STAFF REPORT
Agenda Item # 7.1
GENDA DATE: August 25, 2022
TO: Board of Directors
PREPARED BY: Matthew Marshall, Executive Director
SUBJECT: RePower Humboldt Energy Strategic Plan Update
BACKGROUND
Following approximately nine months of analysis and gathering public input, in December of 2019 the RCEA Board adopted an update to the RePower Humboldt Strategic Plan, RCEA’s comprehensive action plan for energy. The plan establishes goals and strategies to guide RCEA’s work over the 2020- 2030 period, and is available online at:
https://redwoodenergy.org/wp-content/uploads/2020/06/RePower-2019-Update-FINAL-.pdf
SUMMARY
Staff intends to provide RePower Humboldt Plan updates every six months to keep the Board informed on implementation progress. At the meeting RCEA department directors will provide a presentation on the current status of plan implementation and related activities. This will include updates on the four focus areas of the plan:
1. Regional Planning and Coordination
2. Integrated Demand Side Management
3. Low-Carbon Transportation
4. Energy Generation and Utility Services.
STAFF RECOMMENDATION
N/A – Information only.
ATTACHMENTS
Presentation slides will be shared at this meeting.
230
RePower Humboldt
Strategic Plan Progress Update
August 2022
RCEA’s RePower Humboldt Strategic Plan
Updated December 2019 – 4 focus areas:
Regional
Planning &
Coordination
Integrated
Demand Side
Management
Low-carbon
Transportation
Energy
Generation &
Utility Services
Low-carbon
Transportation
Current activities:
• $700,000 proposed grant award from CA
Energy Commission to install additional
public EV charging stations in rural areas
• Electric vehicle and charging station rebate
program ongoing
• Continued work on Medium- and Heavy-Duty
Zero Emissions Vehicle Infrastructure
planning grant
Integrated
Demand Side
Management
AKA:
Customer
Energy
Solutions
Current activities:
• Launched heat pump rebate program
and expanded customer rebate catalog
• Submitted funding application for State-wide Rural Regional Energy Network program
• Conducted solar/storage training series for
local firefighters
• piloting solar + battery
mobile unit with So. Hum.
Fire Chiefs Association
Energy
Generation &
Utility Services
Current activities:
• Testing and approvals for airport microgrid
operating in island mode completed
• Exploring other potential microgrid
opportunities, particularly in northeastern Humboldt
Energy
Generation &
Utility Services
Current activities:
• CA Community Power joint procurement to meet CA
Public Utility Commission mandates: • 2.5 MW of Tumbleweed long-duration storage project • 2.0 MW of Goal Line long-duration storage project
• 4.36 MW of new baseload geothermal
• Contracted for 17.25 MW with local Fairhaven battery
storage project
• Secured $1.46 million in bill credits for CCE customers who fell behind on payments as a result of the
pandemic's economic impacts; working to secure
additional funds from CA Arrearage Payment Program
Current activities:
• Humboldt County Regional Climate Action Plan
public review draft published in April
• Continuing to work with Humboldt Area
Foundation and others to develop the Redwood Region Climate and Community Resilience Hub (CORE Hub)
• Entered into MOU with Sonoma Clean Power to
collaborate on regional energy planning and development Regional
Planning &
Coordination
Offshore Wind Update
Offshore Wind:
• Continuing work with development partners and local
stakeholders
• With mini-grant from RCEA, Humboldt Fishermen’s
Marketing Association established joint non-profit: CA Fishermen’s Resilience Association • Represents the port associations for Crescent City, Trinidad Bay, Humboldt Bay, Shelter Cove, Fort Bragg/Noyo, Bodega Bay and San Francisco. • With RCEA funding CFRA developed a template “Fishing
Community Benefit Agreement for Offshore Wind Development” • Contracted with local consulting team “Lost Coast Wind” to support RCEA with Tribal engagement
Regional
Planning &
Coordination
Offshore Wind:
• Bureau of Ocean Energy Management (BOEM) on track
for lease auction in the coming months
• Completed environment assessment
• Received CA Coastal Commission consistency determination • Issued Proposed Sale Notice, completed public comment period
• Auction can be held as soon as 30 days after publication of the Final Sale Notice.
