Board of Directors
Chair: Alice Dowdin Calvillo
Vice Chair: Greg Janda
City of Auburn
Alice Dowdin Calvillo
Sandra Amara, Alternate
City of Colfax
Sean Lomen
Kim Douglass, Alternate
County of El Dorado
Lori Parlin
Brian Veerkamp, Alternate
City of Grass Valley
Tom Ivy
Jan Arbuckle, Alternate
City of Lincoln
Richard Pearl
John Reedy, Alternate
Town of Loomis
David Ring
Danny Cartwright, Alternate
Nevada City
Gary Petersen
Lou Ceci, Alternate
County of Placer
Anthony DeMattei
Suzanne Jones
Bonnie Gore, Alternate
City of Placerville
Ryan Carter
David Yarbrough, Alternate
City of Rocklin
Greg Janda
David Bass, Alternate
Pioneer Community Energy
Board of Directors
MARCH 20, 2025
REGULAR MEETING
3:00 PM
Pioneer Community Energy Board Room
2510 Warren Drive, Suite B, Rocklin, CA 95677
Remote Location:
Nevada City – City Hall, Wetherall Conference Room
317 Broad Street, Nevada City, CA 95959
This regular meeting will convene in person at the address printed above, be accessible on the Zoom platform at the following link:
https://us06web.zoom.us/j/89020017279;
and live streamed for viewing on the Pioneer website:
https://pioneercommunityenergy.org/about-us/meetings-and-agendas/.
Members of the public may participate in person or by remote audio/visual access.
Those who participated remotely and wish to comment should be prepared to use the Zoom platform via computer or telephone. Public comment will be opened for each agenda item in sequence.
How to Participate Using Zoom
You can join the meeting using the following link:
https://us06web.zoom.us/j/89020017279.
When you join the meeting, you will be muted by default. To inform the Clerk that you would like to make a public comment, you will use the “Raise Hand” feature.
Public Comment via Computer or Smartphone
If you would like to make a comment, you will use the “Raise Your Hand” feature.
Please note that you should only raise your hand during the item to which you will comment. Instructions for using the “Raise Hand” feature when using a computer or mobile device can be found at the link:
https://support.zoom.us/hc/en-us/articles/205566129-Raising-your-hand-in-a-webinar Public Comment via telephone (Audio Only Option)
1. Dial 1 (699) 900-6833
2. When asked for the meeting ID, enter 890 2001 7279#
3. When asked for your participant ID, press # to continue.
You will be muted by default. To inform the Clerk that you would like to make a comment, during each agenda item, dial *9 to “Raise your hand.” When it is your turn to speak, the Clerk will identify you by the last three digits of your phone number; at that time, dial *6 to unmute yourself and state your name and comment for the record. Please note that you should only raise your hand during the item to which you will comment.
I. GENERAL ADMINISTRATIVE FUNCTION – PART 1
A. CALL TO ORDER
1. Roll Call
B. AGENDA REVIEW
C. PRESENTATIONS BY THE PUBLIC ON MATTERS NOT ON THE AGENDA WITHIN THE
JURISDICTION OF THE BOARD
Persons may address the Board on items not on this agenda. Please limit comments to 3 minutes per person. According to State Law (the Brown Act), items must first be noticed on the agenda before any discussion or action. The Board is prohibited from discussing issues not on the agenda brought to them at this time.
II. CONSENT AGENDA
1) APPROVAL OF THE CONSENT AGENDA
All items on the Consent Agenda have been recommended for approval by the Chief Executive Officer.
All Consent items will be approved by a single vote. Anyone may ask to address Consent items prior to the Board acting, and the item may be moved for discussion. a) ADMINISTRATION
Approve the minutes of the February 27, 2025 regular meeting. (ECKERT) b) FINANCE & ADMINISTRATION
Receive Fiscal Year 2024-25 Draft Monthly Financial Reports through January 2025. (KOEHN) c) ADMINISTRATION
Adopt Resolution establishing Ad Hoc Energy Procurement Review Committee, revising authority for executing Long-Term Power Procurement Contracts; and, amending the Energy Risk Management Policy. (RUDERMAN)
2) PROGRAMS
ICE Energy Storage Program (DISCUSSION- STASSI-VANACORE) Recommendation: Receive a presentation on the Ice Energy Storage Program. 3) PROGRAMS
Adopt Resolution Approving and Authorizing the Chief Executive Officer to Execute an Agreement with AM Conservation for Program Services (ACTION- STASSI-VANACORE) Recommendation: Adopt Resolution approving and authorizing the Chief Executive Officer to execute an agreement with AM Conservation for program fulfillment services for a not-to-exceed amount of $500,000 and a term of one year.
4) PROGRAMS
Adopt Resolution Approving and Authorizing the Chief Executive Officer to Execute an Agreement with Aiqueous LLC dba Brillion for Program Services (ACTION- STASSI-VANACORE) Recommendation: Adopt Resolution approving and authorizing the Chief Executive Officer to execute an agreement between Pioneer Community Energy and Aiqueous LLC dba Brillion for Program Services for an amount not to exceed $510,000 and a term of three years.
III. REGULAR AGENDA
5) POWER PROCUREMENT
Adopt Resolution Amending Resolution 2023-33 (Authorizing a Local Feed-in Tariff Program) to include Solar Plus Battery Storage and Stand-Alone Battery Storage Projects and Change Contract Term to 10 Years (ACTION – KANG)
Recommendation: Adopt Resolution amending Resolution 2023-33 (authorizing a local Feed-in Tariff Program) to include Solar Plus Battery Storage and Stand-alone Battery Storage Projects and Change Contract Term to 10 years.
6) ADMINISTRATION
State of Pioneer (DISCUSSION-ECKERT)
Recommendation: Receive an update on the State of Pioneer Community Energy.
IV. GENERAL ADMINISTRATIVE FUNCTION – PART 2
A. BOARD MEMBER COMMUNICATIONS
B. CHIEF EXECUTIVE OFFICER COMMUNICATIONS
C. ITEMS FOR INFORMATION
1. Glossary of Terms
D. ADJOURNMENT
Upcoming Meeting of the Board:
April 17, 2025
Accommodations
Pioneer Community Energy is committed to ensuring that persons with disabilities are provided with the resources to participate fully in its public meetings. If you are hearing impaired, we have listening devices available. If you require additional disability-related modifications or accommodations, including auxiliary aids or services, please contact the Clerk of the Board. If requested, the agenda shall be provided in appropriate alternative formats for persons with disabilities. All requests must be in writing and must be received by the Clerk five business days prior to the scheduled meeting for which you are requesting accommodation. Requests received after such time will be accommodated only if time permits.
Affidavit of Posting
I, Teresa Willock, Board Secretary, declare under penalty of perjury that the foregoing agenda for the March 20, 2025 meeting of the Pioneer Community Energy Governing Board was posted and available for public review on March 17, 2025 at the offices of Pioneer Community Energy, 2510 Warren Drive, Suite B, Rocklin, CA 95677; at remoted location: Nevada City – City Hall, Wetherall Conference Room, 317 Broad Street, Nevada City, CA 95959; was accessible for viewer participation on the Zoom platform at the following link:
https://us06web.zoom.us/j/89020017279; and, was live streamed for viewing on the Pioneer website at:
https://pioneercommunityenergy.org/about-us/meetings-and-agendas/.
All public materials related to an item on this agenda submitted to the Governing Board after distribution of the agenda packet are also made available for public inspection on Pioneer’s website at:
https://pioneercommunityenergy.org/about-us/meetings-and-agendas/. Any document provided at the meeting by staff or by the public will be provided by the Board Clerk upon request by phone at (916) 758-8946, or by email at: [email protected].
DRAFT
PIONEER COMMUNITY ENERGY
GOVERNING BOARD
MINUTES
February 27, 2025
REGULAR MEETING
Entry No. 1
Heard General Administrative Functions – Part I
Call to Order
Pioneer Community Energy Governing Board met in regular session at 3:00 PM on February 27, 2025. The Members convened in person and the meeting was accessible to the public at Pioneer Community Energy, 2510 Warren Drive, Suite B, Rocklin, California 95677; for viewer participation on the Zoom platform at the following link: https://us06web.zoom.us/j/89020017279; and, was live streamed for viewing on the Pioneer website at: https://pioneercommunityenergy.org/about-us/meetings-and-agendas/.
Roll Call
Present: City of Auburn (Dowdin Calvillo), City of Colfax (Lomen), City of Lincoln (Pearl), Town of Loomis (Ring), City of Placerville (Carter), City of Rocklin (Janda).
Absent: County of El Dorado (Parlin), City of Grass Valley (Ivy), Nevada City (Petersen), County of Placer (DeMattei), County of El Placer (Jones).
Chair Dowdin Calvillo presided over the meeting.
Director Ivy joined the meeting at 3:02.
Agenda Review
Reviewed and made no revision to the meeting agenda for February 27, 2025.
Public Comment
There were no comments from members of the public on items not listed on this agenda.
Director Ivy joined the meeting at 3:02.
Entry No. 2
Acted on the Consent Agenda as follows:
Approved the minutes of the special and regular meetings of January 16, 2025.
Adopted Resolution 2025-4 to Modify the Procurement Policy.
Received Fiscal Year 2024-25 Draft Quarterly Financial Reports through December 2024.
Adopted Resolution 2025-5 to authorize an increase of staffing positions by one to a total of 22 full-time staffing positions.
Affirmed existing committee members to the Audit & Finance Committee, the Energy Procurement Review Committee, and the Expansion Committee through January 2026.
ITEM 1a
DRAFT – February 27, 2025 – page 2
Audit & Finance Energy Procurement Review Expansion
Director Janda – Chair
Director Petersen
Director Ring
Director Janda – Chair
Director Dowdin Calvillo
Director Petersen
Director Dowdin Calvillo - Chair
MOTION: Lomen/Pearl. Vote: 7:0:4
ROLL CALL: Carter, Dowdin Calvillo, Ivy, Janda, Lomen, Pearl, Ring.
No/Abstain: None.
Absent: DeMattei, Jones, Parlin, Petersen.
Director DeMattei joined the meeting at 3:03.
Entry No. 3
Appoint Members to the Energy Procurement Review Committee, Audit & Finance Committee, and the Expansion Committee through January 2026
Appointed members to Pioneer Community Energy’s Audit & Finance Committee, Energy Procurement Review Committee, and Expansion Committee through January 2026.
Audit & Finance Energy Procurement Review Expansion
Director Pearl Director Carter
Director Lomen
Director Ivy
Director Jones
Director Parlin
MOTION: Dowdin Calvillo/Pearl. Vote: 8:0:3
ROLL CALL: Carter, DeMattei, Dowdin Calvillo, Ivy, Janda, Lomen, Pearl, Ring.
No/Abstain: None.
Absent: Jones, Parlin, Petersen.
Director Jones joined the meeting at 3:12.
Entry No. 4
Resolution Authorizing an Agreement with ProPose LLC dba Sagent for Marketing and Communications Services
Adopted Resolution 2025-6 authorizing the Chief Executive Officer to execute an agreement with ProPose LLC dba Sagent for marketing and communication services for an amount not to exceed $300,000 for a one-year period.
Board Chair Dowdin Calvillo commended the immediate past marketing firm on their phenomenal work; and acknowledged that they did not respond to the Request For Proposals this round, so they were not considered.
Board Chair Dowdin Calvillo continued in mentioning that the Pioneer website was international award-winning and the chat box was very well respected and well known; then, questioned if changes to the website would be suggested as part of the firm’s marketing efforts? The website continues to be phenomenal in regard to clicks as well as the format and chat box being tremendous for Pioneer so she hesitates in wanting to change that.
Presenters from Sagent responded that they have only experienced Pioneer’s website as individuals and would like to find a way that when people land on the page they can see multiple programs in one view.
DRAFT – February 27, 2025 – page 3
The primary purposes being to review content and making sure it is understandable for everybody, in layman’s terms; and, wherever people land on the website that they are accessing the desired information.
This is more a matter of shifting things around versus doing a complete overhaul to the face of the website.
Following their discovery process they will make formal recommendations.
CEO Eckert expressed appreciation for Board Chair Dowdin Calvillo in mentioning the former marketing team, JSR Strategies, because they did do a wonderful job on the website and on the branding.
CEO Eckert also confirmed that the primary focus of this contract will be toward marketing and communications regarding programs.
Sagent confirmed that the total contract amount includes media and advertisements costs.
MOTION: DeMattei/Ring. Vote: 9:0:2
ROLL CALL: Carter, DeMattei, Dowdin Calvillo, Ivy, Janda, Jones, Lomen, Pearl, Ring.
No/Abstain: None.
Absent: Parlin, Petersen.
Entry No. 5
Resolution Approving Amendment No. 6 to the Amended and Restated Joint Powers Agreement for Pioneer Community Energy
Adopted Resolution 2025-7 approving Amendment No. 6 to the Amended and Restated Joint Powers Agreement for Pioneer Community Energy to incorporate administrative changes and prior amendments into a single document. Effective Date: February 27, 2025.
MOTION: Ivy/Pearl. Vote: 9:0:2
ROLL CALL: Carter, DeMattei, Dowdin Calvillo, Ivy, Janda, Jones, Lomen, Pearl, Ring.
No/Abstain: None.
Absent: Parlin, Petersen.
Entry No. 6
Resolution Approving Amendment No. 7 to the Amended and Restated Joint Exercise of Powers Agreement
Adopted Resolution 2025-8 Approving Amendment No. 7 to the Amended and Restated Joint Exercise of Powers Agreement for Pioneer Community Energy Expanding Pioneer Community Energy’s Joint Powers Authority Membership. Effective Date: Immediately upon certification of Addendum No. 3 to the Implementation Plan and Statement of Intent.
Proposed Member Agencies: Butte County, Glenn County, Nevada County, Sutter County, Tuolumne County, Cities of Chico, Live Oak, Orland, Oroville, Sonora, Willows, Yuba City, and Town of Paradise.
MOTION: Ring/Pearl. Vote: 9:0:2
ROLL CALL: Carter, DeMattei, Dowdin Calvillo, Ivy, Janda, Jones, Lomen, Pearl, Ring.
No/Abstain: None.
Absent: Parlin, Petersen.
Entry No. 7
Resolution Approving Addendum No. 3 to the Implementation Plan and Statement of Intent Adopted Resolution 2025-9 approving Addendum No. 3 to the Pioneer Community Energy’s Community Choice Aggregation Implementation Plan and Statement of Intent to address Pioneer’s proposed expansion DRAFT – February 27, 2025 – page 4
into the Cities of Chico, Live Oak, Orland, Oroville, Sonora, Yuba City, and Willows, the Town of Paradise and unincorporated Counties of Butte, Glenn, Nevada, Sutter, and Tuolumne, and authorizing the Chief Executive Officer to submit Addendum No. 3 to the California Public Utilities Commission.
MOTION: Ivy/DeMattei. Vote: 9:0:2
ROLL CALL: Carter, DeMattei, Dowdin Calvillo, Ivy, Janda, Jones, Lomen, Pearl, Ring.
No/Abstain: None.
Absent: Parlin, Petersen.
Entry No. 8
Resolution Authorizing Chief Executive Officer to Expand the GridGen Program Adopted Resolution 2025-10 authorizing Chief Executive Officer to expand the GridGen Program to include Residential Customers with Solar, Residential Customers enrolled in the California Alternative Rates for Energy Programs, and Commercial and Industrial Customers.
MOTION: Janda/Carter. Vote: 9:0:2
ROLL CALL: Carter, DeMattei, Dowdin Calvillo, Ivy, Janda, Jones, Lomen, Pearl, Ring.
No/Abstain: None.
Absent: Parlin, Petersen.
Director Janda excused himself from the meeting at 4:35 PM due to a scheduling conflict.
Entry No. 9
Heard General Administrative Function – Part II
Board Member Communications
Board Chair Dowdin Calvillo informed the Board that she and staff visited the State Capitol yesterday to meet with about ten legislators and staff members who represent Pioneer’s existing footprint and legislators representing areas to which we are expanding. We were met with an overall very positive reception and found excitement from new representatives about what will be offered for their customers. Board Chair Dowdin Calvillo also extended her appreciation to staff for making the arrangements for this very beneficial event.
Board Chair Dowdin Calvillo requested staff to assemble a list of contact information for the Board Members and for the Board Members to provide their preferred contact information to the Board Clerk who will assemble and distribute a list to the Members.
Chief Executive Officer Communications
Informed the Board that Pioneer will be fully staffed by end of March, including the Project Development Manager, the Manager of Legislative and Regulatory Affairs, and the Power Resources Contracts Manager.
Items for Information
Received the Glossary of Terms.
Adjournment
The meeting adjourned at 4:37 PM.
Staff Report – Item 1b
To: The Governing Board
From: Eric Acedo, Sr. Financial Analyst
Item 1b: Receive Fiscal Year 2024-25 Draft Monthly Financial Reports Through January 2025 Date: 3/20/2025
RECOMMENDATION
Receive Fiscal Year 2024-25 Draft Monthly Financial Reports through January 2025.
BACKGROUND
The Year-To-Date (YTD) financial reports are produced by Maher Accountancy for Board member and management review. Although these reports are unaudited, they provide the most up-to-date financial data for Pioneer Community Energy. The mPOWER program accepted its last application August 2021 and mPOWER activity is now limited to administering the outstanding mPOWER Bonds. Financials for the mPOWER program will be included in the audited year-end reports. For January 2025, the financial reporting package includes the following reports for the CCA Fund only:
• Statement of Net Position (Balance Sheet) – Accounting of Assets, Liabilities and Net Position as of the reporting period end date for the CCA program. • Statement of Revenues, Expenses, and Changes in Net Position (P&L) – Accounting of all revenues, expenses, and changes in net position on a YTD basis through the reporting period end date for the CCA program.
• Budgetary Comparison Schedule (Budget to Actuals) – Comparison of budget to actuals on a YTD basis through the reporting period end date for the CCA program.
STRATEGIC PLAN
Strategic Priority: Be Fiscally Strong and Resilient
FISCAL IMPACT
The YTD change in net position through seven months of the fiscal year is $36.3 million.
ATTACHMENTS
1. Financial Reports through January 31, 2025
Plf)NEER
COMMUNITY ENERGY
1 ACCOUNTANTS’ COMPILATION REPORT
Management
Pioneer Community Energy
Management is responsible for the accompanying financial statements of the CCA Fund of Pioneer Community Energy (a California Joint Powers Authority) which comprise the statement of net position as of January 31, 2025, and the related statement of revenues, expenses, and changes in net position for the seven months then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements.
Management has elected to omit substantially all of the disclosures and the statement of cash flows required by accounting principles generally accepted in the United States of America in these interim financial statements. Pioneer Community Energy’s annual audited financial statements include the note disclosures and statement of cash flows omitted from these interim statements. If the omitted disclosures and the statement of cash flows were included in these financial statements, they might influence the user’s conclusions about Pioneer Community Energy’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.
We are not independent with respect to Pioneer Community Energy because we performed certain accounting services that impaired our independence.
Maher Accountancy
San Rafael, CA
March 5, 2025
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com MAHER
ACCOUNTANCY
CCA Program
ASSETS
Current assets
Cash and cash equivalents 45,655,119$
Investments 110,620,552
Accounts receivable, net of allowance 23,618,488
Accrued revenue 10,377,579
Other receivables 1,049,051
Interest receivable 282,000
Prepaid expenses 1,961,434
Deposits 991,534
Total current assets 194,555,757
Noncurrent assets
Capital assets, net of depreciation and amortization 1,177,754 Deposits 219,987
Total noncurrent assets 1,397,741
Total assets 195,953,498
LIABILITIES
Current liabilities
Accrued cost of electricity 18,933,104
Accounts payable 485,257
Other accrued liabilities 343,132
Lease liability 121,746
Note payable 864,085
Interest payable 9,116
Deposits 1,470,000
Total current liabilities 22,226,440
Noncurrent liabilities
Lease liability 821,474
Note payable 1,070,770
Supplier security deposits 282,000
Total noncurrent liabilities 2,174,244
Total liabilities 24,400,684
NET POSITION
Net investment in capital assets 234,534
Unrestricted net position 171,318,280
Total net position 171,552,814$
PIONEER COMMUNITY ENERGY
STATEMENT OF NET POSITION
As of January 31, 2025
CCA PROGRAM
See accountants' compilation report. 2
CCA Program
OPERATING REVENUES
Electricity sales, net 152,852,277$
Other income 13,056
Total operating revenues 152,865,333
OPERATING EXPENSES
Cost of electricity 112,684,162
Contract services 3,769,486
Staff compensation 2,237,662
Other operating expenses 1,108,827
Depreciation and amortization 109,350
Total operating expenses 119,909,487
Operating income (loss) 32,955,846
NONOPERATING REVENUES (EXPENSES)
Investment income 3,494,184
Interest and financing expense (114,935)
Nonoperating revenues (expenses), net 3,379,249
NET POSITION
Change in net position 36,335,095
Net position at beginning of period 135,217,719
Net position at end of period 171,552,814$
Seven Months Ended January 31, 2025
AND CHANGES IN NET POSITION
STATEMENT OF REVENUES, EXPENSES
CCA PROGRAM
PIONEER COMMUNITY ENERGY
See accountants' compilation report. 3
Participation Rates – January 2025
Participation Rate November 2024 December 2024 January 2025 January 2024 AUBURN INC 85.51% 85.48% 85.57% 85.56%
COLFAX INC 87.46% 87.99% 87.69% 88.32%
GRASS VALLEY INC 96.45% 96.90% 96.85% N/A
LINCOLN INC 82.56% 82.65% 82.66% 82.89%
LOOMIS INC 86.98% 87.08% 87.08% 88.00%
NEVADA CITY INC 96.47% 98.04% 97.86% N/A
PLACERVILLE INC 85.37% 85.38% 85.40% 86.41%
ROCKLIN INC 90.18% 90.21% 90.19% 90.81%
UNINC EL DORADO CO 79.72% 79.69% 79.72% 80.62%
UNINC PLACER CO 84.65% 84.71% 84.67% 85.06%
Grand Total 84.22% 84.27% 84.27% 84.20%
167,258
171,374 171,649
172,310
164,000
165,000
166,000
167,000
168,000
169,000
170,000
171,000
172,000
173,000
January 2024 November 2024 December 2024 January 2025
Total Pioneer Customers (# of Accounts)
4 Plf)NEER
COMMUNITY ENERGY
5 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
Pioneer Community Energy
Management is responsible for the accompanying special purpose budgetary comparison schedule for the CCA Program of Pioneer Community Energy, a California Joint Powers Authority, for the seven months ended January 31, 2025, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.
The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of Pioneer Community Energy.
Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.
Pioneer Community Energy’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about Pioneer Community Energy’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.
We are not independent with respect to Pioneer Community Energy because we performed certain accounting services that impaired our independence.
Maher Accountancy
San Rafael, CA
March 5, 2025
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com MAHER
ACCOUNTANCY
2024/25 YTD
Amended
Budget
2024/25 YTD
Actual
2024/25 YTD
Variance
(Under) Over
2024/25
YTD
Actual/
Budget %
2024/25
Amended Budget
2024/25
Amended
Budget
Remaining
ENERGY REVENUES
Energy Sales $ 153,227,000 $ 154,901,442 $ 1,674,442 101% $ 235,801,000 $ 80,899,558 Green100 Sales 128,000 42,579 (85,421) 33% 200,000 157,421 Congestion Revenue Rights and Battery Optimization 6,535,714 8,282,935 1,747,221 127% 10,000,000 1,717,065 Less Uncollectible Accounts (2,070,000) (2,091,744) (21,744) 101% (3,186,000) (1,094,256) Total Operating Revenues 157,820,714 161,135,212 3,314,498 242,815,000 81,679,788
ENERGY EXPENSES
Power Supply 133,317,466 120,967,097 (12,350,369) 91% 208,976,000 88,008,904 OPERATING MARGIN 24,503,248 40,168,115 15,664,867 33,839,000 (6,329,116)
OPERATING EXPENSES
Administration
Compensation 439,022 357,332 (81,690) 81% 816,385 459,053 Contract services 185,690 92,547 (93,143) 50% 318,325 225,778 Operating expenses 787,636 433,530 (354,106) 55% 941,796 508,266 Total Administration expenses 1,412,347 883,408 (528,939) 63% 2,076,506 1,193,098 Finance
Compensation 656,565 552,450 (104,115) 84% 1,151,050 598,600 Contract services 360,938 210,659 (150,279) 58% 591,000 380,341 Operating expenses 222,325 150,167 (72,158) 68% 357,700 207,533 Total Finance expenses 1,239,828 913,276 (326,552) 74% 2,099,750 1,186,474 Power Procurement
Compensation 660,441 383,773 (276,668) 58% 1,027,592 643,819 Contract services 2,414,503 1,426,742 (987,760) 59% 3,143,538 1,716,796 Operating expenses 119,446 113,137 (6,309) 95% 291,500 178,363 Total Power Procurement expenses 3,194,390 1,923,652 (1,270,737) 60% 4,462,630 2,538,978 Customer Care
Compensation 232,751 253,919 21,168 109% 399,002 145,083 Contract services 1,586,667 1,685,071 98,404 106% 2,720,000 1,034,929 Operating expenses 125,271 127,303 2,032 102% 214,750 87,447 Total Customer Care expenses 1,944,689 2,066,293 121,604 106% 3,333,752 1,267,459 Marketing & Communications
Compensation 432,802 332,336 (100,465) 77% 741,946 409,610 Contract services 264,375 1,362 (263,013) 1% 420,000 418,638 Operating expenses 493,704 59,080 (434,624) 12% 846,350 787,270 Total Marketing expenses 1,190,881 392,778 (798,103) 33% 2,008,296 1,615,518 Legislative & Regulatory
Compensation 290,237 228,907 (61,329) 79% 553,670 324,763 Contract services 226,022 130,943 (95,079) 58% 377,807 246,864 Operating expenses 4,842 3,217 (1,625) 66% 8,300 5,083
Total Legislative expenses 521,100 363,067 (158,033) 70% 939,777 576,710 Programs
Compensation 171,118 118,211 (52,907) 69% 293,345 175,134 Contract services 572,170 - (572,170) 0% 1,456,341 1,456,341 Operating expenses 1,114,053 362,859 (751,194) 33% 1,909,805 1,546,946 Total Programs expenses 1,857,341 481,070 (1,376,271) 26% 3,659,491 3,178,421 Total Operating Expenses 11,360,575 7,023,545 (4,337,030) 62% 18,580,202 11,556,657
NON-OPERATING REVENUES (EXPENSES)
Investment gains (losses) 1,435,500 3,494,183 2,058,683 2,871,000 (623,183) Miscellaneous income - 13,056 13,056 - (13,056)
Term Loan Debt Service (554,167) (532,908) 21,259 96% (950,000) (417,092) Additional Term Loan Principal (2,100,000) (2,100,000) - (2,100,000) - Line/Letter of Credit Fees (562,500) (206,134) 356,366 37% (750,000) (543,866) Financial Security Requirement (800,000) - 800,000 0% (800,000) (800,000) Nonoperating revenues (expenses), net (2,581,167) 668,197 3,249,363 (1,729,000) (2,397,197) Total Expenses and Non-Operating Activity 147,259,207 127,322,445 (19,936,763) 229,285,202 101,962,758 Contribution to/(from) Reserves $ 10,561,507 $ 33,812,767 $ 23,251,261 $ 13,529,798 $ (20,282,970)
BUDGETARY COMPARISON SCHEDULE
Seven Months Ended January 31, 2025
PIONEER COMMUNITY ENERGY
CCA PROGRAM
392156.1 Page 1 of 2
Staff Report – Item 1c
To: The Governing Board
From: David Ruderman, General Counsel
Item 1c: Consider Establishing Ad Hoc Energy Procurement Review Committee, Revising Authority for Executing Long-Term Power Procurement Contracts, and Amending the Energy Risk Management Policy
Date: 3/20/2025
RECOMMENDATION
Adopt a Resolution Establishing Ad Hoc Energy Procurement Review Committee, Revising Authority for Executing Long-Term Power Procurement Contracts, and Amending the Energy Risk Management Policy
BACKGROUND
On March 4, 2019, the Pioneer Board established an ad hoc Energy Procurement Review Committee (“EPRC”) comprised of three members of the Pioneer Board and the Executive Director. As an ad hoc committee, it did not have the power to “approve” contracts.
Board Resolution 2019-3 allowed those PPAs that were “reviewed and accepted” to be “Board approved” with the written approval of: (1) General Counsel, (2) Pioneer's outside counsel specializing power transactions and power contract law, and (3) Pioneer's Energy Procurement Review Committee. Resolution 2019-3 provided:
NOW THEREFORE, BE IT RESOLVED, by the Governing Board of Pioneer Community Energy, that the Executive Director or the Executive Director's designee is hereby authorized to execute long-term (ten years or more) purchase agreements, contracts, and confirmations, subject to the written approval of: 1) General Counsel, 2) Pioneer's outside counsel specializing power transactions and power contract law, and 3) Pioneer's Energy Procurement Review Committee.
Board Resolution 2021-1 amended Resolution 2019-3 to include PPAs that were over five years in tenor to be “approved” as described above (previously there was no resolution concerning PPAs between five and ten years).
This procedure for approving long-term PPAs was also codified in Pioneer’s Energy Risk Management Policy
ANALYSIS & DISCUSSION
Decisions concerning long-term energy contracts require consideration of sensitive market data, including energy prices, that have independent economic value from not being generally known and which would cause economic damage to Pioneer and its customers if it were to become known. As a result, Pioneer takes all reasonable measures to keep such information confidential, including its practice of convening the EPRC as an ad hoc committee that is not subject to the Brown Act.
To provide additional assurance that the EPRC functions in compliance with the Brown Act, General Counsel discussed Pioneer’s options with the current EPRC on March 12, 2025. Given the sensitive data the EPRC reviews, it recommended it continue as an ad hoc advisory subcommittee that is not subject to the Brown Act. A temporary advisory committee composed solely of less than a quorum of the legislative body that serves a limited or single purpose, that is not perpetual, and that will be dissolved once its specific task is completed is not subject to the Brown Act, as are groups advisory to a single decision-maker. Approval of the attached resolution attempts to address this law in the following manner:
Plf)NEER
COMMUNITY ENERGY
Agenda Item: X Agenda Date: 3/20/2025
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1. The EPRC as currently constituted would be dissolved and reestablished it for a limited period. The EPRC would function to review PPAs in calendar year 2025 and would be automatically dissolved by the first meeting of Pioneer’s Governing Board in January 2026. If Pioneer intends to enter into any long-term PPAs in 2026 after the EPRC is dissolved, the Board may create a new EPRC.
2. The 2025 EPRC would act in an advisory capacity to the CEO for all long-term contracts of five-years or more. Because of the EPRC’s advisory power, the resolution clarifies that the CEO or designee has authority to execute long-term PPAs of five years or more provided the CEO receive:
(a) the advice and recommendation of the EPRC; (b) the written approval of General Counsel; and (c) the written approval of Pioneer’s outside counsel specializing in power transactions and power contract law. Similarly, the resolution would adopt amendments to the Energy Risk Management Policy consistent with this authorization and repeal Resolutions 2019-3 and 2021-1 that provided the previous authorization.
3. The 2024 EPRC would be composed solely of less than a quorum of the Board. The proposed resolution lists five Board members that were previously approved by the Board.
STRATEGIC PLAN
The report supports the Operational Optimization goal.
FISCAL IMPACT
There is no fiscal impact from the recommendation.
ATTACHMENTS
1. Resolution Establishing Ad Hoc Energy Procurement Review Committee, Revising Authority for Executing Long-Term Power Procurement Contracts, and Amending the Energy Risk Management Policy
2. Attachment to Resolution: Redline showing changes made to Energy Risk Management Policy.
3. Resolution 2019-3 Establishing the Energy Procurement Review Committee
4. Resolution 2021-1 Amending Resolution 2019-3 to Define Long-Term Power Purchase Agreements as Five Years or Greater in Term
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Before the Governing Board of
Pioneer Community Energy
Resolution No.: ____________
The following Resolution was duly passed by the Governing Board of Pioneer Community Energy at a regular meeting held March 20, 2025, by the following vote on roll call:
Ayes:
Noes:
Absent:
Signed and approved by me after its passage.
______________________________
Chair of the Governing Board
Attest:
_______________________
Secretary
WHEREAS, Pioneer Community Energy ("Pioneer") has established a Community Choice Aggregation (CCA) Program to provide economic, environmental and social benefits to the residents, business and communities within its jurisdiction; and WHEREAS, the CCA Program has statutory authority to procure electrical power under Public Utilities Code Sections 331.1 and 366.2; and
WHEREAS, Pioneer procures power products for the purpose of ensuring safe, reliable and affordable electric generation services to its customers; and WHEREAS, to mitigate and manage risks associated with the procurement of power products, the Pioneer Board has adopted an Energy Risk Management Policy, which is subject to annual review and update; and
WHEREAS, the execution of contracts, agreements and confirmations for the procurement of electric power resources require a purchasing decision and execution of related contracts, agreements and confirmations within a limited period of time; and WHEREAS, pursuant to its Energy Risk Management Policy and Resolution 2019-1, the Chief Executive Officer (“CEO”) or the CEO’s designee is authorized to execute electric power purchase agreements, contracts, and confirmations, subject to approval of General Counsel, or the approval of outside counsel specializing in power transactions and power contracts, as may In the matter of: RESOLUTION ESTABLISHING AD
HOC ENERGY PROCUREMENT REVIEW
COMMITTEE, REVISING AUTHORITY FOR
EXECUTING LONG-TERM POWER
PROCUREMENT CONTRACTS, AND AMENDING
THE ENERGY RISK MANAGEMENT POLICY
2 392144.1
be determined appropriate and delegated by General Counsel, for any term, as long as the delivery period concludes five years or less from the date of execution of the contract; and WHEREAS, pursuant to its Energy Risk Management Policy and Resolutions 2019-3 and 2021-1, the CEO or CEO’s designee is authorized to execute long-term (five years or more) purchase agreements, contracts, and confirmations, subject to the written approval of: 1) General Counsel, 2) Pioneer's outside counsel specializing in power transactions and power contract law, and 3) Pioneer's Energy Procurement Review Committee; and WHEREAS, decisions concerning long-term energy contracts requires consideration of sensitive market data that have independent economic value from not being generally known and which would cause economic damage to Pioneer and its customers if it were to become known; and
WHEREAS, in light of Pioneer’s efforts at expansion and approval, subject to certain conditions, to do so, Pioneer will be exploring additional long-term power procurement contracts in the coming year.
NOW THEREFORE, BE IT RESOLVED, by the Governing Board of Pioneer Community Energy as follows:
1. The above recitals are true and correct.
2. Establishment of Energy Procurement Review Committee. a. The Energy Procurement Review Committee, as previously existing prior to the date of this Resolution, is hereby disestablished and Resolutions 2019-3 and 2021-1 are hereby repealed.
b. An ad hoc advisory subcommittee is hereby established to be comprised of the following Board members:
Board Member Member Agency
Ryan Carter Placerville
Alice Dowdin Calvillo (Vice-Chair) Auburn
Greg Janda Rocklin
Sean Lomen Colfax
Gary Petersen (Chair) Nevada City
c. This subcommittee shall be advisory to the CEO or the CEO’s designee and shall be referred to as the Energy Procurement Review Committee. It shall be charged with providing advice and recommendations to the CEO or the CEO’s designee on long-term (five years or more) Power Procurement Contracts, purchase agreements, contracts, and confirmations contemplated for the current calendar year. This subcommittee shall have such support from General Counsel and Pioneer staff as the CEO shall direct.
d. This subcommittee shall make its recommendations to the CEO or CEO’s designee from time to time as the CEO deems necessary but no later than the date of the first regular meeting of the Pioneer Governing Board in January 2026 and upon provision of its recommendations to the CEO or CEO’s designee, this subcommittee shall automatically be disestablished.
e. As a temporary, ad hoc committee advisory to the CEO and comprised of less than a quorum of the Governing Board, the Energy Procurement Review 3 392144.1
Committee may, but need not, comply with the Brown Act as authorized by Government Code section 54952, subdivision (b).
3. Authorization for CEO to Enter Into Long-Term Power Procurement Contracts and Revisions to Energy Risk Management Policy.
a. The CEO or CEO’s designee is hereby authorized to execute long-term (five years or more) Power Procurement Contracts, purchase agreements, contracts, and confirmations after receiving the advice and recommendation from the Energy Procurement Review Committee, and subject to the written approval of:
1) General Counsel, and 2) Pioneer's outside counsel specializing in power transactions and power contract law.
b. The Energy Risk Management Policy is hereby approved with the revisions indicated in the Policy attached hereto.
4. This Resolution shall take effect immediately upon its adoption.
Exhibit A: Energy Risk Management Policy
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ENERGY RISK
MANAGEMENT
POLICY
Revised: October 19, 2023
PICf)NEER
COMMUNITY ENERGY
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Table of Contents
Contents
Table of Contents.............................................................................................................................. 2 Section 1: POLICY OVERVIEW.................................................................................................................. 4
1.1 Background and Purpose .................................................................................................................................. 4
1.2 Scope................................................................................................................................................................. 4
1.3 Energy Risk Management Objective ................................................................................................................. 5
1.4 Policy Administration........................................................................................................................................ 5 Section 2: STRATEGY/GOALS AND RISK EXPOSURES................................................................ 6
2.1 Strategy/Policy Goals........................................................................................................................................ 6 a) Current Board-approved Procurement Strategy.............................................................................................. 6 b) Long-term Business Viability Goals .................................................................................................................. 6
2.2 Risk Exposures................................................................................................................................................... 7
2.2.1 Customer Opt-Out Risk .................................................................................................................................. 7
2.2.2 Market Risk .................................................................................................................................................... 7
2.2.3 Regulatory Risk............................................................................................................................................... 8
2.2.4 Volumetric Risk .............................................................................................................................................. 8
2.2.5 Model Risk...................................................................................................................................................... 9
2.2.6 Operational Risk............................................................................................................................................. 9
2.2.7 Counterparty Credit Risk................................................................................................................................ 9
2.2.8 Liquidity Risk ................................................................................................................................................ 10
2.3 Risk Measurement Methodology.................................................................................................................... 10 Section 3: BUSINESS PRACTICES......................................................................................................... 11
3.1 General Conduct ............................................................................................................................................ 11
3.2 Trading for Personal Accounts........................................................................................................................ 11
3.3 Adherence to Statutory Requirements........................................................................................................... 11
3.4 Transaction Type, Regions and Markets......................................................................................................... 12
3.5 Counterparty Suitability .................................................................................................................................. 13
3.6 System of Record ............................................................................................................................................ 13
3.7 Transaction Valuation ..................................................................................................................................... 13
3.8 Stress Testing .................................................................................................................................................. 13 392143.1 3
3.9 Trading Practices............................................................................................................................................. 13
3.10 Policy Compliance ......................................................................................................................................... 14 Section 4: ORG. STRUCTURE AND RESPONSIBILITIES ........................................................... 15
4.1 Risk Management Organizational Structure................................................................................................... 15
4.2 Governing Board ............................................................................................................................................. 15
4.3 Risk Oversight Committee (“ROC”)................................................................................................................. 15
4.4 Energy Procurement Review Committee (“EPRC”)......................................................................................... 16
4.5 Segregation of Duties...................................................................................................................................... 16
4.5.1 Front Office .................................................................................................................................................. 16
4.5.2 Middle Office................................................................................................................................................ 17
4.5.3 Back Office ................................................................................................................................................... 17 Section 5: DELEGATION OF AUTHORITY.......................................................................................... 19
5.1 Hedging Tolerances......................................................................................................................................... 19
5.1.1 Energy Procurement Tolerances.................................................................................................................. 19
5.1.2 Renewable Portfolio Standard..................................................................................................................... 20
5.1.3 Resource Adequacy...................................................................................................................................... 20
5.2 Monitoring, Reporting and Instances of Exceeding Risk Limits...................................................................... 20 Section 6: CREDIT POLICY........................................................................................................................ 21
6.1 Counterparty Credit Risk................................................................................................................................. 21
6.2 Counterparty Concentration........................................................................................................................... 21
6.3 Credit Review Exceptions................................................................................................................................ 22
6.4 Credit Exposure and Monitoring..................................................................................................................... 22 Section 7: POSITION TRACKING AND MANAGEMENT REPORTING .................................. 23 Section 8: POLICY REVISION PROCESS............................................................................................ 24
8.1 Acknowledgement of Policy............................................................................................................................ 24
8.2 Policy Interpretations...................................................................................................................................... 24 Appendix A: AUTHORIZED TRANSACTION TYPES, REGIONS AND MARKETS ............. 25 Appendix B: NEW TRANSACTION APPROVAL FORM.................................................................. 26 Appendix C: DEFINITIONS........................................................................................................................ 27 392143.1 4
Section 1: POLICY OVERVIEW
1.1 Background and Purpose
Pioneer Community Energy (“Pioneer”) is a public joint powers agency located within the geographic boundaries of El Dorado, Nevada, and Placer Counties.
Member agencies of Pioneer include the Unincorporated Counties of Placer and El Dorado, as well as the Cities of Auburn, Colfax, Grass Valley, Lincoln, Nevada City, Placerville, and Rocklin and the Town of Loomis.
Mission Statement: Pioneer is a locally owned provider of electricity – powering the communities we serve with competitive rates, reliable service, and a choice in energy options.
Pioneer will give its members an opportunity to procure electricity supplies and implement local programs that meet the goals of the local communities. Electricity procured to serve customers will continue to be delivered through Pacific Gas & Electrics’ (“PG&E”) transmission and distribution system.
Providing retail electric generation service to customers enrolled in the CCA program exposes Pioneer to risks such as customer opt-out risk, market risk, regulatory risk, volumetric risk, model risk, operational risk, counterparty credit risk and reputation risk.
This Energy Risk Management Policy (“Policy”) establishes Pioneer’s Energy Risk Management Program (“Program”) including risk management functions and procedures to manage the risks associated with power procurement activities.
The ultimate purpose of this Policy is to help Pioneer manage its risks by specifying management responsibilities, organizational structures, risk management standards, and operating controls and limits necessary to properly identify and manage Pioneer’s exposure to risk.
1.2 Scope
Unless otherwise explicitly stated in this Policy, or other policies approved by the Board, this Policy applies to all power procurement and related business activities that may impact the risk profile of Pioneer. This Policy documents the framework by which management and staff will:
• Identify and quantify risk
• Develop and execute procurement strategies
• Create a framework of controls and oversight
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• Monitor, measure, and report on the effectiveness of the Program
1.3 Energy Risk Management Objective
The objective of the Energy Risk Management Policy is to provide a framework for conducting procurement activities that will manage risks to support Pioneer meeting the goals listed in Section 2.1.
Pursuant to this Policy, Pioneer will identify and measure the magnitude of the risks to which it is exposed and contribute to the potential for not meeting identified goals.
1.4 Policy Administration
This Policy document shall be reviewed and approved by Pioneer’s Governing Board (“Board”) biennially.
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Section 2: STRATEGY/GOALS AND RISK EXPOSURES
2.1 Strategy/Policy Goals
a) Current Board-approved Procurement Strategy
The current Board approved Energy Procurement Strategy is to meet the State’s minimum renewable energy targets while procuring the remaining energy needs with less expensive power whether system power or other power sources to maintain competitive rates.
b) Long-term Business Viability Goals
To help ensure Pioneer’s long-term viability, this Program outlines the following business goals. Pioneer will establish metrics for modeling and measuring risk exposures for tracking performance relative to these goals. • Pioneer will target to maintain competitive retail rates compared to PG&E after adjusting for the Power Charge Indifference Adjustment (PCIA) and Franchise Fee.
• Pioneer will fund financial reserves with the following objectives:
o Establish long-term business sustainability
o Build collateral for power procurement activities
o Establish an investment grade credit rating
o Develop a source of funds for investment in generation and other local programs
o Stabilize rates and dampen year-to-year variability in procurement costs 0%
20%
40%
60%
80%
100%
120%
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
CA Renewable Portfolio Standards
Portfolio Composition Requirements
CA RPS Min % Non-Specified Power %
I I I I I I I I ■ ■
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The goals outlined above are incorporated into the financial models that are used in modeling and measuring risk exposures. It is important to note that the goals listed above are not intended to be a comprehensive list of goals for Pioneer.
2.2 Risk Exposures
The Program faces a range of risks during ongoing operations:
a) Customer Opt-Out risk
b) Market risk
c) Regulatory risk
d) Volumetric risk
e) Model risk
f) Operational risk
g) Counterparty credit risk
h) Liquidity risk
2.2.1 Customer Opt-Out Risk
Customer opt-out risk is the primary risk the CCA faces. Customer opt-out risk includes any condition or event that creates the potential for significant reductions in the CCA’s customer base, thereby increasing the potential for the CCA to not meet its Policy goals. A CCA faces other risks, but the ultimate concern is often how these other risks will affect customer opt-outs. This Policy addresses this paramount risk and secondary risk types listed below. These risks are not all inclusive but are identified as the risk factors driving the success of the CCA.
The most relevant measures of the success of this Policy include:
• Retail rate competitiveness with PG&E
• Financial reserve level
2.2.2 Market Risk
For this Policy, risk exposure is assessed on all the transactions (energy, environmental attributes, capacity, etc.) executed by Pioneer, as well as the risk exposure of open positions and the impacts of these uncertainties on the CCA’s load obligations. The following are components of Pioneer’s energy risk that will be monitored, assessed, and managed.
Market risk is the uncertainty of Pioneer’s financial performance due to variable commodity market prices (market price risk) and uncertain price relationships (basis risk). Variability in market prices creates uncertainty in Pioneer’s procurement costs and can materially impact Pioneer’s financial position. Market risk is managed by:
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• Regular measurement
• An active hedging program
• Execution of approved procurement and Congestion Revenue Right strategies • The limit structure set forth in this Policy
2.2.3 Regulatory Risk
CCAs remain a comparatively new legal entity in the state of California and are subject to an evolving legal and regulatory landscape. Additionally, Pioneer is in direct competition with PG&E, which face the risk of stranded investments in generating assets and power purchase agreements procured in the past to serve now departing CCA loads. That stranded investment risk is passed on to Pioneer’s customers through the PCIA which impacts Pioneer’s competitiveness. The competitive and regulatory landscape results in retail rate competitiveness risks that are unique to CCAs. Regulatory risk is managed by:
• Monitoring and analyzing legislative and regulatory proceedings impacting CCAs • Monitoring and reporting of actual and projected financial results including stressed financial results assuming a range of market and retail rate scenarios (both Pioneer and PG&E)
• Structuring procurement strategies with the objective function of maintaining a favorable retail rate savings relative to PG&E
• Actively participating in and representing CCA customer interests during regulatory and legislative proceedings
2.2.4 Volumetric Risk
Volumetric risk is the uncertainty of Pioneer’s financial performance due to variability in the quantity of retail load served by Pioneer. Load variability can be the result of customer opt-outs, temperature deviation from normal, unforeseen adoption of behind the meter generation by Pioneer customers, as well as local, state, and national economic conditions. Volumetric risk is managed by:
• Quantifying the variability of PG&E generation and PCIA rates • Quantifying variability in procurement costs
• Monitoring and adjusting for non-regulatory factors driving volumetric uncertainty (e.g. weather)
• Implement robust short- and long-term load and generation supply forecast methodologies, including regular monitoring of forecast accuracy through time and refining such forecasts, including by incorporating Pioneer’s actual load data into forecasts as such data becomes available
• Adopting a formal procurement strategy
• Implement a key accounts program and maintain strong relationships with local communities
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• Monitoring trends in customer onsite generation, economic shifts, electric vehicle adoption, and other factors that affect electric consumption
2.2.5 Model Risk
Model risk is the uncertainty of Pioneer’s financial performance due to potentially inaccurate or incomplete characterization of a transaction or power supply portfolio elements due to fundamental deficiencies in models and/or information systems.
Model risk is managed by:
• Developing industry standard financial risk assessment models • Reviewing model outputs as part of risk control framework • Conducting ongoing Pioneer staff education and participation in CCA industry forums
• Updating and improving models as additional information and expertise are acquired
2.2.6 Operational Risk
Operational risk is the uncertainty of Pioneer’s financial performance due to weaknesses in the quality, scope, content, or execution of human resources, technical resources, and/or operating procedures within Pioneer. Operational risk can also be exacerbated by fraudulent actions by employees or third parties or inadequate or ineffective controls. Operational risk is managed by:
• Ensuring adequate controls set forth in this Policy
• Conducting routine oversight of procurement activity
• Perform timely and effective reporting by management
• Training staff to reinforcing a culture of compliance to ERM policies • Conducting Ongoing and timely internal and external audits • Separate internal operations between Front, Middle and Back Office responsibilities as set forth herein
• Provide training to Board members to enhance oversight
2.2.7 Counterparty Credit Risk
Counterparty credit risk is the potential that a Counterparty will fail to perform or meet its obligations in accordance with terms agreed under contract. Pioneer’s exposure to counterparty credit risk is controlled by the limit controls set forth in the Credit Policy described in Section 6.
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2.2.8 Liquidity Risk
Pioneer manages liquidity risk through adherence to its loan and power purchase agreement credit covenants, limiting commitments to provide cash security consistent with its Credit Guidelines, ensuring it has adequate loan facilities, prudent cash and investment management, and adherence to its Reserve Policy.
Pioneer monitors its liquidity (defined as unrestricted cash, investments, and unused bank lines of credit) no less than weekly. Pioneer utilizes scenario and sensitivity analyses while preparing budget, rate, and pro forma analyses to identify potential financial outcomes and ensure sufficient liquidity under adverse conditions.
2.3 Risk Measurement Methodology
A vital element in Pioneer’s Energy Risk Management Policy is the regular identification, measurement, and communication of risk. Pioneer will routinely evaluate industry accepted benchmarks of quantified risk measurements to determine the applicability of such benchmark to Pioneer operations and performance. To effectively communicate risk, all risk management activities must be monitored frequently using risk measurement methodologies that quantify the risks associated with Pioneer’s energy procurement and performance relative to goals.
Risk measurement is the comparison of Pioneer’s projected retail rates to those of PG&E under expected and stressed scenarios. The rate comparison will be adjusted for actual and projected PCIA and Franchise Fee charges. Risk measurement methodologies shall be re-evaluated on a periodic basis to ensure Pioneer adjusts its methods to reflect the evolving regulatory and competitive landscape. The implementation of these methods shall be overseen and ratified by the Risk Oversight Committee (“ROC”).
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Section 3: BUSINESS PRACTICES
3.1 General Conduct
It is the policy of Pioneer that all personnel, including the Board, management, and agents, adhere to standards of integrity, ethics, conflicts of interest, compliance with statutory law and regulations and other applicable Pioneer standards of personal conduct while employed by or affiliated with Pioneer.
