Approval Draft
RENEWABLE POWER PURCHASE AGREEMENT
COVERSHEET
Seller: Paradigm Energy LLC, a Delaware limited liability company.
Buyer: Redwood Coast Energy Authority, a California joint powers authority.
Description of Facility: A 4 MW wind electric generating facility.
Delivery Term: 15 Contract Years
Milestones:
Milestone
Evidence of Site Control
Conditional Use Permit obtained
Phase I Interconnection Study results ( or equivalent)
obtained
Phase II Interconnection Study results ( or equivalent) obtained
Interconnection Agreement executed '· ~
Major equipment procured
Federal and state discretionary permits issued
Expected Construction Start Date .·•
Initial Synchronization
Network Upgrades completed
Full Capacity Deliverability Status obtained
Expected Commercial Operation Date
Guaranteed Construction Start Date: TBD
Guaranteed Commercial Operation Date: TBD
Commercial Operation Date Deadline: TBD
Guaranteed Capacity: 4 MW
Contract Price: ~ per MWh
Product: (select options below as applicable)
0 Facility Energy
0 Green Attributes (Portfolio Content Catego1y 1)
Version: December 2025
//
""
Completion Date
As of Effective Date
Completed
Completed
Completed
Completed
TBD
Completed
TBD
TBD
Completed
TBD
TBD
0 Capacity Atti·ibutes
0 Full Capacity Deliverability Status (may be achieved after the Commercial Operation Date)
Expected Energy:
Contract Year Expected Energy (MWh)
1 13,300
2 13,234
3 13,168
4 13,102
5 13,037 \ ·.
6 12,907 . \
7 12,778 \
8 12,650 /
9 12,524 ~
10 12,399 ....
11 12,213 /
12 ....... 12,030
13 ~ 11,849
14 \ ~-. 11,672
15 \ 11,497
\
Scheduling Coordinator: Buyer or Buyer's Agent
Development Security:
Performance Security: ~
Compliance Expenditure Cap: $100,000 over the Delive1y Tenn
TABLE OF CONTENTS
[TOG to be inserted prior to execution.]
Exhibits:
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F-1
Exhibit F-2
ExhibitG
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Exhibit L
ExhibitM
ExhibitN
ExhibitO
Facility Description
Facility Constmction and Commercial Operation
Compensation
Scheduling Coordinator Responsibilities
Progress Reporting Fo1m
Fonn of Average Expected Energy Repo1t
Fonn of Monthly Available Capacity Repo1t
Guaranteed Energy Production Damages Calculation
Fonn of Commercial Operation Date Certificate
Fonn of Installed Capacity Ce1tificate
Fonn of Construction Stait Date Ce1tificate
Fonn of Letter of Credit
Facility Safety Plan and Documentation
Fonn of Replacement RA Notice
Notices
Metering Diagram
RENEWABLE POWER PURCHASE AGREEMENT
PREAMBLE
This Renewable Power Pm-chase Agreement ("Agreement") is entered into as of [ ] (the "Effective Date"), between Buyer and Seller. Buyer and Seller are sometimes refen ed to herein individually as a "Party" and jointly as the "Parties." All capitalized tenns used in this Agreement are used with the meanings ascribed to them in Alticle 1 to this Agreement.
RECITALS
WHEREAS, Seller intends to develop, design, constmct, own, and operate a wind-powered electi·ic generating facility (the "Facility." as more fully defined below); and WHEREAS, Seller desires to sell, and Buyer desires to pm-chase, on the te1ms and conditions set fo1t h in this Agreement, the Product;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Patties agree to the following:
ARTICLE 1: DEFINITIONS
1.1 Contract Definitions. The following tenns, when used herein with initial capitalization, shall have the meanings set foith below:
"AC" means alternating cmTent.
"Accepted Compliance Costs" has the meaning set fo1th in Section 3 .11. "Additional Products" has the meaning set fo1th in Section 3.12. "Adjusted Energy Production" means the sum of Facility Energy, Deemed Delivered Energy, Lost Output, and Replacement Energy.
"Affiliate" means, with respect to any Person, each Person that directly or indirectly conu-ols, is conti·olled by, or is under collllllon conh'ol with such designated Person. For pmposes of this definition and the definition of "Pe1mitted Transferee", "conu-ol" (including, with con elative meanings, the tenns "conti·olled by" and "under collllllon conti·ol 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 fo1t h in the Preamble and includes any Exhibits, schedules and any written supplements hereto, the Cover Sheet, and any designated collateral, credit suppo1t or similat· atTangement between the Patties. 1 "Alternative Dispatches" has the meaning set fo1i h in Section 4.6. "Ancillary Services" means all ancillaiy services, products and other attributes, if any, associated with the Facility.
"Approved Forecast Vendor" means (x) any of AWS Tmepower (a division of UL), Reuniwatt, SteadySun, or (y) any other vendor reasonably acceptable to both Buyer and Seller for the pmposes of providing or verifying the forecasts under Section 4.4(d). "Approved Maintenance Hours" means up to fifty (50) hours per Contract Yeai· for Facility maintenance scheduled in accordance with Section 4.8. "Anticipated Flexible Capacity" means the amount and catego1y of Flexible Capacity identified on the Cover Sheet which Seller anticipates as of the Effective Date that the Facility will be qualified by the CAISO to provide to Buyer.
"Automated Dispatch System" or "Al!§." has the meaning set forth in the CAISO Tariff. "Automated Dispatches" has the meaning set forth in Section 4.6. "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 othe1w ise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankmptcy, insolvency, reorganization or similai· Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general a1rnngement for the benefit of creditors, ( d) othe1wise becomes bankmpt or insolvent (however evidenced), ( e) has a liquidator, administrator, receiver, tmstee, conservator or similai· official appointed with respect to it or any substantial po1iion of its prope1iy 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 Paiiy sending a Notice, or payment, or perfonning a specified action. "Buyer" has the meaning set fo1i h on the Cover Sheet.
"Buyer Bid Curtailment" means the occurrence of all of the following:
(a) the CAISO provides notice, including through ADS, to a Paiiy or the Scheduling Coordinator for the Facility, requiring the Paiiy to deliver less Facility Energy or Grid Energy than the full amount of energy forecasted in accordance with Section 4.4 to be produced from the Facility or delivered to the Facility for a period of time; and 2 (b) for the same time period as referenced in (a), the notice referenced in (a) results from the manner in which Buyer or the SC schedules or bids the Facility, Facility Energy, Grid Energy, or Ancillaiy Services, including where the Buyer or the SC for the Facility:
(i) did not submit a Self-Schedule for the MW subject to the reduction; or (ii) submitted an Energy Supply Bid and the CAISO notice referenced in (a) is solely a result of CAISO implementing the Energy Supply Bid; or (iii) submitted a Self-Schedule for less than the full amount of Facility Energy and Grid Energy forecasted to be generated by or delivered from the Facility. "Buyer Curtailment Order" means the instrnction from Buyer to Seller to reduce delive1y of Energy from the Facility by the amount, and for the period of time set fo1th in such instrnction. "Buyer Curtailment Period" means the period of time, as measured using cmTent Settlement Intervals, during which Seller reduces delive1y of Energy from the Facility pursuant to or as a result of ( a) Buyer Bid Curtailment, (b) a Buyer Cmtailment Order or a ( c) Buyer Default; provided that the duration of any Buyer Cmtailment Period shall be inclusive of the time required for the Facility to ramp down and ramp up.
"Buyer Default" means an Event of Default by Buyer.
"Buyer's Indemnified Parties" has the meaning set fo1th in Section 16.l (a). "Buyer's WREGIS Account" has the meaning set fo1th in Section 4.12(a). "Buyer's Written Request" has the meaning set fo1th in Section 3.12. "CAISO" means the California Independent System Operator Co1poration or any successor entity perfonning similar functions.
"CAISO Approved Meter" means a CAISO approved revenue quality meter or meters, CAISO approved data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and repo1ting, in real time, all Facility Energy delivered to the Delive1y Point and Grid Energy delivered from the Delive1y Point. "CAISO Balancing Authority" has the meaning set fo1th in the CAISO Tai·iff. "CAISO Certification" means the ce1tification and testing requirements set fo1th in the CAISO Tai·iff that ai·e applicable to the Facility, including ce1tification and testing for PMAX and PMIN associated with such generating units, that ai·e applicable to the Facility. "CAISO Charges Invoice" has the meaning set fo1t h in Exhibit D. "CAISO Grid" has the same meaning as "CAISO Controlled Grid" as defined in the CAISO Tariff.
3 "CAISO Operating Order" means the "operating instrnctions" defined in Section
37.2.1.1 of the CAISO Tariff, as such provision may be modified or amended from time to time. "CAISO RA Enhancement" means a change to the CAISO Tariff that (a) changes the basis for submission and assessment of supply plans from a value reflecting installed capacity (cmTently, Net Qualifying Capacity) to a value that takes into account historical perfonnance of a facility (such as "Unforced Capacity" or "UCAP," as referenced in CAISO's Resomce Adequacy Enhancements Draft Final Proposal - Phase 1 and Sixth Revised Straw Proposal dated December 17, 2020), and (b) eliminates or othe1w ise substantially modifies the application of Resomce Adequacy Availability fucentive Mechanism (RAAIM) charges to forced outage periods. "CAISO Ta riff' means the California fudependent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and operating procedmes, including the rnles, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC.