• On 8/10 the State adopted ambitious target for California offshore wind development
Regional
Planning &
Coordination
2022 2025 2030 2035 2040 2045
Humboldt Wind Energy Area (2 leases)
Phase 1: 150 MW
commercial
demonstration
Phase 2: 1,500 MW
full buildout
Del Norte & Mendocino
Wind Energy Areas (TBD)
CA State Goals 5,000 MW 25,000 MW
N. Coast Transmission
Humboldt Bay
Port Infrastructure
CA North Coast Offshore Wind Energy Projected Development Timeline 2022 2025 2030 2035 2040 2045
Humboldt Wind Energy Area (2 leases)
Phase 1: 150 MW
commercial
demonstration
Phase 2: 1,500 MW
full buildout
Del Norte & Mendocino
Wind Energy Areas (TBD)
CA State Goals 5,000 MW 25,000 MW
N. Coast Transmission
Humboldt Bay
Port Infrastructure
CA North Coast Offshore Wind Energy Projected Development Timeline State planning goal adopted by CA Energy
Commission on 8/10/22 –assumes Morro
Bay and ~150 MW off Humboldt
2022 2025 2030 2035 2040 2045
Humboldt Wind Energy Area (2 leases)
Phase 1: 150 MW
commercial
demonstration
Phase 2: 1,500 MW
full buildout
Del Norte & Mendocino
Wind Energy Areas (TBD)
CA State Goals 5,000 MW 25,000 MW
N. Coast Transmission
Humboldt Bay
Port Infrastructure
CA North Coast Offshore Wind Energy Projected Development Timeline Requires addition Wind Energy Areas –
target based on Del Norte and
Mendocino potential
2022 2025 2030 2035 2040 2045
Humboldt Wind Energy Area (2 leases)
Phase 1: 150 MW
commercial
demonstration
Phase 2: 1,500 MW
full buildout
Del Norte & Mendocino
Wind Energy Areas (TBD)
CA State Goals 5,000 MW 25,000 MW
N. Coast Transmission
Humboldt Bay
Port Infrastructure
CA North Coast Offshore Wind Energy Projected Development Timeline Humboldt Wind Energy Area leased
by end of 2022, but anything beyond
150 MW requires new transmission
BOEM’s
proposed
Humboldt
offshore wind
lease areas
2022 2025 2030 2035 2040 2045
Humboldt Wind Energy Area (2 leases)
Phase 1: 150 MW
commercial
demonstration
Phase 2: 1,500 MW
full buildout
Del Norte & Mendocino
Wind Energy Areas (TBD)
CA State Goals 5,000 MW 25,000 MW
N. Coast Transmission
Humboldt Bay
Port Infrastructure
CA North Coast Offshore Wind Energy Projected Development Timeline Approval of construction plan follows
planning/permitting period
2022 2025 2030 2035 2040 2045
Humboldt Wind Energy Area (2 leases)
Phase 1: 150 MW
commercial
demonstration
Phase 2: 1,500 MW
full buildout
Del Norte & Mendocino
Wind Energy Areas (TBD)
CA State Goals 5,000 MW 25,000 MW
N. Coast Transmission
Humboldt Bay
Port Infrastructure
CA North Coast Offshore Wind Energy Projected Development Timeline 2030 target for commercial
demonstration to begin operations
150 MW proposed
Redwood Coast Offshore Wind
Commercial Demonstration Project
2022 2025 2030 2035 2040 2045
Humboldt Wind Energy Area (2 leases)
Phase 1: 150 MW
commercial
demonstration
Phase 2: 1,500 MW
full buildout
Del Norte & Mendocino
Wind Energy Areas (TBD)
CA State Goals 5,000 MW 25,000 MW
N. Coast Transmission
Humboldt Bay
Port Infrastructure
CA North Coast Offshore Wind Energy Projected Development Timeline Planning for phase 2 buildout of
Humboldt WEA will be concurrent,
but final approval and construction
depends on new transmission
2022 2025 2030 2035 2040 2045
Humboldt Wind Energy Area (2 leases)
Phase 1: 150 MW
commercial
demonstration
Phase 2: 1,500 MW
full buildout
Del Norte & Mendocino
Wind Energy Areas (TBD)
CA State Goals 5,000 MW 25,000 MW
N. Coast Transmission
Humboldt Bay
Port Infrastructure
CA North Coast Offshore Wind Energy Projected Development Timeline Del Norte and Mendocino areas would
start with initial study and being
established as “call areas” (~3 years)
before potential lease auction
Assumption behind State 2045 planning goal
2022 2025 2030 2035 2040 2045
Humboldt Wind Energy Area (2 leases)
Phase 1: 150 MW
commercial
demonstration
Phase 2: 1,500 MW
full buildout
Del Norte & Mendocino
Wind Energy Areas (TBD)
CA State Goals 5,000 MW 25,000 MW
N. Coast Transmission
Humboldt Bay
Port Infrastructure
CA North Coast Offshore Wind Energy Projected Development Timeline New transmission lines need to be
built before phase 2 of Humboldt
WEA or any new North Coast Wind
Areas can come online
2022 2025 2030 2035 2040 2045
Humboldt Wind Energy Area (2 leases)
Phase 1: 150 MW
commercial
demonstration
Phase 2: 1,500 MW
full buildout
Del Norte & Mendocino
Wind Energy Areas (TBD)
CA State Goals 5,000 MW 25,000 MW
N. Coast Transmission
Humboldt Bay
Port Infrastructure
CA North Coast Offshore Wind Energy Projected Development Timeline Humboldt Bay Harbor District has
plans for phased development of the
necessary port infrastructure
STAFF REPORT
Agenda Item # 7.2
AGENDA DATE: August 25, 2022
TO: Board of Directors
PREPARED BY: Matthew Marshall, Executive Director
Nancy Diamond, General Counsel
Lori Biondini, Director of Business Planning & Finance
SUBJECT: Offshore Wind Development Cooperative Agreement, Agreement in Principle
BACKGROUND
Prior to the launch of RCEA’s Community Choice Energy (CCE) program, in 2016 the Board adopted Guidelines for the CCE Program’s Launch Period Strategy and Targets after a series of community input-gathering workshops. The resulting guidelines lay out power portfolio goals for near and long term local renewable generation, including the development of offshore wind energy. In pursuit of that objective, RCEA issued a request for qualifications in 2018 to seek project partners that would provide the needed technical and financial resources to develop the local offshore wind resource while maintaining a local stake in planning and potential development off the Humboldt County coastline. This resulted in the Board’s selection of a consortium of companies with which RCEA would pursue joint development of a local offshore wind energy project though a public-private partnership, and in November of 2018 RCEA entered into a Cooperation Agreement with Aker Solutions, EDPR Offshore North America, and Principle Power.
