8.3 Books and Records. To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices 274
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under this Agreement, for a period of at least two (2) years or as otherwise required by Law. Either Party, upon fifteen (15) days written Notice to the other Party, shall be granted reasonable access to the accounting books and records within the possession or control of the other Party pertaining to all invoices generated pursuant to this Agreement.
8.4 Payment Adjustments; Billing Errors. Payment adjustments shall be made if Buyer or Seller discovers there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section 8.5, an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO, or there is determined to have been a meter inaccuracy sufficient to require a payment adjustment. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.2, accruing from the date on which the adjusted amount should have been due. Except for adjustments required due to a correction of data by the CAISO, any adjustment described in this Section 8.4 is waived if Notice of the adjustment is not provided within twelve (12) months after the invoice is rendered or subsequently adjusted.
8.5 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement, or adjust any invoice for any arithmetic or computational error, within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment to but excluding the date repaid or deducted by the Party receiving such overpayment. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.5 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a party other than the Party seeking the adjustment and such party corrects its information after the twelve-month period.
If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.
8.6 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other under this Agreement on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement, including any related damages calculated pursuant to Exhibit D, interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.
8.7 Seller’s Performance Security. To secure its obligations under this Agreement, Seller shall deliver Performance Security to Buyer no later than five (5) Business Days after the 275
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Effective Date, in the amount of . If the Performance Security is provided in the form of a Guaranty, it shall be substantially in the form set forth in Exhibit C. Seller shall maintain the Performance Security in full force and effect and Seller shall replenish the Performance Security in the event Buyer collects or draws down any portion of the Performance Security for any reason permitted under this Agreement other than to satisfy a Termination Payment. Seller shall maintain the Performance Security in full force and effect until date on which the following have occurred:
(A) the Delivery Term has expired or terminated early; and (B) all payment obligations of the Seller arising under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Performance Security. If the Performance Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the minimum Credit Rating set forth in the definition of Letter of Credit, (ii) indicates its intent not to renew such Letter of Credit, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have five (5) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Performance Security.
8.8 First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest (“Security Interest”) in, and lien on (and right to net against), and assignment of the Performance Security, any other cash collateral and cash equivalent collateral posted pursuant to Section 8.7 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s Security Interest in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof, provided, however, that no lien or Security Interest shall attach to the Facility or the Seller.
Upon or any time after the occurrence of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Performance Security, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.8):
(a) Exercise any of its rights and remedies with respect to the Performance Security, including any such rights and remedies under Law then in effect; (b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Performance Security; and
(c) Liquidate all Performance Security (as applicable) then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.
Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller’s obligations under this Agreement (Seller remains liable for any amounts owing to Buyer after such application), subject to Buyer’s obligation to return any surplus proceeds remaining after these obligations are satisfied in full. 276
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ARTICLE 9
NOTICES
9.1 Addresses for the Delivery of Notices. Any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the address set forth on the Cover Sheet or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.
9.2 Acceptable Means of Delivering Notice. Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered as follows: (a) if sent by United States mail with proper first class postage prepaid, three (3) Business Days following the date of the postmark on the envelope in which such Notice was deposited in the United States mail; (b) if sent by a regularly scheduled overnight delivery carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees, the next Business Day after the same is delivered by the sending Party to such carrier; (c) if sent by electronic communication (including electronic mail, facsimile, or other electronic means) on the Business Day on which such communication was transmitted if received before 5:00 p.m. (and if received after 5:00 p.m. or if transmitted on a non-Business Day, on the next Business Day); or (d) if delivered in person, upon receipt by the receiving Party. Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch information or requests, may be sent by electronic communication and shall be considered delivered upon successful completion of such transmission.
ARTICLE 10
FORCE MAJEURE
10.1 Definition.
(a) “Force Majeure Event” means any act or event that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance. (b) Without limiting the generality of the foregoing, so long as the following events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance or noncompliance, a Force Majeure Event may include an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; or strikes or other labor difficulties caused or suffered by a Party or any third party except as set forth below. (c) Notwithstanding the foregoing, the term “Force Majeure Event” does not include (i) economic conditions that render a Party’s performance of this Agreement at the 277
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Contract Price unprofitable or otherwise uneconomic (including Buyer’s ability to buy Energy at a lower price than the Contract Price, Buyer’s inability economically to use or resell the Product or any portion thereof purchased hereunder, or Seller’s ability to sell Energy at a higher price, than the Contract Price); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above that disables physical or electronic facilities necessary to transfer funds to the payee Party; (iv) a Curtailment Period, except to the extent such Curtailment Period is caused by a Force Majeure Event; (v) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Facility except to the extent such inability is caused by a Force Majeure Event; (vi) a strike, work stoppage or labor dispute limited only to any one or more of Seller, Seller’s Affiliates, Seller’s contractors, their subcontractors thereof or any other third party employed by Seller to work on the Facility; (vii) any equipment failure except if such equipment failure is caused by a Force Majeure Event; or (viii) a Buyer Curtailment Period.
10.2 No Liability If a Force Majeure Event Occurs. Neither Seller nor Buyer shall be liable to the other Party in the event it is prevented from performing its obligations hereunder in whole or in part due to a Force Majeure Event. Buyer shall not be obligated to pay for any Product that Seller was not able to deliver as a result of a Force Majeure Event. The Party rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take reasonable actions necessary to remove such inability with due speed and diligence. Nothing herein shall be construed as permitting that Party to continue to fail to perform after said cause has been removed. The obligation to use due speed and diligence shall not be interpreted to require resolution of labor disputes by acceding to demands of the opposition when such course is inadvisable in the discretion of the Party having such difficulty. Neither Party shall be considered in breach or default of this Agreement if and to the extent that any failure or delay in the Party’s performance of one or more of its obligations hereunder is caused by a Force Majeure Event. The occurrence and continuation of a Force Majeure Event shall not suspend or excuse the obligation of a Party to make any payments due hereunder.
10.3 Notice. In the event of any delay or nonperformance resulting from a Force Majeure Event, the Party suffering the Force Majeure Event shall (a) as soon as practicable, notify the other Party in writing of the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance, and (b) notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party; provided, however, that a Party’s failure to give timely Notice shall not affect such Party’s ability to assert that a Force Majeure Event has occurred unless the delay in giving Notice materially prejudices the other Party.
10.4 Termination Following Force Majeure Event. If a Force Majeure Event has occurred that has caused either Party to be wholly or partially unable to perform its obligations hereunder, and has continued for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon written Notice to the other Party with respect to the Facility experiencing the Force Majeure Event. Upon any such termination, neither Party shall have any liability to the other, save and except for those obligations specified in Section 2.1(b), and Buyer shall promptly return to Seller any Performance Security then held by Buyer. 278
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ARTICLE 11
DEFAULTS; REMEDIES; TERMINATION
11.1 Events of Default. An “Event of Default” shall mean, (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within five (5) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof; (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default and except for Seller’s failure to comply with a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order, the exclusive remedy for which is provided in Section 4.6) and such failure is not remedied within thirty (30) days after Notice thereof; (iv) such Party becomes Bankrupt;
(v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Section 14.2 or Section 14.3, as applicable; or (vi) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party. (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
(i) if at any time, Seller delivers or attempts to deliver to the Delivery Point for sale under this Agreement Energy that was not generated by the Facility; (ii) if, in any consecutive six (6) month period, the Adjusted Energy Production amount is not at least of the Expected Energy amount for the current Contract Year, and Seller fails to demonstrate to Buyer’s reasonable satisfaction, within ten (10) Business Days after Notice from Buyer, a legitimate reason for the failure to meet the minimum;
(iii) failure by Seller to satisfy the collateral requirements pursuant to Section 8.7, including the failure to replenish the Performance Security amount in accordance with this Agreement in the event Buyer draws against either for any reason other than to satisfy a 279
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Termination Payment, if such failure is not remedied within five (5) Business Days after Notice thereof;
(iv) with respect to any Guaranty provided for the benefit of Buyer, the failure by Seller to provide for the benefit of Buyer either (1) cash, (2) a replacement Guaranty from a different Guarantor meeting the criteria set forth in the definition of Guarantor, or (3) a replacement Letter of Credit from an issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in the amount required hereunder within five (5) Business Days after Seller receives Notice of the occurrence of any of the following events:
(A) if any representation or warranty made by the Guarantor in connection with this Agreement is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof; (B) the failure of the Guarantor to make any payment required or to perform any other material covenant or obligation in any Guaranty; (C) the Guarantor becomes Bankrupt;
(D) the Guarantor shall fail to meet the criteria for an acceptable Guarantor as set forth in the definition of Guarantor;
(E) the failure of the Guaranty to be in full force and effect (other than in accordance with its terms) prior to the indefeasible satisfaction of all obligations of Seller hereunder; or
(F) the Guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of any Guaranty; or (v) with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer either (1) cash, or (2) a substitute Letter of Credit from a different issuer meeting the criteria set forth in the definition of Letter of Credit, or (iii) a Guaranty, in each case, in the amount required hereunder within five (5) Business Days after Seller receives Notice of the occurrence of any of the following events:
(A) the issuer of the outstanding Letter of Credit shall fail to maintain a Credit Rating of at least “A-” by S&P or “A3” by Moody’s; (B) the issuer of such Letter of Credit becomes Bankrupt; (C) the issuer of the outstanding Letter of Credit shall fail to comply with or perform its obligations under such Letter of Credit and such failure shall be continuing after the lapse of any applicable grace period permitted under such Letter of Credit;
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(D) the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit; (E) the issuer of the outstanding Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit;
(F) such Letter of Credit fails or ceases to be in full force and effect at any time; or
(G) Seller shall fail to renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit, or fails to provide a replacement Letter of Credit, and as provided in accordance with this Agreement, and in no event less than thirty (30) days prior to the expiration of the outstanding Letter of Credit.
11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (“Non-Defaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“Early Termination Date”) that terminates this Agreement (the “Terminated Transaction”) and ends the Delivery Term effective as of the Early Termination Date;
(b) to accelerate all amounts owing between the Parties, and to collect as liquidated damages the Termination Payment calculated in accordance with Section 11.3 below (in the case of any other Event of Default by either Party); (c) to withhold any payments due to the Defaulting Party under this Agreement; (d) to suspend performance;
(e) to exercise any other right or remedy available at law or in equity, including specific performance or injunctive relief, except to the extent such remedies are expressly limited under this Agreement; and/or
(f) if the Defaulting Party is Buyer, sell Product, free and clear of any claims by Buyer, to any third party;
provided, that payment by the Defaulting Party of the Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Party’s sole and exclusive remedy for any Terminated Transaction and the Event of Default related thereto.
11.3 Termination Payment. The Termination Payment (“Termination Payment”) for a Terminated Transaction shall be the Settlement Amount plus any or all other amounts due to or from the Non-Defaulting Party netted into a single amount. If the Non-Defaulting Party’s 281
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aggregate Gains exceed its aggregate Losses and Costs, if any, resulting from the termination of this Agreement, the net Settlement Amount shall be zero. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information. The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages; provided, however, that any lost Capacity Attributes and Green Attributes shall be deemed direct damages covered by this Agreement.
Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (a) the actual damages that the Non-Defaulting Party would incur in connection with a Terminated Transaction would be difficult or impossible to predict with certainty, (b) Termination Payment described in this section is a reasonable and appropriate approximation of such damages, and (c) the Termination Payment described in this section is the exclusive remedy of the Non-Defaulting Party in connection with a Terminated Transaction but shall not otherwise act to limit any of the Non-Defaulting Party’s rights or remedies if the Non-Defaulting Party does not elect a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.
11.4 Notice of Payment of Termination Payment. As soon as practicable after a Terminated Transaction, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Termination Payment and whether the Termination Payment is due to or from the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for such calculation. The Termination Payment shall be made to or from the Non-Defaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.
11.5 Disputes With Respect to Termination Payment. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, the Defaulting Party shall, within five (5) Business Days of receipt of the Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the Termination Payment shall be determined in accordance with Article 16.
11.6 Rights And Remedies Are Cumulative. Except where liquidated damages are provided as the exclusive remedy, the rights and remedies of a Party pursuant to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
11.7 Mitigation. Any Non-Defaulting Party shall be obligated to mitigate its Costs, Losses and damages resulting from any Event of Default of the other Party under this Agreement. 282
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ARTICLE 12
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.
12.1 No Consequential Damages. EXCEPT TO THE EXTENT PART OF AN
EXPRESS REMEDY, INDEMNITY PROVISION, OR MEASURE OF DAMAGES HEREIN,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER OR ITS INDEMNIFIED PERSONS
FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT, OR CONSEQUENTIAL
DAMAGES, OR LOSSES OR DAMAGES FOR LOST REVENUE OR LOST PROFITS,
WHETHER FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT, BY STATUTE, IN TORT OR CONTRACT.
12.2 Waiver and Exclusion of Other Damages. EXCEPT AS EXPRESSLY SET
FORTH HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND
MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF LIABILITY CONTAINED IN
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF
CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.
FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE
REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR
MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.
IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING THE TERMINATION PAYMENT UNDER SECTION 11.3, AND
AS PROVIDED IN EXHIBIT D, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES
ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT OTHERWISE OBTAINING AN
ADEQUATE REMEDY IS INCONVENIENT, AND THAT THE LIQUIDATED DAMAGES
CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR
LOSS, AND (UNLESS EXPRESSLY STATED TO THE CONTRARY) AN EXCLUSIVE REMEDY. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN
IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD
TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF
ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.
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ARTICLE 13
REPRESENTATIONS AND WARRANTIES; AUTHORITY
13.1 Seller’s Representations and Warranties. As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a California limited liability company, duly organized, validly existing and in good standing under the laws of the State of California, and is qualified to conduct business in each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller.
(b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Seller’s performance under this Agreement. The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary corporate action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by Laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) The Facility is located in the State of California. (f) All Energy and associated Green Attributes sold and delivered to Buyer hereunder, qualify as PCC1.
(g) Prior to the Effective Date, Seller has delivered a written notice to Buyer identifying the Other Buyers, which notice is true and correct as of the Effective Date. Seller has a reasonable belief that its contracts with the Other Buyer’s, and its implementation thereof, will not place a material adverse burden on Buyer’s rights and benefits under this Agreement.
13.2 Buyer’s Representations and Warranties. As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a joint powers authority and a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of 284
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California and the rules, regulations and orders of the California Public Utilities Commission, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All persons making up the governing body of Buyer are the elected or appointed incumbents in their positions and hold their positions in good standing in accordance with the Joint Powers Agreement and other Law.
(b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, including but not limited to community choice aggregation, the Joint Powers Act, competitive bidding, public notice, open meetings, election, referendum, or prior appropriation requirements, the documents of formation of Buyer or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Buyer is a party or by which any of its property is bound.
(d) This Agreement has been duly executed and delivered by Buyer. This Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as limited by Laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Buyer warrants and covenants that with respect to its contractual obligations under this Agreement, it will not claim, and affirmatively waives, immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (1) suit, (2) jurisdiction of court, (3) relief by way of injunction, order for specific performance or recovery of property, (4) attachment of assets, or (5) execution or enforcement of any judgment. (f) Buyer is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California.
13.3 General Covenants. Each Party covenants that commencing on the Effective Date and continuing throughout the Contract Term:
(a) It shall continue to be duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation and to be qualified to conduct business in each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition;
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(b) It shall maintain (or obtain from time to time as required) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and (c) It shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and any contracts to which it is a party and in material compliance with any Law.