"CAISO VER Forecast" means the forecast of output provided by CAISO pmsuant to Section 4.8.2.1.2 and Appendix Q of the CAISO Tariff, as such provisions may be modified or amended from time to time.
"California Renewables Portfolio Standard" or "BJ!§." 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 399.33 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. "Capacity Attribute" means any cmTent or futme defined characteristic, certificate, tag, credit, or accounting constrnct associated with the amount of power that the Facility can generate and deliver to the Delive1y Point at a paiticular moment and that can be pm-chased, sold or conveyed under CAISO or CPUC market rnles, including Resomce Adequacy Benefits. "Capacity Replacement Price" means the price actually paid for any Buyer Pm·chased Replacement RA pmsuant to Section 3.5 hereof, plus costs reasonably incmTed by Buyer in pm-chasing such Buyer Pm·chased Replacement RA.
"Capacity Damages" has the meaning set fo1th in Section 5 of Exhibit B. "CEC" means the California Energy Commission or its successor agency. "CEC Certification and Verification" means that the CEC has ce1tified ( or, with respect to periods before one hundred eighty (180) days following the Commercial Operation Date, that the CEC has pre-certified) that the Generating Facility is an Eligible Renewable Energy Resource for pm-poses of the California Renewables Po1tfolio Standard and that all Facility Energy delivered to the Delive1y Point qualifies as generation from an Eligible Renewable Energy Resource. "CEC Precertification" means that the CEC has issued a prece1tification for the Generating Facility indicating that the planned operations of the Generating Facility would comply with applicable CEC requirements for CEC Certification and Verification. 4 "CEQA" means the California Environmental Quality Act, as amended or supplemented from time to time.
"Change of Control" means, except in connection with public market transactions of equity interests or capital stock of Seller's Ultimate Parent, any circumstance in which Ultimate Parent ceases to own, directly or indirectly through one or more inte1mediate entities, more than fifty percent (50%) of the outstanding equity interests in Seller; provided that in calculating ownership percentages for all pmposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more inte1mediate entities shall not be counted towards Ultimate Parent's ownership interest in Seller unless Ultimate Parent directly or indirectly owns more than fifty percent (50%) of the outstanding equity interests in each such intennediate entity; and (b) ownership interests in Seller owned directly or indirectly by any Lender (including any tax equity provider) shall be excluded from the total outstanding equity interests in Seller. "COD Certificate" has the meaning set forth in Exhibit B. "Collateral Assignment Agreement" has the meaning set fo1i h in Section 14.2. "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 of the same to Buyer substantially in the fonn of Exhibit H.
"Commercial Operation Date" or "£.Q!!." means the date on which the Facility has achieved Commercial Operation as is identified in the COD Ce1iificate as the Commercial Operation Date.
"Commercial Operation Date Deadline" has the meaning set forth on the Cover Sheet. "Commercial Operation Delay Damages" means an amount equal to (a) the amount of Development Security that is remaining as of the Expected Commercial Operation Date, as such date has been extended pursuant to Section 3 of Exhibit B, divided by (b) the total number of days between the Expected Commercial Operation Date, as such date has been extended pursuant to Section 3 of Exhibit B, and the Commercial Operation Date Deadline. "Communications Protocols" means certain Operating Restrictions developed by the Paiiies pursuant to Exhibit O that involve procedures and protocols regarding communication with respect to the operation of the Facility pursuant to this Agreement. "Compliance Actions" has the meaning set fo1ih in Section 3 .11. "Compliance Expenditure Cap" has the meaning set forth in Section 3 .11. "Confidential Information" means, subject to Section 18.1, any non-public data, trade secrets, proprieta1y info1mation, commercial info1mation, financial infonnation, or business info1mation of a privileged or confidential nature regai·ding the Pa1iy disclosing such Confidential 5 fufo1mation or the Facility; provided that such infonnation is clearly labeled, marked or othe1wise identified as "confidential" or ''proprietaiy info1mation". "Construction Start" has the meaning set forth in Exhibit B. "Construction Start Date" has the meaning set fo1th in Exhibit B. "Construction Start Delay Damages" means an amount equal to (a) the Development Security amount required hereunder, divided by (b) [number of days based on Seller's reasonable expectation for the duration of the project constmction period] (#). Seller shall not be obligated to pay aggregate Constmction Sta1t Delay Damages in excess of twenty percent (20%) of the Development Security amount.
"Contract Price" has the meaning set fo1th on the Cover Sheet. "Contract Term" has the meaning set fo1th in Section ARTICLE 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 anniversa1y of the Commercial Operation Date. "Costs" means, with respect to the Non-Defaulting Pa1ty, brokerage fees, collllllissions and other similar third-party transaction costs and expenses reasonably incuned by such Party either in te1minating any an angement pursuant to which it has hedged its obligations or entering into new aiTangements which replace the Agreement; and all reasonable attorneys' fees and expenses incuned by the Non-Defaulting Pa1ty in connection with te1minating the Agreement. "Cover Sheet" means the cover sheet to this Agreement, which is inco1porated into this Agreement.
"COVID-19" means the epidemic disease designated COVID-19 and the related vims designated SARS-Co V-2 and any mutations thereof, and the effoits of a Governmental Authority to combat or mitigate such disease.
"CPUC" means the California Public Utilities Commission, or successor entity. "Credit Rating" means, with respect to any entity, the rating then assigned to such entity's unsecured, senior long-te1m debt obligations (not supported by third paity credit enhancements) or if such entity does not have a rating for its senior unsecured long-tenn 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, ale1ts, or provides notice, including through ADS, to a Paity, including 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 6 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 Transmission Provider for reasons including, but not limited to, (i) any situation that affects n01mal function of the electi·ic system including, but not limited to, any abnonnal condition that requires action to prevent circumstances such as equipment damage, loss of load, or abnonnal voltage conditions, or (ii) any warning, forecast or anticipation of conditions or situations that jeopardize the Transmission Provider's electi·ic system integrity or the integrity of other systems to which the Transmission Provider is connected; ( c) a cmtailment ordered by CAISO or the Transmission Provider due to a Transmission System Outage; or
(d) a cmtailment in accordance with Seller's obligations under its Interconnection Agreement with the Transmission Provider or distribution operator. "Curtailment Period" means the period of time, as measured using cmTent Settlement Intervals, during which generation from the Facility is reduced pursuant to a Cmtaihnent Order; provided that the Cmtaihnent Period shall be inclusive of the time required for the Facility to ramp down and ramp up.
"Daily Delay Damages" means Construction Strut Delay Damages and Commercial Operation Delay Dainages.
"Daily Expected Energy Amount" is equal to the MWh of Expected Energy for the first Conti·act Year divided by three hundred and sixty five (365). "Damage Payment" means the ainount to be paid by the Defaulting Paity to the Non-Defaulting Paity aBer a T e1minated Transaction occmTing prior to the Commercial Operation Date, in a dollai· amount that is equal to the Development Security. "Day-Ahead Forecast" has the meaning set fo1th in Section 4.4(c). "Day-Ahead Market" has the meaning set fo1th in the CAISO Tai·iff. "Day-Ahead Schedule" has the meaning set fo1th in the CAISO Tai·iff. "Deemed Delivered Energy" means the amount of Energy expressed in MWh that the Facility would have produced and delivered to the Delive1y Point, but that is not produced by the Facility during a Buyer Cmtailment Period, which ainount shall be equal to the Real-Time Forecast (of the hourly expected Energy) provided pursuant to Section 4.4(d) for the period oftime during the Buyer Cmtailment Period ( or other relevant period). If the Facility is subject to a Planned Outage, Forced Facility Outage, Force Majeure Event and/or a Cmtailment Period during a time period where the CAISO provides notice, including through ADS, to a Paity or the Scheduling Coordinator for the Facility, requiring the Pa1ty to deliver less Facility Energy from the Facility than the full amount of energy forecasted in accordance with Section 4.4 to be produced from the Facility for a period of time, then the calculation of Deemed Delivered Energy during such period 7 does not include any Energy that was not generated or stored due to such Planned Outage, Forced Facility Outage, Force Majeure Event or Curtailment Period. "Defaulting Party" has the meaning set forth in Section ARTICLE 1 l (a). "Deficient Month" has the meaning set forth in Section 4.12(e). "Delivery Point" means the Facility Pnode on the CAISO grid. "Delivery Term" shall mean the period of Contract Years set fo1th on the Cover Sheet beginning on the Commercial Operation Date, unless tenninated earlier in accordance with the tenns and conditions of this Agreement.
"Development Cure Period" has the meaning set fo1t h in Exhibit B. "Development Security" means (i) cash or (ii) a Letter of Credit in the amount set fo1t h on the Cover Sheet.