The Cooperation Agreement was structured to be an initial step in laying the foundation for future agreements and outlined a phase 1 (pre-lease) during which RCEA’s project partners established a project company, Redwood Coast Offshore Wind, LLC (“ROW”), to be the entity that will develop, own, and operate the wind farm. The Cooperation Agreement was intended to be replaced by a subsequent public-private partnership agreement between RCEA and ROW that would govern the joint implementation of the offshore wind project through the full development, operation, and decommissioning phases of the project. The Cooperation Agreement was amended two separate times (December 19, 2019, and January 29, 2021) as RCEA’s project partners underwent corporate restructuring, with the resultant parties to the Cooperation Agreement consisting of OW North America LLC (“OW”) and Aker Offshore Winds USA LLC (“Aker”). Recently Aker purchased OW’s interest in this offshore wind project and the Cooperation Agreement needs to be amended a third time to reflect OW’s departure from the Cooperation Agreement.
Separately, RCEA and Aker have continued discussions about the PPP Agreement intended to replace the Cooperation Agreement. The Cooperation Agreement was entered into before the Bureau of Ocean and Energy Management (“BOEM”) had completed its analysis of wind energy development potential in the Humboldt County Wind Energy Area. The offshore wind energy project contemplated in the Cooperation Agreement consisted of a 100-150 MW demonstration 231
scale project, and consistent with this project size, the parties secured an interconnection agreement with the California Independent System Operator (CAISO) to obtain a grid interconnection queue position for an approximately 150 MW project. However, on May 31, 2022, BOEM issued a Proposed Sale Note (“PSN”) for Commercial Leasing for Wind Power on the Outer Continental Shelf in California which proposes greater development than the project envisioned by RCEA and its project partners. This PSN proposes an auction for 2 lease areas off the Humboldt County coast and 3 lease areas off the central California coast at Morro Bay, with each lease area of roughly equal power generation potential and geographical size, and utilizes the entirety of the Humboldt and Morro Bay Wind Energy Areas.
SUMMARY
Because the PSN proposes different offshore wind development potential than is contemplated in the Cooperation Agreement, RCEA and Aker believe that the Cooperation Agreement’s successor agreement or agreements would be better informed if they are not confined by goals contemplated in the Cooperation Agreement. Instead, staff seeks Board approval that would terminate the Cooperation Agreement and replace it with an Agreement in Principle that sets out the primary issues to be negotiated for inclusion in one or more future agreements. These principles of negotiation for inclusion in a future agreement or agreements include the following key points:
1. Off-take arrangements(s) in which RCEA purchases wind energy from ROW;
2. A PPP Agreement to define the relationship between RCEA and ROW during the post-lease phases of project development and operation.
3. Determination of the Interconnection Agreement ownership if ROW is not the successful bidder and does not acquire a lease; and
4. ROW to enter into commitments to the community to demonstrate proactive community and stakeholder outreach for purposes of engaging, educating and involving the local community and key local stakeholders in project development, including, the hiring and training of local skilled labor.
STAFF RECOMMENDATION
1. Approve Third Amendment to Cooperation Agreement;
2. Approve Termination of Cooperation Agreement;
3. Approve Agreement in Principle;
4. Authorize the Executive Director to execute all such documents.
ATTACHMENTS:
1. Amendment No. 3 to Cooperation Agreement
2. Termination Agreement
3. Agreement in Principle
232
OW NA DRAFT 08/05/2022
THIRD AMENDMENT
TO THE
COOPERATION AGREEMENT
This Third Amendment to the Cooperation Agreement (this “Third Amendment”), dated as of August ___, 2022, to be effective as of July 27, 2022 (the “Effective Date”), is to that certain Cooperation Agreement, dated as of November 1, 2018, by and among Aker Solutions Inc. (“ASI”), EDPR Offshore North America LLC (“EDPR”), Principle Power, Inc. (“PPI”), and Redwood Coast Energy Authority (“RCEA”), as amended by the First Amendment to the Cooperation Agreement, dated December 19, 2019 (the “First Amendment”), and the Second Amendment to the Cooperation Agreement, dated January 29, 2021 (the “Second Amendment, and collectively the “Cooperation Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Cooperation Agreement.
WHEREAS, pursuant to the First Amendment, PPI withdrew as a member of the Consortium, and the definition of “Party” and “Parties” were thereby amended to respectively mean each of ASI, EDPR and RCEA individually and collectively.
WHEREAS, pursuant to the Second Amendment, references to EDPR were changed to reflect the name change to OW North America LLC (“OW NA”), and ASI assigned its rights and obligations under the Cooperation Agreement to Aker Offshore Winds USA LLC (“AOW”), and the definition of “Party” and “Parties” in the Cooperation Agreement were amended to respectively mean each of AOW, OW NA, and RCEA individually and collectively.
WHEREAS, pursuant to the Membership Interest Purchase Agreement (“MIPA”), dated July 27, 2022, by and among OW NA, AOW, and Aker Wind West Coast USA Corp., a Delaware corporation (“AWWC” and together with AOW, “Aker”), OW NA sold to Aker, and Aker purchased from OW NA, fifty percent (50%) of the issued and outstanding membership interests in the Project Company (the “Transaction”).
WHEREAS, upon closing of the Transaction, Aker became the owner of one hundred percent (100%) of the issued and outstanding membership interests in the Project Company.
WHEREAS, as a result of the Transaction, the Parties desire to further amend the Cooperation Agreement to reflect OW NA’s withdrawal from the Project Company and any further development of the Project, and the waiver by OW NA of all its rights and a waiver and release of OW NA from its obligations under the Cooperation Agreement, including but not limited to compliance with exclusivity provision in Section 6 of the Cooperation Agreement.
