Third-Party Programs
As mentioned in previous sections, SDCP is the lead portfolio administrator for the SDREN portfolio and will be responsible for soliciting and managing contracts, tracking performance, and making decisions to deliver on goals. Neither SDCP nor the County of San Diego will be directly implementing programs. Upon CPUC authorization of the SDREN, SDCP will issue solicitations for all programs and select third party implementers to design and deliver all of its 118
approved programs. All of the implementation responsibilities will be solely with the implementer.
Solicitation Strategy
As SDCP serves as the lead portfolio administrator responsible for procurement, SDCP’s procurement process will be followed for SDREN.
As a public agency, SDCP procurement processes are open and transparent and all contracts above $125,000 are reviewed and executed by the SDCP Board. Contract approvals are placed on Board agendas and discussed at public Board meetings that are subject to the Brown Act.
SDCP’s procurement policy61 establishes practices that facilitate efficient business operations and provide fair compensation and local workforce opportunities whenever possible within a framework of high quality, competitive service offerings.
The scope of solicitations will be based on the program cards included in this application.
Solicitations will consider any market changes since submitting the Portfolio Plan, including new legislation, new CPUC decisions and guidance, SDG&E programs, or new programs such as the Equitable Building Decarbonization DI Program. All programs included in this application will be solicited within six months of SDRENs authorization date.
Third-Party 2024-2027 Solicitation Schedule
SDREN anticipates releasing Requests for Proposals (RFPs) for the residential, public, workforce education and training, and codes and standards sectors in Q4 2024 and for the commercial sector in Q1 2025.62 This is subject to change based on CPUC approval timelines and other unforeseen factors.
Risk Distribution
SDREN will follow processes and protocols established for SDCP including the following to mitigate and distribute risk across its portfolio:
● Procurement Policy establishes administrative procurement practices that facilitate efficient business operations and provide fair compensation and local workforce opportunities whenever possible within a framework of high quality, competitive service offerings
● Supplier Diversity protocols to encourage diverse businesses to seek contracting opportunities with us. SDCP is committed to providing resources on the Supplier Diversity Program to ensure eligible vendors have the awareness and support they need to pursue certification. SDCP encourages all eligible vendors to seek certification through the CPUC Supplier Clearinghouse. Per California Senate Bill 255 (2019), Community 62 Assumes SDREN is authorized ahead of Q3 2024.
61 SDCP's procurement policy can be viewed here:
https://sdcommunitypower.org/wp-content/uploads/2022/12/SDCP-Procurement-Policy_Adopted_2022.07.28.pdf. 119
Choice Aggregators (CCAs) like SDCP are required to report to the CPUC on spending with diverse businesses, as defined by CPUC General Order 156. ● Inclusive and Sustainable Workforce Policy demonstrates SDCP’s commitment to inclusion extends to its supply chain. Where appropriate, and consistent with applicable law and other SDCP policies, including but not limited to its Procurement Policy, to support a diverse and inclusive supply chain, SDCP will strive to:
○ Use local businesses and provide fair compensation in the purchases of services and supplies.
○ Proactively seek services from local businesses and from businesses that are taking steps to protect the environment.
○ Engage in efforts to reach communities of concern, to ensure an inclusive pool of potential suppliers.
○ Collect information from vendors and project developers on their status as a woman, minority, disabled veteran, and/or LGBT business enterprise. ○ Encourage reporting from project developers and vendors on inclusivity in business staff.
○ Be transparent about these practices and lessons learned. ○ Provide contact information for staff who can answer questions about this Policy.
Additionally, SDREN activities as it relates to its risk distribution of third-party programs fall under oversight of SDCP’s Finance and Risk Management Committee (FRMC), a standing committee of the SDCP Board, subject to the Brown Act, whose purpose, as stated in section
5.10.2 of SDCP’s JPA Agreement includes providing input and oversight on matters related to financial policies and procedures and risk management policies and procedures.
Incorporation of Input on Current Solicitation Practices This is not applicable to non-IOU PAs.
Supplier Diversity
SDCP is subject to the requirements of CPUC General Order 156 regarding supplier diversity. To increase the diversity of contractors and services that are utilized by SDREN, SDCP plans to post SDREN solicitations to the Supplier Clearinghouse portal which is visible to certified businesses.
While SDCP, as a public agency, is subject to Proposition 209 constraints that prohibit preferential contracting based on race, sex, and ethnicity, it conducts outreach at events such as the CPUC Small Business Expo and within its own community to educate suppliers on the benefits of certification.
Per California Senate Bill 255 (2019), community choice aggregators (CCAs) like SDCP are required to report to the CPUC on spending with diverse businesses, as defined by CPUC General Order 156.63 Through the statewide Supplier Diversity Program, established by General Order 156 from the California Public Utilities Commission (CPUC), the state aims to connect an 63 SDCP’s Annual Reports can be found here: https://sdcommunitypower.org/supplier-diversity/ 120
increasing portion of these utility expenses with CPUC-certified minority-owned, women-owned, disabled veteran-owned, and/or LGBTQ-owned businesses. Certified suppliers are listed in the publicly accessible Supplier Clearinghouse database. Many utilities, including CCAs like SDCP, utilize the Clearinghouse to identify potential bidders for supplier solicitations.
Public Utilities Code Section 366.2(m) requires certain community choice aggregators, including SDCP, to annually submit to the CPUC: (1) a detailed and verifiable plan for increasing procurement from small, local, and diverse business enterprises; and (2) a report regarding its procurement from women, minority, disabled veteran, and LGBT business enterprises. To assist SDCP with its reporting obligations under Public Utilities Code Section 366.2(m) and with evaluating its supplier outreach and other activities, proposers that are awarded the contract will be asked to voluntarily disclose their certification status with the CPUC Clearinghouse, as well as their efforts to work with diverse business enterprises, including WBEs, MBEs, DVBEs, and LGBTBEs.
Continued Stakeholder Engagement on Solicitation Process This is not applicable to non-IOU PAs.
Statewide Programs
As a REN, SDREN does not anticipate management of statewide programs, but looks to support existing and future statewide programs. For example, SDREN plans to support or co-brand with BayREN’s statewide program if it is deemed appropriate. SDREN programs will also channel projects and customers to statewide programs where applicable. As another example, if the public sector programs identify water or wastewater pumping or process optimization project opportunities, the program will coordinate with the statewide WISE program. Current applicable statewide programs where SDREN plans to coordinate are listed under coordination strategies for each sector.
Assessment and Mitigation of Risk from Portfolio Diversity As SDCP is the lead Portfolio Administrator responsible for procurement and contract management, SDREN will follow all processes and protocols in place for SDCP, including compliance with SDCP’s Procurement Policy, SDCP’s Supplier Diversity protocols, and SDCP’s Inclusive and Sustainable Workforce Policy.
As a public agency, SDCP is subject to the Brown Act, ensuring all SDREN procurement and contracting by its nature is open and transparent. In compliance with SDCP’s procurement policies, SDREN contracts above $125,000 must be approved by the SDCP Board of Directors before final execution. For contracts below $125,000 informal bidding procedures will be applied.
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Contract Management
SDCP is the lead agency in the administration of SDREN and will be responsible for contract management. Contract administration and management roles and responsibilities including monitoring, tracking, managing performance, and invoice processing will be described in the Memorandum of Understanding that will be executed between SDCP and the County of San Diego upon CPUC approval of SDREN and approved by their respective Boards. SDREN will deploy effective contract management practices to ensure compliance, meeting critical deadlines, and staying within approved budgets. All contracts will adhere to SDCP procurement policies, SDCP Supplier Diversity protocols and SDCP’s Inclusive and Sustainable Workforce Policy, utilize approved language and templates, and comply with CPUC guidelines.
Portfolio Coordination
Coordination with Other PAs
SDREN will operate in a territory that only overlaps with one existing program administrator, SDG&E. Both SDCP and SDG&E have demonstrated commitment to maintaining regular and ongoing coordination, as evidenced by the Letter of Commitment provided in Exhibit 3 - Appendices - Appendix X: Letters of Commitment.
● SDCP facilitates a bi monthly San Diego region CCA and SDG&E program coordination call to share information and to coordinate on customer-facing programs to ensure customers are well served.
● Meetings began in February 2023 and are ongoing. SDCP staff provide regular updates on REN developments.
● Program coordination calls with SDCP and SDG&E outside of bi monthly program coordination calls began in October 2023.
● Targeted meetings with SDGE sector specific teams occurred in October – November 2023.
SDREN and SDG&E are both committed to coordinating their respective programs, including all third party programs (3PP). Together, they aim to minimize duplicative offerings and ensure SDREN complements and supplements SDG&E and SDG&E’s 3PPs while serving the purpose of the RENs.
SDG&E, in its recent Business Plan Filing and Portfolio Application, emphasized its commitment to coordinating with regional energy networks:
● In the SDG&E Portfolio Application under Codes and Standards, on page 123, SDG&E notes that they will “partner and support collaboration with RENs to educate others on C&S activities.”
● Under Portfolio Coordination on page 237, SDG&E notes: “...in the event that a Community Choice Aggregation (CCA) or Regional Energy Network (REN) EE PA is 122
approved in SDG&E’s service territory, SDG&E will coordinate program offerings with them to avoid customer confusion and duplication of efforts...SDG&E will partner with these entities to effectively deliver Energy Efficiency programs to our customers in our shared territory. In the case that a CCA is looking to start offering EE programs in its geographic location, SDG&E will support the interested CCA by sharing SDG&E’s portfolio of programs, policies affecting EE, goals/metrics and overall administration of the EE portfolio. This will ensure that the CCA has the tools and support necessary to be successful.”
In alignment with the JCM requirements that originated in D.18-05-041 and were refined in D.21-05-031 and D.23-06-055, SDREN will coordinate closely with SDG&E to develop a Joint Coordination Memo (JCM) to file within 60 days of each true-up and mid-cycle advice letter filing. The JCM will outline regular and ongoing coordination efforts between SDG&E and SDREN.
SDREN will maintain coordination with SDG&E ahead of SDREN’s next four-year Portfolio Application. The primary objective behind this coordination is to maximize benefits to the community and customers. Through this approach, SDREN and SDG&E will work in the best interest of the participating customers by providing complementary tools that help bridge gaps in meeting the region’s climate goals and avoid customer confusion.
As a new REN, SDREN plans to work closely with the other RENs through CalREN, a new statewide collaborative for California’s five existing RENs. CalREN’s mission centers on fostering collaboration and unity amongst California’s regional energy networks. CalREN provides a venue for RENs to work together to share resources and knowledge, use ratepayer funds cost-effectively, avoid duplicating services and customer confusion, speak with a unified voice in stakeholder engagement processes, and amplify their shared interest in issues that affect their communities. Together, California’s RENs can leverage local knowledge, develop best practices, and conduct regulatory and legislative advocacy with a unified voice.
Additionally, SDREN looks forward to collaborating with all existing program administrators through various statewide initiatives and Project Coordination Groups (PCGs). Active participation in these statewide groups will enable SDREN to stay informed about emerging best practices as it emerges as a new program administrator. These groups help to create efficiencies through sharing of resources towards common goals and also promote statewide consistency.
SDCP will join the California Energy Efficiency Coordinating Committee (CAEECC) as a program administrator coordinating committee member once authorized. In anticipation of becoming a program administrator, SDCP has already started participating in regular CAEECC meetings and is participating in joint program administrator calls regarding metrics.
How SDREN’s Portfolio is Complementary With Other PAs in Service Territory SDREN has completed a comprehensive review of SDG&E’s 2024-2031 Business Plan, 2024-2027 Portfolio Application, solicitation schedule, and available Implementation Plans of existing programs. Our approach involves closely monitoring Advice Letters and actively participating in 123
public webinars for programs that are in the process of closing or are at the IP draft stage. This proactive strategy allows us to stay abreast of the latest developments in SDG&E's programs.
As previously mentioned, SDREN held meetings with SDG&E during the development of the SDREN Business Plan and Portfolio Application. SDG&E invited EE staff leading the sectors/segments identified by SDREN to provide updates on solicitation plans and review draft SDREN programs. SDCP also held sector-specific coordination meetings with the SDG&E commercial, codes and standards, WE&T, public, and residential sector and appropriate EE program team members to discuss any comparable programs, potential gap filling activities, and anticipated coordination strategies at the individual program level. This gave SDG&E an opportunity to ask any clarifying questions and voice any anticipated concerns with future program delivery. The matrix developed in coordination with SDG&E is listed in Exhibit 3 - Appendix X: SDREN SDG&E Program Matrix. The specific strategies discussed were also incorporated into the sector-specific coordination strategies outlined in earlier sector strategy sections. The goal of these interactions was to ensure SDREN’s proposed programs are designed to complement SDG&E’s planned and existing programs.
Given that several solicitations within the SDREN targeted sectors are either ongoing or yet to be developed, SDREN remains flexible in its approach. After approval of the Business Plan, we plan to reevaluate certain programs and will make adjustments prior to soliciting programs to third parties. In situations where program services appear to be similar or overlap between SDREN and SDG&E, SDREN will market these programs to HTR customers not targeted by the SDG&E program.64, 65
The table below offers a sector-by-sector breakdown of how SDREN's portfolio complements SDG&E's, illustrating the strategic alignment and cooperation between the two Program Administrators to maximize benefits for the region.
Table 45. SDREN Summary of Complementary Offerings by Sector SDREN Sector How it complements SDG&E’S portfolio
Commercial ● Fill geographic and service gaps with SDGE&’s programs, with a focus on small businesses and corner stores.
65 D. 23-06-055 Pg 89: we expect programs offered by different PAs will not significantly overlap, except for programs intended to serve hard-to-reach customers. We maintain a preference for PAs to work collaboratively not only to minimize duplication in non-hard-to-reach customer populations but importantly to strive toward effective regional strategies and complementary program offerings; to be clear, PAs should communicate regularly in the course of administering their portfolios and preparing applications for future cycles; this regular communication is particularly important in light of the IOUs’ solicitations, which could result in the launch of new programs at any time and potentially implicate existing programs offered by other PAs. 64 D. 23-06-055 Pg 88: The Commission also agrees with providing further direction regarding REN programs that only meet the criterion of serving hard-to-reach customers (and not the gap filling or pilot criteria confirmed by D.19-12-021). Such programs must be designed to target, and must market exclusively to, hard-to-reach customers or specific hard-to-reach customer segments. REN whole building multifamily residential programs that only meet the hard-to-reach criterion should target their marketing efforts to properties in which they can reasonably infer the majority of tenants are hard-to-reach customers; to facilitate coordination, we will require RENs to describe in their JCMs how they will identify customers or buildings to target marketing.
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● Customer engagement representatives will direct customers to programs that best suit their needs, including SDG&E programs
● Ongoing discussions with SDG&E as they finalize their commercial portfolio
Codes & Standards ● Additional support for electrification mandates ● Customized educational solutions for public agency building departments
● Coordinate with SDG&E to develop complementary codes & standards and subsequent educational strategies to increase regional compliance and advance state goals
WE&T ● Coordinate with SDG&E on potential internships and job opportunities
● Build upon curriculum offered in statewide programs by offering community college courses (CTE)
Public ● Coordinate targeting of K-12 schools to address gap left by discontinued SDG&E KEEP program
● Refer participating Tribes to SDG&E programs as appropriate ● Develop programming that addresses gaps for Tribal projects that do not qualify for SDG&E programs
Residential ● Coordination with ESA - multifamily offering to support multifamily facilities only partially covered by ESA.
● Coordinate with the ESA program to direct customers to program when eligible and measures will complement ESA
measures.
● Coordination with SDG&E residential equity program
(anticipated launch Q3 2024) to identify complementary
measures
How SDREN’s Portfolio Mitigates Duplication of Efforts
As described in the previous sections, SDREN’s approach to portfolio design places a strong emphasis on complementing and coordinating with SDG&E’s portfolio. This alignment extends beyond design and planning; SDREN remains committed to ongoing collaboration and coordination following authorization to prevent duplication of efforts, customer confusion, and to ensure cost efficiency. Our actions during the development of this Portfolio Application reflect this commitment.
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The figure below summarizes actions SDREN took during the development of the BP and what actions are planned following authorization.
Figure 12. Activities to mitigate duplication of efforts between SDREN and SDG&E How SDREN Will Coordinate Efforts With Other Demand-Side Programs SDREN recognizes the importance of a coordinated approach with other demand-side programs to ensure maximum energy efficiency and customer benefit. Our coordination efforts include joint marketing initiatives, the stacking of incentives, and comprehensive customer education.
SDREN’s commitment to coordination is integral to meeting our portfolio goals of advancing decarbonization, providing robust EE services that improve outcomes for underserved and hard-to-reach communities, and accelerating the clean energy economy through workforce opportunities. Our coordination plans entail a broad spectrum of strategies aimed at ensuring that demand side programs are interconnected and complementary, maximizing the benefits to our customers. The following table outlines the planned coordination and integration strategies:
Table 46. Coordination and Integration Strategies for Other IDSM Offerings Other IDSM offerings Coordination and Integration Strategies 126
IRA - Tax Credits, rebates,
grants, & loans
● Increase customer awareness through education and
outreach about offerings customized for customers by
segment and program.
● Support customers with the stacking of rebates with
SDREN offerings.
● Offer support services to customers to take advantage of tax credits, tax deductions, and grants where feasible. ● Provide technical assistance and guidance to customers on how to qualify and utilize IRA funding.
● Include IRA opportunities in financial analyses for
customers.
TECH Clean California ● Coordinate on workforce development efforts. ● Offer education and marketing; seek co-branding
opportunities.
● Develop and integrate strategy for stacking of offerings and incentives.
● Integrate C&S focus for heat pump permitting statewide efficiency efforts.
California Equitable
Decarbonization Direct
Install Program
● Coordination with selected Southern California program administrators.
● Offer local marketing and outreach support.
● Stack rebates and other offerings for customers.
Energy Savings Assistance
Programs - Multifamily &
Single Family
● Multifamily: Assist eligible customers in accessing the program and facilitate stacking of incentives for
non-deed restricted units.
● Single-family: Assist eligible customers in accessing the program.
SDG&E Demand Response
Programs66
● Base Interruptible Program (SDG&E proposes to retire
this program in 2024)
● Capacity Bidding Program (SDG&E proposes to retire the traditional CBP product due to lack of interest while
retaining CBP Elect products)
● Capacity Bidding Residential Pilot
● AC Saver Program (SDG&E proposes to rename program
"Smart Energy Program" and expand program beyond
ACs)
66 Application of SDG&E Requesting Approval of Its Demand Response Portfolio for Bridge Year 2023 and Program Years 2024-2027, Prepared Direct Testimony of E Bradford Mantz - Chapter 1B on Behalf of San Diego Gas and Electric Company, May 2, 2022. As of the writing of this document, the CPUC has not adopted a final decision on SDG&E’s Demand Response portfolio for Program Years 2024-2027.
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● Heat Pump Water Heaters
● Emergency Load Reduction Program (ELRP)
Self-Generation Incentive
Program (SGIP)
● Deliver marketing and education to customers.
● Potential to support customers applying for incentives (eligible through IDSM funding).
SDCP programs ● Residential Solar and Storage Program
● Solar for Our Communities green tariff program
● Commercial Peak Load Reduction Pilot
● Community Clean Energy Innovation Grant Program
● DAC-SASH Enabling Roof Repair Pilot
● Managed EV Charging Pilot
Clean Energy Alliance
Programs
● Support marketing of programs to customers.
● Encourage and offer stacking of offerings where
appropriate.
EV Charger Programs
(CALeVIP’s Golden State
Priority Project, SDG&E
Power Your Drive, etc.)
● Offer education and marketing of programs to
customers.
● Provide support to access incentives (eligible through IDSM funding).
Market Transformation ● General collaboration with Market Transformation.
Administrator and initiatives to ensure program funds
and efforts are aligned.
● Collaborate to support inclusion of currently
non-cost-effective electric technologies in programs in support of transition to economic viability and broader adoption through programs.
● Support strategies related to building performance and grid interactive buildings.
● Explore opportunities to collaborate for C&S.
● Integration into WE&T programs.
Stakeholder Engagement in the Development of This Application In response to the CPUC requirements of stakeholder feedback and SDREN’s desire to have effective and community-centric programs, SDREN conducted robust stakeholder feedback processes. The region's previous efforts to start a REN were examined and considered upon partaking in this effort. Key stakeholders include regional and community organizations as well as energy efficiency stakeholders across the state. A majority of feedback was overwhelmingly positive with support for the formation of an SDREN, along with the proposed structure, values, 128
strategies, and programs. An overview of this engagement is included in Exhibit 1 - SDREN Business Plan Testimony (2024-2031), Stakeholder Engagement.
In total, SDREN consulted with stakeholders in over 60 meetings throughout the development of the Business Plan. Business Plan updates and calls for feedback were also presented in 8 public meetings. In both instances, feedback was encouraged and the process was communicated to ensure adequate time and information for review. All stakeholder feedback, including SDREN’s response, can be seen in Exhibit 3 - Appendix X: Stakeholder Feedback.
Feedback collected during this time period was generally in support of bringing REN resources to the region.
Evaluation, Measurement, and Verification
Summary of Planned EM&V Studies and Activities
SDREN is committed to actively participating in the evaluation, measurement, and verification (EM&V) process to ensure the effectiveness and efficiency of its energy programs. We recognize the importance of collaboration with various stakeholders to enhance the EM&V framework and contribute to well-informed decision-making on both SDREN and the energy efficiency portfolios across program administrators. Our approach to EM&V aligns with the collective efforts of the energy community in California. We are committed to the following:
Engagement and Collaboration: SDREN plans to work closely with CPUC staff, IOUs, and other PAs, with a particular focus on coordinating with other fellow RENs. We will actively participate in the development of CPUC EM&V Roadmaps and engage in various EM&V studies and working groups to ensure alignment with statewide objectives.
Contribution to REN Studies: SDREN recognizes that there are common needs and objectives among RENs. We are committed to joining and contributing to studies and activities that are relevant to RENs, ensuring that our actions are in harmony with the regional and statewide efforts.
Built-In Data Collection: In line with our commitment to sound program evaluation, SDREN plans to incorporate data collection mechanisms within each of our energy programs. This approach will facilitate the collection of valuable data needed for program performance assessment and the broader EM&V process.
Active Participation in EM&V Planning: We will take an active role in the planning and implementation of EM&V activities. This includes contributing to the design and execution of measurement and verification plans to assess the effectiveness of our energy programs.
By embracing these principles, SDREN will contribute to the continuous improvement of the EM&V framework and ensure that our energy programs deliver the expected benefits to the community and the environment. We are dedicated to maintaining an open and collaborative approach, working hand-in-hand with the CPUC, IOUs, and fellow PAs to enhance the EM&V process for the benefit of all stakeholders.
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Planned EM&V Studies: Following the approach outlined above, SDREN will build out a more comprehensive plan for EM&V studies following authorization. Some initial planned activities include:
● Leading a SDREN unique value metrics and goals study as described in Key Metrics and Outcomes section.
● Supporting a study to set goals for the market support and equity segment indicators.67 ● Coordinating with existing workforce assessments to determine gaps that could be supported through SDREN EM&V efforts towards prioritization of workforce development for electrification.
SDREN’s Budget Allocation and Justification
SDREN has applied an additional 4% budget allocation on top of its portfolio budget request to set aside for EM&V activities. This equates to a total EM&V budget of $4,779,777. Pursuant to Decision 16-08-019, the total EM&V budget split between SDREN as the program administrator is at 27.5% and CPUC at 72.5%.68
Cost and Cost Recovery
San Diego Gas and Electric is the only overlapping program administrator with SDREN. Our recommendation is 100% of the funding and cost recovery come from SDG&E as the fiscal agent. This approach is also consistent with the Letter of Commitment signed by SDG&E.
Summary of Costs at Portfolio-level
San Diego Regional Energy Network built a program-level budget to deliver on the priorities of the region. As the budget was developed, inflation and program ramp up costs were considered.
SDREN also assumed that programs would not launch until late 2024, therefore 2024 budgets are much smaller than future years. Detailed budget breakdowns are included in the SDREN 2024-2031 EE Application Excel Sheets, in accordance with CPUC Decision 21-05-031.69 The below table summarizes portfolio-level costs.
Table 47. Summary of Portfolio-Level Costs 2024-2027
Sector Admin M&O Direct
Implementation
- Non Incentive
Direct
Implementation
- Incentive
Total
69 D.23-06-055, OP5.
68 D.16-08-019, pg. 81.
67 D.23. , OP. 25 “The portfolio administrators (PAs) shall set aside at least $1 million from their collective evaluation, measurement, and verification (EM&V) budgets and shall select one PA from among them to hire a vendor or vendors to conduct a study to set goals for the market support and equity segment indicators. By no later than March 1, 2025, the PAs must submit a joint Tier 3 advice letter…”.
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Commercial $3,479,004 $2,087,402 $14,052,495 $15,171,137 $34,790,038 Cross Cutting:
WE&T
$1,922,543 $1,153,526 $16,149,357 $0 $19,225,425
Cross Cutting:
C&S
$732,396 $439,437 $6,152,122 $0 $7,323,955
Public $2,325,001 $1,395,001 $12,823,341 $6,706,668 $23,250,011 Residential $3,490,500 $2,094,300 $10,340,140 $18,980,060 $34,905,000 EM&V $4,779,777 $0 $0 $0 $4,779,777
Total $16,729,220 $7,169,666 $59,517,456 $40,857,865 $124,274,206 SDREN’s Approach to Classification of Unspent Funds
San Diego Regional Energy Network will follow all procedures and guidance from the CPUC Energy Efficiency Policy Manual and Energy Division in coordination with SDG&E on classification and handling of “committed” funds. SDREN will apply the policy from the CPUC EE Policy Manual, which is quoted below:70
“Committed funds are defined as those associated with individual customer projects and/or are contained within contracts signed during a previous program cycle and associated with specific activities under the contract. Committed funds are not considered “unspent funds,” and need not be spent during that program cycle so long as there is an expectation that the activities will be completed and that the committed funds are spent to complete the activities for which they were committed. Savings will be counted in the cycle in which the project is completed (D.12-11-015, pg. 92)." SDREN has reviewed SDG&E’s approach to classification of “committed” funds in their Portfolio Application71 and will apply best practices from their approach to committed funding as SDREN initiates operations.
71 SDG&E EE Portfolio Plan Testimony (2024-2027) - Exhibit 2, pg. 254 “As part of the preparation for closing out the program year, SDG&E analyzes each program to identify existing contracts or approved program expenditures for which the underlying contracted service or program activity will be completed after December 31 of the program year. SDG&E retains copies of the contracts, agreements, engineering documentation, subsequent invoices, and any other relevant documentation that supports the identification of a future expenditure as committed to a prior program year and therefore not applied to reduce revenue recovery of a future program year. SDG&E monitors the status of committed funds through the future payment of the program expenditure. SDG&E does not propose any changes to the treatment of unspent, uncommitted funds for program years 2024-2027.”
70 CPUC Energy Efficiency Policy Manual, Version 6, April 2020, Section II. 6. 131
SAN DIEGO COMMUNITY POWER
Staff Report – Item - 12
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Laura Fernandez, Director of Regulatory & Legislative Affairs Aisha Cissna, Senior Policy Manager
Stephen Gunther, Senior Regulatory Analyst
Via: Karin Burns, Chief Executive Officer
Subject: Update on Regulatory and Legislative Affairs
Date: December 14, 2023
--------------------------------------------------------------------------------------------------------------------
RECOMMENDATIONS
Receive and file the update on regulatory and legislative affairs.
BACKGROUND
Staff will provide regular updates to the Board of Directors regarding SDCP’s regulatory and legislative engagement.
ANALYSIS AND DISCUSSION
A) Regulatory Updates
Proposed Decision Granting Petition for Modification of Decision (D.)22-05- 015 on Modified Cost Allocation Mechanism (MCAM)
Background of D.22-05-015
To address the potential for electricity system resource adequacy shortages, the California Public Utilities Commission (“CPUC”) issued Decision (D.)19-11-016 within the Integrated Resource Planning (“IRP”) process on November 7, 2019.
This Decision directed load serving entities (“LSE”) to procure 3,300MW of system-level resource adequacy (“RA”) capacity for 2021-2023 and ordered cost recovery through the Modified Cost Allocation Mechanism. However, after D.19-11-016, there was significant load shift to CCAs from the investor-owned utilities (“IOU”), including load shift resulting from the formation of SDCP and five other new CCAs.
As such, the CPUC issued D.22-05-015 authorizing a one-time provision for LSEs with new load after 2019 to purchase their customers’ share of RA capacity.
Joint CCA Petition for Modification
D.22-05-015 states that authorization to purchase RA capacity is, “a one-time provision that shall be based on the load of the non-IOU LSE, as mutually agreed between the IOU and the non-IOU LSE, as of the effective date of this decision and shall not include any charges for time periods prior to the effective date of this decision.” Both SDCP and Clean Energy Alliance (“CEA”) experienced load growth after the date of the Decision and interpreted the order to allow the use of its 2023 Year Ahead revised load, which was filed with the CPUC shortly before the issuance of D.22-05-015 and is representative of a mutually agreed upon load share. However, within negotiations SDG&E was unwilling to contract for amounts other than SDCP and CEA’s respective load share at the time of the Decision.
Because a resolution could not be reached in bilateral negotiations, on October 28, 2022, SDCP and CEA (Joint CCAs) jointly filed a Petition for Modification (“PFM”) of D.22-05-015 to seek clarity and guidance from the CPUC. Specifically, the requested modification would allow for the use of 2023 Year Ahead load forecasts for D.19-11-016 resource allocations.
On November 28, 2022, SDG&E, Southern California Edison (“SCE”), and the California Choice Energy Authority filed responses to the Joint CCA’s PFM. Upon request, the Joint CCAs were granted permission by the ALJ to reply to the responses, which were filed on December 8, 2022. In addition, the SDCP met with CPUC Energy Division staff and held an Ex Parte meeting with Commissioner advisors to explain the need for the PFM and answer any questions.
Proposed Decision Denying the PFM and Withdrawal
On August 24, 2023, the CPUC issued a Proposed Decision denying the Joint CCA PFM. In its denial of the PFM, the Commission explained that the one-time provision was designed to balance the inequity created by the uncertainty of the cost recovery mechanism between the passage of D.19-11-016 and D.22-05-015, and that the purchase provision was not intended to extend beyond the time when D.22-05-015 was issued.
The Joint CCAs filed opening comments on September 13, 2023, reiterating previous arguments and quantifying the potential impact on ratepayers.
Specifically, the Joint CCAs argued that by denying the PFM:
x Customers would pay twice for the same capacity, costing them at least $54 million over 12 years.
First: replacement capacity through their CCA generation rates (conservatively $54 million)
Second: SDG&E projects 880 MW of Unsold RA, meaning these same customers will continue to pay for D.19-11-016 procurement ($41 million, if all is left unsold)
On September 18, 2023, reply comments were filed by SDG&E and the California Choice Energy Authority. In addition, the Joint CCAs held an Ex Parte meeting with Commission staff on September 14, 2023, and continued to educate policymakers about the potential negative impact the Proposed Decision would have on ratepayers.
The CPUC was scheduled to vote on the Proposed Decision on October 12, 2023, but withdrew the item from the agenda on October 9.
Proposed Decision Granting the PFM
On November 9, 2023, the CPUC issued a new Proposed Decision granting the Joint CCA PFM. The Proposed Decision concurred with the Joint CCA arguments, noting it is “reasonable to base the volume of resource adequacy capacity available to them for purchase on a one-time basis, according to D.22-05-015, on the load that was expected to be served in 2023.”
Ultimately, if adopted, the Proposed Decision will allow SDCP to purchase an additional 36 MW of system RA capacity at the Market Price Benchmark beginning for 2025 resource adequacy requirements and continuing throughout the life of the resource adequacy contracts, thus saving ratepayers tens of millions of dollars. (At the time of filing the opening comments on September 13, 2023, the Market Price Benchmark was $7.39/kW- month – this has since been updated to $14.37 – meaning that the value of this decision has increased from a savings of $54 million to well over $100 million for CCA ratepayers).
Opening comments were filed on November 29, 2023, and the Joint CCAs filed reply comments on December 4, 2023. (The reply comments are Attachment A to this staff report). The Proposed Decision is expected to be voted on during the December 14, 2023, CPUC Business Meeting.
Resource Adequacy (RA)
On October 12, 2023, the CPUC voted to open a new Order Instituting Rulemaking (OIR) to Oversee the Resource Adequacy Program, Consider Program Reforms and Refinements, and Establish Forward Resource Adequacy (RA) Procurement Obligations (see page 22 of the regulatory and legislative staff report for the October 2023 meeting of the Community Advisory Committee for an outline of the OIR).
In November, SDCP staff worked with CalCCA to file opening and reply comments on the OIR to advocate for critical issues to be included in the scope of the new rulemaking, R.23-10-011. Specifically, CalCCA’s comments included the following arguments:
x Background:
o The RA supply and demand balance makes it difficult, if not impossible, for every LSE to meet its RA requirements
o The shortage of RA has capacity prices at all-time highs x Recommendations for Scope Prioritization
o The Commission should prioritize the RA compliance and penalties scope item given the current lack of RA supply making it more difficult for LSEs to comply with their requirements and more likely LSEs will need to pay exorbitant prices to obtain scarce supply o The Commission should prioritize 24-Hour Slice-of-Day Framework scope item to allow time to resolve any outstanding issues identified by Energy Division or Stakeholders prior to the first Slice-Of-Day compliance year o The Commission should include a revisit of the CPE Model within the scope of this proceeding because the current model has produced more deficiency in local procurement than when LSEs had individual obligations
o The Commission should revisit the maximum Non-Resource Specific RA Bid Price in light of new information about RA import trends within California and capacity trends West-Wide
o The Commission should prioritize the exploration of a UCAP counting methodology and expand this scope item to include an assessment of the Counting Rules for Hydroelectric resources to ensure RA capacity is not stranded during Above-Normal hydro years
A Prehearing Conference was held on November 17, 2023. SDCP staff will continue to closely track and engage in this proceeding.
Energy Resource Recovery Account (ERRA) Forecast Proceeding Update On November 27, 2023, the CPUC issued a Proposed Decision (“PD”) in the ERRA Forecast proceeding. If approved, the PD would adopt SDG&E’s updated 2024 revenue requirement. The PD also adopts SDG&E’s Electric Sales Forecast for 2024, GHG Allowance Return Rates, Power Charge Indifference Adjustment (“PCIA”) rates, rate components for the Green Tariff Shared Renewables Program, and MCAM rates.
In this proceeding, SDCP along with CEA had argued in briefing that SDG&E should be directed to adopt a forecasted 2024 RA sales volume equal to the average of actual RA sales recorded in 2023 to date. The PD agrees with SDCP and CEA and indicates that SDG&E should revise its 2024 RA sales forecast using the average of actual RA sales recorded in 2023 to date. This will mean a reduction in PCIA portfolio costs of $36.7 million, the vast majority of which will go to CCA customers as a benefit. This reduction in costs would show up in rates in January 2024.
