Account. CCP shall establish an Operating Account for each Project Participant that is accessible to and can be drawn upon by both CCP and the applicable Project Participant. Such Operating Accounts are for the purpose of providing a reliable source of funds for the payment obligations of the Project and, taking into account the variability of costs associated with the Project for the purpose of providing a reliable payment mechanism to address the ongoing costs associated with the Project.
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27 (a) Operating Account Amount. The Operating Account Amount for each Project Participant shall be an amount equal to the Estimated Monthly Project Cost multiplied by three (3), the product of which is multiplied by such Project Participant’s Entitlement Share (“Operating Account Amount”).
(b) Initial Funding of Operating Account. By no later than three hundred and sixty-five (365) days after the Effective Date, each Project Participant shall deposit into such Project Participant’s Operating Account an amount equal to that Project Participant’s Operating Account Amount.
(c) Use of Operating Account. CCP shall draw upon each Project Participant’s Operating Account each month in an amount equal to the Monthly Costs multiplied by such Project Participant’s Entitlement Share. As required by Section 9.5, each Project Participant must deposit sufficient funds into such Project Participant’s Operating Account by the deadline specified in Section 9.5.
(d) Final Distribution of Operating Account. Following the expiration or earlier termination of the PPA, and upon payment and satisfaction of any and all liabilities and obligations to make payments of the Project Participants under this Agreement and upon satisfaction of all remaining costs and obligations of CCP under the PPA, any amounts then remaining in any Project Participant’s Operating Account shall be paid to the associated Project Participant.
ARTICLE 9
BILLING
9.1. Monthly Costs. The amount of Monthly Costs for a particular Month shall be the sum of the Project Participant’s Entitlement Share multiplied by the Monthly Payments for the Product, as specified in Section 11.2 of the PPA for such Month and to the extent such payment is made by CCP to the Project Developer, plus the Project Participant’s Entitlement Share multiplied by the Operating Cost for such Month and subtracting the Project Participant’s Entitlement Share multiplied by the positive revenue associated with the sale of any Facility Energy, Capacity Attributes, Ancillary Services, and/or Green Attributes, as shown in the following formula:
Monthly Cost = ((Project Participant’s Entitlement Share) × (Monthly Payments)) + ((Project Participant’s Entitlement Share) × (Operating Costs)) – ((Project Participant’s Entitlement Share) × (revenue from sale of Facility Energy, Capacity Attributes, Ancillary Services and/or Green Attributes))
9.2. Billing Statements. By no later than ten (10) calendar days after CCP receives an invoice from Project Developer for the prior Month of each Contract Year pursuant to Section 11.2 of the PPA, CCP shall issue to each Project Participant a copy of the invoice and a “Billing Statement,” which specifies such Project Participant’s Monthly Costs, itemized by each part of such Monthly Cost. The amount of Monthly Costs attributable to a Project Participant, and specified in such Billing Statement, shall be the “Invoice Amount.”
9.3. Disputed Monthly Billing Statement. A Project Participant may dispute, by written Notice to CCP, any portion of any Billing Statement submitted to that Project Participant by CCP pursuant to Section 9.2, provided that the Project Participant shall pay the full amount of the Billing Statement when due. If CCP determines that any portion of the Billing Statement is incorrect, 359
28 CCP will deposit the difference between such correct amount and such full amount, if any, including interest at the rate received by CCP on any overpayment into the Project Participant’s Operating Account. If CCP and a Project Participant disagree regarding the accuracy of a Billing Statement, CCP will give consideration to such dispute and will advise all Project Participants with regard to CCP’s position relative thereto within thirty (30) days following receipt of written Notice by Project Participant of such dispute.
9.4. Payment Adjustments; Billing Errors. If CCP or Project Developer determines that a prior invoice or Billing Statement was inaccurate, CCP shall credit against or increase as appropriate each Project Participant’s subsequent Monthly Costs according to such adjustment.
The accompanying Billing Statement shall describe the cause of such adjustment and the amount of such adjustment.
9.5. Payment of Invoice Amount. Each Project Participant shall deposit the Invoice Amount for the applicable Month into such Project Participant’s Operating Account by no later than the twentieth (20th) calendar day of the following Month after the Billing Statement is issued, unless CCP has failed to issue the Billing Statement by the deadline specified in Section 9.2, in which case, each Project Participant shall deposit the Invoice Amount for the applicable Month by no later than thirty (30) days after the date on which CCP issues the Billing Statement to the Project Participant.
9.6. Withdrawal of Invoice Amount from Operating Account. No sooner than five (5) calendar days after CCP issues a Billing Statement to a Project Participant or a Step-Up Invoice to a Project Participant, CCP shall withdraw the Invoice Amount or the Step-Up Invoice Amount from each Project Participant’s Operating Account. If the Monthly Cost attributable to such Project Participant is a negative number, CCP shall deposit such funds into the Operating Account of that Project Participant.
9.7. Late Payments.
(a) If any Project Participant fails to deposit the Invoice Amount into the Project Participant’s Operating Account by the deadline specified in Section 9.5, then CCP will issue such Project Participant a Late Payment Notice within five (5) days of the deadline specified in Section 9.5 directing the Project Participant to immediately deposit the Invoice Amount into the Project Participant’s Operating Account and informing the Project Participant that such Project Participant must pay a charge (“Late Payment Charge”). Upon issuing a Late Payment Notice to any Project Participant, CCP shall promptly provide Notice of such occurrence to all other Project Participants.
(b) The Late Payment Charge shall be equal to the Invoice Amount minus any partial payment that was deposited into such Project Participant’s Operating Account multiplied by the Interest Rate specified in Section 11.3 of the PPA for the period from the deadline specified in Section 9.5 until the date on which the Project Participant deposits the Invoice Amount plus the Late Payment Charge into such Project Participant’s Operating Account. Upon payment, CCP shall withdraw the full amount of such Late Payment Charge from the Project Participant’s Operating Account and deposit any such Late Payment Charge into the Operating Accounts of all 360
29 other Project Participants on a pro rata share, based on such other Project Participants’ Entitlement Shares.
ARTICLE 10
UNCONDITIONAL PAYMENT OBLIGATIONS; AUTHORIZATIONS; CONFLICTS; LITIGATION.
10.1. Unconditional Payment Obligation. Beginning with the earliest of (i) the date CCP is obligated to pay any portion of the costs of the Project, (ii) the date of the COD, or (iii) the date of the first delivery of the Product to Project Participants and continuing through the term of this Agreement, Project Participants shall pay CCP the amounts of Monthly Costs set forth in the Billing Statements submitted by CCP to Project Participants in accordance with the provisions of Section 9, whether or not the Project or any part thereof has been completed, is functioning, producing, operating or operable or its output or the provision of Project products are suspended, interrupted, interfered with, reduced or curtailed or terminated in whole or in part, and such payments shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement for any cause whatsoever, provided that the obligation of Project Participants to pay amounts associated with the Monthly Payment shall be limited to the amount of Monthly Payment charged by the Project Developer to CCP and paid by CCP to the Project Developer.
10.2. Authorizations. Each Project Participant hereby represents and warrants that no order, approval, consent, or authorization of any governmental or public agency, authority, or person, is required on the part of such Project Participant for the execution and delivery by the Project Participant, or the performance by the Project Participant of its obligations under this Agreement except for such as have been obtained.
10.3. Conflicts. Each Project Participant represents and warrants to CCP as of the Effective Date that, to the Project Participant’s knowledge, the execution and delivery of this Agreement by the Project Participants and the Project Participants’ performance hereunder will not constitute a default under any agreement or instrument to which it is a party, or any order, judgment, decree or ruling of any court that is binding on the Project Participant, or a violation of any applicable law of any governmental authority, which default or violation would have a material adverse effect on the financial condition of the Project Participant.
10.4. Litigation. Each Project Participant represents and warrants to CCP that, as of the Effective Date, to the Project Participant’s knowledge, except as disclosed, there are no actions, suits or proceedings pending against the Project Participant (service of process on the Project Participant having been made) in any court that questions the validity of the authorization, execution or delivery by the Project Participant of this Agreement, or the enforceability on the Project Participant of this Agreement.
10.5. San José Clean Energy.
(a) The City of San José is a municipal corporation and is precluded under the California State Constitution and applicable law from entering into obligations that financially bind future governing bodies without an appropriation for such obligation, and, therefore, nothing 361
30 in the Agreement shall constitute an obligation of future legislative bodies of the City of San José to appropriate funds for purposes of the Agreement; provided, however, that the City of San José has created and set aside a designated fund (being the San Jose Energy Operating Fund established pursuant to City of San Jose Municipal Code, Title 4, Part 63, Section 4.80.4050 et. seq.) (“Designated Fund”) for payment of its obligations under this Agreement. (b) Limited Obligations. The City of San José’s payment obligations under this Agreement are special limited obligations of San José Clean Energy payable solely from the Designated Fund and are not a charge upon the revenues or general fund of the City of San José or upon any non- San José Clean Energy moneys or other property of the Community Energy Department or the City of San José.
10.6. Clean Power San Francisco. With regard to Clean Power San Francisco only, (1) obligations under this Agreement are special limited obligations of Clean Power San Francisco payable solely from the revenues of Clean Power San Francisco, and shall not be a charge upon the revenues or general fund of the San Francisco Public Utilities Commission or the City and County of San Francisco or upon any non-Clean Power San Francisco moneys or other property of the San Francisco Public Utilities Commission or the City and County of San Francisco, (2) cannot exceed the amount certified by the San Francisco City Controller for the purpose and period stated in such certification, and (3) absent an authorized emergency per the San Francisco City Charter or Code, no San Francisco City representative is authorized to offer or promise, nor is San Francisco required to honor, any offered or promised payments under this Agreement for work beyond the agreed upon scope or in excess of the certified maximum amount without the San Francisco City Controller having first certified the additional promised amount.
ARTICLE 11
PROJECT SPECIFIC MATTERS AND PROJECT PARTICIPANTS’ RIGHTS AND OBLIGATIONS UNDER THE PPA.
11.1. CCP Rights and Obligations under the PPA. Notwithstanding anything to the contrary contained in this Agreement: (i) the obligation of CCP to cause the delivery of the Project Participants’ Entitlement Shares of the Product during the Delivery Term of this Agreement is limited to the Product which CCP receives from the Project (or the Project Developer, as applicable); (ii) the obligation of CCP to pay any amount to Project Participants hereunder or to give credits against amounts due from Project Participants hereunder is limited to amounts CCP receives in connection with the transaction to which the payment or credit relates (or is otherwise available to CCP in connection with this Agreement for which such payment or credit relates); (iii) any purchase costs, operating costs, energy costs, capacity costs, Project costs, environmental attribute costs, transmission costs, tax costs, insurance costs, indemnifications, other costs or other charges for which CCP is responsible under the PPA shall be considered purchase costs, operating costs, energy costs, capacity costs, Project costs, environmental attribute costs, transmission costs, tax costs, insurance costs, indemnifications, other costs or other charges incurred by CCP and payable by Project Participants as provided in this Agreement; (iv) CCP shall carry out its obligations and exercise its rights under the PPA in a commercially reasonable manner; and (v) any Force Majeure under the PPA or other event of force majeure affecting the delivery of Product pursuant to applicable provisions of the PPA shall be considered an event caused by Uncontrollable Forces affecting CCP with respect to the delivery of the Product hereunder and 362
31 CCP forwarding to Project Participants notices and information from the Project Developer concerning an event of Force Majeure upon receipt thereof shall be sufficient to constitute a Notice that Uncontrollable Forces have occurred pursuant to Section 5.1 of this Agreement. Any net proceeds received by CCP from the sale of the Product by the Project Developer to any third-party as a result of a Force Majeure event or failure by CCP to accept delivery of Product pursuant to the PPA and any reimbursement received by CCP for purchase of Replacement RA shall be remitted by CCP to the Project Participants in accordance with their respective Entitlement Shares.
11.2. Obligations of CCP and Project Participants to Maximize the Economic and Compliance Value of the Project.
(a) Each Project Participant shall take all actions that are (i) reasonably necessary to maximize the economic and compliance value of the Project to the Project Participants, and (ii) only capable of being carried out by the Project Participants. Such actions include, but are not limited to, applying for and securing the import capability rights necessary to support the import of Capacity Attributes from the Project into the CAISO in an amount equal to at least its Entitlement Share of all of the import capability rights that are needed to utilize all of the Resource Adequacy Benefits from the Project.
(b) CCP shall take any actions requested by a Project Participant to support the individual Project Participant’s obligation under Section 11.2(a) and any actions requested by a Project Participant that are reasonably necessary to maximize the economic and compliance value of the Project to the Project Participants, to the extent that such actions by CCP are feasible and commercially reasonable.
(c) If any individual Project Participant fails to secure import capability rights or other similar rights in an amount equal to at least its Entitlement Share of all of the import capability rights that are needed to utilize all of the Resource Adequacy Benefits available from the Project, then any resulting reduced economic or compliance value of the Project shall not reduce or otherwise modify that Project Participant’s payment obligations under Section 10.1. (d) CCP and the Project Participants agree to take such additional actions in order to help effectuate the transfer of any import capability rights or similar rights from a Defaulting Project Participant to any Non-Defaulting Project Participants that assumes any portion of the Defaulting Project Participant’s Entitlement Share pursuant to the process set forth in Section 12.8(b) or 12.8(c). Such actions include but are not limited to executing additional agreements among the Project Participants, amending this Agreement, and/or submitting necessary documents to CAISO and participating in any CAISO process related to the transfer of import capability rights.
ARTICLE 12
NONPERFORMANCE AND PAYMENT DEFAULT.
12.1. Nonperformance by Project Participants. If a Project Participant fails to perform any covenant, agreement, or obligation under this Agreement or shall cause CCP to be in default with respect to any undertaking entered into for the Project or to be in default under the PPA (“Defaulting Project Participant”), CCP may, in the event the performance of any such 363
32 obligation remains unsatisfied after thirty (30) days’ prior written notice thereof to such Project Participant and a demand to so perform, take any action permitted by law to enforce its rights under this Agreement, including but not limited to termination of such Project Participant’s rights under this Agreement including any rights to its Entitlement Share of the Product, and/or bring any suit, action or proceeding at law or in equity as may be necessary or appropriate to recover damages and/or enforce any covenant, agreement or obligation against such Project Participant with regard to its failure to so perform. Any Project Participant that is not the Defaulting Project Participant (“Non-Defaulting Project Participant”) may submit Notice directly to the CCP Board, if such Non-Defaulting Project Participant determines that CCP is or may not be fully taking appropriate actions to enforce CCP’s rights under this Agreement against a Defaulting Project Participant.
The CCP Board shall consider such Notice and direct CCP to take appropriate action, if any.
12.2. Payment Default. If any Project Participant fails to deposit the Invoice Amount into the Project Participant’s Operating Account by the deadline specified in Section 9.5, and if such Participant has not deposited the Invoice Amount plus the Late Payment Charge into such Project Participant’s Operating Account within ten (10) calendar days of the issuance of the Late Payment Notice to such Project Participant by CCP, then such occurrence shall constitute a “Payment Default.”
12.3. Payment Default Notice. Upon the occurrence of a Payment Default, CCP shall issue a Notice of Payment Default to the Project Participant notifying such Project Participant that as a result of a Payment Default, it is in default under this Agreement and has assumed the status of a Defaulting Project Participant and that such Defaulting Project Participant’s Project Revenue Rights have been suspended and that such Defaulting Project Participant’s Project Rights are subject to termination and disposal in accordance with Sections 12.6 and 12.8 of this Agreement.
CCP shall provide a copy of such Notice of Default to all other Project Participants within five (5) calendar days after the issuance of the written Notice of Payment Default by CCP to the Defaulting Project Participant.
12.4. Cured Payment Default. If after a Payment Default, the Defaulting Project Participant cures such Payment Default within forty-five (45) calendar days after the issuance of the Late Payment Notice by CCP, the Defaulting Project Participant’s Project Revenue Rights shall be reinstated and its Project Rights shall not be subject to termination and disposal as provided for in Sections 12.6 and 12.8. In order to cure a Payment Default, the Defaulting Project Participant must deposit the full amount of any unpaid Invoice Amounts and any associated Late Payment Penalties into its Operating Account.
12.5. Suspension of Project Participant’s Project Revenue Rights and Treatment of Capacity Attributes and Green Attributes.
(i) Upon the occurrence of a Payment Default, the Defaulting Project Participant’s Project Revenue Rights shall be suspended until such time as such Defaulting Project Participant cures the Payment Default pursuant to the requirements of Section 12.4. Any revenue associated with the sale of Facility Energy, Capacity Attributes, Ancillary Services, or Green Attributes associated with the Project shall be deposited by CCP into the Step-Up Reserve Account, as specified in Section 12.7.
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33 (ii) For any Month where the funds remaining in a Defaulting Project Participant’s Operating Account are sufficient to pay the entire Invoice Amount, CCP shall withdraw the Invoice Amount from such Defaulting Project Participant’s Operating Account and shall cause the delivery of the Defaulting Project Participant’s Entitlement Share of the Product, including Capacity Attributes and Green Attributes, associated with the Project or otherwise provided for pursuant to the PPA. For any Month where the funds remaining in a Defaulting Project Participant’s Operating Account are less than the amount necessary to pay the entire Invoice Amount, CCP shall withdraw all remaining funds from the Defaulting Project Participant’s Operating Account, and to the extent reasonably possible, in CCP’s sole discretion, CCP shall cause the delivery of a quantity of Capacity Attributes and Green Attributes proportionate to the portion of the Invoice Amount that the remaining funds were sufficient to pay for. For any Month where the Defaulting Project Participant’s Operating Account has no funds remaining, the Defaulting Project Participant shall have no right to any such Capacity Attributes or Green Attributes associated with the Project or otherwise provided for under the PPA.
12.6. Termination and Disposal of Project Participant’s Project Rights. If a Defaulting Project Participant has not cured a Payment Default within forty-five (45) calendar days after the payment deadline specified in Section 9.5 by CCP (“Payment Default Termination Deadline"), then all Project Rights and Obligations pursuant to this Agreement shall be terminated and disposed in accordance with Sections 12.6 and 12.8 of this Agreement; provided, however, that the Defaulting Project Participant shall be liable for all outstanding payment obligations accrued prior to the Payment Default Termination Deadline and shall remain subject to all rights, obligations, and liabilities of this Agreement, including but not limited to any liabilities for Damage Payment or Termination Payment, as applicable, and any other damage payments or reimbursement amounts under the PPA. CCP shall provide to the Defaulting Project Participant a separate monthly invoice of any such payment obligations of such Defaulting Project Participant.
CCP shall immediately notify the other Project Participants of such termination of the Defaulting Project Participant’s Project Rights and Obligations.
12.7. Step-Up Invoices.
(a) Upon the occurrence of a Payment Default, CCP shall, concurrently with the Late Payment Notice issued pursuant to Section 9.7(a), issue a Step-Up Invoice to each Non-Defaulting Project Participant that specifies such Non-Defaulting Project Participant’s pro rata payment obligation, calculated based on the Entitlement Share of such Non-Defaulting Project Participant, of the amount of the Payment Default for the Defaulting Project Participant (the “Step-Up Invoice Amount”); provided, however, that a Non-Defaulting Project Participant’s Step-Up Invoice Amount shall not exceed twenty-five percent (25%) of such Non-Defaulting Project Participant’s Invoice Amount for the same month for which the Payment Default occurred (the “Step-Up Invoice Amount Cap”).
(i) Each Non-Defaulting Project Participant shall deposit the Step-Up Invoice Amount into such Non-Defaulting Project Participant’s Operating Account by the later of the twentieth (20th) calendar day of the following Month or thirty (30) days after the date on which CCP issues the Step-Up Invoice to the other Project Participants. No sooner than five (5) calendar days after CCP issues the Step-Up Invoice, CCP may withdraw the amount of the Step-Up Invoice from each Project Participant’s Operating Account and deposit such funds in a separate account 365
34 (“Step-Up Reserve Account”), which shall be accessible only by CCP, and which CCP may in its sole discretion draw upon in order to ensure that CCP can meet the payment obligations of the PPA. CCP first shall withdraw all funds from a Defaulting Project Participant’s Operating Account before withdrawing funds from the Step-Up Reserve Account. (ii) Application of Moneys Received from a Defaulting Project Participant. If a Defaulting Project Participant cures a Payment Default on or before the Payment Default Termination Deadline, any funds remaining in the Step-Up Reserve Account shall be deposited into the Operating Accounts of the other Project Participants on a pro rata share, based on the Entitlement Share of such other Project Participant. If a Defaulting Project Participant fails to cure a Payment Default and the Defaulting Project Participant’s Project Rights and Obligations are terminated and disposed of in accordance with Section 12.8, any funds remaining in the Step-Up Reserve Account shall be deposited into the Operating Accounts of the Non-Defaulting Project Participants on a pro rata share, based on the Entitlement Share, subject to the Step-Up Invoice Amount Cap, of such other Project Participant. If any Non-Defaulting Project Participant has not deposited the full amount of its share of the Step-Up Invoice Amount into its Operating Account by the deadline specified in Section 12.7(a)(i), then such occurrence shall be a Late Payment as specified in Section 9.7(a) and is subject to a Late Payment Charge pursuant to Section 9.7(b), and any such Non-Defaulting Project Participant shall not be entitled to its share of any moneys received from the Defaulting Project Participant or any funds remaining in the Step-Up Reserve Account in accordance with this Section 12.7(a)(ii) until such Non-Defaulting Project Participant has deposited the full amount of its Step-Up Invoice Amount and the Late Payment Charge into its Operating Account.
12.8. Step-Up Allocation of Project Participant’s Project Rights. In the event that a Defaulting Project Participant’s Project Rights are terminated pursuant to Section 12.6, then such Defaulting Project Participant’s Entitlement Share shall be allocated to the other Project Participants (“Step-Up Allocation”) pursuant to the process set forth in this Section 12.8. (a) Step-Up Allocation Cap. If a Defaulting Project Participant’s Entitlement Share is allocated to the Non-Defaulting Project Participants pursuant to this Section 12.8, no individual Non-Defaulting Project Participant shall be obligated to assume an allocation that exceeds that Project Participant’s Step-Up Allocation Cap set forth in Column E of the Table in Exhibit B of this Agreement. Each Non-Defaulting Project Participant’s initial Step-Up Allocation Cap shall be equal to the Non-Defaulting Project Participant Entitlement Share as of the Effective Date and set forth in Column B of the Table in Exhibit B of this Agreement, multiplied by one hundred and twenty-five percent (125%). If a Project Participant modifies its Entitlement Share pursuant to Section 4.2 of this Agreement, then that Project Participant’s Step-Up Allocation Cap shall be equal to the Project Participant’s Entitlement Share as modified pursuant to Section 4.2 multiplied by one hundred and twenty-five percent (125%). Upon a modification of a Project Participant’s Entitlement Share pursuant to Section 4.2, the CCP Manager shall cause the Step-Up Allocation Cap specified in Column E of the Table in Exhibit B of this Agreement to be modified in accordance with this Section 12.8(a). For avoidance of doubt, if a Project Participant’s Entitlement Share is increased pursuant to Section 12.8(b) or (c), then such Project Participant’s Step-Up Allocation Cap shall not be modified.
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35 (b) Step-Up Allocation Share. If a Defaulting Project Participant’s Project Rights are terminated pursuant to Section 12.6, then such Defaulting Project Participant’s Entitlement Share shall be allocated to each Non-Defaulting Project Participant based on such Non-Defaulting Project Participant’s pro rata share, calculated based on its Entitlement Share of the entire project minus the Entitlement Share of the Defaulting Project Participant, unless such allocation would cause any individual Non-Defaulting Project Participant to exceed its Step-Up Allocation Cap, in which case Section 12.8(c) shall apply. Upon allocation of a defaulting Project Participant’s Entitlement Share pursuant to this Section 12.8(b), the CCP Manager shall cause each affected Project Participant’s Entitlement Share specified in Column D of the Table in Exhibit B to be modified in accordance with this Section 12.8.
(c) Voluntary Allocation of Project Rights in Excess of the Step-Up Allocation Caps. If the allocation of a Defaulting Project Participant’s Entitlement Share pursuant to Section
12.8(b) would cause any Non-Defaulting Project Participant’s Entitlement Share to exceed its Step-Up Allocation Cap, then no allocation shall occur pursuant to Section 12.8(b). In such case, the CCP Manager shall oversee the offering of the total amount of the Defaulting Project Participant’s Entitlement Share to the Non-Defaulting Project Participants on a voluntary basis.
The initial offering shall be to each Non-Defaulting Project Participant on a pro rata share, based on such Non-Defaulting Project Participant’s Entitlement Share. Each Project Participant may accept or reject the portion of the Defaulting Project Participant’s Entitlement Share. If any portion of the Defaulting Project Participant’s Entitlement Share remains unclaimed after the initial offering, then the remaining portion shall be offered to any Non-Defaulting Project Participant that accepted its full share of the Defaulting Project Participant’s Entitlement Share in the initial offering on a pro rata share, based on such Non-Defaulting Project Participant’s Entitlement Share as a percentage of the total Entitlement Shares of all Project Participants that are participating in the subsequent round of offerings. The CCP Manager shall conduct subsequent offering rounds until either the total amount of the Defaulting Project Participant’s Entitlement Share is accepted by one or more of the Non-Defaulting Project Participants or some portion of the Defaulting Project Participant’s Entitlement Share remains, but all Non-Defaulting Project Participants have rejected such remaining amount.
(d) Step-Up Allocation Damage Payment. A Defaulting Project Participant shall owe to each Non-Defaulting Project Participant that assumes any portion of the Defaulting Project Participant’s Entitlement Share pursuant to the process set forth in Section 12.8(b) or
12.8(c) a “Step-Up Allocation Damage Payment” equal to the Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Project Participant’s Costs and Losses exceed its Gains, then the Step-Up Allocation Damage Payment shall be an amount owing to such Non-Defaulting Project Participant. If the Non-Defaulting Project Participant’s Gains exceed its Costs and Losses, then the Step-Up Allocation Damage Payment shall be zero dollars ($0). A Defaulting Project Participant shall not be entitled to any Step-Up Allocation Damage Payment or any other damages otherwise authorized under this Agreement from any other Project Participant.
The Step-Up Allocation Damage Payment does not include consequential, incidental, punitive, exemplary, or indirect or business interruption damages. Each Non-Defaulting Project Participant that assumes any portion of the Defaulting Project Participant’s Entitlement Share pursuant to the process set forth in Section 12.8(b) or 12.8(c) shall calculate, in a commercially reasonable manner, the Step-Up Allocation Damage Payment for the Defaulting Project Participant’s Entitlement Share assumed by the Non-Defaulting Project Participant as of the effective date of such Step-Up 367
36 Allocation. 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. If the Defaulting Project Participant disputes the Non-Defaulting Project Participant’s calculation of the Step-Up Allocation Damage Payment, in whole or in part, the Defaulting Project Participant shall, within five (5) Business Days of receipt of the Non-Defaulting Project Participant’s calculation of the Step-Up Allocation Damage Payment, provide to the Non-Defaulting Project Participant a detailed written explanation of the basis for such dispute. Disputes regarding the Step-Up Allocation Damage Payment shall be determined in accordance with Article 16. Each Party agrees and acknowledges that (i) the actual damages that the other Project Participant would incur in connection with a Step-Up Allocation would be difficult or impossible to predict with certainty, (ii) the Step-Up Allocation Damage Payment described in this Section 12.8(d) is a reasonable and appropriate approximation of such damages, and (iii) the Step-Up Allocation Damage Payment described in this Section
12.8(d) is the exclusive remedy of a Project Participant in connection with a Step-Up Allocation pursuant to the process set forth in Sections 12.8(b) or 12.8(c) against a Defaulting Project Participant but shall not otherwise act to limit any of the Non-Defaulting Project Participant’s rights or remedies under this Agreement.