NOW, THEREFORE, in consideration of the promises and agreements contained herein and other good and valuable consideration, the sufficiency and receipt of which are herby acknowledged, and intending to be legally bound, the Parties agree as follows:
1. Definitions.
233
2 (a) The definition of “Party” and “Parties” in the Preamble is hereby deleted in its entirety. The following definition of “Party” and “Parties” shall be added to Section 1 – Definitions:
“Party” shall mean each of RCEA and Aker Offshore Wind USA LLC (“AOW”), and collectively, the “Parties.”
2. Consortium. All references to the term “Consortium” throughout the Cooperation Agreement that relate to rights and obligations of the Consortium that did not accrue or arise as of the Effective Date shall be replaced with “AOW.”
3. Exclusivity. Section 6.1 and 6.2 of the Cooperation Agreement shall be deleted in their entirety and replaced with the following so as to remove references to OW NA:
“6.1 During the Term of this Agreement and for one year thereafter, AOW and RCEA agree that neither they nor any of their respective Affiliates shall directly or indirectly undertake any activities with any third party for the development (or preparation therefor) of an offshore wind project (other than the Project) along the coast off Humboldt County.
6.2 AOW and RCEA agree that they shall be able to undertake activities with third parties to work towards the achievement of the goals of the Project and to spur broader market and/or project development on the West Coast of the United States, so long as such activities are not detrimental to the Project.”
4. Termination, Release and Waiver.
(a) Solely as it relates to OW NA (f/k/a EDPR), the Cooperation Agreement shall be deemed terminated and without any further force or effect, and all rights and obligations of OW NA (f/k/a EDPR) under the Cooperation Agreement shall be null and void and of no further force and effect. Each of RCEA and AOW expressly waive and release OW NA’s compliance with Section 6 – Exclusivity, including any obligation to not compete with the Project in Humboldt County for a period of one-year after termination. (b) Each of AOW and RCEA on the one hand, and OW NA, on the other hand, releases and forever discharges the other party or parties and their respective Affiliates, and its and their directors, officers, employees and agents of and from all debts, demands, actions, causes of action, suits, accounts, covenants, contracts, agreements, damages, and any and all claims, demands and liabilities whatsoever of every name and nature, both in law and in equity, against each such other party or any of its assigns, which each releasing party has or ever had, which arise out of or relate to events, circumstances or actions taken by each such other party pursuant to the Cooperation Agreement prior to the Effective Date.
234
3 5. Entire Agreement. Except as expressly amended hereby, all of the provisions of the Cooperation Agreement shall continue to be and shall remain in full force and effect in accordance with their terms.
6. Interpretation. This Third Amendment shall be construed as supplementing and forming part of the Cooperation Agreement and shall be read accordingly.
7. Governing Law. This Third Amendment shall be construed in accordance with and governed by the laws of the State of California without regard to the conflicts of laws provisions thereof.
8. Severability. The parties acknowledge and agree that this document shall not be construed in favor of or against any one of the parties. If at any time any one or more of the provisions hereof is or becomes illegal, invalid or unenforceable in any respect under the applicable law of any jurisdiction, neither the legality, validity, or enforceability of the remaining provisions hereof, or the legality, validity, or enforceability under the applicable law of any other jurisdiction, shall in any way be affected or impaired thereby.
9. Effectiveness. This Third Amendment shall become effective as of the date written above.
10. Counterparts. This Third Amendment may be executed in counterparts, each of which will be considered an original, but all of which will constitute one and the same agreement. Facsimile and portable document format (pdf) signatures shall be binding as if an original.
[Signature Page Follows]
235
Signature Page to Third Amendment to Cooperation Agreement IN WITNESS WHEREOF, the Parties hereto have caused this Third Amendment to be duly executed on the date first above written.
AKER OFFSHORE WIND USA LLC
By: __________________________________
Name: __________________________________
Title: __________________________________
OW NORTH AMERICA LLC
By: __________________________________
Name: Michael Brown
Title: Chief Executive Officer
REDWOOD COAST ENERGY AUTHORITY
By: __________________________________
Name: __________________________________
Title: __________________________________
236
TERMINATION OF COOPERATION AGREEMENT
THIS TERMINATION OF COOPERATION AGREEMENT (this “Agreement”), is made and entered into as of August ___, 2022 (the “Effective Date”), by and between Redwood Coast Energy Authority, a local government joint powers authority organized and existing under the laws of the State of California (“RCEA”), and Aker Offshore Wind USA LLC (f/k/a Aker Solutions Inc.), a Delaware limited liability company (“Aker” and, together with RCEA, collectively the “Parties” and each individually a “Party”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Cooperation Agreement (as defined below).
RECITALS
WHEREAS, RCEA, Aker, Principal Power, Inc., a Nevada corporation (“PPI”), and OW North America LLC (f/k/a EDPR Offshore North America LLC), a Delaware limited liability company (“OW”), entered into that certain Cooperation Agreement, dated as of November 1, 2018, as amended by those certain (i) First Amendment to the Cooperation Agreement, dated as of December 17, 2019 (“First Amendment”), and (ii) Second Amendment to the Cooperation Agreement, dated as of January 29, 2021 (as amended, modified and revised, the “Cooperation Agreement”), pursuant to which the parties set forth and memorialized certain responsibilities, commitments, terms and conditions governing relating to the development of the Project; WHEREAS, pursuant to the terms of the First Amendment, among other things, PPI was removed as a party to the Cooperation Agreement;
WHEREAS, OW recently expressed its desire to no longer be a member of the Project Company or otherwise share in the equity in the Project Company, and pursue the Project, and OW and Aker entered into that certain Membership Interest Purchase Agreement on July 27, 2022, pursuant to which Aker and its wholly owned affiliate, Aker Wind USA West Coast Corp, acquired all of the ownership interests held by OW in the Project Company and became the sole owners of the Project Company (the “OW Withdrawal”);
WHEREAS, as a result of the OW Withdrawal, OW is no longer a party to the Cooperation Agreement; and
WHEREAS, Aker and RCEA desire to (i) amend the Cooperation Agreement to provide that upon termination, neither Party has any ongoing rights or obligations to the other Party under the Cooperation Agreement including, but not limited to, the removal of the one-year post-termination survival period set forth in Section 6.1 of the Cooperation Agreement, and (ii) terminate the Cooperation Agreement, pursuant to the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, as the sole remaining parties to the Cooperation Agreement, intending to be legally bound, hereby agree as follows:
237
2 1. Amendment to the Cooperation Agreement.