13.4 Prohibition Against Forced Labor. Seller represents and warrants that it has not and will not knowingly utilize equipment or resources for the operation or maintenance of the Facility that rely on work or services exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily (“Forced Labor”). 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. Seller shall certify that it will not utilize such equipment or resources in connection with the construction, operation or maintenance of the Facility.
ARTICLE 14
ASSIGNMENT
14.1 General Prohibition on Assignments. Except as provided below and in Article 15, neither Seller nor Buyer may voluntarily assign its rights nor delegate its duties under this Agreement, or any part of such rights or duties, without the written consent of the other Party.
Neither Seller nor Buyer shall unreasonably withhold, condition or delay any requested consent to an assignment that is allowed by the terms of this Agreement. Any such assignment or delegation made without such written consent or in violation of the conditions to assignment set out below shall be null and void.
14.2 Permitted Assignment; Change of Control of Seller. Seller may, without the prior written consent of Buyer, transfer or assign this Agreement to: (a) an Affiliate of Seller; or (b) subject to Section 15.1, a Lender as collateral. Any direct or indirect Change of Control of Seller (whether voluntary or by operation of Law) shall be deemed an assignment under this Article 14 and will require the prior written consent of Buyer, which consent shall not be unreasonably withheld;
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14.3 Permitted Assignment; Change of Control of Buyer. Buyer may assign its interests in this Agreement to an Affiliate of Buyer or to any entity that has acquired all or substantially all of Buyer’s assets or business, whether by merger, acquisition or otherwise without Seller’s prior written consent, provided, that in each of the foregoing situations, the assignee (a) has a Credit Rating of Baa2 or higher by Moody’s or BBB or higher by S&P, and (b) is a community choice aggregator or publicly-owned electric utility with retail customers located in the state of California; provided, further, that in each such case, no fewer than fifteen (15) Business Days before such assignment Buyer (x) notifies Seller of such assignment and (y) provides to Seller a written agreement signed by the Person to which Buyer wishes to assign its interests stating that such Person agrees to assume all of Buyer’s obligations and liabilities under this Agreement and under any consent to assignment and other documents previously entered into by Seller as described in Section 15.2(b). Any assignment by Buyer, its successors or assigns under this Section 14.3 shall be of no force and effect unless and until such Notice and agreement by the assignee have been received and accepted by Seller.
ARTICLE 15
LENDER ACCOMMODATIONS
15.1 Granting of Lender Interest. Notwithstanding Section 14.2 or Section 14.3, either Party may, without the consent of the other Party, grant an interest (by way of collateral assignment, or as security, beneficially or otherwise) in its rights and/or obligations under this Agreement to any Lender. Each Party’s obligations under this Agreement shall continue in their entirety in full force and effect. Promptly after granting such interest, the granting Party shall notify the other Party in writing of the name, address, and telephone and facsimile numbers of any Lender to which the granting Party’s interest under this Agreement has been assigned. Such Notice shall include the names of the Lenders to whom all written and telephonic communications may be addressed. After giving the other Party such initial Notice, the granting Party shall promptly give the other Party Notice of any change in the information provided in the initial Notice or any revised Notice.
15.2 Rights of Lender. If a Party grants an interest under this Agreement as permitted by Section 15.1, the following provisions shall apply:
(a) Lender shall have the right, but not the obligation, to perform any act required to be performed by the granting Party under this Agreement to prevent or cure a default by the granting Party in accordance with Section 11.2 and such act performed by Lender shall be as effective to prevent or cure a default as if done by the granting Party. (b) The other Party shall cooperate with the granting Party or any Lender, to execute or arrange for the delivery of certificates, consents, opinions, estoppels, direct agreements, amendments and other documents reasonably requested by the granting Party or Lender in order to consummate any financing or refinancing and shall enter into reasonable agreements with such Lender that provide that the non-granting Party recognizes the Lender’s security interest and such other provisions as may be reasonably requested by the granting Party or any such Lender; provided, however, that all costs and expenses (including reasonable attorney’s fees) incurred by the non-granting Party in connection therewith shall be borne by the granting Party, and that the non-granting Party shall have no obligation to modify this Agreement. 287
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(c) Each Party agrees that no Lender shall be obligated to perform any obligation or be deemed to incur any liability or obligation provided in this Agreement on the part of the granting Party or shall have any obligation or liability to the other Party with respect to this Agreement except to the extent any Lender has expressly assumed the obligations of the granting Party hereunder; provided that the non-granting Party shall nevertheless be entitled to exercise all of its rights hereunder in the event that the granting Party or Lender fails to perform the granting Party’s obligations under this Agreement.
15.3 Cure Rights of Lender. The non-granting Party shall provide Notice of the occurrence of any Event of Default described in Section 11.1 or 11.2 hereof to any Lender, and such Party shall accept a cure performed by any Lender and shall negotiate in good faith with any Lender as to the cure period(s) that will be allowed for any Lender to cure any granting Party Event of Default hereunder. The non-granting Party shall accept a cure performed by any Lender so long as the cure is accomplished within the applicable cure period so agreed to between the non-granting Party and any Lender. Notwithstanding any such action by any Lender, the granting Party shall not be released and discharged from and shall remain liable for any and all obligations to the non-granting Party arising or accruing hereunder. The cure rights of Lender may be documented in the certificates, consents, opinions, estoppels, direct agreements, amendments and other documents reasonably requested by the granting Party pursuant to Section 15.2(b).
ARTICLE 16
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.
16.2 Dispute Resolution. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a written Notice from either Party identifying such dispute, the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either thirty (30) days of initiating such discussions, or within forty (40) days after Notice of the dispute, either Party may seek any and all remedies available to it at Law or in equity, subject to the limitations set forth in this Agreement.
16.3 Attorneys’ Fees. If any legal action is brought to enforce this Agreement or because of the alleged dispute, default, misrepresentation, or breach by any Party of any covenant or condition herein contained, the prevailing Party shall be entitled to reasonable attorneys’ fees (including reasonably allocated fees of in-house counsel) in addition to court costs and any and all other costs recoverable in said action.
16.4 Venue. The Parties agree that any litigation arising with respect to this Agreement is to be venued in the Superior Court for the county of San Mateo, California. 288
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ARTICLE 17
INDEMNIFICATION
17.1 Indemnification.
(a) Each Party (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless the other Party and its Affiliates, directors, officers, employees and agents (collectively, the “Indemnified Party”) from and against all third-party claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees) for personal injury or death to Persons and damage to the property of any third party to the extent arising out of, resulting from, or caused by the violation of Law or the negligent or willful misconduct of the Indemnifying Party, its Affiliates, its directors, officers, employees, or agents. (b) Nothing in this Section 17.1 shall enlarge or relieve Seller or Buyer of any liability to the other for any breach of this Agreement. Neither Party shall be indemnified for its damages resulting from its sole negligence, intentional acts or willful misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligation to pay claims consistent with the provisions of a valid insurance policy.
17.2 Claims. Promptly after receipt by a Party of any claim or Notice of the commencement of any action, administrative, or legal proceeding, or investigation as to which the indemnity provided for in this Article 17 may apply, the Indemnified Party shall notify the Indemnifying Party in writing of such fact. The Indemnifying Party shall assume the defense thereof with counsel designated by such Party and satisfactory to the Indemnified Party, provided, however, that if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to, or inconsistent with, those available to the Indemnifying Party, the Indemnified Party shall have the right to select and be represented by separate counsel, at the Indemnifying Party’s expense, unless a liability insurer is willing to pay such costs.
If the Indemnifying Party fails to assume the defense of a claim meriting indemnification, the Indemnified Party may at the expense of the Indemnifying Party contest, settle, or pay such claim, provided that settlement or full payment of any such claim may be made only following consent of the Indemnifying Party or, absent such consent, written opinion of the Indemnified Party’s counsel that such claim is meritorious or warrants settlement. Except as otherwise provided in this Article 17, in the event that a Party is obligated to indemnify and hold the other Party and its successors and assigns harmless under this Article 17, the amount owing to the Indemnified Party will be the amount of the Indemnified Party’s damages net of any insurance proceeds received by the Indemnified Party following a reasonable effort by the Indemnified Party to obtain such insurance proceeds.
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ARTICLE 18
INSURANCE
18.1 Insurance.
(a) General Liability. Seller shall maintain, or cause to be maintained at its sole expense, (i) commercial general liability insurance, including products and completed operations and personal injury insurance, in a minimum amount of ) per occurrence, and an annual aggregate of not less than ), endorsed to provide contractual liability in said amount, specifically covering Seller’s obligations under this Agreement and naming Buyer as an additional insured; and (ii) an umbrella insurance policy in a minimum limit of liability of Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest provisions. (b) Employer’s Liability Insurance. Seller, if it has employees, shall maintain Employers’ Liability insurance at an amount not be less than for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the policy limit will apply to each employee.
(c) Workers Compensation Insurance. Seller, if it has employees, shall also maintain at all times during the Contract Term workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of Law. (d) Business Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with limits of per occurrence. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement.
(e) Subcontractor Insurance. Seller shall require all of its subcontractors to carry: (i) comprehensive general liability insurance; (ii) workers’ compensation insurance and employers’ liability coverage in accordance with applicable requirements of Law; and (iii) business auto insurance for bodily injury and property damage, in each case, with limits determined to be appropriate by Seller. All subcontractors shall name Seller as an additional insured to insurance carried pursuant to clauses (f)(i) and (f)(iii). All subcontractors shall provide a primary endorsement and a waiver of subrogation to Seller for the required coverage pursuant to this Section 18.1(e).
(f) Evidence of Insurance. Within ten (10) days after execution of the Agreement and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such coverage. These certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of any material modification, cancellation or termination of coverage. Such insurance shall be primary coverage without right of contribution from any insurance of Buyer. Any other insurance maintained by Seller is for the exclusive benefit of Seller and shall not in any manner inure to the benefit of Buyer. Seller shall also comply with 290
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all insurance requirements by any renewable energy or other incentive program administrator or any other applicable authority.
(g) Failure to Comply with Insurance Requirements. If Seller fails to comply with any of the provisions of this Article 18, Seller, among other things and without restricting Buyer’s remedies under the Law or otherwise, shall, at its own cost and expense, act as an insurer and provide insurance in accordance with the terms and conditions above. With respect to the required general liability, umbrella liability and commercial automobile liability insurance, Seller shall provide a current, full and complete defense to Buyer, its subsidiaries and Affiliates, and their respective officers, directors, shareholders, agents, employees, assigns, and successors in interest, in response to a third-party claim in the same manner that an insurer would have, had the insurance been maintained in accordance with the terms and conditions set forth above. In addition, alleged violations of the provisions of this Article 18 means that Seller has the initial burden of proof regarding any legal justification for refusing or withholding coverage and Seller shall face the same liability and damages as an insurer for wrongfully refusing or withholding coverage in accordance with the laws of California.
ARTICLE 19
CONFIDENTIAL INFORMATION
19.1 Definition of Confidential Information. The following constitutes “Confidential Information,” whether oral or written, and whether delivered by Seller to Buyer or by Buyer to Seller: (a) proposals and negotiations of the Parties in the negotiation of this Agreement; (b) the terms and conditions of this Agreement; and (c) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” or words of similar import before disclosing it to the other. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement.
19.2 Duty to Maintain Confidentiality. The Party receiving Confidential Information shall treat it as confidential, and shall adopt reasonable information security measures to maintain its confidentiality, employing the higher of (a) the standard of care that the receiving Party uses to preserve its own confidential information, or (b) a standard of care reasonably tailored to prevent unauthorized use or disclosure of such Confidential Information. Confidential Information may be disclosed by the recipient if and to the extent such disclosure is required (a) by Law, (b) pursuant to an order of a court or (c) in order to enforce this Agreement. The Party that originally discloses Confidential Information may use such information for its own purposes, and may publicly disclose such information at its own discretion. Notwithstanding the foregoing, Seller acknowledges that Buyer is required to make portions of this Agreement available to the public in connection with the process of seeking approval from its board of directors for execution of this Agreement. Buyer may, in its discretion, redact certain terms of this Agreement as part of any such public disclosure, and will use reasonable efforts to consult with Seller prior to any such public disclosure. Seller further acknowledges that Buyer is a public agency subject to the 291
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requirements of the California Public Records Act (Cal. Gov. Code section 6250 et seq.). Upon request or demand from any third person not a Party to this Agreement for production, inspection and/or copying of this Agreement or other Confidential Information provided by Seller to Buyer, Buyer shall, to the extent permissible, notify Seller in writing in advance of any disclosure that the request or demand has been made; provided that, upon the advice of its counsel that disclosure is required, Buyer may disclose this Agreement or any other requested Confidential Information, whether or not advance written notice to Seller has been provided. Seller shall be solely responsible for taking whatever steps it deems necessary to protect Confidential Information that is the subject of any Public Records Act request submitted by a third person to Buyer.
19.3 Irreparable Injury; Remedies. Buyer and Seller each agree that disclosing Confidential Information of the other in violation of the terms of this Article 19 may cause irreparable harm, and that the harmed Party may seek any and all remedies available to it at Law or in equity, including injunctive relief and/or notwithstanding Section 12.1, consequential damages.
19.4 Disclosure to Lender. Notwithstanding anything to the contrary in this Article 19, Confidential Information may be disclosed by Seller to any potential Lender or any of its agents, consultants or trustees so long as the Person to whom Confidential Information is disclosed agrees in writing to be bound by the confidentiality provisions of this Article 19 to the same extent as if it were a Party.
19.5 Disclosure to Credit Rating Agency. Notwithstanding anything to the contrary in this Article 19, Confidential Information may be disclosed by either Party to any nationally recognized credit rating agency (e.g., Moody’s Investors Service, Standard & Poor’s, or Fitch Ratings) in connection with the issuance of a credit rating for that Party or its affiliates, provided that any such credit rating agency agrees in writing to maintain the confidentiality of such Confidential Information.
19.6 Public Statements. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such press release.
ARTICLE 20
MISCELLANEOUS
20.1 Entire Agreement; Integration; Exhibits. This Agreement, together with the Cover Sheet and Exhibits attached hereto constitutes the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. The headings used herein are for convenience and reference purposes only. In the event of a conflict between the provisions of this Agreement and those of the Cover Sheet or any Exhibit, the provisions of first the Cover Sheet, and then this Agreement shall prevail, and such Exhibit shall be corrected accordingly. This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof.
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20.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, that, for the avoidance of doubt, this Agreement may not be amended by electronic mail communications.
20.3 No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
20.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement).
20.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
20.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party, a non-Party or the FERC acting sua sponte shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956).
20.7 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
20.8 Facsimile or Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution and facsimile or electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party, and, if delivery is made by facsimile or other electronic format, the executing Party shall promptly deliver, via overnight delivery, a complete original counterpart that it has executed to the other Party, but this Agreement shall be binding on and enforceable against the executing Party whether or not it delivers such original counterpart.
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20.9 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
20.10 No Recourse to Members of Buyer. Buyer is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or the employees, directors, officers, consultants or advisors of Buyer or its constituent members, in connection with this Agreement.