(e) Import Capacity Rights. If a Defaulting Project Participant’s Project Rights are terminated pursuant to Section 12.6, then such Defaulting Project Participant shall transfer all import capacity rights and other similar rights that are associated with the Project and that are held by such Defaulting Project Participant to the Non-Defaulting Project Participants that assume any portion of the Defaulting Project Participant’s Entitlement Share pursuant to the process set forth in Section 12.8(b) or 12.8(c). The Defaulting Project Participant shall take all actions necessary to effectuate the transfer of such rights to the Non-Defaulting Project Participants. (f) Remarketing of Unclaimed Defaulting Project Participant’s Entitlement Share. If after the process set forth in Section 12.8(c), some portion of the Defaulting Project Participant’s Entitlement Share remains unclaimed, the CCP Manager, in their discretion or as directed by the Non-Defaulting Project Participants, may take any action to generate revenue from such unclaimed Entitlement Share in order to meet CCP’s payment obligation under the PPA. For avoidance of doubt, the CCP Manager shall not be limited by the requirements of Section 4.2 or
5.1(j) of this Agreement in remarketing or generating revenue base on the unclaimed share.
12.9. Elimination or Reduction of Payment Obligations. Notwithstanding anything to the contrary in this Agreement, upon termination of a Defaulting Project Participant’s Project Rights pursuant to Section 12.6 and the disposal of such Defaulting Project Participant’s Project Rights and Obligations pursuant to Section 12.8, such Defaulting Project Participant’s obligation to make payments under this Agreement (notwithstanding anything to the contrary herein) shall not be eliminated or reduced; provided, however, such payment obligations for the Defaulting Project Participant may be eliminated or reduced to the extent permitted by law, through an amendment to this Agreement, which shall be subject to the consent and approval of all Parties to this Agreement.
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37 ARTICLE 13
LIABILITY
13.1. Project Participants’ Obligations Several. No Project Participant shall be liable under this Agreement for the obligations of any other Project Participant or for the obligations of CCP incurred on behalf of other Project Participants. Each Project Participant shall be solely responsible and liable for performance of its obligations under this Agreement, except as otherwise provided for herein. The obligation of Project Participants to make payments under this Agreement is a several obligation and not a joint obligation with those of the other Project Participants.
13.2. No Liability of CCP or Project Participants, Their Directors, Officers, Etc.; CCP, The Project Participants’ and CCP Manager’s Directors, Officers, Employees Not Individually Liable. Except as provided for under Section 13.5 herein, the Parties agree that neither CCP, Project Participants, nor any of their past, present or future directors, officers, employees, board members, agents, attorneys or advisors (collectively, the “Released Parties”) shall be liable to any other of the Released Parties for any and all claims, demands, liabilities, obligations, losses, damages (whether direct, indirect or consequential), penalties, actions, loss of profits, judgments, orders, suits, costs, expenses (including attorneys’ fees and expenses) or disbursements of any kind or nature whatsoever in law, equity or otherwise (including, without limitation, death, bodily injury or personal injury to any person or damage or destruction to any property of Project Participants, CCP, or third persons) suffered by any Released Party as a result of the action or inaction or performance or non-performance by the Project Developer under the PPA. Except as provided for under Section 13.5 herein, each Party shall release each of the other Released Parties from any claim or liability that such Party may have cause to assert as a result of any actions or inactions or performance or non-performance by any of the other Released Parties under this Agreement (excluding gross negligence and willful misconduct, which, unless otherwise agreed to by the Parties, are both to be determined and established by a court of competent jurisdiction in a final, non-appealable order). Notwithstanding the foregoing, no such action or inaction or performance or non-performance by any of the Released Parties shall relieve CCP or any Project Participants from their respective obligations under this Agreement, including, without limitation, the Project Participants’ obligation to make payments required under Section 9.5 of this Agreement and CCP’s obligation to make payments under Section 11.2 of the PPA. The provisions of this Section 13.2 shall not be construed so as to relieve the CCP or the Project Developer from any obligation or liability under this Agreement or the PPA.
13.3. Extent of Exculpation; Enforcement of Rights. The exculpation provision set forth in Section 13.2 hereof shall apply to all types of claims or actions including, but not limited to, claims or actions based on contract or tort. Notwithstanding the foregoing, any Party may protect and enforce its rights under this Agreement by a suit or suits in equity for specific performance of any obligations or duty of any other Party, and each Party shall at all times retain the right to recover, by appropriate legal proceedings, any amount determined to have been an overpayment, underpayment or other monetary damages owed by the other Party in accordance with the terms of this Agreement.
13.4. No General Liability of CCP. The undertakings under this Agreement by CCP shall not constitute a debt or indebtedness of CCP within the meaning of any provision or limitation of 369
38 the Constitution or statutes of the State of California, and shall not constitute or give rise to a charge against its general credit.
13.5. Indemnification. Each Party (an “Indemnifying Party”) shall indemnify, defend, protect, hold harmless, and release the other Parties, their directors, board members, officers, employees, agents, attorneys and advisors, past, present or future, from and against any and all claims, demands, liabilities, obligations, losses, damages (whether direct, indirect or consequential), penalties, actions, loss of profits, judgments, orders, suits, costs, expenses (including attorneys’ fees and expenses) or disbursements of any kind or nature whatsoever in law, equity or otherwise, which include, without limitation, death, bodily injury, or personal injury to any person or damage or destruction to any property of Project Participants, CCP, or third persons, that may be imposed on, incurred by or asserted against any Party arising by manner of any breach of this Agreement by the Indemnifying Party, or the negligent acts, errors, omissions or willful misconduct incident to the performance of this Agreement on the part of any such Indemnifying Party or any Indemnifying Party’s directors, board members, officers, employees, agents and advisors, past, present or future.
ARTICLE 14
NOTICES
14.1. Addresses for the Delivery of Notices. Any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the address set forth in Exhibit A or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.
14.2. 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, five (5) 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 and, if after 5:00 pm, 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 15
ASSIGNMENT
15.1. General Prohibition on Assignments. No Party may assign this Agreement, or its rights or obligations under this Agreement, without the prior written consent of all other Parties, in each Party’s sole discretion.
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39 ARTICLE 16
GOVERNING LAW AND DISPUTE RESOLUTION
16.1. 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 with respect to or arising out of this Agreement shall be brought in the federal or state courts located in the State of California in a location to be mutually chosen by all Parties, or in the absence of mutual agreement, the County of San Francisco.
16.2. Dispute Resolution. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a Notice from either Party identifying such dispute, the Parties shall meet, negotiate, and attempt, in good faith, to resolve the dispute quickly and informally without significant legal costs. If the Parties are unable to resolve a dispute arising hereunder within thirty (30) days after Notice of the dispute, the Parties may pursue all remedies available to them at Law or in equity.
ARTICLE 17
MISCELLANEOUS
17.1. Entire Agreement; Integration; Exhibits. This Agreement, together with the Exhibits attached hereto constitutes the entire agreement and understanding by and among the Parties 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. This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission, or other event of negotiation, drafting or execution hereof.
17.2. Amendments. This Agreement may only be amended, modified, or supplemented by an instrument in writing executed by duly authorized representatives of all Parties; provided, this Agreement may not be amended by electronic mail communications. Any revisions to the Entitlement Share specified in Exhibit B pursuant to Section 4.2. or Section 12.8 shall be considered an element of the administration of this Agreement and shall not require the consent of the Parties hereto.
17.3. No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
17.4. 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 371
40 acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
17.5. Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
17.6. Electronic Delivery. This Agreement may be duly executed and delivered by a Party by electronic format (including portable document format (.pdf)). Delivery of an executed counterpart in .pdf electronic version shall be binding as if delivered in the original. The words “execution,” “signed,” “signature,” and words of like import in this Agreement shall be deemed to include electronic signatures or electronic records, each of which shall be of the same legal effect, validity, or enforceability as a manually executed signature or the use of a paper-based record keeping system, as the case may be, to the extent and as provided for in any applicable law.
17.7. Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
17.8. Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a “forward contract” within the meaning of the U.S. Bankruptcy Code, and that the Parties 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.
17.9. City of San Francisco Standard Provisions.
(a) False Claims. Pursuant to San Francisco Administrative Code § 21.35, any Party to this Agreement who submits a false claim shall be liable to the City and County of San Francisco for the statutory penalties set forth in that section. A Party will be deemed to have submitted a false claim to the City and County of San Francisco if the Party: (a) knowingly presents or causes to be presented to an officer or employee of the City and County of San Francisco a false claim or request for payment or approval; (b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the City and County of San Francisco; (c) conspires to defraud the City and County of San Francisco by getting a false claim allowed or paid by the City and County of San Francisco; (d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the City and County of San Francisco; or (e) is a beneficiary of an inadvertent submission of a false claim to the City and County of San Francisco, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the City and County of San Francisco within a reasonable time after discovery of the false claim. (b) Political Activity. In performing its responsibilities under this Agreement, CCP shall comply with San Francisco Administrative Code Chapter 12G, which prohibits funds appropriated by the City and County of San Francisco for this Agreement from being expended to 372
41 participate in, support, or attempt to influence any political campaign for a candidate or for a ballot measure.
(c) Non-discrimination Requirements.
(i) Non-discrimination in Contracts. CCP shall comply with the provisions of Chapters 12B and 12C of the San Francisco Administrative Code. CCP shall incorporate by reference in all subcontracts the provisions of Sections12B.2(a), 12B.2(c)-(k), and 12C.3 of the San Francisco Administrative Code and shall require all subcontractors to comply with such provisions. CCP is subject to the enforcement and penalty provisions in Chapters 12B and 12C.
(ii) Non-discrimination in the Provision of Employee Benefits. San Francisco Administrative Code 12B.2. CCP does not as of the date of this Agreement, and will not during the term of this Agreement, in any of its operations in San Francisco, on real property owned by San Francisco, or where work is being performed for the City elsewhere in the United States, discriminate in the provision of employee benefits between employees with domestic partners and employees with spouses and/or between the domestic partners and spouses of such employees, subject to the conditions set forth in San Francisco Administrative Code Section 12B.2. (d) Consideration of Criminal History in Hiring and Employment Decisions.
CCP agrees to comply fully with and be bound by all of the provisions of Chapter 12T, “City Contractor/Subcontractor Consideration of Criminal History in Hiring and Employment Decisions,” of the San Francisco Administrative Code, including the remedies provided, and implementing regulations, as may be amended from time to time. The requirements of Chapter 12T shall only apply to CCP’s operations to the extent those operations are in furtherance of the performance of this Agreement, shall apply only to applicants and employees who would be or are performing work in furtherance of this Agreement, and shall apply when the physical location of the employment or prospective employment of an individual is wholly or substantially within the City. Chapter 12T shall not apply when the application in a particular context would conflict with federal or state law or with a requirement of a government agency implementing federal or state law. MacBride Principles – Northern Ireland. Pursuant to San Francisco Administrative Code § 12F.5, the City and County of San Francisco urges companies doing business in Northern Ireland to move towards resolving employment inequities, and encourages such companies to abide by the MacBride Principles. The City and County of San Francisco urges San Francisco companies to do business with corporations that abide by the MacBride principles. (e) MacBride Principles – Northern Ireland. Pursuant to San Francisco Administrative Code § 12F.5, the City and County of San Francisco urges companies doing business in Northern Ireland to move towards resolving employment inequities, and encourages such companies to abide by the MacBride Principles. The City and County of San Francisco urges San Francisco companies to do business with corporations that abide by the MacBride Principles. (f) Tropical Hardwood and Virgin Redwood Ban. The City and County of San Francisco urges contractors not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood product, virgin redwood or virgin redwood product. If this order is for wood products or a service involving wood products: (a) Chapter 8 of the Environment Code 373
42 is incorporated herein and by reference made a part hereof as though fully set forth. (b) Except as expressly permitted by the application of Sections 802(B), 803(B), and 804(B) of the Environment Code, CCP shall not provide any items to the City in performance of this Agreement which are tropical hardwoods, tropical hardwood products, virgin redwood or virgin redwood products. (c) Failure of CCP to comply with any of the requirements of Chapter 8 of the Environment Code shall be deemed a material breach of contract.
17.10. City of San José Standard Provisions.
(a) Nondiscrimination/Non-Preference. The Parties shall not, and shall not cause or allow its subcontractors to, discriminate against or grant preferential treatment to any person on the basis of race, sex, color, age, religion, sexual orientation, actual or perceived gender identity, disability, ethnicity or national origin. This prohibition applies to recruiting, hiring, demotion, layoff, termination, compensation, fringe benefits, advancement, training, apprenticeship and other terms, conditions, or privileges of employment, subcontracting and purchasing. The Parties will inform all subcontractors of these obligations. This prohibition is subject to the following conditions: (i) the prohibition is not intended to preclude Parties from providing a reasonable accommodation to a person with a disability; (ii) the City of San José’s Compliance Officer may require the Parties to file, and cause any Party’s subcontractor to file, reports demonstrating compliance with this section. Any such reports shall be filed in the form and at such times as the City’s Compliance Officer designates. They shall contain such information, data and/or records as the City’s Compliance Officer determines is needed to show compliance with this provision.
(b) Conflict of Interest. The Parties represent that they are familiar with the local and state conflict of interest laws, and agrees to comply with those laws in performing this Agreement. The Parties certify that, as of the Effective Date, are unaware of any facts constituting a conflict of interest or creating an appearance of a conflict of interest. The Parties shall avoid all conflicts of interest or appearances of conflicts of interest in performing this Agreement. The Parties have the obligation of determining if the manner in which it performs any part of this Agreement results in a conflict of interest or an appearance of a conflict of interest, and a Party shall immediately notify the City of San José in writing if it becomes aware of any facts giving rise to a conflict of interest or the appearance of a conflict of interest. A Party’s violation of this Section 17.10(b) is a material breach.
(c) Environmentally Preferable Procurement Policy. Parties shall perform its obligations under this Agreement in conformance with San José City Council Policy 1-19, entitled “Prohibition of City Funding for Purchase of Single serving Bottled Water,” and San José City Council Policy 4-6, entitled “Environmentally Preferable Procurement Policy,” as those policies may be amended from time to time. The Parties acknowledge and agree that in no event shall a breach of this Section 17.10(c) be a material breach of this Agreement or otherwise give rise to an Event of Default or entitle the City of San José to terminate this Agreement. (d) Gifts Prohibited. The Parties represent that they are familiar with Chapter
12.08 of the San José Municipal Code, which generally prohibits a City of San José officer or designated employee from accepting any gift. The Parties shall not offer any City of San José 374
43 officer or designated employee any gift prohibited by Chapter 12.08. A Party’s violation of this Section 17.10(d) is a material breach.
(e) Disqualification of Former Employees. The Parties represent that they are familiar with Chapter 12.10 of the San José Municipal Code, which generally prohibits a former City of San José officer and former designated employee from providing services to the City of San José connected with his/her former duties or official responsibilities. Parties shall not use either directly or indirectly any officer, employee or agent to perform any services if doing so would violate Chapter 12.10.
17.11. Further Assurances. Each of the Parties hereto agrees to provide such information, execute, and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement.
[Signatures on following page]
375
44 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
California Community Power
By:
Name:
Title:
Approved as to form by Counsel
By:
Name:
Title:
Central Coast Community Energy
By:
Name:
Title:
Approved as to form by Counsel
By:
Name:
Title:
Clean Power San Francisco
By:
Name:
Title:
Approved as to form by Counsel
By:
Name:
Title:
376
45 Peninsula Clean Energy
By:
Name:
Title:
Approved as to form by Counsel
By:
Name:
Title:
Redwood Coast Energy Authority
By:
Name:
Title:
Approved as to form by Counsel
By:
Name:
Title:
San José Clean Energy
By:
Name:
Title:
Approved as to form by Counsel
By:
Name:
Title:
Silicon Valley Clean Energy
By:
Name:
Title:
Approved as to form by Counsel
By:
Name:
Title:
377
46 Sonoma Clean Power
By:
Name:
Title:
Approved as to form by Counsel
By:
Name:
Title:
Valley Clean Energy
By:
Name:
Title:
Approved as to form by Counsel
By:
Name:
Title:
378
Exhibit A
-1
EXHIBIT A
NOTICES
Party All Notices Invoices
California
Community Power
California Community Power
Tim Haines, Interim General
Manager
California Community Power
70 Garden Court, 3rd Floor
Monterey, CA 93940
timhaines@powergridsymmetry
.com
Central Coast
Community Energy
Central Coast Community
Energy
Robert M. Shaw, Chief
Operating Officer & General
Counsel
Central Coast Community
Energy
70 Garden Court, 3rd Floor
Monterey, CA 93940
[email protected]
Clean Power San
Francisco
Clean Power San Francisco
Barbara Hale, Assistant General
Manager, Power
San Francisco Public Utilities
Commission
525 Golden Gate Ave, 13th
Floor
San Francisco, CA 94102
[email protected]
Peninsula Clean
Energy
Peninsula Clean Energy
Jan Pepper, CEO
Peninsula Clean Energy
2075 Woodside Road
Redwood City, California
94061
jpepper@peninsulacleanenergy.
com
379
Exhibit A - 2
Party All Notices Invoices
Redwood Coast
Energy Authority
Redwood Coast Energy
Authority
Matthew Marshall, CEO
Redwood Coast Energy
Authority
633 3rd Street
Eureka, CA 95501
[email protected]
San José Clean
Energy
San José Clean Energy
Lori Mitchell, Director
cc: Luisa Elkins, Senior Deputy
City Attorney
San José Clean Energy
200 E. Santa Clara Street, 14th
Floor
San José, CA 95113
[email protected]
[email protected]
Silicon Valley Clean
Energy
Silicon Valley Clean Energy
Girish Balachandran, CEO
Silicon Valley Clean Energy
Authority
333 W. El Camino Real, Suite
330
Sunnyvale, CA 94087
[email protected]
Sonoma Clean
Power
Sonoma Clean Power
Geof Syphers, CEO
Sonoma Clean Power
50 Santa Rosa Avenue, 5th Floor
Santa Rosa, CA 95404
[email protected]
rg
380
Exhibit A - 3
Party All Notices Invoices
Valley Clean
Energy
Valley Clean Energy
Gordon Samuel
Assistant General Manager &
Director of Power Resource
604 2nd Street
Davis, CA 95616
gordon.samuel@valleycleanene
rgy.org
381
Exhibit B - 1
EXHIBIT B
SCHEDULE OF PROJECT PARTICIPANT ENTITLEMENT SHARES
AND STEP-UP ALLOCATION CAPS
Dated:________________________
A B C D E
Project Participant
Entitlement Share
As of Effective Date
Entitlement Share
As Modified Pursuant to
Section 4.2
Entitlement Share
As Modified Pursuant to
Section 12.8(b) or 12.8(c)
Step-Up Allocation Cap
125% multiplied by Column B
or C as applicable
Central Coast Community Energy 17.9%
Clean Power San Francisco 13.9%
Peninsula Clean Energy 17.1%
Redwood Coast Energy Authority 3.2%
San José Clean Energy 19.6%
Silicon Valley Clean Energy 13.4%
Sonoma Clean Power 11.2%
Valley Clean Energy 3.7%
Total 100%
Instructions: If the CCP Manager modifies one or more Project Participant’s Entitlement Share pursuant to Section 4.2, the CCP Manager shall prepare an updated Exhibit B that shows the prior Entitlement Share (Column B or D) in strikeout and specifies the new Entitlement Share values and the effective date of such modification in Column C. If the CCP Manager modifies one or more Project Participant’s Entitlement Share pursuant 382
Exhibit B - 2
to Section 12.8, the CCP Manager shall prepare an updated Exhibit B that shows the prior Entitlement Share (Column B or Column C) in strikeout and specifies the new Entitlement Share values and the effective date of such modification in Column D. 383
Exhibit C - 1
EXHIBIT C
PROCEDURE FOR VOLUNTARY REDUCTION OF
PROJECT PARTICIPANT’S ENTITLEMENT SHARE
(a) Offer to Other Project Participants. A Project Participant proposing to reduce its Entitlement Share of the Project shall provide Notice to all other Project Participants and CCP specifying the quantity of the proposed reduction of Entitlement Share (“Entitlement Share Reduction Amount”) and the first Month for which the Project Participant Proposes that the change of Entitlement Share would become effective (such Notice referred to as the “Entitlement Share Reduction Notice”).
(i) Upon receiving an Entitlement Share Reduction Notice from any Project Participant, the CCP Manager shall promptly do all of the following:
(A) Establish Entitlement Share Reduction Compensation
Amount. The CCP Manager shall secure at least one (1), but no more than three (3), valuations of the net present value of the Entitlement Share Reduction Amount over the remaining term of the PPA from one or more qualified firm(s) with the requisite experience to determine such valuation.
The valuation, or if more than one valuation is obtained, the average of all valuations received, shall be the “Proposed Entitlement Share Reduction Compensation Amount.” The CCP Manager shall call a meeting of the Project Committee and present the Proposed Entitlement Share Reduction Compensation Amount to the Project Committee. The Project Committee shall by a Normal Vote either approve the Proposed Entitlement Share Reduction Compensation Amount or direct the CCP Manager to secure additional valuations. The Proposed Entitlement Share Reduction Compensation Amount approved by the Project Committee shall be the “Entitlement Share Reduction Compensation Amount.” The Project Participant proposing to reduce its Entitlement Share may modify the quantity of the Entitlement Share Reduction Amount associated with its proposal or withdraw its proposal at any time prior to the initiation of the process set forth in paragraph (a)(i)(B).
(B) Oversee the Offering of the Entitlement Share Reduction Amount to Other Project Participants. The CCP Manager shall facilitate the offering of the Entitlement Share Reduction Amount to the other Project Participants through multiple rounds of offerings.
a) The initial offering shall be to each Project
Participant on a pro rata share, based on such Project Participant’s Entitlement Share. Each Project Participant may accept or reject the portion of the Entitlement Share Reduction Amount offered to the Project Participant through this process. If any portion of the Entitlement Share Reduction Amount remains after the initial offering, then the remaining portion shall be offered to any Project Participant that accepted the share of the Entitlement Share Reduction Amount offered in the initial offering on a pro rata share, based on such Project Participant’s Entitlement Share as a percentage of the total Entitlement Shares of all Project Participants that accepted the portion of the Entitlement Share Reduction Amount offered to them in the initial offering. 384
Exhibit C - 2
b) The CCP Manager shall conduct subsequent offering
rounds until either the total Entitlement Share Reduction Amount is accepted by one or more of the other Project Participants or some portion of the Entitlement Share Reduction Amount remains, but all Project Participants have rejected such amount. c) Any Project Participant accepting a share of the
offered Entitlement Share Reduction Amount shall either pay the offering Project Participant or be compensated by the offering Project Participant at the Entitlement Share Reduction Compensation Amount multiplied by the quantity of the portion being accepted. d) Before a transfer of all or a portion of any Project Participant’s Entitlement share to another Project Participant can become effective, the proposed transfer must be submitted to and approved by the Project Committee through a Normal Vote. e) After acceptance and payment for such portion of the Entitlement Share Reduction Amount, and upon approval of such transfer by the Project Committee, the CCP Manager shall cause the Entitlement Share specified in Exhibit B to be modified accordingly, and such modification shall be considered an element of the administration of this Agreement and shall not require the consent of the Parties hereto. (C) Oversee the Offering of the Entitlement Share Reduction Amount to CCP Members that are not Project Participants. If there is any portion of the Entitlement Share Reduction Amount that remains unaccepted after the process specified in paragraph (a)(i)(B) is complete, then the Project Participant proposing to reduce its Entitlement Share may request that the CCP Manager offer the remaining portion of the Entitlement Share Reduction Amount to CCP Members that are not Project Participants. If any CCP Member wishes to accept any or all of the remaining portion of the Entitlement Share Reduction Amount, such action shall require the CCP Member to become a Project Participant through an amendment to this Agreement, which shall be subject to the consent and approval of all Parties to this Agreement and the CCP Member becoming a Project Participant. The compensation amount associated with the CCP Member accepting the remaining portion of the Entitlement Share Reduction Amount shall be negotiated between the CCP Member and the offering Project Participant. (D) Oversee the Offering of the Entitlement Share Reduction Amount to a Community Choice Aggregator that is not a CCP Member. If there is any portion of the Entitlement Share Reduction Amount that remains unaccepted after the process specified in both paragraphs (a)(i)(B) and (a)(k)(C) is complete, then the Project Participant proposing to reduce its Entitlement Share, may request that the CCP Manager offer the remaining portion of the Entitlement Share Reduction Amount to a community choice aggregator that is not a CCP Member. If any community choice aggregator wishes to accept any or all of the remaining portion of the Entitlement Share Reduction Amount, such action shall require the community choice aggregator to become a CCP Member, and subsequent to becoming a CCP Member, to become a Project Participant through an amendment to this Agreement that is subject to the consent and approval of all Parties to this Agreement and the community choice aggregator becoming a Project Participant. The compensation amount associated with the community choice aggregator accepting the remaining portion of the Entitlement Share Reduction Amount shall be negotiated between the community choice aggregator and the offering Project Participant. 385
Exhibit D - 1
EXHIBIT D
PROJECT COMMITTEE OPERATIONS, MEETINGS, AND VOTING
(a) Chairperson of Project Committee. The chairperson of the Project Committee (“Chairperson”) shall be the CCP Manager. The Chairperson shall be responsible for calling and presiding over meetings of the Project Committee in a manner and to the extent permitted by law.
(b) Conducting Meetings. Conducting of Project Committee meetings and actions taken by the Project Committee may be taken by vote given in an assembled meeting, by telephone, by video conferencing, or by any combination thereof, to the extent permitted by law. (c) Calling of Meetings.
(i) The Chairperson may call a meeting of the Project Committee at their discretion.
(ii) The Chairperson shall promptly call a meeting of the Project Committee at the request of any representative of a Project Participant. (d) Unanimous Votes. Certain actions, as designated in Section 6.4(c), require a unanimous affirmative vote by all Project Participants (“Unanimous Vote”). No such vote may be taken unless a representative from every Project Participant is present at the meeting of the Project Committee. If any Project Participant’s Entitlement Share is reduced to zero through the process specified in Exhibit C, such Project Participant shall not be required to be present or be entitled to vote in order for such vote to be a Unanimous Vote. (e) Normal Votes. All actions not designated as requiring unanimous vote, shall proceed pursuant to the “Normal Vote” process set forth in this paragraph (e). (i) Quorum. No Normal Vote of the Project Committee shall be taken unless a representative is present for at least fifty percent (50%) of the total number of Project Participants, without regard to each Project Participant’s Entitlement Share. (ii) Initial Normal Vote. Unless a representative requests an Alternate Normal Vote, pursuant to paragraph (e)(iii), all actions requiring a Normal Vote, as specified in Section 6.4(b) or 6.4(d), shall require an affirmative vote of at least fifty-one percent (51%) of the total number of Project Participants, without regard to each Project Participant’s Entitlement Share.
(iii) Alternate Normal Vote. Any representative may request that any Normal Vote be taken on an Entitlement Share basis (referred to as an “Alternate Normal Vote”).
If a representative requests an Alternate Normal Vote, then the following vote requirements shall apply:
386
Exhibit D - 2
(A) If any individual Project Participant has an Entitlement Share exceeding fifty percent (50%), then all actions for which an Alternate Normal Vote is taken shall require that the Project Participant with an Entitlement Share exceeding fifty percent (50%) plus any other Project Participant vote in the affirmative. (B) If no individual Project Participant has an Entitlement Share exceeding fifty percent (50%), then all actions for which an Alternate Normal Vote is taken shall require an affirmative vote of Project Participants having Entitlement Shares aggregating at least fifty-one percent (51%) of the total Entitlement Shares. 387
Execution Version
RENEWABLE POWER PURCHASE AGREEMENT
COVERSHEET
Seller: ORGP LLC, a Delaware limited liability company
Buyer: California Community Power, a California joint powers authority Description of Project: A portfolio of geothermal powered electric generating plants located in the States of California and Nevada with a maximum generating capacity of 125 MW.
Delivery Term: See Section 2.2.
Guaranteed Generation and Maximum Generation: See Appendix J.