1.1. In the first sentence of Section 6.1 of the Cooperation Agreement, the phrase “and for one year thereafter” is hereby deleted in its entirety. The Parties acknowledge and agree that, as of the Effective Date of this Agreement, neither Party shall be bound by or subject to any post-termination survival period or exclusivity obligations under the Cooperation Agreement following the earlier termination or expiration of the Term.
2. Termination of the Cooperation Agreement.
2.1. The Parties hereby agree to mutually terminate the Cooperation Agreement as of the Effective Date, in accordance with the terms of Section 16 of the Cooperation Agreement, as amended by this Agreement.
2.2. Notwithstanding anything to the contrary in the Cooperation Agreement, the Parties hereby agree and acknowledge that upon termination of the Cooperation Agreement, neither Party shall have any ongoing rights or surviving obligations to the other Party under the Cooperation Agreement, including, without limitation, Section 20 (Indemnification) and Section
23.12 (Survival).
3. Mutual Release.
3.1. In consideration of the covenants, agreements, and undertakings of the Parties under this Agreement, each Party, on behalf of itself and its respective present and former parents, affiliates, officers, directors, managers, shareholders, members, successors, and assigns (collectively, “Releasors”) hereby releases, waives, and forever discharges the other Party and its respective present and former, direct and indirect, parents, affiliates, employees, officers, directors, managers, shareholders, members, agents, representatives, permitted successors, and permitted assigns (collectively, “Releasees”) of and from any and all actions, causes of action, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings, obligations, costs, expenses, liens, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands, of every kind and nature whatsoever, whether now known or unknown, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, in law, admiralty, or equity (collectively, “Claims”), which any of such Releasors ever had, now have, or hereafter can, shall, or may have against any of such Releasees for, upon, or by reason of any matter, cause, or thing whatsoever from the beginning of time through the Effective Date arising out of or relating to the Cooperation Agreement, except for any Claims relating to rights and obligations created by this Agreement.
3.2. Each Party, on behalf of itself and each of its respective Releasors, understands that it may later discover Claims or facts that may be different than, or in addition to, those that it or any other Releasor now knows or believes to exist regarding the subject matter of the release contained in this Section 3, and which, if known at the time of signing this Agreement, may have materially affected this Agreement and such Party’s decision to enter into it and grant the release contained in this Section 3. Nevertheless, the Releasors intend to fully, finally, and 238
3 forever settle and release all Claims that now exist, may exist, or previously existed, as set forth in the release contained in this Section 3, whether known or unknown, foreseen or unforeseen, or suspected or unsuspected, and the release given herein is and will remain in effect as a complete release, notwithstanding the discovery or existence of such additional or different facts.
The Releasors hereby waive any right or Claim that might arise as a result of such different or additional Claims or facts. The Releasors have been made aware of, and understand, the provisions of California Civil Code Section 1542 (“Section 1542”), which provides: “A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR
RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY
HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.” The Releasors expressly, knowingly, and intentionally waive any and all rights, benefits, and protections of Section 1542 and of any other state or federal statute or common law principle limiting the scope of a general release.
4. Miscellaneous.
4.1. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. The Parties agree that the terms of this Agreement shall survive the termination of the Cooperation Agreement.
4.2. This Agreement embodies the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants, or undertakings, other than those expressly set forth or referred to herein. This Agreement supersedes all prior agreements and the understandings between the Parties with respect to such subject matter.
4.3. This Agreement shall be governed by and construed in accordance with the internal laws of the State of California, without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of California.
4.4. Neither this Agreement, nor any rights or obligations hereunder may be assigned, delegated or conveyed by either Party without the prior written consent of the other Party.
4.5. The Parties agree that a facsimile or electronic (e.g., .pdf) signature of this Agreement will be deemed an original for all purposes and each waives the necessity of providing the original copy of such signature to bind the other Party to this Agreement. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any Party whose signature appears thereon and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the Parties reflected hereon as the signatories.
[The remainder of this page has been intentionally left blank; signature page follows] 239
Signature Page to Termination of Cooperation Agreement
IN WITNESS WHEREOF, the Parties hereto have caused this Termination of Cooperation Agreement to be duly executed as of the Effective Date.
REDWOOD COAST ENERGY AUTHORITY
By:
Name:
Title:
AKER OFFSHORE WIND USA LLC
By:
Name:
Title:
240
1 AGREEMENT IN PRINCIPLE
THIS AGREEMENT IN PRINCIPLE (this “Agreement”), dated as of August ___, 2022, is entered into by and between Redwood Coast Energy Authority, a local government joint powers authority organized and existing under the laws of the State of California (“RCEA”), Redwood Coast Offshore Wind LLC, a Delaware limited liability company (“ROW”) and Aker Offshore Wind USA LLC, a Delaware limited liability company (“Aker”) with respect to a potential floating offshore wind energy project to be built developed, constructed, operated and maintained by RCOW and its members (the “Project”).