20.11 Change in Electric Market Design. If a change in the CAISO Tariff renders this Agreement or any provisions hereof incapable of being performed or administered, then any Party may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to make this Agreement capable of being performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. If a change to any Law occurs after the Effective Date, including any rule or requirement of WREGIS, that impacts the number or quality of Resource Adequacy Benefits or Green Attributes (including Renewable Energy Credits) available to Buyer from the Facility, then Buyer may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date, it being understood that (i) Buyer is to receive the maximum amount of Resource Adequacy Benefits and Green Attributes available from the Facility (ii) Seller’s ongoing compliance costs associated with the provision of Resource Adequacy Benefits and Green Attributes available from the Facility, among other things, are subject to the Compliance Expenditure Cap. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith. If Buyer and Seller are unable, within sixty (60) days after delivery of such request, to agree upon changes to this Agreement or to resolve issues relating to changes to this Agreement, then any Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Article 16. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, or constitute, or form the basis of, a Force Majeure Event and (ii) this Agreement shall remain in full force and effect, subject to any necessary changes, if any, agreed to by the Parties or determined through dispute resolution.
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EXHIBIT A
DESCRIPTION OF THE FACILITY
Site Name: Buena Vista Wind Farm
Site Address: 7601 Byron Hot Springs Rd, Byron, CA 94514 GPS Coordinates: Latitude 37°48'4.68"N; Longitude 121°38'30.12"W Site Map:
APNs: APN 001-021-020
APN 001-021-013
APN 099B-6150-001-02
APN 099B-6150-005
APN 099B-6130-001
APN 001-021-012
APN 001-021-007
APN 001-021-001
APN 005-160-006
APN 005-170-009
APN 001-021-008
APN 001-021-009
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County: Contra Costa County
Nameplate Capacity: 38 MW AC (net, at the Delivery Point) P-node/Delivery Point: the PNode designated by the CAISO for the Facility at the Buena Vista Substation
Additional Information: N/A
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EXHIBIT B
EMERGENCY CONTACT INFORMATION
BUYER:
Peninsula Clean Energy2075 Woodside Road
Redwood City, CA 94061
Attn: Director of Power Resources
Phone No.: 650-260-0005
Email: [email protected]
SELLER:
Buena Vista Energy, LLC
c/o Leeward Renewable Energy, LLC
6688 N. Central Expressway, Suite 500
Dallas, TX 75206
Attn:
with copy to:
Leeward Renewable Energy Operations
6688 N. Central Expressway, Suite 500
Dallas, TX 75206
Attn:
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EXHIBIT C
FORM OF GUARANTY
This Guaranty (this “Guaranty”) is entered into as of [_____] (the “Effective Date”) by and between [_____], a [______] (“Guarantor”), and Peninsula Clean Energy, a California joint powers authority (together with its successors and permitted assigns, “Buyer”).
Recitals
A. Buyer and [________], a [_________] (“Seller”), entered into that certain Power Purchase and Sale Agreement (as amended, restated or otherwise modified from time to time, the “PPA”) dated as of [____], 2016.
B. Guarantor is entering into this Guaranty as Performance Security to secure Seller’s obligations under the PPA, as required by Section 8.7 of the PPA.
C. It is in the best interest of Guarantor to execute this Guaranty inasmuch as Guarantor will derive substantial direct and indirect benefits from the execution and delivery of the PPA.
D. Initially capitalized terms used but not defined herein have the meaning set forth in the PPA.
Agreement
1. Guaranty. For value received, Guarantor does hereby unconditionally, absolutely and irrevocably guarantee, as primary obligor and not as a surety, to Buyer the full, complete and prompt payment by Seller of any and all amounts and payment obligations now or hereafter owing from Seller to Buyer under the PPA, including, without limitation, compensation for penalties, the Termination Payment, indemnification payments or other damages, as and when required pursuant to the terms of the PPA in an aggregate liability not to exceed [_____________] (the “Guaranteed Amount”). The Parties understand and agree that any payment by Guarantor or Seller of any portion of the Guaranteed Amount shall thereafter reduce Guarantor’s maximum aggregate liability hereunder on a dollar-for-dollar basis. This Guaranty is an irrevocable, absolute, unconditional and continuing guarantee of the full and punctual payment, and not of collection, of the Guaranteed Amount and, except as otherwise expressly addressed herein, is in no way conditioned upon any requirement that Buyer first attempt to collect the payment of the Guaranteed Amount from Seller, any other guarantor of the Guaranteed Amount or any other person or entity or resort to any other means of obtaining payment of the Guaranteed Amount. In the event Seller shall fail to duly, completely or punctually pay any Guaranteed Amount as required pursuant to the PPA, Guarantor shall promptly, after giving effect to all applicable notice and grace, pay such amount as required herein.
2. Demand Notice. For avoidance of doubt, a payment shall be due for purposes of this Guaranty only when and if a payment is due and payable by Seller to Buyer under the terms and conditions of the PPA. If Seller fails to pay any Guaranteed Amount as required pursuant to the PPA for five (5) Business Days following Seller’s receipt of Buyer’s written notice of such failure (the “Demand Notice”), then Buyer may elect to exercise its rights under this Guaranty and may 298
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make a demand upon Guarantor (a “Payment Demand”) for such unpaid Guaranteed Amount. A Payment Demand shall be in writing and shall reasonably specify in what manner and what amount Seller has failed to pay and an explanation of why such payment is due and owing, with a specific statement that Buyer is requesting that Guarantor pay under this Guaranty. Guarantor shall, within five (5) Business Days following its receipt of the Payment Demand, pay the Guaranteed Amount to Buyer.
3. Scope and Duration of Guaranty. This Guaranty applies only to the Guaranteed Amount.
This Guaranty shall continue in full force and effect from the Effective Date until all Guaranteed Amounts have been paid in full (whether directly or indirectly through set-off or netting of amounts owed by Buyer to Seller). Notwithstanding the foregoing, this Guaranty shall automatically terminate and be of no further force or effect if Seller replaces this Guaranty with an alternative form of Performance Security acceptable to Buyer. Further, this Guaranty (a) shall remain in full force and effect without regard to, and shall not be affected or impaired by any invalidity, irregularity or unenforceability in whole or in part of this Guaranty, and (b) subject to the preceding sentence, shall be discharged only by complete performance of the undertakings herein. Without limiting the generality of the foregoing, the obligations of the Guarantor hereunder shall not be released, discharged, or otherwise affected and this Guaranty shall not be invalidated or impaired or otherwise affected for the following reasons:
(i) the extension of time for the payment of any Guaranteed Amount, or (ii) any amendment, modification or other alteration of the PPA, or (iii) any indemnity agreement Seller may have from any party, or (iv) any insurance that may be available to cover any loss, except to the extent insurance proceeds are used to satisfy the Guaranteed Amount, or (v) any voluntary or involuntary liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting, Seller or any of its assets, including but not limited to any rejection or other discharge of Seller’s obligations under the PPA imposed by any court, trustee or custodian or any similar official or imposed by any law, statue or regulation, in each such event in any such proceeding, or (vi) the release, modification, waiver or failure to pursue or seek relief with respect to any other guaranty, pledge or security device whatsoever, or (vii) any payment to Buyer by Seller that Buyer subsequently returns to Seller pursuant to court order in any bankruptcy or other debtor-relief proceeding, or (viii) those defenses based upon (A) the legal incapacity or lack of power or authority of any person, including Seller and any representative of Seller to enter into the PPA or perform its obligations thereunder, (B) lack of due execution, delivery, validity or enforceability, including of the PPA, or (C) Seller’s inability to pay any Guaranteed Amount or perform its obligations under the PPA, or
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(ix) any other event or circumstance that may now or hereafter constitute a defense to payment of the Guaranteed Amount, including, without limitation, statute of frauds and accord and satisfaction.
4. Waivers by Guarantor. Guarantor hereby unconditionally waives as a condition precedent to the performance of its obligations hereunder, with the exception of the requirements in Paragraph 2, (a) notice of acceptance, presentment or protest with respect to the Guaranteed Amounts and this Guaranty, (b) notice of any action taken or omitted to be taken by Buyer in reliance hereon, (c) any requirement that Buyer exhaust any right, power or remedy or proceed against Seller under the PPA, and (d) any event, occurrence or other circumstance which might otherwise constitute a legal or equitable discharge of a surety. Without limiting the generality of the foregoing waiver of surety defenses, it is agreed that the occurrence of any one or more of the following shall not affect the liability of Guarantor hereunder:
(i) at any time or from time to time, without notice to Guarantor, the time for payment of any Guaranteed Amount shall be extended, or such performance or compliance shall be waived;
(ii) the obligation to pay any Guaranteed Amount shall be modified, supplemented or amended in any respect in accordance with the terms of the PPA; (iii) subject to Section 10, any (a) sale, transfer or consolidation of Seller into or with any other entity, (b) sale of substantial assets by, or restructuring of the corporate existence of, Seller or (c) change in ownership of any membership interests of, or other ownership interests in, Seller; or
(iv) the failure by Buyer or any other person to create, preserve, validate, perfect or protect any security interest granted to, or in favor of, Buyer or any person.
Notwithstanding any other provision of this Guaranty to the contrary, Guarantor hereby reserves all rights and remedies accorded by applicable laws to sureties or guarantors based on the defense of the statute of limitations related to the enforceability of this Guaranty in any action or proceeding for the payment of any Guaranteed Amount.
5. Subrogation. Notwithstanding any payments that may be made hereunder by the Guarantor, Guarantor hereby agrees that until the earlier of payment in full of all Guaranteed Amounts or expiration of the Guaranty in accordance with Section 3, it shall not be entitled to, nor shall it seek to, exercise any right or remedy arising by reason of its payment of any Guaranteed Amount under this Guaranty, whether by subrogation or otherwise, against Seller or seek contribution or reimbursement of such payments from Seller.
6. Representations and Warranties. Guarantor hereby represents and warrants that (a) it has all necessary and appropriate corporate powers and authority and the legal right to execute and deliver, and perform its obligations under, this Guaranty, (b) this Guaranty constitutes its legal, valid and binding obligations enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting enforcement of creditors’ rights or general principles of equity, (c) the execution, delivery and performance of this Guaranty does not and will not contravene Guarantor’s organizational 300
Exhibit C - 4
90456064.4 0057445-00006
documents, any applicable law or any contractual provisions binding on or affecting Guarantor, (d) there are no actions, suits or proceedings pending before any court, governmental agency or arbitrator, or, to the knowledge of the Guarantor, threatened, against or affecting Guarantor or any of its properties or revenues which may, in any one case or in the aggregate, adversely affect the ability of Guarantor to enter into or perform its obligations under this Guaranty, and (e) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or governmental authority, and no consent of any other Person (including, any stockholder or creditor of the Guarantor), that has not heretofore been obtained is required in connection with the execution, delivery, performance, validity or enforceability of this Guaranty by Guarantor.
7. Notices. Notices under this Guaranty shall be deemed received if sent to the address specified below: (i) on the day received if served by overnight express delivery, and (ii) four business days after mailing if sent by certified, first class mail, return receipt requested. If transmitted by facsimile, such notice shall be deemed received when the confirmation of transmission thereof is received by the party giving the notice. Any party may change its address or facsimile to which notice is given hereunder by providing notice of the same in accordance with this Paragraph 8.
If delivered to Buyer, to it at Peninsula Clean Energy
Attn: Director of Power Resources
Fax:
If delivered to Guarantor, to it at [____]
Attn: [____]
Fax: [____]
8. Governing Law and Forum Selection. This Guaranty shall be governed by, and interpreted and construed in accordance with, the laws of the United States and the State of California, excluding choice of law rules. The Parties agree that any suit, action or other legal proceeding by or against any party (or its affiliates or designees) with respect to or arising out of this Guaranty shall be brought in the federal courts of the United States or the courts of the State of California sitting in the City and County of San Francisco, California.
9. Miscellaneous. This Guaranty shall be binding upon Guarantor and its successors and assigns and shall inure to the benefit of Buyer and its successors and permitted assigns pursuant to the PPA. No provision of this Guaranty may be amended or waived except by a written instrument executed by Guarantor and Buyer. This Guaranty is not assignable by Guarantor without the prior written consent of Buyer. This Guaranty embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements and understandings of the parties hereto, verbal or written, relating to the subject matter hereof. If any provision of this Guaranty is determined to be illegal or unenforceable (i) such provision shall be deemed restated in accordance with applicable Laws to reflect, as nearly as possible, the original intention of the parties hereto and (ii) such determination shall not affect any other provision of this Guaranty and all other provisions shall remain in full force and effect. This Guaranty 301
Exhibit C - 5
90456064.4 0057445-00006
may be executed in any number of separate counterparts, each of which when so executed shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Guaranty may be executed and delivered by electronic means with the same force and effect as if the same was a fully executed and delivered original manual counterpart.
10. WAIVER OF JURY TRIAL; JUDICIAL REFERENCE.
(a) JURY WAIVER. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. (b) JUDICIAL REFERENCE. IN THE EVENT ANY LEGAL PROCEEDING IS FILED IN A COURT OF THE STATE OF CALIFORNIA (THE “COURT”) BY OR AGAINST ANY PARTY
HERETO IN CONNECTION WITH ANY CONTROVERSY, DISPUTE OR CLAIM DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) (EACH, A “CLAIM”) AND THE WAIVER SET FORTH IN THE
PRECEDING PARAGRAPH IS NOT ENFORCEABLE IN SUCH ACTION OR PROCEEDING, THE PARTIES HERETO AGREE AS FOLLOWS:
(i) ANY CLAIM (INCLUDING BUT NOT LIMITED TO ALL DISCOVERY AND
LAW AND MOTION MATTERS, PRETRIAL MOTIONS, TRIAL MATTERS
AND POST-TRIAL MOTIONS) WILL BE DETERMINED BY A GENERAL
REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1. THE PARTIES INTEND THIS GENERAL REFERENCE AGREEMENT
TO BE SPECIFICALLY ENFORCEABLE IN ACCORDANCE WITH
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638.
(ii) UPON THE WRITTEN REQUEST OF ANY PARTY, THE PARTIES SHALL
SELECT A SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR JUSTICE. IF THE PARTIES DO NOT AGREE UPON A REFEREE WITHIN TEN (10) DAYS OF SUCH WRITTEN REQUEST, THEN, ANY PARTY MAY
REQUEST THE COURT TO APPOINT A REFEREE PURSUANT TO
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 640(B).
302
Exhibit C - 6
90456064.4 0057445-00006
(iii) THE PARTIES RECOGNIZE AND AGREE THAT ALL CLAIMS RESOLVED IN
A GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL BE
DECIDED BY A REFEREE AND NOT BY A JURY.
[Signatures on next page]
303
Exhibit C - 7
90456064.4 0057445-00006
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly executed and delivered by its duly authorized representative on the date first above written.
GUARANTOR:
[_______]
By:______________________________
Printed Name:__________________
Title:____________________________
BUYER:
PENINSULA CLEAN ENERGY
By:______________________________
Printed Name:__________________
Title:____________________________
By:______________________________
Printed Name:__________________
Title:____________________________
304
Exhibit D - 1
90456064.4 0057445-00006
EXHIBIT D
GUARANTEED ENERGY PRODUCTION DAMAGES CALCULATION
In accordance with Section 4.8, if Seller fails to achieve the Guaranteed Energy Production during any Performance Measurement Period, a liquidated damages payment shall be due from Seller to Buyer, calculated as follows:
[(A – B) * (C – D)]
where:
A = the Guaranteed Energy Production amount for the Performance Measurement Period, in MWh
B = the Adjusted Energy Production amount for the Performance Measurement Period, in MWh
C = Replacement price for the Performance Measurement Period, in $/MWh, which is the sum of (a) the simple average of the Integrated Forward Market hourly price for all the hours in the Performance Measurement Period, as published by the CAISO, for the Existing Zone Generation Trading Hub (as defined in the CAISO Tariff) for the Delivery Point, plus (b)
D = the Contract Price for the Performance Measurement Period, in $/MWh No payment shall be due if the calculation of (A - B) or (C - D) yields a negative number; the difference between (C) and (D)
Within sixty (60) days after each Performance Measurement Period, Buyer will send Seller Notice of the amount of damages owing, if any, which shall be payable to Buyer before the later of (a) thirty (30) days of such Notice and (b) ninety (90) days after each Performance Measurement Period.