3.2 Trading for Personal Accounts
All Pioneer Directors, management, employees and agents participating in any transaction or activity within the coverage of this Policy are obligated to give notice in writing to Pioneer of any interest such person has in any counterparty that seeks to do business with Pioneer, and to identify any real or potential conflict of interest such person has or may have regarding any contract or transaction with Pioneer.
Conflicts of Interest shall be identified and defined as set forth in the Pioneer Conflict of Interest Code, as amended from time to time by the Board, which incorporates the Political Reform Act requirements for all employees advising Pioneer.
If there is any doubt as to whether a prohibited condition exists, then it is the employee’s responsibility to discuss the possible prohibited condition with her/his manager or supervisor.
3.3 Adherence to Statutory Requirements
Compliance is required with rules promulgated by the state of California, California Public Utilities Commission, California Energy Commission, Federal Energy Regulatory Commission (FERC), Commodity Futures Trading Commission (CFTC), and other regulatory agencies.
In addition to statutory requirements, the goals of the Energy Risk Policy are to comply with Governing Board's approved policies and objectives including the Strategic Plan, the Integrated Resource Plan ("IRP"), the Procurement Plan and Cash Reserve Policy including retail rate stability and competitiveness and the accumulation of financial reserves.
Congress, FERC, and CFTC have enacted laws, regulations and rules that prohibit, among other things, any action or course of conduct that actually or potentially operates as a fraud or deceit upon any person in connection with the purchase or sale of electric energy or transmission services. These laws also prohibit any person or entity from making any untrue statement of fact or omitting to state a material fact where the omission would make a statement misleading. Violation of these laws can lead to both civil and criminal actions against the individual involved, as well as 392143.1 12
Pioneer. This Policy is intended to comply with these laws, regulations, and rules and to avoid improper conduct on the part of anyone employed by Pioneer. These procedures may be modified from time to time by legal requirements, auditor recommendations, ROC requests and other considerations.
In the event of an investigation or inquiry by a regulatory agency, Pioneer may provide legal counsel to employees. However, Pioneer, with the consent of the Board, will not appoint legal counsel to an employee if Pioneer determines that the employee was not acting in good faith within the scope of employment.
3.4 Transaction Type, Regions, and Markets
Authorized transaction types, regions and markets are listed in Appendix A to this Policy. These transaction types, regions and markets are and shall continue to be focused on supporting Pioneer’s financial policies, including approved procurement strategies. New or non-standard transaction types may provide Pioneer with additional flexibility and opportunity but may also introduce new risks. Therefore, transaction types, regions and markets not included in Appendix A, or transactions within already approved transaction types that are substantially different from any prior transaction executed by Pioneer, must be approved by the ROC prior to execution using the process defined below.
When seeking approval for a new or non-standard transaction type, region, and/or market, a New Transaction Approval Form, as shown in Appendix B, should be drafted describing all significant elements of the proposed transaction. The proposal write-up should, at a minimum, include:
• A description of the benefit to Pioneer, including the purpose, function and expected cost impact (i.e., decrease costs, manage volatility, control variances, etc.);
• Identification of the in-house or external expertise that will manage and support the new or non- standard transaction type;
• Assessment of the transaction’s risks, including any material legal, tax or regulatory issues;
• How the exposures to the risks above will be managed; • Proposed valuation methodology (including pricing model, where appropriate); • Proposed reporting requirements, including any changes to existing procedures and system requirements necessary to support the new transaction type; • Proposed accounting methodology.
It is the responsibility of Pioneer’s Executive Director to ensure that relevant departments have reviewed the proposed transaction and that material issues are resolved prior to submittal to the ROC for approval. If approved, Appendix A to the Policy will be updated to reflect the new transaction type. 392143.1 13
3.5 Counterparty Suitability
Pioneer’s counterparty credit limits and approval processes will govern counterparty suitability for all transactions executed by Pioneer, consistent with the credit policies described in Section 6. Credit limits should be approved prior to execution of contracts.
3.6 System of Record
Pioneer will maintain a set of records for all transactions executed in association with Pioneer procurement activities. The records will be maintained in US dollars and transactions will be separately recorded and categorized by type of transaction.
This system of record shall be auditable.
3.7 Transaction Valuation
Transaction valuation and reporting of positions shall be based on objective, market-observed prices. Open positions should be valued (mark-to-market), based on consistent valuation methods and data sources. Whenever possible, mark-to-market valuations should be based on independent, publicly available market information and data sources.
3.8 Stress Testing
Stress testing shall also be used to examine the performance of the Pioneer portfolio under adverse conditions. Stress testing is used to understand the potential variability in Pioneer’s projected procurement costs, and resulting retail rate impacts and competitive positioning, associated with low probability events.
3.9 Trading Practices
It is the expressed intent of this Policy to prohibit the acquisition of risk beyond that encountered in the efficient optimization of Pioneer’s generation portfolio and execution of procurement strategies. As such, speculative transactions are prohibited. During developing operating plans and conducting procurement activities, Pioneer recognizes that expertise must be employed by staff, and it is not the intent of this Policy to restrain the legitimate application of analysis and market expertise in executing procurement strategies intended to minimize costs and risks within the constraints of this Policy. If any questions arise as to whether a transaction constitutes speculation, the ROC shall review the transaction(s) to determine whether the transaction would constitute speculation and document its findings.
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3.10 Policy Compliance
Pioneer’s Director of Finance and Administration will provide a quarterly report monitoring compliance with the limits established by this Policy. 392143.1 15
Section 4: ORG. STRUCTURE AND RESPONSIBILITIES
4.1 Risk Management Organizational Structure
Pioneer’s Energy Risk Management Policy ensures proper segregation of responsibility for policy approval, valuation and reporting, and trading.
4.2 Governing Board
Pioneer’s Board has the responsibility to review and approve this Policy. With approval, the Board assumes responsibility for understanding the risks Pioneer is exposed to due to CCA Program activity and how the policies outlined in this document help Pioneer manage the associated risks. The Board is also responsible to:
• Determine Pioneer’s strategic direction
• Understand the procurement strategy employed
• Approve risk exposures beyond the Executive Director’s authority
4.3 Risk Oversight Committee (“ROC”)
The ROC shall include the following voting members: Executive Director, Director of Finance and Administration, and General Counsel or their designees in case of their absence. The Technical Procurement Advisor (which may be an outside consultant or as otherwise selected by the Executive Director) shall be a non-voting member of the ROC. The Executive Director shall act as the chair of the ROC.
The ROC shall meet quarterly or as otherwise called to order by the Executive Director. The Executive Director shall make reports and seek approval for any substantive changes to this Policy from the Board.
The ROC shall from time to time adopt and bring current risk management guidelines defining in detail the internal controls, strategies, and processes for managing market risks incurred through or attendant upon wholesale trading, retail marketing, long-term contracting, CRR trading and load and generation scheduling.
The ROC shall specify the categories of transactions permitted and set risk limits for wholesale trading. The ROC shall receive and review information and reports regarding risk management, wholesale trading transactions, and the administration of supply contracts.
The ROC maintains the authority and responsibility to:
• Approve and ensure that all procurement strategies are consistent with this Policy;
• Determine if changes in procurement strategies are warranted; 392143.1 16
• Approve new transaction types, regions, markets and delivery points; • Understand financial and risk models;
• Understand counterparty credit review models and methods for setting and monitoring credit limits;
• Receive and review reports as described in this Policy; • Meet to review actual and projected financial results and potential risks; • Escalate to the Board with any risks beyond the Executive Director’s authority; • Review summaries of limit violations;
• Review the effectiveness of Pioneer's energy risk measurement methods; • Maintain this Policy; and
• Monitor regulatory and legislative activities.
4.4 Energy Procurement Review Committee (“EPRC”)
The EPRC is authorized to review and advise the Executive Director on the execution of energy contracts greater than five (5) years in length (from contract execution date). Long-term power (greater than five years) purchase agreements (“PPAs”) are periodically necessary to fulfill regulatory requirements (e.g., Renewables Portfolio Standard), and for portfolio optimization.
4.5 Segregation of Duties
Pioneer shall maintain a segregation of duties, also referred to as "separation of function", to the extent practicable to help manage and control the risks outlined in this Policy. Individuals responsible for legally binding the CCA to a transaction will not perform confirmation, clearing or settlement functions. Pioneer staff roles and responsibilities are divided into front-middle-back-office activities, as described below. In executing these functions, Pioneer may rely on third-party to assist in performing various functions to preserve the intent of the separation of functions.
4.5.1 Front Office
The Front Office is the responsibility of the Chief Operating Officer.
The Front Office has overall responsibility for:
a) Managing all commodity transactions;
b) Analysis of fundamentals affecting Pioneer’s net position; and c) Transacting within the limits of this Policy, and associated policies, to balance loads and resources, and maximize the value of Pioneer’s assets through the exercise of approved optimization strategies.
Other duties associated with these responsibilities include:
392143.1 17
a) Develop and analyze hedging products and procurement strategies and bring recommendations to the ROC, utilizing the net forward power positions prepared by Middle Office
b) Prepare each month a monthly operating plan for the prompt months that gives direction to the day-ahead and real-time trading and scheduling staff regarding the bidding and scheduling of Pioneer's resource portfolio in the California Independent System Operator (“CAISO”) market c) Develop, price, and negotiate purchase and/or sale transactions for energy Resource Adequacy, renewable, green-house gas free energy d) Keep accurate records of all transactions
4.5.2 Middle Office
The Middle Office is the responsibility of the Director of Finance and Administration.
The Middle Office provides independent market and credit risk oversight.
The Middle Office has primary responsibility for trading controls, including forward trading. Primary responsibilities include:
a) Calculating and maintaining the short-term load forecasts and disseminating to Front and Back Office
b) Estimating and publishing forward monthly power price curves for a minimum of the balance of the current year through the next calendar year c) Ensuring that Pioneer adheres to all risk policies and procedures in letter and intent.
d) Calculating and maintaining the net forward power positions of Pioneer. e) Assisting Back Office in calculating Counterparty Credit Exposure.
4.5.3 Back Office
The Back Office is the responsibility of the Director of Finance and Administration.
The Back Office provides support with a wide range of administrative activities necessary to execute and settle transactions and to support the risk control efforts (e.g., transaction entry and/or checking, data collection, billing, etc.) consistent with this Policy.
The Back Office has primary responsibility for ensuring agreement with counterparties regarding the terms of all trades, including forward trading. Primary responsibilities include:
a) Handling confirmation of all transactions (physical and financial) and reconciling differences with the trading counterparties b) Reviewing transaction confirmations for adherence to approved limits c) Calculating a monthly Counterparty Credit Exposure report d) Ensuring all trades have been entered into the appropriate system of record 392143.1 18
e) Carrying out month-end checkout of all physical and financial transactions each month
f) Implementing and enforcing credit policies and limits 392143.1 19
Section 5: DELEGATION OF AUTHORITY
With the approval of the Policy, the Pioneer Board is explicitly delegating approval of transactions to the Executive Director, in consultation with the EPRC, as outlined in the following table:
Authority Contract or PPA
Term Limit
Executive Director after
recommendation from the Energy
Procurement Review Committee
Over 60 months
Executive Director Up to 60 months
Additionally, to adapt to changing market conditions and to facilitate the daily operations of Pioneer, the Board is delegating authority to the Executive Director to execute administrative amendments to duly approved transactions where such amendment does not exceed the Executive Director’s delegated authority as set forth above (for clarity, amendments exceeding Term limits shall require consultation with the EPRC) and further reduces Pioneer’s risk in furtherance of this Policy. Such administrative amendments must be reported at the next available ROC meeting.
All procurement executed under the delegation above must align with the Pioneer’s underlying risk exposure (locational, volume and temporal) that is being hedged consistent with the approved Procurement Strategy.
The point of delivery for all products must be at a location on the CAISO transmission grid.
5.1 Hedging Tolerances
The Front Office is responsible for managing portfolio risks within the limits of this Policy. To reduce market price risk and increase retail rate certainty Front Office will execute transactions based on the following hedge targets.
5.1.1 Energy Procurement Tolerances
Period Minimum
Coverage*
Fiscal Year % of Forecasted Load
Year 1 (Current Year) 90%
Year 2 70%
Year 3 50%
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Year 4 30%
Year 5 10%
*Prior to start of Current Year
5.1.2 Renewable Portfolio Standard
With respect to purchases to meet the Renewable Portfolio Standard (RPS), Pioneer must comply with regulatory requirements and is guided by the Board for purchases above those requirements. Pioneer purchases should be staggered to accommodate regulatory uncertainty and changes in load and supply price risks, as well as diversified with respect to technologies.
5.1.3 Resource Adequacy
Pioneer must comply with the regulatory requirements for procurement of capacity products for Resource Adequacy ("RA"). Pioneer must comply for local resource adequacy for one to three years by October 31st of each year. Additionally, Pioneer must demonstrate, on a month-ahead basis, full compliance with its monthly RA obligations. Pioneer endeavors to purchase RA products over time to meet its obligations and to diversify its purchases between suppliers and market conditions.
5.2 Monitoring, Reporting and Instances of Exceeding Risk Limits The Middle Office is responsible for monitoring, and reporting compliance with, all limits within this Policy. If a limit or control is violated, the Middle Office will send notification to the Executive Director, Chief Operating Officer, and the ROC. The ROC will discuss the cause and potential remediation of the exceedance to determine next steps for curing the exceedance.
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Section 6: CREDIT POLICY
All Counterparties shall be evaluated for creditworthiness by the Middle Office prior to execution of any transaction and no less than annually thereafter. Additionally, Counterparties shall be reviewed if a change has occurred, or perceived to have occurred, in market conditions or in a company’s management or financial condition. This evaluation, including any recommended increase or decrease to a credit limit, shall be documented, and inclusive of all information supporting such evaluation in a credit file for the counterparty. A credit limit for a Counterparty will not be recommended or approved without first confirming the Counterparty’s senior unsecured or corporate credit rating from one of the nationally recognized rating agencies and/or performing a credit review or analysis of the Counterparty’s or guarantor’s financial statements. The credit analysis shall include, at a minimum, current audited financial statements or other supplementary data that indicates financial strength commensurate with an investment grade rating. Trade and banking references, and any other pertinent information, may also be used in the review process.
Once a counterparty is determined to be creditworthy, a credit limit will be proposed. Although a counterparty may qualify for a certain maximum credit limit, anticipated transaction volumes and other business factors may prompt Pioneer to select a lower limit that is considered more appropriate.
Counterparties that do not qualify for an unsecured Credit Limit must post an acceptable form of credit support or Prepayment prior to the execution of any transaction, unless otherwise approved by the Executive Director. A Counterparty may choose to provide a guarantee from a third party, provided the third party satisfies the criteria for a Credit Limit as outlined herein.
6.1 Counterparty Credit Risk
Pioneer evaluates and monitors the financial strength of service and energy providers consistent with Pioneer’s Credit Guidelines.
6.2 Counterparty Concentration
In addition to maintaining credit exposure limits, Pioneer staff shall strive to diversify transactions among counterparties. Pioneer staff shall document the business reasons (e.g., differences in offer price, lack of qualified suppliers, etc.) for awarding additional contracts to counterparties with high concentrations of Credit Exposure.
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6.3 Credit Review Exceptions
Counterparties not subject to the above credit review criteria include those associated with day-ahead and current day purchases or market index-based contracts where risks associated with market movements are minimal.
6.4 Credit Exposure and Monitoring
The Back Office will monitor the current credit exposure for each Counterparty with whom Pioneer transacts and include such information in the quarterly Risk Management Report. This report will be made available, reviewed, and communicated to the ROC pursuant to the reporting requirements outlined in Section 7.
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Section 7: POSITION TRACKING AND MANAGEMENT REPORTING
Minimum reporting requirements are shown below. The reports outlined below will be made available to ROC members:
• Quarterly Financial Model Forecast
Latest projected financial performance, marked to current market prices, and shown relative to financial goals.
• Quarterly Net Position Report
Prepare a forward net position report, not less frequently than quarterly, and report the results to the ROC.
• Quarterly Report to the Board
Update on activities and projected financial performance to be presented least quarterly at Pioneer Board meetings.
• Quarterly Counterparty Credit Exposure
Updates on the notional and mark-to-market exposure to each Pioneer counterparty individually by deal and in aggregate by counterparty.
Counterparty credit exposure reporting includes contingent collateral posting risks arising from changes in market prices and other factors. • Counterparty Credit Exposure
This report will show credit exposures for transactions executed by Pioneer. • Risk Analysis
This will include a stress test of financial forecast relative to financial goals. 392143.1 24
Section 8: POLICY REVISION PROCESS
Pioneer’s Energy Risk Management Policy will evolve over time as market and business factors change. At least on an annual basis, the ROC will review this Policy and associated procedures to determine if they should be amended, supplemented, or updated to account for changing business and/or regulatory requirements. If an amendment is warranted, the Policy amendment will be submitted to the Pioneer Board for approval.
8.1 Acknowledgement of Policy
Any Pioneer employee participating in any activity or transaction within the scope of this Policy shall sign on an annual basis or upon any revision, a statement approved by the ROC that such employee:
• Has read Pioneer’s Energy Risk Management Policy
• Understands the terms and agreements of said Policy
• Will comply with said Policy
• Understands that any violation of said Policy shall be subject to employee discipline up to and including termination of employment.
8.2 Policy Interpretations
Questions about the interpretation of any matters of this Policy should be referred to the Executive Director. All legal matters stemming from this Policy will be referred to General Counsel.
392143.1 25
Appendix A: AUTHORIZED TRANSACTION TYPES, REGIONS, AND
MARKETS
All transaction types listed below must be executed within the limits set forth in this Policy or Credit Risk Guidelines.
Over the Counter Products
• CAISO Market Products
o Day-ahead and Real-time Energy
o Congestion Revenue Rights
o Convergence bids
o Inter Scheduling Coordinator Transactions
o Tagging into and out of CAISO
• Physical Power Products
o Power
o Physical Resource Adequacy Capacity
• Physical Transmission Products
o Physical WECC transmission
• Physical Environmental Products
o Renewable Energy Credits
o Specified Source Power
o Carbon Allowances and Obligations
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Appendix B: NEW TRANSACTION APPROVAL FORM
New or Non-Standard Transaction
Approval Form
Prepared By:
Date:
New or Non-Standard Transaction Name:
Business Rationale and Risk Assessment:
• Product description – including the purpose, function, expected impact on net revenues (i.e. increase, manage volatility, control variances, etc.) and/or benefit to Pioneer
• Identification of the in-house or external expertise that will be relied upon to manage and support the new or non-standard transaction
• Assessment of the transaction’s risks, including any material legal, tax or regulatory issues
• How the exposures to the risks above will be managed by the limit structure • Proposed valuation methodology (including pricing model, where appropriate) • Proposed reporting requirements, including any changes to existing procedures and system requirements necessary to support the new product
• Proposed accounting methodology
• Proposed Middle Office workflows/methodology, including systems • Brief description of the responsibilities of various departments within Pioneer who will have any manner of contact with the new or non-standard transaction Reviewed by:
Chief Operating Officer Date
General Counsel Date
Executive Director Date
392143.1 27
Appendix C: DEFINITIONS
Back Office: That part of a trading organization which manages transaction accounting, confirmations, management reporting, contract administration and working capital management.
Bilateral Transaction: Any physical or financial transaction between two counterparties, neither of whom is an Exchange or market entity such as CAISO.
Cash Flow at Risk: A measure of the potential shortfall in cash flow from a specified level during a specified period of time at a specified confidence level.
CAISO: California Independent System Operator. CAISO operates a California bulk power transmission grid, administers the State’s wholesale electricity markets, and provides reliability planning and generation dispatch.
CCA: Community Choice Aggregator. CCAs allow local government agencies such as cities and/or counties to purchase and/or develop generation supplies on behalf of their residents, businesses, and municipal accounts.
CFTC: Commodity Futures Trading Commission. The CFTC is a U.S. federal agency that is responsible for regulating commodity futures and swap markets. It goals include the promotion of competitive and efficient futures markets and the protection of investors against manipulation, abusive trade practices and fraud.
Clearing: Clearing is the process of reconciling purchases and sales of a commodity, as well as the direct transfer of funds from one financial institution to another. The process validates the availability of funds, records the transfer, and in the case of financial securities, ensures the delivery to the buyer.
Commodity: A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade.
Confirmation Letter: A letter agreement between two counterparties that details the specific commercial terms (e.g., price, quantity and point of delivery) of a transaction.
Congestion Revenue Right: A point-to-point financial instrument in the Day-Ahead 392143.1 28
Energy Market that entitles the holder to receive compensation for or requires the holder to pay certain congestion related transmission charges that arise when the transmission system is congested.
Counterparty Credit Risk: The risk of financial loss resulting from a counterparty to a transaction failing to fulfill its obligations.
Counterparty Credit Exposure: This measures the known exposures and is represented by the sum of both (a)Realized exposure and (b) Forward exposure, as those terms are defined below:
Realized exposure: payable or receivable amount owed between counterparties, is a measurement of cash flow for billed and unbilled transactions.
Forward exposure: measure of current unrealized exposure and includes the measure of a counterparty’s incentive to fulfill contractual obligations. Forward exposure measures the risk associated with having a payment default or the need to replace a transaction in the event of delivery default.
Day-ahead Market: The short-term forward market for efficiently allocating transmission capacity and facilitating purchases and sales of energy and scheduled bilateral transactions; conducted by CAISO prior to the operating day.
Delivery point: the point at which a commodity will be delivered and received.
FERC: Federal Energy Regulatory Commission. FERC is a federal agency that regulates the interstate transmission of electricity, natural gas, and oil. FERC also reviews proposals to build liquefied natural gas terminals, interstate natural gas pipelines, as well as licenses hydroelectric generation projects.
Front Office: That part of a trading organization which solicits customer business, services existing customers, executes trades and ensures the physical delivery of commodities.
Hedging products: Hedging products means capacity, energy, renewable energy credits or other products related to a specific transaction.
Hedging Transaction: A transaction designed to reduce the financial exposure of a specific outstanding position or portfolio; “fully hedged” equates to complete elimination of the targeted risk and “partially hedged” implies a risk reduction of less than 100%.
IOU: An Investor-Owned Utility (IOU) is a business organization providing electrical and/or natural gas services to both retail and wholesale consumers and is managed as a private enterprise.
392143.1 29
Middle Office: That part of a trading organization that measures and reports on market risks, develops risk management policies, and monitors compliance with those policies, manages credit, and keeps management and the Board informed on risk management issues.
Speculation: Speculation is the act of trading an asset with the expectation of realizing financial gain resulting from a change in price in the asset being transacted. 392143.1
ENERGY RISK
MANAGEMENT
POLICY
Revised: October 19, 2023
PICf)NEER
COMMUNITY ENERGY
392143.1 2
Table of Contents
Contents
Table of Contents.............................................................................................................................. 2 Section 1: POLICY OVERVIEW.................................................................................................................. 4
1.1 Background and Purpose .................................................................................................................................. 4
1.2 Scope................................................................................................................................................................. 4
1.3 Energy Risk Management Objective ................................................................................................................. 5
1.4 Policy Administration........................................................................................................................................ 5 Section 2: STRATEGY/GOALS AND RISK EXPOSURES................................................................ 6
2.1 Strategy/Policy Goals........................................................................................................................................ 6 a) Current Board-approved Procurement Strategy.............................................................................................. 6 b) Long-term Business Viability Goals .................................................................................................................. 6
2.2 Risk Exposures................................................................................................................................................... 7
2.2.1 Customer Opt-Out Risk .................................................................................................................................. 7
2.2.2 Market Risk .................................................................................................................................................... 7
2.2.3 Regulatory Risk............................................................................................................................................... 8
2.2.4 Volumetric Risk .............................................................................................................................................. 8
2.2.5 Model Risk...................................................................................................................................................... 9
2.2.6 Operational Risk............................................................................................................................................. 9
2.2.7 Counterparty Credit Risk................................................................................................................................ 9
2.2.8 Liquidity Risk ................................................................................................................................................ 10
2.3 Risk Measurement Methodology.................................................................................................................... 10 Section 3: BUSINESS PRACTICES......................................................................................................... 11
3.1 General Conduct ............................................................................................................................................ 11
3.2 Trading for Personal Accounts........................................................................................................................ 11
3.3 Adherence to Statutory Requirements........................................................................................................... 11
3.4 Transaction Type, Regions and Markets......................................................................................................... 12
3.5 Counterparty Suitability .................................................................................................................................. 13
3.6 System of Record ............................................................................................................................................ 13
3.7 Transaction Valuation ..................................................................................................................................... 13
3.8 Stress Testing .................................................................................................................................................. 13 392143.1 3
3.9 Trading Practices............................................................................................................................................. 13
3.10 Policy Compliance ......................................................................................................................................... 14 Section 4: ORG. STRUCTURE AND RESPONSIBILITIES ........................................................... 15
4.1 Risk Management Organizational Structure................................................................................................... 15
4.2 Governing Board ............................................................................................................................................. 15
4.3 Risk Oversight Committee (“ROC”)................................................................................................................. 15
4.4 Energy Procurement Review Committee (“EPRC”)......................................................................................... 16
4.5 Segregation of Duties...................................................................................................................................... 16
4.5.1 Front Office .................................................................................................................................................. 16
4.5.2 Middle Office................................................................................................................................................ 17
4.5.3 Back Office ................................................................................................................................................... 17 Section 5: DELEGATION OF AUTHORITY.......................................................................................... 19
5.1 Hedging Tolerances......................................................................................................................................... 19
5.1.1 Energy Procurement Tolerances.................................................................................................................. 19
5.1.2 Renewable Portfolio Standard..................................................................................................................... 20
5.1.3 Resource Adequacy...................................................................................................................................... 20
5.2 Monitoring, Reporting and Instances of Exceeding Risk Limits...................................................................... 20 Section 6: CREDIT POLICY........................................................................................................................ 21
6.1 Counterparty Credit Risk................................................................................................................................. 21
6.2 Counterparty Concentration........................................................................................................................... 21
6.3 Credit Review Exceptions................................................................................................................................ 22
6.4 Credit Exposure and Monitoring..................................................................................................................... 22 Section 7: POSITION TRACKING AND MANAGEMENT REPORTING .................................. 23 Section 8: POLICY REVISION PROCESS............................................................................................ 24
8.1 Acknowledgement of Policy............................................................................................................................ 24
8.2 Policy Interpretations...................................................................................................................................... 24 Appendix A: AUTHORIZED TRANSACTION TYPES, REGIONS AND MARKETS ............. 25 Appendix B: NEW TRANSACTION APPROVAL FORM.................................................................. 26 Appendix C: DEFINITIONS........................................................................................................................ 27 392143.1 4
Section 1: POLICY OVERVIEW
1.1 Background and Purpose
Pioneer Community Energy (“Pioneer”) is a public joint powers agency located within the geographic boundaries of El Dorado, Nevada, and Placer Counties.
Member agencies of Pioneer include the Unincorporated Counties of Placer and El Dorado, as well as the Cities of Auburn, Colfax, Grass Valley, Lincoln, Nevada City, Placerville, and Rocklin and the Town of Loomis.
Mission Statement: Pioneer is a locally owned provider of electricity – powering the communities we serve with competitive rates, reliable service, and a choice in energy options.
Pioneer will give its members an opportunity to procure electricity supplies and implement local programs that meet the goals of the local communities. Electricity procured to serve customers will continue to be delivered through Pacific Gas & Electrics’ (“PG&E”) transmission and distribution system.
Providing retail electric generation service to customers enrolled in the CCA program exposes Pioneer to risks such as customer opt-out risk, market risk, regulatory risk, volumetric risk, model risk, operational risk, counterparty credit risk and reputation risk.
This Energy Risk Management Policy (“Policy”) establishes Pioneer’s Energy Risk Management Program (“Program”) including risk management functions and procedures to manage the risks associated with power procurement activities.
The ultimate purpose of this Policy is to help Pioneer manage its risks by specifying management responsibilities, organizational structures, risk management standards, and operating controls and limits necessary to properly identify and manage Pioneer’s exposure to risk.
1.2 Scope
Unless otherwise explicitly stated in this Policy, or other policies approved by the Board, this Policy applies to all power procurement and related business activities that may impact the risk profile of Pioneer. This Policy documents the framework by which management and staff will:
• Identify and quantify risk
• Develop and execute procurement strategies
• Create a framework of controls and oversight
392143.1 5
• Monitor, measure, and report on the effectiveness of the Program
1.3 Energy Risk Management Objective
The objective of the Energy Risk Management Policy is to provide a framework for conducting procurement activities that will manage risks to support Pioneer meeting the goals listed in Section 2.1.
Pursuant to this Policy, Pioneer will identify and measure the magnitude of the risks to which it is exposed and contribute to the potential for not meeting identified goals.
1.4 Policy Administration
This Policy document shall be reviewed and approved by Pioneer’s Governing Board (“Board”) biennially.
392143.1 6
Section 2: STRATEGY/GOALS AND RISK EXPOSURES
2.1 Strategy/Policy Goals
a) Current Board-approved Procurement Strategy
The current Board approved Energy Procurement Strategy is to meet the State’s minimum renewable energy targets while procuring the remaining energy needs with less expensive power whether system power or other power sources to maintain competitive rates.
b) Long-term Business Viability Goals
To help ensure Pioneer’s long-term viability, this Program outlines the following business goals. Pioneer will establish metrics for modeling and measuring risk exposures for tracking performance relative to these goals. • Pioneer will target to maintain competitive retail rates compared to PG&E after adjusting for the Power Charge Indifference Adjustment (PCIA) and Franchise Fee.
• Pioneer will fund financial reserves with the following objectives:
o Establish long-term business sustainability
o Build collateral for power procurement activities
o Establish an investment grade credit rating
o Develop a source of funds for investment in generation and other local programs
o Stabilize rates and dampen year-to-year variability in procurement costs 0%
20%
40%
60%
80%
100%
120%
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
CA Renewable Portfolio Standards
Portfolio Composition Requirements
CA RPS Min % Non-Specified Power %
I I I I I I I I ■ ■
392143.1 7
The goals outlined above are incorporated into the financial models that are used in modeling and measuring risk exposures. It is important to note that the goals listed above are not intended to be a comprehensive list of goals for Pioneer.
2.2 Risk Exposures
The Program faces a range of risks during ongoing operations:
a) Customer Opt-Out risk
b) Market risk
c) Regulatory risk
d) Volumetric risk
e) Model risk
f) Operational risk
g) Counterparty credit risk
h) Liquidity risk
2.2.1 Customer Opt-Out Risk
Customer opt-out risk is the primary risk the CCA faces. Customer opt-out risk includes any condition or event that creates the potential for significant reductions in the CCA’s customer base, thereby increasing the potential for the CCA to not meet its Policy goals. A CCA faces other risks, but the ultimate concern is often how these other risks will affect customer opt-outs. This Policy addresses this paramount risk and secondary risk types listed below. These risks are not all inclusive but are identified as the risk factors driving the success of the CCA.
The most relevant measures of the success of this Policy include:
• Retail rate competitiveness with PG&E
• Financial reserve level
2.2.2 Market Risk
For this Policy, risk exposure is assessed on all the transactions (energy, environmental attributes, capacity, etc.) executed by Pioneer, as well as the risk exposure of open positions and the impacts of these uncertainties on the CCA’s load obligations. The following are components of Pioneer’s energy risk that will be monitored, assessed, and managed.
Market risk is the uncertainty of Pioneer’s financial performance due to variable commodity market prices (market price risk) and uncertain price relationships (basis risk). Variability in market prices creates uncertainty in Pioneer’s procurement costs and can materially impact Pioneer’s financial position. Market risk is managed by:
392143.1 8
• Regular measurement
• An active hedging program
• Execution of approved procurement and Congestion Revenue Right strategies • The limit structure set forth in this Policy
2.2.3 Regulatory Risk
CCAs remain a comparatively new legal entity in the state of California and are subject to an evolving legal and regulatory landscape. Additionally, Pioneer is in direct competition with PG&E, which face the risk of stranded investments in generating assets and power purchase agreements procured in the past to serve now departing CCA loads. That stranded investment risk is passed on to Pioneer’s customers through the PCIA which impacts Pioneer’s competitiveness. The competitive and regulatory landscape results in retail rate competitiveness risks that are unique to CCAs. Regulatory risk is managed by:
• Monitoring and analyzing legislative and regulatory proceedings impacting CCAs • Monitoring and reporting of actual and projected financial results including stressed financial results assuming a range of market and retail rate scenarios (both Pioneer and PG&E)
• Structuring procurement strategies with the objective function of maintaining a favorable retail rate savings relative to PG&E
• Actively participating in and representing CCA customer interests during regulatory and legislative proceedings
2.2.4 Volumetric Risk
Volumetric risk is the uncertainty of Pioneer’s financial performance due to variability in the quantity of retail load served by Pioneer. Load variability can be the result of customer opt-outs, temperature deviation from normal, unforeseen adoption of behind the meter generation by Pioneer customers, as well as local, state, and national economic conditions. Volumetric risk is managed by:
• Quantifying the variability of PG&E generation and PCIA rates • Quantifying variability in procurement costs
• Monitoring and adjusting for non-regulatory factors driving volumetric uncertainty (e.g. weather)
• Implement robust short- and long-term load and generation supply forecast methodologies, including regular monitoring of forecast accuracy through time and refining such forecasts, including by incorporating Pioneer’s actual load data into forecasts as such data becomes available
• Adopting a formal procurement strategy
• Implement a key accounts program and maintain strong relationships with local communities
392143.1 9
• Monitoring trends in customer onsite generation, economic shifts, electric vehicle adoption, and other factors that affect electric consumption
2.2.5 Model Risk
Model risk is the uncertainty of Pioneer’s financial performance due to potentially inaccurate or incomplete characterization of a transaction or power supply portfolio elements due to fundamental deficiencies in models and/or information systems.
Model risk is managed by:
• Developing industry standard financial risk assessment models • Reviewing model outputs as part of risk control framework • Conducting ongoing Pioneer staff education and participation in CCA industry forums
• Updating and improving models as additional information and expertise are acquired
2.2.6 Operational Risk
Operational risk is the uncertainty of Pioneer’s financial performance due to weaknesses in the quality, scope, content, or execution of human resources, technical resources, and/or operating procedures within Pioneer. Operational risk can also be exacerbated by fraudulent actions by employees or third parties or inadequate or ineffective controls. Operational risk is managed by:
• Ensuring adequate controls set forth in this Policy
• Conducting routine oversight of procurement activity
• Perform timely and effective reporting by management
• Training staff to reinforcing a culture of compliance to ERM policies • Conducting Ongoing and timely internal and external audits • Separate internal operations between Front, Middle and Back Office responsibilities as set forth herein
• Provide training to Board members to enhance oversight
2.2.7 Counterparty Credit Risk
Counterparty credit risk is the potential that a Counterparty will fail to perform or meet its obligations in accordance with terms agreed under contract. Pioneer’s exposure to counterparty credit risk is controlled by the limit controls set forth in the Credit Policy described in Section 6.
392143.1 10
2.2.8 Liquidity Risk
Pioneer manages liquidity risk through adherence to its loan and power purchase agreement credit covenants, limiting commitments to provide cash security consistent with its Credit Guidelines, ensuring it has adequate loan facilities, prudent cash and investment management, and adherence to its Reserve Policy.
Pioneer monitors its liquidity (defined as unrestricted cash, investments, and unused bank lines of credit) no less than weekly. Pioneer utilizes scenario and sensitivity analyses while preparing budget, rate, and pro forma analyses to identify potential financial outcomes and ensure sufficient liquidity under adverse conditions.
2.3 Risk Measurement Methodology
A vital element in Pioneer’s Energy Risk Management Policy is the regular identification, measurement, and communication of risk. Pioneer will routinely evaluate industry accepted benchmarks of quantified risk measurements to determine the applicability of such benchmark to Pioneer operations and performance. To effectively communicate risk, all risk management activities must be monitored frequently using risk measurement methodologies that quantify the risks associated with Pioneer’s energy procurement and performance relative to goals.
Risk measurement is the comparison of Pioneer’s projected retail rates to those of PG&E under expected and stressed scenarios. The rate comparison will be adjusted for actual and projected PCIA and Franchise Fee charges. Risk measurement methodologies shall be re-evaluated on a periodic basis to ensure Pioneer adjusts its methods to reflect the evolving regulatory and competitive landscape. The implementation of these methods shall be overseen and ratified by the Risk Oversight Committee (“ROC”).
392143.1 11
Section 3: BUSINESS PRACTICES
3.1 General Conduct
It is the policy of Pioneer that all personnel, including the Board, management, and agents, adhere to standards of integrity, ethics, conflicts of interest, compliance with statutory law and regulations and other applicable Pioneer standards of personal conduct while employed by or affiliated with Pioneer.
3.2 Trading for Personal Accounts
All Pioneer Directors, management, employees and agents participating in any transaction or activity within the coverage of this Policy are obligated to give notice in writing to Pioneer of any interest such person has in any counterparty that seeks to do business with Pioneer, and to identify any real or potential conflict of interest such person has or may have regarding any contract or transaction with Pioneer.
Conflicts of Interest shall be identified and defined as set forth in the Pioneer Conflict of Interest Code, as amended from time to time by the Board, which incorporates the Political Reform Act requirements for all employees advising Pioneer.
If there is any doubt as to whether a prohibited condition exists, then it is the employee’s responsibility to discuss the possible prohibited condition with her/his manager or supervisor.
3.3 Adherence to Statutory Requirements
Compliance is required with rules promulgated by the state of California, California Public Utilities Commission, California Energy Commission, Federal Energy Regulatory Commission (FERC), Commodity Futures Trading Commission (CFTC), and other regulatory agencies.
In addition to statutory requirements, the goals of the Energy Risk Policy are to comply with Governing Board's approved policies and objectives including the Strategic Plan, the Integrated Resource Plan ("IRP"), the Procurement Plan and Cash Reserve Policy including retail rate stability and competitiveness and the accumulation of financial reserves.
Congress, FERC, and CFTC have enacted laws, regulations and rules that prohibit, among other things, any action or course of conduct that actually or potentially operates as a fraud or deceit upon any person in connection with the purchase or sale of electric energy or transmission services. These laws also prohibit any person or entity from making any untrue statement of fact or omitting to state a material fact where the omission would make a statement misleading. Violation of these laws can lead to both civil and criminal actions against the individual involved, as well as 392143.1 12
Pioneer. This Policy is intended to comply with these laws, regulations, and rules and to avoid improper conduct on the part of anyone employed by Pioneer. These procedures may be modified from time to time by legal requirements, auditor recommendations, ROC requests and other considerations.
In the event of an investigation or inquiry by a regulatory agency, Pioneer may provide legal counsel to employees. However, Pioneer, with the consent of the Board, will not appoint legal counsel to an employee if Pioneer determines that the employee was not acting in good faith within the scope of employment.
3.4 Transaction Type, Regions, and Markets
Authorized transaction types, regions and markets are listed in Appendix A to this Policy. These transaction types, regions and markets are and shall continue to be focused on supporting Pioneer’s financial policies, including approved procurement strategies. New or non-standard transaction types may provide Pioneer with additional flexibility and opportunity but may also introduce new risks. Therefore, transaction types, regions and markets not included in Appendix A, or transactions within already approved transaction types that are substantially different from any prior transaction executed by Pioneer, must be approved by the ROC prior to execution using the process defined below.
When seeking approval for a new or non-standard transaction type, region, and/or market, a New Transaction Approval Form, as shown in Appendix B, should be drafted describing all significant elements of the proposed transaction. The proposal write-up should, at a minimum, include:
• A description of the benefit to Pioneer, including the purpose, function and expected cost impact (i.e., decrease costs, manage volatility, control variances, etc.);
• Identification of the in-house or external expertise that will manage and support the new or non- standard transaction type;
• Assessment of the transaction’s risks, including any material legal, tax or regulatory issues;
• How the exposures to the risks above will be managed; • Proposed valuation methodology (including pricing model, where appropriate); • Proposed reporting requirements, including any changes to existing procedures and system requirements necessary to support the new transaction type; • Proposed accounting methodology.
It is the responsibility of Pioneer’s Executive Director to ensure that relevant departments have reviewed the proposed transaction and that material issues are resolved prior to submittal to the ROC for approval. If approved, Appendix A to the Policy will be updated to reflect the new transaction type. 392143.1 13
3.5 Counterparty Suitability
Pioneer’s counterparty credit limits and approval processes will govern counterparty suitability for all transactions executed by Pioneer, consistent with the credit policies described in Section 6. Credit limits should be approved prior to execution of contracts.
3.6 System of Record
Pioneer will maintain a set of records for all transactions executed in association with Pioneer procurement activities. The records will be maintained in US dollars and transactions will be separately recorded and categorized by type of transaction.
This system of record shall be auditable.
3.7 Transaction Valuation
Transaction valuation and reporting of positions shall be based on objective, market-observed prices. Open positions should be valued (mark-to-market), based on consistent valuation methods and data sources. Whenever possible, mark-to-market valuations should be based on independent, publicly available market information and data sources.
3.8 Stress Testing
Stress testing shall also be used to examine the performance of the Pioneer portfolio under adverse conditions. Stress testing is used to understand the potential variability in Pioneer’s projected procurement costs, and resulting retail rate impacts and competitive positioning, associated with low probability events.
3.9 Trading Practices
It is the expressed intent of this Policy to prohibit the acquisition of risk beyond that encountered in the efficient optimization of Pioneer’s generation portfolio and execution of procurement strategies. As such, speculative transactions are prohibited. During developing operating plans and conducting procurement activities, Pioneer recognizes that expertise must be employed by staff, and it is not the intent of this Policy to restrain the legitimate application of analysis and market expertise in executing procurement strategies intended to minimize costs and risks within the constraints of this Policy. If any questions arise as to whether a transaction constitutes speculation, the ROC shall review the transaction(s) to determine whether the transaction would constitute speculation and document its findings.
392143.1 14
3.10 Policy Compliance
Pioneer’s Director of Finance and Administration will provide a quarterly report monitoring compliance with the limits established by this Policy. 392143.1 15
Section 4: ORG. STRUCTURE AND RESPONSIBILITIES
4.1 Risk Management Organizational Structure
Pioneer’s Energy Risk Management Policy ensures proper segregation of responsibility for policy approval, valuation and reporting, and trading.
4.2 Governing Board
Pioneer’s Board has the responsibility to review and approve this Policy. With approval, the Board assumes responsibility for understanding the risks Pioneer is exposed to due to CCA Program activity and how the policies outlined in this document help Pioneer manage the associated risks. The Board is also responsible to:
• Determine Pioneer’s strategic direction
• Understand the procurement strategy employed
• Approve risk exposures beyond the Executive Director’s authority
4.3 Risk Oversight Committee (“ROC”)
The ROC shall include the following voting members: Executive Director, Director of Finance and Administration, and General Counsel or their designees in case of their absence. The Technical Procurement Advisor (which may be an outside consultant or as otherwise selected by the Executive Director) shall be a non-voting member of the ROC. The Executive Director shall act as the chair of the ROC.
The ROC shall meet quarterly or as otherwise called to order by the Executive Director. The Executive Director shall make reports and seek approval for any substantive changes to this Policy from the Board.
The ROC shall from time to time adopt and bring current risk management guidelines defining in detail the internal controls, strategies, and processes for managing market risks incurred through or attendant upon wholesale trading, retail marketing, long-term contracting, CRR trading and load and generation scheduling.
The ROC shall specify the categories of transactions permitted and set risk limits for wholesale trading. The ROC shall receive and review information and reports regarding risk management, wholesale trading transactions, and the administration of supply contracts.
The ROC maintains the authority and responsibility to:
• Approve and ensure that all procurement strategies are consistent with this Policy;
• Determine if changes in procurement strategies are warranted; 392143.1 16
• Approve new transaction types, regions, markets and delivery points; • Understand financial and risk models;
• Understand counterparty credit review models and methods for setting and monitoring credit limits;
• Receive and review reports as described in this Policy; • Meet to review actual and projected financial results and potential risks; • Escalate to the Board with any risks beyond the Executive Director’s authority; • Review summaries of limit violations;
• Review the effectiveness of Pioneer's energy risk measurement methods; • Maintain this Policy; and
• Monitor regulatory and legislative activities.
4.4 Energy Procurement Review Committee (“EPRC”)
The EPRC is authorized to review and advise the Executive Director on the execution of energy contracts greater than five (5) years in length (from contract execution date). Long-term power (greater than five years) purchase agreements (“PPAs”) are periodically necessary to fulfill regulatory requirements (e.g., Renewables Portfolio Standard), and for portfolio optimization.
4.5 Segregation of Duties
Pioneer shall maintain a segregation of duties, also referred to as "separation of function", to the extent practicable to help manage and control the risks outlined in this Policy. Individuals responsible for legally binding the CCA to a transaction will not perform confirmation, clearing or settlement functions. Pioneer staff roles and responsibilities are divided into front-middle-back-office activities, as described below. In executing these functions, Pioneer may rely on third-party to assist in performing various functions to preserve the intent of the separation of functions.
4.5.1 Front Office
The Front Office is the responsibility of the Chief Operating Officer.
The Front Office has overall responsibility for:
a) Managing all commodity transactions;
b) Analysis of fundamentals affecting Pioneer’s net position; and c) Transacting within the limits of this Policy, and associated policies, to balance loads and resources, and maximize the value of Pioneer’s assets through the exercise of approved optimization strategies.
Other duties associated with these responsibilities include:
392143.1 17
a) Develop and analyze hedging products and procurement strategies and bring recommendations to the ROC, utilizing the net forward power positions prepared by Middle Office
b) Prepare each month a monthly operating plan for the prompt months that gives direction to the day-ahead and real-time trading and scheduling staff regarding the bidding and scheduling of Pioneer's resource portfolio in the California Independent System Operator (“CAISO”) market c) Develop, price, and negotiate purchase and/or sale transactions for energy Resource Adequacy, renewable, green-house gas free energy d) Keep accurate records of all transactions
4.5.2 Middle Office
The Middle Office is the responsibility of the Director of Finance and Administration.
The Middle Office provides independent market and credit risk oversight.
The Middle Office has primary responsibility for trading controls, including forward trading. Primary responsibilities include:
a) Calculating and maintaining the short-term load forecasts and disseminating to Front and Back Office
b) Estimating and publishing forward monthly power price curves for a minimum of the balance of the current year through the next calendar year c) Ensuring that Pioneer adheres to all risk policies and procedures in letter and intent.
d) Calculating and maintaining the net forward power positions of Pioneer. e) Assisting Back Office in calculating Counterparty Credit Exposure.
4.5.3 Back Office
The Back Office is the responsibility of the Director of Finance and Administration.
The Back Office provides support with a wide range of administrative activities necessary to execute and settle transactions and to support the risk control efforts (e.g., transaction entry and/or checking, data collection, billing, etc.) consistent with this Policy.
The Back Office has primary responsibility for ensuring agreement with counterparties regarding the terms of all trades, including forward trading. Primary responsibilities include:
a) Handling confirmation of all transactions (physical and financial) and reconciling differences with the trading counterparties b) Reviewing transaction confirmations for adherence to approved limits c) Calculating a monthly Counterparty Credit Exposure report d) Ensuring all trades have been entered into the appropriate system of record 392143.1 18
e) Carrying out month-end checkout of all physical and financial transactions each month
f) Implementing and enforcing credit policies and limits 392143.1 19
Section 5: DELEGATION OF AUTHORITY
With the approval of the Policy, the Pioneer Board is explicitly delegating approval of transactions to the Executive Director, in consultation with the EPRC, as outlined in the following table:
Authority Contract or PPA
Term Limit
Executive Director after
recommendation from the Energy
Procurement Review Committee
Over 60 months
Executive Director Up to 60 months
Additionally, to adapt to changing market conditions and to facilitate the daily operations of Pioneer, the Board is delegating authority to the Executive Director to execute administrative amendments to duly approved transactions where such amendment does not exceed the Executive Director’s delegated authority as set forth above (for clarity, amendments exceeding Term limits shall require consultation with the EPRC) and further reduces Pioneer’s risk in furtherance of this Policy. Such administrative amendments must be reported at the next available ROC meeting.
All procurement executed under the delegation above must align with the Pioneer’s underlying risk exposure (locational, volume and temporal) that is being hedged consistent with the approved Procurement Strategy.
The point of delivery for all products must be at a location on the CAISO transmission grid.
5.1 Hedging Tolerances
The Front Office is responsible for managing portfolio risks within the limits of this Policy. To reduce market price risk and increase retail rate certainty Front Office will execute transactions based on the following hedge targets.
5.1.1 Energy Procurement Tolerances
Period Minimum
Coverage*
Fiscal Year % of Forecasted Load
Year 1 (Current Year) 90%
Year 2 70%
Year 3 50%
392143.1 20
Year 4 30%
Year 5 10%
*Prior to start of Current Year
5.1.2 Renewable Portfolio Standard
With respect to purchases to meet the Renewable Portfolio Standard (RPS), Pioneer must comply with regulatory requirements and is guided by the Board for purchases above those requirements. Pioneer purchases should be staggered to accommodate regulatory uncertainty and changes in load and supply price risks, as well as diversified with respect to technologies.
5.1.3 Resource Adequacy
Pioneer must comply with the regulatory requirements for procurement of capacity products for Resource Adequacy ("RA"). Pioneer must comply for local resource adequacy for one to three years by October 31st of each year. Additionally, Pioneer must demonstrate, on a month-ahead basis, full compliance with its monthly RA obligations. Pioneer endeavors to purchase RA products over time to meet its obligations and to diversify its purchases between suppliers and market conditions.
5.2 Monitoring, Reporting and Instances of Exceeding Risk Limits The Middle Office is responsible for monitoring, and reporting compliance with, all limits within this Policy. If a limit or control is violated, the Middle Office will send notification to the Executive Director, Chief Operating Officer, and the ROC. The ROC will discuss the cause and potential remediation of the exceedance to determine next steps for curing the exceedance.
392143.1 21
Section 6: CREDIT POLICY
All Counterparties shall be evaluated for creditworthiness by the Middle Office prior to execution of any transaction and no less than annually thereafter. Additionally, Counterparties shall be reviewed if a change has occurred, or perceived to have occurred, in market conditions or in a company’s management or financial condition. This evaluation, including any recommended increase or decrease to a credit limit, shall be documented, and inclusive of all information supporting such evaluation in a credit file for the counterparty. A credit limit for a Counterparty will not be recommended or approved without first confirming the Counterparty’s senior unsecured or corporate credit rating from one of the nationally recognized rating agencies and/or performing a credit review or analysis of the Counterparty’s or guarantor’s financial statements. The credit analysis shall include, at a minimum, current audited financial statements or other supplementary data that indicates financial strength commensurate with an investment grade rating. Trade and banking references, and any other pertinent information, may also be used in the review process.