RECITALS
WHEREAS, the Bureau of Ocean Energy Management (“BOEM”) of the Department of the Interior published the Pacific Wind Lease Sale 1 (PACW-1) for Commercial Leasing for Wind Power on the Outer Continental Shelf in California – Proposed Sale Notice as Docket No. BOEM-2022-0017 in Vol. 87, No. 104 of the Federal Register on May 31, 2022 (the “Proposed Sale Notice”). The Proposed Sale Notice set forth the terms and conditions of an auction (the “Auction”) for the sale by BOEM of commercial wind energy leases (each a “Lease”) on the Outer Continental Shelf in the Humboldt Wind Energy Area and Morro Bay Wind Energy Area off the coast of California (each a “Lease Area”);
WHEREAS, RCEA, Aker Offshore Wind USA LLC (f/k/a Aker Solutions Inc.), a Delaware limited liability company (“Aker”), Principal Power, Inc., a Nevada corporation (“PPI”), and OW North America LLC (f/k/a EDPR Offshore North America LLC), a Delaware limited liability company (“OW”), entered into that certain Cooperation Agreement, dated as of November 1, 2018, as amended by those certain (i) First Amendment to the Cooperation Agreement, dated as of December 17, 2019 (“First Amendment”), and (ii) Second Amendment to the Cooperation Agreement, dated as of January 29, 2021 (“Second Amendment” and as amended, modified and revised, the “Cooperation Agreement”);
WHEREAS, the Cooperation Agreement outlines and memorializes responsibilities, commitments, terms and conditions which govern certain aspects of the pursuit of an unsolicited lease from BOEM in the Humboldt Wind Energy Area and provided guiding principles and commitments for a 100MW to 150MW floating offshore wind energy project that would be jointly developed by the parties to the Cooperation Agreement (the “Legacy Project”); WHEREAS, pursuant to the terms of the First Amendment, among other things, PPI was removed as a party to the Cooperation Agreement;
WHEREAS, on or around November 12, 2020, Aker and OW formed a new special purpose vehicle, ROW, which entity was given primary responsibility for the development of the Legacy Project (together with any replacement or successor entities, the “Project Company”); WHEREAS, on or about July 20, 2018, in anticipation of the Legacy Project, EDPR became the customer of record with respect to the California Independent System Operator, Tepona Offshore Wind Project with queue position 1491 (the “Grid Connection”); 241
2 WHEREAS, on or about November 12, 2020, EDPR and ROW entered into an agreement to assign the Grid Connection to ROW.
WHEREAS, OW expressed its desire to no longer be a member of ROW or otherwise share in the equity in ROW, and Aker desired to continue to be a member of ROW and continue to pursue the Legacy Project, and OW and Aker entered into that certain Membership Interest Purchase Agreement on July 27, 2022, pursuant to which Aker and its wholly owned affiliate, Aker Wind USA West Coast Corp, acquired all of the ownership interests held by OW in the Project Company and became the sole owners of the Project Company; WHEREAS, the terms and conditions of the Proposed Sale Notice make it no longer possible to pursue the Legacy Project in the form contemplated within the Cooperation Agreement; WHEREAS, Aker desires to enter into discussions with qualified companies to replace OW as a strategic partner of ROW, and RCEA acknowledges the importance of adding a strategic partner to ROW; and
WHEREAS, Aker, ROW and RCEA desire to continue their business relationship under revised terms and conditions, and are entering into this Agreement to outline certain commitments being made by each Party for the future cooperation with respect to a floating offshore wind energy project.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, RCEA, ROW and Aker (each a “Party” and collectively, the “Parties”), as the sole remaining parties of the Cooperation Agreement, agree as follows:
1. Amendment and Termination of the Cooperation Agreement. Simultaneously with the execution of this Agreement, the Parties shall enter into a mutually acceptable termination agreement to the Cooperation Agreement pursuant to which the Parties shall agree that upon termination, neither Party has any ongoing rights or obligations to the other Party under the Cooperation Agreement including, but not limited to the provisions of Section 6.
2. Agreement Principles. In consideration for the termination of the Cooperation Agreement, the Parties agree to negotiate in good faith to enter into the following agreements:
a. Offtake: The Project Company will negotiate in good faith with RCEA to enter into offtake arrangements with RCEA for the purchase of power to be produced by the Project.
Any such offtake arrangements will contain commercially reasonable terms at market and bankable competitive parameters and pricing methodologies as mutually agreed to by the Parties, and in any event, subject to senior debt lenders approval. b. Public-Private Partnership. The Parties agree to negotiate in good faith a public-private partnership agreement to define the relationship between the Parties during the post-site control, development, construction and operation phases of the Project (“PPP Agreement”) to expand upon this Agreement with the intention to keep RCEA and other stakeholders informed on the progress of the project and future activities.
242
3 c. Interconnection Agreement. ROW currently holds a ~150MW interconnection agreement (the “Interconnection Agreement”). In the event that Aker or ROW participate in the Auction and do not secure a Site Lease in the Humboldt Wind Energy Area, ROW agrees to grant to RCEA of a right of first refusal or purchase option for RCEA to purchase the Interconnection Agreement based on its fair market value. The Parties agree that the mechanism around RCEA’s rights to acquire the Interconnection Agreement from ROW shall be more specifically defined and agreed in the PPP Agreement.
d. Community Commitments. In furtherance of the Project, ROW (in its capacity as the Project Company) will enter into commitments to the community to demonstrate proactive community and stakeholder outreach for purposes of engaging, educating and involving the local community and key local stakeholders in relevant stages of the Project development process including, but not limited to, hiring and training skilled labor from the immediate and surrounding area of the Project. ROW agrees to comply with all BOEM lease stipulations in relation to PACW-1.