Comments on the PD were filed December 4, and reply comments were filed December 7. A final decision expected to be adopted by December 14, 2023.
Net Billing Tariff Update: CPUC Decision Addressing Remaining Proceeding Issues
Background
In December 2022, the CPUC adopted the net billing tariff (“NBT”) as the successor to the net energy metering (“NEM”) tariff. The NBT is structured to incentivize battery storage, increase dispatch of renewable energy during times of peak demand, and reduce cost-shift onto non-participating customers. The NBT compensates rooftop solar customers at the Avoided Cost Calculator (“ACC”) rate which equates to customers receiving approximately 80% less for their exports to the grid than they received under NEM.
On November 16, 2023, the CPUC adopted a decision speaking to the remaining issues in the proceeding, including consumer protections, customer billing presentation improvements, implementation of prevailing wage requirements for contractors installing rooftop solar systems, evaluation principles for the NBT, and aligning the existing virtual net energy metering (“VNEM”) tariff and net energy metering aggregation (“NEMA”) subtariff with NBT. The successor VNEM tariff is termed the “Virtual Net Billing Tariff” and the successor NEMA subtariff is termed the “Aggregation Subtariff”. Together, VNEM and NEMA customers constitute less than 2% of total SDCP accounts.
Key outcomes from this decision are detailed below.
Key Changes: Virtual Net Energy Metering
VNEM is a program largely utilized by multi-family properties to be compensated for solar production. It is distinct from traditional NEM because the electricity doesn't flow directly to any tenant meter but feeds directly back onto the grid. The intent of VNEM is to help tenants receive the direct benefits of the building's solar system, rather than all the benefits going to the building owner.
Under the Virtual Net Billing Tariff (“VNBT”), customers will be compensated for excess production based on the Avoided Cost Calculator (“ACC”) values, as is the case under NBT. While the ACC rates are vastly lower than the current export compensation rate, one notable change between the proposed decision and adopted decision is that residential VNBT customers’ self-generation will be recognized. Under the previous proposal, customers would be required to buy all of their energy from the utilities at full retail rates, even if some of that energy was being generated on their own rooftop. Additionally, it would have required customers to sell all their generation to the utilities at the ACC rate, even if some of that energy was being used by tenants in real time. This outcome makes the successor tariff slightly more economical for VNBT customers who are renters, a customer class that is predominantly lower income.
The decision also adopted the ACC Plus glide path for VNBT residential customers, which is the same as the structure adopted for the NBT. Accordingly, nonresidential and SDG&E VNBT customers are not eligible for the ACC Plus.
For imports, residential VNBT customers can enroll in any eligible time-of-use (“TOU”) rate, and non-residential customers can enroll in any currently available rate schedule. VNBT customers can add storage to their existing system without altering their tariff status and can operate their systems, including storage devices, to serve onsite load during planned or emergency grid outages. Grid charging of onsite batteries is prohibited; however, the decision directs a process to develop an approach to allow grid-charging of batteries ahead of outages.
The SOMAH (Solar on Multifamily Affordable Housing) and MASH (Multifamily Affordable Solar Housing) tariffs are similar to the VNEM tariff and were established to help incentivize solar production on low-income multifamily dwellings. The CPUC opted to continue these tariffs as-is.
The sunset date for the current VNEM tariff is 11:59 p.m. on February 13, 2024.
Full implementation of the VNBT will occur on March 31, 2025. Customers who sign-up for VNBT after the sunset date will be served on the VNEM tariff until full implementation of VNBT occurs. In the decision establishing NBT, the legacy period for VNEM customers was reduced to 9 years for customers enrolling in the tariff after April 15, 2023. Customers currently enrolled in VNEM retain their 9-year legacy period and will not be transitioned to the new tariff until that legacy period ends.
Key Changes: Net Energy Metering Aggregation
NEMA is designed to benefit a single customer with multiple eligible meters on the same property, or an adjacent or contiguous properties. It is often used by agricultural customers and municipalities. Changes to NEMA under this decision are largely the same as those made to VNEM, with differences noted below.
Previously, NEMA customers did not receive net surplus compensation (“NSC”).
Under the Aggregation subtariff, customers will now receive NSC if their generation exceeds consumption at the end of the year. Residential customers taking service on the Aggregation subtariff are required to enroll in highly differentiated TOU import rates, while non-residential customers can take service on any available TOU rate. No netting is allowed under the Aggregation subtariff; however, this will not prevent self-consumption.
The sunset date, implementation date, legacy treatment, and interim treatment of customers is the same under the Aggregation subtariff as the VNBT.
CCA Engagement
SDCP and other CCAs submitted joint opening comments requesting changes to the decision language to ensure unbundled customer billing issues are explicitly addressed in billing presentment workshops required by the decision. The Joint IOUs opposed the Joint CCA proposal in reply comments.
To further advocate for unbundled NBT customers’ billing needs following comments, SDCP organized two meetings with President Reynolds’ staff to emphasize the need to change the decision language. These meetings were successful, and the Commission adopted the Joint CCAs’ requested language.
Billing presentment workshops will commence no later than April 13, 2024.
B) Federal Activities Report
As reported in the July 27, 2023, Update on Regulatory and Legislative Affairs, SDCP CEO Karin Burns requested during the SDCP Fly In to Washington DC that Congressman Scott Peters author a letter regarding CCA eligibility for funding flowing from the Inflation Reduction Act. Mr. Peters agreed to author the letter and his staff also led an effort to get other members of the California delegation, including Congressman Mike Levin, to sign onto the letter. SDCP worked with other CCAs in the state who also reached out to their representatives requesting that they sign onto the letter. The final version of the letter is attached to this staff report (Attachment B).
On October 31, 2023, the Environmental Protection Agency (EPA) responded to the letter in the affirmative, stating “we anticipate allowing CCAs to participate in programs as appropriate.” The letter also states: “We concur with the important work that CCAs offer, including fostering partnerships and aggregating local government projects where appropriate.” The full letter is attached to this staff report as Attachment C.
AD-HOC COMMITTEE AND/OR SUBCOMITTEE REVIEW
N/A
FISCAL IMPACT
N/A
ATTACHMENTS
Attachment A: Reply Comments of SDCP and CEA on Proposed Decision Attachment B: Letter to Secretary Granholm and Administrator Regan Attachment C: Response from EPA
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October 31, 2023
The Honorable Mike Levin
United States House of Representatives
Washington, D.C. 20515
Dear Representative Levin,
Thank you for your July 18, 2023, letter to U.S. Environmental Protection Agency (EPA) Administrator Michael Regan, regarding the importance of Community Choice Aggregators (CCA) and EPA’s programs authorized under the Inflation Reduction Act (IRA).
We appreciate Congress’s efforts to provide EPA with the resources to successfully implement the IRA. EPA’s programs authorized by the IRA are helping meet President Biden’s goals of reducing greenhouse gas emissions 50-52% below 2005 levels in 2030 and achieving net zero emissions by no later than 2050. Along with cutting emissions, these programs are advancing President Biden’s Justice40 Initiative to direct at least 40% of the overall benefits of these investments in climate and clean energy to disadvantaged communities to combat decades of underinvestment and address disproportionate environmental burden.
EPA has worked to design our IRA programs to meet the unique needs of stakeholders and maximize the results of this historic funding for communities and the environment. EPA evaluates eligibility in accordance with the authority governing each IRA program and we anticipate allowing CCAs to participate in programs as appropriate.
We concur with the important work that CCAs offer, including fostering partnerships and aggregating local government projects where appropriate. Our Office of Congressional and Intergovernmental Relations (OCIR) serves as EPA's liaison with these constituencies on the agency's major programs as well as on intergovernmental issues. EPA Region 9, which includes California, can be an additional resource for CCAs in your districts. We would be happy to connect CCAs in your district with additional resources within OCIR and Region 9.
Again, thank you for your interest in the EPA’s programs under the IRA and your thoughts on this important issue. If you have further questions, please contact me or your staff may contact Denis Borum in EPA's Office of Congressional and Intergovernmental Relations at [email protected].
Sincerely,
Tim Del Monico
Associate Administrator
Office of Congressional and Intergovernmental
Relations
SAN DIEGO COMMUNITY POWER
Staff Report – Item 13
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Aaron Lu, Senior Rates and Strategy Analyst
Lucas Utouh, Senior Director of Data Analytics and Customer Operations Via: Karin Burns, Chief Executive Officer
Subject: Update on 2024 Rate & Power Charge Indifference Adjustment (PCIA) Projected Changes
Date: December 14, 2023
--------------------------------------------------------------------------------------------------------------------
RECOMMENDATION
Receive and file an update on 2024 rates and Power Charge Indifference Adjustment (PCIA).
BACKGROUND
As San Diego Community Power (SDCP) prepares to develop and propose rates for 2024, it is critical to understand current and projected SDG&E rates and changes to the Power Charge Indifference Adjustment (PCIA) – as both SDG&E bundled rates and PCIA play a role in the SDCP rate setting process. SDCP’s Board of Directors last adjusted generation rates on January 23, 2023, and those rates came into effect as of February 1, 2023.
ANALYSIS AND DISCUSSION
Rate Setting Process
SDCP will establish rates sufficient to recover all costs related to operations of our program and to provide service to our customers and the Board of Directors has the ultimate responsibility for setting the electric generation rates for SDCP’s customers. The Chief Executive Officer, in cooperation with Staff and appropriate advisors, consultants, and committees of the Board, is responsible for developing proposed rates for the Board to consider before finalization. For SDCP to be fiscally sustainable, the final approved rates should, at a minimum, meet the annual revenue requirements developed by SDCP, including any reserves or coverage requirements set forth in policy and/or loan covenants/debt service. The Board has the flexibility to consider rate adjustments, provided that the overall revenue requirement is achieved.
In alignment with the Rate Development Policy, adopted by the Board of Directors on November 17, 2022, SDCP considers the following objectives in its rate setting framework:
x Cost Recovery
x Reserves
x Rate Competitiveness and Customer Value
x Rate Stability
x Equity Among Customers
x Rate Structure Simplicity and Comparability
x Transparency
x Avoidance of Cost Shifting
x Cost of Service
Additionally, per previous Board direction, SDCP staff will, if possible, recommend rates that remain competitive with SDG&E service.
It is important to note rates are made up of several components, only one of which SDCP has control over i.e., SDCP’s generation rate. The chart below is an example of a current rate tariff composition for a residential customer to illustrate the various components that affect rates and make up a total customer bill. Staff tracks the changes to the PCIA as it is the above market cost of power associated with SDG&E’s portfolio that both SDG&E’s bundled customers pay as well as SDCP customers who have departed SDG&E commodity service and can affect SDCP’s overall headroom or competitiveness. Above market refers to expenditures for generation resources that cannot be fully recovered through sales of these resources at current market prices. 2023 – 2024 Rates Timeline
San Diego Community Power, like most Community Choice Aggregators, usually adjusts rates annually or in response to utility rate adjustments. There is a very narrow window of time between when SDG&E sets their 2024 rates and when SDCP needs updated rates available for 2024. The expected schedule for SDCP’s rate setting is as follows:
x May 15, 2023: SDG&E’s 2024 Energy Resource Recovery Account (ERRA) forecast application was filed.
x October 13, 2023: SDG&E’s Updated 2024 Energy Resource Recovery Account (ERRA) forecast application was filed.
x December 14, 2023: SDCP staff briefs its Board of Directors of 2024 expected rate and PCIA changes.
x January 1, 2024: SDG&E’s expected implementation of its generation rates and the PCIA.
x January 18, 2024: SDCP Board adopts 2024 rates, effective February 1, 2024. 2024 Bundled & PCIA Rate Projections
Based on SDG&E’s October 2023 Updated 2024 Energy Resource Recovery Account (ERRA) forecast application, their projected bundled system average rates were expected to decrease by approximately 4.7% as of January 1, 2024. This translates to a decrease of approximately 8.5% to the underlying SDG&E’s commodity rates. However, in November 2023, SDG&E filed a regulatory account update advice letter which adjusted their projected bundled system average rates to decrease by approximately 10.8% as of January 1, 2024. This translates to a decrease of approximately 16.9% to the underlying SDG&E’s commodity rates. These projections are articulated in the table below:
SDG&E attributes the decreasing electric generation energy costs in 2024 primarily to decreasing electricity purchasing costs. An adjustment between SDG&E’s balancing accounts is also driving the projected rate decrease.
Based on our high-level forecasts, SDCP is expecting to see an approximately 730% increase in PCIA rates for Vintage Year 2020 (Phase 1 & 2 customers), 17% reduction for Vintage Year 2021 (Phase 3 customers), and 37% reduction for Vintage Year 2022 (Phase 4 customers), as depicted in the SDG&E PCIA Rates table, at the end of this staff report.
The primary driver for the decrease in PCIA rates for Vintage Years 2021 and 2022 is historically high energy market forward prices in 2024 which reduce the above market cost of SDG&E’s portfolio. If approved by the CPUC before this year ends, SDGE’s projected rate decreases and PCIA changes are expected to be effective as of January 1, 2024.
2024 Rate Setting Mechanics
In accordance with SDG&E’s definition of load transfer from bundled service to SDCP’s service per Schedule CCA-CRS, our Phase 1 and 2 customers’ Vintage Year is 2020, our Phase 3 customers’ Vintage Year is 2021, and our Phase 4 customers’ Vintage Year is 2022. Vintaging denotes the year during which SDG&E recognizes the transition of our customers from bundled service into our service and creates a mechanism for the assessment of PCIA rate.
Next Steps
Staff will continue to monitor all updates from SDG&E/CPUC throughout the remainder of the year and into 2024 to be able to better analyze and recommend rate changes that are reflective of all the inputs articulated in CPUC’s decision(s). Staff expects to present rates to the SDCP Board for adoption at the January 18, 2024 meeting that both meet the revenue and prudent reserve needs of SDCP as well as maintain value for our customers.
As a result of the substantial deltas expected between PCIA rates for Vintage Years 2020, 2021, and 2022, staff will also recommend to the Board to continue to trifurcate three sets of rates for 2024 during the January 2024 Board meeting. This trifurcation will maintain a fair, equitable, and balanced rate structure that does not create winners and losers across our customers with differing vintage years, as articulated below:
COMMITTEE REVIEW
This item was presented to the Community Advisory Committee on December 7th, 2023.
FISCAL IMPACT
N/A
ATTACHMENTS
N/A
SDG&E PCIA Rates
Rate Group
PCIA
2020
Vintage
PCIA
2021
Vintage
PCIA
2022
Vintage
PCIA
2020
Vintage
PCIA
2021
Vintage
PCIA
2022
Vintage
PCIA
2020
Vintage
PCIA
2021
Vintage
PCIA
2022
Vintage
PCIA
2020
Vintage*
PCIA
2021
Vintage
PCIA
2022
Vintage
PCIA
2020
Vintage
PCIA
2021
Vintage
PCIA
2022
Vintage
PCIA
2020
Vintage
PCIA
2021
Vintage
PCIA
2022
Vintage
PCIA
2020
Vintage
PCIA
2021
Vintage
PCIA
2022
Vintage
Residential -0.001 0.017 0.044 -0.005 0.000 0.031 -0.004 -0.016 -0.013 -318% -97% -30% 0.011 0.017 0.030 0.012 0.000 -0.014 1042% -2% -32% Small Commercial -0.001 0.026 0.048 -0.004 0.005 0.034 -0.003 -0.020 -0.014 -377% -79% -29% 0.008 0.018 0.031 0.009 -0.008 -0.017 1140% -30% -36% Medium & Large C&I -0.002 0.029 0.055 -0.006 0.007 0.048 -0.004 -0.022 -0.007 -262% -76% -13% 0.010 0.023 0.041 0.012 -0.005 -0.014 725% -18% -25% Agriculture -0.001 0.023 0.042 -0.004 0.002 0.020 -0.003 -0.020 -0.021 -338% -90% -51% 0.007 0.014 0.021 0.008 -0.009 -0.020 1010% -40% -49% Streetlighting -0.001 0.021 0.039 -0.003 0.004 0.025 -0.002 -0.017 -0.014 -297% -81% -36% 0.006 0.013 0.022 0.007 -0.008 -0.016 1003% -36% -42% System Total -0.001 0.020 0.047 -0.005 0.003 0.036 -0.004 -0.018 -0.010 -270% -87% -22% 0.009 0.017 0.029 0.010 -0.003 -0.017 730% -17% -37% *PCIA 2020 Vintage rate is becoming more negative.
Difference % Difference
October-23 November-23
Current ($/kWh) Proposed ($/kWh) Difference % Difference Proposed ($/kWh)
SAN DIEGO COMMUNITY POWER
Staff Report – Item 14
--------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Byron Vosburg, Managing Director, Power Services; and Kenny Key, Director of Power Contracts, Power Services
Via: Karin Burns, Chief Executive Officer
Subject: Renewable Power Purchase Agreement with CDH VIDAL LLC Date: December 14, 2023
---------------------------------------------------------------------------------------------------------------------
RECOMMENDATION
Approve the proposed Renewable Power Purchase Agreement with CDH VIDAL LLC and authorize the CEO to execute the agreement.
BACKGROUND
As San Diego Community Power (SDCP) strives to meet its environmental, financial, and regulatory compliance goals and requirements, long-term power purchase agreements (PPAs) of at least 10 years in duration are integral components of its energy supply portfolio. Long-term PPAs provide renewable generation facility developers with the certain revenue stream against which they can finance up-front capital requirements, so each long-term PPA that SDCP signs with a developing facility will underpin a new, incremental renewable energy project. In addition, long-term PPAs lock in renewable energy supply around which SDCP can build its power supply portfolio while also providing power supply cost certainty around which SDCP can develop its pro forma financial model.
Moreover, the California Renewable Portfolio Standard (RPS), as modified in 2015 by Senate Bill 350, requires that SDCP provide 65% of its RPS-required renewable energy from contracts of at least ten years in length. In D.21-06-025, the California Public Utilities Commission (CPUC) required each Load Serving Entity (LSE) in California to make significant long-term purchase commitments for resource adequacy from new, incremental generation facilities that will achieve commercial operation during 2023 through 2026. Further, as adopted March 23, 2023, SDCP has established a procurement target of 100% renewable by 2035.
The proposed PPA is for capacity and renewable energy benefits from a 160 MW solar and 160 MW (640 MWh) storage project (“Vidal”) under development by CDH VIDAL LLC, a subsidiary of Core Energy (“Core”). The PPA originated from a bi-lateral offer SDCP received. SDCP engaged with Core after short-listing the project and has reached terms mutually agreeable to both parties.
ANALYSIS AND DISCUSSION
Staff negotiated the attached PPA for the purchase of renewable energy and capacity attributes from a 160 MW solar photovoltaic electricity generating facility, along with a 160 MWAC 4-hour (640 MWh) battery energy storage facility in San Bernardino County.
Renewable energy produced by the facility will provide approximately 480,000 MWh annually of long-term renewable energy deliveries for SDCP’s power supply. Further, while SDCP is increasing efforts to target and encourage local project development for SDCP’s generation portfolio, SDCP expects a certain amount of geographic diversity among its power supply to help mitigate risks that might be experienced locally or regionally from weather, project site and/or wholesale market conditions.
Below is additional information regarding Core and the proposed PPA.
Background on Core:
• Core Development Group is one of the top solar developers in the U.S. (Solar Power World, 2023)
• Over 800 MW of peak capacity developed
Contract Overview – CDH VIDAL LLC
• Project: 160 MW solar photovoltaic electricity generating facility, along with a 160 MWAC 4-hour (640 MWh) battery energy storage facility
• Project location: San Bernardino County
• Interconnection: WAPA (external to CAISO). Seller will deliver energy to CAISO, and SDCP will need to allocate import rights to this project to claim associated resource adequacy attributes.
• Guaranteed commercial operation date: March 1, 2026
• Contract term: 20 years
• Expected annual energy production: approximately 480,000 MWhs • Pricing: Fixed pricing with no escalation
• SDCP would receive financial compensation in the event of seller’s failure to successfully achieve certain development milestones as well as seller’s failure to meet the guaranteed energy production.
Community Benefits and Workforce Development:
x The Vidal project is estimated to create approximately 250 temporary construction jobs and 11 permanent jobs.
x The project is located in a designated low-income community area and Core will be working with the Colorado River Indian Tribe on hiring local labor for the Vidal project.
x The project has a fully executed Project Labor Agreement with the Operating Engineers Local 12, the Southwest Regional Council of Carpenters, the Southern California District Council of Laborers and its affiliated Local Union 783, IBEW Local 477 and the Ironworkers Local 416 and 433.
x The project has committed $500,000 to a community benefit fund to benefit SDCP customers.
COMMITTEE REVIEW
Staff briefed the ECWG and the ECWG instructed SDCP to move forward with negotiations on the PPA on September 5, 2023. On December 5, 2023, the ECWG approved key PPA terms to move forward with the execution of this PPA.
FISCAL IMPACT
The competitive energy and capacity pricing of the PPA are confidential, but the long-term purchase of renewable energy and capacity will provide SDCP with significant value and cost certainty over the term of this PPA.
ATTACHMENTS
Attachment A: Renewable Power Purchase Agreement with CDH VIDAL LLC CONFIDENTIAL: SDCP 120523 EDITING DRAFT
i
RENEWABLE POWER PURCHASE AGREEMENT
COVER SHEET
Seller: CDH Vidal LLC, a Delaware limited liability company (“Seller”) Buyer: San Diego Community Power, a California joint powers authority (“Buyer”) Description of Facility: A 160 MWAC pseudo-tied solar photovoltaic electricity generating facility, along with a hybrid 160 MWAC 4-hour (640 MWh) battery energy storage facility, located in San Bernardino County, in the state of California, as further described in Exhibit A.
Milestones:
Milestone Date for
Completion
Evidence of Site Control Complete
CEC Precertification Obtained Complete
Documentation of Conditional Use Permit if required:
[ ] CEQA, [ ] Cat Ex, [ ]Neg Dec, [ ] Mitigated Neg Dec, [ X] EIR
2/28/2024
Seller’s receipt of Phase I and Phase II Interconnection study results for Seller’s Interconnection Facilities Complete Executed Interconnection Agreement 6/30/2024
Financial Close 9/30/2025
Procure Major Equipment 3/31/2025
Guaranteed Construction Start Date 4/30/2025
Guaranteed Commercial Operation Date 3/1/2026
Delivery Term: Twenty (20) Contract Years.
Expected Energy: The Expected Energy shall be as per below, provided that should the PTO loss percentage as defined under WAPA’s Rate Schedule DSW-TL1 change from three percent (3%), then Seller may update the Expected Energy amounts in a Notice to Buyer to take into account such change.
Contract Year Expected Energy
1 2
CONFIDENTIAL: SDCP 120523 EDITING DRAFT
ii
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
Guaranteed Capacity: 160 MWAC of Generating Facility capacity at the Interconnection Point, as may be adjusted pursuant to Section 5(a) of Exhibit B Storage Contract Capacity: 160 MWAC for four (4) hour discharge at the Interconnection Point, as may be adjusted pursuant to Section 5(b) of Exhibit B Storage Contract Output: 640 MWh (based on four (4) hour discharge) at the Interconnection Point
Dedicated Interconnection Capacity: 160 MWAC at the Interconnection Point Guaranteed Storage Availability: percent ( %)
Guaranteed Efficiency Rate: The Guaranteed Efficiency Rate shall be:
Contract Year Guaranteed
Efficiency Rate (%)
1 2
3 4
5 6
7 8
9 CONFIDENTIAL: SDCP 120523 EDITING DRAFT
iii
10 11
12 13
14 15
16 17
18 19
20 Minimum Efficiency Rate: percent ( %) for all Contract Years Contract Price
The Renewable Rate shall be:
Contract Year Renewable Rate
1 – 20 $ /MWh (flat) with no escalation
The Storage Rate shall be:
Contract Year Storage Rate
1 – 20
$ /kW-month (flat) with no escalation;
provided, the Storage Rate shall be $ /kW-month for the period between the Commercial Operation Date and the RA Guarantee Date
Product:
܈ Generating Facility Energy
܈ Discharging Energy
܈ Green Attributes (Portfolio Content Category 1)
܈ Storage Capacity
܈ Capacity Attributes (Resource Specific Import RA)
܈ Ancillary Services
Scheduling Coordinator: Buyer/Buyer Third Party
Security:
Development Security: $ /kW multiplied by the Contract Capacity CONFIDENTIAL: SDCP 120523 EDITING DRAFT
iv
Performance Security: The Performance Security on the first day of each Contract Year shall be as set forth in the following table:
Contract Year Performance
Security ($)
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
v
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS ........................................................................................................ 1
1.1 Contract Definitions............................................................................................. 1
1.2 Rules of Interpretation ...................................................................................... 28 ARTICLE 2 TERM; CONDITIONS PRECEDENT.................................................................. 29
2.1 Contract Term.................................................................................................... 29
2.2 Conditions Precedent......................................................................................... 29
2.3 Development; Construction; Progress Reports............................................... 30
2.4 Remedial Action Plan ........................................................................................ 31 ARTICLE 3 PURCHASE AND SALE ...................................................................................... 31
3.1 Purchase and Sale of Product........................................................................... 31
3.2 Sale of Green Attributes.................................................................................... 31
3.3 Imbalance Energy. ............................................................................................. 32
3.4 Ownership of Renewable Energy Incentives. .................................................. 32
3.5 Future Environmental Attributes. ................................................................... 32
3.6 Test Energy......................................................................................................... 33
3.7 Capacity Attributes............................................................................................ 33
3.8 Resource Adequacy Failure .............................................................................. 34
3.9 CEC Certification and Verification. ................................................................ 34
3.10 Reserved.............................................................................................................. 34
3.11 California Renewables Portfolio Standard...................................................... 34
3.12 Compliance Cost Cap. ....................................................................................... 35
3.13 Project Configuration ........................................................................................ 36 ARTICLE 4 OBLIGATIONS AND DELIVERIES ................................................................... 36
4.1 Delivery ............................................................................................................... 36
4.2 Title and Risk of Loss........................................................................................ 37
4.3 Forecasting.......................................................................................................... 37
4.4 Dispatch Down/Curtailment. ............................................................................ 39
4.5 Charging Energy Management ........................................................................ 40
4.6 Reduction in Energy Delivery Obligation........................................................ 42
4.7 Guaranteed Energy Production........................................................................ 43
4.8 Storage Availability and Efficiency Rate. ........................................................ 43
4.9 Storage Capacity Tests ...................................................................................... 44
4.10 WREGIS ............................................................................................................. 45
4.11 Interconnection .................................................................................................. 46
4.12 CRS Listed.......................................................................................................... 47
4.13 CAISO Tariff Requirements ............................................................................. 47
4.14 Firm Transmission ............................................................................................. 47 ARTICLE 5 TAXES .................................................................................................................. 47
5.1 Allocation of Taxes and Charges...................................................................... 47
5.2 Cooperation. ....................................................................................................... 47 vi
ARTICLE 6 MAINTENANCE OF THE FACILITY ................................................................ 48
6.1 Maintenance of the Facility. .............................................................................. 48
6.2 Maintenance of Health and Safety. .................................................................. 48
6.3 Shared Facilities................................................................................................. 48 ARTICLE 7 METERING ........................................................................................................... 48
7.1 Metering. ............................................................................................................. 48
7.2 Meter Verification.............................................................................................. 49 ARTICLE 8 INVOICING AND PAYMENT; CREDIT ............................................................ 49
8.1 Invoicing.............................................................................................................. 49
8.2 Payment. ............................................................................................................. 50
8.3 Books and Records. ............................................................................................ 50
8.4 Invoice Adjustments. ......................................................................................... 50
8.5 Billing Disputes................................................................................................... 50
8.6 Netting of Payments........................................................................................... 51
8.7 Seller’s Development Security. ......................................................................... 51
8.8 Seller’s Performance Security. ......................................................................... 51
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral....... 52
8.10 Financial Statements .......................................................................................... 52
8.11 Buyer’s Financial Statements ........................................................................... 53 ARTICLE 9 NOTICES .............................................................................................................. 53
9.1 Addresses for the Delivery of Notices............................................................... 53
9.2 Acceptable Means of Delivering Notice ........................................................... 53 ARTICLE 10 FORCE MAJEURE ............................................................................................. 54
10.1 Definition ............................................................................................................ 54
10.2 Termination Following Force Majeure Event................................................. 55
10.3 Notice for Force Majeure. ................................................................................. 55
10.4 No Liability If a Force Majeure Event Occurs. .............................................. 55 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ..................................................... 56
11.1 Events of Default................................................................................................ 56
11.2 Remedies; Declaration of Early Termination Date. ....................................... 60
11.3 Termination Payment........................................................................................ 60
11.4 Notice of Payment of Termination Payment or Damage Payment ............... 61
11.5 Disputes With Respect to Termination Payment or Damage Payment ........ 61
11.6 Limitation on Seller’s Ability to Make or Agree to Third-Party Sales from the Facility after Early Termination Date .............................................. 61
11.7 Rights And Remedies Are Cumulative ............................................................ 62
11.8 Mitigation............................................................................................................ 62
11.9 Seller Pre-COD Liability ................................................................................... 62 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES ........ 62
12.1 No Consequential Damages............................................................................... 62 vii
12.2 Waiver and Exclusion of Other Damages. ....................................................... 62 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY .......................... 63
13.1 Seller’s Representations and Warranties. ....................................................... 63
13.2 Buyer’s Representations and Warranties........................................................ 64
13.3 General Covenants............................................................................................. 65
13.4 Prevailing Wage ................................................................................................. 65
13.5 Workforce Development and Supplier Diversity............................................ 65
13.6 Community Benefits .......................................................................................... 66 ARTICLE 14 ASSIGNMENT.................................................................................................... 66
14.1 General Prohibition on Assignments ............................................................... 66
14.2 Collateral Assignment ....................................................................................... 66
14.3 Permitted Assignment by Seller ....................................................................... 68
14.4 Permitted Assignment by Buyer....................................................................... 69 ARTICLE 15 DISPUTE RESOLUTION ................................................................................... 69
15.1 Governing Law. .................................................................................................. 69
15.2 Dispute Resolution. ............................................................................................ 69 ARTICLE 16 INDEMNIFICATION ......................................................................................... 70
16.1 Indemnity............................................................................................................ 70
16.2 Claims.................................................................................................................. 70 ARTICLE 17 INSURANCE ...................................................................................................... 71
17.1 Insurance ............................................................................................................ 71 ARTICLE 18 CONFIDENTIAL INFORMATION ................................................................... 72
18.1 Definition of Confidential Information............................................................ 72
18.2 Duty to Maintain Confidentiality ..................................................................... 73
18.3 Irreparable Injury; Remedies ........................................................................... 73
18.4 Disclosure to Lenders, Etc. ................................................................................ 73
18.5 Press Releases..................................................................................................... 73 ARTICLE 19 MISCELLANEOUS ............................................................................................ 74
19.1 Entire Agreement; Integration; Exhibits......................................................... 74
19.2 Amendments....................................................................................................... 74
19.3 No Waiver ........................................................................................................... 74
19.4 No Agency, Partnership, Joint Venture or Lease ........................................... 74
19.5 Severability ......................................................................................................... 74
19.6 Mobile-Sierra...................................................................................................... 74
19.7 Counterparts ...................................................................................................... 75
19.8 Electronic Delivery............................................................................................. 75
19.9 Binding Effect..................................................................................................... 75
19.10 No Recourse to Members of Buyer................................................................... 75
19.11 Forward Contract.............................................................................................. 75
19.12 Service Contract................................................................................................. 75 viii
19.13 Further Assurances. ........................................................................................... 75
19.14 Change in Electric Market Design ................................................................... 75 EXHIBITS:
A. FACILITY DESCRIPTION ..................................................................................... A-1 B. MAJOR PROJECT DEVELOPMENT MILESTONES AND COMMERCIAL
OPERATION ............................................................................................... B-1 C. COMPENSATION.................................................................................................... C-1 D. SCHEDULING COORDINATOR RESPONSIBILITIES ....................................... D-1 E. PROGRESS REPORTING FORM ............................................................................ E-1 F-1. AVERAGE EXPECTED ENERGY ................................................................... F-1-1 F-2. AVAILABLE CAPACITY ................................................................................. F-2-1 G. GUARANTEED ENERGY PRODUCTION DAMAGES CALCULATION ......... G-1 H. FORM OF COMMERCIAL OPERATION DATE CERTIFICATE ....................... H-1 I. FORM OF INSTALLED CAPACITY CERTIFICATE .............................................. I-1 J. FORM OF CONSTRUCTION START DATE CERTIFICATE ................................ J-1 K. FORM OF LETTER OF CREDIT ............................................................................ K-1 L. FORM OF GUARANTY ........................................................................................... L-1 M. FORM OF REPLACEMENT RA NOTICE ........................................................... M-1 N. NOTICES .................................................................................................................. N-1 O. STORAGE CAPACITY TESTS .............................................................................. O-1 P. MONTHLY/ANNUAL STORAGE AVAILABILITY CALCULATION ................ P-1 Q. OPERATING RESTRICTIONS ............................................................................... Q-1 R. METERING DIAGRAM .......................................................................................... R-1 S. WORKFORCE DEVELOPMENT ............................................................................. S-1
5 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia, California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. “Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of Energy that the Facility can generate or deliver to the Delivery Point at a particular moment and that can be purchased and sold under CAISO or CPUC market rules, including Resource Adequacy Benefits. Capacity Attributes are measured in MW and shall exclude Energy, Green Attributes, or any other Renewable Energy Incentives now or in the future associated with the construction, ownership or operation of the Facility.
“Capacity Damages” has the meaning set forth in Exhibit B. “CEC” means the California Energy Commission, or any successor agency performing similar statutory functions.
“CEC Certification and Verification” means that the CEC has certified (or, with respect to periods before the date that is one hundred eighty (180) days following the Commercial Operation Date, that the CEC has pre-certified as such date may be extended pursuant to Section 3.9) that the Generating Facility is an Eligible Renewable Energy Resource for purposes of the California Renewables Portfolio Standard and that all Generating Facility Energy or Facility Energy, as applicable, delivered to the Delivery Point qualifies as generation from an Eligible Renewable Energy Resource.
“CEC Precertification” means that the CEC has issued a precertification for the Facility indicating that the planned operations of the Facility would comply with applicable CEC requirements for CEC Certification and Verification.
“CEQA” means the California Environmental Quality Act.
“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 intermediate entities, more than fifty percent (50%) of the outstanding equity interests in Seller; provided, in calculating ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more intermediate 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 intermediate entity; and (b) ownership interests in Seller owned directly or indirectly by any Lender (including any cash equity or tax equity provider and any trustee or agent or similar representative thereof acting on their behalf) or assignee or transferee thereof shall be excluded from the total outstanding equity interests in Seller.