Contract Price:
Product:
☒ Delivered Energy
☒ Green Attributes (Portfolio Content Category 1) associated with the Delivered Energy ☒ Capacity Attributes (Resource Specific Import RA)
☒ Ancillary Services
Scheduling Coordinator: Seller
Security:
Project Development Security:
Delivery Term Security:
APPROVAL DRAFT
Attachment A to Resolution 22-05-04
388
TABLE OF CONTENTS
Page
-i-ARTICLE I DEFINITIONS AND INTERPRETATION.............................................................. 1 Section 1.1 Definitions............................................................................................ 1 Section 1.2 Interpretation...................................................................................... 23 ARTICLE II EFFECTIVE DATE, TERM, AND EARLY TERMINATION ............................ 24 Section 2.1 Effective Date and Agreement Term ................................................. 24 Section 2.2 Delivery Term.................................................................................... 24 Section 2.3 Survivability....................................................................................... 24 Section 2.4 Early Termination Rights................................................................... 24 ARTICLE III DEVELOPMENT OF THE FACILITIES............................................................ 25 Section 3.1 Project Design and Facility Specifications ........................................ 25 Section 3.2 Permitting and CEQA Exemption ..................................................... 26 Section 3.3 Performance Testing Conditions Criteria……………………………26 Section 3.4 Site Confirmation............................................................................... 26 Section 3.5 Certification of Commercial Operation Dates................................... 27 Section 3.6 Milestone Schedule............................................................................ 27 Section 3.7 Performance Damages ....................................................................... 28 Section 3.8 Notice of Facility Net Capacity and Primary Point of Delivery........ 29 Section 3.9 Revision of Facility Net Capacity...................................................... 29 Section 3.10 Delivery of Energy Prior to Commercial Operation Date ................. 30 Section 3.11 Facility Removal for Failure to Obtain CEC Certification................ 30 Section 3.12 [Reserved].......................................................................................... 31 Section 3.13 Decommissioning and Other Costs.................................................... 31 ARTICLE IV OPERATION AND MAINTENANCE OF THE FACILITY.............................. 31 Section 4.1 General Operational Requirements.................................................... 31 Section 4.2 Operation and Maintenance Plan; Operation and Maintenance Reports............................................................................................... 31 Section 4.3 Environmental Credits ....................................................................... 32 Section 4.4 Planned and Forced Outages.............................................................. 32 Section 4.5 Facility Operation .............................................................................. 33 ARTICLE V COMPLIANCE DURING OPERATION PERIOD; GUARANTEES ................. 33 Section 5.1 Guarantees.......................................................................................... 33
APPROVAL DRAFT
389
TABLE OF CONTENTS
(continued)
Page
-ii-Section 5.2 Buyer’s Right to Monitor in General................................................. 33 Section 5.3 Effect of Review by Buyer ................................................................ 34 Section 5.4 Reporting and Information; Administration and Periodic Reporting............................................................................................ 34 Section 5.5 Initial Performance Test..................................................................... 35 Section 5.6 Contract Provisions............................................................................ 35 Section 5.7 Quality Assurance Program; Routine and Preventive Maintenance Services ........................................................................ 36 Section 5.8 No Liens............................................................................................. 36 Section 5.9 Seller Performance Security .............................................................. 36 Section 5.10 Lease or Permit No Longer in Effect................................................. 39 Section 5.11 Project Company Bankruptcy ............................................................ 40 Section 5.12 Buyer Credit Arrangements............................................................... 40 ARTICLE VI PURCHASE AND SALE OF POWER................................................................ 41 Section 6.1 Purchases by Buyer............................................................................ 41 Section 6.2 Seller’s Failure ................................................................................... 42 Section 6.3 Buyer’s Failure................................................................................... 42 Section 6.4 Sales to Third Parties ......................................................................... 42 Section 6.5 Nature of Remedies............................................................................ 43 ARTICLE VII TRANSMISSION AND SCHEDULING; TITLE AND RISK OF LOSS ......... 43 Section 7.1 In General........................................................................................... 43 Section 7.2 Scheduling of Energy......................................................................... 43 Section 7.3 Costs................................................................................................... 45 Section 7.4 Curtailment Required by Buyer; Market Curtailment Periods.......... 45 Section 7.5 Curtailment of Seller’s Transmission Services.................................. 45 Section 7.6 Title; Risk of Loss.............................................................................. 46 ARTICLE VIII GREEN ATTRIBUTES; RPS COMPLIANCE................................................. 46 Section 8.1 Transfer of Green Attributes.............................................................. 46 Section 8.2 Reporting of Ownership of Green Attributes..................................... 46 Section 8.3 Green Attributes................................................................................. 46 Section 8.4 Use of Accounting System to Transfer Green Attributes.................. 47
APPROVAL DRAFT
390
TABLE OF CONTENTS
(continued)
Page
-iii-Section 8.5 Further Assurances............................................................................. 48 Section 8.6 RPS Compliance ................................................................................ 48 Section 8.7 Solar Generating Capacity Serving Parasitic Load............................ 50 ARTICLE IX MAKEUP OF SHORTFALL ENERGY .............................................................. 50 Section 9.1 Makeup of Shortfall ........................................................................... 50 Section 9.2 Replacement Energy .......................................................................... 50 Section 9.3 Shortfall Liquidated Damages ........................................................... 50 ARTICLE X CAPACITY RIGHTS ............................................................................................ 51 Section 10.1 Purchase and Sale of Capacity Rights ............................................... 51 Section 10.2 Representation Regarding Ownership of Capacity Rights ................ 52 Section 10.3 Resource Adequacy Failure ............................................................... 52 ARTICLE XI BILLING; PAYMENT; AUDITS; METERING; POLICIES.............................. 53 Section 11.1 Billing and Payment........................................................................... 53 Section 11.2 Calculation of Delivered Energy; Invoices and Payment.................. 53 Section 11.3 Disputed Invoices............................................................................... 55 Section 11.4 Right of Setoff.................................................................................... 55 Section 11.5 Records and Audits............................................................................ 55 Section 11.6 Electric Metering Devices.................................................................. 56 Section 11.7 Taxes.................................................................................................. 57 ARTICLE XII REPRESENTATIONS AND WARRANTIES; COVENANTS OF SELLER......................................................................................................... 57 Section 12.1 Representations and Warranties of Buyer.......................................... 57 Section 12.2 Representations, Warranties and Covenants of Seller ....................... 58 Section 12.3 Covenant of Seller Related to Investments........................................ 62 Section 12.4 Covenants of Seller Related to Tax Equity Financing....................... 62 Section 12.5 Additional Covenants of Seller.......................................................... 62 ARTICLE XIII DEFAULT; TERMINATION AND REMEDIES; PERFORMANCE DAMAGE...................................................................................................... 62 Section 13.1 Default................................................................................................ 62 Section 13.2 Default Remedy ................................................................................. 63 Section 13.3 Termination for Default ..................................................................... 64
APPROVAL DRAFT
391
TABLE OF CONTENTS
(continued)
Page
-iv-Section 13.4 Pass Through of Buyer Liability........................................................ 65 Section 13.5 No Recourse to Members of Buyer ................................................... 66 ARTICLE XIV MISCELLANEOUS .......................................................................................... 66 Section 14.1 Authorized Representative................................................................. 66 Section 14.2 Notices ............................................................................................... 66 Section 14.3 Dispute Resolution............................................................................. 66 Section 14.4 Further Assurances............................................................................. 67 Section 14.5 No Dedication of Facilities................................................................ 67 Section 14.6 Force Majeure .................................................................................... 67 Section 14.7 Assignment of Agreement; Certain Agreements by Seller................ 69 Section 14.8 Ambiguity .......................................................................................... 71 Section 14.9 Attorney Fees & Costs....................................................................... 71 Section 14.10 Voluntary Execution .......................................................................... 71 Section 14.11 Entire Agreement............................................................................... 71 Section 14.12 Governing Law .................................................................................. 71 Section 14.13 Venue ................................................................................................. 72 Section 14.14 Execution in Counterparts.................................................................. 72 Section 14.15 Effect of Section Headings ................................................................ 72 Section 14.16 Waiver................................................................................................ 72 Section 14.17 Relationship of the Parties ................................................................. 72 Section 14.18 Third-Party Beneficiaries................................................................... 72 Section 14.19 Damage or Destruction; Insurance; Condemnation; Limit of Liability.............................................................................................. 73 Section 14.20 Severability ........................................................................................ 73 Section 14.21 Confidentiality ................................................................................... 73 Section 14.22 Mobile-Sierra ..................................................................................... 74
APPROVAL DRAFT
Section 14.23 Service Contract and Forward Contract............................................. 75 392
-v-Appendices
APPENDIX A – PAYMENT SCHEDULE
APPENDIX B – FORM OF FACILITY SPECIFICATIONS
APPENDIX C – BUYER AND SELLER BILLING, NOTIFICATION AND SCHEDULING
CONTACT INFORMATION
APPENDIX D – OPERATIONAL CHARACTERISTICS
APPENDIX E – FORM OF LETTER OF CREDIT
APPENDIX F – INSURANCE
APPENDIX G – FORM OF GUARANTEE
APPENDIX H – QUALITY ASSURANCE PROGRAM
APPENDIX I – FORM OF MILESTONE SCHEDULE
APPENDIX J – GUARANTEED GENERATION AND MAXIMUM GENERATION APPENDIX K – FORM OF COMMERCIAL OPERATION CERTIFICATE
APPENDIX L – FORM OF BUYER LIABILITY PASS THROUGH AGREEMENT APPENDIX M – PROJECT PARTICIPANTS AND LIABILITY SHARES
APPENDIX N – ILLUSTRATIVE FACILITY LIST
APPENDIX O – FORM OF PROGRESS REPORT
APPENDIX P – FORM OF ATTESTATION
APPENDIX Q - FORM OF REPLACEMENT RA NOTICE
SCHEDULE
SCHEDULE A ORGANIZATIONAL AND OWNERSHIP STRUCTURE OF PROJECT
APPROVAL DRAFT
COMPANIES, SELLER, AND EQUITY OWNERS
393
1 RENEWABLE POWER PURCHASE AGREEMENT
PARTIES
THIS RENEWABLE POWER PURCHASE AGREEMENT (this “Agreement”) is dated as of the 31st day of May, 2022 (“Effective Date”), and entered into by and between CALIFORNIA COMMUNITY POWER, a California joint powers authority (“Buyer”), and ORGP LLC, a limited liability company organized and existing under the laws of the State of Delaware (“Seller”). Each of Buyer and Seller is referred to individually in this Agreement as a “Party” and together they are referred to as the “Parties.”
RECITALS
WHEREAS, the California Public Utilities Commission directed Buyer’s members to procure Firm Clean Resources that meet the requirements of CPUC Decision 21-06-035; and WHEREAS, Buyer issued a “Request for Offers Seeking Firm Clean Resources” (“RFO”); and
WHEREAS, Seller’s parent company on behalf of Seller responded to the RFO and following negotiations, Seller has agreed to sell to Buyer, and Buyer has agreed to purchase from Seller, certain renewable energy and associated environmental attributes; and WHEREAS, the Parties desire to set forth the terms and conditions pursuant to which such sales and purchases shall be made.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein, and the mutual covenants and agreements herein set forth, the Parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions. The following terms in this Agreement and the appendices hereto shall have the following meanings when used with initial capitalized letters:
“Accepted Compliance Costs” has the meaning set forth in Section 8.6(c). “Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in Control of, is under Control by, or is under common Control with such Person. Subject to transfers as may be permitted under this Agreement, each Project Company, Upstream Equity Owner and Downstream Equity Owner shall be an Affiliate of Seller. “Agreement” has the meaning set forth in the preamble of this Agreement and includes the Cover Sheet and any Appendices and Schedules and any written supplements hereto. “Agreement Term” has the meaning set forth in Section 2.1.
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2 “Alternate Points of Delivery” means any of the following points of delivery: (a) Gonder.IPP, (b) Eldorado 230/Mead, (c) Imperial Valley 230, or (d) such other points of delivery as may be agreed between Buyer and Seller.
“Ancillary Documents” means the Buyer Ancillary Documents and the Seller Ancillary Documents.
“Ancillary Services” means all ancillary services, power products and other power attributes, if any, associated with the installed capacity of the Facility, in each case solely to the extent the same can be provided to Buyer without making any change to the applicable Facility or its operation.
“ASME” means American Society of Mechanical Engineers.
“Assumed Daily Deliveries” has the meaning set forth in Section 13.3(c). “ASTM” means American Society for Testing and Materials. “Authorized Auditors” means representatives of Buyer who are authorized to conduct audits on behalf of Buyer.
“Authorized Representative” means, with respect to each Party, the Person designated as such Party’s authorized representative pursuant to Section 14.1. “AWS” means American Welding Society.
“Bankruptcy” means any case, action, or proceeding under any bankruptcy, reorganization, debt arrangement, insolvency, or receivership law or any dissolution or liquidation proceeding commenced by or against a Person and, if such case, action, or proceeding is not commenced by such Person, such case or proceeding shall be consented to or acquiesced in by such Person or shall result in an order for relief or shall remain undismissed for ninety (90) days. “Business Day” means any day that is not a Saturday, a Sunday, or a day on which commercial banks are authorized or required to be closed in New York, New York. “Buyer” has the meaning set forth in the preamble of this Agreement. “Buyer Ancillary Documents” all instruments, agreements, certificates, and documents executed by Buyer pursuant to this Agreement.
“Buyer Liability Pass Through Agreement” means an agreement by and between Seller, Buyer and the applicable Project Participant, in the form set forth in Appendix L. “Buyer’s Member” means any member of Buyer that has entered into the Joint Powers Agreement.
“CAISO” means the California Independent System Operator Corporation. “California Prevailing Wage Requirement” has the meaning set forth in Section 12.2(o).
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3 “California Public Utilities Code” means the Public Utilities Code of the State of California, as may be amended from time to time.
“California Renewables Portfolio Standard” or “RPS” means the renewables portfolio standard program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time, and as administered by the CEC as set forth in CEC RPS Eligibility Guidebook (9th Ed.), as may be subsequently modified by the CEC, and the CPUC as set forth in CPUC Decision (“D.”) 08-08-028, D.08-04-009, D.10-03-021, D.11-01-025, D.11-12-020, D.11-12-052, D.12-06-038, D.13-11-024, D.14-12-023, D.17-06-026, and D.19-02-007, and as may be modified by subsequent decisions of the CPUC or by subsequent legislation and regulations promulgated with respect thereto.
“Capacity Buydown Damages” has the meaning set forth in Section 3.7(a). “Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of power that a Facility can generate or deliver to the Points of Delivery at a particular moment and that can be purchased and sold under CAISO market rules and CPUC decisions, including Resource Adequacy Benefits. “Capacity Rights” means the rights, whether in existence as of the Effective Date or arising thereafter during the Agreement Term, to Capacity Attributes, Resource Adequacy Benefits, or reserves associated with the electric generating capability of each Facility, including the right to resell such rights.
“CEC” means California’s State Energy Resources Conservation and Development Commission, also known as the California Energy Commission, and any successor agency thereto. “CEC Certification Deadline” means for each Facility, the date that is either (a) one hundred eighty (180) days following the Commercial Operation Date for such Facility if failure to be CEC Certified at such time is the result of Seller’s fault or negligence (including any failure to submit timely required documentation to the CEC) or (b) three hundred sixty (360) days following the Commercial Operation Date for such Facility if failure to be CEC Certified at such time is not the result of Seller’s fault or negligence.
“CEC Certified” means that the CEC has certified that the Facility is an Eligible Renewable Energy Resource in accordance with California Public Utilities Code Section 399.12(e) and the guidelines adopted by the CEC, as amended from time to time, and any successor statute. “CEC Pre-certified” means that the CEC has issued a precertification for the Facility indicating that the planned operations of the Facility would comply with applicable CEC requirements for the Facility to be CEC Certified.
“CEQA” means the California Environmental Quality Act, Public Resources Code §§ 21000, et seq., as amended from time to time, and any successor statute.
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4 “Change in Control” means the occurrence, whether in a single transaction or in a series of related transactions at any time during the Agreement Term of any one or more of the following:
(a) a merger or consolidation of Seller, any Project Company or any Upstream Equity Owner or Downstream Equity Owner, with or into any other Person, or any other reorganization, as a result of which the members or shareholders, as applicable, of Seller or any Project Company or the members or shareholders, as applicable, of any Upstream Equity Owner or Downstream Equity Owner immediately prior to such consolidation, merger, or reorganization, (i) own less than fifty percent (50%) of the equity ownership of the surviving entity or any Project Company or (ii) cease to have the power to Control the management and policies of the surviving entity immediately after such consolidation, merger, or reorganization, (b) any transaction or series of related transactions in which in excess of fifty percent (50%) of the equity ownership of Seller or any Project Company, or any Upstream Equity Owner or Downstream Equity Owner, or the power to Control the management and policies of Seller or any Project Company, or any Upstream Equity Owner or any Downstream Equity Owner, is transferred to another Person, (c) a sale, lease, or other disposition of all or substantially all of the assets of Seller, any Project Company, or any Upstream Equity Owner or Downstream Equity Owner, (d) the dissolution or liquidation of Seller, any Project Company or any Upstream Equity Owner or any Downstream Equity Owner, or (e) any transaction or series of related transactions that has the substantial effect of any one or more of the foregoing, provided, however, that a Change in Control shall not include (1) any transaction or series of transactions in which the membership or other equity interests in or assets of Seller, any Project Company, or any Upstream Equity Owner or any Downstream Equity Owner, are issued or transferred to another Person solely for the purpose of a Tax Equity Financing; (2) any transaction or series of transactions in which the membership interests in or assets of Seller, any Project Company or any Upstream Equity Owner or Downstream Equity Owner are issued or transferred to any other Person that is directly or indirectly at least 50% owned and whose management and policies are controlled by Ormat Nevada Inc.; or (3) any transaction or series of transactions in which the membership or other equity interests in or assets of Seller, any Project Company, any Upstream Equity Owner or any Downstream Equity Owner are transferred to a Permitted Transferee.
“Change in Law” means a change in any federal, state, local, or other law (including any environmental laws), resolution, standard, code, rule, ordinance, directive, regulation, order, judgment, decree, ruling, determination, permit, certificate, authorization, or approval of a Governmental Authority (other than Buyer) which is applicable to either Party or any Facility or any of the products sold therefrom.
“CIRA Tool” means the CAISO Customer Interface for Resource Adequacy. “Commercial Operation” means, for each Facility, the date on which all of the following have occurred:
(a) Seller has delivered to Buyer a completion certificate from a Licensed Professional Engineer substantially in the form of Appendix K; (b) All Permits for the operation of the Facility have been obtained and shall be in full force and effect, and all conditions thereof that are capable of being satisfied on the Commercial Operation Date have been satisfied, provided, that, Seller may demonstrate
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5 satisfaction of this clause (b) by delivery to Buyer of a copy of a temporary or final certificate of occupancy (or equivalent) for the Facility;
(c) The Facility has been CEC Pre-certified, and Seller reasonably expects the Facility to be CEC Certified in no more than one hundred eighty (180) days from the Commercial Operation Date;
(d) Seller (with the reasonable participation of Buyer) shall have completed all applicable WREGIS registration requirements that are reasonably capable of being complete prior to the Commercial Operation Date under WREGIS rules, including (as applicable) the completion and submittal of all applicable registration forms and supporting documentation, which may include applicable interconnection agreements, informational surveys related to the Facility, and other appropriate documentation required to effect Facility registration with WREGIS and to enable Renewable Energy Credit transfers related to the Facility within the WREGIS system; (e) Buyer shall have received the Delivery Term Security required pursuant to Section 5.9, which includes the portion corresponding to such Facility; (f) Seller or its Affiliate shall have entered into interconnection agreements with Transmission Providers pursuant to which it has obtained Facility Interconnection Rights and Interests as necessary for the delivery of Facility Energy to the Point of Interconnection; (g) Seller shall have entered into, or been assigned, transmission agreements with Transmission Providers pursuant to which it has obtained Firm Transmission Rights as necessary for the delivery of Facility Energy from the Point of Interconnection to the Points of Delivery, in the case of Facilities located in Nevada, using NV Energy’s Transmission Services and Transmission System;
(h) If Seller has elected to designate such Facility as a Pseudo-Tie Resource:
(i) a Meter Service Agreement (as defined in the CAISO Tariff) between Seller and CAISO shall have been executed and delivered and be in full force and effect, and a copy of such agreement delivered to Buyer; (ii) a Pseudo-tie Participating Generator Agreement (as defined in the CAISO Tariff) between Seller and CAISO shall have been executed and delivered and be in full force, and a copy of such agreement delivered to Buyer; and (iii) Seller shall have provided Buyer a CAISO Resource ID (as defined in the CAISO Tariff) and PMAX (as defined in the CAISO Tariff) for the Facility; and
(i) If Seller has elected to designate such Facility as a Dynamically Scheduled Resource, a Dynamic Scheduling Agreement, Dynamic Imports Operating Agreement, and, if applicable, a Meter Service Agreement between Seller, Seller’s Scheduling Coordinator or the balancing authority for the Facility and CAISO.
“Commercial Operation Date” means, for a Facility, the date on which Commercial Operation of such Facility occurs, as determined pursuant to Section 3.5. “Compliance Actions” has the meaning set forth in Section 8.6(c). “Compliance Costs” has the meaning set forth in Section 8.6(c).
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6 “Compliance Expenditure Cap” has the meaning set forth in Section 8.6(c). “Compliance Obligations” has the meaning set forth in Section 8.6(c). “Confidential Information” has the meaning set forth in Section 14.21(a). “Construction Start” means the date on which Seller has (a) executed an engineering, procurement, and construction contract, (b) issued thereunder a final Notice to Proceed to begin physical construction at the Site, and (c) commenced physical movement of soil at the Site. “Contract Year” means (a) the period beginning on the Commercial Operation Date of the first Facility to achieve Commercial Operation, as determined pursuant to Section 3.5, and ending on December 31st of that year, and (b) each succeeding period of twelve (12) consecutive months following the period described in the preceding clause (a) until the end of the Delivery Term; provided that, unless the Commercial Operation Date for the last Facility to achieve Commercial Operation occurs on January 1st of any Contract Year, the last Contract Year will be shorter than twelve (12) months.
“Contract Price” has the meaning set forth on the Cover Sheet. “Control” means (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. “Costs” has the meaning set forth in Section 13.3(f).
“CPM Soft Offer Cap” has the meaning set forth in the CAISO Tariff. “CPUC” means the California Public Utilities Commission and any successor thereto. “Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Deemed Delivered RA” means the amount of Net Qualifying Capacity expressed in MW that the Facility would have delivered, but for the failure of Project Participants to obtain Import Capability sufficient to allow for the importation of such capacity into the CAISO. “Default” has the meaning set forth in Section 13.1.
“Defaulting Party” has the meaning set forth in Section 13.1. “Delay Damages” has the meaning set forth in Section 3.7(a). “Delivered Energy” means, in any Settlement Interval or Settlement Period, the lesser of (a) the aggregate amount of Energy, measured in MWh, delivered by Seller for receipt by Buyer at the Primary Point of Delivery for each Facility, or, if applicable in accordance with Section 7.5, the applicable Alternate Point of Delivery, net of Parastic Load and Electrical Losses, as
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7 measured by the Electric Metering Devices for each Facility, and (b) the amount of Energy specified in the E-Tags associated with the Delivered Energy. “Delivery Term” has the meaning set forth in Section 2.2. “Delivery Term Security” has the meaning set forth in Section 5.9(b). “Development Period” means the period beginning on the Effective Date and ending on the Final COD Deadline; provided that if the Project Net Capacity is less than the Minimum Capacity on such date, then the Development Period shall be extended to the earliest of (a) the date that the Project Net Capacity becomes equal to or greater than the Minimum Capacity and (b) the Minimum Capacity Cure Date.
“Dispute” has the meaning set forth in Section 14.3(a). “Dispute Notice” has the meaning set forth in Section 14.3(a). “Downgrade Event” shall mean any event that results in a Person failing to meet the credit requirements of a Qualified Issuer or a Qualified Guarantor, as applicable, or the commencement of involuntary or voluntary bankruptcy, insolvency, reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar proceeding (whether under any present or future statute, law, or regulation) with respect to such Person. In the case of Ormat Technologies, Inc., a Downgrade Event would mean a material adverse change in such entity’s financial condition after the time of a Delivery Term Security posting.
“Downstream Equity Owner” means a Person that owns or Controls at least fifty percent (50%) of the equity of a Project Company at any level below Seller. “Dynamically Scheduled Resource” means a generating facility that executes a a Dynamic Scheduling Agreement, Dynamic Imports Operating Agreement, and, if applicable, a Meter Service Agreement between Seller, Seller’s Scheduling Coordinator or the balancing authority for the Facility and CAISO and that complies with all CAISO Tariff requirements applicable to a Dynamic Resource-Specific System Resource, including Appendix M to the Tariff. “Dynamic Imports Operating Agreement” means an agreement between the CAISO and the host balancing authority for the Facility that enables Dynamic Schedules from the host balancing authority to the CAISO balancing authority, which may be in the form of the agreement referred to in the CAISO Tariff as the “Dynamic Scheduling Host Balancing Authority Operating Agreement” or (b) an alternative agreement, reasonably acceptable to the CAISO and consistent with the CAISO Tariff, governing the terms of dynamic transfers between CAISO and the host balancing authority for the Facility and enabling Dynamic Schedules pursuant to this Agreement. “Dynamic Schedule” has the meaning set forth in the CAISO Tariff. “Dynamic Resource-Specific System Resource” has the meaning in the CAISO Tariff. “Dynamic Scheduling Agreement” has the same meaning as that set forth in the CAISO Tariff for “Dynamic Scheduling Agreement for Scheduling Coordinators”.
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8 “Early Termination Date” has the meaning set forth in Section 13.3(a). “Effective Date” has the meaning set forth in the preamble of this Agreement. “Electric Metering Devices” means the CAISO-approved, revenue-grade meters, metering equipment, and data processing equipment used to measure, record, or transmit data relating to Facility Energy. Electric Metering Devices include the metering current transformers and the metering voltage transformers. Subject to meeting any applicable CAISO requirements, the Electric Metering Devices shall be programmed to adjust for Electrical Losses to the Primary Point of Delivery or, if applicable in accordance with Section 7.5, the applicable Alternate Point of Delivery, in accordance with CAISO’s rules for Pseudo-Tie Resources or Dynamically Scheduled Resources, as applicable, and in a manner subject to Buyer’s prior written approval, not to be unreasonably withheld.
“Electrical Losses” means all transmission or transformation losses or gains for a Facility associated with delivery of Facility Energy to the Primary Point of Delivery for such Facility or, if applicable in accordance with Section 7.5, the applicable Alternate Point of Delivery, in accordance with CAISO’s rules for Pseudo-Tie Resources or Dynamically Scheduled Resources, as applicable.
“Eligible Renewable Energy Resource” has the meaning set forth in California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25741(a), as either code provision is amended or supplemented from time to time. “Energy” means electrical energy.
“EPA” means the Environmental Protection Agency and any successor agency. “EPC Contractor” means Seller’s or its Affiliate’s contractor primarily responsible for the construction of the applicable Facility’s power block. “Event of Default” has the same meaning as Default.
“Excluded Facility” has the meaning set forth in Section 3.1. “Facility” means each of the geothermal powered electric generating plants designated by Seller for inclusion in the Project in accordance with Section 3.1, whose Facility Energy, Green Attributes and Capacity Attributes Seller commits to sell to Buyer under the terms and conditions of this Agreement and as to which the provisions of this Agreement apply. “Facility Credit Agreement” has the meaning set forth in Section 14.7(f). “Facility Energy” means, for each Facility, Energy generated by such Facility, less its Parasitic Load, which Parasitic Load may be served by solar generating capacity as provided in Section 8.7, and adjusted for Electrical Losses to the Primary Point of Delivery for such Facility or, if applicable in accordance with Section 7.5, to the applicable Alternate Point of Delivery.
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9 “Facility Interconnection Rights and Interests” means the rights and interests of Seller or its Affiliate to use the capacity of and Schedule Facility Energy over the Transmission System providing Transmission Services to the Point of Interconnection and including such Facility Interconnection Rights and Interests as provided in the Facility Specifications for the applicable Facility.
“Facility Lender” means any lender providing senior or subordinated construction, interim or long-term debt or equity financing or refinancing for or in connection with the development, construction, purchase, installation or operation of a Facility or Portfolio or for the performance by Seller of its obligations under this Agreement pursuant to a Seller Financing or Security Document or Facility Credit Agreement, including any equity and tax investor providing financing or refinancing for a Facility or purchasing equity ownership interests of Seller or its Affiliates, and any trustee or agent acting on their behalf, and any Person providing interest rate protection agreements to hedge any of the foregoing debt obligations. Facility Lender includes any lender providing Performance Security under this Agreement. “Facility Net Capacity” means, for each Facility, the electric generating capacity of such Facility (expressed in MW), net of its Parasitic Load and transmission and transformation losses to the Points of Delivery, as specified in the notice provided by Seller pursuant to Section 3.8, and as it may be further revised pursuant to Section 3.9.