"Disclosing Party" has the meaning set fo1th in Section 18.2. "Early Termination Date" has the meaning set forth in Section 11.2(a). "Effective Date" has the meaning set fo11h on the Preamble. "Electrical Losses" means all transmission or transfonnation losses between the Facility and the Delive1y Point associated with delive1y of Facility Energy to the Delive1y Point, including losses associated with delive1y of Energy to the Delive1y Point, calculated in accordance with CAISO approved methodologies applicable to revenue metering. "Eligible Renewable Energy Resource" has the meaning set fo1t h 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. "Emission Reduction Credits" or "ERCs" means emission reductions that have been authorized by a local air pollution control district pursuant to California Division 26 Air Resources; Health and Safety Code Sections 40709 and 40709.5, whereby a district has established a system by which all reductions in the emission of air contaminants that are to be used to offset ce11ain future increases in the emission of air contaminants shall be banked prior to use to offset future . . mcreases m em1ss1ons. "Energy" means electrical energy, measured in kilowatt-hours or megawatt-hours or multiple units thereof.
"Energy Supply Bid" has the meaning set fo1t h in the CAISO Tariff. "Environmental 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. Environmental Attributes include but are not 8 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 detennined by the United Nations Intergovernmental Panel on Climate Change, or othe1wise by law, to contribute to the actual or potential threat of altering the Earth's climate by trapping heat in the atmosphere; (3) the repo1iing 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 Environmental Attributes associated with one (1) MWh of Facility Energy.
Environmental Attributes do not include (i) any energy, capacity, reliability or other power attributes from the Facility, (ii) production tax credits associated with the constrnction or operation of the Facility and other financial incentives in the fo1m 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 ce1iain fuels, or local subsidies received by the generator for the destruction of pa1iicular preexisting pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered or used by the Facility for compliance with local, state, or federal operating and/or air quality pennits. If the Facility is a biomass or landfill gas facility and Seller receives any ti·adable Environmental Atti·ibutes based on the greenhouse gas reduction benefits or other emission offsets atti·ibuted to its fuel usage, it shall provide Buyer with sufficient Environmental Attributes to ensure that there are zero net emissions associated with the production of electi·icity from the Facility. "Environmental Cost" means costs incmTed in connection with acquiring and maintaining all environmental pe1mits and licenses for the Facility, and the Facility's compliance with all applicable environmental laws, rnles and regulations, including capital costs for pollution mitigation or installation of emissions conti·ol equipment required to pe1mit or license the Facility, all operating and maintenance costs for operation of pollution mitigation or control equipment, costs of pe1mit maintenance fees and emission fees as applicable, and the costs of all Emission Reduction Credits or Marketable Emission Trading Credits required by any applicable environmental laws, rnles, regulations, and pe1mits to operate, and costs associated with the disposal and clean-up of Hazardous Materials inti·oduced to the Site, and the decontamination or remediation, on or off the Site, necessitated by the inti·oduction of such Hazardous Materials on the Site.
"Environmental Laws" has the meaning set forth in Section 16.3. "Event of Default" has the meaning set fo1i h in Section ARTICLE 11. "Excess MWh" has the meaning set fo1i h in Exhibit C.
"Excused Event" has the meaning set fo1ih in Exhibit P. "Exigent Circumstance" means actual or imminent haim to life or safety, public health, third-paiiy owned property, including the Site, or the environment due to or ai·ising from the Facility or po1iion thereof.
"Expected Commercial Operation Date" has the meaning set fo1ih on the Cover Sheet. 9 "Expected Construction Start Date" has the meaning set forth on the Cover Sheet. "Expected Energy" means the quantity of Energy that Seller expects to be able to deliver to Buyer from the Generating Facility during each Contrnct Year in the quantity specified on the Cover Sheet, which amount will be adjusted propo1tionately to the reduction in Guaranteed Generation Capacity to Installed Generation Capacity pursuant to Section 5 of Exhibit B, if applicable.
"Facility" means the 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 Facility Energy to the Delive1y Point; provided that the "Facility" does not include the Shared Facilities.
"Facility Energy" means the Energy produced by the Facility that is delivered directly to the Delive1y Point 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 Pmdent Operating Practices to account for Electrical Losses and Station Use.
"Facility Meter" means a CAISO-approved bi-directional revenue quality meter or meters (with a 0.3 accuracy class), CAISO-approved data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and repo1t ing, in real time, that will measure all Facility Energy for the purpose of invoicing in accordance with Section Error! Reference source not found .. The Facility may contain multiple m easurement devices that will make up the Facility Meter, and, unless othe1wise indicated, references to the Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together.
"Facility Safety Plan" means Seller's written plan specific to the Facility that includes the Safeguards and plans to comply with the Safety Requirements, as such Safeguards and Safety Requirements are generally outlined in Exhibit L.
"FCDS Pursuit Costs" has the meaning set forth in Section 3.7(d). "FERC" means the Federal Energy Regulato1y Commission or any successor government agency.
"Flexible RAR" means the flexible capacity requirements established for load-serving entities by the CAISO pursuant to the CAISO Tariff, the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority.
"Force Majeure Event" has the meaning set fo1t h in Section ARTICLE 10. "Forced Facility Outage" means an unexpected failure of one or more components of the Facility that prevents Seller from generating or storing Energy or making Facility Energy available at the Delive1y Point and that is not the result of a Force Majeure Event. "Forecasting Penalty" has the meaning set fo1th in Section 4.3(f). "Forward Certificate Transfers" has the meaning set fo1ih in Section 4.12(a). "Full Capacity Deliverability Status" or "FCDS" has the meaning set forth in the CAISO Tariff.
"Future Environmental Attributes" shall mean any and all generation atti·ibutes ( other than Environmental Atti·ibutes or Renewable Energy fucentives) under the RPS regulations and/or under any and all other international, federal, regional, state or other law, rnle, regulation, bylaw, ti·eaty or other intergovernmental compact, decision, adminish'ative decision, program (including any voluntaiy compliance or membership program), competitive mai·ket or business method (including all credits, ce1tificates, benefits, and emission measurements, reductions, offsets and allowances related thereto) that are atti·ibutable, now, or in the future, to the generation of electi·ical energy by the Facility. Future Environmental Ath'ibutes do not include investment tax credits or production tax credits associated with the constrnction or operation of the Facility, or other financial incentives in the fo1m 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 any Pa1ty, an amount equal to the present value of the economic benefit to it, if any ( exclusive of Costs), resulting from the te1mination of this Agreement for the remaining Conti-act Te1m, dete1mined in a commercially reasonable manner. Factors used in dete1mining the econoinic benefit to a Paity may include, without liinitation, reference to info1mation supplied by one or more third paities, which shall exclude Affiliates of the Non-Defaulting Paity, including without limitation, quotations (either fom or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant mai·ket data in the relevant mai·kets, compai·able ti·ansactions, fo1ward price curves based on econoinic analysis of the relevant mai·kets, settlement prices for compai·able ti·ansactions at liquid ti·ading hubs (e.g., NP-15), all of which should be calculated for the remaining Conti·act Te1m, and include the value of Environmental Ath'ibutes and Capacity Atti·ibutes.
"GHG Regulations" means Title 17, Division 3 (Air Resources), Chapter 1 (Air Resources Boai·d), Subchapter 10 (Climate Change), A1ticle 5 (Einissions Cap), Sections 95800 to 96023 of the California Code of Regulations, as ainended or supplemented from time to time. "Governmental Authority" means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other governmental, congressional or pai·liamenta1y, regulato1y , or judicial instrumentality, authority, body, agency, depaitment, bureau, or entity with authority to bind a Paity at law, including CAISO; provided, "Governmental Authority" shall not in any event include any Party.
"Green Tag Reporting Rights" means the right of a purchaser of renewable energy to repo1t ownership of accumulated "green tags" in compliance with and to the extent pennitted by applicable Law and include, without liinitation, rights under Section 1605(b) of the Energy Policy Act of 1992, and any present or future federal, state or local certification program or einissions ti·ading program, including pursuant to the WREGIS Operating Rules. "Guaranteed Capacity" means the total capacity in MW of the Facility equal to the amount set fo1t h on the Cover Sheet, as may be adjusted pursuant to Section 5 of Exhibit B. 11 "Guaranteed Commercial Operation Date" means the date set fo1i h on the Cover Sheet. "Guaranteed Construction Start Date" mean the date set fo1i h on the Cover Sheet. "Guaranteed Energy Production" has the meaning set fo1th in Section 4.9. "Hazardous Materials" means, collectively, (a) any chemical, material or substance that is listed or regulated under applicable Laws as a "hazardous" or "toxic" substance or waste, or as a "contaminant" or "pollutant" or words of similar impo1i, (b) any petroleum or petroleum products, flallllllable materials, explosives, radioactive materials, asbestos, urea f01maldehyde foam insulation, and transfo1mers or other equipment that contain polychlorinated biphenyls, and ( c) any other chemical or other material or substance, exposure to which is prohibited, limited or regulated by any Laws.