6 “Charging Energy” means the as-available Energy produced by the Generating Facility and delivered to the Storage Facility pursuant to a Charging Notice, as measured at the Storage Facility Metering Point by the Storage Facility Meter, net of Electrical Losses between the Generating Facility Metering Point and the Storage Facility Metering Point. All Charging Energy shall be used solely to charge the Storage Facility inclusive of any Auxiliary Load that is not Idle Period Auxiliary Load, and, unless authorized in writing by Seller, all Charging Energy shall be generated solely by the Generating Facility. For the avoidance of doubt, Charging Energy may not be used to serve Idle Period Auxiliary Load.
“Charging Notice” means the operating instruction, and any subsequent updates, given by Buyer, Buyer’s SC or the CAISO, directing the Storage Facility to charge at a specific MW rate for a specified period of time or to a specified Stored Energy Level; provided, (a) any such operating instruction shall be in accordance with the Operating Restrictions and such “Charging Notice” shall be deemed automatically adjusted to comply with the Operating Restrictions; and (b) if, during a period when the Storage Facility is instructed by CAISO or any other Governmental Authority to be charging, such “Charging Notice” shall be deemed to be automatically adjusted to be equal to such instruction. For the avoidance of doubt, (i) any instruction to charge the Storage Facility pursuant to a Buyer Dispatched Test shall be considered a Charging Notice, and (ii) any Charging Notice shall not constitute a Buyer Bid Curtailment, Buyer Curtailment Order or Curtailment Order.
“Collateral Assignment Agreement” has the meaning set forth in Section 14.2. “Commercial Operation” has the meaning set forth in Exhibit B. “Commercial Operation Date” has the meaning set forth in Exhibit B. “Commercial Operation Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) one hundred twenty (120). “Commercial Operation Storage Capacity Test” has the meaning set forth in Exhibit O. “Communications Protocols” means certain Operating Restrictions developed by the Parties pursuant to Exhibit Q that involve procedures and protocols regarding communication with respect to the operation of the Storage Facility pursuant to this Agreement. “Compliance Action” has the meaning set forth in Section 3.12(b). “Compliance Cost Cap” has the meaning set forth in Section 3.12(b). “Confidential Information” has the meaning set forth in Section 18.1. “Construction Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) one hundred twenty (120). “Construction Start” has the meaning set forth in Exhibit B. “Construction Start Date” has the meaning set forth in Exhibit B. 7 “Contract Capacity” means the sum of the Guaranteed Capacity and the Storage Contract Capacity.
“Contract Price” has the meaning set forth on the Cover Sheet. To be clear, the Contract Price is each of the Renewable Rate and the Storage Rate. “Contract Term” has the meaning set forth in Section 2.1(a). “Contract Year” means a period of twelve (12) consecutive months. The first Contract Year shall commence on the Commercial Operation Date and each subsequent Contract Year shall commence on the anniversary of the Commercial Operation Date. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third-party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace the Agreement, and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating the Agreement. “Cover Sheet” means the cover sheet to this Agreement, which is incorporated into this Agreement.
“COVID-19” means the epidemic disease designated COVID-19 and the related virus designated SARS-CoV-2 and any mutations thereof, and the efforts of a Governmental Authority to combat such disease.
“CPM Soft Offer Cap” has the meaning set forth in Section 43A.4.1.1 of the CAISO Tariff (or its successor).
“CPUC” means the California Public Utilities Commission or any successor agency performing similar statutory functions.
“CPUC Tier 1 System RA Penalty” means the tier 1 RA penalties assessed against load serving entities by the CPUC for RA deficiencies that are not replaced or cured, as established by the CPUC in the Resource Adequacy Rulings and subsequently incorporated into the annual Filing Guide for System, Local and Flexible Resource Adequacy (RA) Compliance Filings that is issued by the CPUC Energy Division, or any replacement or successor documentation established by the CPUC Energy Division to reflect RA penalties that are established by the CPUC and assessed against load serving entities for RA deficiencies.
“Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third-party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P or Moody’s. “CRS” has the meaning set forth in Section 4.12.
“Cure Plan” has the meaning set forth in Section 11.1(b)(vi). 8 “Current Tax Law” means the United States Internal Revenue Code of 1986 as of the Effective Date.
“Curtailment Order” means any of the following:
(a) CAISO orders, directs, alerts, or provides notice to a Party, including an Operating Instruction, to curtail deliveries of Generating Facility Energy for the following reasons: (i) any System Emergency, or (ii) any warning of an anticipated System Emergency, or warning of an imminent condition or situation, which jeopardizes CAISO’s electric system integrity or the integrity of other systems to which CAISO is connected; (b) a curtailment of Generating Facility Energy ordered by the Participating Transmission Owner for reasons including, but not limited to: (i) any situation that affects normal function of the electric system including, but not limited to, any abnormal condition that requires action to prevent circumstances such as equipment damage, loss of load, or abnormal voltage conditions, or (ii) any warning, forecast or anticipation of conditions or situations that jeopardize the Participating Transmission Owner’s electric system integrity or the integrity of other systems to which the Participating Transmission Owner is connected; (c) a curtailment of Generating Facility Energy ordered by the Transmission Provider due to scheduled or unscheduled maintenance on the Transmission Provider’s transmission facilities that prevents: (i) Buyer from receiving of Generating Facility Energy at the Delivery Point or (ii) Seller from delivering of Generating Facility Energy to the Delivery Point; or (d) a curtailment of Generating Facility Energy in accordance with Seller’s obligations under its Interconnection Agreement with the Participating Transmission Owner or distribution operator.
“Curtailment Period” means the period of time, as measured using current Settlement Intervals, during which Generating Facility Energy is reduced pursuant to a Curtailment Order; provided, the Curtailment Period shall be inclusive of the time required for the Facility to ramp down and ramp up for the purposes of counting Lost Output; provided further, Lost Output shall exclude Generating Facility Energy delivered to the Delivery Point during the Curtailment Period. “Cycle” means a quantity of Discharging Energy (in MWh) equal to the Storage Contract Output.
“Damage Payment” means the dollar amount that equals the amount of the Development Security.
“Day-Ahead Forecast” has the meaning set forth in Section 4.3(c). “Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Day-Ahead Schedule” has the meaning set forth in the CAISO Tariff. 9 “Dedicated Interconnection Capacity” means the maximum instantaneous amount of Energy that is permitted to be delivered by the Facility to the Interconnection Point under Seller’s Interconnection Agreement, in the amount of MWs as set forth on the Cover Sheet. “Deemed Delivered Energy” means the amount of Generating Facility Energy, expressed in MWh, that the Generating Facility would have produced and delivered to the Storage Facility and/or Delivery Point, but that is not produced by the Generating Facility during a Buyer Curtailment Period, which amount shall be calculated using the CAISO VER forecast or an industry-standard methodology agreed to by Buyer and Seller that utilizes meteorological conditions on Site as input for the period of time during such Buyer Curtailment Period, less the amount of Generating Facility Energy delivered to the Storage Facility and/or Delivery Point during the Buyer Curtailment Period; provided, if the applicable difference is negative, the Deemed Delivered Energy shall be zero (0).
“Deemed Delivered RA” means the amount of Resource Specific Import RA expressed in MWAC that the Facility would have delivered, but for (a) the failure of Buyer to (i) obtain Import Capability sufficient to allow for the importation of such capacity into the CAISO, (ii) obtain any other rights or capacities that Buyer is required to obtain, or take any other action that Buyer is required to take, in order for Seller to provide or Buyer to make use of the Capacity Attributes of the Facility, (iii) timely submit a Supply Plan for the Facility after the Facility has received a Net Qualifying Capacity from CAISO, in each case as may be required under applicable Law and as may change from time to time, and (b) a Force Majeure Event as provided in Section 3.7(e). “Defaulting Party” has the meaning set forth in Section 11.1(a). “Deficient Month” has the meaning set forth in Section 4.10(e). “Delay Damages” means Construction Delay Damages and Commercial Operation Delay Damages.
“Delivery Point” has the meaning set forth in Exhibit A. “Delivery Term” shall mean the period of Contract Years set forth on the Cover Sheet beginning on the Commercial Operation Date, unless terminated earlier in accordance with the terms and conditions of this Agreement.
“Development Cure Period” has the meaning set forth in Exhibit B. “Development Security” means (a) cash or (b) a Letter of Credit in the amount set forth on the Cover Sheet.
“Discharging Energy” means all Energy that is delivered from the Storage Facility to the Delivery Point pursuant to a Discharging Notice during any Settlement Interval or Settlement Period, as measured at the Storage Facility Metering Point by the Storage Facility Meter, as such meter readings are adjusted for Electrical Losses to the Delivery Point. For the avoidance of doubt, Discharging Energy may not be used to serve Idle Period Auxiliary Load. 10 “Discharging Notice” means the operating instruction, and any subsequent updates, given by Buyer, Buyer’s SC or the CAISO, directing the Storage Facility to discharge Discharging Energy at a specific MW rate for a specified period of time or to a specified Stored Energy Level; provided, (a) any such operating instruction or updates shall be in accordance with the Operating Restrictions and such “Discharging Notice” shall be deemed automatically adjusted to comply with the Operating Restrictions, and (b) if, during a period when the Storage Facility is instructed by Buyer’s SC or the CAISO to be discharging, the sum of Generating Facility Energy and Discharging Energy would exceed the Dedicated Interconnection Capacity, such “Discharging Notice” shall be deemed to be automatically adjusted to reduce the amount of Discharging Energy so that the sum of Discharging Energy and Generating Facility Energy does not exceed the Dedicated Interconnection Capacity, until such time as Buyer’s SC or the CAISO issues a further modified Discharging Notice; and further provided that, if, during a period when the Facility is so instructed by CAISO or any other Governmental Authority to be discharging, such “Discharging Notice” shall be deemed to be automatically adjusted to be equal to such instruction. For the avoidance of doubt, any Discharging Notice shall not constitute a Buyer Bid Curtailment, Buyer Curtailment Order or Curtailment Order. Any instruction to discharge the Storage Facility pursuant to a Buyer Dispatched Test shall be considered a Discharging Notice. “Dispute Notice” has the meaning set forth in Section 15.2. “Early Termination Date” has the meaning set forth in Section 11.2(a). “Effective Date” has the meaning set forth in the Preamble. “Efficiency Rate” means the measured round-trip efficiency rate of the Storage Facility, expressed as a percentage, calculated pursuant to a Storage Capacity Test by dividing Energy Out by Energy In and which for a given calendar month shall be prorated as necessary if more than one Efficiency Rate applies during such calendar month. “Electrical Losses” means, subject to meeting any applicable CAISO rules for Pseudo-Tie Resources, all transmission or transformation losses (a) between the Generating Facility Metering Point and the Delivery Point associated with delivery of Generating Facility Energy, (b) between the Storage Facility Metering Point and the Delivery Point associated with delivery of Discharging Energy, and (c) between the Generating Facility Metering Point and the Storage Facility Metering Point associated with delivery of Charging Energy. “Eligible Renewable Energy Resource” has the meaning set forth in California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25741(a), as either code provision is amended or supplemented from time to time. “Energy” means alternating current electrical energy measured in MWh. “Energy In” has the meaning set forth in Part II.B of Exhibit O. “Energy Management System” or “EMS” means the Facility’s energy management system.
“Energy Out” has the meaning set forth in Part II.B of Exhibit O. 11 “Energy Supply Bid” has the meaning set forth in the CAISO Tariff. “Event of Default” has the meaning set forth in Section 11.1. “Excess MWh” has the meaning set forth in Exhibit C.
“Excused Event” has the meaning set forth in Exhibit P. “Expected Energy” means the quantity of Generating Facility Energy that Seller expects to be able to deliver to Buyer during each Contract Year or other time period (assuming no Charging Energy or Discharging Energy during such Contract Year or time period) in the quantity specified on the Cover Sheet, which amount shall be adjusted proportionately to the reduction from Guaranteed Capacity to Installed Generating Capacity pursuant to Section 5(a) of Exhibit B, if applicable.
“Facility” means the Generating Facility and the Storage Facility. “Facility Energy” means the sum of Generating Facility Energy and Discharging Energy during any Settlement Interval or Settlement Period, net of Charging Energy, Electrical Losses, Auxiliary Load, and Station Use, as measured by the Facility Meter, and adjusted in accordance with CAISO requirements applicable to Pseudo-Tie Resources to account for Electrical Losses to the Delivery Point.
“Facility Meter” means the CAISO-Approved Meter that will measure all Facility Energy, which Facility Meter may be adjusted in accordance with CAISO requirements applicable to Pseudo-Tie Resources to account for Electrical Losses to the Delivery Point. The location of the Facility Meter is shown on Exhibit R.
“FERC” means the Federal Energy Regulatory Commission.
“Financial Close” means Seller or one of its Affiliates has obtained debt or equity financing commitments from one or more Lenders sufficient to construct the Facility, including such financing commitments from Seller’s owner(s).
“Firm Transmission” means transmission service that cannot be curtailed within an operating hour for economic reasons or for higher priority transmission within the operating hour, or the highest quality of transmission service available from the Transmission Provider. “Flexible Capacity” has the meaning set forth in the CAISO Tariff. “Flexible Capacity Category” has the meaning set forth in the CAISO Tariff. “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 forth in Section 10.1. 12 “Forced Facility Outage” means an unexpected failure of one or more components of the Facility that prevents Seller from generating Energy or making Facility Energy available at the Interconnection Point and that is not the result of a Force Majeure Event. “Forecasting Penalty” means for each hour in which Seller does not provide the forecast required in Section 4.3(d) and Buyer incurs a loss or penalty resulting from its scheduling activities in such hour with respect to Generating Facility Energy, the product of (A) the absolute difference (if any) between (i) the expected Energy for such hour (which, for the avoidance of doubt, assumes no Charging Energy or Discharging Energy in such hour) set forth in the Monthly Delivery Forecast, and (ii) the actual Energy produced by the Generating Facility (absent any Charging Energy and Discharging Energy), multiplied by (B) the absolute value of the Real-Time Price in such hour.
“Full Cycle Equivalent” means either (a) a Cycle or (b) the sum of more than one Partial Cycles that equal the Discharging Energy in one Cycle.
“Full PTC Value” means the total value of the Base Case PTC that is expected to be available in respect to the Generating Facility over the PTC capture period. “Future Environmental Attributes” shall mean any and all generation attributes other than Green Attributes or Renewable Energy Incentives under the RPS regulations or under any and all other international, federal, regional, state or other law, rule, regulation, bylaw, treaty or other intergovernmental compact, decision, administrative decision, program (including any voluntary compliance or membership program), competitive market or business method (including all credits, certificates, benefits, and emission measurements, reductions, offsets and allowances related thereto) that are attributable, now, or in the future, to the generation of electrical energy by the Facility. Future Environmental Attributes do not include Renewable Energy Incentives. “Gains” means, with respect to any Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner. Factors used in determining the economic benefit to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term, and include the value of Green Attributes and Capacity Attributes.
“Generating Facility” means the renewable energy electricity generating facility described on the Cover Sheet and in Exhibit A located at the Site and including mechanical equipment and associated facilities and equipment required to deliver Generating Facility Energy to (a) the Interconnection Point, and (b) the Storage Facility as Charging Energy; provided, “Generating Facility” does not include the Storage Facility, Interconnection Facilities (other than Seller’s Interconnection Facilities), Network Upgrades or the Shared Facilities. 13 “Generating Facility Energy” means all Energy that is delivered from the Generating Facility, as measured at the Generating Facility Metering Point by the Generating Facility Meter, as such meter readings are adjusted for Electrical Losses to the Delivery Point. For the avoidance of doubt, Generating Facility Energy shall be measured considering transmission losses on WAPA system to the Delivery Point but shall be before any round-trip efficiency losses of the Storage Facility.
“Generating Facility Meter” means revenue quality meter or meters, along with a data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Generating Facility Energy delivered to the Generating Facility Metering Point. The Generating Facility may contain multiple measurement devices that will make up the Generating Facility Meter, and, unless otherwise indicated, references to the Generating Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together. “Generating Facility Metering Point” means the location or locations of the Generating Facility Meter shown on Exhibit R.
“GEP Damages” has the meaning set forth in Section 4.7. “Governmental Authority” means any federal, state, provincial, local or municipal government; any political subdivision thereof; or any other governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO; provided, however, that “Governmental Authority” shall not in any event include any Party. “Green Attributes” means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the generation from the Facility and its displacement of conventional energy generation. Green Attributes include but are not limited to Renewable Energy Credits, as well as: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (Sox), nitrogen oxides (Nox), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; and (3) the reporting rights to these avoided emissions, such as Green Tag Reporting Rights. Green Tags are accumulated on a MWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Generating Facility Energy. Green Attributes do not include (i) any energy, capacity, reliability or other power attributes from the Facility, (ii) Tax Benefits associated with the construction or operation of the Facility and other financial incentives in the form of credits, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation including Renewable Energy Incentives, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular preexisting pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered or used by the Facility for compliance with local, state, or federal operating or air quality permits.
14 “Green Tag Reporting Rights” means the right of a purchaser of renewable energy to report ownership of accumulated “green tags” in compliance with and to the extent permitted by applicable Law and include, without limitation, rights under Section 1605(b) of the Energy Policy Act of 1992, and any present or future federal, state or local certification program or emissions trading program, including pursuant to the WREGIS Operating Rules. “Guaranteed Capacity” means the amount of generating capacity of the Generating Facility, as measured in 160 MWAC at the Interconnection Point, initially equal to the amount set forth on the Cover Sheet, as the same may be adjusted pursuant to Section 5(a) of Exhibit B. “Guaranteed Commercial Operation Date” means the date set forth on the Cover Sheet, as such date may be extended pursuant to Exhibit B.
“Guaranteed Construction Start Date” means the date set forth on the Cover Sheet, as such date may be extended pursuant to Exhibit B.
“Guaranteed Efficiency Rate” means the guaranteed Efficiency Rate of the Storage Facility throughout the Delivery Term, as set forth on the Cover Sheet. “Guaranteed Energy Production” means an amount of Adjusted Energy Production, as measured in MWh, equal to percent ( %) of the total Expected Energy (as set forth on the Cover Sheet) for the applicable Performance Measurement Period. “Guaranteed Flexible Capacity” means, at any point in time, the maximum quantity of Flexible Capacity (in MWs) for which a Pseudo-Tie Resource, that is a hybrid facility, that is located at the Site, with solar generation capacity equal to the Installed Generating Capacity, with battery discharge capability equal to the Installed Battery Capacity, with no grid charging, having interconnection capacity equal to the Dedicated Interconnection Capacity, with a Storage Facility maximum dependable operating capacity to discharge Energy for four (4) hours of continuous discharge, having Firm Transmission in the amount of the Installed Generating Capacity between the Interconnection Point and the Delivery Point, with transmission losses pursuant to the applicable WAPA Tariff, and performing with operational characteristics equal to those required by the Guaranteed Availability, Guaranteed Efficiency Rate, and the Operating Restrictions may be counted in any given Showing Month by the CAISO and CPUC pursuant to the then-current Law, including counting conventions set forth in the Resource Adequacy Rulings and the CAISO Tariff applicable to Resource Adequacy Resources.
“Guaranteed Net Qualifying Capacity” means, at any point in time, the maximum quantity of Net Qualifying Capacity (in MWs) for which a Pseudo-Tie Resource, that is a hybrid facility, that is located at the Site, with solar generation capacity equal to the Installed Generating Capacity, with battery discharge capability equal to the Installed Battery Capacity, with no grid charging, having interconnection capacity equal to the Dedicated Interconnection Capacity, with a Storage Facility maximum dependable operating capacity to discharge Energy for four (4) hours of continuous discharge, having Firm Transmission in the amount of the Installed Generating Capacity between the Interconnection Point and the Delivery Point, with transmission losses pursuant to the applicable WAPA Tariff, and performing with operational characteristics equal to those required by the Guaranteed Availability, Guaranteed Efficiency Rate, and the Operating 15 Restrictions may be counted in any given Showing Month by the CAISO and CPUC pursuant to the then-current Law, including counting conventions set forth in the Resource Adequacy Rulings and the CAISO Tariff applicable to Resource Adequacy Resources. “Guaranteed Storage Availability” means the minimum guaranteed Annual Storage Availability of the Facility, as set forth on the Cover Sheet. “Guarantor” means, with respect to Seller, any Person that (a) does not already have any material credit exposure to Buyer under any other agreements, guarantees, or other arrangements at the time its Guaranty is issued, (b) is an Affiliate of Seller, or other third party reasonably acceptable to Buyer, (c) has a Credit Rating of BBB- or better from S&P or a Credit Rating of Baa3 or better from Moody’s, (d) has a tangible net worth of at least One Hundred Million Dollars ($100,000,000), (e) is incorporated or organized in a jurisdiction of the United States and is in good standing in such jurisdiction, and (f) executes and delivers a Guaranty for the benefit of Buyer.
“Guaranty” means a guaranty from a Guarantor provided for the benefit of Buyer substantially in the form attached as Exhibit L.
“Hybrid Resource” has the meaning set forth in the CAISO Tariff. “Idle Period Auxiliary Load” means Auxiliary Load consumed by the Storage Facility during periods in which the Storage Facility is not charging or discharging pursuant to a Charging Notice or Discharging Notice, as such Idle Period Auxiliary Load is measured by the Auxiliary Load Meter.
“Imbalance Energy” means the amount of Energy in MWh, in any given Settlement Period or Settlement Interval, by which the amount of Facility Energy deviates from the amount of Scheduled Energy.
“Import Capability” means that portion of the Maximum Import Capability allocated by the CAISO that is necessary to support the importation of Resource Adequacy Benefits from the Facility into the CAISO market in an amount equal to the Guaranteed Net Qualifying Capacity. “Indemnifiable Loss(es)” has the meaning set forth in Section 16.1(a). “Indemnified Party” has the meaning set forth in Section 16.1(a). “Indemnifying Party” has the meaning set forth in Section 16.1(a). “Initial Synchronization” means the initial delivery of Facility Energy to the Delivery Point.
“Installed Battery Capacity” means the maximum dependable operating capability of the Storage Facility to discharge Energy, as measured at the Interconnection Point, that achieves Commercial Operation (up to but not in excess of the Storage Contract Capacity set forth on the Cover Sheet), adjusted for ambient conditions on the date of the performance test, and as evidenced by a certificate substantially in the form attached as Exhibit I hereto. 16 “Installed Capacity” means the sum of (i) the Installed Generating Capacity and (ii) the Installed Battery Capacity.
“Installed Generating Capacity” means the actual generating capacity of the Generating Facility, as measured at the Interconnection Point, that achieves Commercial Operation (up to but not in excess of the Guaranteed Capacity), adjusted for ambient conditions on the date of the performance test, and as evidenced by a certificate substantially in the form attached as Exhibit I hereto.
“Insurable Force Majeure Event” means any Force Majeure Event which (a) results in direct, physical loss to the Facility, and (b) excludes Force Majeure Events that occur beyond the Interconnection Point.
“Interconnection Agreement” means the interconnection agreement(s) entered into by Seller or a Seller Affiliate pursuant to which the Facility will be interconnected with the Transmission System, providing for interconnection capacity available or allocable to the Facility at the Interconnection Point that is no less than the Dedicated Interconnection Capacity, and pursuant to which Seller’s Interconnection Facilities and any other Interconnection Facilities will be constructed, operated and maintained during the Contract Term. “Interconnection Facilities” means the interconnection facilities, control and protective devices and metering facilities required to connect the Facility with the Transmission System in accordance with the Interconnection Agreement.
“Interconnection Point” means the point at which Seller’s Interconnection Facilities interconnect with the Transmission System, which shall be the newly built switchyard on existing Headgate Rock – Blythe 161 kV transmission line, consistent with the Interconnection Agreement. “Interest Rate” has the meaning set forth in Section 8.2. “Inter-SC Trade” or “IST” has the meaning set forth in the CAISO Tariff. “Intertie” has the meaning set forth in the CAISO Tariff. “Investment Grade Credit Rating” means a Credit Rating of BBB- or higher by S&P or Baa3 or higher by Moody’s.
“IRA” means the Inflation Reduction Act of 2022.
“ITC” means the investment tax credit established pursuant to Section 48 of the United States Internal Revenue Code of 1986.
“Joint Powers Act” means the Joint Exercise of Powers Act of the State of California (Cal.
Gov. Code Section 6500 et seq.).
“Joint Powers Agreement” means that certain Joint Powers Agreement dated October 1, 2019, as amended from time to time, under which Buyer is organized as a joint powers authority in accordance with the Joint Powers Act.
17 “kW” means kilowatts in alternating current, unless expressly stated in terms of direct current.
“Law” means any applicable law, statute, rule, regulation, decision, writ, order, decree or judgment, permit, or any interpretation thereof, promulgated or issued by a Governmental Authority.
“Lender” means, collectively, any Person (i) providing senior or subordinated construction, interim, back-leverage or long-term debt, equity or tax equity, tax credit or cash 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 form of private debt (including back-leverage debt), equity (including tax equity), public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or refinancing for the Facility or purchasing equity ownership interests of Seller or its Affiliates, and any trustee or agent or similar representative acting on their behalf, (ii) providing Interest Rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations or (iii) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Facility. “Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank or a foreign bank with a U.S. branch with such bank having a Credit Rating of at least A- from S&P or A3 from Moody’s, in a form substantially similar to the letter of credit set forth in Exhibit K.
“Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the state of California. “Limited Assignee” has the meaning set forth in Section 14.4. “Local Capacity Area Resource” has the meaning set forth in the CAISO Tariff. “Local RAR” means the local Resource Adequacy Requirements established for load serving entities by the CPUC pursuant to the Resource Adequacy Rulings, the CAISO pursuant to the CAISO Tariff, or by any other Governmental Authority having jurisdiction. “Locational Marginal Price” or “LMP” has the meaning set forth in the CAISO Tariff. “Losses” means, with respect to the Non-Defaulting Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner.
Factors used in determining economic loss to a Party may include reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, and settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term and must include the value of Green Attributes, Capacity Attributes, 18 and Renewable Energy Incentives (calculated on an after-tax basis), and the Parties agree that Seller’s lost revenue under this Agreement resulting from a Buyer Event of Default are direct damages and may be included in Seller’s determination of its Losses. “Lost Output” means the amount of Generating Facility Energy expressed in MWh that the Generating Facility would have produced and delivered to the Storage Facility or the Delivery Point, but that is not produced by the Generating Facility during Force Majeure Events, Curtailment Periods, System Emergencies, or Buyer Failure, which amount shall be calculated using the most recent CAISO VER forecast, to the extent available, or an industry-standard methodology agreed to by Buyer and Seller that utilizes meteorological conditions on Site as input for the period of time during such Force Majeure Events, Curtailment Periods, System Emergencies, or Buyer Failure, less the amount of Generating Facility Energy delivered to the Storage Facility and/or Delivery Point during such period of time (or other relevant period); provided that, if the applicable difference is negative, the Lost Output shall be zero (0). “Major Equipment” means solar modules and battery storage units inclusive of the storage units and inverters.
“Master File” has the meaning set forth in the CAISO Tariff. “Maximum Charging Capacity” means the maximum power output level, in MW, at which the Storage Facility can be charged, as specified in Exhibit Q. “Maximum Discharging Capacity” means the maximum power output level, in MW, at which the Storage Facility can be discharged, as specified in Exhibit Q. “Maximum Import Capability” has the meaning set forth in the CAISO Tariff, and includes any replacement or successor method implemented by the CAISO with respect to the ability of generating units that are external to the CAISO balancing authority area to provide Resource Adequacy Benefits.
“Maximum State of Charge” means the maximum State of Charge to which the Storage Facility may be charged, as set forth in Exhibit Q.
“Maximum Stored Energy Level” means the maximum Stored Energy Level the Storage Facility is capable of achieving, expressed in MWh, as set forth in Exhibit Q. “Milestones” means the development activities for significant permitting, interconnection, financing and construction milestones set forth on the Cover Sheet. “Minimum Efficiency Rate” means the percentage specified on the Cover Sheet. “Minimum State of Charge” means the minimum State of Charge to which the Storage Facility may be discharged, as set forth in Exhibit Q.
“Minimum Stored Energy Level” means the minimum Stored Energy Level the Storage Facility is capable of achieving, expressed in MWh, as set forth in Exhibit Q. 19 “Monthly Delivery Forecast” has the meaning set forth in Section 4.3(b). “Monthly Storage Availability” has the meaning set forth in Exhibit P. “Moody’s” means Moody’s Investors Service, Inc.
“MW” means megawatts in alternating current, unless expressly stated in terms of direct current.
“MWh” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“Negative LMP” means, in any Settlement Interval, the LMP at the Facility’s Pnode is less than Zero Dollars ($0).
“Negative LMP Costs” has the meaning set forth in Exhibit C. “NERC” means the North American Electric Reliability Corporation or any successor entity performing similar functions.
“Net Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “Network Upgrades” has the meaning set forth in the Participating Transmission Owner Tariff.
“New Benefit Legislation” means (i) any newly enacted federal, state, and/or local legislation, as applicable after the Effective Date, or (ii) any new guidance provided by an applicable Government Authority relating to Current Tax Law that, in the case of either (i) or (ii) above, provides for Seller Tax Credit Benefits.
“Non-Defaulting Party” has the meaning set forth in Section 11.2. “Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or electronic messaging (e-mail).
“Operating Instruction” has the meaning set forth in the CAISO Tariff. “Operating Restrictions” means those rules, requirements, and procedures set forth on Exhibit Q.
“Partial Cycle” means a quantity of Discharging Energy (in MWh) that is less than one hundred percent (100%) of the Storage Contract Output.
“Participating Transmission Owner” or “PTO” means an entity that owns, operates and maintains transmission or distribution lines and associated facilities or has entitlements to use certain transmission or distribution lines and associated facilities where the Facility is interconnected. For purposes of this Agreement, the Participating Transmission Owner is set forth in Exhibit A.
20 “Party” or “Parties” has the meaning set forth in the Preamble. “Performance Measurement Period” means each two (2) consecutive Contract Year period during the Delivery Term so that the first Performance Measurement Period shall include Contract Years 1 and 2. Performance Measurement Periods shall overlap, so that if the first Performance Measurement Period is composed of Contract Years 1 and 2, the second Performance Measurement Period shall be composed of Contract Years 2 and 3, the third Performance Measurement Period shall be composed of Contract Years 3 and 4, and so on. “Performance Security” means (a) cash, (b) a Letter of Credit or (c) a Guaranty in the amount set forth on the Cover Sheet.
“Permitted Transferee” means (a) any Affiliate of Seller or (b) any entity that has, or is controlled by another Person that satisfies the following requirements:
(i) A tangible net worth of not less than One Hundred Fifty Million Dollars ($150,000,000) or a Credit Rating of at least BBB- from S&P, BBB- from Fitch, or Baa3 from Moody’s; and
(ii) At least two (2) years of experience in the ownership and operations of power generation facilities similar to the Facility, or has retained a third party with such operations experience to operate the Facility.
“Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“Pnode” has the meaning set forth in the CAISO Tariff.
“Planned Outage” means, subject to and as further described in the CAISO Tariff, a CAISO-approved planned or scheduled disconnection, separation or reduction in capacity of the Facility that is conducted for the purposes of carrying out routine repair or maintenance of such Facility, or for the purposes of new construction work for such Facility. “Portfolio Content Category 1” or “PCC1” means any Renewable Energy Credit associated with the generation of electricity from an Eligible Renewable Energy Resource consisting of the portfolio content set forth in California Public Utilities Code Section 399.16(b)(1), as may be amended from time to time or as further defined or supplemented by Law.
“Product” has the meaning set forth on the Cover Sheet. “Progress Report” means a progress report including the items set forth 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 otherwise engaged in or approved by a significant portion of the electric industry during the relevant time period with 21 respect to grid-interconnected, utility-scale generating facilities with integrated storage in the Western United States, or (b) any of the practices, methods and acts which, in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Prudent Operating Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to acceptable practices, methods or acts generally accepted in the industry with respect to grid-interconnected, utility-scale generating facilities with integrated storage in the Western United States. Prudent Operating Practice includes compliance with applicable Laws, applicable reliability criteria, and the criteria, rules and standards promulgated in the National Electric Safety Code and the National Electrical Code, as they may be amended or superseded from time to time, including the criteria, rules and standards of any successor organizations.
“Pseudo-Tie Participating Generator Agreement” has the meaning set forth in the CAISO Tariff.
“Pseudo-Tie Resource” means a facility that is party to a Pseudo-Tie Participating Generator Agreement with the CAISO, which allows for Capacity Attributes from the facility to be imported into the CAISO as “unit-specific” or “resource specific” import resource adequacy capacity pursuant to applicable decisions of the CPUC.
“PTC” means the production tax credit established pursuant to Section 45 of the United States Internal Revenue Code of 1986.
“PTC Amount” means the amount, on a dollar per MWh basis, equal to the PTC that Seller would have earned in respect of Generating Facility Energy at the time, grossed up on an after-tax basis at the then-highest marginal combined federal and state corporate tax rate, but failed to earn as a result of Buyer Bid Curtailment or Buyer Curtailment Order, which amount will be calculated by reference to the amount of Deemed Delivered Energy and the portion of the Generating Facility eligible to receive PTCs at the time of determination.
“Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “RA Compliance Showing” means the (a) Local RAR compliance or advisory showings (or similar or successor showings), (b) RAR compliance or advisory showings (or similar or successor showings), and (c) Flexible RAR compliance or advisory 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 Shortfall Month as calculated in accordance with Section 3.8(b). “RA Guarantee Date” means the date that is the earlier of (a) the date that is three (3) months following the Commercial Operation Date or (b) the date that is first month the Facility is on a Supply Plan; provided, the Storage Rate shall be $ /kW-month for the period between the Commercial Operation Date and the RA Guarantee Date.
22 “RA Shortfall” means the greater of:
(a) the difference, expressed in kW, of the then applicable Guaranteed Net Qualifying Capacity of the Facility, minus (i) the then applicable Net Qualifying Capacity of the Facility that may be included in Supply Plans for Buyer by both the CAISO and CPUC, which shall be deemed to be zero (0) MW if the Net Qualifying Capacity has not been published by or otherwise established with the CAISO or the CPUC by the Notification Deadline for such RA Shortfall Month, minus (ii) Deemed Delivered RA, if any, minus (iii) Replacement RA, if any; and (b) the difference, expressed in kW, of the then-applicable Guaranteed Flexible Capacity of the Facility, minus (i) the then applicable Flexible Capacity of the Facility that may be included in Supply Plans for Buyer by both the CAISO and CPUC, which shall be deemed to be zero (0) MW if the Flexible Capacity has not been published by or otherwise established with the CAISO by the Notification Deadline for such RA Shortfall Month, minus (ii) Deemed Delivered RA, if any minus (iii) Replacement RA, if any.