Once a counterparty is determined to be creditworthy, a credit limit will be proposed. Although a counterparty may qualify for a certain maximum credit limit, anticipated transaction volumes and other business factors may prompt Pioneer to select a lower limit that is considered more appropriate.
Counterparties that do not qualify for an unsecured Credit Limit must post an acceptable form of credit support or Prepayment prior to the execution of any transaction, unless otherwise approved by the Executive Director. A Counterparty may choose to provide a guarantee from a third party, provided the third party satisfies the criteria for a Credit Limit as outlined herein.
6.1 Counterparty Credit Risk
Pioneer evaluates and monitors the financial strength of service and energy providers consistent with Pioneer’s Credit Guidelines.
6.2 Counterparty Concentration
In addition to maintaining credit exposure limits, Pioneer staff shall strive to diversify transactions among counterparties. Pioneer staff shall document the business reasons (e.g., differences in offer price, lack of qualified suppliers, etc.) for awarding additional contracts to counterparties with high concentrations of Credit Exposure.
392143.1 22
6.3 Credit Review Exceptions
Counterparties not subject to the above credit review criteria include those associated with day-ahead and current day purchases or market index-based contracts where risks associated with market movements are minimal.
6.4 Credit Exposure and Monitoring
The Back Office will monitor the current credit exposure for each Counterparty with whom Pioneer transacts and include such information in the quarterly Risk Management Report. This report will be made available, reviewed, and communicated to the ROC pursuant to the reporting requirements outlined in Section 7.
392143.1 23
Section 7: POSITION TRACKING AND MANAGEMENT REPORTING
Minimum reporting requirements are shown below. The reports outlined below will be made available to ROC members:
• Quarterly Financial Model Forecast
Latest projected financial performance, marked to current market prices, and shown relative to financial goals.
• Quarterly Net Position Report
Prepare a forward net position report, not less frequently than quarterly, and report the results to the ROC.
• Quarterly Report to the Board
Update on activities and projected financial performance to be presented least quarterly at Pioneer Board meetings.
• Quarterly Counterparty Credit Exposure
Updates on the notional and mark-to-market exposure to each Pioneer counterparty individually by deal and in aggregate by counterparty.
Counterparty credit exposure reporting includes contingent collateral posting risks arising from changes in market prices and other factors. • Counterparty Credit Exposure
This report will show credit exposures for transactions executed by Pioneer. • Risk Analysis
This will include a stress test of financial forecast relative to financial goals. 392143.1 24
Section 8: POLICY REVISION PROCESS
Pioneer’s Energy Risk Management Policy will evolve over time as market and business factors change. At least on an annual basis, the ROC will review this Policy and associated procedures to determine if they should be amended, supplemented, or updated to account for changing business and/or regulatory requirements. If an amendment is warranted, the Policy amendment will be submitted to the Pioneer Board for approval.
8.1 Acknowledgement of Policy
Any Pioneer employee participating in any activity or transaction within the scope of this Policy shall sign on an annual basis or upon any revision, a statement approved by the ROC that such employee:
• Has read Pioneer’s Energy Risk Management Policy
• Understands the terms and agreements of said Policy
• Will comply with said Policy
• Understands that any violation of said Policy shall be subject to employee discipline up to and including termination of employment.
8.2 Policy Interpretations
Questions about the interpretation of any matters of this Policy should be referred to the Executive Director. All legal matters stemming from this Policy will be referred to General Counsel.
392143.1 25
Appendix A: AUTHORIZED TRANSACTION TYPES, REGIONS, AND
MARKETS
All transaction types listed below must be executed within the limits set forth in this Policy or Credit Risk Guidelines.
Over the Counter Products
• CAISO Market Products
o Day-ahead and Real-time Energy
o Congestion Revenue Rights
o Convergence bids
o Inter Scheduling Coordinator Transactions
o Tagging into and out of CAISO
• Physical Power Products
o Power
o Physical Resource Adequacy Capacity
• Physical Transmission Products
o Physical WECC transmission
• Physical Environmental Products
o Renewable Energy Credits
o Specified Source Power
o Carbon Allowances and Obligations
392143.1 26
Appendix B: NEW TRANSACTION APPROVAL FORM
New or Non-Standard Transaction
Approval Form
Prepared By:
Date:
New or Non-Standard Transaction Name:
Business Rationale and Risk Assessment:
• Product description – including the purpose, function, expected impact on net revenues (i.e. increase, manage volatility, control variances, etc.) and/or benefit to Pioneer
• Identification of the in-house or external expertise that will be relied upon to manage and support the new or non-standard transaction
• Assessment of the transaction’s risks, including any material legal, tax or regulatory issues
• How the exposures to the risks above will be managed by the limit structure • Proposed valuation methodology (including pricing model, where appropriate) • Proposed reporting requirements, including any changes to existing procedures and system requirements necessary to support the new product
• Proposed accounting methodology
• Proposed Middle Office workflows/methodology, including systems • Brief description of the responsibilities of various departments within Pioneer who will have any manner of contact with the new or non-standard transaction Reviewed by:
Chief Operating Officer Date
General Counsel Date
Executive Director Date
392143.1 27
Appendix C: DEFINITIONS
Back Office: That part of a trading organization which manages transaction accounting, confirmations, management reporting, contract administration and working capital management.
Bilateral Transaction: Any physical or financial transaction between two counterparties, neither of whom is an Exchange or market entity such as CAISO.
Cash Flow at Risk: A measure of the potential shortfall in cash flow from a specified level during a specified period of time at a specified confidence level.
CAISO: California Independent System Operator. CAISO operates a California bulk power transmission grid, administers the State’s wholesale electricity markets, and provides reliability planning and generation dispatch.
CCA: Community Choice Aggregator. CCAs allow local government agencies such as cities and/or counties to purchase and/or develop generation supplies on behalf of their residents, businesses, and municipal accounts.
CFTC: Commodity Futures Trading Commission. The CFTC is a U.S. federal agency that is responsible for regulating commodity futures and swap markets. It goals include the promotion of competitive and efficient futures markets and the protection of investors against manipulation, abusive trade practices and fraud.
Clearing: Clearing is the process of reconciling purchases and sales of a commodity, as well as the direct transfer of funds from one financial institution to another. The process validates the availability of funds, records the transfer, and in the case of financial securities, ensures the delivery to the buyer.
Commodity: A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade.
Confirmation Letter: A letter agreement between two counterparties that details the specific commercial terms (e.g., price, quantity and point of delivery) of a transaction.
Congestion Revenue Right: A point-to-point financial instrument in the Day-Ahead 392143.1 28
Energy Market that entitles the holder to receive compensation for or requires the holder to pay certain congestion related transmission charges that arise when the transmission system is congested.
Counterparty Credit Risk: The risk of financial loss resulting from a counterparty to a transaction failing to fulfill its obligations.
Counterparty Credit Exposure: This measures the known exposures and is represented by the sum of both (a)Realized exposure and (b) Forward exposure, as those terms are defined below:
Realized exposure: payable or receivable amount owed between counterparties, is a measurement of cash flow for billed and unbilled transactions.
Forward exposure: measure of current unrealized exposure and includes the measure of a counterparty’s incentive to fulfill contractual obligations. Forward exposure measures the risk associated with having a payment default or the need to replace a transaction in the event of delivery default.
Day-ahead Market: The short-term forward market for efficiently allocating transmission capacity and facilitating purchases and sales of energy and scheduled bilateral transactions; conducted by CAISO prior to the operating day.
Delivery point: the point at which a commodity will be delivered and received.
FERC: Federal Energy Regulatory Commission. FERC is a federal agency that regulates the interstate transmission of electricity, natural gas, and oil. FERC also reviews proposals to build liquefied natural gas terminals, interstate natural gas pipelines, as well as licenses hydroelectric generation projects.
Front Office: That part of a trading organization which solicits customer business, services existing customers, executes trades and ensures the physical delivery of commodities.
Hedging products: Hedging products means capacity, energy, renewable energy credits or other products related to a specific transaction.
Hedging Transaction: A transaction designed to reduce the financial exposure of a specific outstanding position or portfolio; “fully hedged” equates to complete elimination of the targeted risk and “partially hedged” implies a risk reduction of less than 100%.
IOU: An Investor-Owned Utility (IOU) is a business organization providing electrical and/or natural gas services to both retail and wholesale consumers and is managed as a private enterprise.
392143.1 29
Middle Office: That part of a trading organization that measures and reports on market risks, develops risk management policies, and monitors compliance with those policies, manages credit, and keeps management and the Board informed on risk management issues.
Speculation: Speculation is the act of trading an asset with the expectation of realizing financial gain resulting from a change in price in the asset being transacted.
Before the Governing Board of
Pioneer Community Energy
In the matter of:
Authorizing The Executive Director To
Execute Long-Term (Ten Years Or More)
Power Purchase Contracts, Subject To The
Written Approval Of General Counsel,
Outside Power Contract Counsel And The
Pioneer's Energy Procurement Review
Committee.
Resolution No.: 2019-3
The following Resolution was duly passed by the Governing Board of Pioneer Community Energy at a regular meeting held August 5, 2019, by the following vote on roll call:
Ayes: Uhler, Maki, Gilbert, Holmes, Janda, Duncan, Douglass Noes: None
Absent: None
Signed and approved by me after its passage.
Chair, Board of the Governing Board
Attest:
~dt~,,____-
~etary
THE GOVERNING BOARD OF PIONEER COMMUNITY ENERGY DOES
HEREBY RESOLVE AS FOLLOWS:
WHEREAS, Pioneer Community Energy ("Pioneer") has established a_ Community Choice Aggregation (CCA) Program to provide economic, environmental and social benefits to the residents, business and communities within its jurisdiction; and
54 WHEREAS, the CCA Program has statutory authority to procure electrical power under Public Utilities Code Sections 331.1 and 366.2; and WHEREAS, Pioneer procures power products for the purpose of ensuring safe, reliable and affordable electric generation services to its customers; and WHEREAS, the CCA Program is required to comply with California legislative mandates and regulatory requirements related to the procurement of renewable energy resources, pursuant to AB 32 - the Global Warming Solutions Act; and WHEREAS, to mitigate and manage risks associated with the procurement of power products, the Pioneer Board has adopted an Energy Risk Management Policy, which is subject to annual review and update; and
WHEREAS, pursuant to its Energy Risk Management Policy, Pioneer has other procedures to ensure regulatory compliance for the procurement of specified power products; and
WHEREAS, Pioneer solicits and transacts directly with power market participants, including, but not limited to other load serving entities, electric power generators, brokers and other suppliers; and
WHEREAS, Pioneer does not enter into derivatives, and does not enter into other financial transactions, which are not directly related to the delivery of reliable and affordable electric generation services to its customers, and to meet legislative and regulatory mandates; and
WHEREAS, certain long-term contracts are subject to extended negotiation, and related commitments for the purchase of power products over 10 - 20 years; and WHEREAS, the execution of contracts, agreements and confirmations for the procurement of electric power resources require a purchasing decision and execution of related contracts, agreements and confirmations within a limited period of time; and WHEREAS, all contracts related to the procurement of long-term (ten years or more) renewable products are subject to the review and written approval of: 1) Pioneer's General Counsel, 2) Pioneer's outside counsel specializing in power transactions and power contracts, and 3) Pioneers Energy Procurement Review Committee; and
NOW THEREFORE, BE IT RESOLVED, by the Governing Board of Pioneer Community Energy, that the Executive Director or the Executive Director's designee is hereby authorized to execute long-term (ten years or more) purchase agreements, contracts, and confirmations, subject to the written approval of: 1) General Counsel, Pioneer's outside counsel specializing power transactions and power contract law, and 3) Pioneer's Energy Procurement Review Committee.
55 Before the Governing Board of
Pioneer Community Energy
In the matter of: A Resolution amending Resolution
2019-3 to redefine long-term power procurement
contracts as those contracts for more than five (5)
years.
Resolution No.: 2021-1
------
The following Resolution was duly passed by the Governing Board of Pioneer Community Energy at a regular meeting held January 21, 2021, by the following vote on roll call:
Ayes: Duncan, Gore, Dowdin Calvillo, Janda, Holmes.
Noes: None.
Absent: Karleskint, Mendoza.
Signed and approved by me after its passage.
~--F---=-----:...:::~~---~
A~~ ~~ ,
Secretary
WHEREAS, On March 4, 2019, your Board approved Resolution 2019-1 authorizing the Executive Director or the Executive Director's designee to execute electric power purchase agreements, contracts, and confirmations, subject to approval of General Counsel, or the approval of outside counsel specializing in power transactions and power contracts, as may be determined appropriate and delegated by General Counsel, for any term, as long as the delivery period concludes five years or less from the date of execution of the contract; and WHEREAS, On August 5, 2019, your Board approved Resolution 2019-3 authorizing the Executive Director or the Executive Director's designee to execute long-term (ten years or more) purchase agreements, contracts, and confirmations, subject to the written approval of: 1) General Counsel, Pioneer's outside counsel specializing in power transactions and power contract law, and 3) Pioneer's Energy Procurement Review Committee; and WHEREAS, In order to procure requisite capacity and to reduce costs, Pioneer's Executive Director (or designee) needs the flexibility to contract for energy products inclusive of five to ten years in tenor; and
WHEREAS, Neither resolutions 2019-1 nor 2019-3 contemplate the Executive Director's (or designee's) authority to execute energy contracts between five and ten years in tenor; BE IT RESOLVED, the Board of Pioneer Community Energy, State of California, hereby finds, declares, and resolves as follows:
1. The above recitals are true and correct.
2. The Governing Board hereby amends Resolution 2019-3 by removing the term "ten years or more" and replacing it with "more than five years." The final paragraph of the amended resolution shall read:
NOW THEREFORE, BE IT RESOLVED, by the Governing Board of Pioneer Community Energy, that the Executive Director or the Executive Director's designee is hereby authorized to execute long-term (more than five years) purchase agreements, contracts, and confirmations, subject to the written approval of: 1) General Counsel, Pioneer's outside counsel specializing power transactions and power contract law, and 3) Pioneer's Energy Procurement Review Committee.
3. No other changes shall be made to Resolution 2019-3, and all other provisions shall remain in full force and effect.
4. This Resolution shall take effect immediately upon its adoption.
Attachment: Resolution 2019-3
Before the Governing Board of
Pioneer Community Energy
In the matter of:
Authorizing The Executive Director To
Execute Long-Term (Ten Years Or More)
Power Purchase Contracts, Subject To The
Written Approval Of General Counsel,
Outside Power Contract Counsel And The
Pioneer's Energy Procurement Review
Committee.
Resolution No.: 2019-3
The following Resolution was duly passed by the Governing Board of Pioneer Community Energy at a regular meeting held August 5, 2019, by the following vote on roll call:
Ayes: Uhler, Maki, Gilbert, Holmes, Janda, Duncan, Douglass Noes: None
Absent: None
Signed and approved by me after its passage.
Chair, Board of the Governing Board
THE GOVERNING BOARD OF PIONEER COMMUNITY ENERGY DOES
HEREBY RESOLVE AS FOLLOWS:
WHEREAS, Pioneer Community Energy ("Pioneer") has established a_ Community Choice Aggregation (CCA) Program to provide economic, environmental and social benefits to the residents, business and communities within its jurisdiction; and
54 WHEREAS, the CCA Program has statutory authority to procure electrical power under Public Utilities Code Sections 331.1 and 366.2; and WHEREAS, Pioneer procures power products for the purpose of ensuring safe, reliable and affordable electric generation services to its customers; and WHEREAS, the CCA Program is required to comply with California legislative mandates and regulatory requirements related to the procurement of renewable energy resources, pursuant to AB 32 - the Global Warming Solutions Act; and WHEREAS, to mitigate and manage risks associated with the procurement of power products, the Pioneer Board has adopted an Energy Risk Management Policy, which is subject to annual review and update; and
WHEREAS, pursuant to its Energy Risk Management Policy, Pioneer has other procedures to ensure regulatory compliance for the procurement of specified power products; and
WHEREAS, Pioneer solicits and transacts directly with power market participants, including, but not limited to other load serving entities, electric power generators, brokers and other suppliers; and
WHEREAS, Pioneer does not enter into derivatives, and does not enter into other financial transactions, which are not directly related to the delivery of reliable and affordable electric generation services to its customers, and to meet legislative and regulatory mandates; and
WHEREAS, certain long-term contracts are subject to extended negotiation, and related commitments for the purchase of power products over 10 - 20 years; and WHEREAS, the execution of contracts, agreements and confirmations for the procurement of electric power resources require a purchasing decision and execution of related contracts, agreements and confirmations within a limited period of time; and WHEREAS, all contracts related to the procurement of long-term (ten years or more) renewable products are subject to the review and written approval of: 1) Pioneer's General Counsel, 2) Pioneer's outside counsel specializing in power transactions and power contracts, and 3) Pioneers Energy Procurement Review Committee; and
NOW THEREFORE, BE IT RESOLVED, by the Governing Board of Pioneer Community Energy, that the Executive Director or the Executive Director's designee is hereby authorized to execute long-term (ten years or more) purchase agreements, contracts, and confirmations, subject to the written approval of: 1) General Counsel, Pioneer's outside counsel specializing power transactions and power contract law, and 3) Pioneer's Energy Procurement Review Committee.
55
Staff Report – Item 2
To: The Governing Board
From: Paige Garcia, Programs Manager
Item 2: Ice Energy Storage Program
Date: 3/20/2025
RECOMMENDATION
Receive a presentation on the Ice Energy Storage Program.
COMMUNITY ADVICORY COMMITTEE RECOMMENDATION
On November 6, 2024, Pioneer Community Energy’s ad hoc Energy Procurement Review committee approved the power energy service agreement (“ESA”) with Ice Energy, a behind-the-meter distributed thermal battery that integrates with a building’s cooling system to reduce load and cost during peak hours.
On February 26, 2025, Pioneer Community Energy’s Community Advisory committee received a presentation on the Ice Energy program and approved of the program technology and design.
BACKGROUND
On November 6, 2024, the Energy Procurement Review committee approved the ESA for the Ice Energy program.
On December 12, 2024, Pioneer staff and Ice Energy had an initial kickoff meeting to begin discussing marketing and outreach plans as well as program details.
ANALYSIS & DISCUSSION
The Ice Energy storage program is an air conditioning energy efficiency program that aims to support local business owners saving money by reducing energy usage during peak hours of the day.
Customers can install an “Ice Bear” to their HVAC unit which will reduce Air Conditioning (“A/C”) load during peak times. The Ice Bear works by freezing ice during off-peak times when energy rates are lower. Then during peak times, when energy rates are more expensive, the A/C will move air through the Ice Bear, taking pressure off the A/C compressor by using the ice to cool the air. The cool air is then pushed through the building, cooling the area without using large amounts of electricity from the A/C unit.
The program will engage small and medium businesses, who will enter into a 20-year agreement with Ice energy for the Ice Bear unit. Ice Energy covers the cost of the system plus the installation and maintains ownership of the Ice Bear. Customers will pay for the lease of the system on their monthly bill, and Pioneer will pay for the resource adequacy from each complete project.
Based on the success of the Ice Bear program, future expansion of the program may include “Ice Cub” units utilizing the same technology but scaled for residential customers.
STRATEGIC PLAN
The recommendation supports Pioneer’s strategic goals:
• Be a community partner
• Fiscally Strong & Resilient
Plf)NEER
COMMUNITY ENERGY
Agenda Item: 2 Agenda Date: 3/20/2025
FISCAL IMPACT
Pioneer will pay for the resource adequacy generated from load shifting as defined by the California Energy Commission. The ESA is currently capped at 2.8 MWs with a minimum of 1 MW threshold of load shifting before payment is made.
ATTACHMENTS
There are no attachments with this item.
Staff Report – Item 3
To: The Governing Board
From: Paige Garcia, Program Manager
Item 3: Adopt a Resolution Approving and Authorizing the Chief Executive Officer to Execute an Agreement with AM Conservation for Program Fulfillment Services Date: 3/20/2025
RECOMMENDATION
Adopt a resolution approving and authorizing the Chief Executive Officer to execute an agreement with AM Conservation for program fulfillment services for a not-to-exceed amount of $500,000 and a term of one-year.
COMMUNITY ADVISORY COMMITTEE RECOMMENDATION
On November 13, 2024, the Community Advisory Committee reviewed the Home Energy Savings Toolkit program and approved of the program to have it brough before the Pioneer board.
BACKGROUND
In many instances, Pioneer customers believe we save them money, but with rising energy prices, energy affordability is an emerging issue. A common question Pioneer’s customer care team receives centers on how else customers can reduce their energy costs. While Pioneer supports our customers by having rates competitive with PG&E, providing a tangible, educational, and hands-on resource that can show customers the impact of their energy use in their home.
Several other CCAs, including Silicon Valley Clean Energy and Sonoma Clean Power, and county governments, such as San Mateo County, have energy toolkit programs that have been successful and well received by their customers.
Pioneer believes the Home Energy Savings Toolkit program can support customers, promote Pioneer’s values and mission, provide partnerships with local entities, and demonstrate that Pioneer is a community partner in the areas it serves.
ANALYSIS & DISCUSSION
The proposed energy efficiency program directly addresses customer concerns and helps support customers’ needs. In response to customer questions and concerns about additional ways to realize cost savings, Pioneer staff has created a program called the Home Energy Savings Toolkit. The Home Energy Savings Toolkit program is Pioneer’s 2025 flagship program that aims to educate, inspire, and empower Pioneer customers to become more energy efficient in their homes, thereby saving money.
The program has three components to support Pioneer’s customers:
1) Direct distribution: the first part of the program is a mailed home energy toolkit. Customers can sign up online to have a toolkit box shipped directly to their home. The toolkit will include items to create better energy efficiency in their homes, helping them save money. Items include LED battery backup bulbs, smart power strips, and weatherization items. These toolkits will also be distributed to low-income assistance programs and area food banks as part of its commitment to community partnership. 2) New move-ins to Pioneer’s territory: customers who purchase a new home will receive a smaller “welcome gift,” like a smart plug or LED bulb that familiarizes them with Pioneer and encourages them to go online to Plf)NEER
COMMUNITY ENERGY
Agenda Item: 3 Agenda Date: 3/20/2025
learn more about Pioneer and its programs, as well as to request a larger kit. These items will also be used at events or conferences for giveaways and to promote the larger toolkit. 3) Future expansion: Like other CCAs, Pioneer will work to build a partnership with local libraries to connect specialty toolkits with residents that want to do a deeper dive into their home’s energy use. These energy audit toolkits will have similar items to the mailed toolkits, but also include tools to check energy consumption, and leaks in their home. The libraries will manage the borrowing, replenishing, and monitoring of the toolkits, and report back to Pioneer based on an agreement to be set before the start of the program.
STRATEGIC PLAN
This item supports Pioneer’s strategic goal to Provide Exceptional Customer Experience.
FISCAL IMPACT
The fiscal impact of this item is $500,000 for the contract term of one year.
ATTACHMENTS
1. Resolution approving and authorizing the Chief Executive Officer to execute an agreement with AM Conservation for program fulfillment services for a not-to-exceed amount of $500,000 and a term of one-year. 391803.2
Before the Governing Board of
Pioneer Community Energy
Resolution No.: ____________
The following Resolution was duly passed by the Governing Board of Pioneer Community Energy at a regular meeting held March 20, 2025, by the following vote on roll call:
Ayes:
Noes:
Absent:
Signed and approved by me after its passage.
______________________________
Chair of the Governing Board
Attest:
_______________________
Secretary
WHEREAS, the Pioneer Community Energy Governing Board approved the Fiscal Year 2025- 2027 Strategic Plan in September 2024 which supports Programs that improve our customer’s lives, supports grid reliability, and does not impact rate competitiveness; WHEREAS, Pioneer and AM Conservation desire to execute an agreement with the goal of educating and supporting customers’ efforts to save energy, promote Pioneer awareness, and support local organizations with the Home Energy Savings Toolkit Program; WHEREAS, the Energy Savings Toolkit responds to and fulfills customer requests to learn how to save additional money on energy costs;
WHEREAS, the Energy Savings Toolkit strengthens Pioneer’s ability to be a strong community partner; and
WHEREAS, Pioneer’s current Fiscal Year 2024-25 budget includes sufficient resources to accommodate the proposed agreement with AM Conservation and no budgetary adjustment is required.
In the matter of: RESOLUTION APPROVING AND
AUTHORIZING THE CHIEF EXECUTIVE OFFICER
TO EXECUTE AN AGREEMENT WITH AM
CONSERVATION FOR PROGRAM SERVICES FOR
A NOT-TO-EXCEED AMOUNT OF $500,000 AND A
TERM OF ONE-YEAR
Resolution 2025-__
March 20, 2025
2 391803.2
BE IT RESOLVED, the Governing Board of Pioneer Community Energy, State of California, hereby finds, declares, and resolves as follows:
1. The above recitals are true and correct.
2. The Governing Board hereby authorizes the Chief Executive Officer to enter into an agreement with AM Conservation for program services, in substantially the form attached, for an amount not-to-exceed $500,000 with any minor clerical or clarifying changes proposed by the Chief Executive Officer and approved by General Counsel.
3. This Resolution shall take effect immediately upon its adoption.
Exhibit A: Consultant Services Agreement with AM Conservation. - 1 -
Administering Agency: Pioneer Community Energy
Contract No. _____________
Contract Description: ___________________________
CONSULTANT SERVICES AGREEMENT
THIS AGREEMENT is made at Rocklin, California, as of _____________, 2023, by and between Pioneer Community Energy, ("Pioneer"), and AM Conservation ("Consultant"), who agree as follows:
1. Services. Subject to the terms and conditions set forth in this Agreement, Consultant shall provide the services described in Exhibit A. Consultant shall provide said services at the time, place, and in the manner specified in Exhibit A.
2. Payment. Pioneer shall pay Consultant for services rendered pursuant to this Agreement at the time and in the amount set forth in Exhibit B. The payment specified in Exhibit B shall be the only payment made to Consultant for services rendered pursuant to this Agreement. Consultant shall submit all billings for said services to Pioneer in the manner specified therein, or, if no manner be specified, then according to the usual and customary procedures which Consultant uses for billing clients similar to Pioneer. The amount of the contract shall not exceed five hundred thousand Dollars ($500,000.00).
3. Facilities, Equipment and Other Materials, and Obligations of Pioneer. Unless otherwise specified in Exhibit C, Consultant shall, at its sole cost and expense, furnish all facilities, equipment, and other materials which may be required for furnishing services pursuant to this Agreement.
4. Exhibits. All exhibits referred to herein will be attached hereto and by this reference incorporated herein.
5. Time for Performance. Time is of the essence. Failure of Consultant to perform any services within the time limits set forth in Exhibit A shall constitute material breach of this contract.
6. Independent Consultant. At all times during the term of this Agreement, Consultant shall be an independent Consultant and shall not be an employee of Pioneer. Pioneer shall have the right to control Consultant only insofar as the results of Consultant's services rendered pursuant to this Agreement. Pioneer shall not have the right to control the means by which Consultant accomplishes services rendered pursuant to this Agreement.
7. Licenses, Permits, Etc. Consultant represents and warrants to Pioneer that it has all licenses, permits, qualifications, and approvals of whatsoever nature, which are legally required for Consultant to practice its profession. Consultant represents and warrants to Pioneer that Consultant shall, at its sole cost and expense, keep in effect or obtain at all times during the term of this Agreement, any licenses, permits, and approvals which are legally required for Consultant to practice its profession at the time the services are performed.
8. Time. Consultant shall devote such time to the performance of services pursuant to this Agreement as may be reasonably necessary for the satisfactory performance of Consultant's obligations pursuant to this Agreement. Neither party shall be considered in default of this Agreement to the extent performance is prevented or delayed by any cause, present or future, which is beyond the reasonable control of the party.
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9. Hold Harmless and Indemnification Agreement. At all times during the performance of this agreement, Consultant agrees to protect, defend, and indemnify Pioneer in accordance with the provisions contained in Exhibit D.
10. Insurance. Consultant shall file with Pioneer concurrently herewith a Certificate of Insurance, in companies acceptable to Pioneer, with a Best's Rating of no less than A-:VII, for the coverage shown in Exhibit D. All costs of complying with these insurance requirements shall be included in Consultant’s fee(s). These costs shall not be a “reimbursable” expense under any circumstances.
11. Consultant Not Agent. Except as Pioneer may specify in writing Consultant shall have no authority, express or implied, to act on behalf of Pioneer in any capacity whatsoever as an agent.
Consultant shall have no authority, express or implied pursuant to this Agreement to bind Pioneer to any obligation whatsoever.
12. Assignment Prohibited. Consultant may assign its rights and obligations under this Agreement only upon the prior written approval of Pioneer, said approval to be in the sole discretion of Pioneer.
13. Personnel.
A. Consultant shall assign only competent personnel to perform services pursuant to this Agreement. In the event that Pioneer, in its sole discretion, at any time during the term of this Agreement, desires the removal of any person or persons assigned by Consultant to perform services pursuant to this Agreement, including those members of the Project Team as explained below, Consultant shall remove any such person immediately upon receiving notice from Pioneer of the desire of Pioneer for removal of such person or persons.
B. Notwithstanding the foregoing, if specific persons are designated as the “Project Team” in Exhibit A, Consultant agrees to perform the work under this agreement with those individuals identified. Reassignment or substitution of individuals or subcontractors named in the Project Team by Consultant without the prior written consent of Pioneer shall be grounds for cancellation of the agreement by Pioneer, and payment shall be made pursuant to Section 15 (Termination) of this Agreement only for that work performed by Project Team members.
14. Standard of Performance. Consultant shall perform all services required pursuant to this Agreement in the manner and according to the standards observed by a competent practitioner of the profession in which Consultant is engaged in the geographical area in which Consultant practices its profession. All products of whatsoever nature which Consultant delivers to Pioneer pursuant to this Agreement shall be prepared in a substantial first class and workmanlike manner and conform to the standards or quality normally observed by a person practicing in Consultant's profession.
15. Termination.
A. Pioneer shall have the right to terminate this Agreement at any time by giving notice in writing of such termination to Consultant. In the event Pioneer shall give notice of termination, Consultant shall immediately cease rendering service upon receipt of such written notice, pursuant to this Agreement. In the event Pioneer shall terminate this Agreement:
1) Consultant shall deliver copies of all writings prepared by it pursuant to this Agreement. The term "writings" shall be construed to mean and include: handwriting, typewriting, printing, Photostatting, photographing, and every other means of recording - 3 -
upon any tangible thing any form of communication or representation, including letters, words, pictures, sounds, or symbols, or combinations thereof. 2) Pioneer shall have full ownership and control of all such writings delivered by Consultant pursuant to this Agreement.
3) Pioneer shall pay Consultant the reasonable value of services rendered by Consultant to the date of termination pursuant to this Agreement not to exceed the amount documented by Consultant and approved by Pioneer as work accomplished to date; provided, however, that in no event shall any payment hereunder exceed the amount of the agreement specified in Exhibit B, and further provided, however, Pioneer shall not in any manner be liable for lost profits which might have been made by Consultant had Consultant completed the services required by this Agreement. In this regard, Consultant shall furnish to Pioneer such financial information as in the judgment of Pioneer is necessary to determine the reasonable value of the services rendered by Consultant. The foregoing is cumulative and does not affect any right or remedy, which Pioneer may have in law or equity.
B. Consultant may terminate its services under this Agreement upon thirty- (30) working days’ advance written notice to Pioneer.
16. Contract Term. This agreement shall remain in place until the Scope of Services described in Exhibit A is completed, or until contract is terminated pursuant to Section 15 of this contract.
17. Non-Discrimination. Consultant shall not discriminate in its employment practices because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation in contravention of the California Fair Employment and Housing Act, Government Code section 12900 et seq.
18. Records. Consultant shall maintain, at all times, complete detailed records with regard to work performed under this agreement in a form acceptable to Pioneer, and Pioneer shall have the right to inspect such records at any reasonable time. Notwithstanding any other terms of this agreement, no payments shall be made to Consultant until Pioneer is satisfied that work of such value has been rendered pursuant to this agreement. However, Pioneer shall not unreasonably withhold payment and, if a dispute exists, the withheld payment shall be proportional only to the item in dispute.
19. Ownership of Information. All professional and technical information developed under this Agreement and all work sheets, reports, and related data shall become the property of Pioneer, and Consultant agrees to deliver reproducible copies of such documents to Pioneer on completion of the services hereunder. Pioneer agrees to indemnify and hold Consultant harmless from any claim arising out of reuse of the information for other than this project.
20. Waiver. One or more waivers by one party of any major or minor breach or default of any provision, term, condition, or covenant of this Agreement shall not operate as a waiver of any subsequent breach or default by the other party.
21. Conflict of Interest. Consultant certifies that no official or employee of Pioneer, nor any business entity in which an official of Pioneer has an interest, has been employed or retained to solicit or aid in the procuring of this agreement. In addition, Consultant agrees that no such person will be employed in the performance of this agreement without immediately notifying Pioneer.
22. Entirety of Agreement. This Agreement contains the entire agreement of Pioneer and Consultant with respect to the subject matter hereof, and no other agreement, statement, or promise made by - 4 -
any party, or to any employee, officer or agent of any party, which is not contained in this Agreement, shall be binding or valid.
23. Alteration. No waiver, alteration, modification, or termination of this Agreement shall be valid unless made in writing and signed by all parties, except as expressly provided in Section 15, Termination.
24. Governing Law. This Agreement is executed and intended to be performed in the State of California, and the laws of that State shall govern its interpretation and effect. Any legal proceedings on this agreement shall be brought under the jurisdiction of the Superior Court of County of Placer, State of California, and Consultant hereby expressly waives those provisions in California Code of Civil Procedure §394 that may have allowed it to transfer venue to another jurisdiction.
25. Notification. Any notice or demand desired or required to be given hereunder shall be in writing and deemed given when personally delivered or deposited in the mail, postage prepaid, and addressed to the parties as follows:
PIONEER COMMUNITY ENERGY: CONSULTANT:
Pioneer Community Energy ______________________
Attn: Eric Acedo ______________________
2510 Warren Drive Suite B ______________________
Rocklin, CA 95677 ______________________
[email protected]
Phone: (916) 758-8943 Phone: ________________
Any notice so delivered personally shall be deemed to be received on the date of delivery, and any notice mailed shall be deemed to be received five (5) days after the date on which it was mailed. - 5 -
Executed as of the day first above stated:
PIONEER COMMUNITY ENERGY
By: _____________________________
Printed Name/Title:
Approved as to Form – General Counsel:
By: _____________________________
Printed Name/Title:
[NAME OF CONSULTANT]
By: _____________________________
Name: _____________________________
Title: Owner
*If Consultant is a corporation, this agreement must be signed by a corporate officer, either the President or Vice President, unless an authenticated corporate resolution is attached delegating authority to a single officer or other officers to bind the corporation.
Exhibits
A. Scope of Services
B. Payment for Services Rendered
C. Facilities, Equipment and Other Obligations of Pioneer D. Hold Harmless Agreement and Insurance Requirements
-
to Consultant Services Agreement
EXHIBIT A
SCOPE OF SERVICES
to Consultant Services Agreement
EXHIBIT B
PAYMENT FOR SERVICES RENDERED
Maximum Limit & Fee Schedule
The total amount for services rendered not to exceed $____________.
And, if applicable
The maximum hourly rate shall not exceed $________ per hour.
Invoices
Invoices shall include a list of work performed by billable hour including date, hours and services provided.
Work performed by Consultant will be subject to final acceptance by Pioneer.
Reimbursable Expenses
Administrative, overhead, secretarial time or overtime, word processing, photocopying, in house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. Travel expenses must be authorized in advance in writing by Pioneer.
Submit all invoices to: Pioneer Community Energy
Attn: Eric Acedo
[email protected]
2510 Warren Drive, Suite B
Rocklin, CA 95677
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EXHIBIT C
FACILITIES, EQUIPMENT, AND OTHER
MATERIALS, AND OBLIGATIONS OF PIONEER
(Specify all equipment and facilities to be provided or made available by Pioneer, and any other Pioneer obligations.)
(typically)
NOT APPLICABLE
-
to Consultant Services Agreement
EXHIBIT D
HOLD HARMLESS AGREEMENT
AND INSURANCE REQUIREMENTS
1. HOLD HARMLESS AND INDEMNIFICATION AGREEMENT
The CONSULTANT hereby agrees to protect, defend, indemnify, and hold PIONEER free and harmless from any and all losses, claims, liens, demands, and causes of action of every kind and character including, but not limited to, the amounts of judgments, penalties, interest, court costs, legal fees, and all other expenses incurred by PIONEER arising in favor of any party, including claims, liens, debts, personal injuries, death, or damages to property (including employees or property of PIONEER) and without limitation by enumeration, all other claims or demands of every character occurring or in any way incident to, in connection with or arising directly or indirectly out of, the contract or agreement. CONSULTANT agrees to investigate, handle, respond to, provide defense for, and defend any such claims, demand, or suit at the sole expense of the CONSULTANT.
CONSULTANT also agrees to bear all other costs and expenses related thereto, even if the claim or claims alleged are groundless, false, or fraudulent. This provision is not intended to create any cause of action in favor of any third party against CONSULTANT or PIONEER or to enlarge in any way the CONSULTANT'S liability but is intended solely to provide for indemnification of PIONEER from liability for damages or injuries to third persons or property arising from CONSULTANT'S performance pursuant to this contract or agreement.
As used above, the term PIONEER means Pioneer or its officers, agents, employees, and volunteers.
2. INSURANCE:
CONSULTANT shall file with PIONEER concurrently herewith a Certificate of Insurance, in companies acceptable to PIONEER, with a Best's Rating of no less than A-:VII showing.
3. WORKER'S COMPENSATION AND EMPLOYERS LIABILITY INSURANCE:
Worker's Compensation Insurance shall be provided as required by any applicable law or regulation.
Employer's liability insurance shall be provided in amounts not less than one million dollars ($1,000,000) each accident for bodily injury by accident, one million dollars ($1,000,000) policy limit for bodily injury by disease, and one million dollars ($1,000,000) each employee for bodily injury by disease.
If there is an exposure of injury to CONSULTANT'S employees under the U.S. Longshoremen's and Harbor Worker's Compensation Act, the Jones Act, or under laws, regulations, or statutes applicable to maritime employees, coverage shall be included for such injuries or claims.
Each Worker's Compensation policy shall be endorsed with the following specific language:
Cancellation Notice - “This policy shall not be changed without first giving thirty (30) days prior written notice and ten (10) days prior written notice of cancellation for non-payment of premium to Pioneer Community Energy”.
Waiver of Subrogation - The workers’ compensation policy shall be endorsed to state that the workers’ compensation carrier waives its right of subrogation against Pioneer, its officers, directors,
to Consultant Services Agreement
officials, employees, agents or volunteers, which might arise by reason of payment under such policy in connection with performance under this agreement by the CONSULTANT.
CONSULTANT shall require all SUBCONTRACTORS to maintain adequate Workers' Compensation insurance. Certificates of Workers' Compensation shall be filed forthwith with Pioneer upon demand.
4. GENERAL LIABILITY INSURANCE:
A. Comprehensive General Liability or Commercial General Liability insurance covering all operations by or on behalf of CONSULTANT, providing insurance for bodily injury liability and property damage liability for the limits of liability indicated below and including coverage for:
(1) Contractual liability insuring the obligations assumed by CONSULTANT in this Agreement.
B. One of the following forms is required:
(1) Comprehensive General Liability;
(2) Commercial General Liability (Occurrence); or
(3) Commercial General Liability (Claims Made).
C. If CONSULTANT carries a Comprehensive General Liability policy, the limits of liability shall not be less than a Combined Single Limit for bodily injury, property damage, and Personal Injury Liability of:
→One million dollars ($1,000,000) each occurrence
→Two million dollars ($2,000,000) aggregate
D. If CONSULTANT carries a Commercial General Liability (Occurrence) policy:
(1) The limits of liability shall not be less than:
→One million dollars ($1,000,000) each occurrence (combined single limit for bodily injury and property damage)
→One million dollars ($1,000,000) for Products-Completed Operations →Two million dollars ($2,000,000) General Aggregate
(2) If the policy does not have an endorsement providing that the General Aggregate Limit applies separately, or if defense costs are included in the aggregate limits, then the required aggregate limits shall be two million dollars ($2,000,000).
E. Special Claims Made Policy Form Provisions:
CONSULTANT shall not provide a Commercial General Liability (Claims Made) policy without the express prior written consent of PIONEER, which consent, if given, shall be subject to the following conditions:
(1) The limits of liability shall not be less than:
to Consultant Services Agreement
→One million dollars ($1,000,000) each occurrence (combined single limit for bodily injury and property damage)
→One million dollars ($1,000,000) aggregate for Products Completed Operations →Two million dollars ($2,000,000) General Aggregate
(2) The insurance coverage provided by CONSULTANT shall contain language providing coverage up to one (1) year following the completion of the contract in order to provide insurance coverage for the hold harmless provisions herein if the policy is a claims-made policy.
Conformity of Coverages - If more than one policy is used to meet the required coverages, such as a separate umbrella policy, such policies shall be consistent with all other applicable policies used to meet these minimum requirements. For example, all policies shall be Occurrence Liability policies or all shall be Claims Made Liability policies, if approved by Pioneer as noted above. In no cases shall the types of polices be different.
5. ENDORSEMENTS:
Each Comprehensive or Commercial General Liability policy shall be endorsed with the following specific language:
A. "Pioneer Community Energy, its officers, agents, employees, and volunteers are to be covered as insured for all liability arising out of the operations by or on behalf of the named insured in the performance of this Agreement."
B. "The insurance provided by the Consultant, including any excess liability or umbrella form coverage, is primary coverage to Pioneer Community Energy with respect to any insurance or self-insurance programs maintained by Pioneer Community Energy and no insurance held or owned by Pioneer Community Energy shall be called upon to contribute to a loss." C. “This policy shall not be changed without first giving thirty (30) days prior written notice and ten (10) days prior written notice of cancellation for non-payment of premium to Pioneer Community Energy.”
6. AUTOMOBILE LIABILITY INSURANCE:
Automobile Liability insurance covering bodily injury and property damage in an amount no less than one million dollars ($1,000,000) combined single limit for each occurrence.
Covered vehicles shall include owned, non-owned, and hired automobiles/trucks.
7. PROFESSIONAL LIABILITY INSURANCE:
Professional liability insurance which includes coverage for the professional acts, errors and omissions of Consultant in the amount of at least $1,000,000.
8. PRIVACY AND CYBERSECURITY LIABILITY INSURANCE:
Privacy and cybersecurity liability (including costs arising from data destruction, hacking or intentional breaches, crisis management activity related to data breaches, and legal claims for security breach, privacy violations, and notification costs of at least $5,000,000 US per occurrence.
to Consultant Services Agreement
9. ADDITIONAL REQUIREMENTS:
Premium Payments - The insurance companies shall have no recourse against PIONEER and funding agencies, its officers and employees or any of them for payment of any premiums or assessments under any policy issued by a mutual insurance company.
Policy Deductibles - The CONSULTANT shall be responsible for all deductibles in all of the CONSULTANT’s insurance policies. The maximum amount of allowable deductible for insurance coverage required herein shall be $25,000.
CONSULTANT’s Obligations - CONSULTANT’s indemnity and other obligations shall not be limited by the foregoing insurance requirements and shall survive the expiration of this agreement.
Verification of Coverage - CONSULTANT shall furnish Pioneer with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this clause. All certificates and endorsements are to be received and approved by Pioneer before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the CONSULTANT’s obligation to provide them. Pioneer reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.
Material Breach - Failure of the CONSULTANT to maintain the insurance required by this agreement, or to comply with any of the requirements of this section, shall constitute a material breach of the entire agreement.
Staff Report – Item 4
To: The Governing Board
From: Paige Garcia, Program Manager
Item 4: Adopt a Resolution Approving and Authorizing the Chief Executive Officer to Execute an Agreement with Aiqueous LLC dba Brillion (“Brillion”) for Program Software Date: 3/20/2025
RECOMMENDATION
Adopt a resolution approving and authorizing the Chief Executive Officer to execute an agreement between Pioneer Community Energy (“Pioneer”) and Aiqueous LLC dba Brillion (“Brillion”) for Program software for an amount not-to-exceed $510,000 and term of three-years.
BACKGROUND
On November 14, 2022, a contract was executed with Aiqueous for contact management software solution.
Aiqueous was selected after receiving three quotes from similar vendors.
On November 13, 2024, the contract term ended, and Pioneer chose to restart work with Brillion and their new software solution as a program management tool to ensure the accurate and comprehensive information management needed for the administration of Pioneer’s current and future programs.
ANALYSIS & DISCUSSION
crmOrbit, Inc (dba “Brillion”, previously dba “Brillion Fulfill”) was incorporated in the State of California in October of 2005 and has been the premier Salesforce.com partner for utility demand-side management (DSM) program support for 20 years. Designing and delivering their Salesforce-based energy efficiency (EE)/DSM program management platform has been 100% of their business focus since 2007. In July 2023, crmOrbit, Inc joined forces with Apogee Interactive – a provider of customer engagement, education, and communication software – and Aiqueous – a provider of customer relationship and program management software – as a premier customer relationship and engagement platform for utilities and utility service providers.
Brillion’s team and customers have deployed thousands of electric, natural gas, electrification and water conservation programs in the United States and Canada. They are a collective team of experts in DSM program management and have a thorough understanding of the California DSM landscape; they provide a superior DSM program management platform to meet Pioneer’s current and expanding energy conservation & optimization programs.
The Brillion Fulfill platform is currently deployed by some of the largest investor-owned utilities in North America:
Eversource Energy, Enbridge Gas, Xcel Energy, and Dominion Energy, as well as other utilities and EE organizations such as EfficiencyOne and Energize Delaware.
Why Pioneer Needs Brillion
As customers express interest in different types of programs, and as Pioneer expands programs to meet customer needs, the Brillion data management program will create significantly greater efficiency through automation and project tracking for the anticipated tens of thousands of transactions. Based on workload and staffing allocation from 2024, Pioneer expects that access to Brillion can potentially avoid having to hire two full-time employees (FTEs) during the course of the contract.
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COMMUNITY ENERGY
Agenda Item: 4 Agenda Date: 3/20/2025
Pioneer Community Energy has previously worked with Brillion to create a key accounts management solution, and Pioneer anticipates continuing to doing so in the future. This will be particularly important as Pioneer moves through the expansion effort. The functionality, ease of use, and optimization tools that are included in the software are some of the many reasons that Pioneer has selected to continue working with Brillion for the next phase of this software development.
With seven current programs underway and more anticipated in the future, it is imperative that Pioneer create and maintain operational efficiency for the thousands of customers who participate in more programs. Brillion also allows a customer facing application and portal, making it easier for customers to participate in programs and providing greater transparency into the program process.
As programs continue to grow, staff time could be monopolized by reviewing program participation and information without an automated resource. Brillion will be used to track program progress in a singular place to produce the needed specificity in reports, and better tracking and accountability to program partners. Brillion also allows Pioneer to automate much of the manual work that goes into processing customer applications and rebates. For example:
Current AC Tune-up program process Brillion AC Tune-up program process Customer submits application via online form and
emails in supporting document.
Customer submits application and supporting
document via Brillion platform.
Staff reviews application, confirms if applicant is a
Pioneer customer.
Brillion automatically confirms if applicant is a Pioneer customer and if application is complete.
If changes or updates are needed, staff emails
customer to request changes.
If changes or updates are needed, Brillion sends
template email to customers to update.
Staff receives and processes the updates then
changes the application for the customer.
Customer logs into application and make changes.
Staff is automatically notified of update.
Staff confirms application is now correct and notifies
customer that they are approved and will be ready for
payment.
Once application is complete, customer is moved
forward to processing rebate and template
communication is sent to customer.
Staff prepares payment report for finance team. Brillion automatically pulls customers ready for payment and prepares report for payment.
Rebate is sent to customer. Rebate is sent to customer
Staff updates CRM manually inputting note and
uploading documents as reference for customer care.
Brillion saves customer profile and documents and is
tracked from program to program and year to year.
Total estimated staff time: 30 min. per application,
1,750 hours over five-month program cycle.
Total estimated staff time: 5 minutes per application,
291 hours over five-month program cycle.
It is important to note that our current CRM, managed by Calpine, cannot provide the level of detail needed to effectively manage program implementation and tracking.
Request for Proposal (RFP)
Pioneer did not go through an RFP process because of our existing contract with Aiqueous, the consolidation of the three leading companies with specific program data management capabilities, and lack of other comparable companies with these capabilities. Several other CCAs and utilities use and recommend Brillion for program data management.
STRATEGIC PLAN
This item supports Pioneer’s strategic goals to provide Exceptional Customer Experience and Operational Optimization.
Agenda Item: 4 Agenda Date: 3/20/2025
FISCAL IMPACT
The fiscal impact of this item is $510,000 over the three-year contract term, with Year 1 including a one-time fee associated with creating the Pioneer specific software and customer interface.
SaaS Solution & Related Services Term Fees
Brillion Fulfill software and licensing 3 years
$100,000 Year 1
$104,000 Year 2
$108,160 Year 3
Premier Support Services 1 year $20,000 Year 1
Implementation Services to import data, create internal and external portals, and report building 1 year $166,760
Year 1 only
Legacy Data Import Contingency
Budget $8,800
TOTAL
$507,720
An upfront three-year contract represents savings over a year-to-year option. Staff believe the initial investment warrants a longer-term contract commitment.
ATTACHMENTS
1. Resolution approving and authorizing the Chief Executive Officer to execute an agreement with Aiqueous LLC dba Brillion (“Brillion”) for Program software for an amount not-to-exceed $510,000 and a term of three-years.
391818.2
Before the Governing Board of
Pioneer Community Energy
Resolution No.: ____________
The following Resolution was duly passed by the Governing Board of Pioneer Community Energy at a regular meeting held March 20, 2025, by the following vote on roll call:
Ayes:
Noes:
Absent:
Signed and approved by me after its passage.
______________________________
Chair of the Governing Board
Attest:
_______________________
Secretary
WHEREAS, Pioneer and Aiqueous LLC dba Brillion (“Brillion”) desire to execute an agreement with the goal of supporting Pioneer staff to provide improved program tracking, reporting, and customer support;
WHEREAS, customer enthusiasm and support for programs remains consistently high, and there is strong anticipation that programs will expand during the coming years; WHEREAS, the growth of programs requires efforts to ensure the responsiveness and efficiency needed for customers to have a positive experience; and WHEREAS, the Pioneer’s current Fiscal Year 2024-25 budget includes sufficient resources to accommodate the proposed agreement with Brillion and no budgetary adjustment is required.