Additional Definitions:
“Adjusted Energy Production” shall mean the sum of the following: Metered Energy + Deemed Delivered Energy + Lost Output– Excess MWh.
“Lost Output” means the sum of Energy in MWh that would have been generated and delivered, but was not, on account of Force Majeure Event, Buyer Default, or Curtailment Order.
The additional MWh shall be calculated using an equation provided by Seller, as approved by Buyer in its reasonable discretion, to reflect the potential generation of the Facility as a function of Available Capacity and wind speed, and using relevant Facility availability, weather, historical and other pertinent data for the period of time during the period in which the Force Majeure Event, Buyer Default, or Curtailment Order occurred.
305
Exhibit D - 2
90456064.4 0057445-00006
“Replacement Green Attribute Price” means the value of Renewable Energy Credits of the same Portfolio Content Category (e.g., PCC1) as the Product and of the same timeframe for retirement as the Renewable Energy Credits that would have been generated by the Facility during the relevant Performance Measurement Period determined based on a Renewable Energy Credit pricing index that has been mutually agreed upon by Seller and Buyer or, if such index is not available, as determined by the .
306
Exhibit E - 1
90456064.4 0057445-00006
EXHIBIT E
FORM OF LETTER OF CREDIT
[Issuing Bank Letterhead and Address]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [XXXXXXX]
Date:
Bank Ref.:
Amount: US$[XXXXXXX]
Expiry Date:
Beneficiary:
Peninsula Clean Energy
[Address]
Ladies and Gentlemen:
On behalf of [XXXXXXX] (“Applicant”), we, [insert bank name and address] (“Issuer”) hereby issue our Irrevocable Standby Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) in favor of Peninsula Clean Energy, Address__________, for an amount not to exceed the aggregate sum of U.S. $[XXXXXXX] (United States Dollars [XXXXXXX] and 00/100), pursuant to that certain [Agreement] dated as of ____________ (the “Agreement”) between Applicant and Beneficiary.
This Letter of Credit shall become effective immediately and shall have an initial expiry date of __________ __, 201_ subject to the automatic extension provisions herein.
Funds under this Letter of Credit are available to you against your draft(s) drawn on us at sight, mentioning thereon our Letter of Credit No. [XXXXXXX] accompanied by your dated statement purportedly signed by your duly authorized representative, in the form attached hereto as Exhibit A, containing one of the two alternative paragraphs set forth in paragraph 2 therein.
We hereby agree with the Beneficiary that all drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored upon presentation to the Issuer in person, by courier or by fax at [insert bank address]. Payment shall be made by Issuer in U.S. dollars with Issuer’s own immediately available funds.
The document(s) required may also be presented by fax at facsimile no. (xxx) xxx-xxx on or before the expiry date (as may be extended below) on this Letter of Credit in accordance with the terms and conditions of this Letter of Credit. No mail confirmation is necessary and the facsimile transmission will constitute the operative drawing documents without the need of originally signed 307
Exhibit E - 2
90456064.4 0057445-00006
documents.
Partial draws are permitted under this Letter of Credit.
It is a condition of this Letter of Credit that it shall be deemed automatically extended without an amendment for a one year period beginning on the present expiry date hereof and upon each anniversary for such date, unless at least ninety (90) days prior to any such expiry date we have sent to you written notice by overnight courier service that we elect not to permit this Letter of Credit to be so extended, in which case it will expire on its then current expiry date. No presentation made under this Letter of Credit after such expiry date will be honored.
Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements, this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.
This Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (2007 Revision) International Chamber of Commerce Publication No. 600 (the “UCP”), except to the extent that the terms hereof are inconsistent with the provisions of the UCP, including but not limited to 36 of the UCP, in which case the terms of this Letter of Credit shall govern. In the event of an act of God, riot, civil commotion, insurrection, war or any other cause beyond Issuer’s control (as defined in Article 36 of the UCP) that interrupts Issuer’s business and causes the place for presentation of the Letter of Credit to be closed for business on the last day for presentation, the expiry date of the Letter of Credit will be automatically extended without amendment to a date thirty (30) calendar days after the place for presentation reopens for business.
Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available. [Bank Name]
___________________________
[Insert officer name]
[Insert officer title]
308
Exhibit E - 3
90456064.4 0057445-00006
DRAW REQUEST SHOULD BE ON BENEFICIARY’S LETTERHEAD)
Drawing Certificate
[Insert Bank Name and Address]
Ladies and Gentlemen:
The undersigned, a duly authorized representative of Peninsula Clean Energy, Address___________ as beneficiary (the “Beneficiary”) of the Irrevocable Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) issued by [insert bank name] (the “Bank”) by order of [XXXXXXX] (the “Applicant”), hereby certifies to the Bank as follows:
1. Applicant and Beneficiary are party to that certain Agreement dated as of [XXXXXXX] (the “Agreement”).
2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________.
or
Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________, which equals the full available amount under the Letter of Credit, because the Bank has provided notice of its intent to not extend the expiry date of the Letter of Credit and Applicant failed to provide acceptable replacement security to Beneficiary at least thirty (30) days prior to the expiry date of the Letter of Credit.
3. The undersigned is a duly authorized representative of Peninsula Clean Energy and is authorized to execute and deliver this Drawing Certificate on behalf of Beneficiary.
You are hereby directed to make payment of the requested amount to Peninsula Clean Energy by wire transfer in immediately available funds to the following account:
[Specify account information]
Peninsula Clean Energy
_______________________________
Name and Title of Authorized Representative
Date___________________________
309
Exhibit F - 1
90456064.4 0057445-00006
Exhibit F - Ramp Rates
The current Ramp Rates for the Facility are as follows:
Ramp Down:
Ramp Up:
The above Ramp Rates are based upon current settings in the Facility's control equipment. Prior to the Delivery Start Date, the Parties shall confer and determine whether these Ramp Rates may be increased, consistent with Prudent Operating Practice, so as to provide more flexibility to Buyer without imposing incremental unreimbursed capital cost burdens on Seller. Seller shall provide to Buyer reasonable information concerning the Facility in connection with this process. If these Ramp Rates may be increased, consistent with Prudent Operating Practice, so as to provide more flexibility to Buyer without imposing incremental unreimbursed capital cost burdens on Seller, the Parties shall amend this Exhibit F accordingly.
310
Item No. 16
PENINSULA CLEAN ENERGY
JPA Board Correspondence
DATE: Aug. 09, 2022
BOARD MEETING DATE: Aug. 25, 2022
SPECIAL NOTICE/HEARING: None
VOTE REQUIRED: None
TO: Honorable Peninsula Clean Energy Authority Board of Directors FROM: Jan Pepper, Chief Executive Officer, Peninsula Clean Energy Rafael Reyes, Director of Energy Programs
SUBJECT: Approval of Increased Budget Flexibility in Programs (Action)
RECOMMENDATION
Board approval of increased flexibility for use of funds within the approved Community Energy Programs departmental budget.
BACKGROUND
To date, the Peninsula Clean Energy Board has taken budget-related actions related to programs at three levels:
1. Organization and Departmental budget: Each year, the Board approves PCE’s organizational budget which includes a specific Community Energy Programs department allocation that covers expenses for our various programs.
2. “Programmatic” budgets: Periodically, staff have brought forward requests for approvals of multi-year budgets for distinct programs such as “Existing Buildings” or “E-Bikes”. These approvals typically allocate funds for incentives and contracts.
3. Contracts: Specific program-related contracts with expenditures of $100,000 or more within a fiscal year are brought to the Board for consideration as required under the Joint Powers Agreement.
DISCUSSION
Intradepartmental budget challenges have arisen in cases where there have been opportunities to support certain programs experiencing faster uptake than anticipated. A 311
Item No. 16
recent example occurred with our popular e-bikes program that quickly reached budget capacity and resulted in a significant number of customers that we could not serve without an additional funding allocation from within our existing department budget. This required us to return to the Board for budget authorization which delayed our ability to provide additional incentives, meet customer demand and advance our objectives for GHG reductions. It also added a layer of administrative burden and opportunity costs.
To date, the “programmatic” budgets have been set with best available information to accommodate current and future demand. Excess budget capacity occurs when some programs experience lower uptake than planned, and sometimes the opposite happens with higher-than-expected demand as in the e-bike example. These conditions arise fairly regularly as projecting actual customer uptake is highly inexact and some programs move more slowly while others move more quickly than anticipated.
In order to be more responsive to programmatic developments and customer demand, staff requests that the Board increase program budget flexibility by allowing staff to shift funds between programs within the overall Board-approved Community Energy Programs department budget. If approved, Board authorization would no longer be requested at the programmatic level. Rather, staff will continue to manage discrete program budgets and will inform the board about any re-allocations of funding between programs.
And of course, staff will continue to seek Board approval for the overall annual Department budget as well as specific contracts that exceed the $100,000 approval threshold.
Finally, this request is proposed to apply going forward to programs that have been approved by the Board and that may benefit from budget modifications within our overall Department budget. Affected programs are:
• EV Ready – EV charging incentive program
• Existing Buildings – including Appliance Incentives and Home Upgrade • Used EV – Electric vehicle incentives
• E-Bikes – Electric bike incentives
FISCAL IMPACT:
None
312
1 RESOLUTION NO. _____________
PENINSULA CLEAN ENERGY AUTHORITY, COUNTY OF SAN MATEO, STATE OF
CALIFORNIA
* * * * * *
RESOLUTION DELEGATING AUTHORITY TO THE CHIEF EXECUTIVE
OFFICER TO MAKE INTRADEPARTMENTAL COMMUNITY ENERGY
PROGRAM BUDGET ADJUSTMENTS WITHIN BOARD APPROVED
COMMUNITY ENERGY DEPARTMENT BUDGETS
______________________________________________________________ RESOLVED, by the Peninsula Clean Energy Authority of the County of San Mateo, State of California, that
WHEREAS, Peninsula Clean Energy was formed on February 29, 2016; and WHEREAS, Peninsula Clean Energy has as a strategic objective supporting the decarbonization of its service territory; and
WHEREAS, Peninsula Clean Energy administers a range of decarbonization program; and
WHEREAS, the Peninsula Clean Energy Board annually approves an organizational budget which includes specific allocation to the Community Energy Programs department; and
WHEREAS, the Peninsula Clean Energy Board has approved multi-year budgets for specific programs; and
313
2 WHEREAS, greater flexibility within the departmental Community Energy Programs budget to shift funds between programs would allow Peninsula Clean Energy to respond more quickly to programs with rapid uptake to increase its impact.
NOW, THEREFORE, IT IS HEREBY DETERMINED AND ORDERED that the Board delegates authority to the Chief Executive Officer to adjust budget allocations between programs as needed to maximize Peninsula Clean Energy’s objectives as long as total expenditures are within the Community Energy Programs departmental budget as approved by the Board.
* * * * * *
314
Item No. 18
PENINSULA CLEAN ENERGY AUTHORITY
JPA Board Correspondence
DATE: August 12, 2022
BOARD MEETING DATE: August 25, 2022
SPECIAL NOTICE/HEARING: None
VOTE REQUIRED: None
TO: Honorable Peninsula Clean Energy Authority Board of Directors FROM: KJ Janowski, Director of Marketing and Community Relations & Leslie Brown, Director of Account Services
SUBJECT: Update on Marketing, Outreach Activities, and Account Services
BACKGROUND
The Marketing, Community Relations, and Account Services Teams are responsible for enhancing Peninsula Clean Energy’s brand reputation, educating and engaging customers, driving participation in programs, and ensuring customer satisfaction and retention. Tactics include community outreach, content creation and storytelling through owned (e.g. online, social media), earned (e.g. public relations), and paid media (advertising), school engagement programs, and customer care.
DISCUSSION
The following is an update of activities that are currently underway. See “Strategic Plan” section below for how these activities support Peninsula Clean Energy’s strategic plan objectives.
Social Media Policy
We are proposing a resolution for a Peninsula Clean Energy Social Media policy. It is a good practice to put in place a clear policy, post this policy on our website, and link to it in the profile or description of Peninsula Clean Energy in each of our social media channels. Once approved by the Board, we will take these steps to make this policy known to the public.
Heat Pump Water Heater (HPWH) Incentive Program
Marketing is supporting the program goal to install 200 heat pump water heaters in the first two years. Marketing efforts have been measured based upon visits to our HPWH incentive pages. In the last 30 days, 489 users visited the page. 315
Item No. 18
Electrification Messaging and Campaign Support of Decarbonization Marketing is developing new messaging centered on encouraging electrification.
Message testing research has been completed. Topline results of this research were presented in the July 28 board meeting. Messaging is being developed for a campaign that is planned to start this summer. The campaign will support our organizational priority to contribute to our community reaching a goal of 100% greenhouse gas-free for buildings and transportation by 2035.
Electric Vehicle (EV) Campaign
A search advertising campaign addressing barriers and benefits of electric vehicles has been underway since November 2021. Ad performance has continued to improve during this time. In July, the campaign achieved about 53,000 impressions and brought about 2,480 visits to our EV web pages. Results in August so far are showing an average cost-per-click of $2.13.
Los Banos Update
Our local Los Banos representative Sandra Benetti has been very active providing additional information and answering questions as Los Banos customers began receiving service from Peninsula Clean Energy. This includes tabling twice monthly on bill pay dates at Los Banos City Hall, as well as at community events We are reaching out to additional community groups to arrange presentations. Sandra is also active in local social media forums addressing questions and providing correct information.
Peninsula Clean Energy ran an ad campaign in each of the two new newspapers now serving Los Banos, Los Banos Enterprise and The Westside Express. We will be working with both news outlets on future paid and earned media opportunities. We are also currently running 30 second audio ads in Spanish on a local commercial Spanish-language radio station, Radio Lobo.
News & Media
On August 2, we announced State Legislature Resolution Honors Peninsula Clean Energy Anniversary. Full coverage of Peninsula Clean Energy in the news can be found on our News & Media webpage.
Outreach Grants
Peninsula Clean Energy awarded 12 one-year grants to local CBOs in January 2022 to collaborate with us on community outreach. Grantees recently submitted their six-month progress reports. All the grants are on target to achieve their workplans and were paid the second installment of their grants. Highlights of grantee efforts include organizing in-person and online workshops to educate our customers on EVs, building electrification, and energy discounts for income-qualifying residents, as well as promoting our programs through newsletters, social media, distributing fliers, tabling at community events, and radio ads. Grantees communicate our messages in English, Spanish, Mandarin, Cantonese, Tongan, Samoan, Arabic, and other languages. 316
Item No. 18
ENROLLMENT UPDATE
ECO100 Statistics (since June report)
Total ECO100 accounts at end of July: 6,307
ECO100 accounts added in July: 34
ECO100 accounts dropped in July: 117
Total ECO100 accounts at the end of June: 6,390
Enrollment Statistics
Opt-outs during the month of July were 163, which is 18 more than the previous month of June (145). This includes 111 opt outs in our new service territory of Los Banos during the month of July and 52 from San Mateo County during this month. In August, there have been an additional 54 opt outs from Los Banos and 13 opt outs from San Mateo County as of August 11th, 2022. Total participation rate across all of San Mateo County as of August 11th was 96.92%.