“RA Shortfall Month” means, for purposes of calculating an RA Deficiency Amount under Section 3.8(b), any Showing Month, commencing with the Showing Month that contains the RA Guarantee Date, during which there is an RA Shortfall. “RA Substitute Capacity” has the meaning set forth in the CAISO Tariff. “Ramp Rate” means the ability of the Storage Facility to change between power output levels, expressed in MWAC/min.
“Real-Time Forecast” means any Notice of any change to the Available Generating Capacity, Storage Capacity, or hourly expected Energy delivered by or on behalf of Seller pursuant to Section 4.3(d).
“Real-Time Market” has the meaning set forth in the CAISO Tariff. “Real-Time Price” means the Resource-Specific Settlement Interval LMP as defined in the CAISO Tariff. If there is more than one applicable Real-Time Price for the same period of time, Real-Time Price shall mean the price associated with the smallest time interval. “Recurring Certificate Transfers” has the meaning set forth in Section 4.10(a). “Remedial Action Plan” has the meaning set forth in Section 2.4. “Renewable Energy Credit” has the meaning set forth in California Public Utilities Code Section 399.12(h), as may be amended from time to time or as further defined or supplemented by Law.
“Renewable Energy Incentives” means: (a) any federal, state, or local tax benefits, credits or other incentives associated with the construction, ownership, or production of electricity from the Facility (including credits under Sections 38, 45, 46 and 48 of the Internal Revenue Code of 1986, as amended), investment tax credits, production tax credits, depreciation, amortization, deduction, expense, exemption, preferential rate, and/or other tax benefit or incentive associated
24 the Resource Adequacy Rulings for resource-specific Resource Adequacy Resources that are not directly connected to the CAISO, including CPUC Decisions 05-10-042 and 20-06-028. “S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of The McGraw-Hill Companies, Inc.).
“Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” and “Scheduling” have corollary meanings.
“Scheduled Energy” means the Facility Energy that clears under the applicable CAISO market based on the final Day-Ahead Schedule, FMM Schedule (as defined in the CAISO Tariff), or any other financially binding Schedule, market instruction or dispatch for the Facility for a given period of time implemented in accordance with the CAISO Tariff. “Scheduling Coordinator” or “SC” means an entity certified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff for the purposes of undertaking the functions specified in “Responsibilities of a Scheduling Coordinator,” of the CAISO Tariff, as amended from time to time.
“Security Interest” has the meaning set forth in Section 8.9. “Self-Schedule” has the meaning set forth in the CAISO Tariff. “Seller” has the meaning set forth on the Cover Sheet.
“Seller Initiated Test” has the meaning set forth in Section 4.9(b). “Seller Tax Credit Benefits” means the value of any ITC or PTC or other tax benefit resulting from New Benefit Legislation available to the Facility in excess of the Base Case ITC or Base Case PTC, as applicable, but only to the extent that such excess value actually inures to the benefit of Seller (or any of its Affiliates or financing parties). “Seller’s WREGIS Account” has the meaning set forth in Section 4.10(a). “Settlement Amount” means the Non-Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Party. If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be Zero Dollars ($0). The Settlement Amount does not include consequential, incidental, punitive, exemplary, or indirect or business interruption damages unless such damages are part of a Party’s gains, Losses or Costs as those terms are explicitly defined herein. “Settlement Interval” has the meaning set forth in the CAISO Tariff. “Settlement Period” has the meaning set forth in the CAISO Tariff. “Shared Facilities” means the gen-tie lines, transformers, substations, or other equipment, permits, contract rights, and other assets and property (real or personal), in each case, as necessary 25 to enable delivery of Energy from the Facility (which is excluded from Shared Facilities) to the point of interconnection, including the Interconnection Agreement itself, that are used in common with third parties or by Seller for electric generation or storage facilities owned by Seller other than the Facility.
“Showing Month” shall be the calendar month of the Delivery Term, commencing with the Showing Month that contains the RA Guarantee Date, that is the subject of the RA Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the CAISO Tariff. For illustrative purposes only, pursuant to the CAISO Tariff and Resource Adequacy Rulings in effect as of the Effective Date, the monthly RA Compliance Showing made in June is for the Showing Month of August.
“Site” means the real property on which the Facility is or will be located, as further described in Exhibit A, and as shall be updated by Seller at the time Seller provides an executed Construction Start Date certificate in the form of Exhibit J to Buyer; provided, the Site must be within the boundaries of the previously identified Site. Seller will be permitted to remove parcels that are not included in the Site, if any, at the time Seller provides an executed Construction Start Date certificate in the form of Exhibit J to Buyer; such update, if any, will be automatically incorporated into Exhibit A and replace the information set forth as of the Effective Date without any further action of the Parties.
“Site Control” means that, on and after the Construction Start Date, Seller (or, prior to the Construction Start Date, 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. “SP-15” means the Existing Zone Generation Trading Hub for Existing Zone region SP15 as set forth in the CAISO Tariff.
“State of Charge” or “SOC” means the ratio of (a) the Stored Energy Level of the Facility to (b) the Storage Capacity multiplied by four (4) hours, expressed as a percentage. “Station Use” means the Energy that is used within the Facility to power certain lights, motors, temperature control systems, control systems and other ancillary electrical loads that are necessary for operation of the Facility; provided, however, Station Use excludes all Auxiliary Loads served during periods in which the Storage Facility is charging or discharging pursuant to a Charging Notice or Discharging Notice.
“Storage Capacity” means (a) the maximum dependable operating capability of the Storage Facility to discharge Energy at the Interconnection Point that can be sustained for four (4) consecutive hours and (b) any other products that may be developed or evolve from time to time during the Contract Term that the Storage Facility is able to provide as the Facility is configured on the Commercial Operation Date and that relate to the maximum dependable operating capability of the Storage Facility to discharge Energy as the same shall be determined pursuant to Section
4.9 and Exhibit O to reflect the results of the most recently performed Storage Capacity Test, in either case (a) or (b) up to but not in excess of the Storage Contract Capacity as set forth on the Cover Sheet.
26 “Storage Capacity Damages” has the meaning set forth in Exhibit B. “Storage Capacity Test” or “SCT” means any test or retest of the capacity of the Storage Facility and/or Efficiency Rate conducted in accordance with the testing procedures, requirements and protocols set forth in Section 4.9 and Exhibit O.
“Storage Contract Capacity” means the total capacity of the Storage Facility, initially equal to the amount set forth on the Cover Sheet, as the same may be adjusted pursuant to Section 5(b) of Exhibit B.
“Storage Contract Output” means the product of the Storage Contract Capacity multiplied by four (4) hours, represented in MWh, initially equal to the amount set forth on the Cover Sheet.
“Storage Cure Plan” has the meaning set forth in Section 11.1(b)(vii). “Storage Facility” means the energy storage facility described on the Cover Sheet and in Exhibit A, located at the Site and including the Energy Management System and mechanical equipment and associated facilities and equipment required to deliver Storage Product, and as such Storage Facility may be expanded or otherwise modified from time to time in accordance with the terms of this Agreement; provided, “Storage Facility” does not include the Generating Facility, Interconnection Facilities (other than Seller’s Interconnection Facilities), Network Upgrades or the Shared Facilities.
“Storage Facility Meter” means revenue quality meter or meters, along with a data processing gateway or remote intelligence gateway, telemetering equipment and data acquisition services sufficient for monitoring, recording and reporting, in real time, the amount of Charging Energy delivered to the Storage Facility and the amount of Discharging Energy discharged from the Storage Facility to the Delivery Point. The Facility may contain multiple measurement devices that will make up the Storage Facility Meter, and, unless otherwise indicated, references to the Storage Facility Meter shall mean all such measurement devices and the aggregated data of all such measurement devices, taken together.
“Storage Facility Metering Point” means the location or locations of the Storage Facility Meter shown on Exhibit R.
“Storage Product” means (a) Discharging Energy, (b) Capacity Attributes, if any, (c) Storage Capacity, and (d) Ancillary Services (as defined in the CAISO Tariff), if any, in each case arising from or relating to the Storage Facility.
“Storage Rate” has the meaning set forth on the Cover Sheet. “Stored Energy Level” means, at a particular time, the amount of Energy in the Storage Facility available to be discharged as Discharging Energy, expressed in MWh. “Supplementary Storage Capacity Test Protocol” has the meaning set forth in Exhibit O.
27 “Supply Plan” has the meaning set forth in the CAISO Tariff. “System Emergency” means any condition that requires, as determined and declared by CAISO or the PTO, automatic or immediate action to (i) prevent or limit harm to or loss of life or property, (ii) prevent loss of transmission facilities or generation supply in the immediate vicinity of the Facility, or (iii) preserve Transmission System reliability. “Tax” or “Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Terminated Transaction” has the meaning set forth in Section 11.2(a). “Termination Payment” has the meaning set forth in Section 11.3. “Test Energy” means Generating Facility Energy delivered (a) commencing on the later of (i) the first date that the CAISO informs Seller in writing that Seller may deliver Generating Facility Energy to the CAISO and (ii) the first date that the PTO informs Seller in writing that Seller has conditional or temporary permission to parallel and (b) ending upon the occurrence of the Commercial Operation Date.
“Test Energy Rate” has the meaning set forth in Section 3.6. “Test Station Use” means the Energy that is used within the Facility to power certain lights, motors, temperature control systems, control systems and other ancillary electrical loads that are necessary for operation of the Facility (or as otherwise defined by the retail energy provider and CAISO Tariff).
“Throughput” means, at any point in time during any day or Contract Year, as applicable, the total cumulative amount of Discharging Energy from the Storage Facility at such point in time during such day or Contract Year, as applicable (expressed in MWh). “Transformer Failure” means failure of all or part of the main power transformer that results in the Facility being unable to generate and/or deliver at least fifty percent (50%) of the Facility Energy during such failure, and such failure was not caused by Seller and could not have been avoided through the exercise of Prudent Operating Practice. “Transmission Provider” means any entity or entities transmitting or transporting the Facility Energy on behalf of Seller or Buyer to or from the Delivery Point. “Transmission System” means the transmission facilities operated by WAPA, the Transmission Provider or CAISO, now or hereafter in existence, which provide energy transmission service downstream from the Interconnection Point. “Ultimate Parent” means Core Development Group.
28 “Variable Energy Resource” or “VER” has the meaning set forth in the CAISO Tariff. “WAPA” means the Western Area Power Administration, or its successor in function. “WAPA Tariff” means the WAPA Open Access Transmission Tariff, Business Practice Manuals (BPMs), and Operating Procedures, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time to time and approved by FERC, if applicable.
“WREGIS” means the Western Renewable Energy Generation Information System or any successor renewable energy tracking program.
“WREGIS Certificate Deficit” has the meaning set forth in Section 4.10(e). “WREGIS Certificates” has the same meaning as “Certificate” as defined by WREGIS in the WREGIS Operating Rules and are designated as eligible for complying with the California Renewables Portfolio Standard.
“WREGIS Operating Rules” means those operating rules and requirements adopted by WREGIS as of October 2022, as subsequently amended, supplemented or replaced (in whole or in part) from time to time.
1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Section, paragraph, or clause of, or that Party or Exhibit to, this Agreement unless otherwise specified;
(e) a reference to a document or agreement, including this Agreement, means such document, agreement or this Agreement including any amendment or supplement to, or replacement, novation or modification of such document, agreement, or this Agreement, but disregarding any amendment, supplement, replacement, novation or modification made in breach of such document, agreement or this Agreement;
(f) a reference to a Person includes that Person’s successors and permitted assigns;
29 (g) the terms “include” and “including” or similar words means “include without limitation” or “including without limitation” and any list of examples following such term shall in no way restrict or limit the generality of the word or provision in respect of which such examples are provided;
(h) references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires; (i) in the event of a conflict, a mathematical formula or other precise description of a concept or a term shall prevail over words providing a more general description of a concept or a term;
(j) references to any amount of money shall mean a reference to the amount in United States Dollars;
(k) words, phrases or expressions not otherwise defined herein that (i) have a generally accepted meaning in Prudent Operating Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Operating Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings; and
(l) each Party acknowledges that it was represented by counsel in connection with this Agreement and that it or its counsel reviewed this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
ARTICLE 2
TERM; CONDITIONS PRECEDENT
2.1 Contract Term.
(a) The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect until the conclusion of the Delivery Term, subject to any early termination provisions and any contract term extension provisions set forth herein (“Contract Term”); provided, however, subject to Buyer’s obligations in Section 3.6, Buyer’s obligations to pay for or accept any Product are 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 termination, including early termination, to the extent necessary to enforce or complete the duties, obligations or responsibilities of the Parties arising prior to termination. The confidentiality obligations of the Parties under Article 18 and all indemnity and audit rights shall remain in full force and effect for two (2) years following the termination of this Agreement.
2.2 Conditions Precedent. The Commercial Operation Date shall be the date when each of the following requirements have been met to Buyer’s reasonable satisfaction:
30 (a) Seller has delivered to Buyer (i) a completion certificate from a Licensed Professional Engineer substantially in the form of Exhibit H and (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit I setting forth the Installed Capacity on the Commercial Operation Date;
(b) A Pseudo-Tie Participating Generator Agreement and a Meter Service Agreement, as applicable, between Seller and CAISO shall have been executed and delivered and be in full force and effect, and a copy of each such agreement delivered to Buyer; (c) Seller has obtained rights to Firm Transmission sufficient to deliver one hundred sixty (160) MWAC of capacity from the Facility to the Delivery Point, and has provided documentation of the same to Buyer;
(d) An Interconnection Agreement between Seller (or Seller’s Affiliate) and the PTO shall have been executed and delivered and be in full force and effect and a copy of the Interconnection Agreement delivered to Buyer;
(e) All applicable regulatory authorizations, approvals and permits for operation of the Facility have been obtained and all conditions thereof that are capable of being satisfied on the Commercial Operation Date have been satisfied (or if not capable of being satisfied before the Commercial Operation Date, within one hundred eighty (180) days of the Commercial Operation Date) and shall be in full force and effect, and Seller has delivered to Buyer an attestation certificate from an officer of Seller certifying to the satisfaction of this condition; (f) Seller has received CEC Precertification 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); (g) Seller (with the reasonable participation of Buyer) shall have completed all applicable WREGIS registration requirements, including the completion and submittal of all applicable registration forms and supporting documentation; (h) The Facility has successfully completed all testing required by Prudent Operating Practice or any requirement of Law to operate the Facility; (i) Insurance requirements for the Facility have been met, with evidence provided in writing to Buyer, in accordance with Section 17.1; (j) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8; and
(k) Seller has paid Buyer for all amounts then-owing under this Agreement, if any, including Construction Delay Damages and Commercial Operation Delay Damages.
2.3 Development; Construction; Progress Reports. Within fifteen (15) days after the close of (i) each calendar quarter from the first calendar quarter following the Effective Date until the Construction Start Date, and (ii) each calendar month from the first calendar month following the Construction Start Date until the Commercial Operation Date, Seller shall provide 31 to Buyer a Progress Report and agree to regularly scheduled telephonic or video conferenced meetings (unless otherwise agreed to by the Parties) between representatives of Buyer and Seller to review such monthly reports and discuss Seller’s construction progress. The form of the Progress Report is set forth in Exhibit E. Seller shall also provide Buyer with any reasonably requested documentation (subject to confidentiality restrictions) directly related to the achievement of Milestones within ten (10) Business Days of receipt of such request by Buyer. For the avoidance of doubt, Seller is solely responsible for the design and construction of the Facility, including the location of the Site, obtaining all permits and approvals to build the Facility, the Facility layout, and the selection and procurement of the equipment comprising the Facility.
2.4 Remedial Action Plan. If Seller misses any Milestone by more than ninety (90) days, except as the result of Force Majeure Event or Buyer Failure, Seller shall submit to Buyer, within ten (10) Business Days of such missed Milestone completion date, a remedial action plan (“Remedial Action Plan”), which will describe in detail any delays (actual or anticipated) beyond the scheduled Milestone dates, including the cause of the delay (e.g., governmental approvals, financing, property acquisition, design activities, equipment procurement, project construction, interconnection, or any other factor), Seller’s detailed description of its proposed course of action to achieve the missed Milestones and all subsequent Milestones by the Guaranteed Commercial Operation Date (including any extension thereof); provided, that delivery 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 Guaranteed Commercial Operation Date in accordance with the terms 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.
ARTICLE 3
PURCHASE AND SALE
3.1 Purchase and Sale of Product. Subject to the terms and conditions of this Agreement, during the Delivery Term, Buyer will purchase and receive all the Product produced by or associated with the Facility at the Contract 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 Delivery Term re-sell all or a portion of the Product; provided that no such resale or use shall relieve Buyer of any obligations hereunder, including under Section 5.2. During the Delivery Term, Buyer will have exclusive rights to offer, bid, or otherwise submit the Product, or any Capacity Attributes thereof, from the Facility after the Delivery Point for resale in the market, and retain and receive any and all related revenues. Subject to Buyer’s obligation to purchase Capacity Attributes and Storage Product in accordance with this Section 3.1 and Exhibit C, Buyer has no obligation to purchase from Seller any Generating Facility Energy that is not or cannot be delivered to the Delivery Point as a result of an outage of the Facility, a Force Majeure Event, or a Curtailment Order.
3.2 Sale of Green Attributes. During the Delivery Term, Seller shall sell and deliver to Buyer, and Buyer shall purchase from Seller, all Green Attributes attributable to the Generating Facility Energy.
32 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 Scheduled Energy. To the extent there are such deviations, any costs or revenues from Imbalance Energy shall be allocated to the Party that is acting as Scheduling Coordinator for the Facility except that if Imbalance Energy results from outage or reduction in the availability of the Facility that is not communicated to Buyer within the timelines required as set forth herein, then Seller will be responsible and will pay directly or promptly reimburse Buyer (and Buyer may offset amounts owed to Seller if not promptly paid by Seller) for the aggregate Imbalance Energy charges assessed, net of Imbalance Energy revenues earned during the period of noncompliance and reasonably attributable to such noncompliance, provided that Buyer will use reasonable efforts to minimize the amount of any such Imbalance Energy charges.
3.4 Ownership of Renewable Energy Incentives. Seller shall have all right, 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 transferred 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 certification, registration, or reporting 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 Green 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 3.12, 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 Parties shall determine the necessary actions and additional costs associated with such Future Environmental Attributes. Seller shall have no obligation to alter the Facility or the operation of the Facility to reduce the Generating Facility Energy or to operate the Storage Facility inconsistent with the Operating Restrictions unless the Parties have agreed on all necessary terms and conditions relating to such alteration or changes in operation and Buyer has agreed to reimburse Seller for all costs, losses, and liabilities associated with such alteration or changes in operation, if any. (b) If Buyer elects to receive Future Environmental Attributes pursuant to Section 3.5(a), the Parties agree to negotiate in good faith with respect to the development of further agreements and documentation necessary to effectuate the transfer of such Future Environmental Attributes, including agreement with respect to (i) appropriate transfer, delivery and risk of loss mechanisms, and (ii) appropriate allocation of any additional costs to Buyer, as set forth above; provided, that the Parties acknowledge and agree that such terms are not intended to alter the other material terms of this Agreement.
34 (e) Notwithstanding anything to the contrary in this Agreement, Seller shall be permitted to reduce deliveries of Capacity Attributes and Resource Adequacy Benefits during any Force Majeure Event that results in Seller’s inability, despite the use of commercially reasonable efforts, to deliver Capacity Attributes.
(f) If Seller anticipates it will have an RA Shortfall in any month of the Delivery Term, Seller may provide Replacement RA up to the anticipated RA Shortfall, provided Seller provides Buyer with Replacement RA product information in a Notice substantially in the form of Exhibit M at least forty-five (45) days before the RA Compliance Showing deadline for the applicable Showing Month
3.8 Resource Adequacy Failure.
(a) RA Deficiency Determination. For each RA Shortfall Month, Seller shall pay to Buyer the RA Deficiency Amount as liquidated damages as the sole remedy for the Capacity Attributes Seller failed to convey to Buyer.
(b) RA Deficiency Amount Calculation. Commencing on the RA Guarantee Date, for each RA Shortfall Month, Seller shall pay to Buyer an amount (the “RA Deficiency Amount”) equal to the product of the RA Shortfall multiplied by the sum of (i) the CPM Soft Offer Cap and (ii) the CPUC Tier 1 System RA Penalty.
3.9 CEC Certification and Verification. Seller shall take all necessary steps including, but not limited to, making or supporting timely filings with the CEC to obtain and maintain CEC Certification and Verification for the Facility throughout the Delivery Term, including compliance with all applicable requirements for certified facilities set forth in the current version of the RPS Eligibility Guidebook (or its successor). Seller shall obtain CEC Precertification by the Commercial Operation Date. Within thirty (30) days after the Commercial Operation Date, Seller shall apply with the CEC for final CEC Certification and Verification.
Within one hundred eighty (180) days after the Commercial Operation Date, which deadline will be extended on a day-for-day basis if there is a delay in CEC Certification and Verification and that delay is caused by any reason other than an act or omission of Seller, Seller shall obtain and maintain throughout the remainder of the Delivery Term the final CEC Certification and Verification. Seller must promptly notify Buyer and the CEC of any changes to the information included in Seller’s application for CEC Certification and Verification for the Facility.
3.10 Reserved.
3.11 California Renewables Portfolio Standard.
(a) Eligibility. Seller, and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement that: (i) the Facility qualifies and is certified by the CEC as an Eligible Renewable Energy Resource as such term is defined in California Public Utilities Code Section 399.12 or Section 399.16; and (ii) the Facility’s electrical energy output delivered to Buyer qualifies under the requirements of the California Renewables Portfolio Standard. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. The term 35 “commercially reasonable efforts” as used in this Section 3.11 means efforts consistent with and subject to Section 3.12. [STC 6].
(b) Transfer of Renewable Energy Credits. Seller, and, if applicable, its successors, represents and warrants that throughout the Delivery Term of this Agreement the renewable energy credits transferred to Buyer conform to the definition and attributes required for compliance with the California Renewables Portfolio Standard, as set forth in California Public Utilities Commission Decision 08-08-028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. [STC REC-1]. (c) Tracking of RECs in WREGIS. Seller warrants that all necessary steps to allow the Renewable Energy Credits transferred to Buyer to be tracked in WREGIS will be taken prior to the first delivery under this Agreement. [STC REC-2].
3.12 Compliance Cost Cap.
(a) The Parties acknowledge that an essential purpose of this Agreement is to provide renewable generation that meets the requirements of the California Renewables Portfolio Standard and that Governmental Authorities, including the CEC, CPUC, CAISO and WREGIS, may undertake actions to implement changes in Law. Seller agrees to use commercially reasonable efforts to cooperate with respect to any future changes to this Agreement needed to satisfy requirements of Governmental Authorities associated with changes in Law to maximize benefits to Buyer, including: (i) the modification of the description of Green Attributes and/or Capacity Attributes as may be required, including updating the Agreement to reflect any mandatory contractual language required by Governmental Authorities; (ii) submission of any reports, data, or other information required by Governmental Authorities; or (iii) all other actions that may be required to ensure that this Agreement or the Facility is eligible as an Eligible Renewable Energy Resource and for other benefits under the California Renewables Portfolio Standard; provided, Seller shall have no obligation to modify this Agreement, or take other actions not required under this Agreement, if such modifications or actions would materially adversely affect, or could reasonably be expected to have or result in a material adverse effect on, any of Seller’s rights, benefits, risks and/or obligations under this Agreement. (b) If a change in Law occurring after the Effective Date increases Seller’s known or reasonably expected costs and expenses to comply with Seller’s obligations under this Agreement with respect to obtaining, maintaining, conveying or effectuating Buyer’s use of Green Attributes or Capacity Attributes in accordance with Sections 3.2, 3.7, 3.8, 3.9, 3.11, 4.3(g), 4.10, and 4.12 (any action required to be taken by Seller to comply with such change in Law, a “Compliance Action”), then the Parties agree that the maximum aggregate amount of costs and expenses Seller shall be required to bear during the Delivery Term to comply with all such Compliance Actions shall be capped at Dollars ($ ) per MW of Contract Capacity, in the aggregate over the Delivery Term of the Agreement (“Compliance Cost Cap”); provided, the maximum amount that Seller shall be required to pay to comply with Compliance Actions during any single Contract Year shall be capped at Dollars ($ ) per 36 MW of Contract Capacity (“Annual Cost Cap”); provided, further, Seller shall reimburse Buyer for amounts in excess of the Annual Cost Cap in the immediately following Contract Year(s) up to the amount of the Compliance Cost Cap for any Compliance Action costs paid by Buyer. (c) If Seller reasonably anticipates the need to incur out-of-pocket expenses in excess of the Compliance Cost Cap or Annual Cost Cap in order to take any Compliance Action, Seller shall provide Notice to Buyer of such anticipated out-of-pocket expenses; provided, Compliance Actions shall not include any requirement of Seller to increase the Storage Capacity beyond the Storage Contract Capacity.
(d) Buyer will have sixty (60) days to evaluate such Notice (during which time period Seller is not obligated to take any Compliance Actions described in the Notice) and shall, within such time, either (1) agree to reimburse Seller for all of the costs that exceed Compliance Cost Cap or Annual Cost Cap (as applicable) (such Buyer agreed upon costs (including lost production, if any), the “Accepted Compliance Costs”), or (2) waive Seller’s obligation to take such Compliance Actions, or any part thereof for which Buyer has not agreed to reimburse Seller. (e) If Buyer agrees to reimburse Seller for the Accepted Compliance Costs, then Seller shall take such Compliance Actions covered by the Accepted Compliance Costs as agreed upon by the Parties and Buyer shall reimburse Seller for Seller’s actual costs to effect the Compliance Actions, not to exceed the Accepted Compliance Costs, within sixty (60) days from the time that Buyer receives an invoice and documentation of such costs from Seller.
Any change in the value of any attributes provided by Seller to Buyer resulting from any change in Law shall not affect the Contract Price or Buyer’s obligation to pay Seller for any attributes delivered.
3.13 Project Configuration. In order to optimize the benefits of the Facility, Buyer and Seller each agree that if requested by the other Party, then Buyer and Seller will discuss in good faith potential reconfiguration of the Facility or Interconnection Facilities, including the use of grid energy (i.e., energy not produced by the Generating Facility) to provide Charging Energy; provided, neither Party shall be obligated to agree to any changes under this Agreement, or to incur any expense in connection with such changes, except under terms mutually acceptable to both Parties (and Seller’s Lenders) in their sole discretion as set forth in a written agreement executed by the Parties.
ARTICLE 4
OBLIGATIONS AND DELIVERIES
4.1 Delivery.
(a) Facility Energy. Subject to the provisions of this Agreement, commencing on the Commercial Operation Date and continuing through the end of the Contract Term, Seller shall supply and deliver Facility Energy to Buyer at the Delivery Point, and Buyer shall take delivery of the Facility Energy at the Delivery Point in accordance with the terms of this Agreement. Seller shall be responsible for paying or satisfying when due any costs or charges imposed in connection with the delivery of Facility Energy to the Delivery Point, including without limitation Idle Period Auxiliary Load, Electrical Losses, any costs associated with delivering the
38 (c) Day-Ahead Forecast. By 5:30 a.m. Pacific Prevailing Time on the Business Day immediately preceding the date of delivery, or as otherwise specified by Buyer consistent with Prudent Operating Practice, Seller shall provide Buyer with a non-binding forecast of (i) Available Generating Capacity, (ii) Storage Capacity and (iii) hourly expected Energy, in each case, for each hour of the immediately succeeding day; provided, however, that the forecast of hourly expected Energy shall be deemed to be provided so long as Buyer has access to the CAISO day-ahead VER forecast (“Day-Ahead Forecast”). A Day-Ahead Forecast provided in a day prior to any non-Business Day(s) shall include non-binding forecasts for the immediate day, each succeeding non-Business Day and the next Business Day. Each Day-Ahead Forecast shall clearly identify, for each hour, Seller’s best estimate of (i) the Available Generating Capacity, (ii) the Storage Capacity and (iii) the hourly expected Energy; provided, however, that the forecast of hourly expected Energy shall be deemed to be provided so long as Buyer has access to the CAISO day-ahead VER forecast. These Day-Ahead Forecasts shall be sent to Buyer’s SC. If Seller fails to provide Buyer with a Day-Ahead Forecast as required herein for any period, then for such unscheduled delivery period only Buyer shall rely on any Real-Time Forecast provided in accordance with Section 4.3(d) or the Monthly Delivery Forecast or Buyer’s best estimate based on information reasonably available to Buyer.
(d) Real-Time Forecasts. During the Delivery Term, Seller shall notify Buyer and the SC (if applicable) of any changes from the Day-Ahead Forecast of one (1) MW or more, or one (1) MWh or more, as applicable, in (i) Available Generating Capacity, (ii) Storage Capacity or (iii) hourly expected Energy, in each case, whether due to Forced Facility Outage, Force Majeure or other cause, as soon as reasonably possible; provided, however, that the forecast of hourly expected Energy shall be deemed to be provided so long as Buyer has access to the CAISO real-time VER forecast. Such Real-Time Forecasts of Energy shall be provided by an Approved Forecast Vendor and shall contain information regarding the beginning date and time of the event resulting in the change in Available Generating Capacity, Storage Capacity, or hourly expected Energy, as applicable; the expected end date and time of such event; and any other information required by the CAISO or reasonably requested by Buyer. With respect to any Forced Facility Outage, Seller shall use best efforts to notify Buyer and the SC (if applicable) of such outage within ten (10) minutes of the commencement of the Forced Facility Outage. Seller shall inform Buyer and the SC (if applicable) of any developments that will affect either the duration of such outage or the availability of the Facility during or after the end of such outage. These Real-Time Forecasts shall be communicated in a method reasonably acceptable to Seller; provided that Buyer specifies the method no later than five (5) Business Days prior to the effective date of such requirement. In the event Buyer fails to provide Notice of an acceptable method for communications under this Section 4.3(d), then Seller shall send such communications by telephone and e-mail to Buyer. (e) Forced Facility Outages. Notwithstanding anything to the contrary herein, Seller shall promptly notify Buyer’s SC of Forced Facility Outages and Seller shall keep Buyer informed of any developments that will affect either the duration of the outage or the availability of the Facility during or after the end of the outage.
(f) Forecasting Penalties. Subject to a Force Majeure Event, in the event Seller does not in a given hour provide the forecast required in Section 4.3(d) and Buyer incurs a loss or penalty resulting from its scheduling activities with respect to Generating Facility Energy during such hour, Seller shall be responsible for a Forecasting Penalty for each such hour. Settlement of 39 Forecasting Penalties shall occur as set forth in Article 8 of this Agreement. For clarification, failure of the CAISO to provide the VER forecast (excluding permanent discontinuance of providing the VER forecast or any successor forecast) shall be a Force Majeure Event for the purposes of this Section 4.3(f) and relieve Seller of any Forecasting Penalties. (g) CAISO Tariff Requirements. Subject to the limitations expressly set forth in Section 3.12, Seller will comply with all applicable obligations for Hybrid Resources, Variable Energy Resources, and the Eligible Intermittent Resource Protocol under the CAISO Tariff, including providing appropriate operational data, such as metering, telemetry and meteorological data to Buyer’s SC and the CAISO, as necessary. Seller will fully cooperate with Buyer, Buyer’s SC, and CAISO in providing all data, information, and authorizations required thereunder. (h) Meteorological and Storage Facility Status Data. Seller shall provide to Buyer’s SC the following real-time data at a granularity of no less than five (5) minutes:
(i) Generating Facility point-of-array irradiance;
(ii) Generating Facility Energy delivered to the Generating Facility Meter;
(iii) Ambient temperature at the Site;
(iv) Storage Facility operational capacity;
(v) Discharging Energy delivered to the Storage Facility Meter; (vi) State of Charge;
(vii) Stored Energy Level;
(viii) Automated Dispatch System (as defined in the CAISO Tariff) and Automatic Generation Control (as defined in the CAISO Tariff) set points; and
(ix) High Sustainable Limit (as defined in the CAISO).
4.4 Dispatch Down/Curtailment.
(a) General. Seller agrees to reduce the amount of Generating Facility Energy produced by the Generating Facility by the amount and for the period set forth in any Curtailment Order, Buyer Curtailment Order, or notice received from CAISO in respect of a Buyer Bid Curtailment; provided, Seller is not required to reduce such amount to the extent it is inconsistent with the operating limitations of the Generating Facility. Buyer shall use commercially reasonable efforts to cause Generating Facility Energy that is subject to a Curtailment Order to be used as Charging Energy.
(b) Buyer Curtailment. Buyer shall have the right to order Seller to curtail deliveries of Generating Facility Energy through Buyer Curtailment Orders; provided, Buyer shall 40 pay Seller for all Deemed Delivered Energy associated with a Buyer Curtailment Period at the Renewable Rate and, if applicable, the PTC Amount, in accordance with Exhibit C. (c) Failure to Comply. If Seller fails to comply with a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order, then, for each MWh of Generating Facility Energy that is delivered by the Facility to the Delivery Point in contradiction to the Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order, Seller shall pay Buyer for each such MWh at an amount equal to the sum of (A) + (B) + (C), where (A) is the amount, if any, paid to Seller by Buyer for delivery of such excess MWh, (B) is the sum, for all Settlement Intervals with a Negative LMP during the Buyer Curtailment Period or Curtailment Period, of the absolute value of the product of a) such excess MWh in each Settlement Interval and b) the difference between the Negative LMP and Buyer’s offer price (if applicable pursuant to a Buyer Bid Curtailment) for such Settlement Interval, and (C) is any penalties assessed by the CAISO or other charges assessed by the CAISO resulting from Seller’s failure to comply with the Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order. Such calculations shall exclude any Generating Facility Energy delivered to the Delivery Point in compliance with CAISO protocols while the Generating Facility is ramping up or ramping down during the Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order. (d) Seller Equipment Required for Curtailment Instruction Communications.
Seller shall acquire, install, and maintain such facilities, communications links and other equipment as are required under the CAISO Tariff, and implement such protocols and practices, as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, to operate the Facility as directed by the Buyer in accordance with this Agreement or a Governmental Authority, including to implement a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order in accordance with the then-current methodology used to transmit such instructions as it may change from time to time. If at any time during the Delivery Term Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with then-current methodologies applicable to the Facility and required by CAISO, Seller shall take the steps necessary to become compliant as soon as reasonably possible.
Seller shall be liable pursuant to Section 4.4(c) for failure to comply with a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order during the time that Seller’s facilities, communications links or other equipment, protocols or practices are not in compliance with then-current methodologies. For the avoidance of doubt, a Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order communication via such systems and facilities shall have the same force and effect on Seller as any other form of communication.