BE IT RESOLVED, the Governing Board of Pioneer Community Energy, State of California, hereby finds, declares, and resolves as follows:
1. The above recitals are true and correct.
In the matter of: RESOLUTION APPROVING AND
AUTHORIZING THE CHIEF EXECUTIVE OFFICER
TO EXECUTE AN AGREEMENT WITH AIQUEOUS
LLC DBA BRILLION FOR PROGRAM SERVICES
FOR AN AMOUNT NOT-TO-EXCEED $510,000 FOR
A TERM OF THREE YEARS
Resolution 2025-
March 20, 2025
2 391818.2
2. The Governing Board hereby authorizes the Chief Executive Officer to enter into an agreement with Aiqueous LLC dba Brillion (“Brillion”) for program services for an amount not-to-exceed $510,000 for the three-year term of the contract with any minor clerical or clarifying changes proposed by the Chief Executive Officer and approved by General Counsel.
3. This Resolution shall take effect immediately upon its adoption.
Exhibits:
A. Consultant Services Agreement with Aiqueous LLC dba Brillion (“Brillion”) B. Scope of work associated with the consultancy services agreement - 5 - 390685.4
Administering Agency: Pioneer Community Energy
Contract No. _____________
Contract Description: ___________________________
CONSULTANT SERVICES AGREEMENT
THIS CONSULTANT SERVICES AGREEMENT (the “Agreement”) is made at Rocklin, California, as of _____________, 2025, by and between Pioneer Community Energy, ("Pioneer"), and Aiqueous, LLC ("Consultant"), who agree as follows:
1. Services. Subject to the terms and conditions set forth in this Agreement, Consultant shall provide the services, including delivery of Consultant’s proprietary software-as-a-service platform (the “SaaS Solution”) and proprietary software delivered thereby (the “Software”), described in the applicable written contract document such as an Order Form (“Order”) or Statement of Work (“SOW”) that is ancillary to this Agreement, but governed by and issued pursuant to this Agreement. Consultant shall provide said services at the time, place, and in the manner specified in the applicable Order or SOW. Specific terms of the SaaS Solution and Software use rights granted by Consultant to Pioneer pursuant to this Agreement will be documented in one or more Orders; provided however, subject to the terms and conditions of this Agreement, Consultant will grant to Pioneer a nonexclusive, non-sublicensable, non-assignable, and limited license to access and use the SaaS Solution, including the applicable Software, for the subscription term set forth in the applicable Order solely by Pioneer’s personnel (and, as applicable, by Pioneer’s authorized end users) for Pioneer’s internal business operations. As applicable, the relevant Order will detail the “Support Services” that Consultant will deliver to Pioneer and that generally will consist of: (a) web-based information support, telephone support, and/or email technical support for the SaaS Solution and Software and (b) any updates, fixes, and modifications to the SaaS Solution and Software that Consultant commercially releases to its other customers.
2. Payment. Pioneer shall pay Consultant for services rendered pursuant to this Agreement or for the relevant SaaS Solution and Software subscription at the time and in the amount set forth in the applicable Order or SOW. The payment specified in the applicable Order or SOW shall be the only payment made to Consultant for services rendered or subscription term granted pursuant to this Agreement. Consultant shall submit all billings for said services to Pioneer in the manner specified therein, or, if no manner be specified, then according to the usual and customary procedures which Consultant uses for billing clients similar to Pioneer.
Consultant will invoice Pioneer for all applicable fees in the manner set forth in the applicable Order or SOW. Unless stated otherwise in the applicable Order or SOW, within thirty (30) days after Pioneer’s receipt of Consultant’s invoice, Pioneer shall pay all fees owed Consultant thereunder, except for any amount disputed in good faith.
3. Facilities, Equipment and Other Materials, and Obligations of Pioneer. Unless otherwise specified in the applicable Order or SOW, Consultant shall, at its sole cost and expense, furnish all facilities, equipment, and other materials which may be required for furnishing services pursuant to this Agreement.
4. Exhibits. All exhibits referred to herein will be attached hereto and by this reference incorporated herein.
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5. Time for Performance. Failure of Consultant to perform any services within the time limits set forth in the applicable Order or SOW shall constitute material breach of this contract.
6. Independent Consultant. At all times during the term of this Agreement, Consultant shall be an independent Consultant and shall not be an employee of Pioneer. Pioneer shall have the right to control Consultant only insofar as the results of Consultant's services rendered pursuant to this Agreement. Pioneer shall not have the right to control the means by which Consultant accomplishes services rendered pursuant to this Agreement.
7. Licenses, Permits, Etc. Consultant represents and warrants to Pioneer that it has all licenses, permits, qualifications, and approvals of whatsoever nature, which are legally required for Consultant to practice its profession. Consultant represents and warrants to Pioneer that Consultant shall, at its sole cost and expense, keep in effect or obtain at all times during the term of this Agreement, any licenses, permits, and approvals which are legally required for Consultant to practice its profession at the time the services are performed.
8. Time. Consultant shall devote such time to the performance of services pursuant to this Agreement as may be reasonably necessary for the satisfactory performance of Consultant's obligations pursuant to this Agreement. Neither party shall be considered in default of this Agreement to the extent performance is prevented or delayed by any cause, present or future, which is beyond the reasonable control of the party.
9. Hold Harmless and Indemnification Agreement. At all times during the performance of this agreement, Consultant agrees to protect, defend, and indemnify Pioneer in accordance with the provisions contained in Exhibit A.
10. Insurance. Consultant shall file with Pioneer concurrently herewith a Certificate of Insurance, in companies acceptable to Pioneer, with a Best's Rating of no less than A-:VII, for the coverage shown in Exhibit A. All costs of complying with these insurance requirements shall be included in Consultant’s fee(s). These costs shall not be a “reimbursable” expense under any circumstances.
11. Consultant Not Agent. Except as Pioneer may specify in writing Consultant shall have no authority, express or implied, to act on behalf of Pioneer in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied pursuant to this Agreement to bind Pioneer to any obligation whatsoever.
12. Assignment Prohibited. Consultant may assign its rights and obligations under this Agreement only upon the prior written approval of Pioneer, said approval to be in the sole discretion of Pioneer.
13. Personnel.
A. Consultant shall assign only competent personnel to perform services pursuant to this Agreement. In the event that Pioneer, in its sole discretion, at any time during the term of this Agreement, desires the removal of any person or persons assigned by Consultant to perform services pursuant to this Agreement, including those members of the Project Team as explained below, Consultant shall remove any such person immediately upon receiving notice from Pioneer of the desire of Pioneer for removal of such person or persons.
B. Notwithstanding the foregoing, if specific persons are designated as the “Project Team” in the applicable Order, Consultant agrees to perform the work under this agreement with - 5 - 390685.4
those individuals identified. Reassignment or substitution of individuals or subcontractors named in the Project Team by Consultant without the prior written consent of Pioneer shall be grounds for cancellation of the agreement by Pioneer, and payment shall be made pursuant to Section 15 (Termination) of this Agreement only for that work performed by Project Team members.
14. Standard of Performance. Consultant shall perform all services required pursuant to this Agreement in the manner and according to the standards observed by a competent practitioner of the profession in which Consultant is engaged in the geographical area in which Consultant practices its profession. All products of whatsoever nature which Consultant delivers to Pioneer pursuant to this Agreement shall be prepared in a substantial first class and workmanlike manner and conform to the standards or quality normally observed by a person practicing in Consultant's profession.
15. Termination.
A. This Agreement may be terminated (i) by mutual written consent or (ii) by either party upon the material breach of this Agreement by the other party which remains uncured thirty (30) days after written notice of such breach. Additionally, if the terms of all Orders or SOWs entered into between the Parties under this Agreement have expired and been fully performed, then either party may terminate this Agreement for convenience after giving thirty (30) days written notice to the other party of its intent to terminate.
B. An Order or SOW may be terminated: (i) by Consultant, if any undisputed payment owed under an Order or SOW remains due and unpaid thirty (30) days after Consultant’s written notice to Pioneer thereof or (ii) by either party if the other party fails to perform any material obligation set forth in an Order, SOW, or this Agreement, and such non-performing party does not cure such failure within thirty (30) days after written notice of such failure. Only if expressly authorized in the applicable Order or SOW may a party terminate such Order or SOW for convenience. The termination or expiration of one Order or SOW by itself shall not result in the termination or expiration of any other Order or SOW.
C. Upon the termination of an Order or SOW, (i) Consultant shall have no further performance obligations thereunder, including, but not limited to delivery of the SaaS Solution detailed therein and (ii) Pioneer shall pay to Consultant all outstanding and undisputed Fees and other amounts owed Consultant within thirty (30) days of such expiration or termination.
16. Contract Term. This Agreement shall remain in place until the Scope of Services described in the applicable Order or SOW is completed, or until contract is terminated pursuant to Section 15 of this contract.
17. Non-Discrimination. Consultant shall not discriminate in its employment practices because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation in contravention of the California Fair Employment and Housing Act, Government Code section 12900 et seq.
18. Records. Consultant shall maintain, at all times, complete detailed records with regard to work performed under this agreement in a form acceptable to Pioneer, and Pioneer shall have the right to inspect such records at any reasonable time. Notwithstanding any other terms of this agreement, no payments shall be made to Consultant until Pioneer is satisfied that work of such value has been rendered pursuant to this agreement. However, Pioneer - 5 - 390685.4
shall not unreasonably withhold payment and, if a dispute exists, the withheld payment shall be proportional only to the item in dispute.
19. Consultant – Intellectual Property Rights. As of the effective date of this Agreement, Consultant represents and warrants that it owns or has the right to license the SaaS Solution and the S, including, as applicable, any third party software integrated therein. Consultant asserts that it has created and developed proprietary configuration processes, methodologies, and know how (the “Brillion Processes”). Consultant, or its licensor(s), shall retain all right, title, and interest in and to the Intellectual Property Rights embodied in and to: (a) the SaaS Solution and the Software and (b) the Brillion Processes, whether tangible or intangible and whether developed independently by Consultant outside the scope of this Agreement or as a result of discussions with Pioneer within the scope of this Agreement. Except for the limited license granted hereunder, Pioneer shall not assert any right, title, or interest in or to the SaaS Solution, the Software, or the Brillion Processes. Subject to the foregoing, Pioneer shall own all right, title, and interest in the tangible reports or analyses created or prepared using the SaaS Solution, the Software, or the Brillion Processes within the scope of this Agreement and, to the extent that such reports or analyses contain Intellectual Property Rights, Consultant further grants Pioneer the limited, royalty-free, global rights and licenses necessary to use such reports and analyses for its own business purposes. As applicable and except where such restrictions are prohibited under mandatory applicable law, Pioneer shall not, and shall take commercially reasonable efforts so that any other entity will not: (i) disassemble, decompile, decrypt, or reverse engineer, or in any way attempt to discover or reproduce source code for, any part of the SaaS Solution or the Software or adapt, modify, or prepare derivative works based on the SaaS Solution or the Software; or use the Software to create any computer program or other material that performs, replicates, or utilizes the same or substantially similar functions as the SaaS Solution or the Software or (ii) alter, remove, or suppress any copyright, trademark, confidentiality, or other proprietary notices or legends placed on, embedded in, or otherwise appearing in or on the SaaS Solution or the Software or tangible reports prepared using the SaaS Solution or the Software.
For purposes of this Agreement, the term “Intellectual Property Rights” means any and all tangible and intangible rights, title and interest in and to: (a) works of authorship, including but not limited to copyrights, moral rights, and mask works, and all derivative works thereof; (b) trademarks, service marks, and trade names; (c) trade secrets or proprietary know-how; (d) inventions, patents, designs, or algorithms; (e) all other intellectual or industrial property rights whether arising by operation of law, contract, license, or otherwise; and (f) all registrations, initial applications, renewals, extensions, continuations, divisions, or reissues thereof now or hereafter in force.
20. Feedback. If Pioneer or any of its personnel sends or transmits any communications or materials to Consultant by mail, email, telephone, or otherwise, suggesting or recommending changes to the SaaS Solution, Software, or services delivered pursuant to this Agreement, including without limitation, new features or functionality relating thereto, or any comments, questions, suggestions, or the like (“Feedback”), then, subject to any confidentiality provisions of this Agreement, Consultant is free to use such Feedback for purposes of enhancing the SaaS Solution, Software, or services delivered pursuant to this Agreement, although Consultant is not required to use any Feedback and, as applicable, Pioneer hereby grants to Consultant a nonexclusive, perpetual, irrevocable, worldwide, and royalty-free license to access and use any Intellectual Property Rights contained in the Feedback.
21. Waiver. One or more waivers by one party of any major or minor breach or default of any provision, term, condition, or covenant of this Agreement shall not operate as a waiver of any subsequent breach or default by the other party.
- 5 - 390685.4
22. Conflict of Interest. Consultant certifies that no official or employee of Pioneer, nor any business entity in which an official of Pioneer has an interest, has been employed or retained to solicit or aid in the procuring of this agreement. In addition, Consultant agrees that no such person will be employed in the performance of this agreement without immediately notifying Pioneer.
23. Campaign Contributions. This Agreement is subject to Government Code section 84308, as amended by Senate Bill 1439 (2022), Senate Bill 1181 (2024), and Senate Bill 1243 (2024).
Consultant shall disclose any contribution to an elected or appointed Pioneer official’s campaign or committee in an amount of more than five hundred dollars ($500) made within 12 months preceding the effective date, by Consultant, its, her, or his agent, or another party affiliated with Consultant. Consultant shall provide a signed copy of the attached Campaign Contribution Disclosure Form, Exhibit B, to Pioneer prior to, or concurrent with, Consultant's execution of this Agreement and no later than the effective date.
24. Entirety of Agreement. This Agreement contains the entire agreement of Pioneer and Consultant with respect to the subject matter hereof, and no other agreement, statement, or promise made by any party, or to any employee, officer or agent of any party, which is not contained in this Agreement, shall be binding or valid.
25. Alteration. No waiver, alteration, modification, or termination of this Agreement shall be valid unless made in writing and signed by all parties, except as expressly provided in Section 15, Termination.
26. Governing Law. This Agreement is executed and intended to be performed in the State of California, and the laws of that State shall govern its interpretation and effect. Any legal proceedings on this agreement shall be brought under the jurisdiction of the Superior Court of County of Placer, State of California, and Consultant hereby expressly waives those provisions in California Code of Civil Procedure §394 that may have allowed it to transfer venue to another jurisdiction.
27. Notification. Any notice or demand desired or required to be given hereunder shall be in writing and deemed given when personally delivered or deposited in the mail, postage prepaid, and addressed to the parties as follows:
PIONEER COMMUNITY ENERGY: CONSULTANT:
Pioneer Community Energy Aiqueous, LLC
Attn: Eric Acedo Attn: CFO
2510 Warren Drive Suite B 2021 Guadalupe Street, Ste 260 Rocklin, CA 95677 Austin, Texas 78705
[email protected] [email protected] Phone: (916) 758-8943 Phone: (800) 811-0883
Any notice so delivered personally shall be deemed to be received on the date of delivery, and any notice mailed shall be deemed to be received five (5) days after the date on which it was mailed.
28. Confidential Information. For purposes of this Agreement, the term “Confidential Information” means any proprietary or confidential information or data, intellectual property, or know-how, including, without limitation: (a) research, product plans, business plans, - 5 - 390685.4
marketing plans, pricing information, customer lists, personnel information, software code, software documentation, inventions, trade secrets, data compilations, processes, designs, drawings, engineering reports, computer system configuration information, marketing, or finances; (b) any SaaS Solution and Software delivered hereunder and/or materials resulting from the Professional Services, and any derivatives thereof; (c) any personally identifying information; or (d) information that, given the nature of the information and circumstances surrounding the disclosure, a reasonable person would understand to be confidential, including, but not limited to, the terms of this Agreement. Notwithstanding the foregoing, Confidential Information does not include information, technical data, or know-how that, without restriction on disclosure, is: (i) in the public domain or becomes available to the public and not as a result of the act or omission of the receiving party; (ii) rightfully obtained by the receiving party from a third party; (iii) is lawfully in the possession of the receiving party at the time of disclosure; or (iv) is approved for release by written authorization of the disclosing party.
Confidential Information is, and remains, the disclosing party’s, or the lawful owner’s, sole and exclusive property, and this Agreement grants no licenses or other rights of any kind to the receiving party unless expressly stated herein. The receiving party may use and disclose Confidential Information solely in connection with performance of its obligations or exercise of its rights under the Agreement. The unauthorized disclosure or use of Confidential Information of the other party or of the other party’s third party licensors, and all information and services related thereto, may cause injury and harm to its owner. Therefore, during the term of this Agreement and so long as such Confidential Information remains confidential, each party agrees to take all appropriate action to ensure the confidentiality and security of the other party's Confidential Information, but in any event no less than the same standard of care it uses to protect its own Confidential Information of like kind and value.
Without limiting the generality of the foregoing, Pioneer and Consultant each agree that it:
(a) shall maintain the other's Confidential Information in the strictest confidence, including compliance with reasonable remote access security requirements; (b) shall not disclose, display, publish, transmit, or otherwise make available such Confidential Information, except in confidence to its own Personnel; or (c) except as expressly permitted hereunder, shall not copy, duplicate, replicate, transform, or reproduce such Confidential Information. Finally, during the term of this Agreement and upon receipt of a written request, one party shall promptly return to the other party or destroy any Confidential Information of the other party.
Upon written request by Pioneer, Consultant will deliver a written certification that it has destroyed any Pioneer Confidential Information.
29. Multiple Phase Projects. Pursuant to Government Code section 1097.6, Consultant’s duties and services under this Agreement shall not include preparing or assisting Pioneer with any portion of the Pioneer’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with Pioneer. Pioneer shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project. Consultant’s participation in the planning, discussions, or drawing of project plans or specifications, if any, shall be limited to conceptual, preliminary, or initial plans or specifications. Consultant shall cooperate with the Pioneer to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by Consultant, if any, pursuant to this Agreement.
30. Remedies Non-Exclusive. Each right, power and remedy provided for herein or now or hereafter existing at law, in equity, by statute, or otherwise shall be cumulative and shall be in addition to every other right, power, or remedy provided for herein or now or hereafter existing at law, in equity, by statute, or otherwise. The exercise, the commencement of the - 5 - 390685.4
exercise, or the forbearance from the exercise by any party of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by such party of any or all of such other rights, powers or remedies.
31. Successors & Third-Party Beneficiaries. This Agreement shall be binding on the successors and assigns of the parties. Except as expressly stated herein, there is no intended third-party beneficiary of any right or obligation assumed by the parties.
32. Severability. If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, then such term or provision shall be amended to, and solely to the extent necessary to, cure such invalidity or unenforceability, and shall be enforceable in its amended form. In such event, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected, and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.
33. No Presumption Against Drafter. Each party had an opportunity to consult with an attorney in reviewing and drafting this agreement. Any uncertainty or ambiguity shall not be construed for or against any party based on attribution of drafting.
34. Counterparts; Electronic Signatures. This Agreement may be signed in one or more counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same instrument. The parties acknowledge and agree that this Agreement may be executed by electronic signature, which shall be considered as an original signature for all purposes and shall have the same force and effect as an original signature. Without limitation, “electronic signature” shall include faxed or emailed versions of an original signature, electronically scanned and transmitted versions (e.g., via pdf) of an original signature, or a digital signature.
Executed as of the day first above stated:
PIONEER COMMUNITY ENERGY
By: _____________________________
Printed Name/Title:
Approved as to Form – General Counsel:
By: _____________________________
Printed Name/Title:
Aiqueous, LLC
By: _____________________________
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Name: Jon Ezrine
Title: CEO
*If Consultant is a corporation, this agreement must be signed by a corporate officer, either the President or Vice President, unless an authenticated corporate resolution is attached delegating authority to a single officer or other officers to bind the corporation.
Exhibits
A. Hold Harmless Agreement and Insurance Requirements
B. Campaign Contribution Disclosure Form
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390685.4
EXHIBIT A
HOLD HARMLESS AGREEMENT
AND INSURANCE REQUIREMENTS
1. HOLD HARMLESS AND INDEMNIFICATION AGREEMENT
The CONSULTANT hereby agrees to protect, defend, indemnify, and hold PIONEER free and harmless from any and all losses, claims, liens, demands, and causes of action of every kind and character including, but not limited to, the amounts of judgments, penalties, interest, court costs, legal fees, and all other expenses incurred by PIONEER arising in favor of any party, including claims, liens, debts, personal injuries, death, or damages to property (including employees or property of PIONEER) and without limitation by enumeration, all other claims or demands of every character occurring or in any way incident to, in connection with or arising directly or indirectly out of, the contract or agreement. CONSULTANT agrees to investigate, handle, respond to, provide defense for, and defend any such claims, demand, or suit at the sole expense of the CONSULTANT.
CONSULTANT also agrees to bear all other costs and expenses related thereto, even if the claim or claims alleged are groundless, false, or fraudulent. This provision is not intended to create any cause of action in favor of any third party against CONSULTANT or PIONEER or to enlarge in any way the CONSULTANT'S liability but is intended solely to provide for indemnification of PIONEER from liability for damages or injuries to third persons or property arising from CONSULTANT'S performance pursuant to this contract or agreement.
As used above, the term PIONEER means Pioneer or its officers, agents, employees, and volunteers.
2. INSURANCE:
CONSULTANT shall file with PIONEER concurrently herewith a Certificate of Insurance, in companies acceptable to PIONEER, with a Best's Rating of no less than A-:VII showing.
3. WORKER'S COMPENSATION AND EMPLOYERS LIABILITY INSURANCE:
Worker's Compensation Insurance shall be provided as required by any applicable law or regulation.
Employer's liability insurance shall be provided in amounts not less than one million dollars ($1,000,000) each accident for bodily injury by accident, one million dollars ($1,000,000) policy limit for bodily injury by disease, and one million dollars ($1,000,000) each employee for bodily injury by disease.
If there is an exposure of injury to CONSULTANT'S employees under the U.S. Longshoremen's and Harbor Worker's Compensation Act, the Jones Act, or under laws, regulations, or statutes applicable to maritime employees, coverage shall be included for such injuries or claims.
Each Worker's Compensation policy shall be endorsed with the following specific language:
Cancellation Notice - “This policy shall not be changed without first giving thirty (30) days prior written notice and ten (10) days prior written notice of cancellation for non-payment of premium to Pioneer Community Energy”.
Waiver of Subrogation - The workers’ compensation policy shall be endorsed to state that the workers’ compensation carrier waives its right of subrogation against Pioneer, its officers, directors, officials, employees, agents or volunteers, which might arise by reason of payment under such policy in connection with performance under this agreement by the CONSULTANT.
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CONSULTANT shall require all SUBCONTRACTORS to maintain adequate Workers' Compensation insurance. Certificates of Workers' Compensation shall be filed forthwith with Pioneer upon demand.
4. GENERAL LIABILITY INSURANCE:
A. Comprehensive General Liability or Commercial General Liability insurance covering all operations by or on behalf of CONSULTANT, providing insurance for bodily injury liability and property damage liability for the limits of liability indicated below and including coverage for:
(1) Contractual liability insuring the obligations assumed by CONSULTANT in this Agreement.
B. One of the following forms is required:
(1) Comprehensive General Liability;
(2) Commercial General Liability (Occurrence); or
(3) Commercial General Liability (Claims Made).
C. If CONSULTANT carries a Comprehensive General Liability policy, the limits of liability shall not be less than a Combined Single Limit for bodily injury, property damage, and Personal Injury Liability of:
→One million dollars ($1,000,000) each occurrence
→Two million dollars ($2,000,000) aggregate
D. If CONSULTANT carries a Commercial General Liability (Occurrence) policy:
(1) The limits of liability shall not be less than:
→One million dollars ($1,000,000) each occurrence (combined single limit for bodily injury and property damage)
→One million dollars ($1,000,000) for Products-Completed Operations →Two million dollars ($2,000,000) General Aggregate
(2) If the policy does not have an endorsement providing that the General Aggregate Limit applies separately, or if defense costs are included in the aggregate limits, then the required aggregate limits shall be two million dollars ($2,000,000).
E. Special Claims Made Policy Form Provisions:
CONSULTANT shall not provide a Commercial General Liability (Claims Made) policy without the express prior written consent of PIONEER, which consent, if given, shall be subject to the following conditions:
(1) The limits of liability shall not be less than:
→One million dollars ($1,000,000) each occurrence (combined single limit for bodily injury and property damage)
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390685.4
→One million dollars ($1,000,000) aggregate for Products Completed Operations →Two million dollars ($2,000,000) General Aggregate
(2) The insurance coverage provided by CONSULTANT shall contain language providing coverage up to one (1) year following the completion of the contract in order to provide insurance coverage for the hold harmless provisions herein if the policy is a claims-made policy.
Conformity of Coverages - If more than one policy is used to meet the required coverages, such as a separate umbrella policy, such policies shall be consistent with all other applicable policies used to meet these minimum requirements. For example, all policies shall be Occurrence Liability policies or all shall be Claims Made Liability policies, if approved by Pioneer as noted above. In no cases shall the types of polices be different.
5. ENDORSEMENTS:
Each Comprehensive or Commercial General Liability policy shall be endorsed with the following specific language:
A. "Pioneer Community Energy, its officers, agents, employees, and volunteers are to be covered as insured for all liability arising out of the operations by or on behalf of the named insured in the performance of this Agreement."
B. "The insurance provided by the Consultant, including any excess liability or umbrella form coverage, is primary coverage to Pioneer Community Energy with respect to any insurance or self-insurance programs maintained by Pioneer Community Energy and no insurance held or owned by Pioneer Community Energy shall be called upon to contribute to a loss." C. “This policy shall not be changed without first giving thirty (30) days prior written notice and ten (10) days prior written notice of cancellation for non-payment of premium to Pioneer Community Energy.”
6. AUTOMOBILE LIABILITY INSURANCE:
Automobile Liability insurance covering bodily injury and property damage in an amount no less than one million dollars ($1,000,000) combined single limit for each occurrence.
Covered vehicles shall include owned, non-owned, and hired automobiles/trucks.
7. PROFESSIONAL LIABILITY INSURANCE:
Professional liability insurance which includes coverage for the professional acts, errors and omissions of Consultant in the amount of at least $1,000,000.
8. PRIVACY AND CYBERSECURITY LIABILITY INSURANCE:
Privacy and cybersecurity liability (including costs arising from data destruction, hacking or intentional breaches, crisis management activity related to data breaches, and legal claims for security breach, privacy violations, and notification costs of at least $5,000,000 US per occurrence.
9. ADDITIONAL REQUIREMENTS:
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390685.4
Premium Payments - The insurance companies shall have no recourse against PIONEER and funding agencies, its officers and employees or any of them for payment of any premiums or assessments under any policy issued by a mutual insurance company.
Policy Deductibles - The CONSULTANT shall be responsible for all deductibles in all of the CONSULTANT’s insurance policies. The maximum amount of allowable deductible for insurance coverage required herein shall be $25,000.
CONSULTANT’s Obligations - CONSULTANT’s indemnity and other obligations shall not be limited by the foregoing insurance requirements and shall survive the expiration of this agreement.
Verification of Coverage - CONSULTANT shall furnish Pioneer with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this clause. All certificates and endorsements are to be received and approved by Pioneer before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the CONSULTANT’s obligation to provide them. Pioneer reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.
Material Breach - Failure of the CONSULTANT to maintain the insurance required by this agreement, or to comply with any of the requirements of this section, shall constitute a material breach of the entire agreement.
390685.4
EXHIBIT B: CAMPAIGN CONTRIBUTION DISCLOSURE FORM
Local governments are subject to the campaign disclosure provisions detailed in Government Code Section 84308.
Please carefully read the following information to
determine if the provisions apply to you. If you
determine that the provisions are applicable, the
Campaign Disclosure Form must be completed and
returnedtoPioneerwithyourapplication.
No Pioneer Board member or other Pioneer official shall accept, solicit, or direct a campaign contribution of more than $500 from any party1 financial interested
participant,2 or agent3 for 12 months after the Pioneer approves a contract. This prohibition commences when
an application is filed, or a proceeding is otherwise
initiated.
A party to a Pioneer proceeding shall disclose on the record of the proceeding any campaign contribution of more than $500 by a party or agent to any Pioneer member or other Pioneer official during the preceding 12 months. No party to or participant in a Pioneer proceeding, shall make a
contribution of more than $500 to a Pioneer Board member or other Pioneer official during a proceeding and for 12 months after the Pioneer approves a contract. No agent to a party or participant shall make a contribution in any amount to a Pioneer board member or other Pioneer official during the preceding 12 months following the date a final
decision is rendered by Pioneer.
A Pioneer Board member or other Pioneer official who
received a campaign contribution ofmore than $500within the preceding 12 months from any party, or agent, to a
proceeding shall disclose that fact on the record of the proceeding, and shall abstain from participating in the proceeding. However, if he or she receives a contribution that otherwise would require disqualification, and returns the contribution within 30 days of making the decision, or
knowing about the contribution and the relevant proceeding, whichever comes last, , he or she may participate in the proceeding.
1 “Party” is defined as any person who files an
application for, or is the subject of, a proceeding.
2 “Participant” is defined as any person who actively supports or opposes a particular decision in a proceeding.
3 “Agent” is defined as a person who represents a party in connection with a proceeding. If an individual acting as an agent also is acting as an employee or member of
a law, architectural, engineering, or consulting firm, or a similar entity or corporation, both the individual and the entity or corporation are agents. When a closed
corporation is a party to a proceeding, the majority
shareholder is subject to these provisions.
To determine whether you or your agent made a campaign
contribution of more than $500 to a Pioneer Board member or other Pioneer official within the preceding 12 months, you must aggregate all such contributions.
Names of current Pioneer Board members and other Pioneer officials are available on Pioneer’s website.If you have questions about GovernmentCode Section 84308, FPPCregulations, or theCampaignDisclosure Form, please contactthe Pioneer Clerk.
CAMPAIGN CONTRIBUTION DISCLOSURE FORM
(a) Document:
□ License
□ Lease
□ Permit
□ Franchise
□ Other Contract
□ Other Entitlement
Name and address of any party, participant, or agent, who has contributed more than $500 to any Pioneer Board
Member or other Pioneer official within the preceding 12 months:
1. ____________________________________
2. ____________________________________
3. ____________________________________
(b) Date and amount of contribution:
Date Amount $
Date Amount $
(c) Name of Pioneer Board member or other Pioneer
official to whom contribution was made:
1. ____________________________________
2. ____________________________________
3. ____________________________________
(d) □ Check here If no contributions have been made to
any Board member or other Pioneer official in the
preceding 12 months.
(e) I certify that the above information is provided to the best of my knowledge.
Printed Name
Signature
Date Phone
390685.4
CONFIDENTIAL – PAGE 1
Order No. 1
(SaaS Solution & Services)
This Order No. 1 dated March x, 2025 (the “Order”) is issued pursuant to and governed by the Master Agreement dated March x, 2025 (the “Agreement”) entered into by and between Pioneer Community Energy (“Client”) and Aiqueous, LLC (d/b/a Brillion) (“Brillion”). All capitalized terms used herein, but not defined herein, shall have the meaning ascribed to them in the Agreement. If there is any conflict of terms between the Agreement and this Order the terms of this Order shall govern solely with respect to the SaaS Solution (and Software) and Services detailed herein.
1. Summary.
SaaS Solution & Related Services Term Fees
SaaS Solution as detailed in Section 2(a) of this Order, including the Brillion Fulfill software as more fully described in Schedule A to this Order (the “Software”).
3 years
$100,000 Year 1
$104,000 Year 2
$108,160 Year 3
(the “SaaS Fee”).
Premier Support Services as detailed in Schedule B to this Order. $20,000 Year 1
$20,800 Year 2
$21,632 Year 3
(the “Support Fee”).
Implementation Services as detailed in SOW No. 1 attached hereto. One-time service. $166,760 (the
“Implementation
Services Fee”)
Optional
Legacy Data Import Contingency
Budget $8,800
“Commencement Date” means the date of final signature execution to this Order.
2. SaaS Solution, Services, and Fees.
(a) SaaS Solution. The SaaS Fee owed by Client for the delivery by Brillion to Client of the SaaS Solution and Software is set forth above in Section 1 of this Order. In consideration of Client’s payment of the SaaS Fee and for the duration of the Subscription Term (defined below), Brillion will deliver to Client the “SaaS Solution” consisting of access to the Software detailed in Section 1 above via the Salesforce.com (“SFDC”) platform detailed herein. Aggregate use of the SaaS Solution and Software by Client’s employees or contractors shall at no time exceed the use parameters detailed in Schedule A.
SFDC Upgrades for Software
All releases and upgrades to the Salesforce Platform can be monitored in the Client Production Environment Release Update page, available through Setup as described at:
https://help.salesforce.com/s/articleView?id=sf.release_updates_manage.htm&type=5 SFDC Platform Availability for Software
Platform availability for the Production Environment resides under the Main Services Agreement for Salesforce.com, Inc. (SFDC) available at https://www.salesforce.com/company/legal/agreement. (b) Support Services. In consideration of Client’s payment of the Support Fee and for the duration of the Subscription Term (defined below), Brillion will deliver to Client the “Support Services” detailed in Schedule B to this Order for the Software detailed in Section 1 above.
(c) Subscription Term. The term of Brillion’s delivery of the SaaS Solution and Support Services will commence on the Commencement Date and extend through the length of time set forth in Section 1 above (the “Initial Subscription Term”). The Initial Subscription Term shall automatically renew for up to two (2) additional one year terms (each a “Renewal Term(s)” and, together with the Initial Subscription Term, the “Subscription Term”). The total fee for the initial Renewal Term will be equal to the SaaS Fee and Support Fee for Year 3 (detailed in Section 1 above) plus an increase of not more than eight percent (8%). The total fee for each additional Renewal Term will be equal to the SaaS Fee and Support Fee for the immediate prior Renewal Term plus an increase of not more than eight percent (8%). Notwithstanding -
-
CONFIDENTIAL – PAGE 2
the foregoing, Client may, at least sixty (60) days prior to the conclusion of the then-current Subscription Term, advise Brillion in writing that Client does not wish to renew the Subscription Term (a “Non-Renewal Notice”). (d) Implementation Services. In consideration of Client’s payment of the Implementation Services Fee, Brillion will deliver to Client the “Implementation Services” more fully described in SOW No. 1 to this Order.
3. Payment Terms.
(a) Invoicing. Brillion will invoice Client for the applicable fees in accordance with the following schedule:
Invoice Date Amount Purpose of Fee
On the Commencement Date. $120,000 Payment for Year 1 of: (1) the SaaS Fee & (2) the Support Fee.
As detailed below $166,760 Payment for the Implementation Services Fee.
On the one year anniversary of the
Commencement Date. $124,800 Payment for Year 2 of: (1) the SaaS Fee & (2) the Support Fee.
On the two year anniversary of the
Commencement Date. $129,792 Payment for Year 3 of: (1) the SaaS Fee & (2) the Support Fee.
One Time Professional Services Payment Schedule
Invoice Date Amount Purpose of Fee
Upon Commencement Date. $96,536 Project Administration and Planning Kick-off date. $26,334 Project Kickoff
Client Sign-off on Blueprint. $26,334 Blueprint Signoff Start of User Acceptance Testing. $17,556 Development and User Acceptance Testing Total $166,760 Total One-Time Professional Services
Payment Notes:
• If scope outside of the documented requirements is requested by Pioneer, Brillion will work with Pioneer to provide a Change Order to account for additional hours associated with scope o If additional hours are needed based on the scope agreed to in approved and signed Blueprint o If after the Blueprint document is drafted and agreed to by Pioneer and further scope is uncovered during implementation.
(b) Payment Terms. In accordance with Section [Reference payment term provision of Pioneer MSA], Client shall pay all such Fees within thirty (30) days from receipt of any undisputed invoice. [signature page follows]
CONFIDENTIAL – PAGE 3
ACCEPTED: ACCEPTED:
Aiqueous, LLC Pioneer Community Energy
CONFIDENTIAL – PAGE 4
SCHEDULE A
(Brillion Fulfill – Software)
This Schedule A (the “Schedule”) details the Support Services that Brillion will deliver to Client and shall be incorporated an and made a part of the Order.
Brillion Fulfill – Description
Brillion Fulfill
Includes:
• Salesforce Platform
• Full Copy Sandbox
• Up to 20 Fulfill user licenses
• 10 GB Data Storage
• 10 GB File Storage
Brillion Enrollment Form Builder
ECOiQ ETL Tool:
• 4013 Connector
• Bill.com Payments Data Exchange
Limited to programs defined in SOW:
• HVAC Tune Up
• Home Energy Toolkit
3rd Party Program Manual Upload Data – Brillion Fulfill Project Loader:
• GridGen
• Powershift Rewards
• Home Energy Toolkit
If the addition of New Programs, Integrations, Data/File Storage or Configuration (not covered by Support) is needed, the following pricing will apply.
Product Description Pricing
Addition of Program
Subscription (New)
• Includes Clone existing
program "template" to
set up a NEW
Business
Program/Process
Subscription includes the following capabilities:
• Account and contact management
• Automated Workflows
• Fulfill Scorecard (BI Analytics)
• Libraries of Standardized program Workflows,
measures and data attributes
• Brillion Form Builder
Additional Program Renewal Required
Based on Flat Fee – $15,000
Annual per Program
• Includes up to 5 New User License
Per New Program.
• If the implementation of each new
programs requires assistance by
Brillion Analysts, then work shall be
described in a separate Statement
of Work and billed at current
Professional Services rates.
Note: NO Additional Program Renewal
required for Cloning program for new
year. Ex. Rollover for new year.
3rd Party Program Data
Integration
.
Includes 3rd Party Program Data Integration
• Reporting only use case, no
workflow/operational process in Fulfill
Brillion Fulfill Project Loader Template
Flat Fee – $5,000
Annual Per Program
CONFIDENTIAL – PAGE 5
Standard Integration
Connectors
“Standard Connectors” are to established sources.
(i.e.. Sources the Brillion team has experience
integrating to). If integrating to a new data source,
additional one-time fees apply per specifications.
$12,000 per Connector Required
(Data Source) / Year
Data / File Storage Data Storage (for database records) can be sold in 500MB or 10GB increments.
File Storage (for file attachments uploaded to the
system) can be sold in 10GB increments.
Salesforce Data and File Storage Allocations
Data Storage
Starting in late March 2019, Contact Manager,
Group, Essentials, Professional, Enterprise,
Performance, and Unlimited Editions are allocated
minimum of 10 GB for data storage, plus
incrementally added user storage. For example, a
an Enterprise Edition org with 10 users receives 10
GB of data storage, plus 20 MB per user, for 10.2
GB of total data storage. 20 MB of Data Storage
included per License.
File Storage
Contact Manager, Group, Professional, Enterprise,
Performance, and Unlimited Editions are allocated
10 GB of file storage per org. File storage and data
storage are calculated asynchronously, so if you
import or add a large number of records or files, the
change in your org’s storage usage isn’t reflected
immediately. File Storage may be added in
increments of 10 GB.
Data Storage - $4800 per 10 GB per
Year.
File Storage - $720 per 10 GB per Year.
Pricing Notes:
Changes to existing Programs managed in Fulfill does not require additional annual program renewal. o For ex., Field Updates, Updates to Page Layouts, new reports, new fields on existing objects, new project types without a business process; modifications to payments, emails, surveys; modifying existing business processes to add new stages or triggers; add or modify third-party data integrations (DocuSign, etc.).
CONFIDENTIAL – PAGE 1
SCHEDULE B
(Support Services)
This Schedule B (the “Schedule”) details the Support Services that Brillion will deliver to Client and shall be incorporated an and made a part of the Order. For the avoidance of doubt, Brillion will not deliver support services directly to an End User of Client.
Support Description. Brillion will provide support to Client through the support portal, telephone and email (“Support”) as defined in the Service Availability – Initial Contact and Response section below.
Service Availability – Initial Contact and Response
Request for Support. Authorized Users will make Support requests by submitting a request via Brillion’s customer support web portal or via email at [email protected]
Coverage parameters specific to the services covered in this Schedule are as follows:
● Support Community: Monitored 6:00 A.M. to 8:00 P.M. Monday – Friday, Eastern Time Zone. o Service Requests received outside of office hours will be collected but no action, can be guaranteed until the next business day.
● Brillion shall not offer support on the following days. Inquiries received during these holidays will be addressed on the next business day.
Day or Date Official Name
January 1 New Year's Day
Third Monday in January Martin Luther King, Jr. Day
Last Monday in May Memorial Day
July 4 Independence Day
First Monday in September Labor Day
Fourth Thursday in November Thanksgiving Day
Friday after Thanksgiving Day after Thanksgiving
December 24 Christmas Eve
December 25 Christmas
Service Tiers
Standard and Premier Support activities are defined as follows.
The Brillion Fulfill Premier Support subscription will include up to 120 hours annually of Premier Support activity as described below. Standard Support Activity is included and does not apply toward the 120 hours. Additional Premier Support may be added in increments of 50 hours or $7,500 annually. For the avoidance of doubt, if Customer uses less than 120 annual hours, then Supplier will not either (i) issue a refund for those unused hours or (ii) apply a credit of those unused hours toward any future service arrangements.
Standard Support:
• Answer “How-to” questions on using the system
• Access to knowledge base and relevant documentation
• Address bugs and defects on work delivered by Brillion • Regular monthly Client Support calls as needed
• User access request and new user support
• Troubleshoot integrations owned and maintained by Brillion, including renewal of certificates and tokens • Troubleshoot third-party tools provided by Brillion
• Software release training & specifications
• Consult on Salesforce updates (only for Salesforce-based Brillion products) • Standard Engage email templates, video edits, and surveys as guided by Brillion support or customer success Premier Support:
• Update existing and basic new configurations (including fields, flows, validations) • Configure Payment processing and inspections
• Updates to existing reports and dashboards
• Update measures and templates
• Page layout changes
• Cloning programs and measures for rollover activities CONFIDENTIAL – PAGE 2
• 4 hours of training per month with scheduling (including data manipulation, configuration, etc.) o Subject to resource availability
o Support will require two weeks’ notice to schedule.
• Run health checks and work with Salesforce to resolve outstanding issues • Sandbox refreshes (if applicable)
• Priority queue
For scopes of work falling outside of Support activities above (typically new enhancements with estimated Level of Effort greater than 20 hours), estimates will be provided to be delivered by Professional Services as a separate SOW. This typically includes new configuration, automations, programs, integrations and other activities exceeding the 20-hour estimate. Scopes of work will include estimates for relevant testing, deployment, and training as required.
Inquiry Settlement (Service Defect) Request and Response The following definitions will be used for this Schedule. ● CRITICAL: Defect Severity Level 1 (S1) – Defined as application is not available to all or substantial number of users and production processing is not available for any business purposes. (i.e. software does not operate.
Excludes Internet connectivity issues).
● HIGH: Defect Severity Level 2 (S2) – Defined as part of production application is not working and there is no workaround; major functionality is inoperable or unusable for a small number of users. Also defined as software does not meet in-scope business requirements without a manual work-around or a specific in-scope module of the software is not usable without a manual work-around.
● MEDIUM: Defect Severity Level 3 (S3) – Defined as part of the application is not working for in-scope software features as intended, but a reasonable, jointly agreed-upon work-around exists leaving the essential functions intact and operable.
● LOW: Defect Severity Level 4 (S4) – Defined as minor cosmetic problems within in-scope features of the software that do not impact the established business processes.
● General support (G) – General end user questions about in-scope functionality ● Training requests (T) – Requests for training on in-scope features Inquiry Settlement (Service Defect) Request and Response Table Note: General support and Training requests will be prioritized and assessed as part of the support queue Request Type Response Time Initial
Assessment
Update
Frequency
Maximum
Resolution Time
S1 Critical During Business hours:
30 minutes
Outside business hours:
2 hours
2 business hours 2 business hours 16 business hours
S2 High 2 business hours 4 business hours 4 business hours 24 business hours S3 Medium 8 business hours 16 business hours Weekly 40 business hours S4 Low None. 24 business hours Weekly Prioritized as part of product roadmap
Inquiry Resolution Reporting
Brillion agrees to report on Inquiry Resolution metrics to Client at least once every ninety days.
CONFIDENTIAL – PAGE 1
Statement of Work No. 1 to the Order
(SaaS Solution – Implementation Services)
This Statement of Work No. 1 (the “SOW”) is attached to and made a part of the Order. This SOW describes (a) the SaaS Solution – Implementation Services that Brillion will deliver to Client (the “Services”) and (b) the requirements Client must complete for Brillion to deliver such Services. All capitalized terms used herein, but not defined herein shall have the meaning ascribed to them in the Order or the Agreement. If there is any conflict of terms between the Agreement, the Order, and this SOW, the terms of this SOW shall govern solely with respect to the Services to be rendered under this SOW.
Project Overview
This SOW contains the approach and processes to configure and implement Client’s customer account management and program transactions on Brillion Fulfill as described below.
Fees for this SOW are based on scope and timeline in Description of Scope along with responsibilities below. Implementation described is reflected as part of the Brillion Fulfill Subscription stated in the accompanying SaaS Solutions and Service Order #1.
Material changes to the Description of Scope will be raised as issues during the project to resolve. For issues affecting the budget, Brillion and Client will agree on Change Orders to address these changes as described in the Change Management Process below.
Brillion Responsibilities
1. Configure products based on jointly agreed upon design requirements and business case outcomes as described in Description of Scope.
2. Provide project management, design, testing, and training resources pre-go-live and post-go-live during stabilization.
3. Work with Client to agree on stakeholder involvement including senior management or advisor involvement, and cadence to weekly).
4. Regularly communicate project status, timeline, budget, scope and risks to go-live according to the agreed schedule Client Responsibilities
1. Provide technical, business stakeholders, and project management resources required to successfully support the design, build, test and launch in coordination with Brillion resources.
2. Work with Brillion to identify and resolve risks, timeline, scope, and budget issues.
3. Provide timely feedback on design decisions (e.g. Blueprint approvals), requirements, sample data, testing criteria and training materials, based on mutually agreed deliverables required to maintain project timeline.
4. Cooperate with and assist Brillion in connection with this SOW, including complying with the communications schedule and providing requested information and feedback.
5. Provide approval of proposed designs, changes, or testing results in no more than 5 business days.
Description of Scope
Functionality configured in this implementation includes the following items. Functionality may be amended as mutually agreed by Brillion and Client based on further discovery during the Blueprint (design) phase of the project, scope and budget changes to be communicated between Brillion and Client.
1. 4013 Data and Related Data Structure
The 4013 data file contains a list of all active Service Agreements (i.e. electric Service Agreements) in Client service territory and account-related information. (For the avoidance of doubt, the term “Client Customers” refers to customers of Pioneer and is substantially similar to the defined term “End User” as used in the Agreement.) Brillion and Client shall work together to finalize a plan for mapping the data to the standard Brillion Fulfill data model and setting up an import process using the standard Brillion ECOiQ ETL Tool functionality that creates and updates records as needed. At a minimum, the following requirements shall be met:
1.1. All required 4013 Service Agreements and data fields are imported into the Brillion Fulfill site object. This includes rate information, site address information, and a process for identifying which Service Agreements are active;
1.2. All related 4013 accounts and data fields are imported into the Brillion Fulfill Accounts object and a process for identifying which accounts are active based on if it has active Service Agreements is set up;
1.3. The Contacts object can be used to create or identify contact records for all created accounts;
1.4. A process for minimizing the creation of duplicate records will be used
1.5. A fully automated process for Client to import the latest 4013 file into Brillion Fulfill shall be created. Client, or a designated 3rd party, shall drop 4013 data files on a regular schedule onto an externally accessible SFTP enabled location, that the Brillion tool polls and pulls the file from.
CONFIDENTIAL – PAGE 2
2. Programs and Related Data Structure
Brillion and Client shall work together to finalize mapping of program data to Brillion Fulfill data model and setting up a direct entry, customer form entry and/or bulk entry process as described in more detail in Task 3. At a minimum, the following requirements shall be met:
2.1. The Program and Program Measures objects must be used to store high level information about the program and its offerings, and the Project and Project Measures objects must be used to store information about individual program participants. This is described in more detail in Task 4;
2.2. The Project record shall be tied to an Account, Site, and Contact record for that respective Client Customer, as mutually determined by Brillion and Client.
3. General Program Features
3.1. Workflows
3.1.1. Client customizable workflows shall be configured by Brillion as per Blueprint design specifications
3.1.2. Workflows shall be subsequently modifiable/configurable by Client using standard Fulfill Workflow Builder and standard Salesforce functionality
3.1.3. Any Application not received through portal (e-mail, walk in or other), Pioneer staff will be able to manually create using standard Initiate Project functionality in Brillion Fulfill. Pioneer staff will not need to log in to the portal in order to create a project for a customer.
3.2. Email
3.2.1. Client customizable email notifications will be sent and may be associated with Client-determined project stage and/or time-based triggers, readily customizable; email templates may also be sent manually
3.2.2. Includes 5 Email notification templates. Examples include requests to Client Customers to complete or thank users for completing surveys
3.2.3. Email notifications may be disabled for a given Client Customer or project
3.2.4. Email notifications will use standard Salesforce email templates and the standard Fulfill Workflow Builder tool.
3.3. Incentives and Savings for Measures
3.3.1. Incentives and savings shall be deemed
3.3.2. Client shall be able to subsequently configure or adjust incentive types or levels for measures and savings types or levels for measures
3.3.3. Incentives and savings are effective dated(specific to a certain date range)
3.4. Measure Inputs
3.4.1. Each measure may display specific input fields relevant to it or to its class of product (vehicles, EV charging, efficiency, electrification, solar, storage)
3.4.2. Client shall be able to adjust or set up measure inputs following standard Brillion Fulfill processes.
3.5. Bulk Imports
3.5.1. Up to three Project Loader templates for the three 3rd party programs and their measures shall be configured.
This template shall enable projects to be bulk loaded into Fulfill. Client shall be able to clone the above template or modify it to serve for other programs’ measures.
3.5.1.1. GridGen
3.5.1.2. Power Shift Rewards
3.5.1.3. Home Energy Toolkit
3.6. Reporting & Dashboards
3.6.1. Client customizable Salesforce reports and Dashboards across the full set of standard and custom objects shall be configured as per the Blueprint. A maximum of 20 reports and 5 dashboards shall be configured by Brillion. Note that reporting on past/legacy and new project data in a unified way must be supported. The customer is responsible for any data cleansing and loading past/legacy project data into Brillion Fulfill.
4. Forms
4.1.1. Client Customer users will be required to create a user login to submit an application, check application status, and update form data.
4.1.2. Any branding and style guides will be provided by Client.
4.1.3. There will be one template web page used by all programs.
4.1.4. Web branding and styling will use standard Brillion Form Builder functionality.
4.2. CONFIDENTIAL – PAGE 3
5. Program-Specific Requirements
The following 2 programs shall be configured according to the required features outlined in each section:
5.1. HVAC Tune Up
5.1.1. A Client Customer-facing application form shall be offered for Client Customers to submit an application form.
Submitting this form shall create a Project record. The form shall enable document upload.