"Imbalance Energy" means the amount of Energy in MWh, in any given Settlement Period or Settlement futerval, by which the amount of Facility Energy deviates from the amount of Scheduled Energy.
"Indemnified Party" shall mean (i) Buyer, with respect to all third-paiiy claims, demands, losses, liabilities, penalties, and expenses ai·ising out of, resulting from, or caused by the circumstances described in Section 16.1 ( a), and (ii) Seller, with respect to all third-paiiy claims, demands, losses, liabilities, penalties, and expenses ai·ising out of, resulting from, or caused by the circumstances described in Section 16 .1 (b).
"Indemnifying Party" shall mean (i) Seller, with respect to all third-pa1iy claims, demands, losses, liabilities, penalties, and expenses ai·ising out of, resulting from, or caused by the circumstances described in Section 16.l (a), and (ii) Buyer, with respect to all third-paiiy claims, demands, losses, liabilities, penalties, and expenses ai·ising out of, resulting from, or caused by the circumstances described in Section 16 .1 (b).
"Initial Synchronization" means the commencement of Trial Operations (as defined in the CAISO Tai·iff).
"Installed Capacity" means the actual generating capacity of the Facility, as measured in MW-AC at the Delive1y Point, that achieves Commercial Operation, adjusted for ambient conditions on the date of the perfo1mance test, and as evidenced by a ce1iificate substantially in the fonn attached as Exhibit I hereto.
"Interconnection Agreement" means the interconnection agreement entered into by Seller pursuant to which the Facility will be interconnected with the Transmission System, and pursuant to which Seller's futerconnection Facilities and any other futerconnection Facilities will be constmcted, operated and maintained during the Contract Tenn. "Interconnection Capacity Limit" means the maximum instantaneous amount of Facility Energy that is pe1mitted to be delivered to the Delive1y Point under Seller's futerconnection Agreement, in the amount of_ MW.
12 "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 futerconnection Agreement.
"Interest Rate" has the meaning set fo1i h in Section 8.2. "Inter-SC Trade" or "IST" has the meaning set fo1ih in the CAISO Tariff. "ITC" means the investment tax credit established pursuant to Section 48 of the United States futernal 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 ce1iain Joint Powers Agreement dated December 15, 2015, as amended from time to time, under which Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act, Government Code §§ 6500 et seq. "Law" means any applicable law, statute, rnle, regulation, decision, writ, order, decree or judgment, pennit or any interpretation thereof, promulgated or issued by a Governmental Authority.
"Lender" means, collectively, any Person (i) providing semor or subordinated construction, interim, back leverage or long-te1m debt, equity or tax equity financing or refinancing for or in connection with the development, construction, purchase, installation or operation of the Facility, whether that financing or refinancing takes the fonn of private debt (including back-leverage debt), equity (including tax equity), public debt or any other f01m (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 and/or its Affiliates, and any tiustee or agent or similar representative acting on their behalf, (ii) providing interest rate or commodity protection under an agreement hedging or othe1wise mitigating the cost of any of the foregoing obligations and/or (iii) paiiicipating in a lease financing (including a sale leaseback or leveraged leasing sti11cture) with respect to the Facility. "Letter(s) of Credit" means one or more in-evocable, standby letters of credit issued by a U.S. commercial bank or a foreign bank with a U.S. commercial bank or ti11st company or the U.S. branch of a foreign bank (in either case, which is not an Affiliate of either Paiiy) with such bank ( a) having assets of at least $10 billion and a Credit Rating of at least (i) A3 from Moody's and (ii) A- from S&P, or (b) being reasonably acceptable to Buyer, in a f01m 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. "Local RAR" means the local Resource Adequacy Requirements established for load-serving entities by the CAISO pursuant to the CAISO Tariff, the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority. "Local RAR" may also be known as 13 local area reliability, local resource adequacy, local resource adequacy procurement requirements, or local capacity requirement in other regulato1y proceedings or legislative actions. "Locational Marginal Price" or "LMP" has the meaning set forth in the CAISO Tariff. "Losses" means, with respect to any 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 Te1m, detennined in a commercially reasonable manner. Factors used in dete1mining economic loss to a Paiiy may include, without limitation, reference to info1mation supplied by one or more third paities, which shall exclude Affiliates of the Non-Defaulting Pai·ty, including without limitation, quotations ( either fnm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, compai·able transactions, forwai·d price cmves based on economic analysis of the relevant markets, settlement prices for compai·able transactions at liquid trading hubs (e.g., NP-15), all of which should be calculated for the remaining Contract Tenn and must include the value of Environmental Attributes, Capacity Attributes, and Renewable Energy Incentives. "Lost Output" has the meaning set forth in Section 4.9. The Lost Output shall be calculated in the saine manner as Deemed Delivered Energy is calculated, in accordance with the definition thereof.
"Marketable Emission Trading Credits" means e1mss1ons trading credits or units pursuant to the requirements of California Division 26 Air Resources; Health & Safety Code Section 39616 and Section 40440.2 for market-based incentive programs such as the South Coast Air Quality Management District's Regional Clean Air Incentives Mai·ket, also known as RECLAIM, and allowances of sulfur dioxide trading credits as required under Title IV of the Federal Clean Air Act (42 U.S.C. § 7651b (a) to(±)).
"Milestones" means the development activities for significant pe1mitting, interconnection, and constmction milestones set fo1th on the Cover Sheet. "Monthly Delivery Forecast" has the meaning set fort h in Section 4.4(b ). "Moody's" means Moody's Investors Se1vice, Inc., or its successor. "MW" means megawatts of alternating cunent, unless expressly stated in tenns of direct cmTent.
"MWh" means megawatt-hours of alternating current, unless expressly stated in tenns of direct current.
"Negative LMP" means, in any Settlement Period or Settlement Inte1val, the LMP at the Facility's PNode is less than zero dollars ($0).
"NERC" means the No1th American Electric Reliability Corporation. "Net Qualifying Capacity" or "NOC" has the meaning set fo1t h in the CAISO Tariff. 14 "Network Upgrades" has the meaning set fo1ih in the CAISO Tariff. "Non-Defaulting Party" has the meaning set fo1th in Section 11.2. "Notice" shall, unless othe1wise specified in the Agreement, mean written commm1ications by a Party to be delivered by hand delive1y, United States mail, overnight courier service, facsimile or electronic messaging ( e-mail).
"Notification Deadline" in respect of a Showing Month shall be fifteen (15) Business Days before the relevant deadlines for the coITesponding RA Compliance Showings for such Showing Month.
"NP-15" means the Existing Zone Generation Trading Hub for Existing Zone region NP15 as set fo1t h in the CAISO Tariff.
"Pacific Prevailing Time" means the prevailing standard time or daylight savings time, as applicable, in the Pacific time zone.
"~ " has the meaning set fo1th in the Preamble.
"Performance Measurement Period" has the meaning set fo1th in Section 4.9. "Performance Security" means (i) cash or (ii) a Letter of Credit in the amount set fo1t h on the Cover Sheet.
"Permitted Transferee" means (i) any Affiliate of Seller; or (ii) any entity that satisfies, or is controlled by another Person that satisfies, the following requirements:
(A) A tangible net wo1ih of not less than one hundred million dollars ($100,000,000) or a Credit Rating of at least BBB+ from S&P, BBB+ from Fitch, or Baal 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-paiiy with such experience to operate the Facility. "Person" means any individual, sole proprietorship, corporation, limited liability company, limited or general paiinership, joint venture, association, joint-stock company, tiust, inco1porated organization, institution, public benefit c01poration, uninco1porated organization, government entity or other entity.
"Planned Outage" means a period during which the Facility is either in whole or in pa1i not capable of providing service due to planned maintenance that has been scheduled in advance in accordance with Section 4.8(a).
"PNode" has the meaning set fo1ih in the CAISO Tariff.
15 "Portfolio" means the single portfolio of electrical energy generating, electr·ical energy storage, or other assets and entities, including the Facility (or the interests of Seller or Seller's Affiliates or the interests of their respective direct or indirect parent companies), that is pledged as collateral security in connection with a Portfolio Financing. "Portfolio Content Category" means PCCl, PCC2 or PCC3, as applicable. "Portfolio Content Category 1" or "PCC1" means any Renewable Energy Credit associated with the generation of elecu-icity from an Eligible Renewable Energy Resource consisting of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(l), as may be amended from time to time or as fmt her defined or supplemented by Law.
"Portfolio Content Category 2" or "PCC2" means any Renewable Energy Credit associated with the generation of elecu-icity 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 fmther defined or supplemented by Law.
"Portfolio Content Category 3" or "PCC3" means any Renewable Energy Credit associated with the generation of elecu-icity 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 fmt her defined or supplemented by Law.
"Portfolio Financing" means any debt incmTed by an Affiliate of Seller that is secured only by a Po1tfolio.
"Portfolio Financing Entity" means any Affiliate of Seller that incurs debt in connection with any Po1tfolio Financing.