In addition to the County of San Mateo, there are a total of 15 ECO100 cities. The ECO100 towns and cities as of August 11th, 2022, include: Atherton, Belmont, Brisbane, Burlingame, Colma, Foster City, Half Moon Bay, Hillsborough, Menlo Park, Millbrae, Portola Valley, Redwood City, San Carlos, San Mateo, and Woodside.
The opt-up rates below include municipal accounts, which may noticeably increase the rate in smaller jurisdictions.
317
Item No. 18
Table reflects data as of August 11th, 2022
In the above table, the participation rate for the City of Los Banos is at 88%. This number is artificially low due to us conducting a rolling enrollment for our NEM customers in Los Banos. Approximately 1176 Los Banos NEM customers have yet to be enrolled in Peninsula Clean Energy service. They will be enrolled monthly on their true-up month with PG&E from August through December. These accounts are included in the “Eligible Count column but are not currently active Peninsula Clean Energy customers, and are therefore not included in the Active Count column. The opt-out rate from Los Banos customers who received enrollment notices is currently at 3.9%.
Los Banos Enrollment Notices
The first set of Los Banos enrollment notices was mailed to customers February 14th, 2022, and the second set of enrollment notices was mailed March 8th, 2022. Four sets of enrollment notices are required to be mailed to our future customers in the City of Los Banos; two must be sent pre-enrollment (60 days before and 30 days before), and the other two must be sent post-enrollment (30 days after and 60 days after). Peninsula Clean Energy staff created separate pre-enrollment notices for standard customers, NEM customers, and DAC-GT customers in the City of Los Banos. Our standard welcome postcard will be used as the two required post-enrollment notices.
STRATEGIC PLAN
This section describes how the above Marketing and Community Care activities and enrollment statistics relate to the overall goal and objectives laid out in the strategic plan.
The table indicates which objectives and particular Key Tactics are supported by each of the Items/Projects discussed in this memo. The strategic goal for Marketing and Customer Care is: Develop a strong brand reputation that drives participation in Peninsula Clean Energy’s programs and ensures customer satisfaction and retention.
Item/Project
Objective A:
Elevate Peninsula
Clean Energy’s
brand reputation as
a trusted leader in
the community and
the industry
Objective B:
Educate and
engage
stakeholders in
order to gather
input, inspire action
and drive program
participation
Objective C:
Ensure high
customer
satisfaction and
retention
Social Media Policy KT3 Tell the story
of Peninsula Clean
Energy through
diverse channels
HPWH Incentive KT6: Promote
programs and
services, including
community energy
318
Item No. 18
programs and
premium energy
services
Electrification
Messaging Project
KT5: Provide
inspirational,
informative content
that spurs action to
reduce emissions.
EV Campaign KT6 (see above)
Building
Electrification
Awareness Program
KT6 (see above)
Los Banos UpdateE-bikes for EveryoneKT4: Engage
community through
participation in
local events
KT6 (see above)
CAC
RecruitmentLos
Banos Update
KT4: Engage
community through
participation in
local events
KT4: Support the
Citizens Advisory
Committee
News and Media
AnnouncementsCAC
Recruitment
KT1: Position
leadership as
experts on CCAs
and the industry
KT2: Cultivate
relationships with
industry media and
influencers
KT3 (see above)
ECO100 and
Enrollment
StatisticsNews and
Media
Announcements
KT1: Position
leadership as
experts on CCAs
and the industry
KT2: Cultivate
relationships with
industry media and
influencers
KT3 (see above)
Reports on main
objective C
ECO100 and
Enrollment Statistics
Reports on main
objective C
* “KT” refers to Key Tactic
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Item No. 19
PENINSULA CLEAN ENERGY AUTHORITY
JPA Board Correspondence
DATE: August 15, 2022
BOARD MEETING DATE: August 25, 2022
SPECIAL NOTICE/HEARING: None
VOTE REQUIRED: None
TO: Honorable Peninsula Clean Energy Authority (PCE) Board of Directors FROM: Jeremy Waen, Director of Regulatory Policy
Doug Karpa, Senior Regulatory Analyst
Matthew Rutherford, Senior Regulatory Analyst
SUBJECT: Update Regarding Regulatory Policy Activities
SUMMARY
Over the last month the Regulatory Policy team continues to be busy. Jeremy has focused his time across supporting organizational needs and hiring for his department’s new Regulatory Compliance Analyst position. Doug has been particularly heavily focused on work to reform the California Public Utilities Commission’s (CPUC) Resource Adequacy construct. Matthew has continued his work in supporting PCE’s programmatic efforts through Transportation Electrification, Building Decarbonization, Resiliency, Supplier Diversity, and DAC-Green Tariff matters.
DEEPER DIVE
Welcome to Zsuzsanna Klara, PCE’s new Regulatory Compliance Analyst! Over the last month or so Jeremy has been reviewing applications for our Regulatory Compliance Analyst opening. This is a new position within the team that will help to consolidate the internal oversight and management of PCE’s numerous regulatory compliance matters. After numerous interviews with a supporting panel of PCE staff, we selected a finalist and extended an offer to Zsuzsanna Klara. She has graciously accepted the offer and will be starting the position on September 12, 2022. Zsuzsanna comes to us by way of Meta (formerly known as Facebook), and prior to that position she served as legal counsel for the Hungarian Energy and Public Utilities Regulatory Authority (the Hungarian analog to the CPUC). She also recently completed her master’s in law in global business law at University of Washington.
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DAC-GT/CSGT Programs
On May 31, PG&E, SDG&E, and SCE each filed Applications for Program Review (AFRs) to propose revisions to their DAC-GT and CSGT programs (“Programs”) as required by the Commission. Generally, the issues highlighted in the IOUs’ AFRs are aligned with the concerns of the CCAs. In broad terms, the AFRs identify ways the Programs’ designs could be modified to ensure that they more successfully lead to greater development of new solar resources in state-identified Disadvantaged Communities (DACs) as well as better deliver that solar energy and bill discounts to low-income customers that live within DACs.
The CCAs that offer their own Programs filed a joint response to the AFRs on July 6. The CCAs generally agreed with many of the IOU suggestions to modify the program, such as allowing other technologies such as battery storage to be eligible. However, the CCAs disagreed with a few suggestions that unprocured program capacity should remain with the IOUs and instead argued that it should be transferred to the CCAs to serve their own Programs. The CCAs also disagreed with certain suggestions that would likely make the programs more administratively costly to deliver.
The IOUs all filed replies to stakeholder responses on July 18, 2022. They largely agreed with the CCAs that the issue areas raised should be included in the final scope of the proceeding, to be determined by the CPUC Administrative Law Judge (ALJ). The parties are now waiting for the ALJ to issue a notice for a Prehearing Conference where parties can make brief statements on the issues that should be addressed in the proceeding.
That will be filed by a final scoping memo.
(Public Policy Objective A, Key Tactic 1, Key Tactic 2, and Key Tactic 3) Integrated Resource Planning & Resource Adequacy
The resource adequacy proceeding is moving to a phase of development of the details of the 24-hour resource adequacy construct, including resource counting rules, compliance templates and CAISO processes. To date, the Working Group has taken up resource counting, compliance methodologies (such as master databases of generators and load forecasting data templates) and counting of hybrid resources. A final proposal should be developed by Q4 2022. Also, the CPUC approved new regional wind ELCCs to apply in 2023. Finally, the Central Procurement Entity, operated by PG&E, appears to be continuing to struggle to meet its obligations with uncertain consequences for CCA procurement and ratepayer costs. Dr. Karpa remains engaged in seeking favorable resolutions of these questions.
The Integrated Resources Planning process continues to be focused on filings and new modeling for the 2022 cycle, including with new templates and requirements being released this month ahead of our filing this fall.
In a related effort, Doug and Matthew developed a comment letter jointly with several other CCAs to the California Air Resources Board (CARB) urging stricter carbon targets 321
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for the energy sector and criticizing the proposed heavy reliance on carbon sequestration, among other issues. The carbon targets of the Draft Scoping Plan are used to set the targets in the Integrated Resources Planning process, so high targets could undermine efforts to decarbonize the electricity sector. The joint letter also encouraged CARB to consider setting more aggressive targets for decarbonizing California’s transportation and building sectors while also ensuring that communities which have been historically underserved or face higher pollution and energy cost burdens are able to participate in these technology transitions.
(Public Policy Objective A, Key Tactic 1, and Key Tactic 2; Public Policy Objective C, Key Tactic 3)
Stakeholder Outreach
Dr. Karpa hosted the regular monthly call with staff from CCAs and environmental and environmental justice stakeholders on July 20. Discussion focused on state legislative topics as well as the ongoing efforts of Peninsula Clean Energy to promote building and transportation electrification. This group reconvened on August 5 to discuss approaches to IRP implementation and additional electrification policy issues. (Public Policy Objective A, Key Tactic 2)
FISCAL IMPACT
Not applicable.
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PENINSULA CLEAN ENERGY AUTHORITY
Board Correspondence
DATE: August 18, 2022
BOARD MEETING DATE: August 25, 2022
SPECIAL NOTICE/HEARING: None
VOTE REQUIRED: None
TO: Honorable Peninsula Clean Energy Authority Board of Directors FROM: Marc Hershman, Director of Government Affairs
SUBJECT: Update on Peninsula Clean Energy’s Legislative Activities SACRAMENTO and WASHINGTON SUMMARY:
The weeks between late July and early August are typically the lull before the final legislative push of the year. The Assembly and Senate recessed on July 1 and did not reconvene until August 1. The 2021-22 Legislative Session will adjourn for the year on August 31.
Before the Legislature recessed on July 1, they sent the governor a $300 billion fiscal 2022-23 budget package. The Budget Act was signed by the governor on June 30.
Of particular interest to Peninsula Clean Energy are the items in the budget that will accelerate the build out of clean energy and storage projects by providing a new streamlined permitting option at the California Energy Commission for qualifying projects.
The governor submitted several controversial, last-minute additions to the budget including a Strategic Electricity Reliability Reserve, which includes existing generation capacity that was scheduled to retire, new generation, and new storage projects, as well as clean backup generation projects, diesel and natural gas backup generation projects with emission controls and all required permits, and customer side load reduction capacity.
Notably, there is $970 million in the budget for the Public Utilities Commission to provide residential solar and storage system incentives, with $670 million available for solar and storage systems for low-income households. And there is $250 million to leverage additional state financing tools dedicated to supporting the development of strategic clean energy projects, with the initial priority to support the development of new transmission to deliver to the CAISO system, clean, firm electricity from new resources located in the Salton Sea region.
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In addition, there's $957.6 million for ratepayer assistance to pay past due IOU/CCA residential customer’s electricity bills. Peninsula Clean Energy had sent a letter to the governor and legislative leaders in support of this funding.
However, as we saw in 2021, supplemental budget bills and additional measures providing policy guidance to the budget act – known as trailer bills - will continue to be negotiated by the Legislature and the Administration well into the final days of the 2022 session.
With the legislature back in session, Peninsula Clean Energy has sent correspondences to our state legislators in support of funding for building decarbonization programs. Copies of those letters are included with this report.
One letter was in support of the governor’s proposal to allocate $922.4 million to the California Energy Commission for an Equitable Building Decarbonization program and sought language in any legislative proposal that would define the implementers of those funds to specifically include CCAs.
Another letter was sent in support of funding for the Technology and Equipment for Clean Heating (TECH) program. Funding for TECH focuses on transitioning low-income and households in disadvantaged communities to zero-emission appliances. This program has been very successful, with 900 contractors enrolled and all the currently available funding reserved.
In early August, notably with only weeks remaining in the 2022 session, the governor set forth what he called his 2022 climate legislative proposals. These proposals include legislation to codify the goal of achieving statewide carbon neutrality no later than 2045, increase ambition of 2030 greenhouse gas emissions reduction from 40% to 55% below 1990 levels, establish a pathway to 100% clean electricity retail sales by 2045, establish a setback distance of 3,200 feet between any new oil wells from schools and homes, ensure comprehensive pollution controls for existing oil wells, and establish a clear regulatory framework for carbon removal and carbon capture, utilization, and sequestration.
LEGISLATIVE ADVOCACY AND OUTREACH:
The summer of 2022 may well turn out to be a most consequential time in our nation and the world’s efforts to stem climate change. On August 7 the U.S. Senate, by the narrowest of margins, passed the Inflation Reduction Act (IRA). The legislation cleared the Congress on August 12 when the House of Representatives voted its support for the bill. It was signed into law by President Biden on August 16.
Peninsula Clean Energy joined several other CCAs in a letter to our federal legislators in support of the Inflation Reduction Act. A copy of the letter is included with this report.
The IRA has $369 billion in clean energy and climate-related provisions. Its focus is on incentives that make the use of cleaner energy less expensive than fossil fuels.
Consumers could see benefits from subsidies to help with the purchase of electric 324
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vehicles, solar panels, heat pumps and other household items. Businesses could also benefit from purchase credits that will extend for at least 10 years.
Of direct benefit to Peninsula Clean Energy, many of the business credits will, for the first time, be applied to publicly owned utilities and nonprofits. This could improve Peninsula Clean Energy’s ability to advance solar projects by providing financial incentives and making transactions less complex.
The IRA also includes language and a significant amount of funding to support the extension of the life of nuclear plants that are scheduled to go offline. This would include the Diablo Canyon nuclear power plant. As noted above, Governor Newsom has indicated his interest in authorizing the extension of existing generation capacity scheduled to retire and there has been discussion by the administration of providing PG&E with $1.4 billion in the form of a forgivable loan to extend the life of Diablo Canyon. Such a plan would require legislative language and funding through a legislative mechanism, all of which could happen before the end of the current legislative session.
Of significance in Sacramento, on the August 11 “suspense calendar” hearings were held in the respective Appropriation Committee of each house of the Legislature. This is the last stop for bills with a fiscal component before they can move on to the floor of the second house and, if successful there, to the governor’s desk. About 25% of 2022 bills before the Appropriations Committees failed to pass off the suspense calendar and those legislative efforts will not move forward this year.
A bill of great interest to Peninsula Clean Energy is SB 1158 (Becker). Similar in some respects to Senator Becker’s SB 67 from 2021, SB 1158 would mandate the hourly reporting of GHG intensity of load serving entities like Peninsula Clean Energy. It would also require the LSE to report the GHG profile of its Resource Adequacy portfolios.
Peninsula Clean Energy supports SB 1158 and the bill’s goal of improving transparency of LSE progress in meeting its GHG reduction goals, noting that it reflects our organizations 24/7 goals. We have been working closely with Senator Becker to clarify and address some of the issues raised in the legislation.
Peninsula Clean Energy weighed in with support for SB 1158 when it was heard and passed in the Senate Committee on Energy, Utilities and Communications. The bill was passed by the Senate Committee on Appropriations and by the full Senate. Peninsula Clean Energy provided lead testimony at hearings before the Assembly Committee on Utilities and Energy and again when the bill was heard by the Assembly Committee on Natural Resources. SB 1158 easily passed both committees and on August 11 was passed off the Assembly Committee on Appropriations suspense calendar. It will now go to the floor of the Assembly for consideration.
AB 1944 (Lee, Christina Garcia) would amend the Brown Act to specify that if a member of a legislative body elects to teleconference from a location that is not public, the address of that location need not be identified in the meeting notice and agenda, or be accessible to the public, when the legislative body has elected to allow members to participate via teleconferencing. Peninsula Clean Energy has submitted a letter of support for AB 1944. 325
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This bill passed off the floor of the Assembly, however it has failed to receive consideration in the state Senate.