5.1.2. Workflow shall be configured to have the Project flow through various project statuses automatically according to to-be-defined criteria.
5.1.3. Easily customizable automatic emails are triggered according to time-based triggers and/or status changes to a Contact associated with that Project.
5.1.4. Configure up to three measures for this program
5.1.5. Configure Customer Relationship Management (CRM) functionality for capturing communications (e.g., e-mails, phone calls), tasks, and program participation for each customer record.
5.2. Home Energy Toolkit
5.2.1. A Client Customer-facing application form shall be offered for Client Customers to submit an application form.
Submitting this form shall create a Project record. The form shall enable document upload.
5.2.2. Workflow shall be configured to have the Project flow through various project statuses automatically according to to-be-defined criteria using the standard Brillion Workflow Builder tool
5.2.3. Easily customizable automatic emails are triggered according to time-based triggers and/or status changes to a Contact associated with that Project.
5.2.4. Configure up to three measures for this program
5.2.5. Configure Customer Relationship Management (CRM) functionality for capturing communications (e.g., e-mails, phone calls), tasks, and program participation for each customer record.
5.2.6. Any branding and style guides will be provided by Client.
5.2.7. Fulfillment completion: Standard Salesforce report to be provided to vendor for Fulfillment. A CSV file returned with uploaded Kits Fulfillment from vendor using a login profile set up for fulfillment vendor, using Brillion Data Loader
5.2.8. 6. Measures
The Brillion Fulfill Measure/Program Measure/Equipment Model schema shall be used to configure Client measures:
6.1. Measure: base definition of an improvement (e.g., “Heat Pump Water Heater”); typically contains core and unchanging attributes (e.g., fuel type, identifier to use to specify this measure in a bulk upload)
6.2. Program measure: version of the measure available for a given program; typically stores values that may change over time and default or stipulated values such as deemed savings, base incentive, and so on.
6.3. An integration with an equipment data source such as ENERGY STAR or AHRI is out of scope of this implementation.
7. Payment Processing
Payment processing will follow standard Brillion payment processing functionality. The following requirements shall be met:
7.1. In Brillion Fulfill, payees on projects may be either a Client Customer, contractor/vendor, or ‘other’ payee Account or Contact. There may be up to three payees per project. The system shall be configured to clearly identify on both a project and project payment record which type of entity the payee(s) are. Projects may have up to two payment records.
7.2. The system shall be configured to assign program- or project-appropriate values to payment record attributes such as name, accounting codes, payment method, payee address and payee bank information if applicable.
7.3. On a cadence determined by Clienty, projects shall be manually ‘batched’ at the program or portfolio record level Once initiated manually, payment generation will create payment records for all projects that are ready for batching. The payment generation process in Brillion will mark projects as submitted for payment (e.g., to prevent duplicate payments from being generated)
7.4. Multi-stage payments for a single project (e.g., pay a percentage of an incentive now, or certain measures now, and the rest of the project later) are out of scope.
7.5. It shall be possible to produce a report that lists unique payee details, payment amount and accounting string per row.
7.6. A payment report shall be configured which can be scheduled to be sent exportable to be sent to Client accounting vendor and. CSV export of payment records from Brillion Fulfill to Client accounting vendor and vendor’s Bill.com payments system shall be supported
7.7. Multiple payments in a batch to a single payee (e.g., a contractor completing multiple projects) shall be able to be consolidated/aggregated.
CONFIDENTIAL – PAGE 4
7.8. Manual CSV import of payment records back into Brillion Fulfill from Client accounting vendor and vendor’s Bill.com payments system shall be supported .
8. OPTIONAL: Legacy data import
8.1. Brillion shall supply one template for bulk upload of legacy project data via the Fulfill Project Loader, which can include account, site, one contact, project and measure data configured to meet the needs of the program. Other types of data (i.e. surveys, activities) not accommodated by the Fulfill Project Loader can be imported using custom import processes at additional cost and are not in scope for this effort.
9. Program Cloning Training
9.1. Brillion shall provide training materials to Client on how to clone Programs, Program Measures, and Measures so that Client may add simple new programs not included in the Description of Scope Task 3 on their own.
Out of Scope
1.Any major features, functionality, documentation, or other work not stated above in Description of Scope
1.1. Note that methods of bulk project and measure data import other than those specified above are out of scope.
2. UAT testing would be performed by the client and is not in scope for Brillion. Brillion will fully exercise a feature or set of features with unit and integration testing before it is passed to Client for UAT.
3.Brand new measures or programs not currently represented in the system are out of scope
4. Workflow automations not currently represented in the system are out of scope
5. Custom development – it is assumed that all requirements for this project can be handled via native Fulfill or Salesforce configuration, and any custom development not specified above is out of scope
6. Trade Ally Portal
Deliverables
For each feature, Brillion will provide, as appropriate:
1. Configuration
2. Unit and Integration Testing
3. Test cases
4. Deployment to UAT and UAT support
5. Deployment to Production
Project Schedule
The following schedule is proposed. The schedule will be refined as part of the Blueprint design phase.
Activity or Milestone Schedule
Project kickoff
Blueprint
UAT Release 1
UAT
Go-Live
Change Management Process
During each enhancement or project, there may be potential changes in scope that are identified. The causes for these may include (1) identification of new functionality needed by Client; (2) greater complexity related to the solution being developed; (3) schedule delays caused by unforeseen circumstances beyond the control of Brillion personnel; (4) excessive iterations by Company to prepare and provide business requirements that impact original project time frame. In these cases, potential changes in scope will be managed by a formal process that balances business needs with resource budgets.
The following steps will be followed:
1. Changes in scope will be subject to review by Client and Brillion, and will identify impact on project schedule, risks or quality impact and any potential added costs of such changes
2. If Client requests an addition to scope, and should additional budget to support the requested scope change not be available, Client and Brillion may mutually agree to offset the requested scope addition with a corresponding scope reduction.
Staff Report – Item 5
To: The Governing Board
From: Sam Kang, Chief Operating Officer
Item 5: Adopt a Resolution Amending Resolution 2023-33 (Authorizing a Local Feed-in Tariff Program) to include Solar Plus Battery Storage and Stand-alone Battery Storage Projects and Change Contract Term to 10 years
Date: 3/20/2025
RECOMMENDATION
Adopt a Resolution amending Resolution 2023-33 (authorizing a local Feed-in Tariff Program) to include Solar Plus Battery Storage and Stand-alone Battery Storage Projects and Change Contract Term to 10 years.
BACKGROUND
Pioneer’s Vision statement is to be a community partner in reliable energy solutions and positive local impact, powering today and empowering tomorrow1. To that end, Pioneer has consistently been fostering relationships with developers and local community leaders to help bring energy generation and storage projects to our service area. Furthermore, Pioneer has worked to leverage policy, regulatory, and legislative processes to help address current and future roadblocks to development of renewable energy resources.
One initiative which has brought success to other Community Choice Aggregators (CCAs) in developing positive local impact is through a local feed-in Tariff (FIT) program. To incentivize the development of certain types of energy generation and storage facilities, governments and utilities have adopted FITs. These are policy mechanisms which provide a competitive or above market price for energy and regulatory products from facilities that meet certain qualifications. Historically, it has been used to incentivize the development of certain energy-generating technologies (e.g., the Bioenergy Market Adjusting Tariff program incentivizing small-scale biomass). The local feed-in-tariff adopts this concept and uses it to incentivize the development of projects in the Load Serving Entities’ service area. Pioneer’s Local FIT Program would help project development through providing direct incentives to build projects locally in its service territory.
In support of developing local projects, Pioneer’s Board approved Resolution 2023-33 in November 2023 that authorized a local FIT program for biomass and small hydro projects for a notional dollar amount of $15 million in total.
ANALYSIS & DISCUSSION
As of March 20, 2025, there have not been any applications for Pioneer’s FIT program. Pioneer’s staff learned from potential developers that there were no new nor existing small hydro projects to contract with, and the new build biomass projects under 3 MW were steered towards the BioMAT program due to FIT budget constraints.
Pioneer staff found that there is interest in local solar plus battery storage and stand-alone battery storage projects. This also falls in the category of “Community Reinvestment” in Pioneer’s Strategic Plan using the FIT program to incentivize the development of energy projects in Pioneer’s service territory and reducing wildfire risk.
1 https://pioneercommunityenergy.org/about-us/
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Agenda Item: 5 Agenda Date: 3/20/2025
The Pioneer Local-FIT Program currently places the following qualifications for projects to participate in the program:
• The project must be sited and interconnected within Pioneer’s service area; and • Generator projects must have a capacity between 500 kW to 3 MW; and • The resource type can only be biomass or small hydro projects.
The Amendment to Resolution 2023-33 would do the following:
• Add solar plus storage projects between 1 to 2 MW in capacity and deliverability; • Add stand-alone storage between 1 to 10 MW in capacity and deliverability; and • Change the contract term to 10 years
If a potential project meets those requirements, they can apply to participate in the program. Applications are processed on a first-come, first-served basis. Any material deficiencies in the application that are not corrected within ten (10) business days are removed from the queue and must submit a new application if they wish to participate in the program. Upon approval, applicants are required to sign the Pioner Local-FIT Power Purchase Agreement which has non-negotiable terms and conditions.
The Budget for this program has already been set by the Board at a fixed notional dollar amount of $15 million in total. The Pioneer Local-FIT will procure energy until the program has exhausted its budget.
Budget Considerations and Calculations
As mentioned above, a key component to Pioneer’s Local-FIT is that the tariff offers above market prices in order to stimulate local investment. Staff’s analysis of current and future market prices resulted in the following prices for the respective generation types:
• Brownfield Biomass
o Agriculture - $115 per MWh
o Forestry - $135 per MWh
• Greenfield Biomass
o Agriculture - $185 per MWh
o Forestry - $200 per MWh
• Geothermal – $115 per MWh
• Wind - $100 per MWh
• Run of the river hydro - $90 per MWh
• Solar + Storage - $140 per MWh
o Solar - $90 per MWh
o Storage - $12 per kW-mo (RA only)
The addition of solar plus storage and stand-along storage compensation at FIT prices would result in notional values within the Board approved amount of $15 million for a 10-year term based on the assumptions in the table below.
Proposed with $15 million fixed amount and 10 year term MW Annual MWH FIT Price ($/MWH) Annual Notional 10 Year Notional Biomass 1 7500 $ 200 $ 1,500,000 $ 15,000,000
Small Hydro 2 16667 $ 90 $ 1,500,000 $ 15,000,000
Solar + BESS 2 10714 $ 140 $ 1,500,000 $ 15,000,000
FIT Price ($/kW-mo)
Standalone BESS 10 $ 12 $ 1,500,000 $ 15,000,000
Agenda Item: 5 Agenda Date: 3/20/2025
FISCAL IMPACT
None. The addition of the new product types does not change the already approved amount from Resolution 2023-33. There will be no fiscal impact for the current fiscal year as no eligible projects are expected to be available.
ATTACHMENTS
1. Resolution amending Resolution 2023-33 (authorizing a local Feed-in Tariff Program) to include Solar Plus Battery Storage and Stand-alone Battery Storage Projects and Change Contract Term to 10 years.
2. Redline showing changes made to the Local Feed-In Tariff
3. Redline showing changes made to the Local Feed-in-Tariff Power Purchase Agreement Before the Governing Board of
Pioneer Community Energy
Resolution No.: ____________
The following Resolution was duly passed by the Governing Board of Pioneer Community Energy at a regular meeting held March 20, 2025, by the following vote on roll call:
Ayes:
Noes:
Absent:
Signed and approved by me after its passage.
______________________________
Chair of the Governing Board
Attest:
_______________________
Secretary
WHEREAS, this Resolution Amending Resolution 2023-33 (Authorizing a Local Feed-in Tariff Program) to include solar plus battery storage and stand-alone battery storage projects and change contract term to 10 years for Pioneer Community Energy (Pioneer) has been brought before the Governing Board; and
WHEREAS, the addition of the new project types to Pioneer’s local FIT program will help Pioneer attain its Vision of “Community Reinvestment” through incentivizing the development of energy projects in Pioneer’s service territory; and
WHEREAS, the Pioneer Local-FIT should spur more local projects through providing competitive above market prices for certain local renewable energy projects; and WHEREAS, the budget for the Pioneer Local-FIT has already been set by the Board of Directors in Resolution 2023-33 and is not to exceed fifteen million dollars in aggregate; and WHEREAS, upon approval of the Amendment to Pioneer’s Local-FIT program, Pioneer will procure according to the terms of the tariff until the approved budget is exhausted.
In the matter of: A RESOLUTION AMENDING
RESOLUTION 2023-33 (AUTHORIZING A
LOCAL FEED-IN TARIFF PROGRAM) TO
INCLUDE SOLAR PLUS BATTERY STORAGE
AND STAND-ALONE BATTERY STORAGE
PROJECTS AND CHANGE CONTRACT TERM
TO 10 YEARS
2 BE IT RESOLVED, the Governing Board of Pioneer Community Energy, State of California, hereby finds, declares, and resolves as follows:
1. The above recitals are true and correct.
2. The Governing Board hereby approves and authorizes the Amendment to Resolution 2023-33 (Authorizing a Local Feed-in Tariff Program) to include solar plus battery storage and stand-alone battery storage projects and change contract term to 10 years in substantially the form attached for Pioneer with a budget not to exceed fifteen million dollars in aggregate.
3. The Governing Board hereby approves and authorizes the use of the Power Purchase Agreement in substantially the form attached for the Pioneer Local-FIT program.
4. This Resolution shall take effect immediately upon its adoption.
Exhibits:
A. Draft Local Feed-in-Tariff
B. Draft Local Feed-in-Tariff Power Purchase Agreement
Resolution 2025-__
March 20, 2025
1 PIONEER LOCAL-FIT
Feed-In Tariff for Local Renewable Generation Projects
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2 Contents
Contents
I. Qualifications .......................................................................................................................................3 II. Eligible Resource..................................................................................................................................3 III. Eligible Territory ..................................................................................................................................3 IV. Terms and Conditions ...........................................................................................................................4 a) Application ...........................................................................................................................................4 b) Contract ................................................................................................................................................4 c) Interconnection .....................................................................................................................................5 d) CAISO ..................................................................................................................................................5 e) Metering ...............................................................................................................................................5 f) Permitting .............................................................................................................................................5 g) Site ........................................................................................................................................................5 V. Eligibility Criteria .................................................................................................................................6 a) Capacity ................................................................................................................................................6 b) Location ................................................................................................................................................6 c) Eligible Renewable Resource ...............................................................................................................6 d) Interconnection .....................................................................................................................................6 e) Deliverability Status .............................................................................................................................6 f) Site Control ..........................................................................................................................................6 g) Previous Experience .............................................................................................................................7 h) Related Applications or Executed Pioneer FIT PPAs ..........................................................................7 i) Description of Facility ..........................................................................................................................7 j) Assessment of Eligibility Criteria ........................................................................................................7 VI. Pioneer Local-FIT Application Assessment .........................................................................................8 a) Queue Assignment ...............................................................................................................................8 b) Review and Cure Period .......................................................................................................................8 c) Non-transferability of Queue Position .................................................................................................8 VII. Payment ................................................................................................................................................8 VIII. Contract Price .......................................................................................................................................9 IX. Glossary ..............................................................................................................................................10 Plf)NEER
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3 I. Qualifications
The Pioneer Local-FIT program provides Applicants the opportunity to sell qualifying energy and associated regulatory products to Pioneer Community Energy (Pioneer) from a suitable small-scale distributed renewable energy generation resource (as outlined in Section II Eligible Resources). This program is open to Eligible Resources with a minimum generating capacity of one Megawatt (MW) and a maximum generating capacity of ten (10) MW AC depending on the resource type. Furthermore, the project must satisfy the requirements found in Section V of this tariff (Eligibility Criteria). Applicants will be reviewed and processed on a first-come, first-served basis until the Pioneer Board of Directors’ approved budget has been exhausted. Once either of these thresholds is reached, the program will no longer accept applications. Applicants who are approved for the Pioneer Local-FIT program are required to enter into a non-negotiable long-term power purchase agreement (Pioneer Local-FIT PPA) for a contract length of ten (10) years.
A Facility wishing to participate in Pioneer Local-FIT program must not be part of a power purchase agreement or a Net Energy Metering agreement with Pioneer for deliveries from the same Eligible Resource.
Pioneer reserves the right to periodically update the tariff, application process, and the terms and conditions of the Pioneer Local-FIT, including modification or termination of the program, in its sole discretion. Pioneer is not bound to any obligation under the Pioneer Local-FIT until both Pioneer and Applicant mutually execute a Pioneer FIT PPA. Pioneer retains full discretion whether to proceed with any application and is under no obligation to enter into a Pioneer FIT PPA with any Applicant.
II. Eligible Resource
Under the Pioneer Local-FIT, an Eligible Resource consists of generation technologies defined as an Eligible Renewable Energy Resource in California Public Utilities Code Section 399.12 or Section 399.16 and as described in the most recent edition of the California Energy Commission (CEC) guidebook on the Renewables Portfolio Standard Eligibility. Pioneer will only accept the following renewable resources from Section 399.12:
● Biomass
● Small Hydroelectric
● Solar plus battery storage
● Stand-alone battery storage
III. Eligible Territory
The Pioneer Local-FIT is applicable to any Facility physically located and interconnected within Pioneer’s member jurisdiction service area. This currently includes the cities of Auburn, Colfax, Lincoln, Placerville, Grass Valley, Nevada City, and Rocklin, the town of Loomis, and the unincorporated areas of Placer County and El Dorado County within PG&E service territory.
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4 IV. Terms and Conditions
a) Application
Under the Pioneer Local-FIT, the Applicant must fill out and provide Pioneer, Pioneer’s standard Pioneer Local-FIT application (Application), which is subject to Pioneer’s approval or rejection of Applicant's participation in the Pioneer Local-FIT.
b) Contract
Upon approval of Applicant's Application, the Applicant is required to enter into the Pioneer Local-FIT PPA for a fixed delivery term of ten (10) years from Commercial Operation Date. As part of the Pioneer Local-FIT PPA, the Facility must deliver to Pioneer the agreed-upon generated electricity along with any environmental attributes and Regulatory Products associated with the generated electricity produced by the Facility.
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■ Pioneer and PG&E Roseville Electric SMUD ■ Uberty Energy 5 c) Interconnection
The Facility subject to the Pioneer Local-FIT is required to be interconnected within the Eligible Territory and must comply with the appropriate wholesale interconnection procedures established by Pacific Gas and Electric Company’s Electric Interconnection group and/or the California Independent System Operator (CAISO), collectively the Interconnection Provider. The Facility shall be subject to all necessary agreements with the Interconnection Provider to establish and maintain interconnection with the transmission or distribution system. A Facility subject to the Pioneer Local-FIT is required to be able to deliver the agreed-upon capacity in the Pioneer Local-FIT PPA as of the Initial Product Delivery Date.
Any Facility not meeting the requirements specified in the applicable interconnection procedures of the Interconnection Provider is not eligible to be part of the Pioneer Local-FIT. The Applicant is solely responsible for interconnection of the Facility, including the execution of all requisite agreements. d) CAISO
The Eligible Resource is required to comply with the CAISO Tariff, including but not limited to independently metering the Eligible Resource using a CAISO revenue meter, executing a CAISO Participating Generator Agreement, executing a CAISO Meter Service Agreement, and executing all other requisite agreements.
e) Metering
The Facility subject to the Pioneer Local-FIT is required to comply with all necessary rules and regulations when installing a meter for full buy/sell or excess sale agreements. The meter must be able to be read daily by means acceptable to the Interconnection Provider and Pioneer. Said meter must be a revenue-grade meter capable of separately metering the Facility and (unless approved by Pioneer) must be installed on the high side of the Facility’s step-up transformer. The Applicant is responsible for procuring and maintaining any and all communication systems required by the Interconnection Provider and Pioneer for retrieving meter data. All costs relating to the installation of the meter are the responsibility of the Applicant.
f) Permitting
A Pioneer Local-FIT Applicant is required to obtain all necessary permits from the requisite jurisdictional agency exercising authority over the subject matter and shall maintain said permits, as may be required, for the duration of the Pioneer Local-FIT PPA. After execution of the Pioneer Local-FIT PPA, the counterparty (previously the Applicant) must inform Pioneer of the progress of obtaining and keeping said permits.
g) Site
There can be only one exporting renewable energy facility, including the Eligible Resource, being developed or operating on or adjacent to an Assessor Parcel Number (APN) occupied, in part or fully, by Plf)NEER
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6 the Facility.
V. Eligibility Criteria
a) Capacity
The nameplate capacity and delivered energy of the Eligible Resource must be:
b) Location
The Facility must be physically located and interconnected within the Eligible Territory (see Section III above).
c) Eligible Renewable Resource
The Eligible Resource must utilize a fuel source meeting the eligibility criteria found in the CEC’s most recent edition of the RPS Eligibility guidebook (see Section II above). d) Interconnection
As part of the Application, the Applicant must provide documentation showing that the Facility has (i) passed all Fast Track screens, (ii) passed Supplemental Review, (iii) completed a System Impact Study in the Independent Study process, or (iv) completed a Phase 1 Study in the Cluster Study Process with the Interconnection Provider. Defined Terms that are not defined in the Pioneer Local-FIT have the meaning provided in the Interconnection Provider’s applicable tariff. e) Deliverability Status
Applicant must prove that at the time of submitting the Application, the Facility has, or will have, Full Capacity Deliverability by the Commercial Operation Date equal to no less than the installed generating capacity of the Facility.
f) Site Control
At the time of application submission, Applicant must provide documentary proof demonstrating full site control via ownership, lease, or an option to lease.
Min MW Max MW
Biomass 1 1
Small Hydroelectric 1 2
Solar plus battery storage 1 2
Stand-alone battery storage 1 10
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7 g) Previous Experience
As part of the Application, Applicant must provide three (3) references demonstrating successful completion of renewable energy projects. Failure to meet this requirement does not preclude Applicant from being accepted to participate in the Pioneer Local-FIT as long as Applicant is working with an established renewable energy project developer.
h) Related Applications or Executed Pioneer FIT PPAs
The Applicant must disclose any related entities, including but not limited to, Affiliates, Subsidiaries, or Parent companies, that have submitted or are intending to submit a Pioneer Local-FIT Application and have received or have entered into a Pioneer Local-FIT PPA. If Applicant has a preference for which Pioneer Local-FIT Application they wish to be chosen, the preference should be stated on their Application. Pioneer reserves the right to decline a Pioneer Local-FIT Application of any Applicant if Pioneer has extended a Pioneer Local-FIT PPA to an affiliated entity of the Applicant. i) Description of Facility
At the time of submission, the Applicant must include with their Application:
(i) A scaled map of the Facility site, displaying the layout of all key components of the Facility. This map should include the Facility name, nameplate capacity of the eligible resource in both DC and AC, and the latitude and longitude coordinates of the Eligible Resource’s location. Major cross streets should be marked, and the outer boundary of the Facility, along with all Assessor Parcel Numbers encompassing and adjacent to the facility, should be identified.
(ii) A single-line diagram that encompasses the Facility’s point of interconnection. j) Assessment of Eligibility Criteria
All decisions and determinations made by Pioneer regarding the interpretation of the foregoing eligibility criteria, and the Applicant’s satisfaction thereof, are final.
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8 VI. Pioneer Local-FIT Application Assessment
a) Queue Assignment
Pioneer will manage the Pioneer Local-FIT queue in the order of submission, following a first-come, first-served approach. The position in the queue will be determined by the date and time of submission of a complete and compliant Pioneer Local-FIT Application, as evaluated by Pioneer in a reasonable manner. Application should be sent to the email address specified in the Pioneer Local-FIT Application. b) Review and Cure Period
Upon receiving the Application, Pioneer will conduct a review to assess the Application for any missing information. If any deficiencies are identified by Pioneer, the Applicant will be notified and granted a ten (10) business day period (Cure Period) to rectify the identified issues while retaining their position in the queue. Failure to address the identified issues in the Application during the Cure Period will result in forfeiture of the Applicant’s position in the queue.
If Pioneer finds a material deficiency in the Application during the review, the Applicant will be notified of the incomplete application. Further assessment of the application will cease, and no queue position will be assigned. The Applicant may reapply to participate in the Pioneer Local-FIT program once all issues have been resolved. At that time, a queue position will be allocated to the Applicant, subject to Pioneer’s current capacity and budgetary availability.
Please note that all determinations made by Pioneer regarding completeness of a Pioneer Local-FIT Application are considered final. Once Pioneer has assessed the Application and deems it complete, Pioneer will notify the Applicant of their assigned position in the Pioneer Local-FIT queue. c) Non-transferability of Queue Position
The queue position is tied to the designated location of the Facility as initially specified in the original Application. Any alteration of the Facility’s location is regarded as a new resource, necessitating the submission of a new Pioneer Local-FIT Application.
VII. Payment
Under the Pioneer Local-FIT, Pioneer will compensate for all energy, environmental attributes, and capacity. This compensation will be based on the metered energy quantities multiplied by the Contract Price for the Delivery Term specified in the Pioneer Local-FIT PPA. The program sets annual limits on the amount of energy that is eligible for payment. The contract prices are found in Section VIII and will also be outlined in the Pioneer Local-FIT PPA.
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9 VIII. Contract Price
Pioneer will pay the Counterparty (previously the Applicant) the following prices per generation technology for energy and associated regulatory products:
Category Price
Brownfield Biomass
Agriculture Feedstock $115 per MWh
Forestry Feedstock $135 per MWh
Greenfield Biomass
Agriculture Feedstock $185 per MWh
Forestry Feedstock $200 per MWh
Small Hydroelectric $90 per MWh
Solar plus Battery Storage $140/MWh combined
Stand-alone Battery Storage $12/kW-mo (RA only)
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10 IX. Glossary
AC means Alternating Current
Affiliates means, with respect to any Person, each Person that directly or indirectly controls, is controlled by, or is under common control with such designated Person. For purposes of this definition and the definition of “Permitted Transferee”, “control”, “controlled by”, and “under common control with”, as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person.
Applicant means a person or entity that is in the process of submitting or has submitted a Pioneer Local-FIT Application.
Application means the Pioneer Local-FIT Application, which can be found on the Pioneer website.
Assessor Parcel Number means the number assigned to a piece of real property by the relevant tax assessor.
Brownfield Biomass means a Biomass facility on a piece of real property that has been abandoned or underutilized due to pollution from industrial waste.
CAISO means the California Independent System Operator.
CAISO Meter Service Agreement means the Meter Service Agreement administered by CAISO found on their website.
CAISO Participating Generator Agreement means the Participating Generator Agreement administered by CAISO as found on their website.
Cluster Study Process means the interconnection study process as administered by CAISO or PG&E.
Commercial Operation Date means the date on all conditions precedent to commercial operation of the Facility have been achieved and operation has begun.
Contract Price means the prices described in Section VIII. There will be no escalation of prices during the Delivery Term.
Counterparty means the Applicant has successfully submitted a Pioneer Local-FIT Application, and Pioneer has chosen the Applicant to execute a Pioneer Local-FIT PPA.
Cure Period means the period in time in which the Applicant is able to make corrections to a deficient Application as described in Section VI (b).
DC means Direct Current.
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11 Delivery Term means the period of time found in the Pioneer Local-FIT PPA in which the Counterparty must deliver the requisite Energy and Regulatory products to Pioneer.
Eligible Renewable Energy Resource means the definition provided in California Public Utilities Code Section 399.12 or Section 399.16 and as described in the most recent edition of the California Energy Commission (CEC) guidebook on the Renewables Portfolio Standard Eligibility.
Eligible Resources means the requirements described in Section II.
Eligible Territory means the requirements described in Section III.
Facility means the renewable energy electricity generating facility described in the Application.
Fast Track Process means the relevant interconnection process as found on the CAISO website or PG&E website.
Greenfield Biomass means a biomass facility to be built on a previously undeveloped site.
Independent Study means the relevant interconnection process as found on the CAISO website or PG&E website.
Interconnection Provider means the definition provided in Section IV(c).
Megawatt means 1,000,000 watts of electrical power.
Net Energy Metering means the type of agreements described by the CPUC as found on their website.
Notice to Proceed (NTP) means a notification letter indicating that performance should begin under a construction contract.
Parent Companies means a single entity that has a controlling interest in another company.
Permission To Operate means a letter from the relevant Interconnection Provider granting permission to connect to the grid.
Phase 1 Study means the relevant interconnection process as found on the CAISO website or PG&E website.
Pioneer means Pioneer Community Energy.
Power Purchase Agreement means an agreement to purchase energy and related regulatory products.
Subsidiaries means an entity that has more than 50% of its ownership held by another singular entity.
Supplemental Review means the relevant interconnection process as found on the CAISO website or PG&E website.
System Impact Study means the relevant interconnection process as found on the CAISO website or PG&E website.
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DRAFT
LOCAL FEED-IN-TARIFF
POWER PURCHASE AGREEMENT
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DRAFT
2 PIONEER FIT
POWER PURCHASE AGREEMNT
COVER SHEET
Seller: [Name of entity selling Energy & Regulatory Products to Pioneer] Buyer: Pioneer Community Energy
Description of Facility: [General location of Facility along with generator/storage type] Milestones:
Milestone Date for Completion
Proof of Site Control
Conditional Use Permits
Executed Interconnection Agreement
Guaranteed Construction Start Date
Obtain Full Capacity Deliverability Status
Initial Synchronization
Network Updates (if necessary)
Guaranteed Commercial Operation Date
Delivery Term: 10 Years
Expected Energy:
Contract Year Expected Energy (MWh)
1 2
3 4
5 6
7 8
9 10
DRAFT
3 Guaranteed Capacity: [Number in MW]
Storage Contract Capacity: [Number in MW – only applicable if project includes Storage Facility] Guaranteed Storage Availability: [Percentage to match with Section 4.10 – only applicable if project includes Storage Facility]
Guaranteed Efficiency Rate:
Contract Year Guaranteed Efficiency Rate
1 2
3 4
5 6
7 8
9 10
Minimum Efficiency Rate: [Percentage – only applicable if project includes Storage Facility] Contract Price:
The Renewable Rate will be:
Contract Year Renewable Rate
1 – 10 [$/MWh (flat) with no
escalation]
The Storage Rate will be:
Contract Year Renewable Rate
1 – 10 [$/kW-mo. (flat) with no
escalation]
Product:
Metered Energy.
Renewable Energy Credits (Portfolio Content Category 1) and any other Green Attributes associated with Metered Energy delivered at the Interconnection Point, net of storage losses if required by Law. Storage Capacity (if applicable).
Capacity Attributes, including any Resource Adequacy Benefits, associated with the Facility.
DRAFT
4 Ancillary Services obtained from the Facility.
All rights and products and attributes associated with the maximum dependable operating capability of the Storage Facility to be charged with, store, and discharge electric energy (if applicable).
Scheduling Coordinator: Buyer or Buyer’s third-party Scheduling Coordinator.
Development Security and Performance Security:
Development Security: [Eighty dollars per kilowatt ($80/kW) of Guaranteed Capacity plus eighty dollars per kilowatt ($80/kW) of Guaranteed Storage Capacity.]
Performance Security: [Eighty dollars per kilowatt ($80/kW) of Guaranteed Capacity plus eighty dollars per kilowatt ($80/kW) of Guaranteed Storage Capacity.]
DRAFT
5 Contents
ARTICLE 1 - DEFINITIONS ....................................................................................................................... 9
1.1 Contract Definitions ............................................................................................................................ 9
1.2 Rules of Interpretation. ..................................................................................................................... 24 ARTICLE 2 - TERM; CONDITION PRECEDENT .................................................................................. 25
2.1 Contract Term ................................................................................................................................... 25
2.2 Conditions Precedent. ....................................................................................................................... 25
2.3 Development Progress Reports ......................................................................................................... 26
2.4 Remedial Action Plan ....................................................................................................................... 27 ARTICLE 3 - PURCHASE AND SALE .................................................................................................... 27
3.1 Sale of Product .................................................................................................................................. 27
3.2 Sale of Green Attributes .................................................................................................................... 27
3.3 Imbalance Energy ............................................................................................................................. 27
3.4 Ownership of Renewable Energy Incentives .................................................................................... 28
3.5 Future Environmental Attributes....................................................................................................... 28
3.6 Test Energy........................................................................................................................................ 28
3.7 Capacity Attributes ............................................................................................................................ 29
3.8 CEC Certification and Verification ................................................................................................... 30
3.9 Non-Modifiable Standard Terms and Conditions ............................................................................. 30
3.10 Change in Law ................................................................................................................................ 31 ARTICLE 4 - OBLIGATIONS AND DELIVERIES .................................................................................. 32
4.1 Delivery............................................................................................................................................. 32
4.2 Titles and Risk of Loss...................................................................................................................... 32
4.3 Forecasting ........................................................................................................................................ 32
4.4 Reduction in Delivery Obligation. .................................................................................................... 34
4.5 Scheduling Coordinator Responsibilities. ......................................................................................... 34
4.6 WREGIS ........................................................................................................................................... 34
4.7 Financial Statements ......................................................................................................................... 36
4.8 Charging Energy Management ......................................................................................................... 36
4.9 Storage Capacity Tests (if applicable) ............................................................................................... 37
4.10 Guaranteed Storage Availability ..................................................................................................... 37 ARTICLE 5 - TAXES ................................................................................................................................. 37
5.1 Allocation of Taxes and Charges ....................................................................................................... 37
5.2 Cooperation ....................................................................................................................................... 38 DRAFT
6 ARTICLE 6 - MAINTENANCE OF THE FACILITY ............................................................................... 38
6.1 Maintenance of the Facility............................................................................................................... 38
6.2 Maintenance of Health and Safety .................................................................................................... 38 ARTICLE 7 - METERING ......................................................................................................................... 38
7.1 Metering ............................................................................................................................................ 38
7.2 Meter Verification ............................................................................................................................. 38 ARTICLE 8 - INVOICING AND PAYMENT; CREDIT ........................................................................... 39
8.1 Invoicing ........................................................................................................................................... 39
8.2 Payment............................................................................................................................................. 39
8.3 Books and Records ........................................................................................................................... 39
8.4 Payment Adjustments; Billing Errors ............................................................................................... 39
8.5 Billing Disputes ................................................................................................................................ 40
8.6 Netting of Payments .......................................................................................................................... 40
8.7 Seller’s Development Security .......................................................................................................... 40
8.8 Seller’s Performance Security ........................................................................................................... 41
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral ............................................. 41 ARTICLE 9 - NOTICES ............................................................................................................................. 42
9.1 Address for the Delivery of Notices .................................................................................................. 42
9.2 Acceptable Means of Delivering Notice ........................................................................................... 42 ARTICLE 10 - FORCE MAJEURE ........................................................................................................... 42
10.1 Definition ........................................................................................................................................ 42
10.2 No Liability if a Force Majeure Event Occurs ................................................................................ 43
10.3 Notice for Force Majeure ................................................................................................................ 43
10.4 Termination Following Force Majeure Event ................................................................................. 44 ARTICLE 11 - DEFAULTS; REMEDIES; TERMINATION ..................................................................... 44
11.1 Events of Default ............................................................................................................................ 44
11.2 Remedies; Declaration of Early Termination Date ......................................................................... 46
11.3 Termination Payment ...................................................................................................................... 47
11.4 Notice of Payment of Termination Payment ................................................................................... 47
11.5 Disputes with Respect to Termination Payment .............................................................................. 47
11.6 Rights and Remedies are Cumulative ............................................................................................. 48 ARTICLE 12 - LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES ........................ 48
12.1 No Consequential Damages ............................................................................................................ 48
12.2 Waiver and Exclusion of Other Damages ....................................................................................... 48 ARTICLE 13 - REPRESENTATIONS AND WARRANTIES; AUTHORITY .......................................... 48 DRAFT
7 13.1 Seller’s Representations and Warranties ......................................................................................... 49
13.2 Buyer’s Representations and Warranties ......................................................................................... 49
13.3 General Covenants .......................................................................................................................... 50
13.4 Seller Covenants ............................................................................................................................. 51 ARTICLE 14 - ASSIGNMENT .................................................................................................................. 51
14.1 General Prohibition of Assignments ............................................................................................... 51
14.2 Collateral Assignment ..................................................................................................................... 51
14.3 Permitted Assignment by Seller ...................................................................................................... 53 ARTICLE 15 - DISPUTE RESOLUTION ................................................................................................. 53
15.1 Venue ............................................................................................................................................... 53
15.2 Dispute Resolution .......................................................................................................................... 54
15.3 Attorney’s Fees ................................................................................................................................ 54 ARTICLE 16 - INDEMNIFICATION ........................................................................................................ 54
16.1 Indemnification ............................................................................................................................... 54
16.2 Claims ............................................................................................................................................. 54 ARTICLE 17 - INSURANCE ..................................................................................................................... 55
17.1 Insurance ......................................................................................................................................... 55 ARTICLE 18 - CONFIDENTIAL INFORMATION .................................................................................. 57
18.1 Definition of Confidential Information ........................................................................................... 57
18.2 Duty to Maintain Confidentiality .................................................................................................... 57
18.3 Irreparable Injury; Remedies .......................................................................................................... 58
18.4 Disclosure to Lenders ..................................................................................................................... 58
18.5 Press Releases ................................................................................................................................. 58 ARTICLE 19 - MISCELLANEOUS .......................................................................................................... 58
19.1 Entire Agreement; Integration; Exhibits ......................................................................................... 58
19.2 Amendments ................................................................................................................................... 58
19.3 No Waiver ....................................................................................................................................... 58
19.4 No Agency, Partnership, Joint Venture, or Lease ............................................................................ 59
19.5 Severability ..................................................................................................................................... 59
19.6 Mobile-Sierra .................................................................................................................................. 59
19.7 Counterparts .................................................................................................................................... 59
19.8 Electronic Delivery ......................................................................................................................... 59
19.9 Binding Effect ................................................................................................................................. 59
19.10 No Recourse .................................................................................................................................. 59
19.11 Change in Electric Market Design ................................................................................................ 60 DRAFT
8 19.12 Forward Contract .......................................................................................................................... 60
19.13 Further Assurances ........................................................................................................................ 60 EXHIBIT A - FACILITY DESCRIPTION ................................................................................................. 62 EXHIBIT B - FACILITY CONSTRUCTION AND COMMERCIAL OPERATION ................................ 63 EXHIBIT C - COMPENSATION ............................................................................................................... 66 EXHIBIT D - SCHEDULING COORDINATOR RESPONSIBILITIES .................................................. 67 EXHIBIT E - PROGRESS REPORTING FORM ...................................................................................... 69 EXHIBIT F1 - FORM OF AVERAGE EXPECTED ENERGY REPORT ................................................. 70 EXHIBIT F2 - FORM OF MONTHLY AVAILABLE CAPACITY REPORT ........................................... 71 EXHIBIT G - FORM OF COMMERCIAL OPERATION DATE CERTIFICATE .................................... 72 EXHIBIT H1 - FORM OF INSTALLED PV CAPACITY CERTIFICATE ............................................... 74 EXHIBIT H2 - FORM OF INSTALLED BATTERY CAPACITY CERTIFICATE ................................... 75 EXHIBIT I - FORM OF CONSTRUCTION START DATE CERTIFICATE ............................................ 76 EXHIBIT J - FORM OF LETTER OF CREDIT ........................................................................................ 77 Exhibit 1 - Drawing Certificate ............................................................................................................... 79 EXHIBIT K - FORM OF GUARANTY ..................................................................................................... 81 EXHIBIT L - NOTICES ............................................................................................................................. 87 EXHIBIT M - STORAGE AVAILABILITY .............................................................................................. 89 EXHIBIT N - STORAGE CAPACITY TESTS .......................................................................................... 91 EXHIBIT O - OPERATING RESTRICTIONS .......................................................................................... 98 EXHIBIT P - METERING DIAGRAM .................................................................................................... 100 DRAFT
9 RECITALS
WHEREAS, Seller will develop, design, permit, construct, own, control, and operate the Facility; and WHEREAS, Seller intends to sell, and Buyer intends to purchase, per the terms and conditions of this Agreement, the product;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledges, the Parties agree to the following:
ARTICLE 1 - DEFINITIONS
1.1 Contract Definitions
When used within this Agreement with capitalization of the first letter of each word, the following terms will have the meanings established below:
“AC” means alternating current.
“Accepted Compliance Costs” has the meaning established in Section 3.10. “Adjusted Energy Production” means Expected Energy minus the amount of Energy that would have been delivered by the Facility but was not due to either (i) a Force Majeure Event, (ii) a Curtailment Order, or (iii) an Event of Default with respect to Buyer. “Affiliate” means with respect to any Person, each Person that directly or indirectly controls, is controlled by, or is under common control with such designated Person. For purposes of this definition and the definition of “Permitted Transferee”, “control”, “controlled by”, and “under common control with”, as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person.
“Agreement” has the meaning set forth in the Preamble and includes any Exhibits, schedules and any written supplements hereto, the Cover Sheet, and any designated collateral, credit support or similar arrangement between the Parties.
“Ancillary Services” means all ancillary services, products and other attributes, if any, associated with the Facility.
“Automated Dispatch System” or “ADS” has the meaning provided in the CAISO Tariff. “Available Capacity” means the capacity of the Facility, expressed in whole MWs, that is mechanically available to generate Energy.
“Bankrupt” or “Bankruptcy” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any DRAFT
10 such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due.
“Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday in California. A Business Day begins at 8:00 a.m. and ends at 5:00 p.m. Pacific Prevailing Time for the Party sending a Notice, or payment, or performing a specified action. “Buyer” means Pioneer Community Energy, a California joint powers authority. “Buyer Default” means an Event of Default by Buyer.
“Buyer’s WREGIS Account” has the meaning provided in Section 4.6(a) of this Agreement. “CAISO” means the California Independent System Operator Corporation or any successor entity performing similar or the same functions.
“CAISO Approved Meter” means a CAISO approved revenue quality meter, CAISO approved data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, all Facility Energy delivered to the Delivery Point.
“CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Operating Order” means the “operating order” defined in Section 37.2.1.1 of the CAISO Tariff.
“CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC.
“California Renewables Portfolio Standard” or “RPS” means the renewable energy program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time “Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct, including any of the same counted towards any current or future resource adequacy or reserve requirements, associated with the electric generation capability and capacity of the Facility or the Facility’s capability and ability to produce and deliver energy. Capacity Attributes shall be deemed to include all Resource Adequacy Benefits, if any, associated with the Facility. Capacity Attributes are measured in MW and shall exclude Energy, Green Attributes, and PTCs or any other Renewable Energy Incentives now or in the future associated with the construction, ownership or operation of the Facility.
“Capacity Damages” has the meaning set forth in Exhibit B.
DRAFT
11 “CEC” means the California Energy Commission, or any successor agency performing similar statutory functions.
“CEC Certification and Verification” means that the CEC has certified (or, with respect to periods before the date that is ninety (90) days following the Commercial Operation Date, that the CEC has pre-certified) that the Facility is an Eligible Renewable Energy Resource for purposes of the California Renewables Portfolio Standard and that all Facility Energy delivered to the Delivery Point qualifies as generation from an Eligible Renewable Energy Resource. “CEC Precertification” means that the CEC has issued a precertification for the Facility indicating that the planned operations of the Facility would comply with applicable CEC requirements for CEC Certification and Verification.
“CEQA” means the California Environmental Quality Act.
“Charging Energy” means the as-available Energy produced by the Generating Facility, less transformation and transmission losses, if any, delivered to the Storage Facility pursuant to a Charging Notice or in connection with a Storage Capacity Test. All Charging Energy shall be used solely to charge the Storage Facility, and all Charging Energy shall be generated solely by the Generating Facility
“Commercial Operation” has the meaning set forth in Exhibit B. “Commercial Operation Date” has the meaning set forth in Exhibit B. “Commercial Operation Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) sixty (60). “Compliance Actions” has the meaning set forth in Section 3.10. “Compliance Expenditure Cap” has the meaning set forth in Section 3.10. “Confidential Information” has the meaning set forth in Section 18.1. “Construction Start” has the meaning set forth in Exhibit B. “Construction Start Date” has the meaning set forth in Exhibit B. “Contract Price” has the meaning set forth on the Cover Sheet. For the avoidance of any confusion or doubt, if the Facility includes a Storage Facility, the Contract Price is each of the Renewable Rate and the Storage Rate.
“Contract Term” has the meaning set forth in Section 2.1. “Contract Year” means a period of twelve (12) consecutive months. The first Contract Year shall commence on the Commercial Operation Date and each subsequent Contract Year shall commence on the anniversary of the Commercial Operation Date. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third-party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace the Agreement; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating and replacing this Agreement.
DRAFT
12 “Cover Sheet” means the cover sheet to this Agreement, which is incorporated into this Agreement.
“CPUC” means the California Public Utilities Commission or any successor agency performing the same or similar statutory functions.
“Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P or Moody’s. If ratings by S&P and Moody’s are not equivalent, the lower rating shall apply. “Curtailment Order” means any of the following:
(a) CAISO orders, directs, alerts, or provides notice to a Party, including through the ADS or a CAISO Operating Order, to curtail deliveries of Facility Energy for the following reasons: (i) any System Emergency, or (ii) any warning of an anticipated System Emergency, or warning of an imminent condition or situation, which jeopardizes CAISO’s electric system integrity or the integrity of other systems to which CAISO is connected; (b) a curtailment ordered by the Participating Transmission Owner or distribution operator (if interconnected to distribution or sub-transmission system) for reasons including, but not limited to, (i) any situation that affects normal function of the electric system including, but not limited to, any abnormal condition that requires action to prevent circumstances such as equipment damage, loss of load, or abnormal voltage conditions, or (ii) any warning, forecast or anticipation of conditions or situations that jeopardize the Participating Transmission Owner’s electric system integrity or the integrity of other systems to which the Participating Transmission Owner is connected;
(c) a curtailment ordered by CAISO or the Participating Transmission Owner due to scheduled or unscheduled maintenance on the Participating Transmission Owner’s transmission facilities that prevents (i) Buyer from receiving or (ii) Seller from delivering Facility Energy to the Delivery Point; or
(d) a curtailment in accordance with Seller’s obligations under its Interconnection Agreement with the Participating Transmission Owner or distribution operator. “Daily Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) one hundred twenty (120). “Damage Payment” means the dollar amount that equals the amount of the Development Security. “Day” or “day” means a period of twenty-four (24) consecutive hours beginning at 00:00 hours Pacific Prevailing Time on any calendar day and ending at 00:00 hours Pacific Prevailing Time on the next calendar day.
“Day-Ahead LMP” has the meaning set forth in the CAISO Tariff. “Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Day-Ahead Schedule” has the meaning set forth in the CAISO Tariff. “Defaulting Party” has the meaning set forth in Section 11.1(a). “Deficient Month” has the meaning set forth in Section 4.6(e).
DRAFT
13 “Delay Damages” means Daily Delay Damages and Commercial Operation Delay Damages. “Delivery Point” has the meaning set forth in Exhibit A. “Delivery Term” shall mean the period of Contract Years set forth on the Cover Sheet beginning on the Commercial Operation Date, unless terminated earlier in accordance with the terms and conditions of this Agreement.
“Development Cure Period” has the meaning set forth in Exhibit B. “Development Security” means (i) cash or (ii) a Letter of Credit in the amount set forth on the Cover Sheet.
“Discharging Energy” means all Energy delivered to the Delivery Point from the Storage Facility, as measured at the Storage Facility Metering Points by the Storage Facility Meter. For the avoidance of doubt, all Discharging Energy will have originally been delivered to the Storage Facility as Charging Energy.
“Discharging Notice” means the operating instruction, and any subsequent updates, given by Buyer to Seller, directing the Storage Facility to discharge Discharging Energy at a specific MW rate to a specified Stored Energy Level, provided that any such operating instruction or updates shall be in accordance with the Operating Procedures. For the avoidance of doubt, any Discharging Notice shall not constitute a Curtailment Order. “Early Termination Date” has the meaning set forth in Section 11.2. “Effective Date” has the meaning set forth on the Preamble. “Effective FCDS Date” means the date identified in Seller’s Notice to Buyer (along with a Full Capacity Deliverability Status Finding from CAISO) as the date that the Facility has attained Full Capacity Deliverability Status.
“Electrical Losses” means all transmission or transformation losses between the Facility and the Delivery Point, including losses associated with delivery of Energy to the Delivery Point. “Eligible Renewable Energy Resource” has the meaning set forth in California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25741(a), as either code provision is amended or supplemented from time to time. “Energy” means electrical energy (measured in MWh) generated by the Facility. “Energy Supply Bid” has the meaning set forth in the CAISO Tariff. “Event of Default” has the meaning set forth in Section 11.1. “Excess MWh” has the meaning set forth in Exhibit C.
“Expected Commercial Operation Date” is the date set forth on the Cover Sheet by which Seller reasonably expects to achieve Commercial Operation. “Expected Construction Start Date” is the date set forth on the Cover Sheet by which Seller reasonably expects to achieve Construction Start.
DRAFT
14 “Expected Energy” means the quantity of Energy that Seller expects to be able to deliver to Buyer from the Facility during each Contract Year in the quantity specified on the Cover Sheet. “Expected FCDS Date” means the date set forth in the deliverability Section of the Cover Sheet, which is the date the Facility is expected to achieve Full Capacity Deliverability Status. “Facility” means the electricity generating facility described on the Cover Sheet and in Exhibit A, located at the Site and including mechanical equipment and associated facilities and equipment required to deliver Energy to the Delivery Point. In the case that the project includes a Storage Facility, then the definition of Facility will include the Generating Facility and the Storage Facility.
“Facility Energy” means the sum of PV Energy and (if applicable) Discharging Energy during any Settlement Interval or Settlement Period, net of Electrical Losses and Station Use, as measured by the Facility Meter, which Facility Meter will be adjusted in accordance with CAISO meter requirements and Prudent Industry Practices to account for Electrical Losses and Station Use.
“Facility Meter” means the CAISO Approved Meter that will measure all Facility Energy.
Without limiting Seller’s obligation to deliver Facility Energy to the Delivery Point, the Facility Meter will be located, and Facility Energy will be measured, at the low voltage side of the main step up transformer and will be subject to adjustment in accordance with CAISO meter requirements and Prudent Industry Practices to account for Electrical Losses and Station Use. “FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“Financial Close” means Seller and/or one of its Affiliates has obtained debt and/or equity financing commitments from one or more Lenders sufficient to construct the Facility, including such financing commitments from Seller’s owner(s).