"Product" has the meaning set fo1th on the Cover Sheet. "Progress Report" means a progress report including the items set fo1th in Exhibit E. "Prudent Operating Practice" means (a) the applicable practices, methods and acts required by or consistent with applicable Laws and reliability criteria, and othe1w ise engaged in or approved by a significant po1tion of the electr·ic industry during the relevant time period with respect to grid-interconnected, utility-scale generating facilities in the Western United States, and (b) any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Pmdent Operating Practice is not intended to be liinited to the optimum practice, method or act to the exclusion of all others, but rather to acceptable practices, methods or acts generally accepted in the industry with respect to grid-interconnected, utility-scale generating facilities in the Western United States. Pmdent Operating Practice shall include compliance with applicable Laws, applicable safety and reliability criteria, CPUC General Order 167, and the applicable criteria, mles and standards promulgated in the National Elecu-ic Safety Code and the 16 National Electrical Code, as they may be amended or superseded from time to time, including the criteria, rnles 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.
"Qualifying Capacity" has the meaning set fo1th in the CAISO Tariff. "RA Compliance Showing" means the (a) Local RAR compliance or adviso1y showings ( or siinilar or successor showings), (b) RAR compliance or adviso1y showings ( or siinilar or successor showings), and ( c) Flexible RAR compliance or adviso1y showings ( or similar successor showings), in each case, an entity is required to make to the CAISO pursuant to the CAISO Tariff, to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the Resource Adequacy Rulings, or to any Governmental Authority.
"RA Deficiency Amount" means the liquidated damages payment that Seller shall pay to Buyer for an applicable RA Sho1t fall Month as calculated in accordance with Section 3.9(a). "RA Guarantee Date" means the date on which the Facility (a) obtained Full Capacity Deliverability Status or a delive1y allocation from CAISO, and (b) received a NQC value from CAISO, such that the Facility has the ability to provide Resource Adequacy Benefits to Buyer; provided that if the Facility has not obtained FCDS or a delive1y allocation as of the Commercial Operation Date, then the RA Guarantee Date shall be the date on which the Facility first obtains such FCDS or delive1y allocation.
"RA Shortfall Month" means, for purposes of calculating an RA Deficiency Amount under Section 3.9(a), any Showing Month occmTing on or after the RA Guarantee Date in which the NQC of the Facility for such Showing Month was less than the Qualifying Capacity for the Facility for such Showing Month.
"RA Shortfall Amount" has the meaning set fo1th in Section 3.8(b). "Real-Time Forecast" means any Notice of any change to the Available Capacity or hourly expected Energy delivered by or on behalf of Seller pursuant to Section 4.4(d). "Real-Time Market" has the meaning set fo1th 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. "Release" has the meaning set fo1th in Section 16.3.
"Reliability Network Upgrades" has the meaning set fo1th in the CAISO Tariff. "Remedial Action Plan" has the meaning in Section 2.4.
"Remediation Event" means the occurrence of any of the following with respect to the 17 Facility or the Site: (a) an Exigent Circumstance (b) a Serious Incident; (c) a failure or compromise of an existing Safeguard; (d) Notice by Buyer pursuant to Section 6.5, in its sole discretion, that the Seller, the Facility Safety Plan, and/or Seller Attestation, as applicable, is not consistent with the Safety Requirements; or (e) any actual condition related to the Facility or the Site with the potential to adversely impact the safe constrnction, operation, maintenance, or decommissioning of the Facility or the Site.
"Remediation Period" means the time period between the first occmTence of the Remediation Event and the resolution of such Remediation Event which period may not exceed a total of ninety (90) days unless extended pursuant to Section 6.5. "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 fmther defined or supplemented by Law.
"Renewable Energy Incentives" means: (a) all federal, state, or local Tax credits or other Tax benefits associated with the constrnction, 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 amended); (b) any federal, state, or local grants, subsidies or other like benefits relating in any way to the Facility, including a cash grant available under Section 1603 of Division B of the American Recove1y and Reinvestment Act of 2009, in lieu of federal Tax credits or any similar or substitute payment available under subsequently enacted federal legislation; and ( c) any other fo1m of incentive relating in any way to the Facility that is not a Green Attribute or a Future Environmental Attribute.
"Replacement Energy" means energy produced by a facility other than the Facility that, at the time delivered to Buyer, qualifies under Public Utilities Code 399 .16(b )(1 ), that would have been generated by the Facility during the same period for which the Replacement Energy is being provided.
"Replacement Environmental Attributes" means Renewable Energy Credits of the same Portfolio Content Catego1y (i.e., PCCl) as the Environmental Attributes portion of the Product and of the same timeframe for retirement as the Renewable Energy Credits that would have been generated by the Facility during the same period for which the Replacement Environmental Attributes are being provided. To establish the value of Replacement Environmental Attributes, Buyer shall provide Seller with at least one independently-prepared estimate of the value of Replacement Environmental Attributes based, if available, on the most recently available actual contract and sales inf 01mation. Seller may provide an alternative estimate based on actual contract and sales info1mation.
"Replacement Product" means (a) Replacement Energy, and (b) all Replacement Environmental Attributes.
"Replacement RA" means Resource Adequacy Benefits, if any, equivalent to those that would have been provided by the Facility with respect to either (i) the applicable Sho1t fall Month in which an RA Deficiency Amount is due to Buyer, or (ii) the applicable Sho1tfall Month for which the Seller has elected to provide Buyer with Replacement RA. 18 "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 shall include any local, zonal or otherwise locational attributes associated with the Facility.
"Resource Adequacy Requirements" or "RAR" means the resource adequacy requirements applicable to an entity as established by the CAISO pursuant to the CAISO Tariff, by the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority.
"Resource Adequacy Rulings" means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024, 14-06-050, 15-06-063, 16-06-045, 17-06-027, 18-06-030, 18- 06-031 , 19-02-022, 19-06-026, 19-10-021 , 20-01 -004, 20-03-016, 20-06-002, 20-06-031 , 20-06- 028, 20-12-006, 21-06-029, 21-07-014, 22-06-050, 23-04-010, 23-06-029, 24-06-004 and any other existing or subsequent rnling or decision, or any other resource adequacy laws, rnles or regulations enacted, adopted or promulgated by any applicable Governmental Authority, however described, as such decisions, rnlings, Laws, rnles or regulations may be amended or modified from time-to-time throughout the Contract Te1m.
"S&P" means the Standard & Poor' s Financial Services, LLC ( a subsidiaiy of S&P Global fuc.) or its successor.
"Safeguard" means any procedures, practices, or actions with respect to the Facility, the Site or Work for the purpose of preventing, mitigating, or containing foreseeable accidents, injuries, damage, release of Hazai·dous Material or environmental hann. "Safety Remediation Plan" means a written Notice from Seller to Buyer containing info1mation about a Remediation Event, including (a) the date, time and location of first occmTence, (b) the circlllllStances smTounding cause, (c) impacts, and (d) detailed info1mation about Seller's plans to resolve the Remediation Event.
"Safety Requirements" means Prndent Electrical Practices, CPUC General Order No. 167, Contractor Safety Program Requirements, California Senate Bill 38 (2023), and all applicable requirements of Law, the Utility Distribution Company, the Transmission Provider, Governmental Approvals, the CAISO, CARB, NERC and WECC, including, but not limited to, any applicable regulations adopted by the California Department of Toxic Substances Control relating to the disposal of materials used in the Facility.
"SCADA Systems" means the standard superviso1y control and data acquisition systems to be installed by Seller as paii of the Facility, including those system components that enable Seller to receive ADS and AGC instructions from the CAISO or similar instrnctions from Buyer's SC.
"Schedule" has the meaning set forth in the CAISO Tai·iff, and "Scheduled" has a corollaiy meaning.
19 "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), and/or any other financially binding Schedule, market instmction or dispatch for the Facility for a given period oftime implemented in accordance with the CAISO Tariff. "Scheduling Coordinator" or "SC" means an entity ce1iified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff for the pmposes of unde1iaking 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 fo1ih in Section 8.9. "Self-Schedule" has the meaning set fo1ih in the CAISO Tariff. "Seller" has the meaning set forth on the Cover Sheet.
"Seller Initiated Test" has the meaning set fo1ih in Section 4.4(f). "Seller's Indemnified Parties" has the meaning set fo1ih in Section 16.l(b). "Seller's WREGIS Account" has the meaning set fo1ih in Section 4.12(a). "Serious Incident" means a haimful event that occurs on the Site during the tenn ai·ising out of, related to, or connected with the Facility or the Site that results in any of the following outcomes: (a) any injmy to or death of a member of the general public; (b) the death or pe1manent, disabling injmy to operating personnel, subcontractors, Seller's employees, agents, or consultants, or authorized visitors to the Site; (c) any property damage greater than two hundred and fifty thousand dollai·s ($250,000.00); ( d) release of Hazardous Material above the limits, or violating the requirements, established by pennits, codes, standai·ds, regulations, Laws, or Governmental Authorities; or (e) environmental impacts exceeding those authorized by pennits or Law. "Settlement Amount" means the Non-Defaulting Paiiy's Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Pa1iy's Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Pa1iy. If the Non-Defaulting Pa1iy's Gains exceed its Costs and Losses, then the Settlement Amount shall be zero dollai·s ($0). The Settlement Amount does not include consequential, incidental, punitive, exempla1y or indirect or business intenuption damages.