“Facility Specifications” means, for each Facility, the information to be provided by Seller in accordance with and substantially in the form of Appendix B and delivered to Buyer in accordance with Section 3.1.
“Facility Transmission Rights and Interests” means the rights and interests of Seller to use the capacity of and Schedule Facility Energy over the Transmission System providing Transmission Services to each of the respective Points of Delivery and including such Facility Transmission Rights and Interests as provided in the Facility Specifications for the applicable Facility.
“FERC” means the Federal Energy Regulatory Commission.
“Final COD Deadline” means December 31, 2026, which date (i) may be extended upon mutual agreement of the Parties; (ii) shall be extended automatically on a day-for-day if the Firm Clean Resource procurement deadline of December 31, 2026 established by the CPUC in Decision 21-06-035, issued June 30, 2021, is extended to a later date without such extension resulting in any penalties to the Project Participants, (iii) shall be extended in accordance with Section 3.1, and (iv) shall be extended on a day-for-day basis for up to one hundred eighty (180) days in the aggregate for the duration of one or more Force Majeure Events that prevent or delay Seller from causing the Project Net Capacity to be equal to or greater than the Minimum Capacity by the Final COD Deadline then-in-effect; provided that such Force Majeure Event or Force Majeure Events impact a Facility that had been previously added to the Project in accordance with Section 3.1. “Firm Clean Resource” means a resource that meets the requirements of CPUC Decision 21-06-035, including that such resource (i) has at least an eighty percent (80%) capacity factor, (ii) has zero on-site emissions or otherwise qualifies as RPS Compliant, (iii) is incremental to the
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10 CPUC’s baseline list established pursuant to CPUC Decision 21-06-035, (iv) has a Commercial Operation Date later than June 24, 2021, (v) is a Resource Adequacy Resource that is eligible to provide Resource Adequacy Benefits as set forth in the Resource Adequacy Rulings, (vi) is able to deliver Energy every day, year-round during the Delivery Term (subject to Forced Outages), (vii) is not subject to use limitations, and (viii) has a capability to generate Energy that is not weather dependent.
“Firm Transmission” means Transmission Services to or from the Point of Delivery that cannot be curtailed within an operating hour for economic reasons or for higher priority transmission; provided that if Seller or Buyer, as applicable, uses commercially reasonable efforts to obtain Transmission Services meeting the foregoing criterion but is unable to obtain such Transmission Services notwithstanding such efforts, Firm Transmission shall be the most reliable Transmission Services available to Seller or Buyer, as applicable, for the transmission of Energy from the applicable Facility to or from such Point of Delivery at the time. “Force Majeure” has the meaning set forth in Section 14.6(b). “Force Majeure Cure Period” means a specified number of months following the end of a Force Majeure Trigger Period, calculated as follows:
Force Majeure Cure Period (in months) = [1 – (A/B)] x C Where:
A = the reduced aggregate capacity net of Parasitic Load of the Facilities that have achieved Commercial Operation, as applicable, resulting from the Force Majeure event(s) associated with the Force Majeure Trigger Period, adjusted to reflect the difference between the actual ambient temperatures and the annual average temperature;
B = fifty percent (50%) of the Project Net Capacity immediately prior to the Force Majeure event(s) associated with the Force Majeure Trigger Period; and C = twelve (12) months.
“Force Majeure Notice” has the meaning set forth in Section 14.6(a). “Force Majeure Trigger Period” has the meaning set forth in Section 14.6(d). “Forced Labor” has the meaning set forth in Section 12.2(q). “Forced Outage” means the removal of service availability of a Facility, or any portion of a Facility, for emergency reasons or conditions in which a Facility, or any portion thereof, is unavailable due to unanticipated failure, including as a result of Force Majeure. “Forward Certificate Transfer” has the meaning set forth in the WREGIS Operating Rules.
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11 “GAAP” means generally accepted accounting principles set forth in opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, in each case as the same are applicable to the circumstances as of the date of determination.
“Gains” has the meaning set forth in Section 13.3(f).
“Governmental Authority” means any federal, state, regional, city, or local government, any intergovernmental association or political subdivision thereof, or other governmental, regulatory, or administrative agency, court, commission, administration, department, board, or other governmental subdivision, legislature, rulemaking board, tribunal, or other governmental authority, or any Person acting as a delegate or agent of any Governmental Authority. The term “Governmental Authority” shall not include Buyer or any Buyer’s Member. “Green Attributes” means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the generation from each Facility, or, as applicable, from any facility that generates Replacement Energy, and, in each case, its displacement of conventional energy generation. Green Attributes include but are not limited to Renewable Energy Credits, as well as: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; (3) the reporting rights to these avoided emissions, such as Green Tag Reporting Rights. Green Tags are accumulated on a MWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Delivered Energy. Green Attributes do not include (i) any energy, capacity, reliability or other power attributes from each Facility, (ii) production tax credits associated with the construction or operation of each Facility and other financial incentives in the form of credits, reductions, or allowances associated with each Facility that are applicable to a state or federal income taxation obligation, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular preexisting pollutants or the promotion of local environmental benefits, (iv) emission reduction credits encumbered or used by each Facility for compliance with local, state, or federal operating or air quality permits, or (v) “portfolio energy credits” as defined in Nevada Revised Statutes Section 704.7803 associated with the Parasitic Load of any Facility. “Green Tag Reporting Rights” means the right of a purchaser of renewable energy to report ownership of accumulated “green tags” in compliance with and to the extent permitted by applicable law and include, without limitation, rights under Section 1605(b) of the Energy Policy Act of 1992, and any present or future federal, state or local certification program or emissions trading program, including pursuant to the WREGIS Operating Rules.
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12 “Guaranteed Amount” has the meaning set forth in each Project Participant’s Buyer Liability Pass Through Agreement, which amount may be different for each Project Participant given each Project Participant’s Liability Share.
“Guaranteed Generation” has the meaning set forth in Appendix J. “Guaranteed Net Qualifying Capacity” means, at any point in time, the maximum quantity of Net Qualifying Capacity (in MWs) that may be delivered in any given Showing Month pursuant to the then current law, including counting conventions set forth in the Resource Adequacy Rulings and the CAISO Tariff, from a hypothetical geothermal facility that (a) for the first three (3) Contract Years (i) has a PMAX equal to the Project Net Capacity, and (ii) is subject to the Technology Factors, and (b) for each Contract Year after the first three (3), achieves or exceeds the Operational Characteristics in Appendix D.
“IEEE” means the Institute of Electrical and Electronics Engineers. “Imbalance Energy” means the amount of Energy in MWh, in any given Settlement Period or Settlement Interval (as each is defined in the CAISO Tariff), by which the amount of Delivered Energy deviates from the amount of Scheduled Energy. “Import Capability” means that portion of the Maximum Import Capability allocated to Project Participants by the CAISO that is necessary to support the importation of the Capacity Attributes from each Facility into the CAISO market in an amount equal to the Guaranteed Net Qualifying Capacity.
“Included Facility” has the meaning set forth in Section 3.1. “Insurance” means the policies of insurance as set forth in Appendix F. “Interest Rate” has the meaning set forth in Section 11.3. “Investment-Grade Credit Rating” means a credit rating on a Person’s senior long-term debt, unsecured and unenhanced, that is at least A- by S&P or A3 by Moody’s. “ISA” means Instrument Society of America.
“Joint Powers Agreement” means that certain Joint Powers Agreement dated January 29, 2021, as amended from time to time, under which Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act.
“Leases” means, for each Facility, the geothermal resource leases and the other leases, easements, rights-of-way, or other contractual rights to use real property that are listed in Section 6 of the Facility Specifications for such Facility.
“Liability Share” means the percentage amount set forth for each Project Participant in Appendix M.
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13 “Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the state of location of the Facility for which such Person delivers a completion certificate in the form of Appendix K. “Lien” means any mortgage, deed of trust, lien, security interest, retention of title, or lease for security purposes, pledge, charge, encumbrance, equity, attachment, claim, easement, right of way, covenant, condition, or restriction, leasehold interest, purchase right, or other right of any kind, including an option, of any other Person in or with respect to any real or personal property. “Locational Marginal Price” or “LMP” has the meaning set forth in the CAISO Tariff. “Losses” has the meaning set forth in Section 13.3(f).
“Major Maintenance” means (a) any planned maintenance for the purpose of achieving a major overhaul or (b) planned material maintenance that impacts the output of a Facility for seven (7) or more consecutive days.
“Major Maintenance Blockout” has the meaning set forth in Section 4.4. “Market Curtailment Period” means the period-of-time, as measured using current Settlement Intervals, during which Seller reduces generation from a Facility during a Settlement Period or Settlement Interval in which there is a Negative LMP that is equal to or below the Negative LMP Strike Price; provided, that the duration of any Market Curtailment Period shall be inclusive of the time required for a Facility to ramp down and ramp up. “Maximum Capacity” means Project Net Capacity of one hundred twenty-five (125) MW, as may be reduced in accordance with this Agreement. “Maximum Generation” has the meaning set forth in Appendix J. “Maximum Import Capability” has the meaning set forth in the CAISO Tariff, and includes any replacement or successor method implemented by the CAISO with respect to the ability of generating units that are external to the CAISO balancing authority area to provide Resource Adequacy Benefits.
“Milestone” means each deadline for the development of a Facility through the Commercial Operation Date for such Facility, as set forth in the Milestone Schedule for such Facility.
“Milestone Date” means, with respect to a Milestone, the date for achieving such Milestone as set forth in the Milestone Schedule for the applicable Facility, including, if and to the extent that the date specified for such Milestone in the Milestone Schedule shall be extended as provided in Section 3.6, such extended date.
“Milestone Schedule” means, for each Facility, the schedule for achieving the Milestones substantially in the form of Appendix I and delivered to Buyer in accordance with Section 3.1.
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14 “Minimum Capacity” means Project Net Capacity of sixty-four (64) MW, as may be reduced in accordance with this Agreement.
“Minimum Capacity Cure Date” has the meaning set forth in Section 3.7(a). “Moody’s” means Moody’s Investors Service, Inc., or its successors. “MW” means megawatt.
“MWh” means megawatt-hours.
“Negative LMP” means, in any Settlement Period or Settlement Interval, whether in the Day-Ahead Market or Real-Time Market, the LMP at the Settlement Point is less than zero dollars ($0).
“Negative LMP Strike Price” means zero dollars per MWh ($0/MWh), as such price may be revised by Buyer by providing notice to Seller in accordance with Appendix A; provided, in no event shall the Negative LMP Strike Price be greater than zero dollars per MWh ($0/MWh). “NEPA” means the National Environmental Policy Act, 42 USC §§4321 to 4370c, as amended from time to time.
“NERC” means the North American Electric Reliability Corporation. “Net Qualifying Capacity” or “NQC” means the net capacity of a resource that can be counted towards system Resource Adequacy Requirements, as identified from time to time by the CAISO Tariff, the Resource Adequacy Rulings, or by another Governmental Authority having jurisdiction.
“Nevada Prevailing Wage Requirement” has the meaning set forth in Section 12.2(n). “Non-Defaulting Party” has the meaning set forth in Section 13.3(a). “Notice to Proceed” means the notice from Seller, or one of its subsidiaries, to the EPC Contractor instructing such contractor to commence Site preparation and other construction activities at the applicable Site for the construction of the applicable Facility’s power block. “Notification Deadline” for a given Showing Month shall mean twenty (20) Business Days before the submission of the CAISO Supply Plan filings applicable to that Showing Month. “Notifying Party” has the meaning set forth in Section 14.3(a). “OEM” has the meaning set forth in Section 12.2(p).
“Operational Characteristics” means the minimum performance requirements for the Project set forth on Appendix D.
“OSHA” means Occupational Safety & Health Administration.
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15 “Pacific Prevailing Time” means the then-prevailing local time in Sacramento, California. “Parasitic Load” means the Energy produced by a Facility (or under the circumstances set forth in Section 8.7 Energy from another source) that is used to power the lights, motors, pumps, auxiliary facilities of the well field, control systems, cooling systems, ancillary equipment, and other electrical loads that are necessary for the operation of the power systems and related facilities for the production of Facility Energy.
“Party” or “Parties” has the meaning set forth in the preamble of this Agreement. “Payment Demand” has the meaning set forth in Appendix L. “Performance Security” means the Project Development Security or the Delivery Term Security, as applicable, that is required to be provided by Seller to Buyer to secure Seller’s performance under this Agreement.
“Performance Testing Conditions Criteria” has the meaning set forth in Section 3.3. “Permits” means, for each Facility, all applications, permits, licenses, franchises, certificates, concessions, consents, authorizations, approvals, registrations, orders, filings, entitlements, and similar requirements of whatever kind and however described that are required to be obtained from a Governmental Authority with respect to the development, siting, drilling, design, acquisition, construction, equipping, financing, ownership, possession, shakedown, start-up, testing, operation, or maintenance, as applicable, of such Facility, the production and delivery of Facility Energy, Capacity Rights, and Green Attributes, or any other transactions or matter contemplated by this Agreement (including those pertaining to electrical, building, zoning, environmental, and occupational safety and health requirements), including the NEPA Environmental Assessment, as applicable, and the Permits described in the Facility Specifications for such Facility.
“Permitted Encumbrances” means (a) any Lien approved by Buyer in a writing separate from this Agreement that expressly identifies the Lien as a Permitted Encumbrance, (b) Liens for Taxes not yet due or for taxes being contested in good faith by appropriate proceedings, so long as such proceedings do not involve a material risk of the sale, forfeiture, loss or restriction on the use of a Facility or any part thereof, provided that such proceedings are reasonably expected to end by the expiration of the Agreement Term, (c) subject to compliance under Section 14.7, any Lien arising under a financing arrangement associated with a Facility or constituting a Permitted Lien under, and as defined in, any Facility Credit Agreement or Seller Financing or Security Document, (d) suppliers’, vendors’, mechanics’, workman’s, repairman’s, employees’, or other like Liens arising in the ordinary course of business for work or service performed or materials furnished in connection with a Facility for amounts the payment of which is either not yet delinquent or is being contested in good faith by appropriate proceedings so long as such proceedings do not involve a risk of the sale, forfeiture, loss or restriction on use of the applicable Facility or any part thereof, and (e) easements, rights of way, use rights, exceptions, encroachments, reservations, restrictions, conditions or limitations, provided that in each case the same do not interfere with or impair the operation or use of the applicable Facility as contemplated by the Agreement, or have a material adverse effect on the useful life or utility of the applicable
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16 Facility, or shall impair or materially adversely affect the rights or interests of Buyer under this Agreement.
“Permitted Transferee” means any entity that satisfies, or is Controlled by another Person that satisfies, the following requirements: (a) a Tangible Net Worth of not less than one hundred fifty million dollars ($150,000,000); and (b) at least two (2) years of experience in the ownership and operations of power generation facilities similar to the Facility with a generating capacity of at least one hundred (100) MW or has retained a third-party with such experience to operate the Project or relevant Facility (as applicable).
“Person” means any individual, corporation, partnership, joint venture, limited liability company, association, joint stock company, trust, unincorporated organization, entity, government, or other political subdivision.
“Planned Outage” means, subject to and as further described in the CAISO Tariff, a CAISO-approved planned or scheduled disconnection, separation or reduction in capacity of the Facility that is conducted for the purposes of carrying out routine repair or maintenance of such Facility, or for the purposes of new construction work for such Facility. “Planned Outage Projection” has the meaning set forth in Section 4.4(a). “Point of Interconnection” means, for each Facility, the point of interconnection specified for such Facility in the Facility Specifications for such Facility. “Points of Delivery” means the Primary Point of Delivery and, in the event of the curtailment or other interruption of Transmission Services as provided in Section 7.5, the Alternate Points of Delivery, and/or such other point(s) as mutually agreed by the Parties. “Portfolio” means a portfolio of electrical energy generating assets that is (a) comprised solely of Facilities hereunder, and (b) pledged as collateral security in connection with a Portfolio Financing.
“Portfolio Financing” means a financing or refinancing in accordance with Section 14.7(f) where the debt is secured by a Portfolio.
“Primary Point of Delivery” means for each Facility, (a) one or more of the following points of delivery, as shall be designated with specificity for each Facility by written notice from Seller to Buyer in accordance with Section 3.1, and as may be adjusted in accordance with Section
3.8: (i) Gonder.IPP, (ii) Eldorado 230/Mead, (iii) Imperial Valley 230, or (iv) such other points of delivery as may be agreed between Buyer and Seller, or (b) after the Commercial Operation Date for a Facility, any point of delivery as may be agreed between Buyer and Seller and thereafter designated as the Primary Point of Delivery for a Facility. “Progress Report” means a progress report including the items set forth in Appendix O. “Project” means all of the Included Facilities.
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17 “Project Company” means with respect to each Facility, the limited liability company or partnership, as applicable, designated as the owner of the Facility as set forth in the Facility Specifications for such Facility. Subject to transfers as may be permitted under this Agreement, each Project Company shall be an Affiliate of Seller.
“Project Development Security” has the meaning set forth in Section 5.9(a). “Project Energy” means the total Energy generated by all of the Facilities that have achieved Commercial Operation as of such time, less Parasitic Load associated with such Facilities, which Parasitic Load may be served by solar generating capacity as provided in Section
8.7. “Project Labor Agreement” has the meaning set forth in Section 12.2(n). “Project Net Capacity” means, for a given date, the sum of the Facility Net Capacity for each of the Facilities that has achieved Commercial Operation as of such date. “Project Participant” means each Person identified in Appendix M that shall execute a Buyer Liability Pass Through Agreement in the form set forth in Appendix L. “Project Participant Approval” means each Project Participant has obtained all necessary approvals from its board or governing authority necessary to execute a Buyer Liability Pass Through Agreement and the Project Participation Share Agreement, and that Buyer has delivered to Seller Buyer Liability Pass Through Agreements and the Project Participation Share Agreement executed by each Project Participant and countersigned by Buyer. “Project Participation Share Agreement” means that certain ORGP LLP Geothermal Portfolio Project Participation Share Agreement executed by and among Buyer and all of the Project Participants relating to their allocation among themselves of Buyer’s responsibilities and liabilities under this Agreement, and any successor agreement. “Proposed Facility” has the meaning set forth in Section 3.1. “Proposed Facility Notice” has the meaning set forth in Section 3.1. “Prudent Utility Practices” means those practices, methods, and acts, that are commonly used by a significant portion of the geothermal powered electric generation industry in prudent engineering and operations to design and operate electric equipment (including geothermal powered facilities) lawfully and with safety, dependability, reliability, efficiency, and economy, including any applicable practices, methods, acts, guidelines, standards and criteria of FERC, NERC, WECC, each as may be amended from time to time, and all applicable Requirements of Law.
“Pseudo-Tie Resource” means a generating facility that is party to a FERC-approved Pseudo-Tie Participating Generator Agreement (as defined in the CAISO Tariff) with the CAISO which allows for Capacity Attributes from the generating facility to be imported into the CAISO as “unit-specific” or “resource specific” import pursuant to the Resource Adequacy Rulings.
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18 “Qualified Guarantor” means (i) Ormat Technologies, Inc., if reasonably acceptable to Buyer based on a review of such entity’s financial condition at the time of a Delivery Term Security posting, or (ii) a guarantor, reasonably acceptable to Buyer, that has a current long-term credit rating (corporate or long term senior unsecured debt) of at least A- by S&P and A3 by Moody’s and is incorporated or organized in a jurisdiction of the United States and is in good standing in such jurisdiction.
“Qualified Issuer” means a Person, reasonably acceptable to Buyer, that has a current long-term credit rating (corporate or long-term senior unsecured debt) of (1) A3 or higher by Moody’s and (2) A- or higher by S&P.
“Quality Assurance Program” has the meaning set forth in Section 5.7. “RA Compliance Showing” means the RAR compliance or advisory showings (or similar or successor showings) that an entity is required to make to the CAISO pursuant to the CAISO Tariff, to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the Resource Adequacy Rulings, or to any Governmental Authority. “RA Deficiency Amount” means the liquidated damages payment that Seller shall pay to Buyer for an applicable RA Shortfall Month as calculated in accordance with Section 10.3(b). “RA Penalties” means the RA penalties assessed against load serving entities by the CPUC for RA deficiencies that are not replaced or cured, as established by the CPUC in the Resource Adequacy Rulings and subsequently incorporated into the annual Filing Guide for System, Local and Flexible Resource Adequacy Compliance Filings that is issued by the CPUC Energy Division, or any replacement or successor documentation established by the CPUC Energy Division to reflect RA penalties that are established by the CPUC and assessed against load serving entities for RA deficiencies.
“RA Shortfall Month” means, for purposes of calculating an RA Deficiency Amount under Section 10.3(b), any Showing Month, commencing with the Showing Month that contains the Commercial Operation Date of the first Facility to reach Commercial Operation, during which the Net Qualifying Capacity that was able to be included in the Supply Plans for the Project Participants for such Showing Month was less than the then applicable Guaranteed Net Qualifying Capacity for such Showing Month minus any Deemed Delivered RA. “REC” or “Renewable Energy Credit” means a certificate of proof associated with the generation of electricity from an Eligible Renewable Energy Resource, which certificate is issued through the accounting system established by the CEC pursuant to California Public Utilities Code Section 399.25 and satisfies the requirements of California Public Utilities Code Section 399.12(h), evidencing that one (1) MWh of energy was generated and delivered from such Eligible Renewable Energy Resource. Such certificate is a tradable environmental commodity (also known as a “green tag”) for which the owner of the REC can prove that it has purchased renewable energy. “Recipient Party” has the meaning set forth in Section 14.3(a). “Remaining Term” means, at any date, the remaining portion of the Agreement Term at that date without regard to any early termination of this Agreement.
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19 “Replacement Energy” has the meaning set forth in Section 9.2. “Replacement Price” means
“Replacement RA” means Resource Adequacy Benefits, if any, equivalent to those that would have been provided by the Project with respect to the applicable month in which a RA Deficiency Amount is due to Buyer, and located within NP 15 or SP 15. “Replacement Unit” means a resource that (a) has been pre-approved by Buyer in Buyer’s sole discretion, and (b) is a Firm Clean Resource.
“Requirements” means, collectively, Prudent Utility Practices, all applicable Requirements of Law, Seller’s Quality Assurance Program, and all other requirements of this Agreement.
“Requirement of Law” means laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any federal, state, local or other Governmental Authority (including those pertaining to electrical, building, zoning, environmental and occupational safety and health requirements).
“Resource Adequacy Benefits” means the rights and privileges attached to a Facility that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in any Resource Adequacy Rulings and includes local, zonal or otherwise locational attributes associated with a Facility (if any).
“Resource Adequacy Plan” has the meaning specified in the Tariff. “Resource Adequacy Requirements” or “RAR” means the resource adequacy requirements applicable to a load serving entity as established by the CAISO pursuant to the CAISO Tariff, by the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority.
“Resource Adequacy Resource” shall have the meaning used in Resource Adequacy Rulings.
“Resource Adequacy Rulings” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024, 14-06-050, 15-06-063, 16-06-045, 17-06-027, 18-06-030, 19- 02-022, 19-06-026, 19-10-021, 20-01-004, 20-03-016, 20-06-002, 20-06-028, 20-12-006 and any other existing or subsequent ruling or decision, or any other resource adequacy law, however described, as such decisions, rulings, laws, rules or regulations may be amended or modified from time-to-time.
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20 “Resource Specific Import RA” means a resource that is listed on the CPUC’s Net Qualifying Capacity list and is either Pseudo-Tied or Dynamic Resource-Specific System Resource into the Day-Ahead Market and Real-Time Market, and which satisfies all other applicable requirements under the Resource Adequacy Rulings, including CPUC Decisions 05- 10-042 and 20-06-028.
“RETA” has the meaning set forth in Section 12.2(n).
“RETA Regulations” has the meaning set forth in Section 12.2(n). “Revised Net Capacity” has the meaning set forth in Section 3.9. “RFO” has the meaning set forth in the recitals to this Agreement. “RPS Compliant” means, when used with respect to a Facility or any other facility at any time, that all Energy generated by the Facility and delivered to the Points of Delivery, or by such other facility, together with all of the associated Green Attributes, delivered to the Points of Delivery qualify as “portfolio content category 1” eligible renewable resource under the RPS and meet the requirements of California Public Utilities Code Section 399.16(b)(1), as amended from time to time and any successor statute.
“S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of The McGraw-Hill Companies, Inc.) or its successor.
“Sales Price” means the price at which Seller, acting in a commercially reasonable manner, resells the Energy and Green Attributes or, absent a resale, the market price for the quantity of Energy and Green Attributes not received by the Buyer (adjusted for transmission difference, if any).
“SCADA” has the meaning set forth in Section 7.2(h).
“Schedule” or “Scheduling” has the meaning set forth in the CAISO Tariff, and “Scheduled” has a corollary meaning.
“Scheduled Energy” means the Delivered Energy that clears under the applicable CAISO market based on the final Day-Ahead Schedule, FMM Schedule (as defined in the CAISO Tariff), or any other financially binding Schedule, market instruction or dispatch for a Facility for a given period-of-time implemented in accordance with 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 Tariff, as amended from time to time. The contact information for Seller’s Scheduler as of the Effective Date is set forth in item 3, Appendix C.
“Seller” has the meaning set forth in the preamble of this Agreement.
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21 “Seller Ancillary Documents” means all instruments, agreements, certificates, and documents executed by Seller or any of its Affiliates, including any Seller Party, pursuant to this Agreement and shall include the documents constituting part of the Performance Security. “Seller Financing or Security Documents” means any credit, financing or security agreements heretofore or hereafter entered into by or otherwise affecting Seller and providing for any Lien or other security interest or rights enforceable by any lender, trustee, collateral agent or other party in respect of any of the Facilities or any assets thereof or rights or other interests therein. “Seller Party(ies)” means Seller and any Affiliate of Seller that executes a Seller Ancillary Document and shall include each Project Company and each Upstream Equity Owner and Downstream Equity Owner.
“Settlement Interval” has the meaning set forth in the CAISO Tariff. “Settlement Period” has the meaning set forth in the CAISO Tariff. “Settlement Point” shall mean, for each Facility, the node pricing at the Point of Delivery for the Delivered Energy from such Facility.
“Shortfall Energy” has the meaning set forth in Section 9.1. “Shortfall Liquidated Damages” has the meaning set forth in Section 9.3. “Showing Month” shall be the calendar month of the Delivery Term, commencing with the Showing Month that contains the Commercial Operation Date of the first Facility to achieve Commercial Operation, that is the subject of the RA Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the CAISO Tariff. “Site” means, for each Facility, the real property (including all fixtures and appurtenances thereto) and related physical and intangible property generally identified in the Facility Specifications for such Facility as owned or leased by Seller, or its Affiliates, or over which Seller, or its Affiliates, has leasehold improvements, has a right-of-way or other right to use the property where such Facility is located or will be located, and including the well fields and the Leases (if applicable), easements, rights-of-way, geothermal wells and resources, well drilling rights and interests, and contractual rights including capacity rights held or to be held by Seller, or its Affiliates, with respect to the transmission lines or rights of roadways servicing such Site or such Facility and located (or to be located) thereon.
“Supply Plan” means the supply plans, or similar or successor filings, that each Scheduling Coordinator representing Resource Adequacy Resources submits to the CAISO. “System Emergency” means an emergency condition or abnormal interconnection situation, or an operational adjustment to comply with NERC or other regulatory requirements, that prevents Buyer’s Transmission Provider from receiving Energy at the applicable Points of Delivery.
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22 “Tangible Net Worth” means the tangible assets (for example, not including intangibles such as goodwill and rights to patents or royalties) that remain after deducting liabilities as determined in accordance with GAAP.
“Tax” or “Taxes” means each federal, state, county, local and other (a) net income, gross income, gross receipts, sales, use, ad valorem, business or occupation, transfer, franchise, profits, withholding, payroll, employment, excise, property or leasehold tax and (b) customs, duty or other fee, assessment or charge of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amount with respect thereto. Requirements of Buyer or Buyer’s Members are not Taxes.