3. Binding Agreement. Notwithstanding anything contained in the Cooperation Agreement or any other agreements between the Parties to the contrary, RCEA acknowledges and agrees that ROW and Aker intend to enter into discussions with third parties in furtherance of the Project (“Third Party Partners”), including for such party to become a member of the Project Company or its successor or replacement special purpose entity. This Section 3 and Section 4 are legally binding upon the Parties hereto.
4. Confidentiality.
a. The Parties shall keep all Confidential Information confidential and shall not disclose any Confidential Information to any other person without the prior written consent of the disclosing Party. If Confidential Information is required to be disclosed by act of law or judicial or other governmental action, the duty to maintain confidentiality of such information shall remain to the extent the disclosure is not subject to the law or specific disclosure demand. b. Requests for Disclosure Pursuant to the California Public Records Act. i. Each Party acknowledges that RCEA is a public agency subject to the requirements of the California Constitution, Article 1, Section 3 and the California Public Records Act (Cal. Gov. Code section 6250 et seq. (“PRA”)).
ii. Each Party acknowledges that it may submit to or otherwise provide RCEA with access to materials that a Party considers Confidential Information, which may or may not be exempt from public disclosure under applicable California law. iii. Where any third party (the “Requestor”) not otherwise authorized to access Confidential Information under this Agreement makes a demand or request to RCEA for access to Confidential Information (the “Request”), RCEA will promptly notify the Parties of the Request before responding to the Requestor and indicate its preliminary analysis of whether the records requested are subject to or exempt from disclosure under the PRA. If the information demanded or requested affects more than one Party, then the affected Parties shall cooperate in their response, including engaging joint counsel if deemed advisable, and share such costs. In the event any Party 243
4 disagrees with RCEA’s preliminary analysis, such Party shall be solely responsible for taking whatever legal steps such Party deems necessary to prevent release of information to the Requestor (including the release of such information by RCEA). Such Party is responsible for all costs associated with pursuit of any legal steps, including the pursuit of any legal remedies, subject to any sharing of costs in the case more than one Party is affected (e.g. retaining joint counsel). iv. Each Party understands and acknowledges that the California Public Records Act compels RCEA to respond to Requests within ten (10) calendar days of receipt of a Request (the “RCEA Deadline”). Where RCEA has met its obligation to timely notify the Parties as set forth in Section 4.b.iii and a Party fails to notify RCEA that it will seek a protective order or other legal remedy to bar the disclosure of information that the Party considers Confidential Information prior to RCEA Deadline, RCEA may, without liability hereunder, disclose the Confidential Information that is necessary to be disclosed in response to the Request. v. Without limiting the more general indemnity terms of this Agreement, each Party will indemnify, defend, and hold harmless RCEA from any claim, costs, or liability arising from such Requests, including RCEA’s refusal to disclose information a Party considers to be Confidential Information in response to any Party demand that such information not be disclosed. c. Exceptions. Notwithstanding the foregoing, “Confidential Information” shall exclude (and a receiving Party shall not be under any obligation to maintain in confidence) any information (or any portion thereof) disclosed by any Party to the extent that such information:
i. Is in the public domain at the time of disclosure by the disclosing Party; or ii. At the time of or following disclosure, becomes generally known or available through no act or omission on the part of any receiving Party; or iii. Is known, or becomes known, to the receiving Party from a third-party source that is not under an obligation to the disclosing Party to maintain confidentiality; or
iv. Is independently developed by a Party without violating any of its obligations under this Agreement or any other agreement between the Parties; or
v. Is permitted to be disclosed by a formal written agreement executed by and between the receiving Part(ies) and the disclosing Party; or vi. Was in the possession of the receiving Party prior to disclosure by the disclosing Party; or
vii. Is required to be disclosed by law or regulation; provided that, to the extent practicable and legally permissible; the disclosing Party is given prompt notice of such required disclosure so that the disclosing may seek an injunction or other protective order.
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5 d. The Parties agree that a breach of this Section 4 may not be remediable by the payment of damages and that any Party shall therefore be entitled to injunctive relief and other equitable remedies to prevent or remedy a breach of this Section 4, without being required to post a bond or other security.
5. Miscellaneous.
a. This Agreement shall be governed by and construed in accordance with the internal laws of the State of California, without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the state of California. b. Neither this Agreement, nor any rights or obligations hereunder may be assigned, delegated or conveyed by either Party without the prior written consent of the other Party; provided that the Parties acknowledge that the intent of this Agreement is to provide clarity to Third Party Partners of the commitments of ROW, and such Agreement shall be enforceable by such Third Party Partner upon admittance to ROW as a member.
c. Each of RCEA, ROW and Aker agrees that a facsimile or electronic (e.g., .pdf) signature of this Agreement will be deemed an original for all purposes and each waives the necessity of providing the original copy of such signature to bind the other Party to this Agreement.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any Party whose signature appears thereon and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the Parties reflected hereon as the signatories.
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Signature Page to Agreement in Principle
IN WITNESS WHEREOF, this Agreement is entered into and executed by the undersigned, effective as of the date first set forth above.
REDWOOD COAST ENERGY AUTHORITY
By:
Name:
Title:
REDWOOD COAST OFFSHORE WIND LLC
By:
Name:
Title:
AKER OFFSHORE WIND USA LLC
By:
Name:
Title:
246
STAFF REPORT
Agenda Item # 9.1
AGENDA DATE: August 25, 2022
TO: Board of Directors
FROM: Matthew Marshall, Executive Director
SUBJECT: Executive Director’s Report
SUMMARY
Executive Director Matthew Marshall will provide a brief update on:
• Energy implications of the Federal Inflation Reduction Act, • RCEA recent activities, and
• Other topics as needed.