4.5 Charging Energy Management.
(a) Generally. Upon receipt of a valid Charging Notice, Seller shall take any and all action necessary to deliver Charging Energy from the Generating Facility to the Storage Facility in order to deliver the Storage Product in accordance with the terms of this Agreement, including maintenance, repair or replacement of equipment in Seller’s possession or control used to deliver Charging Energy from the Generating Facility to the Storage Facility. (b) Charging Notices. During the Delivery Term, Buyer will have the right to charge the Storage Facility seven (7) days per week and twenty-four (24) hours per day (including 41 holidays) by providing Charging Notices to Seller electronically; provided, that Buyer’s right to issue Charging Notices is subject to the requirements and limitations set forth in this Agreement, including the Operating Restrictions. Each Charging Notice issued in accordance with this Agreement will be effective unless and until such Charging Notice is modified with an updated Charging Notice (including as automatically updated in accordance with the definition of Charging Notice). Seller shall comply with all Charging Notices, subject to the requirements and limitations set forth in this Agreement.
(c) No Unauthorized Charging. Seller shall not charge the Storage Facility during the Delivery Term other than pursuant to a valid Charging Notice, in connection with a Seller Initiated Test (including Facility maintenance or a Storage Capacity Test), or pursuant to a notice from CAISO, the PTO, Transmission Provider, or any other Governmental Authority. If, during the Delivery Term, Seller (i) charges the Storage Facility to a Stored Energy Level greater than the Stored Energy Level provided for in the Charging Notice or (ii) charges the Storage Facility in violation of the first sentence of this Section 4.5(c), then (x) Seller shall be responsible for all Energy costs associated with such charging of the Storage Facility, (y) Buyer shall not be required to pay for the charging of such Energy (i.e., Charging Energy), and (z) Buyer shall be entitled to discharge such Energy and entitled to all of the benefits (including Storage Product) associated with such discharge; provided, this Section 4.5(c) shall not apply to the extent there is Imbalance Energy that is typical of this type of Facility with an operator using Prudent Operating Practices. If at any time the sum of the Generating Facility Energy and the Discharging Energy would exceed the Dedicated Interconnection Capacity, the applicable Discharging Notice shall be deemed to be modified to reduce the amount of Discharging Energy so that the total Facility Energy does not exceed the Dedicated Interconnection Capacity. (d) Discharging Notices. During the Delivery Term, Buyer will have the right to discharge the Storage Facility seven (7) days per week and twenty-four (24) hours per day (including holidays) by providing Discharging Notices to Seller electronically and subject to the requirements and limitations set forth in this Agreement, including the Operating Restrictions.
Seller shall comply with all Discharging Notices, subject to the requirements and limitations set forth in this Agreement. Each Discharging Notice issued in accordance with this Agreement will be effective unless and until Buyer modifies such Discharging Notice by providing Seller with an updated Discharging Notice.
(e) No Unauthorized Discharging. Seller shall not discharge the Storage Facility during the Delivery Term other than pursuant to a valid Discharging Notice, in connection with a Seller Initiated Test (including Facility maintenance or a Storage Capacity Test), or pursuant to a notice from CAISO, the PTO, Transmission Provider, or any other Governmental Authority.
If, during the Contract Term, Seller (i) discharges the Storage Facility other than as provided for in the Discharging Notice or (ii) discharges the Storage Facility in violation of the first sentence of this Section 4.5(c), then (x) Seller shall be responsible for all Energy costs associated with such discharging of the Storage Facility, (y) Buyer shall not be required to pay for the discharging of such Energy (i.e., Discharging Energy), and (z) Buyer shall be entitled to all of the benefits (including Storage Product) associated with such discharge; provided, this Section 4.5(e) shall not apply to the extent there is Imbalance Energy that is typical of this type of Facility with an Operator using Prudent Operating Practices.
42 (f) Curtailments. Notwithstanding anything in this Agreement to the contrary, during any Settlement Interval, Curtailment Orders, Buyer Curtailment Orders, and Buyer Bid Curtailments applicable to such Settlement Interval shall have priority over any Charging Notices and Discharging Notices applicable to such Settlement Interval, and Seller shall have no liability for violation of this Section 4.5 or any Charging Notice or Discharging Notice if and to the extent such violation is caused by Seller’s compliance with any Curtailment Order, Buyer Curtailment Order, Buyer Bid Curtailment or other instruction or direction from a Governmental Authority or the PTO or the Transmission Provider. Buyer shall have the right, but not the obligation, to provide Seller with updated Charging Notices and Discharging Notices during any Buyer Curtailment Order, Buyer Bid Curtailment or Curtailment Order consistent with the Operating Restrictions. (g) Pre-Commercial Operation Date Period, Etc. Prior to the Commercial Operation Date, (i) Buyer shall have no rights to issue or cause to be issued Charging Notices or Discharging Notices, (ii) Seller shall have exclusive rights to test, charge and discharge the Storage Facility, and (iii) all CAISO costs, revenues, penalties and other amounts owing to or paid by CAISO in respect of the Storage Facility shall be for Seller’s account. Seller is responsible to procure, at its own cost, any energy required for commissioning purposes and to arrange to discharge such energy into the grid. Upon the Commercial Operation Date, Buyer shall have exclusive rights to issue or cause to be issued Charging Notices or Discharging Notices and all CAISO costs, revenues, penalties and other amounts owing to or paid by CAISO in respect of the Storage Facility operations shall be for Buyer’s account. (h) Station Use. Notwithstanding anything to the contrary in this Agreement, the Parties acknowledge (i) during charging and discharging of the Storage Facility pursuant to a Charging Notice or Discharging Notice, Auxiliary Load that is integral to charging or discharging the Storage Facility (e.g., HVAC, fire suppression systems, telecommunications equipment and battery management systems) may be served by Charging Energy or Discharging Energy, (ii) Seller is responsible for providing all Energy to serve Idle Period Auxiliary Load, which may be served with Generating Facility Energy provided any such Generating Facility Energy is not included in the calculation of Facility Energy, Charing Energy or Discharging Energy, (iii) all Idle Period Auxiliary Load shall be separately metered and may not be served by Charging Energy or Discharging Energy, and (iv) Seller shall indemnify and hold harmless Buyer from any and all costs, penalties or charges for Energy supplied for Idle Period Auxiliary Load by any means other than retail service from the applicable utility, and shall take any additional measures to ensure Idle Period Auxiliary Load is supplied by the applicable utility’s retail service if necessary to avoid any such costs, penalties or charges.
4.6 Reduction in Energy Delivery Obligation. For the avoidance of doubt, and in no way limiting Section 3.1 or Exhibit G.
(a) Facility Maintenance. Subject to providing Buyer one hundred twenty (120) days’ prior Notice, Seller shall schedule all Planned Outages within the time period determined by the CAISO for the Facility as a Resource Adequacy Resource that is subject to the Availability Standards (as defined in the CAISO Tariff), to qualify for an “Approved Maintenance Outage” under the CAISO Tariff, and Seller shall either deliver RA Substitute Capacity to Buyer for such Approved Maintenance Outage as required by the CAISO or reimburse Buyer for any cost Buyer incurs in connection therewith (including the cost of any replacement Capacity 43 Attributes as required by the CAISO). During the five (5) month period from June 1 to October 31 during the Delivery Term, Seller shall not schedule any non-emergency maintenance that reduces the energy generation capability of the Facility, unless (i) such outage is required to avoid an emergency or damage to the Facility or its Interconnection Facilities, (ii) such maintenance is necessary to maintain equipment warranties or is otherwise required by the equipment manufacturer and cannot be scheduled outside the months of June to October, (iii) such outage is in connection with Force Majeure Events, (iv) such outage is required by law, or the requirements of the CAISO or the interconnecting utility and/or each other applicable Governmental Authority, or (v) the Parties agree otherwise in writing.
(b) Forced Facility Outage. Seller shall be permitted to reduce deliveries of Facility Energy during any Forced Facility Outage. Seller shall provide Buyer with Notice and expected duration (if known) of any Forced Facility Outage. (c) System Emergencies and other Interconnection Events. Seller shall be permitted to reduce deliveries of Facility Energy during any period of System Emergency, Buyer Curtailment Period, or Curtailment Period pursuant to the terms of this Agreement, the Interconnection Agreement or applicable tariff.
(d) Force Majeure Event. Seller shall be permitted to reduce deliveries of Facility Energy during any Force Majeure Event, so long as Seller complies with the applicable requirements of Article 10.
(e) Health and Safety. Seller shall be permitted to reduce deliveries of Facility Energy as necessary to maintain health and safety pursuant to Section 6.2.
Notwithstanding anything in this Section 4.6 to the contrary, to the extent Generating Facility Energy is not or cannot be delivered to Buyer as a result of any of the conditions in this Section 4.6, Buyer shall have no obligation to pay Seller for any associated Product from the Generating Facility.
4.7 Guaranteed Energy Production. During each Performance Measurement Period, Seller shall deliver to Buyer at the Delivery Point or to the Storage Facility an amount of Generating Facility Energy, not including any Excess MWh, equal to no less than the Guaranteed Energy Production. For purposes of determining whether Seller has achieved the Guaranteed Energy Production, Seller shall be deemed to have delivered to Buyer all (a) Deemed Delivered Energy and (b) Lost Output for the Performance Measurement Period. If Seller fails to achieve the Guaranteed Energy Production amount in any Performance Measurement Period, Seller shall pay Buyer damages calculated in accordance with Exhibit G (“GEP Damages”).
4.8 Storage Availability and Efficiency Rate.
(a) During the Delivery Term, the Storage Facility shall maintain an Annual Storage Availability during each month of no less than the Guaranteed Storage Availability, which Annual Storage Availability shall be calculated in accordance with Exhibit P. If the Annual Storage Availability calculated in any month of the Delivery Term is less than the Guaranteed Storage Availability, then Buyer’s payment for the Storage Product shall be calculated by reference to the Availability Adjustment (as determined in accordance with Exhibit P).
45 (d) Excess Capacity. It is acknowledged that Seller shall have the right and option in its sole discretion to install capacity in excess of the Storage Contract Capacity; provided, for all purposes of this Agreement the amount of Installed Battery Capacity and Storage Capacity shall never be deemed to exceed the Storage Contract Capacity, and (for the avoidance of doubt) (A) Buyer shall have no rights to instruct Seller to (i) charge or discharge the Storage Facility at an instantaneous rate (in MW) in excess of Storage Capacity or (ii) charge the Storage Facility to a level (in MWh) in excess of the Storage Capacity times four (4) hours, (B) Buyer shall have no obligation to dispatch such excess capacity on behalf of Seller, or to make payment to Seller for such excess capacity, and (C) for purposes of calculating the Annual Storage Availability of the Facility, the unavailability of such excess capacity will not be considered in such calculations, and (D) Seller shall have no right to dispatch such excess capacity.
4.10 WREGIS. Seller shall, at its sole expense, take all actions and execute all documents or instruments necessary to ensure that all WREGIS Certificates associated with all Renewable Energy Credits corresponding to the Generating Facility Energy or Facility Energy, as applicable, are issued and tracked for purposes of satisfying the requirements of the California Renewables Portfolio Standard and transferred in a timely manner to Buyer for Buyer’s sole benefit. Seller shall transfer the Renewable Energy Credits to Buyer. Seller shall comply with all Laws, including the WREGIS Operating Rules, regarding the certification and transfer of such WREGIS Certificates to Buyer and Buyer shall be given sole title to all such WREGIS Certificates.
Seller shall be deemed to have satisfied the warranty in Section 3.11(c), provided that Seller fulfills its obligations under Sections 4.10(a) through (e) below. (a) Prior to the Commercial Operation Date, Seller shall register the Facility with WREGIS and establish an account with WREGIS (“Seller’s WREGIS Account”), which Seller shall maintain until the end of the Delivery Term. Seller shall transfer the WREGIS Certificates using “Recurring Certificate Transfers” (as described in the WREGIS Operating Rules) from Seller’s WREGIS Account to the WREGIS account(s) of Buyer or the account(s) of a designee that Buyer identifies by Notice to Seller (“Buyer’s WREGIS Account”). Seller shall be responsible for all expenses associated with registering the Facility with WREGIS, establishing and maintaining Seller’s WREGIS Account, paying WREGIS Certificate issuance and transfer fees, and transferring WREGIS Certificates from Seller’s WREGIS Account to Buyer’s WREGIS Account.
(b) Seller shall cause Recurring Certificate Transfers to occur on a monthly basis in accordance with the certification procedure established by the WREGIS Operating Rules.
Since WREGIS Certificates will only be created for whole MWh amounts of Generating Facility Energy or Facility Energy, as applicable, any fractional MWh amounts (i.e., kWh) will be carried forward until sufficient generation is accumulated for the creation of a WREGIS Certificate. (c) Seller shall, at its sole expense, ensure that the WREGIS Certificates for a given calendar month correspond with the Generating Facility Energy or Facility Energy, as applicable, that is eligible to create a Green Attribute under applicable Law for such calendar month, as evidenced by the Facility’s metered data. Seller shall use commercially reasonable efforts to assist Buyer to comply with any requirements of the CPUC, CEC, WREGIS and/or California Air Resources Board applicable to entities delivering RPS-eligible energy into the CAISO market with respect to documenting and reporting e-tags, including, as applicable, any 46 requirements to match e-tags to WREGIS Certificate creation. For the avoidance of doubt, the Parties acknowledge that Buyer shall be responsible for complying with all such requirements, and all such documenting and reporting, with respect to e-tags, and shall bear all costs and expenses of failure to so comply, document or report, including any reduction in the amount of WREGIS Certificates produced by the Facility due to such failure, except when such failure to comply is caused by Seller’s fault or negligence. Seller agrees to provide Buyer any such information as may be reasonably required by Buyer to comply with any requirements to match e-tags to WREGIS Certificate creation, including the CPUC’s PCC Classification Review Process Handbook and any additional requirements.
(d) Due to the ninety (90) day delay in the creation of WREGIS Certificates relative to the timing of invoice payment under Section 8.2, Buyer shall make an invoice payment for a given month in accordance with Section 8.2 before the WREGIS Certificates for such month are formally transferred to Buyer in accordance with the WREGIS Operating Rules and this Section 4.10. Notwithstanding this delay, Buyer shall have all right and title to all such WREGIS Certificates upon payment to Seller in accordance with Section 8.2. (e) A “WREGIS Certificate Deficit” means any deficit or shortfall in WREGIS Certificates delivered to Buyer for a calendar month as compared to the Generating Facility Energy or Facility Energy, as applicable, that is eligible to create a Green Attribute for the same calendar month (“Deficient Month”) caused by an error or omission of Seller. If any WREGIS Certificate Deficit is caused, or the result of any action or inaction, by Seller, then the amount of Adjusted Facility Energy in the Deficient Month shall be reduced by the amount of the WREGIS Certificate Deficit for purposes of calculating Buyer’s payment to Seller under Article 8 and damages, if any, under Exhibit G for the applicable Contract Year; provided, however, that such adjustment shall not apply to the extent that Seller either (x) resolves the WREGIS Certificate Deficit within ninety (90) days after the Deficient Month or (y) provides Replacement Green Attributes within ninety (90) days after the Deficient Month (i) upon a schedule reasonably acceptable to Buyer and (ii) provided that such deliveries do not impose additional costs upon Buyer for which Seller refuses to provide reimbursement. Without limiting Seller’s obligations under this Section 4.10, if a WREGIS Certificate Deficit is caused solely by an error or omission of WREGIS, the Parties shall cooperate in good faith to cause WREGIS to correct its error or omission.
(f) Subject to Section 3.12, if (i) WREGIS changes the WREGIS Operating Rules after the Effective Date or applies the WREGIS Operating Rules in a manner inconsistent with this Section 4.10 after the Effective Date, or (ii) the CEC modifies its RPS Eligibility Guidebook to enable the full amount of Generating Facility Energy to generate WREGIS Certificates, without reduction for Storage Facility efficiency losses, the Parties promptly shall modify this Section 4.10 as reasonably required to cause and enable Seller to transfer to Buyer’s WREGIS Account a quantity of WREGIS Certificates for each given calendar month that corresponds to the maximum quantity of WREGIS Certificates that can be transferred to Buyer from the Generating Facility in the same calendar month.
4.11 Interconnection. Seller shall be responsible for all costs of interconnecting the Facility to the Interconnection Point. During the Delivery Term, Seller shall have and maintain interconnection capacity available or allocable to the Facility that is no less than the Dedicated 47 Interconnection Capacity.
4.12 CRS Listed. Upon request of Buyer, Seller shall submit a Green-e® Energy Tracking Attestation Form (“Attestation”) for Product delivered under this Agreement to the Center for Resource Solutions (“CRS”) at https://www.tfaforms.com/4652008 or its successor.
The Attestation shall be submitted in accordance with the requirements of CRS and shall be submitted within thirty (30) days of Buyer’s request or the last day of the month in which the applicable Generating Facility Energy was generated, whichever is later, unless another longer timeframe is required by the CRS rules.
4.13 CAISO Tariff Requirements. Seller shall comply with all CAISO Tariff requirements applicable to Pseudo-Tie Resources, including Appendix N to the CAISO Tariff, throughout the Delivery Term.
4.14 Firm Transmission. Seller shall procure and maintain Firm Transmission rights sufficient to deliver no less than one hundred sixty (160) MWAC between the Facility and the Delivery Point throughout the Delivery Term. Any failure by Seller to obtain such Firm Transmission shall result in RA Deficiency Amounts based on the amount of unsecured Firm Transmission to the extent such failure reduces the Capacity Attributes delivered.
ARTICLE 5
TAXES
5.1 Allocation of Taxes and Charges. Seller shall pay or cause to be paid all Taxes on or with respect to the Facility or on or with respect to the sale and making available of Product to Buyer that are imposed on Product prior to its delivery to Buyer at the time and place contemplated under this Agreement. Buyer shall pay or cause to be paid all Taxes on or with respect to the delivery to and purchase by Buyer of Product that are imposed on Product at and after its delivery to Buyer at the time and place contemplated under this Agreement (other than withholding or other Taxes imposed on Seller’s income, revenue, receipts or employees), and with respect to Charging Energy prior to its delivery to Seller at the Delivery Point, if any. If a Party is required to remit or pay Taxes that are the other Party’s responsibility hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement from the other for such Taxes. In the event any sale of Product hereunder is exempt from or not subject to any particular Tax, Buyer shall provide Seller with all necessary documentation within thirty (30) days after the Effective Date to evidence such exemption or exclusion. If Buyer does not provide such documentation, then Buyer shall indemnify, defend, and hold Seller harmless from any liability with respect to Taxes from which Buyer claims it is exempt.
5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, however, that neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefor from the other Party. All Product delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Product. 48 ARTICLE 6
MAINTENANCE OF THE FACILITY
6.1 Maintenance of the Facility. Seller shall comply with Law and Prudent Operating Practice relating to the operation and maintenance of the Facility, the generation and sale of Product, and the disposal and recycling of any equipment associated with the Facility, including without limitation batteries and solar panels.
6.2 Maintenance of Health and Safety. Seller shall take reasonable safety precautions with respect to the operation, maintenance, repair and replacement of the Facility. If Seller becomes aware of any circumstances relating to the Facility that create an imminent risk of damage or injury to any Person or any Person’s property, Seller shall take prompt action to prevent such damage or injury and shall give Notice to Buyer’s emergency contact identified on Exhibit N of such condition. Such action may include, to the extent reasonably necessary, disconnecting and removing all or a portion of the Facility, or suspending the supply of Energy or Discharging Energy to Buyer.
6.3 Shared Facilities. The Parties acknowledge and agree that certain of the Shared Facilities and Interconnection Facilities, and Seller’s rights and obligations under the Interconnection Agreement, may be subject to certain shared facilities and/or co-tenancy agreements to be entered into among Seller, the Transmission Provider, Seller’s Affiliates, and/or third parties. Seller agrees that any agreements regarding Shared Facilities (i) shall permit Seller to perform or satisfy, and shall not purport to limit, Seller’s obligations hereunder, including providing interconnection capacity for the Facility’s sole use in an amount not less than the Dedicated Interconnection Capacity; (ii) shall provide for separate metering for each of the Generating Facility and the Storage Facility; (iii) shall provide that any other generating or energy storage facilities not included in the Facility but using Shared Facilities shall not be included within the Facility’s CAISO Resource ID; and (iv) shall provide that any curtailment of the full capacity of Shared Facilities that is ordered by Transmission Provider that Seller and its Affiliates have discretion to allocate across generating or energy storage facilities using the Shared Facilities shall not be allocated to the Facility more than its pro rata portion of the total capacity of all generating or energy storage facilities using the Shared Facilities. Seller shall not, and shall not permit any Affiliate to, allocate to other parties a share of the total interconnection capacity under the Interconnection Agreement in excess of an amount equal to the total interconnection capacity under the Interconnection Agreement minus the Dedicated Interconnection Capacity.
ARTICLE 7
METERING
7.1 Metering. Unless the Parties agree otherwise pursuant to Section 3.13, the Facility shall have one CAISO Resource ID for both the Generating Facility and the Storage Facility. Seller shall measure the amount of Generating Facility Energy using the Generating Facility Meter.
Seller shall measure the amount of Charging Energy and the Discharging Energy using the Storage Facility Meter. Seller shall measure the amount of Facility Energy using the Facility Meter. The Facility Meter will be operated pursuant to applicable CAISO-approved calculation methodologies. Subject to meeting any applicable CAISO requirements applicable to Pseudo-Tie Resources, the Facility Meter shall be programmed to adjust for Electrical Losses, as applicable, 49 from such meter to the Delivery Point in a manner subject to Buyer’s prior written approval, not to be unreasonably withheld. Seller shall separately meter all Idle Period Auxiliary Load using the Auxiliary Load Meter. All meters will be maintained at Seller’s cost. Metering shall be consistent with the Metering Diagram set forth as Exhibit R, a final version of which shall be provided to Buyer at least thirty (30) days before the Commercial Operation Date. Each Facility Meter, Generating Facility Meter, Storage Facility Meter, and Auxiliary Load Meter shall be kept under seal, such seals to be broken only when the meters are to be tested, adjusted, modified or relocated.
In the event Seller breaks a seal, Seller shall notify Buyer as soon as practicable after Seller becomes aware of such broken seal. In addition, Seller hereby agrees to provide all meter data to Buyer in a form reasonably acceptable to Buyer, and consents to Buyer obtaining from CAISO the CAISO meter data directly relating to the Facility and all inspection, testing and calibration data and reports. Seller and Buyer, or Buyer’s Scheduling Coordinator, shall cooperate to allow both Parties to retrieve the meter reads from the CAISO Market Results Interface – Settlements (MRI-S) (or its successor) or directly from the CAISO meter(s) at the Facility.
7.2 Meter Verification. Seller shall test the Facility Meter, Generating Facility Meter, Auxiliary Load Meter, and Storage Facility Meter at least annually and more frequently than annually if Buyer or Seller reasonably believe there may be a meter malfunction. The tests shall be conducted by independent third parties qualified to conduct such tests. Buyer shall be notified seven (7) days in advance of such tests and have a right to be present during such tests. If a meter is inaccurate, it shall be promptly repaired or replaced. If a meter is inaccurate by more than one point two percent (1.2%) and it is not known when the meter inaccuracy commenced (if such evidence exists such date will be used to adjust prior invoices), then the invoices covering the period of time since the last meter test shall be adjusted for the amount of the inaccuracy on the assumption that the inaccuracy persisted during one-half of such period so long as such adjustments are accepted by CAISO and WREGIS; provided, such period may not exceed twelve (12) months.
ARTICLE 8
INVOICING AND PAYMENT; CREDIT
8.1 Invoicing. Seller shall use commercially reasonable efforts to deliver an invoice to Buyer within ten (10) days after the end of the prior monthly delivery period. Each invoice shall (a) include records of metered data, including all available CAISO metering and transaction data (but excluding any missing interval data that is not available from CAISO) sufficient to document and verify the amount of Product delivered by the Facility for any Settlement Period during the preceding month, including the amount of Facility Energy as read by the Facility Meter, the amount of Generating Facility Energy as read by the Generating Facility Meter, the amount of Charging Energy and Discharging Energy as read by the Storage Facility Meter, the amount of Idle Period Auxiliary Load as read by the Auxiliary Load Meter, and Replacement RA delivered to Buyer (if any); the calculation of Adjusted Facility Energy, Deemed Delivered Energy, Deemed Delivered RA, Lost Output, and Adjusted Energy Production; the LMP prices at the Delivery Point for each Settlement Period; and the Contract Price applicable to such Product in accordance with Exhibit C; (b) reflect any records, including invoices or settlement data from the CAISO, necessary to verify the accuracy of any amount; and (c) be in a format reasonably specified by Buyer, covering the services provided in the preceding month determined in accordance with the applicable provisions of this Agreement. Buyer shall, and shall cause its Scheduling Coordinator 50 to, provide Seller with all reasonable access (including, in real time, to the maximum extent reasonably possible) to any records, including invoices or settlement data from the CAISO, forecast data and other information, all as may be necessary from time to time for Seller to prepare and verify the accuracy of all invoices. The invoice shall be delivered by electronic mail in accordance with Exhibit N.
8.2 Payment. Buyer shall make payment to Seller for Product by wire transfer or ACH payment to the bank account provided on each monthly invoice. Buyer shall pay undisputed invoice amounts within thirty (30) days of Buyer’s receipt of Seller’s invoices; provided, if such due date falls on a weekend or legal holiday, such due date shall be the next Business Day.
Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on the 3-Month prime rate (or any equivalent successor rate accepted by a majority of major financial institutions) published on the date of the invoice in The Wall Street Journal (or, if The Wall Street Journal is not published on that day, the next succeeding date of publication), plus two percent (2%) (the “Interest Rate”). If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day.
8.3 Books and Records. To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least five (5) years or as otherwise required by Law. Upon ten (10) Business Days’ Notice to the other Party, either Party shall be granted access to the accounting books and records within the possession or control of the other Party pertaining to all invoices generated pursuant to this Agreement. Seller acknowledges that in accordance with California Government Code Section 8546.7, Seller may be subject to audit by the California State Auditor with regard to Seller’s performance of this Agreement because the compensation under this Agreement exceeds Ten Thousand Dollars ($10,000).
8.4 Invoice Adjustments. Invoice adjustments shall be made if (a) there have been good-faith inaccuracies in invoicing or payment that are not otherwise disputed under Section 8.5, (b) an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO, or pursuant to a Storage Capacity Test, or (c) there have been meter inaccuracies; provided, however, that there shall be no adjustments to prior invoices based upon meter inaccuracies except to the extent that such meter adjustments are accepted by CAISO for revenue purposes. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.2, accruing from the date on which the adjusted amount should have been due.
8.5 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or 51 adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned via adjustments in accordance with Section 8.4. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.5 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve (12) month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.
8.6 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other under this Agreement on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including any related damages calculated pursuant to Exhibits B and P, interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.
8.7 Seller’s Development Security. To secure its obligations under this Agreement, Seller shall deliver Development Security to Buyer in the amount set forth in the Cover Sheet within sixty (60) days of the Effective Date. Seller shall maintain the Development Security in full force and effect. Upon the earlier of (i) Seller’s delivery of the Performance Security, or (ii) sixty (60) days after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement. If the Development Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the minimum Credit Rating specified in the definition of Letter of Credit, (ii) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the Commercial Operation Date, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Development Security.
8.8 Seller’s Performance Security. To secure its obligations under this Agreement, Seller shall deliver Performance Security to Buyer in the amount set forth in the Cover Sheet on or before the Commercial Operation Date. If the Performance Security is not in the form of cash or Letter of Credit, it shall be substantially in the form of Guaranty set forth in Exhibit L. Seller shall maintain the Performance Security in full force and effect, and Seller shall within five (5) Business Days after any draw thereon replenish the Performance Security in the event Buyer collects or draws down any portion of the Performance Security for any reason permitted under this Agreement other than to satisfy a Termination Payment, until the following have occurred:
(A) the Delivery Term has expired or terminated early; and (B) all payment obligations of Seller then due and payable under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages, are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall 52 promptly return to Seller the unused portion of the Performance Security. The amount of Seller’s Performance Security shall be adjusted by the Parties during the Delivery Term, as set forth on the Cover Sheet. If the Performance Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the minimum Credit Rating set forth in the definition of Letter of Credit, (ii) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the Commercial Operation Date, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Performance Security.
8.9 First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest (“Security Interest”) in, and lien on (and right to net against), and assignment of the Development Security, Performance Security, any other cash collateral and cash equivalent collateral posted pursuant to Sections 8.7 and 8.8 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s Security Interest in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.
Upon or any time after the occurrence and continuation of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Development Security or Performance Security, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.9):
(a) Exercise any of its rights and remedies with respect to the Development Security and Performance Security, including any such rights and remedies under Law then in effect;
(b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Development Security or Performance Security and such draw will be deemed to cure an Event of Default of Seller pursuant to Section 11.1(b)(xiv); and (c) Liquidate all Development Security or Performance Security (as applicable) then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller to the extent of damages or other amounts owed by Seller to Buyer hereunder.
Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller’s obligations under this Agreement (Seller remains liable for any amounts owing to Buyer after such application), subject to Buyer’s obligation to return any surplus proceeds remaining after these obligations are satisfied in full.
8.10 Financial Statements. In the event a Guaranty is provided as Performance Security in lieu of cash or a Letter of Credit, Seller shall provide to Buyer, or cause the Guarantor to provide
54 ARTICLE 10
FORCE MAJEURE
10.1 Definition.
(a) “Force Majeure Event” means any act or event that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance. (b) Without limiting the generality of the foregoing, so long as the following events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance or noncompliance, a Force Majeure Event may include any country-wide pandemic (including COVID-19); an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; epidemic; landslide; mudslide; sabotage; terrorism; earthquake or other cataclysmic event; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; or strike or other labor difficulty caused or suffered by a Party or any third party except as set forth below.
(c) Notwithstanding the foregoing, the term “Force Majeure Event” does not include (i) economic conditions or changes in Law that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including an increase in component or compliance costs for any reason, including foreign or domestic tariffs, Buyer’s ability to buy Product at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under this Agreement); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above that disables physical or electronic facilities necessary to transfer funds to the payee Party; (iv) a Curtailment Period, except to the extent such Curtailment Period is caused by a Force Majeure Event; (v) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Facility, including the lack of wind, sun or other fuel source of an inherently intermittent nature, except to the extent such inability is caused by a Force Majeure Event; (vi) a strike, work stoppage or labor dispute limited only to any one or more of Seller, Seller’s Affiliates, Seller’s contractors, their subcontractors thereof or any other third party employed by Seller to work on the Generating Facility or Storage Facility unless caused by a Force Majeure Event; (vii) any equipment failure, except if such equipment failure is caused by a Force Majeure Event; and (viii) events otherwise constituting a Force Majeure Event that prevents Seller from achieving Construction Start or Commercial Operation of the Facility, except to the extent expressly permitted as a Development Cure Period under this Agreement.
55 10.2 Termination Following Force Majeure Event. If a Force Majeure Event has occurred after the Commercial Operation Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon Notice to the other Party. Upon any such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.1(b), and Buyer shall promptly return to Seller any Performance Security then held by Buyer, less any amounts drawn in accordance with this Agreement.
10.3 Notice for Force Majeure Events. Within five (5) Business Days of knowledge of a Force Majeure Event, the claiming Party shall provide the other Party with oral notice of the Force Majeure Event, and within two (2) weeks of knowledge of the Force Majeure Event the claiming Party shall provide the other Party with Notice in the form of a letter describing in detail the occurrence giving rise to the Force Majeure Event, including the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance.
Failure to provide timely Notice as described in the preceding sentence constitutes a waiver of a Force Majeure Event claim as to all periods prior to the delivery of a timely Notice. The suspension of performance due to a claim of Force Majeure Event must be of no greater scope and of no longer duration than is required by the Force Majeure Event. Upon written request from Buyer, Seller shall provide documentation demonstrating to Buyer’s reasonable satisfaction that each day of the claimed delay was the result of a Force Majeure Event and did not result from Seller’s actions or failure to exercise due diligence or take reasonable actions. The claiming party shall promptly notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party. The suspension of performance due to a claim of Force Majeure must be of no greater scope and of no longer duration than is required by the Force Majeure Event.
10.4 No Liability If a Force Majeure Event Occurs.
(a) If the cumulative extensions granted under the Development Cure Period equal or exceed the maximum number of days that may be claimed consistent with Exhibit B, and Seller has demonstrated to Buyer’s reasonable satisfaction that such delays did not result from Seller’s commercially unreasonable actions (or failure to take commercially reasonable actions), then Seller may, by Notice to Buyer, terminate this Agreement. As Buyer’s sole right and remedy (and Seller’s sole liability and obligation) arising out of any such termination, (i) Seller shall remain subject to Section 11.6 following such early termination, and (ii) Buyer shall be entitled to (A) liquidate and retain the Development Security and (B) to collect from Seller (and Seller shall be obligated to pay to Buyer) the total amount of all Delay Damages accrued and unpaid as of the termination date; provided, in no event shall the sum of (A) and (B) exceed an amount equal to two (2) times the Development Security amount.
(b) Except as provided in Section 4 of Exhibit B, neither Seller nor Buyer shall be liable to the other Party in the event it is prevented from performing its obligations hereunder in whole or in part due to a Force Majeure Event. The Party rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take reasonable actions necessary to remove such inability with due speed and diligence. Nothing herein shall be construed as permitting that Party to continue to fail to perform after said cause has been removed. The obligation to use due 56 speed and diligence shall not be interpreted to require resolution of labor disputes by acceding to demands of the opposition when such course is inadvisable in the discretion of the Party having such difficulty. Neither Party shall be considered in breach or default of this Agreement if and to the extent that any failure or delay in the Party’s performance of one or more of its obligations hereunder is caused by a Force Majeure Event. The occurrence and continuation of a Force Majeure Event shall not suspend or excuse the obligation of a Party to make any payments due hereunder.