“Tax Equity Financing” means a transaction or a series of transactions in which a Person or Persons (i) invests in Seller or in a Project Company or any Upstream Equity Owner or Downstream Equity Owner, (ii) purchases a Facility and leases it back to Seller (or an Affiliate of Seller) or (iii) leases a Facility from Seller or an Affiliate of Seller or invests in a direct or indirect lessee of a Facility, in each case seeking to earn its economic return, in whole or in part, through tax benefits related to the ownership or operation of such Facility. “Tax Equity Investor” means, with respect to a Tax Equity Financing, one or more tax equity investors that (i) invests in Seller or in a Project Company or any Upstream Equity Owner or Downstream Equity Owner, (ii) purchases a Facility and leases it back to Seller (or an Affiliate of Seller) or (iii) leases a Facility from Seller or an Affiliate of Seller or invests in a direct or indirect lessee of the Facility.
“Technology Factor” means the then-applicable monthly percentage published by the CPUC and used to establish Qualifying Capacity (as defined in the CAISO Tariff) for non-dispatchable geothermal resources that have less than three (3) years of historical production and bidding data. The Parties acknowledge and agree that the Technology Factors vary from year to year and month to month.
“Termination Notice” has the meaning set forth in Section 13.3(a). “Termination Payment” means a payment in an amount equal to the Non-Defaulting Party’s (a) Losses, plus (b) Costs, minus (c) Gains; provided, however that if such amount is a negative number, the Termination Payment shall be equal to zero. “Transmission Providers” means the Persons operating the Transmission Systems providing Transmission Services to or from the Points of Delivery. “Transmission Services” means the transmission and other services required to transmit Facility Energy to or from the Points of Delivery.
“Transmission System” means the facilities utilized to provide Transmission Services. “Unexcused Cause” has the meaning set forth in Section 14.6(b).
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23 “Upstream Equity Owner” means Ormat Nevada Inc. and any Person that owns or Controls at least fifty percent (50%) or more of the equity of Seller at any level below Ormat Nevada Inc.
“WECC” means the Western Electricity Coordinating Council. “WREGIS” means Western Renewable Energy Generation Information System, or any successor renewable energy tracking program designated by the CPUC for determining compliance by load serving entities with the RPS.
“WREGIS Certificates” has the meaning set forth in Section 8.4(a). “WREGIS Certificate Deficit” has the meaning set forth in Section 8.4(d). “WREGIS Operating Rules” means the rules describing the operations of the Western Renewable Energy Generation Information System, as published by WREGIS.
Other terms defined herein have the meanings so given when used in this Agreement with initial-capitalized letters.
Section 1.2 Interpretation. In this Agreement, unless a clear contrary intention appears:
(a) the singular number includes the plural number and vice versa; (b) reference to any Person includes such Person’s successors and assigns but, in case of a Party hereto, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually;
(c) reference to any gender includes the other;
(d) reference to any agreement (including this Agreement), document, instrument, tariff, or Requirement means such agreement, document, instrument, or tariff, or Requirement, as amended, modified, replaced, or superseded and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof; (e) reference to any Article, Section, or Appendix means such Article of this Agreement, Section of this Agreement, or such Appendix to this Agreement, as the case may be, and references in any Article or Section or definition to any clause means such clause of such Article or Section or definition;
(f) “hereunder,” “hereof,” “hereto,” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Article or Section or other provision hereof or thereof;
(g) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term;
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24 (h) relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding,” and “through” means “through and including”; (i) reference to time shall always refer to Pacific Prevailing Time; and reference to any “day” or “month” shall mean a calendar day or calendar month, as applicable, unless otherwise indicated; and
(j) the term “or” is not exclusive.
ARTICLE II
EFFECTIVE DATE, TERM, AND EARLY TERMINATION
Section 2.1 Effective Date and Agreement Term. This Agreement shall be effective beginning on the Effective Date and shall end on the last day of the Delivery Term or upon the expiration or earlier termination of this Agreement in accordance with the terms hereof (the “Agreement Term”).
Section 2.2 Delivery Term. This Agreement shall have a delivery term that commences at the beginning of the first (1st) Contract Year and ends at the end of the day that is twenty (20) years after the Commercial Operation Date for the first Facility to achieve Commercial Operation, unless the Agreement is sooner terminated in accordance with the terms of this Agreement (the “Delivery Term”); provided, in no event shall the Commercial Operation Date for the first Facility to achieve such Milestone occur earlier than June 1, 2024.
Section 2.3 Survivability. 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 provisions of this Article II, Article XII, Article XIII, Section 14.19, and Section 14.21 shall survive for a period of one (1) year following the termination of this Agreement. The provisions of Article XI shall survive for a period of one (1) year following final payment made by the Buyer hereunder or the expiration or termination date of this Agreement, whichever is later. The provisions of Article V, Article VI, Article VIII, and Article IX shall continue in effect after termination to the extent necessary to provide for final billing, refunds or other adjustments, and deliveries related to the period prior to termination of this Agreement.
Section 2.4 Early Termination Rights.
(a) Notwithstanding anything to the contrary in this Agreement, if Project Participant Approval of this Agreement is not obtained within one hundred twenty (120) days following the Effective Date, then either Party may terminate this Agreement upon written notice to the other Party. Upon such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.3. Seller and Buyer shall cooperate reasonably with each other to accomplish Project Participant Approval in a timely manner.
Notwithstanding anything in this Agreement to the contrary, Buyer shall have a one-time right, but not an obligation, to lower the Maximum Capacity to an amount no less than sixty-four (64) MW by delivering to Seller notice of such adjustment no later than the earlier of (i) the date that the Project Participant Approval is obtained and (ii) the date that is one hundred twenty (120) days after the Effective Date. Any such reduction of the Maximum Capacity shall proportionally reduce
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25 the Minimum Capacity. For illustrative purposes only, if the Maximum Capacity is reduced by 10% (from 125 MW to 112.5 MW), then the Minimum Capacity shall be reduced by 10% (from 64 MW to 57.6 MW).
(b) Notwithstanding anything to the contrary in this Agreement, if (i) by September 30, 2024, Seller has provided Proposed Facility Notices to Buyer for Proposed Facilities with Facility Net Capacities that in the aggregate are no lower than the Minimum Capacity for the Project and (ii) by September 30, 2027, no Proposed Facility has been included as an Included Facility in accordance with Section 3.1, then at any time thereafter until the date that Buyer notifies Seller that the Project Participants (A) have obtained Import Capability for Proposed Facilities with Facility Net Capacities that in the aggregate are no lower than the Minimum Capacity for the Project or (B) have elected to include Proposed Facilities with Facility Net Capacities that in the aggregate are no lower than the Minimum Capacity for the Project as Included Facilities, notwithstanding that the Project Participants have not obtained Import Capability for some or all of such Proposed Facilities, Seller may, but is not obligated to, terminate this Agreement upon written notice to Buyer. Upon such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.3, and Buyer shall return the Project Development Security to Seller in accordance with Section 5.9(c).
ARTICLE III
DEVELOPMENT OF THE FACILITIES
Section 3.1 Project Design and Facility Specifications. Subject to limitations on Project Participants’ Import Capability, as set forth below, Seller shall use commercially reasonable efforts to deliver to Buyer, on or before the Final COD Deadline, Project Net Capacity equal to the Maximum Capacity. Seller shall determine the location, design, configuration, and Facility Net Capacity of each Facility, subject to the Requirements and to any conditions which are imposed by any Governmental Authority as part of the environmental review of each Facility required under applicable Federal and Nevada or California Requirements of Law, as applicable; provided, each Facility shall be a Firm Clean Resource and shall have a Commercial Operation Date that occurs no later than the Final COD Deadline. Promptly after Seller determines a Facility should be included in the Project (a “Proposed Facility”), Seller shall deliver to Buyer a notice (a “Proposed Facility Notice”) that (a) includes the Facility Specifications for such Proposed Facility, which shall include the Facility Net Capacity and Primary Point of Delivery for such Proposed Facility, (b) includes the Milestone Schedule for such Proposed Facility, and (c) identifies whether Seller has elected to designate the Proposed Facility as a Pseudo-Tie Resource or a Dynamically Scheduled Resource. Each Proposed Facility shall have an expected Commercial Operation Date that is at least twenty-seven (27) months later than the date on which Seller delivers a Proposed Facility Notice, and Seller shall not deliver a Proposed Facility Notice to Buyer after the date that is twenty-seven (27) months prior to the Final COD Deadline without Buyer’s prior written consent, which Buyer may withhold in Buyer’s absolute discretion; provided, however, that Seller shall have the right to declare the Commercial Operation Date prior to the date that is twenty-seven (27) months after the date that Seller delivers a Proposed Facility Notice so long as such Commercial Operation Date is no less than twelve (12) months after the date that Seller delivers a Proposed Facility Notice. Buyer shall cause the Project Participants to use commercially reasonable efforts to obtain Import Capability necessary to import the Facility Net Capacity of each Proposed Facility into the CAISO at the Primary Point of Delivery for such
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26 Proposed Facility, and Buyer shall notify Seller as soon as reasonably practicable after receipt of the Proposed Facility Notice either (A) that the Project Participants have been able to obtain such Import Capability or have elected to include the Proposed Facility in the Project without obtaining Import Capability such that the Proposed Facility will be included in the Project (“Included Facility”), or (b) that the Project Participants have been unable to obtain such Import Capability such that the Proposed Facility will not be added to the Project (“Excluded Facility”), and both the Maximum Capacity of the Project and the Minimum Capacity of the Project will be reduced by the Facility Net Capacity of the Excluded Facility(ies). If Buyer fails to notify Seller that the Proposed Facility is an Included Facility or an Excluded Facility by the date that is twenty-four (24) months prior to the Final COD Deadline, then the Final COD Deadline shall be extended on a day-for-day basis for each day until the date that Buyer provides such notice to Seller or Seller withdraws the Proposed Facility Notice due to Buyer’s failure to notify Seller that the Proposed Facility is an Included Facility or an Excluded Facility, which withdrawal shall become effective ten (10) Business Days after Seller’s delivery to Buyer of written notice of the withdrawal, unless Buyer notifies Seller that the Proposed Facility shall be an Included Facility within such ten (10) Business Day period. An illustrative list of potential Facilities is included in Appendix N; provided, however, that Appendix N is for illustrative purposes only, and no Facility shall be added to the Project unless and until such Facility is added pursuant to the process set forth in this Section
3.1. Section 3.2 Permitting and CEQA Exemption.
(a) Seller, at its expense, shall timely take, or cause its Affiliates to take, all steps necessary to obtain all Permits required to construct, maintain, or operate each Facility, including drilling of the geothermal wells of the Facility, in accordance with the Requirements, including the timely preparation of all environmental documents required to have the applicable Facility reviewed under applicable Federal and Nevada law to the extent required under such law. (b) The Parties acknowledge and agree that (a) each Facility will be subject to environmental review pursuant to NEPA in connection with the procurement of rights-of-way from the U.S. Department of the Interior, Bureau of Land Management for the construction and installation of certain electrical facilities, (b) pursuant to that law, Seller will, or will cause its Affiliates to, submit to and complete the NEPA Environmental Assessment with respect to each Facility, and (c) each Facility that will be located in Nevada is statutorily exempt from CEQA pursuant to Title 14, California Code of Regulations, Section 15277.
Section 3.3 Performance Testing Conditions Criteria. For each Facility, no later than Construction Start for such Facility, Seller shall deliver to Buyer ambient conditions criteria and a cooling water correction curve applicable to the performance testing that will be performed to demonstrate the peak electrical output of such Facility (collectively, the “Performance Testing Conditions Criteria”).
Section 3.4 Site Confirmation. For each Facility for which Seller has delivered the Facility Specifications to Buyer, Seller represents and warrants that (a) Seller’s agents and representatives have visited, inspected, and are familiar with each Site and its surface physical condition relevant to the obligations of Seller pursuant to this Agreement, including surface conditions, normal and usual soil conditions, roads, utilities, and topographical, solar radiation,
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27 air, and water quality conditions, (b) to its knowledge, Seller is familiar with all local and other conditions that may be material to Seller’s performance of its obligations under this Agreement (including transportation, seasons and climate, access, weather, handling and storage of materials and equipment, and availability and quality of labor and utilities), and (c) Seller has determined that the Site constitutes an acceptable and suitable site for the construction (if applicable) and operation of such Facility in accordance herewith. Any failure by Seller to have taken or to take the actions described in this Section 3.4 shall not relieve Seller from any responsibility for estimating properly the difficulty and cost of successfully constructing (if applicable), maintaining or operating a Facility in accordance with this Agreement or from proceeding to construct (if applicable), maintain, and operate such Facility successfully without any additional expense to Buyer. At all times after delivery to Buyer of the Facility Specifications for a Facility, Seller shall have “Site Control” for such Facility, which means that Seller or its Affiliates shall own the Site, have a right-of-way with respect to the Site, or be the lessee of the Site under a lease which permits Seller to perform its obligations under the Agreement and the Seller Ancillary Documents. Seller shall provide Buyer with prompt notice of any change in the status of Seller’s Site Control. Seller shall not take any action or permit any action to be taken at or with respect to the Site that has a material adverse effect upon the applicable Facility or the geothermal resource, or the generating capability of the applicable Facility.
Section 3.5 Certification of Commercial Operation Dates. When Seller has determined that all requirements under this Agreement for achieving Commercial Operation of a Facility have been satisfied, Seller shall provide Buyer with a certificate from the Licensed Professional Engineer substantially in the form of Appendix K, together with notice that the other conditions precedent specified in the definition of “Commercial Operation” in Section 1.1 have been satisfied in respect of such Facility. Buyer shall either accept or reject the notice in its reasonable discretion by delivering a notice to Seller in writing within thirty (30) Business Days.
If Buyer fails to respond within thirty (30) Business Days, it shall be deemed to have accepted the notice. If Buyer rejects the notice, Buyer shall state in detail the reasons for its rejection and the Parties shall immediately meet and confer to address Buyer’s concerns. Commercial Operation of the Facility shall be deemed to have occurred on the date that the requirements for Commercial Operation are satisfied, which date may be earlier than the date on which Buyer accepts Seller’s notice that Commercial Operation has occurred and/or the date on which any concerns that Buyer expresses in connection with Seller’s notice are resolved; provided the Parties acknowledge or are deemed to have acknowledged, or it is determined through dispute resolution, that all such requirements for Commercial Operation, as applicable, for such Facility have been satisfied on such earlier date.
Section 3.6 Milestone Schedule. For each Facility that is added to the Project pursuant to the process set forth in Section 3.1, within fifteen (15) days after the close of (i) each calendar quarter from the first calendar quarter following the date on which such Facility is added to the Project until the Construction Start for such Facility, and (ii) each calendar month from the first calendar month following Construction Start until the Commercial Operation Date for such Facility, Seller shall provide to Buyer a Progress Report and agrees to regularly scheduled meetings between representatives of Buyer and Seller to review such reports and discuss Seller’s construction progress. The form of the Progress Report is set forth in Appendix O. Seller shall also provide Buyer with any reasonably requested documentation (subject to confidentiality restrictions) directly related to the achievement of Milestones within ten (10) Business Days of
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28 receipt of such request by Seller. Seller shall achieve each Milestone by the Milestone Date specified therefor in the Milestone Schedule for such Facility, provided that such Milestone Date may be extended by Seller by providing to Buyer notice of such extension at least fifteen (15) days (or, in the event of a Force Majeure concerning which fifteen (15) days advance notice is not practicable, as soon as practicable) prior to such Milestone Date, 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) and Seller’s description of its proposed course of action to achieve the missed Milestone by the extended Milestone Date. The date specified for each Milestone shall be the Milestone Date for achieving such Milestone, provided that, if and to the extent such date shall be extended as provided in this Section 3.6, the extended date shall be the new Milestone Date for purposes of this Agreement.
Notwithstanding anything herein to the contrary, Seller shall not be in default or otherwise have any liability under this Agreement for failing to meet a Milestone Date, other than to the extent provided in Section 3.7 of this Agreement. To the extent that Seller determines that, due to Seller’s inability to satisfy one or more Milestones timely, a Facility is unlikely to achieve Commercial Operation by the Final COD Deadline, Seller shall be entitled to deliver to Buyer a notice that removes such Facility from the Project; provided, however, that if Buyer has notified Seller that the Project Participants have secured Import Capability sufficient to import Capacity Attributes from such Facility into the CAISO Market, then within thirty (30) days after the notice of removal, Seller shall deliver to buyer a Proposed Facility Notice that identifies a replacement Proposed Facility that would use but not exceed such Import Capability and that will achieve Commercial Operation by the Final COD Deadline.
Section 3.7 Performance Damages.
(a) Failure to Achieve Minimum Capacity by the Final COD Deadline. If the Project Net Capacity as of the Final COD Deadline is less than the Minimum Capacity, then, subject to Section 3.7(d), Seller shall pay liquidated damages to Buyer in an amount equal to (“Delay Damages”) of difference
between the Minimum Capacity and the Project Net Capacity per day for each day intervening between the Final COD Deadline and the earliest of (i) the date that the Project Net Capacity becomes equal to or greater than the Minimum Capacity, and (ii) the date that is one hundred eighty (180) days after the Final COD Deadline (“Minimum Capacity Cure Date”). If the Project Net Capacity as of the Minimum Capacity Cure Date is less than the Minimum Capacity, then, subject to Section 3.7(d), (A) Seller shall pay to Buyer an amount equal to (“Capacity Buydown Damages”) and (B) the
Minimum Capacity shall be revised to equal the Project Net Capacity as of the Minimum Capacity Cure Date. Seller shall provide to Buyer a written notice of such revised Minimum Capacity. (b) [Reserved].
(c) Payment of Delay Damages and Capacity Buydown Damages. For each month during which Delay Damages have accrued, within twenty (20) Business Days after the end of such month, Seller shall deliver to Buyer a written statement of the amount of the applicable liquidated damages that accrued during such month in accordance with Section 3.7(a), together with payment thereof. Within twenty (20) Business Days after the Minimum Capacity Cure Date,
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29 Seller shall pay Buyer any Capacity Buydown Damages required to be paid to Buyer in accordance with Section 3.7(a).
(d) Delay Damages and Capacity Buydown Damages Cap. Notwithstanding anything to the contrary herein, Seller’s obligation to pay Delay Damages and Capacity Buydown Damages, in the aggregate, shall not exceed an amount equal to two hundred percent (200%) of the amount of the Project Development Security (as the same may have been recalculated in accordance with Section 5.9(a)).
(e) Damages that Buyer would incur due to (i) Seller’s failure to achieve a Project Net Capacity that meets the Minimum Capacity by the Final COD Date, or (ii) Seller’s failure to achieve a Project Net Capacity that meets the Minimum Capacity by the Minimum Capacity Cure Date, would be difficult or impossible to predict with certainty, and it is impractical or difficult to assess actual damages in those circumstances, but the Delay Damages and Capacity Buydown Damages set forth in Sections 3.7(a) are fair and reasonable calculations of such damages. Buyer’s right to collect liquidated damages pursuant to Sections 3.7(a) is Buyer’s sole and exclusive remedy for any failure by Seller to achieve any required level of Project Net Capacity by the Minimum Capacity Cure Date.
Section 3.8 Notice of Facility Net Capacity and Primary Point of Delivery. At least one (1) year prior to the Commercial Operation Date of a Facility, Seller shall provide notice to Buyer confirming (a) the Facility Net Capacity for such Facility, subject to adjustment pursuant to Section 3.9 below, and (b) the Primary Point of Delivery for such Facility. If Seller proposes to increase the Facility Net Capacity of a Facility or to change the Primary Point of Delivery for a Facility, and the Parties do not mutually agree to the proposed increase to the Facility Net Capacity or the proposed change to the Primary Point of Delivery for a Facility, as applicable, (such agreement not to be unreasonably withheld, conditioned or delayed), then, unless Seller withdraws its proposal to increase the Facility Net Capacity or change the Primary Point of Delivery, as applicable, the Proposed Facility will be removed from the Project.
Section 3.9 Revision of Facility Net Capacity. No less than thirty (30) days prior to a Facility’s Commercial Operation, Seller has the right, (a) without Buyer’s consent, to reduce the Facility Net Capacity for such Facility, or (b) with Buyer’s consent, to increase the Facility Net Capacity for such Facility, in either case by providing notice to Buyer stating the reduced or increased Facility Net Capacity (“Revised Net Capacity”) and evidence reasonably demonstrating (i) the sustained operation of the Facility for at least five (5) consecutive hours at a delivery rate of at least ninety percent (90%) of the Revised Net Capacity (net of providing the full requirements for Parasitic Load and net of transmission losses) as measured by the Electric Metering Devices at the Primary Point of Delivery, as adjusted to reflect nominal resource temperature and flow rates and other environmental conditions in accordance with the Performance Testing Conditions Criteria for such Facility, and (ii) the delivery of Energy equal to at least the product of ninety percent (90%) of the Revised Net Capacity for each of one hundred twenty (120) consecutive hours (net of providing the full requirements for Parasitic Load and net of transmission losses) as measured by the Electric Metering Devices at the Primary Point of Delivery, as adjusted to reflect resource temperature and flow rates and other environmental conditions in accordance with the Performance Testing Conditions Criteria for such Facility. Notwithstanding the prior sentence, no reduction to Facility Net Capacity pursuant to this Section 3.9 shall reduce the Minimum Capacity.
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30 Buyer shall either accept or reject a notice increasing the Facility Net Capacity in its reasonable discretion by delivering a notice to Seller in writing within thirty (30) days. If Buyer fails to respond within thirty (30) days, it shall be deemed to have accepted the notice. If Buyer rejects the notice, Buyer shall state in detail the reasons for its rejection. The Parties shall immediately meet and confer to address Buyer’s concerns. Upon Buyer’s acceptance, or deemed acceptance, of the notice, the Facility Net Capacity will be revised to equal the Revised Net Capacity specified in the notice, effective as of the date that Seller provided its notice to Buyer. If Buyer rejects a proposal to increase the Facility Net Capacity, the Facility Net Capacity will remain unchanged.
Notwithstanding anything to the contrary in the first sentence of this Section 3.9, if Seller provides a notice revising the Facility Net Capacity of more than one Facility that will deliver Energy to the same Primary Point of Delivery, then if the aggregate Facility Net Capacities of all such Facilities does not increase, then Buyer’s consent shall not be required to increase the Facility Net Capacity of any individual Facility.
Section 3.10 Delivery of Energy Prior to Commercial Operation Date. For each Facility, prior to the Commercial Operation Date of such Facility, Seller shall sell and deliver to the Points of Delivery, and Buyer shall purchase and receive at and from the Points of Delivery, the Delivered Energy associated with such Facility for a maximum of thirty (30) days at the price set forth in Section 1 of Appendix A; provided, in no event shall Buyer be obligated to purchase or receive Delivered Energy in excess of the Maximum Generation unless Buyer shall by notice given to Seller elect to purchase any such Energy in excess of Maximum Generation. For avoidance of doubt, Buyer shall have no obligation to purchase and receive Delivered Energy for more than thirty (30) days from any Facility that has not achieved Commercial Operation.
Section 3.11 Facility Removal for Failure to Obtain CEC Certification. Seller shall remove from the Project any Facility or Facilities that have achieved Commercial Operation under this Agreement but have not been CEC Certified by the date that is (a) one hundred eighty (180) days following such Facility’s Commercial Operation Date if such failure to be CEC Certified is the result of Seller’s fault or negligence (including any failure to submit timely required documentation to the CEC) or (b) three hundred sixty (360) days following such Facility’s Commercial Operation Date if such failure to be CEC Certified is not the result of Seller’s fault or negligence. Seller shall provide notice to Buyer and remove such Facility from the Project and upon delivery of such notice the Project Net Capacity will be reduced by the amount of the Facility Net Capacity associated with such Facility and the Guaranteed Generation reduced in accordance with the reduced Project Net Capacity. If such Facility removal occurs after the Minimum Capacity Cure Date, Buyer shall calculate in a commercially reasonable manner, and consistent with Section
13.3(b), the positive amount, if any, calculated as its Costs, plus Losses, minus Gains with respect to such reduction in Project Net Capacity; provided, Costs, Losses and Gains shall all be determined with respect to the reduction in Project Net Capacity rather than with respect to termination of all obligations under this Agreement, and further provided that, if the result of the foregoing calculation is negative, no amount shall be due to Seller. As soon as reasonably practical, Buyer shall provide notice to Seller of such damages along with a demand for payment, which demand shall be provided with a written statement explaining in reasonable detail the calculation of the demanded amount. Within ten (10) Business Days after receipt of such demand and written statement, Seller shall pay the undisputed amount of such demand and provide written notice of any disputed amount (if any), which dispute shall be resolved in accordance with Section 14.3. If Buyer prevails in any such dispute, then Seller shall pay the amount determined to be due to Buyer,
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31 together with interest on such amount calculated at the Interest Rate from the original due date until the date paid. If, before the dispute is resolved, Buyer draws on the Delivery Term Security for any disputed amount and Seller thereafter prevails in the dispute, then Buyer (i) shall be required to refund the amount of the erroneous draw, together with interest calculated at the Interest Rate from the date of the draw through the date of refund and (ii) shall pay to Seller any documented costs and expenses incurred by Seller due to the erroneous draw on the Delivery Term Security. If Seller fails to pay or dispute the amount of a demand within ten (10) Business Days after receipt of Buyer’s demand and supporting written statement, then Buyer shall be entitled to draw from the Delivery Term Security the unpaid amount. Payment of the damages as described in this Section 3.11 are Buyer’s sole and exclusive remedies for Seller’s failure to obtain CEC Certification for a Facility.
Section 3.12 [Reserved].
Section 3.13 Decommissioning and Other Costs. Buyer shall not be responsible for any cost of decommissioning or demolition of any Facility or any part thereof or any environmental or other liability associated with the decommissioning or demolition without regard to the timing or cause of the decommissioning or demolition.
ARTICLE IV
OPERATION AND MAINTENANCE OF THE FACILITY
Section 4.1 General Operational Requirements. Seller shall, at all times:
(a) At its sole expense, operate and maintain, or cause an Affiliate to operate and maintain, each Facility (i) in accordance with the Requirements, and (ii) in a manner that, to the extent commercially reasonable to do so, is reasonably likely to maximize the output of Energy and Capacity Attributes from the Facility and result in a useful life for the Facility of not less than twenty (20) years;
(b) Employ, or cause an Affiliate to employ, qualified and trained personnel for managing, operating, and maintaining each Facility and for coordinating with Buyer, and ensure that necessary personnel are available on-site or on-call and available to be on Site within four (4) hours, twenty-four (24) hours per day, each day during the Delivery Term; (c) Operate and maintain, or cause an Affiliate to operate and maintain, each Facility with due regard for the safety, security, and reliability of the interconnected facilities and Transmission System; and
(d) Comply, or cause compliance, to the extent commercially reasonable to do so, with operating and maintenance standards recommended or required by each Facility’s equipment suppliers.
Section 4.2 Operation and Maintenance Plan; Operation and Maintenance Reports. Seller shall devise and implement, or cause an Affiliate to devise and implement, a plan of inspection, maintenance, and repair for each Facility and the components thereof in order to maintain such equipment in accordance with Prudent Utility Practices, and shall keep, or cause to be kept, records with respect to inspections, maintenance, and repairs thereto. The aforementioned
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32 plan and all records of such activities shall be available for inspection by Buyer during Seller’s regular business hours upon reasonable notice; provided that Buyer shall at all times comply with Seller’s or the contractor’s safety and security requirements when present at any Facility.
Section 4.3 Environmental Credits. Seller or its Affiliates shall, if applicable, obtain in its own name and at its own expense all pollution or environmental Permits, credits or offsets necessary to operate each Facility in compliance with the Requirements of Law.
Section 4.4 Planned and Forced Outages.