"Settlement Interval" has the meaning set fo1ih in the CAISO Tariff. "Settlement Period" has the meaning set fo1ih in the CAISO Tariff. "Shared Facilities" means the gen-tie lines, transfonners, substations, or other equipment, pe1mits, contract rights, and other assets and property (real or personal), in each case, as necessaiy to enable delive1y of Facility Energy to the Delive1y Point, including the Interconnection Facilities and the Interconnection Agreement itself, if applicable, that are used in common with third pa1iies. 20 "Showing Month" shall be the calendar month of the Delive1y Tenn that is the subject of an RA Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the CAISO Tariff. For illustrative pmposes only, pursuant to the CAISO Tariff and Resource Adequacy Rulings in effect as of the Effective Date, the monthly RA Compliance Showing made in June is for the Showing Month of August.
"Site" means the real property on which the Facility is or will be located, as fmther described in Exhibit A, and as shall be updated by Seller at the time Seller provides an executed Construction Strut Date certificate in the f01m of Exhibit J to Buyer;provided, that any such update to the Site that includes real prope1ty that was not originally contained within the Site boundai·ies described in Exhibit A shall be subject to Buyer's approval of such updates in its sole discretion. "Site Control" means that, for the duration of the Contr·act Te1m, Seller ( or, prior to the Delive1y Te1m, 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 that is used within the Facility to power the lights, motors, temperature conu-ol systems, contr·ol systems and other electr·ical loads that ai·e necessaiy 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.
"System Emergency" means any condition that requires, as dete1mined and declai·ed by CAISO or the Transmission Provider, automatic or immediate action to (i) prevent or limit haim to or loss oflife or prope1ty, (ii) prevent loss of tr·ansmission 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, local and any foreign taxes, levies, assessments, surchai·ges, duties and other fees and chai·ges of any nature imposed by a Governmental Authority, whether cmTently in effect or adopted during the Contr·act T e1m, including ad valorem, excise, franchise, gross receipts, impo1t/export, license, property, sales and use, stamp, tr·ansfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. "Tax Benefits" means any state, local and/or federal tax benefit or incentive, including energy credits detennined under Section 45 or 48 of the Internal Revenue Code of 1986, as amended, investinent tax credits, production tax credits, depreciation, aino1tization, deduction, expense, exemption, preferential rate, and/or other tax benefit or incentive associated with the production of renewable energy and/or the operation of, construction, investments in or ownership of the Facility (including any cash payment or grant).
"Tax Credits" means any state, local and/or federal production tax credit, depreciation benefit, tax deduction and/or investinent tax credit, including the ITC and PTC, specific to investments in renewable energy facilities.
21 "Terminated Transaction" has the meaning set forth in Section 11.2(a). "Termination Payment" has the meaning set fo1th in Section 11.3. "Test Energy" means any Facility Energy delivered ( a) commencing on the later of (i) the first date that the CAISO info1ms Seller in writing that Seller may deliver Facility Energy to the CAISO and (ii) the first date that the Transmission Provider info1ms Seller in writing that Seller has conditional or temporaiy pe1mission to pai·allel and (b) ending upon the occmTence of the Commercial Operation Date.
"Transmission Provider" means any entity that owns, operates and maintains transmission or distribution lines and associated facilities and/or has entitlements to use ce1tain transmission or distribution lines and associated facilities for the pmpose of transmitting or transpo1ting the Facility Energy from the Delive1y Point. "Transmission System" means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service downstream from the Delive1y Point.
"Transmission System Outage" means an outage on the Transmission System, other than a System Emergency, that is not caused by Seller's actions or inactions and that prevents Buyer or the CAISO (as applicable) from receiving System Energy onto the Transmission System. "Ultimate Parent" means Pai·adigm Energy LLC, a Delawai·e limited liability company. "Variable Energy Resource" or '~ " has the meaning set fo1th in the CAISO Tariff. "Work" means (a) work or operations perfo1med by a Paity or on a Pa1ty's behalf; and (b) materials, paits or equipment furnished in connection with such work or operations; including (i) waiTanties or representations made at any time with respect to the fitness, quality, dmability, perfonnance or use of "a Paity's work"; and (ii) the providing of or failure to provide wainings or instructions.
"WREGIS" means the Western Renewable Energy Generation Info1mation System or any successor renewable energy ti·acking program.
"WREGIS Certificate Deficit" has the meaning set fo1th in Section 4.12(e). "WREGIS Certificates" has the saine meaning as "Ce1tificate" as defined by WREGIS in the WREGIS Operating Rules and ai·e designated as eligible for complying with the California Renewables Po1tfolio Standard.
"WREGIS Operating Rules" means those operating rnles and requirements adopted by WREGIS as of May 1, 2018, as subsequently amended, supplemented or replaced (in whole or in pait) from time to time.
1.2 Rules of Interpretation. In this Agreement, except as expressly stated othe1w ise or unless the context othe1wise requires:
22 (a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words impo1iing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words "hereof', "herein", and "hereunder" and words of siinilar impo1i shall refer to this Agreement as a whole and not to any paiiicular provision of this Agreement; (d) a reference to an Aliicle, Section, paragraph, clause, Paiiy, or Exhibit is a reference to that Aliicle, Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless othe1wise specified;
( e) a reference to a document or agreement, including this Agreement shall mean such document, agreement or this Agreement including any amendment or supplement to, or replacement, novation or modification of this Agreement, but disregai·ding any amendment, supplement, replacement, novation or modification made in breach of such document, agreement or this Agreement;
(f) a reference to a Person includes that Person's successors and pennitted assigns;
(g) the tenn "including" means "including without liinitation" and any list of examples following such te1m shall in no way restrict or liinit the generality of the word or provision in respect of which such examples ai·e provided; (h) references to any statute, code or statuto1y provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context othe1wise requires; (i) in the event of a conflict, a mathematical fo1mula or other precise description of a concept or a te1m shall prevail over words providing a more general description of a concept or a te1m ;
G) references to any amount of money shall mean a reference to the amount in United States Dollai·s;
(k) the expression "and/or" when used as a conjunction shall connote "any or all of';
(1) words, phrases or expressions not othe1wise defined herein that (i) have a generally accepted meaning in Prndent Operating Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prndent Operating Practice but that have well known and generally accepted technical or ti-ade meanings, shall have such recognized meanings; and
(m) each Paiiy acknowledges that it was represented by counsel in connection 23 with this Agreement and that it or its counsel reviewed this Agreement and that any mle of construction to the effect that ambiguities are to be resolved against the drafting paiiy shall not be employed in the interpretation of this Agreement.
ARTICLE 2: TERM; CONDITIONS PRECEDENT
2.1 Contract Term.
(a) The tenn of this Agreement shall commence on the Effective Date and shall remain in full force and effect until the conclusion of the Delive1y Tenn, subject to any eai·ly tennination provisions and any conti·act te1m extension provisions set forth herein ("Contract :UW"); provided that Buyer's obligations to pay for or accept any Product ai·e subject to Seller's completion of the conditions precedent pursuant to Section 2.2. (b) Applicable provisions of this Agreement shall continue in effect after tennination, including eai·ly te1mination, to the extent necessaiy to enforce or complete the duties, obligations or responsibilities of the Paiiies ai·ising prior to tennination. The confidentiality obligations of the Paiiies under Aliicle 18 shall remain in full force and effect for one (1) year following the tennination of this Agreement, and all indemnity and audit rights shall remain in full force and effect for one (1) year following the tennination of this Agreement.
2.2 Conditions Precedent. Seller shall provide Notice to Buyer of the anticipated Commercial Operation Date at least fo1iy-five ( 45) days in advance of such date, with the required documentation demonsti·ating it has met all the conditions precedent set fo1ih below for achieving Commercial Operation, unless a different deadline for ce1iain documentation is set fo1ih below.