ARTICLE 11
DEFAULTS; REMEDIES; TERMINATION
11.1 Events of Default. An “Event of Default” shall mean, (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default, the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof (or such longer additional period, not to exceed an additional sixty (60) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) day period despite exercising commercially reasonable efforts); (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default set forth in this Section 11.1; and except for (1) failure to deliver Capacity Attributes, the exclusive remedies for which are set forth in Section 3.8; (2) failures related to the Adjusted Energy Production that do not trigger the provisions of Section 11.1(b)(vi), (viii), and (ix), the exclusive remedies for which are set forth in Section 4.7 and Exhibit G; and (3) failures related to the Monthly Storage Availability that do not trigger the provisions of Section 11.1(b)(vii), the exclusive remedies for which are set forth in Section 4.8) and such failure is not remedied within thirty (30) days after Notice thereof (or such longer additional period, not to exceed an additional ninety (90) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) day period despite exercising best efforts);
(iv) such Party becomes Bankrupt;
(v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Article 14, if applicable; or (vi) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party. 57 (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
(i) if at any time, Seller delivers or attempts to deliver Energy to the Delivery Point for sale under this Agreement that was not generated or discharged by the Facility except as otherwise permitted under this Agreement;
(ii) the failure by Seller to achieve Commercial Operation on or before the Guaranteed Commercial Operation Date, as such date may be extended by Seller’s payment of Commercial Operation Delay Damages pursuant to Section 2(c) of Exhibit B and/or a Development Cure Period pursuant to Section 4 of Exhibit B; (iii) if not remedied within ten (10) days after Notice thereof, the failure by Seller to deliver a Remedial Action Plan required under Section 2.4 that demonstrates a reasonable plan for completing the Facility by the Guaranteed Commercial Operation Date; (iv) the failure by Seller to achieve Construction Start on or before the Guaranteed Construction Start Date, as such date may be extended by Seller’s payment of Construction Delay Damages pursuant to Section 1(b) of Exhibit B and/or a Development Cure Period pursuant to Section 4 of Exhibit B;
(v) Seller sells, assigns, or otherwise transfers, or commits to sell, assign, or otherwise transfer, the Product, or any portion thereof, during the Delivery Term to any party other than Buyer except as expressly permitted under this Agreement; (vi) if, in any consecutive six (6) month period, Adjusted Energy Production is not at least ten percent (10%) of Expected Energy for such period, and Seller fails to (x) deliver to Buyer within ten (10) Business Days after Notice from Buyer a plan or report developed by Seller that describes the cause of the failure to meet the ten percent (10%) and the actions that Seller has taken, is taking, or proposes to take in an effort to cure such condition along with the written confirmation of a Licensed Professional Engineer that such plan or report is in accordance with Prudent Operating Practices and capable of cure within a reasonable period of time (“Cure Plan”), not to exceed (A) one hundred eighty (180) days, or (B) if such failure is caused by a Transformer Failure that cannot be cured pursuant to a Cure Plan within one hundred eighty (180) days (limited to one (1) occurrence during the Delivery Term), not to exceed three hundred sixty-five (365) days, so long as Seller commences a Cure Plan within such one hundred eighty (180) day period and thereafter diligently pursues such Cure Plan to completion, and (y) complete such Cure Plan in all material respects as set forth therein; (vii) if, in any Contract Year, the simple average of the Monthly Storage Availability for such Contract Year is not at least percent ( %) provided that in calculating the Monthly Storage Availability solely for purposes of this Section 11.1(b)(vii), “EXCUSEDHRSm” will include Insurable Force Majeure Events, and Seller fails to (x) deliver to Buyer within ten (10) Business Days after Notice from Buyer a plan or report developed by Seller that describes the cause of the failure to meet the seventy percent (70%) and the actions that Seller has taken, is taking, or proposes to take in an effort to cure such condition along with the written confirmation of a Licensed Professional Engineer that such plan or report is in accordance with
59 (A) if any representation or warranty made by the Guarantor in connection with this Agreement is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof; (B) the failure of the Guarantor to make any payment required or to perform any other material covenant or obligation in any Guaranty; (C) the Guarantor becomes Bankrupt;
(D) the Guarantor shall fail to meet the criteria for an acceptable Guarantor as set forth in the definition of Guarantor;
(E) the failure of the Guaranty to be in full force and effect (other than in accordance with its terms) prior to the indefeasible satisfaction of all obligations of Seller hereunder; or
(F) the Guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of any Guaranty; or (xiv) with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer either (1) cash (provided that any cash retained by Buyer after a draw of the Letter of Credit permitted under this Agreement will be deemed to satisfy this requirement in the amount of such drawn cash) or (2) a substitute Letter of Credit from a different issuer meeting the criteria set forth in the definition of Letter of Credit, in each case, in the amount required hereunder within ten (10) Business Days after Seller receives Notice of the occurrence of any of the following events:
(A) the issuer of the outstanding Letter of Credit shall fail to maintain a Credit Rating of at least A- by S&P or A3 by Moody’s; (B) the issuer of such Letter of Credit becomes Bankrupt; (C) the issuer of the outstanding Letter of Credit shall fail to comply with or perform its obligations under such Letter of Credit and such failure shall be continuing after the lapse of any applicable grace period permitted under such Letter of Credit;
(D) the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit; (E) the issuer of the outstanding Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit;
(F) such Letter of Credit fails or ceases to be in full force and effect at any time; or
60 (G) Seller shall fail to renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit and as provided in accordance with this Agreement, and in no event less than sixty (60) days prior to the expiration of the outstanding Letter of Credit.
11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (“Non-Defaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“Early Termination Date”) that terminates this Agreement (the “Terminated Transaction”) and ends the Delivery Term effective as of the Early Termination Date;
(b) to accelerate all amounts owing between the Parties, and to collect as liquidated damages (i) the Damage Payment (in the case of an Event of Default by Seller occurring before the Commercial Operation Date, including an Event of Default under Section 11.1(b)(ii) or Section 11.1(b)(iv)), or (ii) the Termination Payment calculated in accordance with Section 11.3 below (in the case of any other Event of Default by either Party); (c) to withhold any payments due to the Defaulting Party under this Agreement; (d) to suspend performance; or
(e) to exercise any other right or remedy available at law or in equity, including on and after the Commercial Operation Date with respect to a Seller Event of Default, specific performance or injunctive relief, except to the extent such remedies are expressly limited under this Agreement; provided, payment by the Defaulting Party of the Damage Payment or Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Party’s sole and exclusive remedy for any Terminated Transaction and the Event of Default related thereto.
11.3 Termination Payment. The Termination Payment (“Termination Payment”) for a Terminated Transaction shall be the aggregate of all Settlement Amounts plus any or all other amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information. The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages; provided, however, with respect to Seller as the Non-Defaulting Party, lost or recaptured Renewable Energy Incentives (calculated on an after-tax basis) shall be deemed direct damages covered by this Agreement.
Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees
62 11.7 Rights and Remedies Are Cumulative. Except where an express and exclusive remedy or measure of damages is provided, the rights and remedies of a Party pursuant to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
11.8 Mitigation. Any Non-Defaulting Party shall be obligated to use commercially reasonable efforts to mitigate its Costs, Losses and damages resulting from any Event of Default of the other Party under this Agreement.
11.9 Seller Pre-COD Liability. Unless and until the Facility has achieved Commercial Operation, Seller’s aggregate liability for any and all reasons, including liabilities for payment of Delay Damages and the Damage Payment, shall not exceed
ARTICLE 12
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.
12.1 No Consequential Damages. EXCEPT TO THE EXTENT (A) PART OF AN
EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, (B) PART OF AN ARTICLE 16 INDEMNITY CLAIM, (C) INCLUDED IN A LIQUIDATED DAMAGES CALCULATION, OR (D) RESULTING FROM A PARTY’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER OR ITS
INDEMNIFIED PERSONS FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT, OR
CONSEQUENTIAL DAMAGES, OR LOSSES OR DAMAGES FOR LOST REVENUE OR
LOST PROFITS, WHETHER FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION WITH, THIS AGREEMENT.
12.2 Waiver and Exclusion of Other Damages. EXCEPT AS EXPRESSLY SET
FORTH HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND
MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF LIABILITY CONTAINED IN
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF
CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.
FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE
REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR
MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. 63 IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY. THE
VALUE OF ANY TAX CREDITS OR RENEWABLE ENERGY INCENTIVES, DETERMINED ON AN AFTER-TAX BASIS, LOST DUE TO BUYER’S DEFAULT (WHICH SELLER HAS
NOT BEEN ABLE TO MITIGATE AFTER USE OF COMMERCIALLY REASONABLE
EFFORTS) AND AMOUNTS DUE IN CONNECTION WITH THE RECAPTURE OF ANY
RENEWABLE ENERGY INCENTIVES, IF ANY, SHALL BE DEEMED TO BE DIRECT DAMAGES.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 3.8, 4.7, 4.8, 11.2 AND 11.3, AND AS
PROVIDED IN EXHIBIT B, EXHIBIT G, AND EXHIBIT P, THE PARTIES ACKNOWLEDGE
THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT
OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT, AND THAT
THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. IT IS THE INTENT OF THE PARTIES THAT THE
LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES
BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING
THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.
THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES AND THE
EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE REMEDY FOR THE
BREACH BY THE OTHER OF THE TERMS OF THIS AGREEMENT, AND EACH PARTY
WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE WITH RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.
ARTICLE 13
REPRESENTATIONS AND WARRANTIES; AUTHORITY
13.1 Seller’s Representations and Warranties. As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and is qualified to conduct business in the state of California and each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller. (b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement. The execution, delivery and performance of this Agreement by Seller have been duly authorized by all necessary limited liability company action on the part of Seller and do not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller.
64 (c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) The Facility is located in the state of California. (f) Seller will be responsible for obtaining all permits necessary to construct and operate the Facility and Seller will be the applicant on any CEQA documents. (g) As of the Effective Date, Seller represents and warrants to Buyer that it has not received notice from or been advised by any existing or potential supplier or service provider that COVID-19 has caused, or is reasonably likely to cause, a delay in the construction of the Facility or the delivery of materials necessary to complete the Facility, in each case that would cause the Commercial Operation Date to be later than the Guaranteed Commercial Operation Date.
13.2 Buyer’s Representations and Warranties. As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a joint powers authority and a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations and orders of the CPUC, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All Persons making up the governing body of Buyer are the elected or appointed incumbents in their positions and hold their positions in good standing in accordance with the Joint Powers Agreement and other Law. (b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, the documents of formation of Buyer or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of 65 indebtedness or any other agreement or instrument to which Buyer is a party or by which any of its property is bound.
(d) This Agreement has been duly executed and delivered by Buyer. This Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Buyer warrants and covenants that with respect to its contractual obligations under this Agreement, it will not claim and affirmatively waives immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (1) suit, (2) jurisdiction of court (provided that such court is located within a venue permitted in Law and under the Agreement), (3) relief by way of injunction, order for specific performance or recovery of property, (4) attachment of assets, or (5) execution or enforcement of any judgment; provided, however, that nothing in this Agreement shall waive the obligations or rights set forth in the California Tort Claims Act (Cal. Gov. Code Section 810 et seq.) (f) Buyer is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California.
13.3 General Covenants. Each Party covenants that commencing on the Effective Date and continuing throughout the Contract Term:
(a) It shall continue to be duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation and to be qualified to conduct business in California and each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition;
(b) It shall maintain (or obtain from time to time as required) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and (c) It shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and in material compliance with any Law.
13.4 Prevailing Wage. Seller shall use reasonable efforts to ensure that all employees hired by Seller, and its contractors and subcontractors, that will perform construction work or provide services at the Site related to construction of the Facility are paid wages at rates not less than those prevailing for workers performing similar work in the locality as provided by applicable California law, if any. Nothing herein shall require Seller, and its contractors and subcontractors, to comply with or assume liability created by other inapplicable provisions of any California labor laws. Buyer agrees that Seller’s obligations under this Section 13.4 will be satisfied upon the execution of a project labor agreement related to construction of the Facility.
13.5 Workforce Development and Supplier Diversity. Seller acknowledges that Buyer will, from time to time, request voluntary disclosure of Seller’s certification status with the CPUC Supplier Clearinghouse, and voluntary disclosure regarding Seller’s efforts to work with diverse business enterprises, including women, minority, disabled veteran, and lesbian, gay, bisexual, transgender and/or persons with disabilities business enterprises in a form similar to
67 (i) The status of efforts by Lender to develop a plan to cure the Event of Default;
(ii) Impediments to the cure plan or its development;
(iii) If a cure plan has been adopted, the status of the cure plan’s implementation (including any modifications to the plan as well as the expected timeframe within which any cure is expected to be implemented); and
(iv) Any other information which Buyer may reasonably require related to the development, implementation and timetable of the cure plan.
Lender must provide the report to Buyer within ten (10) Business Days after Notice from Buyer requesting the report. Buyer will have no further right to require the report with respect to a particular Event of Default after that Event of Default has been cured. (c) Lender will have the right to cure an Event of Default on behalf of Seller, only if Lender sends a written notice to Buyer indicating Lender’s intention to cure before the later of (i) the expiration of any cure period, and (ii) ten (10) Business Days after Lender’s receipt of notice of such Event of Default from Buyer. Lender must remedy or cure the Event of Default within the cure period under this Agreement and any additional cure periods agreed in the Collateral Assignment Agreement, which shall not exceed a maximum of thirty (30) days to cure a payment default, and ninety (90) days to cure defaults other than a payment default; provided, however, in the event of a bankruptcy of Seller or if any foreclosure or similar proceeding is required by Lender to cure any Event of Default, Seller shall be provided an additional reasonable period of time to complete such proceedings and effect such cure (not to exceed one hundred eighty (180) days without the written consent of Buyer, which consent shall not be unreasonably withheld);
(d) Lender will have the right to consent before any termination of this Agreement which does not arise out of an Event of Default; (e) Lender will receive prior Notice of and the right to approve material amendments to this Agreement, which approval will not be unreasonably withheld, delayed or conditioned;
(f) If Lender, directly or indirectly, takes possession of, or title to, the Facility (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure), Lender must assume all of Seller’s obligations arising under this Agreement and all related agreements (other than any Events of Default which relate to Seller’s bankruptcy or similar insolvency proceedings, to representations and warranties made by Seller or to Seller’s failure to perform obligations under other agreements, or which are otherwise personal to Seller and subject to such limits on liability as are mutually agreed to by Seller, Buyer, and Lender as set forth in the Collateral Assignment Agreement); provided, before such assumption, if Buyer advises Lender that Buyer will require that Lender cure (or cause to be cured) any Event of Default existing as of the possession date (other than any Events of Default which relate to Seller’s bankruptcy or similar insolvency proceedings, to representations and warranties made by Seller or to Seller’s failure to perform obligations under other agreements, or which are otherwise personal to Seller and subject 68 to such limits on liability as are mutually agreed to by Seller, Buyer, and Lender as set forth in the Collateral Assignment Agreement) in order to avoid the exercise by Buyer (in its sole discretion) of Buyer’s right to terminate this Agreement with respect to such Event of Default, then Lender at its option, and in its sole discretion, may elect to either:
(i) Cause such Event of Default to be cured, or
(ii) Not assume this Agreement;
(g) If Lender elects to sell or transfer the Facility (after Lender directly or indirectly takes possession of, or title to, the Facility), or sale of the Facility occurs through the actions of Lender (for example, a foreclosure sale where a third party is the buyer, or otherwise), then Lender shall cause the transferee or buyer to assume all of Seller’s obligations arising under this Agreement and all related agreements as a condition of the sale or transfer. Such sale or transfer may be made only to an entity that (i) meets the definition of Permitted Transferee and (ii) is an entity that Buyer is permitted to contract with under applicable Law; (h) Subject to Lender’s cure of any Events of Defaults under the Agreement in accordance with Section 14.2(f) (if applicable), if (i) this Agreement is rejected in Seller’s Bankruptcy or otherwise terminated in connection therewith, Lender shall have the right to elect within ninety (90) days after such rejection or termination, to cause Buyer to enter into a replacement agreement with Seller having the same terms as this Agreement for the remaining term thereof, or (ii) if Lender or its designee, directly or indirectly, takes possession of, or title to, the Facility (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure) after any such rejection or termination of this Agreement, promptly after Buyer’s written request, Lender must itself or must cause its designee to promptly enter into a new agreement with Buyer having the same terms as this Agreement for the remaining term thereof, provided that in the event a designee of Lender, directly or indirectly, takes possession of, or title to, the Facility (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure), such designee shall be approved by Buyer, not to be unreasonably withheld;
(i) If requested by Lender, Buyer will make all payments due to Seller under this Agreement to an account designated by Lender in writing; and (j) Lender shall not have any liability or obligation under this Agreement as a result of exercising its rights under the Collateral Assignment Agreement, and Lender shall not be obligated or required to perform any of Seller’s obligations under this Agreement, except if this Agreement is transferred to Lender pursuant to subsection (b) above or Lender is a counterparty to a replacement agreement entered into pursuant to subsection (h) above.
14.3 Permitted Assignment by Seller. Except as may be precluded by, or would cause Buyer to be in violation of, the Political Reform Act (Cal. Gov. Code Section 81000 et seq.) or the regulations thereto, California Government Code Section 1090, or any other conflict of interest Law, Seller may, without the prior written consent of Buyer, transfer or assign this Agreement, including through a Change of Control, to (a) an Affiliate of Seller, or (b) any Person succeeding to all or substantially all of the assets of Seller (whether voluntary or by operation of law); if, and only if:
69 (i) In the case of (b) only, the assignee is a Permitted Transferee; (ii) Seller has given Buyer Notice at least fifteen (15) Business Days before the date of such proposed assignment; and
(iii) Seller has provided Buyer a written agreement signed by the Person to which Seller wishes to assign its interests that (x) provides that such Person will assume all of Seller’s obligations and liabilities under this Agreement upon such transfer or assignment and (y) certifies that such Person meets the definition of a Permitted Transferee.
Except as provided in the preceding sentence, any assignment by Seller or its successors or assigns under this Section 14.3 shall be of no force and effect unless and until such Notice and agreement by the assignee have been received and accepted by Buyer.
14.4 Permitted Assignment by Buyer. Buyer may make a limited assignment in connection with a municipal prepayment transaction to an entity that has creditworthiness that is equal to or better than an Investment Grade Credit Rating (“Limited Assignee”) of Buyer’s right to receive Product and Buyer’s obligation to make payments to Seller, subject to execution of an assignment agreement between and among Seller, Buyer, and Limited Assignee upon terms and conditions mutually agreed, including that the limited assignment shall be expressly subject to Limited Assignee’s timely payment of amounts due under this Agreement. Buyer may make such assignment by delivering Notice upon not less than thirty (30) days prior to such proposed assignment. Subject to the foregoing, Seller agrees to (i) comply with Limited Assignee’s reasonable requests for know-your-customer and similar account opening information and documentation with respect to Seller, including, but not limited to, information related to forecasted generation, credit rating, and compliance with anti-money laundering rules, the Dodd-Frank Act, the Commodity Exchange Act, the Patriot Act and similar rules, regulations, requirements and corresponding policies; and (ii) promptly execute such assignment agreement and implement such assignment as contemplated thereby, subject only to the countersignature of Limited Assignee and Buyer. Buyer shall be responsible for Seller’s reasonable costs associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement by Buyer, including without limitation reasonable attorneys’ fees.
ARTICLE 15
DISPUTE RESOLUTION
15.1 Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the State of California, without regard to principles of conflicts of law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. The Parties agree that any suit, action or other legal proceeding by or against any party (or its affiliates or designees) with respect to or arising out of this Agreement shall be brought in the federal courts of the United States or the courts of the State of California sitting in the County of San Diego, California.
15.2 Dispute Resolution. In the event of any claim, controversy or dispute between the Parties arising out of or relating to or in connection with this Agreement, either Party may deliver 70 to the other Party Notice of the Dispute with a detailed description of the underlying circumstances of such Dispute (a “Dispute Notice”). The senior officers of the Parties shall meet and confer as often as they deem reasonably necessary during the thirty (30) day period following receipt of the Dispute Notice in good-faith negotiations to resolve the Dispute to the satisfaction of each Party.
In the event a Dispute is not resolved by the expiration of the thirty (30) day period, then a Party may pursue any legal remedy available to it in accordance with this Agreement.
ARTICLE 16
INDEMNIFICATION
16.1 Indemnity.
(a) Each Party (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless the other Party and its Affiliates, directors, officers, employees and agents (collectively, the “Indemnified Party”) from and against all third party claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees) for personal injury or death to Persons and damage to the property of any third party to the extent arising out of, resulting from, or caused by the negligent or willful misconduct of the Indemnifying Party or its Affiliates, directors, officers, employees, or agents (“Indemnifiable Losses”). (b) Nothing in this Section 16.1 shall enlarge or relieve Seller or Buyer of any liability to the other for any breach of this Agreement. Neither Party shall be indemnified for its damages resulting from its sole negligence, intentional acts, or willful misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligations to pay claims consistent with the provisions of a valid insurance policy.
16.2 Claims. Promptly after receipt by a Party of any claim or Notice of the commencement of any action, administrative, or legal proceeding, or investigation as to which the indemnity provided for in this Article 16 may apply, the Indemnified Party shall notify the Indemnifying Party in writing of such fact. The Indemnifying Party shall assume the defense thereof with counsel designated by the Indemnifying Party and satisfactory to the Indemnified Party, provided, if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to, or inconsistent with, those available to the Indemnifying Party, the Indemnified Party shall have the right to select and be represented by separate counsel, at the Indemnifying Party’s expense, unless a liability insurer is willing to pay such costs. If the Indemnifying Party fails to assume the defense of a claim meriting indemnification, the Indemnified Party may at the expense of the Indemnifying Party contest, settle, or pay such claim, provided that settlement or full payment of any such claim may be made only following consent of the Indemnifying Party or, absent such consent, written opinion of the Indemnified Party’s counsel that such claim is meritorious or warrants settlement. Except as otherwise provided in this Article 16, in the event that a Party is obligated to indemnify and hold the other Party and its successors and assigns harmless under this Article 16, the amount owing to the Indemnified Party will be the amount of the Indemnified Party’s damages net of any insurance proceeds received by the Indemnified Party following a reasonable effort by the Indemnified Party to obtain such insurance proceeds.
71 ARTICLE 17
INSURANCE
17.1 Insurance.
(a) General Liability. Seller shall maintain, or cause to be maintained at its sole expense, (i) commercial general liability insurance, including products and completed operations and personal injury insurance, in a minimum amount of One Million Dollars ($1,000,000) per occurrence, and an annual aggregate of not less than Two Million Dollars ($2,000,000), endorsed to provide contractual liability in said amount, specifically covering Seller’s obligations under this Agreement and including Buyer as an additional insured; and (ii) an umbrella insurance policy in a minimum limit of liability of Twenty Million Dollars ($20,000,000). Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest provisions. (b) Employer’s Liability Insurance. Seller, if it has employees, shall maintain at all times during the Contract Term employers’ liability insurance, in a minimum amount of One Million Dollars ($1,000,000) for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the One Million Dollar ($1,000,000) policy limit will apply to each employee.
(c) Workers’ Compensation Insurance. Seller, if it has employees, shall maintain at all times during the Contract Term workers’ compensation insurance coverage in accordance with applicable requirements of California law. (d) Business Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with limits of One Million Dollars ($1,000,000) per occurrence. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement and shall name Buyer as additional insured and contain standard cross-liability and severability of interest provisions. (e) Construction All-Risk Insurance. Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date, construction all-risk form property insurance covering the Facility during such construction periods, and naming Seller (and Lender(s) if any) as the loss payee. (f) Contractor’s Pollution Liability. Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date, pollution legal liability insurance in the amount of Two Million Dollars ($2,000,000) per occurrence and in the aggregate, naming Seller (and Lender if any) as additional named insured. (g) Subcontractor Insurance. Seller shall require all of its material subcontractors to carry: (i) comprehensive general liability insurance with a combined single limit of coverage not less than One Million Dollars ($1,000,000); (ii) workers’ compensation insurance 72 and employers’ liability coverage in accordance with applicable requirements of Law; and (iii) business auto insurance for bodily injury and property damage with limits of One Million Dollars ($1,000,000) per occurrence. All subcontractors shall name Seller as an additional insured to insurance carried pursuant to clauses (g)(i) and (g)(iii). All subcontractors shall provide a primary endorsement and a waiver of subrogation to Seller for the required coverage pursuant to this Section 17.1(g).
(h) Property Insurance. On and after the Commercial Operation Date, Seller shall maintain or cause to be maintained insurance against loss or damage from all causes under standard “all-risk” property insurance coverage in amounts that are not less than the actual replacement value of the Facility; provided, however, with respect to property insurance for natural catastrophes, Seller shall maintain limits equivalent to a probable maximum loss amount reasonably determined by a firm with experience providing such determinations, provided it may not exceed a five hundred (500) year event and further provided that such amount must be commercially available from the insurance market. Such insurance shall include business interruption coverage in an amount equal to twelve (12) months of expected revenue from this Agreement.
(i) Evidence of Insurance. Within ten (10) days after Construction Start and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such coverage. Such certificates shall specify that Buyer shall be given at least thirty (30) days’ prior Notice by Seller in the event of any material modification, cancellation or termination of coverage. Such insurance shall be primary coverage without right of contribution from any insurance of Buyer. Any other insurance maintained by Seller is for the exclusive benefit of Seller and shall not in any manner inure to the benefit of Buyer. The general liability, auto liability and workers’ compensation policies shall be endorsed with a waiver of subrogation in favor of Buyer for all work performed by Seller, its employees, agents and subcontractors.
ARTICLE 18
CONFIDENTIAL INFORMATION
18.1 Definition of Confidential Information. The following constitutes “Confidential Information,” whether oral or written, which is delivered by Seller to Buyer or by Buyer to Seller including: (a) the terms and conditions of, and proposals and negotiations related to, this Agreement, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; (iv) information that the recipient independently developed without a violation of this Agreement; and (v) information that is determined by Buyer to be subject to the California Public Records Act. 73 18.2 Duty to Maintain Confidentiality. Confidential Information will retain its character as Confidential Information but may be disclosed by the recipient (the “Receiving Party”) if and to the extent such disclosure is required (a) to be made by any requirements of Law, (b) pursuant to an order of a court or (c) in order to enforce this Agreement; provided, each Party shall, to the extent practicable, use reasonable efforts to prevent or limit the disclosure. If the Receiving Party becomes legally compelled (by interrogatories, requests for information or documents, subpoenas, summons, civil investigative demands, or similar processes or otherwise in connection with any litigation or to comply with any Law, order, regulation, ruling, regulatory request, accounting disclosure rule or standard or any exchange, control area or independent system operator rule) to disclose any Confidential Information of the disclosing Party (the “Disclosing Party”), Receiving Party shall provide Disclosing Party with prompt Notice so that Disclosing Party, at its sole expense, may seek an appropriate protective order or other appropriate remedy. If the Disclosing Party takes no such action after receiving the foregoing Notice from the Receiving Party, the Receiving Party is not required to defend against such request and shall be permitted to disclose such Confidential Information of the Disclosing Party, with no liability for any damages that arise from such disclosure. Each Party hereto acknowledges and agrees that information and documentation provided in connection with this Agreement may be subject to the California Records Act (Cal. Gov. Code Section 6250 et seq.).
18.3 Irreparable Injury; Remedies. Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party, and expressly acknowledges that monetary damages would be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth herein. Accordingly, Receiving Party acknowledges that any such breach or threatened breach will cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of proving actual damages.
18.4 Disclosure to Lenders, Etc. Notwithstanding anything to the contrary in this Article 18, Confidential Information may be disclosed by the Receiving Party to any of its agents, consultants, contractors, trustees, or actual or potential financing parties (including, in the case of Seller, its Lender(s) and potential lenders), so long as the Person to whom Confidential Information is disclosed agrees in writing to be bound by confidentiality provisions no less stringent than those in this Article 18 to the same extent as if it were a Party or is otherwise bound by a legal duty of confidentiality with respect to such Confidential Information no less stringent than that in this Article 18. Seller shall provide Notice to Buyer of any disclosure of Confidential Information pursuant to this Section 18.4, including the identity of the party receiving such Confidential Information.
18.5 Press Releases. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such public statement. A Party’s consent shall not be unreasonably withheld, conditioned or delayed.
74 ARTICLE 19
MISCELLANEOUS
19.1 Entire Agreement; Integration; Exhibits. This Agreement, together with the Cover Sheet and Exhibits attached hereto constitutes the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. The headings used herein are for convenience and reference purposes only. In the event of a conflict between the provisions of this Agreement and those of the Cover Sheet or any Exhibit, the provisions of first the Cover Sheet, and then this Agreement shall prevail, and such Exhibit shall be corrected accordingly. This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof.
19.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, that, for the avoidance of doubt, this Agreement may not be amended by electronic mail communications.
19.3 No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) or, to the extent set forth herein, any Lender and/or Indemnified Party.
19.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
19.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the 75 “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956), and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Changes proposed by a non-Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under Law.
19.7 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
19.8 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party.
19.9 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
19.10 No Recourse to Members of Buyer. Buyer is organized as a joint powers authority in accordance with the Joint Exercise of Powers Act of the State of California (Cal. Gov.
Code Section 6500 et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or the employees, directors, officers, consultants or advisors or Buyer or its constituent members, in connection with this Agreement.
19.11 Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a “forward contract” within the meaning of the U.S. Bankruptcy Code, and Buyer and Seller are “forward contract merchants” within the meaning of the U.S. Bankruptcy Code. Each Party further agrees that, for all purposes of this Agreement, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. § 366 or another provision of 11 U.S.C. §§ 101-1532.
19.12 Service Contract. The Parties intend this Agreement to be a “service contract” within the meaning of Section 7701(e) of the Internal Revenue Code of 1986, as amended.
19.13 Further Assurances. Each of the Parties hereto agree to provide such information, to execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement.
19.14 Change in Electric Market Design. If a change in the CAISO Tariff or WAPA Tariff renders this Agreement or any provisions hereof incapable of being performed or administered, then any Party may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to make this Agreement capable of being 76 performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith. If Buyer and Seller are unable, within sixty (60) days after delivery of such request, to agree upon changes to this Agreement or to resolve issues relating to changes to this Agreement, then any Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Article 15. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, and (ii) all of the unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution. [Signatures on following page]
Signature Page
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
CDH VIDAL LLC, a Delaware limited
liability company
By:
Name:
Title:
SAN DIEGO COMMUNITY POWER, a
California joint powers authority
By:
Name:
Title:
Exhibit A - 1
EXHIBIT A
FACILITY DESCRIPTION
Site Name: Vidal Solar
Site includes all or some of the following APNs: 064-705-108, 064-705-111, 064-706-101, 064-706-102, 064-706-103, 064-706-104, 064-706-105, 064-706-108, 064-706-109, 064-706- 113, 064-706-115, 064-706-116, 064-706-120, 064-706-122, 064-706-129, 064-706-130, 064- 708-137, 064-709-103, 064-709-104, 064-709-105, 064-709-106 County: San Bernardino County
CEQA Lead Agency: San Bernardino County
Zip Code: 92280
Latitude and Longitude: 34.092518 , -114.467716
Facility Description: A 160 MWAC pseudo-tied solar photovoltaic electricity generating facility, along with a hybrid 160 MWAC 4-hour (640 MWh) battery energy storage facility, located in San Bernardino County, in the state of California. The solar generating facility is expected to use single-axis tracker racking. The facility will include an on-site substation to step up the voltage from the project to 161 kV and connect the project to a new WAPA switching station.
Delivery Point: The Delivery Point shall be Blythe161, which is an Intertie.
Generating Facility Meter and Metering Points: See Exhibit R.
Storage Facility Meter and Metering Points: See Exhibit R.
Participating Transmission Owner: Western Area Power Administration Additional Information: Site Plan provided below.
Exhibit B - 2
provided the required documentation to Buyer and met the conditions for achieving Commercial Operation within ten (10) days of receipt of such Notice or be deemed to have accepted such Notice. The “Commercial Operation Date” shall be the date on which Commercial Operation is achieved.
a. Seller shall cause Commercial Operation to occur no later than the Guaranteed Commercial Operation Date, as such date may be extended by Seller’s payment of Commercial Operation Delay Damages pursuant to Section 2(c) of Exhibit B and/or a Development Cure Period pursuant to Section 4 of Exhibit B. Seller shall notify Buyer at least sixty (60) days before the anticipated Commercial Operation Date. b. Seller may deduct the amount of Construction Delay Damages previously paid to Buyer from the amount of Commercial Operation Delay Damages owed to Buyer.
Buyer shall refund to Seller the positive amount, if any, by which Construction Delay Damages paid by Seller, if any, exceed the amount of Commercial Operation Delay Damages owed by Seller, if any. If no Commercial Operation Delay Damages are owed by Seller, and Construction Delay Damages were previously paid, Buyer shall refund any Construction Delay Damages paid by Seller after Commercial Operation is achieved.
c. Seller may extend the Guaranteed Commercial Operation Date by paying Commercial Operation Delay Damages in advance to Buyer for each day Seller desires to extend the Guaranteed Commercial Operation Date, not to exceed a total of one hundred twenty (120) days of extensions by such payment of Commercial Operation Delay Damages. If Seller elects to extend the Guaranteed Commercial Operation Date, on or before the date that is ten (10) days prior to the then-current Guaranteed Commercial Operation Date, Seller shall provide Notice and payment to Buyer of the Commercial Operation Delay Damages for the number of days of extension to the Guaranteed Commercial Operation Date. If Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date, as extended by the payment of Commercial Operation Delay Damages, Buyer shall refund to Seller the Commercial Operation Delay Damages for each day Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date times the Commercial Operation Delay Damages, not to exceed the total amount of Commercial Operation Delay Damages paid by Seller pursuant to this this Section 2(c) of Exhibit B.
3. Termination for Failure to Achieve Construction Start by the Guaranteed Construction Start Date or Commercial Operation by the Guaranteed Commercial Operation Date. If the Facility has not achieved Commercial Operation on or before the Guaranteed Commercial Operation Date, as such date may be extended by Seller’s payment of Commercial Operation Delay Damages pursuant to Section 2(c) of Exhibit B and/or a Development Cure Period pursuant to Section 4 of Exhibit B, Buyer may elect to terminate this Agreement in accordance with Sections 11.1(b)(ii) and 11.2. If the Facility has not achieved Construction Start on or before the Guaranteed Construction Start Date, as such date may be extended by Seller’s payment of Construction Delay Damages pursuant to Section 1(b) of Exhibit B and/or a Development Cure Period pursuant to
Exhibit C - 3
Tax Credit Benefits pursuant to such New Benefit Legislation. Promptly upon Seller’s (or its Affiliate’s or Lender’s) receipt of such Seller Tax Credit Benefits, Buyer shall receive percent ( %) of the net economic benefit of the same actually realized by Seller or its Affiliate(s) (whether such Seller Tax Credit Benefits were claimed by Seller or its Affiliates or Lender), which, for the avoidance of doubt, shall take into account, among other things, any costs incurred by Seller in connection with obtaining such Seller Tax Credit Benefits and any subsequent recapture, reduction, or loss of all or any portion of such Seller Tax Credit Benefits. The percent ( %) to which Buyer is entitled shall be passed through the invoicing process as a credit to Buyer’s account during the Delivery Term. Buyer agrees that it shall take all administrative actions reasonably requested by Seller to facilitate the receipt of Seller Tax Credit Benefits from such New Benefit Legislation, including entering into customary estoppel agreements for the benefit of any tax equity investors.