“Force Majeure Event” has the meaning set forth in Section 10.1. “Forced Facility Outage” means an unplanned reduction, interruption or suspension of all or a portion of Energy deliveries from the Facility to the Delivery Point due to events or conditions outside the control of Seller and are not the result of a Force Majeure Event or Planned Outage. “Forward Certificate Transfers” has the meaning set forth in Section 4.6(a). “Full Capacity Deliverability Status” has the meaning set forth in the CAISO Tariff. “Full Capacity Deliverability Status Finding” means a written confirmation from the CAISO that the Facility is eligible for Full Capacity Deliverability Status. “Future Environmental Attributes” shall mean any and all generation attributes other than Green Attributes or Renewable Energy Incentives under the RPS regulations or under any and all other international, federal, regional, state or other law, rule, regulation, bylaw, treaty or other intergovernmental compact, decision, administrative decision, program (including any voluntary compliance or membership program), competitive market or business method (including all credits, certificates, benefits, and emission measurements, reductions, offsets and allowances related thereto) that are attributable, now, or in the future, to the generation of electrical energy by the Facility. Future Environmental Attributes do not include investment tax credits or production DRAFT
15 tax credits associated with the construction or operation of the Facility, or other financial incentives in the form of credits, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation. “Gains” means, with respect to the Non-Defaulting Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner, which economic benefit (if any) shall be deemed the gain (if any) to such Non-Defaulting Party represented by the difference between the present value of the payments required to be made during the remaining Contract Term of this Agreement and the present value of the payments that would be required to be made under any transaction(s) replacing this Agreement. Factors used in determining the economic benefit to a Party may include reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., NP-15), all of which should be calculated for the remaining Contract Term, and include the value of Green Attributes and Capacity Attributes. “Generating Facility” means the renewable energy electricity generating facility described on the Cover Sheet and in Exhibit A, located at the Site and including mechanical equipment and associated facilities and equipment required to deliver (i) PV Energy to the Delivery Point, (ii) Charging Energy to the Storage Facility and (iii) Discharging Energy to the Delivery Point; provided, that the “Generating Facility” does not include the Storage Facility. “Governmental Authority” means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO; provided, however, that “Governmental Authority” shall not in any event include any Party hereto. “Green Attributes” means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the generation from the Facility and its displacement of conventional energy generation. Green Attributes include but are not limited to Renewable Energy Credits, as well as: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; (3) the reporting rights to these avoided emissions, such as Green Tag Reporting Rights. Green Tags are accumulated on a MWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Facility Energy. Green Attributes do not include (i) any energy, capacity, reliability or other power attributes from the Facility, (ii) production tax credits associated with the construction or operation of the Facility and other financial incentives in the form of credits, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular preexisting pollutants or the promotion DRAFT
16 of local environmental benefits, or (iv) emission reduction credits encumbered or used by the Facility for compliance with local, state, or federal operating or air quality permits. “Green Tag Reporting Rights” means the right of a purchaser of renewable energy to report ownership of accumulated “green tags” in compliance with and to the extent permitted by applicable Law and include rights under Section 1605(b) of the Energy Policy Act of 1992, and any present or future federal, state or local certification program or emissions trading program, including pursuant to the WREGIS Operating Rules.
“Guaranteed Capacity” means the amount of generating capacity of the Facility, as measured in MW at the Delivery Point, set forth on the Cover Sheet. “Guaranteed Commercial Operation Date” means the Expected Commercial Operation Date, as such date may be extended by the Development Cure Period. “Guaranteed Construction Start Date” means the Expected Construction Start Date, as such date may be extended by the Development Cure Period.
“Guaranteed Efficiency Rate” means the percentage specified on the Cover Sheet if applicable. “Guaranteed Storage Availability” has the meaning set forth in Section 4.10 if applicable. “Guarantor” means, with respect to Seller, any Person that (a) does not already have any material credit exposure to Buyer under any other agreements, guarantees, or other arrangements at the time its Guaranty is issued, (b) is an Affiliate of Seller, or other third party reasonably acceptable to Buyer, (c) has a Credit Rating of BBB- or better from S&P or a Credit Rating of Baa3 or better from Moody’s, (d) is incorporated or organized in a jurisdiction of the United States and is in good standing in such jurisdiction, and (e) executes and delivers a Guaranty for the benefit of Buyer.
“Guaranty” means a payment guaranty from a Guarantor provided for the benefit of Buyer substantially in the form attached as Exhibit L or in such other form as is reasonably acceptable to Buyer.
“Imbalance Energy” means the amount of energy in MWh, in any given Settlement Period or Settlement Interval, by which the amount of Facility Energy deviates from the amount of Scheduled Energy.
“Indemnified Party” has the meaning set forth in Section 16.1. “Indemnifying Party” has the meaning set forth in Section 16.1. “Initial Synchronization” means the initial delivery of Facility Energy to the Delivery Point. “Installed Battery Capacity” means the maximum dependable operating capability of the Storage Facility to discharge electric energy, as measured in MW at the Storage Facility Meter, that achieves Commercial Operation, adjusted for ambient conditions on the date of the performance test, and as evidenced by a certificate substantially in the form attached as Exhibit I-2 hereto. “Installed Capacity” means the actual generating capacity of the Facility, as measured in MW at the Delivery Point, that achieves Commercial Operation (whether prior to, on, or after the Guaranteed Commercial Operation Date), adjusted for ambient conditions on the date of the DRAFT
17 performance test, not to exceed the Guaranteed Capacity, as evidenced by a certificate(s) substantially in the form attached as Exhibit H hereto. “Interconnection Agreement” means the interconnection agreement(s) entered into by Seller with the CAISO, the Participating Transmission Owner and/or the distribution operator pursuant to which the Facility will be interconnected with the Transmission System and pursuant to which Seller’s Interconnection Facilities and any other Interconnection Facilities, as applicable, will be constructed, operated and maintained during the Contract Term. “Interconnection Facilities” means the interconnection facilities, control and protective devices and metering facilities required to connect the Facility with the Transmission System in accordance with the Interconnection Agreement.
“Interest Rate” has the meaning set forth in Section 8.2. “Interim Deliverability Status” has the meaning set forth in the CAISO Tariff. “Inter-SC Trade” or “IST” has the meaning set forth in the CAISO Tariff. “ITC” means the investment tax credit established pursuant to Section 48 of the United States Internal Revenue Code of 1986.
“Joint Powers Act” means the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.).
“Joint Powers Agreement” means that certain Joint Powers Agreement dated December 19, 2008, as amended from time to time, under which Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act.
“Law” means any applicable law, statute, rule, regulation, decision, writ, order, decree or judgment, permit or any interpretation thereof, promulgated or issued by a Governmental Authority.
“Lender” means, collectively, any Person (i) providing credit support, senior or subordinated construction, interim, back leverage or long-term debt, working capital, equity or tax equity financing or refinancing for or in connection with the development, construction, purchase, installation, operation, maintenance, repair, replacement or improvement of the Facility, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including tax equity), public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or refinancing for the Facility or purchasing equity ownership interests of Seller or its Affiliates, and any trustee or agent or similar representative acting on their behalf, (ii) providing Interest Rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations or (iii) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Facility.
“Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a Qualified Issuer in a form substantially similar to the letter of credit set forth in Exhibit K. “Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the State of California.
DRAFT
18 “Local Capacity Area Resources” has the meaning set forth in the CAISO Tariff. “Locational Marginal Price” or “LMP” has the meaning set forth in the CAISO Tariff. “Losses” means, with respect to the Non-Defaulting Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner, which economic loss (if any) shall be deemed to be the loss (if any) to such Party represented by the difference between the present value of the payments required to be made during the remaining Contract Term of this Agreement and the present value of the payments that would be required to be made under transaction(s) replacing this Agreement. Factors used in determining economic loss to a Party may include reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., NP-15), all of which should be calculated for the remaining Contract Term and must include the value of Green Attributes, Capacity Attributes, and Renewable Energy Incentives.
“Master File” has the meaning set forth in the CAISO Tariff. “Milestones” means the development activities for significant permitting, interconnection, financing and construction milestones set forth on the Cover Sheet. “Minimum Efficiency Rate” means the percentage specified on the Cover Sheet if applicable. “Moody’s” means Moody’s Investors Service, Inc.
“MW” means megawatts in alternating current, unless expressly stated in terms of direct current. “MWh” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“Negative LMP” means, in any Settlement Period or Settlement Interval, the LMP at the Facility’s PNode is less than Zero dollars ($0).
“Net Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “Network Upgrades” has the meaning set forth in the CAISO Tariff. “Non-Defaulting Party” has the meaning set forth in Section 11.2. “Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or electronic messaging (e-mail).
“NP-15” means the Existing Zone Generation Trading Hub for Existing Zone region NP15 as set forth in the CAISO Tariff.
“Operating Procedures” or “Operating Restrictions” means those rules, requirements, and procedures set forth on Exhibit P.
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19 “Pacific Prevailing Time” means the prevailing standard time or daylight savings time, as applicable, in the Pacific time zone.
“Participating Transmission Owner” or “PTO” means an entity that owns, operates and maintains transmission or distribution lines and associated facilities and/or has entitlements to use certain transmission or distribution lines and associated facilities where the Facility is interconnected. For purposes of this Agreement, the Participating Transmission Owner is set forth in Exhibit A.
“Party” or “Parties” has the meaning set forth in the Preamble. “Performance Security” means (i) cash, or (ii) a Letter of Credit or (iii) a Guaranty, in the amount set forth on the Cover Sheet.
“Permitted Transferee” means and entity that has, or is controlled by another Person that satisfies the following requirements:
(a) A tangible net worth of not less than one hundred fifty million dollars ($150,000,000) or a Credit Rating of at least BBB- from S&P, BBB- from Fitch, or Baa3 from Moody’s; and (b) At least two (2) years of experience in the ownership and operations of power generation facilities similar to the Facility, or has retained a third-party with such experience to operate the Facility.
“Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“PNode” has the meaning set forth in the CAISO Tariff.
“Planned Outage” has the meaning set forth in Section 4.4(a). “Portfolio Content Category” means PCC1, PCC2 or PCC3, as applicable. “Portfolio Content Category 1” or “PCC1” means any Renewable Energy Credit associated with the generation of electricity from an Eligible Renewable Energy Resource consisting of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(1), as may be amended from time to time or as further defined or supplemented by Law. “Portfolio Content Category 2” or “PCC2” means any Renewable Energy Credit associated with the generation of electricity from an Eligible Renewable Energy Resource consisting of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(2), as may be amended from time to time or as further defined or supplemented by Law. “Portfolio Content Category 3” or “PCC3” means any Renewable Energy Credit associated with the generation of electricity from an Eligible Renewable Energy Resource consisting of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(3), as may be amended from time to time or as further defined or supplemented by Law. “Product” has the meaning set forth on the Cover Sheet. “Progress Report” means a progress report including the items set forth in Exhibit E.
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20 “Prudent Industry Practice” means the applicable practices, methods and standards of care, skill and diligence engaged in or approved by a significant portion of the electric generation industry during the relevant time period with respect to grid-interconnected, utility-scale electricity generating facilities in the Western United States, that, in the exercise of reasonable judgment and in light of the facts known at the time the decision was made, would have been expected to accomplish results consistent with Law, reliability, safety, environmental protection, and standards of economy and expedition. Prudent Industry Practice is not intended to be limited to the optimum practice, method or act to the exclusion of others. Prudent Industry Practice includes compliance with applicable Laws, applicable reliability criteria, and the criteria, rules and standards promulgated in the National Electric Safety Code and the National Electrical Code, as they may be amended or superseded from time to time, including the criteria, rules and standards of any successor organizations.
“PTC” means the production tax credit established pursuant to Section 45 of the United States Internal Revenue Code of 1986.
“PV Energy” means that portion of Energy that is delivered directly to the Delivery Point and is not Charging Energy or Discharging Energy.
“Qualified Issuer” means a U.S. commercial bank or a foreign bank with a U.S. branch with such bank (a) having a Credit Rating of at least A- with an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s or (b) ) being reasonably acceptable to Buyer.
“Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “RA Deficiency Amount” has the meaning set forth in Section 3.7(d). “RA Guarantee Date” means the Commercial Operation Date, or as may be extended up to one (1) year due to delays in Full Capacity Deliverability Status caused by the Participating Transmission Owner.
“RA Showing” means the Resource Adequacy Requirements compliance or advisory showings (or similar or successor showings) that Buyer is required to make to the CPUC (and, to the extent authorized by the CPUC, to CAISO), pursuant to the Resource Adequacy Rulings, to CAISO pursuant to the CAISO Tariff, or to any Governmental Authority having jurisdiction. “Real-Time Market” has the meaning set forth in the CAISO Tariff. “Real-Time Price” means the Resource-Specific Settlement Interval LMP as defined in the CAISO Tariff. If there is more than one applicable Real-Time Price for the same period of time, Real-Time Price shall mean the price associated with the smallest time interval. “Remedial Action Plan” has the meaning in Section 2.4.
“Renewable Energy Credit” has the meaning set forth in California Public Utilities Code Section 399.12(h), as may be amended from time to time or as further defined or supplemented by Law.
“Renewable Energy Incentives” means: (a) all federal, state, or local Tax credits or other Tax Benefits associated with the construction, ownership, or production of electricity from the Facility (including credits under Sections 38, 45, 46 and 48 of the Internal Revenue Code of 1986, as DRAFT
21 amended); (b) any federal, state, or local grants, subsidies or other like benefits relating in any way to the Facility; and (c) any other form of incentive relating in any way to the Facility that is not a Green Attribute or a Future Environmental Attribute. “Renewable Rate” has the meaning set forth on the Cover Sheet. “Resource Adequacy” means the procurement obligation of load serving entities, as such obligations are described in CPUC Decisions D.04-10-035 and D.05-10-042 and subsequent CPUC decisions addressing Resource Adequacy issues, as those obligations may be altered from time to time in the CPUC Resource Adequacy Rulemakings (R.) 04-04-003, R.05-12-013, R.10- 04-012 and R.11-10-023 or by any successor proceeding, and the Resource Adequacy supply obligations of generators provided in the CAISO Tariff, including Section 40 of such Tariff. “Resource Adequacy Benefits” means the rights and privileges attached to the Facility that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in any Resource Adequacy Rulings and includes any local, zonal or otherwise locational attributes associated with the Facility, in addition to flex attributes. “Resource Adequacy Rulings” means CPUC Decisions 04 01 050, 04 10 035, 05 10 042, 06 04 040, 06 06 064, 06 07 031 06 07 031, 07 06 029, 08 06 031, 09 06 028, 10 06 036, 11 06 022, 12 06 025, 13 06 024 and any other existing or subsequent ruling or decision, or any other resource adequacy Law, however described, as such decisions, rulings, Laws, rules or regulations may be amended or modified from time-to-time throughout the Delivery Term. “Round-Trip Efficiency Factor” means (a) if the Efficiency Rate is greater than or equal to the Guaranteed Efficiency Rate, one hundred percent (100%), (b), if the Efficiency Rate is less than the Guaranteed Efficiency Rate, but greater than or equal to the Minimum Efficiency Rate, the Efficiency Rate, or (c) if the Efficiency Rate is less than the Minimum Efficiency Rate, zero percent (0%).
“S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of The McGraw-Hill Companies, Inc.) or its successor.
“Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” has a corollary meaning.
“Scheduled Energy” means the Facility Energy that clears under the applicable CAISO market based on the final Day-Ahead Schedule, FMM Schedule (as defined in the CAISO Tariff), or any other financially binding Schedule, market instruction or dispatch for the Facility for a given period of time implemented in accordance with the CAISO Tariff. “Scheduling Coordinator” or “SC” means an entity certified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff for the purposes of undertaking the functions specified in “Responsibilities of a Scheduling Coordinator,” of the CAISO Tariff, as amended from time to time.
“Security Interest” has the meaning set forth in Section 8.9. “Self-Schedule” has the meaning set forth in the CAISO Tariff. “Seller” has the meaning set forth on the Cover Sheet.
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22 “Seller’s WREGIS Account” has the meaning set forth in Section 4.6(a). “Settlement Amount” means the Non-Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Party. If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be zero dollars ($0). The Settlement Amount does not include consequential, incidental, punitive, exemplary or indirect or business interruption damages. “Settlement Interval” has the meaning set forth in the CAISO Tariff. “Settlement Period” has the meaning set forth in the CAISO Tariff. “Site” means the necessary real property on which the Facility is or will be located, as further described in Exhibit A, and as shall be updated by Seller at the time Seller provides an executed Construction Start Date certificate in the form of Exhibit I to Buyer. “Site Control” means that, for the Contract Term, Seller (or, prior to the Delivery Term, its Affiliate): (a) owns or has the option to purchase the Site; (b) is the lessee or has the option to lease the Site; or (c) is the holder of an easement or an option for an easement, right-of-way grant, or similar instrument with respect to the Site.
“Station Use” means:
(a) The Energy produced by the Facility that is used within the Facility to power the lights, motors, control systems and other electrical loads that are necessary for operation of the Facility; and
(b) The Energy produced by the Facility that is consumed within the Facility’s electric energy distribution system as losses.
“Storage Capacity” if applicable means (a) the maximum dependable operating capability of the Storage Facility to discharge electric energy that can be sustained for four (4) consecutive hours (in MW) and (b) any other products that may be developed or evolve from time to time during the Delivery Term that the Storage Facility is able to provide as the Facility is configured on the Commercial Operation Date and that relate to the maximum dependable operating capability of the Storage Facility to discharge electric energy.
“Storage Capacity Test” or “SCT” if applicable means any test or retest of the capacity of the Storage Facility conducted in accordance with the testing procedures, requirements and protocols set forth in Section 4.9 and Exhibit R.
“Storage Contract Capacity” if applicable means the total capacity (in MW) of the Storage Facility initially equal to the amount set forth on the Cover Sheet, as the same may be adjusted from time to time to reflect the results of the most recently performed Storage Capacity Test. “Storage Facility” if applicable means the energy storage facility described on the Cover Sheet and in Exhibit A (including the operational requirements of the energy storage facility), located at the Site and including mechanical equipment and associated facilities and equipment required to deliver Storage Product, and as such storage facility may be expanded or otherwise modified from time to time in accordance with the terms of this Agreement.
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23 “Storage Facility Meter” if applicable means the bi-directional revenue quality meter or meters (with a 0.3 accuracy class), along with a compatible data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Charging Energy delivered to the Storage Facility Metering Points and the amount of Discharging Energy discharged from the Storage Facility at the Storage Facility Metering Points to the Delivery Point for the purpose of invoicing in accordance with Section 8.1.
“Storage Facility Metering Points” if applicable means the locations of the Storage Facility Meters at the Site.
“Storage Product” if applicable means (a) Discharging Energy, (b) Capacity Attributes, if any, (c) Storage Capacity, and (d) Ancillary Services, if any, in each case arising from or relating to the Storage Facility.
“Storage Rate” if applicable has the meaning set forth on the Cover Sheet. “Stored Energy Level” if applicable means, at a particular time, the amount of electric energy in the Storage Facility available to be discharged as Discharging Energy, expressed in MWh. “System Emergency” means any condition that requires, as determined and declared by CAISO or the PTO, automatic or immediate action to (i) prevent or limit harm to or loss of life or property, (ii) prevent loss of transmission facilities or generation supply in the immediate vicinity of the Facility, or (iii) to preserve Transmission System reliability. “Tax” or “Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Tax Credits” means the PTC, ITC and any other state, local or federal production tax credit, depreciation benefit, tax deduction or investment tax credit specific to the production of renewable energy or investments in renewable energy facilities. “Technology Bonus” has the meaning set forth in Exhibit C. “Terminated Transaction” has the meaning set forth in Section 11.2. “Termination Payment” has the meaning set forth in Section 11.3. “Test Energy” means Facility Energy delivered (a) commencing on the later of (i) the first date that the CAISO informs Seller in writing that Seller may deliver Facility Energy to the CAISO and (ii) the first date that the PTO informs Seller in writing that Seller has conditional or temporary permission to parallel and (b) ending upon the occurrence of the Commercial Operation Date.
“Test Energy Rate” has the meaning set forth in Section 3.6. “Transmission System” means the transmission, distribution or interconnection facilities that provide energy delivery services to the Delivery Point and/or the CAISO Grid, as applicable.
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24 “Variable Energy Resource” or “VER” has the meaning set forth in the CAISO Tariff. “WREGIS” means the Western Renewable Energy Generation Information System or any successor renewable energy tracking program.
“WREGIS Certificate Deficit” has the meaning set forth in Section 4.6(e). “WREGIS Certificates” has the same meaning as “Certificate” as defined by WREGIS in the WREGIS Operating Rules and are designated as eligible for complying with the California Renewables Portfolio Standard.
“WREGIS Operating Rules” means those operating rules and requirements adopted by WREGIS as of November 2023, as subsequently amended, supplemented or replaced (in whole or in part) from time to time.
1.2 Rules of Interpretation.
In the Agreement, unless context requires, or it is expressly stated otherwise:
(a) headings and text displayed in bold and italics are for solely for convenience and reference, and do not impact the meaning or interpretation of this Agreement; (b) words referring to the singular include the plural and vice versa, while gender-specific terms encompass all genders including the neuter genders;
(c) the words “herein”. “hereof”. And “hereunder” and words of similar meaning shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Article, Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless otherwise specified;
(e) when referring to a document or agreement, including this Agreement, it encompasses the document, agreement, or this Agreement itself, incorporating any amendments, supplements, replacements, novation, or modifications, while excluding any changes made in breach of said document, agreement, or this Agreement;
(f) any reference to a Person includes that Person’s successors and permitted assigns; (g) the terms “include” and “including” or similar expressions should be considered to be followed by the phrase “without limitation,” and any list of examples following such terms should not restrict or limit the general applicability of the work or provision for which the examples are given;
(h) mentions or references to any statute, code, or statutory provision are to be interpreted as references to the same, as it may have been, or may be amended, modified, or reenacted from DRAFT
25 time to time. This also encompasses references to all bylaws, instruments, orders, and regulations presently established under it or deriving validity from it, unless the context suggests otherwise; (i) if conflicting, a mathematical formula or other more exact description of a concept or a term shall prevail over words providing a more general description of a concept or a term; (j) all references or mentions of any sum of money are to mean a reference to the sum in United States Dollars;
(k) words, phrases, or expressions that are not defined herein that (i) have generally accepted meaning according to Prudent Industry Practice shall have said meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Industry Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings;
(l) the word “or” is not to be construed solely as exclusive; and (m) each Party acknowledges that it was represented by legal counsel in connection with this Agreement and that either it or its counsel has reviewed this Agreement. Furthermore, any rule of interpretations favoring the resolution of ambiguities against the drafting party will not be utilized in interpreting this Agreement.
ARTICLE 2 - TERM; CONDITION PRECEDENT
2.1 Contract Term
(a) The term of this Agreement will commence on the Effective Date and will remain in full force and effect until the end of the Delivery Term, subject to any early termination or contract extension provisions herein (Contract Term); however, subject to Buyer’s obligations in Section
3.6, Buyer’s obligations to pay for or accept any Product (other than Test Energy) are subject to Seller’s completion of the conditions precedent pursuant to Section 2.2. (b) Certain provisions of this Agreement will continue to remain in effect after termination, including early termination, to the extent necessary to enforce or complete the duties, obligations, or responsibilities of the Parties arising prior to termination. The confidentiality obligations of the Parties under Article 18 and all indemnity and audit rights will remain in full force and effect for three (3) years following the termination of this Agreement.
2.2 Conditions Precedent.
The Delivery Term will not commence until Seller satisfies the following conditions:
(a) Seller has delivered to Buyer a completion certificate from a Licensed Professional Engineer substantially in the form found in Exhibit G;
(b) Seller has executed a Participating Generator Agreement and a Meter Service Agreement with CAISO. Said agreements are to be in full force and effect with a copy of each delivered to Buyer; DRAFT
26 (c) Seller has executed an Interconnection Agreement with the Participating Transmission Owner.
Said agreement is to be in full force and effect with a copy delivered to Buyer; (d) All requisite legal and regulatory authorizations, approvals, and permits for the operation of the Facility have been obtained (or are reasonably expected to be obtained within ninety (90) days) and all conditions thereof that are capable of being satisfied on the Commercial Operation Date have been satisfied and are in full force and effect;
(e) Seller has acquired CEC Precertification of the Facility and reasonably expects to receive final CEC Certification and Verification of the Facility within ninety (90) days from the Commercial Operation Date;
(f) Seller, along with any reasonable assistance from Buyer, will have fulfilled all relevant WREGIS registration prerequisites, including the submission of all necessary registration forms and supporting documents. These may include pertinent interconnection agreements, information surveys concerning the Facility, QRE service agreements, and other suitable documentation required for the Facility’s registration with WREGIS and for facilitating Renewable Energy Credit transfers associated with the Facility within the WREGIS system. (g) Seller has delivered to Buyer the Performance Security in accordance with Section 8.8; and (h) Seller has paid to Buyer all monies (if any) to Buyer per this Agreement; including Daily Delay Damages and Commercial Operation Damages.
2.3 Development Progress Reports
(a) From the Effective Date until the Construction Start Date, Seller will deliver to Buyer a Progress Report (in substantially the form found in Exhibit E) within fifteen (15) days of the close of calendar quarter. Seller agrees to schedule a meeting between Seller and Buyer to review and discuss the Progress Report post-delivery.
(b) From the Construction Start Date until the Commercial Operation Date, Seller will deliver to Buyer a Progress Report (in substantially the form found in Exhibit E) within five (5) Business Days from the first date of the calendar month. Seller agrees to schedule a meeting between Seller and Buyer to review and discuss the Progress Report post-delivery. (c) Seller will provide to Buyer any reasonably requested documentation (subject to any confidentiality restrictions) directly related to completion of the Milestones listed above within ten (10) Business Days of receipt of request.
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27 2.4 Remedial Action Plan
If Seller fails to meet a minimum of three (3) Milestones or misses any single Milestone by more than ninety (90) calendar days, excluding instances caused by a Buyer Default or excused by a Force Majeure Event, Seller will deliver to Buyer a Remedial Action Plan within ten (10) Business Days. The Remedial Action Plan will provide a detailed account of any delays, whether realized or anticipated, extending beyond the scheduled Milestone dates and will include the delay’s root cause (e.g., government approvals, financing, property acquisition, interconnection, or any other relevant factor), Seller’s proposed corrective action to achieve the missed Milestone(s) and all subsequent Milestones by the Guaranteed Commercial Operation Date. Delivery of any Remedial Action Plan does not relieve Seller of its obligation to provide a Remedial Action Plan for any subsequent missed Milestone and to achieve the Guaranteed Commercial Operation Date in accordance with the terms of this Agreement.
ARTICLE 3 - PURCHASE AND SALE
3.1 Sale of Product
Subject to the terms of this Agreement, during the Delivery Term, Seller will sell and deliver to Buyer, and Buyer will purchase from Seller at the prices set forth in Exhibit C, all of the Product produced by or associated with the Facility. Buyer may, at its sole discretion, re-sell or use for another purpose all or a portion of the Product. During the Delivery Term, Buyer’s obligation to make payment for Facility Energy and all other Product from Seller will be excused during the occurrence of and to the extent necessitated by
(a) A Force Majeure Event,
(b) A Curtailment Period; provided that said Curtailment Period is not attributable to Buyer’s breach of its obligations under this or any other Agreement, or (c) A period of Buyer suspension due to Seller Default pursuant to Section 11.1.
Buyer is under no obligation to purchase from Seller any Product that is not or cannot be delivered to the Delivery Point due to any circumstance, including, an outage of the Facility, a Force Majeure Event, or a Curtailment Order.
3.2 Sale of Green Attributes
Seller will sell and deliver to Buyer, and Buyer will purchase from Seller, all Green Attributes attributable to Facility Energy generated by the Facility during the Delivery Term.
3.3 Imbalance Energy
Buyer and Seller acknowledge that during any given Settlement Period, the amount of Facility Energy may deviate from the amount of Scheduled Energy. The Parties will work together to minimize charges and imbalances associated with Imbalance Energy to the extent possible. With the exception of Seller’s responsibility for CAISO penalties, to the extent there are deviations between Facility Energy and Scheduled Energy, any CAISO costs, charges or revenues assessed as a result of said Imbalance Energy will be solely for the account of the Buyer.
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28 3.4 Ownership of Renewable Energy Incentives
Seller will have all right, title, and interest in and to all Renewable Energy Incentives. Buyer recognizes that any Renewable Energy Incentives belong to Seller. In the event that any Renewable Energy Incentives or values representing the same, are initially credit or paid to Buyer, Buyer will cause such Renewable Energy Incentives or values relating to same to be assigned or transferred to Seller without delay. Buyer will cooperate with Seller, within reason, at Seller’s sole expense, in Seller’s efforts to meet the requirements for any certification, registration, or reporting program relating to Renewable Energy Incentives.
3.5 Future Environmental Attributes
(a) The Parties recognize and accept that, as of the Effective Date, the sale of environmental attributes under this Agreement is limited to Green Attributes. However, Future Environmental Attributes may be created by a Governmental Authority via Laws enacted post Effective Date. In that situation, Buyer will be responsible for covering all expenses associated with the transfer, qualification, verification, registration, and ongoing compliance for said Future Environmental Attributes with no increase in Contract Price. In the event that Future Environmental Attributes require alternation or modification of the Facility, the Parties may separately agree to have the cost of said alterations and modifications reimbursed to Seller by Buyer. However, Seller is under no obligation to alter or modify the Facility for Future Environmental Attributes unless all requisite terms and conditions pertaining to such modifications or alterations have been mutually agreed upon by the Parties.
(b) In the event that Buyer chooses to obtain Future Environmental Attributes per Section 3.5, both Parties agree to engage in good faith negotiations concerning the creation of additional agreements and documentation required to execute the transfer of said Future Environmental Attributes. The negotiations will include (but are not limited to) determining suitable mechanisms for transfer, delivery, and risk of loss as well as an appropriate distribution of any supplementary costs to the Buyer, as specified above. The Parties recognize and affirm that these terms are not meant to alter or modify the material terms of this Agreement.
3.6 Test Energy
Buyer retains the exclusive option to purchase one hundred percent (100%) but not less than one hundred percent (100%) of all Test Energy that is available from the Facility before the Delivery Term at a rate that is fifty percent (50%) of the Renewable Rate. At least fourteen (14) calendar days prior to the first day in which Test Energy becomes available, Seller will provide notice to Buyer of Test Energy’s availability.
Buyer then has fourteen (14) calendar days in which to exercise their option to purchase Test Energy. If Buyer fails to exercise their option to purchase Test Energy or fails to respond to the notice from Seller within fourteen (14) calendar days, then the option to purchase Test Energy will terminate. Buyer and Seller both agree that upon termination of the option to purchase Test Energy due to the action or inaction taken by Buyer per the process laid out in Section 3.6, then Seller is not obligated to sell or deliver Test Energy to Buyer prior to the commencement of the Delivery Term and Seller may market, sell, and deliver all or a portion of the Test Energy from the Facility to one or more third parties.
For the avoidance of doubt, the conditions precedent in Section 2.2 are not applicable to the Parties’ obligations under this Section 3.6.
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29 3.7 Capacity Attributes
Seller will use commercially reasonable efforts to obtain Full Capacity Deliverability Status for the Facility, as part of its interconnection process. The Parties agree that Seller will be responsible for the cost and installation of any Network Upgrades associated with obtaining Full Deliverability Status. (a) During the entire Delivery Term, Buyer is entitled to and Seller grants, pledges, assigns, and otherwise commits to Buyer all the Capacity Attributes from the Facility. The consideration for Capacity Attributes is included in the Contract Price.
(b) During the entire Delivery Term, Seller will transfer to Buyer, and Buyer will accept from Seller, any right, title, and interest that Seller will have in Capacity Attributes associated with the Facility.
(c) During the entire Delivery Term, Seller will maintain eligibility for Full Capacity Deliverability Status or Interim Deliverability Status for the Facility from the CAISO and will perform all actions reasonably necessary to ensure that the Facility qualifies to provide Resource Adequacy Benefits to Seller.
(d) Starting from the RA Guarantee Date, if during any month the Facility does not achieve or fails to maintain Full Capacity Deliverability Status, Seller will pay to Buyer an amount equal to the product of the difference (expressed in kW) of Qualifying Capacity of the Facility for said month subtracted by the Net Qualifying Capacity of the Facility for said month multiplied by the CPM Soft Offer Cap (RA Deficiency Amount). RA Deficiency Amounts will be offset against amounts owed to Seller pursuant to section 8.6.
(e) Seller will not sell or make an attempt to sell the Capacity Attributes to any other Person or entity during the Delivery Term. Seller will not disclose to any other Person or entity that the Capacity Attributes belong to anyone other than to the Buyer during the Delivery Term. Buyer retains the ability to, at its own risk, disclose to any Person or entity that Capacity Attributes belong exclusively to Buyer.
(f) Upon Buyer’s request, seller will:
a. Execute the requisite documents and instruments in order to effect recognition and transfer of the Capacity Attributes to Buyer, and
b. Reasonably cooperate with Buyer for Buyer to satisfy Resource Adequacy requirements, including (but not limited to) the following:
i. Assisting Buyer in registering the Facility with CAISO so that the Capacity Rights are recognized and counted for Resource Adequacy purposes, ii. Working with Buyer to make annual submissions to CAISO associated with establishing the correct Capacity Rights,
iii. Coordinating with Buyer to make submissions to CAISO that are required per the CAISO Tariff,
iv. Providing CAISO all necessary information for annual and other outage planning.
c. Deliver the documents, instruments, submissions, and information required for Seller to comply with Section 3.7(f). In responding to the request, Seller is under no obligation to provide any consent, certification, representation, information or other document, or enter DRAFT
30 into any agreement that would negatively affect (or could reasonably be expected to have or result in and adverse effect on) any of Seller’s rights, benefits, risks and/or obligations under this Agreement.
(g) During the entire Delivery Term, Seller will install meters and power electronics that are necessary for Ancillary Services and Capacity Attributes from the Facility to be delivered to Buyer.
3.8 CEC Certification and Verification
Seller will take all requisite steps, including (but not limited to) making or supporting timely submissions with the CEC to acquire and uphold CEC Certification and Verification for the Facility during the entirety of the Delivery Term, including compliance with all applicable requirements for certified facilities provided in the current version of the RPS Eligibility Guidebook (or its successor). Seller will obtain CEC Precertification by the Commercial Operation Date. By thirty (30) days after the Commercial Operation Date, Seller must file an application with the CEC for the final CEC Certification and Verification.
Additionally, within ninety (90) days from the Commercial Operation Date, Seller will secure uphold the final CEC Certification Verification for the remainder of the Delivery Term. Seller is required to promptly inform both Buyer and CEC of any modifications or changes to the information included in Seller’s application for CEC Certification and Verification of the Facility.
3.9 Non-Modifiable Standard Terms and Conditions
(a) Eligibility. Seller, and if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement that: (i) the Facility qualifies and is certified by the CEC as an Eligible Renewable Energy Resource as such term is defined in Public Utilities Code Section 399.12 or Section 399.16; and (ii) the Facility’s electrical energy output delivered to Buyer qualifies under the requirements of the California Renewables Portfolio Standard. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC 6]. (b) Transfer of Renewable Energy Credits. Seller and, if applicable, its successors, represents and warrants that throughout the Delivery Period of this Agreement the Renewable Energy Credits transferred to Buyer conform to the definition and attributes required for compliance with the California Renewables Portfolio Standard, as set forth in California Public Utilities Commission Decision 08-08-028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC REC-1].
(c) Tracking of RECs in WREGIS. Seller warrants that all necessary steps to allow the Renewable Energy Credits transferred to Buyer to be tracked in WREGIS will be taken prior to the first delivery under this Agreement. [STC REC-2].
(d) Applicable 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 DRAFT
31 time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. [STC 17].
3.10 Change in Law
(a) Parties understand that the core purpose of this Agreement is to provide renewable generation that meets the requirements of the California Renewables Portfolio Standard and that Governmental Authorities, including (but not limited to) CEC, CPUC, CAISO, and WREGIS, may take actions to implement changes in Law. Seller will use commercially reasonable efforts to cooperate with respect to any future changes of this Agreement necessary to satisfy requirements of Governmental Authorities associated with changes in law to maximize benefits to Buyer, including (but not limited to):
i. changes in the description of Green Attributes and Capacity Attributes as may be required, including updating the Agreement to reflect any mandatory contractual language required by Governmental Authorities;
ii. submission of any reports, data, or information required by Governmental Authorities; or iii. all other actions that may be required to assure that the Facility qualifies as an Eligible Renewable Energy Resource (ERR) by the CEC and retains any other benefits under the California Renewables Portfolio Standard.
Parties agree that Seller is under no obligation to modify this Agreement, or take actions not required per this Agreement, is such actions of modifications will reasonably be expected to result in a material adverse effect on any of Seller’s rights, benefits, risks, and/or obligations under this Agreement. (b) Compliance Expenditure Cap
If Seller establishes that a change in Laws occurring after the Effective Date has increased Seller’s cost above the cost that could reasonably have been contemplated as of the Effective Date to take all requisite actions to comply with Seller’s obligations per this Agreement with respect to maintaining, conveying, or effectuating Buyer’s use of (as applicable), the items listed in 3.10(b)(i), (ii), and (iii) then Parties agree that the maximum amount of costs sell will be required to bear during the Delivery Term will be capped at twenty thousand dollars ($20,000) per MW of Guaranteed Capacity (Compliance Expenditure Cap):
(i) CEC Certification and Verification;
(ii) Green Attributes; and
(iii) Capacity Attributes
Any cost associated with an action taken for Seller to comply with this clause will be included in the Compliance Expenditure Cap and shall be known, in sum, as the Compliance Actions. (c) Seller will provide Notice to Buyer in the event that Seller reasonably believes any Compliance Action will incur an expense in excess of the Compliance Expenditure Cap. (d) Buyer will have sixty (60) calendar days to assess the Notice referenced in 3.10(c) during which time Seller is under no obligation to take the Compliance Action. During the sixty (60) calendar day assessment period, Buyer will either:
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32 (i) agree to reimburse Seller for a portion or all of the costs that exceed the Compliance Expenditure Cap (Accepted Compliance Costs), or
(ii) waive Seller’s requirement to take said Compliance Action, or any part of said Compliance Action which Buyer has not agree to reimburse Seller.
(e) In the event that Buyer agrees to reimburse Seller for the Accepted Compliance Costs, Seller will take the requisite Compliance Action covered by the Accepted Compliance Costs as agreed by the Parties. Buyer will then reimburse Seller for Seller’s actual cost to affect the Compliance Action, not to exceed the Accepted Compliance Costs, within sixty (60) calendar days from the time that Buyer received the invoice and documentation of said costs from Seller.
ARTICLE 4 - OBLIGATIONS AND DELIVERIES
4.1 Delivery
(a) Energy. Based on the terms of this Agreement, from Commercial Operation Date until the conclusion of the Contract Term, Seller will supply and deliver Product to Buyer at the Delivery Point, and Buyer will take delivery of the Product at the Delivery Point. Seller is responsible for paying or satisfying when due, any costs or charges connected to the delivery of Facility Energy to the Delivery Point, including Station Use, Electrical Losses, and any operation or maintenance charges levied by the Participating Transmission Owner related to the Facility’s operations. Buyer is responsible for all costs, charges, and penalties levied in connected with the delivery of Facility Energy as and beyond the Delivery Point, including transmission costs and transmission line losses and imbalance charges. The Facility Energy will be scheduled into the CAISO by Buyer (or Buyer’s Scheduling Coordinator) in accordance with Exhibit D. (b) Green Attributes. Throughout the Delivery Term, all Green Attributes associated with the Facility are solely dedicated to and vested in Buyer. Seller represents and warrants that Seller holds the rights to all Green Attributes from the Facility, and Seller agrees to and hereby conveys to Buyer all such Green Attributes as included in the delivery of the Product from the Facility.
4.2 Titles and Risk of Loss
(a) Energy. Title to and associated risk of loss of Facility Energy will pass and transfer to Buyer from Seller at the Delivery Point. Seller warrants that all Product delivered to Buyer is free and clear of all liens, security interests, claims, and encumbrances of any kind. (b) Green Attributes. Title to and associated risk of loss of Green Attributes will pass and transfer to Buyer from Seller upon the transfer of said Green Attributes in WREGIS (or other corresponding transfer mechanism). Seller will cooperate reasonably with Buyer, at Buyer’s expense, for Buyer to register, hold, and manage said Green Attributes in Buyer’s name and to Buyer’s accounts.
4.3 Forecasting
Seller will provide the Available Capacity forecasts described in this section. Seller’s Available Capacity forecasts will include availability for the Facility. Seller will use commercially reasonable efforts to DRAFT
33 accurately forecast the Available Capacity of the Facility and transmit said information at its sole expense in a format reasonably acceptable to Buyer or Buyer’s designee). (a) Annual Forecast of Expected Energy. At least forty-five (45) calendar days prior to:
i. the first calendar day of the first Contract Year of the Delivery Term, and ii. the first calendar day of each Contract Year of the Delivery Term thereafter, Seller will deliver to Buyer and the SC a non-binding forecast of each month’s average-days Expected Energy, in hourly increments, for the following calendar year in the form (or a substantially similar form) found in Exhibit F-1 (Average Expected Energy).
(b) Monthly Forecast of Available Capacity. At least thirty (30) calendar days prior to Commercial Operation, and subsequently ten (10) Business Days before the beginning of each month for the Delivery Term, Seller will provide to Buyer and the SC a non-binding forecast of the Available Capacity for each calendar day of the following month in the form (or a substantially similar form) found in Exhibit F-2 (Monthly Delivery Forecast). (c) Day-Ahead Forecast. On the Business Day immediately preceding the date of delivery, by 5:30 AM Pacific Prevailing Time (or as specified otherwise by Buyer per Prudent Industry Practice), Seller will provide Buyer with a non-binding forecast of the following for the succeeding day (in sum the Day-Ahead Forecast):
i. Available Capacity,
ii. expected Facility Energy in hourly increments,
iii. if applicable, Storage Capacity in hourly increments.
A Day-Ahead Forecast will clearly identify, in hourly increments, Seller’s best estimate of the Available Capacity and the expected Energy from Facility. Said Day-Ahead Forecasts will be sent to Buyer’s on-duty SC. In the event Seller fails to provide Buyer with a Day-Ahead Forecast, as required for any period, then for said unscheduled delivery period only Buyer will rely on any Real-Time Forecast provided in accordance with Section 4.3(d) or the Monthly Delivery Forecast or Buyer’s estimate based on information reasonably available to Buyer.
(d) Hourly and Sub-Hourly Forecasts. Despite any provisions to the contrary contained herein, if Seller makes changes to its Schedule on the date of delivery for any reason including Forced Facility outages (other than a scheduling change imposed by Buyer or CAISO) that results in a change to its deliveries (in partial or in whole), Seller will notify Buyer and CAISO of Forced Facility Outages and Seller will keep Buyer informed of any developments that will affect the duration of the outage or the availability of the Facility during or after the conclusion of the outage.
(e) Forecasting Penalties. With the exception of a Force Majeure Event, if Seller does not provide a forecast comporting to the requirements of this section and specifically 4.3(d), and Buyer incurs a loss or penalty resulting from said failure, Seller will be responsible for a Forecasting Penalty. Settlement of Forecasting Penalties is given in Article 8 of this Agreement.
(f) CAISO Tariff Requirements. Insofar as these obligations are pertinent to the Facility, Seller will comply with all applicable obligations for Variable Energy Resources under the CAISO tariff and the Eligible Intermittent Resource Protocol. This includes furnishing suitable operational data and meteorological data, and fully cooperating with DRAFT
34 Buyer, Buyer’s SC, and CAISO, in providing all data, information, and authorizations required thereunder.
4.4 Reduction in Delivery Obligation.
To clarify, and for the avoidance of any doubt, without limiting Section 3.1:
(a) Facility Maintenance. Seller will be permitted to reduce deliveries of Product during any period in which the Facility undergoes scheduled maintenance previous agreed to by the Parties provided that between June 1 and September 30, Seller will not schedule non-emergency maintenance that reduces Energy generation by the Facility by more than ten percent (10%) unless
i. said outage is required to avoid damage to the Facility, ii. said maintenance is required to maintain equipment warranties and cannot be scheduled outside the period of June 1 to September 30, iii. said outage for inspection, preventative maintenance, corrective maintenance, or in accordance with Prudent Industry Practices, or
iv. the Parties agree otherwise in writing (each a Planned Outage). (b) Forced Facility Outage. Seller will be permitted to reduce deliveries of Product during any Force Facility Outage. Seller will provide Buyer with Notice and expected duration (if known) of any Forced Facility Outage.
(c) System Emergencies and other Interconnection Events. Seller will be permitted to reduce deliveries of Product during the duration of any System Emergency, Buyer Curtailment Period, or upon Notice of a Curtailment Order pursuant to the terms of this Agreement, the Interconnection Agreement, or applicable tariff.
(d) Force Majeure Event. Seller will be permitted to reduce deliveries of Product during any Force Majeure Event.
(e) Health and Safety. Seller will be permitted to reduce deliveries of Product as required to maintain health and safety pursuant to Section 6.2.
4.5 Scheduling Coordinator Responsibilities.
Buyer will be the Scheduling Coordinator for the Facility and will perform the responsibilities in accordance with the requirements provided in Exhibit D.
4.6 WREGIS
Seller will, at its sole expense, take all requisite actions and execute all documents or instruments necessary to ensure that all WREGIC Certificates associated with all Renewable Energy Credits related to all Facility Energy are issued and tracked for the purposes of satisfying California Renewables Portfolio Standard requirements and are transferred in a timely manner to Buyer for Buyer’s exclusive benefit.
Seller will transfer the Renewable Energy Credits to Buyer. Seller will comply with all Laws, regulations, and rules, including the WREGIS Operating Rules, regarding the certification and transfer of said WREGIS Certificates to Buyer and Buyer will be given exclusive title to all said WREGIS Certificates.
Furthermore:
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35 (a) Preceding the Commercial Operation Date, Seller will register the Facility with WREGIS and establish an account with WREGIS (Seller’s WREGIS Account), that Seller will maintain until the conclusion of the Delivery Term. Seller will transfer the WREGIS Certificates using Forward Certificate Transfers (as described in the WREGIS Operating Rules) from Seller’s WREGIS Account to the WREGIS account(s) of Buyer or the account(s) of Buyer’s designee identified by Notice to Seller (Buyer’s WREGIS Account). Seller will be responsible for all expenses associated with registering the Facility with WREGIS, including establishing and maintaining Seller’s WREGIS Account, paying WREGIS Certificate issuance and transfer feed, and transferring WREGIS Certificates from Seller’s WREGIS Account to Buyer’s WREGIS Account. (b) Seller will cause Forward Certificate Transfer to occur monthly in accordance with the certification procedure established by the WREGIS Operating Rules. Per the WREGIS Operating Rules, WREGIS certificates are only created for whole MWh amounts of generated Facility Energy. Any fraction of the amount of MWh will be carried forward until sufficient generation is accumulated for the creation of a WREGIS Certificate. (c) Seller, at its sole expense, will ensure that WREGIS Certificates for a given calendar month correspond with the Facility Energy for said calendar month as evidenced by the Facility’s metered data.
(d) Per WREGIS Operating Rules, there is a ninety (90) day delay in the creation of a WREGIS Certificate relative to the timing of an invoice payment per section 8.2 of this Agreement. Buyer will make an invoice payment for a given month in accordance with Section 8.2 before the WREGIS Certificates for said month are to be formally transferred in accordance with WREGIS Operating Rules. Despite the delay, Buyer will have all right and title to said WREGIS Certificates upon payment to Seller in accordance with Section 8.2 of this Agreement.
(e) A “WREGIS Certificate Deficit” refers to any deficit or shortfall in WREGIS Certificates delivered to the Buyer for a specified calendar month, in comparison to the Facility Energy for the same calendar month (Deficient Month), due to an error or omission on the part of the Seller. In the event that any WREGIS Certificate Deficit is caused by an action or inaction by the Seller, the quantity of Facility Energy for the Deficient Month will be reduced on a one-for-one basis by the amount of the WREGIS Certificate Deficit for the purpose of calculating Buyer’s payment to the Seler under Article 8 of this Agreement for the relevant Contract Year. Without limiting Seller’s obligation under this Section 4.6, if a WREGIS Certificate Deficit arises solely due to an error or omission by WREGIS, the Parties will collaborate in good faith to prompt WREGIS to rectify its mistake or omission.
(f) If WREGIS changes or modifies the WREGIS Operating Rules after the Effective Date or implement the WREGIS Operating Rules in a manner inconsistent with this Section
4.6 after the Effective Date, the Parties will promptly amend this Section 4.6 as necessary to enable the Seller to transfer to the Buyer WREGIS Account a quantity of WREGIS Certificates for each specific calendar month corresponding to the Facility Energy in the same calendar month.
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36 4.7 Financial Statements
If a Guaranty is provided as Performance Security in lieu of cash or a Letter of Credit, Seller will provide to Buyer, or cause the Guarantor to provide to Buyer, unaudited quarterly and annual audited financial statements of the Guarantor (including, but not limited to, a balance sheet, statements of income, and statements of cash flows), all prepared in accordance with Generally Accepted Accounting Principles (GAAP) in the United States.
4.8 Charging Energy Management
(a) Upon receiving a valid Charging Notice, Seller will undertake all requisite measures to deliver Charging Energy from the Generating Facility and/or the grid to the Storage Facility, with the purpose of delivering Storage Product in adherence to the terms of this Agreement, including maintenance, repair or replacement of equipment in Seller’s possession or control used to deliver Charging Energy from the Generating Facility and/or grid to the Storage Facility.
(b) Buyer retains the right to charge the Storage Facility seven (7) days per week and twenty-four hours per day, including holidays, by providing Charging Notices to Seller electronically subject to Prudent Operating Practice. Each Charging Notice issued in accordance with this Agreement will remain effective unless Buyer revises said notice by providing Seller with an updated Charging Notice.
(c) Seller will not charge the Storage Facility during the Term other than pursuant to a valid Charging Notice, or in connection to a Storage Capacity Test, or pursuant to a notice from CAISO, the Participating Transmission Owner, or any other Government Authority. If, during the Contract Term, Seller exceeds the Stored Energy Level provided for in the Charging Notice or charges the Storage Facility in violation of this clause, then Seller will be responsible for all energy costs associated with charging of the Storage Facility, Buyer will not be required to pay for the charging of said energy, and Buyer will be entitled to discharge said energy and entitled to all benefits (including Storage Product) associated with said discharge.
(d) Buyer retains the right to discharge the Storage Facility seven (7) days per week and twenty-four (24) hours per day, including holidays, by providing Discharging Notices to Seller electronically subject to Prudent Operating Practice and the requirements and limitations provided in this Agreement. Each Discharging Notice issued in accordance with this Agreement will remain effective unless Buyer revises said notice by providing Seller with an updated Discharging Notice.
(e) Despite any conflicting provisions in this Agreement, during any Settlement Interval, any Curtailment Orders relevant to that Settlement Interval will take precedence over any Charging Notices and Discharging Notices pertaining to the same Settlement Interval.