Following Buyer's receipt of such Notice, Buyer shall have five (5) Business Days to either approve or rej ect Seller's request for Commercial Operation, or to request conections to the conditions precedent documentation. In the event Buyer rejects Seller's request for Commercial Operation, Buyer will provide reasonable detail regarding the basis for Buyer's rejection. Upon Buyer's approval of Commercial Operation, Buyer shall provide Seller with written acknowledgement of the Commercial Operation Date:
(a) Seller shall have provided to Buyer, by no eai·lier than ninety (90) days prior to the Commercial Operation Date, updated, conect, and complete copies of (A) Seller's most recent annual repo1i, audited consolidated financial statements, and unaudited consolidated financial statements; and (B) Seller's organizational documents to confmn Seller's and Seller's Affiliate's legal and financial relationship to and authority over the Facility (such as certifications of fo1mation, certifications and articles of inc01poration, chatters, operating agreements, paiinership agreements, bylaws, or siinilai· documents) and any amendments thereto. (b) By no later than the Commercial Operation Date, Seller shall have delivered to Buyer (i) a ce1tificate from a Licensed Professional Engineer substantially in the f01m of Exhibit H setting fo1th the Installed Capacity on the Commercial Operation Date; (c) Seller has executed an Interconnection Agreement with the Transinission Provider, which shall be in full force and effect, and has delivered a copy of the Interconnection Agreement to Buyer;
24 ( d) A Participating Generator Agreement and a Meter Service Agreement between Seller and CAISO has been executed and is in full force and effect, and a copy of each such agreement has been delivered to Buyer;
( e) Seller has obtained CAISO Ce1iification for the Facility and provided proof to Buyer;
(f) All applicable regulato1y authorizations, approvals and permits for the operation of the Facility have been obtained and all conditions thereof that are capable of being satisfied on the Collllllercial Operation Date shall have been satisfied and shall be in full force and effect;
(g) Seller has Site Control and has provided proof to Buyer; (h) Seller has received CEC Prece1iification of the Facility (and reasonably expects to receive final CEC Certification and Verification for the Facility in no more than one hundred eighty (180) days from the Commercial Operation Date); (i) Seller has completed all applicable WREGIS registration requirements, including the completion and submittal of all applicable registration fo1ms and suppo1iing documentation, which may include applicable interconnection agreements, infonnational surveys related to the Facility, QRE service agreements, and other appropriate documentation required to effect Facility registration with WREGIS and to enable Renewable Energy Credit transfers related to the Facility within the WREGIS system;
(j) Seller shall have submitted to Buyer a Facility Safety Plan; (k) Seller shall have delivered to Buyer all insurance documents required under Article 17;
(1) If any applicable Governmental Authority required Seller to develop a decommissioning plan as pa1i of any pe1mitting process for the Facility, then Seller shall have provided such decollllllissioning plan to Buyer;
(m) Seller shall have delivered the Perfo1mance Security to Buyer in accordance with Section 8.8; and
(n) Seller shall have paid Buyer for all invoiced amounts owing under this Agreement, if any, including any Constmction Staii Delay Damages and Collllllercial Operation Delay Damages.
2.3 Progress Reporting. Within fifteen (15) days after the close of (i) each calendai· quaiier from the first calendai· qua1ier following the Effective Date until the Expected Construction Staii Date, and (ii) each calendar month from the first calendar month following the Expected Construction Staii Date until the Collllllercial Operation Date, Seller shall provide to Buyer a Progress Repo1i and agree to regulai·ly scheduled meetings between representatives of Buyer and Seller to review such repo1is and discuss Seller's constr11ction progress. The fonn of the Progress Repo1i is set fo1ih in Exhibit E. Seller shall also provide Buyer with any reasonably requested 25 documentation directly related to the achievement of Milestones within ten (10) Business Days of receipt of such request by Seller. For the avoidance of doubt, Seller is solely responsible for the design and construction of the Facility, including the location of the Site, the Facility layout, and the selection, procurement and installation of the equipment comprising the Facility.
2.4 Remedial Action Plan. If Seller misses a Milestone or anticipates that it will miss a Milestone by the Milestone date, except as the result of Force Majeure Event or Buyer Default, Seller shall submit to Buyer a remedial action plan ("Remedial Action Plan") with the next Progress Report, which will describe in detail any delays ( actual or anticipated) beyond the scheduled Milestone dates, including the specific cause of the delay, Seller's detailed description of its proposed course of action to achieve the missed Milestone and all subsequent Milestones by the Expected Commercial Operation Date, as such date may be extended by Section 4 of Exhibit B; provided, delive1y of any Remedial Action Plan shall not relieve Seller of its obligation to provide Remedial Action Plans with respect to any subsequent Milestones and to achieve the Expected Commercial Operation Date, as such date may be extended by Section 4 of Exhibit B in accordance with the tenns of this Agreement. Subject to the provisions of Exhibit B, so long as Seller complies with its obligations under this Section 2.4, Seller shall not be considered in default of its obligations under this Agreement solely as a result of missing any Milestone.
2.5 First Refusal on Expansion Project. In consideration for Buyer entering into this Agreement, Seller hereby grants Buyer an in-evocable right of first refusal during the Contract Tenn to procure product from any new generation or storage capacity that either Seller or any Seller Affiliate installs or constructs ( a) at the Site, or (b) on real prope11y located within one (1) mile of the Site, or ( c) on any real prope1iy regardless of location if such new capacity will utilize any Shared Facilities ( each such project shall be considered an "Expansion Project"). During the Conti·act Te1m, neither Seller nor Seller's Affiliates shall enter into any agreement to sell product from an Expansion Project without first offering to sell product from such Expansion Project to Buyer on te1ms and conditions materially similar to the te1ms and conditions contained in this Agreement ( excluding price), with pricing to be negotiated by the Paii ies at the time of the applicable offer based on then-cmTent mai·ket conditions. Buyer shall have sixty (60) days following Seller's written offer to exercise its right of first refusal with respect to such Expansion Project, after which Buyer's right of first refusal shall expire with respect to such Expansion Project if Buyer fails to accept such offer. Seller shall indemnify and hold Buyer hannless from all benefits lost and other damages sustained by Buyer as a result of any breach by Seller of its covenants contained within this Section 2.5.
ARTICLE 3: PURCHASE AND SALE
3.1 Purchase and Sale of Product. Subject to the te1ms and conditions of this Agreement, during the Delive1y Te1m, Buyer will purchase all the Product produced by or associated with the Facility at the Conti·act Price and in accordance with Exhibit C, and Seller shall supply and deliver to Buyer all the Product produced by or associated with the Facility. At its sole discretion, Buyer may during the Delive1y Te1m re-sell or use for another pmpose all or a po11ion of the Product, provided that no such re-sale or use shall relieve Buyer of any obligations hereunder. During the Delive1y Te1m, Buyer will have exclusive rights to offer, bid, or othe1w ise submit the Product, and/or any Capacity Atti·ibutes thereof, from the Facility after the Delive1y Point for resale in the mai·ket, and retain and receive any and all related revenues. Subject to 26 Buyer's obligation to purchase Capacity Attributes in accordance with this Section ARTICLE 3 and Exhibit C, Buyer has no obligation to purchase from Seller any Product for which the associated Facility Energy is not or cannot be delivered to the Delive1y Point as a result of an outage of the Facility, a Force Majeure Event, or a Cmtailment Order.
3.2 Sale of Environmental Attributes. During the Delive1y Te1m, Seller shall sell and deliver to Buyer, and Buyer shall purchase from Seller, all Environmental Attributes attributable to the Facility Energy generated by the Facility.
3.3 Imbalance Energy. Buyer and Seller recognize that in any given Settlement Period the amount of Facility Energy may deviate from the amount of energy scheduled with the CAISO.
To the extent there are such deviations, any costs or revenues from such imbalances shall be solely for the account of Buyer.
3.4 Ownership of Renewable Energy Incentives. Seller shall have all rights, title and interest in and to all Renewable Energy Incentives. Buyer acknowledges that any Renewable Energy Incentives belong to Seller. If any Renewable Energy Incentives, or values representing the same, are initially credited or paid to Buyer, Buyer shall cause such Renewable Energy Incentives or values relating to same to be assigned or transfeITed to Seller without delay. Buyer shall reasonably cooperate with Seller, at Seller's sole expense, in Seller's efforts to meet the requirements for any ce1tification, registration, or repo1ting program relating to Renewable Energy Incentives.
3.5 Future Environmental Attributes.
(a) The Parties acknowledge and agree that as of the Effective Date, environmental attributes sold under this Agreement are restricted to Environmental Attributes; however, Future Environmental Attributes may be created by a Governmental Authority through Laws enacted after the Effective Date. Subject to the final sentence of this Section 3.5(a), and Sections 3.5(b) and 3.11, in such event, Buyer shall bear all costs associated with the transfer, qualification, verification, registration and ongoing compliance for such Future Environmental Attributes, but there shall be no increase in the Contract Price. Upon Seller's receipt of Notice from Buyer of Buyer's intent to claim such Future Environmental Attributes, the Paities shall dete1mine the necessaiy actions and additional costs associated with such Future Environmental Attributes. Seller shall have no obligation to alter the Facility unless the Pa1ties have agreed on all necessa1y tenns and conditions relating to such alteration. (b) If Buyer elects to receive Future Environmental Attributes pursuant to Section 3.5(a), the Pait ies agree to negotiate in good faith with respect to the development of finther agreements and documentation necessaiy to effectuate the transfer of such Future Environmental Attributes, including agreement with respect to (i) appropriate transfer, delive1y and risk of loss mechanisms, and (ii) appropriate allocation of any additional costs; provided that the Parties acknowledge and agree that such te1ms ai·e not intended to alter the other material te1ms of this Agreement.
3.6 Test Energy. No less than fomteen (14) days prior to the first day on which Test Energy is expected to be available from the Facility, but in no case more than seventy-five (75) 27 calendar days prior to the Expected Commercial Operation Date of the Facility, Seller shall notify Buyer of the availability of the Test Energy. If and to the extent the Facility generates Test Energy, Seller shall sell and Buyer shall purchase from Seller all Test Energy on an as-available basis. As compensation for such Test Energy, Buyer shall pay Seller an amount equal to fifty percent (50%) of the Contract Price. For the avoidance of doubt, the conditions precedent in Section 2.2 are not applicable to the Parties' obligations under this Section 3.6.