(a) Seller shall schedule all Planned Outages within the time-period determined by the CAISO for each Facility as a Resource Adequacy Resource that is subject to the Availability Standards (as defined in the CAISO Tariff) to qualify for an “Approved Maintenance Outage” under the CAISO Tariff. Seller shall reimburse Buyer for any documented cost incurred by a Project Participant to provide substitute Capacity Attributes, as required by the CAISO, during any Planned Outages, whether as originally scheduled or as rescheduled in accordance with this Section 4.4(a) (including, to the extent actually incurred and documented by Project Participants, the cost of procuring replacement Capacity Attributes for a full calendar month during any month in which a Planned Outage is planned or scheduled). Notwithstanding the foregoing, Seller shall not be permitted to schedule Planned Outages during the months of June through September each Contract Year (the “Major Maintenance Blockout”). No later than sixty (60) days prior to the anticipated commencement of the first (1st) Contract Year and the commencement of each Contract Year thereafter, Seller shall provide Buyer with its non-binding written projection of all Planned Outages for the succeeding three (3) years (the “Planned Outage Projection”) reflecting no scheduled maintenance during the Major Maintenance Blockout. The Planned Outage Projection shall include information concerning all projected Planned Outages during such period, including (i) the anticipated start and end dates of each Planned Outage; (ii) a description of the maintenance or repair work to be performed during the Planned Outage; and (iii) the MW capacity anticipated to be impacted, if any, during the Planned Outage. Seller shall notify Buyer of any change in the Planned Outage Projection as soon as practicable; provided that Major Maintenance shall not be performed more than one week before or after the scheduled time without Buyer’s consent unless (i) for changes that move the date of Major Maintenance to an earlier date, Seller provides notice of the change at least fifty (50) Business Days prior to the first day of the month in which such Major Maintenance is to be rescheduled, and (ii) for changes that move the date of such Major Maintenance to a later date, Seller provides notice of the change prior to the first day of the month in which such Major Maintenance was originally scheduled. Seller will use commercially reasonable efforts to accommodate reasonable requests of Buyer with respect to the timing of Planned Outages and Seller will, to the extent consistent with Prudent Utility Practices, coordinate Planned Outages to coincide with planned transmission outages. In the event of a System Emergency, Seller shall make all reasonable efforts to reschedule any Planned Outage previously scheduled to occur during the System Emergency.
(b) In the event of a Forced Outage affecting at least seven and a half (7.5) MW of Project Net Capacity which Seller anticipates shall be of a duration more than one (1) hour, to the extent practicable, Seller shall notify Buyer by email as soon as possible and shall make efforts to provide such notification within the hour of the commencement of the Forced Outage and, within seven (7) days thereafter, provide Buyer detailed information concerning the Forced
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33 Outage, including (i) the start and anticipated end dates of the Forced Outage; (ii) a description of the cause of the Forced Outage; (iii) a description of the maintenance or repair work to be performed during the Forced Outage; and (iv) the anticipated MW capacity, if any, during the Forced Outage. Seller shall take all reasonable measures and exercise commercially reasonable efforts to avoid Forced Outages and to limit the duration and extent of any such outages.
Section 4.5 Facility Operation. Each Facility shall be operated during the Delivery Term by Seller or an Affiliate of Seller that is under the Control of Seller or such other Person(s) as Seller or the applicable Project Company may contract with from time to time under an agreement for the operation of such Facility; provided that such agreement shall provide Seller with the rights, as a creditor, beneficiary or otherwise, to enforce such agreement so as to ensure compliance with all applicable provisions of this Agreement. The agreement with respect to the operations of such Facility shall require that such Facility be operated in a manner that is in full compliance with the Requirements. Seller shall provide to Buyer a copy of the relevant operations agreement (which may be redacted to remove confidential information of the parties thereto).
ARTICLE V
COMPLIANCE DURING OPERATION PERIOD; GUARANTEES
Section 5.1 Guarantees. Seller warrants and guarantees that (i) it will perform, or cause to be performed, all engineering, design, development, construction, operation and maintenance of each Facility in a good and workmanlike manner and in accordance with the Requirements; and (ii) throughout the Delivery Term (a) each Facility, its engineering, design and construction, its components, and related work, will be free from material defects caused by errors or omissions in design, engineering and construction or repaired as provided below, (b) each Facility will be free and clear of all Liens other than Permitted Encumbrances, and (c) each Facility and all parts thereof will be designed, constructed, tested, operated and maintained in material compliance with the Requirements, all applicable requirements of the latest revision of the ASTM, ASME, AWS, EPA, IEEE, ISA, National Electrical Code, National Electric Safety Code, and OSHA, as applicable, and the Uniform Building Code, Uniform Plumbing Code, and the applicable local County Fire Department Standards of the applicable county. Seller shall promptly repair or replace, or cause to be repaired or replaced, consistent with Prudent Utility Practice, any component of a Facility that does not comply with the foregoing warranties and guarantees. Seller shall at all times exercise commercially reasonable efforts to undertake, or cause to be undertaken, all recommended or required updates or modifications to each Facility, and its equipment and materials, including procedures, programming and software in a timely manner. Seller shall, at its expense, maintain or cause to be maintained throughout the Delivery Term an inventory of spare parts for each Facility in a quantity that is consistent with manufacturers’ recommendations and Prudent Utility Practice.
Section 5.2 Buyer’s Right to Monitor in General. At Buyer’s sole expense and without interfering with Seller’s or its Affiliates’ activities at the Facility, Buyer shall have the right, and Seller shall permit Buyer and its representatives, advisors, engineers, and consultants, to observe, inspect, and monitor all operations and activities at each Site, including the performance of the contractors under the construction contracts pertaining to such Facility, the design, engineering, procurement, and installation of the equipment, start up and testing, and the achievement of Commercial Operation; provided that Buyer shall at all times comply with Seller’s,
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34 the contractor’s or the operator’s safety and security requirements when present at the Facility.
Notwithstanding the foregoing, Seller shall have the right and Buyer shall permit Seller to withhold any proprietary information, including with respect to proprietary intellectual property of Seller; provided that such information shall be provided by Seller to Buyer to the extent required by Buyer to enforce its rights or to carry out its responsibilities under this Agreement. In addition, Buyer shall hold any information obtained during or in connection with such monitoring in confidence pursuant to Section 14.21.
Section 5.3 Effect of Review by Buyer. Any review by Buyer of the design, construction, engineering, operation or maintenance of a Facility is solely for the information of Buyer. Buyer shall have no obligation to share the results of any such review with Seller, nor shall any such review or the results thereof (whether or not the results are shared with Seller) nor any failure to conduct any such review relieve Seller from any of its obligations under this Agreement.
By making any such review, Buyer makes no representation as to the economic and technical feasibility, operational capability or reliability of a Facility. Seller shall in no way represent to any third party that any such review by Buyer of a Facility, including, but not limited to, any review of the design, construction, operation or maintenance of the Facility by Buyer, is a representation by Buyer as to the economic and technical feasibility, operational capability, or reliability of the Facility. Seller is solely responsible for the economic and technical feasibility, operational capability and reliability thereof.
Section 5.4 Reporting and Information; Administration and Periodic Reporting. (a) Seller shall provide to Buyer such other information regarding the permitting, engineering, construction, or operation of each Facility by Seller or its subcontractors and other data concerning Seller, its subcontractors and the Facilities as Buyer may, from time to time, reasonably requested in order to enforce its rights or discharge its responsibilities under this Agreement. Notwithstanding the foregoing, Seller shall have the right and Buyer shall permit Seller to withhold any proprietary information, including with respect to the intellectual property of Seller; provided that such information shall be provided by Seller to Buyer to the extent required by Buyer to enforce its rights or to carry out its responsibilities under this Agreement. In addition, Buyer shall hold any Confidential Information obtained during or in connection with such monitoring in confidence pursuant to Section 14.21.
(b) Seller shall perform administrative and periodic reporting to Buyer which shall include the following:
(i) Safety matters including monthly reports, including OSHA recordable and non-recordable incidents and site safety information; (ii) Monthly operational reports with respect to Facility activities, including plant performance, capacity factor, availability, weather and generation data, and in each case confirming that applicable contractual requirements have been met; (iii) Any notice of non-compliance with NERC and FERC rules or regulations;
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35 (iv) Any environmental contamination that Seller or its Affiliates, and any of their contractors, become aware of at any Site; and (v) Any information that is requested by the CPUC with respect to a Facility, this Agreement, or the Project.
Section 5.5 Initial Performance Test. Prior to the Commercial Operation Date for each Facility, Seller shall provide to Buyer the opportunity, at Buyer’s sole expense and without interfering with Seller’s or its Affiliates’ activities at the Facility, to:
(a) review and monitor the contractors’ performance and achievement of all initial performance tests and all other tests required under the Facility construction contracts performed to achieve the Commercial Operation Date, and Seller shall, or shall cause its contractor, to provide at least ten (10) Business Days prior notice to Buyer before any such test begins; provided that Buyer shall at all times comply with Seller’s or the contractor’s safety and security requirements when present at the Facility;
(b) be present to witness such initial performance tests and review the results thereof; provided that Buyer shall at all times comply with Seller’s or the contractor’s safety and security requirements when present at the Facility; and (c) perform such detailed examinations, inspections, quality surveillance, and tests as are appropriate and advisable to determine that the Facility equipment and all ancillary components of the Facility have been installed in accordance with the Facility construction contracts and the Requirements.
Section 5.6 Contract Provisions. For each Facility, Seller shall cause to be included in the Facility construction contracts provisions whereby the contractors and Seller:
(a) grant to Buyer, at Buyer’s sole expense and without interfering with Seller’s or the construction contractors’ activities at the Facility, rights of access to the Facility at all reasonable times (but subject to reasonable safety precautions) and the right to inspect, make notes about, and copy all documents, drawings, plans, specifications, permits, test results, and information as Buyer may reasonably request; provided that Buyer shall at all times comply with Seller’s or the contractor’s safety and security requirements when present at the Facility.
Notwithstanding the foregoing, Seller shall have the right and Buyer shall permit Seller to withhold any proprietary information, including with respect to intellectual property of Seller; provided that such information shall be provided by Seller to Buyer to the extent required by Buyer to enforce its rights or to carry out its responsibilities under this Agreement. In addition, Buyer shall hold any Confidential Information obtained during or in connection with such monitoring in confidence pursuant to Section 14.21;
(b) make the personnel of, and consultants to, the contractors and Seller available to Buyer and its agents, representatives and consultants for a reasonable number of hours, at reasonable times, and with reasonable prior notice for purpose of discussing any aspect of the Facility or the development, engineering, construction, installation, testing, or performance thereof; and
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36 (c) otherwise cooperate in all reasonable respects with Buyer and its Authorized Representatives, advisors, engineers and consultants in order to allow Buyer to exercise its rights under this Section 5.6.
Section 5.7 Quality Assurance Program; Routine and Preventive Maintenance Services.
(a) Seller shall develop a written quality assurance policy (“Quality Assurance Program”) in accordance with the requirements of Appendix H within sixty (60) days prior to commencement of construction on the first Facility, and Seller shall cause all work performed on or in connection with each Facility to comply with said Quality Assurance Program. (b) Seller shall perform, or cause to be performed, routine and preventive maintenance services in accordance with manufacturers’ instructions and Prudent Utility Practices, including:
(i) Conducting regular equipment inspections and recording any noncompliance with applicable standard specifications for the equipment, and reporting any noncompliance that materially and adversely affects a Facility’s performance or is likely to materially and adversely affect a Facility’s performance and any defective conditions or operational failures with respect to the equipment to Buyer; (ii) Performing all required preventive maintenance, including meter calibration and testing, and scheduling and arranging for routine maintenance during operations and planned outages, and for maintenance that can be conducted during a Forced Outage;
(iii) Conducting periodic maintenance to equipment in accordance with Prudent Utility Practices, and providing a report thereof to Buyer; (iv) Conducting monthly quality assurance inspections of Facility plant and equipment and providing a report thereof to Buyer.
Section 5.8 No Liens. Except as otherwise permitted by this Agreement, each Facility shall be owned by Seller or an Affiliate of Seller. Seller shall not, and shall cause its Affiliates not to, other than to another Affiliate, sell, transfer or otherwise dispose of or create, incur, assume or permit to exist any Lien (other than Permitted Encumbrances) on any portion of any Facility without the prior written consent of Buyer.
Section 5.9 Seller Performance Security.
(a) Within thirty (30) days following the date that the Project Participant Approval has been received, Seller shall have furnished to Buyer a letter of credit issued by a Qualified Issuer substantially in the form of Appendix E, as such form may be modified with the consent of Buyer (not to be unreasonably withheld, conditioned or delayed), in an amount equal to
which shall secure all of Seller’s obligations to pay liquidated damages under Section 3.7 (“Project Development Security”). Seller shall maintain such Project Development
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37 Security until Buyer is required to return the Project Development Security under Section 5.9(c) below. Any reduction of the Minimum Capacity pursuant to Section 2.4 or Section 3.1 shall result in the recalculation of the amount of Project Development Security and Seller shall be entitled to reduce the Project Development Security in accordance with such calculation. In the event that Buyer draws on the Project Development Security at any time, Seller shall within ten (10) Business Days thereafter replenish such Project Development Security; provided, however, that in no event shall the aggregate amount of the original posting of Project Development Security plus all such replenishments exceed an amount equal to two hundred percent (200%) of the applicable amount of Project Development Security required to be maintained by Seller at the time of any such replenishment.
(b) As a condition to the achievement of Commercial Operation for each Facility, Seller shall have furnished to Buyer (i) one or more guarantees from a Qualified Guarantor substantially in the form of Appendix G, as such form may be modified with the consent of Buyer (not to be unreasonably withheld, conditioned or delayed), (ii) a letter of credit issued by a Qualified Issuer substantially in the form of Appendix E, as such form may be modified with the consent of Buyer (not to be unreasonably withheld, conditioned or delayed), or (iii) a combination of any of the foregoing, in the aggregate amount equal to , which shall guarantee Seller’s obligations under this Agreement following the Commercial Operation Date (“Delivery Term Security”). From and after the Commercial Operation Date for a Facility, Seller shall maintain the corresponding Delivery Term Security until Buyer is required to return the Delivery Term Security to Seller as set forth in Section 5.9(d) below; provided that Seller may, from time to time, replace any portion of the Delivery Term Security with another form of Delivery Term Security meeting the foregoing requirements. In the event that Buyer draws on the Delivery Term Security at any time, Seller shall within ten (10) Business Days thereafter replenish such Delivery Term Security.
(c) Upon the earliest to occur of (i) the Project Net Capacity is increased to an amount that is equal to or greater than the Minimum Capacity, (ii) this Agreement is terminated while the Project Development Security is outstanding, or (iii) Seller’s payment of Capacity Buydown Damages in accordance with Section 3.7(a), Seller shall no longer be required to maintain the Project Development Security, and Buyer shall return to Seller the Project Development Security, less any and all amounts drawn by Buyer as permitted under the terms of this Agreement. The Project Development Security (or portion thereof) due to Seller after any and all amounts are drawn by Buyer as permitted under the terms of this Agreement shall be returned to Seller within five (5) Business Days after the first event described in clauses (i) through (iii) of this Section 5.9(c) occurs.
(d) Buyer shall return the unused portion of Delivery Term Security, if any, to Seller promptly after both of the following have occurred: (i) the Agreement Term has ended, and (ii) all obligations of Seller arising under this Agreement are paid (whether directly or indirectly such as through set-off or netting) or performed in full. (e) Seller shall notify Buyer of the occurrence of a Downgrade Event within five (5) Business Days after obtaining knowledge of the occurrence of such event. If at any time there shall occur a Downgrade Event, then Buyer may require that Seller replace the Performance
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38 Security from the Person that has suffered the Downgrade Event within ten (10) Business Days after notice from Buyer to Seller requesting such replacement Performance Security. In the event that such replacement Performance Security is not so provided by Seller, Buyer shall have the right to demand payment of the full amount of such Performance Security and retain such amount in order to secure Seller’s obligations under this Section 5.9 and other applicable provisions of this Agreement. In such case, Buyer shall hold the demanded amount in an escrow account until the earlier of (i) Seller’s delivery of replacement Performance Security, upon receipt of which Buyer shall return to Seller the portion of the Performance Security then remaining in the escrow account within ten (10) Business Days and (ii) the date that the applicable Performance Security is required to be returned to Seller in accordance with Section 5.9(c) for the Project Development Security or Section 5.9(d) for the Delivery Term Security.
(f) If any Performance Security is in the form of a letter of credit, then Seller shall either provide, or cause to be provided, a replacement letter of credit or guarantee (from a Qualified Issuer or Qualified Guarantor, as applicable) in the required amount set forth in this Section 5.9 within ten (10) Business Days after the earlier of the date that Seller becomes aware, or Buyer notifies Seller of the occurrence of any one of the following events:
(i) the failure of the issuer of the letter of credit to renew such letter of credit thirty (30) Business Days prior to the expiration of such letter of credit; (ii) the failure of the issuer of the letter of credit to immediately honor Buyer’s properly documented request to draw on such letter of credit; or (iii) the issuer of the letter of credit suffers a Bankruptcy. (g) If any Performance Security is in the form of a guarantee, then Seller shall either provide, or cause to be provided, a replacement guarantee or letter of credit (from Qualified Guarantor or Qualified Issuer, as applicable) in the required amount set forth in this Section 5.9 within ten (10) Business Days after the earlier of the date that Seller becomes aware, or Buyer notifies Seller, of the occurrence of any one of the following events:
(i) the failure of the guarantor to make a payment thereunder immediately following Buyer’s properly documented claim made pursuant to the guarantee in accordance with its terms;
(ii) 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;
(iii) the guarantor suffers a Bankruptcy;
(iv) the guarantee fails to be in full force and effect in accordance with the terms of this Agreement prior to the satisfaction of all obligations of Seller under this Agreement; or
(v) the guarantor repudiates, disaffirms, disclaims, or rejects, in whole or in part, or challenges the validity of, its guarantee.
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39 (h) In the event that a replacement letter of credit or guarantee is not delivered in accordance with Section 5.9(f) or (g), as applicable, Buyer shall have the right to demand payment of the full amount of the letter of credit or the guarantee, as applicable. In such case, Buyer shall hold the demanded amount in an escrow account until the earlier of (i) Seller’s delivery of replacement Performance Security, upon receipt of which Buyer shall return to Seller the portion of the Performance Security then remaining in the escrow account within ten (10) Business Days and (ii) the date that the applicable Performance Security is required to be returned to Seller in accordance with Section 5.9(c) for the Project Development Security or Section 5.9(d) for the Delivery Term Security.
(i) 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 Project Development Security and Delivery Term Security, 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 shall, from time to time as requested by Buyer, execute, acknowledge, record, register, deliver and file all such notices, statements, instruments, and other documents as may be necessary or advisable to render fully valid, perfected, and enforceable under all Requirements of Law the Performance Security and the rights, Liens, and priorities of Buyer with respect to such Performance Security.
(j) Except as otherwise provided in this Agreement, the Performance Security:
(i) constitutes security for, but is not a limitation of, Seller’s obligations under this Agreement, and (ii) shall not be Buyer’s exclusive remedy against Seller for Seller’s failure to perform in accordance with this Agreement.
Section 5.10 Lease or Permit No Longer in Effect. Seller shall remove from the Project any Facility that is unable to operate because one or more of the Leases or Permits fails to be in effect or has terminated for such Facility; provided, if such failure or termination is due to a decision of a Governmental Authority, such decision must be final and non-appealable. Seller shall provide notice to Buyer and remove such Facility from the Project and upon delivery of such notice the Project Net Capacity will be reduced by the amount of the Facility Net Capacity associated with such Facility and the Guaranteed Generation reduced in accordance with the reduced Project Net Capacity. If such Facility removal occurs after the Minimum Capacity Cure Date, Buyer shall calculate in a commercially reasonable manner, and consistent with Section
13.3(b), the positive amount, if any, calculated as its Costs, plus Losses, minus Gains with respect to such reduction in Project Net Capacity; provided, Costs, Losses and Gains shall all be determined with respect to the reduction in Project Net Capacity rather than with respect to termination of all obligations under this Agreement, and further provided that, if the result of the foregoing calculation is negative, no amount shall be due to Seller. As soon as reasonably practical, Buyer shall provide notice to Seller of such damages along with a demand for payment, which demand shall be provided with a written statement explaining in reasonable detail the calculation of the demanded amount. Within ten (10) Business Days after receipt of such demand and written statement, Seller shall pay the undisputed amount of such demand and provide written notice of any disputed amount (if any), which dispute shall be resolved in accordance with Section 14.3. If Buyer prevails in any such dispute, then Seller shall pay the amount determined to be due to Buyer, together with interest on such amount calculated at the Interest Rate from the original due date
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40 until the date paid. If, before the dispute is resolved, Buyer draws on the Delivery Term Security for any disputed amount and Seller thereafter prevails in the dispute, then Buyer (i) shall be required to refund the amount of the erroneous draw, together with interest calculated at the Interest Rate from the date of the draw through the date of refund and (ii) shall pay to Seller any documented costs and expenses incurred by Seller due to the erroneous draw on the Delivery Term Security. If Seller fails to pay or dispute the amount of a demand within ten (10) Business Days after receipt of Buyer’s demand and supporting written statement, then Buyer shall be entitled to draw from the Delivery Term Security the unpaid amount. Payment of the damages as described in this Section 5.10 are Buyer’s sole and exclusive remedies for Seller’s failure to maintain Leases or Permits for a Facility.
Section 5.11 Project Company Bankruptcy. Seller shall remove from the Project any Facility for which the Project Company is subject to a Bankruptcy. Seller shall provide notice to Buyer and remove the Facility of such bankrupt Project Company from the Project and upon delivery of such notice the Project Net Capacity will be reduced by the amount of the Facility Net Capacity associated with such Facility of the bankrupt Project Company and the Guaranteed Generation reduced in accordance with the reduced Project Net Capacity. If such Facility removal occurs after the Minimum Capacity Cure Date, Buyer shall calculate in a commercially reasonable manner, and consistent with Section 13.3(b), the positive amount, if any, calculated as its Costs, plus Losses, minus Gains with respect to such reduction in Project Net Capacity; provided, Costs, Losses and Gains shall all be determined with respect to the reduction in Project Net Capacity rather than with respect to termination of all obligations under this Agreement, and further provided that, if the result of the foregoing calculation is negative, no amount shall be due to Seller.
As soon as reasonably practical, Buyer shall provide notice to Seller of such damages along with a demand for payment, which demand shall be provided with a written statement explaining in reasonable detail the calculation of the demanded amount. Within ten (10) Business Days after receipt of such demand and written statement, Seller shall pay the undisputed amount of such demand and provide written notice of any disputed amount (if any), which dispute shall be resolved in accordance with Section 14.3. If Buyer prevails in any such dispute, then Seller shall pay the amount determined to be due to Buyer, together with interest on such amount calculated at the Interest Rate from the original due date until the date paid. If, before the dispute is resolved, Buyer draws on the Delivery Term Security for any disputed amount and Seller thereafter prevails in the dispute, then Buyer (i) shall be required to refund the amount of the erroneous draw, together with interest calculated at the Interest Rate from the date of the draw through the date of refund and (ii) shall pay to Seller any documented costs and expenses incurred by Seller due to the erroneous draw on the Delivery Term Security. If Seller fails to pay or dispute the amount of a demand within ten (10) Business Days after receipt of Buyer’s demand and supporting written statement, then Buyer shall be entitled to draw from the Delivery Term Security the unpaid amount. Payment of the damages as described in this Section 5.11 are Buyer’s sole and exclusive remedies for a Bankruptcy of a Project Company.
Section 5.12 Buyer Credit Arrangements.
(a) To secure its obligations under this Agreement, Buyer shall deliver to Seller within one hundred twenty (120) days after the Effective Date, Buyer Liability Pass Through Agreements from Project Participants with Liability Shares as set forth on Appendix M. Seller shall countersign each Buyer Liability Pass Through Agreement within ten (10) days of receipt of
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41 each such Buyer Liability Pass Through Agreement. Buyer shall maintain such Buyer Liability Pass Through Agreements in full force and effect until both of the following have occurred: (a) the Agreement Term has expired or terminated early; and (b) all payment obligations of Buyer due and payable under this Agreement are paid in full (whether directly or indirectly such as through set-off or netting).
(b) Buyer may amend Appendix M in its sole discretion with respect to the identity of Project Participants and the amount of each Project Participant’s Liability Share; and other amendments shall be subject to the consent of Seller (not to be unreasonably withheld, conditioned or delayed). If Buyer amends Appendix M, Buyer shall provide Seller replacement Buyer Liability Pass Through Agreements executed by Buyer and the applicable Project Participants that incorporate Liability Shares as set forth in the amended Appendix M (“Replacement BLPTAs”). Seller shall countersign each Replacement BLPTA executed by Buyer and the applicable Project Participant within ten (10) Business Days after Buyer’s delivery of such Replacement BLPTAs to Seller; provided that until the Replacement BLPTAs have been executed by Seller and all applicable Project Participants, the prior agreements will remain in effect.
ARTICLE VI
PURCHASE AND SALE OF POWER
Section 6.1 Purchases by Buyer.
(a) For all Delivered Energy comprised of Facility Energy from a Facility prior to its Commercial Operation Date, Seller shall sell and deliver, and Buyer shall purchase and receive, such Delivered Energy in accordance with Section 3.10. (b) For all Delivered Energy comprised of Facility Energy from a Facility after its Commercial Operation Date, Seller shall sell and deliver, and Buyer shall purchase and receive, all such Delivered Energy and all Replacement Energy for the price set forth in Section 2 of Appendix A; provided that, in no event shall Buyer be obligated to purchase or receive Delivered Energy in excess of the Maximum Generation unless Buyer shall by notice given to Seller elect to purchase any such Energy in excess of Maximum Generation. (c) Notwithstanding Section 6.1(b), during the period of time between the day that is one hundred eighty (180) days following the Commercial Operation Date of a Facility and the day that is one (1) day following the date upon which Buyer receives evidence that such Facility is CEC Certified, Buyer may retain a portion of any payment to be made to Seller hereunder associated with the Delivered Energy from such Facility in an amount equal to the positive difference between (1) the price of the Delivered Energy pursuant to Section 6.1(b), and (2) the average of the on-peak and off-peak Energy prices, weighted by the number of hours in the on-peak and off-peak periods, during the month in which the deliveries occurred for Energy that is not from an Eligible Renewable Energy Resource under the RPS, as listed in the Intercontinental Exchange Palo Verde Electricity Price Index or its successor index, or any other index mutually agreed by the Parties. Buyer shall release such retained amount, which shall not be calculated with interest of any kind, within forty-five (45) days following the receipt of evidence satisfactory to Buyer from Seller that the Facility is CEC Certified. Within thirty (30) days after any removal of a Facility under Section 3.11, Seller shall refund to Buyer, for Delivered Energy associated with
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42 such Facility and purchased by Buyer during the first one hundred eighty (180) days following the Commercial Operation Date of such Facility that has not been CEC Certified at the price set forth in paragraph 2 of Appendix A, the positive difference between (1) the price paid by Buyer and (2) the average of the on-peak and off-peak Energy prices, weighted by the number of hours in the on-peak and off-peak periods, during the month or months in which the deliveries of such Delivered Energy occurred for Energy that is not from an Eligible Renewable Energy Resource under the RPS, as listed in the Intercontinental Exchange Palo Verde Electricity Price Index or its successor index, or any other index mutually agreed by the Parties. Upon such removal, Seller shall have no obligation to transfer any Green Attributes related to the Delivered Energy from the removed Facility.
(d) At its sole discretion, Buyer or Project Participants may re-sell or use for another purpose all or a portion of the Facility Energy, Replacement Energy, Capacity Rights, and associated Green Attributes, provided that no such re-sale or use shall relieve Buyer of any obligations hereunder. Buyer shall have exclusive rights to offer, bid, or otherwise submit the Facility Energy, Replacement Energy, Capacity Rights, and associated Green Attributes for resale in the market, and retain and receive any and all related revenues. Buyer has no obligation to purchase from Seller any Facility Energy, Replacement Energy, and associated Green Attributes for which the Facility Energy is not or cannot be delivered to the Points of Delivery as a result of an outage of a Facility, a Force Majeure, curtailments required under a Facility’s interconnection agreement, or curtailments required by Buyer due to a System Emergency not resulting from the fault or negligence of Buyer.
Section 6.2 Seller’s Failure. Except as provided in Article IX, and except for Energy that is RPS Compliant that is provided by the Transmission Provider pursuant to its tariff in connection with the Transmission Services, in no event shall Seller have the right to procure energy from sources other than the Project for sale and delivery pursuant to this Agreement. Seller shall not sell, deliver or convey any Facility Energy, Capacity Rights, and associated Green Attributes from any Facility to any third-party except as set forth in Section 6.4. If Seller sells any part of any Facility Energy, Capacity Rights, and associated Green Attributes to a third party in violation of Section 6.4 (including in connection with a claimed Force Majeure that does not satisfy the requirements of a Force Majeure in accordance with Section 14.3), Seller shall pay Buyer, within thirty (30) days of such sale all proceeds that Seller receives from such sale.