Seller will have no liability for violation of this Section or any Charging Notice or Discharging Notice to the extent any such violation is caused by Seller’s compliance with any Curtailment Order or other instruction or direction from a Governmental Authority or the Participating Transmission Owner.
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37 4.9 Storage Capacity Tests (if applicable)
(a) Preceding Commercial Operation Date, Seller will schedule and complete a Storage Capacity Test in accordance with Exhibit R. Afterword, the Parties will have the right to run retests of the Storage Capacity Test in accordance with Exhibit O.
(b) Buyer has the right to send one or more representatives to be witness to all Storage Capacity Tests. Said representatives will not interfere with the Storage Capacity Tests. Buyer will be responsible for all costs, expenses, and fees payable or reimbursable to their representatives witnessing any Storage Capacity Test. Unless otherwise agreed to between the Parties, all other costs of any Storage Capacity Test will be borne by Seller. (c) After the conclusion of each Storage Capacity Test, Seller will submit a report in accordance with Exhibit O. If the capacity determined pursuant to a Storage Capacity Test is less than the agreed upon Storage Capacity, then the actual capacity determined pursuant to a Storage Capacity Test will become the new Storage Capacity at the start of the calendar day following the conclusion of the test for all purposes under this Agreement, including compensation under Exhibit C, until the next Storage Capacity Test.
4.10 Guaranteed Storage Availability
(a) During the entirety of the Delivery Term, the Facility will maintain a Monthly Storage Availability during each month of no less than ninety-seven percent (97%)(Guaranteed Storage Availability) with Monthly Storage Availability calculated in accordance with Exhibit N. (b) If the Monthly Storage Availability for any month is less than the Guaranteed Storage Availability, Buyer’s payment for Storage Product will be calculated by reference to the Availability Adjustment (in accordance with Exhibit N).
ARTICLE 5 - TAXES
5.1 Allocation of Taxes and Charges
Seller will settle or cause to settle all Taxes on or with respect to the Facility or concerning the sale and making available of Product to Buyer, that are imposed on Product before its delivery to Buyer at the Delivery Point. Buyer will settle, or cause to be settled, all Taxes on or with respect to the delivery to and purchase by Buyer of Product that are imposed on Product at and after its delivery to Buyer at the Delivery Point (other than withholding or other Taxes imposed on Seller’s income, revenue, receipts, or employees). For situations in which a Party is required to remit or pay Taxes that are the other Party’s responsibility per this Agreement, the Party will promptly clear the due Taxes and then seek and obtain reimbursement from the other Party for said Taxes. If any sale of the Product under this Agreement is exempt from or not subject to any specific Tax, the Buyer will furnish Seller with all necessary documentation within thirty (30) calendar days from the Effective Date to validate such exemption or exclusion. Failure to provide said documentation will result in the Buyer indemnifying, defending, and exempting the Seller from any liability related to Taxes from which the Buyer claims to be exempt.
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38 5.2 Cooperation
The Parties will cooperate to minimize tax exposure with neither Party being required to incur any financial burden for which the other Party is responsible for per this Agreement. All Energy delivered by Seller to Buyer per this Agreement will be sale for resale, with Buyer reselling said Energy.
ARTICLE 6 - MAINTENANCE OF THE FACILITY
6.1 Maintenance of the Facility
Seller will comply with all relevant Laws and Prudent Industry Practice relating to operating and maintaining the Facility and relating to the generation and sale of Product.
6.2 Maintenance of Health and Safety
Seller will take reasonable safety precautions with respect to the operation, maintenance, repair, and replacement of the Facility. In the event that Seller becomes aware of any circumstances pertaining to the Facility that pose an immediate risk of harm or damage to any individual or any individual’s property, Seller is required to take immediate action to aver said harm or damage. Additionally, the Seller must provide Notice to Buyer’s emergency contact, as identified in Exhibit M, concerning said condition.
Actions taken to avoid harm or damage include, as reasonably necessary, disconnecting and removing all or a part of the Facility, or suspending the supply of Energy to the Buyer.
ARTICLE 7 - METERING
7.1 Metering
Seller will measure the amount of Facility Energy using the Facility Meter, subject to adjustments in accordance with applicable CAISO meter requirements and Prudent Industry Practices, including to account for Electrical Losses and Station Use. If the Facility includes a Storage Facility then Seller will measure the Charging Energy and Discharging Energy using the Storage Facility Meter. All meters will be operated pursuant to applicable CAISO-approved calculation methodologies and maintained at Seller’s own cost. Subject to satisfying any applicable CAISO requirements, the meters will be configured to account for all losses from said meter to the Delivery Point, in a manner subject to Buyer’s prior written consent. The metering process will adhere to the guidelines outlines in the Metering Diagram set forth in Exhibit T. Each meter is to be secured with a seal that can only be broken when the meters need testing, adjustment, modification, or relocation. If Seller breaks a seal, seller will notify Buyer as soon as practicable. Additionally, Seller agrees to furnish all meter data to the Buyer in a format reasonably acceptable to Buyer and grants consent to the Buyer to acquire from CAISO the CAISO meter data directly associated with the Facility, along with all inspection, testing, and calibration data and reports.
The Parties, or Buyer’s SC, will collaborate to enable both Parties to retrieve the meter reads from the CAISO Operational Meter Analysis and Reporting (OMAR) web or directly from the CAISO meter(s) at the Facility.
7.2 Meter Verification
In the event Seller has reason to believe there may be a meter malfunction, or upon Buyer’s reasonable request, Seller will test the meter. The tests will be conducted by independent third parties qualified to conduct said tests. Seller will notify Buyer at least seven (7) calendar days in advance of such tests and Buyer will have the right to be present during such tests. If a meter is inaccurate, it will be promptly DRAFT
39 repaired or replaced. Seller may, at its own expense, elect to install and maintain backup metering devices.
ARTICLE 8 - INVOICING AND PAYMENT; CREDIT
8.1 Invoicing
Seller will deliver an invoice to Buyer within ten (10) calendar days after the conclusion of the prior monthly delivery period. Each of the invoices from Seller will include records of metered data, including CAISO metering and transaction data sufficient to validate all invoiced amounts for each Settlement Period during the preceding month, including the Facility Energy produced by the Facility as read by the Facility Meter, the amount of Product in MWh delivered during the prior billing period, the Contract Price applicable to said Product, and (if applicable) the amount of Charging Energy charged by the Storage Facility and the amount of Discharging Energy delivered from the Storage Facility with each read by the Storage Facility Meter. The records referenced in the previous sentence will be in a format reasonably specified by Buyer. Buyer will, and will cause its SC to, provide Seller with all reasonable access (including but not limited to, in real time, to the maximum extent reasonably possible) to any records, including invoices or settlement data from CAISO, forecast data, and other information, all as may be necessary from time to time for Seller to prepare and verify the accuracy of all invoices.
8.2 Payment
Buyer will make payment to Seller for Product via wire transfer or ACH payment to the bank account designated by Seller in Exhibit N, which may be updated by Notice from Seller. Buyer will pay any undisputed invoice amounts within thirty (30) calendar days after receipt of the invoice, or the end of the succeeding monthly deliver period, whichever is later. If said due date falls on a weekend or Holiday, said due date will be the next Business Day. In the event that the amount due is not settled on or before the due date, or if any other payment owed from one Party to another remains unpaid on or after its stipulated due date, a late payment charge will be applied to the outstanding balance and included in the subsequent billing statement. This late payment charge will be calculated based on the 3-Month prime rate (or any corresponding successor rate recognized by a majority of major financial institutions) as published on the date of the invoice in the Wall Street Journal (or the following publication date if The Wall Street Journal is not issued on the specific day), plus two percent (2%) (Interest Rate). If the due date falls on a non-Business Day, the late payment charge will begin to accumulate from the subsequent succeeding Business Day.
8.3 Books and Records
Parties will maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least five (5) years or as otherwise required by Law.
Within five (5) Business Days after Buyer provides Notice to Seller, Buyer will be granted reasonable access to the accounting books and records pertaining to all invoices generated pursuant to this Agreement.
8.4 Payment Adjustments; Billing Errors
A payment adjustment will be made in the event that the Parties individually discover any good-faith inaccuracies in the invoicing, and they are not contested under Section 8.5 of this Agreement, or there is determined to have been a meter inaccuracy sufficient to require a payment adjustment. If said adjustment favors the Buyer, Buyer’s monthly payment will be credited with an amount equivalent to the adjustment.
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40 Conversely, if the adjustment is in favor of Seller, Seller will include the adjustment amount in the Buyer’s subsequent monthly invoice. Adjustments favoring either Buyer or Seller will accrue interest, beginning from the date non-erring Party received Notice until fully resolved, as outlined in Section 8.2 of this Agreement. Unless expressly agreed upon by the Parties, no modification of invoices will be permitted after twenty-four (24) months from the date of the original invoice.
8.5 Billing Disputes
A Party may, in good faith, challenge the accuracy of any invoice, payment, or any adjustment to an invoice submitted under this Agreement, or rectify any invoice due to an arithmetic or computational error within twelve (12) months from the fate the invoice or adjustment was issued. In the event that an invoice, payment, or any part thereof, or any other claim or adjustment arising from the Agreement, be contested, payment of the undisputed portion of the invoice will be promptly settled as it comes due. Any dispute or adjustment related to an invoice or payment must be presented in writing, providing the basis for the dispute or adjustment.
Payment of the disputed amount will not be required until the dispute is resolved. Upon resolution of the dispute, any necessary payment will be made within five (5) Business Days of such resolution, along with interest accrued at the Interest Rate from the original due date up to but no including the date of payment.
In the event of inadvertent overpayments, upon request, the overpaid amount will be returned, or the Party receiving the overpayment may deduct it from subsequent payments, along with interest accrued at the Interest Rate from the date of overpayment up to but not including the date of repayment or deduction.
Any dispute concerning an invoice is waived if the other Party is not notified in accordance with this Section 8.5 within twelve (12) months from the invoice’s issuance or subsequent adjustment, except when any misinformation originated from an unaffiliated third party and said third party rectifies the information after the twelve-month period. If an invoice is not issued within twelve (12) months after the end of the month in which performance occurred, the right to payment for said performance is relinquished.
8.6 Netting of Payments
The Parties agree that they will discharge undisputed mutual debts and payment obligations due and owing to each other on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including any related damages calculated pursuant to Section 3.7(d) or Exhibit B, interest, and payments or credits, shall be netted so that only the excess amount remaining due after netting any such undisputed amount will be paid by the Party that owes it.
8.7 Seller’s Development Security
To secure its obligations under this Agreement, Seller will deliver the Development Security to Buyer within thirty (30) calendar days of the Effective Date. Seller will maintain the Development Security in full force and effect and in the event Buyer collects or draws upon any portion of the Development Security then Seller will replenish the Development Security to the initial full amount within five (5) Business Days. Buyer may collect or draw upon a portion of the Development Security for unpaid Daily Delay Damages, Commercial Operation Delay Damages, or for any reason permitted under this Agreement with the exception of a Damage Payment or a Termination Payment. Buyer will return the Development Security upon delivery of the Performance security or sixty (60) days after termination of this Agreement, whichever is sooner. Buyer will return the Development Security minus any amounts drawn in accordance with this Agreement. In the event that the Development Security is a Letter of Credit DRAFT
41 and the issuer of said Letter of Credit fails to maintain Qualified Issuer status, indicates its intent to not renew said Letter of Credit and said Letter of Credit expires prior to Commercial Operation Date, or fails to honor Buyer’s properly document request to draw on said Letter of Credit by the issuer, Seller will have ten (10) Business Days to either post cash collateral or deliver a substitute Letter of Credit which meets the requirements set forth defined in Development Security.
8.8 Seller’s Performance Security
To secure its obligations per this Agreement, Seller will deliver Performance Security to Buyer prior to or on the Commercial Operation Date. In the even that the Performance Security is not cash collateral or a Letter of Credit, it will be substantially in the form provided in Exhibit K. Seller will maintain the Performance Security in full force and effect, subject to any collections or draws made by Buyer in accordance with the terms of this Agreement. Buyer will return any unused portion of the Performance Security after the Delivery Term has expired or was prematurely terminated and all obligations of Seler then due and payable per this Agreement, including compensation for penalties, Termination Payment, indemnification payments, or other damages are paid in full (whether settled directly or through off-setting or netting). In the event that the Performance Security is a Letter of Credit and the issuer of said Letter of Credit fails to maintain Qualified Issuer status, indicates its intent to not renew said Letter of Credit and said Letter of Credit expires prior to Commercial Operation Date, or fails to honor Buyer’s properly document request to draw on said Letter of Credit by the issuer, Seller will have ten (10) Business Days to either post cash collateral or deliver a substitute Letter of Credit which meets the requirements set forth defined in Performance Security.
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral To secure its obligations per this Agreement, until released as provided herein, Seller hereby grants to Buyer a present and continuing first priority security interest (Security Interest) in, and lien on (and right to net against), and assignment of the Development Security, Performance Security, and other cash collateral and cash equivalent collateral posted pursuant to Sections 8.7 and 8.8 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s Security Interest in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.
Upon or any time after the occurrence of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Development Security or Performance Security, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.9):
(a) Exercise any of its rights and remedies with respect to the Development Security and Performance Security, including any such rights and remedies under Law then in effect; (b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Development Security or Performance Security; and (c) Liquidate all Development Security or Performance Security (as applicable) then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.
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 the DRAFT
42 Buyer after such application), subject to Buyer’s obligation to return any surplus proceeds remaining after these obligations are satisfied in full.
ARTICLE 9 - NOTICES
9.1 Address for the Delivery of Notices
Any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the address set forth on Exhibit M or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.
9.2 Acceptable Means of Delivering Notice
Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered as follows: (a) if sent by United States mail with proper first class postage prepaid, three (3) Business Days following the date of the postmark on the envelope in which such Notice was deposited in the United States mail; (b) if sent by a regularly scheduled overnight delivery carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees, the next Business Day after the same is delivered by the sending Party to such carrier; (c) if sent by electronic communication (including email or other electronic means), at the time indicated by the time stamp upon delivery; or (d) if delivered in person, upon receipt by the receiving Party. Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch information or requests, may be sent by electronic communication and shall be considered delivered upon successful completion of such transmission. In addition, for any Notice sent pursuant to (a), (b) or (d) above, the Party sending such Notice shall send a courtesy copy by email to the email address provided on Exhibit M.
ARTICLE 10 - FORCE MAJEURE
10.1 Definition
(a) “Force Majeure Event” means any act or event that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance. (b) Without limiting the generality of the foregoing, except as set forth below, so long as an event otherwise satisfies the definition of Force Majeure Event, a Force Majeure Event may include: an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; epidemic; landslide; mudslide; sabotage; terrorism; earthquake or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance or strikes or other labor difficulties caused or suffered by a Party or any third party.
(c) Notwithstanding the foregoing, the term “Force Majeure Event” does not include DRAFT
43 i. economic conditions that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including an increase in component costs for any reason, including foreign or domestic tariffs, Buyer’s ability to buy electric energy at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under this Agreement); ii. Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event;
iii. the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above;
iv. a Curtailment Order;
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. Seller’s inability to achieve Construction Start of the Facility following the Guaranteed Construction Start Date or achieve Commercial Operation following the Guaranteed Commercial Operation Date; it being understood and agreed, for the avoidance of doubt, that the occurrence of a Force Majeure Event may give rise to a Development Cure Period.
10.2 No Liability if a Force Majeure Event Occurs
Neither Party will be liable to the other Party in the event it is prevented from performing its obligations hereunder in whole or in part due to a Force Majeure Event. The Party rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take reasonable actions necessary to promptly remove such inability with due speed and shall promptly resume performance of its obligations hereunder upon removal or termination of the Force Majeure Event. Neither Party shall be considered in breach or default of this Agreement, nor shall it be liable to the other Party, if and to the extent that any failure or delay in such Party’s performance of one or more of its obligations hereunder is caused by a Force Majeure Event. Notwithstanding the foregoing, the occurrence and continuation of a Force Majeure Event shall not (a) suspend or excuse the obligation of a Party to make any payments due hereunder, (b) suspend or excuse the obligation of Seller to achieve the Guaranteed Construction Start Date or the Guaranteed Commercial Operation Date beyond the extensions provided in Exhibit B, or (c) limit Buyer’s right to declare an Event of Default pursuant to Section 11.1(b)(ii) or (iv) and receive a Damage Payment upon exercise of Buyer’s remedies pursuant to Section 11.2.
10.3 Notice for Force Majeure
The claiming Party shall make commercially reasonable efforts to provide the other Party with oral notice of the Force Majeure Event within five (5) Business Days of the date the claiming Party becomes aware of being impacted by such Force Majeure Event, and within two (2) weeks of the date the claiming Party becomes aware of being impacted by such Force Majeure Event the claiming Party shall provide the other Party with notice in the form of a letter describing in detail the occurrence giving rise to the Force DRAFT
44 Majeure Event, including the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance. Failure to provide written notice within such two (2)- week period constitutes a waiver of the Force Majeure Event. Upon written request from Buyer, Seller shall provide documentation demonstrating to Buyer’s reasonable satisfaction that each day of the claimed delay was the result of a Force Majeure Event and did not result from Seller’s actions or failure to exercise due diligence or take reasonable actions. The claiming Party shall promptly notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party. The suspension of performance due to a claim of a Force Majeure Event must be of no greater scope and of no longer duration than is required by the Force Majeure Event.
10.4 Termination Following Force Majeure Event
If a Force Majeure Event has occurred after the Commercial Operation Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon written Notice to the other Party with respect to the Facility experiencing the Force Majeure Event. Upon any such termination, the non-claiming Party shall have no liability to the Force Majeure Event claiming Party, save and except for costs incurred and balances owed prior to the effective date of such termination and those obligations specified in Section
2.1(b), and Buyer shall promptly return to Seller any Performance Security then held by Buyer, less any amounts drawn in accordance with this Agreement
ARTICLE 11 - DEFAULTS; REMEDIES; TERMINATION
11.1 Events of Default
An Event of Default will mean:
(a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
i. the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
ii. any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof; 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 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 14.3, as appropriate; 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.
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45 (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
i. if at any time, Seller delivers or attempts to deliver electric energy to the Delivery Point for sale under this Agreement that was not generated by the Facility; ii. the failure by Seller to achieve Commercial Operation within ninety (90) days following the Guaranteed Commercial Operation Date;
iii. the failure by Seller to achieve the Construction Start Date within one hundred eighty (180) days of the Guaranteed Construction Start Date; iv. if, in any consecutive six (6) month period, the Adjusted Energy Production amount is not at least ten percent (10%) of the Expected Energy amount for the current Contract Year, and Seller fails to either (x) demonstrate to Buyer’s reasonable satisfaction, within ten (10) Business Days after Notice from Buyer, a legitimate reason for the failure to meet the ten percent (10%) minimum; or (y) deliver to Buyer within ten (10) Business Days after Notice from Buyer a plan or report developed by Seller that describes the cause of the failure to meet the ten percent (10%) and the actions that Seller has taken, is taking, or proposes to take in an effort to cure such condition along with the written confirmation of a Licensed Professional Engineer that such plan or report is in accordance with Prudent Industry Practices and capable of cure within a reasonable period of time, not to exceed one hundred eighty (180) days;
v. in the case where the project includes a Storage Facility, if, in any two (2) consecutive Contract Years during the Delivery Term, the average Monthly Storage Availability is, over the two-year period, less than seventy percent (70%); vi. in the case where the project includes a Storage Facility, if, Seller fails to maintain an average Efficiency Rate of at least seventy percent (70%) over a rolling 12-month period;
vii. in the case where the project includes a Storage Facility, if Seller fails to maintain a Storage Capacity equal to at least seventy-five percent (75%) of the Installed Capacity for more than three hundred sixty (360) days;
viii. failure by Seller to satisfy the collateral requirements pursuant to Sections 8.7 or
8.8 after Notice and expiration of the cure periods set forth therein, including the failure to replenish the Development Security or Performance Security amount in accordance with this Agreement in the event Buyer draws against either for any reason other than to satisfy a Damage Payment or a Termination Payment; ix. 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 ten (10) Business Days after Seller receives Notice of the occurrence of any of the following events:
1. 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;
2. the failure of the Guarantor to make any payment required or to perform any other material covenant or obligation in any Guaranty; DRAFT
46 3. the Guarantor becomes Bankrupt;
4. the Guarantor shall fail to meet the criteria for an acceptable Guarantor as set forth in the definition of Guarantor;
5. 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
6. the Guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of any Guaranty; or
x. with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer either (1) cash, or (2) a substitute Letter of Credit from a different issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in the amount required hereunder within ten (10) Business Days after Seller receives Notice of the occurrence of any of the following events:
1. the issuer of the outstanding Letter of Credit shall fail to meet the definition of Qualified Issuer;
2. the issuer of such Letter of Credit becomes Bankrupt;
3. the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit;
4. 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;
5. such Letter of Credit fails or ceases to be in full force and effect at any time; or
6. Seller shall fail to renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit and as provided in accordance with this Agreement, and in no event less than sixty (60) days prior to the expiration of the outstanding Letter of Credit.
11.2 Remedies; Declaration of Early Termination Date
If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (“Non-Defaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“Early Termination Date”) that terminates this Agreement (the “Terminated Transaction”) and ends the Delivery Term effective as of the Early Termination Date;
(b) to accelerate all amounts owing between the Parties, and to collect as liquidated damages (i) the Damage Payment (in the case of an Event of Default by Seller occurring before the Commercial Operation Date, including an Event of Default under Section 11.1(b)(ii)) or (ii) the Termination Payment calculated in accordance with Section 11.3 below (in the case of any other Event of Default by either Party);
(c) to withhold any payments due to the Defaulting Party under this Agreement; DRAFT
47 (d) to suspend performance; or
(e) to exercise any other right or remedy available at law or in equity, including specific performance or injunctive relief, except to the extent such remedies are expressly limited under this Agreement;
provided, that payment by the Defaulting Party of the Damage Payment or Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Party’s sole and exclusive remedy for any Terminated Transaction and the Event of Default related thereto.
11.3 Termination Payment
The Termination Payment (“Termination Payment”) for a Terminated Transaction shall be the aggregate of all Settlement Amounts plus any or all other amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties supplying information for purposes of the calculation of Gains or Losses may include 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 be required to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (a) the actual damages that the Non-Defaulting Party would incur in connection with a Terminated Transaction would be difficult or impossible to predict with certainty, (b) the Damage Payment or Termination Payment described in Section 11.2 or this Section 11.3 (as applicable) is a reasonable and appropriate approximation of such damages, and (c) the Damage Payment or Termination Payment described in Section 11.2 or this Section 11.3 (as applicable) is the exclusive remedy of the Non-Defaulting Party in connection with a Terminated Transaction but shall not otherwise act to limit any of the Non-Defaulting Party’s rights or remedies if the Non-Defaulting Party does not elect a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.
11.4 Notice of Payment of Termination Payment
As soon as practicable after a Terminated Transaction, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Damage Payment or Termination Payment and whether the Termination Payment is due to or from the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for such calculation. The Termination Payment shall be made to or from the Non-Defaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.
11.5 Disputes with Respect to Termination Payment
If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, the Defaulting Party shall, within five (5) Business Days of receipt of the Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the Termination Payment shall be determined in accordance with Article 15.
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48 11.6 Rights and Remedies are Cumulative
Except where an express and exclusive remedy or measure of damages is provided, the rights and remedies of a Party pursuant to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
ARTICLE 12 - LIMITATION OF LIABILITY AND EXCLUSION
OF WARRANTIES
12.1 No Consequential Damages
EXCEPT TO THE EXTENT INCLUDED IN A LIQUIDATED DAMAGES CALCULATION, OR
ARISING FROM FRAUD OR INTENTIONAL MISREPRESENTATION, NEITHER PARTY SHALL
BE LIABLE TO THE OTHER OR ITS INDEMNIFIED PERSONS FOR ANY SPECIAL, PUNITIVE,
EXEMPLARY, INDIRECT, OR CONSEQUENTIAL DAMAGES, OR LOSSES OR DAMAGES FOR
LOST REVENUE OR LOST PROFITS, WHETHER FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT.
12.2 Waiver and Exclusion of Other Damages
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 THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF CONSEQUENTIAL
DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.
FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE REMEDY OR
MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY
SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 3.7, 4.6, 4.7, 11.2 AND 11.3, AND AS PROVIDED IN EXHIBIT B
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.
ARTICLE 13 - REPRESENTATIONS AND WARRANTIES;
AUTHORITY
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49 13.1 Seller’s Representations and Warranties
As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability company, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and is qualified to conduct business in the state of California and each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller. (b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement. The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary limited liability company action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller (subject to any permits that have not yet been obtained by Seller), the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound.
(d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) The Facility will be located in the State of California. (f) Seller will be responsible for obtaining all permits necessary to construct and operate the Facility and Seller will be the applicant on any CEQA documents. (g) Seller has not and will not knowingly utilize equipment or resources for the construction, operation or maintenance of the Facility that rely on work or services exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily (“Forced Labor”). 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.
13.2 Buyer’s Representations and Warranties
As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a joint powers authority and a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations and orders of the California Public Utilities Commission, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All Persons DRAFT
50 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.
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.
(b) 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. (c) 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. (d) Buyer warrants and covenants that, throughout the Contract Term, with respect to its contractual obligations under this Agreement, it will not claim immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (1) suit, (2) jurisdiction of court (provided that such court is located within a venue permitted in law and under the Agreement), (3) relief by way of injunction, order for specific performance or recovery of property, (4) attachment of assets, or (5) execution or enforcement of any judgment; provided, however that nothing in this Agreement shall waive the obligations or rights set forth in the California Tort Claims Act (Government Code Section 810 et seq.). (e) Buyer is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California.
13.3 General Covenants
Each Party covenants that commencing on the Effective Date and continuing throughout the Contract Term:
(a) It shall continue to be duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and to be qualified to conduct business in California and each jurisdiction where the failure to qualify would have a material adverse effect on its business or financial condition;
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51 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 (b) It shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and in material compliance with any Law.
13.4 Seller Covenants
Seller covenants that commencing on the Effective Date and continuing throughout the Delivery Term:
(a) Signage. Seller agrees to install and maintain permanent signage during the Delivery Term at the Site displaying Buyer’s logo, Seller’s logo, and the name of the Facility. The sign shall be located on property frontage with visibility to the most populous roadway, subject to any local ordinance restrictions. The sign shall be large enough to be visible from such roadway. The materials should be environmentally friendly, such as aluminum composite or wood, and shall not be made of acrylic or similar materials. No lighting is required. Buyer shall provide a design file for the sign. Location and final specifications for signage, including design, are subject to Buyer’s approval, not to be unreasonably withheld. Seller shall construct and maintain the sign at Seller’s sole expense, and Seller shall be responsible for obtaining any required permits or approvals. The sign shall be installed within 30 days of the Commercial Operation Date.
ARTICLE 14 - ASSIGNMENT
14.1 General Prohibition of Assignments
Except as provided below, neither Party may voluntarily assign this Agreement or its rights or obligations under this Agreement, without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Any direct or indirect change of control of a Party (whether voluntary or by operation of law) will be deemed an assignment and will require the prior written consent of the other Party. Any assignment made without required written consent, or in violation of the conditions to assignment set out below, shall be null and void. Seller shall be responsible for Buyer’s costs associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement, including reasonable attorneys’ fees.
14.2 Collateral Assignment
Subject to the provisions of this Section 14.2, Seller has the right to assign this Agreement as collateral for any financing or refinancing of the Facility.
In connection with any financing or refinancing of the Facility by Seller, Buyer shall in good faith work with Seller and Lender to agree upon a consent to collateral assignment of this Agreement (“Collateral Assignment Agreement”). The Collateral Assignment Agreement must be in form and substance agreed to by Buyer, Seller and Lender, and must include, among others, the following provisions; provided that Buyer shall not be required to consent to any additional terms or conditions beyond those set forth below:
(a) Buyer shall give Notice of an Event of Default by Seller to the Person(s) to be specified by Lender in the Collateral Assignment Agreement, before exercising its right to terminate this Agreement as a result of such Event of Default;
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52 (b) Following an Event of Default by Seller under this Agreement, Buyer may require Seller or Lender to provide to Buyer a report concerning:
i. The status of efforts by Seller or Lender to develop a plan to cure the Event of Default;
ii. Impediments to the cure plan or its development;
iii. If a cure plan has been adopted, the status of the cure plan’s implementation (including any modifications to the plan as well as the expected timeframe within which any cure is expected to be implemented); and
iv. Any other information which Buyer may reasonably require related to the development, implementation and timetable of the cure plan.
Seller or Lender must provide the report to Buyer within ten (10) Business Days after Notice from Buyer requesting the report. Buyer will have no further right to require the report with respect to a particular Event of Default after that Event of Default has been cured; (c) Lender will have the right to cure an Event of Default on behalf of Seller, only if Lender sends a written notice to Buyer before the later of (i) the expiration of any cure period, and (ii) ten (10) Business Days after Lender’s receipt of notice of such Event of Default from Buyer, indicating Lender’s intention to cure. Lender must remedy or cure the Event of Default within the cure period under this Agreement and any additional cure periods agreed in the Collateral Assignment Agreement, not to exceed, except as agreed in the collateral assignment agreement, a maximum of ninety (90) days (or one hundred eighty (180) days in the event of a bankruptcy of Seller, any foreclosure of similar proceeding if required by Lender to cure any Event of Default); (d) Lender will have the right to consent before any termination of this Agreement which does not arise out of an Event of Default;
(e) Lender will receive prior Notice of and the right to approve material amendments to this Agreement, which approval will not be unreasonably withheld, delayed or conditioned; (f) If Lender, directly or indirectly, takes possession of, or title to the Facility (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure), Lender must assume all of Seller’s obligations arising under this Agreement and all related agreements (subject to such limits on liability as are mutually agreed to by Seller, Buyer and Lender as set forth in the Collateral Assignment Agreement); provided, before such assumption, if Buyer advises Lender that Buyer will require that Lender cure (or cause to be cured) any Event of Default existing as of the possession date in order to avoid the exercise by Buyer (in its sole discretion) of Buyer’s right to terminate this Agreement with respect to such Event of Default, then Lender at its option, and in its sole discretion, may elect to either:
i. Cause such Event of Default to be cured, or
ii. Not assume this Agreement;
(g) If Lender elects to sell or transfer the Facility (after Lender directly or indirectly, takes possession of, or title to the Facility), or sale of the Facility occurs through the actions of Lender (for example, a foreclosure sale where a third party is the buyer, or otherwise), then Lender shall cause the transferee or buyer to assume all of Seller’s obligations arising under this Agreement and all related agreements as a condition of the sale or transfer. Such sale or transfer may be made DRAFT
53 only to an entity that (i) meets the definition of Permitted Transferee and (ii) is an entity that Buyer is permitted to contract with under applicable Law; and (h) Subject to Lender’s cure of any Events of Defaults under the Agreement in accordance with Section 14.2(f), if (i) this Agreement is rejected in Seller’s Bankruptcy or otherwise terminated in connection therewith Lender shall have the right to elect within forty-five (45) days after such rejection or termination, to enter into a replacement agreement with Buyer having substantially the same terms as this Agreement for the remaining term thereof, or (ii) if Lender or its designee, directly or indirectly, takes possession of, or title to, the Facility (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure) after any such rejection or termination of this Agreement, promptly after Buyer’s written request, Lender must itself or must cause its designee to promptly enter into a new agreement with Buyer having substantially the same terms as this Agreement for the remaining term thereof, provided that in the event a designee of Lender, directly or indirectly, takes possession of, or title to, the Facility (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure), such designee shall be approved by Buyer, not to be unreasonably withheld.
14.3 Permitted Assignment by Seller
Except as may be precluded by, or would cause Buyer to be in violation of the Political Reform Act, (Cal.
Gov . Code section 81000 et seq,) or the regulations thereto, Cal. Government Code section 1090, Buyer’s Conflict of Interest Code/Policy or any other conflict of interest Law, Seller may, without the prior written consent of Buyer, transfer or assign this Agreement to an Affiliate of Seller. In addition, Buyer’s written consent will not be unreasonably withheld for the transfer or assignment of this Agreement to any Person succeeding to all or substantially all of the assets of Seller (whether voluntary or by operation of law and whether by assignment or change of control), if, and only if:
(i) the assignee is a Permitted Transferee;
(ii) Seller has given Buyer Notice at least forty-five (45) days before the date of such proposed assignment or change of control; and
(iii) Seller has provided Buyer a written agreement signed by the Person to which Seller wishes to assign its interests that (x) provides that such Person will assume all of Seller’s obligations and liabilities under this Agreement upon such transfer or assignment and (y) certifies that such Person meets the definition of a Permitted Transferee.
Except as provided in the first sentence of this Section 14.3, any assignment by Seller, 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 Buyer.
ARTICLE 15 - DISPUTE RESOLUTION
15.1 Venue
The Parties agree that any suit, action or other legal proceeding by or against any Party (or its affiliates or designees) with respect to or arising out of this Agreement shall be brought in the federal courts of the United States or the courts of the State of California sitting in Placer County, California.
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54 15.2 Dispute Resolution
In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a written Notice from either Party identifying such dispute, the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either thirty (30) days of initiating such discussions, or within forty (40) days after Notice of the dispute, the Parties shall submit the dispute to non-binding mediation prior to seeking any and all remedies available to it at Law in or equity. The Parties will cooperate in selecting a qualified neutral mediator selected from a panel of neutrals and in scheduling the time and place of the mediation as soon as reasonably possible, but in no event later than thirty (30) days after the request for mediation is made. The Parties agree to participate in the mediation in good faith and to share the costs of the mediation, including the mediator’s fee, equally, but such shared costs shall not include each Party’s own attorneys’ fees and costs, which shall be borne solely by such Party. If the mediation is unsuccessful, then either Party may seek any and all remedies available to it at law or in equity, subject to the limitations set forth in this Agreement.
15.3 Attorney’s Fees
In any proceeding brought to enforce this Agreement or because of the 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.
ARTICLE 16 - INDEMNIFICATION
16.1 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 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 negligent or willful misconduct of the Indemnifying Party, its Affiliates, its directors, officers, employees, or agents.
(b) Nothing in this Section 16.1 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.
16.2 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 16 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 DRAFT
55 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 otherwise provided in this Article 16, in the event that a Party is obligated to indemnify and hold the other Party and its successors and assigns harmless under this Article 16, 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.
ARTICLE 17 - INSURANCE
17.1 Insurance
(a) General Liability. Seller shall maintain, or cause to be maintained at its sole expense, commercial general liability insurance, covering all operations by or on behalf of Seller arising out of or connected with this Agreement, including coverage for bodily injury, broad form property damage, personal and advertising injury, products/completed operations, and contractual liability.
Such insurance shall be in a minimum amount of per occurrence and annual aggregate of not less than Two Million Dollars ($2,000,000), exclusive of defense costs, for all coverages. The policy shall be endorsed to provide contractual liability in the required amount, specifically covering Seller’s obligations under this Agreement and including Buyer as an additional insured. Such insurance shall contain standard cross-liability and severability of interest provisions. (b) Employer’s Liability Insurance. Employers’ Liability insurance shall not be less than One Million Dollars ($1,000,000.00) for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the One Million Dollar ($1,000,000) policy limit will apply to each employee.
(c) Workers Compensation Insurance. Seller, if it has employees, shall also maintain at all times during the Contract Term workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of California Law. (d) Business Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with limits of One Million Dollars ($1,000,000) per occurrence. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement.
(e) Construction All-Risk Insurance. Seller shall maintain during the construction of the Facility prior to the Commercial Operation Date, construction all-risk form property insurance covering DRAFT
56 the Facility during such construction periods, and naming Seller (and Lender if any) as the loss payee.
(f) Contractor’s Pollution Liability. Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date, Pollution Legal Liability Insurance in the amount of Two Million Dollars ($2,000,000) per occurrence and in the aggregate, naming Seller (and Lender if any) as additional named insured. (g) Subcontractor Insurance. Seller shall require all of its subcontractors to carry (i) comprehensive general liability insurance with a combined single limit of coverage not less than One Million Dollars ($1,000,000); (ii) workers’ compensation insurance and employers’ liability coverage in accordance with applicable requirements of Law; and (iii) business auto insurance for bodily injury and property damage with limits of one million dollars ($1,000,000) per occurrence. All subcontractors shall name Seller as an additional insured to insured to insurance carried pursuant to clauses (g)(i) and (g)(iii). All subcontractors shall provide a primary endorsement and a waiver of subrogation to Seller for the required coverage pursuant to this Section 17.1(g). (h) Umbrella/Excess Liability Insurance. Seller shall maintain at all times during the Contract Term umbrella/excess liability providing coverage excess of the underlying Employer’s Liability, Commercial General Liability, and Business Auto Insurance, on terms at least as broad as the underlying coverage, with limits of not less than Five Million Dollars ($5,000,000) per occurrence and in the annual aggregate. The insurance requirements of this Section 17.1 can be provided by any combination of Seller’s primary and excess liability policies. (i) Evidence of Insurance. Within thirty (30) days after execution of the Agreement and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such coverage. These certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of cancellation or termination of coverage. Such insurance shall be primary coverage without right of contribution from any insurance or self-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 all insurance requirements by any renewable energy or other incentive program administrator or any other applicable authority.
Buyer shall have the right to inspect or obtain a copy of the original policy(ies) of insurance. (j) Failure to Comply with Insurance Requirements. If Seller fails to comply with any of the provisions of this Article 17, 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 17 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.
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57 ARTICLE 18 - CONFIDENTIAL INFORMATION
18.1 Definition of Confidential Information
The following constitutes “Confidential Information,” whether oral or written which is delivered by Seller to Buyer or by Buyer to Seller including:
(a) pricing and other commercially sensitive or proprietary information provided to Buyer in connection with the terms and conditions of, and proposals and negotiations related to, this Agreement, and
(b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include i. information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement;
ii. information that becomes publicly available through no fault of the recipient after the time of the delivery;
iii. information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and
iv. information that the recipient independently developed without a violation of this Agreement.
18.2 Duty to Maintain Confidentiality
Confidential Information will retain its character as Confidential Information but may be disclosed by the recipient (the “Receiving Party”) if and to the extent such disclosure is required (a) to be made by any requirements of Law,
(b) pursuant to an order of a court or
(c) in order to enforce this Agreement. If the Receiving Party becomes legally compelled (by interrogatories, requests for information or documents, subpoenas, summons, civil investigative demands, or similar processes or otherwise in connection with any litigation or to comply with any applicable law, order, regulation, ruling, regulatory request, accounting disclosure rule or standard or any exchange, control area or independent system operator request or rule) to disclose any Confidential Information of the disclosing Party (the “Disclosing Party”), Receiving Party shall provide Disclosing Party with prompt notice so that Disclosing Party, at its sole expense, may seek an appropriate protective order or other appropriate remedy. If the Disclosing Party takes no such action after receiving the foregoing notice from the Receiving Party, the Receiving Party is not required to defend against such request and shall be permitted to disclose such Confidential Information of the Disclosing Party, with no liability for any damages that arise from such disclosure. Each Party hereto acknowledges and agrees that information and documentation provided in connection with this Agreement may be subject to the California Public Records Act (Government Code Section 6250 et seq.). The provisions of this Article 18 shall survive and shall DRAFT
58 continue to be binding upon the Parties for period of one (1) year following the date of termination of this Agreement.
18.3 Irreparable Injury; Remedies
Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party and expressly acknowledges that monetary damages would be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth herein. Accordingly, Receiving Party acknowledges that any such breach or threatened breach will cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of proving actual damages.
18.4 Disclosure to Lenders
Notwithstanding anything to the contrary in this Article 18, Confidential Information may be disclosed by Seller to any actual or potential Lender or investor or any of its Affiliates, and Seller’s actual or potential agents, consultants, contractors, or trustees, so long as the Person to whom Confidential Information is disclosed either is bound by similarly restrictive confidentiality obligations as those contained in this Agreement, or agrees in writing to be bound by the confidentiality provisions of this Article 18 to the same extent as if it were a Party.
18.5 Press Releases
Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such public statement.
ARTICLE 19 - MISCELLANEOUS
19.1 Entire Agreement; Integration; Exhibits
This Agreement, together with the Cover Sheet and Exhibits attached hereto constitutes the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. The headings used herein are for convenience and reference purposes only. In the event of a conflict between the provisions of this Agreement and those of the Cover Sheet or any Exhibit, the provisions of first the Cover Sheet, and then this Agreement shall prevail, and such Exhibit shall be corrected accordingly. This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof.
19.2 Amendments
This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, that, for the avoidance of doubt, this Agreement may not be amended by electronic mail communications.
19.3 No Waiver
Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
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59 19.4 No Agency, Partnership, Joint Venture, or Lease Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) or, to the extent set forth herein, any Lender or Indemnified Party.
19.5 Severability
In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby.
The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
19.6 Mobile-Sierra
Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Changes proposed by a non-Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under applicable law.
19.7 Counterparts
This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
19.8 Electronic Delivery
This Agreement may be duly executed and delivered by a Party by execution and electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party, and, if delivery is made by electronic format, the executing Party shall promptly deliver, via overnight delivery, a complete original counterpart that it has executed to the other Party, but this Agreement shall be binding on and enforceable against the executing Party whether or not it delivers such original counterpart.
19.9 Binding Effect
This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
19.10 No Recourse
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, DRAFT
60 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.
19.11 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. 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 15. 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) all of unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution.
19.12 Forward Contract
The Parties intend that this Agreement constitute a “forward contract” within the meaning of the U.S.
Bankruptcy Code, and that Buyer and Seller are deemed “forward contract merchants” within the meaning of the U.S. Bankruptcy Code. Each Party further agrees that, for all purposes of this Agreement, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. §366 or another provision of 11 U.S.C. § 101-1532.
19.13 Further Assurances
Each of the Parties hereto agree to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement. [Signatures on following page]
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61 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
[SELLER]
By:
Name:
Title:
PIONEER COMMUNITY ENERGY, a
California joint powers authority
By:
Name:
Title:
By:
Name:
Title:
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62 EXHIBIT A - FACILITY DESCRIPTION
Site Name:
Site includes all or some of the following APNs: This Agreement is specific to the Site and Seller may change the location of the Site only upon Buyer’s prior written consent, which consent is in Buyer’s sole discretion. Seller shall maintain Site Control throughout the Contract Term and shall provide Buyer with prompt Notice of any change in the status of Seller’s Site Control.
County:
Type of Generating Facility: _______________
Type of Storage Facility: _______________
Energy Management Software: The Facility shall include communication systems and automatic generation control (AGC) interface to operate the Facility as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, directed by the Buyer in accordance with the Agreement and/or the CAISO, including through ADS.
Guaranteed Capacity: ____ MW (AC)
Maximum Output: ___ MW (Generating Facility and Storage Facility combined) Maximum Charging Capacity: ___ MW.
Maximum Discharging Capacity: ___ MW.
Maximum Stored Energy Level: ___ MWh.
Operating Restrictions of Storage Facility: See Exhibit P Delivery Point:
P-node:
Participating Transmission Owner: Pacific Gas and Electric Company (PG&E) (or any successor entity)
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63 EXHIBIT B - FACILITY CONSTRUCTION AND COMMERCIAL
OPERATION
1. Construction of the Facility.
a. “Construction Start” will occur upon satisfaction of the following: (i) Seller has acquired the applicable regulatory authorizations, approvals and permits required for the commencement of construction of the Facility, (ii) Seller has engaged all contractors and ordered all essential equipment and supplies as, in each case, can reasonably be considered necessary so that physical construction of the Facility may begin and proceed to completion without foreseeable interruption of material duration, and (iii) Seller has executed an engineering, procurement, and construction contract and issued thereunder a notice to proceed that authorizes the contractor to mobilize to Site and begin physical construction of the Facility (such authorization to include, at a minimum, excavation for foundations or the installation or erection of improvements) at the Site. The date of Construction Start will be evidenced by and subject to Seller’s delivery to Buyer of a certificate substantially in the form attached as Exhibit J hereto, and the date certified therein shall be the “Construction Start Date.” Seller shall cause Construction Start to occur no later than the Guaranteed Construction Start Date.
b. If Construction Start is not achieved by the Guaranteed Construction Start Date, Seller shall pay Daily Delay Damages to Buyer on account of such delay. Daily Delay Damages shall be payable for each day for which Construction Start has not begun by the Guaranteed Construction Start Date. Daily Delay Damages shall be payable to Buyer by Seller until Seller reaches Construction Start of the Facility. On or before the tenth (10th) day of each month, Buyer shall invoice Seller for Daily Delay Damages, if any, accrued during the prior month and, within ten (10) Business Days following Seller’s receipt of such invoice, Seller shall pay Buyer the amount of the Daily Delay Damages set forth in such invoice. Daily Delay Damages shall be refundable to Seller pursuant to Section 2(b) of this Exhibit B. The Parties agree that Buyer’s receipt of Daily Delay Damages shall (i) not be construed as Buyer’s declaration that an Event of Default has occurred under any provision of Section 11.1 and (ii) not limit Buyer’s right to receive a Damage Payment, upon exercise of Buyer’s default right pursuant to Section 11.2.
2. Commercial Operation of the Facility. “Commercial Operation” means the condition existing when Seller has fulfilled all of the conditions precedent in Section 2.2 of the Agreement and provided Notice to Buyer substantially in the form of Exhibit G (the “COD Certificate”) (ii) Seller has notified Buyer in writing that it has provided the required documentation to Buyer and met the conditions for achieving Commercial Operation, and (iii) Buyer has acknowledged to Seller in writing that Buyer agrees that Commercial Operation has been achieved. The “Commercial Operation Date” shall be the date on which Commercial Operation is achieved.
(a) Seller shall use commercially reasonable efforts to cause Commercial Operation for the Facility to occur by the Guaranteed Commercial Operation Date. Seller shall notify Buyer that it intends to achieve Commercial Operation at least sixty (60) days before the anticipated Commercial Operation Date.
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64 (b) If Seller achieves Commercial Operation for the Facility by the Guaranteed Commercial Operation Date, all Daily Delay Damages paid by Seller shall be refunded to Seller.
Seller shall include the request for refund of the Daily Delay Damages with the first invoice to Buyer after Commercial Operation.
(c) If Seller does not achieve Commercial Operation by the Guaranteed Commercial Operation Date, Seller shall pay Commercial Operation Delay Damages to Buyer for each day the Facility has not been completed and is not ready to produce and deliver Energy generated by the Facility to Buyer as of the Guaranteed Commercial Operation Date. Commercial Operation Delay Damages shall be payable to Buyer by Seller until the Commercial Operation Date. On or before the tenth (10th) day of each month, Buyer shall invoice Seller for Commercial Operation Delay Damages, if any, accrued during the prior month and within ten (10) days following Seller’s receipt of such invoice, Seller shall pay Buyer the amount of the Commercial Operation Delay Damages set forth in such invoice. The Parties agree that Buyer’s receipt of Commercial Operation Delay Damages shall (x) not be construed as Buyer’s declaration that an Event of Default has occurred under any provision of Section 11.1 and (y) not limit Buyer’s right to receive a Damage Payment upon exercise of Buyer’s remedies pursuant to Section 11.2.
3. Termination for Failure to Achieve Commercial Operation. If the Facility has not achieved Commercial Operation within ninety (90) days after the Guaranteed Commercial Operation Date, as it may be extended as provided herein, Buyer may elect to terminate this Agreement in accordance with Sections 11.1(b)(ii) and 11.2.
4. Extension of the Guaranteed Dates. The Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date shall, subject to notice and documentation requirements set forth below, be automatically extended on a day-for-day basis (the “Development Cure Period”) for the duration of any and all delays arising out of the following circumstances:
(a) Seller has not acquired all material permits, consents, licenses, approvals, or authorizations from any Governmental Authority required for Seller to own, construct, interconnect, operate or maintain the Facility and to permit Seller and Facility to make available and sell Product by the Expected Construction Start Date, despite the exercise of due diligence by Seller; or
(b) a Force Majeure Event occurs; or
(c) the Interconnection Facilities or Network Upgrades are not complete and ready for the Facility to connect and sell Product at the Delivery Point by the Guaranteed Commercial Operation Date, despite the exercise of due diligence by Seller.
Notwithstanding anything in this Agreement to the contrary, the cumulative extensions granted under the Development Cure Period above shall not exceed one hundred twenty (120) days, for any reason, including a Force Majeure Event, and no extension shall be given if the delay was the result of Seller’s failure to exercise due diligence to meet its requirements and deadlines. Upon request from Buyer, Seller shall provide documentation demonstrating to Buyer’s reasonable satisfaction that the delays described above did not result from Seller’s failure to exercise due diligence.
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65 5. Failure to Reach Guaranteed Capacity. If, at Commercial Operation, the Installed Capacity is less than one hundred percent (100%) of the Guaranteed Capacity, Seller shall have one hundred and eighty (180) days after the Commercial Operation Date to install additional capacity or Network Upgrades such that the Installed Capacity is equal to (but not greater than) the Guaranteed Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit H hereto specifying the new Installed Capacity. If Seller fails to construct the Guaranteed Capacity by such date, Seller shall pay “Capacity Damages” to Buyer, in an amount equal to One Hundred Thousand Dollars ($100,000) for each MW that the Guaranteed Capacity exceeds the Installed Capacity, and the Guaranteed Capacity and other applicable portions of the Agreement shall be adjusted accordingly.
6. Failure to Reach Guaranteed Capacity or Storage Contract Capacity. (a) Guaranteed Capacity. If, at Commercial Operation, the Installed PV Capacity is less than one hundred percent (100%) of the Guaranteed Capacity, Seller shall have one hundred twenty (120) days after the Commercial Operation Date to install additional capacity or Network Upgrades such that the Installed PV Capacity is equal to (but not greater than) the Guaranteed Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit H-1 hereto specifying the new Installed PV Capacity. If Seller fails to construct the Guaranteed Capacity by such date, Seller shall pay “Capacity Damages” to Buyer, in an amount equal to One Hundred Thousand Dollars ($100,000) for each MW that the Guaranteed Capacity exceeds the Installed PV Capacity, and the Guaranteed Capacity and other applicable portions of the Agreement shall be adjusted accordingly.
(b) Storage Contract Capacity. If, at Commercial Operation, the Installed Battery Capacity is less than one hundred percent (100%) of the Storage Contract Capacity, Seller shall have one hundred twenty (120) days after the Commercial Operation Date to install additional capacity or Network Upgrades such that the Installed Battery Capacity is equal to (but not greater than) one hundred percent (100%) of the Storage Contract Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit I-2 hereto specifying the new Installed Battery Capacity. If Seller fails to construct the Storage Contract Capacity by such date, Seller shall pay Capacity Damages to Buyer, in an amount equal to One Hundred Thousand Dollars ($100,000) for each MW that the Storage Contract Capacity exceeds the Installed Battery Capacity, and the Storage Contract Capacity and other applicable portions of the Agreement shall be adjusted accordingly.