SB 1020 (Laird) is being championed by the leadership of the state Senate as the Clean Energy, Jobs, and Affordability Act of 2022. Among the many provisions of the bill that address climate change issues by setting clean energy goals for the state, SB 1020 would establish a new state agency trust fund regarding clean energy and provide funding, mostly from federal funds, for home infrastructure upgrades. However, the provisions to establish the trust fund and decarbonization authority were stripped from the bill before it was passed out of the Assembly Committee on Appropriations. 326
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PENINSULA CLEAN ENERGY
JPA Board Correspondence
DATE: August 25, 2022
BOARD MEETING DATE: August 19, 2022
SPECIAL NOTICE/HEARING: None
VOTE REQUIRED: None
TO: Honorable Peninsula Clean Energy Authority Board of Directors FROM: Jan Pepper, Chief Executive Officer, Peninsula Clean Energy Rafael Reyes, Director of Energy Programs
SUBJECT: Community Programs Report
SUMMARY
The following programs are in progress, and detailed information is provided below:
1. Building and EV Reach Codes
2. Buildings Programs
2.1. Appliance Rebates and On-Bill Financing
2.2. Low-Income Home Upgrades & Electrification
2.3. Building Pilots
2.4. Refrigerator Recycling
3. Distributed Energy Programs
3.1. Local Government Solar
3.2. Power On Peninsula – Homeowner
3.3. FLEXmarket
4. Transportation Programs
4.1. “EV Ready” Charging Incentive
4.2. Used EV Rebate
4.3. EV Ride & Drives/EV Rental Rebate
4.4. E-Bikes for Everyone Rebate
4.5. Municipal Fleets
4.6. Transportation Pilots
5. 2035 Decarbonization Feasibility and Plan
DETAIL
1. Building and EV Reach Codes
Background: In 2018 the Board approved a building “reach code” initiative to support local governments in adopting enhancements to the building code for low-carbon and EV ready buildings. The initiative is a joint project with Silicon Valley Clean Energy (SVCE) and East Bay Community Energy (EBCE). The program includes small grants to 327
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municipalities, technical assistance, and tools, including model codes developed with significant community input. The tools and model code language are available on the project website (www.BayAreaReachCodes.org).
In addition, in January 2020 the Board approved an extension of the reach code technical assistance plus additional elements – Education and training for developers and contractors, and consumer education program on the benefits of all-electric buildings.
This technical assistance is publicly available at www.AllElectricDesign.org. In December 2020, the Board approved to extend the contract with TRC Engineers include technical assistance for developing policy for existing buildings. In February 2022 the Board extended the initiative for another two years.
SVCE and Joint Venture Silicon Valley are planning a webinar in September specifically for local elected officials on new and existing building Reach Codes. San Mateo electeds will be invited to attend.
Model Code Summary, available at www.bayareareachcodes.com: • New construction building electrification codes require all-electric and include a menu of exceptions for cities to choose from • New construction EV codes are the same as last cycle for most building types, requiring more access than the state code. Multi-family buildings are required to provide at least one level 2 charging access point for every dwelling unit. 15% must be Level 2 charging stations. 85% can be low-power Level 2 EV ready. • Existing building model codes provide a full menu of options for cities to choose from, including: end of flow requirements, time-of-replacement mandates, time of sale disclosure requirements, and a requirement to upgrade existing EV-capable circuits to EV-ready by a time-certain deadline.
Status:
• New Construction Codes: Draft new and existing model codes are available. • Existing Building Decarbonization: Existing building model codes are posted online. During a poll at a City Staff workshop, 64% of respondents stated that they were interested in exploring an existing building reach code. • City Progress: all cities considering re-adoption should consider starting the process asap to meet the January 1st deadline. The following cities are currently advancing code updates:
o New construction: County of San Mateo, City of San Mateo, Brisbane, Burlingame, Half Moon Bay, Redwood City, Pacifica, Belmont, Millbrae, Menlo Park, San Carlos, Portola Valley
o Existing buildings: City of San Mateo, City of Brisbane, San Carlos, Menlo Park (slated for next year.)
Strategic Plan:
Goal 3 – Community Energy Programs
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Objective A: Decarbonization Programs: Develop market momentum for electric transportation, and initiate the transition to clean energy buildings • Key Tactic 3: Ensure nearly all new construction is all-electric and EV ready • Key Tactic 4: Establish preference for all-electric building design and appliance replacement among consumers and building stakeholders
2. Buildings Programs
2.1. Appliance Rebates and Financing
Background: In May 2020, the Board approved a 4-year, $6.1 million for electrifying existing buildings. This included $2.8 million for implementing an appliance rebate program. Peninsula Clean Energy successfully launched the heat pump water heater rebates on January 01, 2021 for San Mateo County residents. Peninsula Clean Energy rebates are offered in partnership with BayREN’s Home+ program. BayREN offers a rebate of $1,000 and Peninsula Clean Energy offers an additional rebate of $1,000 for methane gas to heat pump water heater (HPWH) or $500 for electric resistance to HPWH.
Peninsula Clean Energy also offers a $1,000 bonus rebate for CARE/FERA customers and rebate up to $1,500 for electrical panel upgrades that might be needed to accommodate the HPWH. Additionally, in August 2021, the Board approved an On-Bill Financing program with $1.0 million in loan capital (treated as a balance sheet asset and not part of the annual budget). The program will offer qualified residential customers a 0% interest loan up to $10,000 to fund the cost of eligible electrification and complementary electrical and energy efficiency upgrades. The program is expected to be launched in Q4 2022.
Status: The Appliance Rebate Program, initially focused on HPWH rebateswas launched on January 01, 2021 and as of August 9, 2022 has issued 268 HPWH rebates, which amounts to $383,000 or 14% of the total program budget. Overall, the Peninsula Clean Energy program accounts for approximately 32% of the HPWHs installed across the 9- county Bay Area since 2019. Currently 7 San Mateo County contractors and 25 contractors outside the county are enrolled in the program. Peninsula Clean Energy has been promoting the incentive through digital ads, email outreach and other channels. The TECH program that had been providing HPWH, heat pump HVAC, and panel upgrade incentives throughout 2022 ran out of funding in PG&E service territory as of May 12, 2022. Peninsula Clean Energy and BayREN still offer incentives for customers installing HPWH for a total of $2,000. Additional incentives are available for income-qualified customers and electrical panel upgrades.
Peninsula Clean Energy will be rolling out modifications and enhancements to the appliance rebates program in Q4 2022. Those include:
1. Increase HPWH rebate: currently, residents in San Mateo County making the switch from a methane gas water heater to a HPWH are eligible for $2,000 in rebates ($1,000 from Peninsula Clean Energy and $1,000 from BayREN). In Los 329
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Banos, residents are only eligible for Peninsula Clean Energy’s incentives. Before the statewide TECH program ran out of funding, the combined rebates in both territories were between $3,100 - $3,800. Based on Peninsula Clean Energy and BayREN data on water heater installations in San Mateo County and the Bay Area, the median installed cost (equipment + labor) of a HPWH is $6,000 and $2,000 for a methane gas tank water heater. With the objective of reaching cost parity, Peninsula Clean Energy rebate will increase its HPWH rebate to $3,000, making the total available $4,000 when factoring in the BayREN rebate. Los Banos is not in BayREN territory so not eligible for BayREN incentives. Peninsula Clean Energy is studying whether the total incentives for Los Banos could be made equivalent to those available in San Mateo County
2. Add heat pump heating ventilation and air conditioning (HP HVAC) rebate:
Peninsula Clean Energy has not offered a HP HVAC rebate to date. Before it ran out of funding, TECH offered a $3,000 rebate. Based on BayREN and TECH data, the median installed cost (equipment + labor) of a HP HVAC system is $19,000.
Based on our research, this is $500-3,000 more expensive than adding or replacing air conditioning in the same home. Peninsula Clean Energy plans to add a $3,500 rebate for HP HVAC installations. This will provide support important for proposed existing building electrification codes being considered by multiple cities, which requires new or replaced air conditioners to be heat pumps capable of heating and cooling.
3. Simplify electrical panel rebates: currently, Peninsula Clean Energy panel upgrade rebates are as follows: $750 for subpanel upgrade or addition, $750 for main panel upgrade up to 200 amps, or $1,500 for main panel upgrade up to 100 amps. This nuanced rebate structure is a common point of confusion for contractors. With the objective of simplifying the structure, the rebate will be $1,500 irrespective of type. Before it ran out of funding, TECH offered an additional $1,300 rebate making the total combined amount to $2,800. Based on data from Peninsula Clean Energy HPWH projects with panel upgrades, the average cost of a panel upgrade is $3,700.
4. Run a temporary marketing bonus: in 2021, Peninsula Clean Energy ran time limited “bonus” rebates for projects that were completed before a certain date (September 30th). This bonus, paired with a robust marketing campaign, was very effective in driving volume. In the month the bonus expired, the number of installations doubled from that of the previous rate. A new marketing bonus of $500 for both HPWH and HP HVAC installs will again be put in place to drive volume and motivation for customer action.
5. Offer rebates to all customers irrespective of contractor used: currently, in San Mateo County, the program is fully integrated with the BayREN Home+ program, meaning customers can only access they Peninsula Clean Energy rebates if they work with a BayREN-approved contractor. The program was set up this way to streamline the application experience by allowing contractors to submit a single application (through BayREN) on behalf of the customer to get the rebates from both programs. Since BayREN does not operate in Los Banos a separate 330
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rebate application, directly through Peninsula Clean Energy, was created for Los Banos residents. This means in Los Banos, residents are able to work with any contractor or even install the equipment themselves, and still be able to access the Peninsula Clean Energy rebate. Peninsula Clean Energy plans to make this option available to San Mateo County residents as well so they will be able to access the rebates if working with a non-BayREN-approved contractor or installing it themselves. City permits for the installed equipment will be required as part of the application process. The integrated BayREN process will remain, however, as it will continue to be the most streamlined way for customers to access all rebates available through a single application and make use of the experienced electrification contractors who are BayREN-approved.
The cost of electrifying water heating and space heating are higher than doing a gas-to-gas replacement. Incentive support is important to reduce customer costs enabling existing building reach code policy adoption without undue burden to residents. Staff is making these modifications to A) bring fuel switching/electrification to at least cost parity with gas replacements, B) backstop the loss of TECH incentives, and C) support the adoption of existing building reach codes.
Lastly, Peninsula Clean Energy will launch the the Zero Percent Financing program (I.e.
On-Bill Financing) concurrently with the Appliance Rebates Program modifications and enhancements noted above as the two programs are highly interconnected. Customers will be able to get rebates and finance the net project cost through this program.
Strategic Plan:
Goal 3 – Community Energy Programs
Objective A: Decarbonization Programs: Develop market momentum for electric transportation, and initiate the transition to clean energy buildings • Key Tactic 4: Establish preference for all-electric building design and appliance replacement among consumers and building stakeholders
2.2. (Low-Income) Home Upgrade Program
Background: In May 2020, the Board approved $2 million for implementing a turn-key low-income home upgrade program to offer minor home repair, energy efficiency, and electrification measures to income-qualified homeowners at no cost to them. The measures implemented in each home will vary depending on the home’s needs but will include at least one electrification measure such as installing a HPWH or replacing a gas stove with an electric induction stove. The contract with the administration and implementation firm, Richard Heath & Associates (RHA), was executed after being approved by the Board in the March 2021 meeting.
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Status: The program was announced on September 28, 2021. The below table summarizes the program’s status as of June 30, 2022.
Stage/category #s as of June 30 2022
Leads 462
Reached 312
Pre-assessments 228
Enrolled 176
Ineligible 136
Installations in progress 37
Fully complete 45
The following table summarizes the number of electrification measures implemented on the fully complete homes.
Measure Count
Heat pump water heater 19
Induction cooktop/range 9
Electric dryer 15
Central or mini split eat pump (HVAC) 3
Window or wall mounted heat pump (HVAC) 7
Portable heat pump (HVAC) 11
Strategic Plan:
Goal 3 – Community Energy Programs
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
2.3. Building Pilots
Background: In May 2020, The Board approved $300,000 for piloting a new innovative technology from Harvest Thermal Inc., a Bay Area-based startup, that combines residential space and water heating into a unified heat pump electric system with a single water storage tank. Through this project, this technology will be installed in 3-5 homes within the San Mateo County to assess its performance and demonstrate its effectiveness for emission reductions.
Status: The home recruitment process began in late April 2021 and the project received 290 applications. Homes were selected based on technical criteria (home characteristics, energy usage patterns, and technical feasible of the upgrade within budget). The four pilot homes are located in Daly City, South San Francisco, Redwood City, and Menlo Park. As of May 13, 2022, the Daly City, South San Francisco, and Redwood City homes 332
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have had their system installed. The Menlo Park home received its city permit this month and installation is expected to be completed this month. The consulting firm TRC has been contracted to provide independent measurement and verification services for the project and have begun collecting data on the homes installed. A final report is anticipated in the summer of 2023 after a year a data has been collected and analyzed. Lastly, the Technical Advisory Committee (TAC) had its second meeting on June 2, 2022, following the first meeting on September 30, 2021. The objective of the TAC is to review and provided feedback on the project. TAC members include former building officials, former contractor, city commissioner, peer CCA program managers, CPUC staff, CAC member and Board member Jeff Aalfs. A small ribbon-cutting event was held at the Daly City home on June 4th with PCE staff in attendance. Additionally, Senator Josh Becker toured a Harvest Thermal home and Home Upgrade home on July 20th with PCE staff in attendance.
Strategic Plan:
Goal 3 – Community Energy Programs
Objective C: Innovation and Scale: Leverage leadership, innovation, and regulatory action for scaled impact
• Key Tactic 1: Identify, pilot, and develop innovative solutions for decarbonization
2.4. Refrigerator Recycling
Background: In April 2019, Peninsula Clean Energy launched a small turnkey refrigerator recycling program with a budget of $75,000 as part of the Community Pilots program. The program administrator, ARCA Recycling, manages orders intake, pick up scheduling, and rebate processing. The objective of the program is to capture high impact greenhouse gas gases from old appliances by facilitating proper recycling of the appliance’s refrigerants and foaming agents for insulation (which also continue refrigerants). The initial program budget was exhausted in May but in June 2022, following Board approval, staff executed a contract amendment to continue, and expand the program with an additional budget of $200,000 over three years (FY23-FY25). The contract amendment includes adding more appliance types (air conditioning units, and allowing non-working units to be eligible) and allowing for bulk pickups from apartment complexes and waste distribution centers.
Status: Since inception in April 2019, the recycling program has recycled 367 refrigerators and freezers resulting in 673 MTCO2e in greenhouse gas reduction.
Strategic Plan:
Goal 3 – Community Energy Programs
Objective A: Decarbonization Programs: Develop market momentum for electric transportation, and initiate the transition to clean energy buildings 333
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• Key Tactic 4: Establish preference for all-electric building design and appliance replacement among consumers and building stakeholders
3. Distributed Energy Programs
Peninsula Clean Energy has Board-approved strategies for the promotion of 20 MW of new distributed energy resources in San Mateo County and is advancing distributed energy resources to provide resilience, lower decarbonization costs, provide load shaping to support our strategic goal for 24/7 renewables. The projects described below are efforts towards meeting both of these goals.