Section 6.3 Buyer’s Failure. Unless excused by Force Majeure or Seller’s failure to perform its obligations under this Agreement, if Buyer fails to receive at the Points of Delivery all or any part of any Facility Energy required to be received by Buyer under this Article VI, Article VIII, or Article IX, Buyer shall pay Seller, within thirty (30) days of Seller’s written request therefor, an amount for each MWh of such deficiency equal to the positive difference, if any, obtained by subtracting the Sales Price from the price per MWh that would have been payable by Buyer for the Energy and Green Attributes not received by Buyer. Seller shall provide Buyer prompt written notice of the Sales Price together with back-up documentation.
Section 6.4 Sales to Third Parties. Seller may sell to Persons other than Buyer (i) any Facility Energy and associated Green Attributes in excess of Maximum Generation not purchased by Buyer in accordance with Section 6.1, and (ii) any Facility Energy, Capacity Rights, and associated Green Attributes that Seller is unable to deliver to Buyer due to Force Majeure declared
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43 by Buyer or Seller that either prevents Seller from delivering to Buyer the Facility Energy, Capacity Rights, and associated Green Attributes, or that prevents Buyer from receiving the Facility Energy, Capacity Rights, and associated Green Attributes. Except as provided above in this Section 6.4, Seller shall not sell or otherwise transfer any Facility Energy, Capacity Rights, or associated Green Attributes to any Person other than Buyer during the Delivery Term, except for any Facility Energy (excluding any associated RECs or Capacity Rights) that is Imbalance Energy transferred or sold pursuant to the terms of a Transmission Provider’s tariff.
Section 6.5 Nature of Remedies. The damages that Buyer would incur as a result of Seller’s failure as described in Section 6.2 or that Seller would incur as a result of Buyer’s failure as described in Section 6.3 would be difficult or impossible to predict with certainty, and it is impractical and difficult to assess actual damages in those circumstances, but the liquidated damages set forth in Section 6.2 and Section 6.3 are fair and reasonable calculations of such damages. The remedy set forth in Section 6.2 is in addition to, and not in lieu of, any other right or remedy of Buyer under this Agreement for failure of Seller to sell and deliver Energy and Green Attributes as and when required by this Agreement. The remedy set forth in Section 6.3 is in addition to any other right or remedy of Seller for any failure by Buyer to receive Energy as and when required by this Agreement.
ARTICLE VII
TRANSMISSION AND SCHEDULING; TITLE AND RISK OF LOSS
Section 7.1 In General. Seller shall arrange and be responsible for any Transmission Services required to deliver Facility Energy or Replacement Energy to the Point of Delivery and shall Schedule or arrange for Scheduling services with its Transmission Providers to deliver the Facility Energy or Replacement Energy to the Point of Delivery. Seller shall have no obligations or liability in respect of Facility Energy or Replacement Energy after the Point of Delivery (as to Transmission Services or otherwise).
Section 7.2 Scheduling of Energy.
(a) Seller shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Project for the delivery of Delivered Energy to the Point of Delivery, and bid the Delivered Energy into the Day-Ahead Market and the Real-Time Market consistent with Prudent Operating Practice. Seller shall perform or cause to be performed all scheduling and transmission activities in compliance with (i) the CAISO Tariff, (ii) WECC scheduling practices, and (iii) Prudent Operating Practice. The Parties agree to communicate and cooperate as necessary in order to address any scheduling or settlement issues as they may arise, and to work together in good faith to resolve them in a manner consistent with the terms of the Agreement. Seller (as the Project’s Scheduling Coordinator) shall ensure that all Delivered Energy and Replacement Energy is electronically tagged (e-tagged) in accordance with Generally Accepted Utility Practice. Seller shall comply with any requirements of the CPUC, CEC, WREGIS and CARB, as applicable, with respect to documenting and reporting E-tags, including, as applicable, requirements to match E-tags to WREGIS Certificate creation. In addition to Seller’s requirements under Section 8.4, Seller shall provide additional information as reasonably requested by Buyer on E-tags or as reasonably necessary to facilitate Buyer’s members’ reporting requirements under the RPS.
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44 (b) As Scheduling Coordinator for the Project, Seller shall be responsible for all CAISO costs, including without limitation, all penalties, Imbalance Energy charges, and other charges, and shall be entitled to all CAISO revenues, including without limitation, credits, Imbalance Energy payments, and revenues associated with CAISO dispatches, bid cost recovery, Inter-SC Trade (as defined in the CAISO Tariff) credits, or other credits in respect of the Delivered Energy. Seller shall be responsible for all CAISO penalties resulting from any failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement. The Parties agree that any Availability Incentive Payments (as defined in the CAISO Tariff) are for the benefit of Seller and for Seller’s account and that any Non-Availability Charges (as defined in the CAISO Tariff) are the responsibility of Seller and for Seller’s account. In addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling, outage reporting, or generator operation, the cost of such sanctions or penalties arising from the scheduling, outage reporting, or generator operation of the Facility shall be the Seller’s responsibility.
(c) Seller (as the Project’s Scheduling Coordinator) shall be responsible for all settlement functions with the CAISO related to the Project. Seller or its Affiliates shall also fulfill the contractual, metering, and interconnection requirements so as to be able to deliver Facility Energy and Replacement Energy to the Points of Delivery. (d) At least forty-five (45) days before the first anticipated Commercial Operation Date and no later than forty-five (45) days before the beginning of each Contract Year, Seller or Seller’s designee shall provide, or cause to be provided, a non-binding forecast of each month’s average-day deliveries of Facility Energy and Replacement Energy, by hour, for the following eighteen (18) months.
(e) At least ten (10) days before the first anticipated Commercial Operation Date and no later than ten (10) Business Days before the beginning of each month during the Delivery Term, Seller or Seller’s designee shall provide, or cause to be provided, a non-binding forecast of each day’s average deliveries of Facility Energy and Replacement Energy, by hour, for the following month to Buyer at the addresses for scheduling notices set forth in Appendix C. (f) By 4:30 a.m. on the Business Day immediately preceding each day of delivery of Facility Energy during the Delivery Term, Seller or Seller’s designee shall cause Seller’s Scheduling Coordinator to provide Buyer with a copy of a non-binding hourly forecast of deliveries of Facility Energy and Replacement Energy for each hour of the immediately succeeding day. A forecast provided a day prior to any non-Business Day shall include forecasts for the immediate day, each succeeding non-Business Day and the next Business Day. Seller shall provide Buyer with a copy of any updates to such forecast indicating a change in forecasted Facility Energy and Replacement Energy from the then current forecast at the addresses for scheduling notices set forth in Appendix C.
(g) By 12:00 p.m. on the normal Business Day prior to each pre-scheduling day as identified in the WECC pre-scheduling calendar, Seller shall provide Buyer via email, at the addresses for scheduling notices set forth in Appendix C, day-ahead pre-schedules for each of the succeeding twenty-four (24) hours in the form of an excel spreadsheet. Seller shall notify Buyer
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45 or Buyer’s Agent via telephone of any hourly changes due to a change in unit availability or an outage no later than one-hundred five (105) minutes prior to the start of such Scheduling hour. (h) Throughout the Delivery Term, Seller shall provide to Buyer and Project Participants, if requested by the applicable Project Participant, access to the supervisory control and data acquisition (“SCADA”) system of each Facility to the extent necessary to allow Buyer and those Project Participants who have requested access to obtain the following data on a real-time basis: for each Facility that has achieved Commercial Operation, read-only access to megawatt capacity and any other facility availability information; read-only access to energy output information collected by the SCADA system for the Facility; provided that if Buyer is unable to access the Facility’s SCADA system, then upon written request from Buyer, Seller shall provide energy output information to Buyer in four (4)-second intervals in the form of a flat file to Buyer through a secure file transport protocol (FTP) system with an e-mail back-up for each flat file submittal; and read-only access to all electricity, production, and consumption data from the Electric Metering Devices.
Section 7.3 Costs. Seller shall be responsible for any costs or charges imposed on or associated with the delivery and scheduling of Facility Energy to the Points of Delivery.
Section 7.4 Curtailment Required by Buyer; Market Curtailment Periods. Seller shall reduce deliveries of Energy for (a) curtailments required under a Facility’s interconnection agreement or (b) curtailments required by Buyer due to a System Emergency not resulting from the fault or negligence of Buyer, and Seller may reduce deliveries of Energy in the event of a Market Curtailment Period; provided that, for any curtailed Energy resulting from a Market Curtailment Period, Buyer will pay Seller for such curtailed Energy as set forth in Section 3 of Appendix A. During the Delivery Term, the Parties shall estimate the amount of curtailed Energy for each such curtailment event by multiplying (i) the arithmetic average of the applicable Facility’s metered output rate, in MW, immediately before and after such curtailment event, by (ii) the duration of such curtailment event. The Parties shall use the curtailed Energy estimate for the purpose of determining Seller’s compliance towards Guaranteed Generation, and, solely with respect to curtailed Energy resulting from a Market Curtailment Period, for purposes of calculating any payments due from Buyer to Seller pursuant to Section 3 of Appendix A. For the avoidance of doubt, Buyer shall be obligated to take delivery of and pay for all Delivered Energy, except that Buyer shall not be obligated to take delivery of and pay for Energy to the extent that such Energy exceeds the Maximum Generation and Buyer has not elected to purchase such Energy as provided in Section 6.1.
Section 7.5 Curtailment of Seller’s Transmission Services. In the event of the curtailment or other interruption of the Transmission Services utilized pursuant to the Agreement that prevents Seller from delivering Facility Energy to the Primary Point of Delivery, Seller shall, subject to the last sentence of this Section 7.5, upon furnishing notice as soon as practicable to Buyer obtain alternate Transmission Services complying with the requirements of the Agreement utilizing other Transmission System or Systems for delivery of the Facility Energy to such Primary Point of Delivery or the Alternate Points of Delivery during the period of such curtailment or other interruption of such Transmission Services. Seller shall provide Buyer with advance notice, at the addresses for general notices set forth in Appendix C, of the end of the period of such curtailment or interruption and the restoration of the Transmission Services pursuant to the Agreement for the
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46 delivery of the Facility Energy to the Primary Point of Delivery. This Section 7.5 shall (i) not obligate Seller to utilize such alternate Transmission Services or Alternate Points of Delivery, as applicable, and (ii) not preclude Seller from claiming Force Majeure under Section 14.6, unless such alternate Transmission Services or Alternate Points of Delivery, as applicable, are available at costs that do not exceed six dollars per MWh ($6/MWh), or such alternate Transmission Services shall be available at costs that exceed six dollars per MWh ($6/MWh) and Buyer agrees to pay the amount of such excess.
Section 7.6 Title; Risk of Loss. As between the Parties, Seller shall be deemed to be in exclusive control (and responsible for any damages or injury caused thereby) of Facility Energy prior to a Point of Delivery, and Buyer shall be deemed to be in exclusive control (and responsible for any damages or injury caused thereby) of Facility Energy at and from such Point of Delivery.
Seller shall deliver all Facility Energy, Capacity Rights, and Green Attributes to Buyer free and clear of all Liens created by any Person other than Buyer. Title to and risk of loss as to all Facility Energy, Capacity Rights, and Green Attributes shall pass from Seller to Buyer at the respective Points of Delivery.
ARTICLE VIII
GREEN ATTRIBUTES; RPS COMPLIANCE
Section 8.1 Transfer of Green Attributes. For and in consideration of Buyer entering into this Agreement, and in addition to the agreement by Buyer and Seller to purchase and sell Facility Energy on the terms and conditions set forth herein, subject to Section 6.4, Seller shall transfer to Project Participants, and Project Participants shall receive from Seller, all right, title, and interest in and to all Green Attributes, whether now existing or acquired by Seller or that hereafter come into existence or are acquired by Seller during the Delivery Term, for all Facility Energy and Replacement Energy. Seller agrees to transfer and make such Green Attributes available to Project Participants immediately to the fullest extent allowed by applicable law upon Seller’s production or acquisition of the Green Attributes. Seller shall not assign, transfer, convey, encumber, sell or otherwise dispose of all or any portion of such Green Attributes to any Person other than Project Participants or attempt to do any of the foregoing with respect to any of the Green Attributes. The consideration for the transfer of Green Attributes is contained within the relevant prices for Delivered Energy under Articles VI and IX and Appendix A.
Section 8.2 Reporting of Ownership of Green Attributes. During the Delivery Term, Seller shall not report to any Person that the Green Attributes granted hereunder to Project Participants belong to any Person other than Buyer, and Buyer may report under any program that such Green Attributes purchased hereunder belong to it.
Section 8.3 Green Attributes. Upon Buyer’s request, Seller shall take all reasonable actions and execute all documents or instruments as are reasonable and necessary under applicable law, bilateral arrangements or other voluntary Green Attribute programs of any kind, as applicable, to maximize the attribution, accrual, realization, generation, production, recognition and validation of Green Attributes throughout the Delivery Term. Upon request of Buyer, Seller shall submit, a Green-e® Energy Tracking Attestation Form (“Attestation”) for Delivered Energy to the Center for Resource Solutions (“CRS”) at https://www.tfaforms.com/4652008 or its successor. The Attestation shall be submitted in accordance with the requirements of CRS and shall be submitted
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47 within thirty (30) days of Buyer’s request or the last day of the month in which the applicable Delivered Energy was generated, whichever is later.
Section 8.4 Use of Accounting System to Transfer Green Attributes. (a) In furtherance and not in limitation of Section 8.3, Seller shall use WREGIS or any successor system to evidence the transfer of any Green Attributes considered RECs under applicable law or any voluntary program (“WREGIS Certificates”) associated with Facility Energy or Replacement Energy in accordance with WREGIS reporting protocols. Prior to the Commercial Operation Date for a Facility, Seller shall establish an account with WREGIS and commence registration of such Facility with WREGIS. After each Facility is registered with WREGIS, at Buyer’s option, Seller shall transfer WREGIS Certificates using the Forward Certificate Transfer method, as described in WREGIS Operating Rules, from Seller’s WREGIS account to up to ten (10) Project Participant WREGIS accounts, as designated by Buyer; provided, however, that Buyer shall have identified such accounts by written notice to Seller delivered no later than ten (10) days prior to the Commercial Operation Date for such Facility. (b) Seller shall be responsible for the WREGIS expenses associated with registering each Facility, maintaining its account, WREGIS Certificate issuance fees, and transferring WREGIS Certificates to Project Participants, and Project Participants shall be responsible for the WREGIS expenses associated with maintaining their accounts and any subsequent transferring or retiring of WREGIS Certificates. (c) Forward Certificate Transfers shall occur monthly based on the certificate creation timeline established by the WREGIS Operating Rules. Since WREGIS Certificates will only be created for whole MWh amounts of Delivered Energy or Replacement Energy, any fractional MWh amounts (i.e., kWh) will be carried forward until sufficient generation is accumulated for the creation of a WREGIS Certificate. Seller shall, at its sole expense, ensure that the WREGIS Certificates for a given calendar month correspond with the Delivered Energy and Replacement Energy for such calendar month, as evidenced by the Facility’s or Replacement Unit’s metered data, as applicable, and, unless otherwise agreed by Buyer, matching E-Tags.
WREGIS Certificates must be matched with E-Tags, unless otherwise agreed by Buyer. Seller shall ensure that no WREGIS Certificates are transferred to a Project Participant’s WREGIS Account unless they are the result of Delivered Energy or Replacement Energy and matched with E-Tags. WREGIS Certificates without matching E-Tags will be rejected. (d) A “WREGIS Certificate Deficit” means any deficit or shortfall in WREGIS Certificates delivered to Buyer for a calendar month as compared to the Delivered Energy and Replacement Energy for the same calendar month caused by an error or omission of Seller. If any WREGIS Certificate Deficit is caused, or the result of any action or inaction by Seller, then the aggregate amount of Delivered Energy and Replacement Energy in the month of a WREGIS Certificate Deficit shall be reduced by the amount of the WREGIS Certificate Deficit for purposes of calculating Buyer’s payment to Seller under Article XI and Shortfall Energy for the applicable Contract Year; provided, however, that such adjustment shall not apply to the extent that Seller resolves the WREGIS Certificate Deficit within ninety (90) days after the month of such WREGIS Certificate Deficit. Without limiting Seller’s obligations under this Section 8.4, if a WREGIS Certificate Deficit is caused solely by an error or omission of WREGIS, the Parties shall cooperate
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48 in good faith to cause WREGIS to correct its error or omission. Seller shall be responsible for, at its expense, validating and disputing data with WREGIS prior to WREGIS Certificate creation each month. Buyer shall take all necessary actions to facilitate the transfer of Green Attributes as provided above, including accepting any transfer requests made by Seller through WREGIS in accordance with the foregoing. Notwithstanding any other provision of this Section 8.4, in the event that WREGIS is not in operation, Seller shall document the production and transfer of RECs under this Agreement by delivering to Buyer an attestation for the RECs produced by each Facility, or Replacement Energy, measured in whole MWh, or by such other method as Buyer shall designate, in accordance with the form set forth in Appendix P and the Parties shall cooperate to complete the transfer of WREGIS Certificates for the benefit of Buyer or Buyer’s designees as soon as reasonably possible. Buyer shall take all necessary actions to facilitate the transfer of Green Attributes as provided above, including accepting any transfer requests made by Seller through WREGIS in accordance with the foregoing.
Section 8.5 Further Assurances. At Buyer’s request, the Parties shall execute all such documents and instruments and take such other action in order to effect the transfer of the Green Attributes specified in this Agreement to Buyer’s designees and to maximize the attribution, accrual, realization, generation, production, recognition and validation of Green Attributes throughout the Delivery Term as Buyer may reasonably request. If WREGIS changes the WREGIS Operating Rules after the Effective Date or applies the WREGIS Operating Rules in a manner inconsistent with this Section 8.5 after the Effective Date, the Parties promptly shall modify Section 8.4 as reasonably required to cause and enable Seller to transfer to Buyer’s designees a quantity of WREGIS Certificates for each given calendar month that corresponds to the Delivered Energy and Replacement Energy delivered in the same calendar month; provided, however, that Seller’s obligations under Section 8.4 shall be subject to the Compliance Expenditure Cap, in accordance with Section 8.6(c).
Section 8.6 RPS Compliance.
(a) Seller, and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement that: (i) the Project qualifies and is certified by the CEC as an Eligible Renewable Energy Resource (“ERR”) as such term is defined in Public Utilities Code Section 399.12 or Section 399.16; and (ii) the Project’s output delivered to Buyer qualifies under the requirements of the California Renewables Portfolio Standard. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC 6]. (b) The term “commercially reasonable efforts” as used in Section 8.6(a) and in Section 8.6(e) means Seller’s compliance with Section 8.6(c) and (d), below. The term “Project” as used in Section 8.6(a) means each Facility included in the Project. (c) If (i) a Change in Law occurring after the Effective Date has increased Seller’s known or reasonably expected costs (A) to cause any Facility, its Facility Energy or the associated Green Attributes to be RPS Compliant or to obtain, maintain, convey or effectuate Buyer’s use of any Green Attributes, or (B) to cause any Facility to be or to remain a Firm Clean Resource, or (ii) a change in WREGIS Operating Rules after the Effective Date increases Seller’s
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49 costs to comply with its obligations under Section 8.4 (the obligations set forth in the foregoing clauses (i) and (ii) collectively, “Compliance Obligations”), then the Parties agree that the maximum aggregate amount of out-of-pocket costs and expenses (“Compliance Costs”) that Seller shall be required to bear during the Delivery Term with respect to each affected Facility to comply with all of such Compliance Obligations shall be capped at of the Facility Net Capacity of the applicable affected Facility (“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.
(d) Any actions required for Seller to comply with its obligations set forth in Section 8.6(c) above, the Compliance Costs of which will be included in the Compliance Expenditure Cap, shall be referred to collectively as the “Compliance Actions.” If Seller reasonably anticipates the need to incur Compliance Costs in excess of the Compliance Expenditure Cap in order to take any Compliance Action, then Seller shall provide written notice to Buyer of such anticipated Compliance Costs. 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 (i) agree to reimburse Seller for all or some portion of the Compliance Costs that exceed the Compliance Expenditure Cap, as applicable (such Buyer-agreed upon costs, the “Accepted Compliance Costs”), or (ii) waive Seller’s obligation to take such Compliance Actions, or any part thereof for which Buyer has not agreed to reimburse Seller.
If Buyer does not respond to a notice given by Seller under this Section 8.6(d) within sixty (60) days after Buyer’s receipt of same, Buyer shall be deemed to have waived its rights to require Seller to take the Compliance Actions that are the subject of the notice, and Seller shall have no further obligation to take, and no liability for any failure to take, the Compliance Actions that are the subject of the notice for the remainder of the Term. 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.
(e) Seller and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement the Renewable Energy Credits transferred to Buyer conform to the definition and attributes required for compliance with the California Renewables Portfolio Standard, as set forth in California Public Utilities Commission Decision 08-08-028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC REC-1].
(f) Seller warrants that all necessary steps to allow the Renewable Energy Credits transferred to Buyer to be tracked in the Western Renewable Energy Generation Information System will be taken prior to the first delivery under the contract. [STC REC-2].
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50 (g) The phrase “such Facility qualifies and is certified by the CEC as an Eligible Renewable Energy Resource” as used in Section 8.6(a) means “such Facility qualifies and is CEC Pre-certified or CEC Certified as an Eligible Renewable Energy Resource.” Section 8.7 Solar Generating Capacity Serving Parasitic Load. Seller has the right, but not the obligation, to install and operate solar generating capacity behind a Facility’s Electric Metering Devices at any Site for purposes of providing some or all of such Facility’s Parasitic Load, in which case the geothermal Energy generated by such Facility that would have otherwise served the Parasitic Load shall for purposes of this Agreement constitute Facility Energy from such Facility and shall be sold to Buyer in accordance with the provisions of this Agreement; provided, that Seller shall ensure that such solar generation (i) is only used to serve Parasitic Load associated with the applicable Facility, and (ii) is not delivered to Buyer for sale hereunder. Buyer acknowledges that using on-site solar generation to supply the applicable Facility’s Parasitic Load will result in an increase in Delivered Energy and associated Green Attributes delivered by Seller hereunder by reducing station use, and Buyer agrees that such increase in Delivered Energy and associated Green Attributes will be sold to Buyer in accordance with the terms of this Agreement.
ARTICLE IX
MAKEUP OF SHORTFALL ENERGY
Section 9.1 Makeup of Shortfall. During each Contract Year, all Delivered Energy during such Contract Year shall first be applied to the determination of whether Seller has delivered the Guaranteed Generation. Except to the extent caused by a Force Majeure (but subject to the provisions of Section 14.6(a) providing that the obligations of Seller with respect to satisfaction of Guaranteed Generation under this Article IX not satisfied due to Force Majeure are not excused, but such required delivery shall be extended for the duration of the Force Majeure), or except for curtailment under Section 7.4 or Buyer’s failure to accept Facility Energy in accordance with this Agreement, if Seller fails during any Contract Year to deliver Delivered Energy in an amount equal to the Guaranteed Generation, then Seller shall make-up that shortfall of Delivered Energy (such shortfall between the Guaranteed Energy and the Delivered Energy, “Shortfall Energy”) in the same Contract Year in accordance with this Article IX.
Section 9.2 Replacement Energy. Seller may reduce the amount of Shortfall Energy by providing Replacement Energy in the same Contract Year. The Replacement Energy shall be delivered to Buyer at the Points of Delivery on a delivery schedule reasonably approved by Buyer and consistent with the Project’s historic delivery profile. As employed in this Agreement, “Replacement Energy” means Energy and associated Green Attributes that is produced by a Replacement Unit (a) for which Seller has obtained rights to sell prior to the time that the Energy and associated Green Attributes have been generated, (b) that Seller has not sold or transferred to any other person or entity, (c) that is free and clear of all encumbrances, (d) that includes Green Attributes that have the same value and the same vintage with respect to the timeframe for retirement of such Green Attributes as the Green Attributes that would have been generated by the Project during the period for which the Replacement Energy is being provided; and (e) that is transferred to Buyer in real time.
Section 9.3 Shortfall Liquidated Damages. To the extent Seller is unable to procure sufficient Replacement Energy to make up any remaining Shortfall Energy within the same
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51 Contract Year, Seller shall pay Buyer, as liquidated damages, an amount for each MWh of remaining Shortfall Energy equal to the positive difference, if any, obtained by subtracting the amount that Buyer would have paid had Project Energy equal to the amount of Shortfall Energy been delivered to the Points of Delivery from the Replacement Price (“Shortfall Liquidated Damages”). The Shortfall Liquidated Damages payable under this Section 9.3 shall be payable in lieu of actual damages, shall be guaranteed as to payment by the Delivery Term Security, and, notwithstanding any other provision of this Agreement, other than Buyer’s remedies for a Default by Seller under Section 13.1(f), Shortfall Liquidated Damages shall be Buyer’s sole remedy, and Seller’s sole liability, for Seller’s failure to deliver Facility Energy and the associated Green Attributes and Replacement Energy and associated Green Attributes as provided under Sections
9.1 and 9.2, above. The Parties acknowledge and agree that (i) the damages that Buyer would incur due to shortfalls in Delivered Energy would be difficult or impossible to predict with certainty, and (ii) it is impractical and difficult to assess actual damages in those circumstances and, therefore, Shortfall Liquidated Damages are a fair and reasonable calculation of such damages.
ARTICLE X
CAPACITY RIGHTS
Section 10.1 Purchase and Sale of Capacity Rights.
(a) For and in consideration of Buyer entering into this Agreement, and in addition to the agreement by Buyer and Seller to purchase and sell Facility Energy and Green Attributes on the terms and conditions set forth in this Agreement, Seller hereby transfers to Buyer, and Buyer hereby accepts from Seller, all of the Capacity Rights, subject to Section 6.4. The consideration for the transfer of Capacity Rights is contained within the relevant prices for Facility Energy. In no event shall Buyer have any obligation or liability whatsoever for any debt pertaining to any Facility by virtue of Buyer’s ownership of the Capacity Rights or otherwise (b) Prior to Commercial Operation of each Facility, Seller either shall qualify each such Facility as a Pseudo-Tie Resource or a Dynamically Scheduled Resource with the CAISO pursuant to the CAISO’s New Resource Implementation process (as defined in the CAISO Tariff) and Seller shall maintain each Facility as either a Pseudo-Tie Resource or a Dynamically Scheduled Resource in compliance with the CAISO Tariff throughout the Delivery Term. (c) Buyer shall cause the Project Participants to use commercially reasonable efforts to maintain the Import Capability necessary to import the Guaranteed Net Qualifying Capacity from the Project into the CAISO. Seller shall use commercially reasonable efforts to support Buyer and Project Participants in obtaining such Import Capability. To the extent Project Participants do not or cannot maintain Import Capability necessary to support the importation of the Guaranteed Net Qualifying Capacity into the CAISO for reasons other than a Seller failure under this Agreement or the inability of Seller to maintain each Facility as either a Pseudo-Tie Resource or a Dynamically Scheduled Resource, the Capacity Attributes that are not imported or that cannot be imported shall constitute Deemed Delivered RA. (d) No later than the Notification Deadline corresponding to each Showing Month of the Delivery Term, Seller shall submit, or cause each Facility’s Scheduling Coordinator
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52 to submit, Supply Plans to identify and confirm the Resource Adequacy Benefits provided to Project Participants for each Showing Month from each Facility. (e) Resource Adequacy Benefits are delivered and received when the CIRA Tool shows that the Supply Plans for each Project Participant for each Facility have been accepted by the CAISO. If CAISO rejects either the Supply Plans or Project Participants’ Resource Adequacy Plans with respect to any part of the Resource Adequacy Benefits in any Showing Month, the Parties will confer, make such corrections as are necessary for acceptance, and resubmit the corrected Supply Plans or Resource Adequacy Plans for validation before the applicable Notification Deadline for the relevant Showing Month.