RECOMMENDED ACTION
None. (Information only.)
ATTACHMENT
RCEA Monthly Report
247
WE
ARE
HIRING!
Current Employment Opportunities at RCEA
• Infrastructure Programs Manager
• Human Resources & Workforce Development Manager
• Account Services Associate
August 2022 News and Updates
from the Redwood Coast Energy Authority
www.RedwoodEnergy.org
(707) 269-1700 ● [email protected]
Join us online
Public Safety Power Shutoff (PSPS):
The 2022 Public Safety Power Shutoff (PSPS) season is already upon us, with wildfires threatening communities in northeastern Humboldt County. RCEA staff have readied themselves through participation in meetings and trainings on the PSPS topic hosted by PG&E. This year PG&E's wildfire readiness strategy actually includes three separate responses, each with its own web information portal that RCEA staff have access to: PSPS information, Electric Powerline Safety Shutoff (EPSS) information, and microgrid information.
PSPS events, already familiar to California power users, are pre-planned events where PG&E advises affected customers and partners such as RCEA ahead of time of when power is expected to be cut off, anticipated duration of the outage, and which customers will be affected. EPSS in contrast uses technology that cuts off power to a specific circuit in a fraction of a second in response to events such as tree branches touching a power line. Due to the nature of EPSS events, advance warning to customers and partners is not feasible. PG&E's new microgrid portal was created in response to a CPUC order requiring utilities to help implement the State Emergency Plan. It will provide information on microgrids being deployed by PG&E in high fire threat districts as another strategy to respond to mitigate wildfire risks.
PG&E's ability to "island" most of its Humboldt County circuits using the Humboldt Bay Generating Station as its main power source for the area has allowed for a great reduction in the expected number of PSPS events, as many of these events in the past were actually due to fire threats outside of Humboldt County but nonetheless impacted the power transmission lines connecting us to the rest of the state. In addition, PG&E has been working on "hardening" its transmission lines through vegetation management and other changes, which is also expected to help minimize PSPS events.
In order to help our customers access important safety announcements, RCEA has updated our website and the home page now has an Electricity Grid Alerts window that links to PG&E’s PSPS information as well as the Humboldt County Office of Emergency Services and the California Independent System Operator’s Flex Alerts page.
Sandrini Solar Project:
EDPR began preliminary construction activities on Sandrini Sol 1 by issuing limited notices to proceed to their engineering, procurement, and construction contractors in July.
EV
Charging
Equipment
RCEA REBATE
Electric
Vehicles
RCEA REBATE
Heat
Pumps
RCEA REBATE
12 approved
30 approved
52 approved
9 reserved
Equipment
& Appliance
RCEA REBATE
5 approved
5 in progress
Residential Services
ASSESSMENTS
65 consultations
41 res kits
Non-Res Services
ASSESSMENTS
97 Completed
Rebate totals to date 2022 totals
See
our website
for details
248
Customer Energy Solutions updates August 2022 News
Agency Projects - ongoing
Arcata School District - CalSHAPE HVAC project and CO2 monitors project progressing Area One Agency on Aging - lighting project completed
Burnt Ranch Elementary School - installing roof-mounted solar array project City of Arcata - outlining an energy efficiency project at Arcata Community Center City of Blue Lake - assisting with how to best utilize OES funding and a possible solar project City of Eureka - installed lighting upgrades at the Water Treatment Plant City of Ferndale - solar and lighting project completed City of Rio Dell - solar and storage installed, generator installation in progress City of Trinidad - solar and storage installed, battery installation in progress Coastal Grove Charter School - CalSHAPE HVAC and CO2 monitors projects in progress Eureka City Schools - solar, storage, and EV bus charger installation project progressing Loleta Union Elementary School - assisting with CalSHAPE program application McKinleyville Union School District - kick-off meeting scheduled for school district benchmarking Redway Community Services District - revisiting possible solar project Redwood Coast Montessori School - CalSHAPE plumbing application submitted Yurok Tribe - benchmarking and making connections for multiple project locations Rural REN - We are going through the CPUC regulatory process and are aiming for 2024 launch TECH Quick Start Grant - We working with customers and contractors to install heat pumps and heat pump water heaters for non-regulated fuel users
Mobile Home Solar - We are moving towards a memo of understanding (MOU) with Bear River Rancheria to grant funds for them to implement two to three projects Sessions Accumulated
Sessions Custom Sessions
Accumulated
Jul '20 Oct '20 Jan '21 Apr '21 Jul '21 Oct '21 Jan '22 Apr '22 Jul '22 0 200
400
600
800
1,000
0 2,500
5,000
7,500
10,000
12,500
15,000
Unique Drivers
No. of Ports
Unique Drivers Custom Unique Drivers
No. of Ports
Jul '20 Oct '20 Jan '21 Apr '21 Jul '21 Oct '21 Jan '22 Apr '22 Jul '22 0 100
200
300
400
0 100
200
300
400
Unique Drivers
Number of Ports
Sessions
Accumulated
Transportation - We have observed steady growth in the use of our EV charging network over the last five years, despite fluxuations during the pandemic. Gas prices this summer helped to drive up EV charging demand, and despite a tight EV supply market and chip shortages, we expect them to be even more popular in the near future as EVs gain in popularity and availability. Unique Drivers
July 2020 - July 2022
Sessions
# of ports Accumulated
300
200
100
0 15,000
12,500
10,000
7,500
5,000
2,500
0 800
600
400
200
0 300
200
100
0 249