3.1. Local Government Solar Program
Background: The Local Government Solar program is aimed at aggregating local government facilities into a group procurement of solar and optionally storage systems.
Peninsula Clean Energy provides no-cost site assessments and preliminary designs as well as manages the procurement process. Participating sites have systems installed as part of power purchase agreements directly with Peninsula Clean Energy. As part of the pilot phase, in October 2020, the Board approved a Solar Site Evaluation Services contract with McCalmont Engineering for Solar site evaluation and designs for County and municipal facilities identified as candidates for solar-only or solar + storage resilience projects. In March 2022, the board approved up to $8 million in capital for system installations to be repaid over 20 years and $600,000 for technical assistance on the second round of the aggregated solar program.
Status: Peninsula Clean Energy developed a portfolio of 15 sites in 13 cities for a total portfolio size of approximately 2 MW of solar. Battery storage will be explored for 4 of the 15 sites. City council commitments for the projects were secured from all 13 cities.
Peninsula Clean Energy launched a Request for Proposals for solar+storage at public facilities as part of this program. The deadline for interested bidders to submit their Statements of Interest was July 15, and the deadline for proposal submissions was August 1.
The RFP solicited bids that could fit into two procurements models. In Model 1, Peninsula Clean Energy in partnership with a tax financing partner would purchase the systems from a contractor that would procure, install, and maintain equipment. In Model 2, Peninsula Clean Energy would secure a master PPA for the full portfolio with an entity that can provide both tax equity and installation. There are pros and cons to each model. Multiple proposals have been received and are under evaluation.
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3.2. Power On Peninsula – Homeowner
Background: Power on Peninsula – Homeowner is a solar+storage energy resiliency program run by Peninsula Clean Energy in partnership with Sunrun.. This program provides energy storage systems paired with solar power to single family and multifamily Peninsula Clean Energy customers. Customers who sign up for this program receive an incentive up to $500. At Peninsula Clean Energy’s direction, Sunrun will dispatch the stored energy during evening hours when renewable generation on the California grid is low. This will also help Peninsula Clean Energy to reduce its peak load and thereby reduce our resource adequacy requirements.
Status: The program has commenced dispatching customer batteries in the evening to help reduce Peninsula Clean Energy’s net peak. Sunrun will continue to enroll new customers throughout 2022. The program is being impacted by supply chain issues including contractor, materials, and product supply and cost. Sunrun is currently working on ensuring that all batteries installed are capable of delivering Load Modification in order to reduce customers’ peak energy load. Staff is working with a firm to provide labor compliance assistance and has begun developing the process for analyzing workforce data.
3.3. FLEXmarket
Background: In November 2021 the Board approved a program plan for the establishment of an innovative “virtual power plant” using what is known as FLEXmarket.
FLEXmarket is a market-based program structure that provides incentives to program “aggregators” to implement programs for energy efficiency and load shaping. The novel elements of the structure include a “pay-for-performance” approach which only provides incentives on confirmed performance using meter data. This novel structure was innovated by MCE and also is being implemented by East Bay Community Energy and Sonoma Clean Power. In addition, the program plan was developed for submission to the CPUC to allow Peninsula Clean Energy to run the program with fully reimbursed funding through the CPUC. Peninsula Clean Energy’s billing data services provider Calpine has entered into a strategic partnership with the firm Recurve to provide FLEXmarket services through a streamlined structure.
Status: Peninsula Clean Energy’s proposed FLEXmarket program was approved by the CPUC on May 5th and the Board approved the contract with Calpine to implement the program in June. Staff developed and submitted a Program Implementation Plan to the California Energy Data and Reporting System on July 5. The required contract between Peninsula Clean Energy and Calpine is nearly finalized, and the incentive design is in progress. It is anticipated that program design will continue over the coming weeks, and that contractor recruitment will commence in Summer and Fall.
Strategic Plan:
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• Key Tactic 1: Create minimum of 20 MW of new local renewable power sources in PCE service territory by 2025
• Key Tactic 2: Support distributed energy resources to lower costs, support reliability, and advance distributed and grid decarbonization • Key Tactic 3: Foster Resilience
4. Transportation Programs
4.1. Used EV Rebate Program
Background: Launched in March 2019, the Used EV Rebate Program (formerly referred to as “DriveForward Electric”) provided an incentive up to $4,000 for the purchase of used plug-in hybrid electric vehicles (PHEVs) and full battery electric vehicles (BEVs) to income-qualified San Mateo County residents (those making 400% of the Federal Poverty Level or less). The incentives may be combined with other state-funded income-qualified EV incentive programs. In October 2020, the Board approved expanding the program to offer used EV incentives to all San Mateo County and Los Banos residents, while maintaining the increased incentives for income-qualified residents. In February 2021, Peninsula Clean Energy executed a competitively bid contract with GRID Alternatives (“GRID”) to administer the expanded program. The ‘old’ program incentivized 105 rebates from March 2019 through August 2021. In August 2021, the program was officially re-launched. In March 2022, staff made modifications to the program to adjust to market conditions (I.e. high used vehicle prices). Modifications included raising the eligible vehicle price cap from $25,000 to $35,000 and increasing the rebate amount for income-qualified residents by $2,000 taking the maximum rebate amount to $6,000.
Status: Since the re-launch of the program in August 2021, 101 rebates have been provided under the new program and 200+ customers are actively in the pipeline (customers must apply prior to purchase). Since the increased incentives were put in place in March, the program has a substantial increase in applications, doubling the pace from prior months.
Strategic Plan:
Goal 3 – Community Energy Programs
Objective A: Decarbonization Programs: Develop market momentum for electric transportation, and initiate the transition to clean energy buildings • Key Tactic 1: Drive personal electrified transportation to majority adoption Objective B: Community Benefits: Deliver tangible benefits throughout our diverse communities
• Key Tactic 1: Invest in programs that benefit underserved communities 336
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4.2. “EV Ready” Charging Incentive Program
Background: In December 2018 the Board approved $16 million over four years for EV charging infrastructure incentives ($12 million), technical assistance ($2 million), workforce development ($1 million), and administrative costs ($1 million). Subsequent to authorization of funding, Peninsula Clean Energy successfully applied to the California Energy Commission (CEC) for the CEC to invest an additional $12 million in San Mateo County for EV charging infrastructure. Of Peninsula Clean Energy’s $12 million in incentives, $8 million is administered through the CEC’s California Electric Vehicle Incentive Project (CALeVIP) and $4 million under a dedicated, complementary Peninsula Clean Energy incentive fund. The dedicated Peninsula Clean Energy incentives address Level 1 charging, assigned parking in multi-family dwellings, affordable housing new construction, public agency new construction, and charging for resiliency purposes.
Status: The program is being significantly impacted by supply chain issues including contractor scheduling materials, and product supply and cost. This is resulting in installation delays. Peninsula Clean Energy engaged directly with participating contractors to understand installation delay issues and IBEW 617 to explore solutions.
Peninsula Clean Energy’s technical assistance and outreach is ongoing. Current outreach is focused on small to medium apartments in San Mateo County (~3,000 buildings). In addition, the Center for Sustainable Energy (CSE), which manages the CALeVIP component of the program for the CEC and Peninsula Clean Energy has had ongoing and serious delays in the program, greatly hampering the ability to install charging stations. Peninsula Clean Energy is implementing changes to the EV Ready program to expedite installations. These include providing customers with greater flexibility in selecting contractors, adjusted incentive levels to account for rising costs, and direct management of all Level 2 projects not already approved by the Center for Sustainable Energy in the CALeVIP program. The CALeVIP projects were notified in late August and are in the process of transferring to PCE direct management.
Summary of program metrics is outlined in the table below:
Sites/ Applications Ports Incentive Amount
# of sites in Technical Assistance 136 939 -
# of site evaluations approved by
PCE
94 1997 -
# of funding applications received
in Peninsula Clean Energy
incentive program
36 487 $1,226,500
# of funding applications
approved in Peninsula Clean
Energy incentive program
20 382 $832,500
# of CALeVIP applications
approved in Year 1*
86 1,057
# of CALeVIP applications
anticipated in Year 2 & Year 3
0 Total # of ports installed 11 254 $701,000
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*Includes DCFC and L2 ports: 306 DCFC, 751 L2 ports
Strategic Plan:
Goal 3 – Community Energy Programs
Objective A: Decarbonization Programs: Develop market momentum for electric transportation, and initiate the transition to clean energy buildings • Key Tactic 1: Drive personal electrified transportation to majority adoption • Key Tactic 5: Support local government initiatives to advance decarbonization Objective B: Community Benefits: Deliver tangible benefits throughout our diverse communities
• Key Tactic 3: Support workforce development programs in the County
4.3. EV Ride & Drives / EV Rental Rebate
Background: In February 2019, the Board approved continuation of the EV Ride & Drive program over three years (2019-2021) following a 2018 pilot. It provides for community and corporate events in which community members can test drive a range of EVs. The program generated 19 events and 3,033 experiences since inception in 2018. Event surveys indicate that the ride and drive was the first EV experience for 64% of participants and 87% report an improved opinion of EVs. Trailing surveys 6 months or more after events have yielded a 33% response rate and 17% of respondents indicate they acquired an EV after the event. Due to the COVID-19 pandemic, ride & drive events have been paused. As a result, staff developed a suite of virtual EV engagement pilot programs that replaced the in-person ride & drive events. Staff evaluated these pilots in January 2021 and phased out some due to low uptake and to prioritize limited funding for the most successful programs – Virtual EV Forums & EV Rental Rebate. The Virtual EV Forums in partnership with large San Mateo County employers continued through the end of FY20-
21. Four EV Forums were held. Most of the FY21-22 EV Ride & Drive/Engagement budget was be dedicated to the EV Rental Rebate. Peninsula Clean Energy evaluated re-starting ride & drive events again this year, however the vehicle supply shortage has meant that dealerships do not have cars available for ride & drive events and thus it is not feasible to re-start the program again at this time.
Status: The EV Rental Rebate has been phased out due to low utilization at this time.
The program officially closed on July 31, 2022 and issued a total of 216 rebates since its launch in October 2020. Staff sent surveys to participants 6 months after the rental and of 34 respondents, 8 of them (8%) have purchased an EV since the rental.
Strategic Plan:
Goal 3 – Community Energy Programs
Objective A: Decarbonization Programs: Develop market momentum for electric transportation, and initiate the transition to clean energy buildings • Key Tactic 1: Drive personal electrified transportation towards majority adoption 338
Item No. 21
4.4. E-Bikes for Everyone Rebate Program
Background: The Board initially approved the income-qualified E-Bikes Rebate program in July 2020 with a budget of $300,000 and approved an increase of an additional $300,000 in December 2022, bringing the total program budget to $600,000. The first phase of the program launched in May 2021 and sold out immediately and provided 276 rebates. The second phase is currently underway and will provide approximately 320 rebates. The program is available to residents with low to moderate incomes. Silicon Valley Bicycle Coalition is under contract to Peninsula Clean Energy as an outreach and promotional partner and local bike shops are under contract to provide the rebate as a point-of-sale discount to customers. Enrolled bike shops include Summit Bicycles, Mike’s Bikes, Sports Basement, Chain Reaction, Woodside Bike Shop, and E-Bix Annex.
Status: The second round of the program is currently underway. 180 e-bikes have already been purchased. The new round utilizes more targeted outreach with community partners and a lottery method for awarding incentives rather than the first-come, first-served method used in the previous round.
Strategic Plan:
Goal 3 – Community Energy Programs
Objective A: Decarbonization Programs: Develop market momentum for electric transportation, and initiate the transition to clean energy buildings • Key Tactic 1: Drive personal electrified transportation to majority adoption Objective B: Community Benefits: Deliver tangible benefits throughout our diverse communities
• Key Tactic 1: Invest in programs that benefit underserved communities
4.5. Municipal Fleet Program
Background: The Board approved the Municipal Fleet Program in November 2020. This program will run for three years with a total budget of $900,000 and is comprised of three components to help local agencies begin their fleet electrification efforts: hands-on technical assistance and resources, gap funding, and a vehicle to building resiliency demonstration that will assess the costs and benefits of utilizing fleet EVs as backup power resources for agencies in grid failures and other emergencies.
Status: Staff have selected a consulting team and is bringing the contract to this Board meeting for approval at this Board meeting. The program is expected to become available in fall 2022. A workshop will be held in the fall to promote the program and recruit local agency fleet managers.
Strategic Plan:
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Goal 3 – Community Energy Programs
Objective A: Decarbonization Programs: Develop market momentum for electric transportation and initiate the transition to clean energy buildings • Key Tactic 2: Bolster electrification of fleets and shared transportation • Key Tactic 5: Support local government initiatives to advance decarbonization Objective C: Innovation and Scale: Leverage leadership, innovation, and regulatory action for scaled impact
• Key Tactic 1: Identify, pilot, and develop innovative solutions for decarbonization
4.6. Transportation Pilots
Ride-Hail Electrification Pilot
Background: This pilot, approved by the Board in March 2020, is Peninsula Clean Energy’s first program for the electrification of new mobility options. The project partners with Lyft and FlexDrive, its rental-car partner, to test strategies that encourage the adoption of all-electric vehicles in ride-hailing applications with up to 100 EVs. Because ride-hail vehicles drive much higher than average miles per year, each vehicle in this electrification pilot is expected to save over 2,000 gallons of gas and 20 tons of greenhouse gas emissions per year.
Status: The 100 EV fleet has been put into service by Lyft and Peninsula Clean Energy is monitoring progress. 130+ unique drivers have already rented them, with each rental averaging over a month. 700,000+ all electric miles have been driven so far with an average of 120 miles/day per vehicle, comparable to gas counterparts. Vehicles include a customer-facing placard that informs riders about the pilot and directs them to the PCE website for more information.
EV Managed Charging Pilot
Background: Peninsula Clean Energy aims to facilitate EV charging that avoids expensive and polluting evening hours through “managed charging” systems. This work is in the second phase of a pilot. In 2020, Peninsula Clean Energy ran a proof-of-concept pilot for EV managed charging with startup FlexCharging to test timing of EV charging through vehicle-based telematics. This was a limited pilot with approximately 10 vehicles.
The system utilizes existing Connected Car Apps and allows Peninsula Clean Energy to manage EV charging via algorithms as a non-hardware-based approach to shift more charging to occur during off-peak hours. The pilot is moving to Phase 2 intended for a larger set of 1,000 to 2,000 vehicles. In October of 2021, the Board approved a contract up to $220,000 with the University of California, Davis’ Davis Energy Economics Program (DEEP) to develop and advise on an incentive structure experiment that will be used to inform the Peninsula Clean Energy managed charging program design. This collaboration has been ongoing.
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Status: Staff released an RFP for the telematics-based platform for the Phase 2 pilot and are currently finalizing contract negotiations. The contract for the recommended winner will be brought to the Board for approval shortly. A Technical Advisory Committee, consisting of staff from CEC, CPUC, CCAs, and NGOs, is also informing the pilot and held its first meeting mid-February. The pilot is temporarily delayed to allow staff to focus on near-term priorities, though the contract is expected to be brought to the Board in the fall with a launch in early 2023.