(f) If Seller anticipates that it will have an RA Shortfall Month, Seller may provide Replacement RA in the amount of (i) the Guaranteed Net Qualifying Capacity with respect to such Showing Month, minus (ii) the expected Net Qualifying Capacity that is able to be included in the Supply Plans for the Project Participants for such Showing Month plus any Deemed Delivered RA; provided, that any Replacement RA is communicated in the form of Appendix Q by Seller to Buyer no later than the Notification Deadline. (g) Notwithstanding anything to the contrary in this Agreement, Seller shall be permitted to reduce deliveries of Capacity Attributes and Resource Adequacy Benefits during any Force Majeure Event that results in Seller’s inability, despite the use of commercially reasonable efforts, to deliver Facility Energy to the Points of Delivery.
Section 10.2 Representation Regarding Ownership of Capacity Rights. Subject to Section 6.4, Seller shall not assign, transfer, convey, encumber, sell or otherwise dispose of any of the Capacity Rights to any Person other than the Project Participants or attempt to do any of the foregoing with respect to any of the Capacity Rights. Seller shall not report to any Person that any of the Capacity Rights belong to any Person other than Buyer (or at Buyer’s designation, the Project Participants).
Section 10.3 Resource Adequacy Failure.
(a) For each RA Shortfall Month, Seller shall pay to Buyer as liquidated damages the RA Deficiency Amount, as set forth in Section 10.3(b), and/or provide Replacement RA, as set forth in Section 10.1(f), in each case, as the sole remedy for Capacity Attributes that Seller fails to convey to the Project Participants from each Facility. (b) For each RA Shortfall Month, Seller shall pay to Buyer an amount (the “RA Deficiency Amount”) equal to the product of (i) the difference, expressed in kW, of (A) the then applicable Guaranteed Net Qualifying Capacity, minus (B) the Net Qualifying Capacity included in the Supply Plans for the Project Participants (or any subsequent purchasers to whom Project Participants have resold Capacity Attributes), plus any Replacement RA that was able to be included in the Supply Plans for such Showing Month for the Project Participants (or any subsequent purchasers to whom Project Participants have resold Capacity Attributes) and any Deemed Delivered RA, multiplied by (ii) the lower of (A) thirteen dollars and fifty cents ($13.50) per kW-month, or (B) the sum of the CPM Soft Offer Cap and the RA Penalties paid or required
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53 to be paid Project Participants for RAR applicable to the RA Deficiency Amount for such RA Shortfall Month.
Section 10.4 CPUC Mid-Term Reliability Requirements.
(a) Seller acknowledges that Buyer intends for this product to comply with mandatory procurement obligations for incremental capacity pursuant to CPUC D.21-06-035.
Seller represents and warrants to Buyer that commencing on the Effective Date and continuing throughout the Agreement Term:
(i) The Agreement includes the exclusive right to claim the Guaranteed Net Qualifying Capacity of the Facility as an incremental resource for purposes of CPUC D.21-06-035;
(ii) Seller has not and will not sell, assign, or transfer the right to claim any Facility as an incremental resource for purposes of CPUC D.21-06-035 to any other person or entity; and
(iii) Seller will reasonably cooperate with Buyer to ensure the Agreement will meet the procurement mandates set forth in CPUC D.21-06-035. (b) In furtherance of any compliance and reporting obligations related to the foregoing, and without limiting Seller’s obligations under any other provision of this Agreement, Seller agrees to provide documentation reasonably requested by Buyer in connection with such compliance obligations, including but not limited to the following:
(i) Evidence of interconnection, site control, notice to proceed with construction, and other evidence of construction status and progress towards Commercial Operation;
(ii) Engineering assessments demonstrating that each Facility satisfies the Firm Clean Resource requirements; and
(iii) Any other engineering assessments, contractual support, or relevant information required or requested by the CPUC pursuant to CPUC D.21-06-035 and any other applicable requirements of CPUC D.21-06-035 as such decision has been interpreted by the CPUC in public guidance documents or other public communications.
ARTICLE XI
BILLING; PAYMENT; AUDITS; METERING; POLICIES
Section 11.1 Billing and Payment. Billing and payment for all Delivered Energy, Green Attributes, and Capacity Rights shall be as set forth in this Article XI.
Section 11.2 Calculation of Delivered Energy; Invoices and Payment. (a) Delivered Quantity. For each month during the Agreement Term, commencing with the first month in which Energy is delivered by Seller to and received by Buyer
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54 under this Agreement, Seller shall calculate the amount of Energy so delivered and received during such month as determined (i) in the case of Delivered Energy, from recordings produced by the Electric Metering Devices maintained pursuant to Section 11.6, at or near midnight on the last day of the month in question, (ii) in the case of a Market Curtailment Period, the amount of curtailed Energy determined pursuant to Section 7.4, and (iii) in the case of Replacement Energy, the amount in MWh actually supplied by Seller pursuant to Section 9.2, as measured by metering equipment approved by Buyer in its reasonable discretion. Seller shall measure the amount of Delivered Energy using the Electric Metering Devices. All Electric Metering Devices will be operated pursuant to applicable CAISO-approved calculation methodologies and maintained as Seller’s cost.
(b) Invoice. Not later than the tenth (10th) day of each month, commencing with the month next following the month in which Energy is first delivered by Seller and received by Buyer under this Agreement, Seller shall deliver to Buyer an invoice showing the amount of Energy delivered by Seller for each Facility of the Project and received by Buyer, or curtailed Energy during a Market Curtailment Period, during the preceding month (with a separate allocation for each Facility and any Replacement Energy), Seller’s computation of the amount due Seller in respect thereof for Delivered Energy, including start-up and test Energy consistent with Section 3.10, for curtailed Energy resulting from a Market Curtailment Period, and for Replacement Energy, in each case in accordance with Appendix A. Seller shall deliver to Buyer with each monthly invoice copies of the recordings and data from the Electric Metering Devices that support the calculations of Energy and Green Attributes included in the invoice for such month. Each invoice shall include (a) a reconciliation in .xlsx format of hourly meter data, E-Tag data and associated calculations, including the lesser of each by hour, in a format reasonably requested by Buyer, plus any additional data as may be reasonably required by Buyer for compliance with CPUC reporting obligations, including pursuant to the CPUC’s Energy Division Portfolio Content Category Classification Review Handbook (or successor publication); (b) a statement of the quantity of WREGIS Certificates transferred during the prior month that have been matched with E-Tags, including as associated with the Dynamic Schedules, and (c) any additional information reasonably requested by Buyer. Buyer may reconcile invoices using meter data made available through Section 11.6(d). Monthly invoices shall be sent to the address set forth in Appendix C or such other address as Buyer may provide to Seller. Buyer shall not be required to make invoice payments if the invoice is received more than six (6) months after the billing period, unless Seller’s delay in delivering the invoice is due to one or more events of Force Majeure. Each invoice shall show the title of the Agreement and, if applicable, the Agreement number, the name, address and identifying information of Seller and the identification of material, equipment, or services covered by the invoices. To the extent applicable in accordance with Section 8.4, Seller shall deliver to Buyer attestations of Green Attributes concurrently with the monthly invoices sent pursuant to this Section 11.2(b). (c) Payment. Not later than the thirtieth (30th) day after receipt by Buyer of Seller’s monthly invoice (or the next succeeding Business Day, if such thirtieth (30th) day is not a Business Day), Buyer shall pay to Seller, by wire transfer of immediately available funds to an account specified by Seller or by any other means agreed to by the Parties from time to time, the amount set forth as due in such monthly invoice, subject to Section 11.3.
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55 Section 11.3 Disputed Invoices. In the event any portion of any invoice is in dispute, the undisputed amount shall be paid when due. The Party disputing a payment shall promptly notify the other Party of the basis for the dispute, setting forth the details of such dispute in reasonable specificity. Disputes shall be discussed by the Authorized Representatives, who shall use reasonable efforts to amicably and promptly resolve the disputes, and any failure to agree shall be subject to resolution in accordance with Section 14.3. Upon resolution of any dispute, if all or part of the disputed amount is later determined to have been due, then the Party owing such payment or refund shall pay within ten (10) days after receipt of notice of such determination the amount determined to be due plus interest thereon at the Interest Rate from the due date until the date of payment. For purposes of this Section 11.3, “Interest Rate” shall mean the lesser of (i) two hundred (200) basis points above the per annum prime rate reported daily in The Wall Street Journal, or (ii) the maximum rate permitted by applicable Requirements of Law. Buyer may dispute an invoice at any time within three hundred sixty-five (365) days after Buyer’s receipt of the invoice, provided that Buyer provides Seller with a written notification of such dispute, setting forth the details of such dispute in reasonable specificity. If, within three hundred sixty-five (365) days of Buyer’s receipt of an invoice, Buyer does not notify Seller in writing of a dispute related to that invoice, Buyer shall be deemed to have waived any dispute related to that invoice and the invoice shall be considered correct and complete.
Section 11.4 Right of Setoff. In addition to any right now or hereafter granted under applicable law and not by way of limitation of any such rights, either Party shall have the right at any time or from time to time without notice to the other Party or to any other Person, any such notice being hereby expressly waived, to set off against any amount due from such Party to the other under this Agreement any amount due from the other Party to it under this Agreement, including any amounts due because of breach of this Agreement or any other obligation.
Section 11.5 Records and Audits. Seller and its Affiliates shall maintain, and shall cause Seller’s and its Affiliates’ subcontractors and suppliers, as applicable, to maintain, all records pertaining to the management of this Agreement, related subcontracts, and performance of services pursuant to this Agreement (including all billings, costs, metering, and Green Attributes), in their original form, including reports, documents, deliverables, employee time sheets, accounting procedures and practices, records of financial transactions, and other evidence, regardless of form (for example, machine readable media such as disk or tape, etc.) or type (for example, databases, applications software, database management software, or utilities), sufficient to properly reflect all services performed pursuant to this Agreement. If Seller and its Affiliates or Seller’s and its Affiliates’ subcontractors or suppliers are required to submit cost or pricing data in connection with this Agreement, Seller and its Affiliates shall maintain all records and documents necessary to permit adequate evaluation of the cost or pricing data submitted, along with the computations and projections used. Buyer and the Authorized Auditors may discuss such records with Seller’s officers and independent public accountants (and by this provision Seller authorizes said accountants to discuss such billings and costs), all at such times and as often as may be reasonably requested. All such records shall be retained and shall be subject to examination and audit by the Authorized Auditors, for a period of not less than four (4) years following final payment made by Buyer hereunder or the expiration or termination date of this Agreement, whichever is later. Seller and its Affiliates shall make said records or to the extent accepted by the Authorized Auditors, photographs, micro-photographs, or other authentic reproductions thereof, available to the Authorized Auditors at the Seller’s offices located at all
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56 reasonable times and without charge. The Authorized Auditors may reproduce, photocopy, download, transcribe, and the like any such records. Any information provided by Seller and its Affiliates on machine-readable media shall be provided in a format accessible and readable by the Authorized Auditors. Seller shall not, however, be required to furnish the Authorized Auditors with commonly available software. Seller, its Affiliates, and Seller’s subcontractors and suppliers, as applicable to the services provided under this Agreement, shall be subject at any time with fourteen (14) days prior written notice to audits or examinations by Authorized Auditors, relating to all billings and to verify compliance with all Agreement requirements relative to practices, methods, procedures, performance, compensation, and documentation. Examinations and audits shall be performed using generally accepted auditing practices and principles. To the extent that the Authorized Auditor’s examination or audit reveals inaccurate, incomplete or non-current records, or records are unavailable, the records shall be considered defective. Consistent with standard auditing procedures, Seller shall be provided fifteen (15) days to review the Authorized Auditor’s examination results or audit and respond to Buyer’s prior to the examination’s or audit’s finalization and public release. If the Authorized Auditor’s examination or audit indicates Seller has been overpaid under a previous payment application, the identified overpayment amount shall be paid by Seller to Buyer within fifteen (15) days of notice to Seller of the identified overpayment.
Notwithstanding the foregoing, if the audit reveals that Buyer’s overpayment to Seller is more than the greater of $100,000 or five percent (5.0%) of the billings reviewed, Seller shall pay all expenses and costs incurred by the Authorized Auditors arising out of or related to the examination or audit.
Such examination or audit expenses and costs shall be paid by Seller to Buyer within fifteen (15) days of notice to the Seller of such costs and expenses. Any information provided by Seller to the Authorized Auditor shall be held by such Authorized Auditor in strict confidence and Seller may require such Authorized Auditor to enter into a reasonable confidentiality agreement prior to the disclosure of information hereunder; provided that the Authorized Auditors shall not be prevented from disclosure of such information to Buyer to the extent such disclosure to Buyer is required to enable Buyer to carry out its rights and responsibilities under this Agreement and Buyer shall treat such information as Confidential Information to the extent provided under Section 14.21.
Section 11.6 Electric Metering Devices.
(a) Delivered Energy shall be measured using Electric Metering Devices installed, owned and maintained by the Seller and its Affiliates. If the Electric Metering Devices are not installed at a Point of Delivery, meters or meter readings shall be adjusted to reflect losses from the Electric Metering Devices to such Point of Delivery. To the extent consistent with the requirements of the Transmission Provider, all Electric Metering Devices used to provide data for the computation of payments shall be sealed and Seller or its designee shall only break the seal when such Electric Metering Devices are to be inspected and tested or adjusted in accordance with this Section 11.6. Seller or its designee shall specify the number, type, and location of such Electric Metering Devices.
(b) Seller, its Affiliates or its designee, at no expense to Buyer, shall inspect and test all Electric Metering Devices upon installation and at least annually thereafter. Seller or its Affiliates shall provide Buyer annual certified test reports for each Facility Electric Metering Device thereafter throughout the duration of the Delivery Term. Seller shall provide Buyer with reasonable advance notice of, and permit a representative of Buyer to witness and verify, such inspections and tests to the extent consistent with the requirements of the Transmission Provider.
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57 Upon request by Buyer, Seller or its designee shall perform additional inspections or tests of any Electric Metering Device and shall allow a qualified representative of Buyer the right to inspect or witness the testing of any Electric Metering Device. The actual expense of any such requested additional inspection or testing shall be borne by Buyer, unless the results of such additional inspection or testing show an inaccuracy greater than one percent (1%), in which case Seller shall bear such costs. Seller shall provide copies of any inspection or testing reports to Buyer.
Notwithstanding the foregoing, Seller shall have the right and Buyer shall permit Seller to withhold proprietary information unless such information is reasonably needed by Buyer to evaluate and verify such inspections and tests. In addition, Buyer shall hold any information obtained during or in connection with such inspections and tests in confidence. (c) If an Electric Metering Device fails to register, or if the measurement made by an Electric Metering Device is found upon testing to be inaccurate by more than one percent (1.0%), an adjustment shall be made correcting all measurements by the inaccurate or defective Electric Metering Device for both the amount of the inaccuracy and the period of the inaccuracy.
The adjustment period shall be determined by reference to Seller’s check-meters, if any, or as far as can be reasonably ascertained by Seller from the best available data, subject to review and approval by Buyer. If the period of the inaccuracy cannot be ascertained reasonably, any such adjustment shall be for a period equal to one-third of the time elapsed since the preceding test of the Electric Metering Devices. To the extent that the adjustment period covers a period of deliveries for which payment has already been made by Buyer, Buyer shall use the corrected measurements as determined in accordance with this Section 11.6 to recompute the amount due for the period of the inaccuracy and shall subtract the previous payments by Buyer for this period from such recomputed amount. If the difference is a positive number, the difference shall be paid by Buyer to Seller; if the difference is a negative number, that difference shall be paid by Seller to Buyer, or at the discretion of Buyer, may take the form of an offset to payments due to Seller from Buyer. Payment of such difference by the owing Party shall be made not later than thirty (30) days after the owing Party receives notice of the amount due, unless Buyer elects payment via an offset. (d) Seller shall work with Buyer to establish direct access by the Buyer to interval meter data for purposes of Buyer reconciliation of invoices.
Section 11.7 Taxes. Seller shall be responsible for and shall pay before the due dates therefor, any and all federal, state and local Taxes incurred by it as a result of entering into this Agreement and all Taxes imposed or assessed with respect to each Facility, each Site, or any other assets of Seller, the sale of Facility Energy and Green Attributes and all Taxes related to Seller’s income. Buyer shall be responsible for and shall pay before the due dates therefor, any and all federal, state and local Taxes incurred by it as a result of entering into this Agreement and all Taxes imposed or assessed with respect to any assets of Buyer or the purchase of Facility Energy and Green Attributes under this Agreement.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES; COVENANTS OF SELLER
Section 12.1 Representations and Warranties of Buyer. Buyer makes the following representations and warranties to Seller as of the Effective Date:
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58 (a) Buyer is a validly existing California joint powers authority and has the legal power and authority to carry on its business as now being conducted and to enter into this Agreement and each Buyer Ancillary Document and carry out the transactions contemplated hereby and thereby and perform and carry out all covenants and obligations on its part to be performed under and pursuant to this Agreement and all such Buyer Ancillary Documents. (b) The execution, delivery and performance by Buyer of this Agreement and each Buyer Ancillary Document have been duly authorized by all necessary action, and do not and will not require any consent or approval of Buyer’s regulatory or governing bodies, other than that which has been obtained and except as otherwise set forth in this Agreement. (c) This Agreement and each of the Buyer Ancillary Documents constitute the legal, valid, and binding obligation of Buyer enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights generally or by general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law.
Section 12.2 Representations, Warranties and Covenants of Seller. Seller makes the following representations and warranties to Buyer as of the Effective Date:
(a) Each of the Seller Parties is a partnership, corporation or limited liability company duly organized, validly existing, and in good standing under the laws of its respective state of incorporation, organization or formation, is qualified to do business in the State of California and to the extent required by the nature or scope of its operations, the State of Nevada, and has the legal power and authority to own and lease its properties, to carry on its business as now being conducted and (in the case of Seller) to enter into this Agreement and (in the case of each Seller Party) each Seller Ancillary Document to which it may be party and, carry out the transactions contemplated hereby and/or thereby and perform and carry out all covenants and obligations on its part to be performed under and pursuant to this Agreement and/or all Seller Ancillary Documents as applicable.
(b) The execution, delivery and performance by the Seller and the Seller Parties of this Agreement and all Seller Ancillary Documents, as applicable, have been duly authorized by all necessary action, and do not and will not require any consent or approval other than those which have already been obtained.
(c) The execution and delivery of this Agreement and all Seller Ancillary Documents, the consummation of the transactions contemplated hereby and thereby and the fulfillment of and compliance with the provisions of this Agreement and the Seller Ancillary Documents by the respective Seller Party, do not and will not conflict with or constitute a breach of or a default under, any of the terms, conditions or provisions of any Requirement of Law, or any organizational documents, deed of trust, mortgage, loan agreement, other evidence of indebtedness or any other material agreement or instrument to which the applicable Seller Party is a party or by which it or any of its property is bound, or result in a breach of or a default under any of the foregoing or result in or require the creation or imposition of any Lien upon any of the properties or assets of the applicable Seller Party (except for any Permitted Encumbrances or as
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59 otherwise contemplated or permitted hereby), and each Seller Party has obtained or shall timely obtain all Permits required for the performance of its obligations hereunder and thereunder, as the case may be, and Seller or its Affiliates will timely obtain all Permits required for the operation of the Facility in accordance with Prudent Utility Practices, the requirements of this Agreement, the Seller Ancillary Documents and all applicable Requirements of Law. (d) Each of this Agreement and the Seller Ancillary Documents constitutes the legal, valid and binding obligation of the respective Seller Party which is party thereto enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights generally or by general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law.
(e) There is no pending, or to the knowledge of the Seller, threatened action or proceeding affecting any Seller Party before any Governmental Authority, which purports to affect the legality, validity or enforceability of this Agreement or any of the Seller Ancillary Documents. (f) None of the Seller Parties is in violation of any Requirement of Law, which violations, individually or in the aggregate, would reasonably be expected to result in a material adverse effect on the business, assets, operations, condition (financial or otherwise) or prospects of any Seller Party, or the ability of any Seller Party to perform any of its obligations under this Agreement or any Seller Ancillary Document.
(g) The respective Seller Parties have (i) not entered into this Agreement or any Seller Ancillary Document with the actual intent to hinder, delay or defraud any creditor, and (ii) received reasonably equivalent value in exchange for their respective obligations under this Agreement and/or the Seller Ancillary Documents. No petition in bankruptcy has been filed against any of the Seller Parties, and none of the Seller Parties have ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for its benefit as a debtor. (h) With respect to the Delivery Term, Seller has not assigned, transferred, conveyed, encumbered, sold, or otherwise disposed of any Facility Energy, Green Attributes, or Capacity Rights except in connection with Permitted Encumbrances or as otherwise permitted herein.
(i) As of the Effective Date, the organizational structure and ownership of Seller and each Project Company and each Upstream Equity Owner and each Downstream Equity Owner is as set forth on Schedule A.
(j) Subject to Section 8.6(c), Seller, and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement that each Facility shall qualify as a Firm Clean Resource.
(k) Throughout the Delivery Term, Seller shall maintain Firm Transmission rights sufficient to deliver the Project Net Capacity to the Points of Delivery. (l) With regard to each Facility that Seller has elected to designate as Pseudo-Tie Resource, throughout the Delivery Term, Seller shall comply with all CAISO Tariff
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60 requirements applicable to Pseudo-Tie Resources, including Appendix N to the Tariff, with respect to such Facility; and with regard to each Facility that Seller has elected to designate as Dynamically Scheduled Resource, throughout the Delivery Term, Seller shall comply with all CAISO Tariff requirements applicable to a Dynamic Resource-Specific System Resource, including Appendix M to the Tariff, with respect to such Facility.
(m) Seller shall comply with all applicable federal, state and local laws, statutes, ordinances, rules and regulations, and orders and decrees of any courts or administrative bodies or tribunals, including, without limitation, and employment discrimination laws. (n) With respect to each Facility that is located in Nevada, the Parties agree that such Facility is not a “public work” as defined by Nevada law, and Seller shall (i) use reasonable efforts to ensure that all employees hired by Seller, and its contractors and subcontractors, that will perform new construction work or provide services at the Site related to new construction work of each Facility are paid wages not less than the rate of such wages then prevailing in the region in which each Facility is located, as determined by the Nevada Labor Commissioner in the manner provided in Nevada Revised Statutes Section 338.030 (as may be amended from time to time), and are paid wages in compliance with Nevada Revised Statutes Section 338.020 (as may be amended from time to time), despite such Facilities not constituting a public work under Nevada law (“Nevada Prevailing Wage Requirement”), or (ii) ensure that any new construction work for a Facility contracted by Seller in furtherance of this Agreement shall be conducted using a project labor agreement, community workforce agreement, work site agreement, collective bargaining agreement, or similar agreement providing for terms and conditions of employment with applicable labor organizations (“Project Labor Agreement”). To the extent any Facility that is located in Nevada may be eligible for a State of Nevada Renewable Energy Tax Abatement (“RETA”) agreement pursuant to NRS 701A.300-.390, inclusive, and NAC 701A.500- 660, inclusive (the “RETA Regulations”), in lieu of complying with the Nevada Prevailing Wage Requirement, should Seller apply for and receive a RETA agreement, Seller may instead opt to comply with the requirements of the RETA Regulations, including the requirements of having a construction workforce comprised of no less than 50% Nevada residents, paying the construction workforce no less than 175% of the statewide average annual wage (as that phrase is defined in the RETA Regulations), and providing a health insurance plan satisfying the applicable requirements of the RETA Regulations. If Seller does not execute a Project Labor Agreement for the construction of a Nevada Facility, at the time of Commercial Operation of such Facility, Seller must certify that it has either complied with the Nevada Prevailing Wage Requirement or the RETA Regulations, and upon Buyer’s request, provide US DOL Wage & Hour Division Forms WH 347 to demonstrate such compliance.
(o) With respect to each Facility that is located in California, the Parties agree that such Facility is not a “public work” as defined by California law, and Seller shall (i) use reasonable efforts to ensure that all employees hired by Seller, and its contractors and subcontractors, that will perform new construction work or provide services at the Site related to new construction work of each Facility shall be paid rates as set by the Department of Industrial Relations in accordance with California Labor Code section 1770, as may be amended from time to time (“California Prevailing Wage Requirement”), or (ii) ensure that any new construction work for a Facility contracted by Seller in furtherance of this Agreement shall be conducted using a Project Labor Agreement. If Seller does not execute a Project Labor Agreement for the
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61 construction of a California Facility, at the time of Commercial Operation of such Facility, Seller must certify that it has complied with the California Prevailing Wage Requirement, and upon Buyer’s request, provide US DOL Wage & Hour Division Forms WH 347 to demonstrate such compliance.
(p) For purposes of Sections 12.2(n) and (o), new construction work does not include: (i) Seller inspections of incoming equipment, supplies, and materials; (ii) any engineering, design, or procurement work; (iii) any work performed by employees of an Original Equipment Manufacturer (“OEM”) on the OEM’s equipment if required by the standard warranty or guarantee for the equipment between the OEM and Seller in order to maintain the warranty or guarantee of such equipment, or as consistent with industry practice; (iv) start-up and commissioning work performed by Seller, OEM, or their contractors or subcontractors; (v) any work after Mechanical Completion of a Facility or any portion of a Facility, including operations, maintenance, and post-completion service and repair work (unless repair work is part of new construction and not repair of an OEM’s equipment), or any work performed by Seller’s employees, and with respect to the foregoing, “Mechanical Completion” shall mean the relevant portion of the Facility has been certified by the contractor(s) as mechanically complete and turned over to Seller for operation; (vi) any non-construction specialty services, including technical representatives from equipment or design suppliers, project management personnel, and all laboratory work for specialty testing or inspections and all testing or inspection; (vii) any non-construction support services contracted by Seller in connection with this Agreement; (viii) any installation of SCADA components and housing of SCADA systems, control devices, computers or servers; (ix) any off-site manufacturing, purchase, and/or handling of equipment, machinery and items produced in a genuine manufacturing facility and not in yards or lots adjacent to the gathering system; (x) any transportation and delivery of materials and equipment to a Facility, except the transportation of materials from any temporary yards or areas near a Facility or dedicated batch plant constructed solely to supply materials to the Facility construction site; and (xi) any work performed on, near, or leading to a Facility undertaken by state, county, city or local governmental bodies or their contractors, or work performed by public utilities or their contractors. (q) Seller represents and warrants that it has not and will not knowingly utilize equipment or resources for the construction, operation or maintenance of a Facility that rely on work or services exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily (“Forced Labor”). Seller shall comprehensively implement due diligence procedures for its and its Affiliate’s suppliers, subcontractors and other participants in its supply chains, to comply with this prohibition on the use of Forced Labor. Seller shall notify Buyer as soon as it becomes aware of any breach, or potential breach, of its obligations under this Section 12.2(q). Consistent with 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 (r) Neither Seller nor its Affiliates have received notice from or been advised by any existing or potential supplier or service provider that COVID-19 has caused, or is reasonably likely to cause, a delay in the construction of any Facility or the delivery of materials necessary to complete any Facility, in each case that would cause the Minimum Capacity to achieve Commercial Operation later than the Final COD Deadline.
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62 Section 12.3 Covenant of Seller Related to Investments. Seller shall inform all investors in the Seller of the existence of this Agreement and all Seller Ancillary Documents on or before the date of such investment in the Seller.
Section 12.4 Covenants of Seller Related to Tax Equity Financing. Seller shall provide Buyer with at least thirty (30) days’ prior written notice of the consummation of a Tax Equity Financing, which notice shall include (i) introductory and contact information about and for any potential Tax Equity Investor, (ii) a summary of the provisions related to, and the structure surrounding, the power to control the management and policies of Seller, and any entity that is jointly-owned by any Upstream Equity Owner and such Tax Equity Investor arising in connection with the Tax Equity Financing, and (iii) a statement of the circumstances under which such provisions and structure could be modified by such Tax Equity Investor.
Section 12.5 Additional Covenants of Seller. Seller and each Seller Party shall, at its expense, take all steps, or Seller shall cause its Affiliates to take all steps, necessary to maintain all Permits, including as set forth in the Facility Specifications for the applicable Facility, required for the performance of such Seller or Seller Party’s obligations hereunder and under the Seller Ancillary Documents to which such Seller Party is a party, and for the construction of the Facility, and the operation of the Facility, in accordance with the Requirements.