Exhibit D - 1
EXHIBIT D
SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Buyer as Scheduling Coordinator for the Facility. Upon Initial Synchronization of the Facility to the CAISO Grid, Buyer shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility for both the delivery and the receipt of Test Energy and the Product at the Delivery Point. At least thirty (30) days prior to the Initial Synchronization of the Facility with the Transmission Provider’s Transmission System (i) Seller shall take all actions and execute and deliver to Buyer and the CAISO all documents necessary to authorize or designate Buyer (or Buyer’s designee) as the Scheduling Coordinator for the Facility effective as of the Initial Synchronization of the Facility with the Transmission Provider’s Transmission System, and (ii) Buyer shall, and shall cause its designee to, take all actions and execute and deliver to Seller and the CAISO all documents necessary to authorize or designate Buyer or its designee as the Scheduling Coordinator for the Facility effective as of the Initial Synchronization of the Facility with the Transmission Provider’s Transmission System. On and after Initial Synchronization of the Facility with the Transmission Provider’s Transmission System, Seller shall not authorize or designate any other party to act as the Facility’s Scheduling Coordinator, nor shall Seller perform for its own benefit the duties of Scheduling Coordinator, and Seller shall not revoke Buyer’s authorization to act as the Facility’s Scheduling Coordinator unless agreed to by Buyer. Buyer (as the Facility’s SC) shall submit Schedules to the CAISO in accordance with this Agreement and the applicable CAISO Tariff, protocols and Scheduling practices for Product on a day-ahead, hour-ahead, fifteen (15) minute market or real-time basis, as determined by Buyer. Buyer (or its SC) shall comply with all applicable CAISO Tariff requirements, procedures, protocols, rules and testing as applicable to Buyer as the Scheduling Coordinator for the Facility. (b) Notices. Buyer (as the Facility’s SC) shall provide Seller with access to a web-based system through which Seller shall submit to Buyer and the CAISO all notices and updates required under the CAISO Tariff regarding the Facility’s status, including, but not limited to, all outage requests, forced outages, forced outage reports, clearance requests, or must offer waiver forms. Seller will cooperate with Buyer to provide such notices and updates. If the web-based system is not available, Seller shall promptly submit such information to Buyer and the CAISO (in order of preference) telephonically, by electronic mail, or transmission to the personnel designated to receive such information.
(c) CAISO Costs and Revenues. Except as otherwise set forth below, Buyer (as Scheduling Coordinator for the Facility) shall be responsible for CAISO costs (including penalties, Imbalance Energy costs, and other charges) and shall be entitled to all CAISO revenues (including credits, Imbalance Energy revenues, and other payments), including revenues associated with CAISO dispatches, bid cost recovery, Inter-SC Trade credits, or other credits in respect of the Product Scheduled or delivered from the Facility. Seller shall assume all liability and reimburse Buyer for any and all CAISO costs, charges or sanctions associated with delivery of Resource Adequacy Benefits from the Facility (including Non-Availability Charges (as defined in the CAISO Tariff)); provided, any Availability Incentive Payments (as defined in the CAISO Tariff) are for the benefit of Seller and for Seller’s account and that any Non-Availability Charges (as defined in the CAISO Tariff) are the responsibility of Seller and for Seller’s account. In Exhibit D - 2
addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling, outage reporting, or generator operation (not including any new availability or non-availability mechanism), and any such sanctions or penalties are imposed upon the Facility or to Buyer as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or any CAISO directive, or to perform in accordance with this Agreement, including with respect to the outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties shall be Seller’s responsibility.
(d) CAISO Settlements. Buyer (as the Facility’s SC) shall be responsible for all settlement functions with the CAISO related to the Facility. Buyer shall render a separate invoice to Seller for any CAISO payments, charges or penalties (“CAISO Charges Invoice”) for which Seller is responsible under this Agreement. CAISO Charges Invoices shall be rendered after settlement information becomes available from the CAISO that identifies any CAISO charges.
Notwithstanding the foregoing, Seller acknowledges that the CAISO will issue additional invoices reflecting CAISO adjustments to such CAISO charges. Buyer will review, validate, and, if requested by Seller under paragraph (e) below, dispute any charges that are the responsibility of Seller in a timely manner and consistent with Buyer’s existing settlement processes for charges that are Buyer’s responsibilities. Subject to Seller’s right to dispute and to have Buyer pursue the dispute of any such invoices, Seller shall pay the amount of CAISO Charges Invoices within ten (10) Business Days of Seller’s receipt of the CAISO Charges Invoice. If Seller fails to pay such CAISO Charges Invoice within that period, Buyer may net or offset any amounts owing to it for these CAISO Charges Invoices against any future amounts it may owe to Seller under this Agreement. The obligations under this Section with respect to payment of CAISO Charges Invoices shall survive the expiration or termination of this Agreement. (e) Dispute Costs. Buyer (as the Facility’s SC) may be required by Seller to dispute CAISO settlements in respect of the Facility. Seller agrees to pay Buyer’s costs and expenses (including reasonable attorneys’ fees) associated with its involvement with such CAISO disputes to the extent they relate to CAISO charges payable by Seller with respect to the Facility that Seller has directed Buyer to dispute.
(f) Terminating Buyer’s Designation as Scheduling Coordinator. At least thirty (30) days prior to expiration of this Agreement or as soon as reasonably practicable upon an earlier termination of this Agreement, the Parties will take all actions necessary to terminate the designation of Buyer as Scheduling Coordinator for the Facility as of 11:59 p.m. on such expiration date.
(g) Master File and Resource Data Template and RA Resource Master Database. Seller shall provide all the data to Buyer that is required for the CAISO’s Master File and Resource Data Template and the CPUC’s RA Resource Master Database (or successor data systems) for the Facility consistent with this Agreement and Buyer (as SC) shall promptly provide such data to CAISO or the CPUC, as applicable. Neither Party shall change such data without the other Party’s prior written consent. At least once per Contract Year, Seller shall review and confirm that the data provided for the CAISO’s Master Data File and Resource Data Template and the CPUC’s RA Resource Master Database (or successor data systems) for this Facility remains consistent with the actual operating characteristics of the Facility and provide information to Buyer Exhibit D - 3
for Buyer to update such data with CAISO or the CPUC as appropriate and Buyer (as SC) shall promptly provide any such updates to CAISO or the CPUC. (h) NERC Reliability Standards. Buyer (as Scheduling Coordinator) shall cooperate reasonably with Seller to the extent necessary to enable Seller to comply, and for Seller to demonstrate Seller’s compliance with, NERC reliability standards. This cooperation shall include the provision of information in Buyer’s possession that Buyer (as Scheduling Coordinator) has provided to the CAISO related to the Facility or actions taken by Buyer (as Scheduling Coordinator) related to Seller’s compliance with NERC reliability standards.
Exhibit E - 1
EXHIBIT E
PROGRESS REPORTING FORM
Each Progress Report must include the following items:
1. Executive Summary.
2. Facility description.
3. Site plan of the Facility.
4. Description of any material planned changes to the Facility or the Site.
5. Gantt chart schedule showing progress on achieving each of the Milestones.
6. Summary of activities during the previous calendar quarter or month, as applicable, including any OSHA labor hour reports.
7. Forecast of activities scheduled for the current calendar quarter.
8. Written description about the progress relative to Seller’s Milestones, including whether Seller has met or is on target to meet the Milestones.
9. List of issues that are likely to potentially affect Seller’s Milestones.
10. A status report of start-up activities including a forecast of activities ongoing and after start-up, a report on Facility performance including performance projections for the next twelve (12) months.
11. Prevailing wage reports as required by Law once following each calendar quarter pursuant to the IRA.
12. Progress and schedule of all major agreements, contracts, permits, approvals, technical studies, financing agreements and major equipment purchase orders showing the start dates, completion dates, and completion percentages.
13. Pictures, in sufficient quantity and of appropriate detail, in order to document construction and start-up progress of the Facility, the interconnection into the Transmission System and all other interconnection utility services.
14. Workforce Development or Supplier Diversity Reporting (if applicable). Format to be provided by Buyer.
15. Any other documentation reasonably requested by Buyer.
Exhibit F-1
EXHIBIT F-1
AVERAGE EXPECTED ENERGY
[Average Expected Energy, MWh Per Hour]
1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00
JAN FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
The foregoing table is provided for informational purposes only, and it shall not constitute, or be deemed to constitute, an obligation of any of the Parties to this Agreement.
Exhibit F-2
EXHIBIT F-2
AVAILABLE CAPACITY
[Available Generating Capacity, MWh Per Hour] – [Insert Month] 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 Day 1 Day 2 Day 3 Day 4 Day 5
[insert additional rows for each day in the month]
Day
29 Day
30 Day
31 The foregoing table is provided for informational purposes only, and it shall not constitute, or be deemed to constitute, an obligation of any of the Parties to this Agreement.
Exhibit H - 1
EXHIBIT H
FORM OF COMMERCIAL OPERATION DATE CERTIFICATE
This certification (“Certification”) of Commercial Operation is delivered by [LICENSED PROFESSIONAL ENGINEER] (“Engineer”) to San Diego Community Power Authority, a California joint powers authority (“Buyer”), in accordance with the terms of that certain Renewable Power Purchase Agreement dated [DATE] (“Agreement”) by and between [SELLER] and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
As of [DATE], Engineer hereby certifies and represents to Buyer the following:
1. The Generating Facility and the Storage Facility are fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.
2. Seller has installed equipment for the Generating Facility with a nameplate capacity of no less than ninety-five percent (95%) of the Guaranteed Capacity.
3. Seller has installed equipment for the Storage Facility with a nameplate capacity of no less than ninety-five percent (95%) of the Storage Contract Capacity.
4. Seller has commissioned all equipment in accordance with its respective manufacturer’s specifications.
5. Seller has demonstrated functionality of the Facility’s communication systems and automatic generation control (AGC) interface to operate the Facility as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, directed by the Buyer in accordance with the PPA and/or the CAISO.
6. The Generating Facility’s testing included a performance test demonstrating peak electrical output of no less than ninety-five percent (95%) of the Guaranteed Capacity for the Generating Facility at the Interconnection Point, as adjusted for ambient conditions on the date of the Facility testing.
7. The Storage Facility is fully capable of charging, storing and discharging energy up to no less than ninety-five percent (95%) of the Storage Contract Capacity and receiving instructions to charge, store and discharge Energy, all within the operational constraints and subject to the applicable Operating Restrictions.
8. Authorization to parallel the Facility was obtained from the Participating Transmission Owner on___[DATE]____.
9. The PTO has provided documentation supporting full unrestricted release for Commercial Operation _______[DATE]_____.
10. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff on _______[DATE]_____.
Exhibit H - 2
11. Seller shall have caused the Generating Facility and the Storage Facility to be included in the Full Network Model (as defined in the CAISO Tariff) and has the ability to offer Bids into the CAISO Day-Ahead and Real-Time Markets in respect of each of the Generating Facility and Storage Facility.
12. Seller has segregated and separately metered Idle Period Auxiliary Load, and such Auxiliary Load Meter(s) have the same or greater level of accuracy of revenue quality meter or meters.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
Exhibit J - 1
EXHIBIT J
FORM OF CONSTRUCTION START DATE CERTIFICATE
This certification of Construction Start Date (“Certification”) is delivered by [SELLER ENTITY] (“Seller”) to San Diego Community Power Authority, a California joint powers authority (“Buyer”), in accordance with the terms of that certain Renewable Power Purchase Agreement dated [DATE] (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Seller hereby certifies and represents to Buyer the following:
(1) Construction Start (as defined in Exhibit B of the Agreement) has occurred, and a copy of the notice to proceed that Seller issued to its contractor as part of Construction Start is attached hereto;
(2) the Construction Start Date occurred on _____________ (the “Construction Start Date”); and
(3) the precise Site on which the Facility is located is, which must be within the boundaries of the previously identified Site:
_____________________________________________________________________.
IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as this ________ day of _____________, 20__.
[SELLER ENTITY]
By:
Printed Name:
Title:
Exhibit K - 1
EXHIBIT K
FORM OF LETTER OF CREDIT
[Issuing Bank Letterhead and Address]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [XXXXXXX]
Date:
Bank Ref.:
Amount: US$[XXXXXXXX]
Expiry Date:
Beneficiary:
San Diego Community Power Authority
PO Box 12716
San Diego, CA 92112
APPLICANT:
[FULL NAME AND ADDRESS]
Expiry Date:
Amount: US$[XXXXXX]
Ladies and Gentlemen:
By the order of __________ (“Applicant”), we, [insert bank name and address] (“Issuer”), hereby issue our Irrevocable Standby Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) in favor of San Diego Community Power, a California joint powers authority (“Beneficiary”), for an amount not to exceed the aggregate sum of U.S. $[XXXXXX] (United States Dollars [XXXXX] and 00/100), pursuant to that certain Renewable Power Purchase Agreement dated as of ______ and as amended (the “Agreement”) between Applicant and Beneficiary. This Letter of Credit shall become effective immediately and shall expire on or before our close of business on [INSERT THE EXPIRATION DATE] (the “Expiration Date”).
Funds under this Letter of Credit are available to Beneficiary by valid presentation on or before the Expiration Date of a dated statement purportedly signed by your duly authorized representative, in the form attached hereto as Exhibit A, containing one of the two alternative paragraphs set forth in paragraph 2 therein, referencing our Letter of Credit No. [XXXXXXX] (“Drawing Certificate”).
The Drawing Certificate may be presented by (a) physical delivery, (b) as a PDF attachment to an e-mail to [bank email address] or (c) facsimile to [bank fax number [XXX-XXX-XXXX]] Exhibit K - 2
confirmed by [e-mail to [bank email address]]. Transmittal by facsimile or email shall be deemed delivered when received.
The original of this Letter of Credit (and all amendments, if any) is not required to be presented in connection with any presentment of a Drawing Certificate by Beneficiary hereunder in order to receive payment.
THIS LETTER OF CREDIT, AND ANY AMENDMENT THERETO, MAY BE DELIVERED
TO THE BENEFICIARY IN ELECTRONIC FORM, AND SUCH ELECTRONIC COPY
SHALL BE DEEMED TO BE THE ORIGINAL AND VALID FOR PURPOSES OF PRESENTATION HEREUNDER.
DRAWINGS MAY ALSO BE PRESENTED BY FACSIMILE TRANSMISSION (“FAX”) TO FAX NUMBER [FAX NUMBER], UNDER TELEPHONE PRE-ADVICE TO [PHONE NUMBER] OR ALTERNATIVELY TO E-MAIL AT [E-MAIL], WITH THE ORIGINAL
THEREOF TO BE SENT THE SAME BUSINESS DAY BY OVERNIGHT COURIER TO THE ISSUER. IN THE EVENT A REQUEST IS PRESENTED VIA FAX TO THE ISSUER, IT IS
UNDERSTOOD AND AGREED THAT THE ISSUER MAY ACT ON SUCH REQUEST WITHOUT THE NEED OR THE OBLIGATION TO SECURE THE ORIGINAL. IN ANY
EVENT, THE BANK SHALL NOT BE LIABLE FOR ANY DISCREPANCY THAT MAY
ARISE BETWEEN THE REQUEST TRANSMITTED BY FAX AND THE ORIGINAL REQUEST DELIVERED AS PROVIDED HEREIN.
We hereby agree with Beneficiary that all documents presented under and in compliance with the terms of this Letter of Credit will be duly honored upon presentation to Issuer on or before the Expiration Date. All payments made under this Letter of Credit shall be made with Issuer’s own immediately available funds by means of wire transfer in immediately available United States dollars to Beneficiary’s account as indicated by Beneficiary in its Drawing Certificate or in a communication accompanying its Drawing Certificate.
Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance.
It is a condition of this Letter of Credit that it shall be automatically extended without amendment for successive periods of one (1) year from the Initial Expiration Date or from subsequent expiration dates, unless upon one hundred twenty (120) days’ prior written notice from Issuer to Beneficiary by registered mail or overnight courier service that Issuer elects not to extend this Letter of Credit, in which case it will expire on the date specified in such notice. No presentation made under this Letter of Credit after such Expiration Date will be honored. IN NO EVENT SHALL THIS LETTER OF CREDIT EXTEND PAST [FINAL EXPIRATION DATE].
Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements, this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.
This Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (2007 Revision) International Chamber of Commerce Publication No. 600 (the “UCP”), except to the extent that the terms hereof are inconsistent with the provisions of the UCP, including, but not Exhibit K - 3
limited to, Articles 14(b) and 36 of the UCP, in which case the terms of this Letter of Credit shall govern. Matters not governed by the UCP shall be governed by the laws of the State of [STATE].
In the event of an act of God, riot, civil commotion, insurrection, war or any other cause beyond Issuer’s control (as defined in Article 36 of the UCP) that interrupts Issuer’s business and causes the place for presentation of the Letter of Credit to be closed for business on the last day for presentation, the Expiration Date of the Letter of Credit will be automatically extended without amendment to a date thirty (30) calendar days after the place for presentation reopens for business.
Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available.
All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: San Diego Community Power, Chief Financial Officer, PO Box 12716, San Diego, CA 92112. Only notices to Beneficiary meeting the requirements of this paragraph shall be considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect.
All commissions, expenses, and charges incurred with this Letter of Credit are for the account of the Applicant.
VERY TRULY YOURS,
[Bank Name]
___________________________
[Insert officer name]
[Insert officer title]
Exhibit K - 4
(DRAW REQUEST SHOULD BE ON BENEFICIARY’S LETTERHEAD)
Drawing Certificate
[Insert Bank Name and Address]
Ladies and Gentlemen:
The undersigned, a duly authorized representative of San Diego Community Power, a California joint powers authority, PO Box 12716, San Diego, CA 92112, as beneficiary (“Beneficiary”) of the Irrevocable Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) issued by [insert bank name] (the “Bank”) by order of __________ (“Applicant”), hereby certifies to the Bank as follows:
1. Applicant and Beneficiary are party to that certain Renewable Power Purchase Agreement dated as of ___________, 20__ (the “Agreement”).
2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________ because a Seller Event of Default (as such term is defined in the Agreement) has occurred or other occasion provided for in the Agreement where Beneficiary is authorized to draw on the letter of credit has occurred.
OR
Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________, which equals the full available amount under the Letter of Credit, because Applicant is required to maintain the Letter of Credit in force and effect beyond the expiration date of the Letter of Credit but has failed to provide Beneficiary with a replacement Letter of Credit or other acceptable instrument within thirty (30) days prior to such expiration date.
3. The undersigned is a duly authorized representative of San Diego Community Power and is authorized to execute and deliver this Drawing Certificate on behalf of Beneficiary.
You are hereby directed to make payment of the requested amount to San Diego Community Power by wire transfer in immediately available funds to the following account:
[Specify account information]
San Diego Community Power
_______________________________
Name and Title of Authorized Representative
Date___________________________
Exhibit L - 1
EXHIBIT L
FORM OF GUARANTY
This Guaranty (this “Guaranty”) is entered into as of [_____] (the “Effective Date”) by and between [_____], a [______] (“Guarantor”), and San Diego Community Power, a California joint powers authority (together with its successors and permitted assigns, “Buyer”).
Recitals
A. Buyer and [SELLER ENTITY], a _____________________ (“Seller”), entered into that certain Renewable Power Purchase Agreement (as amended, restated or otherwise modified from time to time, the “PPA”) dated as of [____], 20___.
B. Guarantor is entering into this Guaranty as Performance Security to secure Seller’s obligations under the PPA, as required by Section 8.8 of the PPA.
C. It is in the best interest of Guarantor to execute this Guaranty inasmuch as Guarantor will derive substantial direct and indirect benefits from the execution and delivery of the PPA.
D. Initially capitalized terms used but not defined herein have the meaning set forth in the PPA.
Agreement
1. Guaranty. For value received, Guarantor does hereby unconditionally, absolutely and irrevocably guarantee, as primary obligor and not as a surety, to Buyer the full, complete and prompt payment by Seller of any and all amounts and payment obligations now or hereafter owing from Seller to Buyer under the PPA, including, without limitation, compensation for penalties, the Termination Payment, indemnification payments or other damages, as and when required pursuant to the terms of the PPA (the “Guaranteed Amount”). The Parties understand and agree that any payment by Guarantor or Seller of any portion of the Guaranteed Amount shall thereafter reduce Guarantor’s maximum aggregate liability hereunder on a dollar-for-dollar basis. This Guaranty is an irrevocable, absolute, unconditional and continuing guarantee of the full and punctual payment and performance, and not of collection, of the Guaranteed Amount and, except as otherwise expressly addressed herein, is in no way conditioned upon any requirement that Buyer first attempt to collect the payment of the Guaranteed Amount from Seller, any other guarantor of the Guaranteed Amount or any other Person or entity or resort to any other means of obtaining payment of the Guaranteed Amount. In the event Seller shall fail to duly, completely or punctually pay any Guaranteed Amount as required pursuant to the PPA, Guarantor shall promptly pay such amount as required herein.
2. Demand Notice. For avoidance of doubt, a payment shall be due for purposes of this Guaranty only when and if a payment is due and payable by Seller to Buyer under the terms and conditions of the PPA. If Seller fails to pay any Guaranteed Amount as required pursuant to the PPA for ten (10) Business Days following Seller’s receipt of Buyer’s Notice of such failure (the “Demand Notice”), then Buyer may elect to exercise its rights under this Guaranty and may make Exhibit L - 2
a demand upon Guarantor (a “Payment Demand”) for such unpaid Guaranteed Amount. A Payment Demand shall be in writing and shall reasonably specify in what manner and what amount Seller has failed to pay and an explanation of why such payment is due and owing, with a specific statement that Buyer is requesting that Guarantor pay under this Guaranty. Guarantor shall, within ten (10) Business Days following its receipt of the Payment Demand, pay the Guaranteed Amount to Buyer.
3. Scope and Duration of Guaranty. This Guaranty applies only to the Guaranteed Amount.
This Guaranty shall continue in full force and effect from the Effective Date until the earlier of the following: (x) all Guaranteed Amounts have been paid in full (whether directly or indirectly through set-off or netting of amounts owed by Buyer to Seller), or (y) replacement Performance Security is provided in an amount and form required by the terms of the PPA. Further, this Guaranty (a) shall remain in full force and effect without regard to, and shall not be affected or impaired by, any invalidity, irregularity or unenforceability in whole or in part of this Guaranty, and (b) subject to the preceding sentence, shall be discharged only by complete performance of the undertakings herein. Without limiting the generality of the foregoing, the obligations of the Guarantor hereunder shall not be released, discharged, or otherwise affected and this Guaranty shall not be invalidated or impaired or otherwise affected for the following reasons:
(i) the extension of time for the payment of any Guaranteed Amount, (ii) any amendment, modification or other alteration of the PPA, (iii) any indemnity agreement Seller may have from any party, (iv) any insurance that may be available to cover any loss, except to the extent insurance proceeds are used to satisfy the Guaranteed Amount,
(v) any voluntary or involuntary liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting, Seller or any of its assets, including, but not limited to, any rejection or other discharge of Seller’s obligations under the PPA imposed by any court, trustee or custodian or any similar official or imposed by any law, statute or regulation, in each such event in any such proceeding,
(vi) the release, modification, waiver or failure to pursue or seek relief with respect to any other guaranty, pledge or security device whatsoever, (vii) any payment to Buyer by Seller that Buyer subsequently returns to Seller pursuant to court order in any bankruptcy or other debtor-relief proceeding, (viii) those defenses based upon (A) the legal incapacity or lack of power or authority of any Person, including Seller and any representative of Seller to enter into the PPA or perform its obligations thereunder, (B) lack of due execution, delivery, validity or enforceability, including of the PPA, or (C) Seller’s inability to pay any Guaranteed Amount or perform its obligations under the PPA, or
Exhibit L - 3
(ix) any other event or circumstance that may now or hereafter constitute a defense to payment of the Guaranteed Amount, including, without limitation, statute of frauds and accord and satisfaction;
provided that Guarantor reserves the right to assert for itself any defenses, setoffs or counterclaims that Seller is or may be entitled to assert against Buyer (except for such defenses, setoffs or counterclaims that may be asserted by Seller with respect to the PPA, but that are expressly waived under any provision of this Guaranty).
4. Waivers by Guarantor. Guarantor hereby unconditionally waives as a condition precedent to the performance of its obligations hereunder, with the exception of the requirements in Paragraph 2, (a) notice of acceptance, presentment or protest with respect to the Guaranteed Amounts and this Guaranty, (b) notice of any action taken or omitted to be taken by Buyer in reliance hereon, (c) any requirement that Buyer exhaust any right, power or remedy or proceed against Seller under the PPA, and (d) any event, occurrence or other circumstance which might otherwise constitute a legal or equitable discharge of a surety. Without limiting the generality of the foregoing waiver of surety defenses, it is agreed that the occurrence of any one or more of the following shall not affect the liability of Guarantor hereunder:
(i) at any time or from time to time, without notice to Guarantor, the time for payment of any Guaranteed Amount shall be extended, or such performance or compliance shall be waived; (ii) the obligation to pay any Guaranteed Amount shall be modified, supplemented or amended in any respect in accordance with the terms of the PPA; (iii) subject to Section 9, any (a) sale, transfer or consolidation of Seller into or with any other entity, (b) sale of substantial assets by, or restructuring of the corporate existence of, Seller or (c) change in ownership of any membership interests of, or other ownership interests in, Seller; or
(iv) the failure by Buyer or any other Person to create, preserve, validate, perfect or protect any security interest granted to, or in favor of, Buyer or any Person.
5. Subrogation. Notwithstanding any payments that may be made hereunder by the Guarantor, Guarantor hereby agrees that until the earlier of payment in full of all Guaranteed Amounts or expiration of the Guaranty in accordance with Section 3, it shall not be entitled to, nor shall it seek to, exercise any right or remedy arising by reason of its payment of any Guaranteed Amount under this Guaranty, whether by subrogation or otherwise, against Seller or seek contribution or reimbursement of such payments from Seller.
6. Representations and Warranties. Guarantor hereby represents and warrants that (a) it has all necessary and appropriate [limited liability company][corporate] powers and authority and the legal right to execute and deliver, and perform its obligations under, this Guaranty, (b) this Guaranty constitutes its legal, valid and binding obligations enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting enforcement of creditors’ rights or general principles of equity, (c) the execution, delivery and performance of this Guaranty does not and will not contravene Guarantor’s organizational documents, any applicable Law or any contractual provisions binding on or Exhibit L - 4
affecting Guarantor, (d) there are no actions, suits or proceedings pending before any court, governmental agency or arbitrator, or, to the knowledge of the Guarantor, threatened, against or affecting Guarantor or any of its properties or revenues which may, in any one case or in the aggregate, adversely affect the ability of Guarantor to enter into or perform its obligations under this Guaranty, and (e) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority, and no consent of any other Person (including, any stockholder or creditor of the Guarantor), that has not heretofore been obtained is required in connection with the execution, delivery, performance, validity or enforceability of this Guaranty by Guarantor.
7. Notices. Notices under this Guaranty shall be deemed received if sent to the address specified below: (i) on the day received if served by overnight express delivery, and (ii) four (4) Business Days after mailing if sent by certified, first-class mail, return receipt requested. If transmitted by facsimile, such notice shall be deemed received when the confirmation of transmission thereof is received by the party giving the notice. Any party may change its address or facsimile to which notice is given hereunder by providing notice of the same in accordance with this Paragraph 7.
If delivered to Buyer, to it at [____]
Attn: [____]
Fax: [____]
If delivered to Guarantor, to it at [____]
Attn: [____]
Fax: [____]
8. Governing Law and Forum Selection. This Guaranty shall be governed by, and interpreted and construed in accordance with, the laws of the United States and the State of California, excluding choice of law rules. The Parties agree that any suit, action or other legal proceeding by or against any party (or its affiliates or designees) with respect to or arising out of this Guaranty shall be brought in the federal courts of the United States or the courts of the State of California sitting in the City and County of San Diego, California.
9. Miscellaneous. This Guaranty shall be binding upon Guarantor and its successors and assigns and shall inure to the benefit of Buyer and its successors and permitted assigns pursuant to the PPA. No provision of this Guaranty may be amended or waived except by a written instrument executed by Guarantor and Buyer. This Guaranty is not assignable by Guarantor without the prior written consent of Buyer. No provision of this Guaranty confers, nor is any provision intended to confer, upon any third party (other than Buyer’s successors and permitted assigns) any benefit or right enforceable at the option of that third party. This Guaranty embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements and understandings of the parties hereto, verbal or written, relating to the subject matter hereof. If any provision of this Guaranty is determined to be illegal or unenforceable (i) such provision shall be deemed restated in accordance with applicable Laws to Exhibit L - 5
reflect, as nearly as possible, the original intention of the parties hereto and (ii) such determination shall not affect any other provision of this Guaranty and all other provisions shall remain in full force and effect. This Guaranty may be executed in any number of separate counterparts, each of which when so executed shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Guaranty may be executed and delivered by electronic means with the same force and effect as if the same was a fully executed and delivered original manual counterpart.
[Signatures on next page]
Exhibit L - 6
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly executed and delivered by its duly authorized representative on the date first above written.
GUARANTOR:
[_______]
By:______________________________
Printed Name:__________________
Title:____________________________
BUYER:
[_______]
By:______________________________
Printed Name:__________________
Title:____________________________
By:______________________________
Printed Name:__________________
Title:____________________________
Exhibit M - 1
EXHIBIT M
FORM OF REPLACEMENT RA NOTICE
This Replacement RA Notice (this “Notice”) is delivered by [SELLER ENTITY] (“Seller”) to San Diego Community Power, a California joint powers authority (“Buyer”), in accordance with the terms of that certain Renewable Power Purchase Agreement dated __________ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Notice but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Pursuant to Section 3.8(b) of the Agreement, Seller hereby provides the below Replacement RA product information:
Exhibit M - 2
[SELLER ENTITY]
By:
Printed Name:
Title:
Exhibit N - 2
CDH VIDAL LLC
(“Seller”)
SAN DIEGO COMMUNITY POWER
(“Buyer”)
With additional Notices of an Event of
Default to:
Attn: Pianpian Wang
Phone: 201-825-2195
Facsimile:
Email: [email protected]
With additional Notices of an Event of
Default to:
Best, Best & Krieger
Attn: Ryan Barron, General Counsel
655 West Broadway, 15th Floor
San Diego, CA 92101
Phone: (949) 263-6568
Email: [email protected]
Emergency Contact:
Attn: Henry Cortes
Phone: 201-825-2195
Email: [email protected]
Emergency Contact:
Attn: Byron Vosburg, Director of Power
Services
Phone: (619) 880-6545
Email: [email protected]
Exhibit O - 1
EXHIBIT O
STORAGE CAPACITY TESTS
Storage Capacity Test Notice and Frequency
A. Commercial Operation Storage Capacity Test. Upon no less than five (5) Business Days’ prior Notice to Buyer, Seller shall schedule and complete a Storage Capacity Test prior to the Commercial Operation Date (“Commercial Operation Storage Capacity Test”). Such initial Commercial Operation Storage Capacity Test (and any subsequent Commercial Operation Storage Capacity Test permitted in accordance with Exhibit B) shall be performed in accordance with this Exhibit O and shall establish the initial Storage Capacity and Efficiency Rate hereunder.
B. Subsequent Storage Capacity Tests. Following the Commercial Operation Date, at least fifteen (15) days in advance of the start of each Contract Year, upon no less than ten (10) Business Days’ prior Notice to Buyer, Seller shall schedule and complete a Storage Capacity Test.
In addition, Buyer shall have the right to require a Storage Capacity Test at any time upon no less than five (5) Business Days’ prior Notice to Seller if Buyer provides data with such Notice reasonably indicating that the Storage Capacity has varied materially from the results of the most recent Storage Capacity Test. Seller shall have the right to run a Storage Capacity Test upon five (5) Business Days’ prior Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Operating Practice).
C. Test Results and Re-Setting of Storage Capacity and Efficiency Rate. No later than five (5) days following any Storage Capacity Test, Seller shall submit a testing report detailing results and findings of the test. The report shall include Storage Facility Meter readings and plant log sheets verifying the operating conditions and output of the Storage Facility at the Interconnection Point. In accordance with Section 4.9(c) of the Agreement, Part II.J and Part II.K below, the actual Efficiency Rate and Storage Capacity determined pursuant to a Storage Capacity Test (up to, but not in excess of, the original Storage Contract Capacity set forth on the Cover Sheet, as such original Storage Contract Capacity on the Cover Sheet may have been adjusted (if at all) pursuant to Exhibit B) shall become the new Storage Capacity and Efficiency Rate at the beginning of the day following the completion of the test for calculating the Storage Rate and all other purposes under this Agreement.
Storage Capacity Test Procedures
PART I. GENERAL.
Each Storage Capacity Test (including the initial Storage Capacity Test and all re-performances thereof) shall be conducted in accordance with Prudent Operating Practices and the provisions of this Exhibit O. For ease of reference, a Storage Capacity Test is sometimes referred to in this Exhibit O as an “SCT”. Buyer or its representative may be present for the SCT and may, for informational purposes only, use its own metering equipment (at Buyer’s sole cost).
PART II. REQUIREMENTS APPLICABLE TO ALL STORAGE CAPACITY TESTS.
A. Purpose of Test. Each SCT shall:
Exhibit O - 2
(1) Determine an updated Storage Capacity;
(2) Determine the amount of Energy required to fully charge the Storage Facility;
(3) Determine the Storage Facility charge Ramp Rate;
(4) Determine the Storage Facility discharge Ramp Rate; and (5) Determine an updated Efficiency Rate.
B. Test Elements. Each SCT shall include the following test elements:
x The measurement of Charging Energy, as measured by the Storage Facility Meter or other mutually agreed meter, that is required to charge the Storage Facility up to the Maximum Stored Energy Level not to exceed the Storage Contract Output (MWh) (“Energy In”);
x The measurement of Discharging Energy, as measured by the Storage Facility Meter or other mutually agreed meter, that is discharged from the Storage Facility to the Interconnection Point until the Storage Energy Level reaches zero MWh as indicated by the battery management system (“Energy Out”);
x Electrical output at Maximum Discharging Capacity (as defined in Exhibit Q) at the Storage Facility Meter (MW);
x Electrical input at Maximum Charging Capacity (as defined in Exhibit Q) at the Storage Facility Meter (MW). For the avoidance of doubt the Maximum Charging Capacity fluctuates through time with the Generating Facility Energy output;
x Amount of time between the Storage Facility’s electrical output going from zero (0) to Maximum Discharging Capacity;
x Amount of time between the Storage Facility’s electrical input going from zero (0) to Maximum Charging Capacity;
x Amount of energy required to go from zero percent (0%) Stored Energy Level to one hundred percent (100%) Stored Energy Level charging at a rate equal to the Maximum Charging Capacity. For the avoidance of doubt, the Maximum Charging Capacity fluctuates through time with the Generating Facility Energy output;
x For avoidance of doubt, Efficiency Rate shall be measured from the AC side of the solar inverters to the Storage Facility and then from the Storage Facility to the high side of the main power transformer (the Interconnection Point). Efficiency Rate is not measured from and to the Delivery Point.
Exhibit O - 3
Energy In will be exclusive of all separately metered Test Station Use for testing purposes. Furthermore, if due to lack of Generating Facility Energy, there is not enough charging energy in one (1) day to fully charge the Storage Facility then Seller may continue the charging over the next day in order to reach 100% State of Charge. To the extent the average charging rate in MW during the test is less than 150 MW, then Seller may adjust the Efficiency Rate using a methodology reasonably acceptable to Buyer, taking into account manufacturers load versus efficiency curves to adjust for such lower charging rates and its impacts on the overall Efficiency Rate.