Strategic Plan:
Goal 3 – Community Energy Programs
Community Benefits: Deliver tangible benefits throughout our diverse communities Key Tactic 1: Invest in programs that benefit underserved communities Innovation and Scale: Leverage leadership, innovation and regulatory action for scaled impact
Key Tactic 1. Identify, pilot, and develop innovative solutions for decarbonization Pilot and scale EV load shaping programs to ensure that 50% of energy for EV charging takes places in non-peak hours
5. 2035 Decarbonization Feasibility and Plan
Background: In September 2021 the Board adopted a resolution accelerating its goal of reaching carbon neutrality from 2045 to 2035 as follows “Direct Peninsula Clean Energy to adopt a goal of 100% greenhouse gas free by 2035 and direct staff to return with a plan for achieving that goal.” A Board sub-committee was established including Chair DeGolia and directors Pine, Aalfs, Nash, Parmer-Lohan to oversee the project. The schedule is as follows:
Q1: Schedule, scope, market conditions analysis
Q2: Segments, costs, and finance options
Q3: PCE investment, finance, marketing, roadmap
Sept. Retreat: Present draft analysis & plan
Q4: Confirm and align budget forecast and finalize plan The final deliverable is to be a slide deck for the retreat and potentially a white paper to follow. In addition, Peninsula Clean Energy’s primary scope for decarbonization was approved:
• Transportation: private passenger vehicles, local government and local commercial fleets, ride-hailing, alternative mobility
• Buildings: single-family and small multi-family residential, office, small commercial It is envisioned that Peninsula Clean Energy may engage beyond these segments on a limited basis.
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Item No. 21
Status: Development of the plan is ongoing. The background analysis phase of the project has been completed including detailed assessment of the market conditions, segments and costs, finance options and other components. The most recent components were reviewed by the Board sub-committee on August 11th and work has begun on the elements detailing the specific plan. The plan will be presented at the September Board retreat.
An Advisory Committee was formed including former CEC and CPUC commissioners, national lab directors, senior practitioners, and local government staff and has met twice, on June 6th and July 19th. The sessions have yielded substantive discussion including a number of key questions on rates, equity and other considerations. Advisory Committee participants were:
Jeff Aalfs Board of Directors, Peninsula Clean Energy
Diane Bailey Executive Director, Menlo Spark
Jeff Byron Former CEC Commissioner
Andrea Chow Sustainability Analyst, City of San Mateo
Pierre Del Forge Clean Buildings Director, NRDC
Cisco Devries CEO, OhmConnect
Adrienne Etherton Sustainability Manager, City of Brisbane Laura Feinstein Sustainability Policy Director, SPUR
Zach Franklin Chief Strategy Officer, GRID Alternatives Matt Golden CEO, Recurve
Ortensia Lopez Executive Director, El Concilio
Loren McDonald EV Industry Analyst, EVAdoption.com
Joshua Pierce EVP, Richard Heath and Associates
Mary Anne Piette Division Director, Lawrence Berkeley National Lab James Russell Energy Transition Director, CLEAResult
Nancy Ryan Former CPUC Commissioner
Justin Zuganis Director of Decarbonization, Silicon Valley Clean Energy Strategic Plan:
Goal 3 – Community Energy Programs
Decarbonization Programs: Develop market momentum for electric transportation and initiate the transition to clean energy buildings
Innovation and Scale: Leverage leadership, innovation and regulatory action for scaled impact
Key Tactic 1. Identify, pilot, and develop innovative solutions for decarbonization Develop strategy for supporting decarbonization by 2035 (updated 2022) 342
Item No. 22
PENINSULA CLEAN ENERGY
JPA Board Correspondence
DATE: August 12, 2022
BOARD MEETING DATE: August 25, 2022
SPECIAL NOTICE/HEARING: None
VOTE REQUIRED: None
TO: Honorable Peninsula Clean Energy Authority Board of Directors FROM: Jan Pepper, Chief Executive Officer
SUBJECT: Energy Supply Procurement Report – August 2022
BACKGROUND
This memo summarizes energy procurement agreements entered into by the Chief Executive Officer since the last regular Board meeting in July. This summary is provided to the Board for information purposes only.
DISCUSSION
Execution
Month Purpose Counterparty Term
July Purchase of Energy Hedge TransAlta Energy Marketing (U.S.) Inc. 3 Months
July Purchase of Energy Hedge Calpine Energy Services, L.P. 12 Months July Purchase of Energy Hedge Morgan Stanley Capital Group Inc. 9 Months
July Purchase of Resource
Adequacy Calpine Energy Services, L.P. 5 Months
July Purchase of Resource
Adequacy Silicon Valley Clean Energy 1 Month
April Sale of Import Allocation Rights
for Resource Adequacy Southern California Edison 1 Month August Purchase of Resource
Adequacy
Central Coast Community
Energy 1 Month
August Sale of Resource Adequacy Central Coast Community Energy 1 Month
June Amendment to EEI Agreement Brookfield Renewable Trading and Marketing L.P. N/A
June Amendment #3 of PPA Gonzaga Ridge Wind Farm,
LLC
N/A
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Item No. 22
August Amendment #2 of PPA Chaparral Solar, LLC N/A
June Purchase of Energy Hedge Constellation Energy
Generation, LLC 3 Months
August Purchase of Carbon Free
Energy
Portland General Electric
Company 5 Months
August Purchase of Resource
Adequacy
Shell Energy North America
(US), L.P. 3 Months
In January 2020, the Board approved the following Policy Number 15 – Energy Supply Procurement Authority.
Policy: “Energy Procurement” shall mean all contracting for energy and energy-related products for PCE, including but not limited to products related to electricity, capacity, energy efficiency, distributed energy resources, demand response, and storage. In Energy Procurement, Peninsula Clean Energy Authority will procure according to the following guidelines:
1) Short-Term Agreements:
a. Chief Executive Officer has authority to approve Energy Procurement contracts with terms of twelve (12) months or less, in addition to contracts for Resource Adequacy that meet the specifications in section (b) and in Table 1 below. b. Chief Executive Officer has authority to approve Energy Procurement contracts for Resource Adequacy that meet PCE’s three (3) year forward capacity obligations measured in MW, which are set annually by the California Public Utilities Commission and the California Independent System Operator for compliance requirements.
Table 1:
c. Chief Financial Officer has authority to approve any contract for Resource Adequacy with a term of twelve (12) months or less if the CEO is unavailable and with prior written approval from the CEO.
Product Year-Ahead Compliance
Obligation
Term Limit
Local Resource
Adequacy
In years 1 & 2, must demonstrate
capacity to meet 100% of monthly
local obligation for years 1 and 2 and
50% of monthly local obligation for
year 3 by November 31st of the prior
year
Up to 36 months
System Resource
Adequacy
In year 1, must demonstrate
capacity to meet 90% of system
obligation for summer months (May
– September) by November 31st of
the prior year
Up to 12 months
Flexible Resource
Adequacy
In year 1, must demonstrate
capacity to meet 90% of monthly
flexible obligation by November 31st
of the prior year
Up to 12 months
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d. The CEO shall report all such agreements to the PCE board monthly. 2) Medium-Term Agreements: Chief Executive Officer, in consultation with the General Counsel, the Board Chair, and other members of the Board as CEO deems necessary, has the authority to approve Energy Procurement contracts with terms greater than twelve (12) months but not more than five (5) years, in addition to Resource Adequacy contracts as specified in Table 1 above. The CEO shall report all such agreements to the PCE board monthly.
3) Intermediate and Long-Term Agreements: Approval by the PCE Board is required before the CEO enters into Energy Procurement contracts with terms greater than five (5) years.
4) Amendments to Agreements: Chief Executive Officer, in consultation with the General Counsel and the Board Chair, or Board Vice Chair in the event that the Board Chair is unavailable, has authority to execute amendments to Energy Procurement contracts that were previously approved by the Board.
STRATEGIC PLAN
The contracts executed in November support the Power Resources Objective A for Low Cost and Stable Power: Develop and implement power supply strategies to procure low-cost, reliable power.
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California Community Power
70 Garden Court, Suite 300, Monterey, CA 93940 | cacommunitypower.org A Joint Powers Agency whose members are:
Central Coast Community Energy | CleanPowerSF | East Bay Community Energy | MCE | Peninsula Clean Energy | Redwood Coast Energy Authority | San José Clean Energy | Silicon Valley Clean Energy | Sonoma Clean Power | Valley Clean Energy
TO: CC Power Board of Directors and Alternates DATE: 8/17/2022 FROM: Tim Haines – Interim General Manager
SUBJECT: Report on CC Power Special Board of Directors Meeting – August 17, 2022 The CC Power Board of Directors held its regularly scheduled meeting on Wednesday, August 17, 2022, via Zoom. Details on the Board packet, presentation materials, and public comment letters can be found under the Meetings tab at the CC Power website: https://cacommunitypower.org Highlights of the meeting included the following:
• Consent Calendar - The Board unanimously approved the following items:
o Minutes of the Regular Board Meeting held on June 15, 2022. o Resolution 22-08-01 Determination that Meeting in Person Would Present Imminent Risks to the Health or Safety of Attendees as a Result of the Proclaimed State of Emergency
• Resolution 22-08-02 Acceptance of Marin Clean Energy Withdrawal from California Community Power. MCE provided CC Power with a notice of intent to withdraw from CC Power. The stated reasons are MCE has not participated in CC Power projects and has been successful contracting directly. MCE does note that it anticipates the pause is temporary and expects to rejoin CC Power in the future subject to market and technology needs. The remaining debts that MCE will pay are $5,000.
• Update from Strategic Business Plan ad hoc Committee. Interim General Manager informed the Board that the ad hoc Committee is close to selecting a consultant with extensive experience with California public utilities at the Board and executive management level. Mr. Haines explained how the plan will reflect the Board’s ideas for future projects, organization, and leadership.
• Open Discussion on Inflation Reduction Act and Potential Impacts. The Board discussed the potential significant opportunities that the IRA creates for CC Power and its members. The Chair asked the Interim GM to work with the Budget ad hoc committee and return to the Board with a budget plan to staff up CC Power at a future Board meeting. This will compliment the Strategic Business Plan.
• General Manager’s Report
o Follow-up on CC Power Discussion with California Independent System Operator.
The Interim GM informed the Board that the CC Power had initiated outreach with the CAISO. The report discussed the next steps in the education and engagement process.
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2 o Resolution 22-08-03 Approval of 2022 Budget Amendment and Cash Calls. The Interim General Manager proposed, and the Board adopted the 2022 budget amendment and the associated cash calls to members.
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COMMONLY USED ACRONYMS AND KEY TERMS
AB xx – Assembly Bill xx
ALJ – Administrative Law Judge
AMP- Arrears Management Plans
AQM – Air Quality Management
BAAQMD – Bay Area Air Quality Management District
BLPTA – Buyer Liability Pass Through Agreement
CAC – Citizens Advisory Committee
CAISO – California Independent System Operator
CalCCA – California Community Choice Association
CAM – Cost Allocation Mechanism
CAP – Climate Action Plan
CAPP – California Arrearage Payment Program
CARB – California Air Resources Board, or California ARB CARE- California Alternative Rates for Energy Program
CBA – California Balancing Authority
3CE- Central Coast Community Energy (Formerly Monterey Bay Community Power-MBCP) CCA – Community Choice Aggregation (aka Community Choice Programs (CCP) or CCE – Community Choice Energy (CCE)
CCP – Community Choice Programs
CEC – California Energy Commission
CPP- Critical Peak Pricing
CPSF – Clean Power San Francisco
CPUC – California Public Utility Commission (Regulator for state utilities) (Also PUC) CSD – California Department of Community Services and Development CSGT - Community Solar Green Tariff
DA – Direct Access
DAC-GT - Disadvantaged Communities Green Tariff
DER – Distributed Energy Resources
DG – Distributed Generation
DOE – Department of Energy
DR – Demand Response
DRP – Demand Response Provider
DRP/IDER – Distribution Resources Planning / Integrated Distributed Energy Resources EBCE – East Bay Community Energy
ECOplus – PCE’s default electricity product, 50% renewable and 50% carbon-free (in 2021) ECO100 – PCE’s 100% renewable energy product
EDR – Economic Development Rate
EE – Energy Efficiency
EEI – Edison Electric Institute; Standard contract to procure energy & RA EIR – Environmental Impact Report
ELCC – Effective Load Carrying Capability
ESP – Electric Service Provider
348
ESS – Energy Storage Systems
ESSA – Energy Storage Services Agreement
ERRA – Energy Resource Recovery Account
EV – Electric Vehicle
EVSE – Electric Vehicle Supply Equipment (Charging Station) FERA- Family Electric Rate Assistance Program
FERC – Federal Energy Regulatory Commission
FFS – Franchise Fee Surcharge
GHG – Greenhouse gas
GHG-Free – Greenhouse gas free
GTSR – Green Tariff Shared Renewables
GWh – Gigawatt Hours (Energy) = 1000 MWh
IDER – Integrated Distributed Energy Resources
IOU – Investor-Owned Utility (e.g. PG&E, SCE, SDG&E)
IRP – Integrated Resource Plan
IVR – Interactive Voice Response
ITC – Investment Tax Credit (it’s a solar tax credit)
JCC – Joint Cost Comparison
JPA – Joint Powers Authority
JRC – Joint Rate Comparison
JRM – Joint Rate Mailer
kW – kilowatt (Power)
kWh – Kilowatt-hour (Energy)
LDS – Long Duration Storage
LDES – Long Duration Energy Storage
LIHEAP- Low Income Home Energy Assistance Program
Load Shaping – changing when grid energy is used
LSE – Load Serving Entity
MCE – Marin Clean Energy
Methane Gas - formerly known as ‘natural gas’
Microgrid – building or community energy system
MW – Megawatt (Power) = 1000 kW
MWh – Megawatt-hour (Energy) = 1000 kWh
MUD – Multi-unit Dwelling
NBCs – non-bypassable charges
NEM – Net Energy Metering
NERC – North American Electric Reliability Corporation
NDA – Non-Disclosure Agreement
NG – Natural Gas
OBF – On-bill Financing
OBR – On-bill Repayment
OES – Office of Emergency Services
OIR – Order Instituting Rulemaking
PACE – Property Assessed Clean Energy
PCC – Portfolio Content Category (aka “buckets”) – categories for RPS compliance PCC1 – Portfolio Content Category 1 REC (also called bucket 1 REC) PCC2 – Portfolio Content Category 2 REC (also called bucket 2 REC) PCC3 – Portfolio Content Category 3 REC (also called bucket 3 REC or unbundled REC) 349
PCE – Peninsula Clean Energy Authority
PCIA – Power Charge Indifference Adjustment
PCL – Power Content Label
PLA – Project Labor Agreement
POU – Publicly Owned Utility
PPA – Power Purchase Agreement
PPSA – Project Participation Share Agreement (CC Power) PSPS – Public Safety Power Shutoff
PV – Photovoltaics (solar panels)
RA – Resource Adequacy
RE – Renewable Energy
REC – Renewable Energy Credit/Certificate
RICAPS - Regionally Integrated Climate Action Planning Suite RPS – California Renewable Portfolio Standard
SB xx – Senate Bill xx
SCP – Sonoma Clean Power
SJCE – San Jose Clean Energy
SJVAPCD - San Joaquin Valley Air Pollution Control District SMD – Share My Data, interval meter data
SQMD – Settlement Quality Meter Data
SVCE – Silicon Valley Clean Energy
TEF – Transportation Electrification Framework (CPUC Proceeding) TNCs – Transportation Network Companies (ridesharing companies) TOB – Tariff on Bill
TOU RATES – Time of Use Rates
VGI – Vehicle-Grid Integration
V2G – Vehicle-to-Grid
VPP – Virtual Power Plant
WECC – Western Energy Coordinating Council
WREGIS – Western Renewable Energy Generation Information System WSPP – Western Systems Power Pool; standard contract to procure energy and RA 350