3. 7 Capacity Attributes. Seller shall request Full Capacity Deliverability Status in the CAISO generator interconnection process. As between Buyer and Seller, Seller shall be responsible for the cost and installation of any Network Upgrades associated with obtaining such Full Capacity Deliverability Status, subject to Buyer's reimbursement obligation under Section
3.7(d).
(a) Throughout the Delive1y Te1m and subject to Section 3.11, Seller grants, pledges, assigns and othe1w ise collllllits to Buyer all the Capacity Attributes from the Facility. (b) Throughout the Delive1y Te1m and subj ect to Section 3.11, Seller shall use commercially reasonable effo1is to maintain eligibility for Full Capacity Deliverability Status for the Facility from the CAISO and shall perf01m all actions necessaiy to ensure that the Facility qualifies to provide Resource Adequacy Benefits to Buyer, including compliance with D.21-06- 035. Throughout the Delive1y Tenn, and subject to Section 3.11, Seller hereby covenants and agrees to transfer all Resource Adequacy Benefits to Buyer. (c) Notwithstanding the foregoing, Seller does not guarantee that the Facility will obtain Full Capacity Deliverability Status or RA accreditation, and failure to obtain such status shall not constitute an Event of Default so long as Seller is exercising collllllercially reasonable efforts to obtain such accreditation in accordance with Section 3.7(b). (d) Buyer shall reimburse Seller for all out-of-pocket costs and expenses reasonably incmTed by Seller in pursuing Full Capacity Deliverability Status for the Facility, including CAISO study and re-study fees, application and filing costs, third-paiiy consultant, engineering and legal fees, and deliverability-related Network Upgrade deposits and payments (collectively, "FCDS Pursuit Costs") of such FCDS Pursuit Costs. Prior to incmTing any such FCDS Pursuit Costs, Seller shall first provide Notice to Buyer providing a detailed description and anticipated dollar ainount of each separate out-of-pocket cost and expense. Seller shall only be entitled to reimbursement for FCDS Pursuit Costs for which Buyer has provided written approval.
Seller shall invoice Buyer no more frequently than monthly with reasonable suppo1i ing documentation, and Buyer shall pay undisputed amounts within sixty (60) days after receipt.
3.8 Resource Adequacy Failure.
(a) RA Deficiency Dete1mination. Following the RA Guai·antee Date, for each RA Sho1ifall Month, Seller shall provide Replacement RA, as set fo1ih in Section 3.8(b). If Seller does not provide Replacement RA to Buyer in the amount of the RA Sho1i fall Amount, then Seller shall pay to Buyer, as liquidated damages, compensation for any Buyer Purchased Replacement RA, as set fo1ih in Section 3.8(c) and/or the RA Deficiency Amount, as set fo1i h in Section 3.8(d), provided, that prior to the RA Guarantee Date, Seller shall have no obligation to 28 provide Replacement RA or pay any RA Deficiency Amount under this Agreement. Seller's provision of Replacement RA, or payment of the RA Deficiency Amount shall be the sole remedy for the Capacity Attributes that Seller failed to convey to Buyer. Provided that, if the RA Failure results from the Facility losing Full Capacity Deliverability Status after the RA Guarantee Date for any reason other than a change in law that results in a reduction in the Facility's Net Qualifying Capacity as addressed by Section 3.1 l (f), then Seller shall only be obligated to provide Replacement RA or to pay the RA Deficiency Amount for the initial twelve (12) months after the Facility loses Full Capacity Deliverability Status. (b) Replacement RA. Following the RA Guarantee Date, by no later than the Notification Deadline for the applicable RA Shortfall Month, Seller shall provide Buyer with written Notice substantially in the f01m of Exhibit M specifying whether Seller will provide Replacement RA in the amount of the RA Shortfall Amount for the applicable RA Shortfall Month and, if Seller is providing Replacement RA, the applicable Replacement RA product infonnation.
(c) Buyer Purchased Replacement RA. Following the RA Guarantee Date, if Seller does not provide Replacement RA in the full amount of the RA Shortfall Amount by the Notification Deadline, Buyer may, but shall not be required to, purchase Replacement RA in an amount up to the Shortfall Amount not provided by Seller for the applicable Shortfall Month ("Buyer Purchased Replacement RA"), by entering into purchase transactions with one or more third paities, including, without limitation, third paities who have purchased capacity from Buyer, so long as such transactions are done at prevailing mai·ket prices. Buyer shall use commercially reasonable effo1ts to minimize damages when procuring any Buyer Purchased Replacement RA.
If Buyer purchases any Buyer Purchased Replacement RA, Seller shall pay to Buyer an amount equal to the quantity of Buyer Purchased Replacement RA for the applicable RA Sho1t fall Month multiplied by the Capacity Replacement Price.
( d) RA Deficiency Amount Calculation. Following the RA Guarantee Date, if Seller does not provide Replacement RA in the foll ainount of the RA Sho1t fall Amount by the Notification Deadline, then for each RA Shortfall Month, Seller shall pay to Buyer an amount (the "RA Deficiency Amount") equal to the difference, expressed in kW, of (i) the Qualifying Capacity of the Facility, minus (ii) the Net Qualifying Capacity of the Facility that may be included in Supply Plans by Buyer, minus (iii) any Replacement RA that was included in the Showing Month for Buyer, (iv) minus any Buyer Replacement RA that was included in the Showing Month for Buyer (the "RA Shortfall Amount"), multiplied by the sum of the applicable CPUC Resource Adequacy penalty ainounts established by Decision 20-06-031 , as modified by any subsequent CPUC decisions, plus any applicable penalty amount or chai·ges imposed by the CAISO for a failure to meet the applicable Resource Adequacy Requirements.
3.9 CEC Certification and Verification. Subject to Section 3 .11 and in accordance with the timing set forth in this Section 3.9, Seller shall take all necessaiy steps including, but not limited to, making or suppo1t ing timely filings with the CEC to obtain and maintain CEC Ce1t ification and Verification for the Facility throughout the Delive1y Te1m, including compliance with all applicable requirements for ce1tified facilities set fo1th in the cunent version of the RPS Eligibility Guidebook (or its successor). Seller shall obtain CEC Precertification by the Collllllercial Operation Date. Within thi1ty (30) days after the Commercial Operation Date, Seller 29 shall apply with the CEC for final CEC Ce1iification and Verification. Within one hundred eighty (180) days after the Commercial Operation Date, Seller shall obtain and maintain throughout the remainder of the Delive1y Tenn the final CEC Ce1iification and Verification. Seller must promptly notify Buyer and the CEC of any changes to the info1mation included in Seller's application for CEC Ce1iification and Verification for the Facility.
3.10 California Renewables Portfolio Standard.
(a) Eligibility. Seller, and, if applicable, its successors, represents and waiTants that throughout the Delive1y Te1m of this Agreement that: (i) the Facility qualifies and is certified by the CEC as an Eligible Renewable Energy Resource as such tenn 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 waiTanty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable effo1is to comply with such change in law. [STC 6: Non-modifiable] As used in this Section 3 .10( a), "ce1iified by the CEC" means the Facility has received CEC Ce1iification and Verification.
(b) Transfer of Renewable Energy Credits. Seller and, if applicable, its successors, represents and waITants that throughout the Delive1y Tenn of this Agreement the renewable energy credits transfe1Ted to Buyer confo1m to the definition and attributes required for compliance with the California Renewables Po1ifolio Standai·d, as set fo1ih 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 waiTanty to be materially false or misleading, it shall not be an Event of Default if Seller has used collllllercially reasonable effo1is to comply with such change in law. [STC REC-1: Non-modifiable] (c) Tracking of RECs in WREGIS. Seller waiTants that all necessaiy steps to allow the Renewable Energy Credits transfe1Ted to Buyer to be tracked in WREGIS will be taken prior to the first delive1y under this Agreement. [STC REC-2: Non-modifiable]
3.11 Change in Law.
(a) The Pa1iies acknowledge that an essential purpose of this Agreement is to both provide Resource Adequacy Benefits that satisfy the requirements of the Resource Adequacy Rulings, and to provide renewable generation that meets the requirements of the California Renewables Portfolio Standai·d. Governmental Authorities, including the CEC, CPUC, CAISO, and WREGIS, may unde1iake actions to implement changes in Law. Seller agrees to use commercially reasonable effo1is to cooperate with Buyer with respect to any subsequently requested changes, modifications, or amendments to this Agreement needed to satisfy requirements of Governmental Authorities associated with changes in Law, including changes, modifications, or amendments to this Agreement to: (i) amend the definition of Environmental Attributes and Capacity Attributes, including ainendments to this Agreement to reflect any mandato1y contractual language required by Governmental Authorities; (ii) require submission of any repo1is, data, or other info1mation required by Governmental Authorities; or (iii) take any 30