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66 EXHIBIT C - COMPENSATION
Buyer shall compensate Seller for the Product in accordance with this Exhibit C. (a) Facility Energy. Buyer shall pay Seller the Renewable Rate for each MWh of Product, as measured by the amount of Facility Energy, up to one hundred fifteen percent (115%) of the Expected Energy for each Contract Year.
(b) Annual Excess Energy. Notwithstanding the foregoing, if, at any point in any Contract Year, the amount of Facility Energy exceeds one hundred fifteen percent (115%) of the Expected Energy for such Contract Year, the price to be paid for such additional Facility Energy amounts shall be $0.00/MWh.
(c) Excess Settlement Interval Deliveries. If during any Settlement Interval, Seller delivers Product amounts, as measured by the amount of Facility Energy, in excess of the product of the Guaranteed Capacity and the duration of the Settlement Interval, expressed in hours (“Excess MWh”), then the price applicable to all such excess MWh in such Settlement Interval shall be zero dollars ($0), and if there is a Negative LMP during such Settlement Interval, Seller shall pay to Buyer an amount equal to the absolute value of the Negative LMP times such excess MWh (“Negative LMP Costs”).
(d) Storage Rate. All Storage Product shall be paid on a monthly basis at the Storage Rate multiplied by the Storage Capacity for such month, as adjusted by the Storage Capacity Test, multiplied by the Round-Trip Efficiency Factor multiplied by the Availability Adjustment for such month (as determined under Exhibit N). Such payment constitutes the entirety of the amount due to Seller from Buyer for the Storage Product.
(e) Test Energy. Test Energy is compensated in accordance with Section 3.6. (f) Tax Credits. The Parties agree that the neither the Contract Price nor the Test Energy Rate are subject to adjustment or amendment if Seller fails to receive any Tax Credits, or if any Tax Credits expire, are repealed or otherwise cease to apply to Seller or the Facility in whole or in part, or Seller or its investors are unable to benefit from any Tax Credits. Except as otherwise provided herein, Seller shall bear all risks, financial and otherwise, throughout the Contract Term, associated with Seller’s or the Facility’s eligibility to receive Tax Credits or to qualify for accelerated depreciation for Seller’s accounting, reporting or Tax purposes. The obligations of the Parties hereunder, including those obligations set forth herein regarding the purchase and price for and Seller’s obligation to deliver Facility Energy and Product, shall be effective regardless of whether the sale of Facility Energy is eligible for, or receives Tax Credits during the Contract Term.
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67 EXHIBIT D - SCHEDULING COORDINATOR
RESPONSIBILITIES
(a) Buyer as Scheduling Coordinator for the Facility. Upon Initial Synchronization of the Facility to the CAISO Grid, Buyer shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility for both the delivery and the receipt of the Facility Energy, and if applicable, the Test Energy, at the Delivery Point. At least thirty (30) days prior to the Initial Synchronization of the Facility to the CAISO Grid, (i) Seller shall take all actions and execute and deliver to Buyer and the CAISO all documents necessary to authorize or designate Buyer (or Buyer’s designee) as the Scheduling Coordinator for the Facility effective as of the Initial Synchronization of the Facility to the CAISO Grid, and (ii) Buyer shall, and shall cause its designee to, take all actions and execute and deliver to Seller and the CAISO all documents necessary to authorize or designate Buyer or its designee as the Scheduling Coordinator for the Facility effective as of the Initial Synchronization of the Facility to the CAISO Grid. On and after Initial Synchronization of the Facility to the CAISO Grid, Seller shall not authorize or designate any other party to act as the Facility’s Scheduling Coordinator, nor shall Seller perform for its own benefit the duties of Scheduling Coordinator, and Seller shall not revoke Buyer’s authorization to act as the Facility’s Scheduling Coordinator unless agreed to by Buyer. Buyer (as the Facility’s SC) shall submit Schedules to the CAISO in accordance with this Agreement and the applicable CAISO Tariff, protocols and Scheduling practices for Product on a day-ahead, hour-ahead, fifteen-minute market or real time basis, as determined by Buyer.
(b) Notices. Buyer (as the Facility’s SC) shall provide Seller with access to a web-based system through which Seller shall submit to Buyer and the CAISO all notices and updates required under the CAISO Tariff regarding the Facility’s status, including, but not limited to, all outage requests, forced outages, forced outage reports, clearance requests, or must offer waiver forms. Seller will cooperate with Buyer to provide such notices and updates. If the web-based system is not available, Seller shall promptly submit such information to Buyer and the CAISO (in order of preference) telephonically, by electronic mail, transmission to the personnel designated to receive such information.
(c) CAISO Costs and Revenues. Except as otherwise set forth below, Buyer (as Scheduling Coordinator for the Facility) shall be responsible for CAISO costs (including penalties, Imbalance Energy costs, and other charges) and shall be entitled to all CAISO revenues (including credits, Imbalance Energy revenues, and other payments), including revenues associated with CAISO dispatches, bid cost recovery, Inter-SC Trade credits, or other credits in respect of the Product Scheduled or delivered from the Facility. Seller shall be responsible for all CAISO penalties resulting from any failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement (except to the extent such non-compliance is caused by Buyer’s failure to perform its duties as Scheduling Coordinator for the Facility). The Parties agree that any Availability Incentive Payments (as defined under DRAFT
68 the CAISO Tariff) are for the benefit of Seller and for Seller’s account and that any Non-Availability Charges (as defined in the CAISO Tariff) are the responsibility of Seller and for Seller’s account. In addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling, outage reporting, or generator operation, and any such sanctions or penalties are imposed upon the Facility or to Buyer as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties shall be Seller’s responsibility.
(d) CAISO Settlements. Buyer (as the Facility’s SC) shall be responsible for all settlement functions with the CAISO related to the Facility. Buyer shall render a separate invoice to Seller for any CAISO payments, charges or penalties (“CAISO Charges Invoice”) for which Seller is responsible under this Agreement. CAISO Charges Invoices shall be rendered after settlement information becomes available from the CAISO that identifies any CAISO charges. Notwithstanding the foregoing, Seller acknowledges that the CAISO will issue additional invoices reflecting CAISO adjustments to such CAISO charges. Buyer will review, validate, and if requested by Seller under paragraph (e) below, dispute any charges that are the responsibility of Seller in a timely manner and consistent with Buyer’s existing settlement processes for charges that are Buyer’s responsibilities. Subject to Seller’s right to dispute and to have Buyer pursue the dispute of any such invoices, Seller shall pay the amount of CAISO Charges Invoices within ten (10) Business Days of Seller’s receipt of the CAISO Charges Invoice. If Seller fails to pay any undisputed CAISO Charges Invoice within that period, Buyer may net or offset any amounts owing to it for these CAISO Charges Invoices against any future amounts it may owe to Seller under this Agreement. The obligations under this Section with respect to payment of CAISO Charges Invoices shall survive the expiration or termination of this Agreement.
(e) Dispute Costs. Buyer (as the Facility’s SC) may be required by Seller to dispute CAISO settlements in respect of the Facility. Seller agrees to pay Buyer’s third party costs and expenses (including reasonable attorneys’ fees) associated with its involvement with such CAISO disputes to the extent they relate to CAISO charges payable by Seller with respect to the Facility that Seller has directed Buyer to dispute. (f) Terminating Buyer’s Designation as Scheduling Coordinator. At least thirty (30) days prior to expiration of this Agreement or as soon as reasonably practicable upon an earlier termination of this Agreement, the Parties will take all actions necessary to terminate the designation of Buyer as Scheduling Coordinator for the Facility as of 11:59 p.m. on such expiration date. (g) Master Data File and Resource Data Template. Seller shall provide the data to the CAISO (and to Buyer) that is required for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement. Neither Party shall change such data without the other Party’s prior written consent.
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69 EXHIBIT E - PROGRESS REPORTING FORM
Each Progress Report must include the following items:
1. Executive Summary.
2. Facility description.
3. Site plan of the Facility.
4. Description of any material planned changes to the Facility or the site.
5. Gantt chart schedule showing progress on achieving each of the Milestones.
6. Summary of activities during the previous calendar quarter or month, as applicable, including any OSHA labor hour reports.
7. Forecast of activities scheduled for the current calendar quarter.
8. Written description about the progress relative to Seller’s Milestones, including whether Seller has met or is on target to meet the Milestones.
9. List of issues that are likely to potentially affect Seller’s Milestones.
10. A status report of start-up activities including a forecast of activities ongoing and after start-up, a report on Facility performance including performance projections for the next twelve (12) months
11. Prevailing wage reports as required by Law.
12. Progress and schedule of all major agreements, contracts, permits, approvals, technical studies, financing agreements and major equipment purchase orders showing the start dates, completion dates, and completion percentages.
13. Pictures, in sufficient quantity and of appropriate detail, in order to document construction and startup progress of the Facility, the interconnection into the Transmission System and all other interconnection utility services.
14. Any other documentation reasonably requested by Buyer.
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70 EXHIBIT F1 - FORM OF AVERAGE EXPECTED ENERGY
REPORT
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71 EXHIBIT F2 - FORM OF MONTHLY AVAILABLE CAPACITY
REPORT
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72 EXHIBIT G - FORM OF COMMERCIAL OPERATION DATE
CERTIFICATE
This certification (“Certification”) of Commercial Operation is delivered by [licensed professional engineer] (“Engineer”) to Pioneer Community Energy, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated ___________ (“Agreement”) by and between [Seller Entity] and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
As of [Date], Engineer hereby certifies and represents to Buyer the following:
1. The Facility is fully operational, reliable and interconnected, fully integrated and synchronized with the Participating Transmission Owner and CAISO.
2. Seller has installed equipment for the Facility with a nameplate capacity of no less than ninety-five percent (95%) of the Guaranteed Capacity.
3. Seller has commissioned all equipment in accordance with its respective manufacturer’s specifications.
4. Seller has demonstrated functionality of the Facility’s communication systems and automatic generation control (AGC) interface to operate the Facility as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, directed by the Buyer in accordance with the Agreement and/or the CAISO, including through ADS.
5. A performance test for the Facility demonstrated peak electrical output of __ MW AC at the Delivery Point, as adjusted for ambient conditions on the date of the performance test (“Installed Capacity”).
6. The Installed Capacity is not less than ninety-five (95%) of the Guaranteed Capacity.
7. [The Installed Battery Capacity is not less than one hundred eighty percent (180%) of the Installed PV Capacity.]
8. Authorization to parallel the Facility was obtained by the Participating Transmission Owner on [Date].
9. The Participating Transmission Owner has provided documentation supporting full unrestricted release for Commercial Operation by the Participating Transmission Owner on [Date].
10. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff on [Date].
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73 EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
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74 EXHIBIT H1 - FORM OF INSTALLED PV CAPACITY
CERTIFICATE
This certification (“Certification”) of Installed PV Capacity is delivered by [licensed professional engineer] (“Engineer”) to Pioneer Community Energy, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated ___________ (“Agreement”) by and between [Seller Entity] and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
I hereby certify the performance test for the Generating Facility demonstrated peak electrical output of __ MW AC at the Delivery Point, as adjusted for ambient conditions on the date of the performance test (“Installed PV Capacity”).
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
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75 EXHIBIT H2 - FORM OF INSTALLED BATTERY CAPACITY
CERTIFICATE
This certification (“Certification”) of Installed Battery Capacity is delivered by [licensed professional engineer] (“Engineer”) to Pioneer Community Energy, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated ___________ (“Agreement”) by and between [Seller Entity] and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
I hereby certify the Storage Capacity Test demonstrated a maximum dependable operating capability that can be sustained for four (4) consecutive hours to discharge electric energy of __ MW AC to the Delivery Point, in accordance with the testing procedures, requirements and protocols set forth in Section 4.8 and Exhibit O (the “Installed Battery Capacity”).
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
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76 EXHIBIT I - FORM OF CONSTRUCTION START DATE
CERTIFICATE
This certification of Construction Start Date (“Certification”) is delivered by [Seller Entity] (“Seller”) to Pioneer Community Energy, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Renewable Power Purchase Agreement dated __________ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Seller hereby certifies and represents to Buyer the following:
1. Construction Start (as defined in Exhibit B of the Agreement) has occurred, and a copy of the notice to proceed that Seller issued to its contractor as part of Construction Start is attached hereto;
2. the Construction Start Date occurred on _____________ (the “Construction Start Date”); and
3. the precise Site on which the Facility is located is, which must be within the boundaries of the previously identified Site: _________________________________________.
IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as of the ___ day of ________.
[SELLER ENTITY]
By:
Printed Name:
Title:
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77 EXHIBIT J - FORM OF LETTER OF CREDIT
[Issuing Bank Letterhead and Address]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [XXXXXXX]
Date:
Bank Ref.:
Amount: US$[XXXXXXXX]
Expiration Date:
Beneficiary:
Pioneer Community Energy
2510 Warren Dr.
Rocklin, CA 95677
Ladies and Gentlemen:
By the order of __________ (“Applicant”), we, [insert bank name and address] (“Issuer”) hereby issue our Irrevocable Standby Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) in favor of Pioneer Community Energy, a California joint powers authority (“Beneficiary”), for an amount not to exceed the aggregate sum of U.S. $[XXXXXX] (United States Dollars [XXXXX] and 00/100), pursuant to that certain Renewable Power Purchase Agreement dated as of [insert date] and as amended (the “Agreement”) between Applicant and Beneficiary. This Letter of Credit shall become effective immediately and shall expire on [insert date] which is one year after the issue date of this Letter of Credit, or any expiration date extended in accordance with the terms hereof (the “Expiration Date”).
Funds under this Letter of Credit are available to Beneficiary by valid presentation on or before the Expiration Date of a dated statement purportedly signed by your duly authorized representative, in the form attached hereto as Exhibit 1, containing one of the two alternative paragraphs set forth in paragraph 2 therein, referencing our Letter of Credit No. [XXXXXXX] (“Drawing Certificate”).
The Drawing Certificate may be presented by (a) physical delivery, (b) as a PDF attachment to an email to [bank email address] or (c) facsimile to [bank fax number]. Transmittal by email shall be deemed delivered when received.
The original of this Letter of Credit (and all amendments, if any) is not required to be presented in connection with any presentation of a Drawing Certificate by Beneficiary hereunder in order to receive payment.
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 before the Expiration Date.
All payments made under this Letter of Credit shall be made with Issuer’s own immediately available funds by means of wire transfer in immediately available United States dollars to Beneficiary’s account as indicated by Beneficiary in its Drawing Certificate or in a communication accompanying its Drawing Certificate.
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78 Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance.
It is a condition of this Letter of Credit that it shall be deemed automatically extended without an amendment for a one year period beginning on the present Expiration Date hereof and upon each anniversary for such date, unless at least one hundred twenty (120) days prior to any such Expiration Date we have sent to you written notice by overnight courier service that we elect not to extend this Letter of Credit, in which case it will expire on its the date specified in such notice. No presentation made under this Letter of Credit after such Expiration Date (or such later date, if applicable) will be honored.
Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements, this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.
This Letter of Credit is issued subject to the rules of the ‘International Standby Practices 1998’, International Chamber of Commerce Publication No. 590 (“ISP98”) and, as to matters not addressed by ISP98, shall be governed and construed in accordance with the laws of state of California.
Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available.
All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: Pioneer Community Energy, 2510 Warren Dr. Rocklin, CA 95677.
Only notices to Beneficiary meeting the requirements of this paragraph shall be considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect.
[Bank Name]
_________________________
[Insert officer name]
[Insert officer title]
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79 Exhibit 1 - Drawing Certificate
(DRAW REQUEST SHOULD BE ON BENEFICIARY’S LETTERHEAD)
[Insert Bank Name and Address]
Ladies and Gentlemen:
The undersigned, a duly authorized representative of Pioneer Community Energy, a California joint powers authority, as beneficiary (the “Beneficiary”) of the Irrevocable Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) issued by [insert bank name] (the “Bank”) by order of __________ (the “Applicant”), hereby certifies to the Bank as follows:
1. Applicant and Beneficiary are party to that certain Renewable Power Purchase Agreement dated as of ___________, 20__ (the “Agreement”).
2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________ because a Seller Event of Default (as such term is defined in the Agreement) has occurred or other occasion provided for in the Agreement where Beneficiary is authorized to draw on the Letter of Credit has occurred.
OR
Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________, which equals the full available amount under the Letter of Credit, because Applicant is required to maintain the Letter of Credit in force and effect beyond the Expiration Date of the Letter of Credit but has failed to provide Beneficiary with a replacement Letter of Credit or other acceptable instrument within thirty (30) days prior to such Expiration Date.
3. The undersigned is a duly authorized representative of Pioneer Community Energy, a California joint powers authority and is authorized to execute and deliver this Drawing Certificate on behalf of Beneficiary.
You are hereby directed to make payment of the requested amount to Pioneer Community Energy by wire transfer in immediately available funds to the following account: [Specify account information] Pioneer Community Energy
_______________________________
Name and Title of Authorized Representative
Date___________________________
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80 DRAFT
81 EXHIBIT K - FORM OF GUARANTY
This Guaranty (this “Guaranty”) is entered into as of [_____] (the “Effective Date”) by and between [_____], a [______] (“Guarantor”), and Pioneer Community Energy, a California joint powers authority (together with its successors and permitted assigns, “Buyer”).
Recitals
A. Buyer and [SELLER ENTITY], a _____________________ (“Seller”), entered into that certain Renewable Power Purchase Agreement (as amended, restated or otherwise modified from time to time, the “PPA”) dated as of [____], 20___.
B. Guarantor is entering into this Guaranty as Performance Security to secure Seller’s obligations under the PPA, as required by Section 8.8 of the PPA.
C. It is in the best interest of Guarantor to execute this Guaranty inasmuch as Guarantor will derive substantial direct and indirect benefits from the execution and delivery of the PPA.
D. Initially capitalized terms used but not defined herein have the meaning set forth in the PPA.
Agreement
1. Guaranty. For value received, Guarantor does hereby unconditionally, absolutely and irrevocably guarantee, as primary obligor and not as a surety, to Buyer the full, complete and prompt payment by Seller of any and all amounts and payment obligations now or hereafter owing from Seller to Buyer under the PPA, including compensation for penalties, the Termination Payment, indemnification payments or other damages, as and when required pursuant to the terms of the PPA (the “Guaranteed Amount”), provided, that Guarantor’s aggregate liability under or arising out of this Guaranty shall not exceed ________ Dollars ($___________). The Parties understand and agree that any payment by Guarantor or Seller of any portion of the Guaranteed Amount shall thereafter reduce Guarantor’s maximum aggregate liability hereunder on a dollar-for-dollar basis. This Guaranty is an irrevocable, absolute, unconditional and continuing guarantee of the full and punctual payment and performance, and not of collection, of the Guaranteed Amount and, except as otherwise expressly addressed herein, is in no way conditioned upon any requirement that Buyer first attempt to collect the payment of the Guaranteed Amount from Seller, any other guarantor of the Guaranteed Amount or any other Person or entity or resort to any other means of obtaining payment of the Guaranteed Amount. In the event Seller shall fail to duly, completely or punctually pay any Guaranteed Amount as required pursuant to the PPA, Guarantor shall promptly pay such amount as required herein.
2. Demand Notice. For avoidance of doubt, a payment shall be due for purposes of this Guaranty only when and if a payment is due and payable by Seller to Buyer under the terms and conditions of the Agreement. If Seller fails to pay any Guaranteed Amount as required pursuant to the PPA for five (5) Business Days following Seller’s receipt of Buyer’s written notice of such failure (the “Demand Notice”), then Buyer may elect to exercise its rights under this Guaranty 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 may DRAFT
82 make a demand upon Guarantor (a “Payment Demand”) for such unpaid Guaranteed Amount. A Payment Demand shall be in writing and shall reasonably specify in what manner and what amount Seller has failed to pay and an explanation of why such payment is due and owing, with a specific statement that Buyer is requesting that Guarantor pay under this Guaranty. Guarantor shall, within five (5) Business Days following its receipt of the Payment Demand, pay the Guaranteed Amount to Buyer.
3. Scope and Duration of Guaranty. This Guaranty applies only to the Guaranteed Amount. This Guaranty shall continue in full force and effect from the Effective Date until the earliest of the following:
(x) all Guaranteed Amounts have been paid in full (whether directly or indirectly through set-off or netting of amounts owed by Buyer to Seller), or (y) replacement Performance Security is provided in an amount and form required by the terms of the PPA. 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 DRAFT
83 (ix) any other event or circumstance that may now or hereafter constitute a defense to payment of the Guaranteed Amount, including statute of frauds and accord and satisfaction;
provided that, subject to Guarantor’s payment of a Guaranteed Amount in accordance with Paragraph 2, Guarantor reserves the right to assert for itself in a subsequent proceeding any defenses, setoffs or counterclaims that Seller is or may be entitled to assert against Buyer (except for such defenses, setoffs or counterclaims that may be asserted by Seller with respect to the PPA, but that are expressly waived under any provision of this Guaranty).
4. Waivers by Guarantor. Guarantor hereby unconditionally waives as a condition precedent to the performance of its obligations hereunder, with the exception of the requirements in Paragraph 2, (a) notice of acceptance, presentment or protest with respect to the Guaranteed Amounts and this Guaranty, (b) notice of any action taken or omitted to be taken by Buyer in reliance hereon, (c) any requirement that Buyer exhaust any right, power or remedy or proceed against Seller under the PPA, and (d) any event, occurrence or other circumstance which might otherwise constitute a legal or equitable discharge of a surety. Without limiting the generality of the foregoing waiver of surety defenses, it is agreed that the occurrence of any one or more of the following shall not affect the liability of Guarantor hereunder:
(i) at any time or from time to time, without notice to Guarantor, the time for payment of any Guaranteed Amount shall be extended, or such performance or compliance shall be waived;
(ii) the obligation to pay any Guaranteed Amount shall be modified, supplemented or amended in any respect in accordance with the terms of the PPA; (iii) subject to 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
5. Subrogation. Notwithstanding any payments that may be made hereunder by the Guarantor, Guarantor hereby agrees that until the earlier of payment in full of all Guaranteed Amounts or expiration of the Guaranty in accordance with Section 3, it shall not be entitled to, nor shall it seek to, exercise any right or remedy arising by reason of its payment of any Guaranteed Amount under this Guaranty, whether by subrogation or otherwise, against Seller or seek contribution or reimbursement of such payments from Seller.
6. Representations and Warranties. Guarantor hereby represents and warrants that (a) it has all necessary and appropriate [limited liability company][corporate] powers and authority and the legal right to execute and deliver, and perform its obligations under, this Guaranty, (b) this Guaranty constitutes its legal, valid and binding obligations enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium DRAFT
84 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 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. Any party may change its address to which notice is given hereunder by providing notice of the same in accordance with this Paragraph 7.
If delivered to Buyer, to it at [____]
Attn: [____]
Fax: [____]
If delivered to Guarantor, to it at [____]
Attn: [____]
Fax: [____]
8. Governing Law and Forum Selection. This Guaranty shall be governed by, and interpreted and construed in accordance with, the laws of the United States and the State of California, excluding choice of law rules. The Parties agree that any suit, action or other legal proceeding by or against any party (or its affiliates or designees) with respect to or arising out of this Guaranty shall be brought in the federal courts of the United States or the courts of the State of California sitting in the City and County of San Francisco, California.
9. Miscellaneous. This Guaranty shall be binding upon Guarantor and its successors and assigns and shall inure to the benefit of Buyer and its successors and permitted assigns pursuant to the PPA. No provision of this Guaranty may be amended or waived except by a written instrument executed by Guarantor and Buyer. This Guaranty is not assignable by Guarantor without the prior written consent of Buyer. No provision of this Guaranty confers, nor is any provision intended to confer, upon any third party (other than Buyer’s successors and permitted assigns) any benefit or right enforceable at the option of that third party. This Guaranty embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements and understandings of the parties hereto, verbal or written, relating to the subject matter hereof. If any provision of this Guaranty is determined to be illegal or unenforceable (i) such provision shall be deemed restated in accordance with applicable Laws to reflect, as nearly as possible, the original intention of the DRAFT
85 parties hereto and (ii) such determination shall not affect any other provision of this Guaranty and all other provisions shall remain in full force and effect. This Guaranty may be executed in any number of separate counterparts, each of which when so executed shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Guaranty may be executed and delivered by electronic means with the same force and effect as if the same was a fully executed and delivered original manual counterpart. [Signature on next page]
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86 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: _____________________________
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87 EXHIBIT L - NOTICES
_____________________
(“Seller”)
PIONEER COMMUNITY ENERGY, a
California joint powers authority (“Buyer”)
All Notices:
Street:
City:
Attn:
Phone:
Email:
All Notices:
Pioneer Community Energy
2510 Warren Dr.
Rocklin, CA 95677
Attn: Kristoffer Antigua
Phone: (916) 955-8384
Email:
[email protected]
Reference Numbers:
Duns:
Federal Tax ID Number:
Reference Numbers:
Duns: 08-097-5104
Federal Tax ID Number:
Invoices:
Attn:
Phone:
E-mail:
Invoices:
Attn: Finance and Administration
Phone: (916) 758-8943
E-mail: [email protected]
Scheduling:
Attn:
Phone:
Email:
Scheduling:
Attn: Day Ahead Scheduler
Phone: (916) 235-9193; (916) 221-4064
E-mail: [email protected]
Confirmations:
Attn:
Phone:
Email:
Confirmations:
Attn: Procurement
Phone: (916) 758-8950
Email:
[email protected]
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88 _____________________
(“Seller”)
PIONEER COMMUNITY ENERGY, a
California joint powers authority (“Buyer”)
Payments:
Attn:
Phone:
E-mail:
Payments:
Attn: Finance and Administration
Phone: (916) 758-8943
E-mail: [email protected]
Wire Transfer:
BNK:
ABA:
ACCT:
Wire Transfer:
BNK: UMPQUA BANK
ABA: 123205054
ACCT: XXXXXX5407
With additional Notices of an Event of Default
to:
Attn:
Phone:
E-mail:
With additional Notices of an Event of Default
to:
Hall Energy Law PC
Attn: Stephen Hall
Phone: (503) 313-0755
Email: [email protected]
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89 EXHIBIT M - STORAGE AVAILABILITY
Monthly Storage Availability
(a) Calculation of Monthly Storage Availability. Seller shall calculate the “Monthly Storage Availability” in a given month using the formula set forth below:
Monthly Storage Availability (%) =
[MNTHHRSm - UNAVAILHRSm ]
MNTHHRSm
where:
m = relevant month “m” in which availability is calculated; MNTHHRSm is the total number of hours for the month;
UNAVAILHRSm, is the total number of hours in the month during which the Facility was unavailable to deliver Storage Product for any reason other than the occurrence of any of the following (each, an “Excused Event”): a Force Majeure Event, Storage Capacity Tests, System Emergencies, scheduled maintenance of the Facility up to fifty (50) hours in the aggregate during any calendar year (and hours of unavailability due to scheduled maintenance in excess of such limit shall be included in UNAVAILHRSm for the applicable periods after such limit is exceeded), an Event of Default by Buyer, or the Operating Restrictions in Exhibit P. To be clear, hours of unavailability caused by any Excused Event will not be included in UNAVAILHRSm for such month. Any other event that results in unavailability of the Facility for less than a full hour or that results in unavailability of less than all of the Facility will count as an equivalent percentage of the applicable hour(s) for this calculation. For example, if the Facility is 50% unavailable for 50% of an hour (but fully available the other 50% of the hour), it will be considered to be unavailable for 25% of the hour.
If the Facility or any component thereof was previously deemed unavailable for an hour or part of an hour, and Seller provides a revised Notice indicating the Facility is available for that hour or part of an hour by 5:00 a.m. of the morning Buyer schedules or bids the Facility in the Day-Ahead Market, the Facility will be deemed to be available to the extent set forth in the revised Notice.
If the Facility or any component thereof was previously deemed unavailable for an hour or part of an hour and Seller provides a revised Notice indicating the Facility is available for that hour or part of an hour at least sixty (60) minutes prior to the time the Buyer is required to schedule or bid the Facility in the Real-Time Market, and the Facility is dispatched in the Real-Time Market, the Facility will be deemed to be available to the extent set forth in the revised Notice.
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90 Availability Adjustment
The applicable “Availability Adjustment” or “AA” is calculated as follows:
(i) If the Monthly Storage Availability is greater than or equal to the Guaranteed Storage Availability, then:
AA = 100%
(ii) If the Monthly Storage Availability is less than the Guaranteed Storage Availability, but greater than or equal to 70%, then:
AA = 100% - [(97% - Monthly Storage Availability) × 2]
(iii) If the Monthly Storage Availability is less than 70%, then:
AA = 0
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91 EXHIBIT N - STORAGE CAPACITY TESTS
Storage Capacity Test Notice and Frequency
A. Commercial Operation Date Storage Capacity Test. Upon no less than ten (10) Business Days prior Notice to Buyer, Seller shall schedule and complete a Storage Capacity Test prior to the Commercial Operation Date. Such initial Storage Capacity Test shall be performed in accordance with this Exhibit M and shall establish the Storage Capacity hereunder based on the actual capacity of the Facility determined by such Storage Capacity Test.
B. Subsequent Storage Capacity Tests. Following the Commercial Operation Date, once each Contract Year Seller will perform a Storage Capacity Test and will give Buyer ten (10) Business Days prior Notice to Seller of such test. At least twice per Contract Year, Buyer shall have the right to require Seller to schedule and complete a Storage Capacity Test. In addition, Buyer shall have the right to require a test or retest of the Storage Capacity Test at any time upon no less than five (5) Business Days prior written Notice to Seller if Buyer provides data with such Notice reasonably indicating that the Storage Capacity has varied materially from the results of the most recent Storage Capacity Test. Seller shall have the right to run a retest of any Storage Capacity Test upon five (5) Business Days’ prior written Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practice).
C. Test Results and Re-Setting of Storage Capacity and Efficiency Rate. No later than five (5) days following any Storage Capacity Test, Seller shall submit a testing report detailing results and findings of the test. The report shall include Storage Facility Meter readings and plant log sheets verifying the operating conditions and output of the Facility. In accordance with Section 4.9(c) of the Agreement and Part II(I) below, the actual efficiency rate and storage capacity determined pursuant to a Storage Capacity Test (up to, but not in excess of, the Storage Contract Capacity) shall become the new Storage Capacity and Efficiency Rate at the beginning of the day following the completion of the test for calculating compensation and all other purposes under this Agreement.
Storage Capacity Test Procedures
Storage Capacity Test Procedures
PART I.GENERAL.
Each Storage Capacity Test (including the initial Storage Capacity Test and all re-performances thereof) shall be conducted in accordance with Prudent Operating Practices and the provisions of this Exhibit O.
For ease of reference, a Storage Capacity Test is sometimes referred to in this Exhibit O as a “SCT”.
Buyer or its representative may be present for the SCT and may, for informational purposes only, use its own metering equipment (at Buyer’s sole cost).
PART II. REQUIREMENTS APPLICABLE TO ALL STORAGE CAPACITY TESTS.
A. Purpose of Test. Each SCT shall:
(1) Determine an updated Storage Capacity;
(2) Determine the amount of Energy required to fully charge the Facility; DRAFT
92 (3) Determine the Facility charge ramp rate;
(4) Determine the Facility discharge ramp rate;
(5) Determine an updated Efficiency Rate.
B. Test Elements. Each SCT shall include the following test elements:
• The measurement of Charging Energy, as measured by the Storage Facility Meter or other mutually agreed meter, that is required to charge the Facility up to the Maximum Stored Energy Level (as defined in Exhibit A) not to exceed the Storage Contract Output (MWh) (“Energy In”);
• The measurement of Discharging Energy, as measured by the Storage Facility Meter or other mutually agreed meter, that is discharged from the Facility to the Delivery Point until the Stored Energy Level reaches zero MWh as indicated by the battery management system (“Energy Out”);
• Electrical output at Maximum Discharging Capacity (as defined in Exhibit A) at the Storage Facility Meter and concurrently at the Facility Meter (MW); • Electrical input at Maximum Charging Capacity (as defined in Exhibit A) at the Storage Facility Meter (MW);
• Amount of time between the Facility’s electrical output going from 0 to Maximum Discharging Capacity;
• Amount of time between the Facility’s electrical input going from 0 to Maximum Charging Capacity;
• Amount of energy required to go from 0% Stored Energy Level to 100% Stored Energy Level charging at a rate equal to the Maximum Charging Capacity.
C. Parameters. During each SCT, the following parameters shall be measured and recorded simultaneously for the Facility, at ten (10) minute intervals:
(1) discharge time (minutes);
(2) charging energy (MWh);
(3) discharging energy (MWh);
(4) Stored Energy Level (MWh).
D. Site Conditions. During each SCT, the following conditions at the Site shall be measured and recorded simultaneously at thirty (30) minute intervals:
(1) Relative humidity (%);
(2) Barometric pressure (inches Hg) near the horizontal centerline of the Facility; and
DRAFT
93 (3) Ambient air temperature (°F).
E. Test Showing. Each SCT must demonstrate that the Facility:
(1) successfully started;
(2) operated for at least four (4) consecutive hours at Maximum Discharging Capacity;
(3) operated for at least four (4) consecutive hours at Maximum Charging Capacity; (4) has a Storage Capacity of an amount that is, at least, equal to the Maximum Stored Energy Level (as defined in Exhibit A); and
(5) is able to deliver Discharging Energy to the Delivery Point as measured by the Facility Meter for four (4) consecutive hours at a rate equal to the Maximum Discharging Capacity.
F. Test Conditions.
(i) General. At all times during a SCT, the Facility shall be operated in compliance with Prudent Operating Practices and all operating protocols recommended, required or established by the manufacturer for operation at Maximum Discharging Capacity and Maximum Charging Capacity (as each is defined in Exhibit A).
(ii) Abnormal Conditions. If abnormal operating conditions that prevent the recordation of any required parameter occur during a SCT, Seller may postpone or reschedule all or part of such SCT in accordance with Part II.F below. (iii) Instrumentation and Metering. Seller shall provide all instrumentation, metering and data collection equipment required to perform the SCT. The instrumentation, metering and data collection equipment electrical meters shall be calibrated in accordance with Prudent Operating Practice.
G. Incomplete Test. If any SCT is not completed in accordance herewith, Buyer may in its sole discretion: (i) accept the results up to the time the SCT stopped; (ii) require that the portion of the SCT not completed, be completed within a reasonable specified time period; or (iii) require that the SCT be entirely repeated. Notwithstanding the above, if Seller is unable to complete a SCT due to a Force Majeure Event or the actions or inactions of Buyer or the CAISO or the PTO or the Transmission Provider, Seller shall be permitted to reconduct such SCT on dates and at times reasonably acceptable to the Parties.
H. Final Report. Within fifteen (15) Business Days after the completion of any SCT, Seller shall prepare and submit to Buyer a written report of the results of the SCT, which report shall include:
(1) a record of the personnel present during the SCT that served in an operating, testing, monitoring or other such participatory role;
(2) the measured data for each parameter set forth in Part II.A through C, including copies of the raw data taken during the test;
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94 (3) the level of Storage Capacity, Energy In, Energy Out, Efficiency Rate, Charging Capacity, the current charge and discharge ramp rate, and Stored Energy Level determined by the SCT, including supporting calculations; and (4) Seller’s statement of either Seller’s acceptance of the SCT or Seller’s rejection of the SCT results and reason(s) therefor.
Within ten (10) Business Days after receipt of such report, Buyer shall notify Seller in writing of either Buyer’s acceptance of the SCT results or Buyer’s rejection of the SCT and reason(s) therefor.
If either Party rejects the results of any SCT, such SCT shall be repeated in accordance with Part II.F.
I. Supplementary Storage Capacity Test Protocol. No later than sixty (60) days prior to commencing Facility construction, Seller shall deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) an updated supplement to this Exhibit O with additional and supplementary details, procedures and requirements applicable to Storage Capacity Tests based on the then current design of the Facility (“Supplementary Storage Capacity Test Protocol”).
Thereafter, from time to time, Seller may deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) any Seller recommended updates to the then current Supplementary Storage Capacity Test Protocol. The initial Supplementary Storage Capacity Test Protocol (and each update thereto), once approved by Buyer, shall be deemed an amendment to this Exhibit O.
J. Adjustment to Storage Capacity. The total amount of Discharging Energy delivered to the Delivery Point (expressed in MWh AC) during each of the first four (4) hours of discharge (up to, but not in excess of, the product of (i) the original Storage Capacity set forth on the Cover Sheet, as such original Storage Capacity on the Cover Sheet may have been adjusted (if at all) under this Agreement, multiplied by (ii) four (4), shall be divided by four (4) hours to determine the Storage Capacity, which shall be expressed in MW AC, and shall be the new Storage Capacity in accordance with Section 4.9(c) of the Agreement until updated pursuant to a subsequent Storage Capacity Test.
K. Adjustment to Efficiency Rate. The total amount of Energy Out (as reported in Part II.B above) divided by the total amount of Energy In (as reported in Part II.B above), and expressed as a percentage, shall be the new Efficiency Rate, and shall be used for the calculation of the Round-Trip Efficiency Factor used in Exhibit C until updated pursuant to a subsequent Storage Capacity Test.
Part III. SUPPLEMENTARY STORAGE CAPACITY TEST PROTCOL
A. Conditions Precedent to SCT
• Control System Functionality: The storage facility control system shall be successfully configured to receive data from the battery system, exchange distributed network protocol 3 data with the Buyer SCADA device, and transfer data to the database server for the calculation, recording and archiving of data points. • Communications: Remote Terminal Unit (RTU) testing should be successfully completed prior to SCT. The interface between Buyer’s RTU and the storage facility DRAFT
95 SCADA system should be fully tested and functional prior to starting testing. This includes verification of data transmission pathway between the Buyer’s RTU and Seller’s control system interface and the ability to record SCADA data. • Commissioning Checklist: Commissioning Checklist shall be successfully completed on all installed facility equipment, including verification that all controls, set points, and instruments of the control system are configured.
• Control System Functionality: The control system is operable within the requirements and has been successfully configured to receive data from the battery system and transfer data to the onsite servers for the calculation, recording and archiving of data points.
• The following Commercial Operation tests will be repeated annually:
• PMAX Capacity Test
• Round-Trip Efficiency and Energy Test
B. PMAX Capacity Test
1. Purpose: This test will demonstrate the PMAX and will hold the storage facility’s maximum operating level (MW), up to the Storage Contract Capacity, for up to five (5) minutes, “Qualified Power Capacity”.
2. Procedure:
i. System starting state: The storage facility will be in the on-line state with each battery subsystem at 100% usable state of charge (SOC) and at an initial active power level of 0 MW and reactive power level of 0 MVAR.
ii. Record the storage facility active power level at the Storage Facility Meter. iii. Command the storage facility to follow a signal equal to the storage facility’s maximum operating level for five (5) minutes.
iv. Record and store the storage facility active power response. Measurements will be made at the point of interconnection (POI) and by the control system with a recording in the storage facility historian.
v. System end state: The storage facility will be in the on-line state and at a commanded active power level of 0 MW.
Pass/Fail Criteria
The storage facility active power response and the commanded level shall be within ±2% as measured by the sum of values at the POI. The time to full output shall be less than 100 ms. The hold period of such active power value shall be five (5) minutes and recorded in the control system historian.
Passed Failed Date:
DRAFT
96 Test Performed by:
Test Witnessed by:
Notes/Test Conditions:
_____________________________________________________________________ _____________________________________________________________________ C. Round-Trip Efficiency and Energy Test
1. The following test demonstrates the updated Efficiency Rate and amount of Energy required to fully charge the Facility (when performed annually or ad hoc). i. The resulting quantity of Discharging Energy is the Energy Out (as reported in Part II.B above) and the resulting quantity Charging Energy is the Energy In (as reported in Part II.B above).
ii. The Qualified Energy is the sum of the total quantity of Discharging Energy at the Storage Facility Meter.
2. The storage facility will be operated in both the charge and discharge directions in the following order:
i. [Seller to specify, example language below]
ii. [Set each Battery Subsystem to [3%] SOC.
iii. Allow each Battery Subsystem to enter background cell balancing mode by maintaining a SOC of [3% for 20 minutes]. After the background cell balancing mode begins the system can be operated as normal. Allow the cell balancing function to operate in the background for at least 24 hours to allow the automatic cell balancing procedure to reach completion. This time may be reduced based on equipment suppliers’ recommendations.
iv. Discharge each Battery Subsystem to 0% SOC.
v. Immediately perform the Round-Trip Efficiency and Capacity Test set forth below.]
3. To be valid, the SCT must be started within twenty-four (24) hours of the end of the period (greater than four days) during which cell balancing was completed. For the duration of the SCT, the control system will be configured to have the power limiting mechanisms disabled, and each battery subsystem shall be configured to follow the charge and discharge current limits specified by their respective battery management system.
4. Procedure:
i. System Starting State: The storage facility will be in the on-line state with each Battery Subsystem at 0% SOC.
ii. Verify that in the previous twenty-four (24) hour period, each Battery Subsystem completed the cell balancing procedure allowing full cell balancing to occur, as described in steps i-iv.
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97 iii. Verify that ambient temperature measurements at all Battery Subsystems are between [18 °C and 28 °C] throughout this test.
iv. Record initial values of each Battery Subsystem SOC. v. Command a real power charge that results in an AC power of facility’s full charging power and continue the charge until the power is 2% different. vi. Record and store the AC energy charged to the system as measured at the POI meter. Measurements will be made by the POI meter with recording in the storage facility historian.
vii. Within 5 minutes, command a real power discharge that results in an AC power output of the storage facility’s maximum discharge power. viii. Maintain the discharging until the power is 2% different. ix. Record and store the AC energy discharged as measured at the facility meter.
Measurements will be made by the Storage Facility Meter with recording in the storage facility historian.
Pass/Fail Criteria
The measured Efficiency Rate is greater than or equal to the Guaranteed Efficiency Rate. The Qualified Energy is greater than or equal to the Storage Contract Output.
Passed Failed Date:
Test Performed by:
Test Witnessed by:
Notes/Test Conditions:
________________________________________________________________________ ________________________________________________________________________ DRAFT
98 EXHIBIT O - OPERATING RESTRICTIONS
Maximum Storage Level: [XX] MWh
Minimum Storage Level: 0 MWh
Maximum Charging Capacity: [XX] MW
Minimum Charging Capacity: 0.01 MW
Maximum Discharging Capacity: [XX] MW
Minimum Discharging Capacity: 0.01 MW
Maximum State of Charge (SOC)
during Charging:
100 %
Minimum State of Charge (SOC)
during Discharging:
0 %
Ramp Rate: [XX] MW/minute
Annual Cycles: Maximum of 365 Full Cycle Equivalents per Contract Year with no monthly cap.
Daily Dispatch Limits: Charging: 2 per day
Discharging: 2 per day
Partial Charging/Discharging: No limits beyond the
operational conditions specified.
Maximum Time at Minimum Storage
Level:
N/A
The following capitalized terms have the meanings ascribed to them below in this Exhibit P:
“Full Cycle” means the Storage Facility is charged, then discharged at a MWh quantity equal to the energy capacity in MWh. For example, SOC starts at 1%, the Storage Facility is charged to 100% and then discharged to 1%.
“Full Cycle Equivalent” means Partial Cycles that aggregate to one Full Cycle. For example, two 50 percent (50%) Partial Cycles or four 25 percent (25%) Partial Cycles is one (1) Full Cycle Equivalent.
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99 “Partial Cycle” means the Storage Facility is charged and discharged at a MWh quantity less than 100 percent (100%) of the Storage Facility energy capacity. For example, SOC starts at 50%, the Storage Facility is discharged to 0% and then charged back to 50%.
DRAFT
100
EXHIBIT P - METERING DIAGRAM
Board of Directors
REGULAR MEETING
MARCH 20, 2025
THIS DOCUMENT TO BE PROVIDED
AT THE MARCH 20, 2025 BOARD MEETING
AND TO BE UPLOADED TO THE PIONEER WEBSITE
FOLLOWING THE MEETING
ITEM 5
REPORT ATTACHMENT 2
Redline showing changes made to the Local Feed-in Tariff Plf)NEEA
COMMUNITY ENERGY
Board of Directors
REGULAR MEETING
MARCH 20, 2025
THIS DOCUMENT TO BE PROVIDED
AT THE MARCH 20, 2025 BOARD MEETING
AND TO BE UPLOADED TO THE PIONEER WEBSITE
FOLLOWING THE MEETING
ITEM 5
REPORT ATTACHMENT 3
Redline showing changes made to the Local Feed-In Tariff Power Purchase Agreement
Plf)NEEA
COMMUNITY ENERGY
384032.1 Page 1 of 3
Staff Report – Item 6
To: The Governing Board
From: Donald Eckert Jr., Chief Executive Officer
Item 6: State of Pioneer
Date: 3/20/2025
RECOMMENDATION
Receive an update on the State of Pioneer Community Energy (“Pioneer”).
BACKGROUND
Annually, during the first quarter of the calendar year, staff presents to the Board the State of Pioneer with focus on initiatives and challenges for each area of Pioneer including:
• Administration
• Finance, Human Resources, and Information Technology
• Programs
• Communications
• Legislative and Regulatory Affairs
• Power Supply
ANALYSIS & DISCUSSION
Executive Summary
Pioneer launched into 2025 in financially stable condition. At the end of 2024, all areas of Pioneer improved from the previous year and we are well positioned to end 2025 stronger than the end of 2024. Pioneer will make significant progress towards the goals identified in the Fiscal Year 2025-2027 Strategic Plan while reinforcing our commitment to the Mission Statement of providing competitive and stable rates.
Administration
End of 2024 – Adoption of the Fiscal Year 2025-2027 Strategic Plan to provide direction on goals for the next three years. Received approval from the Board to begin the process of expansion. Achieved clarity and efficiency in our Joint Powers Agreement (“JPA”) and established a Governance Committee for discussion of future JPA issues.
Goals for 2025
• Launch the Governance Committee to discuss important issues such as the timing of Board membership for our potential new members.
• Board engagement by sponsoring events such as the Biomass Tour, the California Independent System Operator tour, and a tour of the Geysers Power Plant that features geothermal technology. • Conduct a Board workshop for new Board Directors.
• Consideration of additional expansion opportunities.
• Continue to support the culture of “Get Stuff Done” while recognizing the men and women of Pioneer for their achievements.
Finance,, Human Resources, and Information Technology
End of 2024 – Exceeded our minimum cash reserve targets. Achieved a low percentage of open positions.
Improved our health and welfare benefits to remain competitive. Concluded a strong Information Technology audit that protects our customers data.
Plf)NEER
COMMUNITY ENERGY
Agenda Item: X Agenda Date: 12/19/2024
384032.1 Page 2 of 3
Goals for 2025
• Receive a strong financial report from the independent auditor on our financial statements. • Commission a triennial compensation study to assess our salary and wage competitiveness that supports attract and retain goals.
• Receive a strong information technology report to submit to the California Public Utilities Commission (“CPUC”) regarding our required triennial Automated Meter Infrastructure audit that assesses the safety of our customers data.
• Financially engineer to mitigate a budget deficit for the Fiscal Year 2025-26 budget. • Continue to position Pioneer for an upgrade to our credit rating. • Recruit for a Senior Financial Analyst to add bench strength and increased focus on areas such as variance analysis and middle office.
Programs
End of 2024 – Inaugural launch of Programs for Pioneer that were well received by our customers and improved our brand.
Goals for 2025
• Re-launch Heating Ventilation Air Conditioning Program and Power Shift Rewards Program with projected doubling of participation compared to 2024.
• Phase 2 launch of GridGen Program to include Commercial, Industrial, current residential Net Energy Metering customers, and include those enrolled in the California Alternate Rates for Energy program.
• Launch the Low Carbon Fuel Standards program to produce revenue streams for our members. • Launch of the Tool-Kit Program to assist all our customers with energy saving tools and build community partnership.
• Launch of ICE Energy to assist Commercial and Industrial customers with demand side management to reduce their overall bill.
• Launch of Hourly Flex Pricing specific to Agricultural customers in timing their energy usage to lower their energy bill.
• Winding down of the LED Program.
Communications
End of 2024 – Much progress was achieved in community relations and communications resulting in better relations with our customers and communities and a stabilization of the participation rate. Successfully launched Grass Valley and Nevada City with above 95% participation rates.
Goals for 2025
• Commission a Marketing/Communications Consultant to improve our messaging on Pioneer with specific emphasis in Programs offerings.
• Submit the Implementation Plan to the CPUC as the final administrative step for expansion. • Build relationships with our new member communities while enhancing relationships with our current members.
• Empower our customers through knowledge such as the Solar Billing Plan (e.g. “NEM 3.0”) webinars and other topics such as understanding your bill and how to reduce your bill. • Strategic investments in sponsorships.
• Active in presence in the community through fairs, field days, and other events. • Continue to improve the website to support the customer experience.
Legislative & Regulatory Affairs
End of 2024 - Commissioned a strong Lobbyist and additional staff to make an impact. With the assistance of our trade association, was able to implement AB843 through the CPUC and pursue community sized biomass projects.
Agenda Item: 6 3/20/2025
Agenda Item: X Agenda Date: 12/19/2024
384032.1 Page 3 of 3
Goals for 2025
• Host a Lobby Day in Sacramento to engage legislators on issues specific to Pioneer. • Host a Biomass Tour to educate legislators for support on biomass energy. • Float a bill to support biomass energy.
• Present the 2025 Legislative Platform to the Board to formalize positions on the various bills. • Engage with other Community Choice Aggregators and CalCCA on the imminent battle with the CPUC on potential methodology changes to the Power Charge Indifference Adjustment calculations that will harm our customers.
• Recruit for a Manager of Legislative and Regulatory Affairs Manager.
Power Supply
End of 2024 – Power supply is 92% of the budget and Pioneer’s ability to achieve rate competitiveness is directly correlated to our success in power procurement.
Goals for 2025
• Continue to procure best-fit, least-cost power.
• Continue our excellent track record of compliance even though the rules keep changing, especially in the requirements for resource adequacy.
• Achieve progress towards energy, resource adequacy, and renewable energy requirements for the potential new members due to expansion conditioned on approval from the CPUC. • Recruit for a Project Development Manager to assist in biomass development. • Amend the Feed-In Tariff program to widen scope of eligible technologies. • Recruit for Power Contracts Manager to assist in monitoring the increased number of long-term power purchase agreements.
• Continue to enhance the cQuant program capabilities to improve forecasting and evaluation of responses to our Request for Offers
STRATEGIC PLAN
The report supports all goals of the strategic plan.
FISCAL IMPACT
There is no fiscal impact from the recommendation.
ATTACHMENTS
There are no attachments to this report.
Agenda Item: 6 3/20/2025