C. Parameters. During each SCT, the following parameters shall be measured and recorded simultaneously for the Storage Facility, at ten (10) minute intervals:
(1) discharge time (minutes);
(2) charging energy (MWh);
(3) discharging energy (MWh); and
(4) Stored Energy Level (MWh).
D. Site Conditions. During each SCT, the following conditions at the Site shall be measured and recorded simultaneously at ten (10) minute intervals:
(1) Relative humidity (%);
(2) Barometric pressure (inches Hg) near the horizontal centerline of the Storage Facility; and
(3) Ambient air temperature (°F).
E. Test Showing. Each SCT must demonstrate that the Storage Facility:
(1) successfully started;
(2) operated for at least four (4) consecutive hours at Maximum Discharging Capacity;
(3) operated for at least four (4) consecutive hours at Maximum Charging Capacity. For the avoidance of doubt the Maximum Charging Capacity fluctuates through time with the Generating Facility Energy output; (4) has a Storage Capacity of an amount that is, at least, equal to the Maximum Stored Energy Level (as defined in Exhibit Q); and
(5) is able to deliver Discharging Energy to the Interconnection Point as measured by the Storage Facility Meter for four (4) consecutive hours at a rate equal to the Maximum Discharging Capacity.
Exhibit O - 4
F. Test Conditions.
(i) General. At all times during an SCT, the Storage Facility shall be operated in compliance with Prudent Operating Practices and all operating protocols recommended, required or established by the manufacturer for operation at Maximum Discharging Capacity and Maximum Charging Capacity (as each is defined in Exhibit Q).
(ii) Abnormal Conditions. If abnormal operating conditions that prevent the recordation of any required parameter occur during an SCT (including a level of irradiance that does not permit the Generating Facility to produce sufficient Charging Energy), Seller may postpone or reschedule all or part of such SCT in accordance with Part II.G below.
(iii) Instrumentation and Metering. Seller shall provide all instrumentation, metering and data collection equipment required to perform the SCT. The instrumentation, metering and data collection equipment electrical meters shall be calibrated in accordance with Prudent Operating Practice.
G. Incomplete Test. If any SCT is not completed in accordance herewith, Buyer may in its sole discretion: (i) accept the results up to the time the SCT stopped; (ii) require that the portion of the SCT not completed be completed within a reasonable specified time period; or (iii) require that the SCT be entirely repeated.
Notwithstanding the above, if Seller is unable to complete a SCT due to a Force Majeure Event or the actions or inactions of Buyer or the PTO or the Transmission Provider, Seller shall be permitted to reconduct such SCT on dates and at times reasonably acceptable to the Parties.
H. Final Report. Within fifteen (15) Business Days after the completion of any SCT, Seller shall prepare and submit to Buyer a written report of the results of the SCT, which report shall include:
(1) a record of the personnel present during the SCT that served in an operating, testing, monitoring or other such participatory role;
(2) the measured data for each parameter set forth in Part II.A through C, including copies of the raw data taken during the test; (3) the level of Storage Capacity, Energy In, Energy Out, Efficiency Rate, Charging Capacity, the current charge and discharge Ramp Rate, and Stored Energy Level determined by the SCT, including supporting calculations; and
(4) Seller’s statement of either Seller’s acceptance of the SCT or Seller’s rejection of the SCT results and reason(s) therefor.
Within ten (10) Business Days after receipt of such report, Buyer shall notify Seller in writing of either Buyer’s acceptance of the SCT results or Buyer’s rejection of Exhibit O - 5
the SCT and reason(s) therefor.
If either Party rejects the results of any SCT, such SCT shall be repeated in accordance with Part II.F.
I. Supplementary Storage Capacity Test Protocol. No later than sixty (60) days prior to commencing Facility construction, Seller shall deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) an updated supplement to this Exhibit O with additional and supplementary details, procedures and requirements applicable to Storage Capacity Tests based on the then-current design of the Facility (“Supplementary Storage Capacity Test Protocol”). Thereafter, from time to time, Seller may deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) any Seller recommended updates to the then-current Supplementary Storage Capacity Test Protocol. The initial Supplementary Storage Capacity Test Protocol (and each update thereto), once approved by Buyer, shall be deemed an amendment to this Exhibit O.
J. Adjustment to Storage Capacity. The total amount of Discharging Energy delivered to the Interconnection Point (expressed in MWh AC) during each of the first four (4) hours of discharge (up to, but not in excess of, the product of (i) the original Storage Contract Capacity set forth on the Cover Sheet, as such original Storage Contract Capacity on the Cover Sheet may have been adjusted (if at all) under this Agreement, multiplied by (ii) four (4) hours, shall be divided by four (4) hours to determine the Storage Capacity, which shall be expressed in MWAC, and shall be the new Storage Capacity in accordance with Section 4.9(c) of the Agreement until updated pursuant to a subsequent Storage Capacity Test.
K. Adjustment to Efficiency Rate.
The total amount of Energy Out (as reported in Part II.B above) divided by the total amount of Energy In (as reported in Part II.B above), and expressed as a percentage, shall be the new Efficiency Rate, and shall be used for the calculation of liquidated damages (if any) under Exhibit C until updated pursuant to a subsequent Storage Capacity Test.
Part III. INITIAL SUPPLEMENTARY STORAGE CAPACITY TEST PROTCOL A. Initial Supplementary Storage Capacity Test Protocol The initial Supplementary Storage Capacity Test Protocol outlined below shall not be binding on the Parties until delivery of the Supplementary Storage Capacity Test Protocol in accordance with Part II.I above and is included for the convenience of the Parties.
Exhibit O - 6
x Procedure:
(1) System Starting State: The Storage Facility shall be balanced using original equipment manufacturer procedures as appropriate and will be in the on-line state at the Minimum Stored Energy Level. (2) Record the initial value of the Storage Facility State of Charge (“SOC”). (3) Charge the Storage Facility at the Maximum Charging Capacity until the battery reaches the maximum SOC allowed at that rate. Continue charging the Storage Facility at the fixed maximum battery voltage (CV charging).
Stop the Storage Facility charge routine when the battery has reached the desired SOC.
(4) Record and store the AC Energy charged to the Storage Facility as measured at the Storage Facility Meter at the Storage Facility Metering Point associated with Charging Energy (“Energy In”). All separately metered Storage Facility Test Station Use shall be excluded from the measurement of Energy In.
(5) Following a rest period of no more than twelve (12) hours (unless agreed otherwise), provided that Seller shall minimize such rest period to the extent possible without curtailing Generating Facility Energy, command a real power discharge that results in an AC power output of the Storage Facility’s Maximum Discharging Capacity and maintain the discharging state until the earlier of (a) the Facility has discharged at the Maximum Discharging Capacity for four (4) consecutive hours, (b) the Storage Facility has reached the Minimum Stored Energy Level, or (c) the sustained discharging level is at least 2% less than the Maximum Discharging Capacity. (6) Record and store the AC Energy discharged (in MWh) as measured at the Storage Facility Meter. Such data point shall be used for purposes of calculation of the Storage Capacity.
(7) Record and store the AC Energy charged (in MWh) as measured at the Storage Facility Metering Point associated with Charging Energy. Such data point shall be used for purposes of calculation of the Efficiency Rate. (8) If the Storage Facility has not reached the Minimum Stored Energy Level pursuant to Part III.A.5, continue discharging the Storage Facility until it reaches the Minimum Stored Energy Level.
(9) Record and store the AC Energy discharged (in MWh) as measured at the Storage Facility Metering Points. “Energy Out” means that total AC Energy discharged (in MWh) as measured at the Storage Facility Metering Point associated with Charging Energy from the commencement of discharging pursuant to Part III.A.5 until the Storage Facility has reached the Minimum Stored Energy Level pursuant to either Part III.A.5 or Part III.A.8, as Exhibit O - 7
applicable. All separately metered Storage Facility Test Station Use shall be excluded from the measurement of Energy Out.
x Test Results:
(1) The resulting Efficiency Rate is calculated as Energy Out/Energy In. (2) The resulting Storage Capacity measurement is the sum of the total Discharging Energy at the Storage Facility Meter divided by four (4) hours.
Exhibit P - 2
Exhibit S - 1
EXHIBIT S
WORKFORCE DEVELOPMENT
Sample Supplier Diversity Survey
Please note that not all questions may apply to your business. For the questions that do not apply, please skip them or answer "Not Applicable" or “Decline to State.” Pursuant to Proposition 209, SDCP does not give preferential treatment based on race, sex, color, ethnicity, or national origin. Providing information in these categories is optional and will not impact your participation in any future SDCP solicitation selection process. Responses are collected for informational and reporting purposes only pursuant to Senate Bill (SB) 255. *Required
1. Business Name*
2. Email Address*
3. Where is your business located/headquartered?
4. Is your business certified under General Order 156 (GO 156)? GO 156 is a California Public Utilities Commission ruling that requires utility entities to report annually on their contracts with majority women-owned, minority-owned, disabled veteran-owned and LGBT-owned business enterprises (WMDVLGBTEs) in all categories. Qualified businesses become GO 156 Certified through the CPUC and are then added to the GO 156 Clearinghouse database at www.thesupplierclearinghouse.com.
Yes
No
Qualified as a WMDVLGBTBE but not GO 156 certified
5. If you answered “yes” to Question 4, when does your certification expire?
6. If you answered “yes” or “qualified, but not certified” to Question 4, in which categories are you certified or qualified? Please choose all that apply.
Minority Owned
Women Owned
LGBT Owned
Disabled Veteran Owned
Small Business Enterprise, as defined by 8(d) of the Small Business Act Exhibit S - 2
7. If your business is a minority-owned business enterprise, what GO156 certification or qualification does your business fall under?
Black American
Hispanic American
Asian Pacific American
Native American
8. Please list the Standardized Industrial Code (SIC) of the products and services your business offers. Search for your SIC in the “Commodity Codes” search bar, here:
https://sch.thesupplierclearinghouse.com/FrontEnd/SearchCertifiedDirectory.asp.
9. If certified under GO 156, please list your annual business revenue as reported to the CPUC Supplier Clearinghouse. You may check your CPUC Supplier Clearinghouse status here:
https://sch.thesupplierclearinghouse.com/FrontEnd/SearchCertifiedDirectory.asp.
10. If your business is qualified, but not GO 156 certified, please identify the reasons for not completing the certification process?
11. If your business has used GO 156 certified subcontractors for your SDCP contract, please include a list of your subcontractor business names, if the subcontract is for products or services, and the anticipated subcontract amount. Example: Electrical Design Technology, Inc.; products (batteries); $100,000.
12. If applicable, please describe any hiring policies your business has for using small, local, and/or economically disadvantaged subcontractors or for using subcontractors that qualify for the GO 156 Supplier Clearinghouse.
13. Does your business have a history of using apprenticeship programs, local hires, union labor, or multi-trade project labor agreements? Local hires can be defined as labor-sourced from within SDCP’s service area.
Yes, apprenticeship programs in this recent contract with SDCP Yes, local labor in this recent contract with SDCP
Yes, union labor in this recent contract with SDCP
Yes, multi-trade PLA in this recent contract with SDCP
Yes, apprenticeship programs but not in this contract with SDCP Yes, history of local hire but not in this contract with SDCP Yes, history of union labor but not in this contract with SDCP Exhibit S - 3
Yes, history of multi-trade PLA but not in this contract with SDCP Uses California-based labor, but not local to SDCP’s service areas None of the above
Not applicable
14. Are you a small business? Please refer to the Small Business Association’ Size Standards tool for more information: https://www.sba.gov/sizestandards.
Yes
No
15. If you answered “yes” to question 14, please describe your history with labor agreements, union labor, multi-trade labor, apprenticeship labor, or how many local workers/businesses you employ for your contract with SDCP.
16. Is there any additional feedback that you would like to provide to SDCP at this time?
17. Does the bidder have formal initiatives to promote diversity, equity, and inclusion among its workforce?
18. If the answer to question 17 is “Yes,”, please explain and provide supporting documentation.
19. Has the bidder adopted formal Environmental, Social, and Governance (ESG) goals?
20. If the answer to question 19 is “Yes”, please explain and provide supporting documentation.
GLOSSARY OF TERMS
AB – Assembly Bill - An Assembly Bill is a piece of legislation that is introduced in the Assembly. In other words, the Assembly, rather than the Senate, is the house of origin in the legislature for the legislation. In California, it is common for legislation to be referred to by its house of origin number (such as, AB 32) even once it becomes law.
AL - Advice Letter - An Advice Letter is a request by a CPUC jurisdictional entity for Commission approval, authorization, or other relief.
ALJ – Administrative Law Judge - ALJs preside over CPUC cases to develop the evidentiary record and draft proposed decisions for Commission action.
ARB – Air Resources Board - The California Air Resources Board (CARB or ARB) is the "clean air agency" in the government of California. CARB is charged with protecting the public from the harmful effects of air pollution and developing programs and actions to fight climate change.
AReM – Alliance for Retail Energy Markets - a not for profit corporation that advocates for continued development of successful customer choice in retail energy markets and provides a focused voice for competitive energy retailers and their customers in selected public policy forums on the state level. AREM represented direct access providers such as Constellation NewEnergy and Direct Energy.
BayREN - Bay Area Regional Energy Network - BayREN offers region-wide energy programs, services and resources to members of the public by promoting energy efficient buildings, reducing carbon emissions and building government capacity.
CAISO – California Independent System Operator - a non-profit independent system operator that oversees the operation of the California bulk electric power system, transmission lines and electricity market generated and transmitted by its members (~80% of California’s electric flow).
Its stated mission is to “operate the grid reliably and efficiently, provide fair and open transmission access, promote environmental stewardship and facilitate effective markets and promote infrastructure development.” CAISO is regulated by FERC and governed by a five-member governing board appointed by the governor.
CALCCA – California Community Choice Association – Association made up of Community Choice Aggregation (CCA) groups which represents the interests of California’s community choice electricity providers.
CALSEIA – California Solar Energy Industries - CALSEIA represents more than 200 companies doing solar-related business in California, including manufacturers, distributors, installation contractors, consultants, and educators. Members' annual dues support professional staff and a lobbyist who represent the common interests of California's solar industry at the Legislature, Governor's Office, and state and local agencies.
CALSLA – California City County Street Light Association - statewide association representing cities, counties and towns before the CPUC that is committed to maintaining fair and equitable street light electric rates and facilities charges, and disseminating street light related information.
CAM – Cost Allocation Mechanism - the cost recovery mechanism to cover procurement costs incurred in serving the central procurement function.
CARB – California Air Resources Board – The CARB is charged with protecting the public from the harmful effects of air pollution and developing programs and actions to fight climate change in California.
CARE – California Alternative Rates for Energy - A State program for low-income households that provides a 30% discount on monthly energy bills and a 20% discount on natural gas bills.
CARE is funded through a rate surcharge paid by all other utility customers.
CBE – Communities for a Better Environment - environmental justice organization that was founded in 1978. The mission of CBE is to build people’s power in California’s communities of color and low-income communities to achieve environmental health and justice by preventing and reducing pollution and building green, healthy and sustainable communities and environments.
CCA – Community Choice Aggregator - A community choice aggregator, sometimes referred to as community choice aggregation, allows local governments to procure power on behalf of their residents, businesses, and municipal accounts from an alternative supplier while still receiving transmission and distribution service from their existing utility provider. CCAs are an attractive option for communities that want more local control over their electricity sources, more green power than is offered by the default utility, and/or lower electricity prices. By aggregating demand, communities gain leverage to negotiate better rates with competitive suppliers and choose greener power sources.
CCSF – City and County of San Francisco - The City and County of San Francisco often engage in joint advocacy before the CPUC. San Francisco operates CleanPowerSF, a CCA.
CEC – California Energy Commission - the primary energy policy and planning agency for California, whose core responsibilities include advancing state energy policy, achieving energy efficiency, investing in energy innovation, developing renewable energy, transforming transportation, overseeing energy infrastructure and preparing for energy emergencies.
CEE – Coalition for Energy Efficiency - non-profit comprised of US and Canadian energy efficiency administrators working together to accelerate the development and availability of energy efficient products and services.
CLECA – California Large Energy Consumers Association - an organization of large, high load factor industrial customers located throughout the state; the members are in the cement, steel, industrial gas, pipeline, beverage, cold storage, food packaging, and mining industries, and share the fact that electricity costs comprise a significant portion of their costs of production. Some members are bundled customers, others are Direct Access (DA) customers, and some are served by Community Choice Aggregators (CCAs); a few members have onsite renewable generation.
CPUC – California Public Utility Commission - state agency that regulates privately owned electric, natural gas, telecommunications, water, railroad, rail transit, and passenger transportation companies, in addition to authorizing video franchises.
C&I – Commercial and Industrial – Business customers. C&I customers generally consume much higher volumes of electricity and gas. Many utilities segment their C&I customers by energy consumption (small, medium and large).
CP – Compliance Period – Time period to become RPS compliant, set by the CPUC (California Public Utilities Commission)
DA – Direct Access – An option that allows eligible customers to purchase their electricity directly from third party providers known as Electric Service Providers (ESP).
DA Cap – the maximum amount of electric usage that may be allocated to Direct Access customers in California, or more specifically, within an Investor-Owned Utility service territory.
DACC – Direct Access Customer Coalition a regulatory advocacy group comprised of educational, governmental, commercial and industrial customers that utilize direct access for all or a portion of their electrical energy requirements
DA Lottery – a random drawing by which DA waitlist customers become eligible to enroll in DA service under the currently-applicable Direct Access Cap.
DA Waitlist – customers that have officially registered their interest in becoming a DA customer but are not yet able to enroll in service because of DA cap limitations.
DAC – Disadvantaged Community - Disadvantaged communities refers to the areas throughout California which most suffer from a combination of economic, health, and environmental burdens. These burdens include poverty, high unemployment, air and water pollution, presence of hazardous wastes as well as high incidence of asthma and heart disease.
One way that the state identifies these areas is by collecting and analyzing information from communities all over the state. CalEnviroScreen, an analytical tool created by the California Environmental Protection Agency (CalEPA), combines different types of census tract-specific information into a score to determine which communities are the most burdened or "disadvantaged."
DASR – Direct Access Service Request – Request submitted by C&I customers to become direct access eligible.
Demand - The rate at which electric energy is delivered to or by a system or part of a system, generally expressed in kilowatts (kW), megawatts (MW), or gigawatts (GW), at a given instant or averaged over any designated interval of time. Demand should not be confused with Load or Energy.
DER – Distributed Energy Resource – A small-scale physical or virtual asset (e.g. EV charger, smart thermostat, behind-the-meter solar/storage, energy efficiency) that operates locally and is connected to a larger power grid at the distribution level.
Distribution - The delivery of electricity to the retail customer’s home or business through low voltage distribution lines.
DLAP – Default Load Aggregation Point – In the CAISO’s electricity optimization model, DLAP is the node at which all bids for demand should be submitted and settled.
DR – Demand Response - An opportunity for consumers to play a significant role in the operation of the electric grid by reducing or shifting their electricity usage during peak periods in response to time-based rates or other forms of financial incentives.
DRP – Distributed Resource Plans - plans that are required by statute that are intended to identify optimal locations for the deployment of distributed resources.
DWR – Department of Water Resources – DWR manages California’s water resources, systems, and infrastructure in a responsible, sustainable way.
ECR – Enhanced Community Renewable - An IOU program that reflects the "Community Solar" model of renewable energy purchasing. Customers sign up to purchase a portion of a local solar project directly from a Developer at a level that meets at least 25% of their monthly electricity demand, but up to 100%. The customer will pay the Developer for the subscribed output, and receive a credit on their utility bill that reflects their enrollment level.
ED – Energy Division - The CPUC's Energy Division develops and administers energy policy and programs to serve the public interest, advise the Commission, and ensure compliance with the Commission decisions and statutory mandates.
EE – Energy Efficiency- the use of less energy to perform the same task or produce the same result. Energy-efficient homes and buildings use less energy to heat, cool, and run appliances and electronics, and energy-efficient manufacturing facilities use less energy.
ELCC – Effective Load Carrying Capacity – The additional load met by an incremental generator while maintaining the same level of system reliability. For solar and wind resources the ELCC is the amount of capacity which can be counted for Resource Adequacy purposes.
EPIC – Electric Program Investment Charge – The EPIC program was created by the CPUC to support investments in clean energy technologies that provide benefits to the electricity ratepayers of PG&E, San Diego Gas & Electric Company (SDG&E), and Southern California Edison Company (SCE)
ERRA – Energy Resource Recovery Account – ERRA proceedings are used to determine fuel and purchased power costs which can be recovered in rates. The utilities do not earn a rate of return on these costs, and only recover actual costs. The costs are forecast for the year ahead. If the actual costs are lower than forecast, then the utility gives money back, and vice versa.
ES – Energy Storage - the capture of energy produced at one time for use at a later time to reduce imbalances between energy demand and energy production.
ESA – Energy Storage Agreement - means a battery services contract, a capacity contract, demand response contract or similar agreement.
ESP – Energy Service Provider - An energy entity that provides service to a retail or end-use customer.
EV – Electric Vehicle - a vehicle that uses one or more electric motors for propulsion.
FCR – Flexible Capacity Requirements - “Flexible capacity need” is defined as the quantity of resources needed by the CAISO to manage grid reliability during the greatest three-hour continuous ramp in each month. Resources will be considered as “flexible capacity” if they can sustain or increase output, or reduce ramping needs, during the hours of “flexible need.” “FCR” means the flexible capacity requirements established for LSEs by the CPUC pursuant to the CPUC Decisions.
GHG – Greenhouse gas - water vapor, carbon dioxide, tropospheric ozone, nitrous oxide, methane, and chlorofluorocarbons (CFCs). A gas that causes the atmosphere to trap heat radiating from the earth. The most common GHG is Carbon Dioxide, though Methane and others have this effect as well.
GRC – General Rate Case – Proceedings used to address the costs of operating and maintaining the utility system and the allocation of those costs among customer classes. For California’s three large IOUs, the GRCs are parsed into two phases. Phase I of a GRC determines the total amount the utility is authorized to collect, while Phase II determines the share of the cost each customer class is responsible and the rate schedules for each class. Each large electric utility files a GRC application every three years for review by the Public Advocates Office and interested parties and approval by the CPUC.
GTSR – Green Tariff Shared Renewables - The GTSR program enables customers to receive 50 to 100 percent of their electricity demand from renewable sources. The GTSR program has two components: the Green Tariff (GT) component and the Enhanced Community Renewables (ECR) component. Through GT, a customer may pay the difference between their current generation charge and the cost of procuring 50 to 100 percent renewables. With ECR, a customer agrees to purchase a share of a community renewable (typically solar) project directly from a developer, and in exchange will receive a credit from their utility for the customer’s avoided generation procurement.
GWh – Gigawatt-hour - The unit of energy equal to that expended in one hour at a rate of one billion watts. One GWh equals 1,000 megawatt-hours.
ICA – Integration Capacity Analysis - The enhanced integrated capacity and locational net benefit analysis quantifies the capability of the system to integrate Distributed Energy Resources (DERs) within the distribution system. Results are dependent on the most limiting element of the various power system criteria such as thermal ratings, power quality, system protection limits and safety standards of existing equipment.
IDER – Integrated Distributed Energy Resources – A CPUC proceeding that aims to more effectively coordinate the integration of demand-side resources in order to better meet customer and grid needs, while enabling California to attain its greenhouse gas reduction goals.
IDSM – Integrated Demand-Side Management - an approach that joins together all the resources utilities have at their disposal to plan, generate and supply electricity in the most efficient manner possible.
IEP – Independent Energy Producers – California’s oldest and leading nonprofit trade association, representing the interest of developers and operators of independent energy facilities and independent power marketers.
IMD – Independent Marketing Division - Under state law, IOUs are prohibited from lobbying or marketing on community choice unless the IOU forms an independent marketing division funded by shareholders rather than ratepayers. SDG&E’ and its parent company Sempra were permitted by the CPUC to create such an independent marketing division, which allowed SDG&E to lobby against plans to create a CCA program.
IOU – Investor-Owned Utility – A private electricity and natural gas provider, such as SDG&E, PG&E or SCE, which are the three largest IOUs in California.
IRP – Integrated Resource Plan – A plan which outlines an electric utility’s resource needs in order to meet expected electricity demand long-term.
kW – Kilowatt – Measure of power where power (watts) = voltage (volts) x amperage (amps) and 1 kW = 1000 watts
kWh – Kilowatt-hour – This is a measure of consumption. It is the amount of electricity that is used over some period of time, typically a one-month period for billing purposes. Customers are charged a rate per kWh of electricity used.
LCE – Lancaster Choice Energy - the CCA that serves the City of Lancaster, California.
LCFS – Low Carbon Fuel Standard – A CARB program designed to encourage the use of cleaner low-carbon fuels in California, encourage the production of those fuels, and therefore, reduce greenhouse gas emissions.
LCR – Local (RA) Capacity Requirements – The amount of Resource Adequacy capacity required to be demonstrated in a specific location or zone.
LMP – Locational Marginal Price – Each generator unit and load pocket is assigned a node in the CAISO optimization model. The model will assign a LMP to the node in both the day- ahead and real time market as it balances the system using the least cost. The LMP is comprised of three components: the marginal cost of energy, congestion and losses. The LMP is used to financially settle transactions in the CAISO.
LNBA – Locational Net Benefits Analysis - a cost-benefit analysis of distributed resources that incorporates location-specific net benefits to the electric grid.
Load - An end use device or customer that receives power from an energy delivery system. Load should not be confused with Demand, which is the measure of power that a load receives or requires. See Demand.
LSE – Load-serving Entity – Entities that have been granted authority by state, local law or regulation to serve their own load directly through wholesale energy purchases and have chosen to exercise that authority.
LTPP – Long-Term Procurement Rulemaking - This is an “umbrella” proceeding to consider, in an integrated fashion, all of the Commission’s electric procurement policies and programs.
MCE – Marin Clean Energy - the first CCA in California that began serving customers in 2010.
They serve customers in Contra Costa, Marin, Napa and Solano counties in Northern California.
MEO – Marketing Education and Outreach - a term generally used to describe various strategies to inform customers, such as to motivate consumers to take action on energy efficiency or conservation measures and change their behavior.
MW – Megawatt – measure of power. A megawatt equals 1,000 kilowatts or 1 million watts.
MWH – Megawatt-hour – measure of energy
NAESCO – National Association of Energy Service Companies - – an advocacy and accreditation organization for energy service companies (ESCOs). Energy Service Companies contract with private and public sector energy users to provide cost-effective energy efficiency retrofits across a wide spectrum of client facilities.
NBC – Non-Bypassable Charge - fees that are paid on every kilowatt-hour of electricity that is consumed from the grid. These charges can be used to fund things like energy assistance programs for low-income households and energy efficiency programs. These charges apply even if customers buy grid-supplied power from an outside power company such as a CCA.
NDA – Non-Disclosure Agreement - a contract by which one or more parties agree not to disclose confidential information that they have shared with each other.
NEM – Net Energy Metering – A program in which solar customers receive credit for excess electricity generated by solar panels.
NRDC – Natural Resources Defense Council - non-profit international environmental advocacy group.
NP-15 – North Path 15 – NP-15 is a CAISO pricing zone usually used to approximate wholesale electricity prices in northern California in PG&E’s service territory.
OIR – Order Instituting Rulemaking - A procedural document that is issued by the CPUC to start a formal proceeding. A draft OIR is issued for comment by interested parties and made final by vote of the five Commissioners of the CPUC.
OSC – Order to Show Cause - order requiring an individual or entity to explain, justify, or prove something.
ORA – Office of Ratepayer Advocates - the independent consumer advocate within the CPUC, now called Public Advocates office.
PA – Program Administrator (for EE Business Plans) IOUs and local government agencies authorized to implement CPUC-directed Energy Efficiency programs.
PCE – Peninsula Clean Energy Authority - CCA serving San Mateo County and all 20 of its cities and towns as well as the City of Los Banos.
PCC1 – RPS Portfolio Content Category 1 – Bundled renewables where the energy and REC are dynamically scheduled into a California Balancing Authority (CBA) such as the CAISO. Also known as “in-state” renewables.
PCC2 – RPS Portfolio Content Category 2 – Bundled renewables where the energy and REC are from out-of-state and not dynamically scheduled to a CBA.
PCC3 – RPS Portfolio Content Category 3 – Unbundled REC PCIA or “exit fee” - Power Charge Indifference Adjustment (PCIA) is an “exit fee” based on stranded costs of utility generation set by the California Public Utilities Commission. It is calculated annually and assessed to customers of CCAs and paid to the IOU that lost those customers as a result of the formation of a CCA.
PCL – Power Content Label – A user-friendly way of displaying information to California consumers about the energy resources used to generate the electricity they sell, as required by AB 162 (Statue of 2009) and Senate Bill 1305 (Statutes of 1997).
PD – Proposed Decision – A procedural document in a CPUC Rulemaking that is formally commented on by parties to the proceeding. A PD is a precursor to a final Decision voted on by the five Commissioners of the CPUC.
PG&E – Pacific Gas & Electric - the IOU that serves 16 million people over a 70,000 square mile service area in Northern California.
PHC – Prehearing Conference - CPUC hearing to discuss the scope of a proceeding among other matters. Interested stakeholders can request party status during these.
Pnode – Pricing Node – In the CAISO optimization model, it is a point where a physical injection or withdrawal of energy is modeled and for which a LMP is calculated.
PPA – Power Purchase Agreement – A contract used to purchase the energy, capacity and attributes from a renewable resource project.
PRP – Priority Review Project - transportation electrification pilot projects approved by the CPUC pursuant to SB 350.
PRRR – Progress on Residential Rate Reform – Pursuant to a CPUC decision, the IOUs must submit to the CPUC and parties periodic updates on the progress of their efforts to assist customers with residential rate design changes related to rate reform, including tier collapse and transition to a default time of use rate.
PUC – Public Utilities Code - California statute that contains 33 Divisions, and the range of topics within this Code includes natural gas restructuring, private energy producers, telecommunication services, and specific municipal utility districts and transit authorities. Primary statute for governance of utilities as well as CCAs in California.
PURPA – Public Utilities Regulatory Policy Act - federal statute passed by Congress to encourage fuel diversity via alternative energy sources and to introduce competition into the electric sector. It was meant to promote energy conservation (reduce demand) and promote greater use of domestic energy and renewable energy (increase supply). The law was created in response to the 1973 energy crisis.
RA – Resource Adequacy - Under its Resource Adequacy (RA) program, the California Public Utilities Commission (CPUC) requires load-serving entities—both independently owned utilities and electric service providers—to demonstrate in both monthly and annual filings that they have purchased capacity commitments of no less than 115% of their peak loads.
RAM – Renewables Auction Mechanism - a procurement program the Investor-owned Utilities (IOUs) may use to procure RPS eligible generation. The IOUs may use RAM to satisfy authorized procurement needs, for example, system Resource Adequacy needs, local Resource Adequacy needs, RPS needs, reliability needs, Local Capacity Requirements, Green Tariff Shared Renewables needs, and any need arising from Commission or legislative mandates.
RE – Renewable Energy - Energy from a source that is not depleted when used, such as wind or solar power.
REC - Renewable Energy Certificate - A REC is the property right to the environmental benefits associated with generating renewable electricity. For instance, homeowners who generate solar electricity are credited with 1 solar REC for every MWh of electricity they produce. Utilities obligated to fulfill an RPS requirement can purchase these RECs on the open market.
RES-BCT – Renewables Energy Self-Generation Bill Credit Transfer - This program enables local governments and universities to share generation credits from a system located on one government-owned property with billing accounts at other government-owned properties. The system size limit under RES-BCT is 5 MW, and bill credits are applied at the generation-only portion of a customer's retail rate.
RFO – Request for Offers a competitive procurement process used by organizations to solicit the submission of proposals from interested parties in response to a scope of services.
RPS - Renewable Portfolio Standard - Law that requires CA utilities and other load serving entities (including CCAs) to provide an escalating percentage of CA qualified renewable power (culminating at 33% by 2020) in their annual energy portfolio.
SB – Senate Bill - a piece of legislation that is introduced in the Senate. In other words, the Senate, rather than the Assembly, is the house of origin in the legislature for the legislation.
SCE – Southern California Edison - the large IOU that serves the Los Angeles and Orange County area.
SCP – Sonoma Clean Power Authority - CCA serving Sonoma County and surrounding areas in Northern California.
SDG&E – San Diego Gas & Electric - the IOU that serves San Diego county, they own the infrastructure that delivers SDCP energy to customers.
SGIP – Self-Generation Incentive Program – A program which provides incentives to support existing, new, and emerging distributed energy resources (storage, wind turbines, waste heat to power technologies, etc.)
SUE – Super User Electric - electric surcharge that’s intended to penalize consumers for excessive energy use.
SVCE – Silicon Valley Clean Energy - CCA serving Silicon Valley Area.
TCR EPS Protocol – The Climate Registry Electric Power Sector Protocol – Online tools and resources provided by The Climate Registry to assist organizations to measure, report, and reduce carbon emissions.
TE – Transportation Electrification - For the transportation sector, electrification means replacing fossil fuels with electricity as the means of powering light-duty vehicles, medium- and heavy-duty trucks, and buses. The primary goal is to reduce greenhouse gas (GHG) emissions and, ultimately, contribute to mitigating the effects of climate change on the planet.
Time-of-Use (TOU) Rates — The pricing of delivered electricity based on the estimated cost of electricity during a particular time-block. Time-of-use rates are usually divided into three or four time-blocks per 24 hour period (on-peak, mid-peak, off-peak and sometimes super off-peak) and by seasons of the year (summer and winter). Real time pricing differs from TOU rates in that it is based on actual (as opposed to forecasted) prices that may fluctuate many times a day and are weather sensitive, rather than varying with a fixed schedule.
TM – Tree Mortality - refers to the death of forest trees and provides a measure of forest health.
In the context of energy, the CPUC is tasked with utilizing its authority to extend contracts and take actions to authorize new contracts on bioenergy facilities that receive feedstock from high hazard zones.
TURN – The Utility Reform Network - A ratepayer advocacy group charged with ensuring that California IOUs implement just and reasonable rates.
Unbundled RECs - Renewable energy certificates that verify a purchase of a MWH unit of renewable power where the actual power and the certificate are “unbundled” and sold to different buyers.
VPP – Virtual Power Plant – A cloud-based network that leverages an aggregation of distributed energy resources (DERs) to shift energy demand or provide services to the grid. For example, thousands of EV chargers could charge at a slower speed and hundreds of home batteries could discharge to the grid during a demand peak to significantly reduce the procurement of traditional supply resources.
VAMO – Voluntary Allocation, Market Offer - the process for SDG&E to allocate a proportional share of their renewable portfolio to SDCP and other LSEs within the service territory.